UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

FORM 10-Q



x☒	Quarterly Report Pursuant To Section 13 or 15(d) of the Securities Exchange Act of 1934

FOR THE QUARTERLY PERIOD ENDED ~~SEPTEMBER 30, 2017~~March 31, 2020



¨☐	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	Exact name of registrant as specified in its charter and principal executive office address and telephone number					State of Incorporation	I.R.S. Employer ID. Number
1-14514	Consolidated Edison, Inc.					New York	13-3965100
	4 Irving Place,		New York,	New York	10003
	(212)	460-4600
1-1217	Consolidated Edison Company of New York, Inc.					New York	13-5009340
	4 Irving Place,		New York,	New York	10003
	(212)	460-4600

Securities Registered Pursuant to Section 12(b) of the Act:



Title of each class	Trading Symbol	Name of each exchange on which registered
Consolidated Edison, Inc.,	ED	New York Stock Exchange
Common Shares ($.10 par value)

Indicate by check mark whether the registrant (1) has 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 registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.



Consolidated Edison, Inc. (Con Edison)	Yesx	☒	No¨☐
Consolidated Edison Company of New York, Inc. (CECONY)	Yesx	☒	No¨☐

Indicate by check mark whether the registrant has 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).



Con Edison	Yesx	☒	No¨☐
CECONY	Yesx	☒	No¨☐

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer”, “accelerated filer,” “smaller reporting company,” and "emerging growth company" in Rule 12b-2 of the Exchange Act.



Con Edison
Large accelerated filerx	☒		Accelerated filer☐	~~Accelerated filer~~¨	Non-accelerated filer¨	☐
Smaller reporting company¨		☐	Emerging growth company¨	☐
CECONY
Large accelerated filer¨	☐		Accelerated filer¨☐		Non-accelerated filerx	☒
Smaller reporting company¨		☐	Emerging growth company¨	☐

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If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ¨

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).



Con Edison	Yes¨	☐	Nox	☒
CECONY	Yes¨	☐	Nox	☒

As of ~~October 31, 2017,~~April 30, 2020, Con Edison had outstanding ~~310,068,797~~334,102,042 Common Shares ($.10 par value). All of the outstanding common equity of CECONY is held by Con Edison.

Filing Format

This Quarterly Report on Form 10-Q is a combined report being filed separately by two different registrants: Consolidated Edison, Inc. (Con Edison) and Consolidated Edison Company of New York, Inc. (CECONY). CECONY is a wholly-owned subsidiary of Con Edison and, as such, the information in this report about CECONY also applies to Con Edison. As used in this report, the term the “Companies” refers to Con Edison and CECONY. However, CECONY makes no representation as to the information contained in this report relating to Con Edison or the subsidiaries of Con Edison other than itself.

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Glossary of Terms

The following is a glossary of abbreviations or acronyms that are used in the Companies’ SEC reports:



Con Edison Companies
Con Edison		Consolidated Edison, Inc.
CECONY		Consolidated Edison Company of New York, Inc.
Clean Energy Businesses		Con Edison Clean Energy Businesses, Inc., together with its subsidiaries
~~Con Edison Development~~		~~Consolidated Edison Development, Inc.~~
~~Con Edison Energy~~		~~Consolidated Edison Energy, Inc.~~
~~Con Edison Solutions~~		~~Consolidated Edison Solutions, Inc.~~
Con Edison Transmission		Con Edison Transmission, Inc., together with its subsidiaries
CET Electric		Consolidated Edison Transmission, LLC
CET Gas		Con Edison Gas Pipeline and Storage, LLC
O&R		Orange and Rockland Utilities, Inc.
RECO		Rockland Electric Company
The Companies		Con Edison and CECONY
The Utilities		CECONY and O&R

Regulatory Agencies, Government Agencies and Other Organizations
CPUC		California Public Utilities Commission
EPA		U.S. Environmental Protection Agency
FASB		Financial Accounting Standards Board
FERC		Federal Energy Regulatory Commission
IASB		International Accounting Standards Board
IRS		Internal Revenue Service
NERC		North American Electric Reliability Corporation
NJBPU		New Jersey Board of Public Utilities
NJDEP		New Jersey Department of Environmental Protection
NYISO		New York Independent System Operator
NYPA		New York Power Authority
NYSDEC		New York State Department of Environmental Conservation
NYSERDA		New York State Energy Research and Development Authority
NYSPSC		New York State Public Service Commission
NYSRC		New York State Reliability Council, LLC
PHMSA		U.S. Department of Transportation’s Pipeline and Hazardous Materials Safety Administration
PJM		PJM Interconnection LLC
SEC		U.S. Securities and Exchange Commission

Accounting
AFUDC		Allowance for funds used during construction
ASU		Accounting Standards Update
GAAP		Generally Accepted Accounting Principles in the United States of America
HLBV		Hypothetical liquidation at book value
OCI		Other Comprehensive Income
VIE		Variable Interest Entity

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Environmental
CO2		Carbon dioxide
GHG		Greenhouse gases
MGP Sites		Manufactured gas plant sites
PCBs		Polychlorinated biphenyls
PRP		Potentially responsible party
RGGI		Regional Greenhouse Gas Initiative
Superfund		Federal Comprehensive Environmental Response, Compensation and Liability Act of 1980 and similar state statutes

Units of Measure
AC		Alternating current
Bcf		Billion cubic feet
Dt		Dekatherms
kV		Kilovolt
kWh		Kilowatt-hour
MDt		Thousand dekatherms
MMlb		Million pounds
MVA		Megavolt ampere
MW		Megawatt or thousand kilowatts
MWh		Megawatt hour

Other
AMI		Advanced metering infrastructure
CARES Act		Coronavirus Aid, Relief, and Economic Security Act, as enacted on March 27, 2020
COSO		Committee of Sponsoring Organizations of the Treadway Commission
COVID-19		Coronavirus Disease 2019
DER		Distributed energy resources
~~EGWP~~		~~Employer Group Waiver Plan~~
Fitch		Fitch Ratings
First Quarter Form 10-Q		The Companies' combined Quarterly Report on Form 10-Q for the quarterly period ended March 31 of the current year
~~Second Quarter Form 10-Q~~		~~The Companies' combined Quarterly Report on Form 10-Q for the quarterly period ended June 30 of the current year~~
~~Third Quarter Form 10-Q~~		~~The Companies' combined Quarterly Report on Form 10-Q for the quarterly period ended September 30 of the current year~~
Form 10-K		The Companies’ combined Annual Report on Form 10-K for the year ended December 31, ~~2016~~2019
LTIP		Long Term Incentive Plan
Moody’s		Moody’s Investors Service
REV		Reforming the Energy Vision
S&P		S&P Global Ratings
TCJA		The federal Tax Cuts and Jobs Act of 2017, as enacted on December 22, 2017
VaR		Value-at-Risk

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TABLE OF CONTENTS



		PAGE
PART I—Financial Information
ITEM 1	Financial Statements (Unaudited)
	Con Edison
	Consolidated Income Statement	7
	Consolidated Statement of Comprehensive Income	8
	Consolidated Statement of Cash Flows	9
	Consolidated Balance Sheet	10
	Consolidated Statement of Equity	12
	CECONY
	Consolidated Income Statement	13
	Consolidated Statement of Comprehensive Income	14
	Consolidated Statement of Cash Flows	15
	Consolidated Balance Sheet	16
	Consolidated Statement of Shareholder’s Equity	18
	Notes to the Financial Statements (Unaudited)	19
ITEM 2	Management’s Discussion and Analysis of Financial Condition and Results of Operations	3943
ITEM 3	Quantitative and Qualitative Disclosures About Market Risk	69
ITEM 4	Controls and Procedures	69
PART II—Other Information		70
ITEM 1	Legal Proceedings	70
ITEM 1A	Risk Factors	70
ITEM 6	Exhibits	70
	Signatures	7172

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FORWARD-LOOKING STATEMENTS

This report includes forward-looking statements intended to qualify for the safe-harbor provisions of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. Forward-looking statements are statements of future expectation and not facts. Words such as “forecasts,” “expects,” “estimates,” “anticipates,” “intends,” “believes,” “plans,” “will” and similar expressions identify forward-looking statements. Forward-looking statements are based on information available at the time the statements are made, and accordingly speak only as of that time. Actual results or developments might differ materially from those included in the forward-looking statements because of various factors including, but not limited to:

the Companies are extensively regulated and are subject to penalties;

the Utilities’ rate plans may not provide a reasonable return;

the Companies may be adversely affected by changes to the Utilities’ rate plans;

the intentional misconduct of employees or contractors could adversely affect the Companies;

the failure of, or damage to, the Companies’ facilities could adversely affect the Companies;

a cyber attack could adversely affect the Companies;

the Companies are exposed to risks from the environmental consequences of their ~~operations;~~operations, including increased costs related to climate change;

a disruption in the wholesale energy markets or failure by an energy supplier or customer could adversely affect the Companies;

the Companies have substantial unfunded pension and other postretirement benefit liabilities;

Con Edison’s ability to pay dividends or interest depends on dividends from its subsidiaries;

the Companies require access to capital markets to satisfy funding requirements;

changes to tax laws could adversely affect the Companies;

the Companies’ strategies may not be effective to address changes in the external business environment;

the Companies face risks related to health epidemics and other outbreaks, including the COVID-19 pandemic; and

the Companies also face other risks that are beyond their control.

The Companies assume no obligation to update forward-looking statements.

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ConsolidatedEdison, Inc.

CONSOLIDATED INCOME STATEMENT (UNAUDITED)


	For the Three Months Ended September 30,		For the Nine Months Ended September 30,		For the Three Months Ended March 31,
	2017	2016	2017	2016
	(Millions of Dollars/ Except Per Share Data)
(Millions of Dollars/Except Share Data)					2020	2019
OPERATING REVENUES
Electric	$2,675	$2,769	$6,573	$6,717	$1,906	$1,941
Gas	296	235	1,593	1,246	931	1,034
Steam	62	63	448	406	250	321
Non-utility	178	350	458	999	147	218
TOTAL OPERATING REVENUES	3,211	3,417	9,072	9,368	3,234	3,514
OPERATING EXPENSES
Purchased power	460	798	1,253	2,047	308	368
Fuel	30	29	169	133	78	106
Gas purchased for resale	115	81	584	320	232	442
Other operations and maintenance	852	840	2,406	2,447	700	794
Depreciation and amortization	337	305	998	905	470	413
Taxes, other than income taxes	544	528	1,597	1,523	638	605
TOTAL OPERATING EXPENSES	2,338	2,581	7,007	7,375	2,426	2,728
Gain on sale of retail electric supply business and solar electric production project	—	104	1	104
OPERATING INCOME	873	940	2,066	2,097	808	786
OTHER INCOME (DEDUCTIONS)
Investment income	20	20	59	27	26	24
Other income	20	31	43		2	11
Allowance for equity funds used during construction	3	3	8	7	5	3
Other deductions	(4)	(5)	(12)	(16)	(72)	(24)
TOTAL OTHER INCOME	39	49	98	61
TOTAL OTHER INCOME (DEDUCTIONS)					(39)	14
INCOME BEFORE INTEREST AND INCOME TAX EXPENSE	912	989	2,164	2,158	769	800
INTEREST EXPENSE
Interest on long-term debt	183	174	539	504	224	221
Other interest	4	5	11	17	101	29
Allowance for borrowed funds used during construction	(2)	(1)	(5)	(4)	(3)
NET INTEREST EXPENSE	185	178	545	517	322	247
INCOME BEFORE INCOME TAX EXPENSE	727	811	1,619	1,641	447	553
INCOME TAX EXPENSE	270	314	599	602	55	108
NET INCOME	$457	$497	$1,020	$1,039	$392	$445
Income attributable to non-controlling interest					17	21
NET INCOME FOR COMMON STOCK					$375	$424
Net income per common share—basic	$1.48	$1.63	$3.33	$3.47	$1.13	$1.31
Net income per common share—diluted	$1.48	$1.62	$3.31	$3.46	$1.12	$1.31
DIVIDENDS DECLARED PER COMMON SHARE	$0.69	$0.67	$2.07	$2.01
AVERAGE NUMBER OF SHARES OUTSTANDING—BASIC (IN MILLIONS)	307.8	304.5	306.2	299.1	333.6	322.5
AVERAGE NUMBER OF SHARES OUTSTANDING—DILUTED (IN MILLIONS)	309.3	305.9	307.7	300.5	334.6	323.4

The accompanying notes are an integral part of these financial statements.

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Consolidated Edison, Inc.

CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME (UNAUDITED)


	For the Three Months Ended September 30,		For the Nine Months Ended September 30,		Three Months Ended March 31,
	2017	2016	2017	2016
	(Millions of Dollars)
(Millions of Dollars)					2020	2019
NET INCOME	$457	$497	$1,020	$1,039	$392	$445
INCOME ATTRIBUTABLE TO NON-CONTROLLING INTEREST					(17)	(21)
OTHER COMPREHENSIVE INCOME, NET OF TAXES
Pension and other postretirement benefit plan liability adjustments, net of taxes	1			2	5	4
TOTAL OTHER COMPREHENSIVE INCOME, NET OF TAXES	1			2	5	4
COMPREHENSIVE INCOME	$458	$498	$1,021	$1,041	$380	$428

The accompanying notes are an integral part of these financial statements.

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Consolidated Edison, Inc.

CONSOLIDATED STATEMENT OF CASH FLOWS (UNAUDITED)


	For the Nine Months Ended September 30,		For the Three Months Ended March 31,
	2017	2016
	(Millions of Dollars)
(Millions of Dollars)			2020	2019
OPERATING ACTIVITIES
Net income	$1,020	$1,039	$392	$445
PRINCIPAL NON-CASH CHARGES/(CREDITS) TO INCOME
Depreciation and amortization	998	905	470	413
Deferred income taxes	626	524	60	108
Rate case amortization and accruals	(93)	(157)	(11)	(29)
Common equity component of allowance for funds used during construction	(8)	(7)	(5)	(3)
Net derivative gains	(4)	(7)
Gain on sale of retail electric supply business and solar electric production project	(1)	(104)
Net derivative losses			83	10
Unbilled revenue and net unbilled revenue deferrals			51	11
Gain on sale of assets			—	(5)
Other non-cash items, net	(1)	99	45	(4)
CHANGES IN ASSETS AND LIABILITIES
Accounts receivable – customers	1	(138)	(87)	(43)
Materials and supplies, including fuel oil and gas in storage	2	15	26	31
Revenue decoupling mechanism receivable			(32)	(55)
Other receivables and other current assets	(39)	90	28	19
Income taxes receivable	33	100
Taxes receivable			(1)	—
Prepayments	(433)	(403)	(479)	(448)
Accounts payable	(54)	142	(156)	(108)
Pensions and retiree benefits obligations, net	305	464	4	93
Pensions and retiree benefits contributions	(462)	(510)	(4)
Accrued taxes	(21)	(21)	(45)	(19)
Accrued interest	59	66	85	97
Superfund and environmental remediation costs, net	(9)	68	(3)	(1)
Distributions from equity investments	87	45	11	14
System benefit charge	194	193	(19)	6
Deferred charges, noncurrent assets and other regulatory assets	(18)	(104)	(38)	(34)
Deferred credits and other regulatory liabilities	(40)	116	116	94
Other current and noncurrent liabilities	85	(79)	(79)	(124)
NET CASH FLOWS FROM OPERATING ACTIVITIES	2,227	2,336	412	464
INVESTING ACTIVITIES
Utility construction expenditures	(2,148)	(2,057)	(767)	(783)
Cost of removal less salvage	(185)	(149)	(68)	(72)
Non-utility construction expenditures	(288)	(436)	(130)	(48)
Investments in electric and gas transmission projects	(29)	(1,040)	(8)	(38)
Investments in/acquisitions of renewable electric production projects	(1)	(241)
Proceeds from the transfer of assets to NY Transco	—	122
Proceeds from sale of assets	34	250	—	48
Restricted cash	13	(21)
Other investing activities	32	(145)	5
NET CASH FLOWS USED IN INVESTING ACTIVITIES	(2,572)	(3,717)	(968)	(888)
FINANCING ACTIVITIES
Net payment of short-term debt	(698)	(928)	(484)	(1,131)
Issuance of long-term debt	997	1,765	1,600	825
Retirement of long-term debt	(429)	(407)	(38)	(11)
Debt issuance costs	(12)	(16)	(22)	(1)
Common stock dividends	(600)	(570)	(243)	(226)
Issuance of common shares - public offering	343	702	88	425
Issuance of common shares for stock plans	37	38	14	13
Distribution to noncontrolling interest	—	(1)	(2)
NET CASH FLOWS (USED IN)/FROM FINANCING ACTIVITIES	(362)	583
CASH AND TEMPORARY CASH INVESTMENTS:
NET CASH FLOWS FROM (USED IN) FINANCING ACTIVITIES			913	(108)
CASH, TEMPORARY CASH INVESTMENTS, AND RESTRICTED CASH:
NET CHANGE FOR THE PERIOD	(707)	(798)	357	(532)
BALANCE AT BEGINNING OF PERIOD	776	944	1,217	1,006
BALANCE AT END OF PERIOD	$69	$146	$1,574	$474
LESS: CHANGE IN CASH BALANCES HELD FOR SALE	—	(4)
BALANCE AT END OF PERIOD EXCLUDING HELD FOR SALE	$69	$150
SUPPLEMENTAL DISCLOSURE OF CASH INFORMATION
Cash paid/(received) during the period for:
Cash paid during the period for:
Interest	$479	$437	$143	$130
Income taxes	$(34)	$(144)	$2	$3
SUPPLEMENTAL DISCLOSURE OF NON-CASH INFORMATION
Construction expenditures in accounts payable	$352	$242	$343	$300
Issuance of common shares for dividend reinvestment	$35	$35	$12
Software licenses acquired but unpaid as of end of period			$80	$100
Equipment acquired but unpaid as of end of period			$33	—

The accompanying notes are an integral part of these financial statements.

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Consolidated Edison, Inc.

CONSOLIDATED BALANCE SHEET (UNAUDITED)


	September 30, 2017	December 31, 2016
	(Millions of Dollars)
(Millions of Dollars)			March 31, 2020	December 31, 2019
ASSETS
CURRENT ASSETS
Cash and temporary cash investments	$69	$776	$1,395	$981
Accounts receivable – customers, less allowance for uncollectible accounts of $63 and $69 in 2017 and 2016, respectively	1,111	1,106
Other receivables, less allowance for uncollectible accounts of $8 and $14 in 2017 and 2016, respectively	181	195
Income taxes receivable	46	79
Accounts receivable – customers, less allowance for uncollectible accounts of $75 and $70 in 2020 and 2019, respectively			1,318	1,236
Other receivables, less allowance for uncollectible accounts of $5 and $4 in 2020 and 2019, respectively			188	184
Taxes receivable			21	20
Accrued unbilled revenue	411	447	443	599
Fuel oil, gas in storage, materials and supplies, at average cost	337	339	326	352
Prepayments	592	159	739	260
Regulatory assets	109	100	143	128
Restricted cash	41	54	179	236
Revenue decoupling mechanism			108	76
Other current assets	199	151	166	200
TOTAL CURRENT ASSETS	3,096	3,406	5,026	4,272
INVESTMENTS	1,977	1,921	2,011	2,065
UTILITY PLANT, AT ORIGINAL COST
Electric	28,595	27,747	32,186	31,866
Gas	7,972	7,524	10,300	10,107
Steam	2,458	2,421	2,625	2,601
General	2,891	2,719	3,606	3,562
TOTAL	41,916	40,411	48,717	48,136
Less: Accumulated depreciation	8,904	8,541	10,530	10,322
Net	33,012	31,870	38,187	37,814
Construction work in progress	1,415	1,175	2,005	1,937
NET UTILITY PLANT	34,427	33,045	40,192	39,751
NON-UTILITY PLANT
Non-utility property, less accumulated depreciation of $185 and $140 in 2017 and 2016, respectively	1,686	1,482
Non-utility property, less accumulated depreciation of $423 and $391 in 2020 and 2019, respectively			3,797	3,829
Construction work in progress	615	689	446	309
NET PLANT	36,728	35,216	44,435	43,889
OTHER NONCURRENT ASSETS
Goodwill	428		446
Intangible assets, less accumulated amortization of $12 and $6 in 2017 and 2016, respectively	114	124
Intangible assets, less accumulated amortization of $152 and $126 in 2020 and 2019, respectively			1,532	1,557
Regulatory assets	6,769	7,024	4,732	4,859
Operating lease right-of-use asset			848	857
Other deferred charges and noncurrent assets	134	136	129	134
TOTAL OTHER NONCURRENT ASSETS	7,445	7,712	7,687	7,853
TOTAL ASSETS	$49,246	$48,255	$59,159	$58,079

The accompanying notes are an integral part of these financial statements.

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Consolidated Edison, Inc.

CONSOLIDATED BALANCE SHEET (UNAUDITED)


	September 30, 2017	December 31, 2016
	(Millions of Dollars)
(Millions of Dollars)			March 31, 2020	December 31, 2019
LIABILITIES AND SHAREHOLDERS’ EQUITY
CURRENT LIABILITIES
Long-term debt due within one year	$687	$39	$2,093	$1,446
Notes payable	356	1,054	1,208	1,692
Accounts payable	1,057	1,147	1,015	1,164
Customer deposits	344	352	344	346
Accrued taxes	43	64	31	76
Accrued interest	209	150	238	153
Accrued wages	105	101	116	102
Fair value of derivative liabilities	70	77	153	123
Regulatory liabilities	58	128	123	102
System benefit charge	628	434	628	647
Operating lease liabilities			77	65
Other current liabilities	358	297	285	371
TOTAL CURRENT LIABILITIES	3,915	3,843	6,311	6,287
NONCURRENT LIABILITIES
Provision for injuries and damages	164	160	129	130
Pensions and retiree benefits	1,443	1,847	1,329	1,516
Superfund and other environmental costs	745	753	737	734
Asset retirement obligations	256	246	429	425
Fair value of derivative liabilities	83	40	228	105
Deferred income taxes and unamortized investment tax credits	10,744	10,205	6,348	6,227
Operating lease liabilities			799	809
Regulatory liabilities	1,873	1,905	4,689	4,827
Other deferred credits and noncurrent liabilities	262	215	270	279
TOTAL NONCURRENT LIABILITIES	15,570	15,371	14,958	15,052
LONG-TERM DEBT	14,651	14,735	19,423	18,527
EQUITY
Common shareholders’ equity	15,102	14,298	18,261	18,022
Noncontrolling interest	8		206	191
TOTAL EQUITY (See Statement of Equity)	15,110	14,306	18,467	18,213
TOTAL LIABILITIES AND EQUITY	$49,246	$48,255	$59,159	$58,079

The accompanying notes are an integral part of these financial statements.

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Consolidated Edison, Inc.

CONSOLIDATED STATEMENT OF EQUITY (UNAUDITED)



(In Millions, except for dividends per share)	Common Stock		Additional Paid-In Capital	Retained Earnings	Treasury Stock		Capital Stock Expense	Accumulated Other Comprehensive Income/(Loss)	Non- controlling Interest	Total
(In Millions, except for dividends per share)	Shares	Amount	Additional Paid-In Capital	Retained Earnings	Shares	Amount	Capital Stock Expense	Accumulated Other Comprehensive Income/(Loss)	Non- controlling Interest	Total
BALANCE AS OF DECEMBER 31, 2018	321	$34	$7,117	$10,728	23	$(1,038)	$(99)	$(16)	$113	$16,839
Net income				424					21	445
Common stock dividends ($0.74 per share)				(237)						(237)
Issuance of common shares – public offering	6		433				(8)			425
Issuance of common shares for stock plans			27							27
Other comprehensive income								4		4
Distributions to noncontrolling interest									(2)	(2)
BALANCE AS OF MARCH 31, 2019	327	$34	$7,577	$10,915	23	$(1,038)	$(107)	$(12)	$132	$17,501

BALANCE AS OF BALANCE AS OF DECEMBER 31, 2019	333	$35	$8,054	$11,100	23	$(1,038)	$(110)	$(19)	$191	$18,213
Net income				375					17	392
Common stock dividends ($0.76 per share)				(255)						(255)
Issuance of common shares - public offering	1		$88							88
Issuance of common shares for stock plans			26							26
Other comprehensive income								5		5
Distributions to noncontrolling interest									(2)	(2)
BALANCE AS OF MARCH 31, 2020	334	$35	$8,168	$11,220	23	$(1,038)	$(110)	$(14)	$206	$18,467

(In Millions) Common Stock Additional
Paid-In
Capital Retained
Earnings Treasury Stock Capital
Stock
Expense Accumulated
Other
Comprehensive
Income/(Loss) Noncontrolling
Interest Total
Shares Amount Shares Amount
BALANCE AS OF
DECEMBER 31, 2015 293 $32 $5,030 $9,123 23 $(1,038) $(61) $(34) $9 $13,061
Net income 310 310
Common stock dividends (197) (197)
Issuance of common shares for stock plans 1 28 28
Other comprehensive income
—
Noncontrolling interest (1) (1)
BALANCE AS OF
MARCH 31, 2016 294 $32 $5,058 $9,236 23 $(1,038) $(61) $(34) $8 $13,201
Net income 232 232
Common stock dividends (204) (204)
Issuance of common shares - public offering 10 1 723 (22) 702
Issuance of common shares for stock plans
26 26
Other comprehensive income 1 1
BALANCE AS OF
JUNE 30, 2016 304 $33 $5,807 $9,264 23 $(1,038) $(83) $(33) $8 $13,958
Net income 497 497
Common stock dividends (204) (204)
Issuance of common shares for stock plans 1
23 23
Other comprehensive income 1 1
BALANCE AS OF
SEPTEMBER 30, 2016 305 $33 $5,830 $9,557 23 $(1,038) $(83) $(32) $8 $14,275

BALANCE AS OF DECEMBER 31, 2016 305 $33 $5,854 $9,559 23 $(1,038) $(83) $(27) $8 $14,306
Net income 388 388
Common stock dividends (211) (211)
Issuance of common shares for stock plans 24 24
Other comprehensive loss (1) (1)
BALANCE AS OF
MARCH 31, 2017 305 $33 $5,878 $9,736 23 $(1,038) $(83) $(28) $8 $14,506
Net income 175 175
Common stock dividends (210) (210)
Issuance of common shares for stock plans 1 26 26
Other comprehensive income 1 1
BALANCE AS OF
JUNE 30, 2017 306 $33 $5,904 $9,701 23 $(1,038) $(83) $(27) $8 $14,498
Net income 457 457
Common stock dividends (214) (214)
Issuance of common shares - public offering 4
345 (2) 343
Issuance of common shares for stock plans

25 25
Other comprehensive income 1 1
BALANCE AS OF
SEPTEMBER 30, 2017 310 $33 $6,274 $9,944 23 $(1,038) $(85) $(26) $8 $15,110

The accompanying notes are an integral part of these financial statements.

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Consolidated Edison Company of New York, Inc.

CONSOLIDATED INCOME STATEMENT (UNAUDITED)


	For the Three Months Ended September 30,		For the Nine Months Ended September 30,		For the Three Months Ended March 31,
	2017	2016	2017	2016
	(Millions of Dollars)
(Millions of Dollars)					2020	2019
OPERATING REVENUES
Electric	$2,469	$2,557	$6,079	$6,222	$1,770	$1,797
Gas	268	208	1,421	1,113	834	921
Steam	62	63	448	406	250	321
TOTAL OPERATING REVENUES	2,799	2,828	7,948	7,741	2,854	3,039
OPERATING EXPENSES
Purchased power	400	495	1,110	1,216	273	322
Fuel	30	29	169	133	78	106
Gas purchased for resale	58	34	372	217	195	317
Other operations and maintenance	691	724	1,992	2,105	569	659
Depreciation and amortization	300	278	891	825	390	334
Taxes, other than income taxes	520	502	1,523	1,446	607	575
TOTAL OPERATING EXPENSES	1,999	2,062	6,057	5,942	2,112	2,313
OPERATING INCOME	800	766	1,891	1,799	742	726
OTHER INCOME (DEDUCTIONS)
Investment and other income	2	4	9	6	2	9
Allowance for equity funds used during construction	3	2	7	6	4	3
Other deductions	(5)	(4)	(10)		(67)	(19)
TOTAL OTHER INCOME	—	2	6	2
TOTAL OTHER INCOME (DEDUCTIONS)					(61)	(7)
INCOME BEFORE INTEREST AND INCOME TAX EXPENSE	800	768	1,897	1,801	681	719
INTEREST EXPENSE
Interest on long-term debt	155	150	456	440	172	169
Other interest	4	5	11	14	11	17
Allowance for borrowed funds used during construction	(2)	(1)	(4)	(3)	(3)
NET INTEREST EXPENSE	157	154	463	451	180	183
INCOME BEFORE INCOME TAX EXPENSE	643	614	1,434	1,350	501	536
INCOME TAX EXPENSE	242	226	551	491	95	124
NET INCOME	$401	$388	$883	$859	$406	$412

The accompanying notes are an integral part of these financial statements.

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Consolidated Edison Company of New York, Inc.

CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME (UNAUDITED)


	For the Three Months Ended September 30,		For the Nine Months Ended September 30,		Three Months Ended March 31,
	2017	2016	2017	2016
	(Millions of Dollars)
(Millions of Dollars)					2020	2019
NET INCOME	$401	$388	$883	$859	$406	$412
OTHER COMPREHENSIVE INCOME, NET OF TAXES
Pension and other postretirement benefit plan liability adjustments, net of taxes	1	—	1		1	—
TOTAL OTHER COMPREHENSIVE INCOME, NET OF TAXES	1	—	1		1	—
COMPREHENSIVE INCOME	$402	$388	$884	$860	$407	$412

The accompanying notes are an integral part of these financial statements.

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Consolidated Edison Company of New York, Inc.

CONSOLIDATED STATEMENT OF CASH FLOWS (UNAUDITED)


	For the Nine Months Ended September 30,		For the Three Months Ended March 31,
	2017	2016
	(Millions of Dollars)
(Millions of Dollars)			2020	2019
OPERATING ACTIVITIES
Net income	$883	$859	$406	$412
PRINCIPAL NON-CASH CHARGES/(CREDITS) TO INCOME
Depreciation and amortization	891	825	390	334
Deferred income taxes	566	569	94	122
Rate case amortization and accruals	(107)	(170)	(11)	(29)
Common equity component of allowance for funds used during construction	(7)	(6)	(4)	(3)
Unbilled revenue and net unbilled revenue deferrals			41	19
Gain on sale of assets			—	(5)
Other non-cash items, net	(14)	7	35	(11)
CHANGES IN ASSETS AND LIABILITIES
Accounts receivable – customers	18	(79)	(78)	(36)
Materials and supplies, including fuel oil and gas in storage	(18)	15	20	24
Revenue decoupling mechanism			(22)	(55)
Other receivables and other current assets	29	18	25	31
Accounts receivable from affiliated companies	12	38	(8)	(6)
Prepayments	(398)	(351)	(473)	(438)
Accounts payable	(20)	82	(115)	(75)
Accounts payable to affiliated companies	1	8
Pensions and retiree benefits obligations, net	274	439	3	87
Pensions and retiree benefits contributions	(416)	(472)	(4)	(3)
Superfund and environmental remediation costs, net	(7)	76	(5)	(2)
Accrued taxes	(18)	(17)	(42)	(18)
Accrued taxes to affiliated companies	(119)	(2)
Accrued interest	61	43	75	72
System benefit charge	175	176	(20)	7
Deferred charges, noncurrent assets and other regulatory assets	(60)	(153)	(39)	(47)
Deferred credits and other regulatory liabilities	77	165	122	92
Other current and noncurrent liabilities	(13)	(53)	(50)	(77)
NET CASH FLOWS FROM OPERATING ACTIVITIES	1,790	2,017	340	395
INVESTING ACTIVITIES
Utility construction expenditures	(2,020)	(1,932)	(719)	(728)
Cost of removal less salvage	(179)	(146)	(67)	(70)
Proceeds from the transfer of assets to NY Transco	—	122
Restricted cash	2	13
Proceeds from sale of assets			—	48
NET CASH FLOWS USED IN INVESTING ACTIVITIES	(2,197)	(1,943)	(786)	(750)
FINANCING ACTIVITIES
Net payment of short-term debt	(453)	(553)	(540)	(107)
Issuance of long-term debt	500	550	1,600	—
Retirement of long-term debt	—	(400)
Debt issuance costs	(7)	(6)	(23)	(1)
Capital contribution by parent	279	76	25	225
Dividend to parent	(597)	(558)	(246)	(228)
NET CASH FLOWS USED IN FINANCING ACTIVITIES	(278)	(891)
CASH AND TEMPORARY CASH INVESTMENTS:
NET CASH FLOWS FROM (USED) FINANCING ACTIVITIES			816	(111)
CASH AND TEMPORARY CASH INVESTMENTS
NET CHANGE FOR THE PERIOD	(685)	(817)	370	(466)
BALANCE AT BEGINNING OF PERIOD	702	843	933	818
BALANCE AT END OF PERIOD	$17	$26	$1,303	$352
SUPPLEMENTAL DISCLOSURE OF CASH INFORMATION
Cash paid/(received) during the period for:
Cash paid during the period for:
Interest	$388	$386	$97	$101
Income taxes	$96	$(130)	$12	$8
SUPPLEMENTAL DISCLOSURE OF NON-CASH INFORMATION
Construction expenditures in accounts payable	$240	$195	$292	$267
Software licenses acquired but unpaid as of end of period			$76	$95
Equipment acquired but unpaid as of end of period			$33	—

The accompanying notes are an integral part of these financial statements.

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Consolidated Edison Company of New York, Inc.

CONSOLIDATED BALANCE SHEET (UNAUDITED)


	September 30, 2017	December 31, 2016
	(Millions of Dollars)
(Millions of Dollars)			March 31, 2020	December 31, 2019
ASSETS
CURRENT ASSETS
Cash and temporary cash investments	$17	$702	$1,303	$933
Accounts receivable – customers, less allowance for uncollectible accounts of $58 and $65 in 2017 and 2016, respectively	1,021	1,032
Other receivables, less allowance for uncollectible accounts of $7 and $13 in 2017 and 2016, respectively	85	81
Accounts receivable – customers, less allowance for uncollectible accounts of $70 and $65 in 2020 and 2019, respectively			1,226	1,153
Other receivables, less allowance for uncollectible accounts of $3 in 2020 and 2019			118	120
Accrued unbilled revenue	382	399	331	477
Accounts receivable from affiliated companies	97	109	81	73
Fuel oil, gas in storage, materials and supplies, at average cost	288	270	273	293
Prepayments	498	100	651	178
Regulatory assets	100	90	125	113
Restricted cash	—	2
Revenue decoupling mechanism receivable			98	76
Other current assets	62	95	100	127
TOTAL CURRENT ASSETS	2,550	2,880	4,306	3,543
INVESTMENTS	370	315	417	461
UTILITY PLANT, AT ORIGINAL COST
Electric	26,930	26,122	30,292	29,989
Gas	7,229	6,814	9,411	9,229
Steam	2,458	2,421	2,625	2,601
General	2,640	2,490	3,314	3,271
TOTAL	39,257	37,847	45,642	45,090
Less: Accumulated depreciation	8,170	7,836	9,682	9,490
Net	31,087	30,011	35,960	35,600
Construction work in progress	1,327	1,104	1,874	1,812
NET UTILITY PLANT	32,414	31,115	37,834	37,412
NON-UTILITY PROPERTY
Non-utility property, less accumulated depreciation of $25 in 2017 and 2016	4	4
Non-utility property, less accumulated depreciation of $25 in 2020 and 2019			2
NET PLANT	32,418	31,119	37,836	37,414
OTHER NONCURRENT ASSETS
Regulatory assets	6,248	6,473	4,365	4,487
Operating lease right-of-use asset			591	601
Other deferred charges and noncurrent assets	61	69	53	51
TOTAL OTHER NONCURRENT ASSETS	6,309	6,542	5,009	5,139
TOTAL ASSETS	$41,647	$40,856	$47,568	$46,557

The accompanying notes are an integral part of these financial statements.

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Consolidated Edison Company of New York, Inc.

CONSOLIDATED BALANCE SHEET (UNAUDITED)


	September 30, 2017	December 31, 2016
	(Millions of Dollars)
(Millions of Dollars)				March 31, 2020	December 31, 2019
LIABILITIES AND SHAREHOLDER’S EQUITY
CURRENT LIABILITIES
Long-term debt due within one year	$600		$—	$350
Notes payable	147	600		597	1,137
Accounts payable	802	876		848	956
Accounts payable to affiliated companies	11	10		13
Customer deposits	332	336		331	334
Accrued taxes	32	50		29	71
Accrued taxes to affiliated companies	—	119
Accrued interest	172	111		188	113
Accrued wages	95	91		105	92
Fair value of derivative liabilities	59	66		99	81
Regulatory liabilities	38	90		93	63
System benefit charge	573	398		567	587
Operating lease liabilities				59	54
Other current liabilities	207	242		224	280
TOTAL CURRENT LIABILITIES	3,068	2,989		3,503	4,131
NONCURRENT LIABILITIES
Provision for injuries and damages	158	154		124	125
Pensions and retiree benefits	1,150	1,544		1,080	1,241
Superfund and other environmental costs	648	655		657	654
Asset retirement obligations	234	227		366	362
Fair value of derivative liabilities	73	33		113	65
Deferred income taxes and unamortized investment tax credits	10,060	9,450		6,155	6,000
Operating lease liabilities				548	551
Regulatory liabilities	1,673	1,712		4,262	4,427
Other deferred credits and noncurrent liabilities	217	190		233	240
TOTAL NONCURRENT LIABILITIES	14,213	13,965		13,538	13,665
LONG-TERM DEBT	11,971	12,073		16,194	14,614
SHAREHOLDER’S EQUITY (See Statement of Shareholder’s Equity)	12,395	11,829		14,333	14,147
TOTAL LIABILITIES AND SHAREHOLDER’S EQUITY	$41,647	$40,856		$47,568	$46,557

The accompanying notes are an integral part of these financial statements.

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Consolidated Edison Company of New York, Inc.

CONSOLIDATED STATEMENT OF SHAREHOLDER’S EQUITY (UNAUDITED)


	Common Stock		Additional Paid-In Capital	Retained Earnings	Repurchased Con Edison Stock	Capital Stock Expense	Accumulated Other Comprehensive Income/(Loss)	Total	Common Stock		Additional Paid-In Capital	Retained Earnings	Repurchased Con Edison Stock	Capital Stock Expense	Accumulated Other Comprehensive Income/(Loss)	Total
(In Millions)	Shares	Amount
BALANCE AS OF DECEMBER 31, 2015	235	$589	$4,247	$7,611	$(962)	$(61)	$(9)	$11,415
(In Millions									Shares	Amount	Additional Paid-In Capital	Retained Earnings	Repurchased Con Edison Stock	Capital Stock Expense	Accumulated Other Comprehensive Income/(Loss)	Total
BALANCE AS OF DECEMBER 31, 2018									235	$589
Net income												412				412
Common stock dividend to parent												(228)				(228)
Capital contribution by parent											225					225
BALANCE AS OF MARCH 31, 2019									235	$589	$4,994	$8,765	$(962)	$(62)	$(5)	$13,319

BALANCE AS OF DECEMBER 31, 2019									235	$589	$5,669	$8,919	$(962)	$(62)	$(6)	$14,147
Net income				310				310				406				406
Common stock dividend to parent				(186)				(186)				(246)				(246)
Capital contribution by parent			23					23			25					25
Other comprehensive income							—	—							1
BALANCE AS OF MARCH 31, 2016	235	$589	$4,270	$7,735	$(962)	$(61)	$(9)	$11,562
Net income				161				161
Common stock dividend to parent				(186)				(186)
Capital contribution by parent			28					28
Other comprehensive income							1
BALANCE AS OF JUNE 30, 2016	235	$589	$4,298	$7,710	$(962)	$(61)	$(8)	$11,566
Net income				388				388
Common stock dividend to parent				(186)				(186)
Capital contribution by parent			25					25
Other comprehensive income							—	—
BALANCE AS OF SEPTEMBER 30, 2016	235	$589	$4,323	$7,912	$(962)	$(61)	$(8)	$11,793

BALANCE AS OF DECEMBER 31, 2016	235	$589	$4,347	$7,923	$(962)	$(61)	$(7)	$11,829
Net income				339				339
Common stock dividend to parent				(199)				(199)
Capital contribution by parent			22					22
Other comprehensive income							—	—
BALANCE AS OF MARCH 31, 2017	235	$589	$4,369	$8,063	$(962)	$(61)	$(7)	$11,991
Net income				143				143
Common stock dividend to parent				(199)				(199)
Capital contribution by parent			23					23
Other comprehensive income							—	—
BALANCE AS OF JUNE 30, 2017	235	$589	$4,392	$8,007	$(962)	$(61)	$(7)	$11,958
Net income				401				401
Common stock dividend to parent				(199)				(199)
Capital contribution by parent			235			(1)		234
Other comprehensive income							1
BALANCE AS OF SEPTEMBER 30, 2017	235	$589	$4,627	$8,209	$(962)	$(62)	$(6)	$12,395
BALANCE AS OF MARCH 31, 2020									235	$589	$5,694	$9,079	$(962)	$(62)	$(5)	$14,333

The accompanying notes are an integral part of these financial statements.

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NOTES TO THE FINANCIAL STATEMENTS (UNAUDITED)

General

These combined notes accompany and form an integral part of the separate consolidated financial statements of each of the ~~two~~2 separate registrants: Consolidated Edison, Inc. and its subsidiaries (Con Edison) and Consolidated Edison Company of New York, Inc. and its subsidiaries (CECONY). CECONY is a subsidiary of Con Edison and as such its financial condition and results of operations and cash flows, which are presented separately in the CECONY consolidated financial statements, are also consolidated, along with those of Orange and Rockland Utilities, Inc. (O&R), Con Edison Clean Energy Businesses, Inc. (together with its subsidiaries, the Clean Energy Businesses) and Con Edison Transmission, Inc. (together with its subsidiaries, Con Edison Transmission) in Con Edison’s consolidated financial statements. The term “Utilities” is used in these notes to refer to CECONY and O&R.

As used in these notes, the term “Companies” refers to Con Edison and CECONY and, except as otherwise noted, the information in these combined notes relates to each of the Companies. However, CECONY makes no representation as to information relating to Con Edison or the subsidiaries of Con Edison other than itself.

The separate interim consolidated financial statements of each of the Companies are unaudited but, in the opinion of their respective managements, reflect all adjustments (which include only normally recurring adjustments) necessary for a fair ~~presentation~~statement of the results for the interim periods presented. The Companies’ separate interim consolidated financial statements should be read together with their separate audited financial statements (including the combined notes thereto) included in Item 8 of their combined Annual Report on Form 10-K for the year ended December 31, 2016 and their separate unaudited financial statements (including the combined notes thereto) included in Part 1, Item 1 of their combined Quarterly Report on Form 10-Q for the quarterly periods ended March 31, 2017 and June 30, 2017.2019. Certain prior period amounts have been reclassified to conform to the current period presentation.

Con Edison has ~~two~~2 regulated utility subsidiaries: CECONY and O&R. CECONY provides electric service and gas service in New York City and Westchester County. The company also provides steam service in parts of Manhattan. O&R, along with its regulated utility subsidiary, provides electric service in southeastern New York and northern New Jersey and gas service in southeastern New York. Con Edison Clean Energy Businesses, Inc. ~~has three subsidiaries: Consolidated Edison Development, Inc. (Con Edison Development)~~, ~~a company that~~through its subsidiaries, develops, owns and operates renewable and energy infrastructure ~~projects; Consolidated Edison Energy, Inc. (Con Edison Energy), a company that~~projects and provides energy-related products and services to wholesale ~~customers;~~ and ~~Consolidated Edison Solutions, Inc. (Con Edison Solutions), a company that provides energy-related products and services to~~ retail customers. Con Edison Transmission, Inc. invests in electric transmission facilities through its subsidiary, Consolidated Edison Transmission, LLC (CET Electric), and invests in gas pipeline and storage facilities through its subsidiary Con Edison Gas Pipeline and Storage, LLC (CET Gas).

Note A – Summary of Significant Accounting Policies and Other Matters

Financial Instruments – Credit Losses

Adoption of New Standard

In January 2020, the Companies adopted ASU 2016-13, “Financial Instruments-Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments” (CECL). The amendments replace the incurred loss impairment methodology which involved delayed recognition of credit losses. The amendments introduce an expected credit loss impairment model which requires immediate recognition of anticipated losses over the instrument’s life. A broader range of reasonable and supportable information must be considered in developing the credit loss estimates. The Companies' financial instruments subject to the amendments are included in the lines “Accounts receivable – customers” and “Other receivables.” Substantially all of these in-scope financial instruments are expected to be collected within one year of billing.

The Companies adopted the amendments using the modified retrospective method for all financial instruments measured at amortized costs. Results for reporting periods beginning after January 1, 2020 are presented under ASC 326 while prior period amounts continue to be reported in accordance with previously applicable GAAP. No prior period adjustment or charge to retained earnings for cumulative impact was required as a result of the Companies’ adoption of the amendments.

The Utilities’ “Account receivable – customers” balance consists of utility bills due (bills are generally due the month following billing) from customers who have energy delivered, generated, or services provided by the Utilities. The balance also reflects the Utilities’ purchase of receivables from energy service companies to support the retail choice programs.

“Other receivables” balance generally reflects costs billed by the Utilities for goods and services provided to external parties, such as accommodation work for private parties and certain governmental entities, real estate rental and pole attachments.

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The Clean Energy Businesses’ accounts receivable balance generally reflects bills related to the sale of energy from renewable electric production projects, the management of energy supply assets, energy-efficiency services to government and commercial customers, and the engineering, procurement, and construction services of renewable energy projects. The Clean Energy Businesses calculate an allowance for uncollectible accounts related to their energy services customers based on an aging and customer-specific analysis. The amount of such reserves was not material at March 31, 2020.

The Companies develop expected loss estimates using past events data and consider current conditions and future reasonable and supportable forecasts. Changes to the Utilities’ reserve balances which result in write-offs of customer accounts receivable balances above existing rate allowances are not reflected in rates during the term of the current rate plans and are considered in a future rate proceeding. For the Utilities’ customer accounts receivable allowance for uncollectible accounts, past events considered include write-offs relative to total customer accounts receivable; current conditions include macro-and micro-economic conditions related to trends in the local economy and bankruptcy rates, among other factors; and forecasts about the future include assumptions related to the level of write-offs and recoveries.

Other receivables allowance for uncollectible accounts is calculated based on a historical average of collections relative to total other receivables, including current receivables. Current macro- and micro-economic conditions are also considered when calculating the current reserve. Probable outcomes of pending litigation, whether favorable or unfavorable to the Companies, are also included in the consideration.

During the first quarter of 2020, the potential economic impact of the COVID-19 pandemic was also considered in forward looking projections related to write-off and recovery rates, and resulted in increases to the allowance for uncollectible accounts of $5 million for Con Edison, substantially all of which related to CECONY.

Customer accounts receivable and the associated allowance for uncollectible accounts are included in the line “Accounts receivable – customers” on the Companies’ consolidated balance sheets. Other receivables and the associated allowance for uncollectible accounts are included in “Other receivables” on the consolidated balance sheets.

The table below presents a rollforward by major portfolio segment type for the three months ended March 31, 2020:



	For the Three Months Ended March 31, 2020
	Con Edison		CECONY
(Millions of Dollars)	Accounts receivable - customers	Other receivables	Accounts receivable - customers	Other receivables
Allowance for credit losses
Beginning Balance at January 1, 2020	$70	$4	$65	$3
Recoveries	2	—	2	—
Write-offs	(18)	—	(18)	—
Reserve adjustments	21	1	21	—
Ending Balance March 31, 2020	$75	$5	$70	$3

General Utility Plant

General utility plant of Con Edison and CECONY included $91 million and $87 million, respectively, at March 31, 2020 and $93 million and $88 million, respectively, at December 31, 2019, related to a May 2018 acquisition of software licenses. The estimated aggregate annual amortization expense related to the software licenses for Con Edison and CECONY is $7 million. The accumulated amortization for Con Edison and CECONY was $12 million and $11 million, respectively at March 31, 2020 and was $10 million at December 31, 2019.

Goodwill

The Companies test goodwill for impairment at least annually or whenever there is a triggering event, and test long-lived and intangible assets for recoverability when events or changes in circumstances indicate that the carrying value of long-lived or intangible assets may not be recoverable. The Companies identified no triggering events or changes in circumstances related to the COVID-19 pandemic that would indicate that the carrying value of long-lived or intangible assets may not be recoverable at March 31, 2020.

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Long-Lived and Intangible Assets

In January 2019, Pacific Gas and Electric Company (PG&E) filed in the United States Bankruptcy Court for the Northern District of California for reorganization under Chapter 11 of the U.S. Bankruptcy Code. The output of certain of the Clean Energy Businesses' renewable electric production projects with an aggregate generating capacity of 680 MW (AC) (PG&E Projects) is sold to PG&E under long-term power purchase agreements (PG&E PPAs). Most of the PG&E PPAs have contract prices that are higher than estimated market prices. PG&E, as a debtor in possession, may assume or reject the PG&E PPAs, subject to review by the bankruptcy court.

In March 2020, PG&E and certain PG&E shareholders submitted a joint plan of reorganization to the bankruptcy court. The plan includes the assumption by PG&E of all of its power purchase agreements. The plan is subject to, among other things: confirmation by the bankruptcy court by June 30, 2020 (or any extension of the date by which PG&E’s bankruptcy must be resolved for PG&E to participate in the insurance fund described below); approval by the California Public Utilities Commission (CPUC) of PG&E’s implementation of the plan and participation in the insurance fund; PG&E obtaining funding for distributions under the plan; and the continuation in full force and effect of the September 2019 subrogation claims restructuring support agreement, the December 2019 tort claimants restructuring support agreement and the January 2020 noteholder restructuring support agreement. The plan is supported by the parties to these restructuring support agreements, subject to their terms, and includes the assumption by PG&E of all of its power purchase agreements. A plan of reorganization can be revoked, amended, withdrawn or delayed prior to its confirmation by the bankruptcy court. The bankruptcy court has authorized PG&E to send the plan to creditors for consideration, and the current deadline for creditors to return ballots is May 15, 2020. The hearing to consider confirmation of the plan is scheduled to commence later in May 2020.

In January and May 2019, FERC issued orders (which PG&E is challenging) affirming its jurisdiction to review and approve the modification or abrogation of wholesale power contracts that are the subject of rejection in bankruptcy. In June 2019, the bankruptcy court ruled that FERC does not have concurrent jurisdiction with it and that FERC’s January and May 2019 orders are of no force and effect in the bankruptcy proceeding. FERC and additional parties, including the Clean Energy Businesses, are challenging the bankruptcy court’s June 2019 ruling in appeals that are pending in the United States Court of Appeals for the Ninth Circuit.

In July 2019, California enacted a law addressing future California wildfires. The law includes provisions for the establishment of wildfire liquidity and insurance funds and possible limitation of future wildfire liabilities for California utilities. PG&E, Southern California Edison Company and San Diego Gas & Electric Company have agreed to participate in the insurance fund. PG&E’s participation will require bankruptcy court approval and is conditioned on, among other things, resolution of PG&E’s bankruptcy by June 30, 2020, and a determination by the CPUC that PG&E’s bankruptcy reorganization plan is consistent with the state’s climate goals as required under the California Renewables Portfolio Standard Program and related procurement requirements of the state. In April 2020, the CPUC issued for public comment a proposed decision that would approve with conditions PG&E’s proposed reorganization plan under the aforementioned law. The proposed decision is expected to be on the CPUC’s May 21, 2020 voting meeting agenda.

The PG&E bankruptcy is an event of default under the PG&E PPAs. Unless the lenders for the related project debt otherwise agree, distributions from the related projects to the Clean Energy Businesses will not be made during the pendency of the bankruptcy. See “Reconciliation of Cash, Temporary Cash Investments and Restricted Cash,” below.

At March 31, 2020 and December 31, 2019, Con Edison’s consolidated balance sheet included $802 million and $819 million of net non-utility plant relating to the PG&E Projects, $1,039 million and $1,057 million of intangible assets relating to the PG&E PPAs, $274 million and $282 million of net non-utility plant of additional projects that secure the related project debt and $980 million and $1,001 million of non-recourse related project debt, respectively. See "Long-term Debt" in Note C. Con Edison has tested whether its net non-utility plant relating to the PG&E Projects and intangible assets relating to the PG&E PPAs have been impaired. The projected future cash flows used in the test reflected Con Edison’s expectation that the PG&E PPAs are not likely to be rejected. Based on the test, Con Edison has determined that there was no impairment. If, in the future, one or more of the PG&E PPAs is rejected or any such rejection becomes likely, there will be an impairment of the related intangible assets and could be an impairment of the related non-utility plant. The amount of any such impairment could be material.

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Earnings Per Common Share

Con Edison presents basic and diluted earnings per share (EPS) on the face of its consolidated income statement. Basic EPS is calculated by dividing earnings available to common shareholders (“Net ~~income”~~income for common stock” on Con Edison’s consolidated income statement) by the weighted average number of Con Edison common shares outstanding during the period. In the calculation of diluted EPS, weighted average shares outstanding are increased for additional shares that would be outstanding if potentially dilutive securities were converted to common stock.

Potentially dilutive securities for Con Edison consist of restricted stock units and deferred stock units ~~and stock options~~ for which the average market price of the common shares for the period was greater than the exercise price.

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For the three ~~and nine~~ months ended ~~September 30, 2017~~March 31, 2020 and ~~2016,~~2019, basic and diluted EPS for Con Edison are calculated as follows:


	For the Three Months Ended September 30,		For the Nine Months Ended September 30,		For the Three Months Ended March 31,
(Millions of Dollars, except per share amounts/Shares in Millions)	2017	2016	2017	2016	2020	2019
Net income	$457	$497	$1,020	$1,039
Net income for common stock					$375	$424
Weighted average common shares outstanding – basic	307.8	304.5	306.2	299.1	333.6	322.5
Add: Incremental shares attributable to effect of potentially dilutive securities	1.5	1.4	1.5	1.4	1.0	0.9
Adjusted weighted average common shares outstanding – diluted	309.3	305.9	307.7	300.5	334.6	323.4
Net Income per common share – basic	$1.48	$1.63	$3.33	$3.47	$1.13	$1.31
Net Income per common share – diluted	$1.48	$1.62	$3.31	$3.46	$1.12	$1.31

The computation of diluted EPS for the three months ended March 31, 2020 and 2019 excludes immaterial amounts of performance share awards that were not included because of their anti-dilutive effect.

Changes in Accumulated Other Comprehensive Income/(Loss) by Component

For the three ~~and nine~~ months ended ~~September 30, 2017~~March 31, 2020 and ~~2016,~~2019, changes to accumulated other comprehensive income/(loss) (OCI) for Con Edison and CECONY are as follows:

For the Three Months Ended September 30,
Con Edison CECONY
(Millions of Dollars) 2017 2016 2017 2016
Beginning balance, accumulated OCI, net of taxes (a) $(27) $(33) $(7) $(8)
Amounts reclassified from accumulated OCI related to pension plan liabilities, net of tax of $(1) for Con Edison in 2017 and 2016 (a)(b) 1 1 1 —
Current period OCI, net of taxes 1 1 1 —
Ending balance, accumulated OCI, net of taxes $(26) $(32) $(6) $(8)


	For the Nine Months Ended September 30,				For the Three Months Ended March 31,
	Con Edison		CECONY		Con Edison		CECONY
(Millions of Dollars)	2017	2016	2017	2016	2020	2019	2020	2019
Beginning balance, accumulated OCI, net of taxes (a)	$(27)	$(34)	$(7)	$(9)	$(19)	$(16)	$(6)	$(5)
OCI before reclassifications, net of tax of $1 for Con Edison in 2017 and 2016	(2)	(1)	—	—
Amounts reclassified from accumulated OCI related to pension plan liabilities, net of tax of $(2) for Con Edison in 2017 and 2016 (a)(b)	3		1	1
OCI before reclassifications, net of tax of $(1) for Con Edison in 2020 and 2019					4	2	—	—
Amounts reclassified from accumulated OCI related to pension plan liabilities, net of tax of $(1) for Con Edison in 2020 (a)(b)					1	2	1	—
Current period OCI, net of taxes	1	2	1	1	5	4	1	—
Ending balance, accumulated OCI, net of taxes	$(26)	$(32)	$(6)	$(8)	$(14)	$(12)	$(5)	$(5)


(a)	Tax reclassified from accumulated OCI is reported in the income tax expense line item of the consolidated income statement.


(b)	For the portion of unrecognized pension and other postretirement benefit costs relating to the Utilities, costs are recorded into, and amortized out of, regulatory assets and liabilities instead of OCI. The net actuarial losses and prior service costs recognized during the period are included in the computation of total periodic pension and other postretirement benefit cost. See Notes E and F.

Reconciliation of Cash, Temporary Cash Investments and Restricted Cash

Cash, temporary cash investments and restricted cash are presented on a combined basis in the Companies’ consolidated statements of cash flows. At March 31, 2020 and 2019, cash, temporary cash investments and restricted cash for Con Edison and CECONY were as follows:

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~~Note B — Regulatory Matters~~

~~Rate Plans~~

~~Rockland Electric Company (RECO)~~

In February 2017, the New Jersey Board of Public Utilities (NJBPU) approved a stipulation of settlement for a RECO electric rate plan commencing March 2017. The following table contains a summary of the electric rate plan.



~~RECO~~
~~Effective period~~		~~March 2017 (a)~~
~~Base rate changes~~		~~Yr. 1 - $1.7 million~~
~~Amortization to income of net regulatory (assets) and liabilities~~		~~$0.2 million over three years and continuation of $(25.6) million of deferred storm costs over four years expiring July 31, 2018 (b)~~
~~Recoverable energy costs~~		~~Current rate recovery of purchased power costs.~~
~~Cost reconciliations~~		~~None~~
~~Average rate base~~		~~Yr. 1 - $178.7 million~~
~~Weighted average cost of capital (after-tax)~~		~~7.47 percent~~
~~Authorized return on common equity~~		~~9.6 percent~~
~~Cost of long-term debt~~		~~5.37 percent~~
~~Common equity ratio~~		~~49.7 percent~~



	At March 31,
	Con Edison		CECONY
(Millions of Dollars)	2020	2019	2020	2019
Cash and temporary cash investments	$1,395	$406	$1,303	$352
Restricted cash (a)	179	68	—	—
Total cash, temporary cash investments and restricted cash	$1,574	$474	$1,303	$352

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(a)

~~Effective~~

Restricted cash included cash of the Clean Energy Businesses' renewable electric production project subsidiaries ($179 million and $67 million at March 31, 2020 and 2019, respectively) that, under the related project debt agreements, is either restricted until the various maturity dates of the project debt to being used for normal operating expenses and capital expenditures, debt service, and required reserves or restricted as a ~~new rate plan approved by~~result of the ~~NJBPU goes into effect.~~

~~(b)~~

PG&E bankruptcy. During the pendency of the PG&E bankruptcy, unless the lenders for the related project debt otherwise agree, cash may not be distributed from the related projects to the Clean Energy Businesses. See “Long-Lived and Intangible Assets,” above, and Note C. In ~~January 2016, the NJBPU approved RECO’s plan to spend $15.7~~addition, restricted cash included O&R's New Jersey utility subsidiary, Rockland Electric Company transition bond charge collections, net of principal, interest, trustee and service fees ($1 million ~~in capital over three years to harden its electric system against storms, the costs of which RECO, beginning in 2017, is collecting through a customer surcharge.~~at March 31, 2019).

Note B – Regulatory Matters

COVID-19 Regulatory Matters

Governors, public utility commissions, federal authorities and other regulatory agencies in the states in which the Utilities operate have issued orders related to the COVID-19 pandemic that impact the Utilities as described below.

New York State Regulation

In March 2020, New York State Governor Cuomo declared a State disaster emergency for the State of New York. Since that declaration, the NYSPSC and the Utilities have taken actions to mitigate the impact of the COVID-19 pandemic on the Utilities, their customers and other stakeholders. New York State has designated utilities, including CECONY and O&R, as essential businesses that may continue their work. The Utilities have modified or suspended certain work in the state.

In March 2020, the Utilities began suspending service disconnections, certain collection notices, final bill collection agency activity, new late payment charges and certain other fees for all customers. Historically, these fees have amounted to approximately $6 million and $0.4 million per month for CECONY and O&R, respectively. The suspension of these fees is expected to result in a reduction in revenues during the suspension period, the length of which has not yet been determined. The Utilities also began providing payment extensions for all customers that were scheduled to be disconnected prior to the start of the COVID-19 pandemic. All customer walk-in centers have been closed to the public and in-person investigations of billing issues at customer residences and businesses have been suspended. In April 2020, the NYSPSC also suspended certain interconnection payment deadlines to mitigate the impact of the COVID-19 pandemic on developers of distributed renewable generation and energy storage. See Note K to the First Quarter Financial Statements.

In March 2020, the Utilities requested and the NYSPSC granted extensions until July 31, 2020 to file their 2019 Earnings Adjustment Mechanisms (EAMs) reports, which would delay the start of collection of earned EAM incentives of approximately $46 million and $3 million for CECONY and O&R, respectively, from the twelve-month period beginning June 2020 until the twelve-month period beginning September ~~2017, RECO,~~2020.

The Utilities’ rate plans have revenue decoupling mechanisms in their New York electric and gas businesses that reconcile actual energy delivery revenues to the authorized delivery revenues approved by the NYSPSC on a monthly basis and accumulate the deferred balances semi-annually under CECONY's electric rate plan (January through June and July through December, respectively) and annually under CECONY's gas rate plan and O&R New York's electric and gas rate plans (January through December). The difference is accrued with interest on a monthly basis for CECONY and O&R New York’s electric customers and after the annual deferral period ends for CECONY and O&R New York’s gas customers for refund to, or recovery from customers, as applicable. Generally, the refund to or recovery from customers begins August and February of each year over an ensuing six-month period for CECONY's electric customers and February of each year over an ensuing twelve-month period for CECONY's gas and O&R New York's electric and gas customers.

New Jersey ~~Division~~State Regulation

In March 2020, New Jersey Governor Murphy declared a Public Health Emergency and State of ~~Rate Counsel~~Emergency for the State of New Jersey. Since that declaration, the NJBPU and RECO have taken actions to mitigate the impact of the COVID-19 pandemic on RECO, its customers and other stakeholders. New Jersey has designated utilities, including RECO, as essential businesses that may continue their work. RECO has modified or suspended certain work in the state. In March 2020, RECO began suspending late payment charges, terminations for non-payment, and no access fees during the COVID-19 pandemic. The suspension of these fees is not expected to be material.

Federal Regulation

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Standards requirements that would have required action between March 1, 2020 and July 31, 2020. In addition, it suspended on-site NERC compliance audits until at least July 31, 2020.

Also in March 2020, FERC announced several actions to ease regulatory obligations in response to the COVID-19 pandemic. These include postponement of certain filing deadlines and the suspension of all audit site visits and investigative testimony.

In April 2020, FERC announced it would expeditiously review and act on requests for relief in response to the COVID-19 pandemic, give priority to processing filings that contribute to the business continuity of regulated entities’ energy infrastructure and will exercise prosecutorial discretion when addressing events arising during the emergency period. FERC also approved a blanket waiver of requirements in Open Access Transmission Tariffs that require entities to hold meetings in-person and to provide or obtain notarized documents.

Gas Safety

In March 2020, the U.S. Department of Transportation’s Pipeline and Hazardous Materials Safety Administration (PHMSA) issued a notice staying enforcement of certain federal operator qualification, control room management and drug testing requirements during the COVID-19 pandemic. The notice also announced that PHMSA would exercise discretion in its overall enforcement of other parts of the pipeline safety regulations. The NYSPSC also provided guidance that it was staying enforcement of many of the same pipeline safety requirements identified in the March 2020 PHMSA notice.

In April 2020, the NYSPSC issued an order that extended the deadlines to complete certain gas inspections by all New ~~Jersey Board of Public Utilities entered into a settlement agreement, which is subject~~York gas utilities, including CECONY and O&R, from April 1, 2020 to FERC approval, that increases RECO's annual transmission revenue requirement from $11.8 million to $17.7 million, effective April 2017. The revenue requirement reflects a return on common equity of 10.0 percent.August 1, 2020.

Other Regulatory Matters

OnIn August ~~16,~~2018, the NYSPSC ordered CECONY to begin on January 1, 2019 to credit the company's electric and gas customers, and to begin on October 1, 2018 to credit its steam customers, with the net benefits of the federal Tax Cuts and Jobs Act of 2017 (TCJA) as measured based on amounts reflected in its rate plans prior to the ~~New York State Public Service Commission (NYSPSC)~~enactment of the TCJA in December 2017. The net benefits include the revenue requirement impact of the reduction in the corporate federal income tax rate to 21 percent, the elimination for utilities of bonus depreciation and the amortization of excess deferred federal income taxes.

CECONY, under its electric rate plan that was approved in January 2020, is amortizing its TCJA net benefits prior to January 1, 2019 allocable to its electric customers ($377 million) over a three-year period, the “protected” portion of its net regulatory liability for future income taxes related to certain accelerated tax depreciation benefits allocable to its electric customers ($1,663 million) over the remaining lives of the related assets and the remainder, or “unprotected” portion of the net regulatory liability allocable to its electric customers ($784 million) over a five-year period. CECONY, under its gas rate plan that was approved in January 2020, is amortizing its remaining TCJA net benefits prior to January 1, 2019 allocable to its gas customers ($63 million) over a two-year period, the protected portion of its net regulatory liability for future income taxes allocable to its gas customers ($725 million) over the remaining lives of the related assets and the unprotected portion of the net regulatory liability allocable to its gas customers ($107 million) over a five-year period.

CECONY's net benefits prior to October 1, 2018 allocable to the company’s steam customers ($15 million) are being amortized over a three-year period. CECONY’s net regulatory liability for future income taxes, including both the protected and unprotected portions, allocable to the company’s steam customers ($185 million) is being amortized over the remaining lives of the related assets (with the amortization period for the unprotected portion subject to review in its next steam rate proceeding).

O&R, under its current electric and gas rate plans, has reflected its TCJA net benefits in its electric and gas rates beginning as of January 1, 2019. Under the rate plans, O&R is amortizing its net benefits prior to January 1, 2019 ($22 million) over a three-year period, the protected portion of its net regulatory liability for future income taxes ($123 million) over the remaining lives of the related assets and the unprotected portion ($30 million) over a fifteen-year period.

In January 2018, the NYSPSC issued an order initiating a focused operations audit of the income tax accounting of certain utilities, including CECONY and O&R. The Utilities are unable to estimate the amount or range of their possible loss related to this matter. At March 31, 2020, the Utilities had not accrued a liability related to this matter.

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In March 2018, Winter Storms Riley and Quinn caused damage to the Utilities’ electric distribution systems and interrupted service to approximately 209,000 CECONY customers, 93,000 O&R customers and 44,000 RECO customers. At March 31, 2020, CECONY's costs related to March 2018 storms, including Riley and Quinn, amounted to $134 million, including operation and maintenance expenses reflected in its ~~proceeding investigating an~~electric rate plan ($15 million), operation and maintenance expenses charged against a storm reserve pursuant to its electric rate plan ($84 million), capital expenditures ($29 million) and removal costs ($6 million). At March 31, 2020, O&R and RECO costs related to 2018 storms amounted to $43 million and $17 million, respectively, most of which were deferred as regulatory assets pursuant to their electric rate plans. In January 2019, O&R began recovering its deferred storm costs over a six-year period in accordance with its New York electric rate plan. In February 2020, RECO began recovering its deferred storm costs over a four-year period in accordance with its New Jersey electric rate plan. The NYSPSC investigated the preparation and response to the storms by CECONY, O&R, and other New York electric utilities, including all aspects of their emergency response plans. In April ~~21, 2017 Metropolitan Transportation Authority (MTA) subway power outage. The order indicated that~~2019, following the issuance of a NYSPSC staff report on the investigation, determined that the outage was caused by a failure of CECONY’s electricity supply to a subway station, which led to a loss of the subway signals, and that one of the secondary services to the MTA facility had been improperly rerouted and was not properly documented by the company. The order also indicated that the loss of power to the subway station affected multiple subway lines and caused widespread delays across the subway system. Pursuant to the order, the company is required to take certain actions, including performing inspections of electrical equipment that serves the MTA system, analyzing power supply and power quality events affecting the MTA’s signaling services, providing new monitoring and other equipment and filing monthly reports with the NYSPSC ~~on all of~~ordered the ~~company's activities related~~utilities to ~~the MTA system. In July 2017, the Chairman of~~show cause why the NYSPSC ~~notified the company that the April 21, 2017 subway power outage incident will likely result in a prudence review of the reasonableness of CECONY's actions and conduct. The order did~~should not commence a ~~prudence review~~penalty action against them for violating their emergency response plans. The Utilities are unable to estimate the amount or ~~address cost recovery. Under~~range of their possible loss related to this matter. At March 31, 2020, the ~~New York State Administrative Procedure Act, the order could~~Utilities had not ~~remain in effect for more than 90 days without further action by~~accrued a liability related to this matter.

In July 2018, the NYSPSC ~~because it was adopted~~commenced an investigation into the rupture of a CECONY steam main located on ~~an emergency basis. At its October 19, 2017 meeting,~~Fifth Avenue and 21st Street in Manhattan. Debris from the ~~NYSPSC approved another order in this proceeding.~~incident included dirt and mud containing asbestos. The response to the incident required the closing of buildings and streets for various periods. The NYSPSC has ~~not yet issued this~~commenced an investigation. As of March 31, 2020, with respect to the incident, the company incurred operating costs of $17 million for property damage, clean-up and other ~~order.~~response costs and invested $9 million in capital and retirement costs. The company is unable to estimate the amount or range of its possible ~~costs~~loss related to the incident. At March 31, 2020, the company had not accrued a liability related to the incident.

In March 2019, the NYSPSC ordered CECONY to show cause why the NYSPSC should not commence a penalty action and prudence proceeding against CECONY for alleged violations of gas operator qualification, performance, and inspection requirements. At December 31, 2019, the company had an accrued regulatory liability related to this matter of $10 million, and at March 31, 2020, the company accrued an additional regulatory liability of $5 million. In April 2020, the NYSPSC approved a $15 million settlement agreement for the benefit of CECONY’s gas customers between CECONY and NYSPSC staff related to this matter.

On July 13, 2019, electric service was interrupted to approximately 72,000 CECONY customers on the west side of Manhattan. The NYSPSC and the Northeast Power Coordinating Council, a regional reliability entity, are investigating the July 13, 2019 power outage. Pursuant to the major outage reliability performance provisions of its electric rate plan, as a result of the July 13, 2019 power outage, the company recorded a $5 million negative revenue adjustment. The NYSPSC is also investigating other CECONY power outages that occurred in July 2019, primarily in the Flatbush area of Brooklyn. Primarily due to these outages, pursuant to the rate plan’s annual non-network outage frequency and non-network outage duration reliability performance provisions, the company recorded a $10 million negative revenue adjustment at December 31, 2019. The company is unable to estimate the amount or range of its possible additional loss related to these power outages.

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Regulatory Assets and Liabilities

Regulatory assets and liabilities at ~~September 30, 2017~~March 31, 2020 and December 31, ~~2016~~2019 were comprised of the following items:


	Con Edison		CECONY		Con Edison		CECONY
(Millions of Dollars)	2017	2016	2017	2016	2020	2019	2020	2019
Regulatory assets
Unrecognized pension and other postretirement costs	$2,626	$2,874	$2,476	$2,730	$2,246	$2,541	$2,113	$2,403
Future income tax	2,419	2,439	2,308	2,325
Environmental remediation costs	803	823	690	711	735	732	652	647
Revenue taxes	341	295	325	280	333	321	318	308
Property tax reconciliation					229	219	222	210
MTA power reliability deferral					224	248	224	248
Pension and other postretirement benefits deferrals					197	71	169	47
Deferred derivative losses	88	48	78	42	128	83	118	76
Pension and other postretirement benefits deferrals	70	38	45	7
System peak reduction and energy efficiency programs					115	131	114	130
Municipal infrastructure support costs	57	44	57	44	78	75	78	75
Deferred storm costs	43	56	—	3	73	77	—	—
Brooklyn Queens demand management program					39	39	39
Meadowlands heater odorization project					34	35	34	35
Unamortized loss on reacquired debt	39	43	37	41	26	28	24	26
Indian Point Energy Center program costs	32	50	32	50
O&R property tax reconciliation	29	37	—	—
Brooklyn Queens demand management program	28	29	28	29
Recoverable REV demonstration project costs					23	21	20	19
Preferred stock redemption	24	25	24	25	22	22	22
Surcharge for New York State assessment	18	28	16	26
Net electric deferrals	13	24	13	24
Gate station upgrade project					19	19	19
Non-wire alternative projects					14	14	14	14
Workers’ compensation	12	13	12	13	2	3	2	3
O&R transition bond charges	10	15	—	—
Recoverable energy costs	4	42	4	38
Other	113	101	103	85	195	180	183	166
Regulatory assets – noncurrent	6,769	7,024	6,248	6,473	4,732	4,859	4,365	4,487
Deferred derivative losses	81	91	75	86	142	128	125	113
Recoverable energy costs	28	9	25	4	1	—	—	—
Regulatory assets – current	109	100	100	90	143	128	125	113
Total Regulatory Assets	$6,878	$7,124	$6,348	$6,563	$4,875	$4,987	$4,490	$4,600
Regulatory liabilities
Future income tax					$2,374	$2,426	$2,224	$2,275
Allowance for cost of removal less salvage	$798	$755	$671	$641	1,007	989	859	843
TCJA net benefits*					421	471	407	454
Net proceeds from sale of property					166	173	166	173
Energy efficiency portfolio standard unencumbered funds					120	122	117	118
Net unbilled revenue deferrals					95	199	95	199
Pension and other postretirement benefit deferrals	202	193	174	162	65	75	35	46
Net unbilled revenue deferrals	166	145	166	145
Property tax reconciliation	140	178	140	178
System benefit charge carrying charge					53	48	47	44
Property tax refunds					41	45	41	45
Unrecognized other postretirement costs	84	60	84	60	37	9	3	—
BQDM and REV Demo reconciliations					27	27	25	26
Settlement of gas proceedings					24	10	24	10
Sales and use tax refunds					19	8	19	8
Earnings sharing - electric, gas and steam					18	22	10	15
Settlement of prudence proceeding	73	95	73	95	7	8	7	8
Carrying charges on repair allowance and bonus depreciation	49	68	48	67
New York State income tax rate change	48	61	48	60
Variable-rate tax-exempt debt – cost rate reconciliation	36	55	32	48
Property tax refunds	28	1	28	1
Settlement of gas proceedings	27		27
Base rate change deferrals	26	40	26	40
Earnings sharing - electric, gas and steam	24	39	15	28
Net utility plant reconciliations	11	16	8	15
Other	161	172	133	145	215	195	183	163
Regulatory liabilities – noncurrent	1,873	1,905	1,673	1,712	4,689	4,827	4,262	4,427
Refundable energy costs	29		9	5	68	44	38	12
Deferred derivative gains					33	34	33	34
Revenue decoupling mechanism	27	71	27	61	22	24	22	17
Deferred derivative gains	2	28	2	24
Regulatory liabilities – current	58	128	38	90	123	102	93	63
Total Regulatory Liabilities	$1,931	$2,033	$1,711	$1,802	$4,812	$4,929	$4,355	$4,490

* See "Other Regulatory Matters," above.

Note C —– Capitalization

In ~~March 2017,~~January 2020, Con Edison issued ~~$400~~1,050,000 shares of its common stock for $88 million upon physical settlement of the remaining shares subject to its May 2019 forward sale agreement.

In March 2020, CECONY issued $600 million aggregate principal amount of ~~2.00~~3.35 percent debentures, due ~~2020,~~2030 and ~~prepaid the $400 million variable rate term loan that was to mature in 2018. Also, in March 2017, a Con Edison~~

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~~Development subsidiary issued $97~~$1,000 million aggregate principal amount of ~~4.45 percent senior notes, due 2042, secured by the company’s Upton County Solar project. In June 2017, CECONY issued $500 million aggregate principal amount of 3.875~~3.95 percent debentures, due ~~2047. In August 2017, Con Edison issued 4.1 million common shares resulting in net proceeds~~2050.

Table of $343 million, after issuance expenses, that were invested by Con Edison in its subsidiaries, principally CECONY and the Clean Energy Businesses, for funding of their construction expenditures and for other general corporate purposes.Contents

The carrying amounts and fair values of long-term debt at ~~September 30, 2017~~March 31, 2020 and December 31, ~~2016~~2019 were:



(Millions of Dollars)	2020		2019
Long-Term Debt (including current portion) (a)	Carrying Amount	Fair Value	Carrying Amount	Fair Value
Con Edison	$21,516	$23,381	$19,973	$22,738
CECONY	$16,544	$18,299	$14,964	$17,505

(Millions of Dollars) 2017 2016
Long-Term Debt (including current portion) (a)
Carrying
Amount
Fair
Value
Carrying
Amount
Fair
Value
Con Edison $15,338 $17,195 $14,774 $16,093
CECONY $12,571 $14,213 $12,073 $13,268


(a)	Amounts shown are net of unamortized debt expense and unamortized debt discount of ~~$137~~$197 million and ~~$115~~$170 million for Con Edison and CECONY, respectively, as of ~~September 30, 2017~~March 31, 2020 and ~~$134~~$178 million and ~~$113~~$151 million for Con Edison and CECONY, respectively, as of December 31, ~~2016.~~2019.

~~Fair~~The fair values of the Companies' long-term debt have been estimated primarily using available market ~~information. For Con Edison, $16,559 million~~information and ~~$636 million of the fair value of long-term debt~~ at ~~September 30, 2017~~March 31, 2020 are classified as Level 2 (see Note N).

As a result of the January 2019 PG&E bankruptcy (see "Long-Lived and ~~Level 3, respectively. For CECONY, $13,577~~Intangible Assets" in Note A), during the first quarter of 2019, Con Edison reclassified on its consolidated balance sheet the PG&E-related non-recourse project debt that was included in long-term debt to long-term debt due within one year. At March 31, 2020 and December 31, 2019, long-term debt due within one year included $980 million and ~~$636~~$1,001 million of PG&E-related project debt, respectively. The lenders for the ~~fair value of long-term~~PG&E-related project debt ~~at September 30, 2017~~may, upon written notice, declare principal and interest on the PG&E-related project debt to be due and payable immediately and, if such amounts are ~~classified as Level 2 and Level 3, respectively (see Note L).~~not timely paid, foreclose on the related projects. The ~~$636 million of long-term~~company is seeking to negotiate agreements with the PG&E-related project debt ~~classified as Level 3 is CECONY’s tax-exempt, auction-rate securities for~~lenders pursuant to which the ~~market is highly illiquid and there is a lack of observable inputs.~~lenders would defer exercising these remedies.

Note D —– Short-Term Borrowing

At ~~September 30, 2017,~~March 31, 2020, Con Edison had ~~$356~~$1,208 million of commercial paper outstanding of which ~~$147~~$597 million was outstanding under CECONY’s program. The weighted average interest rate at ~~September 30, 2017~~March 31, 2020 was ~~1.3~~3.5 percent for both Con Edison and CECONY. At December 31, ~~2016,~~2019, Con Edison had ~~$1,054~~$1,692 million of commercial paper outstanding of which ~~$600~~$1,137 million was outstanding under CECONY’s program. The weighted average interest rate at December 31, ~~2016~~2019 was ~~1.0~~2.0 percent for both Con Edison and CECONY.

At ~~September 30, 2017~~March 31, 2020 and December 31, ~~2016, no~~2019, 0 loans were outstanding under the Companies' December 2016 credit agreement (Credit Agreement). An immaterial amount ~~and $2 million (including $2 million for CECONY)~~ of letters of credit were outstanding under the Credit Agreement as of ~~September 30, 2017~~March 31, 2020 and December 31, ~~2016, respectively.~~2019.

In April 2020, Con Edison entered into a credit agreement (the Supplemental Credit Agreement) under which banks are committed to provide loans, on a revolving credit basis until July 2, 2020, with an option, subject to certain conditions, for Con Edison to convert all loans outstanding on July 2, 2020 into a 270-day term loan. The banks committed to provide an aggregate amount of up to $750 million of credit. Subject to certain conditions, Con Edison and one or more banks may increase by up to $250 million the aggregate principal amount of loans available under the Supplemental Credit Agreement. Subject to certain exceptions, the commitments and loans under the Supplemental Credit Agreement are subject to mandatory termination and prepayment with the net cash proceeds of debt or equity issuances by Con Edison or its non-regulated subsidiaries. Con Edison intends to use the Supplemental Credit Agreement as additional liquidity and for other general corporate purposes. Con Edison has not entered into any loans under the Supplemental Credit Agreement.

The banks’ commitments under the Supplemental Credit Agreement are subject to certain conditions, including that there be no event of default. The commitments are not subject to maintenance of credit rating levels or the absence of a material adverse change. Upon a change of control of, or upon an event of default by Con Edison, the banks may terminate their commitments and declare the loans outstanding under the Supplemental Credit Agreement immediately due and payable. Events of Default include Con Edison exceeding at any time a ratio of consolidated debt to consolidated total capital of 0.65 to 1; having liens on its assets in an aggregate amount exceeding 5 percent of its consolidated total capital, subject to certain exceptions; Con Edison or any of its subsidiaries failing to make one or more payments in respect of material financial obligations (in excess of an aggregate $150 million of debt or derivative obligations other than non-recourse debt); the occurrence of an event or condition which results in the acceleration of the maturity of any material debt (in excess of an aggregate $150 million of debt other than non-recourse debt) or enables the holders of such debt to accelerate the maturity thereof; and other customary events of default.

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Note E —– Pension Benefits

Total Periodic Benefit Cost

The components of the Companies’ total periodic benefit ~~costs~~cost for the three ~~and nine~~ months ended ~~September 30, 2017~~March 31, 2020 and ~~2016~~2019 were as follows:



	For the Three Months Ended March 31,
	Con Edison		CECONY
(Millions of Dollars)	2020	2019	2020	2019
Service cost – including administrative expenses	$73	$62	$69	$58
Interest cost on projected benefit obligation	137	150	129	141
Expected return on plan assets	(258)	(247)	(245)	(234)
Recognition of net actuarial loss	175	130	165	123
Recognition of prior service cost/(credit)	(4)	(4)	(5)	(5)
TOTAL PERIODIC BENEFIT COST	$123	$91	$113	$83
Cost capitalized	(31)	(26)	(29)	(24)
Reconciliation to rate level	(64)	(5)	(62)	(4)
Total expense recognized	$28	$60	$22	$55

For the Three Months Ended September 30,
Con Edison CECONY
(Millions of Dollars) 2017 2016 2017 2016
Service cost – including administrative expenses $66 $69 $61 $65
Interest cost on projected benefit obligation 148 149 139 140
Expected return on plan assets (243) (237) (229) (225)
Recognition of net actuarial loss 149 149 141 141
Recognition of prior service costs (4) 1 (5) —
TOTAL PERIODIC BENEFIT COST $116 $131 $107 $121
Cost capitalized (40) (51) (37) (49)
Reconciliation to rate level (14) 10 (16) 13
Cost charged to operating expenses $62 $90 $54 $85

Components of net periodic benefit cost other than service cost are presented outside of operating income on the Companies' consolidated income statements, and only the service cost component is eligible for capitalization. Accordingly, the service cost component is included in the line "Other operations and maintenance" and the non-service cost components are included in the line "Other deductions" in the Companies' consolidated income statements.

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For the Nine Months Ended September 30,
Con Edison CECONY
(Millions of Dollars) 2017 2016 2017 2016
Service cost – including administrative expenses $197 $207 $184 $194
Interest cost on projected benefit obligation 444 447 416 419
Expected return on plan assets (726) (711) (689) (674)
Recognition of net actuarial loss 446 447 423 424
Recognition of prior service costs (13) 3 (14) 1
TOTAL PERIODIC BENEFIT COST $348 $393 $320 $364
Cost capitalized (134) (157) (125) (148)
Reconciliation to rate level (28) 35 (32) 39
Cost charged to operating expenses $186 $271 $163 $255

Expected Contributions

Based on estimates as of ~~September 30, 2017, the Companies~~March 31, 2020, Con Edison and CECONY expect to make contributions to the pension plans during ~~2017~~2020 of ~~$450~~$474 million (of which ~~$412~~$434 million is to be ~~contributed~~made by CECONY). The Companies’ policy is to fund the total periodic benefit cost of the qualified plan to the extent tax deductible and to also contribute to the non-qualified supplemental plans. During the first ~~nine~~three months of ~~2017,~~2020, the Companies contributed ~~$446~~$4 million to the pension plans, ~~(of~~nearly all of which ~~$409 million~~ was contributed by ~~CECONY). CECONY also contributed $14 million to its external trust for supplemental plans.~~CECONY.

Note F —– Other Postretirement Benefits

Total Periodic Benefit Cost

The components of the Companies’ total periodic other postretirement benefit ~~costs~~cost/(credit) for the three ~~and nine~~ months ended ~~September 30, 2017~~March 31, 2020 and ~~2016~~2019 were as follows:



	For the Three Months Ended March 31,
	Con Edison			CECONY
(Millions of Dollars)	2020		2019	2020	2019
Service cost	$5		$4	$4	$3
Interest cost on accumulated other postretirement benefit obligation	9		11	8	9
Expected return on plan assets	(16)		(16)	(14)	(14)
Recognition of net actuarial loss/(gain)	27		(2)	27	(2)
Recognition of prior service credit	(1)		(1)	(1)	—
TOTAL PERIODIC OTHER POSTRETIREMENT BENEFIT COST/(CREDIT)	$24		$(4)	$24	$(4)
Cost capitalized	(2)		(2)	(1)	(2)
Reconciliation to rate level	(22)		3	(24)	2
Total credit recognized		$—	$(3)	$(1)	$(4)

For the Three Months Ended September 30,

Con Edison CECONY
(Millions of Dollars) 2017 2016 2017
2016
Service cost $5 $4 $3 $3
Interest cost on accumulated other postretirement benefit obligation 11 12 9 10
Expected return on plan assets (17) (19) (15) (17)
Recognition of net actuarial loss 1 1 —
1
Recognition of prior service cost (5) (5) (3) (3)
TOTAL PERIODIC OTHER POSTRETIREMENT BENEFIT COST $(5) $(7) $(6) $(6)
Cost capitalized 2 2 2 2
Reconciliation to rate level (1) 7 —
6
Cost charged to operating expenses $(4) $2 $(4) $2

For information about the presentation of the components of other postretirement benefit costs, see Note E.

For the Nine Months Ended September 30,

Con Edison CECONY
(Millions of Dollars) 2017 2016 2017 2016
Service cost $15 $13 $10 $10
Interest cost on accumulated other postretirement benefit obligation 34 36 28 30
Expected return on plan assets (52) (58) (45) (50)
Recognition of net actuarial loss/(gain) 2 4 (2) 2
Recognition of prior service cost (13) (15) (9) (11)
TOTAL PERIODIC OTHER POSTRETIREMENT BENEFIT COST $(14) $(20) $(18) $(19)
Cost capitalized 6 5 7 5
Reconciliation to rate level (3) 20 (1) 19
Cost charged to operating expenses $(11) $5 $(12) $5

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Expected Contributions

~~During the first nine months~~Based on estimates as of ~~2017,~~March 31, 2020, Con Edison ~~contributed $16~~and CECONY expect to make a contribution of $3 million (all of which ~~$8 million was contributed~~is to be made by ~~CECONY,~~CECONY) to the other postretirement benefit ~~plans.~~plans in 2020. The Companies' policy is to fund the total periodic benefit cost of the plans to the extent tax deductible.

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Note G —– Environmental Matters

Superfund Sites

Hazardous substances, such as asbestos, polychlorinated biphenyls (PCBs) and coal tar, have been used or generated in the course of operations of the Utilities and their predecessors and are present at sites and in facilities and equipment they currently or previously owned, including sites at which gas was manufactured or stored.

The Federal Comprehensive Environmental Response, Compensation and Liability Act of 1980 and similar state statutes (Superfund) impose joint and several liability, regardless of fault, upon generators of hazardous substances for investigation and remediation costs (which include costs of demolition, removal, disposal, storage, replacement, containment and monitoring) and natural resource damages. Liability under these laws can be material and may be imposed for contamination from past acts, even though such past acts may have been lawful at the time they occurred. The sites at which the Utilities have been asserted to have liability under these laws, including their manufactured gas plant sites and any neighboring areas to which contamination may have migrated, are referred to herein as “Superfund Sites.”

For Superfund Sites where there are other potentially responsible parties and the Utilities are not managing the site investigation and remediation, the accrued liability represents an estimate of the amount the Utilities will need to pay to investigate and, where determinable, discharge their related obligations. For Superfund Sites (including the manufactured gas plant sites) for which one of the Utilities is managing the investigation and remediation, the accrued liability represents an estimate of the company’s share of the undiscounted cost to investigate the sites and, for sites that have been investigated in whole or in part, the cost to remediate the sites, if remediation is necessary and if a reasonable estimate of such cost can be made. Remediation costs are estimated in light of the information available, applicable remediation standards and experience with similar sites.

The accrued liabilities and regulatory assets related to Superfund Sites at ~~September 30, 2017~~March 31, 2020 and December 31, ~~2016~~2019 were as follows:



	Con Edison		CECONY
(Millions of Dollars)	2020	2019	2020	2019
Accrued Liabilities:
Manufactured gas plant sites	$636	$640	$557	$561
Other Superfund Sites	101	94	100	93
Total	$737	$734	$657	$654
Regulatory assets	$735	$732	$652	$647

Con Edison CECONY
(Millions of Dollars) 2017 2016 2017 2016
Accrued Liabilities:
Manufactured gas plant sites $659 $664 $563 $567
Other Superfund Sites 86 89 85 88
Total $745 $753 $648 $655
Regulatory assets $803 $823 $690 $711

Most of the accrued Superfund Site liability relates to sites that have been investigated, in whole or in part. However, for some of the sites, the extent and associated cost of the required remediation has not yet been determined. As investigations progress and information pertaining to the required remediation becomes available, the Utilities expect that additional liability may be accrued, the amount of which is not presently determinable but may be material. The Utilities are permitted to recover or defer as regulatory assets (for subsequent recovery through rates) prudently incurred site investigation and remediation costs.

Environmental remediation costs incurred related to Superfund Sites for the three ~~and nine~~ months ended ~~September 30, 2017~~March 31, 2020 and ~~2016~~2019 were as follows:



	For the Three Months Ended March 31,
	Con Edison		CECONY
(Millions of Dollars)	2020	2019	2020	2019
Remediation costs incurred	$5	$3	$5	$2

For the Three Months Ended September 30,
Con Edison CECONY
(Millions of Dollars) 2017 2016 2017 2016
Remediation costs incurred $4 $8 $3 $5

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For the Nine Months Ended September 30,
Con Edison CECONY
(Millions of Dollars) 2017 2016 2017 2016
Remediation costs incurred $18 $20 $13 $10

Insurance and other third-party recoveries received by Con Edison or CECONY were immaterial for the three ~~and nine~~ months ended ~~September 30, 2017. Con Edison~~March 31, 2020 and ~~CECONY received $1 million in insurance recoveries for the three and nine months ended September 30, 2016.~~2019.

In ~~2016,~~2019, Con Edison and CECONY estimated that for their manufactured gas plant sites (including CECONY’s Astoria site), the aggregate undiscounted potential liability for the investigation and remediation of coal tar and/or other environmental contaminants could range up to $2.8 billion and $2.6 billion, respectively. These estimates were based on the assumption that there is contamination at all sites, including those that have not yet been fully

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investigated and additional assumptions about the extent of the contamination and the type and extent of the remediation that may be required. Actual experience may be materially different.

Asbestos Proceedings

Suits have been brought in New York State and federal courts against the Utilities and many other defendants, wherein a large number of plaintiffs sought large amounts of compensatory and punitive damages for deaths and injuries allegedly caused by exposure to asbestos at various premises of the Utilities. The suits that have been resolved, which are many, have been resolved without any payment by the Utilities, or for amounts that were not, in the aggregate, material to them. The amounts specified in all the remaining thousands of suits total billions of dollars; however, the Utilities believe that these amounts are greatly exaggerated, based on the disposition of previous claims. At ~~September 30, 2017,~~March 31, 2020, Con Edison and CECONY have accrued their estimated aggregate undiscounted potential liabilities for these suits and additional suits that may be brought over the next 15 years as shown in the following table. These estimates were based upon a combination of modeling, historical data analysis and risk factor assessment. Courts have begun, and unless otherwise determined on appeal may continue, to apply different standards for determining liability in asbestos suits than the standard that applied historically. As a result, the Companies currently believe that there is a reasonable possibility of an exposure to loss in excess of the liability accrued for the suits. The Companies are unable to estimate the amount or range of such loss. In addition, certain current and former employees have claimed or are claiming workers’ compensation benefits based on alleged disability from exposure to asbestos. CECONY is permitted to defer as regulatory assets (for subsequent recovery through rates) costs incurred for its asbestos lawsuits and workers’ compensation claims.

The accrued liability for asbestos suits and workers’ compensation proceedings (including those related to asbestos exposure) and the amounts deferred as regulatory assets for the Companies at ~~September 30, 2017~~March 31, 2020 and December 31, ~~2016~~2019 were as follows:



	Con Edison		CECONY
(Millions of Dollars)	2020	2019	2020	2019
Accrued liability – asbestos suits	$8	$8	$7	$7
Regulatory assets – asbestos suits	$8	$8	$7	$7
Accrued liability – workers’ compensation	$77	$78	$72	$73
Regulatory assets – workers’ compensation	$2	$3	$2	$3

Con Edison CECONY
(Millions of Dollars) 2017 2016 2017 2016
Accrued liability – asbestos suits $8 $8 $7 $7
Regulatory assets – asbestos suits $8 $8 $7 $7
Accrued liability – workers’ compensation $87 $88 $83 $83
Regulatory assets – workers’ compensation $12 $13 $12 $13

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Note H —– Other Material Contingencies

Manhattan Explosion and Fire

On March 12, 2014, ~~two~~2 multi-use five-story tall buildings located on Park Avenue between 116^th and 117^th Streets in Manhattan were destroyed by an explosion and fire. CECONY had delivered gas to the buildings through service lines from a distribution main located below ground on Park Avenue. ~~Eight~~NaN people died and more than 50 people were injured. Additional buildings were also damaged. The National Transportation Safety Board (NTSB) investigated. The parties to the investigation included the company, the City of New York, the Pipeline and Hazardous Materials Safety Administration and the NYSPSC. In June 2015, the NTSB issued a final report concerning the incident, its probable cause and safety recommendations. The NTSB determined that the probable cause of the incident was (1) the failure of a defective fusion joint at a service tee (which joined a plastic service line to a plastic distribution main) installed by the company that allowed gas to leak from the distribution main and migrate into a building where it ignited and (2) a breach in a City sewer line that allowed groundwater and soil to flow into the sewer, resulting in a loss of support for the distribution main, which caused it to sag and overstressed the defective fusion joint. The NTSB also made safety recommendations, including recommendations to the company that addressed its procedures for the preparation and examination of plastic fusions, training of its staff on conditions for notifications to the City’s Fire Department and extension of its gas main isolation valve installation program. In February 2017, the NYSPSC approved a settlement agreement with the company related to the NYSPSC's investigations of the incident and the practices of qualifying persons to perform plastic fusions. Pursuant to the agreement, the company ~~will not recover from customers $126 million of costs it incurred for gas emergency response activities in 2014, 2015 and 2016 in excess of the amounts reflected in its gas rate plan and will provide~~is providing $27 million of future benefits to customers (for which it has accrued a regulatory ~~liability, see Note B).~~liability) and will not recover from customers $126 million of costs for gas emergency response activities that it had previously incurred and expensed. Approximately ~~eighty~~80 suits are pending against the company seeking generally unspecified damages and, in some cases, punitive damages, for wrongful death, personal injury, property damage and business interruption. The company has notified its insurers of the incident and believes that the policies in force at the time of the incident will cover the company’s costs, in excess of a required retention (the amount of which is not material), to satisfy any liability it may have for damages in connection with the incident. The company is unable to estimate the amount or range of its possible loss for damages related to the incident. At ~~September 30, 2017,~~March 31, 2020, the company had not accrued a liability for damages related to the incident.

Other Contingencies

~~See~~For information about the PG&E bankruptcy, see "Long-Lived and Intangible Assets" in Note A and Note C. Also, for additional contingencies, see "Other Regulatory Matters" in Note B and “Uncertain Tax Positions” in Note I.J.

Guarantees

Con Edison and its subsidiaries ~~enter~~have entered into various agreements providing financial or performance assurance primarily to third parties on behalf of their subsidiaries. Maximum amounts guaranteed by Con Edison under these agreements totaled ~~$2,162~~$1,913 million and ~~$2,370~~$1,831 million at ~~September 30, 2017~~March 31, 2020 and December 31, ~~2016,~~2019, respectively.

A summary, by type and term, of Con Edison’s total guarantees under these agreements at ~~September 30, 2017~~March 31, 2020 is as follows:



Guarantee Type	0 – 3 years	4 – 10 years	> 10 years		Total
	(Millions of Dollars)
Con Edison Transmission	$362	$186		$—	$548
Energy transactions	432	30	209		671
Renewable electric production projects	218	9	397		624
Other	70	—	—		70
Total	$1,082	$225	$606		$1,913

Guarantee Type 0 – 3 years 4 – 10 years
> 10 years
Total
(Millions of Dollars)
Con Edison Transmission $643 $404
$—
$1,047
Energy transactions 459 30 211 700
Renewable electric production projects 268 —
19 287
Other 128 —
—
128
Total $1,498 $434 $230 $2,162

Con Edison Transmission — Con Edison has guaranteed payment by CET Electric of the contributions CET Electric agreed to make to New York Transco LLC (NY Transco). CET Electric ~~acquired~~owns a 45.7 percent interest in NY ~~Transco when it was formed in 2014.~~Transco. In ~~May 2016, the transmission owners transferred certain projects to NY Transco, for which CET Electric made its required contributions. NY Transco has proposed other transmission projects in~~April 2019, the New York Independent System ~~Operator's competitive bidding process. These other~~Operator (NYISO) selected a transmission project that was jointly proposed by National Grid and NY Transco. The siting, construction and operation of the project will require approvals and permits from appropriate governmental agencies and authorities, including the NYSPSC. The NYISO indicated it will work with the developers to enter into agreements for the development and operation of the projects, ~~are subject to certain authorizations from the NYSPSC, the FERC and, as applicable, other federal, state and local agencies.~~including a schedule for entry into service by December 2023. Guarantee ~~amount~~amounts shown ~~is for~~includes the maximum possible required amount of CET Electric’s contributions for ~~these other projects~~this project as calculated based on the

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assumptions that the ~~projects are~~project is completed at 175 percent of ~~their~~its estimated costs and NY Transco does not use any debt financing for the projects. Guarantee term shown is assumed as the selection of the projects and resulting timing of the contributions is not certain. Also included within the table above is a guarantee for $25 million from Con Edison on behalf of CET Gas in relation to a proposed gas transmission project in West Virginia and Virginia.project.

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Energy Transactions — Con Edison guarantees payments on behalf of the Clean Energy Businesses in order to facilitate physical and financial transactions in electricity, gas, pipeline capacity, transportation, oil, renewable energy credits and energy services. To the extent that liabilities exist under the contracts subject to these guarantees, such liabilities are included in Con Edison’s consolidated balance sheet.

Renewable Electric Production Projects — Con Edison ~~Con Edison Development,~~ and ~~Con Edison Solutions~~the Clean Energy Businesses guarantee payments on behalf of their wholly-owned subsidiaries associated with their investment in, or development for others of, solar and wind energy facilities.

Other — Other guarantees include $70 million in guarantees provided by Con Edison to Travelers Insurance Company for indemnity agreements for surety bonds in connection with operation of solar energy facilities and energy service projects of Con Edison Development and Con Edison Solutions, respectively. Other guarantees also includes Con Edison's guarantee (subject to a $53 million maximum amount) of certain obligations of Con Edison Solutions under the agreement pursuant to which it sold its retail electric supply business. In addition, Con Edison issued a guarantee estimated at $5 million to the Public Utility Commission of Texas covering obligations of Con Edison Solutions as a retail electric provider. As part of the sale agreement for the retail electric supply business discussed above, the purchaser has agreed to pay Con Edison Solutions for draws on the guarantee to the Public Utility Commission of Texas.Clean Energy Businesses.

Note I —– Leases

Operating lease cost and cash paid for amounts included in the measurement of lease liabilities for the three months ended March 31, 2020 and 2019 were as follows:



	Con Edison				CECONY
(Millions of Dollars)	2020		2019		2020		2019
Operating lease cost		$21		$21		$16		$16
Operating lease cash flows		$11		$8		$4		$4

As of March 31, 2020, assets recorded as finance leases were $1 million for Con Edison and an immaterial amount for CECONY, and the accumulated amortization associated with finance leases for Con Edison and CECONY were $3 million and $1 million, respectively. As of December 31, 2019, assets recorded as finance leases were $1 million for Con Edison and an immaterial amount for CECONY, and the accumulated amortization associated with finance leases for Con Edison and CECONY were $5 million and $3 million, respectively.

For the three months ended March 31, 2020 and 2019, finance lease costs and cash flows for Con Edison and CECONY were immaterial.

Right-of-use assets obtained in exchange for lease obligations were immaterial for Con Edison and CECONY for the three months ended March 31, 2020 and 2019.

Other information related to leases for Con Edison and CECONY at March 31, 2020 and December 31, 2019 were as follows:



	Con Edison		CECONY
	2020	2019	2020	2019
Weighted Average Remaining Lease Term:
Operating leases	19.5 years	19.8 years	13.8 years	14.0 years
Finance leases	13.1 years	12.2 years	2.5 years	2.4 years
Weighted Average Discount Rate:
Operating leases	4.3%	4.3%	3.6%	3.6%
Finance leases	3.2%	3.5%	3.5%	4.1%

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Future minimum lease payments under non-cancellable leases at March 31, 2020 were as follows:



(Millions of Dollars)	Con Edison			CECONY
Year Ending March 31,	Operating Leases	Finance Leases		Operating Leases	Finance Leases
2021	$77		$—	$59		$—
2022	74	—		56	—
2023	72	—		54	—
2024	72	—		54	—
2025	72	—		55	—
All years thereafter	983	1		499	—
Total future minimum lease payments	$1,350	$1		$777		$—
Less: imputed interest	(474)	—		(170)	—
Total	$876	$1		$607		$—
Reported as of March 31, 2020
Operating lease liabilities (current)	$77		$—	$59		$—
Operating lease liabilities (noncurrent)	799	—		548	—
Other noncurrent liabilities	—	1		—	—
Total	$876	$1		$607		$—

At March 31, 2020, the Companies did not have material obligations under operating or finance leases that had not yet commenced.

The Companies are lessors under certain leases whereby the Companies own real estate and distribution poles and lease portions of them to others. Revenue under such leases was immaterial for Con Edison and CECONY for the three months ended March 31, 2020 and 2019.

Note J – Income Tax

In response to the economic impacts of the COVID-19 pandemic, the Coronavirus Aid, Relief, and Economic Security Act (CARES Act) was signed into law on March 27, 2020. The CARES Act provides relief to corporate taxpayers by permitting a five-year carryback of net operating losses (NOLs) for tax years 2018, 2019 and 2020, removing the 80 percent limitation when applying the NOLs to carryback years, increasing the 30 percent limitation on interest deductibility to 50 percent of adjusted taxable income for tax years 2019 and 2020, and provides for certain employment tax credits and refunds for eligible employers.

Under the CARES Act, Con Edison will carryback its $29 million NOL from tax year 2018 to tax year 2013 generating a $2.5 million net tax refund for which a tax receivable was established at March 31, 2020. In addition, Con Edison recognized a discrete income tax benefit of $4 million in the first quarter of 2020, due to the higher federal statutory tax rate in 2013. The 2018 federal NOL was recorded at 21 percent and will be carried back to tax year 2013, which had a 35 percent federal statutory tax rate. This tax benefit was primarily recognized at the Clean Energy Businesses.

Con Edison’s income tax expense decreased to ~~$270~~$55 million for the three months ended ~~September 30, 2017~~March 31, 2020 from ~~$314~~$108 million for the three months ended ~~September 30, 2016. Con Edison's effective tax rate for the three months ended September 30, 2017 and 2016 was 37 percent and 39 percent, respectively.~~March 31, 2019. The decrease in ~~Con Edison's effective~~income tax ~~rate~~expense is primarily due to lower income before income tax expense (excluding income attributable to noncontrolling interest (see Note O)), lower state income taxes, ~~offset~~an increase in ~~part by~~the amortization of excess deferred federal income taxes due to CECONY’s new rate plan beginning in the first quarter of 2020, and a ~~decrease in~~$4 million income tax ~~benefits for plant-related flow through items.~~benefit due to the ability to carryback a net operating loss (NOL) from the 2018 tax year to the 2013 tax year as allowed under the CARES Act.

CECONY’s income tax expense ~~increased~~decreased to ~~$242~~$95 million for the three months ended ~~September 30, 2017~~March 31, 2020 from ~~$226~~$124 million for the three months ended ~~September 30, 2016. CECONY's effective~~March 31, 2019. The decrease in income tax expense is primarily due to lower income before income tax expense and an increase in the amortization of excess deferred federal income taxes due to CECONY’s new rate plan beginning in the first quarter of 2020, offset, in part, by higher state income taxes.

Reconciliation of the difference between income tax expense and the amount computed by applying the prevailing statutory income tax rate to income before income taxes for the three months ended ~~September 30, 2017~~March 31, 2020 and ~~2016 was 38 percent and 37 percent, respectively.~~2019 is as follows:

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	Con Edison				CECONY
(% of Pre-tax income)	2020		2019		2020		2019
STATUTORY TAX RATE
Federal	21	%	21	%	21	%	21	%
Changes in computed taxes resulting from:
State income tax	4		4		5		5
Taxes attributable to non-controlling interest	(1	)	(1	)	—		—
Cost of removal	2		1		2		1
Other plant-related items	(1	)	—		(1	)	—
Renewable energy credits	(2	)	(1	)	—		—
CARES Act NOL carryback	(1	)	—		—		—
Amortization of excess deferred federal income taxes	(9	)	(3	)	(8	)	(3	)
Other	(1	)	(1	)	—		(1	)
Effective tax rate	12	%	20	%	19	%	23	%

CECONY deferred as regulatory liabilities its estimated net benefits for its electric service under the TCJA for the three months ended March 31, 2019. The ~~increase~~net benefits include the revenue requirement impact of the reduction in ~~CECONY's effective~~the corporate federal income tax rate ~~is primarily due~~ to ~~a decrease~~21 percent, the elimination for utilities of bonus depreciation and the amortization of excess deferred federal income taxes the utilities collected from customers that will not need to be paid to the Internal Revenue Service under the TCJA. See “Other Regulatory Matters” in ~~tax~~Note B.

Under CECONY’s new electric rate plan that began in the first quarter of 2020, the deferral of its net benefits for ~~plant-related flow through items~~its electric service ceased and ~~lower research and development credits, offset~~is included in ~~part by lower state income taxes.~~

~~Con Edison’s income tax expense decreased to $599 million for~~its new rates. Additionally, the ~~nine months ended September 30, 2017 from $602 million for~~amortization of the ~~nine months ended September 30, 2016. Con Edison's effective tax rate for the nine months ended September 30, 2017 and 2016 was 37 percent. The effective tax rate remained unchanged as lower state~~unprotected excess deferred federal income taxes ~~were offset by~~for its electric and gas services is being amortized over a ~~decrease~~five-year period, which increased the tax benefit in ~~tax benefits for plant-related flow through items.~~the first quarter of 2020.

CECONY’s income tax expense increased to $551 million for the nine months ended September 30, 2017 from $491 million for the nine months ended September 30, 2016. CECONY's effective tax rate for the nine months ended September 30, 2017 and 2016 was 38 percent and 36 percent, respectively. The increase in CECONY's effective tax rate is primarily due to a decrease in tax benefits for plant-related flow through items and lower research and development tax credits, offset in part by lower state income taxes.

Con Edison anticipates a federal consolidated net operating loss for 2017, primarily due to bonus depreciation. Con Edison expects to carryback a portion of its 2017 net operating loss to recover $19 million of income tax. The remaining 2017 net operating loss, as well as general business tax credits generated in 2017, will be carried forward to future tax years. A deferred tax asset for these tax attribute carryforwards was recorded, and no valuation allowance has been provided, as it is more likely than not that the deferred tax asset will be realized.

Uncertain Tax Positions

At ~~September 30, 2017,~~March 31, 2020, the estimated liability for uncertain tax positions for Con Edison was ~~$41~~$13 million ($213 million for CECONY). Con Edison reasonably expects to resolve ~~approximately $35 million ($24 million, net of federal taxes) of its uncertain tax positions~~ within the next twelve months ~~including $21~~approximately $10 million ~~($15 million, net~~ of various federal ~~taxes),~~and state uncertainties due to the expected completion of ongoing tax examinations, of which the entire amount, if recognized, would reduce Con ~~Edison’s~~Edison's effective tax rate. The amount related to CECONY is approximately ~~$18 million ($13 million, net of federal taxes), including $4~~$1 million, which, if recognized, would reduce CECONY’s effective tax rate. The total amount of unrecognized tax benefits, if recognized, that would reduce Con Edison’s effective tax rate is ~~$25~~$13 million ($1812 million, net of federal taxes). with $3 million attributable to CECONY.

~~Table of Contents~~

The Companies recognize interest on liabilities for uncertain tax positions in interest expense and would recognize penalties, if any, in operating expenses in the Companies’ consolidated income statements. In the three ~~and nine~~ months ended ~~September 30, 2017,~~March 31, 2020, the Companies recognized an immaterial amount of interest expense and no penalties for uncertain tax positions in their consolidated income statements. At ~~September 30, 2017~~March 31, 2020 and December 31, ~~2016,~~2019, the Companies recognized an immaterial amount of accrued interest on their consolidated balance sheets.

Note ~~J —~~K – Revenue Recognition

The following table presents, for the three months ended March 31, 2020 and 2019, revenue from contracts with customers as defined in Accounting Standards Codification (ASC) Topic 606, "Revenue from Contracts with Customers," as well as additional revenue from sources other than contracts with customers, disaggregated by major source.

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	For the Three Months Ended March 31, 2020				For the Three Months Ended March 31, 2019
(Millions of Dollars)	Revenues from contracts with customers		Other revenues (a)	Total operating revenues	Revenues from contracts with customers		Other revenues (a)	Total operating revenues
CECONY
Electric	$1,732		$38	$1,770	$1,714		$83	$1,797
Gas	833		1	834	910		11	921
Steam	245		5	250	317		4	321
Total CECONY	$2,810		$44	$2,854	$2,941		$98	$3,039
O&R
Electric	128		8	136	143		2	145
Gas	93	��	4	97	114		(1)	113
Total O&R	$221		$12	$233	$257		$1	$258
Clean Energy Businesses
Renewables	114	(b)	—	114	106	(b)	—	106
Energy services	11		—	11	23		—	23
Other	—		21	21	—		88	88
Total Clean Energy Businesses	$125		$21	$146	$129		$88	$217
Con Edison Transmission	1		—	1	1		—	1
Other (c)	—		—	—	—		(1)	(1)
Total Con Edison	$3,157		$77	$3,234	$3,328		$186	$3,514

(a) For the Utilities, this includes revenue from alternative revenue programs, such as the revenue decoupling mechanisms under their New York electric and gas rate plans.For the Clean Energy Businesses, this includes revenue from wholesale services.

(b) Included within the totals for Renewables revenue at the Clean Energy Businesses is $3 million and $2 million for the three months ended March 31, 2020 and 2019, respectively, of revenue related to engineering, procurement and construction services.


(c)	Parent company and consolidation adjustments.



	2020			2019
(Millions of Dollars)	Unbilled contract revenue (a)	Unearned revenue (b)		Unbilled contract revenue (a)	Unearned revenue (b)
Beginning balance as of January 1,	$29	$17		$29	$20
Additions (c)	14	—		24	—
Subtractions (c)	18	1	(d)	15	1	(d)
Ending balance as of March 31,	$25	$16		$38	$19

(a)

Unbilled contract revenue represents accumulated incurred costs and earned profits on contracts (revenue arrangements), which have been recorded as revenue, but have not yet been billed to customers, and which represent contract assets as defined in Topic 606. Substantially all accrued unbilled contract revenue is expected to be collected within one year. Unbilled contract revenue arises from the cost-to-cost method of revenue recognition. Unbilled contract revenue from fixed-price type contracts is converted to billed receivables when amounts are invoiced to customers according to contractual billing terms, which generally occur when deliveries or other performance milestones are completed.


(b)	Unearned revenue represents a liability for billings to customers in excess of earned revenue, which are contract liabilities as defined in Topic 606.


(c)	Additions for unbilled contract revenue and subtractions for unearned revenue represent additional revenue earned. Additions for unearned revenue and subtractions for unbilled contract revenue represent billings. Activity also includes appropriate balance sheet classification for the period.


(d)	Of the subtractions from unearned revenue, $1 million was included in the balances as of January 1, 2020 and 2019.

As of March 31, 2020, the aggregate amount of the remaining fixed performance obligations of the Clean Energy Businesses under contracts with customers for energy services is $74 million, of which $38 million will be recognized within the next two years, and the remaining $36 million will be recognized pursuant to long-term service and maintenance agreements.

In March 2020, the Utilities began suspending new late payment charges and certain other fees for all customers. The amount of these charges that was not collected for the three months ended March 31, 2020 was $3 million for Con Edison and CECONY. The Utilities also began providing payment extensions for all customers that were scheduled to be disconnected prior to the start of the COVID-19 pandemic. See "COVID-19 Regulatory Matters" in Note B.

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Note L – Financial Information by Business Segment

Con Edison’s principal business segments are CECONY’s regulated utility activities, O&R’s regulated utility activities, the Clean Energy Businesses and Con Edison Transmission. CECONY’s principal business segments are its regulated electric, gas and steam utility activities. The financial data for the business segments for the three ~~and nine~~ months ended ~~September 30, 2017~~March 31, 2020 and ~~2016~~2019 were as follows:


	For the Three Months Ended September 30,										For the Three Months Ended March 31,
	Operating revenues		Inter-segment revenues				Depreciation and amortization		Operating income/(loss)		Operating revenues		Inter-segment revenues				Depreciation and amortization		Operating income/(loss)
(Millions of Dollars)	2017	2016	2017		2016		2017	2016	2017	2016	2020	2019	2020		2019		2020	2019	2020	2019
CECONY
Electric	$2,469	$2,557	$4		$5		$232	$217	$855	$841	$1,770	$1,797	$4				$297	$257	$282	$257
Gas	268	208	2		1		47	41	(12)	(28)	834	921	2				71	55	369	344
Steam	62	63	19		22		21	20	(43)	(47)	250	321	19		18		22		91	125
Consolidation adjustments	—	—	(25)		(28)		—	—	—	—	—	—	(25)		(24)		—	—	—	—
Total CECONY	$2,799	$2,828		$—		$—	$300	$278	$800	$766	$2,854	$3,039		$—		$—	$390	$334	$742	$726
O&R
Electric	$206	$213		$—		$—	$13	$12	$56	$55	$136	$145		$—		$—	$16	$15	$14	$16
Gas	28	27	—		—		5		(11)	(7)	97	113	—		—		6		41	38
Total O&R	$234	$240		$—		$—	$18	$17	$45	$48	$233	$258		$—		$—	$22	$21	$55	$54
Clean Energy Businesses	$177	$350		$—	$(2)		$19	$11	$29	$125	$146	$217		$—		$—	$57	$58	$14	$11
Con Edison Transmission	1	—	—		—		—	—	(2)	(1)	1		—		—		1	—	(2)
Other (a)	—	(1)	—		2		—	(1)	1	2	—	(1)	—		—		—	—	(1)	(3)
Total Con Edison	$3,211	$3,417		$—		$—	$337	$305	$873	$940	$3,234	$3,514		$—		$—	$470	$413	$808	$786

For the Nine Months Ended September 30,

Operating
revenues
Inter-segment
revenues
Depreciation and
amortization
Operating
income/(loss)
(Millions of Dollars) 2017
2016
2017
2016
2017
2016
2017
2016
CECONY
Electric $6,079 $6,222 $12 $13 $690 $645 $1,477 $1,487
Gas 1,421 1,113 5 4 137 118 362 273
Steam 448 406 55 65 64 62 52 39
Consolidation adjustments —
—
(72) (82) —
—
—
—
Total CECONY $7,948 $7,741
$—

$—
$891 $825 $1,891 $1,799
O&R
Electric $495 $497
$—

$—
$38 $37 $83 $86
Gas 172 133 —
—
15 13 33 28
Total O&R $667 $630
$—

$—
$53 $50 $116 $114
Clean Energy Businesses $460 $998
$—
$7 $54 $30 $63 $184
Con Edison Transmission 1 —
—
—
—
—
(6) (1)
Other (a) (4) (1) —
(7) —
—
2 1
Total Con Edison $9,072 $9,368
$—

$—
$998 $905 $2,066 $2,097

(a)Parent company and consolidation adjustments. Other does not represent a business segment.

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Note ~~K —~~M – Derivative Instruments and Hedging Activities

Con Edison’s subsidiaries hedge market price fluctuations associated with physical purchases and sales of electricity, natural gas, steam and, to a lesser extent, refined fuels by using derivative instruments including futures, forwards, basis swaps, options, transmission congestion contracts and financial transmission rights contracts. These are economic hedges, for which the Utilities and the Clean Energy Business do not elect hedge accounting. The Clean Energy Businesses use interest rate swaps to manage the risks associated with interest rates related to outstanding and expected future debt issuances and borrowings. Derivatives are recognized on the consolidated balance sheet at fair value (see Note L)N), unless an exception is available under the accounting rules for derivatives and hedging. Qualifying derivative contracts that have been designated as normal purchases or normal sales contracts are not reported at fair value under the accounting rules.

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The fair values of the Companies’ ~~commodity~~ derivatives including the offsetting of assets and liabilities on the consolidated balance sheet at ~~September 30, 2017~~March 31, 2020 and December 31, ~~2016~~2019 were:


(Millions of Dollars)	2017				2016				2020				2019
Balance Sheet Location	Gross Amounts of Recognized Assets/(Liabilities)	Gross Amounts Offset	Net Amounts of Assets/ (Liabilities) (a)		Gross Amounts of Recognized Assets/(Liabilities)	Gross Amounts Offset	Net Amounts of Assets/ (Liabilities) (a)		Gross Amounts of Recognized Assets/(Liabilities)	Gross Amounts Offset	Net Amounts of Assets/ (Liabilities) (a)		Gross Amounts of Recognized Assets/(Liabilities)	Gross Amounts Offset	Net Amounts of Assets/ (Liabilities) (a)
Con Edison
Fair value of derivative assets
Current	$77	$(67)	$10	(b)	$81	$(64)	$17	(b)	$61	$(4)	$57	(b)	$60	$(3)	$57	(b)
Noncurrent	64	(61)	3		49	(43)	6		17	(9)	8		19	(13)	6	(d)
Total fair value of derivative assets	$141	$(128)	$13		$130	$(107)	$23		$78	$(13)	$65		$79	$(16)	$63
Fair value of derivative liabilities
Current	$(141)	$71	$(70)		$(138)	$61	$(77)		$(167)	$14	$(153)	(c)	$(140)	$17	$(123)	(d)
Noncurrent	(143)	60	(83)		(91)	52	(39)	(c)	(241)	13	(228)	(c)	(122)	16	(106)	(d)
Total fair value of derivative liabilities	$(284)	$131	$(153)		$(229)	$113	$(116)		$(408)	$27	$(381)		$(262)	$33	$(229)
Net fair value derivative assets/(liabilities)	$(143)	$3	$(140)	(b)	$(99)	$6	$(93)	(b) (c)	$(330)	$14	$(316)		$(183)	$17	$(166)
CECONY
Fair value of derivative assets
Current	$55	$(53)	$2	(b)	$52	$(45)	$7	(b)	$44	$(14)	$30	(b)	$39	$(6)	$33	(b)
Noncurrent	57	(55)	2		41	(35)	6		16	(8)	8		17	(12)	5
Total fair value of derivative assets	$112	$(108)	$4		$93	$(80)	$13		$60	$(22)	$38		$56	$(18)	$38
Fair value of derivative liabilities
Current	$(116)	$57	$(59)		$(111)	$45	$(66)		$(123)	$24	$(99)		$(100)	$19	$(81)
Noncurrent	(127)	54	(73)		(77)	44	(33)		(122)	9	(113)		(80)	16	(64)
Total fair value of derivative liabilities	$(243)	$111	$(132)		$(188)	$89	$(99)		$(245)	$33	$(212)		$(180)	$35	$(145)
Net fair value derivative assets/(liabilities)	$(131)	$3	$(128)	(b)	$(95)	$9	$(86)	(b)	$(185)	$11	$(174)		$(124)	$17	$(107)

(a)

Derivative instruments and collateral were offset on the consolidated balance sheet as applicable under the accounting rules. The Companies enter into master agreements for their commodity derivatives. These agreements typically provide offset in the event of contract termination. In such case, generally the non-defaulting party’s payable will be offset by the defaulting party’s payable. The non-defaulting party will customarily notify the defaulting party within a specific time period and come to an agreement on the early termination amount.

(b)

At ~~September 30, 2017~~March 31, 2020 and December 31, ~~2016,~~2019, margin deposits for Con Edison ($58 million and $7$9 million, respectively) and CECONY ($57 million and $7$8 million, respectively) were classified as derivative assets on the consolidated balance sheet, but not included in the table. Margin is collateral, typically cash, that the holder of a derivative instrument is required to deposit in order to transact on an exchange and to cover its potential losses with its broker or the exchange.


(c)	~~Does not include $(1) million~~ Includes amounts for interest rate ~~swap.~~swaps of $(17) million in current liabilities and $(109) million in noncurrent liabilities. At March 31, 2020, the Clean Energy Businesses had interest rate swaps with notional amounts of $910 million. The expiration dates of the swaps range from 2024-2041.


(d)	Includes amounts for interest rate swaps of $1 million in noncurrent assets, $(7) million in current liabilities and $(34) million in noncurrent liabilities. At December 31, 2019, the Clean Energy Businesses had interest rate swaps with notional amounts of $919 million. The expiration dates of the swaps range from 2024-2041.

The Utilities generally recover their prudently incurred fuel, purchased power and gas costs, including hedging gains and losses, in accordance with rate provisions approved by the applicable state utility regulators. In accordance with the accounting rules for regulated operations, the Utilities record a regulatory asset or liability to defer recognition of unrealized gains and losses on their electric and gas derivatives. As gains and losses are realized in future periods, they will be recognized as purchased power, gas and fuel costs in the Companies’ consolidated income statements.

The Clean Energy Businesses record realized and unrealized gains and losses on their derivative contracts in purchased power, gas purchased for resale and non-utility revenue in the reporting period in which they occur. The Clean Energy Businesses record changes in the fair value of their interest rate swaps in other interest expense at the end of each reporting period. Management believes that these derivative instruments represent economic hedges that mitigate exposure to fluctuations in commodity ~~prices.~~prices and interest rates.

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The following table presents the realized and unrealized gains or losses on ~~commodity~~ derivatives that have been deferred or recognized in earnings for the three ~~and nine~~ months ended ~~September 30, 2017~~March 31, 2020 and ~~2016:~~2019:

For the Three Months Ended September 30,
Con Edison CECONY
(Millions of Dollars) Balance Sheet Location 2017
2016 2017
2016
Pre-tax gains/(losses) deferred in accordance with accounting rules for regulated operations:
Current Deferred derivative gains $(4) $(1) $(3) $(3)
Noncurrent Deferred derivative gains 1 (2) 1 —
Total deferred gains/(losses) $(3) $(3) $(2) $(3)
Current Deferred derivative losses $(11) $(19) $(9) $(18)
Current Recoverable energy costs (40) (39) (38) (35)
Noncurrent Deferred derivative losses (12) (17) (8) (14)
Total deferred gains/(losses) $(63) $(75) $(55) $(67)
Net deferred gains/(losses) $(66) $(78) $(57) $(70)
Income Statement Location
Pre-tax gains/(losses) recognized in income
Purchased power expense
$—
$(37) (b)
$—

$—
Gas purchased for resale (47) (38) —
—
Non-utility revenue 5 (a) (2) (b) —
—
Total pre-tax gains/(losses) recognized in income $(42) $(77)
$—

$—


~~(a)~~	~~For the three months ended September 30, 2017, Con Edison recorded an unrealized pre-tax gain in non-utility operating revenue ($6 million).~~


~~(b)~~	~~For the three months ended September 30, 2016, Con Edison recorded unrealized pre-tax losses in non-utility operating revenue ($2 million) and purchased power expense ($23 million).~~



		For the Three Months Ended March 31,
		Con Edison		CECONY
(Millions of Dollars)	Balance Sheet Location	2020	2019	2020		2019
Pre-tax gains/(losses) deferred in accordance with accounting rules for regulated operations:
Current	Deferred derivative gains	$(1)	$5	$(1)		$3
Noncurrent	Deferred derivative gains	3	(6)	3		(5)
Total deferred gains/(losses)		$2	$(1)	$2		$(2)
Current	Deferred derivative losses	$(14)	$(3)	$(12)			$—
Current	Recoverable energy costs	(96)	(18)	(86)		(14)
Noncurrent	Deferred derivative losses	(45)	(26)	(42)		(26)
Total deferred gains/(losses)		$(155)	$(47)	$(140)		$(40)
Net deferred gains/(losses)		$(153)	$(48)	$(138)		$(42)
	Income Statement Location
Pre-tax gains/(losses) recognized in income
	Gas purchased for resale	$(2)	$(3)		$—		$—
	Non-utility revenue	5	9	—		—
	Other operations and maintenance expense	(7)	2	(7)		2
	Other interest expense	(86)	(9)	—
Total pre-tax gains/(losses) recognized in income		$(90)	$(1)	$(7)			$2

For the Nine Months Ended September 30,
Con Edison CECONY
(Millions of Dollars) Balance Sheet Location 2017
2016 2017
2016
Pre-tax gains/(losses) deferred in accordance with accounting rules for regulated operations:
Current Deferred derivative gains $(26) $6 $(22) $2
Noncurrent Deferred derivative gains (2) (1) (2) (1)
Total deferred gains/(losses) $(28) $5 $(24) $1
Current Deferred derivative losses $10 $19 $11 $16
Current Recoverable energy costs (125) (163) (116) (148)
Noncurrent Deferred derivative losses (40) (5) (36) (3)
Total deferred gains/(losses) $(155) $(149) $(141) $(135)
Net deferred gains/(losses) $(183) $(144) $(165) $(134)
Income Statement Location
Pre-tax gains/(losses) recognized in income
Purchased power expense
$—
$(106) (b)
$—

$—
Gas purchased for resale (161) (72) —
—
Non-utility revenue 11 (a) 15 (b) —
—
Total pre-tax gains/(losses) recognized in income $(150) $(163)
$—

$—


~~(a)~~	~~For the nine months ended September 30, 2017, Con Edison recorded an unrealized pre-tax gain in non-utility operating revenue ($2 million).~~


~~(b)~~	For the nine months ended September 30, 2016, Con Edison recorded unrealized pre-tax gains and losses in non-utility operating revenue ($3 million loss) and purchased power expense ($11 million gain).

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The following table presents the hedged volume of Con Edison’s and CECONY’s commodity derivative transactions at ~~September 30, 2017:~~March 31, 2020:


	Electric Energy (MWh) (a)(b)	Capacity (MW) (a)	Natural Gas (Dt) (a)(b)	Refined Fuels (gallons)	Electric Energy (MWh) (a)(b)	Capacity (MW) (a)	Natural Gas (Dt) (a)(b)	Refined Fuels (gallons)
Con Edison	32,596,372	6,790	166,913,644	672,000	21,682,575	26,614	260,204,579	10,752,000
CECONY	30,492,575	3,000	158,500,000	672,000	19,582,075	21,900	241,100,000	10,752,000


(a)	Volumes are reported net of long and short positions, except natural gas collars where the volumes of long positions are reported.


(b)	Excludes electric congestion and gas basis swap contracts, which are associated with electric and gas contracts and hedged volumes.

The Companies are exposed to credit risk related to transactions entered into primarily for the various energy supply and hedging activities by the Utilities and the Clean Energy Businesses. Credit risk relates to the loss that may result from a counterparty’s nonperformance. The Companies use credit policies to manage this risk, including an established credit approval process, monitoring of counterparty limits, netting provisions within agreements, collateral or prepayment arrangements, credit insurance and credit default swaps. The Companies measure credit risk exposure as the replacement cost for open energy commodity and derivative positions plus amounts owed from counterparties for settled transactions. The replacement cost of open positions represents unrealized gains, net of any unrealized losses where the Companies have a legally enforceable right to offset.

At ~~September 30, 2017,~~March 31, 2020, Con Edison and CECONY had ~~$80~~$120 million and $8$7 million of credit exposure in connection with open energy supply net receivables and hedging activities, net of collateral, respectively. Con Edison’s net credit exposure consisted of ~~$23~~$47 million with ~~investment-grade counterparties, $23~~independent system operators, $36 million with non-investment grade/non-rated counterparties, ~~$19~~$28 million with ~~independent system operators~~investment-grade counterparties and ~~$15~~$9 million with commodity exchange brokers. CECONY’s net credit exposure consisted of $7 million with commodity exchange brokers and ~~$1 million~~an immaterial amount with ~~investment-grade~~non-investment-grade counterparties.

The collateral requirements associated with, and settlement of, derivative transactions are included in net cash flows from operating activities in the Companies’ consolidated statement of cash flows. Most derivative instrument contracts contain provisions that may require a party to provide collateral on its derivative instruments that are in a net liability position. The amount of collateral to be provided will depend on the fair value of the derivative instruments and the party’s credit ratings.

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The following table presents the aggregate fair value of the Companies’ derivative instruments with credit-risk-related contingent features that are in a net liability position, the collateral posted for such positions and the additional collateral that would have been required to be posted had the lowest applicable credit rating been reduced one level and to below investment grade at ~~September 30, 2017:~~March 31, 2020:


(Millions of Dollars)	Con Edison (a)		CECONY (a)		Con Edison (a)		CECONY (a)
Aggregate fair value – net liabilities	$148		$131		$232		$210
Collateral posted	61		56		134		128
Additional collateral (b) (downgrade one level from current ratings)	23		22		39		31
Additional collateral (b) (downgrade to below investment grade from current ratings)	101	(c)	88	(c)	123	(c)	102	(c)

(a)

Non-derivative transactions for the purchase and sale of electricity and gas and qualifying derivative instruments, which have been designated as normal purchases or normal sales, are excluded from the table. These transactions primarily include purchases of electricity from independent system operators. In the event the Utilities and the Clean Energy Businesses were no longer extended unsecured credit for such purchases, the Companies would be required to post an immaterial amount of additional collateral ~~of $11 million~~ at ~~September 30, 2017.~~March 31, 2020. For certain other such non-derivative transactions, the Companies could be required to post collateral under certain circumstances, including in the event counterparties had reasonable grounds for insecurity.

(b)

The Companies measure the collateral requirements by taking into consideration the fair value amounts of derivative instruments that contain credit-risk-related contingent features that are in a net liability position plus amounts owed to counterparties for settled transactions and amounts required by counterparties for minimum financial security. The fair value amounts represent unrealized losses, net of any unrealized gains where the Companies have a legally enforceable right to offset.


(c)	Derivative instruments that are net assets have been excluded from the table. At ~~September 30, 2017,~~March 31, 2020, if Con Edison had been downgraded to below investment grade, it would have been required to post additional collateral for such derivative instruments of ~~$13~~$32 million.

~~Interest Rate Swap~~

In December 2016, the Clean Energy Businesses acquired Coram Wind project which holds an interest rate swap that terminates in June 2024, pursuant to which it pays a fixed-rate of 2.0855 percent and receives a LIBOR-based variable rate. The fair value of this interest rate swap was immaterial as of September 30, 2017 and a liability of $1 million as of December 31, 2016 on Con Edison’s consolidated balance sheet.

~~Table of Contents~~

Note ~~L —~~N – Fair Value Measurements

The accounting rules for fair value measurements and disclosures define fair value as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date in a principal or most advantageous market. Fair value is a market-based measurement that is determined based on inputs, which refer broadly to assumptions that market participants use in pricing assets or liabilities. These inputs can be readily observable, market corroborated, or generally unobservable firm inputs. The Companies often make certain assumptions that market participants would use in pricing the asset or liability, including assumptions about risk, and the risks inherent in the inputs to valuation techniques. The Companies use valuation techniques that maximize the use of observable inputs and minimize the use of unobservable inputs.

The accounting rules for fair value measurements and disclosures established a fair value hierarchy, which prioritizes the inputs to valuation techniques used to measure fair value in three broad levels. The rules require that assets and liabilities be classified in their entirety based on the level of input that is significant to the fair value measurement. Assessing the significance of a particular input may require judgment considering factors specific to the asset or liability and may affect the valuation of the asset or liability and their placement within the fair value hierarchy. The Companies classify fair value balances based on the fair value hierarchy defined by the accounting rules for fair value measurements and disclosures as follows:

Level 1 – Consists of assets or liabilities whose value is based on unadjusted quoted prices in active markets at the measurement date. An active market is one in which transactions for assets or liabilities occur with sufficient frequency and volume to provide pricing information on an ongoing basis. This category includes contracts traded on active exchange markets valued using unadjusted prices quoted directly from the exchange.

Level 2 – Consists of assets or liabilities valued using industry standard models and based on prices, other than quoted prices within Level 1, that are either directly or indirectly observable as of the measurement date. The industry standard models consider observable assumptions including time value, volatility factors and current market and contractual prices for the underlying commodities, in addition to other economic measures. This category includes contracts traded on active exchanges or in over-the-counter markets priced with industry standard models.

Level 3 – Consists of assets or liabilities whose fair value is estimated based on internally developed models or methodologies using inputs that are generally less readily observable and supported by little, if any, market activity at the measurement date. Unobservable inputs are developed based on the best available information and subject to cost benefit constraints. This category includes contracts priced using models that are internally developed and contracts placed in illiquid markets. It also includes contracts that expire after the period of time for which quoted prices are available and internal models are used to determine a significant portion of the value.

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Assets and liabilities measured at fair value on a recurring basis as of ~~September 30, 2017~~March 31, 2020 and December 31, ~~2016~~2019 are summarized below.


	2017					2016						2020					2019
(Millions of Dollars)	Level 1	Level 2	Level 3	Netting Adjustment (e)	Total	Level 1	Level 2	Level 3		Netting Adjustment (e)	Total	Level 1	Level 2	Level 3	Netting Adjustment (e)	Total	Level 1	Level 2	Level 3	Netting Adjustment (e)		Total
Con Edison
Derivative assets:
Commodity (a)(b)(c)	$6	$28	$2	$(18)	$18	$14	$33	$7		$(24)	$30	$8	$64	$2	$(1)	$73	$4	$61	$2	$4		$71
Interest rate swaps (a)(b)(c)												—	—	—	—	—	—	1	—	—		1
Other (a)(b)(d)	271	118	—	—	389	222	111	—		—	333	308	125	—	—	433	353	125	—	—		478
Total assets	$277	$146	$2	$(18)	$407	$236	$144	$7		$(24)	$363	$316	$189	$2	$(1)	$506	$357	$187	$2	$4		$550
Derivative liabilities:
Commodity (a)(b)(c)	$2	$155	$22	$(26)	$153	$4	$144	$6		$(38)	$116	$18	$245	$15	$(23)	$255	$18	$174	$18	$(22)		$188
Interest Rate Swap (a)(b)(c)	—	—	—	—	—	—	1	—		—	1
Interest rate swaps (a)(b)(c)												—	126	—	—	126	—	41	—	—		41
Total liabilities	$2	$155	$22	$(26)	$153	$4	$145	$6		$(38)	$117	$18	$371	$15	$(23)	$381	$18	$215	$18	$(22)		$229
CECONY
Derivative assets:
Commodity (a)(b)(c)	$5	$12	$1	$(9)	$9	$10	$19	$1		$(10)	$20	$6	$49	$1	$(11)	$45	$3	$42	$1		$—	$46
Other (a)(b)(d)	248	113	—	—	361	200	106	—		—	306	289	119	—	—	408	333	119	—	—		452
Total assets	$253	$125	$1	$(9)	$370	$210	$125	$1		$(10)	$326	$295	$168	$1	$(11)	$453	$336	$161	$1		$—	$498
Derivative liabilities:
Commodity (a)(b)(c)	$1	$133	$15	$(17)	$132	$1	$124		$—	$(26)	$99	$16	$218	$7	$(29)	$212	$15	$147	$7	$(24)		$145

(a)

The Companies’ policy is to review the fair value hierarchy and recognize transfers into and transfers out of the levels at the end of each reporting period. ~~There were~~Con Edison and CECONY had no transfers between levels 1, 2, and 3 ~~for~~during the ~~nine~~three months ended ~~September 30, 2017~~March 31, 2020. Con Edison and ~~for~~CECONY had $24 million and $22 million of commodity derivative liabilities transferred from level 3 to level 2 during the year ended December 31, ~~2016.~~2019 because of availability of observable market data due to the decrease in the terms of certain contracts from beyond three years as of September 30, 2019 to less than three years as of December 31, 2019.

(b)

Level 2 assets and liabilities include investments held in the deferred compensation plan and/or non-qualified retirement plans, exchange-traded contracts where there is insufficient market liquidity to warrant inclusion in Level 1, certain over-the-counter derivative instruments for electricity, refined products and natural gas. Derivative instruments classified as Level 2 are valued using industry standard models that incorporate corroborated observable inputs; such as pricing services or prices from similar instruments that trade in liquid markets, time value and volatility factors.

(c)

The accounting rules for fair value measurements and disclosures require consideration of the impact of nonperformance risk (including credit risk) from a market participant perspective in the measurement of the fair value of assets and liabilities. At ~~September 30, 2017~~March 31, 2020 and December 31, ~~2016,~~2019, the Companies determined that nonperformance risk would have no material impact on their financial position or results of operations.


(d)	Other assets are comprised of assets such as life insurance contracts within the deferred compensation plan and non-qualified retirement plans.


(e)	Amounts represent the impact of legally-enforceable master netting agreements that allow the Companies to net gain and loss positions and cash collateral held or placed with the same counterparties.

The employees in the Companies’ risk management group develop and maintain the Companies’ valuation policies and procedures for, and verify pricing and fair value valuation of, commodity ~~derivatives.~~derivatives and interest rate swaps. Under the Companies’ policies and procedures, multiple independent sources of information are obtained for forward price curves used to value commodity ~~derivatives.~~derivatives and interest rate swaps. Fair value and changes in fair value of commodity derivatives and interest rate swaps are reported on a monthly basis to the Companies’ risk committees, comprised of officers and employees of the Companies that oversee energy hedging at the Utilities and the Clean Energy Businesses. The risk management group reports to the Companies’ Vice President and Treasurer.

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Fair Value of Level 3 at September 30, 2017
Valuation
Techniques
Unobservable Inputs Range
(Millions of Dollars)
Con Edison – Commodity
Electricity $(21) Discounted Cash Flow Forward energy prices (a) $19.00-$76.25 per MWh

Discounted Cash Flow Forward capacity prices (a) $1.26-$9.47 per kW-month
Transmission Congestion Contracts/Financial Transmission Rights 1 Discounted Cash Flow Discount to adjust auction prices for inter-zonal forward price curves (b) 50.0%
Inter-zonal forward price curves adjusted for historical zonal losses (b) $0.50-$6.75 per MWh
Total Con Edison—Commodity $(20)
CECONY – Commodity
Electricity $(15) Discounted Cash Flow Forward energy prices (a) $20.50-$76.25 per MWh
Transmission Congestion Contracts 1 Discounted Cash Flow Discount to adjust auction prices for inter-zonal forward price curves (b) 50.0%
Total CECONY—Commodity $(14)



	Fair Value of Level 3 at March 31, 2020	Valuation Techniques	Unobservable Inputs	Range
	(Millions of Dollars)	Valuation Techniques	Unobservable Inputs	Range
Con Edison – Commodity
Electricity	$(14)	Discounted Cash Flow	Forward capacity prices (a)	$0.10-$8.75 per kW-month
Transmission Congestion Contracts/Financial Transmission Rights	1	Discounted Cash Flow	Inter-zonal forward price curves adjusted for historical zonal losses (b)	$(2.40)-$3.50 per MWh
Total Con Edison—Commodity	$(13)
CECONY – Commodity
Electricity	$(7)	Discounted Cash Flow	Forward capacity prices (a)	$0.36-$8.75 per kW-month
Transmission Congestion Contracts	1	Discounted Cash Flow	Inter-zonal forward price curves adjusted for historical zonal losses (b)	$0.13-$2.10 per MWh
Total CECONY—Commodity	$(6)


(a)	Generally, increases/(decreases) in this input in isolation would result in a higher/(lower) fair value measurement.


(b)	Generally, increases/(decreases) in this input in isolation would result in a lower/(higher) fair value measurement.

The table listed below provides a reconciliation of the beginning and ending net balances for assets and liabilities measured at fair value as of ~~September 30, 2017~~March 31, 2020 and ~~2016~~2019 and classified as Level 3 in the fair value hierarchy:



	For the Three Months Ended March 31,
	Con Edison		CECONY
(Millions of Dollars)	2020	2019	2020	2019
Beginning balance as of January 1,	$(16)	$(13)	$(6)	$(2)
Included in earnings	(5)	(4)	(2)	—
Included in regulatory assets and liabilities	1	(5)	—	(3)
Settlements	7	3	2	—
Ending balance as of March 31,	$(13)	$(19)	$(6)	$(5)

For the Three Months Ended September 30,
�� Con Edison CECONY
(Millions of Dollars) 2017
2016 2017
2016
Beginning balance as of July 1, $(10) $5 $(6) $2
Included in earnings 7 (4) 1 —
Included in regulatory assets and liabilities (13) (5) (8) (3)
Sales —
4 —
—
Settlements (4) 1 (1) 1
Ending balance as of September 30, $(20) $1 $(14)
$—

For the Nine Months Ended September 30,
Con Edison CECONY
(Millions of Dollars) 2017
2016 2017
2016
Beginning balance as of January 1, $1 $6 $1 $8
Included in earnings 8 (1) 1 (1)
Included in regulatory assets and liabilities (21) (11) (14) (6)
Purchases 1 2 1 1
Sales —
4 —
—
Settlements (9) 1 (3) (2)
Ending balance as of September 30, $(20) $1 $(14)
$—

For the Utilities, realized gains and losses on Level 3 commodity derivative assets and liabilities are reported as part of purchased power, gas and fuel costs. The Utilities generally recover these costs in accordance with rate provisions approved by the applicable state public utilities regulators. Unrealized gains and losses for commodity derivatives are generally deferred on the consolidated balance sheet in accordance with the accounting rules for regulated operations.

For the Clean Energy Businesses, realized and unrealized gains and losses on Level 3 commodity derivative assets and liabilities are reported in non-utility revenues ~~(immaterial for both periods)~~($1 million gain and $1 million loss) and purchased power costs ~~($4 million gain and $5 million loss)~~(immaterial for both periods) on the consolidated income statement for the three months ended ~~September 30, 2017~~March 31, 2020 and 2016, respectively. Realized and unrealized gains and losses on Level 3 commodity derivative assets and liabilities are reported in non-utility revenues (immaterial for both periods) and purchased power costs ($3 million gain and $6 million loss) on the consolidated income statement for the nine months ended September 30, 2017 and 2016,2019, respectively. The change in fair value relating to Level 3 commodity derivative assets and liabilities held at ~~September 30, 2017~~March 31, 2020 and ~~2016~~2019 is included in non-utility revenues ~~(immaterial for both periods)~~($1 million gain and $1 million loss) and purchased power costs ~~($4 million gain and $4 million loss)~~(immaterial for both periods) on the consolidated income statement for the three months ended

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~~September 30, 2017~~ March 31, 2020 and 2016, respectively. For the nine months ended September 30, 2017 and 2016, the change in fair value relating to Level 3 commodity derivative assets and liabilities is included in non-utility revenues (immaterial for both periods) and purchased power costs ($2 million gain and $2 million loss) on the consolidated income statement,2019, respectively.

Note ~~M —~~O – Variable Interest Entities

~~Con Edison enters~~The accounting rules for consolidation address the consolidation of a variable interest entity (VIE) by a business enterprise that is the primary beneficiary. A VIE is an entity that does not have a sufficient equity investment at risk to permit it to finance its activities without additional subordinated financial support, or whose equity investors lack the characteristics of a controlling financial interest. The primary beneficiary is the business enterprise that has the power to direct the activities of the VIE that most significantly impact the VIE’s economic performance and either absorbs a significant amount of the VIE’s losses or has the right to receive benefits that could be significant to the VIE.

The Companies enter into arrangements including leases, partnerships and electricity purchase agreements, with various entities. As a result of these arrangements, ~~Con Edison retains~~the Companies retain or may retain a variable interest in these entities.

CECONY

CECONY has an ongoing long-term electricity purchase agreement with Brooklyn Navy Yard Cogeneration Partners, LP, a potential ~~variable interest entity (VIE).~~VIE. In ~~April 2017, CECONY's long-term electricity purchase agreement with Cogen Technologies Linden Venture, LP, another potential VIE, expired. In 2016, requests were~~2019, a request was made of ~~these counterparties~~this counterparty for information necessary to determine whether the entity was a VIE and whether CECONY is the primary beneficiary; however, the information

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was not made available. The payments for ~~these contracts~~this contract constitute CECONY’s maximum exposure to loss with respect to the potential ~~VIEs.~~VIE.

~~The following table summarizes~~Clean Energy Businesses

In September 2019, the ~~VIEs~~Clean Energy Businesses, which previously owned an 80 percent membership interest in OCI Solar San Antonio 4 LLC (Texas Solar 4), acquired the remaining 20 percent interest. As a result of the acquisition, Texas Solar 4 is a consolidated entity. Prior to the acquisition, Con Edison had a variable interest in Texas Solar 4, as to which Con Edison ~~Development has entered into as of September 30, 2017:~~

Project Name (a)
Generating
Capacity (b)
(MW AC)
Power Purchase Agreement Term (in Years)
Year of
Initial
Investment
Location
Maximum
Exposure to Loss
(Millions of Dollars) (c)
Copper Mountain Solar 3 128 20 2014 Nevada $175
Mesquite Solar 1 83 20 2013 Arizona 102
Copper Mountain Solar 2 75 25 2013 Nevada 83
California Solar 55 25 2012 California 64
Broken Bow II 38 25 2014 Nebraska 44
Texas Solar 4 32 25 2014 Texas 47

(a) With the exception of Texas Solar 4, Con Edison’s ownership interest is 50 percent and these projects are accounted for using the equity method of accounting. With the exception of Texas Solar 4, Con Edison is notwas the primary beneficiary since the power to direct the activities that most significantly impact the economics of ~~the entities are shared equally between Con Edison Development and third parties. Con Edison’s ownership interest in~~ Texas Solar 4 was held by the Clean Energy Businesses. Texas Solar 4 owns a project company that developed a 40 MW (AC) solar electric production project. Electricity generated by the project is ~~80 percent and is consolidated~~sold pursuant to a long-term power purchase agreement. Con Edison's earnings from Texas Solar 4 for the three months ended March 31, 2019 were immaterial.

In December 2018, the Clean Energy Businesses completed its acquisition of Sempra Solar Holdings, LLC. Included in the ~~financial statements.~~acquisition were certain operating projects (Tax Equity Projects) with a noncontrolling tax equity investor to which a percentage of earnings, tax attributes and cash flows are allocated. The Tax Equity Projects are consolidated entities in which Con Edison has less than a 100 percent membership interest. Con Edison is the primary beneficiary since the power to direct the activities that most significantly impact the economics of ~~Texas Solar 4~~the Tax Equity Projects is held by the Clean Energy Businesses. Electricity generated by the Tax Equity Projects is sold to utilities and municipalities pursuant to long-term power purchase agreements. For the three months ended March 31, 2020, the hypothetical liquidation at book value (HLBV) method of accounting for the Tax Equity Projects resulted in $17 million of income ($13 million, after tax) for the tax equity investor and a $14 million loss ($10 million, after tax) for Con Edison. For the three months ended March 31, 2019, the HLBV method of accounting for the Tax Equity Projects resulted in $21 million of income ($16 million, after tax) for the tax equity investor and a $19 million loss ($14 million, after tax) for Con Edison.

Con Edison ~~Development.~~

~~(b) Represents Con Edison Development’s ownership interest~~has determined that the use of HLBV accounting is reasonable and appropriate to attribute income and loss to the tax equity investors. Using the HLBV method, the company's earnings from the projects are adjusted to reflect the income or loss allocable to the tax equity investors calculated based on how the project would allocate and distribute its cash if it were to sell all of its assets for their carrying amounts and liquidate at a particular point in time. Under the HLBV method, the company calculates the liquidation value allocable to the tax equity investors at the beginning and end of each period based on the contractual liquidation waterfall and adjusts its income for the period to reflect the change in the ~~project.~~

~~(c) For investments accounted for under the equity method, maximum exposure is equal~~liquidation value allocable to the ~~carrying value of the investment on the consolidated balance sheet. For consolidated investments, such as Texas Solar 4, maximum exposure is equal to the net assets of the project on the~~tax equity investors.

At March 31, 2020 and December 31, 2019, Con Edison’s consolidated balance sheet ~~less any applicable noncontrolling interest ($7 million for Texas Solar 4). Con Edison did not provide any financial or other support during~~included the ~~three and nine months ended September 30, 2017 that was not previously contractually required.~~following amounts associated with its VIEs:



	Tax Equity Projects
	Great Valley Solar (c)(d)		Copper Mountain - Mesquite Solar (c)(e)
(Millions of Dollars)	2020	2019	2020	2019
Non-utility property, less accumulated depreciation (f)(g)	$291	$293	$456	$461
Other assets	41	40	181	128
Total assets (a)	$332	$333	$637	$589
Other liabilities	16	17	67	18
Total liabilities (b)	$16	$17	$67	$18


(a)	The assets of the Tax Equity Projects represent assets of a consolidated VIE that can be used only to settle obligations of the consolidated VIE.


(b)	The liabilities of the Tax Equity Projects represent liabilities of a consolidated VIE for which creditors do not have recourse to the general credit of the primary beneficiary.


(c)	Con Edison did not provide any financial or other support during the year that was not previously contractually required.


(d)	Great Valley Solar consists of the Great Valley Solar 1, Great Valley Solar 2, Great Valley Solar 3 and Great Valley Solar 4 projects, for which the noncontrolling interest of the tax equity investor was $66 million and $62 million at March 31, 2020 and December 31, 2019, respectively.


(e)	Copper Mountain - Mesquite Solar consists of the Copper Mountain Solar 4, Mesquite Solar 2 and Mesquite Solar 3 projects for which the noncontrolling interest of the tax equity investor was $137 million and $126 million at March 31, 2020 and December 31, 2019, respectively.


(f)	Non-utility property is reduced by accumulated depreciation of $11 million for Great Valley Solar and $19 million for Copper Mountain - Mesquite Solar at March 31, 2020.


(g)	Non-utility property is reduced by accumulated depreciation of $9 million for Great Valley Solar and $15 million for Copper Mountain - Mesquite Solar at December 31, 2019.

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Note ~~N —~~P – New Financial Accounting Standards

In May 2014, the Financial Accounting Standards Board (FASB) and the International Accounting Standards Board jointly issued a revenue recognition standard that will supersede the revenue recognition requirements within Accounting Standards Codification Topic 605, “Revenue Recognition,” and most industry-specific guidance under the Codification through Accounting Standards Update (ASU) No. 2014-09, “Revenue from Contracts with Customers (Topic 606).” The purpose of the new guidance is to create a consistent framework for revenue recognition. The guidance clarifies how to measure and recognize revenue arising from customer contracts to depict the transfer of goods or services in an amount that reflects the consideration the entity expects to receive. Amendments were issued subsequently to clarify key areas including principal/agent considerations, performance obligations, licensing, sales taxes, noncash consideration, and contracts. The new standard is effective for reporting periods beginning after December 15, 2017. Early adoption is permitted for reporting periods beginning after December 15, 2016, however, the Companies plan to adopt the new standard for reporting periods beginning after December 15, 2017.

Under the new standard, companies may use either of the following transition methods: (i) a full retrospective approach reflecting the application of the standard in each prior reporting period with the option to elect certain practical expedients, or (ii) a modified retrospective approach with the cumulative effect of initially adopting ASU

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~~2014-09 recognized at the date of adoption (which includes additional footnote disclosures). The Companies anticipate using the modified retrospective approach.~~

~~The Companies have completed their analyses of the impact of the new standard on the majority of their various revenue streams.~~

The majority of the Companies’ sales are derived from tariffs to provide electric, gas, and steam service to customers. For such tariffs, the Companies expect that the revenue from contracts with customers under ASU 2014-09 will be equivalent to revenue from electricity, gas, or steam supplied in that period which is consistent with current practice. Consequently, the Companies do not anticipate that the new standard will materially impact the amount and/or timing of such revenues.

Con Edison has also completed its evaluation for the majority of the revenue at the Clean Energy Businesses, including revenue from the sale of energy-related products and services to retail customers, revenue from operating renewable and energy infrastructure projects, and revenue from the sale of renewable energy credits. For such revenues, Con Edison expects that the revenue from contracts with customers under ASU 2014-09 will not be materially different from revenue recorded consistent with current practice. Consequently, Con Edison does not anticipate that the new standard will materially impact the amount and/or timing of such revenues.

The Companies continue to review the potential impacts of the remaining revenue at the Utilities and the Clean Energy Businesses on the Companies' financial position, results of operations and liquidity as well as the additional disclosures and related controls required under the new standard, and anticipate completing such reviews during the fourth quarter of 2017.

In February 2016, the FASB issued amendments on financial reporting of leasing transactions through ASU No. 2016-02, “Leases (Topic 842)." The amendments require lessees to recognize assets and liabilities on the balance sheet and disclose key information about leasing arrangements. Lessees will need to recognize a right-of-use asset and a lease liability for virtually all of their leases (other than leases that meet the definition of a short-term lease). Lessor accounting is similar to the current model, but updated to align with certain changes to the lessee model. For income statement purposes, the pattern of expense recognition will be dependent on whether transactions are designated as operating leases or finance leases. The amendments are effective for reporting periods beginning after December 15, 2018. Early adoption is permitted. The amendments must be adopted using a modified retrospective transition and provide for certain practical expedients. Based on the existing portfolio of leases at implementation, for leases currently classified as operating leases, the Companies expect to recognize on the statements of financial position right-of-use assets and lease liabilities. The Companies are in the process of evaluating the potential impact of the new guidance on the Companies’ results of operations and liquidity.

~~In January 2017,~~2019, the FASB issued amendments to the guidance for ~~Business Combinations~~income taxes through ASU ~~2017-01, “Business Combinations~~2019-12, “Income Taxes (Topic ~~805)~~740): ~~Clarifying~~Simplifying the ~~Definition of a Business.~~Accounting for Income Taxes.” The amendments in this update ~~clarify~~simplify the ~~definition of~~accounting for income taxes by removing certain exceptions such as: 1) the incremental approach for intraperiod tax allocation when there is a ~~business~~loss from continuing operations and ~~provide guidance on evaluating whether transactions should be accounted~~income or a gain from other items, 2) the requirement to recognize a deferred tax liability for ~~as acquisitions (or disposals) of assets or businesses.~~equity method investments when a foreign subsidiary becomes an equity method investment, 3) the ability not to recognize a deferred tax liability for a foreign subsidiary when a foreign equity method investment becomes a subsidiary, and 4) the general methodology for calculating income taxes in an interim period when a year-to-date loss exceeds the anticipated loss for the year. For public entities, the amendments are effective for reporting periods beginning after December 15, ~~2017. Early adoption is permitted. The application of this guidance is not expected to have a material impact on the Companies’ financial position, results of operations and liquidity.~~

In January 2017, the FASB issued amendments to the guidance for the subsequent measurement of goodwill through ASU 2017-04, “Intangibles-Goodwill and Other (Topic 350): Simplifying the Test for Goodwill Impairment.” The amendments in this update simplify goodwill impairment testing by eliminating Step 2 of the goodwill impairment test wherein an entity has to compute the implied fair value of goodwill by performing procedures to determine the fair value of its assets and liabilities. Under the new guidance, an entity should recognize an impairment charge for the amount by which the carrying amount exceeds the reporting unit’s fair value up to the total amount of goodwill allocated to that reporting unit. For public entities, the amendments are effective for reporting periods beginning after December 15, 2019. Early adoption is permitted. The application of this guidance is not expected to have a material impact on the Companies’ financial position, results of operations and liquidity.

In February 2017, the FASB issued amendments to the guidance for other income through ASU 2017-05, “Other Income-Gains and Losses from the Derecognition of Nonfinancial Assets (Subtopic 610-20): Clarifying the Scope of Asset Derecognition Guidance and Accounting for Partial Sales of Nonfinancial Assets.” The amendments in this update clarify the scope of assets within Subtopic 610-20 and add guidance for partial sales of nonfinancial assets. The amendments are effective upon the adoption of ASU 2014-09, and therefore will be effective for reporting

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periods beginning after December 15, 2017. The Company is in the process of evaluating the potential impact of the new guidance on the Company’s financial position, results of operations and liquidity.

In March 2017, the FASB issued amendments to the guidance for retirement benefits through ASU 2017-07, “Compensation-Retirement Benefits (Topic 715): Improving the Presentation of Net Periodic Pension Cost and Net Periodic Postretirement Benefit Cost.” The amendments in this update modify the presentation of net benefit cost, where the service component must be disaggregated from the other components of net benefit cost and be presented in the same line item as current employee compensation costs. The remaining components of the net benefit cost should be presented outside of income from operations. Additionally, the update allows only the service cost component to be eligible for capitalization. For public entities, the amendments are effective for reporting periods beginning after December 15, 2017.2020. Early adoption is permitted. The Companies are in the process of evaluating the potential impact of the new guidance on the Companies’ financial position, results of operations and liquidity.

In March ~~2017,~~2020, the FASB issued ~~amendments~~ASU 2020-04, Reference Rate Reform (Topic 848): Facilitation of the Effects of Reference Rate Reform on Financial Reporting ("ASU 2020-04"). The United Kingdom’s Financial Conduct Authority has announced that it intends to stop persuading or compelling banks to submit the London Interbank Offered Rate (“LIBOR”), a benchmark interest rate referenced in a variety of agreements, after 2021. ASU 2020-04 provides entities with optional expedients and exceptions for applying generally accepted accounting principles to contract modifications and hedging relationships, subject to meeting certain criteria, that reference LIBOR or another reference rate expected to be discontinued. The guidance ~~for debt securities through ASU 2017-08, “Receivables-Nonrefundable Fees~~is applied prospectively from any date beginning March 12, 2020. The optional relief is temporary and ~~Other Costs (Subtopic 310-20): Premium Amortization on Purchased Callable Debt Securities.”~~generally cannot be applied to contract modifications and hedging relationships entered into or evaluated after, December 31, 2022. The ~~amendments in this update shorten the amortization period for certain callable debt securities held at a premium. The amendments~~Companies do not ~~require an accounting change for securities held at a discount;~~expect the discount continues to be amortized to maturity. For public entities, the amendments are effective for reporting periods beginning after December 15, 2018. Early adoption is permitted. The application of thisnew guidance ~~is not expected~~ to have a material impact on ~~the Companies’~~their financial position, results of operations ~~and~~or liquidity.

In May 2017, the FASB issued amendments to the guidance for stock compensation through ASU 2017-09, “Compensation-Stock Compensation (Topic 718): Scope of Modification Accounting.” The amendments in this update specify that changes to value, vesting conditions, or classification of an existing share-based payment award require application of modification accounting in Topic 718. For public entities, the amendments are effective for reporting periods beginning after December 15, 2017. Early adoption is permitted. The application of this guidance is not expected to have a material impact on the Companies’ financial position, results of operations and liquidity.

In August 2017, the FASB issued amendments to the guidance for derivatives and hedging through ASU 2017-12, “Derivatives and Hedging (Topic 815): Targeted Improvements to Accounting for Hedging Activities.” The amendments in this update provide greater clarification on hedge accounting for risk components, presentation and disclosure of hedging instruments, and overall targeted improvements to simplify hedge accounting. For public entities, the amendments are effective for reporting periods beginning after December 15, 2018 and interim periods within those fiscal years. Early adoption is permitted. The Companies are in the process of evaluating the potential impact of the new guidance on the Companies’ financial position, results of operations and liquidity.

~~Note O — Dispositions~~

~~Upton 2~~

In May 2017, Con Edison Development sold Upton 2, a development stage solar electric production project, for $11 million to Vistra Asset Co. and recorded a $1 million gain on sale ($0.7 million, net of taxes). In addition, Con Edison Development agreed to perform the engineering, procurement and construction for the 180 MW (AC) project, which is expected to be substantially completed in 2018.

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Item 2: Management’s Discussion and Analysis of Financial Condition and Results of Operations

This combined management’s discussion and analysis of financial condition and results of operations (MD&A) relates to the consolidated financial statements (the ~~Third~~First Quarter Financial Statements) included in this report of two separate registrants: Consolidated Edison, Inc. (Con Edison) and Consolidated Edison Company of New York, Inc. (CECONY). As used in this report, the term the “Companies” refers to Con Edison and CECONY. CECONY is a subsidiary of Con Edison and, as such, information in this management’s discussion and analysis about CECONY applies to Con Edison.

This MD&A should be read in conjunction with the ~~Third~~First Quarter Financial Statements and the notes thereto and the MD&A in Item 7 of the Companies’ combined Annual Report on Form 10-K for the year ended December 31, ~~2016~~2019 (File Nos. 1-14514 and 1-1217, the Form 10-K) ~~and the MD&A in Part 1, Item 2 of the Companies' combined Quarterly Reports on Form 10-Q for the quarterly periods ended March 31, 2017 and June 30, 2017 (File Nos. 1-14514 and 1-1217)~~.

Information in any item of this report referred to in this discussion and analysis is incorporated by reference herein. The use of terms such as “see” or “refer to” shall be deemed to incorporate by reference into this discussion and analysis the information to which reference is made.

Con Edison, incorporated in New York State in 1997, is a holding company that owns all of the outstanding common stock of CECONY, Orange and Rockland Utilities, Inc. (O&R), Con Edison Clean Energy Businesses, Inc. and Con Edison Transmission, Inc. As used in this report, the term the “Utilities” refers to CECONY and O&R.

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		Con Edison


CECONY	O&R		Clean Energy Businesses	Con Edison Transmission
	• RECO			• CET Electric
				• CET Gas

Con Edison’s principal business operations are those of CECONY, O&R, the Clean Energy Businesses and Con Edison Transmission. CECONY’s principal business operations are its regulated electric, gas and steam delivery businesses. O&R’s principal business operations are its regulated electric and gas delivery businesses. The Clean Energy Businesses develop, own and operate renewable and energy infrastructure projects and provide energy-related products and services to wholesale and retail customers. Con Edison Transmission invests in electric transmission facilities and gas pipeline and storage facilities.

Con Edison seeks to provide shareholder value through continued dividend growth, supported by earnings growth in regulated utilities and contracted electric and gas assets. The company invests to provide reliable, resilient, safe and clean energy critical for New York City’s growing economy. The company is an industry leading owner and operator of contracted, large-scale solar generation in the United States. Con Edison is a responsible neighbor, helping the communities it serves become more sustainable.

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CECONY

Electric

CECONY provides electric service to approximately ~~3.4~~3.5 million customers in all of New York City (except a part of Queens) and most of Westchester County, an approximately 660 square mile service area with a population of more than nine million.

During the summer of 2017, electric peak demand in CECONY's service area was 12,321 MW (which occurred on July 20, 2017). At design conditions, electric peak demand in the company's service area would have been approximately 13,270 MW in 2017 compared to the company's forecast of 13,470 MW. The company's five-year forecast of average annual growth of the electric peak demand in its service area at design conditions is approximately 0.1 percent for 2018 to 2022 (as compared to approximately 0.2 percent for 2017 to 2021).

Gas

CECONY delivers gas to approximately 1.1 million customers in Manhattan, the Bronx, parts of Queens and most of Westchester County.

In May 2017, the company decreased its five-year forecast of average annual growth of the peak gas demand in its service area at design conditions from approximately 2.3 percent (for 2017 to 2021) to 1.6 percent (for 2018 to 2022). The decrease reflects, among other things, that in rolling the forecast forward a year, another year of oil-to-gas conversions has been completed and fewer opportunities to convert remain.

Steam

CECONY operates the largest steam distribution system in the United States by producing and delivering approximately ~~19,500~~18,194 MMlb of steam annually to approximately ~~1,640~~1,584 customers in parts of Manhattan.

O&R

Electric

O&R and its utility subsidiary, Rockland Electric Company (RECO) (together referred to herein as O&R) provide electric service to approximately 0.3 million customers in southeastern New York and northern New Jersey, an approximately 1,300 square mile service area.

During the summer of 2017, electric peak demand in O&R's service area was 1,410 MW (which occurred on June 13, 2017). At design conditions, electric peak demand in the company's service area would have been approximately 1,615 MW in 2017 compared to the company's forecast of 1,625 MW. The company’s five-year forecast of average annual growth of the electric peak demand in its service area at design conditions is flat for 2018 to 2022 (as compared to approximately (0.1) percent for 2017 to 2021).

Gas

O&R delivers gas to over 0.1 million customers in southeastern New York.

Clean Energy Businesses

Con Edison Clean Energy Businesses, Inc. has three wholly-owned subsidiaries: Consolidated Edison Development, Inc. (Con Edison Development), Consolidated Edison Energy, Inc. (Con Edison Energy) and Consolidated Edison Solutions, Inc. (Con Edison Solutions). Con Edison Clean Energy Businesses, Inc., together with ~~these~~its subsidiaries, ~~(which were formerly referred to as the competitive energy businesses),~~ are referred to in this report as the Clean Energy Businesses.

~~In September 2016, Con Edison sold the retail electric supply business of its~~ The Clean Energy Businesses develop, own and operate renewable and energy infrastructure projects and provide energy-related products and services to ~~a subsidiary of Exelon Corporation for cash consideration of $235 million.~~wholesale and retail customers. In ~~addition, Con Edison received $23 million in cash as a working capital adjustment in February 2017.~~December 2018, the Clean Energy Businesses acquired Sempra Solar Holdings, LLC.

In May 2017, Con Edison Development sold a development-stage solar electric production project for $11 million and agreed to perform engineering, procurement and construction for the project. See Note O to the Third Quarter Financial Statements.

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Con Edison Transmission

Con Edison Transmission, Inc. invests in electric and gas transmission projects through its wholly-owned subsidiaries, Consolidated Edison Transmission, LLC (CET Electric) and Con Edison Gas Pipeline and Storage, LLC (CET Gas). CET Electric owns a 45.7 percent interest in New York Transco LLC (NY Transco), which owns and ~~is proposing~~has been selected to build additional electric transmission assets in New York. CET Gas owns, through subsidiaries, a 50 percent interest in Stagecoach Gas Services, LLC, a joint venture that owns ~~operates~~ and ~~will further develop~~operates an existing gas pipeline and storage business located in northern Pennsylvania and southern New York. Also, CET Gas and CECONY own 71.2 percent and 28.8 percent interests, respectively, in Honeoye Storage Corporation, which owns and operates a gas storage ~~business~~facility in upstate New York. In addition, CET Gas owns a ~~12.5~~12.25 percent interest (that is expected to be reduced to approximately 10 percent based on the current project cost estimate) in Mountain Valley Pipeline LLC, a joint venture developing a proposed ~~300 mile~~300-mile gas transmission project in West Virginia and ~~Virginia (Mountain Valley Pipeline).~~Virginia. Con Edison Transmission, Inc., together with CET Electric and CET Gas, are referred to in this report as Con Edison Transmission.

In October 2017, FERC issued a Certificate of Public Convenience and Necessity for the Mountain Valley Pipeline. The project has an estimated total cost of $3,000 million to $3,500 million and an in-service date targeted for late 2018.

Certain financial data of Con Edison’s businesses are presented below:


	For the Three Months Ended September 30, 2017						For the Nine Months Ended September 30, 2017						At September 30, 2017			For the Three Months Ended March 31, 2020						At March 31, 2020
(Millions of Dollars, except percentages)	Operating Revenues			Net Income			Operating Revenues			Net Income			Assets			Operating Revenues			Net Income for Common Stock			Assets
CECONY	$2,799	87	%	$401	88	%	$7,948	88	%	$883	87	%	$41,647	85	%	$2,854	88	%	$406	108	%	$47,568	80	%
O&R	234	7		22	5		667	7		53	5		2,832	6		233	7		31	8		3,027	5
Total Utilities	3,033	94		423	93		8,615	95		936	92		44,479	91		3,087	95		437	116		50,595	85
Clean Energy Businesses (a)	177	6		26	5		460	5		54	5		2,811	6		146	5		(82)	(22	)	6,547	11
Con Edison Transmission	1	—		9	2		1	—		25	2		1,210	2		1	—		14	4		1,631	3
Other (b)	—	—		(1)	—		(4)	—		5	1		746	1		—	—		6	2		386	1
Total Con Edison	$3,211	100	%	$457	100	%	$9,072	100	%	$1,020	100	%	$49,246	100	%	$3,234	100	%	$375	100	%	$59,159	100	%

(a)

Net income for common stock from the Clean Energy Businesses includes for the nine months ended September 30, 2017 $1 million net after-tax gain related to the sale of a development stage solar electric production project (see Note O to the Third Quarter Financial Statements). Also includes for the three ~~and nine~~ months ended ~~September 30, 2017 $4 million and $1~~March 31, 2020 includes $(63) million of net after-tax mark-to-market ~~gains, respectively.~~losses and reflects $13 million (after-tax) of income attributable to the non-controlling interest of a tax equity investor in renewable electric production projects accounted for under the HLBV method of accounting. See Note O to the First Quarter Financial Statements.


(b)	Other includes parent company and consolidation adjustments.

Coronavirus Disease 2019 (COVID-19) Impacts

The Companies are responding to the Coronavirus Disease 2019 (COVID-19) global pandemic by taking steps to mitigate the potential risks posed to employees, customers and other stakeholders by its spread. The Companies have mobilized a pandemic planning team and an incident command system structure. The Companies have taken precautions with regard to employee and facility hygiene, such as performing a temperature check on employees arriving at critical locations, cleaning and disinfecting all work and common areas, separating crews into multiple vehicles, promoting social distancing, imposing travel limitations on employees and directing employees to work remotely whenever possible. Employees who test positive for COVID-19 remain home from work and are closely evaluated to determine if any other employees may have had close, prolonged contact that would require other employees to quarantine at home and, following the Centers for Disease Control and Prevention guidelines, sick or quarantined employees return to work when they can safely do so. In addition, critical operators of the bulk power system have been sequestered in order to limit their exposure to COVID-19. The Utilities have continued to provide critical electric, gas and steam service to customers during the pandemic, and additional protocols have been implemented for required work at customer premises to protect employees, customers and the public.

Below is additional information related to the effects of the COVID-19 pandemic and the Companies’ actions.

New York State Regulation

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Also in March 2020, the Utilities requested and the NYSPSC granted extensions until July 31, 2020 to file their 2019 Earnings Adjustment Mechanisms (EAMs) reports, which would delay the start of collection of earned EAM incentives of approximately $46 million and $3 million for CECONY and O&R, respectively, from the twelve-month period beginning June 2020 until the twelve-month period beginning September 2020. See "COVID-19 Regulatory Matters" in Note B and Note K to the First Quarter Financial Statements.

The Utilities’ rate plans have revenue decoupling mechanisms in their New York electric and gas businesses that reconcile actual energy delivery revenues to the authorized delivery revenues approved by the NYSPSC. See "COVID-19 Regulatory Matters" in Note B to the First Quarter Financial Statements and “Liquidity and Financing,” below.

New Jersey State Regulation

In March 2020, New Jersey Governor Murphy declared a Public Health Emergency and State of Emergency for the State of New Jersey. Since that declaration, the NJBPU and RECO have taken actions to mitigate the impact of the COVID-19 pandemic on RECO, its customers and other stakeholders. New Jersey has designated utilities, including RECO, as essential businesses that may continue their work. RECO has modified or suspended certain work in the state. RECO has also suspended late payment charges, terminations for non-payment, and no access fees during the COVID-19 pandemic. The suspension of these fees is not expected to be material. See "COVID-19 Regulatory Matters" in Note B and Note K to the First Quarter Financial Statements.

Federal Regulation

In March 2020, the North American Electric Reliability Corporation (NERC) issued guidance that the effects of the COVID-19 pandemic will be considered an acceptable basis for non-compliance with certain NERC Reliability Standards requirements that would have required action between March 1, 2020 and July 31, 2020. In addition, it suspended on-site NERC compliance audits until at least July 31, 2020.

Gas Safety

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In April 2020, the NYSPSC issued an order that extended the deadlines to complete certain gas inspections by all New York gas utilities, including CECONY and O&R, from April 1, 2020 to August 1, 2020. See "COVID-19 Regulatory Matters" in Note B to the First Quarter Financial Statements.

Impact of CARES Act on Accounting for Income Taxes

In response to the economic impacts of the COVID-19 pandemic, the Coronavirus Aid, Relief, and Economic Security (CARES) Act became law on March 27, 2020. The CARES Act has several key business tax relief measures that may present potential cash benefits and/or refund opportunities for Con Edison and its subsidiaries, including permitting a five-year carryback of a net operating loss (NOL) for tax years 2018, 2019 and 2020, temporary removal of the 80 percent limitation of NOL carryforwards against taxable income for tax years before 2021, temporary relaxation of the limitations on interest deductions, employee retention tax credits and defer payments of employer payroll taxes.

Con Edison will carryback its NOL of $29 million from 2018 back to 2013. This will allow Con Edison, mostly at the Clean Energy Businesses, to receive a $2.5 million cash refund and to recognize an income tax benefit of $4 million in March 2020, due to the higher federal tax rate in 2013. See Note J to the First Quarter Financial Statements. Con Edison and its subsidiaries are not expecting to have a federal NOL in tax years 2019 or 2020.

Con Edison and its subsidiaries expect to benefit by the increase in the percentage for calculating the limitation on the interest expense deduction from 30 percent of Adjusted Taxable Income (ATI) to 50 percent of ATI in 2019 and 2020, which may allow the Companies to deduct 100 percent of interest expense.

The Companies qualify for an employee retention tax credit created under the CARES Act for "eligible employers" related to a portion of its workforce that cannot perform their regular jobs due to the COVID-19 pandemic but that the Companies continue to pay.

The CARES Act also allows employers to defer payments of the employer share of Social Security payroll taxes that would have otherwise been owed from March 27, 2020 through December 31, 2020. The Companies intend to defer the payment of employer payroll taxes for the period April 1, 2020 through December 31, 2020 of approximately $73 million ($65 million of which is for CECONY). The Companies will repay one-half of this liability by December 31, 2021 and the other half by December 31, 2022.

Supply Chain Matters

The Utilities maintain regular communications with their supply base to minimize any potential impact to their supply chain from the COVID-19 pandemic. They have been pursuing alternatives with vendors, engaging additional vendors for newly identified supply needs, and are considering ordering additional critical supplies that may become scarce based on demand or if manufacturing facilities decrease operations.

The Clean Energy Businesses have appropriate assets available to them and currently do not anticipate constraints in completing and placing into service wind and solar projects currently under construction.

Cybersecurity

In April 2020, the United States Homeland Security Cybersecurity and Infrastructure Security Agency issued a joint alert with another agency stating that there has been a growing use of COVID-19 related themes by malicious cyber actors and the surge in teleworking has increased the use of potentially vulnerable services, amplifying the threat to individuals and organizations. The Companies, their contractors and vendors have experienced cyber threats, but none have had a material impact on the Companies. The Companies continue to closely monitor cybersecurity threats.

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Accounting Considerations

As a result of the COVID-19 pandemic, both commercial and residential customers may have increased difficulty paying their utility bills, as a result of, among other factors, a decline in business, bankruptcies, layoffs and furloughs. CECONY and O&R have existing allowances for uncollectible accounts established against their customer accounts receivable balances which are reevaluated on a quarterly basis and updated accordingly. Changes to the Utilities’ reserve balances which result in write-offs of customer accounts receivable balances are not reflected in rates during the term of the current rate plans and will be addressed during a future rate proceeding. During the first quarter of 2020, the potential economic impact of the COVID-19 pandemic was also considered in forward looking projections related to write-off and recovery rates, resulting in increases to the allowance for uncollectible accounts as detailed herein. CECONY’s and O&R’s allowances for uncollectible accounts reserve increased from $65 million and $4.6 million at December 31, 2019 to $70 million and $4.8 million at March 31, 2020, respectively. See Note A to the First Quarter Financial Statements.

Liquidity and Financing

The Companies continue to closely monitor the impacts of the COVID-19 pandemic on the financial markets including borrowing rates and daily cash collections. The Companies have been able to issue commercial paper as needed since the start of the COVID-19 pandemic in March 2020. See Note D to the First Quarter Financial Statements.

In addition, the decline in business activity in the Utilities’ service territory as a result of the COVID-19 pandemic could result in lower billed sales revenues. The Utilities’ rate plans have revenue decoupling mechanisms in their New York electric and gas businesses that reconcile actual energy delivery revenues to the authorized delivery revenues approved by the NYSPSC on a monthly basis and accumulate the deferred balances semi-annually under CECONY's electric rate plan (January through June and July through December, respectively) and annually under CECONY's gas rate plan and O&R New York's electric and gas rate plans (January through December). The difference is accrued with interest on a monthly basis for CECONY and O&R New York’s electric customers and after the annual deferral period ends for CECONY and O&R New York’s gas customers for refund to, or recovery from customers, as applicable. Generally, the refund to or recovery from customers begins August and February of each year over an ensuing six-month period for CECONY's electric customers and February of each year over an ensuing twelve-month period for CECONY's gas and O&R New York's electric and gas customers. Although these revenue decoupling mechanisms are in place, lower billed sales revenues and higher uncollectible accounts could impact liquidity at the Utilities. See Note A to the First Quarter Financial Statements and "COVID-19 Regulatory Matters" in Note B to the First Quarter Financial Statements.

In April 2020, in order to prepare for any potential limitations on access to external capital resulting from the COVID-19 pandemic, Con Edison entered into a $750 million credit agreement (the Supplemental Credit Agreement) under which banks are committed to provide loans, on a revolving credit basis until July 2, 2020, with an option, subject to certain conditions, for Con Edison to convert all loans outstanding on July 2, 2020 into a 270-day term loan. Con Edison has not entered into any loans under the Supplemental Credit Agreement. See Note D to the First Quarter Financial Statements.

Con Edison and the Utilities also have a $2,250 million credit agreement (Credit Agreement) in place under which banks are committed to provide loans on a revolving credit basis until December 2023 ($2,200 million of commitments from December 2022). Con Edison and the Utilities have not entered into any loans under the Credit Agreement. See Note D to the First Quarter Financial Statements.

Results of Operations

Net income for common stock and earnings per share for the three ~~and nine~~ months ended ~~September 30, 2017~~March 31, 2020 and ~~2016~~2019 were as follows:

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	For the Three Months Ended September 30,							For the Nine Months Ended September 30,							For the Three Months Ended March 31,
	2017	2016	2017		2016			2017	2016	2017		2016			2020	2019	2020	2019
(Millions of Dollars, except per share amounts)	Net Income		Earnings per Share					Net Income		Earnings per Share					Net Income for Common Stock		Earnings per Share
CECONY	$401	$388		$1.30		$1.27		$883	$859		$2.88		$2.87		$406	$412	$1.22	$1.28
O&R	22	27	0.07		0.09			53	55	0.18		0.18			31	32	0.09	0.10
Clean Energy Businesses (a)	26	78	0.08		0.26			54	120	0.18		0.40			(82)	(35)	(0.24)	(0.12)
Con Edison Transmission	9	10	0.03		0.03			25	11	0.08		0.04			14	13	0.04
Other (b)	(1)	(6)	—		(0.02		)	5	(6)	0.01		(0.02		)	6	2	0.02	0.01
Con Edison (c)	$457	$497		$1.48		$1.63		$1,020	$1,039		$3.33		$3.47		$375	$424	$1.13	$1.31

(a)

~~Includes $4 million or $0.01 a share and $(15) million or $(0.05) a share of net after-tax mark-to-market gains/(losses)~~Net income for common stock from the Clean Energy Businesses for the three months ended ~~September 30, 2017~~March 31, 2020 and ~~2016, respectively, and $1~~2019 includes $(63) million or ~~$0.01~~$(0.18) a share and $5$(8) million or ~~$0.02~~$(0.03) a share, respectively, of net after-tax mark-to-market ~~gains/(losses) for the nine months ended September 30, 2017~~losses and ~~2016, respectively. Also includes a $1~~reflects $13 million or ~~$0.00~~$0.04 a share ~~net after-tax gain on~~(after-tax) and $16 million or $0.05 a share (after-tax), respectively, of income attributable to the ~~sale~~non-controlling interest of a ~~solar~~tax equity investor in renewable electric production ~~project~~projects accounted for under the ~~nine months ended September 30, 2017 (see~~HLBV method of accounting. See Note O to the ~~Third~~First Quarter Financial Statements) and a $47 million or $0.15 a share of net gain related to the sale of the retail electric supply business, $5 million or $0.02 a share of net gain related to the acquisition of a solar electric production investment for the three and nine months ended September 30, 2016 and a $5 million or $0.02 a share of net loss related to the impairment of a solar electric production investment for the nine months ended September 30, 2016.Statements.

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(b)	Other includes parent company and consolidation adjustments.


(c)	Earnings per share on a diluted basis were ~~$1.48~~$1.12 a share and ~~$1.62~~$1.31 a share for the three months ended ~~September 30, 2017~~March 31, 2020 and ~~2016, respectively, and $3.31 a share and $3.46 a share for the nine months ended September 30, 2017 and 2016,~~2019, respectively.

The Companies’ results of operations for the three and nine months ended September 30, 2017, as compared with the 2016 periods, reflect changes in rate plans and regulatory charges and the impact of weather on steam revenues. The new electric rate plan of CECONY includes changes in the timing of recognition of annual revenues between quarters. Operations and maintenance expenses for CECONY for the three and nine months ended September 30, 2017 primarily reflect lower costs for pensions and other postretirement benefits. In addition, the Utilities' rate plans provide for revenues to cover expected changes in certain operating costs including depreciation, property taxes and other tax matters.

The following table presents the estimated effect of major factors on earnings per share and net income for common stock for the three ~~and nine~~ months ended ~~September 30, 2017 period~~March 31, 2020 as compared with ~~2016 period, resulting from these and other major factors:~~

the 2019 period.

Three Months Variation Nine Months Variation
(Millions of Dollars, except per share amounts) Earnings
per Share
Variation Net Income
Variation Earnings
per Share
Variation Net Income
Variation
CECONY (a)
Changes in rate plans and regulatory charges (b) $0.12 $35 $0.29 $87
Weather impact on steam revenues —
(1) 0.01 4
Other operations and maintenance expenses (c) 0.07 22 0.24 73
Depreciation, property taxes and other tax matters (d) (0.10) (30) (0.36) (108)
Other (e) (0.06) (13) (0.17) (32)
Total CECONY 0.03 13 0.01 24
O&R (a)

Changes in rate plans and regulatory charges —
1 0.04 12
Other operations and maintenance expenses (f) (0.01) (2) (0.03) (9)
Depreciation and property taxes (0.01) (4) (0.02) (6)
Other (e) —
—
0.01 1
Total O&R (0.02) (5) —
(2)
Clean Energy Businesses

Operating revenues less energy costs (g) 0.10 32 0.10 31
Other operations and maintenance expenses (h) (0.08) (23) (0.10) (30)
Depreciation (0.02) (5) (0.05) (15)
Net interest expense (0.01) (3) (0.02) (6)
Other (e) (i) (0.17) (53) (0.15) (46)
Total Clean Energy Businesses (0.18) (52) (0.22) (66)
Con Edison Transmission (e) (j) —
(1) 0.04 14
Other, including parent company expenses (e) (k) 0.02 5 0.03 11
Total variations $(0.15) $(40) $(0.14) $(19)

~~(a)~~

Under the revenue decoupling mechanisms in the Utilities’ New York electric and gas rate plans and the weather-normalization clause applicable to their gas businesses, revenues are generally not affected by changes in delivery volumes from levels assumed when rates were approved. In general, the Utilities recover on a current basis the fuel, gas purchased for resale and purchased power costs they incur in supplying energy to their full-service customers. Accordingly, such costs do not generally affect the Companies' results of operations.

~~(b)~~

For the three and nine months ended September 30, 2017 as compared to the 2016 periods, reflects lower electric net base revenues of $(0.03) a share, resulting from the timing of recognition of annual revenues between quarters under CECONY's new electric rate plan. Also, for the three and nine months ended September 30, 2017 as compared with the 2016 periods, reflects higher electric net base revenues ($0.07 a share and $0.08 a share, respectively), resulting from the increased base rates under CECONY's new electric rate plan, higher gas net base revenues ($0.01 a share and $0.16 a share, respectively), incentives earned under the electric Earnings Adjustment Mechanisms of $0.02 a share, a property tax refund incentive of $0.01 a share and an increase to the regulatory reserve related to certain gas proceedings in 2016 ($0.02 a share and $0.03 a share, respectively). For the nine months ended September 30, 2017 as compared with the 2016 period, reflects growth in the number of gas customers of $0.03 a share.


~~(c)~~	~~Reflects lower pension and other postretirement benefits costs of $0.07 a share and $0.22 a share for the three and nine months ended September 30, 2017 as compared with the 2016 periods.~~


~~(d)~~	Reflects higher depreciation and amortization expense of $(0.04) a share and $(0.13) a share, property taxes of $(0.04) a share and $(0.13) a share, and income taxes of $(0.02) a share and $(0.10) a share for the three and nine months ended September 30, 2017 as compared with the 2016 periods.


~~(e)~~	~~Includes the impact of the dilutive effect of Con Edison's stock issuances.~~

~~(f)~~

Reflects higher pension costs of $(0.01) a share and $(0.02) a share for the three and nine months ended September 30, 2017 as compared with the 2016 periods. Also, for the nine months ended September 30, 2017 as compared with the 2016 period, reflects higher regulatory assessments and fees that are collected in revenues from customers and a higher reserve for injuries and damages of $(0.01) a share.

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~~(g)~~

Reflects higher revenues from renewable electric production projects and lower revenues and energy costs resulting from the retail electric supply business which was sold in September 2016. Includes $0.01 a share and $(0.05) a share of net after-tax mark-to-market gains/(losses) for the three months ended September 30, 2017 and 2016, respectively, and $0.01 a share and $0.02 a share of net after-tax mark-to-market gains for the nine months ended September 30, 2017 and 2016, respectively. Substantially all the mark-to-market effects in the 2016 periods were related to the retail electric supply business sold in September 2016.


~~(h)~~	Reflects Upton 2 engineering, procurement and construction costs ($(0.05) a share and $(0.06) a share, respectively) as well as increased energy service costs ($(0.02) a share and $(0.04) a share, respectively) for the three and nine months ended September 30, 2017 as compared with the 2016 periods.

~~(i)~~

Includes $0.02 a share of net after-tax gain related to the acquisition of a solar electric production investment for the three and nine months ended September 30, 2016, net of $(0.02) a share of impairment loss related to the solar electric production investment for the nine months ended September 30, 2016. Includes $0.15 a share of net after-tax gain related to the sale of the retail electric supply business for the three and nine months ended September 30, 2016.


~~(j)~~	~~Reflects income from equity investments.~~


~~(k)~~	~~Reflects higher state income tax benefits.~~



Variation for the Three Months Ended March 31, 2020 vs. 2019
	Earnings per Share	Net Income for Common Stock (Millions of Dollars)
CECONY (a)
Changes in rate plans	$0.12	$38	Reflects higher electric and gas net base revenues of $0.03 a share and $0.09 a share, respectively, due primarily to electric and gas base rate increases in January 2020 under the company's rate plans.
Weather impact on steam revenues	(0.08)	(25)	Reflects the impact of warmer winter weather in 2020.
Operations and maintenance expenses	0.21	67	Reflects lower costs for pension and other postretirement benefits of $0.18 a share, which are reconciled under the rate plans, lower stock-based compensation of $0.02 a share, and lower consultant cost of $0.01 a share, offset, in part, by a higher reserve for uncollectibles and incremental costs associated with the Coronavirus Disease 2019 (COVID-19) of $(0.02) a share.
Depreciation, property taxes and other tax matters	(0.21)	(67)	Reflects higher property taxes of $(0.08) a share and higher depreciation and amortization expense of $(0.13) a share, both of which are recoverable under the rate plans.
Other	(0.10)	(20)	Reflects primarily higher costs associated with components of pension and other postretirement benefits other than service cost of $(0.11) a share, which are reconciled under the rate plans, suspension of customers' late payment charges and certain other fees associated with COVID-19 of $(0.01) a share and the dilutive effect of Con Edison's stock issuances of $(0.03).
Total CECONY	(0.06)	(7)
O&R (a)
Changes in rate plans	0.02	6	Reflects an electric base rate increase of $0.02 a share under the company's rate plans.
Operations and maintenance expenses	(0.01)	(3)	Reflects primarily lower recoveries for workers' compensation.
Depreciation, property taxes and other tax matters	(0.01)	(2)	Reflects higher depreciation and amortization expense.
Other	(0.01)	(2)	Reflects primarily the dilutive effect of Con Edison's stock issuances.
Total O&R	(0.01)	(1)
Clean Energy Businesses
Operating revenues less energy costs	—	(2)
Operations and maintenance expenses	0.02	4	Reflects primarily lower energy services costs.
Depreciation and amortization	—	1
Net interest expense	(0.16)	(57)	Reflects primarily unrealized losses on interest rate swaps.
HLBV effects	0.01	3
Other	0.01	4	Reflects re-measurement of deferred tax assets under the Coronavirus Aid, Relief, and Economic Security Act.
Total Clean Energy Businesses	(0.12)	(47)
Con Edison Transmission	—	1
Other, including parent company expenses	0.01	4	Reflects primarily New York State combined income tax benefits.
Total Reported (GAAP basis)	$(0.18)	$(50)

a. Under the revenue decoupling mechanisms in the Utilities’ New York electric and gas rate plans and the weather-normalization clause applicable to their gas businesses, revenues are generally not affected by changes in delivery volumes from levels assumed when rates were approved. In general, the utilities recover on a current basis the fuel, gas purchased for resale and purchased power costs they incur in supplying energy to their full-service customers. Accordingly, such costs do not generally affect Con Edison’s results of operations.

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The Companies’ other operations and maintenance expenses for the three ~~and nine~~ months ended ~~September 30, 2017~~March 31, 2020 and ~~2016~~2019 were as follows:


	For the Three Months Ended September 30,		For the Nine Months Ended September 30,		For the Three Months Ended March 31,
(Millions of Dollars)	2017	2016	2017	2016	2020	2019
CECONY
Operations	$386	$381	$1,147	$1,109	$404	$398
Pensions and other postretirement benefits	51	87	152	261	(44)	33
Health care and other benefits	45	47	127	124	37	38
Regulatory fees and assessments (a)	142	135	355	361	85	114
Other	67	74	211	250	87	76
Total CECONY	691	724	1,992	2,105	569	659
O&R	80	77	236	220	74	71
Clean Energy Businesses	79	40	174	124	55	61
Con Edison Transmission	3	1	7	1	2	3
Other (b)	(1)	(2)	(3)		—	—
Total other operations and maintenance expenses	$852	$840	$2,406	$2,447	$700	$794


(a)	Includes Demand Side Management, System Benefit Charges and Public Service Law 18A assessments which are collected in revenues.


(b)	Includes parent company and consolidation adjustments.

A discussion of the results of operations by principal business segment for the three ~~and nine~~ months ended ~~September 30, 2017~~March 31, 2020 and ~~2016~~2019 follows. For additional business segment financial information, see Note JL to the ~~Third~~First Quarter Financial Statements.

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~~Three Months Ended September 30, 2017 Compared with Three Months Ended September 30, 2016~~

The Companies’ results of operations ~~in 2017 compared with 2016 were:~~for the three months ended March 31, 2020 and 2019 were as follows:


	CECONY			O&R			Clean Energy Businesses			Con Edison Transmission			Other (a)			Con Edison (b)			CECONY		O&R		Clean Energy Businesses		Con Edison Transmission		Other (a)			Con Edison (b)
(Millions of Dollars)	Increases (Decreases) Amount	Increases (Decreases) Percent		Increases (Decreases) Amount	Increases (Decreases) Percent		Increases (Decreases) Amount	Increases (Decreases) Percent		Increases (Decreases) Amount	Increases (Decreases) Percent		Increases (Decreases) Amount	Increases (Decreases) Percent		Increases (Decreases) Amount	Increases (Decreases) Percent		2020	2019	2020	2019	2020	2019	2020	2019	2020		2019	2020	2019
Operating revenues	$(29)	(1.0	)%	$(6)	(2.5	)%	$(173)	(49.4	)%	$1	—	%	$1	Large		$(206)	(6.0	)%	$2,854	$3,039	$233	$258	$146	$217	$1	$1		$—	$(1)	$3,234	$3,514
Purchased power	(95)	(19.2	)	(9)	(13.0	)	(234)	Large		—	—		—	—		(338)	(42.4	)	273	322	35	46	—	—	—	—	—		—	308	368
Fuel	1	3.4		—	—		—	—		—	—		—	—		1	3.4		78	106	—	—	—	—	—	—	—		—	78	106
Gas purchased for resale	24	70.6		2	25.0		8	20.5		—	—		—	—		34	42.0		195	317	24	44	13	81	—	—	—		—	232	442
Other operations and maintenance	(33)	(4.6	)	3	3.9		39	97.5		2	Large		1	(50.0	)	12	1.4		569	659	74	71	55	61	2	3	—		—	700	794
Depreciation and amortization	22	7.9		1	5.9		8	72.7		—	—		1	Large		32	10.5		390	334	22	21	57	58	1	—	—		—	470	413
Taxes, other than income taxes	18	3.6		—	—		(2)	(40.0	)	—	—		—	—		16	3.0		607	575	23	22	7	6	—	—	1		2	638	605
Gain on sale of retail electric supply business (2016)	—	—		—	—		(104)	Large		—	—		—	—		(104)	Large
Operating income	34	4.4		(3)	(6.3	)	(96)	(76.8	)	(1)	Large		(1)	(50.0	)	(67)	(7.1	)	742	726	55	54	14	11	(2)	(2)	(1)		(3)	808	786
Other income less deductions	(2)	Large		(1)	Large		(9)	(33.3	)	1	5.0		1	Large		(10)	(20.4	)	(61)	(7)	(4)	(3)	1	1	26	25	(1)		(2)	(39)	14
Net interest expense	3	1.9		—	—		5	71.4		1	33.3		(2)	(40.0	)	7	3.9		180	183	11	10	122	46	5	5	4		3	322	247
Income before income tax expense	29	4.7		(4)	(10.0	)	(110)	(75.9	)	(1)	(6.3	)	2	50.0		(84)	(10.4	)	501	536	40	41	(107)	(34)	19	18	(6)		(8)	447	553
Income tax expense	16	7.1		1	7.7		(58)	(86.6	)	—	—		(3)	Large		(44)	(14.0	)	95	124	9	9	(42)	(20)	5	5	(12)		(10)	55	108
Net income	$13	3.4	%	$(5)	(18.5	)%	$(52)	(66.7	)%	$(1)	(10.0	)%	$5	83.3	%	$(40)	(8.0	)%	$406	$412	$31	$32	$(65)	$(14)	$14	$13	$6		$2	$392	$445
Income attributable to non-controlling interest																			—	—	—	—	17	21	—	—	—		—	17	21
Net income for common stock																			$406	$412	$31	$32	$(82)	$(35)	$14	$13	$6		$2	$375	$424


(a)	Includes parent company and consolidation adjustments.


(b)	Represents the consolidated results of operations of Con Edison and its businesses.

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CECONY


	For the Three Months Ended September 30, 2017				For the Three Months Ended September 30, 2016					For the Three Months Ended March 31, 2020				For the Three Months Ended March 31, 2019
(Millions of Dollars)	Electric	Gas	Steam	2017 Total	Electric	Gas	Steam	2016 Total	2017-2016 Variation	Electric	Gas	Steam	2020 Total	Electric	Gas	Steam	2019 Total	2020-2019 Variation
Operating revenues	$2,469	$268	$62	$2,799	$2,557	$208	$63	$2,828	$(29)	$1,770	$834	$250	$2,854	$1,797	$921	$321	$3,039	$(185)
Purchased power	393	—	7	400	486	—	9	495	(95)	264	—	9	273	310	—	12	322	(49)
Fuel	24	—	6	30	21	—	8	29	1	30	—	48	78	33	—	73	106	(28)
Gas purchased for resale	—	58	—	58	—	34	—	34	24	—	195	—	195	—	317	—	317	(122)
Other operations and maintenance	547	104	40	691	578	102	44	724	(33)	431	96	42	569	507	106	46	659	(90)
Depreciation and amortization	232	47	21	300	217	41	20	278	22	297	71	22	390	257	55	22	334	56
Taxes, other than income taxes	418	71	31	520	414	59	29	502	18	466	103	38	607	433	99	43	575	32
Operating income	$855	$(12)	$(43)	$800	$841	$(28)	$(47)	$766	$34	$282	$369	$91	$742	$257	$344	$125	$726	$16

Electric

CECONY’s results of electric operations for the three months ended ~~September 30, 2017~~March 31, 2020 compared with the ~~2016~~2019 period iswere as follows:


	For the Three Months Ended
��				For the Three Months Ended
(Millions of Dollars)	September 30, 2017	September 30, 2016	Variation	March 31, 2020	March 31, 2019	Variation
Operating revenues	$2,469	$2,557	$(88)	$1,770	$1,797	$(27)
Purchased power	393	486	(93)	264	310	(46)
Fuel	24	21	3	30	33	(3)
Other operations and maintenance	547	578	(31)	431	507	(76)
Depreciation and amortization	232	217	15	297	257	40
Taxes, other than income taxes	418	414	4	466	433	33
Electric operating income	$855	$841	$14	$282	$257	$25

CECONY’s electric sales and deliveries for the three months ended ~~September 30, 2017~~March 31, 2020 compared with the ~~2016~~2019 period were:


	Millions of kWh Delivered							Revenues in Millions (a)					Millions of kWh Delivered						Revenues in Millions (a)
	For the Three Months Ended							For the Three Months Ended					For the Three Months Ended						For the Three Months Ended
Description	September 30, 2017	September 30, 2016	Variation		Percent Variation			September 30, 2017	September 30, 2016	Variation	Percent Variation		March 31, 2020	March 31, 2019	Variation	Percent Variation			March 31, 2020	March 31, 2019	Variation	Percent Variation
Residential/Religious (b)	3,237	3,653	(416	)	(11.4	)%		$805	$883	$(78)	(8.8	)%	2,343	2,415	(72)	(3.0	)%		$609	$596	$13	2.2	%
Commercial/Industrial	2,570	2,749	(179	)	(6.5	)		534	551	(17)	(3.1	)	2,401	2,460	(59)	(2.4	)		433	421	12	2.9
Retail choice customers	7,510	8,136	(626	)	(7.7	)		867	918	(51)	(5.6	)	5,713	5,979	(266)	(4.4	)		555	507	48	9.5
NYPA, Municipal Agency and other sales	2,705	2,764	(59	)	(2.1	)		207	204	3	1.5		2,375	2,410	(35)	(1.5	)		144	135	9	6.7
Other operating revenues (c)	—	—	—		—			56	1	55	Large		—	—	—	—			29	138	(109)	(79.0	)
Total	16,022	17,302	(1,280	)	(7.4	)%	(d)	$2,469	$2,557	$(88)	(3.4	)%	12,832	13,264	(432)	(3.3	)%	(d)	$1,770	$1,797	$(27)	(1.5	)%


(a)	Revenues from electric sales are subject to a revenue decoupling mechanism, as a result of which delivery revenues generally are not affected by changes in delivery volumes from levels assumed when rates were approved.


(b)	“Residential/Religious” generally includes single-family dwellings, individual apartments in multi-family dwellings, religious organizations and certain other not-for-profit organizations.


(c)	Other electric operating revenues generally reflect changes in the revenue decoupling mechanism current asset or regulatory liability and changes in regulatory assets and liabilities in accordance with ~~the revenue decoupling mechanism and~~ other provisions of the company’s rate plans.


(d)	After adjusting for variations, primarily weather and billing days, electric delivery volumes in CECONY’s service area ~~decreased 1.4 percent~~remained the same in the three months ended ~~September 30, 2017~~March 31, 2020 compared with the ~~2016~~2019 period.

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Operating revenues decreased ~~$88~~$27 million in the three months ended ~~September 30, 2017~~March 31, 2020 compared with the ~~2016~~2019 period due primarily to lower purchased power expenses ($9346 million) and fuel expenses ($3 million), offset, in part, by ~~higher~~an increase in revenues from the new electric rate plan ($2718 million).

Purchased power expenses decreased ~~$93~~$46 million in the three months ended ~~September 30, 2017~~March 31, 2020 compared with the ~~2016~~2019 period due to lower purchased volumes ($6654 million) ~~and~~, offset, in part, by higher unit costs ($278 million).

Fuel expenses ~~increased~~decreased $3 million in the three months ended ~~September 30, 2017~~March 31, 2020 compared with the ~~2016~~2019 period due to ~~higher~~lower unit costs ($65 million), offset, in part, by ~~lower~~higher purchased volumes from the company's electric generating facilities ($32 million).

Other operations and maintenance expenses decreased ~~$31~~$76 million in the three months ended ~~September 30, 2017~~March 31, 2020 compared with the ~~2016~~2019 period due primarily to lower costs for pension and other postretirement benefits ($38 million) and environmental costs ($6 million), offset by higher surcharges for assessments and fees that are collected in revenues from customers ($6 million) and uncollectible expense ($5 million).benefits.

Depreciation and amortizationincreased ~~$15~~$40 million in the three months ended ~~September 30, 2017~~March 31, 2020 compared with the ~~2016~~2019 period due primarily to higher electric utility plant ~~balances.~~balances and higher depreciation rates.

Taxes, other than income taxes increased $4$33 million in the three months ended ~~September 30, 2017~~March 31, 2020 compared with the ~~2016~~2019 period due primarily to higher property taxes ($1126 million), ~~offset by lower~~higher state and local taxes ($54 million) and lower deferral of under-collected property taxes ($4 million), offset, in part, by lower payroll taxes ($1 million).

Gas

CECONY’s results of gas operations for the three months ended ~~September 30, 2017~~March 31, 2020 compared with the ~~2016~~2019 period iswere as follows:


	For the Three Months Ended			For the Three Months Ended
(Millions of Dollars)	September 30, 2017	September 30, 2016	Variation	March 31, 2020	March 31, 2019	Variation
Operating revenues	$268	$208	$60	$834	$921	$(87)
Gas purchased for resale	58	34	24	195	317	(122)
Other operations and maintenance	104	102	2	96	106	(10)
Depreciation and amortization	47	41	6	71	55	16
Taxes, other than income taxes	71	59	12	103	99	4
Gas operating income	$(12)	$(28)	$16	$369	$344	$25

CECONY’s gas sales and deliveries, excluding off-system sales, for the three months ended ~~September 30, 2017~~March 31, 2020 compared with the ~~2016~~2019 period were:


	Thousands of Dt Delivered							Revenues in Millions (a)					Thousands of Dt Delivered							Revenues in Millions (a)
	For the Three Months Ended							For the Three Months Ended					For the Three Months Ended							For the Three Months Ended
Description	September 30, 2017	September 30, 2016	Variation		Percent Variation			September 30, 2017	September 30, 2016	Variation	Percent Variation		March 31, 2020	March 31, 2019	Variation		Percent Variation			March 31, 2020	March 31, 2019	Variation	Percent Variation
Residential	4,731	4,335	396		9.1	%		$104	$88	$16	18.2	%	22,622	27,306	(4,684	)	(17.2	)%		$383	$438	$(55)	(12.6	)%
General	4,292	3,963	329		8.3			49	41	8	19.5		11,957	14,425	(2,468	)	(17.1	)		138	178	(40)	(22.5	)
Firm transportation	8,766	8,305	461		5.6			67	53	14	26.4		32,984	35,308	(2,324	)	(6.6	)		292	253	39	15.4
Total firm sales and transportation	17,789	16,603	1,186		7.1		(b)	220	182	38	20.9		67,563	77,039	(9,476	)	(12.3	)	(b)	813	869	(56)	(6.4	)
Interruptible sales (c)	2,108	1,664	444		26.7			8	4	4	Large		2,486	3,730	(1,244	)	(33.4	)		11	20	(9)	(45.0	)
NYPA	10,148	12,800	(2,652	)	(20.7	)		1		—	—		8,079	7,452	627		8.4			1		—	—
Generation plants	24,068	35,745	(11,677	)	(32.7	)		7		—	—		10,157	11,699	(1,542	)	(13.2	)		5		—	—
Other	4,487	4,975	(488	)	(9.8	)		6		—	—		6,946	6,313	633		10.0			12	10	2	20.0
Other operating revenues (d)	—	—	—		—			26	8	18	Large		—	—	—		—			(8)	16	(24)	Large
Total	58,600	71,787	(13,187	)	(18.4	)%		$268	$208	$60	28.8	%	95,231	106,233	(11,002	)	(10.4	)%		$834	$921	$(87)	(9.4	)%


(a)	Revenues from gas sales are subject to a weather normalization clause and a revenue decoupling mechanism, as a result of which delivery revenues are generally not affected by changes in delivery volumes from levels assumed when rates were approved.

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(b)	After adjusting for variations, primarily billing days, firm gas sales and transportation volumes in the company’s service area increased ~~6.0~~0.4 percent in the three months ended ~~September 30, 2017~~March 31, 2020 compared with the ~~2016~~2019 period, reflecting primarily increased volumes attributable to the growth in the number of gas customers.


(c)	Includes ~~1,535 thousands~~970 thousand and ~~915 thousands~~1,213 thousand of Dt for the ~~2017~~2020 and ~~2016~~2019 periods, respectively, which are also reflected in firm transportation and other.


(d)	Other gas operating revenues generally reflect changes in the revenue decoupling mechanism and weather normalization clause current asset or regulatory liability and changes in regulatory assets and liabilities in accordance with other provisions of the company’s rate plans.

Operating revenues ~~increased $60~~ decreased $87 million in the three months ended ~~September 30, 2017~~March 31, 2020 compared with the ~~2016~~2019 period due primarily to ~~higher revenues from the gas rate plan and growth in the number of customers ($29 million) and higher~~lower gas purchased for resale expense ($24122 million), offset, in part, by an increase in revenues from the new gas rate plan ($35 million).

Gas purchased for resale ~~increased $24~~ decreased $122 million in the three months ended ~~September 30, 2017~~March 31, 2020 compared with the ~~2016~~2019 period due to ~~higher~~lower unit costs ($2083 million) and purchased volumes ($439 million).

Other operations and maintenance expenses ~~increased $2~~decreased $10 million in the three months ended ~~September 30, 2017~~March 31, 2020 compared with the ~~2016~~2019 period due primarily to ~~higher surcharges~~lower costs for ~~assessments~~pension and ~~fees that were collected in revenues from customers.~~other postretirement benefits.

Depreciation and amortization increased $6$16 million in the three months ended ~~September 30, 2017~~March 31, 2020 compared with the ~~2016~~2019 period due primarily to higher gas utility plant ~~balances.~~balances and higher depreciation rates.

Taxes, other than income taxes increased ~~$12~~$4 million in the three months ended ~~September 30, 2017~~March 31, 2020 compared with the ~~2016~~2019 period due primarily to higher property taxes ($69 million), and state and local taxes ($41 million) ~~and payroll~~, offset, in part, by higher deferral of under-collected property taxes ($15 million).

Steam

CECONY’s results of steam operations for the three months ended ~~September 30, 2017~~March 31, 2020 compared with the ~~2016~~2019 period iswere as follows:


	For the Three Months Ended			For the Three Months Ended
(Millions of Dollars)	September 30, 2017	September 30, 2016	Variation	March 31, 2020	March 31, 2019	Variation
Operating revenues	$62	$63	$(1)	$250	$321	$(71)
Purchased power	7	9	(2)	9	12	(3)
Fuel	6	8	(2)	48	73	(25)
Other operations and maintenance	40	44	(4)	42	46	(4)
Depreciation and amortization	21	20	1	22		—
Taxes, other than income taxes	31	29	2	38	43	(5)
Steam operating income	$(43)	$(47)	$4	$91	$125	$(34)

CECONY’s steam sales and deliveries for the three months ended ~~September 30, 2017~~March 31, 2020 compared with the ~~2016~~2019 period were:


	Millions of Pounds Delivered							Revenues in Millions						Millions of Pounds Delivered							Revenues in Millions
	For the Three Months Ended							For the Three Months Ended						For the Three Months Ended							For the Three Months Ended
Description	September 30, 2017	September 30, 2016	Variation		Percent Variation			September 30, 2017	September 30, 2016	Variation		Percent Variation		March 31, 2020	March 31, 2019	Variation		Percent Variation			March 31, 2020	March 31, 2019	Variation	Percent Variation
General	13	10	3		30.0	%		$2			$—	—	%	262	327	(65	)	(19.9	)%		$12	$15	$(3)	(20.0	)%
Apartment house	748	776	(28	)	(3.6	)		15		—		—		2,176	2,576	(400	)	(15.5	)		65	82	(17)	(20.7	)
Annual power	2,439	2,950	(511	)	(17.3	)		42	49	(7)		(14.3	)	4,519	5,654	(1,135	)	(20.1	)		161	208	(47)	(22.6	)
Other operating revenues (a)	—	—	—		—			3	(3)	6		Large		—	—	—		—			12	16	(4)	(25.0	)
Total	3,200	3,736	(536	)	(14.3	)%	(b)	$62	$63	$(1)		(1.6	)%	6,957	8,557	(1,600	)	(18.7	)%	(b)	$250	$321	$(71)	(22.1	)%


(a)	Other steam operating revenues generally reflect changes in regulatory assets and liabilities in accordance with the company’s rate plan.


(b)	After adjusting for variations, primarily weather and billing days, steam sales and deliveries decreased ~~8.6~~0.1 percent in the three months ended ~~September 30, 2017~~March 31, 2020 compared with the ~~2016~~2019 period.

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Operating revenues decreased $1$71 million in the three months ended ~~September 30, 2017~~March 31, 2020 compared with the ~~2016~~2019 period due primarily to the impact of warmer winter weather ($33 million), lower fuel expenses ($25 million) and purchased power expenses ($~~2 million) and lower fuel expenses ($2 million), offset in part by a property tax refund incentive ($~~3 million).

Purchased power ~~expenses~~ decreased $2$3 million in the three months ended ~~September 30, 2017~~March 31, 2020 compared with the ~~2016~~2019 period due to lower unit costs ($14 million) ~~and~~, offset, in part, by higher purchased volumes ($1 million).

Fuelexpensesdecreased $2$25 million in the three months ended ~~September 30, 2017~~March 31, 2020 compared with the ~~2016~~2019 period due to lower purchased volumes ($13 million) and unit costs ($112 million) ~~and purchased volumes from the company's steam generating facilities ($1 million)~~.

Other operations and maintenance expenses decreased $4 million in the three months ended ~~September 30, 2017~~March 31, 2020 compared with the ~~2016~~2019 period due primarily to lower ~~municipal infrastructure support costs.~~costs for pension and other postretirement benefits.

~~Depreciation and amortization~~ ~~increased~~ ~~$1 million~~ ~~in the three months ended September 30, 2017 compared with the 2016 period due primarily to higher steam utility plant balances.~~

Taxes, other than income taxes ~~increased $2~~ decreased $5 million in the three months ended ~~September 30, 2017~~March 31, 2020 compared with the ~~2016~~2019 period due primarily to higher deferral of under-collected property ~~taxes.~~taxes ($6 million) and lower state and local taxes ($2 million), offset, in part, by higher property taxes ($3 million).

Other Income (Deductions)

Other income (deductions) decreased $2$54 million in the three months ended ~~September 30, 2017~~March 31, 2020 compared with the ~~2016~~2019 period due primarily to higher costs associated with components of pension and other postretirement benefits other than service cost ($47 million) due to a decrease in the discount rate and the absence of the company’s share of a gain on sale of property in 2019 ($5 million).

Net Interest Expense

Net interest expense decreased $3 million in the three months ended March 31, 2020 compared with the 2019 period due primarily to a decrease in ~~investment~~interest accrued on the TCJA related regulatory liability ($3 million) and ~~other income.~~

~~Net Interest Expense~~

~~Net~~lower interest expense ~~increased $3~~for short-term debt ($2 million), offset, in part, by higher interest on long-term debt ($3 million).

Income Tax Expense

Income taxes decreased $29 million in the three months ended ~~September 30, 2017~~March 31, 2020 compared with the ~~2016~~2019 period due primarily to ~~higher long-term debt balances in the 2017 period.~~

~~Income Tax Expense~~

~~Income taxes increased $16 million in the three months ended September 30, 2017 compared with the 2016 period due primarily to higher~~lower income before income tax expense ($117 million)~~, a decrease~~ and an increase in ~~tax benefits for plant-related flow through items~~the amortization of excess deferred federal income taxes due to CECONY's new rate plan beginning in January 2020 ($725 million), offset, in part, by higher state income taxes ($1 million) and lower research and development ~~tax~~ credits ($21 million).

O&R


	For the Three Months Ended September 30, 2017			For the Three Months Ended September 30, 2016				For the Three Months Ended March 31, 2020			For the Three Months Ended March 31, 2019
(Millions of Dollars)	Electric	Gas	2017 Total	Electric	Gas	2016 Total	2017-2016 Variation	Electric	Gas	2020 Total	Electric	Gas	2019 Total	2020-2019 Variation
Operating revenues	$206	$28	$234	$213	$27	$240	$(6)	$136	$97	$233	$145	$113	$258	$(25)
Purchased power	60	—	60	69	—	69	(9)	35	—	35	46	—	46	(11)
Gas purchased for resale	—	10	10	—	8	8	2	—	24	24	—	44	44	(20)
Other operations and maintenance	63	17	80	63	14	77	3	57	17	74	55	16	71	3
Depreciation and amortization	13	5	18	12	5	17	1	16	6	22	15	6	21	1
Taxes, other than income taxes	14	7	21	14	7	21	—	14	9	23	13	9	22	1
Operating income	$56	$(11)	$45	$55	$(7)	$48	$(3)	$14	$41	$55	$16	$38	$54	$1

Electric

O&R’s results of electric operations for the three months ended ~~September 30, 2017~~March 31, 2020 compared with the ~~2016~~2019 period iswere as follows:

Table of Contents


	For the Three Months Ended				For the Three Months Ended
(Millions of Dollars)	September 30, 2017	September 30, 2016	Variation		March 31, 2020	March 31, 2019	Variation
Operating revenues	$206	$213	$(7)		$136	$145	$(9)
Purchased power	60	69	(9)		35	46	(11)
Other operations and maintenance	63		—		57	55	2
Depreciation and amortization	13	12	1		16	15	1
Taxes, other than income taxes	14		—		14	13	1
Electric operating income	$56	$55		$1	$14	$16	$(2)

O&R’s electric sales and deliveries for the three months ended ~~September 30, 2017~~March 31, 2020 compared with the ~~2016~~2019 period were:


	Millions of kWh Delivered							Revenues in Millions (a)					Millions of kWh Delivered							Revenues in Millions (a)
	For the Three Months Ended							For the Three Months Ended					For the Three Months Ended							For the Three Months Ended
Description	September 30, 2017	September 30, 2016	Variation		Percent Variation			September 30, 2017	September 30, 2016	Variation	Percent Variation		March 31, 2020	March 31, 2019	Variation		Percent Variation			March 31, 2020	March 31, 2019	Variation		Percent Variation
Residential/Religious (b)	500	585	(85	)	(14.5	)%		$105	$109	$(4)	(3.7	)%	352	397	(45	)	(11.3	)%		$67	$73	$(6)		(8.2	)%
Commercial/Industrial	206	216	(10	)	(4.6	)		34	35	(1)	(2.9	)	208	196	12		6.1			27		—		—
Retail choice customers	818	925	(107	)	(11.6	)		64	70	(6)	(8.6	)	638	685	(47	)	(6.9	)		39	40	(1	)	(2.5	)
Public authorities	31	31	—		—			3	2	1	50.0		26	26	—		—			2		—		—
Other operating revenues (c)	—	—	—		—			—	(3)	3	Large		—	—	—		—			1	3	(2)		(66.7	)
Total	1,555	1,757	(202	)	(11.5	)%	(d)	$206	$213	$(7)	(3.3	)%	1,224	1,304	(80	)	(6.1	)%	(d)	$136	$145	$(9)		(6.2	)%


(a)	O&R’s New York electric delivery revenues are subject to a revenue decoupling mechanism, as a result of which delivery revenues are generally not affected by changes in delivery volumes from levels assumed when rates were approved. O&R’s electric sales in New Jersey are not subject to a decoupling mechanism, and as a result, changes in such volumes do impact revenues.


(b)	“Residential/Religious” generally includes single-family dwellings, individual apartments in multi-family dwellings, religious organizations and certain other not-for-profit organizations.


(c)	Other electric operating revenues generally reflect changes in regulatory assets and liabilities in accordance with the company’s electric rate plan.


(d)	After adjusting for weather and other variations, electric delivery volumes in O&R’s service area ~~decreased 3.4~~increased 2.7 percent in the three months ended ~~September 30, 2017~~March 31, 2020 compared with the ~~2016~~2019 period.

Operating revenues decreased $7 million in the three months ended September 30, 2017 compared with the 2016 period due primarily to lower purchased power expenses ($9 million), offset by higher revenues from the New York electric rate plan ($3 million).

~~Purchased power~~ ~~expenses~~ decreased $9 million in the three months ended ~~September 30, 2017~~March 31, 2020 compared with the ~~2016~~2019 period due primarily to lower purchased power expenses.

Purchased power expenses decreased $11 million in the three months ended March 31, 2020 compared with the 2019 period due to lower unit costs ($9 million) and purchased volumes ($102 million)~~, offset by higher unit~~.

Other operations and maintenance expenses increased $2 million in the three months ended March 31, 2020 compared with the 2019 period due primarily to lower workers’ compensation recoveries ($1 million) and the amortization of prior deferred storm costs ($1 million).

Depreciation and amortization ~~expenses~~ increased $1 million in the three months ended ~~September 30, 2017~~March 31, 2020 compared with the ~~2016~~2019 period due primarily to higher electric utility plant balances.

Taxes, other than income taxes increased $1 million in the three months ended March 31, 2020 compared with the 2019 period due primarily to higher property taxes.

Gas

O&R’s results of gas operations for the three months ended ~~September 30, 2017~~March 31, 2020 compared with the ~~2016~~2019 period iswere as follows:

Table of Contents


	For the Three Months Ended			For the Three Months Ended
(Millions of Dollars)	September 30, 2017	September 30, 2016	Variation	March 31, 2020	March 31, 2019	Variation
Operating revenues	$28	$27	$1	$97	$113	$(16)
Gas purchased for resale	10	8	2	24	44	(20)
Other operations and maintenance	17	14	3	17	16	1
Depreciation and amortization	5		—	6		—
Taxes, other than income taxes	7		—	9		—
Gas operating income	$(11)	$(7)	$(4)	$41	$38	$3

~~Table of Contents~~

O&R’s gas sales and deliveries, excluding off-system sales, for the three months ended ~~September 30, 2017~~March 31, 2020 compared with the ~~2016~~2019 period were:


	Thousands of Dt Delivered							Revenues in Millions (a)					Thousands of Dt Delivered							Revenues in Millions (a)
	For the Three Months Ended							For the Three Months Ended					For the Three Months Ended							For the Three Months Ended
Description	September 30, 2017	September 30, 2016	Variation		Percent Variation			September 30, 2017	September 30, 2016	Variation	Percent Variation		March 31, 2020	March 31, 2019	Variation		Percent Variation			March 31, 2020	March 31, 2019	Variation	Percent Variation
Residential	579	550	29		5.3	%		$11	$9	$2	22.2	%	4,074	4,966	(892	)	(18.0	)%		$51	$69	$(18)	(26.1	)%
General	198	177	21		11.9			2		—	—		931	1,111	(180	)	(16.2	)		9	13	(4)	(30.8	)
Firm transportation	898	884	14		1.6			8		—	—		3,543	4,219	(676	)	(16.0	)		27		—	—
Total firm sales and transportation	1,675	1,611	64		4.0		(b)	21	19	2	10.5		8,548	10,296	(1,748	)	(17.0	)	(b)	87	109	(22)	(20.2	)
Interruptible sales	819	893	(74	)	(8.3	)		1	—	1	—		1,165	1,051	114		10.8			2		—	—
Generation plants	5	3	2		66.7			—	—	—	—		—	—	—		—			—	—	—	—
Other	74	70	4		5.7			—	—	—	—		373	437	(64	)	(14.6	)		—	—	—	—
Other gas revenues	—	—	—		—			6	8	(2)	(25.0	)	—	—	—		—			8	2	6	Large
Total	2,573	2,577	(4	)	(0.2	)%		$28	$27	$1	3.7	%	10,086	11,784	(1,698	)	(14.4	)%		$97	$113	$(16)	(14.2	)%


(a)	Revenues from New York gas sales are subject to a weather normalization clause and a revenue decoupling mechanism as a result of which delivery revenues are generally not affected by changes in delivery volumes from levels assumed when rates were approved.


(b)	After adjusting for weather and other variations, total firm sales and transportation volumes increased ~~3.1~~1.5 percent in the three months ended ~~September 30, 2017~~March 31, 2020 compared with the ~~2016~~2019 period.

Operating revenues decreased $16 million in the three months ended March 31, 2020 compared with the 2019 period due primarily to lower gas purchased for resale ($20 million), offset, in part, by higher revenues from the New York gas rate plan ($2 million).

Gas purchased for resale decreased $20 million in the three months ended March 31, 2020 compared with the 2019 period due to lower unit costs ($11 million) and purchased volumes ($9 million).

Other operations and maintenance expenses increased $1 million in the three months ended ~~September 30, 2017~~March 31, 2020 compared with the ~~2016~~2019 period due primarily to lower workers’ compensation recoveries and higher gas ~~purchased for resale ($2 million), offset by lower revenues from the New York gas rate plan ($1 million).~~program spending.

~~Gas purchased for resale~~ ~~increased $2 million in the three months ended September 30, 2017 compared with the 2016 period due to higher purchased volumes ($3 million), offset by lower unit costs ($1 million).~~

~~Other operations and maintenance~~ ~~expenses increased $3 million in the three months ended September 30, 2017 compared with the 2016 period due primarily to higher pension costs.~~

~~Income Tax Expense~~

Income taxes increased $1 million in the three months ended September 30, 2017 compared with the 2016 period due primarily to the absence in 2017 of a tax benefit from a corporate-owned life insurance policy in 2016 ($2 million), offset in part by lower income before income tax expense ($1 million).

Clean Energy Businesses

The Clean Energy Businesses’ results of operations for the three months ended ~~September 30, 2017~~March 31, 2020 compared with the ~~2016~~2019 period iswere as follows:


	For the Three Months Ended			For the Three Months Ended
(Millions of Dollars)	September 30, 2017	September 30, 2016	Variation	March 31, 2020	March 31, 2019	Variation
Operating revenues	$177	$350	$(173)	$146	$217	$(71)
Purchased power	—	234	(234)
Gas purchased for resale	47	39	8	13	81	(68)
Other operations and maintenance	79	40	39	55	61	(6)
Depreciation and amortization	19	11	8	57	58	(1)
Taxes, other than income taxes	3	5	(2)	7	6	1
Gain on sale of retail electric supply business (2016)	—	(104)	104
Operating income	$29	$125	$(96)	$14	$11	$3

Operating revenues decreased ~~$173~~$71 million in the three months ended ~~September 30, 2017~~March 31, 2020 compared with the ~~2016~~2019 period due primarily to lower ~~electric retail~~wholesale revenues ($74 million) and lower energy services revenues ($12 million)

Table of ~~$256 million from the sale of the retail electric supply business~~Contents

offset, in ~~September 2016. Renewable revenues increased $56 million due primarily to an increase in~~part, by higher renewable electric production ~~projects in operation~~revenues ($11 million) and ~~revenues from the engineering, procurement and construction of Upton~~

~~Table of Contents~~

~~2 (see Note O to the Third Quarter Financial Statements). Energy services revenues increased $9 million. Wholesale revenues increased $10 million due to higher sales volumes. Net~~net mark-to-market values ~~increased $32 million, due primarily to the sale of the retail electric supply business, of which $24 million in gains are reflected in~~($4 million).

Gas purchased ~~power costs and $8 million in gains are reflected in revenues.~~

~~Purchased power~~ ~~expenses~~for resale decreased ~~$234~~$68 million in the three months ended ~~September 30, 2017~~March 31, 2020 compared with the ~~2016~~2019 period due ~~primarily~~ to lower ~~electric costs due to the sale of the retail electric supply business in September 2016 ($210 million)~~purchased volumes.

Other operations and ~~changes in mark-to-market values ($24 million).~~

~~Gas purchased for resale~~ ~~increased $8~~maintenance expenses decreased $6 million in the three months ended ~~September 30, 2017~~March 31, 2020 compared with the ~~2016 period due to higher purchased volumes.~~

~~Other operations and maintenance~~ ~~expenses increased $39 million in the three months ended September 30, 2017 compared with the 2016~~2019 period due primarily to ~~Upton 2 engineering, procurement and construction costs (see Note O to the Third Quarter Financial Statements) and an increase in~~lower energy services costs.

~~Depreciation and amortization~~ ~~increased $8 million in the three months ended September 30, 2017 compared with the 2016 period due to an increase in solar electric production projects in operation during 2017.~~

~~Taxes, other than income taxes~~ ~~decreased $2 million in the three months ended September 30, 2017 compared with the 2016 period primarily due to lower gross receipts tax from the sale of the retail electric supply business.~~

G~~ain on sale of retail electric supply business was $104 million in the three months ended September 30, 2016 reflecting the sale of the Clean Energy Businesses' retail electric supply business.~~

~~Other Income (Deductions)~~

Other income (deductions) decreased $9 million in the three months ended September 30, 2017 compared with the 2016 period due primarily to the gain related to the acquisition of a solar electric production investment in 2016.

Net Interest Expense

Net interest expense increased $5$76 million in the three months ended ~~September 30, 2017~~March 31, 2020 compared with the ~~2016~~2019 period due ~~primarily~~ to ~~increased debt~~unrealized losses on ~~solar electric production projects.~~interest rate swaps.

Income Tax Expense

Income taxes decreased ~~$58~~$22 million in the three months ended ~~September 30, 2017~~March 31, 2020 compared with the ~~2016~~2019 period due primarily to lower income before income tax expense (excluding income attributable to non-controlling interest) ($4415 million), higher renewable energy ~~tax~~ credits ($1 million) and the increase to deferred state income taxes in 2016 as a result of the sale of the retail electric supply business that increased the Clean Energy Businesses’ state apportionment factor on its cumulative temporary differences ($13 million).

~~Other~~

~~For Con Edison, “Other” includes parent company and consolidation adjustments.~~

~~Table of Contents~~

~~Nine Months Ended September 30, 2017 Compared with Nine Months Ended September 30, 2016~~

~~The Companies’ results of operations in 2017 compared with 2016 were:~~

CECONY O&R
Clean Energy Businesses

Con Edison
Transmission Other (a) Con Edison (b)
(Millions of Dollars)
Increases
(Decreases)
Amount
Increases
(Decreases)
Percent
Increases
(Decreases)
Amount
Increases
(Decreases)
Percent
Increases
(Decreases)
Amount
Increases
(Decreases)
Percent
Increases
(Decreases)
Amount Increases
(Decreases)
Percent
Increases
(Decreases)
Amount
Increases
(Decreases)
Percent
Increases
(Decreases)
Amount
Increases
(Decreases)
Percent
Operating revenues $207 2.7 % $37 5.9 % $(538) (53.9 )% $1 — % $(3) Large
$(296) (3.2 )%
Purchased power (106) (8.7 ) (6) (3.9 ) (679) Large
—
—
(3) Large
(794) (38.8 )
Fuel 36 27.1
—
—
—
—
—
—
—
—
36 27.1
Gas purchased for resale 155 71.4
20 62.5
89 Large
—
—
—
—
264 82.5
Other operations and maintenance (113) (5.4 ) 16 7.3
50 40.3
6 Large
—
—
(41) (1.7 )
Depreciation and amortization 66 8.0
3 6.0
24 80.0
—
—
—
—
93 10.3
Taxes, other than income taxes 77 5.3
2 3.3
(4) (25.0 ) —
—
(1) Large
74 4.9
Gain on sale of retail electric supply business (2016) and solar electric production project (2017)

—
—
—
—
(103) Large
—
—
—
—
(103) Large
Operating income 92 5.1
2 1.8
(121) (65.8 ) (5) Large
1 Large
(31) (1.5 )
Other income less deductions 4 Large
(1) Large
(2) (5.7 ) 37 Large
(1) —
37 60.7
Net interest expense 12 2.7
(1) (3.6 ) 11 47.8
8 Large
(2) (18.2 ) 28 5.4
Income before income tax expense 84 6.2
2 2.3
(134) (68.4 ) 24 Large
2 (20.0 ) (22) (1.3 )
Income tax expense 60 12.2
4 12.5
(68) (89.5 ) 10 Large
(9) Large
(3) (0.5 )
Net income $24 2.8 % $(2) (3.6 )% $(66) (55.0 )% $14 Large
$11 Large
$(19) (1.8 )%


~~(a)~~	~~Includes parent company and consolidation adjustments.~~


~~(b)~~	~~Represents the consolidated results of operations of Con Edison and its businesses.~~

~~Table of Contents~~

~~CECONY~~

For the Nine Months Ended
September 30, 2017

For the Nine Months Ended
September 30, 2016


(Millions of Dollars) Electric
Gas
Steam
2017 Total Electric
Gas
Steam
2016 Total 2017-2016
Variation
Operating revenues $6,079 $1,421 $448 $7,948 $6,222 $1,113 $406 $7,741 $207
Purchased power 1,084 —
26 1,110 1,191 —
25 1,216 (106)
Fuel 95 —
74 169 81 —
52 133 36
Gas purchased for resale —
372 —
372 —
217 —
217 155
Other operations and maintenance 1,528 330 134 1,992 1,659 307 139 2,105 (113)
Depreciation and amortization 690 137 64 891 645 118 62 825 66
Taxes, other than income taxes 1,205 220 98 1,523 1,159 198 89 1,446 77
Operating income $1,477 $362 $52 $1,891 $1,487 $273 $39 $1,799 $92

~~Electric~~

~~CECONY’s results of electric operations for the nine months ended September 30, 2017 compared with the 2016 period is as follows:~~

For the Nine Months Ended

(Millions of Dollars) September 30, 2017 September 30, 2016 Variation
Operating revenues $6,079 $6,222 $(143)
Purchased power 1,084 1,191 (107)
Fuel 95 81 14
Other operations and maintenance 1,528 1,659 (131)
Depreciation and amortization 690 645 45
Taxes, other than income taxes 1,205 1,159 46
Electric operating income $1,477 $1,487 $(10)

~~CECONY’s electric sales and deliveries for the nine months ended September 30, 2017 compared with the 2016 period were:~~

Millions of kWh Delivered Revenues in Millions (a)

For the Nine Months Ended

For the Nine Months Ended

Description September 30, 2017
September 30, 2016
Variation
Percent
Variation
September 30, 2017 September 30, 2016 Variation
Percent
Variation
Residential/Religious (b) 7,576
8,130
(554 ) (6.8 )% $1,925 $2,017 $(92) (4.6 )%
Commercial/Industrial 6,965
7,220
(255 ) (3.5 ) 1,393 1,381 12 0.9
Retail choice customers 19,748
20,404
(656 ) (3.2 ) 2,092 2,114 (22) (1.0 )
NYPA, Municipal Agency and other sales 7,548
7,641
(93 ) (1.2 ) 483 474 9 1.9
Other operating revenues (c) —
—
—
—
186 236 (50) (21.2 )
Total 41,837
43,395
(1,558 ) (3.6 )% (d) $6,079 $6,222 $(143) (2.3 )%


~~(a)~~	Revenues from electric sales are subject to a revenue decoupling mechanism, as a result of which delivery revenues generally are not affected by changes in delivery volumes from levels assumed when rates were approved.


~~(b)~~	~~“Residential/Religious” generally includes single-family dwellings, individual apartments in multi-family dwellings, religious organizations and certain other not-for-profit organizations.~~


~~(c)~~	~~Other electric operating revenues generally reflect changes in regulatory assets and liabilities in accordance with the revenue decoupling mechanism and other provisions of the company’s rate plans.~~


~~(d)~~	After adjusting for variations, primarily weather and billing days, electric delivery volumes in CECONY’s service area decreased 0.9 percent in the nine months ended September 30, 2017 compared with the 2016 period.

~~Table of Contents~~

~~Operating revenues~~ decreased $143 million in the nine months ended September 30, 2017 compared with the 2016 period due primarily to lower purchased power costs ($107 million). The lower revenues reflected the decline in surcharges for assessments and fees that were collected in revenues from customers ($13 million).

~~Purchased power~~ ~~expenses decreased $107 million in the nine months ended September 30, 2017 compared with the 2016 period due to lower purchased volumes ($95 million) and unit costs ($12 million).~~

~~Fuel~~ expenses increased $14 million in the nine months ended September 30, 2017 compared with the 2016 period due to higher unit costs ($12 million) and purchased volumes from the company’s electric generating facilities ($2 million).

~~Other operations and maintenance~~ ~~expenses decreased $131 million in the nine months ended September 30, 2017 compared with the 2016 period due primarily to lower costs for pension and other postretirement benefits ($114 million)~~, surcharges for assessments and fees that are collected in revenues from customers ($13 million), environmental costs ($17 million) and stock based compensation ($6 million), offset by higher costs for municipal infrastructure support ($20 million).

~~Depreciation and amortization~~ ~~increased $45 million in the nine months ended September 30, 2017 compared with the 2016 period due primarily to higher electric utility plant balances.~~

~~Taxes, other than income taxes~~ increased $46 million in the nine months ended September 30, 2017 compared with the 2016 period due primarily to higher property taxes ($43 million) and the absence in 2017 of a favorable state audit settlement in 2016 ($5 million), offset by lower state and local taxes ($4 million).

~~Gas~~

~~CECONY’s results of gas operations for the nine months ended September 30, 2017 compared with the 2016 period is as follows:~~

For the Nine Months Ended

(Millions of Dollars) September 30, 2017 September 30, 2016 Variation
Operating revenues $1,421 $1,113 $308
Gas purchased for resale 372 217 155
Other operations and maintenance 330 307 23
Depreciation and amortization 137 118 19
Taxes, other than income taxes 220 198 22
Gas operating income $362 $273 $89

~~Table of Contents~~

~~CECONY’s gas sales and deliveries, excluding off-system sales, for the nine months ended September 30, 2017 compared with the 2016 period were:~~

Thousands of Dt Delivered Revenues in Millions (a)

For the Nine Months Ended

For the Nine Months Ended

Description September 30, 2017
September 30, 2016
Variation
Percent
Variation
September 30, 2017 September 30, 2016
Variation
Percent
Variation
Residential 39,814
35,565
4,249
11.9 % $613 $506 $107 21.1 %
General 23,427
20,962
2,465
11.8
255 200 55 27.5
Firm transportation 53,952
51,333
2,619
5.1
390 332 58 17.5
Total firm sales and transportation 117,193
107,860
9,333
8.7
(b) 1,258 1,038 220 21.2
Interruptible sales (c) 6,526
7,587
(1,061 ) (14.0 ) 30 29 1 3.4
NYPA 30,233
31,970
(1,737 ) (5.4 ) 2 2 —
—
Generation plants 48,989
70,895
(21,906 ) (30.9 ) 19 19 —
—
Other 16,756
16,442
314
1.9
24 25 (1) (4.0 )
Other operating revenues (d) —
—
—
—
88 —
88 —
Total 219,697
234,754
(15,057 ) (6.4 )% $1,421 $1,113 $308 27.7 %


~~(a)~~	Revenues from gas sales are subject to a weather normalization clause and a revenue decoupling mechanism as a result of which delivery revenues are generally not affected by changes in delivery volumes from levels assumed when rates were approved.


~~(b)~~	After adjusting for variations, primarily billing days, firm gas sales and transportation volumes in the company’s service area increased 6.4 percent in the nine months ended September 30, 2017 compared with the 2016 period, reflecting primarily increased volumes attributable to the growth in the number of gas customers.


~~(c)~~	~~Includes 3,563 thousands and 3,940 thousands of Dt for the 2017 and 2016 periods, respectively, which are also reflected in firm transportation and other.~~


~~(d)~~	~~Other gas operating revenues generally reflect changes in regulatory assets and liabilities in accordance with the company’s rate plans.~~

~~Operating revenues~~ increased $308 million in the nine months ended September 30, 2017 compared with the 2016 period due primarily to higher revenues from the gas rate plan and growth in the number of customers ($133 million) and increased gas purchased for resale expense ($155 million).

~~Gas purchased for resale~~ ~~increased $155 million in the nine months ended September 30, 2017 compared with the 2016 period due to higher unit costs ($151 million) and purchased volumes ($4 million).~~

~~Other operations and maintenance~~ expenses increased $23 million in the nine months ended September 30, 2017 compared with the 2016 period due primarily to higher pension and other postretirement benefits costs ($7 million), health and life expenses ($5 million), surcharges for assessments and fees that are collected in revenues from customers ($3 million) and costs for maintenance of gas mains ($2 million).

~~Depreciation and amortization~~ ~~increased $19 million in the nine months ended September 30, 2017 compared with the 2016 period due primarily to higher gas utility plant balances.~~

~~Taxes, other than income taxes~~ increased $22 million in the nine months ended September 30, 2017 compared with the 2016 period due primarily to higher property taxes ($12 million), state and local taxes ($6 million) and payroll taxes ($3 million).

~~Table of Contents~~

~~Steam~~

~~CECONY’s results of steam operations for the nine months ended September 30, 2017 compared with the 2016 period is as follows:~~

For the Nine Months Ended

(Millions of Dollars) September 30, 2017 September 30, 2016 Variation
Operating revenues $448 $406 $42
Purchased power 26 25 1
Fuel 74 52 22
Other operations and maintenance 134 139 (5)
Depreciation and amortization 64 62 2
Taxes, other than income taxes 98 89 9
Steam operating income $52 $39 $13

~~CECONY’s steam sales and deliveries for the nine months ended September 30, 2017 compared with the 2016 period were:~~

Millions of Pounds Delivered Revenues in Millions

For the Nine Months Ended

For the Nine Months Ended

Description September 30, 2017
September 30, 2016
Variation
Percent
Variation
September 30, 2017 September 30, 2016 Variation
Percent
Variation
General 364
345
19
5.5 % $20 $18 $2 11.1 %
Apartment house 4,248
4,251
(3 ) (0.1 ) 119 107 12 11.2
Annual power 10,074
10,640
(566 ) (5.3 ) 300 284 16 5.6
Other operating revenues (a) —
—
—
—
9 (3) 12 Large
Total 14,686
15,236
(550 ) (3.6 )% (b) $448 $406 $42 10.3 %


~~(a)~~	~~Other steam operating revenues generally reflect changes in regulatory assets and liabilities in accordance with the company’s rate plan.~~


~~(b)~~	~~After adjusting for variations, primarily weather and billing days, steam sales and deliveries decreased 3.5 percent in the nine months ended September 30, 2017 compared with the 2016 period.~~

~~Operating revenues~~ increased $42 million in the nine months ended September 30, 2017 compared with the 2016 period due primarily to higher fuel expenses ($22 million), the weather impact on revenues ($6 million), lower regulatory reserve related to steam earnings sharing ($7 million), a property tax refund incentive ($3 million), and higher purchased power costs ($1 million).

~~Purchased power~~ ~~expenses increased $1 million in the nine months ended September 30, 2017 compared with the 2016 period due to higher unit costs ($5 million), offset by lower purchased volumes ($4 million).~~

~~Fuel~~ expenses increased $22 million in the nine months ended September 30, 2017 compared with the 2016 period due to higher unit costs ($23 million), offset by lower purchased volumes from the company’s steam generating facilities ($1 million).

~~Other operations and maintenance~~ ~~expenses decreased $5 million in the nine months ended September 30, 2017 compared with the 2016 period due primarily to lower equipment maintenance expenses.~~

~~Depreciation and amortization~~ ~~increased $2 million in the nine months ended September 30, 2017 compared with the 2016 period due primarily to higher steam utility plant balances.~~

~~Taxes, other than income taxes~~ ~~increased $9 million in the nine months ended September 30, 2017 compared with the 2016 period due primarily to higher property taxes ($7 million) and state and local taxes ($1 million).~~

~~Net Interest Expense~~

~~Net interest expense increased $12 million in the nine months ended September 30, 2017 compared with the 2016 period due primarily to higher long-term debt balances in the 2017 period.~~

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~~Income Tax Expense~~

Income taxes increased $60 million in the nine months ended September 30, 2017 compared with the 2016 period due primarily to higher income before income tax expense ($33 million), a decrease in tax benefits for plant-related flow through items ($27 million), lower research and development tax credits ($10 million) and a higher reserve for injuries and damages ($9 million), offset in part by lower state income taxes ($~~7 million), higher research and development tax credits included in Con Edison's filing of its 2016 consolidated federal tax return in September 2017 ($5 million), a decrease in bad debt expense ($~~2 million) and a ~~decrease in uncertain tax positions ($1 million).~~

~~O&R~~

For the Nine Months Ended
September 30, 2017 For the Nine Months Ended
September 30, 2016

(Millions of Dollars) Electric
Gas
2017 Total Electric
Gas
2016 Total 2017-2016
Variation
Operating revenues $495 $172 $667 $497 $133 $630 $37
Purchased power 148 —
148 154 —
154 (6)
Gas purchased for resale —
52 52 —
32 32 20
Other operations and maintenance 185 51 236 180 40 220 16
Depreciation and amortization 38 15 53 37 13 50 3
Taxes, other than income taxes 41 21 62 40 20 60 2
Operating income $83 $33 $116 $86 $28 $114 $2

~~Electric~~

~~O&R’s results of electric operations for the nine months ended September 30, 2017 compared with the 2016 period is as follows:~~

For the Nine Months Ended

(Millions of Dollars) September 30, 2017 September 30, 2016 Variation
Operating revenues $495 $497 $(2)
Purchased power 148 154 (6)
Other operations and maintenance 185 180 5
Depreciation and amortization 38 37 1
Taxes, other than income taxes 41 40 1
Electric operating income $83 $86 $(3)

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~~O&R’s electric sales and deliveries for the nine months ended September 30, 2017 compared with the 2016 period were:~~

Millions of kWh Delivered Revenues in Millions (a)

For the Nine Months Ended

For the Nine Months Ended

Description September 30, 2017
September 30, 2016
Variation
Percent
Variation
September 30, 2017 September 30, 2016 Variation
Percent
Variation
Residential/Religious (b) 1,208
1,307
(99 ) (7.6 )% $242 $240 $2 0.8 %
Commercial/Industrial 574
607
(33 ) (5.4 ) 88 89 (1) (1.1 )
Retail choice customers 2,255
2,434
(179 ) (7.4 ) 155 166 (11) (6.6 )
Public authorities 79
76
3
3.9
7 6 1 16.7
Other operating revenues (c) —
—
—
—
3 (4) 7 Large
Total 4,116
4,424
(308 ) (7.0 )% (d) $495 $497 $(2) (0.4 )%


~~(a)~~	O&R’s New York electric delivery revenues are subject to a revenue decoupling mechanism, as a result of which delivery revenues are generally not affected by changes in delivery volumes from levels assumed when rates were approved. O&R’s electric sales in New Jersey are not subject to a decoupling mechanism, and as a result, changes in such volumes do impact revenues.


~~(b)~~	~~“Residential/Religious” generally includes single-family dwellings, individual apartments in multi-family dwellings, religious organizations and certain other not-for-profit organizations.~~


~~(c)~~	~~Other electric operating revenues generally reflect changes in regulatory assets and liabilities in accordance with the company’s electric rate plan.~~


~~(d)~~	~~After adjusting for weather and other variations, electric delivery volumes in O&R’s service area decreased 2.2 percent in the nine months ended September 30, 2017 compared with the 2016 period.~~

~~Operating revenues~~ decreased $2 million in the nine months ended September 30, 2017 compared with the 2016 period due primarily to lower purchased power expense ($6 million) and lower revenues from rental property ($1 million), offset by higher revenues from the New York electric rate plan ($6 million).

~~Purchased power~~ ~~expenses decreased $6 million in the nine months ended September 30, 2017 compared with the 2016 period due to lower purchased volumes ($5 million) and unit costs ($1 million).~~

~~Other operations and maintenance~~ expenses increased $5 million in the nine months ended September 30, 2017 compared with the 2016 period due primarily to operating costs related to weather events in 2017 ($2 million), higher surcharges for assessments and fees that are collected in revenues from customers ($1 million) and a higher reserve for injuries and damages ($1 million).

~~Depreciation and amortization~~ ~~increased $1 million in the nine months ended September 30, 2017 compared with the 2016 period due primarily to higher electric utility plant balances.~~

~~Taxes, other than income taxes~~ ~~increased $1 million in the nine months ended September 30, 2017 compared with the 2016 period due primarily to higher property taxes.~~

~~Gas~~

~~O&R’s results of gas operations for the nine months ended September 30, 2017 compared with the 2016 period is as follows:~~

For the Nine Months Ended

(Millions of Dollars) September 30, 2017 September 30, 2016 Variation
Operating revenues $172 $133 $39
Gas purchased for resale 52 32 20
Other operations and maintenance 51 40 11
Depreciation and amortization 15 13 2
Taxes, other than income taxes 21 20 1
Gas operating income $33 $28 $5

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~~O&R’s gas sales and deliveries, excluding off-system sales, for the nine months ended September 30, 2017 compared with the 2016 period were:~~

Thousands of Dt Delivered Revenues in Millions (a)

For the Nine Months Ended

For the Nine Months Ended

Description September 30, 2017
September 30, 2016
Variation
Percent
Variation
September 30, 2017
September 30, 2016
Variation
Percent
Variation
Residential 5,556
5,266
290
5.5 % $79 $55 $24 43.6 %
General 1,447
1,224
223
18.2
16 10 6 60.0
Firm transportation 6,543
7,188
(645 ) (9.0 ) 50 49 1 2.0
Total firm sales and transportation 13,546
13,678
(132 ) (1.0 ) (b) 145 114 31 27.2
Interruptible sales 2,966
3,020
(54 ) (1.8 ) 5 2 3 Large
Generation plants 6
15
(9 ) (60.0 ) —
—
—
—
Other 589
583
6
1.0
1 —
1 —
Other gas revenues —
—
—
—
21 17 4 23.5 %
Total 17,107
17,296
(189 ) (1.1 )% $172 $133 $39 29.3 %


~~(a)~~	Revenues from New York gas sales are subject to a weather normalization clause and a revenue decoupling mechanism as a result of which delivery revenues are generally not affected by changes in delivery volumes from levels assumed when rates were approved.


~~(b)~~	~~After adjusting for weather and other variations, total firm sales and transportation volumes increased 0.1 percent in the nine months ended September 30, 2017 compared with 2016 period.~~

~~Operating revenues~~ increased $39 million in the nine months ended September 30, 2017 compared with the 2016 period due primarily to an increase in gas purchased for resale ($20 million) and higher revenues from the New York gas rate plan ($14 million).

~~Gas purchased for resale~~ ~~increased $20 million in the nine months ended September 30, 2017 compared with the 2016 period due to higher purchased volumes ($12 million) and unit costs ($8 million).~~

~~Other operations and maintenance~~ ~~expenses increased $11 million in the nine months ended September 30, 2017 compared with the 2016 period due primarily to higher pension costs.~~

~~Depreciation and amortization~~ ~~increased $2 million in the nine months ended September 30, 2017 compared with the 2016 period due primarily to higher gas utility plant balances.~~

~~Taxes, other than income taxes~~ ~~increased $1 million in the nine months ended September 30, 2017 compared with the 2016 period due primarily to higher property taxes.~~

~~Income Tax Expense~~

Income taxes increased $4 million in the nine months ended September 30, 2017 compared with the 2016 period due primarily to higher income before income tax expense ($1 million), a decrease in tax benefits for plant-related flow through items ($1 million) and the absence in 2017 of a tax benefit ~~from a corporate-owned life insurance policy in 2016 ($2 million).~~

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~~Clean Energy Businesses~~

~~The Clean Energy Businesses’ results of operations for the nine months ended September 30, 2017 compared with the 2016 period is as follows:~~

For the Nine Months Ended

(Millions of Dollars) September 30, 2017 September 30, 2016 Variation
Operating revenues $460 $998 $(538)
Purchased power (3) 676 (679)
Gas purchased for resale 161 72 89
Other operations and maintenance 174 124 50
Depreciation and amortization 54 30 24
Taxes, other than income taxes 12 16 (4)
Gain on sale of retail electric supply business (2016) and solar electric production project (2017) (a) (1) (104) 103
Operating income $63 $184 $(121)

~~(a) See Note O to the Third Quarter Financial Statements.~~

~~Operating revenues~~ decreased $538 million in the nine months ended September 30, 2017 compared with the 2016 period, due primarily to lower electric retail revenues of $781 million from the sale of the retail electric supply business in September 2016. Renewable revenues increased $112 million due primarily to an increase in renewable electric production projects in operation and revenues from the engineering, procurement and construction of Upton 2 (see Note O to the Third Quarter Financial Statements). Energy services revenues increased $21 million. Wholesale revenues increased $105 million due to higher sales volumes. Net mark-to-market values decreased $6 million of which $11 million in losses are reflected in purchased power costs and $5 million in gains are reflected in revenues.

~~Purchased power~~ ~~expenses decreased $679 million in the nine months ended September 30, 2017 compared with the 2016 period due primarily to lower electric costs~~ due to the ~~sale of the retail electric supply business in September 2016 ($689 million) offset by changes in mark-to-market values ($11 million).~~

~~Gas purchased for resale~~ ~~increased $89 million~~change in the ~~nine months ended September 30, 2017 compared with~~federal corporate income tax rate recognized for a loss carryback from the ~~2016 period due to higher purchased volumes.~~

~~Other operations and maintenance~~ ~~expenses increased $50 million in the nine months ended September 30, 2017 compared with the 2016 period due to Upton 2 engineering, procurement and construction costs (see Note O~~2018 tax year to the ~~Third Quarter Financial Statements) and an increase~~2013 tax year as allowed under the CARES Act signed into law in ~~energy services costs.~~March 2020 ($4 million).

~~Depreciation and amortization~~ ~~increased $24 million in the nine months ended September 30, 2017 compared with the 2016 period due to an increase in solar electric production projects in operation during 2017.~~

~~Taxes, other than income taxes~~ ~~decreased $4 million in the nine months ended September 30, 2017 compared with the 2016 period due to lower gross receipts tax from the sale of the retail electric supply business in September 2016.~~

G~~ain on sale of retail electric supply business~~ ~~was $104 million in the nine months ended September 30, 2016 reflecting the sale of the Clean Energy Businesses' retail electric supply business.~~

Other ~~Income (Deductions)~~

~~Other income (deductions) decreased $2 million in the nine months ended September 30, 2017 compared with the 2016 period due primarily to earnings from equity investments.~~

~~Net Interest Expense~~

~~Net interest expense increased $11 million in the nine months ended September 30, 2017 compared with the 2016 period due primarily to increased debt on solar electric production projects.~~

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Income Tax Expense

Income taxes decreased ~~$68~~$2 million in the ~~nine~~three months ended ~~September 30, 2017~~March 31, 2020 compared with the ~~2016~~2019 period due primarily to lower ~~income before income tax expense ($54 million), higher renewable energy tax credits ($1 million) and the increase to deferred~~ state income taxes in 2016 as a result of the sale of the retail electric supply business that increased the Clean Energy Businesses’ state apportionment factor on its cumulative temporary differences ($13 million).taxes.

~~Con Edison Transmission~~

~~Other operations and maintenance~~ ~~increased $6 million in the nine months ended September 30, 2017 compared with the 2016 period due primarily to CET having no employees or other direct costs until January 1, 2017.~~

~~Net Interest Expense~~

~~Net interest expense increased $8 million in the nine months ended September 30, 2017 compared with the 2016 period due primarily to a new debt issuance in 2016.~~

~~Other Income (Deductions)~~

Other income (deductions) increased $37 million in the nine months ended September 30, 2017 compared with the 2016 period due primarily to earnings from equity investments in Stagecoach Gas Services, LLC, substantially all of which were made in June 2016.

~~Income Tax Expense~~

~~Income taxes increased $10 million in the nine months ended September 30, 2017 compared with the 2016 period due primarily to higher income before income tax expense.~~

~~Other~~

~~For Con Edison, “Other” includes parent company and consolidation adjustments.~~

Liquidity and Capital Resources

The Companies’ liquidity reflects cash flows from operating, investing and financing activities, as shown on their respective consolidated statement of cash flows and as discussed below.

~~Changes in the~~

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The Companies’ cash, ~~and~~ temporary cash investments and restricted cash resulting from operating, investing and financing activities for the ~~nine~~three months ended ~~September 30, 2017~~March 31, 2020 and ~~2016~~2019 are summarized as follows:


	For the Nine Months Ended September 30,						For the Three Months Ended March 31,
	Con Edison			CECONY			CECONY		O&R		Clean Energy Businesses		Con Edison Transmission				Other (a)		Con Edison (b)
(Millions of Dollars)	2017	2016	Variation	2017	2016	Variation	2020	2019	2020	2019	2020	2019	2020		2019		2020	2019	2020	2019
Operating activities	$2,227	$2,336	$(109)	$1,790	$2,017	$(227)	$340	$395	$41	$62	$527	$22	$(2)		$36		$(494)	$(51)	$412	$464
Investing activities	(2,572)	(3,717)	1,145	(2,197)	(1,943)	(254)	(786)	(750)	(50)	(58)	(138)	(48)	5		(35)		1	3	(968)	(888)
Financing activities	(362)	583	(945)	(278)	(891)	613	816	(111)	15	(39)	(446)	(14)	(3)		(3)		531	59	913	(108)
Net change for the period	(707)	(798)	91	(685)	(817)	132	370	(466)	6	(35)	(57)	(40)	—		(2)		38	11	357	(532)
Balance at beginning of period	776	944	(168)	702	843	(141)	933	818	32	52	251	126	—		2		1	8	1,217	1,006
Balance at end of period(c)	$69	$146	$(77)	$17	$26	$(9)	$1,303	$352	$38	$17	$194	$86		$—		$—	$39	$19	$1,574	$474
Less: Change in cash balances held for sale	—	(4)	4	—	—	—
Balance at end of period excluding held for sale	$69	$150	$(81)	$17	$26	$(9)

(a) Includes parent company and consolidation adjustments.

(b) Represents the consolidated results of operations of Con Edison and its businesses.

(c) See "Reconciliation of Cash, Temporary Cash Investments and Restricted Cash" in Note A to the First Quarter Financial Statements.

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Cash Flows from Operating Activities

The Utilities’ cash flows from operating activities reflect primarily their energy sales and deliveries and cost of operations. The volume of energy sales and deliveries is affected primarily by factors external to the Utilities, such as growth of customer demand, weather, market prices for energy and economic conditions. Measures that promote distributed energy resources, such as distributed generation, demand reduction and energy efficiency, also affect the volume of energy sales and deliveries. In addition, the decline in business activity in the Utilities’ service territory as a result of the COVID-19 pandemic could result in lower billed sales revenues. Under the revenue decoupling mechanisms in the Utilities’ New York electric and gas rate plans, changes in delivery volumes from levels assumed when rates were approved may affect the timing of cash flows, but generally not net income. The prices at which the Utilities provide energy to their customers are determined in accordance with their rate plans. In general, changes in the Utilities’ cost of purchased power, fuel and gas may affect the timing of cash flows, but not net income, because the costs are recovered in accordance with rate plans. Pursuant to their rate plans, the Utilities have recovered from customers a portion of the tax liability they will pay in the future as a result of temporary differences between the book and tax basis of assets and liabilities. These temporary differences affect the timing of cash flows, but not net income, as the Companies are required to record deferred tax assets and liabilities at the current corporate tax rate for the temporary differences. For the Utilities, credits to their customers of the net benefits of the TCJA, including the reduction of the corporate tax rate to 21 percent, decrease cash flows from operating activities. See “COVID-19 Regulatory Matters” and “Other Regulatory Matters” in Note B to the First Quarter Financial Statements and “Coronavirus Disease 2019 (COVID-19) Impacts - Liquidity and Financing,” above.

Net income is the result of cash and non-cash (or accrual) transactions. Only cash transactions affect the Companies’ cash flows from operating activities. Principal non-cash charges or credits include depreciation, deferred income tax expense, ~~and~~ amortizations of certain regulatory assets and ~~liabilities.~~liabilities, and accrued unbilled revenue. Non-cash charges or credits may also be accrued under the revenue decoupling and cost reconciliation mechanisms in the Utilities’ New York electric and gas rate plans.

Net cash flows from operating activities for the ~~nine~~three months ended ~~September 30, 2017~~March 31, 2020 for Con Edison and CECONY were ~~$109~~$52 million and ~~$227~~$55 million lower, respectively, than in the ~~2016~~2019 period. The ~~change~~changes in net cash flows for Con Edison and CECONY ~~reflects~~reflect primarily ~~higher cash paid for income taxes~~a change in pension and retiree benefit obligations ($89 million and $84 million, respectively) and lower accounts payables ($48 million and $40 million, respectively) related primarily to lower utility construction expenditures, offset, in part, by lower TCJA net benefits provided to customers in the ~~2017~~2020 period ~~as compared with the 2016 period of $110~~($66 million and ~~$226~~$66 million, respectively, net of refunds received. The income tax refund received in 2016 reflected the extension of bonus depreciation in late 2015, resulting in a refund of the 2015 estimated federal tax payments.respectively).

The change in net cash flows also reflects the timing of payments for and recovery of energy costs. This timing is reflected within changes to accounts receivable – customers and recoverable and refundable energy costs within other regulatory assets and liabilities and accounts payable balances.

~~The changes in regulatory assets primarily reflect changes in deferred pension costs in accordance with the accounting rules for retirement benefits.~~

Cash Flows Used in Investing Activities

Net cash flows used in investing activities for Con Edison and CECONY were ~~$1,145~~$80 million ~~lower~~ and ~~$254~~$36 million higher, respectively, for the ~~nine~~three months ended ~~September 30, 2017~~March 31, 2020 compared with the ~~2016~~2019 period. The change for Con Edison reflects primarily an increase in non-utility construction expenditures at the Clean Energy Businesses ($82 million) and the proceeds from the sale of a property formerly used by CECONY in its operations in 2019 ($48 million), offset, in part, by lower ~~new~~ investments in electric and gas transmission projects at Con Edison Transmission in the 2020 period ($~~1,011~~30 million) ~~and renewable electric production projects ($240 million),~~ and a decrease in non-utility construction expenditures ($148 million), offset in part by lower proceeds from sale of assets ($216 million). The change for CECONY primarily reflects absence of proceeds from the transfer of assets to NY Transco in 2016 ($122 million) and increased utility construction expenditures at CECONY ($889 million) and O&R ($8 million).

Cash Flows from Financing Activities

Net cash flows from financing activities for Con Edison and CECONY were ~~$945~~$1,021 million ~~lower~~ and ~~$613~~$927 million higher, respectively, in the ~~nine~~three months ended ~~September 30, 2017~~March 31, 2020 compared with the ~~2016~~2019 period.

In August 2017, Con Edison issued 4.1 million common shares resulting in net proceeds of $343 million, after issuance expenses, that were invested by Con Edison in its subsidiaries, principally CECONY and the Clean Energy Businesses, for funding of their construction expenditures and for other general corporate purposes.

~~In June 2017,~~March 2020, CECONY issued ~~$500~~$600 million aggregate principal amount of ~~3.875~~3.35 percent debentures, due ~~2047,~~2030 and $1,000 million aggregate principal amount of 3.95 percent debentures, due 2050, the net proceeds from the sale of which ~~were~~will be used to pay or reimburse the payment of, in whole or in part, existing and new qualifying eligible green expenditures, such as energy efficiency and clean transportation expenditures, that include those funded on or after January 1, 2018 until the maturity date of each series of the debentures. Pending the allocation of the net proceeds to finance or refinance eligible green expenditures, CECONY used the net proceeds for repayment of short-term

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debt and temporarily placed the remaining net proceeds in short-term interest-bearing instruments. See Note C to the First Quarter Financial Statements.

In January 2020, Con Edison issued 1,050,000 shares of its common stock for $88 million upon physical settlement of the remaining shares subject to its May 2019 forward sale agreement. See Note C to the First Quarter Financial Statements.

In March 2019, Con Edison issued 5,649,369 shares of its common stock for $425 million upon physical settlement of the remaining shares subject to its November 2018 forward sale agreements. Con Edison used the proceeds to invest in its subsidiaries for funding of their capital requirements and to repay short-term ~~borrowings and~~debt incurred for ~~other general corporate purposes.~~that purpose.

In March 2017, Con Edison issued $400 million aggregate principal amount of 2.00 percent debentures, due 2020, and prepaid the June 2016 $400 million variable rate term loan that was to mature in 2018.

~~Also, in March 2017, a Con Edison Development subsidiary issued $97 million aggregate principal amount of 4.45 percent senior notes, due 2042, secured by the company’s Upton County Solar project.~~

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In June 2016, CECONY issued $550 million aggregate principal amount of 3.85 percent debentures, due 2046, the net proceeds from the sale of which were used to repay short-term borrowings and for other general corporate purposes. In September 2016, CECONY redeemed at maturity $400 million of 5.50 percent 10-year debentures.

In June 2016, a Con Edison Solutions subsidiary borrowed $2 million pursuant to a loan agreement with a New Jersey utility. The borrowing matures in 2026, bears interest of 11.18 percent and may be repaid in cash or project Solar Renewable Energy Certificates.

In May 2016, Con Edison issued approximately 10 million common shares resulting in net proceeds, after issuance expenses, of $702 million and $500 million aggregate principal amount of 2.00 percent debentures, due 2021, the net proceeds from the sale of which were used in connection with the acquisition by a CET Gas subsidiary of a 50 percent equity interest in a gas pipeline and storage joint venture (see "Con Edison Transmission", above) and for general corporate purposes.

~~In May 2016, a Con Edison Development subsidiary issued $95 million aggregate principal amount of 4.07 percent senior notes, due 2036, secured by the company's California Holdings 3 solar project.~~

In February ~~2016, a~~2019, Con Edison ~~Development subsidiary issued $218~~borrowed $825 million ~~aggregate principal~~under a two-year variable-rate term loan to fund the repayment of a six-month variable-rate term loan. In June 2019, Con Edison pre-paid $150 million of the amount ~~of 4.21 percent senior notes, due 2041, secured by the company's Texas Solar 7 solar project.~~borrowed.

Con Edison’s cash flows from financing for ~~nine~~the three months ended ~~September 30, 2017~~March 31, 2020 and ~~2016~~2019 also reflect the proceeds, and reduction in cash used for reinvested dividends, resulting from the issuance of common shares under the company’s dividend reinvestment, stock purchase and long-term incentive plans of ~~$74~~$26 million and ~~$77~~$25 million, respectively.

Cash flows used in financing activities of the Companies also reflect commercial paper issuances and repayments. The commercial paper amounts outstanding at ~~September 30, 2017~~March 31, 2020 and ~~2016~~2019 and the average daily balances for the ~~nine~~three months ended ~~September 30, 2017~~March 31, 2020 and ~~2016~~2019 for Con Edison and CECONY were as follows:


	2017		2016		2020		2019
(Millions of Dollars, except Weighted Average Yield)	Outstanding at September 30,	Daily average	Outstanding at September 30,	Daily average	Outstanding at March 31,	Daily average	Outstanding at March 31,	Daily average
Con Edison	$356	$645	$601	$813	$1,208	$1,428	$1,435	$1,400
CECONY	$147	$323	$480	$385	$597	$906	$1,085	$920
Weighted average yield	1.3	1.1	0.7	0.6	3.5	2.1	2.7	2.8

Capital Requirements and Resources

Contractual Obligations

Con ~~Edison has decreased its estimates for capital requirements for the retirement of long-term securities for 2018 from $1,688~~Edison’s material obligations to make payments pursuant to contracts totaled $57,333 million ~~to $1,288 million. The decrease reflects the $400~~and $54,144 million ~~prepayment of a variable rate term loan that was to mature in 2018. See Note C to the Third Quarter Financial Statements.~~

~~For each of the Companies, the ratio of earnings to fixed charges (Securities~~at March 31, 2020 and ~~Exchange Commission (SEC) basis) for the nine months ended September 30, 2017 and 2016 and the twelve months ended~~ December 31, ~~2016 was:~~2019, respectively. The increase at March 31, 2020 is due primarily to increases in long-term debt ($1,563 million) and interest on long-term debt ($1,357 million). See "Cash Flows from Financing Activities,” above.

Ratio of Earnings to Fixed Charges

For the Nine Months Ended September 30, 2017 For the Nine Months Ended September 30, 2016 For the Twelve Months Ended December 31, 2016
Con Edison 3.8 4.0 3.6
CECONY 3.9 3.8 3.6

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Capital Resources

For each of the Companies, the common equity ratio at ~~September 30, 2017~~March 31, 2020 and December 31, ~~2016~~2019 was:


	Common Equity Ratio (Percent of total capitalization)		Common Equity Ratio (Percent of total capitalization)
	September 30, 2017	December 31, 2016	March 31, 2020	December 31, 2019
Con Edison	50.8	49.3	48.7	49.6
CECONY	50.9	49.5	47.0	49.2

In March 2020, Moody's Investors Service Inc. (Moody’s) lowered its ratings of Con Edison's senior unsecured debt to Baa2 from Baa1 and CECONY's senior unsecured debt to Baa1 from A3 and affirmed O&R's senior unsecured debt of Baa1. Moody's also affirmed its ratings of Con Edison's, CECONY's and O&R's commercial paper at P-2. Securities ratings assigned by rating organizations are expressions of opinion and are not recommendations to buy, sell or hold securities. A securities rating is subject to revision or withdrawal at any time by the assigning rating organization. Each rating should be evaluated independently of any other rating.

~~Other Changes in~~

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Assets, Liabilities and ~~Liabilities~~Equity

The ~~following table shows changes in certain~~Companies' assets, liabilities, and ~~liabilities~~equity at ~~September 30, 2017, compared with~~March 31, 2020 and December 31, ~~2016.~~

2019 are summarized as follows.

Con Edison CECONY
(Millions of Dollars)
2017 vs. 2016
Variation
2017 vs. 2016
Variation
Assets
Prepayments $433 $398
Non-utility property, less accumulated depreciation 204 —
Regulatory asset - Unrecognized pension and other postretirement costs (248) (254)
Liabilities
Pension and retiree benefits $(404) $(394)
Deferred income taxes and unamortized investment tax credits 539 610
System benefit charge 194 175



	CECONY		O&R		Clean Energy Businesses		Con Edison Transmission		Other (a)		Con Edison (b)
(Millions of Dollars)	2020	2019	2020	2019	2020	2019	2020	2019	2020	2019	2020	2019
ASSETS
Current assets	$4,306	$3,543	$259	$243	$450	$511	$24	$2	$(13)	$(27)	$5,026	$4,272
Investments	417	461	25	26	—	—	1,576	1,585	(7)	(7)	2,011	2,065
Net plant	37,836	37,414	2,355	2,336	4,227	4,121	17	17	—	1	44,435	43,889
Other noncurrent assets	5,009	5,139	388	401	1,870	1,896	14	14	406	403	7,687	7,853
Total Assets	$47,568	$46,557	$3,027	$3,006	$6,547	$6,528	$1,631	$1,618	$386	$370	$59,159	$58,079

LIABILITIES AND SHAREHOLDERS' EQUITY
Current liabilities	$3,503	$4,131	$301	$311	$1,974	$1,525	$131	$135	$402	$185	$6,311	$6,287
Noncurrent liabilities	13,538	13,665	1,122	1,115	252	201	95	88	(49)	(17)	14,958	15,052
Long-term debt	16,194	14,614	818	818	1,991	2,400	500	500	(80)	195	19,423	18,527
Equity	14,333	14,147	786	762	2,330	2,402	905	895	113	7	18,467	18,213
Total Liabilities and Equity	$47,568	$46,557	$3,027	$3,006	$6,547	$6,528	$1,631	$1,618	$386	$370	$59,159	$58,079

(a) Includes parent company and consolidation adjustments.

~~Prepayments~~(b) Represents the consolidated results of operations of Con Edison and its businesses.

CECONY

Current assets at March 31, 2020 were $763 million higher than at December 31, 2019. The change in current assets reflects primarily an increase in prepayments ~~for Con Edison and CECONY reflects~~due primarily ~~the portion allocable~~ to the ~~2017 fourth quarter of CECONY's July 2017~~January 2020 payment of ~~its~~the New York City semi-annual property ~~taxes.~~

~~Non-Utility Property, Less Accumulated Depreciation~~

taxes, offset, in part, by three months of amortization, while the December 2019 balance reflects the full amortization of the previous semi-annual payment made in July 2019 ($473 million). The change also reflects an increase in ~~non-utility property,~~cash and temporary cash investments ($370 million) and accounts receivables, less allowance for uncollectible accounts ($73 million). These increases are offset, in part, by a decrease in accrued unbilled revenue ($146 million).

Investments at March 31, 2020 were $44 million lower than at December 31, 2019. The change in investments reflects primarily a decrease in supplemental retirement income plan assets. See Note E to the First Quarter Financial Statements.

Net plant at March 31, 2020 was $422 million higher than at December 31, 2019. The change in net plant reflects primarily an increase in electric ($303 million), gas ($182 million) and steam ($24 million) plant balances and an increase in construction work in progress ($62 million), offset, in part, by an increase in accumulated depreciation ~~for Con Edison~~($192 million).

Other noncurrent assets at March 31, 2020 were $130 million lower than at December 31, 2019. The change in other noncurrent assets reflects ~~the completion of construction of Con Edison Development's Upton County Solar renewable electric production project (see Con Edison Development, below).~~

~~Regulatory Asset for Unrecognized Pension and Other Postretirement Costs and Liability for Pension and Retiree Benefits~~

~~The~~primarily a decrease in the regulatory asset for unrecognized pension and other postretirement costs ~~and the liability for pension and retiree benefits reflects~~to reflect the final actuarial valuation, as measured at December 31, 2019, of the pension and other retiree benefit plans in accordance with the accounting rules for retirement benefits ($290 million). See Notes B, E and F to the First Quarter Financial Statements. The change in the regulatory asset also reflects the year's amortization of accounting costs. This decrease is offset, in part, by an increase in the regulatory asset for deferred pension and other postretirement benefits ($122 million) and deferred derivative losses ($42 million). See “Other Regulatory Matters” in Note B to the First Quarter Financial Statements.

Current liabilities at March 31, 2020 were $628 million lower than at December 31, 2019. The change in current liabilities reflects primarily a decrease in notes payable ($540 million) (see Note D to the First Quarter Financial Statements) and accounts payable ($108 million).

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Noncurrent liabilities at March 31, 2020 were $127 million lower than at December 31, 2019. The change in noncurrent liabilities reflects primarily a decrease in the liability for pension and retiree benefits ($161 million), which primarily reflects the final actuarial valuation, as measured at December 31, ~~2016,~~2019, of the plans in accordance with the accounting rules for retirement benefits. The change in the regulatory asset also reflects the year’s amortization of accounting costs. The change in the liability for pension and retiree benefits reflects in part contributions to the plans made by the Utilities in 2017. See Notes E and F to the ~~Third~~First Quarter Financial Statements.

~~Deferred Income Taxes and Unamortized Investment Tax Credits~~

The ~~increase~~change also reflects a decrease in the regulatory liability for deferral of net unbilled revenue ($104 million). These decreases are offset, in part, by a change in deferred income taxes and unamortized investment tax credits ~~for Con Edison and CECONY~~($155 million), which reflects primarily ~~bonus~~accelerated tax depreciation, repair deductions and the prepayment of New York City property taxes. See Note J to the First Quarter Financial Statements.

Long-term debt at March 31, 2020 was $1,580 million higher than at December 31, 2019. The change in ~~2017, partially~~long-term debt reflects primarily the March 2020 issuance of $1,600 million of debentures. See "Liquidity and Capital Resources – Cash Flows From Financing Activities" above and Note C to the First Quarter Financial Statements.

Equity at March 31, 2020 was $186 million higher than at December 31, 2019. The change in equity reflects primarily net income for the three months ended March 31, 2020 ($406 million) and capital contributions from parent ($25 million) in 2020, offset, in part, by common stock dividends to parent ($246 million) in 2020.

O&R

Current assets at March 31, 2020 were $16 million higher than at December 31, 2019. The change in current assets reflects primarily an increase in revenue decoupling mechanism receivable ($10 million) and customer accounts receivables, less allowance for uncollectible accounts ($8 million).

Net plant at March 31, 2020 was $19 million higher than at December 31, 2019. The change in net plant reflects primarily an increase in electric ($16 million) and gas ($10 million) plant balances and an increase in construction work in progress ($8 million), offset, in part, by an increase in accumulated depreciation ($16 million).

Other noncurrent assets at March 31, 2020 were $13 million lower than at December 31, 2019. The change in other noncurrent assets reflects primarily a decrease in other work in progress ($6 million) and the regulatory asset for recoverable energy costs ($5 million).

Current liabilities at March 31, 2020 were $10 million lower than at December 31, 2019. The change in current liabilities reflects primarily a decrease in accounts payable ($16 million), billing overcollections ($10 million) and the current other regulatory liability for revenue decoupling mechanism reconciliation ($7 million), offset, in part, by higher notes payable ($27 million).

Equity at March 31, 2020 was $24 million higher than at December 31, 2019. The change in equity reflects net income for the three months ended March 31, 2020 ($31 million) and an increase in other comprehensive income ($5 million), offset, in part, by common stock dividends to parent ($12 million) in 2020.

Clean Energy Businesses

Current assets at March 31, 2020 were $61 million lower than at December 31, 2019. The change in current assets reflects primarily decreases in restricted cash.

Net plant at March 31, 2020 was $106 million higher than at December 31, 2019. The change in net plant reflects primarily additional capital expenditures, offset, in part, by an increase in accumulated depreciation.

Other noncurrent assets at March 31, 2020 were $26 million lower than at December 31, 2019. The change in other noncurrent assets reflects primarily the amortization of the purchase power agreement intangible assets.

Current liabilities at March 31, 2020 were $449 million higher than at December 31, 2019. The change in current liabilities reflects primarily the reclassification of an intercompany loan agreement from the parent company from long-term debt to current liabilities, as described below, and additional working capital requirements.

Noncurrent liabilities at March 31, 2020 were $51 million higher than at December 31, 2019. The change in noncurrent liabilities reflects primarily the change in fair value of derivative liabilities, offset, in part, by the ~~increase in deferred income tax assets~~reduction of lease liability associated with the ~~federal tax attribute carryforwards related~~adoption of ASU No. 2016-02 “Leases (Topic 842)".

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Long-term debt at March 31, 2020 was $409 million lower than at December 31, 2019. The change in long-term debt primarily reflects the reclassification of an intercompany loan agreement from the parent company from long-term debt to current liabilities, as described above.

Equity at March 31, 2020 was $72 million lower than at December 31, 2019. The change in equity reflects primarily net loss for the three months ended March 31, 2020 ($82 million) and common stock dividends to parent ($5 million) in 2020, offset, in part, by an increase in noncontrolling interest ($17 million) in 2020.

CET

Current assets at March 31, 2020 were $22 million higher than at December 31, 2019. The change in current assets reflects primarily a receivable of $19 million from Crestwood Pipeline and Storage Northeast LLC (Crestwood), the joint venture partner in Stagecoach Gas Services, LLC. The agreement between Crestwood and Con Edison Gas Pipeline and Storage, LLC (CET Gas) provides for payments from Crestwood to CET Gas for shortfalls in meeting certain earnings growth performance targets. The payment is expected to total $57 million ($19 million of which is due in the first quarter 2021 and was recorded as a receivable by CET in March 2020, with an additional $19 million plus interest due in each of January 2022 and January 2023). See "Con Edison Transmission" below.

Investments at March 31, 2020 were $9 million lower than at December 31, 2019. The change in investments reflects primarily the decrease in CET Gas' investment in Stagecoach Gas Services, LLC due to the receivable from Crestwood described above ($19 million), offset, in part, by increased allowance for funds used during construction (AFUDC) income from Mountain Valley Pipeline, LLC ($14 million).

Equity at March 31, 2020 was $10 million higher than at December 31, 2019. The change in equity reflects primarily net ~~operating loss and general business tax credits. See Note I to the Third Quarter Financial Statements.~~

~~System Benefit Charge~~

~~The increase in the liability~~income for the ~~system benefit charge reflects amounts collected~~three months ended March 31, 2020 ($14 million), offset, in part, by ~~the Utilities from their customers that will be required~~common stock dividends to ~~be paid to NYSERDA.~~parent ($3 million) in 2020.

Off-Balance Sheet Arrangements

~~None~~At March 31, 2020, none of the Companies’ transactions, agreements or other contractual arrangements ~~meets~~meet the SEC definition of off-balance sheet arrangements.

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Regulatory Matters

In March 2017, the NYSPSC issued an order that changes the way distributed energy resources are compensated and begins to phase out net energy metering. In New York, net energy metering compensates kilowatt-hours exported to the electric distribution system at the full service rate (that is production plus delivery plus taxes and fees). To provide a gradual transition, the NYSPSC allowed all existing resources to keep their current rate treatment and will delay making significant changes to policies affecting new residential and small commercial rooftop solar until 2020. Larger installations, including new commercial and industrial projects and new community solar projects, will be paid for the value of their exports to the electricity distribution system. The new policy establishes a 2 percent limit on bill increases, reducing the shifting of avoided distribution costs to non-participating residential customers that would have occurred under net energy metering.

In October 2017, the Environmental Defense Fund and the Natural Resources Defense Council requested the NYSPSC to prohibit CECONY from recovering costs under the company’s 20-year transportation contract for 250,000 dekatherms per day of capacity on the Mountain Valley Pipeline unless CECONY demonstrates compliance with a public interest standard.

For ~~additional~~ information about the Utilities’ regulatory matters, see Note B to the ~~Third~~First Quarter Financial Statements.

Environmental Matters

In May 2017, a transformer failure at a CECONY substation discharged thousands of gallons of transformer oil into the soil. Some of the transformer oil, which contained small amounts of polychlorinated biphenyls (PCBs), leaked into the East River. The company, the U.S. Coast Guard, the New York State Department of Environmental Conservation and other agencies responded to the incident. The company has replaced the transformer, and is continuing to remediate and monitor the site, the costs of which are not expected to have a material adverse effect on its financial condition, results of operations or liquidity. In connection with the incident, the company may incur monetary sanctions of more than $0.1 million for violations of certain provisions regulating the discharge of materials into, and for the protection of, the environment.

In June 2017, CECONY received a notice of potential liability from the U.S. Environmental Protection Agency (EPA) with respect to the Newtown Creek site that was listed in 2010 on the EPA’s National Priorities List of Superfund sites. The EPA has identified fourteen potentially responsible parties (PRPs) with respect to the site, including CECONY, and has indicated that it will notify the company as additional PRPs are identified and notified by the EPA. Newtown Creek and its tributaries (collectively, Newtown Creek) form a 3.8 mile border between Brooklyn and Queens, New York. Currently, the predominant land use around Newtown Creek includes industrial, petroleum, recycling, manufacturing and distribution facilities and warehouses. Other uses include trucking, concrete manufacture, transportation infrastructure and a wastewater treatment plant. Newtown Creek is near several residential neighborhoods. Six PRPs, not including CECONY, pursuant to an administrative settlement agreement and order on consent the EPA issued to them in 2011, have been performing a remedial investigation of the site. The EPA indicated that sampling events have shown the sediments in Newtown Creek to be contaminated with a wide variety of hazardous substances including PCBs, metals, pesticides, polycyclic aromatic hydrocarbons and volatile organic contaminants. The EPA also indicated that it has reason to believe that hazardous substances have come to be released from CECONY facilities into Newtown Creek. The EPA’s current schedule anticipates completion of a feasibility study for the site by late 2018 and issuance of its record of decision selecting a remedy for the site by late 2020. CECONY is unable to estimate its exposure to liability for the Newtown Creek site.

In the fourth quarter of 2016, CECONY and another utility responded to a reported dielectric fluid leak at a New Jersey marina on the Hudson River associated with one or two underwater transmission lines, the New Jersey portion of which is owned and operated by the other utility and the New York portion of which is owned and operated by CECONY. During the third quarter of 2017, after the marina owner had cleared substantial debris from its collapsed pier, a dielectric fluid leak was found and repaired on one of the underwater transmission lines. In the fourth quarter of 2017, it is anticipated that sediment regrading will be completed in underwater areas of the marina that had been disturbed during the leak search and repair efforts. Monitoring also will be conducted to evaluate whether any further action is necessary. CECONY expects that, consistent with the cost allocation provisions of their prior arrangements for the transmission lines, the costs to respond to the incident and repair the line, net of any recovery from the marina owner, will be shared by CECONY and the other utility. At September 30, 2017, the response and repair costs amounted to approximately $27 million, including those costs incurred by CECONY and those costs which the company has been notified have been incurred by the other utility and the U.S. Coast Guard.

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CECONY does not expect that its ultimate share of the costs to respond to the discharge and repair the transmission line will have a material adverse effect on its financial condition, results of operation or liquidity.

For ~~additional~~ information about the Companies’ environmental matters, see Note G to the ~~Third~~First Quarter Financial Statements.

~~Con Edison Development~~

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Clean Energy Businesses

The following table provides information about the Clean Energy Businesses' renewable electric production projects ~~Con Edison Development owned~~that are in operation and/or in construction at ~~September 30, 2017:~~March 31, 2020:

Project Name
Production
Technology
Generating
Capacity (a)
(MW AC)
Purchased Power Agreement (PPA)Term (In Years) (b)
Actual/Expected
In-Service Date (c)
Location
(State)
Wholly owned projects

Pilesgrove Solar 18 (d) 2011 New Jersey
Flemington Solar Solar 8 (d) 2011 New Jersey
Frenchtown I, II and III Solar 14 (d) 2011-13 New Jersey
PA Solar Solar 10 2012 Pennsylvania
California Solar 2 (e) Solar 80 20 2014-16 California
Oak Tree Wind Wind 20 20 2014 South Dakota
Texas Solar 3 Solar 6 25 2015 Texas
Texas Solar 5 (e) Solar 95 25 2015 Texas
Campbell County Wind Wind 95 30 2015 South Dakota
Texas Solar 7 (e) Solar 106 25 2016 Texas
California Solar 3 (e) Solar 110 20 2016 California
Adams Wind (e) Wind 23 7 2016 Minnesota
Valley View (e) Wind 10 14 2016 Minnesota
Coram (e) Wind 102 16 2016 California
Upton County Solar (e) Solar 158 25 2017 Texas
Projects of less than 5 MW Solar / Wind 25 Various Various Various
Jointly owned projects (e) (f)

California Solar Solar 55 25 2012-13 California
Mesquite Solar 1 Solar 83 20 2013 Arizona
Copper Mountain Solar 2 Solar 75 25 2013-15 Nevada
Copper Mountain Solar 3 Solar 128 20 2014-15 Nevada
Broken Bow II Wind 38 25 2014 Nebraska
Texas Solar 4 Solar 32 25 2014 Texas
Total MW (AC) in Operation
1,291

Panoche Valley Solar 240 20 2018 California
Total MW (AC) in Construction
240

Total MW (AC), All Projects
1,531



Project Name	Generating Capacity (MW AC)	Power Purchase Agreement (PPA) Term (In Years) (a)	Actual/Expected In-Service Date (b)	State	PPA Counterparty (c)
Utility Scale
Solar
PJM assets	54	(d)	2011/2013	New Jersey/Pennsylvania	Various
New England assets	24	Various	2011/2017	Massachusetts/Rhode Island	Various
California Solar (e)	110	25	2012/2013	California	PG&E
Mesquite Solar 1 (e)	165	20	2013	Arizona	PG&E
Copper Mountain Solar 2 (e)	150	25	2013/2015	Nevada	PG&E
Copper Mountain Solar 3 (e)	255	20	2014/2015	Nevada	SCPPA
California Solar 2 (e)	80	20	2014/2016	California	SCE/PG&E
Texas Solar 4 (e)	40	25	2014	Texas	City of San Antonio
Texas Solar 5 (e)	100	25	2015	Texas	City of San Antonio
Texas Solar 7 (e)	112	25	2016	Texas	City of San Antonio
California Solar 3 (e)	110	20	2016/2017	California	SCE/PG&E
Upton Solar (e)	158	25	2017	Texas	City of Austin
California Solar 4 (e)	240	20	2017/2018	California	SCE
Copper Mountain Solar 1 (e)	58	12	2018	Nevada	PG&E
Copper Mountain Solar 4 (e) (f)	94	20	2018	Nevada	SCE
Mesquite Solar 2 (e) (f)	100	18	2018	Arizona	SCE
Mesquite Solar 3 (e) (f)	150	23	2018	Arizona	WAPA (U.S. Navy)
Great Valley Solar (e) (f)	200	17	2018	California	MCE/SMUD/PG&E/SCE
Other	26	Various	Various	Various	Various
Total Solar	2,226
Wind
Broken Bow II (e)	75	25	2014	Nebraska	NPPD
Wind Holdings (e)	180	Various	Various	South Dakota/ Montana	NWE/Basin Electric
Adams Rose Wind (e)	23	7	2016	Minnesota	Dairyland
Coram Wind (e)	102	16	2016	California	PG&E
Other	22	Various	Various	Various	Various
Total Wind	402
Total MW (AC) in Operation	2,628
Total MW (AC) in Construction	607
Total MW (AC) Utility Scale	3,235
Behind the Meter
Total MW (AC) in Operation	54
Total MW (AC) in Construction	6
Total MW Behind the Meter	60


(a)	Represents PPA contractual term or remaining term from the date of acquisition.


(b)	Represents Actual/Expected In-Service Date or date of acquisition.

(c)

PPA Counterparties include: Pacific Gas and Electric Company (PG&E), Southern California Public Power Authority (SCPPA), Southern California Edison Company (SCE), Western Area Power Administration (WAPA), Marin Clean Energy (MCE), Sacramento Municipal Utility District (SMUD), Nebraska Public Power District (NPPD) and NorthWestern Energy (NWE). For information about PG&E’s bankruptcy, see “Long-Lived and Intangible Assets” in Note A to the First Quarter Financial Statements.


(d)	Solar renewable energy credit hedges are in place, in lieu of PPAs, through 2023.


(e)	Project has been pledged as security for project debt financing.


(f)	Projects are financed with tax equity. See Note O to the First Quarter Financial Statements.

~~(a) Represents~~Renewable Electric Generation

In January 2019, PG&E filed for reorganization under Chapter 11 of the U.S. Bankruptcy Code. The output of certain of the Clean Energy Businesses' renewable electric production projects with an aggregate of 680 MW (AC)

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of generating capacity (PG&E Projects) is sold to PG&E under long-term power purchase agreements (PG&E PPAs). At March 31, 2020, Con ~~Edison Development’s ownership interest in~~Edison’s consolidated balance sheet included $802 million of net non-utility plant relating to the ~~project.~~

~~(b) Represents PPA contractual term or remaining term~~PG&E Projects and $274 million of additional projects that secure the PG&E-related project debt, $1,039 million of intangible assets relating to the PG&E PPAs and $980 million of non-recourse related project debt. The PG&E bankruptcy is an event of default under the PG&E PPAs. Pursuant to the related project debt agreements, distributions from ~~Con Edison Development’s date of acquisition.~~

~~(c) Represents Actual/Expected In-Service Date or Con Edison Development's date of acquisition.~~

~~(d) Have Solar Renewable~~the related projects to the Clean Energy ~~Credit hedges in place, in lieu of PPAs, out to 2020.~~

~~(e) Project has~~Businesses have been ~~pledged to secure financing~~suspended. Unless the lenders for the ~~project.~~

~~(f) All of~~related project debt otherwise agree, the ~~jointly-owned projects~~lenders may, upon written notice, declare principal and interest on the related project debt to be due and payable immediately and, if such amounts are ~~50 percent owned, except for Texas Solar 4 (which is 80 percent owned).~~not timely paid, foreclose on the related projects. See “Long-Lived and Intangible Assets” in Note MA and Note C to the ~~Third~~

First Quarter Financial Statements.

~~Con Edison Development's renewable~~Renewable electric production volumes ~~generated~~from utility scale assets for the three ~~and nine~~ months ended ~~September 30, 2017~~March 31, 2020 compared with the ~~2016~~2019 period were:

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	Millions of kWh Generated										Millions of kWh
	For the Three Months Ended					For the Nine Months Ended					For the Three Months Ended
Description	September 30, 2017	September 30, 2016	Variation	Percent Variation		September 30, 2017	September 30, 2016	Variation	Percent Variation		March 31, 2020	March 31, 2019	Variation	Percent Variation
Renewable electric production projects
Solar	668	458	210	45.9	%	1,679	1,215	464	38.2	%	1,154	1,043	111	10.6	%
Wind	217	137	80	58.4	%	734	464	270	58.2	%	351	307	44	14.3	%
Total	885	595	290	48.7	%	2,413	1,679	734	43.7	%	1,505	1,350	155	11.5	%

Financial and Commodity Market Risks

The Companies are subject to various risks and uncertainties associated with financial and commodity markets. The most significant market risks include interest rate risk, commodity price risk ~~credit risk~~ and investment risk.

Interest Rate Risk

The Companies’ interest rate risk relates primarily ~~to variable rate debt and~~ to new debt financing needed to fund capital requirements, including the construction expenditures of the Utilities and maturing debt ~~securities.~~securities, and variable-rate debt. Con Edison and its ~~businesses~~subsidiaries manage interest rate risk through the issuance of mostly fixed-rate debt with varying maturities and through opportunistic refinancing of debt. The Clean Energy Businesses use interest rate swaps to exchange variable-rate project financed debt for a fixed interest rate. See Note M to the First Quarter Financial Statements. Con Edison and CECONY estimate that at ~~September 30, 2017,~~March 31, 2020, a 10 percent increase in interest rates applicable to its variable rate debt would result in an increase in annual interest expense of ~~$2 million.~~$8 million and $5 million, respectively. Under CECONY’s current electric, gas and steam rate plans, variations in actual variable rate tax-exempt debt interest expense, including costs associated with the refinancing of the variable-rate tax-exempt debt, are reconciled to levels reflected in rates.

Commodity Price Risk

Con Edison’s commodity price risk relates primarily to the purchase and sale of electricity, gas and related derivative instruments. The Utilities and the Clean Energy Businesses apply risk management strategies to mitigate their related exposures. See Note KM to the ~~Third~~First Quarter Financial Statements.

Con Edison estimates that, as of ~~September 30, 2017,~~March 31, 2020, a 10 percent decline in market prices would result in a decline in fair value of ~~$66~~$71 million for the derivative instruments used by the Utilities to hedge purchases of electricity and gas, of which ~~$60~~$67 million is for CECONY and $6$4 million is for O&R. Con Edison expects that any such change in fair value would be largely offset by directionally opposite changes in the cost of the electricity and gas purchased. In accordance with provisions approved by state regulators, the Utilities generally recover from customers the costs they incur for energy purchased for their customers, including gains and losses on certain derivative instruments used to hedge energy purchased and related costs.

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The Clean Energy Businesses use a value-at-risk (VaR) model to assess the market price risk of their portfolio of electricity and gas commodity fixed-price purchase and sales commitments, physical forward contracts, generating assets and commodity derivative instruments. VaR represents the potential change in fair value of the portfolio due to changes in market prices, for a specified time period and confidence level. These businesses estimate VaR across their portfolio using a delta-normal variance/covariance model with a 95 percent confidence level, ~~and~~ compare the measured VaR results against performance due to actual prices and stress test the portfolio each quarter using an assumed 30 percent price change from forecast. Since the VaR calculation involves complex methodologies and estimates and assumptions that are based on past experience, it is not necessarily indicative of future results. VaR for the portfolio, assuming a one-day holding period, for the ~~nine~~three months ended ~~September 30, 2017~~March 31, 2020 and the year ended December 31, ~~2016,~~2019, respectively, was as follows:

95% Confidence Level, One-Day Holding Period September 30, 2017
December 31, 2016
(Millions of Dollars)
Average for the period
$—
$2
High 1 4
Low —
1



95% Confidence Level, One-Day Holding Period	March 31, 2020		December 31, 2019
	(Millions of Dollars)
Average for the period		$—		$—
High	—		1
Low	—		—

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~~Credit Risk~~

Investment Risk

The Companies’ investment risk relates to the investment of plan assets for their pension and other postretirement benefit plans and to the investments of ~~the Clean Energy Businesses and~~ Con Edison Transmission that are accounted for under the equity method.

The Companies’ current investment policy for pension plan assets includes investment targets of 5345 to 6355 percent ~~equities~~equity securities, 33 to 43 percent debt securities and 3510 to 4914 percent ~~fixed income and other securities.~~real estate. At ~~September 30, 2017,~~March 31, 2020, the pension plan investments consisted of 5849 percent equity securities, 38 percent debt securities and 4213 percent ~~fixed income and other securities.~~real estate.

For the Utilities’ pension and other postretirement benefit plans, regulatory accounting treatment is generally applied in accordance with the accounting rules for regulated operations. In accordance with the Statement of Policy issued by the NYSPSC and its current electric, gas and steam rate plans, CECONY defers for payment to or recovery from customers the difference between the pension and other postretirement benefit expenses and the amounts for such expenses reflected in rates. ~~Generally,~~ O&R also defers such difference pursuant to its New York rate plans.

Material Contingencies

For information about the PG&E bankruptcy, see “Long-Lived and Intangible Assets” in Note A and Note C to the First Quarter Financial Statements. For information concerning potential liabilities arising from the Companies’ other material contingencies, see "Other Regulatory Matters" in Note B and Notes G and H to the ~~Third~~First Quarter Financial Statements.

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Item 3: Quantitative and Qualitative Disclosures About Market Risk

For information about the Companies’ primary market risks associated with activities in derivative financial instruments, other financial instruments and derivative commodity instruments, see “Financial and Commodity Market Risks,” in Part I, Item 2 of this report, which information is incorporated herein by reference.

Item 4: Controls and Procedures

The Companies maintain disclosure controls and procedures designed to provide reasonable assurance that the information required to be disclosed in the reports that they submit to the Securities and Exchange Commission (SEC) is recorded, processed, summarized and reported within the time periods specified in the rules and forms of the SEC. Disclosure controls and procedures include, without limitation, controls and procedures designed to ensure that information required to be disclosed by an issuer in the reports that it files or submits under the Securities Exchange Act of 1934, as amended, is accumulated and communicated to the issuer’s management, including its principal executive and principal financial officers, or persons performing similar functions, as appropriate to allow timely decisions regarding required disclosure. For each of the Companies, its management, with the participation of its principal executive officer and principal financial officer, has evaluated its disclosure controls and procedures as of the end of the period covered by this report and, based on such evaluation, has concluded that the controls and procedures are effective to provide such reasonable assurance. Reasonable assurance is not absolute assurance, however, and there can be no assurance that any design of controls or procedures would be effective under all potential future conditions, regardless of how remote.

There was no change in the Companies’ internal control over financial reporting that occurred during the Companies’ most recent fiscal quarter that has materially affected, or is reasonably likely to materially affect, the Companies’ internal control over financial reporting.

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Part II Other Information

Item 1: Legal Proceedings

For information about certain legal proceedings affecting the Companies, see the information on the PG&E

bankruptcy under "Long-Lived and Intangible Assets" in Note A and Note C, "Other Regulatory Matters" in Note B and Notes G and H to the financial statements in Part I, Item 1 of this report, ~~and "Environmental Matters" in Part I, Item 2 of this report,~~ which information is incorporated herein by reference.

Item 1A: Risk Factors

~~There were no material changes in~~Please see below the new risk factor affecting the Companies’ ~~risk factors compared~~businesses, in addition to those ~~disclosed~~discussed in Item 1A of the Form 10-K.

We face risks related to health epidemics and other outbreaks, including the COVID-19 pandemic.

The COVID-19 pandemic is currently impacting countries, communities, supply chains and markets. Our service territories include some of the most severely impacted counties in the United States. As a result of the COVID-19 pandemic, we may face an extended economic slowdown in our service territories which could have a material impact on our liquidity, financial condition, and results of operations.

We will continue to monitor developments relating to the COVID-19 pandemic, however, we cannot predict the extent to which COVID-19 may have a material impact on our business operations, liquidity, financial condition, and results of operations. The extent to which COVID-19 may impact these matters will depend on future developments, which are highly uncertain and cannot be predicted, including new information concerning the severity of COVID-19, actions that federal, state and local governmental or regulatory agencies may take in response to COVID-19, and other actions taken to contain it or treat its impact, among others. See “Coronavirus Disease 2019 (COVID-19) Impacts” in Item 2 and “COVID-19 Regulatory Matters” in Note B.

Item 6: Exhibits

Con Edison



Exhibit 10	Supplemental Credit Agreement, dated as of April 6, 2020, among Con Edison, the lenders party thereto and Bank of America, N.A., as Administrative Agent. (Incorporated by reference to Exhibit ~~10.1.1~~10 to Con Edison’s Current Report on Form 8-K, dated April 6, 2020 (File No. 1-14514).	~~Amendment to the Consolidated Edison Retirement Plan.~~
Exhibit ~~10.1.2~~ 31.1.1	~~Amendment to the Consolidated Edison Retirement Plan.~~
~~Exhibit 12.1~~	~~Statement of computation of Con Edison’s ratio of earnings to fixed charges for the nine-month periods ended September 30, 2017 and 2016, and the 12-month period ended December 31, 2016.~~
~~Exhibit 31.1.1~~	Rule 13a-14(a)/15d-14(a) Certifications – Chief Executive Officer.
Exhibit 31.1.2	Rule 13a-14(a)/15d-14(a) Certifications – Chief Financial Officer.
Exhibit 32.1.1	Section 1350 Certifications – Chief Executive Officer.
Exhibit 32.1.2	Section 1350 Certifications – Chief Financial Officer.
Exhibit 101.INS	XBRL Instance ~~Document.~~Document - the instance document does not appear in the Interactive Data File because its XBRL tags are embedded within the Inline XBRL document.
Exhibit 101.SCH	XBRL Taxonomy Extension Schema.
Exhibit 101.CAL	XBRL Taxonomy Extension Calculation Linkbase.
Exhibit 101.DEF	XBRL Taxonomy Extension Definition Linkbase.
Exhibit 101.LAB	XBRL Taxonomy Extension Label Linkbase.
Exhibit 101.PRE	XBRL Taxonomy Extension Presentation Linkbase.
Exhibit 104	Cover Page Interactive Data File - the cover page XBRL tags are embedded within the Inline XBRL document.

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CECONY



Exhibit 4.2.1	Form of CECONY’s 3.35% Debentures, Series 2020 A. (Incorporated by reference to Exhibit ~~10.2.1~~4.1 to CECONY’s Current Report on Form 8-K, dated March 26, 2020 (File No. 1-1217).	~~CECONY Supplemental Medical Benefits.~~
Exhibit 4.2.2	~~Exhibit 12.2~~	~~Statement of computation~~Form of CECONY’s ~~ratio of earnings~~3.95% Debentures, Series 2020 B. (Incorporated by reference to ~~fixed charges for the nine-month periods ended September 30, 2017 and 2016, and the 12-month period ended December 31, 2016.~~Exhibit 4.2 to CECONY’s Current Report on Form 8-K, dated March 26, 2020 (File No. 1-1217).
Exhibit 31.2.1	Rule 13a-14(a)/15d-14(a) Certifications – Chief Executive Officer.
Exhibit 31.2.2	Rule 13a-14(a)/15d-14(a) Certifications – Chief Financial Officer.
Exhibit 32.2.1	Section 1350 Certifications – Chief Executive Officer.
Exhibit 32.2.2	Section 1350 Certifications – Chief Financial Officer.
Exhibit 101.INS	XBRL Instance ~~Document.~~Document - the instance document does not appear in the Interactive Data File because its XBRL tags are embedded within the Inline XBRL document.
Exhibit 101.SCH	XBRL Taxonomy Extension Schema.
Exhibit 101.CAL	XBRL Taxonomy Extension Calculation Linkbase.
Exhibit 101.DEF	XBRL Taxonomy Extension Definition Linkbase.
Exhibit 101.LAB	XBRL Taxonomy Extension Label Linkbase.
Exhibit 101.PRE	XBRL Taxonomy Extension Presentation Linkbase.
Exhibit 104	Cover Page Interactive Data File - the cover page XBRL tags are embedded within the Inline XBRL document.

Pursuant to Item 601(b)(4)(iii)(A) of Regulation S-K, instruments defining the rights of holders of long-term debt of Con Edison’s subsidiaries other than CECONY, the total amount of which does not exceed ten percent of the total assets of Con Edison and its subsidiaries on a consolidated basis, are not filed as exhibits to Con Edison’s Form 10-K or Form 10-Q. Con Edison agrees to furnish to the SEC upon request a copy of any such instrument.

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Signatures

Pursuant to the requirements of the Securities Exchange Act of 1934, each Registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.



	Consolidated Edison, Inc.
	Consolidated Edison Company of New York, Inc.

Date: ~~November 2, 2017~~May 7, 2020	By	/s/ Robert Hoglund
		Robert Hoglund Senior Vice President, Chief Financial Officer and Duly Authorized Officer

7172



	For the Three Months Ended September 30,
	�� Con Edison		CECONY
(Millions of Dollars)	2017	2016	2017	2016
Beginning balance as of July 1,	$(10)	$5	$(6)	$2
Included in earnings	7	(4)	1	—
Included in regulatory assets and liabilities	(13)	(5)	(8)	(3)
Sales	—	4	—	—
Settlements	(4)	1	(1)	1
Ending balance as of September 30,	$(20)	$1	$(14)		$—



Project Name (a)	Generating Capacity (b) (MW AC)	Power Purchase Agreement Term (in Years)	Year of Initial Investment	Location	Maximum Exposure to Loss (Millions of Dollars) (c)
Copper Mountain Solar 3	128	20	2014	Nevada	$175
Mesquite Solar 1	83	20	2013	Arizona	102
Copper Mountain Solar 2	75	25	2013	Nevada	83
California Solar	55	25	2012	California	64
Broken Bow II	38	25	2014	Nebraska	44
Texas Solar 4	32	25	2014	Texas	47



	Three Months Variation		Nine Months Variation
(Millions of Dollars, except per share amounts)	Earnings per Share Variation	Net Income Variation	Earnings per Share Variation	Net Income Variation
CECONY (a)
Changes in rate plans and regulatory charges (b)	$0.12	$35	$0.29	$87
Weather impact on steam revenues	—	(1)	0.01	4
Other operations and maintenance expenses (c)	0.07	22	0.24	73
Depreciation, property taxes and other tax matters (d)	(0.10)	(30)	(0.36)	(108)
Other (e)	(0.06)	(13)	(0.17)	(32)
Total CECONY	0.03	13	0.01	24
O&R (a)
Changes in rate plans and regulatory charges	—	1	0.04	12
Other operations and maintenance expenses (f)	(0.01)	(2)	(0.03)	(9)
Depreciation and property taxes	(0.01)	(4)	(0.02)	(6)
Other (e)	—	—	0.01	1
Total O&R	(0.02)	(5)	—	(2)
Clean Energy Businesses
Operating revenues less energy costs (g)	0.10	32	0.10	31
Other operations and maintenance expenses (h)	(0.08)	(23)	(0.10)	(30)
Depreciation	(0.02)	(5)	(0.05)	(15)
Net interest expense	(0.01)	(3)	(0.02)	(6)
Other (e) (i)	(0.17)	(53)	(0.15)	(46)
Total Clean Energy Businesses	(0.18)	(52)	(0.22)	(66)
Con Edison Transmission (e) (j)	—	(1)	0.04	14
Other, including parent company expenses (e) (k)	0.02	5	0.03	11
Total variations	$(0.15)	$(40)	$(0.14)	$(19)



	Ratio of Earnings to Fixed Charges
	For the Nine Months Ended September 30, 2017	For the Nine Months Ended September 30, 2016	For the Twelve Months Ended December 31, 2016
Con Edison	3.8	4.0	3.6
CECONY	3.9	3.8	3.6



Project Name	Production Technology	Generating Capacity (a) (MW AC)	Purchased Power Agreement (PPA)Term (In Years) (b)	Actual/Expected In-Service Date (c)	Location (State)
Wholly owned projects
Pilesgrove	Solar	18	(d)	2011	New Jersey
Flemington Solar	Solar	8	(d)	2011	New Jersey
Frenchtown I, II and III	Solar	14	(d)	2011-13	New Jersey
PA Solar	Solar	10		2012	Pennsylvania
California Solar 2 (e)	Solar	80	20	2014-16	California
Oak Tree Wind	Wind	20	20	2014	South Dakota
Texas Solar 3	Solar	6	25	2015	Texas
Texas Solar 5 (e)	Solar	95	25	2015	Texas
Campbell County Wind	Wind	95	30	2015	South Dakota
Texas Solar 7 (e)	Solar	106	25	2016	Texas
California Solar 3 (e)	Solar	110	20	2016	California
Adams Wind (e)	Wind	23	7	2016	Minnesota
Valley View (e)	Wind	10	14	2016	Minnesota
Coram (e)	Wind	102	16	2016	California
Upton County Solar (e)	Solar	158	25	2017	Texas
Projects of less than 5 MW	Solar / Wind	25	Various	Various	Various
Jointly owned projects (e) (f)
California Solar	Solar	55	25	2012-13	California
Mesquite Solar 1	Solar	83	20	2013	Arizona
Copper Mountain Solar 2	Solar	75	25	2013-15	Nevada
Copper Mountain Solar 3	Solar	128	20	2014-15	Nevada
Broken Bow II	Wind	38	25	2014	Nebraska
Texas Solar 4	Solar	32	25	2014	Texas
Total MW (AC) in Operation		1,291
Panoche Valley	Solar	240	20	2018	California
Total MW (AC) in Construction		240
Total MW (AC), All Projects		1,531