0001047862 ed:ConsolidatedEdisonCompanyofNewYorkInc.Member ed:DeferredDerivativeGainsNonCurrentMember 2019-04-01 2019-06-30

~~Table of Contents~~

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~~June 30, ~~2017~~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¨	☐

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~~July 31, ~~2017,~~2020, Con Edison had outstanding ~~310,068,797~~334,496,595 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.

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

~~Table of Contents~~



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, Inc.
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

~~Table of Contents~~

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	3947
ITEM 3	Quantitative and Qualitative Disclosures About Market Risk	6985
ITEM 4	Controls and Procedures	6985
PART II—Other Information		7086
ITEM 1	Legal Proceedings	7086
ITEM 1A	Risk Factors	7086
ITEM 6	Exhibits	7086
	Signatures	7188

~~Table of Contents~~

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~~reflect information available and assumptions 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 failure of processes and systems and the performance of employees and contractors 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 or revise any forward-looking statements, whether as a result of new information, future events or otherwise.

~~Table of Contents~~

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 June 30,		For the Six Months Ended June 30,
	2017	2016	2017	2016
	(Millions of Dollars/ Except Per Share Data)
(Millions of Dollars/Except Share Data)					2020	2019	2020	2019
OPERATING REVENUES
Electric	$2,675	$2,769	$6,573	$6,717	$1,983	$1,971	$3,890	$3,912
Gas	296	235	1,593	1,246	453	449	1,384	1,484
Steam	62	63	448	406	84	90	334	411
Non-utility	178	350	458	999	199	234	345	451
TOTAL OPERATING REVENUES	3,211	3,417	9,072	9,368	2,719	2,744	5,953	6,258
OPERATING EXPENSES
Purchased power	460	798	1,253	2,047	380	352	688	719
Fuel	30	29	169	133	23	26	101	133
Gas purchased for resale	115	81	584	320	77	131	309	573
Other operations and maintenance	852	840	2,406	2,447	680	781	1,380	1,575
Depreciation and amortization	337	305	998	905	476	418	946	831
Taxes, other than income taxes	544	528	1,597	1,523	604	578	1,242	1,183
TOTAL OPERATING EXPENSES	2,338	2,581	7,007	7,375	2,240	2,286	4,666	5,014
Gain on sale of retail electric supply business and solar electric production project	—	104	1	104
OPERATING INCOME	873	940	2,066	2,097	479	458	1,287	1,244
OTHER INCOME (DEDUCTIONS)
Investment income	20	20	59	27	25	22	51	45
Other income	20	31	43		4		6	15
Allowance for equity funds used during construction	3	3	8	7	5	4	10	7
Other deductions	(4)	(5)	(12)	(16)	(55)	(27)	(126)	(50)
TOTAL OTHER INCOME	39	49	98	61
TOTAL OTHER INCOME (DEDUCTIONS)					(21)	3	(59)	17
INCOME BEFORE INTEREST AND INCOME TAX EXPENSE	912	989	2,164	2,158	458	461	1,228	1,261
INTEREST EXPENSE
Interest on long-term debt	183	174	539	504	234	219	459	440
Other interest	4	5	11	17	15	47	117	77
Allowance for borrowed funds used during construction	(2)	(1)	(5)	(4)	(2)	(3)	(6)	(7)
NET INTEREST EXPENSE	185	178	545	517	247	263	570	510
INCOME BEFORE INCOME TAX EXPENSE	727	811	1,619	1,641	211	198	658	751
INCOME TAX EXPENSE	270	314	599	602	9	19	64	127
NET INCOME	$457	$497	$1,020	$1,039	$202	$179	$594	$624
Income attributable to non-controlling interest					12	27	29	48
NET INCOME FOR COMMON STOCK					$190	$152	$565	$576
Net income per common share—basic	$1.48	$1.63	$3.33	$3.47	$0.57	$0.46	$1.69	$1.77
Net income per common share—diluted	$1.48	$1.62	$3.31	$3.46	$0.57	$0.46	$1.69	$1.77
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	334.1	328.3	333.8	325.2
AVERAGE NUMBER OF SHARES OUTSTANDING—DILUTED (IN MILLIONS)	309.3	305.9	307.7	300.5	335.0	329.2	334.7	326.1

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

~~Table of Contents~~

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 June 30,		Six Months Ended June 30,
	2017	2016	2017	2016
	(Millions of Dollars)
(Millions of Dollars)					2020	2019	2020	2019
NET INCOME	$457	$497	$1,020	$1,039	$202	$179	$594	$624
INCOME ATTRIBUTABLE TO NON-CONTROLLING INTEREST					(12)	(27)	(29)	(48)
OTHER COMPREHENSIVE INCOME, NET OF TAXES
Pension and other postretirement benefit plan liability adjustments, net of taxes	1			2	—	1	5
TOTAL OTHER COMPREHENSIVE INCOME, NET OF TAXES	1			2	—	1	5
COMPREHENSIVE INCOME	$458	$498	$1,021	$1,041	$190	$153	$570	$581

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

~~Table of Contents~~

Consolidated Edison, Inc.

CONSOLIDATED STATEMENT OF CASH FLOWS (UNAUDITED)


	For the Nine Months Ended September 30,		For the Six Months Ended June 30,
	2017	2016
	(Millions of Dollars)
(Millions of Dollars)			2020	2019
OPERATING ACTIVITIES
Net income	$1,020	$1,039	$594	$624
PRINCIPAL NON-CASH CHARGES/(CREDITS) TO INCOME
Depreciation and amortization	998	905	946	831
Deferred income taxes	626	524	61	126
Rate case amortization and accruals	(93)	(157)	(20)	(59)
Common equity component of allowance for funds used during construction	(8)	(7)	(10)	(7)
Net derivative gains	(4)	(7)
Gain on sale of retail electric supply business and solar electric production project	(1)	(104)
Net derivative losses			89	31
Unbilled revenue and net unbilled revenue deferrals			3	(4)
Gain on sale of assets			—	(5)
Other non-cash items, net	(1)	99	102	(17)
CHANGES IN ASSETS AND LIABILITIES
Accounts receivable – customers	1	(138)	(113)	165
Materials and supplies, including fuel oil and gas in storage	2	15	16	14
Revenue decoupling mechanism receivable			(80)	(127)
Other receivables and other current assets	(39)	90	(10)	125
Income taxes receivable	33	100
Taxes receivable			(1)	19
Prepayments	(433)	(403)	(31)	(35)
Accounts payable	(54)	142	(168)	(156)
Pensions and retiree benefits obligations, net	305	464	100	168
Pensions and retiree benefits contributions	(462)	(510)	(79)	(78)
Accrued taxes	(21)	(21)	(23)	(15)
Accrued interest	59	66	(1)	25
Superfund and environmental remediation costs, net	(9)	68	(3)	(7)
Distributions from equity investments	87	45	20	27
System benefit charge	194	193	(46)	(1)
Deferred charges, noncurrent assets and other regulatory assets	(18)	(104)	(110)	(213)
Deferred credits and other regulatory liabilities	(40)	116	(19)	162
Other current and noncurrent liabilities	85	(79)	(37)	(55)
NET CASH FLOWS FROM OPERATING ACTIVITIES	2,227	2,336	1,180	1,538
INVESTING ACTIVITIES
Utility construction expenditures	(2,148)	(2,057)	(1,528)	(1,613)
Cost of removal less salvage	(185)	(149)	(141)	(142)
Non-utility construction expenditures	(288)	(436)	(258)	(92)
Investments in electric and gas transmission projects	(29)	(1,040)	(15)	(88)
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)	10	11
NET CASH FLOWS USED IN INVESTING ACTIVITIES	(2,572)	(3,717)	(1,932)	(1,876)
FINANCING ACTIVITIES
Net payment of short-term debt	(698)	(928)
Net issuance/(payment) of short-term debt			121	(1,405)
Issuance of long-term debt	997	1,765	1,600	1,989
Retirement of long-term debt	(429)	(407)	(442)	(657)
Debt issuance costs	(12)	(16)	(24)	(17)
Common stock dividends	(600)	(570)	(487)	(455)
Issuance of common shares - public offering	343	702	88	825
Issuance of common shares for stock plans	37	38	28	27
Distribution to noncontrolling interest	—	(1)	(4)	(5)
NET CASH FLOWS (USED IN)/FROM FINANCING ACTIVITIES	(362)	583
CASH AND TEMPORARY CASH INVESTMENTS:
NET CASH FLOWS FROM FINANCING ACTIVITIES			880	302
CASH, TEMPORARY CASH INVESTMENTS, AND RESTRICTED CASH:
NET CHANGE FOR THE PERIOD	(707)	(798)	128	(36)
BALANCE AT BEGINNING OF PERIOD	776	944	1,217	1,006
BALANCE AT END OF PERIOD	$69	$146	$1,345	$970
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:
Interest	$479	$437	$420	$422
Income taxes	$(34)	$(144)	$22	$(15)
SUPPLEMENTAL DISCLOSURE OF NON-CASH INFORMATION
Construction expenditures in accounts payable	$352	$242	$359	$332
Issuance of common shares for dividend reinvestment	$35	$35	$24
Software licenses acquired but unpaid as of end of period			$51	$80
Equipment acquired but unpaid as of end of period			$28	—

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

~~Table of Contents~~

Consolidated Edison, Inc.

CONSOLIDATED BALANCE SHEET (UNAUDITED)


	September 30, 2017	December 31, 2016
	(Millions of Dollars)
(Millions of Dollars)			June 30, 2020	December 31, 2019
ASSETS
CURRENT ASSETS
Cash and temporary cash investments	$69	$776	$1,144	$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 $87 and $70 in 2020 and 2019, respectively			1,332	1,236
Other receivables, less allowance for uncollectible accounts of $5 and $4 in 2020 and 2019, respectively			194	184
Taxes receivable			21	20
Accrued unbilled revenue	411	447	542	599
Fuel oil, gas in storage, materials and supplies, at average cost	337	339	336	352
Prepayments	592	159	291	260
Regulatory assets	109	100	117	128
Restricted cash	41	54	201	236
Revenue decoupling mechanism			156	76
Other current assets	199	151	230	200
TOTAL CURRENT ASSETS	3,096	3,406	4,564	4,272
INVESTMENTS	1,977	1,921	2,080	2,065
UTILITY PLANT, AT ORIGINAL COST
Electric	28,595	27,747	32,575	31,866
Gas	7,972	7,524	10,457	10,107
Steam	2,458	2,421	2,629	2,601
General	2,891	2,719	3,617	3,562
TOTAL	41,916	40,411	49,278	48,136
Less: Accumulated depreciation	8,904	8,541	10,793	10,322
Net	33,012	31,870	38,485	37,814
Construction work in progress	1,415	1,175	2,097	1,937
NET UTILITY PLANT	34,427	33,045	40,582	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 $456 and $391 in 2020 and 2019, respectively			3,908	3,829
Construction work in progress	615	689	407	309
NET PLANT	36,728	35,216	44,897	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			1,510	1,557
Regulatory assets	6,769	7,024	4,606	4,859
Operating lease right-of-use asset			853	857
Other deferred charges and noncurrent assets	134	136	125	134
TOTAL OTHER NONCURRENT ASSETS	7,445	7,712	7,540	7,853
TOTAL ASSETS	$49,246	$48,255	$59,081	$58,079

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

~~Table of Contents~~

Consolidated Edison, Inc.

CONSOLIDATED BALANCE SHEET (UNAUDITED)


	September 30, 2017	December 31, 2016
	(Millions of Dollars)
(Millions of Dollars)			June 30, 2020	December 31, 2019
LIABILITIES AND SHAREHOLDERS’ EQUITY
CURRENT LIABILITIES
Long-term debt due within one year	$687	$39	$1,965	$1,446
Notes payable	356	1,054	1,813	1,692
Accounts payable	1,057	1,147	1,018	1,164
Customer deposits	344	352	332	346
Accrued taxes	43	64	53	76
Accrued interest	209	150	152	153
Accrued wages	105	101	117	102
Fair value of derivative liabilities	70	77	170	123
Regulatory liabilities	58	128	63	102
System benefit charge	628	434	601	647
Operating lease liabilities			83	65
Other current liabilities	358	297	338	371
TOTAL CURRENT LIABILITIES	3,915	3,843	6,705	6,287
NONCURRENT LIABILITIES
Provision for injuries and damages	164	160	126	130
Pensions and retiree benefits	1,443	1,847	1,205	1,516
Superfund and other environmental costs	745	753	734
Asset retirement obligations	256	246	433	425
Fair value of derivative liabilities	83	40	242	105
Deferred income taxes and unamortized investment tax credits	10,744	10,205	6,337	6,227
Operating lease liabilities			811	809
Regulatory liabilities	1,873	1,905	4,652	4,827
Other deferred credits and noncurrent liabilities	262	215	246	279
TOTAL NONCURRENT LIABILITIES	15,570	15,371	14,786	15,052
LONG-TERM DEBT	14,651	14,735	19,149	18,527
EQUITY
Common shareholders’ equity	15,102	14,298	18,225	18,022
Noncontrolling interest	8		216	191
TOTAL EQUITY (See Statement of Equity)	15,110	14,306	18,441	18,213
TOTAL LIABILITIES AND EQUITY	$49,246	$48,255	$59,081	$58,079

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

~~Table of Contents~~

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
Net income				152					27	179
Common stock dividends ($0.74 per share)				(242)						(242)
Issuance of common shares – public offering	5	1	402				(3)			400
Issuance of common shares for stock plans			29							29
Other comprehensive income								1		1
Distributions to noncontrolling interest									(3)	(3)
BALANCE AS OF JUNE 30, 2019	332	$35	$8,008	$10,825	23	$(1,038)	$(110)	$(11)	$156	$17,865

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
Net income				190					12	202
Common stock dividends ($0.76 per share)				(256)						(256)
Issuance of common shares - public offering										—
Issuance of common shares for stock plans			30							30
Other comprehensive income										—
Distributions to noncontrolling interest									(2)	(2)
BALANCE AS OF JUNE 30, 2020	334	$35	$8,198	$11,154	23	$(1,038)	$(110)	$(14)	$216	$18,441

(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.

~~Table of Contents~~

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 June 30,		For the Six Months Ended June 30,
	2017	2016	2017	2016
	(Millions of Dollars)
(Millions of Dollars)					2020	2019	2020	2019
OPERATING REVENUES
Electric	$2,469	$2,557	$6,079	$6,222	$1,845	$1,833	$3,616	$3,630
Gas	268	208	1,421	1,113	416	408	1,250	1,330
Steam	62	63	448	406	84	90	334	411
TOTAL OPERATING REVENUES	2,799	2,828	7,948	7,741	2,345	2,331	5,200	5,371
OPERATING EXPENSES
Purchased power	400	495	1,110	1,216	345	313	618	635
Fuel	30	29	169	133	23	26	101	133
Gas purchased for resale	58	34	372	217	64	76	260	393
Other operations and maintenance	691	724	1,992	2,105	549	651	1,117	1,311
Depreciation and amortization	300	278	891	825	396	339	786	673
Taxes, other than income taxes	520	502	1,523	1,446	579	550	1,186	1,125
TOTAL OPERATING EXPENSES	1,999	2,062	6,057	5,942	1,956	1,955	4,068	4,270
OPERATING INCOME	800	766	1,891	1,799	389	376	1,132	1,101
OTHER INCOME (DEDUCTIONS)
Investment and other income	2	4	9	6	3	4	5	13
Allowance for equity funds used during construction	3	2	7	6	4	3	9	6
Other deductions	(5)	(4)	(10)		(47)	(22)	(114)	(41)
TOTAL OTHER INCOME	—	2	6	2
TOTAL OTHER INCOME (DEDUCTIONS)					(40)	(15)	(100)	(22)
INCOME BEFORE INTEREST AND INCOME TAX EXPENSE	800	768	1,897	1,801	349	361	1,032	1,079
INTEREST EXPENSE
Interest on long-term debt	155	150	456	440	185	165	358	334
Other interest	4	5	11	14	7	19		36
Allowance for borrowed funds used during construction	(2)	(1)	(4)	(3)	(2)		(5)	(6)
NET INTEREST EXPENSE	157	154	463	451	190	182	372	364
INCOME BEFORE INCOME TAX EXPENSE	643	614	1,434	1,350	159	179	660	715
INCOME TAX EXPENSE	242	226	551	491	7	27	102	151
NET INCOME	$401	$388	$883	$859	$152		$558	$564

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

~~Table of Contents~~

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 June 30,		Six Months Ended June 30,
	2017	2016	2017	2016
	(Millions of Dollars)
(Millions of Dollars)					2020	2019	2020	2019
NET INCOME	$401	$388	$883	$859	$152	$152	$558	$564
OTHER COMPREHENSIVE INCOME, NET OF TAXES
Pension and other postretirement benefit plan liability adjustments, net of taxes	1	—	1		1	—	2	—
TOTAL OTHER COMPREHENSIVE INCOME, NET OF TAXES	1	—	1		1	—	2	—
COMPREHENSIVE INCOME	$402	$388	$884	$860	$153	$152	$560	$564

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

~~Table of Contents~~

Consolidated Edison Company of New York, Inc.

CONSOLIDATED STATEMENT OF CASH FLOWS (UNAUDITED)


	For the Nine Months Ended September 30,		For the Six Months Ended June 30,
	2017	2016
	(Millions of Dollars)
(Millions of Dollars)			2020	2019
OPERATING ACTIVITIES
Net income	$883	$859	$558	$564
PRINCIPAL NON-CASH CHARGES/(CREDITS) TO INCOME
Depreciation and amortization	891	825	786	673
Deferred income taxes	566	569	47	90
Rate case amortization and accruals	(107)	(170)	(21)	(58)
Common equity component of allowance for funds used during construction	(7)	(6)	(9)	(6)
Unbilled revenue and net unbilled revenue deferrals			28	21
Gain on sale of assets			—	(5)
Other non-cash items, net	(14)	7	46	(10)
CHANGES IN ASSETS AND LIABILITIES
Accounts receivable – customers	18	(79)	(106)	143
Materials and supplies, including fuel oil and gas in storage	(18)	15	16	17
Revenue decoupling mechanism			(71)	(126)
Other receivables and other current assets	29	18	17	115
Accounts receivable from affiliated companies	12	38	(9)	83
Prepayments	(398)	(351)	(18)	(33)
Accounts payable	(20)	82	(136)	(140)
Accounts payable to affiliated companies	1	8	3	(2)
Pensions and retiree benefits obligations, net	274	439	94	157
Pensions and retiree benefits contributions	(416)	(472)	(78)	(77)
Superfund and environmental remediation costs, net	(7)	76	(7)	(8)
Accrued taxes	(18)	(17)	(24)	(18)
Accrued taxes to affiliated companies	(119)	(2)
Accrued interest	61	43	11	(2)
System benefit charge	175	176	(44)	—
Deferred charges, noncurrent assets and other regulatory assets	(60)	(153)	(118)	(216)
Deferred credits and other regulatory liabilities	77	165	55	146
Other current and noncurrent liabilities	(13)	(53)	(45)	(17)
NET CASH FLOWS FROM OPERATING ACTIVITIES	1,790	2,017	975	1,291
INVESTING ACTIVITIES
Utility construction expenditures	(2,020)	(1,932)	(1,435)	(1,501)
Cost of removal less salvage	(179)	(146)	(139)	(138)
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)	(1,574)	(1,591)
FINANCING ACTIVITIES
Net payment of short-term debt	(453)	(553)	(22)	(343)
Issuance of long-term debt	500	550	1,600	700
Retirement of long-term debt	—	(400)	(350)	(475)
Debt issuance costs	(7)	(6)	(25)	(8)
Capital contribution by parent	279	76	50	850
Dividend to parent	(597)	(558)	(491)	(456)
NET CASH FLOWS USED IN FINANCING ACTIVITIES	(278)	(891)
CASH AND TEMPORARY CASH INVESTMENTS:
NET CASH FLOWS FROM FINANCING ACTIVITIES			762	268
CASH AND TEMPORARY CASH INVESTMENTS
NET CHANGE FOR THE PERIOD	(685)	(817)	163	(32)
BALANCE AT BEGINNING OF PERIOD	702	843	933	818
BALANCE AT END OF PERIOD	$17	$26	$1,096	$786
SUPPLEMENTAL DISCLOSURE OF CASH INFORMATION
Cash paid/(received) during the period for:
Interest	$388	$386	$341	$340
Income taxes	$96	$(130)	$62	$(20)
SUPPLEMENTAL DISCLOSURE OF NON-CASH INFORMATION
Construction expenditures in accounts payable	$240	$195	$271	$297
Software licenses acquired but unpaid as of end of period			$48	$76
Equipment acquired but unpaid as of end of period			$28	—

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

~~Table of Contents~~

Consolidated Edison Company of New York, Inc.

CONSOLIDATED BALANCE SHEET (UNAUDITED)


	September 30, 2017	December 31, 2016
	(Millions of Dollars)
(Millions of Dollars)			June 30, 2020	December 31, 2019
ASSETS
CURRENT ASSETS
Cash and temporary cash investments	$17	$702	$1,096	$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 $81 and $65 in 2020 and 2019, respectively			1,243	1,153
Other receivables, less allowance for uncollectible accounts of $3 in 2020 and 2019			105	120
Accrued unbilled revenue	382	399	395	477
Accounts receivable from affiliated companies	97	109	82	73
Fuel oil, gas in storage, materials and supplies, at average cost	288	270	277	293
Prepayments	498	100	196	178
Regulatory assets	100	90	97	113
Restricted cash	—	2
Revenue decoupling mechanism receivable			147	76
Other current assets	62	95	109	127
TOTAL CURRENT ASSETS	2,550	2,880	3,747	3,543
INVESTMENTS	370	315	475	461
UTILITY PLANT, AT ORIGINAL COST
Electric	26,930	26,122	30,660	29,989
Gas	7,229	6,814	9,562	9,229
Steam	2,458	2,421	2,629	2,601
General	2,640	2,490	3,325	3,271
TOTAL	39,257	37,847	46,176	45,090
Less: Accumulated depreciation	8,170	7,836	9,928	9,490
Net	31,087	30,011	36,248	35,600
Construction work in progress	1,327	1,104	1,955	1,812
NET UTILITY PLANT	32,414	31,115	38,203	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	38,205	37,414
OTHER NONCURRENT ASSETS
Regulatory assets	6,248	6,473	4,252	4,487
Operating lease right-of-use asset			593	601
Other deferred charges and noncurrent assets	61	69	52	51
TOTAL OTHER NONCURRENT ASSETS	6,309	6,542	4,897	5,139
TOTAL ASSETS	$41,647	$40,856	$47,324	$46,557

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

~~Table of Contents~~

Consolidated Edison Company of New York, Inc.

CONSOLIDATED BALANCE SHEET (UNAUDITED)


	September 30, 2017	December 31, 2016
	(Millions of Dollars)
(Millions of Dollars)				June 30, 2020	December 31, 2019
LIABILITIES AND SHAREHOLDER’S EQUITY
CURRENT LIABILITIES
Long-term debt due within one year	$600		$—	$640	$350
Notes payable	147	600		1,115	1,137
Accounts payable	802	876		805	956
Accounts payable to affiliated companies	11	10		16	13
Customer deposits	332	336		318	334
Accrued taxes	32	50		47	71
Accrued taxes to affiliated companies	—	119
Accrued interest	172	111		124	113
Accrued wages	95	91		107	92
Fair value of derivative liabilities	59	66		69	81
Regulatory liabilities	38	90		39	63
System benefit charge	573	398		543	587
Operating lease liabilities				64	54
Other current liabilities	207	242		240	280
TOTAL CURRENT LIABILITIES	3,068	2,989		4,127	4,131
NONCURRENT LIABILITIES
Provision for injuries and damages	158	154		121	125
Pensions and retiree benefits	1,150	1,544		956	1,241
Superfund and other environmental costs	648	655		654
Asset retirement obligations	234	227		369	362
Fair value of derivative liabilities	73	33		128	65
Deferred income taxes and unamortized investment tax credits	10,060	9,450		6,159	6,000
Operating lease liabilities				559	551
Regulatory liabilities	1,673	1,712		4,222	4,427
Other deferred credits and noncurrent liabilities	217	190		210	240
TOTAL NONCURRENT LIABILITIES	14,213	13,965		13,378	13,665
LONG-TERM DEBT	11,971	12,073		15,554	14,614
SHAREHOLDER’S EQUITY (See Statement of Shareholder’s Equity)	12,395	11,829		14,265	14,147
TOTAL LIABILITIES AND SHAREHOLDER’S EQUITY	$41,647	$40,856		$47,324	$46,557

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

~~Table of Contents~~

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				310				310				412				412
Common stock dividend to parent				(186)				(186)				(228)				(228)
Capital contribution by parent			23					23			225					225
Other comprehensive income							—	—								—
BALANCE AS OF MARCH 31, 2016	235	$589	$4,270	$7,735	$(962)	$(61)	$(9)	$11,562
BALANCE AS OF MARCH 31, 2019									235	$589	$4,994	$8,765	$(962)	$(62)	$(5)	$13,319
Net income				161				161				152				152
Common stock dividend to parent				(186)				(186)				(228)				(228)
Capital contribution by parent			28					28			625					625
Other comprehensive income							1									—
BALANCE AS OF JUNE 30, 2016	235	$589	$4,298	$7,710	$(962)	$(61)	$(8)	$11,566
BALANCE AS OF JUNE 30, 2019									235	$589	$5,619	$8,689	$(962)	$(62)	$(5)	$13,868

BALANCE AS OF DECEMBER 31, 2019									235	$589	$5,669	$8,919	$(962)	$(62)	$(6)	$14,147
Net income				388				388				406				406
Common stock dividend to parent				(186)				(186)				(246)				(246)
Capital contribution by parent			25					25			25					25
Other comprehensive income							—	—							1	1
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
BALANCE AS OF MARCH 31, 2020									235	$589	$5,694	$9,079	$(962)	$(62)	$(5)	$14,333
Net income				339				339				152				152
Common stock dividend to parent				(199)				(199)				(246)				(246)
Capital contribution by parent			22					22			25					25
Other comprehensive income							—	—							1	1
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 JUNE 30, 2020									235	$589	$5,719	$8,985	$(962)	$(62)	$(4)	$14,265

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

~~Table of Contents~~

NOTES TO THE FINANCIAL STATEMENTS (UNAUDITED)

General

These combined notes accompany and form an integral part of the separate interim 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~~2019 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~~period ended March 31, ~~2017 and June 30, 2017.~~2020. 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 Accounting Standards Update (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 Accounting Standards Codification (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. The Clean Energy Businesses’ other receivables balance includes bills related to the sale of energy from renewable electric production projects.

The Clean Energy Businesses’ customer accounts receivable balance generally reflects 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 June 30, 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 that 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. For the Utilities’ customer accounts receivable allowance for uncollectible accounts, past events considered include write-offs relative to customer accounts receivable; current conditions include macro-and micro-economic conditions related to trends in the local economy and bankruptcy rates and aged customer accounts receivable balances, 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 six months 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. The increases to the allowance for uncollectible accounts for Con Edison and CECONY were $12 million and $11 million, respectively, for the three months ended June 30, 2020 and $18 million and $16 million, respectively, for the six months ended June 30, 2020.

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 and six months ended June 30, 2020:



	For the Three Months Ended June 30, 2020
	Con Edison		CECONY
(Millions of Dollars)	Accounts receivable - customers	Other receivables	Accounts receivable - customers	Other receivables
Allowance for credit losses
Beginning Balance at April 1, 2020	$75	$5	$70	$3
Recoveries	2	—	2	—
Write-offs	(15)	(1)	(14)	—
Reserve adjustments	25	1	23	—
Ending Balance June 30, 2020	$87	$5	$81	$3



	For the Six Months Ended June 30, 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	4	—	4	—
Write-offs	(34)	(1)	(32)	(1)
Reserve adjustments	47	2	44	1
Ending Balance June 30, 2020	$87	$5	$81	$3

General Utility Plant

General utility plant of Con Edison and CECONY included $90 million and $85 million, respectively, at June 30, 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 $13 million at June 30, 2020 and $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 June 30, 2020.

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.

In July 2020, PG&E’s plan of reorganization, previously confirmed by the bankruptcy court in June 2020, became effective. The California Public Utilities Commission also approved PG&E’s plan of reorganization and found that it complied with the wildfire fund legislation enacted by California in July 2019. The wildfire fund legislation 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.

The PG&E bankruptcy was an event of default under the PG&E PPAs. Distributions from the related projects to the Clean Energy Businesses were restricted during the pendency of the bankruptcy. As of the effective date of the plan of reorganization, PG&E assumed all of the PG&E PPAs. In July 2020, the Clean Energy Businesses received previously restricted distributions and have resumed distributions for all projects. See “Reconciliation of Cash, Temporary Cash Investments and Restricted Cash,” below.

Also, as a result of PG&E assuming all of the PG&E PPAs and emerging from bankruptcy, the Clean Energy Businesses have received full payment of all past due receivables, and all related project debt with a maturity longer than one year has been reclassified to long-term debt.

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.

~~Table of Contents~~

For the three and ~~nine~~six months ended ~~September~~June 30, ~~2017~~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 June 30,		For the Six Months Ended June 30,
(Millions of Dollars, except per share amounts/Shares in Millions)	2017	2016	2017	2016	2020	2019	2020	2019
Net income	$457	$497	$1,020	$1,039
Net income for common stock					$190	$152	$565	$576
Weighted average common shares outstanding – basic	307.8	304.5	306.2	299.1	334.1	328.3	333.8	325.2
Add: Incremental shares attributable to effect of potentially dilutive securities	1.5	1.4	1.5	1.4	0.9
Adjusted weighted average common shares outstanding – diluted	309.3	305.9	307.7	300.5	335.0	329.2	334.7	326.1
Net Income per common share – basic	$1.48	$1.63	$3.33	$3.47	$0.57	$0.46	$1.69	$1.77
Net Income per common share – diluted	$1.48	$1.62	$3.31	$3.46	$0.57	$0.46	$1.69	$1.77

The computation of diluted EPS for the three and six months ended June 30, 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~~six months ended ~~September~~June 30, ~~2017~~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,				For the Three Months Ended June 30,
	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)	$(33)	$(7)	$(8)	$(14)	$(12)	$(5)	$(5)
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	—
Amounts reclassified from accumulated OCI related to pension plan liabilities, net of tax of $(1) for Con Edison in 2020 (a)(b)					—	1	1	—
Current period OCI, net of taxes	1	1	1	—	—	1	1	—
Ending balance, accumulated OCI, net of taxes	$(26)	$(32)	$(6)	$(8)	$(14)	$(11)	$(4)	$(5)


	For the Nine Months Ended September 30,				For the Six Months Ended June 30,
	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 and 2019 (a)(b)					1	3	2	—
Current period OCI, net of taxes	1	2	1	1	5	5	2	—
Ending balance, accumulated OCI, net of taxes	$(26)	$(32)	$(6)	$(8)	$(14)	$(11)	$(4)	$(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 June 30, 2020 and 2019, cash, temporary cash investments and restricted cash for Con Edison and CECONY were as follows:

~~Table of Contents~~

~~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 June 30,
	Con Edison		CECONY
(Millions of Dollars)	2020	2019	2020	2019
Cash and temporary cash investments	$1,144	$831	$1,096	$786
Restricted cash (a)	201	139	—	—
Total cash, temporary cash investments and restricted cash	$1,345	$970	$1,096	$786

(a)

~~Effective~~

Restricted cash included cash of the Clean Energy Businesses' renewable electric production project subsidiaries ($192 million and $138 million at June 30, 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~~result of the PG&E bankruptcy. During the pendency of the PG&E bankruptcy, cash was not distributed from the related projects to the Clean Energy Businesses. In July 2020, PG&E’s plan ~~approved~~of reorganization became effective. In July 2020, the Clean Energy Businesses received previously restricted distributions and have resumed distributions for all projects. See “Long-Lived and Intangible Assets,” above, and Note C. At June 30, 2020, restricted cash included cash deposits held by the ~~NJBPU goes into effect.~~

~~(b)~~

~~In January 2016, the NJBPU approved RECO’s plan to spend $15.7 million in capital over three years to harden its electric system against storms, the costs~~Clean Energy Businesses’ battery storage business ($9 million). At June 30, 2019, restricted cash included O&R's New Jersey utility subsidiary, Rockland Electric Company transition bond charge collections, net of ~~which RECO, beginning in 2017, is collecting through a customer surcharge.~~principal, interest, trustee and service fees ($1 million).

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, due to the COVID-19 pandemic and signed the "New York State on PAUSE" executive order that closed all non-essential businesses statewide. New York State designated utilities, including CECONY and O&R, as essential businesses that were able to continue a portion of their work during the effectiveness of the PAUSE order. In May 2020, the "New York Forward" plan went into effect. New York Forward is a phased plan to reopen businesses in geographic areas of New York State that meet metrics established by various public health organizations. Since the emergency declaration, and due to economic conditions, the NYSPSC and the Utilities have mitigated the potential impact of the COVID-19 pandemic on the Utilities, their customers and other stakeholders.

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. 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. In June 2020, the state of New York enacted a law prohibiting New York utilities, including CECONY and O&R, from disconnecting residential customers during the COVID-19 state of emergency. In addition, such prohibition will apply for an additional 180 days after the state of emergency ends for residential customers who have experienced a change in financial circumstances due to the COVID-19 pandemic. The law expires on March 31, 2021. For the three and six months ended June 30, 2020, the estimated foregone revenues that were not collected by the Utilities were approximately $20 million and $23 million, respectively, for CECONY and $1.2 million and $1.4 million, respectively, for O&R. See Note K to the Second Quarter Financial Statements. Also in March 2020, the Utilities requested and the NYSPSC granted extensions to file their 2019 Earnings Adjustment Mechanisms (EAMs) reports, which were filed in July 2020. The earned EAM incentives of approximately $46 million and $3 million for CECONY and O&R, respectively, are expected to be recovered from customers over a twelve-month period beginning September ~~2017, RECO,~~2020.

As of June 30, 2020, CECONY deferred, for New York City residential customers, $9 million of higher summer generation capacity supply costs. CECONY estimates that a total of $58 million of higher supply costs will be deferred and expects to recover such costs from November 2020 through April 2021. Also in June 2020, the NYSPSC directed CECONY to implement a summer cooling credit program to help mitigate the cost of staying home and running air conditioning for health-vulnerable low-income customers due to the limited availability of public cooling facilities as a result of the COVID-19 social distancing measures. The NYSPSC further ordered that the estimated $70.6 million cost of the program will be recovered over five years, beginning in January 2021.

with other large utilities in New York State that included a formal request to defer all COVID-19 related costs and for a surcharge mechanism to collect such deferrals based upon the individual utility's need.

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 per month 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). Differences are accrued with interest each month 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 mitigated the potential impact of the COVID-19 pandemic on RECO, its customers and other stakeholders. New Jersey designated utilities, including RECO, as essential businesses that were able to continue a portion of their work. RECO 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.

In July 2020, the NJBPU authorized RECO and other New Jersey utilities to create a COVID-19-related regulatory asset by deferring prudently incurred incremental costs related to COVID-19 beginning on March 9, 2020, and through the later of September 30, 2021, or 60 days after the emergency declaration is no longer in effect. As of June 30, 2020, RECO had not yet deferred any incremental costs related to COVID-19 and such costs are not expected to be material.

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.

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 exercise prosecutorial discretion when addressing events arising during the COVID-19 pandemic. 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 June 30, 2020, the Utilities had not accrued a liability related to this matter.

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 June 30, 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 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 June 30, 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 2019, following the issuance of a NYSPSC staff report on the investigation, the NYSPSC ordered the utilities to show cause why the NYSPSC should not commence a penalty action against them for violating their emergency response plans. In July 2020, CECONY, O&R and NYSPSC Staff executed a settlement agreement, subject to NYSPSC approval, that resolves this matter. At June 30, 2020, CECONY and O&R accrued $5.6 million and $0.85 million, respectively, for the benefit of electric customers related to this matter.

In July 2018, the NYSPSC commenced an investigation into the rupture of a CECONY steam main located on Fifth Avenue and 21st Street in Manhattan. Debris from the 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 commenced an investigation. As of June 30, 2020, with respect to the incident, the company incurred operating costs of $17 million for property damage, clean-up and other response costs and invested $9 million in capital and retirement costs. At June 30, 2020, the company accrued $3 million to an Other current liabilities account related to this matter.

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 ~~an April 21, 2017 Metropolitan Transportation Authority (MTA) subway~~the July 13, 2019 power outage. The order indicated that 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,~~major outage reliability performance provisions of its electric rate plan, as a result of the July 13, 2019 power outage, CECONY 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 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 the company's activities related to the MTA system. In July 2017, the Chairman of the NYSPSC notified the company that the April 21, 2017 subway power outage incident will likely result inrecorded a prudence review of the reasonableness of CECONY's actions and conduct. The order did not commence a prudence review or address cost recovery. Under the New York State Administrative Procedure Act, the order could not remain in effect for more than 90 days without further action by the NYSPSC because it was adopted on an emergency basis. At its October 19, 2017 meeting, the NYSPSC approved another order in this proceeding. The NYSPSC has not yet issued this other order.$10 million negative revenue adjustment at December 31, 2019. The company is unable to estimate the amount or range of its possible ~~costs~~additional loss related to these power outages.

In May 2020, an executive order was issued prohibiting the acquisition, importation, transfer or installation of certain bulk-power system electric equipment that is sourced from foreign adversaries. The scope and effect will be determined by regulations to be issued pursuant to the order. The Companies are unable to predict the impact on them of such regulations.

In August 2020, Tropical Storm Isaias caused significant damage to the Utilities’ electric distribution system and interrupted service to approximately 300,000 CECONY electric customers and approximately 225,000 O&R electric customers. To restore service to their customers and repair their energy systems, the Utilities are incurring operating costs and making capital expenditures, the amount of which the Utilities are unable to estimate at this ~~matter.~~time. The Utilities’ rate plans provide for operating costs and capital expenditures under different provisions. The Utilities expect that most of their operating expenses attributable to Tropical Storm Isaias will be deferred for recovery as a regulatory asset under their electric rate plans. The Utilities’ capital expenditures, up to specified levels, are reflected in rates under their rate plans. The Utilities’ New York electric rate plans include provisions for revenue decoupling, as a result of which delivery revenues generally are not affected by changes in delivery volumes from levels assumed when rates were approved. The provisions of the Utilities’ New York electric rate plans that impose penalties for operating performance provide for exceptions for major storms and catastrophic events beyond the control of the companies, including natural disasters such as hurricanes and floods. In August 2020, New York State Governor Cuomo directed the New York State Department of Public Service to investigate the preparation and performance of New York utilities in connection with Tropical Storm Isaias. The Companies are unable to estimate the amount or range of their possible loss in connection with the storm.

2126

~~Table of Contents~~

Regulatory Assets and Liabilities

Regulatory assets and liabilities at ~~September~~June 30, ~~2017~~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	$2,072	$2,541	$1,947	$2,403
Future income tax	2,419	2,439	2,308	2,325
Environmental remediation costs	803	823	690	711	729	732	648	647
Revenue taxes	341	295	325	280	336	321	322	308
Property tax reconciliation					235	219	230	210
Pension and other postretirement benefits deferrals					229	71	196	47
MTA power reliability deferral					212	248	212	248
Deferred derivative losses	88	48	78	42	142	83	133	76
Pension and other postretirement benefits deferrals	70	38	45	7
System peak reduction and energy efficiency programs					103	131	102	130
Municipal infrastructure support costs	57	44	57	44	72	75	72	75
Deferred storm costs	43	56	—	3	70	77	—	—
Brooklyn Queens demand management program					37	39	37	39
Meadowlands heater odorization project					34	35	34	35
Gate station upgrade project					28	19	28	19
Unamortized loss on reacquired debt	39	43	37	41	24	28	22	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	21	19
Preferred stock redemption	24	25	24	25	22		22
Surcharge for New York State assessment	18	28	16	26
Net electric deferrals	13	24	13	24
Non-wire alternative projects					14		14	14
Workers’ compensation	12	13	12	13	—	3	—	3
O&R transition bond charges	10	15	—	—
Recoverable energy costs	4	42	4	38
Other	113	101	103	85	224	180	212	166
Regulatory assets – noncurrent	6,769	7,024	6,248	6,473	4,606	4,859	4,252	4,487
Deferred derivative losses	81	91	75	86	106	128	93	113
Recoverable energy costs	28	9	25	4	11	—	4	—
Regulatory assets – current	109	100	100	90	117	128	97	113
Total Regulatory Assets	$6,878	$7,124	$6,348	$6,563	$4,723	$4,987	$4,349	$4,600
Regulatory liabilities
Future income tax					$2,323	$2,426	$2,175	$2,275
Allowance for cost of removal less salvage	$798	$755	$671	$641	1,035	989	884	843
TCJA net benefits*					379	471	366	454
Net proceeds from sale of property					159	173	159	173
Net unbilled revenue deferrals					155	199	155	199
Energy efficiency portfolio standard unencumbered funds					88	122	85	118
Pension and other postretirement benefit deferrals	202	193	174	162	72	75	40	46
Net unbilled revenue deferrals	166	145	166	145
Property tax reconciliation	140	178	140	178
System benefit charge carrying charge					56	48	50	44
Property tax refunds					38	45	38	45
Unrecognized other postretirement costs	84	60	84	60	33	9	—	—
BQDM and REV Demo reconciliations					26	27	25	26
Settlement of gas proceedings					22	10	22	10
Sales and use tax refunds					18	8	18	8
Earnings sharing - electric, gas and steam					17	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	224	195	188	163
Regulatory liabilities – noncurrent	1,873	1,905	1,673	1,712	4,652	4,827	4,222	4,427
Refundable energy costs	29		9	5	31	44	8	12
Deferred derivative gains					32	34	31	34
Revenue decoupling mechanism	27	71	27	61	—	24	—	17
Deferred derivative gains	2	28	2	24
Regulatory liabilities – current	58	128	38	90	63	102	39	63
Total Regulatory Liabilities	$1,931	$2,033	$1,711	$1,802	$4,715	$4,929	$4,261	$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~~

~~Table of Contents~~

~~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 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.2050.

The carrying amounts and fair values of long-term debt at ~~September~~June 30, ~~2017~~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	$21,114	$25,183	$19,973	$22,738
CECONY	$16,194	$20,001	$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~~$196 million and ~~$115~~$170 million for Con Edison and CECONY, respectively, as of ~~September~~June 30, ~~2017~~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~~June 30, ~~2017~~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 million and $636~~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 December 31, 2019, long-term debt due within one year included $1,001 million of PG&E-related project debt. At June 30, 2020, due to the ~~fair value~~likelihood of PG&E’s plan of reorganization becoming effective, the company’s PG&E-related non-recourse project debt with a maturity longer than one year ($898 million) was reclassified from long-term debt ~~at September 30, 2017 are classified as Level 2~~due within one year to long-term debt. In July 2020, PG&E’s plan of reorganization became effective, and ~~Level 3, respectively (see Note L). The $636 million~~PG&E assumed all of ~~long-term debt classified as Level 3 is CECONY’s tax-exempt, auction-rate securities for which~~ the ~~market is highly illiquid and there is a lack of observable inputs.~~PG&E PPAs.

Note D —– Short-Term Borrowing

At ~~September~~June 30, ~~2017,~~2020, Con Edison had ~~$356~~$1,813 million of commercial paper outstanding of which ~~$147~~$1,115 million was outstanding under CECONY’s program. The weighted average interest rate at ~~September~~June 30, ~~2017~~2020 was ~~1.3~~0.2 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~~June 30, ~~2017~~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~~June 30, ~~2017~~2020 and December 31, ~~2016, respectively.~~2019.

In July 2020, Con Edison borrowed $820 million pursuant to an April 2020 credit agreement that was amended in June 2020 (as amended, the Supplemental Credit Agreement). Con Edison used the proceeds from the borrowing for general corporate purposes, including repayment of short-term debt bearing interest at variable rates. Pursuant to the Supplemental Credit Agreement, the borrowing bears interest at a variable rate and was converted to a term loan that matures on March 29, 2021 (the “Term Loan”). Con Edison has the option to prepay the Term Loan. Subject to certain exceptions, the Term Loan under the Supplemental Credit Agreement is subject to mandatory prepayment with the net cash proceeds of debt or equity issuances by Con Edison or its non-regulated subsidiaries.

Pursuant to the Supplemental Credit Agreement, upon a change of control of, or upon an event of default by Con Edison, the lenders may declare the Term Loan 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 other material financial obligations (in excess of an aggregate $150 million of debt or derivative obligations other than non-recourse debt) when due or within any applicable grace period; 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.

Note E —– Pension Benefits

Total Periodic Benefit Cost

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

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

2328

~~Table~~



	For the Three Months Ended June 30,
	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 credit	(4)	(4)	(5)	(5)
TOTAL PERIODIC BENEFIT COST	$123	$91	$113	$83
Cost capitalized	(33)	(29)	(32)	(27)
Reconciliation to rate level	(62)	(2)	(59)	(1)
Total expense recognized	$28	$60	$22	$55



	For the Six Months Ended June 30,
	Con Edison		CECONY
(Millions of Dollars)	2020	2019	2020	2019
Service cost – including administrative expenses	$147	$125	$137	$117
Interest cost on projected benefit obligation	275	301	258	282
Expected return on plan assets	(517)	(494)	(490)	(468)
Recognition of net actuarial loss	349	259	331	246
Recognition of prior service credit	(8)	(9)	(10)	(10)
TOTAL PERIODIC BENEFIT COST	$246	$182	$226	$167
Cost capitalized	(64)	(55)	(61)	(52)
Reconciliation to rate level	(126)	(7)	(121)	(6)
Total expense recognized	$56	$120	$44	$109

Components of ~~Contents~~

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.

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~~June 30, ~~2017, the Companies~~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~~six months of ~~2017,~~2020, the Companies contributed ~~$446~~$79 million to the pension plans, ~~(of~~of which ~~$409~~$78 million was ~~contributed~~made by ~~CECONY).~~CECONY. CECONY also contributed ~~$14~~$18 million to ~~its~~the external trust for its non-qualified supplemental ~~plans.~~plan.

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~~six months ended ~~September~~June 30, ~~2017~~2020 and ~~2016~~2019 were as follows:



	For the Three Months Ended June 30,
	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)	3		(2)	3	(2)
Recognition of prior service credit	(1)		(1)	—	—
TOTAL PERIODIC OTHER POSTRETIREMENT BENEFIT COST/(CREDIT)		$—	$(4)	$1	$(4)
Cost capitalized	(2)		(2)	(2)	(2)
Reconciliation to rate level	2		3	—	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 the Nine Months Ended September 30,				For the Six Months Ended June 30,
	Con Edison		CECONY		Con Edison			CECONY
(Millions of Dollars)	2017	2016	2017	2016	2020		2019	2020	2019
Service cost	$15	$13	$10		$11		$9	$8	$6
Interest cost on accumulated other postretirement benefit obligation	34	36	28	30	19		22	16	18
Expected return on plan assets	(52)	(58)	(45)	(50)	(33)		(33)	(27)	(27)
Recognition of net actuarial loss/(gain)	2	4	(2)	2	30		(4)	29	(5)
Recognition of prior service cost	(13)	(15)	(9)	(11)
TOTAL PERIODIC OTHER POSTRETIREMENT BENEFIT COST	$(14)	$(20)	$(18)	$(19)
Recognition of prior service credit					(2)		(2)	(1)	(1	)
TOTAL PERIODIC OTHER POSTRETIREMENT BENEFIT COST/(CREDIT)					$25		$(8)	$25	$(9)
Cost capitalized	6	5	7	5	(5)		(4)	(3)	(3)
Reconciliation to rate level	(3)	20	(1)	19	(20)		7	(24)	4
Cost charged to operating expenses	$(11)	$5	$(12)	$5
Total credit recognized						$—	$(5)	$(2)	$(8)

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

~~Table of Contents~~

Expected Contributions

~~During the first nine months~~Based on estimates as of ~~2017,~~June 30, 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.

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~~June 30, ~~2017~~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	$633	$640	$554	$561
Other Superfund Sites	101	94	100	93
Total	$734	$734	$654	$654
Regulatory assets	$729	$732	$648	$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~~six months ended ~~September~~June 30, ~~2017~~2020 and ~~2016~~2019 were as follows:



	For the Three Months Ended June 30,
	Con Edison		CECONY
(Millions of Dollars)	2020	2019	2020	2019
Remediation costs incurred	$3	$8	$3	$6

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



	For the Six Months Ended June 30,
	Con Edison		CECONY
(Millions of Dollars)	2020	2019	2020	2019
Remediation costs incurred	$8	$11	$8	$8

~~Table of Contents~~

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~~six months ended ~~September~~June 30, ~~2017. Con Edison~~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 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~~June 30, ~~2017,~~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~~June 30, ~~2017~~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	$75		$78	$70		$73
Regulatory assets – workers’ compensation		$—	$3		$—	$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

~~Table of Contents~~

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~~June 30, ~~2017,~~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~~$1,944 million and ~~$2,370~~$1,831 million at ~~September~~June 30, ~~2017~~2020 and December 31, ~~2016,~~2019, respectively.

A summary, by type and term, of Con Edison’s total guarantees under these agreements at ~~September~~June 30, ~~2017~~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	447	48	233		728
Renewable electric production projects	207	9	382		598
Other	70	—	—		70
Total	$1,086	$243	$615		$1,944

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 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.

~~Table of Contents~~

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 and six months ended June 30, 2020 and 2019 were as follows:



	For the Three Months Ended June 30,
	Con Edison				CECONY
(Millions of Dollars)	2020		2019		2020		2019
Operating lease cost		$21		$21		$16		$16
Operating lease cash flows		$8		$9		$4		$4



	For the Six Months Ended June 30, 2020
	Con Edison				CECONY
(Millions of Dollars)	2020		2019		2020		2019
Operating lease cost		$42		$41		$32		$32
Operating lease cash flows		$16		$17		$8		$8

As of June 30, 2020, assets recorded as finance leases were $3 million for Con Edison and $2 million 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 and six months ended June 30, 2020 and 2019, finance lease costs and cash flows for Con Edison and CECONY were immaterial.

Right-of-use assets obtained in exchange for operating lease obligations for Con Edison and CECONY were $5 million and $1 million, respectively, for the three and six months ended June 30, 2020.

Other information related to leases for Con Edison and CECONY at June 30, 2020 and December 31, 2019 were as follows:



	Con Edison		CECONY
	2020	2019	2020	2019
Weighted Average Remaining Lease Term:
Operating leases	19.2 years	19.8 years	13.5 years	14.0 years
Finance leases	7.5 years	12.2 years	4.4 years	2.4 years
Weighted Average Discount Rate:
Operating leases	4.3%	4.3%	3.6%	3.6%
Finance leases	1.8%	3.5%	1.4%	4.1%

Future minimum lease payments under non-cancellable leases at June 30, 2020 were as follows:



(Millions of Dollars)	Con Edison			CECONY
Year Ending June 30,	Operating Leases	Finance Leases		Operating Leases	Finance Leases
2021	$80	$1		$60	$1
2022	76	1		57	1
2023	73	—		56	—
2024	73	—		56	—
2025	74	—		57	—
All years thereafter	993	1		504	—
Total future minimum lease payments	$1,369	$3		$790	$2
Less: imputed interest	(475)	—		(167)	—
Total	$894	$3		$623	$2
Reported as of June 30, 2020
Operating lease liabilities (current)	$83		$—	$64		$—
Operating lease liabilities (noncurrent)	811	—		559	—
Other current liabilities	—	1		—	1
Other noncurrent liabilities	—	2		—	1
Total	$894	$3		$623	$2

At June 30, 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 and six months ended June 30, 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 in the first quarter of 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~~$9 million for the three months ended ~~September~~June 30, ~~2017~~2020 from ~~$314~~$19 million for the three months ended ~~September~~June 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.~~2019. The decrease in ~~Con Edison's effective~~income tax ~~rate~~expense is primarily due to ~~lower state~~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 ~~a decrease in~~higher income before income tax ~~benefits~~expense, the absence of the amortization of excess deferred state income taxes, higher state income taxes and higher allowance for ~~plant-related flow through items.~~uncollectible accounts.

CECONY’s income tax expense ~~increased~~decreased to ~~$242~~$7 million for the three months ended ~~September~~June 30, ~~2017~~2020 from ~~$226~~$27 million for the three months ended ~~September~~June 30, ~~2016. CECONY's effective~~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 the absence of the amortization of excess deferred state income taxes and higher allowance for uncollectible accounts.

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~~June 30, ~~2017~~2020 and ~~2016 was 38 percent and 37 percent, respectively. The increase in CECONY's effective tax rate~~2019 is ~~primarily due to a decrease in tax benefits for plant-related flow through items and lower research and development credits, offset in part by lower state income taxes.~~as follows:



	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	6		6		6		5
Amortization of excess deferred federal income taxes	(20	)	(9	)	(25	)	(9	)
Taxes attributable to non-controlling interest	(2	)	(4	)	—		—
Cost of removal	4		2		5		2
Other plant-related items	(3	)	(1	)	(4	)	(1	)
Allowance for uncollectible accounts	1		—		1		—
Renewable energy credits	(4	)	(4	)	—		—
Amortization of excess deferred state income taxes	—		(2	)	—		(2	)
Other	1		1		—		(1	)
Effective tax rate	4	%	10	%	4	%	15	%

Con Edison’s income tax expense decreased to ~~$599~~$64 million for the ~~nine~~six months ended ~~September~~June 30, ~~2017~~2020 from ~~$602~~$127 million for the ~~nine~~six months ended ~~September~~June 30, ~~2016. Con Edison's effective~~2019. The decrease in income tax expense is primarily due to lower income before income tax expense, an increase in the amortization of excess deferred federal income taxes due to CECONY’s new rate ~~for~~plan beginning in the ~~nine months ended September 30, 2017~~first quarter of 2020, higher renewable energy credits and ~~2016 was 37 percent. The effective~~a $4 million income tax ~~rate remained unchanged~~benefit due to the ability to carryback a net operating loss from the 2018 tax year to the 2013 tax year as ~~lower~~

allowed under the CARES Act, offset in part by the absence of the amortization of excess deferred state income taxes ~~were offset by a decrease in tax benefits~~and higher allowance for ~~plant-related flow through items.~~uncollectible accounts.

CECONY’s income tax expense ~~increased~~decreased to ~~$551~~$102 million for the ~~nine~~six months ended ~~September~~June 30, ~~2017~~2020 from ~~$491~~$151 million for the ~~nine~~six months ended ~~September~~June 30, ~~2016. CECONY's effective~~2019. The decrease in income 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~~expense is primarily due to ~~a decrease~~lower income before income tax expense, lower state income taxes and an increase in ~~tax benefits for plant-related flow through items and lower research and development tax credits,~~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 ~~lower~~the absence of the amortization of excess deferred state income ~~taxes.~~taxes and higher allowance for uncollectible accounts.

~~Con Edison anticipates a~~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 six months ended June 30, 2020 and 2019 is as follows:



	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	5		5		5		5
Amortization of excess deferred federal income taxes	(12	)	(4	)	(12	)	(4	)
Taxes attributable to non-controlling interest	(1	)	(1	)	—		—
Cost of removal	2		1		2		1
Other plant-related items	(2	)	(1	)	(2	)	—
Renewable energy credits	(3	)	(2	)	—		—
CARES Act NOL carryback	(1	)	—		—		—
Amortization of excess deferred state income taxes	—		(1	)	—		(1	)
Other	1		(1	)	1		(1	)
Effective tax rate	10	%	17	%	15	%	21	%

CECONY deferred as regulatory liabilities its estimated net benefits for its electric service under the TCJA for the six months ended June 30, 2019. The net benefits include the revenue requirement impact of the reduction in the corporate federal ~~consolidated net operating loss~~income tax rate to 21 percent, the elimination for ~~2017, primarily due~~utilities of bonus depreciation and the amortization of excess deferred federal income taxes the utilities collected from customers that will not need to ~~bonus depreciation. Con Edison expects~~be paid to ~~carryback a portion~~the Internal Revenue Service under the TCJA. See “Other Regulatory Matters” in Note B.

Under CECONY’s new electric rate plan that began in the first quarter of 2020, the deferral of its ~~2017~~ net ~~operating loss to recover $19 million~~benefits for its electric service ceased and is included in its new rates. Additionally, the amortization of the unprotected excess deferred federal income ~~tax. The remaining 2017 net operating loss, as well as general business~~taxes for its electric and gas services is being amortized over a five-year period, which increased the tax ~~credits generated~~benefit 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.~~first six months of 2020.

Uncertain Tax Positions

At ~~September~~June 30, ~~2017,~~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 $1 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 million, which, if recognized, would reduce CECONY’s effective tax rate.~~immaterial. 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~~six months ended ~~September~~June 30, ~~2017,~~2020, the Companies recognized an immaterial amount of interest expense and no penalties for uncertain tax positions in their consolidated income statements. At ~~September~~June 30, ~~2017~~2020 and December 31, ~~2016,~~2019, the Companies recognized an immaterial amount of accrued interest on their consolidated balance sheets.

Note K – Revenue Recognition

The following table presents, for the three and six months ended June 30, 2020 and 2019, revenue from contracts with customers as defined in ASC Topic 606, "Revenue from Contracts with Customers," as well as additional revenue from sources other than contracts with customers, disaggregated by major source.



	For the Three Months Ended June 30, 2020				For the Three Months Ended June 30, 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	$1,781		$64	$1,845	$1,751		$82		$1,833
Gas	399		17	416	400		8		408
Steam	81		3	84	86		4		90
Total CECONY	$2,261		$84	$2,345	$2,237		$94		$2,331
O&R
Electric	139		(1)	138	140		(2)		138
Gas	37		—	37	39		2		41
Total O&R	$176		$(1)	$175	$179			$—	$179
Clean Energy Businesses
Renewables	178	(b)	—	178	171	(b)	—		171
Energy services	11		—	11	16		—		16
Other	—		9	9	—		46		46
Total Clean Energy Businesses	$189		$9	$198	$187		$46		$233
Con Edison Transmission	1		—	1	1		—		1
Total Con Edison	$2,627		$92	$2,719	$2,604		$140		$2,744

(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 $2 million and $4 million for the three months ended June 30, 2020 and 2019, respectively, of revenue related to engineering, procurement and construction services.



	For the Six Months Ended June 30, 2020				For the Six Months Ended June 30, 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	$3,514		$102	$3,616	$3,465		$165	$3,630
Gas	1,232		18	1,250	1,310		20	1,330
Steam	325		9	334	402		9	411
Total CECONY	$5,071		$129	$5,200	$5,177		$194	$5,371
O&R
Electric	267		7	274	283		—	283
Gas	130		4	134	153		1	154
Total O&R	$397		$11	$408	$436		$1	$437
Clean Energy Businesses
Renewables	292	(b)	—	292	278	(b)	—	278
Energy services	22		—	22	39		—	39
Other	—		30	30	—		133	133
Total Clean Energy Businesses	$314		$30	$344	$317		$133	$450
Con Edison Transmission	2		—	2	2		—	2
Other (c)	—		(1)	(1)	—		(2)	(2)
Total Con Edison	$5,784		$169	$5,953	$5,932		$326	$6,258


(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 $4 million and $6 million for the six months ended June 30, 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)	58	31		44	—
Subtractions (c)	65	1	(d)	38	2	(d)
Ending balance as of June 30,	$22	$47		$35	$18

(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 and $2 million were included in the balances as of January 1, 2020 and 2019, respectively.

As of June 30, 2020, the aggregate amount of the remaining fixed performance obligations of the Clean Energy Businesses under contracts with customers for energy services is $70 million, of which $34 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 estimated amount of these foregone revenues for the three months ended June 30, 2020 was $21 million and $20 million for Con Edison and CECONY, respectively. The estimated amount of these foregone revenues for the six months ended June 30, 2020 was $24 million and $23 million for Con Edison and CECONY, respectively. 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.

Note ~~J —~~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~~six months ended ~~September~~June 30, ~~2017~~2020 and ~~2016~~2019 were as follows:


	For the Three Months Ended September 30,										For the Three Months Ended June 30,
	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	$1,845	$1,833	$4		$5		$301	$261	$318	$314
Gas	268	208	2		1		47	41	(12)	(28)	416	408	2				72	56	105	94
Steam	62	63	19		22		21	20	(43)	(47)	84	90	19		16		23	22	(34)	(32)
Consolidation adjustments	—	—	(25)		(28)		—	—	—	—	—	—	(25)		(23)		—	—	—	—
Total CECONY	$2,799	$2,828		$—		$—	$300	$278	$800	$766	$2,345	$2,331		$—		$—	$396	$339	$389	$376
O&R
Electric	$206	$213		$—		$—	$13	$12	$56	$55	$138			$—		$—	$16	$15	$13	$16
Gas	28	27	—		—		5		(11)	(7)	37	41	—		—		7	6	(3)
Total O&R	$234	$240		$—		$—	$18	$17	$45	$48	$175	$179		$—		$—	$23	$21	$10	$13
Clean Energy Businesses	$177	$350		$—	$(2)		$19	$11	$29	$125	$198	$233		$—		$—	$57	$58	$82	$72
Con Edison Transmission	1	—	—		—		—	—	(2)	(1)	1		—		—		—	—	(1)	(2)
Other (a)	—	(1)	—		2		—	(1)	1	2	—	—	—		—		—	—	(1)
Total Con Edison	$3,211	$3,417		$—		$—	$337	$305	$873	$940	$2,719	$2,744		$—		$—	$476	$418	$479	$458

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.

2938



	For the Six Months Ended June 30,
	Operating revenues		Inter-segment revenues				Depreciation and amortization		Operating income/(loss)
(Millions of Dollars)	2020	2019	2020		2019		2020	2019	2020	2019
CECONY
Electric	$3,616	$3,630	$9		$9		$598	$518	$600	$571
Gas	1,250	1,330	3		3		143	111	474	438
Steam	334	411	38		35		45	44	58	92
Consolidation adjustments	—	—	(50)		(47)		—	—	—	—
Total CECONY	$5,200	$5,371		$—		$—	$786	$673	$1,132	$1,101
O&R
Electric	$274	$283		$—		$—	$32	$30	$27	$31
Gas	134	154	—		—		13	12	38	36
Total O&R	$408	$437		$—		$—	$45	$42	$65	$67
Clean Energy Businesses	$344	$450		$—		$—	$115	$116	$96	$83
Con Edison Transmission	2	2	—		—		—	—	(3)	(3)
Other (a)	(1)	(2)	—		—		—	—	(3)	(4)
Total Con Edison	$5,953	$6,258		$—		$—	$946	$831	$1,287	$1,244

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

~~Table of Contents~~

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.

The fair values of the Companies’ ~~commodity~~ derivatives including the offsetting of assets and liabilities on the consolidated balance sheet at ~~September~~June 30, ~~2017~~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)	$57	$32	$89	(b)	$60	$(3)	$57	(b)
Noncurrent	64	(61)	3		49	(43)	6		15	(11)	4		19	(13)	6	(d)
Total fair value of derivative assets	$141	$(128)	$13		$130	$(107)	$23		$72	$21	$93		$79	$(16)	$63
Fair value of derivative liabilities
Current	$(141)	$71	$(70)		$(138)	$61	$(77)		$(137)	$(33)	$(170)	(c)	$(140)	$17	$(123)	(d)
Noncurrent	(143)	60	(83)		(91)	52	(39)	(c)	(255)	13	(242)	(c)	(122)	16	(106)	(d)
Total fair value of derivative liabilities	$(284)	$131	$(153)		$(229)	$113	$(116)		$(392)	$(20)	$(412)		$(262)	$33	$(229)
Net fair value derivative assets/(liabilities)	$(143)	$3	$(140)	(b)	$(99)	$6	$(93)	(b) (c)	$(320)	$1	$(319)		$(183)	$17	$(166)
CECONY
Fair value of derivative assets
Current	$55	$(53)	$2	(b)	$52	$(45)	$7	(b)	$41	$(22)	$19	(b)	$39	$(6)	$33	(b)
Noncurrent	57	(55)	2		41	(35)	6		13	(9)	4		17	(12)	5
Total fair value of derivative assets	$112	$(108)	$4		$93	$(80)	$13		$54	$(31)	$23		$56	$(18)	$38
Fair value of derivative liabilities
Current	$(116)	$57	$(59)		$(111)	$45	$(66)		$(93)	$24	$(69)		$(100)	$19	$(81)
Noncurrent	(127)	54	(73)		(77)	44	(33)		(138)	10	(128)		(80)	16	(64)
Total fair value of derivative liabilities	$(243)	$111	$(132)		$(188)	$89	$(99)		$(231)	$34	$(197)		$(180)	$35	$(145)
Net fair value derivative assets/(liabilities)	$(131)	$3	$(128)	(b)	$(95)	$9	$(86)	(b)	$(177)	$3	$(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~~June 30, ~~2017~~2020 and December 31, ~~2016,~~2019, margin deposits for Con Edison ($57 million and $7$9 million, respectively) and CECONY ($56 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 $(21) million in current liabilities and $(108) million in noncurrent liabilities. At June 30, 2020, the Clean Energy Businesses had interest rate swaps with notional amounts of $892 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.

~~Table of Contents~~

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~~six months ended ~~September~~June 30, ~~2017~~2020 and ~~2016:~~2019:


		For the Three Months Ended September 30,										For the Three Months Ended June 30,
		Con Edison					CECONY					Con Edison		CECONY
(Millions of Dollars)	Balance Sheet Location	2017			2016		2017		2016		Balance Sheet Location	2020	2019	2020		2019
Pre-tax gains/(losses) deferred in accordance with accounting rules for regulated operations:	Pre-tax gains/(losses) deferred in accordance with accounting rules for regulated operations:										Pre-tax gains/(losses) deferred in accordance with accounting rules for regulated operations:
Current	Deferred derivative gains	$(4)			$(1)		$(3)				Deferred derivative gains	$(2)	$(16)	$(2)		$(15)
Noncurrent	Deferred derivative gains	1			(2)		1		—		Deferred derivative gains	(6)	(2)	(6)		—
Total deferred gains/(losses)		$(3)			$(3)		$(2)		$(3)			$(8)	$(18)	$(8)		$(15)
Current	Deferred derivative losses	$(11)			$(19)		$(9)		$(18)		Deferred derivative losses	$36	$(36)	$32		$(34)
Current	Recoverable energy costs	(40)			(39)		(38)		(35)		Recoverable energy costs	(45)	(41)	(40)		(37)
Noncurrent	Deferred derivative losses	(12)			(17)		(8)		(14)		Deferred derivative losses	(13)	(74)	(15)		(68)
Total deferred gains/(losses)		$(63)			$(75)		$(55)		$(67)			$(22)	$(151)	$(23)		$(139)
Net deferred gains/(losses)		$(66)			$(78)		$(57)		$(70)			$(30)	$(169)	$(31)		$(154)
	Income Statement Location										Income Statement Location
Pre-tax gains/(losses) recognized in income	Pre-tax gains/(losses) recognized in income										Pre-tax gains/(losses) recognized in income
	Purchased power expense		$—		$(37)	(b)		$—		$—	Non-utility revenue	$1	$7		$—		$—
	Gas purchased for resale	(47)			(38)		—		—		Other operations and maintenance expense	2	—	2		—
	Non-utility revenue	5		(a)	(2)	(b)	—		—		Other interest expense	(4)	(24)	—		—
Total pre-tax gains/(losses) recognized in income	Total pre-tax gains/(losses) recognized in income	$(42)			$(77)			$—		$—	Total pre-tax gains/(losses) recognized in income	$(1)	$(17)	$2			$—


~~(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 Six Months Ended June 30,
		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	$(3)	$(12)	$(3)		$(11)
Noncurrent	Deferred derivative gains	(3)	(8)	(3)		(6)
Total deferred gains/(losses)		$(6)	$(20)	$(6)		$(17)
Current	Deferred derivative losses	$22	$(39)	$20		$(34)
Current	Recoverable energy costs	(140)	(59)	(126)		(51)
Noncurrent	Deferred derivative losses	(58)	(100)	(58)		(95)
Total deferred gains/(losses)		$(176)	$(198)	$(164)		$(180)
Net deferred gains/(losses)		$(182)	$(218)	$(170)		$(197)
	Income Statement Location
Pre-tax gains/(losses) recognized in income
	Gas purchased for resale	$(3)	$(2)		$—		$—
	Non-utility revenue	5	15	—		—
	Other operations and maintenance expense	(5)	1	(5)		1
	Other interest expense	(89)	(34)	—		—
Total pre-tax gains/(losses) recognized in income		$(92)	$(20)	$(5)		$1

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).

~~Table of Contents~~

The following table presents the hedged volume of Con Edison’s and CECONY’s commodity derivative transactions at ~~September~~June 30, ~~2017:~~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	33,140,975	39,561	286,817,088	9,744,000
CECONY	30,492,575	3,000	158,500,000	672,000	30,767,675	33,900	268,660,000	9,744,000


(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~~June 30, ~~2017,~~2020, Con Edison and CECONY had ~~$80~~$222 million and $8$19 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~~$94 million with ~~investment-grade counterparties, $23~~independent system operators, $57 million with non-investment grade/non-rated counterparties, ~~$19~~$57 million with ~~independent system operators~~investment-grade counterparties and ~~$15~~$14 million with commodity exchange brokers. CECONY’s net credit exposure consisted of $7$10 million with commodity exchange brokers, ~~and $1~~$9 million with investment-grade counterparties and an immaterial amount with 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.

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~~June 30, ~~2017:~~2020:


(Millions of Dollars)	Con Edison (a)		CECONY (a)		Con Edison (a)		CECONY (a)
Aggregate fair value – net liabilities	$148		$131		$195		$179
Collateral posted	61		56		123		111
Additional collateral (b) (downgrade one level from current ratings)	23		22		15		9
Additional collateral (b) (downgrade to below investment grade from current ratings)	101	(c)	88	(c)	84	(c)	67	(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 $20 million of additional collateral ~~of $11 million~~ at ~~September~~June 30, ~~2017.~~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~~June 30, ~~2017,~~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~~$37 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.

~~Table of Contents~~

Assets and liabilities measured at fair value on a recurring basis as of ~~September~~June 30, ~~2017~~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	$14	$44	$2	$41	$101	$4	$61	$2	$4		$71
Interest rate swaps (a)(b)(c)												—	—	—	—	—	—	1	—	—		1
Other (a)(b)(d)	271	118	—	—	389	222	111	—		—	333	375	116	—	—	491	353	125	—	—		478
Total assets	$277	$146	$2	$(18)	$407	$236	$144	$7		$(24)	$363	$389	$160	$2	$41	$592	$357	$187	$2	$4		$550
Derivative liabilities:
Commodity (a)(b)(c)	$2	$155	$22	$(26)	$153	$4	$144	$6		$(38)	$116	$12	$221	$16	$33	$282	$18	$174	$18	$(22)		$188
Interest Rate Swap (a)(b)(c)	—	—	—	—	—	—	1	—		—	1
Interest rate swaps (a)(b)(c)												—	130	—	—	130	—	41	—	—		41
Total liabilities	$2	$155	$22	$(26)	$153	$4	$145	$6		$(38)	$117	$12	$351	$16	$33	$412	$18	$215	$18	$(22)		$229
CECONY
Derivative assets:
Commodity (a)(b)(c)	$5	$12	$1	$(9)	$9	$10	$19	$1		$(10)	$20	$11	$31	$1	$(15)	$28	$3	$42	$1		$—	$46
Other (a)(b)(d)	248	113	—	—	361	200	106	—		—	306	356	111	—	—	467	333	119	—	—		452
Total assets	$253	$125	$1	$(9)	$370	$210	$125	$1		$(10)	$326	$367	$142	$1	$(15)	$495	$336	$161	$1		$—	$498
Derivative liabilities:
Commodity (a)(b)(c)	$1	$133	$15	$(17)	$132	$1	$124		$—	$(26)	$99	$10	$201	$8	$(22)	$197	$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~~six months ended ~~September~~June 30, ~~2017~~2020. Con Edison and ~~for~~CECONY had $24 million and $22 million, respectively, 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~~June 30, ~~2017~~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.

~~Table of Contents~~

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 June 30, 2020	Valuation Techniques	Unobservable Inputs	Range
	(Millions of Dollars)	Valuation Techniques	Unobservable Inputs	Range
Con Edison – Commodity
Electricity	$(1)	Discounted Cash Flow	Forward energy prices (a)	$21.00 - $62.76 per MWh
	(14)	Discounted Cash Flow	Forward capacity prices (a)	$0.30 - $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)	$(24.58) - $46.10 per MWh
Total Con Edison—Commodity	$(14)
CECONY – Commodity
Electricity	$(1)	Discounted Cash Flow	Forward energy prices (a)	$23.02 - $62.76 per MWh
	(7)	Discounted Cash Flow	Forward capacity prices (a)	$0.30 - $8.62 per kW-month
Transmission Congestion Contracts	1	Discounted Cash Flow	Inter-zonal forward price curves adjusted for historical zonal losses (b)	$0.32 - $1.51 per MWh
Total CECONY—Commodity	$(7)


(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~~June 30, ~~2017~~2020 and ~~2016~~2019 and classified as Level 3 in the fair value hierarchy:



	For the Three Months Ended June 30,
	Con Edison		CECONY
(Millions of Dollars)	2020	2019	2020	2019
Beginning balance as of April 1,	$(13)	$(19)	$(6)	$(5)
Included in earnings	(2)	—	(1)	1
Included in regulatory assets and liabilities	—	(27)	1	(25)
Settlements	1	—	(1)	(1)
Ending balance as of June 30,	$(14)	$(46)	$(7)	$(30)

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 Six Months Ended June 30,
	Con Edison		CECONY
(Millions of Dollars)	2020	2019	2020	2019
Beginning balance as of January 1,	$(16)	$(13)	$(6)	$(2)
Included in earnings	(7)	(4)	(3)	1
Included in regulatory assets and liabilities	1	(31)	(1)	(28)
Settlements	8	2	3	(1)
Ending balance as of June 30,	$(14)	$(46)	$(7)	$(30)

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

~~Table of Contents~~

~~September~~ June 30, ~~2017~~2020 and ~~2016, respectively.~~2019. For the ~~nine~~six months ended ~~September~~June 30, ~~2017~~2020 and ~~2016,~~2019, the change in fair value relating to Level 3 commodity ~~derivative~~derivatives assets and liabilities is included in non-utility revenues ~~(immaterial for both periods) and purchased power costs ($2~~($1 million gain and $2$1 million loss) on the consolidated income ~~statement, respectively.~~statement.

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 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~~sold pursuant to a long-term power purchase agreement. Con Edison's earnings from Texas Solar 4 for the three and ~~is consolidated~~six months ended June 30, 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 June 30, 2020, the hypothetical liquidation at book value (HLBV) method of accounting for the Tax Equity Projects resulted in $12 million of income ($9 million, after tax) for the tax equity investor and $4 million of income ($3 million, after tax) for Con Edison. For the three months ended June 30, 2019, the HLBV method of accounting for the Tax Equity Projects resulted in $28 million of income ($21 million, after tax) for the tax equity investor and $15 million loss ($12 million, after tax) for Con Edison. For the six months ended June 30, 2020, the HLBV method of accounting for the Tax Equity Projects resulted in $29 million of income ($22 million, after tax) for the tax equity investor and a $10 million loss ($8 million, after tax) for Con Edison. For the six months ended June 30, 2019, the HLBV method of accounting for the Tax Equity Projects resulted in $49 million of income ($37 million, after tax) for the tax equity investor and a $34 million loss ($26 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 June 30, 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)	$288	$293	$453	$461
Other assets	45	40	189	128
Total assets (a)	$333	$333	$642	$589
Other liabilities	15	17	69	18
Total liabilities (b)	$15	$17	$69	$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 $73 million and $62 million at June 30, 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 $140 million and $126 million at June 30, 2020 and December 31, 2019, respectively.


(f)	Non-utility property is reduced by accumulated depreciation of $13 million for Great Valley Solar and $23 million for Copper Mountain - Mesquite Solar at June 30, 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.

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

~~Table of Contents~~

~~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

~~Table of Contents~~

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.

~~Table of Contents~~

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~~Second 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~~Second Quarter Financial Statements and the notes thereto, 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~~Report on Form 10-Q for the quarterly ~~periods~~period ended March 31, ~~2017 and June 30, 2017~~2020 (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.



		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.

~~Table of Contents~~

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,~~January 2019, due to gas supply constraints, CECONY filed notice with the NYSPSC to establish a temporary moratorium beginning in March 2019 on new applications for firm gas service in most of Westchester County. In July 2020, the company filed a gas planning analysis with the NYSPSC that stated the moratorium is expected to be lifted when increased pipeline capacity is achieved upon completion of the Tennessee pipeline’s 300L East project or peak demand is reduced through efficiency and other demand side reductions to a level that would enable the company to lift the moratorium. Assuming timely regulatory approvals, the Tennessee pipeline project is expected to be completed by November 2023.

In June 2020, CECONY 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~~1.5 percent (for ~~2017~~2020 to ~~2021)~~2024) to ~~1.6~~approximately 1.4 percent (for ~~2018~~2021 to ~~2022)~~2025). The decrease reflects ~~among other things, that~~the negative impact the current economy is expected to have on large new construction as well as the projected number of applications for firm gas service in ~~rolling the forecast forward a year, another year~~CECONY's service territory. The decrease also reflects an expected increase in customers’ energy efficiency measures and electrification of ~~oil-to-gas conversions has been completed and fewer opportunities to convert remain.~~space heating.

Steam

CECONY operates the largest steam distribution system in the United States by producing and delivering approximately ~~19,500~~17,837 MMlb of steam annually to approximately ~~1,640~~1,584 customers in parts of Manhattan.

In May 2020, CECONY's five-year forecast of average annual change in the peak steam demand in its service area at design conditions remained unchanged at approximately (0.4) percent (for 2021 to 2025).

Collective Bargaining Agreement

In June 2020, CECONY reached a four-year collective bargaining agreement with its largest union covering approximately 7,100 employees, effective June 21, 2020.

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.

In June 2020, O&R decreased its five-year forecast of average annual growth of the peak gas demand in its service area at design conditions from approximately 0.7 percent (for 2020 to 2024) to approximately 0.2 percent (for 2021 to 2025). The decrease reflects an expected increase in customers' energy efficiency measures and electrification of space heating.

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.

~~Table of Contents~~

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~~12.1 percent interest (that is expected to be reduced below 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 June 30, 2020						For the Six Months Ended June 30, 2020						At June 30, 2020
(Millions of Dollars, except percentages)	Operating Revenues			Net Income			Operating Revenues			Net Income			Assets			Operating Revenues			Net Income for Common Stock			Operating Revenues			Net Income for Common Stock			Assets
CECONY	$2,799	87	%	$401	88	%	$7,948	88	%	$883	87	%	$41,647	85	%	$2,345	86	%	$152	80	%	$5,200	87	%	$558	99	%	$47,324	80	%
O&R	234	7		22	5		667	7		53	5		2,832	6		175	7		(2)	(1	)	408	7		29	5		3,009	5
Total Utilities	3,033	94		423	93		8,615	95		936	92		44,479	91		2,520	93		150	79		5,608	94		587	104		50,333	85
Clean Energy Businesses (a)	177	6		26	5		460	5		54	5		2,811	6		198	7		34	18		344	6		(49)	(9	)	6,719	11
Con Edison Transmission	1	—		9	2		1	—		25	2		1,210	2		1	—		14	7		2	—		28	5		1,640	3
Other (b)	—	—		(1)	—		(4)	—		5	1		746	1		—	—		(8)	(4	)	(1)	—		(1)	—		389	1
Total Con Edison	$3,211	100	%	$457	100	%	$9,072	100	%	$1,020	100	%	$49,246	100	%	$2,719	100	%	$190	100	%	$5,953	100	%	$565	100	%	$59,081	100	%

(a)

Net income for common stock from the Clean Energy Businesses ~~includes~~ for the ~~nine~~three and six months ended ~~September~~June 30, ~~2017 $1~~2020 includes $(2) million and $(65) million, respectively, of net after-tax ~~gain related~~mark-to-market losses and reflects $9 million (after-tax) and $22 million (after-tax), respectively, of income attributable to the ~~sale~~non-controlling interest of a ~~development stage solar~~tax equity investor in renewable electric production ~~project (see~~projects accounted for under the HLBV method of accounting. See Note O to the ~~Third~~Second Quarter Financial ~~Statements). Also includes for the three and nine months ended September 30, 2017 $4 million and $1 million of net after-tax mark-to-market gains, respectively.~~Statements.


(b)	Other includes parent company and consolidation adjustments.

Coronavirus Disease 2019 (COVID-19) Impacts

The Companies continue to respond to the Coronavirus Disease 2019 (COVID-19) global pandemic by reducing the potential risks posed to employees, customers and other stakeholders by its spread. The Companies continue to employ an incident command structure led by a pandemic planning team. The Companies support employee and facility hygiene through mandatory pre-entry symptom surveys for employees arriving at critical locations, regular cleaning and disinfecting of all work and common areas, promoting social distancing, imposing travel limitations on employees and directing employees to work remotely whenever possible. Employees who test positive for COVID-19 are directed to quarantine at home and are closely evaluated for close, prolonged contact with other employees that would require those 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. The Utilities continue to provide critical electric, gas and steam service to customers during the pandemic. Additional safety protocols have been implemented to protect employees, customers and the public, when work at customer premises is required.

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

New York State Regulation

who have experienced a change in financial circumstances due to the COVID-19 pandemic. The law expires on March 31, 2021. For the three and six months ended June 30, 2020, the estimated foregone revenues that were not collected by the Utilities were approximately $20 million and $23 million, respectively, for CECONY and $1.2 million and $1.4 million, respectively, for O&R. Also in March 2020, the Utilities requested and the NYSPSC granted extensions to file their 2019 Earnings Adjustment Mechanisms (EAMs) reports, which were filed in July 2020. The earned EAM incentives of approximately $46 million and $3 million for CECONY and O&R, respectively, are expected to be recovered from customers over a twelve-month period beginning September 2020.

See "COVID-19 Regulatory Matters" in Note B and Note K to the Second Quarter Financial Statements.

In June 2020, the NYSPSC established a generic proceeding on the impacts of the COVID-19 pandemic and sought comment on a variety of COVID-19 related issues. In July 2020, the Utilities submitted joint comments with other large utilities in New York State that included a formal request to defer all COVID-19 related costs and for a surcharge mechanism to collect such deferrals based upon the individual utility's need.

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 Second 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 mitigated the potential impact of the COVID-19 pandemic on RECO, its customers and other stakeholders. New Jersey designated utilities, including RECO, as essential businesses that were able to continue a portion of their work. RECO 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. See "COVID-19 Regulatory Matters" in Note B and Note K to the Second Quarter Financial Statements.

Federal Regulation

Gas Safety

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 Second 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 Credit and defer payments of employer payroll taxes.

Con Edison will carryback its NOL of $29 million from tax year 2018 back to tax year 2013. This will allow Con Edison, mostly at the Clean Energy Businesses, to receive a $2.5 million net tax refund and to recognize a discrete income tax benefit of $4 million in March 2020, due to the higher federal tax rate in 2013. See Note J to the Second 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 governmental authorities imposing restrictions that partially suspended their operations for a portion of their workforce due to the COVID-19 pandemic and the Companies continued to pay them. In the second quarter of 2020, Con Edison and CECONY recognized a tax benefit to Taxes, other than income taxes expense of $8 million and $5 million, respectively.

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 continue to procure the materials and services necessary to support the phased plan to reopen businesses in New York State, which includes building an inventory of pandemic-related materials to address anticipated future needs. They maintain regular communications with key suppliers. There are currently no significant supply chain-related shortages or issues.

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 monitor cybersecurity threats closely.

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 a decline in business, bankruptcies, layoffs and furloughs, among other factors. CECONY and O&R have existing allowances for uncollectible accounts established against their customer accounts receivable balances which are reevaluated each quarter and updated accordingly. Changes to the Utilities’ reserve balances that result in write-offs of customer accounts receivable balances are not reflected in rates during the term of the current rate plans. During the first six months 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 customer 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 $81 million and $6.0 million at June 30, 2020, respectively. See Note A to the Second Quarter Financial Statements.

Liquidity and Financing

The Companies continue to monitor the impacts of the COVID-19 pandemic on the financial markets closely, 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 Second Quarter Financial Statements.

In addition, the decline in business activity in the Utilities’ service territory as a result of the COVID-19 pandemic has resulted in lower billed sales revenues and may continue to do so. 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 per month 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). Differences are accrued with interest each month 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 would temporarily reduce liquidity at the Utilities. See Note A to the Second Quarter Financial Statements and "COVID-19 Regulatory Matters" in Note B to the Second 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 Second Quarter Financial Statements.

Results of Operations

Net income for common stock and earnings per share for the three and ~~nine~~six months ended ~~September~~June 30, ~~2017~~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 June 30,				For the Six Months Ended June 30,
	2017	2016	2017		2016			2017	2016	2017		2016			2020	2019	2020	2019	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		Net Income for Common Stock		Earnings per Share
CECONY	$401	$388		$1.30		$1.27		$883	$859		$2.88		$2.87		$152		$0.45	$0.46	$558	$564	$1.67	$1.73
O&R	22	27	0.07		0.09			53	55	0.18		0.18			(2)	2	—	0.01	29	34	0.09	0.11
Clean Energy Businesses (a)	26	78	0.08		0.26			54	120	0.18		0.40			34	(6)	0.10	(0.03)	(49)	(41)	(0.15)	(0.13)
Con Edison Transmission	9	10	0.03		0.03			25	11	0.08		0.04			14	12	0.04	0.04	28	25	0.08	0.08
Other (b)	(1)	(6)	—		(0.02		)	5	(6)	0.01		(0.02		)	(8)		(0.02)	(0.02)	(1)	(6)	—	(0.02)
Con Edison (c)	$457	$497		$1.48		$1.63		$1,020	$1,039		$3.33		$3.47		$190	$152	$0.57	$0.46	$565	$576	$1.69	$1.77

(a)

~~Includes $4~~Net income for common stock from the Clean Energy Businesses for the three and six months ended June 30, 2020 includes $(2) million or ~~$0.01~~$0.00 a share and ~~$(15)~~$(65) million or $(0.19) a share, respectively, of net after-tax mark-to-market losses and reflects $9 million or $0.03 a share (after-tax) and $22 million or $0.07 a share (after-tax), respectively, 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. Net income for common stock from the Clean Energy Businesses for the three and six months ended June 30, 2019 includes $(16) million or $(0.05) a share and $(24) million or $(0.08) a share, respectively, of net after-tax mark-to-market ~~gains/(losses) for the three months ended September 30, 2017~~losses and ~~2016, respectively, and $1~~reflects $21 million or ~~$0.01~~$0.07 a share (after-tax) and $5$37 million or ~~$0.02~~$0.11 a share (after-tax), respectively, of ~~net after-tax mark-to-market gains/(losses) for~~income attributable to the ~~nine months ended September 30, 2017 and 2016, respectively. Also includes a $1 million or $0.00 a share net after-tax gain on 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~~Second 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.

~~Table of Contents~~


(b)	Other includes parent company and consolidation adjustments.


(c)	Earnings per share on a diluted basis were ~~$1.48~~$0.57 a share and ~~$1.62~~$0.46 a share for the three months ended ~~September~~June 30, ~~2017~~2020 and ~~2016,~~2019, respectively, and ~~$3.31~~$1.69 a share and ~~$3.46~~$1.77 a share for the ~~nine~~six months ended ~~September~~June 30, ~~2017~~2020 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~~tables present the estimated effect of major factors on earnings per share and net income for common stock for the three and ~~nine~~six months ended ~~September~~June 30, ~~2017 period~~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)



Variation for the Three Months Ended June 30, 2020 vs. 2019
	Earnings per Share	Net Income for Common Stock (Millions of Dollars)
CECONY (a)
Changes in rate plans	$(0.02)	$(8)	Primarily reflects lower non-weather related steam net revenues due to lower usage by customers.
Weather impact on steam revenues	0.01	4	Reflects the impact of warmer spring weather in the 2019 period.
Operations and maintenance expenses	0.22	74	Reflects lower costs for pension and other postretirement benefits of $0.12 a share, which are reconciled under the rate plans, lower regulatory assessments and fees that are collected in revenues from customers of $0.07 a share, lower healthcare costs of $0.03 a share, lower stock-based compensation of $0.02 a share, and lower consultant costs of $0.01 a share, offset in part by incremental costs associated with the Coronavirus Disease 2019 (COVID-19) pandemic of $(0.06) a share.
Depreciation, property taxes and other tax matters	(0.19)	(63)	Reflects higher depreciation and amortization expense of $(0.13) a share and higher property taxes of $(0.07) a share, both of which are recoverable under the rate plans, offset in part by the Employee Retention Tax Credit under the Coronavirus Aid, Relief, and Economic Security Act (CARES Act) of $0.01 a share.
Other	(0.03)	(7)	Primarily reflects foregone revenues from the suspension of customers' late payment charges and certain other fees associated with COVID-19 of $(0.04) a share and the dilutive effect of Con Edison's stock issuances of $(0.01) a share.
Total CECONY	(0.01)	—
O&R (a)
Changes in rate plans	0.01	4	Reflects an electric base rate increase of $0.01 a share under the company's rate plans.
Operations and maintenance expenses	(0.01)	(3)	Primarily reflects incremental costs associated with COVID-19.
Depreciation, property taxes and other tax matters	—	(1)	Reflects higher depreciation and amortization expense, offset in part by the Employee Retention Tax Credit under the CARES Act.
Other	(0.01)	(4)	Primarily reflects higher costs associated with components of pension and other postretirement benefits other than service cost of $(0.01) a share.
Total O&R	(0.01)	(4)
Clean Energy Businesses
Operating revenues less energy costs	0.01	4	Reflects higher revenues from renewable electric production projects of $0.02 a share, offset in part by lower energy services revenues of $(0.01) a share.
Operations and maintenance expenses	0.01	2	Primarily reflects lower energy services costs.
Net interest expense	0.06	18	Primarily reflects lower unrealized losses on interest rate swaps in the 2020 period.
HLBV effects	0.04	12	Primarily reflects lower losses from tax equity projects.
Other	0.01	4	Primarily reflects the Employee Retention Tax Credit under the CARES Act.
Total Clean Energy Businesses	0.13	40
Con Edison Transmission	—	2	Primarily reflects lower operations and maintenance expenses and higher allowance for funds used during construction (AFUDC) income from Mountain Valley Pipeline, LLC.
Other, including parent company expenses	—	—
Total Reported (GAAP basis)	$0.11	$38

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.

~~(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.

~~Table of Contents~~

~~(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 Six Months Ended June 30, 2020 vs. 2019
	Earnings per Share	Net Income for Common Stock (Millions of Dollars)
CECONY (a)
Changes in rate plans	$0.10	$31	Reflects higher electric and gas net base revenues of $0.02 a share and $0.08 a share, respectively, primarily due to electric and gas base rate increases in January 2019 under the company's rate plans.
Weather impact on steam revenues	(0.06)	(21)	Reflects the impact of warmer winter weather in the 2020 period.
Operations and maintenance expenses	0.43	140	Reflects lower costs for pension and other postretirement benefits of $0.30 a share, which are reconciled under the rate plans, lower regulatory assessments and fees that are collected in revenues from customers of $0.14 a share, lower stock-based compensation of $0.04 a share and lower healthcare costs of $0.03 a share, offset in part by incremental costs associated with COVID-19 of $(0.08) a share.
Depreciation, property taxes and other tax matters	(0.40)	(130)	Reflects higher depreciation and amortization expense of $(0.26) a share and higher property taxes of $(0.15) a share, both of which are recoverable under the rate plans, offset in part by the Employee Retention Tax Credit under the CARES Act of $0.01 a share.
Other	(0.13)	(26)	Primarily reflects foregone revenues from the suspension of customers' late payment charges and certain other fees associated with COVID-19 of $(0.05) a share and the dilutive effect of Con Edison's stock issuances of $(0.05) a share.
Total CECONY	(0.06)	(6)
O&R (a)
Changes in rate plans	0.03	9	Reflects electric and gas base rate increases of $0.02 a share and $0.01 a share, respectively, under the company's rate plans.
Operations and maintenance expenses	(0.02)	(6)	Primarily reflects incremental costs associated with COVID-19.
Depreciation, property taxes and other tax matters	(0.01)	(2)	Reflects higher depreciation and amortization expense, offset in part by the Employee Retention Tax Credit under the CARES Act.
Other	(0.02)	(6)	Primarily reflects higher costs associated with components of pension and other postretirement benefits other than service cost of $(0.01) a share.
Total O&R	(0.02)	(5)
Clean Energy Businesses
Operating revenues less energy costs	0.01	2	Reflects higher revenues from renewable electric production projects of $0.05 a share, offset in part by lower energy services revenues of $(0.04) a share.
Operations and maintenance expenses	0.02	6	Primarily reflects lower energy services costs.
Net interest expense	(0.11)	(38)	Primarily reflects higher unrealized losses on interest rate swaps in the 2020 period.
HLBV effects	0.04	15	Primarily reflects lower losses from tax equity projects.
Other	0.02	8	Primarily reflects re-measurement of deferred tax assets and the Employee Retention Tax Credit under the CARES Act.
Total Clean Energy Businesses	(0.02)	(7)
Con Edison Transmission	—	3	Primarily reflects lower operations and maintenance expenses and higher AFUDC income from Mountain Valley Pipeline, LLC.
Other, including parent company expenses	0.02	4	Reflects certain NYS combined income tax benefits.
Total Reported (GAAP basis)	$(0.08)	$(11)

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.

The Companies’ other operations and maintenance expenses for the three and ~~nine~~six months ended ~~September~~June 30, ~~2017~~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 June 30,		For the Six Months Ended June 30,
(Millions of Dollars)	2017	2016	2017	2016	2020	2019	2020	2019
CECONY
Operations	$386	$381	$1,147	$1,109	$383	$378	$787	$776
Pensions and other postretirement benefits	51	87	152	261	(43)	33	(63)	67
Health care and other benefits	45	47	127	124	29	42	66	80
Regulatory fees and assessments (a)	142	135	355	361	75	109	160	222
Other	67	74	211	250	105	89	167	166
Total CECONY	691	724	1,992	2,105	549	651	1,117	1,311
O&R	80	77	236	220	77	73	152	144
Clean Energy Businesses	79	40	174	124	53	55	107	115
Con Edison Transmission	3	1	7	1	2	3	5	5
Other (b)	(1)	(2)	(3)		(1)			—
Total other operations and maintenance expenses	$852	$840	$2,406	$2,447	$680	$781	$1,380	$1,575


(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~~six months ended ~~September~~June 30, ~~2017~~2020 and ~~2016~~2019 follows. For additional business segment financial information, see Note JL to the ~~Third~~Second Quarter Financial Statements.

4356

~~Table of Contents~~

~~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 June 30, 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	)%	$2,345	$2,331	$175	$179	$198	$233	$1	$1		$—		$—	$2,719	$2,744
Purchased power	(95)	(19.2	)	(9)	(13.0	)	(234)	Large		—	—		—	—		(338)	(42.4	)	345	313	35	39	—	—	—	—	—		—		380	352
Fuel	1	3.4		—	—		—	—		—	—		—	—		1	3.4		23	26	—	—	—	—	—	—	—		—		23	26
Gas purchased for resale	24	70.6		2	25.0		8	20.5		—	—		—	—		34	42.0		64	76	10	13	3	42	—	—	—		—		77	131
Other operations and maintenance	(33)	(4.6	)	3	3.9		39	97.5		2	Large		1	(50.0	)	12	1.4		549	651	77	73	53	55	2	3	(1)		(1)		680	781
Depreciation and amortization	22	7.9		1	5.9		8	72.7		—	—		1	Large		32	10.5		396	339	23	21	57	58	—	—	—		—		476	418
Taxes, other than income taxes	18	3.6		—	—		(2)	(40.0	)	—	—		—	—		16	3.0		579	550	20	20	3	6	—	—	2		2		604	578
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	)	389	376	10	13	82	72	(1)	(2)	(1)		(1)		479	458
Other income less deductions	(2)	Large		(1)	Large		(9)	(33.3	)	1	5.0		1	Large		(10)	(20.4	)	(40)	(15)	(3)	(2)	1	—	25	24	(4)		(4)		(21)	3
Net interest expense	3	1.9		—	—		5	71.4		1	33.3		(2)	(40.0	)	7	3.9		190	182	11	10	37	63	4	5	5		3		247	263
Income before income tax expense	29	4.7		(4)	(10.0	)	(110)	(75.9	)	(1)	(6.3	)	2	50.0		(84)	(10.4	)	159	179	(4)	1	46	9	20	17	(10)		(8)		211	198
Income tax expense	16	7.1		1	7.7		(58)	(86.6	)	—	—		(3)	Large		(44)	(14.0	)	7	27	(2)	(1)	—	(12)	6	5	(2)		—		9	19
Net income	$13	3.4	%	$(5)	(18.5	)%	$(52)	(66.7	)%	$(1)	(10.0	)%	$5	83.3	%	$(40)	(8.0	)%	$152	$152	$(2)	$2	$46	$21	$14	$12	$(8)		$(8)		$202	$179
Income attributable to non-controlling interest																			—	—	—	—	12	27	—	—	—		—		12	27
Net income for common stock																			$152		$(2)	$2	$34	$(6)	$14	$12	$(8)				$190	$152


(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 Three Months Ended September 30, 2017				For the Three Months Ended September 30, 2016					For the Three Months Ended June 30, 2020				For the Three Months Ended June 30, 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)	$1,845	$416	$84	$2,345	$1,833	$408	$90	$2,331	$14
Purchased power	393	—	7	400	486	—	9	495	(95)	340	—	5	345	306	—	7	313	32
Fuel	24	—	6	30	21	—	8	29	1	7	—	16	23	14	—	12	26	(3)
Gas purchased for resale	—	58	—	58	—	34	—	34	24	—	64	—	64	—	76	—	76	(12)
Other operations and maintenance	547	104	40	691	578	102	44	724	(33)	422	87	40	549	510	97	44	651	(102)
Depreciation and amortization	232	47	21	300	217	41	20	278	22	301	72	23	396	261	56	22	339	57
Taxes, other than income taxes	418	71	31	520	414	59	29	502	18	457	88	34	579	428	85	37	550	29
Operating income	$855	$(12)	$(43)	$800	$841	$(28)	$(47)	$766	$34	$318	$105	$(34)	$389	$314	$94	$(32)	$376	$13

Electric

CECONY’s results of electric operations for the three months ended ~~September~~June 30, ~~2017~~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	June 30, 2020	June 30, 2019	Variation
Operating revenues	$2,469	$2,557	$(88)	$1,845	$1,833	$12
Purchased power	393	486	(93)	340	306	34
Fuel	24	21	3	7	14	(7)
Other operations and maintenance	547	578	(31)	422	510	(88)
Depreciation and amortization	232	217	15	301	261	40
Taxes, other than income taxes	418	414	4	457	428	29
Electric operating income	$855	$841	$14	$318	$314	$4

CECONY’s electric sales and deliveries for the three months ended ~~September~~June 30, ~~2017~~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		June 30, 2020	June 30, 2019	Variation	Percent Variation			June 30, 2020	June 30, 2019	Variation	Percent Variation
Residential/Religious (b)	3,237	3,653	(416	)	(11.4	)%		$805	$883	$(78)	(8.8	)%	2,294	2,101	193	9.2	%		$616	$541	$75	13.9	%
Commercial/Industrial	2,570	2,749	(179	)	(6.5	)		534	551	(17)	(3.1	)	2,117	2,283	(166)	(7.3	)		414	429	(15)	(3.5	)
Retail choice customers	7,510	8,136	(626	)	(7.7	)		867	918	(51)	(5.6	)	5,007	5,691	(684)	(12.0	)		502	516	(14)	(2.7	)
NYPA, Municipal Agency and other sales	2,705	2,764	(59	)	(2.1	)		207	204	3	1.5		2,066	2,312	(246)	(10.6	)		145	148	(3)	(2.0	)
Other operating revenues (c)	—	—	—		—			56	1	55	Large		—	—	—	—			168	199	(31)	(15.6	)
Total	16,022	17,302	(1,280	)	(7.4	)%	(d)	$2,469	$2,557	$(88)	(3.4	)%	11,484	12,387	(903)	(7.3	)%	(d)	$1,845	$1,833	$12	0.7	%


(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~~8.0 percent in the three months ended ~~September~~June 30, ~~2017~~2020 compared with the ~~2016~~2019 period. See “Coronavirus Disease 2019 (COVID-19) Impacts,” above.

4558

~~Table of Contents~~

Operating revenues increased $12 million in the three months ended June 30, 2020 compared with the 2019 period primarily due to higher purchased power expenses ($34 million) and a certain rate plan reconciliation ($6 million), offset in part by a decrease in revenues from the new electric rate plan ($20 million) and lower fuel expenses ($7 million).

Purchased power expenses increased $34 million in the three months ended June 30, 2020 compared with the 2019 period due to higher unit costs ($52 million), offset in part by lower purchased volumes ($18 million).

Fuel expenses decreased $7 million in the three months ended June 30, 2020 compared with the 2019 period due to lower unit costs ($9 million), offset in part by higher purchased volumes from the company's electric generating facilities ($2 million).

Other operations and maintenance expenses decreased $88 million in the three months ended ~~September~~June 30, ~~2017~~2020 compared with the ~~2016~~2019 period ~~due~~ primarily ~~to lower purchased power expenses ($93 million), offset by higher revenues from the electric rate plan ($27 million).~~

~~Purchased power~~ ~~expenses decreased $93 million in the three months ended September 30, 2017 compared with the 2016 period~~ due to lower ~~purchased volumes ($66 million) and unit~~ costs ~~($27 million).~~

~~Fuel~~ expenses increased $3 million in the three months ended September 30, 2017 compared with the 2016 period due to higher unit costs ($6 million), offset by lower purchased volumes from the company's electric generating facilities ($3 million).

~~Other operations and maintenance~~ ~~expenses decreased $31 million in the three months ended September 30, 2017 compared with the 2016 period due primarily to lower~~for pension and other postretirement benefits ($~~38 million) and environmental costs ($6~~62 million), ~~offset by higher~~lower surcharges for assessments and fees that are collected in revenues from customers ($627 million), lower healthcare costs ($11 million) and ~~uncollectible expense~~lower stock-based compensation ($56 million), offset in part by incremental costs associated with COVID-19 ($19 million).

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

Taxes, other than income taxes increased $4$29 million in the three months ended ~~September~~June 30, ~~2017~~2020 compared with the ~~2016~~2019 period primarily due ~~primarily~~ to higher property taxes ($1126 million), ~~offset by~~ lower deferral of under-collected property taxes ($4 million) and higher state and local taxes ($51 million)., offset in part by lower payroll taxes ($2 million) that includes the Employee Retention Credit created under the CARES Act. See “Coronavirus Disease 2019 (COVID-19) Impacts - Impact of CARES Act on Accounting for Income Taxes,” above.

Gas

CECONY’s results of gas operations for the three months ended ~~September~~June 30, ~~2017~~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	June 30, 2020	June 30, 2019	Variation
Operating revenues	$268	$208	$60	$416	$408	$8
Gas purchased for resale	58	34	24	64	76	(12)
Other operations and maintenance	104	102	2	87	97	(10)
Depreciation and amortization	47	41	6	72	56	16
Taxes, other than income taxes	71	59	12	88	85	3
Gas operating income	$(12)	$(28)	$16	$105	$94	$11

CECONY’s gas sales and deliveries, excluding off-system sales, for the three months ended ~~September~~June 30, ~~2017~~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		June 30, 2020	June 30, 2019	Variation		Percent Variation			June 30, 2020	June 30, 2019	Variation	Percent Variation
Residential	4,731	4,335	396		9.1	%		$104	$88	$16	18.2	%	10,602	9,816	786		8.0	%		$192	$183	$9	4.9	%
General	4,292	3,963	329		8.3			49	41	8	19.5		6,646	6,550	96		1.5			63	76	(13)	(17.1	)
Firm transportation	8,766	8,305	461		5.6			67	53	14	26.4		17,112	16,037	1,075		6.7			124	120	4	3.3
Total firm sales and transportation	17,789	16,603	1,186		7.1		(b)	220	182	38	20.9		34,360	32,403	1,957		6.0		(b)	379		—	—
Interruptible sales (c)	2,108	1,664	444		26.7			8	4	4	Large		2,501	1,860	641		34.5			7	9	(2)	(22.2	)
NYPA	10,148	12,800	(2,652	)	(20.7	)		1		—	—		7,664	10,515	(2,851	)	(27.1	)		1		—	—
Generation plants	24,068	35,745	(11,677	)	(32.7	)		7		—	—		10,239	10,288	(49	)	(0.5	)		5		—	—
Other	4,487	4,975	(488	)	(9.8	)		6		—	—		5,078	5,140	(62	)	(1.2	)		8	7	1	14.3
Other operating revenues (d)	—	—	—		—			26	8	18	Large		—	—	—		—			16	7	9	Large
Total	58,600	71,787	(13,187	)	(18.4	)%		$268	$208	$60	28.8	%	59,842	60,206	(364	)	(0.6	)%		$416	$408	$8	2.0	%


(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.

~~Table of Contents~~

(b)

After adjusting for variations, primarily billing days, firm gas sales and transportation volumes in the company’s service area ~~increased 6.0~~decreased 2.1 percent in the three months ended ~~September~~June 30, ~~2017~~2020 compared with the ~~2016 period, reflecting primarily increased volumes attributable to the growth in the number of gas customers.~~2019 period. See “Coronavirus Disease 2019 (COVID-19) Impacts,” above.


(c)	Includes ~~1,535 thousands~~1,315 thousand and ~~915 thousands~~753 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~~$8 million in the three months ended ~~September~~June 30, ~~2017~~2020 compared with the ~~2016~~2019 period primarily due ~~primarily~~ to ~~higher~~an increase in revenues from the new gas rate plan ~~and growth~~($21 million), offset in ~~the number of customers ($29 million) and higher~~part by lower gas purchased for resale expense ($2412 million).

Gas purchased for resale ~~increased $24~~ decreased $12 million in the three months ended ~~September~~June 30, ~~2017~~2020 compared with the ~~2016~~2019 period due to ~~higher~~lower purchased volumes ($8 million) and unit costs ($~~20 million) and purchased volumes ($~~4 million).

Other operations and maintenance expenses ~~increased $2~~decreased $10 million in the three months ended ~~September~~June 30, ~~2017~~2020 compared with the ~~2016~~2019 period primarily due ~~primarily~~ to lower costs for pension and other postretirement benefits ($11 million), lower healthcare costs ($2 million) and lower stock-based compensation ($1 million), offset in part by incremental costs associated with COVID-19 ($3 million) and higher surcharges for assessments and fees that ~~were~~are collected in revenues from ~~customers.~~customers ($2 million).

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

Taxes, other than income taxes increased ~~$12~~$3 million in the three months ended ~~September~~June 30, ~~2017~~2020 compared with the ~~2016~~2019 period primarily due ~~primarily~~ to higher property taxes ($69 million), ~~state~~offset in part by higher deferral of under-collected property taxes ($5 million) and ~~local taxes ($4 million) and~~lower payroll taxes ($1 million). that includes the Employee Retention Credit created under the CARES Act. See “Coronavirus Disease 2019 (COVID-19) Impacts - Impact of CARES Act on Accounting for Income Taxes,” above.

Steam

CECONY’s results of steam operations for the three months ended ~~September~~June 30, ~~2017~~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	June 30, 2020	June 30, 2019	Variation
Operating revenues	$62	$63	$(1)	$84	$90	$(6)
Purchased power	7	9	(2)	5	7	(2)
Fuel	6	8	(2)	16	12	4
Other operations and maintenance	40	44	(4)	40	44	(4)
Depreciation and amortization	21	20	1	23	22	1
Taxes, other than income taxes	31	29	2	34	37	(3)
Steam operating income	$(43)	$(47)	$4	$(34)	$(32)	$(2)

CECONY’s steam sales and deliveries for the three months ended ~~September~~June 30, ~~2017~~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		June 30, 2020	June 30, 2019	Variation		Percent Variation			June 30, 2020	June 30, 2019	Variation	Percent Variation
General	13	10	3		30.0	%		$2			$—	—	%	65	60	5		8.3	%		$4		—	—	%
Apartment house	748	776	(28	)	(3.6	)		15		—		—		1,037	1,033	4		0.4			26	25	1	4.0
Annual power	2,439	2,950	(511	)	(17.3	)		42	49	(7)		(14.3	)	1,920	2,286	(366	)	(16.0	)		52	60	(8)	(13.3	)
Other operating revenues (a)	—	—	—		—			3	(3)	6		Large		—	—	—		—			2	1	1	Large
Total	3,200	3,736	(536	)	(14.3	)%	(b)	$62	$63	$(1)		(1.6	)%	3,022	3,379	(357	)	(10.6	)%	(b)	$84	$90	$(6)	(6.7	)%


(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~~20.0 percent in the three months ended ~~September~~June 30, ~~2017~~2020 compared with the ~~2016~~2019 period. See “Coronavirus Disease 2019 (COVID-19) Impacts,” above.

~~Table of Contents~~

Operating revenues decreased $1$6 million in the three months ended ~~September~~June 30, ~~2017~~2020 compared with the ~~2016~~2019 period primarily due ~~primarily~~ to lower revenues from the steam rate plan due to lower usage by customers ($11 million), lower purchased power expenses ($2 million) and ~~lower fuel expenses~~certain rate plan reconciliations ($24 million), offset in part by a ~~property tax refund incentive~~lower reserve related to steam earnings sharing ($37 million) and higher fuel expenses ($4 million).

Purchased power ~~expenses~~ decreased $2 million in the three months ended ~~September~~June 30, ~~2017~~2020 compared with the ~~2016~~2019 period due to lower unit ~~costs ($1 million) and purchased volumes ($1 million).~~costs.

Fuelexpenses ~~decreased $2~~increased $4 million in the three months ended ~~September~~June 30, ~~2017~~2020 compared with the ~~2016~~2019 period due to ~~lower~~higher unit ~~costs ($1 million) and purchased volumes from the company's steam generating facilities ($1 million).~~costs.

Other operations and maintenance expenses decreased $4 million in the three months ended ~~September~~June 30, ~~2017~~2020 compared with the ~~2016~~2019 period primarily due ~~primarily~~ to lower ~~municipal infrastructure support costs.~~costs for pension and other postretirement benefits ($3 million) and lower healthcare costs ($1 million).

Depreciation and amortizationincreased ~~$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~~$1 million in the three months ended ~~September~~June 30, ~~2017~~2020 compared with the ~~2016~~2019 period primarily due ~~primarily~~ to higher steam utility plant balances.

Taxes, other than income taxes decreased $3 million in the three months ended June 30, 2020 compared with the 2019 period primarily due to higher deferral of under-collected property ~~taxes.~~taxes ($6 million), offset in part by higher property taxes ($3 million).

Other Income (Deductions)

Other income (deductions) decreased $2$25 million in the three months ended ~~September~~June 30, ~~2017~~2020 compared with the ~~2016~~2019 period primarily due ~~primarily~~to higher costs associated with components of pension and other postretirement benefits other than service cost due to a decrease in ~~investment and other income.~~the discount rate.

Net Interest Expense

Net interest expense increased $3$8 million in the three months ended ~~September~~June 30, ~~2017~~2020 compared with the ~~2016~~2019 period primarily due ~~primarily~~ to higher interest on long-term debt ~~balances~~($20 million), offset in part by a decrease in interest accrued on the ~~2017 period.~~TCJA related regulatory liability ($3 million), lower interest expense for short-term debt ($3 million) and lower interest accrued on the system benefit charge liability ($2 million).

Income Tax Expense

Income taxes ~~increased $16~~decreased $20 million in the three months ended ~~September~~June 30, ~~2017~~2020 compared with the ~~2016~~2019 period primarily due ~~primarily~~ to ~~higher~~lower income before income tax expense ~~($11~~($4 million), ~~a decrease~~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 ($24 million) and higher flow-through tax benefits ~~for~~on plant-related ~~flow through~~ items ($74 million), offset in part by the absence of the amortization of excess deferred state income taxes ($5 million), higher ~~research~~cost of removal expenses ($5 million) and ~~development tax credits~~higher allowance for uncollectible accounts ($2 million).

O&R


	For the Three Months Ended September 30, 2017			For the Three Months Ended September 30, 2016				For the Three Months Ended June 30, 2020			For the Three Months Ended June 30, 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)	$138	$37	$175	$138	$41	$179	$(4)
Purchased power	60	—	60	69	—	69	(9)	35	—	35	39	—	39	(4)
Gas purchased for resale	—	10	10	—	8	8	2	—	10	10	—	13	13	(3)
Other operations and maintenance	63	17	80	63	14	77	3	61	16	77	55	18	73	4
Depreciation and amortization	13	5	18	12	5	17	1	16	7	23	15	6	21	2
Taxes, other than income taxes	14	7	21	14	7	21	—	13	7	20	13	7	20	—
Operating income	$56	$(11)	$45	$55	$(7)	$48	$(3)	$13	$(3)	$10	$16	$(3)	$13	$(3)

Electric

O&R’s results of electric operations for the three months ended ~~September~~June 30, ~~2017~~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		June 30, 2020	June 30, 2019	Variation
Operating revenues	$206	$213	$(7)		$138			$—
Purchased power	60	69	(9)		35	39	(4)
Other operations and maintenance	63		—		61	55	6
Depreciation and amortization	13	12	1		16	15	1
Taxes, other than income taxes	14		—		13		—
Electric operating income	$56	$55		$1	$13	$16	$(3)

O&R’s electric sales and deliveries for the three months ended ~~September~~June 30, ~~2017~~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		June 30, 2020	June 30, 2019	Variation		Percent Variation			June 30, 2020	June 30, 2019	Variation		Percent Variation
Residential/Religious (b)	500	585	(85	)	(14.5	)%		$105	$109	$(4)	(3.7	)%	415	356	59		16.6	%		$70	$64	$6		9.4	%
Commercial/Industrial	206	216	(10	)	(4.6	)		34	35	(1)	(2.9	)	174	190	(16	)	(8.4	)		26	25	1		4.0
Retail choice customers	818	925	(107	)	(11.6	)		64	70	(6)	(8.6	)	616	712	(96	)	(13.5	)		42	45	(3)		(6.7	)
Public authorities	31	31	—		—			3	2	1	50.0		24	24	—		—			1	2	(1)		(50.0	)
Other operating revenues (c)	—	—	—		—			—	(3)	3	Large		—	—	—		—			(1)	2	(3)		Large
Total	1,555	1,757	(202	)	(11.5	)%	(d)	$206	$213	$(7)	(3.3	)%	1,229	1,282	(53	)	(4.1	)%	(d)	$138			$—	—


(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~~5.4 percent in the three months ended ~~September~~June 30, ~~2017~~2020 compared with the ~~2016~~2019 period. See “Coronavirus Disease 2019 (COVID-19) Impacts,” above.

~~Operating revenues~~Purchased power expenses decreased $7$4 million in the three months ended ~~September~~June 30, ~~2017~~2020 compared with the ~~2016~~2019 period due ~~primarily~~ to lower ~~purchased power expenses ($9 million), offset by higher revenues from the New York electric rate plan~~unit costs ($3 million) and purchased volumes ($1 million).

~~Purchased power~~Other operations and maintenance expenses ~~decreased $9~~increased $6 million in the three months ended ~~September~~June 30, ~~2017~~2020 compared with the ~~2016~~2019 period primarily due to ~~lower purchased volumes~~incremental costs associated with COVID-19 ($103 million), ~~offset by~~ higher ~~unit~~non-deferred storm costs ($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~~June 30, ~~2017~~2020 compared with the ~~2016~~2019 period primarily due ~~primarily~~ to higher electric utility plant balances.

Gas

O&R’s results of gas operations for the three months ended ~~September~~June 30, ~~2017~~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	June 30, 2020	June 30, 2019	Variation
Operating revenues	$28	$27	$1	$37	$41	$(4)
Gas purchased for resale	10	8	2	10	13	(3)
Other operations and maintenance	17	14	3	16	18	(2)
Depreciation and amortization	5		—	7	6	1
Taxes, other than income taxes	7		—	7		—
Gas operating income	$(11)	$(7)	$(4)	$(3)			$—

4963

~~Table of Contents~~

O&R’s gas sales and deliveries, excluding off-system sales, for the three months ended ~~September~~June 30, ~~2017~~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		June 30, 2020	June 30, 2019	Variation		Percent Variation			June 30, 2020	June 30, 2019	Variation	Percent Variation
Residential	579	550	29		5.3	%		$11	$9	$2	22.2	%	1,686	1,287	399		31.0	%		$19	$18	$1	5.6	%
General	198	177	21		11.9			2		—	—		294	337	(43	)	(12.8	)		3	4	(1)	(25.0	)
Firm transportation	898	884	14		1.6			8		—	—		1,452	1,361	91		6.7			11	10	1	10.0
Total firm sales and transportation	1,675	1,611	64		4.0		(b)	21	19	2	10.5		3,432	2,985	447		15.0		(b)	33	32	1	3.1
Interruptible sales	819	893	(74	)	(8.3	)		1	—	1	—		771	840	(69	)	(8.2	)		1		—	—
Generation plants	5	3	2		66.7			—	—	—	—		3	—	3		Large			—	—	—	—
Other	74	70	4		5.7			—	—	—	—		127	126	1		0.8			—	—	—	—
Other gas revenues	—	—	—		—			6	8	(2)	(25.0	)	—	—	—		—			3	8	(5)	(62.5	)
Total	2,573	2,577	(4	)	(0.2	)%		$28	$27	$1	3.7	%	4,333	3,951	382		9.7	%		$37	$41	$(4)	(9.8	)%


(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~~decreased 4.8 percent in the three months ended ~~September~~June 30, ~~2017~~2020 compared with the ~~2016~~2019 period. See “Coronavirus Disease 2019 (COVID-19) Impacts,” above.

Operating revenues decreased $4 million in the three months ended June 30, 2020 compared with the 2019 period primarily due to lower gas purchased for resale.

Gas purchased for resale decreased $3 million in the three months ended June 30, 2020 compared with the 2019 period due to lower unit costs ($4 million), offset in part by higher purchased volumes ($1 million).

Other operations and maintenance expenses decreased $2 million in the three months ended June 30, 2020 compared with the 2019 period primarily due to lower pension costs.

Depreciation and amortization increased $1 million in the three months ended ~~September~~June 30, ~~2017~~2020 compared with the ~~2016~~2019 period primarily due ~~primarily~~ to higher gas ~~purchased for resale ($2 million), offset by lower revenues from the New York gas rate plan ($1 million).~~utility plant balances.

~~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~~decreased $1 million in the three months ended ~~September~~June 30, ~~2017~~2020 compared with the ~~2016~~2019 period primarily 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).~~expense.

Clean Energy Businesses

The Clean Energy Businesses’ results of operations for the three months ended ~~September~~June 30, ~~2017~~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	June 30, 2020	June 30, 2019	Variation
Operating revenues	$177	$350	$(173)	$198	$233	$(35)
Purchased power	—	234	(234)
Gas purchased for resale	47	39	8	3	42	(39)
Other operations and maintenance	79	40	39	53	55	(2)
Depreciation and amortization	19	11	8	57	58	(1)
Taxes, other than income taxes	3	5	(2)	3	6	(3)
Gain on sale of retail electric supply business (2016)	—	(104)	104
Operating income	$29	$125	$(96)	$82	$72	$10

Operating revenues decreased ~~$173~~$35 million in the three months ended ~~September~~June 30, ~~2017~~2020 compared with the ~~2016~~2019 period primarily due ~~primarily~~ to lower ~~electric retail~~wholesale revenues ~~of $256 million from the sale of the retail electric supply business~~($36 million) and lower energy services revenues ($5 million), 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 ($9 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 purchased power costs and $8 million in gains are reflected in revenues.($3 million).

~~Purchased power~~ expenses decreased $234 million in the three 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 ($210 million) and changes in mark-to-market values ($24 million).

Gas purchased for resale ~~increased $8 million in the three months ended September 30, 2017 compared with the 2016 period due to higher purchased volumes.~~

~~Other operations and maintenance~~ ~~expenses increased~~ decreased $39 million in the three months ended ~~September~~June 30, ~~2017~~2020 compared with the ~~2016 period due primarily to Upton 2 engineering, procurement and construction costs (see Note O to the Third Quarter Financial Statements) and an increase in energy services costs.~~

~~Depreciation and amortization~~ ~~increased $8 million in the three months ended September 30, 2017 compared with the 2016~~2019 period due to ~~an increase in solar electric production projects in operation during 2017.~~lower purchased volumes.

~~Taxes, other than income taxes~~

Other operations and maintenance expenses decreased $2 million in the three months ended ~~September~~June 30, ~~2017~~2020 compared with the ~~2016~~2019 period primarily due to lower ~~gross receipts tax from the sale of the retail electric supply business.~~energy services costs.

G~~ain on sale of retail electric supply business was $104~~Taxes, other than income taxes decreased $3 million in the three months ended ~~September~~June 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~~2020 compared with the ~~2016~~2019 period primarily due ~~primarily~~ to the ~~gain related to~~Employee Retention Credit created under the ~~acquisition~~CARES Act. See “Coronavirus Disease 2019 (COVID-19) Impacts - Impact of ~~a solar electric production investment in 2016.~~CARES Act on Accounting for Income Taxes,” above.

Net Interest Expense

Net interest expense ~~increased $5~~decreased $26 million in the three months ended ~~September~~June 30, ~~2017~~2020 compared with the ~~2016~~2019 period due to lower unrealized losses on interest rate swaps in the 2020 period.

Income Tax Expense

Income taxes increased $12 million in the three months ended June 30, 2020 compared with the 2019 period primarily due to ~~increased debt on solar~~higher income before income tax expense ($8 million) and lower income attributable to non-controlling interest ($4 million).

Income Attributable to Non-Controlling Interest

Income attributable to non-controlling interest decreased $15 million in the three months ended June 30, 2020 compared with the 2019 period primarily due to lower income attributable in the 2020 period to a tax equity investor in renewable electric production ~~projects.~~projects accounted for under the HLBV method of accounting. See Note O to the Second Quarter Financial Statements.

Con Edison Transmission

Income Tax Expense

Income taxes increased $1 million in the three months ended June 30, 2020 compared with the 2019 period primarily due to higher income before income tax expense.

Other

Income Tax Expense

Income taxes decreased ~~$58~~$2 million in the three months ended ~~September~~June 30, ~~2017~~2020 compared with the ~~2016~~2019 period primarily due ~~primarily~~ to ~~lower income before income~~the absence of an increase in uncertain tax ~~expense ($44 million), higher renewable energy tax credits ($1 million) and the increase to deferred state income taxes~~positions 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).~~2019.

~~Other~~

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

5165

~~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:~~for the six months ended June 30, 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	$207	2.7	%	$37	5.9	%	$(538)	(53.9	)%	$1	—	%	$(3)	Large		$(296)	(3.2	)%	$5,200	$5,371	$408	$437	$344	$450	$2	$2	$(1)	$(2)	$5,953	$6,258
Purchased power	(106)	(8.7	)	(6)	(3.9	)	(679)	Large		—	—		(3)	Large		(794)	(38.8	)	618	635	71	85	—	—	—	—	(1)	(1)	688	719
Fuel	36	27.1		—	—		—	—		—	—		—	—		36	27.1		101	133	—	—	—	—	—	—	—	—	101	133
Gas purchased for resale	155	71.4		20	62.5		89	Large		—	—		—	—		264	82.5		260	393	33	57	16	124	—	—	—	(1)	309	573
Other operations and maintenance	(113)	(5.4	)	16	7.3		50	40.3		6	Large		—	—		(41)	(1.7	)	1,117	1,311	152	144	107	115	5	5	(1)	—	1,380	1,575
Depreciation and amortization	66	8.0		3	6.0		24	80.0		—	—		—	—		93	10.3		786	673	45	42	115	116	—	—	—	—	946	831
Taxes, other than income taxes	77	5.3		2	3.3		(4)	(25.0	)	—	—		(1)	Large		74	4.9		1,186	1,125	42	42	10	12	—	—	4	4	1,242	1,183
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	)	1,132	1,101	65	67	96	83	(3)	(3)	(3)	(4)	1,287	1,244
Other income less deductions	4	Large		(1)	Large		(2)	(5.7	)	37	Large		(1)	—		37	60.7		(100)	(22)	(8)	(5)	1	1	51	49	(3)	(6)	(59)	17
Net interest expense	12	2.7		(1)	(3.6	)	11	47.8		8	Large		(2)	(18.2	)	28	5.4		372	364	20	20	160	109	9	12	9	5	570	510
Income before income tax expense	84	6.2		2	2.3		(134)	(68.4	)	24	Large		2	(20.0	)	(22)	(1.3	)	660	715	37	42	(63)	(25)	39	34	(15)	(15)	658	751
Income tax expense	60	12.2		4	12.5		(68)	(89.5	)	10	Large		(9)	Large		(3)	(0.5	)	102	151	8	8	(43)	(32)	11	9	(14)	(9)	64	127
Net income	$24	2.8	%	$(2)	(3.6	)%	$(66)	(55.0	)%	$14	Large		$11	Large		$(19)	(1.8	)%	$558	$564	$29	$34	$(20)	$7	$28	$25	$(1)	$(6)	$594	$624
Income attributable to non-controlling interest																			—	—	—	—	29	48	—	—	—	—	29	48
Net income for common stock																			$558	$564	$29	$34	$(49)	$(41)	$28	$25	$(1)	$(6)	$565	$576


(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					For the Six Months Ended June 30, 2020				For the Six Months Ended June 30, 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	$6,079	$1,421	$448	$7,948	$6,222	$1,113	$406	$7,741	$207	$3,616	$1,250	$334	$5,200	$3,630	$1,330	$411	$5,371	$(171)
Purchased power	1,084	—	26	1,110	1,191	—	25	1,216	(106)	604	—	14	618	616	—	19	635	(17)
Fuel	95	—	74	169	81	—	52	133	36	38	—	63	101	47	—	86	133	(32)
Gas purchased for resale	—	372	—	372	—	217	—	217	155	—	260	—	260	—	393	—	393	(133)
Other operations and maintenance	1,528	330	134	1,992	1,659	307	139	2,105	(113)	853	182	82	1,117	1,017	204	90	1,311	(194)
Depreciation and amortization	690	137	64	891	645	118	62	825	66	598	143	45	786	518	111	44	673	113
Taxes, other than income taxes	1,205	220	98	1,523	1,159	198	89	1,446	77	923	191	72	1,186	861	184	80	1,125	61
Operating income	$1,477	$362	$52	$1,891	$1,487	$273	$39	$1,799	$92	$600	$474	$58	$1,132	$571	$438	$92	$1,101	$31

Electric

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


	For the Nine Months Ended			For the Six Months Ended
(Millions of Dollars)	September 30, 2017	September 30, 2016	Variation	June 30, 2020	June 30, 2019	Variation
Operating revenues	$6,079	$6,222	$(143)	$3,616	$3,630	$(14)
Purchased power	1,084	1,191	(107)	604	616	(12)
Fuel	95	81	14	38	47	(9)
Other operations and maintenance	1,528	1,659	(131)	853	1,017	(164)
Depreciation and amortization	690	645	45	598	518	80
Taxes, other than income taxes	1,205	1,159	46	923	861	62
Electric operating income	$1,477	$1,487	$(10)	$600	$571	$29

CECONY’s electric sales and deliveries for the ~~nine~~six months ended ~~September~~June 30, ~~2017~~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 Nine Months Ended							For the Nine Months Ended					For the Six Months Ended							For the Six Months Ended
Description	September 30, 2017	September 30, 2016	Variation		Percent Variation			September 30, 2017	September 30, 2016	Variation	Percent Variation		June 30, 2020	June 30, 2019	Variation		Percent Variation			June 30, 2020	June 30, 2019	Variation	Percent Variation
Residential/Religious (b)	7,576	8,130	(554	)	(6.8	)%		$1,925	$2,017	$(92)	(4.6	)%	4,637	4,516	121		2.7	%		$1,225	$1,137	$88	7.7	%
Commercial/Industrial	6,965	7,220	(255	)	(3.5	)		1,393	1,381	12	0.9		4,518	4,743	(225	)	(4.7	)		848		—	—
Retail choice customers	19,748	20,404	(656	)	(3.2	)		2,092	2,114	(22)	(1.0	)	10,720	11,629	(909	)	(7.8	)		1,057	1,024	33	3.2
NYPA, Municipal Agency and other sales	7,548	7,641	(93	)	(1.2	)		483	474	9	1.9		4,440	4,722	(282	)	(6.0	)		289	284	5	1.8
Other operating revenues (c)	—	—	—		—			186	236	(50)	(21.2	)	—	—	—		—			197	337	(140)	(41.5	)
Total	41,837	43,395	(1,558	)	(3.6	)%	(d)	$6,079	$6,222	$(143)	(2.3	)%	24,315	25,610	(1,295	)	(5.1	)%	(d)	$3,616	$3,630	$(14)	(0.4	)%


(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 ~~0.9~~3.9 percent in the ~~nine~~six months ended ~~September~~June 30, ~~2017~~2020 compared with the ~~2016~~2019 period. See “Coronavirus Disease 2019 (COVID-19) Impacts,” above.

5367

~~Table of Contents~~

Operating revenues decreased ~~$143~~$14 million in the ~~nine~~six months ended ~~September~~June 30, ~~2017~~2020 compared with the ~~2016~~2019 period primarily due ~~primarily~~ to lower purchased power ~~costs~~expenses ($~~107~~12 million)~~. The lower revenues reflected the decline~~ and fuel expenses ($9 million), offset in ~~surcharges for assessments and fees that were collected in revenues from customers~~part by a certain rate plan reconciliation ($136 million).

Purchased power expenses decreased ~~$107~~$12 million in the ~~nine~~six months ended ~~September~~June 30, ~~2017~~2020 compared with the ~~2016~~2019 period due to lower purchased volumes ($9578 million) ~~and unit costs ($12 million).~~

~~Fuel~~ ~~expenses increased $14 million~~, offset in ~~the nine months ended September 30, 2017 compared with the 2016 period due to~~part by higher unit costs ($1266 million) ~~and~~.

Fuel expenses decreased $9 million in the six months ended June 30, 2020 compared with the 2019 period due to lower unit costs ($15 million), offset in part by higher purchased volumes from the company’s electric generating facilities ($26 million).

Other operations and maintenance expenses decreased ~~$131~~$164 million in the ~~nine~~six months ended ~~September~~June 30, ~~2017~~2020 compared with the ~~2016~~2019 period primarily due ~~primarily~~ to lower costs for pension and other postretirement benefits ($~~114~~109 million), lower surcharges for assessments and fees that are collected in revenues from customers ($1345 million), ~~environmental~~lower stock-based compensation ($12 million), lower healthcare costs ($1710 million), lower consultant costs ($8 million) and ~~stock based compensation~~lower reserve for injuries and damages ($65 million), offset in part by ~~higher~~incremental costs ~~for municipal infrastructure support~~associated with COVID-19 ($2027 million).

Depreciation and amortization increased ~~$45~~$80 million in the ~~nine~~six months ended ~~September~~June 30, ~~2017~~2020 compared with the ~~2016~~2019 period primarily due ~~primarily~~ to higher electric utility plant ~~balances.~~balances and higher depreciation rates.

Taxes, other than ~~income~~ income taxes increased ~~$46~~$62 million in the ~~nine~~six months ended ~~September~~June 30, ~~2017~~2020 compared with the ~~2016~~2019 period primarily due ~~primarily~~ to higher property taxes ($4353 million), lower deferral of under-collected property taxes ($7 million) and ~~the absence in 2017 of a favorable~~higher state ~~audit settlement in 2016~~and local taxes ($5 million), offset in part by lower ~~state and local~~payroll taxes ($4 million). that includes the Employee Retention Credit created under the CARES Act. See “Coronavirus Disease 2019 (COVID-19) Impacts - Impact of CARES Act on Accounting for Income Taxes,” above.

Gas

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


	For the Nine Months Ended			For the Six Months Ended
(Millions of Dollars)	September 30, 2017	September 30, 2016	Variation	June 30, 2020	June 30, 2019	Variation
Operating revenues	$1,421	$1,113	$308	$1,250	$1,330	$(80)
Gas purchased for resale	372	217	155	260	393	(133)
Other operations and maintenance	330	307	23	182	204	(22)
Depreciation and amortization	137	118	19	143	111	32
Taxes, other than income taxes	220	198	22	191	184	7
Gas operating income	$362	$273	$89	$474	$438	$36

~~Table of Contents~~

CECONY’s gas sales and deliveries, excluding off-system sales, for the ~~nine~~six months ended ~~September~~June 30, ~~2017~~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 Nine Months Ended							For the Nine Months Ended					For the Six Months Ended							For the Six Months Ended
Description	September 30, 2017	September 30, 2016	Variation		Percent Variation			September 30, 2017	September 30, 2016	Variation	Percent Variation		June 30, 2020	June 30, 2019	Variation		Percent Variation			June 30, 2020	June 30, 2019	Variation	Percent Variation
Residential	39,814	35,565	4,249		11.9	%		$613	$506	$107	21.1	%	32,846	36,940	(4,094	)	(11.1	)%		$575	$621	$(46)	(7.4	)%
General	23,427	20,962	2,465		11.8			255	200	55	27.5		19,048	20,983	(1,935	)	(9.2	)		201	254	(53)	(20.9	)
Firm transportation	53,952	51,333	2,619		5.1			390	332	58	17.5		50,029	51,518	(1,489	)	(2.9	)		428	388	40	10.3
Total firm sales and transportation	117,193	107,860	9,333		8.7		(b)	1,258	1,038	220	21.2		101,923	109,441	(7,518	)	(6.9	)	(b)	1,204	1,263	(59)	(4.7	)
Interruptible sales (c)	6,526	7,587	(1,061	)	(14.0	)		30	29	1	3.4		4,987	5,401	(414	)	(7.7	)		18	28	(10)	(35.7	)
NYPA	30,233	31,970	(1,737	)	(5.4	)		2	2	—	—		15,744	17,966	(2,222	)	(12.4	)		1	1	—	—
Generation plants	48,989	70,895	(21,906	)	(30.9	)		19	19	—	—		20,414	21,987	(1,573	)	(7.2	)		10	11	(1)	(9.1	)
Other	16,756	16,442	314		1.9			24	25	(1)	(4.0	)	12,024	11,454	570		5.0			21	18	3	16.7
Other operating revenues (d)	—	—	—		—			88	—	88	—		—	—	—		—			(4)	9	(13)	Large
Total	219,697	234,754	(15,057	)	(6.4	)%		$1,421	$1,113	$308	27.7	%	155,092	166,249	(11,157	)	(6.7	)%		$1,250	$1,330	$(80)	(6.0	)%


(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~~decreased 0.4 percent in the ~~nine~~six months ended ~~September~~June 30, ~~2017~~2020 compared with the ~~2016 period, reflecting primarily increased volumes attributable to the growth in the number of gas customers.~~2019 period. See “Coronavirus Disease 2019 (COVID-19) Impacts,” above.


(c)	Includes ~~3,563 thousands~~2,285 thousand and ~~3,940 thousands~~2,733 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 $308~~ decreased $80 million in the ~~nine~~six months ended ~~September~~June 30, ~~2017~~2020 compared with the ~~2016~~2019 period primarily due ~~primarily~~ to ~~higher revenues from the gas rate plan and growth in the number of customers ($133 million) and increased~~lower gas purchased for resale expense ($~~155~~133 million) and a certain rate plan reconciliation ($7 million), offset in part by an increase in revenues from the new gas rate plan ($62 million).

Gas purchased for resale ~~increased $155~~ decreased $133 million in the ~~nine~~six months ended ~~September~~June 30, ~~2017~~2020 compared with the ~~2016~~2019 period due to ~~higher~~lower unit costs ($~~151~~88 million) and purchased volumes ($445 million).

Other operations and maintenance expenses ~~increased $23~~decreased $22 million in the ~~nine~~six months ended ~~September~~June 30, ~~2017~~2020 compared with the ~~2016~~2019 period primarily due ~~primarily~~ to ~~higher~~lower costs for pension and other postretirement benefits ~~costs~~ ($718 million), ~~health and life expenses ($5 million),~~lower surcharges for assessments and fees that are collected in revenues from customers ($3 million), lower stock-based compensation ($3 million) and lower healthcare costs ~~for maintenance of gas mains~~ ($2 million), offset in part by incremental costs associated with COVID-19 ($4 million).

Depreciation and amortization increased ~~$19~~$32 million in the ~~nine~~six months ended ~~September~~June 30, ~~2017~~2020 compared with the ~~2016~~2019 period primarily due ~~primarily~~ to higher gas utility plant ~~balances.~~balances and higher depreciation rates.

Taxes, other than income taxes increased ~~$22~~$7 million in the ~~nine~~six months ended ~~September~~June 30, ~~2017~~2020 compared with the ~~2016~~2019 period primarily due ~~primarily~~ to higher property taxes ($1217 million), and state and local taxes ($61 million), offset in part by higher deferral of under-collected property taxes ($10 million) and lower payroll taxes ($31 million). that includes the Employee Retention Credit created under the CARES Act. See “Coronavirus Disease 2019 (COVID-19) Impacts - Impact of CARES Act on Accounting for Income Taxes,” above.

5569

~~Table of Contents~~

Steam

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


	For the Nine Months Ended			For the Six Months Ended
(Millions of Dollars)	September 30, 2017	September 30, 2016	Variation	June 30, 2020	June 30, 2019	Variation
Operating revenues	$448	$406	$42	$334	$411	$(77)
Purchased power	26	25	1	14	19	(5)
Fuel	74	52	22	63	86	(23)
Other operations and maintenance	134	139	(5)	82	90	(8)
Depreciation and amortization	64	62	2	45	44	1
Taxes, other than income taxes	98	89	9	72	80	(8)
Steam operating income	$52	$39	$13	$58	$92	$(34)

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


	Millions of Pounds Delivered							Revenues in Millions					Millions of Pounds Delivered							Revenues in Millions
	For the Nine Months Ended							For the Nine Months Ended					For the Six Months Ended							For the Six Months Ended
Description	September 30, 2017	September 30, 2016	Variation		Percent Variation			September 30, 2017	September 30, 2016	Variation	Percent Variation		June 30, 2020	June 30, 2019	Variation		Percent Variation			June 30, 2020	June 30, 2019	Variation	Percent Variation
General	364	345	19		5.5	%		$20	$18	$2	11.1	%	327	388	(61	)	(15.7	)%		$16	$19	$(3)	(15.8	)%
Apartment house	4,248	4,251	(3	)	(0.1	)		119	107	12	11.2		3,213	3,609	(396	)	(11.0	)		91	107	(16)	(15.0	)
Annual power	10,074	10,640	(566	)	(5.3	)		300	284	16	5.6		6,438	7,940	(1,502	)	(18.9	)		213	268	(55)	(20.5	)
Other operating revenues (a)	—	—	—		—			9	(3)	12	Large		—	—	—		—			14	17	(3)	(17.6	)
Total	14,686	15,236	(550	)	(3.6	)%	(b)	$448	$406	$42	10.3	%	9,978	11,937	(1,959	)	(16.4	)%	(b)	$334	$411	$(77)	(18.7	)%


(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~~5.9 percent in the ~~nine~~six months ended ~~September~~June 30, ~~2017~~2020 compared with the ~~2016~~2019 period. See “Coronavirus Disease 2019 (COVID-19) Impacts,” above.

Operating revenues ~~increased $42~~ decreased $77 million in the ~~nine~~six months ended ~~September~~June 30, ~~2017~~2020 compared with the ~~2016~~2019 period primarily due to the impact of warmer winter weather ($28 million), lower fuel expenses ($23 million), lower revenues from the steam rate plan due to lower usage by customers ($15 million) and lower purchased power expenses ($5 million).

Purchased power expenses decreased $5 million in the six months ended June 30, 2020 compared with the 2019 period due ~~primarily~~ to ~~higher fuel expenses ($22 million), the weather impact on revenues~~lower unit costs ($6 million), ~~lower regulatory reserve related to steam earnings sharing ($7 million), a property tax refund incentive ($3 million), and~~offset in part by higher purchased ~~power costs~~volumes ($1 million).

~~Purchased power~~Fuel expenses ~~increased $1~~decreased $23 million in the ~~nine~~six months ended ~~September~~June 30, ~~2017~~2020 compared with the ~~2016~~2019 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 ($113 million) and unit costs ($10 million).

Other operations and maintenance expenses decreased $5$8 million in the ~~nine~~six months ended ~~September~~June 30, ~~2017~~2020 compared with the ~~2016~~2019 period primarily due ~~primarily~~ to lower ~~equipment maintenance expenses.~~costs for pension and other postretirement benefits ($5 million), lower stock-based compensation ($1 million) and lower healthcare costs ($1 million), offset in part by incremental costs associated with COVID-19 ($1 million).

Depreciation and amortization increased $2$1 million in the ~~nine~~six months ended ~~September~~June 30, ~~2017~~2020 compared with the ~~2016~~2019 period primarily due ~~primarily~~ to higher steam utility plant balances.

Taxes, other than income taxes ~~increased $9~~ decreased $8 million in the ~~nine~~six months ended ~~September~~June 30, ~~2017~~2020 compared with the ~~2016~~2019 period primarily due ~~primarily~~ to higher deferral of under-collected property taxes ($712 million) and lower state and local taxes ($12 million), offset in part by higher property taxes ($6 million).

Other Income (Deductions)

Other income (deductions) decreased $78 million in the six months ended June 30, 2020 compared with the 2019 period primarily due to higher costs associated with components of pension and other postretirement benefits other than service cost ($70 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 increased ~~$12~~$8 million in the ~~nine~~six months ended ~~September~~June 30, ~~2017~~2020 compared with the ~~2016~~2019 period primarily due ~~primarily~~ to higher interest on long-term debt ~~balances~~($23 million), offset in part by a decrease in interest accrued on the ~~2017 period.~~TCJA related regulatory liability ($6 million), lower interest expense for short-term debt ($4 million) and lower interest accrued on the system benefit charge liability ($4 million).

~~Table of Contents~~

Income Tax Expense

Income taxes ~~increased $60~~decreased $49 million in the ~~nine~~six months ended ~~September~~June 30, ~~2017~~2020 compared with the ~~2016~~2019 period primarily due ~~primarily~~ to ~~higher~~lower income before income tax expense ($3312 million), ~~a decrease~~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 ($49 million) and higher flow-through tax benefits ~~for~~on plant-related ~~flow through~~ items ($~~27 million), lower research and development tax credits ($10 million) and a higher reserve for injuries and damages ($9~~8 million), offset in part by ~~lower~~the absence of the amortization of excess deferred state income taxes ($710 million), higher ~~research~~cost of removal expenses ($8 million), and ~~development tax credits included in Con Edison's filing of its 2016 consolidated federal tax return in September 2017~~higher allowance for uncollectible accounts ($~~5 million), a decrease in bad debt expense ($2 million) and a decrease in uncertain tax positions ($1~~3 million).

O&R


	For the Nine Months Ended September 30, 2017			For the Nine Months Ended September 30, 2016				For the Six Months Ended June 30, 2020			For the Six Months Ended June 30, 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	$495	$172	$667	$497	$133	$630	$37	$274	$134	$408	$283	$154	$437	$(29)
Purchased power	148	—	148	154	—	154	(6)	71	—	71	85	—	85	(14)
Gas purchased for resale	—	52	52	—	32	32	20	—	33	33	—	57	57	(24)
Other operations and maintenance	185	51	236	180	40	220	16	118	34	152	110	34	144	8
Depreciation and amortization	38	15	53	37	13	50	3	32	13	45	30	12	42	3
Taxes, other than income taxes	41	21	62	40	20	60	2	26	16	42	27	15	42	—
Operating income	$83	$33	$116	$86	$28	$114	$2	$27	$38	$65	$31	$36	$67	$(2)

Electric

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


	For the Nine Months Ended			For the Six Months Ended
(Millions of Dollars)	September 30, 2017	September 30, 2016	Variation	June 30, 2020	June 30, 2019	Variation
Operating revenues	$495	$497	$(2)	$274	$283	$(9)
Purchased power	148	154	(6)	71	85	(14)
Other operations and maintenance	185	180	5	118	110	8
Depreciation and amortization	38	37	1	32	30	2
Taxes, other than income taxes	41	40	1	26	27	(1)
Electric operating income	$83	$86	$(3)	$27	$31	$(4)

5771

~~Table of Contents~~

O&R’s electric sales and deliveries for the ~~nine~~six months ended ~~September~~June 30, ~~2017~~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 Nine Months Ended							For the Nine Months Ended					For the Six Months Ended							For the Six Months Ended
Description	September 30, 2017	September 30, 2016	Variation		Percent Variation			September 30, 2017	September 30, 2016	Variation	Percent Variation		June 30, 2020	June 30, 2019	Variation		Percent Variation			June 30, 2020	June 30, 2019	Variation		Percent Variation
Residential/Religious (b)	1,208	1,307	(99	)	(7.6	)%		$242	$240	$2	0.8	%	767	753	14		1.9	%		$137			$—	—
Commercial/Industrial	574	607	(33	)	(5.4	)		88	89	(1)	(1.1	)	382	386	(4	)	(1.0	)		53	51	2		3.9
Retail choice customers	2,255	2,434	(179	)	(7.4	)		155	166	(11)	(6.6	)	1,254	1,397	(143	)	(10.2	)		82	85	(3)		(3.5	)
Public authorities	79	76	3		3.9			7	6	1	16.7		50	50	—		—			3	4	(1)		(25.0	)
Other operating revenues (c)	—	—	—		—			3	(4)	7	Large		—	—	—		—			(1)	6	(7)		Large
Total	4,116	4,424	(308	)	(7.0	)%	(d)	$495	$497	$(2)	(0.4	)%	2,453	2,586	(133	)	(5.1	)%	(d)	$274	$283	$(9)		(3.2	)%


(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 ~~2.2~~1.3 percent in the ~~nine~~six months ended ~~September~~June 30, ~~2017~~2020 compared with the ~~2016~~2019 period. See “Coronavirus Disease 2019 (COVID-19) Impacts,” above.

Operating revenues decreased $9 million in the six months ended June 30, 2020 compared with the 2019 period primarily due to lower purchased power expenses.

Purchased power expenses decreased $14 million in the six months ended June 30, 2020 compared with the 2019 period due to lower unit costs ($11 million) and purchased volumes ($3 million).

Other operations and maintenance expenses increased $8 million in the six months ended June 30, 2020 compared with the 2019 period primarily due to incremental costs associated with COVID-19 ($3 million), the amortization of prior deferred storm costs ($1 million), higher healthcare costs ($1 million), higher tree trimming costs ($1 million) and higher pension costs ($1 million).

Depreciation and amortization increased $2 million in the ~~nine~~six months ended ~~September~~June 30, ~~2017~~2020 compared with the ~~2016~~2019 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~~ decreased $1 million in the ~~nine~~six months ended ~~September~~June 30, ~~2017~~2020 compared with the ~~2016~~2019 period primarily due ~~primarily~~ to lower payroll taxes ($1 million) that includes the Employee Retention Credit created under the CARES Act (see “Coronavirus Disease 2019 (COVID-19) Impacts - Impact of CARES Act on Accounting for Income Taxes,” above), offset in part by higher property ~~taxes.~~taxes ($1 million).

Gas

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


	For the Nine Months Ended			For the Six Months Ended
(Millions of Dollars)	September 30, 2017	September 30, 2016	Variation	June 30, 2020	June 30, 2019	Variation
Operating revenues	$172	$133	$39	$134	$154	$(20)
Gas purchased for resale	52	32	20	33	57	(24)
Other operations and maintenance	51	40	11	34		—
Depreciation and amortization	15	13	2	13	12	1
Taxes, other than income taxes	21	20	1	16	15	1
Gas operating income	$33	$28	$5	$38	$36	$2

~~Table of Contents~~

O&R’s gas sales and deliveries, excluding off-system sales, for the ~~nine~~six months ended ~~September~~June 30, ~~2017~~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 Nine Months Ended							For the Nine Months Ended					For the Six Months Ended							For the Six Months Ended
Description	September 30, 2017	September 30, 2016	Variation		Percent Variation			September 30, 2017	September 30, 2016	Variation	Percent Variation		June 30, 2020	June 30, 2019	Variation		Percent Variation			June 30, 2020	June 30, 2019	Variation	Percent Variation
Residential	5,556	5,266	290		5.5	%		$79	$55	$24	43.6	%	5,761	6,253	(492	)	(7.9	)%		$70	$87	$(17)	(19.5	)%
General	1,447	1,224	223		18.2			16	10	6	60.0		1,225	1,448	(223	)	(15.4	)		12	17	(5)	(29.4	)
Firm transportation	6,543	7,188	(645	)	(9.0	)		50	49	1	2.0		4,995	5,579	(584	)	(10.5	)		38	37	1	2.7
Total firm sales and transportation	13,546	13,678	(132	)	(1.0	)	(b)	145	114	31	27.2		11,981	13,280	(1,299	)	(9.8	)	(b)	120	141	(21)	(14.9	)
Interruptible sales	2,966	3,020	(54	)	(1.8	)		5	2	3	Large		1,936	1,892	44		2.3			3		—	—
Generation plants	6	15	(9	)	(60.0	)		—	—	—	—		3	—	3		Large			—	—	—	—
Other	589	583	6		1.0			1	—	1	—		499	563	(64	)	(11.4	)		—	—	—	—
Other gas revenues	—	—	—		—			21	17	4	23.5	%	—	—	—		—			11	10	1	10	%
Total	17,107	17,296	(189	)	(1.1	)%		$172	$133	$39	29.3	%	14,419	15,735	(1,316	)	(8.4	)%		$134	$154	$(20)	(13.0	)%


(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~~decreased 0.4 percent in the ~~nine~~six months ended ~~September~~June 30, ~~2017~~2020 compared with ~~2016~~2019 period. See “Coronavirus Disease 2019 (COVID-19) Impacts,” above.

Operating revenues ~~increased $39~~ decreased $20 million in the ~~nine~~six months ended ~~September~~June 30, ~~2017~~2020 compared with the ~~2016~~2019 period primarily due ~~primarily~~ to ~~an increase~~a decrease in gas purchased for resale ($2024 million) ~~and~~, offset in part by higher revenues from the New York gas rate plan ($142 million).

Gas purchased for resale ~~increased $20~~ decreased $24 million in the ~~nine~~six months ended ~~September~~June 30, ~~2017~~2020 compared with the ~~2016~~2019 period due to ~~higher~~lower unit costs ($18 million) and purchased volumes ($126 million).

Depreciation and ~~unit costs ($8 million).~~

~~Other operations and maintenance~~ ~~expenses~~ amortization increased ~~$11~~$1 million in the ~~nine~~six months ended ~~September~~June 30, ~~2017~~2020 compared with the ~~2016~~2019 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~~six months ended ~~September~~June 30, ~~2017~~2020 compared with the ~~2016~~2019 period primarily 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).

~~Table of Contents~~

Clean Energy Businesses

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


	For the Nine Months Ended			For the Six Months Ended
(Millions of Dollars)	September 30, 2017	September 30, 2016	Variation	June 30, 2020	June 30, 2019	Variation
Operating revenues	$460	$998	$(538)	$344	$450	$(106)
Purchased power	(3)	676	(679)
Gas purchased for resale	161	72	89	16	124	(108)
Other operations and maintenance	174	124	50	107	115	(8)
Depreciation and amortization	54	30	24	115	116	(1)
Taxes, other than income taxes	12	16	(4)	10	12	(2)
Gain on sale of retail electric supply business (2016) and solar electric production project (2017) (a)	(1)	(104)	103
Operating income	$63	$184	$(121)	$96	$83	$13

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

Operating revenues decreased ~~$538~~$106 million in the ~~nine~~six months ended ~~September~~June 30, ~~2017~~2020 compared with the ~~2016~~2019 period primarily due ~~primarily~~ to lower ~~electric retail~~wholesale revenues ~~of $781 million from the sale of the retail electric supply business~~($111 million) and lower energy services revenues ($17 million), offset in ~~September 2016. Renewable revenues increased $112 million due primarily to an increase in~~part by higher renewable electric production ~~projects in operation~~revenues ($20 million) 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. Netnet 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.~~($2 million).

~~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~~ decreased $108 million in the ~~nine~~six months ended ~~September~~June 30, ~~2017~~2020 compared with the ~~2016~~2019 period primarily due to ~~higher~~lower purchased volumes.

Other operations and maintenance expenses ~~increased $50~~decreased $8 million in the ~~nine~~six months ended ~~September~~June 30, ~~2017~~2020 compared with the ~~2016~~2019 period primarily due 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 $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~~six months ended ~~September~~June 30, ~~2017~~2020 compared with the ~~2016~~2019 period primarily due ~~primarily~~ to ~~earnings from equity investments.~~the Employee Retention Credit created under the CARES Act. See “Coronavirus Disease 2019 (COVID-19) Impacts - Impact of CARES Act on Accounting for Income Taxes,” above.

Net Interest Expense

Net interest expense increased ~~$11~~$51 million in the ~~nine~~six months ended ~~September~~June 30, ~~2017~~2020 compared with the ~~2016~~2019 period primarily due ~~primarily~~ to ~~increased debt~~higher unrealized losses on ~~solar electric production projects.~~interest rate swaps in the 2020 period.

~~Table of Contents~~

Income Tax Expense

Income taxes decreased ~~$68~~$11 million in the ~~nine~~six months ended ~~September~~June 30, ~~2017~~2020 compared with the ~~2016~~2019 period primarily due ~~primarily~~ to lower income before income tax expense ($548 million), higher renewable energy ~~tax~~ credits ($12 million) ~~and the increase to deferred~~, lower state income taxes ($2 million) and a tax benefit due to the change in ~~2016~~the federal corporate income tax rate recognized for a loss carryback from the 2018 tax year to the 2013 tax year as ~~a result~~allowed under the CARES Act signed into law during the first quarter of ~~the sale of the retail electric supply business that increased the Clean Energy Businesses’ state apportionment factor on its cumulative temporary differences~~2020 ($134 million), offset in part by lower income attributable to non-controlling interest ($5 million).

Income Attributable to Non-Controlling Interest

Income attributable to non-controlling interest decreased $19 million in the six months ended June 30, 2020 compared with the 2019 period primarily due to lower income attributable in the 2020 period to a tax equity investor in renewable electric production projects accounted for under the HLBV method of accounting. See Note O to the Second Quarter Financial Statements.

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~~$2 million in the ~~nine~~six months ended ~~September~~June 30, ~~2017~~2020 compared with the ~~2016~~2019 period primarily due ~~primarily~~ to higher income before income tax ~~expense.~~expense ($1 million) and higher state income taxes ($1 million).

Other

~~For Con Edison, “Other” includes parent company~~Income Tax Expense

Income taxes decreased $5 million in the six months ended June 30, 2020 compared with the 2019 period primarily due to lower state income taxes ($3 million) and ~~consolidation adjustments.~~the absence of an increase in uncertain tax positions in 2019 ($2 million).

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~~

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


	For the Nine Months Ended September 30,						For the Six Months Ended June 30,
	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)	$975	$1,291	$74	$124	$653	$154	$(4)		$82		$(518)	$(113)	$1,180	$1,538
Investing activities	(2,572)	(3,717)	1,145	(2,197)	(1,943)	(254)	(1,574)	(1,591)	(95)	(116)	(273)	(92)	10		(78)		—	1	(1,932)	(1,876)
Financing activities	(362)	583	(945)	(278)	(891)	613	762	268	8	(36)	(405)	(32)	(6)		(6)		521	108	880	302
Net change for the period	(707)	(798)	91	(685)	(817)	132	163	(32)	(13)	(28)	(25)	30	—		(2)		3	(4)	128	(36)
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)	$1,096	$786	$19	$24	$226	$156		$—		$—	$4	$4	$1,345	$970
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 Second Quarter Financial Statements.

6175

~~Table of Contents~~

Cash Flows from Operating Activities

The Utilities’ cash flows from operating activities primarily reflect ~~primarily~~ their energy sales and deliveries and cost of operations. The volume of energy sales and deliveries is primarily 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 has resulted and may continue to 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 Second 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~~six months ended ~~September~~June 30, ~~2017~~2020 for Con Edison and CECONY were ~~$109~~$358 million and ~~$227~~$316 million lower, respectively, than in the ~~2016~~2019 period. The ~~change~~changes in net cash flows for Con Edison and CECONY ~~reflects~~ primarily reflect higher ~~cash paid~~accounts receivable balances from customers ($278 million and $249 million, respectively) (see “Coronavirus Disease 2019 (COVID-19) Impacts - Accounting Considerations” and “Liquidity and Financing,” above), lower other receivables and other current assets ($135 million and $98 million, respectively) primarily due to lower reimbursement received for ~~income taxes~~Puerto Rico related restoration costs in the ~~2017~~2020 period, ~~as compared with the 2016 period of $110~~a change in pension and retiree benefit obligations ($68 million and ~~$226~~$63 million, ~~respectively,~~respectively) and lower system benefit charge ($45 million and $44 million, respectively), offset in part by lower TCJA net ~~of refunds received. The income tax refund received~~benefits provided to customers in ~~2016 reflected~~ the ~~extension of bonus depreciation in late 2015, resulting in a refund of the 2015 estimated federal tax payments.~~2020 period ($147 million and $147 million, 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~~$56 million ~~lower~~higher and ~~$254~~$17 million ~~higher,~~lower, respectively, for the ~~nine~~six months ended ~~September~~June 30, ~~2017~~2020 compared with the ~~2016~~2019 period. The change for Con Edison primarily reflects ~~primarily~~an increase in non-utility construction expenditures at the Clean Energy Businesses ($166 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~~73 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 ($8866 million) and O&R ($19 million).

Cash Flows from Financing Activities

Net cash flows from financing activities for Con Edison and CECONY were ~~$945~~$578 million ~~lower~~ and ~~$613~~$494 million higher, respectively, in the ~~nine~~six months ended ~~September~~June 30, ~~2017~~2020 compared with the ~~2016~~2019 period.

In ~~August 2017,~~July 2020, Con Edison borrowed $820 million pursuant to an April 2020 credit agreement that was amended in June 2020 (as amended, the Supplemental Credit Agreement). Con Edison used the proceeds from the borrowing

for general corporate purposes, including repayment of short-term debt bearing interest at variable rates. See Note D to the Second Quarter Financial Statements.

In May 2019, Con Edison entered into a forward sale agreement relating to 5,800,000 shares of its common stock. In June 2019, the company issued 4,750,000 shares for $400 million upon physical settlement of shares subject to the forward sale agreement and in January 2020, Con Edison issued ~~4.1~~1,050,000 shares of its common stock for $88 million ~~common~~upon physical settlement of the remaining shares ~~resulting in net proceeds of $343 million, after issuance expenses, that were invested by~~subject to its May 2019 forward sale agreement. Con Edison used the proceeds to invest in CECONY for funding of its capital requirements and other general corporate purposes. See Note C to the Second 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 ~~principally CECONY and the Clean Energy Businesses,~~ for funding of their ~~construction expenditures~~capital requirements and to repay short-term debt incurred for ~~other general corporate purposes.~~that purpose.

In February 2019, Con Edison borrowed $825 million 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 borrowed.

In June ~~2017,~~2020, CECONY redeemed at maturity $350 million of 4.45 percent 10-year debentures.

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

In May 2019, CECONY issued $700 million aggregate principal amount of 4.125 percent debentures, due 2049, the net proceeds from the sale of which were used to repay short-term borrowings and for other general corporate purposes.

In April 2019, CECONY redeemed at maturity $475 million of 6.65 percent 10-year debentures.

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,~~May 2019, a Con Edison Development subsidiary ~~issued $97~~borrowed $464 million, ~~aggregate principal amount of 4.45 percent senior notes,~~ due ~~2042,~~2026, secured by ~~the company’s Upton County Solar project.~~

~~Table of Contents~~

~~In June 2016, CECONY issued $550 million aggregate principal amount of 3.85 percent debentures, due 2046,~~equity interests in solar electric production projects, the net proceeds from the sale of which were used to repay borrowings from Con Edison and for other general corporate purposes. Con Edison used a portion of the repayment to pre-pay $150 million of an $825 million two-year variable-rate term loan and the remainder 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 Con Edison Development subsidiary issued $218 million aggregate principal amount of 4.21 percent senior notes, due 2041, secured by the company's Texas Solar 7 solar project.~~

Con Edison’s cash flows from financing for ~~nine~~the six months ended ~~September~~June 30, ~~2017~~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~~$52 million and ~~$77~~$51 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~~ June��30, ~~2017~~2020 and ~~2016~~2019 and the average daily balances for the ~~nine~~six months ended ~~September~~June 30, ~~2017~~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 June 30,	Daily average	Outstanding at June 30,	Daily average
Con Edison	$356	$645	$601	$813	$1,813	$1,117	$1,161	$1,111
CECONY	$147	$323	$480	$385	$1,115	$547	$849	$711
Weighted average yield	1.3	1.1	0.7	0.6	0.2	1.6	2.6	2.7

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 $56,926 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 June 30, 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 June 30, 2020 is primarily due to increases in long-term debt ($1,160 million) and interest on long-term debt ($938 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

~~Table of Contents~~

Capital Resources

For each of the Companies, the common equity ratio at ~~September~~June 30, ~~2017~~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	June 30, 2020	December 31, 2019
Con Edison	50.8	49.3	49.1	49.6
CECONY	50.9	49.5	47.8	49.2

At June 30, 2020, the credit ratings assigned by Moody’s, S&P and Fitch to the senior unsecured debt and commercial paper of Con Edison, CECONY and O&R were as follows:

~~Other Changes in Assets and Liabilities~~

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

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



	Moody's	S&P	Fitch
Con Edison
Senior Unsecured Debt	Baa2	BBB+	BBB+
Commercial Paper	P-2	A-2	F2
CECONY
Senior Unsecured Debt	Baa1	A-	A-
Commercial Paper	P-2	A-2	F2
O&R
Senior Unsecured Debt	Baa1	A-	A-
Commercial Paper	P-2	A-2	F2

~~Prepayments~~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.

Assets, Liabilities and Equity

The ~~increase in prepayments for~~Companies' assets, liabilities, and equity at June 30, 2020 and December 31, 2019 are summarized as follows.



	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	$3,747	$3,543	$231	$243	$568	$511	$22	$2	$(4)	$(27)	$4,564	$4,272
Investments	475	461	25	26	—	—	1,587	1,585	(7)	(7)	2,080	2,065
Net plant	38,205	37,414	2,377	2,336	4,299	4,121	17	17	(1)	1	44,897	43,889
Other noncurrent assets	4,897	5,139	376	401	1,852	1,896	14	14	401	403	7,540	7,853
Total Assets	$47,324	$46,557	$3,009	$3,006	$6,719	$6,528	$1,640	$1,618	$389	$370	$59,081	$58,079

LIABILITIES AND SHAREHOLDERS' EQUITY
Current liabilities	$4,127	$4,131	$285	$311	$1,217	$1,525	$122	$135	$954	$185	$6,705	$6,287
Noncurrent liabilities	13,378	13,665	1,128	1,115	177	201	101	88	2	(17)	14,786	15,052
Long-term debt	15,554	14,614	818	818	2,858	2,400	500	500	(581)	195	19,149	18,527
Equity	14,265	14,147	778	762	2,467	2,402	917	895	14	7	18,441	18,213
Total Liabilities and Equity	$47,324	$46,557	$3,009	$3,006	$6,719	$6,528	$1,640	$1,618	$389	$370	$59,081	$58,079

(a) Includes parent company and consolidation adjustments.

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

CECONY

Current assets at June 30, 2020 were $204 million higher than at December 31, 2019. The change in current assets primarily reflects an increase in cash and temporary cash investments ($163 million), accounts receivables, less allowance for uncollectible accounts ($90 million) and revenue decoupling mechanism receivable ($71 million), offset in part by a decrease in accrued unbilled revenue ($82 million).

Investments at June 30, 2020 were $14 million higher than at December 31, 2019. The change in investments primarily ~~the portion allocable~~reflects an increase in supplemental retirement income plan assets. See Note E to the ~~2017 fourth quarter of CECONY's July 2017 payment of its New York City semi-annual property taxes.~~Second Quarter Financial Statements.

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

Net plant at June 30, 2020 was $791 million higher than at December 31, 2019. The change in net plant primarily reflects an increase in ~~non-utility property, less~~electric ($671 million), gas ($333 million) and steam ($28 million) plant balances and an increase in construction work in progress ($143 million), offset in part by an increase in accumulated depreciation ~~for Con Edison~~($438 million).

Other noncurrent assets at June 30, 2020 were $242 million lower than at December 31, 2019. The change in other noncurrent assets primarily 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~~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 ($456 million). See Notes B, E and F to the Second 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 ($149 million) and deferred derivative losses ($57 million). See “Other Regulatory Matters” in Note B to the Second Quarter Financial Statements.

Noncurrent liabilities at June 30, 2020 were $287 million lower than at December 31, 2019. The change in noncurrent liabilities primarily reflects a decrease in the liability for pension and retiree benefits ($285 million) that 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. See Notes E and F to the Second Quarter Financial Statements. The change also reflects a decrease in the regulatory liability for future income tax ($100 million) and TCJA net benefits ($88 million). These decreases are offset in part by a change in deferred income taxes and unamortized investment tax credits ($159 million) that primarily reflects accelerated tax depreciation, repair deductions and the amortization of excess deferred federal income taxes due to the TCJA. See Note J to the Second Quarter Financial Statements.

Long-term debt at June 30, 2020 was $940 million higher than at December 31, 2019. The change in long-term debt primarily reflects the March 2020 issuance of $1,600 million of debentures, offset in part by the reclassification of $640 million of long-term debt to long-term debt due within one year. See "Liquidity and Capital Resources – Cash Flows From Financing Activities" above and Note C to the Second Quarter Financial Statements.

Equity at June 30, 2020 was $118 million higher than at December 31, 2019. The change in equity primarily reflects net income for the six months ended June 30, 2020 ($558 million) and capital contributions from parent ($50 million) in 2020, offset in part by common stock dividends to parent ($491 million) in 2020.

O&R

Net plant at June 30, 2020 was $41 million higher than at December 31, 2019. The change in net plant primarily reflects an increase in electric ($38 million) and gas ($15 million) plant balances and an increase in construction work in progress ($20 million), offset in part by an increase in accumulated depreciation ($33 million).

Other noncurrent assets at June 30, 2020 were $25 million lower than at December 31, 2019. The change in other noncurrent assets primarily reflects a decrease in the regulatory asset for unrecognized pension and other postretirement costs 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 ($13 million). The change in the regulatory asset also reflects the ~~year’s~~year's amortization of accounting costs. The change in other noncurrent assets also reflects a decrease in the regulatory asset for deferred storm costs ($7 million) and a decrease in other work in progress ($6 million).

Current liabilities at June 30, 2020 were $26 million lower than at December 31, 2019. The change in current liabilities primarily reflects a decrease in accounts payable ($16 million), accrued taxes to affiliated companies ($12 million), billing overcollections ($8 million) and a decrease in the current regulatory liability for ~~pension~~refundable energy ($9 million) and ~~retiree benefits reflects~~revenue decoupling mechanism reconciliation ($7 million), offset in part by higher notes payable ($28 million).

Equity at June 30, 2020 was $16 million higher than at December 31, 2019. The change in equity primarily reflects net income for the six months ended June 30, 2020 ($29 million), an increase in other comprehensive income ($6 million) and capital contributions from parent ($5 million) in 2020, offset in part by common stock dividends to parent ($25 million) in 2020.

Clean Energy Businesses

Current assets at June 30, 2020 were $57 million higher than at December 31, 2019. The change in current assets primarily reflects an increase in accrued receivables and cash.

Net plant at June 30, 2020 was $178 million higher than at December 31, 2019. The change in net plant primarily reflects additional capital expenditures, offset in part by an increase in accumulated depreciation.

Other noncurrent assets at June 30, 2020 were $44 million lower than at December 31, 2019. The change in other noncurrent assets primarily reflects the amortization of the purchase power agreement intangible assets.

Current liabilities at June 30, 2020 were $308 million lower than at December 31, 2019. The change in current liabilities primarily reflects the reclassification of the company’s PG&E-related non-recourse project debt with a maturity longer than one year from long-term debt due within one year to long-term debt ($898 million) (see Note C to the ~~plans made~~Second Quarter Financial Statements), offset in part by the ~~Utilities~~reclassification of an intercompany loan agreement from the parent company from long-term debt to current liabilities ($400 million) and additional working capital requirements.

Noncurrent liabilities at June 30, 2020 were $24 million lower than at December 31, 2019. The change in ~~2017. See Notes E and F to~~noncurrent liabilities primarily reflects the ~~Third Quarter Financial Statements.~~

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

~~The increase~~change in ~~the liability for~~ deferred ~~income~~ taxes and ~~unamortized investment tax credits for Con Edison and CECONY reflects primarily bonus depreciation in 2017, partially offset 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)," offset in part by the change in the fair value of derivative liabilities.

Long-term debt at June 30, 2020 was $458 million higher than at December 31, 2019. The change in long-term debt primarily reflects the reclassification of the company’s PG&E-related non-recourse project debt with a maturity

longer than one year from long-term debt due within one year to long-term debt ($898 million) (see Note C to the Second Quarter Financial Statements), offset in part by the reclassification of an intercompany loan agreement from the parent company from long-term debt to current liabilities ($400 million).

Equity at June 30, 2020 was $65 million higher than at December 31, 2019. The change in equity primarily reflects capital contributions from parent ($100 million) in 2020 and an increase in noncontrolling interest ($24 million) in 2020, offset in part by a net ~~operating~~ loss for the six months ended June 30, 2020 ($49 million) and ~~general business tax credits.~~common stock dividends to parent ($10 million) in 2020.

CET

Current assets at June 30, 2020 were $20 million higher than at December 31, 2019. The change in current assets primarily reflects 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 ~~Note I~~"Con Edison Transmission" below.

Investments at June 30, 2020 were $2 million higher than at December 31, 2019. The change in investments primarily reflects increased allowance for funds used during construction (AFUDC) income from Mountain Valley Pipeline, LLC ($29 million) and investment income from NY Transco ($4 million), offset in part by investment income less partnership distribution from Stagecoach Services ($12 million) and the decrease in CET Gas' investment in Stagecoach Gas Services, LLC due to the ~~Third Quarter Financial Statements.~~receivable from Crestwood described above ($19 million).

~~System Benefit Charge~~

Equity at June 30, 2020 was $22 million higher than at December 31, 2019. The ~~increase~~change in ~~the liability~~equity primarily reflects net income for the ~~system benefit charge reflects amounts collected~~six months ended June 30, 2020 ($28 million), offset in part by ~~the Utilities from their customers that will be required~~common stock dividends to ~~be paid to NYSERDA.~~parent ($6 million) in 2020.

Off-Balance Sheet Arrangements

~~None~~At June 30, 2020, none of the Companies’ transactions, agreements or other contractual arrangements ~~meets~~meet the SEC definition of off-balance sheet arrangements.

~~Table of Contents~~

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~~Second 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.

~~Table of Contents~~

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~~Second Quarter Financial Statements.

~~Con Edison Development~~

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~~June 30, ~~2017:~~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	73	(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
Crane Solar	112	12	2020	Texas	Vistra
Other	26	Various	Various	Various	Various
Total Solar	2,357
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	30	Various	Various	Various	Various
Total Wind	410
Total MW (AC) in Operation	2,767
Total MW (AC) in Construction	607
Total MW (AC) Utility Scale	3,374
Behind the Meter
Total MW (AC) in Operation	56
Total MW (AC) in Construction	13
Total MW Behind the Meter	69


(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 emergence from bankruptcy, see “Long-Lived and Intangible Assets” in Note A to the Second 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 Second Quarter Financial Statements.

~~(a) Represents Con Edison Development’s ownership interest in the project.~~

~~(b) Represents PPA contractual term or remaining term 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 ~~Energy Credit hedges in place, in lieu of PPAs, out to 2020.~~Electric Generation

~~(e) Project has been pledged to secure financing for the project.~~

~~(f) All of the jointly-owned projects are 50 percent owned, except for Texas Solar 4 (which is 80 percent owned). See Note M to the Third~~

~~Quarter Financial Statements.~~

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

~~Table of Contents~~


	Millions of kWh Generated										Millions of kWh
	For the Three Months Ended					For the Nine Months Ended					For the Three Months Ended					For the Six Months Ended
Description	September 30, 2017	September 30, 2016	Variation	Percent Variation		September 30, 2017	September 30, 2016	Variation	Percent Variation		June 30, 2020	June 30, 2019	Variation	Percent Variation		June 30, 2020	June 30, 2019	Variation	Percent Variation
Renewable electric production projects
Solar	668	458	210	45.9	%	1,679	1,215	464	38.2	%	1,784	1,688	96	5.7	%	2,939	2,732	207	7.6	%
Wind	217	137	80	58.4	%	734	464	270	58.2	%	388	354	34	9.6	%	738	661	77	11.6	%
Total	885	595	290	48.7	%	2,413	1,679	734	43.7	%	2,172	2,042	130	6.4	%	3,677	3,393	284	8.4	%

Con Edison Transmission

CET Gas

In June 2020, the operator of the Mountain Valley Pipeline, which is being constructed by a joint venture in which CET Gas has a 12.1 percent ownership interest (that is expected to be reduced below 10 percent based on the current project cost estimate), indicated that it now expects an early 2021 full in-service date for the project. The operator indicated that total project costs may potentially increase approximately 5% above the project’s $5,400 million estimate, excluding AFUDC. At June 30, 2020, CET Gas’s cash contributions to the joint venture amounted to $530 million.

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~~relates 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 Second Quarter Financial Statements. Con Edison and CECONY estimate that at ~~September~~June 30, ~~2017,~~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$1 million. 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 primarily 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~~Second Quarter Financial Statements.

Con Edison estimates that, as of ~~September~~June 30, ~~2017,~~2020, a 10 percent decline in market prices would result in a decline in fair value of ~~$66~~$89 million for the derivative instruments used by the Utilities to hedge purchases of electricity and gas, of which ~~$60~~$84 million is for CECONY and $6$5 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.

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~~six months ended ~~September~~June 30, ~~2017~~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	June 30, 2020		December 31, 2019
	(Millions of Dollars)
Average for the period		$—		$—
High	—		1
Low	—		—

~~Table of Contents~~

~~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~~June 30, ~~2017,~~2020, the pension plan investments consisted of 5850 percent equity securities, 38 percent debt securities and 4212 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 concerning potential liabilities arising from the Companies’ material contingencies, see "Other Regulatory Matters" in Note B and Notes G and H to the ~~Third~~Second Quarter Financial Statements.

~~Table of Contents~~

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.

6985

~~Table of Contents~~

Part II Other Information

Item 1: Legal Proceedings

For information about certain legal proceedings affecting the Companies, see "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. In the second quarter, our service territories included 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 that 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 that 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 10.1	Commitment Increase Supplement, dated as of June 26, 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 June 26, 2020 (File No. 1-14514).
Exhibit 10.2	Amendment to the Consolidated Edison Retirement ~~Plan.~~Plan, effective March 27, 2020
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.

CECONY



Exhibit ~~10.2.1~~ 31.2.1	~~CECONY Supplemental Medical Benefits.~~
~~Exhibit 12.2~~	~~Statement of computation of CECONY’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 31.2.1~~	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.

~~Table of Contents~~

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~~August 6, 2020	By	/s/ Robert Hoglund
		Robert Hoglund Senior Vice President, Chief Financial Officer and Duly Authorized Officer

7188



	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