Consolidated Edison Company of New York, Inc.

CONSOLIDATED BALANCE SHEET (UNAUDITED)


	September 30, 2017	December 31, 2016
	(Millions of Dollars)
(Millions of Dollars)			(Millions of Dollars)	September 30, 2022	December 31, 2021
ASSETS			ASSETS
CURRENT ASSETS			CURRENT ASSETS
Cash and temporary cash investments	$17	$702	Cash and temporary cash investments	$25	$920
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, net allowance for uncollectible accounts of $297 and $304 in 2022 and 2021, respectively			Accounts receivable – customers, net allowance for uncollectible accounts of $297 and $304 in 2022 and 2021, respectively	1,982	1,841
Other receivables, net allowance for uncollectible accounts of $7 and $19 in 2022 and 2021, respectively			Other receivables, net allowance for uncollectible accounts of $7 and $19 in 2022 and 2021, respectively	116	121
Taxes receivable			Taxes receivable	5
Accrued unbilled revenue	382	399	Accrued unbilled revenue	450	549
Accounts receivable from affiliated companies	97	109	Accounts receivable from affiliated companies	104	38
Fuel oil, gas in storage, materials and supplies, at average cost	288	270	Fuel oil, gas in storage, materials and supplies, at average cost	440	369
Prepayments	498	100	Prepayments	771	212
Regulatory assets	100	90	Regulatory assets	271	188
Restricted cash	—	2

Revenue decoupling mechanism receivable			Revenue decoupling mechanism receivable	167	191
Fair value of derivative assets			Fair value of derivative assets	190	71
Other current assets	62	95	Other current assets	146	198
TOTAL CURRENT ASSETS	2,550	2,880	TOTAL CURRENT ASSETS	4,667	4,703
INVESTMENTS	370	315	INVESTMENTS	518	608
UTILITY PLANT, AT ORIGINAL COST			UTILITY PLANT, AT ORIGINAL COST
Electric	26,930	26,122	Electric	34,177	32,846
Gas	7,229	6,814	Gas	12,044	11,321
Steam	2,458	2,421	Steam	2,895	2,828
General	2,640	2,490	General	3,842	3,854
TOTAL	39,257	37,847	TOTAL	52,958	50,849
Less: Accumulated depreciation	8,170	7,836	Less: Accumulated depreciation	11,818	11,223
Net	31,087	30,011	Net	41,140	39,626
Construction work in progress	1,327	1,104	Construction work in progress	2,066	1,985
NET UTILITY PLANT	32,414	31,115	NET UTILITY PLANT	43,206	41,611
NON-UTILITY PROPERTY			NON-UTILITY PROPERTY
Non-utility property, less accumulated depreciation of $25 in 2017 and 2016	4	4
Non-utility property, net accumulated depreciation of $25 in 2022 and 2021			Non-utility property, net accumulated depreciation of $25 in 2022 and 2021	2
NET PLANT	32,418	31,119	NET PLANT	43,208	41,613
OTHER NONCURRENT ASSETS			OTHER NONCURRENT ASSETS
Regulatory assets	6,248	6,473	Regulatory assets	3,396	3,316
Operating lease right-of-use asset			Operating lease right-of-use asset	577	545
Pension and retiree benefits			Pension and retiree benefits	2,178	1,677
Fair value of derivative assets			Fair value of derivative assets	136	56
Other deferred charges and noncurrent assets	61	69	Other deferred charges and noncurrent assets	132	137
TOTAL OTHER NONCURRENT ASSETS	6,309	6,542	TOTAL OTHER NONCURRENT ASSETS	6,419	5,731
TOTAL ASSETS	$41,647	$40,856	TOTAL ASSETS	$54,812	$52,655

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)


(Millions of Dollars)				(Millions of Dollars)	September 30, 2022	December 31, 2021
LIABILITIES AND SHAREHOLDER’S EQUITY				LIABILITIES AND SHAREHOLDER’S EQUITY
CURRENT LIABILITIES				CURRENT LIABILITIES

	September 30, 2017	December 31, 2016
	(Millions of Dollars)
LIABILITIES AND SHAREHOLDER’S EQUITY
CURRENT LIABILITIES
Long-term debt due within one year	$600		$—
Notes payable	147	600		Notes payable	$1,789	$1,361
Accounts payable	802	876		Accounts payable	1,282	1,285
Accounts payable to affiliated companies	11	10		Accounts payable to affiliated companies	22	18
Customer deposits	332	336		Customer deposits	330	285
Accrued taxes	32	50		Accrued taxes	75	78
Accrued taxes to affiliated companies	—	119		Accrued taxes to affiliated companies	12	10
Accrued interest	172	111		Accrued interest	236	127
Accrued wages	95	91		Accrued wages	106	103
Fair value of derivative liabilities	59	66		Fair value of derivative liabilities	50	88
Regulatory liabilities	38	90		Regulatory liabilities	486	134
System benefit charge	573	398		System benefit charge	380	372
Operating lease liabilities				Operating lease liabilities	99	90
Other current liabilities	207	242		Other current liabilities	340	370
TOTAL CURRENT LIABILITIES	3,068	2,989		TOTAL CURRENT LIABILITIES	5,207	4,321
NONCURRENT LIABILITIES				NONCURRENT LIABILITIES
Provision for injuries and damages	158	154		Provision for injuries and damages	171	178
Pensions and retiree benefits	1,150	1,544		Pensions and retiree benefits	640	669
Superfund and other environmental costs	648	655		Superfund and other environmental costs	833	850
Asset retirement obligations	234	227		Asset retirement obligations	514	504
Fair value of derivative liabilities	73	33		Fair value of derivative liabilities	15	40
Deferred income taxes and unamortized investment tax credits	10,060	9,450		Deferred income taxes and unamortized investment tax credits	7,223	6,796
Operating lease liabilities				Operating lease liabilities	523	462
Regulatory liabilities	1,673	1,712		Regulatory liabilities	4,215	3,921
Other deferred credits and noncurrent liabilities	217	190		Other deferred credits and noncurrent liabilities	215	220
TOTAL NONCURRENT LIABILITIES	14,213	13,965		TOTAL NONCURRENT LIABILITIES	14,349	13,640
LONG-TERM DEBT	11,971	12,073		LONG-TERM DEBT	18,389	18,382
COMMITMENTS AND CONTINGENCIES (Note B and Note G)				COMMITMENTS AND CONTINGENCIES (Note B and Note G)
SHAREHOLDER’S EQUITY (See Statement of Shareholder’s Equity)	12,395	11,829		SHAREHOLDER’S EQUITY (See Statement of Shareholder’s Equity)	16,867	16,312
TOTAL LIABILITIES AND SHAREHOLDER’S EQUITY	$41,647	$40,856		TOTAL LIABILITIES AND SHAREHOLDER’S EQUITY	$54,812	$52,655

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
(In Millions)/Except Share Data)									(In Millions)/Except Share Data)	Shares	Amount

	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

BALANCE AS OF DECEMBER 31, 2020									BALANCE AS OF DECEMBER 31, 2020	235	$589	$6,169	$9,122	$(962)	$(62)	$(7)	$14,849
Net income									Net income				465				465
Common stock dividend to parent									Common stock dividend to parent				(247)				(247)
Capital contribution by parent									Capital contribution by parent			125					125

BALANCE AS OF MARCH 31, 2021									BALANCE AS OF MARCH 31, 2021	235	$589	$6,294	$9,340	$(962)	$(62)	$(7)	$15,192
Net income									Net income				128				128
Common stock dividend to parent									Common stock dividend to parent				(247)				(247)
Capital contribution by parent									Capital contribution by parent			851					851

BALANCE AS OF JUNE 30, 2021									BALANCE AS OF JUNE 30, 2021	235	$589	$7,145	$9,221	$(962)	$(62)	$(7)	$15,924
Net income									Net income				418				418
Common stock dividend to parent									Common stock dividend to parent				(247)				(247)
Capital contribution by parent									Capital contribution by parent			125					125

BALANCE AS OF SEPTEMBER 30, 2021									BALANCE AS OF SEPTEMBER 30, 2021	235	$589	$7,270	$9,392	$(962)	$(62)	$(7)	$16,220

BALANCE AS OF DECEMBER 31, 2021									BALANCE AS OF DECEMBER 31, 2021	235	$589	$7,269	$9,478	$(962)	$(62)	$—	$16,312
Net income				310				310	Net income				475				475
Common stock dividend to parent				(186)				(186)	Common stock dividend to parent				(245)				(245)
Capital contribution by parent			23					23	Capital contribution by parent			75					75
Other comprehensive income							—	—	Other comprehensive income							1
BALANCE AS OF MARCH 31, 2016	235	$589	$4,270	$7,735	$(962)	$(61)	$(9)	$11,562
BALANCE AS OF MARCH 31, 2022									BALANCE AS OF MARCH 31, 2022	235	$589	$7,344	$9,708	$(962)	$(62)	$1	$16,618
Net income				161				161	Net income				170				170
Common stock dividend to parent				(186)				(186)	Common stock dividend to parent				(245)				(245)
Capital contribution by parent			28					28	Capital contribution by parent			25					25
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, 2022									BALANCE AS OF JUNE 30, 2022	235	$589	$7,369	$9,633	$(962)	$(62)	$1	$16,568
Net income				388				388	Net income				493				493
Common stock dividend to parent				(186)				(186)	Common stock dividend to parent				(244)				(244)
Capital contribution by parent			25					25	Capital contribution by parent			50					50
Other comprehensive income							—	—
BALANCE AS OF SEPTEMBER 30, 2016	235	$589	$4,323	$7,912	$(962)	$(61)	$(8)	$11,793

BALANCE AS OF DECEMBER 31, 2016	235	$589	$4,347	$7,923	$(962)	$(61)	$(7)	$11,829
Net income				339				339
Common stock dividend to parent				(199)				(199)
Capital contribution by parent			22					22
Other comprehensive income							—	—
BALANCE AS OF MARCH 31, 2017	235	$589	$4,369	$8,063	$(962)	$(61)	$(7)	$11,991
Net income				143				143
Common stock dividend to parent				(199)				(199)
Capital contribution by parent			23					23
Other comprehensive income							—	—
BALANCE AS OF JUNE 30, 2017	235	$589	$4,392	$8,007	$(962)	$(61)	$(7)	$11,958
Net income				401				401
Common stock dividend to parent				(199)				(199)
Capital contribution by parent			235			(1)		234
Other comprehensive income							1
BALANCE AS OF SEPTEMBER 30, 2017	235	$589	$4,627	$8,209	$(962)	$(62)	$(6)	$12,395
BALANCE AS OF SEPTEMBER 30, 2022									BALANCE AS OF SEPTEMBER 30, 2022	235	$589	$7,419	$9,882	$(962)	$(62)	$1	$16,867

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 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~~2021 and their separate unaudited financial statements (including the combined notes thereto)

included in Part 1, Item 1 of their combined Quarterly ~~Report~~Reports on Form 10-Q for the quarterly periods ended March 31, ~~2017~~2022 and June 30, ~~2017. Certain prior period amounts have been reclassified to conform to the current period presentation.~~2022.

Con Edison has two 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, "NY", and northern New Jersey, "NJ", and gas service in southeastern ~~New York. Con Edison~~NY. The 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 sustainable 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. In October 2022, Con Edison entered into a purchase and sale agreement pursuant to which Con Edison agreed to sell the Clean Energy Businesses to RWE Renewables America, LLC, a subsidiary of RWE Aktiengesellschaft. See Note T. Con Edison Transmission ~~Inc.~~ invests in and seeks to develop electric transmission ~~facilities~~projects through its subsidiary, Consolidated Edison Transmission, LLC (CET Electric), and ~~invests~~manages, through joint ventures, investments in gas pipeline and storage facilities through its subsidiary Con Edison Gas Pipeline and Storage, LLC (CET Gas). See “Investments” in Note A.

Note A – Summary of Significant Accounting Policies and Other Matters

Accounting Policies

The accounting policies of Con Edison and its subsidiaries conform to generally accepted accounting principles in the United States of America (GAAP). For the Utilities, these accounting principles include the accounting rules for regulated operations and the accounting requirements of the Federal Energy Regulatory Commission (FERC) and the state regulators having jurisdiction.

Investments

Con Edison's investments consist primarily of the investments of Con Edison Transmission that are accounted for under the equity method and the fair value of the Utilities' supplemental retirement income plan and deferred income plan assets.

2021 Partial Impairment of Investment in Stagecoach Gas Services LLC (Stagecoach)

In May 2021, a subsidiary of Con Edison Gas Pipeline and Storage, LLC (CET Gas) entered into a purchase and sale agreement pursuant to which the subsidiary and its joint venture partner agreed to sell their combined interests in Stagecoach Gas Services LLC (Stagecoach) for a total of $1,225 million, of which $629 million was attributed to CET Gas for its 50 percent interest. The purchase and sale agreement contemplated a two-stage closing, the first of which was completed in July 2021 and the second of which was completed in November 2021.

As a result of information made available to Stagecoach as part of the sale process, Stagecoach performed impairment tests that resulted in Stagecoach recording impairment charges of $414 million for the nine months ended September 30, 2021. Accordingly, Con Edison recorded pre-tax impairment losses on its 50 percent interest in Stagecoach of $211 million ($147 million after-tax), including working capital and transaction cost adjustments,

within "Investment income/(loss)" on Con Edison's consolidated income statements for the nine months ended September 30, 2021. These charges reduced the carrying value of its investment in Stagecoach to $630 million at June 30, 2021.

Stagecoach's impairment charges and information obtained from the sales processes constituted triggering events for Con Edison's investment in Stagecoach as of March 31, 2021 and June 30, 2021. Con Edison evaluated the carrying value of its investment in Stagecoach for other-than-temporary declines in value using income and market-based approaches. Con Edison determined that the carrying value of its investment in Stagecoach of $667 million and $630 million as of March 31, 2021 and June 30, 2021, respectively, was not impaired. The carrying value of $630 million at June 30, 2021 reflected the final sales price received in July and the remaining amount received in November 2021, including closing adjustments. CET Gas had no remaining investment in Stagecoach as of December 31, 2021 and September 30, 2022.

2020 and 2021 Partial Impairments of Investment in Mountain Valley Pipeline, LLC (MVP)

In January 2016, Con Edison Gas Pipeline and Storage, LLC (CET Gas), an indirect subsidiary of Con Edison, acquired a 12.5 percent equity interest in MVP, a company developing a proposed 300-mile gas transmission project (the Project) in WV and VA. During 2019, Con Edison exercised its right to limit, and did limit, its cash contributions to the joint venture to approximately $530 million, which reduced CET Gas' interest in MVP to 11.3 percent and 10.2 percent as of December 31, 2020 and 2021, respectively. As of September 30, 2022 CET Gas' interest in MVP is 9.7 percent and is expected to be reduced to 8.0 percent based on the Project's current cost estimate and CET Gas' previous capping of its cash contributions. As of December 31, 2020 and 2021, the Project was approximately 92 percent and 94 percent complete, respectively.

During 2020, progress was made on the construction of the Project, and the U.S. Supreme Court issued favorable decisions in cases unrelated to MVP regarding the permitting process for pipeline construction and water crossings. In November 2020, the U.S. Court of Appeals for the Fourth Circuit issued a stay on the Nationwide Permit 12, effectively blocking the Project’s ability to pursue water crossings under that permit. As a result, in November 2020 the Project applied to the FERC for a certificate amendment to bore under water bodies in a portion of the Project in WV, allowing this portion of the pipe to be completed and placed in-service while a plan for the remaining water crossings was pursued. If approved, this certificate amendment would have led to additional Project costs and would have extended the anticipated in-service date. In January 2021, the FERC did not approve the requested certificate amendment. Later in January 2021, the Project indicated its plans to apply for U.S. Army Corps of Engineers individual permits for certain water crossings and a new certificate amendment application to the FERC to bore under other water crossings that, in total, would cover the entire Project length.

The uncertainty related to obtaining necessary water crossing permits, the resulting Project costs and the likelihood of the Project not reaching eventual completion increased as a result of actions taken by the U.S. Court of Appeals for the Fourth Circuit. This action and associated delays constituted a triggering event (the "2020 triggering event") that required Con Edison to test its investment in MVP for an other-than-temporary impairment as of December 31, 2020.

In December 2021, the Virginia Department of Environmental Quality and the West Virginia Department of Environmental Protection both issued water quality certification permits which are required in order for the U.S. Army Corps of Engineers to proceed with the permitting process for construction of certain Project water crossings. In January 2022, the U.S. Court of Appeals for the Fourth Circuit rejected permits for crossings through the Jefferson National Forest issued by the U.S. Forest Service and Bureau of Land Management. In February 2022, the U.S. Court of Appeals for the Fourth Circuit vacated a biological opinion from the U.S. Fish and Wildlife Service, applicable to all remaining construction. The biological opinion had been issued and was the subject of litigation prior to December 31, 2021. Con Edison believed that the February 2022 action by the U.S. Court of Appeals for the Fourth Circuit, along with the potential outcome of other matters pending before that Court, may lead to further delays and increased Project costs, which constituted a triggering event (the “2021 triggering event”) that required Con Edison to test its investment in MVP for an other-than-temporary impairment as of December 31, 2021.

In response to the 2020 triggering event and 2021 triggering event, Con Edison assessed the value of its equity investment in the Project to determine whether the fair value of its investment in MVP had declined below its carrying value on an other-than-temporary basis as of December 31, 2020 and 2021, respectively. The estimated fair value of the investment was determined using a discounted cash flow analysis, which is a level 3 fair value measurement. The analysis discounted probability-weighted future cash flows, including revenues based on long-term firm transportation contracts, that are secured for the first 20 years following completion of the Project. See Note Q. Con Edison has also assumed cash flows extending beyond this period. All cash flows were discounted at a pre-tax discount rate of 8.3 percent and then weighted based on Con Edison’s estimate of the likelihood that the

Project will be completed. For the 2020 triggering event, Con Edison estimated that the likelihood of Project completion was in the upper end of a reasonably possible range. For the 2021 triggering event, Con Edison anticipated that the Project faces legal and regulatory challenges that make construction completion increasingly remote. The Project faces additional delays and increased costs that could further reduce CET Gas' interest in MVP to below 8.0 percent based on CET Gas' previous capping of its cash contributions. The likelihood that the Project will be completed and, for 2020, the discount rate, are the most significant and sensitive assumptions; changes in these assumptions may materially change the results of the impairment calculation.

Based on the discounted cash flow analyses, Con Edison concluded as of December 31, 2020 and 2021 that the fair value of its investment in MVP declined below its carrying value and the declines were other-than-temporary. Accordingly, Con Edison recorded a pre-tax impairment loss of $320 million ($223 million, after tax) for the year ended December 31, 2020 that reduced the carrying value of its investment in MVP from $662 million to $342 million, with an associated deferred tax asset of $53 million. Additionally, Con Edison recorded a pre-tax impairment loss of $231 million ($162 million, after tax) for the year ended December 31, 2021 that reduced the carrying value of its investment in MVP from $342 million to $111 million with an additional $77 million associated deferred tax asset, totaling a deferred tax asset of $130 million at December 31, 2021 and September 30, 2022. The impairments were recorded within “Investment income (loss)” on Con Edison’s Consolidated Income Statement. In addition, Con Edison did not record non-cash equity in earnings from allowance for funds used during construction from MVP beginning in January 2021 and will continue to refrain from recording such amounts until such time as substantial construction activities resume, which would be indicative of probable Project completion. There were no impairments or substantial changes in the carrying value of Con Edison's investment in MVP for the nine months ended September 30, 2022.

There is risk that the fair value of Con Edison’s investment in MVP may be further or fully impaired in the future. There are ongoing legal and regulatory matters that must be resolved favorably before the Project can be completed. Assumptions and estimates used to test Con Edison’s investment in MVP for impairment may change if adverse or delayed resolutions to the Project’s pending legal and regulatory challenges were to occur, which could have a material adverse effect on the fair value of Con Edison’s investment in MVP.

Reclassification

Certain prior period amounts have been reclassified within the Companies' Consolidated Statements of Cash Flows and Consolidated Balance Sheets to conform with current period presentation.

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~~estimated vesting price.

~~Table of Contents~~

For the three and nine months ended September 30, ~~2017~~2022 and ~~2016,~~2021, 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,
(Millions of Dollars, except per share amounts/Shares in Millions)	2022	2021	2022	2021
Net income for common stock	$613	$538	$1,470	$1,122
Weighted average common shares outstanding – basic	354.6	353.4	354.4	346.8
Add: Incremental shares attributable to effect of potentially dilutive securities	1.3	0.7	1.3	0.7
Adjusted weighted average common shares outstanding – diluted	355.9	354.1	355.7	347.5
Net Income per common share – basic	$1.73	$1.52	$4.15	$3.23
Net Income per common share – diluted	$1.72	$1.52	$4.13	$3.23

The computation of diluted EPS for the three and nine months ended September 30, 2021 excludes immaterial amounts of performance share awards that were not included because of their anti-dilutive effect.

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

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

For the three and nine months ended September 30, ~~2017~~2022 and ~~2016,~~2021, changes to accumulated other comprehensive income/(loss) (OCI) for Con Edison and CECONY are as follows:


	For the Three Months Ended September 30,
	Con Edison		CECONY
(Millions of Dollars)	2022	2021	2022	2021
Beginning balance, accumulated OCI, net of taxes (a)	$10	$(19)	$1	$(7)

Amounts reclassified from accumulated OCI related to pension plan liabilities, net of tax $(1) for Con Edison in 2021 (a)(b)	1	2	—	—
Current period OCI, net of taxes	1	2	—	—
Ending balance, accumulated OCI, net of taxes (a)	$11	$(17)	$1	$(7)

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

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


	For the Nine Months Ended September 30,
	Con Edison		CECONY
(Millions of Dollars)	2022	2021	2022	2021
Beginning balance, accumulated OCI, net of taxes (a)	$5	$(25)	$—	$(7)
OCI before reclassifications, net of tax of $(1) for Con Edison in 2022 and 2021	4	2	—	—
Amounts reclassified from accumulated OCI related to pension plan liabilities, net of tax of $(1) and $(2) for Con Edison in 2022 and 2021, respectively (a)(b)	2	6	1	—
Current period OCI, net of taxes	6	8	1	—
Ending balance, accumulated OCI, net of taxes (a)	$11	$(17)	$1	$(7)

(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 costs. 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 September 30, 2022 and 2021, cash, temporary cash investments and restricted cash for Con Edison and CECONY were as follows:


	At September 30,
	Con Edison		CECONY
(Millions of Dollars)	2022	2021	2022	2021
Cash and temporary cash investments	$78	$66	$25	$18
Restricted cash (a)	163	149	—	—
Total cash, temporary cash investments and restricted cash	$241	$215	$25	$18

(a)Restricted cash included cash of the Clean Energy Businesses' renewable electric project subsidiaries ($163 million and $149 million at September 30, 2022 and 2021, respectively) that, under the related project debt agreements, is restricted to being used for normal operating expenditures, debt service, and required reserves until the various maturity dates of the project debt.

Assets Held for Sale

Generally, a long-lived asset or business to be sold is classified as held for sale in the period in which management, with approval from the Board of Directors, commits to a plan to sell, and a sale is expected to be completed within one year. During the first nine months of 2022, Con Edison considered strategic alternatives with respect to the Clean Energy Businesses. As described further in Note T, on October 1, 2022, Con Edison's management received authority to commit to a plan to sell the Clean Energy Businesses and entered into a purchase and sale agreement. As of September 30, 2022, the Clean Energy Businesses did not meet the held-for-sale criteria, but did meet the criteria subsequent to September 30, 2022, on October 1, 2022. Con Edison records assets and liabilities, once

For the Nine Months Ended September 30,
Con Edison CECONY
(Millions of Dollars) 2017 2016 2017
2016
Beginning balance, accumulated OCI, net of taxes (a) $(27) $(34) $(7) $(9)
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 3 1 1
Current period OCI, net of taxes 1 2 1 1
Ending balance, accumulated OCI, net of taxes $(26) $(32) $(6) $(8)


~~(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 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.

~~Table of Contents~~

held for sale, at the lower of their carrying value or their estimated fair value less cost to sell, and also stops recording depreciation on assets held for sale.

Fair value is the amount at which an asset, liability or business could be bought or sold in a current transaction between willing parties and may be estimated using a number of techniques, or may be observable using quoted market prices. Con Edison used a market approach consisting of the contractual sales price adjusted for estimated working capital and other contractual purchase price adjustments to determine the fair value of the Clean Energy Businesses in October 2022, and subtracted estimated costs to sell from that calculated fair value. The resulting net fair value of the Clean Energy Businesses exceeded the carrying value of the Clean Energy Businesses, and accordingly no impairments were noted.

The sale of the Clean Energy Businesses does not represent a strategic shift that has or will have a major effect on Con Edison, and as such, does not qualify for treatment as a discontinued operation.

For further information, see Note T.

Note B —– Regulatory Matters

Rate Plans

CECONY – Electric

In April 2022, CECONY updated its January 2022 request to the New York State Public Service Commission (NYSPSC) for an electric rate increase effective January 2023. The company decreased its requested January 2023 rate increase by $161 million to $1,038 million, decreased its illustrated January 2024 rate increase by $109 million to $744 million and increased its illustrated January 2025 rate increase by $7 million to $615 million. In May 2022, the New York State Department of Public Service (NYSDPS) submitted testimony in the NYSPSC proceeding in which CECONY requested an electric rate increase, effective January 2023. The NYSDPS testimony supports an electric rate increase of $278 million reflecting, among other things, an 8.80 percent return on common equity and a common equity ratio of 48 percent.

CECONY – Gas

In April 2022, CECONY updated its January 2022 request to the NYSPSC for a gas rate increase effective January 2023. The company decreased its requested January 2023 rate increase by $101 million to $402 million, decreased its illustrated January 2024 rate increase by $29 million to $205 million and decreased its illustrated January 2025 rate increase by $42 million to $176 million. In May 2022, the NYSDPS submitted testimony in the NYSPSC proceeding in which CECONY requested a gas rate increase, effective January 2023. The NYSDPS testimony supports a gas rate increase of $164 million reflecting, among other things, an 8.80 percent return on common equity and a common equity ratio of 48 percent.

CECONY – Electric and Gas

O&R NY – Electric and Gas

In April 2022, the NYSPSC approved the October 2021 joint proposal for new electric and gas rates. The joint proposal provides for electric rate increases of $4.9 million, $16.2 million and $23.1 million, effective January 1, 2022, 2023 and 2024, or $11.7 million on a levelized annual billed basis, respectively. The joint proposal provides for gas rate increases of $0.7 million, $7.4 million and $9.9 million, effective January 1, 2022, 2023 and 2024, or $4.4 million on a levelized annual billed basis, respectively. The joint proposal also includes certain COVID-19 provisions, such as: recovery of 2020 late payment charges over three years ($2.8 million); reconciliation of late payment charges to amounts reflected in rates for years 2021 through 2024, with full recovery/refund via surcharge/sur-credit once the annual variance equals or exceeds 5 basis points of return on equity; and reconciliation of write-offs of customer accounts receivable balances to amounts reflected in rates from January 1, 2020 through December 31, 2024, with full recovery/refund via surcharge/sur-credit once the annual variance equals or exceeds 5 basis points of return on equity.

Rockland Electric Company (RECO)

~~In February 2017,~~Effective July 2021, the New Jersey Board of Public Utilities (NJBPU) ~~approved~~authorized a ~~stipulation of settlement~~conservation incentive program for a RECO, that covers all residential and most commercial customers, under which RECO’s actual 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~~

distribution revenues are compared with the authorized distribution revenues and the difference accrued, with interest, for refund to, or recovery from, customers, as applicable. The conservation incentive program is not permitted if RECO’s actual return on equity exceeds the approved base rate filing return on equity by 50 basis points or more.


~~(a)~~	~~Effective until a new rate plan approved 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 of which RECO, beginning in 2017, is collecting through a customer surcharge.

In ~~September 2017,~~January 2022, RECO ~~the New Jersey Division of Rate Counsel and the New Jersey Board of Public Utilities entered into~~filed a ~~settlement agreement, which is subject~~request with FERC for an increase to ~~FERC approval, that increases RECO's~~its annual transmission revenue requirement from ~~$11.8~~$16.9 million to ~~$17.7 million, effective April 2017.~~$20.4 million. The revenue requirement reflects a return on common equity of ~~10.0~~11.04 percent and a common equity ratio of 47 percent.

In March 2022, RECO filed a request with the NJBPU to implement a $209 million Infrastructure Investment Program (IIP) over a five-year period (2023 – 2027). RECO’s IIP proposes accelerated infrastructure investments to enhance safety, reliability, and/or resiliency.

COVID-19 Regulatory Matters

Governors, public utility commissions 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.

NY Regulation

In March 2020, a former New York State governor declared a State Disaster Emergency for the State of NY due to the COVID-19 pandemic and signed the "New York State on PAUSE" executive order that temporarily closed all non-essential businesses statewide. The former governor then lifted these closures over time and ended the emergency declaration in June 2021. As a result of the emergency declaration, and due to economic conditions, the NYSPSC and the Utilities have worked to mitigate 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 NY enacted a law prohibiting NY utilities, including CECONY and O&R, from disconnecting residential customers, and starting in May 2021 small business customers, during the COVID-19 state of emergency, which ended in June 2021. In addition, such prohibitions were in effect until December 21, 2021 for residential and small business customers who experienced a change in financial circumstances due to the COVID-19 pandemic.

In November 2021, the NYSPSC issued an order establishing a surcharge recovery mechanism for CECONY to collect, commencing December 1, 2021 through December 31, 2022, $43 million and $7 million for electric and gas, respectively, of late payment charges and fees that were not billed for the year ended December 31, 2020. The company recorded such amounts as revenue for the year ended December 31, 2021, as permitted under the accounting rules for regulated utilities, and also accrued such amounts as a current asset at December 31, 2021. Pursuant to the November 2021 order, the company also established a recovery mechanism for CECONY to collect, commencing January 2023 through December 2023, $19 million and $4 million for electric and gas, respectively, of late payment charges and fees that were not billed for the year ended December 31, 2021 and the company recorded such amounts as revenue for the year ended December 31, 2021, as permitted under the accounting rules for regulated utilities, and also accrued such amounts as a current asset at December 31, 2021. In addition, pursuant to the November 2021 order, CECONY established a reserve of $7 million toward addressing customer arrearages for the year ended December 31, 2021 that, pursuant to a June 2022 NYSPSC order discussed below, was used to fund a portion of the COVID-19 arrears assistance program for low-income customers.The order also established a surcharge recovery or surcredit mechanism for any late payment charges and fee deferrals, subject to offsetting related savings resulting from the COVID-19 pandemic, for 2022 starting in January 2024 over a twelve-month period. CECONY resumed late payment charges for commercial and residential customers who have not experienced a change in financial circumstances due to the COVID-19 pandemic on September 3, 2021 and October 1, 2021, respectively. Pursuant to the October 2021 joint proposal for new electric and gas rates for O&R that was approved by the NYSPSC in April 2022. O&R recorded late payment charges and fees that were not billed for the years ended December 31, 2020 and December 31, 2021 of $1.7 million and $2.4 million, respectively, as revenue for the year ended December 31, 2021, as permitted under the accounting rules for regulated utilities, and also accrued such amounts as a current asset at December 31, 2021. See “Rate Plans,” above. O&R resumed late payment charges for commercial and residential customers who have not experienced a change in financial circumstances due to the COVID-19 pandemic on October 1, 2021.

In June 2020, the NYSPSC directed CECONY to implement a summer cooling credit program to help mitigate the cost of staying home and operating 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 $63.4 million cost of the program is being recovered over a five-year period that began January 2021.

In April 2021, NY passed a law that created a program that allows eligible residential renters in NY who require assistance with rent and utility bills to have up to twelve months of electric and gas utility bill arrears forgiven, provided that such arrears were accrued on or after March 13, 2020. The program is administered by the State Office of Temporary and Disability Assistance (OTDA) in coordination with the NYSDPS (the OTDA Program). Under the OTDA Program, CECONY and O&R qualify for a refundable tax credit for NY gross-receipts tax equal to the amount of arrears waived by the Utilities in the year that the arrears are waived and certified by the NYSPSC. OTDA may also use the program funds to provide additional Home Energy Assistance Program payments to the Utilities on behalf of low-income customers.

In April 2022, NY approved the 2022-2023 state budget, which included $250 million for addressing statewide residential utility customers' arrears balances accrued from March 7, 2020 through March 1, 2022. In June 2022, the NYSPSC issued an order implementing a COVID-19 arrears assistance program that provides credits towards reducing the arrears balances of low-income electric and gas customers of CECONY and O&R. At the time the order was issued, the Utilities’ eligible arrears balances were estimated to be $340 million, comprised of: (1) $164.5 million and $1.6 million of the funding allocated pursuant to the NY budget to CECONY and O&R, respectively, and (2) a surcharge mechanism for recovery of the remaining eligible credit amounts over a four- year period commencing after credits are issued for CECONY and over a one year period commencing after credits are issued for O&R. Pursuant to the order, CECONY and O&R agreed not to seek recovery of incremental financing costs incurred associated with low-income customers' arrears from March 2020 through March 2022 of $11 million, most of which is attributable to CECONY, in addition to the $7 million reserve established by CECONY for the year ended December 31, 2021, as described above. The amounts available to credit the arrears balances of low-income CECONY and O&R customers pursuant to the June 2022 order may be reduced by amounts credited pursuant to the OTDA Program.

For the three and nine months ended September 30, 2022, CECONY issued total credits of $265.8 million and $315.1 million, respectively and O&R issued total credits of $4.7 million and $5.5 million, respectively, towards reducing customers’ accounts receivable balances. For the three and nine months ended September 30, 2022, the total credits for CECONY were comprised of: $148.4 million pursuant to the NY funding; $89.6 million that will be recovered via a surcharge mechanism that began September 1, 2022, as described above; the $7 million reserve for CECONY described above; and $20.9 million and $70.1 million, respectively, in qualified tax credits and payments pursuant to the OTDA Program described above. For the three and nine months ended September 30, 2022, the total credits for O&R were comprised of: $1.6 million pursuant to the NY funding; $2.7 million that will be recovered via a surcharge mechanism that began September 1, 2022, as described above; and $0.4 million and $1.2 million, respectively, in qualified tax credits and payments pursuant to the OTDA Program described above. At September 30, 2022, the customer accounts receivable balances at CECONY and O&R were $2,279 million and $109 million, respectively.

In May 2021, CECONY and O&R, along with other large NY utilities, submitted joint comments to the NYSDPS' February 2021 report on New York State’s Energy Affordability Policy. The report recommends, among other things, that residential and commercial customers’ late payment fees and interest on deferred payment agreements be waived until two years after the expiration of the New York State moratorium on utility terminations (the moratorium expired on December 21, 2021) and each utility develop an arrears management program to mitigate the financial burdens of the COVID-19 pandemic on NY households and that program costs be shared, perhaps equally, between shareholders and customers. The May 2021 joint comments stated that it is not necessary for the NYSPSC to adopt the report’s COVID-19 related recommendations because New York State already passed laws

that address the issues in the report. In June 2022, the NYSPSC issued an order in this proceeding establishing a COVID-19 arrears assistance program for low-income customers, as described above.

The Utilities’ rate plans have revenue decoupling mechanisms in their NY electric and gas businesses that largely reconcile actual energy delivery revenues to the authorized delivery revenues approved by the NYSPSC per month and reconcile 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's NY electric and gas rate plans (January through December). Differences are accrued with interest each month for CECONY's and O&R's NY electric customers and after the annual deferral period ends for CECONY's and O&R's NY 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's NY electric and gas customers.

NJ Regulation

In March 2020, NJ Governor Murphy declared a Public Health Emergency and State of Emergency for the State of NJ. In June 2021, the Governor ended the emergency declaration. As a result of the emergency declaration, and due to economic conditions, the NJBPU and RECO have worked to mitigate the potential impact of the COVID-19 pandemic on RECO, its customers and other stakeholders. 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 continued through July 31, 2021 and were not material.

In July 2020, the NJBPU authorized RECO and other NJ utilities to create a COVID-19-related regulatory asset by deferring prudently incurred incremental costs related to the COVID-19 pandemic beginning on March 9, 2020, and has extended such deferrals through December 31, 2022. RECO is required to file its verified COVID-19 cost recovery petition by no later than March 2, 2023. RECO deferred net incremental COVID-19 related costs of $0.4 million through September 30, 2022.

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. The deadlines were subsequently extended to September 2, 2020 and June 1, 2022. CECONY and O&R have taken all reasonable measures to complete such inspections. As of June 1, 2022, O&R completed all of its required inspections and CECONY substantially completed its required inspections. CECONY is unable to estimate the amount or range of its possible loss, if any, related to this matter. At September 30, 2022, CECONY had not accrued a liability related to this matter.

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 IRS “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, amortized 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) is being amortized 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 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 amortized 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) is being amortized over the remaining lives of the related assets). Pursuant to the October 2021 Joint Proposal, O&R will amortize the remaining unprotected portion of its net regulatory liability for future income taxes ($34 million) over a six-year period that began January 1, 2022.

In January 2018, the NYSPSC issued an order ~~in its proceeding investigating an April 21, 2017 Metropolitan Transportation Authority (MTA) subway power outage. The order indicated that the investigation determined that the outage was caused by~~initiating a ~~failure of CECONY’s electricity supply to a subway station, which led to a loss~~focused operations audit of the ~~subway signals, and that one~~Utilities’ financial accounting for income taxes. The audit is investigating the Utilities’ inadvertent understatement of a portion, the ~~secondary services to the MTA facility had been improperly rerouted and~~amount of which may be material, of their calculation of total federal income tax expense for ratemaking purposes. The understatement was not properly documented by the company. The order also indicated that the loss of power to the subway station affected multiple subway lines and caused widespread delays across the subway system. Pursuant to the order, the company is required to take certain actions, including performing inspections of electrical equipment that serves the MTA system, analyzing power supply and power quality events affecting the MTA’s signaling services, providing new monitoring and other equipment and filing monthly reports with the NYSPSC on all of the company's activities related to the ~~MTA system. In July 2017,~~calculation of plant retirement-related cost of removal. As a result of such understatement, the ~~Chairman~~Utilities accumulated significant income tax regulatory assets that were not reflected in O&R’s rate plans prior to 2014, CECONY’s electric and gas rate plans prior to 2015 and 2016, respectively, and is currently not reflected in CECONY’s steam rate plan. This understatement of historical income tax expense materially reduced the amount of revenue collected from the Utilities' customers in the past. As part of the ~~NYSPSC notified~~audit, the ~~company~~Utilities plan to pursue a private letter ruling from the Internal Revenue Service (IRS) that ~~the April 21, 2017 subway power outage incident will likely result~~is expected to confirm, among other things, that in order to comply with IRS normalization rules, such understatement may not be corrected through a ~~prudence review~~write-down of a portion of the ~~reasonableness~~regulatory asset and must be corrected through an increase in future years’ revenue requirements. The regulatory asset ($1,147 million and $23 million for CECONY and O&R, respectively, as of ~~CECONY's actions~~September 30, 2022) and ~~conduct.~~($1,176 million and $26 million for CECONY and O&R, respectively, as of December 31, 2021) is netted against the future income tax regulatory liability on the Companies’ consolidated balance sheet. 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. The company isUtilities are unable to estimate the amount or range of ~~its~~their possible ~~costs~~loss, if any, related to this matter. At September 30, 2022, the Utilities had not accrued a liability related to this matter.

In October 2020, the NYSPSC issued an order instituting a proceeding to consider requiring NY’s large, investor-owned utilities, including CECONY and O&R, to annually disclose what risks climate change poses to their companies, investors and customers going forward. The order notes that some holding companies, including Con Edison, already disclose climate change risks at the holding company level, but states that the NYSPSC believes that climate-related risk disclosures should be issued specific to the operating companies in NY, such as CECONY and O&R, and that such climate-related risk disclosures should be included annually with the utilities’ financial reports. In December 2020, CECONY and O&R, along with other large NY utilities, filed comments supporting climate change risk disclosures in annual reports filed with the NYSPSC and recommended the use of an industry-specific template.

In April 2021, the Department of Energy (DOE) issued a request for information to assist the DOE in developing orders and/or regulations to secure the United States’ critical electric infrastructure. Separately, in September 2021, the Cybersecurity and Infrastructure Security Agency and the National Institute of Standards and Technology issued preliminary cybersecurity goals for critical infrastructure control systems, with final voluntary goals issued in October 2022. The Companies are unable to predict the impact on them of any orders or regulations that may be adopted regarding critical infrastructure.

In July 2021, the NYSPSC approved a settlement agreement among CECONY, O&R and the NYSDPS that fully resolves all issues and allegations that have been raised or could have been raised by the NYSPSC against CECONY and O&R with respect to: (1) the July 2018 rupture of a CECONY steam main located on Fifth Avenue and 21st Street in Manhattan (the “2018 Steam Incident”); (2) the July 2019 electric service interruptions to approximately 72,000 CECONY customers on the west side of Manhattan and to approximately 30,000 CECONY customers primarily in the Flatbush area of Brooklyn (the “2019 Manhattan and Brooklyn Outages”); (3) the August 2020 electric service interruptions to approximately 330,000 CECONY customers and approximately 200,000 O&R customers following Tropical Storm Isaias (the “Tropical Storm Isaias Outages”) and (4) the August 2020 electric service interruptions to approximately 190,000 customers resulting from faults at CECONY’s Rainey substation following Tropical Storm Isaias (the “Rainey Outages”). Pursuant to the settlement agreement, CECONY and O&R agreed to a total settlement amount of $75.1 million and $7.0 million, respectively. CECONY and O&R agreed to forgo recovery from customers of $25 million and $2.5 million, respectively, associated with the return on existing storm hardening assets beginning with the next rate plan for each utility (over a period of 35 years). CECONY and O&R also agreed to incur ongoing operations and maintenance costs of up to $15.8 million and $2.9 million, respectively, for, among other things, costs to maintain a certain level of contractor and vehicle storm emergency support and storm preparation audits. For CECONY, the settlement agreement included previously incurred or accrued costs of $34.3 million, including negative revenue adjustments of $5 million for the Rainey Outages and $15 million for the 2019 Manhattan and Brooklyn Outages and $14.3 million in costs to reimburse customers for food and medicine spoilage and other previously incurred expenses related to Tropical Storm Isaias and the 2018 Steam Incident. For O&R, the settlement agreement included previously incurred costs of $1.6 million to reimburse customers for food and medicine spoilage and other expenses related to the Tropical Storm Isaias Outages.

~~Table of Contents~~

Regulatory Assets and Liabilities

Regulatory assets and liabilities at September 30, ~~2017~~2022 and December 31, ~~2016~~2021 were comprised of the following items:


	Con Edison		CECONY
(Millions of Dollars)	2022	2021	2022	2021
Regulatory assets
Environmental remediation costs	$919	$938	$840	$860
System peak reduction and energy efficiency programs	546	285	546	284
Pension and other postretirement benefits deferrals	369	496	325	435
Revenue taxes	428	395	409	378
COVID-19 pandemic deferrals	275	282	272	277
Deferred storm costs	270	276	168	158
Property tax reconciliation	142	202	140	202
MTA power reliability deferral	104	140	104	140
Gas Service Line Deferred Costs	107	100	107	100
COVID-19 arrears relief program deferral	91	—	88	—
Municipal infrastructure support costs	33	44	33	44
Brooklyn Queens demand management program	33	36	33	36
Deferred derivative losses - long term	32	51	27	45
Meadowlands heater odorization project	27	29	27	29
Unrecognized pension and other postretirement costs	24	128	10	110
Non-wire alternative projects	23	23	23	23
Legacy meters	20	2	—	—
Preferred stock redemption	19	20	19	20
Recoverable REV demonstration project costs	17	16	17	15
Gate station upgrade project	14	14	14	14
Unamortized loss on reacquired debt	12	16	11	14
Other	200	146	183	132
Regulatory assets – noncurrent	3,705	3,639	3,396	3,316
Deferred derivative losses - short term	91	141	88	133
Recoverable energy costs	191	65	183	55
Regulatory assets – current	282	206	271	188
Total Regulatory Assets	$3,987	$3,845	$3,667	$3,504
Regulatory liabilities
Future income tax	$1,819	$1,984	$1,681	$1,840
Allowance for cost of removal less salvage	1,238	1,199	1,063	1,033
Unrecognized pension and other postretirement costs	429	32	368	—
Net unbilled revenue deferrals	126	209	126	209
Deferred derivative gains - long term	152	61	134	55
Pension and other postretirement benefit deferrals	130	102	85	55
2022 Late Payment Charge Deferral	92	—	92	—
Net proceeds from sale of property	78	103	77	103
System benefit charge carrying charge	72	70	67	63
Property tax refunds	37	35	35	35
TCJA net benefits*	30	125	29	123
Sales and use tax refunds	28	17	27	16
BQDM and REV Demo reconciliations	24	25	21	22
COVID-19 pandemic uncollectible reconciliation deferral	20	—	19	—
Earnings sharing - electric, gas and steam	13	13	10	10
Workers' compensation	11	8	11	8
Settlement of prudence proceeding	6	6	6	6
Energy efficiency portfolio standard unencumbered funds	5	15	7	19
Settlement of gas proceedings	4	12	4	12
Other	403	365	353	312
Regulatory liabilities – noncurrent	4,717	4,381	4,215	3,921
Deferred derivative gains - short term	521	142	482	132
Refundable energy costs	34	32	4	2
Revenue decoupling mechanism	13	11	—	—
Regulatory liabilities – current	568	185	486	134
Total Regulatory Liabilities	$5,285	$4,566	$4,701	$4,055

* See "Other Regulatory Matters," above.

Con Edison CECONY
(Millions of Dollars) 2017 2016 2017
2016
Regulatory assets
Unrecognized pension and other postretirement costs $2,626 $2,874
$2,476 $2,730
Future income tax 2,419 2,439
2,308 2,325
Environmental remediation costs 803 823
690 711
Revenue taxes 341 295
325 280
Deferred derivative losses 88 48 78 42
Pension and other postretirement benefits deferrals 70 38 45 7
Municipal infrastructure support costs 57 44 57 44
Deferred storm costs 43 56
—
3
Unamortized loss on reacquired debt 39 43
37 41
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
Preferred stock redemption 24 25 24 25
Surcharge for New York State assessment 18 28 16 26
Net electric deferrals 13 24
13 24
Workers’ compensation 12 13 12 13
O&R transition bond charges 10 15
—
—
Recoverable energy costs 4 42 4 38
Other 113 101
103 85
Regulatory assets – noncurrent 6,769 7,024
6,248 6,473
Deferred derivative losses 81 91
75 86
Recoverable energy costs 28 9
25 4
Regulatory assets – current 109 100
100 90
Total Regulatory Assets $6,878 $7,124
$6,348 $6,563
Regulatory liabilities

Allowance for cost of removal less salvage $798 $755
$671 $641
Pension and other postretirement benefit deferrals 202 193 174 162
Net unbilled revenue deferrals 166 145
166 145
Property tax reconciliation 140 178
140 178
Unrecognized other postretirement costs 84 60 84 60
Settlement of prudence proceeding 73 95
73 95
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 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
Regulatory liabilities – noncurrent 1,873 1,905
1,673 1,712
Refundable energy costs 29 29 9 5
Revenue decoupling mechanism 27 71
27 61
Deferred derivative gains 2 28
2 24
Regulatory liabilities – current 58 128
38 90
Total Regulatory Liabilities $1,931 $2,033
$1,711 $1,802
In general, the Utilities receive or are being credited with a return at the Other Customer-Provided Capital rate for regulatory assets that have not been included in rate base, and receive or are being credited with a return at the pre-tax weighted average cost of capital once the asset is included in rate base. Similarly, the Utilities pay to or credit customers with a return at the Other Customer-Provided Capital rate for regulatory liabilities that have not been included in rate base, and pay to or credit customers with a return at the pre-tax weighted average cost of capital once the liability is included in rate base. The Other Customer-Provided Capital rate for the nine months ended September 30, 2022 and 2021 was 1.75 percent and 1.80 percent, respectively.

In general, the Utilities are receiving or being credited with a return on their regulatory assets for which a cash outflow has been made ($2,221 million and $1,962 million for Con Edison, and $2,024 million and $1,751 million for CECONY at September 30, 2022 and December 31, 2021, respectively). Regulatory assets of RECO for which a cash outflow has been made ($21 million and $25 million at September 30, 2022 and December 31, 2021, respectively) are not receiving or being credited with a return. RECO recovers regulatory assets over a period of up to four years or until they are addressed in its next base rate case in accordance with the rate provisions approved by the NJBPU. Regulatory liabilities are treated in a consistent manner.

Regulatory assets that represent future financial obligations and were deferred in accordance with the Utilities’ rate plans or orders issued by state regulators do not earn a return until such time as a cash outlay has been made. Regulatory liabilities are treated in a consistent manner. At September 30, 2022 and December 31, 2021, regulatory assets for Con Edison and CECONY that did not earn a return consisted of the following items:

Regulatory Assets Not Earning a Return*


	Con Edison		CECONY
(Millions of Dollars)	2022	2021	2022	2021
Unrecognized pension and other postretirement costs	$24	$128	$10	$110
Environmental remediation costs	913	928	833	850
Revenue taxes	408	375	392	359
COVID-19 Deferral for Uncollectible Accounts Receivable	236	236	232	231
Deferred derivative losses - current	91	141	88	134
Deferred derivative losses - long term	32	51	27	45
Other	62	24	61	24
Total	$1,766	$1,883	$1,643	$1,753

*This table presents regulatory assets not earning a return for which no cash outlay has been made.

The recovery periods for regulatory assets for which a cash outflow has not been made and that do not earn a return have not yet been determined, except as noted below, and are expected to be determined pursuant to the Utilities’ future rate plans to be filed or orders issued by the state regulators in connection therewith.

The Utilities recover unrecognized pension and other postretirement costs over 10 years, and the portion of investment gains or losses recognized in expense over 15 years, pursuant to NYSPSC policy.

The deferral for revenue taxes represents the New York State metropolitan transportation business tax surcharge on the cumulative temporary differences between the book and tax basis of assets and liabilities of the Utilities, as well as the difference between taxes collected and paid by the Utilities to fund mass transportation. The Utilities recover the majority of the revenue taxes over the remaining book lives of the electric and gas plant assets, as well as the steam plant assets for CECONY.

The Utilities recover deferred derivative losses – current within one year, and noncurrent generally within three years.

Note C —– Capitalization

In ~~March 2017,~~June 2022, Con Edison redeemed at maturity $293 million of 8.71 percent senior unsecured notes.

In November 2022, O&R issued ~~$400~~$100 million aggregate principal amount of ~~2.00~~5.70 percent debentures, due ~~2020, 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 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 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.

2032.

The carrying amounts and fair values of long-term debt at September 30, ~~2017~~2022 and December 31, ~~2016~~2021 were:


(Millions of Dollars)	2022		2021
Long-Term Debt (including current portion) (a)	Carrying Amount	Fair Value	Carrying Amount	Fair Value
Con Edison	$22,673	$19,311	$23,044	$26,287
CECONY	$18,389	$15,465	$18,382	$21,382

(a)Amounts shown are net of unamortized debt expense and unamortized debt discount of $216 million and $186 million for Con Edison and CECONY, respectively, as of September 30, 2022 and $226 million and $193 million for Con Edison and CECONY, respectively, as of December 31, 2021.

(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 million and $115 million for Con Edison and CECONY, respectively, as of September 30, 2017 and $134 million and $113 million for Con Edison and CECONY, respectively, as of December 31, 2016.

~~Fair~~The fair values of the Companies' long-term debt have been estimated primarily using available market ~~information. For Con Edison, $16,559 million~~information and ~~$636 million of the fair value of long-term debt~~ at September 30, ~~2017~~2022 are classified as Level 2 ~~and Level 3, respectively. For CECONY, $13,577 million and $636 million of the fair value of long-term debt at September 30, 2017 are classified as Level 2 and Level 3, respectively~~liabilities (see Note L)O). ~~The $636 million 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.~~

Note D —– Short-Term Borrowing

At September 30, ~~2017,~~2022, Con Edison had ~~$356~~$1,941 million of commercial paper outstanding of which ~~$147~~$1,789 million was outstanding under CECONY’s program. The weighted average interest rate at September 30, ~~2017~~2022 was ~~1.3~~3.4 percent for both Con Edison and CECONY. At December 31, ~~2016,~~2021, Con Edison had ~~$1,054~~$1,488 million of commercial paper outstanding of which ~~$600~~$1,361 million was outstanding under CECONY’s program. The weighted average interest rate at December 31, ~~2016~~2021 was ~~1.0~~0.3 percent for both Con Edison and CECONY.

At September 30, ~~2017~~2022 and December 31, ~~2016,~~2021, no loans were outstanding under the Companies' December 2016 credit agreement (Credit Agreement). An immaterial amount ~~and $2 million (including $2 million for CECONY)~~ of letters of credit were outstanding under the Credit Agreement as of September 30, ~~2017~~2022 and December 31, ~~2016, respectively.~~2021.

In March 2022, CECONY entered into a 364-Day Revolving Credit Agreement (the CECONY Credit Agreement) under which banks are committed to provide loans up to $750 million on a revolving credit basis. The CECONY Credit Agreement expires on March 30, 2023 and supports CECONY’s commercial paper program. Loans issued under the CECONY Credit Agreement may also be used for other general corporate purposes. The banks’ commitments under the CECONY Credit Agreement are subject to certain conditions, including that there be no event of default and that CECONY shall have received the required regulatory approval. The commitments are not subject to maintenance of credit rating levels or the absence of a material adverse change. Upon a change of control of, or upon an event of default by CECONY, the banks may terminate their commitments and declare the loans, accrued interest and any other amounts due by CECONY immediately due and payable. Events of default include CECONY 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 five percent of its consolidated total capital, subject to certain exceptions; CECONY failing to make one or more payments in respect of material financial obligations (in excess of an aggregate $150 million of debt); cross default to other financial obligations of $150 million or more of CECONY which would permit the holder to accelerate the obligations; and other customary events of default.

In June 2022, Con Edison entered into and borrowed $400 million under a 364-Day Senior Unsecured Term Loan Credit Agreement (the June 2022 Term Loan Credit Agreement) under which a bank is committed, until November 30, 2022, to provide to Con Edison one or more tranches of incremental term loans in an aggregate amount not to exceed $200 million, in addition to the $400 million borrowed on June 30, 2022. The bank’s commitments under the agreement are subject to certain conditions, including that there be no event of default. The commitments are not subject to maintenance of credit rating levels or the absence of a material adverse change. Upon a change of control of, or upon an event of default by Con Edison, the bank may terminate its commitments and declare the loans, accrued interest and any other amounts due by Con Edison 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; Con Edison or its subsidiaries having liens on its or their assets in an aggregate amount exceeding 5 percent of Con Edison’s consolidated total capital, subject to certain exceptions; Con Edison or its material subsidiaries failing to make one or more payments in respect of material financial obligations (in excess of an aggregate $150 million of debt or derivative obligations other than non-recourse debt); the occurrence of an event or condition which results in

the acceleration of the maturity of any material debt (in excess of an aggregate $150 million of debt other than non-recourse debt) or enables the holders of such debt to accelerate the maturity thereof; and other customary events of default.Subject to certain exceptions, the commitments and any term loans issued under the June 2022 Term Loan Credit Agreement are subject to mandatory termination and prepayment with the net cash proceeds of certain equity issuances or asset sales by Con Edison.

In August 2022, the Clean Energy Businesses entered into and borrowed $150 million under a 364-Day Senior Unsecured Term Loan Credit Agreement, which is guaranteed by Con Edison and includes customary terms and conditions.Upon a change of control of the Clean Energy Businesses, the bank may declare the loan, accrued interest and any other amounts due by the Clean Energy Businesses immediately due and payable if the bank does not consent to a guarantee from the successor company, which consent may not be unreasonably withheld.Upon an event of default of the Clean Energy Businesses, the bank may declare the loan, accrued interest and any other amounts due by the Clean Energy Businesses immediately due and payable. See Note H.

Note E —– Pension Benefits

Total Periodic Benefit Cost

The components of the Companies’ total periodic benefit ~~costs~~cost for the three and nine months ended September 30, ~~2017~~2022 and ~~2016~~2021 were as follows:


	For the Three Months Ended September 30,
	Con Edison		CECONY
(Millions of Dollars)	2022	2021	2022	2021
Service cost – including administrative expenses	$72	$85	$67	$80
Interest cost on projected benefit obligation	126	118	119	111
Expected return on plan assets	(292)	(274)	(277)	(260)
Recognition of net actuarial loss	94	197	89	187
Recognition of prior service credit	(4)	(4)	(5)	(5)
TOTAL PERIODIC BENEFIT COST/(CREDIT)	$(4)	$122	$(7)	$113
Cost capitalized	(32)	(41)	(30)	(39)
Reconciliation to rate level	63	(54)	59	(52)
Total expense recognized	$27	$27	$22	$22

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


	For the Nine Months Ended September 30,
	Con Edison		CECONY
(Millions of Dollars)	2022	2021	2022	2021
Service cost – including administrative expenses	$215	$257	$202	$241
Interest cost on projected benefit obligation	379	353	357	332
Expected return on plan assets	(876)	(822)	(832)	(779)
Recognition of net actuarial loss	283	590	268	559
Recognition of prior service credit	(12)	(12)	(15)	(15)
TOTAL PERIODIC BENEFIT COST/(CREDIT)	($11)	$366	($20)	$338
Cost capitalized	(100)	(120)	(95)	(113)
Reconciliation to rate level	192	(165)	182	(158)
Total expense recognized	$81	$81	$67	$67

Components of net periodic benefit cost other than service cost are presented outside of operating income on the Companies' consolidated income statements, and only the service cost component is eligible for capitalization. Accordingly, the service cost component is included in the line "Other operations and maintenance" and the non-service cost components are included in the lines "Investment and other income" and "Other deductions" in the Companies' consolidated income statements. The increase in the "Pension and retiree benefits" asset on the Companies' consolidated balance sheets from December 31, 2021 to September 30, 2022 is primarily due to favorable plan liability experience.

~~Table of Contents~~

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

Expected Contributions

Based on estimates as of September 30, ~~2017,~~2022, the Companies expect to make contributions to the pension plans during ~~2017~~2022 of ~~$450~~$31 million (of which ~~$412~~$18 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 months of ~~2017,~~2022, the Companies contributed ~~$446~~$25 million to the pension plans, ~~(of~~$13 million of which ~~$409 million~~ was contributed by ~~CECONY).~~CECONY. CECONY also contributed ~~$14~~$17 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 months ended September 30, ~~2017~~2022 and ~~2016~~2021 were as follows:


	For the Three Months Ended September 30,
	Con Edison		CECONY
(Millions of Dollars)	2022	2021	2022	2021
Service cost - including administrative expenses	$5	$2	$4	$1
Interest cost on projected other postretirement benefit obligation	8	7	8	6
Expected return on plan assets	(18)	(17)	(14)	(14)
Recognition of net actuarial loss/(gain)	(4)	4	(3)	3
TOTAL PERIODIC OTHER POSTRETIREMENT BENEFIT COST/(CREDIT)	$(9)	($4)	$(5)	$(4)
Cost capitalized	(2)	(3)	(2)	(3)
Reconciliation to rate level	7	7	6	6
Total credit recognized	$(4)	$—	$(1)	$(1)

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,
	Con Edison		CECONY
(Millions of Dollars)	2022	2021	2022	2021
Service cost - including administrative expenses	$14	$15	$11	$11
Interest cost on projected other postretirement benefit obligation	26	23	23	19
Expected return on plan assets	(54)	(51)	(43)	(41)
Recognition of net actuarial loss/(gain)	(11)	17	(7)	13
Recognition of prior service credit	(1)	(2)	—	(1)
TOTAL PERIODIC OTHER POSTRETIREMENT BENEFIT COST/(CREDIT)	$(26)	$2	$(16)	$1
Cost capitalized	(6)	(9)	(5)	(7)
Reconciliation to rate level	22	7	18	2
Total credit recognized	$(10)	$—	$(3)	$(4)

For the Nine Months Ended September 30,

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

~~Table of Contents~~

Contributions

~~During~~As of September 30, 2022, the ~~first nine months of 2017, Con Edison~~Companies contributed ~~$16~~$9 million (all of which ~~$8 million~~ was ~~contributed~~made by ~~CECONY,~~CECONY) to the other postretirement benefit ~~plans.~~plans in 2022. 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~~company's share of the undiscounted cost to investigate the sites and, for sites that have been investigated in whole or in part, the cost to remediate the sites, if remediation is necessary and if a reasonable estimate of such cost can be made. Remediation costs are estimated in light of the information available, applicable remediation standards and experience with similar sites.

The accrued liabilities and regulatory assets related to Superfund Sites at September 30, ~~2017~~2022 and December 31, ~~2016~~2021 were as follows:


	Con Edison		CECONY
(Millions of Dollars)	2022	2021	2022	2021
Accrued Liabilities:
Manufactured gas plant sites	$833	$845	$744	$755
Other Superfund Sites	90	95	89	95
Total	$923	$940	$833	$850
Regulatory assets	$919	$938	$840	$860

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

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

Environmental remediation costs incurred related to Superfund Sites for the three and nine months ended September 30, ~~2017~~2022 and ~~2016~~2021 were as follows:


	For the Three Months Ended September 30,
	Con Edison		CECONY
(Millions of Dollars)	2022	2021	2022	2021
Remediation costs incurred	$3	$7	$3	$7

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 Nine Months Ended September 30,
	Con Edison		CECONY
(Millions of Dollars)	2022	2021	2022	2021
Remediation costs incurred	$17	$21	$16	$20

~~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 months ended September 30, ~~2017. Con Edison~~2022 and ~~CECONY received $1 million in insurance recoveries for the three and nine months ended September 30, 2016.~~2021.

In ~~2016,~~2021, 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~~$2,980 million and ~~$2.6 billion,~~$2,840 million, 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 30, ~~2017,~~2022, 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 or liabilities for the Companies at September 30, ~~2017~~2022 and December 31, ~~2016~~2021 were as follows:


	Con Edison		CECONY
(Millions of Dollars)	2022	2021	2022	2021
Accrued liability – asbestos suits	$8	$8	$7	$7
Regulatory assets – asbestos suits	$8	$8	$7	$7
Accrued liability – workers’ compensation	$62	$65	$59	$62
Regulatory liabilities – workers’ compensation	$11	$8	$11	$8

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 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 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~~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~~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 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~~During 2020, the company ~~is unable to estimate~~accrued its estimated liability for the ~~amount or range~~suits of ~~its possible loss for damages related to~~$40 million and an insurance receivable in the ~~incident. At~~ same amount, which estimated liability did not change as of September 30, ~~2017, the company had not accrued a liability for damages related to the incident.~~2022.

Other Contingencies

~~See~~For additional contingencies, see "COVID-19 Regulatory Matters" and "Other Regulatory Matters" in Note B, Note G 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 and its subsidiaries under these agreements totaled ~~$2,162~~$2,232 million and ~~$2,370~~$2,157 million at September 30, ~~2017~~2022 and December 31, ~~2016,~~2021, respectively.

A summary, by type and term, of Con ~~Edison’s~~Edison's total guarantees under these agreements at September 30, ~~2017~~2022 is as follows:


Guarantee Type	0 – 3 years	4 – 10 years	> 10 years	Total
	(Millions of Dollars)
Con Edison Transmission	$442	$—	$—	$442
Energy transactions	493	22	292	807
Renewable electric projects	332	69	360	761
Other	222	—	—	222
Total	$1,489	$91	$652	$2,232

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 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 fromproject.

Energy Transactions — Con Edison ~~on behalf of CET Gas in relation to a proposed gas transmission project in West Virginia~~ and ~~Virginia.~~

~~Table of Contents~~

the Clean Energy ~~Transactions —~~ ~~Con Edison guarantees~~Businesses guarantee payments on behalf of ~~the Clean Energy Businesses~~their subsidiaries 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 a $70 million ~~in guarantees~~guarantee provided by Con Edison to Travelers Insurance Company for indemnity agreements for surety bonds in connection with the operation of solar energy facilities and energy service projects of ~~Con Edison Development and Con Edison Solutions, respectively.~~the Clean Energy Businesses. Other guarantees also ~~includes Con Edison's~~include a guarantee ~~(subject to a $53 million maximum amount) of certain obligations of~~provided by Con Edison ~~Solutions~~in connection with the Clean Energy Businesses’ obligations under ~~the agreement pursuant to which it sold its retail electric supply business. In addition, Con Edison issued~~ a ~~guarantee estimated at $5~~$150 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.364-Day Senior Unsecured Term Loan Credit Agreement.See Note D.

Note I —– Leases

Operating lease cost and cash paid for amounts included in the measurement of lease liabilities for the three and nine months ended September 30, 2022 and 2021 were as follows:


	For the Three Months Ended September 30,
	Con Edison		CECONY
(Millions of Dollars)	2022	2021	2022	2021
Operating lease cost	$22	$22	$17	$16
Operating lease cash flows	$11	$10	$5	$6


	For the Nine Months Ended September 30,
	Con Edison		CECONY
(Millions of Dollars)	2022	2021	2022	2021
Operating lease cost	$66	$65	$50	$49
Operating lease cash flows	$28	$26	$13	$15

As of September 30, 2022 and December 31, 2021, assets recorded as finance leases were $2 million for Con Edison and $1 million for CECONY, and the accumulated amortization associated with finance leases for Con Edison and CECONY were $4 million and $2 million, respectively.

For the three and nine months ended September 30, 2022 and 2021, 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 $3 million, respectively, for the three months ended September 30, 2022 and $76 million and $67 million, respectively, for the nine months ended September 30, 2022. Right-of-use assets obtained in exchange for operating lease obligations for Con Edison and CECONY were $15 million and $5 million, respectively, for the three months ended September 30, 2021 and $32 million and $7 million, respectively, for the nine months ended September 30, 2021.

Other information related to leases for Con Edison and CECONY at September 30, 2022 and December 31, 2021 were as follows:


	Con Edison		CECONY
	2022	2021	2022	2021
Weighted Average Remaining Lease Term:
Operating leases	18.2 years	18.5 years	12.6 years	12.1 years
Finance leases	7.2 years	7.1 years	2.5 years	3.1 years
Weighted Average Discount Rate:
Operating leases	4.3%	4.3%	3.7%	3.5%
Finance leases	1.9%	1.8%	1.0%	1.1%

Future minimum lease payments under non-cancellable leases at September 30, 2022 were as follows:


(Millions of Dollars)	Con Edison		CECONY
Year Ending September 30,	Operating Leases	Finance Leases	Operating Leases	Finance Leases
2023	$84	$—	$63	$—
2024	81	1	62	1
2025	82	—	63	—
2026	81	—	63	—
2027	81	—	64	—
All years thereafter	963	1	472	—
Total future minimum lease payments	$1,372	$2	$787	$1
Less: imputed interest	(469)	—	(165)	—
Total	$903	$2	$622	$1
Reported as of September 30, 2022
Operating lease liabilities (current)	$131	$—	$99	$—
Operating lease liabilities (noncurrent)	772	—	523	—
Other noncurrent liabilities	—	2	—	1
Total	$903	$2	$622	$1

At September 30, 2022, the Companies had an additional operating lease agreement that had not yet commenced, for a solar electric facility under construction by the Clean Energy Businesses, for which the present value of the

lease payments is $3 million. This lease is expected to commence within one year, with a lease term of approximately 40 years.

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 nine months ended September 30, 2022 and 2021.

Note J – Income Tax

Con Edison’s income tax expense ~~decreased~~increased to ~~$270~~$160 million for the three months ended September 30, ~~2017~~2022 from ~~$314~~$127 million for the three months ended September 30, ~~2016. Con Edison's effective~~2021. The increase in income tax ~~rate for the three months ended September 30, 2017 and 2016 was 37 percent and 39 percent, respectively. The decrease in Con Edison's effective tax rate~~expense is primarily due to ~~lower~~higher income before income tax expense, higher state income taxes and assistance received from a New York State COVID-19 arrears program in 2022 (see “COVID-19 Regulatory Matters” in Note B), offset in part by ~~a decrease in tax benefits~~higher income attributable to non-controlling interest and lower reserve for ~~plant-related flow through items.~~injuries and damages.

CECONY’s income tax expense increased to ~~$242~~$124 million for the three months ended September 30, ~~2017~~2022 from ~~$226~~$90 million for the three months ended September 30, ~~2016. CECONY's effective~~2021. The increase in income tax expense is primarily due to higher income before income tax expense, higher state income taxes, assistance received from a New York State COVID-19 arrears program in 2022 (see “COVID-19 Regulatory Matters” in Note B) and the absence of a favorable tax adjustment from a prior year tax return due to an increase in the general business tax credits, offset in part by lower reserve for injuries and damages.

Reconciliation of the difference between income tax expense and the amount computed by applying the prevailing statutory income tax rate to income before income taxes for the three months ended September 30, ~~2017~~2022 and ~~2016 was 38 percent and 37 percent, respectively. The increase in CECONY's effective tax rate~~2021 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)	2022		2021		2022		2021
STATUTORY TAX RATE
Federal	21	%	21	%	21	%	21	%
Changes in computed taxes resulting from:
State income tax, net of federal income tax benefit	6		5		5		5
Amortization of excess deferred federal income taxes	(6)		(7)		(7)		(8)
Taxes attributable to non-controlling interest	—		4		—		—
Cost of removal	1		1		1		1
Other plant-related items	—		(1)		—		(1)
Renewable energy credits	(1)		(1)		—		—
Allowance for uncollectible accounts, net of COVID-19 assistance	—		—		1		—
Injuries and damages reserve	—		—		—		1


Prior period federal income tax return adjustments	—		(1)		—		(1)


Other	—		—		(1)		—
Effective tax rate	21	%	21	%	20	%	18	%

Con Edison’s income tax expense ~~decreased~~increased to ~~$599~~$330 million for the nine months ended September 30, ~~2017~~2022 from ~~$602~~$194 million for the nine months ended September 30, ~~2016. Con Edison's effective~~2021. The increase in income tax ~~rate for the nine months ended September 30, 2017 and 2016 was 37 percent. The effective~~expense is primarily due to higher income before income tax ~~rate remained unchanged as lower~~expense, higher state income taxes ~~were~~and an increase in the reserve for uncertain tax positions for prior years at the Clean Energy Businesses, offset in part by a ~~decrease~~lower loss attributable to non-controlling interest and an increase in ~~tax benefits for plant-related flow through items.~~research and development credits from prior years at the Utilities.

CECONY’s income tax expense increased to ~~$551~~$232 million for the nine months ended September 30, ~~2017~~2022 from ~~$491~~$188 million for the nine months ended September 30, ~~2016. CECONY's effective~~2021. The increase in income tax expense is primarily due to higher income before income tax expense, higher state income taxes and lower flow-through tax benefits in 2022 for plant-related items, offset in part by higher research and development credits from prior years.

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 nine months ended September 30, ~~2017~~2022 and ~~2016 was~~ 2021 is as follows:

38 ~~percent and 36 percent, respectively. The increase in CECONY's effective~~


	Con Edison				CECONY
(% of Pre-tax income)	2022		2021		2022		2021
STATUTORY TAX RATE
Federal	21	%	21	%	21	%	21	%
Changes in computed taxes resulting from:
State income tax, net of federal income tax benefit	6		5		5		5
Amortization of excess deferred federal income taxes	(8)		(11)		(10)		(11)
Taxes attributable to non-controlling interest	1		3		—		—
Cost of removal	1		2		2		2
Other plant-related items	—		(1)		(1)		(1)
Renewable energy credits	(2)		(2)		—		—








Other	—		(1)		—		—
Effective tax rate	19	%	16	%	17	%	16	%

In April 2021, New York State passed a law that increased the corporate franchise tax rate ~~is primarily due~~on business income from 6.5% to 7.25%, retroactive to January 1, 2021, for taxpayers with taxable income greater than $5 million. The law also reinstated the business capital tax at 0.1875%, not to exceed an annual maximum tax liability of $5 million per taxpayer. New York State requires a ~~decrease in~~corporate franchise taxpayer to calculate and pay the highest amount of tax ~~benefits for plant-related flow through items~~under the three alternative methods: a tax on business income; a tax on business capital; or a fixed dollar minimum. The provisions to increase the corporate franchise tax rate and ~~lower research~~reinstate a business capital tax are scheduled to expire after 2023 and ~~development tax credits, offset in part by lower state income taxes.~~are not expected to have a material impact on the Companies’ financial position, results of operations or liquidity.

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

Uncertain Tax Positions

As a result of an unfavorable settlement reached at appeals with the IRS in the second quarter of 2022, the Clean Energy Businesses increased its reserve for uncertain tax positions for prior years by $5 million. At September 30, ~~2017,~~2022, the estimated liability for uncertain tax positions for Con Edison was ~~$41~~$21 million ($217 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 $17 million ~~($15 million, net~~ of various federal ~~taxes),~~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. The total amount of unrecognized tax benefits, if recognized, that would reduce Con Edison’s effective tax rate is ~~$25~~$21 million, ~~($18~~with $7 million ~~net of federal taxes).~~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. InFor the ~~three and~~ nine months ended September 30, ~~2017,~~2022 and 2021, the Companies recognized an immaterial amount of interest expense and no penalties for uncertain tax positions in their consolidated income statements. At September 30, ~~2017~~2022 and December 31, ~~2016,~~2021, the Companies recognized an immaterial amount of accrued interest on their consolidated balance sheets.

Note ~~J —~~K – Revenue Recognition

The following table presents, for the three and nine months ended September 30, 2022 and 2021, revenue from contracts with customers as defined in Accounting Standards Codification 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 September 30, 2022			For the Three Months Ended September 30, 2021
(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	$3,165	$(88)	$3,077	$2,776	$(46)	$2,730
Gas	409	5	414	305	2	307
Steam	55	3	58	52	3	55
Total CECONY	$3,629	$(80)	$3,549	$3,133	$(41)	$3,092
O&R
Electric	256	(4)	252	229	(6)	223
Gas	29	10	39	32	2	34
Total O&R	$285	$6	$291	$261	$(4)	$257
Clean Energy Businesses
Renewables	197	—	197	185	—	185
Energy services	13	—	13	65	—	65
Develop/Transfer Projects	37	—	37	14	—	14
Other	—	78	78	—	—	—
Total Clean Energy Businesses	$247	$78	$325	$264	$—	$264
Con Edison Transmission	1	—	1	1	—	1
Other (b)	—	(1)	(1)	—	(1)	(1)
Total Con Edison	$4,162	$3	$4,165	$3,659	$(46)	$3,613

(a) For the Utilities, this includes primarily revenue or negative revenue adjustments from alternative revenue programs, such as the revenue decoupling mechanisms under their NY electric and gas rate plans (see "Rate Plans" in Note B). For the Clean Energy Businesses, this includes revenue from wholesale services.

(b) Parent company and consolidation adjustments.


	For the Nine Months Ended September 30, 2022			For the Nine Months Ended September 30, 2021
(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	$7,525	$(124)	$7,401	$6,695	$(34)	$6,661
Gas	2,090	37	2,127	1,699	31	1,730
Steam	436	8	444	383	10	393
Total CECONY	$10,051	$(79)	$9,972	$8,777	$7	$8,784
O&R
Electric	595	(1)	594	535	(13)	522
Gas	217	2	219	184	(7)	177
Total O&R	$812	$1	$813	$719	$(20)	$699
Clean Energy Businesses
Renewables	524	—	524	519	—	519
Energy services	57	—	57	168	—	168
Develop/Transfer Projects	56	—	56	26	—	26
Other	—	220	220	—	66	66
Total Clean Energy Businesses	$637	$220	$857	$713	$66	$779
Con Edison Transmission	3	—	3	3	—	3
Other (b)	—	(6)	(6)	—	(4)	(4)
Total Con Edison	$11,503	$136	$11,639	$10,212	$49	$10,261

(b) Parent company and consolidation adjustments.


	2022			2021
(Millions of Dollars)	Unbilled contract revenue (a)	Unearned revenue (b)		Unbilled contract revenue (a)	Unearned revenue (b)
Beginning balance as of January 1,	$35	$7		$11	$41
Additions (c)	103	—		174	—
Subtractions (c)	81	4	(d)	127	31	(d)
Ending balance as of September 30,	$57	$3		$58	$10

(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, $4 million and $31 million were included in the balances as of January 1, 2022 and 2021, respectively.

As of September 30, 2022, the aggregate amount of the remaining fixed performance obligations of the Clean Energy Businesses under contracts with customers for energy services was $303 million, of which $265 million will be recognized within the next two years, and the remaining $38 million will be recognized pursuant to long-term service and maintenance agreements.

Utilities' Assessment of Late Payment Charges

In March 2020, the Utilities began suspending new late payment charges and certain other fees for all customers.

For the three months ended September 30, 2021, the estimated amount of these revenues was $12 million and $11 million for Con Edison and CECONY, respectively. For the nine months ended September 30, 2021, the estimated amount of these revenues was $49 million and $46 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. In November 2021, the NYSPSC issued an order establishing a surcharge recovery mechanism for CECONY to collect, commencing December 1, 2021 through December 31, 2022, $43 million and $7 million for electric and gas, respectively, of late payment charges and fees that were not billed for the year ended December 31, 2020. In April 2022, the NYSPSC approved the October 2021 O&R NY joint proposal for new electric and gas rate plans for the three-year period January 2022 through December 2024 that includes certain COVID-19 provisions, such as: recovery of 2020 late payment charges over three years; reconciliation of late payment charges to amounts reflected in rates for years 2021 through 2024; and reconciliation of write-offs of customer accounts receivable balances to amounts reflected in rates from January 1, 2020 through December 31, 2024. CECONY resumed late payment charges for commercial and residential customers who have not experienced a change in financial circumstances due to the COVID-19 pandemic in September 2021 and October 2021, respectively. O&R resumed late payment charges for commercial and residential customers who have not experienced a change in financial circumstances due to the COVID-19 pandemic in October 2021. See "COVID-19 Regulatory Matters" in Note B.

Note L – Current Expected Credit Losses

Allowance for Uncollectible Accounts

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’ 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 September 30, 2022 and December 31, 2021.

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, 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. Generally, the Utilities write off customer accounts receivable as uncollectible 90 days after the account is turned off for non-payment, or the account is closed during the collection process. See "COVID-19 Regulatory Matters" in Note B.

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.

Starting in 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 decreases to the allowance for customer uncollectible accounts for Con Edison and CECONY were $31 million and $27 million, respectively for the three months ended September 30, 2022 and $12 million and $7 million, respectively, for the nine months ended September 30, 2022. The decreases primarily resulted from the credits issued pursuant to the New York State COVID-19 arrears assistance programs. See "COVID-19 Regulatory Matters" in Note B. The increases to the allowance for uncollectible accounts for Con Edison and CECONY were $38 million for the three months ended September 30, 2021 and $165 million and $162 million, respectively, for the nine months ended September 30, 2021.

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 nine months ended September 30, 2022 and 2021:


	For the Three Months Ended September 30,
	Con Edison				CECONY
	Accounts receivable - customers		Other receivables		Accounts receivable - customers		Other receivables
(Millions of Dollars)	2022	2021	2022	2021	2022	2021	2022	2021
Allowance for credit losses
Beginning Balance at July 1,	$336	$275	$9	$7	$324	$262	$7	$4
Recoveries	4	3	—	—	4	3	—	—
Write-offs	2	(24)	(2)	—	4	(23)	(1)	—
Reserve adjustments	(37)	59	2	—	(35)	58	1	1
Ending Balance September 30,	$305	$313	$9	$7	$297	$300	$7	$5


	For the Nine Months Ended September 30,
	Con Edison				CECONY
	Accounts receivable - customers		Other receivables		Accounts receivable - customers		Other receivables
(Millions of Dollars)	2022	2021	2022	2021	2022	2021	2022	2021
Allowance for credit losses
Beginning Balance at January 1,	$317	$148	$22	$7	$304	$138	$19	$4
Recoveries	13	9	—	—	12	8	—	—
Write-offs	(62)	(66)	(5)	(1)	(56)	(62)	(3)	—
Reserve adjustments	37	222	(8)	1	37	216	(9)	1
Ending Balance September 30,	$305	$313	$9	$7	$297	$300	$7	$5

Note M – Financial Information by Business Segment

Con Edison’s principal business segments are CECONY’s regulated utility activities, O&R’s regulated utility activities, the Clean Energy Businesses and Con Edison Transmission. CECONY’s principal business segments are its regulated electric, gas and steam utility activities. The financial data for the business segments for the three and nine months ended September 30, ~~2017~~2022 and ~~2016~~2021 were as follows:


	For the Three Months Ended September 30,
	Operating revenues		Inter-segment revenues		Depreciation and amortization		Operating income/(loss)
(Millions of Dollars)	2022	2021	2022	2021	2022	2021	2022	2021
CECONY
Electric	$3,077	$2,730	$5	$5	$324	$324	$843	$834
Gas	414	307	2	2	93	82	(40)	(48)
Steam	58	55	19	18	24	23	(65)	(58)
Consolidation adjustments	—	—	(26)	(25)	—	—	—	—
Total CECONY	$3,549	$3,092	$—	$—	$441	$429	$738	$728
O&R
Electric	$252	$223	$—	$—	$18	$18	$61	$55
Gas	39	34	—	—	7	6	(10)	(8)
Total O&R	$291	$257	$—	$—	$25	$24	$51	$47
Clean Energy Businesses	$325	$264	$—	$—	$60	$58	$104	$79
Con Edison Transmission	1	1	—	—	—	—	(2)	(2)
Other (a)	(1)	(1)	—	—	(1)	1	(2)	(2)
Total Con Edison	$4,165	$3,613	$—	$—	$525	$512	$889	$850

For the Three 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 $2,469 $2,557 $4 $5 $232 $217 $855 $841
Gas 268 208 2 1 47 41 (12) (28)
Steam 62 63 19 22 21 20 (43) (47)
Consolidation adjustments —
—
(25) (28) —
—
—
—
Total CECONY $2,799 $2,828
$—

$—
$300 $278 $800 $766
O&R
Electric $206 $213
$—

$—
$13 $12 $56 $55
Gas 28 27 —
—
5 5 (11) (7)
Total O&R $234 $240
$—

$—
$18 $17 $45 $48
Clean Energy Businesses $177 $350
$—
$(2) $19 $11 $29 $125
Con Edison Transmission 1 —
—
—
—
—
(2) (1)
Other (a) —
(1) —
2 —
(1) 1 2
Total Con Edison $3,211 $3,417
$—

$—
$337 $305 $873 $940

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.

~~Table of Contents~~


	For the Nine Months Ended September 30,
	Operating revenues		Inter-segment revenues		Depreciation and amortization		Operating income/(loss)
(Millions of Dollars)	2022	2021	2022	2021	2022	2021	2022	2021
CECONY
Electric	$7,401	$6,661	$14	$14	$994	$959	$1,233	$1,337
Gas	2,127	1,730	6	6	275	239	511	490
Steam	444	393	57	55	72	69	(15)	9
Consolidation adjustments	—	—	(77)	(75)	—	—	—	—
Total CECONY	$9,972	$8,784	$—	$—	$1,341	$1,267	$1,729	$1,836
O&R
Electric	$594	$522	$—	$—	$53	$52	$85	$78
Gas	219	177	—	—	20	19	25	30
Total O&R	$813	$699	$—	$—	$73	$71	$110	$108
Clean Energy Businesses	$857	$779	$—	$—	$178	$172	$248	$196
Con Edison Transmission	3	3	—	—	1	1	(8)	(7)
Other (a)	(6)	(4)	—	—	—	—	(5)	(4)
Total Con Edison	$11,639	$10,261	$—	$—	$1,593	$1,511	$2,074	$2,129

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

Note ~~K —~~N – 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)O), 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 30, ~~2017~~2022 and December 31, ~~2016~~2021 were:


(Millions of Dollars)	2022				2021
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)
Con Edison
Fair value of derivative assets
Current	$667	$(415)	$252	(b)(c)	$285	$(158)	$127	(b)
Noncurrent	303	(53)	250	(c)	90	(13)	77	(d)
Total fair value of derivative assets	$970	$(468)	$502		$375	$(171)	$204
Fair value of derivative liabilities
Current	$(212)	$142	$(70)	(b)	$(289)	$137	$(152)	(d)
Noncurrent	(68)	37	(31)		(94)	10	(84)	(d)
Total fair value of derivative liabilities	$(280)	$179	$(101)		$(383)	$147	$(236)
Net fair value derivative assets/(liabilities)	$690	($289)	$401		$(8)	$(24)	$(32)
CECONY
Fair value of derivative assets
Current	$521	$(335)	$186	(b)	$135	$(64)	$71	(b)
Noncurrent	181	(45)	136		71	(15)	56
Total fair value of derivative assets	$702	$(380)	$322		$206	$(79)	$127
Fair value of derivative liabilities
Current	$(134)	$84	$(50)		$(131)	$43	$(88)
Noncurrent	(50)	35	(15)		(50)	10	(40)
Total fair value of derivative liabilities	$(184)	$119	$(65)		$(181)	$53	$(128)
Net fair value derivative assets/(liabilities)	$518	$(261)	$257		$25	$(26)	$(1)

(Millions of Dollars) 2017 2016
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)

Con Edison
Fair value of derivative assets
Current $77 $(67) $10 (b) $81 $(64) $17 (b)
Noncurrent 64 (61) 3 49 (43) 6
Total fair value of derivative assets $141 $(128) $13 $130 $(107) $23
Fair value of derivative liabilities
Current $(141) $71 $(70) $(138) $61 $(77)
Noncurrent (143) 60 (83) (91) 52 (39) (c)
Total fair value of derivative liabilities $(284) $131 $(153) $(229) $113 $(116)
Net fair value derivative assets/(liabilities) $(143) $3 $(140) (b) $(99) $6 $(93) (b) (c)
CECONY
Fair value of derivative assets
Current $55 $(53) $2 (b) $52 $(45) $7 (b)
Noncurrent 57 (55) 2 41 (35) 6
Total fair value of derivative assets $112 $(108) $4 $93 $(80) $13
Fair value of derivative liabilities
Current $(116) $57 $(59) $(111) $45 $(66)
Noncurrent (127) 54 (73) (77) 44 (33)
Total fair value of derivative liabilities $(243) $111 $(132) $(188) $89 $(99)
Net fair value derivative assets/(liabilities) $(131) $3 $(128) (b) $(95) $9 $(86) (b)
(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.

~~(a)~~

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

~~(b)~~

At September 30, 2017 and December 31, 2016, margin deposits for Con Edison ($5 million and $7 million, respectively) and CECONY ($5 million and $7 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 for interest rate swap.~~

(b)At September 30, 2022, margin deposits for Con Edison ($4 million and an immaterial amount) were classified as derivative assets and derivative liabilities, respectively, and for CECONY $4 million was classified as derivative assets on the consolidated balance sheet, but not included in the table. At December 31, 2021 margin deposits for Con Edison and CECONY of $1 million and an immaterial amount, 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)Includes amounts for interest rate swaps of $21 million in current assets and $84 million in noncurrent assets. At September 30, 2022, the Clean Energy Businesses had interest rate swaps with notional amounts of $996 million. The expiration dates of the swaps range from 2025-2041.

(d)Includes amounts for interest rate swaps of $4 million in noncurrent assets, $(20) million in current liabilities and $(38) million in noncurrent liabilities. At December 31, 2021, the Clean Energy Businesses had interest rate swaps with notional amounts of $1,031 million. The expiration dates of the swaps ranged from 2025-2041.

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 regulatory 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 months ended September 30, ~~2017~~2022 and ~~2016:~~

2021:

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

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

$—


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


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

For the 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~~


		For the Three Months Ended September 30,
		Con Edison		CECONY
(Millions of Dollars)	Balance Sheet Location	2022	2021	2022	2021
Pre-tax gains/(losses) deferred in accordance with accounting rules for regulated operations:
Current	Deferred derivative gains	$31	$296	$30	$279
Noncurrent	Deferred derivative gains	23	70	17	66
Total deferred gains/(losses)		$54	$366	$47	$345
Current	Deferred derivative losses	$41	$(4)	$37	$(3)
Current	Recoverable energy costs	168	17	152	13
Noncurrent	Deferred derivative losses	49	(61)	45	(55)
Total deferred gains/(losses)		$258	$(48)	$234	$(45)
Net deferred gains/(losses)		$312	$318	$281	$300
	Income Statement Location
Pre-tax gains/(losses) recognized in income
	Gas purchased for resale	$(2)	$2	$—	$—
	Non-utility revenue	(1)	(23)	—	—
	Other operations and maintenance expense	(1)	1	(1)	1
	Other interest expense (a)	49	11	—	—
Total pre-tax gains/(losses) recognized in income		$45	$(9)	($1)	$1

(a)See (b) below.


		For the Nine Months Ended September 30,
		Con Edison		CECONY
(Millions of Dollars)	Balance Sheet Location	2022	2021	2022	2021
Pre-tax gains/(losses) deferred in accordance with accounting rules for regulated operations:
Current	Deferred derivative gains	$379	$443	$350	$415
Noncurrent	Deferred derivative gains	91	106	79	97
Total deferred gains/(losses)		$470	$549	$429	$512
Current	Deferred derivative losses	$50	$25	$45	$22
Current	Recoverable energy costs	357	(30)	324	(29)
Noncurrent	Deferred derivative losses	19	(16)	18	(13)
Total deferred gains/(losses)		$426	$(21)	$387	$(20)
Net deferred gains/(losses) (a)		$896	$528	$816	$492
	Income Statement Location
Pre-tax gains/(losses) recognized in income
	Gas purchased for resale	$1	$4	$—	$—
	Non-utility revenue	(23)	(22)	—	—
	Other operations and maintenance expense	4	5	4	5
	Other interest expense (b)	158	45	—	—
Total pre-tax gains/(losses) recognized in income		$140	$32	$4	$5

(a)Unrealized net deferred gains on electric and gas derivatives for the Utilities increased as a result of ~~Contents~~

higher electric and gas commodity prices during the nine months ended September 30, 2022. Upon settlement, short-term deferred derivative gains generally reduce the recoverable costs of electric and gas purchases.

(b)Gains recognized in other interest expense relate to interest rate swaps at the Clean Energy Businesses. The gains recognized are consistent with the increasing interest rate environment in 2022.

The following table presents the hedged volume of Con Edison’s and CECONY’s commodity derivative transactions at September 30, ~~2017:~~2022:


	Electric Energy (MWh) (a)(b)	Capacity (MW) (a)	Natural Gas (Dt) (a)(b)	Refined Fuels (gallons)
Con Edison	29,387,725	36,037	289,274,503	672,000
CECONY	27,281,075	22,350	272,830,000	672,000

(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.

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
CECONY 30,492,575
3,000
158,500,000
672,000


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


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

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

At September 30, ~~2017,~~2022, Con Edison and CECONY had ~~$80~~$859 million and $8$543 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~~$110 million with ~~investment-grade counterparties, $23~~independent system operators, $61 million with non-investment grade/non-rated counterparties, ~~$19 million with independent system operators and $15~~$222 million with commodity exchange ~~brokers.~~brokers, and $466 million with investment-grade counterparties. CECONY’s net credit exposure consisted of $7$169 million with commodity exchange brokers and $1$374 million with 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 30, ~~2017:~~2022:


(Millions of Dollars)	Con Edison (a)	CECONY (a)
Aggregate fair value – net liabilities	$116	$55
Collateral posted	100	100
Additional collateral (b) (downgrade one level from current ratings)	25	—
Additional collateral (b)(c) (downgrade to below investment grade from current ratings)	59	20

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

~~(a)~~

(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 additional collateral of $11 million at September 30, 2017. For certain other such non-derivative transactions, the Companies could be required to post collateral under certain circumstances, including in the event counterparties had reasonable grounds for insecurity.

~~(b)~~

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


~~(c)~~	Derivative instruments that are net assets have been excluded from the table. At September 30, 2017, 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 million.

~~Interest Rate Swap~~

~~In December 2016,~~ the Clean Energy Businesses ~~acquired Coram Wind project which holds an interest rate swap~~were no longer extended unsecured credit for such purchases, the Companies would be required to post $6 million of additional collateral at September 30, 2022. 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 ~~terminates~~contain credit-risk-related contingent features that are in ~~June 2024, pursuant~~a net liability position plus amounts owed to ~~which it pays a fixed-rate of 2.0855 percent~~counterparties for settled transactions and ~~receives a LIBOR-based variable rate.~~amounts required by counterparties for minimum financial security. The fair value amounts represent unrealized losses, net of ~~this interest rate swap was immaterial as of~~any unrealized gains where the Companies have a legally enforceable right to offset.

(c)Derivative instruments that are net assets have been excluded from the table. At September 30, ~~2017 and a liability~~2022, if Con Edison had been downgraded to below investment grade, it would have been required to post additional collateral for such derivative instruments of ~~$1 million as of December 31, 2016 on Con Edison’s consolidated balance sheet.~~$96 million.

~~Table of Contents~~

Note ~~L —~~O – 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.

For information on the measurement of Con Edison's investment in MVP, which was measured at fair value on a

~~Table of Contents~~

non-recurring basis, see Note A. Assets and liabilities measured at fair value on a recurring basis as of September 30, ~~2017~~2022 and December 31, ~~2016~~2021 are summarized below.


	2022					2021
(Millions of Dollars)	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)	$189	$610	$37	$(435)	$401	$95	$260	$17	$(171)	$201
Interest rate swaps (a)(b)(c)	—	105	—	—	105	—	4	—	—	4
Other (a)(b)(d)	415	116	—	—	531	492	135	—	—	627
Total assets	$604	$831	$37	$(435)	$1,037	$587	$399	$17	$(171)	$832
Derivative liabilities:
Commodity (a)(b)(c)	$17	$211	$21	$(148)	$101	$33	$266	$28	$(148)	$179
Interest rate swaps (a)(b)(c)	—	—	—	—	—	—	57	—	—	57
Total liabilities	$17	$211	$21	$(148)	$101	$33	$323	$28	$(148)	$236
CECONY
Derivative assets:
Commodity (a)(b)(c)	$170	$497	$9	$(350)	$326	$67	$138	$1	$(79)	$127
Other (a)(b)(d)	400	110	—	—	510	474	127	—	—	601
Total assets	$570	$607	$9	$(350)	$836	$541	$265	$1	$(79)	$728
Derivative liabilities:
Commodity (a)(b)(c)	$5	$144	$9	$(93)	$65	$1	$172	$8	$(53)	$128
Total liabilities	$5	$144	$9	$(93)	$65	$1	$172	$8	$(53)	$128

(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. Con Edison and CECONY had $1 million of commodity derivative liabilities transferred from level 3 to level 2 during the nine months ended September 30, 2022 because of availability of observable market data due to the decrease in the terms of certain contracts from beyond three years as of March 31, 2022 to less than three years as of June 30, 2022. Con Edison and CECONY had $1 million of commodity derivative assets and $4 million and $3 million of commodity derivative liabilities, respectively, transferred from level 3 to level 2 during the year ended December 31, 2021 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, 2021 to less than three years as of December 31, 2021.

(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, and certain over-the-counter derivative instruments for electricity, refined products and natural gas. Derivative instruments classified as Level 2 are valued using industry standard

2017 2016
(Millions of Dollars) 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
Other (a)(b)(d) 271 118 —
—
389 222 111 —
—
333
Total assets $277 $146 $2 $(18) $407 $236 $144 $7 $(24) $363
Derivative liabilities:
Commodity (a)(b)(c) $2 $155 $22 $(26) $153 $4 $144 $6 $(38) $116
Interest Rate Swap (a)(b)(c) —
—
—
—
—
—
1 —
—
1
Total liabilities $2 $155 $22 $(26) $153 $4 $145 $6 $(38) $117
CECONY
Derivative assets:
Commodity (a)(b)(c) $5 $12 $1 $(9) $9 $10 $19 $1 $(10) $20
Other (a)(b)(d) 248 113 —
—
361 200 106 —
—
306
Total assets $253 $125 $1 $(9) $370 $210 $125 $1 $(10) $326
Derivative liabilities:
Commodity (a)(b)(c) $1 $133 $15 $(17) $132 $1 $124
$—
$(26) $99
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.


~~(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 no transfers between levels 1, 2 and 3 for the nine months ended September 30, 2017 and for the year ended December 31, 2016.

~~(b)~~

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

~~(c)~~

The accounting rules for fair value measurements and disclosures require consideration of the impact of nonperformance risk (including credit risk) from a market participant perspective in the measurement of the fair value of assets and liabilities. At September 30, 2017 and December 31, 2016, 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.~~

(c)The accounting rules for fair value measurements and disclosures require consideration of the impact of nonperformance risk (including credit risk) from a market participant perspective in the measurement of the fair value of assets and liabilities. At September 30, 2022 and December 31, 2021, 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)

~~(a)~~

~~Generally, increases/(decreases) in this input in isolation would result in a higher/(lower) fair value measurement.~~Fair Value of Level 3 at September 30, 2022

Valuation
Techniques

Unobservable Inputs

Range

(Millions of Dollars)

Con Edison – Commodity

Electricity

$17

Discounted Cash Flow

Forward energy prices (a)

$22.25-$172.80 per MWh

(4)

Discounted Cash Flow

Forward capacity prices (a)

$0.55-$7.26 per kW-month

Natural Gas

—

Discounted Cash Flow

Forward natural gas prices (a)

$3.75-$21.37 per Dt

Transmission Congestion Contracts/Financial Transmission Rights

Discounted Cash Flow

Inter-zonal forward price curves adjusted for historical zonal losses (b)

$(12.89)-$207.83 per MWh

Total Con Edison—Commodity

$16

CECONY – Commodity

Electricity

Discounted Cash Flow

Forward energy prices (a)

$37.33-$172.80 per MWh

Electricity

(6)

Discounted Cash Flow

Forward capacity prices (a)

$1.10-$7.26 per kW-month

Transmission Congestion Contracts

Discounted Cash Flow

Inter-zonal forward price curves adjusted for historical zonal losses (b)

$1.03-$5.51 per MWh

Total CECONY—Commodity

$—

~~(b)~~

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

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

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

The table listed below provides a reconciliation of the beginning and ending net balances for assets and liabilities measured at fair value as of September 30, ~~2017~~2022 and ~~2016~~2021 and classified as Level 3 in the fair value hierarchy:


	For the Three Months Ended September 30,
	Con Edison		CECONY
(Millions of Dollars)	2022	2021	2022	2021
Beginning balance as of July 1,	$9	$(9)	$(11)	$(7)
Included in earnings	(10)	21	(1)	1
Included in regulatory assets and liabilities	14	(17)	11	(11)
Purchases	1	—	—	—
Settlements	2	—	1	—
Ending balance as of September 30,	$16	$(5)	$—	$(17)


	For the Three Months Ended September 30,						For the Nine Months Ended September 30,
	�� Con Edison		CECONY				Con Edison		CECONY
(Millions of Dollars)	2017	2016	2017	2016		(Millions of Dollars)	2022	2021	2022	2021
Beginning balance as of July 1,	$(10)	$5	$(6)	$2
Beginning balance as of January 1,						Beginning balance as of January 1,	$(11)	$(19)	$(7)	$(10)
Included in earnings	7	(4)	1	—		Included in earnings	13	20	(3)	(2)
Included in regulatory assets and liabilities	(13)	(5)	(8)	(3)		Included in regulatory assets and liabilities	7	(9)	5	(7)
Sales	—	4	—	—
Purchases						Purchases	3	—	—	—
Settlements	(4)	1	(1)	1		Settlements	3		4	2
Transfer out of level 3						Transfer out of level 3	1	—	1	—
Ending balance as of September 30,	$(20)	$1	$(14)		$—	Ending balance as of September 30,	$16	$(5)	$—	$(17)

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)~~($(8) million loss and ~~purchased power costs ($4~~$20 million ~~gain and $5 million loss)~~gain) on the consolidated income statement for the three months ended September 30, ~~2017~~2022 and ~~2016, respectively. Realized~~2021, respectively, 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~~ ($320 million gain and $6$24 million ~~loss) on the consolidated income statement~~gain) for the nine months ended September 30, ~~2017~~2022 and 2016, respectively. The change in fair value relating to Level 3 commodity derivative assets and liabilities held at September 30, 2017 and 2016 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 30, 2017 and 2016, respectively. For the nine months ended September 30, 2017 and 2016, the change in fair value relating to Level 3 commodity derivative assets and liabilities is included in non-utility revenues (immaterial for both periods) and purchased power costs ($2 million gain and $2 million loss) on the consolidated income statement,2021, respectively.

Note ~~M —~~P – 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~~2021, 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.

Clean Energy Businesses

In June 2021, a subsidiary of the Clean Energy Businesses sold substantially all of its membership interest in a renewable electric project, and retained an equity interest of $11 million in the project which is accounted for as an equity method investment. See Note S. The ~~following table summarizes~~earnings of the ~~VIEs in which Con Edison Development has entered into as~~project are determined using the hypothetical liquidation at book value (HLBV) method of accounting, and such earnings were not material for the three and nine months ended 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~~2022 and ~~these projects are accounted for using the equity method of accounting. With the exception of Texas Solar 4,~~2021. Con Edison is not the primary beneficiary since the power to direct the activities that most significantly impact the economics of the ~~entities are shared equally between~~ renewable electric project is not held by the Clean Energy Businesses.

HLBV Accounting

Con Edison ~~Development~~has determined that the use of HLBV accounting is reasonable and ~~third parties. Con Edison’s ownership interest~~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 ~~Texas Solar 4 is 80 percent~~

time. Under the HLBV method, the company calculates the liquidation value allocable to the tax equity investors at the beginning and ~~is consolidated~~end of each period based on the contractual liquidation waterfall and adjusts its income for the period to reflect the change in the ~~financial statements.~~liquidation value allocable to the tax equity investors.

CED Nevada Virginia

In February 2021, a subsidiary of the Clean Energy Businesses entered into an agreement relating to certain projects (CED Nevada Virginia) with a noncontrolling tax equity investor to which a percentage of earnings, tax attributes and cash flows will be allocated. CED Nevada Virginia is a consolidated entity 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~~CED Nevada Virginia is held by the Clean Energy Businesses. The HLBV method of accounting resulted in income/(loss) for the three and nine months ended September 30, 2022 and 2021 as follows:


	For the Three Months Ended September 30,		For the Nine Months Ended September 30,
(Millions of Dollars)	2022	2021	2022	2021
Tax equity investor	$6	$(74)	$(36)	$(127)
After tax	5	(56)	(27)	(96)
Con Edison	(7)	74	32	127
After tax	(5)	56	24	96

Tax Equity Projects

In 2018,the Clean Energy Businesses completed its acquisition of Sempra Solar Holdings, LLC. Included in the 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 ~~Development.~~

~~(b) Represents~~has less than a 100 percent membership interest. Con Edison ~~Development’s ownership interest in~~is the ~~project.~~

~~(c) For investments accounted for under~~primary beneficiary since the ~~equity method, maximum exposure is equal~~power to direct the ~~carrying value~~activities that most significantly impact the economics of the ~~investment on~~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. The HLBV method of accounting resulted in income/(loss) for the three and nine months ended September 30, 2022 and 2021 as follows:


	For the Three Months Ended September 30,		For the Nine Months Ended September 30,
(Millions of Dollars)	2022	2021	2022	2021
Tax equity investor	$—	$—	$(7)	$8
After tax	—	—	(5)	6
Con Edison	16	14	44	27
After tax	12	11	33	20

At September 30, 2022 and December 31, 2021, Con Edison’s consolidated balance ~~sheet. For consolidated investments, such as Texas Solar 4, maximum exposure is equal to~~sheet included the ~~net~~following amounts associated with its VIEs:


	Tax Equity Projects
	Great Valley Solar (c)(d)		Copper Mountain - Mesquite Solar (c)(e)		CED Nevada Virginia (c)(h)
(Millions of Dollars)	2022	2021	2022	2021	2022	2021
Non-utility property, less accumulated depreciation (f)(g)	$269	$275	$420	$431	$627	$643
Other assets	40	37	168	167	61	55
Total assets (a)	$309	$312	$588	$598	$688	$698

Other liabilities	19	14	83	74	325	315
Total liabilities (b)	$19	$14	$83	$74	$325	$315

(a)The assets of the ~~project on~~Tax Equity Projects and CED Nevada Virginia represent assets of a consolidated VIE that can be used only to settle obligations of the consolidated ~~balance sheet less any applicable noncontrolling interest ($7 million~~VIE.

(b)The liabilities of the Tax Equity Projects and CED Nevada Virginia represent liabilities of a consolidated VIE for ~~Texas Solar 4).~~ 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 $71 million and $84 million at September 30, 2022 and December 31, 2021, 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 $100 million and $118 million at September 30, 2022 and December 31, 2021, respectively.

(f)Non-utility property is reduced by accumulated depreciation of $33 million for Great Valley Solar, $55 million for Copper Mountain - Mesquite Solar, and $24 million for CED Nevada Virginia at September 30, 2022.

(g)Non-utility property is reduced by accumulated depreciation of $26 million for Great Valley Solar, $44 million for Copper Mountain - Mesquite Solar, and $10 million for CED Nevada Virginia at December 31, 2021.

(h)CED Nevada Virginia consists of the Copper Mountain Solar 5, Battle Mountain Solar and Water Strider Solar projects for which the noncontrolling interest of the tax equity investor was $54 million and $95 million at September 30, 2022 and December 31, 2021, respectively.

Note Q – Related Party Transactions

The NYSPSC generally requires that the Utilities and Con Edison’s other subsidiaries be operated as separate entities. The Utilities and the other subsidiaries are required to have separate operating employees and operating officers of the Utilities may not be operating officers of the other subsidiaries. The Utilities may provide administrative and other services to, and receive such services from, Con Edison and its other subsidiaries only pursuant to cost allocation procedures approved by the NYSPSC. Transfers of assets between the Utilities and Con Edison or its other subsidiaries may be made only as approved by the NYSPSC. The debt of the Utilities is to be raised directly by the Utilities and not derived from Con Edison. Without the prior permission of the NYSPSC, the Utilities may not make loans to, guarantee the obligations of, or pledge assets as security for the indebtedness of Con Edison or its other subsidiaries. The NYSPSC limits the dividends that the Utilities may pay Con Edison to not more than 100 percent of their respective income available for dividends calculated on a two–year rolling average basis. Excluded from the calculation of “income available for dividends” are non-cash charges to income resulting from accounting changes or charges to income resulting from significant unanticipated events. The restriction also does not apply to dividends paid in order to transfer to Con Edison proceeds from major transactions, such as asset sales, or to dividends reducing each utility subsidiary’s equity ratio to a level appropriate to its business risk. As a result, substantially all of the net assets of CECONY and O&R ($16,867 million and $923 million, respectively), at September 30, 2022, are considered restricted net assets. The NYSPSC may impose additional measures to separate, or “ring fence,” the Utilities from Con Edison and its other subsidiaries.

The costs of administrative and other services provided by CECONY to, and received by it from, Con Edison and its other subsidiaries for the three months ended September 30, 2022 and 2021 were as follows:


	For the Three Months Ended September 30,
	CECONY
(Millions of Dollars)	2022	2021
Cost of services provided	$35	$34
Cost of services received	19	18


	For the Nine Months Ended September 30,
	CECONY
(Millions of Dollars)	2022	2021
Cost of services provided	$101	$100
Cost of services received	56	51

In addition, CECONY and O&R have joint gas supply arrangements in connection with which CECONY sold to O&R, $26 million and $17 million of natural gas for the three months ended September 30, 2022 and 2021, respectively and $97 million and $59 million for the nine months ended September 30, 2022 and 2021, respectively. These amounts are net of the effect of related hedging transactions.

At September 30, 2022 and December 31, 2021, CECONY's net payable to Con Edison for income taxes was $12 million and $10 million, respectively.

The Utilities perform work and incur expenses on behalf of NY Transco, a company in which CET Electric has a 45.7 percent equity interest. The Utilities bill NY Transco for such work and expenses in accordance with established policies. For the three months ended September 30, 2022 and 2021, the amounts billed by the Utilities to NY Transco were $2 million and an immaterial amount, respectively, and $6 million and an immaterial amount for the nine months ended September 30, 2022 and 2021, respectively.

CECONY has storage and wheeling service contracts with Stagecoach Gas Services LLC (Stagecoach), a joint venture formerly owned by a subsidiary of CET Gas and a subsidiary of Crestwood Equity Partners LP (Crestwood). In addition, CECONY is the replacement shipper on one of Crestwood’s firm transportation agreements with Tennessee Gas Pipeline Company LLC. CECONY incurred costs for storage and wheeling services from Stagecoach of $8 million and $23 million for the three and nine months ended September 30, 2021, respectively. During 2021, a subsidiary of CET Gas completed the sale of its 50 percent interest in Stagecoach.

CECONY has a 20-year transportation contract with Mountain Valley Pipeline, LLC (MVP) for 250,000 dekatherms per day of capacity. CET Gas owns a 9.7 percent equity interest in MVP (that is expected to be reduced to 8.0 percent). See "Investments - 2020 and 2021 Partial Impairments of Investment in Mountain Valley Pipeline, LLC (MVP) in Note A. In October 2017, the Environmental Defense Fund and the Natural Resource Defense Council requested the NYSPSC to prohibit CECONY from recovering costs under its MVP contract unless CECONY can demonstrate that ~~was~~the contract is in the public interest. CECONY advised the NYSPSC that it would respond to the request if the NYSPSC opened a proceeding to consider this request. For the three and nine months ended September 30, 2022 and 2021, CECONY incurred no costs under the contract.

FERC has authorized CECONY to lend funds to O&R for a period of not ~~previously contractually required.~~more than 12 months, in an amount not to exceed $250 million, at prevailing market rates. At September 30, 2022 and December 31, 2021 there were no outstanding loans to O&R.

The Clean Energy Businesses had financial electric capacity contracts with CECONY and O&R. For the three months ended September 30, 2022 and 2021, the Clean Energy Businesses realized a $1 million gain and $4 million gain and $2 million gain for the nine months ended September 30, 2022 and 2021, respectively, under these contracts.

Note ~~N —~~R – 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,~~March 2020, the FASB issued ~~amendments~~ASU 2020-04, Reference Rate Reform (Topic 848): Facilitation of the Effects of Reference Rate Reform on ~~financial reporting~~Financial Reporting (ASU 2020-04). In 2017, the United Kingdom’s Financial Conduct Authority 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 ~~leasing transactions through ASU No. 2016-02, “Leases (Topic 842)."~~agreements, after 2021. 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 allUnited Kingdom's Financial Conduct Authority ceased publication 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 beginningU.S. Dollar LIBOR after December ~~15, 2018. Early adoption is permitted. The amendments must~~31, 2021 for one-week and two-month U.S. Dollar LIBOR tenors, and expects to cease publishing after June 30, 2023 for all other U.S. Dollar LIBOR tenors. 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 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.

discontinued. In January ~~2017,~~2021, the FASB issued amendments to the guidance ~~for Business Combinations~~ through ASU ~~2017-01, “Business Combinations~~2021-01 to include all contract modifications and hedging relationships affected by reference rate reform, including those that do not directly reference LIBOR or another reference rate expected to be discontinued, and clarify which optional expedients may be applied to them. As the Companies continue to modify contracts that contain references to LIBOR to allow for the use of an alternative rate, they have applied the practical expedient to not assess each change for a contract modification. The guidance can be applied prospectively. The optional relief is temporary and generally cannot be applied to contract modifications and hedging relationships entered into or evaluated after December 31, 2022. The Companies do not expect the new guidance to have a material impact on their financial position, results of operations or liquidity.

In December 2021, the FASB issued amendments to the guidance on accounting for government assistance through ASU 2021-10, Government Assistance (Topic ~~805)~~832): ~~Clarifying the Definition of a Business.”~~Disclosures by Business Entities about Government Assistance. The amendments ~~in this update clarify~~require that business entities disclose 1) the ~~definition~~types of ~~a business~~assistance, 2) an entity’s

accounting for the assistance, and ~~provide guidance~~3) the effect of the assistance on ~~evaluating whether transactions should be accounted for as acquisitions (or disposals) of assets or businesses.~~an entity’s financial statements. For public entities, the amendments are effective for reporting periods beginning after December 15, ~~2017.~~2021. Early adoption is permitted. The ~~application of this~~Companies have concluded the new guidance iswill not ~~expected to~~ have a material impact on the Companies’ financial position, results of operations and liquidity.

Note S – Dispositions

In ~~January 2017,~~April 2021, a subsidiary of the ~~FASB issued amendments~~Clean Energy Businesses entered into an agreement to sell substantially all of its membership interests in a renewable electric project that it developed and also all of its membership interests in arenewable electric project that it acquired in 2016. The sales were completed in June 2021. The combined carrying value of both projects was approximately $192 million in June 2021. The net pre-tax gain on the sales was $3 million ($2 million after-tax) and was included within "Other operations and maintenance" on Con Edison's consolidated income statement for the year ended December 31, 2021. The retained portion of the membership interest in the renewable electric project, of $11 million, was calculated based on a discounted cash flow of future projected earnings, and the retained portion is accounted for as an equity method investment. The portion of the gain attributable to the ~~guidance~~retained portion of the membership interest was not material 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 2year ended December 31, 2021. See Note P.

Note T - Subsequent Events

Held-for-Sale Treatment of the ~~goodwill impairment test wherein an entity has~~Clean Energy Businesses

On October 1, 2022, Con Edison entered into a purchase and sale agreement pursuant to ~~compute~~which Con Edison agreed to sell the ~~implied fair~~Clean Energy Businesses to RWE Renewables Americas, LLC, a subsidiary of RWE Aktiengesellschaft (RWE) for a total of $6,800 million, subject to closing adjustments. The purchase price will be adjusted (i) upward for certain cash and cash equivalents, (ii) downward for certain indebtedness and debt-like items, (iii) downward for certain transaction expenses, (iv) upward or downward to the extent that the net working capital varies from a set target, (v) upward or downward to the extent that capital expenditures incurred prior to the closing of the transaction vary from a set budget, and (vi) downward by the value ~~of goodwill by performing procedures~~allocated to ~~determine the fair value of its~~certain assets and ~~liabilities. Under~~projects that are not able to be conveyed to RWE upon closing of the ~~new guidance, an entity should recognize an impairment charge for~~transaction. The purchase and sale agreement includes certain customary representations, warranties and covenants. The transaction is subject to customary closing conditions, including, among other things, expiration or early termination of the ~~amount~~waiting period under the Hart-Scott-Rodino Antitrust Improvements Act of 1976, as amended, and approvals by ~~which~~ the ~~carrying amount exceeds~~Committee on Foreign Investment in the ~~reporting unit’s fair value up to~~United States and 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~~FERC. The transaction is ~~permitted. The application of this guidance is not~~ expected to ~~have a material impact~~close in the first half of 2023, subject to satisfaction of the foregoing conditions, among other things.

Concurrent with entering into the purchase and sale agreement, Con Edison incurred costs in the normal course of the sale process. Substantially all of the expected transaction costs of approximately $50 million to $60 million ($35 million to $45 million after-tax) are expected to be incurred in 2022. Also, as described in Note A, depreciation and amortization expense of approximately $60 million ($39 million after-tax) will not be recorded on the ~~Companies’ financial position, results~~assets 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~~Clean Energy Businesses in the ~~process~~fourth quarter of ~~evaluating~~2022. Further, since the Clean Energy Businesses were designated as held for sale as of October 1, 2022 and the transaction is expected to close in the first half of 2023, Con Edison is analyzing the potential impact of the ~~new guidance~~anticipated sale on ~~the Company’s financial position, results~~its state apportionment factors. Based on current estimates, Con Edison expects to record an increase to its net deferred income tax liabilities and corresponding deferred income tax expense of ~~operations and liquidity.~~

~~In March 2017, the FASB issued amendments~~approximately $100 million to ~~the guidance for retirement benefits through ASU 2017-07, “Compensation-Retirement Benefits (Topic 715): Improving the Presentation~~$140 million (net 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 presentedfederal income taxes) in the ~~same line item as current employee compensation costs.~~ fourth quarter of 2022.

The ~~remaining components~~Clean Energy Business represent a reportable segment. See Note M. At September 30, 2022, the carrying amounts of the ~~net benefit cost should be presented outside~~major classes of ~~income from operations. Additionally,~~assets and liabilities of the ~~update allows only~~Clean Energy Businesses, which subsequent to September 30, 2022 met the ~~service cost component~~accounting criteria to be ~~eligible~~designated as held for ~~capitalization. For public entities, the amendments~~sale, are ~~effective~~presented as if on a held for reporting periods beginning after December 15, 2017. 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 operationssale basis, and ~~liquidity.~~accordingly exclude certain intercompany and net deferred tax liability balances, as follows:

In March 2017, the FASB issued amendments to the guidance for debt securities through ASU 2017-08, “Receivables-Nonrefundable Fees and Other Costs (Subtopic 310-20): Premium Amortization on Purchased Callable Debt Securities.” The amendments in this update shorten the amortization period for certain callable debt securities held at a premium. The amendments do not require an accounting change for securities held at a discount; 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 this guidance is not expected to have a material impact on the Companies’ financial position, results of operations and 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.

38
54


(Millions of Dollars)			September 30, 2022
ASSETS
CURRENT ASSETS
Cash and temporary cash investments			$18
Accounts receivable and other receivables - net allowance for uncollectible accounts			204

Accrued unbilled revenue			120
Fuel oil, gas in storage, materials and supplies, at average cost			40
Restricted cash			163
Fair value of derivatives assets			58
Other current assets			173
TOTAL CURRENT ASSETS			776

NON-UTILITY PLANT
Non-utility property, net accumulated depreciation			4,114
Construction work in progress			385
NET PLANT			4,499
OTHER NONCURRENT ASSETS
Goodwill			31
Intangible assets, less accumulated amortization			1,222
Operating lease right-of-use asset			266
Fair value of derivatives assets			104
Other deferred charges and noncurrent assets			22
TOTAL OTHER NONCURRENT ASSETS			1,645
TOTAL ASSETS			$6,920


(Millions of Dollars)			September 30, 2022
LIABILITIES
CURRENT LIABILITIES
Long-term debt due within one year			$323
Term loan			150

Accounts payable			217

Operating lease liabilities			32
Other current liabilities			143
TOTAL CURRENT LIABILITIES			865
NONCURRENT LIABILITIES
Asset retirement obligations			76

Operating lease liabilities			248
Other deferred credits and noncurrent liabilities			20
TOTAL NONCURRENT LIABILITIES			344
LONG-TERM DEBT			2,344
TOTAL LIABILITIES			$3,553

~~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 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 Quarter Financial Statements and the notes thereto and the MD&A in Item 7 of the Companies’ combined Annual Report on Form 10-K for the year ended December 31, ~~2016~~2021 (File ~~Nos. 1-14514~~Nos.1-14514 and ~~1-1217,~~1-01217, the Form 10-K) and the MD&A in Part 1, Item 2 of the Companies' combined

Quarterly Reports on Form 10-Q for the quarterly periods ~~ended~~ended March 31, ~~2017~~2022 and June 30, ~~2017~~2022 (File Nos. 1-14514 and ~~1-1217)~~1-01217).

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 sustainable energy infrastructure projects and provide energy-related products and services to wholesale and retail customers. In October 2022, Con Edison entered into a purchase and sale agreement pursuant to which Con Edison agreed to sell the Clean Energy Businesses to RWE Renewables Americas, LLC, a subsidiary of RWE Aktiengesellschaft. See Note T to the Third Quarter Financial Statements. Con Edison Transmission invests in electric transmission ~~facilities~~projects and manages both electric and gas ~~pipeline and storage facilities.~~assets while seeking to develop electric transmission projects. See "Investments" in Note A to the Third Quarter Financial Statements.

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.~~its NY customers. 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.

In addition to the Companies’ material contingencies described in Notes B, G and H to the Third Quarter Financial Statements, the Companies’ management considers the following events, trends, and uncertainties to be important to understanding the Companies’ current and future financial condition.

~~Table~~

Anticipated Sale of ~~Contents~~the Clean Energy Businesses

On October 1, 2022, Con Edison entered into a purchase and sale agreement pursuant to which Con Edison agreed to sell the Clean Energy Businesses to RWE Renewables Americas, LLC, a subsidiary of RWE Aktiengesellschaft (RWE) for a total of $6,800 million, subject to closing adjustments. The purchase price will be adjusted (i) upward for certain cash and cash equivalents, (ii) downward for certain indebtedness and debt-like items, (iii) downward for certain transaction expenses, (iv) upward or downward to the extent that the net working capital varies from a set target, (v) upward or downward to the extent that capital expenditures incurred prior to the closing of the transaction vary from a set budget, and (vi) downward by the value allocated to certain assets and projects that are not able to be conveyed to RWE upon closing of the transaction.The purchase and sale agreement includes certain customary representations, warranties and covenants. The transaction is subject to customary closing conditions, including, among other things, expiration or early termination of the waiting period under the Hart-Scott-Rodino Antitrust Improvements Act of 1976, as amended (HSR), and approvals by the Committee on Foreign Investment in the United States (CFIUS) and the FERC. The HSR notification and report form and the FERC filings were submitted on October 28, 2022 and the CFIUS filing is expected to be submitted in early December 2022. The transaction is expected to close in the first half of 2023, subject to satisfaction of the foregoing conditions, among other things.

Subject to the closing of the transaction, Con Edison intends to use the net proceeds from the sale to repay $1,050 million of parent company debt in 2023, invest in the Utilities and, subject to board approval, institute a share repurchase program.

In anticipation of the proceeds from the pending transaction, Con Edison intends to forego common equity issuances in 2022 and 2023 and will evaluate equity needs for 2024.

See “Assets Held for Sale” in Note A and Note T to the Third Quarter Financial Statements and "Liquidity and Financing," below.

CECONY Electric and Gas Rate Plans

In January 2022, CECONY filed a request with the NYSPSC for electric and gas rate increases of $1,199 million and $503 million, respectively, effective January 2023. In April 2022, CECONY updated its January 2022 request and decreased its requested January 2023 increase for electric and gas rate increases to $1,038 million and $402 million, respectively. In May 2022, the NYSDPS submitted testimony in the NYSPSC proceeding in which CECONY requested electric and gas rate increases, effective January 2023. The NYSDPS testimony supports electric and gas rate increases of $278 million and $164 million, respectively. CECONY’s future earnings will depend on the rates authorized in, and the other provisions of, its January 2023 rate plans and CECONY’s ability to operate its businesses in a manner consistent with such rate plans. Therefore, the outcome of CECONY’s rate request, which requires approval by the NYSPSC, will impact the Companies’ future financial condition, results of operations and liquidity. See “Rate Plans” in Note B to the Third Quarter Financial Statements.

Pursuant to its electric and gas rate plans, CECONY recorded $92 million of earnings for the year ended December 31, 2021 of earnings adjustment mechanisms and positive incentives, primarily reflecting the achievement of certain energy efficiency measures. For the nine months ended September 30, 2022, CECONY recorded a reduction in the amount of previously recorded earnings adjustment mechanisms of $4.9 million. The amount of earnings or losses CECONY records pursuant to the earnings adjustment mechanisms and positive incentives will also impact the Companies’ future financial condition, results of operations and liquidity. See “Rate Plans” in Note B to the Third Quarter Financial Statements.

Clean Energy Goals

The success of the Companies’ efforts to meet federal, state and city clean energy policy goals and the impact of such goals on CECONY’s electric, gas and steam businesses and O&R’s electric and gas businesses may impact the Companies’ future financial condition. The Utilities expect electric demand to increase and gas and steam usage to decrease in their service territories as federal, state and local laws and policies are enacted and implemented that continue to promote renewable electric energy. In particular, the long-term future of the Utilities’ gas businesses depends upon the role that natural gas or other gaseous fuels will play in facilitating New York State’s and New York City’s climate goals. In addition, the impact and costs of climate change on the Utilities’ systems and the success of the Utilities’ efforts to increase system reliability and manage service interruptions resulting from severe weather may impact the Companies’ future financial condition, results of operations and liquidity.

Con Edison Transmission

Con Edison Transmission has taken steps to realign its portfolio to focus on electric transmission rather than gas by completing the sale of its 50 percent interest in Stagecoach in 2021. During 2020 and 2021, Con Edison Transmission recorded impairments on its investment in Mountain Valley Pipeline, LLC and during 2021, Con Edison Transmission recorded impairments on its previously held interest in Stagecoach and its interest in Honeoye Storage Corporation (Honeoye). Any future impairments of Con Edison Transmission’s investments may impact Con Edison’s future financial condition and results of operations. Con Edison Transmission is pursuing opportunities and participating in competitive solicitations to develop electric transmission projects that will deliver offshore wind energy to high voltage electric grids in NY, through its NY Transco partnership, and in NJ. The success of Con Edison Transmission’s efforts in these competitive solicitations and to grow its electric transmission portfolio may impact Con Edison’s future capital requirements. See “Investments” in Note A to the Third Quarter Financial Statements.

COVID-19

The Coronavirus Disease 2019 (COVID-19) pandemic has impacted, and continues to impact, countries, communities, supply chains and markets. The COVID-19 pandemic resulted in changes in governmental and regulatory policy and contributed to an economic slowdown in the Companies’ service territories. The decline in business activity in the Companies’ service territories resulted in a slower recovery of cash from outstanding customer accounts receivable balances, material increases in customer accounts receivable balances, increases to the allowance for uncollectible accounts, and may result in increases to write-offs and recoveries of customer accounts. The extent to which COVID-19 will continue to impact the Companies, in particular, the Companies’ ability to recover cash for outstanding customer accounts receivable balances and the amount of write-offs of customer accounts, may impact Con Edison’s future financial condition, results of operations and liquidity. See “Coronavirus Disease 2019 (COVID-19) Impacts” below and “COVID-19 Regulatory Matters” in Note B to the Third Quarter Financial Statements.

CECONY

Electric

CECONY provides electric service to approximately ~~3.4~~3.6 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,~~2022, electric peak demand in CECONY's service area was ~~12,321~~12,424 MW (which occurred on ~~July 20, 2017)~~August 9, 2022). At design conditions, electric peak demand in ~~the company's~~CECONY's service area would have been approximately ~~13,270~~12,692 MW in ~~2017~~2022 compared to CECONY's forecast of 12,570 MW. The higher peak demand at design conditions as compared to the ~~company's~~ forecast primarily reflects a moderate pace of ~~13,470 MW. The company's~~recovery in electric demand in CECONY's territory during the emergence from the COVID-19 pandemic. CECONY increased its five-year forecast of average annual ~~growth of the~~change in electric peak demand in its service area at design conditions isfrom approximately ~~0.1~~0.4 percent ~~for 2018~~(for 2022 to ~~2022 (as compared~~2026) to approximately ~~0.2~~0.6 percent ~~for 2017~~(for 2023 to ~~2021)~~2027).

Gas

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

In May ~~2017, the company~~2022, CECONY decreased its five-year forecast of average annual growth of the firm peak gas demand in its service area at design conditions from approximately ~~2.3~~1.3 percent (for ~~2017~~2022 to ~~2021)~~2026) to ~~1.6~~approximately 1.0 percent (for ~~2018~~2023 to ~~2022)~~2027). The decrease primarily reflects ~~among~~an expected increase in customers’ energy efficiency measures and electrification of space heating. The decrease also reflects expected lower commercial building occupancy levels to continue in the aftermath of the COVID-19 pandemic.

In March 2019, due to gas supply constraints, CECONY established a temporary moratorium on new applications for firm gas service in most of Westchester County. In July 2020, CECONY filed a gas planning analysis with the NYSPSC that stated the moratorium could be lifted when increased pipeline capacity is achieved upon completion of Tennessee Gas Pipeline’s East 300 Upgrade Project (the East 300 Upgrade Project) or peak demand is reduced through efficiency and other ~~things,~~demand side reductions to a level that would enable CECONY to lift the moratorium. The East 300 Upgrade Project would involve modifying two existing compressor stations in ~~rolling~~Pennsylvania and NJ and construction of one new compressor station in NJ. In April 2022, FERC issued a certificate of public convenience and necessity that authorizes Tennessee Gas Pipeline to construct and operate the ~~forecast forward~~East 300 Upgrade

Project. In October 2022, FERC approved Tennessee Gas Pipeline's request to begin construction activities for the existing compressor station in Pennsylvania and the new compressor station in NJ. The Clean Air permit and FERC approval to begin construction have not yet been obtained for the existing compressor station in NJ. The Tennessee Gas Pipeline’s East 300 Upgrade Project is expected to be completed by November 2023.

CECONY’s gas planning analysis also stated that the company is monitoring a ~~year, another year~~gas supply constraint for the New York City portion of ~~oil-to-gas conversions has been completed~~its service territory. In May 2022, the NYSPSC issued orders on gas planning and ~~fewer opportunities to convert remain.~~moratorium management. The orders set forth a schedule for filing future gas planning analyses and the process for initiating, operating and lifting a natural gas moratorium.

Steam

CECONY operates the largest steam distribution system in the United States by producing and delivering approximately ~~19,500~~17,112 MMlb of steam annually to approximately ~~1,640~~1,530 customers in parts of Manhattan.

In May 2022, CECONY decreased its five-year forecast of average annual growth in the peak steam demand in its service area at design conditions from a 0.1 percent increase (for 2022 to 2026) to a 0.1 percent decrease (for 2023 to 2027). The decrease reflects expected lower commercial building occupancy levels in the aftermath of the COVID-19 pandemic.

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, "NY", and northern New Jersey "NJ", an approximately 1,300 square mile service area.

During the summer of ~~2017,~~2022, electric peak demand in O&R's service area was ~~1,410~~1,457 MW (which occurred on ~~June 13, 2017)~~August 9, 2022). At design conditions, electric peak demand in ~~the company's~~O&R's service area would have been approximately ~~1,615~~1,536 MW in ~~2017~~2022 compared to ~~the company's~~O&R's forecast of ~~1,625~~1,570 MW. ~~The company’s~~This year's lower than expected peak demand at design conditions is primarily attributed to a reduction in new business. O&R increased its five-year forecast of average annual ~~growth of the~~change in electric peak demand in its service area at design conditions ~~is flat for 2018~~from an approximately 0.3 percent decrease (for 2022 to ~~2022 (as compared~~2026) to approximately ~~(0.1)~~a 0.4 percent ~~for 2017~~increase (for 2023 to ~~2021)~~2027).

Gas

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

In May 2022, O&R decreased its five-year forecast of average annual growth of the firm peak gas demand in its service area at design conditions from approximately a 0.1 percent increase (for 2022 to 2026) to approximately a 0.1 percent decrease (for 2023 to 2027). The decrease primarily 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.

The Clean Energy Businesses develop, own and operate renewable and sustainable energy infrastructure projects and provide energy-related products and services to wholesale and retail customers. The Clean Energy Businesses have approximately 3,200 megawatts (AC) of renewable energy projects in the U.S. In ~~September 2016,~~October 2022, Con Edison ~~sold~~entered into a purchase and sale agreement pursuant to which Con Edison agreed to sell the ~~retail electric supply business of its~~ Clean Energy Businesses to RWE Renewables Americas, LLC, a subsidiary of ~~Exelon Corporation for cash consideration~~RWE Aktiengesellschaft. The closing of ~~$235 million. In addition, Con Edison received $23 million~~the transaction is subject to certain customary closing conditions, including, among other things, expiration or early termination of any required waiting periods under the Hart-Scott-Rodino Antitrust Improvements Act of 1976, as amended and approvals by the Committee on Foreign Investment in ~~cash as a working capital adjustment~~the United States and FERC. The transaction is expected to close in ~~February 2017.~~

~~In May 2017, Con Edison Development sold a development-stage solar electric production project for $11 million and agreed~~the first half of 2023, subject to ~~perform engineering, procurement and construction for~~satisfaction of the ~~project.~~foregoing conditions, among other things. See Note OT to the Third Quarter Financial Statements.

~~Table of Contents~~

Con Edison Transmission

Con Edison Transmission, Inc. invests in electric transmission projects and manages both electric and gas ~~transmission projects~~assets 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, 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 an existing gas pipeline and storage business located in northern Pennsylvania and southern New York. Also,NY. CET Gas and CECONY own 71.2

59 ��

percent and 28.8 percent interests, respectively, in Honeoye, ~~Storage Corporation~~ which operates a gas storage ~~business~~facility in upstate ~~New York.~~NY. In addition, CET Gas owns a ~~12.5~~9.7 percent interest (that is expected to be reduced to 8.0 percent based on the current project cost estimate and CET Gas’ previous capping of its cash contributions to the joint venture) in Mountain Valley Pipeline LLC (MVP), a joint venture developing a proposed ~~300 mile~~300-mile gas transmission project in ~~West Virginia~~WV and ~~Virginia (Mountain Valley Pipeline).~~VA. 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, 2022						For the Nine Months Ended September 30, 2022						At September 30, 2022
(Millions of Dollars, except percentages)	Operating Revenues			Net Income for Common Stock			Operating Revenues			Net Income for Common Stock			Assets
CECONY	$3,549	85	%	$493	80	%	$9,972	86	%	$1,138	77	%	$54,812	84	%
O&R	291	7		34	6		813	7		72	5		3,424	5
Total Utilities	$3,840	92	%	$527	86	%	$10,785	93	%	$1,210	82	%	$58,236	89	%
Clean Energy Businesses (a)	325	8		97	16		857	7		293	20		6,923	11
Con Edison Transmission	1	—		1	—		3	—		2	—		302	—
Other (b)	(1)	—		(12)	(2)		(6)	—		(35)	(2)		302	—
Total Con Edison	$4,165	100	%	$613	100	%	$11,639	100	%	$1,470	100	%	$65,763	100	%

(a)Net income for common stock from the Clean Energy Businesses for the three and nine months ended September 30, 2022 reflects $41 million and $121 million, respectively, of net after-tax mark-to-market effects and ($4) million (after-tax) and $33 million (after-tax), respectively, of the effects of HLBV accounting for tax equity investments in certain renewable and sustainable electric projects.

(b)Other includes parent company and consolidation adjustments. Net income for common stock for the three and nine months ended September 30, 2022 includes $(3) million and $(10) million, respectively, of income tax impact on the net after-tax mark-to-market effect and an immaterial amount and $(3) million (after-tax), respectively, of income tax impact on the effects of HLBV accounting for tax equity investments in certain renewable and sustainable projects.

Inflation Reduction Act

On August 16, 2022, the Inflation Reduction Act of 2022 (the Act) was signed into law and included a new 15% corporate alternative minimum tax (CAMT) for corporations that report over $1,000 million in profits (i.e., based on book income). Under the Act, a corporation will be subject to the CAMT if its average annual Adjusted Financial Statement Income (AFSI) for the three taxable year period ending prior to the taxable year exceeds $1,000 million. The CAMT will apply to tax years beginning after December 31, 2022. Based on management’s preliminary calculations, Con Edison and the Utilities will not be subject to the CAMT in 2023, but are expected to be subject to the CAMT in subsequent years. However, the provisions of the CAMT are not expected to have a material impact on Con Edison and the Utilities' financial position, results of operations or liquidity in the four years that management calculated an estimated CAMT in 2024 through 2027. Con Edison and the Utilities are continuing to assess the impacts of the Act on them and such assessments may be impacted by guidance to be issued by the U.S. Treasury in the future.

Coronavirus Disease 2019 (COVID-19) Impacts

The Companies continue to monitor the impact of the COVID-19 global pandemic on their employees, customers and other stakeholders. The Companies support employee health and facility hygiene through regular cleaning and disinfecting of their facilities and leveraging technology through hybrid (combination of in-person and remote) meetings. Employees who test positive for COVID-19 are directed to isolate at home and are evaluated for close, prolonged contact with other employees. Following the Centers for Disease Control and Prevention guidelines, sick 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 emergence from the pandemic.

In October 2021, in response to President Biden's Executive Order 14042, the Companies announced that they are committed to complying with the mandate for employees of federal contractors and subcontractors to be fully vaccinated against COVID-19 by the federally-required deadline, unless employees are legally entitled to an accommodation. In December 2021, an injunction was issued in the United States District Court for the Southern District of Georgia which prevented the U.S. government from enforcing this federal contractor vaccine mandate nationwide. In August 2022, the Eleventh Circuit of the U.S. Court of Appeals issued a decision upholding the injunction against the federal contractor vaccine mandate in states that were a party to the action. The federal government subsequently announced that it would not enforce the vaccine mandate in all states.

In December 2021, New York City instituted a vaccination mandate that requires employees of private businesses located in New York City who perform in-person work or interact with the public to be vaccinated against COVID-19.

For the Three Months Ended
September 30, 2017 For the Nine Months Ended
September 30, 2017 At September 30, 2017
(Millions of Dollars, except percentages)
Operating
Revenues
Net Income
Operating
Revenues
Net Income Assets
CECONY $2,799 87 % $401 88 % $7,948 88 % $883 87 % $41,647 85 %
O&R 234 7
22 5
667 7
53 5
2,832 6
Total Utilities 3,033 94
423 93
8,615 95
936 92
44,479 91
Clean Energy Businesses (a) 177 6
26 5
460 5
54 5
2,811 6
Con Edison Transmission 1 —
9 2
1 —
25 2
1,210 2
Other (b) —
—
(1) —
(4) —
5 1
746 1
Total Con Edison $3,211 100 % $457 100 % $9,072 100 % $1,020 100 % $49,246 100 %

~~(a)~~

Net income from the Clean Energy Businesses includes for the nine months ended September 30, 2017 $1 million net after-tax gain related to the sale of a development stage solar electric production project (see Note O to the Third Quarter Financial Statements). Also includes for the three and nine months ended September 30, 2017 $4 million and $1 million of net after-tax mark-to-market gains, respectively.


~~(b)~~	~~Other includes parent company and consolidation adjustments.~~

In furtherance of the mandate, in December 2021, the New York City Commissioner of Health and Mental Hygiene issued an order that requires workers entering workplaces within New York City to provide proof of COVID-19 vaccination, except in cases of a medical or religious exemption. The New York City vaccination mandate was rescinded on November 1, 2022.

Below is additional information related to the effects of the COVID-19 pandemic and the Companies’ actions. Also, see “COVID-19 Regulatory Matters” in Note B to the Third Quarter Financial Statements.

Impact of CARES Act and 2021 Appropriations 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 had several key business tax relief measures that presented cash benefits and/or refunds for Con Edison and its subsidiaries, including permitting a five-year carryback of a NOL for tax years 2018, 2019 and 2020, temporary removal of the 80 percent limitation of NOL carryforwards against taxable income for tax years before 2021, temporary relaxation of the limitations on interest deductions, employee retention tax credit and deferral of payments of employer payroll taxes.

The CARES Act also allowed 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 deferred the payment of employer payroll taxes for the period April 1, 2020 through December 31, 2020 of approximately $71 million ($63 million of which is for CECONY). The Companies paid half of this liability during 2021 and will repay the other half by December 31, 2022.

Under the CARES Act, the Companies qualified for an employee retention tax credit for “eligible employers” related to governmental authorities imposing restrictions that partially suspended their operation for a portion of their workforce due to the COVID-19 pandemic. In December 2020, the Consolidated Appropriations Act, 2021 (the 2021 Appropriations Act) was signed into law. The 2021 Appropriations Act, among other things, extended the expiring employee retention tax credit to include qualified wages paid in the first two quarters of 2021, increased the qualified wages paid to an employee from 50 percent up to $10,000 annually in 2020 to 70 percent up to $10,000 per quarter in 2021 and increased the maximum employee retention tax credit amount an employer could take per employee from $5,000 in 2020 to $14,000 in the first two quarters of 2021. In March 2021, the American Rescue Plan Act was signed into law that expanded the 2021 Appropriations Act to extend the period for eligible employers to receive the employer retention credit from June 30, 2021 to December 31, 2021. In November 2021, the Infrastructure and Investment and Jobs Act was signed into law and accelerated the end of the employee retention tax credit retroactive to October 1, 2021, rather than December 31, 2021. This effectively reduced the maximum credit available from $28,000 to $21,000 per employee. For the nine months ended September 30, 2021, Con Edison and CECONY recognized a tax benefit to Taxes, other than income taxes of $9 million and $4 million, respectively.

Accounting Considerations

Due to the COVID-19 pandemic and subsequent New York State on PAUSE and related executive orders (that have since been lifted), decline in business, bankruptcies, layoffs and furloughs, among other factors, both commercial and residential customers have had and may continue to have increased difficulty paying their utility bills. In June 2020, the state of NY enacted a law prohibiting NY utilities, including CECONY and O&R, from disconnecting residential customers, and starting in May 2021 small business customers, during the COVID-19 state of emergency, which ended in June 2021. In addition, such prohibitions were in effect until December 21, 2021 for residential and small business customers who experienced a change in financial circumstances due to the COVID-19 pandemic.

CECONY and O&R have existing allowances for uncollectible accounts established against their customer accounts receivable balances that 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. For the three and nine months ended September 30, 2022, CECONY issued total credits of $265.8 million and $315.1 million, respectively, and O&R issued total credits of $4.7 million and $5.5 million, respectively, towards reducing customers’ accounts receivable balances pursuant to COVID-19 arrears assistance programs. See "COVID-19 Regulatory Matters" in Note B to the Third Quarter Financial Statements. The NYSPSC may consider additional programs to address utility arrearages. CECONY and O&R reduced customer accounts receivables balances commensurate with amounts authorized to be recovered under customer arrearage programs and expect to further reduce customer accounts balances for additional amounts that may be authorized by the NYSPSC. See "COVID-19 Regulatory Matters" in Note B to the Third Quarter Financial Statements and "Liquidity and Financing," below.

CECONY’s and O&R’s "accounts receivable – customers" balance (net allowance for uncollectible accounts)

increased from $1,841 million and $91 million at December 31, 2021 to $1,982 million and $101 million at September 30, 2022, respectively. The amount of the customer accounts receivable balances that are over 60 days in arrears for CECONY and O&R decreased from $1,272 million and $29 million, respectively, as of December 31, 2021 to $1,247 million and $21 million, respectively, as of September 30, 2022. CECONY’s and O&R’s allowances for uncollectible customer accounts reserve decreased from $304 million and $12.3 million at December 31, 2021 to $297 million and $7.9 million at September 30, 2022 respectively.

During the first nine months of 2022, the potential economic impact of the COVID-19 pandemic and the COVID-19 arrears assistance programs, were considered in forward-looking projections related to write-off and recovery rates, resulting in changes to the customer allowance for uncollectible accounts as detailed herein. 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 goodwill, long-lived or intangible assets may not be recoverable at September 30, 2022.

NY Legislation

In April 2021, NY passed a law that increases the corporate franchise tax rate on business income from 6.5% to 7.25%, retroactive to January 1, 2021, for taxpayers with taxable income greater than $5 million. The law also reinstates the business capital tax at 0.1875%, not to exceed a maximum tax liability of $5 million per taxpayer. NY requires a corporate franchise taxpayer to calculate and pay the highest amount of tax under the three alternative methods: a tax on business income; a tax on business capital; or a fixed dollar minimum. The provisions to increase the corporate franchise tax rate and reinstate a capital tax are scheduled to expire after 2023 and are not expected to have a material impact on the Companies’ financial position, results of operations or liquidity.

In addition, the new law created a program that allows eligible residential renters in NY who require assistance with rent and utility bills to have up to twelve months of electric and gas utility bill arrears forgiven, provided that such arrears were accrued on or after March 13, 2020. The program will be administered by the State Office of Temporary and Disability Assistance (OTDA) in coordination with the NYSDPS and the NYSPSC (the OTDA Program). Under the OTDA Program, CECONY and O&R would qualify for a refundable tax credit for NY gross-receipts tax equal to the amount of arrears waived by the Utilities in the year that the arrears are waived and certified by the NYSPSC. See "COVID-19 Regulatory Matters” in Note B to the Third 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 access the capital markets as needed since the start of the COVID-19 pandemic in March 2020. Inflationary pressure and higher interest rates could increase the amount of capital needed by the Utilities and the costs of such capital. See Note C and Note D to the Third Quarter Financial Statements and "Interest Rate Risk," below.

The decline in business activity in the Utilities’ service territory due to the COVID-19 pandemic and subsequent New York State on PAUSE and related executive orders (that have since been lifted) resulted in a slower recovery in cash of outstanding customer accounts receivable balances in 2020 and 2021. During the nine months ended September 30, 2022, increases in electric and gas commodity prices have contributed and may further contribute to a slower recovery of cash from outstanding customer accounts receivable balances. These trends will likely continue through the remainder of 2022. See "COVID-19 Regulatory Matters" in Note B to the Third Quarter Financial Statements and “Financial and Commodity Market Risks – Commodity Price Risk,” below.

New York State and the NYSPSC implemented COVID-19 arrears assistance programs that provide credits and establishes surcharge recovery mechanisms towards reducing the arrears balances of low-income electric and gas customers of CECONY and O&R. See "COVID-19 Regulatory Matters" in Note B and Note L to the Third Quarter Financial Statements and “Coronavirus Disease 2019 (COVID-19) Impacts – Accounting Considerations,” above.

In October 2022, Con Edison entered into an agreement to sell the Clean Energy Businesses for $6,800 million, subject to closing adjustments, including working capital adjustments and downward adjustments for indebtedness, transaction expenses and the value of certain assets and projects that are not able to be conveyed to the buyer upon closing of the transaction. The transaction is subject to, among other things, customary closing conditions and receipt of regulatory approvals, and is expected to close in the first half of 2023. Subject to the closing of the transaction, Con Edison intends to use the proceeds from the sale to repay $1,050 million of parent company debt in 2023, invest in its regulated utilities and, subject to board approval, institute a share repurchase program. In

anticipation of the proceeds from the pending transaction, Con Edison intends to forego common equity issuances in 2022 and 2023 and will evaluate equity needs for 2024. See "Assets Held for Sale" in Note A and Note T to the Third Quarter Financial Statements and "Anticipated Sale of the Clean Energy Business," above.

Results of Operations

Net income for common stock and earnings per share for the three and nine months ended September 30, ~~2017~~2022 and ~~2016~~2021 were as follows:


	For the Three Months Ended September 30,				For the Nine Months Ended September 30,
	2022	2021	2022	2021	2022	2021	2022	2021
(Millions of Dollars, except per share amounts)	Net Income for Common Stock		Earnings per Share		Net Income for Common Stock		Earnings per Share
CECONY	$493	$418	$1.39	$1.19	$1,138	$1,011	$3.21	$2.92
O&R	34	26	0.09	0.07	72	53	0.20	0.15
Clean Energy Businesses (a) (e)	97	106	0.28	0.30	293	223	0.83	0.64
Con Edison Transmission (b)	1	1	—	—	2	(142)	0.01	(0.41)
Other (c)	(12)	(13)	(0.03)	(0.04)	(35)	(23)	(0.10)	(0.07)
Con Edison (d)	$613	$538	$1.73	$1.52	$1,470	$1,122	$4.15	$3.23

For the Three Months Ended September 30, For the Nine Months Ended September 30,
2017 2016 2017
2016
2017 2016 2017
2016
(Millions of Dollars, except per share amounts) Net Income Earnings
per Share Net Income Earnings
per Share
CECONY $401 $388
$1.30

$1.27
$883 $859
$2.88

$2.87
O&R 22 27 0.07
0.09
53 55 0.18
0.18
Clean Energy Businesses (a) 26 78 0.08
0.26
54 120 0.18
0.40
Con Edison Transmission 9 10 0.03
0.03
25 11 0.08
0.04
Other (b) (1) (6) —
(0.02 ) 5 (6) 0.01
(0.02 )
Con Edison (c) $457 $497
$1.48

$1.63
$1,020 $1,039
$3.33

$3.47

~~(a)~~

Includes $4 million or $0.01 a share and $(15) million or $(0.05) a share of net after-tax mark-to-market gains/(losses) for the three months ended September 30, 2017 and 2016, respectively, and $1 million or $0.01 a share and $5 million or $0.02 a share of net after-tax mark-to-market gains/(losses) for 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 of a solar electric production project for the nine months ended September 30, 2017 (see Note O to the Third 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.

~~Table of Contents~~


~~(b)~~	~~Other includes parent company and consolidation adjustments.~~


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

~~The Companies’ results of operations~~(a)Net income for common stock and earnings per share from the Clean Energy Businesses for the three and nine months ended September 30, ~~2017, as compared with~~2022 includes $41 million or $0.12 a share and $121 million or $0.35 a share, respectively, of net after-tax mark-to-market effects. Net income for common stock and earnings per share from 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 CECONYClean Energy Businesses for the three and nine months ended September 30, ~~2017 primarily reflect lower costs~~2022 also includes ($4) million or ($0.01) a share (after-tax) and $33 million or $0.09 a share (after-tax), respectively, of the effects of HLBV accounting for ~~pensions and other postretirement benefits. In addition, the Utilities' rate plans provide for revenues to cover expected changes~~tax equity investments in certain ~~operating costs including depreciation, property taxes~~renewable and ~~other tax matters.~~sustainable electric projects.

~~The following table presents the estimated effect on~~Net income for common stock and earnings per share ~~and net income~~from the Clean Energy Businesses for the three and nine months ended September 30, ~~2017 period~~2021 includes $(9) million or $(0.03) a share and $20 million or $0.06 a share, respectively, of net after-tax mark-to-market effects. Net income for common stock and earnings per share from the Clean Energy Businesses for the three and nine months ended September 30, 2021 also includes $52 million or $0.15 a share (after-tax) and $87 million or $0.25 a share (after-tax), respectively, of the effects of HLBV accounting for tax equity investments in certain renewable and sustainable electric projects. Net income for common stock and earnings per share from the Clean Energy Businesses for the three and nine months ended September 30, 2021 also includes $(3) million or $(0.01) a share (after-tax) for the loss from the sale of a renewable electric production project.

(b)Net income for common stock from Con Edison Transmission for the nine months ended September 30, 2021 includes $(153) million or $(0.44) a share of net after-tax impairment loss related to its investment in Stagecoach. See "Investments - 2021 Partial Impairment of Investment in Stagecoach Gas Services LLC (Stagecoach) in Note A to the Third Quarter Financial Statements.

(c)Other includes parent company and consolidation adjustments. Net income for common stock and earnings per share for the three and nine months ended September 30, 2022 includes $(3) million or $(0.01) a share and $(10) million or $(0.03) a share, respectively, of income tax impact on the net after-tax mark-to-market effects. Net income for common stock and earnings per share for the three and nine months ended September 30, 2022 also includes an immaterial amount or $(0.00) a share (after-tax) and $(3) million or $(0.01) a share (after-tax) respectively, of income tax impact on the effects of HLBV accounting for tax equity investments in certain renewable and sustainable electric projects.

Net income for common stock and earnings per share for the three and nine months ended September 30, 2021 includes $(4) million or $(0.01) a share and $(7) million or $(0.02) a share, respectively, of income tax impact on the effects of HLBV accounting for tax equity investments in certain renewable and sustainable electric projects, and $6 million or $0.01 a share and $(2) million or $(0.01) a share, respectively, of income tax impact for the impairment loss related to Con Edison Transmission’s investment in Stagecoach and after-tax mark-to-market loss. See "Investments - 2021 Partial Impairment of Investment in Stagecoach Gas Services LLC (Stagecoach)" in Note A to the Third Quarter Financial Statements.

(d) Earnings per share on a diluted basis were $1.72 a share and $1.52 a share for the three months ended September 30, 2022 and 2021,

respectively and $4.13 a share and $3.23 a share for the nine months ended September 30, 2022 and 2021, respectively.

(e) On October 1, 2022, Con Edison entered into a purchase and sale agreement pursuant to which Con Edison agreed to sell the Clean Energy Businesses. See Note T to the Third Quarter Financial Statements.

The following tables present the estimated effect of major factors on earnings per share and net income for common stock for the three and nine months ended September 30, 2022 as compared with ~~2016 period, resulting from these and other major factors:~~the 2021 period.

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

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

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

~~(a)~~

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

~~(b)~~

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


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


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


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

~~(f)~~

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

~~Table of Contents~~


Variation for the Three Months Ended September 30, 2022 vs. 2021
	Net Income for Common Stock (Millions of Dollars)	Earnings per Share
CECONY (a)
Higher electric rate base	$29	$0.08
Lower costs related to heat events	14	0.04
Higher income from allowance for funds used during construction reflecting higher short-term interest rates	10	0.03
Resumption of the billing of late payment charges and other fees to allowed rate plan levels	9	0.03
Higher incentives earned under the electric and gas earnings adjustment mechanisms (EAMs) and positive incentives	5	0.02
Higher rental revenue from real estate properties	5	0.01
Lower stock based compensation costs	2	0.01
Lower health care and other employee benefits costs	2	0.01
Higher interest expense	(14)	(0.04)
Dilutive effect of stock issuances	—	(0.01)





Other	13	0.02
Total CECONY	75	0.20
O&R (a)
Electric base rate increase	8	0.02
Gas base rate increase	1	—


Other	(1)	—
Total O&R	8	0.02
Clean Energy Businesses
Net mark-to-market effects	51	0.15
Lower operation and maintenance expense from engineering, procurement and construction of renewable electric projects	10	0.03
HLBV effects	(56)	(0.16)
Higher gas purchased for resale	(35)	(0.10)
Higher wholesale revenue	23	0.07
Other	(2)	(0.01)





Total Clean Energy Businesses	(9)	(0.02)
Con Edison Transmission



Higher interest expense	(1)	(0.01)


Other	1	0.01
Total Con Edison Transmission	—	—
Other, including parent company expenses

Tax impact of net mark-to-market effects	(4)	(0.01)
Tax impact of HLBV tax effects	4	0.01

Other	1	0.01
Total Other, including parent company expenses	1	0.01
Total Reported (GAAP basis)	$75	$0.21

a.Under the revenue decoupling mechanisms in the Utilities’ NY 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.

~~(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 Nine Months Ended September 30, 2022 vs. 2021
	Net Income for Common Stock (Millions of Dollars)	Earnings per Share
CECONY (a)
Higher electric rate base	$42	$0.12
Resumption of the billing of late payment charges and other fees to allowed rate plan levels	36	0.11
Higher gas rate base	33	0.10
Lower costs related to winter storms and heat events	24	0.07
Lower health care and other employee benefits costs	18	0.05
Higher income from allowance for funds used during construction reflecting higher short-term interest rates	10	0.03
Weather impact on steam revenues	2	0.01
Higher interest expense	(37)	(0.11)
Higher stock based compensation cost	(12)	(0.04)
Dilutive effect of stock issuances	—	(0.07)




Other	11	0.02
Total CECONY	127	0.29
O&R (a)
Electric base rate increase	13	0.04
Gas base rate increase	6	0.02
Other	—	(0.01)
Total O&R	19	0.05
Clean Energy Businesses
Net mark-to-market effects	101	0.29
Lower operation and maintenance expense from engineering, procurement and construction of renewable electric projects	75	0.22
Higher wholesale revenue	41	0.12
Loss from sale of a renewable electric project in 2021	3	0.01
Higher gas purchased for resale	(82)	(0.24)
HLBV effects	(54)	(0.16)
Higher depreciation and amortization expense	(5)	(0.01)
Gain from sale of a renewable electric project in 2021	(4)	(0.01)
Dilutive effect of stock issuances	—	(0.02)


Other	(5)	(0.01)
Total Clean Energy Businesses	70	0.19
Con Edison Transmission
Impairment loss related to investment in Stagecoach in 2021	153	0.44
Lower interest expense	4	0.01
Lower investment income attributable to Stagecoach	(15)	(0.04)
Other	2	0.01
Total Con Edison Transmission	144	0.42
Other, including parent company expenses
Impairment tax benefits related to investment in Stagecoach in 2021	(6)	(0.01)
Tax impact of net mark-to-market effects	(8)	(0.02)
Tax impacts of HLBV effects	4	0.01

Other	(2)	(0.01)
Total Other, including parent company expenses	(12)	(0.03)
Total Reported (GAAP basis)	$348	$0.92

a. Under the revenue decoupling mechanisms in the Utilities’ NY 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 months ended September 30, ~~2017~~2022 and ~~2016~~2021 were as follows:


	For the Three Months Ended September 30,		For the Nine Months Ended September 30,
(Millions of Dollars)	2022	2021	2022	2021
CECONY
Operations	$420	$445	$1,276	$1,283
Pensions and other postretirement benefits	104	(6)	312	(23)
Health care and other benefits	39	42	109	134
Regulatory fees and assessments (a)	104	99	271	252
Other	140	70	299	202
Total CECONY	$807	$650	$2,267	$1,848
O&R	88	83	259	240
Clean Energy Businesses	101	114	252	348
Con Edison Transmission	3	3	10	9
Other (b)	—	(1)	(3)	(2)
Total other operations and maintenance expenses	$999	$849	$2,785	$2,443

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

For the Three Months Ended September 30, For the Nine Months Ended September 30,
(Millions of Dollars) 2017 2016 2017 2016
CECONY
Operations $386 $381 $1,147 $1,109
Pensions and other postretirement benefits 51 87 152 261
Health care and other benefits 45 47 127 124
Regulatory fees and assessments (a) 142 135 355 361
Other 67 74 211 250
Total CECONY 691 724 1,992 2,105
O&R 80 77 236 220
Clean Energy Businesses 79 40 174 124
Con Edison Transmission 3 1 7 1
Other (b) (1) (2) (3) (3)
Total other operations and maintenance expenses $852 $840 $2,406 $2,447
(b)Includes parent company and consolidation adjustments.


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


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

A discussion of the results of operations by principal business segment for the three and nine months ended September 30, ~~2017~~2022 and ~~2016~~2021 follows. For additional business segment financial information, see Note JM to the Third Quarter Financial Statements.

~~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 September 30, 2022 and 2021 were as follows:


	CECONY		O&R		Clean Energy Businesses (c)		Con Edison Transmission		Other (a)		Con Edison (b)
(Millions of Dollars)	2022	2021	2022	2021	2022	2021	2022	2021	2022	2021	2022	2021
Operating revenues	$3,549	$3,092	$291	$257	$325	$264	$1	$1	$(1)	$(1)	$4,165	$3,613
Purchased power	643	481	89	68	—	—	—	—	(1)	(1)	731	548
Fuel	59	44	—	—	—	—	—	—	—	—	59	44
Gas purchased for resale	113	61	16	13	55	9	—	—	1	—	185	83
Other operations and maintenance	807	650	88	83	101	114	3	3	—	(1)	999	849
Depreciation and amortization	441	429	25	24	60	58	—	—	(1)	1	525	512
Taxes, other than income taxes	748	699	22	22	5	4	—	—	2	2	777	727



Operating income	738	728	51	47	104	79	(2)	(2)	(2)	(2)	889	850
Other income (deductions)	81	(23)	6	(4)	1	—	5	5	(4)	—	89	(22)
Net interest expense	202	197	11	10	(19)	18	2	1	3	6	199	232
Income before income tax expense	617	508	46	33	124	61	1	2	(9)	(8)	779	596
Income tax expense	124	90	12	7	21	24	—	1	3	5	160	127
Net income	$493	$418	$34	$26	$103	$37	$1	$1	$(12)	$(13)	$619	$469
Income (loss) attributable to non-controlling interest	—	—	—	—	6	(69)	—	—	—	—	6	(69)
Net income for common stock	$493	$418	$34	$26	$97	$106	$1	$1	$(12)	$(13)	$613	$538

(a)Includes parent company and consolidation adjustments.

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

(c)On October 1, 2022, Con Edison entered into a purchase and sale agreement pursuant to which Con Edison agreed to sell the Clean Energy Businesses. See Note T to the Third Quarter Financial Statements.

CECONY O&R Clean Energy Businesses
Con Edison
Transmission
Other (a) Con Edison (b)
(Millions of Dollars)
Increases
(Decreases)
Amount
Increases
(Decreases)
Percent
Increases
(Decreases)
Amount
Increases
(Decreases)
Percent
Increases
(Decreases)
Amount
Increases
(Decreases)
Percent
Increases
(Decreases)
Amount Increases
(Decreases)
Percent Increases
(Decreases)
Amount Increases
(Decreases)
Percent
Increases
(Decreases)
Amount
Increases
(Decreases)
Percent
Operating revenues $(29) (1.0 )% $(6) (2.5 )% $(173) (49.4 )% $1 — % $1 Large
$(206) (6.0 )%
Purchased power (95) (19.2 ) (9) (13.0 ) (234) Large
—
—
—
—
(338) (42.4 )
Fuel 1 3.4
—
—
—
—
—
—
—
—
1 3.4
Gas purchased for resale 24 70.6
2 25.0
8 20.5
—
—
—
—
34 42.0
Other operations and maintenance (33) (4.6 ) 3 3.9
39 97.5
2 Large
1 (50.0 ) 12 1.4
Depreciation and amortization 22 7.9
1 5.9
8 72.7
—
—
1 Large
32 10.5
Taxes, other than income taxes 18 3.6
—
—
(2) (40.0 ) —
—
—
—
16 3.0
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 )
Other income less deductions (2) Large
(1) Large
(9) (33.3 ) 1 5.0
1 Large
(10) (20.4 )
Net interest expense 3 1.9
—
—
5 71.4
1 33.3
(2) (40.0 ) 7 3.9
Income before income tax expense 29 4.7
(4) (10.0 ) (110) (75.9 ) (1) (6.3 ) 2 50.0
(84) (10.4 )
Income tax expense 16 7.1
1 7.7
(58) (86.6 ) —
—
(3) Large
(44) (14.0 )
Net income $13 3.4 % $(5) (18.5 )% $(52) (66.7 )% $(1) (10.0 )% $5 83.3 % $(40) (8.0 )%


~~(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, 2022				For the Three Months Ended September 30, 2021
(Millions of Dollars)	Electric	Gas	Steam	2022 Total	Electric	Gas	Steam	2021 Total	2022-2021 Variation
Operating revenues	$3,077	$414	$58	$3,549	$2,730	$307	$55	$3,092	$457
Purchased power	628	—	15	643	473	—	8	481	162
Fuel	58	—	1	59	39	—	5	44	15
Gas purchased for resale	—	113	—	113	—	61	—	61	52
Other operations and maintenance	645	114	48	807	516	92	42	650	157
Depreciation and amortization	324	93	24	441	324	82	23	429	12
Taxes, other than income taxes	579	134	35	748	544	120	35	699	49
Operating income	$843	$(40)	$(65)	$738	$834	$(48)	$(58)	$728	$10

For the Three Months Ended
September 30, 2017

For the Three Months Ended
September 30, 2016


(Millions of Dollars) Electric
Gas
Steam
2017 Total Electric
Gas
Steam
2016 Total 2017-2016
Variation
Operating revenues $2,469 $268 $62 $2,799 $2,557 $208 $63 $2,828 $(29)
Purchased power 393 —
7 400 486 —
9 495 (95)
Fuel 24 —
6 30 21 —
8 29 1
Gas purchased for resale —
58 —
58 —
34 —
34 24
Other operations and maintenance 547 104 40 691 578 102 44 724 (33)
Depreciation and amortization 232 47 21 300 217 41 20 278 22
Taxes, other than income taxes 418 71 31 520 414 59 29 502 18
Operating income $855 $(12) $(43) $800 $841 $(28) $(47) $766 $34

Electric

CECONY’s results of electric operations for the three months ended September 30, ~~2017~~2022 compared with the ~~2016~~2021 period iswere as follows:


	For the Three Months Ended
(Millions of Dollars)	September 30, 2022	September 30, 2021	Variation
Operating revenues	$3,077	$2,730	$347
Purchased power	628	473	155
Fuel	58	39	19
Other operations and maintenance	645	516	129
Depreciation and amortization	324	324	—
Taxes, other than income taxes	579	544	35
Electric operating income	$843	$834	$9

For the Three Months Ended

(Millions of Dollars) September 30, 2017 September 30, 2016 Variation
Operating revenues $2,469 $2,557 $(88)
Purchased power 393 486 (93)
Fuel 24 21 3
Other operations and maintenance 547 578 (31)
Depreciation and amortization 232 217 15
Taxes, other than income taxes 418 414 4
Electric operating income $855 $841 $14

CECONY’s electric sales and deliveries for the three months ended September 30, ~~2017~~2022 compared with the ~~2016~~2021 period were:


	Millions of kWh Delivered						Revenues in Millions (a)
	For the Three Months Ended						For the Three Months Ended
Description	September 30, 2022	September 30, 2021	Variation	Percent Variation			September 30, 2022	September 30, 2021	Variation	Percent Variation
Residential/Religious (b)	4,303	3,905	398	10.2	%		$1,069	$1,025	$44	4.3	%
Commercial/Industrial	3,003	2,645	358	13.5			808	652	156	23.9
Retail choice customers	6,107	6,274	(167)	(2.7)			825	861	(36)	(4.2)
NYPA, Municipal Agency and other sales	2,611	2,466	145	5.9			240	228	12	5.3
Other operating revenues (c)	—	—	—	—			135	(36)	171	Large
Total	16,024	15,290	734	4.8	%	(d)	$3,077	$2,730	$347	12.7	%

(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.

Millions of kWh Delivered Revenues in Millions (a)

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

Residential/Religious (b) 3,237
3,653
(416 ) (11.4 )% $805 $883 $(78) (8.8 )%
Commercial/Industrial 2,570
2,749
(179 ) (6.5 ) 534 551 (17) (3.1 )
Retail choice customers 7,510
8,136
(626 ) (7.7 ) 867 918 (51) (5.6 )
NYPA, Municipal Agency and other sales 2,705
2,764
(59 ) (2.1 ) 207 204 3 1.5
Other operating revenues (c) —
—
—
—
56 1 55 Large
Total 16,022
17,302
(1,280 ) (7.4 )% (d) $2,469 $2,557 $(88) (3.4 )%


~~(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 regulatory assets and liabilities in accordance with the revenue decoupling mechanism and other provisions of the company’s rate plans.~~


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

(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 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 increased 4.2 percent in the three months ended September 30, 2022 compared with the 2021 period.

~~Table of Contents~~

Operating revenues ~~decreased $88~~ increased $347 million in the three months ended September 30, ~~2017~~2022 compared with the ~~2016~~2021 period primarily due ~~primarily~~ to ~~lower~~higher purchased power expenses ($93155 million), ~~offset by higher~~an increase in revenues from the electric rate plan ($2790 million), and higher fuel expenses ($19 million).

Purchased power expenses ~~decreased $93~~increased $155 million in the three months ended September 30, ~~2017~~2022 compared with the ~~2016~~2021 period due to ~~lower~~higher unit costs ($77 million) and higher purchased volumes ($6678 million) ~~and unit costs ($27 million)~~.

Fuel expenses increased $3$19 million in the three months ended September 30, ~~2017~~2022 compared with the ~~2016~~2021 period due to higher unit costs ($622 million), offset in part by lower purchased volumes from the company's electric generating facilities ($3 million).

Other operations and maintenance expenses ~~decreased $31~~increased $129 million in the three months ended September 30, ~~2017~~2022 compared with the ~~2016~~2021 period primarily due ~~primarily~~ to ~~lower~~higher costs for pension and other postretirement benefits, reflecting reconciliation to the rate plan level ($3885 million) ~~and environmental~~, higher municipal infrastructure support costs ($622 million), ~~offset by~~ higher surcharges for assessments and fees that are collected in revenues from customers ($64 million), higher costs for injuries and damages ($2 million), higher uncollectible expense ($51 million), and higher health care cost ($1 million).

~~Depreciation and amortization~~Taxes, other than income taxes increased ~~$15~~$35 million in the three months ended September 30, ~~2017~~2022 compared with the ~~2016~~2021 period due ~~primarily to higher electric utility plant balances.~~

~~Taxes, other than income taxes~~ ~~increased $4 million in the three months ended September 30, 2017 compared with the 2016 period due primarily~~ to higher property taxes ($1122 million), ~~offset by lower~~a higher deferral of over-collected property taxes ($5 million) and higher state and local taxes ($59 million).

Gas

CECONY’s results of gas operations for the three months ended September 30, ~~2017~~2022 compared with the ~~2016~~2021 period iswere as follows:


	For the Three Months Ended
(Millions of Dollars)	September 30, 2022	September 30, 2021	Variation
Operating revenues	$414	$307	$107
Gas purchased for resale	113	61	52
Other operations and maintenance	114	92	22
Depreciation and amortization	93	82	11
Taxes, other than income taxes	134	120	14
Gas operating income	$(40)	$(48)	$8

For the Three Months Ended

(Millions of Dollars) September 30, 2017 September 30, 2016 Variation
Operating revenues $268 $208 $60
Gas purchased for resale 58 34 24
Other operations and maintenance 104 102 2
Depreciation and amortization 47 41 6
Taxes, other than income taxes 71 59 12
Gas operating income $(12) $(28) $16

CECONY’s gas sales and deliveries, excluding off-system sales, for the three months ended September 30, ~~2017~~2022 compared with the ~~2016~~2021 period were:


	Thousands of Dt Delivered						Revenues in Millions (a)
	For the Three Months Ended						For the Three Months Ended
Description	September 30, 2022	September 30, 2021	Variation	Percent Variation			September 30, 2022	September 30, 2021	Variation	Percent Variation
Residential	4,467	4,158	309	7.4	%		$150	$128	$22	17.2	%
General	4,759	4,133	626	15.1			94	59	35	59.3
Firm transportation	8,821	8,943	(122)	(1.4)			88	80	8	10.0
Total firm sales and transportation	18,047	17,234	813	4.7		(b)	332	267	65	24.3
Interruptible sales (c)	1,222	1,198	24	2.0			10	6	4	66.7
NYPA	14,381	15,187	(806)	(5.3)			1	1	—	—
Generation plants	19,633	14,955	4,678	31.3			11	7	4	57.1
Other	4,141	4,193	(52)	(1.2)			6	6	—	—
Other operating revenues (d)	—	—	—	—			54	20	34	Large
Total	57,424	52,767	4,657	8.8	%		$414	$307	$107	34.9	%

(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 8.4 percent in the three months ended September 30, 2022 compared with the 2021 period.

(c)Includes 273 thousand and 572 thousand of Dt for the 2022 and 2021 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.

Thousands of Dt Delivered Revenues in Millions (a)

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

Residential 4,731
4,335
396
9.1 % $104 $88 $16 18.2 %
General 4,292
3,963
329
8.3
49 41 8 19.5
Firm transportation 8,766
8,305
461
5.6
67 53 14 26.4
Total firm sales and transportation 17,789
16,603
1,186
7.1
(b) 220 182 38 20.9
Interruptible sales (c) 2,108
1,664
444
26.7
8 4 4 Large
NYPA 10,148
12,800
(2,652 ) (20.7 ) 1 1 —
—
Generation plants 24,068
35,745
(11,677 ) (32.7 ) 7 7 —
—
Other 4,487
4,975
(488 ) (9.8 ) 6 6 —
—
Other operating revenues (d) —
—
—
—
26 8 18 Large
Total 58,600
71,787
(13,187 ) (18.4 )% $268 $208 $60 28.8 %


~~(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 percent in the three months ended September 30, 2017 compared with the 2016 period, reflecting primarily increased volumes attributable to the growth in the number of gas customers.


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


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

Operating revenues increased ~~$60~~$107 million in the three months ended September 30, ~~2017~~2022 compared with the ~~2016~~2021 period primarily due ~~primarily~~ to higher gas purchased for resale ($52 million) and an increase in revenues from the gas rate plan ~~and growth in the number of customers~~ ($29 million) ~~and higher gas purchased for resale expense ($24 million)~~.

Gas purchased for resale increased ~~$24~~$52 million in the three months ended September 30, ~~2017~~2022 compared with the ~~2016~~2021 period due to higher unit costs ($2051 million) and higher purchased volumes ($41 million).

Other operations and maintenance expenses increased $2$22 million in the three months ended September 30, ~~2017~~2022 compared with the ~~2016~~2021 period primarily due ~~primarily~~ to higher costs for pension and other postretirement benefits, reflecting reconciliation to the rate plan level ($18 million), and higher surcharges for assessments and fees that ~~were~~are collected in revenues from ~~customers.~~customers ($1 million).

Depreciation and amortizationexpenses increased $6$11 million in the three months ended September 30, ~~2017~~2022 compared with the ~~2016~~2021 period primarily due ~~primarily~~ to higher gas utility plant balances.

Taxes, other than income taxes increased ~~$12~~$14 million in the three months ended September 30, ~~2017~~2022 compared with the ~~2016~~2021 period primarily due ~~primarily~~ to a higher deferral of over-collected property taxes ($8 million), higher property taxes ($63 million), and higher state and local taxes ($43 million) ~~and payroll taxes ($1 million)~~.

Steam

CECONY’s results of steam operations for the three months ended September 30, ~~2017~~2022 compared with the ~~2016~~2021 period iswere as follows:


	For the Three Months Ended
(Millions of Dollars)	September 30, 2022	September 30, 2021	Variation
Operating revenues	$58	$55	$3
Purchased power	15	8	7
Fuel	1	5	(4)
Other operations and maintenance	48	42	6
Depreciation and amortization	24	23	1
Taxes, other than income taxes	35	35	—
Steam operating income	$(65)	$(58)	$(7)

For the Three Months Ended

(Millions of Dollars) September 30, 2017 September 30, 2016 Variation
Operating revenues $62 $63 $(1)
Purchased power 7 9 (2)
Fuel 6 8 (2)
Other operations and maintenance 40 44 (4)
Depreciation and amortization 21 20 1
Taxes, other than income taxes 31 29 2
Steam operating income $(43) $(47) $4

CECONY’s steam sales and deliveries for the three months ended September 30, ~~2017~~2022 compared with the ~~2016~~2021 period were:


	Millions of Pounds Delivered						Revenues in Millions
	For the Three Months Ended						For the Three Months Ended
Description	September 30, 2022	September 30, 2021	Variation	Percent Variation			September 30, 2022	September 30, 2021	Variation	Percent Variation
General	7	4	3	75.0	%		$2	$2	$—	—	%
Apartment house	582	588	(6)	(1.0)			13	13	—	—
Annual power	2,006	1,904	102	5.4			38	34	4	11.8
Other operating revenues (a)	—	—	—	—			5	6	(1)	(16.7)
Total	2,595	2,496	99	4.0	%	(b)	$58	$55	$3	5.5	%

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

Millions of Pounds Delivered Revenues in Millions

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

General 13
10
3
30.0 % $2 $2
$—
— %
Apartment house 748
776
(28 ) (3.6 ) 15 15 —
—
Annual power 2,439
2,950
(511 ) (17.3 ) 42 49 (7) (14.3 )
Other operating revenues (a) —
—
—
—
3 (3) 6 Large
Total 3,200
3,736
(536 ) (14.3 )% (b) $62 $63 $(1) (1.6 )%


~~(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 percent in the three months ended September 30, 2017 compared with the 2016 period.~~

(b)After adjusting for variations, primarily weather and billing days, steam sales and deliveries increased 3.0 percent in the three months ended September 30, 2022 compared with the 2021 period.

~~Table of Contents~~

Operating revenues ~~decreased $1~~ increased $3 million in the three months ended September 30, ~~2017~~2022 compared with the ~~2016~~2021 period primarily due ~~primarily~~ to ~~lower~~higher purchased power expenses ($~~2 million) and lower fuel expenses ($2~~7 million), offset in part by ~~a property tax refund incentive~~lower fuel expenses ($34 million).

Purchased power ~~expenses decreased $2~~increased $7 million in the three months ended September 30, ~~2017~~2022 compared with the ~~2016~~2021 period due to ~~lower~~higher unit costs ($16 million) and higher purchased volumes ($1 million).

Fuel expenses decreased $2 million in the three months ended September 30, 2017 compared with the 2016 period due to lower unit costs ($1 million) and purchased volumes from the company's steam generating facilities ($1 million).

~~Other operations and maintenance~~expenses decreased $4 million in the three months ended September 30, ~~2017~~2022 compared with the ~~2016~~2021 period due ~~primarily~~ to lower ~~municipal infrastructure support costs.~~unit costs ($4 million).

~~Depreciation~~

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

~~Taxes, other than income taxes~~ ~~increased $2~~$6 million in the three months ended September 30, ~~2017~~2022 compared with the ~~2016~~2021 period primarily due ~~primarily~~ to higher ~~property taxes.~~costs for pension and other postretirement benefits, reflecting reconciliation to the rate plan level ($7 million).

~~Other Income (Deductions)~~

~~Other income (deductions) decreased $2~~Depreciation and amortization expenses increased $1 million in the three months ended September 30, ~~2017~~2022 compared with the ~~2016~~2021 period primarily due ~~primarily~~ to ~~a decrease in investment and other income.~~higher steam utility plant balances.

~~Net Interest Expense~~Other Income (Deductions)

~~Net interest expense~~Other income increased $3$104 million in the three months ended September 30, ~~2017~~2022 compared with the ~~2016~~2021 period primarily due ~~primarily~~ to ~~higher long-term debt balances~~lower costs associated with components of pension and other postretirement benefits other than service cost ($110 million), offset in ~~the 2017 period.~~part by lower expenses resulting from investment performance in a deferred income plan ($6 million)

~~Income Tax~~Net Interest Expense

~~Income taxes~~Net Interest Expense increased ~~$16~~$5 million in the three months ended September 30, ~~2017~~2022 compared with the ~~2016~~2021 period primarily due to higher interest on short-term debt ($10 million) and higher interest on long-term debt ($7 million), offset in part by an increase in allowance for borrowed funds used during construction ($14 million).

Income Tax Expense

Income taxes increased $34 million in the three months ended September 30, 2022 compared with the 2021 period primarily due to higher income before income tax expense ($1123 million), higher state income taxes ($6 million), assistance received from a ~~decrease~~New York State COVID-19 arrears program in 2022 (see "COVID-19 Regulatory Matters" in Note B to the Third Quarter Financial Statements) ($6 million) and the absence of a favorable tax ~~benefits for plant-related flow through items~~adjustment from the prior year tax return due to an increase in the general business tax credits ($74 million), offset in part by ~~higher research~~lower reserve for injuries and ~~development tax credits~~damages ($24 million).

O&R


	For the Three Months Ended September 30, 2022			For the Three Months Ended September 30, 2021
(Millions of Dollars)	Electric	Gas	2022 Total	Electric	Gas	2021 Total	2022-2021 Variation
Operating revenues	$252	$39	$291	$223	$34	$257	$34
Purchased power	89	—	89	68	—	68	21
Gas purchased for resale	—	16	16	—	13	13	3
Other operations and maintenance	69	19	88	67	16	83	5
Depreciation and amortization	18	7	25	18	6	24	1
Taxes, other than income taxes	15	7	22	15	7	22	—
Operating income	$61	$(10)	$51	$55	$(8)	$47	$4

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

(Millions of Dollars) Electric
Gas
2017 Total Electric
Gas
2016 Total 2017-2016
Variation
Operating revenues $206 $28 $234 $213 $27 $240 $(6)
Purchased power 60 —
60 69 —
69 (9)
Gas purchased for resale —
10 10 —
8 8 2
Other operations and maintenance 63 17 80 63 14 77 3
Depreciation and amortization 13 5 18 12 5 17 1
Taxes, other than income taxes 14 7 21 14 7 21 —
Operating income $56 $(11) $45 $55 $(7) $48 $(3)

Electric

O&R’s results of electric operations for the three months ended September 30, ~~2017~~2022 compared with the ~~2016~~2021 period iswere as follows:


	For the Three Months Ended
(Millions of Dollars)	September 30, 2022	September 30, 2021	Variation
Operating revenues	$252	$223	$29
Purchased power	89	68	21
Other operations and maintenance	69	67	2
Depreciation and amortization	18	18	—
Taxes, other than income taxes	15	15	—
Electric operating income	$61	$55	$6

~~Table of Contents~~

For the Three Months Ended

(Millions of Dollars) September 30, 2017 September 30, 2016 Variation
Operating revenues $206 $213 $(7)
Purchased power 60 69 (9)
Other operations and maintenance 63 63 —
Depreciation and amortization 13 12 1
Taxes, other than income taxes 14 14 —
Electric operating income $56 $55
$1

O&R’s electric sales and deliveries for the three months ended September 30, ~~2017~~2022 compared with the ~~2016~~2021 period were:


	Millions of kWh Delivered						Revenues in Millions (a)
	For the Three Months Ended						For the Three Months Ended
Description	September 30, 2022	September 30, 2021	Variation	Percent Variation			September 30, 2022	September 30, 2021	Variation	Percent Variation
Residential/Religious (b)	654	581	73	12.6	%		$141	$114	$27	23.7	%
Commercial/Industrial	265	221	44	19.9			45	32	13	40.6
Retail choice customers	747	820	(73)	(8.9)			67	75	(8)	(10.7)
Public authorities	36	32	4	12.5			5	4	1	25.0
Other operating revenues (c)	—	—	—	—			(6)	(2)	(4)	Large
Total	1,702	1,654	48	2.9	%	(d)	$252	$223	$29	13.0	%

(a)O&R’s NY 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. Effective July 2021, the majority of O&R’s electric distribution revenues in NJ are subject to a conservation incentive program, as a result of which distribution revenues are generally not affected by changes in delivery volumes from levels assumed when rates were approved. O&R’s electric transmission revenues in NJ are not subject to a conservation incentive program, and as a result, changes in such volumes do impact revenues.

Millions of kWh Delivered Revenues in Millions (a)

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

Residential/Religious (b) 500
585
(85 ) (14.5 )% $105 $109 $(4) (3.7 )%
Commercial/Industrial 206
216
(10 ) (4.6 ) 34 35 (1) (2.9 )
Retail choice customers 818
925
(107 ) (11.6 ) 64 70 (6) (8.6 )
Public authorities 31
31
—
—
3 2 1 50.0
Other operating revenues (c) —
—
—
—
—
(3) 3 Large
Total 1,555
1,757
(202 ) (11.5 )% (d) $206 $213 $(7) (3.3 )%


~~(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 percent in the three months ended September 30, 2017 compared with the 2016 period.~~

(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 increased 2.6 percent in the three months ended September 30, 2022 compared with the 2021 period.

Operating revenues ~~decreased $7~~ increased $29 million in the three months ended September 30, ~~2017~~2022 compared with the ~~2016~~2021 period primarily due ~~primarily~~ to ~~lower~~higher purchased power expenses ($921 million)~~, offset by~~ and higher revenues from the ~~New York~~NY electric rate plan ($310 million).

Purchased power expenses ~~decreased $9~~increased $21 million in the three months ended September 30, ~~2017~~2022 compared with the ~~2016~~2021 period due to ~~lower~~higher unit costs ($11 million), and higher purchased volumes ($10 million)~~, offset by higher unit costs ($1 million)~~.

~~Depreciation~~Other operations and ~~amortization~~maintenance expenses increased $1$2 million in the three months ended September 30, ~~2017~~2022 compared with the ~~2016~~2021 period primarily due ~~primarily~~ to higher ~~electric utility plant balances.~~costs for pension, reflecting reconciliation to the rate plan level.

Gas

O&R’s results of gas operations for the three months ended September 30, ~~2017~~2022 compared with the ~~2016~~2021 period iswere as follows:


	For the Three Months Ended
(Millions of Dollars)	September 30, 2022	September 30, 2021	Variation
Operating revenues	$39	$34	$5
Gas purchased for resale	16	13	3
Other operations and maintenance	19	16	3
Depreciation and amortization	7	6	1
Taxes, other than income taxes	7	7	—
Gas operating income	$(10)	$(8)	($2)

For the Three Months Ended

(Millions of Dollars) September 30, 2017 September 30, 2016 Variation
Operating revenues $28 $27 $1
Gas purchased for resale 10 8 2
Other operations and maintenance 17 14 3
Depreciation and amortization 5 5 —
Taxes, other than income taxes 7 7 —
Gas operating income $(11) $(7) $(4)

~~Table of Contents~~

O&R’s gas sales and deliveries, excluding off-system sales, for the three months ended September 30, ~~2017~~2022 compared with the ~~2016~~2021 period were:


	Thousands of Dt Delivered						Revenues in Millions (a)
	For the Three Months Ended						For the Three Months Ended
Description	September 30, 2022	September 30, 2021	Variation	Percent Variation			September 30, 2022	September 30, 2021	Variation	Percent Variation
Residential	548	900	(352)	(39.1	%)		$16	$18	$(2)	(11.1	%)
General	139	258	(119)	(46.1)			3	4	(1)	(25.0)
Firm transportation	548	736	(188)	(25.5)			4	6	(2)	(33.3)
Total firm sales and transportation	1,235	1,894	(659)	(34.8)		(b)	$23	$28	$(5)	(17.9)
Interruptible sales	830	844	(14)	(1.7)			1	—	1	Large
Generation plants	6	13	(7)	(53.8)			—	—	—	—
Other	56	26	30	Large			1	1	—	—
Other gas revenues	—	—	—	—			14	5	9	Large
Total	2,127	2,777	(650)	(23.4	%)		$39	$34	$5	14.7	%

(a)Revenues from NY 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.

Thousands of Dt Delivered Revenues in Millions (a)

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

Residential 579
550
29
5.3 % $11 $9 $2 22.2 %
General 198
177
21
11.9
2 2 —
—
Firm transportation 898
884
14
1.6
8 8 —
—
Total firm sales and transportation 1,675
1,611
64
4.0
(b) 21 19 2 10.5
Interruptible sales 819
893
(74 ) (8.3 ) 1 —
1 —
Generation plants 5
3
2
66.7
—
—
—
—
Other 74
70
4
5.7
—
—
—
—
Other gas revenues —
—
—
—
6 8 (2) (25.0 )
Total 2,573
2,577
(4 ) (0.2 )% $28 $27 $1 3.7 %


~~(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 percent in the three months ended September 30, 2017 compared with the 2016 period.~~

(b)After adjusting for weather and other variations, total firm sales and transportation volumes decreased 5.4 percent in the three months ended September 30, 2022 compared with the 2021 period.

Operating revenues increased $1$5 million in the three months ended September 30, ~~2017~~2022 compared with the ~~2016~~2021 period primarily due ~~primarily~~ to higher gas purchased for resale ($23 million)~~, offset by lower~~ and higher revenues from the ~~New York~~NY gas rate plan ($12 million).

Gas purchased for resale increased $2$3 million in the three months ended September 30, ~~2017~~2022 compared with the ~~2016~~2021 period due to higher ~~purchased volumes~~unit costs ($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~~2022 compared with the ~~2016~~2021 period primarily due ~~primarily~~ to higher costs for pension, ~~costs.~~reflecting reconciliation to the rate plan level.

~~Income Tax Expense~~

~~Income taxes~~ Depreciation and amortization expensesincreased $1 million in the three months ended September 30, ~~2017~~2022 compared with the ~~2016~~2021 period primarily due to higher gas utility plant balances.

Income Tax Expense

Income taxes increased $5 million in the three months ended September 30, 2022 compared with the 2021 period

primarily due 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~~higher income before income tax expense ($3 million), higher state income taxes ($1 million)

and assistance received from a New York State COVID-19 arrears program in 2022 (see "COVID-19 Regulatory Matters" in Note B to the Third Quarter Financial Statements) ($1 million).

Clean Energy Businesses

The Clean Energy Businesses’ results of operations for the three months ended September 30, ~~2017~~2022 compared with the ~~2016~~2021 period iswere as follows:


	For the Three Months Ended
(Millions of Dollars)	September 30, 2022	September 30, 2021	Variation
Operating revenues	$325	$264	$61


Gas purchased for resale	55	9	46
Other operations and maintenance	101	114	(13)
Depreciation and amortization	60	58	2
Taxes, other than income taxes	5	4	1



Operating income	$104	$79	$25

For the Three Months Ended

(Millions of Dollars) September 30, 2017
September 30, 2016 Variation
Operating revenues $177 $350 $(173)
Purchased power —
234 (234)
Gas purchased for resale 47 39 8
Other operations and maintenance 79 40 39
Depreciation and amortization 19 11 8
Taxes, other than income taxes 3 5 (2)
Gain on sale of retail electric supply business (2016) —
(104) 104
Operating income $29 $125 $(96)

Operating revenues ~~decreased $173~~ increased $61 million in the three months ended September 30, ~~2017~~2022 compared with the ~~2016~~2021 period primarily due ~~primarily~~ to higher wholesale revenues ($48 million), higher net mark-to-market values ($30 million) and higher energy services revenues ($2 million), offset in part by lower ~~electric retail revenues of $256 million~~revenue from the sale of the retail electric supply business in September 2016. Renewable revenues increased $56 million due primarily to an increase in renewable electric production projects in operation and revenues from the engineering, procurement and construction of ~~Upton~~renewable electric projects ($19 million).

~~Table of Contents~~

~~2 (see Note O to the Third Quarter Financial Statements). Energy services revenues~~Gas purchased for resale increased $9 million. Wholesale revenues increased $10 million due to higher sales volumes. 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.

~~Purchased power~~ ~~expenses decreased $234~~$46 million in the three months ended September 30, ~~2017~~2022 compared with the ~~2016~~2021 period due ~~primarily~~ to ~~lower electric costs due to the sale of the retail electric supply business in September 2016 ($210 million)~~higher purchased volumes and ~~changes in mark-to-market values ($24 million).~~prices.

~~Gas purchased for resale~~ ~~increased $8~~Other operations and maintenance expenses decreased $13 million in the three months ended September 30, ~~2017~~2022 compared with the ~~2016~~2021 period primarily due to ~~higher purchased volumes.~~lower costs from engineering, procurement and construction of renewable electric projects.

~~Other operations~~Depreciation and ~~maintenance~~amortization expenses increased ~~$39~~$2 million in the three months ended September 30, ~~2017~~2022 compared with the ~~2016~~2021 period primarily 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.~~renewable electric projects in operation during 2022.

~~Depreciation and amortization~~ ~~increased $8~~Net Interest Expense

Net interest expense decreased $37 million in the three months ended September 30, ~~2017~~2022 compared with the ~~2016~~2021 period primarily due to ~~an increase~~higher unrealized gains on interest rate swaps in ~~solar~~the 2022 period.

Income Tax Expense

Income taxes decreased $3 million in the three months ended September 30, 2022 compared with the 2021 period primarily due to higher income attributable to non-controlling interest ($19 million), offset in part by higher income before income tax expense ($13 million) and higher state income taxes ($3 million).

Income (Loss) Attributable to Non-Controlling Interest

Income attributable to non-controlling interest increased $75 million to a gain of $6 million in the three months ended September 30, 2022 compared with the 2021 period primarily due to lower income in the 2022 period attributable to a tax equity investor in renewable electric ~~production~~ projects ~~in operation during 2017.~~accounted for under the HLBV method of accounting. See Note P to the Third Quarter Financial Statements.

~~Taxes, other than income~~

Other

Income Tax Expense

Income taxes decreased $2 million in the three months ended September 30, ~~2017~~2022 compared with the ~~2016~~2021 period primarily due to lower ~~gross receipts tax from the sale of the retail electric supply business.~~

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

~~Other Income (Deductions)~~

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

~~Net Interest Expense~~

~~Net interest expense increased $5 million in the three months ended September 30, 2017 compared with the 2016 period due primarily to increased debt on solar electric production projects.~~

~~Income Tax Expense~~

Income taxes decreased $58 million in the three months ended September 30, 2017 compared with the 2016 period due primarily to lower income before income tax expense ($44 million), higher renewable energy tax credits ($1 million) and the increase to deferred state income taxes in 2016 as a result of the sale of the retail electric supply business that increased the Clean Energy Businesses’ state apportionment factor on its cumulative temporary differences ($13 million).taxes.

~~Other~~

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

~~Table of Contents~~

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

The Companies’ results of operations for the nine months ended September 30, 2022 and 2021 were as follows:


	CECONY		O&R		Clean Energy Businesses (d)		Con Edison Transmission (c)		Other (a)		Con Edison (b)
(Millions of Dollars)	2022	2021	2022	2021	2022	2021	2022	2021	2022	2021	2022	2021
Operating revenues	$9,972	$8,784	$813	$699	$857	$779	$3	$3	$(6)	$(4)	$11,639	$10,261
Purchased power	1,639	1,294	210	157	6	—	—	—	(4)	(3)	1,851	1,448
Fuel	255	166	—	—	—	—	—	—	—	—	255	166
Gas purchased for resale	582	357	94	56	157	49	—	—	—	(1)	833	461
Other operations and maintenance	2,267	1,848	259	240	252	348	10	9	(3)	(2)	2,785	2,443
Depreciation and amortization	1,341	1,267	73	71	178	172	1	1	—	—	1,593	1,511
Taxes, other than income taxes	2,159	2,016	67	67	16	14	—	—	6	6	2,248	2,103



Operating income	1,729	1,836	110	108	248	196	(8)	(7)	(5)	(4)	2,074	2,129
Other income (deductions) (c)	245	(70)	16	(9)	2	—	14	(178)	(8)	(2)	269	(259)
Net interest expense	604	567	33	32	(68)	44	3	8	14	18	586	669
Income before income tax expense	1,370	1,199	93	67	318	152	3	(193)	(27)	(24)	1,757	1,201
Income tax expense	232	188	21	14	68	44	1	(51)	8	(1)	330	194
Net income	$1,138	$1,011	$72	$53	$250	$108	$2	($142)	$(35)	$(23)	$1,427	$1,007
Loss attributable to non-controlling interest	—	—	—	—	(43)	(115)	—	—	—	—	(43)	(115)
Net income for common stock	$1,138	$1,011	$72	$53	$293	$223	$2	($142)	$(35)	$(23)	$1,470	$1,122

(a)Includes parent company and consolidation adjustments.

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

(c)For the nine months ended September 30, 2021, Con Edison Transmission recorded pre-tax impairment losses of $211 million ($147 million, after-tax) on its investment in ~~2017 compared with 2016 were:~~Stagecoach. See “Investments” in Note A to the Third Quarter Financial Statements.

(d)On October 1, 2022, Con Edison entered into a purchase and sale agreement pursuant to which Con Edison agreed to sell the Clean Energy Businesses. See Note T to the Third Quarter Financial Statements.

CECONY O&R
Clean Energy Businesses

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

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


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


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

~~Table of Contents~~

CECONY


	For the Nine Months Ended September 30, 2022				For the Nine Months Ended September 30, 2021
(Millions of Dollars)	Electric	Gas	Steam	2022 Total	Electric	Gas	Steam	2021 Total	2022-2021 Variation
Operating revenues	$7,401	$2,127	$444	$9,972	$6,661	$1,730	$393	$8,784	$1,188
Purchased power	1,593	—	46	1,639	1,267	—	27	1,294	345
Fuel	170	—	85	255	107	—	59	166	89
Gas purchased for resale	—	582	—	582	—	357	—	357	225
Other operations and maintenance	1,774	346	147	2,267	1,450	277	121	1,848	419
Depreciation and amortization	994	275	72	1,341	959	239	69	1,267	74
Taxes, other than income taxes	1,637	413	109	2,159	1,541	367	108	2,016	143
Operating income	$1,233	$511	$(15)	$1,729	$1,337	$490	$9	$1,836	$(107)

For the Nine Months Ended
September 30, 2017

For the Nine Months Ended
September 30, 2016


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

Electric

CECONY’s results of electric operations for the nine months ended September 30, ~~2017~~2022 compared with the ~~2016~~2021 period iswere as follows:


	For the Nine Months Ended
(Millions of Dollars)	September 30, 2022	September 30, 2021	Variation
Operating revenues	$7,401	$6,661	$740
Purchased power	1,593	1,267	326
Fuel	170	107	63
Other operations and maintenance	1,774	1,450	324
Depreciation and amortization	994	959	35
Taxes, other than income taxes	1,637	1,541	96
Electric operating income	$1,233	$1,337	$(104)

For the Nine Months Ended

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

CECONY’s electric sales and deliveries for the nine months ended September 30, ~~2017~~2022 compared with the ~~2016~~2021 period were:


	Millions of kWh Delivered						Revenues in Millions (a)
	For the Nine Months Ended						For the Nine Months Ended
Description	September 30, 2022	September 30, 2021	Variation	Percent Variation			September 30, 2022	September 30, 2021	Variation	Percent Variation
Residential/Religious (b)	9,283	8,828	455	5.2	%		$2,600	$2,415	$185	7.7	%
Commercial/Industrial	7,857	6,981	876	12.5			2,026	1,657	369	22.3
Retail choice customers	16,204	16,310	(106)	(0.6)			1,950	2,008	(58)	(2.9)
NYPA, Municipal Agency and other sales	7,185	6,854	331	4.8			576	536	40	7.5
Other operating revenues (c)	—	—	—	—			249	45	204	Large
Total	40,529	38,973	1,556	4.0	%	(d)	$7,401	$6,661	$740	11.1	%

Millions of kWh Delivered Revenues in Millions (a)

For the Nine Months Ended

For the Nine Months Ended

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


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


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


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


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

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

(d)After adjusting for variations, primarily weather and billing days, electric delivery volumes in CECONY’s service area increased 3.4 percent in the nine months ended September 30, 2022 compared with the 2021 period.

~~Table of Contents~~

Operating revenues ~~decreased $143~~ increased $740 million in the nine months ended September 30, ~~2017~~2022 compared with the ~~2016~~2021 period primarily due ~~primarily~~ to ~~lower~~higher purchased power ~~costs~~expenses ($~~107~~326 million)~~. The lower revenues reflected the decline in surcharges for assessments and fees that were collected~~, an increase in revenues from ~~customers~~the electric rate plan ($13231 million) and higher fuel expenses ($63 million).

Purchased power expenses ~~decreased $107~~increased $326 million in the nine months ended September 30, ~~2017~~2022 compared with the ~~2016~~2021 period due to ~~lower~~higher unit costs ($311 million), and higher purchased volumes ($9515 million) ~~and unit costs ($12 million)~~.

Fuel expenses increased ~~$14~~$63 million in the nine months ended September 30, ~~2017~~2022 compared with the ~~2016~~2021 period due to higher unit costs ($1270 million) ~~and~~, offset in part by lower purchased volumes from the ~~company’s~~company's electric generating facilities ($27 million).

Other operations and maintenance expenses ~~decreased $131~~increased $324 million in the nine months ended September 30, ~~2017~~2022 compared with the ~~2016~~2021 period primarily due ~~primarily~~ to ~~lower~~higher costs for pension and other postretirement benefits, reflecting reconciliation to the rate plan level ($~~114~~260 million), higher municipal infrastructure support costs ($20 million), higher surcharges for assessments and fees that are collected in revenues from customers ($17 million), higher stock-based compensation costs ($13 million), ~~environmental costs ($17 million) and stock based compensation~~higher uncollectible expense ($6 million), ~~offset by~~and higher costs for ~~municipal infrastructure support~~injuries and damages ($202 million).

Depreciation and amortization expenses increased ~~$45~~$35 million in the nine months ended September 30, ~~2017~~2022 compared with the ~~2016~~2021 period primarily due ~~primarily~~ to higher electric utility plant balances.

Taxes, other than ~~income~~ income taxes increased ~~$46~~$96 million in the nine months ended September 30, ~~2017~~2022 compared with the ~~2016~~2021 period primarily due ~~primarily~~ to a higher deferral of over-collected property taxes ($50 million), higher property taxes ($~~43 million) and the absence in 2017 of a favorable state audit settlement in 2016 ($5~~22 million), ~~offset by lower~~higher state and local taxes ($419 million) and higher payroll taxes ($5 million).

Gas

CECONY’s results of gas operations for the nine months ended September 30, ~~2017~~2022 compared with the ~~2016~~2021 period iswere as follows:


	For the Nine Months Ended
(Millions of Dollars)	September 30, 2022	September 30, 2021	Variation
Operating revenues	$2,127	$1,730	$397
Gas purchased for resale	582	357	225
Other operations and maintenance	346	277	69
Depreciation and amortization	275	239	36
Taxes, other than income taxes	413	367	46
Gas operating income	$511	$490	$21

For the Nine Months Ended

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

~~Table of Contents~~

CECONY’s gas sales and deliveries, excluding off-system sales, for the nine months ended September 30, ~~2017~~2022 compared with the ~~2016~~2021 period were:


	Thousands of Dt Delivered						Revenues in Millions (a)
	For the Nine Months Ended						For the Nine Months Ended
Description	September 30, 2022	September 30, 2021	Variation	Percent Variation			September 30, 2022	September 30, 2021	Variation	Percent Variation
Residential	39,172	39,231	(59)	(0.2)	%		$942	$789	$153	19.4	%
General	25,507	23,663	1,844	7.8			428	313	115	36.7
Firm transportation	57,307	58,783	(1,476)	(2.5)			590	523	67	12.8
Total firm sales and transportation	121,986	121,677	309	0.3		(b)	1,960	1,625	335	20.6
Interruptible sales (c)	4,875	4,747	128	2.7			40	22	18	81.8
NYPA	34,867	36,601	(1,734)	(4.7)			2	2	—	—
Generation plants	42,329	32,653	9,676	29.6			24	18	6	33.3
Other	14,956	15,872	(916)	(5.8)			27	27	—	—
Other operating revenues (d)	—	—	—	—			74	36	38	Large
Total	219,013	211,550	7,463	3.5	%		$2,127	$1,730	$397	22.9	%

(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 0.6 percent in the nine months ended September 30, 2022 compared with the 2021 period.

(c)Includes 1,702 thousand and 1,700 thousand of Dt for the 2022 and 2021 periods, respectively, which are also reflected in firm transportation and other.

Thousands of Dt Delivered Revenues in Millions (a)

For the Nine Months Ended

For the Nine Months Ended

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


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


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


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


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

Operating revenues increased ~~$308~~$397 million in the nine months ended September 30, ~~2017~~2022 compared with the ~~2016~~2021 period primarily due ~~primarily~~ to higher gas purchased for resale expense ($225 million) and an increase in revenues from the gas rate plan ~~and growth in the number of customers~~ ($~~133 million) and increased gas purchased for resale expense ($155~~151 million).

Gas purchased for resale increased ~~$155~~$225 million in the nine months ended September 30, ~~2017~~2022 compared with the ~~2016~~2021 period due to higher unit costs ($~~151~~172 million) and higher purchased volumes ($453 million).

Other operations and maintenance expenses increased ~~$23~~$69 million in the nine months ended September 30, ~~2017~~2022 compared with the ~~2016~~2021 period primarily due ~~primarily~~ to higher costs for pension and other postretirement benefits, reflecting reconciliation to the rate plan level ($53 million), higher stock-based compensation costs ($73 million), ~~health~~higher departmental gas operations cost ($1 million), higher uncollectible expense ($1 million), higher municipal infrastructure support costs ($1 million), and ~~life expenses ($5 million),~~higher surcharges for assessments and fees that are collected in revenues from customers ($31 million) ~~and costs for maintenance of gas mains ($2 million)~~.

Depreciation and amortization expenses increased ~~$19~~$36 million in the nine months ended September 30, ~~2017~~2022 compared with the ~~2016~~2021 period primarily due ~~primarily~~ to higher gas utility plant balances.

Taxes, other than income taxes increased ~~$22~~$46 million in the nine months ended September 30, ~~2017~~2022 compared with the ~~2016~~2021 period primarily due ~~primarily~~ to a higher deferral of over-collected property taxes ($20 million), higher property taxes ($1214 million), and higher state and local taxes ($610 million) ~~and payroll taxes ($3 million)~~.

~~Table of Contents~~

Steam

CECONY’s results of steam operations for the nine months ended September 30, ~~2017~~2022 compared with the ~~2016~~2021 period iswere as follows:


	For the Nine Months Ended
(Millions of Dollars)	September 30, 2022	September 30, 2021	Variation
Operating revenues	$444	$393	$51
Purchased power	46	27	19
Fuel	85	59	26
Other operations and maintenance	147	121	26
Depreciation and amortization	72	69	3
Taxes, other than income taxes	109	108	1
Steam operating income	$(15)	$9	$(24)

For the Nine Months Ended

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

CECONY’s steam sales and deliveries for the nine months ended September 30, ~~2017~~2022 compared with the ~~2016~~2021 period were:


	Millions of Pounds Delivered						Revenues in Millions
	For the Nine Months Ended						For the Nine Months Ended
Description	September 30, 2022	September 30, 2021	Variation	Percent Variation			September 30, 2022	September 30, 2021	Variation	Percent Variation
General	390	396	(6)	(1.5)	%		$21	$19	$2	10.5	%
Apartment house	3,781	3,768	13	0.3			115	100	15	15.0
Annual power	9,109	8,888	221	2.5			297	256	41	16.0
Other operating revenues (a)	—	—	—	—			11	18	(7)	(38.9)
Total	13,280	13,052	228	1.7	%	(b)	$444	$393	$51	13.0	%

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

Millions of Pounds Delivered Revenues in Millions

For the Nine Months Ended

For the Nine Months Ended

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


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


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

(b)After adjusting for variations, primarily weather and billing days, steam sales and deliveries increased 0.7 percent in the nine months ended September 30, 2022 compared with the 2021 period.

Operating revenues increased ~~$42~~$51 million in the nine months ended September 30, ~~2017~~2022 compared with the ~~2016~~2021 period primarily due ~~primarily~~ to higher fuel expenses ($2226 million), ~~the weather impact on revenues~~higher purchased power expenses ($~~6 million), lower regulatory reserve related to steam earnings sharing ($7 million), a property tax refund incentive ($3~~19 million), and ~~higher purchased power costs~~the impact of milder than normal weather in the 2021 period ($13 million).

Purchased power expenses increased $1$19 million in the nine months ended September 30, ~~2017~~2022 compared with the ~~2016 period due to higher unit costs ($5 million), offset by lower purchased volumes ($4 million).~~

~~Fuel~~ ~~expenses increased $22 million in the nine months ended September 30, 2017 compared with the 2016~~2021 period due to higher unit costs ($23 million), offset in part by lower purchased volumes ($4 million).

Fuel expenses increased $26 million in the nine months ended September 30, 2022 compared with the 2021 period due to higher unit costs ($20 million) and higher purchased volumes from the company’s steam generating facilities ($16 million).

Other operations and maintenance expenses ~~decreased $5~~increased $26 million in the nine months ended September 30, ~~2017~~2022 compared with the ~~2016~~2021 period ~~due~~ primarily ~~to lower equipment maintenance expenses.~~

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

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

~~Net Interest Expense~~

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

~~Table of Contents~~

~~Income Tax Expense~~

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

~~O&R~~

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

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

~~Electric~~

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

For the Nine Months Ended

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

~~Table of Contents~~

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

Millions of kWh Delivered Revenues in Millions (a)

For the Nine Months Ended

For the Nine Months Ended

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


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


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


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


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

~~Operating revenues~~ decreased $2 million in the nine months ended September 30, 2017 compared with the 2016 period due primarily to lower purchased power expense ($6 million) and lower revenues from rental property ($1 million), offset by higher revenues from the New York electric rate plan level ($~~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~~22 million), higher surcharges for assessments and fees that are collected in revenues from customers ($1 million), and a higher ~~reserve for injuries and damages~~stock-based compensation costs ($1 million).

Depreciation and amortization expenses increased $3 million in the nine months ended September 30, 2022 compared with the 2021 period due to higher steam utility plant balances.

Taxes, other than income taxes increased $1 million in the nine months ended September 30, ~~2017~~2022 compared with the ~~2016~~2021 period primarily due ~~primarily~~ to higher ~~electric utility plant balances.~~property taxes.

~~Taxes,~~Other Income (Deductions)

Other income increased $315 million in the nine months ended September 30, 2022 compared with the 2021 period primarily due to lower costs associated with components of pension and other postretirement benefits other than service cost ($335 million), offset in part by lower expenses resulting from investment performance in a deferred income plan ($21 million)

Net Interest Expense

Net interest expense increased $37 million in the nine months ended September 30, 2022 compared with the 2021 period primarily due to higher interest expense for long-term debt ($37 million) and higher interest for short-term debt ($13 million), offset in part by an increase in allowance for borrowed funds used during construction ($14 million).

Income Tax Expense

Income taxes increased $44 million in the nine months ended September 30, 2022 compared with the 2021 period primarily due to higher income before income tax expense ($36 million), higher state income taxes ($8 million) and lower flow-through tax benefits in 2022 for plant-related items ($5 million), offset in part by higher research and development credits ($6 million, including $5 million from prior years).

O&R


	For the Nine Months Ended September 30, 2022			For the Nine Months Ended September 30, 2021
(Millions of Dollars)	Electric	Gas	2022 Total	Electric	Gas	2021 Total	2022-2021 Variation
Operating revenues	$594	$219	$813	$522	$177	$699	$114
Purchased power	210	—	210	157	—	157	53
Gas purchased for resale	—	94	94	—	56	56	38
Other operations and maintenance	203	56	259	193	47	240	19
Depreciation and amortization	53	20	73	52	19	71	2
Taxes, other than income taxes	43	24	67	43	24	67	—
Operating income	$85	$25	$110	$77	$31	$108	$2

Electric

O&R’s results of electric operations for the nine months ended September 30, 2022 compared with the 2021 period were as follows:


	For the Nine Months Ended
(Millions of Dollars)	September 30, 2022	September 30, 2021	Variation
Operating revenues	$594	$522	$72
Purchased power	210	157	53
Other operations and maintenance	203	193	10
Depreciation and amortization	53	52	1
Taxes, other than income taxes	43	43	—
Electric operating income	$85	$77	$8

O&R’s electric sales and deliveries for the nine months ended September 30, 2022 compared with the 2021 period were:


	Millions of kWh Delivered						Revenues in Millions (a)
	For the Nine Months Ended						For the Nine Months Ended
Description	September 30, 2022	September 30, 2021	Variation	Percent Variation			September 30, 2022	September 30, 2021	Variation	Percent Variation
Residential/Religious (b)	1,482	1,366	116	8.5	%		$315	$257	$58	22.6	%
Commercial/Industrial	706	625	81	13.0			111	83	28	33.7
Retail choice customers	2,015	2,201	(186)	(8.5)			159	176	(17)	(9.7)
Public authorities	86	83	3	3.6			12	8	4	50.0
Other operating revenues (c)	—	—	—	—			(3)	(2)	(1)	—
Total	4,289	4,275	14	0.3	%	(d)	$594	$522	$72	13.8	%

(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. Effective July 2021, the majority of O&R’s electric distribution revenues in NJ are subject to a conservation incentive program, as a result of which distribution revenues are generally not affected by changes in delivery volumes from levels assumed when rates were approved. O&R’s electric transmission revenues in NJ are not subject to a conservation incentive program, 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 increased 1.5 percent in the nine months ended September 30, 2022 compared with the 2021 period.

Operating revenues increased $72 million in the nine months ended September 30, 2022 compared with the 2021 period primarily due to higher purchased power expenses ($53 million) and higher revenues from the New York electric rate plan ($17 million).

Purchased power expenses increased $53 million in the nine months ended September 30, 2022 compared with the 2021 period primarily due to higher unit costs ($47 million) and higher purchased volumes ($7 million).

Other operations and maintenance expenses increased $10 million in the nine months ended September 30, 2022 compared with the 2021 period primarily due to higher costs for pension, reflecting reconciliation to the rate plan level.

Depreciation and amortization increased $1 million in the nine months ended September 30, ~~2017~~2022 compared with the ~~2016~~2021 period primarily due ~~primarily~~ to higher ~~property taxes.~~electric utility plant balances.

Gas

O&R’s results of gas operations for the nine months ended September 30, ~~2017~~2022 compared with the ~~2016~~2021 period iswere as follows:

For the Nine Months Ended

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

~~Table of Contents~~


	For the Nine Months Ended
(Millions of Dollars)	September 30, 2022	September 30, 2021	Variation
Operating revenues	$219	$177	$42
Gas purchased for resale	94	56	38
Other operations and maintenance	56	47	9
Depreciation and amortization	20	19	1
Taxes, other than income taxes	24	24	—
Gas operating income	$25	$31	$(6)

O&R’s gas sales and deliveries, excluding off-system sales, for the nine months ended September 30, ~~2017~~2022 compared with the ~~2016~~2021 period were:


	Thousands of Dt Delivered						Revenues in Millions (a)
	For the Nine Months Ended						For the Nine Months Ended
Description	September 30, 2022	September 30, 2021	Variation	Percent Variation			September 30, 2022	September 30, 2021	Variation	Percent Variation
Residential	8,433	7,784	649	8.3	%		$144	$108	$36	33.3	%
General	1,945	1,729	216	12.5			27	19	8	42.1
Firm transportation	4,702	5,514	(812)	(14.7)			33	41	(8)	(19.5)
Total firm sales and transportation	15,080	15,027	53	0.4		(b)	$204	$168	$36	21.4
Interruptible sales	2,936	3,002	(66)	(2.2)			4	4	—	—
Generation plants	11	24	(13)	(54.2)			—	—	—	—
Other	437	271	166	61.3			1	1	—	—
Other gas revenues	—	—	—	—			10	4	6	Large
Total	18,464	18,324	140	0.8	%		$219	$177	$42	23.7	%

(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.

Thousands of Dt Delivered Revenues in Millions (a)

For the Nine Months Ended

For the Nine Months Ended

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


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


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

(b)After adjusting for weather and other variations, total firm sales and transportation volumes increased 1 percent in the nine months ended September 30, 2022 compared with 2021 period.

Operating revenues increased ~~$39~~$42 million in the nine months ended September 30, ~~2017~~2022 compared with the ~~2016~~2021 period primarily due ~~primarily~~ to an increase in gas purchased for resale ($2038 million) and higher revenues from the ~~New York~~NY gas rate plan ($148 million).

Gas purchased for resale increased ~~$20~~$38 million in the nine months ended September 30, ~~2017~~2022 compared with the ~~2016~~2021 period primarily due to higher unit costs ($30 million) and higher purchased volumes ($127 million) ~~and unit costs ($8 million)~~.

Other operations and maintenance expenses increased ~~$11~~$9 million in the nine months ended September 30, ~~2017~~2022 compared with the ~~2016~~2021 period primarily due ~~primarily~~ to higher costs for pension, ~~costs.~~reflecting reconciliation to the rate plan level.

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~~ expenses increased $1 million in the nine months ended September 30, ~~2017~~2022 compared with the ~~2016~~2021 period primarily due ~~primarily~~ to higher ~~property taxes.~~gas utility plant balances.

Income Tax Expense

Income taxes increased $4$7 million in the nine months ended September 30, ~~2017~~2022 compared with the ~~2016~~2021 period primarily due ~~primarily~~ to higher income before income tax expense ($15 million) and higher state income taxes ($3 million), ~~a decrease~~offset in ~~tax benefits for plant-related flow through items~~part by an increase in the amortization of excess deferred federal income taxes due to the TCJA ($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 months ended September 30, ~~2017~~2022 compared with the ~~2016~~2021 period iswere as follows:


	For the Nine Months Ended
(Millions of Dollars)	September 30, 2022	September 30, 2021	Variation
Operating revenues	$857	$779	$78
Purchased power	6	—	6
Gas purchased for resale	157	49	108
Other operations and maintenance	252	348	(96)
Depreciation and amortization	178	172	6
Taxes, other than income taxes	16	14	2




Operating income	$248	$196	$52

For the Nine Months Ended

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

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

Operating revenues ~~decreased $538~~ increased $78 million in the nine months ended September 30, ~~2017~~2022 compared with the ~~2016~~2021 period primarily due ~~primarily~~ to higher wholesale revenues ($130 million), net mark-to-market values ($23 million), offset in part by lower ~~electric retail revenues of $781 million~~revenue from the sale of the retail electric supply business in September 2016. Renewable revenues increased $112 million due primarily to an increase in renewable electric production projects in operation and revenues from the engineering, procurement and construction of ~~Upton 2 (see Note O to the Third Quarter Financial Statements). Energy~~renewable electric projects ($71 million), and lower energy services revenues increased $21 million. Wholesale revenues increased $105 million due to higher sales volumes. Net mark-to-market values decreased $6 million of which $11 million in losses are reflected in purchased power costs and $5 million in gains are reflected in revenues.($4 million).

Purchased power ~~expenses decreased $679~~ increased $6 million in the nine months ended September 30, ~~2017~~2022 compared with the ~~2016~~2021 period due ~~primarily~~ to ~~lower~~higher costs from renewable 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).~~projects.

Gas purchased for resale increased ~~$89~~$108 million in the nine months ended September 30, ~~2017~~2022 compared with the ~~2016~~2021 period primarily due to higher purchased ~~volumes.~~volumes and prices.

Other operations and maintenance expenses ~~increased $50~~decreased $96 million in the nine months ended September 30, ~~2017~~2022 compared with the ~~2016~~2021 period primarily due to ~~Upton 2~~lower costs from engineering, procurement and construction ~~costs (see Note O~~of renewable electric projects.

Depreciation and amortization expenses increased $6 million in the nine months ended September 30, 2022 compared with the 2021 period primarily due to ~~the Third Quarter Financial Statements) and~~ an increase in ~~energy services costs.~~renewable electric projects in operation during 2022.

~~Depreciation and amortization~~Net Interest Expense

Net interest expense decreased $112 million in the nine months ended September 30, 2022 compared with the 2021 period primarily due to higher unrealized gains on interest rate swaps in the 2022 period.

Income Tax Expense

Income taxes increased $24 million in the nine months ended September 30, ~~2017~~2022 compared with the ~~2016~~2021 period primarily due to higher income before income tax expense ($35 million), higher state income taxes ($7 million) and an increase in ~~solar electric production projects~~the reserve for uncertain tax positions ($5 million), offset in ~~operation during 2017.~~part by a lower loss attributable to non-controlling interest ($18 million) and higher renewable energy credits ($4 million).

~~Taxes, other than income taxes~~ ~~decreased $4~~Income (Loss) Attributable to Non-Controlling Interest

Income attributable to non-controlling interest increased $72 million to a loss of $43 million in the nine months ended September 30, ~~2017~~2022 compared with the ~~2016~~2021 period primarily due to lower ~~gross receipts~~income attributable in the 2021 period to a tax equity investor in renewable electric projects accounted for under the HLBV method of accounting. See Note P to the Third Quarter Financial Statements.

Con Edison Transmission

Other Income (Deductions)

Other income (deductions) increased $192 million from $178 million of other deductions to $14 million of other income in the ~~sale~~nine months ended September 30, 2022 compared with the 2021 period primarily due to losses in the 2021 period from CET Gas' pre-tax impairment loss of $211 million on its investment in Stagecoach (See "Investments" in Note A to the ~~retail electric supply business~~Third Quarter Financial Statements), offset in ~~September 2016.~~part by investment income from Stagecoach ($22 million) and NY Transco ($11 million), compared to 2022 investment income from NY Transco ($14 million).

G~~ain on sale of retail electric supply business~~ ~~was $104~~

Net Interest Expense

Net interest expense decreased $5 million in the nine months ended September 30, ~~2016 reflecting~~2022 compared with the 2021 period primarily due to the repayment of an intercompany loan from the parent company from a portion of the proceeds from the substantial completion of the sale of ~~the Clean Energy Businesses' retail electric supply business.~~Stagecoach.

~~Other~~ Income ~~(Deductions)~~Tax Expense

~~Other income (deductions) decreased $2~~Income taxes increased $52 million in the nine months ended September 30, ~~2017~~2022 compared with the ~~2016~~2021 period primarily due ~~primarily~~ to ~~earnings from equity investments.~~higher income before income tax expense ($41 million) and higher state income taxes ($13 million), offset in part by a decrease in the amortization of deficient deferred federal income taxes due to the TCJA ($1 million).

~~Net Interest~~

Other

Income Tax Expense

~~Net interest expense~~Income taxes increased ~~$11~~$9 million in the nine months ended September 30, ~~2017~~2022 compared with the ~~2016~~2021 period primarily due ~~primarily~~ to ~~increased debt on solar electric production projects.~~

~~Table of Contents~~

~~Income Tax Expense~~

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

~~Con Edison Transmission~~

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

~~Net Interest Expense~~

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

~~Other Income (Deductions)~~

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

~~Income Tax Expense~~

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

~~Other~~

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

Liquidity and Capital Resources

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

~~Changes in the~~

The Companies’ cash, ~~and~~ temporary cash investments and restricted cash resulting from operating, investing and financing activities for the nine months ended September 30, ~~2017~~2022 and ~~2016~~2021 are summarized as follows:


	For the Nine Months Ended September 30,
	CECONY		O&R		Clean Energy Businesses (d)		Con Edison Transmission		Other (a)		Con Edison (b)
(Millions of Dollars)	2022	2021	2022	2021	2022	2021	2022	2021	2022	2021	2022	2021
Operating activities	$2,191	$1,251	$165	$106	$251	$56	$49	$43	$(38)	$256	$2,618	$1,712
Investing activities	(2,929)	(2,782)	(162)	(157)	(206)	(106)	(49)	608	—	—	(3,346)	(2,437)
Financing activities	(157)	482	(2)	39	(42)	35	—	(651)	24	(400)	(177)	(496)
Net change for the period	(895)	(1,049)	1	(12)	3	(15)	—	—	(14)	(145)	(905)	(1,221)
Balance at beginning of period	920	1,067	29	37	178	187	—	—	19	145	1,146	1,436
Balance at end of period (c)	$25	$18	$30	$25	$181	$172	$—	$—	$5	$0	$241	$215

(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 Third Quarter Financial Statements.

(d) On October 1, 2022, Con Edison entered into a purchase and sale agreement pursuant to which Con Edison agreed to sell the Clean Energy Businesses. See Note T to the Third Quarter

Financial Statements.

For the Nine Months Ended September 30,
Con Edison CECONY
(Millions of Dollars) 2017
2016 Variation 2017
2016
Variation
Operating activities $2,227 $2,336 $(109) $1,790 $2,017 $(227)
Investing activities (2,572) (3,717) 1,145 (2,197) (1,943) (254)
Financing activities (362) 583 (945) (278) (891) 613
Net change for the period (707) (798) 91 (685) (817) 132
Balance at beginning of period 776 944 (168) 702 843 (141)
Balance at end of period $69 $146 $(77) $17 $26 $(9)
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)

~~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.

During 2020 and 2021, the decline in business activity in the Utilities’ service territory due to the COVID-19 pandemic and the Utilities' suspension of service disconnections, bill collection activities and certain charges and fees resulted in a slower recovery of cash from outstanding customer accounts receivable balances, material increases in customer accounts receivable balances, increases to the allowance for uncollectible accounts, and may result in increases to write-offs of customer accounts, as compared to prior to the COVID-19 pandemic. Under the revenue decoupling mechanisms in the Utilities’ ~~New York~~NY 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~~largely not net income. The prices at which the Utilities provide energy to their customers are determined in accordance with their rate plans. During the nine months ended September 30, 2022, increases in electric and gas commodity prices have contributed and may further contribute to a slower recovery of cash from outstanding customer accounts receivable balances, increases to the allowance for uncollectible accounts, and increases to write-offs of customer accounts receivable balances. 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. See “Financial and Commodity Market Risks – Commodity Price Risk,” below.

The Utilities’ NY rate plans allow them to defer costs resulting from a change in legislation, regulation and related actions that have taken effect during the term of the rate plans once the costs exceed a specified threshold. Increases to the allowance for uncollectible accounts related to the COVID-19 pandemic have been deferred pursuant to the legislative, regulatory and related actions provisions of their rate plans. In November 2021, the NYSPSC issued an order establishing a surcharge recovery mechanism commencing December 1, 2021 through December 31, 2022 for CECONY to collect late payment charges and fees that were not billed for the year ended December 31, 2020 due to the COVID-19 pandemic. The order also established a surcharge recovery or surcredit mechanism for any fee deferrals for 2021 and 2022. In April 2022, the NYSPSC approved the October 2021 joint proposal for new electric and gas rates for O&R for the three-year period January 2022 through December 2024 (the Joint Proposal) that includes certain COVID-19 provisions, such as: recovery of 2020 late payment charges over three years; reconciliation of late payment charges to amounts reflected in rates for years 2021 through 2024; and reconciliation of write-offs of customer accounts receivable balances to amounts reflected in rates from January 1, 2020 through December 31, 2024. In June 2022, the NYSPSC issued an order implementing a COVID-19 arrears assistance program that provides credits towards the arrears balances of low-income electric and gas customers of CECONY and O&R. See “COVID-19 Regulatory Matters” and “Other Regulatory Matters” in Note B to the Third Quarter Financial Statements and “Coronavirus Disease 2019 (COVID-19) Impacts - Liquidity and Financing,” above.

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. Pursuant to their rate plans, the Utilities also recover from customers the amount of property taxes they will pay. The payment of property taxes by the Utilities affects the timing of cash flows and increases the amount of short-term borrowings issued by the Utilities when property taxes are due and as property taxes increase, but generally does not impact net income. See “Rate Plans” in Note B, "COVID-19 Regulatory Matters" in Note B, “Other Regulatory Matters” in Note B and Note J to the Third 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~~NY electric and gas rate plans. For Con Edison, net income for the nine months ended September 30, 2021 included non-cash losses recognized with respect to a partial goodwill impairment of Con Edison Transmission’s investment in Stagecoach. See “Investments” in Note A to the Third Quarter Financial Statements.

Net cash flows from operating activities for the nine months ended September 30, ~~2017~~2022 for Con Edison and CECONY were ~~$109~~$906 million higher and ~~$227~~$940 million ~~lower,~~higher, respectively, than in the ~~2016~~2021 period. The ~~change~~changes in net cash flows for Con Edison and CECONY ~~reflects~~ primarily reflect net lower pension and retiree benefits contributions ($433 million and $408 million, respectively), higher ~~cash paid for~~deferred income taxes ~~in the 2017 period as compared with the 2016 period of $110~~($150 million and ~~$226~~$69 million, ~~respectively,~~respectively), higher other current liabilities balances ($139 million and $46 million, respectively) and higher recoveries of depreciation and amortization ($82 million and $74 million, respectively), a higher increase of accounts receivables balances from customers net of ~~refunds received. The income tax refund received~~allowance for uncollectible accounts ($70 million and $80 million, respectively) (see “COVID-19 Regulatory Matters” in ~~2016 reflected~~Note B to the ~~extension~~Third Quarter Financial Statements and “Coronavirus Disease 2019 (COVID-19) Impacts", "Accounting Considerations” and “Liquidity and Financing,” above) and higher increase of ~~bonus depreciation~~accounts payable balances ($76 million and $37 million, respectively), offset in ~~late 2015, resulting in a refund of~~part by net lower deferred credits, noncurrent liabilities and other regulatory liabilities balances ($216 million and $225 million, respectively). For Con Edison, it also reflects higher other receivables and current asset balances ($41 million). For CECONY, the ~~2015 estimated federal tax payments.~~

higher net cash flows from operating activities also reflects lower other receivables and other current asset balances ($285 million), and higher accrued taxes ($28 million). 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, 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~~$909 million ~~lower~~higher and ~~$254~~$147 million higher, respectively, for the nine months ended September 30, ~~2017~~2022 compared with the ~~2016~~2021 period. The change for Con Edison primarily reflects ~~primarily lower new investments~~the proceeds from the sale of Stagecoach in 2021 ($614 million), proceeds from the divestiture of renewable electric ~~and gas transmission~~ projects at the Clean Energy Businesses in 2021 ($~~1,011~~183 million) and ~~renewable electric production projects~~an increase in utility construction expenditures at CECONY ($~~240~~142 million), ~~and~~partially offset by a decrease in non-utility construction expenditures at the Clean Energy Businesses ($~~148~~80 million)~~, offset in part by lower proceeds from sale~~ due to construction of ~~assets ($216 million). The change for CECONY primarily reflects absence~~the CED Nevada Virginia projects being completed during the first half of ~~proceeds from the transfer of assets to NY Transco in 2016 ($122 million) and increased utility construction expenditures ($88 million).~~2021.

Cash Flows from Financing Activities

Net cash flows from financing activities for Con Edison and CECONY were ~~$945~~$319 million ~~lower~~higher and ~~$613~~$639 million ~~higher,~~lower, respectively, in the nine months ended September 30, ~~2017~~2022 compared with the ~~2016~~2021 period.

In ~~August 2017,~~June 2022, Con Edison redeemed at maturity $293 million of 8.71 percent senior unsecured notes. See Note C to the Third Quarter Financial Statements.

In June 2022, Con Edison entered into and borrowed $400 million under a 364-Day Senior Unsecured Term Loan Credit Agreement under which a bank is committed, until November 30, 2022, to provide to Con Edison one or more tranches of incremental term loans in an aggregate amount not to exceed $200 million in addition to the $400 million borrowed on June 30, 2022. See Note D to the Third Quarter Financial Statements.

In June 2021, Con Edison issued ~~4.1 million~~10,100,000 shares of its common ~~shares~~stock resulting in net proceeds of ~~$343~~approximately

$775 million, after issuance ~~expenses, that~~expenses. The net proceeds from the sale of the common shares were invested by Con

Edison in ~~its subsidiaries, principally~~ CECONY, ~~and the Clean Energy Businesses,~~ for funding of ~~their~~its construction expenditures and for its other general corporate purposes.

In May 2021, Con Edison redeemed at maturity $500 million of 2.00 percent five-year debentures.

During the first quarter of 2021, Con Edison optionally prepaid the remaining $675 million outstanding under a

February 2019 term loan prior to its maturity in June 2021.

In June 2021, CECONY redeemed at maturity $640 million of floating rate three-year debentures.

In June 2021, CECONY issued $750 million aggregate principal amount of 2.40 percent debentures, due 2031, the

net proceeds from the sale of which were used to redeem at maturity its $640 million floating rate three-year debentures and for other general corporate purposes.

In June ~~2017,~~2021 CECONY also issued ~~$500~~$750 million aggregate principal amount of ~~3.875~~3.60 percent debentures, due ~~2047,~~2061, 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, 2021 until

the maturity date of the debentures. CECONY used the net proceeds for repayment of short-term debt and temporarily placed the remaining net proceeds in short-term interest-bearing instruments.

In November 2022, O&R issued $100 million aggregate principal amount of 5.70 percent debentures, due 2032, the net proceeds from the sale of which were used to repay short-term borrowings and for other general corporate purposes. See Note C to the Third Quarter Financial Statements.

In ~~March 2017, Con Edison~~December 2021, O&R issued ~~$400~~$45 million aggregate principal amount of ~~2.00~~2.31 percent debentures, due ~~2020,~~2031 and ~~prepaid the June 2016 $400 million variable rate term loan that was to mature in 2018.~~

~~Also, in March 2017, a Con Edison Development subsidiary issued $97~~$30 million aggregate principal amount of ~~4.45 percent senior notes, due 2042, 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~~3.17 percent debentures, due ~~2046,~~2051, the net proceeds from the ~~sale~~sales of which were used to repay short-term borrowings and for other general corporate purposes. ~~In September 2016, CECONY redeemed at maturity $400 million of 5.50 percent 10-year debentures.~~

In ~~June 2016,~~August 2022, the Clean Energy Businesses entered into and borrowed $150 million under a 364-Day Senior Unsecured Term Loan Credit Agreement guaranteed by Con Edison, ~~Solutions subsidiary borrowed $2 million pursuant~~the proceeds from which were used for general corporate purposes. See Note D and Note H 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.~~the Third Quarter Financial Statements.

In ~~May 2016, Con Edison issued approximately 10 million common shares resulting in net proceeds, after issuance expenses,~~March 2021, a subsidiary of ~~$702 million and $500~~the Clean Energy Businesses agreed to issue $229 million aggregate principal amount of ~~2.00~~3.77 percent ~~debentures,~~senior notes, due 2046. In June 2021, July 2021, and August 2021 CED Nevada Virginia issued $38 million, $61 million and $130 million, respectively, of the ~~net~~$229 million senior notes, which are secured by equity interests in CED Nevada and the proceeds from the sale of which ~~were used in connection with~~repaid a portion of the ~~acquisition by~~borrowings outstanding under 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.~~construction loan facility.

~~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,~~2021, a ~~Con Edison Development~~ subsidiary ~~issued $218~~of the Clean Energy Businesses borrowed $250 million ~~aggregate principal amount of 4.21 percent senior notes,~~at a variable rate, due ~~2041,~~2028, secured by equity interests in four of the ~~company's Texas Solar 7~~company’s solar ~~project.~~electric projects, the interest rate for which was swapped to a fixed rate of 3.39 percent.

In February 2021, a subsidiary of the Clean Energy Businesses entered into an agreement with a tax equity investor for the financing of a portfolio of three of the Clean Energy Businesses’ solar electric projects (CED Nevada Virginia). Under the financing, the tax equity investor acquired a noncontrolling interest in the portfolio and will receive a percentage of earnings, tax attributes and cash flows. In March 2021, May 2021, June 2021, July 2021, and August 2021, the tax equity investor funded $39 million, $13 million, $47 million, $53 million and $111 million, respectively. The Clean Energy Businesses will continue to consolidate this entity and will report the noncontrolling tax equity investor’s interest in the tax equity arrangement. See Note P to the Third Quarter Financial Statements.

Con Edison’s cash flows from financing activities for the nine months ended September 30, ~~2017~~2022 and ~~2016~~2021 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~~$71 million and ~~$77~~$82 million, respectively.

Cash flows ~~used in~~from financing activities of the Companies also reflect commercial paper issuances and repayments. The commercial paper amounts outstanding at September 30, ~~2017~~2022 and ~~2016~~2021 and the average daily balances for the nine months ended September 30, ~~2017~~2022 and ~~2016~~2021 for Con Edison and CECONY were as follows:


	2022				2021
(Millions of Dollars, except Weighted Average Yield)	Outstanding at September 30,		Daily average		Outstanding at September 30,		Daily average
Con Edison	$1,941		$1,368		$1,036		$1,294
CECONY	$1,789		$1,191		$942		$1,194
Weighted average yield	3.4	%	1.5	%	0.1	%	0.2	%

2017 2016
(Millions of Dollars, except Weighted Average Yield) Outstanding at September 30,
Daily
average
Outstanding at September 30,
Daily
average
Con Edison $356 $645 $601 $813
CECONY $147 $323 $480 $385
Weighted average yield 1.3 1.1 0.7 0.6

Capital Requirements and Resources

Con Edison has decreased its estimates for capital requirements for the retirement of long-term securities for 2018 from $1,688 million to $1,288 million. The decrease reflects the $400 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 and Exchange Commission (SEC) basis) for the nine months ended September 30, 2017 and 2016 and the twelve months ended December 31, 2016 was:

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 30, ~~2017~~2022 and December 31, ~~2016~~2021 was:


	Common Equity Ratio (Percent of total capitalization)
	September 30, 2022	December 31, 2021
Con Edison	48.4	47.4
CECONY	47.8	47.0

Common Equity Ratio
(Percent of total capitalization)

September 30, 2017 December 31, 2016
Con Edison 50.8 49.3
CECONY 50.9 49.5

~~Other Changes in~~ Assets, Liabilities and ~~Liabilities~~Equity

The ~~following table shows changes in certain~~Companies' assets, liabilities, and ~~liabilities~~equity at September 30, ~~2017, compared with~~2022 and December 31, ~~2016.~~2021 are summarized as follows.


	CECONY		O&R		Clean Energy Businesses (c)		Con Edison Transmission		Other (a)		Con Edison (b)
(Millions of Dollars)	2022	2021	2022	2021	2022	2021	2022	2021	2022	2021	2022	2021
ASSETS
Current assets	$4,667	$4,703	$332	$290	$775	$542	$7	$2	$(48)	$14	$5,733	$5,551
Investments	518	608	21	26	—	—	271	223	(5)	(4)	805	853
Net plant	43,208	41,613	2,668	2,599	4,499	4,367	17	17	—	—	50,392	48,596
Other noncurrent assets	6,419	5,731	403	377	1,649	1,645	7	7	355	356	8,833	8,116
Total Assets	$54,812	$52,655	$3,424	$3,292	$6,923	$6,554	$302	$249	$302	$366	$65,763	$63,116

LIABILITIES AND SHAREHOLDERS' EQUITY
Current liabilities	$5,207	$4,321	$434	$372	$1,383	$1,011	$148	$100	$(282)	$(377)	$6,890	$5,427
Noncurrent liabilities	14,349	13,640	1,099	1,064	233	121	(87)	(90)	(47)	14	15,547	14,749
Long-term debt	18,389	18,382	968	968	2,344	2,607	—	—	649	647	22,350	22,604
Equity	16,867	16,312	923	888	2,963	2,815	241	239	(18)	82	20,976	20,336
Total Liabilities and Equity	$54,812	$52,655	$3,424	$3,292	$6,923	$6,554	$302	$249	$302	$366	$65,763	$63,116

(a) Includes parent company and consolidation adjustments.

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

(c) On October 1, 2022, Con Edison entered into a purchase and sale agreement pursuant to which Con Edison agreed to sell the Clean Energy

~~Prepayments~~Businesses. See Note T to the Third Quarter Financial Statements.

CECONY

Current assets at September 30, 2022 were $36 million lower than at December 31, 2021. The change in current assets primarily reflects a decrease in cash and temporary cash investments ($895 million), a decrease to accrued unbilled revenues ($99 million), offset in part by an increase in prepayments ($559 million), an increase in accounts receivables, net of allowance for ~~Con Edison and CECONY reflects primarily the portion allocable~~uncollectible accounts ($141 million) (see “COVID-19 Regulatory Matters” in Note B to the ~~2017 fourth quarter~~Third Quarter Financial Statements and “Coronavirus Disease 2019 (COVID-19) Impacts - Accounting Considerations” and “Liquidity and Financing,” above), an increase in the fair value of ~~CECONY's July 2017 payment~~short-term derivative assets ($119 million), higher fuel oil, gas in storage, materials and supplies, at average cost ($71 million) and an increase in accounts receivable from affiliated companies ($66 million).

Investments at September 30, 2022 were $90 million lower than at December 31, 2021. The change in investments primarily reflects a decrease in supplemental retirement income plan assets ($80 million) and deferred income plan assets ($10 million). See Note E to the Third Quarter Financial Statements.

Net plant at September 30, 2022 was $1,595 million higher than at December 31, 2021. The change in net plant primarily reflects an increase in electric ($1,331 million), gas ($723 million), and steam ($67 million) plant balances and an increase in construction work in progress ($81 million), offset in part by an increase in accumulated depreciation ($595 million).

Other noncurrent assets at September 30, 2022 were $688 million higher than at December 31, 2021. The change in other noncurrent assets primarily reflects an increase in pension and retiree benefits ($501 million), an increase in the regulatory asset for system peak reduction and energy efficiency programs ($262 million), deferred storm costs ($10 million) and partially offset by deferred derivative losses ($18 million) and the decrease in deferrals for increased costs related to the COVID-19 pandemic ($5 million). An increase in the fair value of ~~its New York City semi-annual property taxes.~~

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

deferred assets ($80 million), and, operating lease right-of-use asset ($32 million). The increase is offset in ~~non-utility property, less accumulated depreciation, for Con Edison reflects~~part by a decrease in 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~~deferred pension and ~~Other Postretirement Costs~~other postretirement benefits ($110 million), 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, 2021, of the pension and other retiree benefit plans ~~as measured at December 31, 2016,~~ in accordance with the accounting rules for retirement ~~benefits.~~benefits ($100 million). The change in the regulatory asset also reflects the ~~year’s~~period's amortization of accounting costs. See Notes B, E and F to the Third Quarter Financial Statements.

Current liabilities at September 30, 2022 were $886 million higher than at December 31, 2021. The change in current liabilities primarily reflects an increase in notes payable ($428 million), an increase in the regulatory liability fordeferred derivative gains ($350 million) and increases in system benefits charges ($8 million) and accrued interest ($109 million), offset in part by a decrease in accounts payable ($3 million).

Noncurrent liabilities at September 30, 2022 were $709 million higher than at December 31, 2021. The change in noncurrent liabilities primarily reflects an increase in deferred income taxes and unamortized investment tax credits ($427 million) primarily due to accelerated tax depreciation, repair deductions and the amortization of excess deferred federal income taxes due to the TCJA. See Note J to the Third Quarter Financial Statements. The change also reflects an increase in regulatory liabilities for unrecognized other postretirement costs ($368 million), and pension and other postretirement benefit deferrals ($30 million), offset in part by a decrease in the regulatory liability for net unbilled revenue deferrals ($83 million), TCJA net benefits ($94 million) and a decrease in pension and retiree benefits liability ($29 million) that primarily reflects ~~in part contributions to~~the final actuarial valuation, as measured at December 31, 2021, of the plans ~~made by~~in accordance with the ~~Utilities in 2017.~~accounting rules for retirement benefits. See Notes E and F to the Third Quarter Financial Statements.

~~Deferred Income Taxes and Unamortized Investment Tax Credits~~Long-term debt at September 30, 2022 was $7 million higher than at December 31, 2021. The change in long-term

debt primarily reflects the amortization of unamortized debt expense over the nine month period.

Equity at September 30, 2022 was $555 million higher than at December 31, 2021. The change in equity primarily reflects net income for the nine months ended September 30, 2022 ($1,138 million), capital contributions from parent ($150 million) in 2022, an increase in ~~the liability for deferred~~other comprehensive income ~~taxes and unamortized investment tax credits for Con Edison and CECONY~~($1 million), offset in part by common stock dividends to parent ($734 million) in 2022.

O&R

Current assets at September 30, 2022 were $42 million higher than at December 31, 2021. The change in current assets primarily reflects ~~primarily bonus depreciation in 2017, partially offset by the~~higher prepayments ($19 million), an increase in ~~deferred income tax assets associated with the federal tax attribute carryforwards related to the~~accounts receivables, net ~~operating loss and general business tax credits. See~~of allowance for uncollectible accounts ($10 million) (see “COVID-19 Regulatory Matters” in Note IB to the Third Quarter Financial ~~Statements.~~Statements and “Coronavirus Disease 2019 (COVID-19) Impacts - Accounting Considerations” and “Liquidity and Financing,” above), an increase in gas in storage, at average cost ($12 million) and an increase in the fair value of short-term derivative assets ($1 million).

~~System Benefit Charge~~Investments at September 30, 2022 was $5 million lower than at December 31, 2021. The change in investments primarily reflects unrealized losses ($2 million) and benefit payout to retirees ($2 million) related to the supplemental pension plan.

Net plant at September 30, 2022 was $69 million higher than at December 31, 2021. The change in net plant primarily reflects an increase in electric ($76 million), gas ($42 million), and general ($9 million) plant balances, offset in part by an increase in accumulated depreciation ($59 million).

Other noncurrent assets at September 30, 2022 were $26 million higher than at December 31, 2021. The change in

other noncurrent assets primarily reflects an increase in pension and retiree benefits ($37 million), offset in part by a decrease in regulatory assets ($14 million).

Current liabilities at September 30, 2022 were $62 million higher than at December 31, 2021. The change in current liabilities primarily reflects an increase in the regulatory liability for deferred derivative gains ($29 million) and an increase in notes payable ($40 million), offset in part by a decrease in system benefit charges ($8 million).

Noncurrent liabilities at September 30, 2022 were $35 million higher than at December 31, 2021. The change in noncurrent liabilities primarily reflects an increase in the regulatory liabilities for unrecognized pension and other postretirement costs ($29 million), long-term deferred derivative gains ($11 million) and allowance for cost of removal less salvage ($9 million).

Equity at September 30, 2022 was $35 million higher than at December 31, 2021. The change in equity primarily reflects net income for the nine months ended September 30, 2022 ($72 million) and, an increase in other comprehensive income ($5 million), offset in part by common stock dividends to parent ($42 million) in 2022.

Clean Energy Businesses

Current assets at September 30, 2022 were $233 million higher than at December 31, 2021. The change in current assets primarily reflects increases in other currents assets ($118 million), prepayments ($21 million), accrued unbilled revenue ($56 million), restricted cash ($9 million) and other receivables ($28 million).

Net plant at September 30, 2022 was $132 million higher than at December 31, 2021. The change in net plant primarily reflects additional capital expenditures.

Other noncurrent assets at September 30, 2022 were $4 million higher than at December 31, 2021. The change in other noncurrent assets primarily reflects decreases in intangible assets ($71 million) and other noncurrent assets ($14 million), offset in part by an increase in long-term fair value of derivative assets ($88 million).

Current liabilities at September 30, 2022 were $372 million higher than at December 31, 2021. The change in current liabilities primarily reflects increases in current long term debt ($176 million), term loan ($150 million) and accounts payable ($80 million), offset in part by a decrease in the fair value of derivative liabilities ($42 million).

Noncurrent liabilities at September 30, 2022 were $112 million higher than at December 31, 2021. The change in noncurrent liabilities primarily reflects an increase in deferred taxes ($143 million), offset in part by a decrease in the fair value of derivative liabilities ($30 million).

Long-term debt at September 30, 2022 was $263 million lower than at December 31, 2021. The change in long-term debt primarily reflects the timing of principal loan repayments.

Equity at September 30, 2022 was $148 million higher than at December 31, 2021. The change in equity primarily reflects an increase in net income for the nine months ended September 30, 2022 ($293 million), offset in part by a decrease in noncontrolling tax equity interest ($72 million) (see Note P to the Third Quarter Financial Statements) and common stock dividends to parent ($74 million) in 2022.

Con Edison Transmission

Currents assets at September 30, 2022 were $5 million higher than at December 31, 2021. The increase in current assets primarily reflectsa receivable for an intercompany tax settlement.

Investments at September 30, 2022 were $48 million higher than at December 31, 2021. The increase in investments reflects additional investment in NY Transco ($48 million).See "Investments" in Note A to the ~~liability~~Third Quarter Financial Statements.

Current liabilities at September 30, 2022 were $48 million higher than at December 31, 2021. The change in current liabilities primarily reflects an increase in short-term borrowings under an intercompany capital funding facility.

Noncurrent liabilities at September 30, 2022 were $3 million higher than at December 31, 2021. The change in noncurrent liabilities primarily reflect an increase to deferred income taxes.

Equity at September 30, 2022 was $2 million higher than at December 31, 2021. The change in equity primarily reflects an increase in net income for the ~~system benefit charge reflects amounts collected by the Utilities from their customers that will be required to be paid to NYSERDA.~~nine months ended September 30, 2022.

~~Off-Balance Sheet Arrangements~~

~~None of the Companies’ transactions, agreements or other contractual arrangements meets the SEC definition of off-balance sheet arrangements.~~

64
90

~~Table of Contents~~

Regulatory Matters

Liability for Service Interruptions

In ~~March 2017,~~December 2021, the New York State legislature amended the New York State Public Service Law, effective April 2022, to require NY electric and gas utilities, including CECONY and O&R, to provide compensation to residential and small business customers that experience widespread prolonged outages lasting more than seventy-two consecutive hours, subject to certain exceptions, including: a bill credit of $25 for each twenty-four hour period of service outage beyond the first seventy-two consecutive hour outage; reimbursement to customers for food spoilage up to $540; and reimbursement of affected residential customers for prescription medicine spoilage losses without limitation. Any such costs incurred by utilities are not recoverable from customers. Utilities may petition the NYSPSC to request a waiver of the requirements of this section of the New York State Public Service Law. In July 2022, the NYSPSC issued an order that ~~changes the way distributed energy resources are compensated~~promulgated rules 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 paiddefinitions for the ~~value~~law’s implementation and determined that while a utility could seek a waiver of ~~their exports~~the requirement to provide compensation, it could not seek a waiver of the ~~electricity distribution system. The new policy establishes a 2 percent limit on bill increases, reducing~~requirement that the ~~shifting~~costs of ~~avoided distribution costs to non-participating residential~~outage credits not be recovered from customers ~~that would have occurred under net energy metering.~~if it provided compensation.

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 Quarter Financial Statements.

Environmental Matters

In ~~May 2017, a transformer failure at~~July 2021, a CECONY ~~substation discharged~~feeder failure led to the discharge of thousands of gallons of ~~transformer oil into~~dielectric fluid from a street manhole in New Rochelle, NY. Dielectric fluid reached nearby streets, properties and the ~~soil. Some of the transformer oil, which contained small amounts of polychlorinated biphenyls (PCBs), leaked into the East River. The company,~~New Rochelle Harbor. CECONY, the U.S. Coast Guard, the ~~New York State Department of Environmental Conservation~~NYSDEC and other agencies responded to the incident. ~~The~~CECONY stopped the feeder leak on the same day the discharge occurred and has completed the spill recovery and associated cleanup operations. In addition, the company has ~~replaced the transformer, and is continuing to remediate and monitor the site, the~~received third-party damage claims. The costs ~~of which~~associated with this matter are not expected to have a material adverse effect on ~~its~~the company’s financial condition, results of operations or liquidity. In connection with the incident, the company may incur monetary sanctions of more than ~~$0.1~~$0.3 million for violations of certain provisions regulating the discharge of materials into, and for the protection of, the environment.

In ~~June 2017,~~August 2019, following the enactment of the Climate Leadership and Community Protection Act (CLCPA), the NYSPSC initiated a proceeding to “reconcile resource adequacy programs with New York State’s renewable energy and environmental emission reduction goals.” In May 2020, the NYSPSC initiated a proceeding implementing the Accelerated Renewable Energy Growth and Community Benefit Act to align New York State’s electric system with CLCPA goals. In November 2020, NY’s investor-owned utilities (including CECONY ~~received~~and O&R) and the Long Island Power Authority filed a ~~notice~~comprehensive report in this proceeding, identifying proactive local transmission and distribution investments in their systems to facilitate achieving the goals of ~~potential liability~~the CLCPA and setting out policy recommendations for how they will identify, prioritize and allocate costs of these and future such projects going forward. CECONY and O&R identified approximately $4,500 million and $400 million, respectively, in local transmission investment. In January 2022, the NYSPSC issued its order on power grid study recommendations that authorized CECONY to file a comprehensive petition addressing a proposed clean energy hub in Brooklyn, NY (Brooklyn Clean Energy Hub) that could accommodate offshore wind generation. In April 2022, CECONY filed the petition, seeking cost recovery approval for the proposed Brooklyn Clean Energy Hub at an estimated cost of $1,000 million and an estimated in-service date of 2027. The proposed Brooklyn Clean Energy Hub would create interconnection points to connect up to 6,000 MW of offshore wind energy into the New York City grid. In May 2022, the NYSPSC issued an order that initiates a proceeding to measure and track compliance with, and develop and consider proposals to implement, the provisions of the CLCPA. The order requires, among other things, that NY’s investor-owned utilities (including CECONY and O&R) propose a methodology by December 1, 2022 to calculate total gas system-wide GHG emissions and develop a proposal by March 31, 2023 that analyzes the scale, timing, costs, risks, uncertainties and customer bill impacts of achieving significant and quantifiable reductions in carbon emissions from the use of delivered gas. The order further states that investments required to implement the CLCPA are becoming a significant driver of utility rate increases and instructs the NYSDPS to provide the NYSPSC and the public with specific cost-based information on the impact of these CLCPA investments on customers.

In February 2022, Governor Hochul signed into law an amendment to the Public Service Law that requires all NY utilities, including CECONY and O&R, to conduct a climate change vulnerability study by September 2023 and develop and file for approval by the NYSPSC a climate vulnerability and resiliency plan by November 2023 that includes 10- and 20-year outlooks for resiliency. The law authorizes utilities to recover costs through a climate resiliency cost recovery surcharge for costs incurred outside of rate proceedings and include any unrecovered costs in base rates when base rates are reset. The NY utilities are required to file an updated climate vulnerability and resiliency plan with the NYSPSC for approval at least every five years. In June 2022, the NYSPSC initiated a proceeding to implement the requirements of the legislation.

Federal and local municipal laws and agencies also regulate emissions levels and impact the CLCPA’s decarbonization pathways. In June 2022, the U.S. Supreme Court issued a decision that restricts the authority of the United States Environmental Protection Agency (EPA) ~~with respect~~ to establish greenhouse gas emission reduction measures under the ~~Newtown Creek site~~federal Clean Air Act to technology that reduces greenhouse gas emissions from fossil fuel combustion sources. Con Edison, as part of a coalition of public and private utilities, was ~~listed~~a party in ~~2010~~the case and had argued that the U.S. Supreme Court should not adopt this restrictive statutory reading of the Clean Air Act. The U.S. Supreme Court's decision could have potential cost implications for CECONY because it could limit its flexibility to use measures such as emissions trading and averaging to cost-effectively meet federal greenhouse gas emissions limits for its limited portfolio of steam and electric generating assets. The decision could also indirectly impact CECONY's, O&R's and the Clean Energy Businesses' initiatives to develop renewable energy sources. The Companies are unable to predict the impact on them as a result of the ~~EPA’s National Priorities List~~decision or any regulations that may be promulgated by the EPA in light of ~~Superfund sites.~~this U.S. Supreme Court decision.

CleanEnergyFuture

In January 2020, the NYSPSC issued an order directing energy efficiency targets and budgets for NY utilities. The ~~EPA has identified fourteen potentially responsible parties (PRPs) with respect~~order approved $2,000 million statewide for electric and gas energy efficiency programs and heat pump budgets, and associated targets, for the years 2021 through 2025 to meet the ~~site,~~NYSPSC’s goal of reducing electric use by 3 percent annually and gas use by 1.3 percent annually by 2025. The order authorized budgets for the years 2021 through 2025 for: electric energy efficiency programs of $593 million and $13 million for CECONY and O&R, respectively; gas energy efficiency programs of $235 million and $12 million for CECONY and O&R, respectively; and heat pump programs of $227 million and $15 million for CECONY and O&R, respectively. In August 2022, the NYSPSC approved CECONY’s February 2022 petition to provide $518 million of additional funding for its heat pump program by transferring previously collected but unspent funds from other budgets as follows: (i) $472 million of funds in total from the electric energy efficiency portfolio and (ii) $46 million of previously collected, unspent legacy program funds such as the Energy Efficiency Portfolio Standard and accrued interest. The order also established a budget of up to $10 million monthly of spending commitments to relaunch the heat pump program.

In July 2022, the NYSPSC issued an order directing New York utilities, including CECONY and ~~has indicated~~O&R, to implement managed electric vehicle charging programs and prescribing program and funding requirements. The order provides CECONY and O&R with up to a total of $31 million and $5.8 million, respectively, through 2025, for program implementation and administration costs. The NYSPSC authorized both CECONY and O&R to recover these costs via surcharge or other mechanisms. The order also provides CECONY and O&R with authorization to offer incentives to encourage electric vehicle charging to occur overnight and during off-peak times totaling approximately $71.8 million and $8.2 million, respectively, through 2025, that ~~it will notify~~would be recovered through the ~~company as additional PRPs are identified and notified by~~respective company’s revenue reconciliation mechanisms. In October 2022, the ~~EPA. Newtown Creek and its tributaries (collectively, Newtown Creek) form~~NJBPU approved RECO’s electric vehicle make-ready program that includes 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, transportationbudget of $7.6 million through 2026 for electric vehicle infrastructure and related program costs. The NJBPU authorized RECO to recover these costs, including 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 themfull rate of return, 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 releasedrates 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.customers

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 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 30, ~~2017:~~2022:

Project Name

Generating
Capacity
(MW AC)

Power Purchase Agreement (PPA) Term (In Years) (a)

Actual
In-Service/Acquisition Date

State

PPA Counterparty

Utility Scale

Solar

PJM assets (c)

(b)

2011/2013

NJ/PA

Various

New England assets (c)

Various

2011/2017

MA/RI

Various

California Solar

110

2012/2013

PG&E

Mesquite Solar 1

165

2013

PG&E

Copper Mountain Solar 2

150

2013/2015

PG&E

Copper Mountain Solar 3

255

2014/2015

SCPPA

California Solar 2

2014/2016

SCE/PG&E

Texas Solar 4

2014

City of San Antonio

Texas Solar 5

100

2015

City of San Antonio

Texas Solar 7

112

2016

City of San Antonio

California Solar 3

110

2016/2017

SCE/PG&E

Upton Solar

158

2017

City of Austin

California Solar 4

240

2017/2018

SCE

Copper Mountain Solar 1

2018

PG&E

Copper Mountain Solar 4 (d)

2018

SCE

Mesquite Solar 2 (d)

100

2018

SCE

Mesquite Solar 3 (d)

150

2018

WAPA (U.S. Navy)

Great Valley Solar (d)

200

2018

MCE/SMUD/PG&E/SCE

Water Strider Solar (d)

2021

VEPCO

Battle Mountain Solar/Battery Energy
Storage System (d)

101

2021

SPP

Copper Mountain Solar 5 (d)

250

2021

NPC

Other (c)

Various

Total Solar

2,676

Wind

Broken Bow II

2014

NPPD

Wind Holdings

180

Various

SD/MT

NWE/Basin Electric

Adams Rose Wind

2016

Dairyland

Other (c)

Various

Total Wind

329

Total MW (AC) in Operation

3,005

Total MW (AC) in Construction (c)

293

Total MW (AC) Utility Scale

3,298

Behind the Meter

Total MW (AC) in Operation (c)

Total MW (AC) in Construction (c)

Total MW Behind the Meter

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

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

~~(b)~~ Represents PPA contractual term or remaining term from ~~Con Edison Development’s~~the date of acquisition.

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

~~(d) Have~~ (b)Solar ~~Renewable Energy Credit~~renewable energy credit hedges are in place, in lieu of PPAs, ~~out to 2020.~~through 2025.

~~(e) Project has~~(c)Projects have generally not been pledged ~~to secure financing~~as security for ~~the project.~~project debt financing.

~~(f) All of the jointly-owned projects~~(d)Projects are ~~50 percent owned, except for Texas Solar 4 (which is 80 percent owned).~~financed with tax equity. See Note MP to the Third

Quarter Financial ~~Statements.~~Statements

~~Con Edison Development's renewable~~

Renewable Electric Generation

Renewable electric production volumes ~~generated~~from utility scale assets for the three and nine months ended September 30, ~~2017~~2022 compared with the ~~2016~~2021 period were:


	Millions of kWh
	For the Three Months Ended					For the Nine Months Ended
Description	September 30, 2022	September 30, 2021	Variation	Percent Variation		September 30, 2022	September 30, 2021	Variation	Percent Variation
Renewable electric projects
Solar	1,966	1,932	34	1.8	%	5,671	4,998	673	13.5	%
Wind	250	257	(7)	(2.7	%)	948	978	(30)	(3.1	%)
Total	2,216	2,189	27	1.2	%	6,619	5,976	643	10.8	%

Con Edison Transmission

CET Gas

~~Table~~In May 2022, the operator of ~~Contents~~

the Mountain Valley Pipeline, which is being constructed by a joint venture in which CET Gas owns a 9.7 percent interest (which is expected to be reduced to 8.0 percent based on the latest project cost estimate and CET Gas’ previous capping of its cash contributions to the joint venture), indicated it plans to pursue new permits and is now targeting a full in-service date during the second half of 2023 at a total project cost of approximately $6,600 million, excluding allowance for funds used during construction. In June 2022, the Mountain Valley Pipeline joint venture filed a request with the FERC for, and in August 2022, the FERC granted, a four-year extension of time to complete the project by October 2026. At September 30, 2022, CET Gas’ carrying value of its investment in MVP was $111 million and CET Gas’ cash contributions to the joint venture amounted to $530 million.

Millions of kWh Generated
For the Three Months Ended For the Nine Months Ended
Description September 30, 2017
September 30, 2016
Variation
Percent Variation
September 30, 2017 September 30, 2016 Variation Percent Variation
Renewable electric production projects
Solar 668
458
210
45.9 % 1,679 1,215 464 38.2 %
Wind 217
137
80
58.4 % 734 464 270 58.2 %
Total 885
595
290
48.7 % 2,413 1,679 734 43.7 %

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’~~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 N to the Third Quarter Financial Statements. Con Edison and CECONY estimate that at September 30, ~~2017,~~2022, a 10 percent increase in interest rates applicable to its variable rate debt would result in an increase in annual interest expense of ~~$2 million.~~$10 million and $7

million, respectively. Under CECONY’s current electric, gas and steam rate plans, variations in actual variable rate tax-exempt debt interest expense, including costs associated with the refinancing of the variable rate tax-exempt debt, are reconciled to levels reflected in rates.

Inflationary pressure has prompted the Federal Reserve to increase interest rates. Higher interest rates have resulted in, and are expected to continue to result in, increased interest expense on commercial paper and variable-rate debt. Higher interest rates are also expected to increase interest expense on future long-term debt issuances.

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 KN to the Third Quarter Financial Statements.

Con Edison estimates that, as of September 30, ~~2017,~~2022, a 10 percent decline in market prices would result in a decline in fair value of ~~$66~~$230 million for the derivative instruments used by the Utilities to hedge purchases of electricity and gas, of which ~~$60~~$213 million is for CECONY and $6$17 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.

The Utilities do not make any margin or profit on the electricity or gas they sell. In accordance with provisions

approved by state regulators, the Utilities generally recover from full-service customers the costs they incur for energy purchased for ~~their~~those customers, including gains and losses on certain derivative instruments used to hedge energy purchased and related costs. However, increases in electric and gas commodity prices may contribute to a slower recovery of cash from outstanding customer accounts receivable balances and increases to the allowance for uncollectible accounts, and may result in increases to write-offs of customer accounts receivable balances.

In February 2022, the NYSPSC, in response to higher customer bills, requested that CECONY enhance its efforts to mitigate customer bill volatility due to commodity price increases by reassessing its power supply billing practices and improve communications to customers regarding forecasted significant bill increases resulting from commodity price increases. In August 2022, the NYSPSC approved CECONY's March 2022 request to amend its electric tariff, effective June 1, 2022, to change how CECONY recovers the cost of electricity supplied to its full-service electric customers to reduce the likelihood of customer bill volatility by more closely aligning supply prices with CECONY's electric supply hedging positions. CECONY has also committed to provide notice to customers in cases where supply price increases could result in significantly higher bills.

In September 2022, in anticipation of commodity price volatility and potential oil supply disruption during the upcoming winter heating season, the NYSPSC requested, and CECONY and O&R have since taken, the following measures: advise their dual-fuel customers and power operators to fill their alternate fuel tanks; inspect by November 1, 2022 the alternate fuel tanks of interruptible gas customers where human needs are served to ensure they have adequate alternate supply; review their emergency plans to address alternate fuel supply disruptions of interruptible gas customers during peak gas demand; and promote bill payment assistance and energy use reduction programs.

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 months ended September 30, ~~2017~~2022 and the year ended December 31, ~~2016,~~2021, respectively, was as follows:


95% Confidence Level, One-Day Holding Period	September 30, 2022	December 31, 2021
	(Millions of Dollars)
Average for the period	$1	$1
High	2	3
Low	—	—

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

~~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~~plans. Con Edison's investment risk also relates to the investments of ~~the Clean Energy Businesses and~~ Con Edison Transmission that are accounted for under the equity method. See "Investments" in Note A to the Third Quarter Financial Statements.

The Companies’ current investment policy for pension plan assets includes investment targets of 5345 to 6355 percent ~~equities~~equity securities, 33 to 43 percent debt securities and 3510 to 4914 percent ~~fixed income and other securities.~~real estate. At September 30, ~~2017,~~2022, the pension plan investments consisted of 5847 percent equity securities, 36 percent debt securities and 4217 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 NY rate plans.

Material Contingencies

For information concerning potential liabilities arising from the Companies’ material contingencies, see “COVID-19 Regulatory Matters” and "Other Regulatory Matters" in Note B and Notes G and H to the Third 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.

~~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 the Companies’ risk factors compared to those disclosed in Item 1A of the Form 10-K.

Item 6: Exhibits

Con Edison



Exhibit ~~10.1.1~~ 10		~~Amendment to the Consolidated~~ Purchase and Sale Agreement, dated as of October 1, 2022, between Con Edison, ~~Retirement Plan.~~as Seller, and RWE Renewables Americas, LLC, as Buyer (Designated in Con Edison’s Current Report on Form 8-K, dated October 1, 2022 (File No. 1-14514) as Exhibit 10)
~~Exhibit 10.1.2~~		~~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~~		~~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~~3, 2022	By	/s/ Robert Hoglund
		Robert Hoglund Senior Vice President, Chief Financial Officer and Duly Authorized Officer

7199

~~Environmental~~
~~CO2~~Environmental		~~Carbon dioxide~~
~~GHG~~CO2		~~Greenhouse gases~~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~~Metering Infrastructure
~~COSO~~CARES Act		Coronavirus Aid, Relief, and Economic Security Act, as enacted on March 27, 2020
CLCPA		Climate Leadership and Community Protection Act
COSO		Committee of Sponsoring Organizations of the Treadway Commission
~~DER~~COVID-19		Coronavirus Disease 2019
DER		Distributed energy resources
~~EGWP~~Fitch		~~Employer Group Waiver Plan~~Fitch Ratings
~~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~~2021
LTIP		Long Term Incentive Plan
Moody’s		Moody’s Investors Service
REV		Reforming the Energy Vision
S&P		S&P Global Ratings
~~VaR~~TCJA		The federal Tax Cuts and Jobs Act of 2017, as enacted on December 22, 2017
VaR		Value-at-Risk



		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	1314
	Consolidated Statement of Comprehensive Income	1415
	Consolidated Statement of Cash Flows	1516
	Consolidated Balance Sheet	1617
	Consolidated Statement of Shareholder’s Equity	1819
	Notes to the Financial Statements (Unaudited)	1920
ITEM 2	Management’s Discussion and Analysis of Financial Condition and Results of Operations	3956
ITEM 3	Quantitative and Qualitative Disclosures About Market Risk	6997
ITEM 4	Controls and Procedures	6997
PART II—Other Information		7098
ITEM 1	Legal Proceedings	7098
ITEM 1A	Risk Factors	7098
ITEM 6	Exhibits	7098
	Signatures	7199



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



¨☐			Transition Report Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934



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~~	including Consolidated Edison Development, Inc.
~~Con Edison Energy~~	, Consolidated Edison Energy, Inc.
~~Con Edison Solutions~~	and 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
EPA		U.S. Environmental Protection Agency
FASB		Financial Accounting Standards Board
FERC		Federal Energy Regulatory Commission
~~IASB~~IRS		~~International Accounting Standards Board~~
~~IRS~~	Internal Revenue Service
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~~NYSDPS		New York State Department of Public Service
NYSERDA		New York State Energy Research and Development Authority
NYSPSC		New York State Public Service Commission
NYSRC		New York State Reliability Council, LLC
~~PJM~~OTDA		Office of Temporary and Disability Assistance
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
~~OCI~~HLBV		Hypothetical Liquidation at Book Value
NOL		Net Operating Loss
OCI		Other Comprehensive Income
VIE		Variable Interest Entity


						Three Months Ended September 30,		Nine Months Ended September 30,
	For the Three Months Ended September 30,		For the Nine Months Ended September 30,
	2017	2016	2017	2016
	(Millions of Dollars)
(Millions of Dollars)					(Millions of Dollars)	2022	2021	2022	2021
NET INCOME	$457	$497	$1,020	$1,039	NET INCOME	$619	$469	$1,427	$1,007
(INCOME) LOSS ATTRIBUTABLE TO NON-CONTROLLING INTEREST					(INCOME) LOSS ATTRIBUTABLE TO NON-CONTROLLING INTEREST	(6)	69	43	115
OTHER COMPREHENSIVE INCOME, NET OF TAXES					OTHER COMPREHENSIVE INCOME, NET OF TAXES
Pension and other postretirement benefit plan liability adjustments, net of taxes	1			2	Pension and other postretirement benefit plan liability adjustments, net of taxes	1	2	6	8
TOTAL OTHER COMPREHENSIVE INCOME, NET OF TAXES	1			2	TOTAL OTHER COMPREHENSIVE INCOME, NET OF TAXES	1	2	6	8
COMPREHENSIVE INCOME	$458	$498	$1,021	$1,041	COMPREHENSIVE INCOME	$614	$540	$1,476	$1,130


(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
	Shares	Amount			Shares	Amount






















































































BALANCE AS OF DECEMBER 31, 2020	342	$36	$8,808	$11,178	23	$(1,038)	$(112)	$(25)	$218	$19,065
Net income				419					1	420
Common stock dividends ($0.775 per share)				(265)						(265)

Issuance of common shares for stock plans			28							28
Other comprehensive income								4		4
Distributions to noncontrolling interests									(3)	(3)
Net proceeds from sale of equity interest									33	33
BALANCE AS OF MARCH 31, 2021	342	$36	$8,836	$11,332	23	$(1,038)	$(112)	$(21)	$249	$19,282
Net income (loss)				165					(47)	118
Common stock dividends ($0.775 per share)				(266)						(266)
Issuance of common shares - public offering	11	1	785				(11)			775
Issuance of common shares for stock plans			34							34
Other comprehensive income								2		2
Distributions to noncontrolling interests									(4)	(4)
Net proceeds from sale of equity interest									112	112
BALANCE AS OF JUNE 30, 2021	353	$37	$9,655	$11,231	23	$(1,038)	$(123)	$(19)	$310	$20,053
Net income (loss)				538					(69)	469
Common stock dividends ($0.775 per share)				(274)						(274)
Issuance of common shares - public offering	1									—
Issuance of common shares for stock plans			28							28
Other comprehensive income								2		2
Distributions to noncontrolling interests									(8)	(8)
Net proceeds from sale of equity interest									107	107
BALANCE AS OF SEPTEMBER 30, 2021	354	$37	$9,683	$11,495	23	$(1,038)	$(123)	$(17)	$340	$20,377

BALANCE AS OF DECEMBER 31, 2021	354	$37	$9,710	$11,445	23	$(1,038)	$(122)	$5	$299	$20,336
Net income (loss)				602					(48)	554
Common stock dividends ($0.79 per share)				(280)						(280)
Issuance of common shares - public offering							1			1
Issuance of common shares for stock plans			18							18

Distributions to noncontrolling interests									(6)	(6)

BALANCE AS OF MARCH 31, 2022	354	$37	$9,728	$11,767	23	$(1,038)	$(121)	$5	$245	$20,623
Net income (loss)				255					(1)	254
Common stock dividends ($0.79 per share)				(280)						(280)

Issuance of common shares for stock plans			29							29



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



	For the Three Months Ended September 30, 2017						For the Nine Months Ended September 30, 2017						At September 30, 2017
(Millions of Dollars, except percentages)	Operating Revenues			Net Income			Operating Revenues			Net Income			Assets
CECONY	$2,799	87	%	$401	88	%	$7,948	88	%	$883	87	%	$41,647	85	%
O&R	234	7		22	5		667	7		53	5		2,832	6
Total Utilities	3,033	94		423	93		8,615	95		936	92		44,479	91
Clean Energy Businesses (a)	177	6		26	5		460	5		54	5		2,811	6
Con Edison Transmission	1	—		9	2		1	—		25	2		1,210	2
Other (b)	—	—		(1)	—		(4)	—		5	1		746	1
Total Con Edison	$3,211	100	%	$457	100	%	$9,072	100	%	$1,020	100	%	$49,246	100	%



	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)



	For the Three Months Ended
(Millions of Dollars)	September 30, 2017	September 30, 2016	Variation
Operating revenues	$2,469	$2,557	$(88)
Purchased power	393	486	(93)
Fuel	24	21	3
Other operations and maintenance	547	578	(31)
Depreciation and amortization	232	217	15
Taxes, other than income taxes	418	414	4
Electric operating income	$855	$841	$14



	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



	Common Equity Ratio (Percent of total capitalization)
	September 30, 2017	December 31, 2016
Con Edison	50.8	49.3
CECONY	50.9	49.5



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



	Millions of kWh Generated
	For the Three Months Ended					For the Nine Months Ended
Description	September 30, 2017	September 30, 2016	Variation	Percent Variation		September 30, 2017	September 30, 2016	Variation	Percent Variation
Renewable electric production projects
Solar	668	458	210	45.9	%	1,679	1,215	464	38.2	%
Wind	217	137	80	58.4	%	734	464	270	58.2	%
Total	885	595	290	48.7	%	2,413	1,679	734	43.7	%