0001047862ed:ConsolidatedEdisonCompanyofNewYorkInc.Membered:RegulatoryAssetsCurrentMembersrt:SubsidiariesMember2023-01-012023-09-30
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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-Q
x☒Quarterly Report Pursuant To Section 13 or 15(d) of the Securities Exchange Act of 1934
FOR THE QUARTERLY PERIOD ENDED SEPTEMBERSeptember 30, 20172023
OR
¨☐Transition Report Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934
For the transition period from to
Commission

File Number
Exact name of registrant as specified in its charter

and principal executive office address and telephone number
State of

Incorporation
I.R.S. Employer

ID. Number
1-14514Consolidated Edison, Inc.New York13-3965100
4 Irving Place,New York,New York 1000310003
(212) 460-4600460-4600
1-12171-01217Consolidated Edison Company of New York, Inc.New York13-5009340
4 Irving Place,New York,New York10003
(212)460-4600

Securities Registered Pursuant to Section 12(b) of the Act:
Title of each classTrading SymbolName of each exchange on which registered
Consolidated Edison, Inc.EDNew York New York 10003Stock Exchange
Common Shares ($.10 par value)(212) 460-4600

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.
Consolidated Edison, Inc. (Con Edison)Yes☒
Yesx
No¨☐
Consolidated Edison Company of New York, Inc. (CECONY)Yes☒
Yesx
No¨☐
Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files).
Con EdisonYes☒
Yesx
No¨☐
CECONYYes☒
Yesx
No¨☐
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer”, “accelerated filer,” “smaller reporting company,” and "emerging growth company" in Rule 12b-2 of the Exchange Act.
Con Edison
Large accelerated filer☒
Accelerated filer☐

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

1                             


If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ¨
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).
Con Edison
Yes¨
☐
Nox☒
CECONY
Yes¨
☐
Nox☒




As of October 31, 2017,2023, Con Edison had outstanding 310,068,797345,219,779 Common Shares ($.10 par value). All of the outstanding common equity of CECONY is held by Con Edison.




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








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Glossary of Terms
 
The following is a glossary of abbreviations or acronyms that are used in the Companies’ SEC reports:
 
Con Edison Companies
Con EdisonConsolidated Edison, Inc.
CECONYConsolidated Edison Company of New York, Inc.
Clean Energy BusinessesCon Edison Clean Energy Businesses, Inc., together with its subsidiaries
Con Edison DevelopmentConsolidated Edison Development, Inc.
Con Edison EnergyConsolidated Edison Energy, Inc.
Con Edison SolutionsConsolidated Edison Solutions, Inc.
Con Edison TransmissionCon Edison Transmission, Inc., together with its subsidiaries
CET ElectricO&RConsolidated Edison Transmission, LLC
CET GasCon Edison Gas Pipeline and Storage, LLC
O&ROrange and Rockland Utilities, Inc.
RECORockland Electric Company
The CompaniesCon Edison and CECONY
The UtilitiesCECONY and O&R
Regulatory Agencies, Government Agencies and Other Organizations
EPAU.S. Environmental Protection Agency
FASBFinancial Accounting Standards Board
FERCFederal Energy Regulatory Commission
IASBIRSInternational Accounting Standards Board
IRSInternal Revenue Service
NJBPUNew Jersey Board of Public Utilities
NJDEPNew Jersey Department of Environmental Protection
NYISONew York Independent System Operator
NYPANew York Power Authority
NYSDECNew York State Department of Environmental Conservation
NYSERDANYSDPSNew York State Energy Research and Development AuthorityDepartment of Public Service
NYSPSC
NYSPSCNew York State Public Service Commission
NYSRCNew York State Reliability Council, LLC
PJMOTDAPJM Interconnection LLCOffice of Temporary and Disability Assistance
SEC
SECU.S. Securities and Exchange Commission
Accounting
AFUDCAllowance for funds used during construction
ASUAccounting Standards Update
GAAPGenerally Accepted Accounting Principles in the United States of America
OCIHLBVHypothetical Liquidation at Book Value
NOLNet Operating Loss
OCIOther Comprehensive Income
VIEVariable Interest Entity


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Environmental
EnvironmentalGHGGreenhouse gases
CO2Carbon dioxide
GHGGreenhouse gases
MGP SitesManufactured gas plant sites
PCBsSuperfundPolychlorinated biphenyls
PRPPotentially responsible party
RGGIRegional Greenhouse Gas Initiative
SuperfundFederal Comprehensive Environmental Response, Compensation and Liability Act of 1980 and similar state statutes
Units of Measure
ACAlternating current
BcfBillion cubic feet
DtDekatherms
kVKilovolt
kWhKilowatt-hour
MDtThousand dekatherms
MMlbMillion pounds
MVAMegavolt ampere
MWMegawatt or thousand kilowatts
MWhMegawatt hour
Other
AMIAdvanced metering infrastructure
COSOCommittee of Sponsoring Organizations of the Treadway Commission
DERDistributed energy resources
EGWPEmployer Group Waiver Plan
FitchCOVID-19Fitch RatingsCoronavirus Disease 2019
First Quarter Form 10-QThe Companies' combined Quarterly Report on Form 10-Q for the quarterly period ended March 31 of the current year
Second Quarter Form 10-QThe Companies' combined Quarterly Report on Form 10-Q for the quarterly period ended June 30 of the current year
Third Quarter Form 10-QThe Companies' combined Quarterly Report on Form 10-Q for the quarterly period ended September 30 of the current year
Form 10-KThe Companies’ combined Annual Report on Form 10-K for the year ended December 31, 2016
LTIPLong Term Incentive Plan
Moody’sMoody’s Investors Service
REVReforming the Energy Vision
S&PS&P Global Ratings
VaRValue-at-Risk
TCJAThe federal Tax Cuts and Jobs Act of 2017, as enacted on December 22, 2017





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TABLE OF CONTENTS
 
PAGE
ITEM 1Financial Statements (Unaudited)
Con Edison
Consolidated Income Statement
76
Consolidated Statement of Comprehensive Income
87
Consolidated Statement of Cash Flows
98
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
1920
ITEM 2
3958
ITEM 3
6992
ITEM 4
6992
7094
ITEM 1
7094
ITEM 1A
7094
ITEM 6
7094
7195
 




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FORWARD-LOOKING STATEMENTS
 
This report includescontains forward-looking statements that are intended to qualify for the safe-harbor provisions of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. Forward-looking statements are statements of future expectationexpectations and not facts. Words such as “forecasts,” “expects,” “estimates,” “anticipates,” “intends,” “believes,” “plans,” “will”“will,” “target,” “guidance,” “potential,” “consider” and similar expressions identify forward-looking statements. Forward-lookingThe forward-looking statements are based onreflect information available and assumptions at the time the statements are made, and accordingly speak only as of that time. Actual results or developments might differ materially from those included in the forward-looking statements because of various factors such as those identified in reports the Companies have filed with the Securities and Exchange Commission, including, but not limited to:
•the Companies are extensively regulated and are subject to substantial penalties;
•the Utilities’ rate plans may not provide a reasonable return;
•the Companies may be adversely affected by changes to the Utilities’ rate plans;
the intentional misconduct of employees or contractors could adversely affect the Companies;
•the failure of, or damage to, the Companies’ facilities could adversely affect the Companies;
•a cyber attack could adversely affect the Companies;
•the failure of processes and systems and the performance and failure to retain and attract employees and contractors could adversely affect the Companies;
•the Companies are exposed to risks from the environmental consequences of their operations;operations, including increased costs related to climate change;
a disruption in the wholesale energy markets or failure by an energy supplier could adversely affect the Companies;
the Companies have substantial unfunded pension and other postretirement benefit liabilities;
•Con Edison’s ability to pay dividends or interest depends on dividends from its subsidiaries;
•changes to tax laws could adversely affect the Companies;
•the Companies require access to capital markets to satisfy funding requirements;
changes to tax laws•a disruption in the wholesale energy markets, increased commodity costs or failure by an energy supplier or customer could adversely affect the Companies;
•the Companies may have substantial unfunded pension and other postretirement benefit liabilities;
•the Companies face risks related to health epidemics and other outbreaks;
•the Companies’ strategies may not be effective to address changes in the external business environment;
•the Companies face risks related to supply chain disruption and inflation; and
•the Companies also face other risks that are beyond their control.

The Companies assume no obligation to update or revise any forward-looking statements, whether as a result of new information, future events or otherwise, except as required by law.








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ConsolidatedEdison, Inc.
CONSOLIDATED INCOME STATEMENT (UNAUDITED)
For the Three Months Ended September 30,For the Nine Months Ended September 30,
For the Three Months Ended September 30,For the Nine Months Ended September 30,
2017
201620172016
(Millions of Dollars/ Except Per Share Data)
(Millions of Dollars/Except Share Data)(Millions of Dollars/Except Share Data)2023202220232022
OPERATING REVENUES  OPERATING REVENUES
Electric$2,675$2,769$6,573$6,717Electric$3,469$3,328$8,309$7,994
Gas2962351,5931,246Gas3534532,3542,345
Steam6263448406Steam4958425444
Non-utility178350458999Non-utility1326131856
TOTAL OPERATING REVENUES3,2113,4179,0729,368TOTAL OPERATING REVENUES3,8724,16511,21911,639
OPERATING EXPENSES  OPERATING EXPENSES
Purchased power4607981,2532,047Purchased power7967311,9931,851
Fuel3029169133Fuel3459241255
Gas purchased for resale11581584320Gas purchased for resale73185640833
Other operations and maintenance8528402,4062,447Other operations and maintenance9339992,6782,785
Depreciation and amortization337305998905Depreciation and amortization5125251,5061,593
Taxes, other than income taxes5445281,5971,523Taxes, other than income taxes8017772,2822,248
TOTAL OPERATING EXPENSES2,3382,5817,0077,375TOTAL OPERATING EXPENSES3,1493,2769,3409,565
Gain on sale of retail electric supply business and solar electric production project—
1041104
Gain (Loss) on sale of the Clean Energy BusinessesGain (Loss) on sale of the Clean Energy Businesses(1)—866—
OPERATING INCOME8739402,0662,097OPERATING INCOME7228892,7452,074
OTHER INCOME (DEDUCTIONS)  OTHER INCOME (DEDUCTIONS)
Investment income20205927Investment income852315
Other income203143Other income210101625296
Allowance for equity funds used during construction3387Allowance for equity funds used during construction742015
Other deductions(4)(5)(12)(16)Other deductions(18)(21)(57)
TOTAL OTHER INCOME39499861TOTAL OTHER INCOME20789611269
INCOME BEFORE INTEREST AND INCOME TAX EXPENSE9129892,1642,158INCOME BEFORE INTEREST AND INCOME TAX EXPENSE9299783,3562,343
INTEREST EXPENSE  
INTEREST EXPENSE (INCOME)INTEREST EXPENSE (INCOME)
Interest on long-term debt183174539504Interest on long-term debt234246719728
Other interest451117
Other interest expense (income)Other interest expense (income)39(32)78(119)
Allowance for borrowed funds used during construction(2)(1)(5)(4)Allowance for borrowed funds used during construction(14)(15)(39)(23)
NET INTEREST EXPENSE185178545517NET INTEREST EXPENSE259199758586
INCOME BEFORE INCOME TAX EXPENSE7278111,6191,641INCOME BEFORE INCOME TAX EXPENSE6707792,5981,757
INCOME TAX EXPENSE270314599602INCOME TAX EXPENSE144160416330
NET INCOME$457$497$1,020$1,039NET INCOME5266192,1821,427
Income (Loss) attributable to non-controlling interestIncome (Loss) attributable to non-controlling interest—6(3)(43)
NET INCOME FOR COMMON STOCKNET INCOME FOR COMMON STOCK$526$613$2,185$1,470
Net income per common share—basic$1.48$1.63$3.33$3.47Net income per common share—basic$1.53$1.73$6.27$4.15
Net income per common share—diluted$1.48$1.62$3.31$3.46Net income per common share—diluted$1.52$1.72$6.24$4.13
DIVIDENDS DECLARED PER COMMON SHARE$0.69$0.67$2.07$2.01
AVERAGE NUMBER OF SHARES OUTSTANDING—BASIC (IN MILLIONS)307.8304.5306.2299.1AVERAGE NUMBER OF SHARES OUTSTANDING—BASIC (IN MILLIONS)345.0354.6348.4354.4
AVERAGE NUMBER OF SHARES OUTSTANDING—DILUTED (IN MILLIONS)309.3305.9307.7300.5AVERAGE NUMBER OF SHARES OUTSTANDING—DILUTED (IN MILLIONS)346.5355.9349.9355.7
The accompanying notes are an integral part of these financial statements.




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Consolidated Edison, Inc.
CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME (UNAUDITED)
Three Months Ended September 30,Nine Months Ended September 30,
For the Three Months Ended September 30,For the Nine Months Ended September 30,
2017201620172016
(Millions of Dollars)
(Millions of Dollars)(Millions of Dollars)2023202220232022
NET INCOME$457$497$1,020$1,039NET INCOME$526$619$2,182$1,427
(INCOME) LOSS ATTRIBUTABLE TO NON-CONTROLLING INTEREST(INCOME) LOSS ATTRIBUTABLE TO NON-CONTROLLING INTEREST—(6)343
OTHER COMPREHENSIVE INCOME, NET OF TAXES OTHER COMPREHENSIVE INCOME, NET OF TAXES
Pension and other postretirement benefit plan liability adjustments, net of taxes12Pension and other postretirement benefit plan liability adjustments, net of taxes—1 36 
TOTAL OTHER COMPREHENSIVE INCOME, NET OF TAXES12TOTAL OTHER COMPREHENSIVE INCOME, NET OF TAXES—1 36 
COMPREHENSIVE INCOME$458$498$1,021$1,041COMPREHENSIVE INCOME$526$614$2,188$1,476
The accompanying notes are an integral part of these financial statements.




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Consolidated Edison, Inc.
CONSOLIDATED STATEMENT OF CASH FLOWS (UNAUDITED)
  
For the Nine Months Ended September 30,
(Millions of Dollars)20232022
OPERATING ACTIVITIES
Net income$2,182$1,427
PRINCIPAL NON-CASH CHARGES/(CREDITS) TO INCOME
Depreciation and amortization1,5061,593
Deferred income taxes99317
Rate case amortization and accruals6755
Net derivative gains11(161)
Pre-tax gain on sale of the Clean Energy Businesses(866)— 
Other non-cash items, net(87)180
CHANGES IN ASSETS AND LIABILITIES
Accounts receivable – customers179(140)
Allowance for uncollectible accounts – customers(46)(12)
Materials and supplies, including fuel oil and gas in storage53(96)
Revenue decoupling mechanism receivable(130)23
Other receivables and other current assets144(120)
Unbilled revenue and net unbilled revenue deferrals78(40)
Prepayments(841)(588)
Accounts payable(573)61
Pensions and retiree benefits obligations, net(161)105
Pensions and retiree benefits contributions(30)(34)
Accrued taxes(1)(10)
Accrued interest108 126
Distributions from equity investments2314
Deferred charges, noncurrent assets, leases, net and other regulatory assets(613)(550)
Deferred credits, noncurrent liabilities and other regulatory liabilities(31)468
Other current liabilities110—
NET CASH FLOWS FROM OPERATING ACTIVITIES1,1812,618
INVESTING ACTIVITIES
Utility construction expenditures(3,097)(2,844)
Cost of removal less salvage(289)(247)
Non-utility construction expenditures(141)(210)
Investments in electric and gas transmission projects(48)(48)
Proceeds from sale of the Clean Energy Businesses, net of cash and cash equivalents sold3,927—
Other investing activities—3 
NET CASH FLOWS FROM (USED IN) INVESTING ACTIVITIES352(3,346)
FINANCING ACTIVITIES
Net issuance (retirement) of short-term debt(1,160)1,003
Issuance of long-term debt500— 
Retirement of long-term debt(60)(383)
Debt issuance costs(5)—
Common stock dividends(829)(812)
Issuance of common shares for stock plans41 43
Repurchase of common shares(1,000)—
Distribution to noncontrolling interest(4)(28)
NET CASH FLOWS USED IN FINANCING ACTIVITIES(2,517)(177)
CASH, TEMPORARY CASH INVESTMENTS, AND RESTRICTED CASH:
NET CHANGE FOR THE PERIOD(984)(905)
BALANCE AT BEGINNING OF PERIOD1,5301,146
BALANCE AT END OF PERIOD$546$241
LESS: CASH BALANCES HELD FOR SALE6— 
BALANCE AT END OF PERIOD EXCLUDING HELD FOR SALE$540$241
SUPPLEMENTAL DISCLOSURE OF CASH INFORMATION
Cash paid/(received) during the period for:
Interest$624$583




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For the Nine Months Ended September 30,
  
2017
2016
 (Millions of Dollars)
OPERATING ACTIVITIES  
Net income$1,020$1,039
PRINCIPAL NON-CASH CHARGES/(CREDITS) TO INCOME  
Depreciation and amortization998905
Deferred income taxes626524
Rate case amortization and accruals(93)(157)
Common equity component of allowance for funds used during construction(8)(7)
Net derivative gains(4)(7)
Gain on sale of retail electric supply business and solar electric production project(1)(104)
Other non-cash items, net(1)99
CHANGES IN ASSETS AND LIABILITIES  
Accounts receivable – customers1(138)
Materials and supplies, including fuel oil and gas in storage215
Other receivables and other current assets(39)90
Income taxes receivable33100
Prepayments(433)(403)
Accounts payable(54)142
Pensions and retiree benefits obligations, net305464
Pensions and retiree benefits contributions(462)(510)
Accrued taxes(21)(21)
Accrued interest5966
Superfund and environmental remediation costs, net(9)68
Distributions from equity investments8745
System benefit charge194193
Deferred charges, noncurrent assets and other regulatory assets(18)(104)
Deferred credits and other regulatory liabilities(40)116
Other current and noncurrent liabilities85(79)
NET CASH FLOWS FROM OPERATING ACTIVITIES2,2272,336
INVESTING ACTIVITIES  
Utility construction expenditures(2,148)(2,057)
Cost of removal less salvage(185)(149)
Non-utility construction expenditures(288)(436)
Investments in electric and gas transmission projects(29)(1,040)
Investments in/acquisitions of renewable electric production projects(1)(241)
Proceeds from the transfer of assets to NY Transco—
122
Proceeds from sale of assets34250
Restricted cash13(21)
Other investing activities32(145)
NET CASH FLOWS USED IN INVESTING ACTIVITIES(2,572)(3,717)
FINANCING ACTIVITIES  
Net payment of short-term debt(698)(928)
Issuance of long-term debt9971,765
Retirement of long-term debt(429)(407)
Debt issuance costs(12)(16)
Common stock dividends(600)(570)
Issuance of common shares - public offering343702
Issuance of common shares for stock plans3738
Distribution to noncontrolling interest—
(1)
NET CASH FLOWS (USED IN)/FROM FINANCING ACTIVITIES(362)583
CASH AND TEMPORARY CASH INVESTMENTS:  
NET CHANGE FOR THE PERIOD(707)(798)
BALANCE AT BEGINNING OF PERIOD776944
BALANCE AT END OF PERIOD$69$146
LESS: CHANGE IN CASH BALANCES HELD FOR SALE—
(4)
BALANCE AT END OF PERIOD EXCLUDING HELD FOR SALE$69$150
SUPPLEMENTAL DISCLOSURE OF CASH INFORMATION  
Cash paid/(received) during the period for:  
Interest$479$437
Income taxes$(34)$(144)
SUPPLEMENTAL DISCLOSURE OF NON-CASH INFORMATION  
Construction expenditures in accounts payable$352$242
Issuance of common shares for dividend reinvestment$35$35
Income taxes$360$30
SUPPLEMENTAL DISCLOSURE OF NON-CASH INFORMATION
Construction expenditures in accounts payable$419$486
Issuance of common shares for dividend reinvestment$20$28
Software licenses acquired but unpaid as of end of period$—$2
Equipment acquired but unpaid as of end of period$11$17

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

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Consolidated Edison, Inc.
CONSOLIDATED BALANCE SHEET (UNAUDITED)
September 30,
2017		December 31,
2016
(Millions of Dollars)
(Millions of Dollars)(Millions of Dollars)September 30,
2023		December 31,
2022
ASSETS ASSETS
CURRENT ASSETS CURRENT ASSETS
Cash and temporary cash investments$69$776Cash and temporary cash investments$539$1,282
Accounts receivable – customers, less allowance for uncollectible accounts of $63 and $69 in 2017 and 2016, respectively1,1111,106
Other receivables, less allowance for uncollectible accounts of $8 and $14 in 2017 and 2016, respectively181195
Income taxes receivable4679
Accounts receivable – customers, net allowance for uncollectible accounts of $276 and $322 in 2023 and 2022, respectivelyAccounts receivable – customers, net allowance for uncollectible accounts of $276 and $322 in 2023 and 2022, respectively2,0482,192
Other receivables, net allowance for uncollectible accounts of $31 and $10 in 2023 and 2022, respectivelyOther receivables, net allowance for uncollectible accounts of $31 and $10 in 2023 and 2022, respectively418164
Taxes receivableTaxes receivable310
Accrued unbilled revenue411447Accrued unbilled revenue547702
Fuel oil, gas in storage, materials and supplies, at average cost337339Fuel oil, gas in storage, materials and supplies, at average cost455492
Prepayments592159Prepayments1,110264
Regulatory assets109100Regulatory assets180305
Restricted cash4154Restricted cash1— 
Revenue decoupling mechanism receivableRevenue decoupling mechanism receivable294164
Fair value of derivative assetsFair value of derivative assets6259
Assets held for saleAssets held for sale1637,162
Other current assets199151Other current assets119176
TOTAL CURRENT ASSETS3,0963,406TOTAL CURRENT ASSETS5,93912,972
INVESTMENTS1,9771,921INVESTMENTS933841
UTILITY PLANT, AT ORIGINAL COST UTILITY PLANT, AT ORIGINAL COST
Electric28,59527,747Electric38,28336,819
Gas7,9727,524Gas13,98613,378
Steam2,4582,421Steam3,0292,935
General2,8912,719General4,3404,205
TOTAL41,91640,411TOTAL59,63857,337
Less: Accumulated depreciation8,9048,541Less: Accumulated depreciation13,86513,069
Net33,01231,870Net45,77344,268
Construction work in progress1,4151,175Construction work in progress2,7482,484
NET UTILITY PLANT34,42733,045NET UTILITY PLANT48,52146,752
NON-UTILITY PLANT NON-UTILITY PLANT
Non-utility property, less accumulated depreciation of $185 and $140 in 2017 and 2016, respectively1,6861,482
Non-utility property, net accumulated depreciation of $24 and $23 in 2023 and 2022, respectivelyNon-utility property, net accumulated depreciation of $24 and $23 in 2023 and 2022, respectively13
Construction work in progress615689Construction work in progress1
NET PLANT36,72835,216NET PLANT48,53546,766
OTHER NONCURRENT ASSETS OTHER NONCURRENT ASSETS
Goodwill428Goodwill408
Intangible assets, less accumulated amortization of $12 and $6 in 2017 and 2016, respectively114124
Regulatory assets6,7697,024Regulatory assets4,3343,974
Pension and retiree benefitsPension and retiree benefits3,3843,269
Operating lease right-of-use assetOperating lease right-of-use asset545568
Fair value of derivative assetsFair value of derivative assets2685
Other deferred charges and noncurrent assets134136Other deferred charges and noncurrent assets301182
TOTAL OTHER NONCURRENT ASSETS7,4457,712TOTAL OTHER NONCURRENT ASSETS8,9988,486
TOTAL ASSETS$49,246$48,255TOTAL ASSETS$64,405$69,065
The accompanying notes are an integral part of these financial statements.
 





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Consolidated Edison, Inc.
CONSOLIDATED BALANCE SHEET (UNAUDITED)
 
 
September 30,
2017		December 31,
2016
(Millions of Dollars)
(Millions of Dollars)(Millions of Dollars)September 30,
2023		December 31,
2022
LIABILITIES AND SHAREHOLDERS’ EQUITY LIABILITIES AND SHAREHOLDERS’ EQUITY
CURRENT LIABILITIES CURRENT LIABILITIES
Long-term debt due within one year$687$39Long-term debt due within one year$650$649
Term loanTerm loan—400
Notes payable3561,054Notes payable1,8802,640
Accounts payable1,0571,147Accounts payable1,3061,955
Customer deposits344352Customer deposits401358
Accrued taxes4364Accrued taxes85102
Accrued interest209150Accrued interest283153
Accrued wages105101Accrued wages124116
Fair value of derivative liabilities7077Fair value of derivative liabilities8642
Regulatory liabilities58128Regulatory liabilities189374
System benefit charge628434System benefit charge439390
Operating lease liabilitiesOperating lease liabilities114103
Liabilities held for saleLiabilities held for sale763,610
Other current liabilities358297Other current liabilities417444
TOTAL CURRENT LIABILITIES3,9153,843TOTAL CURRENT LIABILITIES6,05011,336
NONCURRENT LIABILITIES NONCURRENT LIABILITIES
Provision for injuries and damages164160Provision for injuries and damages182181
Pensions and retiree benefits1,4431,847Pensions and retiree benefits638577
Superfund and other environmental costs745753Superfund and other environmental costs996997
Asset retirement obligations256246Asset retirement obligations513500
Fair value of derivative liabilities8340Fair value of derivative liabilities6813
Deferred income taxes and unamortized investment tax credits10,74410,205Deferred income taxes and unamortized investment tax credits7,9927,641
Operating lease liabilitiesOperating lease liabilities477476
Regulatory liabilities1,8731,905Regulatory liabilities5,4016,027
Other deferred credits and noncurrent liabilities262215Other deferred credits and noncurrent liabilities360281
TOTAL NONCURRENT LIABILITIES15,57015,371TOTAL NONCURRENT LIABILITIES16,62716,693
LONG-TERM DEBT14,65114,735LONG-TERM DEBT20,65020,147
COMMITMENTS, CONTINGENCIES, AND GUARANTEES (Note B, Note G, and Note H)COMMITMENTS, CONTINGENCIES, AND GUARANTEES (Note B, Note G, and Note H)
EQUITY EQUITY
Common shareholders’ equity15,10214,298Common shareholders’ equity21,07820,687
Noncontrolling interest8Noncontrolling interest—202
TOTAL EQUITY (See Statement of Equity)15,11014,306TOTAL EQUITY (See Statement of Equity)21,07820,889
TOTAL LIABILITIES AND EQUITY$49,246$48,255TOTAL LIABILITIES AND EQUITY$64,405$69,065
The accompanying notes are an integral part of these financial statements.




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Consolidated Edison, Inc.
CONSOLIDATED STATEMENT OF EQUITY (UNAUDITED)
(In Millions, except for dividends per share)Common StockAdditional
Paid-In
Capital		Retained
Earnings		Treasury StockCapital
Stock
Expense		Accumulated
Other
Comprehensive
Income/(Loss)		Non-
controlling
Interest		Total
SharesAmountSharesAmount
BALANCE AS OF DECEMBER 31, 2021354$37$9,710$11,44523$(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 offering11
Issuance of common shares for stock plans1818
Distributions to noncontrolling interests(6)(6)
BALANCE AS OF MARCH 31, 2022354$37$9,728$11,76723$(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 plans2929
Other comprehensive income55
Distributions to noncontrolling interests(10)(10)
BALANCE AS OF JUNE 30, 2022354$37$9,757$11,74223$(1,038)$(121)$10$234$20,621
Net income6136619
Common stock dividends ($0.79 per share)(280)(280)
Issuance of common shares - public offering1—
Issuance of common shares for stock plans2727
Other comprehensive income11
Distributions to noncontrolling interests(12)(12)
BALANCE AS OF SEPTEMBER 30, 2022355$37$9,784$12,07523$(1,038)$(121)$11$228$20,976
BALANCE AS OF DECEMBER 31, 2022355$37$9,803$11,98523$(1,038)$(122)$22$202$20,889
Net income (loss)1,433(3)1,430
Common stock dividends ($0.81 per share)(288)(288)
Issuance of common shares for stock plans1515
Common stock repurchases(9)(200)9(808)(1,008)
Other comprehensive income44
Distributions to noncontrolling interests(4)(4)
Disposal of the Clean Energy Businesses(195)(195)
BALANCE AS OF MARCH 31, 2023346$37$9,618$13,13032$(1,846)$(122)$26$—$20,843
Net income226226
Common stock dividends ($0.81 per share)(281)(281)
Issuance of common shares for stock plans2020
Common stock repurchases(2)1692(171)(2)
Other comprehensive loss(1)(1)
BALANCE AS OF JUNE 30, 2023344$37$9,807$13,07534$(2,017)$(122)$25$—$20,805
Net income526526




12                             

(In Millions)Common StockAdditional
Paid-In
Capital		Retained
Earnings		Treasury StockCapital
Stock
Expense		Accumulated
Other
Comprehensive
Income/(Loss)		Noncontrolling
Interest		Total
SharesAmountSharesAmount
BALANCE AS OF
DECEMBER 31, 2015		293$32$5,030$9,12323$(1,038)$(61)$(34)$9$13,061
Net income   310     310
Common stock dividends   (197)     (197)
Issuance of common shares for stock plans1 28      28
Other comprehensive income       
 —
Noncontrolling interest        (1)(1)
BALANCE AS OF
MARCH 31, 2016		294$32$5,058$9,23623$(1,038)$(61)$(34)$8$13,201
Net income   232     232
Common stock dividends   (204)     (204)
Issuance of common shares - public offering101723   (22)  702
Issuance of common shares for stock plans
 26      26
Other comprehensive income       1 1
BALANCE AS OF
JUNE 30, 2016		304$33$5,807$9,26423$(1,038)$(83)$(33)$8$13,958
Net income   497     497
Common stock dividends   (204)     (204)
Issuance of common shares for stock plans1
 23      23
Other comprehensive income       1 1
BALANCE AS OF
SEPTEMBER 30, 2016		305$33$5,830$9,55723$(1,038)$(83)$(32)$8$14,275
           
BALANCE AS OF DECEMBER 31, 2016305$33$5,854$9,55923$(1,038)$(83)$(27)$8$14,306
Net income   388     388
Common stock dividends   (211)     (211)
Issuance of common shares for stock plans  24      24
Other comprehensive loss       (1) (1)
BALANCE AS OF
MARCH 31, 2017		305$33$5,878$9,73623$(1,038)$(83)$(28)$8$14,506
Net income   175     175
Common stock dividends   (210)     (210)
Issuance of common shares for stock plans1 26      26
Other comprehensive income       1 1
BALANCE AS OF
JUNE 30, 2017		306$33$5,904$9,70123$(1,038)$(83)$(27)$8$14,498
Net income   457     457
Common stock dividends   (214)     (214)
Issuance of common shares - public offering4
345   (2)  343
Issuance of common shares for stock plans

25      25
Other comprehensive income       1 1
BALANCE AS OF
SEPTEMBER 30, 2017		310$33$6,274$9,94423$(1,038)$(85)$(26)$8$15,110
Common stock dividends ($0.81 per share)(280)(280)
Issuance of common shares for stock plans12727
BALANCE AS OF SEPTEMBER 30, 2023345$37$9,834$13,32134$(2,017)$(122)$25$—$21,078
The accompanying notes are an integral part of these financial statements.




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Consolidated Edison Company of New York, Inc.
CONSOLIDATED INCOME STATEMENT (UNAUDITED)
For the Three Months Ended September 30,For the Nine Months Ended September 30,
For the Three Months Ended September 30,For the Nine Months Ended September 30,
2017
201620172016
(Millions of Dollars)
(Millions of Dollars)(Millions of Dollars)2023202220232022
OPERATING REVENUES  OPERATING REVENUES
Electric$2,469$2,557$6,079$6,222Electric$3,223$3,077$7,722$7,401
Gas2682081,4211,113Gas3184142,1402,127
Steam6263448406Steam4958425444
TOTAL OPERATING REVENUES2,7992,8287,9487,741TOTAL OPERATING REVENUES3,5903,54910,2879,972
OPERATING EXPENSES  OPERATING EXPENSES
Purchased power4004951,1101,216Purchased power7196431,8021,639
Fuel3029169133Fuel3459241255
Gas purchased for resale5834372217Gas purchased for resale62113518582
Other operations and maintenance6917241,9922,105Other operations and maintenance8348072,3412,267
Depreciation and amortization300278891825Depreciation and amortization4854411,4281,341
Taxes, other than income taxes5205021,5231,446Taxes, other than income taxes7777482,2072,159
TOTAL OPERATING EXPENSES1,9992,0626,0575,942TOTAL OPERATING EXPENSES2,9112,8118,5378,243
OPERATING INCOME8007661,8911,799OPERATING INCOME6797381,7501,729
OTHER INCOME (DEDUCTIONS)  OTHER INCOME (DEDUCTIONS)
Investment and other income2496Investment and other income19193566280
Allowance for equity funds used during construction3276Allowance for equity funds used during construction641713
Other deductions(5)(4)(10)Other deductions
(13)(16)(33)(48)
TOTAL OTHER INCOME—
262TOTAL OTHER INCOME18481550245
INCOME BEFORE INTEREST AND INCOME TAX EXPENSE8007681,8971,801INCOME BEFORE INTEREST AND INCOME TAX EXPENSE8638192,3001,974
INTEREST EXPENSE  
INTEREST EXPENSE (INCOME)INTEREST EXPENSE (INCOME)
Interest on long-term debt155150456440Interest on long-term debt220201656600
Other interest451114
Other interest expenseOther interest expense32157525
Allowance for borrowed funds used during construction(2)(1)(4)(3)Allowance for borrowed funds used during construction(13)(14)(36)(21)
NET INTEREST EXPENSE157154463451NET INTEREST EXPENSE239202695604
INCOME BEFORE INCOME TAX EXPENSE6436141,4341,350INCOME BEFORE INCOME TAX EXPENSE6246171,6051,370
INCOME TAX EXPENSE242226551491INCOME TAX EXPENSE109124297232
NET INCOME$401$388$883$859NET INCOME$515$493$1,308$1,138
The accompanying notes are an integral part of these financial statements.
 





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Consolidated Edison Company of New York, Inc.
CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME (UNAUDITED)
 
For the Three Months Ended September 30,For the Nine Months Ended September 30,
For the Three Months Ended September 30,For the Nine Months Ended September 30,
2017
2016
20172016
(Millions of Dollars)
(Millions of Dollars)(Millions of Dollars)2023202220232022
NET INCOME$401$388$883$859NET INCOME$515$493$1,308$1,138
OTHER COMPREHENSIVE INCOME, NET OF TAXES  
OTHER COMPREHENSIVE INCOME/(LOSS), NET OF TAXESOTHER COMPREHENSIVE INCOME/(LOSS), NET OF TAXES
Pension and other postretirement benefit plan liability adjustments, net of taxes1
—
1Pension and other postretirement benefit plan liability adjustments, net of taxes—(1)1
TOTAL OTHER COMPREHENSIVE INCOME, NET OF TAXES1
—
1
TOTAL OTHER COMPREHENSIVE INCOME/(LOSS), NET OF TAXESTOTAL OTHER COMPREHENSIVE INCOME/(LOSS), NET OF TAXES—(1)1
COMPREHENSIVE INCOME$402$388$884$860COMPREHENSIVE INCOME$515$493$1,307$1,139
The accompanying notes are an integral part of these financial statements.
 




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Consolidated Edison Company of New York, Inc.
CONSOLIDATED STATEMENT OF CASH FLOWS (UNAUDITED)
 
For the Nine Months Ended September 30,
For the Nine Months Ended September 30,
2017
2016
(Millions of Dollars)
(Millions of Dollars)(Millions of Dollars)20232022
OPERATING ACTIVITIES  OPERATING ACTIVITIES
Net income$883$859Net income$1,308$1,138
PRINCIPAL NON-CASH CHARGES/(CREDITS) TO INCOME  PRINCIPAL NON-CASH CHARGES/(CREDITS) TO INCOME
Depreciation and amortization891825Depreciation and amortization1,4281,341
Deferred income taxes566569Deferred income taxes674235
Rate case amortization and accruals(107)(170)Rate case amortization and accruals5241
Common equity component of allowance for funds used during construction(7)(6)
Other non-cash items, net(14)7Other non-cash items, net(75)173
CHANGES IN ASSETS AND LIABILITIES  CHANGES IN ASSETS AND LIABILITIES
Accounts receivable – customers18(79)Accounts receivable – customers185(134)
Allowance for uncollectible accounts – customersAllowance for uncollectible accounts – customers(45)(7)
Materials and supplies, including fuel oil and gas in storage(18)15Materials and supplies, including fuel oil and gas in storage36(71)
Revenue decoupling mechanism receivableRevenue decoupling mechanism receivable(128)24
Other receivables and other current assets2918Other receivables and other current assets(115)42
Unbilled revenue and net unbilled revenue deferralsUnbilled revenue and net unbilled revenue deferrals7716
Accounts receivable from affiliated companies1238Accounts receivable from affiliated companies(400)(66)
Prepayments(398)(351)Prepayments(699)(559)
Accounts payable(20)82Accounts payable(408)(12)
Accounts payable to affiliated companies18Accounts payable to affiliated companies74
Pensions and retiree benefits obligations, net274439Pensions and retiree benefits obligations, net(161)101
Pensions and retiree benefits contributions(416)(472)Pensions and retiree benefits contributions(28)(22)
Superfund and environmental remediation costs, net(7)76
Accrued taxes(18)(17)Accrued taxes(42)(3)
Accrued taxes to affiliated companies(119)(2)Accrued taxes to affiliated companies(89)2
Accrued interest6143Accrued interest128109
System benefit charge175176System benefit charge48(4)
Deferred charges, noncurrent assets and other regulatory assets(60)(153)
Deferred credits and other regulatory liabilities77165
Other current and noncurrent liabilities(13)(53)
Deferred charges, noncurrent assets, leases, net and other regulatory assetsDeferred charges, noncurrent assets, leases, net and other regulatory assets(598)(553)
Deferred credits, noncurrent liabilities and other regulatory liabilitiesDeferred credits, noncurrent liabilities and other regulatory liabilities(15)409
Other current liabilitiesOther current liabilities81(13)
NET CASH FLOWS FROM OPERATING ACTIVITIES1,7902,017NET CASH FLOWS FROM OPERATING ACTIVITIES1,2212,191
INVESTING ACTIVITIES  INVESTING ACTIVITIES
Utility construction expenditures(2,020)(1,932)Utility construction expenditures(2,894)(2,687)
Cost of removal less salvage(179)(146)Cost of removal less salvage(284)(242)
Proceeds from the transfer of assets to NY Transco—
122
Restricted cash213
NET CASH FLOWS USED IN INVESTING ACTIVITIES(2,197)(1,943)NET CASH FLOWS USED IN INVESTING ACTIVITIES(3,178)(2,929)
FINANCING ACTIVITIES  FINANCING ACTIVITIES
Net payment of short-term debt(453)(553)
Net issuance (retirement) of short-term debtNet issuance (retirement) of short-term debt(502)428
Issuance of long-term debt500550Issuance of long-term debt500— 
Retirement of long-term debt—
(400)
Debt issuance costs(7)(6)Debt issuance costs(5)(1)
Capital contribution by parent27976
Dividend to parent(597)(558)
NET CASH FLOWS USED IN FINANCING ACTIVITIES(278)(891)
CASH AND TEMPORARY CASH INVESTMENTS:  
Capital contribution by Con EdisonCapital contribution by Con Edison1,720150
Dividend to Con EdisonDividend to Con Edison(792)(734)
NET CASH FLOWS FROM (USED IN) FINANCING ACTIVITIESNET CASH FLOWS FROM (USED IN) FINANCING ACTIVITIES921(157)
CASH AND TEMPORARY CASH INVESTMENTSCASH AND TEMPORARY CASH INVESTMENTS
NET CHANGE FOR THE PERIOD(685)(817)NET CHANGE FOR THE PERIOD(1,036)(895)
BALANCE AT BEGINNING OF PERIOD702843BALANCE AT BEGINNING OF PERIOD1,056920
BALANCE AT END OF PERIOD$17$26BALANCE AT END OF PERIOD$20$25
SUPPLEMENTAL DISCLOSURE OF CASH INFORMATION  SUPPLEMENTAL DISCLOSURE OF CASH INFORMATION
Cash paid/(received) during the period for:  Cash paid/(received) during the period for:
Interest$388$386Interest$538$466
Income taxes$96$(130)Income taxes$90$60
SUPPLEMENTAL DISCLOSURE OF NON-CASH INFORMATION  SUPPLEMENTAL DISCLOSURE OF NON-CASH INFORMATION
Construction expenditures in accounts payable$240$195Construction expenditures in accounts payable$399$414
Software licenses acquired but unpaid as of end of periodSoftware licenses acquired but unpaid as of end of period$—$2
Equipment acquired but unpaid as of end of periodEquipment acquired but unpaid as of end of period$11$17
The accompanying notes are an integral part of these financial statements. 




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Consolidated Edison Company of New York, Inc.
CONSOLIDATED BALANCE SHEET (UNAUDITED)
 
September 30,
2017		December 31,
2016
(Millions of Dollars)
(Millions of Dollars)(Millions of Dollars)September 30,
2023		December 31,
2022
ASSETS  ASSETS
CURRENT ASSETS  CURRENT ASSETS
Cash and temporary cash investments$17$702Cash and temporary cash investments$20$1,056
Accounts receivable – customers, less allowance for uncollectible accounts of $58 and $65 in 2017 and 2016, respectively1,0211,032
Other receivables, less allowance for uncollectible accounts of $7 and $13 in 2017 and 2016, respectively8581
Accounts receivable – customers, net allowance for uncollectible accounts of $269 and $314 in 2023 and 2022, respectivelyAccounts receivable – customers, net allowance for uncollectible accounts of $269 and $314 in 2023 and 2022, respectively1,9592,099
Other receivables, net allowance for uncollectible accounts of $27 and $7 in 2023 and 2022, respectivelyOther receivables, net allowance for uncollectible accounts of $27 and $7 in 2023 and 2022, respectively300147
Taxes receivableTaxes receivable25
Accrued unbilled revenue382399Accrued unbilled revenue505573
Accounts receivable from affiliated companies97109Accounts receivable from affiliated companies44646
Fuel oil, gas in storage, materials and supplies, at average cost288270Fuel oil, gas in storage, materials and supplies, at average cost404440
Prepayments498100Prepayments922223
Regulatory assets10090Regulatory assets163286
Restricted cash—
2
Revenue decoupling mechanism receivableRevenue decoupling mechanism receivable292164
Fair value of derivative assetsFair value of derivative assets5651
Other current assets6295Other current assets97157
TOTAL CURRENT ASSETS2,5502,880TOTAL CURRENT ASSETS5,1665,247
INVESTMENTS370315INVESTMENTS571539
UTILITY PLANT, AT ORIGINAL COST  UTILITY PLANT, AT ORIGINAL COST
Electric26,93026,122Electric36,02934,636
Gas7,2296,814Gas12,90812,338
Steam2,4582,421Steam3,0302,935
General2,6402,490General4,0523,879
TOTAL39,25737,847TOTAL56,01953,788
Less: Accumulated depreciation8,1707,836Less: Accumulated depreciation12,86412,047
Net31,08730,011Net43,15541,741
Construction work in progress1,3271,104Construction work in progress2,5012,268
NET UTILITY PLANT32,41431,115NET UTILITY PLANT45,65644,009
NON-UTILITY PROPERTY  NON-UTILITY PROPERTY
Non-utility property, less accumulated depreciation of $25 in 2017 and 201644
Non-utility property, net accumulated depreciation of $25 in 2023 and 2022Non-utility property, net accumulated depreciation of $25 in 2023 and 20222
NET PLANT32,41831,119NET PLANT45,65844,011
OTHER NONCURRENT ASSETS  OTHER NONCURRENT ASSETS
Regulatory assets6,2486,473Regulatory assets4,0573,669
Operating lease right-of-use assetOperating lease right-of-use asset543567
Pension and retiree benefitsPension and retiree benefits3,2993,184
Fair value of derivative assetsFair value of derivative assets2680
Other deferred charges and noncurrent assets6169Other deferred charges and noncurrent assets267148
TOTAL OTHER NONCURRENT ASSETS6,3096,542TOTAL OTHER NONCURRENT ASSETS8,1927,648
TOTAL ASSETS$41,647$40,856TOTAL ASSETS$59,587$57,445
The accompanying notes are an integral part of these financial statements.
 




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Consolidated Edison Company of New York, Inc.
CONSOLIDATED BALANCE SHEET (UNAUDITED)
 

(Millions of Dollars)(Millions of Dollars)September 30,
2023		December 31,
2022
LIABILITIES AND SHAREHOLDER’S EQUITYLIABILITIES AND SHAREHOLDER’S EQUITY
CURRENT LIABILITIESCURRENT 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 payable147600Notes payable$1,798$2,300
Accounts payable802876Accounts payable1,1941,763
Accounts payable to affiliated companies1110Accounts payable to affiliated companies2417
Customer deposits332336Customer deposits383341
Accrued taxes3250Accrued taxes4893
Accrued taxes to affiliated companies—
119Accrued taxes to affiliated companies—89
Accrued interest172111Accrued interest262134
Accrued wages9591Accrued wages113105
Fair value of derivative liabilities5966Fair value of derivative liabilities7935
Regulatory liabilities3890Regulatory liabilities153308
System benefit charge573398System benefit charge399351
Operating lease liabilitiesOperating lease liabilities113103
Other current liabilities207242Other current liabilities374397
TOTAL CURRENT LIABILITIES3,0682,989TOTAL CURRENT LIABILITIES4,9406,036
NONCURRENT LIABILITIES  NONCURRENT LIABILITIES
Provision for injuries and damages158154Provision for injuries and damages179177
Pensions and retiree benefits1,1501,544Pensions and retiree benefits589526
Superfund and other environmental costs648655Superfund and other environmental costs902903
Asset retirement obligations234227Asset retirement obligations512499
Fair value of derivative liabilities7333Fair value of derivative liabilities609
Deferred income taxes and unamortized investment tax credits10,0609,450Deferred income taxes and unamortized investment tax credits8,0607,144
Operating lease liabilitiesOperating lease liabilities476475
Regulatory liabilities1,6731,712Regulatory liabilities4,8905,481
Other deferred credits and noncurrent liabilities217190Other deferred credits and noncurrent liabilities283237
TOTAL NONCURRENT LIABILITIES14,21313,965TOTAL NONCURRENT LIABILITIES15,95115,451
LONG-TERM DEBT11,97112,073LONG-TERM DEBT19,58319,080
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)12,39511,829SHAREHOLDER’S EQUITY (See Statement of Shareholder’s Equity)19,11316,878
TOTAL LIABILITIES AND SHAREHOLDER’S EQUITY$41,647$40,856TOTAL LIABILITIES AND SHAREHOLDER’S EQUITY$59,587$57,445
The accompanying notes are an integral part of these financial statements.
 




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Consolidated Edison Company of New York, Inc.
CONSOLIDATED STATEMENT OF SHAREHOLDER’S EQUITY (UNAUDITED)
 Common StockAdditional
Paid-In
Capital		Retained
Earnings		Repurchased
Con Edison
Stock		Capital
Stock
Expense		Accumulated
Other
Comprehensive
Income/(Loss)		Total
(In Millions)SharesAmount
BALANCE AS OF DECEMBER 31, 2015235$589$4,247$7,611$(962)$(61)$(9)$11,415
Net income   310   310
Common stock dividend to parent   (186)   (186)
Capital contribution by parent  23    23
Other comprehensive income      —
—
BALANCE AS OF MARCH 31, 2016235$589$4,270$7,735$(962)$(61)$(9)$11,562
Net income   161   161
Common stock dividend to parent   (186)   (186)
Capital contribution by parent  28    28
Other comprehensive income      11
BALANCE AS OF JUNE 30, 2016235$589$4,298$7,710$(962)$(61)$(8)$11,566
Net income   388   388
Common stock dividend to parent   (186)   (186)
Capital contribution by parent  25    25
Other comprehensive income      —
—
BALANCE AS OF SEPTEMBER 30, 2016235$589$4,323$7,912$(962)$(61)$(8)$11,793
         
BALANCE AS OF DECEMBER 31, 2016235$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, 2017235$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, 2017235$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      11
BALANCE AS OF SEPTEMBER 30, 2017235$589$4,627$8,209$(962)$(62)$(6)$12,395
 Common StockAdditional
Paid-In
Capital		Retained
Earnings		Repurchased
Con Edison
Stock		Capital
Stock
Expense		Accumulated
Other
Comprehensive
Income/(Loss)		Total
(In Millions)/Except Share Data)SharesAmount
BALANCE AS OF DECEMBER 31, 2021235$589$7,269$9,478$(962)$(62)$—$16,312
Net income475475
Common stock dividend to Con Edison(245)(245)
Capital contribution by Con Edison7575
Other comprehensive income11
BALANCE AS OF MARCH 31, 2022235$589$7,344$9,708$(962)$(62)$1$16,618
Net income170170
Common stock dividend to Con Edison(245)(245)
Capital contribution by Con Edison2525
BALANCE AS OF JUNE 30, 2022235$589$7,369$9,633$(962)$(62)$1$16,568
Net income493493
Common stock dividend to Con Edison(244)(244)
Capital contribution by Con Edison5050
BALANCE AS OF SEPTEMBER 30, 2022235$589$7,419$9,882$(962)$(62)$1$16,867
BALANCE AS OF DECEMBER 31, 2022235$589$7,419$9,890$(962)$(62)$4$16,878
Net income604604
Common stock dividend to Con Edison(264)(264)
Capital contribution by Con Edison1,6751,675
Other comprehensive loss(1)(1)
BALANCE AS OF MARCH 31, 2023235$589$9,094$10,230$(962)$(62)$3$18,892
Net income189189
Common stock dividend to Con Edison(264)(264)
Capital contribution by Con Edison2626
BALANCE AS OF JUNE 30, 2023235$589$9,120$10,155$(962)$(62)$3$18,843
Net income515515
Common stock dividend to Con Edison(264)(264)
Capital contribution by Con Edison1919
BALANCE AS OF SEPTEMBER 30, 2023235$589$9,139$10,406$(962)$(62)$3$19,113
The accompanying notes are an integral part of these financial statements.

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NOTES TO THE FINANCIAL STATEMENTS (UNAUDITED)
 
General
These combined notes accompany and form an integral part of the separate 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, whichthat 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 Transmission, Inc. (together with its subsidiaries, Con Edison Transmission) and its former subsidiary, 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. On March 1, 2023, Con Edison completed the sale of substantially all of the assets of the Clean Energy Businesses. See Note S and Note T. 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 presentationstatement 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, 20162022 and their separate unaudited financial statements (including the combined notes thereto)
included in Part 1, Item 1 of their combined Quarterly ReportReports on Form 10-Q for the quarterly periods ended March 31, 20172023 and June 30, 2017. Certain prior period amounts have been reclassified to conform to the current period presentation.2023.

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

Investment in Mountain Valley Pipeline, LLC (MVP)
In January 2016, a subsidiary of Con Edison Transmission acquired a 12.5 percent interest in MVP, a company developing a proposed 300-mile gas transmission project (the Mountain Valley Pipeline) in West Virginia and Virginia. During 2019, Con Edison exercised its right to limit, and did limit, its cash contributions to the joint venture to approximately $530 million, that reduced Con Edison Transmission’s interest in MVP to 11.3 percent, 10.2 percent and 9.6 percent as of December 31, 2020, 2021 and 2022, respectively. As of September 30, 2023, Con Edison Transmission's interest in MVP is 8.8 percent and is expected to be reduced to as low as 7.3 percent based on the Mountain Valley Pipeline's current cost estimate and Con Edison Transmission’s previous capping of its cash contributions. As of December 31, 2022 and September 30, 2023, the Mountain Valley Pipeline was approximately 94 percent complete.

In June 2023, the President of the United States signed the Fiscal Responsibility Act of 2023. Section 324 of the legislation approved all permits and authorizations necessary for the construction and initial operation of the Mountain Valley Pipeline. In mid-August 2023, construction of the Mountain Valley Pipeline resumed after resolution of certain legal challenges. In October 2023, the operator of the Mountain Valley Pipeline indicated that it is now




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targeting an in-service date for the project in the first quarter of 2024 at an overall project cost of approximately $7,200 million excluding allowance for funds used during construction. At September 30, 2023, Con Edison Transmission’s carrying value of its investment in the Mountain Valley Pipeline was $111 million and its cash contributions to the joint venture amounted to $530 million.

There is risk that the fair value of Con Edison’s investment in MVP may be further or fully impaired in the future. Assumptions and estimates used to test Con Edison’s investment in MVP for impairment may change if adverse developments impacting the construction of the Mountain Valley Pipeline were to occur which could then result in 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 to conform with the 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 sharesCommon Shares ($.10 par value) (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 sharesCommon Shares for the period was greater than the exerciseestimated vesting price.











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For the three and nine months ended September 30, 20172023 and 2016,2022, 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)2023202220232022
Net income for common stock$526$613$2,185$1,470
Weighted average common shares outstanding – basic345.0354.6348.4354.4
Add: Incremental shares attributable to effect of potentially dilutive securities1.51.31.51.3
Adjusted weighted average common shares outstanding – diluted346.5355.9349.9355.7
Net Income per common share – basic$1.53$1.73$6.27$4.15
Net Income per common share – diluted$1.52$1.72$6.24$4.13

 For the Three Months Ended September 30,For the Nine Months Ended September 30,
(Millions of Dollars, except per share amounts/Shares in Millions)2017201620172016
Net income$457$497$1,020$1,039
Weighted average common shares outstanding – basic307.8304.5306.2299.1
Add: Incremental shares attributable to effect of potentially dilutive securities1.51.41.51.4
Adjusted weighted average common shares outstanding – diluted309.3305.9307.7300.5
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, 20172023 and 2016,2022, changes to accumulated other comprehensive income/(loss) (OCI) for Con Edison and CECONY are as follows:
 
For the Three Months Ended September 30,
Con EdisonCECONY
(Millions of Dollars)2023202220232022
Beginning balance, accumulated OCI, net of taxes (a)$25$10$3$1 
Amounts reclassified from accumulated OCI related to pension plan liabilities, net of tax (a)(b)—1— — 
Current period OCI, net of taxes—1 — — 
Ending balance, accumulated OCI, net of taxes (a)$25$11$3$1
(a) Tax reclassified from accumulated OCI is reported in the income tax expense line item of the consolidated income statement.
 For the Three Months Ended September 30,
         Con Edison        CECONY
(Millions of Dollars)2017201620172016
Beginning balance, accumulated OCI, net of taxes (a)$(27)$(33)$(7)$(8)
Amounts reclassified from accumulated OCI related to pension plan liabilities, net of tax of $(1) for Con Edison in 2017 and 2016 (a)(b)111—
Current period OCI, net of taxes111—
Ending balance, accumulated OCI, net of taxes$(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 Con Edison in 2023, amounts reclassified also include accumulated OCI of the Clean Energy Businesses that were sold on March 1, 2023. See Note S.


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 For the Nine Months Ended September 30,
         Con Edison        CECONY
(Millions of Dollars)201720162017
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 $(2) for Con Edison in 2017 and 2016 (a)(b)3311
Current period OCI, net of taxes1211
Ending balance, accumulated OCI, net of taxes$(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.



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For the Nine Months Ended September 30,
Con EdisonCECONY
(Millions of Dollars)2023202220232022
Beginning balance, accumulated OCI, net of taxes (a)$22$5$4$— 
OCI before reclassifications, net of tax of $(1) for Con Edison in 202214 (1)— 
Amounts reclassified from accumulated OCI related to pension plan liabilities, net of tax of $(1) for Con Edison in 2022 (a)(b)22— 1 
Current period OCI, net of taxes36 (1)1 
Ending balance, accumulated OCI, net of taxes (a)$25$11$3$1
(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. For Con Edison in 2023, amounts reclassified also include accumulated OCI of the Clean Energy Businesses that were sold on March 1, 2023. See Note S.

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, 2023 and 2022, cash, temporary cash investments and restricted cash for Con Edison and CECONY were as follows:
At September 30,
Con EdisonCECONY
(Millions of Dollars)2023202220232022
Cash and temporary cash investments$539$78$20$25
Restricted cash (a)6163— — 
Total cash, temporary cash investments and restricted cash$545$241$20$25
(a)Con Edison restricted cash included cash of the Clean Energy Businesses' renewable electric project subsidiaries ($5 million and $163 million at September 30, 2023 and 2022, respectively) that, under the related project debt agreements, was restricted to being used for normal operating expenditures, debt service, and required reserves until the various maturity dates of the project debt. On March 1, 2023, Con Edison completed the sale of substantially all of the assets of the Clean Energy Businesses. See Note S. Con Edison retained one deferred project, Broken Bow II, a 75MW nameplate capacity wind power project located in Nebraska. Con Edison's restricted cash for the 2023 period includes restricted cash of Broken Bow II that continued to be classified as held for sale as of September 30, 2023. See Note T.


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 S, 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. On March 1, 2023, Con Edison completed the sale of substantially all of the assets of the Clean Energy Businesses with the exception of two tax equity interests and one deferred project, Broken Bow II. Broken Bow II continued to be classified as held for sale as of September 30, 2023. See Note S and Note T. Con Edison records assets and liabilities, once 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 did not represent a strategic shift that had a major effect on Con Edison, and as such, did not qualify for treatment as a discontinued operation.

For further information, see Note T.
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Note B —– Regulatory Matters
Rate Plans
Rockland Electric Company (RECO)In April 2023, the New York State Public Service Commission (NYSPSC) approved CECONY’s December 2022 petition seeking cost recovery approval for a proposed clean energy hub in Brooklyn, New York (Brooklyn Clean Energy Hub) at an estimated cost of $810 million, that is in addition to the capital expenditures approved in the CECONY joint proposal discussed below. The Brooklyn Clean Energy Hub has an estimated in-service date of December 2027 and addresses a 2028 reliability need. The Brooklyn Clean Energy Hub provides the flexibility for offshore wind resources to interconnect to it during construction and after it commences operation.

In August 2023, CECONY filed a petition with the NYSPSC requesting authorization and cost recovery to construct two new substations in Jamaica, Queens (the Reliable Clean City - Idlewild Project) by May 2028 to meet anticipated reliability needs and to support New York State’s electrification and the Climate Leadership and Community Protection Act (CLCPA) goals. CECONY estimates that construction will cost $1,200 million. CECONY proposed cost recovery through a surcharge or base rates, depending on the in-service date and the timing of future rate filings. CECONY’s petition is subject to approval by the NYSPSC.

CECONY - Electric and Gas
In July 2023, the NYSPSC approved the February 2017,2023 joint proposal among CECONY, the New Jersey BoardYork State Department of Public Utilities (NJBPU) approvedService (NYSDPS) and other parties for electric and gas rate plans for the three-year period January 1, 2023 through December 31, 2025. The CECONY electric and gas rate plans reflect a stipulation9.25 percent return on common equity and a common equity ratio of settlement for a RECO48 percent. The electric rate plan commencing March 2017.provides for rate increases of $442 million, $518 million and $382 million, effective January 1, 2023, 2024 and 2025, respectively. The gas rate plan provides for rate increases of $217 million, $173 million and $122 million, effective January 1, 2023, 2024 and 2025, respectively. The base rate increases will be implemented with increases of $457 million in each of the three rate years for electric and with increases of $187 million in each of the three rate years for gas in order to levelize the customer bill impact. The CECONY rate plans provide for total capital expenditures over the three-year rate period of $8,513 million and $3,297 million for electric and gas, respectively. Pursuant to the CECONY electric and gas rate plans, new rates were effective as of January 1, 2023 and CECONY reflected the provisions of the February 2023 joint proposal in its financial statements beginning January 1, 2023. The new base rates were implemented on August 1, 2023 and make-whole recovery for January 1, 2023 to July 31, 2023 will be collected via a surcharge through 2024 for electric and through 2025 for gas, including a carrying charge on the outstanding balance.

CECONY - Steam
In September 2023, CECONY, the NYSDPS and other parties entered into a Joint Proposal for a CECONY steam rate plan for the three-year period November 1, 2023 through October 31, 2026. The Joint Proposal is subject to approval by the NYSPSC. The following table contains a summary of the electric rate plan.steam Joint Proposal.




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RECOCECONY – Steam
Effective periodMarch 2017 (a)November 2023 – October 2026
Base rate changes
Yr. 1 – $110 million (a)
Yr. 2 – $44 million (a)
Yr. 3 – $45 million (a)
Capital expenditures
Yr. 1 - $1.7$106 million
Yr. 2 - $107 million
Yr. 3 - $105 million
AmortizationAmortizations to income of net regulatory (assets) and liabilities$0.2
Yr. 1 – $15 million over three years and continuation of $(25.6)(b)
Yr. 2 – $3 million of deferred storm costs over four years expiring July 31, 2018 (b)
Yr. 3 – $3 million (b)
Weather Normalization AdjustmentImplementation of a weather normalization adjustment that adjusts base rates to reflect normal weather conditions during the heating season.
Recoverable energy costsCurrentContinuation of current rate recovery of purchased power and fuel costs.
Cost reconciliationsNegative revenue adjustmentsNone
Average rate base
Potential charges if certain performance targets relating to service, reliability, safety and other matters are not met:
Yr. 1 - $178.7$3.7 million
Yr. 2 - $3.8 million 
Yr. 3 - $3.8 million 
Regulatory reconciliationsReconciliation of uncollectible expenses and late payment charges (c) and expenses for pension and other postretirement benefits, variable-rate debt, property taxes (d), municipal infrastructure support costs (e), the impact of new laws and environmental site investigation and remediation to amounts reflected in rates. (f)
Net utility plant reconciliations
Yr. 1 - $2,025 million 
Yr. 2 - $2,029 million 
Yr. 3 - $2,015 million 
Average rate base
Yr. 1 - $1,799 million
Yr. 2 - $1,848 million 
Yr. 3 - $1,882 million 
Weighted average cost of capital (after-tax)7.47
Yr. 1 - 6.78 percent
Yr. 2 - 6.81 percent
Yr. 3 - 6.83 percent
Authorized return on common equity9.69.25 percent
Earnings sharingMost earnings above an annual earnings threshold of 9.75 percent are to be applied to reduce regulatory assets for environmental remediation and other costs accumulated in the rate year.
Cost of long-term debt5.37
Yr. 1 – 4.51 percent
Yr. 2 – 4.58 percent
Yr. 3 – 4.62 percent
Common equity ratio49.748 percent
(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.

(a)The base rate increases will be implemented with increases of $77.8 million in Yr. 1; $77.8 million in Yr. 2; and $77.8 million in Yr. 3 to levelize the customer bill impact. New rates will be effective as of November 1, 2023. CECONY will begin billing customers at the new levelized rate once the Joint Proposal is approved by the NYSPSC. Any shortfall in revenues due to the timing of billing to customers will be collected through a surcharge.
(b)Amounts reflect amortization of the tax savings under the federal Tax Cuts and Jobs Act of 2017 (TCJA) for the unprotected portion of the regulatory liability for excess deferred income taxes allocable to CECONY’s steam customers (the entire $24 million in Yr.1), the protected portion of the regulatory liability for excess deferred income taxes allocable to CECONY’s steam customers over the remaining lives of the related assets ($3 million in Yr. 1; $5 million in Yr. 2; and $6 million in Yr. 3) and the non-plant portion of the regulatory asset for deficient deferred income taxes allocable to CECONY’s steam customers (the entire $11 million in Yr.1).
(c)CECONY will defer the difference between its actual write-offs of uncollectible expenses and late payment fees (from January 1, 2020 through October 31, 2026) to amounts reflected in rates, with recovery/refund from or to customers via surcharge/sur-credit. Surcharge recoveries for write-offs of uncollectible expenses and late payment fees will each be subject to an annual cap that produces no more than a half percent (0.5 percent) total customer bill impact (estimated to be $2.5 million, $3.0 million, $3.5 million for Yr. 1, Yr. 2 and Yr. 3, respectively). Amounts in excess of the annual surcharge cap in a specific year may be rolled forward for recovery and will count towards the following year’s surcharge cap. Amounts in excess of the surcharge cap will be deferred as a regulatory asset for recovery in CECONY’s next steam base rate case.




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(d)Deferrals for property taxes are limited to 90 percent of the difference from amounts reflected in rates, subject to an annual maximum for the remaining difference of not more than a maximum number of basis points impact on return on common equity (Yr. 1 – 10.0 basis points; Yr. 2 – 7.5 basis points; and Yr. 3 – 5.0 basis points), with recovery/refund from or to customers via surcharge/sur-credit. Surcharge recoveries will be subject to an annual cap that produces no more than a half percent (0.5 percent) total customer bill impact (estimated to be $2.5 million, $3.0 million, $3.5 million for Yr. 1, Yr. 2 and Yr. 3, respectively). Amounts in excess of the annual surcharge cap in a specific year may be rolled forward for recovery and will count towards the following year’s surcharge cap. Amounts in excess of the surcharge cap will be deferred as a regulatory asset for recovery in CECONY’s next steam base rate case.

(e)In general, if actual expenses for municipal infrastructure support (other than company labor) are below the amounts reflected in rates, CECONY will defer the difference for credit to customers, and if the actual expenses are above the amount reflected in rates, CECONY will defer for recovery from customers 80 percent of the difference subject to a maximum deferral, subject to certain conditions, of 30 percent of the amount reflected in the rate plan.
(f)In addition, the NYSDPS continues its focused operations audit to investigate CECONY's income tax accounting. The audit is investigating CECONY’s inadvertent understatement of a portion, the amount of which may be material, of its calculation of total federal income tax expense for ratemaking purposes. The understatement was related to the tax accounting treatment of its plant retirement-related cost of removal. As a result of such understatement, CECONY accumulated significant income tax regulatory assets that were not reflected in CECONY’s steam rate plans prior to November 1, 2023. A prospective correction is set forth for steam rates in the joint proposal.

Pursuant to the Joint Proposal, CECONY may file petitions for approval of future decarbonization projects and may defer/capitalize up to $3 million in total incremental operation and maintenance and/or capital costs for preliminary work on future decarbonization projects until there is a NYSPSC order on cost recovery.

Rockland Electric Company (RECO)
In September 2017,October 2023, FERC approved a July 2023 settlement agreement among RECO, the New Jersey Division of Rate Counsel and the New Jersey Board of Public Utilities entered into a settlement agreement, which is subject to FERC approval,NJBPU that resolves all issues set for hearing and increases RECO's annual transmission revenue requirement from $11.8$16.9 million to $17.7$18.2 million, effective April 2017.August 30, 2022 through December 31, 2023 and to $20.7 million, effective January 1, 2024.

In May 2023, RECO filed a petition with the NJBPU requesting permission to defer costs of $5.1 million related to major storms during 2022 and 2023 until RECO’s next base rate case.

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.

New York Regulation
In March 2020, a former New York State governor declared a State Disaster Emergency for the State of New York due to the COVID-19 pandemic and signed the "New York State on PAUSE" executive order that 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 New York enacted a law prohibiting New York 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, that ended in June 2021. However, 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. CECONY recorded such amounts as revenue requirement reflectsfor 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, CECONY also established a recovery mechanism 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 CECONY recorded such amounts
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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 and that, pursuant to the June 2022 NYSPSC Phase 1 Order (as discussed below), was used to fund a portion of the COVID-19 arrears assistance program for low-income customers.The November 2021 order also established a surcharge or sur-credit 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. The current CECONY electric and gas rate plans include the impact of the 2022 late payment charges and fee deferrals in the proposed revenue requirements, superseding the provisions in the November 2021 order.
CECONY’s and O&R’s rate plans that were in effect through 2022 and 2021, respectively, allowed 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. CECONY's and O&R’s current rate plans have deferral provisions related to uncollectible expenses. CECONY’s 2023 - 2025 rate plans include reconciliation of late payment charges (from January 1, 2023 through December 31, 2025) and write-offs of customer accounts receivable balances (from January 1, 2020 through December 31, 2025) to amounts reflected in rates, with recovery/refund from or to customers via surcharge/sur-credit. Surcharge recoveries for late payment charges and write-offs of accounts receivable balances will, collectively, be subject to separate annual caps for electric and gas that produce no more than a half percent (0.5 percent) total customer bill impact per commodity (estimated for electric to be $57.3 million, $60.3 million, $62.6 million for 2023, 2024 and 2025, respectively, and for gas to be $14.8 million, $15.9 million and $16.8 million for 2023, 2024 and 2025, respectively). Amounts in excess of the surcharge caps will be deferred as a regulatory asset for recovery in CECONY’s next base rate cases. O&R’s 2022 – 2024 rate plans include reconciliation of late payment charges to amounts reflected in rates for years 2022 through 2024, with full recovery/refund via surcharge/sur-credit once the annual variance equals or exceeds 5 basis points of return on common equity and reconciliation of 10.0 percent.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. The total reserve increases to the allowance for uncollectible accounts from January 1, 2020 through September 30, 2023 reflecting the impact of the COVID-19 pandemic for CECONY electric and gas operations and O&R electric and gas operations were $205 million and $2 million, respectively. CECONY's and O&R's rate plans also provide for an allowance for write-offs of customer accounts receivable balances. The amounts by which actual write-offs of customer accounts receivable balances exceeded the allowances reflected in rates were deferred pursuant to CECONY's and O&R's New York rate plans. Such differences were $55 million and $2 million for CECONY and O&R, respectively, from March 1, 2020 through September 30, 2023.


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, New York passed a law that created a program that allows eligible residential renters in New York 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 New York 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, New York approved the 2022-2023 state budget, that 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 (Phase 1 Order). Pursuant to the Phase 1 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, pursuant to the November 2021 order, described above.

For the year ended December 31, 2022, CECONY and O&R issued total credits of $359.9 million and $6.1 million, respectively, towards reducing customers’ accounts receivable balances. For the year ended December 31, 2022, the total credits for CECONY were comprised of: $164.5 million pursuant to the New York funding; $108.4 million




26                             

pursuant to the Phase 1 Order, that will be recovered over a four-year period via a surcharge mechanism that began September 1, 2022; the $7 million reserve for CECONY described above; and $80.0 million in qualified tax credits and payments pursuant to the OTDA Program described above. For the year ended December 31, 2022, the total credits for O&R were comprised of: $1.6 million pursuant to the New York funding; $3.2 million pursuant to the Phase 1 Order, that will be recovered over a one-year period via a surcharge mechanism that began September 1, 2022; and $1.3 million in qualified tax credits and payments pursuant to the OTDA Program described above.

In January 2023, the NYSPSC issued an order implementing a COVID-19 arrears assistance program that provides credits towards reducing the arrears balances of residential and small commercial electric and gas customers of CECONY and O&R (Phase 2 Order). The Phase 2 Order authorizes a surcharge mechanism for recovery of the eligible credit amounts over a ten-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 Phase 2 Order, CECONY and O&R agreed not to seek recovery of incremental financing costs incurred associated with arrears from March 2020 through December 2022 estimated to be $46 million, most of which is attributable to CECONY.

For the three months ended September 30, 2023, CECONY and O&R issued total net credits of $4.9 million and $0.2 million, respectively, towards reducing customers' account receivable balances. Total net credits were comprised of qualified tax credits and payments pursuant to the OTDA Program.

For the nine months ended September 30, 2023, CECONY and O&R issued total net credits of $348.4 million and $2.8 million, respectively, towards reducing customers' account receivable balances. For the nine months ended September 30, 2023, the total credits for CECONY were comprised of: $13.2 million pursuant to the Phase 1 Order, $327.6 million pursuant to the Phase 2 Order, and $7.6 million in qualified tax credits and payments pursuant to the OTDA Program. For the nine months ended September 30, 2023, the total credits for O&R were comprised of: $0.1 million pursuant to the Phase 1 Order, $2.1 million pursuant to the Phase 2 Order, and $0.6 million in qualified tax credits and payments pursuant to the OTDA Program.

The Utilities’ rate plans have revenue decoupling mechanisms in their New York 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 New York electric and gas rate plans (January through December). Differences are accrued with interest each month for CECONY's and O&R's New York electric customers and after the annual deferral period ends for CECONY's and O&R's New York 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 New York electric and gas customers.

New Jersey Regulation
In March 2020, New Jersey Governor Murphy declared a Public Health Emergency and State of Emergency for the State of New Jersey. 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 New Jersey 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. Through a series of orders, the NJBPU extended such deferrals through March 15, 2023. Pursuant to a June 2023 order from the NJBPU, RECO will defer its COVID-19 regulatory asset of $0.3 million and seek recovery in its next base rate case.

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. As of June 1, 2022, CECONY substantially completed its required inspections and continues to make progress on completing such required inspections. CECONY is unable to estimate the amount or range of its possible loss, if any, related to this matter. At September 30, 2023, CECONY had not accrued a liability related to this matter.

27                             

Other Regulatory Matters
On August 16, 2017,In October 2023, CECONY and O&R replaced their separate existing customer billing and information systems with a single new customer billing and information system. In April 2023, CECONY filed a petition with the New York State Public Service Commission (NYSPSC)NYSPSC for permission to capitalize incremental costs (estimated at $75 million) for the new system above a $421 million limit on capital expenditures included in CECONY’s 2020 – 2022 electric and gas rate plans, subject to NYSPSC review. At September 30, 2023, CECONY's incurred costs for the new system were $452.9 million. O&R's 2022 - 2024 electric and gas rate plans do not include a limit on capitalization of new system costs.

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 byinitiating a failure of CECONY’s electricity supply to a subway station, which led to a lossfocused operations audit of the subway signals, and that oneUtilities’ 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 was not properly documented by the company.amount of which may be material, of their calculation of total federal income tax expense for ratemaking purposes. 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 activitiesunderstatement was related to the MTA system. In July 2017,calculation of plant retirement-related cost of removal. As a result of such understatement, the ChairmanUtilities 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 a prospective correction is set forth for steam rates in CECONY's September 2023 joint proposal. 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 notifiedaudit, the companyUtilities plan to pursue a private letter ruling from the Internal Revenue Service (IRS) that the April 21, 2017 subway power outage incident will likely resultis expected to confirm, among other things, that in order to comply with IRS normalization rules, such understatement may not be corrected through a prudence reviewwrite-down of a portion of the reasonablenessregulatory asset and must be corrected through an increase in future years’ revenue requirements. The regulatory asset ($1,116 million and $19 million for CECONY and O&R, respectively, as of CECONY's actionsSeptember 30, 2023) and conduct.($1,150 million and $22 million for CECONY and O&R, respectively, as of December 31, 2022 and which is not earning a return) 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 itstheir possible costsloss, if any, related to this matter. At September 30, 2023, the Utilities had not accrued a liability related to this matter.




21


Regulatory Assets and Liabilities
Regulatory assets and liabilities at September 30, 20172023 and December 31, 20162022 were comprised of the following items:




28                             


  
         Con Edison        CECONY
(Millions of Dollars)2023202220232022
Regulatory assets
Unrecognized pension and other postretirement costs$125$78$125$78
Environmental remediation costs983991899906
Revenue taxes468436448417
Deferred storm costs221270129173
Municipal infrastructure support costs20292029 
Brooklyn Queens Demand Management (BQDM) program31333133
Meadowlands heater odorization project24272427
Recoverable Demonstration project costs18171816
Gate station upgrade project14141414
System peak reduction and energy efficiency programs868783860780
Unamortized loss on reacquired debt911810
Deferred derivative losses - long term99318926
Property tax reconciliation195121195121
Legacy meters1720——
Gas service line deferred costs49994999
COVID - 19 customer arrears relief programs418104 415101 
Pension and other postretirement benefits deferrals5627941240
Preferred stock redemption18191819
MTA power reliability deferral69926992
Non-wire alternative projects20222022
COVID - 19 pandemic deferrals333292329288
Electric vehicle make ready59335530
Other220173201148
Regulatory assets – noncurrent4,3343,9744,0573,669
Deferred derivative losses - short term137184132178
Recoverable energy costs4312131108
Regulatory assets – current180305163286
Total Regulatory Assets$4,514$4,279$4,220$3,955
Regulatory liabilities
Future income tax*1,5831,7531,4501,616
Allowance for cost of removal less salvage1,3681,3151,1811,137
Net unbilled revenue deferrals214204214204 
Energy efficiency portfolio standard unencumbered funds5577
Settlement of prudence proceeding810810
Earnings sharing - electric, gas and steam1313 1010 
System benefit charge carrying charge87738369
BQDM and Demonstration project reconciliations15231521
Pension and other postretirement benefit deferrals19414414698
Property tax refunds35353535
COVID - 19 pandemic uncollectible reconciliation deferral112112
Late payment charge deferral160127 155123 
Unrecognized pension and other postretirement costs1,2761,6381,1971,536
Net proceeds from sale of property54695269
Sales and use tax refunds29372736
Workers’ compensation15111511 
Deferred derivative gains - long term1714517130
Other327413277357
Regulatory liabilities – noncurrent5,4016,0274,8905,481
Refundable energy costs993470—
Revenue decoupling mechanism—29—21
Deferred derivative gains - short term9031183287
Regulatory liabilities – current189374153308
Total Regulatory Liabilities$5,590$6,401$5,043$5,789
* See "Other Regulatory Matters," above.

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, 2023 and 2022 was 5.20 percent and 1.75 percent, respectively.

29                             

  
         Con Edison         CECONY
(Millions of Dollars)20172016 2017
2016
Regulatory assets     
Unrecognized pension and other postretirement costs$2,626$2,874
$2,476$2,730
Future income tax2,4192,439
2,3082,325
Environmental remediation costs803823
690711
Revenue taxes341295
325280
Deferred derivative losses8848 7842
Pension and other postretirement benefits deferrals7038 457
Municipal infrastructure support costs5744 5744
Deferred storm costs4356
—
3
Unamortized loss on reacquired debt3943
3741
Indian Point Energy Center program costs3250 3250
O&R property tax reconciliation2937
—
—
Brooklyn Queens demand management program2829 2829
Preferred stock redemption2425 2425
Surcharge for New York State assessment1828 1626
Net electric deferrals1324
1324
Workers’ compensation1213 1213
O&R transition bond charges1015
—
—
Recoverable energy costs442 438
Other113101
10385
Regulatory assets – noncurrent6,7697,024
6,2486,473
Deferred derivative losses8191
7586
Recoverable energy costs289
254
Regulatory assets – current109100
10090
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 deferrals202193 174162
Net unbilled revenue deferrals166145
166145
Property tax reconciliation140178
140178
Unrecognized other postretirement costs8460 8460
Settlement of prudence proceeding7395
7395
Carrying charges on repair allowance and bonus depreciation4968 4867
New York State income tax rate change4861
4860
Variable-rate tax-exempt debt – cost rate reconciliation3655 3248
Property tax refunds281 281
Settlement of gas proceedings2727 2727
Base rate change deferrals2640
2640
Earnings sharing - electric, gas and steam2439
1528
Net utility plant reconciliations1116
815
Other161172
133145
Regulatory liabilities – noncurrent1,8731,905
1,6731,712
Refundable energy costs2929 95
Revenue decoupling mechanism2771
2761
Deferred derivative gains228
224
Regulatory liabilities – current58128
3890
Total Regulatory Liabilities$1,931$2,033
$1,711$1,802
In general, the Utilities are receiving or being credited with a return on their regulatory assets for which a cash outflow has been made ($2,406 million and $2,304 million for Con Edison, and $2,233 million and $2,097 million for CECONY at September 30, 2023 and December 31, 2022, respectively). Regulatory assets of RECO for which a cash outflow has been made ($19 million and $21 million at September 30, 2023 and December 31, 2022, 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, 2023 and December 31, 2022, 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)2023202220232022
Unrecognized pension and other postretirement costs$125$78$125$78
Environmental remediation costs983987899903
Revenue taxes494414474397
COVID-19 Deferral for Uncollectible Accounts Receivable207253205249
Deferred derivative losses - current137184133178
Deferred derivative losses - long term99318926
Other63286227
Total$2,108$1,975$1,987$1,858
*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, Con Edison issued $400 million aggregate principal amount of 2.00 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


22

22




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,February 2023, CECONY issued $500 million aggregate principal amount of 3.8755.20 percent debentures, due 2047. 2033.

In August 2017,March 2023, Con Edison issued 4.1entered into accelerated share repurchase agreements (ASR Contracts) with two dealers to repurchase $1,000 million common shares resulting in net proceedsaggregate of $343Con Edison’s Common Shares ($.10 par value) (Common Shares). Pursuant to the ASR Contracts, Con Edison made payments of $1,000 million after issuance expenses,in aggregate to the dealers and received initial deliveries of 8,730,766 Common Shares in aggregate that were invested byrecorded in treasury stock at fair value based on the closing price on March 6, 2023 of $91.63 per Common Share or $800 million. The remaining $200 million was recorded as additional paid-in-capital, representing the value of the forward contract to purchase additional shares.

The final settlements of the transactions under the ASR Contracts occurred during the second quarter of 2023. At final settlement, the dealers delivered an additional 1,812,497 Common Shares in aggregate to Con Edison. The number of Common Shares received from the dealers was based on the volume-weighted average share price of




30                             

Common Shares during the term of the applicable transaction, less a discount. Upon receipt of the additional Common Shares, Con Edison transferred $169 million from additional paid-in-capital to treasury stock, reflecting the fair value of the Common Shares delivered to Con Edison.

In October 2023, O&R agreed to issue in its subsidiaries, principally CECONY and the Clean Energy Businesses, for fundingDecember 2023 $50 million aggregate principal amount of their construction expenditures and for other general corporate purposes.6.59 percent debentures, due 2053.

The carrying amounts and fair values of long-term debt at September 30, 20172023 and December 31, 20162022 were:
(Millions of Dollars)20232022
Long-Term Debt (including current portion) (a)Carrying
Amount		Fair
Value		Carrying
Amount		Fair
Value
Con Edison$21,300(c)$17,726(c)$20,796(b)$18,234(b)
CECONY$19,583$16,213$19,080$16,699
(a)Amounts shown are net of unamortized debt expense and unamortized debt discount of $200 million and $192 million for Con Edison and CECONY, respectively, as of September 30, 2023 and $202 million and $195 million for Con Edison and CECONY, respectively, as of December 31, 2022.
(Millions of Dollars)20172016
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.

(b)Amounts shown exclude the debt of the Clean Energy Businesses, that were classified as held for sale as of December 31, 2022. The carrying value and fair value of the Clean Energy Businesses’ long-term debt, including the current portion, as of December 31, 2022 was $2,645 million and $2,489 million, respectively. On March 1, 2023, Con Edison completed the sale of substantially all of the assets of the Clean Energy Businesses. See Note S and Note T.
Fair(c)Amounts shown exclude an immaterial amount of debt of Broken Bow II, a deferred project, that was classified as held for sale as of December 31, 2022 and September 30, 2023. See Note S and Note T.

The fair values of the Companies' long-term debt have been estimated primarily using available market information. For Con Edison, $16,559 millioninformation and $636 million of the fair value of long-term debt at September 30, 20172023 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 (seeliabilities. See Note L). 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.O.


Note D —– Short-Term Borrowing
In March 2023, Con Edison and the Utilities entered into a $2,500 million credit agreement (the Credit Agreement), that replaced the December 2016 credit agreement, under which banks are committed to provide loans and letters of credit on a revolving credit basis. The Credit Agreement expires in March 2028, unless extended for up to two additional one–year terms. There is a maximum of $2,500 million of credit available to CECONY and $800 million (subject to increase up to $1,000 million) available to Con Edison, including up to $900 million of letters of credit. The Credit Agreement supports the Companies’ commercial paper programs. Loans and letters of credit issued
under the Credit Agreement may also be used for other general corporate purposes. Any borrowings under the
Credit Agreement would generally be at variable interest rates.

In March 2023, Con Edison repaid $200 million and $400 million that it borrowed in January 2023 and June 2022, respectively, under a 364-Day Senior Unsecured Term Loan Credit Agreement that Con Edison entered into in June 2022 that was amended in November 2022.

In March 2023, CECONY entered into a 364-Day Revolving Credit Agreement (the CECONY Credit Agreement) that replaced the CECONY 2022 364-Day Credit Agreement, under which banks are committed to provide loans up to $500 million on a revolving credit basis. The CECONY Credit Agreement expires in March 2024 and supports CECONY’s commercial paper program. Loans and letters of credit issued under the CECONY Credit Agreement may also be used for other general corporate purposes. Any borrowings under the CECONY Credit Agreement would generally be at variable interest rates.

At September 30, 2017,2023, Con Edison had $356$1,880 million of commercial paper outstanding of which $147$1,798 million was outstanding under CECONY’s program. The weighted average interest rate at September 30, 20172023 was 1.35.5 percent for both Con Edison and CECONY. At December 31, 2016,2022, Con Edison had $1,054$2,640 million of commercial paper outstanding of which $600$2,300 million was outstanding under CECONY’s program. The weighted average interest rate at December 31, 20162022 was 1.04.8 percent for both Con Edison and CECONY.

At September 30, 20172023 and December 31, 2016,2022, no loans were outstanding under the Companies' Credit Agreement and December 2016 credit agreement, (Credit Agreement).respectively, and no loans were outstanding under the CECONY Credit Agreement and the CECONY 2022 364-Day Credit Agreement, respectively. An immaterial amount and $2 million (including $2 million for CECONY) of letters of credit were outstanding under the Credit Agreement and the December 2016 credit agreement as of September 30, 20172023 and December 31, 2016,2022, respectively.


31                             

The banks’ commitments under the Credit Agreement and the CECONY Credit Agreement are subject to certain conditions, including that there be no event of default. The commitments are not subject to maintenance of credit rating levels or the absence of a material adverse change. Upon a change of control of, or upon an event of default by one of the Companies under the Credit Agreement or by CECONY under the CECONY Credit Agreement, the banks may terminate their commitments with respect to that company, declare any amounts owed by that company under the Credit Agreement or the CECONY Credit Agreement, respectively, immediately due and payable and for the Credit Agreement, require that company to provide cash collateral relating to the letters of credit issued for it under the Credit Agreement. Events of default for a company include that company exceeding at any time of a ratio of consolidated debt to consolidated total capital of 0.65 to 1; that company having liens on its assets in an aggregate amount exceeding 10 percent of its consolidated net tangible assets, subject to certain exceptions; that company or any of 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) of that company; theoccurrence 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) of that company or enables the holders of such debt to accelerate the maturity thereof; and other customary events of default. Interest and fees charged for the revolving credit facilities and any loans made or letters of credit issued under the Credit Agreement reflect the Companies’ respective credit ratings.


Note E —– Pension Benefits
Total Periodic Benefit Cost
The components of the Companies’ total periodic benefit costscost/(credit) for the three and nine months ended September 30, 20172023 and 20162022 were as follows:
 
For the Three Months Ended September 30,
Con EdisonCECONY
(Millions of Dollars)2023202220232022
Service cost – including administrative expenses$40$72$38$67
Interest cost on projected benefit obligation162126153119
Expected return on plan assets(279)(292)(265)(277)
Recognition of net actuarial loss/(gain)(58)94(55)89
Recognition of prior service credit(4)(4)(5)(5)
TOTAL PERIODIC BENEFIT CREDIT$(139)$(4)$(134)$(7)
Cost capitalized(19)(32)(18)(30)
Reconciliation to rate level72636659
Total expense (credit) recognized$(86)$27$(86)$22
 For the Three Months Ended September 30,
            Con Edison         CECONY
(Millions of Dollars)2017201620172016
Service cost – including administrative expenses$66$69$61$65
Interest cost on projected benefit obligation148149139140
Expected return on plan assets(243)(237)(229)(225)
Recognition of net actuarial loss149149141141
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 EdisonCECONY
(Millions of Dollars)2023202220232022
Service cost – including administrative expenses$122$215$113$202
Interest cost on projected benefit obligation486379458357
Expected return on plan assets(837)(876)(795)(832)
Recognition of net actuarial loss/(gain)(174)283(164)268
Recognition of prior service credit(12)(12)(15)(15)
TOTAL PERIODIC BENEFIT CREDIT$(415)$(11)$(403)$(20)
Cost capitalized(61)(100)(58)(95)
Reconciliation to rate level218192202182
Total expense (credit) recognized$(258)$81$(259)$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.


23


32                             
Table of Contents

 For the Nine Months Ended September 30,
            Con Edison         CECONY
(Millions of Dollars)2017201620172016
Service cost – including administrative expenses$197$207$184$194
Interest cost on projected benefit obligation444447416419
Expected return on plan assets(726)(711)(689)(674)
Recognition of net actuarial loss446447423424
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, 2017,2023, the Companies expect to make contributions to the pension plans during 20172023 of $450$22 million (of which $412$19 million is to be contributedmade 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. DuringNo funding is anticipated for the qualified plan during 2023, and during the first nine months of 2017,2023, the Companies contributed $446$15 million to the non-qualified supplemental pension plans, (of$13 million of which $409 million was contributed by CECONY).CECONY. CECONY also contributed $14$10 million to itsthe 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 costscost/(credit) for the three and nine months ended September 30, 20172023 and 20162022 were as follows:
 
For the Three Months Ended September 30,
  
          Con Edison          CECONY
(Millions of Dollars)2023202220232022
Service cost - including administrative expenses$4$5$3$4
Interest cost on projected other postretirement benefit obligation148128
Expected return on plan assets(18)(18)(14)(14)
Recognition of net actuarial gain(4)(4)(2)(3)
Recognition of prior service credit————
TOTAL PERIODIC OTHER POSTRETIREMENT CREDIT$(4)$(9)$(1)$(5)
Cost capitalized(2)(2)(2)(2)
Reconciliation to rate level17—6
Total credit recognized$(5)$(4)$(3)$(1)
 For the Three Months Ended September 30,
  
          Con Edison          CECONY
(Millions of Dollars)201720162017
2016
Service cost$5$4$3$3
Interest cost on accumulated other postretirement benefit obligation1112910
Expected return on plan assets(17)(19)(15)(17)
Recognition of net actuarial loss11—
1
Recognition of prior service cost(5)(5)(3)(3)
TOTAL PERIODIC OTHER POSTRETIREMENT BENEFIT COST$(5)$(7)$(6)$(6)
Cost capitalized2222
Reconciliation to rate level(1)7—
6
Cost charged to operating expenses$(4)$2$(4)$2



For the Nine Months Ended September 30,
  
          Con Edison          CECONY
(Millions of Dollars)2023202220232022
Service cost - including administrative expenses$11$14$9$11
Interest cost on projected other postretirement benefit obligation43263723
Expected return on plan assets(53)(54)(42)(43)
Recognition of net actuarial gain(12)(11)(6)(7)
Recognition of prior service credit(1)(1)——
TOTAL PERIODIC OTHER POSTRETIREMENT CREDIT$(12)$(26)$(2)$(16)
Cost capitalized(5)(6)(4)(5)
Reconciliation to rate level222(2)18
Total credit recognized$(15)$(10)$(8)$(3)
 For the Nine Months Ended September 30,
  
          Con Edison          CECONY
(Millions of Dollars)2017201620172016
Service cost$15$13$10$10
Interest cost on accumulated other postretirement benefit obligation34362830
Expected return on plan assets(52)(58)(45)(50)
Recognition of net actuarial loss/(gain)24(2)2
Recognition of prior service cost(13)(15)(9)(11)
TOTAL PERIODIC OTHER POSTRETIREMENT BENEFIT COST$(14)$(20)$(18)$(19)
Cost capitalized6575
Reconciliation to rate level(3)20(1)19
Cost charged to operating expenses$(11)$5$(12)$5


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



24

24





Contributions
DuringAs of September 30, 2023, the first nine months of 2017, Con EdisonCompanies contributed $16$15 million (all of which $8 million was contributedmade by CECONY,CECONY) to the other postretirement benefit plans.plans in 2023. The Companies' policy is to fund the total periodic benefit cost of the plans to the extent tax deductible.


33                             

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’scompany'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, 20172023 and December 31, 20162022 were as follows:
        Con Edison        CECONY
(Millions of Dollars)2023202220232022
Accrued Liabilities:
Manufactured gas plant sites$874$876$780$782
Other Superfund Sites122121121121
Total$996$997$901$903
Regulatory assets$983$991$899$906
         Con Edison        CECONY
(Millions of Dollars)2017201620172016
Accrued Liabilities:    
Manufactured gas plant sites$659$664$563$567
Other Superfund Sites86898588
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, 20172023 and 20162022 were as follows:
For the Three Months Ended September 30,
          Con Edison     CECONY
(Millions of Dollars)2023202220232022
Remediation costs incurred$1$3$1$3
 For the Three Months Ended September 30,
           Con Edison     CECONY
(Millions of Dollars)2017201620172016
Remediation costs incurred$4$8$3$5


For the Nine Months Ended September 30,
          Con Edison     CECONY
(Millions of Dollars)2023202220232022
Remediation costs incurred$8$17$8$16



25

 For the Nine Months Ended September 30,
           Con Edison     CECONY
(Millions of Dollars)2017201620172016
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 Edison2023 and CECONY received $1 million in insurance recoveries for the three and nine months ended September 30, 2016.2022.




34                             

In 2016,2022, 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$3,140 million and $2.6 billion,$2,990 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, whichthat 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, 2017,2023, 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, 20172023 and December 31, 20162022 were as follows:
          Con Edison     CECONY
(Millions of Dollars)2023202220232022
Accrued liability – asbestos suits$8$8$7$7
Regulatory assets – asbestos suits$8$8$7$7
Accrued liability – workers’ compensation$57$61$55$59
Regulatory liabilities – workers’ compensation$12$11$15$11


35                             
           Con Edison     CECONY
(Millions of Dollars)2017201620172016
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



26

26





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 116th and 117th 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,CECONY, 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 companyCECONY that allowed gas to leak from the distribution main and migrate into a building where it ignited and (2) a breach in a Citycity sewer line that allowed groundwater and soil to flow into the sewer, resulting in a loss of support for the distribution main, whichthat caused it to sag and overstressed the defective fusion joint. The NTSB also made safety recommendations, including recommendations to the companyCECONY that addressed its procedures for the preparation and examination of plastic fusions, training of its staff on conditions for notifications to the City’scity’s Fire Department and extension of its gas main isolation valve installation program. In February 2017, the NYSPSC approved a settlement agreement with the companyCECONY 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 provideCECONY provided $27 million of future benefits to customers (for which it has accrued a regulatory liability, see Note B). Approximately eighty suitsliability) and did not recover from customers $126 million of costs for gas emergency response activities that it had previously incurred and expensed. Lawsuits are pending against the companyCECONY seeking generally unspecified damages and, in some cases, punitive damages, for wrongful death, personal injury, property damage and business interruption. The company hasCECONY notified its insurers of the incident and believes that the policies in force at the time of the incident will cover the company’sCECONY’s costs, in excess of a required retention (the amount of which is not material), to satisfy any liability it may have for damages in connection with the incident. The company is unable to estimateDuring 2020, CECONY accrued its estimated liability for the suits of $40 million and an insurance receivable in the same amount, or rangeand such estimated liability and receivable did not change as of its possible loss for damages related to the incident. At September 30, 2017, the company had not accrued a liability for damages related to the incident.2023.

Other Contingencies
SeeFor 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 enterhas entered into various agreements providing financial or performance assurance primarily to third parties on behalf of theirits subsidiaries. In addition, Con Edison has provided guarantees to third parties on behalf of its former subsidiary, the Clean Energy Businesses, that are in the process of being transferred to the buyer of the Clean Energy Businesses, RWE Aktiengesellschaft (RWE). Maximum amounts guaranteed by Con Edison totaled $2,162$218 million and $2,370and $2,412 million at September 30, 20172023 and December 31, 2016,2022, respectively.
A summary, by type and term, of Con Edison’sEdison's total guarantees under these agreements at September 30, 20172023 is as follows:
 
Guarantee Type0 – 3 years4 – 10 years> 10 yearsTotal
(Millions of Dollars)
Con Edison Transmission$78$—$—$78
Guarantees on behalf of the Clean Energy Businesses (a)100—31131
Broken Bow II——99
Total$178$—$40$218
Guarantee Type0 – 3 years4 – 10 years
> 10 years
Total
 (Millions of Dollars)
Con Edison Transmission$643$404
$—
$1,047
Energy transactions45930211700
Renewable electric production projects268—
19287
Other128—
—
128
Total$1,498$434$230$2,162
(a) On March 1, 2023, Con Edison completed the sale of substantially all of the assets of the Clean Energy Businesses. See Note S and Note T. Guarantee amount shown represents guarantees issued on behalf of the Clean Energy Businesses that remain outstanding at September 30, 2023. Prior to and following the sale, RWE, with Con Edison's assistance, engaged in the process of transferring responsibility for these guarantees from Con Edison to RWE and that process is ongoing. Pursuant to the purchase and sale agreement, RWE is obligated to reimburse and hold harmless Con Edison for any payments Con Edison makes under guarantees issued by Con Edison on behalf of the Clean Energy Businesses. As of September 30, 2023, no such payments have been, or are probable of being, made.

Con Edison Transmission — Con Edison has guaranteed payment by CET ElectricCon Edison Transmission of the contributions CET ElectricCon Edison Transmission agreed to make to New York Transco LLC (NY(New York Transco). CET Electric acquiredCon Edison Transmission owns a 45.7 percent interest in NY Transco when it was formed in 2014. 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 the New York Independent System Operator's competitive bidding process. These other projects are subject to certain authorizations fromTransco’s New York Energy Solution project, the NYSPSC, the FERC and, as applicable, other federal, state and local agencies.majority of




36                             

which has been completed. Guarantee amount shown is forincludes the maximum possible required amount of CET Electric’sCon Edison Transmission's contributions for these other projectsthe remainder of this project as calculated based on the assumptions that the projects areproject is completed at 175 percent of theirits estimated remaining costs and NYNew York 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.
Broken Bow II — Con Edison has guaranteed obligations on behalf of CET Gasits indirect subsidiary, Broken Bow II, associated with its investment in relationa wind energy facility. Broken Bow II is held for sale as of September 30, 2023. See Note T.

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, 2023 and 2022 were as follows:
For the Three Months Ended September 30,
Con EdisonCECONY
(Millions of Dollars)2023202220232022
Operating lease cost$17 $22 $17 $17 
Operating lease cash flows$6 $11 $6 $5 

For the Nine Months Ended September 30,
Con Edison (a)CECONY
(Millions of Dollars)2023202220232022
Operating lease cost$53 $66 $49 $50 
Operating lease cash flows$17 $28 $14 $13 
(a) Amounts for Con Edison include amounts for the Clean Energy Businesses through February 2023. On March 1, 2023, Con Edison completed the sale of substantially all of the assets of the Clean Energy Businesses. See Note S and Note T.

As of September 30, 2023 and December 31, 2022, 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 $2 million and $1 million as of September 30, 2023, respectively, and $5 million and $2 million as of December 31, 2022, respectively.

For the three and nine months ended September 30, 2023 and 2022, 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 $9 million for the three months ended September 30, 2023 and $11 million for the nine months ended September 30, 2023. 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.
Other information related to a proposed gas transmission project in West Virginialeases for Con Edison and Virginia.

CECONY at September 30, 2023 and December 31, 2022 were as follows:
Con EdisonCECONY
2023202220232022
Weighted Average Remaining Lease Term:
Operating leases (a)(b)11.6 years12.3 years11.6 years12.4 years
Finance leases6.5 years7.2 years2.9 years2.3 years
Weighted Average Discount Rate:
Operating leases (a)(b)3.7%3.7%3.7%3.7%
Finance leases3.0%1.9%3.0%1.0%

37                             
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Table of Contents

Energy Transactions —(a)Amounts for Con Edison guarantees payments on behalfexclude operating leases of the Clean Energy Businesses, inclusive of Broken Bow II, that were classified as held for sale as of December 31, 2022. Including the operating leases of the Clean Energy Businesses would result in order to facilitate physicala weighted average remaining lease term of 18.3 years and financial transactionsa weighted average discount rate of 4.4 percent as of December 31, 2022. On March 1, 2023, Con Edison completed the sale of substantially all of the assets of the Clean Energy Businesses. See Note S and Note T.
(b)Amounts for Con Edison in electricity, gas, pipeline capacity, transportation, oil, renewable energy credits2023 exclude the operating lease of Broken Bow II, that was classified as held for sale as of September 30, 2023. Including the operating lease of Broken Bow II would result in a weighted average remaining lease term of 11.7 years and energy services. To the extenta weighted average discount rate of 3.8% as of September 30, 2023. See Note T.
Future minimum lease payments under non-cancellable leases at September 30, 2023 were as follows:

(Millions of Dollars)Con EdisonCECONY
Year Ending September 30, (b)Operating LeasesFinance LeasesOperating LeasesFinance Leases
2024$65$1$65$1
202566—65—
202665—65—
202765—65—
202860—60—
All years thereafter4191419—
Total future minimum lease payments$740$2$739$1
Less: imputed interest(149)—(149)—
Total$591$2$590$1
Reported as of September 30, 2023
Operating lease liabilities (current) (a)$114$—$114$—
Operating lease liabilities (noncurrent) (a)477—476—
Other noncurrent liabilities—2—1
Total$591$2$590$1
(a)Amounts exclude operating lease liabilities of Broken Bow II ($7 million) that are classified as current liabilities exist under the contracts subject to these guarantees, such liabilities are included inheld for sale on Con Edison’sEdison's consolidated balance sheet.sheet as of September 30, 2023. See Note T.
Renewable Electric Production Projects —(b)Amounts exclude future minimum operating lease payments of Broken Bow II, of $3 million in total for years ended September 30, 2024 through 2028, and $10 million for all years thereafter, and imputed interest of $6 million.
The Utilities are lessors under certain leases whereby the Utilities own real estate and distribution poles and lease portions of them to others. Revenue under such leases was immaterial for Con Edison Con Edison Development, and Con Edison Solutions guarantee payments on behalf of their wholly-owned subsidiaries associated with their investment in, or development for others of, solar and wind energy facilities.
Other — Other guarantees include $70 million in guarantees provided by Con Edison to Travelers Insurance Company for indemnity agreements for surety bonds in connection with operation of solar energy facilities and energy service projects of Con Edison Development and Con Edison Solutions, respectively. Other guarantees also includes Con Edison's guarantee (subject to a $53 million maximum amount) of certain obligations of Con Edison Solutions under the agreement pursuant to which it sold its retail electric supply business. In addition, Con Edison issued a guarantee estimated at $5 million to the Public Utility Commission of Texas covering obligations of Con Edison Solutions as a retail electric provider. As part of the sale agreementCECONY 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.three and nine months ended September 30, 2023 and 2022.



Note I —J – Income Tax
Con Edison’s income tax expense decreased to $270was $144 million for the three months ended September 30, 2017 from $3142023 and $160 million for the three months ended September 30, 2016. Con Edison's effective tax rate for the three months ended September 30, 2017 and 2016 was 37 percent and 39 percent, respectively.2022. The decrease in Con Edison's effectiveincome tax rateexpense is primarily due to lower state income taxes,before income tax expense and higher flow-through of COVID-19 assistance benefits for uncollectible accounts, offset in part by a decreasechanges in state apportionments resulting in higher state income taxes and lower renewable energy tax benefits for plant-related flow through items.credits.


CECONY’s income tax expense increased to $242was $109 million for the three months ended September 30, 2017 from $2262023 and $124 million for the three months ended September 30, 2016. CECONY's effective2022. The decrease in income tax rate for the three months ended September 30, 2017 and 2016 was 38 percent and 37 percent, respectively. The increase in CECONY's effective tax rateexpense is primarily due to a decrease in taxhigher flow-through of COVID-19 assistance benefits for plant-related flow through itemsuncollectible accounts and lower research and developmenta favorable tax adjustment from a prior year tax return primarily due to an increase in the general business tax credits, offset in part by lower statehigher income taxes.before income tax expense and higher 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, 2023 and 2022 is as follows:




38                             

For the Three Months Ended September 30,
Con EdisonCECONY
(% of Pre-tax income)2023202220232022
STATUTORY TAX RATE
Federal21 %21 %21 %21 %
Changes in computed taxes resulting from:
State income tax, net of federal income tax benefit8 6 5 5 
Amortization of excess deferred federal income taxes(6)(6)(7)(7)
Cost of removal1 1 1 1 
Renewable energy credits— (1)— — 
Allowance for uncollectible accounts, net of COVID-19 assistance(2)— (2)1 
Impacts from the sale of the Clean Energy Businesses:
State taxes on sale of subsidiary, net of federal income tax benefit1 — — — 
Other(2)— (1)(1)
Effective tax rate21 %21 %17 %20 %

Con Edison’s income tax expense decreased to $599was $416 million for the nine months ended September 30, 2017 from $6022023 and $330 million for the nine months ended September 30, 2016. Con Edison's effective2022. The increase in income tax rateexpense is primarily due to higher income before income tax expense due to the gain on the sale of the Clean Energy Businesses ($214 million), lower renewable energy tax credits ($13 million), offset in part by higher flow-through of COVID-19 assistance benefits for uncollectible accounts ($19 million), tax benefits from the nine months ended September 30, 2017recognition of deferred unamortized investment tax credits ($105 million), and 2016 was 37 percent. The effective tax rate remained unchanged as lowerchanges in state apportionments, net of federal income taxes were offset by a decrease in tax benefits for plant-related flow through items.($27 million).


CECONY’s income tax expense increased to $551was $297 million for the nine months ended September 30, 2017 from $4912023 and $232 million for the nine months ended September 30, 2016. CECONY's effective2022. The increase in income tax expense is primarily due to higher income before income tax expense, lower flow-through tax benefits in 2023 for plant-related items, lower research and development credits from prior years, a remeasurement of state deferred tax assets and liabilities as a result of the enacted New York State legislation and a decrease in the amortization of excess deferred federal income taxes due to the TCJA, offset in part by lower allowance for uncollectible accounts and higher flow-through of COVID-19 assistance benefits for uncollectible accounts.

Reconciliation of the difference between income tax expense and the amount computed by applying the prevailing statutory income tax rate to income before income taxes for the nine months ended September 30, 20172023 and 20162022 is as follows:
39                             



For the Nine Months Ended September 30,
Con EdisonCECONY
(% of Pre-tax income)2023202220232022
STATUTORY TAX RATE
Federal21 %21 %21 %21 %
Changes in computed taxes resulting from:
State income tax, net of federal income tax benefit5 6 5 5 
Taxes attributable to non-controlling interest— 1 — — 
Cost of removal1 1 2 2 
Other plant-related items— — (1)(1)
Renewable energy credits(1)(2)— — 
Amortization of excess deferred federal income taxes(5)(8)(8)(10)
Impacts from the sale of the Clean Energy Businesses:
Changes in state apportionments, net of federal income taxes(1)— — — 
Deferred unamortized investment tax credit recognized on sale of subsidiary(4)— — — 
Other— — — — 
Effective tax rate16 %19 %19 %17 %

On March 1, 2023, Con Edison completed the sale of the Clean Energy Businesses, which was 38 percentaccounted for as a stock sale for GAAP purposes and 36 percent, respectively.a deemed sale of assets and liquidation for tax purposes. Con Edison's pre-tax gain on the sale of the Clean Energy Businesses was $866 million ($784 million, net of tax) for the nine months ended September 30, 2023. The sale included all assets, operations and projects of the Clean Energy Businesses with the exception of tax equity interests and a deferred project, that were treated as distributions to Con Edison. See Note S and Note T.

In April 2023, the IRS released Revenue Procedure 2023-15, which provides a safe harbor method of accounting that taxpayers may use to determine whether certain expenditures to maintain, repair, replace, or improve natural gas transmission and distribution property must be capitalized as improvements by the taxpayer or currently deducted for federal income tax purposes. This revenue procedure also provides procedures for taxpayers to obtain automatic consent to change their method of accounting to the safe harbor method of accounting permitted by this revenue procedure. Con Edison recorded a reduction in its current tax payable and an increase in CECONY's effectiveaccumulated deferred tax liabilities of $228 million ($204 million for CECONY) to reflect the cumulative impact of this change in accounting method for the Utilities.

In May 2023, New York State passed a law that extended the increase in the corporate franchise tax rate is primarily duefrom 6.5 percent to 7.25 percent for another three-year period, through tax year 2026, for taxpayers with taxable income greater than $5 million. The law also temporarily extended the business capital tax through tax year 2026, not to exceed an annual maximum tax liability of $5 million per taxpayer, with a decreasecorporation paying the higher of its franchise or income tax liability during the same period. New York State also passed a law establishing a permanent rate of 30 percent for the metropolitan transportation business tax surcharge. As a result of the sale of the Clean Energy Businesses in tax benefits for plant-related flow through items and lower research and development tax credits, offset in part by lower state income taxes.

2023, Con Edison anticipateshas New York State taxable income in excess of $5 million after using its entire New York State NOL carryforward, and therefore, the group is subject to the higher 7.25 percent rate (9.425 percent with the surcharge rate) on its taxable income for tax year 2023. As a federal consolidated net operating loss for 2017, primarily due to bonus depreciation. Con Edison expects to carryback a portionresult of this legislation, CECONY remeasured 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 assetassets and liabilities that would reverse before 2027 and recorded state deferred income tax expense (net of federal benefit) and an increase in accumulated deferred tax liabilities of $10 million for these tax attribute carryforwardsthe nine months ended September 30, 2023, all of which was recorded and no valuation allowance has been provided, as it is more likely than not thatin the deferred tax asset will be realized.second quarter of 2023.





40                             


Uncertain Tax Positions
At September 30, 2017,2023, the estimated liability for uncertain tax positions for Con Edison was $41$10 million ($217 million for CECONY). For the nine months ended September 30, 2023, Con Edison recognized $2 million of income tax expense mostly related to research and development credits on the Clean Energy Businesses. In the third quarter of 2023, Con Edison settled with the IRS on the research and development credits related to the Clean Energy Businesses for the 2016-2020 tax years which resulted in a reduction in both uncertain tax positions and related deferred tax assets for general business credit carryovers of $12 million. In addition, CECONY reversed $4 million in uncertain tax positions related to the same tax years that reduced its effective tax rate. 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 $21approximately $9 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’sEdison's effective tax rate. The amount related to CECONY is approximately $18$5 million, ($13 million, net of federal taxes), including $4 million, which,that, 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$10 million, ($18with $7 million netattributable to CECONY.

In October 2023, Con Edison reached a settlement with New York State and closed its open examinations for the 2010-2014 tax years and paid $6 million in interest and $4 million in income taxes after applying the remaining $12 million of federal taxes).a special deposit made in 2013. New York State tax returns for 2015-2021 remain open.


28

28





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, 2017,2023 and 2022, the Companies recognized an immaterial amount of interest expense and no penalties for uncertain tax positions in their consolidated income statements. At September 30, 20172023 and December 31, 2016,2022, 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, 2023 and 2022, 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, 2023For the Three Months Ended September 30, 2022
(Millions of Dollars)Revenues from contracts with customersOther revenues (a)Total operating revenuesRevenues from contracts with customersOther revenues (a)Total operating revenues
CECONY
Electric$3,195$28$3,223$3,165$(88)$3,077
Gas338(20)3184095414
Steam4634955358
Total CECONY$3,579$11$3,590$3,629$(80)$3,549
O&R
Electric2424246256(4)252
Gas31435291039
Total O&R$273$8$281$285$6$291
Clean Energy Businesses (c)
Renewables———197— 197
Energy services———13— 13
Develop/Transfer Projects———37— 37 
   Other———— 78 78 
Total Clean Energy Businesses$—$—$—$247$78 $325
Con Edison Transmission1—11— 1
Other (b)———— (1)(1)
Total Con Edison$3,853$19$3,872$4,162$3$4,165
(a) For the Utilities, this includes primarily revenue or negative revenue adjustments from alternative revenue programs, such as the revenue decoupling mechanisms under their New York electric and gas rate plans (see "Rate Plans" in Note B). For the Clean Energy Businesses, this includes revenue from wholesale services. On March 1, 2023, Con Edison completed the sale of substantially all of the assets of the Clean Energy Businesses. See Note S and Note T.
41                             

(b)    Other includes the parent company, Con Edison's tax equity investments, the deferred project held for sale and consolidated adjustments. See Note T.
(c) On March 1, 2023, Con Edison completed the sale of substantially all of the assets of the Clean Energy Businesses. See Note S and Note T.


For the Nine Months Ended September 30, 2023For the Nine Months Ended September 30, 2022
(Millions of Dollars)Revenues from contracts with customersOther revenues (a)Total operating revenuesRevenues from contracts with customersOther revenues (a)Total operating revenues
CECONY
Electric$7,449$273$7,722$7,525$(124)$7,401
Gas2,117232,1402,090372,127
Steam414114254368444
Total CECONY$9,980$307$10,287$10,051$(79)$9,972
O&R
Electric$574$14$588$595$(1)$594
Gas21142152172219
Total O&R$785$18$803$812$1$813
Clean Energy Businesses (c)
Renewables$68$—$68$524$—$524
Energy services7—757— 57
Develop/Transfer Projects7—756— 56 
   Other—4747— 220 220 
Total Clean Energy Businesses$82$47$129$637$220 $857
Con Edison Transmission$3$—$3$3— $3
Other (b)—(3)(3)— (6)(6)
Total Con Edison$10,850$369$11,219$11,503$136$11,639
(a) For the Utilities, this includes primarily revenue or negative revenue adjustments from alternative revenue programs, such as the revenue decoupling mechanisms under their New York electric and gas rate plans (see "Rate Plans" in Note B). For the Clean Energy Businesses, this includes revenue from wholesale services. On March 1, 2023, Con Edison completed the sale of substantially all of the assets of the Clean Energy Businesses. See Note S and Note T.
(b)    Other includes the parent company, Con Edison's tax equity investments, the deferred project held for sale and consolidated adjustments. See Note T.
(c) On March 1, 2023, Con Edison completed the sale of substantially all of the assets of the Clean Energy Businesses. See Note S and Note T.


Use of the Percentage-of-Completion Method
Sales and profits on each percentage-of-completion contract at the Clean Energy Businesses were recorded each month based on the ratio of actual cumulative costs incurred to the total estimated costs at completion of the contract, multiplied by the total estimated contract revenue, less cumulative revenues recognized in prior periods (the ‘‘cost-to-cost’’ method). The impact of revisions of contract estimates, that may result from contract modifications, performance or other reasons, were recognized on a cumulative catch-up basis in the period in which the revisions are made. On March 1, 2023, Con Edison completed the sale of substantially all of the assets of the Clean Energy Businesses. See Note S.


20232022
(Millions of Dollars)Unbilled contract revenue (a)Unearned revenue (b)Unbilled contract revenue (a)Unearned revenue (b)
Beginning balance as of January 1,$80$3$35$7
Additions (c)2—103—
Subtractions (c)783(d)814(d)
Ending balance as of September 30,$4(e)$—$57$3
(a)Unbilled contract revenue represents accumulated incurred costs and earned profits on contracts (revenue arrangements), that 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




42                             

are invoiced to customers according to contractual billing terms, that 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, that 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. Of the subtractions in 2023, $21 million and $1 million relate to the sale of the Clean Energy Businesses for unbilled contract revenue and unearned revenue, respectively. See (e) below.
(d)Of the subtractions from unearned revenue, $3 million and $4 million were included in the balances as of January 1, 2023 and 2022, respectively.
(e)Following the sale of the Clean Energy Businesses, Con Edison received substantially all contract revenue, net of certain costs incurred, for a battery storage project located in Imperial County, California. See Note S.


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 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 increases/(decreases) to the allowance for customer uncollectible accounts for Con Edison and CECONY were $1 million and $3 million, respectively, for the three months ended September 30, 2023 and $(46) million and $(45) million, respectively, for the nine months ended September 30, 2023. 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 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.

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 roll forward by major portfolio segment type for the three and nine months ended September 30, 2023 and 2022:
43                             

For the Three Months Ended September 30,
Con EdisonCECONY
Accounts receivable - customersOther receivablesAccounts receivable - customersOther receivables
(Millions of Dollars)20232022202320222023202220232022
Allowance for credit losses
Beginning Balance at July 1,$275$336$28$9$266$324$24$7
Recoveries34— — 34— — 
Write-offs(43)2(4)(2)(41)4(3)(1)
Reserve adjustments41(37)7241(35)61
Ending Balance September 30,$276$305$31$9$269$297$27$7

For the Nine Months Ended September 30,
Con EdisonCECONY
Accounts receivable - customersOther receivablesAccounts receivable - customersOther receivables
(Millions of Dollars)20232022202320222023202220232022
Allowance for credit losses
Beginning Balance at January 1,$322$317$10$22$314$304$7$19
Recoveries1113— — 1012— — 
Write-offs(135)(62)(5)(5)(130)(56)(3)(3)
Reserve adjustments783726(8)753723(9)
Ending Balance September 30,$276$305$31$9$269$297$27$7

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, 20172023 and 20162022 were as follows:
 
For the Three Months Ended September 30,
Operating
revenues		Inter-segment
revenues		Depreciation and
amortization		Operating
income/(loss)
(Millions of Dollars)20232022202320222023202220232022
CECONY
Electric$3,223$3,077$4$5$352$324$867$843
Gas3184142210893(108)(40)
Steam495819192524(80)(65)
Consolidation adjustments—— (25)(26)— — —— 
Total CECONY$3,590$3,549$—$— $485$441$679$738
O&R
Electric$246$252$—$— $19$1859$61
Gas3539—— 77(11)(10)
Total O&R$281$291$—$— $26$25$48$51
Clean Energy Businesses (a)$—$325$—$— $—$60—$104
Con Edison Transmission11—— 1— (2)(2)
Other (b)—(1)—— —(1)(3)(2)
Total Con Edison$3,872$4,165$—$— $512$525$722$889
 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
Gas268208214741(12)(28)
Steam626319222120(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
Gas2827—
—
55(11)(7)
Total O&R$234$240
$—

$—
$18$17$45$48
Clean Energy Businesses$177$350
$—
$(2)$19$11$29$125
Con Edison Transmission1—
—
—
—
—
(2)(1)
Other (a)—
(1)—
2—
(1)12
Total Con Edison$3,211$3,417
$—

$—
$337$305$873$940
(a) On March 1, 2023, Con Edison completed the sale of substantially all of the assets of the Clean Energy Businesses. As a result of this sale, the Clean Energy Businesses are no longer a principal segment. See Note S and Note T.

 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
Gas1,4211,11354137118362273
Steam448406556564625239
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
Gas172133—
—
15133328
Total O&R$667$630
$—

$—
$53$50$116$114
Clean Energy Businesses$460$998
$—
$7$54$30$63$184
Con Edison Transmission1—
—
—
—
—
(6)(1)
Other (a)(4)(1)—
(7)—
—
21
Total Con Edison$9,072$9,368
$—

$—
$998$905$2,066$2,097
(a)Parent(b) Other includes the parent company, Con Edison’s tax equity investments, the deferred project held for sale and consolidation adjustments. Other does not represent a business segment. See Note T.







29


44                             
Table of Contents

For the Nine Months Ended September 30,
Operating
revenues		Inter-segment
revenues		Depreciation and
amortization		Operating
income/(loss)
(Millions of Dollars)20232022202320222023202220232022
CECONY
Electric$7,722$7,401$14$14$1,035$994$1,292$1,233
Gas2,1402,12766319275533511
Steam42544455577472(75)(15)
Consolidation adjustments— — (75)(77)— — — — 
Total CECONY$10,287$9,972$— $— $1,428$1,341$1,750$1,729
O&R
Electric$588$594$— $— $56$53$73$85
Gas215219— — 22202725
Total O&R$803$813$— $— $78$73$100$110
Clean Energy Businesses (a)$129$857$— $— $—$178$37$248
Con Edison Transmission33— — 1 1 (6)(8)
Other (b)(3)(6)— — (1)— 864(5)
Total Con Edison$11,219$11,639$—$— $1,506$1,593$2,745$2,074
(a) On March 1, 2023, Con Edison completed the sale of substantially all of the assets of the Clean Energy Businesses. As a result of this sale, the Clean Energy Businesses are no longer a principal segment. See Note S and Note T.
(b) Other includes the parent company, Con Edison’s tax equity investments, the deferred project held for sale and consolidation adjustments. Other does not represent a business segment. See Note T.

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 do not elect hedge accounting. The Companies use economic hedges to manage commodity price risk in accordance with provisions set by state regulators. The volume of hedging activity at the Utilities is dependent upon the forecasted volume of physical commodity supply to meet customer needs, and program costs or benefits are recovered from or credited to full-service customers, respectively. 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.rules. On March 1, 2023, Con Edison completed the sale of substantially all of the assets of the Clean Energy Businesses. See Note S and Note T.

45                             

The fair values of the Companies’ commodity derivatives including the offsetting of assets and liabilities on the consolidated balance sheet at September 30, 20172023 and December 31, 20162022 were:
 
(Millions of Dollars)20232022
Balance Sheet LocationGross 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$115$(63)$52(b)$378$(332)$46(b)
Noncurrent63(37)26193(108)85
Total fair value of derivative assets held and used178(100)78571(440)131
Current - assets held for sale (d)———93(8)85(c)(d)
Noncurrent - assets held for sale (d)———831194(c)(d)
Total fair value of derivative assets$178$(100)$78$747$(437)$310
Fair value of derivative liabilities
Current$(135)$64$(71)(b)$(198)$166$(32)(b)
Noncurrent(108)40(68)(49)36(13)
Total fair value of derivative liabilities held and used$(243)$104$(139)$(247)$202$(45)
Current - liabilities held for sale (d)———(31)6(25)(d)
Noncurrent - liabilities held for sale (d)———(3)(8)(11)(d)
Total fair value of derivative liabilities$(243)$104$(139)$(281)$200$(81)
Net fair value derivative assets/(liabilities)$(65)$4$(61)$466$(237)$229
CECONY
Fair value of derivative assets
Current$107$(60)$47(b)$350$(312)$38(b)
Noncurrent60(34)26176(96)80
Total fair value of derivative assets$167$(94)$73$526$(408)$118
Fair value of derivative liabilities
Current$(129)$61$(68)(b)$(189)$160$(29)
Noncurrent(98)38(60)(43)34(9)
Total fair value of derivative liabilities$(227)$99$(128)$(232)$194$(38)
Net fair value derivative assets/(liabilities)$(60)$5$(55)$294$(214)$80
(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)
Noncurrent64(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)
Noncurrent57(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, 2023, margin deposits for Con Edison ($10 million and $(15) million) were classified as derivative assets and derivative liabilities, respectively, and for CECONY ($9 million and $(11) million) were classified as derivative assets and derivative liabilities, respectively, on the consolidated balance sheet, but not included in the table. At December 31, 2022 margin deposits for Con Edison and CECONY of $13 million were classified as derivative assets, and ($(10) million and $(6) million, respectively) were classified as derivative liabilities 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 $75 million in noncurrent assets, $31 million in current assets. At December 31, 2022, the Clean Energy Businesses had interest rate swaps with notional amounts of $982 million. The expiration dates of the swaps ranged from 2025-2041.
(d)Amounts represent derivative assets and liabilities included in current assets and current liabilities held for sale, respectively, on Con Edison's consolidated balance sheet as of December 31, 2022. On March 1, 2023, Con Edison completed the sale of substantially all of the assets of the Clean Energy Businesses. See Note S and Note T.

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.





46                             

The Clean Energy Businesses recordrecorded 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.occurred. The Clean Energy Businesses recorded 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. On March 1, 2023, Con Edison completed the sale of substantially all of the assets of the Clean Energy Businesses. See Note S and Note T.
 


30

30




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, 20172023 and 2016:2022:

For the Three Months Ended September 30,
          Con Edison          CECONY
(Millions of Dollars)Balance Sheet Location2023202220232022
Pre-tax gains/(losses) deferred in accordance with accounting rules for regulated operations:
CurrentRegulatory liabilities$(11)$31$(9)$30
NoncurrentRegulatory liabilities(11)23(9)17
Total deferred gains/(losses)$(22)$54$(18)$47
CurrentRegulatory assets$22$41$20$37
CurrentRecoverable energy costs(98)168(94)152
NoncurrentRegulatory assets(34)49(29)45
Total deferred gains/(losses)$(110)$258$(103)$234
Net deferred gains/(losses)$(132)$312$(121)$281
Income Statement Location
Pre-tax gains/(losses) recognized in income
Gas purchased for resale$—$(2)$— $— 
Non-utility revenue—(1)— — 
Other operations and maintenance expense1 (1)1 (1)
Other interest expense (a)—49— — 
Total pre-tax gains/(losses) recognized in income$1$45$1 ($1)
(a)Comprised of amounts related to interest rate swaps of the Clean Energy Businesses. On March 1, 2023, Con Edison completed the sale of substantially all of the assets of the Clean Energy Businesses. See Note S and Note T.


For the Nine Months Ended September 30,
          Con Edison          CECONY
(Millions of Dollars)Balance Sheet Location2023202220232022
Pre-tax gains/(losses) deferred in accordance with accounting rules for regulated operations:
CurrentRegulatory liabilities$(221)$379$(203)$350
NoncurrentRegulatory liabilities(128)91(113)79
Total deferred gains/(losses)$(349)$470$(316)$429
CurrentRegulatory assets$47$50$45$45
CurrentRecoverable energy costs(474)357(449)324
NoncurrentRegulatory assets(68)19(63)18
Total deferred gains/(losses)$(495)$426$(467)$387
Net deferred gains/(losses)$(844)$896$(783)$816
Income Statement Location
Pre-tax gains/(losses) recognized in income
Gas purchased for resale$4$1$— $— 
Non-utility revenue17(23)— — 
Other operations and maintenance expense1 41 4 
Other interest expense (a)5158— — 
Total pre-tax gains/(losses) recognized in income$27$140$1 $4 
(a)Comprised of amounts related to interest rate swaps of the Clean Energy Businesses. On March 1, 2023, Con Edison completed the sale of substantially all of the assets of the Clean Energy Businesses. See Note S and Note T.

47                             
  For the Three Months Ended September 30,
            Con Edison           CECONY
(Millions of Dollars)Balance Sheet Location2017
 2016 2017
2016
Pre-tax gains/(losses) deferred in accordance with accounting rules for regulated operations:   
CurrentDeferred derivative gains$(4) $(1) $(3)$(3)
NoncurrentDeferred derivative gains1 (2) 1—
Total deferred gains/(losses) $(3) $(3) $(2)$(3)
CurrentDeferred derivative losses$(11) $(19) $(9)$(18)
CurrentRecoverable energy costs(40) (39) (38)(35)
NoncurrentDeferred 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)
$—

$—
 Gas purchased for resale(47) (38) —
—
 Non-utility revenue5(a)(2)(b)—
—
Total pre-tax gains/(losses) recognized in income$(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 Location2017
 2016 2017
2016
Pre-tax gains/(losses) deferred in accordance with accounting rules for regulated operations:   
CurrentDeferred derivative gains$(26) $6 $(22)$2
NoncurrentDeferred derivative gains(2) (1) (2)(1)
Total deferred gains/(losses) $(28) $5 $(24)$1
CurrentDeferred derivative losses$10 $19 $11$16
CurrentRecoverable energy costs(125) (163) (116)(148)
NoncurrentDeferred 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)
$—

$—
 Gas purchased for resale(161) (72) —
—
 Non-utility revenue11(a)15(b)—
—
Total pre-tax gains/(losses) recognized in income$(150) $(163) 
$—

$—
(a)For the nine months ended September 30, 2017, Con Edison recorded an unrealized pre-tax gain in non-utility operating revenue ($2 million).
(b)For the nine months ended September 30, 2016, Con Edison recorded unrealized pre-tax gains and losses in non-utility operating revenue ($3 million loss) and purchased power expense ($11 million gain).




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Table of Contents

The following table presents the hedged volume of Con Edison’s and CECONY’s commodity derivative transactions at September 30, 2017:2023:
 
Electric Energy
(MWh) (a)(b)		Capacity (MW) (a)Natural Gas
(Dt) (a)(b)		Refined Fuels
(gallons)
Con Edison30,376,045 49,800 353,360,000 2,520,000 
CECONY27,714,325 39,000 334,950,000 2,520,000 
 
Electric Energy
(MWh) (a)(b)
Capacity (MW) (a)
Natural Gas
(Dt) (a)(b)
Refined Fuels
(gallons)
Con Edison32,596,372
6,790
166,913,644
672,000
CECONY30,492,575
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.
(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.

(b)Excludes electric congestion and gas basis swap contracts that 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.Utilities. 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, 2017,2023, Con Edison and CECONY had $80$76 million and $8$72 million, respectively, of credit exposure in connection with open energy supply net receivables and hedging activities, net of collateral, respectively.collateral. Con Edison’s net credit exposure consisted of $23$6 million with investment-grade counterparties, $23$18 million with commodity exchange brokers, and $52 million with non-investment grade/non-rated counterparties, $19 million with independent system operators and $15 million with commodity exchange brokers.counterparties. CECONY’s net credit exposure consisted of $7$3 million with commodity exchange brokers, $17 million with investment-grade counterparties and $1$52 million with investment-grade counterparties.non-investment grade/non-rated counterparties. On March 1, 2023, Con Edison completed the sale of substantially all of the assets of the Clean Energy Businesses. See Note S and Note T.
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, 2017:2023:
(Millions of Dollars)Con Edison (a)CECONY (a)
Aggregate fair value – net liabilities$133$125
Collateral posted7367
Additional collateral (b) (downgrade one level from current ratings)5146
Additional collateral (b)(c) (downgrade to below investment grade from current ratings)137126
(a)Non-derivative transactions for the purchase and sale of electricity and gas and qualifying derivative instruments, that 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 are no longer extended unsecured credit for such purchases, the Companies would be required to post $1 million of additional collateral at September 30, 2023. For certain other such non-derivative transactions, the Companies would have been required to post collateral under certain circumstances, including in the event counterparties had reasonable grounds for insecurity.
(Millions of Dollars)Con Edison (a) CECONY (a) 
Aggregate fair value – net liabilities$148 $131 
Collateral posted61 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)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)(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 that terminates in June 2024, pursuant to which it pays a fixed-rate of 2.0855 percent and receives a LIBOR-based variable rate. The fair value amounts represent unrealized losses, net of this interest rate swap was immaterial as ofany 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 liability2023, 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.$19 million.




32

32






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




48                             

determined based on inputs, whichthat 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, whichthat 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.
 


49                             
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Table of Contents

Assets and liabilities measured at fair value on a recurring basis as of September 30, 20172023 and December 31, 20162022 are summarized below.
 
  20232022
(Millions of Dollars)Level 1Level 2Level 3Netting
Adjustment (e)		TotalLevel 1Level 2Level 3Netting
Adjustment (e)		Total
Con Edison
Derivative assets:
Commodity (a)(b)(c)$21$137$5$(75)$88$84$476$2$(420)$142
Commodity held for sale (g)— — — — — 6 34 31 2 73 
Interest rate swaps (a)(b)(c)(f)(g)— — — — — — 106 — — 106 
Other (a)(b)(d)462121— — 583437116— — 553
Total assets$483$258$5$(75)$671$527$732$33$(418)$874
Derivative liabilities:
Commodity (a)(b)(c)$16$196$15$(72)$155$18$204$16$(184)$54
Commodity held for sale (g)— — — — —8 242 2 36
Total liabilities$16$196$15$(72)$155$26$228$18$(182)$90
CECONY
Derivative assets:
Commodity (a)(b)(c)$21$130$3$(73)$81$83$434$2$(388)$131
Other (a)(b)(d)450114— — 564422110— — 532
Total assets$471$244$3$(73)$645$505$544$2$(388)$663
Derivative liabilities:
Commodity (a)(b)(c)$15$187$10$(73)$139$18$198$8$(180)$44
Total liabilities$15$187$10$(73)$139$18$198$8$(180)$44
  20172016
(Millions of Dollars)Level 1Level 2Level 3
Netting
Adjustment (e)
TotalLevel 1Level 2Level 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)271118—
—
389222111—
—
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)248113—
—
361200106—
—
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
(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 $10 million of commodity derivative assets transferred from level 3 to level 2 during the nine months ended September 30, 2023 because of availability of observable market data due to the decrease in the terms of certain contracts from beyond three years as of December 31, 2022 to less than three years as of September 30, 2023. Con Edison and CECONY had an immaterial amount of derivative liabilities and $10 million and $9 million of commodity derivative assets, respectively, transferred from level 3 to level 2 during the year ended December 31, 2022 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, 2022 to less than three years as of December 31, 2022.
(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.

(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 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, 2023 and December 31, 2022, 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.
(f)See Note N.
(g)On March 1, 2023, Con Edison completed the sale of substantially all of the assets of the Clean Energy Businesses. See Note S and Note T.

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. Under the Companies’ policies and procedures, multiple independent sources of information are obtained for forward price curves used to value commodity derivatives. Fair value and changes in fair value of commodity derivatives 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.Utilities. The risk management group reports to the Companies’ Vice President and Treasurer.
 




34


50                             
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Table of Contents

 Fair Value of Level 3 at September 30, 2017
Valuation
Techniques
Unobservable InputsRange
 (Millions of Dollars)
Con Edison – Commodity
Electricity$(21)Discounted Cash FlowForward energy prices (a)$19.00-$76.25 per MWh
 
Discounted Cash FlowForward capacity prices (a)$1.26-$9.47 per kW-month
Transmission Congestion Contracts/Financial Transmission Rights1Discounted Cash FlowDiscount 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 FlowForward energy prices (a)$20.50-$76.25 per MWh
Transmission Congestion Contracts1Discounted Cash FlowDiscount to adjust auction prices for inter-zonal forward price curves (b)50.0%
Total CECONY—Commodity$(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, 2023Valuation
Techniques		Unobservable InputsRange
(Millions of Dollars)
Con Edison – Commodity
Electricity$(6)Discounted Cash FlowForward energy prices (a)$33.95-$137.60 per MWh
Electricity(5)Discounted Cash FlowForward capacity prices (a)$1.90-$11.75 per kW-month
(b)Transmission Congestion ContractsGenerally, increases/(decreases) in this input in isolation would result in a lower/(higher) fair value measurement.1Discounted Cash FlowInter-zonal forward price curves adjusted for historical zonal losses (b)$0.09-$3.80 per MWh
Total Con Edison—Commodity$(10)
CECONY – Commodity
Electricity$(4)Discounted Cash FlowForward energy prices (a)$37.55-$137.60 per MWh
Electricity(4)Discounted Cash FlowForward capacity prices (a)$1.90-$11.75 per kW-month
Transmission Congestion Contracts1Discounted Cash FlowInter-zonal forward price curves adjusted for historical zonal losses (b)$0.09-$3.80 per MWh
Total CECONY—Commodity$(7)
(a)Generally, increases/(decreases) in this input in isolation would result in a higher/(lower) fair value measurement.
(b)Generally, increases/(decreases) in this input in isolation would result in a lower/(higher) fair value measurement.

The table listed below provides a reconciliation of the beginning and ending net balances for assets and liabilities measured at fair value as of September 30, 20172023 and 20162022 and classified as Level 3 in the fair value hierarchy:
 

For the Three Months Ended September 30,
            Con Edison          CECONY
(Millions of Dollars)2023202220232022
Beginning balance as of July 1,$(7)$9$(4)$(11)
Included in earnings2 (10)1 (1)
Included in regulatory assets and liabilities(3)14 (3)11 
Purchases— 1 — — 
Settlements(2)2 (1)1 
Transfer out of level 3— — — — 
Ending balance as of September 30,$(10)$16 $(7)$—

For the Three Months Ended September 30,For the Nine Months Ended September 30,
 ��        Con Edison          CECONY           Con Edison          CECONY
(Millions of Dollars)2017
20162017
2016
(Millions of Dollars)2023202220232022
Beginning balance as of July 1,$(10)$5$(6)$2
Beginning balance as of January 1,Beginning balance as of January 1,$15$(11)$(6)$(7)
Included in earnings7(4)1—
Included in earnings(2)13(1)(3)
Included in regulatory assets and liabilities(13)(5)(8)(3)Included in regulatory assets and liabilities16 710 5 
Sales—
4—
—
PurchasesPurchases— 3 — — 
Settlements(4)1(1)1Settlements— 3 — 4 
Decrease due to the sale of the Clean Energy Businesses (a)Decrease due to the sale of the Clean Energy Businesses (a)(29)—— — 
Transfer out of level 3Transfer out of level 3(10)1 (10)1 
Ending balance as of September 30,$(20)$1$(14)
$—
Ending balance as of September 30,$(10)$16 $(7)$—

(a) On March 1, 2023, Con Edison completed the sale of substantially all of the assets of the Clean Energy Businesses. See Note S and Note T.
 For the Nine Months Ended September 30,
            Con Edison          CECONY
(Millions of Dollars)2017
20162017
2016
Beginning balance as of January 1,$1$6$1$8
Included in earnings8(1)1(1)
Included in regulatory assets and liabilities(21)(11)(14)(6)
Purchases1211
Sales—
4—
—
Settlements(9)1(3)(2)
Ending balance as of September 30,$(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.

51                             

For the Clean Energy Businesses, realized and unrealized gains and losses on Level 3 commodity derivative assets and liabilities are reportedreported in non-utility revenues (immaterial for both periods) and purchased power costs ($4 million gain and $5 million loss) on the consolidated income statement forstatement. The Clean Energy Businesses recorded an $8 million loss. For the three months ended September 30, 20172022 and 2016, respectively. Realizeda $17 million loss and unrealized gains and losses on Level 3 commodity derivative assets and liabilities are reported in non-utility revenues (immaterial for both periods) and purchased power costs ($3$20 million gain and $6 million loss) on the consolidated income statement for the nine months ended September 30, 20172023 and 2016,2022, respectively. The change in fair value relating to Level 3 commodity derivativeOn March 1, 2023, Con Edison completed the sale of substantially all of the assets of the Clean Energy Businesses and liabilities held at September 30, 2017amounts for 2023 are shown through the date of sale. See Note S 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 endedNote T.



35

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, respectively.
Note M —P – Variable Interest Entities
Con Edison entersThe 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 retainsthe 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 were2022, a request was made of these counterpartiesthis 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 contractsthis contract constitute CECONY’s maximum exposure to loss with respect to the potential VIEs.VIE.


The following table summarizes the VIEs in which Con Edison Development has entered into as of September 30, 2017:
Project Name (a)
Generating
Capacity (b)
(MW AC)
Power Purchase Agreement Term (in Years)
Year of
Initial
Investment
Location
Maximum
Exposure to Loss
(Millions of Dollars) (c)
Copper Mountain Solar 3128202014Nevada$175
Mesquite Solar 183202013Arizona102
Copper Mountain Solar 275252013Nevada83
California Solar55252012California64
Broken Bow II38252014Nebraska44
Texas Solar 432252014Texas47
(a) With the exception of Texas Solar 4, Con Edison’s ownership interest is 50 percent and these projects are accounted for using the equity method of accounting. With the exception of Texas Solar 4, Con Edison is not the primary beneficiary since the power to direct the activities that most significantly impact the economics of the entities are shared equally between Con Edison Development and third parties. Con Edison’s ownership interest in Texas Solar 4 is 80 percent and is consolidated in the financial statements. Con Edison is the primary beneficiary since the power to direct the activities that most significantly impact the economics of Texas Solar 4 is held by Con Edison Development.
(b) Represents Con Edison Development’s ownership interest in the project.
(c) For investments accounted for under the equity method, maximum exposure is equal to the carrying value of the investment on the consolidated balance sheet. For consolidated investments, such as Texas Solar 4, maximum exposure is equal to the net assets of the project on the consolidated balance sheet less any applicable noncontrolling interest ($7 million for Texas Solar 4). Con Edison did not provide any financial or other support during the three and nine months ended September 30, 2017 that was not previously contractually required.


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

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


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

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

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

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

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

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

In January 2017, the FASB issued amendments to the guidance for Business Combinations through ASU 2017-01, “Business Combinations (Topic 805): Clarifying the Definition of a Business.” The amendments in this update clarify the definition of a business and provide guidance on evaluating whether transactions should be accounted for as acquisitions (or disposals) of assets or businesses. For public entities, the amendments are effective for reporting periods beginning after December 15, 2017. Early adoption is permitted. The application of this guidance is not expected to have a material impact on the Companies’ financial position, results of operations and liquidity.

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

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


37

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

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

In March 2017, 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.



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Item 2: Management’s Discussion and Analysis of Financial Condition and Results of Operations
This combined management’s discussion and analysis of financial condition and results of operations (MD&A) relates to the consolidated financial statements (the Third 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, the MD&A in Item 7 of the Companies’ combined Annual Report on Form 10-K for the year ended December 31, 2016 (File Nos. 1-14514 and 1-1217, the Form 10-K) and the MD&A in Part 1, Item 2 of the Companies' combined Quarterly Reports on Form 10-Q for the quarterly periods ended March 31, 2017 and June 30, 2017 (File Nos. 1-14514 and 1-1217).

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

Con Edison, incorporated in New York State in 1997, is a holding company that owns all of the outstanding common stock of CECONY, Orange and Rockland Utilities, Inc. (O&R), Con Edison Clean Energy Businesses, Inc. and Con Edison Transmission, Inc. As used in this report, the term the “Utilities” refers to CECONY and O&R.
 ceiorgchartvfa05.jpg
Con Edison’s principal business operations are those of CECONY, O&R, the Clean Energy Businesses and Con Edison Transmission. CECONY’s principal business operations are its regulated electric, gas and steam delivery businesses. O&R’s principal business operations are its regulated electric and gas delivery businesses. The Clean Energy Businesses develop, own and operate renewable and energy infrastructure projects and provide energy-related products and services to wholesale and retail customers. Con Edison Transmission invests in electric transmission facilities and gas pipeline and storage facilities.

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






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

During the summer of 2017, electric peak demand in CECONY's service area was 12,321 MW (which occurred on July 20, 2017). At design conditions, electric peak demand in the company's service area would have been approximately 13,270 MW in 2017 compared to the company's forecast of 13,470 MW. The company's five-year forecast of average annual growth of the electric peak demand in its service area at design conditions is approximately 0.1 percent for 2018 to 2022 (as compared to approximately 0.2 percent for 2017 to 2021).
Gas
CECONY delivers gas to approximately 1.1 million customers in Manhattan, the Bronx, parts of Queens and most of Westchester County.

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

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

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

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

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

Clean Energy Businesses
On March 1, 2023, Con Edison completed the sale of substantially all of the assets of the Clean Energy Businesses, Inc.including CED Nevada Virginia and the Tax Equity Projects, defined below. See Note S.

In connection with the sale, Con Edison retained a tax equity interest valued at $20 million in two renewable electric projects located in Virginia that is accounted for as an equity method investment and that represents the maximum exposure to loss for this investment. See Note S. The earnings of the projects, once in service, are determined using the hypothetical liquidation at book value (HLBV) method of accounting and resulted in losses of $4 million ($3 million, after tax) and $8 million ($6 million, after tax) for the three and nine months ended September 30, 2023, respectively. Con Edison is not the primary beneficiary since the power to direct the activities that most significantly impact the economics of the renewable electric projects is not held by Con Edison.

Con Edison also retained its $11 million equity interest in the Crane solar project that was valued at $0 as of September 30, 2023 and that is accounted for as an equity method investment. See Note S. The earnings of the project are determined using the HLBV method of accounting and were not material for the three and nine months ended September 30, 2023 or 2022. Con Edison is not the primary beneficiary since the power to direct the activities that most significantly impact the economics of the renewable electric project is not held by Con Edison.

HLBV Accounting
Con Edison has determined that the use of HLBV accounting is reasonable and appropriate to attribute income and loss to the tax equity investors. Using the HLBV method, Con Edison's earnings from the projects are adjusted to reflect the income or loss allocable to the tax equity investors calculated based on how the project would allocate and distribute its cash if it were to sell all of its assets for their carrying amounts and liquidate at a particular point in time. Under the HLBV method, Con Edison calculates the liquidation value allocable to the tax equity investors at the beginning and end of each period based on the contractual liquidation waterfall and adjusts its income for the period to reflect the change in the 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 had less than a 100 percent membership interest at December 31, 2022 and has no interest subsequent to the sale of




52                             

the Clean Energy Business on March 1, 2023. Con Edison was the primary beneficiary since the power to direct the activities that most significantly impact the economics of CED Nevada Virginia was held by Con Edison. The HLBV method of accounting resulted in an immaterial amount of income/(loss) for Con Edison and the tax equity investor for the nine months ended September 30, 2023; the amounts for the three wholly-owned subsidiaries:and nine months ended September 30, 2022 are presented below. On March 1, 2023, Con Edison completed the sale of substantially all of the assets of the Clean Energy Businesses. See Note S.
For the Three Months Ended September 30,For the Nine Months Ended September 30,
(Millions of Dollars)20222022
Income/(Loss) attributable to tax equity investor$6$(36)
   Income/(Loss) attributable to tax equity investor after tax5(27)
Income/(Loss) attributable to Con Edison(7)32
  Income/(Loss) attributable to Con Edison after tax(5)24

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 were consolidated entities in which Con Edison had less than a 100 percent membership interest at December 31, 2022 and has no interest in subsequent to the sale of the Clean Energy Businesses on March 1, 2023. Con Edison was the primary beneficiary since the power to direct the activities that most significantly impact the economics of the Tax Equity Projects was held by Con Edison. 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 an immaterial amount of income/(loss) for Con Edison and the tax equity investor for the nine months ended September 30, 2023; the amounts for the three and nine months ended September 30, 2022 are presented below. On March 1, 2023, Con Edison completed the sale of substantially all of the assets of the Clean Energy Businesses. See Note S.


For the Three Months Ended September 30,For the Nine Months Ended September 30,
(Millions of Dollars)20222022
Income/(Loss) attributable to tax equity investor$—$(7)
   Income/(Loss) attributable to tax equity investor after tax—(5)
Income/(Loss) attributable to Con Edison1644
  Income/(Loss) attributable to Con Edison after tax1233

At December 31, 2022, Con Edison’s consolidated balance sheet included the following amounts associated with its VIEs:
Tax Equity Projects
Great Valley Solar
(c)(d)		Copper Mountain - Mesquite Solar
 (c)(e)		CED Nevada Virginia (c)(f)
(Millions of Dollars)202220222022
Assets held for sale (a)$305$580$686
Total assets (a)$305$580$686
Liabilities held for sale (b)2081331
Total liabilities (b)$20$81$331
(a)The assets of the Tax Equity Projects and CED Nevada Virginia represent assets of a consolidated VIE that can be used only to settle obligations of the consolidated VIE. Amounts shown for 2022 are included in current assets held for sale on Con Edison's consolidated balance sheet as of December 31, 2022. On March 1, 2023, Con Edison completed the sale of substantially all of the assets of the Clean Energy Businesses. See Note S and Note T. For the disposal of the noncontrolling interest, see Con Edison's Consolidated Statement of Equity.
(b)The liabilities of the Tax Equity Projects and CED Nevada Virginia represent liabilities of a consolidated VIE for which creditors do not have recourse to the general credit of the primary beneficiary. Amounts shown for 2022 are included in current liabilities held for sale on Con Edison's consolidated balance sheet as of December 31, 2022. On March 1, 2023, Con Edison completed the sale of substantially all of the
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assets of the Clean Energy Businesses. See Note S and Note T. For the disposal of the noncontrolling interest, see Con Edison's Consolidated Statement of Equity.
(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 $67 million at December 31, 2022.
(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 $94 million at December 31, 2022.
(f)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 $39 million at December 31, 2022.


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 ($19,113 million and $1,057 million, respectively), at September 30, 2023, 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 and nine months ended September 30, 2023 and 2022 were as follows:
For the Three Months Ended September 30,
CECONY
(Millions of Dollars)20232022
Cost of services provided$39 $35
Cost of services received$21 $19
For the Nine Months Ended September 30,
CECONY (a)
(Millions of Dollars)20232022
Cost of services provided$105 $101
Cost of services received$61 $56
(a) On March 1, 2023, Con Edison completed the sale of substantially all of the assets of the Clean Energy Businesses. See Note S and Note T.
In addition, CECONY and O&R have joint gas supply arrangements in connection with which CECONY sold to O&R, $14 million and $26 million of natural gas for the three months ended September 30, 2023 and 2022, respectively, and $60 million and $97 million for the nine months ended September 30, 2023 and 2022, respectively. These amounts are net of the effect of related hedging transactions.
At September 30, 2023 and December 31, 2022, CECONY's net receivable (payable) from/to Con Edison for income taxes was $418 million and $(89) million, respectively.

The Utilities perform work and incur expenses on behalf of New York Transco. Con Edison Transmission has a 45.7 percent interest in New York Transco's New York Energy Solution project and a 41.7 percent interest in New York Transco's share of the Propel NY Energy project that is jointly owned with the New York Power Authority. The Utilities bill New York Transco for such work and expenses in accordance with established policies. For the three months ended September 30, 2023 and 2022, the amounts billed by the Utilities to New York Transco were




54                             

$1 million and $2 million, respectively, and for the nine months ended September 30, 2023 and 2022, the amounts were $7 million and $6 million, respectively.

CECONY has a 20-year transportation contract with the Mountain Valley Pipeline, LLC (MVP) for 250,000 dekatherms per day of capacity. Con Edison Transmission has an interest in MVP. See "Investments - 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 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. CECONY has not incurred costs under the contract.

FERC has authorized CECONY to lend funds to O&R for a period of no more than 12 months, in an amount not to exceed $250 million, at prevailing market rates. At September 30, 2023 and December 31, 2022 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 and nine months ended September 30, 2022, the Clean Energy Businesses realized gains of $1 million and $2 million, respectively, under these contracts. On March 1, 2023, Con Edison completed the sale of substantially all of the assets of the Clean Energy Businesses. As a result of the sale, the Clean Energy Businesses are no longer recognized as a related party. See Note S and Note T.

Note R – New Financial Accounting Standards
In March 2020, the FASB issued ASU 2020-04, Reference Rate Reform (Topic 848): Facilitation of the Effects of Reference Rate Reform on 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 agreements, after 2021. The United Kingdom's Financial Conduct Authority (the UK FCA) ceased publication of U.S. Dollar LIBOR after December 31, 2021 for one-week and two-month U.S. Dollar LIBOR tenors, and on June 30, 2023 it ceased publishing the overnight and twelve-month U.S. Dollar LIBOR. The UK FCA expects to cease publishing the one-month, three-month and six-month U.S. Dollar LIBOR after September 2024. ASU 2020-04 provides entities with optional expedients and exceptions for applying generally accepted accounting principles to contract modifications and hedging relationships, subject to meeting certain criteria, that reference LIBOR or another reference rate expected to be discontinued. In January 2021, the FASB issued amendments to the guidance through ASU 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. On December 31, 2022, ASU 2022-06, Reference Rate Reform (Topic 848):
Deferral of the Sunset Date of Topic 848 was issued, which extended the period of time entities can utilize the
reference rate reform relief guidance under ASU 2020-04 from December 31, 2022 to December 31, 2024.The Companies do not expect the new guidance to have a material impact on their financial position, results of operations and liquidity.

In March 2023, the FASB issued amendments to the guidance on accounting for Investments—Equity Method and Joint Ventures (Topic 323) through ASU 2023-02. The amendments would expand the use of the proportional amortization method of income recognition. The Companies do not expect the new guidance to have a material impact on their financial position, results of operations and liquidity.


Note S – Dispositions
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During the first nine months of 2022, Con Edison considered strategic alternatives with respect to the Clean Energy Businesses. On October 1, 2022, following the conclusion of such review and to allow for continued focus on the Utilities and their clean energy transition, 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 for a total of $6,800 million, subject to closing adjustments. On March 1, 2023, Con Edison completed the sale of substantially all of the assets of the Clean Energy Businesses to RWE for $3,993 million. The preliminary purchase price at closing was 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) downward to the extent that the net working capital varied from a set target, (v) upward to the extent that capital expenditures incurred prior to the closing of the transaction varied from a set budget, and (vi) downward by the value allocated to Broken Bow II, a project that was not able to be conveyed to RWE upon closing of the transaction. The final purchase price is subject to customary adjustments for timing differences and a final valuation report, among other factors; the process to finalize the purchase price is ongoing. The transaction was completed at arm’s length and RWE was not, and will not be, considered a related party to Con Edison.

Con Edison's preliminary gain on the sale of the Clean Energy Businesses was $866 million ($784 million, after tax) for the nine months ended September 30, 2023, including an immaterial amount for the three months ended September 30, 2023 resulting from certain finalization adjustments, and remains subject to true-up for the finalization adjustments described above. The portion of the gain attributable to the non-controlling interest retained in certain tax-equity projects was not material. The sale included all assets, operations and projects of the Clean Energy Businesses with the exception of tax equity interests in three projects, described below, and one deferred project, Broken Bow II, a 75MW nameplate capacity wind power project located in Nebraska. See Note T. Transfer of the project is dependent on one outstanding counterparty consent, and if and when such consent is obtained within two years of the sale of the Clean Energy Businesses, i.e., by February 28, 2025, the project will transfer. RWE Renewables Americas, LLC is operating the facility on behalf of Con Edison pursuant to certain service agreements, for which the fees are not material.

Con Edison retained the Clean Energy Businesses' tax equity investment interest in the Crane solar project and another tax equity investment interest in two solar projects located in Virginia. These tax equity partnerships produce renewable energy tax credits that can be used to reduce Con Edison’s federal income tax in the year in which the projects are placed in service. These tax credits would be subject to recapture, in whole or in part, if the assets were sold within a five-year period beginning on the date on which the assets are placed in service. Con Edison will continue to employ HLBV accounting for its interests in these tax equity partnerships. The combined carrying value of the retained tax equity interests is approximately $13 million at September 30, 2023.

Con Edison has also retained any post-sale deferred income taxes (federal and state income taxes, including tax attributes), any valuation allowances associated with the deferred tax assets, all current federal taxes and New York State taxes and the estimated liability for uncertain tax positions. The unamortized deferred investment tax credits of the Clean Energy Businesses were recognized in full upon the completion of the sale of the Clean Energy Businesses.

Concurrent with entering into the purchase and sale agreement, Con Edison incurred costs in the normal course of the sale process. Transaction costs of $48 million ($35 million after-tax) were recorded in 2022, and $11 million ($8 million after-tax) was recorded in the first three and nine months of 2023. Also, depreciation and amortization expense of approximately $41 million ($28 million after-tax) were not recorded on the assets of the Clean Energy Businesses in 2023 through the closing of the transaction.

Following the sale of the Clean Energy Businesses and pursuant to a reimbursement and indemnity agreement with RWE, Con Edison remains responsible for certain potential costs related to a battery storage project located in Imperial County, California. Con Edison's exposure under the agreement could range up to approximately $172 million. As of September 30, 2023, no amounts were recorded as liabilities on Con Edison's consolidated balance sheet related to this agreement. During the first nine months of 2023, Con Edison received $24 million of net proceeds from this battery storage project, and $4 million was recorded as unbilled contract revenue as of September 30, 2023. See Note K.

The following table shows the pre-tax operating income for the Clean Energy Businesses. The 2023 period shown is through the date of the sale of the Clean Energy Businesses and as such there is no applicable data for the three months ended September 30, 2023.






56                             

For the Three Months Ended September 30,For the Nine Months Ended September 30,
(Millions of Dollars)202220232022
Pre-tax operating income$118$25$361
Pre-tax operating income, excluding non-controlling interest$123$21$317



Note T – Assets and Liabilities Held-for-Sale
On March 1, 2023, Con Edison completed the sale of substantially all of the assets of the Clean Energy Businesses. See Note S. The sale included all assets, operations and projects of the Clean Energy Businesses with the exception of tax equity interests in three projects and one deferred project, Broken Bow II, a 75 MW nameplate capacity wind power project located in Nebraska. Transfer of the project from Con Edison to RWE is dependent on one outstanding counterparty consent, and if and when such consent is obtained within two years of the sale of the Clean Energy Businesses, i.e., by February 28, 2025, the project will transfer. RWE Renewables Americas, LLC is operating the facility on behalf of Con Edison pursuant to certain service agreements for which the fees are not material.

At September 30, 2023, the carrying amounts of the major classes of assets and liabilities of Broken Bow II that are expected to be sold are presented on a held-for-sale basis, and accordingly exclude net deferred tax liability balances, as follows:

(Millions of Dollars)September 30,
2023
ASSETS
CURRENT ASSETS
 Restricted cash$5
Other current assets3
TOTAL CURRENT ASSETS8
NON-UTILITY PLANT
Non-utility property, net accumulated depreciation76
NET PLANT76
OTHER NONCURRENT ASSETS
Intangible Assets less accumulated amortization72
Operating lease right-of-use asset7
TOTAL OTHER NONCURRENT ASSETS79
TOTAL ASSETS$163


(Millions of Dollars)September 30,
2023
LIABILITIES
CURRENT LIABILITIES
Long-term debt due within one year$2
Operating lease liabilities2
Other current liabilities3
TOTAL CURRENT LIABILITIES7
NONCURRENT LIABILITIES
Asset retirement obligations3
Operating lease liabilities5
TOTAL NONCURRENT LIABILITIES8
LONG-TERM DEBT61
TOTAL LIABILITIES$76



57                             

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, Development, Inc. (Con Edison Development), Consolidated Edison Energy, Inc. (Con Edison Energy)Edison) and Consolidated Edison Solutions,Company of New York, Inc. (Con Edison Solutions)(CECONY). As used in this report, the term the “Companies” refers to Con Edison Clean Energy Businesses, Inc., togetherand 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 these subsidiaries (which were formerly referred to as the competitive energy businesses), areThird 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, 2022 (File Nos.1-14514 and 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 March 31, 2023 and June 30, 2023 (File Nos. 1-14514 and 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) and Con Edison Transmission, Inc. As used in this report, asthe term the “Utilities” refers to CECONY and O&R.
Con Edison
CECONYO&RCon Edison Transmission
•RECO



Con Edison’s principal business operations are those of CECONY, O&R 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. Con Edison Transmission invests in electric transmission projects and manages both electric and gas assets while seeking to develop electric transmission projects. See "Investments" in Note A to the Third Quarter Financial Statements. On March 1, 2023, Con Edison completed the sale of substantially all of the assets of the Clean Energy Businesses.

In September 2016, Con Edison sold the retail electric supply business of its Clean Energy Businesses to a subsidiary of Exelon Corporation for cash consideration of $235 million. In addition, Con Edison received $23 million in cash as a working capital adjustment in February 2017.

In May 2017, Con Edison Development sold a development-stage solar electric production project for $11 million and agreed to perform engineering, procurement and construction for the project. See Note OS and Note T 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. Con Edison invests to provide reliable, resilient, safe and clean energy critical for its New York customers. 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.

Clean Energy Goals
The success of the Companies’ efforts to meet federal, state and city clean energy policy goals and the impact of energy consumers' efforts to meet such goals on CECONY’s electric, gas and steam businesses and O&R’s electric


40


40
58                             



Table
the energy that is consumed. The Utilities’ and their regulators’ efforts to maintain electric reliability in their service territories as electric usage increases may also impact the Companies’ future financial condition. 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 maintain system reliability and manage service interruptions resulting from severe weather may impact the Companies’ future financial condition, results of operations and liquidity.


Aged Accounts Receivable Balances
At September 30, 2023, CECONY’s and O&R’s customer accounts receivables balances of $2,228 million and $96 million, respectively, included aged accounts receivables (balances outstanding in excess of 60 days) of $1,041 million and $15 million, respectively. In comparison, CECONY’s and O&R’s customer accounts receivable balances at February 28, 2020 were $1,322 million and $89 million, respectively, including aged accounts receivables (balances outstanding in excess of 60 days) of $408 million and $15 million, respectively. Prior to the start of the COVID-19 pandemic, the Utilities’ practice was to write off customer accounts receivables as uncollectible 90 days after the account is disconnected for non-payment or the account is closed during the collection process. In general, the Utilities suspended service disconnections during the COVID-19 pandemic. CECONY’s electric and gas rate plans include reconciliation of late payment charges (from January 1, 2023 through December 31, 2025) and write-offs of customer accounts receivable balances (from January 1, 2020 through December 31, 2025) to amounts reflected in rates, with recovery/refund from or to customers via surcharge/sur-credit. Surcharge recoveries for late payment charges and write-offs of accounts receivable balances will, collectively, be subject to separate annual caps for electric and gas that produce no more than a half percent (0.5 percent) total customer bill impact per commodity (estimated for electric to be $57.3 million, $60.3 million, $62.6 million for 2023, 2024 and 2025, respectively, and for gas to be $14.8 million, $15.9 million and $16.8 million for 2023, 2024 and 2025, respectively). Amounts in excess of the surcharge caps will be deferred as a regulatory asset for recovery in CECONY’s next base rate cases. O&R’s 2022 - 2024 rate plans include reconciliation of late payment charges to amounts reflected in rates for years 2022 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. Although these regulatory mechanisms are in place, a continued slower recovery in cash of outstanding customer accounts receivable balances has impacted the Companies’ liquidity and may continue to impact liquidity. The Utilities resumed collection activities, including write-offs of uncollectible customer accounts receivable balances. See “Liquidity and Capital Resources” and “Capital Requirements and Resources,” below and "Regulatory Matters – Rate Plans – CECONY Electric and Gas” in Note B to the Third Quarter Financial Statements.

Con Edison Transmission
Con Edison Transmission, Inc. invests in electric and gas transmission projects through its wholly-owned subsidiaries, Consolidated Edison Transmission, LLC (CET Electric) and Con Edison Gas Pipeline and Storage, LLC (CET Gas). CET Electric owns a 45.7 percent interest in New York Transco LLC, which ownspartnership and jointly with the New York Power Authority, is proposingdeveloping the Propel NY Energy transmission project that will deliver offshore wind energy from Long Island to buildNew York City, Westchester County and the rest of the state's high voltage power grid. Con Edison Transmission expects to continue to participate in competitive solicitations to develop additional electric projects. The success of Con Edison Transmission’s efforts in these competitive solicitations and to grow its electric transmission assetsportfolio may impact Con Edison’s future capital requirements. During 2020 and 2021, Con Edison Transmission recorded impairments on its investment 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, CET Gas and CECONY own 71.2 percent and 28.8 percent interests, respectively, in Honeoye Storage Corporation which operates a gas storage business in upstate New York. In addition, CET Gas owns a 12.5 percent interest inthe Mountain Valley Pipeline, LLC a joint venture developing a proposed 300 mile gas transmission project in West Virginia and Virginia (Mountain Valley Pipeline)(MVP). Any future impairments of Con Edison Transmission’s investment in MVP may impact Con Edison’s future financial condition and results of operations. See "Investments" in Note A to the Third Quarter Financial Statements and “Con Edison Transmission, Inc., together” below.

CECONY
Electric
CECONY provides electric service to approximately 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 CETa population of more than nine million.

59                             

During the summer (June-August) of 2023, electric peak demand in CECONY's service area was 11,464 MW (which occurred on July 27, 2023). At design conditions, electric peak demand in CECONY's service area would have been approximately 12,567 MW in 2023 compared to CECONY's forecast of 12,990 MW. The lower peak demand at design conditions as compared to the forecast reflects lower than anticipated new business, higher than anticipated energy efficiency measures by customers and variability in customers’ hybrid work schedules. CECONY increased its five-year forecast of average annual growth in electric peak demand in its service area at design conditions from approximately 0.6 percent (for 2023 to 2027) to approximately 0.7 percent (for 2024 to 2028).

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

In June 2023, CECONY decreased its five-year forecast of average annual growth of the firm peak gas demand in its service area at design conditions from 1.0 percent (for 2023 to 2027) to 0.8 percent (for 2024 to 2028). The decrease primarily reflects customers’ energy efficiency measures and electrification of space heating plus New York State’s prohibition on the installation of fossil-fuel combustion equipment in certain new buildings within the next five years.

Steam
CECONY operates the largest steam distribution system in the United States by producing and delivering approximately 15,794 MMlb of steam annually to approximately 1,520 customers in parts of Manhattan.

In June 2023, CECONY decreased its five-year forecast of the average annual peak steam demand in its service area at design conditions from a 0.1 percent decrease (for 2023 to 2027) to a 0.5 percent decrease (for 2024 to 2028). The decrease reflects continued lower commercial building occupancy levels in the aftermath of the COVID-19 pandemic and customer migration to other heating sources.

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

During the summer (June-August) of 2023, electric peak demand in O&R's service area was 1,336 MW (which occurred on July 28, 2023). At design conditions, electric peak demand in O&R's service area would have been approximately 1,493 MW in 2023 compared to O&R's forecast of 1,545 MW. The lower peak demand at design conditions as Con Edison Transmission.compared to the forecast primarily reflects lower than anticipated new business, higher than anticipated solar energy contributions from customers and variability in customers’ hybrid work schedules. O&R increased its five-year forecast of average annual growth in electric peak demand in its service area at design conditions from approximately 0.4 percent (for 2023 to 2027) to approximately 2.0 percent (for 2024 to 2028).


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

In October 2017, FERC issuedJune 2023, O&R decreased its five-year forecast of the average annual firm peak gas demand in its service area at design conditions from a Certificate0.1 percent decrease (for 2023 to 2027) to a 0.2 percent decrease (for 2024 to 2028). The decrease primarily reflects customers’ energy efficiency measures and electrification of Public Convenience and Necessity forspace heating plus New York State’s prohibition on the Mountain Valley Pipeline. The project has an estimated total costinstallation of $3,000 million to $3,500 million and an in-service date targeted for late 2018.  fossil-fuel combustion equipment in certain new buildings within the next five years.


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





60                             

  
For the Three Months Ended
September 30, 2023		For the Nine Months Ended
September 30, 2023		At September 30, 2023
(Millions of Dollars, except percentages)Operating
Revenues		Net Income for
Common Stock		Operating
Revenues		Net Income for
Common Stock		Assets
CECONY$3,59093 %$51598 %$10,28792 %$1,30860 %$59,58792 %
O&R2817 367 8037 753 3,6226 
Total Utilities$3,871100 %$551105 %$11,09099 %$1,38363 %$63,20998 %
Clean Energy Businesses (a)(c)—— —— 1291 221 —— 
Con Edison Transmission1— 41 3— 10— 3771 
Other (b)(c)
— — (29)(6)(3)— 77036 8191 
Total Con Edison$3,872100 %$526100 %$11,219100 %$2,185100 %$64,405100 %
(a)Net income for common stock from the Clean Energy Businesses for the nine months ended September 30, 2023 includes $(9) million net after-tax mark-to-market effects. Net income for common stock from the Clean Energy Businesses for the nine months ended September 30, 2023 also includes $2 million (after-tax) net of the effects of HLBV accounting for tax equity investments in certain renewable electric projects. Depreciation and amortization expenses on their assets of $31 million (after-tax) were not recorded for the nine months ended September 30, 2023. See "Assets Held for Sale" in Note A, Note S and Note T to the Third Quarter Financial Statements.

(b)Other includes the parent company, Con Edison’s tax equity investments, the deferred project held for sale and consolidation adjustments. Net income for common stock for the nine months ended September 30, 2023 includes an immaterial amount of income tax impact on the net after-tax mark-to-market effects. Net income for common stock for the three and nine months ended September 30, 2023 also includes $(3) million net of tax and $(7) million net of tax, respectively, on the effects of HLBV accounting for tax equity investments in certain renewable electric projects. Net income for common stock for the three and nine months ended September 30, 2023 also includes $(5) million net of tax and $(13) million net of tax, respectively, of transaction costs and other accruals related to the sale of the Clean Energy Businesses. Impact of the sale of the Clean Energy Businesses on the changes in state unitary tax apportionments (net of federal taxes) for the three and nine months ended September 30, 2023 includes $(7) million and $(17) million, respectively. Depreciation and amortization expenses on the assets of the Clean Energy Businesses of $(3) million (after-tax) were not recorded for the nine months ended September 30, 2023. Net income for common stock for the three months ended September 30, 2023 includes an increase in state taxes on sale of $(19) million (after-tax). Net income for common stock for the nine months ended September 30, 2023 includes $784 million (after-tax) for the gain on the sale of substantially all of the assets of the Clean Energy Businesses. See Note S and Note T to the Third Quarter Financial Statements.

(c)On March 1, 2023, Con Edison completed the sale of substantially all of the assets of the Clean Energy Businesses. See Note S and Note T to the Third Quarter Financial Statements.


Inflation Reduction Act
On August 16, 2022, the Inflation Reduction Act of 2022 (the Act) was signed into law and included a new 15 percent Corporate Alternative Minimum Tax (CAMT). 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, and will apply to tax years beginning after December 31, 2022. Based on management’s preliminary calculations, Con Edison and CECONY do not expect to 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 the Companies’ financial position, results of operations or liquidity.


New York Legislation
In April 2021, New York passed a law that increased the corporate franchise tax rate on business income from 6.5 percent to 7.25 percent, 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 percent, not to exceed a maximum tax liability of $5 million per taxpayer. New York 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 were scheduled to expire after 2023. In May 2023, New York passed a law that extended the increase in the corporate franchise tax rate from 6.5 percent to 7.25 percent for an additional three years, through tax year 2026 and extended the business capital tax through tax year 2026. New York also passed a law establishing a permanent rate of 30 percent for the metropolitan transportation business tax surcharge. As a result of the sale of the Clean Energy Businesses in 2023, Con Edison has New York State taxable income in excess of $5 million after using its entire New York state NOL carryforward, and therefore, the group is subject to the higher 7.25 percent rate (9.425 percent with the surcharge rate) on its taxable income for tax year 2023. As a result of this legislation, CECONY remeasured its deferred tax assets and liabilities that would reverse before 2027 and recorded state deferred income tax expense (net of federal tax benefit) and an increase in accumulated deferred tax liabilities of $10 million for the nine months ended September 30, 2023, all of which was recorded in the second quarter of 2023.

61                             
  
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 IncomeAssets
CECONY$2,79987%$40188%$7,94888%$88387%$41,64785%
O&R2347
225
6677
535
2,8326
Total Utilities3,03394
42393
8,61595
93692
44,47991
Clean Energy Businesses (a)1776
265
4605
545
2,8116
Con Edison Transmission1—
92
1—
252
1,2102
Other (b)—
—
(1)—
(4)—
51
7461
Total Con Edison$3,211100%$457100%$9,072100%$1,020100%$49,246100%
(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.


Results of Operations
Net income for common stock and earnings per share for the three and nine months ended September 30, 20172023 and 20162022 were as follows:

  For the Three Months Ended September 30,For the Nine Months Ended September 30,
20232022202320222023202220232022
(Millions of Dollars, except per share amounts)Net Income for Common StockEarnings
per Share		Net Income for Common StockEarnings
per Share
CECONY$515$493$1.49$1.39$1,308$1,138$3.75$3.21
O&R36330.100.0975720.210.20
Clean Energy Businesses (a) (d)—97—0.28222930.060.83
Con Edison Transmission410.01—1020.030.01
Other (b)(29)(11)(0.07)(0.03)770(35)2.22(0.10)
Con Edison (c)$526$613$1.53$1.73$2,185$1,470$6.27$4.15
(a)Net income for common stock and earnings per share from the Clean Energy Businesses for the nine months ended September 30, 2023 includes $(9) million or $(0.03) a share net after-tax mark-to-market effects. Net income for common stock and earnings per share from the Clean Energy Businesses for the nine months ended September 30, 2023 also includes $2 million or $0.01 a share (after-tax) net of the effects of HLBV accounting for tax equity investments in certain renewable electric projects. Depreciation and amortization expenses on their assets of $31 million or $0.09 a share (after-tax) were not recorded for the nine months ended September 30, 2023. See "Assets Held for Sale" in Note A, Note S and Note T to the Third Quarter Financial Statements.
  For the Three Months Ended September 30,For the Nine Months Ended September 30,
 201720162017
2016
201720162017
2016
(Millions of Dollars, except per share amounts)Net IncomeEarnings
per Share		Net IncomeEarnings
per Share
CECONY$401$388
$1.30

$1.27
$883$859
$2.88

$2.87
O&R22270.07
0.09
53550.18
0.18
Clean Energy Businesses (a)26780.08
0.26
541200.18
0.40
Con Edison Transmission9100.03
0.03
25110.08
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.



Net income for common stock and earnings per share from the Clean Energy Businesses for the three and nine months ended September 30, 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 Clean Energy Businesses for the three and nine months ended September 30, 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 tax equity investments in certain renewable electric projects.
41
Table(b)    Other includes the parent company, Con Edison’s tax equity investments, the deferred project held for sale and consolidation adjustments. Net income for common stock and earnings per share for the nine months ended September 30, 2023 includes an immaterial amount or $0.00 a share net of Contents

(b)Other includes parent company and consolidation adjustments.
(c)Earningsincome tax impact on the net after-tax mark-to-market effects. Net income for common stock and 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 for the three and nine months ended September 30, 2017, as compared with2023 also includes $(3) million or $(0.01) a share and $(7) million or $(0.02), a share net of income tax impact on the 2016 periods, reflect changeseffects of HLBV accounting, respectively, for tax equity investments in rate plans and regulatory charges and the impact of weather on steam revenues. The newcertain renewable electric rate plan of CECONY includes changes in the timing of recognition of annual revenues between quarters. Operations and maintenance expensesprojects. Net income for CECONYcommon stock for the three and nine months ended September 30, 2017 primarily reflect lower2023 also includes $(5) million or $(0.01) a share and $(13) million and $(0.04) a share of transaction costs for pensions and other postretirement benefits. In addition,accruals, respectively, related to the Utilities' rate plans provide for revenues to cover expectedsale of the Clean Energy Businesses (net of tax). Impact of the sale of the Clean Energy Businesses on the changes in certain operating costs including depreciation, property taxes and otherstate unitary tax matters.

The following table presents the estimated effect on earningsapportionments (net of federal taxes) is $(7) million or $(0.02) per share and net income$(17) million or $(0.05) per share for the three and nine months ended September 30, 2017 period2023, respectively. Depreciation and amortization expenses on the assets of the Clean Energy Businesses of $(3) million or $(0.01) a share (after-tax) were not recorded for the nine months ended September 30, 2023. Net income for common stock and earnings per share for the three months ended September 30, 2023 includes an increase in the state taxes on sale of $(19) million or $(0.05) a share. Net income for common stock and earnings per share for the nine months ended September 30, 2023 includes $784 million (after-tax) or $2.25 a share (after-tax) for the gain on the sale of substantially all of the assets of the Clean Energy Businesses. See Note S and Note T to the Third Quarter Financial Statements.

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 electric projects.

(c)    Earnings per share on a diluted basis were $1.52 a share and $1.72 a share for the three months ended September 30, 2023 and 2022, respectively, and $6.24 a share and $4.13 a share for the nine months ended September 30, 2023 and 2022, respectively. In March 2023, Con Edison entered into ASR Contracts with two dealers to repurchase $1,000 million in aggregate of Common Shares. Con Edison’s share repurchase was completed in the second quarter of 2023. See Note C to the Third Quarter Financial Statements.

(d)    On March 1, 2023, Con Edison completed the sale of substantially all of the assets of the Clean Energy Businesses. See Note S and 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, 2023 as compared with 2016 period, resulting from these and other major factors:the 2022 period.





62                             
 Three Months VariationNine 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)0.014
Other operations and maintenance expenses (c)0.07220.2473
Depreciation, property taxes and other tax matters (d)(0.10)(30)(0.36)(108)
Other (e)(0.06)(13)(0.17)(32)
Total CECONY0.03130.0124
O&R (a)



Changes in rate plans and regulatory charges—
10.0412
Other operations and maintenance expenses (f)(0.01)(2)(0.03)(9)
Depreciation and property taxes(0.01)(4)(0.02)(6)
Other (e)—
—
0.011
Total O&R(0.02)(5)—
(2)
Clean Energy Businesses



Operating revenues less energy costs (g)0.10320.1031
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)0.0414
Other, including parent company expenses (e) (k)0.0250.0311
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.


42

42



Table of Contents

Variation for the Three Months Ended September 30, 2023 vs. 2022
Net Income for Common Stock (Net of Tax) (Millions of Dollars)Earnings per Share
CECONY (a)
Electric base rate increase$123$0.35
Higher operations maintenance activities(40)(0.11)
Higher interest expense(28)(0.08)
Higher operation and maintenance expense for stock-based compensation, health care costs and injuries and damages
(15)(0.04)
Change in incentives earned under the electric and gas earnings adjustment mechanisms (EAMs)(10)(0.03)
Gas base rate change(6)(0.02)
Higher payroll taxes(4)(0.01)
Accretive effect of share repurchase—0.04
Other2—
Total CECONY220.10
O&R (a)
Electric base rate increase30.01
Gas base rate increase1—
Other(2)—
Total O&R20.01
Clean Energy Businesses (b)
Total Clean Energy Businesses(97)(0.28)
Con Edison Transmission
Higher investment income20.01
Other1—
Total Con Edison Transmission30.01
Other, including parent company expenses
Higher interest income primarily related to the proceeds from sale of the Clean Energy Businesses50.01
Lower interest expense40.01
Net mark-to-market effects40.01
Gain and other impacts related to the sale of the Clean Energy Businesses(31)(0.08)
HLBV effects(4)(0.01)
Other50.02
Total Other, including parent company expenses(17)(0.04)
Total Reported (GAAP basis)$(87)$(0.20)
a.Under the revenue decoupling mechanisms in the Utilities’ New York electric and gas rate plans and the weather-normalization clause applicable to their gas businesses, revenues are generally not affected by changes in delivery volumes from levels assumed when rates were approved. In general, the Utilities recover on a current basis the fuel, gas purchased for resale and purchased power costs they incur in supplying energy to their full-service customers. Accordingly, such costs do not generally affect Con Edison’s results of operations.
b. On March 1, 2023, Con Edison completed the sale of substantially all of the assets of the Clean Energy Businesses.
(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.

63                             


Variation for the Nine Months Ended September 30, 2023 vs. 2022
Net Income for Common Stock (Net of Tax) (Millions of Dollars)Earnings per Share
CECONY (a)
Electric base rate increase$193$0.55
Gas base rate increase550.16
Higher interest income70.02
Lower operation and maintenance expense from stock-based compensation, health care costs and injuries and damages20.01
Higher income from allowance for equity funds used during construction20.01
Higher interest expense(68)(0.19)
Weather impact on steam revenues(25)(0.07)
Higher electric operations maintenance activities(6)(0.02)
Change in incentives earned under the electric and gas earnings adjustment mechanisms (EAMs)(3)(0.01)
Accretive effect of share repurchase—0.06
Other130.02
Total CECONY1700.54
O&R (a)
Electric base rate increase50.01
Gas base rate increase40.01
Higher storm-related costs(3)(0.01)
Other(3)—
Total O&R30.01
Clean Energy Businesses (b)
Total Clean Energy Businesses(271)(0.77)
Con Edison Transmission
Higher investment income60.02
Other2—
Total Con Edison Transmission80.02
Other, including parent company expenses
Gain and other impacts related to the sale of the Clean Energy Businesses7532.16
Higher interest income primarily related to proceeds from sale of the Clean Energy Businesses150.04
Lower interest expense120.03
Net mark-to-market effects100.03
Production tax credit from deferred project40.01
Lower New York state capital taxes40.01
Lower expenses related to the capital funding facility40.01
HLBV effects(4)(0.01)
Accretive effect of share repurchase—0.04
Other7—
Total Other, including parent company expenses8052.32
Total Reported (GAAP basis)$715$2.12
a.Under the revenue decoupling mechanisms in the Utilities’ New York electric and gas rate plans and the weather-normalization clause applicable to their gas businesses, revenues are generally not affected by changes in delivery volumes from levels assumed when rates were approved. In general, the Utilities recover on a current basis the fuel, gas purchased for resale and purchased power costs they incur in supplying energy to their full-service customers. Accordingly, such costs do not generally affect Con Edison’s results of operations.
b. On March 1, 2023, Con Edison completed the sale of substantially all of the assets of the Clean Energy Businesses.




64                             

The Companies’ other operations and maintenance expenses for the three and nine months ended September 30, 20172023 and 20162022 were as follows:

For the Three Months Ended September 30,For the Nine Months Ended September 30,
(Millions of Dollars)2023202220232022
CECONY
Operations$513$420$1,383$1,276
Pensions and other postretirement benefits87104259312
Health care and other benefits5239124109
Regulatory fees and assessments (a)111104283271
Other71140292299
Total CECONY$834$807$2,341$2,267
O&R9688283259
Clean Energy Businesses (b)—10147252
Con Edison Transmission23810
Other (c)1—(1)(3)
Total other operations and maintenance expenses$933$999$2,678$2,785
(a)Includes Demand Side Management, System Benefit Charges and Public Service Law 18A assessments that are collected in revenues.
 For the Three Months Ended September 30,For the Nine Months Ended September 30,
(Millions of Dollars)2017201620172016
CECONY    
Operations$386$381$1,147$1,109
Pensions and other postretirement benefits5187152261
Health care and other benefits4547127124
Regulatory fees and assessments (a)142135355361
Other6774211250
Total CECONY6917241,9922,105
O&R8077236220
Clean Energy Businesses7940174124
Con Edison Transmission3171
Other (b)(1)(2)(3)(3)
Total other operations and maintenance expenses$852$840$2,406$2,447
(b)On March 1, 2023, Con Edison completed the sale of substantially all of the assets of the Clean Energy Businesses. See Note S and Note T to the Third Quarter Financial Statements.
(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.

(c)Other includes the parent company, Con Edison’s tax equity investments, the deferred project held for sale and consolidation adjustments. See Note T.

A discussion of the results of operations by principal business segment for the three and nine months ended September 30, 20172023 and 20162022 follows. For additional business segment financial information, see Note JM to the Third Quarter Financial Statements.






65                             
43


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, 2023 and 2022 were as follows:

  CECONYO&RClean Energy Businesses (a)Con Edison
Transmission		Other (b)Con Edison (c)
(Millions of Dollars)202320222023202220232022202320222023202220232022
Operating revenues$3,590$3,549$281$291$—$325$1$1$—$(1)$3,872$4,165
Purchased power7196437789—————(1)796731
Fuel3459————————3459
Gas purchased for resale621131116—55———173185
Other operations and maintenance8348079688—101231—933999
Depreciation and amortization4854412625—601——(1)512525
Taxes, other than income taxes7777482322—5——12801777
Gain on sale of the Clean Energy Businesses————————(1)—(1)—
Operating income (loss)6797384851—104(2)(2)(3)(2)722889
Other income (deductions)18481125—1853(3)20789
Net interest expense2392021311—(19)—273259199
Income (loss) before income tax expense6246174745—12461(7)(8)670779
Income tax expense1091241112—212—223144160
Net income (loss)$515$493$36$33$—$103$4$1$(29)$(11)$526$619
Income (loss) attributable to non-controlling interest—————6—————6
Net income (loss) for common stock$515$493$36$33$—$97$4$1$(29)$(11)$526$613

(a)On March 1, 2023, Con Edison completed the sale of substantially all of the assets of the Clean Energy Businesses. See Note S and Note T to the Third Quarter Financial Statements.
(b)Other includes the parent company, Con Edison’s tax equity investments, the deferred project held for sale and consolidation adjustments. See Note T to the Third Quarter Financial Statements.
(c)Represents the consolidated results of operations of Con Edison and its businesses.







66                             
  CECONYO&RClean 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—%$1Large
$(206)(6.0)%
Purchased power(95)(19.2)(9)(13.0)(234)Large
—
—
—
—
(338)(42.4)
Fuel13.4
—
—
—
—
—
—
—
—
13.4
Gas purchased for resale2470.6
225.0
820.5
—
—
—
—
3442.0
Other operations and maintenance(33)(4.6)33.9
3997.5
2Large
1(50.0)121.4
Depreciation and amortization227.9
15.9
872.7
—
—
1Large
3210.5
Taxes, other than income taxes183.6
—
—
(2)(40.0)—
—
—
—
163.0
Gain on sale of retail electric supply business (2016)—
—
—
—
(104)Large
—
—
—
—
(104)Large
Operating income344.4
(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)15.0
1Large
(10)(20.4)
Net interest expense31.9
—
—
571.4
133.3
(2)(40.0)73.9
Income before income tax expense294.7
(4)(10.0)(110)(75.9)(1)(6.3)250.0
(84)(10.4)
Income tax expense167.1
17.7
(58)(86.6)—
—
(3)Large
(44)(14.0)
Net income$133.4%$(5)(18.5)%$(52)(66.7)%$(1)(10.0)%$583.3 %$(40)(8.0)%
(a)Includes parent company and consolidation adjustments.
(b)Represents the consolidated results of operations of Con Edison and its businesses.



44

44





CECONY

  
For the Three Months Ended
September 30, 2023
  
For the Three Months Ended
September 30, 2022
  
  
(Millions of Dollars)ElectricGasSteam2023 TotalElectricGasSteam2022 Total2023-2022 Variation
Operating revenues$3,223$318$49$3,590$3,077$414$58$3,549$41
Purchased power713— 6719628— 1564376
Fuel33— 13458— 159(25)
Gas purchased for resale— 62— 62— 113— 113(51)
Other operations and maintenance644129618346451144880727
Depreciation and amortization35210825485324932444144
Taxes, other than income taxes614127367775791343574829
Operating income$867$(108)$(80)$679$843$(40)$(65)$738$(59)
  
For the Three Months Ended
September 30, 2017
  
For the Three Months Ended
September 30, 2016
  
  
(Millions of Dollars)Electric
Gas
Steam
2017 TotalElectric
Gas
Steam
2016 Total2017-2016
Variation
Operating revenues$2,469$268$62$2,799$2,557$208$63$2,828$(29)
Purchased power393—
7400486—
9495(95)
Fuel24—
63021—
8291
Gas purchased for resale—
58—
58—
34—
3424
Other operations and maintenance5471044069157810244724(33)
Depreciation and amortization2324721300217412027822
Taxes, other than income taxes4187131520414592950218
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, 20172023 compared with the 20162022 period iswere as follows:
 
  
For the Three Months Ended
  
(Millions of Dollars)September 30, 2023September 30, 2022Variation
Operating revenues$3,223$3,077$146
Purchased power71362885
Fuel3358(25)
Other operations and maintenance644645(1)
Depreciation and amortization35232428
Taxes, other than income taxes61457935
Electric operating income$867$843$24
  
For the Three Months Ended
  
(Millions of Dollars)September 30, 2017September 30, 2016Variation
Operating revenues$2,469$2,557$(88)
Purchased power393486(93)
Fuel24213
Other operations and maintenance547578(31)
Depreciation and amortization23221715
Taxes, other than income taxes4184144
Electric operating income$855$841$14


CECONY’s electric sales and deliveries for the three months ended September 30, 20172023 compared with the 20162022 period were:

  
Millions of kWh DeliveredRevenues in Millions (a)
  
For the Three Months Ended
  
For the Three Months Ended
  
DescriptionSeptember 30, 2023September 30, 2022VariationPercent
Variation		September 30, 2023September 30, 2022VariationPercent
Variation
Residential/Religious (b)3,9604,303(343)(8.0)%$1,233$1,069$16415.3 %
Commercial/Industrial3,0523,003491.6 840808324.0 
Retail choice customers5,9146,107(193)(3.2)817825(8)(1.0)
NYPA, Municipal Agency and other sales2,6572,611461.8 2842404418.3 
Other operating revenues (c)— — — —49135(86)(63.7)
Total15,58316,024(441)(2.8)%(d)$3,223$3,077$1464.7 %
(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
  
DescriptionSeptember 30, 2017
September 30, 2016
Variation
Percent
Variation

 September 30, 2017September 30, 2016Variation
Percent
Variation

Residential/Religious (b)3,237
3,653
(416)(11.4)% $805$883$(78)(8.8)%
Commercial/Industrial2,570
2,749
(179)(6.5) 534551(17)(3.1)
Retail choice customers7,510
8,136
(626)(7.7) 867918(51)(5.6)
NYPA, Municipal Agency and other sales2,705
2,764
(59)(2.1) 20720431.5
Other operating revenues (c)—
—
—
—
 56155Large
Total16,022
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 CECONY's rate plans.

(d)After adjusting for variations, primarily weather and billing days, electric delivery volumes in CECONY’s service area increased 0.2 percent in the three months ended September 30, 2023 compared with the 2022 period.
45

Operating revenues decreased $88 increased $146 million in the three months ended September 30, 20172023 compared with the 20162022 period primarily due primarily to lower purchased power expenses ($93 million), offset by higheran increase in revenues from the electric rate plan ($27166 million) and higher purchased power expenses ($85 million), offset in part by lower unbilled revenue accrual ($71 million), lower fuel expenses ($25 million) and a change in incentives earned under the earnings adjustment mechanisms (EAMs) ($10 million).


67                             

Purchased power expenses decreased $93increased $85 million in the three months ended September 30, 20172023 compared with the 20162022 period primarily due to higher unit costs ($187 million), offset in part by lower purchased volumes ($66102 million) and unit costs ($27 million).


Fuel expenses increased $3decreased $25 million in the three months ended September 30, 20172023 compared with the 20162022 period due to higherlower unit costs ($628 million), offset by lowerhigher purchased volumes from the company'sCECONY's electric generating facilities ($3 million).


Other operationsDepreciation and maintenanceamortization expenses decreased $31increased $28 million in the three months ended September 30, 20172023 compared with the 20162022 period primarily due primarily to lower pension andhigher electric utility plant balances.

Taxes, other postretirement benefits ($38 million) and environmental costs ($6 million), offset by higher surcharges for assessments and fees that are collected in revenues from customers ($6 million) and uncollectible expense ($5 million).

Depreciation and amortizationthan income taxes increased $15$35 million in the three months ended September 30, 20172023 compared with the 20162022 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 ($1154 million) and payroll taxes ($4 million), offset in part by lower state and localdeferral of over-collected property taxes ($526 million).


Gas
CECONY’s results of gas operations for the three months ended September 30, 20172023 compared with the 20162022 period iswere as follows:

  
For the Three Months Ended
  
(Millions of Dollars)September 30, 2023September 30, 2022Variation
Operating revenues$318$414$(96)
Gas purchased for resale62113(51)
Other operations and maintenance12911415
Depreciation and amortization1089315
Taxes, other than income taxes127134(7)
Gas operating income$(108)$(40)$(68)
  
For the Three Months Ended
  
(Millions of Dollars)September 30, 2017September 30, 2016Variation
Operating revenues$268$208$60
Gas purchased for resale583424
Other operations and maintenance1041022
Depreciation and amortization47416
Taxes, other than income taxes715912
Gas operating income$(12)$(28)$16


CECONY’s gas sales and deliveries, excluding off-system sales, for the three months ended September 30, 20172023 compared with the 20162022 period were:

  
Thousands of Dt DeliveredRevenues in Millions (a)
  
For the Three Months Ended
  
For the Three Months Ended
  
DescriptionSeptember 30, 2023September 30, 2022VariationPercent
Variation		September 30, 2023September 30, 2022VariationPercent
Variation
Residential3,884 4,467 (583)(13.1)%$131$150$(19)(12.7)%
General4,094 4,759 (665)(14.0)5894(36)(38.3)
Firm transportation9,953 8,821 1,132 12.8 8588(3)(3.4)
Total firm sales and transportation17,931 18,047 (116)(0.6)%(b)$274$332$(58)(17.5)%
Interruptible sales (c)2,693 1,222 1,471 Large1310330.0 
NYPA15,214 14,381 833 5.8 11——
Generation plants23,215 19,633 3,582 18.2 611(5)(45.5)
Other4,023 4,141 (118)(2.8)66——
Other operating revenues (d)— — — —1854(36)(66.7)
Total63,076 57,424 5,652 9.8 %$318$414$(96)(23.2)%
(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.
  
Thousands of Dt Delivered Revenues in Millions (a)
  
For the Three Months Ended
  
 For the Three Months Ended
  
DescriptionSeptember 30, 2017
September 30, 2016
Variation
Percent
Variation

 September 30, 2017September 30, 2016Variation
Percent
Variation

Residential4,731
4,335
396
9.1% $104$88$1618.2%
General4,292
3,963
329
8.3
 4941819.5
Firm transportation8,766
8,305
461
5.6
 67531426.4
Total firm sales and transportation17,789
16,603
1,186
7.1
(b)2201823820.9
Interruptible sales (c)2,108
1,664
444
26.7
 844Large
NYPA10,148
12,800
(2,652)(20.7) 11—
—
Generation plants24,068
35,745
(11,677)(32.7) 77—
—
Other4,487
4,975
(488)(9.8) 66—
—
Other operating revenues (d)—
—
—
—
 26818Large
Total58,600
71,787
(13,187)(18.4)% $268$208$6028.8%
(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.

(b)After adjusting for variations, primarily billing days, firm gas sales and transportation volumes in CECONY’s service area decreased 2.3 percent in the three months ended September 30, 2023 compared with the 2022 period.

(c)Includes 1,819 thousand and 273 thousand of Dt for the 2023 and 2022 periods, respectively, that are also reflected in firm transportation and other.
46(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 CECONY’s rate plans.


46




(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 decreased $96 million in the three months ended September 30, 20172023 compared with the 20162022 period primarily due primarily to higherlower gas purchased for resale ($51 million), lower unbilled revenue accrual ($16 million), a certain rate plan reconciliation ($13 million), a decrease in revenues from the gas rate plan and growth in the number of customers ($298 million) and higher gas purchased for resale expensea change in incentives earned under the earnings adjustment mechanisms (EAMs) ($244 million).





68                             


Gas purchased for resale increased $24 decreased $51 million in the three months ended September 30, 20172023 compared with the 20162022 period due to higherlower unit costs ($2040 million) and lower purchased volumes ($411 million).


Other operations and maintenance expenses increased $2$15 million in the three months ended September 30, 20172023 compared with the 20162022 period primarily due primarily to higher surcharges for assessments and fees that were collected in revenues from customers.gas operations costs ($15 million).


Depreciation and amortizationexpenses increased $6$15 million in the three months ended September 30, 20172023 compared with the 20162022 period primarily due primarily to higher gas utility plant balances.


Taxes, other than income taxes increased $12 decreased $7 million in the three months ended September 30, 20172023 compared with the 20162022 period primarily due primarily to a lower deferral of over-collected property taxes ($25 million), offset in part by higher property taxes ($619 million), state and local taxes ($4 million) and payroll taxes ($1 million).


Steam
CECONY’s results of steam operations for the three months ended September 30, 20172023 compared with the 20162022 period iswere as follows:

  
For the Three Months Ended
  
(Millions of Dollars)September 30, 2023September 30, 2022Variation
Operating revenues$49$58$(9)
Purchased power615(9)
Fuel11—
Other operations and maintenance614813
Depreciation and amortization25241
Taxes, other than income taxes36351
Steam operating income$(80)$(65)$(15)
  
For the Three Months Ended
  
(Millions of Dollars)September 30, 2017September 30, 2016Variation
Operating revenues$62$63$(1)
Purchased power79(2)
Fuel68(2)
Other operations and maintenance4044(4)
Depreciation and amortization21201
Taxes, other than income taxes31292
Steam operating income$(43)$(47)$4


CECONY’s steam sales and deliveries for the three months ended September 30, 20172023 compared with the 20162022 period were:

  
Millions of Pounds DeliveredRevenues in Millions
  
For the Three Months Ended
  
For the Three Months Ended
  
DescriptionSeptember 30, 2023September 30, 2022VariationPercent
Variation		September 30, 2023September 30, 2022VariationPercent
Variation
General7 7 — — %$2$2$—— %
Apartment house568 582 (14)(2.4)1213(1)(7.7)
Annual power1,796 2,006 (210)(10.5)3038(8)(21.1)
Other operating revenues (a)— — — —55——
Total2,371 2,595 (224)(8.6)%(b)$49$58$(9)(15.5)%
(a)Other steam operating revenues generally reflect changes in regulatory assets and liabilities in accordance with CECONY’s rate plan.
  
Millions of Pounds Delivered Revenues in Millions
  
For the Three Months Ended
  
 For the Three Months Ended
  
DescriptionSeptember 30, 2017
September 30, 2016
Variation
Percent
Variation

 September 30, 2017September 30, 2016Variation
Percent
Variation

General13
10
3
30.0% $2$2
$—
—%
Apartment house748
776
(28)(3.6) 1515—
—
Annual power2,439
2,950
(511)(17.3) 4249(7)(14.3)
Other operating revenues (a)—
—
—
—
 3(3)6Large
Total3,200
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 decreased 8.0 percent in the three months ended September 30, 2023 compared with the 2022 period.



47

Operating revenues decreased $1$9 million in the three months ended September 30, 20172023 compared with the 20162022 period primarily due primarily to lower purchased power expenses ($2 million) and lower fuel expenses ($2 million), offset in part by a property tax refund incentive ($39 million).


Purchased power expenses decreased $2$9 million in the three months ended September 30, 20172023 compared with the 20162022 period due to lower unit costs ($18 million) and lower purchased volumes ($1 million).


FuelOther operations and maintenance expenses decreased $2increased $13 million in the three months ended September 30, 20172023 compared with the 20162022 period primarily due to lower unithigher costs for pension and other postretirement benefits, reflecting reconciliation to the rate plan level ($16 million) and purchased volumes from an increase in municipal infrastructure support ($4 million).

Taxes, Other Than Income Taxes
At $777 million, taxes other than income taxes remain one of CECONY’s largest operating expenses for the company's steam generating facilities ($1 million)three months ended September 30, 2023. The principal components of, and variations in, taxes other than income taxes were:

69                             

For the Three Months Ended
September 30,
(Millions of Dollars)20232022Variation
Property taxes$681$604$77
State and local taxes related to revenue receipts1151141
Payroll taxes19145
Other taxes(38)16(54)
Total$777(a)$748(a)$29
(a)Including sales tax on customers’ bills, total taxes other than income taxes in 2023 and 2022 were $990 million and $913 million, respectively.

Other operations and maintenance expenses decreased $4Income (Deductions)
Other income increased $103 million in the three months ended September 30, 20172023 compared with the 20162022 period primarily due primarily to lower municipal infrastructure support costs.

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

Taxes,other postretirement benefits other than income taxesservice cost ($91 million) and higher interest accrual ($1 million).

Net Interest Expense
Net Interest Expense increased $2$37 million in the three months ended September 30, 20172023 compared with the 20162022 period primarily due primarily to higher property taxes.interest on long-term debt ($20 million) and short-term debt ($18 million).


Other Income (Deductions)Tax Expense
Other income (deductions)Income taxes decreased $2$15 million in the three months ended September 30, 20172023 compared with the 20162022 period due primarily to a decrease in investment and other income.

Net Interest Expense
Net interest expense increased $3 million in the three months ended September 30, 2017 compared with the 2016 period due primarily to higher long-term debt balancesflow-through of COVID-19 assistance benefits for uncollectible accounts ($24 million) and a favorable tax adjustment from a prior year tax return primarily due to an increase in the 2017 period.

Income Tax Expense
Income taxes increased $16 milliongeneral business tax credits ($4 million), offset in the three months ended September 30, 2017 compared with the 2016 period due primarily topart by an increase in allowance for uncollectible accounts ($7 million), higher reserve for injuries and damages ($3 million) and higher income before income tax expense ($11 million), a decrease in tax benefits for plant-related flow through items ($7 million), offset in part by higher research and development tax credits ($21 million).



O&R

  
For the Three Months Ended
September 30, 2023		For the Three Months Ended
September 30, 2022
  
(Millions of Dollars)ElectricGas2023 TotalElectricGas2022 Total2023-2022 Variation
Operating revenues$246$35$281$252$39$291$(10)
Purchased power77— 7789— 89(12)
Gas purchased for resale— 1111— 1616(5)
Other operations and maintenance7620966919888
Depreciation and amortization19726187251
Taxes, other than income taxes15823157221
Operating income (loss)$59$(11)$48$61$(10)$51$(3)
  
For the Three Months Ended
September 30, 2017		 For the Three Months Ended
September 30, 2016		 
  
(Millions of Dollars)Electric
Gas
2017 TotalElectric
Gas
2016 Total2017-2016
Variation
Operating revenues$206$28$234$213$27$240$(6)
Purchased power60—
6069—
69(9)
Gas purchased for resale—
1010—
882
Other operations and maintenance6317806314773
Depreciation and amortization13518125171
Taxes, other than income taxes1472114721—
Operating income$56$(11)$45$55$(7)$48$(3)


Electric
O&R’s results of electric operations for the three months ended September 30, 20172023 compared with the 20162022 period iswere as follows:

  
For the Three Months Ended
  
(Millions of Dollars)September 30, 2023September 30, 2022Variation
Operating revenues$246$252$(6)
Purchased power7789(12)
Other operations and maintenance76697
Depreciation and amortization19181
Taxes, other than income taxes1515—
Electric operating income$59$61$(2)




48


48
70                             



Table of Contents

  
For the Three Months Ended
  
(Millions of Dollars)September 30, 2017September 30, 2016Variation
Operating revenues$206$213$(7)
Purchased power6069(9)
Other operations and maintenance6363—
Depreciation and amortization13121
Taxes, other than income taxes1414—
Electric operating income$56$55
$1

O&R’s electric sales and deliveries for the three months ended September 30, 20172023 compared with the 20162022 period were:

  
Millions of kWh DeliveredRevenues in Millions (a)
  
For the Three Months Ended
  
For the Three Months Ended
  
DescriptionSeptember 30, 2023September 30, 2022VariationPercent
Variation		September 30, 2023September 30, 2022VariationPercent
Variation
Residential/Religious (b)627 654 (27)(4.1)%$140$141$(1)(0.7)%
Commercial/Industrial252 265 (13)(4.9)4145(4)(8.9)
Retail choice customers703 747 (44)(5.9)6267(5)(7.5)
Public authorities34 36 (2)(5.6)35(2)(40.0)
Other operating revenues (c)— — — ——(6)6Large
Total1,616 1,702 (86)(5.1)%(d)$246$252$(6)(2.4)%
(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. Effective July 2021, the majority of O&R’s electric distribution revenues in New Jersey 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 New Jersey 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
  
DescriptionSeptember 30, 2017
September 30, 2016
Variation
Percent
Variation

 September 30, 2017
September 30, 2016Variation
Percent
Variation

Residential/Religious (b)500
585
(85)(14.5)% $105$109$(4)(3.7)%
Commercial/Industrial206
216
(10)(4.6) 3435(1)(2.9)
Retail choice customers818
925
(107)(11.6) 6470(6)(8.6)
Public authorities31
31
—
—
 32150.0
Other operating revenues (c)—
—
—
—
 —
(3)3Large
Total1,555
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 O&R’s electric rate plan.
(d)After adjusting for weather and other variations, electric delivery volumes in O&R’s service area decreased 2.7 percent in the three months ended September 30, 2023 compared with the 2022 period.

Operating revenues decreased $7$6 million in the three months ended September 30, 20172023 compared with the 20162022 period primarily due primarily to lower purchased power expenses ($912 million), offset in part by higher revenues from the New York electric rate plan ($37 million).


Purchased power expenses decreased $9$12 million in the three months ended September 30, 20172023 compared with the 20162022 period due to lower purchased volumes ($108 million), offset by higher and lower unit costs ($14 million).


DepreciationOther operations and amortizationmaintenance expenses increased $1$7 million in the three months ended September 30, 20172023 compared with the 20162022 period primarily due primarily to higher electric utility plant balances.customer assistance costs ($2 million), higher administrative and general expenses ($2 million), higher non-deferred storm costs ($1 million) and higher tree trimming expenses ($1 million).


Gas
O&R’s results of gas operations for the three months ended September 30, 20172023 compared with the 20162022 period iswere as follows:

  
For the Three Months Ended
  
(Millions of Dollars)September 30, 2023September 30, 2022Variation
Operating revenues$35$39$(4)
Gas purchased for resale1116(5)
Other operations and maintenance20191
Depreciation and amortization77— 
Taxes, other than income taxes871 
Gas operating income$(11)$(10)($1)

71                             
  
For the Three Months Ended
  
(Millions of Dollars)September 30, 2017September 30, 2016Variation
Operating revenues$28$27$1
Gas purchased for resale1082
Other operations and maintenance17143
Depreciation and amortization55—
Taxes, other than income taxes77—
Gas operating income$(11)$(7)$(4)



49
Table of Contents

O&R’s gas sales and deliveries, excluding off-system sales, for the three months ended September 30, 20172023 compared with the 20162022 period were:

  
Thousands of Dt DeliveredRevenues in Millions (a)
  
For the Three Months Ended
  
For the Three Months Ended
  
DescriptionSeptember 30, 2023September 30, 2022VariationPercent
Variation		September 30, 2023September 30, 2022VariationPercent
Variation
Residential908 548 360 65.7 %$18$16$212.5 %
General262 139 123 88.5 33——
Firm transportation575 548 27 4.9 44——
Total firm sales and transportation1,745 1,235 510 41.3 %(b)$25$23$28.7 %
Interruptible sales896 830 66 8.0 11——
Generation plants3 6 (3)(50.0)— — ——
Other7 56 (49)(87.5)— 1 (1)—
Other gas revenues— — — —914(5)(35.7)
Total2,651 2,127 524 24.6 %$35$39$(4)(10.3)%
(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.
  
Thousands of Dt Delivered Revenues in Millions (a)
  
For the Three Months Ended
  
 For the Three Months Ended
  
DescriptionSeptember 30, 2017
September 30, 2016
Variation
Percent
Variation

 September 30, 2017
September 30, 2016
Variation
Percent
Variation

Residential579
550
29
5.3% $11$9$222.2%
General198
177
21
11.9
 22—
—
Firm transportation898
884
14
1.6
 88—
—
Total firm sales and transportation1,675
1,611
64
4.0
(b)2119210.5
Interruptible sales819
893
(74)(8.3) 1—
1—
Generation plants5
3
2
66.7
 —
—
—
—
Other74
70
4
5.7
 —
—
—
—
Other gas revenues—
—
—
—
 68(2)(25.0)
Total2,573
2,577
(4)(0.2)% $28$27$13.7%
(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 increased 7.9 percent in the three months ended September 30, 2023 compared with the 2022 period.

Operating revenues increased $1 decreased $4 million in the three months ended September 30, 20172023 compared with the 20162022 period primarily due primarily to higherlower gas purchased for resale ($25 million), offset in part by lowerhigher revenues from the New York gas rate plan ($1 million).


Gas purchased for resale increased $2 decreased $5 million in the three months ended September 30, 20172023 compared with the 20162022 period due to higher purchased volumes ($3 million), offset by lower unit costs ($15 million).


Taxes, Other operations and maintenance expenses increased $3 millionThan Income Taxes
Taxes, other than income taxes, remained consistent in 2023 compared with 2022 for the three months ended September 30, 2017 compared with the 2016 period due primarily to higher pension costs.2023. The principal components of taxes, other than income taxes, were:

For the Three Months Ended
September 30,
(Millions of Dollars)20232022Variation
Property taxes$18$17$1
State and local taxes related to revenue receipts33— 
Payroll taxes22— 
Total$23(a) $22(a) $1 
Income Tax Expense(a)Including sales tax on customers’ bills, total taxes other than income taxes in 2023 and 2022 were $32 million and $35 million, respectively.
Income taxes increased $1 million in the three months ended September 30, 2017 compared with the 2016 period due primarily to the absence in 2017 of a tax benefit from a corporate-owned life insurance policy in 2016 ($2 million), offset in part by lower income before income tax expense ($1 million).



Clean Energy Businesses
On March 1, 2023, Con Edison completed the sale of substantially all of the assets of the Clean Energy Businesses. See Note S and Note T to the Third Quarter Financial Statements. The Clean Energy Businesses’ results of operations for the three months ended September 30, 20172023 compared with the 20162022 period iswere as follows:

  
For the Three Months Ended
  
(Millions of Dollars)September 30, 2023September 30, 2022Variation
Operating revenues$—$325$(325)
Gas purchased for resale—55(55)
Other operations and maintenance—101(101)
Depreciation and amortization—60(60)
Taxes, other than income taxes—5(5)
Operating income$—$104$(104)





72                             
  
For the Three Months Ended
  
(Millions of Dollars)September 30, 2017
September 30, 2016Variation
Operating revenues$177$350$(173)
Purchased power—
234(234)
Gas purchased for resale47398
Other operations and maintenance794039
Depreciation and amortization19118
Taxes, other than income taxes35(2)
Gain on sale of retail electric supply business (2016)—
(104)104
Operating income$29$125$(96)


Con Edison Transmission

Other Income (Deductions)
Operating revenues decreased $173Other income increased $3 million in the three months ended September 30, 20172023 compared with the 20162022 period due primarily to lower electric retail revenues of $256 million 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


50

50




2 (see Note O to the Third Quarter Financial Statements). Energy services revenues increased $9 million. Wholesale revenues increased $10 million due to higher sales volumes. Net mark-to-market valuesinvestment income from New York Transco ($3 million).

Income Tax Expense
Income taxes 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 million in the three months ended September 30, 2017 compared with the 2016 period due primarily to lower electric costs due to the sale of the retail electric supply business in September 2016 ($210 million) and changes in mark-to-market values ($24 million).

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

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

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

Taxes, other than income taxes decreased $2 million in the three months ended September 30, 20172023 compared with the 20162022 period primarily due to lower gross receiptshigher income before income tax from the sale of the retail electric supply business.expense.


Gain on sale of retail electric supply business was $104
Other
Income Tax Expense
Income taxes increased $19 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, 20172023 compared with the 20162022 period primarily due primarily to the gain related to the acquisitiona higher unitary state tax adjustment, net 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 expensefederal benefit ($447 million), higher renewable energy tax credits ($1 million)changes in valuation allowance and the increase to deferred state income taxes in 2016apportionments 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 differencesBusinesses ($1314 million), offset in part by an increase in renewable energy tax credits ($2 million).


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





73                             
51
Table of Contents


Nine Months Ended September 30, 2017 Compared with Nine Months Ended September 30, 2016
The Companies’ results of operations in 2017 compared with 2016 were:for the nine months ended September 30, 2023 and 2022 were as follows:

  CECONYO&RClean Energy Businesses (a)
Con Edison
Transmission
Other (b)Con Edison (c)
(Millions of Dollars)202320222023202220232022202320222023202220232022
Operating revenues$10,287$9,972$803$813$129$857$3$3$(3)$(6)$11,219$11,639
Purchased power1,8021,639191210—6———(4)1,9931,851
Fuel241255————————241255
Gas purchased for resale518582829441157——(1)—640833
Other operations and maintenance2,3412,26728325947252810(1)(3)2,6782,785
Depreciation and amortization1,4281,3417873—17811(1)—1,5061,593
Taxes, other than income taxes2,2072,1596967416——262,2822,248
Gain on sale of the Clean Energy Businesses————————866—866—
Operating income1,7501,72910011037248(6)(8)864(5)2,7452,074
Other income (deductions)55024536161222142(8)611269
Net interest expense695604383316(68)23714758586
Income before income tax expense1,6051,370989322318143859(27)2,5981,757
Income tax expense297232232136841898416330
Net income$1,308$1,138$75$72$19$250$10$2$770$(35)$2,182$1,427
Loss attributable to non-controlling interest— —— —(3)(43)— —— —(3)(43)
Net income for common stock$1,308$1,138$75$72$22$293$10$2$770$(35)$2,185$1,470
(a)On March 1, 2023, Con Edison completed the sale of substantially all of the assets of the Clean Energy Businesses. See Note S and Note T to the Third Quarter Financial Statements.
(b)Other includes the parent company, Con Edison’s tax equity investments, the deferred project held for sale and consolidation adjustments. See Note T to the Third Quarter Financial Statements.
(c)Represents the consolidated results of operations of Con Edison and its businesses.






74                             
  CECONYO&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$2072.7 %$375.9%$(538)(53.9)%$1—%$(3)Large
$(296)(3.2)%
Purchased power(106)(8.7)(6)(3.9)(679)Large
—
—
(3)Large
(794)(38.8)
Fuel3627.1
—
—
—
—
—
—
—
—
3627.1
Gas purchased for resale15571.4
2062.5
89Large
—
—
—
—
26482.5
Other operations and maintenance(113)(5.4)167.3
5040.3
6Large
—
—
(41)(1.7)
Depreciation and amortization668.0
36.0
2480.0
—
—
—
—
9310.3
Taxes, other than income taxes775.3
23.3
(4)(25.0)—
—
(1)Large
744.9
Gain on sale of retail electric supply business (2016) and solar electric production project (2017)

—
—
—
—
(103)Large
—
—
—
—
(103)Large
Operating income925.1
21.8
(121)(65.8)(5)Large
1Large
(31)(1.5)
Other income less deductions4Large
(1)Large
(2)(5.7)37Large
(1)—
3760.7
Net interest expense122.7
(1)(3.6)1147.8
8Large
(2)(18.2)285.4
Income before income tax expense846.2
22.3
(134)(68.4)24Large
2(20.0)(22)(1.3)
Income tax expense6012.2
412.5
(68)(89.5)10Large
(9)Large
(3)(0.5)
Net income$242.8 %$(2)(3.6)%$(66)(55.0)%$14Large
$11Large
$(19)(1.8)%
(a)Includes parent company and consolidation adjustments.
(b)Represents the consolidated results of operations of Con Edison and its businesses.



52

52





CECONY

  
For the Nine Months Ended
September 30, 2023
  
For the Nine Months Ended
September 30, 2022
  
  
(Millions of Dollars)ElectricGasSteam2023 TotalElectricGasSteam2022 Total2023-2022 Variation
Operating revenues$7,722$2,140$425$10,287$7,401$2,127$444$9,972$315
Purchased power1,771— 311,8021,593— 461,639163
Fuel129— 112241170— 85255(14)
Gas purchased for resale— 518— 518— 582— 582(64)
Other operations and maintenance1,7813861742,3411,7743461472,26774
Depreciation and amortization1,035319741,428994275721,34187
Taxes, other than income taxes1,7143841092,2071,6374131092,15948
Operating income$1,292$533$(75)$1,750$1,233$511$(15)$1,729$21
  
For the Nine Months Ended
September 30, 2017
  
For the Nine Months Ended
September 30, 2016
  
  
(Millions of Dollars)Electric
Gas
Steam
2017 TotalElectric
Gas
Steam
2016 Total2017-2016
Variation
Operating revenues$6,079$1,421$448$7,948$6,222$1,113$406$7,741$207
Purchased power1,084—
261,1101,191—
251,216(106)
Fuel95—
7416981—
5213336
Gas purchased for resale—
372—
372—
217—
217155
Other operations and maintenance1,5283301341,9921,6593071392,105(113)
Depreciation and amortization690137648916451186282566
Taxes, other than income taxes1,205220981,5231,159198891,44677
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, 20172023 compared with the 20162022 period iswere as follows:
 
  
For the Nine Months Ended
  
(Millions of Dollars)September 30, 2023September 30, 2022Variation
Operating revenues$7,722$7,401$321
Purchased power1,7711,593178
Fuel129170(41)
Other operations and maintenance1,7811,7747
Depreciation and amortization1,03599441
Taxes, other than income taxes1,7141,63777
Electric operating income$1,292$1,233$59
  
For the Nine Months Ended
  
(Millions of Dollars)September 30, 2017September 30, 2016Variation
Operating revenues$6,079$6,222$(143)
Purchased power1,0841,191(107)
Fuel958114
Other operations and maintenance1,5281,659(131)
Depreciation and amortization69064545
Taxes, other than income taxes1,2051,15946
Electric operating income$1,477$1,487$(10)


CECONY’s electric sales and deliveries for the nine months ended September 30, 20172023 compared with the 20162022 period were:

  
Millions of kWh DeliveredRevenues in Millions (a)
  
For the Nine Months Ended
  
For the Nine Months Ended
  
DescriptionSeptember 30, 2023September 30, 2022VariationPercent
Variation		September 30, 2023September 30, 2022VariationPercent
Variation
Residential/Religious (b)8,854 9,283 (429)(4.6)%$2,614$2,600$140.5 %
Commercial/Industrial8,179 7,857 322 4.1 2,0832,026572.8 
Retail choice customers15,363 16,204 (841)(5.2)1,7811,950(169)(8.7)
NYPA, Municipal Agency and other sales7,113 7,185 (72)(1.0)609576335.7 
Other operating revenues (c)— — — —635249386Large
Total39,509 40,529 (1,020)(2.5)%(d)$7,722$7,401$3214.3 %
(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.
  
Millions of kWh Delivered Revenues in Millions (a)
  
For the Nine Months Ended
  
 For the Nine Months Ended
  
DescriptionSeptember 30, 2017
September 30, 2016
Variation
Percent
Variation
 September 30, 2017September 30, 2016Variation
Percent
Variation
Residential/Religious (b)7,576
8,130
(554)(6.8)% $1,925$2,017$(92)(4.6)%
Commercial/Industrial6,965
7,220
(255)(3.5) 1,3931,381120.9
Retail choice customers19,748
20,404
(656)(3.2) 2,0922,114(22)(1.0)
NYPA, Municipal Agency and other sales7,548
7,641
(93)(1.2) 48347491.9
Other operating revenues (c)—
—
—
—
 186236(50)(21.2)
Total41,837
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.

(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 CECONY’s rate plans.

(d)After adjusting for variations, primarily weather and billing days, electric delivery volumes in CECONY’s service area decreased 0.4 percent in the nine months ended September 30, 2023 compared with the 2022 period.
53

Operating revenues decreased $143 increased $321 million in the nine months ended September 30, 20172023 compared with the 20162022 period primarily due primarily to lower purchased power costs ($107 million). The lower revenues reflected the decline in surcharges for assessments and fees that were collectedan increase in revenues from customersthe electric rate plan ($13261 million) and higher purchased power expenses ($178 million), offset in part by lower unbilled revenue accrual ($102 million), lower fuel expenses ($41 million) and a change in incentives earned under the earnings adjustment mechanisms (EAMs) ($6 million).

75                             


Purchased power expenses decreased $107increased $178 million in the nine months ended September 30, 20172023 compared with the 20162022 period due to higher unit costs ($259 million) offset in part by lower purchased volumes ($9581 million) and unit costs ($12 million).


Fuel expenses increased $14decreased $41 million in the nine months ended September 30, 20172023 compared with the 20162022 period due to higherlower unit costs ($1249 million) and, offset in part by higher purchased volumes from the company’sCECONY's electric generating facilities ($28 million).


Other operations and maintenance expenses decreased $131increased $7 million in the nine months ended September 30, 20172023 compared with the 20162022 period primarily due primarily to lower costs for pension and other postretirement benefitshigher electric operations maintenance activities ($1148 million), surcharges for assessments and fees that are collected in revenues from customers ($13 million), environmental costs ($17 million) and stock based compensation ($6 million), offset by higher costs for municipal infrastructure support ($20 million).


Depreciation and amortization expenses increased $45$41 million in the nine months ended September 30, 20172023 compared with the 20162022 period primarily due primarily to higher electric utility plant balances.


Taxes, other than income income taxes increased $46$77 million in the nine months ended September 30, 20172023 compared with the 20162022 period primarily due primarily to higher property taxes ($43 million) and the absence in 2017 of a favorable state audit settlement in 2016 ($5130 million), offset in part by a lower state and localdeferral of over-collected property taxes ($454 million).


Gas
CECONY’s results of gas operations for the nine months ended September 30, 20172023 compared with the 20162022 period iswere as follows:

  
For the Nine Months Ended
  
(Millions of Dollars)September 30, 2023September 30, 2022Variation
Operating revenues$2,140$2,127$13
Gas purchased for resale518582(64)
Other operations and maintenance38634640
Depreciation and amortization31927544
Taxes, other than income taxes384413(29)
Gas operating income$533$511$22
  
For the Nine Months Ended
  
(Millions of Dollars)September 30, 2017September 30, 2016Variation
Operating revenues$1,421$1,113$308
Gas purchased for resale372217155
Other operations and maintenance33030723
Depreciation and amortization13711819
Taxes, other than income taxes22019822
Gas operating income$362$273$89



54

54





CECONY’s gas sales and deliveries, excluding off-system sales, for the nine months ended September 30, 20172023 compared with the 20162022 period were:

  
Thousands of Dt DeliveredRevenues in Millions (a)
  
For the Nine Months Ended
  
For the Nine Months Ended
  
DescriptionSeptember 30, 2023September 30, 2022VariationPercent
Variation		September 30, 2023September 30, 2022VariationPercent
Variation
Residential34,900 39,172 (4,272)(10.9)%$925$942$(17)(1.8)%
General22,756 25,507 (2,751)(10.8)410428(18)(4.2)
Firm transportation55,808 57,307 (1,499)(2.6)643590539.0 
Total firm sales and transportation113,464 121,986 (8,522)(7.0)(b)1,9781,960180.9 
Interruptible sales (c)6,136 4,875 1,261 25.9 434037.5 
NYPA39,306 34,867 4,439 12.7 22— —
Generation plants46,449 42,329 4,120 9.7 2024(4)(16.7)
Other14,767 14,956 (189)(1.3)2727——
Other operating revenues (d)— — — —7074(4)(5.4)
Total220,122 219,013 1,109 0.5 %$2,140$2,127$130.6 %
(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 CECONY’s service area increased 2.1 percent in the nine months ended September 30, 2023 compared with the 2022 period.
(c)Includes 2,564 thousand and 1,702 thousand of Dt for the 2023 and 2022 periods, respectively, that 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 CECONY’s rate plans.





76                             

  
Thousands of Dt Delivered Revenues in Millions (a)
  
For the Nine Months Ended
  
 For the Nine Months Ended
  
DescriptionSeptember 30, 2017
September 30, 2016
Variation
Percent
Variation
 September 30, 2017September 30, 2016
Variation
Percent
Variation
Residential39,814
35,565
4,249
11.9% $613$506$10721.1 %
General23,427
20,962
2,465
11.8
 2552005527.5
Firm transportation53,952
51,333
2,619
5.1
 3903325817.5
Total firm sales and transportation117,193
107,860
9,333
8.7
(b)1,2581,03822021.2
Interruptible sales (c)6,526
7,587
(1,061)(14.0) 302913.4
NYPA30,233
31,970
(1,737)(5.4) 22—
—
Generation plants48,989
70,895
(21,906)(30.9) 1919—
—
Other16,756
16,442
314
1.9
 2425(1)(4.0)
Other operating revenues (d)—
—
—
—
 88—
88—
Total219,697
234,754
(15,057)(6.4)% $1,421$1,113$30827.7 %
(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$13 million in the nine months ended September 30, 20172023 compared with the 20162022 period primarily due primarily to higheran increase in revenues from the gas rate plan and growth in the number of customers ($13373 million) and increaseda change in incentives earned under the earnings adjustment mechanisms (EAMs) ($3 million), offset in part by a decrease in gas purchased for resale expense ($15564 million).


Gas purchased for resale increased $155 decreased $64 million in the nine months ended September 30, 20172023 compared with the 20162022 period due to lower purchased volumes ($163 million), offset in part by higher unit costs ($15199 million) and purchased volumes ($4 million).


Other operations and maintenance expenses increased $23$40 million in the nine months ended September 30, 20172023 compared with the 20162022 period primarily due primarily to higher pensiongas operations cost ($36 million) and other postretirement benefits costs ($7 million), health and life expenses ($5 million), surcharges for assessments and fees that are collectedan increase in revenues from customersmunicipal infrastructure support ($3 million) and costs for maintenance of gas mains ($2 million).


Depreciation and amortization expenses increased $19$44 million in the nine months ended September 30, 20172023 compared with the 20162022 period primarily due primarily to higher gas utility plant balances.


Taxes, other than income taxes increased $22 decreased $29 million in the nine months ended September 30, 20172023 compared with the 20162022 period primarily due primarily to a lower deferral of over-collected property taxes ($66 million), offset in part by higher property taxes ($1232 million), and higher state and local taxes ($64 million) and payroll taxes ($3 million).



55


Steam
CECONY’s results of steam operations for the nine months ended September 30, 20172023 compared with the 20162022 period iswere as follows:

  
For the Nine Months Ended
  
(Millions of Dollars)September 30, 2023September 30, 2022Variation
Operating revenues$425$444$(19)
Purchased power3146(15)
Fuel1128527
Other operations and maintenance17414727
Depreciation and amortization74722
Taxes, other than income taxes109109—
Steam operating income$(75)$(15)$(60)
  
For the Nine Months Ended
  
(Millions of Dollars)September 30, 2017September 30, 2016Variation
Operating revenues$448$406$42
Purchased power26251
Fuel745222
Other operations and maintenance134139(5)
Depreciation and amortization64622
Taxes, other than income taxes98899
Steam operating income$52$39$13


CECONY’s steam sales and deliveries for the nine months ended September 30, 20172023 compared with the 20162022 period were:

  
Millions of Pounds DeliveredRevenues in Millions
  
For the Nine Months Ended
  
For the Nine Months Ended
  
DescriptionSeptember 30, 2023September 30, 2022VariationPercent
Variation		September 30, 2023September 30, 2022VariationPercent
Variation
General315 390 (75)(19.2)%$19$21$(2)(9.5)%
Apartment house3,408 3,781 (373)(9.9)114115(1)(0.9)
Annual power7,924 9,109 (1,185)(13.0)278297(19)(6.4)
Other operating revenues (a)— — — —1411327.3 
Total11,647 13,280 (1,633)(12.3)%(b)$425$444$(19)(4.3)%
(a)Other steam operating revenues generally reflect changes in regulatory assets and liabilities in accordance with CECONY’s rate plan.
  
Millions of Pounds Delivered Revenues in Millions
  
For the Nine Months Ended
  
 For the Nine Months Ended
  
DescriptionSeptember 30, 2017
September 30, 2016
Variation
Percent
Variation
 September 30, 2017September 30, 2016Variation
Percent
Variation
General364
345
19
5.5% $20$18$211.1%
Apartment house4,248
4,251
(3)(0.1) 1191071211.2
Annual power10,074
10,640
(566)(5.3) 300284165.6
Other operating revenues (a)—
—
—
—
 9(3)12Large
Total14,686
15,236
(550)(3.6)%(b)$448$406$4210.3%
(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 0.6 percent in the nine months ended September 30, 2023 compared with the 2022 period.

Operating revenues increased $42 decreased $19 million in the nine months ended September 30, 20172023 compared with the 20162022 period primarily due primarily to the impact of milder than normal weather in the 2022 period ($34 million), lower purchased power expenses ($15 million), offset in part by higher fuel expenses ($2227 million), and higher revenues from the weather impact on revenues ($6 million), lower regulatory reserve related to steam earnings sharingincrease in average normalized use per customer ($7 million), a property tax refund incentive ($3 million), and higher purchased power costs ($1 million).


Purchased power expenses increased $1decreased $15 million in the nine months ended September 30, 20172023 compared with the 20162022 period due to higherlower unit costs ($518 million), offset in part by lowerhigher purchased volumes ($43 million).


77                             

Fuel expenses increased $22$27 million in the nine months ended September 30, 20172023 compared with the 20162022 period due to higher unit costs ($2352 million), offset in part by lower purchased volumes from the company’sCECONY’s steam generating facilities ($125 million).


Other operations and maintenance expenses decreased $5increased $27 million in the nine months ended September 30, 20172023 compared with the 20162022 period primarily due primarily to lower equipment maintenance expenses.higher costs for pension and other postretirement benefits, reflecting reconciliation to the rate plan level ($18 million) and an increase in municipal infrastructure support ($4 million).


DepreciationTaxes, Other Than Income Taxes
At $2,207 million, taxes other than income taxes remain one of CECONY’s largest operating expenses for the nine months ended September 30, 2023. The principal components of, and amortizationvariations in, taxes other than income taxes were:
For the Nine Months Ended
September 30,
(Millions of Dollars)20232022Variation
Property taxes$1,887$1,718$169
State and local taxes related to revenue receipts312312—
Payroll taxes66624
Other taxes(58)67(125)
Total$2,207(a)$2,159(a)$48
(a)Including sales tax on customers’ bills, total taxes other than income taxes in 2023 and 2022 were $2,747 million and $2,650 million, respectively.

Other Income (Deductions)
Other income increased $2$305 million in the nine months ended September 30, 20172023 compared with the 20162022 period primarily due primarily to higher steam utility plant balances.

Taxes,lower costs associated with components of pension and other postretirement benefits other than income taxesservice cost ($272 million) and higher hedging program interest accrual ($5 million).

Net Interest Expense
Net interest expense increased $9$91 million in the nine months ended September 30, 20172023 compared with the 20162022 period primarily due primarily to higher property taxesinterest expense for long-term debt ($756 million) and state and localshort-term debt ($45 million), offset in part by an increase in allowance for borrowed funds used during construction ($15 million).

Income Tax Expense
Income taxes ($1 million).

Net Interest Expense
Net interest expense increased $12$65 million in the nine months ended September 30, 20172023 compared with the 20162022 period due primarily to higher long-term debt balances in the 2017 period.



56

56




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 ($3361 million), a remeasurement of state deferred tax assets and liabilities as a result of the enacted New York State legislation ($10 million), a decrease in tax benefits for plant-related flow through itemsthe amortization of excess deferred federal income taxes due to the TCJA ($276 million), lower research and development tax credits ($10 million) and a higher reserve for injuries and damages ($95 million), lower flow-through tax benefits in 2023 for plant-related items ($4 million) and lower research and development credits from prior years net of uncertain tax positions ($2 million), offset in part by lower state income taxeshigher flow-through of COVID-19 assistance benefits for uncollectible accounts ($7 million), higher research and development tax credits included in Con Edison's filing of its 2016 consolidated federal tax return in September 2017 ($515 million), a decrease in bad debt expensefavorable tax adjustment from a prior year tax return ($24 million) and a decrease in uncertain tax positionslower allowance for uncollectible accounts ($14 million).






78                             

O&R

  
For the Nine Months Ended
September 30, 2023		For the Nine Months Ended
September 30, 2022
  
(Millions of Dollars)ElectricGas2023 TotalElectricGas2022 Total2023-2022 Variation
Operating revenues$588$215$803$594$219$813$(10)
Purchased power191— 191210— 210(19)
Gas purchased for resale— 8282— 9494(12)
Other operations and maintenance223602832035625924
Depreciation and amortization5622785320735
Taxes, other than income taxes4524694324672
Operating income$73$27$100$85$25$110$(10)
  
For the Nine Months Ended
September 30, 2017		 For the Nine Months Ended
September 30, 2016		 
  
(Millions of Dollars)Electric
Gas
2017 TotalElectric
Gas
2016 Total2017-2016
Variation
Operating revenues$495$172$667$497$133$630$37
Purchased power148—
148154—
154(6)
Gas purchased for resale—
5252—
323220
Other operations and maintenance185512361804022016
Depreciation and amortization3815533713503
Taxes, other than income taxes4121624020602
Operating income$83$33$116$86$28$114$2


Electric
O&R’s results of electric operations for the nine months ended September 30, 20172023 compared with the 20162022 period iswere as follows:

  
For the Nine Months Ended
  
(Millions of Dollars)September 30, 2023September 30, 2022Variation
Operating revenues$588$594$(6)
Purchased power191210(19)
Other operations and maintenance22320320
Depreciation and amortization56533
Taxes, other than income taxes45432
Electric operating income$73$85$(12)
  
For the Nine Months Ended
  
(Millions of Dollars)September 30, 2017September 30, 2016Variation
Operating revenues$495$497$(2)
Purchased power148154(6)
Other operations and maintenance1851805
Depreciation and amortization38371
Taxes, other than income taxes41401
Electric operating income$83$86$(3)



57


O&R’s electric sales and deliveries for the nine months ended September 30, 20172023 compared with the 20162022 period were:

  
Millions of kWh DeliveredRevenues in Millions (a)
  
For the Nine Months Ended
  
For the Nine Months Ended
  
DescriptionSeptember 30, 2023September 30, 2022VariationPercent
Variation		September 30, 2023September 30, 2022VariationPercent
Variation
Residential/Religious (b)1,510 1,482 281.9 %$329$315$144.4 %
Commercial/Industrial745 706 395.5 11211110.9 
Retail choice customers1,761 2,015 (254)(12.6)132159(27)(17.0)
Public authorities87 86 11.2 912(3)(25.0)
Other operating revenues (c)— — — —6(3)9— 
Total4,103 4,289 (186)(4.3)%(d)$588$594$(6)(1.0)%
(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 New Jersey 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 New Jersey 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 Nine Months Ended
  
 For the Nine Months Ended
  
DescriptionSeptember 30, 2017
September 30, 2016
Variation
Percent
Variation
 September 30, 2017September 30, 2016Variation
Percent
Variation
Residential/Religious (b)1,208
1,307
(99)(7.6)% $242$240$20.8%
Commercial/Industrial574
607
(33)(5.4) 8889(1)(1.1)
Retail choice customers2,255
2,434
(179)(7.4) 155166(11)(6.6)
Public authorities79
76
3
3.9
 76116.7
Other operating revenues (c)—
—
—
—
 3(4)7Large
Total4,116
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.

(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 O&R’s electric rate plan.
(d)After adjusting for weather and other variations, electric delivery volumes in O&R’s service area decreased 0.6 percent in the nine months ended September 30, 2023 compared with the 2022 period.

Operating revenues decreased $2$6 million in the nine months ended September 30, 20172023 compared with the 20162022 period primarily due primarily to lower purchased power expenseexpenses ($6 million) and lower revenues from rental property ($119 million), offset in part by higher revenues from the New York electric rate plan ($614 million).


Purchased power expenses decreased $6$19 million in the nine months ended September 30, 20172023 compared with the 20162022 period primarily due to lower purchased volumes ($510 million) and lower unit costs ($19 million).


Other operations and maintenance expenses increased $5$20 million in the nine months ended September 30, 20172023 compared with the 20162022 period primarily due primarily to operatinghigher non-deferred storm costs related to weather events in 2017($4 million), higher tree trimming
79                             

expenses ($3 million), higher uncollectible expenses ($2 million), higher surcharges for assessmentsshared services costs ($2 million), higher administrative and fees that are collected in revenues from customersgeneral expenses ($2 million), higher customer assistance costs ($1 million) and a higher reserve for injuries and damagespension costs, reflecting reconciliation to the rate plan level ($1 million).

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

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


Gas
O&R’s results of gas operations for the nine months ended September 30, 20172023 compared with the 20162022 period iswere as follows:

  
For the Nine Months Ended
  
(Millions of Dollars)September 30, 2023September 30, 2022Variation
Operating revenues$215$219$(4)
Gas purchased for resale8294(12)
Other operations and maintenance60564
Depreciation and amortization22202
Taxes, other than income taxes2424—
Gas operating income$27$25$2
  
For the Nine Months Ended
  
(Millions of Dollars)September 30, 2017September 30, 2016Variation
Operating revenues$172$133$39
Gas purchased for resale523220
Other operations and maintenance514011
Depreciation and amortization15132
Taxes, other than income taxes21201
Gas operating income$33$28$5



58

58





O&R’s gas sales and deliveries, excluding off-system sales, for the nine months ended September 30, 20172023 compared with the 20162022 period were:

  
Thousands of Dt DeliveredRevenues in Millions (a)
  
For the Nine Months Ended
  
For the Nine Months Ended
  
DescriptionSeptember 30, 2023September 30, 2022VariationPercent
Variation		September 30, 2023September 30, 2022VariationPercent
Variation
Residential7,640 8,433 (793)(9.4)%$142$144$(2)(1.4)%
General1,669 1,945 (276)(14.2)2427(3)(11.1)
Firm transportation3,783 4,702 (919)(19.5)2933(4)(12.1)
Total firm sales and transportation13,092 15,080 (1,988)(13.2)(b)$195$204$(9)(4.4)
Interruptible sales2,656 2,936 (280)(9.5)44— — 
Generation plants4 11 (7)(63.6)— — — — 
Other312 437 (125)(28.6)11— — 
Other gas revenues— — — —1510550.0 
Total16,064 18,464 (2,400)(13.0)%$215$219$(4)(1.8)%
(a)Revenues from New York gas sales are subject to a weather normalization clause and a revenue decoupling mechanism as a result of which delivery revenues are generally not affected by changes in delivery volumes from levels assumed when rates were approved.
  
Thousands of Dt Delivered Revenues in Millions (a)
  
For the Nine Months Ended
  
 For the Nine Months Ended
  
DescriptionSeptember 30, 2017
September 30, 2016
Variation
Percent
Variation
 September 30, 2017
September 30, 2016
Variation
Percent
Variation
Residential5,556
5,266
290
5.5% $79$55$2443.6%
General1,447
1,224
223
18.2
 1610660.0
Firm transportation6,543
7,188
(645)(9.0) 504912.0
Total firm sales and transportation13,546
13,678
(132)(1.0)(b)1451143127.2
Interruptible sales2,966
3,020
(54)(1.8) 523Large
Generation plants6
15
(9)(60.0) —
—
—
—
Other589
583
6
1.0
 1—
1—
Other gas revenues—
—
—
—
 2117423.5%
Total17,107
17,296
(189)(1.1)% $172$133$3929.3%
(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 0.4 percent in the nine months ended September 30, 2023 compared with 2022 period.

Operating revenues increased $39decreased $4 million in the nine months ended September 30, 20172023 compared with the 20162022 period primarily due primarily to an increasea decrease in gas purchased for resale ($2012 million) and, offset in part by higher revenues from the New York gas rate plan ($145 million).


Gas purchased for resale increased $20 decreased $12 million in the nine months ended September 30, 20172023 compared with the 20162022 period primarily due to higherlower purchased volumes ($1217 million) and, offset in part by higher unit costs ($85 million).


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

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

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

Income Tax Expense
Income taxes increased $4 million in the nine months ended September 30, 20172023 compared with the 20162022 period primarily due primarily to higher income before income tax expense ($1 million), a decrease in tax benefits for plant-related flow through itemspension costs, reflecting reconciliation to the rate plan level ($1 million) and higher uncollectible expenses ($1 million).

Taxes, Other Than Income Taxes
Taxes, other than income taxes, increased by $2 million in 2023 compared with 2022 for the absence in 2017nine months ended September 30, 2023. The principal components of a tax benefit from a corporate-owned life insurance policy in 2016 ($2 million).


taxes, other than income taxes, were:


59


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For the Nine Months Ended
September 30,
(Millions of Dollars)20232022Variation
Property taxes$53$52$1
State and local taxes related to revenue receipts99— 
Payroll taxes761 
Total$69(a) $67(a) $2 
(a)Including sales tax on customers’ bills, total taxes other than income taxes in 2023 and 2022 were $93 million and $101 million, respectively.


Clean Energy Businesses
On March 1, 2023, Con Edison completed the sale of substantially all of the assets of the Clean Energy Businesses. See Note S and Note T to the Third Quarter Financial Statements. The Clean Energy Businesses’ results of operations for the nine months ended September 30, 20172023 compared with the 20162022 period iswere as follows:

  
For the Nine Months Ended
  
(Millions of Dollars)September 30, 2023September 30, 2022Variation
Operating revenues$129$857$(728)
Purchased power—6 (6)
Gas purchased for resale41157(116)
Other operations and maintenance47252(205)
Depreciation and amortization—178(178)
Taxes, other than income taxes416(12)
Operating income$37$248$(211)

  
For the Nine Months Ended
  
(Millions of Dollars)September 30, 2017September 30, 2016Variation
Operating revenues$460$998$(538)
Purchased power(3)676(679)
Gas purchased for resale1617289
Other operations and maintenance17412450
Depreciation and amortization543024
Taxes, other than income taxes1216(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)
Net Interest Expense
(a)     See Note O to the Third Quarter Financial Statements.

Operating revenues decreased $538Net interest expense increased $84 million in the nine months ended September 30, 20172023 compared with the 20162022 period primarily due primarily to lower electric retail revenues of $781 million fromunrealized gains on interest rate swaps in the 2023 period. On March 1, 2023, Con Edison completed the sale of substantially all 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 operationassets of the Clean Energy Businesses and revenues from the engineering, procurementimpact on the 2023 period is shown through the date of sale. See Note S and construction of Upton 2 (see Note OT to the Third Quarter Financial Statements). Energy services revenues increased $21 million. Wholesale revenues increased $105 million due to higher sales volumes. Net mark-to-market valuesStatements.

Income Tax Expense
Income taxes decreased $6 million of which $11 million in losses are reflected in purchased power costs and $5 million in gains are reflected in revenues.

Purchased power expenses decreased $679$65 million in the nine months ended September 30, 20172023 compared with the 20162022 period primarily due primarily to lower electric costs dueincome before income tax expense ($74 million), lower income attributable to non-controlling interest ($12 million) and a lower reserve for uncertain tax positions ($5 million) offset in part by lower renewable energy tax credits ($20 million). On March 1, 2023, Con Edison completed the sale of substantially all of the retail electric supply business inassets of the Clean Energy Businesses and the impact for the nine months ended September 2016 ($689 million) offset by changes in mark-to-market values ($11 million).30, 2023 is shown through the date of the sale. See Note S and Note T to the Third Quarter Financial Statements.


Gas purchased for resaleIncome (Loss) Attributable to Non-Controlling Interest
Income attributable to non-controlling interest increased $89$40 million to a loss of $3 million in the nine months ended September 30, 20172023 compared with the 20162022 period primarily due to higher purchased volumes.

Other operations and maintenance expenses increased $50 million in the nine months ended September 30, 2017 compared with the 2016 period due to Upton 2 engineering, procurement and construction costs (see Note O to the Third Quarter Financial Statements) and an increase in energy services costs.

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

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

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



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

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




60

60





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).

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, 20172023 compared with the 20162022 period primarily due primarily to a new debt issuance in 2016.higher investment income from New York Transco ($8 million).


Other Income (Deductions)Tax Expense
Other income (deductions)Income taxes increased $37$3 million in the nine months ended September 30, 20172023 compared with the 20162022 period primarily due primarily to earnings from equity investments in Stagecoach Gas Services, LLC, substantially all of which were made in June 2016.higher income before income tax expense.


Other
Income Tax Expense
Income taxes increased $10$81 million in the nine months ended September 30, 20172023 compared with the 20162022 period primarily due primarily to higher income before income tax expense.expense due to the sale of the Clean Energy Businesses ($207

81                             

Othermillion) and a higher unitary state tax adjustment, net of federal benefit ($17 million), offset in part by the recognition of unamortized investment tax credits ($108 million) and lower state taxes due to change in state apportionments, net of federal income taxes ($27 million), both related to the sale of the Clean Energy Businesses and an increase in renewable energy tax credits ($5 million).
For Con Edison, “Other” includes parent company and consolidation adjustments.



Liquidity and Capital Resources
The Companies monitor the financial markets closely, including borrowing rates and daily cash collections. Increases in aged accounts receivable balances, inflationary pressure and higher interest rates have increased 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, "Aged Accounts Receivable Balances," above, "Capital Requirements and Resources," below and "Regulatory Matters - Rate Plans - CECONY Electric and Gas" and "COVID-19 Regulatory Matters" in Note B to the Third Quarter Financial Statements.

Con Edison and the Utilities have a $2,500 million revolving credit agreement (the Credit Agreement) in place under which banks are committed to provide loans on a revolving credit basis until March 2028, unless extended for up to two additional one-year terms, subject to certain conditions. CECONY has a $500 million 364-day revolving credit agreement (the CECONY Credit Agreement) in place under which banks are committed to provide loans on a revolving credit basis until March 2024, subject to certain conditions. Con Edison and the Utilities have not entered into any loans under the Credit Agreement and CECONY has not entered into any loans under the CECONY Credit Agreement. See Note D to the Third Quarter Financial Statements.

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




82                             

The Companies’ cash, and temporary cash investments and restricted cash resulting from operating, investing and financing activities for the nine months ended September 30, 20172023 and 20162022 are summarized as follows:

For the Nine Months Ended September 30,
  CECONYO&RClean Energy Businesses (d)Con Edison
Transmission		Other (a)(b)Con Edison (c)
(Millions of Dollars)202320222023202220232022202320222023202220232022
Operating activities$1,221$2,191$127$165$—$251$(145)$49$(22)$(38)$1,181$2,618
Investing activities
(3,178)(2,929)(208)(162)(248)(206)(49)(49)4,035—352(3,346)
Financing activities921(157)75(2)—(42)212—(3,725)24(2,517)(177)
Net change for the period(1,036)(895)(6)1(248)318 —288(14)(984)(905)
Balance at beginning of period1,0569203529248178— —191191,5301,146
Balance at end of period (c)$20$25$29$30$—$181$18 $—$479$5$546$241
Less: Cash balances held for sale (d)——————— —6 —6—
Balance at end of period excluding held for sale$20$25$29$30$—$181$18 $—$473$5$540$241
(a) Other includes the parent company, Con Edison’s tax equity investments, the deferred project held for sale and consolidation adjustments. See Note T to the Third Quarter Financial Statements.
(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 March 1, 2023, Con Edison sold substantially all of the assets of the Clean Energy Businesses. See Note S and Note T to the Third Quarter Financial Statements.

83                             
 For the Nine Months Ended September 30,
  Con EdisonCECONY
(Millions of Dollars)2017
2016Variation2017
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 period776944(168)702843(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)


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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.

The decline in business activity in the Utilities’ service territory from 2020 through 2022 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 electric and gas rate plans, changes in delivery volumes from levels assumed when rates were approved may affect the timing of cash flows, but generallylargely not net income. The Utilities’ New York electric and gas rate plans also include COVID-19 provisions for the reconciliation of write-offs of customer accounts receivable balances to amounts reflected in rates that may affect the timing of cash flows, but largely not net income. The prices at which the Utilities provide energy to their customers are determined in accordance with their rate plans. During 2022, increases in electric and gas commodity prices further contributed 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 “COVID-19 Regulatory Matters” in Note B to the Third Quarter Financial Statements, "Aged Accounts Receivable Balances," above and “Financial and Commodity Market Risks – Commodity Price Risk,” below.


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


Net cash flows from operating activities for the nine months ended September 30, 20172023 for Con Edison and CECONY were $109$1,437 million lower and $227$970 million lower, respectively, than in the 20162022 period. The change in net cash flows for Con Edison primarily reflects a decrease in accounts payable ($634 million), lower net deferred credits, noncurrent liabilities and other regulatory liabilities balances ($562 million) and an increase in prepayments ($253 million). For CECONY, reflects primarily higher cash paid for income taxes in the 2017 period as compared with the 2016 period of $110 million and $226 million, respectively, net of refunds received. The income tax refund received in 2016 reflected the extension of bonus depreciation in late 2015, resulting in a refund of the 2015 estimated federal tax payments.

The changechanges in net cash flows alsoprimarily reflects lower net deferred credits, noncurrent liabilities and other regulatory liabilities balances ($469 million), a decrease in accounts payable ($396 million), a decrease in the timingpension and retiree benefits obligations, net ($262 million), an increase in the revenue decoupling mechanism receivable ($152 million), and an increase in prepayments ($140 million), offset in part by a lower increase of payments for and recovery of energy costs. This timing is reflected within changes to accounts receivable –balances from customers recoverablenet of allowance for uncollectible accounts ($281 million) (see “COVID-19 Regulatory Matters” in Note B to the Third Quarter Financial Statements and refundable energy costs within other regulatory assets"Aged Accounts Receivable Balances,” above), a decrease in materials and liabilitiessupplies, including fuel oil and accounts payable balances.gas in storage ($107 million) and an increase in the system benefit charge ($52 million).

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


Cash Flows Used inFrom (Used in) Investing Activities
Net cash flows from investing activities for Con Edison were $3,698 million higher for the nine months ended September 30, 2023 compared with the 2022 period. Net cash flows used in investing activities for Con Edison and CECONY were $1,145$249 million lower and $254 million higher respectively, for the nine months ended September 30, 20172023 compared with the 20162022 period. The change for Con Edison primarily reflects primarily lower new investments in electricthe proceeds from substantially all of the assets of the Clean Energy Businesses, net of cash and gas transmission projectscash equivalents sold ($1,0113,927 million) and renewable electric production projects ($240 million), and a decrease in non-utility construction expenditures ($14869 million), offset in part by lower proceeds from salean increase in utility construction expenditures ($253 million) and higher cost of assetsremoval less salvage ($21642 million). The change for CECONY primarily reflects absence of proceeds from the transfer of assets to NY Transcoan increase in 2016 ($122 million) and increased utility construction expenditures ($88207 million) and higher cost of removal less salvage ($42 million). Pursuant to their rate plans, the Utilities recover the cost of utility construction expenditures from customers, including an approved rate of return (before and after being placed in service and or AFUDC before being placed in service). Increases in the amount of utility construction expenditures may temporarily increase the amount of short-term debt issued by the Utilities prior to the long-term financing of such amounts.


Cash Flows fromFrom (Used In) Financing Activities




84                             

Net cash flows used in financing activities for Con Edison were $2,340 million higher for the nine months ended September 30, 2023 compared with the 2022 period. Net cash flows from financing activities for Con Edison and CECONY were $945 million lower and $613$1,078 million higher respectively, infor the nine months ended September 30, 20172023 compared with the 20162022 period.


In March 2023, Con Edison entered into accelerated share repurchase agreements (ASR Contracts) with two dealers to repurchase $1,000 million in aggregate of Con Edison’s Common Shares ($.10 par value) (Common Shares). Pursuant to the ASR Contracts, Con Edison made payments of $1,000 million in aggregate to the dealers. Con Edison's share repurchase was completed in the second quarter of 2023. See Note C to the Third Quarter Financial Statements.

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

In June 2017,February 2023, CECONY issued $500 million aggregate principal amount of 3.8755.20 percent debentures, due 2047,2033. See Note C to the Third Quarter Financial Statements.

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

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). In January 2023, Con Edison borrowed an additional $200 million under the June 2022 Credit Agreement and in March 2023, repaid all amounts borrowed under the June 2022 Term Loan Credit Agreement.

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.


In March 2017,the nine months ended September 30, 2023 and 2022, Con Edison issued $400contributed $1,720 million aggregate principal amount of 2.00 percent debentures, due 2020, and prepaid the June 2016 $400 million variable rate term loan that was to mature in 2018.

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


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62





In June 2016, CECONY issued $550 million aggregate principal amount of 3.85 percent debentures, due 2046, the net proceeds from the sale of which were used to repay short-term borrowings and for other general corporate purposes. In September 2016, CECONY redeemed at maturity $400$150 million of 5.50 percent 10-year debentures.equity, respectively, to CECONY.

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

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

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

In February 2016, a Con Edison Development subsidiary issued $218 million aggregate principal amount of 4.21 percent senior notes, due 2041, secured by the company's Texas Solar 7 solar project.


Con Edison’s cash flows from financing activities for the nine months ended September 30, 2017 and 20162023 also reflect the proceeds, and reduction in cash used for reinvested dividends, resulting from thea retirement of short-term debt of $1,160 million compared with a net issuance of common shares under$1,003 million in the company’s dividend reinvestment, stock purchase and long-term incentive plans2022 period.

CECONY’s cash flows from financing activities for the nine months ended September 30, 2023 also reflect a retirement of $74short-term debt of $502 million and $77compared with a net issuance of $428 million respectively.in the 2022 period.


Cash flows used infrom financing activities of the Companies also reflect commercial paper issuances and repayments. The commercial paper amounts outstanding at September 30, 20172023 and 20162022 and the average daily balances for the nine months ended September 30, 20172023 and 20162022 for Con Edison and CECONY were as follows:

  
20232022
(Millions of Dollars, except Weighted Average Yield)Outstanding at September 30,Daily
average		Outstanding at September 30,Daily
average
Con Edison$1,880$1,351$1,941$1,368
CECONY$1,798$1,313$1,789$1,191
Weighted average yield5.5 %5.2 %3.4 %1.5 %

  
20172016
(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 yield1.31.10.70.6

Capital Requirements and Resources
During 2023, Con Edison has decreasedchanged its estimatesestimate for capital requirements for 2024 and 2025 to $5,109 million and $4,962 million, respectively. The changes include decreases in CECONY’s capital requirements of $11 million and $25 million in 2024 and 2025, respectively, to reflect capital expenditures included in the retirementSeptember 2023 steam joint proposal that is subject to approval by the NYSPSC and increases to Con Edison’s capital requirements of long-term securities for 2018 from $1,688$24 million in each of 2024 and 2025 to $1,288 million. The decrease reflectsreflect additional investments by Con Edison Transmission associated with the $400 million prepayment of a variable rate term loan that was to maturePropel NY Energy transmission project. See “Rate Plans – CECONY – Steam” in 2018. See Note CB to the Third Quarter Financial Statements.Statements and “Con Edison Transmission,” above.


For eachIn October 2023, Con Edison increased the amount of long-term debt it plans to issue at the Utilities from up to $1,400 million to up to $2,100 million, of which $500 million was issued in the first nine months of 2023. The increase is primarily due to higher than anticipated accounts receivable balances and the timing of the Companies,approval of the ratio of earningsCECONY electric and gas rate plans. See “Aged Accounts Receivable Balances” and “Liquidity and Capital Resources,” above and "Regulatory Matters – Rate Plans – CECONY Electric and Gas” in Note B to fixed charges (Securitiesthe Third Quarter Financial Statements.
85                             


Contractual Obligations
Con Edison’s material obligations to make payments pursuant to contracts totaled $52,606 million and Exchange Commission (SEC) basis) for the nine months ended$57,931 million at September 30, 20172023 and 2016 and the twelve months ended December 31, 2016 was:2022, respectively. The decrease at September 30, 2023 is due primarily to Con Edison completing the sale of substantially all of the assets of the Clean Energy Businesses on March 1, 2023. See Note S and Note T to the Third Quarter Financial Statements.

  
Ratio of Earnings to Fixed Charges
  
For the Nine Months Ended September 30, 2017For the Nine Months Ended September 30, 2016For the Twelve Months Ended December 31, 2016
Con Edison3.84.03.6
CECONY3.93.83.6



63

Capital Resources
For each of the Companies, the common equity ratio at September 30, 20172023 and December 31, 20162022 was:

  
Common Equity Ratio
(Percent of total capitalization)
  
September 30, 2023December 31, 2022
Con Edison50.550.9
CECONY49.446.9


  
Common Equity Ratio
(Percent of total capitalization)
  
September 30, 2017December 31, 2016
Con Edison50.849.3
CECONY50.949.5

Other Changes in Assets, Liabilities and LiabilitiesEquity
The following table shows changes in certainCompanies' assets, liabilities, and liabilitiesequity at September 30, 2017, compared with2023 and December 31, 2016.2022 are summarized as follows. 

  CECONYO&RClean Energy
 Businesses (c)		Con Edison
Transmission		Other (a)Con Edison (b)
(Millions of Dollars)202320222023202220232022202320222023202220232022
ASSETS
Current assets
$5,166$5,247$355$332$—$879$19$4$399$6,510$5,939$12,972
Investments5715391920— — 3342869(4)933841
Net plant45,65844,0112,8602,738—4,7181717— (4,718)48,53546,766
Other noncurrent assets8,1927,648388421—1,62777411(1,217)8,9988,486
Total Assets$59,587$57,445$3,622$3,511$—$7,224$377$314$819$571$64,405$69,065
LIABILITIES AND SHAREHOLDERS' EQUITY
Current liabilities$4,940$6,036$362$409$—$1,596$3$163$745$3,132$6,050$11,336
Noncurrent liabilities15,95115,4511,1351,103—338(85)(86)(374)(113)16,62716,693
Long-term debt19,58319,0801,0681,068—2,292——(1)(2,293)20,65020,147
Equity19,11316,8781,057931—2,998459237449(155)21,07820,889
Total Liabilities and Equity$59,587$57,445$3,622$3,511$—$7,224$377$314$819$571$64,405$69,065
(a) Other includes the parent company, Con Edison’s tax equity investments, the deferred project held for sale and consolidation adjustments. See Note T to the Third Quarter Financial Statements.
 Con EdisonCECONY
(Millions of Dollars)
2017 vs. 2016
Variation
2017 vs. 2016
Variation
Assets  
Prepayments$433$398
Non-utility property, less accumulated depreciation204—
Regulatory asset - Unrecognized pension and other postretirement costs(248)(254)
Liabilities  
Pension and retiree benefits$(404)$(394)
Deferred income taxes and unamortized investment tax credits539610
System benefit charge194175
(b) Represents the consolidated results of operations of Con Edison and its businesses.
(c) On March 1, 2023, Con Edison completed the sale of substantially all of the assets of the Clean Energy Businesses. See Note S and Note T to the Third Quarter Financial Statements.
Prepayments
CECONY
Current assets at September 30, 2023 were $81 million lower than at December 31, 2022. The change in current assets primarily reflects a decrease in cash and temporary cash investments ($1,036 million) and in accounts receivables, net of allowance for uncollectible accounts ($140 million) (see “COVID-19 Regulatory Matters” in Note B to the Third Quarter Financial Statements, "Aged Accounts Receivable Balances,” above), offset in part by an increase in prepayments for Con Edison($699 million) and CECONYaccounts receivable from affiliated companies ($400 million).

Net plant at September 30, 2023 was $1,647 million higher than at December 31, 2022. The change in net plant primarily reflects primarily the portion allocable to the 2017 fourth quarter of CECONY's July 2017 payment of its New York City semi-annual property taxes.

Non-Utility Property, Less Accumulated Depreciation
Thean increase in non-utility property, lesselectric ($1,393 million), gas ($570 million), steam ($95 million) and general ($173 million) plant balances and an increase in construction work in progress ($233 million), offset in part by an increase in accumulated depreciation for Con Edison($817 million).

Other noncurrent assets at September 30, 2023 were $544 million higher than at December 31, 2022. The change in other noncurrent assets primarily reflects the completion of construction of Con Edison Development's Upton County Solar renewable electric production project (see Con Edison Development, below).

Regulatory Asset for Unrecognized Pension and Other Postretirement Costs and Liability for Pension and Retiree Benefits
The decreasean increase in the regulatory asset for unrecognized pension and other postretirement costs and the liability forCOVID - 19 arrears relief




86                             

deferrals programs ($314 million), an increase in pension and retiree benefits reflects the final actuarial valuation of the pension($115 million) and other retiree benefit plans as measured at December 31, 2016,an increase in accordance with the accounting rules for retirement benefits.system peak reduction and energy efficiency programs ($80 million). The change in the regulatory asset also reflects the year’s amortization of accounting costs. The change in the liability for pension and retiree benefits reflectsincrease is offset in part contributions to the plans made by the Utilitiesa decrease in 2017.operating lease right-of-use asset ($24 million). See Notes EB and FI to the Third Quarter Financial Statements.


Deferred Income TaxesCurrent liabilities at September 30, 2023 were $1,096 million lower than at December 31, 2022. The change in current liabilities primarily reflects a decrease in accounts payable ($569 million) and Unamortized Investment Tax Creditsa decrease in notes payable ($502 million).

Other noncurrent liabilities at September 30, 2023 were $500 million higher than at December 31, 2022. The change in other noncurrent assets primarily reflects an increase in the liability for deferred income taxes and unamortized investment tax credits for Con Edison($916 million) and CECONY reflects primarily bonus depreciation in 2017, partially offset by the increase in deferred income tax assets associated with the federal tax attribute carryforwards related to the net operating loss and general business tax credits. See Note I to the Third Quarter Financial Statements.

System Benefit Charge
Thean increase in the liability forasset retirement obligations ($13 million). The increase is offset in part by a decrease in the system benefit charge reflects amounts collected byunrecognized pension and other postretirement costs ($339 million), a decrease in future income tax ($166 million) and a decrease in the Utilities from their customers that will be required to be paid to NYSERDA.

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



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Regulatory Matters
In March 2017, the NYSPSC issued an order that changes the way distributed energy resources are compensated and begins to phase out net energy metering. In New York, net energy metering compensates kilowatt-hours exported to the electric distribution system at the full service rate (that is production plus delivery plus taxes and fees)deferred derivative gains - long term ($113 million). To provide a gradual transition, the NYSPSC allowed all existing resources to keep their current rate treatment and will delay making significant changes to policies affecting new residential and small commercial rooftop solar until 2020. Larger installations, including new commercial and industrial projects and new community solar projects, will be paid for the value of their exports to the electricity distribution system. The new policy establishes a 2 percent limit on bill increases, reducing the shifting of avoided distribution costs to non-participating residential customers that would have occurred under net energy metering.

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

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


Long-term debt at September 30, 2023 was $503 million higher than at December 31, 2022. The change in long-term debt primarily reflects CECONY's issuance of $500 million aggregate principal amount of 5.20 percent debentures, due 2033, offset in part by, the amortization of unamortized debt expense over the nine-month period. See Note C to the Third Quarter Financial Statements.

Equity at September 30, 2023 was $2,235 million higher than at December 31, 2022. The change in equity primarily reflects capital contributions from Con Edison ($1,720 million) in 2023, net income for the nine months ended September 30, 2023 ($1,308 million), offset in part by common stock dividends to Con Edison ($792 million) in 2023.


O&R
Current assets at September 30, 2023 were $23 million higher than at December 31, 2022. The change in current assets primarily reflects an increase in prepayments ($20 million) and the revenue decoupling mechanism receivable ($2 million).

Net plant at September 30, 2023 was $122 million higher than at December 31, 2022. The change in net plant primarily reflects an increase in electric ($70 million) and gas ($35 million) plant balances, an increase in construction work in progress ($32 million) and a decrease in accumulated depreciation ($23 million), offset in part by a decrease in general ($38 million) plant balances.

Other noncurrent assets at September 30, 2023 were $33 million lower than at December 31, 2022. The change in
other noncurrent assets primarily reflects a decrease in regulatory assets ($27 million) and a decrease in the fair value of derivative assets ($6 million).

Current liabilities at September 30, 2023 were $47 million lower than at December 31, 2022. The change in current liabilities primarily reflects a decrease in the regulatory liabilities ($30 million), a decrease in accounts payable ($25 million) and a decrease in accounts payable to affiliated companies ($18 million), offset in part by an increase in notes payable ($23 million) and accrued interest ($3 million).

Noncurrent liabilities at September 30, 2023 were $32 million higher than at December 31, 2022. The change in noncurrent liabilities primarily reflects an increase in deferred income taxes and investment tax credits ($40 million), offset in part by a decrease in the regulatory liabilities for unrecognized pension and other postretirement costs ($7 million).

Equity at September 30, 2023 was $126 million higher than at December 31, 2022. The change in equity primarily reflects capital contributions from Con Edison ($100 million) in 2023, net income for the nine months ended September 30, 2023 ($75 million), offset in part by common stock dividends to Con Edison ($48 million) in 2023.

CleanEnergyBusinesses
On March 1, 2023, Con Edison completed the sale of substantially all of the assets of the Clean Energy Businesses. See Note S and Note T to the Third Quarter Financial Statements.

Con Edison Transmission
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Currents assets at September 30, 2023 were $15 million higher than at December 31, 2022. The increase in current assets primarily reflects an increase in cash and temporary investments ($18 million).

Investments at September 30, 2023 were $48 million higher than at December 31, 2022. The increase in investments reflects additional investment in New York Transco ($48 million).

Current liabilities at September 30, 2023 were $160 million lower than at December 31, 2022. The change in current liabilities primarily reflects repayment of an intercompany loan ($154 million).

Equity at September 30, 2023 was $222 million higher than at December 31, 2022. The change in equity primarily reflects an equity contribution from Con Edison, the proceeds of which were primarily used to repay an intercompany loan and invest in New York Transco.

UtilityRegulation
CyberRegulation
In March 2023, the New York State legislature amended the New York State Public Service Law, directing the NYSPSC to develop rules to direct electric and gas utilities, among other things, to: (i) take necessary measures to monitor and protect customer privacy, including, but not limited to, customer electric and gas consumption data, from unauthorized disclosure or unconsented sharing, (ii) develop and implement tools to monitor operational control networks to detect unauthorized network behavior, including the utilities' industrial control systems that support distribution, transmission and advanced metering infrastructure control centers and (iii) mandate that utilities’ emergency response plans include cyber-attack response plans. The law also states that customer electric and gas consumption data should be considered confidential.

Environmental Matters
Clean Energy Future
Clean Energy Goals
In May 2017,2023, New York State approved the 2023 - 2024 state budget, including provisions that prohibit the installation of fossil-fuel equipment and building systems beginning in 2026 for affected new buildings with not more than seven stories and beginning in 2029 for all other new affected buildings. The law includes exemptions for, among other things, emergency backup generators, hospitals, laundromats and commercial kitchens.

Also in May 2023, CECONY and O&R filed proposals for thermal energy network pilots pursuant to a transformer failureSeptember 2022 NYSPSC proceeding to implement the Utility Thermal Energy Network and Jobs Act. CECONY proposed three pilots totaling approximately $262.7 million and O&R proposed two pilots totaling approximately $45.5 million. The Utilities proposed recovery of pilot costs via a surcharge mechanism. In September 2023, the NYSPSC issued an order providing guidance on the development of utility thermal energy network pilot projects. The order provides structure in the development of thermal network pilot projects previously proposed by the state’s utilities and directs utilities to file monthly progress and expenditure reports starting November 15, 2023, and thermal network pilot project proposals by December 15, 2023. The proposed pilots are subject to approval by the NYSPSC.

In June 2023, the NYSPSC issued an order identifying the Climate Leadership and Community Protection Act (CLCPA) as a public policy requirement driving the need for additional transmission facilities to deliver at least 4,770 MW of electricity from offshore wind projects into CECONY’s electric grid. The order refers the need to the NYISO to conduct a solicitation and evaluation of transmission solutions for this need. As directed by the order, after consultation with NYSDPS, CECONY substation discharged thousands of gallons of transformer oil intoestablished a process to make information available to transmission proposers concerning existing or potential interconnection points that CECONY would construct and own. The required in-service date for projects responsive to the soil. Sometransmission need is January 1, 2033.

In June 2023, the NYISO selected the Propel NY Energy transmission project that was jointly proposed by New York Transco and the New York Power Authority (NYPA). Con Edison Transmission has a 41.7 percent interest in New York Transco’s share of the transformer oil, which contained small amountsPropel NY Energy project, a 90-mile electric transmission project with an in-service date of polychlorinated biphenyls (PCBs), leaked2030. The project is expected to enable delivery of a minimum of 3,000 MW of offshore wind electricity, increase high voltage transmission connections between Long Island and the rest of New York State and provide New Yorkers with greater access to diverse energy resources. See "Con Edison Transmission," below.

Also in June 2023, CECONY filed a petition with FERC to add a formula rate to the NYISO tariff to enable CECONY to recover the costs of, and a return on investment for, two types of projects: (1) local transmission upgrades determined by the NYSPSC to be necessary or appropriate to meet the CLCPA goals of New York State and (2) any regulated transmission projects (or portions thereof) eligible for recovery under the NYISO’s public policy




88                             

transmission planning process. For local transmission upgrades, CECONY proposed the return on equity to be the lower of the NYSPSC-determined rates or 10.87 percent. For NYISO projects, CECONY proposed a return on equity of 11.10 percent. CECONY anticipates that the formula rate, once in place, will be applied to recover the costs of the upgrades associated with the Propel NY Energy offshore wind project.

In July 2023, the NYSPSC issued an order implementing the next phase in the state’s energy efficiency portfolio process to assist with meeting CLCPA goals. On November 1, 2023, CECONY and O&R filed preliminary energy efficiency and electrification program proposals for the years 2026 - 2030.

In September 2023, CECONY updated its 2019 climate change vulnerability study and O&R published its initial climate change vulnerability study. The studies evaluated present-day infrastructure, design specifications, procedures under a range of potential climate futures and a suite of adaptation investments for consideration. The Utilities’ studies identified rising temperature, flooding, wind and ice and extreme and compound weather events, including, but not limited to, hurricanes, heat waves, Nor’easters, cold snaps and deluge rain to be the risks to their systems resulting from the impact of climate change as manifested in increased system load, asset degradation, equipment damage, accessibility and worker safety. The Utilities' studies were developed pursuant to a New York State Public Service law that requires all New York electric utilities to conduct a climate change vulnerability study by September 2023 and develop and file for approval by the NYSPSC a climate resilience investment plan by November 2023 that proposes storm hardening and resilience measures for the next ten years and twenty years. The law authorizes utilities to recover costs through a climate resilience cost recovery surcharge for costs incurred outside of rate proceedings and roll any unrecovered costs into base rates when base rates are next reset. The New York utilities are required to file an updated climate resilience investment plan with the East River.NYSPSC for approval at least every five years.

Also in September 2023, CECONY and O&R filed an update to their May 2023 combined gas system long-term plan for their gas distribution systems. The company,Utilities’ plan has a 20-year horizon to achieve the U.S. Coast Guard,greenhouse gas emissions reduction targets of the CLCPA and includes three pathways: (1) a reference pathway based on investments approved by the NYSPSC, (2) an alternate hybrid electric generation and low-carbon fuels pathway and (3) an alternate deep electrification pathway. The September 2023 update concludes that gas sales and emissions in their service territories are projected to decline under all three pathways. However, the reference pathway’s substantial reliance on conventional fossil natural gas will prevent achievement of sufficient GHG emissions reductions to meet the CLCPA targets. Ambitious decarbonization strategies that include energy efficiency, electrification and procurement of low‐carbon gaseous fuels will enable more meaningful emissions reductions. The Utilities expect to file the final plan by the end of 2023 that will be subject to NYSPSC approval.

In October 2023, NYSERDA announced that it selected three new offshore wind projects for contract negotiations, representing 4,032 MW of energy by 2030. One of the conditional awards, the Community Offshore Wind project, is expected to connect 1,314 MW of offshore wind electricity through CECONY’s Brooklyn Clean Energy Hub by 2030 (see “Electric Reliability Needs,” below) and another conditional award, the Excelsior Wind project, is expected to connect 1,314 MW of offshore wind electricity using the capability of the Propel NY Energy project discussed above.

Other Environmental Matters
Following media reports, in July 2023, the Environmental Protection Agency, New York State Department of Environmental Conservation, New York State Department of Health and NYSDPS began investigating the potential public health risks associated with lead-jacketed cables in the fixed-line telecommunications industry. The use of lead-jacketed electric cables began in the 1880s to protect conducting wires from exposure to the elements. All of the Utilities’ transmission cables that are in service and lead-jacketed are covered with an outer plastic layer and comprise less than 2 percent of CECONY’s transmission system and less than 5 percent of O&R’s transmission system. CECONY installed lead-jacketed cables without an outer plastic layer in its distribution system until the 1980’s. CECONY’s distribution cables that are in service and lead-jacketed may or may not have an outer plastic layer and may be located within a conduit and manhole system, directly buried or strung in the air between poles and comprise less than 14 percent of its distribution system. O&R’s distribution cables are not lead-jacketed. CECONY’s transmission and distribution systems also contain lead-jacketed cables that were retired in place. CECONY continues to replace lead-jacketed distribution cables, as needed, and recover the costs for cable replacements, pursuant to its electric rate plan. The Companies are unable to predict the impact on them, if any, resulting from potential developments to legal or public policy doctrines regarding cable that contains lead.

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In July 2021, a CECONY feeder failure led to the discharge of thousands of gallons of dielectric fluid from a street manhole in New Rochelle, New York. Dielectric fluid reached nearby streets, properties and the New Rochelle Harbor. CECONY, the U.S. Coast Guard, the NYSDEC and other agencies responded to the incident. CECONY stopped the feeder leak on the same day the discharge occurred and has completed the spill recovery and associated cleanup operations. As a result of the discharge, CECONY received third-party damage claims. The company has replaced the transformer, and is continuing to remediate and monitor the site, the costs of whichassociated with this matter are not expected to have a material adverse effect on itsCECONY’s financial condition, results of operations orand liquidity. In connection with the incident, the companyCECONY 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, CECONY received a notice of potential liability from the U.S. Environmental Protection Agency (EPA) with respect to the Newtown Creek site that was listed in 2010 on the EPA’s National Priorities List of Superfund sites. The EPA has identified fourteen potentially responsible parties (PRPs) with respect to the site, including CECONY, and has indicated that it will notify the company as additional PRPs are identified and notified by the EPA. Newtown Creek and its tributaries (collectively, Newtown Creek) form a 3.8 mile border between Brooklyn and Queens, New York. Currently, the predominant land use around Newtown Creek includes industrial, petroleum, recycling, manufacturing and distribution facilities and warehouses. Other uses include trucking, concrete manufacture, transportation infrastructure and a wastewater treatment plant. Newtown Creek is near several residential neighborhoods. Six PRPs, not including CECONY, pursuant to an administrative settlement agreement and order on consent the EPA issued to them in 2011, have been performing a remedial investigation of the site. The EPA indicated that sampling events have shown the sediments in Newtown Creek to be contaminated with a wide variety of hazardous substances including PCBs, metals, pesticides, polycyclic aromatic hydrocarbons and volatile organic contaminants. The EPA also indicated that it has reason to believe that hazardous substances have come to be released from CECONY facilities into Newtown Creek. The EPA’s current schedule anticipates completion of a feasibility study for the site by late 2018 and issuance of its record of decision selecting a remedy for the site by late 2020. CECONY is unable to estimate its exposure to liability for the Newtown Creek site.

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


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


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


Electric Reliability Needs
In 2019, the New York State Department of Environmental Conservation (NYSDEC) issued regulations (Peaker Rule) that may require the retirement or seasonal unavailability of fossil-fueled electric generating units owned by CECONY and others in New York City. The Peaker Rule limits nitrous oxides emissions during the ozone season from May through September and affects older peaking units that are generally located downstate and needed during periods of high electric demand or for local reliability purposes. Compliance with the Peaker Rule requires affected units (approximately 1,400 MW in CECONY's service territory, of which 79 MW is owned by CECONY) to cease operation during the ozone season, install emission controls, repower, or retire by 2023 or 2025. The NYISO, in its 2020 Reliability Needs Assessment study that was approved by the NYISO board, reported local and bulk transmission system reliability needs that are expected to be caused by the retirement or unavailability of some of the impacted units.

In January 2021, CECONY updated its Local Transmission Plan to address identified reliability needs on its local system resulting from the Peaker Rule through the construction of three transmission projects, the Reliable Clean City (RCC) projects. In April 2021, the NYSPSC approved CECONY’s December 2020 petition to recover $780 million of costs to construct the RCC projects. In May 2023, the first of the three RCC projects was completed and the remaining two are expected to be completed in 2025.

In April 2023, the NYSPSC approved CECONY’s December 2022 petition seeking cost recovery approval for a proposed clean energy hub in Brooklyn, New York (Brooklyn Clean Energy Hub) at an estimated cost of $810 million and an estimated in-service date of December 2027, that is in addition to the capital expenditures approved in CECONY's 2023 electric rate plan. See "Rate Plans - CECONY - Electric and Gas" in Note B to the Third Quarter Financial Statements. The Brooklyn Clean Energy Hub primarily addresses an identified reliability need in 2028 due to a forecasted increase in electric demand. The Brooklyn Clean Energy Hub is also identified as an interconnection hub that can support injection of offshore wind or other resources.

In July 2023, the NYISO issued its Short-Term Assessment of Reliability report that finds an electric reliability need beginning in the summer of 2025 in CECONY’s New York City territory primarily driven by forecasted increases in peak demand and the assumed unavailability of certain generation affected by the Peaker Rule and a solicitation for market-based solutions from developers. In October 2023, CECONY, as the Responsible Transmission Owner, submitted its response to the NYISO. The NYISO will evaluate all proposals by November 2023 and determine if any combination of proposed solutions will meet the reliability need. NYISO stated that it would only temporarily retain peakers as a last step approach if it does not expect that other solutions will be in place by the time the identified reliability need is expected in 2025.

Separately, CECONY’s 2023 electric rate plan includes approvals and cost recovery for capital projects to meet reliability needs in New York City. CECONY’s project to transfer electric customers from its Brownsville substation to its Glendale substation is expected to be completed in 2026 at an estimated cost of $115 million. CECONY’s projects to build a transmission feeder between Vernon and Newtown and the Gateway Park area substation are expected to be completed in 2026 and 2028, respectively, at estimated costs of $125.4 million and $1,100 million, respectively.

In August 2023, CECONY filed a petition with the NYSPSC requesting authorization and cost recovery to construct two new substations in Jamaica, Queens (the Reliable Clean City - Idlewild Project) by May 2028 to meet anticipated reliability needs and to support New York State’s electrification and CLCPA goals. CECONY estimates




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that construction will cost $1,200 million. CECONY proposed cost recovery through a surcharge or base rates, depending on the in-service date and the timing of future rate filings. CECONY's petition is subject to approval by the NYSPSC.


Con Edison DevelopmentTransmission
The following table provides information aboutIn June 2023, the renewableNYISO selected the Propel NY Energy transmission project that was jointly proposed by New York Transco and the New York Power Authority (NYPA). Propel NY Energy is a 90-mile electric productiontransmission project with an in-service date of 2030 that is expected to enable delivery of a minimum of 3,000 MW of offshore wind electricity, increase high voltage transmission connections between Long Island and the rest of New York State and provide New Yorkers with greater access to diverse energy resources. New York Transco’s share of the project cost is expected to be approximately $2,200 million, excluding its interconnection costs and the cost of projects expected to be built by local transmission owners, including CECONY. Con Edison Development owned at September 30, 2017:Transmission has a 41.7 percent interest in New York Transco’s share of the Propel NY Energy project. The siting, construction and operation of the project will require approvals and permits from appropriate governmental agencies and authorities, including the NYSPSC. In October 2023, NYSERDA announced that it selected three new offshore wind projects for contract negotiations, one of which is expected to connect 1,314 MW of offshore wind electricity using the capability of the Propel NY Energy project. See "Environmental Matters - Clean Energy Future - Clean Energy Goals," above.

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




PilesgroveSolar18(d)2011New Jersey
Flemington SolarSolar8(d)2011New Jersey
Frenchtown I, II and IIISolar14(d)2011-13New Jersey
PA SolarSolar10 2012Pennsylvania
California Solar 2 (e)Solar80202014-16California
Oak Tree WindWind20202014South Dakota
Texas Solar 3Solar6252015Texas
Texas Solar 5 (e)Solar95252015Texas
Campbell County WindWind95302015South Dakota
Texas Solar 7 (e)Solar106252016Texas
California Solar 3 (e)Solar110202016California
Adams Wind (e)Wind2372016Minnesota
Valley View (e)Wind10142016Minnesota
Coram (e)Wind102162016California
Upton County Solar (e)Solar158252017Texas
Projects of less than 5 MWSolar / Wind25VariousVariousVarious
Jointly owned projects (e) (f)




California SolarSolar55252012-13California
Mesquite Solar 1Solar83202013Arizona
Copper Mountain Solar 2Solar75252013-15Nevada
Copper Mountain Solar 3Solar128202014-15Nevada
Broken Bow IIWind38252014Nebraska
Texas Solar 4Solar32252014Texas
Total MW (AC) in Operation
1,291


Panoche ValleySolar240202018California
Total MW (AC) in Construction
240


Total MW (AC), All Projects
1,531


(a) RepresentsIn April 2019, the NYISO selected New York Transco’s New York Energy Solution (NYES) project, of which Con Edison Development’s ownershipTransmission owns a 45.7 percent interest, to relieve transmission congestion between upstate and downstate ($600 million estimated cost, excluding certain interconnection costs). Construction has been completed for the NYES project and the associated Rock Tavern to Sugarloaf segment, and a majority of the assets were placed in service during the second quarter of 2023. Construction of the associated Dover Station, an additional network upgrade to support the NYES project, has not been completed and its permits are the subject of litigation in New York State. In November 2017, FERC approved a settlement agreement with respect to the NYES project that provides for a 10.65 percent return on common equity (which is comprised of a 9.65 percent base ROE, with 100 basis points added for congestion reduction and a cost containment mechanism applicable to certain capital costs) and a maximum actual common equity ratio of 53 percent. The interconnection costs of the awarded project segment include network upgrades identified by the NYISO and NYSPSC that earn the same base ROE, with a 50-basis point adder. Revenues for the NYES project, including the Dover Station, are collected by the NYISO including 100 percent of construction work-in-progress, and are allocated across NYISO transmission customers in New York State with 84 percent allocated to load serving entities in the project.CECONY and O&R service areas.
(b) Represents PPA contractual term or remaining term from
The Mountain Valley Pipeline is being constructed by a joint venture in which Con Edison Development’s date of acquisition.
(c) Represents Actual/Expected In-Service Date orTransmission owns an 8.8 percent interest that is expected to be reduced to as low as 7.3 percent based on the latest project cost estimate and Con Edison Development'sTransmission’s previous capping of its cash contributions to the joint venture. In mid-August 2023, construction of the Mountain Valley Pipeline resumed after resolution of certain legal challenges. In October 2023, the operator of the Mountain Valley Pipeline indicated that it is now targeting an in-service date of acquisition.
(d) Have Solar Renewable Energy Credit hedges in place, in lieu of PPAs, out to 2020.
(e) Project has been pledged to secure financing for the project.
(f) Allproject in the first quarter of 2024 at an overall project cost of approximately $7,200 million excluding allowance for funds used during construction. At September 30, 2023, Con Edison Transmission’s carrying value of its investment in the jointly-owned projects are 50 percent owned, except for Texas Solar 4 (which is 80 percent owned). See Note MMountain Valley Pipeline was $111 million and its cash contributions to the Thirdjoint venture amounted to $530 million. See "Investments - Investment in Mountain Valley Pipeline, LLC (MVP)" in Note A.
Quarter Financial Statements.

Con Edison Development's renewable electric production volumes generated for the three and nine months ended September 30, 2017 compared with the 2016 period were:


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  Millions of kWh Generated
  For the Three Months EndedFor the Nine Months Ended
DescriptionSeptember 30, 2017
September 30, 2016
Variation
Percent Variation
September 30, 2017September 30, 2016VariationPercent Variation
Renewable electric production projects        
Solar668
458
210
45.9%1,6791,21546438.2%
Wind217
137
80
58.4%73446427058.2%
Total885
595
290
48.7%2,4131,67973443.7%

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 andrelates 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 businessessubsidiaries manage interest rate risk through the issuance of mostly fixed-rate debt with varying maturities and through opportunistic refinancing of debt. Con Edison and CECONY estimate that at September 30, 2017,2023, a 10 percent increase in interest rates applicable to its variable rate debt would result in an increase in annual interest expense of $2$12 million. Under CECONY’s current electric, gas and steam rate plans, variations in actual variable rate tax-exempt debt interest expense, including costs associated with the refinancing of the variable rate tax-exempt debt, are reconciled to levels reflected in rates.

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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, variable-rate debt and 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 apply, and the Clean Energy Businesses applyapplied 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, 2017,2023, a 10 percent decline in market prices would result in a decline in fair value of $66$177 million for the derivative instruments used by the Utilities to hedge purchases of electricity and gas, of which $60$165 million is for CECONY and $6$12 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 theirthose customers, including gains and losses on certain derivative instruments used to hedge energy purchased and related costs.

The Clean Energy Businesses use a value-at-risk (VaR) model to assess the market price risk of their portfolio of electricity However, increases in electric and gas commodity fixed-price purchaseprices may contribute to a slower recovery of cash from outstanding customer accounts receivable balances 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 and the year ended December 31, 2016, respectively, was as follows:

95% Confidence Level, One-Day Holding PeriodSeptember 30, 2017
December 31, 2016
 (Millions of Dollars)
Average for the period
$—
$2
High14
Low—
1



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Credit Risk
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. See the discussion of credit exposure in Note Kincreases to the Third Quarter Financial Statements.allowance for uncollectible accounts, and may result in increases to write-offs of customer accounts receivable balances.


Investment Risk
The Companies’ investment risk relates to the investment of plan assets for their pension and other postretirement benefit plans andplans. 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 5328 to 6338 percent equitiesequity securities, 42 to 60 percent debt securities and 3512 to 4922 percent fixed income and other securities.alternatives. At September 30, 2017,2023, the pension plan investments consisted of 5832 percent equity securities, 49 percent debt securities and 4219 percent fixed income and other securities.alternatives.


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


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




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Item 3: Quantitative and Qualitative Disclosures About Market Risk
For information about the Companies’ primary market risks associated with activities in derivative financial instruments, other financial instruments and derivative commodity instruments, see “Financial and Commodity Market Risks,” in Part I, Item 2 of this report, which informationthat 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,




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including its principal executive and principal financial officers, or persons performing similar functions, as appropriate to allow timely decisions regarding required disclosure. For each of the Companies, its management, with the participation of its principal executive officer and principal financial officer, has evaluated its disclosure controls and procedures as of the end of the period covered by this report and, based on such evaluation, has concluded that the controls and procedures are effective to provide such reasonable assurance. Reasonable assurance is not absolute assurance, however, and there can be no assurance that any design of controls or procedures would be effective under all potential future conditions, regardless of how remote.
There was no change in the Companies’ internal control over financial reporting that occurred during the Companies’ most recent fiscal quarter that has materially affected, or is reasonably likely to materially affect, the Companies’ internal control over financial reporting.



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Part II Other Information


 
Item 1: Legal Proceedings
For information about certain legal proceedings affecting the Companies, see "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 - Other Environmental Matters" in Part I, Item 2 of this report, which informationthat 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 5: Other Information
During the three months ended September 30, 2023, no director or officer (as defined in Rule 16a-1(f) of the Securities Exchange Act of 1934, as amended) adopted, terminated or modified any Rule 10b5-1 or non-Rule 10b5-1 trading arrangement (as defined in Item 408(a) of Regulation S-K).

Item 6: Exhibits
Con Edison
Exhibit 10.1.1
Amendment to the Consolidated Edison Retirement Plan.
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
Exhibit 31.1.2
Exhibit 32.1.1
Exhibit 32.1.2
Exhibit 101.INSXBRL 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.SCHXBRL Taxonomy Extension Schema.
Exhibit 101.CALXBRL Taxonomy Extension Calculation Linkbase.
Exhibit 101.DEFXBRL Taxonomy Extension Definition Linkbase.
Exhibit 101.LABXBRL Taxonomy Extension Label Linkbase.
Exhibit 101.PREXBRL Taxonomy Extension Presentation Linkbase.
Exhibit 104Cover Page Interactive Data File - the cover page XBRL tags are embedded within the Inline XBRL document.
 


CECONY
Exhibit 10.2.1
3.2		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
Exhibit 31.2.2
Exhibit 32.2.1
Exhibit 32.2.2
Exhibit 101.INSXBRL 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.SCHXBRL Taxonomy Extension Schema.
Exhibit 101.CALXBRL Taxonomy Extension Calculation Linkbase.
Exhibit 101.DEFXBRL Taxonomy Extension Definition Linkbase.
Exhibit 101.LABXBRL Taxonomy Extension Label Linkbase.
Exhibit 101.PREXBRL Taxonomy Extension Presentation Linkbase.
Exhibit 104Cover Page Interactive Data File - the cover page XBRL tags are embedded within the Inline XBRL document.
Pursuant to Item 601(b)(4)(iii)(A) of Regulation S-K, instruments defining the rights of holders of long-term debt of Con Edison’s subsidiaries other than CECONY, the total amount of which does not exceed ten percent of the total assets of Con Edison and its subsidiaries on a consolidated basis, are not filed as exhibits to Con Edison’s Form 10-K or Form 10-Q. Con Edison agrees to furnish to the SEC upon request a copy of any such instrument.
 




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Signatures
Pursuant to the requirements of the Securities Exchange Act of 1934, each Registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.
 
Consolidated Edison, Inc.
Consolidated Edison Company of New York, Inc.
Date: November 2, 20172023By /s/ Robert Hoglund
Robert Hoglund

Senior Vice President, Chief

Financial Officer and Duly

Authorized Officer
 




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