2020
Annual Report
FINANCIAL HIGHLIGHTS
2020
2019
OUR CRITICAL INFRASTRUCTURE INVESTMENTS
(in millions, except per-share information and statistical data)
Consolidated Edison, Inc. Capital Program Forecast 2021–2023 ($ in millions)
OPERATING REVENUES
$12,246
$12,574
NET INCOME FOR COMMON STOCK
$1,101
$1,343
CON EDISON OF NEW YORK
2021 $3,510 (Total)
2022 $3,211 (Total)
2023 $3,457 (Total)
BASIC EARNINGS PER COMMON SHARE
$3.95
$4.09
DIVIDENDS PER SHARE
$3.06
$2.96
DIVIDEND PAYOUT RATIO
93%
72%
I
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4
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S
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AVERAGE COMMON SHARES OUTSTANDING
334.8
328.5
ORANGE AND ROCKLAND UTILITIES
2021 $211 (Total)
2022 $267 (Total)
2023 $267 (Total)
TOTAL ASSETS
$62,895
$58,079
CAPITAL EXPENDITURES
$4,085
$3,676
S
A
G
1
6
$
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COMMON EQUITY RATIO
48.3%
49.6%
CLEAN ENERGY BUSINESSES
2021 $250 (Total)
2022 $400 (Total)
2023 $400 (Total)
RETURN ON EQUITY
7.6%
8.2%
MARKET CAPITALIZATION
$24,700
$30,100
STOCK PRICE PER SHARE (YEAR END)
$72.27
$90.47
DIVIDEND YIELD (YEAR END)
4.2%
3.3%
0
5
2
$
0
0
4
$
0
0
4
$
CON EDISON TRANSMISSION
2021 $47 (Total)
2022 $65 (Total)
2023 $47 (Total)
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6
4
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–
$
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7
4
$
S
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–
$
TOTAL SHAREHOLDER RETURN
(17.0)%
22.5%
CAPITAL EXPENDITURES
2021 $4,018 (Total)
2022 $3,943 (Total)
2023 $4,171 (Total)
To Our
Shareholders
Con Edison is taking on the challenges of our time. We are advancing clean energy
for all. Our mission has never been more important, as the world, our country, and our
neighborhoods combat climate change, COVID-19, and systemic inequality.
We go forward by pushing past boundaries. We are reimagining what’s possible with
leading-edge technologies and our dedicated, innovative employees. In all we do, our
three priorities—safety for our employees and the public, operational excellence, and
the customer experience—drive our actions.
We always keep long-term sustainability and our Clean Energy Commitment top of mind.
We do so by making our grid more resilient and flexible, enabling us to deliver the most
reliable electric service in the nation. We find new ways to further New York’s clean energy
goals. We invest in the institutions that make New York so vibrant. We value diversity and
inclusion and strive to create a workplace that reflects the incredible breadth of cultures,
experiences, and perspectives our region offers.
Strong operational performance coupled with our strategic vision continues to generate
long-term value for our customers, employees, communities, and shareholders.
Our stakeholders can count on us. I am proud to report dividend growth for the 47th
consecutive year— a longer track record than any energy company in the S&P 500.
You’re seeing a 4-cent increase over 2020, to $3.10 per share.
Con Edison Annual Report 2020 100% Clean Electricity
by 2040
• We want to make it easier for our customers
to go green by offering them the choice to buy
100% clean electricity from us.
• Our Clean Energy Businesses have made us
the second largest solar producer in North
America and the seventh largest in the world.
We have large-scale solar and wind projects
across the nation and continue to expand
our portfolio.
• We want to use our expertise in developing,
owning, and operating renewable generation
in New York by seeking governmental
authorization to add renewable generation
right here in our state.
• Our support for solar energy enabled over
45,000 local solar installations.
• Large-scale energy storage is key to keeping
clean energy flowing when the sun is not
shining, and the wind is not blowing.
We recently partnered in a project to place a
100 MW battery storage project in Astoria,
Queens. The capacity of this storage site will
be 10 times greater than the amount installed
in our territory today.
• Con Edison Transmission is breaking
important ground in the region and beyond.
We are the largest owner in a partnership that
is constructing a major electric transmission
project in the Hudson Valley, a critical initiative
needed to connect large-scale renewables in
the state. We’re also keeping a keen eye on
offshore wind, recognizing New York State’s
9,000 MW target for offshore wind by 2035.
To deliver this great new source of clean
electric generation to customers, we need to
extend the grid out to the ocean and expand
the existing grid on land. Our regulated utilities
and Con Edison Transmission are proposing
projects to support the integration of this
much-needed new resource.
OUR CLEAN ENERGY
COMMITTMENT
Our Clean Energy Commitment is our way
forward. It will allow us to deliver what our
customers want and what the planet needs. Our
plans were developed to accomplish two goals:
reducing carbon emissions and making our
energy-delivery systems more resilient in the face
of intensifying extreme weather associated with
climate change.
We collaborated with Columbia University on a
multi-year study to evaluate the projected effects
of climate change on our infrastructure, design
specifications, and procedures. In 2020, we
incorporated results of the study into our planning.
Increasingly frequent and severe storms serve
as painful evidence of climate change. Just last
summer, Tropical Storm Isaias brought down
trees, causing a half-million outages for our
customers, the second largest number of outages
in our company’s history, behind only 2012’s
Superstorm Sandy. Any power loss is incredibly
difficult. That’s why it’s imperative to continue
to harden our systems in the face of the
changing climate.
Our vision is to reduce the impact of intense
storms as well as extreme heat. Taking significant
steps to rapidly reduce carbon emissions and our
use of fossil fuels can help. In practical terms, our
Clean Energy Commitment means:
Tripling Energy Efficiency
by 2030
• To help our customers aggressively reduce
their overall energy use, we’re tripling our
energy efficiency programs. We’ll offer $1.5
billion in rebates and incentives by 2025
• The incentives help homeowners and
businesses install energy-efficient lighting,
cooling, and heating systems. Since 2009,
more than 1.3 million customers have
upgraded to more efficient equipment,
saving about 9 million metric tons of carbon
emissions.
• As part of our work, we are partnering with
large building owners to develop more cost-
effective approaches to reduce the use of
fossil fuels in existing buildings.
Con Edison Annual Report 2020
All-in Support for
Electric Vehicles
• To drive electric vehicle adoption, we’re
connecting thousands of new chargers. It is
the second-most ambitious program in the
country. We are also a charter member of a
coalition of energy companies and EV makers
to support EV-adoption policies.
• We’re transitioning our light-duty fleet to
electric vehicles and researching alternative
technologies to reduce fossil fuels for
medium- and heavy-duty trucks.
Accelerating Reduction of
Fossil Fuels for Heating
• We are an anchor sponsor of a project called
the Low Carbon Resource Initiative, to explore
low-carbon fuels such as green hydrogen
and renewable natural gas, with the Electric
Power Research and Gas Technology
institutes. Green hydrogen is a carbon-free
fuel made from water by using excess energy
from renewables like wind and solar.
• Today, we’re helping customers switch to
high-efficiency electric air-source and
geothermal heat pumps. We’ll also be piloting
geothermal district heating options.
• Partnerships with local jurisdictions will
support changes to building codes necessary
to reduce the use of fossil fuels in buildings.
SAFETY:
WHERE EVERYTHING BEGINS
Our focus on safety—for our employees and
the public—was relentless before the COVID-19
pandemic. It has remained steady throughout
this experience and will continue once the
crisis subsides.
The company has benefited from our practice of
preparing for the worst. Our pandemic planning
team has been in place for close to a decade.
As essential workers, our people show up every
day even in the toughest times. They’ve adapted
quickly to working in the time of COVID-19,
learning to work with masks, social distancing,
and staggered work schedules.
Throughout, our employees’ commitment to public
safety has never wavered. They helped set up field
hospitals in Brooklyn and Manhattan, powered
drive-through COVID-19 testing sites, and made
face shields to donate to healthcare workers.
Meanwhile, we’ve continued the practices that
keep our electric-, gas- and steam-delivery
systems safe and reliable. We are on track to
install 375,000 natural gas detectors in homes and
businesses by 2025. We are the first energy
company in the country to have developed these
devices, which sense natural gas leaks and
automatically send alerts to our emergency
responders. This leading-the-way technology not
only improves safety, it also helps eliminate small
sources of methane emissions that would
otherwise go undetected.
We continue to enhance the safety of our electric
and steam systems. We use thermal imaging
cameras to inspect manholes without taking
off covers, and advanced sensors to detect cable
abnormalities in underground structures before
failure. Remote detection and data analytics
are key to assessing the conditions of our
steam system.
Con Edison Annual Report 2020
OPERATIONAL EXCELLENCE:
HOW WE DELIVER OUR BEST
Operational excellence is the standard to which
we hold ourselves accountable. To achieve
excellence in operations, we design, maintain, and
protect our energy systems with rigor, precision,
and quality analysis.
Minimizing risk is critical, especially during the
pandemic. Our corporate leadership and board of
directors are directly engaged in these efforts.
Cyber and physical threats converge by the day
and have become even more acute during these
uncertain times. We continue to expand our use
of next-generation intrusion detection and
prevention tools to further protect our data and
our customers’ personal information. We train
employees to stay aware of and report potential
cyber and physical threats.
Perhaps the greatest measure of operational
excellence is our world-class reliability. Year after
year, we are recognized by the industry as the
most reliable electric company in the country. This
world-class reliability is driven by our leading-edge
designs, operational expertise, and investment in
our electric delivery systems.
Our aim is to continuously improve. We invest
more than $3 billion each year in our energy
systems using a risk-based approach to maximize
the value of each dollar spent. We use industry-
changing practices such as conservation voltage
optimization to give customers just the right
amount of voltage they need at their outlets and
not more. This helps us better manage peak
demand, cut pollution, and lower costs for
our customers.
THE CUSTOMER EXPERIENCE:
WHY WE FIND SOLUTIONS
We consider every interaction with Con Edison
from the perspective of the people who rely on us
to keep their businesses running, and heat and
cool their homes. They are the reason we work to
find solutions to the most pressing problems of
our day.
We recognize the financial and social hardships
the pandemic has put on the people we serve. To
help, we’ve offered flexible payment agreements
for residential and commercial customers and
waived late fees and deposits that would
otherwise be required for struggling businesses.
We’re continuing to reach out to customers to
help them manage their bills.
Public education is key. We’ve warned customers
about COVID-19 scams, offered low-cost ways to
save energy while people are spending more time
at home, and reminded customers to always
report emergencies. We reinforced these
messages through direct mail, web updates, email
campaigns, social media, and webinars for
community organizations.
Over the long-term, we believe smart meters will
make a fundamental difference in our customers’
lives. These devices not only allow us to see and
respond to outages faster, but they also provide
customers with insights into how to reduce energy
consumption and save money. By the end
of 2021, we expect to have installed 5 million
smart meters.
Our customers want to hear from us, particularly
during difficult times. That’s why we are sending
more frequent communications before severe
weather. We sent millions of storm alert texts
before Tropical Storm Isaias struck the Northeast
last summer.
Technology and digital tools are improving the
customer experience. Customers can now use
Google and Amazon Alexa voice assistants
to manage their accounts. We’ve also improved
accessibility to our website and app for customers
with hearing, vision, cognitive, and mobility
impairments.
Con Edison Annual Report 2020 COMMITTING TO OUR
PEOPLE, COMMUNITIES &
A MORE EQUITABLE SOCIETY
Our people are the essential workers who energize
New York’s hospitals, supermarkets, and
transportation systems. Their work provides bright
spots in dark times.
Our employees prove again and again how
resilient and flexible they are. Whether they are
working in the field or juggling the challenges of
home-schooling, they make me incredibly proud.
The pandemic has laid bare socioeconomic
inequities. Injustices were exacerbated by the
murder of George Floyd. The pain of racism for the
Black community has been tragically evident. In
response, our company hosted listening sessions
to let employees share their concerns, hurt, and
anger. These sessions show us how important
our work is to train and empower employees to
leverage and embrace our differences.
Enormous strength lies in our employees’ varied
cultures, perspectives, and experiences. We are
committed to addressing systemic inequality and
becoming an even more diverse and inclusive
company—a place where each person can be
their authentic selves, feel valued, included, and
reach their full potential.
Con Edison has a long tradition of supporting
organizations that safeguard diversity, equality,
social justice, civic engagement, education, the
environment, and the arts. Last year, we gave
more than $12 million to nonprofits in our
communities.
We’ve made sure our partners know they can
count on us as they provide pandemic relief to our
communities. Too many organizations have been
forced to close their doors, operate at decreased
capacity, and manage with less revenue. Last year,
we accelerated funding and transitioned funds
for canceled events into operating support. The
COVID-19 pandemic has brought with it a rise
in food insecurity. In response, we gave more
than $800,000 in grants to organizations feeding
the hungry.
EXCITED AND READY
FOR THE FUTURE
In the battle for the planet and humanity’s
well-being, we must continue to stand up as a
responsible corporate citizen. Delivering on our
Clean Energy Commitment will benefit our
customers, communities, the environment, our
employees, and you, our shareholders.
As we seek and seize new investment
opportunities, we will maintain our low-risk,
low-volatility business model. We will continue to
be guided by our focus on sustainability and our
three priorities—safety for ourselves and those
we serve; achieving operational excellence in
managing our energy and technology systems;
and providing an outstanding customer
experience.
Our strong corporate governance practices and
board members, with their broad set of skills,
varied lengths of tenure, and diversity, make
us sustainable today and for tomorrow. We are
committed to actions and policies that will
contribute to a more equitable society.
Before I close, I want to congratulate my
predecessor, John McAvoy on his retirement.
As our leader for the last eight years, John
provided strong and steady stewardship and
inspiration in a time of great change.
Though 2020 presented many challenges and
the new year comes with more obstacles, I am
certain we will persevere and thrive. By staying
nimble and working as a team, there is no
stopping us. I am excited and ready to make our
clean energy vision a reality for all.
Thank you for your support and confidence.
Timothy P. Cawley
President and Chief Executive Officer
Con Edison Annual Report 2020 UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
___________________________________________________
FORM 10-K
___________________________________________________
☒ Annual Report Pursuant To Section 13 or 15(d) of the Securities Exchange Act of 1934
FOR THE FISCAL YEAR ENDED DECEMBER 31, 2020
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 1-14514
Consolidated Edison, Inc.
Exact name of registrant as specified in its charter
and principal office address and telephone number
New York
State of Incorporation
13-3965100
I.R.S. Employer
ID. Number
4 Irving Place,
New York, New York 10003
(212) 460-4600
___________________________________________________
Commission File Number 1-1217
Consolidated Edison Company of New York, Inc.
Exact name of registrant as specified in its charter
and principal office address and telephone number
New York
State of Incorporation
13-5009340
I.R.S. Employer
ID. Number
4 Irving Place,
New York, New York 10003
(212) 460-4600
___________________________________________________
CON EDISON ANNUAL REPORT 2020
1
Securities Registered Pursuant to Section 12(b) of the Act:
Title of each class
Consolidated Edison, Inc.,
Common Shares ($.10 par value)
Trading Symbol
ED
Name of each exchange
on which registered
New York Stock Exchange
Securities Registered Pursuant to Section 12(g) of the Act: None
Indicate by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities
Act.
Consolidated Edison, Inc. (Con Edison)
Consolidated Edison Company of New York, Inc. (CECONY)
Yes x
Yes x
No ¨
No ¨
Indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or Section 15(d) of the
Act.
Con Edison
CECONY
Yes ¨
Yes ¨
No x
No x
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.
Con Edison
CECONY
Yes x
Yes x
No ¨
No ¨
Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be
submitted 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 such files).
Con Edison
CECONY
Yes x
Yes x
No ¨
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
Smaller reporting company
CECONY
Large accelerated filer
Smaller reporting company
☒
☐
☐
☐
Accelerated filer
Emerging growth company
Accelerated filer
Emerging growth company
Non-accelerated filer
Non-accelerated Filer
☐
☐
☐
☐
☐
☒
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 has filed a report on and attestation to its management’s assessment
of the effectiveness of its internal control over financial reporting under Section 404(b) of the Sarbanes-Oxley Act
(15 U.S.C. 7262(b)) by the registered public accounting firm that prepared or issued its audit report. ☒
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Act).
Con Edison
CECONY
Yes ☐
Yes ☐
No x
No x
The aggregate market value of the common equity of Con Edison held by non-affiliates of Con Edison, as of
June 30, 2020, was approximately $24.0 billion.
As of January 31, 2021, Con Edison had outstanding 342,419,162 Common Shares ($.10 par value).
2
CON EDISON ANNUAL REPORT 2020
All of the outstanding common equity of CECONY is held by Con Edison.
Documents Incorporated By Reference
Portions of Con Edison’s definitive proxy statement for its Annual Meeting of Stockholders to be held on May 17,
2021, to be filed with the Commission pursuant to Regulation 14A, not later than 120 days after December 31,
2020, is incorporated in Part III of this report.
Filing Format
This Annual Report on Form 10-K 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. CECONY meets the conditions set forth in General Instruction (I)(1)(a) and (b) of Form 10-K and is
therefore filing this Form 10-K with the reduced disclosure format.
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.
CON EDISON ANNUAL REPORT 2020
3
Glossary of Terms
The following is a glossary of abbreviations or acronyms that are used in the Companies’ SEC reports:
Con Edison Companies
Con Edison
CECONY
Clean Energy Businesses
Consolidated Edison, Inc.
Consolidated Edison Company of New York, Inc.
Con Edison Clean Energy Businesses, Inc., together with its subsidiaries, including
Consolidated Edison Development, Inc., Consolidated Edison Energy, Inc. and Consolidated
Edison Solutions, Inc.
Con Edison Transmission
Con Edison Transmission, Inc., together with its subsidiaries
CET Electric
CET Gas
O&R
RECO
The Companies
The Utilities
Consolidated Edison Transmission, LLC
Con Edison Gas Pipeline and Storage, LLC
Orange and Rockland Utilities, Inc.
Rockland Electric Company
Con Edison and CECONY
CECONY and O&R
Regulatory Agencies, Government Agencies and Other Organizations
EPA
FASB
FERC
IASB
IRS
NJBPU
NJDEP
NYISO
NYPA
NYSDEC
NYSERDA
NYSPSC
NYSRC
PJM
SEC
Accounting
AFUDC
ASU
GAAP
HLBV
OCI
VIE
U.S. Environmental Protection Agency
Financial Accounting Standards Board
Federal Energy Regulatory Commission
International Accounting Standards Board
Internal Revenue Service
New Jersey Board of Public Utilities
New Jersey Department of Environmental Protection
New York Independent System Operator
New York Power Authority
New York State Department of Environmental Conservation
New York State Energy Research and Development Authority
New York State Public Service Commission
New York State Reliability Council, LLC
PJM Interconnection LLC
U.S. Securities and Exchange Commission
Allowance for funds used during construction
Accounting Standards Update
Generally Accepted Accounting Principles in the United States of America
Hypothetical Liquidation at Book Value
Other Comprehensive Income
Variable Interest Entity
4
CON EDISON ANNUAL REPORT 2020
Environmental
CO2
GHG
MGP Sites
PCBs
PRP
RGGI
Superfund
Units of Measure
AC
Bcf
Dt
kV
kWh
MDt
Mlb
MMlb
MVA
MW
MWh
Other
AMI
CLCPA
COSO
COVID-19
DER
Fitch
LTIP
Moody’s
REV
S&P
TCJA
VaR
Carbon dioxide
Greenhouse gases
Manufactured gas plant sites
Polychlorinated biphenyls
Potentially responsible party
Regional Greenhouse Gas Initiative
Federal Comprehensive Environmental Response, Compensation and Liability Act of 1980 and
similar state statutes
Alternating current
Billion cubic feet
Dekatherms
Kilovolt
Kilowatt-hour
Thousand dekatherms
Thousands of pounds
Million pounds
Megavolt ampere
Megawatt or thousand kilowatts
Megawatt hour
Advanced Metering Infrastructure
Climate Leadership and Community Protection Act
Committee of Sponsoring Organizations of the Treadway Commission
Coronavirus Disease 2019
Distributed energy resources
Fitch Ratings
Long Term Incentive Plan
Moody’s Investors Service
Reforming the Energy Vision
S&P Global Ratings
The federal Tax Cuts and Jobs Act of 2017, as enacted on December 22, 2017
Value-at-Risk
CON EDISON ANNUAL REPORT 2020
5
TABLE OF CONTENTS
Introduction
Available Information
Forward-Looking Statements
Non-GAAP Financial Measures
Part I
Item 1:
Business
Item 1A: Risk Factors
Item 1B:
Unresolved Staff Comments
Item 2:
Item 3:
Item 4:
Part II
Item 5:
Item 6:
Item 7:
Item 7A:
Item 8:
Properties
Legal Proceedings
Mine Safety Disclosures
Information about our Executive Officers
Market for the Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities
Selected Financial Data
Management’s Discussion and Analysis of Financial Condition and Results of Operations
Quantitative and Qualitative Disclosures about Market Risk
Financial Statements and Supplementary Data
Item 9:
Changes in and Disagreements with Accountants on Accounting and Financial Disclosure
Item 9A: Controls and Procedures
Item 9B: Other Information
Part III
Item 10: Directors, Executive Officers and Corporate Governance
Item 11:
Executive Compensation
Item 12:
Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters
Item 13: Certain Relationships and Related Transactions, and Director Independence
Item 14:
Principal Accounting Fees and Services
Part IV
Item 15:
Exhibits and Financial Statement Schedules
Item 16:
Form 10-K Summary
Signatures
PAGE
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11
11
16
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50
50
51
52
53
54
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93
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191
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200
201
6
CON EDISON ANNUAL REPORT 2020
Introduction
This introduction contains certain information about Con Edison and its subsidiaries, including CECONY. This
introduction is not a summary and should be read together with, and is qualified in its entirety by reference to, the
more detailed information appearing elsewhere or incorporated by reference in this report.
Con Edison’s mission is to provide energy services to our customers safely, reliably, efficiently and in keeping with
our vision for a clean energy future; to provide a workplace that embraces diversity and inclusion and allows
employees to realize their full potential; to provide a fair return to our investors; and to improve the quality of life in
the communities we serve. The company has ongoing programs designed to support each component of its
mission, including initiatives focused on safety, operational excellence and the customer experience.
Con Edison is a holding company that owns:
•
Consolidated Edison Company of New York, Inc. (CECONY), which provides electric service and gas service in
New York City and Westchester County and steam service in parts of Manhattan;
•
• Orange & Rockland Utilities, Inc., which along with its utility subsidiary, Rockland Electric Company (together
referred to herein as O&R), provides electric service in southeastern New York and northern New Jersey and
gas service in southeastern New York (O&R, together with CECONY referred to as the Utilities);
Con Edison Clean Energy Businesses, Inc., which through its subsidiaries, develops, owns and operates
renewable and sustainable energy infrastructure projects and provides energy-related products and services to
wholesale and retail customers (Con Edison Clean Energy Businesses, Inc., together with its subsidiaries
referred to as the Clean Energy Businesses); and
Con Edison Transmission, Inc., which through its subsidiaries, invests in electric transmission facilities and
holds investments in gas pipeline and storage facilities (Con Edison Transmission, Inc., together with its
subsidiaries referred to as Con Edison Transmission).
•
Con Edison anticipates that the Utilities, which are subject to extensive regulation, will continue to provide
substantially all of its earnings over the next few years. The Utilities have approved rate plans that are generally
designed to cover each company’s cost of service, including capital and other costs of each company’s energy
delivery systems. The Utilities recover from their full-service customers (who purchase energy from them), generally
on a current basis, the cost the Utilities pay for energy and charge all of their customers the cost of delivery service.
See "Utility Regulation" in Item 1, "Risk Factors" in Item 1A and "Rate Plans" in Note B to the financial statements in
Item 8.
Selected Financial Data
Con Edison
(Millions of Dollars, except per share
amounts)
Operating revenues
Energy costs
Operating income (f)
Net income for common stock
Total assets
Long-term debt
Total equity
Net Income per common share – basic
Net Income per common share – diluted
Dividends declared per common share
Book value per share
Average common shares outstanding (millions)
2016
$12,075
3,088
2,780
1,245
48,255
14,735
14,306
$4.15
$4.12
$2.68
$46.91
300
For the Year Ended December 31,
2017
$12,033
2,625
2,774
2018
12,337
2,948
2,664
1,525 (e)
1,382 (e)
2019
12,574
2,633
2,676
1,343
2020
12,246
2,283
2,654
1,101
48,111 (a)
53,920 (b)
58,079 (c)
62,895
(d)
14,731
15,425
$4.97
$4.94
$2.76
$49.72
307
17,495
16,839
$4.43
$4.42
$2.86
$52.46
312
18,527
18,213
$4.09
$4.08
$2.96
$54.75
329
20,382
19,065
$3.29
$3.28
$3.06
$55.70
335
(a) Reflects a $2,384 million increase in net plant, offset by decreases in regulatory assets resulting from the enactment of the federal Tax Cuts
and Jobs Act of 2017, as enacted on December 22, 2017 (TCJA) of $2,418 million (including the netting of $1,168 million against the
regulatory liability for future income tax) and unrecognized pension and other postretirement costs of $348 million. See Notes B, E, F and L
to the financial statements in Item 8.
CON EDISON ANNUAL REPORT 2020
7
(b) Reflects a $4,149 million increase in net plant, offset by a $288 million decrease in regulatory assets for unrecognized pension and other
postretirement costs. See Notes B, E, and F to the financial statements in Item 8.
(c) Reflects a $2,140 million increase in net plant and a $303 increase in regulatory assets for unrecognized pension and other postretirement
costs. See Notes B, E, and F to the financial statements in Item 8.
(d) Reflects a $2,666 million increase in net plant and a $700 million increase in regulatory assets for unrecognized pension and other
(e)
postretirement costs. See Notes B, E, and F to the financial statements in Item 8.
In 2017, upon enactment of the TCJA, Con Edison re-measured its deferred tax assets and liabilities based upon the 21 percent corporate
income tax rate under the TCJA. As a result, Con Edison decreased its net deferred tax liabilities by $5,312 million, recognized $259 million
(or $0.85 per share) in net income, decreased its regulatory asset for future income tax by $1,250 million, decreased its regulatory asset for
revenue taxes by $90 million, and accrued a regulatory liability for federal income tax rate change of $3,713 million. In 2018, Con Edison
recognized $42 million of income tax expense resulting from a re-measurement of its deferred tax assets and liabilities following the
issuance of proposed TCJA regulations. See “Other Regulatory Matters” in Note B and Note L to the financial statements in Item 8.
(f) Excludes the non-service components of pension and other postretirement benefits. See Notes E and F to the financial statements in Item
8.
CECONY
(Millions of Dollars)
Operating revenues
Energy costs
Operating income (e)
Net income
Total assets
Long-term debt
Shareholder’s equity
2016
$10,165
2,059
2,451
1,056
40,856
12,073
11,829
For the Year Ended December 31,
2017
$10,468
2,141
2,549
1,104
2018
$10,680
2,339
2,354
1,196
2019
$10,821
2,170
2,348
1,250
2020
$10,647
2,014
2,310
1,185
40,451 (a)
43,108 (b)
46,557 (c)
50,967 (d)
12,065
12,439
13,676
12,910
14,614
14,147
16,149
14,849
(a) Reflects a $2,090 million increase in net plant, offset by decreases in regulatory assets resulting from the enactment of the TCJA of $2,305
million (including the netting of $1,123 million against the regulatory liability for future income tax) and unrecognized pension and other
postretirement costs of $354 million. See Notes B, E and F to the financial statements in Item 8.
(b) Reflects a $2,165 million increase in net plant and a $265 million decrease in regulatory assets for unrecognized pension and other
postretirement costs. See Notes B, E and F to the financial statements in Item 8.
(c) Reflects a $2,040 million increase in net plant and a $292 million increase in regulatory assets for unrecognized pension and other
postretirement costs. See Notes B, E and F to the financial statements in Item 8.
(d) Reflects a $2,140 million increase in net plant and a $662 million increase in regulatory assets for unrecognized pension and other
postretirement costs. See Notes B, E and F to the financial statements in Item 8.
(e) Excludes the non-service components of pension and other postretirement benefits. See Notes E and F to the financial statements in Item
8.
Significant Developments and Outlook
•
Con Edison reported 2020 net income of $1,101 million or $3.29 a share compared with $1,343 million or $4.09
a share in 2019. Adjusted earnings were $1,399 million or $4.18 a share in 2020 compared with $1,438 million
or $4.38 a share in 2019. See “Results of Operations” in Item 7 and “Non-GAAP Financial Measures” below.
•
•
In 2020, the Utilities invested $3,466 million to upgrade and reinforce their energy delivery systems, the Clean
Energy Businesses invested $616 million in renewable electric production projects and Con Edison
Transmission invested $3 million primarily in the electric transmission business. For 2021, 2022 and 2023 the
Utilities expect to invest $3,721 million, $3,478 million and $3,724 million, respectively, for their energy delivery
systems, the Clean Energy Businesses expect to invest $250 million, $400 million and $400 million,
respectively, in renewable electric production projects and Con Edison Transmission expects to invest $47
million, $65 million and $47 million, respectively, primarily in the electric transmission business. See "Capital
Requirements and Resources - Capital Requirements" in Item 1.
Con Edison plans to meet its capital requirements for 2021 through 2023, through internally-generated funds
and the issuance of long-term debt and common equity. See “Capital Requirements and Resources - Capital
Requirements” in Item 1. The company's plans include the issuance of between $1,900 million and $2,600
million of long-term debt, including for maturing securities, primarily at the Utilities, in 2021 and approximately
$1,400 million in aggregate of long-term debt at the Utilities during 2022 and 2023. The planned debt issuance
is in addition to the issuance of long-term debt secured by the Clean Energy Businesses’ renewable electric
production projects. The company's plans also include the issuance of up to $800 million of common equity in
2021 and approximately $700 million in aggregate of common equity during 2022 and 2023, in addition to
equity under its dividend reinvestment, employee stock purchase and long-term incentive plans.
8
CON EDISON ANNUAL REPORT 2020
•
•
•
•
•
•
•
•
CECONY forecasts average annual growth in peak demand in its service area at design conditions over the
next five years for electricity and gas to be approximately 0.8 percent and 1.4 percent, respectively, and an
average annual decrease in steam peak demand in its service area at design conditions over the next five
years to be approximately 0.4 percent. O&R forecasts an average annual decrease in electric peak demand in
its service area at design conditions over the next five years to be approximately 0.5 percent and average
annual growth in gas peak demand in its service area over the next five years at design conditions to be
approximately 0.2 percent. See “The Utilities” in Item 1.
CECONY established a gas moratorium in March 2019 on new gas service in most of Westchester County.
CECONY filed a gas planning analysis with the NYSPSC in July 2020 stating the moratorium could be lifted
when increased pipeline capacity is achieved or peak demand is reduced to a level that would enable the
company to lift the moratorium and that it is monitoring gas supply constraint in the New York City portion of its
service territory. See "The Utilities" in Item 1.
In 2020, due to the COVID-19 pandemic, 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 and the State of New York enacted a law prohibiting New York utilities, including CECONY and
O&R, from disconnecting residential customers during the COVID-19 state of emergency. For the year ended
2020, the reserve increases to the allowance for uncollectible accounts associated with the COVID-19
pandemic for CECONY electric and gas operations and O&R electric operations were $73 million and $2
million, respectively, and were deferred pursuant to the legislative, regulatory and related actions provisions of
the rate plans as a result of the New York State on "PAUSE" and related executive orders. See "COVID-19
Regulatory Matters" in Note B to the financial statements in Item 8.
In November 2020, the New York State Public Service Commission (NYSPSC) issued two separate show
cause orders in its proceedings investigating: (1) the New York utilities’ preparation for and response to Tropical
Storm Isaias and the resulting power outages in August 2020 and (2) the July 2019 power outages on the west
side of Manhattan and in the Flatbush area of Brooklyn. See "Other Regulatory Matters" in Note B to the
financial statements in Item 8.
The NYSPSC also continued its proceedings related to income tax accounting and a July 2018 CECONY
steam rupture and concluded its investigations into the Utilities' preparation and response to the March 2018
Winter Storms Riley and Quinn and its proceeding against CECONY for alleged violations of gas operator
qualification, performance, and inspection requirements. See "Other Regulatory Matters" in Note B to the
financial statements in Item 8.
In 2020, the NYSPSC continued its Reforming the Energy Vision (REV) and related proceedings. See
"Environmental Matters - Clean Energy Future - Reforming the Energy Vision" in Item 1. In July 2020, the
NYSPSC established a light-duty electric vehicle make-ready program that includes budgets of $290 million
and $24 million for CECONY and O&R, respectively, through 2025 for electric vehicle infrastructure for fast
charger stations, fleet assessment services for customers interested in fleet electrification and future-proofing
so that components can accommodate updates to the quantity or charging capacity of the station. See
"Environmental Matters - Clean Energy Future" in Item 1.
The Clean Energy Businesses increased their renewable energy portfolio by 186 MW AC, resulting in a year-
end installed capacity of 2,868 MW AC, bringing the annual renewable energy production for 2020 to over 7
terawatt hours. See "Clean Energy Businesses" in Item 1.
In January 2019, Pacific Gas and Electric Company (PG&E) filed for reorganization under Chapter 11 of the
U.S. Bankruptcy Code. The output of certain of the Clean Energy Businesses' renewable electric production
projects is sold to PG&E under long-term power purchase agreements. As a result of the PG&E bankruptcy,
distributions from the related projects to the Clean Energy Businesses were restricted and PG&E-related
project debt was reclassified on Con Edison's consolidated balance sheet from long-term debt to long-term
debt due within one year. In July 2020, PG&E’s plan of reorganization became effective and the Clean Energy
Businesses began receiving previously restricted distributions and all related project debt with a maturity longer
than one year was reclassified to long-term debt. See "Clean Energy Businesses - Renewable Electric
Production" in Item 1 and "Long-Lived and Intangible Assets" in Note A.
•
Con Edison Gas Pipeline and Storage, LLC (CET Gas) recorded a pre-tax impairment loss of $320 million
($223 million after-tax) for the year ended December 31, 2020 that reduced the carrying value of its investment
CON EDISON ANNUAL REPORT 2020
9
in Mountain Valley Pipeline LLC (MVP), a joint venture developing a proposed 300-mile gas transmission
project in West Virginia and Virginia from $662 million to $342 million. See “Investments” in Note A to the
financial statements in Item 8.
•
CET Gas is considering strategic alternatives with respect to its 50 percent interest in Stagecoach Gas
Services, LLC, a joint venture that owns and operates an existing gas pipeline and storage business located in
northeastern Pennsylvania and the southern tier of New York. See “Con Edison Transmission,” in Item 1.
10
CON EDISON ANNUAL REPORT 2020
Available Information
Con Edison and CECONY file annual, quarterly and current reports and other information, and Con Edison files
proxy statements, with the Securities and Exchange Commission (SEC). The SEC maintains an Internet site at
www.sec.gov that contains reports, proxy statements, and other information regarding issuers (including Con Edison
and CECONY) that file electronically with the SEC.
This information the Companies file with the SEC is also available free of charge on or through the investor
information section of their websites as soon as reasonably practicable after the reports are electronically filed with,
or furnished to, the SEC. Con Edison’s internet website is at: www.conedison.com; and CECONY’s is at:
www.coned.com.
The "About Us - Corporate Governance" section of Con Edison’s website includes the company’s Standards of
Business Conduct (its code of ethics) and amendments or waivers of the standards for executive officers or
directors, corporate governance guidelines and the charters of the following committees of the company’s Board of
Directors: Audit Committee, Corporate Governance and Nominating Committee, Management Development and
Compensation Committee, and Safety, Environment, Operations, and Sustainability Committee. This information is
available in print to any shareholder who requests it. Requests should be directed to: Corporate Secretary,
Consolidated Edison, Inc., 4 Irving Place, New York, NY 10003.
The "About Us - Sustainability Report” section of Con Edison’s website includes “Our Sustainable Future,” the
company’s 2019 sustainability report.
Information on the Companies’ websites is not incorporated herein.
Forward-Looking Statements
This report contains 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 expectations and not facts. Words such as
"forecasts," "expects," "estimates," "anticipates," "intends," "believes," "plans," "will," "target," and similar
expressions identify forward-looking statements. The forward-looking statements reflect information available and
assumptions at the time the statements are made, and speak only as of that time. Actual results or developments
might differ materially from those included in the forward-looking statements because of various factors including,
but not limited to, those discussed under “Risk Factors,” in Item 1A.
Non-GAAP Financial Measures
Adjusted earnings and adjusted earnings per share are financial measures that are not determined in accordance
with generally accepted accounting principles in the United States of America (GAAP). These non-GAAP financial
measures should not be considered as an alternative to net income for common stock or net income per share,
respectively, each of which is an indicator of financial performance determined in accordance with GAAP. Adjusted
earnings and adjusted earnings per share exclude from net income and net income per share, respectively, certain
other items that the company does not consider indicative of its ongoing financial performance. Management uses
these non-GAAP financial measures to facilitate the analysis of the company's financial performance as compared
to its internal budgets and previous financial results. Management also uses these non-GAAP financial measures to
communicate to investors and others the company’s expectations regarding its future earnings and dividends on its
common stock. Management believes that these non-GAAP financial measures also are useful and meaningful to
investors to facilitate their analysis of the company's financial performance. The following table is a reconciliation of
Con Edison’s reported net income for common stock to adjusted earnings and reported earnings per share to
adjusted earnings per share.
CON EDISON ANNUAL REPORT 2020
11
(Millions of Dollars, except per share amounts)
Reported net income for common stock – GAAP basis
Income tax effect of the Tax Cuts and Jobs Act (a)
Gain on sale of solar electric production projects (pre-tax)
Income taxes (b)
Gain on sale of solar electric production projects (net of tax)
Gain on sale of the Clean Energy Businesses' retail electric supply business (pre-tax)
Income taxes (b)
Gain on sale of the Clean Energy Businesses' retail electric supply business (net of tax)
Goodwill impairment related to the Clean Energy Businesses' energy service business
(pre-tax)
Income taxes (b)
2016
2017
2018
2019
2020
$1,245
$1,525
$1,382
$1,343
$1,101
—
—
—
—
(104)
48
(56)
15
(3)
(259)
(2)
1
(1)
—
—
—
—
—
42
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
Goodwill impairment related to the Clean Energy Businesses' energy service business (net
of tax)
12
—
—
—
Gain on acquisition of Sempra Solar Holdings, LLC, net of transaction costs (pre-tax)
(c)
Income taxes (b)
Gain on acquisition of Sempra Solar Holdings, LLC, net of transaction costs (net of tax) (c)
Impairment loss related to investment in Mountain Valley Pipeline, LLC (pre-tax) (d)
Income taxes (b)
Impairment loss related to investment in Mountain Valley Pipeline, LLC (net of tax) (d)
HLBV effects of the Clean Energy Businesses (pre-tax) (e)
Income taxes (b)
HLBV effects of the Clean Energy Businesses (net of tax) (e)
Net mark-to-market effects of the Clean Energy Businesses (pre-tax)
Income taxes (b)
Net mark-to-market effects of the Clean Energy Businesses (net of tax)
—
—
—
—
—
—
—
—
—
(5)
2
(3)
—
—
—
—
—
—
—
—
—
(1)
—
(1)
(114)
33
(81)
—
—
—
—
—
—
8
(2)
6
—
—
—
—
—
98
(24)
74
27
(6)
(14)
21
43
Adjusted earnings (Non-GAAP)
$1,198
$1,264
$1,349
$1,438
$1,399
Reported earnings per share – GAAP basis (basic)
$4.15
$4.97
$4.43
$4.09
$3.29
Income tax effect of the Tax Cuts and Jobs Act (a)
Gain on sale of solar electric production projects (pre-tax)
Income taxes (b)
Gain on sale of solar electric production projects (net of tax)
Gain on sale of the Clean Energy Businesses' retail electric supply business (pre-tax)
Income taxes (b)
Gain on sale of the Clean Energy Businesses' retail electric supply business (net of tax)
Goodwill impairment related to the Clean Energy Businesses' energy service business
(pre-tax)
Income taxes (b)
—
(0.85)
0.14
—
—
—
(0.35)
0.16
(0.19)
0.07
(0.03)
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
Goodwill impairment related to the Clean Energy Businesses' energy service business (net
of tax)
0.04
—
—
—
Gain on acquisition of Sempra Solar Holdings, LLC, net of transaction costs (pre-tax)
(c)
Income taxes (b)
Gain on acquisition of Sempra Solar Holdings, LLC, net of transaction costs (net of tax) (c)
Impairment loss related to investment in Mountain Valley Pipeline, LLC (pre-tax) (d)
Income taxes (b)
Impairment loss related to investment in Mountain Valley Pipeline, LLC (net of tax) (d)
HLBV effects of the Clean Energy Businesses (pre-tax) (e)
Income taxes (b)
HLBV effects of the Clean Energy Businesses (net of tax) (e)
Net mark-to-market effects of the Clean Energy Businesses (pre-tax)
Income taxes (b)
Net mark-to-market effects of the Clean Energy Businesses
—
—
—
—
—
—
—
—
—
(0.02)
0.01
(0.01)
—
(0.36)
—
0.10
—
(0.26)
—
—
—
—
—
—
—
—
—
—
—
—
—
—
(0.29)
—
—
0.31
0.66
0.14
—
(0.09)
(0.04)
—
0.22
0.03
0.10
0.10
0.18
—
(0.01)
(0.03)
(0.05)
—
0.02
0.07
0.13
Adjusted earnings per share (Non-GAAP)
$3.99
$4.12
$4.33
$4.38
$4.18
12
CON EDISON ANNUAL REPORT 2020
—
—
—
—
—
—
—
—
—
—
—
—
—
320
(97)
223
44
(12)
32
57
—
—
—
—
—
—
—
—
—
—
—
—
—
0.95
(a)
In 2017, upon enactment of the TCJA, Con Edison re-measured its deferred tax assets and liabilities based upon the 21 percent corporate
income tax rate under the TCJA. As a result, Con Edison decreased its net deferred tax liabilities by $5,312 million, recognized $259 million
(or $0.85 per share) in net income, decreased its regulatory asset for future income tax by $1,250 million, decreased its regulatory asset for
revenue taxes by $90 million, and accrued a regulatory liability for federal income tax rate change of $3,713 million. In 2018, Con Edison
recognized $42 million of income tax expense resulting from a re-measurement of its deferred tax assets and liabilities following the
issuance of the proposed TCJA regulations. See “Other Regulatory Matters” in Note B and Note L to the financial statements in Item 8.
(b) The amount of income taxes was calculated using a combined federal and state income tax rate between 25-27% for the year ended
December 31, 2020, a combined federal and state income tax rate between 22-24% for the year ended December 31, 2019, a combined
federal and state income tax rate of 28% for the year ended December 31, 2018 and a combined federal and state income tax rate of 40%
for the years ended December 31, 2016-2017.
(c) Gain recognized with respect to jointly-owned renewable energy production projects upon completion of the acquisition of Sempra Solar
Holdings, LLC, net of transaction costs for the acquisition. See Note V to the financial statements in Item 8.
(d) Loss recognized with respect to the partial impairment of CET Gas' investment in MVP. See "Investments" in Note A to the financial
(e)
statements in Item 8.
Income attributable to the non-controlling interest of a tax-equity investor in renewable electric production projects accounted for under the
hypothetical liquidation at book value (HLBV) method of accounting. See Note R to the financial statements in Item 8.
CON EDISON ANNUAL REPORT 2020
13
Item 1: Business
Contents of Item 1
Overview
CECONY
Electric
Gas
Steam
Electric
Gas
O&R
Clean Energy Businesses
Con Edison Transmission
Utility Regulation
State Utility Regulation
Regulators
New York Utility Industry
Rate Plans
Liability for Service Interruptions
Generic Proceedings
Federal Utility Regulation
New York Independent System Operator (NYISO)
Competition
The Utilities
CECONY
Electric Operations
Electric Facilities
Electric Sales and Deliveries
Electric Peak Demand
Electric Supply
Gas Operations
Gas Facilities
Gas Sales and Deliveries
Gas Peak Demand
Gas Supply
Steam Operations
Steam Facilities
Steam Sales and Deliveries
Steam Peak Demand and Capacity
Steam Supply
O&R
Electric Operations
Electric Facilities
Electric Sales and Deliveries
Electric Peak Demand
Electric Supply
Gas Operations
Gas Facilities
Gas Sales and Deliveries
Gas Peak Demand
Gas Supply
14
CON EDISON ANNUAL REPORT 2020
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17
17
17
17
17
17
17
17
18
18
19
19
20
20
20
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21
21
21
22
22
23
24
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24
25
25
25
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26
26
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28
28
29
Contents of Item 1
Clean Energy Businesses
Renewable Electric Generation
Energy-Related Products and Services
Con Edison Transmission
CET Electric
CET Gas
Capital Requirements and Resources
Environmental Matters
Clean Energy Future
Climate Change
Environmental Sustainability
CECONY
O&R
Other Federal, State and Local Environmental Provisions
State Anti-Takeover Law
Human Capital
Page
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37
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Incorporation By Reference
Information in any item of this report as to which reference is made in this Item 1 is hereby incorporated by
reference in this Item 1. The use of terms such as “see” or “refer to” shall be deemed to incorporate into Item 1
at the place such term is used the information to which such reference is made.
CON EDISON ANNUAL REPORT 2020
15
PART I
Item 1: Business
Overview
Consolidated Edison, Inc. (Con Edison), incorporated in New York State in 1997, is a holding company that owns all
of the outstanding common stock of Consolidated Edison Company of New York, Inc. (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 “Companies” refers to Con Edison and CECONY.
Con Edison
CECONY
O&R
• RECO
Clean Energy
Businesses
Con Edison
Transmission
• CET Electric
• CET Gas
Con Edison’s principal business operations are those of CECONY, O&R, the Clean Energy Businesses and Con
Edison Transmission. CECONY’s principal business operations are its regulated electric, gas and steam delivery
businesses. O&R’s principal business operations are its regulated electric and gas delivery businesses. The Clean
Energy Businesses develop, own and operate renewable and sustainable energy infrastructure projects and provide
energy-related products and services to wholesale and retail customers. Con Edison Transmission invests in
electric transmission facilities and holds investments in gas pipeline and storage facilities. Con Edison recorded a
pre-tax impairment loss of $320 million for the year ended December 31, 2020 that reduced the carrying value of its
investment in Mountain Valley Pipeline LLC and is considering strategic alternatives with respect to its 50 percent
interest in Stagecoach Gas Services, LLC. See "Investments" in Note A to the financial statements in Item 8.
Con Edison seeks to provide shareholder value through continued dividend growth, supported by earnings growth in
regulated utilities and contracted electric and gas assets. The company invests to provide reliable, resilient, safe
and clean energy critical for its New York customers. The company is an industry leading owner and operator of
contracted, large-scale solar generation in the United States. Con Edison is a responsible neighbor, helping the
communities it serves become more sustainable.
CECONY
Electric
CECONY provides electric service to approximately 3.5 million customers in all of New York City (except a part of
Queens) and most of Westchester County, an approximately 660 square mile service area with a population of more
than nine million.
Gas
CECONY delivers gas to approximately 1.1 million customers in Manhattan, the Bronx, parts of Queens and most of
Westchester County.
Steam
CECONY operates the largest steam distribution system in the United States by producing and delivering
approximately 16,554 MMlb of steam annually to approximately 1,576 customers in parts of Manhattan.
16
CON EDISON ANNUAL REPORT 2020
O&R
Electric
O&R and its utility subsidiary, Rockland Electric Company (RECO) (together referred to herein as O&R) provide
electric service to approximately 0.3 million customers in southeastern New York and northern New Jersey, an
approximately 1,300 square mile service area.
Gas
O&R delivers gas to over 0.1 million customers in southeastern New York.
Clean Energy Businesses
Con Edison Clean Energy Businesses, Inc., together with its subsidiaries, are referred to in this report as the Clean
Energy Businesses. The Clean Energy Businesses develop, own and operate renewable and sustainable energy
infrastructure projects and provide energy-related products and services to wholesale and retail customers.
Con Edison Transmission
Con Edison Transmission, Inc. invests in electric transmission facilities and holds investments in gas pipeline and
storage facilities through its wholly-owned subsidiaries, Consolidated Edison Transmission, LLC (CET Electric) and
Con Edison Gas Pipeline and Storage, LLC (CET Gas). CET Electric owns a 45.7 percent interest in New York
Transco LLC, which owns and has been selected to build additional electric transmission assets in New York. CET
Gas owns, through subsidiaries, a 50 percent interest in Stagecoach Gas Services, LLC, a joint venture that owns
and operates an existing gas pipeline and storage business located in northeastern Pennsylvania and the southern
tier of New York. Con Edison is considering strategic alternatives with respect to its 50 percent interest in
Stagecoach Gas Services, LLC. Also, CET Gas and CECONY own 71.2 percent and 28.8 percent interests,
respectively, in Honeoye Storage Corporation, which operates a gas storage facility in upstate New York. In
addition, CET Gas owns an 11.3 percent interest (that is expected to be reduced to 8.8 percent based on the current
project cost estimate and CET Gas’ previous capping of its cash contributions to the joint venture) in Mountain
Valley Pipeline LLC, a joint venture developing a proposed 300-mile gas transmission project in West Virginia and
Virginia. CET Gas recorded a pre-tax impairment loss of $320 million ($223 million after-tax) for the year ended
December 31, 2020 that reduced the carrying value of its investment in Mountain Valley Pipeline LLC from $662
million to $342 million. See "Investments" in Note A to the financial statements in Item 8 and “Con Edison
Transmission,” below. Con Edison Transmission, Inc., together with CET Electric and CET Gas, are referred to in
this report as Con Edison Transmission.
Utility Regulation
State Utility Regulation
Regulators
The Utilities are subject to regulation by the NYSPSC, that under the New York Public Service Law, is authorized to
set the terms of service and the rates the Utilities charge for providing service in New York. See “Rate Plans,” below
and in Note B to the financial statements in Item 8. The NYSPSC also approves the issuance of the Utilities’
securities and transactions between the Utilities and Con Edison and its other subsidiaries. See “Capital
Resources,” below and Note T to the financial statements in Item 8. The NYSPSC exercises jurisdiction over the
siting of electric transmission lines in New York State (see “Con Edison Transmission,” below) and approves
mergers or other business combinations involving New York utilities.
In addition, under the New York Public Service Law, the NYSPSC has the authority to (i) impose penalties on New
York utilities, which could be material, for violating state utility laws and regulations and its orders; (ii) review, at least
every five years, an electric utility’s capability to provide safe, adequate and reliable service, order the utility to
comply with additional and more stringent terms of service than existed prior to the review, assess the continued
operation of the utility as the provider of electric service in its service territory and propose, and act upon, such
measures as are necessary to ensure safe and adequate service; and (iii) based on findings of repeated violations
of the New York Public Service Law or rules or regulations adopted thereto that demonstrate a failure of a
combination gas and electric utility to continue to provide safe and adequate service, revoke or modify an operating
certificate issued to the utility by the NYSPSC (following consideration of certain factors, including public interest
and standards deemed necessary by the NYSPSC to ensure continuity of service, and due process). See "Risk
Factors" in Item 1A and “Other Regulatory Matters” and "COVID-19 Regulatory Matters" in Note B to the financial
statements in Item 8.
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CON EDISON ANNUAL REPORT 2020
17
In January 2021, Governor Cuomo proposed legislation that, if enacted, would impact New York utilities, including
CECONY and O&R, and that would establish an automatic moratorium on utility disconnections for residential and
small business customers during certain states of emergency. See "Risk Factors" in Item 1A and “Other Regulatory
Matters” in Note B to the financial statements in Item 8. O&R’s New Jersey subsidiary, RECO, is subject to
regulation by the New Jersey Board of Public Utilities (NJBPU). The NYSPSC, together with the NJBPU, are
referred to herein as state utility regulators.
New York Utility Industry
Restructuring in the 1990s
In the 1990s, the NYSPSC restructured the electric utility industry in the state. In accordance with NYSPSC orders,
the Utilities sold all of their electric generating facilities other than those that also produce steam for CECONY’s
steam business (see "Electric Operations – Electric Facilities," below) and provided all of their customers the choice
to buy electricity or gas from the Utilities or other suppliers (see "Electric Operations – Electric Sales and Deliveries"
and "Gas Operations – Gas Sales and Deliveries," below). In 2020, 60 percent of the electricity and 35 percent of
the gas CECONY delivered to its customers, and 52 percent of the electricity and 34 percent of the gas O&R
delivered to its customers, was purchased by the customers from other suppliers. In addition, the Utilities no longer
control and operate their bulk power electric transmission facilities. See “New York Independent System Operator
(NYISO),” below.
Following industry restructuring, there were several utility mergers as a result of which substantially all of the electric
and gas delivery service in New York State is now provided by one of five investor-owned utility companies – Con
Edison, National Grid plc, Avangrid, Inc. (an affiliate of Iberdrola, S.A.), National Fuel Gas Company or CH Energy
Group, Inc. (a subsidiary of Fortis Inc.) – or one of two state authorities – New York Power Authority (NYPA) or Long
Island Power Authority.
Rate Plans
Investor-owned utilities in the United States provide delivery service to customers according to the terms of tariffs
approved by the appropriate state utility regulator. The tariffs include schedules of rates for service that limit the
rates charged by the utilities to amounts that the utilities recover from their customers costs approved by the
regulator, including capital costs, of providing service to customers as defined by the tariff. The tariffs implement rate
plans adopted by state utility regulators in rate orders issued at the conclusion of rate proceedings. The utilities’
earnings depend on the limits on rates authorized in, and the other provisions of, their rate plans and their ability to
operate their businesses in a manner consistent with such rate plans.
The utilities’ rate plans cover specified periods, but rates determined pursuant to a plan generally continue in effect
until a new rate plan is approved by the state utility regulator. In New York, either the utility or the NYSPSC can
commence a proceeding for a new rate plan, and a new rate plan filed by the utility will generally take effect
automatically in approximately 11 months unless prior to such time the NYSPSC approves a rate plan.
In each rate proceeding, rates are determined by the state utility regulator following the submission by the utility of
testimony and supporting information, which are subject to review by the staff of the regulator. Other parties with an
interest in the proceeding can also review the utility’s proposal and become involved in the rate proceeding. In New
York State, the review process is overseen by an administrative law judge who is employed by the NYSPSC. After
an administrative law judge issues a recommended decision that generally considers the interests of the utility, the
regulatory staff, other parties and legal requisites, the regulator will issue a rate order. The utility and the regulator’s
staff and interested parties may enter jointly into a proposed settlement agreement prior to the completion of this
administrative process, in which case the agreement could be approved by the regulator with or without
modification.
For each rate plan, the revenues needed to provide the utility a return on invested capital is determined by
multiplying the utilities’ rate base by the pre-tax weighted average cost of capital determined in the rate plan. In
general, rate base, as reflected in a utility's rate plans, is the sum of the utility’s net plant, working capital and certain
regulatory assets less deferred taxes and certain regulatory liabilities. The NYSPSC uses a forecast of the average
rate base for the year that new rates would be in effect (rate year). The NJBPU uses the rate base balances that
exist at the end of the historical 12-month period on which base rates are set. The capital structure used in the
weighted average cost of capital is determined using actual and forecast data for the same time periods as rate
base. The costs of long-term debt, customer deposits and the allowed return on common equity represent a
combination of actual and forecast financing information. The allowed return on common equity is determined by
each state’s respective utility regulator. The NYSPSC’s current methodology for determining the allowed return on
common equity assigns a one-third weight to an estimate determined from a capital asset pricing model applied to a
peer group of utility companies and a two-thirds weight to an estimate determined from a dividend discount model
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CON EDISON ANNUAL REPORT 2020
using stock prices and dividend forecasts for a peer group of utility companies. Both methodologies employ market
measurements of equity capital to estimate returns rather than the accounting measurements to which such
estimates are applied in setting rates.
Pursuant to the Utilities’ rate plans, there generally can be no change to the rates charged to customers during the
respective terms of the rate plans other than specified adjustments provided for in the rate plans.
For information about the Utilities’ rate plans, see Note B to the financial statements in Item 8.
Liability for Service Interruptions
The tariff provisions under which CECONY provides electric, gas and steam service, and O&R provides electric and
gas service, limit each company’s liability to pay for damages resulting from service interruptions to circumstances
resulting from its gross negligence or willful misconduct. Under RECO's tariff provisions for electric service, the
company is not liable for interruptions that are due to causes beyond its control.
CECONY’s tariff for electric service also provides for reimbursement to electric customers for spoilage losses
resulting from service interruptions in certain circumstances. In general, the company is obligated to reimburse
affected residential and commercial customers for food spoilage of up to approximately $500 and $10,000,
respectively, and reimburse affected residential customers for prescription medicine spoilage losses without
limitation on amount per claim. The company’s maximum aggregate liability for such reimbursement for an incident
is $15 million. The company is not required to provide reimbursement to electric customers for outages attributable
to generation or transmission system facilities or events beyond its control, such as storms, provided the company
makes reasonable efforts to restore service as soon as practicable.
New York electric utilities are required to provide credits to customers who are without electric service for more than
three days. The credit to a customer would equal the portion of the monthly customer charge attributable to the
period the customer was without service. If an extraordinary event occurs, the NYSPSC may direct New York gas
utilities to implement the same policies.
The NYSPSC has approved a scorecard for use as a guide to assess electric utility performance in restoring electric
service during outages that result from a major storm. The scorecard could also be applied by the NYSPSC for
other outages or actions. The scorecard includes performance metrics in categories for preparation, operations
response, and communications.
Each New York electric utility is required to submit to the NYSPSC annually an emergency response plan for the
reasonably prompt restoration of service in the case of widespread outages in the utility’s service territory due to
storms or other events beyond the control of the utility. If, after evidentiary hearings or other investigatory
proceedings, the NYSPSC finds that the utility failed to implement its plan reasonably, the NYSPSC may deny
recovery of any part of the service restoration costs caused by such failure. In May 2020, the NYSPSC approved
emergency response plans for CECONY and O&R. In December 2020, CECONY and O&R each submitted updated
plans for 2021.
Generic Proceedings
The NYSPSC from time to time conducts “generic” proceedings to consider issues relating to all electric and gas
utilities operating in New York State. Proceedings include the REV proceeding and related implementation
proceedings, and proceedings relating to data access, retail access, gas planning, energy efficiency and renewable
energy programs and climate change risk disclosure. The Utilities are typically active participants in such
proceedings.
CON EDISON ANNUAL REPORT 2020
19
Federal Utility Regulation
The Federal Energy Regulatory Commission (FERC), among other things, regulates the transmission and
wholesale sales of electricity in interstate commerce and the transmission and sale of natural gas for resale in
interstate commerce. In addition, the FERC has the authority to impose penalties, which could be substantial,
including penalties for the violation of reliability and cyber security rules. Certain activities of the Utilities, the Clean
Energy Businesses and Con Edison Transmission are subject to the jurisdiction of the FERC. The Utilities are
subject to regulation by the FERC with respect to electric transmission rates and to regulation by the NYSPSC with
respect to electric and gas retail commodity sales and local delivery service. As a matter of practice, the NYSPSC
has approved delivery service rates for the Utilities that include both transmission and distribution costs. Wholesale
energy and capacity products sold by the Clean Energy Businesses to the regional electric markets are subject to
FERC jurisdiction as defined by the independent system operator tariffs. The electric and gas transmission projects
in which CET Electric and CET Gas invest are also subject to regulation by the FERC. See “Con Edison
Transmission,” below.
New York Independent System Operator (NYISO)
The NYISO is a not-for-profit organization that controls and directs the operation of most of the electric transmission
facilities in New York State, including those of the Utilities, as an integrated system. It also administers wholesale
markets for electricity in New York State and facilitates the construction of new transmission it considers necessary
to meet identified reliability, economic or public policy needs. The New York State Reliability Council (NYSRC)
promulgates reliability standards subject to FERC oversight, and the NYISO has agreed to comply with those
standards. Pursuant to a requirement that is set annually by the NYSRC, the NYISO requires that entities supplying
electricity to customers in New York State have generating capacity (owned, procured through the NYISO capacity
markets or contracted for) in an amount equal to the peak demand of their customers plus the applicable reserve
margin. In addition, the NYISO has determined that entities that serve customers in New York City must procure
sufficient capacity from resources that are electrically located in New York City to cover a substantial percentage of
the peak demands of their New York City customers. The NYISO also requires entities that serve customers in the
Lower Hudson Valley and New York City customers that are served through the Lower Hudson Valley to procure
sufficient capacity from resources electrically located in the Lower Hudson Valley. These requirements apply both to
regulated utilities such as CECONY and O&R for the customers they supply under regulated tariffs and to other load
serving entities that supply customers on market terms. RECO, O&R’s New Jersey subsidiary, provides electric
service in a portion of its service territory that has a different independent system operator – PJM Interconnection
LLC (PJM). See “CECONY – Electric Operations – Electric Supply” and “O&R – Electric Operations – Electric
Supply,” below.
Competition
The subset of distributed energy resources (DER) that produce electricity are collectively referred to as distributed
generation (DG). DG includes solar energy production facilities, fuel cells, and micro-turbines, and provides an
alternative source of electricity for the Utilities’ electric delivery customers. Energy storage, though not a form of DG,
is also a source of electricity for the Utilities’ electric delivery customers. Typically, customers with DG remain
connected to the utility’s delivery system and pay a different rate. Gas delivery customers have electricity, oil and
propane as alternatives, and steam customers have electricity, oil and natural gas as alternative sources for heating
and cooling their buildings. Micro-grids and community-based micro-grids enable DG to serve multiple locations and
multiple customers. Demand reduction and energy efficiency investments provide ways for energy consumers within
the Utilities’ service areas to lower their energy usage. The Companies expect DERs and electric alternatives to gas
and steam, to increase, and for gas and steam usage to decrease, as the Climate Leadership and Community
Protection Act enacted by New York State and the Climate Mobilization Act enacted by New York City in 2019
continue to be implemented. See “Environmental Matters – Clean Energy Future,” below. CECONY’s smart
solutions for gas customers include energy efficiency and heating electrification programs. See “CECONY- Gas
Operations - Gas Peak Demand,” below. The following table shows the aggregate capacities of the DG projects
connected to the Utilities’ distribution systems at the end of the last five years:
20
CON EDISON ANNUAL REPORT 2020
Technology
CECONY
O&R
Total MW, except project number
2016
2017
2018
2019
2020
2016
2017
2018
2019
2020
Internal-combustion engines
104
108
110
114
129
Photovoltaic solar
Battery energy storage
Gas turbines
Micro turbines
Fuel cells
Steam turbines
Landfill
135
178
226
276
323
—
40
10
9
4
—
—
48
14
12
6
—
—
48
17
13
6
—
8
48
18
20
6
—
13
53
21
30
6
—
2
63
—
20
1
—
—
2
2
75
—
20
1
—
—
2
2
96
—
20
1
—
—
2
3
3
121
154
1
20
1
—
—
2
6
20
1
—
—
2
Total distribution-level DG
302
366
420
490
575
88
100
121
148
186
Number of DG projects
12,928 18,090 23,942 30,539 36,194 5,409 6,537 7,566 8,687 9,643
The Clean Energy Businesses participate in competitive renewable and sustainable energy infrastructure projects
and provide energy-related products and services that are subject to different risks than those found in the
businesses of the Utilities. See "Clean Energy Businesses," below. Con Edison Transmission invests in electric
transmission facilities and holds investments in gas pipeline and storage facilities, the current and prospective
customers of which may have competitive alternatives. See "Con Edison Transmission," below.
The Utilities do not consider it reasonably likely that another company would be authorized to provide utility delivery
service of electricity, natural gas or steam where the company already provides service. Any such other company
would need to obtain NYSPSC consent, satisfy applicable local requirements, install facilities to provide the service,
meet applicable services standards and charge customers comparable taxes and other fees and costs imposed on
the service. A new delivery company would also be subject to extensive ongoing regulation by the NYSPSC. See
“Utility Regulation – State Utility Regulation – Regulators,” above, "The Companies Are Extensively Regulated And
Are Subject To Substantial Penalties" in Item 1A and “Other Regulatory Matters” in Note B to the financial
statements in Item 8.
The Utilities
CECONY
CECONY, incorporated in New York State in 1884, is a subsidiary of Con Edison and has no significant subsidiaries
of its own. Its principal business segments are its regulated electric, gas and steam businesses.
For a discussion of the company’s operating revenues and operating income for each segment, see “Results of
Operations” in Item 7. For additional information about the segments, see Note O to the financial statements in
Item 8.
Electric Operations
Electric Facilities
CECONY’s capitalized costs for utility plant, net of accumulated depreciation, for distribution facilities were $20,366
million and $19,602 million at December 31, 2020 and 2019, respectively. For its transmission facilities, the costs for
utility plant, net of accumulated depreciation, were $3,496 million and $3,380 million at December 31, 2020 and
2019, respectively, and for its portion of the steam-electric generation facilities, the costs for utility plant, net of
accumulated depreciation, were $572 million and $591 million, at December 31, 2020 and 2019, respectively. See
"CECONY – Steam Operations – Steam Facilities," below.
Distribution Facilities
CECONY owns 62 area distribution substations and various distribution facilities located throughout New York City
and Westchester County. At December 31, 2020, the company’s distribution system had a transformer capacity of
33,027 MVA, with 37,119 miles of overhead distribution lines and 98,404 miles of underground distribution lines. The
underground distribution lines represent the single longest underground electric delivery system in the
United States.
CON EDISON ANNUAL REPORT 2020
21
Transmission Facilities
CECONY’s transmission facilities are located in New York City and Westchester, Orange, Rockland, Putnam and
Dutchess counties in New York State. At December 31, 2020, the company owned or jointly owned 569 miles of
overhead circuits operating at 138, 230, 345 and 500 kV and 755 miles of underground circuits operating at 69, 138
and 345 kV. The company’s 40 transmission substations and 62 area stations are supplied by circuits operated at
69 kV and above. For information about transmission projects to address, among other things, reliability concerns
associated with the scheduled closure of the Indian Point Energy Center (which is owned by Entergy Corporation
subsidiaries) see “CECONY – Electric Operations – Electric Supply” and “Con Edison Transmission,” below.
CECONY’s transmission facilities interconnect with those of National Grid, Central Hudson Gas & Electric
Corporation, O&R, New York State Electric & Gas, Connecticut Light & Power Company, Long Island Power
Authority, NYPA and Public Service Electric and Gas Company.
Generating Facilities
CECONY’s electric generating facilities consist of plants located in Manhattan whose primary purpose is to produce
steam for the company's steam business. The facilities have an aggregate capacity of 679 MW. The company
expects to have sufficient amounts of gas and fuel oil available in 2021 for use in these facilities.
Electric Sales and Deliveries
CECONY delivers electricity to its full-service customers who purchase electricity from the company. The company
also delivers electricity to its customers who choose to purchase electricity from other suppliers (retail choice
program). In addition, the company delivers electricity to state and municipal customers of NYPA.
The company charges all customers in its service area for the delivery of electricity. The company generally
recovers, on a current basis, the cost of the electricity that it buys and then sells to its full-service customers. It does
not make any margin or profit on the electricity it sells. CECONY’s electric revenues are subject to a revenue
decoupling mechanism. As a result, its electric delivery revenues are generally not affected by changes in delivery
volumes from levels assumed when rates were approved. CECONY’s electric sales and deliveries for the last five
years were:
Electric Energy Delivered (millions of kWh)
CECONY full service customers
Delivery service for retail choice customers
Delivery service to NYPA customers and others
Total Deliveries in Franchise Area
Electric Energy Delivered ($ in millions)
CECONY full service customers
Delivery service for retail choice customers
Delivery service to NYPA customers and others
Other operating revenues
Total Deliveries in Franchise Area
Average Revenue per kWh Sold (Cents)
Residential
Commercial and industrial
Year Ended December 31,
2016
2017
2018
2019
2020
19,886
26,813
10,046
56,745
$4,404
2,768
610
324
19,227
26,136
9,955
55,318
$4,348
2,712
623
289
20,452
26,266
10,119
56,837
$4,706
2,624
652
(11)
20,579
24,754
9,821
55,154
$4,535
2,470
644
413
20,544
22,000
9,027
51,571
$4,804
2,391
638
270
$8,106
$7,972
$7,971
$8,062
$8,103
24.9
19.1
25.3
19.7
26.4
19.3
25.3
18.6
26.1
20.2
For further discussion of the company’s electric operating revenues and its electric results, see “Results of
Operations” in Item 7. For additional segment information, see Note O to the financial statements in Item 8.
Electric Peak Demand
The electric peak demand in CECONY’s service area occurs during the summer air conditioning season. The
weather during the summer of 2020 was cooler than design weather conditions. CECONY’s 2020 service area
actual hourly peak demand was 11,740 MW, which occurred on July 28, 2020. “Design weather conditions” for the
electric system is a standard to which the actual hourly peak demand is adjusted for evaluation and planning
purposes. Since NYISO-invoked demand reduction programs can only be called upon under specific circumstances,
design weather conditions do not include these programs’ potential impact. However, the CECONY forecasted
hourly peak demand at design conditions does include the impact of certain demand reduction programs. The
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CON EDISON ANNUAL REPORT 2020
company estimates that, under design weather conditions, the 2021 service area hourly peak demand will be
12,880 MW. As of January 2021, the company forecasts an average annual increase in hourly electric peak demand
in its service area at design weather conditions over the next five years to be approximately 0.8 percent per year,
including the effect of certain electric energy efficiency programs. The five-year forecast in peak demand is used by
the company for electric supply planning purposes.
Electric Supply
Most of the electricity sold by CECONY to its full-service customers in 2020 was purchased under firm power
contracts or through the wholesale electricity market administered by the NYISO. The company expects that these
resources will again be adequate to meet the requirements of its customers in 2021. The company plans to meet its
continuing obligation to supply electricity to its customers through a combination of electricity purchased under
contracts, purchased through the NYISO’s wholesale electricity market, or generated from its electricity generating
facilities. For information about the company’s contracts for electric generating capacity, see Notes I and P to the
financial statements in Item 8. To reduce the volatility of its customers’ electric energy costs, the company has
contracts to purchase electric energy and enters into derivative transactions to hedge the costs of a portion of its
expected purchases under these contracts and through the NYISO’s wholesale electricity market.
CECONY owns generating stations in New York City associated primarily with its steam system. As of
December 31, 2020, the generating stations had a combined electric capacity of approximately 679 MW, based on
2020 summer test ratings. For information about electric generating capacity owned by the company, see “Electric
Operations – Electric Facilities – Generating Facilities,” above.
In general, the Utilities recover their costs of purchasing power for full service customers, including the cost of
hedging purchase prices, pursuant to rate provisions approved by the state public utility regulatory authority having
jurisdiction. See “Financial and Commodity Market Risks – Commodity Price Risk” in Item 7 and “Recoverable
Energy Costs” in Note A to the financial statements in Item 8.
CECONY monitors the adequacy of the electric capacity resources and related developments in its service area,
and works with other parties on long-term resource adequacy within the framework of the NYISO reliability planning
process. The NYISO process includes obligations on transmission owners (such as CECONY) to construct facilities
that may be needed for system reliability if the market does not solve a reliability need identified by the NYISO. See
“New York Independent System Operator,” above. In a July 1998 order, the NYSPSC indicated that it “agree(s)
generally that CECONY need not plan on constructing new generation as the competitive market develops,” but
considers “overly broad” and did not adopt CECONY’s request for a declaration that, solely with respect to providing
generating capacity, it will no longer be required to engage in long-range planning to meet potential demand and, in
particular, that it will no longer have the obligation to construct new generating facilities, regardless of the market
price of capacity.
In April 2020, one of the two nuclear reactors at the Indian Point Energy Center (which is owned by Entergy
Corporation subsidiaries) was shut down, while the other is scheduled to be closed in April 2021. The NYISO
indicated that these retirements would not cause a reliability need if three units finalize construction and enter
service. All three of the units have been placed into service. Two of the units, Bayonne Energy Center II Uprate
(Zone J, 120 MW) and CPV Valley Energy Center (Zone G, 678 MW) entered service in 2018 (with the latter in
litigation regarding its air permit) and the third unit, Cricket Valley Energy Center (Zone G, 1,020 MW), fully entered
service in early 2020 before the retirement of the Indian Point unit.
In 2019, the New York State Department of Environmental Conservation (NYSDEC) issued regulations that may
require the retirement or seasonal unavailability of fossil-fueled electric generating units owned by CECONY and
others in New York City. The NYSDEC rule limits nitrous oxides (NOx) 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 rule will require affected units
(approximately 1,400 MW in CECONY's service territory, of which 65 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 the local transmission
system reliability needs and expects to submit a plan to the NYISO to address the bulk transmission system
reliability needs in the first half of 2021. The local transmission projects were also submitted to the NYSPSC in
November 2020 as part of the New York utilities’ Transmission and Distribution Investment Working Group Report,
due to the benefits they provide towards meeting New York State’s clean energy goals. CECONY’s implementation
of all or part of its plans will be dependent upon the availability of market solutions and/or NYISO’s selection of
CON EDISON ANNUAL REPORT 2020
23
regulated solutions proposed by others. CECONY estimates that the costs of implementing plans to solve the local
reliability needs, if required, to be approximately $780 million over 4 years and is unable to estimate the amount to
implement plans to solve the bulk reliability needs, if required. In December 2020, CECONY filed a petition with the
NYSPSC to recover the potential costs to solve both requirements and expect such costs to be recovered, including
a full rate of return, in rates from customers.
Gas Operations
Gas Facilities
CECONY’s capitalized costs for utility plant, net of accumulated depreciation, for gas facilities, which are primarily
distribution facilities, were $8,522 million and $7,961 million at December 31, 2020 and 2019, respectively.
Natural gas is delivered by pipeline to CECONY at various points in or near its service territory and is distributed to
customers by the company through an estimated 4,341 miles of mains and 377,490 service lines. The company
owns a natural gas liquefaction facility and storage tank at its Astoria property in Queens, New York. The plant can
store 1,062 MDt of which a maximum of about 240 MDt can be withdrawn per day. The company has about 1,226
MDt of additional natural gas storage capacity at a field in upstate New York, owned and operated by Honeoye
Storage Corporation, a corporation 71.2 percent owned by CET Gas and 28.8 percent owned by CECONY.
Gas Sales and Deliveries
The company generally recovers the cost of the gas that it buys and then sells to its full-service customers. It does
not make any margin or profit on the gas it sells. CECONY’s gas revenues are subject to a weather normalization
clause and a revenue decoupling mechanism. As a result, its gas delivery revenues are generally not affected by
changes in delivery volumes from levels assumed when rates were approved. CECONY’s gas sales and deliveries
for the last five years were:
Gas Delivered (MDt)
Firm sales
Full service
Firm transportation of customer-owned gas
Total Firm Sales
Interruptible sales (a)
Total Gas Delivered to CECONY Customers
Transportation of customer-owned gas
NYPA
Other (mainly generating plants and interruptible transportation)
Off-system sales
Total Sales
Gas Delivered ($ in millions)
Firm sales
Full service
Firm transportation of customer-owned gas
Total Firm Sales
Interruptible sales
Total Gas Delivered to CECONY Customers
Transportation of customer-owned gas
NYPA
Other (mainly generating plants and interruptible transportation)
Off-system sales
Other operating revenues (mainly regulatory amortizations)
Total Sales
Average Revenue per Dt Sold
Residential
General
Year Ended December 31,
2016
2017
2018
2019
2020
75,892
68,442
144,334
8,957
153,291
83,005
71,353
154,358
7,553
161,911
92,305
82,472
87,637
81,710
78,515
76,614
174,777
169,347
155,129
7,351
9,903
8,482
182,128
179,250
163,611
43,101
37,033
34,079
39,643
41,577
109,000
—
83,117
55
93,346
195
72,712
12
70,537
12
305,392
282,116
309,748
291,617
275,737
$933
426
1,359
34
1,393
2
57
—
56
$1,508
$13.96
$9.47
$1,136
$1,356
$1,327
$1,229
524
1,660
35
1,695
2
56
—
148
$1,901
$15.35
$10.86
595
1,951
40
1,991
2
57
—
28
$2,078
$16.71
$11.31
593
1,920
42
1,962
2
54
—
114
$2,132
$17.33
$11.55
649
1,878
27
1,905
2
55
—
74
$2,036
$18.59
$10.77
(a)
Includes 4,708, 3,816, 3,326, 5,484 and 3,510 MDt for 2016, 2017, 2018, 2019 and 2020, respectively, which are also reflected in firm
transportation and other.
24
CON EDISON ANNUAL REPORT 2020
For further discussion of the company’s gas operating revenues and its gas results, see “Results of Operations” in
Item 7. For additional segment information, see Note O to the financial statements in Item 8.
Gas Peak Demand
The gas actual peak day demand for firm sales customers in CECONY’s service area occurs during the winter
heating season and during the winter of 2020/2021 (through January 31, 2021) occurred on January 29, 2021 when
the firm sales customers' demand reached approximately 1,209 MDt. “Design weather conditions” for the gas
system is a standard to which the actual peak demand is adjusted for evaluation and planning purposes. The
company estimates that, under design weather conditions, the 2021/2022 service area peak day demand for firm
sales customers will be 1,692 MDt. The forecasted peak day demand for firm sales customers at design conditions
does not include gas used by interruptible gas customers including electric and steam generating stations. As of
January 2021, the company forecasts an average annual growth of the gas peak day demand for firm sales
customers over the next five years at design conditions to be approximately 1.4 percent in its service area, including
the effect of certain gas energy efficiency programs and the temporary moratorium described below. The five-year
forecast in peak demand is used by the company for gas supply planning purposes.
In March 2019, due to gas supply constraints, CECONY established a temporary moratorium on new applications
for firm gas service in most of Westchester County. In July 2020, CECONY filed a gas planning analysis with the
NYSPSC that stated the moratorium could be lifted when increased pipeline capacity is achieved upon completion
of the Tennessee pipeline’s 300L East project or peak demand is reduced through efficiency and other demand side
reductions to a level that would enable the company to lift the moratorium. Assuming timely regulatory approvals,
the Tennessee pipeline project is expected to be completed by November 2023. CECONY's gas planning analysis
also stated that the company is monitoring gas supply constraint in the New York City portion of its service territory.
Gas Supply
CECONY and O&R have combined their gas requirements, and contracts to meet those requirements, into a single
portfolio. The combined portfolio is administered by, and related management services are provided by, CECONY
(for itself and as agent for O&R) and costs are allocated between the Utilities in accordance with provisions
approved by the NYSPSC. See Note T to the financial statements in Item 8.
Charges from suppliers for the firm purchase of gas, which are based on formulas or indexes or are subject to
negotiation, are generally designed to approximate market prices. The Utilities have contracts with interstate
pipeline companies for the purchase of firm transportation from upstream points where gas has been purchased to
the Utilities’ distribution systems, and for upstream storage services. Charges under these transportation and
storage contracts are approved by the FERC. The Utilities are required to pay certain fixed charges under the
supply, transportation and storage contracts whether or not the contracted capacity is actually used. These fixed
charges amounted to approximately $347 million in 2020, including $307 million for CECONY. See “Contractual
Obligations,” below. At December 31, 2020, the contracts were for various terms extending to 2025 for supply and
2043 for transportation and storage. During 2020, CECONY entered into three new transportation and storage
contracts. In addition, the Utilities purchase gas on the spot market and contract for interruptible gas transportation.
See “Recoverable Energy Costs” in Note A, Note Q and Note T to the financial statements in Item 8.
Steam Operations
Steam Facilities
CECONY’s capitalized costs for utility plant, net of accumulated depreciation, for steam facilities, including steam's
portion of the steam-electric generation facilities, were $1,854 million and $1,813 million at December 31, 2020 and
2019, respectively. See "CECONY – Electric Operations – Electric Facilities," above.
CECONY generates steam at one steam-electric generating station and four steam-only generating stations and
distributes steam to its customers through approximately 104 miles of transmission, distribution and service piping.
Steam Sales and Deliveries
CON EDISON ANNUAL REPORT 2020
25
CECONY’s steam sales and deliveries for the last five years were:
Year Ended December 31,
2016
2017
2018
2019
2020
Steam Sold (MMlb)
General
Apartment house
Annual power
Total Steam Delivered to CECONY Customers
Steam Sold ($ in millions)
General
Apartment house
Annual power
Other operating revenues
465
5,792
13,722
19,979
$23
148
378
2
490
5,754
13,166
19,410
$26
158
392
19
Total Steam Delivered to CECONY Customers
Average Revenue per Mlb Sold
$551
$27.48
$595
$29.68
593
6,358
14,811
21,762
$30
174
441
(14)
$631
$29.64
536
5,919
13,340
19,795
$27
160
395
45
445
5,131
10,977
16,553
$23
136
321
28
$627
$29.40
$508
$29.00
For further discussion of the company’s steam operating revenues and its steam results, see “Results of
Operations” in Item 7. For additional segment information, see Note O to the financial statements in Item 8.
Steam Peak Demand and Capacity
The steam actual hourly peak demand in CECONY’s service area occurs during the winter heating season and
during the winter of 2020/2021 (through January 31, 2021) occurred on January 29, 2021 when the actual hourly
demand reached approximately 7.0 MMlb per hour. “Design weather conditions” for the steam system is a standard
to which the actual hourly peak demand is adjusted for evaluation and planning purposes. The company’s estimate
for the winter of 2021/2022 hourly peak demand of its steam customers is about 8.4 MMlb per hour under design
weather conditions. As of January 2021, the company forecasts an average annual decrease in steam hourly peak
demand in its service area at design weather conditions over the next five years to be approximately 0.4 percent.
The five year forecast in peak demand is used by the company for steam asset management purposes.
On December 31, 2020, the steam system was capable of delivering approximately 11.4 MMlb of steam per hour,
and CECONY estimates that the system will have the same capability in the 2021/2022 winter.
Steam Supply
27 percent of the steam produced by CECONY in 2020 was supplied by the company’s steam-only generating
assets; 53 percent was produced by the company’s steam-electric generating assets, where steam and electricity
are primarily cogenerated; and 20 percent was purchased under an agreement with Brooklyn Navy Yard
Cogeneration Partners L.P.
O&R
Electric Operations
Electric Facilities
O&R’s capitalized costs for utility plant, net of accumulated depreciation, for distribution facilities were $1,115 million
and $1,074 million at December 31, 2020 and 2019, respectively. For its transmission facilities, the costs for utility
plant, net of accumulated depreciation, were $290 million and $254 million at December 31, 2020 and 2019,
respectively.
O&R and RECO own, in whole or in part, transmission and distribution facilities which include 533 circuit miles of
transmission lines, 15 transmission substations, 64 distribution substations, 89,673 in-service line transformers,
3,729 pole miles of overhead distribution lines and 2,210 miles of underground distribution lines. O&R’s
transmission system is part of the NYISO system except that portions of RECO’s system are located within the
transmission area controlled by PJM.
Electric Sales and Deliveries
O&R delivers electricity to its full-service customers who purchase electricity from the company. The company also
delivers electricity to its customers who purchase electricity from other suppliers through the company’s retail choice
program.
The company charges all customers in its service area for the delivery of electricity. O&R generally recovers, on a
current basis, the cost of the electricity that it buys and then sells to its full-service customers. It does not make any
26
CON EDISON ANNUAL REPORT 2020
margin or profit on the electricity it sells. O&R’s New York electric revenues (which accounted for 75 percent of
O&R’s electric revenues in 2020) are subject to a revenue decoupling mechanism. As a result, O&R’s New York
electric delivery revenues are generally not affected by changes in delivery volumes from levels assumed when
rates were approved. O&R’s electric sales in New Jersey are not subject to a decoupling mechanism. O&R’s electric
sales and deliveries for the last five years were:
Electric Energy Delivered (millions of kWh)
Total deliveries to O&R full service customers
Delivery service for retail choice customers
Total Deliveries in Franchise Area
Electric Energy Delivered ($ in millions)
Total deliveries to O&R full service customers
Delivery service for retail choice customers
Other operating revenues
Total Deliveries in Franchise Area
Average Revenue Per kWh Sold (Cents)
Residential
Commercial and Industrial
Year Ended December 31,
2016
2017
2018
2019
2020
2,555
3,180
5,735
$426
213
(2)
$637
18.4
14.3
2,435
2,976
5,411
$433
201
8
$642
19.8
15.0
2,643
2,974
5,617
$453
201
(12)
$642
19.1
14.4
2,617
2,885
5,502
$429
191
14
$634
18.2
13.9
2,712
2,622
5,334
$442
186
1
$629
17.8
14.2
For further discussion of the company’s electric operating revenues and its electric results, see “Results of
Operations” in Item 7. For additional segment information, see Note O to the financial statements in Item 8.
Electric Peak Demand
The electric peak demand in O&R’s service area occurs during the summer air conditioning season. The weather
during the summer of 2020 was cooler than design conditions. O&R’s 2020 service area actual hourly peak demand
was 1,430 MW, which occurred on July 27, 2020. “Design weather” for the electric system is a standard to which the
actual hourly peak demand is adjusted for evaluation and planning purposes. Since NYISO-invoked demand
reduction programs can only be called upon under specific circumstances, design weather conditions do not include
these programs’ potential impact. However, the O&R forecasted hourly peak demand at design conditions does
include the impact of certain demand reduction programs. The company estimates that, under design weather
conditions, the 2021 service area peak demand will be 1,530 MW. The company forecasts an average annual
decrease in hourly electric peak demand in its service area at design conditions over the next five years to be
approximately 0.5 percent, including the effect of certain electric energy efficiency programs. The five-year forecast
in peak demand is used by the company for electric supply planning purposes.
Electric Supply
The electricity O&R sold to its full-service customers in 2020 was purchased under firm power contracts or through
the wholesale electricity market. The company expects that these resources will again be adequate to meet the
requirements of its customers in 2021. O&R does not own any electric generating capacity. The company plans to
meet its continuing obligation to supply electricity to its customers through a combination of electricity purchased
under contracts or purchased through the wholesale electricity market. To reduce the volatility of its customers’
electric energy costs, the company has contracts to purchase electric energy and enters into derivative transactions
to hedge the costs of a portion of its expected purchases. For information about the company’s contracts, see Note
P to the financial statements in Item 8.
In general, the Utilities recover their costs of purchasing power for full service customers, including the cost of
hedging purchase prices, pursuant to rate provisions approved by the state public utility regulatory authority having
jurisdiction. See “Financial and Commodity Market Risks – Commodity Price Risk,” in Item 7 and “Recoverable
Energy Costs” in Note A to the financial statements in Item 8. From time to time, certain parties have petitioned the
NYSPSC to review these provisions, the elimination of which could have a material adverse effect on the
Companies’ financial position, results of operations or liquidity.
Gas Operations
Gas Facilities
O&R’s capitalized costs for utility plant, net of accumulated depreciation for gas facilities, which are primarily
distribution facilities, were $684 million and $656 million at December 31, 2020 and 2019, respectively. Natural gas
CON EDISON ANNUAL REPORT 2020
27
is delivered by pipeline to O&R at various points in or near its service territory and is distributed to customers by the
company through an estimated 1,879 miles of mains and 106,701 service lines.
Gas Sales and Deliveries
O&R generally recovers the cost of the gas that it buys and then sells to its full-service customers. It does not make
any margin or profit on the gas it sells. O&R’s gas revenues are subject to a weather normalization clause and to a
revenue decoupling mechanism. As a result, its gas delivery revenues are generally not affected by changes in
delivery volumes from levels assumed when rates were approved. O&R’s gas sales and deliveries for the last five
years were:
Gas Delivered (MDt)
Firm sales
Full service
Firm transportation
Total Firm Sales
Interruptible sales
Total Gas Delivered to O&R Customers
Transportation of customer-owned gas
Sales for resale
Sales to electric generating stations
Off-system sales
Total Sales
Gas Delivered ($ in millions)
Firm sales
Full service
Firm transportation
Total Firm Sales
Interruptible Sales
Total Gas Delivered to O&R Customers
Transportation of customer-owned gas
Sales to electric generating stations
Other operating revenues
Total Sales
Average Revenue Per Dt Sold
Residential
General
Year Ended December 31,
2016
2017
2018
2019
2020
9,723
10,381
20,104
3,853
23,957
867
18
16
10,480
9,873
20,353
3,771
24,124
896
9
6
12,050
9,950
22,000
3,746
25,746
959
1
15
12,537
9,459
21,996
3,668
25,664
914
4
1
11,877
8,271
20,148
3,633
23,781
658
59
19
24,858
25,035
26,721
26,583
24,517
Year Ended December 31,
2016
2017
2018
2019
2020
$99
70
169
3
172
$139
74
213
7
220
—
12
—
12
$184
$232
$166
78
244
6
250
—
(1)
$249
$161
63
224
6
230
—
29
$259
$141
62
203
6
209
—
24
$233
$10.71
$8.17
$13.86
$11.08
$14.22
$11.80
$13.32
$10.68
$12.40
$9.51
For further discussion of the company’s gas operating revenues and its gas results, see “Results of Operations” in
Item 7. For additional segment information, see Note O to the financial statements in Item 8.
Gas Peak Demand
The gas actual peak day demand for firm sales customers in O&R’s service area occurs during the winter heating
season and during the winter of 2020/2021 (through January 31, 2021) occurred on January 29, 2021 when the firm
sales customers' demand reached approximately 181 MDt. “Design Weather” for the gas system is a standard to
which the actual peak demand is adjusted for evaluation and planning purposes. The company estimates that,
under design weather conditions, the 2021/2022 service area peak day demand for firm sales customers will be 232
MDt. The forecasted peak day demand at design conditions does not include gas used by interruptible gas
customers including electric generating stations. The company forecasts an average annual growth of the gas peak
day demand for firm sales customers over the next five years at design conditions to be approximately 0.2 percent
in its service area, including the effect of certain gas energy efficiency programs. The five-year forecast in peak
demand is used by the company for gas supply planning purposes.
28
CON EDISON ANNUAL REPORT 2020
Gas Supply
O&R and CECONY have combined their gas requirements and purchase contracts to meet those requirements into
a single portfolio. See “CECONY – Gas Operations – Gas Supply” above.
CON EDISON ANNUAL REPORT 2020
29
Clean Energy Businesses
The following table provides information about the Clean Energy Businesses' renewable electric production projects
that are in operation and/or in construction at December 31, 2020:
Project Name
Utility Scale
Solar
PJM assets
New England assets
California Solar (e)
Mesquite Solar 1 (e)
Copper Mountain Solar 2 (e)
Copper Mountain Solar 3 (e)
California Solar 2 (e)
Texas Solar 4 (e)
Texas Solar 5 (e)
Texas Solar 7 (e)
California Solar 3 (e)
Upton Solar (e)
California Solar 4 (e)
Copper Mountain Solar 1 (e)
Copper Mountain Solar 4 (e) (f)
Mesquite Solar 2 (e) (f)
Mesquite Solar 3 (e) (f)
Great Valley Solar (e) (f)
Crane Solar
Other
Total Solar
Wind
Broken Bow II (e)
Wind Holdings (e)
Adams Rose Wind (e)
Coram Wind (e)
Other
Total Wind
Total MW (AC) in Operation
Total MW (AC) in Construction (g)
Total MW (AC) Utility Scale
Behind the Meter
Total MW (AC) in Operation
Total MW (AC) in Construction
Total MW Behind the Meter
Generating
Capacity
(MW AC)
Power
Purchase
Agreement
(PPA) Term
(In Years) (a)
Actual/
Expected
In-Service Date
(b)
State PPA Counterparty (c)
(d)
2011/2013
Various
25
20
25
20
20
25
25
25
20
25
20
12
20
18
23
17
12
2011/2017
2012/2013
2013
2013/2015
2014/2015
2014/2016
2014
2015
2016
2016/2017
2017
2017/2018
2018
2018
2018
2018
2018
2020
Various
Various
New Jersey/
Pennsylvania
Massachusetts/
Rhode Island
California
Arizona
Nevada
Nevada
California
Texas
Texas
Texas
California
Texas
California
Nevada
Nevada
Arizona
Arizona
Various
Various
PG&E
PG&E
PG&E
SCPPA
SCE/PG&E
City of San Antonio
City of San Antonio
City of San Antonio
SCE/PG&E
City of Austin
SCE
PG&E
SCE
SCE
WAPA (U.S. Navy)
California MCE/SMUD/PG&E/SCE
Texas
Various
25
2014
Various
Various
7
16
2016
2016
Various
Various
Nebraska
South Dakota/
Montana
Minnesota
California
Various
Vistra
Various
NPPD
NWE/Basin Electric
Dairyland
PG&E
Various
73
24
110
165
150
255
80
40
100
112
110
158
240
58
94
100
150
200
150
26
2,395
75
180
23
102
34
414
2,809
431
3,240
59
11
70
(a) Represents PPA contractual term or remaining term from the date of acquisition.
(b) Represents Actual/Expected In-Service Date or date of acquisition.
(c) PPA Counterparties include: PG&E, Southern California Public Power Authority (SCPPA), Southern California Edison Company (SCE),
Western Area Power Administration (WAPA), Marin Clean Energy (MCE), Sacramento Municipal Utility District (SMUD), Nebraska Public
Power District (NPPD) and NorthWestern Energy (NWE). For information about PG&E’s bankruptcy, see “Long-Lived and Intangible
Assets” in Note A to the financial statements in Item 8.
(d) Solar renewable energy credit hedges are in place, in lieu of power purchase agreements, through 2024.
(e) Project has been pledged as security for project debt financing. See Con Edison's Consolidated Statement of Capitalization in Item 8.
(f) Projects are financed with tax equity. See Note R to the financial statements in Item 8.
(g) Projects in construction are being financed under a variable-rate construction loan facility that matures no later than November 2021. See
Note D to the financial statements in Item 8.
30
CON EDISON ANNUAL REPORT 2020
Renewable Electric Generation
The Clean Energy Businesses develop, own and operate renewable and sustainable energy infrastructure projects.
In December 2018, the Clean Energy Businesses acquired Sempra Solar Holdings, LLC to expand the company's
renewable energy asset portfolio. See Note V to the financial statements in Item 8. The Clean Energy Businesses
focus their efforts on utility scale renewable electric production projects. The output of most of the projects is sold
under long-term power purchase agreements (PPA) with utilities and municipalities. The following table shows the
generating capacity (MW AC) of the Clean Energy Businesses' utility scale renewable electric production projects in
operation at the end of the last five years:
Generating Capacity (MW AC)
Renewable electric production projects
2016
1,098
2017
1,358
2018
2,588
2019
2,628
2020
2,809
Renewable electric volumes produced by utility scale assets for the years ended December 31, 2017, 2018, 2019,
and 2020 were:
Description
Renewable electric production
projects
Solar
Wind
Total
2017
2,158
988
3,146
2018
2,680
1,074
3,754
2019
5,506
1,333
6,839
2020
5,699
1,425
7,124
Millions of kWh Produced
For the Years Ended December 31,
CON EDISON ANNUAL REPORT 2020
31
Energy-Related Products and Services
The Clean Energy Businesses provide services to manage the dispatch, fuel requirements and risk management
activities for 11,114 MW of generating plants and merchant transmission in the northeastern United States owned by
unrelated parties, manage energy supply assets leased from others and provide wholesale hedging and risk
management services to renewable electric production projects owned by their subsidiaries.
The Clean Energy Businesses also provide energy-efficiency services to government and commercial customers.
The services include the design and installation of lighting retrofits, high-efficiency heating, ventilating and air
conditioning equipment and other energy saving technologies.
For information about the Clean Energy Businesses' results, see "Results of Operations" in Item 7 and Note O to
the financial statements in Item 8.
Con Edison Transmission
CET Electric
CET Electric owns a 45.7 percent interest in New York Transco LLC (NY Transco). Affiliates of certain other New
York transmission owners own the remaining interests.
NY Transco's Transmission Owner Transmission Solutions (TOTS) projects were approved by the NYSPSC in
October 2013 in its proceeding to address potential needs that could arise should the Indian Point Energy Center
(which is owned by Entergy Corporation subsidiaries) no longer operate. See “CECONY - Electric Operations -
Electric Supply,” above.
In April 2015, the FERC issued an order granting certain transmission incentives for the NY Transco TOTS projects.
In March 2016, the FERC approved a November 2015 settlement agreement that provides, in relation to the TOTS
projects described above, a 10 percent return on common equity (which is comprised of 9.5 percent base return on
equity plus an additional 50 basis points) and a maximum actual common equity ratio of 53 percent. The revenues
for these TOTS projects costs are collected by the NYISO and allocated across New York State, with 63 percent
allocated to load serving entities in the CECONY and O&R service areas.
In December 2015, the NYSPSC issued an order in its competitive proceeding to select AC transmission projects
that would relieve transmission congestion between upstate and downstate. The NYSPSC determined that there
was a public policy need for new transmission to address congestion and directed the NYISO, under its FERC-
approved public policy planning process, to request developers to submit transmission project proposals for two
segments of the transmission system. In April 2019, the New York Independent System Operator (NYISO) selected
a project that was jointly proposed by National Grid and NY Transco ($600 million estimated cost, excluding certain
interconnection costs that are not yet determined) that would increase transmission capacity by 1,850 MW between
upstate and downstate when combined with another developer’s project that was also selected by the NYISO. The
siting, construction and operation of the projects will require approvals and permits from appropriate governmental
agencies and authorities, including the NYSPSC. The NYISO and National Grid/NY Transco entered into an
agreement for the development and operation of the project, referred to as the New York Energy Solution (NYES)
project, that is scheduled for entry into service by December 2023. In November 2017, FERC approved a
settlement agreement with respect to the National Grid/NY Transco 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. Revenues for the NYES project are collected by the NYISO including 100 percent of
construction work-in-progress, and are allocated across New York State with 84 percent allocated to load serving
entities in the CECONY and O&R service areas.
CET Gas
CET Gas, through its subsidiaries, owns a 50 percent interest in Stagecoach Gas Services LLC (Stagecoach), a
71.2 percent interest in Honeoye Storage Corporation (Honeoye) and an interest, described below, in Mountain
Valley Pipeline LLC (MVP).
Stagecoach is a joint venture with a subsidiary of Crestwood Equity Partners LP (Crestwood) to own, operate and
further develop a gas pipeline and storage business located in northern Pennsylvania and southern New York.
Stagecoach provides services to its customers (including CECONY, see Note T to the financial statements in Item 8)
through its 181 miles of pipe and 41 Bcf of storage capacity. Con Edison is considering strategic alternatives with
respect to its 50 percent interest in Stagecoach Gas Services, LLC. Honeoye, in which CECONY owns the
remaining interest, operates a gas storage facility in upstate New York.
32
CON EDISON ANNUAL REPORT 2020
MVP is a joint venture with four other partners to construct and operate a proposed 300-mile gas transmission
project in West Virginia and Virginia. CET Gas owns an 11.3 percent interest in the joint venture, that is expected to
be reduced to 8.8 percent based on the current project cost estimate and CET Gas’ previous capping of its cash
contributions to the joint venture. CET Gas recorded a pre-tax impairment loss of $320 million ($223 million after-
tax) for the year ended December 31, 2020 that reduced the carrying value of its investment in MVP from $662
million to $342 million. See "Investments - Partial Impairment of Investment in Mountain Valley Pipeline" in Note A to
the financial statements in Item 8
For information about Con Edison Transmission's results, see "Results of Operations" in Item 7 and Note O to the
financial statements in Item 8.
Capital Requirements and Resources
Capital Requirements
The following table contains the Companies’ capital requirements for the years 2018 through 2020 and their current
estimate of amounts for 2021 through 2023:
(Millions of Dollars)
CECONY (a)(b)
Electric
Gas
Steam
Sub-total
O&R
Electric
Gas
Sub-total
Con Edison Transmission
CET Electric
CET Gas
Sub-total
Clean Energy Businesses
Total capital expenditures
Retirement of long-term securities
Con Edison – parent company
CECONY
O&R
Clean Energy Businesses
Total retirement of long-term securities
Total capital requirements
2018
$1,861
1,050
94
3,005
138
67
205
—
248
248
1,791
5,249
Actual
2019
$1,851
1,078
91
3,020
142
61
203
8
197
205
248
3,676
2
1,836
553
475
1,044
122
3,246
159
61
220
2
1
3
616
4,085
3
350
2020
2021
2022
2023
Estimate
$2,080
$2,284
1,126
100
3,510
150
61
211
46
1
47
$2,106
1,014
91
3,211
$2,307
1,056
94
3,457
184
83
267
65
—
65
187
80
267
47
—
47
250
4,018
400
3,943
400
4,171
1,178
640
—
149
1,967
293
—
—
144
437
650
—
—
316
966
55
45
1,938
$7,187
62
—
105
1,195
165
518
$4,871
$4,603
$5,985
$4,380
$5,137
(a) CECONY’s capital expenditures for environmental protection facilities and related studies were $490 million, $507 million and $491 million in
2018, 2019 and 2020, respectively, and are estimated to be $674 million in 2021.
(b) Amounts shown do not include amounts for the energy efficiency, demand reduction and combined heat and power programs.
The Utilities have an ongoing need to make substantial capital investments primarily to maintain the reliability of
their electric, gas and steam delivery systems. Their estimated construction expenditures also reflect programs that
will give customers greater control over their energy usage and bills, help integrate customers' new clean energy
technologies into the Utilities’ electric delivery systems and accelerate the replacement of leak-prone gas
distribution mains and service lines.
Estimated capital expenditures for Con Edison Transmission primarily reflect planned investments in electric
transmission projects. Estimated capital expenditures for the Clean Energy Businesses primarily reflect planned
investments in renewable electric production projects. Actual capital expenditures for Con Edison Transmission and
the Clean Energy Businesses could increase or decrease significantly from the amounts estimated depending on
opportunities.
Contractual Obligations
The following table summarizes the Companies’ material obligations at December 31, 2020 to make payments
pursuant to contracts. Long-term debt, capital lease obligations and other noncurrent liabilities are included on their
CON EDISON ANNUAL REPORT 2020
33
balance sheets. Operating leases and electricity purchase agreements (for which undiscounted future annual
payments are shown) are described in the notes to the financial statements.
Payments Due by Period
Total
1 year
or less
Years
2 & 3
Years
4 & 5
After 5
years
(Millions of Dollars)
Long-term debt (Statement of Capitalization)
CECONY
O&R
Clean Energy Businesses
Parent
Interest on long-term debt (a)
Total long-term debt, including interest
Finance lease obligations (Note J)
CECONY
O&R
Total capital lease obligations
Operating leases (Note J)
CECONY
O&R
Clean Energy Businesses
Total operating leases
Purchase obligations
Electricity power purchase agreements – Utilities (Note I)
CECONY
Energy
Capacity (b)
Total CECONY
O&R
Energy and Capacity (b)
Total electricity and power purchase agreements – Utilities
Natural gas supply, transportation, and storage contracts – Utilities (c)
CECONY
Natural gas supply
Transportation and storage
Total CECONY
O&R
Natural gas supply
Transportation and storage
Total O&R
Total natural gas supply, transportation and storage contracts
Other purchase obligations
CECONY (d)
O&R (d)
Clean Energy Businesses (e)
Total other purchase obligations
$16,965
900
2,578
2,121
17,826
40,390
2
1
3
743
2
573
1,318
1,609
906
2,515
119
2,634
210
4,556
4,766
26
683
709
5,475
6,224
246
164
6,634
$56,454
$640
—
149
1,178
879
2,846
1
—
1
62
1
16
79
92
138
230
63
293
144
399
543
16
59
75
618
1,109
43
106
1,258
$5,095
—
—
460
943
1,693
3,096
$250
—
450
—
1,629
2,329
$16,075
900
1,519
—
13,625
32,119
1
—
1
115
1
35
151
184
174
358
56
414
64
759
823
—
—
—
115
—
35
150
186
107
293
—
293
2
542
544
10
—
80
80
624
—
1
1
451
—
487
938
1,147
487
1,634
—
1,634
—
2,856
2,856
—
432
432
3,288
112
122
945
1,896
145
35
2,076
$6,683
1,332
1,887
51
12
1,395
$4,791
7
11
1,905
$39,885
Total
(a)
(b)
(c)
Includes interest on variable rate debt calculated at rates in effect at December 31, 2020.
Included in these amounts is the cost of minimum quantities of energy that the Utilities are obligated to purchase at both fixed and variable
prices.
Included in these amounts is the cost of minimum quantities of natural gas supply, transportation and storage that the Utilities are obligated
to purchase at both fixed and variable prices.
(d) Amounts shown for other purchase obligations, which reflect capital and operations and maintenance costs incurred by the Utilities in
running their day-to-day operations, were derived from the Utilities’ purchasing system as the difference between the amounts authorized
and the amounts paid (or vouchered to be paid) for each obligation. For many of these obligations, the Utilities are committed to purchase
less than the amount authorized. Payments for the “Other Purchase Obligations” are generally assumed to be made ratably over the term
of the obligations. Long-term Purchase Obligations, which comprises $5,741 million of "Other Purchase Obligations," were derived from the
Utilities' purchasing system by using a method that identifies the remaining purchase obligations. The Utilities believe that unreasonable
effort and expense would be involved to enable them to report their “Other Purchase Obligations” in a different manner.
(e) Amounts represent commitments by the Clean Energy Businesses to purchase minimum quantities of electric energy and capacity,
renewable energy certificates, natural gas, natural gas pipeline capacity, energy efficiency services and construction services. The Clean
34
CON EDISON ANNUAL REPORT 2020
Energy Businesses have also entered into power purchase agreements for the sale of power from their renewable electric production
projects, provisions of which provide for penalties to be paid by the Clean Energy Businesses in the event certain minimum production
quantities are not met. The future minimum production quantities and the amount of the penalties, if any, are not estimable and are not
included in the amounts shown on the table.
The Companies’ commitments to make payments in addition to these contractual commitments include their other
liabilities reflected on their balance sheets, any funding obligations for their pension and other postretirement benefit
plans, financial hedging activities, their collective bargaining agreements and Con Edison’s and the Clean Energy
Business' guarantees of certain obligations. See Notes E, F, P and “Guarantees” in Note H to the financial
statements in Item 8.
Capital Resources
Con Edison is a holding company that operates only through its subsidiaries and has no material assets other than
its interests in its subsidiaries. Con Edison finances its capital requirements primarily through internally-generated
funds, the sale of its common shares or external borrowings. Con Edison’s ability to make payments on external
borrowings and dividends on its common shares depends on receipt of dividends from its subsidiaries, proceeds
from the sale of additional common shares or its interests in its subsidiaries or additional external borrowings. See
"Con Edison's Ability To Pay Dividends Or Interest Depends On Dividends From Its Subsidiaries" in Item 1A and
Note T to the financial statements in Item 8.
For information about restrictions on the payment of dividends by the Utilities and significant debt covenants, see
Note C to the financial statements in Item 8.
For information on the Companies’ commercial paper program, revolving credit agreements with banks and on Con
Edison's term loan and the construction loan of a subsidiary of the Clean Energy Businesses, see Note D to the
financial statements in Item 8.
The Companies require access to the capital markets to fund capital requirements that are substantially in excess of
available internally-generated funds. See “Capital Requirements,” above and "The Companies Require Access To
Capital Markets to Satisfy Funding Requirements” in Item 1A. Each of the Companies believes that it will continue
to be able to access capital, although capital market conditions may affect the timing and cost of the Companies’
financing activities. The Companies monitor the availability and costs of various forms of capital, and will seek to
issue Con Edison common stock and other securities when it is necessary or advantageous to do so. See
“Coronavirus Disease 2019 (COVID-19) Impacts – Liquidity and Financing” in Item 7. For information about the
Companies’ long-term debt and short-term borrowing, see Notes C and D to the financial statements in Item 8.
The Utilities finance their operations, capital requirements and payment of dividends to Con Edison from internally-
generated funds, contributions of equity capital from Con Edison, if any, and external borrowings. See "Liquidity and
Capital Resources" in Item 7.
Con Edison plans to meet its capital requirements for 2021 through 2023, through internally-generated funds and
the issuance of long-term debt and common equity. See “Capital Requirements," above in Item 1. The company's
plans include the issuance of between $1,900 million and $2,600 million of long-term debt, including for maturing
securities, primarily at the Utilities, in 2021 and approximately $1,400 million in aggregate of long-term debt at the
Utilities during 2022 and 2023. The planned debt issuance is in addition to the issuance of long-term debt secured
by the Clean Energy Businesses’ renewable electric production projects. The company's plans also include the
issuance of up to $800 million of common equity in 2021 and approximately $700 million in aggregate of common
equity during 2022 and 2023, in addition to equity under its dividend reinvestment, employee stock purchase and
long-term incentive plans.
In 2019, the NYSPSC authorized CECONY, through 2022, to issue up to $5,600 million of debt securities ($3,500
million of which the company had issued as of December 31, 2020). In 2020, the NYSPSC authorized O&R, through
2023, to issue up to $165 million of debt securities ($75 million of which the company had issued as of
December 31, 2020). The NYSPSC also authorized CECONY and O&R for such periods to issue debt securities to
refund existing debt securities of up to $2,500 million and $125 million, respectively. As of December 31, 2020, the
Utilities had not refunded any securities pursuant to these authorizations.
The Clean Energy Businesses have financed their operations and capital requirements primarily with capital
contributions and borrowings from Con Edison, internally-generated funds and external borrowings. See Con
Edison's Consolidated Statement of Capitalization in Item 8 and Note P to the financial statements in Item 8. In
February 2021, a subsidiary of the Clean Energy Businesses borrowed $250 million at a variable-rate, due 2028,
CON EDISON ANNUAL REPORT 2020
35
secured by equity interests in solar electric production projects. The company has entered into fixed-rate interest
rate swaps in connection with this borrowing.
Con Edison Transmission has financed its operations and capital requirements primarily with capital contributions
and borrowings from Con Edison and internally-generated funds. See "Liquidity and Capital Resources" in Item 7.
For each of the Companies, the common equity ratio for the last five years was:
Con Edison
CECONY
Common Equity Ratio
(Percent of total capitalization)
2016
49.3
49.5
2017
51.1
50.8
2018
49.0
48.6
2019
49.6
49.2
2020
48.3
47.9
The credit ratings assigned by Moody’s, S&P and Fitch to the senior unsecured debt and commercial paper of Con
Edison, CECONY and O&R are as follows:
Con Edison
Senior Unsecured Debt
Commercial Paper
CECONY
Senior Unsecured Debt
Commercial Paper
O&R
Senior Unsecured Debt
Commercial Paper
Moody's
Baa2
P-2
Baa1
P-2
Baa2
P-2
S&P
BBB+
A-2
A-
A-2
A-
A-2
Fitch
BBB+
F2
A-
F2
A-
F2
Credit ratings assigned by rating organizations are expressions of opinion and are not recommendations to buy, sell
or hold securities. A credit rating is subject to revision or withdrawal at any time by the assigning rating organization.
Each rating should be evaluated independently of any other rating. See “The Companies Require Access To Capital
Markets To Satisfy Funding Requirements” and “Changes To Tax Laws Could Adversely Affect the Companies” in
Item 1A.
In 2017, the United Kingdom’s Financial Conduct Authority announced that it intends to stop persuading or
compelling banks to submit London Interbank Offered Rates (LIBOR) after 2021. In November 2020, LIBOR’s
administrator announced it plans to consult on its intention to cease publication of one-week and two-month U.S.
Dollar LIBOR immediately after the LIBOR publication on December 31, 2021, and the remaining U.S. Dollar LIBOR
tenors immediately after publication on June 30, 2023.The Companies have been and are continuing to monitor
LIBOR-related market, regulatory and accounting developments. The Companies’ material contracts that reference
LIBOR and currently extend beyond 2021 include their $2,250 million credit agreement (see Note D to the financial
statements in Item 8). Pursuant to the credit agreement, the Companies may borrow at interest rates determined
with reference to a prime rate, the federal funds rate or LIBOR. The credit agreement may be amended by the
Companies and the administrative agent to provide for a LIBOR successor rate unless a majority of the lenders do
not accept the amendment. In addition, the Clean Energy Businesses have $999 million of variable rate project debt
that reference LIBOR and currently extends beyond 2021 and that allows for an alternate reference rate and
associated interest rate swaps with a notional amount of $863 million (see Note P to the financial statements in Item
8). Con Edison expects that, prior to the discontinuation of LIBOR, the Clean Energy Businesses will be able to
agree with project lenders and swap counterparties on the use of an alternate reference rate as needed. The
Companies do not expect that a discontinuation of LIBOR would have a material impact on their financial position,
results of operations or liquidity.
36
CON EDISON ANNUAL REPORT 2020
Environmental Matters
Clean Energy Future
Climate Leadership and Community Protection Act
In 2019, New York State enacted the Climate Leadership and Community Protection Act (CLCPA) that established a
goal of 70 percent of the electricity procured by load serving entities regulated by the NYSPSC to be produced by
renewable energy systems by 2030 and requires the statewide electrical demand system to have zero emissions by
2040. The law also codified state targets for energy efficiency (end-use energy savings of 185 trillion British thermal
units below 2025 energy-use forecast), offshore wind (9,000 megawatts (MW) by 2035), solar (6,000 MW by 2025)
and energy storage (3,000 MW by 2030). In addition, the law established a climate action council to recommend
measures to attain the law’s greenhouse gases (GHG) limits, including measures to reduce emissions by
displacing fossil-fuel fired electricity with renewable electricity or by implementing energy efficiency measures. The
climate action council is expected to release draft recommendations for public comment in 2022. The law also
requires the consideration of electric transportation and electric heating to achieve its goals. As required by the law,
the NYSDEC adopted regulations establishing statewide GHG emissions limits that are 60 percent of 1990
emissions levels by 2030 and 15 percent of 1990 emissions by 2050. The Utilities are unable to predict the impact
on them of the implementation of this law.
In October 2020, the NYSPSC, in response to the CLCPA, modified its clean energy standard to establish a new
renewable energy credits (RECs) program to support increased renewable energy availability in New York City for
which the costs would be socialized statewide. CECONY and O&R have been required to obtain RECs and zero-
emissions credits (ZECs) for their full service customers since 2017. Load serving entities may satisfy their RECs
obligation by either purchasing RECs acquired through central procurement by the New York State Energy
Research and Development Authority (NYSERDA), by self-supply through direct purchase of tradable RECs, or by
making alternative compliance payments. Load serving entities purchase ZECs from NYSERDA at prices
determined by the NYSPSC.
Prior to enactment of the CLCPA and its expansion of offshore wind goals, in July 2018, the NYSPSC established a
goal of 2,400 MW of new offshore wind facilities by 2030. As a result of this goal, load-serving entities, such as
CECONY and O&R, will be required to purchase offshore wind renewable energy credits (ORECs) from NYSERDA
beginning in 2025 when projects are expected to begin operation. In October 2019, NYSERDA entered into a 25-
year power purchase agreement (PPA) with Equinor Wind US LLC for its 816 MW Empire Wind Project, and a 25-
year PPA with Sunrise Wind LLC for its 880 MW Sunrise Wind Project. In 2020, NYSERDA issued a new solicitation
and provisionally awarded two contracts - one that would expand the Empire Wind Project to 1,260 MW and another
to Equinor Wind US LLC for its 1,230 MW Beacon Wind Project.
In August 2019, following the enactment of the CLCPA, the NYSPSC initiated a proceeding to “reconcile resource
adequacy programs with New York State’s renewable energy and environmental emission reduction goals.” See
“New York Independent System Operator (NYISO),” above and “Climate Change,” below. In May 2020, the
NYSPSC initiated a proceeding implementing the Accelerated Renewable Energy Growth and Community Benefit
Act to align New York State’s electric system with CLCPA goals. In November 2020, New York’s investor-owned
utilities (including the Utilities) and LIPA filed a comprehensive report in this proceeding, identifying proactive local
transmission and distribution investments in their systems to achieve the goals of the CLCPA and setting out policy
recommendations for how they will identify, prioritize and allocate costs of these and future such projects going
forward. CECONY and O&R have identified approximately $4,500 million and $400 million, respectively, in local
transmission investment.
Federal and local municipal laws and agencies also regulate emissions levels and impact the CLCPA’s
decarbonization pathways. In 2015, the United States Environmental Protection Agency (EPA) issued its Clean
Power Plan, which was repealed by the EPA in June 2019, and would have required states to reduce carbon dioxide
emissions from existing power plants 32 percent from 2005 levels by 2030. Under the Clean Power Plan, each state
would have been required to submit for EPA approval a plan to reduce its emissions to specified rate-based or
equivalent mass-based target levels (as determined in accordance with the Clean Power Plan) applicable to the
state. For New York State, the emissions rate-based target level for 2030 would have been approximately 20
percent below its 2012 emissions rate. State plans may, among other things, include participation in regional cap-
and-trade programs. In June 2019, the EPA issued its Affordable Clean Energy (ACE) rule. The ACE rule
establishes guidelines for states to use when developing plans to limit carbon dioxide emissions at coal-fired power
plants and includes implementing regulations for future existing-source rules under the Clean Air Act. In September
2019, Con Edison, as part of a coalition of public and private electric utilities, filed a petition in the United States
Court of Appeals for the District of Columbia Circuit to challenge the ACE rule and the repeal of the Clean Power
Plan. The ACE rule could have potential cost implications for utilities because it has the effect of limiting flexibility to
CON EDISON ANNUAL REPORT 2020
37
use measures such as emissions trading and averaging to cost-effectively meet emissions limits. The ACE rule
could also adversely impact initiatives to develop renewable energy sources and promote the use of electric
vehicles. In January 2021, the Court of Appeals vacated and remanded the ACE rule to the EPA on the grounds that
the ACE Rule was based on a critically mistaken reading of the Clean Air Act. In its ruling, the court adopted the
argument advanced by the utilities coalition that the Clean Air Act did not foreclose EPA flexibility to consider other
measures, such as emissions trading, to reduce carbon dioxide emissions.
In 2014, New York City announced a goal to reduce GHG emissions 80 percent below 2005 levels by 2050. In May
2019, New York City enacted a package of legislation known as the Climate Mobilization Act, that includes
provisions intended to reduce GHG emissions from large buildings by 40 percent from 2005 levels by 2030. Building
owners may achieve compliance through operational changes, building retrofits, the purchase of greenhouse gas
offsets, the purchase of renewable energy credits and the use of clean distributed energy resources. CECONY is
unable to predict the impact on it of the implementation of this law.
Reforming the Energy Vision
In April 2014, the NYSPSC began a multi-year process --Reforming the Energy Vision (REV)-- to improve electric
system efficiency and reliability, encourage renewable energy resources, support distributed energy resources
(DER), and enable more customer choice. DER includes distributed generation (such as solar electric production
facilities, fuel cells and micro-turbines), energy storage, demand reduction and energy efficiency programs.
Following a broad assortment of early REV proceedings, implementation of REV has shifted to focus on integrating
distributed generation and modifying ratemaking designs.
The NYSPSC is directing development by New York electric utilities of a distributed system platform to manage and
coordinate DER in their service areas under NYSPSC regulation and to provide customers, together with third
parties, with data and tools to better manage their energy use. The NYSPSC has required the Utilities to file
distributed system implementation plans and ordered the Utilities to develop demonstration projects to inform
distributed system platform business models. Through December 31, 2020, the NYSPSC staff has approved nine
CECONY, three O&R, and one joint CECONY-O&R demonstration projects.
The NYSPSC approved CECONY’s advanced metering infrastructure (AMI) installation plan for its electric and gas
delivery businesses, subject to a cap on capital expenditures of $1,285 million. AMI components such as smart
meters, a communication network, information technology systems and business applications, will facilitate REV
initiatives. The plan provides for full deployment of AMI to CECONY’s customers by 2022. The NYSPSC also
authorized O&R to expend $98.5 million to install AMI for its New York customers, which work was complete as of
December 31, 2020.
The NYSPSC began to change compensation for DER and phase out net energy metering (NEM) in 2015. In New
York, NEM compensates kilowatt-hours exported to the electric distribution system at the full-service rate for
production, delivery, taxes and fees. NYSPSC’s policy is to phase in changes to limit annual bill increases to two
percent, reducing the impact of this policy on non-participating residential customers that would have occurred
under NEM, but the NYSPSC have permitted exceptions to this policy.
Energy Efficiency, Electric Vehicles and Energy Storage
In January 2020, the NYSPSC issued an order directing energy efficiency targets and budgets for New York utilities.
The order approved $2,000 million statewide for electric and gas energy efficiency programs and heat pump
budgets, and associated targets, for the years 2021 through 2025 to meet the NYSPSC’s goal of reducing electric
use by 3 percent annually and gas use by 1.3 percent annually by 2025. The order authorized budgets for the years
2021 through 2025 for: electric energy efficiency programs of $593 million and $13 million for CECONY and O&R,
respectively; gas energy efficiency programs of $235 million and $12 million for CECONY and O&R, respectively;
and heat pump programs of $227 million and $15 million for CECONY and O&R, respectively. CECONY’s current
electric and gas rate plans allow it to recover the costs of energy efficiency expenditures, including a full rate of
return, in rates from customers. Previously, CECONY recovered the costs of its energy efficiency programs from its
customers primarily through energy efficiency tracker surcharge mechanisms approved by the NYSPSC. CECONY
billed customers approximately $100 million annually between 2016 and 2019, through these mechanisms.
Pursuant to CECONY's previous electric rate plan, the company supplemented its energy efficiency transition
implementation plan with new energy efficiency, electric vehicle and system peak reduction programs, at a total cost
of $177 million from 2017 through 2019, that has been reflected in base rates. See Note B to the financial
statements in Item 8.
38
CON EDISON ANNUAL REPORT 2020
In May 2018, the NYSPSC initiated a proceeding on the role of electric utilities in providing needed infrastructure
and rate options to advance adoption of electric vehicles. In July 2020, the NYSPSC established a light-duty electric
vehicle make-ready program that includes budgets of $290 million and $24 million for CECONY and O&R,
respectively, through 2025 for electric vehicle infrastructure and related program costs. CECONY’s current electric
rate plan also includes funding to offer up to $22 million in incentives for off-peak charging and electric vehicle
infrastructure. The NYSPSC authorized both CECONY and O&R to recover these costs, including a full rate of
return, in rates from customers.
In December 2018, the NYSPSC issued an order establishing an energy storage goal of up to 3,000 MW of energy
storage by 2030 with an interim objective of 1,500 MW by 2025. The order also required CECONY to file an
implementation plan for a competitive procurement process to deploy 300 MW of energy storage while O&R and the
other New York electric utilities must plan to deploy 10 MW each. CECONY and O&R filed their implementation
plans in February 2019. In December 2020, CECONY entered into a contract with a storage developer for energy
storage services to provide power capacity of up to 100 MW. The Utilities expect to recover the cost of energy
storage services, including a full rate of return, in rates from customers.
Climate Change
As indicated by the Intergovernmental Panel on Climate Change, emissions of greenhouse gases (GHG), including
carbon dioxide, are very likely changing the world’s climate.
Climate change could affect customer demand for the Companies’ energy services. It might also cause physical
damage to the Companies’ facilities and disruption of their operations due to more frequent and more extreme
weather. In August 2020, Tropical Storm Isaias caused significant damage to the Utilities’ electric distribution
systems and interrupted service to approximately 530,000 of the Utilities’ customers and caused the second-largest
power outage in the Utilities’ history (Superstorm Sandy interrupted service to 1.4 million of the Utilities’ customers’
in October 2012) and resulted in the Utilities incurring substantial response and restoration costs. After Superstorm
Sandy, CECONY invested $1,000 million in its infrastructure in order to improve its resilience against storms. In
December 2019, CECONY completed a study of climate change vulnerability. The study evaluated present-day
infrastructure, design specifications and procedures under a range of potential climate futures. The study identified
sea level rise, coastal storm surge, inland flooding from intense rainfall, hurricane-strength winds and extreme heat
to be CECONY’s most significant climate-driven risks to its electric, gas and steam systems. The study estimated
that CECONY might need to invest between $1,800 million and $5,200 million by 2050 on targeted programs in
order to adapt to potential impacts from climate change. During 2020, CECONY further evaluated its future climate
change adaptation strategies and developed a climate change implementation plan that it filed with the NYSPSC in
December 2020. The climate change implementation plan explains how CECONY will incorporate climate change
projections for heat, precipitation, and sea level rise from the 2019 Climate Change Vulnerability Study into its
operations to mitigate climate change risks to its assets and operations and establishes an ongoing process to
reflect the latest science in the company’s planning. With respect to governance, CECONY is adopting a climate
change planning and design guideline, creating an executive committee to oversee implementation of the plan, and
is establishing a climate risk and resilience team to execute the day-to-day activities required by the plan.
Based on the most recent data (2018) published by the U.S. Environmental Protection Agency (EPA), Con Edison
estimates that its direct GHG emissions constitute less than 0.1 percent of the nation’s GHG emissions.
Transportation is the largest source of GHG emissions in New York State. Con Edison’s estimated emissions of
GHG during the past five years were:
(Metric tons, in millions (a))
CO2 equivalent emissions
2016
3.1
2017
3.0
2018
3.1
2019
2.9
2020
2.7
(a) Estimated emissions for 2020 are based on preliminary data and are subject to third-party verification.
Con Edison’s more than 50 percent decrease in direct GHG emissions (carbon dioxide, methane and sulfur
hexafluoride) from the 2005 baseline (6.0 million metric tons) reflects the emission reductions resulting from
equipment and repair projects, reduced steam demand, the increased use of natural gas in lieu of fuel oil at
CECONY’s steam production facilities as well as projects to reduce sulfur hexafluoride emissions and to replace
gas distribution pipes.
CECONY has participated for several years in voluntary initiatives with the EPA to reduce its methane and sulfur
hexafluoride emissions. The Utilities reduce methane emissions from the operation of their gas distribution systems
through pipe maintenance and replacement programs and by introducing new technologies to reduce fugitive
emissions from leaks or when work is performed on operating assets. The Utilities reduce emissions of sulfur
hexafluoride, which is used for arc suppression in substation circuit breakers and switches, by using improved
CON EDISON ANNUAL REPORT 2020
39
technologies to locate and repair leaks and by replacing older equipment. The Utilities also actively promote energy
efficiency and the use of renewable generation to help their customers reduce their GHG emissions.
Emissions are also avoided by renewable electric production facilities replacing fossil-fueled electric production
facilities and the continued operation of upstate nuclear power plants. See – “Clean Energy Future,” above.
NYSERDA has been responsible for implementing the renewable portfolio standard (RPS) and Clean Energy
Standard (CES) established by the NYSPSC. NYSERDA has entered into agreements with developers of large
renewable electric production facilities and the owners of upstate nuclear power plants and pays them premiums
based on the facilities’ electric output. These facilities sell their energy output in the wholesale energy and capacity
markets administered by the NYISO. As a result of the Utilities’ participation in the NYISO wholesale markets, a
portion of the Utilities’ NYISO energy purchases are sourced from renewable electric production facilities.
NYSERDA also has provided rebates to customers who installed eligible renewable electric production
technologies. The electricity produced by such customer-sited renewables generation offsets the energy that the
Utilities would otherwise have procured, thereby reducing the amount of electricity produced by non-renewable
production facilities.
In 2019, NYSERDA and the New York State Department of Environmental Conservation (NYSDEC) published the
New York State Greenhouse Gas Inventory, which reported that emissions from electricity generated in-state
decreased 56 percent between 1990 and 2016 due, in part, to the decrease in the burning of coal and petroleum
products in the electricity generation sector in New York and the increase in renewables generation in New York.
In January 2016, the NYSPSC approved a 10-year $5,300 million clean energy fund to be managed by NYSERDA
under the NYSPSC's supervision. The clean energy fund has four portfolios: market development; innovation and
research; NY Green Bank and NY Sun. The Utilities collect all clean energy fund surcharges through the system
benefit charge (including previously authorized RPS, EEPS, Technology and Market Development collections and
incremental clean energy fund collections to be collected from electric customers only). The Utilities billed
customers clean energy fund surcharges of $212 million, $305 million and $311 million in 2020, 2019, and 2018
respectively. For information about NYSPSC proceedings considering renewable generation see “Clean Energy
Future," above.
CECONY is subject to carbon dioxide emissions regulations established by New York State under the Regional
Greenhouse Gas Initiative (RGGI). The initiative, a cooperative effort by Northeastern and Mid-Atlantic states,
established a decreasing cap on carbon dioxide emissions resulting from the generation of electricity. Under RGGI,
affected electric generators are required to obtain emission allowances to cover their carbon dioxide emissions,
available primarily through auctions administered by participating states or a secondary market. For the fourth
RGGI control period (2018-2020), CECONY purchased allowances for 7.4 million short tons to meet its control
period obligation, which is expected to be 6.4 million short tons. Due to changes in the New York State CO2 Budget
Trading Program, for the fifth RGGI control period (2021 - 2023) CECONY expects two additional company facilities
will be added to the RGGI program. However, since the affected units at these facilities are used only for peaking
generation and when needed to restore power to the electric grid, these changes are not expected to materially
impact the company’s RGGI obligations. CECONY will purchase RGGI allowances for the fifth control period based
on anticipated emissions, which are expected to be similar to past compliance periods.
The cost to the Companies to comply with legislation, regulations or initiatives limiting GHG emissions could be
substantial.
Environmental Sustainability
Con Edison’s sustainability strategy, as it relates to the environment, provides that the company is dedicated to
making a transformational impact on the environment, our region, and the lives of the people we serve. As part of
its strategy, the company seeks, among other things, to reduce direct and indirect emissions; enhance the efficiency
of its water use; minimize its impact to natural ecosystems; focus on reducing, reusing and recycling to minimize
consumption; and design its work in consideration of climate forecasts. Con Edison has adopted a clean energy
commitment to further implement its sustainability strategy. The company’s clean energy commitment seeks to triple
energy efficiency investments by 2030; achieve 100 percent clean electricity in New York State by 2040; transition
the Utilities’ fleet of light-duty vehicles to electric vehicles; provide all-in support for electric vehicles across the
Utilities’ service area; and accelerate the reduction of fossil fuels for building heating.
CECONY
Superfund
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
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CON EDISON ANNUAL REPORT 2020
for investigation costs, remediation costs and environmental damages. The sites as to which CECONY has been
asserted to have liability under Superfund include its and its predecessor companies’ former manufactured gas
sites, its multi-purpose Astoria site, the Gowanus Canal site, the Newtown Creek site and other Superfund sites
discussed below. There may be additional sites as to which assertions will be made that the company has liability.
For a further discussion of claims and possible claims against the company under Superfund, estimated liability
accrued for Superfund claims and recovery from customers of site investigation and remediation costs, see Note G
to the financial statements in Item 8.
Manufactured Gas Sites
CECONY and its predecessors formerly owned and operated manufactured gas plants at 51 sites (MGP Sites) in
New York City and Westchester County. Many of these sites have been subdivided and are now owned by parties
other than CECONY and have been redeveloped for other uses, including schools, residential and commercial
developments and hospitals. The NYSDEC is requiring CECONY to investigate, and if necessary, develop and
implement remediation programs for the sites, including any neighboring areas to which contamination may have
migrated.
CECONY has started remedial investigations at all 51 MGP Sites. After investigations, no MGP impacts have been
detected at all or portions of 15 sites, and the NYSDEC has issued No Further Action (NFA) letters for these sites.
Coal tar or other MGP-related contaminants have been detected at the remaining 36 sites. Remedial actions have
been completed at all or portions of 14 sites and the NYSDEC has issued NFA letters for these sites. In addition,
remedial actions have been completed by property owners at all or portions of four sites under the NYS Brownfield
Cleanup Program and Certificates of Completion have been issued by the NYSDEC for these sites. Remedial
design, planning or action is ongoing for the remaining sites or portions of sites; however, the information as to the
extent of contamination and scope of the remediation likely to be required for many of these sites is incomplete. The
company estimates that its undiscounted potential liability for the completion of the site investigation and cleanup of
the known contamination on MGP sites (other than the Astoria site, which is discussed below) could range from
$576 million to $2,194 million.
Astoria Site
CECONY is permitted by the NYSDEC to operate a hazardous waste storage facility on property owned by it in the
Astoria section of Queens, New York. Portions of the property were formerly the location of a manufactured gas
plant and also have been used or are being used for, among other things, electric generation operations, electric
substation operations, the storage of fuel oil and liquefied natural gas and the maintenance and storage of electric
equipment. As a condition of its NYSDEC permit, the company is required to investigate the property and, where
environmental contamination is found and action is necessary, to remediate the contamination. The company’s
investigations are ongoing. The company has submitted reports to the NYSDEC and the New York State
Department of Health and in the future will be submitting additional reports identifying the known areas of
contamination. The company estimates that its undiscounted potential liability for the completion of the site
investigation and cleanup of the known contamination on the property could range from $177 million to $537 million.
Gowanus Canal
In August 2009, CECONY received a notice of potential liability and request for information from the EPA about the
operations of the company and its predecessors at sites adjacent to or near the 1.8 mile Gowanus Canal in
Brooklyn, New York. In March 2010, the EPA added the Gowanus Canal to its National Priorities List of Superfund
sites. The canal’s adjacent waterfront is primarily commercial and industrial, currently consisting of concrete plants,
warehouses and parking lots. The canal is near several residential neighborhoods. In September 2013, the EPA
issued its record of decision for the site. The EPA concluded that there was significant contamination at the site,
including polycyclic aromatic hydrocarbons, polychlorinated biphenyls (PCBs), pesticides, metals and volatile
organic compounds. The EPA selected a remedy for the site that includes dredging and disposal of some
contaminated sediments and stabilization and capping of contamination that will not be removed. The EPA
estimated the cost of the selected remedy to be $506 million (and has indicated the actual cost could be significantly
higher). The EPA has identified 39 potentially responsible parties (PRPs) with respect to the site, including CECONY
(which the EPA indicated has facilities that may be a source of PCBs at the site). The EPA ordered the PRPs,
including CECONY, to coordinate and cooperate with each other to perform and/or fund the remedial design for the
selected remedy, which current estimates indicate could cost approximately $103 million. CECONY is funding its
allocated share of the remedial design costs along with the other PRPs. In April 2019, the EPA issued an order that
requires the PRPs, including CECONY, to: (1) design and perform bulkhead structural support work, including
associated access dredging, along certain portions of the upper reaches of the canal, and (2) complete the design
work for bulkhead structural support along certain portions of the middle part of the canal. The PRPs and CECONY
are coordinating the implementation of this new order. In January 2020, the EPA issued an order that requires six
CON EDISON ANNUAL REPORT 2020
41
PRPs, including CECONY, to initiate the remedial action work in the upper reaches of the canal following the
completion of the bulkhead upgrades. The EPA estimated that this work would cost approximately $125 million and
require about 30 months to complete. In November 2020, the PRPs began implementation of the work required
under this order. Cleanup in other areas of the canal is not addressed by this order. In addition, other Federal
agencies and the NYSDEC have previously notified the PRPs of their intent to perform a natural resource damage
assessment for the site. CECONY is unable to estimate its exposure to liability for the Gowanus Canal site.
Newtown Creek
In June 2017, CECONY received a notice of potential liability from the 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 18 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 compounds. 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 current schedule anticipates completion of a feasibility study for the site during 2022 and issuance of the
EPA's record of decision selecting a remedy for the site shortly thereafter. CECONY is unable to estimate its
exposure to liability for the Newtown Creek site.
Other Superfund Sites
In 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. In 2017,
after the marina owner had cleared substantial debris from its collapsed pier and rip rap material that it had
previously placed over and in the vicinity of the underwater transmission lines in an attempt to shore up its failing
pier, a dielectric fluid leak was found and repaired on one of the underwater transmission lines. In August 2018, the
EPA declared the leak response complete. CECONY, the other utility and the marina owner are involved in litigation
in federal court regarding response and repair costs, related damages, and the future of the lines. In August 2020,
CECONY and the other utility entered into a settlement with the United States, under which the utilities settled the
federal government’s claims for outstanding response costs, without admitting fault and while preserving the utilities’
rights to pursue recovery from the marina owner. CECONY expects that, consistent with the cost allocation
provisions of its prior arrangements with the other utility for the transmission lines, the response and repair costs
incurred by CECONY, the other utility and government agencies, net of any recovery from the marina owner, will be
shared by CECONY and the other utility and that CECONY's share is not reasonably likely to have a material
adverse effect on its financial position, results of operations or liquidity.
CECONY is a PRP at additional Superfund sites involving other PRPs and participates in PRP groups at those
sites. The company generally is not managing the site investigation and remediation at these multiparty sites. Work
at these sites is in various stages, and investigation, remediation and monitoring activities at some of these sites
can be expected to continue over extended periods of time. The company believes that it is unlikely that monetary
sanctions, such as penalties, will be imposed by any governmental authority with respect to these sites.
The following table lists each of the additional Superfund sites for which the company anticipates it may have
liability. The table also shows for each such site its location, the year in which the company was designated or
alleged to be a PRP or to otherwise have responsibilities for the site (shown in the table under “Start”), the name of
the court or agency in which proceedings for the site are pending and CECONY’s estimated percentage of the total
liability for each site. The company currently estimates that its potential liability for investigation, remediation,
monitoring and environmental damages in aggregate for the sites below is less than $2 million. Superfund liability is
joint and several. The company’s estimate of its liability for each site was determined pursuant to consent decrees,
settlement agreements or otherwise and in light of the financial condition of other PRPs. The company’s actual
liability could differ substantially from amounts estimated.
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CON EDISON ANNUAL REPORT 2020
Site
Cortese Landfill
Curcio Scrap Metal
Metal Bank of America
Global Landfill
Borne Chemical
Pure Earth
Location
Narrowsburg, NY
Saddle Brook, NJ
Philadelphia, PA
Old Bridge, NJ
Elizabeth, NJ
Vineland, NJ
Start
1987
1987
1987
1988
1997
2018
Court or
Agency
EPA
EPA
EPA
EPA
NJDEP
EPA
% of Total
Liability
6.0%
100.0%
1.0%
0.4%
0.7%
to be determined
O&R
Superfund
The sites at which O&R has been asserted to have liability under Superfund include its manufactured gas sites and
the Superfund sites discussed below. There may be additional sites as to which assertions will be made that O&R
has liability. For a further discussion of claims and possible claims against O&R under Superfund, see Note G to the
financial statements in Item 8.
Manufactured Gas Sites
O&R and its predecessors formerly owned and operated manufactured gas plants at seven sites (O&R MGP Sites)
in Orange County and Rockland County, New York. Three of these sites are now owned by parties other than O&R,
and have been redeveloped by them for residential, commercial or industrial uses. The NYSDEC is requiring O&R
to develop and implement remediation programs for the O&R MGP Sites including any neighboring areas to which
contamination may have migrated.
O&R has completed remedial investigations at all seven of its MGP sites and has received the NYSDEC’s decision
regarding the remedial work to be performed at six of the sites. Of the six sites, O&R has completed remediation at
four sites. Remedial construction was conducted on a portion of one of the remaining sites in 2019 and remedial
design is ongoing for the other remaining sites. The company estimates that its undiscounted potential liability for
the completion of the site investigation and cleanup of the known contamination on MGP sites could range from $77
million to $127 million.
Superfund Sites
O&R is a PRP at Superfund sites involving other PRPs and participates in PRP groups at those sites. The company
is not managing the site investigation and remediation at these multiparty Superfund sites. Work at these sites is in
various stages, and investigation, remediation and monitoring activities at some of these sites is expected to
continue over extended periods of time. The company believes that it is unlikely that monetary sanctions, such as
penalties, will be imposed by any governmental authority with respect to these sites.
The following table lists each of the Superfund sites for which the company anticipates it may have liability. The
table also shows for each such site its location, the year in which the company was designated or alleged to be a
PRP or to otherwise have responsibilities for the site (shown in the table under “Start”), the name of the court or
agency in which proceedings for the site are pending and O&R’s estimated percentage of the total liability for each
site. The company currently estimates that its potential liability for investigation, remediation, monitoring and
environmental damages in aggregate for the sites below is less than $1 million. Superfund liability is joint and
several. The company’s estimate of its liability for each site was determined pursuant to consent decrees,
settlement agreements or otherwise and in light of the financial condition of other PRPs. The company’s actual
liability could differ substantially from amounts estimated.
Site
Metal Bank of America
Borne Chemical
Ellis Road
Location
Philadelphia, PA
Elizabeth, NJ
Jacksonville, FL
Start
1993
1997
2011
Court or
Agency
EPA
NJDEP
EPA
% of Total
Liability
4.6%
2.3%
0.2%
Other Federal, State and Local Environmental Provisions
Toxic Substances Control Act
Virtually all electric utilities, including CECONY and O&R, own equipment containing PCBs. PCBs are regulated
under the Federal Toxic Substances Control Act of 1976. The Utilities have procedures in place to manage and
dispose of oil and equipment containing PCBs properly when they are removed from service.
CON EDISON ANNUAL REPORT 2020
43
Water Quality
Under NYSDEC regulations, the operation of CECONY’s generating facilities requires permits for water discharges
and water withdrawals. Conditions to the renewal of such permits may include limitations on the operations of the
permitted facility or requirements to install certain equipment, the cost of which could be substantial. For information
about the company’s generating facilities, see “CECONY – Electric Operations – Electric Facilities” and “Steam
Operations – Steam Facilities” above in this Item 1.
Certain governmental authorities are investigating contamination in the Hudson River and the New York Harbor.
These waters run through portions of CECONY’s service area. Governmental authorities could require entities that
released hazardous substances that contaminated these waters to bear the cost of investigation and remediation,
which could be substantial.
Air Quality
Under new source review regulations, an owner of a large generating facility, including CECONY’s steam and
steam-electric generating facilities, is required to obtain a permit before making modifications to the facility, other
than routine maintenance, repair, or replacement, that increase emissions of pollutants from the facility above
specified thresholds. To obtain a permit, the facility owner could be required to install additional pollution controls or
otherwise limit emissions from the facility. The company reviews on an on-going basis its planned modifications to
its facilities to determine the potential applicability of new source review and similar regulations.
The EPA's Transport Rule (also referred to as the Cross-State Air Pollution Rule), which was implemented in
January 2015, established a new cap-and-trade program requiring further reductions in air emissions than the Clean
Air Intrastate Rule (CAIR) that it replaced. Under the Transport Rule, utilities are to be allocated emissions
allowances and may sell the allowances or buy additional allowances. CECONY requested and received NYSPSC
approval to change the provisions under which the company recovers its purchased power costs to provide for costs
incurred to purchase emissions allowances and revenues received from the sale of allowances. CECONY complied
with the Transport Rule in 2020 and expects to comply with the rule in 2021. In 2020, the EPA proposed changes to
the Transport Rule in response to a court decision. The EPA is under a court order to finalize this proposed action by
March 15, 2021. If the changes to the Transport Rule are adopted as proposed, the number of allowances allocated
to CECONY would decrease and the company would be required to purchase allowances to offset the decreased
allocation.
The New York State Department of Environmental Conservation issued regulations in 2019 that limits nitrous oxides
(NOx) 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. See
“CECONY – Electric Operations – Electric Supply,” above.
Environmental Matters
For information concerning climate change, environmental sustainability, potential liabilities arising from laws and
regulations protecting the environment and other environmental matters, see “Environmental Matters” in Item 1, "Air
Quality," above and Note G to the financial statements in Item 8.
State Anti-Takeover Law
New York State law provides that a “domestic corporation,” such as Con Edison, may not consummate a merger,
consolidation or similar transaction with the beneficial owner of a 20 percent or greater voting stock interest in the
corporation, or with an affiliate of the owner, for five years after the acquisition of the voting stock interest, unless the
transaction or the acquisition of the voting stock interest was approved by the corporation’s board of directors prior
to the acquisition of the voting stock interest. After the expiration of the five-year period, the transaction may be
consummated only pursuant to a stringent “fair price” formula or with the approval of a majority of the disinterested
stockholders.
Human Capital
Con Edison is committed to attracting, developing, and retaining a talented, diverse workforce. It values and
supports a wide range of employee needs and interests. The company’s skilled and experienced workforce enables
the company to maintain best-in-class reliability and progress towards achieving a clean energy future. Human
capital measures focus on employee safety, hiring the right talent, employee development and retention, diversity
and inclusion, emergency response and providing essential services to customers while protecting employees
during the COVID-19 pandemic.
On December 31, 2020, Con Edison and its subsidiaries had 14,071 employees, based entirely in the United States
including 12,477 at CECONY; 1,118 at O&R, 468 at the Clean Energy Businesses and 8 at Con Edison
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CON EDISON ANNUAL REPORT 2020
Transmission. Of the total CECONY and O&R employees, 7,174 and 574 employees, respectively, were
represented by a collective bargaining unit. The collective bargaining agreement covering most of the CECONY
employees expires in June 2024. Agreements covering other CECONY employees and O&R employees expire in
June 2021 and May 2023, respectively.
Con Edison measures the voluntary attrition rate of its employees in assessing the company’s overall human
capital. The company has a low annual turnover rate of approximately 6.5 percent, half of which is attributed to
retirements. The average length of service is 14 years. Con Edison strives to have a diverse and inclusive
workforce. A comprehensive diversity and inclusion strategy underlies the corporate culture; informing how its
employees engage with one another, and setting the foundation for a respectful and inclusive environment. On
December 31, 2020, women represented 21.9 percent of the total workforce and people of color represented 49
percent of the workforce, with ethnicity breaking down as follows: 51.0 percent White, 20.8 percent Black, 18.1
percent Hispanic, 8.8 percent Asian and 1.3 percent other.
In managing the business, the company focuses heavily on creating a strong safety culture. Continuous focus on
safety while performing work is paramount, and leaders and managers are committed to implementing programs
and practices that promote the right knowledge, skills, and attitudes to successfully undertake the responsibilities of
safety, including required training for both field and office employees. To that end, the company has a dedicated
facility, the Learning Center, that offers classes to employees covering technical courses, skills enhancement,
safety, and leadership development. During 2020, employees spent almost 500,000 hours in instructor-led training.
Further, the company maintains a career development and succession planning program that is committed to
helping employees grow their careers, talents, skills and abilities. In addition to their daily job functions, employees
of the Utilities are assigned to and trained on a position for emergency response that is mobilized in the event of a
weather event or emergency.
As a result of the COVID-19 pandemic, 60 percent of the total workforce was working remotely as of December 31,
2020. The viability of a mobile workforce was made possible by digital software and smart device capabilities that
helped employees to collaborate with each other and remain productive while complying with health requirements.
Even as the company continues to respond to the pandemic, the entire CECONY and O&R workforce is available in
the event of an emergency that requires on-site presence. During 2020, Con Edison and its subsidiaries managed
their operations and resources while avoiding lay-offs and furloughs and continued to recruit, interview, and hire
internal and external applicants to fill critical positions. Con Edison, and its subsidiaries support employee health
through mandatory pre-entry symptom surveys for employees arriving at all company locations, regular cleaning
and disinfecting of all work and common areas, promoting social distancing, requiring face coverings, and directing
employees to work remotely whenever possible.
Available Information
For the sources of information about the Companies, see “Available Information” in the “Introduction” appearing
before this Item 1.
Item 1A: Risk Factors
Information in any item of this report as to which reference is made in this Item 1A is incorporated by reference
herein. The use of such terms as “see” or “refer to” shall be deemed to incorporate at the place such term is used
the information to which such reference is made.
The Companies’ businesses are influenced by many factors that are difficult to predict, and that involve
uncertainties that may materially affect actual operating results, cash flows and financial condition.
The Companies have established an enterprise risk management program to identify, assess, manage and monitor
its major business risks based on established criteria for the severity of an event, the likelihood of its occurrence,
and the programs in place to control the event or reduce the impact. The Companies’ major risks include:
CON EDISON ANNUAL REPORT 2020
45
Regulatory/Compliance Risks:
The Companies Are Extensively Regulated And Are Subject To Substantial Penalties. The Companies’
operations require numerous permits, approvals and certificates from various federal, state and local governmental
agencies. State utility regulators may seek to impose substantial penalties on the Utilities for violations of state utility
laws, regulations or orders. In addition, the Utilities' rate plans usually include negative revenue adjustments for
failing to meet certain operating and customer satisfaction standards. In January 2021, Governor Cuomo proposed
legislation that, if enacted, would establish an automatic moratorium on disconnections of residential and small
business customers by the Utilities during certain states of emergency. In November 2020, the NYSPSC issued
orders to show cause why substantial penalties should not be imposed on the Utilities regarding their preparation for
and response to Tropical Storm Isaias and on CECONY regarding its actions and/or omissions prior to, during, and
after the July 2019 power outages on the west side of Manhattan and in the Flatbush area of Brooklyn. The orders
further indicated that should the NYSPSC confirm that certain alleged violations demonstrate a failure by the Utilities
to continue to provide safe and adequate service, the NYSPSC would be authorized to commence a proceeding to
revoke or modify the Utilities’ operating certificates. See Note B to the financial statements in Item 8. FERC has the
authority to impose penalties on the Utilities, the Clean Energy Businesses and the projects that Con Edison
Transmission invests in, which could be substantial, for violations of the Federal Power Act, the Natural Gas Act or
related rules, including reliability and cyber security rules. Environmental agencies may seek penalties for failure to
comply with laws, regulations or permits. The Companies may also be subject to penalties from other regulatory
agencies. The Companies may be subject to new laws, regulations or other requirements or the revision or
reinterpretation of such requirements, which could adversely affect them. See “Utility Regulation", "Competition" and
“Environmental Matters – Climate Change" and "Environmental Matters - Other Federal, State and Local
Environmental Provisions” in Item 1, “Application of Critical Accounting Policies” in Item 7 and “COVID-19
Regulatory Matters” and “Other Regulatory Matters” in Note B to the financial statements in Item 8.
The Utilities’ Rate Plans May Not Provide A Reasonable Return. The Utilities have rate plans approved by
state utility regulators that limit the rates they can charge their customers. The rates are generally designed for, but
do not guarantee, the recovery of the Utilities’ cost of service (including a return on equity). See “Utility Regulation –
State Utility Regulation – Rate Plans” in Item 1 and “Rate Plans” in Note B to the financial statements in Item 8.
Rates usually may not be changed during the specified terms of the rate plans other than to recover energy costs
and limited other exceptions. The Utilities’ actual costs may exceed levels provided for such costs in the rate plans
(see “COVID-19 Regulatory Matters” in Note B to the financial statements in Item 8). State utility regulators can
initiate proceedings to prohibit the Utilities from recovering from their customers the cost of service (including energy
costs and storm restoration costs) that the regulators determine to have been imprudently incurred (see "Other
Regulatory Matters" in Note B to the financial statements in Item 8). The Utilities have from time to time entered into
settlement agreements to resolve various prudence proceedings.
The Companies May Be Adversely Affected By Changes To The Utilities’ Rate Plans. The Utilities’ rate plans
typically require action by regulators at their expiration dates, which may include approval of new plans with different
provisions. The need to recover from customers increasing costs, taxes or state-mandated assessments or
surcharges could adversely affect the Utilities’ opportunity to obtain new rate plans that provide a reasonable rate of
return and continue important provisions of current rate plans. The Utilities’ current New York electric and gas rate
plans include revenue decoupling mechanisms and their New York electric, gas and steam rate plans include
provisions for the recovery of energy costs and reconciliation of the actual amount of pension and other
postretirement, environmental and certain other costs to amounts reflected in rates. See “Rate Plans” in Note B to
the financial statements in Item 8.
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CON EDISON ANNUAL REPORT 2020
Operations Risks:
The Failure Of, Or Damage To, The Companies’ Facilities Could Adversely Affect The Companies. The
Utilities provide electricity, gas and steam service using energy facilities, many of which are located either in, or
close to, densely populated public places. See the description of the Utilities’ facilities in Item 1. A failure of, or
damage to, these facilities, or an error in the operation or maintenance of these facilities, could result in bodily injury
or death, property damage, the release of hazardous substances or extended service interruptions. Impacts of
climate change, such as sea level rise, coastal storm surge, inland flooding from intense rainfall, hurricane-strength
winds and extreme heat could damage facilities and the Utilities may experience more severe consequences from
attempting to operate during and after such events. The Utilities’ response to such events may be perceived to be
below customer expectations. The Utilities could be required to pay substantial amounts that may not be covered by
the Utilities’ insurance policies to repair or replace their facilities, compensate others for injury or death or other
damage and settle any proceedings initiated by state utility regulators or other regulatory agencies. The occurrence
of such events could also adversely affect the cost and availability of insurance. See “Other Regulatory Matters” in
Note B and “Manhattan Explosion and Fire” in Note H to the financial statements in Item 8. Changes to laws,
regulations or judicial doctrines could further expand the Utilities’ liability for service interruptions. See “Utility
Regulation – State Utility Regulation” and "Environmental Matters – Climate Change" in Item 1.
A Cyber Attack Could Adversely Affect The Companies. The Companies and other operators of critical energy
infrastructure and energy market participants face a heightened risk of cyber attack and the Companies’ businesses
require the continued operation of information systems and network infrastructure. See Item 1 for a description of
the businesses of the Utilities, the Clean Energy Businesses and Con Edison Transmission. Cyber attacks may
include hacking, viruses, malware, denial of service attacks, ransomware or other security breaches, including loss
of data. Cyber threats to the electric and gas systems are increasing in sophistication, magnitude and frequency.
There has been a growing use of COVID-19 related themes by malicious cyber actors and the significant increase
in employees working remotely has increased the attack surface area for the Companies as well as their contractors
and vendors.Interconnectivity with customers through advanced metering infrastructure, independent system
operators, energy traders and other energy market participants, suppliers, contractors and others also exposes the
Companies’ information systems and network infrastructure to an increased risk of cyber incidents, including
attacks, and increases the risk that a cyber incident or attack on the Companies could affect others. In the event of
a cyber incident or attack that the Companies were unable to defend against or mitigate, the Companies could have
their operations and the operations of their customers and others disrupted. The Companies could also have their
financial and other information systems and network infrastructure impaired, property damaged, and customer and
employee information stolen; experience substantial loss of revenues, response costs and other financial loss; and
be subject to increased regulation, litigation, penalties and damage to their reputation. In December 2020, it was
announced that updates from SolarWinds, a network monitoring tool used by CECONY, O&R and the Clean Energy
Businesses, was compromised and facilitated a cyberattack against multiple private and public sector entities. The
Companies have experienced cyber incidents and attacks, including the recent SolarWinds attack, although none of
the incidents or attacks had a material impact.
The Failure Of Processes and Systems And The Performance Of Employees And Contractors Could
Adversely Affect The Companies. The Companies have developed business processes and use information
and communication systems for operations, customer service, legal compliance, personnel, accounting, planning
and other matters. The Companies have completed a multi-year, phased transition of information technology
services, including application maintenance and support and infrastructure and operations services, to a contractor.
The failure of the Companies’ or its contractors' business processes or information and communication systems or
the failure by the Companies’ employees or contractors to follow procedures, their unsafe actions, errors or
intentional misconduct, cyber incidents or attacks, or work stoppages could adversely affect the Companies’
operations and liquidity and result in substantial liability, higher costs and increased regulatory requirements. The
violation of laws or regulations by employees or contractors for personal gain may result from contract and
procurement fraud, extortion, bribe acceptance, fraudulent related-party transactions and serious breaches of
corporate policy or standards of business conduct. See “Human Capital” in Item 1.
Environmental Risks:
The Companies Are Exposed To Risks From The Environmental Consequences Of Their Operations. The
Companies are exposed to risks relating to climate change and related matters. In 2019, CECONY completed a
climate change vulnerability study and during 2020, CECONY further evaluated its future climate change adaptation
strategies and developed a climate change implementation plan. New York State enacted the Climate Leadership
and Community Protection Act and New York City enacted the Climate Mobilization Act. See “Environmental Matters
– Clean Energy Future” in Item 1. CECONY may also be impacted by regulations requiring reductions in air
emissions. See “Environmental Matters – Other Federal, State and Local Environmental Provisions – Air Quality” in
Item 1. In addition, the Utilities are responsible for hazardous substances, such as asbestos, PCBs and coal tar, that
CON EDISON ANNUAL REPORT 2020
47
have been used or produced in the course of the Utilities’ operations and are present on properties or in facilities
and equipment currently or previously owned by them. See “Environmental Matters” in Item 1 and Note G to the
financial statements in Item 8. The Companies could be adversely affected if a causal relationship between electric
and magnetic fields and adverse health effects were to be established.
Financial and Market Risks:
A Disruption In The Wholesale Energy Markets Or Failure By An Energy Supplier or Customer Could
Adversely Affect The Companies. Almost all the electricity and gas the Utilities sell to their full-service
customers is purchased through the wholesale energy markets or pursuant to contracts with energy suppliers. See
the description of the Utilities’ energy supply in Item 1. A disruption in the wholesale energy markets or a failure on
the part of the Utilities’ energy suppliers or operators of energy delivery systems that connect to the Utilities’ energy
facilities could adversely affect their ability to meet their customers’ energy needs and adversely affect the
Companies. The Utilities' ability to gain access to additional energy supplies, if needed, depends on effective
markets and siting approvals for developer projects, which the Utilities do not control. See “CECONY - Gas Peak
Demand” in Item 1. The Clean Energy Businesses sell the output of their renewable electric production projects
under long-term power purchase agreements with utilities and municipalities, and a failure of the production projects
could adversely affect Con Edison.
The Companies Have Substantial Unfunded Pension And Other Postretirement Benefit Liabilities. The
Utilities have substantial unfunded pension and other postretirement benefit liabilities. The Utilities expect to make
substantial contributions to their pension and other postretirement benefit plans. Significant declines in the market
values of the investments held to fund pension and other postretirement benefits could trigger substantial funding
requirements under governmental regulations. See “Application of Critical Accounting Policies – Accounting for
Pensions and Other Postretirement Benefits” and “Financial and Commodity Market Risks” in Item 7 and Notes E
and F to the financial statements in Item 8.
Con Edison’s Ability To Pay Dividends Or Interest Depends On Dividends From Its Subsidiaries. Con
Edison’s ability to pay dividends on its common stock or interest on its external borrowings depends primarily on the
dividends and other distributions it receives from its subsidiaries. The dividends that the Utilities may pay to Con
Edison are limited by the NYSPSC to not more than 100 percent of their respective income available for dividends
calculated on a two-year rolling average basis, with certain exceptions. See “Dividends” in Note C and Note T to the
financial statements in Item 8.
The Companies Require Access To Capital Markets To Satisfy Funding Requirements. The Utilities estimate
that their construction expenditures will exceed $10,800 million over the next three years. The Utilities use
internally-generated funds, equity contributions from Con Edison, if any, and external borrowings to fund the
construction expenditures. The Clean Energy Businesses are investing in renewable generation and sustainable
energy infrastructure projects that require funds in excess of those produced in the businesses. Con Edison expects
to finance its capital requirements primarily through internally generated funds, the sale of its common shares or
external borrowings. Changes in financial market conditions or in the Companies’ credit ratings could adversely
affect their ability to raise new capital and the cost thereof. See “Capital Requirements and Resources” in Item 1.
Changes To Tax Laws Could Adversely Affect the Companies. Changes to tax laws, regulations or
interpretations thereof could have a material adverse impact on the Companies. Depending on the extent of these
changes, the changes could also adversely impact the Companies’ credit ratings and liquidity. The reduction in the
federal corporate income tax rate to 21 percent under the TCJA resulted in decreased cash flows from operating
activities, and requires increased cash flows from financing activities, for the Utilities. See “Capital Requirements
and Resources – Capital Resources” in Item 1, “Liquidity and Capital Resources – Cash Flows from Operating
Activities” in Item 7, "Rate Plans" and "Other Regulatory Matters" in Note B and Note L to the financial statements in
Item 8.
48
CON EDISON ANNUAL REPORT 2020
Other Risks:
The Companies Face Risks Related To Health Epidemics And Other Outbreaks, Including The COVID-19
Pandemic. The COVID-19 pandemic has impacted, and continues to impact, countries, communities, supply
chains and markets. During 2020, the Companies’ service territories included some of the most severely impacted
counties in the United States. As a result of the COVID-19 pandemic, there has been an economic slowdown in the
Companies’ service territories, decreased demand for the services that they provide and changes in governmental
and regulatory policy. The decline in business activity in the Companies’ service territories has resulted in lower
billed sales revenues and increased difficulty of customers to pay bills. Although the Utilities’ New York electric and
gas businesses have largely effective revenue decoupling mechanisms in place, lower billed sales revenues and
higher uncollectible accounts have impacted and could continue to impact the Companies’ liquidity. The Utilities
have also suspended service disconnections, new late payment charges and certain other fees for customers,
which may result in a further increase to bad debt expense. The Companies will continue to monitor developments
relating to the COVID-19 pandemic; however, the Companies cannot predict the extent to which, COVID-19 may
have a material impact on liquidity, financial condition, and results of operations. The situation is changing rapidly
and future impacts may materialize that are not yet known. Accordingly, the extent to which COVID-19 may impact
these matters will depend on future developments that are highly uncertain and cannot be predicted, including the
success of vaccination efforts, actions that federal, state and local governmental or regulatory agencies may
continue to take in response to the COVID-19 pandemic, and other actions taken to contain it or treat its impact,
among others. See “Coronavirus Disease 2019 (COVID-19) Impacts” in Item 7 and “COVID-19 Regulatory Matters”
in Note B.
The Companies’ Strategies May Not Be Effective To Address Changes In The External Business
Environment. The failure to identify, plan and execute strategies to address changes in the external business
environment could have a material adverse impact on the Companies. Con Edison seeks to provide shareholder
value through continued dividend growth, supported by earnings growth in regulated utilities and contracted electric
and gas assets. Changes to public policy, laws or regulations (or interpretations thereof), customer behavior or
technology could significantly impact the value of the Utilities’ energy delivery facilities, the Clean Energy
Businesses’ renewable and sustainable energy infrastructure projects and Con Edison Transmission's investment in
electric and gas transmission projects. Such changes could also affect the Companies’ opportunities to make
additional investments in such assets and the potential return on the investments. The Utilities' gas delivery
customers and CECONY's steam delivery customers have alternatives, such as electricity and oil. Distributed
energy resources, and demand reduction and energy efficiency investments, provide ways for the energy
consumers within the Utilities’ service areas to manage their energy usage. The Companies expect distributed
energy resources and electric alternatives to gas and steam to increase, and for gas and steam usage to decrease,
as the CLCPA and the Climate Mobilization Act continue to be implemented. CECONY established a gas
moratorium in March 2019 on new gas service in most of Westchester County. CECONY filed a gas planning
analysis with the NYSPSC in July 2020 stating the moratorium could be lifted when increased pipeline capacity is
achieved or peak demand is reduced to a level that would enable the company to lift the moratorium and that it is
monitoring gas supply constraint in the New York City portion of its service territory. See "Clean Energy
Businesses," "Con Edison Transmission," "Environmental Matters - Clean Energy Future" and "Environmental
Matters - Climate Change," “Competition” and "CECONY - Gas Peak Demand" in Item 1.
The Companies Also Face Other Risks That Are Beyond Their Control. The Companies’ results of operations
can be affected by circumstances or events that are beyond their control. Weather and energy efficiency efforts
directly influence the demand for electricity, gas and steam service, and can affect the price of energy commodities.
Terrorist or other physical attacks or acts of war could damage the Companies' facilities. Economic conditions can
affect customers’ demand and ability to pay for service, which could adversely affect the Companies.
Item 1B: Unresolved Staff Comments
Con Edison
Con Edison has no unresolved comments from the SEC staff.
CECONY
CECONY has no unresolved comments from the SEC staff.
Item 2: Properties
Con Edison
Con Edison has no significant properties other than those of the Utilities and the Clean Energy Businesses.
CON EDISON ANNUAL REPORT 2020
49
For information about the capitalized cost of the Companies’ utility plant, net of accumulated depreciation, see
“Plant and Depreciation” in Note A to the financial statements in Item 8 (which information is incorporated herein by
reference).
CECONY
For a discussion of CECONY’s electric, gas and steam facilities, see “CECONY – Electric Operations – Electric
Facilities,” “CECONY – Gas Operations – Gas Facilities” and “CECONY – Steam Operations – Steam Facilities” in
Item 1 (which information is incorporated herein by reference).
O&R
For a discussion of O&R’s electric and gas facilities, see “O&R – Electric Operations – Electric Facilities” and “O&R
– Gas Operations – Gas Facilities” in Item 1 (which information is incorporated herein by reference).
Clean Energy Businesses
For a discussion of the Clean Energy Businesses’ facilities, see “Clean Energy Businesses” in Item 1 (which
information is incorporated herein by reference).
Con Edison Transmission
Con Edison Transmission has no properties. Con Edison Transmission has ownership interests in electric and gas
transmission companies. For information about these companies, see "Con Edison Transmission" in Item 1 (which
information is incorporated herein by reference).
Item 3: Legal Proceedings
For information about certain legal proceedings affecting the Companies, see “Other Regulatory Matters” in Note B,
and “Superfund Sites” and “Asbestos Proceedings” in Note G and “Manhattan Explosion and Fire” in Note H to the
financial statements in Item 8 and “Environmental Matters – CECONY – Superfund” and “Environmental Matters –
O&R – Superfund” in Item 1 of this report, which information is incorporated herein by reference.
Item 4: Mine Safety Disclosures
Not applicable.
50
CON EDISON ANNUAL REPORT 2020
Information about our Executive Officers
The following table sets forth certain information about the executive officers of Con Edison as of February 18,
2021. The term of office of each officer, is until the next election of directors (trustees) of their company and until his
or her successor is chosen and qualifies. Officers are subject to removal at any time by the board of directors
(trustees) of their company.
Name
Timothy P. Cawley
Age
56
Offices and Positions During Past Five Years
12/20 to present – President and Chief Executive Officer and Director of Con Edison and Chief
Executive Officer and Trustee of CECONY
Robert Hoglund
Matthew Ketschke
59
49
1/18 to 12/20 – President of CECONY
12/13 to 12/17 – President and Chief Executive Officer of O&R
9/05 to present – Senior Vice President and Chief Financial Officer of Con Edison and CECONY
1/21 to present – President of CECONY
11/17 to 12/20 – Senior Vice President – Customer Energy Solutions
7/15 to 10/17 – Vice President – Distributed Resource Integration
Robert Sanchez
55
12/17 to present – President and Chief Executive Officer of O&R
11/17 – Senior Vice President of CECONY
9/16 to 10/17 – Senior Vice President – Corporate Shared Services of CECONY
9/14 to 8/16 – Vice President – Brooklyn & Queens Electric Operations of CECONY
Mark Noyes
56
12/16 to present – President and Chief Executive Officer of Con Edison Clean Energy Businesses, Inc.
5/16 to present – President and Chief Executive Officer of Consolidated Edison Solutions, Inc.
10/15 to present – President and Chief Executive Officer of Consolidated Edison Development, Inc.
and Consolidated Edison Energy, Inc.
Stuart Nachmias
Deneen L. Donnley
Frances A. Resheske
Mary E. Kelly
56
56
60
52
1/20 to present – President and Chief Executive Officer of Con Edison Transmission, Inc.
05/08 to 12/19 – Vice President of Energy Policy and Regulatory Affairs of CECONY
1/20 to present – Senior Vice President and General Counsel of Con Edison and CECONY
10/19 to 12/19 – Senior Vice President of Con Edison and CECONY
9/15 to 10/19 – Executive Vice President, Chief Legal Officer and Corporate Secretary – USAA
2/02 to present – Senior Vice President – Corporate Affairs of CECONY
11/17 to present – Senior Vice President – Corporate Shared Services of CECONY
1/16 to 10/17 – Vice President – Gas Engineering
1/14 to 12/15 – Vice President – Construction
Lore de la Bastide
59
7/19 to present – Senior Vice President – Utility Shared Services of CECONY
6/19 – Senior Vice President of CECONY
11/14 to 5/19 – Vice President and General Auditor of CECONY
Joseph Miller
58
1/21 to present – Vice President and Controller of Con Edison and CECONY
1/21 to present – Chief Financial Officer and Controller of O&R
8/06 to 12/20 – Assistant Controller of Corporate Accounting of CECONY
Yukari Saegusa
53
9/16 to present – Treasurer of Con Edison and CECONY
8/16 to present – Vice President of Con Edison and CECONY
8/13 to present – Treasurer of O&R
3/13 to 7/16 – Director of Corporate Finance of CECONY
Gurudatta Nadkarni
55
1/08 to present – Vice President of Strategic Planning of CECONY
CON EDISON ANNUAL REPORT 2020
51
Part II
Item 5: Market for the Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of
Equity Securities
Con Edison
Con Edison’s Common Shares ($.10 par value), the only class of common equity of Con Edison, are traded on the
New York Stock Exchange under the trading symbol "ED." As of January 31, 2021, there were 40,198 holders of
record of Con Edison’s Common Shares. Con Edison paid quarterly dividends of 74 cents per Common Share in
2019 and quarterly dividends of 76.5 cents per Common Share in 2020. On January 21, 2021, Con Edison declared
a quarterly dividend of 77.5 cents per Common Share that is payable on March 15, 2021. Con Edison expects to
pay dividends to its shareholders primarily from dividends and other distributions it receives from its subsidiaries.
The payment of future dividends is subject to approval and declaration by Con Edison’s Board of Directors and will
depend on a variety of factors including business, financial and regulatory considerations. For additional information
about the payment of dividends by the Utilities to Con Edison, and restrictions thereon, see “Dividends” in Note C to
the financial statements in Item 8 (which information is incorporated herein by reference).
During 2020, the market price of Con Edison’s Common Shares decreased by 20.1 percent (from $90.47 at year-
end 2019 to $72.27 at year-end 2020). By comparison, the S&P 500 Index increased 16.3 percent and the S&P 500
Utilities Index decreased 2.8 percent. The total return to Con Edison’s common shareholders during 2020, including
both price depreciation and investment of dividends, was (17) percent. By comparison, the total returns for the S&P
500 Index and the S&P 500 Utilities Index were 18.4 percent and 0.5 percent, respectively. For the five-year period
2016 through 2020 inclusive, Con Edison’s shareholders’ total return was 34.7 percent, compared with total returns
for the S&P 500 Index and the S&P 500 Utilities Index of 103.0 percent and 72.3 percent, respectively.
Company / Index
Consolidated Edison, Inc.
S&P 500 Index
S&P Utilities
Years Ended December 31,
2015
100.00
100.00
100.00
2016
118.90
111.96
116.29
2017
141.84
136.40
130.36
2018
132.45
130.42
135.72
2019
162.31
171.49
171.48
2020
134.73
203.04
172.31
Based on $100 invested at December 31, 2015, reinvestment of all dividends in equivalent shares of stock and market price changes on all such
shares.
52
CON EDISON ANNUAL REPORT 2020
CECONY
The outstanding shares of CECONY’s Common Stock ($2.50 par value) are the only class of common equity of
CECONY. They are held by Con Edison and are not traded.
The dividends declared by CECONY in 2019 and 2020 are shown in its Consolidated Statement of Shareholder’s
Equity included in Item 8 (which information is incorporated herein by reference). For additional information about
the payment of dividends by CECONY, and restrictions thereon, see “Dividends” in Note C to the financial
statements in Item 8 (which information is incorporated herein by reference).
Item 6: Selected Financial Data
For selected financial data of Con Edison and CECONY, see “Introduction” appearing before Item 1 (which selected
financial data is incorporated herein by reference).
CON EDISON ANNUAL REPORT 2020
53
Item 7: 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 relates to the
consolidated financial statements included in this report of two separate registrants: Con Edison and CECONY, and
should be read in conjunction with the financial statements and the notes thereto. 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.
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.
Corporate Overview
Con Edison’s principal business operations are those of the Utilities. Con Edison's business operations also include
those of the Clean Energy Businesses and Con Edison Transmission. See “Significant Developments and Outlook”
in the Introduction to this report, “The Utilities,” “Clean Energy Businesses” and "Con Edison Transmission" in
Item 1, and segment financial information in Note O to the financial statements in Item 8. Certain financial data of
Con Edison’s businesses are presented below:
(Millions of Dollars,
except percentages)
CECONY
O&R
Total Utilities
Clean Energy Businesses (a)
Con Edison Transmission (b)
Other (c)
Total Con Edison
For the Year Ended December 31, 2020
At December 31, 2020
Operating
Revenues
$10,647
862
11,509
736
4
(3)
Net Income for
Common Stock
87%
7%
94%
6%
—%
—%
$1,185
71
1,256
24
(175)
(4)
$12,246
100%
$1,101
108%
6%
114%
2 %
(16) %
— %
100%
Assets
$50,967
3,247
54,214
6,848
1,348
485
81%
5%
86%
11%
2%
1%
$62,895
100%
(a) Net income for common stock from the Clean Energy Businesses for the year ended December 31, 2020 includes $(43) million of net after-
tax mark-to-market losses and reflects $32 million (after-tax) of income attributable to the non-controlling interest of a tax equity investor in
renewable electric production projects accounted for under the HLBV method of accounting. See Note R to the financial statements in Item
8.
(b) Net income for common stock from Con Edison Transmission for the year ended December 31, 2020 includes $(232) million of a net after-
tax impairment loss related to its investment in Mountain Valley Pipeline, LLC. See "Application of Critical Accounting Policies -
Investments" in Item 7 and "Investments" in Note A to the financial statements in Item 8.
(c) Other includes parent company and consolidation adjustments. Net income for common stock includes $9 million of income tax impact for
the impairment loss related to investment in Mountain Valley Pipeline, LLC.
Coronavirus Disease 2019 (COVID-19) Impacts
The Companies continue to respond to the Coronavirus Disease 2019 (COVID-19) global pandemic by working to
reduce the potential risks posed by its spread to employees, customers and other stakeholders. The Companies
continue to employ an incident command structure led by a pandemic planning team. The Companies support
employee health and facility hygiene through mandatory pre-entry symptom surveys for employees arriving at all
company locations, regular cleaning and disinfecting of all work and common areas, promoting social distancing
and directing employees to work remotely whenever possible. Employees who test positive for COVID-19 are
directed to quarantine at home and are evaluated for close, prolonged contact with other employees that would
require those employees to quarantine at home. Following the Centers for Disease Control and Prevention
guidelines, sick or quarantined employees return to work when they can safely do so. The Utilities continue to
provide critical electric, gas and steam service to customers during the pandemic. Additional safety protocols have
been implemented to protect employees, customers and the public, when work at customer premises is required. As
a result of COVID-19 clusters that have arisen in various areas of New York within the Utilities’ service territory, the
Utilities have limited their work in customer premises in the impacted areas to only address emergency, safety-
related and selected service connections requested by customers. The Companies have procured an inventory of
pandemic-related materials to address anticipated future needs and maintain regular communications with key
suppliers.
Below is additional information related to the effects of the COVID-19 pandemic and the Companies’ actions. Also,
see “COVID-19 Regulatory Matters” in Note B to the financial statements in Item 8, which information is
incorporated herein by reference.
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CON EDISON ANNUAL REPORT 2020
Impact of CARES Act and 2021 Appropriations Act on Accounting for Income Taxes
In response to the economic impacts of the COVID-19 pandemic, the Coronavirus Aid, Relief, and Economic
Security (CARES) Act became law on March 27, 2020. The CARES Act has several key business tax relief
measures that may present potential cash benefits and/or refund opportunities for Con Edison and its subsidiaries,
including permitting a five-year carryback of a net operating loss (NOL) for tax years 2018, 2019 and 2020,
temporary removal of the 80 percent limitation of NOL carryforwards against taxable income for tax years before
2021, temporary relaxation of the limitations on interest deductions, Employee Retention Tax Credit and deferral of
payments of employer payroll taxes.
Con Edison carried back its NOL of $29 million from tax year 2018 to tax year 2013. This allowed Con Edison,
mostly at the Clean Energy Businesses, to receive a $2.5 million net tax refund and to recognize a discrete income
tax benefit of $4 million in 2020, due to the higher federal statutory tax rate in 2013. See "Income Tax" in Note L.
Con Edison and its subsidiaries did not have a federal NOL in tax years 2019 or 2020.
Con Edison and its subsidiaries benefited by the increase in the percentage for calculating the limitation on the
interest expense deduction from 30 percent of Adjusted Taxable Income (ATI) to 50 percent of ATI in 2019 and
2020, which allowed the Companies to deduct 100 percent of their interest expense.
The Companies qualify for an employee retention tax credit created under the CARES Act for "eligible employers"
related to governmental authorities imposing restrictions that partially suspended their operations for a portion of
their workforce due to the COVID-19 pandemic and the Companies continued to pay them. For the year ended
December 31, 2020, Con Edison and CECONY recognized a tax benefit to Taxes, other than income taxes of $10
million and $7 million, respectively.
The CARES Act also allows employers to defer payments of the employer share of Social Security payroll taxes that
would have otherwise been owed from March 27, 2020 through December 31, 2020. The Companies deferred the
payment of employer payroll taxes for the period April 1, 2020 through December 31, 2020 of approximately $71
million ($63 million of which is for CECONY). The Companies will repay half of this liability by December 31, 2021
and the other half by December 31, 2022.
In December 2020, the Consolidated Appropriations Act, 2021 (the 2021 Appropriations Act) was signed into law.
The 2021 Appropriations Act, among other things, extends the expiring employee retention tax credit to include
qualified wages paid in the first two quarters of 2021, increases the qualified wages paid to an employee from 50
percent up to $10,000 annually in 2020 to 70 percent up to $10,000 per quarter in 2021 and increases the maximum
employee retention tax credit amount an employer can take per employee from $5,000 in 2020 to $14,000 in the
first two quarters of 2021.
Accounting Considerations
Due to the COVID-19 pandemic and subsequent New York State on PAUSE and related executive orders, decline in
business, bankruptcies, layoffs and furloughs, among other factors, both commercial and residential customers may
have increased difficulty paying their utility bills. CECONY and O&R have existing allowances for uncollectible
accounts established against their customer accounts receivable balances that are reevaluated each quarter and
updated accordingly. Changes to the Utilities’ reserve balances that result in write-offs of customer accounts
receivable balances are not reflected in rates during the term of the current rate plans. During 2020, the potential
economic impact of the COVID-19 pandemic was also considered in forward-looking projections related to write-off
and recovery rates, resulting in increases to the customer allowance for uncollectible accounts as detailed herein.
CECONY’s and O&R’s allowances for uncollectible customer accounts reserve increased from $65 million and
$4.6 million at December 31, 2019 to $138 million and $8.7 million at December 31, 2020, respectively. See Note A
and "COVID-19 Regulatory Matters" in Note B to the Financial Statements in Item 8.
The Companies test goodwill for impairment at least annually or whenever there is a triggering event, and test long-
lived and intangible assets for recoverability when events or changes in circumstances indicate that the carrying
value of long-lived or intangible assets may not be recoverable. The Companies identified no triggering events or
changes in circumstances related to the COVID-19 pandemic that would indicate that the carrying value of goodwill,
long-lived or intangible assets may not be recoverable at December 31, 2020. See Notes A and K to the financial
statements in Item 8.
Liquidity and Financing
The Companies continue to monitor the impacts of the COVID-19 pandemic on the financial markets closely,
including borrowing rates and daily cash collections. The Companies have been able to access the capital markets
as needed since the start of the COVID-19 pandemic in March 2020. See Notes C and D to the financial statements
CON EDISON ANNUAL REPORT 2020
55
in Item 8. However, a continued economic downturn as a result of the COVID-19 pandemic could increase the
amount of capital needed by the Utilities and the costs of such capital.
The decline in business activity in the Utilities’ service territory as a result of the COVID-19 pandemic resulted in
lower billed sales revenues in 2020 and a slower recovery in cash of outstanding customer accounts receivable
balances and is expected to continue to do so in 2021. 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 accumulate the deferred balances semi-
annually under CECONY's electric rate plan (January through June and July through December, respectively) and
annually under CECONY's gas rate plan and O&R New York's electric and gas rate plans (January through
December). Differences are accrued with interest each month for CECONY's and O&R New York’s electric
customers and after the annual deferral period ends for CECONY's and O&R New York’s gas customers for refund
to, or recovery from customers, as applicable. Generally, the refund to or recovery from customers begins August
and February of each year over an ensuing six-month period for CECONY's electric customers and February of
each year over an ensuing twelve-month period for CECONY's gas and O&R New York's electric and gas
customers. Although these revenue decoupling mechanisms are in place, lower billed sales revenues and higher
uncollectible accounts have reduced and is expected to continue to reduce liquidity at the Utilities. Also, 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 and such suspensions may continue
through 2021 or later. For the year ended December 31, 2020, the estimated foregone revenues that were not
collected by the Utilities were approximately $61 million for CECONY and $3 million for O&R. These foregone
revenues have reduced and may continue to reduce liquidity at the Utilities. See Note A and "COVID-19 Regulatory
Matters" in Note B to the financial statements in Item 8.
Con Edison and the Utilities also have a $2,250 million credit agreement (Credit Agreement) in place under which
banks are committed to provide loans on a revolving credit basis until December 2023 ($2,200 million of
commitments from December 2022). Con Edison and the Utilities have not entered into any loans under the Credit
Agreement. See Note D to the financial statements in Item 8.
Results of Operations
Net income for common stock and earnings per share for the years ended December 31, 2020, 2019 and 2018
were as follows:
(Millions of Dollars,
except per share amounts)
CECONY
O&R
Clean Energy Businesses (a)(b)
Con Edison Transmission (c)
Other (d)
Con Edison (e)
Net Income for
Common Stock
Earnings per Share
2019
$1,250
70
(18)
52
(11)
$1,343
2018
$1,196
59
145
47
(65)
$1,382
2020
$3.54
0.21
0.07
(0.52)
(0.01)
$3.29
2019
$3.80
0.21
(0.06)
0.16
(0.02)
$4.09
2018
$3.84
0.19
0.46
0.15
(0.21)
$4.43
2020
$1,185
71
24
(175)
(4)
$1,101
(a) Net income for common stock from the Clean Energy Businesses for the year ended December 31, 2020 and 2019 reflects $32 million or
$0.10 a share (after-tax) and $74 million or $0.22 a share (after-tax) of income attributable to the non-controlling interest of a tax equity
investor in renewable electric production projects accounted for under the HLBV method of accounting. See Note R to the financial
statements in Item 8. Net income for common stock from the Clean Energy Businesses also includes $(43) million or $(0.13) a share, $(21)
million or $(0.07) a share and $(6) million or $(0.02) a share of net after-tax mark-to-market losses in 2020, 2019 and 2018, respectively.
In December 2018, the Clean Energy Businesses acquired Sempra Solar Holdings, LLC. Upon completion of the acquisition, the Clean
Energy Businesses recognized an after-tax gain of $89 million or $0.28 per share with respect to jointly-owned renewable energy production
projects. See Note V to the financial statements in Item 8.
(b)
(c) Net income for common stock from Con Edison Transmission for the year ended December 31, 2020 includes $(232) million or $(0.69) a
share of net after-tax impairment loss related to its investment in Mountain Valley Pipeline, LLC. See "Application of Critical Accounting
Policies - Investments" in Item 7 and “Investments” in Note A to the financial statements in Item 8.
(d) Other includes parent company and consolidation adjustments. Net income for common stock includes $9 million or $0.03 a share of
income tax impact for the impairment loss related to Con Edison Transmission’s investment in Mountain Valley Pipeline, LLC. See
“Investments” in Note A to the financial statements in Item 8. Net income for common stock includes $(42) million or $(0.14) a share of
income tax expense resulting from a re-measurement of the company's deferred tax assets and liabilities following the issuance of proposed
regulations relating to the TCJA for the year ended December 31, 2018. See Note L to the financial statements in Item 8. Net income for
common stock for the year ended December 31, 2018 also includes $(8) million or $(0.02) a share of the after-tax transaction costs related
to the Clean Energy Businesses' purchase of Sempra Solar Holdings, LLC. See Note V to the financial statements in Item 8.
(e) Earnings per share on a diluted basis were $3.28 a share, $4.08 a share and $4.42 a share in 2020, 2019 and 2018, respectively. See
"Earnings Per Common Share" in Note A to the financial statements in Item 8.
56
CON EDISON ANNUAL REPORT 2020
The following tables present the estimated effect of major factors on earnings per share and net income for common
stock for the years ended December 31, 2020 as compared with 2019, and 2019 as compared with 2018.
CON EDISON ANNUAL REPORT 2020
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T
CON EDISON ANNUAL REPORT 2020
59
The Companies’ other operations and maintenance expenses for the years ended December 31, 2020, 2019 and
2018 were as follows:
(Millions of Dollars)
CECONY
Operations
Pensions and other postretirement benefits
Health care and other benefits
Regulatory fees and assessments (a)
Other
Total CECONY
O&R
Clean Energy Businesses
Con Edison Transmission
Other (b)
2020
2019
2018
$1,606
(103)
151
330
285
2,269
310
228
11
(4)
$1,563
$1,553
134
170
464
304
71
166
444
321
2,635
2,555
308
223
9
—
305
287
10
(5)
Total other operations and maintenance expenses
$2,814
$3,175
$3,152
(a)
(b)
Includes Demand Side Management, System Benefit Charges and Public Service Law 18A assessments which are collected in revenues.
Includes parent company and consolidation adjustments.
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. A discussion of the results of operations by principal business
segment for the years ended December 31, 2020, 2019 and 2018 follows. For additional business segment financial
information, see Note O to the financial statements in Item 8.
60
CON EDISON ANNUAL REPORT 2020
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CON EDISON ANNUAL REPORT 2020
61
Year Ended December 31, 2020 Compared with Year Ended December 31, 2019
CECONY
(Millions of Dollars)
Operating revenues
Purchased power
Fuel
Gas purchased for resale
Other operations and maintenance
Depreciation and amortization
Taxes, other than income taxes
Operating income
For the Year Ended
December 31, 2020
For the Year Ended
December 31, 2019
Electric
Gas
Steam
2020
Total Electric
Gas
Steam
2019
Total
2020-2019
Variation
$8,103
$2,036
$508
$10,647
$8,062
$2,132
$627
$10,821
$(174)
1,405
75
—
1,753
1,214
1,925
—
—
426
355
294
387
$1,731
$574
27
81
—
161
90
144
$5
1,432
1,324
156
426
2,269
1,598
2,456
99
—
2,059
1,053
1,769
—
—
606
399
231
368
$2,310
$1,758
$528
33
108
—
177
89
158
$62
1,357
207
606
2,635
1,373
2,295
$2,348
75
(51)
(180)
(366)
225
161
$(38)
Electric
CECONY’s results of electric operations for the year ended December 31, 2020 compared with the year ended
December 31, 2019 were as follows:
(Millions of Dollars)
Operating revenues
Purchased power
Fuel
Other operations and maintenance
Depreciation and amortization
Taxes, other than income taxes
Electric operating income
For the Years Ended December 31,
2020
$8,103
1,405
75
1,753
1,214
1,925
2019
$8,062
1,324
99
2,059
1,053
1,769
$1,731
$1,758
Variation
$41
81
(24)
(306)
161
156
$(27)
CECONY’s electric sales and deliveries in 2020 compared with 2019 were:
Millions of kWh Delivered
Revenues in Millions (a)
For the Years Ended
For the Years Ended
Description
Residential/Religious (b)
Commercial/Industrial
Retail choice customers
NYPA, Municipal Agency and
other sales
Other operating revenues (c)
Total
December
31, 2020
December
31, 2019 Variation
Percent
Variation
December
31, 2020
December
31, 2019 Variation
Percent
Variation
11,107
9,280
22,000
9,184
—
10,560
9,908
547
(628)
5.2%
(6.3)
24,754
(2,754)
(11.1)
9,932
—
(748)
—
(7.5)
—
$2,901
1,876
2,391
665
270
$2,671
1,845
2,470
663
413
51,571
55,154
(3,583)
(6.5) % (d)
$8,103
$8,062
$230
31
(79)
2
(143)
$41
8.6%
1.7
(3.2)
0.3
(34.6)
0.5%
(a) Revenues from electric sales are subject to a revenue decoupling mechanism, as a result of which, delivery revenues are generally not
(b)
affected by changes in delivery volumes from levels assumed when rates were approved.
“Residential/Religious” generally includes single-family dwellings, individual apartments in multi-family dwellings, religious organizations
and certain other not-for-profit organizations.
(c) Other electric operating revenues generally reflect changes in the revenue decoupling mechanism current asset or regulatory liability and
changes in regulatory assets and liabilities in accordance with other provisions of the company’s rate plan.
(d) After adjusting for variations, primarily weather and billing days, electric delivery volumes in the company’s service area decreased 6.1
percent in 2020 compared with 2019. See “Coronavirus Disease 2019 (COVID-19) Impacts,” above.
Operating revenues increased $41 million in 2020 compared with 2019 primarily due to higher purchased power
expenses ($81 million), offset in part by lower fuel expenses ($24 million) and lower revenues from the electric rate
plan ($16 million).
Purchased power expenses increased $81 million in 2020 compared with 2019 due to higher unit costs ($158
million), offset in part by lower purchased volumes ($77 million).
62
CON EDISON ANNUAL REPORT 2020
Fuel expenses decreased $24 million in 2020 compared with 2019 due to lower unit costs ($31 million), offset in
part by higher purchased volumes from the company’s electric generating facilities ($7 million).
Other operations and maintenance expenses decreased $306 million in 2020 compared with 2019 primarily due to
lower costs for pension and other postretirement benefits ($195 million), lower surcharges for assessments and fees
that are collected in revenues from customers ($110 million), lower stock-based compensation ($25 million) and
lower healthcare costs ($16 million), offset in part by incremental costs associated with the COVID-19 pandemic
($14 million), higher municipal infrastructure support costs ($9 million) and food and medicine spoilage claims
related to outages caused by Tropical Storm Isaias ($7 million).
Depreciation and amortization increased $161 million in 2020 compared with 2019 primarily due to higher electric
utility plant balances and higher depreciation rates.
Taxes, other than income taxes increased $156 million in 2020 compared with 2019 primarily due to higher property
taxes ($105 million), lower deferral of under-collected property taxes ($38 million), higher state and local taxes ($11
million) and the absence in 2020 of a reduction in the sales and use tax reserve upon conclusion of the audit
assessment ($5 million), offset in part by lower payroll taxes ($3 million) due to the Employee Retention Tax Credit
created under the CARES Act. See “Coronavirus Disease 2019 (COVID-19) Impacts - Impact of CARES Act and
2021 Appropriations Act on Accounting for Income Taxes,” above.
Gas
CECONY’s results of gas operations for the year ended December 31, 2020 compared with the year ended
December 31, 2019 were as follows:
(Millions of Dollars)
Operating revenues
Gas purchased for resale
Other operations and maintenance
Depreciation and amortization
Taxes, other than income taxes
Gas operating income
For the Years Ended December 31,
2020
$2,036
426
355
294
387
$574
2019
$2,132
606
399
231
368
$528
Variation
$(96)
(180)
(44)
63
19
$46
CECONY’s gas sales and deliveries, excluding off-system sales, in 2020 compared with 2019 were:
Description
Residential
General
Firm transportation
Total firm sales and
transportation
Interruptible sales (c)
NYPA
Generation plants
Other
Other operating revenues (d)
Total
Thousands of Dt Delivered
Revenues in Millions (a)
For the Years Ended
For the Years Ended
December
31, 2020
December
31, 2019 Variation
Percent
Variation
December
31, 2020
December
31, 2019 Variation
Percent
Variation
48,999
54,402
(5,403)
(9.9) %
29,516
33,235
(3,719)
(11.2)
76,614
81,710
(5,096)
(6.2)
$911
318
649
384
593
$943
$(32)
(3.4) %
155,129
169,347
(14,218)
(8.4)
(b)
1,878
1,920
8,482
9,903
(1,421)
(14.3)
41,577
39,643
1,934
4.9
49,723
52,011
(2,288)
(4.4)
20,814
20,701
—
—
113
—
0.5
—
27
2
22
33
74
42
2
23
31
114
275,725
291,605
(15,880)
(5.4) %
$2,036
$2,132
(66)
56
(42)
(15)
—
(1)
2
(40)
$(96)
(17.2)
9.4
(2.2)
(35.7)
—
(4.3)
6.5
(35.1)
(4.5) %
(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 decreased 0.7
(c)
percent in 2020 compared with 2019. See “Coronavirus Disease 2019 (COVID-19) Impacts,” above.
Includes 3,510 thousands and 5,484 thousands of Dt for 2020 and 2019, respectively, which are also reflected in firm transportation and
other.
(d) Other gas operating revenues generally reflect changes in the revenue decoupling mechanism and weather normalization clause current
asset or regulatory liability and changes in regulatory assets and liabilities in accordance with other provisions of the company’s rate plans.
See Note B to the financial statements in Item 8.
CON EDISON ANNUAL REPORT 2020
63
Operating revenues decreased $96 million in 2020 compared with 2019 primarily due to lower gas purchased for
resale expense ($180 million) and certain rate plan reconciliations ($6 million), offset in part by higher gas revenues
due to the gas base rates increase in January 2020 under the company's gas rate plan ($91 million).
Gas purchased for resale decreased $180 million in 2020 compared with 2019 due to lower unit costs ($110 million)
and lower purchased volumes ($70 million).
Other operations and maintenance expenses decreased $44 million in 2020 compared with 2019 primarily due to
lower costs for pension and other postretirement benefits ($31 million), lower stock-based compensation ($5
million), lower municipal infrastructure support costs ($5 million) and lower reserve for injuries and damages ($4
million).
Depreciation and amortization increased $63 million in 2020 compared with 2019 primarily due to higher gas utility
plant balances and higher depreciation rates.
Taxes, other than income taxes increased $19 million in 2020 compared with 2019 primarily due to higher property
taxes ($37 million), higher state and local taxes ($1 million) and the absence in 2020 of a reduction in the sales and
use tax reserve upon conclusion of the audit assessment ($1 million), offset in part by higher deferral of under-
collected property taxes ($19 million) and lower payroll taxes ($1 million) due to the Employee Retention Tax Credit
created under the CARES Act. See “Coronavirus Disease 2019 (COVID-19) Impacts - Impact of CARES Act and
2021 Appropriations Act on Accounting for Income Taxes,” above.
Steam
CECONY’s results of steam operations for the year ended December 31, 2020 compared with the year ended
December 31, 2019 were as follows:
(Millions of Dollars)
Operating revenues
Purchased power
Fuel
Other operations and maintenance
Depreciation and amortization
Taxes, other than income taxes
Steam operating income
CECONY’s steam sales and deliveries in 2020 compared with 2019 were:
For the Years Ended December 31,
2020
$508
27
81
161
90
144
$5
2019
$627
33
108
177
89
158
$62
Variation
$(119)
(6)
(27)
(16)
1
(14)
$(57)
Millions of Pounds Delivered
Revenues in Millions
For the Years Ended
For the Years Ended
December
31, 2020
December
31, 2019 Variation
Percent
Variation
December
31, 2020
December
31, 2019 Variation
Percent
Variation
Description
General
Apartment house
Annual power
445
5,131
536
(91)
(17.0) %
5,919
(788)
10,977
13,340
(2,363)
(13.3)
(17.7)
$23
136
321
28
$27
160
395
45
$(4)
(24)
(74)
(17)
(14.8) %
(15.0)
(18.7)
(37.8)
Other operating revenues (a)
—
—
—
—
Total
16,553
19,795
(3,242)
(16.4) % (b)
$508
$627
$(119)
(19.0) %
(a) Other steam operating revenues generally reflect changes in regulatory assets and liabilities in accordance with the company’s rate plan.
See Note B to the financial statements in Item 8.
(b) After adjusting for variations, primarily weather and billing days, steam sales and deliveries in the company’s service area decreased 6.7
percent in 2020 compared with 2019. See “Coronavirus Disease 2019 (COVID-19) Impacts,” above.
Operating revenues decreased $119 million in 2020 compared with 2019 primarily due to the impact of warmer
winter weather ($43 million), lower fuel expenses ($27 million), lower usage by customers due to the impact of the
COVID-19 pandemic ($19 million), certain rate plan reconciliations ($15 million) and lower purchased power
expenses ($6 million).
Purchased power expenses decreased $6 million in 2020 compared with 2019 due to lower unit costs ($3 million)
and purchased volumes ($3 million).
64
CON EDISON ANNUAL REPORT 2020
Fuel expenses decreased $27 million in 2020 compared with 2019 due to lower unit costs ($14 million) and lower
purchased volumes from the company’s steam generating facilities ($13 million).
Other operations and maintenance expenses decreased $16 million in 2020 compared with 2019 primarily due to
lower costs for pension and other postretirement benefits ($7 million) and lower municipal infrastructure support
costs ($7 million).
Depreciation and amortization increased $1 million in 2020 compared with 2019 primarily due to higher steam utility
plant balances.
Taxes, other than income taxes decreased $14 million in 2020 compared with 2019 primarily due to higher deferral
of under-collected property taxes ($20 million) and lower state and local taxes ($2 million), offset in part by higher
property taxes ($8 million).
Taxes, Other Than Income Taxes
At $2,456 million, taxes other than income taxes remain one of CECONY’s largest operating expenses. The
principal components of, and variations in, taxes other than income taxes were:
(Millions of Dollars)
Property taxes
State and local taxes related to revenue receipts
Payroll taxes
Other taxes
Total
For the Years Ended December 31,
2020
$2,129
338
64
(75)
2019
$1,979
328
69
(81)
$2,456 (a)
$2,295 (a)
Variation
$150
10
(5)
6
$161
(a)
Including sales tax on customers’ bills, total taxes other than income taxes in 2020 and 2019 were $2,989 and $2,807 million, respectively.
Other Income (Deductions)
Other income (deductions) decreased $136 million in 2020 compared with 2019 primarily due to higher costs
associated with components of pension and other postretirement benefits other than service cost ($117 million) and
the absence of the company’s share of gain on sale of properties in 2019 ($14 million).
Net Interest Expense
Net interest expense increased $11 million in 2020 compared with 2019 primarily due to higher interest on long-term
debt ($46 million), offset in part by a decrease in interest accrued on the TCJA related regulatory liability ($13
million), lower interest expense for short-term debt ($12 million) and lower interest accrued on the system benefit
charge liability ($8 million).
Income Tax Expense
Income taxes decreased $120 million in 2020 compared with 2019 primarily due to lower income before income tax
expense ($39 million), an increase in the amortization of excess deferred federal income taxes due to CECONY’s
electric and gas rate plans that went into effect in January 2020 ($103 million) and lower state income taxes ($13
million), offset in part by the absence of the amortization of excess deferred state income taxes in 2020 ($24
million), lower research and development credits in 2020 ($5 million) and lower flow-through tax benefits in 2020 for
plant-related items ($4 million).
O&R
(Millions of Dollars)
Operating revenues
Purchased power
Gas purchased for resale
Other operations and maintenance
Depreciation and amortization
Taxes, other than income taxes
Operating income
For the Year Ended
December 31, 2020
For the Year Ended
December 31, 2019
Electric
$629
169
—
242
65
54
$99
Gas
$233
—
61
68
25
31
2020
Total
$862
169
61
310
90
85
$48
$147
Electric
$634
188
—
235
60
53
$98
Gas
$259
—
90
73
24
31
2019
Total
2020-2019
Variation
$893
$(31)
188
90
308
84
84
(19)
(29)
2
6
1
$8
$41
$139
CON EDISON ANNUAL REPORT 2020
65
Electric
O&R’s results of electric operations for the year ended December 31, 2020 compared with the year ended
December 31, 2019 were as follows:
For the Years Ended December 31,
(Millions of Dollars)
Operating revenues
Purchased power
Other operations and maintenance
Depreciation and amortization
Taxes, other than income taxes
Electric operating income
2020
$629
169
242
65
54
$99
2019
$634
188
235
60
53
$98
O&R’s electric sales and deliveries in 2020 compared with 2019 were:
Description
Residential/Religious (b)
Commercial/Industrial
Retail choice customers
Public authorities
Other operating revenues (c)
Total
Millions of kWh Delivered
Revenues in Millions (a)
For the Years Ended
For the Years Ended
December
31, 2020
December
31, 2019 Variation
Percent
Variation
December
31, 2020
December
31, 2019 Variation
1,786
1,703
820
808
83
12
2,621
2,885
(264)
107
—
106
—
1
—
4.9%
1.5
(9.2)
0.9
—
$318
117
186
7
1
$309
112
191
8
14
5,334
5,502
(168)
(3.1) % (d)
$629
$634
$9
5
(5)
(1)
(13)
$(5)
Variation
$(5)
(19)
7
5
1
$1
Percent
Variation
2.9%
4.5
(2.6)
(12.5)
(92.9)
(0.8) %
(a) Revenues from New York electric delivery sales 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.
“Residential/Religious” generally includes single-family dwellings, individual apartments in multi-family dwellings, religious organizations
and certain other not-for-profit organizations.
(b)
(c) Other electric operating revenues generally reflect changes in the revenue decoupling mechanism current asset or regulatory liability in
accordance with the company’s New York electric rate plan and changes in regulatory assets and liabilities in accordance with the
company’s electric rate plans. See Note B to the financial statements in Item 8.
(d) After adjusting for weather and other variations, electric delivery volumes in company’s service area decreased 0.7 percent in 2020
compared with 2019. See “Coronavirus Disease 2019 (COVID-19) Impacts,” above.
Operating revenues decreased $5 million in 2020 compared with 2019 primarily due to lower purchased power
expenses ($19 million), offset in part by higher revenues from the New York electric rate plan ($16 million).
Purchased power expenses decreased $19 million in 2020 compared with 2019 due to lower unit costs.
Other operations and maintenance expenses increased $7 million in 2020 compared with 2019 primarily due to the
amortization of prior deferred storm costs ($3 million) and food and medicine spoilage claims related to outages
caused by Tropical Storm Isaias ($3 million).
Depreciation and amortization increased $5 million in 2020 compared with 2019 primarily due to higher electric
utility plant balances.
Taxes, other than income taxes increased $1 million in 2020 compared with 2019 primarily due to higher property
taxes ($2 million), offset in part by lower payroll taxes ($1 million).
Gas
O&R’s results of gas operations for the year ended December 31, 2020 compared with the year ended
December 31, 2019 were as follows:
66
CON EDISON ANNUAL REPORT 2020
(Millions of Dollars)
Operating revenues
Gas purchased for resale
Other operations and maintenance
Depreciation and amortization
Taxes, other than income taxes
Gas operating income
For the Years Ended December 31,
2020
$233
61
68
25
31
$48
2019
$259
90
73
24
31
$41
Variation
$(26)
(29)
(5)
1
—
$7
O&R’s gas sales and deliveries, excluding off-system sales, in 2020 compared with 2019 were:
Thousands of Dt Delivered
Revenues in Millions (a)
For the Years Ended
For the Years Ended
Description
Residential
General
Firm transportation
Total firm sales and
transportation
Interruptible sales
Generation plants
Other
Other gas revenues
Total
December
31, 2020
December
31, 2019
Variation
9,736
2,142
8,271
10,209
2,328
9,459
(473)
(186)
(1,188)
Percent
Variation
(4.6) %
(8.0)
(12.6)
20,149
21,996
(1,847)
(8.4)
(b)
3,632
3,668
59
658
—
4
914
—
(36)
55
(1.0)
Large
(256)
(28.0)
—
—
December
31, 2020
December
31, 2019
Variation
Percent
Variation
$121
$136
$(15)
(11.0) %
20
62
203
6
—
1
23
25
63
224
6
—
1
28
(5)
(1)
(20.0)
(1.6)
(21)
(9.4)
—
—
—
(5)
—
—
—
(17.9)
(10.0) %
24,498
26,582
(2,084)
(7.8) %
$233
$259
$(26)
(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, firm sales and transportation volumes in the company’s service area increased 0.6 percent
in 2020 compared with 2019. See “Coronavirus Disease 2019 (COVID-19) Impacts,” above.
Operating revenues decreased $26 million in 2020 compared with 2019 primarily due to lower gas purchased for
resale expense.
Gas purchased for resale decreased $29 million in 2020 compared with 2019 due to lower unit costs ($24 million)
and purchased volumes ($5 million).
Other operations and maintenance expenses decreased $5 million in 2020 compared with 2019 primarily due to
lower pension costs.
Depreciation and amortization increased $1 million in 2020 compared with 2019 primarily due to higher gas utility
plant balances.
Taxes, Other Than Income Taxes
Taxes, other than income taxes, increased $1 million in 2020 compared with 2019. The principal components of
taxes, other than income taxes, were:
(Millions of Dollars)
Property taxes
State and local taxes related to revenue receipts
Payroll taxes
Total
For the Years Ended December 31,
2020
$69
10
6
2019
$66
10
8
$85 (a)
$84 (a)
Variation
$3
—
(2)
$1
(a)
Including sales tax on customers’ bills, total taxes other than income taxes in 2020 and 2019 were $121 million and $116 million,
respectively.
Income Tax Expense
Income taxes increased $4 million in 2020 compared with 2019 primarily due to higher income before income tax
expense ($1 million), higher state income taxes ($1 million), lower flow-through tax benefits on plant-related items in
2020 ($1 million), and an increase in flow-through income tax expense on higher bad debt reserves in 2020 as
compared with 2019 ($1 million).
CON EDISON ANNUAL REPORT 2020
67
Clean Energy Businesses
The Clean Energy Businesses’ results of operations for the year ended December 31, 2020 compared with the year
ended December 31, 2019 were as follows:
(Millions of Dollars)
Operating revenues
Gas purchased for resale
Other operations and maintenance
Depreciation and amortization
Taxes, other than income taxes
Operating income
For the Years Ended December 31,
2020
$736
41
228
231
21
$215
2019
$857
185
223
226
21
$202
Variation
$(121)
(144)
5
5
—
$13
Operating revenues decreased $121 million in 2020 compared with 2019 primarily due to lower wholesale revenues
($136 million) and lower energy services revenues ($19 million), offset in part by higher renewable electric
production revenues ($34 million).
Gas purchased for resale decreased $144 million in 2020 compared with 2019 primarily due to lower purchased
volumes.
Other operations and maintenance expenses increased $5 million in 2020 compared with 2019 primarily due to an
increase in general operating expenses.
Depreciation and amortization increased $5 million in 2020 compared with 2019 primarily due to an increase in
renewable electric production projects in operation during 2020.
Net Interest Expense
Net interest expense increased $10 million in 2020 compared with 2019 primarily due to higher unrealized losses on
interest rate swaps in the 2020 period.
Income Tax Expense
Income taxes increased $14 million in 2020 compared with 2019 primarily due to higher income before income tax
expense ($1 million), lower income attributable to non-controlling interest ($13 million), and the absence of the
adjustment for prior period federal income tax returns primarily due to higher research and development credits in
2019 ($13 million), offset in part by a tax benefit due to the change in the federal corporate income tax rate
recognized for a loss carryback from the 2018 tax year to the 2013 tax year as allowed under the CARES Act ($4
million), a lower increase in uncertain tax position ($7 million) and higher renewable energy credits ($2 million).
Income Attributable to Non-Controlling Interest
Income attributable to non-controlling interest increased $54 million in 2020 compared with 2019 primarily due to
lower losses attributable in the 2020 period to a tax equity investor in renewable electric production projects
accounted for under the HLBV method of accounting. See Note R to the financial statements in Item 8.
Con Edison Transmission
Net Interest Expense
Net interest expense decreased $7 million in 2020 compared with 2019 primarily due to a reduction to short-term
borrowings and rates charged under an intercompany capital funding facility.
Other Income (Deductions)
Other income (deductions) decreased $319 million in 2020 compared with 2019 primarily due to an impairment loss
related to Con Edison Transmission's investment in Mountain Valley Pipeline, LLC. See "Application of Critical
Account Policies - Investments" in Item 7 and "Investments" in Note A to the financial statement in Item 8.
Income Tax Expense
Income taxes decreased $87 million in 2020 compared with 2019 primarily due to the MVP impairment loss
recorded in 2020 ($88 million).
68
CON EDISON ANNUAL REPORT 2020
Other
Taxes, Other Than Income Taxes
Taxes, other than income taxes increased $7 million in 2020 compared with 2019 primarily due to adjustments
made to the New York City capital tax for prior periods in the 2020 period.
Other Income (Deductions)
Other income (deductions) increased $7 million in 2020 compared with 2019 primarily due to the absence in 2020 of
an elimination related to interest income under the intercompany capital funding facility.
Income Tax Expense
Income taxes decreased $17 million in 2020 compared with 2019 primarily due to lower income before income tax
expense ($3 million), the reversal of a portion of a New York City valuation allowance ($9 million), and the MVP
impairment loss recorded in 2020 ($9 million), offset in part by lower consolidated state income tax benefits ($4
million).
During the fourth quarter of 2020, Con Edison reversed a portion of its valuation allowance that was recorded
against the deferred tax asset established for the New York City NOL. Management has reassessed its ability to
realize a portion of the deferred tax benefits generated primarily by its renewable energy projects due to the future
reversal of temporary differences associated with the accelerated tax depreciation and by implementing its strategy
to secure tax equity financing from third parties for which certain tax deductions and amortization will be specifically
allocated to members outside of the consolidated group.
CON EDISON ANNUAL REPORT 2020
69
Year Ended December 31, 2019 Compared with Year Ended December 31, 2018
CECONY
(Millions of Dollars)
Operating revenues
Purchased power
Fuel
Gas purchased for resale
Other operations and maintenance
Depreciation and amortization
Taxes, other than income taxes
Operating income
For the Year Ended
December 31, 2019
For the Year Ended
December 31, 2018
Electric
Gas
Steam
2019
Total Electric
Gas
Steam
2018
Total
2019-2018
Variation
$8,062
$2,132
$627
$10,821
$7,971
$2,078
$631
$10,680
$141
1,324
99
—
2,059
1,053
1,769
—
—
606
399
231
368
$1,758
$528
33
108
—
177
89
158
$62
1,357
1,393
207
158
—
—
606
—
643
2,635
1,373
2,295
1,961
984
1,676
420
205
332
$2,348
$1,799
$478
40
105
—
174
87
148
$77
1,433
263
643
2,555
1,276
2,156
$2,354
(76)
(56)
(37)
80
97
139
$(6)
Electric
CECONY’s results of electric operations for the year ended December 31, 2019 compared with the year ended
December 31, 2018 were as follows:
(Millions of Dollars)
Operating revenues
Purchased power
Fuel
Other operations and maintenance
Depreciation and amortization
Taxes, other than income taxes
Electric operating income
CECONY’s electric sales and deliveries in 2019 compared with 2018 were:
For the Years Ended December 31,
2019
$8,062
1,324
99
2,059
1,053
1,769
2018
$7,971
1,393
158
1,961
984
1,676
Variation
$91
(69)
(59)
98
69
93
$1,758
$1,799
$(41)
Description
Residential/Religious (b)
Commercial/Industrial
Retail choice customers
NYPA, Municipal Agency and
other sales
Other operating revenues (c)
Total
Millions of kWh Delivered
Revenues in Millions (a)
For the Years Ended
For the Years Ended
December
31, 2019
December
31, 2018 Variation
Percent
Variation
December
31, 2019
December
31, 2018 Variation
Percent
Variation
10,560
10,797
9,908
9,588
(237)
320
24,754
26,266
(1,512)
(2.2) %
3.3
(5.8)
9,932
10,186
(254)
(2.5)
—
—
—
—
$2,671
1,845
2,470
663
413
$2,846
$(175)
(6.1) %
1,850
2,624
662
(11)
(5)
(154)
1
424
$91
(0.3)
(5.9)
0.2
Large
1.1%
55,154
56,837
(1,683)
(3.0) % (d)
$8,062
$7,971
(a) Revenues from electric sales are subject to a revenue decoupling mechanism, as a result of which, delivery revenues are generally not
(b)
affected by changes in delivery volumes from levels assumed when rates were approved.
“Residential/Religious” generally includes single-family dwellings, individual apartments in multi-family dwellings, religious organizations
and certain other not-for-profit organizations.
(c) Other electric operating revenues generally reflect changes in the revenue decoupling mechanism current asset or regulatory liability and
changes in regulatory assets and liabilities in accordance with other provisions of the company’s rate plan.
(d) After adjusting for variations, primarily weather and billing days, electric delivery volumes in the company’s service area decreased 1.1
percent in 2019 compared with 2018.
Operating revenues increased $91 million in 2019 compared with 2018 primarily due to an increase in revenues
from the rate plan ($215 million), including earnings adjustment mechanism incentives for energy efficiency ($22
million), offset in part by lower purchased power expenses ($69 million) and fuel expenses ($59 million).
Purchased power expenses decreased $69 million in 2019 compared with 2018 due to lower unit costs ($199
million), offset in part by higher purchased volumes ($130 million).
70
CON EDISON ANNUAL REPORT 2020
Fuel expenses decreased $59 million in 2019 compared with 2018 due to lower unit costs ($54 million) and
purchased volumes from the company’s electric generating facilities ($5 million).
Other operations and maintenance expenses increased $98 million in 2019 compared with 2018 primarily due to
higher costs for pension and other postretirement benefits ($91 million), surcharges for assessments and fees that
are collected in revenues from customers ($40 million) and higher stock-based compensation ($23 million), offset in
part by lower other employee benefits ($41 million) and municipal infrastructure support costs ($12 million).
Depreciation and amortization increased $69 million in 2019 compared with 2018 primarily due to higher electric
utility plant balances.
Taxes, other than income taxes increased $93 million in 2019 compared with 2018 primarily due to higher property
taxes ($86 million) and the absence of a New York State sales and use tax refund received in 2018 ($26 million),
offset in part by higher deferral of under-collected property taxes ($11 million), the reduction in the sales and use tax
reserve upon conclusion of an audit assessment ($6 million) and lower state and local taxes ($2 million).
Gas
CECONY’s results of gas operations for the year ended December 31, 2019 compared with the year ended
December 31, 2018 were as follows:
(Millions of Dollars)
Operating revenues
Gas purchased for resale
Other operations and maintenance
Depreciation and amortization
Taxes, other than income taxes
Gas operating income
For the Years Ended December 31,
2019
$2,132
606
399
231
368
$528
2018
$2,078
643
420
205
332
$478
Variation
$54
(37)
(21)
26
36
$50
CECONY’s gas sales and deliveries, excluding off-system sales, in 2019 compared with 2018 were:
Description
Residential
General
Firm transportation
Total firm sales and
transportation
Interruptible sales (c)
NYPA
Generation plants
Other
Thousands of Dt Delivered
Revenues in Millions (a)
For the Years Ended
For the Years Ended
December
31, 2019
December
31, 2018 Variation
Percent
Variation
December
31, 2019
December
31, 2018 Variation
Percent
Variation
54,402
57,815
(3,413)
(5.9) %
33,235
34,490
(1,255)
81,710
82,472
(762)
(3.6)
(0.9)
$943
384
593
$966
$(23)
(2.4) %
390
595
(6)
(2)
169,347
174,777
(5,430)
(3.1)
(b)
1,920
1,951
(31)
9,903
7,351
2,552
39,643
34,079
5,564
34.7
16.3
52,011
72,524
(20,513)
(28.3)
20,701
20,822
(121)
(0.6)
42
2
23
31
114
40
2
26
31
28
2
—
(3)
—
86
(1.5)
(0.3)
(1.6)
5.0
—
(11.5)
—
Large
2.6%
Other operating revenues (d)
—
—
—
—
Total
291,605
309,553
(17,948)
(5.8) %
$2,132
$2,078
$54
(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 1.8
percent in 2019 compared with 2018, reflecting primarily increased volumes attributable to the growth in the number of gas customers.
Includes 5,484 thousands and 3,326 thousands of Dt for 2019 and 2018, respectively, which are also reflected in firm transportation and
other.
(c)
(d) Other gas operating revenues generally reflect changes in the revenue decoupling mechanism and weather normalization clause current
asset or regulatory liability and changes in regulatory assets and liabilities in accordance with other provisions of the company’s rate plans.
See Note B to the financial statements in Item 8.
Operating revenues increased $54 million in 2019 compared with 2018 primarily due to an increase in revenues
from the rate plan ($99 million), offset in part by lower gas purchased for resale expense ($37 million).
CON EDISON ANNUAL REPORT 2020
71
Gas purchased for resale decreased $37 million in 2019 compared with 2018 due to lower unit costs ($34 million)
and purchased volumes ($3 million).
Other operations and maintenance expenses decreased $21 million in 2019 compared with 2018 primarily due to
lower surcharges for assessments and fees that are collected in revenues from customers.
Depreciation and amortization increased $26 million in 2019 compared with 2018 primarily due to higher gas utility
plant balances.
Taxes, other than income taxes increased $36 million in 2019 compared with 2018 primarily due to higher property
taxes ($37 million), the absence of a New York State sales and use tax refund received in 2018 ($3 million) and
higher state and local taxes ($2 million), offset in part by higher deferral of under-collected property taxes ($4
million) and the reduction in the sales and use tax reserve upon conclusion of an audit assessment ($1 million).
Steam
CECONY’s results of steam operations for the year ended December 31, 2019 compared with the year ended
December 31, 2018 were as follows:
(Millions of Dollars)
Operating revenues
Purchased power
Fuel
Other operations and maintenance
Depreciation and amortization
Taxes, other than income taxes
Steam operating income
CECONY’s steam sales and deliveries in 2019 compared with 2018 were:
For the Years Ended December 31,
2019
$627
33
108
177
89
158
$62
2018
$631
40
105
174
87
148
$77
Variation
$(4)
(7)
3
3
2
10
$(15)
Millions of Pounds Delivered
Revenues in Millions
For the Years Ended
For the Years Ended
December
31, 2019
December
31, 2018 Variation
Percent
Variation
December
31, 2019
December
31, 2018 Variation
Percent
Variation
Description
General
Apartment house
Annual power
536
5,919
593
(57)
(9.6) %
6,358
(439)
13,340
14,811
(1,471)
(6.9)
(9.9)
Other operating revenues (a)
—
—
—
—
Total
19,795
21,762
(1,967)
(9.0) % (b)
$27
160
395
45
$627
$30
174
441
(14)
$631
$(3)
(14)
(46)
59
$(4)
(10.0) %
(8.0)
(10.4)
Large
(0.6) %
(a) Other steam operating revenues generally reflect changes in regulatory assets and liabilities in accordance with the company’s rate plan.
See Note B to the financial statements in Item 8.
(b) After adjusting for variations, primarily weather and billing days, steam sales and deliveries in the company’s service area decreased 4.4
percent in 2019 compared with 2018.
Operating revenues decreased $4 million in 2019 compared with 2018 primarily due to the impact of warmer winter
weather ($26 million) and lower purchased power expenses ($7 million), offset by certain rate plan reconciliations
($16 million), lower reserve related to steam earnings sharing ($14 million) and higher fuel expenses ($3 million).
Purchased power expenses decreased $7 million in 2019 compared with 2018 due to lower unit costs ($6 million)
and purchased volumes ($1 million).
Fuel expenses increased $3 million in 2019 compared with 2018 due to higher unit costs ($7 million), offset in part
by lower purchased volumes from the company’s steam generating facilities ($4 million).
Other operations and maintenance expenses increased $3 million in 2019 compared with 2018 primarily due to
higher municipal infrastructure support costs ($7 million), higher costs for pension and other postretirement benefits
($8 million) and stock-based compensation ($2 million), offset in part by the absence in 2019 of property damage,
clean-up and other response costs related to a steam main rupture in 2018 ($11 million).
72
CON EDISON ANNUAL REPORT 2020
Depreciation and amortization increased $2 million in 2019 compared with 2018 primarily due to higher steam utility
plant balances.
Taxes, other than income taxes increased $10 million in 2019 compared with 2018 primarily due to higher property
taxes ($12 million) and the absence of a New York State sales and use tax refund received in 2018 ($1 million),
offset in part by lower state and local taxes ($1 million), higher deferral of under-collected property taxes ($1 million)
and the reduction in the sales and use tax reserve upon conclusion of an audit assessment ($1 million).
Taxes, Other Than Income Taxes
At $2,295 million, taxes other than income taxes remain one of CECONY’s largest operating expenses. The
principal components of, and variations in, taxes other than income taxes were:
(Millions of Dollars)
Property taxes
State and local taxes related to revenue receipts
Payroll taxes
Other taxes
Total
For the Years Ended December 31,
2019
$1,979
328
69
(81)
2018
$1,845
330
69
(88)
$2,295 (a)
$2,156 (a)
Variation
$134
(2)
—
7
$139
(a)
Including sales tax on customers’ bills, total taxes other than income taxes in 2019 and 2018 were $2,807 and $2,628 million, respectively.
Other Income (Deductions)
Other income (deductions) increased $108 million in 2019 compared with 2018 primarily due to lower costs
associated with components of pension and other postretirement benefits other than service cost.
Net Interest Expense
Net interest expense increased $39 million in 2019 compared with 2018 primarily due to higher interest expense for
long-term ($10 million) and short-term ($6 million) debt, an increase in interest accrued on the TCJA related
regulatory liability ($9 million) and interest accrued on the system benefit charge liability ($8 million).
Income Tax Expense
Income taxes increased $9 million in 2019 compared with 2018 primarily due to higher income before income tax
expense ($13 million) and lower tax benefits in 2019 for plant-related flow through items ($7 million), offset in part by
an increase in the amortization of excess deferred federal income taxes due to the TCJA ($11 million).
O&R
(Millions of Dollars)
Operating revenues
Purchased power
Gas purchased for resale
Other operations and maintenance
Depreciation and amortization
Taxes, other than income taxes
Operating income
For the Year Ended
December 31, 2019
For the Year Ended
December 31, 2018
Electric
$634
188
—
235
60
53
$98
Gas
$259
—
90
73
24
31
2019
Total
$893
188
90
308
84
84
$41
$139
Electric
$642
208
—
233
56
52
$93
Gas
$249
—
86
72
21
31
$891
208
86
305
77
83
$39
$132
2018
Total
2019-2018
Variation
$2
(20)
4
3
7
1
$7
CON EDISON ANNUAL REPORT 2020
73
Electric
O&R’s results of electric operations for the year ended December 31, 2019 compared with the year ended
December 31, 2018 were as follows:
(Millions of Dollars)
Operating revenues
Purchased power
Other operations and maintenance
Depreciation and amortization
Taxes, other than income taxes
Electric operating income
For the Years Ended December 31,
2019
$634
188
235
60
53
$98
2018
$642
208
233
56
52
$93
Variation
$(8)
(20)
2
4
1
$5
O&R’s electric sales and deliveries in 2019 compared with 2018 were:
Millions of kWh Delivered
Revenues in Millions (a)
For the Years Ended
For the Years Ended
Description
Residential/Religious (b)
Commercial/Industrial
Retail choice customers
Public authorities
Other operating revenues (c)
Total
December
31, 2019
December
31, 2018 Variation
1,703
1,713
808
799
2,885
2,974
106
—
131
—
(10)
9
(89)
(25)
—
Percent
Variation
(0.6) %
1.1
(3.0)
(19.1)
—
December
31, 2019
December
31, 2018 Variation
Percent
Variation
$309
$326
$(17)
(5.2) %
112
191
8
14
115
201
12
(12)
(3)
(10)
(4)
26
$(8)
(2.6)
(5.0)
(33.3)
Large
(1.2) %
5,502
5,617
(115)
(2.0) % (d)
$634
$642
(a) Revenues from New York electric delivery sales 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.
“Residential/Religious” generally includes single-family dwellings, individual apartments in multi-family dwellings, religious organizations
and certain other not-for-profit organizations.
(b)
(c) Other electric operating revenues generally reflect changes in the revenue decoupling mechanism current asset or regulatory liability in
accordance with the company’s New York electric rate plan and changes in regulatory assets and liabilities in accordance with the
company’s electric rate plans. See Note B to the financial statements in Item 8.
(d) After adjusting for weather and other variations, electric delivery volumes in company’s service area decreased 1.1 percent in 2019
compared with 2018.
Operating revenues decreased $8 million in 2019 compared with 2018 primarily due to lower purchased power
expenses.
Purchased power expenses decreased $20 million in 2019 compared with 2018 due to lower unit costs ($21
million), offset in part by higher purchased volumes ($1 million).
Other operations and maintenance expenses increased $2 million in 2019 compared with 2018 primarily due to a
regulatory change in accounting for manufactured gas plant spending ($5 million) and higher stock-based
compensation ($2 million), offset in part by the reduction of a regulatory asset associated with certain site
investigation and remediation costs in 2018 ($6 million).
Depreciation and amortization increased $4 million in 2019 compared with 2018 primarily due to higher electric
utility plant balances.
Taxes, other than income taxes increased $1 million in 2019 compared with 2018 primarily due to higher property
taxes.
Gas
O&R’s results of gas operations for the year ended December 31, 2019 compared with the year ended
December 31, 2018 were as follows:
74
CON EDISON ANNUAL REPORT 2020
(Millions of Dollars)
Operating revenues
Gas purchased for resale
Other operations and maintenance
Depreciation and amortization
Taxes, other than income taxes
Gas operating income
For the Years Ended December 31,
2019
$259
90
73
24
31
$41
2018
$249
86
72
21
31
$39
Variation
$10
4
1
3
—
$2
O&R’s gas sales and deliveries, excluding off-system sales, in 2019 compared with 2018 were:
Thousands of Dt Delivered
Revenues in Millions (a)
For the Years Ended
For the Years Ended
December
31, 2019
December
31, 2018
Variation
Percent
Variation
December
31, 2019
December
31, 2018
Variation
Description
Residential
General
Firm transportation
Total firm sales and
transportation
Interruptible sales
Generation plants
Other
Other gas revenues
Total
10,209
2,328
9,459
9,860
2,190
9,950
21,996
22,000
3,668
3,746
4
914
—
1
959
—
349
138
(491)
(4)
(78)
3
(45)
—
3.5%
6.3
(4.9)
—
(b)
(2.1)
Large
(4.7)
—
$136
$140
25
63
224
6
—
1
28
26
78
244
6
—
1
(2)
$249
Percent
Variation
(2.9) %
(3.8)
(19.2)
(8.2)
—
—
—
Large
4.0%
$(4)
(1)
(15)
(20)
—
—
—
30
$10
26,582
26,706
(124)
(0.5) %
$259
(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, firm sales and transportation volumes in the company’s service area increased 0.9 percent
in 2019 compared with 2018.
Operating revenues increased $10 million in 2019 compared with 2018 primarily due to higher revenues from the
New York gas rate plan ($8 million) and an increase in gas purchased for resale ($4 million).
Gas purchased for resale increased $4 million in 2019 compared with 2018 due to higher unit costs ($3 million) and
purchased volumes ($1 million).
Other operations and maintenance expenses increased $1 million in 2019 compared with 2018 primarily due to a
regulatory change in accounting for manufactured gas plant spending ($3 million) and higher stock-based
compensation ($1 million), offset in part by the reduction of a regulatory asset associated with certain site
investigation and remediation costs in 2018 ($3 million).
Depreciation and amortization increased $3 million in 2019 compared with 2018 primarily due to higher gas utility
plant balances.
Taxes, Other Than Income Taxes
Taxes, other than income taxes, increased $1 million in 2019 compared with 2018. The principal components of
taxes, other than income taxes, were:
(Millions of Dollars)
Property taxes
State and local taxes related to revenue receipts
Payroll taxes
Total
For the Years Ended December 31,
2019
$66
10
8
2018
$65
10
8
$84 (a)
$83 (a)
Variation
$1
—
—
$1
(a)
Including sales tax on customers’ bills, total taxes other than income taxes in 2019 and 2018 were $116 million and $112 million,
respectively.
Other Income (Deductions)
CON EDISON ANNUAL REPORT 2020
75
Other income (deductions) increased $8 million in 2019 compared with 2018 primarily due to lower costs associated
with components of pension and other postretirement benefits other than service cost.
Income Tax Expense
Income taxes increased $2 million in 2019 compared with 2018 primarily due to higher income before income tax
expense ($3 million), offset in part by an increase in amortization of excess deferred federal income taxes due to the
TCJA ($1 million).
Clean Energy Businesses
The Clean Energy Businesses’ results of operations for the year ended December 31, 2019 compared with the year
ended December 31, 2018 were as follows:
(Millions of Dollars)
Operating revenues
Purchased power
Gas purchased for resale
Other operations and maintenance
Depreciation and amortization
Taxes, other than income taxes
Gain on acquisition of Sempra Solar Holdings, LLC (a)
Operating income
(a) See Note V to the financial statements in Item 8.
For the Years Ended December 31,
2019
$857
—
185
223
226
21
—
$202
2018
$763
2
313
287
85
13
131
$194
Variation
$94
(2)
(128)
(64)
141
8
(131)
$8
Operating revenues increased $94 million in 2019 compared with 2018 primarily due to higher revenues from
renewable electric production projects resulting from the December 2018 acquisition of Sempra Solar Holdings,
LLC, including the consolidation of certain jointly-owned projects that were previously accounted for as equity
investments ($340 million), offset in part by lower wholesale revenues ($144 million), lower engineering,
procurement and construction services revenues due to the completion in 2018 of a solar electric production project
developed for another company ($92 million) and lower energy services revenues ($24 million). Net mark-to-market
values increased ($14 million).
Purchased power expenses decreased $2 million in 2019 compared with 2018 primarily due to the absence in the
2019 period of the true-ups relating to the retail electric supply business sold in 2016.
Gas purchased for resale decreased $128 million in 2019 compared with 2018 due to lower purchased volumes.
Other operations and maintenance expenses decreased $64 million in 2019 compared with 2018 primarily due to
lower engineering, procurement and construction costs ($82 million) and lower energy services costs ($18 million),
offset in part by higher costs associated with additional renewable electric production projects in operation resulting
from the December 2018 acquisition of Sempra Solar Holdings, LLC ($26 million).
Depreciation and amortization increased $141 million in 2019 compared with 2018 primarily due to an increase in
renewable electric production projects resulting from the December 2018 acquisition of Sempra Solar Holdings, LLC
(including the consolidation of certain jointly-owned projects that the Clean Energy Businesses previously
accounted for as equity method investments).
Taxes, other than income taxes increased $8 million in 2019 compared with 2018 primarily due to higher property
taxes associated with additional renewable electric production projects in operation resulting from the December
2018 acquisition of Sempra Solar Holdings, LLC.
Gain on acquisition of Sempra Solar Holdings, LLC decreased $131 million in 2019 compared with 2018 due to the
absence in 2019 of the gain recognized in 2018 with respect to jointly-owned renewable energy production projects
upon completion of the acquisition of Sempra Solar Holdings, LLC. See Note V to the financial statements in Item 8.
Other Income (Deductions)
Other income (deductions) decreased $28 million in 2019 compared with 2018 primarily due to the absence in 2019
of equity income from certain jointly-owned projects that were accounted for as equity investments in 2018 but
consolidated after the December 2018 acquisition of Sempra Solar Holdings, LLC.
76
CON EDISON ANNUAL REPORT 2020
Net Interest Expense
Net interest expense increased $123 million in 2019 compared with 2018 primarily due to an increase in debt
resulting from the December 2018 acquisition of Sempra Solar Holdings, LLC, including $825 million that was
borrowed to fund a portion of the purchase price, $576 million of Sempra Solar Holdings, LLC subsidiaries' project
debt that was outstanding at the time of the acquisition and the consolidation of $506 million of project debt of
certain jointly-owned projects that the Clean Energy Businesses previously accounted for as equity method
investments.
Income Tax Expense
Income taxes decreased $77 million in 2019 compared with 2018 primarily due to lower income before income tax
expense (excluding income attributable to non-controlling interest) ($50 million), higher renewable energy credits
($7 million), lower state income taxes ($11 million), adjustments for prior period federal income tax returns primarily
due to increased research and development credits ($11 million) and lower valuation allowances on state net
operating losses ($6 million), offset in part by an increase in uncertain tax positions ($9 million).
Income Attributable to Non-Controlling Interest
Income attributable to non-controlling interest increased $97 million in 2019 compared with 2018 primarily due to the
income attributable in the 2019 period to a tax equity investor in renewable electric production projects accounted
for under the HLBV method of accounting. See Note R to the financial statements in Item 8.
Con Edison Transmission
Other Income (Deductions)
Other income (deductions) increased $13 million in 2019 compared with 2018 primarily due to higher allowance for
funds used during construction from the Mountain Valley Pipeline, LLC ($27 million), offset in part by lower contract
renewal rates at Stagecoach Gas Services, LLC ($17 million). See “Con Edison Transmission - CET Gas” in Item 1.
Net Interest Expense
Net interest expense increased $5 million in 2019 compared with 2018 primarily due to funding of increased
investment in Mountain Valley Pipeline, LLC.
Income Tax Expense
Income taxes increased $4 million in 2019 compared with 2018 primarily due to higher income before income tax
expense ($2 million) and a decrease in the amortization of excess deferred federal income taxes due to the TCJA
($1 million).
Other
Taxes, Other Than Income Taxes
Taxes, other than income taxes decreased $8 million in 2019 compared with 2018 primarily due to lower New York
State capital tax.
Other Income (Deductions)
Other income (deductions) increased $12 million in 2019 compared with 2018 primarily due to the absence in 2019
of transaction costs related to the acquisition of Sempra Solar Holdings, LLC in 2018. See Note V to the financial
statements in Item 8.
Income Tax Expense
Income taxes decreased $43 million in 2019 compared with 2018 primarily due to the absence of the TCJA re-
measurement of deferred tax assets associated with Con Edison’s 2017 net operating loss carryforward into 2018.
CON EDISON ANNUAL REPORT 2020
77
Liquidity and Capital Resources
The Companies’ liquidity reflects cash flows from operating, investing and financing activities, as shown on their
respective consolidated statements of cash flows and as discussed below.
The principal factors affecting Con Edison’s liquidity are its investments in the Utilities, the Clean Energy Businesses
and Con Edison Transmission, the dividends it pays to its shareholders and the dividends it receives from the
Utilities and cash flows from financing activities discussed below.
The principal factors affecting CECONY’s liquidity are its cash flows from operating activities, cash used in investing
activities (including construction expenditures), the dividends it pays to Con Edison and cash flows from financing
activities discussed below.
The Companies generally maintain minimal cash balances and use short-term borrowings to meet their working
capital needs and other cash requirements. The Companies repay their short-term borrowings using funds from
long-term financings and operating activities. The Utilities’ cost of capital, including working capital, is reflected in
the rates they charge to their customers.
Each of the Companies believes that it will be able to meet its reasonably likely short-term and long-term cash
requirements. See “The Companies Require Access To Capital Markets To Satisfy Funding Requirements,”
"Changes To Tax Laws Could Adversely Affect the Companies," “The Companies Face Risks Related to Health
Epidemics And Other Outbreaks, Including The COVID-19 Pandemic,” and “The Companies Also Face Other Risks
That Are Beyond Their Control” in Item 1A, and “Capital Requirements and Resources” in Item 1.
78
CON EDISON ANNUAL REPORT 2020
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CON EDISON ANNUAL REPORT 2020
79
Cash Flows from Operating Activities
The Utilities’ cash flows from operating activities primarily reflect their energy sales and deliveries and cost of
operations. The volume of energy sales and deliveries is primarily affected 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. See "Competition" and "Environmental Matters – Clean Energy Future –
Reforming the Energy Vision" and “Environmental Matters – Climate Change” in Item 1. During 2020, the decline in
business activity in the Utilities’ service territory due to the COVID-19 pandemic resulted and may continue in 2021
to result in lower billed sales revenues, a slower recovery of cash from outstanding customer accounts receivable
balances and increases to the allowance for uncollectible accounts, that may further result in increases to write-offs
of customer accounts. Under the revenue decoupling mechanisms in the Utilities’ New York electric and gas rate
plans, changes in delivery volumes from levels assumed when rates were approved may affect the timing of cash
flows, but generally not net income. The prices at which the Utilities provide energy to their customers are
determined in accordance with their rate plans. In general, changes in the Utilities’ cost of purchased power, fuel
and gas may affect the timing of cash flows, but not net income, because the costs are recovered in accordance
with rate plans. See “Recoverable Energy Costs” in Note A to the financial statements in Item 8. The Utilities’ New
York rate plans allow them to defer costs resulting from a change in legislation, regulation and related actions that
have taken effect during the term of the rate plans once the costs exceed a specified threshold. Increases to the
allowance for uncollectible accounts related to the COVID-19 pandemic have been deferred pursuant to the
legislative, regulatory and related actions provisions of their rate plans. Pursuant to their rate plans, the Utilities
have recovered from customers a portion of the tax liability they will pay in the future as a result of temporary
differences between the book and tax basis of assets and liabilities. These temporary differences affect the timing of
cash flows, but not net income, as the Companies are required to record deferred tax assets and liabilities at the
current corporate tax rate for the temporary differences. For the Utilities, credits to their customers of the net
benefits of the TCJA, including the reduction of the corporate tax rate to 21 percent, decrease cash flows from
operating activities. See “Changes To Tax Laws Could Adversely Affect the Companies,” in Item 1A, “Federal
Income Tax” in Note A, “Rate Plans” in Note B, "COVID-19 Regulatory Matters" in Note B, “Other Regulatory
Matters” in Note B and Note L to the financial statements in Item 8 and "Coronavirus Disease 2019 (COVID-19)
Impacts - Liquidity and Financing," above.
Net income is the result of cash and non-cash (or accrual) transactions. Only cash transactions affect the
Companies’ cash flows from operating activities. Principal non-cash charges or credits include depreciation,
deferred income tax expense, amortizations of certain regulatory assets and 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. See “Rate Plans – CECONY– Electric and Gas"
and "Rate Plans – O&R New York – Electric and Gas” in Note B to the financial statements in Item 8. For Con
Edison, 2020 net income also included a non-cash loss recognized with respect to a partial impairment of Con
Edison Transmission’s investment in Mountain Valley Pipeline, LLC. See “Investments” in Note A to the financial
statements in Item 8. For Con Edison, 2018 net income included a non-cash gain recognized with respect to jointly-
owned renewable energy production projects upon completion of the acquisition of Sempra Solar Holdings, LLC at
the Clean Energy Businesses ($131 million). See Note V to the financial statements in Item 8.
Net cash flows from operating activities in 2020 for Con Edison and CECONY were $936 million and $809 million
lower, respectively, than in 2019. The changes in net cash flows for Con Edison and CECONY primarily reflects
higher accounts receivable balances from customers ($566 million and $519 million, respectively) (see “COVID-19
Regulatory Matters” in Note B to the financial statements in Item 8 and “Coronavirus Disease 2019 (COVID-19)
Impacts - Accounting Considerations” and “Liquidity and Financing,” above) and higher other receivables and other
current assets ($188 million and $103 million, respectively) primarily due to lower reimbursement received for
restoration costs related to the restoration of power in Puerto Rico in the aftermath of the September 2017
hurricanes in the 2020 period ($94 million and $88 million, respectively), higher system benefit charge ($139 million
and $130 million, respectively), higher pension and retiree benefit contributions ($121 million and $113 million,
respectively), deferrals for increased costs related to the COVID-19 pandemic ($115 million and $113 million,
respectively), and a change in pension and retiree benefit obligations ($72 million and $77 million, respectively),
offset in part by lower TCJA net benefits provided to customers in the 2020 period ($263 million and $263 million,
respectively).
Net cash flows from operating activities in 2019 for Con Edison and CECONY were $439 million and $298 million
higher, respectively, than in 2018. The changes in net cash flows for Con Edison and CECONY primarily reflects
lower pension and retiree benefit contributions ($122 million and $115 million, respectively), lower storm restoration
costs ($192 million and $132 million, respectively), lower MTA power reliability costs ($160 million and $160 million,
respectively), reimbursement received for restoration costs related to the restoration of power in Puerto Rico in the
aftermath of the September 2017 hurricanes ($95 million and $89 million, respectively), and for CECONY, lower net
80
CON EDISON ANNUAL REPORT 2020
payments of income tax to affiliated companies ($122 million), offset in part by higher TCJA net benefits provided to
customers in the 2019 period ($379 million and $376 million, respectively).
The change in net cash flows also reflects the timing of payments for and recovery of energy costs. This timing is
reflected within changes to accounts receivable – customers, recoverable and refundable energy costs within other
regulatory assets and liabilities and accounts payable balances.
Cash Flows Used in Investing Activities
Net cash flows used in investing activities for Con Edison and CECONY were $442 million and $292 million higher,
respectively, in 2020 than in 2019. The change for Con Edison primarily reflects an increase in non-utility
construction expenditures at the Clean Energy Businesses ($335 million), the absence in 2020 of proceeds from the
sale of properties formerly used by CECONY in its operations ($192 million), an increase in utility construction
expenditures at CECONY ($84 million) and O&R ($4 million) and higher cost of removal less salvage at CECONY
($16 million), offset in part by lower investments in electric and gas transmission projects at Con Edison
Transmission in the 2020 period ($202 million).
Net cash flows used in investing activities for Con Edison and CECONY were $1,689 million and $182 million lower,
respectively, in 2019 than in 2018. The change for Con Edison primarily reflects the acquisition of Sempra Solar
Holdings, LLC, net of cash acquired, at the Clean Energy Businesses in 2018 ($1,488 million) (see Note V to the
financial statements in Item 8) and proceeds received in 2019 from the sale of properties formerly used by
CECONY in its operations ($187 million).
Cash Flows From Financing Activities
Net cash flows from financing activities in 2020 for Con Edison and CECONY were $1,386 million and $1,120
million higher, respectively, than in 2019. Net cash flows from financing activities in 2019 for Con Edison and
CECONY were $2,079 million and $453 million lower, respectively, than in 2018.
Net cash flows from financing activities during the years ended December 31, 2020, 2019 and 2018 reflect the
following Con Edison transactions:
2020
•
2019
•
•
•
•
•
•
•
Issued 1,050,000 shares of its common shares for $88 million upon physical settlement of the remaining shares
subject to its May 2019 forward sale agreement. Con Edison used the proceeds to invest in CECONY for
funding of its capital requirements and other general corporate purposes. See Note C to the financial
statements in Item 8;
Borrowed $820 million pursuant to a credit agreement that was converted to a term loan (the “July 2020 Term
Loan”). Con Edison used the proceeds from the borrowing for general corporate purposes, including repayment
of short-term debt bearing interest at variable rates. The July 2020 Term Loan was prepaid in full in December
2020;
Issued 7,200,000 common shares resulting in net proceeds of $553 million, after issuance expenses. The net
proceeds from the sale of the common shares, together with the net proceeds from the sale of $650 million
aggregate principal amount of 0.65 percent debentures due 2023, were used to prepay in full the July 2020
Term Loan. The remaining net proceeds from the sale of the common shares were invested by Con Edison in its
subsidiaries, principally CECONY and O&R, and for other general corporate purposes; and
Issued $650 million aggregate principal amount of 0.65 percent debentures, due 2023, with an option to redeem
at par, in whole or in part, on or after December 1, 2021. The proceeds from the $650 million refinancing,
together with a portion of the proceeds from the sale of common shares, were used to prepay in full the July
2020 Term Loan. See Note C to the financial statements in Item 8.
Redeemed in advance of maturity $400 million of 2.00 percent 3-year debentures;
Entered into a forward sale agreement relating to 5,800,000 shares of its common stock. In June 2019, the
company issued 4,750,000 shares for $400 million upon physical settlement of shares subject to the forward
sale agreement. Con Edison used the proceeds to invest in CECONY for funding of its capital requirements and
other general corporate purposes. See Note C to the financial statements in Item 8;
Issued 5,649,369 common shares for $425 million upon physical settlement of the remaining shares subject to
its November 2018 forward sale agreements. Con Edison used the proceeds to invest in its subsidiaries for
funding of their capital requirements and to repay short-term debt incurred for that purpose; and
Borrowed $825 million under a variable-rate term loan that matures in June 2021 to fund the repayment of a six-
month variable-rate term loan. In June 2019 and January 2021, Con Edison optionally pre-paid $150 million and
$275 million, respectively, of the amount borrowed. See Note C to the financial statements in Item 8.
CON EDISON ANNUAL REPORT 2020
81
2020
•
2019
•
2018
•
•
•
•
•
•
•
2018
•
Issued 9,324,123 common shares for $705 million pursuant to forward sale agreements and borrowed $825
million under a 6-month variable rate term loan, which amounts, along with $79 million of other company funds,
were used to pay the purchase price for the acquisition by the Clean Energy Businesses of Sempra Solar
Holdings, LLC. In February 2019, the company repaid the $825 million term loan with borrowings under a
variable-rate term loan that matures in June 2021. See Notes C and V to the financial statements in Item 8.
Con Edison’s cash flows from financing activities in 2020, 2019 and 2018 also reflect the proceeds, and reduction in
cash used for reinvested dividends, resulting from the issuance of common shares under the company’s dividend
reinvestment, stock purchase and long-term incentive plans of $106 million, $101 million and $100 million,
respectively.
Net cash flows from financing activities during the years ended December 31, 2020, 2019 and 2018 reflect the
following CECONY transactions:
Issued $600 million aggregate principal amount of 3.00 percent debentures, due 2060, the net proceeds from
the sale of which were used to repay short-term borrowings and for other general corporate purposes;
Redeemed at maturity $350 million of 4.45 percent 10-year debentures; and
Issued $600 million aggregate principal amount of 3.35 percent debentures, due 2030 and $1,000 million
aggregate principal amount of 3.95 percent debentures, due 2050, the net proceeds from the sale of which will
be used to pay or reimburse the payment of, in whole or in part, existing and new qualifying eligible green
expenditures, such as energy efficiency and clean transportation expenditures, that include those funded on or
after January 1, 2018 until the maturity date of each series of the debentures. Pending the allocation of the net
proceeds to finance or refinance eligible green expenditures, CECONY used a portion of the net proceeds for
repayment of short-term debt and temporarily placed the remaining net proceeds in short-term interest-bearing
instruments.
Issued $600 million aggregate principal amount of 3.70 percent debentures, due 2059, and $700 million
aggregate principal amount of 4.125 percent debentures, due 2049, the net proceeds from the sale of which
were used to repay short-term borrowings and for other general corporate purposes; and
Redeemed at maturity $475 million of 6.65 percent 10-year debentures.
Issued $500 million aggregate principal amount of 4.00 percent debentures, due 2028, and $600 million
aggregate principal amount of 4.65 percent debentures, due 2048, the net proceeds from the sale of which
were used to redeem at maturity $600 million of 7.125 percent 10-year debentures and other general corporate
purposes, including repayment of short-term debt;
Issued $640 million aggregate principal amount of debentures, due 2021, at a variable interest rate of 0.40
percent above three-month LIBOR and redeemed $636 million of its tax-exempt debt for which the interest
rates were to be determined pursuant to periodic auctions;
Issued $700 million aggregate principal amount of 4.50 percent debentures, due 2058, and $300 million
aggregate principal amount of 3.80 percent debentures, due 2028, the net proceeds from the sale of which
were used to repay short-term borrowings and for other general corporate purposes; and
Redeemed at maturity $600 million of 5.85 percent 10-year debentures.
Net cash flows from financing activities during the years ended December 31, 2020, 2019 and 2018 also reflect the
following O&R transactions:
2020
•
Issued $35 million aggregate principal amount of 2.02 percent debentures, due 2030, and $40 million aggregate
principal amount of 3.24 percent debentures, due 2050, the net proceeds from the sales of which were used to
repay short-term borrowings and for other general corporate purposes.
82
CON EDISON ANNUAL REPORT 2020
2019
•
Issued $43 million aggregate principal amount of 3.73 percent debentures, due 2049, $44 million aggregate
principal amount of 2.94 percent debentures, due 2029, and $38 million aggregate principal amount of 3.46
percent debentures, due 2039, the net proceeds from the sales of which were used to repay short-term
borrowings and for other general corporate purposes; and
Redeemed at maturity $60 million of 4.96 percent 10-year debentures.
•
2018
•
•
Redeemed at maturity $50 million of 6.15 percent 10-year debentures; and
Issued $150 million aggregate principal amount of 4.35 percent debentures, due 2048, the net proceeds from
the sale of which were used to repay short-term borrowings and for other general corporate purposes.
Net cash flows from financing activities during the years ended December 31, 2020, 2019 and 2018 also reflect the
following Clean Energy Businesses transactions:
2020
•
Borrowed $165 million under a $613 million variable-rate construction loan facility that matures no later than
November 2021, secured by three of the company’s solar electric production projects. See Note D to the
financial statements in Item 8.
2019
•
•
Issued $303 million aggregate principal amount of 3.82 percent senior notes, due 2038, secured by the
company's California Solar 4 renewable electric production projects; and
Borrowed $464 million at a variable-rate, due 2026, secured by equity interests in solar electric production
projects, the net proceeds from the sale of which were used to repay borrowings from Con Edison and for other
general corporate purposes. Con Edison used a portion of the repayment to pre-pay $150 million of an $825
million variable-rate term loan that matures in June 2021 (see Note C to the financial statements in Item 8) and
the remainder to repay short-term borrowings and for other general corporate purposes. The company has
entered into fixed-rate interest rate swaps in connection with this borrowing. See Note P to the financial
statements in Item 8.
2018
•
Issued $140 million aggregate principal amount of 4.41 percent senior notes, due 2028, secured by the
company’s Wind Holdings renewable electric production projects.
Cash flows from financing activities of the Companies also reflect commercial paper issuance. The commercial
paper amounts outstanding at December 31, 2020, 2019 and 2018 and the average daily balances for 2020, 2019
and 2018 for Con Edison and CECONY were as follows:
(Millions of Dollars, except
Weighted Average Yield)
Con Edison
CECONY
Weighted average yield
2020
2019
2018
Outstanding at
December 31
Daily
average
Outstanding at
December 31
Daily
average
Outstanding at
December 31
$1,705
$1,660
0.3%
$980
$678
1.0%
$1,692
$1,137
2.0%
$1,074
$734
2.5%
$1,741
$1,192
3.0%
Daily
average
$889
$532
2.3%
Common stock issuances and external borrowings are sources of liquidity that could be affected by changes in
credit ratings, financial performance and capital market conditions. For information about the Companies’ credit
ratings and certain financial ratios, see “Capital Requirements and Resources” in Item 1.
Capital Requirements and Resources
For information about capital requirements, contractual obligations and capital resources, see “Capital
Requirements and Resources” in Item 1.
CON EDISON ANNUAL REPORT 2020
83
Assets, Liabilities and Equity
The Companies’ assets, liabilities and equity at December 31, 2020 and 2019 are summarized as follows:
CECONY
O&R
Clean Energy
Businesses
Con Edison
Transmission
Other (a)
Con Edison (b)
2020
2019
2020
2019
2020
2019
2020
2019
2020
2019
2020
2019
(Millions of Dollars)
ASSETS
Current assets
Investments
Net plant
$4,407
$3,543
$277
$243
$485
$511
$42
$2
541
461
26
26 — —
1,256
1,585
Other noncurrent assets
6,465
5,139
475
401
39,554
37,414
2,469
2,336
4,515
1,848
4,121
1,896
17
33
17
14
$90
(7)
—
$(27)
$5,301
$4,272
(7)
1
1,816
2,065
46,555
43,889
402
403
9,223
7,853
Total Assets
$50,967
$46,557 $3,247 $3,006 $6,848 $6,528 $1,348 $1,618
$485
$370
$62,895
$58,079
LIABILITIES AND SHAREHOLDERS' EQUITY
Current liabilities
Noncurrent liabilities
Long-term debt
Equity
$5,247
14,722
16,149
14,849
$4,131
$356
$311 $1,330 $1,525
$111
$135
$310
$185
13,665
1,191
1,115
14,614
14,147
893
807
818
762
211
2,776
2,531
201
2,400
2,402
28
500
709
88
500
895
(58)
64
169
(17)
195
7
$7,354
16,094
20,382
19,065
$6,287
15,052
18,527
18,213
Total Liabilities and Equity
$50,967
$46,557 $3,247 $3,006 $6,848 $6,528 $1,348 $1,618
$485
$370
$62,895
$58,079
(a) Includes parent company and consolidation adjustments.
(b) Represents the consolidated results of operations of Con Edison and its businesses.
CECONY
Current assets at December 31, 2020 were $864 million higher than at December 31, 2019. The change in current
assets primarily reflects increases in accounts receivables, less allowance for uncollectible accounts ($442 million)
(see “COVID-19 Regulatory Matters” in Note B to the financial statements in Item 8 and “Coronavirus Disease 2019
(COVID-19) Impacts - Accounting Considerations” and “Liquidity and Financing,” above), cash and temporary cash
investments ($134 million), regulatory assets ($131 million), revenue decoupling mechanism receivable ($53
million), accrued unbilled revenue ($46 million) and accounts receivables from affiliated companies ($61 million).
Investments at December 31, 2020 were $80 million higher than at December 31, 2019. The change in investments
primarily reflects increases in supplemental retirement income plan assets ($68 million) and deferred income plan
assets ($11 million). See "Investments" in Note A and Note E to the financial statements in Item 8.
Net plant at December 31, 2020 was $2,140 million higher than at December 31, 2019. The change in net plant
primarily reflects an increase in electric ($1,338 million), gas ($692 million), steam ($95 million) and general ($314
million) plant balances and an increase in construction work in progress ($508 million), offset in part by an increase
in accumulated depreciation ($807 million).
Other noncurrent assets at December 31, 2020 were $1,326 million higher than at December 31, 2019. The change
in other noncurrent assets primarily reflects an increase in the regulatory asset for unrecognized pension and other
postretirement costs to reflect the final actuarial valuation, as measured at December 31, 2020, of the pension and
other retiree benefit plans in accordance with the accounting rules for retirement benefits ($662 million). The change
in the regulatory asset also reflects increases in the regulatory assets for deferred pension and other postretirement
benefits ($225 million), environmental remediation costs ($144 million), deferrals for increased costs related to the
COVID-19 pandemic ($113 million), deferred storm costs ($83 million) and the year's amortization of accounting
costs. See Notes B, E, F and G to the financial statements in Item 8.
Current liabilities at December 31, 2020 were $1,116 million higher than at December 31, 2019. The change in
current liabilities primarily reflects increases in notes payable ($523 million), debt due within one year as of
December 31, 2020 ($290 million) and accounts payable ($276 million).
84
CON EDISON ANNUAL REPORT 2020
Noncurrent liabilities at December 31, 2020 were $1,057 million higher than at December 31, 2019. The change in
noncurrent liabilities primarily reflects an increase in the liability for pension and retiree benefits ($702 million) as a
result of the final actuarial valuation of the pension and other retiree benefit plans, as measured at December 31,
2020, in accordance with the accounting rules for retirement benefits. The change also reflects an increase in
deferred income taxes and unamortized investment tax credits ($411 million), primarily due to accelerated tax
depreciation and repair deductions. See Notes E, F, and L to the financial statements in Item 8.
Long-term debt at December 31, 2020 was $1,535 million higher than at December 31, 2019. The change in long-
term debt primarily reflects the March and November 2020 issuance of $2,200 million of debentures, offset in part
by the reclassification of $640 million of long-term debt to long-term debt due within one year. See "Liquidity and
Capital Resources - Cash Flows From Financing Activities" above and Note C to the financial statements in Item 8.
Equity at December 31, 2020 was $702 million higher than at December 31, 2019. The change in equity reflects net
income for the year ($1,185 million) and capital contributions from parent ($500 million) in 2020, offset in part by
common stock dividends to parent ($982 million) in 2020.
O&R
Current assets at December 31, 2020 were $34 million higher than at December 31, 2019. The change in current
assets primarily reflects increases in accounts receivables, less allowance for uncollectible accounts ($16 million),
revenue decoupling mechanism receivable ($8 million), regulatory assets ($8 million) and cash and temporary cash
investments ($5 million).
Net plant at December 31, 2020 was $133 million higher than at December 31, 2019. The change in net plant
primarily reflects an increase in electric ($111 million) and gas ($46 million) plant balances and an increase in
construction work in progress ($31 million), offset in part by an increase in accumulated depreciation ($59 million).
Other noncurrent assets at December 31, 2020 were $74 million higher than at December 31, 2019. The change in
other noncurrent assets primarily reflects an increase in the regulatory asset for unrecognized pension and other
postretirement costs as a result of the final actuarial valuation, as measured at December 31, 2020, of the pension
and other retiree benefit plans in accordance with the accounting rules for retirement benefits ($38 million) and an
increase in the regulatory asset for deferred storm costs ($35 million). See Notes B, E and F to the financial
statements in Item 8. The change in the regulatory asset also reflects the year's amortization of accounting costs.
Current liabilities at December 31, 2020 were $45 million higher than at December 31, 2019. The change in current
liabilities primarily reflects higher accounts payable.
Noncurrent liabilities at December 31, 2020 were $76 million higher than at December 31, 2019. The change in
noncurrent liabilities primarily reflects an increase in the liability for pension and retiree benefits ($37 million), as a
result of the final actuarial valuation of the pension and other retiree benefit plans, as measured at December 31,
2020 in accordance with the accounting rules for retirement benefits and an increase in the regulatory liability for
deferred other retiree benefit plans rate ($9 million). It also reflects an increase in deferred income taxes and
unamortized investment tax credits ($24 million), primarily due to accelerated tax depreciation and repair
deductions. See Notes E, F, and L to the financial statements in Item 8.
Long-term debt at December 31, 2020 was $75 million higher than at December 31, 2019. The change in long-term
debt reflects the September 2020 issuance of $75 million of debentures. See "Liquidity and Capital Resources -
Cash Flows From Financing Activities" above.
Equity at December 31, 2020 was $45 million higher than at December 31, 2019. The change in equity reflects net
income for the year ($71 million) and capital contributions from parent ($25 million) in 2020, offset by common stock
dividends to parent ($49 million) in 2020 and a decrease in other comprehensive income ($2 million).
Clean Energy Businesses
Current assets at December 31, 2020 were $26 million lower than at December 31, 2019. The change in current
assets primarily reflects a decrease in restricted cash.
Net plant at December 31, 2020 was $394 million higher than at December 31, 2019. The change in net plant
primarily reflects additional capital expenditures, offset in part by an increase in accumulated depreciation.
CON EDISON ANNUAL REPORT 2020
85
Other noncurrent assets at December 31, 2020 were $48 million lower than at December 31, 2019. The change in
other noncurrent assets primarily reflects the amortization of the purchase power agreement intangible assets.
Current liabilities at December 31, 2020 were $195 million lower than at December 31, 2019. The change in current
liabilities primarily reflects the reclassification of the company’s PG&E-related non-recourse project debt with a
maturity longer than one year from long-term debt due within one year to long-term debt ($898 million), offset in part
by the reclassification of an intercompany loan agreement from the parent company from long-term debt to current
liabilities ($400 million) and a borrowing under a short-term construction loan facility ($165 million) (see Note D to
the financial statements in Item 8) and additional working capital requirements.
Noncurrent liabilities at December 31, 2020 were $10 million higher than at December 31, 2019. The change in
noncurrent liabilities primarily reflects the change in the fair value of derivative liabilities and asset retirement
obligations for new projects placed in service, offset in part by the change in deferred taxes and the reduction of
lease liability associated with the adoption of ASU No. 2016-02 “Leases (Topic 842)."
Long-term debt at December 31, 2020 was $376 million higher than at December 31, 2019. The change in long-
term debt primarily reflects the reclassification of the company’s PG&E-related non-recourse project debt with a
maturity longer than one year from long-term debt due within one year to long-term debt ($898 million), offset in part
by the reclassification of an intercompany loan agreement from the parent company from long-term debt to current
liabilities ($400 million).
Equity at December 31, 2020 was $129 million higher than at December 31, 2019. The change in equity primarily
reflects capital contributions from parent ($100 million) in 2020, an increase in noncontrolling interest ($27 million) in
2020 and net income for common stock for the year ($24 million), offset in part by common stock dividends to
parent ($21 million) in 2020.
Con Edison Transmission
Current assets at December 31, 2020 were $40 million higher than at December 31, 2019. The change in current
assets primarily reflects a receivable of $38 million from Crestwood Pipeline and Storage Northeast LLC
(Crestwood), the joint venture partner in Stagecoach Gas Services, LLC. The agreement between Crestwood and
Con Edison Gas Pipeline and Storage, LLC (CET Gas) provides for payments from Crestwood to CET Gas for
shortfalls in meeting certain earnings growth performance targets. The payment is expected to total $57 million ($19
million of which is due in March 2021 and an additional $19 million plus interest due in each of January 2022 and
January 2023. The payments were recorded as a receivable by CET Gas as of December 31, 2020). See "Con
Edison Transmission - CET Gas" in Item 1.
Investments at December 31, 2020 were $329 million lower than at December 31, 2019. The change in investments
primarily reflects the impairment loss related to Con Edison Transmission's investment in Mountain Valley Pipeline,
LLC ($320 million), the decrease in CET Gas' investment in Stagecoach Gas Services, LLC due to the receivable
from Crestwood described above ($57 million) and investment income less partnership distribution from Stagecoach
Services ($22 million), offset in part by investment income from Mountain Valley Pipeline, LLC ($60 million) and from
NY Transco ($8 million), respectively. See "Investments" in Note A to the financial statements in Item 8.
Noncurrent assets at December 31, 2020 were $19 million higher than at December 31, 2019. The change in
noncurrent assets reflects a receivable of $19 million related to the receivable from Crestwood described above.
Current liabilities at December 31, 2020 were $24 million lower than at December 31, 2019. The change in current
liabilities primarily reflects a reduction in short-term borrowings under an intercompany capital funding facility.
Noncurrent liabilities at December 31, 2020 was $60 million lower than at December 31, 2019. The change in
noncurrent liabilities primarily reflects a change in deferred income taxes and unamortized investment tax credits
that primarily reflects timing differences associated with investments in partnerships.
Equity at December 31, 2020 was $186 million lower than at December 31, 2019. The change in equity reflects net
loss for the year ($175 million) and common stock dividends to parent ($11 million) in 2020.
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CON EDISON ANNUAL REPORT 2020
Off-Balance Sheet Arrangements
At December 31, 2020, none of the Companies’ transactions, agreements or other contractual arrangements meet
the SEC definition of off-balance sheet arrangements.
Regulatory Matters
For information about the Utilities’ rate plans and other regulatory matters affecting the Companies, see “Utility
Regulation” in Item 1 and Note B to the financial statements in Item 8.
Risk Factors
The Companies’ businesses are influenced by many factors that are difficult to predict, and that involve
uncertainties that may materially affect actual operating results, cash flows and financial condition. See “Risk
Factors” in Item 1A.
Application of Critical Accounting Policies
The Companies’ financial statements reflect the application of their accounting policies, which conform to
accounting principles generally accepted in the United States of America. The Companies’ critical accounting
policies include industry-specific accounting applicable to regulated public utilities and accounting for pensions and
other postretirement benefits, contingencies, long-lived assets, cloud computing implementation costs, derivative
instruments and investments.
Accounting for Regulated Public Utilities
The Utilities are subject to the accounting rules for regulated operations and the accounting requirements of the
FERC and the state public utility regulatory commissions having jurisdiction.
The accounting rules for regulated operations specify the economic effects that result from the causal relationship of
costs and revenues in the rate-regulated environment and how these effects are to be accounted for by a regulated
enterprise. Revenues intended to cover some costs may be recorded either before or after the costs are incurred. If
regulation provides assurance that incurred costs will be recovered in the future, these costs would be recorded as
deferred charges, or “regulatory assets,” under the accounting rules for regulated operations. If revenues are
recorded for costs that are expected to be incurred in the future, these revenues would be recorded as deferred
credits, or “regulatory liabilities,” under the accounting rules for regulated operations.
The Utilities’ principal regulatory assets and liabilities are listed in Note B to the financial statements in Item 8. The
Utilities are receiving or being credited with a return on all of their regulatory assets for which a cash outflow has
been made. The Utilities are paying or being charged with a return on all of their regulatory liabilities for which a
cash inflow has been received. The Utilities' regulatory assets and liabilities at December 31, 2020 are recoverable
from customers, or to be applied for customer benefit, in accordance with rate provisions that have been approved
by the applicable public utility regulatory commission.
In the event that regulatory assets of the Utilities were no longer probable of recovery, as required by the accounting
rules for regulated operations, these regulatory assets would be charged to earnings. At December 31, 2020, the
regulatory assets for Con Edison and CECONY were $6,461 million and $5,989 million, respectively.
Accounting for Pensions and Other Postretirement Benefits
The Utilities provide pensions and other postretirement benefits to substantially all of their employees and retirees.
The Clean Energy Businesses and Con Edison Transmission also provide such benefits to transferred employees
who previously worked for the Utilities. The Companies account for these benefits in accordance with the
accounting rules for retirement benefits. In addition, the Utilities apply the accounting rules for regulated operations
to account for the regulatory treatment of these obligations (which, as described in Note B to the financial
statements in Item 8, reconciles the amounts reflected in rates for the costs of the benefit to the costs actually
incurred). In applying these accounting policies, the Companies have made critical estimates related to actuarial
assumptions, including assumptions of expected returns on plan assets, discount rates, health care cost trends and
future compensation. See Notes A, E and F to the financial statements in Item 8 for information about the
Companies’ pension and other postretirement benefits, the actuarial assumptions, actual performance, amortization
of investment and other actuarial gains and losses and calculated plan costs for 2020, 2019 and 2018.
CON EDISON ANNUAL REPORT 2020
87
The discount rate for determining the present value of future period benefit payments is determined using a model
to match the durations of highly-rated (Aa or higher by either Moody’s or S&P) corporate bonds with the projected
stream of benefit payments.
In determining the health care cost trend rate, the Companies review actual recent cost trends and projected future
trends.
The cost of pension and other postretirement benefits in future periods will depend on actual returns on plan assets,
assumptions for future periods, contributions and benefit experience. Con Edison’s and CECONY’s current
estimates for 2021 are increases, compared with 2020, in their pension and other postretirement benefits costs of
$15 million and $13 million, respectively.
The following table illustrates the effect on 2021 pension and other postretirement costs of changing the critical
actuarial assumptions, while holding all other actuarial assumptions constant:
Actuarial Assumption
Increase in accounting cost:
Discount rate
Con Edison
CECONY
Expected return on plan assets
Con Edison
CECONY
Health care trend rate
Con Edison
CECONY
Increase in projected benefit obligation:
Discount rate
Con Edison
CECONY
Health care trend rate
Con Edison
CECONY
Change in
Assumption
Other
Postretirement
Benefits
Pension
(Millions of Dollars)
(0.25) %
(0.25) %
(0.25) %
(0.25) %
1.00%
1.00%
(0.25) %
(0.25) %
1.00%
1.00%
$72
$69
$38
$36
$—
$—
$801
$761
$—
$—
$4
$3
$2
$2
$16
$11
$45
$36
$108
$79
Total
$76
$72
$40
$38
$16
$11
$846
$797
$108
$79
A 5.0 percentage point variation in the actual annual return in 2021, as compared with the expected annual asset
return of 7.00 percent, would change pension and other postretirement benefit costs for Con Edison and CECONY
by approximately $29 million and $27 million, respectively, in 2022.
Pension benefits are provided through a pension plan maintained by Con Edison to which CECONY, O&R, the
Clean Energy Businesses and Con Edison Transmission make contributions for their participating employees.
Pension accounting by the Utilities includes an allocation of plan assets.
The Companies’ policy is to fund their pension and other postretirement benefit accounting costs to the extent tax
deductible, and for the Utilities, to the extent these costs are recovered under their rate plans. The Companies were
not required to make cash contributions to the pension plan in 2020 under funding regulations and tax laws.
However, CECONY and O&R made discretionary contributions to the pension plan in 2020 of $435 million and $40
million, respectively. In 2021, CECONY and O&R expect to make contributions to the pension plan of $441 million
and $39 million, respectively. See “Expected Contributions” in Notes E and F to the financial statements in Item 8.
Accounting for Contingencies
The accounting rules for contingencies apply to an existing condition, situation or set of circumstances involving
uncertainty as to possible loss that will ultimately be resolved when one or more future events occur or fail to occur.
Known material contingencies, which are described in the notes to the financial statements, include certain
regulatory matters (Note B), the Utilities’ responsibility for hazardous substances, such as asbestos, PCBs and coal
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CON EDISON ANNUAL REPORT 2020
tar that have been used or generated in the course of operations (Note G) and other contingencies (Note H). In
accordance with the accounting rules, the Companies have accrued estimates of losses relating to the
contingencies as to which loss is probable and can be reasonably estimated, and no liability has been accrued for
contingencies as to which loss is not probable or cannot be reasonably estimated.
The Utilities recover costs for asbestos lawsuits, workers’ compensation and environmental remediation pursuant to
their current rate plans. Generally, changes during the terms of the rate plans to the amounts accrued for these
contingencies would not impact earnings.
Accounting for Long-Lived and Intangible Assets
The accounting rules for certain long-lived assets and intangible assets with definite lives require testing for
recoverability whenever events or changes in circumstances indicate their carrying amounts may not be
recoverable. The carrying amount of a long-lived asset or intangible asset with a definite life is deemed not
recoverable if it exceeds the sum of the undiscounted cash flows expected to result from the use and eventual
disposition of the asset. Under the accounting rules, an impairment loss is recognized if the carrying amount is not
recoverable from such cash flows, and exceeds its fair value, which approximates market value.
In January 2019, Pacific Gas and Electric Company (PG&E) filed for reorganization under Chapter 11 of the U.S.
Bankruptcy Code. The output of certain of the Clean Energy Businesses' renewable electric production projects is
sold to PG&E under long-term power purchase agreements. As a result of the PG&E bankruptcy, distributions from
the related projects to the Clean Energy Businesses were restricted and PG&E-related project debt was reclassified
on Con Edison’s consolidated balance sheet from long-term debt to long-term debt due within one year. In July
2020, PG&E’s plan of reorganization became effective and the Clean Energy Businesses began receiving
previously restricted distributions and all related project debt with a maturity longer than one year was reclassified to
long-term debt. See “Long-Lived and Intangible Assets” in Note A to the financial statements in Item 8.
Accounting for Cloud Computing Implementation Costs
The accounting rules for costs incurred in implementing cloud computing arrangements allow for capitalization of
such costs in the same manner as prepaid assets are recorded. Depreciation on the assets is recorded as other
operations and maintenance expense. See "Other Deferred Charges and Noncurrent Assets and Prepayments" in
Note A to the financial statements in Item 8.
Accounting for Derivative Instruments
The Companies apply the accounting rules for derivatives and hedging to their derivative financial instruments. The
Companies use derivative financial instruments to hedge market price fluctuations in related underlying transactions
for the physical purchase and sale of electricity and gas. The Utilities are permitted by their respective regulators to
reflect in rates all reasonably incurred gains and losses on these instruments. The Clean Energy Businesses have
also hedged interest rate risk on certain debt securities. See “Financial and Commodity Market Risks,” below and
Note P to the financial statements in Item 8.
Where the Companies are required to make mark-to-market estimates pursuant to the accounting rules, the
estimates of gains and losses at a particular period end do not reflect the end results of particular transactions, and
will most likely not reflect the actual gain or loss at the conclusion of a transaction. Substantially all of the estimated
gains or losses are based on prices supplied by external sources such as the fair value of exchange-traded futures
and options and the fair value of positions for which price quotations are available through or derived from brokers
or other market sources.
Investments
The accounting rules require Con Edison to periodically evaluate its equity method investments, to determine
whether they are impaired. The standard for determining whether an impairment exists and must be recorded is
whether an other-than-temporary decline in carrying value has occurred. The evaluation and measurement of
impairments involve uncertainties. The estimates that Con Edison makes with respect to its equity method
investments are based on assumptions that management believes are reasonable, and variations in these
estimates or the underlying assumptions could have a material impact on whether a triggering event is determined
to exist or the amount of any such impairment. Additionally, if the projects in which Con Edison holds these
investments recognize an impairment, Con Edison may record its proportionate share of that impairment loss and
would evaluate its investment for an other-than-temporary decline in value.
CON EDISON ANNUAL REPORT 2020
89
Con Edison evaluated its equity method investments as of December 31, 2020 and concluded that the fair value of
its investment in Mountain Valley Pipeline LLC (MVP) declined below its carrying value and the decline is other-
than-temporary. Accordingly, Con Edison recorded a pre-tax impairment loss of $320 million ($223 million after tax)
for the year ended December 31, 2020 that reduced the carrying value of its investment in MVP from $662 million to
$342 million. See “Investments” in Note A to the financial statements in Item 8.
There is risk that the carrying value of Con Edison’s investments in MVP may be further or fully impaired in the
future. There are ongoing legal and regulatory matters that must be resolved favorably before the Mountain Valley
Pipeline can be completed. Assumptions and estimates used to test Con Edison’s investments in MVP for
impairment may change if adverse or delayed resolutions to these matters were to occur, which could have a
material adverse effect on the fair value of Con Edison’s investment in MVP. Also, Con Edison is considering
strategic alternatives with respect to its 50 percent interest in Stagecoach Gas Services, LLC. As such strategic
alternatives are evaluated, Con Edison may be required to determine whether an other-than-temporary decline in
value has occurred for its Stagecoach investment.
At December 31, 2020, Con Edison’s consolidated balance sheet included investments of $1,816 million. See
“Investments” in Note A to the financial statements in Item 8.
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 and investment risk.
Interest Rate Risk
The Companies' interest rate risk primarily relates to new debt financing needed to fund capital requirements,
including the construction expenditures of the Utilities and maturing debt securities, and variable-rate debt. Con
Edison and its subsidiaries manage interest rate risk through the issuance of mostly fixed-rate debt with varying
maturities and through opportunistic refinancing of debt. The Clean Energy Businesses use interest rate swaps to
exchange variable-rate project financed debt for a fixed interest rate. See Note P to the financial statements in Item
8. Con Edison and CECONY estimate that at December 31, 2020, a 10 percent increase in interest rates applicable
to its variable rate debt would result in an increase in annual interest expense of $1 million. Under CECONY’s
current electric, gas and steam rate plans, variations in actual variable rate tax-exempt debt interest expense,
including costs associated with the refinancing of the variable rate tax-exempt debt, are reconciled to levels
reflected in rates.
Commodity Price Risk
Con Edison’s commodity price risk primarily relates to the purchase and sale of electricity, gas and related derivative
instruments. The Utilities and the Clean Energy Businesses apply risk management strategies to mitigate their
related exposures. See Note P to the financial statements in Item 8.
Con Edison estimates that, as of December 31, 2020, a 10 percent decline in market prices would result in a decline
in fair value of $87 million for the derivative instruments used by the Utilities to hedge purchases of electricity and
gas, of which $81 million is for CECONY and $6 million is for O&R. Con Edison expects that any such change in fair
value would be largely offset by directionally opposite changes in the cost of the electricity and gas purchased. In
accordance with provisions approved by state regulators, the Utilities generally recover from customers the costs
they incur for energy purchased for their customers, including gains and losses on certain derivative instruments
used to hedge energy purchased and related costs. See “Recoverable Energy Costs” in Note A to the financial
statements in Item 8.
The Clean Energy Businesses use a value-at-risk (VaR) model to assess the market price risk of their portfolio of
electricity and gas commodity fixed-price purchase and sales commitments, physical forward contracts, generating
assets and commodity derivative instruments. VaR represents the potential change in fair value of the portfolio due
to changes in market prices for a specified time period and confidence level. These businesses estimate VaR
across their portfolio using a delta-normal variance/covariance model with a 95 percent confidence level, 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 years ended December 31, 2020 and 2019,
respectively, was as follows:
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CON EDISON ANNUAL REPORT 2020
95% Confidence Level, One-Day Holding Period
Average for the period
High
Low
2020
2019
(Millions of Dollars)
$—
—
—
$—
1
—
Investment Risk
The Companies’ investment risk relates to the investment of plan assets for their pension and other postretirement
benefit plans. Con Edison's investment risk also relates to the investments of Con Edison Transmission that are
accounted for under the equity method. See “Application of Critical Accounting Policies – Accounting for Pensions
and Other Postretirement Benefits,” above and “Investments” in Note A and Notes E and F to the financial
statements in Item 8.
The Companies’ current investment policy for pension plan assets includes investment targets of 45 to 55 percent
equity securities, 33 to 43 percent debt securities and 10 to 14 percent real estate. At December 31, 2020, the
pension plan investments consisted of 51 percent equity securities, 38 percent debt securities and 11 percent real
estate.
For the Utilities’ pension and other postretirement benefit plans, regulatory accounting treatment is generally applied
in accordance with the accounting rules for regulated operations. In accordance with the Statement of Policy issued
by the NYSPSC and its current electric, gas and steam rate plans, CECONY defers for payment to or recovery from
customers the difference between the pension and other postretirement benefit expenses and the amounts for such
expenses reflected in rates. O&R also defers such difference pursuant to its New York rate plans.
Environmental Matters
For information concerning climate change, environmental sustainability, potential liabilities arising from laws and
regulations protecting the environment and other environmental matters, see “Environmental Matters” in Item 1 and
Note G to the financial statements in Item 8.
Impact of Inflation
The Companies are affected by the decline in the purchasing power of the dollar caused by inflation. Regulation
permits the Utilities to recover through depreciation only the historical cost of their plant assets even though in an
inflationary economy the cost to replace the assets upon their retirement will substantially exceed historical costs.
The impact is, however, partially offset by the repayment of the Companies’ long-term debt in dollars of lesser value
than the dollars originally borrowed.
Material Contingencies
For information concerning potential liabilities arising from the Companies’ material contingencies, see “Application
of Critical Accounting Policies – Accounting for Contingencies,” above, and Notes B, G and H to the financial
statements in Item 8.
CON EDISON ANNUAL REPORT 2020
91
Item 7A: Quantitative and Qualitative Disclosures about Market Risk
Con Edison
For information about Con Edison’s primary market risks associated with activities in derivative financial
instruments, other financial instruments and derivative commodity instruments, see “Financial and Commodity
Market Risks,” in Item 7 (which information is incorporated herein by reference). See also “The Companies Require
Access To Capital Markets To Satisfy Funding Requirements,” in Item 1A.
CECONY
For information about CECONY’s primary market risks associated with activities in derivative financial instruments,
other financial instruments and derivative commodity instruments, see “Financial and Commodity Market Risks” in
Item 7 (which information is incorporated herein by reference). See also “The Companies Require Access To Capital
Markets To Satisfy Funding Requirements,” in Item 1A.
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CON EDISON ANNUAL REPORT 2020
Item 8: Financial Statements and Supplementary Data
Financial Statements
Supplementary Financial Information
Con Edison
Report of Management on Internal Control Over Financial Reporting
Report of Independent Registered Public Accounting Firm
Consolidated Income Statement for the years ended December 31, 2020, 2019, and 2018
Consolidated Statement of Comprehensive Income for the years ended December 31, 2020, 2019 and 2018
Consolidated Statement of Cash Flows for the years ended December 31, 2020, 2019 and 2018
Consolidated Balance Sheet at December 31, 2020 and 2019
Consolidated Statement of Equity for the years ended December 31, 2020, 2019 and 2018
Consolidated Statement of Capitalization at December 31, 2020 and 2019
CECONY
Report of Management on Internal Control Over Financial Reporting
Report of Independent Registered Public Accounting Firm
Consolidated Income Statement for the years ended December 31, 2020, 2019 and 2018
Consolidated Statement of Comprehensive Income for the years ended December 31, 2020, 2019 and 2018
Consolidated Statement of Cash Flows for the years ended December 31, 2020, 2019 and 2018
Consolidated Balance Sheet at December 31, 2020 and 2019
Consolidated Statement of Shareholder’s Equity for the years ended December 31, 2020, 2019 and 2018
Consolidated Statement of Capitalization at December 31, 2020 and 2019
Notes to the Financial Statements
Financial Statement Schedules
Con Edison
Schedule I - Condensed Financial Information of Consolidated Edison, Inc. at December 31, 2020 and 2019 and for the
years ended December 31, 2020, 2019 and 2018
Schedule II - Valuation and Qualifying Accounts for the years ended December 31, 2020, 2019 and 2018
CECONY
Schedule II - Valuation and Qualifying Accounts for the years ended December 31, 2020, 2019 and 2018
Page
94
95
96
99
100
101
102
104
105
108
109
111
112
113
114
116
117
119
187
190
190
All other schedules are omitted because they are not applicable or the required information is shown in financial
statements or notes thereto.
CON EDISON ANNUAL REPORT 2020
93
Supplementary Financial Information
Selected Quarterly Financial Data for the years ended December 31, 2020 and 2019 (Unaudited)
Con Edison
Operating revenues
Operating income
Net income
Basic earnings per share
Diluted earnings per share
.
Con Edison
Operating revenues
Operating income
Net income
Basic earnings per share
Diluted earnings per share
2020
First
Quarter
Second
Quarter
Third
Quarter
Fourth
Quarter
(Millions of Dollars, except per share amounts)
$3,234
808
375
$1.13
$1.12
$2,719
479
190
$0.57
$0.57
$3,333
860
493
$1.47
$1.47
$2,960
507
43
$0.13
$0.13
2019
First
Quarter
Second
Quarter
Third
Quarter
Fourth
Quarter
(Millions of Dollars, except per share amounts)
$3,514
786
424
$1.31
$1.31
$2,744
458
152
$0.46
$0.46
$3,365
867
473
$1.42
$1.42
$2,951
565
295
$0.89
$0.88
In the opinion of Con Edison, these quarterly amounts include all adjustments, consisting only of normal recurring
accruals, necessary for a fair presentation. The sum of the quarterly financial information may vary from the annual
data due to rounding.
CECONY
Operating revenues
Operating income
Net income
CECONY
Operating revenues
Operating income
Net income
2020
First
Quarter
Second
Quarter
Third
Quarter
Fourth
Quarter
(Millions of Dollars)
$2,854
$2,345
$2,872
$2,576
742
406
389
152
722
405
457
222
2019
First
Quarter
Second
Quarter
Third
Quarter
Fourth
Quarter
(Millions of Dollars)
$3,039
$2,331
$2,877
$2,573
726
412
376
152
723
414
524
272
In the opinion of CECONY, these quarterly amounts include all adjustments, consisting only of normal recurring
accruals, necessary for a fair presentation. The sum of the quarterly financial information may vary from the annual
data due to rounding.
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CON EDISON ANNUAL REPORT 2020
Report of Management on Internal Control Over Financial Reporting
Management of Consolidated Edison, Inc. and its subsidiaries (the Company) is responsible for establishing and
maintaining adequate internal control over financial reporting. Internal control over financial reporting is a process
designed to provide reasonable, but not absolute, assurance regarding the reliability of financial reporting and the
preparation of financial statements for external purposes in accordance with accounting principles generally
accepted in the United States of America.
Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements.
Also, projections of the effectiveness of controls to future periods are subject to the risk that controls may become
inadequate because of changes in conditions, or that the degree of compliance with policies or procedures may
deteriorate.
Management of the Company assessed the effectiveness of internal control over financial reporting as of
December 31, 2020, using the criteria established by the Committee of Sponsoring Organizations of the Treadway
Commission (COSO) in Internal Control — Integrated Framework (2013). Based on that assessment, management
has concluded that the Company had effective internal control over financial reporting as of December 31, 2020.
The effectiveness of the Company’s internal control over financial reporting as of December 31, 2020, has been
audited by PricewaterhouseCoopers LLP, the Company’s independent registered public accounting firm, as stated
in their report which appears on the following page of this Annual Report on Form 10-K.
/s/ Timothy P. Cawley
Timothy P. Cawley
President and Chief Executive Officer
/s/ Robert Hoglund
Robert Hoglund
Senior Vice President and Chief Financial Officer
February 18, 2021
CON EDISON ANNUAL REPORT 2020
95
Report of Independent Registered Public Accounting Firm
To the Board of Directors and Shareholders of Consolidated Edison, Inc.:
Opinions on the Financial Statements and Internal Control over Financial Reporting
We have audited the consolidated financial statements, including the related notes and financial statement
schedules, of Consolidated Edison, Inc. and its subsidiaries (the "Company") as listed in the accompanying index
(collectively referred to as the “consolidated financial statements”). We also have audited the Company's internal
control over financial reporting as of December 31, 2020, based on criteria established in Internal Control -
Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission
(COSO).
In our opinion, the consolidated financial statements referred to above present fairly, in all material respects, the
financial position of the Company as of December 31, 2020 and 2019, and the results of its operations and its cash
flows for each of the three years in the period ended December 31, 2020 in conformity with accounting principles
generally accepted in the United States of America. Also in our opinion, the Company maintained, in all material
respects, effective internal control over financial reporting as of December 31, 2020, based on criteria established in
Internal Control - Integrated Framework (2013) issued by the COSO.
Change in Accounting Principle
As discussed in Note J to the consolidated financial statements, the Company changed the manner in which it
accounts for leases in 2019.
Basis for Opinions
The Company's management is responsible for these consolidated financial statements, for maintaining effective
internal control over financial reporting, and for its assessment of the effectiveness of internal control over financial
reporting, included in the accompanying Report of Management on Internal Control Over Financial Reporting. Our
responsibility is to express opinions on the Company’s consolidated financial statements and on the Company’s
internal control over financial reporting based on our audits. We are a public accounting firm registered with the
Public Company Accounting Oversight Board (United States) ("PCAOB") and are required to be independent with
respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations
of the Securities and Exchange Commission and the PCAOB.
We conducted our audits in accordance with the standards of the PCAOB. Those standards require that we plan
and perform the audits to obtain reasonable assurance about whether the consolidated financial statements are free
of material misstatement, whether due to error or fraud, and whether effective internal control over financial
reporting was maintained in all material respects.
Our audits of the consolidated financial statements included performing procedures to assess the risks of material
misstatement of the consolidated financial statements, whether due to error or fraud, and performing procedures
that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts
and disclosures in the consolidated financial statements. Our audits also included evaluating the accounting
principles used and significant estimates made by management, as well as evaluating the overall presentation of
the consolidated financial statements. Our audit of internal control over financial reporting included obtaining an
understanding of internal control over financial reporting, assessing the risk that a material weakness exists, and
testing and evaluating the design and operating effectiveness of internal control based on the assessed risk. Our
audits also included performing such other procedures as we considered necessary in the circumstances. We
believe that our audits provide a reasonable basis for our opinions.
Definition and Limitations of Internal Control over Financial Reporting
A company’s internal control over financial reporting is a process designed to provide reasonable assurance
regarding the reliability of financial reporting and the preparation of financial statements for external purposes in
accordance with generally accepted accounting principles. A company’s internal control over financial reporting
includes those policies and procedures that (i) pertain to the maintenance of records that, in reasonable detail,
accurately and fairly reflect the transactions and dispositions of the assets of the company; (ii) provide reasonable
assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance
with generally accepted accounting principles, and that receipts and expenditures of the company are being made
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CON EDISON ANNUAL REPORT 2020
only in accordance with authorizations of management and directors of the company; and (iii) provide reasonable
assurance regarding prevention or timely detection of unauthorized acquisition, use, or disposition of the company’s
assets that could have a material effect on the financial statements.
Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements.
Also, projections of any evaluation of effectiveness to future periods are subject to the risk that controls may
become inadequate because of changes in conditions, or that the degree of compliance with the policies or
procedures may deteriorate.
Critical Audit Matters
The critical audit matters communicated below are matters arising from the current period audit of the consolidated
financial statements that were communicated or required to be communicated to the audit committee and that (i)
relate to accounts or disclosures that are material to the consolidated financial statements and (ii) involved our
especially challenging, subjective, or complex judgments. The communication of critical audit matters does not alter
in any way our opinion on the consolidated financial statements, taken as a whole, and we are not, by
communicating the critical audit matters below, providing separate opinions on the critical audit matters or on the
accounts or disclosures to which they relate.
Accounting for the Effects of Regulatory Matters
As described in Notes A and B to the consolidated financial statements, the Company applies the authoritative
guidance for regulated operations, which specifies the economic effects that result from the causal relationship of
costs and revenues in the rate-regulated environment and how these effects are to be accounted for by a regulated
enterprise. As of December 31, 2020, there were $6,461 million of deferred costs included in regulatory assets and
$4,549 million of regulatory liabilities awaiting potential refund or future rate reductions. Under regulatory accounting
guidance, if it is probable that costs will be recovered in the future, those costs would be recorded as deferred
charges or “regulatory assets.” Similarly, if revenues are recorded for costs expected to be incurred in the future,
these revenues would be recorded as deferred credits or “regulatory liabilities.” The Company’s regulatory assets
and liabilities will be recovered from customers, or applied for customer benefit, in accordance with rate provisions
approved by the applicable state and federal regulators.
The principal considerations for our determination that performing procedures relating to the accounting for the
effects of regulatory matters is a critical audit matter are the significant auditor judgment and subjectivity in
performing procedures and evaluating audit evidence relating to the computation of regulatory assets and regulatory
liabilities.
Addressing the matter involved performing procedures and evaluating audit evidence in connection with forming our
overall opinion on the consolidated financial statements. These procedures included testing the effectiveness of
controls relating to management’s assessment of regulatory proceedings, including the implementation of new
regulatory orders or changes to existing regulatory balances. These procedures also included, among others,
evaluating the reasonableness of management’s assessment of impacts arising from correspondence with
regulators and changes in laws and regulations; evaluating management’s judgments related to the recoverability of
regulatory assets and the establishment of regulatory liabilities; and recalculating regulatory assets and liabilities
based on provisions and formulas outlined in rate orders and other correspondence with regulators.
Partial Impairment of the Equity Method Investment in Mountain Valley Pipeline LLC ("MVP")
As described in Note A to the consolidated financial statements, the balance of the Company’s equity method
investment in MVP, a company developing a proposed gas transmission project (“Project”), was $342 million as of
December 31, 2020. Management periodically evaluates its equity method investments to determine whether an
other-than-temporary decline in carrying value has occurred and an impairment exists. Management determined
that the uncertainty related to obtaining the necessary permits in lieu of the Nationwide Permit 12, the resulting
Project costs and the likelihood of the Project not reaching eventual completion have increased, constituting a
triggering event which required management to test its investment in MVP for an other-than-temporary impairment
as of December 31, 2020. Management used a discounted cash flow analysis to estimate the fair value of its
investment, resulting in a pre-tax impairment loss of $320 million. The analysis discounted probability-weighted
future cash flows, including revenues based on long-term firm transportation contracts, that are secured for the first
20 years following completion of the Project. Management determined that the discount rate and the likelihood that
the Project is completed are the most significant and sensitive assumptions.
CON EDISON ANNUAL REPORT 2020
97
The principal considerations for our determination that performing procedures relating to the partial impairment of
the equity method investment in MVP is a critical audit matter are (i) the significant judgment by management when
developing the fair value measurement of the investment, (ii) a high degree of auditor judgment, subjectivity, and
effort in performing procedures and evaluating audit evidence related to management’s significant assumptions
related to the probability of completion of the Project and the discount rate, and (iii) the audit effort involved the use
of professionals with specialized skill and knowledge.
Addressing the matter involved performing procedures and evaluating audit evidence in connection with forming our
overall opinion on the consolidated financial statements. These procedures included testing the effectiveness of
controls relating to management’s impairment assessment for the equity method investment in MVP, including
controls over the discounted cash flow analysis and development of the significant assumptions related to the
probability of completion of the Project and the discount rate. These procedures also included, among others, (i)
evaluating management’s impairment assessment for MVP, (ii) evaluating the appropriateness of the discounted
cash flow analysis, (iii) testing the completeness and accuracy of the underlying data used in the discounted cash
flow analysis, and (iv) evaluating the significant assumptions used by management related to the probability of
completion of the Project and the discount rate. Evaluating management’s assumption related to the probability of
completion of the Project involved evaluating whether the assumption used by management was reasonable
considering (i) the status of the permitting process with the relevant authorities and (ii) external market and industry
data. Professionals with specialized skill and knowledge were used to assist in the evaluation of the discounted
cash flow analysis and the discount rate assumption.
/s/ PricewaterhouseCoopers LLP
New York, New York
February 18, 2021
We have served as the Company’s or its predecessors' auditor since 1938.
98
CON EDISON ANNUAL REPORT 2020
Consolidated Edison, Inc.
Consolidated Income Statement
(Millions of Dollars/Except Share Data)
OPERATING REVENUES
Electric
Gas
Steam
Non-utility
TOTAL OPERATING REVENUES
OPERATING EXPENSES
Purchased power
Fuel
Gas purchased for resale
Other operations and maintenance
Depreciation and amortization
Taxes, other than income taxes
TOTAL OPERATING EXPENSES
Gain on acquisition of Sempra Solar Holdings, LLC
OPERATING INCOME
OTHER INCOME (DEDUCTIONS)
Investment income (loss)
Other income
Allowance for equity funds used during construction
Other deductions
TOTAL OTHER INCOME (DEDUCTIONS)
INCOME BEFORE INTEREST AND INCOME TAX EXPENSE
INTEREST EXPENSE
Interest on long-term debt
Other interest
Allowance for borrowed funds used during construction
NET INTEREST EXPENSE
INCOME BEFORE INCOME TAX EXPENSE
INCOME TAX EXPENSE
NET INCOME
Income attributable to non-controlling interest
NET INCOME FOR COMMON STOCK
Net income per common share — basic
Net income per common share — diluted
AVERAGE NUMBER OF SHARES OUTSTANDING — BASIC (IN MILLIONS)
AVERAGE NUMBER OF SHARES OUTSTANDING — DILUTED (IN MILLIONS)
The accompanying notes are an integral part of these financial statements.
For the Years Ended December 31,
2020
2019
2018
$8,730
2,269
508
739
$8,694
2,391
627
862
$8,612
2,327
631
767
12,246
12,574
12,337
1,600
156
527
2,814
1,920
2,575
9,592
—
2,654
(214)
23
17
(227)
(401)
2,253
915
118
(14)
1,019
1,234
90
$1,144
$43
$1,101
$3.29
$3.28
334.8
335.7
1,546
207
880
3,175
1,684
2,406
9,898
—
2,676
96
45
14
(104)
51
2,727
888
116
(13)
991
1,736
296
$1,440
$97
$1,343
$4.09
$4.08
328.5
329.5
1,644
263
1,041
3,152
1,438
2,266
9,804
131
2,664
119
17
12
(210)
(62)
2,602
780
49
(10)
819
1,783
401
$1,382
$—
$1,382
$4.43
$4.42
311.7
312.9
CON EDISON ANNUAL REPORT 2020
99
Consolidated Edison, Inc.
Consolidated Statement of Comprehensive Income
(Millions of Dollars)
NET INCOME
INCOME ATTRIBUTABLE TO NON-CONTROLLING INTEREST
OTHER COMPREHENSIVE INCOME (LOSS), NET OF TAXES
Pension and other postretirement benefit plan liability adjustments, net of taxes
Other income, net of taxes
TOTAL OTHER COMPREHENSIVE INCOME (LOSS), NET OF TAXES
COMPREHENSIVE INCOME
For the Years Ended December 31,
2020
$1,144
(43)
(6)
—
(6)
2019
$1,440
(97)
(5)
2
(3)
2018
$1,382
—
10
—
10
$1,095
$1,340
$1,392
The accompanying notes are an integral part of these financial statements.
100
CON EDISON ANNUAL REPORT 2020
Consolidated Edison, Inc.
Consolidated Statement of Cash Flows
(Millions of Dollars)
OPERATING ACTIVITIES
Net Income
PRINCIPAL NON-CASH CHARGES/(CREDITS) TO INCOME
Depreciation and amortization
Impairment of assets
Deferred income taxes
Rate case amortization and accruals
Common equity component of allowance for funds used during construction
Net derivative (gains)/losses
(Gain) on Sale of Assets
Unbilled revenue and net unbilled revenue deferrals
(Gain) on existing project interests due to acquisition of Sempra Solar Holdings, LLC
Other non-cash items, net
CHANGES IN ASSETS AND LIABILITIES
Accounts receivable - customers
Materials and supplies, including fuel oil and gas in storage
Revenue decoupling mechanism receivable
Other receivables and other current assets
Taxes receivable
Prepayments
Accounts payable
Pensions and retiree benefits obligations, net
Pensions and retiree benefits contributions
Accrued taxes
Accrued interest
Superfund and environmental remediation costs, net
Distributions from equity investments
System benefit charge
Deferred charges, noncurrent assets and other regulatory assets
Deferred credits and other regulatory liabilities
Other current and noncurrent liabilities
NET CASH FLOWS FROM OPERATING ACTIVITIES
INVESTING ACTIVITIES
Utility construction expenditures
Cost of removal less salvage
Non-utility construction expenditures
Investments in electric and gas transmission projects
Investments in/acquisitions of renewable electric production projects
Acquisition of Sempra Solar Holdings, LLC, net of cash acquired
Proceeds from sale of assets
Other investing activities
NET CASH FLOWS USED IN INVESTING ACTIVITIES
FINANCING ACTIVITIES
Net (payment)/issuance of short-term debt
Issuance of long-term debt
Retirement of long-term debt
Debt issuance costs
Common stock dividends
Issuance of common shares - public offering
Issuance of common shares for stock plans
Distribution to noncontrolling interest
NET CASH FLOWS FROM FINANCING ACTIVITIES
CASH, TEMPORARY CASH INVESTMENTS AND RESTRICTED CASH:
NET CHANGE FOR THE PERIOD
BALANCE AT BEGINNING OF PERIOD
BALANCE AT END OF PERIOD
SUPPLEMENTAL DISCLOSURE OF CASH INFORMATION
Cash paid/(received) during the period for:
Interest
Income taxes
SUPPLEMENTAL DISCLOSURE OF NON-CASH INFORMATION
Construction expenditures in accounts payable
Issuance of common shares for dividend reinvestment
Debt assumed with business acquisitions
Software licenses acquired but unpaid as of end of period
Equipment acquired but unpaid as of end of period
For the Years Ended December 31
2018
2019
2020
$1,144
$1,440
$1,382
1,920
1,684
320
85
(40)
(17)
57
—
(1)
—
127
(543)
(4)
(61)
(134)
(6)
(11)
170
285
(478)
74
(4)
(22)
39
(119)
(653)
10
60
2,198
(3,326)
(310)
(583)
(3)
(24)
—
—
22
(4,224)
178
2,925
(518)
(47)
(975)
640
58
(16)
2,245
219
1,217
$1,436
$920
$38
$478
$48
$—
$51
$28
—
308
(116)
(14)
27
(14)
(3)
—
(18)
23
6
(76)
54
29
(73)
10
357
(357)
10
24
(9)
57
20
(492)
278
(21)
3,134
(3,238)
(295)
(248)
(205)
(10)
—
192
22
(3,782)
(874)
3,017
(1,195)
(32)
(924)
825
54
(12)
859
211
1,006
$1,217
$876
($26)
$336
$47
$—
$80
33
1,438
—
408
(117)
(12)
8
—
18
(131)
115
(140)
(20)
—
(62)
27
(7)
(46)
325
(479)
(49)
(35)
(19)
107
92
(393)
436
(151)
2,695
(3,251)
(258)
(246)
(248)
(19)
(1,488)
5
34
(5,471)
1,989
3,030
(1,938)
(61)
(842)
705
53
2
2,938
162
844
$1,006
$805
$—
$369
$47
$568
$100
$—
The accompanying notes are an integral part of these financial statements.
CON EDISON ANNUAL REPORT 2020
101
Consolidated Edison, Inc.
Consolidated Balance Sheet
(Millions of Dollars)
ASSETS
CURRENT ASSETS
Cash and temporary cash investments
Accounts receivable — customers, less allowance for uncollectible accounts of $148 and $70 in 2020
and 2019, respectively
Other receivables, less allowance for uncollectible accounts of $7 and $4 in 2020 and 2019,
respectively
Taxes receivable
Accrued unbilled revenue
Fuel oil, gas in storage, materials and supplies, at average cost
Prepayments
Regulatory assets
Restricted cash
Revenue decoupling mechanism receivable
Other current assets
TOTAL CURRENT ASSETS
INVESTMENTS
UTILITY PLANT, AT ORIGINAL COST
Electric
Gas
Steam
General
TOTAL
Less: Accumulated depreciation
Net
Construction work in progress
NET UTILITY PLANT
NON-UTILITY PLANT
Non-utility property, less accumulated depreciation of $522 and $391 in 2020 and 2019, respectively
Construction work in progress
NET PLANT
OTHER NONCURRENT ASSETS
Goodwill
Intangible assets, less accumulated amortization of $228 and $126 in 2020 and 2019, respectively
Operating lease right-of-use-asset
Regulatory assets
Other deferred charges and noncurrent assets
TOTAL OTHER NONCURRENT ASSETS
TOTAL ASSETS
The accompanying notes are an integral part of these financial statements.
December 31,
2020
December 31,
2019
$1,272
1,701
278
26
599
356
271
266
164
137
231
5,301
1,816
33,315
10,847
2,696
3,880
50,738
11,188
39,550
2,474
42,024
3,893
638
46,555
446
1,460
837
6,195
285
9,223
$981
1,236
184
20
599
352
260
128
236
76
200
4,272
2,065
31,866
10,107
2,601
3,562
48,136
10,322
37,814
1,937
39,751
3,829
309
43,889
446
1,557
857
4,859
134
7,853
$62,895
$58,079
102
CON EDISON ANNUAL REPORT 2020
Consolidated Edison, Inc.
Consolidated Balance Sheet
(Millions of Dollars)
LIABILITIES AND SHAREHOLDERS’ EQUITY
CURRENT LIABILITIES
Long-term debt due within one year
Term Loan
Notes payable
Accounts payable
Customer deposits
Accrued taxes
Accrued interest
Accrued wages
Fair value of derivative liabilities
Regulatory liabilities
System benefit charge
Operating lease liabilities
Other current liabilities
TOTAL CURRENT LIABILITIES
NONCURRENT LIABILITIES
Provision for injuries and damages
Pensions and retiree benefits
Superfund and other environmental costs
Asset retirement obligations
Fair value of derivative liabilities
Deferred income taxes and unamortized investment tax credits
Operating lease liabilities
Regulatory liabilities
Other deferred credits and noncurrent liabilities
TOTAL NONCURRENT LIABILITIES
LONG-TERM DEBT
COMMITMENTS, CONTINGENCIES, AND GUARANTEES (Note B, Note G, and Note H)
EQUITY
Common shareholders’ equity
Noncontrolling interest
TOTAL EQUITY (See Statement of Equity)
TOTAL LIABILITIES AND EQUITY
The accompanying notes are an integral part of these financial statements.
December 31,
2020
December 31,
2019
$1,967
165
1,705
1,475
311
150
149
108
238
36
528
96
426
7,354
178
2,257
857
576
240
6,475
764
4,513
234
16,094
20,382
$1,446
—
1,692
1,164
346
76
153
102
123
102
647
65
371
6,287
130
1,516
734
425
105
6,227
809
4,827
279
15,052
18,527
18,847
218
19,065
$62,895
18,022
191
18,213
$58,079
CON EDISON ANNUAL REPORT 2020
103
Consolidated Edison, Inc.
Consolidated Statement of Equity
(In Millions/Except
Share Data)
BALANCE AS OF
DECEMBER 31, 2017
Net income
Common stock dividends
($2.86 per share)
Issuance of common
shares - public offering
11
Issuance of common
shares for stock plans
Other comprehensive
income
Noncontrolling interest
BALANCE AS OF
Common Stock
Shares Amount
Additional
Paid-In
Capital
Retained
Earnings
Treasury Stock
Shares Amount
Capital
Stock
Expense
Accumulated
Other
Comprehensive
Income/(Loss)
Noncontrolling
Interest
Total
310
$34
$6,298
$10,235
23 $(1,038)
$(85)
$(26)
$7 $15,425
1,382
(889)
719
100
(14)
$1,382
(889)
705
100
10
106
10
106
DECEMBER 31, 2018
321
$34
$7,117
$10,728
23 $(1,038)
$(99)
$(16)
$113 $16,839
Net income
Common stock dividends
($2.96 per share)
Issuance of common
shares - public offering
Issuance of common
shares for stock plans
Other comprehensive
income
Noncontrolling interest
BALANCE AS OF
DECEMBER 31, 2019
Net income
Common stock dividends
($3.06 per share)
Issuance of common
shares - public offering
Issuance of common
shares for stock plans
Other comprehensive
income
Noncontrolling interest
BALANCE AS OF
DECEMBER 31, 2020
1,343
(971)
12
1
835
102
(11)
(3)
97
$1,440
(971)
825
102
(3)
(19)
(19)
333
$35
$8,054
$11,100
23 $(1,038)
$(110)
$(19)
$191 $18,213
1,101
(1,023)
9
1
641
113
(2)
43
$1,144
(1,023)
640
113
(6)
(16)
(6)
(16)
342
$36
$8,808
$11,178
23 $(1,038)
$(112)
$(25)
$218 $19,065
The accompanying notes are an integral part of these financial statements.
104
CON EDISON ANNUAL REPORT 2020
Consolidated Edison, Inc.
Consolidated Statement of Capitalization
(In Millions)
TOTAL EQUITY BEFORE ACCUMULATED OTHER
COMPREHENSIVE INCOME (LOSS)
Pension plan liability adjustments, net of taxes
Unrealized gains/(losses) on derivatives qualified as cash flow
hedges, less reclassification adjustment for gains/(losses)
included in net income and reclassification adjustment for
unrealized losses included in regulatory assets, net of taxes
TOTAL ACCUMULATED OTHER COMPREHENSIVE INCOME
(LOSS), NET OF TAXES
Equity
Noncontrolling interest
TOTAL EQUITY (See Statement of Equity)
Shares outstanding
December 31,
2020
$342
2019
$333
At December 31,
2020
2019
$18,872
$18,041
(23)
(17)
(2)
(2)
(25)
18,847
218
$19,065
(19)
18,022
191
$18,213
The accompanying notes are an integral part of these financial statements.
CON EDISON ANNUAL REPORT 2020
105
Consolidated Edison, Inc.
Consolidated Statement of Capitalization
LONG-TERM DEBT (Millions of Dollars)
Maturity
DEBENTURES:
2020
Interest Rate
4.45
2021
2021
2023
2024
2026
2027
2027
2028
2028
2029
2030
2030
2033
2033
2034
2035
2035
2036
2036
2036
2037
2038
2039
2039
2039
2040
2040
2042
2043
2044
2045
2045
2045
2046
2046
2047
2048
2048
2048
2049
2049
2050
2050
2054
2056
2057
2058
2059
2060
2.00
0.65
0.65
3.30
2.90
6.50
3.125
3.80
4.00
2.94
3.35
2.02
5.875
5.10
5.70
5.30
5.25
5.85
6.20
5.70
6.30
6.75
6.00
5.50
3.46
5.70
5.50
4.20
3.95
4.45
4.50
4.95
4.69
3.85
3.88
3.875
4.65
4.35
4.35
4.125
3.73
3.95
3.24
4.625
4.30
4.00
4.50
3.70
3.00
Series
2010A
2016A
(a) 2018C
2020A
2014B
2016B
1997F
2017B
2018A
2018D
2019B
2020A
2020A
2003A
2003C
2004B
2005A
2005B
2006A
2006B
2006E
2007A
2008B
2009B
2009C
2019C
2010B
2010B
2012A
2013A
2014A
2015A
2015A
2015B
2016A
2016A
2017A
2018E
2018A
2018B
2019A
2019A
2020B
2020B
2014C
2016C
2017C
2018B
2019B
2020C
At December 31,
2020
$—
500
640
650
250
250
80
350
300
500
44
600
35
175
200
200
350
125
400
400
250
525
600
60
600
38
350
115
400
700
850
650
120
100
550
75
500
600
125
25
700
43
1,000
40
750
500
350
700
600
600
2019
$350
500
640
—
250
250
80
350
300
500
44
—
—
175
200
200
350
125
400
400
250
525
600
60
600
38
350
115
400
700
850
650
120
100
550
75
500
600
125
25
700
43
—
—
750
500
350
700
600
—
TOTAL DEBENTURES
18,565
15,990
106
CON EDISON ANNUAL REPORT 2020
Consolidated Edison, Inc.
Consolidated Statement of Capitalization
LONG-TERM DEBT (Millions of Dollars)
Maturity
TAX-EXEMPT DEBT - Notes issued to New York State Energy
Research and Development Authority for Facilities Revenue Bonds:
Interest Rate
(a)
(a)
(a)
(b)
(b)
(b)
(b)
(b)
2036
2039
0.11%
0.11
2039
0.09
TOTAL TAX-EXEMPT DEBT
PROJECT DEBT:
2023
2024-2032
4.04
3.78 - 4.52
2025
2026
2028
2028
2031
2031-2038
2036
2036
2037
2038
2039
2040
2041
2042
4.10
3.72
4.41
3.41
2.24 - 3.03
5.25 - 4.95
3.94
4.07
4.78
3.82
4.82
4.53
4.21
4.45
Other project debt
TOTAL PROJECT DEBT
Other long-term debt
Unamortized debt expense
Unamortized debt discount
TOTAL
Less: Long-term debt due within one year
TOTAL LONG-TERM DEBT
TOTAL CAPITALIZATION
Series
2010A
2004C
2005A
Copper Mountain Solar 2
Coram
Copper Mountain Solar 3
CED Southwest
Wind Holdings
Copper Mountain Solar 1
Mesquite Solar 1
Texas Solar 4
California Solar 2
California Solar 3
California Solar
California Solar 4
Broken Bow II
Texas Solar 5
Texas Solar 7
Upton County Solar
At December 31,
2020
2019
225
99
126
450
204
141
264
437
109
56
180
54
93
82
178
284
67
140
192
87
10
225
99
126
450
224
150
289
456
123
67
193
56
98
86
184
297
68
145
199
90
12
2,578
971
(168)
(47)
22,349
1,967
20,382
$39,229
2,737
974
(141)
(37)
19,973
1,446
18,527
$36,549
(a) Rates reset weekly or quarterly; December 31, 2020 rates shown.
(b) December 31, 2020 effective rates shown, reflecting variable interest rates on the debt that are reset quarterly or semi-annually and the effect of applicable interest rate swaps, if any.
The accompanying notes are an integral part of these financial statements.
CON EDISON ANNUAL REPORT 2020
107
Report of Management on Internal Control Over Financial Reporting
Management of Consolidated Edison Company of New York, Inc. and its subsidiaries (the Company) is responsible
for establishing and maintaining adequate internal control over financial reporting. Internal control over financial
reporting is a process designed to provide reasonable, but not absolute, assurance regarding the reliability of
financial reporting and the preparation of financial statements for external purposes in accordance with accounting
principles generally accepted in the United States of America.
Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements.
Also, projections of the effectiveness of controls to future periods are subject to the risk that controls may become
inadequate because of changes in conditions, or that the degree of compliance with policies or procedures may
deteriorate.
Management of the Company assessed the effectiveness of internal control over financial reporting as of
December 31, 2020, using the criteria established by the Committee of Sponsoring Organizations of the Treadway
Commission (COSO) in Internal Control – Integrated Framework (2013). Based on that assessment, management
has concluded that the Company had effective internal control over financial reporting as of December 31, 2020.
The effectiveness of the Company’s internal control over financial reporting as of December 31, 2020, has been
audited by PricewaterhouseCoopers LLP, the Company’s independent registered public accounting firm, as stated
in their report which appears on the following page of this Annual Report on Form 10-K.
/s/ Timothy P. Cawley
Timothy P. Cawley
Chief Executive Officer
/s/ Robert Hoglund
Robert Hoglund
Senior Vice President and Chief Financial Officer
February 18, 2021
108
CON EDISON ANNUAL REPORT 2020
Report of Independent Registered Public Accounting Firm
To the Board of Trustees and Shareholder of Consolidated Edison Company of New York, Inc.:
Opinions on the Financial Statements and Internal Control over Financial Reporting
We have audited the consolidated financial statements, including the related notes and financial statement
schedule, of Consolidated Edison Company of New York, Inc. and its subsidiaries (the “Company”) as listed in the
accompanying index (collectively referred to as the “consolidated financial statements”). We also have audited the
Company's internal control over financial reporting as of December 31, 2020, based on criteria established in
Internal Control - Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the
Treadway Commission (COSO).
In our opinion, the consolidated financial statements referred to above present fairly, in all material respects, the
financial position of the Company as of December 31, 2020 and 2019, and the results of its operations and its cash
flows for each of the three years in the period ended December 31, 2020 in conformity with accounting principles
generally accepted in the United States of America. Also in our opinion, the Company maintained, in all material
respects, effective internal control over financial reporting as of December 31, 2020, based on criteria established in
Internal Control - Integrated Framework (2013) issued by the COSO.
Change in Accounting Principle
As discussed in Note J to the consolidated financial statements, the Company changed the manner in which it
accounts for leases in 2019.
Basis for Opinions
The Company's management is responsible for these consolidated financial statements, for maintaining effective
internal control over financial reporting, and for its assessment of the effectiveness of internal control over financial
reporting, included in the accompanying Report of Management on Internal Control Over Financial Reporting. Our
responsibility is to express opinions on the Company’s consolidated financial statements and on the Company's
internal control over financial reporting based on our audits. We are a public accounting firm registered with the
Public Company Accounting Oversight Board (United States) (PCAOB) and are required to be independent with
respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations
of the Securities and Exchange Commission and the PCAOB.
We conducted our audits in accordance with the standards of the PCAOB. Those standards require that we plan
and perform the audits to obtain reasonable assurance about whether the consolidated financial statements are free
of material misstatement, whether due to error or fraud, and whether effective internal control over financial
reporting was maintained in all material respects.
Our audits of the consolidated financial statements included performing procedures to assess the risks of material
misstatement of the consolidated financial statements, whether due to error or fraud, and performing procedures
that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts
and disclosures in the consolidated financial statements. Our audits also included evaluating the accounting
principles used and significant estimates made by management, as well as evaluating the overall presentation of
the consolidated financial statements. Our audit of internal control over financial reporting included obtaining an
understanding of internal control over financial reporting, assessing the risk that a material weakness exists, and
testing and evaluating the design and operating effectiveness of internal control based on the assessed risk. Our
audits also included performing such other procedures as we considered necessary in the circumstances. We
believe that our audits provide a reasonable basis for our opinions.
Definition and Limitations of Internal Control over Financial Reporting
A company’s internal control over financial reporting is a process designed to provide reasonable assurance
regarding the reliability of financial reporting and the preparation of financial statements for external purposes in
accordance with generally accepted accounting principles. A company’s internal control over financial reporting
includes those policies and procedures that (i) pertain to the maintenance of records that, in reasonable detail,
accurately and fairly reflect the transactions and dispositions of the assets of the company; (ii) provide reasonable
assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance
with generally accepted accounting principles, and that receipts and expenditures of the company are being made
CON EDISON ANNUAL REPORT 2020
109
only in accordance with authorizations of management and directors of the company; and (iii) provide reasonable
assurance regarding prevention or timely detection of unauthorized acquisition, use, or disposition of the company’s
assets that could have a material effect on the financial statements.
Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements.
Also, projections of any evaluation of effectiveness to future periods are subject to the risk that controls may
become inadequate because of changes in conditions, or that the degree of compliance with the policies or
procedures may deteriorate.
Critical Audit Matters
The critical audit matter communicated below is a matter arising from the current period audit of the consolidated
financial statements that was communicated or required to be communicated to the audit committee and that (i)
relates to accounts or disclosures that are material to the consolidated financial statements and (ii) involved our
especially challenging, subjective, or complex judgments. The communication of critical audit matters does not alter
in any way our opinion on the consolidated financial statements, taken as a whole, and we are not, by
communicating the critical audit matter below, providing a separate opinion on the critical audit matter or on the
accounts or disclosures to which it relates.
Accounting for the Effects of Regulatory Matters
As described in Notes A and B to the consolidated financial statements, the Company applies the authoritative
guidance for regulated operations, which specifies the economic effects that result from the causal relationship of
costs and revenues in the rate-regulated environment and how these effects are to be accounted for by a regulated
enterprise. As of December 31, 2020, there were $5,989 million of deferred costs included in regulatory assets and
$4,105 million of regulatory liabilities awaiting potential refund or future rate reductions. Under regulatory accounting
guidance, if it is probable that costs will be recovered in the future, those costs would be recorded as deferred
charges or “regulatory assets.” Similarly, if revenues are recorded for costs expected to be incurred in the future,
these revenues would be recorded as deferred credits or “regulatory liabilities.” The Company’s regulatory assets
and liabilities will be recovered from customers, or applied for customer benefit, in accordance with rate provisions
approved by the applicable state and federal regulators.
The principal considerations for our determination that performing procedures relating to the accounting for the
effects of regulatory matters is a critical audit matter are the significant auditor judgment and subjectivity in
performing procedures and evaluating audit evidence relating to the computation of regulatory assets and regulatory
liabilities.
Addressing the matter involved performing procedures and evaluating audit evidence in connection with forming our
overall opinion on the consolidated financial statements. These procedures included testing the effectiveness of
controls relating to management’s assessment of regulatory proceedings, including the implementation of new
regulatory orders or changes to existing regulatory balances. These procedures also included, among others,
evaluating the reasonableness of management’s assessment of impacts arising from correspondence with
regulators and changes in laws and regulations; evaluating management’s judgments related to the recoverability of
regulatory assets and the establishment of regulatory liabilities; and recalculating regulatory assets and liabilities
based on provisions and formulas outlined in rate orders and other correspondence with regulators.
/s/ PricewaterhouseCoopers LLP
New York, New York
February 18, 2021
We have served as the Company’s auditor since 1938.
110
CON EDISON ANNUAL REPORT 2020
Consolidated Edison Company of New York, Inc.
Consolidated Income Statement
(Millions of Dollars)
OPERATING REVENUES
Electric
Gas
Steam
TOTAL OPERATING REVENUES
OPERATING EXPENSES
Purchased power
Fuel
Gas purchased for resale
Other operations and maintenance
Depreciation and amortization
Taxes, other than income taxes
TOTAL OPERATING EXPENSES
OPERATING INCOME
OTHER INCOME (DEDUCTIONS)
Investment and other income
Allowance for equity funds used during construction
Other deductions
TOTAL OTHER INCOME (DEDUCTIONS)
INCOME BEFORE INTEREST AND INCOME TAX EXPENSE
INTEREST EXPENSE
Interest on long-term debt
Other interest
Allowance for borrowed funds used during construction
NET INTEREST EXPENSE
INCOME BEFORE INCOME TAX EXPENSE
INCOME TAX EXPENSE
NET INCOME
For the Years Ended December 31,
2020
2019
2018
$8,103
2,036
508
10,647
1,432
156
426
2,269
1,598
2,456
8,337
2,310
19
14
(204)
(171)
2,139
718
33
(12)
739
1,400
215
$1,185
$8,062
2,132
627
10,821
1,357
207
606
2,635
1,373
2,295
8,473
2,348
40
12
(87)
(35)
2,313
672
67
(11)
728
1,585
335
$1,250
$7,971
2,078
631
10,680
1,433
263
643
2,555
1,276
2,156
8,326
2,354
13
11
(167)
(143)
2,211
662
36
(9)
689
1,522
326
$1,196
The accompanying notes are an integral part of these financial statements.
CON EDISON ANNUAL REPORT 2020
111
Consolidated Edison Company of New York, Inc.
Consolidated Statement of Comprehensive Income
(Millions of Dollars)
NET INCOME
OTHER COMPREHENSIVE INCOME (LOSS), NET OF TAXES
Pension and other postretirement benefit plan liability adjustments, net of taxes
Other income, net of taxes
TOTAL OTHER COMPREHENSIVE INCOME (LOSS), NET OF TAXES
COMPREHENSIVE INCOME
For the Years Ended December 31,
2020
$1,185
2019
$1,250
2018
$1,196
(1)
—
(1)
(3)
2
(1)
1
—
1
$1,184
$1,249
$1,197
The accompanying notes are an integral part of these financial statements.
112
CON EDISON ANNUAL REPORT 2020
Consolidated Edison Company of New York, Inc.
Consolidated Statement of Cash Flows
(Millions of Dollars)
OPERATING ACTIVITIES
Net income
PRINCIPAL NON-CASH CHARGES/(CREDITS) TO INCOME
Depreciation and amortization
Deferred income taxes
Rate case amortization and accruals
Common equity component of allowance for funds used during construction
(Gain)/Loss on Sale of Assets
Unbilled revenue and net unbilled revenue deferrals
Other non-cash items, net
CHANGES IN ASSETS AND LIABILITIES
Accounts receivable - customers
Materials and supplies, including fuel oil and gas in storage
Revenue decoupling mechanism receivable
Other receivables and other current assets
Accounts receivables from affiliated companies
Prepayments
Accounts payable
Accounts payable to affiliated companies
Pensions and retiree benefits obligations, net
Pensions and retiree benefits contributions
Superfund and environmental remediation costs, net
Accrued taxes
Accrued taxes to affiliated companies
Accrued interest
System benefit charge
Deferred charges, noncurrent assets and other regulatory assets
Deferred credits and other regulatory liabilities
Other current and noncurrent liabilities
NET CASH FLOWS FROM OPERATING ACTIVITIES
INVESTING ACTIVITIES
Utility construction expenditures
Cost of removal less salvage
Proceeds from sale of assets
NET CASH FLOWS USED IN INVESTING ACTIVITIES
FINANCING ACTIVITIES
Net (payment)/issuance of short-term debt
Issuance of long-term debt
Retirement of long-term debt
Debt issuance costs
Capital contribution by parent
Dividend to parent
NET CASH FLOWS FROM FINANCING ACTIVITIES
CASH, TEMPORARY CASH INVESTMENTS AND RESTRICTED CASH:
NET CHANGE FOR THE PERIOD
BALANCE AT BEGINNING OF PERIOD
BALANCE AT END OF PERIOD
SUPPLEMENTAL DISCLOSURE OF CASH INFORMATION
Cash paid during the period for:
Interest
Income taxes
SUPPLEMENTAL DISCLOSURE OF NON-CASH INFORMATION
Construction expenditures in accounts payable
Software licenses acquired but unpaid as of end of period
Equipment acquired but unpaid as of end of period
For the Years Ended December 31,
2020
2019
2018
$1,185
$1,250
$1,196
1,598
168
(40)
(14)
—
(47)
66
(516)
2
(53)
(49)
(61)
19
145
9
253
(438)
(30)
61
1
13
(112)
(603)
92
44
1,693
1,373
128
(117)
(12)
(14)
(3)
7
3
11
(76)
54
141
(61)
(7)
(4)
330
(325)
(12)
11
—
1
18
(486)
306
(14)
2,502
1,276
354
(133)
(11)
—
(4)
13
(153)
(17)
—
(96)
(150)
(9)
(27)
7
293
(440)
(18)
(47)
(72)
(1)
86
(314)
549
(78)
2,204
(3,112)
(304)
(3,028)
(288)
—
192
(3,051)
(255)
—
(3,416)
(3,124)
(3,306)
523
2,200
(350)
(34)
500
(982)
1,857
134
933
$1,067
$693
$102
$417
$48
$28
(55)
1,300
(475)
1,042
2,740
(1,836)
(21)
900
(912)
737
115
818
$933
$676
$73
$285
$76
33
(30)
120
(846)
1,190
88
730
$818
$662
$195
$299
95
—
The accompanying notes are an integral part of these financial statements.
CON EDISON ANNUAL REPORT 2020
113
Consolidated Edison Company of New York, Inc.
Consolidated Balance Sheet
(Millions of Dollars)
ASSETS
CURRENT ASSETS
Cash and temporary cash investments
Accounts receivable – customers, less allowance for uncollectible accounts of $138 and $65 in 2020
and 2019, respectively
Other receivables, less allowance for uncollectible accounts of $4 and $3 in 2020 and 2019,
respectively
Taxes receivable
Accrued unbilled revenue
Accounts receivable from affiliated companies
Fuel oil, gas in storage, materials and supplies, at average cost
Prepayments
Regulatory assets
Revenue decoupling mechanism receivable
Other current assets
TOTAL CURRENT ASSETS
INVESTMENTS
UTILITY PLANT AT ORIGINAL COST
Electric
Gas
Steam
General
TOTAL
Less: Accumulated depreciation
Net
Construction work in progress
NET UTILITY PLANT
NON-UTILITY PROPERTY
Non-utility property, less accumulated depreciation of $25 in 2020 and 2019
NET PLANT
OTHER NONCURRENT ASSETS
Regulatory assets
Operating lease right-of-use asset
Other deferred charges and noncurrent assets
TOTAL OTHER NONCURRENT ASSETS
TOTAL ASSETS
The accompanying notes are an integral part of these financial statements.
December 31,
2020
December 31,
2019
$1,067
1,595
134
8
523
134
291
159
244
129
123
4,407
541
31,327
9,921
2,696
3,585
47,529
10,297
37,232
2,320
39,552
2
39,554
5,745
578
142
6,465
$50,967
$933
1,153
120
—
477
73
293
178
113
76
127
3,543
461
29,989
9,229
2,601
3,271
45,090
9,490
35,600
1,812
37,412
2
37,414
4,487
601
51
5,139
$46,557
114
CON EDISON ANNUAL REPORT 2020
Consolidated Edison Company of New York, Inc.
Consolidated Balance Sheet
(Millions of Dollars)
LIABILITIES AND SHAREHOLDER’S EQUITY
CURRENT LIABILITIES
Long-term debt due within one year
Notes payable
Accounts payable
Accounts payable to affiliated companies
Customer deposits
Accrued taxes
Accrued taxes to affiliated companies
Accrued interest
Accrued wages
Fair value of derivative liabilities
Regulatory liabilities
System benefit charge
Operating lease liabilities
Other current liabilities
TOTAL CURRENT LIABILITIES
NONCURRENT LIABILITIES
Provision for injuries and damages
Pensions and retiree benefits
Superfund and other environmental costs
Asset retirement obligations
Fair value of derivative liabilities
Deferred income taxes and unamortized investment tax credits
Operating lease liabilities
Regulatory liabilities
Other deferred credits and noncurrent liabilities
TOTAL NONCURRENT LIABILITIES
LONG-TERM DEBT
COMMITMENTS AND CONTINGENCIES (Note B and Note G)
COMMON SHAREHOLDER’S EQUITY (See Statement of Shareholder’s Equity)
TOTAL LIABILITIES AND SHAREHOLDER’S EQUITY
The accompanying notes are an integral part of these financial statements.
December 31,
2020
December 31,
2019
$640
1,660
1,232
22
296
132
1
126
97
163
11
475
73
319
5,247
172
1,943
780
508
105
6,411
512
4,094
197
$350
1,137
956
13
334
71
—
113
92
81
63
587
54
280
4,131
125
1,241
654
362
65
6,000
551
4,427
240
14,722
16,149
14,849
$50,967
13,665
14,614
14,147
$46,557
CON EDISON ANNUAL REPORT 2020
115
Consolidated Edison Company of New York, Inc.
Consolidated Statement of Shareholder’s Equity
(In Millions)
Common Stock
Shares Amount
Additional
Paid-In
Capital
Retained
Earnings
Repurchased
Con Edison
Stock
Capital
Stock
Expense
Accumulated
Other
Comprehensive
Income/(Loss)
Total
BALANCE AS OF DECEMBER 31, 2017
235
$589
$4,649
$8,231
$(962)
$(62)
$(6) $12,439
Net income
Common stock dividend to parent
Capital contribution by parent
Other comprehensive income
1,196
(846)
120
1,196
(846)
120
1
1
BALANCE AS OF DECEMBER 31, 2018
235
$589
$4,769
$8,581
$(962)
$(62)
$(5) $12,910
Net income
Common stock dividend to parent
Capital contribution by parent
Other comprehensive income
1,250
(912)
900
1,250
(912)
900
(1)
(1)
BALANCE AS OF DECEMBER 31, 2019
235
$589
$5,669
$8,919
$(962)
$(62)
$(6) $14,147
Net income
Common stock dividend to parent
Capital contribution by parent
Other comprehensive income
1,185
(982)
500
1,185
(982)
500
(1)
(1)
BALANCE AS OF DECEMBER 31, 2020
235
$589
$6,169
$9,122
$(962)
$(62)
$(7) $14,849
The accompanying notes are an integral part of these financial statements.
116
CON EDISON ANNUAL REPORT 2020
Consolidated Edison Company of New York, Inc.
Consolidated Statement of Capitalization
(In Millions)
TOTAL SHAREHOLDER’S EQUITY BEFORE ACCUMULATED
OTHER COMPREHENSIVE INCOME (LOSS)
Pension plan liability adjustments, net of taxes
Unrealized gains/(losses) on derivatives qualified as cash flow
hedges, less reclassification adjustment for gains/(losses)
included in net income and reclassification adjustment for
unrealized losses included in regulatory assets, net of taxes
TOTAL ACCUMULATED OTHER COMPREHENSIVE INCOME
(LOSS), NET OF TAXES
TOTAL SHAREHOLDER’S EQUITY (See Statement of
Shareholder’s Equity)
Shares outstanding
December 31,
2020
235
2019
235
At December 31,
2020
2019
$14,856
(5)
$14,153
—
(2)
(7)
(6)
(6)
$14,849
$14,147
The accompanying notes are an integral part of these financial statements.
CON EDISON ANNUAL REPORT 2020
117
Consolidated Edison Company of New York, Inc.
Consolidated Statement of Capitalization
LONG-TERM DEBT (Millions of Dollars)
Maturity
DEBENTURES:
Interest Rate
2020
2021
2024
2026
2027
2028
2028
2030
2033
2033
2034
2035
2035
2036
2036
2036
2037
2038
2039
2040
2042
2043
2044
2045
2046
2047
2048
2049
2050
2054
2056
2057
2058
2059
(a)
4.45
0.65
3.30
2.90
3.125
3.80
4.00
3.35
5.875
5.10
5.70
5.30
5.25
5.85
6.20
5.70
6.30
6.75
5.50
5.70
4.20
3.95
4.45
4.50
3.85
3.875
4.65
4.125
3.95
4.625
4.30
4.00
4.50
3.70
2060
3.00
TOTAL DEBENTURES
TAX-EXEMPT DEBT – Notes issued to New York State Energy
Research and Development Authority for Facilities Revenue Bonds:
2036
(a)
0.11
2039
2039
0.11
0.09
(a)
(a)
TOTAL TAX-EXEMPT DEBT
Unamortized debt expense
Unamortized debt discount
TOTAL
Less: Long-term debt due within one year
TOTAL LONG-TERM DEBT
TOTAL CAPITALIZATION
(a) Rates reset weekly or quarterly; December 31, 2020 rates shown.
Series
2010A
2018C
2014B
2016B
2017B
2018A
2018D
2020A
2003A
2003C
2004B
2005A
2005B
2006A
2006B
2006E
2007A
2008B
2009C
2010B
2012A
2013A
2014A
2015A
2016A
2017A
2018E
2019A
2020B
2014C
2016C
2017C
2018B
2019B
2020C
2010A
2004C
2005A
The accompanying notes are an integral part of these financial statements.
118
CON EDISON ANNUAL REPORT 2020
At December 31,
2020
$—
640
250
250
350
300
500
600
175
200
200
350
125
400
400
250
525
600
600
350
400
700
850
650
550
500
600
700
1,000
750
500
350
700
600
600
2019
$350
640
250
250
350
300
500
—
175
200
200
350
125
400
400
250
525
600
600
350
400
700
850
650
550
500
600
700
—
750
500
350
700
600
—
16,515
14,665
225
99
126
450
(130)
(46)
16,789
640
$16,149
$30,998
225
99
126
450
(115)
(36)
14,964
350
14,614
$28,761
Notes to the Financial Statements
General
These combined notes accompany and form an integral part of the separate consolidated financial statements of
each of the two separate registrants: Consolidated Edison, Inc. and its subsidiaries (Con Edison) and Consolidated
Edison Company of New York, Inc. and its subsidiaries (CECONY). CECONY is a subsidiary of Con Edison and as
such its financial condition and results of operations and cash flows, which are presented separately in the
CECONY consolidated financial statements, are also consolidated, along with those of Orange and Rockland
Utilities, Inc. (O&R), Con Edison Clean Energy Businesses, Inc. (together with its subsidiaries, the Clean Energy
Businesses) and Con Edison Transmission, Inc. (together with its subsidiaries, Con Edison Transmission) in Con
Edison’s consolidated financial statements. The term “Utilities” is used in these notes to refer to CECONY and O&R.
As used in these notes, the term “Companies” refers to Con Edison and CECONY and, except as otherwise noted,
the information in these combined notes relates to each of the Companies. However, CECONY makes no
representation as to information relating to Con Edison or the subsidiaries of Con Edison other than itself.
Con Edison has two regulated utility subsidiaries: CECONY and O&R. CECONY provides electric service and gas
service in New York City and Westchester County. The company also provides steam service in parts of Manhattan.
O&R, along with its regulated utility subsidiary, provides electric service in southeastern New York and northern New
Jersey and gas service in southeastern New York. Con Edison Clean Energy Businesses, Inc., which through its
subsidiaries develops, owns and operates renewable and sustainable energy infrastructure projects and provide
energy-related products and services to wholesale and retail customers. In December 2018, the Clean Energy
Businesses acquired Sempra Solar Holdings, LLC. Con Edison Transmission, Inc. invests in electric transmission
facilities through its subsidiary, Consolidated Edison Transmission, LLC (CET Electric), and holds investments in
gas pipeline and storage facilities through its subsidiary Con Edison Gas Pipeline and Storage, LLC (CET Gas).
See Note V.
CON EDISON ANNUAL REPORT 2020
119
Note A – Summary of Significant Accounting Policies and Other Matters
Principles of Consolidation
The Companies’ consolidated financial statements include the accounts of their respective majority-owned
subsidiaries, and variable interest entities (see Note R), as required. All intercompany balances and intercompany
transactions have been eliminated.
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.
The accounting rules for regulated operations specify the economic effects that result from the causal relationship of
costs and revenues in the rate-regulated environment and how these effects are to be accounted for by a regulated
enterprise. Revenues intended to cover some costs may be recorded either before or after the costs are incurred. If
regulation provides assurance that incurred costs will be recovered in the future, these costs would be recorded as
deferred charges or “regulatory assets” under the accounting rules for regulated operations. If revenues are
recorded for costs that are expected to be incurred in the future, these revenues would be recorded as deferred
credits or “regulatory liabilities” under the accounting rules for regulated operations.
The Utilities’ principal regulatory assets and liabilities are detailed in Note B. In general, the Utilities are receiving or
being credited with a return on their regulatory assets for which a cash outflow has been made, and are paying or
being charged with a return on their regulatory liabilities for which a cash inflow has been received. The Utilities’
regulatory assets and liabilities at December 31, 2020 are recoverable from customers, or to be applied for
customer benefit, in accordance with rate provisions that have been approved by state regulators.
Other significant accounting policies of the Companies are referenced below in this Note A and in the notes that
follow.
Financial Instruments – Credit Losses
Adoption of New Standard
In January 2020, the Companies adopted Accounting Standards Update (ASU) 2016-13, “Financial Instruments-
Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments.” The amendments replace the
incurred loss impairment methodology which involved delayed recognition of credit losses. The amendments
introduce an expected credit loss impairment model which requires immediate recognition of anticipated losses over
the instrument’s life. A broader range of reasonable and supportable information must be considered in developing
the credit loss estimates. The Companies' financial instruments subject to the amendments are included in the lines
“Accounts receivable – customers” and “Other receivables.” Substantially all of these in-scope financial instruments
are expected to be collected within one year of billing.
The Companies adopted the amendments using the modified retrospective method for all financial instruments
measured at amortized costs. Results for reporting periods beginning after January 1, 2020 are presented under
Accounting Standards Codification (ASC) 326 while prior period amounts continue to be reported in accordance
with previously applicable GAAP. No prior period adjustment or charge to retained earnings for cumulative impact
was required as a result of the Companies’ adoption of the amendments.
Allowance for Uncollectible Accounts
The Utilities’ “Account receivable – customers” balance consists of utility bills due (bills are generally due the month
following billing) from customers who have energy delivered, generated, or services provided by the Utilities. The
balance also reflects the Utilities’ purchase of receivables from energy service companies to support the retail
choice programs.
“Other receivables” balance generally reflects costs billed by the Utilities for goods and services provided to external
parties, such as accommodation work for private parties and certain governmental entities, real estate rental and
pole attachments. The Clean Energy Businesses’ other receivables balance includes bills related to the sale of
energy from renewable electric production projects.
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CON EDISON ANNUAL REPORT 2020
The Clean Energy Businesses’ customer accounts receivable balance generally reflects the management of energy
supply assets, energy-efficiency services to government and commercial customers, and the engineering,
procurement, and construction services of renewable energy projects. The Clean Energy Businesses calculate an
allowance for uncollectible accounts related to their energy services customers based on an aging and customer-
specific analysis. The amount of such reserves was not material at December 31, 2020.
The Companies develop expected loss estimates using past events data and consider current conditions and future
reasonable and supportable forecasts. Changes to the Utilities’ reserve balances 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.
During the year of 2020, the potential economic impact of the COVID-19 pandemic was also considered in forward-
looking projections related to write-off and recovery rates and resulted in increases to the allowance for uncollectible
accounts. The increases to the allowance for customer uncollectible accounts for Con Edison and CECONY were
$78 million and $73 million, respectively, for the year ended December 31, 2020.
Customer accounts receivable and the associated allowance for uncollectible accounts are included in the line
“Accounts receivable – customers” on the Companies’ consolidated balance sheets. Other receivables and the
associated allowance for uncollectible accounts are included in “Other receivables” on the consolidated balance
sheets.
The table below presents a rollforward by major portfolio segment type for the year ended December 31, 2020:
(Millions of Dollars)
Allowance for credit losses
Beginning Balance at January 1, 2020
Recoveries
Write-offs
Reserve adjustments
Ending Balance December 31, 2020
For the Year Ended December 31, 2020
Con Edison
CECONY
Accounts
receivable -
customers
Other
receivables
Accounts
receivable -
customers
Other
receivables
$70
8
(54)
124
$148
$4
—
(2)
5
$7
$65
6
(50)
117
$138
$3
—
(1)
2
$4
Revenues
CECONY’s electric and gas rate plans and O&R’s New York electric and gas rate plans each contain a revenue
decoupling mechanism, that covers all residential and most commercial customers, under which the company’s
actual energy delivery revenues are compared with the authorized delivery revenues and the difference accrued,
with interest, for refund to, or recovery from, customers, as applicable. See “Rate Plans” in Note B.
The NYSPSC requires utilities to record gross receipts tax revenues and expenses on a gross income statement
presentation basis (i.e., included in both revenue and expense). The recovery of these taxes is generally provided
for in the revenue requirement within each of the respective NYSPSC-approved rate plans. Total excise taxes
(inclusive of gross receipts taxes) recorded in operating revenues were as follows:
CON EDISON ANNUAL REPORT 2020
121
(Millions of Dollars)
Con Edison
CECONY
For the Years Ended December 31,
2020
$335
323
2019
$323
312
2018
$330
318
For information about the Companies' revenue recognition policies, see Note M.
Plant and Depreciation
Utility Plant
Utility plant is stated at original cost. The cost of repairs and maintenance is charged to expense and the cost of
betterments is capitalized. The capitalized cost of additions to utility plant includes indirect costs such as
engineering, supervision, payroll taxes, pensions, other benefits and an allowance for funds used during
construction (AFUDC). The original cost of property is charged to expense over the estimated useful lives of the
assets. Upon retirement, the original cost of property is charged to accumulated depreciation. See Note S.
Rates used for AFUDC include the cost of borrowed funds and a reasonable rate of return on the Utilities’ own funds
when so used, determined in accordance with regulations of the FERC or the state public utility regulatory authority
having jurisdiction. The rate is compounded semiannually, and the amounts applicable to borrowed funds are
treated as a reduction of interest charges, while the amounts applicable to the Utilities’ own funds are credited to
other income (deductions). The AFUDC rates for CECONY were 5.2 percent, 5.1 percent and 5.4 percent for 2020,
2019 and 2018, respectively. The AFUDC rates for O&R were 5.3 percent, 5.3 percent and 2.2 percent for 2020,
2019 and 2018, respectively.
The Utilities generally compute annual charges for depreciation using the straight-line method for financial
statement purposes, with rates based on average service lives and net salvage factors. The average depreciation
rates for CECONY were 3.5 percent for 2020 and 3.2 percent for 2019 and 2018. The average depreciation rates for
O&R were 3.2 percent for 2020, 3.0 percent for 2019 and 2.9 percent for 2018.
The estimated lives for utility plant for CECONY range from 5 to 85 years for electric, 5 to 90 years for gas, 5 to 80
years for steam and 5 to 55 years for general plant. For O&R, the estimated lives for utility plant range from 5 to 75
years for electric and gas and 5 to 50 years for general plant.
At December 31, 2020 and 2019, the capitalized cost of the Companies’ utility plant, net of accumulated
depreciation, was as follows:
(Millions of Dollars)
Electric
Generation
Transmission
Distribution
General
Gas (a)
Steam
General
Held for future use
Construction work in progress
Net Utility Plant
(a) Primarily distribution.
Con Edison
CECONY
2020
2019
2020
2019
$572
3,786
21,481
52
9,206
1,854
2,507
92
2,474
$591
3,634
20,676
43
8,617
1,813
2,365
75
1,937
$572
3,496
20,366
52
8,522
1,854
2,286
84
2,320
$591
3,380
19,602
43
7,961
1,813
2,143
67
1,812
$42,024
$39,751
$39,552
$37,412
General utility plant of Con Edison and CECONY included $86 million and $81 million, respectively, at
December 31, 2020, and $93 million and $88 million, respectively, at December 31, 2019, related to a May 2018
acquisition of software licenses. The estimated aggregate annual amortization expense for Con Edison and
CECONY is $7 million. The accumulated amortization for Con Edison and CECONY was $17 million at
December 31, 2020 and $10 million at December 31, 2019.
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CON EDISON ANNUAL REPORT 2020
Under the Utilities’ rate plans, the aggregate annual depreciation allowance for the period ended December 31,
2020 was $1,694 million, including $1,604 million under CECONY’s electric, gas and steam rate plans that have
been approved by the NYSPSC.
Non–Utility Plant
Non-utility plant is stated at original cost. For Con Edison, non-utility plant consists primarily of the Clean Energy
Businesses’ renewable electric production projects. Property, plant and equipment are stated at cost, less
accumulated depreciation and include capitalized interest during construction. Depreciation is computed under the
straight-line method over the useful lives of the assets. Solar power generating assets and wind power generating
assets have useful lives of 35 years and 30, respectively. For the Utilities, non-utility plant consists of land and
conduit for telecommunication use. Depreciation on these assets is computed using the straight-line method for
financial statement purposes over their estimated useful lives, which is 10 years.
Other Deferred Charges and Noncurrent Assets and Prepayments
Other deferred charges and noncurrent assets and prepayments of Con Edison, net of accumulated depreciation,
included $54 million ($51 million for CECONY) and $12 million ($11 million for CECONY), respectively at December
31, 2020, related to implementation costs incurred in cloud computing arrangements. The amounts recorded in
2019 were not material. Depreciation on these assets is computed using the straight-line method for financial
statement purposes over their estimated useful lives. Depreciation expense related to these assets incurred during
the year ended December 31, 2020 for Con Edison and CECONY was $7 million and $6 million, respectively.
Accumulated depreciation related to these assets for Con Edison and CECONY was $10 million and $8 million,
respectively at December 31, 2020 and was not material at December 31, 2019.
Long–Lived and Intangible Assets
The Companies test long-lived and intangible assets for recoverability when events or changes in circumstances
indicate that the carrying value of long-lived or intangible assets may not be recoverable. The carrying amount of a
long-lived asset or intangible asset with a definite life is deemed not recoverable if it exceeds the sum of the
undiscounted cash flows expected to result from the use and eventual disposition of the assets. In the event a test
indicates that such cash flows cannot be expected to be sufficient to fully recover the assets, the assets are
considered impaired and written down to their estimated fair value.
Con Edison's intangible assets with definite lives consist primarily of power purchase agreements, which were
identified as part of purchase price allocations associated with acquisitions made by the Clean Energy Businesses
in 2016 and 2018. At December 31, 2020 and 2019, intangible assets arising from power purchase agreements,
including the PG&E PPAs (discussed below), were $1,457 million and $1,554 million, net of accumulated
amortization of $220 million and $119 million, respectively, and are being amortized over the life of each agreement.
Excluding power purchase agreements, Con Edison’s other intangible assets were $3 million, net of accumulated
amortization of $8 million and $7 million, at December 31, 2020 and 2019, respectively. CECONY’s other intangible
assets were immaterial at December 31, 2020 and 2019. Con Edison recorded amortization expense related to its
intangible assets of $102 million in 2020, $99 million in 2019, and $14 million in 2018. Con Edison expects
amortization expense to be $102 million per year over the next five years. Con Edison recorded $2 million of
impairment charges in 2018. No impairment charges were recorded on Con Edison's long-lived assets or intangible
assets with definite lives in 2020 or 2019.
In January 2019, Pacific Gas and Electric Company (PG&E) filed for reorganization under Chapter 11 of the U.S.
Bankruptcy Code. The output of certain of the Clean Energy Businesses' renewable electric production projects is
sold to PG&E under long-term power purchase agreements. As a result of the PG&E bankruptcy, distributions from
the related projects to the Clean Energy Businesses were restricted and PG&E-related project debt was reclassified
on Con Edison’s consolidated balance sheet from long-term debt to long-term debt due within one year. In July
2020, PG&E’s plan of reorganization became effective and the Clean Energy Businesses began receiving
previously restricted distributions and all related project debt with a maturity longer than one year was reclassified to
long-term debt.
Recoverable Energy Costs
The Utilities generally recover all of their prudently incurred fuel, purchased power and gas costs, including hedging
gains and losses, in accordance with rate provisions approved by the applicable state public utility regulators. If the
actual energy supply costs for a given month are more or less than the amounts billed to customers for that month,
CON EDISON ANNUAL REPORT 2020
123
the difference in most cases is recoverable from or refundable to customers. Differences between actual and billed
electric and steam supply costs and costs of its electric demand management programs are generally deferred for
charge or refund to customers during the next billing cycle (normally within one or two months). For the Utilities’ gas
costs, differences between actual and billed gas costs during the 12-month period ending each August are charged
or refunded to customers during a subsequent 12-month period.
New York Independent System Operator (NYISO)
The Utilities purchase electricity through the wholesale electricity market administered by the NYISO. The difference
between purchased power and related costs initially billed to the Utilities by the NYISO and the actual cost of power
subsequently calculated by the NYISO is refunded by the NYISO to the Utilities, or paid to the NYISO by the
Utilities. The reconciliation payments or receipts are recoverable from or refundable to the Utilities’ customers.
Certain other payments to or receipts from the NYISO are also subject to reconciliation, with shortfalls or amounts in
excess of specified rate allowances recoverable from or refundable to customers. These include proceeds from the
sale through the NYISO of transmission rights on CECONY’s transmission system (transmission congestion
contracts or TCCs).
Temporary Cash Investments
Temporary cash investments are short-term, highly-liquid investments that generally have maturities of three months
or less at the date of purchase. They are stated at cost, which approximates market. The Companies consider
temporary cash investments to be cash equivalents.
Investments
Accounting for 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.
The accounting rules require Con Edison to periodically evaluate its investments to determine whether they are
impaired. The standard for determining whether an impairment exists and must be recorded is whether an other-
than-temporary decline in carrying value has occurred. Changes in economic conditions, forecasted cash flows and
the regulatory environment, among other factors, could require equity method investments to recognize a decrease
in carrying value for an other-than-temporary decline. When management believes such a decline may have
occurred, the fair value of the investment is estimated using a market valuation model such as a discounted cash
flow analysis. The fair value is compared to the carrying value of the investment in order to determine the amount of
impairment to record, if any.
The evaluation and measurement of impairments involves uncertainties. The judgments that Con Edison makes to
estimate the fair value of its equity method investments are based on assumptions that management believes are
reasonable, and variations in these estimates or the underlying assumptions could have a material impact on
whether a triggering event is determined to exist or the amount of any such impairment. Additionally, if the projects
in which Con Edison holds these investments recognize an impairment, Con Edison may record a share of that
impairment loss and would evaluate its investment for an other-than-temporary decline in carrying value.
Con Edison evaluated its equity method investments and determined that there was an other-than-temporary
decline in the value of its investment in Mountain Valley Pipeline LLC (MVP) and therefore recorded a partial
impairment at December 31, 2020, as described below. Also, Con Edison is considering strategic alternatives with
respect to its 50 percent interest in Stagecoach Gas Services, LLC (Stagecoach), a joint venture that owns and
operates an existing gas pipeline and storage business located in northeastern Pennsylvania and the southern tier
of New York. As such strategic alternatives are evaluated, Con Edison may be required to determine whether an
other-than-temporary decline in value has occurred for its Stagecoach investment.
Partial Impairment of Investment in Mountain Valley Pipeline LLC (MVP)
In January 2016, Con Edison Gas Pipeline and Storage, LLC (CET Gas), an indirect subsidiary of Con Edison,
acquired a 12.5 percent equity interest in MVP, a company developing a proposed gas transmission project (the
Project) in West Virginia and Virginia. At December 31, 2020 and 2019, CET Gas' cash contributions to MVP were
approximately $530 million, and the carrying value at December 31, 2020 prior to recording an impairment loss was
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CON EDISON ANNUAL REPORT 2020
$662 million, reflecting CET Gas' proportionate share of allowance for funds used during construction (AFUDC)
income from the Project. During 2019, Con Edison determined that, as it was permitted to do under the MVP joint
venture agreement, it would limit its cash contributions to the joint venture to approximately $530 million, which limit
was reached in 2019, and that is expected to result in the further reduction of Con Edison’s ownership share in the
joint venture. At December 31, 2020, CET Gas owned an 11.3 percent interest in MVP that is expected to be
reduced to 8.8 percent based on the current project cost estimate and CET Gas’ previous capping of its cash
contributions to the joint venture.
During 2020, progress was made on the construction of the Project, and the U.S. Supreme Court issued favorable
decisions in cases unrelated to MVP, regarding the permitting process for pipeline construction and water crossings.
In November 2020, the U.S. Court of Appeals for the Fourth Circuit issued a stay on the Nationwide Permit 12,
effectively blocking the Project’s ability to pursue water crossings under that permit. As a result, in November 2020
the Project applied to the FERC for a certificate amendment to bore under water bodies in the first 77 miles of the
Project in West Virginia, allowing this portion of the pipe to be completed and placed in-service while a plan for the
remaining water crossings was pursued. If approved, this amendment would lead to additional Project costs and
would extend the anticipated in-service date of the Project to late 2021. The uncertainty related to obtaining the
necessary permits in lieu of the Nationwide Permit 12, the resulting Project costs and the likelihood of the Project
not reaching eventual completion have increased, constituting a triggering event which required Con Edison to test
its investment in MVP for an other-than-temporary impairment as of December 31, 2020. Further, in January 2021,
the FERC did not approve the requested amendment. In its discussion, a FERC commissioner indicated that the
commission should have the plan for the entire Project’s water crossings rather than the first 77 miles and that all of
the Federal permits be restored before allowing additional construction to resume. Later in January 2021, the
Project indicated its plans to apply for U.S. Army Corps of Engineers individual permits for certain water crossings
and a certificate amendment for other water crossings that, in total, would cover the entire Project length. In
addition, the second largest partner in the Project announced it had recorded a significant impairment of their
investment in the Project at year-end 2020.
In response to the triggering event, Con Edison assessed the value of its equity investment in the Project to
determine whether the fair value of its investment in MVP had declined below its carrying value on an other-than-
temporary basis. The estimated fair value of the investment was determined using a discounted cash flow analysis,
which is a level 3 fair value measurement. The analysis discounted probability-weighted future cash flows, including
revenues based on long-term firm transportation contracts, that are secured for the first 20 years following
completion of the Project. See Note T. Con Edison has also assumed cash flows extending beyond this period. All
cash flows were discounted at a pre-tax discount rate of 8.3 percent and then weighted based on Con Edison’s
estimate of the likelihood that the Project will be completed. Con Edison believes that the likelihood of Project
completion is in the upper end of a reasonably possible range. The likelihood that the Project is completed and the
discount rate are the most significant and sensitive assumptions; changes in these assumptions may materially
change the results of the impairment calculation.
Based on the discounted cash flow analysis, Con Edison concluded that the fair value of its investment in MVP
declined below its carrying value and the decline is other-than-temporary. Accordingly, Con Edison recorded a pre-
tax impairment loss of $320 million ($223 million, after tax), for the year ended December 31, 2020 to reduce the
carrying value of its investment in MVP from $662 million to $342 million. The impairment was recorded within
“Investment income (loss)” on Con Edison’s Consolidated Income Statement. In addition, Con Edison will not record
non-cash equity in earnings from allowance for funds used during construction, if any, from MVP beginning in 2021
and until such time as substantial construction activities are resumed, which would be indicative of probable Project
completion.
There is risk that the fair value of Con Edison’s investment in MVP may be further or fully impaired in the future.
There are ongoing legal and regulatory matters that must be resolved favorably before the Project can be
completed. Assumptions and estimates used to test Con Edison’s investment in MVP for impairment may change if
adverse or delayed resolutions to the Project’s pending legal and regulatory challenges were to occur, which could
have a material adverse effect on the fair value of Con Edison’s investment in MVP.
Summary of Investment Balances
The following investment assets are included in the Companies' consolidated balance sheets at December 31, 2020
and 2019:
CON EDISON ANNUAL REPORT 2020
125
(Millions of Dollars)
CET Gas investment in Stagecoach Gas Services, LLC
CET Gas investment in Mountain Valley Pipeline, LLC (a)
Supplemental retirement income plan assets (b)
Deferred income plan assets
CET Electric investment in New York Transco, LLC
Other
Total investments
Con Edison
CECONY
2020
$845
342
465
92
69
3
2019
$924
602
397
81
59
2
2020
2019
$—
—
439
92
—
10
$—
—
371
81
—
9
$1,816
$2,065
$541
$461
(a) At December 31, 2020 and 2019, CET Gas' cash investment in MVP was $530 million. In January 2021, the operator of the Mountain Valley
Pipeline indicated that, subject to receipt of certain authorizations and resolution of certain challenges, it is continuing to target an in-service
date for the Project of late 2021 at an overall Project cost of $5,800 million to $6,000 million, excluding allowance for funds used during
construction. For the year ended December 31, 2020, CET Gas owned an 11.3 percent interest in MVP and reduced the carrying value of its
investment in MVP from $662 million to $342 million by recognizing a noncash impairment loss of $320 million, pre-tax ($223 million, after
tax), and based on total estimated Project costs and CET Gas’ previous capping of its cash contributions to the joint venture, its ownership
interest in the joint venture is expected to be reduced to 8.8%.
(b) See Note E.
Pension and Other Postretirement Benefits
The accounting rules for retirement benefits require an employer to recognize an asset or liability for the overfunded
or underfunded status of its pension and other postretirement benefit plans. For a pension plan, the asset or liability
is the difference between the fair value of the plan’s assets and the projected benefit obligation. For any other
postretirement benefit plan, the asset or liability is the difference between the fair value of the plan’s assets and the
accumulated postretirement benefit obligation. The accounting rules generally require employers to recognize all
unrecognized prior service costs and credits and unrecognized actuarial gains and losses in accumulated other
comprehensive income/(loss) (OCI), net of tax. Such amounts will be adjusted as they are subsequently recognized
as components of total periodic benefit cost or income pursuant to the current recognition and amortization
provisions.
For the Utilities’ pension and other postretirement benefit plans, regulatory accounting treatment is generally applied
in accordance with the accounting rules for regulated operations. Unrecognized prior service costs or credits and
unrecognized actuarial gains and losses are recorded to regulatory assets or liabilities, rather than OCI. See Notes
E and F.
The total periodic benefit costs are recognized in accordance with the accounting rules for retirement benefits.
Investment gains and losses are recognized in expense over a 15-year period and other actuarial gains and losses
are recognized in expense over a 10-year period, subject to the deferral provisions in the rate plans.
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 such expenses and the
amounts for such expenses reflected in rates. O&R also defers such difference pursuant to its New York rate plans.
See Note B.
The Companies calculate the expected return on pension and other postretirement benefit plan assets by
multiplying the expected rate of return on plan assets by the market-related value (MRV) of plan assets at the
beginning of the year, taking into consideration anticipated contributions and benefit payments that are to be made
during the year. The accounting rules allow the MRV of plan assets to be either fair value or a calculated value that
recognizes changes in fair value in a systematic and rational manner over not more than five years. The Companies
use a calculated value when determining the MRV of the plan assets that adjusts for 20 percent of the difference
between fair value and expected MRV of plan assets. This calculated value has the effect of stabilizing variability in
assets to which the Companies apply the expected return.
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CON EDISON ANNUAL REPORT 2020
Federal Income Tax
In accordance with accounting rules for income taxes, the Companies have recorded an accumulated deferred
federal income tax liability at current tax rates for temporary differences between the book and tax basis of assets
and liabilities. In accordance with rate plans, the Utilities have recovered amounts from customers for a portion of
the tax liability they will pay in the future as a result of the reversal or “turn-around” of these temporary differences.
As to the remaining deferred tax liability, the Utilities had established regulatory assets for the net revenue
requirements to be recovered from customers for the related future tax expense pursuant to the NYSPSC's 1993
Policy Statement approving accounting procedures consistent with accounting rules for income taxes and providing
assurances that these future increases in taxes will be recoverable in rates.
Upon enactment of the Tax Cuts and Jobs Act of 2017 on December 22, 2017 (the TCJA), the Companies re-
measured their deferred tax assets and liabilities based upon the 21 percent corporate income tax rate under the
TCJA. The tax effects of changes in tax laws are to be recognized in the period in which the law is enacted and
deferred tax assets and liabilities are to be re-measured at the enacted tax rate expected to apply when temporary
differences are to be realized or settled. For the Utilities, in accordance with their New York rate plans and the
accounting rules for regulated operations, the change in deferred taxes was recorded as either an offset to a
regulatory asset or a regulatory liability. For Con Edison’s other businesses, the change in deferred taxes was
reflected as a decrease in income tax expense, which increased Con Edison's net income. See “Other Regulatory
Matters” and “Regulatory Assets and Liabilities” in Note B and Note L.
Accumulated deferred investment tax credits are amortized ratably over the lives of the related properties and
applied as a reduction to future federal income tax expense.
Con Edison and its subsidiaries file a consolidated federal income tax return. The consolidated income tax liability is
allocated to each member of the consolidated group using the separate return method. Each member pays or
receives an amount based on its own taxable income or loss in accordance with a consolidated tax allocation
agreement. Tax loss and tax credit carryforwards are allocated among members in accordance with consolidated
tax return regulations.
State Income Tax
Con Edison and its subsidiaries file a combined New York State Corporation Business Franchise Tax Return. Similar
to a federal consolidated income tax return, the income of all entities in the combined group is subject to New York
State taxation, after adjustments for differences between federal and New York law and apportionment of income
among the states in which the company does business. Each member’s share of the New York State tax is based
on its own New York State taxable income or loss.
Research and Development Costs
Research and development costs are charged to operating expenses as incurred. Research and development costs
were as follows:
(Millions of Dollars)
Con Edison
CECONY
For the Years Ended December 31,
2020
$24
23
2019
$24
23
2018
$24
23
Reclassification
Certain prior year amounts have been reclassified within Note L to conform with current year 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 for common stock” on
Con Edison’s consolidated income statement) by the weighted average number of Con Edison common shares
outstanding during the period. In the calculation of diluted EPS, weighted average shares outstanding are increased
for additional shares that would be outstanding if potentially dilutive securities were converted to common stock.
CON EDISON ANNUAL REPORT 2020
127
Potentially dilutive securities for Con Edison consist of restricted stock units and deferred stock units for which the
average market price of the common shares for the period was greater than the exercise price (see Note N) and its
common shares that are subject to forward sale agreements (see Note C). Before the issuance of common shares
upon settlement of the forward sale agreements, the shares will be reflected in the company’s diluted earnings per
share calculations using the treasury stock method. Under this method, the number of common shares used in
calculating diluted earnings per share is deemed to be increased by the excess, if any, of the number of shares that
would be issued upon physical settlement of the forward sale agreements over the number of shares that could be
purchased by the company in the market (based on the average market price during the period) using the proceeds
due upon physical settlement (based on the adjusted forward sale price at the end of the reporting period).
Basic and diluted EPS for Con Edison are calculated as follows:
(Millions of Dollars, except per share amounts/Shares in Millions)
Net income for common stock
Weighted average common shares outstanding – basic
Add: Incremental shares attributable to effect of potentially dilutive securities
Adjusted weighted average common shares outstanding – diluted
Net Income per common share – basic
Net Income per common share – diluted
For the Years Ended December 31,
2020
$1,101
334.8
0.9
335.7
$3.29
$3.28
2019
$1,343
328.5
1.0
329.5
$4.09
$4.08
2018
$1,382
311.7
1.2
312.9
$4.43
$4.42
The computation of diluted EPS for the years ended December 31, 2020, 2019 and 2018 excludes immaterial
amounts of performance share awards that were not included because of their anti-dilutive effect.
Estimates
The preparation of financial statements in conformity with GAAP requires management to make estimates and
assumptions that affect the reported amounts of assets and liabilities and contingent assets and liabilities at the
date of the financial statements and the reported amounts of revenues and expenses during the reporting period.
Actual results could differ from those estimates.
Changes in Accumulated Other Comprehensive Income/(Loss) by Component
Changes to accumulated other comprehensive income/(loss) (OCI) for Con Edison and CECONY are as follows:
(Millions of Dollars)
Accumulated OCI, net of taxes, at December 31, 2017 (a)
OCI before reclassifications, net of tax of $3 for Con Edison
Amounts reclassified from accumulated OCI related to pension plan liabilities, net of tax of $(2) for
Con Edison (a)(b)
Total OCI, net of taxes, at December 31, 2018
Accumulated OCI, net of taxes, at December 31, 2018 (a)
OCI before reclassifications, net of tax of $(6) and $(1) for Con Edison and CECONY, respectively
Amounts reclassified from accumulated OCI related to pension plan liabilities, net of tax of $(2) for
Con Edison (a)(b)
Total OCI, net of taxes, at December 31, 2019
Accumulated OCI, net of taxes, at December 31, 2019 (a)
OCI before reclassifications, net of tax of $4 and $1 for Con Edison and CECONY, respectively
Amounts reclassified from accumulated OCI related to pension plan liabilities, net of tax of $(2) for
Con Edison (a)(b)
Total OCI, net of taxes, at December 31, 2020
Accumulated OCI, net of taxes, at December 31, 2020 (a)
Con Edison
CECONY
$(26)
4
6
10
$(16)
(10)
7
(3)
$(19)
(11)
5
(6)
$(25)
$(6)
—
1
1
$(5)
(3)
2
(1)
$(6)
(3)
2
(1)
$(7)
(a) Tax reclassified from accumulated OCI is reported in the income tax expense line item of the consolidated income statement.
(b) For the portion of unrecognized pension and other postretirement benefit costs relating to the Utilities, costs are recorded into, and
amortized out of, regulatory assets and liabilities instead of OCI. The net actuarial losses and prior service costs recognized during the
period are included in the computation of total periodic pension and other postretirement benefit cost. See Notes E and F.
128
CON EDISON ANNUAL REPORT 2020
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 December 31, 2020 and 2019, cash, temporary cash investments and
restricted cash for Con Edison and CECONY were as follows:
(Millions of Dollars)
Cash and temporary cash investments
Restricted cash (a)
Total cash, temporary cash investments and restricted cash
At December 31,
Con Edison
CECONY
2020
$1,272
164
$1,436
2019
$981
236
$1,217
2020
$1,067
—
$1,067
2019
$933
—
$933
(a) Restricted cash included cash of the Clean Energy Businesses' renewable electric production project subsidiaries ($164 million and
$236 million at December 31, 2020 and 2019, respectively) that, under the related project debt agreements, is either restricted until the
various maturity dates of the project debt to being used for normal operating expenses and capital expenditures, debt service, and required
reserves or, for the December 31, 2019 amount, was restricted as a result of the PG&E bankruptcy. During the pendency of the PG&E
bankruptcy, cash was not distributed from the related projects to the Clean Energy Businesses. In July 2020, PG&E's plan of reorganization
became effective and the Clean Energy Businesses received previously restricted distributions and have resumed receiving distributions for
all projects. See "Long-Lived and Intangible Assets,” above.
CON EDISON ANNUAL REPORT 2020
129
Note B – Regulatory Matters
Rate Plans
The Utilities provide service to New York customers according to the terms of tariffs approved by the NYSPSC.
Tariffs for service to customers of Rockland Electric Company (RECO), O&R’s New Jersey regulated utility
subsidiary, are approved by the NJBPU. The tariffs include schedules of rates for service that limit the rates charged
by the Utilities to amounts that recover from their customers costs approved by the regulator, including capital costs,
of providing service to customers as defined by the tariff. The tariffs implement rate plans adopted by state utility
regulators in rate orders issued at the conclusion of rate proceedings. Pursuant to the Utilities’ rate plans, there
generally can be no change to the charges to customers during the respective terms of the rate plans other than
specified adjustments provided for in the rate plans. The Utilities’ rate plans each cover specified periods, but rates
determined pursuant to a plan generally continue in effect until a new rate plan is approved by the state utility
regulator.
Common provisions of the Utilities’ New York rate plans include:
Recoverable energy costs that allow the Utilities to recover on a current basis the costs for the energy they supply
with no mark-up to their full-service customers.
Cost reconciliations that reconcile pension and other postretirement benefit costs, environmental remediation costs,
property taxes, variable-rate tax-exempt debt and certain other costs to amounts reflected in delivery rates for such
costs. In addition, changes in the Utilities' costs not reflected in rates, in excess of certain amounts, resulting from
changes in tax or changes in legislation, regulation or related actions, are deferred as a regulatory asset or
regulatory liability to be reflected in the Utilities' next rate plan or in a manner to be determined by the NYSPSC.
Also, the Utilities generally retain the right to petition for recovery or accounting deferral of extraordinary and
material cost increases and provision is sometimes made for the utility to retain a share of cost reductions, for
example, property tax refunds.
Revenue decoupling mechanisms that reconcile actual energy delivery revenues to the authorized delivery
revenues approved by the NYSPSC. The difference is accrued with interest for refund to, or recovery from
customers, as applicable.
Earnings sharing that require the Utilities to defer for customer benefit a portion of earnings over specified rates of
return on common equity. There is no symmetric mechanism for earnings below specified rates of return on
common equity.
Negative revenue adjustments for failure to meet certain performance standards relating to service, reliability, safety
and other matters.
Positive revenue adjustments for achievement of performance standards related to achievement of clean energy
goals, safety and other matters.
Net utility plant reconciliations that require deferral as a regulatory liability of the revenue requirement impact of the
amount, if any, by which actual average net utility plant balances are less than amounts reflected in rates. There is
generally no symmetric mechanism if actual average net utility plant balances are more than amounts reflected in
rates.
Rate base, as reflected in the rate plans, is, in general, the sum of the Utilities’ net plant, working capital and certain
regulatory assets less deferred taxes and certain regulatory liabilities. For each rate plan, the NYSPSC uses a
forecast of the average rate base for each year that new rates would be in effect (“rate year”).
Weighted average cost of capital is determined based on the authorized common equity ratio, return on common
equity, cost of long-term debt and cost of customer deposits reflected in each rate plan. For each rate plan, the
revenues designed to provide the utility a return on invested capital for each rate year are determined by multiplying
each utility rate base by its pre–tax weighted average cost of capital. The Utilities’ actual return on common equity
will reflect their actual operations for each rate year, and may be more or less than the authorized return on equity
reflected in their rate plans (and if more, may be subject to earnings sharing).
130
CON EDISON ANNUAL REPORT 2020
The following tables contain a summary of the Utilities’ rate plans:
CECONY – Electric
Effective period
Base rate changes
Amortizations to income of net
regulatory (assets) and liabilities
January 2017 – December 2019
January 2020 – December 2022 (a)
Yr. 1 – $195 million (b)
Yr. 2 – $155 million (b)
Yr. 3 – $155 million (b)
Yr. 1 – $84 million
Yr. 2 – $83 million
Yr. 3 – $69 million
Yr. 1 – $113 million (c)
Yr. 2 – $370 million (c)
Yr. 3 – $326 million (c)
Yr. 1 – $267 million (d)
Yr. 2 – $269 million (d)
Yr. 3 – $272 million (d)
Other revenue sources
Retention of $75 million of annual transmission
congestion revenues.
Retention of $75 million of annual transmission
congestion revenues.
Revenue decoupling mechanisms
Recoverable energy costs
Negative revenue adjustments
Cost reconciliations
Net utility plant reconciliations
Potential earnings adjustment mechanism
incentives for energy efficiency and other
potential incentives of up to:
Yr. 1 – $28 million
Yr. 2 – $47 million
Yr. 3 – $64 million
In 2017, 2018 and 2019, the company recorded
$13 million, $25 million and $43 million of
earnings adjustment mechanism incentives for
energy efficiency, respectively. The company
also achieved $5 million of incentives for service
terminations in 2017, 2018 and 2019 that,
pursuant to the rate plan, is being recorded
ratably in earnings from 2018 to 2020. In 2018
and 2019, the company recorded $3 million and
$7 million of incentives for service terminations,
respectively.
Continuation of reconciliation of actual to
authorized electric delivery revenues.
In 2017, 2018 and 2019, the company deferred
for customer benefit $45 million, $(6) million and
$169 million of revenues, respectively.
Potential earnings adjustment mechanism
incentives for energy efficiency and other
potential incentives of up to:
Yr. 1 - $69 million
Yr. 2 - $74 million
Yr. 3 - $79 million
In 2020, the company recorded $34 million
primarily related to earnings adjustment
mechanism incentives for energy efficiency.
Continuation of reconciliation of actual to
authorized electric delivery revenues.
In 2020, the company deferred for recovery from
customers $242 million of revenues.
Continuation of current rate recovery of
purchased power and fuel costs.
Continuation of current rate recovery of
purchased power and fuel costs.
Potential charges if certain performance targets
relating to service, reliability, safety and other
matters are not met:
Yr. 1 – $376 million
Yr. 2 – $341 million
Yr. 3 – $352 million
In 2017 and 2018, the company did not record
any negative revenue adjustments. In 2019, the
company recorded negative revenue
adjustments of $15 million.
Continuation of reconciliation of expenses for
pension and other postretirement benefits,
variable-rate tax-exempt debt, major storms,
property taxes (e), municipal infrastructure
support costs (f), the impact of new laws and
environmental site investigation and remediation
to amounts reflected in rates (g).
In 2017, 2018 and 2019, the company deferred
$35 million, $189 million and $10 million of net
regulatory assets, respectively.
Target levels reflected in rates:
Electric average net plant target excluding
advanced metering infrastructure (AMI):
Yr. 1 – $21,689 million
Yr. 2 – $22,338 million
Yr. 3 – $23,002 million
AMI:
Yr. 1 – $126 million
Yr. 2 – $257 million
Yr. 3 – $415 million
The company deferred $0.4 million as a
regulatory asset in 2017. In 2018 and 2019, $0.4
and $11.8 million was deferred as a regulatory
liability, respectively.
Potential charges if certain performance targets
relating to service, reliability, safety and other
matters are not met:
Yr. 1 - $450 million
Yr. 2 - $461 million
Yr. 3 - $476 million
In 2020, the company recorded negative revenue
adjustments of $5 million.
Continuation of reconciliation of expenses for
pension and other postretirement benefits,
variable-rate debt, major storms, property taxes
(e), municipal infrastructure support costs (f), the
impact of new laws and environmental site
investigation and remediation to amounts
reflected in rates. (g)
In 2020, the company deferred $288 million of
net regulatory assets.
Target levels reflected in rates:
Electric average net plant target excluding
advanced metering infrastructure (AMI):
Yr. 1 - $24,491 million
Yr. 2 - $25,092 million
Yr. 3 - $25,708 million
AMI:
Yr. 1 - $572 million
Yr. 2 - $740 million
Yr. 3 - $806 million (h)
The company deferred $4.1 million as a
regulatory asset in 2020.
Average rate base
Weighted average cost of capital
(after-tax)
Yr. 1 – $18,902 million
Yr. 2 – $19,530 million
Yr. 3 – $20,277 million
Yr. 1 – 6.82 percent
Yr. 2 – 6.80 percent
Yr. 3 – 6.73 percent
Yr. 1 - $21,660 million
Yr. 2 - $22,783 million
Yr. 3 - $23,926 million
6.61 percent
Authorized return on common equity
9.0 percent
8.80 percent
CON EDISON ANNUAL REPORT 2020
131
Actual return on common equity (i)
Earnings sharing
Cost of long-term debt
Yr. 1 – 9.30 percent
Yr. 2 – 9.36 percent
Yr. 3 – 8.82 percent
Most earnings above an annual earnings
threshold of 9.5 percent are to be applied to
reduce regulatory assets for environmental
remediation and other costs accumulated in the
rate year.
In 2017, the company had no earnings above the
threshold but recorded a positive adjustment
related to 2016 of $5.7 million in earnings.
In 2018 and 2019, the company had no earnings
sharing above the threshold.
Yr. 1 – 4.93 percent
Yr. 2 – 4.88 percent
Yr. 3 – 4.74 percent
Common equity ratio
48 percent
Yr. 1 – 8.50 percent
Most earnings above an annual earnings
threshold of 9.3 percent are to be applied to
reduce regulatory assets for environmental
remediation and other costs accumulated in the
rate year.
In 2020, the company had no earnings sharing
above the threshold.
4.63 percent
48 percent
(a)
In January 2020, the NYSPSC approved the October 2019 Joint Proposal for CECONY's electric rate plan for January 2020 through
December 2022. If at the end of any semi-annual period ending June 30 and December 31, Con Edison’s investments in its non-utility
businesses exceed 15 percent of its total consolidated revenues, assets or cash flow, or if the ratio of holding company debt to total
consolidated debt rises above 20 percent, CECONY is required to notify the NYSPSC and submit a ring-fencing plan or a demonstration
why additional ring-fencing measures (see Note T) are not necessary.
(b) The electric base rate increases were in addition to a $48 million increase resulting from the December 2016 expiration of a temporary credit
under the prior rate plan. At the NYSPSC’s option, these increases were implemented with increases of $199 million in each rate year. Base
rates reflect recovery by the company of certain costs of its energy efficiency, system peak reduction and electric vehicle programs (Yr. 1 -
$20.5 million; Yr. 2 - $49 million; and Yr. 3 - $107.5 million) over a 10-year period, including the overall pre-tax rate of return on such costs.
(c) Base rates reflect recovery by the company of certain costs of its energy efficiency, Reforming the Energy Vision demonstration projects,
non-wire alternative projects (including the Brooklyn Queens demand management program), and off-peak electric vehicle charging
programs (Yr. 1 - $206 million; Yr. 2 - $245 million; and Yr. 3 - $251 million) over a ten-year period, including the overall pre-tax rate of return
on such costs.
(d) Amounts reflect amortization of the 2018 tax savings under the federal Tax Cuts and Jobs Act of 2017 (TCJA) allocable to CECONY’s
electric customers ($377 million) over a three-year period ($126 million annually), the protected portion of the regulatory liability for excess
deferred income taxes allocable to CECONY’s electric customers ($1,663 million) over the remaining lives of the related assets ($49 million
in Yr. 1, $50 million in Yr. 2, and $53 million in Yr. 3) and the unprotected portion of the net regulatory liability ($784 million) over five years
($157 million annually). Amounts also reflect amortization of the regulatory asset for deferred MTA power reliability costs ($238 million) over
a five-year period ($48 million annually).
(f)
(e) 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.
In general, if actual expenses for municipal infrastructure support (other than company labor) are below the amounts reflected in rates the
company will defer the difference for credit to customers, and if the actual expenses are above the amount reflected in rates the company
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 January 2017-December 2019 rate plan and 15 percent of the amount reflected in the January
2020-December 2022 rate plan.
In addition, the NYSPSC staff has commenced a focused operations audit to investigate the income tax accounting of CECONY and other
New York utilities. Any NYSPSC-ordered adjustment to CECONY’s income tax accounting will be refunded to or collected from customers,
as determined by the NYSPSC. See "Other Regulatory Matters," below.
(g)
(h) Reconciliation of net utility plant for AMI will be done on a combined basis for electric and gas.
(i) Calculated in accordance with the earnings calculation method prescribed in the rate order.
132
CON EDISON ANNUAL REPORT 2020
CECONY – Gas
Effective period
Base rate changes
Amortizations to income of net
regulatory (assets) and liabilities
Other revenue sources
Revenue decoupling mechanisms
Recoverable energy costs
Negative revenue adjustments
Cost reconciliations
Net utility plant reconciliations
January 2017 - December 2019
January 2020 – December 2022 (a)
Yr. 1 – $(5) million (b)
Yr. 2 – $92 million
Yr. 3 – $90 million
Yr. 1 – $39 million
Yr. 2 – $37 million
Yr. 3 – $36 million
Yr. 1 – $84 million (c)
Yr. 2 – $122 million (c)
Yr. 3 – $167 million (c)
Yr. 1 – $45 million (d)
Yr. 2 – $43 million (d)
Yr. 3 – $10 million (d)
Retention of annual revenues from non-firm
customers of up to $65 million and 15 percent of
any such revenues above $65 million.
Retention of annual revenues from non-firm
customers of up to $65 million and 15 percent of
any such revenues above $65 million.
Potential incentives if performance targets related
to gas leak backlog, leak prone pipe and service
terminations are met:
Yr. 1 – $7 million
Yr. 2 – $8 million
Yr. 3 – $8 million
In 2017, 2018 and 2019, the company achieved
incentives of $7 million, $6 million and $7 million,
respectively, that, pursuant to the rate plan, was
recorded ratably in earnings from 2018 to 2020.
In 2018 and 2019, the company recorded
incentives of $5 million and $9 million,
respectively, for gas leak backlog, leak prone
pipe and service terminations.
Continuation of reconciliation of actual to
authorized gas delivery revenues.
In 2017, 2018 and 2019, the company deferred
$3 million, $12 million and $10 million of
regulatory liabilities, respectively.
Continuation of current rate recovery of
purchased gas costs.
Potential charges if performance targets relating
to service, safety and other matters are not met:
Yr. 1 – $68 million
Yr. 2 – $63 million
Yr. 3 – $70 million
In 2017 and 2018, the company recorded
negative revenue adjustments of $5 million and
$4 million, respectively. In 2019, the company did
not record any negative revenue adjustments.
Continuation of reconciliation of expenses for
pension and other postretirement benefits,
variable-rate tax-exempt debt, major storms,
property taxes (e), municipal infrastructure
support costs (f), the impact of new laws and
environmental site investigation and remediation
to amounts reflected in rates. (g)
In 2017, 2018 and 2019, the company deferred
$2 million of net regulatory liabilities, $44 million
of net regulatory assets and $18 million of net
regulatory assets, respectively.
Target levels reflected in rates:
Gas average net plant target excluding AMI:
Yr. 1 – $5,844 million
Yr. 2 – $6,512 million
Yr. 3 – $7,177 million
AMI:
Yr. 1 – $27 million
Yr. 2 – $57 million
Yr. 3 – $100 million
In 2017 and 2018 the company deferred $2.2
million as regulatory liabilities. In 2019, the
company deferred $1.7 million as a regulatory
liability.
Potential earnings adjusted mechanism
incentives for energy efficiency and other
potential incentives of up to:
Yr. 1 - $20 million
Yr. 2 - $22 million
Yr. 3 - $25 million
In 2020, the company recorded $3 million of
earnings adjustment mechanism incentives for
energy efficiency.
In 2020, the company recorded positive
incentives of $13 million.
Continuation of reconciliation of actual to
authorized gas delivery revenues, modified to be
calculated based upon revenue per customer
class instead of revenue per customer.
In 2020, the company deferred for recovery from
customers $27 million of revenues.
Continuation of current rate recovery of
purchased gas costs.
Potential charges if performance targets relating
to service, safety and other matters are not met:
Yr. 1 - $81 million
Yr. 2 - $88 million
Yr. 3 - $96 million
In 2020, the company did not record any negative
revenue adjustments.
Continuation of reconciliation of expenses for
pension and other postretirement benefits,
variable-rate debt, major storms, property taxes
(e), municipal infrastructure support costs (f), the
impact of new laws and environmental site
investigation and remediation to amounts
reflected in rates. (g)
In 2020, the company deferred $91 million of net
regulatory assets.
Target levels reflected in rates:
Gas average net plant target excluding AMI:
Yr. 1 - $8,108 million
Yr. 2 - $8,808 million
Yr. 3 - $9,510 million
AMI:
Yr. 1 - $142 million
Yr. 2 - $183 million
Yr. 3 - $211 million (h)
In 2020, the company deferred $24.7 million as a
regulatory liability.
Average rate base
Weighted average cost of capital
(after-tax)
Yr. 1 – $4,841 million
Yr. 2 – $5,395 million
Yr. 3 – $6,005 million
Yr. 1 – 6.82 percent
Yr. 2 – 6.80 percent
Yr. 3 – 6.73 percent
Authorized return on common equity
9.0 percent
Actual return on common equity (i)
Yr. 1 – 9.22 percent
Yr. 2 – 9.04 percent
Yr. 3 – 8.72 percent
Yr. 1 - $7,171 million
Yr. 2 - $7,911 million
Yr. 3 - $8,622 million
6.61 percent
8.80 percent
Yr. 1 – 8.40 percent
CON EDISON ANNUAL REPORT 2020
133
Earnings sharing
Most earnings above an annual earnings
threshold of 9.5 percent are to be applied to
reduce regulatory assets for environmental
remediation and other costs accumulated in the
rate year.
Most earnings above an annual earnings
threshold of 9.3 percent are to be applied to
reduce regulatory assets for environmental
remediation and other costs accumulated in the
rate year.
In 2017, 2018 and 2019, the company had no
earnings above the threshold.
In 2020, the company had no earnings above the
threshold.
Cost of long-term debt
Yr. 1 – 4.93 percent
Yr. 2 – 4.88 percent
Yr. 3 – 4.74 percent
Common equity ratio
48 percent
4.63 percent
48 percent
(a)
(b)
(c)
(d)
In January 2020, the NYSPSC approved the October 2019 Joint Proposal for CECONY's gas rate plan for January 2020 through
December 2022. If at the end of any semi-annual period ending June 30 and December 31, Con Edison’s investments in its non-utility
businesses exceed 15 percent of its total consolidated revenues, assets or cash flow, or if the ratio of holding company debt to total
consolidated debt rises above 20 percent, CECONY is required to notify the NYSPSC and submit a ring-fencing plan or a demonstration
why additional ring-fencing measures (see Note T) are not necessary.
The gas base rate decrease was offset by a $41 million increase resulting from the December 2016 expiration of a temporary credit under
the prior rate plan.
The gas base rate increases shown above will be implemented with increases of $47 million in Yr. 1; $176 million in Yr. 2; and
$170 million in Yr. 3 in order to levelize customer bill impacts. Base rates reflect recovery by the company of certain costs of its energy
efficiency program (Yr. 1 - $30 million; Yr. 2 - $37 million; and Yr. 3 - $40 million) over a ten-year period, including the overall pre-tax rate
of return on such costs.
Amounts reflect amortization of the remaining 2018 TCJA tax savings allocable to CECONY’s gas customers ($63 million) over a two year
period ($32 million annually), the protected portion of the regulatory liability for excess deferred income taxes allocable to CECONY’s gas
customers ($725 million) over the remaining lives of the related assets ($14 million in Yr. 1, $14 million in Yr. 2, and $12 million in Yr. 3)
and the unprotected portion of the net regulatory liability ($107 million) over five years ($21 million annually)
(e)-(i) See footnotes (e) - (i) to the table under “CECONY Electric,” above.
134
CON EDISON ANNUAL REPORT 2020
CECONY – Steam
Effective period
Base rate changes
Amortizations to income of net
regulatory (assets) and liabilities
Recoverable energy costs
Negative revenue adjustments
Cost reconciliations (c)
Net utility plant reconciliations
Average rate base
Weighted average cost of capital
(after-tax)
Authorized return on common equity
Actual return on common equity (d)
Earnings sharing
January 2014 – December 2016 (a)
Yr. 1 – $(22.4) million (b)
Yr. 2 – $19.8 million (b)
Yr. 3 – $20.3 million (b)
Yr. 4 – None
Yr. 5 – None
Yr. 6 – None
Yr. 7 – None
$37 million over three years
Current rate recovery of purchased power and
fuel costs.
Potential charges (up to $1 million annually) if
certain steam performance targets are not met. In
years 2014 through 2020, the company did not
record any negative revenue adjustments.
In 2014, 2015, 2016, 2017, 2018, 2019 and 2020,
the company deferred $42 million of net
regulatory liabilities, $17 million of net regulatory
assets, $8 million and $14 million of net
regulatory liabilities, $1 million of net regulatory
assets, $8 million of net regulatory liabilities and
$35 million of net regulatory assets, respectively.
Target levels reflected in rates were:
Production:
Yr. 1 – $1,752 million
Yr. 2 – $1,732 million
Yr. 3 – $1,720 million
Distribution:
Yr. 1 – $6 million
Yr. 2 – $11 million
Yr. 3 – $25 million
The company reduced its regulatory liability by
$0.1 million in 2014 and immaterial amounts in
2015 and 2016 and no deferrals were recorded in
2017, 2018, 2019. The company reduced its
regulatory liability by $1.6 million in 2020.
Yr. 1 – $1,511 million
Yr. 2 – $1,547 million
Yr. 3 – $1,604 million
Yr. 1 – 7.10 percent
Yr. 2 – 7.13 percent
Yr. 3 – 7.21 percent
9.3 percent
Yr. 1 – 9.82 percent
Yr. 2 – 10.88 percent
Yr. 3 – 10.54 percent
Yr. 4 – 9.51 percent
Yr. 5 – 11.73 percent
Yr. 6 – 10.45 percent
Yr. 7 – 7.91 percent
Weather normalized earnings above an annual
earnings threshold of 9.9 percent are to be
applied to reduce regulatory assets for
environmental remediation and other costs.
In 2014, the company had no earnings above the
threshold. Actual earnings were $11.5 million and
$7.8 million above the threshold in 2015 and
2016, respectively. In 2017, actual earnings were
$8.5 million above the threshold, offset in part by
a positive adjustment related to 2016 of $4
million. In 2018, actual earnings were $16.5
million above the threshold, and an additional
$1.1 million related to 2017 was recorded. In
2019 actual earnings were $5 million above the
threshold, offset in part by an adjustment related
to 2018 of $2.3 million. In 2020, the company had
no earnings above the threshold.
Cost of long-term debt
Yr. 1 – 5.17 percent
Yr. 2 – 5.23 percent
Yr. 3 – 5.39 percent
Common equity ratio
48 percent
(a) Rates determined pursuant to this rate plan continue in effect until a new rate plan is approved by the NYSPSC.
(b) The impact of these base rate changes was deferred which resulted in an $8 million regulatory liability at December 31, 2016.
(c) 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 10 basis point impact on return on common equity.
(d) Calculated in accordance with the earnings calculation method prescribed in the rate order.
CON EDISON ANNUAL REPORT 2020
135
O&R New York – Electric
Effective period
Base rate changes
Amortizations to income of net
regulatory (assets) and liabilities
Other revenue sources
Revenue decoupling mechanisms
Recoverable energy costs
Negative revenue adjustments
November 2015 - October 2017 (a)
January 2019 – December 2021 (d)
Yr. 1 – $9.3 million
Yr. 2 – $8.8 million
Yr. 3 – None
Yr. 1 – $(8.5) million (b)
Yr. 2 – $(9.4) million (b)
Yr. 3 – None
In 2015, 2016, 2017 and 2018, the company
deferred for the customer’s benefit an immaterial
amount, $6.3 million as regulatory liabilities,
$11.2 million as regulatory asset and $0.5 million
as regulatory asset, respectively.
Yr. 1 – $13.4 million (e)
Yr. 2 – $8.0 million (e)
Yr. 3 – $5.8 million (e)
Yr. 1 – $(1.5) million (f)
Yr. 2 – $(1.5) million (f)
Yr. 3 – $(1.5) million (f)
Potential earnings adjustment mechanism
incentives for peak reduction, energy efficiency,
Distributed Energy Resources utilization and
other potential incentives of up to:
Yr. 1 - $3.6 million
Yr. 2 - $4.0 million
Yr. 3 - $4.2 million
Potential incentive if performance target related
to customer service is met: $0.5 million annually.
In 2019 and 2020, the company recorded $2.6
million and $1.9 million of earnings adjustment
mechanism incentives for energy efficiency,
respectively. In 2019 and 2020, the company
recorded $0.2 million and $0.5 million of
incentives for customer service, respectively.
Continuation of reconciliation of actual to
authorized electric delivery revenues.
In 2019 and 2020, the company deferred $0.1
million and $6 million as regulatory assets.
Continuation of current rate recovery of
purchased power costs.
Potential charges (up to $4 million annually) if
certain performance targets are not met. In 2015
the company recorded $1.25 million in negative
revenue adjustments. In 2016, 2017 and 2018,
the company did not record any negative
revenue adjustments.
Continuation of current rate recovery of
purchased power costs.
Potential charges if certain performance targets
relating to service, reliability and other matters
are not met:
Yr. 1 - $4.4 million
Yr. 2 - $4.4 million
Yr. 3 - $4.5 million
Cost reconciliations
In 2015, 2016 and 2017, the company deferred
$0.3 million, $7.4 million and $3.2 million as net
decreases to regulatory assets, respectively. In
2018, the company deferred $5 million as a net
regulatory asset.
Net utility plant reconciliations
Target levels reflected in rates are:
Yr. 1 – $928 million (c)
Yr. 2 – $970 million (c)
The company increased/(reduced) its regulatory
asset by $2.2 million, $(1.9) million, $(1.9) million
and $1.4 million in 2015, 2016, 2017 and 2018,
respectively.
Average rate base
Weighted average cost of capital
(after-tax)
Yr. 1 – $763 million
Yr. 2 – $805 million
Yr. 3 – $805 million
Yr. 1 – 7.10 percent
Yr. 2 – 7.06 percent
Yr. 3 – 7.06 percent
Authorized return on common equity
9.0 percent
Actual return on common equity (k)
Yr. 1 – 10.8 percent
Yr. 2 – 9.7 percent
Yr. 3 – 7.2 percent
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CON EDISON ANNUAL REPORT 2020
In 2019 and 2020, the company did not record
any negative revenue adjustments.
Reconciliation of expenses for pension and other
postretirement benefits, environmental
remediation costs, property taxes (g), energy
efficiency program (h), major storms, the impact
of new laws and certain other costs to amounts
reflected in rates.(i)
In 2019 and 2020, the company deferred $4.3
million and $30.3 million as net regulatory assets.
Target levels reflected in rates were:
Electric average net plant target excluding
advanced metering infrastructure (AMI):
Yr. 1 - $1,008 million
Yr. 2 - $1,032 million
Yr. 3 - $1,083 million
AMI (j):
Yr. 1 - $48 million
Yr. 2 - $58 million
Yr. 3 - $61 million
The company increased regulatory asset by an
immaterial amount in 2019 and deferred $0.4
million as a regulatory liability in 2020.
Yr. 1 – $878 million
Yr. 2 – $906 million
Yr. 3 – $948 million
Yr. 1 – 6.97 percent
Yr. 2 – 6.96 percent
Yr. 3 – 6.96 percent
9.0 percent
Yr. 1 – 9.6 percent
Yr. 2 – 8.76 percent
Earnings sharing
Most earnings above an annual earnings
threshold of 9.6 percent are to be applied to
reduce regulatory assets. In 2015, earnings did
not exceed the earnings threshold. Actual
earnings were $6.1 million, $0.3 million above
the threshold for 2016 and 2017, respectively. In
2018, earnings did not exceed the earnings
threshold.
Most earnings above an annual earnings
threshold of 9.6 percent are to be applied to
reduce regulatory assets for environmental
remediation and other costs accumulated in the
rate year.
In 2019 and 2020, earnings did not exceed the
earnings threshold.
Cost of long-term debt
Yr. 1 – 5.42 percent
Yr. 2 – 5.35 percent
Yr. 3 – 5.35 percent
Common equity ratio
48 percent
Yr. 1 – 5.17 percent
Yr. 2 – 5.14 percent
Yr. 3 – 5.14 percent
48 percent
(a) Rates determined pursuant to this rate plan continued in effect until the subsequent rate plan became effective.
(b) $59.3 million of the regulatory asset for deferred storm costs is to be recovered from customers over a 5 year period, including $11.85
million in each of years 1 and 2, $1 million of the regulatory asset for such costs will not be recovered from customers, and all outstanding
issues related to Superstorm Sandy and other past major storms prior to November 2014 are resolved. Approximately $4 million of
regulatory assets for property tax and interest rate reconciliations will not be recovered from customers. Amounts that will not be recovered
from customers were charged-off in June 2015.
(c) Excludes electric AMI as to which the company will be required to defer as a regulatory liability the revenue requirement impact of the
(d)
amount, if any, by which actual average net utility plant balances are less than amounts reflected in rates: $1 million in year 1 and $9 million
in year 2.
If at the end of any year, Con Edison’s investments in its non-utility businesses exceed 15 percent of Con Edison’s total consolidated
revenues, assets or cash flow, or if the ratio of holding company debt to total consolidated debt rises above 20 percent, O&R is required to
notify the NYSPSC and submit a ring-fencing plan or a demonstration why additional ring-fencing measures (see Note T) are not necessary.
(e) The electric base rate increases shown above will be implemented with increases of: Yr. 1 - $8.6 million; Yr. 2 - $12.1 million; and Yr. 3 -
$12.2 million.
(f) Reflects amortization of, among other things, the company’s net benefits under the TCJA prior to January 1, 2019, amortization of net
regulatory liability for future income taxes and reduction of previously incurred regulatory assets for environmental remediation costs. Also,
for electric, reflects amortization over a six year period of previously incurred incremental major storm costs. See "Other Regulatory
Matters," below.
(g) 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.
(h) Energy efficiency costs are expensed as incurred. Such costs are subject to a downward-only reconciliation over the terms of the electric
(i)
and gas rate plans. The company will defer for the benefit of customers any cumulative shortfall over the terms of the electric and gas rate
plans between actual expenditures and the levels provided in rates.
In addition, amounts reflected in rates relating to income taxes and excess deferred federal income tax liability balances will be reconciled
(i.e., refunded to or collected from customers) to any final, non-appealable NYSPSC-ordered findings in its investigation of O&R’s income
tax accounting. See “Other Regulatory Matters,” in Note B.
(j) Net plant reconciliation for AMI expenditures will be implemented for a single category of AMI capital expenditures that includes amounts
allocated to both electric and gas customers.
(k) Calculated in accordance with the earnings calculation method prescribed in the rate order.
In January 2021, O&R filed a request with the NYSPSC for an increase in the rates it charges for electric service
rendered in New York, effective January 1, 2022, of $24.5 million. The filing reflects a return on common equity of
9.5 percent and a common equity ratio of 50 percent. The filing proposes continuation of the provisions with respect
to recovery from customers of the cost of purchased power, and the reconciliation of actual expenses allocable to
the electric business to the amounts for such costs reflected in electric rates for storm costs, pension and other
postretirement benefit costs, environmental remediation and property taxes.
CON EDISON ANNUAL REPORT 2020
137
November 2015 – October 2018 (a)
January 2019 – December 2021 (d)
O&R New York – Gas
Effective period
Base rate changes
Amortization to income of net regulatory
(assets) and liabilities
Other revenue sources
Yr. 1 – $16.4 million
Yr. 2 – $16.4 million
Yr. 3 – $5.8 million
Yr. 3 – $10.6 million collected through a
surcharge
Yr. 1 – $(1.7) million (b)
Yr. 2 – $(2.1) million (b)
Yr. 3 – $(2.5) million (b)
Yr. 1 – $(7.5) million (e)
Yr. 2 – $3.6 million (e)
Yr. 3 – $0.7 million (e)
Yr. 1 – $1.8 million (f)
Yr. 2 – $1.8 million (f)
Yr. 3 – $1.8 million (f)
Continuation of retention of annual revenues
from non-firm customers of up to $4.0 million,
with variances to be shared 80 percent by
customers and 20 percent by company.
Potential earnings adjustment mechanism
incentives of up to $0.3 million annually.
Potential incentives if performance targets
related to gas leak backlog, leak prone pipe,
emergency response, damage prevention and
customer service are met: Yr. 1 - $1.2 million; Yr.
2 - $1.3 million; and Yr. 3 - $1.3 million.
In 2019 and 2020, the company recorded $0.3
million of earnings adjustment mechanism
incentives for energy efficiency. In 2019 and
2020, the company recorded $0.7 million and
$0.5 million of positive incentives, respectively.
Continuation of reconciliation of actual to
authorized gas delivery revenues.
In 2019 and 2020, the company deferred $0.8
million and $0.5 million of regulatory assets,
respectively.
Continuation of current rate recovery of
purchased gas costs.
Potential charges if performance targets relating
to service, safety and other matters are not met:
Yr. 1 - $5.5 million; Yr. 2 - $5.7 million; and Yr. 3 -
$6.0 million.
In 2019 and 2020, the company recorded a $0.2
million and an immaterial amount of negative
revenue adjustments, respectively.
In 2019 and 2020, the company deferred $6
million as net regulatory liabilities and $1.8
million as net regulatory assets, respectively.
Target levels reflected in rates were:
Gas average net plant target excluding AMI:
Yr. 1 - $593 million
Yr. 2 - $611 million
Yr. 3 - $632 million
AMI (j):
Yr. 1 - $20 million
Yr. 2 - $24 million
Yr. 3 - $25 million
In 2019 and 2020, the company deferred
immaterial amounts as regulatory assets.
Yr. 1 – $454 million
Yr. 2 – $476 million
Yr. 3 – $498 million
Yr. 1 – 6.97 percent
Yr. 2 – 6.96 percent
Yr. 3 – 6.96 percent
9.0 percent
Yr. 1 – 8.90 percent
Yr. 2 – 9.58 percent
In 2015 and 2016, the company deferred $4.5
million and $6.6 million as net regulatory
liabilities and assets, respectively. In 2017 and
2018, the company deferred $3.5 million and
$7.4 million as net regulatory liabilities,
respectively.
Reconciliation of expenses for pension and other
postretirement benefits, environmental
remediation costs, property taxes (g), energy
efficiency program (h), the impact of new laws
and certain other costs to amounts reflected in
rates.(i)
Revenue decoupling mechanisms
In 2015, 2016, 2017 and 2018, the company
deferred $0.8 million of regulatory assets, $6.2
million of regulatory liabilities, $1.7 million of
regulatory liabilities and $6.3 million of
regulatory liabilities, respectively.
Recoverable energy costs
Current rate recovery of purchased gas costs.
Potential charges (up to $3.7 million in Yr. 1,
$4.7 million in Yr. 2 and $4.9 million in Yr. 3) if
certain performance targets are not met. In
2015, 2016 and 2017, the company did not
record any negative revenue adjustments. In
2018, the company recorded a $0.1 million
negative revenue adjustment.
Negative revenue adjustments
Cost reconciliations
Net utility plant reconciliations
Target levels reflected in rates are:
Yr. 1 – $492 million (c)
Yr. 2 – $518 million (c)
Yr. 3 – $546 million (c)
No deferral was recorded for 2015 and
immaterial amounts were recorded as
regulatory liabilities in 2016 and 2017. In
2018, the company deferred $0.4 million as
regulatory asset.
Average rate base
Weighted average cost of capital (after-
tax)
Authorized return on common equity
Actual return on common equity (k)
Yr. 1 – $366 million
Yr. 2 – $391 million
Yr. 3 – $417 million
Yr. 1 – 7.10 percent
Yr. 2 – 7.06 percent
Yr. 3 – 7.06 percent
9.0 percent
Yr. 1 – 11.2 percent
Yr. 2 – 9.7 percent
Yr. 3 – 8.1 percent
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CON EDISON ANNUAL REPORT 2020
Earnings sharing
Most earnings above an annual earnings
threshold of 9.6 percent are to be applied to
reduce regulatory assets. In 2015, earnings
did not exceed the earnings threshold. Actual
earnings were $4 million, $0.2 million above
the threshold for 2016 and 2017, respectively.
In 2018, earnings did not exceed the earnings
threshold.
Most earnings above an annual earnings
threshold of 9.6 percent are to be applied to
reduce regulatory assets for environmental
remediation and other costs accumulated in the
rate year. In 2019 and 2020, earnings did not
exceed the earnings threshold.
Cost of long-term debt
Common equity ratio
Yr. 1 – 5.42 percent
Yr. 2 – 5.35 percent
Yr. 3 – 5.35 percent
48 percent
Yr. 1 – 5.17 percent
Yr. 2 – 5.14 percent
Yr. 3 – 5.14 percent
48 percent
(a) Rates pursuant to this rate plan continued in effect until the subsequent rate plan became effective.
(b) Reflects that the company will not recover from customers a total of approximately $14 million of regulatory assets for property tax and
interest rate reconciliations. Amounts that will not be recovered from customers were charged-off in June 2015.
(c) Excludes gas AMI as to which the company will be required to defer as a regulatory liability the revenue requirement impact of the amount, if
(d)
any, by which actual average net utility plant balances are less than amounts reflected in rates: $0.5 million in year 1, $4.2 million in year 2
and $7.2 million in year 3.
If at the end of any year, Con Edison’s investments in its non-utility businesses exceed 15 percent of Con Edison’s total consolidated
revenues, assets or cash flow, or if the ratio of holding company debt to total consolidated debt rises above 20 percent, O&R is required to
notify the NYSPSC and submit a ring-fencing plan or a demonstration why additional ring-fencing measures (see Note T) are not necessary.
(e) The gas base rate changes shown above will be implemented with changes of: Yr. 1 - $(5.9) million; Yr. 2 - $1.0 million; and Yr. 3 - $1.0
million.
(f)-(k) See footnotes (f) - (k) to the table under “O&R New York - Electric,” above.
In January 2021, O&R filed a request with the NYSPSC for an increase in the rates it charges for gas service
rendered in New York, effective January 1, 2022, of $9.8 million. The filing reflects a return on common equity of 9.5
percent and a common equity ratio of 50 percent. The filing proposes continuation of the provisions with respect to
recovery from customers of the cost of purchased gas, and the reconciliation of actual expenses allocable to the
gas business to the amounts for such costs reflected in gas rates for pension and other postretirement benefit costs,
environmental remediation and property taxes.
CON EDISON ANNUAL REPORT 2020
139
In January 2020, the NJBPU approved an electric rate increase, effective February 1, 2020, of $12 million for
RECO. The following table contains a summary of the terms of the distribution rate plans.
March 2017 – January 2020
Yr. 1 – $1.7 million
$0.2 million over three years and continuation
of $(25.6) million of deferred storm costs over
four years which expired on July 31, 2018 (a)
February 2020
Yr. 1 – $12 million
$4.8 million over four years.
Current rate recovery of purchased power
costs.
Current rate recovery of purchased power
costs.
RECO
Effective period
Base rate changes
Amortization to income of net
regulatory (assets) and liabilities
Recoverable energy costs
Cost reconciliations
Average rate base
Weighted average cost of capital
(after-tax)
None
Yr. 1 – $178.7 million
7.47 percent
Authorized return on common equity
9.6 percent
Actual return on common equity
Cost of long-term debt
Common equity ratio
Yr. 1 – 7.5 percent
Yr. 2 – 5.7 percent
5.37 percent
49.7 percent
None
Yr. 1 – $229.9 million
7.11 percent
9.5 percent
Yr. 1 – 5.4 percent
4.88 percent
48.32 percent
(a)
In January 2016, the NJBPU approved RECO’s plan to spend $15.7 million in capital over three years to harden its electric system against
storms, the costs of which RECO, beginning in 2017, is collecting through a customer surcharge.
In November 2017, FERC approved a September 2017 settlement agreement among RECO, the New Jersey
Division of Rate Counsel and the NJBPU that increases RECO's annual transmission revenue requirement from
$11.8 million to $17.7 million, effective April 2017. The revenue requirement reflects a return on common equity of
10.0 percent.
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 State Regulation
In March 2020, New York State Governor Cuomo declared a State Disaster Emergency for the State of New York
due to the COVID-19 pandemic and signed the "New York State on PAUSE" executive order that closed all non-
essential businesses statewide. New York State designated utilities, including CECONY and O&R, as essential
businesses that were able to continue a portion of their work during the effectiveness of the PAUSE order. In May
2020, the "New York Forward" plan went into effect. New York Forward is a phased plan to reopen businesses in
geographic areas of New York State that meet metrics established by various public health organizations. In
October 2020, Governor Cuomo announced a new cluster action initiative to address COVID-19 hotspots that have
arisen in various areas of New York within the Utilities’ service territory and to impose new rules and restrictions
targeted to areas with the highest concentration of COVID-19 cases and the surrounding communities. As a result
of these COVID-19 clusters, the Utilities have limited their work in customer premises in the impacted areas to only
address emergency, safety-related and selected service connections requested by customers. Since 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 during the COVID-19 state of emergency. In addition,
such prohibition will apply for an additional 180 days after the state of emergency ends for residential customers
who have experienced a change in financial circumstances due to the COVID-19 pandemic. The law expires on
March 31, 2021, although legislation has been introduced to extend the expiration date until December 31, 2021 or
later. For the year ended December 31, 2020, the estimated foregone revenues that were not collected by CECONY
and O&R were approximately $61 million and $3 million, respectively (see Note M). Also in March 2020, the Utilities
requested and the NYSPSC granted extensions to file their 2019 Earnings Adjustment Mechanisms (EAMs) reports,
which were filed in July 2020. The earned EAM incentives of approximately $46 million and $3 million for CECONY
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CON EDISON ANNUAL REPORT 2020
and O&R, respectively, are being recovered from customers over a twelve-month period that began September
2020.
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 cost of the
program is being recovered over a five-year period that began January 2021. As of December 31, 2020, CECONY
deferred for later recovery $63.4 million of summer cooling credit costs.
The Utilities’ New York rate plans allow them to defer costs resulting from a change in legislation, regulation and
related actions that have taken effect during the term of the rate plans once the costs exceed a specified threshold.
For the year ended December 31, 2020, the reserve increases to the allowance for uncollectible accounts
associated with the COVID-19 pandemic for CECONY electric and gas operations and O&R electric operations
were $73 million and $2 million, respectively, and were deferred pursuant to the legislative, regulatory and related
actions provisions of the rate plans as a result of the New York State on PAUSE and related executive orders. The
reserve increase to the allowance for uncollectible accounts associated with the COVID-19 pandemic for O&R gas
operations of $1 million did not meet the deferral threshold at December 31, 2020. The Utilities’ New York rate plans
also provide for an allowance for write-offs of customer accounts receivable balances. The above amounts deferred
pursuant to the legislative, regulatory and related actions provisions were reduced by the amount that the actual
write-offs of customer accounts receivable balances were below the allowance reflected in rates (due to the New
York State on PAUSE and related executive orders), which differences were $18 million and $1 million for CECONY
and O&R, respectively, for the year ended December 31, 2020.
In June 2020, the NYSPSC established a generic proceeding on the impacts of the COVID-19 pandemic and
sought comment on a variety of COVID-19 related issues. In July 2020, the Utilities submitted joint comments with
other large utilities in New York State that included a formal request to defer all COVID-19 related costs and for a
surcharge mechanism to collect such deferrals based upon the individual utility's need. In January 2021, NYSPSC
staff provided guidance to New York utilities that no additional mechanisms are required because there are already
established mechanisms for utility recovery of unexpected material expenses through rate plan change in
legislation, regulation and related actions provisions and the filing of individual deferral petitions The guidance
further provided that utilities deferring COVID-19 related costs pursuant to the provisions that allow deferral of costs
resulting from a change in legislation, regulation and related actions must comply with the provisions of their rate
plans, be able to demonstrate the nexus between the changes in law or regulation and the specific revenue and
expense items, and consider any offsetting cost savings due to the pandemic.
In February 2021, the NYSPSC staff issued its report on New York State’s Energy Affordability Policy that provides
recommendations to large New York utilities, including CECONY and O&R. The report recommends, among other
things, that residential and commercial customers’ late payment fees and interest on deferred payment agreements
be waived until two years after the expiration of the New York State moratorium on utility terminations (the
moratorium currently expires on March 31, 2021, although legislation has been introduced to extend the expiration
to December 31, 2021 or later) and each utility develop an arrears management program to mitigate the financial
burdens of the COVID-19 pandemic on New York households and that program costs be shared, perhaps equally,
between shareholders and customers. The NYSPSC staff has requested that the utilities and interested parties
comment on the report prior to staff submitting the recommendations to the NYSPSC for consideration.
As of December 31, 2020, CECONY deferred, for New York City residential customers, $54.9 million of higher
summer generation capacity supply costs. CECONY expects to recover such costs from customers by October
2021.
The Utilities’ rate plans have revenue decoupling mechanisms in their New York electric and gas businesses that
reconcile actual energy delivery revenues to the authorized delivery revenues approved by the NYSPSC per month
and accumulate the deferred balances semi-annually under CECONY's electric rate plan (January through June
and July through December, respectively) and annually under CECONY's gas rate plan and O&R New York's
electric and gas rate plans (January through December). Differences are accrued with interest each month for
CECONY and O&R New York’s electric customers and after the annual deferral period ends for CECONY and O&R
New York’s gas customers for refund to, or recovery from customers, as applicable. Generally, the refund to or
recovery from customers begins August and February of each year over an ensuing six-month period for CECONY's
electric customers and February of each year over an ensuing twelve-month period for CECONY's gas and O&R
New York's electric and gas customers.
CON EDISON ANNUAL REPORT 2020
141
New Jersey State Regulation
In March 2020, New Jersey Governor Murphy declared a Public Health Emergency and State of Emergency for the
State of New Jersey. Since that declaration, the NJBPU and RECO have 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 is not expected to be material.
In July 2020, the NJBPU authorized RECO and other New Jersey utilities to create a COVID-19-related regulatory
asset by deferring prudently incurred incremental costs related to the COVID-19 pandemic beginning on March 9,
2020, and through the later of September 30, 2021, or 60 days after the emergency declaration is no longer in
effect. RECO deferred net incremental COVID-19 related costs of $0.5 million through December 31, 2020.
Other Regulatory Matters
In August 2018, the NYSPSC ordered CECONY to begin on January 1, 2019 to credit the company's electric and
gas customers, and to begin on October 1, 2018 to credit its steam customers, with the net benefits of the federal
Tax Cuts and Jobs Act of 2017 (TCJA) as measured based on amounts reflected in its rate plans prior to the
enactment of the TCJA in December 2017. The net benefits include the revenue requirement impact of the reduction
in the corporate federal income tax rate to 21 percent, the elimination for utilities of bonus depreciation and the
amortization of excess deferred federal income taxes.
CECONY, under its electric rate plan that was approved in January 2020, is amortizing its TCJA net benefits prior to
January 1, 2019 allocable to its electric customers ($377 million) over a three-year period, the “protected” portion of
its net regulatory liability for future income taxes related to certain accelerated tax depreciation benefits allocable to
its electric customers ($1,663 million) over the remaining lives of the related assets and the remainder, or
“unprotected” portion of the net regulatory liability allocable to its electric customers ($784 million) over a five-year
period. CECONY, under its gas rate plan that was approved in January 2020, is amortizing its remaining TCJA net
benefits prior to January 1, 2019 allocable to its gas customers ($63 million) over a two-year period, the protected
portion of its net regulatory liability for future income taxes allocable to its gas customers ($725 million) over the
remaining lives of the related assets and the unprotected portion of the net regulatory liability allocable to its gas
customers ($107 million) over a five-year period. See footnote (d) to the CECONY - Electric and Gas tables under
“Rate Plans,” above.
CECONY's net benefits prior to October 1, 2018 allocable to the company’s steam customers ($15 million) are
being amortized over a three-year period. CECONY’s net regulatory liability for future income taxes, including both
the protected and unprotected portions, allocable to the company’s steam customers ($185 million) is being
amortized over the remaining lives of the related assets (with the amortization period for the unprotected portion
subject to review in its next steam rate proceeding).
O&R, under its current electric and gas rate plans, has reflected its TCJA net benefits in its electric and gas rates
beginning as of January 1, 2019. Under the rate plans, O&R is amortizing its net benefits prior to January 1, 2019
($22 million) over a three-year period, the protected portion of its net regulatory liability for future income taxes
($123 million) over the remaining lives of the related assets and the unprotected portion ($30 million) over a fifteen-
year period. See "Rate Plans," above.
In January 2018, the NYSPSC issued an order initiating a focused operations audit of the income tax accounting of
certain utilities, including CECONY and O&R. The Utilities are unable to estimate the amount or range of their
possible loss related to this matter. At December 31, 2020, the Utilities had not accrued a liability related to this
matter.
In March 2018, Winter Storms Riley and Quinn caused damage to the Utilities’ electric distribution systems and
interrupted service to approximately 209,000 CECONY customers, 93,000 O&R customers and 44,000 RECO
customers. At December 31, 2020, CECONY's costs related to March 2018 storms, including Riley and Quinn,
amounted to $134 million, including operation and maintenance expenses reflected in its electric rate plan ($15
million), operation and maintenance expenses charged against a storm reserve pursuant to its electric rate plan
($84 million), capital expenditures ($29 million) and removal costs ($6 million). At December 31, 2020, O&R and
RECO costs related to 2018 storms amounted to $43 million and $17 million, respectively, most of which were
deferred as regulatory assets pursuant to their electric rate plans. In January 2019, O&R began recovering its
deferred storm costs over a six-year period in accordance with its New York electric rate plan. In February 2020,
RECO began recovering its deferred storm costs over a four-year period in accordance with its New Jersey electric
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CON EDISON ANNUAL REPORT 2020
rate plan. The NYSPSC investigated the preparation and response to the storms by CECONY, O&R, and other New
York electric utilities, including all aspects of their emergency response plans. In April 2019, following the issuance
of a NYSPSC staff report on the investigation, the NYSPSC ordered the utilities to show cause why the NYSPSC
should not commence a penalty action against them for violating their emergency response plans. During 2020,
CECONY and O&R accrued $5.6 million and $0.85 million, respectively, related to this matter. In August 2020, the
NYSPSC approved a July 2020 settlement agreement that provides for the Utilities to set aside $5.6 million and
$0.85 million for the benefit of CECONY and O&R electric customers, respectively.
In July 2018, the NYSPSC commenced an investigation into the rupture of a CECONY steam main located on Fifth
Avenue and 21st Street in Manhattan. Debris from the incident included dirt and mud containing asbestos. The
response to the incident required the closing of buildings and streets for various periods. The NYSPSC has
commenced an investigation. As of December 31, 2019, with respect to the incident, the company incurred
operating costs of $17 million for property damage, clean-up and other response costs and invested $9 million in
capital and retirement costs. During the second quarter of 2020, the company accrued a $3 million liability related to
this matter.
In March 2019, the NYSPSC ordered CECONY to show cause why the NYSPSC should not commence a penalty
action and prudence proceeding against CECONY for alleged violations of gas operator qualification, performance,
and inspection requirements. At December 31, 2019, the company had an accrued regulatory liability related to this
matter of $10 million, and at March 31, 2020, the company accrued an additional regulatory liability of $5 million. In
April 2020, the NYSPSC approved a $15 million settlement agreement for the benefit of CECONY’s gas customers
between CECONY and NYSPSC staff related to this matter.
In July 2019, electric service was interrupted to approximately 72,000 CECONY customers on the west side of
Manhattan. Also in July 2019, electric service was interrupted to approximately 30,000 CECONY customers
primarily in the Flatbush area of Brooklyn. In November 2020, the NYSPSC issued an order in its proceedings
investigating these July 2019 power outages ordering CECONY to show cause why the NYSPSC should not
commence a review of the prudency of CECONY’s actions and/or omissions prior to, during, and after the July 2019
outages in Manhattan and Brooklyn, and pursue civil or administrative penalties in the amount of up to $24.8 million
for CECONY’s alleged failure to comply with certain requirements. The order further indicated that should the
NYSPSC confirm some or all of the apparent violations identified in the order or other orders issued by the NYSPSC
in the future in connection with this proceeding, and should such confirmed violations be classified as findings of
repeated violations of the Public Service Law or rules or regulations adopted pursuant thereto that demonstrate a
failure of CECONY to continue to provide safe and adequate service, the NYSPSC would be authorized to
commence a proceeding under Public Service Law Section 68(2) to revoke or modify CECONY’s certificate as it
relates to its service territory or any portion thereof.
In December 2020, CECONY filed a response to the NYSPSC order demonstrating why the NYSPSC should not
commence a penalty or prudence action against CECONY. CECONY stated that the NYSPSC order misapplied
Section 25-a of the Public Service Law by ignoring the reasonable compliance standard under the statute and
instead, was imposing a strict liability standard. For both outages, CECONY presented evidence that it either had
complied or reasonably complied with NYSPSC requirements. With respect to the Manhattan outage, CECONY
stated that a prudency proceeding was not justified because CECONY’s actions with respect to the Manhattan
outage were reasonable based on the information the company had at the time. With respect to the Brooklyn
outage, the company stated that the order failed to allege that improper company actions caused the outage. During
2019, CECONY recorded negative revenue adjustments associated with reliability performance provisions of
$15 million in aggregate primarily related to these outages. CECONY has not accrued any additional liability related
to this matter and is unable to determine the outcome of this proceeding at this time.
In August 2020, Tropical Storm Isaias caused significant damage to the Utilities’ electric distribution systems and
interrupted service to approximately 330,000 CECONY electric customers and approximately 200,000 O&R electric
customers. As of December 31, 2020, CECONY incurred costs for Tropical Storm Isaias of $153 million (including
$77 million of operation and maintenance expenses charged against a storm reserve pursuant to its electric rate
plan, $58 million of capital expenditures and $18 million of operation and maintenance expenses). As of December
31, 2020, O&R incurred costs for Tropical Storm Isaias of $34 million (including $26 million of operation and
maintenance expenses charged against a storm reserve pursuant to its New York electric rate plan and $8 million of
capital expenditures). The Utilities’ electric rate plans provide for recovery of operating costs and capital
expenditures under different provisions. The Utilities’ incremental operating costs attributable to storms are to be
deferred for recovery as a regulatory asset under their electric rate plans, while capital expenditures, up to specified
levels, are reflected in rates under their electric rate plans. In addition, as of December 31, 2020, CECONY and
O&R incurred costs of $7.5 million and $2.9 million, respectively, for food and medicine spoilage claims. The
provisions of the Utilities’ New York electric rate plans that impose negative revenue adjustments for operating
CON EDISON ANNUAL REPORT 2020
143
performance provide for exceptions for major storms and catastrophic events beyond the control of the companies,
including natural disasters such as hurricanes and floods.
In November 2020, the NYSPSC issued an order in its proceedings investigating the New York utilities’ preparation
for and response to Tropical Storm Isaias that ordered the Utilities to show cause why (i) civil penalties or
appropriate injunctive relief should not be imposed against CECONY (in the amount of up to $102.3 million relating
to 33 alleged violations) and against O&R (in the amount of up to $19 million relating to 38 alleged violations) to
remedy such noncompliance, and (ii) a prudence proceeding should not be commenced against the Utilities for
potentially imprudent expenditures of ratepayer funds related to the matter. The order stated that given the
continuing nature of the investigation of this matter by the New York State Department of Public Service (NYSDPS),
the NYSPSC may amend the order to include any subsequently determined apparent violations identified by the
NYSDPS. In addition, the order indicated that should the NYSPSC confirm some or all of the apparent violations
identified in the order or other orders issued by the NYSPSC in the future in connection with this proceeding, and
should such respective confirmed violations be classified as findings of repeated violations of the Public Service
Law or rules or regulations adopted pursuant thereto that demonstrate a failure of CECONY and/or O&R to continue
to provide safe and adequate service, the NYSPSC would be authorized to commence a proceeding under Public
Service Law Section 68(2) to revoke or modify CECONY’s and/or O&R’s certificate as it relates to its service
territory or any portion thereof.
In December 2020, CECONY and O&R filed responses to the NYSPSC order demonstrating why the NYSPSC
should not commence penalty or prudence actions against them. The Utilities stated that the NYSPSC orders
misapplied Section 25-a of the Public Service Law by ignoring the reasonable compliance standard under the
statute and instead, was imposing a strict liability standard. CECONY and O&R also presented evidence that the
order either misrepresented the applicable requirements or ignored that the Utilities were acting pursuant to
practices approved by the NYSPSC. Finally, CECONY and O&R stated that there was no basis to commence a
prudence proceeding because the Utilities acted reasonably based on the information available and the
circumstances at the time. The Utilities have not accrued a liability related to this matter and are unable to
determine the outcome of this proceeding at this time.
In October 2020, the NYSPSC issued an order instituting a proceeding to consider requiring New York’s large,
investor-owned utilities, including CECONY and O&R, to annually disclose what risks climate change poses to their
companies, investors and customers going forward. The order notes that some holding companies, including Con
Edison, already disclose climate change risks at the holding company level, but states that the NYSPSC believes
that climate-related risk disclosures should be issued specific to the operating companies in New York, such as
CECONY and O&R, and that such climate-related risk disclosures should be included annually with the utilities’
financial reports. In December 2020, CECONY and O&R, along with other large New York utilities, filed comments
supporting climate change risk disclosures in annual reports filed with the NYSPSC and recommended the use of
an industry-specific template.
In May 2020, the president of the United States issued the "Securing the United States Bulk-Power System"
executive order. The executive order declares threats to the bulk-power system by foreign adversaries constitute a
national emergency and prohibits the acquisition, importation, transfer or installation of certain bulk-power system
electric equipment that is sourced from foreign adversaries. The Department of Energy is expected to issue
regulations implementing the executive order. In January 2021, the president of the United States suspended the
May 2020 executive order for 90 days. The Companies are unable to predict the impact on them of regulations that
may be adopted regarding the bulk-power system.
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CON EDISON ANNUAL REPORT 2020
Regulatory Assets and Liabilities
Regulatory assets and liabilities at December 31, 2020 and 2019 were comprised of the following items:
(Millions of Dollars)
Regulatory assets
Unrecognized pension and other postretirement costs
Environmental remediation costs
Revenue taxes
Pension and other postretirement benefits deferrals
Property tax reconciliation
Deferred storm costs
MTA power reliability deferral
System peak reduction and energy efficiency programs
Deferred derivative losses
COVID - 19 Deferrals
Municipal infrastructure support costs
Brooklyn Queens demand management program
Meadowlands heater odorization project
Gate station upgrade project
Unamortized loss on reacquired debt
Preferred stock redemption
Recoverable REV demonstration project costs
Non-wire alternative projects
Workers’ compensation
Other
Regulatory assets – noncurrent
Deferred derivative losses
Recoverable energy costs
Regulatory assets – current
Total Regulatory Assets
Regulatory liabilities
Future income tax*
Allowance for cost of removal less salvage
TCJA net benefits
Net unbilled revenue deferrals
Net proceeds from sale of property
Pension and other postretirement benefit deferrals
System benefit charge carrying charge
Property tax refunds
BQDM and REV Demo reconciliations
Settlement of gas proceedings
Sales and use tax refunds
Earnings sharing - electric, gas and steam
Unrecognized other postretirement costs
Settlement of prudence proceeding
Workers’ compensation
Energy efficiency portfolio standard unencumbered funds
Other
Regulatory liabilities – noncurrent
Refundable energy costs
Deferred derivative gains
Revenue decoupling mechanism
Regulatory liabilities—current
Total Regulatory Liabilities
Con Edison
CECONY
2020
2019
2020
2019
$3,241
865
356
315
241
195
188
124
120
115
62
36
32
25
21
21
20
18
—
200
6,195
190
76
266
$6,461
$2,207
1,090
295
198
137
85
64
36
27
21
16
15
11
5
3
1
302
4,513
28
8
—
36
$2,541
732
321
71
219
77
248
131
83
—
75
39
35
19
28
22
21
14
3
180
4,859
128
—
128
$3,065
791
342
272
239
83
188
124
111
113
62
36
32
25
19
21
18
18
—
186
5,745
177
67
244
$4,987
$5,989
$2,426
989
471
199
173
75
48
45
27
10
8
22
9
8
—
122
195
4,827
44
34
24
102
$2,062
932
286
198
137
46
57
35
25
21
16
10
—
5
3
—
261
4,094
4
7
—
11
$2,403
647
308
47
210
—
248
130
76
—
75
39
35
19
26
22
19
14
3
166
4,487
113
—
113
$4,600
$2,275
843
454
199
173
46
44
45
26
10
8
15
—
8
—
118
163
4,427
12
34
17
63
$4,549
$4,929
$4,105
$4,490
* See "Federal Income Tax" in Note A, "Other Regulatory Matters," above, and Note L.
Unrecognized pension and other postretirement costs represent the net regulatory asset associated with the
accounting rules for retirement benefits. See Note A.
CON EDISON ANNUAL REPORT 2020
145
MTA power reliability deferral represents CECONY’s costs in excess of those reflected in its prior electric rate plan
to take certain actions relating to the electrical equipment that serves the Metropolitan Transportation Authority
(MTA) subway system. The company is recovering this regulatory asset pursuant to its current electric rate plan.
See footnote (d) to the CECONY - Electric table under “Rate Plans,” above.
Deferred storm costs represent response and restoration costs, other than capital expenditures, in connection with
Tropical Storm Isaias, Superstorm Sandy and other major storms that were deferred by the Utilities.
Settlement of prudence proceeding represents the remaining amount to be credited to customers pursuant to a
Joint Proposal, approved by the NYSPSC in April 2016, with respect to the prudence of certain CECONY
expenditures and related matters.
Settlement of gas proceedings represents the amount to be credited to customers pursuant to a settlement
agreement approved by the NYSPSC in February 2017 related to CECONY’s practices of qualifying persons to
perform plastic fusions on gas facilities and alleged violations of gas safety violations identified by the NYSPSC staff
in its investigation of a March 2014 Manhattan explosion and fire (see Note H).
COVID - 19 Deferrals represents both the amount to be collected from customers related to the Emergency
Summer Cooling Credits program for CECONY and amounts related to the increase in the allowance for
uncollectible accounts resulting from the COVID-19 pandemic and New York on PAUSE and related executive
orders, for electric and gas operations for CECONY and electric operations for O&R.
The NYSPSC has authorized CECONY to accrue unbilled electric, gas and steam revenues. CECONY has deferred
the net margin on the unbilled revenues for the future benefit of customers by recording a regulatory liability of $198
million and $199 million at December 31, 2020 and 2019, respectively, for the difference between the unbilled
revenues and energy cost liabilities.
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.
In general, the Utilities are receiving or being credited with a return on their regulatory assets for which a cash
outflow has been made ($1,696 million and $1,188 million for Con Edison, and $1,509 and $1,054 million for
CECONY at December 31, 2020 and 2019, respectively). Regulatory liabilities are treated in a consistent manner.
The Other Customer-Provided Capital rate for the years ended December 31, 2020 and 2019 was 2.65 percent and
4.2 percent, respectively. The recognition of the return on regulatory assets is determined by the Utilities’ rate plans
or orders issued by state regulators.
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 December 31, 2020 and 2019, regulatory assets for Con
Edison and CECONY that did not earn a return consisted of the following items:
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CON EDISON ANNUAL REPORT 2020
Regulatory Assets Not Earning a Return
(Millions of Dollars)
Unrecognized and other postretirement costs
Environmental remediation costs
Revenue taxes
Deferred derivative losses
Workers' compensation
Other
Deferred derivative losses - current
Total
Con Edison
CECONY
2020
$3,241
855
336
120
—
24
190
4,766
2019
$2,541
727
296
83
3
21
128
3,799
2020
$3,065
781
323
111
—
24
177
4,481
2019
$2,403
647
285
76
3
20
112
3,546
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 pursuant to NYSPSC
policy.
The deferral for revenue taxes represent the 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.
CON EDISON ANNUAL REPORT 2020
147
Note C – Capitalization
Common Stock
Con Edison is authorized to issue 500,000,000 shares of its common stock and CECONY is authorized to issue
340,000,000 of its common stock. At December 31, 2020 and 2019, 342,297,534 and 332,629,597 shares,
respectively, of Con Edison common stock were outstanding. At December 31, 2020 and 2019, 235,488,094 million
shares of CECONY common stock were outstanding, all of which were owned by Con Edison. At December 31,
2020 and 2019, Con Edison had 23,210,700 treasury shares, including 21,976,200 shares of Con Edison stock that
CECONY purchased prior to 2001 in connection with Con Edison’s stock repurchase plan. CECONY presents in the
financial statements the cost of the Con Edison stock it owns as a reduction of common shareholder’s equity.
In May 2019, Con Edison entered into a forward sale agreement relating to 5,800,000 shares of its common stock.
In June 2019, the company issued 4,750,000 shares for $400 million upon physical settlement of shares subject to
the forward sale agreement. In January 2020, the company issued 1,050,000 shares for $88 million upon physical
settlement of the remaining shares subject to the forward sale agreement.
In December 2020, Con Edison issued 7,200,000 shares of its common stock resulting in net proceeds of
approximately $553 million, after issuance expenses. The net proceeds from the sale of the common shares,
together with the net proceeds from the sale of $650 million aggregate principal amount of 0.65 percent debentures
due 2023, were used to prepay in full a $820 million July 2020 term loan. The remaining net proceeds from the sale
of the common shares were invested by Con Edison in its subsidiaries, principally CECONY and O&R, and for other
general corporate purposes.
Capitalization of Con Edison
Con Edison's capitalization shown on its Consolidated Statement of Capitalization includes its outstanding common
stock and long-term debt and the outstanding long-term debt of the Utilities and the Clean Energy Businesses.
Dividends
In accordance with NYSPSC requirements, the dividends that the Utilities generally pay are limited to not more than
100 percent of their respective income available for dividends calculated on a two–year rolling average basis. See
Note T. 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.
Long-term Debt
Long-term debt maturing in the period 2021-2025 is as follows:
(Millions of Dollars)
Con Edison
CECONY
2021
2022
2023
2024
2025
$1,967
437
966
385
315
$640
—
—
250
—
CECONY has issued $450 million of tax–exempt debt through the New York State Energy Research and
Development Authority (NYSERDA) that currently bear interest at a rate determined weekly and is subject to tender
by bondholders for purchase by the company.
The carrying amounts and fair values of long-term debt at December 31, 2020 and 2019 are:
(Millions of Dollars)
2020
2019
Long-Term Debt (including current portion) (a)
Con Edison
CECONY
Carrying
Amount
$22,349
$16,789
Fair
Value
$26,808
$20,974
Carrying
Amount
$19,973
$14,964
Fair
Value
$22,738
$17,505
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CON EDISON ANNUAL REPORT 2020
(a) Amounts shown are net of unamortized debt expense and unamortized debt discount of $215 million and $176 million for Con Edison and
CECONY, respectively, as of December 31, 2020 and $178 million and $151 million for Con Edison and CECONY, respectively, as of
December 31, 2019.
The fair values of the Companies' long-term debt have been estimated primarily using available market information
and at December 31, 2020 are classified as Level 2 (see Note Q).
Significant Debt Covenants
The significant debt covenants under the financing arrangements for the Companies' debentures and Con Edison's
notes and February 2019 $825 million ($675 million of which was outstanding at December 31, 2020) variable-rate
term loan that matures in June 2021 include obligations to pay principal and interest when due and covenants not to
consolidate with or merge into any other entity unless certain conditions are met. In addition, the notes include a
covenant that the company shall continue its utility business in New York City, the term loan includes a covenant
that, subject to certain exceptions, the company and its subsidiaries will not mortgage, lien, pledge or otherwise
encumber its assets, and the notes and term loan provide that the company shall not permit its ratio of consolidated
debt to consolidated total capital to exceed certain amounts (0.675 to 1 for the notes and 0.65 for the term loan) and
include cross default provisions with respect to the failure by the company or any material subsidiary to make one or
more payments in respect of material financial obligations (in excess of an aggregate $100 million of debt for the
notes and $150 million of debt or derivative obligations for the term loan, excluding non-recourse debt) of the
company (or any of its material subsidiaries, in the case of the notes) and the occurrence of an event or condition
which results in the acceleration of the maturity of any material debt (in excess of an aggregate $100 million for the
notes and $150 million for the term loan, not including non-recourse debt) of the company (or any of its material
subsidiaries, in the case of the notes) or enables the holders of such debt to accelerate the maturity thereof. The
Companies' debentures have no cross default provisions. The tax–exempt financing arrangements of CECONY are
subject to covenants for the debentures discussed above and the covenants discussed below. The Companies were
in compliance with their significant debt covenants at December 31, 2020.
The tax-exempt financing arrangements involved the issuance of uncollateralized promissory notes of CECONY to
NYSERDA in exchange for the net proceeds of a like amount of tax–exempt bonds with substantially the same
terms sold to the public by NYSERDA. The tax-exempt financing arrangements include covenants with respect to
the tax–exempt status of the financing, including covenants with respect to the use of the facilities financed. The
arrangements include provisions for the maintenance of liquidity and credit facilities, the failure to comply with which
would, except as otherwise provided, constitute an event of default for the debt to which such provisions applied.
The failure to comply with debt covenants would, except as otherwise provided, constitute an event of default for the
debt to which such provisions applied. If an event of default were to occur, the principal and accrued interest on the
debt to which such event of default applied and, in the case of the Con Edison notes, a make-whole premium might
and, in the case of certain events of default would, become due and payable immediately.
The liquidity and credit facilities currently in effect for the tax–exempt financing include covenants that the ratio of
debt to total capital of CECONY will not at any time exceed 0.65 to 1 and that, subject to certain exceptions,
CECONY will not mortgage, lien, pledge or otherwise encumber its assets. Certain of the facilities also include as
events of default, defaults in payments of other debt obligations in excess of specified levels ($150 million or $100
million, depending on the facility).
Note D – Short-Term Borrowing
In December 2016, Con Edison and the Utilities entered into a credit agreement (Credit Agreement), under which
banks are committed to provide loans and letters of credit on a revolving credit basis. The Credit Agreement, as
amended in 2019, expires in December 2023. There is a maximum of $2,250 million of credit available through
December 2022 and $2,200 million of credit available from then through December 2023. The full amount is
available to CECONY and $1,000 million (subject to increase up to $1,500 million) is available to Con Edison,
including up to $1,200 million of letters of credit. The Credit Agreement supports the Companies’ commercial paper
programs. The Companies have not borrowed under the Credit Agreement. At December 31, 2020, Con Edison had
$1,705 million of commercial paper outstanding, of which $1,660 million was outstanding under CECONY’s
program. The weighted average interest rate at December 31, 2020 was 0.3 percent for both Con Edison and
CECONY. At December 31, 2019, Con Edison had $1,692 million of commercial paper outstanding of which $1,137
million was outstanding under CECONY’s program. The weighted average interest rate at December 31, 2019 was
2.0 percent for both Con Edison and CECONY.
CON EDISON ANNUAL REPORT 2020
149
At December 31, 2020 and 2019, no loans were outstanding under the Credit Agreement. An immaterial amount of
letters of credit were outstanding under the Credit Agreement as of December 31, 2020 and 2019.
The banks’ commitments under the 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, the
banks may terminate their commitments with respect to that company, declare any amounts owed by that company
under the Credit Agreement immediately due and payable and 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 (at
December 31, 2020 this ratio was 0.53 to 1 for Con Edison and 0.56 to 1 for CECONY); that company having liens
on its assets in an aggregate amount exceeding five percent of its consolidated total capital, 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; the occurrence of an event or condition which results in the acceleration of the
maturity of any material debt (in excess of an aggregate $150 million of debt other than non-recourse debt) 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. The Companies were in compliance
with their covenants at December 31, 2020.
In December 2020, a subsidiary of the Clean Energy Businesses borrowed $165 million under a $613 million
variable-rate construction loan facility that matures no later than November 2021, (the Construction Loan Facility)
and that is secured by and was used to fund construction costs for three of the company’s solar electric production
projects. The banks’ commitments under the Construction Loan Facility are subject to certain conditions, including,
among other customary conditions, demonstration of construction progress, that there be no event of default and no
material adverse effect. The subsidiary of the Clean Energy Businesses was in compliance with its covenants at
December 31, 2020.
See Note T for information about short-term borrowing between related parties.
Note E – Pension Benefits
Con Edison maintains a tax-qualified, non-contributory pension plan that covers substantially all employees of
CECONY, O&R and Con Edison Transmission and certain employees of the Clean Energy Businesses. The plan is
designed to comply with the Internal Revenue Code and the Employee Retirement Income Security Act of 1974.
Con Edison also maintains additional non–qualified supplemental pension plans.
Total Periodic Benefit Cost
The components of the Companies’ total periodic benefit costs for 2020, 2019 and 2018 were as follows:
(Millions of Dollars)
Service cost – including administrative expenses
Interest cost on projected benefit obligation
Expected return on plan assets
Recognition of net actuarial loss
Recognition of prior service credit
TOTAL PERIODIC BENEFIT COST
Cost capitalized
Reconciliation to rate level
Total expense recognized
Con Edison
CECONY
2020
$293
549
(1,034)
699
(16)
$491
(130)
(250)
$111
2019
$250
601
(988)
518
(17)
$364
(108)
(15)
$241
2018
$290
561
(1,033)
688
(17)
$489
(127)
(92)
$270
2020
$274
515
(980)
661
(19)
$451
(123)
(239)
$89
2019
$232
564
(936)
492
(19)
$333
(102)
(12)
$219
2018
$272
525
(979)
651
(19)
$450
(119)
(100)
$231
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 Companies adopted ASU 2017-07 beginning on January 1, 2018. The
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CON EDISON ANNUAL REPORT 2020
guidance requires that components of net periodic benefit cost other than service cost be presented outside of
operating income on consolidated income statements, and that only the service cost component is eligible for
capitalization. Accordingly, the service cost components are included in the line "Other operations and maintenance"
and the non-service cost components are included in the line “Other deductions” in the Companies' consolidated
income statements. In August 2018, the FASB issued amendments to the guidance for retirement benefits through
ASU 2018-14, “Compensation-Retirement Benefits (Subtopic 715-20): Disclosure Framework - Changes to the
Disclosure Requirements for Defined Benefit Plans." The guidance requires disclosure of the weighted-average
interest crediting rate used for cash balance plans for all periods presented, and a narrative description of significant
changes in the benefit obligation. The Companies adopted ASU 2018-14 for fiscal years ending after December 15,
2020 and the required disclosures are included below and, as applicable, in Note F.
Funded Status
The funded status at December 31, 2020, 2019 and 2018 was as follows:
(Millions of Dollars)
2020
2019
2018
2020
2019
2018
Con Edison
CECONY
CHANGE IN PROJECTED BENEFIT OBLIGATION
Projected benefit obligation at beginning of year
$16,792
$14,449
$15,536
$15,750
$13,542
$14,567
Service cost – excluding administrative expenses
Interest cost on projected benefit obligation
Net actuarial loss/(gain)
Plan amendments
Benefits paid
288
549
2,281
—
(945)
245
601
286
561
2,191
(1,219)
269
515
2,154
228
564
267
525
2,076
(1,159)
15
(709)
—
—
—
(715)
(867)
(660)
—
(658)
PROJECTED BENEFIT OBLIGATION AT END OF YEAR
$18,965
$16,792
$14,449
$17,821
$15,750
$13,542
CHANGE IN PLAN ASSETS
Fair value of plan assets at beginning of year
$15,608
$13,450
$14,274
$14,790
$12,744
$13,519
Actual return on plan assets
Employer contributions
Benefits paid
Administrative expenses
FAIR VALUE OF PLAN ASSETS AT END OF YEAR
FUNDED STATUS
Unrecognized net loss
Unrecognized prior service costs/(credits)
Accumulated benefit obligation
1,927
475
(945)
(43)
$17,022
$(1,943)
$3,330
(156)
16,768
2,556
350
(709)
(39)
$15,608
$(1,184)
$2,604
(173)
15,015
(536)
473
(715)
(46)
$13,450
$(999)
$2,464
(205)
13,030
1,830
435
(867)
(41)
$16,147
$(1,674)
$3,145
(183)
15,676
2,425
318
(660)
(37)
(507)
434
(658)
(44)
$14,790
$12,744
$(960)
$2,466
(202)
14,010
$(798)
$2,338
(222)
12,161
The increase in the pension funded status liability at December 31, 2020 for Con Edison and CECONY of $759
million and $714 million, respectively, compared with December 31, 2019, was primarily due to an increase in the
plan's projected benefit obligation as a result of a decrease in the discount rate. The increase in the pension funded
status liability at December 31, 2019 for Con Edison and CECONY of $185 million and $162 million, respectively,
compared with December 31, 2018, was primarily due to an increase in the plan’s projected benefit obligation as a
result of a decrease in the discount rate, partially offset by an increase in plan assets as a result of the actual return
on plan assets. See below for further information on the change in the discount rate and determination of the
discount rate assumption. For Con Edison, the 2020 increase in pension funded status liability corresponds with an
increase to regulatory assets of $734 million for unrecognized net losses and unrecognized prior service costs
associated with the Utilities consistent with the accounting rules for regulated operations, a debit to OCI of $8 million
(net of taxes) for the unrecognized net losses, and an immaterial change to OCI (net of taxes) for the unrecognized
prior service costs associated with certain employees of the Clean Energy Businesses, Con Edison Transmission,
and RECO who previously worked for the Utilities.
For CECONY, the increase in the pension funded status liability at December 31, 2020 corresponds with an
increase to regulatory assets of $696 million for unrecognized net losses and unrecognized prior service costs
consistent with the accounting rules for regulated operations, and also a debit to OCI of $2 million (net of taxes) for
unrecognized net losses, and an immaterial change to OCI (net of taxes) for the unrecognized prior service costs
associated with certain employees of the Clean Energy Businesses and Con Edison Transmission who previously
worked for CECONY.
CON EDISON ANNUAL REPORT 2020
151
At December 31, 2020 and 2019, Con Edison’s investments included $465 million and $397 million, respectively,
held in external trust accounts for benefit payments pursuant to the supplemental retirement plans. Included in
these amounts for CECONY were $439 million and $371 million, respectively. See Note Q. The accumulated benefit
obligations for the supplemental retirement plans for Con Edison and CECONY were $414 million and $377 million
as of December 31, 2020, respectively, and $395 million and $360 million as of December 31, 2019, respectively.
Assumptions
The actuarial assumptions were as follows:
Weighted-average assumptions used to determine benefit obligations at December 31:
Discount rate
Interest crediting rate for cash balance plan
Rate of compensation increase
CECONY
O&R
Weighted-average assumptions used to determine net periodic benefit cost for the years
ended December 31:
Discount rate
Interest crediting rate for cash balance plan
Expected return on plan assets
Rate of compensation increase
CECONY
O&R
2020
2019
2018
2.55 %
3.00 %
3.80 %
3.20 %
3.35 %
3.30 %
7.00 %
3.80 %
3.20 %
3.35 %
3.30 %
3.80 %
3.20 %
4.25 %
4.00 %
7.00 %
4.25 %
4.00 %
4.25 %
4.00 %
4.25 %
4.00 %
3.70 %
4.10 %
7.50 %
4.25 %
4.00 %
The expected return assumption reflects anticipated returns on the plan’s current and future assets. The
Companies’ expected return was based on an evaluation of the current environment, market and economic outlook,
relationships between the economy and asset class performance patterns, and recent and long-term trends in asset
class performance. The projections were based on the plan’s target asset allocation.
Discount Rate Assumption
To determine the assumed discount rate, the Companies use a model that produces a yield curve based on yields
on selected highly rated (Aa or higher by either Moody’s or S&P) corporate bonds. Bonds with insufficient liquidity,
bonds with questionable pricing information and bonds that are not representative of the overall market are
excluded from consideration. For example, the bonds used in the model cannot be callable (with the exception of
"make whole" callable bonds), and the amount of the bond issue outstanding must be in excess of $50 million. The
spot rates defined by the yield curve and the plan’s projected benefit payments are used to develop a weighted
average discount rate.
Expected Benefit Payments
Based on current assumptions, the Companies expect to make the following benefit payments over the next ten
years:
(Millions of Dollars)
Con Edison
CECONY
2021
$764
706
2022
$776
718
2023
$793
733
2024
$807
747
2025
$821
760
2026-2030
$4,295
3,992
Expected Contributions
Based on estimates as of December 31, 2020, the Companies expect to make contributions to the pension plans
during 2021 of $480 million (of which $441 million is to be made by CECONY). The Companies’ policy is to fund the
total periodic benefit cost of the qualified plan to the extent tax deductible and to also contribute to the non-qualified
supplemental plans.
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CON EDISON ANNUAL REPORT 2020
Plan Assets
The asset allocations for the pension plan at the end of 2020, 2019 and 2018, and the target allocation for 2021 are
as follows:
Asset Category
Equity Securities
Debt Securities
Real Estate
Total
Target
Allocation Range
Plan Assets at December 31,
2021
45% - 55%
33% - 43%
10% - 14%
100%
2020
51 %
38 %
11 %
100 %
2019
51 %
38 %
11 %
100 %
2018
51 %
39 %
10 %
100 %
Con Edison has established a pension trust for the investment of assets to be used for the exclusive purpose of
providing retirement benefits to participants and beneficiaries and payment of plan expenses.
Pursuant to resolutions adopted by Con Edison’s Board of Directors, the Management Development and
Compensation Committee of the Board of Directors (the Committee) has general oversight responsibility for Con
Edison’s pension and other employee benefit plans. The pension plan’s named fiduciaries have been granted the
authority to control and manage the operation and administration of the plans, including overall responsibility for the
investment of assets in the trust and the power to appoint and terminate investment managers.
The investment objectives of the Con Edison pension plan are to maintain a level and form of assets adequate to
meet benefit obligations to participants, to achieve the expected long-term total return on the trust assets within a
prudent level of risk and maintain a level of volatility that is not expected to have a material impact on the company’s
expected contribution and expense or the company’s ability to meet plan obligations. The assets of the plan have no
significant concentration of risk in one country (other than the United States), industry or entity.
The strategic asset allocation is intended to meet the objectives of the pension plan by diversifying its funds across
asset classes, investment styles and fund managers. An asset/liability study typically is conducted every few years
to determine whether the current strategic asset allocation continues to represent the appropriate balance of
expected risk and reward for the plan to meet expected liabilities. Each study considers the investment risk of the
asset allocation and determines the optimal asset allocation for the plan. The target asset allocation for 2021
reflects the results of such a study conducted in 2018.
Individual fund managers operate under written guidelines provided by Con Edison, which cover such areas as
investment objectives, performance measurement, permissible investments, investment restrictions, trading and
execution, and communication and reporting requirements. Con Edison management regularly monitors, and the
named fiduciaries review and report to the Committee regarding, asset class performance, total fund performance,
and compliance with asset allocation guidelines. Management changes fund managers and rebalances the portfolio
as appropriate. At the direction of the named fiduciaries, such changes are reported to the Committee.
Assets measured at fair value on a recurring basis are summarized below as defined by the accounting rules for fair
value measurements (see Note Q).
CON EDISON ANNUAL REPORT 2020
153
The fair values of the pension plan assets at December 31, 2020 by asset category are as follows:
(Millions of Dollars)
Investments within the fair value hierarchy
U.S. Equity (a)
International Equity (b)
U.S. Government Issued Debt (c)
Corporate Bonds Debt (d)
Structured Assets Debt (e)
Other Fixed Income Debt (f)
Cash and Cash Equivalents (g)
Total investments within the fair value hierarchy
Investments measured at NAV per share (m)
Private Equity (h)
Real Estate (i)
Hedge Funds (j)
Level 1
Level 2
Total
$4,202
3,693
—
—
—
—
51
$—
—
1,424
3,535
188
1,067
408
$4,202
3,693
1,424
3,535
188
1,067
459
$7,946
$6,622
$14,568
635
1,880
292
$2,807
(213)
(41)
$(254)
$17,121
(99)
$17,022
Total investments valued using NAV per share
Funds for retiree health benefits (k)
Funds for retiree health benefits measured at NAV per share (k)(m)
Total funds for retiree health benefits
(116)
(97)
Investments (excluding funds for retiree health benefits)
$7,830
$6,525
Pending activities (l)
Total fair value of plan net assets
(a) U.S. Equity includes both actively- and passively-managed assets with investments in domestic equity index funds and actively-managed
small-capitalization equities.
International Equity includes international equity index funds and actively-managed international equities.
(b)
(c) U.S. Government Issued Debt includes agency and treasury securities.
(d) Corporate Bonds Debt consists of debt issued by various corporations.
(e) Structured Assets Debt includes commercial-mortgage-backed securities and collateralized mortgage obligations.
(f) Other Fixed Income Debt includes municipal bonds, sovereign debt and regional governments.
(g) Cash and Cash Equivalents include short term investments, money markets, foreign currency and cash collateral.
(h) Private Equity consists of global equity funds that are not exchange-traded.
(i) Real Estate investments include real estate funds based on appraised values that are broadly diversified by geography and property type.
(j) Hedge Funds are within a commingled structure which invests in various hedge fund managers who can invest in all financial instruments.
(k) The Companies set aside funds for retiree health benefits through a separate account within the pension trust, as permitted under
Section 401(h) of the Internal Revenue Code of 1986, as amended. In accordance with the Code, the plan’s investments in the 401(h)
account may not be used for, or diverted to, any purpose other than providing health benefits for retirees. The net assets held in the 401(h)
account are calculated based on a pro-rata percentage allocation of the net assets in the pension plan. The related obligations for health
benefits are not included in the pension plan’s obligations and are included in the Companies’ other postretirement benefit obligation. See
Note F.
Pending activities include security purchases and sales that have not settled, interest and dividends that have not been received and
reflects adjustments for available estimates at year end.
In accordance with ASU 2015-07, Fair Value Measurements (Topic 820): Disclosures for Investments in Certain Entities That Calculate Net
Asset Value per Share (or its equivalent), certain investments that are measured at fair value using the net asset value per share (or its
equivalent) practical expedient have not been classified in the fair value hierarchy.
(l)
(m)
154
CON EDISON ANNUAL REPORT 2020
The fair values of the pension plan assets at December 31, 2019 by asset category are as follows:
(Millions of Dollars)
Investments within the fair value hierarchy
U.S. Equity (a)
International Equity (b)
U.S. Government Issued Debt (c)
Corporate Bonds Debt (d)
Structured Assets Debt (e)
Other Fixed Income Debt (f)
Cash and Cash Equivalents (g)
Total investments within the fair value hierarchy
Investments measured at NAV per share (m)
Private Equity (h)
Real Estate (i)
Hedge Funds (j)
Level 1
Level 2
Total
$3,652
3,354
—
—
—
—
—
$—
—
1,496
3,260
173
955
326
$3,652
3,354
1,496
3,260
173
955
326
$7,006
$6,210
$13,216
555
1,806
270
$2,631
(208)
(42)
$(250)
$15,597
11
$15,608
Total investments valued using NAV per share
Funds for retiree health benefits (k)
Funds for retiree health benefits measured at NAV per share (k)(m)
Total funds for retiree health benefits
(110)
(98)
Investments (excluding funds for retiree health benefits)
$6,896
$6,112
Pending activities (l)
Total fair value of plan net assets
(a) - (m) Reference is made to footnotes (a) through (m) in the above table of pension plan assets at December 31, 2020 by asset category.
The Companies also offer a defined contribution savings plan that covers substantially all employees and made
contributions to the plan as follows:
(Millions of Dollars)
Con Edison
CECONY
For the Years Ended December 31,
2020
$52
43
2019
$49
42
2018
$45
39
Note F – Other Postretirement Benefits
The Utilities and Con Edison Transmission currently have contributory comprehensive hospital, medical and
prescription drug programs for eligible retirees, their dependents and surviving spouses.
CECONY also has a contributory life insurance program for bargaining unit employees and provides basic life
insurance benefits up to a specified maximum at no cost to certain retired management employees. O&R has a
non-contributory life insurance program for retirees. Certain employees of the Clean Energy Businesses and Con
Edison Transmission are eligible to receive benefits under these programs.
Total Periodic Benefit Cost
The components of the Companies’ total periodic postretirement benefit costs for 2020, 2019 and 2018 were as
follows:
CON EDISON ANNUAL REPORT 2020
155
(Millions of Dollars)
Service cost
Interest cost on accumulated other postretirement benefit
obligation
Expected return on plan assets
Recognition of net actuarial loss/(gain)
Recognition of prior service credit
TOTAL PERIODIC POSTRETIREMENT BENEFIT
COST/(CREDIT)
Cost capitalized
Reconciliation to rate level
Total credit recognized
Con Edison
CECONY
2020
$21
37
(66)
37
(3)
$26
(9)
(17)
$—
2019
$18
44
(66)
(9)
(2)
$(15)
(7)
12
$(10)
2018
$20
42
(73)
8
(6)
$(9)
(8)
8
($9)
2020
$16
31
(54)
36
(2)
$27
(7)
(25)
$(5)
2019
$13
36
(54)
(10)
(2)
$(17)
(5)
7
$(15)
2018
$14
34
(63)
3
(2)
$(14)
(6)
9
($11)
For information about the adoption of ASU 2017-07, “Compensation-Retirement Benefits (Topic 715): Improving the
Presentation of Net Periodic Pension Cost and Net Periodic Postretirement Benefit Cost,” and ASU 2018-14,
“Compensation-Retirement Benefits (Subtopic 715-20): Disclosure Framework - Changes to the Disclosure
Requirements for Defined Benefit Plans," see Note E.
Funded Status
The funded status of the programs at December 31, 2020, 2019 and 2018 were as follows:
(Millions of Dollars)
CHANGE IN BENEFIT OBLIGATION
Con Edison
CECONY
2020
2019
2018
2020
2019
2018
Benefit obligation at beginning of year
$1,357
$1,114
$1,219
$1,154
$913
$985
Service cost
Interest cost on accumulated postretirement benefit
obligation
Amendments
Net actuarial loss/(gain)
21
37
—
74
18
44
(14)
264
20
42
—
(70)
16
31
—
63
13
36
—
252
Benefits paid and administrative expenses, net of
subsidies
Participant contributions
(117)
53
(110)
41
BENEFIT OBLIGATION AT END OF YEAR
$1,425
$1,357
CHANGE IN PLAN ASSETS
Fair value of plan assets at beginning of year
Actual return on plan assets
Employer contributions
Employer group waiver plan subsidies
Participant contributions
Benefits paid
FAIR VALUE OF PLAN ASSETS AT END OF YEAR
FUNDED STATUS
Unrecognized net loss/(gain)
Unrecognized prior service costs
$1,026
142
7
20
53
(133)
$1,115
$(310)
$115
(16)
$885
198
7
23
40
(127)
$1,026
$(331)
$155
(19)
(135)
38
$1,114
$1,039
(66)
6
34
37
(165)
$885
$(229)
$14
(8)
(107)
52
$1,209
$872
117
4
19
51
(123)
$940
$(269)
$114
(1)
(100)
40
$1,154
$759
165
6
22
40
(120)
$872
$(282)
$149
(3)
14
34
—
(32)
(125)
37
$913
$893
(54)
6
32
37
(155)
$759
$(154)
$(2)
(5)
The decrease in the other postretirement benefits funded status liability at December 31, 2020 for Con Edison and
CECONY of $21 million and $13 million, respectively, compared with December 31, 2019, was primarily due to an
increase in the fair value of plan assets as a result of the actual return on plan assets, partially offset by an increase
in the plans' projected benefit obligation as a result of a decrease in the discount rate. See below for further
information on the change in the discount rate and see Note E for determination of the discount rate assumption.
The increase in the other postretirement benefits funded status liability at December 31, 2019 for Con Edison and
CECONY of $102 million and $128 million, respectively, compared with December 31, 2018, was primarily due to an
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CON EDISON ANNUAL REPORT 2020
increase in the plans' projected benefit obligation as a result of an increase in net actuarial loss, partially offset by an
increase in plan assets as a result of the actual return on plan assets.
For Con Edison, the decrease in funded status liability at December 31, 2020 corresponds with a net decrease to
regulatory assets of $36 million for unrecognized net losses and unrecognized prior service costs associated with
the Utilities consistent with the accounting rules for regulated operations, a credit to OCI of $2 million (net of taxes)
for the unrecognized net losses and an immaterial change to OCI for the unrecognized prior service costs
associated with the Clean Energy Businesses, Con Edison Transmission, and RECO.
For CECONY, the decrease in funded status liability at December 31, 2020 corresponds with a decrease to
regulatory assets of $33 million for unrecognized net losses and the unrecognized prior service costs associated
with the company consistent with the accounting rules for regulated operations, and immaterial changes to OCI for
the unrecognized net losses and the unrecognized prior service costs associated with eligible employees of the
Clean Energy Businesses and Con Edison Transmission who previously worked for CECONY.
Assumptions
The actuarial assumptions were as follows:
Weighted-average assumptions used to determine benefit obligations at December 31:
Discount Rate
CECONY
O&R
Weighted-average assumptions used to determine net periodic benefit cost for the years
ended December 31:
Discount Rate
CECONY
O&R
Expected Return on Plan Assets
2020
2019
2018
2.25 %
2.55 %
3.10 %
3.35 %
4.15 %
4.30 %
3.10 %
3.35 %
6.80 %
4.15 %
4.30 %
6.80 %
3.55 %
3.70 %
7.50 %
Refer to Note E for descriptions of the basis for determining the expected return on assets, investment policies and
strategies and the assumed discount rate.
The health care cost trend rate used to determine net periodic benefit cost for the years ended December 31, 2020,
2019 and 2018 was 5.20 percent, 5.40 percent and 5.60 percent, respectively, which was assumed to decrease
gradually to 4.50 percent by 2024 and remain at that level thereafter. The health care cost trend rate used to
determine benefit obligations as of December 31, 2020, 2019 and 2018 was 7.04 percent, 5.20 percent and 5.40
percent, respectively, which is assumed to decrease gradually to 4.50 percent by 2034 and remain at that level
thereafter.
Expected Benefit Payments
Based on current assumptions, the Companies expect to make the following benefit payments over the next ten
years, net of receipt of governmental subsidies and participant contributions:
(Millions of Dollars)
Con Edison
CECONY
2021
$84
76
2022
$84
75
2023
$84
75
2024
$84
75
2025
2026-2030
$84
75
$409
358
Expected Contributions
Based on estimates as of December 31, 2020, Con Edison and CECONY expect to make a contribution of $6
million (of which $3 million is expected to be made by CECONY) to the other postretirement benefit plans in 2021.
The Companies’ policy is to fund the total periodic benefit cost of the plans to the extent tax deductible.
CON EDISON ANNUAL REPORT 2020
157
Plan Assets
The asset allocations for CECONY’s other postretirement benefit plans at the end of 2020, 2019 and 2018, and the
target allocation for 2021 are as follows:
Asset Category
Equity Securities
Debt Securities
Total
Target Allocation Range
Plan Assets at December 31,
2021
42%-80%
20%-58%
100%
2020
54 %
46 %
100 %
2019
54 %
46 %
100 %
2018
52 %
48 %
100 %
Con Edison has established postretirement health and life insurance benefit plan trusts for the investment of assets
to be used for the exclusive purpose of providing other postretirement benefits to participants and beneficiaries.
Refer to Note E for a discussion of Con Edison’s investment policy for its benefit plans.
The fair values of the plans' assets at December 31, 2020 by asset category as defined by the accounting rules for
fair value measurements (see Note Q) are as follows:
(Millions of Dollars)
Equity (a)
Other Fixed Income Debt (b)
Cash and Cash Equivalents (c)
Total investments
Funds for retiree health benefits (d)
Investments (including funds for retiree health benefits)
Funds for retiree health benefits measured at net asset value (d)(e)
Pending activities (f)
Total fair value of plan net assets
Level 1
Level 2
$—
—
—
$—
116
$116
$448
367
27
$842
97
$939
Total
$448
367
27
$842
213
$1,055
41
19
$1,115
(a) Equity includes a passively managed commingled index fund benchmarked to the MSCI All Country World Index.
(b) Other Fixed Income Debt includes a passively managed commingled index fund benchmarked to the Bloomberg Barclays U.S. Long Credit
Index and an active separately managed fund indexed to the Bloomberg Barclays U.S. Long Credit Index.
(c) Cash and Cash Equivalents include short-term investments and money markets.
(d) The Companies set aside funds for retiree health benefits through a separate account within the pension trust, as permitted under
Section 401(h) of the Internal Revenue Code of 1986, as amended. In accordance with the Code, the plan’s investments in the 401(h)
account may not be used for, or diverted to, any purpose other than providing health benefits for retirees. The net assets held in the 401(h)
account are calculated based on a pro-rata percentage allocation of the net assets in the pension plan. The related obligations for health
benefits are not included in the pension plan’s obligations and are included in the Companies’ other postretirement benefit obligation. See
Note E.
In accordance with ASU 2015-07, Fair Value Measurements (Topic 820): Disclosures for Investments in Certain Entities That Calculate Net
Asset Value per Share (or its equivalent), certain investments that are measured at fair value using the net asset value per share (or its
equivalent) practical expedient have not been classified in the fair value hierarchy.
(e)
(f) Pending activities include security purchases and sales that have not settled, interest and dividends that have not been received, and
reflects adjustments for available estimates at year-end.
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CON EDISON ANNUAL REPORT 2020
The fair values of the plans' assets at December 31, 2019 by asset category (see Note Q) are as follows:
(Millions of Dollars)
Equity (a)
Other Fixed Income Debt (b)
Cash and Cash Equivalents (c)
Total investments
Funds for retiree health benefits (d)
Investments (including funds for retiree health benefits)
Funds for retiree health benefits measured at net asset value (d)(e)
Pending activities (f)
Total fair value of plan net assets
Level 1
Level 2
$—
—
—
$—
110
$110
$404
331
23
$758
98
$856
Total
$404
331
23
$758
208
$966
42
18
$1,026
(a) - (f) Reference is made to footnotes (a) through (f) in the above table of other postretirement benefit plan assets at December 31, 2020 by
asset category.
Note G – Environmental Matters
Superfund Sites
Hazardous substances, such as asbestos, polychlorinated biphenyls (PCBs) and coal tar, have been used or
generated in the course of operations of the Utilities and their predecessors and are present at sites and in facilities
and equipment they currently or previously owned, including sites at which gas was manufactured or stored.
The Federal Comprehensive Environmental Response, Compensation and Liability Act of 1980 and similar state
statutes (Superfund) impose joint and several liability, regardless of fault, upon generators of hazardous substances
for investigation and remediation costs (which include costs of demolition, removal, disposal, storage, replacement,
containment and monitoring) and natural resource damages. Liability under these laws can be material and may be
imposed for contamination from past acts, even though such past acts may have been lawful at the time they
occurred. The sites at which the Utilities have been asserted to have liability under these laws, including their
manufactured gas plant sites and any neighboring areas to which contamination may have migrated, are referred to
herein as “Superfund Sites.”
For Superfund Sites where there are other potentially responsible parties and the Utilities are not managing the site
investigation and remediation, the accrued liability represents an estimate of the amount the Utilities will need to pay
to investigate and, where determinable, discharge their related obligations. For Superfund Sites (including the
manufactured gas plant sites) for which one of the Utilities is managing the investigation and remediation, the
accrued liability represents an estimate of the company’s share of the undiscounted cost to investigate the sites
and, for sites that have been investigated in whole or in part, the cost to remediate the sites, if remediation is
necessary and if a reasonable estimate of such cost can be made. Remediation costs are estimated in light of the
information available, applicable remediation standards and experience with similar sites.
The accrued liabilities and regulatory assets related to Superfund Sites at December 31, 2020 and 2019 were as
follows:
(Millions of Dollars)
Accrued Liabilities:
Manufactured gas plant sites
Other Superfund Sites
Total
Regulatory assets
Con Edison
CECONY
2020
$752
105
$857
$865
2019
$640
94
$734
$732
2020
$676
104
$780
$791
2019
$561
93
$654
$647
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
CON EDISON ANNUAL REPORT 2020
159
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 at December 31, 2020 and 2019 were as
follows:
(Millions of Dollars)
Remediation costs incurred
Con Edison
CECONY
2020
$33
2019
$19
2020
$32
2019
$13
Insurance and other third party recoveries received by Con Edison or CECONY were immaterial in 2020 and 2019.
Con Edison and CECONY estimate that in 2021 they will incur costs for remediation of approximately $40 million
and $38 million, respectively. The Companies are unable to estimate the time period over which the remaining
accrued liability will be incurred because, among other things, the required remediation has not been determined for
some of the sites.
In 2020, 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 $2,700 million and $2,600 million, respectively. These
estimates were based on the assumption that there is contamination at all sites, including those that have not yet
been fully investigated and additional assumptions about the extent of the contamination and the type and extent of
the remediation that may be required. Actual experience may be materially different.
Asbestos Proceedings
Suits have been brought in New York State and federal courts against the Utilities and many other defendants,
wherein a large number of plaintiffs sought large amounts of compensatory and punitive damages for deaths and
injuries allegedly caused by exposure to asbestos at various premises of the Utilities. The suits that have been
resolved, which are many, have been resolved without any payment by the Utilities, or for amounts that were not, in
the aggregate, material to them. The amounts specified in all the remaining thousands of suits total billions of
dollars; however, the Utilities believe that these amounts are greatly exaggerated, based on the disposition of
previous claims. At December 31, 2020, Con Edison and CECONY have accrued their estimated aggregate
undiscounted potential liabilities for these suits and additional suits that may be brought over the next 15 years as
shown in the following table. These estimates were based upon a combination of modeling, historical data analysis
and risk factor assessment. Courts have begun, and unless otherwise determined on appeal may continue, to apply
different standards for determining liability in asbestos suits than the standard that applied historically. As a result,
the Companies currently believe that there is a reasonable possibility of an exposure to loss in excess of the liability
accrued for the suits. The Companies are unable to estimate the amount or range of such loss. In addition, certain
current and former employees have claimed or are claiming workers’ compensation benefits based on alleged
disability from exposure to asbestos. CECONY is permitted to defer as regulatory assets (for subsequent recovery
through rates) costs incurred for its asbestos lawsuits and workers’ compensation claims.
The accrued liability for asbestos suits and workers’ compensation proceedings (including those related to asbestos
exposure) and the amounts deferred as regulatory assets for the Companies at December 31, 2020 and 2019 were
as follows:
(Millions of Dollars)
Accrued liability – asbestos suits
Regulatory assets – asbestos suits
Accrued liability – workers’ compensation
Regulatory assets/(liabilities) – workers’ compensation
Con Edison
CECONY
2020
$8
$8
$72
$(3)
2019
$8
$8
$78
$3
2020
$7
$7
$68
$(3)
2019
$7
$7
$73
$3
160
CON EDISON ANNUAL REPORT 2020
Note H – 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, the City of New York, the Pipeline and
Hazardous Materials Safety Administration and the NYSPSC. In June 2015, the NTSB issued a final report
concerning the incident, its probable cause and safety recommendations. The NTSB determined that the probable
cause of the incident was (1) the failure of a defective fusion joint at a service tee (which joined a plastic service line
to a plastic distribution main) installed by the company that allowed gas to leak from the distribution main and
migrate into a building where it ignited and (2) a breach in a City sewer line that allowed groundwater and soil to
flow into the sewer, resulting in a loss of support for the distribution main, which caused it to sag and overstressed
the defective fusion joint. The NTSB also made safety recommendations, including recommendations to the
company that addressed its procedures for the preparation and examination of plastic fusions, training of its staff on
conditions for notifications to the City’s Fire Department and extension of its gas main isolation valve installation
program. In February 2017, the NYSPSC approved a settlement agreement with the company related to the
NYSPSC's investigations of the incident and the practices of qualifying persons to perform plastic fusions. Pursuant
to the agreement, the company is providing $27 million of future benefits to customers (for which it has accrued a
regulatory liability) and will not recover from customers $126 million of costs for gas emergency response activities
that it had previously incurred and expensed. Approximately eighty suits are pending against the company seeking
generally unspecified damages and, in some cases, punitive damages, for wrongful death, personal injury, property
damage and business interruption. The company notified its insurers of the incident and believes that the policies in
force at the time of the incident will cover the company’s costs, in excess of a required retention (the amount of
which is not material), to satisfy any liability it may have for damages in connection with the incident. In October
2020, the company accrued a $40 million liability for damages and a $40 million insurance receivable related to the
incident.
For information about material contingencies, see “Other Regulatory Matters” in Note B, “Superfund Sites” and
“Asbestos Proceedings” in Note G and "Uncertain Tax Positions" in Note L.
Con Edison and its subsidiaries have entered into various agreements providing financial or performance assurance
primarily to third parties on behalf of their subsidiaries. Maximum amounts guaranteed by Con Edison under these
agreements totaled $2,042 million and $1,831 million at December 31, 2020 and 2019, respectively.
A summary, by type and term, of Con Edison’s total guarantees under these other agreements at December 31,
2020 is as follows:
Guarantee Type
0 – 3 years
4 – 10 years
> 10 years
Con Edison Transmission
Energy transactions
Renewable electric production projects
Other
Total
$393
480
285
70
$1,228
(Millions of Dollars)
$177
51
9
—
$237
$—
222
355
—
$577
Total
$570
753
649
70
$2,042
Con Edison Transmission – Con Edison has guaranteed payment by CET Electric of the contributions CET
Electric agreed to make to New York Transco LLC (NY Transco). CET Electric owns a 45.7 percent interest in NY
Transco. In April 2019, the New York Independent System Operator (NYISO) selected a transmission project that
was jointly proposed by National Grid and NY Transco. The siting, construction and operation of the project will
require approvals and permits from appropriate governmental agencies and authorities, including the NYSPSC. The
NYISO indicated it will work with the developers to enter into agreements for the development and operation of the
projects, including a schedule for entry into service by December 2023. Guarantee amount shown includes the
maximum possible required amount of CET Electric’s contributions for this project as calculated based on the
assumptions that the project is completed at 175 percent of its estimated costs and NY Transco does not use any
debt financing for the project.
CON EDISON ANNUAL REPORT 2020
161
Energy Transactions — Con Edison and the Clean Energy Businesses guarantee payments on behalf of their
subsidiaries in order to facilitate physical and financial transactions in electricity, gas, pipeline capacity,
transportation, oil, renewable energy credits and energy services. To the extent that liabilities exist under the
contracts subject to these guarantees, such liabilities are included in Con Edison’s consolidated balance sheet.
Renewable Electric Production Projects – Con Edison and the Clean Energy Businesses guarantee payments
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 the operation of solar energy facilities and
energy service projects of the Clean Energy Businesses.
Note I – Electricity Purchase Agreements
The Utilities have electricity purchase agreements with non-utility generators and others for generating capacity. The
Utilities recover their purchased power costs in accordance with provisions approved by the applicable state public
utility regulators. See “Recoverable Energy Costs” in Note A. The Utilities also conducted auctions and have
entered into various other electricity purchase agreements. Assuming performance by the parties to the electricity
purchase agreements, the Utilities are obligated over the terms of the agreements to make capacity and other fixed
payments.
The future capacity and other fixed payments under the electricity purchase agreements are estimated to be as
follows:
(Millions of Dollars)
Con Edison
CECONY
2021
$141
138
2022
$106
106
2023
$68
68
2024
$53
53
2025
$54
54
All Years
Thereafter
$487
487
For energy delivered under most of the electricity purchase agreements, CECONY is obligated to pay variable
prices. The company’s payments under the significant terms of the agreements for capacity, energy and other fixed
payments in 2020, 2019 and 2018 were as follows:
(Millions of Dollars)
Indian Point (a)
Astoria Generating Company (b)
Brooklyn Navy Yard (c)
Cogen Technologies
Total
(a) Contract term ended in 2018.
(b) Capacity purchase agreements with terms ending in 2020 and 2023.
(c) Contract for plant output, which started in 1996 and ends in 2036.
For the Years Ended December 31,
2020
$—
26
113
—
$139
2019
$—
116
115
—
$231
2018
$6
179
124
9
$318
162
CON EDISON ANNUAL REPORT 2020
Note J – Leases
In January 2019, the Companies adopted Accounting Standards Update (ASU) No. 2016-02, “Leases (Topic 842),”
including the amendments thereto, using a modified retrospective transition method of adoption that required no
prior period adjustments or charges to retained earnings for cumulative impact. The standard supersedes the lease
requirements within ASC Topic 840, “Leases.” The Companies lease land, office buildings, equipment and access
rights to support electric transmission facilities. The Companies recognized lease right-of-use assets and lease
liabilities on their consolidated balance sheets for virtually all of their leases (other than leases that meet the
definition of a short-term lease, the expense for which was immaterial). A lease right-of-use asset represents a right
to use an identifiable underlying asset and obtain substantially all of the economic benefits from the use of that
asset for the lease term. A lease liability represents an obligation to make lease payments arising from the lease.
Leases are classified as either operating leases or finance leases. Operating leases are included in operating lease
right-of-use asset and operating lease liabilities on the Companies’ consolidated balance sheets. Finance leases are
included in other noncurrent assets, other current liabilities and other noncurrent liabilities. The Utilities, as regulated
entities, are permitted to continue to recognize expense for operating leases using the timing that conforms to the
regulatory rate treatment as rental payments are recovered from our customers and to account the same way for
finance leases.
For new operating leases, the Companies recognize operating lease right-of-use assets and operating lease
liabilities based on the present value of the future minimum lease payments over the lease term at commencement
date. As most of the Companies’ leases do not provide an implicit rate, the Companies used their collateralized
incremental borrowing rate based on the information available at the commencement date to determine the present
value of future payments. Most of the Companies’ leases have remaining lease terms of one year to 40 years and
may include options to renew or extend the leases for up to five years at the fair rental value. The Companies' lease
terms include options to renew, extend or terminate the lease when it is reasonably certain that the Companies will
exercise that option. There were no leases with material variable lease payments or residual value guarantees. The
Companies account for lease and non-lease components as a single lease component.
Operating lease cost and cash paid for amounts included in the measurement of lease liabilities for the twelve
months ended December 31, 2020 and 2019 were as follows:
(Millions of Dollars)
Operating lease cost
Operating lease cash flows
Con Edison
CECONY
2020
$85
$79
2019
$83
$75
2020
$65
$61
2019
$64
$60
As of December 31, 2020, assets recorded as finance leases for Con Edison and CECONY were $3 million and
$2 million, respectively, and the accumulated amortization associated with finance leases for Con Edison and
CECONY were $3 million and $1 million, respectively. As of December 31, 2019, assets recorded as finance leases
were $1 million for Con Edison and an immaterial amount for CECONY, and the accumulated amortization
associated with finance leases for Con Edison and CECONY were $5 million and $3 million, respectively.
For the twelve months ended December 31, 2020 and 2019, finance lease costs and cash flows for Con Edison and
CECONY were immaterial.
Right-of-use assets obtained in exchange for lease obligations for Con Edison and CECONY were $23 million and
$11 million, respectively, for the twelve months ended December 31, 2020 and $39 million and $4 million,
respectively, for the twelve months ended December 31, 2019.
Other information related to leases for Con Edison and CECONY at December 31, 2020 and 2019 was as follows:
CON EDISON ANNUAL REPORT 2020
163
Weighted Average Remaining Lease Term:
Operating leases
Finance leases
Weighted Average Discount Rate:
Operating leases
Finance leases
Con Edison
2020
2019
CECONY
2020
2019
19.1 years
7.3 years
19.8 years
12.2 years
13.0 years
4.0 years
14.0 years
2.4 years
4.3%
1.8%
4.3%
3.5%
3.6%
1.3%
3.6%
4.1%
Future minimum lease payments under non-cancellable leases at December 31, 2020 were as follows:
(Millions of Dollars)
Year Ending December 31,
Con Edison
CECONY
Operating
Leases
Finance
Leases
Operating
Leases
Finance
Leases
2021
2022
2023
2024
2025
All years thereafter
Total future minimum lease payments
Less: imputed interest
Total
Reported as of December 31, 2020
Operating lease liabilities (current)
Operating lease liabilities (noncurrent)
Other current liabilities
Other noncurrent liabilities
Total
$79
77
74
75
75
938
$1,318
(458)
$860
$96
764
—
—
$860
$1
1
—
—
—
1
$3
—
$3
$—
—
1
2
$3
$62
58
57
57
58
451
$743
(158)
$585
$73
512
—
—
$585
$1
1
—
—
—
—
$2
—
$2
$—
—
1
1
$2
At December 31, 2020, the Companies did not have material obligations under operating or finance leases that had
not yet commenced.
The Companies are lessors under certain leases whereby the Companies own real estate and distribution poles and
lease portions of them to others. Revenue under such leases was immaterial for Con Edison and CECONY for the
twelve months ended December 31, 2020 and 2019.
Note K – Goodwill
The Companies test goodwill for impairment at least annually or whenever there is a triggering event. There is an
option to first make a qualitative assessment of whether it is more likely than not that the fair value of a reporting
unit is less than its carrying amount before applying a quantitative goodwill impairment test. The quantitative
goodwill impairment test compares the estimated fair value of a reporting unit with its carrying value, including
goodwill. If the estimated fair value of a reporting unit exceeds its carrying value, goodwill of the reporting unit is
considered not impaired. If the carrying value exceeds the estimated fair value of the reporting unit, an impairment
loss shall be recognized in an amount equal to that excess, limited to the total amount of goodwill allocated to that
reporting unit.
164
CON EDISON ANNUAL REPORT 2020
Con Edison has recorded goodwill related to the O&R merger, the acquisition of a gas storage company by CET
Gas, and the acquisitions of a residential solar company and battery storage company by the Clean Energy
Businesses. In 2020 and 2019, Con Edison completed impairment tests for their goodwill of $406 million related to
the O&R merger and determined that it was not impaired. For the impairment test, $245 million and $161 million of
goodwill were allocated to CECONY and O&R, respectively. In 2019, the Companies performed the optional
qualitative assessment for goodwill related to the O&R merger. In 2020 and 2019, Con Edison completed
impairment tests for goodwill of $8 million related to the gas storage company acquired by CET Gas, $14 million
related to the residential solar company acquired by the Clean Energy Businesses and $18 million related to the
battery storage company acquired by the Clean Energy Businesses, and determined that they were not impaired.
Estimates of future cash flows, projected growth rates, and discount rates inherent in the cash flow estimates for
Con Edison subsidiaries other than the Utilities may vary significantly from actual results, which could result in a
future impairment of goodwill. The Companies identified no triggering events or changes in circumstances related to
the COVID-19 pandemic that would indicate that the carrying value of goodwill may not be recoverable at December
31, 2020.
Note L – Income Tax
In response to the economic impacts of the COVID-19 pandemic, the Coronavirus Aid, Relief, and Economic
Security Act (CARES Act) was signed into law on March 27, 2020. The CARES Act provides relief to corporate
taxpayers by permitting a five-year carryback of net operating losses (NOLs) for tax years 2018, 2019 and 2020,
temporarily removing the 80 percent limitation when applying the NOLs to carryback years, increasing the 30
percent limitation on interest deductibility to 50 percent of adjusted taxable income for tax years 2019 and 2020, and
provides for certain employee retention tax credits and refunds for eligible employers.
Under the CARES Act, Con Edison carried back its $29 million NOL from tax year 2018 to tax year 2013 generating
a $2.5 million net tax refund for which a tax receivable was established in 2020. In addition, Con Edison recognized
a discrete income tax benefit of $4 million in 2020, due to the higher federal statutory tax rate in 2013. The 2018
federal NOL was recorded at 21 percent and was carried back to tax year 2013, which had a 35 percent federal
statutory tax rate. This income tax benefit was primarily recognized at the Clean Energy Businesses.
The components of income tax are as follows:
(Millions of Dollars)
2020
2019
2018
2020
2019
2018
Con Edison
CECONY
State
Current
Deferred
Federal
Current
Deferred
Amortization of investment tax credits
Total income tax expense
$7
50
(2)
42
(7)
$90
$(12)
96
—
219
(7)
$296
$(10)
107
3
310
(9)
$401
$6
97
41
73
(2)
$215
$22
68
185
63
(3)
$335
$6
82
(34)
275
(3)
$326
CON EDISON ANNUAL REPORT 2020
165
The tax effects of temporary differences, which gave rise to deferred tax assets and liabilities, are as follows:
(Millions of Dollars)
Deferred tax liabilities:
Property basis differences
Regulatory assets:
Unrecognized pension and other postretirement costs
Environmental remediation costs
Deferred storm costs
Other regulatory assets
Operating lease right-of-use asset
Equity investments
Total deferred tax liabilities
Deferred tax assets:
Con Edison
CECONY
2020
2019
2020
2019
$7,985
$7,699
$6,901
$6,640
910
243
31
536
220
46
712
205
22
376
231
104
861
222
—
508
165
—
674
181
—
355
169
—
$9,971
$9,349
$8,657
$8,019
Accrued pension and other postretirement costs
$504
$291
$427
$222
Regulatory liabilities:
Future income tax
Other regulatory liabilities
Superfund and other environmental costs
Asset retirement obligations
Operating lease liabilities
Loss carryforwards
Tax credits carryforward
Valuation allowance
Other
Total deferred tax assets
Net deferred tax liabilities
Unamortized investment tax credits
Net deferred tax liabilities and unamortized investment tax credits
617
656
241
178
211
164
1,022
(22)
59
3,630
$6,341
134
$6,475
678
702
206
135
231
108
896
(31)
47
3,263
$6,086
141
$6,227
579
570
219
143
165
34
—
—
127
2,264
$6,393
18
$6,411
638
622
183
102
170
—
—
—
103
2,040
$5,979
21
$6,000
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 is as follows:
(% of Pre-tax income)
STATUTORY TAX RATE
Federal
Changes in computed taxes resulting from:
State income taxes, net of federal income tax benefit
Taxes attributable to noncontrolling interests
Cost of removal
Other plant-related items
TCJA deferred tax re-measurement
Amortization of excess deferred federal income taxes
Renewable energy credits
Research and development credits
Other
Effective tax rate
Con Edison
CECONY
2020
2019
2018
2020
2019
2018
21%
21%
21%
21%
21%
21%
4
(1)
2
(1)
—
(14)
(3)
—
(1)
4
(1)
1
(1)
—
(4)
(2)
(1)
—
4
—
1
(1)
2
(3)
(1)
—
—
5
—
1
(1)
—
(12)
—
—
1
5
—
1
(1)
—
(4)
—
(1)
—
5
—
1
(1)
—
(3)
—
(1)
(1)
7%
17%
23%
15%
21%
21%
166
CON EDISON ANNUAL REPORT 2020
CECONY and O&R deferred as regulatory liabilities their estimated net benefits under the TCJA for the year ended
December 31, 2018. CECONY’s net benefits prior to January 1, 2019 for its electric service and amortization of
excess deferred federal income taxes for its electric service continued to be deferred. RECO deferred as a
regulatory liability its estimated net benefits under the TCJA for the three months ended March 31, 2018. The net
benefits include the revenue requirement impact of the reduction in the corporate federal income tax rate to 21
percent, the elimination for utilities of bonus depreciation and the amortization of excess deferred federal income
taxes the utilities collected from customers that will not be paid to the IRS under the TCJA. See “Other Regulatory
Matters” in Note B.
At December 31, 2020, Con Edison has a federal NOL of approximately $21 million that can be carried forward
indefinitely. Con Edison also has $1,022 million in general business tax credit carryovers (primarily renewable
energy tax credits), which if unused will begin to expire in 2032. A deferred tax asset for these tax attribute
carryforwards was recorded, and no valuation allowance was provided, as it is more likely than not that the deferred
tax asset will be realized.
At December 31, 2020, Con Edison has a New York State NOL of approximately $1,351 million, primarily as a result
of higher accelerated state tax depreciation. A deferred tax asset has been recognized for these New York State
NOL carryforwards that will begin to expire, if unused, in 2039 and no valuation allowance was provided; as it is
more likely than not that the deferred tax asset will be realized. In addition, Con Edison reversed $9 million of the
valuation allowance against the New York City NOL deferred tax asset that will be realized over the next 10 years.
Con Edison also has a $18 million valuation allowance for other state NOL carryforwards; as it is not more likely
than not that the deferred tax asset will be realized.
The Protecting Americans from Tax Hikes Act of 2015 extended bonus depreciation applying a 50 percent rate for
property acquired and placed in service for years 2015 through 2017 with reduced rates of 40 percent and 30
percent for years 2018 and 2019, respectively. The TCJA does not allow bonus depreciation after December 31,
2017 (excluding certain transition rules) for Companies that qualify as a utility company for the consolidated group
under the de minimis exception to Treasury regulations.
In December 2019, the Federal government issued final regulations providing guidance on provisions in the TCJA
allowing for full expensing of qualified plant additions. These provisions, which Con Edison adopted under the
proposed regulations of August 2018, allowed the Utilities a full expense tax deduction for plant additions in the
fourth quarter of 2017, and the Utilities continue additional first year depreciation transition rules for plant additions
placed in service in tax years beginning in 2018, under long-term construction contracts entered into before
September 28, 2017. The impact on the Utilities of these regulations is discussed above.
In November 2018, the Federal government issued, and Con Edison adopted, proposed regulations providing
guidance on the tax deductibility of interest expense under the TCJA. The TCJA generally provides for the continued
deductibility of interest expense by regulated public utilities and may limit the deduction for interest expense by most
non-utility businesses to 30 percent of adjusted taxable income (which resembles earnings before interest, taxes,
depreciation and amortization).The regulations provide an annual safe harbor test that if at least 90 percent of
consolidated plant assets consist of utility property, the entire consolidated group will be treated as a regulated
public utility, and all of the consolidated group’s interest expense will be currently tax deductible. For 2018, Con
Edison met the 90 percent safe harbor test and its deduction for interest expense was not limited. For 2019, Con
Edison did not meet the 90 percent safe harbor test, however, its deduction for interest expense was not limited as a
percentage of adjusted taxable income. In 2020, the federal government issued final regulations under the TCJA.
Under the CARES Act, the limit of the deductible interest expense as a percentage of adjusted taxable income
increased from 30 percent to 50 percent and accordingly, all of Con Edison’s interest expense in 2020 will be tax
deductible. Qualifying consolidated groups would not be entitled to the full expensing provisions in the TCJA noted
above. The safe harbor rules do not apply to partnerships in which Con Edison and its subsidiaries are a partner.
Uncertain Tax Positions
Under the accounting rules for income taxes, the Companies are not permitted to recognize the tax benefit
attributable to a tax position unless such position is more likely than not to be sustained upon examination by taxing
authorities, including resolution of any related appeals and litigation processes, based solely on the technical merits
of the position.
CON EDISON ANNUAL REPORT 2020
167
A reconciliation of the beginning and ending amounts of unrecognized tax benefits for Con Edison and CECONY
follows:
(Millions of Dollars)
Balance at January 1,
Additions based on tax positions related to the current year
Additions based on tax positions of prior years
Reductions for tax positions of prior years
Reductions from expiration of statute of limitations
Settlements
Balance at December 31,
Con Edison
2019
$6
1
10
(2)
—
(2)
$13
2020
$13
—
1
—
—
—
$14
2018
$12
2
1
(2)
(4)
(3)
$6
CECONY
2020
2019
2018
$2
—
1
—
—
—
$3
$4
1
—
(1)
—
(2)
$2
$5
2
1
(1)
—
(3)
$4
At December 31, 2020, the estimated liability for uncertain tax positions for Con Edison was $14 million ($3 million
for CECONY). Con Edison reasonably expects to resolve within the next twelve months approximately $3 million of
various federal and state uncertainties due to the expected completion of ongoing tax examinations, of which the
entire amount, if recognized, would reduce Con Edison's effective tax rate. The amount related to CECONY is
$1 million, which, if recognized, would reduce CECONY’s effective tax rate. The total amount of unrecognized tax
benefits, if recognized, that would reduce Con Edison’s effective tax rate is $14 million ($13 million, net of federal
taxes) with $3 million attributable to CECONY.
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. For the year ended
December 31, 2020, the Companies recognized an immaterial amount of interest expense and no penalties for
uncertain tax positions in their consolidated income statements. At December 31, 2020 and 2019, the Companies
recognized an immaterial amount of accrued interest on their consolidated balance sheets.
Con Edison's federal tax return for 2019 remains under examination. State and local income tax returns remain
open for examination in New York State for tax years 2010 through 2019, in New Jersey for tax years 2016 through
2019 and in New York City for tax years 2015 and 2019.
168
CON EDISON ANNUAL REPORT 2020
Note M – Revenue Recognition
The following table presents, for the years ended December 31, 2020 and 2019, revenue from contracts with
customers as defined in Accounting Standards Codification (ASC) Topic 606, "Revenue from Contracts with
Customers," as well as additional revenue from sources other than contracts with customers, disaggregated by
major source.
2020
2019
2018
Revenues
from
contracts
with
customers
Other
revenues
(a)
Total
operating
revenues
Revenues
from
contracts
with
customers
Other
revenues
(a)
Total
operating
revenues
Revenues
from
contracts
with
customers
Other
revenues
(a)
Total
operating
revenues
$8,026
1,998
494
$10,518
619
224
$843
609 (b)
52
—
$77
38
14
$8,103
2,036
508
$7,913
2,097
610
$149
35
17
$8,062
2,132
627
$7,920
2,052
625
$51
26
6
$7,971
2,078
631
$129
$10,647
$10,620
$201
$10,821
$10,597
$83
$10,680
10
9
$19
—
—
75
629
233
$862
627
247
$874
609
52
75
575 (b)
71
—
7
12
$19
—
—
211
634
259
$893
647
256
$903
(5)
(7)
$(12)
575
71
211
329 (b)
95
—
—
—
339
642
249
$891
329
95
339
$661
$75
$736
$646
$211
$857
$424
$339
$763
4
—
—
(3)
4
(3)
4
—
—
(1)
4
(1)
4
—
—
(1)
4
(1)
(Millions of Dollars)
CECONY
Electric
Gas
Steam
Total CECONY
O&R
Electric
Gas
Total O&R
Clean Energy
Businesses
Renewables
Energy services
Other
Total Clean Energy
Businesses
Con Edison
Transmission
Other (c)
Total Con Edison
$12,026
$220
$12,246
$12,144
$430
$12,574
$11,928
$409
$12,337
(a) For the Utilities, this includes revenue from alternative revenue programs, such as the revenue decoupling mechanisms under their New
York electric and gas rate plans. For the Clean Energy Businesses, this includes revenue from wholesale services.
(b) Included within the totals for Renewables revenue at the Clean Energy Businesses is $8 million, $14 million and $103 million for the years
ended December 31, 2020, 2019 and 2018, respectively, of revenue related to engineering, procurement and construction services.
(c) Parent company and consolidation adjustments.
Revenues are recorded as energy is delivered, generated or services are provided and billed to customers, except
for services under percentage-of-completion contracts. Amounts billed are recorded in accounts receivable -
customers, with payment generally due the following month. Con Edison’s and the Utilities’ accounts receivable -
customers balance also reflects the Utilities’ purchase of receivables from energy service companies to support
retail choice programs. Accrued revenues not yet billed to customers are recorded as accrued unbilled revenues.
The Utilities have the obligation to deliver electricity, gas and steam energy to their customers. As the energy is
immediately available for use upon delivery to the customer, the energy and its delivery are identifiable as a single
performance obligation. The Utilities recognize revenues as this performance obligation is satisfied over time as the
Utilities deliver, and the customers simultaneously receive and consume, the energy. The amount of revenues
recognized reflects the consideration the Utilities expect to receive in exchange for delivering the energy. Under
their tariffs, the transaction price for full-service customers includes the Utilities’ energy cost and for all customers
includes delivery charges determined based on customer class and in accordance with established tariffs and
guidelines of the NYSPSC or the NJBPU, as applicable. Accordingly, there is no unsatisfied performance obligation
associated with these customers. The transaction price is applied to the Utilities’ revenue generating activities
through the customer billing process. Because energy is delivered over time, the Utilities use output methods that
recognize revenue based on direct measurement of the value transferred, such as units delivered, which provides
an accurate measure of value for the energy delivered. The Utilities accrue revenues at the end of each month for
estimated energy delivered but not yet billed to customers. The Utilities defer over a 12-month period net
interruptible gas revenues, other than those authorized by the NYSPSC to be retained by the Utilities, for refund to
firm gas sales and transportation customers.
CON EDISON ANNUAL REPORT 2020
169
The Clean Energy Businesses recognize revenue for the sale of energy from renewable electric production projects
as energy is generated and billed to counterparties; accrue revenues at the end of each month for energy generated
but not yet billed to counterparties; and recognize revenue as energy is delivered and services are provided for
managing energy supply assets leased from others and managing the dispatch, fuel requirements and risk
management activities for generating plants and merchant transmission in the northeastern United States. The
Clean Energy Businesses also recognize revenue for providing energy-efficiency services to government and
commercial customers, and recognize revenue for engineering, procurement and construction services, under the
percentage-of-completion method of revenue recognition.
Sales and profits on each percentage-of-completion contract are 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, which may result from contract modifications, performance or other reasons, are
recognized on a cumulative catch-up basis in the period in which the revisions are made.
(Millions of Dollars)
Beginning balance as of January 1,
Additions (c)
Subtractions (c)
Ending balance as of December 31,
2020
2019
2018
Unbilled
contract
revenue
(a)
Unearned
revenue
(b)
Unbilled
contract
revenue
(a)
Unearned
revenue
(b)
Unbilled
contract
revenue
(a)
Unearned
revenue
(b)
$29
88
106
$11
$17
31
7 (d)
$41
$29
86
86
$29
$20
1
4 (d)
$17
$58
144
173
$29
$87
38
105
$20
(d)
(a) Unbilled contract revenue represents accumulated incurred costs and earned profits on contracts (revenue arrangements), which have been
recorded as revenue, but have not yet been billed to customers, and which represent contract assets as defined in Topic 606. Substantially
all accrued unbilled contract revenue is expected to be collected within one year. Unbilled contract revenue arises from the cost-to-cost
method of revenue recognition. Unbilled contract revenue from fixed-price type contracts is converted to billed receivables when amounts
are invoiced to customers according to contractual billing terms, which generally occur when deliveries or other performance milestones are
completed.
(b) Unearned revenue represents a liability for billings to customers in excess of earned revenue, which are contract liabilities as defined in
Topic 606.
(c) Additions for unbilled contract revenue and subtractions for unearned revenue represent additional revenue earned. Additions for unearned
revenue and subtractions for unbilled contract revenue represent billings. Activity also includes appropriate balance sheet classification for
the period.
(d) Of the subtractions from unearned revenue, $7 million, $4 million and $50 million were included in the balances as of January 1, 2020,
2019, and 2018, respectively.
As of December 31, 2020, the aggregate amount of the remaining fixed performance obligations of the Clean
Energy Businesses under contracts with customers for energy services is $216 million, of which $181 million will be
recognized within the next two years, and the remaining $35 million will be recognized pursuant to long-term service
and maintenance agreements.
In March 2020, the Utilities began suspending new late payment charges and certain other fees for all customers.
The estimated amount of these foregone revenues for the year ended December 31, 2020 was $64 million and
$61 million for Con Edison and CECONY, respectively. The Utilities also began providing payment extensions for all
customers that were scheduled to be disconnected prior to the start of the COVID-19 pandemic. See "COVID-19
Regulatory Matters" in Note B.
170
CON EDISON ANNUAL REPORT 2020
Note N – Stock-Based Compensation
The Companies may compensate employees and directors with, among other things, stock options, stock units,
restricted stock units and contributions to the stock purchase plan. The Long Term Incentive Plan, which was
approved by Con Edison’s shareholders in 2003 (2003 LTIP), and the Long Term Incentive Plan, which was
approved by Con Edison’s shareholders in 2013 (2013 LTIP), are collectively referred to herein as the LTIP. The
LTIP provides for, among other things, awards to employees of restricted stock units and stock options and, to Con
Edison’s non-employee directors, stock units. Existing awards under the 2003 LTIP continue in effect, however no
new awards may be issued under the 2003 LTIP. The 2013 LTIP provides for awards for up to five million shares of
common stock.
Shares of Con Edison common stock used to satisfy the Companies’ obligations with respect to stock-based
compensation may be new shares (authorized, but unissued) or treasury shares (existing treasury shares or shares
purchased in the open market). The shares used during the year ended December 31, 2020 were new shares. The
Companies intend to use new shares to fulfill their stock-based compensation obligations for 2021.
The Companies recognized stock-based compensation expense using a fair value measurement method. The
following table summarizes stock-based compensation expense recognized by the Companies in the years ended
December 31, 2020, 2019 and 2018:
(Millions of Dollars)
Performance-based restricted stock
Time-based restricted stock
Non-employee director deferred stock compensation
Stock purchase plan
Total
Income tax benefit
Con Edison
CECONY
2019
$36
2
2
7
$47
$13
2018
$3
2
3
6
$14
$4
2020
$6
1
2
7
$16
$4
2019
$30
2
2
6
$40
$11
2018
$3
1
3
6
$13
$4
2020
$7
1
2
7
$17
$5
Restricted Stock and Stock Units
Restricted stock and stock unit awards under the LTIP have been made as follows: (i) awards that provide for
adjustment of the number of units (performance-restricted stock units or Performance RSUs) to certain officers and
employees; (ii) time-based awards to certain employees; and (iii) awards to non-employee directors. Restricted
stock and stock units awarded represent the right to receive, upon vesting, shares of Con Edison common stock, or,
except for units awarded under the directors’ plan, the cash value of shares or a combination thereof.
The number of units in each annual Performance RSU award is subject to adjustment as follows: (i) 50 percent of
the units awarded will be multiplied by a factor that may range from 0 to 200 percent, based on Con Edison’s total
shareholder return relative to a specified peer group during a specified performance period (the TSR portion); and
(ii) 50 percent of the units awarded will be multiplied by factors that may range from 0 to 200 percent, based on
determinations made in connection with the Companies’ annual incentive plans or, for certain executive officers,
actual performance as compared to certain performance measures during a specified performance period (the non-
TSR portion). Performance RSU awards generally vest upon completion of the performance period.
Performance against the established targets is recomputed each reporting period as of the earlier of the reporting
date and the vesting date. The TSR portion applies a Monte Carlo simulation model, and the non-TSR portion is the
product of the market price at the end of the period and the average non-TSR determination over the vesting period.
Performance RSUs are “liability awards” because each Performance RSU represents the right to receive, upon
vesting, one share of Con Edison common stock, the cash value of a share or a combination thereof. As such,
changes in the fair value of the Performance RSUs are reflected in net income. The assumptions used to calculate
the fair value of the awards were as follows:
Risk-free interest rate (a)
Expected term (b)
Expected share price volatility (c)
(a) The risk-free rate is based on the U.S. Treasury zero-coupon yield curve.
2020
2019
2018
0.10% - 0.13%
1.58% - 1.59%
2.48% -2.63%
3 years
3 years
3 years
30.16% - 40.95% 12.89% - 15.51% 14.76% - 17.71%
CON EDISON ANNUAL REPORT 2020
171
(b) The expected term of the Performance RSUs equals the vesting period. The Companies do not expect significant forfeitures to occur.
(c) Based on historical experience.
A summary of changes in the status of the Performance RSUs’ TSR and non-TSR portions during the year ended
December 31, 2020 is as follows:
Non-vested at December 31, 2019
Granted
Vested
Forfeited
Non-vested at December 31, 2020
Units
991,238
329,600
(326,496)
(92,818)
901,524
Con Edison
Weighted Average Grant Date
Fair Value (a)
TSR
Portion (b)
Non-TSR
Portion (c)
$68.15
79.98
73.07
73.80
$70.11
$77.14
90.48
74.57
87.98
$81.83
Units
742,204
249,761
(245,269)
(60,225)
686,471
CECONY
Weighted Average Grant Date
Fair Value (a)
TSR
Portion (b)
Non-TSR
Portion (c)
$68.06
79.70
72.70
73.61
$70.15
$77.32
89.65
74.76
87.73
$81.80
(a) The TSR and non-TSR Portions each account for 50 percent of the awards’ value.
(b) Fair value is determined using the Monte Carlo simulation described above. Weighted average grant date fair value does not reflect any
accrual or payment of dividends prior to vesting.
(c) Fair value is determined using the market price of one share of Con Edison common stock on the grant date. The market price has not been
discounted to reflect that dividends do not accrue and are not payable on Performance RSUs until vesting.
The total expense to be recognized by Con Edison in future periods for unvested Performance RSUs outstanding at
December 31, 2020 is $21 million, including $17 million for CECONY, and is expected to be recognized over a
weighted average period of one year for both Con Edison and CECONY. Con Edison and CECONY paid cash of
$21 million and $18 million in 2020, $24 million and $22 million in 2019, and $29 million and $28 million in 2018,
respectively, to settle vested Performance RSUs.
In accordance with the accounting rules for stock compensation, for time-based awards, the Companies are
accruing a liability and recognizing compensation expense based on the market value of a common share
throughout the vesting period. The vesting period for awards is three years and is based on the employee’s
continuous service to Con Edison. Prior to vesting, the awards are subject to forfeiture in whole or in part under
certain circumstances. The awards are “liability awards” because each restricted stock unit represents the right to
receive, upon vesting, one share of Con Edison common stock, the cash value of a share or a combination thereof.
As such, prior to vesting, changes in the fair value of the units are reflected in net income.
A summary of changes in the status of time-based awards during the year ended December 31, 2020 is as follows:
Non-vested at December 31, 2019
Granted
Vested
Forfeited
Non-vested at December 31, 2020
Con Edison
CECONY
Units
67,250
22,450
(20,750)
(1,512)
67,438
Weighted Average
Grant Date
Fair Value
$80.36
78.00
77.66
80.30
$80.40
Units
63,100
20,900
(19,650)
(1,512)
62,838
Weighted Average
Grant Date
Fair Value
$80.36
78.00
77.66
80.30
$80.42
The total expense to be recognized by Con Edison in future periods for unvested time-based awards outstanding at
December 31, 2020 for Con Edison and CECONY was $2 million and is expected to be recognized over a weighted
average period of one year. Con Edison and CECONY paid cash of $1 million in 2020, 2019 and 2018, to settle
vested time-based awards.
Under the LTIP, each non-employee director receives stock units, which are deferred until the director’s separation
from service or another date specified by the director. Each director may also elect to defer all or a portion of their
cash compensation into additional stock units, which are deferred until the director’s termination of service or
another date specified by the director. Non-employee directors’ stock units issued under the LTIP are considered
“equity awards,” because they may only be settled in shares. Directors immediately vest in units issued to them.
172
CON EDISON ANNUAL REPORT 2020
The fair value of the units is determined using the closing price of Con Edison’s common stock on the business day
immediately preceding the date of issue. In the year ended December 31, 2020, approximately 33,200 units were
issued at a weighted average grant date price of $74.32.
Stock Purchase Plan
The Stock Purchase Plan, which was approved by shareholders in 2004 and 2014, provides for the Companies to
contribute up to $1 for each $9 invested by their directors, officers or employees to purchase Con Edison common
stock under the plan. Eligible participants may invest up to $25,000 during any calendar year (subject to an
additional limitation for officers and employees of not more than 20 percent of their pay). Dividends paid on shares
held under the plan are reinvested in additional shares unless otherwise directed by the participant.
Participants in the plan immediately vest in shares purchased by them under the plan. Prior to September 1, 2020,
the fair value of the shares of Con Edison common stock purchased under the plan was calculated using the
average of the high and low composite sale prices at which shares were traded at the New York Stock Exchange on
the trading day immediately preceding such purchase dates. During 2020, the plan was amended and as a result of
the amendment, the fair value of the shares of Con Edison common stock purchased after September 1, 2020
under the plan was calculated using the closing price at which shares were traded on the New York Stock Exchange
on the last business day of the month for all shares purchased during the month. During 2020, 2019 and 2018,
836,984, 747,899 and 786,385 shares were purchased under the Stock Purchase Plan at a weighted average price
of $79.82, $85.45 and $78.27 per share, respectively.
CON EDISON ANNUAL REPORT 2020
173
Note O – Financial Information by Business Segment
The business segments of each of the Companies, which are its operating segments, were determined based on
management’s reporting and decision-making requirements in accordance with the accounting rules for segment
reporting.
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.
All revenues of these business segments are from customers located in the United States of America. Also, all assets
of the business segments are located in the United States of America. The accounting policies of the segments are
the same as those described in Note A.
Common services shared by the business segments are assigned directly or allocated based on various cost factors,
depending on the nature of the service provided.
The financial data for the business segments are as follows:
As of and for the Year
Ended December 31, 2020
(Millions of Dollars)
Operating
revenues
Inter-
segment
revenues
Depreciation
and
amortization
Operating
income
Other
Income
(deductions)
Interest
charges
Income
taxes on
operating
income
(a)
Total
assets
Capital
expenditures
CECONY
Electric
Gas
Steam
Consolidation adjustments
$8,103
2,036
508
—
Total CECONY
$10,647
O&R
Electric
Gas
Other
Total O&R
Clean Energy Businesses
Con Edison Transmission
Other (b)
$629
233
—
$862
$736
4
(3)
$18
7
74
(99)
$—
$—
—
—
$—
$—
—
—
$1,214
$1,731
$(134)
$535
$130 $35,673
294
90
574
5
(25)
(12)
164
40
102
(14)
12,678
2,616
—
—
—
—
—
—
$2,080
1,044
122
—
$1,598
$2,310
($171)
$739
$218 $50,967
$3,246
$65
25
—
$90
$231
1
—
$99
48
—
$147
$215
(8)
(10)
$(10)
(4)
—
$26
15
$13
$2,097
8
1,150
—
—
—
$(14)
$41
$21
$3,247
$4
$196
$(43)
$6,848
(215)
(5)
18
25
—
(3)
1,348
485
$159
61
—
$220
$616
3
—
Total Con Edison
$12,246
$—
$1,920
$2,654
$(401)
$1,019
$193 $62,895
$4,085
As of and for the Year
Ended December 31, 2019
(Millions of Dollars)
Operating
revenues
Inter-
segment
revenues
Depreciation
and
amortization
Operating
income
Other
Income
(deductions)
Interest
charges
Income
taxes on
operating
income
(a)
Total
assets
Capital
expenditures
CECONY
Electric
Gas
Steam
Consolidation adjustments
$8,062
2,132
627
—
Total CECONY
$10,821
O&R
Electric
Gas
Other
Total O&R
Clean Energy Businesses
Con Edison Transmission
Other (b)
$634
259
—
$893
$857
4
(1)
$17
7
70
(94)
$—
$—
—
—
$—
$—
—
—
$1,053
$1,758
$(28)
$539
$239 $32,988
231
89
528
62
(4)
(3)
147
42
99
4
11,090
2,479
—
—
—
—
—
—
$1,851
1,078
91
—
$1,373
$2,348
$(35)
$728
$342 $46,557
$3,020
$60
24
$98
41
$(7)
(4)
$27
14
$15
$2,130
6
876
—
—
—
—
—
—
$84
$226
1
—
$139
$202
(6)
(7)
$41
$186
25
11
$21
$3,006
$(58)
$6,528
1
(6)
1,618
370
$(11)
$5
104
(12)
$51
$991
$300 $58,079
$3,676
$142
61
—
$203
$248
205
—
Total Con Edison
$12,574
$—
$1,684
$2,676
174
CON EDISON ANNUAL REPORT 2020
As of and for the Year
Ended December 31, 2018
(Millions of Dollars)
Operating
revenues
Inter-
segment
revenues
Depreciation
and
amortization
Operating
income
Other
Income
(deductions)
Interest
charges
Income
taxes on
operating
income
(a)
Total
assets
Capital
expenditures
CECONY
Electric
Gas
Steam
Consolidation adjustments
$7,971
2,078
631
—
Total CECONY
$10,680
O&R
Electric
Gas
Other
Total O&R
Clean Energy Businesses
Con Edison Transmission
Other (b)
$642
249
—
$891
$763
4
(1)
$16
7
75
(98)
$—
$—
—
—
$—
$—
—
—
$984
$1,799
$(110)
$519
$233 $31,012
205
87
478
77
(23)
(10)
131
39
87
8
9,710
2,386
—
—
—
—
—
—
$1,861
1,050
94
—
$1,276
$2,354
$(143)
$689
$328 $43,108
$3,005
$56
21
$93
39
—
—
$77
$85
1
(1)
$132
$194
(7)
(9)
$(14)
(5)
—
$(19)
$33
91
(24)
$25
14
$14
$2,036
7
856
—
—
—
$39
$63
20
8
$21
$19
(1)
39
$2,892
$5,821
1,425
674
$138
67
—
$205
$1,791
248
—
Total Con Edison
$12,337
$—
$1,438
$2,664
$(62)
$819
$406 $53,920
$5,249
(a) For Con Edison, the income tax expense/(benefit) on non-operating income was $(103) million, $(4) million and $(5) million in 2020, 2019
and 2018, respectively. For CECONY, the income tax expense/(benefit) on non-operating income was $(3) million, $(7) million and $(2)
million in 2020, 2019 and 2018, respectively.
(b) Parent company and consolidation adjustments. Other does not represent a business segment.
CON EDISON ANNUAL REPORT 2020
175
Note P – Derivative Instruments and Hedging Activities
Con Edison’s subsidiaries hedge market price fluctuations associated with physical purchases and sales of
electricity, natural gas, steam and, to a lesser extent, refined fuels by using derivative instruments including futures,
forwards, basis swaps, options, transmission congestion contracts and financial transmission rights contracts.
These are economic hedges, for which the Utilities and the Clean Energy Business do not elect hedge accounting.
The Clean Energy Businesses use interest rate swaps to manage the risks associated with interest rates related to
outstanding and expected future debt issuances and borrowings. Derivatives are recognized on the consolidated
balance sheet at fair value (see Note Q), 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.
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. The
amendments were effective for reporting periods beginning after December 15, 2018. The application of the
guidance did not have a material impact on the Companies’ financial position, results of operations and liquidity
because the Companies do not elect hedge accounting for their derivative instruments and hedging activities.
The fair values of the Companies’ derivatives, including the offsetting of assets and liabilities, on the consolidated
balance sheet at December 31, 2020 and 2019 were:
(Millions of Dollars)
2020
2019
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)
Balance Sheet Location
Con Edison
Fair value of derivative assets
Current
Noncurrent
Total fair value of derivative assets
Fair value of derivative liabilities
Current
Noncurrent
Total fair value of derivative liabilities
Net fair value derivative assets/(liabilities)
CECONY
Fair value of derivative assets
Current
Noncurrent
Total fair value of derivative assets
Fair value of derivative liabilities
Current
Noncurrent
Total fair value of derivative liabilities
$44
22
$66
$(225)
(207)
$(432)
$(366)
$20
16
$36
$(174)
(114)
$(288)
$14
35
$49
$(13)
(33)
$(46)
$3
$(12)
(8)
$(20)
$11
9
$20
$—
$58 (b)
57
$115
$(238) (c)
(240) (c)
$(478)
$(363)
$8 (b)
8
$16
$(163)
(105)
$(268)
$(252)
$60
19
$79
$(140)
(122)
$(262)
$(183)
$39
17
$56
$(100)
(80)
$(180)
$(124)
$(3)
(13)
$(16)
$17
16
$33
$17
$(6)
(12)
$(18)
$19
16
$35
$17
$57 (b)
6 (d)
$63
$(123) (d)
(106) (d)
$(229)
$(166)
$33 (b)
5
$38
$(81)
(64)
$(145)
$(107)
Net fair value derivative assets/(liabilities)
$(252)
(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 December 31, 2020 and 2019, margin deposits for Con Edison ($3 million and $9 million, respectively) and CECONY ($3 million and $8
million, respectively) were classified as derivative assets on the consolidated balance sheet, but not included in the table. Margin is
collateral, typically cash, that the holder of a derivative instrument is required to deposit in order to transact on an exchange and to cover its
potential losses with its broker or the exchange.
176
CON EDISON ANNUAL REPORT 2020
(c)
(d)
Includes amounts for interest rate swaps of $(24) million in current liabilities and $(82) million in noncurrent liabilities. At December 31,
2020, the Clean Energy Businesses had interest rate swaps with notional amounts of $863 million. The expiration dates of the swaps range
from 2024-2041.
Includes amounts for interest rate swaps of $1 million in current assets, $(7) million in current liabilities and $(34) million in noncurrent
liabilities. At December 31, 2019, the Clean Energy Businesses had interest rate swaps with notional amounts of $919 million. The
expiration dates of the swaps range from 2024-2041.
The Utilities generally recover their prudently incurred fuel, purchased power and gas costs, including hedging gains
and losses, in accordance with rate provisions approved by the applicable state utility regulators. See "Recoverable
Energy Costs" in Note A. In accordance with the accounting rules for regulated operations, the Utilities record a
regulatory asset or liability to defer recognition of unrealized gains and losses on their electric and gas derivatives.
As gains and losses are realized in future periods, they will be recognized as purchased power, gas and fuel costs
in the Companies’ consolidated income statements.
The Clean Energy Businesses record realized and unrealized gains and losses on their derivative contracts in gas
purchased for resale and non-utility revenue in the reporting period in which they occur. The Clean Energy
Businesses record changes in the fair value of their interest rate swaps in other interest expense at the end of each
reporting period. Management believes that these derivative instruments represent economic hedges that mitigate
exposure to fluctuations in commodity prices and interest rates.
The following table presents the realized and unrealized gains or losses on derivatives that have been deferred or
recognized in earnings for the years ended December 31, 2020 and 2019:
(Millions of Dollars)
Balance Sheet Location
2020
2019
2020
2019
Pre-tax gains/(losses) deferred in accordance with accounting rules for regulated operations:
Con Edison
CECONY
Current
Noncurrent
Deferred derivative gains
Deferred derivative gains
Total deferred gains/(losses)
Current
Current
Deferred derivative losses
Recoverable energy costs
Noncurrent
Deferred derivative losses
Total deferred gains/(losses)
Net deferred gains/(losses)
Pre-tax gain/(loss) recognized in income
Income Statement Location
Gas purchased for resale
Non-utility revenue
Other operations and maintenance
expense
Other interest expense
Total pre-tax gain/(loss) recognized in income
$(26)
—
$(26)
$(63)
(201)
(37)
$(301)
$(327)
$(2)
7
(3)
(65)
$(63)
$4
(3)
$1
$(91)
(142)
(67)
$(300)
$(299)
$(2)
25
1
(36)
$(12)
$(27)
—
$(27)
$(64)
(177)
(36)
$(277)
$(304)
$—
—
(3)
—
$(3)
$5
(1)
$4
$(83)
(124)
(65)
$(272)
$(268)
$—
—
1
—
$1
The following table presents the hedged volume of Con Edison’s and CECONY’s commodity derivative transactions
at December 31, 2020:
Con Edison
CECONY
Electric Energy
(MWh) (a)(b)
Capacity (MW) (a)
28,102,230
26,193,800
47,258
35,400
Natural Gas
(Dt) (a)(b)
286,819,910
267,380,000
Refined Fuels
(gallons)
7,728,000
7,728,000
(a) Volumes are reported net of long and short positions, except natural gas collars where the volumes of long positions are reported.
(b) Excludes electric congestion and gas basis swap contracts which are associated with electric and gas contracts and hedged volumes.
The Companies are exposed to credit risk related to transactions entered into primarily for the various energy
supply and hedging activities by the Utilities and the Clean Energy Businesses. Credit risk relates to the loss that
may result from a counterparty’s nonperformance. The Companies use credit policies to manage this risk, including
an established credit approval process, monitoring of counterparty limits, netting provisions within agreements,
CON EDISON ANNUAL REPORT 2020
177
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 December 31, 2020, Con Edison and CECONY had $217 million and $16 million of credit exposure in connection
with open energy supply net receivables and hedging activities, net of collateral, respectively. Con Edison’s net
credit exposure consisted of $103 million with independent system operators, $47 million with investment-grade
counterparties, $40 million with non-investment grade/non-rated counterparties, and $27 million with commodity
exchange brokers. CECONY’s net credit exposure consisted of $16 million with commodity exchange brokers.
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 December 31, 2020:
(Millions of Dollars)
Aggregate fair value – net liabilities
Collateral posted
Additional collateral (b) (downgrade one level from current ratings)
Additional collateral (b)(c) (downgrade to below investment grade from current ratings)
Con Edison (a)
CECONY (a)
$293
212
5
101
$277
200
—
85
(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 $25 million at December 31, 2020. For certain other
such non-derivative transactions, the Companies could be required to post collateral under certain circumstances, including in the event
counterparties had reasonable grounds for insecurity.
(b) The Companies measure the collateral requirements by taking into consideration the fair value amounts of derivative instruments that
contain credit-risk-related contingent features that are in a net liability position plus amounts owed to counterparties for settled transactions
and amounts required by counterparties for minimum financial security. The fair value amounts represent unrealized losses, net of any
unrealized gains where the Companies have a legally enforceable right to offset.
(c) Derivative instruments that are net assets have been excluded from the table. At December 31, 2020, if Con Edison had been downgraded
to below investment grade, it would have been required to post additional collateral for such derivative instruments of $51 million.
Note Q – Fair Value Measurements
The accounting rules for fair value measurements and disclosures define fair value as the price that would be
received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the
measurement date in a principal or most advantageous market. Fair value is a market-based measurement that is
determined based on inputs, which refer broadly to assumptions that market participants use in pricing assets or
liabilities. These inputs can be readily observable, market corroborated, or generally unobservable firm inputs. The
Companies often make certain assumptions that market participants would use in pricing the asset or liability,
including assumptions about risk, and the risks inherent in the inputs to valuation techniques. The Companies use
valuation techniques that maximize the use of observable inputs and minimize the use of unobservable inputs.
The accounting rules for fair value measurements and disclosures established a fair value hierarchy, which
prioritizes the inputs to valuation techniques used to measure fair value in three broad levels. The rules require that
assets and liabilities be classified in their entirety based on the level of input that is significant to the fair value
measurement. Assessing the significance of a particular input may require judgment considering factors specific to
the asset or liability, and may affect the valuation of the asset or liability and their placement within the fair value
hierarchy. The Companies classify fair value balances based on the fair value hierarchy defined by the accounting
rules for fair value measurements and disclosures as follows:
178
CON EDISON ANNUAL REPORT 2020
•
•
•
Level 1 – Consists of assets or liabilities whose value is based on unadjusted quoted prices in active markets
at the measurement date. An active market is one in which transactions for assets or liabilities occur with
sufficient frequency and volume to provide pricing information on an ongoing basis. This category includes
contracts traded on active exchange markets valued using unadjusted prices quoted directly from the
exchange.
Level 2 – Consists of assets or liabilities valued using industry standard models and based on prices, other
than quoted prices within Level 1, that are either directly or indirectly observable as of the measurement
date. The industry standard models consider observable assumptions including time value, volatility factors
and current market and contractual prices for the underlying commodities, in addition to other economic
measures. This category includes contracts traded on active exchanges or in over-the-counter markets
priced with industry standard models.
Level 3 – Consists of assets or liabilities whose fair value is estimated based on internally developed models
or methodologies using inputs that are generally less readily observable and supported by little, if any,
market activity at the measurement date. Unobservable inputs are developed based on the best available
information and subject to cost benefit constraints. This category includes contracts priced using models that
are internally developed and contracts placed in illiquid markets. It also includes contracts that expire after
the period of time for which quoted prices are available and internal models are used to determine a
significant portion of the value.
For information on the measurement of Con Edison's investment in MVP, which was measured at fair value on a
non-recurring basis, see Note A. Assets and liabilities measured at fair value on a recurring basis for the years
ended December 31, 2020 and 2019 are summarized below.
(Millions of Dollars)
Level 1 Level 2 Level 3
Adjustment (e) Total Level 1 Level 2 Level 3
Adjustment (e) Total
2020
Netting
2019
Netting
Con Edison
Derivative assets:
Commodity (a)(b)(c)
Interest rate swaps (a)(b)(c)(f)
Other (a)(b)(d)
Total assets
Derivative liabilities:
Commodity (a)(b)(c)
Interest rate swaps (a)(b)(c)(f)
Total liabilities
CECONY
Derivative assets:
Commodity (a)(b)(c)
Other (a)(b)(d)
Total assets
Derivative liabilities:
Commodity (a)(b)(c)
$19
—
431
$42
—
126
$450
$168
$7
—
$7
$296
106
$402
$15
411
$20
120
$426
$140
$4
—
—
$4
$23
—
$23
$—
—
$—
$53
$118
—
—
—
557
$53
$675
$4
—
353
$357
$61
1
125
$187
$2
—
—
$2
$4
—
—
$4
$71
1
478
$550
$46
$372
—
106
$46
$478
$18
—
$18
$174
$18
41
—
$215
$18
$(22)
$188
—
41
$(22)
$229
$(16)
—
$19
531
$3
333
$42
119
$(16)
$550
$336
$161
$1
—
$1
$—
—
$46
452
$— $498
$3
$274
$10
$(19)
$268
$15
$147
$7
$(24)
$145
(a) The Companies’ policy is to review the fair value hierarchy and recognize transfers into and transfers out of the levels at the end of each
reporting period. Con Edison and CECONY had $1 million of commodity derivative liabilities transferred from level 3 to level 2 during the
year ended December 31, 2020 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, 2020 to less than three years as of December 31, 2020. Con Edison and CECONY had
$24 million and $22 million of commodity derivative liabilities transferred from level 3 to level 2 during the year ended December 31, 2019
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, 2017 to less than three years as of December 31, 2019.
(b) Level 2 assets and liabilities include investments held in the deferred compensation plan and/or non-qualified retirement plans, exchange-
traded contracts where there is insufficient market liquidity to warrant inclusion in Level 1, 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 December 31, 2020 and
2019, the Companies determined that nonperformance risk would have no material impact on their financial position or results of
operations.
CON EDISON ANNUAL REPORT 2020
179
(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 P.
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 and interest rate swaps.
Under the Companies’ policies and procedures, multiple independent sources of information are obtained for
forward price curves used to value commodity derivatives and interest rate swaps. Fair value and changes in fair
value of commodity derivatives and interest rate swaps are reported on a monthly basis to the Companies’ risk
committees, comprised of officers and employees of the Companies that oversee energy hedging at the Utilities and
the Clean Energy Businesses. The risk management group reports to the Companies’ Vice President and Treasurer.
Fair Value of Level 3
at December 31, 2020
(Millions of Dollars)
Valuation Techniques
Unobservable Inputs
Range
Con Edison — Commodity
Electricity
(20) Discounted Cash Flow Forward capacity prices (a)
$0.06-$6.26 per kW-month
Transmission Congestion Contracts/
Financial Transmission Rights
1 Discounted Cash Flow
Inter-zonal forward price curves adjusted
for historical zonal losses (b)
$(2.65)-$7.69 per MWh
Total Con Edison — Commodity
$(19)
CECONY — Commodity
Electricity
$(11) Discounted Cash Flow Forward capacity prices (a)
$0.08-$6.26 per kW-month
Transmission Congestion Contracts
1 Discounted Cash Flow
Inter-zonal forward price curves adjusted
for historical zonal losses (b)
$0.23-$1.13 per MWh
Total CECONY — Commodity
$(10)
(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 for the years ended December 31, 2020 and 2019 and classified as Level 3 in the fair value
hierarchy:
(Millions of Dollars)
Beginning balance as of January 1,
Included in earnings
Included in regulatory assets and liabilities
Settlements
Transfer out of level 3
Ending balance as of December 31,
Con Edison
CECONY
2020
$(16)
(10)
(7)
15
(1)
$(19)
2019
$(13)
(5)
18
8
(24)
$(16)
2020
$(6)
(5)
(4)
6
(1)
$(10)
2019
$(2)
—
17
1
(22)
$(6)
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. See Note A. Unrealized gains and losses for
commodity derivatives are generally deferred on the consolidated balance sheet in accordance with the accounting
rules for regulated operations.
For the Clean Energy Businesses, realized and unrealized gains and losses on Level 3 commodity derivative assets
and liabilities are reported in non-utility revenues ($3 million gain and $2 million gain) on the consolidated income
statement for the years ended December 31, 2020 and 2019, respectively. The change in fair value relating to Level
3 commodity derivative assets and liabilities held at December 31, 2020 and 2019 is included in non-utility revenues
($2 million gain) on the consolidated income statement for the years ended December 31, 2020 and 2019.
180
CON EDISON ANNUAL REPORT 2020
Note R – Variable Interest Entities
The accounting rules for consolidation address the consolidation of a variable interest entity (VIE) by a business
enterprise that is the primary beneficiary. A VIE is an entity that does not have a sufficient equity investment at risk
to permit it to finance its activities without additional subordinated financial support, or whose equity investors lack
the characteristics of a controlling financial interest. The primary beneficiary is the business enterprise that has the
power to direct the activities of the VIE that most significantly impact the VIE’s economic performance and either
absorbs a significant amount of the VIE’s losses or has the right to receive benefits that could be significant to the
VIE.
The Companies enter into arrangements including leases, partnerships and electricity purchase agreements, with
various entities. As a result of these arrangements, the Companies retain or may retain a variable interest in these
entities.
CECONY
CECONY has an ongoing long-term electricity purchase agreement with Brooklyn Navy Yard Cogeneration
Partners, LP, a potential VIE. In 2020, a request was made of this counterparty for information necessary to
determine whether the entity was a VIE and whether CECONY is the primary beneficiary; however, the information
was not made available. In April 2017, CECONY's long-term electricity purchase agreement with Cogen
Technologies Linden Venture, LP (Linden Cogeneration), another potential VIE, expired. See Note I for information
on these electricity purchase agreements, the payments pursuant to which constitute CECONY's maximum
exposure to loss with respect to the potential VIEs.
Clean Energy Businesses
In September 2019, the Clean Energy Businesses, which previously owned an 80 percent membership interest in
OCI Solar San Antonio 4 LLC (Texas Solar 4), acquired the remaining 20 percent interest. As a result of the
acquisition, Texas Solar 4 is a consolidated entity. Prior to the acquisition, Con Edison had a variable interest in
Texas Solar 4, as to which Con Edison was the primary beneficiary since the power to direct the activities that most
significantly impact the economics of Texas Solar 4 was held by the Clean Energy Businesses. Texas Solar 4 owns
a project company that developed a 40 MW (AC) solar electric production project. Electricity generated by the
project is sold pursuant to a long-term power purchase agreement. Con Edison's earnings from Texas Solar 4 for
the years ended December 31, 2019 and 2018 were immaterial.
In December 2018, the Clean Energy Businesses completed its acquisition of Sempra Solar Holdings, LLC. See
Note V. Included in the acquisition were certain operating projects (Tax Equity Projects) with a noncontrolling tax
equity investor to which a percentage of earnings, tax attributes and cash flows are allocated. The Tax Equity
Projects are consolidated entities in which Con Edison has less than a 100 percent membership interest. Con
Edison is the primary beneficiary since the power to direct the activities that most significantly impact the economics
of the Tax Equity Projects is held by the Clean Energy Businesses. Electricity generated by the Tax Equity Projects
is sold to utilities and municipalities pursuant to long-term power purchase agreements.
For the year ended December 31, 2020, the hypothetical liquidation at book value (HLBV) method of accounting for
the Tax Equity Projects resulted in $44 million of income ($32 million, after tax) for the tax equity investor and a
$6 million loss ($4 million, after tax) for Con Edison. For the year ended December 31, 2019, the HLBV method of
accounting for the Tax Equity Projects resulted in $98 million of income ($74 million, after tax) for the tax equity
investor and a $64 million loss ($48 million, after tax) for Con Edison, and earnings under the HLBV method for the
year ended December 31, 2018 were immaterial.
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, the company's earnings from the projects are adjusted to
reflect the income or loss allocable to the tax equity investors calculated based on how the project would allocate
and distribute its cash if it were to sell all of its assets for their carrying amounts and liquidate at a particular point in
time. Under the HLBV method, the company calculates the liquidation value allocable to the tax equity investors at
the beginning and end of each period based on the contractual liquidation waterfall and adjusts its income for the
period to reflect the change in the liquidation value allocable to the tax equity investors.
CON EDISON ANNUAL REPORT 2020
181
At December 31, 2020 and 2019, Con Edison’s consolidated balance sheet included the following amounts
associated with its VIEs:
(Millions of Dollars)
Non-utility property, less accumulated depreciation (f)(g)
Other assets
Total assets (a)
Other liabilities
Total liabilities (b)
Tax Equity Projects
Great Valley Solar
(c)(d)
Copper Mountain - Mesquite Solar
(c)(e)
2020
284
39
$323
13
$13
2019
293
40
$333
17
$17
2020
446
176
$622
71
$71
2019
461
128
$589
18
$18
(a) The assets of the Tax Equity Projects represent assets of a consolidated VIE that can be used only to settle obligations of the consolidated
VIE.
(b) The liabilities of the Tax Equity Projects represent liabilities of a consolidated VIE for which creditors do not have recourse to the general
credit of the primary beneficiary.
(c) Con Edison did not provide any financial or other support during the year that was not previously contractually required.
(d) Great Valley Solar consists of the Great Valley Solar 1, Great Valley Solar 2, Great Valley Solar 3 and Great Valley Solar 4 projects, for
which the noncontrolling interest of the tax equity investor was $82 million and $62 million at December 31, 2020 and 2019, respectively.
(e) Copper Mountain - Mesquite Solar consists of the Copper Mountain Solar 4, Mesquite Solar 2 and Mesquite Solar 3 projects for which the
noncontrolling interest of the tax equity investor was $134 million and $126 million at December 31, 2020 and 2019, respectively.
(f) Non-utility property is reduced by accumulated depreciation of $18 million for Great Valley Solar and $30 million for Copper Mountain -
Mesquite Solar at December 31, 2020.
(g) Non-utility property is reduced by accumulated depreciation of $9 million for Great Valley Solar, $15 million for Copper Mountain - Mesquite
Solar at December 31, 2019.
The following table summarizes the VIEs into which the Clean Energy Businesses have entered as of December 31,
2020:
Project Name
Great Valley Solar (c)
Copper Mountain - Mesquite Solar (c)
Generating Capacity (a)
(MW AC)
200
344
Power
Purchase
Agreement
Term in Years
15-20
20-25
Year of
Investment
2018
2018
Location
California
Nevada and
Arizona
Maximum
Exposure to Loss
(Millions of Dollars) (b)
$228
417
(a) Represents ownership interest in the project.
(b) Maximum exposure is equal to the net assets of the project on the consolidated balance sheet less any applicable noncontrolling interest.
Con Edison did not provide any financial or other support during the year that was not previously contractually required.
(c) For the projects comprising Great Valley Solar and Copper Mountain Mesquite Solar, refer to (d) and (e) in the table above.
Note S – Asset Retirement Obligations
The Companies recognize a liability at fair value for legal obligations associated with the retirement of long-lived
assets in the period in which they are incurred, or when sufficient information becomes available to reasonably
estimate the fair value of such legal obligations. When the liability is initially recorded, asset retirement costs are
capitalized by increasing the carrying amount of the related asset. The liability is accreted to its present value each
period and the capitalized cost is depreciated over the useful life of the related asset. The fair value of the asset
retirement obligation liability is measured using expected future cash flows discounted at credit-adjusted risk-free
rates, historical information, and where available, quoted prices from outside contractors. The Companies evaluate
these assumptions underlying the asset retirement obligation liability on an annual basis or as frequently as needed.
The Companies recorded asset retirement obligations associated with the removal of asbestos and asbestos-
containing material in their buildings (other than the structures enclosing generating stations and substations),
electric equipment and steam and gas distribution systems. The Companies also recorded asset retirement
obligations relating to gas and oil pipelines abandoned in place and municipal infrastructure support.
The Companies did not record an asset retirement obligation for the removal of asbestos associated with the
structures enclosing generating stations and substations. For these building structures, the Companies were unable
182
CON EDISON ANNUAL REPORT 2020
to reasonably estimate their asset retirement obligations because the Companies were unable to estimate the
undiscounted retirement costs or the retirement dates and settlement dates. The amount of the undiscounted
retirement costs could vary considerably depending on the disposition method for the building structures, and the
method has not been determined. The Companies anticipate continuing to use these building structures in their
businesses for an indefinite period, and so the retirement dates and settlement dates are not determinable.
Con Edison recorded asset retirement obligations for the removal of the Clean Energy Businesses’ solar and wind
equipment related to projects located on property that is not owned by them and the term of the arrangement is
finite including any renewal options. Con Edison did not record asset retirement obligations for the Clean Energy
Businesses’ projects that are located on property that is owned by them because they expect that the equipment will
continue to generate electricity at these facilities long past the manufacturer’s warranty at minimal operating
expense. Therefore, Con Edison was unable to reasonably estimate the retirement date of this equipment.
The Utilities include in depreciation rates the estimated removal costs, less salvage, for utility plant assets. The
amounts related to removal costs that are associated with asset retirement obligations are classified as an asset
retirement liability. Pursuant to accounting rules for regulated operations, future removal costs that do not represent
legal asset retirement obligations are recorded as regulatory liabilities. Accretion and depreciation expenses related
to removal costs that represent legal asset retirement obligations are applied against the Companies’ regulatory
liabilities. Asset retirement costs that are recoverable from customers are recorded as regulatory liabilities to reflect
the timing difference between costs recovered through the rate-making process and recognition of costs.
At December 31, 2020, the liabilities for asset retirement obligations of Con Edison and CECONY were $576 million
and $508 million, respectively. At December 31, 2019, the liabilities for asset retirement obligations of Con Edison
and CECONY were $425 million and $362 million, respectively. The change in liabilities at December 31, 2020 was
due to changes in estimated cash flows of $191 million and $186 million for Con Edison and CECONY, respectively,
and accretion expense of $16 million and $13 million for Con Edison and CECONY, respectively. The changes were
offset by liabilities settled of $56 million and $53 million for Con Edison and CECONY, respectively. The change in
liabilities at December 31, 2019 was due to changes in estimated cash flows of $(1) million and $96 million for Con
Edison and CECONY, respectively, and accretion expense of $14 million and $12 million for Con Edison and
CECONY, respectively. The changes were offset by liabilities settled of $38 million for both Con Edison and
CECONY. Con Edison and CECONY also recorded reductions of $49 million and $44 million during the years ended
December 31, 2020 and 2019, respectively, to the regulatory liability associated with cost of removal to reflect
depreciation and interest expense.
Note T – 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. See
“Dividends” in Note C. As a result, substantially all of the net assets of CECONY and O&R ($14,849 million and
$807 million, respectively), at December 31, 2020, 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. See “Rate
Plans” in Note B.
The costs of administrative and other services provided by CECONY to, and received by it from, Con Edison and its
other subsidiaries for the years ended December 31, 2020, 2019 and 2018 were as follows:
(Millions of Dollars)
Cost of services provided
Cost of services received
2020
$128
66
CECONY
2019
$121
64
2018
$115
73
CON EDISON ANNUAL REPORT 2020
183
In addition, CECONY and O&R have joint gas supply arrangements in connection with which CECONY sold to O&R
$59 million, $71 million and $83 million of natural gas for the years ended December 31, 2020, 2019 and 2018,
respectively. These amounts are net of the effect of related hedging transactions.
The Utilities perform work and incur expenses on behalf of NY Transco, a company in which CET Electric has a
45.7 percent equity interest. The Utilities bill NY Transco for such work and expenses in accordance with
established policies. For the years ended December 31, 2020 and 2019, the amounts billed by the Utilities to NY
Transco were immaterial. In May 2016, CECONY transferred certain electric transmission projects to NY Transco.
CECONY has storage and wheeling service contracts with Stagecoach Gas Services LLC, (Stagecoach), a joint
venture formed by a subsidiary of CET Gas and a subsidiary of Crestwood Equity Partners LP (Crestwood). In
addition, CECONY is the replacement shipper on one of Crestwood’s firm transportation agreements with
Tennessee Gas Pipeline Company LLC. CECONY incurred costs for storage and wheeling services from
Stagecoach of $34 million, $33 million and $28 million for the years ended December 31, 2020, 2019 and 2018,
respectively.
CECONY has a 20-year transportation contract with Mountain Valley Pipeline, LLC (MVP) for 250,000 dekatherms
per day of capacity. CET Gas owns an 11.3 percent equity interest in MVP (that is expected to be reduced to 8.8
percent). See "Investments" 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. For the years ended
December 31, 2020 and 2019, CECONY incurred no costs under the contract.
FERC has authorized CECONY to lend funds to O&R for a period of not more than 12 months, in an amount not to
exceed $250 million, at prevailing market rates. At December 31, 2020 and 2019 there were no outstanding loans to
O&R.
The Clean Energy Businesses had financial electric capacity contracts with CECONY and O&R during 2020 and
2019. For the years ended December 31, 2020 and 2019, the Clean Energy Businesses realized an immaterial loss
and a $1 million loss, respectively, under these contracts.
Note U – New Financial Accounting Standards
In December 2019, the FASB issued amendments to the guidance for income taxes through ASU 2019-12, “Income
Taxes (Topic 740): Simplifying the Accounting for Income Taxes.” The amendments in this update simplify the
accounting for income taxes by removing certain exceptions such as: 1) the incremental approach for intraperiod tax
allocation when there is a loss from continuing operations and income or a gain from other items, 2) the requirement
to recognize a deferred tax liability for equity method investments when a foreign subsidiary becomes an equity
method investment, 3) the ability not to recognize a deferred tax liability for a foreign subsidiary when a foreign
equity method investment becomes a subsidiary, and 4) the general methodology for calculating income taxes in an
interim period when a year-to-date loss exceeds the anticipated loss for the year. For public entities, the
amendments are effective for reporting periods beginning after December 15, 2020. Early adoption is permitted. The
application of this guidance will not have a material impact on the Companies’ financial position, results of
operations and liquidity.
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. In November 2020,
LIBOR’s administrator announced it plans to consult on its intention to cease publication of one-week and two-
month U.S. Dollar LIBOR immediately after the LIBOR publication on December 31, 2021, and the remaining U.S.
Dollar LIBOR tenors immediately after publication on June 30, 2023. 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
184
CON EDISON ANNUAL REPORT 2020
do not directly reference LIBOR or another reference rate expected to be discontinued, and clarify which optional
expedients may be applied to them. The guidance can be applied prospectively from any date beginning March 12,
2020. The optional relief is temporary and generally cannot be applied to contract modifications and hedging
relationships entered into or evaluated after December 31, 2022. The Companies do not expect the new guidance
to have a material impact on their financial position, results of operations or liquidity.
Note V – Acquisitions and Investments
Sempra Solar
In December 2018, the Clean Energy Businesses completed their acquisition of Sempra Solar Holdings, LLC, a
Sempra Energy subsidiary, for $1,609 million, including working capital and other closing adjustments of $69 million.
In 2019, Con Edison finalized the purchase price allocation and reclassified approximately $100 million which
primarily decreased property, plant and equipment and asset retirement obligations, the impact of which was not
material to earnings. The reclassification was recorded within the one year available to finalize the purchase price
allocation.
The acquired company has ownership interests in 981 megawatts (AC) of operating renewable electric production
projects, including its 379 megawatts (AC) share of projects in which its subsidiaries had a 50 percent ownership
interest (Acquired JV Interests) and the Clean Energy Businesses had the remaining ownership interests
(Previously-Owned JV Interests), and certain development rights with respect to solar electric production and
energy storage projects.
At the acquisition date, the acquired company’s subsidiaries had $1,354 million of tangible assets consisting mostly
of property, plant and equipment, $878 million of intangible assets mostly arising from power purchase agreements,
$4 million of other noncurrent assets, $568 million of project debt (including, in each case, amounts associated with
the Acquired JV Interests) and $28 million of asset retirement obligation liabilities. The weighted average
amortization period for these intangible assets is 16 years. At the acquisition date, the fair value of the
noncontrolling interest attributable to the tax equity investors (see below) was $100 million. The acquisition date
valuation was performed using a discounted cash flow approach. The fair values of assets acquired and liabilities
assumed were determined based on significant estimates and assumptions that are judgmental in nature, including
projected amounts and timing of future cash flows, discount rates reflecting risk inherent in the future cash flows and
future power prices.
Upon completion of the acquisition, the acquisition date fair value of the Previously-Owned JV Interests increased
from $437 million to $568 million and Con Edison recognized a pre-tax gain of $131 million ($89 million or $0.28 per
share net of taxes). Prior to the acquisition, Con Edison had been accounting for the Previously-Owned JV Interests
under the equity method. Upon completion of the acquisition, Con Edison is accounting for Acquired JV Interests
and the Previously-Owned JV Interests on a consolidated basis.
Certain projects acquired have tax equity investors to which a percentage of earnings, tax attributes and cash flows
are allocated. See Note R.
Con Edison's revenues and net income for the years ended December 31, 2018 and 2017 as reported and pro
forma to account on a consolidated basis for the acquisition as if the acquisition had been completed on January 1,
2017 instead of December 13, 2018 are as follows:
(Millions of Dollars)
As Reported
Revenue
Net income
PRO FORMA SUPPLEMENTAL INFORMATION
If Acquired January 1, 2017 (a)(b)
Revenue
Net income
(a) Reflects the following material adjustments:
Years ended December 31,
2018
2017
$12,337
1,382
$12,655
1,279
$12,033
1,525
$12,331
1,612
CON EDISON ANNUAL REPORT 2020
185
•
included additional interest expense of $37 million and $38 million in 2018 and 2017, respectively, that would have been incurred if $825
million that was borrowed in December 2018 under a variable rate term loan agreement to fund a portion of the purchase price for the
acquisition had instead been borrowed for such purpose on January 1, 2017 at a fixed rate of 4.64% per annum; and
• with respect to the Previously-Owned JV Interests: eliminated the $131 million purchase accounting gain (pre-tax) that Con Edison
recognized upon the completion of the acquisition in 2018 and reflected the $131 million purchase accounting gain in 2017; recorded the
corresponding increase to the book value of the related net utility plant and power purchase agreement intangible asset as of January 1,
2017 instead of December 13, 2018, and included the increased depreciation and amortization expense in 2018 and 2017; and
eliminated $33 million and $32 million of other income that Con Edison had recorded in 2018 and 2017, respectively, under the equity
method of accounting.
(b) Recalculating each investor’s claim on the investee’s assets under the contractual liquidation waterfall as if the acquisition had been
completed on January 1, 2017 is impracticable. Accordingly, no HLBV adjustments were made.
186
CON EDISON ANNUAL REPORT 2020
Condensed Financial Information of Consolidated Edison, Inc. (a)
Condensed Statement of Income and Comprehensive Income
(Parent Company Only)
(Millions of Dollars, except per share amounts)
Equity in earnings of subsidiaries
Other income (deductions), net of taxes
Interest expense
Net Income
Comprehensive Income
Net Income Per Share – Basic
Net Income Per Share – Diluted
Dividends Declared Per Share
Average Number Of Shares Outstanding—Basic (In Millions)
Average Number Of Shares Outstanding—Diluted (In Millions)
Schedule I
For the Years Ended December 31,
2020
$1,105
56
(60)
$1,101
$1,095
$3.29
$3.28
$3.06
334.8
335.7
2019
$1,354
76
(87)
$1,343
$1,340
$4.09
$4.08
$2.96
328.5
329.5
2018
$1,447
(6)
(59)
$1,382
$1,392
$4.43
$4.42
$2.86
311.1
312.9
(a) These financial statements, in which Con Edison’s subsidiaries have been included using the equity method, should be read together with
its consolidated financial statements and the notes thereto appearing above.
CON EDISON ANNUAL REPORT 2020
187
Condensed Financial Information of Consolidated Edison, Inc. (a)
Condensed Statement of Cash Flows
(Parent Company Only)
(Millions of Dollars)
Net Income
Equity in earnings of subsidiaries
Dividends received from:
CECONY
O&R
Clean Energy Businesses
Con Edison Transmission
Change in Assets:
Special deposits
Income taxes receivable
Other – net
Net Cash Flows from Operating Activities
Investing Activities
Contributions to subsidiaries
Debt receivable from affiliated companies
Net Cash Flows Used in Investing Activities
Financing Activities
Net proceeds of short-term debt
Issuance of long-term debt
Retirement of long-term debt
Debt issuance costs
Issuance of common shares for stock plans, net of repurchases
Issuance of common shares - public offering
Common stock dividends
Net Cash Flows Used in Financing Activities
Net Change for the Period
Balance at Beginning of Period
Balance at End of Period
For the Years Ended December 31,
2020
1,101
(1,105)
982
49
21
11
—
—
654
1,713
(626)
400
(226)
(537)
650
(1,178)
(3)
58
640
(975)
(1,345)
142
2
$144
2019
1,343
(1,354)
2018
1,382
(1,447)
912
47
3
12
(3)
25
44
846
46
15
10
(8)
2
187
1,029
1,033
(930)
450
(480)
(783)
825
(553)
—
54
825
(924)
(556)
(7)
9
$2
(1,110)
(825)
(1,935)
164
825
(3)
—
53
705
(842)
902
—
9
$9
(a) These financial statements, in which Con Edison’s subsidiaries have been included using the equity method, should be read together with
its consolidated financial statements and the notes thereto appearing above.
188
CON EDISON ANNUAL REPORT 2020
Condensed Financial Information of Consolidated Edison, Inc. (a)
Condensed Balance Sheet
(Parent Company Only)
(Millions of Dollars)
Assets
Current Assets
Cash and temporary cash investments
Accounts receivable - other
Income taxes receivable
Term loan receivable from affiliated companies
Accounts receivable from affiliated companies
Prepayments
Other current assets
Total Current Assets
Investments in subsidiaries and others
Goodwill
Deferred income tax
Long-term debt receivable from affiliated companies
Other noncurrent assets
Total Assets
Liabilities and Shareholders’ Equity
Current Liabilities
Long-term debt due within one year
Term loan
Notes payable
Accounts payable
Accounts payable to affiliated companies
Accrued taxes
Other current liabilities
Total Current Liabilities
Deferred income tax
Total Liabilities
Long-term debt
Shareholders’ Equity
Common stock, including additional paid-in capital
Retained earnings
Total Shareholders’ Equity
Total Liabilities and Shareholders’ Equity
December 31,
2020
2019
$144
1
18
—
1,256
62
12
1,493
18,670
406
55
875
—
$21,499
$1,178
—
—
—
517
6
12
1,713
—
1,713
939
8,844
10,003
18,847
$21,499
$2
18
—
870
32
12
934
18,009
406
14
1,275
—
$20,638
$3
—
537
—
595
2
10
1,147
—
1,147
1,469
8,089
9,933
18,022
$20,638
(a) These financial statements, in which Con Edison’s subsidiaries have been included using the equity method, should be read together with
its consolidated financial statements and the notes thereto appearing above.
CON EDISON ANNUAL REPORT 2020
189
Valuation and Qualifying Accounts
For the Years Ended December 31, 2020, 2019 and 2018
Schedule II
Company
(Millions of Dollars)
Con Edison
COLUMN A
Description
Allowance for uncollectible
accounts (a):
CECONY
Allowance for uncollectible
accounts (a):
COLUMN C
Additions
COLUMN B
Balance at
Beginning
of Period
(1)
Charged To
Costs And
Expenses
(2)
Charged
To Other
Accounts
COLUMN D
Deductions
(b)
COLUMN E
Balance
At End of
Period
2020
2019
2018
2020
2019
2018
$74
$68
$70
$68
$61
$65
$72
$77
$62
$65
$72
$56
$—
$—
$—
$—
$—
$—
$8
$(71)
$(64)
$10
$(65)
$(60)
$154
$74
$68
$143
$68
$61
(a) This is a valuation account deducted in the balance sheet from the assets (Accounts receivable - customers and Other receivables) to
which they apply.
(b) Accounts written off less cash collections, miscellaneous adjustments and amounts reinstated as receivables previously written off.
190
CON EDISON ANNUAL REPORT 2020
Item 9: Changes in and Disagreements with Accountants on Accounting and Financial Disclosure
Con Edison
None.
CECONY
None.
Item 9A: Controls and Procedures
The Companies maintain disclosure controls and procedures designed to provide reasonable assurance that the
information required to be disclosed in the reports that they submit to the Securities and Exchange Commission
(SEC) is recorded, processed, summarized and reported within the time periods specified in the rules and forms of
the SEC. Disclosure controls and procedures include, without limitation, controls and procedures designed to
ensure that information required to be disclosed by an issuer in the reports that it files or submits under the
Securities Exchange Act of 1934, as amended, is accumulated and communicated to the issuer’s management,
including its principal executive and principal financial officers, or persons performing similar functions, as
appropriate to allow timely decisions regarding required disclosure. For each of the Companies, its management,
with the participation of its principal executive officer and principal financial officer, has evaluated its disclosure
controls and procedures as of the end of the period covered by this report and, based on such evaluation, has
concluded that the controls and procedures are effective to provide such reasonable assurance. Reasonable
assurance is not absolute assurance, however, and there can be no assurance that any design of controls or
procedures would be effective under all potential future conditions, regardless of how remote.
For the Companies’ Reports of Management On Internal Control Over Financial Reporting and the related opinions
of PricewaterhouseCoopers LLP (presented in the Reports of Independent Registered Public Accounting Firm), see
Item 8 of this report (which information is incorporated herein by reference).
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.
Item 9B: Other Information
Con Edison
None.
CECONY
None.
CON EDISON ANNUAL REPORT 2020
191
Part III
Item 10: Directors, Executive Officers and Corporate Governance
Item 11: Executive Compensation
Item 12: Security Ownership of Certain Beneficial Owners and Management and Related Stockholder
Matters
Item 13: Certain Relationships and Related Transactions, and Director Independence
Item 14: Principal Accounting Fees and Services
Con Edison
Information required by Part III as to Con Edison, other than the information required in Item 12 of this report by
Item 201(d) of Regulation S-K, is incorporated by reference from Con Edison’s definitive proxy statement for its
Annual Meeting of Stockholders to be held on May 17, 2021. The proxy statement is to be filed pursuant to
Regulation 14A not later than 120 days after December 31, 2020, the close of the fiscal year covered by this report.
The information required pursuant to Item 201(d) of Regulation S-K as at December 31, 2020 is as follows:
Equity Compensation Plan Information
Plan category
Equity compensation plans approved
by security holders
2003 LTIP (a)
2013 LTIP (b)
Stock Purchase Plan (c)
Total equity compensation plans
approved by security holders
Total equity compensation plans not
approved by security holders
Total
Number of securities to
be issued upon
exercise of
outstanding options,
warrants and rights
(1)
Weighted-average
exercise price of
outstanding options,
warrants and rights
(2)
Number of securities
remaining available for
future issuance under
equity compensation
plans (excluding
securities reflected in
column (1))
(3)
191,425
1,316,301
—
1,507,726
1,500 (d)
1,509,226
—
—
—
—
—
—
—
4,171,080
4,975,678
9,146,758
—
9,146,758
(a) The number of shares of Con Edison common stock that may be issued pursuant to outstanding awards under the Long Term Incentive
Plan approved by the company’s shareholders in 2003 (the “2003 LTIP”) include 191,425 shares for stock unit awards made prior to 2013
that have vested and for which the receipt of shares was deferred. Amounts do not include shares that may be issued pursuant to any
dividend reinvestment in the future on the deferred stock units. There is no dividend reinvestment on the other outstanding awards.
Outstanding awards had no exercise price. No new awards may be made under the 2003 LTIP.
(b) The number of shares of Con Edison common stock that may be issued pursuant to outstanding awards under the Long Term Incentive
Plan approved by the company’s shareholders in 2013 (the “2013 LTIP”) include: (A) outstanding awards made in 2014 and subsequent
years (956,834 shares for performance restricted stock units and 67,438 shares for time-based restricted stock units); (B) 292,029 shares
covered by outstanding directors’ deferred stock unit awards (which vested upon grant). Amounts do not include shares that may be issued
pursuant to any dividend reinvestment in the future on the deferred stock units. There is no dividend reinvestment on the other outstanding
awards. The outstanding awards had no exercise price. No new awards may be made under the 2013 LTIP after May 20, 2023.
(c) Shares of Con Edison common stock may be issued under the Stock Purchase Plan until May 19, 2024 (which is 10 years after the date of
the annual meeting at which Con Edison’s shareholders approved the plan).
(d) This amount represents shares to be issued to an officer who had elected to defer receipt of these shares until separation from service or
later. These shares are issuable pursuant to awards of restricted stock units made in 2000, which vested in 2004.
For additional information about Con Edison’s stock-based compensation, see Note N to the financial statements in
Item 8 of this report (which information is incorporated herein by reference).
In accordance with General Instruction G(3) to Form 10-K, other information regarding Con Edison’s Executive
Officers may be found in Part I of this report under the caption “Executive Officers of the Registrant.”
192
CON EDISON ANNUAL REPORT 2020
CECONY
Information required by Items 10, 11, 12 and 13 of Part III as to CECONY is omitted pursuant to Instruction (I)(2) to
Form 10-K (Omission of Information by Certain Wholly-Owned Subsidiaries).
Fees paid or payable by CECONY to its principal accountant, PricewaterhouseCoopers LLP, for services related to
2020 and 2019 are as follows:
Audit fees
Audit-related fees (a)
Total fees
2020
2019
$3,551,252
$3,645,575
1,145,994
—
$4,697,246
$3,645,575
(a) Relates to assurance and related service fees that are reasonably related to the performance of the annual audit or quarterly reviews of the
company's financial statements that are not specifically deemed “Audit Services.” The major items included in audit-related fees in 2020 are
fees related to reviews of system implementations and associated internal controls.
Con Edison’s Audit Committee or, as delegated by the Audit Committee, the Chair of the Committee, approves in
advance each auditing service and non-audit service permitted by applicable laws and regulations, including tax
services, to be provided to CECONY by its independent accountants.
CON EDISON ANNUAL REPORT 2020
193
Part IV
Item 15: Exhibits and Financial Statement Schedules
(a) Documents filed as part of this report:
1. List of Financial Statements – See financial statements listed in Item 8.
2. List of Financial Statement Schedules – See schedules listed in Item 8.
3. List of Exhibits
Exhibits listed below which have been filed previously with the Securities and Exchange Commission pursuant to
the Securities Act of 1933 and the Securities Exchange Act of 1934, and which were designated as noted below, are
hereby incorporated by reference and made a part of this report with the same effect as if filed with the report.
Exhibits listed below that were not previously filed are filed herewith.
194
CON EDISON ANNUAL REPORT 2020
Con Edison
3.1.1 Restated Certificate of Incorporation of Consolidated Edison, Inc. (Designated in Con Edison’s Annual Report on Form 10-K for the
year ended December 31, 2017 (File No. 1-14514) as Exhibit 3.1.1)
3.1.2 By-laws of Con Edison, effective as of February 16, 2017. (Designated in Con Edison’s Current Report on Form 8-K, dated
February 16, 2017 (File No. 1-14514) as Exhibit 3.1)
4.1.1 Description of Con Edison's Common Shares ($.10 par value). (Designated in Con Edison’s Annual Report on Form 10-K for the
year ended December 31, 2019 (File No. 1-14514) as Exhibit 4.1.1)
4.1.2.1
Indenture, dated as of April 1, 2002, between Con Edison and JP Morgan Chase Bank (formerly known as The Chase Manhattan
Bank), as Trustee. (Designated in Con Edison's Registration Statement on Form S-3 of Con Edison (No. 333-102005) as Exhibit 4.1)
4.1.2.2 First Supplemental Indenture, dated as of August 1, 2009, between Con Edison and The Bank of New York Mellon (formerly known
as The Bank of New York (successor as trustee to JPMorgan Chase Bank, N.A. (formerly known as JPMorgan Chase Bank))),
as Trustee. (Designated in Con Edison’s Registration Statement (No. 333-161018) as Exhibit 4.2)
4.1.2.3 Form of Con Edison’s 2.00% Debentures, Series 2016 A. (Designated in Con Edison's Current Report on Form 8-K, dated May 10,
2016 (File No. 1-14514) as Exhibit 4)
4.1.2.4 Form of Con Edison's 0.65% Debentures, Series 2020 A. (Designated in Con Edison’s Current Report on Form 8-K, dated
November 30, 2020 (File No. 1-14514) as Exhibit 4)
4.1.3 Note Assumption and Exchange Agreement, dated as of June 20, 2008, between Con Edison and the institutional investors listed
in Schedule I thereto. (Designated in Con Edison’s Current Report on Form 8-K, dated June 20, 2008 (File No. 1-14514) as Exhibit
4)
10.1.1.1 Credit Agreement, dated as of December 7, 2016, among CECONY, Con Edison, O&R, the lenders party thereto and Bank of
America, N.A., as Administrative Agent. (Designated in Con Edison’s Current Report on Form 8-K dated December 7, 2016 (File
No. 1-14514) as Exhibit 10)
10.1.1.2 Extension Agreement, dated as of January 8, 2018, among CECONY, Con Edison, O&R, the lenders party thereto and Bank of
America, N.A., as Administrative Agent. (Designated in Con Edison's Current Report on Form 8-K dated January 8, 2018 (File
No. 1-14514) as Exhibit 10)
10.1.1.3 Extension Agreement and First Amendment to Credit Agreement, effective April 1, 2019, among CECONY, Con Edison, O&R, the
lenders party thereto and Bank of America, N.A., as Administrative Agent. (Designated in Con Edison’s Current Report on Form 8-K
dated April 1, 2019 (File No. 1-14514) as Exhibit 10)
10.1.2.1 Severance Program for Officers of Consolidated Edison, Inc. and its Subsidiaries, as amended, effective as of January 1, 2008.
(Designated in Con Edison’s Annual Report on Form 10-K for the year ended December 31, 2008 (File No. 1-14514) as Exhibit
10.1.3)
10.1.2.2 Amendment #1, dated December 19, 2012, to the Severance Program for Officers of Consolidated Edison, Inc. and its
Subsidiaries., dated December 19, 2012, to the Severance Program for Officers of Consolidated Edison, Inc. and its
Subsidiaries. (Designated in Con Edison’s Annual Report on Form 10-K for the year ended December 31, 2012 (File No.
1-14514) as Exhibit 10.1.4.2)
10.1.2.3 Amendment to the Severance Program for Officers of Consolidated Edison, Inc. and its Subsidiaries. (Designated in Con Edison’s
Quarterly Report on Form 10-Q for the quarterly period ended June 30, 2017 (File No. 1-14514 as Exhibit 10.1)
10.1.3.1 The Consolidated Edison, Inc. Stock Purchase Plan, as amended and restated as of May 19, 2014. (Designated in Con Edison’s
Current Report on Form 8-K dated May 19, 2014 (File No. 1-14514) as Exhibit 10)
10.1.3.2
Amendment One
K for the
to
year ende
The
d De
Consolidated Edison, Inc. Stock Purchase
cember 31, 2016 (File
No. 1-14514) as Exhib
Plan.
it 10
(Designated in Con Edison's Current Report on Form 10-
.1.3.2)
10.1.3.3 Amendment Two to The Consolidated Edison, Inc. Stock Purchase Plan. (Designated in Con Edison's Quarterly Report on Form
10-Q for the quarterly period ended September 30, 2020 (File No. 1-14514) as Exhibit 10)
10.1.3.4 Amendment Three to The Consolidated Edison, Inc. Stock Purchase Plan.
10.1.4.1 The Consolidated Edison Retirement Plan. (Designated in Con Edison’s Quarterly Report on Form 10-Q for the quarterly period
ended March 31, 2017 (File No. 1-14514) as Exhibit 10.1.1)
10.1.4.2 Amendment to the Consolidated Edison Retirement Plan. (Designated in Con Edison’s Quarterly Report on Form 10-Q for the
quarterly period ended September 30, 2017 (File No. 1-14514) as Exhibit 10.1.1)
10.1.4.3 Amendment to the Consolidated Edison Retirement Plan. (Designated in Con Edison’s Quarterly Report on Form 10-Q for the
quarterly period ended September 30, 2017 (File No. 1-14514) as Exhibit 10.1.2)
10.1.4.4 Amendment, dated December 18, 2017, to the Consolidated Edison Retirement Plan .(Designated in Con Edison’s Annual Report
on Form 10-K for the year ended December 31, 2017 (File No. 1-14514) as Exhibit 10.1.4.2)
10.1.4.5 Amendment to the Consolidated Edison Retirement Plan, effective January 1, 2019. (Designated in Con Edison’s Annual Report on
Form 10-K for the year ended December 31, 2019 (File No. 1-14514) as Exhibit 10.1.4.5)
10.1.4.6 Amendment to the Consolidated Edison Retirement Plan, effective August 1, 2019. (Designated in Con Edison’s Annual Report on
Form 10-K for the year ended December 31, 2019 (File No. 1-14514) as Exhibit 10.1.4.6)
10.1.4.7 Amendment to the Consolidated Edison Retirement Plan, effective August 1, 2019. (Designated in Con Edison’s Annual Report on
Form 10-K for the year ended December 31, 2019 (File No. 1-14514) as Exhibit 10.1.4.7)
10.1.4.8 Amendment to the Consolidated Edison Retirement Plan, effective March 27, 2020. (Designated in Con Edison’s Quarterly Report
on Form 10-Q for the quarterly period ended June 30, 2020 (File No. 1-14514) as Exhibit 10.2)
10.1.4.9 Amendment to the Consolidated Edison Retirement Plan, effective January 31, 2020.
CON EDISON ANNUAL REPORT 2020
195
10.1.5.1 The Consolidated Edison Thrift Savings Plan. (Designated in Con Edison’s Quarterly Report on Form 10-Q for the quarterly period
ended March 31, 2017 (File No. 1-14514) as Exhibit 10.1.2)
10.1.5.2 Amendment, dated December 18, 2017, to the Consolidated Edison Thrift Savings Plan. (Designated in Con Edison's Annual
Report on 10-K for the year ended December 31, 2017 (File No. 1-14514) as Exhibit 10.1.5.3
10.1.5.3 Amendment to the Consolidated Edison Thrift Savings Plan, effective January 1, 2019. (Designated in Con Edison's Annual
Report on 10-K for the year ended December 31, 2019 (File No. 1-14514) as Exhibit 10.1.5.3)
10.1.5.4 Amendment to the Consolidated Edison Thrift Savings Plan, effective August 1, 2019. (Designated in Con Edison's Annual Report
on 10-K for the year ended December 31, 2019 (File No. 1-14514) as Exhibit 10.1.5.4)
10.1.5.5 Amendment to the Consolidated Edison Thrift Savings Plan, effective August 1, 2019. (Designated in Con Edison's Annual Report
on 10-K for the year ended December 31, 2019 (File No. 1-14514) as Exhibit 10.1.5.5)
10.1.5.6 Amendment to the Consolidated Edison Thrift Savings Plan, effective January 1, 2020.
10.1.6 Consolidated Edison, Inc. Supplemental Defined Contribution Pension Plan. (Designated in Con Edison’s Quarterly Report on Form
10-Q for the quarterly period ended September 30, 2019 (File No. 1-14514) as Exhibit 10.1)
10.1.7.1 Consolidated Edison, Inc. Long Term Incentive Plan (2003), as amended and restated effective as of December 26, 2012.
(Designated in Con Edison’s Annual Report on Form 10-K for the year ended December 31, 2012 (File No. 1-14514) as Exhibit
10.1.8.1)
10.1.7.2 Form of Stock Option Agreement under the Con Edison Long Term Incentive Plan. (Designated in Con Edison’s Current Report on
Form 8-K, dated January 24, 2005, (File No. 1-14514) as Exhibit 10.3)
10.1.7.3 Amendment Number 1, effective July 1, 2010, to the Consolidated Edison, Inc. Long Term Incentive Plan, as amended and
restated effective as of January 1, 2008. (Designated in Con Edison’s Quarterly Report on Form 10-Q for the quarterly period
ended June 30, 2010 as Exhibit 10.1)
10.1.7.4 Amendment Number 2, effective January 1, 2011, to the Consolidated Edison, Inc. Long Term Incentive Plan, as amended and
restated effective as of January 1, 2008. (Designated in Con Edison’s Annual Report on Form 10-K for the year ended
December 31, 2010 (File No. 1-14514) as Exhibit 10.1.7.5)
10.1.8.1 Consolidated Edison, Inc. Long Term Incentive Plan. (Designated in Con Edison’s Current Report on Form 8-K, dated May 20,
2013 (File No. 1-14514) as Exhibit 10)
10.1.8.2 Amendment No. 1 to the Consolidated Edison, Inc. Long Term Incentive Plan. (Designated in Con Edison’s Annual Report on
Form 10-K for the year ended December 31, 2016 (File No. 1-14514) as Exhibit 10.1.7.4)
10.1.8.3 Amendment No. 2 to the Consolidated Edison, Inc. Long Term Incentive Plan. (Designated in Con Edison’s Annual Report on
Form 10-K for the year ended December 31, 2016 (File No. 1-14514) as Exhibit 10.1.7.5)
10.1.9 Description of Directors’ Compensation, effective as of December 31,2020.
10.1.10 Letter, dated February 23, 2004, to Robert Hoglund. (Designated in Con Edison’s Current Report on Form 8-K, dated July 21,
2005, (File No. 1-14514) as Exhibit 10.5)
10.1.11 Employment offer letter between Con Edison and Timothy P. Cawley, dated November 19, 2020. (Designated in Con Edison’s
Current Report on Form 8-K, dated November 19, 2020 (File No. 1-14514) as Exhibit 10)
10.1.12 Contribution Agreement, dated as of April 20, 2016, by and between Crestwood Pipeline and Storage Northeast LLC and Con
Edison Gas Pipeline and Storage Northeast, LLC. (Designated in Con Edison’s Current Report on Form 8-K, dated April 20, 2016
(File No. 1-14514) as Exhibit 10)
10.1.13 Purchase and Sale Agreement, dated as of September 20, 2018, by and between Sempra Solar Portfolio Holdings, LLC and CED
Southwest Holdings, Inc. (Designated in Con Edison’s Current Report on Form 8-K, dated September 20, 2018)
(File No.1-14514) as Exhibit 2)
10.1.14 Credit Agreement, dated as of November 29, 2018, among Con Edison, the Lenders party thereto and Citibank, N.A, as
Administrative Agent. (Designated in Con Edison’s Current Report on Form 8-K, dated December 13, 2018 (File No.
1-14514) as Exhibit 10)
10.1.15 Credit Agreement, dated as of February 11, 2019, among Con Edison, the Lenders party thereto and Mizuho Bank, Ltd. as
Administrative Agent. (Designated in Con Edison’s Current Report on Form 8-K, dated February 11, 2019 (File No. 1-14514)
as Exhibit 10)
10.1.15.1 First Amendment to Credit Agreement dated as of January 29, 2021, among Con Edison, the Lenders party thereto and Mizuho
Bank, Ltd. As Administrative Agent
10.1.16 Confirmation of Forward Sale Transaction, dated May 7, 2019, between Con Edison and Wells Fargo Bank National Association.
(Designated in Con Edison’s Current Report on Form 8-K, dated May 7, 2019 (File No. 1-14514) as Exhibit 10)
10.1.17.1 Supplemental Credit Agreement, dated as of April 6, 2020, among Con Edison, the lenders party thereto and Bank of America,
N.A., as Administrative Agent. (Designated in Con Edison’s Current Report on Form 8-K, dated April 6, 2020 (File No. 1-14514) as
Exhibit 10)
10.1.17.2 Commitment Increase Supplement, dated as of June 26, 2020, among Con Edison, the lenders party thereto and Bank of
America, N.A., as Administrative Agent. (Designated in Con Edison’s Current Report on Form 8-K, dated June 26, 2020 (File
No. 1-14514) as Exhibit 10)
21.1 Subsidiaries of Con Edison (Designated in Con Edison's Annual Report on Form 10-K for the year ended December 31, 2019 (File
No. 1-14514) as Exhibit 21.1)
196
CON EDISON ANNUAL REPORT 2020
23.1 Consent of PricewaterhouseCoopers LLP
31.1.1 Rule 13a-14(a)/15d-14(a) Certifications – Chief Executive Officer
31.1.2 Rule 13a-14(a)/15d-14(a) Certifications – Chief Financial Officer
32.1.1 Section 1350 Certifications – Chief Executive Officer
32.1.2 Section 1350 Certifications – Chief Financial Officer
101.INS XBRL Instance Document
101.SCH XBRL Taxonomy Extension Schema
101.CAL XBRL Taxonomy Extension Calculation Linkbase
101.DEF XBRL Taxonomy Extension Definition Linkbase
101.LAB XBRL Taxonomy Extension Label Linkbase
101.PRE XBRL Taxonomy Extension Presentation Linkbase
104 Cover Page Interactive Data File - The cover page iXBRL 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.
CECONY
3.2.1.1 Restated Certificate of Incorporation of CECONY filed with the Department of State of the State of New York on December 31, 1984.
(Designated in CECONY’s Annual Report on Form 10-K for the year ended December 31, 2017 (File No. 1-1217) as Exhibit 3.2.1.1)
3.2.1.2 The certificates of amendment of Restated Certificate of Incorporation of CECONY filed with the Department of State of the State of
New York on the following dates: May 16, 1988; June 2, 1989; April 28, 1992; August 21, 1992 and February 18, 1998.
(Designated in CECONY’s Annual Report on Form 10-K for the year ended December 31, 2017 (File No. 1-1217) as Exhibit
3.2.1.2)
3.2.2 By-laws of CECONY, effective December 29, 2020.
4.2.1 Participation Agreement, dated as of November 1, 2010, between NYSERDA and CECONY. (Designated in CECONY’s Annual
Report on Form 10-K for the year ended December 31, 2010 (File No. 1-1217) as Exhibit 4.2.2)
4.2.2 Participation Agreement, dated as of November 1, 2004, between NYSERDA and CECONY. (Designated in CECONY’s Current
Report on Form 8-K, dated November 9, 2004 (File No. 1-1217) as Exhibit 4.1)
4.2.3 Participation Agreement, dated as of May 1, 2005, between NYSERDA and CECONY. (Designated in CECONY’s Current Report on
Form 8-K, dated May 25, 2005 (File No. 1-1217) as Exhibit 4.1)
4.2.4.1 Trust Indenture, dated as of November 1, 2010 between NYSERDA and The Bank of New York Mellon, as trustee. (Designated in
CECONY’s Annual Report on Form 10-K for the year ended December 31, 2010 (File No. 1-1217) as Exhibit 4.2.9)
4.2.4.2 First Supplemental Indenture dated November 2, 2012 to the Trust Indenture dated as of November 1, 2010. (Designated in
CECONY’s Annual Report on Form 10-K for the year ended December 31, 2012 (File No. 1-1217) as Exhibit 4.2.9.2)
4.2.5 Indenture of Trust, dated as of November 1, 2004, between NYSERDA and The Bank of New York. (Designated in CECONY’s
Current Report on Form 8-K, dated November 9, 2004 (File No. 1-1217) as Exhibit 4.2)
4.2.6.1
Indenture of Trust, dated as of May 1, 2005, between NYSERDA and The Bank of New York. (Designated in CECONY’s Current
Report on Form 8-K, dated May 25, 2005 (File No. 1-1217) as Exhibit 4.2)
4.2.6.2 Supplemental Indenture of Trust, dated as of June 30, 2010, to Indenture of Trust, dated May 1, 2005 between NYSERDA and The
Bank of New York Mellon (formerly known as The Bank of New York), as trustee. (Designated in CECONY’s Annual Report on
Form 10-K for the year ended December 31, 2010 (File No. 1-1217) as Exhibit 4.2.14.2)
4.2.7.1
Indenture, dated as of December 1, 1990, between CECONY and The Chase Manhattan Bank (National Association), as Trustee
(the “Debenture Indenture”). (Designated in CECONY’s Annual Report on Form 10-K for the year ended December 31, 2017
(File No. 1-1217) as Exhibit 4.2.15.1)
4.2.7.2 First Supplemental Indenture (to the Debenture Indenture), dated as of March 6, 1996, between CECONY and The Chase
Manhattan Bank (National Association), as Trustee. (Designated in CECONY’s Annual Report on Form 10-K for the year
ended December 31, 2017 (File No. 1-1217) as Exhibit 4.2.15.2)
4.2.7.3 Second Supplemental Indenture (to the Debenture Indenture), dated as of June 23, 2005, between CECONY and JPMorgan Chase
Bank, N.A. (successor to The Chase Manhattan Bank (National Association)), as Trustee. (Designated in CECONY’s Current Report
on Form 8-K, dated November 16, 2005 (File No. 1-1217) as Exhibit 4.1)
CON EDISON ANNUAL REPORT 2020
197
4.2.8
The following forms of CECONY’s Debentures, which are designated as follows:
Securities Exchange Act
File No. 1-1217
Debenture Series
5.875% Series 2003 A
5.10% Series 2003 C
5.70% Series 2004 B
5.30% Series 2005 A
5.25% Series 2005 B
5.85% Series 2006 A
6.20% Series 2006 B
5.70% Series 2006 E
6.30% Series 2007 A
6.75% Series 2008 B
5.50% Series 2009 C
4.45% Series 2010 A
5.70% Series 2010 B
4.20% Series 2012 A
3.95% Series 2013 A
4.45% Series 2014 A
3.30% Series 2014 B
4.625% Series 2014 C
4.50% Series 2015 A
3.85% Series 2016 A
2.90% Series 2016 B
4.30% Series 2016 C
3.875% Series 2017 A
3.125% Series 2017 B
4.00% Series 2017 C
3.80% Series 2018 A
4.50% Series 2018 B
Floating Rate Series 2018 C
4.00% Series 2018 D
4.65% Series 2018 E
4.125% Series 2019 A
3.70% Series 2019 B
3.35% Series 2020 A
3.95% Series 2020 B
3.00% Series 2020 C
Form
8-K
8-K
8-K
8-K
8-K
8-K
8-K
8-K
8-K
8-K
8-K
8-K
8-K
8-K
8-K
8-K
8-K
8-K
8-K
8-K
8-K
8-K
8-K
8-K
8-K
8-K
8-K
8-K
8-K
8-K
8-K
8-K
8-K
8-K
8-K
Date
4/7/2003
6/12/2003
2/11/2004
3/7/2005
6/20/2005
3/9/2006
6/15/2006
12/1/2006
8/28/2007
4/4/2008
12/4/2009
6/7/2010
6/7/2010
3/13/2012
2/25/2013
3/3/2014
11/19/2014
11/19/2014
11/12/2015
6/14/2016
11/10/2016
11/10/2016
6/5/2017
11/13/2017
11/13/2017
5/7/2018
5/7/2018
6/21/2018
11/27/2018
11/27/2018
5/6/2019
11/5/2019
3/26/2020
3/26/2020
11/13/2020
Exhibit
4
4.2
4.2
4
4
4
4
4.2
4
4.2
4
4.1
4.2
4
4
4
4.1
4.2
4
4
4.1
4.2
4
4.1
4.2
4.1
4.2
4.0
4.1
4.2
4
4
4.1
4.2
4
198
CON EDISON ANNUAL REPORT 2020
10.2.1 Settlement Agreement, dated October 2, 2000, by and among CECONY, the Staff of the New York State Public Service
Commission and certain other parties. (Designated in CECONY’s Current Report on Form 8-K, dated September 22, 2000
(File No. 1-1217) as Exhibit 10)
10.2.2 The Consolidated Edison Company of New York, Inc. Executive Incentive Plan, as amended and restated as of January 1, 2008.
(Designated in CECONY’s Annual Report on Form 10-K for the year ended December 31, 2008 (File No. 1-1217) as Exhibit
10.2.5)
10.2.3.1 Consolidated Edison Company of New York, Inc. Supplemental Retirement Income Plan, as amended and restated as of January
1, 2009. (Designated in CECONY’s Annual Report on Form 10-K for the year ended December 31, 2009 (File No. 1-1217)
as Exhibit 10.2.6)
10.2.3.2 Amendment, dated December 24, 2015, to the Consolidated Edison Company of New York, Inc. Supplemental Retirement Income
Plan (Designated in CECONY’s Annual Report on Form 10-K for the year ended December 31, 2015 (File No. 1-1217) as
Exhibit 10.2.6.2)
10.2.3.3 Amendment One to the Consolidated Edison Company of New York, Inc. Supplemental Retirement Income Plan. (Designated
in CECONY’s Annual Report on Form 10-K for the year ended December 31, 2016 (File No. 1-1217) as Exhibit 10.2.6.3)
10.2.3.4 Amendment to the Consolidated Edison Company of New York, Inc. Supplemental Retirement Income Plan. (Designated in
CECONY's Quarterly Report on Form 10-Q for the quarterly period ended March 31, 2017 (File No. 1-1217) as Exhibit 10.2.1.1)
10.2.3.5 Amendment to the Consolidated Edison Company of New York, Inc. Supplemental Retirement Income Plan. (Designated in
CECONY's Quarterly Report on Form 10-Q for the quarterly period ended March 31, 2017 (File No. 1-1217) as Exhibit 10.2.1.2)
10.2.3.6 Amendment to the Consolidated Edison Company of New York, Inc. Supplemental Retirement Income Plan. (Designated in
CECONY’s Annual Report on Form 10-K for the year ended December 31, 2019 (File No. 1-1217) as Exhibit 10.2.3.6)
10.2.4.1 Deferred Compensation Plan for the Benefit of Trustees of CECONY, as amended effective January 1, 2008. (Designated in
CECONY’s Annual Report on Form 10-K for the year ended December 31, 2008 (File No. 1-1217) as Exhibit 10.2.7)
10.2.4.2 Amendment #1, dated December 26, 2012, to the Deferred Compensation Plan for the Benefit of Trustees of CECONY.
(Designated in CECONY’s Annual Report on Form 10-K for the year ended December 31, 2012 (File No. 1-1217) as Exhibit
10.2.7.2)
10.2.5 CECONY Supplemental Medical Benefits. (Designated in CECONY's Quarterly Report on Form 10-Q for the quarterly period
ended September 30, 2017 (File No. 1-1217) as Exhibit 10.2.1)
10.2.6 The Severance Pay Plan for Management Employees of Consolidated Edison Company of New York, Inc. and Orange and
Rockland Utilities, Inc. and Other Affiliated Entities That Have Adopted the Plan, effective January 1, 2017. (Designated
in CECONY’s Annual Report on Form 10-K for the year ended December 31, 2016 (File No. 1-1217) as Exhibit 10.2.9)
10.2.7 The Consolidated Edison Company of New York, Inc. Deferred Income Plan, as amended and restated as of January 1, 2019.
(Designated in CECONY’s Annual Report on Form 10-K for the year ended December 31, 2019 (File No. 1-1217) as Exhibit
10.2.7)
10.2.8 The Consolidated Edison Company of New York, Inc. 2005 Executive Incentive Plan, as amended and restated effective as of
January 1, 2018. (Designated in CECONY’s Quarterly Report on Form 10-Q for the quarterly period ended March 31, 2018
(File No. 1-1217) as Exhibit 10.2)
10.2.9.1 Trust Agreement, dated as of March 31, 1999, between CECONY and Mellon Bank, N.A., as Trustee. (Designated in
CECONY’s Annual Report on Form 10-K, for the year ended December 31, 2005 (File No. 1-1217) as Exhibit 10.2.13.1)
10.2.9.2 Amendment Number 1 to the CECONY Rabbi Trust, executed October 24, 2003, between CECONY and Mellon Bank, N.A., as
Trustee. (Designated in CECONY’s Annual Report on Form 10-K, for the year ended December 31, 2005 (File No. 1-1217)
as Exhibit 10.2.13.2)
23.2 Consent of PricewaterhouseCoopers LLP
31.2.1 Rule 13a-14(a)/15d-14(a) Certifications – Chief Executive Officer
31.2.2 Rule 13a-14(a)/15d-14(a) Certifications – Chief Financial Officer
32.2.1 Section 1350 Certifications – Chief Executive Officer
32.2.2 Section 1350 Certifications – Chief Financial Officer
101.INS
XBRL Instance Document
101.SCH
XBRL Taxonomy Extension Schema
101.CAL
XBRL Taxonomy Extension Calculation Linkbase
101.DEF
XBRL Taxonomy Extension Definition Linkbase
101.LAB
XBRL Taxonomy Extension Label Linkbase
101.PRE
XBRL Taxonomy Extension Presentation Linkbase
104 Cover Page Interactive Data File - The cover page iXBRL tags are embedded within the inline XBRL document
CON EDISON ANNUAL REPORT 2020
199
Item 16: Form 10-K Summary
None.
Supplemental Information to be Furnished With Reports Filed Pursuant to Section 15(d) of the Securities
Exchange Act of 1934 by Registrants Which Have Not Registered Securities Pursuant to Section 12 of the
Securities Exchange Act of 1934.
No annual report to security holders covering CECONY’s last fiscal year has been sent to its security holders. No
proxy statement, form of proxy or other proxy soliciting material has been sent to CECONY’s security holders during
such period.
200
CON EDISON ANNUAL REPORT 2020
Signatures
Pursuant to the requirements of Section 13 or 15(d) 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, on February 18,
2021.
Consolidated Edison, Inc.
Consolidated Edison Company of New York, Inc.
By
/s/ Robert Hoglund
Robert Hoglund
Senior Vice President and
Chief Financial Officer
Pursuant to the requirements of the Securities Exchange Act of 1934, this report has been signed below by the
following persons on behalf of the Registrant, and in the capacities indicated, on February 18, 2021.
Signature
/s/ Timothy P. Cawley
Timothy P. Cawley
/s/ Robert Hoglund
Robert Hoglund
/s/ Joseph Miller
Joseph Miller
/s/ John McAvoy
John McAvoy
/s/ George Campbell Jr.
George Campbell Jr.
/s/ Ellen V. Futter
Ellen V. Futter
/s/ John F. Killian
John F. Killian
/s/ Karol V. Mason
Karol V. Mason
/s/ Dwight A. McBride
Dwight A. McBride
/s/ William J. Mulrow
William J. Mulrow
/s/ Armando J. Olivera
Armando J. Olivera
/s/ Michael W. Ranger
Michael W. Ranger
/s/ Linda S. Sanford
Linda S. Sanford
/s/ Deirdre Stanley
Deirdre Stanley
/s/ L. Frederick Sutherland
L. Frederick Sutherland
Registrant
Con Edison
CECONY
Con Edison
CECONY
Con Edison
CECONY
Con Edison
CECONY
Con Edison
CECONY
Con Edison
CECONY
Con Edison
CECONY
Con Edison
CECONY
Con Edison
CECONY
Con Edison
CECONY
Con Edison
CECONY
Con Edison
CECONY
Con Edison
CECONY
Con Edison
CECONY
Con Edison
CECONY
Title
President, Chief Executive Officer and Director (Principal
Executive Officer)
Chief Executive Officer and Trustee (Principal Executive
Officer)
Senior Vice President and Chief Financial Officer
(Principal Financial Officer)
Senior Vice President and Chief Financial Officer
(Principal Financial Officer)
Vice President, Controller and Chief Accounting Officer
(Principal Accounting Officer)
Vice President, Controller and Chief Accounting Officer
(Principal Accounting Officer)
Non-Executive Chairman of the Board, Director
Non-Executive Chairman of the Board, Trustee
Director
Trustee
Director
Trustee
Director
Trustee
Director
Trustee
Director
Trustee
Director
Trustee
Director
Trustee
Director
Trustee
Director
Trustee
Director
Trustee
Director
Trustee
CON EDISON ANNUAL REPORT 2020
201
Investor
Information
202
CON EDISON ANNUAL REPORT 2020
Management
CONSOLIDATED EDISON, INC.
Timothy P. Cawley, President and Chief Executive Officer
Deneen L. Donnley, Senior Vice President and General Counsel
Robert Hoglund, Senior Vice President and Chief Financial Officer
Sylvia V. Dooley, Vice President and Corporate Secretary
Joseph Miller, Vice President and Controller
Yukari Saegusa, Vice President and Treasurer
CONSOLIDATED EDISON COMPANY OF NEW YORK, INC.
Timothy P. Cawley, Chief Executive Officer
Matthew Ketschke, President
Deneen L. Donnley, Senior Vice President and General Counsel
Robert Hoglund, Senior Vice President and Chief Financial Officer
Sylvia V. Dooley, Vice President and Corporate Secretary
Senior Vice Presidents
Milovan Blair, Central Operations
Lore de la Bastide, Utility Shared Services
Marc Huestis, Gas Operations
Mary E. Kelly, Corporate Shared Services
Michele L. O’Connell, Customer Operations
Frances A. Resheske, Corporate Affairs
Robert D. Schimmenti, Electric Operations
Leonard P. Singh, Customer Energy Solutions
Vice Presidents
Walter Alvarado, System and Transmission Operations
Lance P. Becca, Staten Island and Electric Services
Katherine L. Boden, Gas Engineering
Edmund P. Burke, Brooklyn and Queens Electric Operations
Manoj S. Chouthai, IT Engineering and Operations
Sylvia V. Dooley, Corporate Secretary
Hugh Grant, Substation Operations
Jeannine Haggerty, IT Solutions Delivery
Michael T. Haggerty, Supply Chain
Christina C. Ho, Steam Operations
LaAsia S. Hundley, Facilities and Field Services
Nicholas Inga, Gas Operations
Joan S. Jacobs, Learning and Inclusion
Jeffrey R. Kalata, Tax
Ivan Kimball, Energy Management
Kyle Kimball, Government Relations and Community Affairs
Vicki H. Kuo, Energy Efficiency and Distributed Resource Planning
Scott A. Levinson, Legal Services
Patrick G. McHugh, Engineering and Planning
Joseph Miller, Controller
Richard B. Miller, Regulatory Services
Edlyn Misquita, General Auditor
Gurudatta D. Nadkarni, Strategic Planning
Steven J. Parisi, Central Engineering
Lisa Primeggia, Manhattan Electric Operations
Jane J. Quin, Energy Policy and Regulatory Affairs
Yukari Saegusa, Treasurer
Scott Sanders, Financial Planning & Analysis
Constantine Sanoulis, Construction
Andrea J. Schmitz, Environment, Health and Safety
Nancy M. Shannon, Human Resources
Matthew J. Sniffen, Emergency Preparedness
Kimberly R. Strong, Business Ethics and Compliance
and Chief Ethics and Compliance Officer
Shakira Wilson, Bronx and Westchester Electric Operations
ORANGE AND ROCKLAND UTILITIES, INC.
Timothy P. Cawley, Chairman
Robert Sanchez, President and Chief Executive Officer
Joseph Miller, Chief Financial Officer and Controller
Yukari Saegusa, Treasurer
Michele Weber, Corporate Secretary
Vice Presidents
Orville O. Cocking, Operations
Janette Espino, Customer Service
CON EDISON TRANSMISSION, INC.
Robert Hoglund, Chairman
Stuart Nachmias, President and Chief Executive Officer
Vanessa M. Franklin, Corporate Secretary
Vice President
Timothy J. Frost, Finance and Corporate Development
CON EDISON CLEAN ENERGY BUSINESSES, INC.
Robert Hoglund, Chairman
Mark Noyes, President and Chief Executive Officer
James J. Dixon, Senior Vice President and
Chief Operating Officer
Vice Presidents
Akshaya Bhargava, Utility-Scale Assets
Thomas DiCapua, Asset & Load Optimization
George Germano, Operations and Asset Managements
Michael Gibson, Energy Services
Mark Glucksman, Finance and Accounting
Nelly Jefferson, IT and PMO
Paul F. Mapelli, General Counsel and Secretary
James Mueller, Human Resources and
Administrative Services
Michael Perna, Marketing and Business Development
Lorena Tavlarios, Central Services
Board of Directors
CONSOLIDATED EDISON, INC.
George Campbell Jr., Ph.D.
Former Non-Executive Chairman
Webb Institute, Glen Cove, NY
Timothy P. Cawley – effective 12/29/2020
President and Chief Executive Officer
Consolidated Edison, Inc., New York, NY
Ellen V. Futter
President
American Museum of Natural History, New York, NY
John F. Killian
Former Executive Vice President and Chief Financial Officer
Verizon Communications Inc., New York, NY
Karol V. Mason – effective 1/1/2021
President
John Jay College of Criminal Justice, New York, NY
John McAvoy
Non-Executive Chairman
Consolidated Edison, Inc., New York, NY
Dwight A. McBride – effective 1/1/2021
President
The New School, New York, NY
William J. Mulrow
Senior Advisory Director
The Blackstone Group, New York, NY
Armando J. Olivera
Former President and Chief Executive Officer
Florida Power & Light Company, Juno Beach, FL
Michael W. Ranger
President and CEO
Covanta Holding Corporation, Morristown, NJ
Linda S. Sanford
Former Senior Vice President Enterprise Transformation
International Business Machines Corporation (IBM), Armonk, NY
Deirdre Stanley
Executive Vice President and General Counsel
The Estée Lauder Companies, Inc., New York, NY
L. Frederick Sutherland
Former Executive Vice President and Chief Financial Officer
Aramark Corporation, Philadelphia, PA
CON EDISON ANNUAL REPORT 2020
203
Investor
Information
ANNUAL STOCKHOLDERS’ MEETING
Due to the ongoing impact of the COVID-19 pandemic,
we plan to hold the Annual Meeting by means of remote
communications only. The 2021 Annual Meeting of
Stockholders will be held remotely 10 a.m. on Monday,
May 17, 2021. Shareholders may attend virtually by visiting
www.virtualshareholdermeeting.com/ED2021 and following
the instructions in the proxy materials. Proxies will be
requested from stockholders when the notice of meeting
and proxy statement are provided on or about April 5, 2021.
If it is not legally permissible for us to hold a completely
virtual annual meeting under New York law, we may also
hold the Annual Meeting in person. We will announce the
location of the in-person component of the meeting by
press release and posting on our proxy website (conedison.
com/shareholders), as well as the filing of additional proxy
materials with the Securities and Exchange Commission.
STOCK LISTING
The Common Stock is listed on the New York Stock
Exchange. The Common Stock ticker symbol is “ED.”
The press listing is “ConEdison” or “ConEd.”
TRANSFER AGENT AND REGISTRAR
Regular mail delivery:
Computershare
P.O. Box 505000
Louisville, KY 40233-5000
Overnight delivery:
Computershare
462 South 4th Street, Suite 1600
Louisville, KY 40202
DIVIDEND REINVESTMENT
Stockholders of record with 50 or more shares of the
Company’s Common Stock are eligible to participate in the
Company’s Automatic Dividend Reinvestment and Cash
Payment Plan. For more information and a copy of the plan
prospectus, please call Computershare, Shareholder
Services, at 1-800-522-5522.
DUPLICATE MAILINGS AND DUPLICATE ACCOUNTS
If you are a record holder, the Transfer Agent and Registrar
(see above) may deliver only one copy of the Company’s
proxy statement and Annual Report to multiple stockholders
who share an address unless the Transfer Agent and
Registrar has received contrary instructions from one or
more of the stockholders. To eliminate duplicate mailings,
please contact the Transfer Agent and Registrar, enclosing
labels from the mailings or label information where possible.
Beneficial owners who share an address and who are
receiving multiple copies of proxy materials and annual
reports and wish to receive a single copy of such materials
in the future will need to contact their broker, bank, or other
nominee. Separate dividend checks and form of proxies will
continue to be sent for each account on our records.
ADDITIONAL INFORMATION
The company reports details concerning its operations and
other matters annually to the Securities and Exchange
Commission on Form 10-K, which is available on the
company website at conEd.com or available without charge
to the company security holders on written request to:
Sylvia V. Dooley
Vice President and Corporate Secretary
Consolidated Edison, Inc.
4 Irving Place, Room 16-205
New York, NY 10003
CorporateSecretary@conEd.com
Toll-free telephone: 1-800-522-5522
INVESTOR RELATIONS
TTY/Hearing Impaired: 1-800-952-9245
E-mail inquiries: web.queries@computershare.com
computershare.com/investor
https://www-us.computershare.com/Investor/Contact/
Index#SCUSEDIS
Inquiries from security analysts, investment managers, and
other members of the financial community should be
addressed to:
Jan C. Childress
Director of Investor Relations
Consolidated Edison, Inc.
4 Irving Place, 2nd Floor West
New York, NY 10003
1-212-460-6611
childressj@conEd.com
For additional financial, operational, and customer service
information, visit conEdison.com.
204
CON EDISON ANNUAL REPORT 2020
Annual Report-2020_v17.indd 10
Annual Report-2020_v17.indd 10
3/11/21 4:14 PM
3/11/21 4:14 PM
This annual report was printed by a printer with Forest
Stewardship Council (FSC) Chain of Custody certification.
The cover and editorial sections are printed on recycled
paper that contains 100% post-consumer waste, and the
financial section is printed on recycled paper that contains
10% post-consumer waste. All of these papers are
FSC-certified. The nonrecycled portions of these papers are
made from fiber sourced from well managed forests and
other controlled wood sources.
Savings derived from using these papers, rather than 100%
virgin fiber, include:
99 trees preserved for the future
48,223 gallons of wastewater not discharged
3,100 pounds of solid waste not generated
8.2 pounds of hazardous air pollutants
not emitted
8,450 pounds of greenhouse gases
prevented, equivalent to taking 1 car off
the road for 1 year
Environmental impact estimates above were made
using the Environmental Paper Network Paper Calculator.
For more information visit PaperCalculator.org.
How to Reach Us
Consolidated Edison, Inc.
4 Irving Place
New York, NY 10003
1-212-460-4600
conEdison.com
REGULATED BUSINESSES
Consolidated Edison Company of New York, Inc.
4 Irving Place
New York, NY 10003
1-212-460-4600
conEd.com
Orange and Rockland Utilities, Inc.
One Blue Hill Plaza
Pearl River, NY 10965
1-845-352-6000
oru.com
Con Edison Transmission, Inc.
4 Irving Place
New York, NY 10003
1-888-800-8712
conEdTransmission.com
CLEAN ENERGY BUSINESSES
Consolidated Edison Solutions, Inc.
100 Summit Lake Drive, Suite 210
Valhalla, NY 10595
1-914-286-7000
conEdisonSolutions.com
Consolidated Edison Energy, Inc.
100 Summit Lake Drive, Suite 210
Valhalla, NY 10595
1-914-286-7000
conEdEnergy.com
Consolidated Edison Development, Inc.
100 Summit Lake Drive, Suite 210
Valhalla, NY 10595
1-914-286-7000
conEdDev.com
Consolidated Edison, Inc. is one of the nation’s largest investor-owned energy-delivery companies, with approximately $12 billion in annual revenue
and $63 billion in assets. The company provides a wide range of energy-related products and services to its customers through the following
subsidiaries: Consolidated Edison Company of New York, Inc., a regulated utility providing electric, gas and steam service in New York City and
Westchester County, New York; Orange and Rockland Utilities, Inc., a regulated utility serving customers in a 1,300-square-mile-area in
southeastern New York State and northern New Jersey; Con Edison Clean Energy Businesses, Inc., which through its subsidiaries develops, owns,
and operates renewable and sustainable energy infrastructure projects and provides energy-related products and services to wholesale and retail
customers; and Con Edison Transmission, Inc., which through its subsidiaries invests in electric and natural gas transmission projects.
Con Edison Annual Report 2020