2021 Annual Report
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Con Edison Annual Report 2021
Con Edison Annual Report 2021
FINANCIAL HIGHLIGHTS
2021
2020
OUR CRITICAL INFRASTRUCTURE INVESTMENTS
(in millions, except per-share information and statistical data)
Consolidated Edison, Inc. Capital Program Forecast 2022–2024 ($ in millions)
OPERATING REVENUE
$13,676
$12,246
CON EDISON OF NEW YORK
2022 $3,893 (Total)
2023 $4,762 (Total)
2024 $4,957 (Total)
NET INCOME FOR COMMON STOCK
$1,346
$1,101
BASIC EARNINGS PER COMMON SHARE
$3.86
$3.29
DIVIDENDS PER SHARE
$3.10
$3.06
DIVIDEND PAYOUT RATIO
80%
93%
AVERAGE COMMON SHARES OUTSTANDING
348.4
334.8
TOTAL ASSETS
$63,116
$62,895
CAPITAL INVESTMENTS
$3,964
$4,085
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ORANGE AND ROCKLAND UTILITIES
2022 $241 (Total)
2023 $253 (Total)
2024 $246 (Total)
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COMMON EQUITY RATIO
47.4%
48.3%
CLEAN ENERGY BUSINESSES
2022 $400 (Total)
2023 $400 (Total)
2024 $400 (Total)
RETURN ON EQUITY
6.83%
5.96%
MARKET CAPITALIZATION
$30,200
$24,700
STOCK PRICE PER SHARE (YEAR END)
$85.32
$72.27
DIVIDEND YIELD (YEAR END)
3.6%
4.2%
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CON EDISON TRANSMISSION
2022 $73 (Total)
2023 $42 (Total)
2024 $10 (Total)
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TOTAL SHAREHOLDER RETURN
23%
-17%
CAPITAL EXPENDITURES
2022 $4,607 (Total)
2023 $5,457 (Total)
2024 $5,613 (Total)
To Our
Shareholders
Con Edison is committed to evolving our business, advancing our communities, and
defending the environment. As the climate crisis has deepened, so have our efforts to
create the clean energy future, now. We’re ensuring the benefits reach everyone equitably,
including historically disadvantaged neighborhoods, by partnering with our customers,
our employees, our regulators, and other key stakeholders.
Our work is guided by three priorities: safety, operational excellence, and the customer
experience. In all we do, we ask: Are we doing business in the safest way possible for our
people and the public? Are we operating our complex energy delivery systems in a manner
that best serves our communities? And, are we delivering the kinds of experiences and
services our customers need and deserve?
We apply these priorities, 24/7, with sustainability at the forefront of our thinking. Our
long-term success depends on people, planet, and profit. We invest in people by creating a
more diverse, equitable, and inclusive workforce, and by putting resources into underserved
communities. We protect the environment with our ambitious Clean Energy Commitment.
And, we maintain a strong financial base while pursuing growth as we transition to a clean
energy future.
These actions strengthen our company and region, bringing societal and shareholder value.
I am proud to report dividend growth for the 48th consecutive year—the longest record of
any energy company in the S&P 500. You’re seeing a 6-cent increase over 2021, to $3.16
per share.
Con Edison Annual Report 2021
SAFETY: OUR BEDROCK
Despite the uncertainties brought by the
pandemic, our employees rose to 2021’s
challenges, protecting themselves and the public.
Safety is the foundation of all we do. Our focus
has resulted in 70 percent fewer employee injuries
since 2009, and we continue to strive for a
zero-harm workplace. Our new Safety Leadership
System for employees, which we’ve employed in
several of our major operational groups, has led
to a decrease in operating errors as well as one of
the strongest safety ratings in company history.
Our impressive people continue to find ever-more
innovative ways to safeguard themselves from
energized equipment. They’ve developed a
first-of-its-kind robot that protects station
operators when working with circuit breakers
and a lone-worker device that uses smart sensors
and GPS to send out alerts if an operator
experiences trouble.
Simultaneously, we remain committed to keeping
the public safe. We continue to replace and repair
leak-prone gas mains, reducing risk and cutting
methane emissions. We’ve installed more
than 86,000 natural gas detectors that monitor the
atmosphere where our gas pipes enter customers’
homes and buildings and automatically alert our
emergency responders. To make our electric-
delivery systems safer, we’re using smart meter
data to develop algorithms to detect deficiencies
in our network, improving reliability and avoiding
potential electrical shocks. And our 3D model
of the 91-mile steam system allows our teams to
better identify and address potential problems
caused by heavy rain and flash flooding.
OPERATIONAL EXCELLENCE:
OUR BACKBONE
Operational excellence is at our core. It is the
rigor and procedures we use to design, build, and
operate our energy systems.
This work begins with cyber and physical security.
We invest in cybersecurity to protect customers’
personal information and our assets. We regularly
train employees on potential cyber and insider
threats, collaborating with government
and industry partners. In 2021, we completed
major physical security upgrades at many
company facilities.
Con Edison Annual Report 2021
To maintain our world-class reliability, we invest
around $3.5 billion every year on our electric-,
gas-, and steam-delivery systems. We use a
risk-based approach to target those investments
that provide the most value. We seek to
continuously improve during blue-sky days as well
as emergencies. As part of our work to enhance
our storm-outage response, we’ve purchased 90
bucket trucks that are ready for utility workers who
fly in from across the nation, avoiding time-
consuming drives and positioning them to restore
service to our customers sooner. Our rate
requests submitted this year will help fund our
Clean Energy Commitment in support of New York
state’s climate goals and enable us to strengthen
and upgrade our infrastructure.
THE CUSTOMER EXPERIENCE:
OUR SIGHTLINE
Seeing from the perspective of our customers
allows us to create the best customer
experiences. We know the pandemic and all its
ramifications have caused incredible hardships
for many of our customers. For those who are
struggling financially, we’ve increased our
outreach. We are offering flexible payment
agreements and pointing people to additional
resources.
By the end of this year, we will have installed more
than 5 million smart meters. These devices
continue to be a critical tool that customers can
use to better understand and lower their energy
use. Smart meters also enable conservation
voltage optimization, allowing our engineers to
ensure customers receive exactly the energy they
need and no more, reducing customer bills and
lowering carbon emissions.
Another way we improve lives is by streamlining
our processes with digital tools. Customers can
now more easily manage multiple accounts online;
interact with Watt, our virtual assistant, for services
like stopping and starting service; and do so much
more digitally. We’ve made progress on improving
digital accessibility for our customers with
disabilities. With extensive customer feedback,
we’ve also developed a new bill design offering
more information and an improved interface.
GOLD STANDARD OF
CLIMATE WORK
While much of the world has been responding to
the recent devastating results of climate change—
extreme heat, floods, and wildfires—Con Edison
has been working to lessen the impact of
increasingly severe weather for many years. We’ve
invested more than $1 billion over the last decade
to fortify our infrastructure, which has avoided
hundreds of thousands of outages.
We also partnered with Columbia University on a
climate change study to assess our vulnerabilities,
modeling a variety of future scenarios for sea-level
rise, heat waves, and other hazards. Experts
who spoke with the New York Times called our
study “the gold standard” for our industry. Today,
we’re implementing an action plan based on these
findings. We’ll invest an additional $2 billion
by 2030 for climate resiliency and adaptation,
including burying overhead lines that are
vulnerable to storms.
OUR CLEAN ENERGY
COMMITMENT
In addition to adapting our energy delivery
systems for more frequent, severe weather,
Con Edison has an important part to play
in mitigating climate change by reducing carbon
emissions. Our Clean Energy Commitment is our
roadmap. We’ll go forward by driving toward a
net-zero economy by 2050, specifically by
advancing the electrification of heating and transit
powered by clean energy sources, such as wind
and solar. We’ll continue to promote energy
efficiency upgrades to our customers, and we will
build and operate the most resilient, reliable, and
innovative infrastructure.
Building the Grid of the Future
The grid of the future must bring more clean
power to our customers. We are building this grid
now to accommodate 100% clean energy
by 2040.
Offshore wind’s value will only grow. Our company
will connect many future offshore wind projects
to the grid. They will be especially important where
we expect electric use to grow as customers
move away from fossil fuels. As part of this work,
our Reliable Clean City transmission line projects
will create infrastructure that connects our
customers to power to be generated by offshore
wind and allows for the retirement of the city’s
most-polluting generating plants.
Meanwhile, we’ll continue to make it as easy as
possible for customers to link their rooftop solar
installations to the grid. Today, our region has
more than 50,000 such installations, and our
engineers continue to innovate to enhance their
reliability and seamless integration into the grid.
We’re making sure solar power is accessible to
disadvantaged communities. We have installed
solar panels on the roofs of New York City-
subsidized apartment complexes. While drawing
power from the sun, the units provide billing
discounts to tenants. Moreover, the solar panel
installers are residents of those same buildings,
who were trained through our partnerships
with nonprofits dedicated to increasing the green
collar workforce.
Energy storage will be paramount to the
renewables-centric future. We are encouraging
1,000 MWs of battery storage capacity, including
grid-scale projects and smaller customer-sited
systems. By 2023, a battery storage project in
Astoria, Queens, will be able to discharge 100
MWs of electricity—the largest battery in our
state’s history. We completed another large-scale
battery storage project in Rockland County. And
we’ve partnered with a solar panel and battery
storage developer on a virtual power plant. All of
this will help New York state meet its target of 70%
electricity supply from renewables by 2030.
Our commitment extends to our own facilities. We
plan to provide 100% clean power to our own
buildings by 2030, and to reduce greenhouse gas
emissions from our steam co-generation plants to
net-zero by 2040. Our efforts build on our history
of environmental stewardship: We’ve reduced our
direct greenhouse gas emissions by more than
50% since 2005.
Con Edison Annual Report 2021
Broadening the Reach of
Broadening the Reach of
Our Commitment
Our Commitment
Our Clean Energy Businesses have made us the
Our Clean Energy Businesses have made us the
second-largest solar owner in North America,
second-largest solar owner in North America
with 130 projects across 20 states. Last year, we
with 130 projects across 20 states. Last year, we
constructed just over 440 MWs of renewable
constructed just over 440 MWs of renewable
assets across the nation. Between 2020 and
assets across the nation. Between 2021 and
2022, we’ll have invested $1.3 billion in renewable
2023, we’ll have invested more than $1 billion in
renewable energy. Our expertise in developing and
energy. We are advocating for the ability to own
operating renewables is why we are advocating for
and operate renewables right here in New York
the ability to do so right here in New York state.
state so we can apply our expertise to achieve
aggressive clean energy goals in a cost-effective
We’re also pursuing growth through Con Edison
way for our customers. Earlier this year, we
Transmission. We plan to invest $1 billion by 2030
announced we are exploring strategic alternatives
to support clean energy and enhance reliability
for the Clean Energy Businesses.
and resilience. Through a partnership with New
We’re also pursuing growth through Con Edison
York Transco, we are constructing a transmission
line to increase power flow from Upstate New York
Transmission. We plan to invest $1 billion by
to our region. We also are pursuing several
2030 to support clean energy and enhance
reliability and resilience. Through a partnership
transmission projects, including one that would
with New York Transco, we are constructing
bring offshore wind generation from Long Island to
residents in other areas of New York and another
a transmission line to increase power flow from
to bring generation from offshore into New Jersey.
Upstate New York to our region. We are also
pursuing several transmission projects, including
one that would bring offshore wind generation
from Long Island to residents in other areas of
Reinforcing Energy Efficiency:
New York. Another project would bring generation
from offshore into New Jersey, and a third would
The Foundation of Clean Energy
deliver renewable power generated in northern
Part of our mission is to empower all our
Maine to the New England transmission system in
customers to meet their climate goals. To do so,
southern Maine.
we are aggressively pursuing reductions in overall
energy use by tripling our energy efficiency
programs. We will invest $1.5 billion in this work
Reinforcing Energy Efficiency:
by 2025.
The Foundation of Clean Energy
Our incentives help homeowners and businesses
install energy-efficient lighting, cooling, and heating
Part of our mission is to empower all our
systems. Since 2009, more than 2.5 million
customers to meet their climate goals. To do so,
customers have upgraded to more efficient
we are aggressively pursuing reductions in overall
equipment, saving 11 million metric tons of carbon
energy use by tripling our energy efficiency
emissions. We’re making sure everyone can be
programs. We will invest $1.5 billion in this work
more energy efficient. We’ve enabled more than
by 2025.
2,100 affordable housing buildings to participate in
savings in the last three years.
Our incentives help homeowners and businesses
install energy-efficient lighting, cooling, and heating
Buildings are the largest source of New York City’s
systems. Since 2009, more than 2.5 million
carbon emissions. To realize the carbon-free
customers have upgraded to more efficient
future, we are encouraging deep energy-efficiency
equipment, saving 11 million metric tons of carbon
retrofits with incentives allowing building owners
emissions. We’re making sure everyone can be
to electrify their heating, water heating, and other
more energy efficient. We’ve enabled more than
energy-intensive systems. We aim to reach
2,100 affordable housing buildings to participate in
150,000 buildings by 2030.
savings in the last three years.
Con Edison Annual Report 2021
Con Edison Annual Report 2021
Helping to make our work possible are graduates
Buildings are the largest source of New York City’s
of Clean Energy Academy, which develops green
carbon emissions. To realize the carbon-free
collar workers in underserved communities
future, we are encouraging deep energy-efficiency
through our new partnership with an energy-
retrofits with incentives allowing building owners
solutions provider, nonprofit organizations, and
to electrify their heating, water heating, and other
New York state.
energy-intensive systems. We aim to reach
150,000 buildings by 2030.
Helping to make our work possible are graduates
Reimagining the Future of
of Clean Energy Academy, which develops green
collar workers in underserved communities
Our Gas Infrastructure
through our new partnership with an energy-
solutions provider, nonprofit organizations, and
While we believe there are benefits to maintaining
New York state.
a gas-delivery system, our company is committed
to significantly reducing the amount of gas it
delivers. We are planning for a future where most
building heating systems will be electrified, and we
Reimagining the Future of
support building codes to phase out natural gas in
Our Gas Infrastructure
new construction.
We’re reimagining our gas infrastructure and
While we believe there are benefits to maintaining
envisioning what other kinds of clean energy it
a gas-delivery system, our company is committed
might one day distribute. To cultivate clean energy
to significantly reducing the amount of gas it
sources, we’re investing $100 million in research
delivers. We are planning for a future where most
and development. For hard-to-electrify buildings,
building heating systems will be electrified, and we
we’re examining a low-carbon fuel portfolio,
support building codes to phase out natural gas in
including renewable natural gas, green hydrogen,
new construction.
and carbon capture and storage.
We’re reimagining our gas infrastructure and
envisioning what other kinds of clean energy it
might one day distribute. To cultivate clean energy
sources, we’re investing $100 million in research
Speeding Up
and development. For hard-to-electrify buildings,
Electric Vehicle Adoption
we’re examining a low-carbon fuel portfolio,
including renewable natural gas, green hydrogen,
One of the biggest shifts that society can make
and carbon capture and storage.
toward a clean energy future will be achieved with
electric vehicles. We are revving up the market by
helping to put charging stations everywhere. That
infrastructure gives consumers the confidence
Speeding Up
to purchase EVs and know they can power up at
Electric Vehicle Adoption
their convenience.
In July, our work enabled the largest universal
One of the biggest shifts that society can make
fast-charging station in the country to open in
toward a clean energy future will be achieved with
Brooklyn. It’s part of a program that will help
electric vehicles. We are revving up the market by
increase by tenfold the number of charging plugs
helping to put charging stations everywhere. That
in the area by 2025. Our Clean Energy
infrastructure gives consumers the confidence
Commitment outlines longer-range plans to
to purchase EVs and know they can power up at
support the installation of 400,000 charging spots
their convenience.
by 2035 and a total of 1 million spots by 2050.
In July, our work enabled the largest universal
We’re leading by example, too. Con Edison is
fast-charging station in the country to open in
purchasing only electric vehicles for its light-duty
Brooklyn. It’s part of a program that will help
fleet, with a goal of an all-electric fleet by 2035.
increase by tenfold the number of charging plugs
We also invested in the development of the first
in the area by 2025. Our Clean Energy
electric bucket truck in the nation, which we’ll
Commitment outlines longer-range plans to
begin using next year.
support the installation of 400,000 charging spots
by 2035 and a total of 1 million spots by 2050.
We’re leading by example, too. Con Edison is
purchasing only electric vehicles for its light-duty
fleet, with a goal of an all-electric fleet by 2035.
We also invested in the development of the first
electric bucket truck in the nation, which we’ll
begin using next year.
OUR PEOPLE,
OUR COMMUNITIES, & A MORE
EQUITABLE SOCIETY
Our people never fail to persevere. As they
continue to grapple with the pandemic, reconcile
inequities, and face relentless weather, our people
show up, innovate, and give back. New York City
recognized our heroism when we marched in the
Hometown Heroes parade for essential workers
last year.
As the region endured intense heat and tropical
storms over the summer, our teams again proved
their ability to problem solve in unprecedented
times. Hurricane Ida dumped one month’s worth
of rain in an hour. We worked quickly to restore
service to affected customers and have
accelerated work to make our equipment more
resilient to flooding.
We continued to implement our diversity, equity,
and inclusion strategy and action plan, with more
than half of us participating in expanded training.
The company tied diversity, equity, and inclusion
metrics to executive compensation. Diversity Inc.
and Military Times lauded our work again, and
a social justice group named us one of the nation’s
Top 10 companies for diversity and inclusion
careers. And, we targeted $300 million to minority-
and women-owned businesses through our
Supplier Diversity Program.
Seeing our communities thrive remains a priority.
Last year, we provided $12.6 million to more than
600 nonprofits. The summer’s Arts al Fresco gave
COVID-weary families across the region a safe
way to enjoy outdoor arts. We set aside $600,000
for food stability grants to fill a continuing need.
Our support for environmental groups grew for
the fourth year, with a focus on nonprofits
committed to environmental justice and helping
disadvantaged communities.
EXCITED FOR THE FUTURE
As we chart our future, we will continue to
maintain our low-risk, low-volatility business
model. In 2020, we issued our first green bonds.
At the time, it was the largest green offering:
$1.6 billion comprised of 10- and 30-year bonds.
Because the offering was well-received, last year
we offered $750 million in 40-year bonds. The
proceeds are going to clean energy investments.
Our strong corporate governance practices and
board with its diverse skills, ethnicity, and gender
makeup will keep us sustainable. With our
three priorities in mind and our strong financial
underpinnings, we will drive the transition ahead.
We remain committed to policies that create a
more equitable clean energy future for all.
These goals go hand in hand with our
environment, social, and governance strategy.
We continue to look for ways to lead among our
peers, increase our transparency in associated
disclosures, and integrate stakeholder feedback.
Though 2021 brought challenges, we realized
many successes and made inroads into bettering
society, protecting the planet, leading the way
into the clean energy future, and delivering value
to our shareholders. The progress we’ve made to
date makes me very excited about our future.
Thank you for your support and confidence.
Con Edison Annual Report 2021
policies. We continue to collaborate with partners
Timothy P. Cawley
who provide training for women in nontraditional
Chairman, President, and Chief Executive Officer
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We’re leading by example, too. Con Edison is
OUR PEOPLE,
purchasing only electric vehicles for its light-duty
OUR COMMUNITIES, & A MORE
fleet, with a goal of an all-electric fleet by 2035.
EQUITABLE SOCIETY
We also invested in the development of the first
electric bucket truck in the nation, which we’ll
Our people never fail to persevere. As they
begin using next year.
continue to grapple with the pandemic, reconcile
inequities, and face relentless weather, our people
show up, innovate, and give back. New York City
OUR PEOPLE,
recognized our heroism when we marched in the
Hometown Heroes parade for essential workers
OUR COMMUNITIES, & A MORE
last year.
EQUITABLE SOCIETY
As the region endured intense heat and tropical
storms over the summer, our teams again proved
Our people never fail to persevere. As they
their ability to problem solve in unprecedented
continue to grapple with the pandemic, reconcile
times. Hurricane Ida dumped one month’s worth
inequities, and face relentless weather, our people
of rain in an hour. We worked quickly to restore
show up, innovate, and give back. New York City
service to affected customers and have
recognized our heroism when we marched in the
accelerated work to make our equipment more
Hometown Heroes parade for essential workers
resilient to flooding.
last year.
We continued to implement our diversity, equity,
As the region endured intense heat and tropical
and inclusion strategy and action plan, with more
storms over the summer, our teams again proved
than half of us participating in expanded training.
their ability to problem solve in unprecedented
The company tied diversity, equity, and inclusion
times. Hurricane Ida dumped one month’s worth
metrics to executive compensation. Diversity Inc.
of rain in an hour. We worked quickly to restore
and Military Times lauded our work again, and
service to affected customers and have
a social justice group named us one of the nation’s
accelerated work to make our equipment more
Top 10 companies for diversity and inclusion
resilient to flooding.
policies. We continue to collaborate with partners
We continued to implement our diversity, equity,
who provide training for women in nontraditional
and inclusion strategy and action plan, with more
careers. And, we targeted $300 million to minority-
than half of us participating in expanded training.
and women-owned businesses through our
The company tied diversity, equity, and inclusion
Supplier Diversity Program.
metrics to executive compensation. Diversity Inc.
Seeing our communities thrive remains a priority.
and Military Times lauded our work again, and
Last year, we provided $12.6 million to more than
a social justice group named us one of the nation’s
600 nonprofits. The summer’s Arts al Fresco gave
Top 10 companies for diversity and inclusion
COVID-weary families across the region a safe
policies. We continue to collaborate with partners
way to enjoy outdoor arts. We set aside $600,000
who provide training for women in nontraditional
for food stability grants to fill a continuing need.
careers. And, we targeted $300 million to minority-
Our support for environmental groups grew for
and women-owned businesses through our
the fourth year, with a focus on nonprofits
Supplier Diversity Program.
committed to environmental justice and helping
Seeing our communities thrive remains a priority.
disadvantaged communities.
Last year, we provided $12.6 million to more than
600 nonprofits. The summer’s Arts al Fresco gave
COVID-weary families across the region a safe
way to enjoy outdoor arts. We set aside $600,000
for food stability grants to fill a continuing need.
Our support for environmental groups grew for
the fourth year, with a focus on nonprofits
committed to environmental justice and helping
disadvantaged communities.
EXCITED FOR THE FUTURE
EXCITED FOR THE FUTURE
As we chart our future, we will continue to
As we chart our future, we will continue to
maintain our low-risk, low-volatility business
maintain our low-risk, low-volatility business
model. In 2020, we issued our first green bonds.
model. In 2020, we issued our first green bonds.
At the time, it was the largest green offering:
At the time, it was the largest green offering:
$1.6 billion comprised of 10- and 30-year bonds.
$1.6 billion comprised of 10- and 30-year bonds.
Because the offering was well-received, last year
Because the offering was well-received, last year
we offered $750 million in 40-year bonds. The
we offered $750 million in 40-year bonds. The
proceeds are going to clean energy investments.
proceeds are going to clean energy investments.
Our strong corporate governance practices and
Our strong corporate governance practices and
board with its diverse skills, ethnicity, and gender
board with its diverse skills, ethnicity, and gender
makeup will keep us sustainable. With our
makeup will keep us sustainable. With our
three priorities in mind and our strong financial
three priorities in mind and our strong financial
underpinnings, we will drive the transition ahead.
underpinnings, we will drive the transition ahead.
We remain committed to policies that create a
We remain committed to policies that create a
more equitable clean energy future for all.
more equitable clean energy future for all.
These goals go hand in hand with our
These goals go hand in hand with our
environment, social, and governance strategy.
environment, social, and governance strategy.
We continue to look for ways to lead among our
We continue to look for ways to lead among our
peers, increase our transparency in associated
peers, increase our transparency in associated
disclosures, and integrate stakeholder feedback.
disclosures, and integrate stakeholder feedback.
Though 2021 brought challenges, we realized
Though 2021 brought challenges, we realized
many successes and made inroads into bettering
many successes and made inroads into bettering
society, protecting the planet, leading the way
society, protecting the planet, leading the way
into the clean energy future, and delivering value
into the clean energy future, and delivering value
to our shareholders. The progress we’ve made to
to our shareholders. The progress we’ve made to
date makes me very excited about our future.
date makes me very excited about our future.
Thank you for your support and confidence.
Thank you for your support and confidence.
Timothy P. Cawley
Timothy P. Cawley
Chairman, President, and Chief Executive Officer
Chairman, President, and Chief Executive Officer
Con Edison Annual Report 2021
Con Edison Annual Report 2021
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, 2021
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 2021
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 ¨
Yes x
No x
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
Non-accelerated filer
CECONY
Large accelerated filer
Non-accelerated filer
x
¨
¨
x
Accelerated filer
Smaller reporting company
Emerging growth company
Accelerated filer
Smaller reporting company
Emerging growth company
¨
☐
☐
¨
☐
☐
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended
transition period for complying with any new or revised financial accounting standards provided pursuant to Section
13(a) of the Exchange Act. ¨
Indicate by check mark whether the registrant 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, 2021, was approximately $25.3 billion.
2
CON EDISON ANNUAL REPORT 2021
As of January 31, 2022, Con Edison had outstanding 354,090,402 Common Shares ($.10 par value).
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 16,
2022, to be filed with the Commission pursuant to Regulation 14A, not later than 120 days after December 31,
2021, 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 2021
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
NYSDPS
NYSERDA
NYSPSC
NYSRC
PJM
SEC
Accounting
AFUDC
ASU
GAAP
HLBV
NOL
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 Department of Public Service
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
Net Operating Loss
Other Comprehensive Income
Variable Interest Entity
4
CON EDISON ANNUAL REPORT 2021
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
CARES Act
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
Coronavirus Aid, Relief, and Economic Security Act, as enacted on March 27, 2020
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 2021
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:
Properties
Item 3:
Legal Proceedings
Item 4:
Mine Safety Disclosures
Information about our Executive Officers
Part II
Item 5:
Market for the Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities
Item 6:
[Reserved]
Item 7:
Management’s Discussion and Analysis of Financial Condition and Results of Operations
Item 7A: Quantitative and Qualitative Disclosures about Market Risk
Item 8:
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
Item 9C: Disclosure Regarding Foreign Jurisdictions that Prevent Inspections
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
7
10
10
10
15
44
47
48
48
48
49
50
51
52
95
96
196
196
196
196
197
197
197
197
197
199
205
206
6
CON EDISON ANNUAL REPORT 2021
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 NY and northern NJ and gas service in
southeastern NY (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 projects
supporting Con Edison’s effort to transition to clean, renewable energy and manages, through joint ventures,
both electric and gas assets while seeking to develop electric transmission projects (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.
Significant Developments and Outlook
•
Con Edison reported 2021 net income of $1,346 million or $3.86 a share compared with $1,101 million or $3.29
a share in 2020. Adjusted earnings were $1,528 million or $4.39 a share in 2021 compared with $1,399 million
or $4.18 a share in 2020. See “Results of Operations” in Item 7 and “Non-GAAP Financial Measures” below.
•
•
•
In 2021, the Utilities invested $3,635 million to upgrade and reinforce their energy delivery systems, the Clean
Energy Businesses invested $298 million in renewable electric projects and Con Edison Transmission invested
$31 million primarily in the electric transmission business. For 2022, 2023 and 2024 the Utilities expect to invest
$4,134 million, $5,015 million and $5,203 million, respectively, for their energy delivery systems, the Clean
Energy Businesses expect to invest $400 million, $400 million and $400 million, respectively, in renewable
electric projects and Con Edison Transmission expects to invest $73 million, $42 million and $10 million,
respectively, primarily in the electric transmission business. See "Capital Requirements and Resources -
Capital Requirements" in Item 1.
Con Edison is considering strategic alternatives with respect to the Clean Energy Businesses, 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. See "Clean Energy
Businesses" in Item 1.
Con Edison plans to meet its capital requirements for 2022 through 2024, 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 $800 million and $1,400 million
of long-term debt, primarily at the Utilities, in 2022 and approximately $2,500 million in aggregate of long-term
debt, including for maturing securities, primarily at the Utilities, during 2023 and 2024. The planned debt
CON EDISON ANNUAL REPORT 2021
7
issuance is in addition to the issuance of long-term debt secured by the Clean Energy Businesses’ renewable
electric projects. The company's plans also include the issuance of up to $850 million of common equity in
2022 and approximately $750 million in aggregate of common equity during 2023 and 2024, in addition to
common equity under its dividend reinvestment, employee stock purchase and long-term incentive plans.
Con Edison’s financing plans do not include the impact, if any, that may result from its evaluation of strategic
alternatives with respect to the Clean Energy Businesses. See "Clean Energy Businesses" in Item 1.
CECONY forecasts average annual growth in peak demand in its service area at design conditions over the
next five years for electricity, gas and steam to be approximately 0.4 percent, 1.3 percent and 0.1 percent,
respectively. 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 0.3 percent and average annual growth in gas peak
demand in its service area over the next five years at design conditions to be approximately 0.1 percent. See
“The Utilities” in Item 1.
In July 2021, the NYSPSC approved a settlement agreement among CECONY, O&R and the New York State
Department of Public Service (NYSDPS) that fully resolves all issues and allegations that have been raised or
could have been raised by the NYSPSC against CECONY and O&R with respect to: (1) the July 2018 rupture
of a CECONY steam main located on Fifth Avenue and 21st Street in Manhattan; (2) the July 2019 electric
service interruptions to approximately 72,000 CECONY customers on the west side of Manhattan and to
approximately 30,000 CECONY customers primarily in the Flatbush area of Brooklyn; (3) the August 2020
electric service interruptions to approximately 330,000 CECONY customers and approximately 200,000 O&R
customers following Tropical Storm Isaias; and (4) the August 2020 electric service interruptions to
approximately 190,000 customers resulting from faults at CECONY’s Rainey substation following Tropical
Storm Isaias. See "Other Regulatory Matters" in Note B to the financial statements in Item 8.
In October 2021, O&R, the NYSDPS and other parties entered into a joint proposal for new electric and gas
rate plans for the three-year period January 2022 through December 2024. The joint proposal is subject to
NYSPSC approval and provides for electric rate increases of $4.9 million, $16.2 million and $23.1 million,
effective January 1, 2022, 2023, and 2024, respectively. The joint proposal provides for gas rate increases of
$0.7 million, $7.4 million and $9.9 million, effective January 1, 2022, 2023, and 2024, respectively. The joint
proposal includes certain COVID-19 provisions, such as: recovery of 2020 late payment charges over three
years ($2.8 million); reconciliation of late payment charges to amounts reflected in rates for years 2021 through
2024; and reconciliation of write-offs of customer accounts receivable balances to amounts reflected in rates
from January 1, 2020 through December 31, 2024. See "Rate Plans" in Note B to the financial statements in
Item 8.
In November 2021, the NYSPSC issued an order establishing a surcharge recovery mechanism for CECONY
to collect $43 million and $7 million for electric and gas, respectively, of late payment charges and fees that
were not billed for the year ended December 31, 2020. The company recorded such amounts as revenue for
the year ended December 31, 2021, as permitted under the accounting rules for regulated utilities, and also
accrued such amounts as a current asset at December 31, 2021. Pursuant to the November 2021 order, the
company also established a recovery mechanism for CECONY to collect $19 million and $4 million for electric
and gas, respectively, of late payment charges and fees that were not billed for the year ended December 31,
2021 and the company recorded such amounts as revenue for the year ended December 31, 2021, as
permitted under the accounting rules for regulated utilities, and also accrued such amounts as a current asset
at December 31, 2021. In addition, pursuant to the November 2021 order CECONY established a reserve of $7
million toward addressing customer arrearages for the year ended December 31, 2021. The order also
established a surcharge recovery or surcredit mechanism for any fee deferrals for 2022. CECONY resumed
late payment charges for commercial and residential customers who have not experienced a change in
financial circumstances due to the COVID-19 pandemic on September 3, 2021 and October 1, 2021,
respectively. O&R resumed late payment charges for commercial and residential customers who have not
experienced a change in financial circumstances due to the COVID-19 pandemic on October 1, 2021. See
"COVID-19 Regulatory Matters" in Note B to the financial statements in Item 8.
Pursuant to their current electric and gas rate plans, CECONY and O&R recorded $92 million and $2 million of
earnings for the year ended December 31, 2021, respectively, of earnings adjustment mechanisms and positive
incentives, primarily reflecting the achievement of certain energy efficiency measures, as compared with $50
million and $3 million for CECONY and O&R, respectively, for the year ended December 31, 2020. See "Rate
Plans" in Note B to the financial statements in Item 8.
•
•
•
•
•
8
CON EDISON ANNUAL REPORT 2021
•
•
•
•
•
The NYSPSC continued its focused operations audit of the Utilities related to income tax accounting. The audit
is investigating the Utilities’ inadvertent understatement of a portion, the amount of which may be material, of
their calculation of total federal income tax expense for ratemaking purposes. The understatement was related
to the calculation of plant retirement-related cost of removal. See "Other Regulatory Matters" in Note B to the
financial statements in Item 8.
In January 2022, CECONY filed a request with the NYSPSC for electric and gas rate increases of $1,199 million
and $503 million, respectively, effective January 2023. See "Rate Plans" in Note B to the financial statements in
Item 8.
The Clean Energy Businesses installed 446 MW AC of new renewable energy projects in 2021, resulting in a
year-end total installed capacity of 3,061 MW AC, bringing the annual renewable energy production for 2021 to
more than 7.5 terawatt hours. See "Clean Energy Businesses" in Item 1.
During 2021, a subsidiary of Con Edison Gas Pipeline and Storage, LLC (CET Gas) completed the sale of its 50
percent interest in Stagecoach Gas Services LLC for $629 million and recorded a pre-tax impairment loss on its
50 percent interest of $212 million ($147 million after-tax). See “Con Edison Transmission,” in Item 1 and
“Investments” in Note A and Note W to the financial statements in Item 8.
CET Gas recorded a pre-tax impairment loss of $231 million ($162 million after-tax) for the year ended
December 31, 2021 that reduced the carrying value of its investment in Mountain Valley Pipeline LLC (MVP),
a joint venture developing a proposed 300-mile gas transmission project in West Virginia and Virginia, from
$342 million to $111 million. A goodwill impairment loss of $7 million was recorded related to CET Gas’ and
CECONY’s investment in Honeoye Storage Corporation for the year ended December 31, 2021, of which $5
million was attributed to CET Gas. See “Investments” in Note A and Note K to the financial statements in Item 8.
CON EDISON ANNUAL REPORT 2021
9
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 expectation and not facts. Words such as
"forecasts," "expects," "estimates," "anticipates," "intends," "believes," "plans," "will," "target," "guidance,"
"potential," "consider" and similar expressions identify forward-looking statements. The forward-looking statements
reflect information available and assumptions at the time the statements are made, and accordingly speak only as
of that time. Actual results or developments might differ materially from those included in the forward-looking
statements because of various factors including, but not limited to, 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 and 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 are also 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.
10
CON EDISON ANNUAL REPORT 2021
(Millions of Dollars, except per share amounts)
Reported net income for common stock – GAAP basis
2019
2020
2021
$1,343
$1,101
$1,346
Impairment loss related to investment in Mountain Valley Pipeline, LLC (pre-tax) (a)
Income taxes (b)
Impairment loss related to investment in Mountain Valley Pipeline, LLC (net of tax) (a)
Loss from sale of a renewable electric project (pre-tax)
Income taxes (b)
Loss from sale of a renewable electric project (net of tax)
Impairment loss related to investment in Stagecoach Gas Services LLC (pre-tax) (c)
Income taxes (b)
Impairment loss related to investment in Stagecoach Gas Services LLC (net of tax) (c)
Impairment loss related to investment in Honeoye Storage Corporation (pre-tax) (d)
Income taxes
Impairment loss related to investment in Honeoye Storage Corporation (net of tax) (d)
HLBV effects (pre-tax) (e)
Income taxes (f)
HLBV effects (net of tax) (e)
Net mark-to-market effects (pre-tax)
Income taxes (g)
Net mark-to-market effects (net of tax)
Adjusted earnings (Non-GAAP)
Reported earnings per share – GAAP basis (basic)
Impairment loss related to investment in Mountain Valley Pipeline, LLC (pre-tax) (a)
Income taxes (b)
Impairment loss related to investment in Mountain Valley Pipeline, LLC (net of tax) (a)
Loss from sale of a renewable electric project (pre-tax)
Income taxes (b)
Loss from sale of a renewable electric project (net of tax)
Impairment loss related to investment in Stagecoach Gas Services LLC (pre-tax) (c)
Income taxes (b)
Impairment loss related to investment in Stagecoach Gas Services LLC (net of tax) (c)
Impairment loss related to investment in Honeoye Storage Corporation (pre-tax) (d)
Income taxes
Impairment loss related to investment in Honeoye Storage Corporation (net of tax) (d)
HLBV effects (pre-tax) (e)
Income taxes (f)
HLBV effects (net of tax) (e)
Net mark-to-market effects (pre-tax)
Income taxes (g)
Net mark-to-market effects
Adjusted earnings per share (Non-GAAP)
—
—
—
—
—
—
—
—
—
—
—
—
98
(24)
74
27
(6)
21
320
(97)
223
—
—
—
—
—
—
—
—
—
44
(12)
32
57
(14)
43
231
(69)
162
4
(1)
3
212
(65)
147
5
—
5
(142)
44
(98)
(53)
16
(37)
$1,438
$1,399
$1,528
$4.09
$3.29
$3.86
—
0.95
0.66
— (0.29)
(0.19)
—
—
—
—
—
—
—
—
—
—
0.66
—
—
—
—
0.47
0.01
—
0.01
0.61
— (0.19)
—
—
—
—
0.42
0.02
—
0.02
0.31
0.14
(0.41)
(0.09)
(0.04)
0.12
0.22
0.10
0.10
0.18
(0.29)
(0.15)
(0.03)
(0.05)
0.05
0.07
0.13
(0.10)
$4.38
$4.18
$4.39
CON EDISON ANNUAL REPORT 2021
11
(a) Losses recognized with respect to the partial impairments of CET Gas' investment in Mountain Valley Pipeline, LLC. See "Investments -
2020 and 2021 Partial Impairments of Investment in Mountain Valley Pipeline, LLC (MVP)" in Note A 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 26-30% for the year ended
December 31, 2021 and a combined federal and state income tax rate of 30% for the year ended December 31, 2020.
(c) Loss recognized with respect to the partial impairment of CET Gas’ investment in Stagecoach Gas Services LLC. See "Investments -
Partial Impairment of Investment in Stagecoach Gas Services" in Note A and Note W.
(f)
(d) Loss recognized with respect to the goodwill impairment of CET Gas’ investment in Honeoye Storage Corporation. See Note K.
(e)
Income attributable to the non-controlling interest of a tax-equity investor in renewable electric projects accounted for under the hypothetical
liquidation at book value (HLBV) method of accounting. See Note S to the financial statements in Item 8.
The amount of income taxes was calculated using a combined federal and state income tax rate of 31%, 27%, and 24% for the year ended
December 31, 2021, 2020 and 2019, respectively. Adjusted earnings and adjusted earnings per share for 2021 exclude the tax impact on
the parent company of HLBV accounting ($9 million and $0.02 for the year ended December 31, 2021) of the Clean Energy Businesses.
Adjusted earnings and adjusted earnings per share for 2020 and 2019 do not exclude the tax impact on the parent company of HLBV
accounting (($3) million and ($0.01) and ($6) million and ($0.02) for the year ended December 31, 2020 and 2019, respectively) of the
Clean Energy Businesses.
(g) The amount of income taxes was calculated using a combined federal and state income tax rate of 32%, 25% and 22% for the year ended
December 31, 2021, 2020 and 2019, respectively. Adjusted earnings and adjusted earnings per share for 2021 exclude the tax impact on
the parent company of the mark-to-market effects ($3 million and $0.01 for the year ended December 31, 2021) of the Clean Energy
Businesses. Adjusted earnings and adjusted earnings per share for 2020 and 2019 do not exclude the tax impact on the parent
company of the mark-to-market effects (($4) million and ($0.01) and ($2) million and $0.00 for the year ended December 31, 2020 and
2019, respectively) of the Clean Energy Businesses.
12
CON EDISON ANNUAL REPORT 2021
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
Page
15
15
15
15
15
16
16
16
16
16
16
16
16
17
17
18
18
19
19
19
20
20
20
20
21
21
22
22
22
23
23
24
24
24
24
24
25
25
25
25
25
26
26
26
26
26
27
27
CON EDISON ANNUAL REPORT 2021
13
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
28
29
30
30
30
30
31
35
35
37
38
39
41
42
43
43
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.
14
CON EDISON ANNUAL REPORT 2021
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 is considering strategic
alternatives with respect to the Clean Energy Businesses. Con Edison Transmission invests in electric transmission
projects and manages both electric and gas assets while seeking to develop electric transmission projects. During
2021, Con Edison Transmission completed the sale of its 50 percent interest in Stagecoach Gas Services LLC
(Stagecoach). For the year ended December 31, 2021, Con Edison Transmission recorded pre-tax impairment
losses on its investments in Stagecoach, Mountain Valley Pipeline, LLC and Honeoye Storage Corporation. See
"Investments" in Note A, Note K and Note W 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 NY customers. The company is an industry leading owner and operator of
contracted, large-scale solar generation in the United States. Con Edison is a responsible neighbor, helping the
communities it serves become more sustainable.
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 16,884 MMlb of steam annually to approximately 1,555 customers in parts of Manhattan.
CON EDISON ANNUAL REPORT 2021
15
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 NY and northern NJ, an approximately 1,300
square mile service area.
Gas
O&R delivers gas to over 0.1 million customers in southeastern NY.
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. The
Clean Energy Businesses have approximately 3,000 megawatts (AC) of renewable energy projects in the U.S.
Con Edison is considering strategic alternatives with respect to the Clean Energy Businesses.
Con Edison Transmission
Con Edison Transmission, Inc. invests in electric transmission projects and manages both electric and gas assets
through its wholly-owned subsidiaries, Consolidated Edison Transmission, LLC (CET Electric) and Con Edison Gas
Pipeline and Storage, LLC (CET Gas). CET Electric owns a 45.7 percent interest in New York Transco LLC, which
owns and has been selected to build additional electric transmission assets in NY. CET Gas and CECONY own 71.2
percent and 28.8 percent interests, respectively, in Honeoye Storage Corporation (Honeoye), which operates a gas
storage facility in upstate NY. In addition, CET Gas owns a 10.2 percent interest (that is expected to be reduced to
8.5 percent based on the current project cost estimate and CET Gas’ previous capping of its cash contributions to
the joint venture) in Mountain Valley Pipeline LLC (MVP), a joint venture developing a proposed 300-mile gas
transmission project in WV and VA. During 2021, CET Gas sold its 50 percent interest in Stagecoach Gas Services
LLC (Stagecoach), a gas pipeline and storage business located in northern PA and southern NY. See Note A and
Note W to the financial statements in Item 8. For the year ended December 31, 2021, CET Gas recorded
impairment losses on its investments in Stagecoach, Honeoye and MVP. See "Investments in Note A, Note K and
Note W 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 NY. 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 U to the financial statements in Item 8. The NYSPSC exercises jurisdiction over the siting of electric
transmission lines in NY State (see “Con Edison Transmission,” below) and approves mergers or other business
combinations involving NY utilities.
In addition, under the New York Public Service Law, the NYSPSC has the authority to (i) impose penalties on NY
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. O&R’s NJ 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.
16
CON EDISON ANNUAL REPORT 2021
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 2021, 60 percent of the electricity and 35 percent of
the gas CECONY delivered to its customers, and 54 percent of the electricity and 29 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 NY 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 NY, 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 NY
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
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.
CON EDISON ANNUAL REPORT 2021
17
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.
NY electric and steam utilities are required to provide credits to customers who are without 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 NY 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 NY 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 reasonably implement its plan during an event, the NYSPSC
may impose penalties or deny recovery of any part of the service restoration costs caused by such failure. In July
2021, the NYSPSC approved emergency response plans for CECONY and O&R. In December 2021, CECONY and
O&R each submitted updated plans for 2022.
In December 2021, the New York State legislature amended the New York State Public Service Law, effective April
2022, to require NY electric utilities, including CECONY and O&R, to provide compensation to residential and small
business customers that experience widespread prolonged outages lasting more than seventy-two consecutive
hours, subject to certain exceptions, including: a bill credit of $25 for each twenty-four hour period beyond the
seventy-two consecutive hour outage; reimbursement of customers for food spoilage up to $500; and
reimbursement of affected residential customers for prescription medicine spoilage losses without limitation. Any
such costs incurred by CECONY and O&R are not recoverable from customers unless the utility files a petition with
the NYSPSC requesting recovery and such petition is granted by the NYSPSC. The NYSPSC is required to develop
rules for the law’s implementation.
Generic Proceedings
The NYSPSC from time to time conducts “generic” proceedings to consider issues relating to all electric and gas
utilities operating in NY State. Proceedings include clean energy and related implementation proceedings, and
proceedings relating to energy affordability, 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.
18
CON EDISON ANNUAL REPORT 2021
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 NY State, including those of the Utilities, as an integrated system. It also administers wholesale markets
for electricity in NY 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 NY 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 NJ 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, gas turbines, reciprocating engines 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. In December 2021, New York City enacted a law
that will phase-out the use of natural gas in certain new construction buildings, including major renovations, in New
York City. 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:
CON EDISON ANNUAL REPORT 2021
19
Technology
CECONY
O&R
Total MW, except project number
2017
2018
2019
2020
2021
2017
2018
2019
2020
2021
Internal-combustion engines
Photovoltaic solar
Battery energy storage
Gas turbines
Micro turbines
Fuel cells
Steam turbines
Landfill
108
178
110
226
114
276
129
323
155
398
—
48
14
12
6
—
—
48
17
13
6
—
8
48
18
20
6
—
13
53
21
30
6
—
18
61
23
30
6
—
2
75
—
20
1
—
—
2
2
96
—
20
1
—
—
2
3
3
3
121
154
183
1
20
1
—
—
2
6
20
1
—
—
2
11
20
1
—
—
2
Total distribution-level DG
366
420
490
575
691
100
121
148
186
220
Number of DG projects
18,090 23,942 30,539 36,194 43,702
6,537
7,566
8,687
9,643
10,913
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 projects and manages both electric and gas assets, 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, 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 P 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 $21,240
million and $20,366 million at December 31, 2021 and 2020, respectively. For its transmission facilities, the costs for
utility plant, net of accumulated depreciation, were $3,658 million and $3,496 million at December 31, 2021 and
2020, respectively, and for its portion of the steam-electric generation facilities, the costs for utility plant, net of
accumulated depreciation, were $559 million and $572 million, at December 31, 2021 and 2020, 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, 2021, the company’s distribution system had a transformer capacity of
33,413 MVA, with 37,477 miles of overhead distribution lines and 98,806 miles of underground distribution lines.
The underground distribution lines represent the single longest underground electric delivery system in the
United States.
20
CON EDISON ANNUAL REPORT 2021
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, 2021, 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. 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 718 MW. The company
expects to have sufficient amounts of gas and fuel oil available in 2022 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,
2017
2018
2019
2020
2021
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
20,710
21,549
9,069
51,328
$5,299
2,613
683
211
$7,972
$7,971
$8,062
$8,103
$8,806
25.3
19.7
26.4
19.3
25.3
18.6
26.1
20.2
27.3
23.5
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 P 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.
CECONY’s 2021 service area actual hourly peak demand was 11,997 MW, which occurred on June 30, 2021.
“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 company estimates that, under Design Weather Conditions, the 2022
service area hourly peak demand will be 12,570 MW. As of January 2022, 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 0.4 percent per year, including the effect of certain electric energy efficiency programs
and the anticipated phase-out of natural gas in certain new construction buildings, including major renovations, in
CON EDISON ANNUAL REPORT 2021
21
New York City. See “Environmental Matters – Clean Energy Future,” below. 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 2021 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 2022. The company plans to meet its
continuing obligation to supply electricity to its full-service 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
Q to the financial statements in Item 8. To reduce the volatility of its full-service 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. The generating
stations have a combined electric capacity of approximately 725 MW, based on 2021 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 2019, the New York State Department of Environmental Conservation 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. Compliance with the rule will impact approximately 1,400 MW of generating units in CECONY's service
territory, of which 86 MW is owned by CECONY. In January 2021, CECONY updated its Local Transmission Plan
(LTP) to address identified reliability needs on its local system as a result of the regulation through the construction
of three transmission projects, the Reliable Clean City (RCC) projects. In addition, CECONY continues to monitor
forecasted system voltage performance and will propose solutions in a future LTP update if a need for support
persists in the forecast. In April 2021, the NYSPSC approved CECONY’s December 2020 petition to recover $780
million of costs to construct the RCC projects to solve the local reliability needs.
Gas Operations
Gas Facilities
CECONY’s capitalized costs for utility plant, net of accumulated depreciation, for gas facilities, which are primarily
distribution facilities, were $9,748 million and $8,522 million at December 31, 2021 and 2020, respectively.
Natural gas is delivered by pipeline to CECONY at various points in or near its service territory and is distributed to
customers by the company through an estimated 4,350 miles of mains and 377,971 service lines. The company
owns a natural gas liquefaction facility and storage tank at its Astoria property in Queens, NY. The plant can store
1,062 MDt of which a maximum of about 240 MDt can be withdrawn per day. The company has approximately 1,226
MDt of additional natural gas storage capacity available to it at a field in upstate NY, owned and operated by
Honeoye Storage Corporation, a corporation 71.2 percent owned by CET Gas and 28.8 percent owned by
CECONY.
22
CON EDISON ANNUAL REPORT 2021
Gas Sales and Deliveries
CECONY delivers gas to its full-service customers who purchase gas from the company. The company generally
recovers the cost of the gas that it buys and then sells to its full-service customers. It does not make any margin or
profit on the gas it sells. The company also delivers gas to its customers who choose to purchase gas from other
suppliers (retail choice program). CECONY’s gas delivery revenues are subject to a weather normalization clause
and a revenue decoupling mechanism. As a result, its gas delivery revenues are generally not affected by changes
in delivery volumes from levels assumed when rates were approved. CECONY’s gas sales and deliveries for the
last five years were:
Gas Delivered (MDt)
Firm sales
Full service
Firm transportation of customer-owned gas
Total Firm Sales
Interruptible sales (a)
Total Gas Delivered to CECONY Customers
Transportation of customer-owned gas
NYPA
Other (mainly generating plants and interruptible transportation)
Off-system sales
Total Sales
Gas Delivered ($ 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,
2017
2018
2019
2020
2021
83,005
71,353
154,358
7,553
161,911
92,305
82,472
87,637
81,710
174,777
169,347
7,351
9,903
182,128
179,250
78,515
76,614
155,129
8,482
163,611
81,637
76,765
158,402
5,927
164,329
37,033
34,079
39,643
41,577
43,094
83,117
55
93,346
195
72,712
12
70,537
12
67,871
12
282,116
309,748
291,617
275,737
275,306
$1,136
$1,356
$1,327
$1,229
$1,473
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
704
2,177
29
2,206
2
59
—
111
$2,036
$2,378
$18.59
$10.77
$20.71
$13.67
(a)
Includes 3,816, 3,326, 5,484, 3,510 and 1,920 MDt for 2017, 2018, 2019, 2020 and 2021, respectively, which are also reflected in firm
transportation and other.
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 P to the financial statements in Item 8.
Gas Peak Demand
The gas actual peak day demand for firm gas customers in CECONY’s service area occurs during the winter
heating season and during the winter of 2021/2022 (through January 31, 2022) occurred on January 29, 2022 when
the firm gas customers' demand reached approximately 1,268 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 2022/2023 service area peak day demand for firm gas
customers will be 1,701 MDt. The forecasted peak day demand for firm gas customers at design conditions does
not include gas used by interruptible gas customers including electric and steam generating stations. As of January
2022, the company forecasts an average annual growth of the gas peak day demand for firm gas customers over
the next five years at design conditions to be approximately 1.3 percent in its service area, including the effect of
certain gas energy efficiency programs and the anticipated phase-out of natural gas in certain new construction
buildings, including major renovations, in New York City. See “Environmental Matters – Clean Energy Future,”
below. The five-year forecast in peak demand is used by the company for gas supply planning purposes.
CON EDISON ANNUAL REPORT 2021
23
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 Gas Pipeline’s East 300 Update 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 Gas 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 U 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 $392.8 million in 2021, including $346.7 million for CECONY. See “Contractual
Obligations,” below. At December 31, 2021, the contracts were for various terms extending to 2025 for supply and
2043 for transportation and storage. During 2021, CECONY entered into one new transportation and storage
contract. 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 U 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 $1,924 million and $1,854 million at December 31, 2021 and
2020, respectively. See "CECONY – Electric Operations – Electric Facilities," above.
CECONY generates steam at one steam-electric generating station and four steam-only generating stations and
distributes steam to its customers through approximately 105 miles of transmission, distribution and service piping.
Steam Sales and Deliveries
CECONY’s steam sales and deliveries for the last five years were:
Steam Sold (MMlb)
General
Apartment house
Annual power
Total Steam Delivered to CECONY Customers
Steam Sold ($ in millions)
General
Apartment house
Annual power
Other operating revenues
Total Steam Delivered to CECONY Customers
Average Revenue per Mlb Sold
Year Ended December 31,
2017
2018
2019
2020
2021
490
5,754
13,166
19,410
$26
158
392
19
$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
504
5,013
11,367
16,884
$25
137
340
30
$627
$29.40
$508
$29.00
$532
$29.73
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 P 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 2021/2022 (through January 31, 2022) occurred on January 21, 2022 when the actual hourly
demand reached approximately 6.9 MMlb per hour. “Design Weather Conditions” for the steam system is a standard
24
CON EDISON ANNUAL REPORT 2021
to which the actual hourly peak demand is adjusted for evaluation and planning purposes. The company’s estimate
for the winter of 2022/2023 hourly peak demand of its steam customers is about 8.3 MMlb per hour under Design
Weather Conditions. The company forecasts an average annual increase in steam hourly peak demand in its
service area at Design Weather Conditions over the next five years to be approximately 0.1 percent.
On December 31, 2021, 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 2022/2023 winter.
Steam Supply
30 percent of the steam produced by CECONY in 2021 was supplied by the company’s steam-only generating
assets; 50 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 $1,178 million
and $1,115 million at December 31, 2021 and 2020, respectively. For its transmission facilities, the costs for utility
plant, net of accumulated depreciation, were $297 million and $290 million at December 31, 2021 and 2020,
respectively.
O&R and RECO own, in whole or in part, transmission and distribution facilities which include 533 circuit miles of
transmission lines, 15 transmission substations, 64 distribution substations, 87,564 in-service line transformers,
3,924 pole miles of overhead distribution lines and 2,291 miles of underground distribution lines. O&R’s
transmission system is part of the NYISO system except that portions of RECO’s system are located within the
transmission area controlled by PJM.
Electric Sales and Deliveries
O&R delivers electricity to its full-service customers who purchase electricity from the company. The company also
delivers electricity to its customers who purchase electricity from other suppliers through the company’s retail choice
program.
The company charges all customers in its service area for the delivery of electricity. O&R generally recovers, on a
current basis, the cost of the electricity that it buys and then sells to its full-service customers. It does not make any
margin or profit on the electricity it sells. O&R’s NY electric revenues (which accounted for 76 percent of O&R’s
electric revenues in 2021) are subject to a revenue decoupling mechanism. As a result, O&R’s NY electric delivery
revenues are generally not affected by changes in delivery volumes from levels assumed when rates were
approved. O&R’s electric sales in NJ are not subject to a revenue decoupling mechanism. O&R’s electric sales and
deliveries for the last five years were:
Electric Energy Delivered (millions of kWh)
Total deliveries to O&R full service customers
Delivery service for retail choice customers
Total Deliveries in Franchise Area
Electric Energy Delivered ($ 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,
2017
2018
2019
2020
2021
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
2,702
2,839
5,541
$453
223
5
$681
19.0
13.0
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 P to the financial statements in Item 8.
CON EDISON ANNUAL REPORT 2021
25
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 2021 was cooler than design conditions. O&R’s 2021 service area actual hourly peak demand
was 1,520 MW, which occurred on June 30, 2021. “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 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 2022 service area peak demand will be 1,570 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 0.3 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 2021 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 2022. 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
Q 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 $725 million and $684 million at December 31, 2021 and 2020, respectively. Natural gas
is delivered by pipeline to O&R at various points in or near its service territory and is distributed to customers by the
company through an estimated 1,882 miles of mains and 106,574 service lines.
Gas Sales and Deliveries
O&R delivers gas to its full-service customers who purchase gas from the company. O&R generally recovers the
cost of the gas that it buys and then sells to its full-service customers. It does not make any margin or profit on the
gas it sells. The company also delivers gas to its customers who choose to purchase gas from other suppliers (retail
choice program). O&R’s gas delivery revenues are subject to a weather normalization clause and to a revenue
decoupling mechanism. As a result, its gas delivery revenues are generally not affected by changes in delivery
volumes from levels assumed when rates were approved. O&R’s gas sales and deliveries for the last five years
were:
26
CON EDISON ANNUAL REPORT 2021
Gas Delivered (MDt)
Firm sales
Full service
Firm transportation
Total Firm Sales
Interruptible sales
Total Gas Delivered to O&R Customers
Transportation of customer-owned gas
Sales for resale
Sales to electric generating stations
Off-system sales
Total Sales
Gas Delivered ($ 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,
2017
2018
2019
2020
2021
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
13,998
7,584
21,582
3,821
25,403
468
26
81
25,035
26,721
26,583
24,517
25,978
Year Ended December 31,
2017
2018
2019
2020
2021
$139
74
213
7
220
—
12
$232
$166
78
244
6
250
—
(1)
$249
$161
63
224
6
230
$141
62
203
6
209
—
29
—
24
$259
$233
$190
55
245
6
251
—
9
$260
$13.86
$11.08
$14.22
$11.80
$13.32
$10.68
$12.40
$9.51
$14.09
$11.24
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 P 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 2021/2022 (through January 31, 2022) occurred on January 15, 2022 when the firm
sales customers' demand reached approximately 192 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 2022/2023 service area peak day demand for firm sales
customers will be 234 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 0.1 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.
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 2021
27
Clean Energy Businesses
The following table provides information about the Clean Energy Businesses' renewable electric projects that are in
operation and/or in construction at December 31, 2021. Unless otherwise noted, the projects listed in the table
below or the Clean Energy Businesses' equity interest in these projects have been pledged as security for project
debt financing.
Generating
Capacity
(MW AC)
Power
Purchase
Agreement
(PPA) Term
(In Years) (a)
Actual
In-Service/
Acquisition
Date
State
PPA Counterparty
Project Name
Utility Scale
Solar
PJM assets (c)
New England assets (c)
California Solar
Mesquite Solar 1
Copper Mountain Solar 2
Copper Mountain Solar 3
California Solar 2
Texas Solar 4
Texas Solar 5
Texas Solar 7
California Solar 3
Upton Solar
California Solar 4
Copper Mountain Solar 1
Copper Mountain Solar 4 (d)
Mesquite Solar 2 (d)
Mesquite Solar 3 (d)
Great Valley Solar (d)
Water Strider Solar (d)
Battle Mountain Solar/Battery Energy
Storage System (d)
Copper Mountain Solar 5 (d)
Other (c)
Total Solar
Wind
Broken Bow II
Wind Holdings
Adams Rose Wind
Other (c)
Total Wind
Total MW (AC) in Operation
Total MW (AC) in Construction (c)
Total MW (AC) Utility Scale
Behind the Meter
Total MW (AC) in Operation (c)
Total MW (AC) in Construction (c)
Total MW Behind the Meter
73
24
110
165
150
255
80
40
100
112
110
158
240
58
94
100
150
200
80
101
250
26
2,676
75
180
23
42
320
2,996
8
3,004
65
4
69
(b)
2011/2013
Various
25
20
25
20
20
25
25
25
20
25
20
12
20
18
23
17
20
25
25
2011/2017
2012/2013
2013
2013/2015
2014/2015
2014/2016
2014
2015
2016
2016/2017
2017
2017/2018
2018
2018
2018
2018
2018
2021
2021
2021
NJ/PA
MA/RI
CA
AZ
NV
NV
CA
TX
TX
TX
CA
TX
CA
NV
NV
AZ
AZ
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)
CA MCE/SMUD/PG&E/SCE
VA
NV
NV
VEPCO
SPP
NPC
Various
Various
Various
Various
25
Various
7
Various
2014
Various
2016
Various
NE
SD/MT
MN
Various
NPPD
NWE/Basin Electric
Dairyland
Various
(a) Represents PPA contractual term or remaining term from the date of acquisition.
(b) Solar renewable energy credit hedges are in place, in lieu of PPAs, through 2025.
(c) Projects have generally not been pledged as security for project debt financing.
(d) Projects are financed with tax equity. See Note S to the financial statements in Item 8.
28
CON EDISON ANNUAL REPORT 2021
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. The Clean Energy Businesses focus their efforts on utility scale renewable electric
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 projects in operation at the end of the last five years:
Generating Capacity (MW AC)
Renewable electric projects
2017
1,358
2018
2,588
2019
2,628
2020
2,809
2021
3,061
Renewable electric volumes produced by utility scale assets at the end of the last five years were:
Description
Renewable electric projects
Solar
Wind
Total
Millions of kWh Produced
For the Years Ended December 31,
2018
2,680
1,074
3,754
2019
5,506
1,333
6,839
2017
2,158
988
3,146
2020
5,699
1,425
7,124
2021
6,219
1,300
7,519
Energy-Related Products and Services
The Clean Energy Businesses provide services to manage the dispatch, fuel requirements and risk management
activities for 11,127 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 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 P to the
financial statements in Item 8.
CON EDISON ANNUAL REPORT 2021
29
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 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 NYISO
transmission customers in NY 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 NYISO transmission customers in NY 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 71.2 percent interest in Honeoye Storage Corporation (Honeoye), a
company that operates a gas storage facility in upstate NY and in which CECONY owns the remaining interest.
A goodwill impairment loss of $7 million was recorded related to CET Gas’ and CECONY’s investment in Honeoye
Storage Corporation for the year ended December 31, 2021, of which $5 million was attributed to CET Gas. See
Note K to the financial statements in Item 8.
In addition, CET Gas owns a 10.2 percent interest (that is expected to be reduced to 8.5 percent based on the
current project cost estimate and CET Gas’ previous capping of its cash contributions to the joint venture) in
Mountain Valley Pipeline, LLC (MVP). MVP is a joint venture with four other partners to construct and operate a
proposed 300-mile gas transmission project in WV and VA. CET Gas recorded pre-tax impairment losses on its
interest in MVP of $231 million ($162 million after-tax) and $320 million ($223 million after-tax) for the years ended
December 31, 2021 and December 31, 2020, respectively. In May 2021, the operator of the Mountain Valley
Pipeline indicated that, subject to receipt of certain authorizations and resolution of certain challenges, it is targeting
an in-service date for the project of summer 2022 at an overall project cost of approximately $6,200 million
excluding allowance for funds used during construction. See "Investments - 2020 and 2021 Partial Impairments of
Investment in Mountain Valley Pipeline, LLC (MVP)" in Note A to the financial statements in Item 8.
During 2021, CET Gas sold its 50 percent interest in Stagecoach Gas Services LLC (Stagecoach), a gas pipeline
and storage business located in northern PA and southern NY for $629 million. CET Gas recorded pre-tax
impairment losses of $212 million ($147 million after-tax). See "Investments - Partial Impairment of Investment in
Stagecoach Gas Services" in Note A and Note W to the financial statements in Item 8.
For information about Con Edison Transmission's results, see "Results of Operations" in Item 7 and Note P to the
financial statements in Item 8.
30
CON EDISON ANNUAL REPORT 2021
Capital Requirements and Resources
Capital Requirements
The following table contains the Companies’ capital requirements for the years 2019 through 2021 and their current
estimate of amounts for 2022 through 2024:
(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 (c)
Total capital investments
Retirement of long-term securities
Con Edison – parent company
CECONY
O&R
Clean Energy Businesses
Total retirement of long-term securities
Total capital requirements
2019
$1,851
1,078
91
3,020
142
61
203
8
197
205
248
3,676
553
475
Actual
2020
2021
2022
2023
2024
Estimate
$2,080
$2,189
1,044
122
3,246
159
61
220
2
1
3
616
4,085
3
350
1,126
103
3,418
147
70
217
30
1
31
$2,585
1,192
116
3,893
$3,473
1,173
116
4,762
$3,669
1,187
101
4,957
164
77
241
72
1
73
177
76
253
42
—
42
172
74
246
10
—
10
298
3,964
400
4,607
400
5,457
400
5,613
1,178
640
—
141
1,959
$5,923
293
—
—
147
440
650
—
—
319
969
—
250
—
143
393
$5,047
$6,426
$6,006
62
—
105
1,195
165
518
$4,871
$4,603
(a) CECONY’s capital investments for environmental protection facilities and related studies were $507 million, $491 million and $731 million in
2019, 2020 and 2021, respectively, and are estimated to be $670 million in 2022.
(b) Amounts shown do not include amounts for the energy efficiency, demand reduction and combined heat and power programs.
(c) Estimates shown for 2022, 2023 and 2024 do not include the impact, if any, that may result from Con Edison’s evaluation of strategic
alternatives with respect to the Clean Energy Businesses. See "Clean Energy Businesses" in Item 1.
The Utilities have an ongoing need to make substantial capital investments primarily to maintain the safety, reliability
and resilience 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 invest in efforts that will mitigate and
adapt to the impact of climate change.
Estimated capital investments for Con Edison Transmission primarily reflect planned investments in electric
transmission projects. Estimated capital investments for the Clean Energy Businesses primarily reflect planned
investments in renewable electric projects. Actual capital investments 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, 2021 to make payments
pursuant to contracts. Long-term debt, capital lease obligations and other noncurrent liabilities are included on their
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.
CON EDISON ANNUAL REPORT 2021
31
(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
Total
Payments Due by Period
1 year
or less
Years
2 & 3
Years
4 & 5
After 5
years
—
—
147
293
936
1,376
$250
—
462
650
1,818
3,180
—
—
—
60
1
20
81
116
124
240
61
301
270
385
655
30
57
87
742
1,077
82
176
1,335
$3,835
1
—
1
118
—
36
154
217
133
350
33
383
52
755
807
8
112
120
927
685
13
34
732
$5,377
$250
$18,075
—
457
—
1,773
2,480
—
—
—
119
—
35
154
213
111
324
—
324
—
566
566
—
84
84
650
1,673
6
10
1,689
$5,297
975
1,711
—
14,490
35,251
—
1
1
394
—
483
877
1,172
434
1,606
—
1,606
—
2,602
2,602
—
395
395
2,997
474
45
8
527
$41,259
Total
$18,575
975
2,777
943
19,017
42,287
1
1
2
691
1
574
1,266
1,718
802
2,520
94
2,614
322
4,308
4,630
38
648
686
5,316
3,909
146
228
4,283
$55,768
(a)
(b)
(c)
Includes interest on variable rate debt calculated at rates in effect at December 31, 2021.
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 $3,379 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
Energy Businesses have also entered into power purchase agreements for the sale of power from their renewable electric projects,
provisions of which provide for penalties to be paid by the Clean Energy Businesses in the event certain minimum production quantities are
32
CON EDISON ANNUAL REPORT 2021
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, Q 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 U 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 and revolving credit agreements with banks, 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 shares 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 2022 through 2024, 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 $800 million and $1,400 million of
long-term debt, primarily at the Utilities, in 2022 and approximately $2,500 million in aggregate of long-term debt,
including for maturing securities, primarily at the Utilities, during 2023 and 2024. The planned debt issuance is in
addition to the issuance of long-term debt secured by the Clean Energy Businesses’ renewable electric projects.
The company's plans also include the issuance of up to $850 million of common equity in 2022 and approximately
$750 million in aggregate of common equity during 2023 and 2024, in addition to common equity under its dividend
reinvestment, employee stock purchase and long-term incentive plans. Con Edison’s financing plans do not include
the impact, if any, that may result from its evaluation of strategic alternatives with respect to the Clean Energy
Businesses. See "Clean Energy Businesses" in Item 1.
In 2021, the NYSPSC authorized CECONY, through 2025, to issue up to $4,025 million of debt securities ($750
million of which the company had issued as of December 31, 2021). In 2020, the NYSPSC authorized O&R, through
2023, to issue up to $165 million of debt securities ($150 million of which the company had issued as of
December 31, 2021). 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, 2021, the
Utilities had not refunded any securities pursuant to these authorizations. In January 2022, O&R filed a petition with
the NYSPSC for authorization to issue up to $285 million of debt securities prior to December 31, 2025.
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 Q to the financial statements in Item 8.
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.
CON EDISON ANNUAL REPORT 2021
33
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)
2017
51.1
50.8
2018
49.0
48.6
2019
49.6
49.2
2020
48.3
47.9
2021
47.4
47.0
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). LIBOR’s administrator ceased publishing
one-week and two-month U.S. Dollar LIBOR immediately after the LIBOR publication on December 31, 2021, and is
scheduled to cease publication of the remaining U.S. Dollar LIBOR tenors immediately after the 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 $1,153 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 $1,031 million (see Note Q to the financial statements in Item 8). Con Edison
expects that 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.
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CON EDISON ANNUAL REPORT 2021
Environmental Matters
Clean Energy Future
Clean Energy Goals
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 released draft recommendations in December 2021 for public comment due in May 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 borne by load serving entities across New York State on a volumetric basis. 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 REC 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 which are only available 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 January 2022, NYSERDA expanded its
contract with Empire Wind Project to 1,260 MW and awarded another contract 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, NY’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 facilitate achieving 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. In January 2022, the NYSPSC issued its order on power grid study
recommendations that authorizes CECONY to file a comprehensive petition addressing a proposed “Con Edison
Hub” in Brooklyn, NY that could accommodate at least 3,000 MW of offshore wind generation.
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 before it could go into effect when the EPA issued its
Affordable Clean Energy (ACE) rule. The ACE rule established guidelines for states to use when developing plans
to limit carbon dioxide emissions at coal-fired power plants and included implementing regulations for future
existing-source rules under a restrictive interpretation of 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 had potential cost implications for utilities because it would have had the effect of limiting utilities' flexibility to
use measures that would have been permitted under the Clean Power Plan, such as emissions trading and
averaging to cost-effectively meet emissions limits. The ACE rule could have also adversely impacted 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'
CON EDISON ANNUAL REPORT 2021
35
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 January 2022, Con Edison, as part of a coalition of public and
private electric utilities, filed a brief with the U.S. Supreme Court asking it not to adopt the restrictive statutory
reading of the Clean Air Act that was rejected by the Court of Appeals and had been the legal underpinning of the
ACE rule.
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.
In December 2021, New York City enacted Local Law 154. The law prohibits submitting permits for certain new
construction buildings, including major renovations, for buildings that use oil, natural gas and some low carbon fuels
beginning in 2024 for affected buildings with less than seven stories and beginning in 2027 for all other affected
buildings. The law includes exceptions for buildings used for electric or steam generation, commercial kitchens,
manufacturing, laundromats, and hospitals and the Department of Buildings may create additional exceptions.
Energy Efficiency, Electric Vehicles and Energy Storage
In January 2020, the NYSPSC issued an order directing energy efficiency targets and budgets for NY 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.
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 NY 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.
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.
36
CON EDISON ANNUAL REPORT 2021
The NYSPSC is directing development by NY 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. Regarding the latter, CECONY and O&R are working
with other NY electric utilities and NYSERDA to respond to the NYSPSC’s order to implement a data access
framework and Integrated Energy Data Resources to share energy-related information. The Utilities are also
working with the other utilities to enhance the NYSPSC’s Utility Energy Registry hosted by NYSERDA that provides
public access to aggregated community energy usage data from the utilities. 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, 2021, the NYSPSC staff has approved one
joint CECONY-O&R, seven CECONY and three 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 NY 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 NY,
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.
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 adopted a climate
change planning and design guideline, created an executive committee to oversee implementation of the plan, and
established a climate risk and resilience team to execute the day-to-day activities required by the plan.
Based on the most recent data (2019) 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 NY State. Con Edison’s estimated emissions of GHG
during the past five years were:
(Metric tons, in millions (a))
CO2 equivalent emissions
2017
3.0
2018
3.1
2019
2.9
2020
2.7
2021
2.8
(a) Estimated emissions for 2021 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
CON EDISON ANNUAL REPORT 2021
37
CECONY’s steam production facilities as well as projects to reduce sulfur hexafluoride emissions and to replace
leak-prone 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
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 2021, NYSERDA and the New York State Department of Environmental Conservation (NYSDEC) published the
2021 Statewide GHG Emissions Report, which reported that emissions from electricity generated in-state
decreased 65 percent between 1990 and 2019 due, in part, to the decrease in the burning of coal and petroleum
products in the electricity generation sector in NY and the increase in renewables generation in NY.
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 $224 million, $212 million and $305 million in 2021, 2020, and 2019
respectively. For information about NYSPSC proceedings considering renewable generation see “Clean Energy
Future," above.
CECONY is subject to carbon dioxide emissions regulations established by NY State under the Regional
Greenhouse Gas Initiative (RGGI) due to its ownership of electric generation assets. 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. Due to changes in the New York State CO2 Budget Trading Program,
for the fifth RGGI control period (2021 - 2023) two additional CECONY generation units were added to the RGGI
program. However, since the affected units are used only for peaking generation and when needed to restore power
to the electric grid, the incremental allowances that will need to be purchased 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:
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CON EDISON ANNUAL REPORT 2021
•
•
Build a resilient, 22nd century electric grid that delivers 100% clean energy by 2040;
Empower the Companies’ customers to meet their climate goals by accelerating energy efficiency with deep
retrofits, aiming to electrify most building heating systems in the service territories by 2050, and providing
all-in support for electric vehicles across the service territories;
•
• Reimagine the Utilities’ gas systems by aiming to decarbonize and reduce the use of fossil natural gas, and
exploring new ways to use the Utilities’ existing, resilient gas infrastructure to serve customers’ future
needs;
Lead in reducing the Companies’ carbon footprint by aiming for net-zero direct emissions from sources
owned or controlled by the Companies (Scope 1) by 2040 and focusing on decarbonizing CECONY’s steam
system and other operations of the Utilities: and
Partner with the Companies’ stakeholders to improve the quality of life of the neighborhoods the Companies
serve and live in, focusing on disadvantaged communities.
•
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
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
$630 million to $2,390 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, NY. 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, the manufacture and storage of 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 $175 million to $582 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
CON EDISON ANNUAL REPORT 2021
39
Brooklyn, NY. 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 $112 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 order. In January 2020, the EPA issued an order that requires six 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, although actual
costs may be significantly higher, 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 20 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, NY. 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 2023 and 2024 and
issuance of the EPA's record of decision selecting a remedy for the site thereafter. CECONY is unable to estimate
its exposure to liability for the Newtown Creek site.
Other Superfund Sites
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 2021
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
Other Environmental Matters
In July 2021, a CECONY feeder failure led to the discharge of thousands of gallons of dielectric fluid from a street
manhole in New Rochelle, NY. Dielectric fluid reached nearby streets, properties and the New Rochelle Harbor.
CECONY, the U.S. Coast Guard, the NYSDEC and other agencies responded to the incident. The company
stopped the feeder leak on the same day that the discharge occurred and has completed the spill recovery
operations. In coordination with federal and state regulators, CECONY is evaluating certain shoreline areas for the
potential presence of residual dielectric fluid and the extent to which additional cleaning in such areas may be
necessary. In addition, the company has received third-party damage claims. The costs associated with this matter
are not expected to have a material adverse effect on the company’s financial condition, results of operations or
liquidity. In connection with the incident, the company may incur monetary sanctions of more than $0.3 million for
violations of certain provisions regulating the discharge of materials into, and for the protection of, the environment.
In 2016, CECONY and another utility responded to a reported dielectric fluid leak at a NJ marina on the Hudson
River associated with one or two underwater transmission lines, the NJ portion of which is owned and operated by
the other utility and the NY 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
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, NY. 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 and has received the NYSDEC’s decision regarding the remedial work
to be performed at all seven of its MGP sites. Of the seven 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 $90
million to $141 million.
CON EDISON ANNUAL REPORT 2021
41
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.
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. In 2021, the EPA
finalized changes to the Transport Rule in response to a court decision. The revised Transport Rule reduced the
number of allowances allocated to CECONY and required the company to purchase allowances to offset the
decreased allocation. CECONY complied with the Transport Rule in 2021 and expects to comply with the rule in
2022.
The NYSDEC issued regulations in 2019 that limit nitrous oxides (NOx) emissions during the ozone season from
May through September and affect older peaking units that are generally located downstate and needed during
42
CON EDISON ANNUAL REPORT 2021
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 and protecting employees during the COVID-19 pandemic.
On December 31, 2021, Con Edison and its subsidiaries had 13,871 employees, based entirely in the United States
including 12,325 at CECONY; 1,085 at O&R, 453 at the Clean Energy Businesses and 8 at Con Edison
Transmission. Of the total CECONY and O&R employees, 7,030 and 554 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 2025 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 6.4 percent, 42 percent of which is attributed
to retirements. The average length of service is 14.9 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, 2021, women represented 21.9 percent of the total workforce and people of color represented 49.7
percent of the workforce, with ethnicity breaking down as follows: 50.3 percent White, 20.8 percent Black, 18.4
percent Hispanic, 9.1 percent Asian and 1.4 percent other.
In managing the business, the company emphasizes 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 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 2021, employees spent over 500,000 hours in instructor-led, leadership and skill-based
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 for 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, 52 percent of the total workforce was working remotely as of December 31,
2021. 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 2021, 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 open positions.
CON EDISON ANNUAL REPORT 2021
43
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:
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. The Utilities are also subject to recurring, independent, third-party audits with respect to
these regulations and standards. In addition, the Utilities' rate plans usually include negative revenue adjustments
for failing to meet certain operating and customer satisfaction standards. 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, “Critical Accounting Estimates” 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 NY electric and gas rate plans
include revenue decoupling mechanisms and their NY 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 2021
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' successful implementation of their maintenance programs reduces, but
does not fully protect against, damage to their facilities for which they will be held responsible and which may hinder
their restoration efforts. 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, exploited vulnerabilities or other security
breaches, including loss of data and communications. Cyber threats to the electric and gas systems are increasing
in sophistication, magnitude and frequency. Interconnectivity with customers, 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. Such
interconnectivity increases the risk that a cyber incident or attack on the Companies could affect others and that a
cyber incident or attack on others could affect the Companies. 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. The Companies address vulnerabilities
as they are identified, including the Log4j vulnerability common to web applications that was announced in
December 2021. The Companies have experienced cyber incidents and attacks, 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 and enterprise platforms for operations, customer service, legal compliance,
personnel, accounting, planning and other matters. The Companies have completed a multi-year, phased transition
of certain 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. NY 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
have been used or produced in the course of the Utilities’ operations and are present on properties or in facilities
CON EDISON ANNUAL REPORT 2021
45
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:
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 shares 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 U to the financial statements in Item 8.
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.
The Companies Require Access To Capital Markets To Satisfy Funding Requirements. The Utilities estimate
that their construction expenditures will exceed $14,300 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.
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 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 significant 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 “Critical Accounting Estimates – 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.
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CON EDISON ANNUAL REPORT 2021
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 a slower
recovery of cash from outstanding customer accounts receivable balances, material increases in customer accounts
receivable balances, increases to the allowance for uncollectible accounts, and may result in increases to write-offs
of customer accounts. Although the Utilities’ NY electric and gas businesses have largely effective revenue
decoupling mechanisms in place, higher unpaid accounts have impacted and could continue to impact the
Companies’ liquidity. As a result of the COVID-19 pandemic, the Utilities have been impacted, and may continue to
be impacted by, global and U.S. supply chain disruptions causing shortages of, and increased pricing pressure on,
among other things, certain raw materials, labor, microprocessors and microchips. Such disruptions have resulted in
increased prices and lead times for certain orders of materials and equipment needed by the Utilities in their
operations. 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, the
emergence of new variants and the severity thereof, 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. An inflationary
economy could increase certain operating and capital costs and employee and retiree benefit costs in excess of the
costs reflected in the Utilities’ rate plans and could also increase the amount of capital that needs to be raised by the
Companies and the costs of such capital. Supply chain disruptions can cause shortages of materials needed by the
Companies in their business activities and can result in increased prices and lead times.
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.
CON EDISON ANNUAL REPORT 2021
47
Item 2: Properties
Con Edison
Con Edison has no significant properties other than those of the Utilities and the Clean Energy Businesses.
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” and “Environmental Matters – O&R” in
Item 1 of this report, which information is incorporated herein by reference.
Item 4: Mine Safety Disclosures
Not applicable.
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CON EDISON ANNUAL REPORT 2021
Information about our Executive Officers
The following table sets forth certain information about the executive officers of Con Edison as of February 17,
2022. 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
57
Offices and Positions During Past Five Years
1/22 to present - Chairman of the Board, President and Chief Executive Officer and Director of Con
Edison, Chairman of the Board, Chief Executive Officer and Trustee of CECONY
Robert Hoglund
Matthew Ketschke
60
50
12/20 to 12/21 – President and Chief Executive Officer and Director of Con Edison and Chief Executive
Officer and Trustee of CECONY
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
56
12/17 to present – President and Chief Executive Officer of O&R
Mark Noyes
Stuart Nachmias
Deneen L. Donnley
Frances A. Resheske
Mary E. Kelly
Lore de la Bastide
57
57
57
61
53
60
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
12/16 to present – President and Chief Executive Officer of Con Edison Clean Energy Businesses, Inc.
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
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
59
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
54
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
Gurudatta Nadkarni
56
1/08 to present – Vice President of Strategic Planning of CECONY
CON EDISON ANNUAL REPORT 2021
49
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, 2022, there were 38,756 holders of
record of Con Edison’s Common Shares. Con Edison paid quarterly dividends of 76.5 cents per Common Share in
2020 and quarterly dividends of 77.5 cents per Common Share in 2021. On January 20, 2022, Con Edison declared
a quarterly dividend of 79 cents per Common Share that is payable on March 15, 2022. 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 2021, the market price of Con Edison’s Common Shares increased by 18.1 percent (from $72.27 at year-end
2020 to $85.32 at year-end 2021). By comparison, the S&P 500 Index increased 26.9 percent and the S&P 500
Utilities Index increased 14 percent. The total return to Con Edison’s common shareholders during 2021, including
both price depreciation and investment of dividends, was 23 percent. By comparison, the total returns for the S&P
500 Index and the S&P 500 Utilities Index were 28.7 percent and 17.7 percent, respectively. For the five-year period
2017 through 2021 inclusive, Con Edison’s shareholders’ total return was 39.3 percent, compared with total returns
for the S&P 500 Index and the S&P 500 Utilities Index of 133.4 percent and 74.4 percent, respectively.
Company / Index
Consolidated Edison, Inc.
S&P 500 Index
S&P Utilities
Years Ended December 31,
2016
100.00
100.00
100.00
2017
119.30
121.83
112.11
2018
111.40
116.49
116.71
2019
136.52
153.17
147.46
2020
113.32
181.35
148.18
2021
139.34
233.41
174.36
Based on $100 invested at December 31, 2016, reinvestment of all dividends in equivalent shares of stock and market price changes on all such
shares.
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CON EDISON ANNUAL REPORT 2021
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 2020 and 2021 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: [Reserved]
CON EDISON ANNUAL REPORT 2021
51
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, the Clean Energy Businesses and Con Edison
Transmission. CECONY is a regulated utility that provides electric service in New York City and New York's
Westchester County, gas service in Manhattan, the Bronx, parts of Queens and parts of Westchester, and steam
service in Manhattan. O&R is a regulated utility serving customers in a 1,300-square-mile-area in southeastern NY
State and northern NJ. Con Edison Clean Energy Businesses, 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 Transmission, through its subsidiaries, invests in electric
transmission projects supporting Con Edison's effort to transition to clean, renewable energy and manages, through
joint ventures, both electric and gas assets while seeking to develop electric transmission projects that will bring
clean, renewable electricity to customers, focusing on NY, New England, the Mid-Atlantic states and the Midwest.
In addition to the risks and uncertainties described in Item 1A and the Companies’ material contingencies described
in Notes B, G and H to the financial statements in Item 8, the Companies’ management considers the following
events, trends, and uncertainties to be important to understanding the Companies’ current and future financial
condition.
CECONY Electric and Gas Rate Plans
In January 2022, CECONY filed a request with the NYSPSC for electric and gas rate increases of $1,199 million
and $503 million, respectively, effective January 2023. CECONY’s future earnings will depend on the rates
authorized in, and the other provisions of, its January 2023 rate plans and CECONY’s ability to operate its
businesses in a manner consistent with such rate plans. Therefore, the outcome of CECONY’s rate request, which
requires approval by the NYSPSC, will impact the Companies’ future financial condition, results of operations and
liquidity. See “Utility Regulation – State Utility Regulation – Rate Plans” in Item 1 and “Rate Plans” in Note B to the
financial statements in Item 8.
Pursuant to its current electric and gas rate plans, CECONY recorded $92 million of earnings for the year ended
December 31, 2021 of earnings adjustment mechanisms and positive incentives, primarily reflecting the
achievement of certain energy efficiency measures, as compared to $50 million, $59 million and $33 million for the
years ended December 31, 2020, 2019 and 2018, respectively. The amount of earnings or losses CECONY records
pursuant to the earnings adjustment mechanisms and positive incentives will also impact the Companies’ future
financial condition, results of operations and liquidity. See “Rate Plans” in Note B to the financial statements in Item
8.
In November 2021, the NYSPSC issued an order establishing a surcharge recovery mechanism for CECONY to
collect $43 million and $7 million for electric and gas, respectively, of late payment charges and fees that were not
billed for the year ended December 31, 2020. The company recorded such amounts as revenue for the year ended
December 31, 2021, as permitted under the accounting rules for regulated utilities, and also accrued such amounts
as a current asset at December 31, 2021. See “COVID-19 Regulatory Matters” in Note B to the financial statements
in Item 8.
Clean Energy Goals
The success of the Companies’ efforts to meet federal, state and city clean energy policy goals and the impact of
such goals on CECONY’s electric, gas and steam businesses and O&R’s electric and gas businesses may impact
the Companies’ future financial condition. The Utilities expect electric demand to increase and gas and steam usage
to decrease in their service territories as federal, state and local laws and policies are enacted and implemented. In
particular, the long-term future of the Utilities’ gas businesses depends upon the role that natural gas will play in
facilitating NY State’s and New York City’s climate goals. In addition, the impact and costs of climate change on the
Utilities’ systems and the success of the Utilities’ efforts to increase system reliability and manage service
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CON EDISON ANNUAL REPORT 2021
interruptions resulting from severe weather may impact the Companies’ future financial condition, results of
operations and liquidity.
Clean Energy Businesses
The Clean Energy Businesses develop, own and operate renewable and sustainable energy infrastructure projects.
The success of the Clean Energy Businesses’ strategy to increase earnings is dependent upon the expansion of
their renewable energy portfolio and successful execution of develop/transfer opportunities. Con Edison is
considering strategic alternatives with respect to the Clean Energy Businesses. The outcome of such evaluation
may impact Con Edison’s future financial condition, results of operations and liquidity. See “Clean Energy
Businesses” in Item 1.
Con Edison Transmission
Con Edison Transmission has taken steps to realign its portfolio to focus on electric transmission rather than gas by
completing the sale of its 50 percent interest in Stagecoach in 2021. During 2020 and 2021, Con Edison
Transmission recorded impairments on its investment in Mountain Valley Pipeline, LLC and during 2021, Con
Edison Transmission recorded impairments on its previously held interest in Stagecoach and its interest in
Honeoye. Any future impairments of Con Edison Transmission’s investments may impact Con Edison’s future
financial condition and results of operations. Con Edison Transmission is pursuing opportunities to deliver offshore
wind energy to high voltage electric grids through its participation in competitive solicitations in NY through its NY
Transco partnership and in NJ. The success of Con Edison Transmission’s efforts to be awarded projects that will
grow its electric transmission portfolio may impact Con Edison’s future capital requirements. See "Con Edison
Transmission" in Item 1 and “Investments” in Note A and Note K and Note W to the financial statements in Item 8.
COVID-19
The COVID-19 pandemic has impacted, and continues to impact, countries, communities, supply chains and
markets. As a result of the COVID-19 pandemic, there has been an economic slowdown in the Companies’ service
territories and changes in governmental and regulatory policy. The decline in business activity in the Companies’
service territories has resulted in a slower recovery of cash from outstanding customer accounts receivable
balances, material increases in customer accounts receivable balances, increases to the allowance for uncollectible
accounts, and may result in increases to write-offs and recoveries of customer accounts. The extent to which
COVID-19 will continue to impact the Companies, in particular, the Companies’ ability to recover cash from
outstanding customer accounts receivable balances and the amount of write-offs of customer accounts, may impact
Con Edison’s future financial condition, results of operations and liquidity. See “Coronavirus Disease 2019
(COVID-19) Impacts” in Item 7 and “COVID-19 Regulatory Matters” in Note B.
Also, 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 P 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, 2021
At December 31, 2021
Operating
Revenues
Net Income for
Common Stock
Assets
$11,716
941
12,657
1,022
4
(7)
86%
7%
93%
7%
—%
—%
$1,344
75
1,419
266
(316)
(23)
$13,676
100%
$1,346
100%
6%
106%
19 %
(23) %
(2) %
100%
$52,655
3,292
55,947
6,554
249
366
83%
5%
88%
10%
1%
1%
$63,116
100%
(a) Net income for common stock from the Clean Energy Businesses for the year ended December 31, 2021 reflects $107 million (after-tax) of
the effects of HLBV accounting for tax equity investments in certain renewable and sustainable electric projects and $40 million of net after-
tax mark-to-market effects. Net income for common stock from the Clean Energy Businesses for the year ended December 31, 2021
includes $(3) million (after-tax) of loss from the sale of a renewable electric project. See Note S to the financial statements in Item 8.
(b) Net loss for common stock from Con Edison Transmission for the year ended December 31, 2021 includes $(153) million of a net after-tax
impairment loss related to its investment in Stagecoach, $(168) million of a net after-tax impairment loss related to its investment in
Mountain Valley Pipeline, LLC and $(5) million of goodwill impairment loss on its investment in Honeoye. See "Critical Accounting Estimates
- Investments" in Item 7, "Investments - Partial Impairment of Investment in Stagecoach Gas Services LLC (Stagecoach)" and
"Investments - 2020 and 2021 Partial Impairments of Investment in Mountain Valley Pipeline, LLC (MVP)" in Note A, Note K and Note W to
the financial statements in Item 8.
(c) Other includes parent company and consolidation adjustments. Net income for common stock for the year ended December 31, 2021
includes $(9) million (after-tax) of income tax impact on the effects of HLBV accounting for tax equity investments in certain renewable and
sustainable projects and $(3) million of income tax impact on the net after-tax mark-to-market effects. Net income for common stock for the
year ended December 31, 2021 includes $6 million of income tax impact for the impairment loss related to Con Edison's investment in
CON EDISON ANNUAL REPORT 2021
53
Stagecoach. Net income for common stock for the year ended December 31, 2021 includes $6 million of income tax impact for the
impairment loss related to Con Edison's 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 regular cleaning and disinfecting of all work and common areas,
promoting social distancing, allowing employees to work remotely and directing employees to stay at home if they
are experiencing COVID or flu-like symptoms. 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.
In October 2021, in response to President Biden's Executive Order 14042, the Companies announced that they are
committed to complying with the mandate for employees of federal contractors and subcontractors to be fully
vaccinated against COVID-19 by the federally-required deadline, unless employees are legally entitled to an
accommodation. In December 2021, an injunction was issued in the United States District Court for the Southern
District of Georgia which currently prevents the U.S. government from enforcing this federal contractor vaccine
mandate nationwide. The U.S. Supreme Court is expected to hear oral arguments in April 2022.
In December 2021, New York City instituted a vaccination mandate that requires employees of private businesses
located in New York City who perform in-person work or interact with the public to be vaccinated against COVID-19.
In furtherance of the mandate, in December 2021, the New York City Commissioner of Health and Mental Hygiene
issued an order that requires workers entering workplaces within New York City to provide proof of COVID-19
vaccination, except in cases of a medical or religious exemption. This order is applicable to the Companies’
employees and contractors who report in-person to a company workplace located in New York City and the
Companies are complying with its requirements.
The Companies are continuing to monitor the vaccination mandates closely and are implementing appropriate
measures to mitigate any workforce and cost impacts that may occur.
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.
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 a 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. For 2021, the limitation on
interest expense for computing ATI reverted back to 30 percent.
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.
54
CON EDISON ANNUAL REPORT 2021
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 paid half of this liability by December 31, 2021 and
will repay 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. In March 2021, the American Rescue Plan Act was signed into law that expanded the
2021 Appropriations Act to extend the period for eligible employers to receive the employer retention credit from
June 30, 2021 to December 31, 2021. In November 2021, the Infrastructure and Investment and Jobs Act was
signed into law and accelerated the end of the employee retention tax credit retroactive to October 1, 2021, rather
than December 31, 2021. This effectively reduced the maximum credit available from $28,000 to $21,000 per
employee.
For the year ended December 31, 2021, Con Edison and CECONY recognized a tax benefit to Taxes, other than
income taxes of $9 million and $4 million, respectively.
Accounting Considerations
Due to the COVID-19 pandemic and subsequent New York State on PAUSE and related executive orders (that have
since been lifted), decline in business, bankruptcies, layoffs and furloughs, among other factors, both commercial
and residential customers have had and may continue to have increased difficulty paying their utility bills. In June
2020, the state of NY enacted a law prohibiting NY utilities, including CECONY and O&R, from disconnecting
residential customers, and starting in May 2021 small business customers, during the COVID-19 state of
emergency, which ended in June 2021. In addition, such prohibitions applied for an additional 180 days after the
state of emergency ended (December 21, 2021) for residential and small business customers who experienced a
change in financial circumstances due to the COVID-19 pandemic. CECONY and O&R have existing allowances for
uncollectible accounts established against their customer accounts receivable balances that are reevaluated each
quarter and updated accordingly. Changes to the Utilities’ reserve balances that result in write-offs of customer
accounts receivable balances are not reflected in rates during the term of the current rate plans. During 2021, 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 $138 million
and $8.7 million at December 31, 2020 to $304 million and $12.3 million at December 31, 2021, respectively. See
"COVID-19 Regulatory Matters" in Note B and Note N 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 and 2021. See Note K to the financial
statements in Item 8.
New York State Legislation
In April 2021, New York State passed a law that increases the corporate franchise tax rate on business income from
6.5% to 7.25%, retroactive to January 1, 2021, for taxpayers with taxable income greater than $5 million. The law
also reinstates the business capital tax at 0.1875%, not to exceed a maximum tax liability of $5 million per taxpayer.
NY State requires a corporate franchise taxpayer to calculate and pay the highest amount of tax under the three
alternative methods: a tax on business income; a tax on business capital; or a fixed dollar minimum. The provisions
to increase the corporate franchise tax rate and reinstate a capital tax are scheduled to expire after 2023 and are
not expected to have a material impact on the Companies’ financial position, results of operations or liquidity. In
addition, the new law created a program that allows eligible residential renters in NY State who require assistance
with rent and utility bills to have up to twelve months of electric and gas utility bill arrears forgiven, provided that
such arrears were accrued on or after March 13, 2020. The program will be administered by the State Office of
Temporary and Disability Assistance in coordination with the New York State Department of Public Service and the
NYSPSC. Under the program, CECONY and O&R would qualify for a refundable tax credit for NY State gross-
receipts tax equal to the amount of arrears waived by the Utilities in the year that the arrears are waived and
certified by the NYSPSC. See "COVID-19 Regulatory Matters” in Note B to the financial statements in Item 8.
CON EDISON ANNUAL REPORT 2021
55
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
in Item 8. However, a continued economic downturn as a result of the COVID-19 pandemic has increased the
amount of capital needed by the Utilities and could impact the costs of such capital.
The decline in business activity in the Utilities’ service territory as a result of the COVID-19 pandemic and
subsequent New York State on PAUSE and related executive orders (that have since been lifted), resulted in a
slower recovery in cash of outstanding customer accounts receivable balances in 2020 and 2021.
The Utilities’ rate plans have revenue decoupling mechanisms in their NY electric and gas businesses that largely
reconcile actual energy delivery revenues to the authorized delivery revenues approved by the NYSPSC per month
and reconcile the deferred balances semi-annually under CECONY's electric rate plan (January through June and
July through December, respectively) and annually under CECONY's gas rate plan and O&R NY's electric and gas
rate plans (January through December). Differences are accrued with interest each month for CECONY's and O&R
NY’s electric customers and after the annual deferral period ends for CECONY's and O&R NY’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 NY's electric and gas
customers. Although these revenue decoupling mechanisms are in place, lower billed sales revenues and higher
unpaid accounts have reduced and are expected to continue to reduce liquidity at the Utilities.
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. In November 2021, the
NYSPSC issued an order establishing a surcharge recovery mechanism for CECONY to collect, commencing
December 1, 2021 through December 31, 2022, $43 million and $7 million for electric and gas, respectively, of late
payment charges and fees that were not billed for the year ended December 31, 2020. The company recorded such
amounts as revenue for the year ended December 31, 2021, as permitted under the accounting rules for regulated
utilities, and also accrued such amounts as a current asset at December 31, 2021. Pursuant to the November 2021
order, the company also established a recovery mechanism for CECONY to collect, commencing January 2023
through December 2023, $19 million and $4 million for electric and gas, respectively, of late payment charges and
fees that were not billed for the year ended December 31, 2021 and the company recorded such amounts as
revenue for the year ended December 31, 2021, as permitted under the accounting rules for regulated utilities, and
also accrued such amounts as a current asset at December 31, 2021. In addition, pursuant to the November 2021
order, CECONY established a reserve of $7 million toward addressing customer arrearages for the year ended
December 31, 2021. The order also established a surcharge recovery or surcredit mechanism for any late payment
charges and fee deferrals, subject to offsetting related savings resulting from the COVID-19 pandemic, for 2022
starting in January of 2024 over a twelve-month period.
In October 2021, O&R, the New York State Department of Public Service (NYSDPS) and other parties entered into
a Joint Proposal for new electric and gas rate plans for the three-year period January 2022 through December 2024
(the Joint Proposal) that includes certain COVID-19 provisions, such as: recovery of 2020 late payment charges
over three years; reconciliation of late payment charges to amounts reflected in rates for years 2021 through 2024;
and reconciliation of write-offs of customer accounts receivable balances to amounts reflected in rates from January
1, 2020 through December 31, 2024. The Joint Proposal is subject to NYSPSC approval. CECONY resumed late
payment charges for commercial and residential customers who have not experienced a change in financial
circumstances due to the COVID-19 pandemic on September 3, 2021 and October 1, 2021, respectively. O&R
resumed late payment charges for commercial and residential customers who have not experienced a change in
financial circumstances due to the COVID-19 pandemic on October 1, 2021.
Con Edison and the Utilities 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. In February 2022, CECONY filed a request with FERC to increase
its authorization to issue short-term debt from $2,250 million to $3,000 million.
56
CON EDISON ANNUAL REPORT 2021
Results of Operations
Net income for common stock and earnings per share for the years ended December 31, 2021, 2020 and 2019
were as follows:
(Millions of Dollars,
except per share amounts)
CECONY
O&R
Clean Energy Businesses (a)
Con Edison Transmission (b)
Other (c)
Con Edison (d)
Net Income for
Common Stock
Earnings per Share
2021
$1,344
75
266
(316)
(23)
$1,346
2020
$1,185
71
24
(175)
(4)
$1,101
2019
$1,250
70
(18)
52
(11)
$1,343
2021
$3.86
0.22
0.76
(0.91)
(0.07)
$3.86
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
(a) Net income for common stock and earnings per share from the Clean Energy Businesses for the year ended December 31, 2021, 2020 and
2019 reflects $107 million or $0.31 a share (after-tax), $(32) million or $(0.10) a share (after-tax) and $(74) million or $(0.22) a share (after-
tax) of the effects of HLBV accounting for tax equity investments in certain renewable and sustainable electric projects. Net income for
common stock and earnings per share from the Clean Energy Businesses also includes $40 million or $0.11 a share, $(43) million or $(0.13)
a share and $(21) million or $(0.07) a share of net after-tax mark-to-market effects in 2021, 2020 and 2019, respectively. Net income for
common stock and earnings per share from the Clean Energy Businesses for the year ended December 31, 2021 includes $(3) million
(after-tax) or $(0.01) a share (after-tax) for the loss from the sale of a renewable electric project. See Note S to the financial statements in
Item 8.
(b) Net loss for common stock and earnings per share from Con Edison Transmission for the year ended December 31, 2021 includes $(153)
million or $(0.44) a share of net after-tax impairment loss related to its investment in Stagecoach, $(168) million or $(0.48) a share of net
after-tax impairment loss related to its investment in Mountain Valley Pipeline, LLC and $(5) million or $(0.02) a share of loss related to a
goodwill impairment loss related to its investment in Honeoye. See "Critical Accounting Estimates - Investments" in Item 7, “Investments -
Partial Impairment of Investment in Stagecoach Gas Services LLC (Stagecoach)” and "Investments - 2020 and 2021 Partial Impairments of
Investment in Mountain Valley Pipeline, LLC (MVP)" in Note A, Note K and Note W to the financial statements in Item 8. Net income for
common stock and earnings per share 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 "Critical Accounting
Estimates - Investments" in Item 7 and “Investments - Partial Impairment of Investment in Mountain Valley Pipeline, LLC (MVP)” in Note A to
the financial statements in Item 8.
(c) Other includes parent company and consolidation adjustments. Net income for common stock and earnings per share for the year ended
December 31, 2021 includes $(9) million (after-tax) or $(0.02) a share (after-tax) of income tax impact on the effects of HLBV accounting for
tax equity investments in certain renewable and sustainable electric projects and $(3) million or $(0.01) a share of income tax impact on the
net after-tax mark-to-market effects. Net income for common stock and earnings per share for the year ended December 31, 2021 includes
$6 million or $0.02 a share of income tax impact for the impairment loss related to Con Edison Transmission’s investment in Stagecoach.
Net income for common stock and earnings per share for the year ended December 31, 2021 includes $6 million or $0.01 a share of income
tax impact for the impairment loss related to Con Edison Transmission’s investment in Mountain Valley Pipeline, LLC. See “Investments -
Partial Impairment of Investment in Stagecoach Gas Services LLC (Stagecoach)” and "Investments - 2020 and 2021 Partial Impairments of
Investment in Mountain Valley Pipeline, LLC (MVP)" in Note A to the financial statements in Item 8.
Net income for common stock and earnings per share for the year ended December 31, 2020 includes $3 million or $0.01 a share (after-
tax), respectively, of income tax impact on the effects of HLBV accounting for tax equity investments in certain renewable and sustainable
electric projects. Net income for common stock and earnings per share from the Clean Energy Businesses for the year ended December 31,
2020 includes $4 million or $0.01 a share of income tax impact on the net after-tax mark-to-market effects. Net income for common stock
and earnings per share for the year ended December 31, 2020 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 - 2020 and 2021 Partial
Impairments of Investment in Mountain Valley Pipeline, LLC (MVP)” in Note A to the financial statements in Item 8.
Net income for common stock and earnings per share for the year ended December 31, 2019 includes $6 million or $0.02 a share (after-
tax), respectively, of income tax impact on the effects of HLBV accounting for tax equity investments in certain renewable and sustainable
electric projects. Net income for common stock and earnings per share from the Clean Energy Businesses for the year ended December 31,
2019 includes $2 million or $0.00 of income tax impact on the net after-tax mark-to-market effects.
(d) Earnings per share on a diluted basis were $3.85 a share, $3.28 a share and $4.08 a share in 2021, 2020 and 2019, respectively. See
"Earnings Per Common Share" in Note A to the financial statements in Item 8.
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, 2021 as compared with 2020, and 2020 as compared with 2019.
CON EDISON ANNUAL REPORT 2021
57
Variation for the Year Ended December 31, 2021 vs. 2020
CECONY (a)
Recognition of late payment charges for the year ended 2020 that are being recovered
through a surcharge mechanism established by the New York Public Service Commission in
its November 2021 order
Recognition of late payment charges for the year ended 2021 that are being recovered
through a surcharge mechanism established by the New York Public Service Commission in
its November 2021 order, and resuming the billing of late payment charges and no access
fees
Higher electric rate base
Higher gas rate base
Higher incentives earned under the electric and gas earnings adjustment mechanisms (EAMs)
and positive incentives
Weather impact on steam revenues
Higher costs related to heat, storm and emergency response
Higher healthcare costs
Higher stock-based compensation costs
Dilutive effect of stock issuances
Other
Total CECONY
O&R (a)
Electric base rate increase
Higher storm-related costs
Total O&R
Clean Energy Businesses
Higher revenues
HLBV effects
Net mark-to-market effects
Higher operations and maintenance expenses
Loss from sale of a renewable electric project
Dilutive effect of stock issuances
Other
Total Clean Energy Businesses
Con Edison Transmission
Impairment loss related to investment in Mountain Valley Pipeline, LLC
Impairment losses related to investment in Stagecoach
Foregoing Allowance for Funds Used During Construction income starting in January 2021
until significant construction resumes on the Mountain Valley Pipeline
Impairment loss related to investment in Honeoye
Other
Total Con Edison Transmission
Other, including parent company expenses
Impairment tax benefits related to investment in Mountain Valley Pipeline, LLC
Tax impact of HLBV effects
Tax impact of net mark-to-market effects
Lower consolidated state income tax benefit
Impairment tax benefits related to investment in Stagecoach
Other
Total Other, including parent company expenses
Total Reported (GAAP basis)
Net Income
for Common
Stock
(Millions of
Dollars)
Earnings per
Share
$32
$0.09
41
64
38
30
16
(37)
(16)
(11)
—
2
159
9
(5)
4
209
139
83
(180)
(3)
—
(6)
242
64
(153)
(44)
(5)
(3)
(141)
(3)
(9)
(3)
(9)
6
(1)
(19)
$245
0.13
0.19
0.11
0.09
0.05
(0.11)
(0.05)
(0.03)
(0.15)
—
0.32
0.03
(0.02)
0.01
0.62
0.41
0.24
(0.54)
(0.01)
(0.03)
—
0.69
0.21
(0.44)
(0.13)
(0.02)
(0.01)
(0.39)
(0.02)
(0.02)
(0.01)
(0.03)
0.02
—
(0.06)
$0.57
a. Under the revenue decoupling mechanisms in the Utilities’ NY electric and gas rate plans and the weather-normalization clause
applicable to their gas businesses, revenues are generally not affected by changes in delivery volumes from levels assumed when
rates were approved. In general, the Utilities recover on a current basis the fuel, gas purchased for resale and purchased power costs
they incur in supplying energy to their full-service customers. Accordingly, such costs do not generally affect Con Edison’s results of
operations.
58
CON EDISON ANNUAL REPORT 2021
Variation for the Year Ended December 31, 2020 vs. 2019
Net Income
for Common
Stock
(Millions of
Dollars)
Earnings per
Share
CECONY (a)
Lower net O&M costs for pension and other postretirement benefits resulting from the
reconciliation mechanism under the rate plans
Lower regulatory assessments and fees that are collected in revenues from customers
Higher gas net base revenues due to the base rate increase in January 2020 under the
company's gas rate plan
Higher depreciation and amortization expense, which is reflected in the cost of service under
the rate plans
Higher property taxes, which is reflected in the cost of service and reconciled under the rate
plans
Foregone revenues from the suspension of customers' late payment charges and certain other
fees associated with the COVID-19 pandemic
Weather impact on steam revenues
Lower steam net revenues due to the impact of the Coronavirus Disease 2019 (COVID-19)
pandemic
Incremental costs associated with the COVID-19 pandemic
Food and medicine spoilage claims related to electric outages caused by Tropical Storm Isaias
Dilutive effect of stock issuances
Other
Total CECONY
O&R (a)
Electric base rate increase
Gas base rate increase
Higher depreciation and amortization expense and higher property taxes, offset in part, by the
employee retention tax credit under the CARES Act
Higher costs associated with components of pension and other postretirement benefits other
than service cost
Food and medicine spoilage claims related to electric outages caused by Tropical Storm Isaias
Total O&R
Clean Energy Businesses
HLBV effects
Higher revenues from renewable electric projects, offset in part by lower energy services
revenues due to timing of executed contracts
Higher net interest expense due to higher unrealized losses on interest rate swaps in the 2020
period
Higher operations and maintenance expenses
Higher depreciation and amortization due to an increase in renewable electric projects in
operation during 2020
Absence of a prior period adjustment related to research and development credits recorded in
2019
Total Clean Energy Businesses
Con Edison Transmission
Impairment loss related to the investment in Mountain Valley Pipeline, LLC
Other
Total Con Edison Transmission
Other, including parent company expenses
Impairment loss related to the investment in Mountain Valley Pipeline, LLC
Other
Total Other, including parent company expenses
Total Reported (GAAP basis)
$175
99
67
(166)
(118)
(45)
(32)
(14)
(10)
(6)
—
(15)
(65)
12
2
(8)
(4)
(1)
1
42
16
(8)
(3)
(3)
(2)
42
(232)
5
(227)
9
(2)
7
($242)
$0.53
0.30
0.20
(0.51)
(0.37)
(0.14)
(0.10)
(0.04)
(0.03)
(0.02)
(0.07)
(0.01)
(0.26)
0.04
0.01
(0.03)
(0.02)
—
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0.12
0.06
(0.02)
(0.01)
(0.01)
(0.01)
0.13
(0.69)
0.01
(0.68)
0.03
(0.02)
0.01
$(0.80)
a. Under the revenue decoupling mechanisms in the Utilities’ NY electric and gas rate plans and the weather-normalization clause applicable
to their gas businesses, revenues are generally not affected by changes in delivery volumes from levels assumed when rates were
approved. In general, the Utilities recover on a current basis the fuel, gas purchased for resale and purchased power costs they incur in
supplying energy to their full-service customers. Accordingly, such costs do not generally affect Con Edison’s results of operations.
CON EDISON ANNUAL REPORT 2021
59
The Companies’ other operations and maintenance expenses for the years ended December 31, 2021, 2020 and
2019 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)
2021
2020
2019
$1,691
(42)
173
332
298
2,452
313
475
19
(5)
$1,606
(103)
151
330
285
2,269
310
228
11
(4)
$1,563
134
170
464
304
2,635
308
223
9
—
Total other operations and maintenance expenses
$3,254
$2,814
$3,175
(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, 2021, 2020 and 2019 follows. For additional business segment financial
information, see Note P to the financial statements in Item 8.
60
CON EDISON ANNUAL REPORT 2021
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CON EDISON ANNUAL REPORT 2021
61
Year Ended December 31, 2021 Compared with Year Ended December 31, 2020
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, 2021
For the Year Ended
December 31, 2020
Electric
Gas
Steam
2021
Total Electric
Gas
Steam
2020
Total
2021-2020
Variation
$8,806
$2,378
$532
$11,716
$8,103
$2,036
$508
$10,647
$1,069
1,588
156
—
1,919
1,286
2,055
—
—
541
368
326
497
$1,802
$646
45
73
—
165
93
144
$12
1,633
1,405
229
541
2,452
1,705
2,696
75
—
1,753
1,214
1,925
—
—
426
355
294
387
$2,460
$1,731
$574
27
81
—
161
90
144
$5
1,432
156
426
2,269
1,598
2,456
201
73
115
183
107
240
$2,310
$150
Electric
CECONY’s results of electric operations for the year ended December 31, 2021 compared with the year ended
December 31, 2020 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,
2021
$8,806
1,588
156
1,919
1,286
2,055
2020
$8,103
1,405
75
1,753
1,214
1,925
$1,802
$1,731
Variation
$703
183
81
166
72
130
$71
CECONY’s electric sales and deliveries in 2021 compared with 2020 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, 2021
December
31, 2020 Variation
$11,344
$11,107
9,250
21,549
9,185
—
9,280
22,000
9,184
—
237
(30)
(451)
1
—
Percent
Variation
2.1%
(0.3)
(2.1)
—
—
December
31, 2021
December
31, 2020 Variation
Percent
Variation
$3,100
2,174
2,613
708
211
$2,901
1,876
2,391
665
270
$199
298
222
43
(59)
$703
6.9%
15.9
9.3
6.5
(21.9)
8.7%
$51,328
$51,571
(243)
(0.5) % (d)
$8,806
$8,103
(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 0.2
percent in 2021 compared with 2020. See “Coronavirus Disease 2019 (COVID-19) Impacts,” above.
Operating revenues increased $703 million in 2021 compared with 2020 primarily due to higher revenues from the
electric rate plan ($243 million), higher purchased power expenses ($183 million), higher fuel expenses ($81
million), higher late payment charges ($90 million), including charges that are being recovered pursuant to a
surcharge mechanism established as a result of the order issued by the NYSPSC in November 2021 and resuming
billing of late payment charges, and higher incentives earned under the earnings adjustment mechanisms and
positive incentives ($30 million). See "COVID-19 Regulatory Matters" in Note B to the financial statements in Item 8.
62
CON EDISON ANNUAL REPORT 2021
Purchased power expenses increased $183 million in 2021 compared with 2020 due to higher unit costs ($112
million) and purchased volumes ($72 million).
Fuel expenses increased $81 million in 2021 compared with 2020 due to higher unit costs ($79 million) and higher
purchased volumes from the company’s electric generating facilities ($3 million).
Other operations and maintenance expenses increased $166 million in 2021 compared with 2020 primarily due to
higher costs for pension and other postretirement benefits ($47 million), higher costs related to heat, storm and
emergency response ($50 million), higher stock-based compensation ($24 million), higher healthcare costs ($16
million) and higher municipal infrastructure support costs ($12 million).
Depreciation and amortization increased $72 million in 2021 compared with 2020 primarily due to higher electric
utility plant balances.
Taxes, other than income taxes increased $130 million in 2021 compared with 2020 primarily due to lower deferral
of under-collected property taxes ($53 million), higher property taxes ($52 million) and higher state and local taxes
($23 million).
CECONY’s results of gas operations for the year ended December 31, 2021 compared with the year ended
December 31, 2020 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,
2021
$2,378
541
368
326
497
$646
2020
$2,036
426
355
294
387
$574
Variation
$342
115
13
32
110
$72
CECONY’s gas sales and deliveries, excluding off-system sales, in 2021 compared with 2020 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, 2021
December
31, 2020 Variation
Percent
Variation
December
31, 2021
December
31, 2020 Variation
Percent
Variation
50,690
48,999
1,691
3.5 %
$1,050
30,947
29,516
1,431
76,765
76,614
151
4.8
0.2
423
704
$911
318
649
158,402
155,129
3,273
2.1
(b)
2,177
1,878
5,927
8,482
(2,555)
(30.1)
43,094
41,577
1,517
47,620
49,723
(2,103)
20,251
20,814
(563)
3.6
(4.2)
(2.7)
—
29
2
25
34
111
27
2
22
33
74
$139
15.3 %
105
55
299
2
—
3
1
37
33.0
8.5
15.9
7.4
—
13.6
3.0
50.0
Other operating revenues (d)
—
—
—
Total
275,294
275,725
(431)
(0.2) %
$2,378
$2,036
$342
16.8 %
(a) Revenues from gas sales are subject to a weather normalization clause and a revenue decoupling mechanism, as a result of which,
delivery revenues are generally not affected by changes in delivery volumes from levels assumed when rates were approved.
(b) After adjusting for variations, primarily billing days, firm gas sales and transportation volumes in the company’s service area decreased 0.4
(c)
percent in 2021 compared with 2020. See “Coronavirus Disease 2019 (COVID-19) Impacts,” above.
Includes 1,921 thousands and 3,510 thousands of Dt for 2021 and 2020, 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.
Operating revenues increased $342 million in 2021 compared with 2020 primarily due to higher gas revenues
under the company's gas rate plan ($200 million), higher gas purchased for resale expense ($115 million), higher
CON EDISON ANNUAL REPORT 2021
63
late payment charges ($16 million), including charges that are being recovered pursuant to a surcharge mechanism
established as a result of the order issued by the NYSPSC in November 2021 and resuming billing of late payment
charges, and higher incentives earned under gas adjustment mechanisms (EAMs) ($11 million). See "COVID-19
Regulatory Matters" in Note B to the financial statements in Item 8.
Gas purchased for resale increased $115 million in 2021 compared with 2020 due to higher unit costs ($106 million)
and higher purchased volumes ($8 million).
Other operations and maintenance expenses increased $13 million in 2021 compared with 2020 primarily due to
higher costs for pension and other postretirement benefits ($10 million), higher total surcharges for assessments
and fees that are collected in revenues from customers ($7 million) and higher stock-based compensation ($5
million), offset in part by lower municipal infrastructure support costs ($9 million).
Depreciation and amortization increased $32 million in 2021 compared with 2020 primarily due to higher gas utility
plant balances.
Taxes, other than income taxes increased $110 million in 2021 compared with 2020 primarily due to lower deferral
of under-collected property taxes ($68 million), higher property taxes ($30 million) and higher state and local taxes
($12 million).
Steam
CECONY’s results of steam operations for the year ended December 31, 2021 compared with the year ended
December 31, 2020 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 2021 compared with 2020 were:
For the Years Ended December 31,
2021
$532
45
73
165
93
144
$12
2020
$508
27
81
161
90
144
$5
Variation
$24
18
(8)
4
3
—
$7
Description
General
Apartment house
Annual power
Other operating revenues (a)
—
—
Total
16,884
16,553
Millions of Pounds Delivered
Revenues in Millions
For the Years Ended
For the Years Ended
December
31, 2021
December
31, 2020 Variation
Percent
Variation
December
31, 2021
December
31, 2020 Variation
Percent
Variation
504
5,013
445
5,131
11,367
10,977
59
(118)
390
—
331
13.3 %
$
25 $
(2.3)
3.6
—
2.0 % (b)
137
340
30
$532
23
136
321
28
$2
1
19
2
8.7 %
0.7
5.9
7.1
$508
$24
4.7 %
(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 3.4
percent in 2021 compared with 2020. See “Coronavirus Disease 2019 (COVID-19) Impacts,” above.
Operating revenues increased $24 million in 2021 compared with 2020 primarily due to the impact of colder winter
weather ($21 million) and higher purchased power expenses ($18 million), offset in part by lower fuel expenses ($8
million) and tax law surcharge ($3 million).
Purchased power expenses increased $18 million in 2021 compared with 2020 due to higher unit costs ($13 million)
and purchased volumes ($5 million).
Fuel expenses decreased $8 million in 2021 compared with 2020 due to lower unit costs ($11 million), offset in part
by higher purchased volumes from the company’s steam generating facilities ($3 million).
64
CON EDISON ANNUAL REPORT 2021
Other operations and maintenance expenses increased $4 million in 2021 compared with 2020 primarily due to
higher costs for pension and other postretirement benefits ($4 million) and higher stock-based compensation ($2
million), offset in part by lower municipal infrastructure support costs ($1 million).
Depreciation and amortization increased $3 million in 2021 compared with 2020 primarily due to higher steam utility
plant balances.
Taxes, Other Than Income Taxes
At $2,696 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,
2021
$2,215
373
65
43
2020
$2,129
338
64
(75)
$2,696 (a)
$2,456 (a)
Variation
$86
35
1
118
$240
(a)
Including sales tax on customers’ bills, total taxes other than income taxes in 2021 and 2020 were $3,296 million and $2,989 million,
respectively.
Other Income (Deductions)
Other deductions decreased $63 million in 2021 compared with 2020 primarily due to lower costs associated with
components of pension and other postretirement benefits other than service cost ($61 million).
Net Interest Expense
Net interest expense increased $23 million in 2021 compared with 2020 primarily due to higher interest on long-term
debt ($42 million), offset in part by lower interest accrued on the system benefit charge liability ($7 million), lower
interest expense for short-term debt ($4 million), lower interest on deposits ($3 million) and lower interest accrued
on deferred storm costs ($2 million).
Income Tax Expense
Income taxes increased $31 million in 2021 compared with 2020 primarily due to higher income before income tax
expense ($40 million) and higher state income taxes ($9 million), offset in part by a higher favorable tax adjustment
in 2021 for the prior year tax return primarily due to an increase in the general business tax credit ($6 million),
higher tax benefits in 2021 from research credits ($5 million) and the absence of the amortization of deficit deferred
state income taxes in 2020 ($6 million).
CON EDISON ANNUAL REPORT 2021
65
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, 2021
For the Year Ended
December 31, 2020
Electric
$681
206
—
249
69
57
Gas
$260
—
88
64
26
32
2021
Total
$941
206
88
313
95
89
$100
$50
$150
Electric
$629
169
—
242
65
54
$99
Gas
$233
—
61
68
25
31
$862
169
61
310
90
85
$48
$147
2020
Total
2021-2020
Variation
$79
37
27
3
5
4
$3
Electric
O&R’s results of electric operations for the year ended December 31, 2021 compared with the year ended
December 31, 2020 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,
2021
$681
206
249
69
57
$100
2020
$629
169
242
65
54
$99
Variation
$52
37
7
4
3
$1
O&R’s electric sales and deliveries in 2021 compared with 2020 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, 2021
December
31, 2020 Variation
1,742
1,786
850
820
2,839
2,621
110
—
107
—
(44)
30
218
3
—
Percent
Variation
(2.5%)
3.7
8.3
2.8
—
December
31, 2021
December
31, 2020 Variation
Percent
Variation
$331
111
223
11
5
$318
117
186
7
1
$13
(6)
37
4
4
4.1%
(5.1)
19.9
57.1
Large
8.3 %
5,541
5,334
207
3.9 % (d)
$681
$629
$52
(a) Revenues from NY 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 NJ 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 NY 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 increased 1.1 percent in 2021
compared with 2020. See “Coronavirus Disease 2019 (COVID-19) Impacts,” above.
Operating revenues increased $52 million in 2021 compared with 2020 primarily due to higher purchased power
expenses ($37 million) and higher revenues from the NY electric rate plan ($13 million).
Purchased power expenses increased $37 million in 2021 compared with 2020 due to higher unit costs ($35 million)
and purchased volumes ($2 million).
66
CON EDISON ANNUAL REPORT 2021
Other operations and maintenance expenses increased $7 million in 2021 compared with 2020 primarily due to
higher storm-related costs.
Depreciation and amortization increased $4 million in 2021 compared with 2020 primarily due to higher electric
utility plant balances.
Taxes, other than income taxes increased $3 million in 2021 compared with 2020 primarily due to higher property
taxes ($2 million).
Gas
O&R’s results of gas operations for the year ended December 31, 2021 compared with the year ended
December 31, 2020 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,
2021
$260
88
64
26
32
$50
2020
$233
61
68
25
31
$48
Variation
$27
27
(4)
1
1
$2
O&R’s gas sales and deliveries, excluding off-system sales, in 2021 compared with 2020 were:
Description
Residential
General
Firm transportation
Total firm sales and
transportation
Interruptible sales
Generation plants
Other
Other gas revenues
Total
Thousands of Dt Delivered
Revenues in Millions (a)
For the Years Ended
For the Years Ended
December
31, 2021
December
31, 2020
Variation
Percent
Variation
December
31, 2021
December
31, 2020
Variation
11,500
2,498
7,584
9,736
2,142
8,271
356
(687)
1,764
18.1 %
21,582
20,149
1,433
3,820
3,632
26
468
—
59
658
—
188
(33)
(190)
—
25,896
24,498
1,398
$162
28
55
(b)
245
6
—
1
8
$260
121
20
62
203
6
—
1
23
233
$41
8
(7)
42
—
—
—
(15)
$27
16.6
(8.3)
7.1
5.2
(55.9)
(28.9)
—
5.7 %
Percent
Variation
33.9 %
40.0
(11.3)
20.7
—
—
—
(65.2)
11.6 %
(a) Revenues from NY gas sales are subject to a weather normalization clause and a revenue decoupling mechanism, as a result of which,
delivery revenues are generally not affected by changes in delivery volumes from levels assumed when rates were approved.
(b) After adjusting for weather and other variations, firm sales and transportation volumes in the company’s service area increased 0.2 percent
in 2021 compared with 2020. See “Coronavirus Disease 2019 (COVID-19) Impacts,” above.
Operating revenues increased $27 million in 2021 compared with 2020 primarily due to higher gas purchased for
resale expense.
Gas purchased for resale increased $27 million in 2021 compared with 2020 due to higher unit costs ($15 million)
and purchased volumes ($12 million).
Other operations and maintenance expenses decreased $4 million in 2021 compared with 2020 primarily due to
lower pension costs ($2 million) and lower spending on gas programs ($2 million).
Depreciation and amortization increased $1 million in 2021 compared with 2020 primarily due to higher gas utility
plant balances.
Taxes, other than income taxes increased $1 million in 2021 compared with 2020 primarily due to higher property
taxes.
CON EDISON ANNUAL REPORT 2021
67
Taxes, Other Than Income Taxes
Taxes, other than income taxes, increased $4 million in 2021 compared with 2020. 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,
2021
$71
11
7
2020
$69
10
6
$89 (a)
$85 (a)
Variation
$2
1
1
$4
(a)
Including sales tax on customers’ bills, total taxes other than income taxes in 2021 and 2020 were $129 million and $121 million,
respectively.
Income Tax Expense
Income taxes remained unchanged in 2021 compared with 2020 primarily due to higher income before income tax
expense ($1 million) entirely offset by lower state income taxes, primarily due to a decrease in the amortization of
New York’s metropolitan transportation business tax surcharge in 2021 ($1 million).
Clean Energy Businesses
The Clean Energy Businesses’ results of operations for the year ended December 31, 2021 compared with the year
ended December 31, 2020 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,
2021
$1,022
62
475
231
18
$236
2020
$736
41
228
231
21
$215
Variation
$286
21
247
—
(3)
$21
Operating revenues increased $286 million in 2021 compared with 2020 primarily due to higher revenue from
renewable electric projects ($211 million), higher wholesale revenues ($35 million) and higher energy services
revenues ($47 million), offset in part by lower net mark-to-market values ($7 million).
Gas purchased for resale increased $21 million in 2021 compared with 2020 primarily due to higher purchased
volumes.
Other operations and maintenance expenses increased $247 million in 2021 compared with 2020 primarily due to
higher costs from engineering, procurement and construction of renewable electric projects for customers.
Other Income (Deductions)
Other income (deductions) decreased $14 million in 2021 compared with 2020 primarily due to lower income in the
2021 period from an equity method investment in renewable electric projects accounted for under the HLBV method
of accounting.
Net Interest Expense
Net interest expense decreased $128 million in 2021 compared with 2020 primarily due to lower unrealized losses
on interest rate swaps in the 2021 period.
68
CON EDISON ANNUAL REPORT 2021
Income Tax Expense
Income taxes increased $88 million in 2021 compared with 2020 primarily due to higher income before income tax
expense ($30 million), lower income attributable to non-controlling interest ($47 million), higher state income taxes
($7 million) and the absence of 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 signed into law
during the first quarter of 2020 ($4 million). See Note L to the financial statements in Item 8.
Income (Loss) Attributable to Non-Controlling Interest
Income attributable to non-controlling interest decreased $195 million in 2021 compared with 2020 primarily due to
lower income in the 2021 period attributable to a tax equity investor in renewable electric projects accounted for
under the HLBV method of accounting. See Note S to the financial statements in Item 8.
Con Edison Transmission
Other operations and maintenance increased $8 million in 2021 compared with 2020 primarily due to a goodwill
impairment loss on its investment in Honeoye in 2021. See Note K to the financial statements in Item 8.
Other Income (Deductions)
Other deductions decreased $192 million in 2021 compared with 2020 primarily due to lower losses in 2021 from
CET Gas’ pre-tax impairment loss of $212 million on its investment in Stagecoach, pre-tax impairment loss of $231
million on its investment in MVP in 2021, lower investment income in 2021 due to the sale of Stagecoach during
2021 ($19 million) and foregoing AFUDC income from MVP starting January 2021 until significant construction
resumes ($60 million), compared to the pre-tax impairment loss of $320 million on its investment in MVP in 2020.
See "Critical Accounting Estimates - Investments" in Item 7 and "Investments" in Note A and Note W to the financial
statement in Item 8.
Net Interest Expense
Net interest expense decreased $9 million in 2021 compared with 2020 primarily due to the repayment of an
intercompany loan from the parent company from a portion of the proceeds from the sale of Stagecoach.
Income Tax Expense
Income taxes decreased $48 million in 2021 compared with 2020 primarily due to lower income before income tax
expense ($40 million), lower state income taxes ($12 million), offset in part by higher amortization of excess
deferred federal income taxes in 2021 ($2 million).
Other
Taxes, Other Than Income Taxes
Taxes, other than income taxes decreased $6 million in 2021 compared with 2020 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 $4 million in 2021 compared with 2020 primarily due to the elimination of
CECONY's goodwill impairment related to Con Edison Transmission's investment in Honeoye.
Income Tax Expense
Income taxes increased $29 million in 2021 compared with 2020 primarily due to higher income before income tax
expense ($2 million), lower consolidated state income tax benefits in 2021 ($16 million) and the absence of a
change to the New York City valuation allowance in 2021 ($10 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 2021
69
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
99
—
2,269
1,598
2,456
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
10,560
9,280
9,908
547
(628)
22,000
24,754
(2,754)
9,184
9,932
(748)
—
—
—
5.2 %
(6.3)
(11.1)
(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).
70
CON EDISON ANNUAL REPORT 2021
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)
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
(66)
56
(42)
(15)
—
(1)
2
(40)
$(96)
(17.2)
9.4
(2.2)
(35.7)
—
(4.3)
6.5
(35.1)
(4.5%)
Total
275,725
291,605
(15,880)
(5.4) %
$2,036
$2,132
(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.
CON EDISON ANNUAL REPORT 2021
71
(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 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).
72
CON EDISON ANNUAL REPORT 2021
Purchased power expenses decreased $6 million in 2020 compared with 2019 due to lower unit costs ($3 million)
and purchased volumes ($3 million).
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).
CON EDISON ANNUAL REPORT 2021
73
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
$893
188
90
308
84
84
$41
$139
2019
Total
2020-2019
Variation
$(31)
(19)
(29)
2
6
1
$8
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:
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, 2020
December
31, 2019 Variation
1,786
1,703
820
808
83
12
2,621
2,885
(264)
107
—
106
—
1
—
Percent
Variation
4.9 %
1.5
(9.2)
0.9
—
December
31, 2020
December
31, 2019 Variation
$318
117
186
7
1
$309
112
191
8
14
$9
5
(5)
(1)
(13)
$(5)
5,334
5,502
(168)
(3.1) % (d)
$629
$634
Variation
$(5)
(19)
7
5
1
$1
Percent
Variation
2.9 %
4.5
(2.6)
(12.5)
(92.9)
(0.8) %
(a) Revenues from NY 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 NJ 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 NY 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 NY 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).
74
CON EDISON ANNUAL REPORT 2021
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:
(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 NY gas sales are subject to a weather normalization clause and a revenue decoupling mechanism, as a result of which,
delivery revenues are generally not affected by changes in delivery volumes from levels assumed when rates were approved.
(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:
CON EDISON ANNUAL REPORT 2021
75
(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).
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 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 projects accounted for
under the HLBV method of accounting. See Note S to the financial statements in Item 8.
76
CON EDISON ANNUAL REPORT 2021
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 "Critical Accounting
Estimates - 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).
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 2021
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 its
subsidiaries 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 2021
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CON EDISON ANNUAL REPORT 2021
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 and 2021, the decline in business activity in the Utilities’ service territory due to the COVID-19
pandemic resulted in a slower recovery of cash from outstanding customer accounts receivable balances, material
increases in customer accounts receivable balances, increases to the allowance for uncollectible accounts, and
may result in increases to write-offs of customer accounts, as compared to prior to the COVID-19 pandemic. These
trends may continue through 2022. Under the revenue decoupling mechanisms in the Utilities’ NY electric and gas
rate plans, changes in delivery volumes from levels assumed when rates were approved may affect the timing of
cash flows, but largely not net income. The prices at which the Utilities provide energy to their customers are
determined in accordance with their rate plans. However, increases in electric and gas commodity prices, coupled
with the decline in business activity due to the COVID-19 pandemic, may further contribute to a slower recovery of
cash from outstanding customer accounts receivable balances, increases to the allowance for uncollectible
accounts, and increases to write-offs of customer accounts receivable balances. In general, changes in the Utilities’
cost of purchased power, fuel and gas may affect the timing of cash flows, but not net income, because the costs
are recovered in accordance with rate plans. See “Recoverable Energy Costs” in Note A to the financial statements
in Item 8.
The Utilities’ NY rate plans allow them to defer costs resulting from a change in legislation, regulation and related
actions that have taken effect during the term of the rate plans once the costs exceed a specified threshold.
Increases to the allowance for uncollectible accounts related to the COVID-19 pandemic have been deferred
pursuant to the legislative, regulatory and related actions provisions of their rate plans. In November 2021, the
NYSPSC issued an order establishing a surcharge recovery mechanism for CECONY to collect late payment
charges and fees that were not billed for the year ended December 31, 2020 due to the COVID-19 pandemic. The
order also established a surcharge recovery or surcredit mechanism for any fee deferrals for 2021 and 2022. In
October 2021, O&R, the New York State Department of Public Service (NYSDPS) and other parties entered into a
Joint Proposal for new electric and gas rate plans for the three-year period January 2022 through December 2024
(the Joint Proposal) that includes certain COVID-19 provisions, such as: recovery of 2020 late payment charges
over three years; reconciliation of late payment charges to amounts reflected in rates for years 2021 through 2024;
and reconciliation of write-offs of customer accounts receivable balances to amounts reflected in rates from January
1, 2020 through December 31, 2024. The Joint Proposal is subject to NYSPSC approval. See “The Companies
Face Risks Related To Health Epidemics And Other Outbreaks, Including The COVID-19 Pandemic,” in Item 1A,
“Rate Plans,” "COVID-19 Regulatory Matters" and “Other Regulatory Matters” in Note B to the financial statements
in Item 8 and "Coronavirus Disease 2019 (COVID-19) Impacts - Liquidity and Financing," above.
Pursuant to their rate plans, the Utilities have recovered from customers a portion of the tax liability they will pay in
the future as a result of temporary differences between the book and tax basis of assets and liabilities. These
temporary differences affect the timing of cash flows, but not net income, as the Companies are required to record
deferred tax assets and liabilities at the current corporate tax rate for the temporary differences. For the Utilities,
credits to their customers of the net benefits of the TCJA, including the reduction of the corporate tax rate to 21
percent, decrease cash flows from operating activities. Pursuant to their rate plans, the Utilities also recover from
customers the amount of property taxes they will pay. The payment of property taxes by the Utilities affects the
timing of cash flows and increases the amount of short-term borrowings issued by the Utilities when property taxes
are due and as property taxes increase, but generally does not impact net income. See “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’ NY 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,
2021 net income also included non-cash losses recognized with respect to impairments of Con Edison
Transmission’s investments in MVP, Stagecoach and Honeoye. For Con Edison, 2020 net income included a
non-cash loss recognized with respect to a partial impairment of Con Edison Transmission’s investment in MVP.
“Investments” in Note A and Note K to the financial statements in Item 8.
See
80
CON EDISON ANNUAL REPORT 2021
Net cash flows from operating activities in 2021 for Con Edison and CECONY were $535 million and $493 million
higher, respectively, than in 2020. The changes in net cash flows for Con Edison and CECONY primarily reflect a
lower increase of accounts receivable balances from customers, net of allowance for uncollectible accounts ($223
million and $196 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), higher recoveries of depreciation expense ($112 million and $107 million, respectively), lower
system benefit charge ($85 million and $80 million, respectively), lower superfund and environmental remediation
costs ($12 million and $12 million, respectively) and lower pension and retiree benefit contributions ($6 million and
$5 million, respectively). For Con Edison, changes in net cash flows reflects lower other receivables and other
current assets ($31 million), lower taxes receivable ($19 million), lower revenue decoupling receivable ($8 million),
offset in part by a change in pension and retiree benefit obligations, net ($19 million) and for CECONY, a change in
pension and retiree benefit obligations, net ($30 million).
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).
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 $740 million lower and $313 million
higher, respectively, in 2021 than in 2020. The change for Con Edison primarily reflects proceeds from the
completion of the sale of Stagecoach ($629 million), a decrease in non-utility construction expenditures at the Clean
Energy Businesses ($261 million) and proceeds from the divestiture of renewable electric projects at the Clean
Energy Businesses ($183 million), offset in part by an increase in utility construction expenditures at CECONY
($301 million) and O&R ($3 million). Pursuant to their rate plans, the Utilities recover the cost of utility construction
expenditures from customers, including an approved rate of return (before and after being placed in service and or
AFUDC before being placed in service). Increases in the amount of utility construction expenditures may temporarily
increase the amount of short-term debt issued by the Utilities prior to the long-term financing of such amounts.
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).
Cash Flows From Financing Activities
Net cash flows from financing activities in 2021 for Con Edison and CECONY were $1,784 million and $461 million
lower, respectively, than in 2020. 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 during the years ended December 31, 2021, 2020 and 2019 reflect the
following Con Edison transactions:
CON EDISON ANNUAL REPORT 2021
81
2021
•
Issued 10,100,000 shares of its common stock resulting in net proceeds of approximately $775 million, after
issuance expenses. The net proceeds from the sale of the common shares were invested by Con Edison in
CECONY, for funding of its construction expenditures and for its other general corporate purposes. See Note C
to the financial statements in Item 8;
• Redeemed at maturity $500 million of 2.00 percent 5-year debentures with proceeds from a $500 million
borrowing under an April 2021 Credit Agreement, which Con Edison prepaid in full in July 2021; and
• Optionally prepaid the remaining $675 million outstanding under a February 2019 term loan prior to its maturity
in June 2021.
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;
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.
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;
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 matured in June 2021 to fund the repayment of a six-
month variable-rate term loan. In June 2019 and during the first quarter of 2021, Con Edison optionally pre-paid
$150 million and $675 million, respectively, of the amount borrowed.
Con Edison’s cash flows from financing activities in 2021, 2020 and 2019 also reflect the proceeds, and reduction in
cash used for reinvested dividends, resulting from the issuance of common shares under the company’s dividend
reinvestment, stock purchase and long-term incentive plans of $109 million, $106 million and $101 million,
respectively.
Net cash flows from financing activities during the years ended December 31, 2021, 2020 and 2019 reflect the
following CECONY transactions:
2021
•
Issued $600 million aggregate principal amount of 3.20 percent debentures, due 2051, the net proceeds from
the sale of which were used to repay short-term borrowings and for other general corporate purposes;
•
Issued $900 million aggregate principal amount of 2.40 percent debentures, due 2031, the aggregate
net proceeds from the sales of which were used to redeem at maturity its $640 million floating rate 3-year
•
debentures and for other general corporate purposes, including repayment of short-term debt; and
Issued $750 million aggregate principal amount of 3.60 percent debentures, due 2061, the net proceeds from
the sale of which will be used to pay or reimburse the payment of, in whole or in part, existing and new
qualifying eligible green expenditures, such as energy efficiency and clean transportation expenditures, that
include those funded on or after January 1, 2021 until the maturity date of the debentures. Pending the
allocation of the net proceeds to finance or refinance eligible green expenditures, CECONY used the net
82
CON EDISON ANNUAL REPORT 2021
2020
•
•
•
•
2019
•
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 3.00 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.
Net cash flows from financing activities during the years ended December 31, 2021, 2020 and 2019 also reflect the
following O&R transactions:
2021
•
Issued $45 million aggregate principal amount of 2.31 percent debentures, due 2031 and $30 million aggregate
principal amount of 3.17 percent debentures, due 2051, the net proceeds from the sales of which were used to
repay short-term borrowings and for other general corporate purposes.
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.
CON EDISON ANNUAL REPORT 2021
83
2019
•
2021
•
•
•
•
•
•
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.
Net cash flows from financing activities during the years ended December 31, 2021, 2020 and 2019 also reflect the
following Clean Energy Businesses transactions:
Borrowed $250 million at a variable rate, due 2028, secured by equity interests in four of the company’s solar
electric production projects, the interest rate for which was swapped to a fixed rate of 3.39 percent;
Entered into an agreement with a tax equity investor for the financing of a portfolio of three of the Clean Energy
Businesses’ solar electric production projects (CED Nevada Virginia). Under the financing, the tax equity
investor acquired a noncontrolling interest in the portfolio and will receive a percentage of earnings, tax
attributes and cash flows. As of December 31, 2021, the tax equity investor fully funded its $263 million
financing obligation. The Clean Energy Businesses will continue to consolidate this entity and will report the
noncontrolling tax equity investor’s interest in the tax equity arrangement. See Note Q to the financial
statements in Item 8;
Prepaid in full $249 million of borrowings outstanding under, and terminated, a $613 million variable-rate
construction loan facility that was secured by and used to fund construction costs for CED Nevada Virginia; and
Issued $229 million aggregate principal amount of 3.77 percent senior notes, due 2046, secured by equity
interests in CED Nevada Virginia.
2020
•
Borrowed $165 million under a $613 million variable-rate construction loan facility that was terminated in 2021
that was secured by and used to fund construction costs for CED Nevada Virginia.
Issued $303 million aggregate principal amount of 3.82 percent senior notes, due 2038, secured by the
company's California Solar 4 renewable electric 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 matured in June 2021 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 Q to the financial statements in Item 8.
Cash flows from financing activities of the Companies also reflect commercial paper issuance. The commercial
paper amounts outstanding at December 31, 2021, 2020 and 2019 and the average daily balances for 2021, 2020
and 2019 for Con Edison and CECONY were as follows:
(Millions of Dollars, except
Weighted Average Yield)
Con Edison
CECONY
Weighted average yield
2021
2020
2019
Outstanding at
December 31
Daily
average
Outstanding at
December 31
Daily
average
Outstanding at
December 31
$1,488
$1,361
0.3%
$1,189
$1,082
0.2%
$1,705
$1,660
0.3%
$980
$678
1.0%
$1,692
$1,137
2.0%
Daily
average
$1,074
$734
2.5%
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.
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CON EDISON ANNUAL REPORT 2021
Assets, Liabilities and Equity
The Companies’ assets, liabilities and equity at December 31, 2021 and 2020 are summarized as follows:
CECONY
O&R
Clean Energy
Businesses
Con Edison
Transmission
Other (a)
Con Edison (b)
2021
2020
2021
2020
2021
2020
2021
2020
2021
2020
2021
2020
(Millions of Dollars)
ASSETS
Current assets
Investments
Net plant
$4,703
$4,407
$290
$277
$542
$485
$2
$42
608
541
26
26 — —
223
1,256
Other noncurrent assets
5,731
6,465
377
475
41,613
39,554
2,599
2,469
4,367
1,645
4,515
1,848
17
7
17
33
$14
(4)
$90
(7)
$5,551
$5,301
853
1,816
— —
48,596
46,555
356
402
8,116
9,223
Total Assets
$52,655
$50,967 $3,292 $3,247 $6,554 $6,848
$249 $1,348
$366
$485
$63,116
$62,895
LIABILITIES AND SHAREHOLDERS' EQUITY
Current liabilities
Noncurrent liabilities
Long-term debt
Equity
$4,321
13,640
18,382
16,312
$5,247
$372
$356 $1,011 $1,330
$100
$111 $(377)
$310
14,722
1,064
1,191
16,149
14,849
968
888
893
807
121
2,607
2,815
211
2,776
2,531
(90)
—
239
28
500
709
14
647
82
(58)
64
169
$5,427
14,749
22,604
20,336
$7,354
16,094
20,382
19,065
Total Liabilities and Equity
$52,655
$50,967 $3,292 $3,247 $6,554 $6,848
$249 $1,348
$366
$485
$63,116
$62,895
(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, 2021 were $296 million higher than at December 31, 2020. The change in current
assets primarily reflects increases in accounts receivables, net of allowance for uncollectible accounts ($246 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) and revenue decoupling
mechanism receivable ($62 million).
Investments at December 31, 2021 were $67 million higher than at December 31, 2020. The change in investments
primarily reflects increases in supplemental retirement income plan assets ($60 million) and deferred income plan
assets ($10 million). See "Investments" in Note A and Note E to the financial statements in Item 8.
Net plant at December 31, 2021 was $2,059 million higher than at December 31, 2020. The change in net plant
primarily reflects an increase in electric ($1,519 million), gas ($1,400 million), steam ($132 million) and general
($269 million) plant balances, offset in part by an increase in accumulated depreciation ($926 million) and a
decrease in construction work in progress ($335 million).
Other noncurrent assets at December 31, 2021 were $734 million lower than at December 31, 2020. The change in
other noncurrent assets primarily reflects a decrease in the regulatory asset for unrecognized pension and other
postretirement costs to reflect the final actuarial valuation, as measured at December 31, 2021, of the pension and
other retiree benefit plans in accordance with the accounting rules for retirement benefits ($2,955 million). This
decrease is offset in part by increases in the deferrals for increased costs related to the COVID-19 pandemic ($164
million), regulatory assets for deferred pension and other postretirement benefits ($163 million), deferred storm
costs ($75 million), environmental remediation costs ($69 million). See Notes B, E, F and G to the financial
statements in Item 8. This decrease is also offset in part by an increase in the pension funded status non-current
asset due to an increase in the funded status of the pension plan resulting in an asset balance ($1,677 million) and
an increase in the fair value of long-term derivative assets ($48 million).
Current liabilities at December 31, 2021 were $926 million lower than at December 31, 2020. The change in current
liabilities primarily reflects decreases in debt due within one year as of December 31, 2020 ($640 million) and notes
payable ($299 million).
CON EDISON ANNUAL REPORT 2021
85
Noncurrent liabilities at December 31, 2021 were $1,082 million lower than at December 31, 2020. The change in
noncurrent liabilities primarily reflects a decrease in the liability for pension and retiree benefits ($1,274 million) as a
result of the final actuarial valuation of the pension and other retiree benefit plans, as measured at December 31,
2021, in accordance with the accounting rules for retirement benefits. The change also reflects a decrease in the
regulatory liability for future income tax ($222 million). These decreases are offset in part by an increase in deferred
income taxes and unamortized investment tax credits ($385 million), primarily due to accelerated tax depreciation
and repair deductions and increases in deferred regulatory costs. See Notes E, F, and L to the financial statements
in Item 8.
Long-term debt at December 31, 2021 was $2,233 million higher than at December 31, 2020. The change in long-
term debt primarily reflects the June and December 2021 issuance of $2,250 million of debentures. 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, 2021 was $1,463 million higher than at December 31, 2020. The change in equity reflects
net income for the year ($1,344 million), capital contributions from parent ($1,100 million) in 2021 and an increase in
other comprehensive income ($7 million), offset in part by common stock dividends to parent ($988 million) in 2021.
O&R
Current assets at December 31, 2021 were $13 million higher than at December 31, 2020. The change in current
assets primarily reflects increases in accrued unbilled revenue ($18 million), accounts receivables, net of allowance
for uncollectible accounts ($5 million), offset in part by a decrease in cash and temporary cash investments ($8
million).
Net plant at December 31, 2021 was $130 million higher than at December 31, 2020. The change in net plant
primarily reflects an increase in electric ($104 million), gas ($56 million), and general ($21 million) plant balances
and an increase in construction work in progress ($12 million), offset in part by an increase in accumulated
depreciation ($63 million).
Other noncurrent assets at December 31, 2021 were $98 million lower than at December 31, 2020. The change in
other noncurrent assets primarily reflects a decrease in the regulatory asset for unrecognized pension and other
postretirement costs as a result of the final actuarial valuation, as measured at December 31, 2021, of the pension
and other retiree benefit plans in accordance with the accounting rules for retirement benefits ($157 million). See
Notes B, E and F to the financial statements in Item 8. This decrease is offset in part by an increase in pension and
retiree benefits ($24 million), an increase in the regulatory asset for deferred pension and other postretirement
benefits ($18 million), an increase in deferred storm costs ($7 million), an increase in deferred environmental
remediation costs ($4 million) and an increase in deferred revenue taxes ($3 million).
Current liabilities at December 31, 2021 were $16 million higher than at December 31, 2020. The change in current
liabilities primarily reflects higher notes payable ($32 million), an increase in the regulatory liabilities ($27 million)
and higher accounts payables to affiliates ($8 million), offset in part by lower accounts payables ($56 million).
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CON EDISON ANNUAL REPORT 2021
Noncurrent liabilities at December 31, 2021 were $127 million lower than at December 31, 2020. The change in
noncurrent liabilities primarily reflects a decrease in the liability for pension and retiree benefits ($198 million), as a
result of the final actuarial valuation of the pension and other retiree benefit plans, as measured at December 31,
2021 in accordance with the accounting rules for retirement benefits, offset in part by an increase in the regulatory
liability for other employee benefits ($22 million), long-term deferred derivative gains ($6 million) and deferred other
retiree benefit plans rate ($6 million). It also reflects an increase in deferred income taxes and unamortized
investment tax credits ($22 million), primarily due to accelerated tax depreciation and repair deductions and
increases in deferred regulatory costs. It also reflects an increase in superfund and other environmental costs ($13
million). See Notes E, F, G and L to the financial statements in Item 8.
Long-term debt at December 31, 2021 was $75 million higher than at December 31, 2020. The change in long-term
debt reflects the December 2021 issuance of $75 million of debentures. See "Liquidity and Capital Resources -
Cash Flows From Financing Activities" above.
Equity at December 31, 2021 was $81 million higher than at December 31, 2020. The change in equity reflects net
income for the year ($75 million), an increase in other comprehensive income ($23 million) and capital contributions
from parent ($35 million) in 2021, offset in part by common stock dividends to parent ($52 million).
Clean Energy Businesses
Current assets at December 31, 2021 were $57 million higher than at December 31, 2020. The change in current
assets primarily reflects an increase in other receivables ($72 million), accrued unbilled revenue ($19 million), offset
in part by a decrease in restricted cash ($11 million) and a decrease in other currents assets ($26 million).
Net plant at December 31, 2021 was $148 million lower than at December 31, 2020. The change in net plant
primarily reflects the divestiture of renewable electric projects.
Other noncurrent assets at December 31, 2021 were $203 million lower than at December 31, 2020. The change in
other noncurrent assets primarily reflects the divestiture of renewable electric projects.
Current liabilities at December 31, 2021 were $319 million lower than at December 31, 2020. The change in current
liabilities primarily reflects new borrowing offset in part by a decrease in borrowings under a term loan.
Noncurrent liabilities at December 31, 2021 were $90 million lower than at December 31, 2020. The change in
noncurrent liabilities primarily reflects the change in the fair value of derivative liabilities.
Long-term debt at December 31, 2021 was $169 million lower than at December 31, 2020. The change in long-term
debt primarily reflects the repayment of an intercompany loan from the parent company ($375 million), offset in part
by a net increase in project debt ($206 million).
Equity at December 31, 2021 was $284 million higher than at December 31, 2020. The change in equity primarily
reflects an increase in net income for common stock for the year ($266 million) and in noncontrolling tax equity
interest ($81 million) in 2021, offset in part by common stock dividends to parent ($64 million) in 2021.
Con Edison Transmission
Current assets at December 31, 2021 were $40 million lower than at December 31, 2020. The change in current
assets primarily reflects the agreement between Crestwood and a subsidiary of CET Gas that provided for
payments from Crestwood to the subsidiary of CET Gas for shortfalls in meeting certain earnings growth
performance targets. Payments totaled $57 million ($38 million of which was recorded as a current receivable by
CET Gas on December 2020, and payments in full from Crestwood plus interest were received in 2021). See "Con
Edison Transmission - CET Gas" in Item 1.
Investments at December 31, 2021 were $1,033 million lower than at December 31, 2020. The decrease in
investments primarily reflects the completion of the sale of Stagecoach ($828 million), the impairment loss related to
Con Edison Transmission's investment in Mountain Valley Pipeline, LLC ($231 million), offset in part by additional
investment in and income from NY Transco ($44 million). See "Investments - Partial Impairment of Investment in
Stagecoach Gas Services LLC (Stagecoach)" and "Investments - 2020 and 2021 Partial Impairments of Investment
in Mountain Valley Pipeline, LLC (MVP)” in Note A and Note W to the financial statements in Item 8.
Other noncurrent assets at December 31, 2021 were $26 million lower than at December 31, 2020. The change in
noncurrent assets primarily reflects a reduction in accounts receivable due to the noncurrent portion of the $57
million payment from Crestwood described above.
CON EDISON ANNUAL REPORT 2021
87
Current liabilities at December 31, 2021 were $11 million lower than at December 31, 2020. The change in current
liabilities primarily reflects the repayment of short-term borrowings under an intercompany capital funding facility
with a portion of the proceeds from the completion of the sale of Stagecoach. See Note A and Note W to the
financial statements in Item 8.
Noncurrent liabilities at December 31, 2021 were $118 million lower than at December 31, 2020. The change in
noncurrent liabilities reflects primarily a decrease in deferred income taxes and unamortized investment tax credits
that reflects primarily timing differences associated with investments in partnerships and the tax loss on the
completion of the sale of Stagecoach. See "Investments - Partial Impairment of Investment in Stagecoach" and
"Investments - 2020 and 2021 Partial Impairments of Investment in Mountain Valley Pipeline, LLC (MVP)” in Note A
and Note W to the financial statements in Item 8.
Long-term debt at December 31, 2021 was $500 million lower than at December 31, 2020. The change in long-term
debt reflects the repayment of a $500 million intercompany loan from the parent company.
Equity at December 31, 2021 was $470 million lower than at December 31, 2020. The change in equity reflects net
loss for the year ($318 million) and common stock dividends to parent ($152 million) in 2021.
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CON EDISON ANNUAL REPORT 2021
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.
Critical Accounting Estimates
The Companies’ financial statements reflect the application of certain critical accounting estimates, which conform
to accounting principles generally accepted in the United States of America. The Companies’ critical accounting
estimates include assumptions applied to accounting for: pensions and other postretirement benefits, contingencies,
derivative instruments, investments, allowance for uncollectible accounts receivable, asset retirement obligations,
and for Con Edison, the use of the hypothetical liquidation at book value method. Also, see “Summary of Significant
Accounting Policies and Other Matters” in Note A to the financial statements in Item 8.
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 2021, 2020 and 2019.
The discount rate for determining the present value of future period benefit payments is determined using a model
to match the durations of Aa rated (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 2022 are decreases, compared with 2021, in their pension and other postretirement benefits costs of
$523 million and $487 million, respectively, largely driven by increases in the discount rates used to determine plan
liabilities and stronger than anticipated returns on plan assets. See Notes E and F to the financial statements in
Item 8.
The following table illustrates the effect on 2022 pension and other postretirement costs of changing the critical
actuarial assumptions, while holding all other actuarial assumptions constant:
CON EDISON ANNUAL REPORT 2021
89
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%
$64
$62
$42
$40
$—
$—
$688
$656
$—
$—
$3
$2
$3
$2
$25
$20
$41
$32
$163
$132
Total
$67
$64
$45
$42
$25
$20
$729
$688
$163
$132
A 5.0 percentage point variation in the actual annual return in 2022, 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 $33 million and $31 million, respectively, in 2023.
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 2021 under funding regulations and tax laws.
However, CECONY and O&R made discretionary contributions to the pension plan in 2021 of $432 million and $37
million, respectively. In 2022, CECONY and O&R expect to make contributions to the pension plan of $20 million
and $9 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
tar that have been used or generated in the course of operations (Note G) and other contingencies (Note H). Inputs
to the estimation of the liability for such environmental remediation include the possible selected remedy for each
site where investigation is ongoing, the inflation rate related to the cost of inputs to the remediation process, and for
those sites where there are other potentially responsible parties, the allocation of costs to the Companies. Inputs to
the estimation of the liability for certain regulatory matters include facts specific to each item and the status and
progress of discussions with the applicable state regulator. Inputs to the estimation of the liability for other
contingencies may include liabilities incurred for similar circumstances and the outcome of legal proceedings. 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.
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CON EDISON ANNUAL REPORT 2021
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. See Note Q to the financial statements in Item 8.
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 evaluated its equity method investments and concluded that as of December 31, 2020 and 2021 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 pre-tax impairment losses of $320 million ($223
million after tax) and $231 million ($162 million after tax) for the years ended December 31, 2020 and 2021,
respectively, that reduced the carrying value of its investment in MVP from $662 million to $342 million with an
associated deferred tax asset of $53 million for the year ended December 31, 2020 and from $342 million to $111
million with an additional $77 million associated deferred tax asset for the year ended December 31, 2021, totaling
a deferred tax asset of $130 million at period end. See “Investments - 2020 and 2021 Partial Impairments of
Investment in Mountain Valley Pipeline, LLC (MVP)” in Note A to the financial statements in Item 8.
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, including the
likelihood of project completion, 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.
In May 2021, a subsidiary of Con Edison Gas Pipeline and Storage, LLC (CET Gas) entered into a purchase and
sale agreement pursuant to which the subsidiary and its joint venture partner agreed to sell their combined interests
in Stagecoach Gas Services LLC (Stagecoach) for a total of $1,225 million, of which $629 million was attributed to
CET Gas for its 50 percent interest, subject to closing adjustments. The purchase and sale agreement contemplated
a two-stage closing, the first of which was completed in July 2021 and the second of which was completed in
November 2021.
As a result of information made available to Stagecoach as part of the sale process, Stagecoach performed
impairment tests that resulted in Stagecoach recording impairment charges of $414 million for the year ended
December 31, 2021. Accordingly, Con Edison recorded pre-tax impairment losses on its 50 percent interest in
Stagecoach of $212 million ($147 million after-tax), including working capital and transaction cost adjustments,
within "Investment income/(loss)" on Con Edison's consolidated income statement for the year ended December 31,
2021.
Stagecoach’s impairment charges and information obtained from the sales process constituted triggering events for
Con Edison's investment in Stagecoach as of March 31, 2021 and June 30, 2021. Con Edison evaluated the
carrying value of its investment in Stagecoach for other-than-temporary declines in value using income and market-
based approaches. Con Edison determined that the carrying value of its investment in Stagecoach of $667 million
CON EDISON ANNUAL REPORT 2021
91
and $630 million as of March 31, 2021 and June 30, 2021, respectively, was not impaired. The carrying value of
$630 million at June 30, 2021 reflected the final sales price received in July 2021 and the remaining amount
received in November 2021, including closing adjustments.
At December 31, 2021 and 2020, Con Edison’s consolidated balance sheet included investments of $853 million
and $1,086 million, respectively. See “Investments” in Note A and Note W to the financial statements in Item 8.
Allowance for Uncollectible Accounts
The Companies develop expected loss estimates using past events data and consider current conditions and future
reasonable and supportable forecasts. 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. During the COVID-19 pandemic, the historical write-off rate was
determined based on an historical weather event with a significant impact to the Companies’ service territory. During
the COVID-19 pandemic, Con Edison's and CECONY's allowances for uncollectible accounts increased from $70
million and $65 million to $317 million and $304 million, respectively. See "COVID-19 Regulatory Matters" in Note B
and “Allowance for Uncollectible Accounts" in Note N to the financial statements in Item 8.
Asset Retirement Obligations (AROs)
AROs are computed as the present value of the estimated costs for an asset's future retirement and are recorded in
the period in which the liability is incurred. The estimated costs are capitalized as part of the related long-lived asset
and depreciated over the asset's useful life. CECONY and O&R, as rate-regulated entities, recognize Regulatory
Assets or Liabilities as a result of timing differences between the recording of costs and costs recovered through the
ratemaking process. Because quoted market prices are not available for AROs, the Companies estimate the fair
value of AROs by calculating discounted cash flows that are dependent upon various assumptions including
estimated retirement dates, discount rates, inflation rates, the timing and amount of future cash outlays, and
currently available technologies.
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. See Note T to
the financial statements in Item 8.
A 1% increase in the assumed inflation rate used to value the ARO liability as of December 31, 2021 would increase
the liability by $42 million and $41 million for Con Edison and CECONY, respectively.
Hypothetical Liquidation at Book Value (HLBV)
For certain investments of the Clean Energy Businesses, 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 contractual liquidation waterfall calculations and adjusts its income for the period to reflect the change in the
liquidation value allocable to the tax equity investors based on the terms of the partnerships' operating agreements.
See Note S 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.
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CON EDISON ANNUAL REPORT 2021
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 Q to the financial statements in Item
8. Con Edison and CECONY estimate that at December 31, 2021, 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 and an immaterial
amount, respectively. Under CECONY’s current electric, gas and steam rate plans, variations in actual variable rate
tax-exempt debt interest expense, including costs associated with the refinancing of the variable rate tax-exempt
debt, are reconciled to levels reflected in rates.
Commodity Price Risk
Con Edison’s commodity price risk 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, 2021, a 10 percent decline in market prices would result in a decline
in fair value of $117 million for the derivative instruments used by the Utilities to hedge purchases of electricity and
gas, of which $106 million is for CECONY and $11 million is for O&R. Con Edison expects that any such change in
fair value would be largely offset by directionally opposite changes in the cost of the electricity and gas purchased.
The Utilities do not make any margin or profit on the electricity or gas they sell. In accordance with provisions
approved by state regulators, the Utilities generally recover from 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.
However, increases in electric and gas commodity prices may contribute to a slower recovery of cash from
outstanding customer accounts receivable balances and increases to the allowance for uncollectible accounts, and
may result in increases to write-offs of customer accounts receivable balances. In February 2022, the NYSPSC, in
response to higher customer bills, requested that CECONY enhance its efforts to mitigate customer bill volatility due
to commodity price increases by reassessing its power supply billing practices and improve communications to
customers regarding forecasted significant bill increases resulting from commodity price increases.
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, 2021 and 2020,
respectively, was as follows:
95% Confidence Level, One-Day Holding Period
Average for the period
High
Low
2021
2020
(Millions of Dollars)
$1
3
—
$—
—
—
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 “Critical Accounting Estimates – 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.
CON EDISON ANNUAL REPORT 2021
93
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, 2021, the
pension plan investments consisted of 50 percent equity securities, 38 percent debt securities and 12 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 NY 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.
Material Contingencies
For information concerning potential liabilities arising from the Companies’ material contingencies, see “Critical
Accounting Estimates – Accounting for Contingencies,” above, and Notes B, G and H to the financial statements in
Item 8.
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CON EDISON ANNUAL REPORT 2021
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.
CON EDISON ANNUAL REPORT 2021
95
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 (PCAOB ID 238)
Consolidated Income Statement for the years ended December 31, 2021, 2020, and 2019
Consolidated Statement of Comprehensive Income for the years ended December 31, 2021, 2020 and 2019
Consolidated Statement of Cash Flows for the years ended December 31, 2021, 2020 and 2019
Consolidated Balance Sheet at December 31, 2021 and 2020
Consolidated Statement of Equity for the years ended December 31, 2021, 2020 and 2019
Consolidated Statement of Capitalization at December 31, 2021 and 2020
CECONY
Report of Management on Internal Control Over Financial Reporting
Report of Independent Registered Public Accounting Firm (PCAOB ID 238)
Consolidated Income Statement for the years ended December 31, 2021, 2020 and 2019
Consolidated Statement of Comprehensive Income for the years ended December 31, 2021, 2020 and 2019
Consolidated Statement of Cash Flows for the years ended December 31, 2021, 2020 and 2019
Consolidated Balance Sheet at December 31, 2021 and 2020
Consolidated Statement of Shareholder’s Equity for the years ended December 31, 2021, 2020 and 2019
Consolidated Statement of Capitalization at December 31, 2021 and 2020
Notes to the Financial Statements
Financial Statement Schedules
Con Edison
Schedule I - Condensed Financial Information of Consolidated Edison, Inc. at December 31, 2021 and 2020 and for the
years ended December 31, 2021, 2020 and 2019
Schedule II - Valuation and Qualifying Accounts for the years ended December 31, 2021, 2020 and 2019
CECONY
Schedule II - Valuation and Qualifying Accounts for the years ended December 31, 2021, 2020 and 2019
Page
98
99
102
103
104
105
107
108
111
112
114
115
116
117
119
120
122
192
195
195
All other schedules are omitted because they are not applicable or the required information is shown in financial
statements or notes thereto.
96
CON EDISON ANNUAL REPORT 2021
Supplementary Financial Information
Selected Quarterly Financial Data for the years ended December 31, 2021 and 2020 (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
2021
First
Quarter
Second
Quarter
Third
Quarter
Fourth
Quarter
(Millions of Dollars, except per share amounts)
$3,677
860
419
$1.23
$1.22
$2,971
418
165
$0.48
$0.48
$3,613
850
538
$1.52
$1.52
$3,415
697
224
$0.63
$0.63
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
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
2021
First
Quarter
Second
Quarter
Third
Quarter
Fourth
Quarter
(Millions of Dollars)
$3,205
$2,486
$3,092
$2,932
786
465
321
128
728
418
624
333
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
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.
CON EDISON ANNUAL REPORT 2021
97
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, 2021, 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, 2021.
The effectiveness of the Company’s internal control over financial reporting as of December 31, 2021, 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
Chairman, President and Chief Executive Officer
/s/ Robert Hoglund
Robert Hoglund
Senior Vice President and Chief Financial Officer
February 17, 2022
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CON EDISON ANNUAL REPORT 2021
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, 2021, 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, 2021 and 2020, and the results of its operations and its cash
flows for each of the three years in the period ended December 31, 2021 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, 2021, based on criteria established in
Internal Control - Integrated Framework (2013) issued by the COSO.
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
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.
CON EDISON ANNUAL REPORT 2021
99
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.
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 accounting rules
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, 2021, there were $3,845 million of deferred costs included in regulatory assets and $4,566
million of regulatory liabilities awaiting potential refund or future rate reductions. Under regulatory accounting rules,
if it is probable that incurred 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 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 judgment by management in determining the
recoverability of certain regulatory assets and the significant auditor judgment and subjectivity in performing
procedures and evaluating audit evidence relating to the recognition of regulatory assets and regulatory liabilities,
including evaluating management’s judgments relating to the recoverability of certain regulatory assets.
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 and 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.
Hypothetical Liquidation at Book Value (HLBV) Calculation of Income or Loss Attributable to Noncontrolling Tax
Equity Investor in the CED Nevada Virginia Project
As described in Notes A and S to the consolidated financial statements, in February 2021, the Company entered
into an agreement relating to the CED Nevada Virginia project with a noncontrolling tax equity investor to which a
percentage of earnings, tax attributes and cash flows will be allocated. CED Nevada Virginia is a consolidated entity
in which the Company has less than a 100 percent membership interest. Management used the HLBV method of
accounting to determine the income or loss attributable to its noncontrolling tax equity investor based on the terms
of the partnership operating agreement. For the year ended December 31, 2021, the HLBV method of accounting
for the CED Nevada Virginia project resulted in $155 million of income for the Company and $158 million of loss
attributable to the noncontrolling tax equity investor.
The principal considerations for our determination that performing procedures relating to the HLBV calculation of
income or loss attributable to noncontrolling tax equity investor in the CED Nevada Virginia project is a critical audit
matter are the significant complexity in applying the HLBV method to determine the income or loss the
noncontrolling tax equity investor would hypothetically receive at each balance sheet reporting date under the
liquidation provisions of the partnership operating agreement and the significant auditor subjectivity and effort in
100
CON EDISON ANNUAL REPORT 2021
performing procedures and evaluating audit evidence related to the HLBV method based on the terms of the
partnership operating agreement in the initial year. In addition, 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 preparation and review of the HLBV method for the CED Nevada Virginia project
to allocate income or loss to the noncontrolling tax equity investor. These procedures also included, among others
(i) the involvement of professionals with specialized skill and knowledge to assist in developing an independent
calculation of the income or loss attributable to the noncontrolling tax equity investor based on the terms of the
partnership operating agreement, (ii) comparing the independent calculation of the income or loss attributable to the
noncontrolling tax equity investor to management’s HLBV calculation, and (iii) testing the completeness and
accuracy of data used as inputs into the independent calculation.
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 $111 million as of
December 31, 2021. 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 actions taken by the U.S. Court of Appeals for the Fourth Circuit, along with the potential outcome of other
matters pending before that Court, may lead to further delays and increased project costs, constituting a triggering
event which required management to test its investment in MVP for an other-than-temporary impairment as of
December 31, 2021. In response to the triggering event, management assessed the value of its equity investment in
the Project to determine whether the fair value of its investment in MVP had declined below its carrying value on an
other-than-temporary basis as of December 31, 2021. The estimated fair value of the investment was determined
using a discounted cash flow analysis. 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. Based on the discounted cash flow analysis, management concluded as of December 31,
2021 that the fair value of its investment in MVP declined below its carrying value and the declines were other-than-
temporary. Accordingly, management recorded a pre-tax impairment loss of $231 million ($162 million, after tax), for
the year ended December 31, 2021 to reduce the carrying value of its investment in MVP from $342 million to $111
million. Management determined that the likelihood that the Project will be completed is the most significant and
sensitive assumption.
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 model for the discounted cash flow analysis and determining the significant assumption of the
likelihood that the Project will be completed, used to estimate the fair value of the investment, and (ii) a high degree
of auditor judgment, subjectivity, and effort in performing procedures and evaluating audit evidence related to
management’s model and significant assumption related to the likelihood that the Project will be completed.
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 model for the discounted cash flow analysis and determination of the significant assumption
related to the likelihood that the Project will be completed. These procedures also included, among others, (i) testing
management’s process for estimating the fair value of the investment in MVP; (ii) evaluating the appropriateness of
the model for the discounted cash flow analysis used by management to estimate the fair value of the investment in
MVP; (iii) testing the completeness and accuracy of the underlying data used in the model for the discounted cash
flow analysis; and (iv) evaluating the reasonableness of the significant assumption used by management related to
the likelihood that the Project will be completed. Evaluating management’s assumption related to the likelihood that
the Project will be completed involved evaluating whether the assumption used by management was reasonable
considering (i) the status of matters pending with the relevant authorities and (ii) external market and industry data.
/s/ PricewaterhouseCoopers LLP
New York, New York
February 17, 2022
We have served as the Company’s or its predecessors' auditor since 1938.
CON EDISON ANNUAL REPORT 2021
101
For the Years Ended December 31,
2021
2020
2019
$9,485
2,638
532
1,021
13,676
1,835
229
690
3,254
2,032
2,810
10,850
2,826
(420)
22
21
(161)
(538)
2,288
930
(14)
(11)
905
1,383
190
$1,193
$(153)
$1,346
$3.86
$3.85
348.4
349.4
$8,730
2,269
508
739
$8,694
2,391
627
862
12,246
12,574
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
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
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
(Loss) 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.
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CON EDISON ANNUAL REPORT 2021
Consolidated Edison, Inc.
Consolidated Statement of Comprehensive Income
(Millions of Dollars)
NET INCOME
LOSS (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,
2021
$1,193
153
30
—
30
2020
$1,144
(43)
(6)
—
(6)
2019
$1,440
(97)
(5)
2
(3)
$1,376
$1,095
$1,340
The accompanying notes are an integral part of these financial statements.
CON EDISON ANNUAL REPORT 2021
103
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
Other non-cash items, net
CHANGES IN ASSETS AND LIABILITIES
Accounts receivable - customers
Allowance for uncollectible accounts – 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
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 projects
Proceeds from sale of assets
Divestiture of renewable electric projects
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
Sale of equity 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
Software licenses acquired but unpaid as of end of period
Equipment acquired but unpaid as of end of period
The accompanying notes are an integral part of these financial statements.
104
CON EDISON ANNUAL REPORT 2021
For the Years Ended December 31
2019
2020
2021
$1,193
$1,144
$1,440
2,032
443
133
(16)
(21)
(53)
—
(53)
148
(411)
169
(82)
(53)
(103)
13
(24)
44
266
(472)
(46)
4
(10)
18
(34)
(563)
175
36
2,733
(3,630)
(323)
(323)
(30)
—
629
183
10
(3,484)
(382)
2,804
(1,960)
(40)
(1,030)
775
60
(23)
257
461
(290)
1,436
$1,146
$924
$9
$457
$49
$23
$22
1,920
320
85
(40)
(17)
57
—
(1)
49
(543)
78
(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
1,684
—
308
(116)
(14)
27
(14)
(3)
(26)
23
8
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
Consolidated Edison, Inc.
Consolidated Balance Sheet
(Millions of Dollars)
ASSETS
CURRENT ASSETS
Cash and temporary cash investments
Accounts receivable — customers, net allowance for uncollectible accounts of $317 and $148 in 2021
and 2020, respectively
Other receivables, net allowance for uncollectible accounts of $22 and $7 in 2021 and 2020,
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, net accumulated depreciation of $626 and $522 in 2021 and 2020, respectively
Construction work in progress
NET PLANT
OTHER NONCURRENT ASSETS
Goodwill
Intangible assets, net accumulated amortization of $297 and $228 in 2021 and 2020, respectively
Operating lease right-of-use-asset
Regulatory assets
Pension and Retiree Benefits
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,
2021
December 31,
2020
$992
1,943
298
13
662
437
295
206
154
190
361
5,551
853
34,938
12,303
2,828
4,170
54,239
12,177
42,062
2,152
44,214
4,194
188
48,596
439
1,293
809
3,639
1,654
282
8,116
$63,116
$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
$62,895
CON EDISON ANNUAL REPORT 2021
105
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,
2021
December 31,
2020
$440
—
1,488
1,497
300
104
151
113
152
185
423
113
461
5,427
183
737
940
577
84
6,873
717
4,381
257
14,749
22,604
$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
20,037
299
20,336
$63,116
18,847
218
19,065
$62,895
106
CON EDISON ANNUAL REPORT 2021
Consolidated Edison, Inc.
Consolidated Statement of Equity
(In Millions, except for
dividends per share)
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
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
Net income (loss)
Common stock dividends
($3.10 per share)
Issuance of common
shares - public offering
Issuance of common
shares for stock plans
Other comprehensive
income
Distributions to
noncontrolling interests
Net proceeds from sale
of equity interest
BALANCE AS OF
DECEMBER 31, 2021
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
1,346
(1,079)
1
10
2
775
127
(10)
30
(153)
1,193
(1,079)
766
127
30
(23)
(23)
257
257
354
$37
$9,710
$11,445
23 $(1,038)
$(122)
$5
$299 $20,336
The accompanying notes are an integral part of these financial statements.
CON EDISON ANNUAL REPORT 2021
107
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,
2021
354
2020
342
At December 31,
2021
2020
$20,032
$18,872
7
(2)
5
20,037
299
$20,336
(23)
(2)
(25)
18,847
218
$19,065
The accompanying notes are an integral part of these financial statements.
108
CON EDISON ANNUAL REPORT 2021
Consolidated Edison, Inc.
Consolidated Statement of Capitalization
LONG-TERM DEBT (Millions of Dollars)
Maturity
DEBENTURES:
2021
Interest Rate
2.00
2021
2023
2024
2026
2027
2027
2028
2028
2029
2030
2030
2031
2031
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
2051
2051
2054
2056
2057
2058
0.60
0.65
3.30
2.90
6.50
3.125
3.80
4.00
2.94
3.35
2.02
2.40
2.31
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
3.17
3.20
4.625
4.30
4.00
4.50
Series
2016A
2018C
2020A
2014B
2016B
1997F
2017B
2018A
2018D
2019B
2020A
2020A
2021A
2021A
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
2021B
2021C
2014C
2016C
2017C
2018B
At December 31,
2021
$—
—
650
250
250
80
350
300
500
44
600
35
900
45
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
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
1,000
40
30
600
750
500
350
700
40
—
—
750
500
350
700
CON EDISON ANNUAL REPORT 2021
109
2059
2060
2061
3.70
3.00
3.60
2019B
2020C
2021B
TOTAL DEBENTURES
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
0.10
0.10
2039
0.09
TOTAL TAX-EXEMPT DEBT
PROJECT DEBT:
2023
2024-2032
4.07
3.77 - 4.52
2025
2026
2028
2028
2028
2031
2031-2038
2036
2036
2037
2038
2039
2040
2041
2042
2046
4.12
3.72
4.41
3.42
3.39
2.24 - 3.03
5.25 - 4.95
3.94
4.07
4.78
3.82
4.82
4.53
4.21
4.45
3.77
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
600
600
750
19,750
600
600
—
18,565
Series
2010A
2004C
2005A
Copper Mountain Solar 2
Coram
Copper Mountain Solar 3
CED Southwest
Wind Holdings
Copper Mountain Solar 1
CED California Texas
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
CED Nevada Virginia
At December 31,
2021
2020
225
99
126
450
192
—
247
418
95
49
248
165
52
88
79
171
271
65
135
184
83
228
7
225
99
126
450
204
141
264
437
109
56
—
180
54
93
82
178
284
67
140
192
87
—
10
2,777
293
(177)
(49)
23,044
440
22,604
$42,641
2,578
971
(168)
(47)
22,349
1,967
20,382
$39,229
(a) Rates reset weekly; December 31, 2021 rates shown.
(b) December 31, 2021 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.
110
CON EDISON ANNUAL REPORT 2021
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, 2021, 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, 2021.
The effectiveness of the Company’s internal control over financial reporting as of December 31, 2021, 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
Chairman and Chief Executive Officer
/s/ Robert Hoglund
Robert Hoglund
Senior Vice President and Chief Financial Officer
February 17, 2022
CON EDISON ANNUAL REPORT 2021
111
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, 2021, 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, 2021 and 2020, and the results of its operations and its cash
flows for each of the three years in the period ended December 31, 2021 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, 2021, based on criteria established in
Internal Control - Integrated Framework (2013) issued by the COSO.
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
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
112
CON EDISON ANNUAL REPORT 2021
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 accounting rules
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, 2021, there were $3,504 million of deferred costs included in regulatory assets and $4,055
million of regulatory liabilities awaiting potential refund or future rate reductions. Under regulatory accounting rules,
if it is probable that incurred 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 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 judgment by management in determining the
recoverability of certain regulatory assets and the significant auditor judgment and subjectivity in performing
procedures and evaluating audit evidence relating to the recognition of regulatory assets and regulatory liabilities,
including evaluating management’s judgments relating to the recoverability of certain regulatory assets.
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 and 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 17, 2022
We have served as the Company’s auditor since 1938.
CON EDISON ANNUAL REPORT 2021
113
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,
2021
2020
2019
$8,806
2,378
532
11,716
1,633
229
541
2,452
1,705
2,696
9,256
2,460
16
19
(143)
(108)
2,352
759
13
(10)
762
1,590
246
$1,344
$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
The accompanying notes are an integral part of these financial statements.
114
CON EDISON ANNUAL REPORT 2021
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,
2021
$1,344
2020
$1,185
2019
$1,250
7
—
7
(1)
—
(1)
(3)
2
(1)
$1,351
$1,184
$1,249
The accompanying notes are an integral part of these financial statements.
CON EDISON ANNUAL REPORT 2021
115
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 on Sale of Assets
Unbilled revenue and net unbilled revenue deferrals
Other non-cash items, net
CHANGES IN ASSETS AND LIABILITIES
Accounts receivable - customers
Allowance for uncollectible accounts - 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
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
The accompanying notes are an integral part of these financial statements.
116
CON EDISON ANNUAL REPORT 2021
For the Years Ended December 31,
2021
2020
2019
$1,344
$1,185
$1,250
1,705
1,598
124
(16)
(19)
—
(16)
33
168
(40)
(14)
—
(47)
(8)
(412)
(516)
166
(78)
(62)
(85)
96
(53)
65
(4)
283
(433)
(18)
(54)
9
1
(32)
(544)
128
58
2,186
(3,413)
(316)
—
(3,729)
(299)
2,250
(640)
(27)
1,100
(988)
1,396
(147)
1,067
$920
$739
$5
$406
$22
$22
74
2
(53)
(49)
(61)
19
145
9
253
(438)
(30)
61
1
13
(112)
(603)
92
44
1,693
(3,112)
(304)
—
(3,416)
523
2,200
(350)
(34)
500
(982)
1,857
134
933
$1,067
$693
$102
$417
$48
$28
1,373
128
(117)
(12)
(14)
(3)
—
3
7
11
(76)
54
141
(61)
(7)
(4)
330
(325)
(12)
11
—
1
18
(486)
306
(14)
2,502
(3,028)
(288)
192
(3,124)
(55)
1,300
(475)
(21)
900
(912)
737
115
818
$933
$676
$73
$285
$76
$33
Consolidated Edison Company of New York, Inc.
Consolidated Balance Sheet
(Millions of Dollars)
ASSETS
CURRENT ASSETS
Cash and temporary cash investments
Accounts receivable – customers, net allowance for uncollectible accounts of $304 and $138 in 2021
and 2020, respectively
Other receivables, net allowance for uncollectible accounts of $19 and $4 in 2021 and 2020,
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, net accumulated depreciation of $25 in 2021 and 2020
NET PLANT
OTHER NONCURRENT ASSETS
Regulatory assets
Operating lease right-of-use asset
Pension and Retiree Benefits
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,
2021
December 31,
2020
$920
1,841
121
5
549
38
369
212
188
191
269
4,703
608
32,846
11,321
2,828
3,854
50,849
11,223
39,626
1,985
41,611
2
41,613
3,316
545
1,677
193
5,731
$52,655
$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
CON EDISON ANNUAL REPORT 2021
117
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,
2021
December 31,
2020
$—
1,361
1,285
18
285
78
10
127
103
88
134
372
90
370
4,321
178
669
850
504
40
6,796
462
3,921
220
13,640
18,382
16,312
$52,655
$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
14,722
16,149
14,849
$50,967
118
CON EDISON ANNUAL REPORT 2021
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, 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
Net income
Common stock dividend to parent
Capital contribution by parent
Other comprehensive income
1,344
(988)
1,100
1,344
(988)
1,100
7
7
BALANCE AS OF DECEMBER 31, 2021
235
$589
$7,269
$9,478
$(962)
$(62)
$— $16,312
The accompanying notes are an integral part of these financial statements.
CON EDISON ANNUAL REPORT 2021
119
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,
2021
235
2020
235
At December 31,
2021
2020
$16,312
1
$14,856
(5)
(1)
—
(2)
(7)
$16,312
$14,849
The accompanying notes are an integral part of these financial statements.
120
CON EDISON ANNUAL REPORT 2021
Consolidated Edison Company of New York, Inc.
Consolidated Statement of Capitalization
LONG-TERM DEBT (Millions of Dollars)
Maturity
DEBENTURES:
Interest Rate
2021
2024
2026
2027
2028
2028
2030
2031
2033
2033
2034
2035
2035
2036
2036
2036
2037
2038
2039
2040
2042
2043
2044
2045
2046
2047
2048
2049
2050
2051
2054
2056
2057
2058
2059
2060
0.60
3.30
2.90
3.125
3.80
4.00
3.35
2.40
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
3.20
4.625
4.30
4.00
4.50
3.70
3.00
2061
3.60
TOTAL DEBENTURES
TAX-EXEMPT DEBT – Notes issued to New York State Energy
Research and Development Authority for Facilities Revenue Bonds:
2036
(a)
0.10
2039
2039
0.10
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; December 31, 2021 rates shown.
Series
2018C
2014B
2016B
2017B
2018A
2018D
2020A
2021A
2003A
2003C
2004B
2005A
2005B
2006A
2006B
2006E
2007A
2008B
2009C
2010B
2012A
2013A
2014A
2015A
2016A
2017A
2018E
2019A
2020B
2021C
2014C
2016C
2017C
2018B
2019B
2020C
2021B
2010A
2004C
2005A
At December 31,
2021
$—
250
250
350
300
500
600
900
175
200
200
350
125
400
400
250
525
600
600
350
400
700
850
650
550
500
600
700
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
1,000
600
750
500
350
700
600
600
750
—
750
500
350
700
600
600
—
18,125
16,515
225
99
126
450
(145)
(48)
18,382
—
18,382
$34,694
225
99
126
450
(130)
(46)
16,789
640
16,149
$30,998
The accompanying notes are an integral part of these financial statements.
CON EDISON ANNUAL REPORT 2021
121
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 NY and northern NJ and
gas service in southeastern NY. Con Edison Clean Energy Businesses, Inc., 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 Transmission, Inc. invests in and seeks to develop
electric transmission projects through its subsidiary, Consolidated Edison Transmission, LLC (CET Electric), and
manages, through joint ventures, investments in gas pipeline and storage facilities through its subsidiary Con
Edison Gas Pipeline and Storage, LLC (CET Gas). See "Investments" in Note A and Note W.
122
CON EDISON ANNUAL REPORT 2021
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 S), 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, 2021 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.
Revenues
CECONY’s electric and gas rate plans and O&R’s NY 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:
(Millions of Dollars)
Con Edison
CECONY
For the Years Ended December 31,
2021
$358
346
2020
$335
323
2019
$323
312
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 T.
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
CON EDISON ANNUAL REPORT 2021
123
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 4.5 percent, 5.2 percent and 5.1 percent for 2021,
2020 and 2019, respectively. The AFUDC rates for O&R were 4.8 percent, 5.3 percent and 5.3 percent for 2021,
2020 and 2019, 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 2021 and 3.5 percent for 2020 and 3.2 percent for 2019. The average
depreciation rates for O&R were 3.1 percent for 2021, 3.2 percent for 2020 and 3.0 percent for 2019.
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, 2021 and 2020, 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
2021
2020
2021
2020
$559
3,955
22,418
87
10,473
1,924
2,566
80
2,152
$572
3,786
21,481
52
9,206
1,854
2,507
92
2,474
$559
3,658
21,240
87
9,748
1,924
2,338
72
1,985
$572
3,496
20,366
52
8,522
1,854
2,286
84
2,320
$44,214
$42,024
$41,611
$39,552
General utility plant of Con Edison and CECONY included $79 million and $74 million, respectively, at
December 31, 2021, and $86 million and $81 million, respectively, at December 31, 2020, related to a May 2018
acquisition of software licenses. The estimated aggregate annual amortization expense related to the software
licenses for Con Edison and CECONY is $7 million. The accumulated amortization for Con Edison and CECONY
was $24 million at December 31, 2021 and $17 million at December 31, 2020.
Under the Utilities’ rate plans, the aggregate annual depreciation allowance for the period ended December 31,
2021 was $1,802 million, including $1,710 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 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 non-utility plant, other than land, 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, net of accumulated depreciation, included the
following related to implementation costs incurred in cloud computing arrangements:
124
CON EDISON ANNUAL REPORT 2021
(Millions of Dollars)
Prepayments (a)(b)
Other Deferred Charges and Noncurrent Assets (a)(b)
Con Edison
CECONY
2021
$16
$81
2020
$12
$54
2021
$15
$78
2020
$11
$51
(a) Depreciation on these assets is computed using the straight-line method for financial statement purposes over their estimated useful lives.
(b) Depreciation expense related to these assets incurred during the year ended December 31, 2021 for Con Edison and CECONY was $12
million and $11 million, respectively, and for 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 $22 million and $19 million, respectively at
December 31, 2021 and was $10 million and $8 million, respectively at December 31, 2020.
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, 2021 and 2020, intangible assets arising from power purchase agreements
were $1,290 million and $1,457 million, net of accumulated amortization of $288 million and $220 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 $9 million and $8 million,
at December 31, 2021 and 2020, respectively. CECONY’s other intangible assets were immaterial at December 31,
2021 and 2020. Con Edison recorded amortization expense related to its intangible assets of $95 million in 2021,
$102 million in 2020, and $99 million in 2019. Con Edison expects amortization expense to be $95 million per year
over the next five years. No impairment charges were recorded on Con Edison's long-lived assets or intangible
assets with definite lives in 2021 or 2020.
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,
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.
CON EDISON ANNUAL REPORT 2021
125
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 evaluate its investments periodically 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 market inputs, when observable, or 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 involve 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, or the receipt of additional market
information, 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 as described above.
Partial Impairment of Investment in Stagecoach Gas Services LLC (Stagecoach)
In 2021, a subsidiary of Con Edison Gas Pipeline and Storage, LLC (CET Gas) and its joint venture partner agreed
to sell their combined interests in Stagecoach Gas Services LLC (Stagecoach) for a total of $1,225 million, of which
$629 million, including closing adjustments, was attributed to CET Gas for its 50 percent interest. The purchase and
sale agreement provided for a two-stage closing, the first of which was completed in July 2021 and the second of
which was completed in November 2021.
As a result of information made available to Stagecoach as part of the sale process, Stagecoach performed
impairment tests that resulted in Stagecoach recording impairment charges of $414 million for the year ended
December 31, 2021. Accordingly, Con Edison recorded pre-tax impairment losses on its 50 percent interest in
Stagecoach of $212 million ($147 million after-tax), including working capital and transaction cost adjustments,
within "Investment income/(loss)" on Con Edison's consolidated income statement for the year ended December 31,
2021.
Stagecoach’s impairment charges and information obtained from the sales process constituted triggering events for
Con Edison's investment in Stagecoach as of March 31, 2021 and June 30, 2021. Con Edison evaluated the
carrying value of its investment in Stagecoach for other-than-temporary declines in value using income and market-
based approaches. Con Edison determined that the carrying value of its investment in Stagecoach of $667 million
and $630 million as of March 31, 2021 and June 30, 2021, respectively, was not impaired. The carrying value of
$630 million at June 30, 2021 reflected the final sales price received in July 2021 and the remaining amount
received in November 2021, including closing adjustments.
2020 and 2021 Partial Impairments of Investment in Mountain Valley Pipeline, LLC (MVP)
In January 2016, Con Edison Gas Pipeline and Storage, LLC (CET Gas), an indirect subsidiary of Con Edison,
acquired a 12.5 percent equity interest in MVP, a company developing a proposed 300-mile gas transmission
project (the Project) in West Virginia and Virginia. During 2019, Con Edison exercised its right to limit, and did limit,
its cash contributions to the joint venture to approximately $530 million, which reduced CET Gas' interest in MVP to
11.3 percent and 10.2 percent as of December 31, 2020 and 2021, respectively. CET Gas' interest in MVP is
expected to be reduced to 8.5 percent based on the Project's current cost estimate and CET Gas' previous capping
of its cash contributions. As of December 31, 2020 and 2021, the Project was approximately 92 percent and 94
percent complete, respectively.
During 2020, progress was made on the construction of the Project, and the U.S. Supreme Court issued favorable
decisions in cases unrelated to MVP regarding the permitting process for pipeline construction and water crossings.
In November 2020, the U.S. Court of Appeals for the Fourth Circuit issued a stay on the Nationwide Permit 12,
126
CON EDISON ANNUAL REPORT 2021
effectively blocking the Project’s ability to pursue water crossings under that permit. As a result, in November 2020
the Project applied to the FERC for a certificate amendment to bore under water bodies in a portion of the Project in
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 certificate amendment would have led to additional Project costs and
would have extended the anticipated in-service date. In January 2021, the FERC did not approve the requested
certificate amendment. Later in January 2021, the Project indicated its plans to apply for U.S. Army Corps of
Engineers individual permits for certain water crossings and a new certificate amendment application to the FERC
to bore under other water crossings that, in total, would cover the entire Project length.
The uncertainty related to obtaining necessary water crossing permits, the resulting Project costs and the likelihood
of the Project not reaching eventual completion increased as a result of actions taken by the U.S. Court of Appeals
for the Fourth Circuit. This action and associated delays constituted a triggering event (the "2020 triggering event")
that required Con Edison to test its investment in MVP for an other-than-temporary impairment as of December 31,
2020.
In December 2021, the Virginia Department of Environmental Quality and the West Virginia Department of
Environmental Protection both issued water quality certification permits which are required in order for the U.S.
Army Corps of Engineers to proceed with the permitting process for construction of certain Project water crossings.
In January 2022, the U.S. Court of Appeals for the Fourth Circuit rejected permits for crossings through the
Jefferson National Forest issued by the U.S. Forest Service and Bureau of Land Management. In February 2022,
the U.S. Court of Appeals for the Fourth Circuit vacated a biological opinion from the U.S. Fish and Wildlife Service,
applicable to all remaining construction. The biological opinion had been issued and was the subject of litigation
prior to December 31, 2021. Con Edison believes that the February 2022 action by the U.S. Court of Appeals for the
Fourth Circuit, along with the potential outcome of other matters pending before that Court, may lead to further
delays and increased Project costs, which constituted a triggering event (the “2021 triggering event”) that required
Con Edison to test its investment in MVP for an other-than-temporary impairment as of December 31, 2021.
In response to the 2020 triggering event and 2021 triggering event, Con Edison assessed the value of its equity
investment in the Project to determine whether the fair value of its investment in MVP had declined below its
carrying value on an other-than-temporary basis as of December 31, 2020 and 2021, respectively. The estimated
fair value of the investment was determined using a discounted cash flow analysis, which is a level 3 fair value
measurement. The analysis discounted probability-weighted future cash flows, including revenues based on long-
term firm transportation contracts, that are secured for the first 20 years following completion of the Project. See
Note U. Con Edison has also assumed cash flows extending beyond this period. All cash flows were discounted at a
pre-tax discount rate of 8.3 percent and then weighted based on Con Edison’s estimate of the likelihood that the
Project will be completed. For the 2020 triggering event, Con Edison estimated that the likelihood of Project
completion was in the upper end of a reasonably possible range. For the 2021 triggering event, Con Edison
anticipated that the Project faces legal and regulatory challenges that make construction completion increasingly
remote. The Project faces additional delays and increased costs that could further reduce CET Gas' interest in MVP
to below 8 percent based on CET Gas' previous capping of its cash contributions. The likelihood that the Project will
be completed and, for 2020, the discount rate, are the most significant and sensitive assumptions; changes in these
assumptions may materially change the results of the impairment calculation.
Based on the discounted cash flow analyses, Con Edison concluded as of December 31, 2020 and 2021 that the
fair value of its investment in MVP declined below its carrying value and the declines were other-than-temporary.
Accordingly, Con Edison recorded a pre-tax impairment loss of $320 million ($223 million, after tax) for the year
ended December 31, 2020 that reduced the carrying value of its investment in MVP from $662 million to
$342 million, with an associated deferred tax asset of $53 million. Additionally, Con Edison recorded a pre-tax
impairment loss of $231 million ($162 million, after tax) for the year ended December 31, 2021 that reduced the
carrying value of its investment in MVP from $342 million to $111 million, with an additional $77 million associated
deferred tax asset, totaling a deferred tax asset of $130 million at December 31, 2021. The impairments were
recorded within “Investment income (loss)” on Con Edison’s Consolidated Income Statement. In addition, Con
Edison did not record non-cash equity in earnings from allowance for funds used during construction from MVP
beginning in January 2021 and will continue to refrain from recording such amounts until such time as substantial
construction activities resume, which would be indicative of probable Project completion.
There 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.
CON EDISON ANNUAL REPORT 2021
127
Summary of Investment Balances
The following investment assets are included in the Companies' consolidated balance sheets at December 31, 2021
and 2020:
(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 (c)
Other
Total investments
Con Edison
CECONY
2021
$—
111
525
102
112
3
2020
$845
342
465
92
69
3
2021
2020
$—
—
499
102
—
7
$—
—
439
92
—
10
$853
$1,816
$608
$541
(a) At December 31, 2021 and 2020, CET Gas' cash investment in MVP was $530 million. In May 2021, the operator of the Mountain Valley
Pipeline indicated that, subject to receipt of certain authorizations and resolution of certain challenges, it is targeting an in-service date for
the project of summer 2022 at an overall project cost of approximately $6,200 million excluding allowance for funds used during
construction. See "2020 and 2021 Partial Impairments of Investment in Mountain Valley Pipeline, LLC (MVP)" above.
(b) See Note E.
(c) CET Electric owns a 45.7 percent interest in New York Transco, LLC.
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 NY 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 2021
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.
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,
2021
$25
24
2020
$24
23
2019
$24
23
Reclassification
Certain prior year amounts have been reclassified 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.
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 O) 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).
CON EDISON ANNUAL REPORT 2021
129
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,
2021
$1,346
348.4
1.0
349.4
$3.86
$3.85
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
The computation of diluted EPS for the years ended December 31, 2021, 2020 and 2019 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)
Con Edison
CECONY
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)
OCI before reclassifications, net of tax of $(8) and $(2) for Con Edison and CECONY, respectively
Amounts reclassified from accumulated OCI related to pension plan liabilities, net of tax of $(3) and
$(1) for Con Edison and CECONY, respectively (a)(b)
Total OCI, net of taxes, at December 31, 2021
Accumulated OCI, net of taxes, at December 31, 2021 (a)
$(16)
(10)
7
(3)
$(19)
(11)
5
(6)
$(25)
22
8
30
$5
$(5)
(3)
2
(1)
$(6)
(3)
2
(1)
$(7)
5
2
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.
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, 2021 and 2020, cash, temporary cash investments and
restricted cash for Con Edison and CECONY were as follows:
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CON EDISON ANNUAL REPORT 2021
(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
2021
$992
154
$1,146
2020
$1,272
164
$1,436
2021
$920
—
$920
2020
$1,067
—
$1,067
(a) Restricted cash included cash of the Clean Energy Businesses' renewable electric project subsidiaries ($154 million and $164 million at
December 31, 2021 and 2020, respectively) that, under the related project debt agreements, is restricted to being used for normal operating
expenditures, debt service, and required reserves until the various maturity dates of the project debt.
Use of Hypothetical Liquidation at Book Value
For certain investments of the Clean Energy Businesses, 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 based on the terms of the partnerships' operating agreements. See Note
S.
CON EDISON ANNUAL REPORT 2021
131
Note B – Regulatory Matters
Rate Plans
The Utilities provide service to NY customers according to the terms of tariffs approved by the NYSPSC. Tariffs for
service to customers of Rockland Electric Company (RECO), O&R’s NJ 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 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. 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’ NY 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.
Other revenue adjustments represent positive revenue adjustments, positive incentives, and earnings adjustments
mechanisms 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).
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CON EDISON ANNUAL REPORT 2021
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 and 2021, the company recorded $34
million and $64 million primarily related to
earnings adjustment mechanism incentives for
energy efficiency, respectively.
Continuation of reconciliation of actual to
authorized electric delivery revenues.
In 2020 and 2021, the company deferred for
recovery from customers $242 million and
$226 million of revenues, respectively.
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. In 2021, 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 and 2021, the company deferred $288
million and $191 million of net regulatory assets,
respectively.
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 and $3.2 million as a
regulatory liability in 2021.
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
Yr. 1 to Yr. 3 – 6.61 percent
Authorized return on common equity
9.0 percent
8.80 percent
CON EDISON ANNUAL REPORT 2021
133
Actual return on common equity (i) (j)
Earnings sharing
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.
Yr. 1 – 8.50 percent
Yr. 2 – 8.03 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 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.
In 2020 and 2021, the company had no earnings
sharing above the threshold. A reserve of $4.3
million was recorded in 2021 related to a
potential adjustment to the excess earnings
sharing amount for 2016.
Cost of long-term debt
Yr. 1 – 4.93 percent
Yr. 2 – 4.88 percent
Yr. 3 – 4.74 percent
Yr. 1 to Yr. 3 – 4.63 percent
Common equity ratio
48 percent
48 percent
(a)
(b)
(c)
(d)
(e)
(f)
(g)
(h)
(i)
(j)
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 U) are not necessary.
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.
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.
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).
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 CECONY's income tax accounting. Any NYSPSC
ordered adjustment to CECONY’s income tax accounting is expected to be refunded to or collected from customers, as determined by the
NYSPSC. See "Other Regulatory Matters," below.
Reconciliation of net utility plant for AMI will be done on a combined basis for electric and gas.
Calculated in accordance with the earnings calculation method prescribed in the rate order.
In November 2021, the NYSPSC issued an order that allowed CECONY to recover $43 million of late payment charges and fees that were
not billed for the year ended December 31, 2020. The recalculated return on equity for 2020 which reflects the recovery of these fees is
8.81 percent.
In January 2022, CECONY filed a request with the NYSPSC for an electric rate increase of $1,199 million, effective
January 2023. The filing reflects a return on common equity of 10.0 percent and a common equity ratio of 50
percent.
The company is requesting provisions pursuant to which expenses for pension and other post-retirement benefits,
long-term debt, storm restoration, property taxes, municipal infrastructure support, the impact of new laws, late
payment charges, and environmental site investigation and remediation are reconciled to amounts reflected in rates.
In addition, the company is proposing a reconciliation and current recovery or surcharge mechanism of uncollectible
write-offs to the level in rates and a reconciliation of the impacts of inflation on operation and maintenance expenses
under certain circumstances. The company is proposing the continuation of earnings opportunities from Earnings
Adjustment Mechanisms for meeting energy efficiency goals. The filing also reflects continuation of the revenue
decoupling mechanism and the provisions pursuant to which the company recovers its purchased power and fuel
costs from customers.
134
CON EDISON ANNUAL REPORT 2021
The filing includes supplemental information regarding electric rate plans for 2024 and 2025, which the company is
not requesting, but would consider through settlement discussions. For purposes of illustration, rate increases of
$853 million and $608 million effective January 2024 and 2025, respectively, were calculated based upon an
assumed return on common equity of 10.0 percent and a common equity ratio of 50 percent.
CECONY – Gas
Effective period
Base rate changes
Amortizations to income of net
regulatory (assets) and liabilities
Other revenue sources
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.
Revenue decoupling mechanisms
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.
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 and 2021, the company recorded $3
million and $26 million of earnings adjustment
mechanism incentives for energy efficiency,
respectively.
In 2020 and 2021, the company recorded positive
incentives of $13 million and $7 million,
respectively. In 2021, the company reversed $6
million of positive incentives recorded in 2020
pursuant to an order issued by the NYSPSC in
December 2021.
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 and 2021, the company deferred for
recovery from customers $27 million and
$100 million of revenues, respectively.
Recoverable energy costs
Negative revenue adjustments
Cost reconciliations
Net utility plant reconciliations
Continuation of current rate recovery of
purchased gas costs.
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 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 and 2021, 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 and 2021, the company deferred $91
million and $14 million of net regulatory assets,
respectively.
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 and 2021, the company deferred $24.7
million and $26 million as a regulatory liability,
respectively.
CON EDISON ANNUAL REPORT 2021
135
Average rate base
Weighted average cost of capital
(after-tax)
Authorized return on common equity
Actual return on common equity (i) (j)
Earnings sharing
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
9.0 percent
Yr. 1 – 9.22 percent
Yr. 2 – 9.04 percent
Yr. 3 – 8.72 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.
Yr. 1 - $7,171 million
Yr. 2 - $7,911 million
Yr. 3 - $8,622 million
Yr. 1 to Yr. 3 – 6.61 percent
8.8 percent
Yr. 1 – 8.40 percent
Yr. 2 – 8.48 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 2017, 2018 and 2019, the company had no
earnings above the threshold.
In 2020 and 2021, 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
Yr. 1 to Yr. 3 – 4.63 percent
Common equity ratio
48 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 U) 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.
(j)
In November 2021, the NYSPSC issued an order that allowed CECONY to recover $7 million of late payment charges and fees that were
not billed for the year ended December 31, 2020. The recalculated return on equity for 2020 which reflects the recovery of these fees is
8.56 percent.
In January 2022, CECONY filed a request with the NYSPSC for a gas rate increase of $503 million, effective
January 2023. The filing reflects a return on common equity of 10.0 percent and a common equity ratio of 50
percent.
The company is requesting provisions pursuant to which expenses for pension and other post-retirement benefits,
long-term debt, storm restoration, property taxes, municipal infrastructure support, the impact of new laws, late
payment charges, and environmental site investigation and remediation are reconciled to amounts reflected in rates.
In addition, the company is proposing a reconciliation and current recovery or surcharge mechanism of uncollectible
write-offs to the level in rates and a reconciliation of the impacts of inflation on operation and maintenance expenses
under certain circumstances. The company is proposing the continuation of earnings opportunities from Earnings
Adjustment Mechanisms for meeting energy efficiency goals. The filing also reflects continuation of the revenue
decoupling mechanism and the provisions pursuant to which the company recovers its purchased power and fuel
costs from customers. The filed gas revenue requirement includes additional depreciation expense of $48 million.
Included in this increase is the impact of the company’s proposal to decrease the service lives for the longer-lived
gas accounts by five years.
The filing includes supplemental information regarding gas rate plans for 2024 and 2025, which the company is not
requesting, but would consider through settlement discussions. For purposes of illustration, rate increases of
$234 million and $218 million effective January 2024 and 2025, respectively, were calculated based upon an
assumed return on common equity of 10.0 percent and a common equity ratio of 50 percent.
136
CON EDISON ANNUAL REPORT 2021
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)(d)
Net utility plant reconciliations
Average rate base
Weighted average cost of capital
(after-tax)
Authorized return on common equity
Actual return on common equity (e)
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
Yr. 8 – 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 2021, the company did not
record any negative revenue adjustments.
In 2014, 2015, 2016, 2017, 2018, 2019, 2020 and
2021, 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, $35
million of net regulatory assets and $32 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 and by
$0.6 million in 2021.
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
Yr. 8 – 5.99 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 and 2021, the
company had no earnings sharing above the
threshold. Reserve adjustments of $0.4 million
and $0.2 million were recorded in 2021 related to
potential adjustment to the excess earnings
sharing amounts for 2016 and 2018, respectively.
CON EDISON ANNUAL REPORT 2021
137
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)
(b)
(c)
(d)
(e)
Rates determined pursuant to this rate plan continue in effect until a new rate plan is approved by the NYSPSC.
The impact of these base rate changes was deferred which resulted in an $8 million regulatory liability at December 31, 2016.
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.
In addition, the NYSPSC staff has commenced a focused operations audit to investigate CECONY’s income tax accounting. Any
NYSPSC ordered adjustment to CECONY’s income tax accounting is expected to be refunded to or collected from customers, as
determined by the NYSPSC. CECONY’s historical inadvertent understatement of its calculation of total federal income tax expense for
ratemaking purposes has not been addressed in the current steam rate plan. See "Other Regulatory Matters," below.
Calculated in accordance with the earnings calculation method prescribed in the rate order.
138
CON EDISON ANNUAL REPORT 2021
In October 2021, O&R, the New York State Department of Public Service (NYSDPS) and other parties entered into
a Joint Proposal for new electric and gas rate plans for the three-year period January 2022 through December 2024
(the Joint Proposal). The Joint Proposal is subject to NYSPSC approval. The Joint Proposal includes certain
COVID-19 provisions, such as: recovery of 2020 late payment charges over three years ($2.8 million); reconciliation
of late payment charges to amounts reflected in rates for years 2021 through 2024, with full recovery/refund via
surcharge/sur-credit once the annual variance equals or exceeds 5 basis points of return on equity; and
reconciliation of write-offs of customer accounts receivable balances to amounts reflected in rates from January 1,
2020 through December 31, 2024, with full recovery/refund via surcharge/sur-credit once the annual variance
equals or exceeds 5 basis points of return on equity. The following tables contain a summary of the current and
proposed rate plans.
O&R New York – Electric
Effective period (a)
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
January 2019 – December 2021
January 2022 – December 2024
Yr. 1 – $13.4 million (b)
Yr. 2 – $8.0 million (b)
Yr. 3 – $5.8 million (b)
Yr. 1 – $(1.5) million (c)
Yr. 2 – $(1.5) million (c)
Yr. 3 – $(1.5) million (c)
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, 2020 and 2021, the company recorded
$2.6 million, $1.9 million and $1.8 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. In 2021, the company did not record
incentives for customer service. In 2021, the
company reversed the $0.5 million of incentives
recorded in 2020 pursuant to the October 2021
Joint Proposal.
Continuation of reconciliation of actual to
authorized electric delivery revenues.
In 2019 and 2020, the company deferred $0.1
million and $6 million regulatory assets,
respectively. In 2021, $10 million was deferred as
regulatory liabilities.
Continuation of current rate recovery of
purchased power costs.
Yr. 1 – $4.9 million (i)
Yr. 2 – $16.2 million (i)
Yr. 3 – $23.1 million (i)
Yr. 1 – $11.8 million (j)
Yr. 2 – $13.5 million (j)
Yr. 3 – $15.2 million (j)
Potential earnings adjustment mechanism
incentives for energy efficiency and other potential
incentives of up to:
Yr. 1 – $3.3 million
Yr. 2 – $2.3 million
Yr. 3 – $4.0 million
Continuation of reconciliation of actual to
authorized electric delivery revenues.
Continuation of current rate recovery of
purchased power and fuel 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
Potential charges if certain performance targets
relating to service, reliability, safety and other
matters are not met:
Yr. 1 – $4.3 million
Yr. 2 – $4.4 million
Yr. 3 – $5.1 million
In 2019,2020 and 2021, the company did not
record any negative revenue adjustments.
Reconciliation of expenses for pension and other
postretirement benefits, environmental
remediation costs, property taxes (d), energy
efficiency program (e), major storms, the impact
of new laws and certain other costs to amounts
reflected in rates (f).
In 2019, 2020 and 2021, the company deferred
$4.3 million, $30.3 million and $24 million as net
regulatory assets, respectively.
Reconciliation of expenses for pension and other
postretirement benefits, environmental
remediation costs, property taxes (d), energy
efficiency program (k), major storms, and certain
other costs to amounts reflected in rates.
CON EDISON ANNUAL REPORT 2021
139
Net utility plant reconciliations
Average rate base
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 (g):
Yr. 1 - $48 million
Yr. 2 - $58 million
Yr. 3 - $61 million
The company increased regulatory asset by an
immaterial amount in 2019, $0.4 million as a
regulatory liability in 2020 and an immaterial
amount as a regulatory liability in 2021.
Yr. 1 – $878 million
Yr. 2 – $906 million
Yr. 3 – $948 million
Weighted average cost of capital
(after-tax)
Yr. 1 – 6.97 percent
Yr. 2 – 6.96 percent
Yr. 3 – 6.96 percent
Authorized return on common equity
9.0 percent
Actual return on common equity (h)
Earnings sharing
Yr. 1 – 9.6 percent
Yr. 2 – 8.76 percent
Yr. 3 – 9.16 percent
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, 2020 and 2021, earnings did not exceed
the earnings threshold.
Target levels reflected in rates: Electric average
net plant target
Yr. 1 – $1,175 million
Yr. 2 – $1,198 million
Yr. 3 – $1,304 million
Yr. 1 – $1,021 million
Yr. 2 – $1,044 million
Yr. 3 – $1,144 million
Yr. 1 – 6.77 percent
Yr. 2 – 6.73 percent
Yr. 3 – 6.72 percent
9.2 percent
Most earnings above an annual earnings
threshold of 9.7 percent are to be applied to
reduce regulatory assets for environmental
remediation and other costs accumulated in the
rate year.
Cost of long-term debt
Yr. 1 – 5.17 percent
Yr. 2 – 5.14 percent
Yr. 3 – 5.14 percent
Common equity ratio
48 percent
Yr. 1 – 4.58 percent
Yr. 2 – 4.51 percent
Yr. 3 – 4.49 percent
48 percent
(a)
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 U) are not necessary.
(b) The electric base rate increases were implemented with increases of: Yr. 1 - $8.6 million; Yr. 2 - $12.1 million; and Yr. 3 - $12.2 million.
(c) 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.
(d) Deferrals for property taxes are limited to 90 percent of the difference from amounts reflected in rates, subject to an annual maximum for the
remaining difference of not more than a maximum number of basis points impact on return on common equity: Yr. 1 - 10.0 basis points; Yr. 2
- 7.5 basis points; and Yr. 3 - 5.0 basis points.
(e) Energy efficiency costs are expensed as incurred. Such costs are subject to a downward-only reconciliation over the terms of the electric
(f)
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, the NYSPSC staff has commenced a focused operations audit to investigate O&R’s income tax accounting. Any NYSPSC
ordered adjustment to O&R’s income tax accounting is expected to be refunded to or collected from customers, as determined by the
NYSPSC. See "Other Regulatory Matters," below.
(g) 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.
(h) Calculated in accordance with the earnings calculation method prescribed in the rate order.
(i)
The Joint Proposal recommends that these base rate changes may be implemented with increases of: Yr. 1 - $11.7 million; Yr. 2 -
$11.7 million; and Yr. 3 - $11.7 million.
(j) Reflects amortization of, among other things, previously incurred incremental deferred storm costs over a five-year period. See "Other
Regulatory Matters," below
(k) Energy efficiency costs are expensed as incurred. Such costs are subject to a cumulative reconciliation that is evenly distributed over the
term of the rate plan subject to the caps set forth in the January 2020 NYSPSC New Efficiency New York (“NENY”) order. If the NYSPSC
modifies O&R's NENY budgets during the rate term, such modifications will be reflected at the time of the cumulative reconciliations.
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O&R New York – Gas
Effective period (a)
Base rate changes
Amortization to income of net regulatory
(assets) and liabilities
Other revenue sources
January 2019 – December 2021
January 2022 – December 2024
Yr. 1 – $(7.5) million (b)
Yr. 2 – $3.6 million (b)
Yr. 3 – $0.7 million (b)
Yr. 1 – $0.7 million (i)
Yr. 2 – $7.4 million (i)
Yr. 3 – $9.9 million (i)
Yr. 1 – $0.8 million
Yr. 2 – $0.7 million
Yr. 3 – $0.3 million
Potential earnings adjustment mechanism
incentives for energy efficiency and other
potential incentives of up to:
Yr. 1 - $0.2 million
Yr. 2 - $0.2 million
Yr. 3 - $0.4 million
Potential positive rate adjustment for gas
safety and performance of up to:
Yr. 1 – $1.2 million
Yr. 2 – $1.3 million
Yr. 3 – $1.4 million
Yr. 1 – $1.8 million (c)
Yr. 2 – $1.8 million (c)
Yr. 3 – $1.8 million (c)
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, 2020 and 2021, the company recorded
$0.5 million of earnings adjustment mechanism
incentives for energy efficiency. In 2019, 2020
and 2021, the company recorded $0.7 million,
$0.3 million and $0.2 million of positive
incentives, respectively. In 2021, the company
reversed $0.3 million of positive incentives
recorded in 2020 pursuant to the October 2021
Joint Proposal.
Revenue decoupling mechanisms
Continuation of reconciliation of actual to
authorized gas delivery revenues.
Continuation of reconciliation of actual to
authorized gas delivery revenues.
Recoverable energy costs
Negative revenue adjustments
Cost reconciliations
Net utility plant reconciliations
In 2019 and 2020, the company deferred $0.8
million and $0.5 million as regulatory assets,
respectively. In 2021, $4 million was deferred as
a regulatory liability.
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, the company recorded a $0.2 million. In
2020 and 2021, the company recorded an
immaterial amount of negative revenue
adjustments.
Reconciliation of expenses for pension and other
postretirement benefits, environmental
remediation costs, property taxes (d), energy
efficiency program (e), the impact of new laws
and certain other costs to amounts reflected in
rates (f).
In 2019 and 2020, the company deferred $6
million as net regulatory liabilities, $1.8 million as
net regulatory assets, respectively. In 2021
$8 million were deferred as regulatory assets.
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 (g):
Yr. 1 - $20 million
Yr. 2 - $24 million
Yr. 3 - $25 million
In 2019, 2020 and 2021, the company deferred
immaterial amounts as regulatory assets.
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 – $6.3 million
Yr. 2 – $6.7 million
Yr. 3 – $7.3 million
Reconciliation of expenses for pension and
other postretirement benefits,
environmental remediation costs, property
taxes (j), energy efficiency program (k),
major storms and certain other costs to
amounts reflected in rates.
Target levels reflected in rates: Gas
average net plant target
Yr. 1 – $720 million
Yr. 2 – $761 million
Yr. 3 – $803 million
Average rate base
Yr. 1 – $454 million
Yr. 2 – $476 million
Yr. 3 – $498 million
Yr. 1 – $566 million
Yr. 2 – $607 million
Yr. 3 – $649 million
CON EDISON ANNUAL REPORT 2021
141
Weighted average cost of capital (after-
tax)
Authorized return on common equity
Actual return on common equity (h)
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
Yr. 3 – 10.11 percent
Yr. 1 – 6.77 percent
Yr. 2 – 6.73 percent
Yr. 3 – 6.72 percent
9.2 percent
Earnings sharing
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. In 2021, actual
earnings were $1.7 million above the threshold.
Most earnings above an annual earnings
threshold of 9.7 percent are to be applied
to reduce regulatory assets for
environmental remediation and other costs
accumulated in the rate year.
Cost of long-term debt
Yr. 1 – 5.17 percent
Yr. 2 – 5.14 percent
Yr. 3 – 5.14 percent
Common equity ratio
0.48
Yr. 1 – 4.58 percent
Yr. 2 – 4.51 percent
Yr. 3 – 4.49 percent
48 percent
(a)
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 U) are not
necessary.
The gas base rate changes were implemented with changes of: Yr. 1 - $(5.9) million; Yr. 2 - $1.0 million; and Yr. 3 - $1.0 million.
(b)
(c)-(h) See footnotes (c) - (h) to the table under “O&R New York - Electric,” above.
(i) The Joint Proposal recommends that these base rate changes may be implemented with increases of: Yr. 1 – $4.4 million; Yr. 2 -
$4.4 million; and Yr. 3 - $4.4 million.
(j) 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.
See footnote (l) to the table under "O&R New York - Electric," above.
(k)
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CON EDISON ANNUAL REPORT 2021
$0.2 million over three years
and $9.2 million of deferred
storm costs over a three-year
period (excluding $2.4 million
of costs for Tropical Storm
Henri which will be deferred
over a three year period in
base rates) and continuation of
$10 million over 3 years
Recovery of RECO’s
COVID-19 related
expenditures will be addressed
Current rate recovery of
purchased power costs.
Reconciliation of uncollectible
accounts, Demand Side
Management and Clean
Energy Program.
$262.8 million
7.08 percent
9.6 percent
4.74 percent
48.51 percent
Rockland Electric Company (RECO)
In December 2021, the NJBPU approved an electric rate increase, effective January 1, 2022, of $9.65 million for
RECO. The following table contains a summary of the terms of the distribution rate plans.
RECO
Effective period
Base rate changes
Amortization to income of net
regulatory (assets) and liabilities
COVID-19 costs
March 2017 – January 2020
February 2020 – December 2021
January 2022
$1.7 million
$12 million
$9.65 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)
$4.8 million over four years.
Recoverable energy costs
Current rate recovery of
purchased power costs.
Current rate recovery of
purchased power costs.
Cost reconciliations
None
None
Average rate base
Weighted average cost of capital
(after-tax)
$178.7 million
7.47 percent
Authorized return on common equity 9.6 percent
Actual return on common equity
Yr. 1 – 7.5 percent
Yr. 2 – 5.7 percent
Cost of long-term debt
Common equity ratio
5.37 percent
49.7 percent
$229.9 million
7.11 percent
9.5 percent
Yr. 1 – 5.4 percent
Yr. 2 – 2.3 percent
4.88 percent
48.32 percent
(a)
against storms, the costs of which RECO, beginning in 2017, is collecting through a customer surcharge.
In January 2016, the NJBPU approved RECO’s plan to spend $15.7 million in capital over three years to harden its electric system
In January 2022, RECO filed a request with FERC for an increase to its annual transmission revenue requirement
from $16.9 million to $20.4 million, effective March 30, 2022. The filing reflects a return on common equity of 11.04
percent and a common equity ratio of 47 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, former 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 temporarily
closed all non-essential businesses statewide. The former Governor then lifted these closures over time and ended
the emergency declaration in June 2021. As a result of the emergency declaration, and due to economic conditions,
the NYSPSC and the Utilities have worked to mitigate the potential impact of the COVID-19 pandemic on the
Utilities, their customers and other stakeholders.
CON EDISON ANNUAL REPORT 2021
143
In March 2020, the Utilities began suspending service disconnections, certain collection notices, final bill collection
agency activity, new late payment charges and certain other fees for all customers. The Utilities also began
providing payment extensions for all customers that were scheduled to be disconnected prior to the start of the
COVID-19 pandemic. In June 2020, the state of NY enacted a law prohibiting NY utilities, including CECONY and
O&R, from disconnecting residential customers, and starting in May 2021 small business customers, during the
COVID-19 state of emergency, which ended in June 2021. In addition, such prohibitions applied for an additional
180 days after the state of emergency ended (December 21, 2021) for residential and small business customers
who experienced a change in financial circumstances due to the COVID-19 pandemic. In November 2021, the
NYSPSC issued an order establishing a surcharge recovery mechanism for CECONY to collect, commencing
December 1, 2021 through December 31, 2022, $43 million and $7 million for electric and gas, respectively, of late
payment charges and fees that were not billed for the year ended December 31, 2020. The company recorded such
amounts as revenue for the year ended December 31, 2021, as permitted under the accounting rules for regulated
utilities, and also accrued such amounts as a current asset at December 31, 2021. Pursuant to the November 2021
order, the company also established a recovery mechanism for CECONY to collect, commencing January 2023
through December 2023, $19 million and $4 million for electric and gas, respectively, of late payment charges and
fees that were not billed for the year ended December 31, 2021 and the company recorded such amounts as
revenue for the year ended December 31, 2021, as permitted under the accounting rules for regulated utilities, and
also accrued such amounts as a current asset at December 31, 2021. In addition, pursuant to the November 2021
order, CECONY established a reserve of $7 million toward addressing customer arrearages for the year ended
December 31, 2021. The order also established a surcharge recovery or surcredit mechanism for any late payment
charges and fee deferrals, subject to offsetting related savings resulting from the COVID-19 pandemic, for 2022
starting in January of 2024 over a twelve-month period. CECONY resumed late payment charges for commercial
and residential customers who have not experienced a change in financial circumstances due to the COVID-19
pandemic on September 3, 2021 and October 1, 2021, respectively. O&R resumed late payment charges for
commercial and residential customers who have not experienced a change in financial circumstances due to the
COVID-19 pandemic on October 1, 2021.
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.
The total reserve increases to the allowance for uncollectible accounts from January 1, 2020 through December 31,
2021 reflecting the impact of the COVID-19 pandemic for CECONY electric and gas operations and O&R electric
and gas operations were $239 million and $7 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, that have since been lifted, as described above. The Utilities’ NY 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 which differences were
$8 million and $3 million for CECONY and O&R, respectively, from March 1, 2020 through December 31, 2021.
In June 2020, the NYSPSC directed CECONY to implement a summer cooling credit program to help mitigate the
cost of staying home and operating air conditioning for health-vulnerable low-income customers due to the limited
availability of public cooling facilities as a result of the COVID-19 social distancing measures. The $63.4 million cost
of the program is being recovered over a five-year period that began January 2021.
As of December 31, 2020, CECONY deferred, for New York City residential customers, $54.9 million of higher
summer generation capacity supply costs. CECONY recovered such costs from customers as of October 31, 2021.
In April 2021, New York State passed a law that creates a program that allows eligible residential renters in New
York State who require assistance with rent and utility bills to have up to twelve months of electric and gas utility bill
arrears forgiven, provided that such arrears were accrued on or after March 13, 2020. The program will be
administered by the State Office of Temporary Disability Assistance in coordination with the NYSDPS. Under the
program, CECONY and O&R would qualify for a refundable tax credit for New York State gross-receipts tax equal to
the amount of arrears waived by the Utilities in the year that the arrears are waived and certified by the NYSPSC.
In May 2021, CECONY and O&R, along with other large NY utilities, submitted joint comments to the NYSDPS'
February 2021 report on New York State’s Energy Affordability Policy. The report recommends, among other things,
that residential and commercial customers’ late payment fees and interest on deferred payment agreements be
waived until two years after the expiration of the NY State moratorium on utility terminations (the moratorium expired
on December 21, 2021) and each utility develop an arrears management program to mitigate the financial burdens
of the COVID-19 pandemic on NY households and that program costs be shared, perhaps equally, between
shareholders and customers. The May 2021 joint comments stated that it is not necessary for the NYSPSC to adopt
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CON EDISON ANNUAL REPORT 2021
the report’s COVID-19 related recommendations because NY State already passed laws that address the issues in
the report, as described above.
The Utilities’ rate plans have revenue decoupling mechanisms in their NY electric and gas businesses that largely
reconcile actual energy delivery revenues to the authorized delivery revenues approved by the NYSPSC per month
and reconcile the deferred balances semi-annually under CECONY's electric rate plan (January through June and
July through December, respectively) and annually under CECONY's gas rate plan and O&R's NY electric and gas
rate plans (January through December). Differences are accrued with interest each month for CECONY's and
O&R's NY electric customers and after the annual deferral period ends for CECONY's and O&R's NY gas
customers for refund to, or recovery from customers, as applicable. Generally, the refund to or recovery from
customers begins August and February of each year over an ensuing six-month period for CECONY's electric
customers and February of each year over an ensuing twelve-month period for CECONY's gas and O&R's NY
electric and gas customers.
New Jersey State Regulation
In March 2020, New Jersey Governor Murphy declared a Public Health Emergency and State of Emergency for the
State of NJ. In June 2021, the Governor ended the emergency declaration. As a result of the emergency
declaration, and due to economic conditions, the NJBPU and RECO have worked to mitigate the potential impact of
the COVID-19 pandemic on RECO, its customers and other stakeholders. In March 2020, RECO began suspending
late payment charges, terminations for non-payment, and no access fees during the COVID-19 pandemic. The
suspension of these fees continued through July 31, 2021 and are not material.
In July 2020, the NJBPU authorized RECO and other NJ utilities to create a COVID-19-related regulatory asset by
deferring prudently incurred incremental costs related to the COVID-19 pandemic beginning on March 9, 2020, and
has extended such deferrals through December 31, 2022. RECO deferred net incremental COVID-19 related costs
of $0.9 million through December 31, 2021.
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 IRS “protected”
portion of its net regulatory liability for future income taxes related to certain accelerated tax depreciation benefits
allocable to its electric customers ($1,663 million) over the remaining lives of the related assets and the remainder,
or “unprotected” portion of the net regulatory liability allocable to its electric customers ($784 million) over a five-year
period. CECONY, under its gas rate plan that was approved in January 2020, amortized TCJA net benefits prior to
January 1, 2019 allocable to its gas customers ($63 million) over a two-year period. The protected portion of its net
regulatory liability for future income taxes allocable to its gas customers ($725 million) is being amortized over the
remaining lives of the related assets and the unprotected portion of the net regulatory liability allocable to its gas
customers ($107 million) over a five-year period.
CECONY’s net regulatory liability for future income taxes, including both the protected and unprotected portions,
allocable to the company’s steam customers ($185 million) is being amortized over the remaining lives of the related
assets (with the amortization period for the unprotected portion subject to review in its next steam rate proceeding).
O&R, under its current electric and gas rate plans, has reflected its TCJA net benefits in its electric and gas rates
beginning as of January 1, 2019. Under the rate plans, O&R amortized its net benefits prior to January 1, 2019 ($22
million) over a three-year period. The protected portion of its net regulatory liability for future income taxes ($123
million) is being amortized over the remaining lives of the related assets. See "Rate Plans" above. Pursuant to the
October 2021 Joint Proposal, O&R will amortize the remaining unprotected portion of its net regulatory liability for
future income taxes ($34 million) over a six-year period beginning January 1, 2022.
In January 2018, the NYSPSC issued an order initiating a focused operations audit of the Utilities’ financial
accounting for income taxes. The audit is investigating the Utilities’ inadvertent understatement of a portion, the
amount of which may be material, of their calculation of total federal income tax expense for ratemaking purposes.
The understatement was related to the calculation of plant retirement-related cost of removal. As a result of such
CON EDISON ANNUAL REPORT 2021
145
understatement, the Utilities accumulated significant income tax regulatory assets that were not reflected in O&R’s
rate plans prior to 2014, CECONY’s electric and gas rate plans prior to 2015 and 2016, respectively, and is currently
not reflected in CECONY’s steam rate plan. This understatement of historical income tax expense materially
reduced the amount of revenue collected from the Utilities' customers in the past. As part of the audit, the Utilities
plan to pursue a private letter ruling from the Internal Revenue Service (IRS) that is expected to confirm, among
other things, that in order to comply with IRS normalization rules, such understatement may not be corrected
through a write-down of a portion of the regulatory asset and must be corrected through an increase in future years’
revenue requirements. The regulatory asset ($1,176 million and $26 million for CECONY and O&R, respectively, as
of December 31, 2021 and $1,200 million and $29 million for CECONY and O&R, respectively, as of December 31,
2020) is netted against the future income tax regulatory liability on the Companies’ consolidated balance sheet. The
Utilities are unable to estimate the amount or range of their possible loss, if any, related to this matter. At
December 31, 2021, the Utilities have not accrued a liability related to this matter.
In October 2020, the NYSPSC issued an order instituting a proceeding to consider requiring NY’s large, investor-
owned utilities, including CECONY and O&R, to annually disclose what risks climate change poses to their
companies, investors and customers going forward. The order notes that some holding companies, including Con
Edison, already disclose climate change risks at the holding company level, but states that the NYSPSC believes
that climate-related risk disclosures should be issued specific to the operating companies in NY, such as CECONY
and O&R, and that such climate-related risk disclosures should be included annually with the utilities’ financial
reports. In December 2020, CECONY and O&R, along with other large NY utilities, filed comments supporting
climate change risk disclosures in annual reports filed with the NYSPSC and recommended the use of an industry-
specific template.
In May 2020, the president of the United States issued the "Securing the United States Bulk-Power System"
executive order, which has since expired. The executive order declared 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. In April 2021 and November
2021, the Department of Energy (DOE) issued requests for information to: (1) assist the DOE in developing
additional orders and/or regulations to secure the United States’ critical electric infrastructure and (2) enable the
DOE to perform an energy sector supply chain review. In September 2021, the Cybersecurity and Infrastructure
Security Agency and the National Institute of Standards and Technology issued preliminary cybersecurity goals for
critical infrastructure control systems, with final goals to be issued by September 2022. The Companies are unable
to predict the impact on them of any orders or regulations that may be adopted regarding critical infrastructure.
In July 2021, the NYSPSC approved a settlement agreement among CECONY, O&R and the NYSDPS that fully
resolves all issues and allegations that have been raised or could have been raised by the NYSPSC against
CECONY and O&R with respect to: (1) the July 2018 rupture of a CECONY steam main located on Fifth Avenue
and 21st Street in Manhattan (the “2018 Steam Incident”); (2) the July 2019 electric service interruptions to
approximately 72,000 CECONY customers on the west side of Manhattan and to approximately 30,000 CECONY
customers primarily in the Flatbush area of Brooklyn (the “2019 Manhattan and Brooklyn Outages”); (3) the August
2020 electric service interruptions to approximately 330,000 CECONY customers and approximately 200,000 O&R
customers following Tropical Storm Isaias (the “Tropical Storm Isaias Outages”) and (4) the August 2020 electric
service interruptions to approximately 190,000 customers resulting from faults at CECONY’s Rainey substation
following Tropical Storm Isaias (the “Rainey Outages”). Pursuant to the settlement agreement, CECONY and O&R
agreed to a total settlement amount of $75.1 million and $7.0 million, respectively. CECONY and O&R agreed to
forgo recovery from customers of $25 million and $2.5 million, respectively, associated with the return on existing
storm hardening assets beginning with the next rate plan for each utility (over a period of 35 years). CECONY and
O&R also agreed to incur ongoing operations and maintenance costs of up to $15.8 million and $2.9 million,
respectively, for, among other things, costs to maintain a certain level of contractor and vehicle storm emergency
support and storm preparation audits. For CECONY, the settlement agreement includes previously incurred or
accrued costs of $34.3 million, including negative revenue adjustments of $5 million for the Rainey Outages and
$15 million for the 2019 Manhattan and Brooklyn Outages and $14.3 million in costs to reimburse customers for
food and medicine spoilage and other previously incurred expenses related to Tropical Storm Isaias and the 2018
Steam Incident. For O&R, the settlement agreement includes previously incurred costs of $1.6 million to reimburse
customers for food and medicine spoilage and other expenses related to the Tropical Storm Isaias Outages.
Additional information relating to the 2018 Steam Incident, 2019 Manhattan and Brooklyn Outages and Tropical
Storm Isaias Outages follow.
2018 Steam Incident: 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.
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CON EDISON ANNUAL REPORT 2021
As of June 30, 2021, 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. As described above, in July
2021, CECONY entered into a settlement agreement that fully resolves all issues and allegations with respect to
this matter.
2019 Manhattan and Brooklyn Outages: 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. As described above, in July 2021, CECONY entered into
a settlement agreement that fully resolves all issues and allegations with respect to this matter.
Tropical Storm Isaias Outages: 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, 2021, CECONY incurred costs for Tropical
Storm Isaias of $174 million (including $84 million of operation and maintenance expenses charged against a storm
reserve pursuant to its electric rate plan, $64 million of capital investments and $26 million (including $7.5 million for
food and medicine spoilage claims) of operation and maintenance expenses). As of December 31, 2021, O&R
incurred costs for Tropical Storm Isaias of $26.5 million (including $19.2 million of operation and maintenance
expenses charged against a storm reserve pursuant to its NY electric rate plan, $5.7 million of capital investments
and $1.6 million for food and medicine spoilage claims). As of December 31, 2021, RECO incurred costs for
Tropical Storm Isaias of $11.4 million (including $7.6 million of operation and maintenance expenses charged
against a storm reserve pursuant to its rate plan, $2.5 million of capital investments and $1.3 million for food and
medicine spoilage claims). The Utilities’ electric rate plans provide for recovery of operating costs and capital
investments 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 investments, up to specified
levels, are reflected in rates under their electric rate plans. The provisions of the Utilities’ NY electric rate plans that
impose negative revenue adjustments for operating performance provide for exceptions for major storms and
catastrophic events beyond the control of the companies, including natural disasters such as hurricanes and floods.
In November 2020, the NYSPSC issued an order in its proceedings investigating the NY 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 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
CON EDISON ANNUAL REPORT 2021
147
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. As described above, in July 2021, CECONY and O&R entered into a settlement
agreement that fully resolves all issues and allegations with respect to this matter.
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CON EDISON ANNUAL REPORT 2021
Regulatory Assets and Liabilities
Regulatory assets and liabilities at December 31, 2021 and 2020 were comprised of the following items:
Con Edison
CECONY
(Millions of Dollars)
Regulatory assets
Unrecognized pension and other postretirement costs
Environmental remediation costs
Pension and other postretirement benefits deferrals
Revenue taxes
System peak reduction and energy efficiency programs
COVID - 19 Deferrals
Deferred storm costs
Property tax reconciliation
MTA power reliability deferral
Deferred derivative losses
Municipal infrastructure support costs
Brooklyn Queens demand management program
Meadowlands heater odorization project
Non-wire alternative projects
Preferred stock redemption
Unamortized loss on reacquired debt
Recoverable REV demonstration project costs
Gate station upgrade project
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
Net unbilled revenue deferrals
TCJA net benefits
Net proceeds from sale of property
Pension and other postretirement benefit deferrals
System benefit charge carrying charge
Deferred derivative gains - long term
Property tax refunds
Unrecognized other postretirement costs
BQDM and REV Demo reconciliations
Sales and use tax refunds
Energy efficiency portfolio standard unencumbered funds
Earnings sharing - electric, gas and steam
Settlement of gas proceedings
Workers’ compensation
Settlement of prudence proceeding
Other
Regulatory liabilities – noncurrent
Refundable energy costs
Deferred derivative gains
Revenue decoupling mechanism
Regulatory liabilities—current
Total Regulatory Liabilities
2021
$128
938
496
395
285
282
276
202
140
51
44
36
29
23
20
16
16
14
248
3,639
141
65
206
$3,845
$1,984
1,199
209
125
103
102
70
61
35
32
25
17
15
13
12
8
6
365
4,381
32
142
11
185
2020
$3,241
865
315
356
124
115
195
241
188
120
62
36
32
18
21
21
20
25
200
6,195
190
76
266
$6,461
$2,207
1,090
198
295
137
85
64
5
36
11
27
16
1
15
21
3
5
297
4,513
28
8
—
36
2021
$110
860
435
378
284
277
158
202
140
45
44
36
29
23
20
14
15
14
232
3,316
133
55
188
$3,504
$1,840
1,033
209
123
103
55
63
55
35
—
22
16
19
10
12
8
6
312
3,921
2
132
—
134
2020
$3,065
791
272
342
124
113
83
239
188
111
62
36
32
18
21
19
18
25
186
5,745
177
67
244
$5,989
$2,062
932
198
286
137
46
57
4
35
—
25
16
—
10
21
3
5
257
4,094
4
7
—
11
$4,566
$4,549
$4,055
$4,105
* 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 2021
149
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 investments, in connection with
Tropical Storm Isaias 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.
Property tax reconciliation represents the amount deferred between actual property taxes incurred and the level
included in rates subject to the provisions of the respective rate plans.
System Peak Reduction and Energy Efficiency Programs represent programs designed to increase energy
efficiency achievements through a combination of responding to locational needs, bundling offerings, leveraging
market-based approaches through market solicitations, time-variant pricing and other market transformation efforts.
Allowance for cost of removal less salvage represents cash previously collected from customers to fund future
anticipated removal expenditures
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 $209
million and $198 million at December 31, 2021 and 2020, 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. The Other Customer-Provided Capital rate for the years ended
December 31, 2021 and 2020 was 1.80 percent and 2.65 percent, respectively.
In general, the Utilities are receiving or being credited with a return on their regulatory assets for which a cash
outflow has been made ($1,962 million and $1,639 million for Con Edison, and $1,751 million and $1,454 million for
CECONY at December 31, 2021 and 2020, respectively). Regulatory assets of RECO for which a cash outflow has
been made ($25 million and $31 million at December 31, 2021 and 2020, respectively) are not receiving or being
credited with a return. RECO recovers regulatory assets over a period of up to four years or until they are
addressed in its next base rate case in accordance with the rate provisions approved by the New Jersey Board of
Public Utilities. Regulatory liabilities are treated in a consistent manner.
Regulatory assets that represent future financial obligations and were deferred in accordance with the Utilities’ rate
plans or orders issued by state regulators do not earn a return until such time as a cash outlay has been made.
Regulatory liabilities are treated in a consistent manner. At December 31, 2021 and 2020, 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 2021
Regulatory Assets Not Earning a Return*
(Millions of Dollars)
Unrecognized pension and other postretirement costs
Environmental remediation costs
Revenue taxes
Deferred derivative losses - long term
COVID-19 Deferral for Uncollectible Accounts Receivable
Other
Deferred derivative losses - current
Total
Con Edison
CECONY
2021
$128
928
375
51
236
24
141
$1,883
2020
$3,241
855
336
120
57
24
190
$4,823
2021
$110
850
359
45
231
24
134
$1,753
2020
$3,065
781
323
111
55
24
177
$4,536
*This table presents regulatory assets not earning a return for which no cash outlay has been made.
The recovery periods for regulatory assets for which a cash outflow has not been made and that do not earn a
return have not yet been determined, except as noted below, and are expected to be determined pursuant to the
Utilities’ future rate plans to be filed or orders issued by the state regulators in connection therewith.
The Utilities recover unrecognized pension and other postretirement costs over 10 years, and the portion of
investment gains or losses recognized in expense over 15 years, pursuant to NYSPSC policy.
The deferral for revenue taxes represents the New York State metropolitan transportation business tax surcharge on
the cumulative temporary differences between the book and tax basis of assets and liabilities of the Utilities, as well
as the difference between taxes collected and paid by the Utilities to fund mass transportation. The Utilities recover
the majority of the revenue taxes over the remaining book lives of the electric and gas plant assets, as well as the
steam plant assets for CECONY.
The Utilities recover deferred derivative losses – current within one year, and noncurrent generally within three
years.
CON EDISON ANNUAL REPORT 2021
151
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, 2021 and 2020, 353,983,712 and 342,297,534 shares,
respectively, of Con Edison common stock were outstanding. At December 31, 2021 and 2020, 235,488,094 million
shares of CECONY common stock were outstanding, all of which were owned by Con Edison. At December 31,
2021 and 2020, 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 June 2021, Con Edison issued 10,100,000 shares of its common stock resulting in net proceeds of approximately
$775 million, after issuance expenses.
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 U. 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 2022-2026 is as follows:
(Millions of Dollars)
Con Edison
CECONY
2022
2023
2024
2025
2026
$440
969
393
319
385
$—
—
250
—
250
CECONY has issued $450 million of tax–exempt debt through the New York State Energy Research and
Development Authority (NYSERDA) that currently bears 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, 2021 and 2020 are:
(Millions of Dollars)
2021
2020
Long-Term Debt (including current portion) (a)
Con Edison
CECONY
Carrying
Amount
$23,044
$18,382
Fair
Value
$26,287
$21,382
Carrying
Amount
$22,349
$16,789
Fair
Value
$26,808
$20,974
(a) Amounts shown are net of unamortized debt expense and unamortized debt discount of $226 million and $193 million for Con Edison and
CECONY, respectively, as of December 31, 2021 and $215 million and $176 million for Con Edison and CECONY, respectively, as of
December 31, 2020.
The fair values of the Companies' long-term debt have been estimated primarily using available market information
and at December 31, 2021 are classified as Level 2 (see Note R).
152
CON EDISON ANNUAL REPORT 2021
Significant Debt Covenants
The significant debt covenants under the financing arrangements for the Companies' debentures and Con Edison's
notes 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, Con Edison’s notes include covenants that the
company shall continue its utility business in New York City and shall not permit its ratio of consolidated debt to
consolidated total capital to exceed 0.675 to 1 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, excluding non-recourse debt, of the company or any of its material
subsidiaries 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, not including non-recourse debt, of the company or any of its
material subsidiaries 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, 2021.
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, 2021, Con Edison had
$1,488 million of commercial paper outstanding, of which $1,361 million was outstanding under CECONY’s
program. The weighted average interest rate at December 31, 2021 was 0.3 percent for both Con Edison and
CECONY. 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, 2021 and 2020, 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, 2021 and 2020.
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, 2021 this ratio was 0.52 to 1 for Con Edison and 0.55 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
CON EDISON ANNUAL REPORT 2021
153
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 significant debt covenants at December 31, 2021.
See Note U 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 2021, 2020 and 2019 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
2021
$343
471
2020
$293
549
(1,096)
(1,034)
787
(17)
$488
(154)
(226)
$108
699
(16)
$491
(130)
(250)
$111
2019
$250
601
(988)
518
(17)
$364
(108)
(15)
$241
2021
$321
443
(1,040)
746
(19)
$451
(146)
(216)
$89
2020
$274
515
(980)
661
(19)
$451
(123)
(239)
$89
2019
$232
564
(936)
492
(19)
$333
(102)
(12)
$219
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
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, 2021, 2020 and 2019 was as follows:
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CON EDISON ANNUAL REPORT 2021
(Millions of Dollars)
2021
2020
2019
2021
2020
2019
Con Edison
CECONY
CHANGE IN PROJECTED BENEFIT OBLIGATION
Projected benefit obligation at beginning of year
$18,965
$16,792
$14,449
$17,821
$15,750
$13,542
Service cost – excluding administrative expenses
Interest cost on projected benefit obligation
Net actuarial loss/(gain)
Plan amendments
Benefits paid
337
471
(1,547)
288
549
2,281
245
601
317
443
2,191
(1,441)
269
515
2,154
—
—
(869)
(945)
15
(709)
—
—
(799)
(867)
228
564
2,076
—
(660)
PROJECTED BENEFIT OBLIGATION AT END OF YEAR
$17,357
$18,965
$16,792
$16,341
$17,821
$15,750
CHANGE IN PLAN ASSETS
Fair value of plan assets at beginning of year
$17,022
$15,608
$13,450
$16,147
$14,790
$12,744
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
1,935
469
(869)
(53)
$18,504
$1,147
$205
(140)
15,469
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
1,838
432
(799)
(52)
$17,566
$1,225
$207
(163)
14,504
1,830
435
(867)
(41)
$16,147
$(1,674)
$3,145
(183)
15,676
2,425
318
(660)
(37)
$14,790
$(960)
$2,466
(202)
14,010
The increase in the pension funded status at December 31, 2021 for Con Edison and CECONY of $3,090 million
and $2,899 million, respectively, compared with December 31, 2020, was primarily due to a decrease in the plan's
projected benefit obligation as a result of an increase in the discount rate and actuarial gains on plan assets
exceeding the expected rate of return. 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,
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 2021 change in pension funded status from a liability to an asset corresponds with a decrease to regulatory
assets of $3,067 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 $30 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 2021, included within the funded status are noncurrent liabilities of $459
million and $381 million for Con Edison and CECONY, respectively.
For CECONY, the change in pension funded status from a liability to an asset at December 31, 2021 corresponds
with a decrease to regulatory assets of $2,910 million for unrecognized net losses and unrecognized prior service
costs consistent with the accounting rules for regulated operations, and also a credit to OCI of $6 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.
At December 31, 2021 and 2020, Con Edison’s investments included $525 million and $465 million, respectively,
held in external trust accounts for benefit payments pursuant to the supplemental retirement plans. Included in
these amounts for CECONY were $499 million and $439 million, respectively. See Note R. The accumulated benefit
obligations for the supplemental retirement plans for Con Edison and CECONY were $386 million and $352 million
as of December 31, 2021, respectively, and $414 million and $377 million as of December 31, 2020, respectively.
CON EDISON ANNUAL REPORT 2021
155
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
2021
2020
2019
3.00 %
3.50 %
3.80 %
3.20 %
2.55 %
3.00 %
7.00 %
3.80 %
3.20 %
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 %
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
discounting plan specific cash flows with corresponding spot rates on a yield curve. Term structures of interest rates
are based on AA rated corporate bonds. 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). 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
2022
$765
704
2023
$782
721
2024
$791
730
2025
$841
780
2026
$818
756
2027-2031
$4,219
3,924
Expected Contributions
Based on estimates as of December 31, 2021, the Companies expect to make contributions to the pension plans
during 2022 of $29 million (of which $20 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 2021
Plan Assets
The asset allocations for the pension plan at the end of 2021, 2020 and 2019, and the target allocation for 2022 are
as follows:
Asset Category
Equity Securities
Debt Securities
Real Estate
Total
Target
Allocation Range
2022
45% - 55%
33% - 43%
10% - 14%
100%
Plan Assets at December 31,
2021
50 %
38 %
12 %
100 %
2020
51 %
38 %
11 %
100 %
2019
51 %
38 %
11 %
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 2022
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 R).
CON EDISON ANNUAL REPORT 2021
157
The fair values of the pension plan assets at December 31, 2021 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)
Futures (h)
Total investments within the fair value hierarchy
Investments measured at NAV per share (n)
Private Equity (i)
Real Estate (j)
Hedge Funds (k)
Level 1
Level 2
Total
$4,381
3,536
—
—
—
80
2
$—
—
1,500
3,936
262
1,186
425
—
$4,381
3,536
1,500
3,936
262
1,186
505
2
$7,999
$7,309
$15,308
913
2,306
315
$3,534
(210)
(48)
$(258)
$18,584
(80)
$18,504
Total investments valued using NAV per share
Funds for retiree health benefits (l)
Funds for retiree health benefits measured at NAV per share (l)(n)
Total funds for retiree health benefits
(110)
(100)
Investments (excluding funds for retiree health benefits)
$7,889
$7,209
Pending activities (m)
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.
Private Equity consists of global equity funds that are not exchange-traded.
(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) Futures consist of exchange-traded financial contracts encompassing U.S. Equity, International Equity and U.S. Government indices.
(i)
(j) Real Estate investments include real estate funds based on appraised values that are broadly diversified by geography and property type.
(k) Hedge Funds are within a commingled structure which invests in various hedge fund managers who can invest in all financial instruments.
(l)
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.
(m) Pending activities include security purchases and sales that have not settled, interest and dividends that have not been received and
(n)
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.
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CON EDISON ANNUAL REPORT 2021
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) - (n) Reference is made to footnotes (a) through (n) in the above table of pension plan assets at December 31, 2021 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,
2021
$55
46
2020
$52
43
2019
$49
42
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 2021, 2020 and 2019 were as
follows:
CON EDISON ANNUAL REPORT 2021
159
(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
2021
$22
33
(68)
31
(3)
$15
(9)
(7)
$(1)
2020
$21
37
(66)
37
(3)
$26
(9)
(17)
$—
2019
$18
44
(66)
(9)
(2)
$(15)
(7)
12
$(10)
2021
$16
28
(56)
27
(1)
$14
(7)
(12)
$(5)
CECONY
2020
$16
31
(54)
36
(2)
$27
(7)
(25)
$(5)
2019
$13
36
(54)
(10)
(2)
$(17)
(5)
7
$(15)
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, 2021, 2020 and 2019 were as follows:
(Millions of Dollars)
CHANGE IN BENEFIT OBLIGATION
Con Edison
CECONY
2021
2020
2019
2021
2020
2019
Benefit obligation at beginning of year
$1,425
$1,357
$1,114
$1,209
$1,154
$913
Service cost
Interest cost on accumulated postretirement benefit
obligation
Amendments
Net actuarial loss/(gain)
Benefits paid and administrative expenses, net of
subsidies
Participant contributions
22
33
—
(13)
(117)
48
21
37
—
74
(117)
53
18
44
(14)
264
(110)
41
BENEFIT OBLIGATION AT END OF YEAR
$1,398
$1,425
$1,357
CHANGE IN PLAN ASSETS
Fair value of plan assets at beginning of year
$1,115
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
92
6
21
48
(132)
$1,150
$(248)
$41
(13)
$1,026
142
7
20
53
(133)
$1,115
$(310)
$115
(16)
$885
198
7
23
40
(127)
$1,026
$(331)
$155
(19)
16
28
—
(3)
16
31
—
63
(107)
46
$1,189
$940
67
3
19
46
(120)
$955
$(234)
$67
—
(107)
52
$1,209
$872
117
4
19
51
(123)
$940
$(269)
$114
(1)
13
36
—
252
(100)
40
$1,154
$759
165
6
22
40
(120)
$872
$(282)
$149
(3)
The decrease in the other postretirement benefits funded status liability at December 31, 2021 for Con Edison and
CECONY of $62 million and $35 million, respectively, compared with December 31, 2020, was primarily due to an
increase in the fair value of plan assets as a result of the actual return on plan assets, along with a decrease in the
plans' projected benefit obligation as a result of an increase 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 decrease
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CON EDISON ANNUAL REPORT 2021
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. For 2021, included within the funded
status are noncurrent assets of $79 million and $55 million for Con Edison and CECONY, respectively.
For Con Edison, the decrease in funded status liability at December 31, 2021 corresponds with a net decrease to
regulatory assets of $67 million for unrecognized net losses and unrecognized prior service costs associated with
the Utilities 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 the Clean Energy Businesses,
Con Edison Transmission, and RECO.
For CECONY, the decrease in funded status liability at December 31, 2021 corresponds with a decrease to
regulatory assets of $46 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
2021
2020
2019
2.75 %
3.00 %
2.25 %
2.55 %
3.10 %
3.35 %
2.25 %
2.55 %
6.80 %
3.10 %
3.35 %
6.80 %
4.15 %
4.30 %
6.80 %
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 rates for covered medical and prescription medication expenses used to determine the
accumulated other postretirement benefit obligations (APBO) at December 31, 2021 were assumed to increase
each year, with the initial rate gradually decreasing to the ultimate rate as follows:
Pre-65 Medical
Post-65 Medical
Prescription Medications
Initial Cost Trend
Rate
Ultimate Cost
Trend Rate
Year That Ultimate
Rate is Reached
6.80%
4.50%
7.25%
4.50%
4.50%
4.50%
2034
—
2033
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
2022
$75
84
2023
$77
86
2024
$77
86
2025
$78
87
2026
2027-2031
$78
88
$385
435
CON EDISON ANNUAL REPORT 2021
161
Expected Contributions
Based on estimates as of December 31, 2021, Con Edison and CECONY expect to make a contribution of $8
million (all of which is expected to be made by CECONY) to the other postretirement benefit plans in 2022. The
Companies’ policy is to fund the total periodic benefit cost of the plans to the extent tax deductible.
Plan Assets
The asset allocations for CECONY’s other postretirement benefit plans at the end of 2021, 2020 and 2019, and the
target allocation for 2022 are as follows:
Asset Category
Equity Securities
Debt Securities
Total
Target Allocation Range
Plan Assets at December 31,
2022
42%-80%
20%-58%
100%
2021
55 %
45 %
100 %
2020
54 %
46 %
100 %
2019
54 %
46 %
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, 2021 by asset category as defined by the accounting rules for
fair value measurements (see Note R) 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
$474
379
22
$875
100
$975
Total
$474
379
22
$875
210
$1,085
48
17
$1,150
(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 2021
The fair values of the plans' assets at December 31, 2020 by asset category (see Note R) 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) - (f) Reference is made to footnotes (a) through (f) in the above table of other postretirement benefit plan assets at December 31, 2021 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, 2021 and 2020 were as
follows:
(Millions of Dollars)
Accrued Liabilities:
Manufactured gas plant sites
Other Superfund Sites
Total
Regulatory assets
Con Edison
CECONY
2021
$845
95
$940
$938
2020
$752
105
$857
$865
2021
$755
95
$850
$860
2020
$676
104
$780
$791
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 2021
163
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, 2021 and 2020 were as
follows:
(Millions of Dollars)
Remediation costs incurred
Con Edison
CECONY
2021
$25
2020
$33
2021
$24
2020
$32
Insurance and other third party recoveries received by Con Edison or CECONY were immaterial in 2021 and 2020.
Con Edison and CECONY estimate that in 2022 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 2021, Con Edison and CECONY estimated that for their manufactured gas plant sites (including CECONY’s
Astoria site), the aggregate undiscounted potential liability for the investigation and remediation of coal tar and/or
other environmental contaminants could range up to $2,980 million and $2,840 million, respectively. These
estimates were based on the assumption that there is contamination at all sites, including those that have not yet
been fully investigated and additional assumptions about the extent of the contamination and the type and extent of
the remediation that may be required. Actual experience may be materially different.
Asbestos Proceedings
Suits have been brought in NY 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, 2021, Con Edison and CECONY have accrued their estimated aggregate undiscounted
potential liabilities for these suits and additional suits that may be brought over the next 15 years as shown in the
following table. These estimates were based upon a combination of modeling, historical data analysis and risk factor
assessment. Courts have begun, and unless otherwise determined on appeal may continue, to apply different
standards for determining liability in asbestos suits than the standard that applied historically. As a result, the
Companies currently believe that there is a reasonable possibility of an exposure to loss in excess of the liability
accrued for the suits. The Companies are unable to estimate the amount or range of such loss. In addition, certain
current and former employees have claimed or are claiming workers’ compensation benefits based on alleged
disability from exposure to asbestos. CECONY is permitted to defer as regulatory assets (for subsequent recovery
through rates) costs incurred for its asbestos lawsuits and workers’ compensation claims.
The accrued liability for asbestos suits and workers’ compensation proceedings (including those related to asbestos
exposure) and the amounts deferred as regulatory assets or liabilities for the Companies at December 31, 2021 and
2020 were as follows:
(Millions of Dollars)
Accrued liability – asbestos suits
Regulatory assets – asbestos suits
Accrued liability – workers’ compensation
Regulatory liabilities – workers’ compensation
Con Edison
CECONY
2021
$8
$8
$65
$8
2020
$8
$8
$72
$3
2021
$7
$7
$62
$8
2020
$7
$7
$68
$3
164
CON EDISON ANNUAL REPORT 2021
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. During 2020,
the company accrued its estimated liability for the suits of $40 million and an insurance receivable in the same
amount, which estimated liability did not change in 2021.
Other Contingencies
For additional contingencies, see “Other Regulatory Matters” in Note B, Note G and "Uncertain Tax Positions" in
Note L.
Guarantees
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 and its
subsidiaries under these agreements totaled $2,157 million and $2,042 million at December 31, 2021 and 2020,
respectively.
A summary, by type and term, of Con Edison’s total guarantees under these other agreements at December 31,
2021 is as follows:
Guarantee Type
0 – 3 years
4 – 10 years
> 10 years
Con Edison Transmission
Energy transactions
Renewable electric projects
Other
Total
$490
469
319
70
$1,348
(Millions of Dollars)
$—
37
51
—
$88
$—
325
396
—
$721
Total
$490
831
766
70
$2,157
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
CON EDISON ANNUAL REPORT 2021
165
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.
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 Projects – Con Edison and the Clean Energy Businesses guarantee payments on behalf of
their wholly-owned subsidiaries associated with their investment in, or development for others of, solar and wind
energy facilities.
Other – Other guarantees consist of a $70 million guarantee provided by Con Edison to Travelers Insurance
Company for indemnity agreements for surety bonds in connection with the operation of solar energy facilities and
energy service projects of 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
2022
$126
124
2023
$78
78
2024
$55
55
2025
$55
55
2026
$56
56
All Years
Thereafter
$434
434
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 2021, 2020 and 2019 were as follows:
(Millions of Dollars)
Astoria Generating Company (a)
Brooklyn Navy Yard (b)
Total
(a) Capacity purchase agreements with terms ending in 2021 through 2023.
(b) Contract for plant output, which started in 1996 and ends in 2036.
For the Years Ended December 31,
2021
$20
139
$159
2020
$26
113
$139
2019
$116
115
$231
166
CON EDISON ANNUAL REPORT 2021
Note J – Leases
The Companies lease land, office buildings, equipment and access rights to support electric transmission facilities.
The Companies recognize 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, 2021 and 2020 were as follows:
(Millions of Dollars)
Operating lease cost
Operating lease cash flows
Con Edison
CECONY
2021
$86
$80
2020
$85
$79
2021
$66
$63
2020
$65
$61
As of December 31, 2021, assets recorded as finance leases for Con Edison and CECONY were $2 million and
$1 million, respectively, and the accumulated amortization associated with finance leases for Con Edison and
CECONY were $4 million and $2 million, respectively. As of December 31, 2020, assets recorded as finance leases
were $3 million for Con Edison and $2 million for CECONY, and the accumulated amortization associated with
finance leases for Con Edison and CECONY were $3 million and $1 million, respectively.
For the twelve months ended December 31, 2021 and 2020, 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 $58 million and
$12 million, respectively, for the twelve months ended December 31, 2021 and $23 million and $11 million,
respectively, for the twelve months ended December 31, 2020.
Other information related to leases for Con Edison and CECONY at December 31, 2021 and 2020 was as follows:
Weighted Average Remaining Lease Term:
Operating leases
Finance leases
Weighted Average Discount Rate:
Operating leases
Finance leases
Con Edison
CECONY
2021
2020
2021
2020
18.5 years
7.1 years
19.1 years
7.3 years
12.1 years
3.1 years
13.0 years
4.0 years
4.3%
1.8%
4.3%
1.8%
3.5%
1.1%
3.6%
1.3%
CON EDISON ANNUAL REPORT 2021
167
Future minimum lease payments under non-cancellable leases at December 31, 2021 were as follows:
(Millions of Dollars)
Year Ending December 31,
2022
2023
2024
2025
2026
All years thereafter
Total future minimum lease payments
Less: imputed interest
Total
Reported as of December 31, 2021
Operating lease liabilities (current)
Operating lease liabilities (noncurrent)
Other current liabilities
Other noncurrent liabilities
Total
Con Edison
CECONY
Operating
Leases
Finance
Leases
Operating
Leases
Finance
Leases
$81
$—
$60
$—
77
77
78
76
877
$1,266
(436)
$830
$113
717
—
—
$830
—
1
—
—
1
$2
—
$2
$—
—
—
2
$2
59
59
60
59
394
$691
(139)
$552
$90
462
—
—
$552
—
1
—
—
—
$1
—
$1
$—
—
—
1
$1
At December 31, 2021, the Companies had an additional operating lease agreement that had not yet commenced,
for an asset under construction at the Clean Energy Businesses, for which the present value of lease payments is
$6 million. This lease is expected to commence within one year, with a lease term of approximately 45 years.
The Companies are lessors under certain leases whereby the Companies own real estate and distribution poles and
lease portions of them to others. Revenue under such leases was immaterial for Con Edison and CECONY for the
twelve months ended December 31, 2021 and 2020.
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.
Con Edison has recorded goodwill related to the O&R merger, the acquisition of a portion of Honeoye, and the
acquisitions of a residential solar company and a battery storage company by the Clean Energy Businesses. In
2021 and 2020, Con Edison completed impairment tests for its 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 2021, the Companies performed the qualitative assessment for
goodwill related to the O&R merger. In 2021 and 2020, Con Edison completed impairment tests for goodwill of $8
million related to Honeoye, $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. In
2021, Con Edison determined, based on a discounted cash flow analysis, that $7 million of goodwill was impaired
related to Honeoye, $5 million of which was attributed to CET Gas and $2 million of which was attributed to
CECONY.
168
CON EDISON ANNUAL REPORT 2021
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, 2021 and 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 provided 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, increased the 30
percent limitation on interest deductibility to 50 percent of adjusted taxable income for tax years 2019 and 2020, and
provided 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)
2021
2020
2019
2021
2020
2019
Con Edison
CECONY
State
Current
Deferred
Federal
Current
Deferred
Amortization of investment tax credits
Total income tax expense
$14
79
43
61
(7)
$190
$7
50
(2)
42
(7)
$90
$(12)
96
—
219
(7)
$296
$1
106
121
21
(3)
$246
$6
97
41
73
(2)
$215
$22
68
185
63
(3)
$335
CON EDISON ANNUAL REPORT 2021
169
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
Pension Asset Reserve
Equity investments
Other
Total deferred tax liabilities
Deferred tax assets:
Con Edison
CECONY
2021
2020
2021
2020
0
$8,298
$7,985
$7,213
$6,901
36
264
33
640
204
478
—
30
910
243
31
536
220
—
46
—
31
241
—
609
155
471
—
—
861
222
—
508
165
—
—
—
$9,983
$9,971
$8,720
$8,657
Accrued pension and other postretirement costs
$218
$504
$188
$427
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
Equity investments
Other
Total deferred tax assets
Net deferred tax liabilities
Unamortized investment tax credits
Net deferred tax liabilities and unamortized investment tax credits
554
727
264
177
195
144
946
(22)
34
—
3,237
$6,746
127
$6,873
617
656
241
178
211
164
1,022
(22)
—
59
3,630
$6,341
134
$6,475
517
620
238
141
155
38
—
—
—
42
1,939
$6,781
15
$6,796
579
570
219
143
165
34
—
—
—
127
2,264
$6,393
18
$6,411
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
Amortization of excess deferred federal income taxes
Renewable energy credits
Research and development credits
Other
Effective tax rate
Con Edison
CECONY
2021
2020
2019
2021
2020
2019
21%
21%
21%
21%
21%
21%
4
3
2
(1)
(12)
(2)
(1)
—
4
(1)
2
(1)
(14)
(3)
—
(1)
14%
7%
4
(1)
1
(1)
(4)
(2)
(1)
—
17%
5
—
1
(1)
(11)
—
—
—
5
—
1
(1)
(12)
—
—
1
5
—
1
(1)
(4)
—
(1)
—
15%
15%
21%
170
CON EDISON ANNUAL REPORT 2021
At December 31, 2021, Con Edison had $946 million in general business tax credit carryovers (primarily renewable
energy tax credits). If unused, these general business tax credit carryovers will begin to expire in 2034. 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, 2021, Con Edison had a New York State NOL of approximately $1.13 billion, 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 2038 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 has a $5 million valuation
allowance against the New York City NOL deferred tax asset of approximately $17 million. Con Edison also has a
$21.5 million valuation allowance for other state NOL carryforwards; as it is not more likely than not that the deferred
tax asset will be realized.
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. In 2021, the limit of the deductible interest expense as a percentage of adjustable taxable income
returned to 30 percent; however, Con Edison’s deduction for interest expense was not limited. 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.
In April 2021, NY State passed a law that increased the corporate franchise tax rate on business income from 6.5%
to 7.25%, retroactive to January 1, 2021, for taxpayers with taxable income greater than $5 million. The law also
reinstated the business capital tax at 0.1875%, not to exceed an annual maximum tax liability of $5 million per
taxpayer. NY State requires a corporate franchise taxpayer to calculate and pay the highest amount of tax under the
three alternative methods: a tax on business income; a tax on business capital; or a fixed dollar minimum. The
provisions to increase the corporate franchise tax rate and reinstate a business capital tax are scheduled to expire
after 2023 and are not expected to have a material impact on the Companies’ financial position, results of
operations or liquidity.
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.
A reconciliation of the beginning and ending amounts of unrecognized tax benefits for Con Edison and CECONY
follows:
CON EDISON ANNUAL REPORT 2021
171
(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
CECONY
2021
$14
3
2
(2)
—
—
$17
2020
$13
—
1
—
—
—
$14
2019
2021
2020
2019
$6
1
10
(2)
—
(2)
$13
$3
2
1
(1)
—
—
$5
$2
—
1
—
—
—
$3
$4
1
—
(1)
—
(2)
$2
At December 31, 2021, the estimated liability for uncertain tax positions for Con Edison was $17 million ($5 million
for CECONY). Con Edison reasonably expects to resolve within the next twelve months approximately $12 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
$3 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 $17 million ($16 million, net of federal
taxes) with $5 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, 2021, the Companies recognized an immaterial amount of interest expense and no penalties for
uncertain tax positions in their consolidated income statements. At December 31, 2021 and 2020, the Companies
recognized an immaterial amount of accrued interest on their consolidated balance sheets.
Con Edison's federal tax return for 2020 remains under examination. State and local income tax returns remain
open for examination in NY State for tax years 2010 through 2020, in NJ for tax years 2017 through 2020 and in
New York City for tax years 2017 through 2020.
172
CON EDISON ANNUAL REPORT 2021
Note M – Revenue Recognition
The following table presents, for the years ended December 31, 2021, 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.
2021
2020
2019
Revenues
from
contracts
with
customers
$8,736
2,324
519
$11,579
691
265
$956
683
234
—
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
$70
54
13
$8,806
2,378
532
$8,026
1,998
494
$77
38
14
$8,103
2,036
508
$7,913
2,097
610
$149
35
17
$8,062
2,132
627
$137
$11,716
$10,518
$129
$10,647
$10,620
$201
$10,821
(10)
(5)
$(15)
—
—
105
681
260
$941
683
234
105
619
224
$843
609
52
—
10
9
$19
—
—
75
629
233
$862
609
52
75
627
247
$874
575
71
—
7
12
$19
—
—
211
634
259
$893
575
71
211
$917
$105
$1,022
$661
$75
$736
$646
$211
$857
4
—
—
(7)
4
(7)
4
—
—
(3)
4
(3)
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 (b)
Total Con Edison
$13,456
$220
$13,676
$12,026
$220
$12,246
$12,144
$430
$12,574
(a) For the Utilities, this includes revenue from alternative revenue programs, such as the revenue decoupling mechanisms under their NY
electric and gas rate plans, as well as net earnings adjustment mechanisms (EAMs) and positive incentives primarily for achieving energy
efficiency goals (see "Rate Plans" in Note B), and for 2021 recognition of late payment charges and fees that were not billed (LPCs) for the
years ended December 31, 2020 and 2021 and for which recovery was granted by the NYSPSC. See "COVID-19 Regulatory Matters" in
Note B and "Utilities' Assessment of Late Payment Charges" below. The amount of revenue recognized under such alternative revenue
programs for 2021 includes $48 million, $34 million and $74 million for CECONY's revenue decoupling mechanisms, net EAMs, and LPCs,
respectively, and $(18) million, $2 million and $4 million for O&R's revenue decoupling mechanisms, net EAMs, and LPCs, respectively. For
the Clean Energy Businesses, this includes revenue from wholesale services.
(b) 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
CON EDISON ANNUAL REPORT 2021
173
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.
The Clean Energy Businesses recognize revenue for the sale of energy from renewable electric 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.
Clean Energy Businesses' Use of the Percentage-of-Completion Method
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,
2021
2020
2019
Unbilled
contract
revenue
(a)
Unearned
revenue
(b)
Unbilled
contract
revenue
(a)
Unearned
revenue
(b)
Unbilled
contract
revenue
(a)
Unearned
revenue
(b)
$11
242
218
$35
$41
—
34 (d)
$7
$29
88
106
$11
$17
31
7 (d)
$41
$29
86
86
$29
$20
1
4
$17
(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, $34 million, $7 million and $4 million were included in the balances as of January 1, 2021,
2020, and 2019, respectively.
As of December 31, 2021, the aggregate amount of the remaining fixed performance obligations of the Clean
Energy Businesses under contracts with customers for energy services is $120 million, of which $81 million will be
recognized within the next two years, and the remaining $39 million will be recognized pursuant to long-term service
and maintenance agreements.
Utilities' Assessment of Late Payment Charges
In March 2020, the Utilities began suspending new late payment charges and certain other fees for all customers.
The Utilities also began providing payment extensions for all customers that were scheduled to be disconnected
prior to the start of the COVID-19 pandemic. In November 2021, the NYSPSC issued an order establishing a
surcharge recovery mechanism for CECONY to collect, commencing December 1, 2021 through December 31,
2022, $43 million and $7 million for electric and gas, respectively, of late payment charges and fees that were not
billed for the year ended December 31, 2020. The company recorded such amounts as revenue for the year ended
December 31, 2021, as permitted under the accounting rules for regulated utilities, and also accrued such amounts
as a current asset at December 31, 2021. Pursuant to the November 2021 order, the company also established a
recovery mechanism for CECONY to collect, commencing January 2023 through December 2023, $19 million and
$4 million for electric and gas, respectively, of late payment charges and fees that were not billed for the year ended
December 31, 2021 and the company recorded such amounts as revenue for the year ended December 31, 2021,
as permitted under the accounting rules for regulated utilities, and also accrued such amounts as a current asset at
174
CON EDISON ANNUAL REPORT 2021
December 31, 2021. In October 2021, O&R, the New York State Department of Public Service (NYSDPS) and other
parties entered into a Joint Proposal for new electric and gas rate plans for the three-year period January 2022
through December 2024 (the Joint Proposal) that includes certain COVID-19 provisions, such as: recovery of 2020
late payment charges over three years; reconciliation of late payment charges to amounts reflected in rates for
years 2021 through 2024; and reconciliation of write-offs of customer accounts receivable balances to amounts
reflected in rates from January 1, 2020 through December 31, 2024. The Joint Proposal is subject to NYSPSC
approval. CECONY resumed late payment charges for commercial and residential customers who have not
experienced a change in financial circumstances due to the COVID-19 pandemic on September 3, 2021 and
October 1, 2021, respectively. O&R resumed late payment charges for commercial and residential customers who
have not experienced a change in financial circumstances due to the COVID-19 pandemic on October 1, 2021. See
"COVID-19 Regulatory Matters" in Note B.
Note N – Current Expected Credit Losses
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”.
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 projects.
The Clean Energy Businesses’ customer accounts receivable balance generally reflects the management of energy
supply assets, energy-efficiency services to government and commercial customers, and the engineering,
procurement, and construction services of renewable energy projects. The Clean Energy Businesses calculate an
allowance for uncollectible accounts related to their energy services customers based on an aging and customer-
specific analysis. The amount of such reserves was not material at December 31, 2021 and 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 years ended December 31, 2021 and 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 $169 million and $166 million, respectively, for the year ended December 31, 2021.
The increases to the allowance for uncollectible accounts for Con Edison and CECONY were $78 million and $73
million 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.
CON EDISON ANNUAL REPORT 2021
175
The table below presents a rollforward by major portfolio segment type for the years ended December 31, 2021 and
2020:
For the Year Ended December 31,
Con Edison
CECONY
Accounts receivable
- customers
Other receivables
Accounts receivable
- customers
Other receivables
2021
2020
2021
2020
2021
2020
2021
2020
$148
14
(91)
246
$317
$70
8
(54)
124
$148
$7
1
(2)
16
$22
$4
—
(2)
5
$7
$138
12
(86)
240
$304
$65
6
(50)
117
$138
$4
1
(1)
15
$19
$3
—
(1)
2
$4
(Millions of Dollars)
Allowance for credit losses
Beginning Balance at January 1,
Recoveries
Write-offs
Reserve adjustments
Ending Balance December 31,
176
CON EDISON ANNUAL REPORT 2021
Note O – 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.
During the years ended December 31, 2021, 2020, and 2019, equity awards were granted under the 2013 LTIP.
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, 2021 were new shares. The
Companies intend to use new shares to fulfill their stock-based compensation obligations for 2022.
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, 2021, 2020 and 2019:
(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
2021
$23
2
3
7
$35
$10
2020
$7
1
2
7
$17
$5
2019
$36
2
2
7
$47
$13
2021
$19
2
3
7
$31
$9
2020
$6
1
2
7
$16
$4
2019
$30
2
2
6
$40
$11
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, with respect to 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:
CON EDISON ANNUAL REPORT 2021
177
Risk-free interest rate (a)
Expected term (b)
Expected share price volatility (c)
2021
2020
2019
0.39% - 0.73%
0.10% - 0.13%
1.58% -1.59%
3 years
3 years
3 years
17.25% - 31.42% 30.16% - 40.95% 12.89% - 15.51%
(a) The risk-free rate is based on the U.S. Treasury zero-coupon yield curve.
(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. The Companies would reevaluate this assumption if market conditions or business developments would
reasonably indicate that future volatility might differ materially from historical experience.
A summary of changes in the status of the Performance RSUs’ TSR and non-TSR portions during the year ended
December 31, 2021 is as follows:
Non-vested at December 31, 2020
Granted
Vested
Forfeited
Non-vested at December 31, 2021
Units
901,524
401,100
(301,600)
(16,296)
984,728
Con Edison
Weighted Average Grant Date
Fair Value (a)
TSR
Portion (b)
Non-TSR
Portion (c)
$70.11
74.46
67.27
75.23
$72.67
$81.83
71.04
76.37
79.78
$79.14
Units
686,471
301,087
(227,411)
(15,869)
744,278
CECONY
Weighted Average Grant Date
Fair Value (a)
TSR
Portion (b)
Non-TSR
Portion (c)
$70.15
74.23
66.82
75.21
$72.71
$81.80
71.25
76.48
79.84
$79.20
(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, 2021 is $33 million, including $27 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
$8 million and $7 million in 2021, $21 million and $18 million in 2020, and $24 million and $22 million in 2019,
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, 2021 is as follows:
Non-vested at December 31, 2020
Granted
Vested
Forfeited
Non-vested at December 31, 2021
Con Edison
CECONY
Units
67,438
17,150
(21,121)
(1,847)
61,620
Weighted Average
Grant Date
Fair Value
$80.40
74.80
77.96
80.23
$79.68
Units
62,838
16,200
(19,588)
(1,580)
57,870
Weighted Average
Grant Date
Fair Value
$80.42
74.80
77.95
79.89
$79.70
The total expense to be recognized by Con Edison in future periods for unvested time-based awards outstanding at
December 31, 2021 for Con Edison and CECONY is $2 million, and is expected to be recognized over a weighted
178
CON EDISON ANNUAL REPORT 2021
average period of one year. Con Edison and CECONY paid cash of $1 million in 2021, 2020 and 2019, 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.
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, 2021, approximately 36,000 units were
issued at a weighted average grant date price of $77.53.
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 2021, 2020 and 2019,
957,866, 836,984 and 747,899 shares were purchased under the Stock Purchase Plan at a weighted average price
of $73.38, $79.82 and $85.45 per share, respectively.
CON EDISON ANNUAL REPORT 2021
179
Note P – 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, 2021
(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
$8,806
2,378
532
—
$18
8
74
$1,286
$1,802
$(84)
$542
$151 $36,260
326
93
646
12
(16)
(8)
179
41
110
(9)
13,748
2,647
(100)
—
—
—
—
—
—
$2,189
1,126
103
—
Total CECONY
$11,716
$—
$1,705
$2,460
($108)
$762
$252 $52,655
$3,418
O&R
Electric
Gas
Other
Total O&R
$681
260
—
$941
Clean Energy Businesses
$1,022
Con Edison Transmission
Other (b)
4
(7)
$—
—
—
$—
$—
—
—
$69
26
—
$95
$231
1
—
$100
50
—
$150
$236
(16)
(4)
$(8)
(4)
$27
15
$13
$2,123
8
1,169
—
—
—
—
$(12)
$(10)
(407)
(1)
$42
$68
9
24
$21
$3,292
$44
$6,554
3
20
249
366
$147
70
—
$217
$298
31
—
Total Con Edison
$13,676
$—
$2,032
$2,826
$(538)
$905
$340 $63,116
$3,964
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
$99
48
—
—
$90
$231
1
—
$147
$215
(8)
(10)
$(10)
(4)
—
$(14)
$4
(215)
(5)
$26
15
$13
$2,097
8
1,150
—
—
—
$41
$196
18
25
$21
$3,247
$(43)
$6,848
—
(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
180
CON EDISON ANNUAL REPORT 2021
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
$142
61
—
$203
$248
205
—
Total Con Edison
$12,574
$—
$1,684
$2,676
$991
$300 $58,079
$3,676
(a) For Con Edison, the income tax expense/(benefit) on non-operating income was $(150) million, $(103) million and $(4) million in 2021, 2020
and 2019, respectively. For CECONY, the income tax expense/(benefit) on non-operating income was $(6) million, $(3) million and $(7)
million in 2021, 2020 and 2019, respectively.
(b) Parent company and consolidation adjustments. Other does not represent a business segment.
CON EDISON ANNUAL REPORT 2021
181
Note Q – 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 R), unless an exception is available under the accounting rules for derivatives
and hedging. Qualifying derivative contracts that have been designated as normal purchases or normal sales
contracts are not reported at fair value under the accounting rules.
The fair values of the Companies’ derivatives, including the offsetting of assets and liabilities, on the consolidated
balance sheet at December 31, 2021 and 2020 were:
(Millions of Dollars)
2021
2020
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
$285
$(158)
$127 (b)
90
(13)
$375
$(171)
77
$204
$(289)
(94)
$(383)
$(8)
$135
71
$206
$(131)
(50)
$(181)
$137
10
$147
$(24)
$(64)
(15)
$(79)
$43
10
$53
$(152) (c)
(84) (c)
$(236)
$(32)
$71 (b)
56
$127
$(88)
(40)
$(128)
$(1)
$44
22
$66
$(225)
(207)
$(432)
$(366)
$20
16
$36
$(174)
(114)
$(288)
$(252)
$14
35
$49
$(13)
(33)
$(46)
$3
$(12)
(8)
$(20)
$11
9
$20
$—
$58 (b)
57 (d)
$115
$(238) (d)
(240) (d)
$(478)
$(363)
$8 (b)
8
$16
$(163)
(105)
$(268)
$(252)
Net fair value derivative assets/(liabilities)
$25
($26)
(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, 2021 and 2020, margin deposits for Con Edison ($1 million and $3 million, respectively) and CECONY (an immaterial
amount and $3 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.
Includes amounts for interest rate swaps of $4 million in noncurrent assets, $(20) million in current liabilities and $(38) million in noncurrent
liabilities. At December 31, 2021, the Clean Energy Businesses had interest rate swaps with notional amounts of $1,031 million. The
expiration dates of the swaps range from 2025-2041. In June 2021, as part of the Clean Energy Businesses' sale of a renewable electric
project, interest rate swaps terminating in 2024 were assumed by the buyer.
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
ranged from 2024-2041.
(c)
(d)
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
182
CON EDISON ANNUAL REPORT 2021
regulatory asset or regulatory liability to defer recognition of unrealized gains and losses on their electric and gas
derivatives. As gains and losses are realized in future periods, they will be recognized as purchased power, gas and
fuel costs in the Companies’ consolidated income statements.
The Clean Energy Businesses record realized and unrealized gains and losses on their derivative contracts in 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, 2021 and 2020:
Con Edison
CECONY
(Millions of Dollars)
Balance Sheet Location
2021
2020
Pre-tax gains/(losses) deferred in accordance with accounting rules for regulated operations:
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
$134
57
$191
$49
3
70
$122
$313
$18
3
5
52
$78
$(26)
—
$(26)
$(63)
(201)
(37)
$(301)
$(327)
$(2)
7
(3)
(65)
$(63)
2021
$124
51
$175
$43
—
66
$109
$284
$—
—
5
—
$5
2020
$(27)
—
$(27)
$(64)
(177)
(36)
$(277)
$(304)
$—
—
(3)
—
$(3)
The following table presents the hedged volume of Con Edison’s and CECONY’s commodity derivative transactions
at December 31, 2021:
Con Edison
CECONY
Electric Energy
(MWh) (a)(b)
26,982,370
24,646,000
Capacity (MW) (a)
42,333
28,800
Natural Gas
(Dt) (a)(b)
253,195,063
235,570,000
Refined Fuels
(gallons)
3,696,000
3,696,000
(a) Volumes are reported net of long and short positions, except natural gas collars where the volumes of long positions are reported.
(b) Excludes electric congestion and gas basis swap contracts which are associated with electric and gas contracts and hedged volumes.
The Companies are exposed to credit risk related to transactions entered into primarily for the various energy
supply and hedging activities by the Utilities and the Clean Energy Businesses. Credit risk relates to the loss that
may result from a counterparty’s nonperformance. The Companies use credit policies to manage this risk, including
an established credit approval process, monitoring of counterparty limits, netting provisions within agreements,
collateral or prepayment arrangements, credit insurance and credit default swaps. The Companies measure credit
risk exposure as the replacement cost for open energy commodity and derivative positions plus amounts owed from
counterparties for settled transactions. The replacement cost of open positions represents unrealized gains, net of
any unrealized losses where the Companies have a legally enforceable right to offset.
At December 31, 2021, Con Edison and CECONY had $406 million and $145 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 $91 million with independent system operators, $127 million with
investment-grade counterparties, $53 million with non-investment grade/non-rated counterparties, and $135 million
CON EDISON ANNUAL REPORT 2021
183
with commodity exchange brokers. CECONY’s net credit exposure consisted of $66 million with commodity
exchange brokers and $79 million with investment-grade counterparties.
The collateral requirements associated with, and settlement of, derivative transactions are included in net cash
flows from operating activities in the Companies’ consolidated statement of cash flows. Most derivative instrument
contracts contain provisions that may require a party to provide collateral on its derivative instruments that are in a
net liability position. The amount of collateral to be provided will depend on the fair value of the derivative
instruments and the party’s credit ratings.
The following table presents the aggregate fair value of the Companies’ derivative instruments with credit-risk-
related contingent features that are in a net liability position, the collateral posted for such positions and the
additional collateral that would have been required to be posted had the lowest applicable credit rating been
reduced one level and to below investment grade at December 31, 2021:
(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)
$158
170
43
94
$121
170
1
37
(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 $5 million at December 31, 2021. 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, 2021, if Con Edison had been downgraded
to below investment grade, it would have been required to post additional collateral for such derivative instruments of $66 million.
Note R – Fair Value Measurements
The accounting rules for fair value measurements and disclosures define fair value as the price that would be
received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the
measurement date in a principal or most advantageous market. Fair value is a market-based measurement that is
determined based on inputs, which refer broadly to assumptions that market participants use in pricing assets or
liabilities. These inputs can be readily observable, market corroborated, or generally unobservable firm inputs. The
Companies often make certain assumptions that market participants would use in pricing the asset or liability,
including assumptions about risk, and the risks inherent in the inputs to valuation techniques. The Companies use
valuation techniques that maximize the use of observable inputs and minimize the use of unobservable inputs.
The accounting rules for fair value measurements and disclosures established a fair value hierarchy, which
prioritizes the inputs to valuation techniques used to measure fair value in three broad levels. The rules require that
assets and liabilities be classified in their entirety based on the level of input that is significant to the fair value
measurement. Assessing the significance of a particular input may require judgment considering factors specific to
the asset or liability, and may affect the valuation of the asset or liability and their placement within the fair value
hierarchy. The Companies classify fair value balances based on the fair value hierarchy defined by the accounting
rules for fair value measurements and disclosures as follows:
•
•
Level 1 – Consists of assets or liabilities whose value is based on unadjusted quoted prices in active markets
at the measurement date. An active market is one in which transactions for assets or liabilities occur with
sufficient frequency and volume to provide pricing information on an ongoing basis. This category includes
contracts traded on active exchange markets valued using unadjusted prices quoted directly from the
exchange.
Level 2 – Consists of assets or liabilities valued using industry standard models and based on prices, other
than quoted prices within Level 1, that are either directly or indirectly observable as of the measurement
184
CON EDISON ANNUAL REPORT 2021
•
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, 2021 and 2020 are summarized below.
(Millions of Dollars)
Level 1 Level 2 Level 3
Adjustment (e) Total Level 1 Level 2 Level 3
Adjustment (e) Total
2021
Netting
2020
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)
$95
—
492
$587
$33
—
$33
4
135
$399
$266
57
$323
$67
474
$541
$138
127
$265
$1
$172
—
—
$17
$28
—
$28
$1
—
$1
$8
$260
$17
$(171)
$201
—
—
4
627
$19
—
431
$42
—
126
$(171)
$832
$450
$168
$4
—
—
$4
$(148)
$179
—
57
$(148)
$236
$7
—
$7
$296
$23
106
—
$402
$23
$53
$118
—
—
—
557
$53
$675
$46
$372
—
106
$46
$478
$(79)
$127
—
601
$15
411
$20
$—
120
—
$(79)
$728
$426
$140
$—
$(16)
—
$19
531
$(16)
$550
$(53)
$128
$3
$274
$10
$(19)
$268
(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 assets and $4 million and $3 million of commodity
derivative liabilities, respectively, transferred from level 3 to level 2 during the year ended December 31, 2021 because of availability of
observable market data due to the decrease in the terms of certain contracts from beyond three years as of September 30, 2021 to less
than three years as of December 31, 2021. 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.
(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, 2021 and
2020, the Companies determined that nonperformance risk would have no material impact on their financial position or results of
operations.
(d) Other assets are comprised of assets such as life insurance contracts within the deferred compensation plan and non-qualified retirement
plans.
(e) Amounts represent the impact of legally-enforceable master netting agreements that allow the Companies to net gain and loss positions
and cash collateral held or placed with the same counterparties.
(f) See Note Q.
CON EDISON ANNUAL REPORT 2021
185
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 monthly 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, 2021
(Millions of Dollars)
Valuation Techniques
Unobservable Inputs
Range
Con Edison — Commodity
Electricity
$(6) Discounted Cash Flow Forward energy prices (a)
$18.75-$82.40 per MWh
(10) Discounted Cash Flow Forward capacity prices (a)
$0.31-$12.93 per kW-month
Transmission Congestion Contracts/
Financial Transmission Rights
5 Discounted Cash Flow
Inter-zonal forward price curves adjusted
for historical zonal losses (b)
$(20.27)-$83.04 per MWh
Total Con Edison — Commodity
$(11)
CECONY — Commodity
Electricity
$(8) Discounted Cash Flow Forward capacity prices (a)
$1.35-$12.93 per kW-month
Transmission Congestion Contracts
1 Discounted Cash Flow
Inter-zonal forward price curves adjusted
for historical zonal losses (b)
$0.52-$3.63 per MWh
Total CECONY — Commodity
$(7)
(a) Generally, increases/(decreases) in this input in isolation would result in a higher/(lower) fair value measurement.
(b) Generally, increases/(decreases) in this input in isolation would result in a lower/(higher) fair value measurement.
The table listed below provides a reconciliation of the beginning and ending net balances for assets and liabilities
measured at fair value for the years ended December 31, 2021 and 2020 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
Purchases
Settlements
Transfer out of level 3
Ending balance as of December 31,
Con Edison
CECONY
2021
$(19)
(9)
3
6
5
3
2020
$(16)
(10)
(7)
—
15
(1)
$(11)
$(19)
2021
$(10)
(3)
1
—
3
2
$(7)
2020
$(6)
(5)
(4)
—
6
(1)
$(10)
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 ($2 million loss and $3 million gain) on the consolidated income
statement for the years ended December 31, 2021 and 2020, respectively.
Note S – 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.
186
CON EDISON ANNUAL REPORT 2021
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 2021, 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. See Note I for information on these electricity purchase agreements, the payments for this
contract constitute CECONY's maximum exposure to loss with respect to the potential VIE.
Clean Energy Businesses
In June 2021, a subsidiary of the Clean Energy Businesses sold substantially all of its membership interest in a
renewable electric project, and retained an equity interest of $11 million in the project, which is accounted for as an
equity method investment. See Note W. The earnings of the project are determined using the hypothetical
liquidation at book value (HLBV) method of accounting which resulted in a loss of $11 million pre-tax ($8 million
after-tax) for the year ended December 31, 2021. Con Edison is not the primary beneficiary since the power to
direct the activities that most significantly impact the economics of the renewable electric project is not held by the
Clean Energy Businesses.
In February 2021, a subsidiary of the Clean Energy Businesses entered into an agreement relating to certain
projects (CED Nevada Virginia) with a noncontrolling tax equity investor to which a percentage of earnings, tax
attributes and cash flows will be allocated. CED Nevada Virginia is a consolidated entity in which Con Edison has
less than a 100 percent membership interest. Con Edison is the primary beneficiary since the power to direct the
activities that most significantly impact the economics of CED Nevada Virginia during construction of the projects,
and upon commercial operation, is held by the Clean Energy Businesses.
For the year ended December 31, 2021, the HLBV method of accounting for CED Nevada Virginia resulted in a
$158 million loss ($119 million, after tax) for the tax equity investor and $155 million of income ($117 million, after
tax) for Con Edison.
In 2018, the Clean Energy Businesses completed its acquisition of Sempra Solar Holdings, LLC. Included in the
acquisition were certain operating projects (Tax Equity Projects) with a noncontrolling tax equity investor to which a
percentage of earnings, tax attributes and cash flows are allocated. The Tax Equity Projects are consolidated
entities in which Con Edison 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, 2021, the HLBV method of accounting for the Tax Equity Projects resulted in
$6 million of income ($4 million, after tax) for the tax equity investor and $30 million of income ($24 million, after tax)
for Con Edison. For the year ended December 31, 2020, the HLBV method of accounting for the Tax Equity Projects
resulted in $43 million of income ($32 million, after tax) for the tax equity investor and a $6 million loss ($4 million,
after tax) for Con Edison.
Con Edison has determined that the use of HLBV accounting is reasonable and appropriate to attribute income and
loss to the tax equity investors. Refer to Use of Hypothetical Liquidation at Book Value in Note A.
CON EDISON ANNUAL REPORT 2021
187
At December 31, 2021 and 2020, Con Edison’s consolidated balance sheet included the following amounts
associated with its VIEs:
Tax Equity Projects
Great Valley Solar
(c)(d)
Copper Mountain -
Mesquite Solar
(c)(e)
CED Nevada
Virginia (c)(h)
(Millions of Dollars)
Non-utility property, less accumulated depreciation (f)(g)
Other assets
Total assets (a)
Other liabilities
Total liabilities (b)
2021
$275
37
$312
14
$14
2020
$284
39
$323
13
$13
2021
$431
167
$598
74
$74
2020
$446
176
$622
71
$71
2021
$643
55
$698
315
$315
(a) The assets of the Tax Equity Projects and CED Nevada Virginia represent assets of a consolidated VIE that can be used only to settle
obligations of the consolidated VIE.
(b) The liabilities of the Tax Equity Projects and CED Nevada Virginia represent liabilities of a consolidated VIE for which creditors do not have
recourse to the general credit of the primary beneficiary.
(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 $84 million and $82 million at December 31, 2021 and 2020, 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 $118 million and $134 million at December 31, 2021 and 2020, respectively.
(f) Non-utility property is reduced by accumulated depreciation of $26 million for Great Valley Solar, $44 million for Copper Mountain -
Mesquite Solar and $10 million for CED Nevada Virginia at December 31, 2021.
(g) 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.
(h) CED Nevada Virginia consists of the Copper Mountain Solar 5, Battle Mountain Solar and Water Strider Solar projects for which the
noncontrolling interest of the tax equity investor was $95 million at December 31, 2021.
The following table summarizes the VIEs into which the Clean Energy Businesses have entered as of December 31,
2021:
Project Name
Great Valley Solar (c)
Copper Mountain - Mesquite Solar (c)
CED Nevada Virginia (c)
Generating Capacity (a)
(MW AC)
Power
Purchase
Agreement
Term in Years
Year of
Investment
200
344
431
15-20
20-25
20-25
2018
2018
2021
Location
CA
NV and AZ
NV and VA
Maximum
Exposure to Loss
(Millions of Dollars) (b)
$214
406
288
(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, Copper Mountain Mesquite Solar and CED Nevada Virginia, refer to (d), (e) and (h) in the
table above.
Note T – 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.
188
CON EDISON ANNUAL REPORT 2021
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
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, 2021, the liabilities for asset retirement obligations of Con Edison and CECONY were $577 million
and $504 million, respectively. At December 31, 2020, the liabilities for asset retirement obligations of Con Edison
and CECONY were $576 million and $508 million, respectively. The change in liabilities at December 31, 2021 was
due to changes in estimated cash flows of $58 million and $55 million for Con Edison and CECONY, respectively,
and accretion expense of $18 million and $15 million for Con Edison and CECONY, respectively. The changes were
offset by liabilities settled of $75 million and $74 million for Con Edison and CECONY, 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. At December 31, 2021, Con Edison and CECONY recorded reductions of $87 million
and $85 million, respectively, to the regulatory liability associated with cost of removal to reflect depreciation and
interest expense. At December 31, 2020, Con Edison and CECONY recorded reductions of $49 million to the
regulatory liability associated with cost of removal to reflect depreciation and interest expense.
Note U – 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 ($16,312 million and
$888 million, respectively), at December 31, 2021, 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, 2021, 2020 and 2019 were as follows:
CON EDISON ANNUAL REPORT 2021
189
(Millions of Dollars)
Cost of services provided
Cost of services received
2021
$137
68
CECONY
2020
$128
66
2019
$121
64
In addition, CECONY and O&R have joint gas supply arrangements in connection with which CECONY sold to O&R
$90 million, $59 million and $71 million of natural gas for the years ended December 31, 2021, 2020 and 2019,
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, 2021 and 2020, the amounts billed by the Utilities to NY
Transco were $5.9 million and immaterial, respectively. 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 formerly owned by a subsidiary of CET Gas and a subsidiary of Crestwood Equity Partners LP (Crestwood).
In addition, CECONY is the replacement shipper on one of Crestwood’s firm transportation agreements with
Tennessee Gas Pipeline Company LLC. CECONY incurred costs for storage and wheeling services from
Stagecoach of $31 million, $34 million and $33 million for the years ended December 31, 2021, 2020 and 2019,
respectively. During 2021, a subsidiary of CET Gas completed the sale of its 50 percent interest in Stagecoach.
See Note W.
CECONY has a 20-year transportation contract with Mountain Valley Pipeline, LLC (MVP) for 250,000 dekatherms
per day of capacity. CET Gas owns a 10.2 percent equity interest in MVP (that is expected to be reduced to 8.5
percent). See "Investments - 2020 and 2021 Partial Impairments of Investment in Mountain Valley Pipeline, LLC
(MVP) " in Note A. In October 2017, the Environmental Defense Fund and the Natural Resource Defense Council
requested the NYSPSC to prohibit CECONY from recovering costs under its MVP contract unless CECONY can
demonstrate that 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, 2021 and
2020, 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, 2021 and 2020 there were no outstanding loans to
O&R.
The Clean Energy Businesses had financial electric capacity contracts with CECONY and O&R during 2021 and
2020. For the years ended December 31, 2021 and 2020, the Clean Energy Businesses realized a $4 million loss
and an immaterial loss, respectively, under these contracts.
Note V – New Financial Accounting Standards
In March 2020, the FASB issued ASU 2020-04, Reference Rate Reform (Topic 848): Facilitation of the Effects of
Reference Rate Reform on Financial Reporting (ASU 2020-04). In 2017, the United Kingdom’s Financial Conduct
Authority announced that it intends to stop persuading or compelling banks to submit the London Interbank Offered
Rate (LIBOR), a benchmark interest rate referenced in a variety of agreements, after 2021. In March 2021, the
United Kingdom's Financial Conduct Authority confirmed that U.S. Dollar LIBOR will no longer be published after
December 31, 2021 for one-week and two-month U.S. Dollar LIBOR tenors, and after June 30, 2023 for all other
U.S. Dollar LIBOR tenors. ASU 2020-04 provides entities with optional expedients and exceptions for applying
generally accepted accounting principles to contract modifications and hedging relationships, subject to meeting
certain criteria, that reference LIBOR or another reference rate expected to be discontinued. In January 2021, the
FASB issued amendments to the guidance through ASU 2021-01 to include all contract modifications and hedging
relationships affected by reference rate reform, including those that do not directly reference LIBOR or another
reference rate expected to be discontinued, and clarify which optional expedients may be applied to them. The
guidance can be applied prospectively. The optional relief is temporary and generally cannot be applied to contract
modifications and hedging relationships entered into or evaluated after December 31, 2022. The Companies do not
expect the new guidance to have a material impact on their financial position, results of operations or liquidity.
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CON EDISON ANNUAL REPORT 2021
In December 2021, the FASB issued amendments to the guidance on accounting for government assistance
through ASU 2021-10, Government Assistance (Topic 832): Disclosures by Business Entities about Government
Assistance. The amendments require that business entities disclose 1) the types of assistance, 2) an entity’s
accounting for the assistance, and 3) the effect of the assistance on an entity’s financial statements. For public
entities, the amendments are effective for reporting periods beginning after December 15, 2021. Early adoption is
permitted. The Companies are in the process of evaluating the potential impact of the new guidance on the
Companies’ financial position, results of operations and liquidity.
Note W – Dispositions
Crane and Coram
In April 2021, a subsidiary of the Clean Energy Businesses entered into an agreement to sell substantially all of its
membership interests in a renewable electric project that it developed and also all of its membership interests in a
renewable electric project that it acquired in 2016. The sales were completed in June 2021. The combined carrying
value of both projects was approximately $192 million in June 2021. The net pre-tax gain on the sales was
$3 million ($2 million after-tax) and was included within "Other operations and maintenance" on Con Edison's
consolidated income statement for the year ended December 31, 2021. The retained portion of the membership
interest in the renewable electric project, of $11 million, was calculated based on a discounted cash flow of future
projected earnings, and the retained portion is accounted for as an equity method investment. The portion of the
gain attributable to the retained portion of the membership interest was not material for the year ended December
31, 2021. See Note S.
Stagecoach Gas Services
In 2021, a subsidiary of Con Edison Gas Pipeline and Storage, LLC (CET Gas) and its joint venture partner agreed
to sell their combined interests in Stagecoach Gas Services LLC (Stagecoach) for a total of $1,225 million, of which
$629 million, including closing adjustments, was attributed to CET Gas for its 50 percent interest. The purchase and
sale agreement provided for a two-stage closing, the first of which was completed in July 2021 and the second of
which was completed in November 2021. See "Investments - Partial Impairment of Investment in Stagecoach Gas
Services LLC (Stagecoach)" in Note A.
CON EDISON ANNUAL REPORT 2021
191
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,
2021
$1,369
14
(37)
$1,346
$1,376
$3.86
$3.85
$3.10
348.4
349.4
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
(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.
192
CON EDISON ANNUAL REPORT 2021
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 (b)
Net Cash Flows from Operating Activities(b)
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(b)
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(b)
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)
2019
$1,343
(1,354)
982
49
21
11
—
—
(521)
538
(626)
400
(226)
(537)
650
(3)
(3)
58
640
(975)
(170)
142
2
$144
912
47
3
12
(3)
25
44
1,029
(930)
450
(480)
(783)
825
(553)
—
54
825
(924)
(556)
(7)
9
$2
2021
$1,346
(1,369)
988
52
64
152
—
15
211
1,459
(1,135)
875
(260)
50
—
(1,178)
(1)
60
775
(1,030)
(1,324)
(125)
144
$19
(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.
(b) During 2021, Con Edison identified that the reclassification of debt from long-term to current for the year ended December 31, 2020 had
been erroneously presented within the operating cash flow section as a cash inflow and in the financing section as a cash outflow in the
Condensed Statement of Cash Flows (Parent Company Only). The amounts for the year ended December 31, 2020 have been revised to
correct the error in the classification of $1,175 million from Other - net within Net Cash Flows from Operating Activities to Retirement of long-
term debt within Net Cash Flows Used in Financing Activities. Con Edison has evaluated the effect of these misstatements, both
qualitatively and quantitatively, and concluded that they are not material to the financial statements issued for the year ended December 31,
2020. These amounts were correctly presented on the Consolidated Statement of Cash Flows for the year ended December 31, 2020.
CON EDISON ANNUAL REPORT 2021
193
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
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
Total Assets
Liabilities and Shareholders’ Equity
Current Liabilities
Long-term debt due within one year
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,
2021
2020
$19
—
3
1,199
28
14
1,263
19,951
406
—
—
$144
1
18
1,256
62
12
1,493
18,670
406
55
875
$21,620
$21,499
$293
50
1
517
2
9
872
64
936
647
9,748
10,289
20,037
$21,620
$1,178
—
—
517
6
12
1,713
—
1,713
939
8,844
10,003
18,847
$21,499
(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.
194
CON EDISON ANNUAL REPORT 2021
Valuation and Qualifying Accounts
For the Years Ended December 31, 2021, 2020 and 2019
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
2021
2020
2019
2021
2020
2019
$154
$74
$68
$143
$68
$61
$83
$72
$77
$78
$65
$72
$—
$—
$—
$—
$—
$—
$102
$8
$(71)
$102
$10
$(65)
$339
$154
$74
$323
$143
$68
(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.
CON EDISON ANNUAL REPORT 2021
195
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.
Item 9C: Disclosure Regarding Foreign Jurisdictions that Prevent Inspections
Not Applicable.
196
CON EDISON ANNUAL REPORT 2021
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 16, 2022. The proxy statement is to be filed pursuant to
Regulation 14A not later than 120 days after December 31, 2021, 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, 2021 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)
104,954
1,379,899
—
1,484,853
1,000 (d)
1,485,853
—
—
—
—
—
—
—
3,013,906
4,017,812
7,031,718
—
7,031,718
(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 104,954 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 (1,022,520 shares for performance restricted stock units and 61,620 shares for time-based restricted stock units); (B) 295,759 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 O 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 “Information about our Executive Officers.”
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).
CON EDISON ANNUAL REPORT 2021
197
Fees paid or payable by CECONY to its principal accountant, PricewaterhouseCoopers LLP, for services related to
2021 and 2020 are as follows:
Audit fees
Audit-related fees (a)
Total fees
2021
$3,648,191
488,806
$4,136,997
2020
$3,551,252
1,145,994
$4,697,246
(a) Relates to assurance and related service fees that are reasonably related to the performance of the annual audit or quarterly reviews of the
company's financial statements that are not specifically deemed “Audit Services.” The major items included in audit-related fees in 2020
and 2021 are fees related to reviews of system implementations and associated internal controls.
Con Edison’s Audit Committee or, as delegated by the Audit Committee, the Chair of the Committee, approves in
advance each auditing service and non-audit service permitted by applicable laws and regulations, including tax
services, to be provided to CECONY by its independent accountants.
198
CON EDISON ANNUAL REPORT 2021
Part IV
Item 15: Exhibits and Financial Statement Schedules
(a) Documents filed as part of this report:
1. List of Financial Statements – See financial statements listed in Item 8.
2. List of Financial Statement Schedules – See schedules listed in Item 8.
3. List of Exhibits
Exhibits listed below which have been filed previously with the Securities and Exchange Commission pursuant to
the Securities Act of 1933 and the Securities Exchange Act of 1934, and which were designated as noted below, are
hereby incorporated by reference and made a part of this report with the same effect as if filed with the report.
Exhibits listed below that were not previously filed are filed herewith.
CON EDISON ANNUAL REPORT 2021
199
Con Edison
3.1.1
Restated Certificate of Incorporation of Consolidated Edison, Inc. (Designated in Con Edison’s Annual Report on Form 10-K for the
year ended December 31, 2017 (File No. 1-14514) as Exhibit 3.1.1)
3.1.2
By-laws of Con Edison, effective as of February 18, 2021. (Designated in Con Edison’s Current Report on Form 8-K, dated
February 18, 2021 (File No. 1-14514) as Exhibit 3)
4.1.1 Description of Con Edison's Common Shares ($.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 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 Severance Program for Officers of Consolidated Edison, Inc. and its Subsidiaries, as amended and restated effective as of
December 1, 2021.
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 to The Consolidated Edison, Inc. Stock Purchase Plan. (Designated in Con Edison's Current Report on Form 10-
K for the year ended December 31, 2016 (File No. 1-14514) as Exhibit 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. (Designated in Con Edison's Annual Report on Form 10-
K for the year ended December 31, 2020 (File No. 1-14514) as Exhibit 10.1.3.4)
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. (Designated in Con Edison's Annual Report
on Form 10-K for the year ended December 31, 2020 (File No. 1-14514) as Exhibit 10.1.4.9)
10.1.4.10 Amendment to the Consolidated Edison Retirement Plan, effective January 1, 2022
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)
200
CON EDISON ANNUAL REPORT 2021
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. (Designated in Con Edison's Annual Report
on Form 10-K for the year ended December 31, 2020 (File No. 1-14514) as Exhibit 10.1.5.6)
10.1.5.7 Amendment to the Consolidated Edison Thrift Savings Plan, effective January 1, 2022
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 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)
10.1.7.3 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)
10.1.8.4 Form of Performance Unit Award for Officers under the Consolidated Edison, Inc. Long Term Incentive Plan.
10.1.8.5 Form of Time-Based Unit Award under the Consolidated Edison, Inc. Long Term Incentive Plan.
10.1.9 The Consolidated Edison, Inc. Executive Incentive Plan, as amended and restated effective January 1, 2020.
10.1.10 Description of Directors’ Compensation, effective as of December 31,2021.
10.1.11
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)
10.1.12 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)
10.1.13 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)
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)
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
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CON EDISON ANNUAL REPORT 2021
201
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 May 17, 2021. (Designated in CECONY’s Quarterly Report on Form 10-Q for the quarterly period
ended June 30, 2021 (File No. 1-14514) as Exhibit 3.2)
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)
202
CON EDISON ANNUAL REPORT 2021
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
2.40% Series 2021 A
2.40% Series 2021 A
3.60% Series 2021 B
3.20% Series 2021 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
8-K
8-K
8-K
8-K
Date
4/7/2003
6/10/2003
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
6/2/2010
6/2/2010
3/8/2012
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
11/9/2020
6/3/2021
11/29/2021
6/3/2021
11/29/2021
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
4.1
4.1
4.2
4.2
CON EDISON ANNUAL REPORT 2021
203
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)
10.2.3.7 Amendment to the Consolidated Edison Company of New York, Inc. Supplemental Retirement Income Plan.
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 its Participating
Employers, as amended and restated effective as of December 1, 2021.
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
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204
CON EDISON ANNUAL REPORT 2021
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.
CON EDISON ANNUAL REPORT 2021
205
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 17,
2022.
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 17, 2022.
Signature
/s/ Timothy P. Cawley
Timothy P. Cawley
/s/ Robert Hoglund
Robert Hoglund
/s/ Joseph Miller
Joseph Miller
/s/ Ellen V. Futter
Ellen V. Futter
/s/ John F. Killian
John F. Killian
/s/ Karol V. Mason
Karol V. Mason
/s/ John McAvoy
John McAvoy
/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
206
CON EDISON ANNUAL REPORT 2021
Title
Chairman of the Board, President, Chief Executive Officer
and Director (Principal Executive Officer)
Chairman of the Board, 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)
Director
Trustee
Director
Trustee
Director
Trustee
Director
Trustee
Director
Trustee
Director
Trustee
Director
Trustee
Director
Trustee
Director
Trustee
Director
Trustee
Director
Trustee
Investor
Information
Management
CONSOLIDATED EDISON, INC.
Timothy P. Cawley, Chairman, 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, Chairman and 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
Katherine L. Boden, Gas Operations
Lore de la Bastide, Utility Shared Services
Mary E. Kelly, Corporate Shared Services
Patrick G. McHugh, Electric Operations
Michele L. O’Connell, Customer Operations
Frances A. Resheske, Corporate Affairs
Leonard P. Singh, Customer Energy Solutions
Vice Presidents
Walter Alvarado, System and Transmission Operations
Lance P. Becca, Staten Island and Electric Services
Robert B. Brantley, Central 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
Amr A. Hassan, Gas Engineering
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
Venetia Lannon, Environment, Health and Safety
Scott A. Levinson, Legal Services
Joseph Miller, Controller
Richard B. Miller, Energy and Environmental Law
CON EDISON ANNUAL REPORT 2021
207
Board of Directors
CONSOLIDATED EDISON, INC.
Timothy P. Cawley
Chairman, 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
President
John Jay College of Criminal Justice, New York, NY
John McAvoy
Former Non-Executive Chairman
Consolidated Edison, Inc., New York, NY
Dwight A. McBride
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
Former 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
Edlyn Misquita, General Auditor
Gurudatta D. Nadkarni, Strategic Planning
Steven J. Parisi, Engineering and Planning
Lisa Primeggia, Manhattan Electric Operations
Christopher Raup, Energy Policy and Regulatory Affairs
Yukari Saegusa, Treasurer
Scott Sanders, Financial Planning and Analysis
Constantine Sanoulis, Construction
Lynton Scotland, Supply Chain
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
Vanessa M. Franklin, 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, Electric Transmission
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, Assets
Thomas DiCapua, Wholesale Energy Services
George Germano, Asset Optimization
Michael Gibson, Special Projects
Mark Glucksman, Finance and Accounting
Nelly Jefferson, IT and PMO
Paul F. Mapelli, General Counsel and Secretary
Michael Perna, Strategic Initiatives
Lorena Tavlarios, Central Services
208
CON EDISON ANNUAL REPORT 2021
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 2022 Annual Meeting of
Stockholders will be held remotely 10 a.m. on Monday,
May 16, 2022. Shareholders may attend virtually by visiting
www.virtualshareholdermeeting.com/ED2022 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 4, 2022.
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
Toll-free telephone: 1-800-522-5522
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
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
INVESTOR RELATIONS
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.
CON EDISON ANNUAL REPORT 2021
209
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certification.
This annual report was printed by a printer with Forest
Stewardship Council (FSC) Chain of Custody
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
FSC-certified. The nonrecycled portions of these
made from fiber sourced from well managed forests and
other controlled wood sources.
papers are
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papers are
Savings derived from using these papers, rather than 100%
virgin fiber, include:
106 trees preserved for the future
48,047 gallons of wastewater
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not discharged
3,089 pounds of solid
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waste not generated
8.2 pounds of hazardous
not emitted
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air pollutants
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8,419 pounds of greenhouse
prevented, equivalent to taking 1 car off
the road for 1r
gases
year
Environmental impact estimates above were made
using the Environmental Paper Network Paper
For more information visit PaperCalculator.org.
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Calculator.
How to Reach Us
Consolidated Edison, Inc.
Irving Place
Y
New York, NY 10003
1-212-460-4600
conEdison.com
REGULATED BUSINESSES
Consolidated Edison Company of New York, Inc.
4 Irving Place
Y
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
Y
Con Edison Transmission, Inc.
4 Irving Place
New York, NY 10003
Y
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
Y
Consolidated Edison Energy, Inc.
100 Summit Lake Drive, Suite 210
Valhalla, NY 10595
1-914-286-7000
conEdEnergy.com
Y
Consolidated Edison Development, Inc.
100 Summit Lake Drive, Suite 210
Valhalla, NY 10595
1-914-286-7000
conEdDev.com
Y
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nation’s largest investor-owned energy-delivery companies, with approximately $14 billion in annual revenue
Consolidated Edison, Inc. is one of the
and $63 billion in assets. The company provides a wide range of energy-related
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subsidiaries: Consolidated Edison Company of New
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 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.
and northern New Jersey; Con Edison Clean Energy Businesses, Inc., which through its subsidiaries develops, owns,
York, Inc., a regulated utility providing electric, gas and steam service in New York City
products and services to its customers through the following
and
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Con Edison Annual Report 2021
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