Item 8. Financial Statements and Supplementary Data

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Item 8. Financial Statements and Supplementary Data


Financial Statements			Page
Supplementary Financial Information

Con Edison
Report of Management on Internal Control Over Financial Reporting			81
Report of Independent Registered Public Accounting Firm (PCAOB ID 238)			82
Consolidated Income Statement for the years ended December 31, 202 3 , 202 2 , and 2021			84
Consolidated Statement of Comprehensive Income for the years ended December 31, 2023, 2022, and 2021			85
Consolidated Statement of Cash Flows for the years ended December 31, 2023, 2022, and 2021			86
Consolidated Balance Sheet at December 31, 202 3 and 2022			87
Consolidated Statement of Equity for the years ended December 31, 2023, 2022, and 2021			89
Consolidated Statement of Capitalization at December 31, 202 3 and 2022			90

CECONY
Report of Management on Internal Control Over Financial Reporting			93
Report of Independent Registered Public Accounting Firm (PCAOB ID 238)			94
Consolidated Income Statement for the years ended December 31, 2023, 2022, and 2021			96
Consolidated Statement of Comprehensive Income for the years ended December 31, 2023, 2022, and 2021			97
Consolidated Statement of Cash Flows for the years ended December 31, 2023, 2022, and 2021			98
Consolidated Balance Sheet at December 31, 202 3 and 2022			99
Consolidated Statement of Shareholder’s Equity for the years ended December 31, 2023, 2022, and 2021			101
Consolidated Statement of Capitalization at December 31, 202 3 and 2022			102

Notes to the Financial Statements			104

Financial Statement Schedules
Con Edison
Schedule I - Condensed Financial Information of Consolidated Edison, Inc. at December 31, 202 3 and 202 2 and for the years ended December 31, 2023, 2022, and 2021			173

All other schedules are omitted because they are not applicable or the required information is shown in financial statements or notes thereto.


80			CON EDISON ANNUAL REPORT 2023

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, 2023, 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, 2023.

The effectiveness of the Company’s internal control over financial reporting as of December 31, 2023, 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 15, 2024


CON EDISON ANNUAL REPORT 2023			81

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 schedule, of Consolidated Edison, Inc. and its subsidiaries (the “Company”) as listed in the index appearing under Item 8 (collectively referred to as the “consolidated financial statements”). We also have audited the Company's internal control over financial reporting as of December 31, 2023, 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, 2023 and 2022, and the results of its operations and its cash flows for each of the three years in the period ended December 31, 2023 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, 2023, 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.


82			CON EDISON ANNUAL REPORT 2023

Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Also, projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.

Critical Audit Matters

The critical audit matter communicated below is a matter arising from the current period audit of the consolidated financial statements that was communicated or required to be communicated to the audit committee and that (i) relates to accounts or disclosures that are material to the consolidated financial statements and (ii) involved our especially challenging, subjective, or complex judgments. The communication of critical audit matters does not alter in any way our opinion on the consolidated financial statements, taken as a whole, and we are not, by communicating the critical audit matter below, providing a separate opinion on the critical audit matter or on the accounts or disclosures to which it relates.

Accounting for the Effects of Regulatory Matters

As described in Notes A and B to the consolidated financial statements, the Company applies the 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, 2023, there were $4,888 million of deferred costs included in regulatory assets and $5,473 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 15, 2024

We have served as the Company’s or its predecessors' auditor since 1938.


CON EDISON ANNUAL REPORT 2023			83

Consolidated Edison, Inc.

Consolidated Income Statement


	For the Years Ended December 31,
(Millions of Dollars/Except Share Data)	2023	2022	2021
OPERATING REVENUES
Electric	$10,835	$10,522	$9,485
Gas	3,127	3,237	2,638
Steam	569	593	532
Non-utility	132	1,318	1,021
TOTAL OPERATING REVENUES	14,663	15,670	13,676
OPERATING EXPENSES
Purchased power	2,541	2,479	1,835
Fuel	282	356	229
Gas purchased for resale	829	1,245	690
Other operations and maintenance	3,606	3,905	3,254
Depreciation and amortization	2,031	2,056	2,032
Taxes, other than income taxes	3,043	3,005	2,810
TOTAL OPERATING EXPENSES	12,332	13,046	10,850


Gain on sale of the Clean Energy Businesses	865	—	—
OPERATING INCOME	3,196	2,624	2,826
OTHER INCOME (DEDUCTIONS)
Investment income (loss)	62	20	(420)
Other income	834	402	22
Allowance for equity funds used during construction	26	19	21
Other deductions	(92)	(115)	(161)
TOTAL OTHER INCOME (DEDUCTIONS)	830	326	(538)
INCOME BEFORE INTEREST AND INCOME TAX EXPENSE	4,026	2,950	2,288
INTEREST EXPENSE (INCOME)
Interest on long-term debt	962	987	930
Other interest expense (income)	113	(99)	(14)
Allowance for borrowed funds used during construction	(52)	(36)	(11)
NET INTEREST EXPENSE	1,023	852	905
INCOME BEFORE INCOME TAX EXPENSE	3,003	2,098	1,383
INCOME TAX EXPENSE	487	498	190
NET INCOME	$2,516	$1,600	$1,193
Loss attributable to non-controlling interest	$(3)	$(60)	$(153)
NET INCOME FOR COMMON STOCK	$2,519	$1,660	$1,346
Net income per common share — basic	$7.25	$4.68	$3.86
Net income per common share — diluted	$7.21	$4.66	$3.85
AVERAGE NUMBER OF SHARES OUTSTANDING — BASIC (IN MILLIONS)	347.7	354.5	348.4
AVERAGE NUMBER OF SHARES OUTSTANDING — DILUTED (IN MILLIONS)	349.3	355.8	349.4

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


84			CON EDISON ANNUAL REPORT 2023

Consolidated Edison, Inc.

Consolidated Statement of Comprehensive Income


	For the Years Ended December 31,
(Millions of Dollars)	2023	2022	2021
NET INCOME	$2,516	$1,600	$1,193
LOSS ATTRIBUTABLE TO NON-CONTROLLING INTEREST	3	60	153
OTHER COMPREHENSIVE INCOME, NET OF TAXES
Pension and other postretirement benefit plan liability adjustments, net of taxes	—	16	30
Other income, net of taxes	—	1	—
TOTAL OTHER COMPREHENSIVE INCOME, NET OF TAXES	—	17	30
COMPREHENSIVE INCOME	$2,519	$1,677	$1,376

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


CON EDISON ANNUAL REPORT 2023			85

Consolidated Edison, Inc.

Consolidated Statement of Cash Flows


	For the Years Ended December 31,
(Millions of Dollars)	2023	2022	2021
OPERATING ACTIVITIES
Net Income	$2,516	$1,600	$1,193
PRINCIPAL NON-CASH CHARGES/(CREDITS) TO INCOME
Depreciation and amortization	2,031	2,056	2,032
Impairment of assets	—	—	443
Deferred income taxes	132	435	133
Rate case amortization and accruals	92	73	(16)

Net derivative (gains)/losses	12	(181)	(53)



Pre-tax gain on sale of the Clean Energy Businesses	(865)	—	—
Other non-cash items, net	(90)	90	127
CHANGES IN ASSETS AND LIABILITIES
Accounts receivable - customers	(275)	(285)	(411)
Unbilled revenue and net unbilled revenue deferrals	(48)	(96)	(53)
Allowance for uncollectible accounts – customers	38	5	169

Materials and supplies, including fuel oil and gas in storage	38	(111)	(82)
Revenue decoupling mechanism receivable	(39)	26	(53)
Other receivables and other current assets	141	(21)	(157)

Prepayments	(200)	26	(24)
Accounts payable	(285)	558	44
Pensions and retiree benefits obligations, net	(201)	176	266
Pensions and retiree benefits contributions	(33)	(39)	(472)

Accrued taxes	(13)	7	(46)
Accrued interest	(7)	42	4
Superfund and environmental remediation costs	(12)	(22)	(10)
Distributions from equity investments	31	20	18

Deferred charges, noncurrent assets, leases, net and other regulatory assets	(1,216)	(870)	(496)
Deferred credits, noncurrent liabilities and other regulatory liabilities	196	445	258
Other current liabilities	213	1	(81)
NET CASH FLOWS FROM OPERATING ACTIVITIES	2,156	3,935	2,733
INVESTING ACTIVITIES
Utility construction expenditures	(4,353)	(3,824)	(3,630)
Cost of removal less salvage	(387)	(337)	(323)
Non-utility construction expenditures	(141)	(344)	(323)




Proceeds from sale of the Clean Energy Businesses, net of cash and cash equivalents sold	3,927	—	629


Divestiture of renewable electric projects	—	—	183
Other investing activities	(49)	(60)	(20)
NET CASH FLOWS USED IN INVESTING ACTIVITIES	(1,003)	(4,565)	(3,484)
FINANCING ACTIVITIES
Net (payment)/issuance of short-term debt	(752)	1,702	(382)
Issuance of long-term debt	2,050	800	2,804
Retirement of long-term debt	(710)	(406)	(1,960)
Debt issuance costs	(32)	(13)	(40)
Common stock dividends	(1,096)	(1,089)	(1,030)
Issuance of common shares - public offering	—	—	775
Issuance of common shares for stock plans	56	57	60
Repurchase of common shares	(1,000)	—	—
Distribution to noncontrolling interest	(4)	(37)	(23)
Sale of equity interest	—	—	257
NET CASH FLOWS FROM (USED IN) FINANCING ACTIVITIES	(1,488)	1,014	461
CASH, TEMPORARY CASH INVESTMENTS AND RESTRICTED CASH:
NET CHANGE FOR THE PERIOD	(335)	384	(290)
BALANCE AT BEGINNING OF PERIOD	1,530	1,146	1,436
BALANCE AT END OF PERIOD	$1,195	$1,530	$1,146
LESS: CHANGE IN CASH BALANCES HELD FOR SALE	5	248	—
BALANCE AT END OF PERIOD EXCLUDING HELD FOR SALE	$1,190	$1,282	$1,146

SUPPLEMENTAL DISCLOSURE OF CASH INFORMATION
Cash paid during the period for:
Interest	$987	$900	$924
Income taxes	$397	$47	$9
SUPPLEMENTAL DISCLOSURE OF NON-CASH INFORMATION
Construction expenditures in accounts payable	$598	$681	$457
Issuance of common shares for dividend reinvestment	$31	$31	$49

Software licenses acquired but unpaid as of end of period	$—	$2	$23
Equipment acquired but unpaid as of end of period	$11	$17	$22

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


86			CON EDISON ANNUAL REPORT 2023

Consolidated Edison, Inc.

Consolidated Balance Sheet


(Millions of Dollars)	December 31, 2023	December 31, 2022
ASSETS
CURRENT ASSETS
Cash and temporary cash investments	$1,189	$1,282

Accounts receivable — customers, net allowance for uncollectible accounts of $360 and $322 in 2023 and 2022, respectively	2,418	2,192
Other receivables, net allowance for uncollectible accounts of $13 and $10 in 2023 and 2022, respectively	444	164
Taxes receivable	1	10
Accrued unbilled revenue	722	702
Fuel oil, gas in storage, materials and supplies, at average cost	469	492
Prepayments	470	264
Regulatory assets	281	305

Restricted cash	1	—
Revenue decoupling mechanism receivable	203	164
Fair value of derivative assets	52	59
Assets held for sale	163	7,162
Other current assets	124	176
TOTAL CURRENT ASSETS	6,537	12,972
INVESTMENTS	999	841
UTILITY PLANT, AT ORIGINAL COST
Electric	39,071	36,819
Gas	14,318	13,378
Steam	3,085	2,935
General	4,835	4,205
TOTAL	61,309	57,337
Less: Accumulated depreciation	14,157	13,069
Net	47,152	44,268
Construction work in progress	2,442	2,484
NET UTILITY PLANT	49,594	46,752
NON-UTILITY PLANT
Non-utility property, net accumulated depreciation of $24 and $23 in 2023 and 2022, respectively	13	13
Construction work in progress	1	1
NET PLANT	49,608	46,766
OTHER NONCURRENT ASSETS
Goodwill	408	408

Operating lease right-of-use-asset	533	568
Regulatory assets	4,607	3,974
Pension and retiree benefits	3,275	3,269
Fair value of derivative assets	48	85
Other deferred charges and noncurrent assets	316	182
TOTAL OTHER NONCURRENT ASSETS	9,187	8,486
TOTAL ASSETS	$66,331	$69,065

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


CON EDISON ANNUAL REPORT 2023			87

Consolidated Edison, Inc.

Consolidated Balance Sheet


(Millions of Dollars)	December 31, 2023	December 31, 2022
LIABILITIES AND SHAREHOLDERS’ EQUITY
CURRENT LIABILITIES
Long-term debt due within one year	$250	$649
Term loan	—	400
Notes payable	2,288	2,640
Accounts payable	1,775	1,955
Customer deposits	396	358
Accrued taxes	73	102
Accrued interest	170	153
Accrued wages	125	116
Fair value of derivative liabilities	193	42
Regulatory liabilities	145	374

System benefit charge	444	390
Operating lease liabilities	116	103
Liabilities held for sale	76	3,610
Other current liabilities	411	444
TOTAL CURRENT LIABILITIES	6,462	11,336
NONCURRENT LIABILITIES
Provision for injuries and damages	188	181
Pensions and retiree benefits	592	577
Superfund and other environmental costs	1,118	997
Asset retirement obligations	522	500
Fair value of derivative liabilities	121	13
Deferred income taxes and unamortized investment tax credits	8,069	7,641
Operating lease liabilities	429	476
Regulatory liabilities	5,328	6,027
Other deferred credits and noncurrent liabilities	417	281
TOTAL NONCURRENT LIABILITIES	16,784	16,693
LONG-TERM DEBT	21,927	20,147
COMMITMENTS, CONTINGENCIES, AND GUARANTEES (Note B, Note G, and Note H)
EQUITY
Common shareholders’ equity	21,158	20,687
Noncontrolling interest	—	202
TOTAL EQUITY (See Statement of Equity)	21,158	20,889
TOTAL LIABILITIES AND EQUITY	$66,331	$69,065

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


88			CON EDISON ANNUAL REPORT 2023

Consolidated Edison, Inc.

Consolidated Statement of Equity


(In Millions, except for dividends per share)	Common Stock		Additional Paid-In Capital	Retained Earnings	Treasury Stock		Capital Stock Expense	Accumulated Other Comprehensive Income/(Loss)	Non-controlling Interest
Shares	Amount	Shares	Amount	Total









































BALANCE AS OF DECEMBER 31, 2020	342	$36	$8,808	$11,178	23	$(1,038)	$(112)	$(25)	$218	$19,065
Net income (loss)				1,346					(153)	1,193
Common stock dividends ($3.10 per share)				(1,079)						(1,079)
Issuance of common shares - public offering	10	1	775				(10)			766
Issuance of common shares for stock plans	2		127							127
Other comprehensive income								30		30
Distributions to noncontrolling interests									(23)	(23)
Net proceeds from sale of equity interest									257	257
BALANCE AS OF DECEMBER 31, 2021	354	$37	$9,710	$11,445	23	$(1,038)	$(122)	$5	$299	$20,336
Net income (loss)				1,660					(60)	1,600
Common stock dividends ($3.16 per share)				(1,120)						(1,120)

Issuance of common shares for stock plans	1		93							93
Other comprehensive income								17		17
Distributions to noncontrolling interests									(37)	(37)

BALANCE AS OF DECEMBER 31, 2022	355	$37	$9,803	$11,985	23	$(1,038)	$(122)	$22	$202	$20,889
Net income (loss)				2,519					(3)	2,516
Common stock dividends ($3.24 per share)				(1,127)						(1,127)

Issuance of common shares for stock plans	1		89							89

Common stock repurchases	(11)		(31)		11	(979)				(1,010)
Distributions to noncontrolling interests									(4)	(4)
Disposal of Clean Energy Businesses									(195)	(195)
BALANCE AS OF DECEMBER 31, 2023	345	$37	$9,861	$13,377	34	$(2,017)	$(122)	$22	$—	$21,158

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


CON EDISON ANNUAL REPORT 2023			89

Consolidated Edison, Inc.

Consolidated Statement of Capitalization


	Shares outstanding December 31,		At December 31,
(In Millions)	2023	2022	2023	2022
TOTAL EQUITY BEFORE ACCUMULATED OTHER COMPREHENSIVE INCOME	345	355	$21,136	$20,665
Pension plan liability adjustments, net of taxes			23	23
Unrealized 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			(1)	(1)
TOTAL ACCUMULATED OTHER COMPREHENSIVE INCOME, NET OF TAXES			22	22
Equity			21,158	20,687
Noncontrolling interest			—	202
TOTAL EQUITY (See Statement of Equity)			$21,158	$20,889

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


90			CON EDISON ANNUAL REPORT 2023

Consolidated Edison, Inc.

Consolidated Statement of Capitalization


LONG-TERM DEBT (Millions of Dollars)			At December 31,
Maturity	Interest Rate	Series	2023	2022
DEBENTURES:



2023	0.65	2020A	$—	$650
2024	3.30	2014B	250	250
2026	2.90	2016B	250	250
2027	6.50	1997F	80	80
2027	3.125	2017B	350	350
2028	3.80	2018A	300	300
2028	4.00	2018D	500	500
2029	2.94	2019B	44	44
2030	3.35	2020A	600	600
2030	2.02	2020A	35	35
2031	2.40	2021A	900	900
2031	2.31	2021A	45	45
2032	5.70	2022A	100	100
2033	5.875	2003A	175	175
2033	5.10	2003C	200	200
2033	5.20	2023A	500	—
2034	5.70	2004B	200	200
2034	5.50	2023B	600	—
2035	5.30	2005A	350	350
2035	5.25	2005B	125	125
2036	5.85	2006A	400	400
2036	6.20	2006B	400	400
2036	5.70	2006E	250	250
2037	6.30	2007A	525	525
2038	6.75	2008B	600	600
2039	6.00	2009B	60	60
2039	5.50	2009C	600	600
2039	3.46	2019C	38	38
2040	5.70	2010B	350	350
2040	5.50	2010B	115	115
2042	4.20	2012A	400	400
2043	3.95	2013A	700	700
2044	4.45	2014A	850	850
2045	4.50	2015A	650	650
2045	4.95	2015A	120	120
2045	4.69	2015B	100	100
2046	3.85	2016A	550	550
2046	3.88	2016A	75	75
2047	3.875	2017A	500	500
2048	4.65	2018E	600	600
2048	4.35	2018A	125	125
2048	4.35	2018B	25	25
2049	4.125	2019A	700	700
2049	3.73	2019A	43	43
2050	3.95	2020B	1,000	1,000
2050	3.24	2020B	40	40
2051	3.17	2021B	30	30
2051	3.20	2021C	600	600
2052	6.15	2022A	700	700
2053	5.90	2023C	900	—
2053	6.59	2023A	50	—


CON EDISON ANNUAL REPORT 2023			91


2054	4.625	2014C	750	750
2056	4.30	2016C	500	500
2057	4.00	2017C	350	350
2058	4.50	2018B	700	700
2059	3.70	2019B	600	600
2060	3.00	2020C	600	600
2061	3.60	2021B	750	750
TOTAL DEBENTURES			$21,950	$20,550

Consolidated Edison, Inc.

Consolidated Statement of Capitalization


LONG-TERM DEBT (Millions of Dollars)				At December 31,
Maturity	Interest Rate		Series	2023	2022
TAX-EXEMPT DEBT - Notes issued to New York State Energy Research and Development Authority for Facilities Revenue Bonds:

2036	3.92	(a)	2010A	$225	$225
2039	3.83	(a)	2004C	99	99
2039	3.80	(a)	2005A	126	126
TOTAL TAX-EXEMPT DEBT				450	450
PROJECT DEBT (b):
2023	6.91	(c)	Copper Mountain Solar 2	—	179

2025	6.91	(c)	Copper Mountain Solar 3	—	229
2026	5.92	(c)	CED Southwest	—	408
2028	4.41		Wind Holdings	—	87
2028	6.48	(c)	Copper Mountain Solar 1	—	41
2028	6.42	(c)	CED California Texas	—	236
2031	2.24 - 3.03	(d)	Mesquite Solar 1	—	149
2031-2038	5.25 - 4.95	(d)	Texas Solar 4	—	49
2036	3.94		California Solar 2	—	86
2036	4.07		California Solar 3	—	77
2037	4.78		California Solar	—	168
2038	3.82		California Solar 4	—	265
2039	4.82		Broken Bow II	62	64
2040	4.53		Texas Solar 5	—	132
2041	4.21		Texas Solar 7	—	180
2042	4.45		Upton County Solar	—	81
2046	3.77		CED Nevada Virginia	—	228

Other project debt				—	6


TOTAL PROJECT DEBT				62	2,665

Other long-term debt				—	(1)
Unamortized debt expense				(162)	(172)
Unamortized debt discount				(60)	(51)
TOTAL				22,240	23,441
Less: Long-term debt due within one year				251	1,002
TOTAL LONG-TERM DEBT				21,989	22,439
Less: Held for sale project debt, net (b)				62	2,292
TOTAL LONG-TERM DEBT EXCLUDING HELD FOR SALE				21,927	20,147
TOTAL CAPITALIZATION				$43,085	$40,834

(a) Rates reset weekly; December 31, 2023 rates shown.

(b) On March 1, 2023, Con Edison completed the sale of all of the stock of the Clean Energy Businesses. See Note W and X.

(c) March 1, 2023 effective rates shown, reflecting variable interest rates on the debt that are reset quarterly or semi-annually. Refer to Note Q for the effect of applicable interest rate swaps.

(d) Range of rates shown reflect multiple tranches associated with the debt.

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


92			CON EDISON ANNUAL REPORT 2023

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.

Management of the Company assessed the effectiveness of internal control over financial reporting as of December 31, 2023, 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, 2023.


			/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 15, 2024


CON EDISON ANNUAL REPORT 2023			93

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, of Consolidated Edison Company of New York, Inc. and its subsidiaries (the “Company”) as listed in the index appearing under Item 8 (collectively referred to as the “consolidated financial statements”). We also have audited the Company's internal control over financial reporting as of December 31, 2023, based on criteria established in Internal Control - Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO).

Basis for Opinions

Definition and Limitations of Internal Control over Financial Reporting


94			CON EDISON ANNUAL REPORT 2023

become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.

Critical Audit Matters

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, 2023, there were $4,568 million of deferred costs included in regulatory assets and $4,925 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.

/s/ PricewaterhouseCoopers LLP

New York, New York

February 15, 2024

We have served as the Company’s auditor since 1938.


CON EDISON ANNUAL REPORT 2023			95

Consolidated Edison Company of New York, Inc.

Consolidated Income Statement


	For the Years Ended December 31,
(Millions of Dollars)	2023	2022	2021
OPERATING REVENUES
Electric	$10,078	$9,751	$8,806
Gas	2,829	2,924	2,378
Steam	569	593	532
TOTAL OPERATING REVENUES	13,476	13,268	11,716
OPERATING EXPENSES
Purchased power	2,294	2,201	1,633
Fuel	282	356	229
Gas purchased for resale	677	869	541
Other operations and maintenance	3,176	3,042	2,452
Depreciation and amortization	1,924	1,778	1,705
Taxes, other than income taxes	2,946	2,887	2,696
TOTAL OPERATING EXPENSES	11,299	11,133	9,256
OPERATING INCOME	2,177	2,135	2,460
OTHER INCOME (DEDUCTIONS)
Investment and other income	759	376	16
Allowance for equity funds used during construction	22	18	19
Other deductions	(49)	(62)	(143)
TOTAL OTHER INCOME (DEDUCTIONS)	732	332	(108)
INCOME BEFORE INTEREST AND INCOME TAX EXPENSE	2,909	2,467	2,352
INTEREST EXPENSE (INCOME)
Interest on long-term debt	886	808	759
Other interest expense	108	47	13
Allowance for borrowed funds used during construction	(49)	(33)	(10)
NET INTEREST EXPENSE	945	822	762
INCOME BEFORE INCOME TAX EXPENSE	1,964	1,645	1,590
INCOME TAX EXPENSE	358	255	246
NET INCOME	$1,606	$1,390	$1,344

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


96			CON EDISON ANNUAL REPORT 2023

Consolidated Edison Company of New York, Inc.

Consolidated Statement of Comprehensive Income


	For the Years Ended December 31,
(Millions of Dollars)	2023	2022	2021
NET INCOME	$1,606	$1,390	$1,344
OTHER COMPREHENSIVE INCOME (LOSS), NET OF TAXES
Pension and other postretirement benefit plan liability adjustments, net of taxes	(2)	3	7
Other income, net of taxes	—	1	—
TOTAL OTHER COMPREHENSIVE INCOME (LOSS), NET OF TAXES	(2)	4	7
COMPREHENSIVE INCOME	$1,604	$1,394	$1,351

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


CON EDISON ANNUAL REPORT 2023			97

Consolidated Edison Company of New York, Inc.

Consolidated Statement of Cash Flows


	For the Years Ended December 31,
(Millions of Dollars)	2023	2022	2021
OPERATING ACTIVITIES
Net income	$1,606	$1,390	$1,344
PRINCIPAL NON-CASH CHARGES/(CREDITS) TO INCOME
Depreciation and amortization	1,924	1,778	1,705
Deferred income taxes	556	85	124
Rate case amortization and accruals	72	55	(16)


Other non-cash items, net	(40)	148	30
CHANGES IN ASSETS AND LIABILITIES
Accounts receivable - customers	(270)	(268)	(412)
Allowance for uncollectible accounts - customers	39	10	166
Materials and supplies, including fuel oil and gas in storage	18	(71)	(78)
Revenue decoupling mechanism receivable	(26)	27	(62)
Other receivables and other current assets	(136)	111	(161)
Accounts receivables from/(to) affiliated companies	(100)	(8)	96
Unbilled revenue and net unbilled revenue deferrals	(47)	(28)	(16)
Prepayments	(106)	(11)	(53)
Accounts payable	(137)	322	65
Accounts payable to affiliated companies	(1)	(1)	(4)
Pensions and retiree benefits obligations, net	(204)	182	283
Pensions and retiree benefits contributions	(33)	(26)	(433)

Superfund and environmental remediation costs	(12)	(20)	(18)
Accrued taxes	(35)	15	(54)
Accrued taxes from/(to) affiliated companies	(88)	79	9
Accrued interest	25	7	1

Deferred charges, noncurrent assets, leases, net and other regulatory assets	(1,158)	(852)	(484)
Deferred credits, noncurrent liabilities and other regulatory liabilities	199	332	210
Other current liabilities	239	7	(56)
NET CASH FLOWS FROM OPERATING ACTIVITIES	2,285	3,263	2,186
INVESTING ACTIVITIES
Utility construction expenditures	(4,059)	(3,596)	(3,413)
Cost of removal less salvage	(380)	(330)	(316)
NET CASH FLOWS USED IN INVESTING ACTIVITIES	(4,439)	(3,926)	(3,729)
FINANCING ACTIVITIES
Net (payment)/issuance of short-term debt	(397)	939	(299)
Issuance of long-term debt	2,000	700	2,250
Retirement of long-term debt	—	—	(640)
Debt issuance costs	(31)	(12)	(27)
Capital contribution by Con Edison	1,720	150	1,100
Dividend to Con Edison	(1,056)	(978)	(988)
NET CASH FLOWS FROM FINANCING ACTIVITIES	2,236	799	1,396
CASH, TEMPORARY CASH INVESTMENTS, AND RESTRICTED CASH
NET CHANGE FOR THE PERIOD	82	136	(147)
BALANCE AT BEGINNING OF PERIOD	1,056	920	1,067
BALANCE AT END OF PERIOD	$1,138	$1,056	$920

SUPPLEMENTAL DISCLOSURE OF CASH INFORMATION
Cash paid/(received) during the period for:
Interest	$882	$755	$739
Income taxes	$(27)	$87	$5
SUPPLEMENTAL DISCLOSURE OF NON-CASH INFORMATION
Construction expenditures in accounts payable	$564	$561	$406
Software licenses acquired but unpaid as of end of period	$—	$2	$22
Equipment acquired but unpaid as of end of period	$11	$17	$22

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


98			CON EDISON ANNUAL REPORT 2023

Consolidated Edison Company of New York, Inc.

Consolidated Balance Sheet


(Millions of Dollars)	December 31, 2023	December 31, 2022
ASSETS
CURRENT ASSETS
Cash and temporary cash investments	$1,138	$1,056

Accounts receivable – customers, net allowance for uncollectible accounts of $353 and $314 in 2023 and 2022, respectively	2,330	2,099
Other receivables, net allowance for uncollectible accounts of $9 and $7 in 2023 and 2022, respectively	332	147
Taxes receivable	—	5
Accrued unbilled revenue	678	573
Accounts receivable from affiliated companies	146	46
Fuel oil, gas in storage, materials and supplies, at average cost	422	440
Prepayments	329	223
Regulatory assets	254	286

Revenue decoupling mechanism receivable	190	164
Fair value of derivative assets	49	51
Other current assets	113	157
TOTAL CURRENT ASSETS	5,981	5,247
INVESTMENTS	608	539
UTILITY PLANT AT ORIGINAL COST
Electric	36,808	34,636
Gas	13,226	12,338
Steam	3,085	2,935
General	4,530	3,879
TOTAL	57,649	53,788
Less: Accumulated depreciation	13,171	12,047
Net	44,478	41,741
Construction work in progress	2,168	2,268
NET UTILITY PLANT	46,646	44,009
NON-UTILITY PROPERTY
Non-utility property, net accumulated depreciation of $25 in 2023 and 2022	2	2
NET PLANT	46,648	44,011
OTHER NONCURRENT ASSETS
Regulatory assets	4,314	3,669
Operating lease right-of-use asset	532	567
Pension and retiree benefits	3,184	3,184
Fair value of derivative assets	49	80
Other deferred charges and noncurrent assets	284	148
TOTAL OTHER NONCURRENT ASSETS	8,363	7,648
TOTAL ASSETS	$61,600	$57,445

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


CON EDISON ANNUAL REPORT 2023			99

Consolidated Edison Company of New York, Inc.

Consolidated Balance Sheet


(Millions of Dollars)	December 31, 2023	December 31, 2022
LIABILITIES AND SHAREHOLDER’S EQUITY
CURRENT LIABILITIES
Long-term debt due within one year	$250	$—
Notes payable	1,903	2,300
Accounts payable	1,629	1,763
Accounts payable to affiliated companies	16	17
Customer deposits	378	341
Accrued taxes	55	93
Accrued taxes to affiliated companies	1	89
Accrued interest	159	134
Accrued wages	114	105
Fair value of derivative liabilities	179	35
Regulatory liabilities	107	308
System benefit charge	406	351
Operating lease liabilities	116	103
Other current liabilities	381	397
TOTAL CURRENT LIABILITIES	5,694	6,036
NONCURRENT LIABILITIES
Provision for injuries and damages	185	177
Pensions and retiree benefits	542	526
Superfund and other environmental costs	1,026	903
Asset retirement obligations	520	499
Fair value of derivative liabilities	108	9
Deferred income taxes and unamortized investment tax credits	7,984	7,144
Operating lease liabilities	429	475
Regulatory liabilities	4,818	5,481
Other deferred credits and noncurrent liabilities	338	237
TOTAL NONCURRENT LIABILITIES	15,950	15,451
LONG-TERM DEBT	20,810	19,080
COMMITMENTS AND CONTINGENCIES (Note B and Note G)
SHAREHOLDER’S EQUITY (See Statement of Shareholder’s Equity)	19,146	16,878
TOTAL LIABILITIES AND SHAREHOLDER’S EQUITY	$61,600	$57,445

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


100			CON EDISON ANNUAL REPORT 2023

Consolidated Edison Company of New York, Inc.

Consolidated Statement of Shareholder’s Equity


(In Millions)	Common Stock		Additional Paid-In Capital	Retained Earnings	Repurchased Con Edison Stock	Capital Stock Expense	Accumulated Other Comprehensive Income/(Loss)	Total
Shares	Amount






























BALANCE AS OF DECEMBER 31, 2020	235	$589	$6,169	$9,122	$(962)	$(62)	$(7)	$14,849
Net income				1,344				1,344
Common stock dividend to Con Edison				(988)				(988)
Capital contribution by Con Edison			1,100					1,100
Other comprehensive income							7	7
BALANCE AS OF DECEMBER 31, 2021	235	$589	$7,269	$9,478	$(962)	$(62)	$—	$16,312
Net income				1,390				1,390
Common stock dividend to Con Edison				(978)				(978)
Capital contribution by Con Edison			150					150
Other comprehensive income							4	4
BALANCE AS OF DECEMBER 31, 2022	235	$589	$7,419	$9,890	$(962)	$(62)	$4	$16,878
Net income				1,606				1,606
Common stock dividend to Con Edison				(1,056)				(1,056)
Capital contribution by Con Edison			1,720					1,720
Other comprehensive loss							(2)	(2)
BALANCE AS OF DECEMBER 31, 2023	235	$589	$9,139	$10,440	$(962)	$(62)	$2	$19,146

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


CON EDISON ANNUAL REPORT 2023			101

Consolidated Edison Company of New York, Inc.

Consolidated Statement of Capitalization


	Shares outstanding
	December 31,		At December 31,
(In Millions)	2023	2022	2023	2022
TOTAL SHAREHOLDER’S EQUITY BEFORE ACCUMULATED OTHER COMPREHENSIVE INCOME	235	235	$19,144	$16,874
Pension plan liability adjustments, net of taxes			3	5
Unrealized 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			(1)	(1)
TOTAL ACCUMULATED OTHER COMPREHENSIVE INCOME, NET OF TAXES			2	4
TOTAL SHAREHOLDER’S EQUITY (See Statement of Shareholder’s Equity)			$19,146	$16,878

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


102			CON EDISON ANNUAL REPORT 2023

Consolidated Edison Company of New York, Inc.

Consolidated Statement of Capitalization


LONG-TERM DEBT (Millions of Dollars)				At December 31,
Maturity	Interest Rate		Series	2023	2022
DEBENTURES:


2024	3.30		2014B	$250	$250
2026	2.90		2016B	250	250
2027	3.125		2017B	350	350
2028	3.80		2018A	300	300
2028	4.00		2018D	500	500
2030	3.35		2020A	600	600
2031	2.40		2021A	900	900
2033	5.875		2003A	175	175
2033	5.10		2003C	200	200
2033	5.20		2023A	500	—
2034	5.70		2004B	200	200
2034	5.50		2023B	600	—
2035	5.30		2005A	350	350
2035	5.25		2005B	125	125
2036	5.85		2006A	400	400
2036	6.20		2006B	400	400
2036	5.70		2006E	250	250
2037	6.30		2007A	525	525
2038	6.75		2008B	600	600
2039	5.50		2009C	600	600
2040	5.70		2010B	350	350
2042	4.20		2012A	400	400
2043	3.95		2013A	700	700
2044	4.45		2014A	850	850
2045	4.50		2015A	650	650
2046	3.85		2016A	550	550
2047	3.875		2017A	500	500
2048	4.65		2018E	600	600
2049	4.125		2019A	700	700
2050	3.95		2020B	1,000	1,000
2051	3.20		2021C	600	600
2052	6.15		2022A	700	700
2053	5.90		2023C	900	—
2054	4.625		2014C	750	750
2056	4.30		2016C	500	500
2057	4.00		2017C	350	350
2058	4.50		2018B	700	700
2059	3.70		2019B	600	600
2060	3.00		2020C	600	600
2061	3.60		2021B	750	750




TOTAL DEBENTURES				20,825	18,825
TAX-EXEMPT DEBT – Notes issued to New York State Energy Research and Development Authority for Facilities Revenue Bonds:
2036	3.92	(a)	2010A	225	225
2039	3.83	(a)	2004C	99	99
2039	3.80	(a)	2005A	126	126
TOTAL TAX-EXEMPT DEBT				450	450
Unamortized debt expense				(155)	(145)

Unamortized debt discount				(60)	(50)
TOTAL				21,060	19,080
Less: Long-term debt due within one year				250	—
TOTAL LONG-TERM DEBT				20,810	19,080
TOTAL CAPITALIZATION				$39,956	$35,958

(a) Rates reset weekly; December 31, 2023 rates shown.

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


CON EDISON ANNUAL REPORT 2023			103

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, that are presented separately in the CECONY consolidated financial statements, are also consolidated, along with those of Orange and Rockland Utilities, Inc. (O&R), Con Edison Transmission, Inc. (together with its subsidiaries, Con Edison Transmission) and its former

subsidiary, Con Edison Clean Energy Businesses, Inc. (together with its subsidiaries, the Clean Energy Businesses), in Con Edison’s consolidated financial statements. On March 1, 2023, Con Edison completed the sale of all of the stock of the Clean Energy Businesses. See Note W and Note X. The term “Utilities” is used in these notes to refer to CECONY and O&R.

As used in these notes, the term “Companies” refers to Con Edison and CECONY and, except as otherwise noted, the information in these combined notes relates to each of the Companies. However, CECONY makes no representation as to information relating to Con Edison or the subsidiaries of Con Edison other than itself.

Con Edison has two regulated utility subsidiaries: CECONY and O&R. CECONY provides electric service and gas service in New York City and Westchester County. The company also provides steam service in parts of Manhattan. O&R, along with its regulated utility subsidiary, provides electric service in southeastern New York and northern New Jersey and gas service in southeastern New York. Con Edison Transmission invests in and seeks to develop electric transmission projects through its subsidiary, Consolidated Edison Transmission, LLC, and manages, through joint ventures, investments in gas pipeline and storage facilities through its subsidiary, Con Edison Gas Pipeline and Storage, LLC. See "Investments" in Note A and Note W.


104			CON EDISON ANNUAL REPORT 2023

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, 2023 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 New York electric and gas rate plans each contain a revenue decoupling mechanism, that covers all residential and most commercial customers, under which the company’s actual energy delivery revenues are compared with the authorized delivery revenues and the difference accrued, with interest, for refund to, or recovery from, customers, as applicable. See “Rate Plans” in Note B.

The NYSPSC requires utilities to record gross receipts tax revenues and expenses on a gross income statement presentation basis (i.e., included in both revenue and expense). The recovery of these taxes is generally provided for in the revenue requirement within each of the respective NYSPSC-approved rate plans. Total excise taxes (inclusive of gross receipts taxes) recorded in operating revenues were as follows:


	For the Years Ended December 31,
(Millions of Dollars)	2023	2022	2021
Con Edison	$409	$400	$358
CECONY	396	387	346

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 2023			105

having jurisdiction. The rate is compounded semiannually, and the amounts applicable to borrowed funds are treated as a reduction of interest charges, while the amounts applicable to the Utilities’ own funds are credited to other income (deductions). The AFUDC rates for CECONY were 5.9 percent, 5.2 percent and 4.5 percent for 2023, 2022 and 2021, respectively. The AFUDC rates for O&R were 6.2 percent, 5.0 percent and 4.8 percent for 2023, 2022 and 2021, 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 3.6 percent for 2023 and 3.5 percent for 2022 and 3.5 percent for 2021. The average depreciation rates for O&R were 3.1 percent for 2023, 3.0 percent for 2022 and 3.1 percent for 2021.

The estimated lives for utility plant for CECONY range from 5 to 80 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, 2023 and 2022, the capitalized cost of the Companies’ utility plant, net of accumulated depreciation, was as follows:


	Con Edison		CECONY
(Millions of Dollars)	2023	2022	2023	2022
Electric
Generation	$580	$534	$580	$534
Transmission	4,652	4,223	4,333	3,916
Distribution	24,491	23,345	23,238	22,130
General	141	113	141	113
Gas (a)	12,023	11,326	11,226	10,567
Steam	1,990	1,962	1,990	1,962
General	3,158	2,648	2,860	2,410
Held for future use	118	117	110	109
Construction work in progress	2,442	2,484	2,168	2,268
Net Utility Plant	$49,594	$46,752	$46,646	$44,009

(a) Primarily distribution.

General utility plant of Con Edison and CECONY included $65 million and $62 million, respectively, at December 31, 2023, and $72 million and $69 million, respectively, at December 31, 2022, 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 $38 million and $36 million, respectively, at December 31, 2023 and $31 million and $29 million, respectively, at December 31, 2022.

Under the Utilities’ rate plans, the aggregate annual depreciation allowance for the period ended December 31, 2023 was $2,030 million, including $1,925 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. On March 1, 2023, Con Edison completed the sale of all of the stock of the Clean Energy Businesses. See Note W and X. For Con Edison, non-utility plant consisted 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.


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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:


	Con Edison		CECONY
(Millions of Dollars)	2023	2022	2023	2022
Prepayments (a)(b)	$50	$24	$49	$23
Other Deferred Charges and Noncurrent Assets (a)(b)	179	105	178	103

(a) Amortization on these assets is computed using the straight-line method for financial statement purposes over their estimated useful lives.

(b) Amortization expense related to these assets incurred during the year ended December 31, 2023 for Con Edison and CECONY was $21 million and $20 million, respectively, for the year ended December 31, 2022 for Con Edison and CECONY was $15 million and $14 million, respectively, and for the year ended December 31, 2021 for Con Edison and CECONY was $12 million and $11 million, respectively. Accumulated amortization related to these assets for Con Edison and CECONY was $58 million and $53 million, respectively at December 31, 2023 and was $37 million and $33 million, respectively at December 31, 2022.

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.

Prior to the sale of the Clean Energy Businesses on March 1, 2023, Con Edison's intangible assets with definite lives consisted primarily of power purchase agreements. See Note W and Note X. Con Edison's intangible assets were immaterial at December 31, 2023. At December 31, 2022, intangible assets arising from power purchase agreements were $1,219 million, net of accumulated amortization of $359 million, and were being amortized over the life of each agreement. Excluding power purchase agreements, Con Edison’s other intangible assets were $2 million, net of accumulated amortization of $9 million at December 31, 2022. CECONY’s other intangible assets were immaterial at December 31, 2023 and 2022. Con Edison recorded amortization expense related to its intangible assets of $71 million in 2022 and $95 million in 2021. Con Edison expects amortization expense to be immaterial over each of the next five years. No impairment charges were recorded on Con Edison's long-lived assets or intangible assets with definite lives in 2023, 2022 and 2021.

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 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).


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Temporary Cash Investments

Temporary cash investments are short-term, highly-liquid investments that generally have maturities of three months or less at the date of purchase. They are stated at cost, which approximates market. The Companies consider temporary cash investments to be cash equivalents.

Investments

Accounting for Investments

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

The accounting rules require Con Edison to 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 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.

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

In May 2021, a subsidiary of Con Edison Transmission 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 for a total of $1,225 million, of which $629 million was attributed to Con Edison Transmission for its 50 percent interest.

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 during 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, and that the carrying value at June 30, 2021 reflected the final sales price received, including closing adjustments. Con Edison Transmission had no remaining investment in Stagecoach as of December 31, 2021.

Investment in Mountain Valley Pipeline, LLC (MVP)

In January 2016, a subsidiary of Con Edison Transmission, acquired a 12.5 percent interest in MVP, a company developing a proposed 300-mile gas transmission project (the Mountain Valley Pipeline) in West Virginia and Virginia. During 2019, Con Edison exercised its right to limit, and did limit, its cash contributions to the joint venture to approximately $530 million, that reduced Con Edison Transmission's interest in MVP to 11.3 percent, 10.2 percent, and 9.6 percent as of December 31, 2020, 2021, and 2022, respectively. As of December 31, 2023 Con Edison Transmission's interest in MVP is 7.9 percent and is expected to be reduced to approximately 7.0 percent based on Con Edison Transmission's previous capping of its cash contributions. As of December 31, 2023, the Mountain Valley Pipeline was approximately 97 percent complete.


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During 2020, the uncertainty related to obtaining necessary water crossing permits, the resulting costs and the likelihood of the Mountain Valley Pipeline 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 VA Department of Environmental Quality and the WV Department of Environmental Protection both issued water quality certification permits which are required in order for the U.S. Army Corps of Engineers to proceed with the permitting process for construction of certain Project water crossings. In January 2022, the U.S. Court of Appeals for the Fourth Circuit rejected permits for crossings through the Jefferson National Forest issued by the U.S. Forest Service and Bureau of Land Management. In February 2022, the U.S. Court of Appeals for the Fourth Circuit vacated a biological opinion from the U.S. Fish and Wildlife Service, applicable to all remaining construction. The biological opinion had been issued and was the subject of litigation prior to December 31, 2021. Con Edison believed that the February 2022 action by the U.S. Court of Appeals for the Fourth Circuit, along with the potential outcome of other matters pending before that Court, may lead to further delays and increased project costs, which constituted a triggering event (the “2021 triggering event”) that required Con Edison to test its investment in MVP for an other-than-temporary impairment as of December 31, 2021.

In response to the 2020 triggering event and 2021 triggering event, Con Edison assessed the value of its equity investment in the Mountain Valley Pipeline 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 Mountain Valley Pipeline. See Note U. Con Edison had 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 Mountain Valley Pipeline 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 Mountain Valley Pipeline faced legal and regulatory challenges that could have made construction completion increasingly remote. The likelihood that the project will be completed and, for 2020, the discount rate, were the most significant and sensitive assumptions; changes in these assumptions may have materially changed the results of the impairment calculation.

Based on the discounted cash flow analyses, Con Edison concluded as of December 31, 2020 and 2021 that the fair value of its investment in MVP declined below its carrying value and the declines were other-than-temporary. Accordingly, Con Edison recorded a pre-tax impairment loss of $320 million ($223 million, after tax) for the year ended December 31, 2020 that reduced the carrying value of its investment in MVP from $662 million to $342 million, with an associated deferred tax asset of $53 million. Additionally, Con Edison recorded a pre-tax impairment loss of $231 million ($162 million, after tax) for the year ended December 31, 2021 that reduced the carrying value of its investment in MVP from $342 million to $111 million, with an additional $77 million associated deferred tax asset, totaling a deferred tax asset of $130 million at December 31, 2021 and 2022. The impairments were recorded within “Investment income (loss)” on Con Edison’s Consolidated Income Statement. In addition, Con Edison did not record equity in earnings from allowance for funds used during construction from MVP beginning in January 2021 and refrained from recording such amounts during 2021, 2022 and a portion of 2023 until substantial construction activities resumed. Con Edison recorded equity in earnings from AFUDC from MVP of $33 million for the year ended December 31, 2023 and expects to continue to recognize its proportionate share of equity in earnings from AFUDC until the project is placed in service, subject to the progression of construction activities. There were no impairments to the carrying value of Con Edison's investment in MVP for the years ended December 31, 2022 and 2023.

In June 2023, federal legislation to raise the U.S. debt ceiling included provisions declaring the Mountain Valley Pipeline to be in the national interest, expediting the permitting process and moving jurisdiction of challenges of permits to the D.C. Circuit Court of Appeals, from the 4th Circuit Court of Appeals. These actions enabled construction activities to resume in June 2023 and continue without substantial interruption for the duration of 2023.

There is risk that the fair value of Con Edison’s investment in MVP may be further impaired in the future. Assumptions and estimates used to test Con Edison’s investment in MVP for impairment may change if adverse developments impacting the construction of the Mountain Valley Pipeline were to occur.


CON EDISON ANNUAL REPORT 2023			109

Summary of Investment Balances

The following investment assets are included in the Companies' consolidated balance sheets at December 31, 2023 and 2022:


	Con Edison		CECONY
(Millions of Dollars)	2023	2022	2023	2022
Con Edison Transmission investment in MVP (a)	$144	$111	$—	$—
Supplemental retirement income plan assets (b)	524	459	502	439
Deferred income plan assets	99	93	99	93
Con Edison Transmission's investment in New York Transco (c)	221	176	—	—
Virginia Tax Equity Projects (d)	8	—	—	—
Other	3	2	7	7
Total investments	$999	$841	$608	$539

(a)At December 31, 2023 and 2022, Con Edison Transmission's cash investment in MVP was $530 million. In January 2024, the operator of the Mountain Valley Pipeline indicated that it is targeting an in-service date for the project in the first quarter of 2024 at an overall project cost of approximately $7,200 million excluding allowance for funds used during construction. See "Investment in Mountain Valley Pipeline, LLC (MVP)" above.

(b)See Note E.

(c)Con Edison Transmission owns a 45.7 percent interest in New York Transco's TOTS and NYES projects and a 41.7 percent interest in New York Transco's share of the Propel NY Energy project.

(d)See Note S.

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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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.

Reclassification

Certain prior period amounts have been reclassified to conform with current period presentation.

Earnings Per Common Share

Con Edison presents basic and diluted earnings per share (EPS) on the face of its consolidated income statement. Basic EPS is calculated by dividing earnings available to common shareholders (“Net income 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).

Basic and diluted EPS for Con Edison are calculated as follows:


	For the Years Ended December 31,
(Millions of Dollars, except per share amounts/Shares in Millions)	2023	2022	2021
Net income for common stock	$2,519	$1,660	$1,346
Weighted average common shares outstanding – basic	347.7	354.5	348.4
Add: Incremental shares attributable to effect of potentially dilutive securities	1.6	1.3	1.0
Adjusted weighted average common shares outstanding – diluted	349.3	355.8	349.4
Net Income per common share – basic	$7.25	$4.68	$3.86
Net Income per common share – diluted	$7.21	$4.66	$3.85

The computation of diluted EPS for the years ended December 31, 2021 excludes immaterial amounts of performance share awards that were not included because of their anti-dilutive effect.

Estimates


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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, 2020 (a)	$(25)	$(7)
OCI before reclassifications, net of tax of $(8) and $2 for Con Edison and CECONY, respectively	22	5
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)	8	2
Total OCI, net of taxes, at December 31, 2021	30	7
Accumulated OCI, net of taxes, at December 31, 2021 (a)	$5	$—
OCI before reclassifications, net of tax of $(5) and $(1) for Con Edison and CECONY, respectively	13	3
Amounts reclassified from accumulated OCI related to pension plan liabilities, net of tax of $(1) for Con Edison (a)(b)	4	1
Total OCI, net of taxes, at December 31, 2022	17	4
Accumulated OCI, net of taxes, at December 31, 2022 (a)	$22	$4
OCI before reclassifications, net of tax	—	(2)
Amounts reclassified from accumulated OCI related to pension plan liabilities, net of tax (a)(b)	—	—
Total OCI, net of taxes, at December 31, 2023	—	(2)
Accumulated OCI, net of taxes, at December 31, 2023 (a)	$22	$2

(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, 2023 and 2022, cash, temporary cash investments and restricted cash for Con Edison were as follows; CECONY did not have material restricted cash balances as of December 31, 2023 and 2022:


	At December 31,
	Con Edison
(Millions of Dollars)	2023	2022
Cash and temporary cash investments	$1,189	$1,282
Restricted cash (a)	6	223
Total cash, temporary cash investments and restricted cash	$1,195	$1,505

(a)Con Edison restricted cash included cash of the Clean Energy Businesses' renewable electric project subsidiaries ($6 million and $223 million at December 31, 2023 and 2022, respectively) that, under the related project debt agreements, was restricted to being used for normal operating expenditures, debt service, and required reserves until the various maturity dates of the project debt. On March 1, 2023, Con Edison completed the sale of all of the stock of the Clean Energy Businesses. See Note W. Con Edison retained one deferred project, Broken Bow II, a 75 MW nameplate capacity wind power project located in Nebraska. Con Edison's restricted cash for the 2023 period includes restricted cash of Broken Bow II that continued to be classified as held for sale as of December 31, 2023. See Note X.

Use of Hypothetical Liquidation at Book Value

For certain investments of the Clean Energy Businesses and of 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. 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


112			CON EDISON ANNUAL REPORT 2023

change in the liquidation value allocable to the tax equity investors based on the terms of the partnerships' operating agreements. See Note S. The Clean Energy Businesses were classified as held for sale as of December 31, 2022. On March 1, 2023, Con Edison completed the sale of all of the stock of the Clean Energy Businesses. See "Assets Held for Sale," below, Note W and Note X.

Assets Held for Sale

Generally, a long-lived asset or business to be sold is classified as held for sale in the period in which management, with approval from the Board of Directors, commits to a plan to sell, and a sale is expected to be completed within one year. During the first nine months of 2022, Con Edison considered strategic alternatives with respect to the Clean Energy Businesses. On October 1, 2022, Con Edison's management received authority to commit to a plan to sell the Clean Energy Businesses and entered into a purchase and sale agreement.

Con Edison records assets and liabilities, once held for sale, at the lower of their carrying value or their estimated fair value less cost to sell, and also stops recording depreciation and amortization on assets held for sale. The "Noncontrolling interest" on Con Edison's consolidated balance sheet reflected the noncontrolling interest in projects of the Clean Energy Businesses, that was held for sale as of December 31, 2022. On March 1, 2023, Con Edison completed the sale of all of the stock of the Clean Energy Businesses with the exception of two tax equity interests and one deferred project, Broken Bow II. Broken Bow II continued to be classified as held for sale as of December 31, 2023.

Fair value is the amount at which an asset, liability or business could be bought or sold in a current transaction between willing parties and may be estimated using a number of techniques, or may be observable using quoted market prices. Con Edison used a market approach consisting of the contractual sales price adjusted for estimated working capital and other contractual purchase price adjustments to determine the fair value of the Clean Energy Businesses as of December 31, 2022, and subtracted estimated costs to sell from that calculated fair value. The resulting net fair value of the Clean Energy Businesses' assets exceeded the carrying value of the Clean Energy Businesses' assets through the date of sale in March 2023, and accordingly no impairments were recorded.

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

For further information, see Note W and Note X.

Note B – Regulatory Matters

Rate Plans

The Utilities provide service to New York customers according to the terms of tariffs approved by the NYSPSC. Tariffs for service to customers of Rockland Electric Company (RECO), O&R’s New Jersey regulated utility subsidiary, are approved by the New Jersey Board of Public Utilities (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’ New York rate plans include:

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

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


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generally no symmetric mechanism if actual average net utility plant balances are more than amounts reflected in rates.

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.

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”).

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.

Regulatory 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.

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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The following tables contain a summary of the Utilities’ rate plans:


CECONY – Electric
Effective period	January 2020 – December 2022	January 2023 – December 2025
Base rate changes	Yr. 1 – $113 million (a) Yr. 2 – $370 million (a) Yr. 3 – $326 million (a)	Yr. 1 – $442 million (c) Yr. 2 – $518 million (c) Yr. 3 – $382 million (c)
Amortizations to income of net regulatory (assets) and liabilities	Yr. 1 – $267 million (b) Yr. 2 – $269 million (b) Yr. 3 – $272 million (b)	Yr. 1 – $104 million (j) Yr. 2 – $49 million (j) Yr. 3 – $(205) million (j)
Other revenue sources	Retention of $75 million of annual transmission congestion revenues. 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, 2021 and 2022, the company recorded $34 million, $64 million and $33 million primarily related to earnings adjustment mechanism incentives for energy efficiency, respectively. In 2022, the company recorded a positive incentive of $4 million.	Retention of $75 million of annual transmission congestion revenues. Potential earnings adjustment mechanism incentives for energy efficiency and other potential incentives of up to: Yr. 1 - $70 million Yr. 2 - $75 million Yr. 3 - $79 million In 2023, the company recorded $34.4 million primarily related to earnings adjustment mechanism incentives for energy efficiency.
Revenue decoupling mechanisms	Continuation of reconciliation of actual to authorized electric delivery revenues. In 2020, 2021 and 2022, the company deferred for recovery from customers $242 million, $226 million and $90 million of revenues, respectively.	Continuation of reconciliation of actual to authorized electric delivery revenues. In 2023, the company deferred for recovery from customers $162 million of revenues.
Recoverable energy costs	Continuation of current rate recovery of purchased power and fuel costs.	Continuation of current rate recovery of purchased power and fuel costs.
Negative revenue adjustments	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. In 2022, the company recorded negative revenue adjustments of $3 million.	Potential charges if certain performance targets relating to service, reliability, safety and other matters are not met: Yr. 1 - $516 million Yr. 2 - $557 million Yr. 3 - $597 million In 2023, the company did not record any negative revenue adjustments.
Regulatory reconciliations	Continuation of reconciliation of expenses for pension and other postretirement benefits, variable-rate debt, major storms, property taxes (d), municipal infrastructure support costs (e), the impact of new laws and environmental site investigation and remediation to amounts reflected in rates (f). In 2020 and 2021, the company deferred $288 million and $191 million of net regulatory assets, respectively. In 2022, the company deferred $138 million of net regulatory liabilities.	Reconciliation of late payment charges (i) and expenses for uncollectibles, pension and other postretirement benefits, variable-rate debt, major storms, property taxes (d), municipal infrastructure support costs (e), the impact of new laws and environmental site investigation and remediation to amounts reflected in rates (f). In 2023, the company deferred $140 million of net regulatory liabilities.
Net utility plant reconciliations	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 (h): Yr. 1 - $572 million Yr. 2 - $740 million Yr. 3 - $806 million In 2020, the company deferred $4.1 million as a regulatory asset. In 2021 and 2022, the company deferred $3.2 million and $1.8 million, as a regulatory liability, respectively.	Target levels reflected in rates: Electric average net plant target excluding advanced metering infrastructure (AMI) and Customer Service System (CSS) for Yr. 1: Yr. 1 - $27,847 million Yr. 2 - $29,884 million Yr. 3 - $31,026 million AMI (h): Yr. 1 - $744 million CSS: Yr. 1 - $11 million In 2023, the company deferred $1.2 million as a regulatory asset.
Average rate base	Yr. 1 - $21,660 million Yr. 2 - $22,783 million Yr. 3 - $23,926 million	Yr. 1 - $26,095 million Yr. 2 - $27,925 million Yr. 3 - $29,362 million


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Weighted average cost of capital (after-tax)	Yr. 1 to Yr. 3 – 6.61 percent	Yr. 1 - 6.75 percent Yr. 2 - 6.79 percent Yr. 3 - 6.85 percent
Authorized return on common equity	8.8 percent	9.25 percent
Actual return on common equity (h) (i)	Yr. 1 – 8.5 percent Yr. 2 – 8.03 percent Yr. 3 – 8.41 percent	Yr. 1 – 9.46 percent
Earnings sharing	Most earnings above an annual earnings threshold of 9.3 percent are to be applied to reduce regulatory assets for environmental remediation and other costs accumulated in the rate year. In 2020, 2021 and 2022, 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.	Most earnings above an annual earnings threshold of 9.75 percent are to be applied to reduce regulatory assets for environmental remediation and other costs accumulated in the rate year. In 2023, the company had no earnings sharing above the threshold.
Cost of long-term debt	Yr. 1 to Yr. 3 – 4.63 percent	Yr. 1 – 4.46 percent Yr. 2 – 4.54 percent Yr. 3 – 4.64 percent
Common equity ratio	48 percent	48 percent

(a)Base rates reflect recovery by the company of certain costs of its energy efficiency, 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 10-year period, including the overall pre-tax rate of return on such costs.

(b)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).

(c)The electric base rate increases shown above will be implemented with increases of $457 million in Yr. 1; $457 million in Yr. 2; and $457 million in Yr. 3 in order to levelize the customer bill impact. New rates were effective as of January 1, 2023 and CECONY began billing customers at the new levelized rate in August 2023. The shortfall in revenues due to the timing of billing to customers ($216 million) are being collected through a surcharge billed through 2024, including a carrying charge on the outstanding balance. Base rates reflect recovery by the company of certain costs of its energy efficiency, demonstration projects, non-wire alternative projects (including the Brooklyn Queens demand management program), and off-peak electric vehicle charging programs (Yr. 1 - $244 million; Yr. 2 - $237 million; and Yr. 3 - $281 million) over periods varying between seven and fifteen years, including the overall pre-tax rate of return on such costs.

(e)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 15 percent of the amount reflected in the rate plans.

(f)In addition, the NYSPSC continues its 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.

(g)Reconciliation of net utility plant for AMI will be done on a combined basis for electric and gas.

(h)Calculated in accordance with the earnings calculation method prescribed in the rate order.

(i)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.

(j)Amounts reflect amortization of the TCJA allocable to CECONY’s electric customers ($256 million) over a two-year period ($128 million in Yr. 1 and Yr. 2), the protected portion of the regulatory liability for excess deferred income taxes allocable to CECONY’s electric customers ($1,512 million) over the remaining lives of the related assets ($34 million in Yr. 1, $63 million in Yr. 2, and $34 million in Yr. 3) and the unprotected portion of the net regulatory liability ($306 million) over two years ($153 million annually). Amounts also reflect amortization of the regulatory asset for deferred MTA power reliability costs ($93 million) over a three-year period ($31 million annually).


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In April 2023, the NYSPSC approved CECONY’s December 2022 petition seeking cost recovery approval for a proposed clean energy hub in Brooklyn, New York (Brooklyn Clean Energy Hub) at an estimated cost of $810 million, and an estimated in-service date of December 2027, that is in addition to the capital expenditures approved in the CECONY 2023 - 2025 electric rate plan summarized above. The Brooklyn Clean Energy Hub primarily addresses an identified reliability need in 2028 due to a forecasted increase in electric demand. The Brooklyn Clean Energy Hub provides the flexibility for offshore wind resources to interconnect to it during construction and after it commences operation. Construction began in September 2023 and is expected to be completed by 2028. The carrying costs of the Brooklyn Clean Energy Hub will be recovered from customers via a surcharge mechanism after it is placed into service and until such costs are reflected in base rates.

In January 2024, the NYSPSC approved CECONY's August 2023 petition requesting authorization and cost recovery to construct two new substations in Jamaica, Queens (the Reliable Clean City - Idlewild Project) that is in addition to the capital expenditures approved in CECONY's 2023 - 2025 electric rate plan summarized above. The project is expected to be completed by May 2028 to meet anticipated reliability needs and to support New York State’s Climate Leadership and Community Protection Act goals. CECONY estimates that construction will cost $1,200 million. The carrying costs of the Reliable Clean City – Idlewild Project will be recovered from customers via a surcharge mechanism after it is placed into service and until such costs are reflected in base rates.


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CECONY – Gas
Effective period	January 2020 – December 2022	January 2023 – December 2025
Base rate changes	Yr. 1 – $84 million (a) Yr. 2 – $122 million (a) Yr. 3 – $167 million (a)	Yr. 1 – $217 million (c) Yr. 2 – $173 million (c) Yr. 3 – $122 million (c)
Amortizations to income of net regulatory (assets) and liabilities	Yr. 1 – $45 million (b) Yr. 2 – $43 million (b) Yr. 3 – $10 million (b)	Yr. 1 – $31 million (j) Yr. 2 – $24 million (j) Yr. 3 – $(11) million (j)
Other revenue sources	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 – $20 million Yr. 2 – $22 million Yr. 3 – $25 million In 2020, 2021 and 2022, the company recorded $3 million, $26 million and $8 million of earnings adjustment mechanism incentives for energy efficiency, respectively. In 2020, 2021 and 2022, the company recorded positive incentives of $13 million, $7 million, and $9 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.	Retention of annual revenues from non-firm customers of up to $65 million and 15 percent of any such revenues above $65 million. Potential earnings adjusted mechanism incentives for energy efficiency and other potential incentives of up to: Yr. 1 - $18 million Yr. 2 - $20 million Yr. 3 - $21 million In 2023, the company recorded $5 million of earnings adjustment mechanism incentives for energy efficiency. In 2023, the company recorded positive incentives of $3 million.
Revenue decoupling mechanisms	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, 2021 and 2022, the company deferred for recovery from customers $27 million, $100 million and $141 million of revenues, respectively.	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 2023, the company deferred for recovery from customers $162 million of revenues.
Recoverable energy costs	Continuation of current rate recovery of purchased gas costs.	Continuation of current rate recovery of purchased gas costs.
Negative revenue adjustments	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. In 2022, the company recorded negative revenue adjustments of $8 million.	Potential charges if performance targets relating to service, safety and other matters are not met: Yr. 1 - $107 million Yr. 2 - $119 million Yr. 3 - $130 million In 2023, the company recorded negative revenue adjustments of $3 million.
Regulatory reconciliations	Continuation of reconciliation of expenses for pension and other postretirement benefits, variable-rate tax-exempt debt, major storms, property taxes (d), municipal infrastructure support costs (e), the impact of new laws and environmental site investigation and remediation to amounts reflected in rates (f). In 2020 and 2021, the company deferred $91 million and $14 million of net regulatory assets, respectively. In 2022, the company deferred $70 million of net regulatory liabilities.	Reconciliation of late payment charges (i) and expenses for uncollectibles, pension and other postretirement benefits, variable-rate debt, major storms, property taxes (d), municipal infrastructure support costs (e), the impact of new laws and environmental site investigation and remediation to amounts reflected in rates (f). In 2023, the company deferred $12 million of net regulatory liabilities.
Net utility plant reconciliations	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 (g): Yr. 1 – $142 million Yr. 2 – $183 million Yr. 3 – $211 million In 2020 and 2021, the company deferred $24.7 million and $26 million, as a regulatory liability, respectively. In 2022, the company deferred $10.8 million as a regulatory asset.	Target levels reflected in rates: Gas average net plant target excluding AMI and CSS for Yr. 1: Yr. 1 - $10,466 million Yr. 2 - $11,442 million Yr. 3 - $12,142 million AMI (g): Yr. 1 - $234 million CSS: Yr. 1 - $2 million In 2023, the company deferred $15.5 million as a regulatory liability.
Average rate base	Yr. 1 – $7,171 million Yr. 2 – $7,911 million Yr. 3 – $8,622 million	Yr. 1 - $9,647 million Yr. 2 - $10,428 million Yr. 3 - $11,063 million


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Weighted average cost of capital (after-tax)	Yr. 1 – Yr. 3 - 6.61 percent	Yr. 1 – 6.75 percent Yr. 2 – 6.79 percent Yr. 3 – 6.85 percent
Authorized return on common equity	8.8 percent	9.25 percent
Actual return on common equity (h) (i)	Yr. 1 – 8.4 percent Yr. 2 – 8.48 percent Yr. 3 – 8.93 percent	Yr. 1 – 9.00 percent
Earnings sharing	Most earnings above an annual earnings threshold of 9.3 percent are to be applied to reduce regulatory assets for environmental remediation and other costs accumulated in the rate year. In 2020, 2021 and 2022, the company had no earnings above the threshold.	Most earnings above an annual earnings threshold of 9.75 percent are to be applied to reduce regulatory assets for environmental remediation and other costs accumulated in the rate year. In 2023, the company had no earnings above the threshold.
Cost of long-term debt	Yr. 1 – Yr. 3 - 4.63 percent	Yr. 1 – 4.46 percent Yr. 2 – 4.54 percent Yr. 3 – 4.64 percent
Common equity ratio	48 percent	48 percent

(a)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.

(b) 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)

(c) The gas base rate increases shown above will be implemented with increases of $187 million in Yr. 1; $187 million in Yr. 2; and $187 million in Yr. 3 in order to levelize the customer bill impact. New rates were effective as of January 1, 2023. CECONY began billing customers at the new levelized rate in August 2023. The shortfall in revenues due to the timing of billing to customers ($99 million) are being collected through a surcharge billed through 2025, including a carrying charge on the outstanding balance. Base rates reflect recovery by the company of certain costs of its energy efficiency programs (Yr. 1 - $45 million; Yr. 2 - $78 million; and Yr. 3 - $62 million) over a fifteen-year period, including the overall pre-tax rate of return on such costs.

(d)-(h) See footnotes (d) - (h) to the table under “CECONY Electric,” above.

(i) 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.

(j) Amounts reflect amortization of the TCJA allocable to CECONY’s gas customers ($32 million) over a two-year period ($16 million in Yr. 1 and Yr. 2), the protected portion of the regulatory liability for excess deferred income taxes allocable to CECONY’s gas customers ($679 million) over the remaining lives of the related assets ($9 million in Yr. 1, $10 million in Yr. 2, and $10 million in Yr. 3) and the unprotected portion of the net regulatory liability ($42 million) over two years ($21 million annually).


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CECONY – Steam
Effective period	January 2014 – December 2016 (g)	November 2023 – October 2026
Base rate changes	Yr. 1 – $(22.4) million (h) Yr. 2 –$19.8 million (h) Yr. 3 –$20.3 million(h) Yr. 4 – None Yr. 5 – None Yr. 6 – None Yr. 7 – None Yr. 8 – None Yr. 9 - None Yr.10 - None	Yr. 1 – $110 million (a) Yr. 2 – $44 million (a) Yr. 3 – $45 million (a)
Amortizations to income of net regulatory (assets) and liabilities	$37 million over three years	Yr. 1 – $15 million (b) Yr. 2 – $3 million (b) Yr. 3 – $3 million (b)
Weather Normalization Adjustment		Implementation of a weather normalization adjustment to reflect normal weather conditions during the heating season.
Recoverable energy costs	Current rate recovery of purchased power and fuel costs.	Continuation of current rate recovery of purchased power and fuel costs.
Negative revenue adjustments	Potential charges (up to $1 million annually) if certain performance targets are not met. In years 2014 through 2023, the company did not record any negative revenue adjustments.	Potential charges if certain performance targets relating to service, reliability, safety and other matters are not met: Yr. 1 - $3.7 million Yr. 2 - $3.8 million Yr. 3 - $3.8 million
Regulatory reconciliations (i) (j)	In 2014, 2015, 2016, 2017, 2018, 2019, 2020, 2021, 2022 and 2023, 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, $32 million of net regulatory assets, $11 million of net regulatory assets and $18 million net regulatory liabilities, respectively.	Reconciliation of uncollectible expenses and late payment charges (c) and expenses for pension and other postretirement benefits, variable-rate debt, property taxes (d), municipal infrastructure support costs (e), the impact of new laws and environmental site investigation and remediation to amounts reflected in rates. (f)
Net utility plant reconciliations	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 in 2014 and immaterial amounts in 2015 and 2016 and no deferrals were recorded in 2017, 2018, 2019. In 2020 and 2021, the company deferred $2 million and $1 million as a regulatory liability, respectively. In 2022, the company deferred $0.1 million as a regulatory asset. No deferral was recorded in 2023.	Yr. 1 - $2,025 million Yr. 2 - $2,029 million Yr. 3 - $2,015 million
Average rate base	Yr. 1 – $1,511 million Yr. 2 – $1,547 million Yr. 3 – $1,604 million	Yr. 1 - $1,799 million Yr. 2 - $1,848 million Yr. 3 - $1,882 million
Weighted average cost of capital (after-tax)	Yr. 1 – 7.10 percent Yr. 2 – 7.13 percent Yr. 3 – 7.21 percent	Yr. 1 - 6.78 percent Yr. 2 - 6.81 percent Yr. 3 - 6.83 percent
Authorized return on common equity	9.3 percent	9.25 percent


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Actual return on common equity (j)	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 Yr. 9 - 5.72 percent Yr. 10 - (0.10) percent .
Earnings sharing	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, 2021, 2022 and 2023, 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.	Most earnings above an annual earnings threshold of 9.75 percent are to be applied to reduce regulatory assets for environmental remediation and other costs accumulated in the rate year.
Cost of long-term debt	Yr. 1 – 5.17 percent Yr. 2 – 5.23 percent Yr. 3 – 5.39 percent	Yr. 1 – 4.51 percent Yr. 2 – 4.58 percent Yr. 3 – 4.62 percent
Common equity ratio	48 percent	48 percent

(a)The base rate increases will be implemented with increases of $77.8 million in Yr. 1; $77.8 million in Yr. 2; and $77.8 million in Yr. 3 to levelize the customer bill impact. New rates were effective as of November 1, 2023. CECONY began billing customers at the new levelized rate in December 2023.

(b)Amounts reflect amortization of the tax savings under the federal Tax Cuts and Jobs Act of 2017 (TCJA) for the unprotected portion of the regulatory liability for excess deferred income taxes allocable to CECONY’s steam customers (the entire $24 million in Yr.1), the protected portion of the regulatory liability for excess deferred income taxes allocable to CECONY’s steam customers over the remaining lives of the related assets ($3 million in Yr. 1; $5 million in Yr. 2; and $6 million in Yr. 3) and the non-plant portion of the regulatory asset for deficient deferred income taxes allocable to CECONY’s steam customers (the entire $11 million in Yr.1).

(c)CECONY will defer the difference between its actual write-offs of uncollectible expenses and late payment fees (from January 1, 2020 through October 31, 2026) to amounts reflected in rates, with recovery/refund from or to customers via surcharge/sur-credit. Surcharge recoveries for write-offs of uncollectible expenses and late payment fees will each be subject to an annual cap that produces no more than a half percent (0.5 percent) total customer bill impact (estimated to be $2.5 million, $3.0 million, $3.5 million for Yr. 1, Yr. 2 and Yr. 3, respectively). Amounts in excess of the annual surcharge cap in a specific year may be rolled forward for recovery and will count towards the following year’s surcharge cap. Amounts in excess of the surcharge cap will be deferred as a regulatory asset for recovery in CECONY’s next steam base rate case.

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

(e)In general, if actual expenses for municipal infrastructure support (other than company labor) are below the amounts reflected in rates, CECONY will defer the difference for credit to customers, and if the actual expenses are above the amount reflected in rates, CECONY will defer for recovery from customers 80 percent of the difference subject to a maximum deferral, subject to certain conditions, of 30 percent of the amount reflected in the rate plan.

(g)Rates determined pursuant to this rate plan continued to be in effect until October 31, 2023. 2023 or Yr. 10 represents a partial year commencing January 1, 2023 through October 31, 2023.

(h)The impact of these base rate changes was deferred which resulted in an $8 million regulatory liability at December 31, 2016.


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(i)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.

(j)Calculated in accordance with the earnings calculation method prescribed in the rate order.

Pursuant to the CECONY 2023-2026 steam rate plan, CECONY may file petitions for approval of future decarbonization projects and may defer/capitalize up to $3 million in total incremental operation and maintenance and/or capital costs for preliminary work on future decarbonization projects until there is a NYSPSC order on cost recovery.


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O&R New York – Electric
Effective period (a)	January 2019 – December 2021	January 2022 – December 2024
Base rate changes	Yr. 1 – $13.4 million (a) Yr. 2 – $8.0 million (a) Yr. 3 – $5.8 million (a)	Yr. 1 – $4.9 million (h) Yr. 2 – $16.2 million (h) Yr. 3 – $23.1 million (h)
Amortizations to income of net regulatory (assets) and liabilities	Yr. 1 – $(1.5) million (b) Yr. 2 – $(1.5) million (b) Yr. 3 – $(1.5) million (b)	Yr. 1 – $11.8 million (i) Yr. 2 – $13.5 million (i) Yr. 3 – $15.2 million (i)
Other revenue sources	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.	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 In 2022 and 2023, the company recorded $2.7 million and $1.5 million of earnings adjustment mechanism incentives for energy efficiency, respectively.
Revenue decoupling mechanisms	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 reconciliation of actual to authorized electric delivery revenues. In 2022 and 2023, the company deferred $6.9 million and $3.4 million regulatory assets respectively.
Recoverable energy costs	Continuation of current rate recovery of purchased power costs.	Continuation of current rate recovery of purchased power and fuel costs.
Negative revenue adjustments	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 In 2019,2020 and 2021, the company did not record any negative revenue adjustments.	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 2022 and 2023, the company did not record any negative revenue adjustments.
Regulatory reconciliations	Reconciliation of expenses for pension and other postretirement benefits, environmental remediation costs, property taxes (c), energy efficiency program (d), major storms, the impact of new laws and certain other costs to amounts reflected in rates (e). In 2019, 2020 and 2021, the company deferred $4.3 million, $30.3 million and $24 million as net regulatory assets, respectively.	Reconciliation of late payment charges (k) and reconciliation of expenses for pension and other postretirement benefits, environmental remediation costs, property taxes (c), energy efficiency program (j), major storms, uncollectible expenses and certain other costs to amounts reflected in rates (e). In 2022 and 2023, the company deferred $9.4 million and $15.4 million as net regulatory liabilities, respectively.
Net utility plant reconciliations	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 (f): 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.	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 The company increased regulatory asset/liabilities by an immaterial amount in 2022 and 2023.
Average rate base	Yr. 1 – $878 million Yr. 2 – $906 million Yr. 3 – $948 million	Yr. 1 – $1,021 million Yr. 2 – $1,044 million Yr. 3 – $1,144 million


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Weighted average cost of capital (after-tax)	Yr. 1 – 6.97 percent Yr. 2 – 6.96 percent Yr. 3 – 6.96 percent	Yr. 1 – 6.77 percent Yr. 2 – 6.73 percent Yr. 3 – 6.72 percent
Authorized return on common equity	9.0 percent	9.2 percent
Actual return on common equity (g)	Yr. 1 – 9.6 percent Yr. 2 – 8.76 percent Yr. 3 – 9.16 percent	Yr. 1 – 8.96 percent Yr. 2 - 8.73 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, 2020 and 2021, earnings did not exceed the earnings 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. In 2022 and 2023, earnings did not exceed the earnings threshold.
Cost of long-term debt	Yr. 1 – 5.17 percent Yr. 2 – 5.14 percent Yr. 3 – 5.14 percent	Yr. 1 – 4.58 percent Yr. 2 – 4.51 percent Yr. 3 – 4.49 percent
Common equity ratio	48 percent	48 percent

(a)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.

(b)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 reflects amortization over a six year period of previously incurred incremental major storm costs.

(c)Deferrals for property taxes are limited to 90 percent of the difference from amounts reflected in rates, subject to an annual maximum for the remaining difference of not more than a 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.

(d)Energy efficiency costs are expensed as incurred. Such costs are subject to a downward-only reconciliation over the terms of the electric 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.

(e)In addition, the NYSDPS continues its 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.

(f)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.

(g)Calculated in accordance with the earnings calculation method prescribed in the rate order.

(h)The base rate changes will be implemented with increases of: Yr. 1 - $11.7 million; Yr. 2 - $11.7 million; and Yr. 3 - $11.7 million.

(i)Reflects amortization of, among other things, previously incurred incremental deferred storm costs over a five-year period.

(j)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.

(k)The rate plan includes certain COVID-19 provisions, such as: recovery of 2020 late payment charges over three years ($2.2 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.

In January 2024, O&R filed a request with the NYSPSC for an increase in the rates it charges for electric service rendered in New York, effective January 1, 2025, of $18.1 million. The filing reflects a return on common equity of 10.25 percent and a common equity ratio of 50 percent. The filing proposes continuation of the provisions with respect to recovery from customers of the cost of purchased power, and the reconciliation of actual expenses allocable to the electric business to the amounts for such costs reflected in electric rates for storm costs, uncollectible expense, pension and other postretirement benefit costs, environmental remediation and property taxes and recovery from customers for proposed climate change resilience investments.


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O&R New York – Gas
Effective period	January 2019 – December 2021	January 2022 – December 2024
Base rate changes	Yr. 1 – $(7.5) million (a) Yr. 2 – $3.6 million (a) Yr. 3 – $0.7 million (a)	Yr. 1 – $0.7 million (h) Yr. 2 – $7.4 million (h) Yr. 3 – $9.9 million (h)
Amortization to income of net regulatory (assets) and liabilities	Yr. 1 – $1.8 million (b) Yr. 2 – $1.8 million (b) Yr. 3 – $1.8 million (b)	Yr. 1 – $0.8 million Yr. 2 – $0.7 million Yr. 3 – $0.3 million
Other revenue sources	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.	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 In 2022 and 2023, the company recorded $0.2 million and immaterial amounts of earnings adjustment mechanism incentives for energy efficiency, respectively. In 2022 and 2023, the company recorded $0.2 million and $0.2 million of positive incentives, respectively.
Revenue decoupling mechanisms	Continuation of reconciliation of actual to authorized gas delivery revenues. 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 reconciliation of actual to authorized gas delivery revenues. In 2022 and 2023, the company deferred $2.0 million and $7.6 million as regulatory assets, respectively.
Recoverable energy costs	Continuation of current rate recovery of purchased gas costs.	Continuation of current rate recovery of purchased gas costs.
Negative revenue adjustments	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.	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 In 2022 and 2023, the company recorded $0.1 million and immaterial amounts of negative revenue adjustments, respectively.
Regulatory reconciliations	Reconciliation of expenses for pension and other postretirement benefits, environmental remediation costs, property taxes (c), energy efficiency program (d), the impact of new laws and certain other costs to amounts reflected in rates (e). 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.	Reconciliation of late payment charges (k) and reconciliation of expenses for pension and other postretirement benefits, environmental remediation costs, property taxes (i), energy efficiency program (j), major storms, uncollectible expenses and certain other costs to amounts reflected in rates. In 2022 and 2023, the company deferred $3.4 million and $12.1 million as net regulatory assets/liabilities, respectively.
Net utility plant reconciliations	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.	Target levels reflected in rates: Gas average net plant target Yr. 1 – $720 million Yr. 2 – $761 million Yr. 3 – $803 million In 2022 and 2023, the company deferred immaterial amounts as regulatory assets/liabilities.
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 – $694 million


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Weighted average cost of capital (after-tax)	Yr. 1 – 6.97 percent Yr. 2 – 6.96 percent Yr. 3 – 6.96 percent	Yr. 1 – 6.77 percent Yr. 2 – 6.73 percent Yr. 3 – 6.72 percent
Authorized return on common equity	9.0 percent	9.2 percent
Actual return on common equity (h)	Yr. 1 – 8.90 percent Yr. 2 – 9.58 percent Yr. 3 – 10.11 percent	Yr. 1 - 10.01 percent Yr. 2 - 10.40 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. In 2022 and 2023, actual earnings were $1.1 million and $2.8 million above the threshold, respectively.
Cost of long-term debt	Yr. 1 – 5.17 percent Yr. 2 – 5.14 percent Yr. 3 – 5.14 percent	Yr. 1 – 4.58 percent Yr. 2 – 4.51 percent Yr. 3 – 4.49 percent
Common equity ratio	48 percent	48 percent

(a)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)-(g) See footnotes (c) - (h) to the table under “O&R New York - Electric,” above.

(h) The base rate changes will be implemented with increases of: Yr. 1 – $4.4 million; Yr. 2 - $4.4 million; and Yr. 3 - $4.4 million.

(i) 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.

(j) See footnote (j) to the table under "O&R New York - Electric," above.

(k) The rate plan includes certain COVID-19 provisions, such as: recovery of 2020 late payment charges over three years ($0.6 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.

In January 2024, O&R filed a request with the NYSPSC for an increase in the rates it charges for gas service rendered in New York, effective January 1, 2025, of $14.4 million. The filing reflects a return on common equity of 10.25 percent and a common equity ratio of 50 percent. The filing proposes continuation of the provisions with respect to recovery from customers of the cost of purchased power, and the reconciliation of actual expenses allocable to the gas business to the amounts for such costs reflected in gas rates for uncollectible expense, pension and other postretirement benefit costs, environmental remediation and property taxes. The filing requested a reduction in the service lives of certain gas assets by 15 years in anticipation of the transition from gas to electric that is expected to result from implementation of the CLCPA.


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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	February 2020 – December 2021	January 2022
Base rate changes	$12 million	$9.65 million
Amortization to income of net regulatory (assets) and liabilities	$4.8 million over four years.	$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
Recoverable energy costs	Current rate recovery of purchased power costs.	Current rate recovery of purchased power costs.
Cost reconciliations	None	Reconciliation of uncollectible accounts, Demand Side Management and Clean Energy Program.
Average rate base	$229.9 million	$262.8 million
Weighted average cost of capital (after-tax)	7.11 percent	7.08 percent
Authorized return on common equity	9.5 percent	9.6 percent
Actual return on common equity	Yr. 1 – 5.4 percent Yr. 2 – 2.3 percent	Yr. 1 - 9.6 percent Yr. 2 - 9.7 percent
Cost of long-term debt	4.88 percent	4.74 percent
Common equity ratio	48.32 percent	48.51 percent

Effective July 2021, the NJBPU authorized a conservation incentive program for RECO, that covers all residential and most commercial customers, under which RECO’s actual electric distribution revenues are compared with the authorized distribution revenues and the difference accrued, with interest, for refund to, or recovery from, customers, as applicable. The conservation incentive program is not permitted if RECO’s actual return on equity exceeds the approved base rate filing return on equity by 50 basis points or more.

In December 2022, the NJBPU authorized a $47.8 million Infrastructure Investment Program (IIP) over a five-year period (2023 – 2027). RECO’s IIP provides accelerated infrastructure investments to enhance safety, reliability, and resiliency.

In October 2023, FERC approved a July 2023 settlement agreement among RECO, the New Jersey Division of Rate Counsel and the NJBPU that resolves all issues set for hearing and increases RECO's annual transmission revenue requirement from $16.9 million to $18.2 million, effective August 30, 2022 through December 31, 2023 and to $20.7 million, effective January 1, 2024.

In December 2023, the NJBPU authorized RECO to defer costs of $4.8 million related to major storms that occurred during 2022 and 2023 until RECO’s next base rate case.

Infrastructure Investment and Jobs Act

In January 2024, CECONY initiated an application for $100 million of federal grants for grid resilience, O&R and RECO jointly initiated an application for $100 million of federal grants for grid resilience, and CECONY, O&R and RECO initiated a joint application for $60 million of federal grants for smart grids under the Infrastructure Investment and Jobs Act (IIJA). Federal grants obtained pursuant to the IIJA are expected to be used to reduce customers’ costs for investments in CECONY’s, O&R’s, and RECO’s electric systems.

COVID - 19 Regulatory Matters

Due to the COVID-19 pandemic, New York State enacted laws prohibiting New York utilities, including CECONY and O&R, from disconnecting residential customers and small business customers. The Utilities largely suspended service disconnections, certain collection notices, final bill collection agency activity, new late payment charges and certain other fees from March 2020 through December 2021.

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 years ended December 31, 2020 and 2021. CECONY recorded $62 million and $11 million for electric and gas, respectively, as revenue for the year ended


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December 31, 2021, as permitted under the accounting rules for regulated utilities. Pursuant to its electric and gas rate plans, O&R recorded late payment charges and fees that were not billed for the years ended December 31, 2020 and December 31, 2021 of $1.7 million and $2 million, respectively, as revenue for the year ended December 31, 2021, as permitted under accounting rules for regulated utilities.

In June 2020, the NYSPSC directed CECONY to implement a summer cooling credit program to help mitigate the cost of staying home and operating air conditioning for health-vulnerable low-income customers due to the limited availability of public cooling facilities as a result of the COVID-19 social distancing measures. The $63.4 million cost of the program is being recovered over a five-year period that began January 2021.

In 2021, 2022, and 2023, New York implemented various programs providing arrears assistance to utility customers. One program is administered by the State Office of Temporary and Disability Assistance (OTDA) in coordination with the NYSDPS (the OTDA Program). Under the OTDA Program, CECONY and O&R qualify for a refundable tax credit for New York gross-receipts tax equal to the amount of arrears waived by the Utilities in the year that the arrears are certified by the NYSPSC. In addition, the NYSPSC authorized Phase 1 and Phase 2 COVID-19 arrears assistance programs whereby the Utilities were provided with customer credits towards reducing accounts receivable balances (the Phase 1 Order and Phase 2 Order, respectively). A portion of the Phase 1 Order credits were funded by New York State and the remaining Phase 1 Order credit amounts and all Phase 2 Order credit amounts will be recovered by the Utilities via surcharge mechanisms.

For the year ended December 31, 2022, CECONY and O&R issued total credits of $359.9 million and $6.1 million, respectively, towards reducing customers’ accounts receivable balances. For the year ended December 31, 2022, the total credits for CECONY were comprised of: $164.5 million pursuant to the New York State funding; $108.4 million pursuant to the Phase 1 Order, that will be recovered via a surcharge mechanism over a four-year period that began September 2022; a $7 million reserve for CECONY; and $80 million in qualified tax credits and payments pursuant to the OTDA Program described above. For the year ended December 31, 2022, the total credits for O&R were comprised of: $1.6 million pursuant to the New York State funding; $3.2 million pursuant to the Phase 1 order, that was recovered via a surcharge mechanism over a one-year period that began September 2022; and $1.3 million in qualified tax credits and payments pursuant to the OTDA Program described above.

For the year ended December 31, 2023, CECONY and O&R issued total net credits of $352.3 million and $2.9 million, respectively, towards reducing customers’ accounts receivable balances. For the year ended December 31, 2023, the total credits for CECONY were comprised of: $13.2 million pursuant to the Phase 1 Order; $327.6 million pursuant to the Phase 2 Order that will be recovered via a surcharge mechanism over a ten-year period that began June 2023; and $11.5 million in qualified tax credits and payments pursuant to the OTDA Program described above. For the year ended December 31, 2023, the total credits for O&R were comprised of: $0.1 million pursuant to the Phase 1 Order; $2.1 million pursuant to the Phase 2 Order that will be recovered via a surcharge mechanism over a one-year period that began April 2023; and $0.7 million in qualified tax credits and payments pursuant to the OTDA Program described above.

Other Regulatory Matters

In October 2023, CECONY and O&R replaced their separate existing customer billing and information systems with a single new customer billing and information system. In April 2023, CECONY filed a petition with the NYSPSC for permission to capitalize incremental costs for the new system above a $421 million limit on capital investments included in CECONY’s 2020 – 2022 electric and gas rate plans. At December 31, 2023, CECONY's incurred costs for the new system were approximately $496 million ($75 million above the $421 million limit in the rate plans), all of which have been capitalized. CECONY cannot predict the NYSPSC’s response to its April 2023 petition and the NYSPSC may prohibit CECONY from capitalizing some or all of the costs above the $421 million limit. O&R's 2022 - 2024 electric and gas rate plans do not include a limit on capitalization of new system costs.

In January 2018, the NYSPSC issued an order 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 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, CECONY's steam plans prior to November 2023. 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


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a portion of the regulatory asset and must be corrected through an increase in future years’ revenue requirements. The regulatory asset ($1,113 million and $18 million for CECONY and O&R, respectively, as of December 31, 2023 and $1,150 million and $22 million for CECONY and O&R, respectively, as of December 31, 2022 and which is not earning a return) is netted against the future income tax regulatory liability on the Companies’ consolidated balance sheet. The Utilities are unable to estimate the amount or range of their possible loss, if any, related to this matter. At December 31, 2023, the Utilities had not accrued a liability related to this matter.


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Regulatory Assets and Liabilities

Regulatory assets and liabilities at December 31, 2023 and 2022 were comprised of the following items:


	Con Edison		CECONY
(Millions of Dollars)	2023	2022	2023	2022
Regulatory assets
Environmental remediation costs	$1,105	$991	$1,022	$906
System peak reduction and energy efficiency programs (a)	1,057	783	1,038	780
COVID - 19 pandemic deferrals (b)	789	396	782	389
Revenue taxes	476	436	455	417
Deferred storm costs (c)	206	270	115	173
Property tax reconciliation (d)	169	121	169	121
Deferred derivative losses - long term	163	31	148	26
Electric vehicle make ready (e)	73	33	68	30
MTA power reliability deferral (f)	61	92	61	92
Pension and other postretirement benefits deferrals	48	279	39	240
Gas service line deferred costs	43	99	43	99
Legacy meters	17	20	—	—
Unrecognized pension and other postretirement costs (g)	—	78	—	78
Other	400	345	374	318
Regulatory assets – noncurrent	4,607	3,974	4,314	3,669
Deferred derivative losses - short term	269	184	253	178
Recoverable energy costs	12	121	1	108
Regulatory assets – current	281	305	254	286
Total Regulatory Assets	$4,888	$4,279	$4,568	$3,955
Regulatory liabilities
Future income tax*	$1,535	$1,753	$1,404	$1,616
Allowance for cost of removal less salvage (h)	1,456	1,315	1,266	1,137
Unrecognized pension and other postretirement costs (g)	943	1,638	867	1,536
Pension and other postretirement benefit deferrals	284	144	233	98
Net unbilled revenue deferrals	278	204	278	204
2022 and 2023 late payment charge deferral	167	127	161	123
System benefit charge carrying charge	92	73	88	69
Deferred derivative gains - long term	49	145	49	130
Net proceeds from sale of property	48	69	47	69
Settlement of prudence proceeding (i)	11	10	11	10
Other	465	549	414	489
Regulatory liabilities – noncurrent	5,328	6,027	4,818	5,481
Deferred derivative gains - short term	74	311	71	287
Refundable energy costs	71	34	36	—
Revenue decoupling mechanism	—	29	—	21
Regulatory liabilities—current	145	374	107	308
Total Regulatory Liabilities	$5,473	$6,401	$4,925	$5,789

See "Federal Income Tax" in Note A, "Other Regulatory Matters," above, and Note L.

(a) 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.

(b) COVID - 19 Deferrals include (1) the amount to be collected from customers related to the Emergency Summer Cooling Credits program for CECONY, (2) 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, (3) deferrals under CECONY and O&R's electric and gas rate plans for the reconciliation of write-offs of customer accounts receivable balances to amounts reflected in rates and (4) deferral related to the arrears relief programs. Amounts deferred under the arrears relief programs were $398.6 million and $2.1 million for CECONY and O&R at December 31, 2023, respectively, and $93.5 million and $2.6 million at December 31, 2022, respectively, and receive a return at the pre-tax weighted average cost of capital.

(c) 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.

(d) 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.

(e) Supports the development of electric infrastructure and equipment necessary to accommodate an anticipated increase in the deployment of electric vehicles within New York State.


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(f) 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.

(g) Unrecognized pension and other postretirement costs represent the net regulatory liability associated with the accounting rules for retirement benefits. See "Pension and Other Postretirement Benefits" in Note A.

(h) Allowance for cost of removal less salvage represents cash previously collected from customers to fund future anticipated removal expenditures.

(i) 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.

The NYSPSC has authorized CECONY to accrue unbilled electric, gas and steam revenues. CECONY has deferred the differences between unbilled revenues and energy costs for the future benefit of customers by recording a regulatory liability of $278 million and $204 million at December 31, 2023 and 2022, respectively.

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

In general, the Utilities are receiving or being credited with a return on their regulatory assets for which a cash outflow has been made ($2,541 million and $2,304 million for Con Edison, and $2,359 million and $2,097 million for CECONY at December 31, 2023 and 2022, respectively). Regulatory assets of RECO for which a cash outflow has been made ($24 million and $21 million at December 31, 2023 and 2022, respectively) are not receiving or being credited with a return. RECO recovers regulatory assets over a period of up to four years or until they are addressed in its next base rate case in accordance with the rate provisions approved by the NJBPU. Regulatory liabilities are treated in a consistent manner.

Regulatory assets that represent future financial obligations and were deferred in accordance with the Utilities’ rate plans or orders issued by state regulators do not earn a return until such time as a cash outlay has been made. Regulatory liabilities are treated in a consistent manner. At December 31, 2023 and 2022, regulatory assets for Con Edison and CECONY that did not earn a return consisted of the following items:

Regulatory Assets Not Earning a Return*


	Con Edison		CECONY
(Millions of Dollars)	2023	2022	2023	2022
Unrecognized pension and other postretirement costs	$—	$78	$—	$78
Environmental remediation costs	1,105	987	1,022	903
Revenue taxes	490	414	470	397
Deferred derivative losses - long term	163	31	148	26
COVID-19 deferral for uncollectible accounts receivable	291	253	288	249
Other	29	28	28	27
Deferred derivative losses - current	269	184	253	178
Total	$2,347	$1,975	$2,209	$1,858

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

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

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

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


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the majority of the revenue taxes over the remaining book lives of the electric and gas plant assets, as well as the steam plant assets for CECONY.

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

Note C – Capitalization

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, 2023 and 2022, 345,415,772 and 354,962,058 shares, respectively, of Con Edison common stock were outstanding. At December 31, 2023 and 2022, 235,488,094 million shares of CECONY common stock were outstanding, all of which were owned by Con Edison. At December 31, 2023 and 2022, Con Edison had 33,753,963 and 23,210,700 treasury shares, respectively, 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 2023, Con Edison entered into accelerated share repurchase agreements with two dealers to repurchase $1,000 million in aggregate of Con Edison’s Common Shares ($.10 par value) (Common Shares). Con Edison made payments of $1,000 million in aggregate to the dealers and received deliveries of 10,543,263 Common Shares in aggregate.

Capitalization of Con Edison

At December 31, 2023 and 2022, 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 for the 2022 period includes the long-term debt of 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 2024-2028 is as follows:


(Millions of Dollars)	Con Edison	(a)	CECONY
2024	$250		$250
2025	—		—
2026	250		250
2027	430		350
2028	800		800

(a)Amounts shown exclude $62 million of debt for Broken Bow II, a deferred project, which was classified as held for sale as of December 31,

2023 and is shown under “Project Debt Held for Sale" on Con Edison's Consolidated Statement of Capitalization. See "Assets Held for Sale" in Note A and Note X for additional information.

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, 2023 and 2022 are:


(Millions of Dollars)	2023				2022
Long-Term Debt (including current portion) (a)	Carrying Amount		Fair Value		Carrying Amount		Fair Value
Con Edison	$22,177	(b)	$20,525	(b)	$20,796	(c)	$18,234	(c)
CECONY	21,060		19,517		19,080		16,699


132			CON EDISON ANNUAL REPORT 2023

(a)Amounts shown are net of unamortized debt expense and unamortized debt discount of $222 million and $215 million for Con Edison and CECONY, respectively, as of December 31, 2023 and $202 million and $195 million for Con Edison and CECONY, respectively, as of December 31, 2022.

(b)Amounts shown exclude the debt of Broken Bow II, a deferred project that was classified as held for sale as of December 31, 2023 and is shown under “Project Debt Held for Sale" on Con Edison's Consolidated Statement of Capitalization. The carrying value and fair value of Broken Bow II's long-term debt, including the current portion, as of December 31, 2023 was $62 million and $58 million, respectively. On March 1, 2023, Con Edison completed the sale of all of the stock of the Clean Energy Businesses. See Note W and Note X.

(c)Amounts shown exclude the debt of the Clean Energy Businesses, that were classified as held for sale as of December 31, 2022. See "Assets Held for Sale" in Note A, and Note X for additional information. The carrying value and fair value of the Clean Energy Businesses’ long-term debt, including the current portion, as of December 31, 2022 was $2,645 million and $2,489 million, respectively. On March 1, 2023, Con Edison completed the sale of all of the stock of the Clean Energy Businesses. See Note W and Note X.

The fair values of the Companies' long-term debt have been estimated primarily using available market information and at December 31, 2023 are classified as Level 2 liabilities (see Note R).

Significant Debt Covenants

The significant debt covenants under the financing arrangements for the Companies' debentures 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. 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, 2023.

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

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


CON EDISON ANNUAL REPORT 2023			133

At December 31, 2023, Con Edison had $2,288 million of commercial paper outstanding, of which $1,903 million was outstanding under CECONY’s program. The weighted average interest rate at December 31, 2023 was 5.6 percent for both Con Edison and CECONY. At December 31, 2022, Con Edison had $2,640 million of commercial paper outstanding of which $2,300 million was outstanding under CECONY’s program. The weighted average interest rate at December 31, 2022 was 4.8 percent for both Con Edison and CECONY.

At December 31, 2023, no loans or letters of credit were outstanding under the Credit Agreement and no loans were outstanding under the CECONY Credit Agreement. At December 31, 2022, no loans and an immaterial amount of letters of credit were outstanding under the 2016 Credit Agreement and no loans were outstanding under the 2022 CECONY Credit Agreement.

The banks’ commitments under the Credit Agreement and the CECONY Credit Agreement are subject to certain conditions, including that there be no event of default. The commitments are not subject to maintenance of credit rating levels or the absence of a material adverse change. Upon a change of control of, or upon an event of default by one of the Companies under the Credit Agreement or by CECONY under the CECONY Credit Agreement, the banks may terminate their commitments with respect to that company, declare any amounts owed by that company immediately due and payable and for the Credit Agreement, require that company to provide cash collateral relating to the letters of credit issued for it under the Credit Agreement. Events of default for a company include that company exceeding at any time of a ratio of consolidated debt to consolidated total capital of 0.65 to 1 (at December 31, 2023 this ratio was 0.54 to 1 for Con Edison and 0.55 to 1 for CECONY); that company having liens on its assets in an aggregate amount exceeding ten percent of its consolidated net tangible assets, subject to certain exceptions; that company or any of its material subsidiaries failing to make one or more payments in respect of material financial obligations (in excess of an aggregate $150 million of debt or derivative obligations other than non-recourse debt) of that company; 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, 2023.

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, the Consolidated Edison Retirement Plan, that covers substantially all employees of CECONY, O&R and Con Edison Transmission. 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/(Credit)

The components of the Companies’ total periodic benefit cost/(credit) for 2023, 2022 and 2021 were as follows:


	Con Edison			CECONY
(Millions of Dollars)	2023	2022	2021	2023	2022	2021
Service cost – including administrative expenses	$161	$287	$343	$151	$270	$321
Interest cost on projected benefit obligation	649	505	471	611	475	443
Expected return on plan assets	(1,114)	(1,168)	(1,096)	(1,061)	(1,109)	(1,040)
Recognition of net actuarial loss/(gain)	(232)	377	787	(219)	358	746
Recognition of prior service credit	(17)	(16)	(17)	(19)	(21)	(19)
TOTAL PERIODIC BENEFIT COST/(CREDIT)	$(553)	$(15)	$488	$(537)	$(27)	$451
Cost capitalized	(81)	(137)	(154)	(78)	(129)	(146)
Reconciliation to rate level	282	259	(226)	261	245	(216)
Total expense/(benefit) recognized	$(352)	$107	$108	$(354)	$89	$89

Accounting rules require 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 lines "Other income" or “Other deductions” in the Companies' consolidated income statements. The rules also require disclosure of the weighted-average interest


134			CON EDISON ANNUAL REPORT 2023

crediting rate used for cash balance plans for all periods presented, and a narrative description of significant changes in the benefit obligation which are included below and, as applicable, in Note F.

Funded Status

The funded status at December 31, 2023, 2022 and 2021 was as follows:


	Con Edison			CECONY
(Millions of Dollars)	2023	2022	2021	2023	2022	2021
CHANGE IN PROJECTED BENEFIT OBLIGATION
Projected benefit obligation at beginning of year	$12,113	$17,357	$18,965	$11,395	$16,341	$17,821
Service cost – excluding administrative expenses	156	283	337	146	266	317
Interest cost on projected benefit obligation	649	505	471	611	475	443
Net actuarial loss/(gain)	599	(5,102)	(1,547)	572	(4,845)	(1,441)
Plan amendments	3	—	—	—	—	—
Benefits paid	(808)	(930)	(869)	(747)	(842)	(799)
PROJECTED BENEFIT OBLIGATION AT END OF YEAR	$12,712	$12,113	$17,357	$11,977	$11,395	$16,341
CHANGE IN PLAN ASSETS
Fair value of plan assets at beginning of year	$14,979	$18,504	$17,022	$14,248	$17,566	$16,147
Actual return on plan assets	1,261	(2,583)	1,935	1,201	(2,453)	1,838
Employer contributions	21	30	469	18	17	432
Benefits paid	(808)	(930)	(869)	(747)	(842)	(799)
Administrative expenses	(49)	(42)	(53)	(46)	(40)	(52)
FAIR VALUE OF PLAN ASSETS AT END OF YEAR	$15,404	$14,979	$18,504	$14,674	$14,248	$17,566
FUNDED STATUS	$2,692	$2,866	$1,147	$2,697	$2,853	$1,225
Unrecognized net loss/(gain)	$(757)	($1,485)	$205	$(705)	($1,397)	$207
Unrecognized prior service credits	(105)	(124)	(140)	(124)	(143)	(163)
Accumulated benefit obligation	$11,739	$11,167	$15,469	$11,031	$10,478	$14,504

The decrease in the pension funded status at December 31, 2023 for Con Edison and CECONY of $174 million and $156 million, respectively, compared with December 31, 2022, 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 a return on plan assets that was greater than the expected return. The increase in the pension funded status at December 31, 2022 for Con Edison and CECONY of $1,719 million and $1,628 million, respectively, compared with December 31, 2021, was primarily due to a decrease in the plan's 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 determination of the discount rate assumption. For Con Edison, the 2023 decrease in pension funded status asset corresponds with a decrease to regulatory liabilities of $741 million for unrecognized net gains and unrecognized prior service credits associated with the Utilities consistent with the accounting rules for regulated operations, a debit to OCI of $1 million (net of taxes) for the unrecognized net gains, and an immaterial change to OCI (net of taxes) for the unrecognized prior service credits associated with certain employees of Con Edison Transmission and RECO who previously worked for the Utilities. For 2023, included within the funded status are noncurrent liabilities of $337 million and $313 million for Con Edison and CECONY, respectively. For 2022, included within the funded status are noncurrent liabilities of $311 million and $287 million for Con Edison and CECONY, respectively.

For CECONY, the decrease in pension funded status asset at December 31, 2023 corresponds with a decrease to regulatory liabilities of $710 million for unrecognized net gains and unrecognized prior service credits consistent with the accounting rules for regulated operations, and also a debit to OCI of $2 million (net of taxes) for unrecognized net gains, and an immaterial change to OCI (net of taxes) for the unrecognized prior service costs associated with certain employees of Con Edison Transmission who previously worked for CECONY.

At December 31, 2023 and 2022, Con Edison’s investments included $524 million and $459 million, respectively, held in external trust accounts for benefit payments pursuant to the supplemental retirement plans. Included in these amounts for CECONY were $502 million and $439 million, respectively. See Note R. The accumulated benefit obligations for the supplemental retirement plans for Con Edison and CECONY were $349 million and $323 million as of December 31, 2023, respectively, and $306 million and $280 million as of December 31, 2022, respectively.


CON EDISON ANNUAL REPORT 2023			135

Assumptions

The actuarial assumptions were as follows:


	2023		2022		2021
Weighted-average assumptions used to determine benefit obligations at December 31:
Discount rate	5.15	%	5.45	%	3.00	%
Interest crediting rate for cash balance plan	4.20	%	4.00	%	3.50	%
Rate of compensation increase
CECONY	3.80	%	3.80	%	3.80	%
O&R	3.20	%	3.20	%	3.20	%
Weighted-average assumptions used to determine net periodic benefit cost for the years ended December 31:
Discount rate	5.45	%	3.00	%	2.55	%
Interest crediting rate for cash balance plan	4.00	%	3.50	%	3.00	%
Expected return on plan assets	6.75	%	7.00	%	7.00	%
Rate of compensation increase
CECONY	3.80	%	3.80	%	3.80	%
O&R	3.20	%	3.20	%	3.20	%

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)	2024	2025	2026	2027	2028	2029-2033
Con Edison	$768	$817	$789	$804	$811	$4,158
CECONY	711	762	734	750	756	3,891

Expected Contributions

Based on estimates as of December 31, 2023, the Companies expect to make contributions to the pension plans during 2024 of $11 million (of which $9 million is to be made by CECONY). The Companies’ policy is to fund the total periodic benefit cost, if any, of the qualified plan to the extent tax deductible and to also contribute to the non-qualified supplemental plans.


136			CON EDISON ANNUAL REPORT 2023

Plan Assets

The asset allocations for the pension plan at the end of 2023, 2022 and 2021, and the target allocation for 2024 are as follows:


	Target Allocation Range	Plan Assets at December 31,
Asset Category	2024	2023		2022		2021
Equity Securities	26% - 30%	26	%	33	%	50	%
Debt Securities	42% - 60%	50	%	50	%	38	%
Real Estate and Other Alternatives	14% - 30%	24	%	17	%	12	%
Total		100	%	100	%	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 Named Fiduciary Committee (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 2024 reflects the results of such a study conducted in 2022.

Individual fund managers operate under written guidelines provided by Con Edison that 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 asset class performance, total fund performance, and compliance with asset allocation guidelines. Management changes fund managers and rebalances the portfolio as appropriate.

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 2023			137

The fair values of the pension plan assets at December 31, 2023 by asset category are as follows:


(Millions of Dollars)	Level 1	Level 2	Total
Investments within the fair value hierarchy
U.S. Equity (a)	$2,474	$1	$2,475
International Equity (b)	1,584	—	1,584
U.S. Government Issued Debt (c)	—	615	615
Corporate Bonds Debt (d)	—	5,526	5,526
Structured Assets Debt (e)	—	132	132
Other Fixed Income Debt (f)	—	1,210	1,210
Cash and Cash Equivalents (g)	36	302	338
Futures (h)	19	—	19
Total investments within the fair value hierarchy	$4,113	$7,786	$11,899
Investments measured at NAV per share (n)
Private Equity (i)			1,031
Real Estate (j)			1,876
Hedge Funds (k)			723
Total investments valued using NAV per share			$3,630
Funds for retiree health benefits (l)	(52)	(96)	(148)
Funds for retiree health benefits measured at NAV per share (l)(n)			(45)
Total funds for retiree health benefits			$(193)
Investments (excluding funds for retiree health benefits)	$4,061	$7,690	$15,336
Pending activities (m)			68
Total fair value of plan net assets			$15,404

(a)U.S. Equity is comprised of both actively- and passively-managed investments in domestic equity index funds and actively-managed small-capitalization equities.

(b)International Equity is comprised of investments in international equity index funds and actively-managed international equities.

(c)U.S. Government Issued Debt is comprised of agency and treasury securities.

(d)Corporate Bonds Debt is comprised of debt issued by various corporations.

(e)Structured Assets Debt is comprised of commercial-mortgage-backed securities and collateralized mortgage obligations.

(f)Other Fixed Income Debt is comprised of municipal bonds, sovereign debt and regional governments.

(g)Cash and Cash Equivalents are comprised of short term investments, money markets, foreign currency and cash collateral.

(h)Futures are comprised of exchange-traded financial contracts encompassing U.S. Equity, International Equity and U.S. Government indices.

(i)Private Equity is comprised of global private market investments. Private equity's investment objective is to generate returns on capital from a diversified portfolio of primary fund investments, secondaries and co-investments. The plan's unfunded commitments to private equity were approximately $193 million at December 31, 2023. However, the managers also expect to make significant cash flow distributions in 2024 and 2025. While the investments in this asset class cannot be redeemed, the plan would be able to receive distributions from selling its limited partnership interests in the secondary market, which would be expected to take three to six months.

(j)Real Estate investments are open-end real estate funds that invest in a portfolio of real properties that are broadly diversified by geography and property type. The real estate asset class is expected to produce returns from income and capital appreciation. Real estate also provides a hedge against inflation. The funds allow for quarterly redemptions, however the amount and timing of distributions are subject to market conditions and are currently uncertain.

(k)Hedge Funds are structured as a custom fund of one and can invest in external hedge fund managers that pursue a wide array of strategies including event driven, fundamental long/short, relative value, directional trading, and direct sourcing. These investments seek to generate positive absolute returns with lower volatility than other investments. The various hedge fund managers can invest in all financial instruments. Substantially all of the investment could be liquidated within 18 months.

(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 reflects adjustments for available estimates at year end.

(n)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.


138			CON EDISON ANNUAL REPORT 2023

The fair values of the pension plan assets at December 31, 2022 by asset category are as follows:


(Millions of Dollars)	Level 1	Level 2	Total
Investments within the fair value hierarchy
U.S. Equity (a)	$2,150	$3	$2,153
International Equity (b)	1,534	—	1,534
U.S. Government Issued Debt (c)	—	823	823
Corporate Bonds Debt (d)	—	4,961	4,961
Structured Assets Debt (e)	—	183	183
Other Fixed Income Debt (f)	—	1,088	1,088
Cash and Cash Equivalents (g)	71	274	345
Futures (h)	(1)	—	(1)
Total investments within the fair value hierarchy	$3,754	$7,332	$11,086
Investments measured at NAV per share (n)
Private Equity (i)			1,018
Real Estate (j)			2,366
Hedge Funds (k)			657
Total investments valued using NAV per share			$4,041
Funds for retiree health benefits (l)	(48)	(91)	(139)
Funds for retiree health benefits measured at NAV per share (l)(n)			(51)
Total funds for retiree health benefits			$(190)
Investments (excluding funds for retiree health benefits)	$3,706	$7,241	$14,937
Pending activities (m)			$42
Total fair value of plan net assets			$14,979

(a) - (n) Reference is made to footnotes (a) through (n) in the above table of pension plan assets at December 31, 2023 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:


	For the Years Ended December 31,
(Millions of Dollars)	2023	2022	2021
Con Edison	$57	$57	$55
CECONY	51	48	46

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 Con Edison Transmission are eligible to receive benefits under these programs. Programs include the Consolidated Edison Retiree Health Program for

Management Employees, the Consolidated Edison Retiree Health Program for Weekly Employees, the Consolidated Edison Group Life Insurance Plan, the Orange and Rockland Utilities, Inc. Hourly Retirees’ Group Insurance Plan, and the Orange and Rockland Utilities, Inc. Management Retirees’ Group Insurance Plan.

Total Periodic Benefit Cost

The components of the Companies’ total periodic postretirement benefit costs/(credit) for 2023, 2022 and 2021 were as follows:


CON EDISON ANNUAL REPORT 2023			139


	Con Edison			CECONY
(Millions of Dollars)	2023	2022	2021	2023	2022	2021
Service cost	$14	$18	$22	$12	$15	$16
Interest cost on accumulated other postretirement benefit obligation	57	35	33	49	30	28
Expected return on plan assets	(70)	(72)	(68)	(56)	(58)	(56)
Recognition of net actuarial loss/(gain)	(16)	(14)	31	(8)	(9)	27
Recognition of prior service credit	(2)	(1)	(3)	—	—	(1)
TOTAL PERIODIC POSTRETIREMENT BENEFIT COST/(CREDIT)	$(17)	$(34)	$15	$(3)	$(22)	$14
Cost capitalized	(6)	(8)	(9)	(5)	(7)	(7)
Reconciliation to rate level	4	29	(7)	(2)	24	(12)
Total credit recognized	$(19)	$(13)	$(1)	$(10)	$(5)	$(5)

For information about the presentation of the components of net periodic benefit cost and disclosure requirements, see Note E.

Funded Status

The funded status of the programs at December 31, 2023, 2022 and 2021 were as follows:


	Con Edison			CECONY
(Millions of Dollars)	2023	2022	2021	2023	2022	2021
CHANGE IN BENEFIT OBLIGATION
Benefit obligation at beginning of year	$1,058	$1,398	$1,425	$921	$1,189	$1,209
Service cost	14	18	22	12	15	16
Interest cost on accumulated postretirement benefit obligation	57	35	33	49	30	28
Net actuarial gain	(93)	(311)	(13)	(94)	(239)	(3)
Benefits paid and administrative expenses, net of subsidies	(128)	(130)	(117)	(118)	(121)	(107)
Participant contributions	55	48	48	55	47	46
BENEFIT OBLIGATION AT END OF YEAR	$963	$1,058	$1,398	$825	$921	$1,189
CHANGE IN PLAN ASSETS
Fair value of plan assets at beginning of year	$860	$1,150	$1,115	$708	$955	$940
Actual return on plan assets	116	(225)	92	84	(187)	67
Employer contributions	22	13	6	17	10	3
Employer group waiver plan subsidies	56	55	21	52	50	19
Participant contributions	55	48	48	55	47	46
Benefits paid	(180)	(181)	(132)	(166)	(167)	(120)
FAIR VALUE OF PLAN ASSETS AT END OF YEAR	$929	$860	$1,150	$750	$708	$955
FUNDED STATUS	$(34)	$(198)	$(248)	$(75)	$(213)	$(234)
Unrecognized net loss/(gain)	($90)	$37	$41	($41)	$78	$67
Unrecognized prior service costs	(10)	(12)	(13)	—	—	—

The decrease in the other postretirement benefits funded status liability at December 31, 2023 for Con Edison and CECONY of $164 million and $138 million, respectively, compared with December 31, 2022, was primarily due to updated per capita costs based on plan experience and higher asset returns in 2023. The decrease in the other postretirement benefits funded status liability at December 31, 2022 for Con Edison and CECONY of $50 million and $21 million, respectively, compared with December 31, 2021, was primarily due to a decrease in the plans' projected benefit obligation as a result of an increase in the discount rate, which more than offset the decrease in the fair value of plan assets as a result of the actual return on plan assets. For 2023, included within the funded status are noncurrent assets of $224 million and $154 million for Con Edison and CECONY, respectively. For 2022, included within the funded status are noncurrent assets of $72 million and $27 million for Con Edison and CECONY, respectively.


140			CON EDISON ANNUAL REPORT 2023

For Con Edison, the decrease in funded status liability at December 31, 2023 corresponds with a net decrease to regulatory assets and increase to regulatory liabilities of $123 million for unrecognized net gains and unrecognized prior service costs associated with the Utilities consistent with the accounting rules for regulated operations, a credit to OCI of $2 million (net of taxes) for the unrecognized net gains and an immaterial change to OCI for the unrecognized prior service costs associated with Con Edison Transmission and RECO.

For CECONY, the decrease in funded status liability at December 31, 2023 corresponds with a net decrease to regulatory assets and increase to regulatory liabilities of $119 million for unrecognized net gains and the unrecognized prior service costs associated with the company consistent with the accounting rules for regulated operations, a debit to OCI of $1 million (net of taxes) for the unrecognized net gains and an immaterial change to OCI for the unrecognized prior service costs associated with eligible employees of Con Edison Transmission who previously worked for CECONY.

Assumptions

The actuarial assumptions were as follows:


	2023		2022		2021
Weighted-average assumptions used to determine benefit obligations at December 31:
Discount Rate
CECONY	5.05	%	5.35	%	2.75	%
O&R	5.15	%	5.45	%	3.00	%
Weighted-average assumptions used to determine net periodic benefit cost for the years ended December 31:
Discount Rate
CECONY	5.35	%	2.75	%	2.25	%
O&R	5.45	%	3.00	%	2.55	%
Expected Return on Plan Assets	6.80	%	6.80	%	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, 2023 were assumed to increase each year, with the initial rate gradually decreasing to the ultimate rate as follows:


	Initial Cost Trend Rate	Ultimate Cost Trend Rate	Year That Ultimate Rate is Reached
Pre-65 Medical	6.80%	4.50%	2036
Post-65 Medical	4.50%	4.50%	—
Prescription Medications	7.25%	4.50%	2035

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)	2024	2025	2026	2027	2028	2029-2033
Con Edison	$68	$72	$73	$73	$73	$353
CECONY	60	63	64	64	64	308

Expected Contributions

Based on estimates as of December 31, 2023, Con Edison expects to make a contribution of $7 million (all of which is expected to be made by CECONY) to the other postretirement benefit plans in 2024. The Companies’ policy is to fund the total periodic benefit cost of the plans to the extent tax deductible.


CON EDISON ANNUAL REPORT 2023			141

Plan Assets

The asset allocations for CECONY’s other postretirement benefit plans at the end of 2023, 2022 and 2021, and the target allocation for 2024 are as follows:


	Target Allocation Range	Plan Assets at December 31,
Asset Category	2024	2023		2022		2021
Equity Securities	35%-55%	44	%	49	%	55	%
Debt Securities	40%-60%	51	%	51	%	45	%
Real Estate and Other Alternatives	—%-9%	5	%	—	%	—	%
Total	100%	100	%	100	%	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, 2023 by asset category as defined by the accounting rules for fair value measurements (see Note R) are as follows:


(Millions of Dollars)	Level 1	Level 2	Total
Equity (a)	$—	$331	$331
Other Fixed Income Debt (b)	—	323	323
Cash and Cash Equivalents (c)	7	18	25
Asset Allocation Funds (d)	—	38	38
Total investments	$7	$710	$717
Funds for retiree health benefits (e)	52	96	148
Investments (including funds for retiree health benefits)	$59	$806	$865
Funds for retiree health benefits measured at net asset value (e)(f)			45
Pending activities (g)			19
Total fair value of plan net assets			$929

(a)Equity is comprised of a passively managed commingled index fund benchmarked to the MSCI All Country World Index.

(b)Other Fixed Income Debt is comprised of 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 is comprised of short-term investments and money markets.

(d)Asset Allocation Funds is comprised of investments in a global asset allocation fund.

(e)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.

(f)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.

(g)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.


142			CON EDISON ANNUAL REPORT 2023

The fair values of the plans' assets at December 31, 2022 by asset category (see Note R) are as follows:


(Millions of Dollars)	Level 1	Level 2	Total
Equity (a)	$—	$339	$339
Other Fixed Income Debt (b)	10	275	285
Cash and Cash Equivalents (c)	—	25	25
Total investments	$10	$639	$649
Funds for retiree health benefits (d)	48	91	139
Investments (including funds for retiree health benefits)	$58	$730	$788
Funds for retiree health benefits measured at net asset value (d)(e)			51
Pending activities (f)			21
Total fair value of plan net assets			$860

(a) - (f) Reference is made to footnotes (a) through (f) in the above table of other postretirement benefit plan assets at December 31, 2023 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, 2023 and 2022 were as follows:


	Con Edison		CECONY
(Millions of Dollars)	2023	2022	2023	2022
Accrued Liabilities:
Manufactured gas plant sites	$1,016	$876	$924	$782
Other Superfund Sites	102	121	102	121
Total	$1,118	$997	$1,026	$903
Regulatory assets	$1,105	$991	$1,022	$906

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 2023			143

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, 2023 and 2022 were as follows:


	Con Edison		CECONY
(Millions of Dollars)	2023	2022	2023	2022
Remediation costs incurred	$13	$21	$12	$20

Insurance and other third party recoveries received by Con Edison or CECONY were immaterial in 2023 and 2022.

Con Edison and CECONY estimate that in 2024 they will incur costs for remediation of approximately $62 million and $60 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 2023, 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 $3,440 million and $3,295 million, respectively. These estimates were based on the assumption that there is contamination at all sites, including those that have not yet been fully investigated and additional assumptions about the extent of the contamination and the type and extent of the remediation that may be required. Actual experience may be materially different.

Asbestos Proceedings

Suits have been brought in New York State and federal courts against the Utilities and many other defendants, wherein a large number of plaintiffs sought large amounts of compensatory and punitive damages for deaths and injuries allegedly caused by exposure to asbestos at various premises of the Utilities. The suits that have been resolved, that 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, 2023, Con Edison and CECONY have accrued their estimated aggregate undiscounted potential liabilities for these suits and additional suits that may be brought through 2035 as shown in the following table. These estimates were based upon a combination of modeling, historical data analysis and risk factor assessment. Courts have applied, and 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, 2023 and 2022 were as follows:


	Con Edison		CECONY
(Millions of Dollars)	2023	2022	2023	2022
Accrued liability – asbestos suits	$8	$8	$7	$7
Regulatory assets – asbestos suits	8	8	7	7
Accrued liability – workers’ compensation	56	61	54	59
Regulatory liabilities – workers’ compensation	17	11	17	11


144			CON EDISON ANNUAL REPORT 2023

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 CECONY, the City of New York, the Pipeline and Hazardous Materials Safety Administration and the NYSPSC. In June 2015, the NTSB issued a final report concerning the incident, its probable cause and safety recommendations. The NTSB determined that the probable cause of the incident was (1) the failure of a defective fusion joint at a service tee (which joined a plastic service line to a plastic distribution main) installed by CECONY 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, that caused it to sag and overstressed the defective fusion joint. The NTSB also made safety recommendations, including recommendations to CECONY 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 CECONY related to the NYSPSC's investigations of the incident and the practices of qualifying persons to perform plastic fusions. Pursuant to the agreement, CECONY provided $27 million of future benefits to customers (for which it accrued a regulatory liability) and did not recover from customers $126 million of costs for gas emergency response activities that it had previously incurred and expensed. Lawsuits are pending against CECONY seeking generally unspecified damages and, in some cases, punitive damages, for wrongful death, personal injury, property damage and business interruption. CECONY notified its insurers of the incident and believes that the policies in force at the time of the incident will cover CECONY'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, CECONY accrued its estimated liability for the suits of $40 million and an insurance receivable in the same amount, and such estimated liability and receivable did not change as of December 31, 2023.

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. In addition, Con Edison has provided guarantees to third parties on behalf of the Clean Energy Businesses, that are in the process of being transferred to the buyer of the Clean Energy Businesses, RWE Aktiengesellschaft (RWE). Maximum amounts guaranteed by Con Edison and its subsidiaries under these agreements totaled $175 million and $2,412 million at December 31, 2023 and 2022, respectively.

A summary, by type and term, of Con Edison’s total guarantees under these other agreements at December 31, 2023 is as follows:


Guarantee Type	0 – 3 years	4 – 10 years	> 10 years	Total
	(Millions of Dollars)
Con Edison Transmission	$76	$—	$—	$76
Guarantees on behalf of the Clean Energy Businesses(a)	58	—	32	90
Broken Bow II	—	—	9	9
Total	$134	$—	$41	$175

(a) On March 1, 2023, Con Edison completed the sale of all of the stock of the Clean Energy Businesses. See Note W and Note X. Guarantee amount shown represents guarantees issued on behalf of the Clean Energy Businesses that remain outstanding at December 31, 2023. Prior to and following the sale, RWE, with Con Edison's assistance, engaged in the process of transferring responsibility for these guarantees from Con Edison to RWE and that process is ongoing. Pursuant to the purchase and sale agreement, RWE is obligated to reimburse and hold harmless Con Edison for any payments Con Edison makes under guarantees issued by Con Edison on behalf of the Clean Energy Businesses. As of December 31, 2023, no such payments have been, or are probable of being, made.

Con Edison Transmission – Con Edison has guaranteed payment by Con Edison Transmission of the contributions Con Edison Transmission agreed to make to New York Transco LLC (New York Transco). Con Edison


CON EDISON ANNUAL REPORT 2023			145

Transmission owns a 45.7 percent interest in New York Transco's New York Energy Solution project, the majority of which has been completed. Guarantee amount shown includes the maximum possible required amount of Con Edison Transmission's contributions for the remainder of this project as calculated based on the assumptions that the project is completed at 175 percent of its estimated remaining costs and New York Transco does not use any debt financing for the project.

Broken Bow II — Con Edison has guaranteed obligations on behalf of Broken Bow II associated with its investment in a wind energy facility. Broken Bow II is held for sale as of December 31, 2023. See Note X.

Note I – Electricity and Gas Purchase Agreements

The Utilities have electricity purchase agreements with non-utility generators and others for generating capacity and gas purchase agreements for natural gas supply, transportation and storage. The Utilities recover their purchased power and gas 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 and gas 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 and gas purchase agreements are estimated to be as follows:


(Millions of Dollars)	2024	2025	2026	2027	2028	All Years Thereafter
Con Edison
Electricity power purchase agreements	$155	$89	$59	$44	$44	$346
Natural gas	299	10	11	7	—	—
Gas transportation and storage	521	486	460	409	301	2,682
CECONY
Electricity power purchase agreements	151	85	58	44	44	346
Natural gas	258	9	9	6	—	—
Gas transportation and storage	450	420	398	353	259	2,311

For energy delivered and gas purchased under most of the electricity and gas purchase agreements, the Utilities are obligated to pay variable prices. The company’s payments under the significant terms of the agreements for capacity, energy, gas transportation and storage, and other fixed payments in 2023, 2022 and 2021 were as follows:


	For the Years Ended December 31,
(Millions of Dollars)	2023	2022	2021
Con Edison
Astoria Generating Company (a)	$40	$45	$20
Brooklyn Navy Yard (b)	134	165	139
Gas Transportation and Storage (c)	372	386	393
Total	$546	$596	$552
CECONY
Astoria Generating Company (a)	$40	$45	$20
Brooklyn Navy Yard (b)	134	165	139
Gas Transportation and Storage (c)	327	340	347
Total	$501	$550	$506

(a) Capacity purchase agreements with terms ending in 2023 through 2025.

(b) Contract for plant output, which started in 1996 and ends in 2036.


146			CON EDISON ANNUAL REPORT 2023

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 of the Utilities are included in operating lease right-of-use asset and operating lease liabilities on the Companies’ consolidated balance sheets. Operating leases of the Clean Energy businesses are included in assets held for sale and liabilities held for sale on Con Edison's consolidated balance sheet as of December 31, 2022. On March 1, 2023, Con Edison completed the sale of all of the stock of the Clean Energy Businesses. See Note W and Note X. 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 20 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 years ended December 31, 2023, 2022, and 2021 were as follows:


	Con Edison (a)			CECONY
(Millions of Dollars)	2023	2022	2021	2023	2022	2021
Operating lease cost	$70	$88	$86	$66	$67	$66
Operating lease cash flows	$68	$83	$80	$65	$64	$63

(a)Amounts for Con Edison include amounts for the Clean Energy Businesses through February 2023. On March 1, 2023, Con Edison completed the sale of all of the stock of the Clean Energy Businesses. See Note W and Note X.

As of December 31, 2023, 2022, and 2021, assets recorded as finance leases for Con Edison were $2 million for each year and the accumulated amortization associated with such finance leases were $2 million, $5 million, and $4 million, respectively. As of December 31, 2023, 2022, and 2021, assets recorded as finance leases for CECONY were $1 million for each year and the accumulated amortization associated with such finance leases were $2 million for each year.

For the years ended December 31, 2023, 2022, and 2021, 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 $11 million for the year ended December 31, 2023 and $79 million and $68 million, respectively, for the year ended December 31, 2022 of which $10 million for Con Edison related to the Clean Energy Businesses. On March 1, 2023, Con Edison completed the sale of all of the stock of the Clean Energy Businesses. See Note W and Note X.

Other information related to leases for Con Edison and CECONY at December 31, 2023 and 2022 was as follows:


CON EDISON ANNUAL REPORT 2023			147


	Con Edison		CECONY
	2023	2022	2023	2022
Weighted Average Remaining Lease Term:
Operating leases, (a) (b)	11.4 years	12.3 years	11.4 years	12.4 years
Finance leases	6.6 years	7.2 years	2.7 years	2.3 years
Weighted Average Discount Rate:
Operating leases, (a) (b)	3.7%	3.7%	3.7%	3.7%
Finance leases	3.0%	1.9%	3.1%	1.0%

(a)Amounts for Con Edison in 2022 exclude operating leases of the Clean Energy Businesses, inclusive of Broken Bow II, that were classified as held for sale as of December 31, 2022. Including the operating leases of the Clean Energy Businesses would result in a weighted average remaining lease term of 18.3 years and a weighted average discount rate of 4.4 percent as of December 31, 2022. On March 1, 2023, Con Edison completed the sale of all of the stock of the Clean Energy Businesses. See Note W and Note X.

(b)Amounts for Con Edison in 2023 exclude the operating lease of Broken Bow II, that was classified as held for sale as of December 31, 2023. Including the operating lease of Broken Bow II would result in a weighted average remaining lease term of 11.6 years and a weighted average discount rate of 3.8 percent as of December 31, 2023. See Note W and Note X.

Future minimum lease payments under non-cancellable leases at December 31, 2023 were as follows:


(Millions of Dollars)	Con Edison		CECONY
Year Ending December 31, (b)	Operating Leases	Finance Leases	Operating Leases	Finance Leases
2024	$67	$1	$66	$1
2025	66	—	66	—
2026	66	—	66	—
2027	65	—	65	—
2028	60	—	60	—
All years thereafter	365	1	365	—
Total future minimum lease payments	$689	$2	$688	$1
Less: imputed interest	(144)	—	(143)	—
Total	$545	$2	$545	$1
Reported as of December 31, 2023
Operating lease liabilities (current) (a)	$116	$—	$116	$—
Operating lease liabilities held for sale (current)	2	—	—	—
Operating lease liabilities (noncurrent) (a)	429	—	429	—
Operating lease liabilities held for sale (noncurrent)	5	—	—	—
Other current liabilities	—	1	—	1
Other noncurrent liabilities	—	1	—	—
Total	$552	$2	$545	$1

(a)Amounts exclude operating lease liabilities of Broken Bow II ($7 million) that are classified as current and noncurrent liabilities held for sale on Con Edison's consolidated balance sheet as of December 31, 2023. See Note X.

(b)Amounts exclude operating lease future minimum lease payments of Broken Bow II, of $3 million in total for years ended December 31, 2024 through 2028, and $10 million for all years thereafter, and imputed interest of $6 million.

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 years ended December 31, 2023 and 2022.


148			CON EDISON ANNUAL REPORT 2023

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 and the acquisition of a portion of Honeoye. Further, included within Con Edison's assets held for sale as of December 31, 2022 is goodwill related to the acquisitions of a residential solar company and a battery storage company by the Clean Energy Businesses. On March 1, 2023, Con Edison completed the sale of all of the stock of the Clean Energy Businesses. See Note W and Note X.

In 2023 and 2022, Con Edison completed quantitative and qualitative impairment tests, respectively, 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, 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 Con Edison Transmission and $2 million of which was attributed to CECONY. The remaining goodwill attributable to Honeoye was not material at December 31, 2023 or 2022. No other impairments or triggering events were identified for Con Edison's goodwill for the years ending December 31, 2023, 2022 or 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.

Note L – Income Tax

The components of income tax are as follows:


	Con Edison			CECONY
(Millions of Dollars)	2023	2022	2021	2023	2022	2021
State
Current	$179	$5	$14	$(102)	$—	$1
Deferred	6	324	79	246	110	106
Federal
Current	176	58	43	(95)	170	121
Deferred	237	117	61	311	(23)	21
Amortization of investment tax credits	(111)	(6)	(7)	(2)	(2)	(3)
Total income tax expense	$487	$498	$190	$358	$255	$246


CON EDISON ANNUAL REPORT 2023			149

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:


	Con Edison						CECONY
(% of Pre-tax income)	2023		2022		2021		2023		2022		2021
STATUTORY TAX RATE
Federal	21	%	21	%	21	%	21	%	21	%	21	%
Changes in computed taxes resulting from:
State income taxes, net of federal income taxes	5		6		4		5		5		5
Taxes attributable to noncontrolling interests	—		1		3		—		—		—
Cost of removal	1		1		2		2		1		1
Other plant-related items	—		—		(1)		(1)		(1)		(1)


Amortization of excess deferred federal income taxes	(6)		(9)		(12)		(8)		(10)		(11)
Renewable energy credits	—		(2)		(2)		—		—		—
Research and development credits	—		—		(1)		—		—		—
Other	—		—		—		(1)		—		—
Impacts from the sale of the Clean Energy Businesses:
Changes in state apportionments, net of federal income taxes	(1)		6		—		—		—		—
Deferred unamortized ITC recognized on sale of subsidiary	(4)		—		—		—		—		—
Effective tax rate	16	%	24	%	14	%	18	%	16	%	15	%

Con Edison’s effective tax rate decreased 8 percent in 2023 primarily due to tax benefits from the recognition of deferred unamortized investment tax credits and the absence of the remeasurement of state deferred income taxes on the announced sale of the Clean Energy Businesses recognized in 2022, offset in part by higher income before income tax expense in 2023 due to the gain on the sale of the Clean Energy Businesses and lower renewable energy tax credits due to the sale.


150			CON EDISON ANNUAL REPORT 2023

On March 1, 2023, Con Edison completed the sale of all of the stock of the Clean Energy Businesses, which was accounted for as a stock sale for GAAP purposes and a deemed sale of assets and liquidation for tax purposes. Con Edison's pre-tax gain on the sale of the Clean Energy Businesses was $865 million ($767 million, net of tax) for the year ended December 31, 2023. The sale included all assets, operations and projects of the Clean Energy Businesses with the exception of tax equity interests and a deferred project, that were treated as distributions to Con Edison. See Note W and Note X.

The tax effects of temporary differences, which gave rise to deferred tax assets and liabilities, are as follows:


	Con Edison		CECONY
(Millions of Dollars)	2023	2022	2023	2022
Deferred tax liabilities:
Property basis differences	$8,542	$8,770	$8,001	$7,475
Regulatory Assets:

System peak reduction and energy efficiency programs	297	220	291	219
Environmental remediation costs	310	278	287	254
Other regulatory assets	632	561	577	501
Unrecognized pension and other postretirement costs	—	22	—	22
Pensions and retiree benefits – asset	918	917	894	894
Operating lease right-of-use asset	154	230	153	163
Equity investments	—	26	—	—


Total deferred tax liabilities	$10,853	$11,024	$10,203	$9,528
Deferred tax assets:
Regulatory liabilities:
Unrecognized pension and other postretirement costs	265	447	244	431
Future income tax	427	489	394	454
Other regulatory liabilities	844	860	744	739
Tax credits carryforward	270	767	—	—
Loss carryforwards	7	117	—	24
Valuation allowance	(7)	(18)	—	—
Superfund and other environmental costs	314	280	288	254
Operating lease liabilities	154	233	153	162
Pensions and retiree benefits – liability	167	162	153	148
Asset retirement obligations	146	153	146	140
Equity investments	98	—	—	—
Other	125	14	108	45
Total deferred tax assets	2,810	3,504	2,230	2,397
Net deferred tax liabilities	$8,043	$7,520	$7,973	$7,131
Unamortized investment tax credits	26	121	11	13
Net deferred tax liabilities and unamortized investment tax credits	$8,069	$7,641	$7,984	$7,144

At December 31, 2023, Con Edison has $270 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 2038. 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, 2023, Con Edison has a deferred tax asset on its New York City net operating loss carryforward of $8 million that will begin to expire, if unused, in 2035. Con Edison recorded a full valuation allowance against this deferred tax asset as it is not more likely than not that the deferred tax assets will be realized.

At December 31, 2022, the Clean Energy Businesses had a deferred tax asset on non New York net operating losses of $43 million, with a valuation allowance of $9 million against the deferred tax assets. During the year ended December 31, 2023, $26 million of deferred tax assets on state net operating losses were utilized as a result of the sale of the Clean Energy Businesses with $17 million of deferred taxes remaining which are not expected to be utilized. Con Edison has written off the $17 million and the related $9 million valuation allowance as these deferred tax assets will not be realized due to the sale of the Clean Energy Businesses.


CON EDISON ANNUAL REPORT 2023			151

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

In May 2023, New York State passed a law that extended the increase in the corporate franchise tax rate from 6.5 percent to 7.25 percent for another three-year period, through tax year 2026, for taxpayers with taxable income greater than $5 million. The law also temporarily extended the business capital tax through tax year 2026, not to exceed an annual maximum tax liability of $5 million per taxpayer, with a corporation paying the higher of its franchise or income tax liability during the same period. New York State also passed a law establishing a permanent rate of 30 percent for the metropolitan transportation business tax surcharge. As a result of the sale of the Clean Energy Businesses in 2023, Con Edison has New York State taxable income in excess of $5 million after using its entire New York State Net Operating Loss carryforward, and therefore, the group is subject to the higher 7.25 percent rate (9.425 percent with the surcharge rate) on its taxable income for tax year 2023. As a result of this legislation, CECONY remeasured its deferred tax assets and liabilities that would reverse before 2027 and recorded state deferred income tax expense (net of federal benefit) and an increase in accumulated deferred tax liabilities of $10 million for the year ended December 31, 2023.

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			CECONY
(Millions of Dollars)	2023	2022	2021	2023	2022	2021
Balance at January 1,	$23	$17	$14	$8	$5	$3
Additions based on tax positions related to the current year	8	3	3	4	2	2
Additions based on tax positions of prior years	3	6	2	1	1	1
Reductions for tax positions of prior years	(11)	(1)	(2)	(6)	—	(1)
Settlements	(12)	(2)	—	—	—	—
Balance at December 31,	$11	$23	$17	$7	$8	$5

At December 31, 2023, the estimated uncertain tax positions for Con Edison was $11 million ($7 million for CECONY). For the year ended December 31, 2023, Con Edison recognized $8 million ($4 million for CECONY) of income tax expense related to current year positions, and recognized a tax benefit of $8 million ($5 million for CECONY) related to positions in prior years. In 2023, Con Edison settled with the IRS on the research and development credits related to the Clean Energy Businesses for the 2020-2021 tax years resulting in a reduction in the liability for general business credit carryovers of $12 million, for which an uncertain tax position had previously been recorded. In addition, CECONY reversed $6 million in uncertain tax positions related to the same tax years that reduced its effective tax rate. Con Edison and CECONY reasonably expect to resolve within the next twelve months approximately $3 million of various federal uncertainties due to the expected completion of ongoing tax examinations, of which the entire amount, if recognized, would reduce their effective tax rate. The total amount of unrecognized tax benefits, if recognized, that would reduce Con Edison’s effective tax rate is $11 million ($10 million, net of federal taxes) with $7 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. In 2023, 2022 and 2021, the Companies recognized an immaterial amount of interest expense and no penalties for uncertain tax


152			CON EDISON ANNUAL REPORT 2023

positions in their consolidated income statements. At December 31, 2023 and December 31, 2022, the Companies recognized an immaterial amount of accrued interest on their consolidated balance sheets.

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

Con Edison’s federal tax return for 2022 remains under examination. State and local tax returns remain open for examination in New York State for tax years 2015 through 2022, in New Jersey for tax years 2019 through 2022 and in New York City for tax years 2019 through 2022.

Note M – Revenue Recognition

The following table presents, for the years ended December 31, 2023, 2022 and 2021, 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.


	2023			2022			2021
(Millions of Dollars)	Revenues from contracts with customers	Other revenues (a)	Total operating revenues	Revenues from contracts with customers	Other revenues (a)	Total operating revenues	Revenues from contracts with customers	Other revenues (a)	Total operating revenues
CECONY
Electric	$9,946	$132	$10,078	$9,917	$(166)	$9,751	$8,736	$70	$8,806
Gas	2,867	(38)	2,829	2,875	49	2,924	2,324	54	2,378
Steam	551	18	569	584	9	593	519	13	532
Total CECONY	$13,364	$112	$13,476	$13,376	$(108)	$13,268	$11,579	$137	$11,716
O&R
Electric	740	19	759	771	2	773	691	(10)	681
Gas	286	11	297	306	6	312	265	(5)	260
Total O&R	$1,026	$30	$1,056	$1,077	$8	$1,085	$956	$(15)	$941
Clean Energy Businesses (c)
Renewables	68	—	68	637	—	637	638	—	638
Energy services	7	—	7	317	—	317	234	—	234
Develop/Transfer Projects	7	—	7	44	—	44	45	—	45
Other	—	47	47	—	321	321	—	105	105
Total Clean Energy Businesses	$82	$47	$129	$998	$321	$1,319	$917	$105	$1,022
Con Edison Transmission	4	—	4	4	—	4	4	—	4
Other (b)	—	(2)	(2)	—	(6)	(6)	—	(7)	(7)
Total Con Edison	$14,476	$187	$14,663	$15,455	$215	$15,670	$13,456	$220	$13,676

(a) For the Utilities, this includes primarily revenue or negative revenue adjustments from alternative revenue programs, such as the revenue decoupling mechanisms under their NY electric and gas rate plans (see "Rate Plans" in Note B) and for 2021 recognition of late payment charges and fees that were not billed (LPCs) for the year ended December 31, 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 included revenue from wholesale services. For the Clean Energy Businesses, this includes revenue from wholesale services. On March 1, 2023, Con Edison completed the sale of all of the stock of the Clean Energy Businesses. See Note W and Note X.

(b) Other includes the parent company, Con Edison's tax equity investments, the deferred project held for sale and consolidated adjustments. See Note X.

(c) On March 1, 2023, Con Edison completed the sale of all of the stock of the Clean Energy Businesses. See Note W and Note X.

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.


CON EDISON ANNUAL REPORT 2023			153

The Utilities have the obligation to deliver electricity, gas and steam energy to their customers. As the energy is immediately available for use upon delivery to the customer, the energy and its delivery are identifiable as a single performance obligation. The Utilities recognize revenues as this performance obligation is satisfied over time as the Utilities deliver, and the customers simultaneously receive and consume, the energy. The amount of revenues recognized reflects the consideration the Utilities expect to receive in exchange for delivering the energy. Under their tariffs, the transaction price for full-service customers includes the Utilities’ energy cost and for all customers includes delivery charges determined based on customer class and in accordance with established tariffs and guidelines of the NYSPSC or the NJBPU, as applicable. Accordingly, there is no unsatisfied performance obligation associated with these customers. The transaction price is applied to the Utilities’ revenue generating activities through the customer billing process. Because energy is delivered over time, the Utilities use output methods that recognize revenue based on direct measurement of the value transferred, such as units delivered, which provides an accurate measure of value for the energy delivered. The Utilities accrue revenues at the end of each month for estimated energy delivered but not yet billed to customers. The Utilities defer over a 12-month period net interruptible gas revenues, other than those authorized by the NYSPSC to be retained by the Utilities, for refund to firm gas sales and transportation customers.

The Clean Energy Businesses recognized revenue for the sale of energy from renewable electric projects as energy was generated and billed to counterparties; accrued revenues at the end of each month for energy generated but not yet billed to counterparties; and recognized revenue as energy was delivered and services were 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 recognized revenue for providing energy-efficiency services to government and commercial customers, and recognized revenue for engineering, procurement and construction services, under the percentage-of-completion method of revenue recognition. On March 1, 2023, Con Edison completed the sale of all of the stock of the Clean Energy Businesses. See Note W and Note X.

Use of the Percentage-of-Completion Method

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


	2023				2022			2021
(Millions of Dollars)	Unbilled contract revenue (a)		Unearned revenue (b)		Unbilled contract revenue (a)	Unearned revenue (b)		Unbilled contract revenue (a)	Unearned revenue (b)
Beginning balance as of January 1,	$80		$3		$35	$7		$11	$41
Additions (c)	2		—		324	—		242	—
Subtractions (c)	78		3	(d)	279	4	(d)	218	34	(d)
Ending balance as of December 31,	$4	(e)	$—		$80	$3		$35	$7

(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, $3 million, $4 million and $34 million were included in the balances as of January 1, 2023, 2022, and 2021, respectively.

(e)Following the sale of the Clean Energy Businesses, Con Edison received substantially all contract revenue, net of certain costs incurred, for a battery storage project located in Imperial County, California. See Note W.


154			CON EDISON ANNUAL REPORT 2023

Note N – Current Expected Credit Losses

Allowance for Uncollectible Accounts

The Utilities’ “Account receivable – customers” balance consists of utility bills due (bills are generally due the month following billing) from customers who have energy delivered, generated, or services provided by the Utilities. The balance also reflects the Utilities’ purchase of receivables from energy service companies to support the retail choice programs.

“Other receivables” balance generally reflects costs billed by the Utilities for goods and services provided to external parties, such as accommodation work for private parties and certain governmental entities, real estate rental and pole attachments.

On March 1, 2023, Con Edison completed the sale of all of the stock of the Clean Energy Businesses. See Note W and Note X. The Clean Energy Businesses’ customer accounts receivable balance generally reflected 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 calculated 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, 2022. The Clean Energy Businesses were classified as held for sale as of December 31, 2022.

The Companies develop expected loss estimates using past events data and consider current conditions and future reasonable and supportable forecasts. Changes to the Utilities’ reserve balances that result in write-offs of customer accounts receivable balances above existing rate allowances are not reflected in rates during the term of the current rate plans. For the Utilities’ customer accounts receivable allowance for uncollectible accounts, past events considered include write-offs relative to customer accounts receivable; current conditions include macro-and micro-economic conditions related to trends in the local economy, bankruptcy rates and aged customer accounts receivable balances, among other factors; and forecasts about the future include assumptions related to the level of write-offs and recoveries. Generally, the Utilities write off customer accounts receivable as uncollectible 90 days after the account is turned off for non-payment, or the account is closed during the collection process. See "COVID-19 Regulatory Matters" in Note B.

Other receivables allowance for uncollectible accounts is calculated based on a historical average of collections relative to total other receivables, including current receivables. Current macro- and micro-economic conditions are also considered when calculating the current reserve. Probable outcomes of pending litigation, whether favorable or unfavorable to the Companies, are also included in the consideration.

Starting in 2020, the potential economic impact of the COVID-19 pandemic was also considered in forward-looking projections related to write-off and recovery rates and resulted in increases to the allowance for uncollectible accounts. The increases to the allowance for customer uncollectible accounts for Con Edison and CECONY were $38 million and $39 million, respectively, for the year ended December 31, 2023. The increases to the allowance for uncollectible accounts for Con Edison and CECONY were $5 million and $10 million for the year ended December 31, 2022.

Customer accounts receivable and the associated allowance for uncollectible accounts are included in the line “Accounts receivable – customers” on the Companies’ consolidated balance sheets. Other receivables and the associated allowance for uncollectible accounts are included in “Other receivables” on the consolidated balance sheets.

The table below presents a rollforward by major portfolio segment type for the years ended December 31, 2023, 2022 and 2021:


CON EDISON ANNUAL REPORT 2023			155


	For the Year Ended December 31,
	Con Edison						CECONY
	Accounts receivable - customers			Other receivables			Accounts receivable - customers			Other receivables
(Millions of Dollars)	2023	2022	2021	2023	2022	2021	2023	2022	2021	2023	2022	2021
Allowance for credit losses
Beginning Balance at January 1,	$322	$317	$148	$10	$22	$7	$314	$304	$138	$7	$19	$4
Recoveries	14	17	14	—	—	1	12	16	12	—	—	1
Write-offs	(138)	(103)	(91)	(5)	(6)	(2)	(131)	(94)	(86)	(3)	(4)	(1)
Reserve adjustments	162	91	246	8	(6)	16	158	88	240	5	(8)	15
Ending Balance December 31,	$360	$322	$317	$13	$10	$22	$353	$314	$304	$9	$7	$19

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. Long Term Incentive Plans that were approved by Con Edison’s shareholders in 2003 (2003 LTIP), 2013 (2013 LTIP), and 2023 (2023 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 and the 2013 LTIP continue in effect, however no new awards may be issued under either plan. The 2023 LTIP provides for awards for up to ten million shares of common stock.

During the years ended December 31, 2023, 2022, and 2021, 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, 2023 were new shares. The Companies intend to use new shares to fulfill their stock-based compensation obligations for 2024.

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, 2023, 2022 and 2021:


	Con Edison			CECONY
(Millions of Dollars)	2023	2022	2021	2023	2022	2021
Performance-based restricted stock	$41	$52	$23	$36	$43	$19
Time-based restricted stock	2	2	2	2	2	2
Non-employee director deferred stock compensation	3	3	3	3	3	3
Stock purchase plan	7	7	7	7	6	7
Total	$53	$64	$35	$48	$54	$31
Income tax benefit	$15	$18	$10	$13	$15	$9

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 officers and 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


156			CON EDISON ANNUAL REPORT 2023

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:


	2023	2022	2021
Risk-free interest rate (a)	4.06% - 4.64%	4.41% - 4.73%	0.39% -0.73%
Expected term (b)	3 years	3 years	3 years
Expected share price volatility (c)	17.88% - 19.92%	19.65% - 21.77%	17.25% - 31.42%

(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, 2023 is as follows:


	Con Edison			CECONY
		Weighted Average Grant Date Fair Value (a)			Weighted Average Grant Date Fair Value (a)
	Units	TSR Portion (b)	Non-TSR Portion (c)	Units	TSR Portion (b)	Non-TSR Portion (c)
Non-vested at December 31, 2022	865,091	$80.02	$80.04	647,826	$79.89	$80.16
Granted	266,200	91.93	90.93	204,466	92.27	91.34
Vested	(264,568)	79.69	89.62	(205,078)	79.40	88.75
Forfeited	(28,420)	86.23	82.22	(8,741)	85.24	81.02

Non-vested at December 31, 2023	838,303	$83.70	$80.40	638,473	$83.94	$80.97

(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, 2023 is $38 million, including $34 million for CECONY, and is expected to be recognized over a weighted average period of one year for both Con Edison and CECONY. Con Edison and CECONY paid cash of $21 million and $19 million in 2023, $10 million and $9 million in 2022, and $8 million and $7 million in 2021, respectively, to settle vested Performance RSUs.

In accordance with the accounting rules for stock compensation, for time-based awards, the Companies accrue a liability and recognize 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 officer or 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, 2023 is as follows:


CON EDISON ANNUAL REPORT 2023			157


	Con Edison		CECONY
	Units	Weighted Average Grant Date Fair Value	Units	Weighted Average Grant Date Fair Value
Non-vested at December 31, 2022	180,588	$84.69	147,415	$85.10
Granted	198,600	92.93	166,539	93.38
Vested	(19,950)	78.00	(18,550)	78.00
Forfeited	(14,037)	87.26	(6,341)	88.47
Non-vested at December 31, 2023	345,201	$89.71	289,063	$90.25

The total expense to be recognized by Con Edison in future periods for unvested time-based awards outstanding at December 31, 2023 is $12 million, including $12 million for CECONY, and is expected to be recognized over a weighted average period of two years. Con Edison and CECONY paid cash of $2 million in 2023 and 2022, and $1 million in 2021, 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, 2023, approximately 29,000 units were issued at a weighted average grant date price of $94.78.

Stock Purchase Plan

The Stock Purchase Plans, which were approved by shareholders in 2004 and 2014 (collectively, the Plan), provide 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 2023, 2022 and 2021, 751,702, 744,932 and 957,866 shares were purchased under the Plan at a weighted average price of $91.80, $91.59 and $73.38 per share, respectively.

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 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.


158			CON EDISON ANNUAL REPORT 2023

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, 2023 (Millions of Dollars)	Operating revenues	Inter- segment revenues	Depreciation and amortization	Operating income	Other Income (deductions)	Interest charges	Income Tax Expense	Total assets	Capital expenditures
CECONY
Electric	$10,078	$18	$1,395	$1,568	$564	$674	$217	$42,226	$2,909
Gas	2,829	8	429	682	122	227	159	16,343	1,046
Steam	569	74	100	(73)	46	44	(18)	3,031	128
Consolidation adjustments	—	(100)	—	—	—	—	—	—	—
Total CECONY	$13,476	$—	$1,924	$2,177	$732	$945	$358	$61,600	$4,083
O&R
Electric	$759	$—	$76	$85	$37	$32	$20	$2,329	$211
Gas	297	—	30	41	12	19	8	1,346	85

Total O&R	$1,056	$—	$106	$126	$49	$51	$28	$3,675	$296
Clean Energy Businesses (a)	$129	$—	$—	$37	$1	$16	$3	$—	$81
Con Edison Transmission	4	—	1	(9)	62	2	14	414	49
Other (b)	(2)	—	—	865	(14)	9	84	642	—
Total Con Edison	$14,663	$—	$2,031	$3,196	$830	$1,023	$487	$66,331	$4,509


As of and for the Year Ended December 31, 2022 (Millions of Dollars)	Operating revenues	Inter- segment revenues	Depreciation and amortization	Operating income	Other Income (deductions)	Interest charges	Income Tax Expense	Total assets	Capital expenditures
CECONY
Electric	$9,751	$19	$1,315	$1,496	$259	$582	$134	$39,153	$2,522
Gas	2,924	8	367	660	52	198	140	15,361	1,128
Steam	593	76	96	(21)	21	42	(19)	2,931	108
Consolidation adjustments	—	(103)	—	—	—	—	—	—	—
Total CECONY	$13,268	$—	$1,778	$2,135	$332	$822	$255	$57,445	$3,758
O&R
Electric	$773	$—	$71	$94	$17	$29	$17	$2,247	$167
Gas	312	—	27	42	6	17	8	1,264	76

Total O&R	$1,085	$—	$98	$136	$23	$46	$25	$3,511	$243
Clean Energy Businesses (a)	$1,319	$—	$178	$368	$3	$(35)	$84	$7,224	$399
Con Edison Transmission	4	—	1	(10)	19	5	5	314	65
Other (b)	(6)	—	1	(5)	(51)	14	129	571	—
Total Con Edison	$15,670	$—	$2,056	$2,624	$326	$852	$498	$69,065	$4,465


CON EDISON ANNUAL REPORT 2023			159


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 Tax Expense	Total assets	Capital expenditures
CECONY
Electric	$8,806	$18	$1,286	$1,802	$(84)	$542	$146	$36,260	$2,189
Gas	2,378	8	326	646	(16)	179	109	13,748	1,126
Steam	532	74	93	12	(8)	41	(9)	2,647	103
Consolidation adjustments	—	(100)	—	—	—	—	—	—	—
Total CECONY	$11,716	$—	$1,705	$2,460	$(108)	$762	$246	$52,655	$3,418
O&R
Electric	$681	$—	$69	$100	$(8)	$27	$14	$2,123	$147
Gas	260	—	26	50	(4)	15	7	1,169	70

Total O&R	$941	$—	$95	$150	$(12)	$42	$21	$3,292	$217
Clean Energy Businesses (a)	$1,022	$—	$231	$236	$(10)	$68	$44	$6,554	$298
Con Edison Transmission	4	—	1	(16)	(407)	9	(114)	249	31
Other (b)	(7)	—	—	(4)	(1)	24	(7)	366	—
Total Con Edison	$13,676	$—	$2,032	$2,826	$(538)	$905	$190	$63,116	$3,964

(a)The Clean Energy Businesses were classified as held for sale as of December 31, 2022. On March 1, 2023, Con Edison completed the sale of all of the stock of the Clean Energy Businesses. As a result of this sale, the Clean Energy Businesses are no longer a principal segment. See Note W and Note X.

(b)Other includes the parent company, Con Edison’s tax equity investments, the deferred project held for sale and consolidation adjustments.

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 do not elect hedge accounting. The Companies use economic hedges to manage commodity price risk in accordance with provisions set by state regulators. The volume of hedging activity at the Utilities depends upon the forecasted volume of physical commodity supply to meet customer needs, and program costs or benefits are recovered from or credited to full-service customers, respectively. Derivatives are recognized on the consolidated balance sheet at fair value (see Note 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. On March 1, 2023, Con Edison completed the sale of all of the stock of the Clean Energy Businesses. See Note W and Note X.


160			CON EDISON ANNUAL REPORT 2023

The fair values of the Companies’ derivatives, including the offsetting of assets and liabilities, on the consolidated balance sheet at December 31, 2023 and 2022 were:


(Millions of Dollars)	2023				2022
Balance Sheet Location	Gross Amounts of Recognized Assets/ (Liabilities)	Gross Amounts Offset	Net Amounts of Assets/(Liabilities) (a)		Gross Amounts of Recognized Assets/ (Liabilities)	Gross Amounts Offset	Net Amounts of Assets/(Liabilities) (a)
Con Edison
Fair value of derivative assets
Current	$83	$(38)	$45	(b)	$378	$(332)	$46	(b)
Noncurrent	77	(29)	48		193	(108)	85
Total fair value of derivative assets held and used	$160	$(67)	$93		$571	$(440)	$131
Current - assets held for sale (d)	—	—	—		93	(8)	85	(c)
Noncurrent - assets held for sale (d)	—	—	—		83	11	94	(c)
Total fair value of derivative assets	$160	$(67)	$93		$747	$(437)	$310
Fair value of derivative liabilities
Current	$(230)	$52	$(178)	(b)	$(198)	$166	$(32)	(b)
Noncurrent	(154)	33	(121)		(49)	36	(13)
Total fair value of derivative liabilities held and used	$(384)	$85	$(299)		$(247)	$202	$(45)
Current - liabilities held for sale (d)	—	—	—		(31)	6	(25)
Noncurrent - liabilities held for sale (d)	—	—	—		(3)	(8)	(11)
Total fair value of derivative liabilities	$(384)	$85	$(299)		$(281)	$200	$(81)
Net fair value derivative assets/(liabilities)	$(224)	$18	$(206)		$466	$(237)	$229
CECONY
Fair value of derivative assets
Current	$78	$(35)	$43	(b)	$350	$(312)	$38	(b)
Noncurrent	76	(27)	49		176	(96)	80
Total fair value of derivative assets	$154	$(62)	$92		$526	$(408)	$118
Fair value of derivative liabilities
Current	$(217)	$48	$(169)	(b)	$(189)	$160	$(29)
Noncurrent	(139)	31	(108)		(43)	34	(9)
Total fair value of derivative liabilities	$(356)	$79	$(277)		$(232)	$194	$(38)
Net fair value derivative assets/(liabilities)	$(202)	$17	$(185)		$294	$(214)	$80

(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, 2023, margin deposits for Con Edison and CECONY of $7 million and $6 million, respectively were classified as derivative assets and $(15) million and $(10) million, respectively were classified as derivative liabilities on the consolidated balance sheet, but not included in the table. At December 31, 2022, margin deposits for Con Edison and CECONY of $13 million were classified as derivative assets, and $(10) million and $(6) million, respectively were classified as derivative liabilities on the consolidated balance sheet, but not included in the table. Margin is collateral, typically cash, that the holder of a derivative instrument is required to deposit in order to transact on an exchange and to cover its potential losses with its broker or the exchange.

(c)Includes amounts for interest rate swaps of $31 million in current assets and $75 million in noncurrent assets. At December 31, 2022, the Clean Energy Businesses had interest rate swaps with notional amounts of $982 million. The expiration dates of the swaps ranged from 2025-2041.

(d)Amounts represent derivative assets and liabilities included in current assets and current liabilities held for sale, respectively, on Con Edison's consolidated balance sheet as of December 31, 2022. On March 1, 2023, Con Edison completed the sale of all of the stock of the Clean Energy Businesses. See Note W and Note X.

The Utilities generally recover their prudently incurred fuel, purchased power and gas costs, including hedging gains and losses, in accordance with rate provisions approved by the applicable state utility regulators. In accordance with the accounting rules for regulated operations, the Utilities record a regulatory asset or regulatory liability to defer recognition of unrealized gains and losses on their electric and gas derivatives. As gains and losses are realized in future periods, they will be recognized as purchased power, gas and fuel costs in the Companies’ consolidated income statements.


CON EDISON ANNUAL REPORT 2023			161

The Clean Energy Businesses recorded 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 occurred. The Clean Energy Businesses recorded changes in the fair value of their interest rate swaps in other interest expense at the end of each reporting period. Management believes that these derivative instruments represent economic hedges that mitigate exposure to fluctuations in commodity prices and interest rates. On March 1, 2023, Con Edison completed the sale of all of the stock of the Clean Energy Businesses. See Note W and Note X.

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, 2023 and 2022:


		Con Edison		CECONY
(Millions of Dollars)	Balance Sheet Location	2023	2022	2023	2022
Pre-tax gains/(losses) deferred in accordance with accounting rules for regulated operations:
Current	Regulatory liabilities	$(236)	$168	$(216)	$155
Noncurrent	Regulatory liabilities	(96)	83	(81)	75
Total deferred gains/(losses)		$(332)	$251	$(297)	$230
Current	Regulatory assets	$(85)	$(43)	$(76)	$(44)
Current	Recoverable energy costs	(563)	408	(533)	372
Noncurrent	Regulatory assets	(132)	19	(122)	19
Total deferred or recognized gains/(losses)		$(780)	$384	$(731)	$347
Net deferred or recognized gains/(losses) (a)		$(1,112)	$635	$(1,028)	$577
	Income Statement Location
Pre-tax gain/(loss) recognized in income
	Gas purchased for resale	$4	$5	$—	$—
	Non-utility revenue	17	—	—	—
	Other operations and maintenance expense	—	4	—	4
	Other interest expense (b)	5	159	—	—
Total pre-tax gain/(loss) recognized in income		$26	$168	$—	$4

(a) Unrealized net deferred gains on electric and gas derivatives for the Utilities decreased as a result of lower electric and gas commodity prices during the year ended December 31, 2023. Upon settlement, short-term deferred derivative losses generally increase the recoverable costs of electric and gas purchases.

(b) Comprised of amounts related to interest rate swaps of the Clean Energy Businesses. On March 1, 2023, Con Edison completed the sale of all of the stock of the Clean Energy Businesses. See Note W and Note X.

The following table presents the hedged volume of Con Edison’s and CECONY’s commodity derivative transactions at December 31, 2023:


	Electric Energy (MWh) (a)(b)	Capacity (MW) (a)	Natural Gas (Dt) (a)(b)	Refined Fuels (gallons)
Con Edison	34,892,535	44,400	325,690,000	3,780,000
CECONY	32,315,225	34,500	306,700,000	3,780,000

(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. 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.


162			CON EDISON ANNUAL REPORT 2023

At December 31, 2023, Con Edison and CECONY had $92 million and $90 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 $83 million with non-investment grade/non-rated counterparties, $2 million with investment-grade counterparties, and $7 million with commodity exchange brokers. CECONY’s net credit exposure consisted of $83 million with non-investment grade/non-rated counterparties, $1 million with investment-grade counterparties, and $6 million with commodity exchange brokers.

The collateral requirements associated with, and settlement of, derivative transactions are included in net cash flows from operating activities in the Companies’ consolidated statement of cash flows. Most derivative instrument contracts contain provisions that may require a party to provide collateral on its derivative instruments that are in a net liability position. The amount of collateral to be provided will depend on the fair value of the derivative instruments and the party’s credit ratings.

The following table presents the aggregate fair value of the Companies’ derivative instruments with credit-risk-related contingent features that are in a net liability position, the collateral posted for such positions and the additional collateral that would have been required to be posted had the lowest applicable credit rating been reduced one level and to below investment grade at December 31, 2023:


(Millions of Dollars)	Con Edison (a)	CECONY (a)
Aggregate fair value – net liabilities	$302	$280
Collateral posted	280	280
Additional collateral (b) (downgrade one level from current ratings)	41	24
Additional collateral (b)(c) (downgrade to below investment grade from current ratings)	147	117

(a)Non-derivative transactions for the purchase and sale of electricity and gas and qualifying derivative instruments, that have been designated as normal purchases or normal sales, are excluded from the table. These transactions primarily include purchases of electricity from independent system operators. In the event the Utilities are no longer extended unsecured credit for such purchases, the Companies would be required to post additional collateral of $3 million at December 31, 2023. 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, 2023, if Con Edison had been downgraded to below investment grade, it would have been required to post additional collateral for such derivative instruments of $16 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, that 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, that 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


CON EDISON ANNUAL REPORT 2023			163

contracts traded on active exchange markets valued using unadjusted prices quoted directly from the exchange.

Level 2 – Consists of assets or liabilities valued using industry standard models and based on prices, other than quoted prices within Level 1, that are either directly or indirectly observable as of the measurement date. The industry standard models consider observable assumptions including time value, volatility factors and current market and contractual prices for the underlying commodities, in addition to other economic measures. This category includes contracts traded on active exchanges or in over-the-counter markets priced with industry standard models.
Level 3 – Consists of assets or liabilities whose fair value is estimated based on internally developed models or methodologies using inputs that are generally less readily observable and supported by little, if any, market activity at the measurement date. Unobservable inputs are developed based on the best available information and subject to cost benefit constraints. This category includes contracts priced using models that are internally developed and contracts placed in illiquid markets. It also includes contracts that expire after the period of time for which quoted prices are available and internal models are used to determine a significant portion of the value.

For information on the measurement of Con Edison's investment in MVP, which was measured at fair value on a non-recurring basis, see Note A. Assets and liabilities measured at fair value on a recurring basis for the years ended December 31, 2023 and 2022 are summarized below.


	2023					2022
(Millions of Dollars)	Level 1	Level 2	Level 3	Netting Adjustment (e)	Total	Level 1	Level 2	Level 3	Netting Adjustment (e)	Total
Con Edison
Derivative assets:
Commodity (a)(b)(c)	$6	$146	$2	$(54)	$100	$84	$476	$2	$(420)	$142
Commodity held for sale (g)	—	—	—	—	—	6	34	31	2	73
Interest rate swaps (a)(b)(c)(f) (g)	—	—	—	—	—	—	106	—	—	106
Other (a)(b)(d)	505	118	—	—	623	437	116	—	—	553
Total assets	$511	$264	$2	$(54)	$723	$527	$732	$33	$(418)	$874
Derivative liabilities:
Commodity (a)(b)(c)	$22	$347	$10	$(65)	$314	$18	$204	$16	$(184)	$54
Commodity held for sale (g)	—	—	—	—	—	8	24	2	2	36

Total liabilities	$22	$347	$10	$(65)	$314	$26	$228	$18	$(182)	$90
CECONY
Derivative assets:
Commodity (a)(b)(c)	$6	$143	$1	$(52)	$98	$83	$434	$2	$(388)	$131
Other (a)(b)(d)	488	113	—	—	601	422	110	—	—	532
Total assets	$494	$256	$1	$(52)	$699	$505	$544	$2	$(388)	$663
Derivative liabilities:
Commodity (a)(b)(c)	$20	$326	$6	$(65)	$287	$18	$198	$8	$(180)	$44

(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 $9 million and $6 million of derivative liabilities, respectively, transferred from level 3 to level 2 during the year ended December 31, 2023 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, 2023 to less than three years as of December 31, 2023. Con Edison and CECONY had an immaterial amount of commodity derivative liabilities and $10 million and $9 million of commodity derivative assets, respectively, transferred from level 3 to level 2 during the year ended December 31, 2022 because of availability of observable market data due to the decrease in the terms of certain contracts from beyond three years as of September 30, 2022 to less than three years as of December 31, 2022.

(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, 2023 and 2022, the Companies determined that nonperformance risk would have no material impact on their financial position or results of operations.


164			CON EDISON ANNUAL REPORT 2023

(d)Other assets: Level 1 assets are comprised primarily of mutual/commingled funds, and Level 2 assets are comprised primarily of the cash value of life insurance contracts.

(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.

(g)On March 1, 2023, Con Edison completed the sale of all of the stock of the Clean Energy Businesses. See Note W and Note X.

The employees in the Companies’ risk management group develop and maintain the Companies’ valuation policies and procedures for, and verify pricing and fair value valuation of, commodity derivatives. Under the Companies’ policies and procedures, multiple independent sources of information are obtained for forward price curves used to value commodity derivatives. Fair value and changes in fair value of commodity derivatives are reported monthly to the Companies’ risk committees, comprised of officers and employees of the Companies that oversee energy hedging at the Utilities. The risk management group reports to the Companies’ Vice President and Treasurer.


	Fair Value of Level 3 at December 31, 2023
	(Millions of Dollars)	Valuation Techniques	Unobservable Inputs	Range
Con Edison — Commodity
Electricity	$(8)	Discounted Cash Flow	Forward capacity prices (a)	$1.90 - $11.75 per kW-month
Transmission Congestion Contracts	immaterial	Discounted Cash Flow	Inter-zonal forward price curves adjusted for historical zonal losses (b)	$(0.33) - $2.20 per MWh
Total Con Edison - Commodity	$(8)
CECONY — Commodity
Electricity	$(5)	Discounted Cash Flow	Forward capacity prices (a)	$1.90 - $11.75 per kW-month
Transmission Congestion Contracts	immaterial	Discounted Cash Flow	Inter-zonal forward price curves adjusted for historical zonal losses (b)	$(0.33) - $2.20 per MWh
Total CECONY — Commodity	$(5)

(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, 2023 and 2022 and classified as Level 3 in the fair value hierarchy:


	Con Edison		CECONY
(Millions of Dollars)	2023	2022	2023	2022
Beginning balance as of January 1,	$15	$(11)	$(6)	$(7)
Included in earnings	(4)	(11)	(2)	(5)
Included in regulatory assets and liabilities	33	11	31	10

Settlements	4	11	2	5
Changes in level 3 assets and liabilities held for sale (a)	—	25	—	—
Decrease due to the sale of the Clean Energy Businesses (a)	(29)	—	—	—
Transfer out of level 3	(27)	(10)	(30)	(9)
Ending balance as of December 31,	$(8)	$15	$(5)	$(6)

(a)On March 1, 2023, Con Edison completed the sale of all of the stock of the Clean Energy Businesses. See Note W and Note X.

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 ($17 million loss and $26 million gain) on the consolidated income statement for the years ended December 31, 2023 and 2022, respectively. On March 1, 2023, Con Edison


CON EDISON ANNUAL REPORT 2023			165

completed the sale of all of the stock of the Clean Energy Businesses and amounts for 2023 are shown through the date of sale. See Note W and Note X.

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.

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 2023, 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

Con Edison has determined that the use of Hypothetical Liquidation at Book Value (HLBV) accounting is reasonable and appropriate to attribute income and loss to the tax equity investors for various projects owned by the Clean Energy Businesses. See "Use of Hypothetical Liquidation at Book Value" in Note A. On March 1, 2023, Con Edison completed the sale of all of the stock of the Clean Energy Businesses. In connection with the sale, Con Edison retained a tax equity interest in two renewable electric projects located in Virginia, and in the Crane Solar Project (collectively, the "Retained Projects"). Included in the sale were Con Edison's interests in CED Nevada Virginia and the Tax Equity Projects, defined below (collectively, the "Sold Projects"). The HLBV method of accounting resulted in an immaterial amount of income/(loss) for Con Edison and the tax equity investor for the Sold Projects for the year ended December 31, 2023; information for the year ended December 31, 2022 is presented below. See Note W and X.

Retained Projects

Con Edison retained a tax equity interest valued at $20 million in two renewable electric projects located in Virginia that is accounted for as an equity method investment and represents the maximum exposure to loss for this investment. See Note W. The earnings of the projects, once in service, are determined using the HLBV method of accounting and resulted in losses of $14 million ($10 million, after tax) for the year ended December 31, 2023.

Con Edison also retained its $11 million equity interest in the Crane solar project that was valued at $0 as of December 31, 2023 and is accounted for as an equity method investment. See Note W. The earnings of the project are determined using the HLBV method of accounting and were not material for the years ended December 31, 2023 and 2022.

Con Edison is not the primary beneficiary of any Retained Projects since the power to direct the activities that most significantly impact the economics of the renewable electric projects is not held by Con Edison.

Sold Projects

In 2018, the Clean Energy Businesses completed its acquisition of Sempra Solar Holdings, LLC. Included in the acquisition were certain operating projects (Tax Equity Projects) with a noncontrolling tax equity investor to which a percentage of earnings, tax attributes and cash flows are allocated. Electricity generated by the Tax Equity Projects is sold to utilities and municipalities pursuant to long-term power purchase agreements.


166			CON EDISON ANNUAL REPORT 2023

In 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 are allocated.

The Tax Equity Projects and CED Nevada Virginia were consolidated entities in which Con Edison had less than a 100 percent membership interest at December 31, 2022 and in which Con Edison has no interest in subsequent to the sale of the Clean Energy Businesses on March 1, 2023. Con Edison was the primary beneficiary since the power to direct the activities that most significantly impact the economics of the Tax Equity Projects and CED Nevada Virginia was held by Con Edison.

The HLBV method of accounting resulted in income/(loss) for Con Edison and the tax equity investors for the years ended December 31, 2022 and 2021 as shown in the table below. On March 1, 2023, Con Edison completed the sale of all of the stock of the Clean Energy Businesses. See Note W and Note X.


	2022		2021
(Millions of Dollars)	CED Nevada Virginia	Tax Equity Projects	CED Nevada Virginia	Tax Equity Projects
Tax equity investor	$(49)	$(11)	$(158)	$6
After tax	(37)	(8)	(119)	4
Con Edison	41	51	155	30
After tax	31	38	117	24

At December 31, 2022, Con Edison’s consolidated balance sheet included the following amounts associated with its consolidated VIEs:


	Tax Equity Projects
	Great Valley Solar (c)(d)	Copper Mountain - Mesquite Solar (c)(e)	CED Nevada Virginia (c)(f)
(Millions of Dollars)	2022	2022	2022
Assets held for sale (a)	$305	$580	$686


Total assets (a)	$305	$580	$686
Liabilities held for sale (b)	$20	$81	$331

Total liabilities (b)	$20	$81	$331

(a)The assets of the Tax Equity Projects and CED Nevada Virginia represent assets of a consolidated VIE that can be used only to settle obligations of the consolidated VIE. Amounts shown for 2022 are included in current assets held for sale on Con Edison's consolidated balance sheet as of December 31, 2022. On March 1, 2023, Con Edison completed the sale of all of the stock of the Clean Energy Businesses. See Note W and Note X. For the disposal of the noncontrolling interest, see Con Edison's Consolidated Statement of Equity.

(b)The liabilities of the Tax Equity Projects and CED Nevada Virginia represent liabilities of a consolidated VIE for which creditors do not have recourse to the general credit of the primary beneficiary. Amounts shown for 2022 are included in current liabilities held for sale on Con Edison's consolidated balance sheet as of December 31, 2022. On March 1, 2023, Con Edison completed the sale of all of the stock of the Clean Energy Businesses. See Note W and Note X. For the disposal of the noncontrolling interest, see Con Edison's Consolidated Statement of Equity.

(c)Con Edison did not provide any financial or other support during the year that was not previously contractually required.

(d)Great Valley Solar consists of the Great Valley Solar 1, Great Valley Solar 2, Great Valley Solar 3 and Great Valley Solar 4 projects, for which the noncontrolling interest of the tax equity investor was $67 million at December 31, 2022.

(e)Copper Mountain - Mesquite Solar consists of the Copper Mountain Solar 4, Mesquite Solar 2 and Mesquite Solar 3 projects for which the noncontrolling interest of the tax equity investor was $94 million at December 31, 2022.

(f)CED Nevada Virginia consists of the Copper Mountain Solar 5, Battle Mountain Solar and Water Strider Solar projects for which the noncontrolling interest of the tax equity investor was $39 million at December 31, 2022.


CON EDISON ANNUAL REPORT 2023			167

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.

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 were located on property that was 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. On March 1, 2023, Con Edison completed the sale of all of the stock of the Clean Energy Businesses. See Note W and Note X.

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.

The following table represents the balance of asset retirement obligations as of December 31, 2023 and 2022, and changes to the obligation for the years then ended:


	Con Edison		CECONY
(Millions of Dollars)	2023	2022	2023	2022
Beginning Balance as of January 1,	$500	$577	$499	$504
ARO held for sale (a)	—	(77)	—	—
Changes in estimated cash flows	76	44	75	43
Accretion expense	17	18	17	14
Liabilities settled	(71)	(62)	(71)	(62)
Ending Balance as of December 31, (b)	$522	$500	$520	$499

(a)The asset retirement obligations of the Clean Energy Businesses (inclusive of those of Broken Bow II) in 2022, and of Broken Bow II in 2023 are reflected in current liabilities held for sale on Con Edison's consolidated balance sheets as of December 31, 2022 and 2023, respectively. On March 1, 2023, Con Edison completed the sale of all of the stock of the Clean Energy Businesses. For 2023, $3 million of asset retirement obligations related to Broken Bow II are not shown in the table above, as they are already excluded from the beginning balance as of January 1, 2023 for Con Edison. See Note A and Note X.


168			CON EDISON ANNUAL REPORT 2023

(b)At December 31, 2023, Con Edison and CECONY recorded reductions of $77 million to the regulatory liability associated with cost of removal to reflect depreciation and interest expense. At December 31, 2022, Con Edison and CECONY recorded reductions of $78 million and $77 million, respectively, 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 ($19,146 million and $1,062 million, respectively), at December 31, 2023, are considered restricted net assets. The NYSPSC may impose additional measures to separate, or “ring fence,” the Utilities from Con Edison and its other subsidiaries. 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, 2023, 2022 and 2021 were as follows:


	CECONY (a)
(Millions of Dollars)	2023	2022	2021
Cost of services provided	$146	$135	$137
Cost of services received	82	75	68

(a) On March 1, 2023, Con Edison completed the sale of all of the stock of the Clean Energy Businesses. See Note W and Note X.

In addition, CECONY and O&R have joint gas supply arrangements in connection with which CECONY sold to O&R $82 million, $144 million and $90 million of natural gas for the years ended December 31, 2023, 2022 and 2021, respectively. These amounts are net of the effect of related hedging transactions.

At December 31, 2023 and 2022, CECONY's net receivable (payable) to Con Edison for income taxes were $110 million and $(89) million, respectively.

The Utilities perform work and incur expenses on behalf of New York Transco, a company in which Con Edison Transmission has a 45.7 percent interest in New York Transco's New York Energy Solution project and a 41.7 percent interest in New York Transco's share of the Propel NY Energy project that is jointly owned with the New York Power Authority. The Utilities bill New York Transco for such work and expenses in accordance with established policies. For the years ended December 31, 2023 and 2022, the amounts billed by the Utilities to New York Transco were $7.3 million and $8.0 million, respectively.

CECONY has a 20-year transportation contract with Mountain Valley Pipeline, LLC (MVP) for 250,000 dekatherms per day of capacity. Con Edison Transmission has an interest in MVP. See "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 contract with MVP unless CECONY can demonstrate that the contract is in the public interest. CECONY advised the NYSPSC that it would respond to the request if the NYSPSC opened a proceeding to consider this request. CECONY has not incurred costs under the contract.

FERC has authorized CECONY to lend funds to O&R for a period of not more than 12 months, in an amount not to exceed $250 million, at prevailing market rates. At December 31, 2023 and 2022 there were no outstanding loans to O&R.

The Clean Energy Businesses had financial electric capacity contracts with CECONY and O&R. For the year ended December 31, 2022, the Clean Energy Businesses realized a $5 million gain under these contracts. On March 1, 2023, Con Edison completed the sale of all of the stock of the Clean Energy Businesses. As a result of the sale, the Clean Energy Businesses are no longer recognized as a related party. See Note W and Note X.


CON EDISON ANNUAL REPORT 2023			169

The Consolidated Edison Foundation, Inc. (the Foundation), established in December 2023, is a non-consolidated not-for-profit corporation funded by Con Edison that plans to make contributions to selected charitable organizations. In December 2023, Con Edison made an unconditional promise to give $12 million to the Foundation. For the year ended December 31, 2023, Con Edison accrued such amount as an expense in “Other Income and Deductions” within its consolidated income statement.

Note V – New Financial Accounting Standards

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

In November 2023, the FASB issued amendments to the guidance on accounting for Segment Reporting (Topic 280) through ASU 2023-07. The amendments would improve the disclosures about a public entity’s reportable segments and address requests from investors for additional, more detailed information about a reportable segment’s expenses. For public entities, the amendments are effective for annual reporting periods beginning after December 15, 2023, and interim periods within fiscal years beginning after December 15, 2024. A public entity should apply such amendments retrospectively to all prior periods presented in the financial statements. The Companies do not expect the new guidance to have a material impact on their financial position, results of operations and liquidity.

In December 2023, the FASB issued amendments to the guidance on accounting for Income Taxes (Topic 740) through ASU 2023-09. The amendments would improve the disclosures related to income taxes. The amendments focus on three key areas: Rate Reconciliation, Income Taxes Paid, and Income (or loss)/Income tax expense (or benefit) relating to disaggregated continuing operations. For public entities, the amendments are effective for annual reporting periods beginning after December 15, 2024. Early adoption is permitted for annual financial statements. The Companies do not expect the new guidance to have a material impact on their 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. On March 1, 2023, Con Edison completed the sale of all of the stock of the Clean Energy Businesses. See Note W and Note X.

Stagecoach Gas Services

In 2021, a subsidiary of Con Edison Transmission 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 Con Edison Transmission 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 - 2021 Partial Impairment of Investment in Stagecoach Gas Services LLC (Stagecoach)" in Note A.

Clean Energy Businesses

During the first nine months of 2022, Con Edison considered strategic alternatives with respect to the Clean Energy Businesses. On October 1, 2022, following the conclusion of such review and to allow for continued focus on the Utilities and their clean energy transition, Con Edison entered into a purchase and sale agreement pursuant to which Con Edison agreed to sell the Clean Energy Businesses to RWE Renewables Americas, LLC, a subsidiary of RWE for a total of $6,800 million, subject to closing adjustments. On March 1, 2023, Con Edison completed the sale of all of the stock of the Clean Energy Businesses to RWE for $3,993 million. The preliminary purchase price at closing was adjusted (i) upward for certain cash and cash equivalents, (ii) downward for certain indebtedness and


170			CON EDISON ANNUAL REPORT 2023

debt-like items, (iii) downward for certain transaction expenses, (iv) downward to the extent that the net working capital varied from a set target, (v) upward to the extent that capital expenditures incurred prior to the closing of the transaction varied from a set budget, and (vi) downward by the value allocated to Broken Bow II, a project that was not able to be conveyed to RWE upon closing of the transaction. The final purchase price is subject to customary adjustments for timing differences and a final valuation report, among other factors; the process to finalize the purchase price is ongoing. The transaction was completed at arm’s length and RWE was not, and will not be, considered a related party to Con Edison.

Con Edison's preliminary gain on the sale of the Clean Energy Businesses was $865 million ($767 million, after tax) for the year ended December 31, 2023 and remains subject to true-up for the finalization adjustments described above. The portion of the gain attributable to the non-controlling interest retained in certain tax-equity projects was not material. The sale included all of the Clean Energy Businesses with the exception of tax equity interests in three projects, described below, and one deferred project, Broken Bow II, a 75 MW nameplate capacity wind power project located in Nebraska. See Note X. Transfer of the project depends on one outstanding counterparty consent, and if and when such consent is obtained within two years of the sale of the Clean Energy Businesses, i.e., by February 28, 2025, the project will transfer. RWE Renewables Americas, LLC is operating the facility on behalf of Con Edison pursuant to certain service agreements, for which the fees are not material.

Con Edison retained the Clean Energy Businesses' tax equity investment interest in the Crane solar project and another tax equity investment interest in two solar projects located in Virginia. These tax equity partnerships produce renewable energy tax credits that can be used to reduce Con Edison’s federal income tax in the year in which the projects are placed in service. These tax credits would be subject to recapture, in whole or in part, if the assets were sold within a five-year period beginning on the date on which the assets are placed in service. Con Edison will continue to employ HLBV accounting for its interests in these tax equity partnerships. The combined carrying value of the retained tax equity interests was approximately $13 million at December 31, 2023.

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

Concurrent with entering into the purchase and sale agreement, Con Edison incurred costs in the normal course of the sale process. Transaction costs of $48 million ($35 million after-tax) and $12 million ($9 million after-tax) were recorded during 2022 and 2023, respectively. Also, depreciation and amortization expenses of approximately $41 million ($28 million after-tax) were not recorded on the assets of the Clean Energy Businesses in 2023 prior to the closing of the transaction.

Following the sale of the Clean Energy Businesses and pursuant to a reimbursement and indemnity agreement with RWE, Con Edison remains responsible for certain potential costs related to a battery storage project located in Imperial County, California. Con Edison's exposure under the agreement could range up to approximately $172 million. As of December 31, 2023, no material amounts were recorded as liabilities on Con Edison's consolidated balance sheet related to this agreement. During 2023, Con Edison received $24 million of net proceeds from this battery storage project, and $4 million was recorded as unbilled contract revenue as of December 31, 2023. See Note M.

The following table shows the pre-tax operating income for the Clean Energy Businesses.


	For the Year Ended December 31,
(Millions of Dollars)	2023	2022	2021
Pre-tax operating income	$25	$466	$310
Pre-tax operating income, excluding non-controlling interest	21	406	158

Note X - Held-for-Sale Treatment of the Clean Energy Businesses

On March 1, 2023, Con Edison completed the sale of all of the stock of the Clean Energy Businesses. See Note W. The sale excluded tax equity interests in three projects that were retained by Con Edison and one deferred project, Broken Bow II, a 75 MW nameplate capacity wind power project located in Nebraska. Transfer of Broken Bow II


CON EDISON ANNUAL REPORT 2023			171

from Con Edison to RWE depends on one outstanding counterparty consent, and if and when such consent is obtained within two years of the sale of the Clean Energy Businesses, i.e., by February 28, 2025, the project will transfer. RWE Renewables Americas, LLC is operating the facility on behalf of Con Edison pursuant to certain service agreements for which the fees are not material.

The carrying amounts of the major classes of assets and liabilities of Broken Bow II as of December 31, 2023 and of the Clean Energy Businesses (inclusive of Broken Bow II) as of December 31, 2022 were presented on a held-for-sale basis, and accordingly exclude net deferred tax liability balances, as follows:


(Millions of Dollars)	December 31, 2023	December 31, 2022
ASSETS
CURRENT ASSETS
Cash and temporary cash investments	$—	$25
Accounts receivable and other receivables - net allowance for uncollectible accounts	1	319
Accrued unbilled revenue	1	51
Fuel oil, gas in storage, materials and supplies, at average cost	—	56
Restricted cash	5	223
Fair value of derivatives assets	—	84
Prepayments	—	35
Other current assets	1	24
TOTAL CURRENT ASSETS	8	817
NON-UTILITY PLANT
Non-utility property, net accumulated depreciation	76	4,197
Construction work in progress	—	522
NET PLANT	76	4,719
OTHER NONCURRENT ASSETS
Goodwill	—	31
Intangible assets, less accumulated amortization	72	1,222
Operating lease right-of-use asset	7	266
Fair value of derivatives assets	—	93


Other deferred charges and noncurrent assets	—	14
TOTAL OTHER NONCURRENT ASSETS	79	1,626
TOTAL ASSETS	$163	$7,162


(Millions of Dollars)	December 31, 2023	December 31, 2022
LIABILITIES
CURRENT LIABILITIES
Long-term debt due within one year	$2	$353
Term loan	—	150
Accounts payable	—	326





Operating lease liabilities	2	33
Accrued Interest	—	40
Other current liabilities	4	71
TOTAL CURRENT LIABILITIES	8	973
NONCURRENT LIABILITIES
Asset retirement obligations	3	77

Operating lease liabilities	5	248
Other deferred credits and noncurrent liabilities	—	20

TOTAL NONCURRENT LIABILITIES	8	345
LONG-TERM DEBT	60	2,292
TOTAL LIABILITIES	$76	$3,610


172			CON EDISON ANNUAL REPORT 2023

Schedule I

Condensed Financial Information of Consolidated Edison, Inc. (a)

Condensed Statement of Income and Comprehensive Income

(Parent Company Only)


	For the Years Ended December 31,
(Millions of Dollars, except per share amounts)	2023	2022	2021
Equity in earnings of subsidiaries	$1,759	$1,860	$1,369
Other operating and maintenance expenses	—	(1)	(1)
Taxes other than income taxes	(2)	(7)	(6)
Other income (deductions)	7	(31)	14
Interest expense	(14)	(32)	(37)
Income tax benefit (expense)	(96)	(129)	7
Gain on the sale of the Clean Energy Businesses	865	—	—
Net Income	$2,519	$1,660	$1,346
Comprehensive Income	$2,520	$1,677	$1,376
Net Income Per Share – Basic	$7.25	$4.68	$3.86
Net Income Per Share – Diluted	$7.21	$4.66	$3.85
Dividends Declared Per Share	$3.24	$3.16	$3.10
Average Number Of Shares Outstanding—Basic (In Millions)	347.7	354.5	348.4
Average Number Of Shares Outstanding—Diluted (In Millions)	349.3	355.8	349.4

(a)These financial statements, in which Con Edison’s subsidiaries have been included using the equity method, should be read together with its consolidated financial statements and the notes thereto appearing above.


CON EDISON ANNUAL REPORT 2023			173

Condensed Financial Information of Consolidated Edison, Inc. (a)

Condensed Statement of Cash Flows

(Parent Company Only)


	For the Years Ended December 31,
(Millions of Dollars)	2023	2022	2021
















Net Cash Flows From Operating Activities	$772	$1,015	$1,459
Investing Activities
Contributions to subsidiaries	(1,854)	(150)	(1,135)
Debt receivable from affiliated companies	—	—	875
Proceeds from sale of the Clean Energy Businesses, net of cash and cash equivalents sold	3,927	—	—
Net Cash Flows From (Used in) Investing Activities	2,073	(150)	(260)
Financing Activities
Net (payment)/issuance of short-term debt	(343)	632	50

Retirement of long-term debt	(650)	(293)	(1,178)
Debt issuance costs	—	—	(1)
Repurchase of common shares	(1,000)	—	—
Issuance of common shares for stock plans	56	57	60
Issuance of common shares - public offering	—	—	775
Common stock dividends	(1,096)	(1,089)	(1,030)
Net Cash Flows Used in Financing Activities	(3,033)	(693)	(1,324)
Net Change for the Period	(188)	172	(125)
Balance at Beginning of Period	191	19	144
Balance at End of Period	$3	$191	$19


174			CON EDISON ANNUAL REPORT 2023

Condensed Financial Information of Consolidated Edison, Inc. (a)

Condensed Balance Sheet

(Parent Company Only)


	December 31,
(Millions of Dollars)	2023	2022
Assets
Current Assets
Cash and temporary cash investments	$3	$191
Other receivables, net allowance for uncollectible accounts	103	4
Tax receivable	1	5

Accounts receivable from affiliated companies	343	1,337
Accrued unbilled revenue	4	—
Prepayments	109	9
Other current assets	3	32
Total Current Assets	566	1,578
Investments in subsidiaries and others	20,778	20,839
Goodwill	406	406
Pension and retiree benefits - asset	5	5
Other deferred charges and noncurrent assets	249	2
Total Assets	$22,004	$22,830
Liabilities and Shareholders’ Equity
Current Liabilities
Long-term debt due within one year	$—	$649
Term loan	—	400
Notes payable	339	282
Accounts payable	30	39
Accounts payable to affiliated companies	12	11
Accrued taxes	15	7
Accrued taxes to affiliated companies	437	506
Accrued interest	—	7
Other current liabilities	8	7
Total Current Liabilities	841	1,908
Deferred income taxes and unamortized investment tax credits	—	235
Other noncurrent liabilities	5	—

Total Liabilities	846	2,143
Shareholders’ Equity
Common stock, including additional paid-in capital	9,898	9,840
Retained earnings	11,260	10,847
Total Shareholders’ Equity	21,158	20,687
Total Liabilities and Shareholders’ Equity	$22,004	$22,830


CON EDISON ANNUAL REPORT 2023			175

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