Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations

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Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations

This combined management’s discussion and analysis of financial condition and results of operations (MD&A) relates to the consolidated financial statements (the Third Quarter Financial Statements) included in this report of two separate registrants: Consolidated Edison, Inc. (Con Edison) and Consolidated Edison Company of New York, Inc. (CECONY). As used in this report, the term the “Companies” refers to Con Edison and CECONY. CECONY is a subsidiary of Con Edison and, as such, information in this management’s discussion and analysis about CECONY applies to Con Edison.

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

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

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

Con Edison, incorporated in New York State in 1997, is a holding company that owns all of the outstanding common stock of CECONY, Orange and Rockland Utilities, Inc. (O&R), Con Edison Clean Energy Businesses, Inc. and Con Edison Transmission, Inc. As used in this report, the term the “Utilities” refers to CECONY and O&R.


		Con Edison


CECONY	O&R		Clean Energy Businesses	Con Edison Transmission
	•RECO			•CET Electric
				•CET Gas

Con Edison’s principal business operations are those of CECONY, O&R, the Clean Energy Businesses and Con Edison Transmission. CECONY’s principal business operations are its regulated electric, gas and steam delivery businesses. O&R’s principal business operations are its regulated electric and gas delivery businesses. The Clean Energy Businesses develop, own and operate renewable and sustainable energy infrastructure projects and provide energy-related products and services to wholesale and retail customers. In October 2022, Con Edison entered into a purchase and sale agreement pursuant to which Con Edison agreed to sell the Clean Energy Businesses to RWE Renewables Americas, LLC, a subsidiary of RWE Aktiengesellschaft. See Note T to the Third Quarter Financial Statements. Con Edison Transmission invests in electric transmission projects and manages both electric and gas assets while seeking to develop electric transmission projects. See "Investments" in Note A to the Third Quarter Financial Statements.

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

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

Anticipated Sale of the Clean Energy Businesses

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

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

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

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

CECONY Electric and Gas Rate Plans

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

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

Clean Energy Goals

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

Con Edison Transmission

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

COVID-19

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

CECONY

Electric

CECONY provides electric service to approximately 3.6 million customers in all of New York City (except a part of Queens) and most of Westchester County, an approximately 660 square mile service area with a population of more than nine million.

During the summer of 2022, electric peak demand in CECONY's service area was 12,424 MW (which occurred on August 9, 2022). At design conditions, electric peak demand in CECONY's service area would have been approximately 12,692 MW in 2022 compared to CECONY's forecast of 12,570 MW. The higher peak demand at design conditions as compared to the forecast primarily reflects a moderate pace of recovery in electric demand in CECONY's territory during the emergence from the COVID-19 pandemic. CECONY increased its five-year forecast of average annual change in electric peak demand in its service area at design conditions from approximately 0.4 percent (for 2022 to 2026) to approximately 0.6 percent (for 2023 to 2027).

Gas

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

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

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

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

CECONY’s gas planning analysis also stated that the company is monitoring a gas supply constraint for the New York City portion of its service territory. In May 2022, the NYSPSC issued orders on gas planning and moratorium management. The orders set forth a schedule for filing future gas planning analyses and the process for initiating, operating and lifting a natural gas moratorium.

Steam

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

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

O&R

Electric

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

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

Gas

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

In May 2022, O&R decreased its five-year forecast of average annual growth of the firm peak gas demand in its service area at design conditions from approximately a 0.1 percent increase (for 2022 to 2026) to approximately a 0.1 percent decrease (for 2023 to 2027). The decrease primarily reflects an expected increase in customers' energy efficiency measures and electrification of space heating.

Clean Energy Businesses

Con Edison Clean Energy Businesses, Inc., together with its subsidiaries, are referred to in this report as the Clean Energy Businesses. The Clean Energy Businesses develop, own and operate renewable and sustainable energy infrastructure projects and provide energy-related products and services to wholesale and retail customers. The Clean Energy Businesses have approximately 3,200 megawatts (AC) of renewable energy projects in the U.S. In October 2022, Con Edison entered into a purchase and sale agreement pursuant to which Con Edison agreed to sell the Clean Energy Businesses to RWE Renewables Americas, LLC, a subsidiary of RWE Aktiengesellschaft. The closing of the transaction is subject to certain customary closing conditions, including, among other things, expiration or early termination of any required waiting periods under the Hart-Scott-Rodino Antitrust Improvements Act of 1976, as amended and approvals by the Committee on Foreign Investment in the United States and FERC. The transaction is expected to close in the first half of 2023, subject to satisfaction of the foregoing conditions, among other things. See Note T to the Third Quarter Financial Statements.

Con Edison Transmission

Con Edison Transmission, Inc. invests in electric transmission projects and manages both electric and gas assets through its wholly-owned subsidiaries, Consolidated Edison Transmission, LLC (CET Electric) and Con Edison Gas Pipeline and Storage, LLC (CET Gas). CET Electric owns a 45.7 percent interest in New York Transco LLC, which owns and has been selected to build additional electric transmission assets in NY. CET Gas and CECONY own 71.2

percent and 28.8 percent interests, respectively, in Honeoye, which operates a gas storage facility in upstate NY. In addition, CET Gas owns a 9.7 percent interest (that is expected to be reduced to 8.0 percent based on the current project cost estimate and CET Gas’ previous capping of its cash contributions to the joint venture) in Mountain Valley Pipeline LLC (MVP), a joint venture developing a proposed 300-mile gas transmission project in WV and VA. Con Edison Transmission, Inc., together with CET Electric and CET Gas, are referred to in this report as Con Edison Transmission.

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


	For the Three Months Ended September 30, 2022						For the Nine Months Ended September 30, 2022						At September 30, 2022
(Millions of Dollars, except percentages)	Operating Revenues			Net Income for Common Stock			Operating Revenues			Net Income for Common Stock			Assets
CECONY	$3,549	85	%	$493	80	%	$9,972	86	%	$1,138	77	%	$54,812	84	%
O&R	291	7		34	6		813	7		72	5		3,424	5
Total Utilities	$3,840	92	%	$527	86	%	$10,785	93	%	$1,210	82	%	$58,236	89	%
Clean Energy Businesses (a)	325	8		97	16		857	7		293	20		6,923	11
Con Edison Transmission	1	—		1	—		3	—		2	—		302	—
Other (b)	(1)	—		(12)	(2)		(6)	—		(35)	(2)		302	—
Total Con Edison	$4,165	100	%	$613	100	%	$11,639	100	%	$1,470	100	%	$65,763	100	%

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

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

Inflation Reduction Act

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

Coronavirus Disease 2019 (COVID-19) Impacts

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

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

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

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

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

Impact of CARES Act and 2021 Appropriations Act on Accounting for Income Taxes

In response to the economic impacts of the COVID-19 pandemic, the Coronavirus Aid, Relief, and Economic Security (CARES) Act became law on March 27, 2020. The CARES Act had several key business tax relief measures that presented cash benefits and/or refunds for Con Edison and its subsidiaries, including permitting a five-year carryback of a NOL for tax years 2018, 2019 and 2020, temporary removal of the 80 percent limitation of NOL carryforwards against taxable income for tax years before 2021, temporary relaxation of the limitations on interest deductions, employee retention tax credit and deferral of payments of employer payroll taxes.

The CARES Act also allowed employers to defer payments of the employer share of Social Security payroll taxes that would have otherwise been owed from March 27, 2020 through December 31, 2020. The Companies deferred the payment of employer payroll taxes for the period April 1, 2020 through December 31, 2020 of approximately $71 million ($63 million of which is for CECONY). The Companies paid half of this liability during 2021 and will repay the other half by December 31, 2022.

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

Accounting Considerations

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

CECONY and O&R have existing allowances for uncollectible accounts established against their customer accounts receivable balances that are reevaluated each quarter and updated accordingly. Changes to the Utilities’ reserve balances that result in write-offs of customer accounts receivable balances are not reflected in rates during the term of the current rate plans. For the three and nine months ended September 30, 2022, CECONY issued total credits of $265.8 million and $315.1 million, respectively, and O&R issued total credits of $4.7 million and $5.5 million, respectively, towards reducing customers’ accounts receivable balances pursuant to COVID-19 arrears assistance programs. See "COVID-19 Regulatory Matters" in Note B to the Third Quarter Financial Statements. The NYSPSC may consider additional programs to address utility arrearages. CECONY and O&R reduced customer accounts receivables balances commensurate with amounts authorized to be recovered under customer arrearage programs and expect to further reduce customer accounts balances for additional amounts that may be authorized by the NYSPSC. See "COVID-19 Regulatory Matters" in Note B to the Third Quarter Financial Statements and "Liquidity and Financing," below.

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

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

During the first nine months of 2022, the potential economic impact of the COVID-19 pandemic and the COVID-19 arrears assistance programs, were considered in forward-looking projections related to write-off and recovery rates, resulting in changes to the customer allowance for uncollectible accounts as detailed herein. The Companies test goodwill for impairment at least annually or whenever there is a triggering event, and test long-lived and intangible assets for recoverability when events or changes in circumstances indicate that the carrying value of long-lived or intangible assets may not be recoverable. The Companies identified no triggering events or changes in circumstances related to the COVID-19 pandemic that would indicate that the carrying value of goodwill, long-lived or intangible assets may not be recoverable at September 30, 2022.

NY Legislation

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

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

Liquidity and Financing

The Companies continue to monitor the impacts of the COVID-19 pandemic on the financial markets closely, including borrowing rates and daily cash collections. The Companies have been able to access the capital markets as needed since the start of the COVID-19 pandemic in March 2020. Inflationary pressure and higher interest rates could increase the amount of capital needed by the Utilities and the costs of such capital. See Note C and Note D to the Third Quarter Financial Statements and "Interest Rate Risk," below.

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

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

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

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

Results of Operations

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


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

(a)Net income for common stock and earnings per share from the Clean Energy Businesses for the three and nine months ended September 30, 2022 includes $41 million or $0.12 a share and $121 million or $0.35 a share, respectively, of net after-tax mark-to-market effects. Net income for common stock and earnings per share from the Clean Energy Businesses for the three and nine months ended September 30, 2022 also includes ($4) million or ($0.01) a share (after-tax) and $33 million or $0.09 a share (after-tax), respectively, of the effects of HLBV accounting for tax equity investments in certain renewable and sustainable electric projects.

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

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

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

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

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

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

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

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


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





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


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





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



Higher interest expense	(1)	(0.01)


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

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

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

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


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




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


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

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

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

The Companies’ other operations and maintenance expenses for the three and nine months ended September 30, 2022 and 2021 were as follows:


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

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

(b)Includes parent company and consolidation adjustments.

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

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


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



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

(a)Includes parent company and consolidation adjustments.

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

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

CECONY


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

Electric

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


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

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


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

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

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

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

(d)After adjusting for variations, primarily weather and billing days, electric delivery volumes in CECONY’s service area increased 4.2 percent in the three months ended September 30, 2022 compared with the 2021 period.

Operating revenues increased $347 million in the three months ended September 30, 2022 compared with the 2021 period primarily due to higher purchased power expenses ($155 million), an increase in revenues from the electric rate plan ($90 million), and higher fuel expenses ($19 million).

Purchased power expenses increased $155 million in the three months ended September 30, 2022 compared with the 2021 period due to higher unit costs ($77 million) and higher purchased volumes ($78 million).

Fuel expenses increased $19 million in the three months ended September 30, 2022 compared with the 2021 period due to higher unit costs ($22 million), offset in part by lower purchased volumes from the company's electric generating facilities ($3 million).

Other operations and maintenance expenses increased $129 million in the three months ended September 30, 2022 compared with the 2021 period primarily due to higher costs for pension and other postretirement benefits, reflecting reconciliation to the rate plan level ($85 million), higher municipal infrastructure support costs ($22 million), higher surcharges for assessments and fees that are collected in revenues from customers ($4 million), higher costs for injuries and damages ($2 million), higher uncollectible expense ($1 million), and higher health care cost ($1 million).

Taxes, other than income taxes increased $35 million in the three months ended September 30, 2022 compared with the 2021 period due to higher property taxes ($22 million), a higher deferral of over-collected property taxes ($5 million) and higher state and local taxes ($9 million).

Gas

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


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

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


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

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

(b)After adjusting for variations, primarily billing days, firm gas sales and transportation volumes in the company’s service area increased 8.4 percent in the three months ended September 30, 2022 compared with the 2021 period.

(c)Includes 273 thousand and 572 thousand of Dt for the 2022 and 2021 periods, respectively, which are also reflected in firm transportation and other.

(d)Other gas operating revenues generally reflect changes in the revenue decoupling mechanism and weather normalization clause current asset or regulatory liability and changes in regulatory assets and liabilities in accordance with other provisions of the company’s rate plans.

Operating revenues increased $107 million in the three months ended September 30, 2022 compared with the 2021 period primarily due to higher gas purchased for resale ($52 million) and an increase in revenues from the gas rate plan ($29 million).

Gas purchased for resale increased $52 million in the three months ended September 30, 2022 compared with the 2021 period due to higher unit costs ($51 million) and higher purchased volumes ($1 million).

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

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

Taxes, other than income taxes increased $14 million in the three months ended September 30, 2022 compared with the 2021 period primarily due to a higher deferral of over-collected property taxes ($8 million), higher property taxes ($3 million) and higher state and local taxes ($3 million).

Steam

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


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

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


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

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

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

Operating revenues increased $3 million in the three months ended September 30, 2022 compared with the 2021 period primarily due to higher purchased power expenses ($7 million), offset in part by lower fuel expenses ($4 million).

Purchased power increased $7 million in the three months ended September 30, 2022 compared with the 2021 period due to higher unit costs ($6 million) and higher purchased volumes ($1 million).

Fuel expenses decreased $4 million in the three months ended September 30, 2022 compared with the 2021 period due to lower unit costs ($4 million).

Other operations and maintenance expenses increased $6 million in the three months ended September 30, 2022 compared with the 2021 period primarily due to higher costs for pension and other postretirement benefits, reflecting reconciliation to the rate plan level ($7 million).

Depreciation and amortization expenses increased $1 million in the three months ended September 30, 2022 compared with the 2021 period primarily due to higher steam utility plant balances.

Other Income (Deductions)

Other income increased $104 million in the three months ended September 30, 2022 compared with the 2021 period primarily due to lower costs associated with components of pension and other postretirement benefits other than service cost ($110 million), offset in part by lower expenses resulting from investment performance in a deferred income plan ($6 million)

Net Interest Expense

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

Income Tax Expense

Income taxes increased $34 million in the three months ended September 30, 2022 compared with the 2021 period primarily due to higher income before income tax expense ($23 million), higher state income taxes ($6 million), assistance received from a New York State COVID-19 arrears program in 2022 (see "COVID-19 Regulatory Matters" in Note B to the Third Quarter Financial Statements) ($6 million) and the absence of a favorable tax adjustment from the prior year tax return due to an increase in the general business tax credits ($4 million), offset in part by lower reserve for injuries and damages ($4 million).

O&R


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

Electric

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


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

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


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

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

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

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

(d)After adjusting for weather and other variations, electric delivery volumes in O&R’s service area increased 2.6 percent in the three months ended September 30, 2022 compared with the 2021 period.

Operating revenues increased $29 million in the three months ended September 30, 2022 compared with the 2021 period primarily due to higher purchased power expenses ($21 million) and higher revenues from the NY electric rate plan ($10 million).

Purchased power expenses increased $21 million in the three months ended September 30, 2022 compared with the 2021 period due to higher unit costs ($11 million), and higher purchased volumes ($10 million).

Other operations and maintenance expenses increased $2 million in the three months ended September 30, 2022 compared with the 2021 period primarily due to higher costs for pension, reflecting reconciliation to the rate plan level.

Gas

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


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

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


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

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

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

Operating revenues increased $5 million in the three months ended September 30, 2022 compared with the 2021 period primarily due to higher gas purchased for resale ($3 million) and higher revenues from the NY gas rate plan ($2 million).

Gas purchased for resale increased $3 million in the three months ended September 30, 2022 compared with the 2021 period due to higher unit costs ($3 million).

Other operations and maintenance expenses increased $3 million in the three months ended September 30, 2022 compared with the 2021 period primarily due to higher costs for pension, reflecting reconciliation to the rate plan level.

Depreciation and amortization expenses increased $1 million in the three months ended September 30, 2022 compared with the 2021 period primarily due to higher gas utility plant balances.

Income Tax Expense

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

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

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

Clean Energy Businesses

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


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


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



Operating income	$104	$79	$25

Operating revenues increased $61 million in the three months ended September 30, 2022 compared with the 2021 period primarily due to higher wholesale revenues ($48 million), higher net mark-to-market values ($30 million) and higher energy services revenues ($2 million), offset in part by lower revenue from engineering, procurement and construction of renewable electric projects ($19 million).

Gas purchased for resale increased $46 million in the three months ended September 30, 2022 compared with the 2021 period due to higher purchased volumes and prices.

Other operations and maintenance expenses decreased $13 million in the three months ended September 30, 2022 compared with the 2021 period primarily due to lower costs from engineering, procurement and construction of renewable electric projects.

Depreciation and amortization expenses increased $2 million in the three months ended September 30, 2022 compared with the 2021 period primarily due to an increase in renewable electric projects in operation during 2022.

Net Interest Expense

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

Income Tax Expense

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

Income (Loss) Attributable to Non-Controlling Interest

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

Other

Income Tax Expense

Income taxes decreased $2 million in the three months ended September 30, 2022 compared with the 2021 period primarily due to lower state income taxes.

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


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



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

(a)Includes parent company and consolidation adjustments.

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

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

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

CECONY


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

Electric

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


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

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


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

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

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

Operating revenues increased $740 million in the nine months ended September 30, 2022 compared with the 2021 period primarily due to higher purchased power expenses ($326 million), an increase in revenues from the electric rate plan ($231 million) and higher fuel expenses ($63 million).

Purchased power expenses increased $326 million in the nine months ended September 30, 2022 compared with the 2021 period due to higher unit costs ($311 million), and higher purchased volumes ($15 million).

Fuel expenses increased $63 million in the nine months ended September 30, 2022 compared with the 2021 period due to higher unit costs ($70 million), offset in part by lower purchased volumes from the company's electric generating facilities ($7 million).

Other operations and maintenance expenses increased $324 million in the nine months ended September 30, 2022 compared with the 2021 period primarily due to higher costs for pension and other postretirement benefits, reflecting reconciliation to the rate plan level ($260 million), higher municipal infrastructure support costs ($20 million), higher surcharges for assessments and fees that are collected in revenues from customers ($17 million), higher stock-based compensation costs ($13 million), higher uncollectible expense ($6 million), and higher costs for injuries and damages ($2 million).

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

Taxes, other than income taxes increased $96 million in the nine months ended September 30, 2022 compared with the 2021 period primarily due to a higher deferral of over-collected property taxes ($50 million), higher property taxes ($22 million), higher state and local taxes ($19 million) and higher payroll taxes ($5 million).

Gas

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


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

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


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

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

(b)After adjusting for variations, primarily billing days, firm gas sales and transportation volumes in the company’s service area increased 0.6 percent in the nine months ended September 30, 2022 compared with the 2021 period.

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

Operating revenues increased $397 million in the nine months ended September 30, 2022 compared with the 2021 period primarily due to higher gas purchased for resale expense ($225 million) and an increase in revenues from the gas rate plan ($151 million).

Gas purchased for resale increased $225 million in the nine months ended September 30, 2022 compared with the 2021 period due to higher unit costs ($172 million) and higher purchased volumes ($53 million).

Other operations and maintenance expenses increased $69 million in the nine months ended September 30, 2022 compared with the 2021 period primarily due to higher costs for pension and other postretirement benefits, reflecting reconciliation to the rate plan level ($53 million), higher stock-based compensation costs ($3 million), higher departmental gas operations cost ($1 million), higher uncollectible expense ($1 million), higher municipal infrastructure support costs ($1 million), and higher surcharges for assessments and fees that are collected in revenues from customers ($1 million).

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

Taxes, other than income taxes increased $46 million in the nine months ended September 30, 2022 compared with the 2021 period primarily due to a higher deferral of over-collected property taxes ($20 million), higher property taxes ($14 million) and higher state and local taxes ($10 million).

Steam

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


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

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


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

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

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

Operating revenues increased $51 million in the nine months ended September 30, 2022 compared with the 2021 period primarily due to higher fuel expenses ($26 million), higher purchased power expenses ($19 million), and the impact of milder than normal weather in the 2021 period ($3 million).

Purchased power expenses increased $19 million in the nine months ended September 30, 2022 compared with the 2021 period due to higher unit costs ($23 million), offset in part by lower purchased volumes ($4 million).

Fuel expenses increased $26 million in the nine months ended September 30, 2022 compared with the 2021 period due to higher unit costs ($20 million) and higher purchased volumes from the company’s steam generating facilities ($6 million).

Other operations and maintenance expenses increased $26 million in the nine months ended September 30, 2022 compared with the 2021 period primarily due to higher costs for pension and other postretirement benefits, reflecting reconciliation to the rate plan level ($22 million), higher surcharges for assessments and fees that are collected in revenues from customers ($1 million), and higher stock-based compensation costs ($1 million).

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

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

Other Income (Deductions)

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

Net Interest Expense

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

Income Tax Expense

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

O&R


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

Electric

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


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

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


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

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

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

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

(d)After adjusting for weather and other variations, electric delivery volumes in O&R’s service area increased 1.5 percent in the nine months ended September 30, 2022 compared with the 2021 period.

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

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

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

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

Gas

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


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

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


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

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

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

Operating revenues increased $42 million in the nine months ended September 30, 2022 compared with the 2021 period primarily due to an increase in gas purchased for resale ($38 million) and higher revenues from the NY gas rate plan ($8 million).

Gas purchased for resale increased $38 million in the nine months ended September 30, 2022 compared with the 2021 period primarily due to higher unit costs ($30 million) and higher purchased volumes ($7 million).

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

Depreciation and amortization expenses increased $1 million in the nine months ended September 30, 2022 compared with the 2021 period primarily due to higher gas utility plant balances.

Income Tax Expense

Income taxes increased $7 million in the nine months ended September 30, 2022 compared with the 2021 period primarily due to higher income before income tax expense ($5 million) and higher state income taxes ($3 million), offset in part by an increase in the amortization of excess deferred federal income taxes due to the TCJA ($1 million).

Clean Energy Businesses

The Clean Energy Businesses’ results of operations for the nine months ended September 30, 2022 compared with the 2021 period were as follows:


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




Operating income	$248	$196	$52

Operating revenues increased $78 million in the nine months ended September 30, 2022 compared with the 2021 period primarily due to higher wholesale revenues ($130 million), net mark-to-market values ($23 million), offset in part by lower revenue from engineering, procurement and construction of renewable electric projects ($71 million), and lower energy services revenues ($4 million).

Purchased power increased $6 million in the nine months ended September 30, 2022 compared with the 2021 period due to higher costs from renewable electric projects.

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

Other operations and maintenance expenses decreased $96 million in the nine months ended September 30, 2022 compared with the 2021 period primarily due to lower costs from engineering, procurement and construction of renewable electric projects.

Depreciation and amortization expenses increased $6 million in the nine months ended September 30, 2022 compared with the 2021 period primarily due to an increase in renewable electric projects in operation during 2022.

Net Interest Expense

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

Income Tax Expense

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

Income (Loss) Attributable to Non-Controlling Interest

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

Con Edison Transmission

Other Income (Deductions)

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

Net Interest Expense

Net interest expense decreased $5 million in the nine months ended September 30, 2022 compared with the 2021 period primarily due to the repayment of an intercompany loan from the parent company from a portion of the proceeds from the substantial completion of the sale of Stagecoach.

Income Tax Expense

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

Other

Income Tax Expense

Income taxes increased $9 million in the nine months ended September 30, 2022 compared with the 2021 period primarily due to higher state income taxes.

Liquidity and Capital Resources

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

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


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

(a) Includes parent company and consolidation adjustments.

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

(c) See "Reconciliation of Cash, Temporary Cash Investments and Restricted Cash" in Note A to the Third Quarter Financial Statements.

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

Financial Statements.

Cash Flows from Operating Activities

The Utilities’ cash flows from operating activities primarily reflect their energy sales and deliveries and cost of operations. The volume of energy sales and deliveries is primarily affected by factors external to the Utilities, such as customer demand, weather, market prices for energy and economic conditions. Measures that promote distributed energy resources, such as distributed generation, demand reduction and energy efficiency, also affect the volume of energy sales and deliveries.

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

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

Pursuant to their rate plans, the Utilities have recovered from customers a portion of the tax liability they will pay in the future as a result of temporary differences between the book and tax basis of assets and liabilities. These temporary differences affect the timing of cash flows, but not net income, as the Companies are required to record deferred tax assets and liabilities at the current corporate tax rate for the temporary differences. For the Utilities, credits to their customers of the net benefits of the TCJA, including the reduction of the corporate tax rate to 21 percent, decrease cash flows from operating activities. Pursuant to their rate plans, the Utilities also recover from customers the amount of property taxes they will pay. The payment of property taxes by the Utilities affects the timing of cash flows and increases the amount of short-term borrowings issued by the Utilities when property taxes are due and as property taxes increase, but generally does not impact net income. See “Rate Plans” in Note B, "COVID-19 Regulatory Matters" in Note B, “Other Regulatory Matters” in Note B and Note J to the Third Quarter Financial Statements and "Coronavirus Disease 2019 (COVID-19) Impacts - Liquidity and Financing," above.

Net income is the result of cash and non-cash (or accrual) transactions. Only cash transactions affect the Companies’ cash flows from operating activities. Principal non-cash charges or credits include depreciation, deferred income tax expense, amortizations of certain regulatory assets and liabilities and accrued unbilled revenue. Non-cash charges or credits may also be accrued under the revenue decoupling and cost reconciliation mechanisms in the Utilities’ NY electric and gas rate plans. For Con Edison, net income for the nine months ended September 30, 2021 included non-cash losses recognized with respect to a partial goodwill impairment of Con Edison Transmission’s investment in Stagecoach. See “Investments” in Note A to the Third Quarter Financial Statements.

Net cash flows from operating activities for the nine months ended September 30, 2022 for Con Edison and CECONY were $906 million higher and $940 million higher, respectively, than in the 2021 period. The changes in net cash flows for Con Edison and CECONY primarily reflect net lower pension and retiree benefits contributions ($433 million and $408 million, respectively), higher deferred income taxes ($150 million and $69 million, respectively), higher other current liabilities balances ($139 million and $46 million, respectively) and higher recoveries of depreciation and amortization ($82 million and $74 million, respectively), a higher increase of accounts receivables balances from customers net of allowance for uncollectible accounts ($70 million and $80 million, respectively) (see “COVID-19 Regulatory Matters” in Note B to the Third Quarter Financial Statements and “Coronavirus Disease 2019 (COVID-19) Impacts", "Accounting Considerations” and “Liquidity and Financing,” above) and higher increase of accounts payable balances ($76 million and $37 million, respectively), offset in part by net lower deferred credits, noncurrent liabilities and other regulatory liabilities balances ($216 million and $225 million, respectively). For Con Edison, it also reflects higher other receivables and current asset balances ($41 million). For CECONY, the higher net cash flows from operating activities also reflects lower other receivables and other current asset balances ($285 million), and higher accrued taxes ($28 million). The change in net cash flows also reflects the timing of payments for and recovery of energy costs. This timing is reflected within changes to accounts receivable – customers, recoverable and refundable energy costs within other regulatory assets and liabilities and accounts payable balances.

Cash Flows Used in Investing Activities

Net cash flows used in investing activities for Con Edison and CECONY were $909 million higher and $147 million higher, respectively, for the nine months ended September 30, 2022 compared with the 2021 period. The change for Con Edison primarily reflects the proceeds from the sale of Stagecoach in 2021 ($614 million), proceeds from the divestiture of renewable electric projects at the Clean Energy Businesses in 2021 ($183 million) and an increase in utility construction expenditures at CECONY ($142 million), partially offset by a decrease in non-utility construction expenditures at the Clean Energy Businesses ($80 million) due to construction of the CED Nevada Virginia projects being completed during the first half of 2021.

Cash Flows from Financing Activities

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

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

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

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

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

Edison in CECONY, for funding of its construction expenditures and for its other general corporate purposes.

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

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

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

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

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

net proceeds from the sale of which were used to redeem at maturity its $640 million floating rate three-year debentures and for other general corporate purposes. In June 2021 CECONY also issued $750 million aggregate principal amount of 3.60 percent debentures, due 2061, the net proceeds from the sale of which will be used to pay or reimburse the payment of, in whole or in part, existing and new qualifying eligible green expenditures, such as

energy efficiency and clean transportation expenditures, that include those funded on or after January 1, 2021 until

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

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

In December 2021, O&R issued $45 million aggregate principal amount of 2.31 percent debentures, due 2031 and $30 million aggregate principal amount of 3.17 percent debentures, due 2051, the net proceeds from the sales of which were used to repay short-term borrowings and for other general corporate purposes.

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

In March 2021, a subsidiary of the Clean Energy Businesses agreed to issue $229 million aggregate principal amount of 3.77 percent senior notes, due 2046. In June 2021, July 2021, and August 2021 CED Nevada Virginia issued $38 million, $61 million and $130 million, respectively, of the $229 million senior notes, which are secured by equity interests in CED Nevada and the proceeds from the sale of which repaid a portion of the borrowings outstanding under a construction loan facility.

In February 2021, a subsidiary of the Clean Energy Businesses borrowed $250 million at a variable rate, due 2028, secured by equity interests in four of the company’s solar electric projects, the interest rate for which was swapped to a fixed rate of 3.39 percent.

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

Con Edison’s cash flows from financing activities for the nine months ended September 30, 2022 and 2021 also reflect the proceeds, and reduction in cash used for reinvested dividends, resulting from the issuance of common shares under the company’s dividend reinvestment, stock purchase and long-term incentive plans of $71 million and $82 million, respectively.

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


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

Capital Requirements and Resources

Capital Resources

For each of the Companies, the common equity ratio at September 30, 2022 and December 31, 2021 was:


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

Assets, Liabilities and Equity

The Companies' assets, liabilities, and equity at September 30, 2022 and December 31, 2021 are summarized as follows.


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

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

(a) Includes parent company and consolidation adjustments.

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

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

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

CECONY

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

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

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

Other noncurrent assets at September 30, 2022 were $688 million higher than at December 31, 2021. The change in other noncurrent assets primarily reflects an increase in pension and retiree benefits ($501 million), an increase in the regulatory asset for system peak reduction and energy efficiency programs ($262 million), deferred storm costs ($10 million) and partially offset by deferred derivative losses ($18 million) and the decrease in deferrals for increased costs related to the COVID-19 pandemic ($5 million). An increase in the fair value of deferred assets ($80 million), and, operating lease right-of-use asset ($32 million). The increase is offset in part by a decrease in the deferred pension and other postretirement benefits ($110 million), and a decrease in the regulatory asset for unrecognized pension and other postretirement costs to reflect the final actuarial valuation, as measured at December 31, 2021, of the pension and other retiree benefit plans in accordance with the accounting rules for retirement benefits ($100 million). The change in the regulatory asset also reflects the period's amortization of accounting costs. See Notes B, E and F to the Third Quarter Financial Statements.

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

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

Long-term debt at September 30, 2022 was $7 million higher than at December 31, 2021. The change in long-term

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

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

O&R

Current assets at September 30, 2022 were $42 million higher than at December 31, 2021. The change in current assets primarily reflects higher prepayments ($19 million), an increase in accounts receivables, net of allowance for uncollectible accounts ($10 million) (see “COVID-19 Regulatory Matters” in Note B to the Third Quarter Financial Statements and “Coronavirus Disease 2019 (COVID-19) Impacts - Accounting Considerations” and “Liquidity and Financing,” above), an increase in gas in storage, at average cost ($12 million) and an increase in the fair value of short-term derivative assets ($1 million).

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

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

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

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

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

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

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

Clean Energy Businesses

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

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

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

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

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

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

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

Con Edison Transmission

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

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

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

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

Equity at September 30, 2022 was $2 million higher than at December 31, 2021. The change in equity primarily reflects an increase in net income for the nine months ended September 30, 2022.

Regulatory Matters

Liability for Service Interruptions

In December 2021, the New York State legislature amended the New York State Public Service Law, effective April 2022, to require NY electric and gas utilities, including CECONY and O&R, to provide compensation to residential and small business customers that experience widespread prolonged outages lasting more than seventy-two consecutive hours, subject to certain exceptions, including: a bill credit of $25 for each twenty-four hour period of service outage beyond the first seventy-two consecutive hour outage; reimbursement to customers for food spoilage up to $540; and reimbursement of affected residential customers for prescription medicine spoilage losses without limitation. Any such costs incurred by utilities are not recoverable from customers. Utilities may petition the NYSPSC to request a waiver of the requirements of this section of the New York State Public Service Law. In July 2022, the NYSPSC issued an order that promulgated rules and definitions for the law’s implementation and determined that while a utility could seek a waiver of the requirement to provide compensation, it could not seek a waiver of the requirement that the costs of outage credits not be recovered from customers if it provided compensation.

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

Environmental Matters

In July 2021, a CECONY feeder failure led to the discharge of thousands of gallons of dielectric fluid from a street manhole in New Rochelle, NY. Dielectric fluid reached nearby streets, properties and the New Rochelle Harbor. CECONY, the U.S. Coast Guard, the NYSDEC and other agencies responded to the incident. CECONY stopped the feeder leak on the same day the discharge occurred and has completed the spill recovery and associated cleanup operations. In addition, the company has received third-party damage claims. The costs associated with this matter are not expected to have a material adverse effect on the company’s financial condition, results of operations or liquidity. In connection with the incident, the company may incur monetary sanctions of more than $0.3 million for violations of certain provisions regulating the discharge of materials into, and for the protection of, the environment.

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

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

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

Clean Energy Future

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

In July 2022, the NYSPSC issued an order directing New York utilities, including CECONY and O&R, to implement managed electric vehicle charging programs and prescribing program and funding requirements. The order provides CECONY and O&R with up to a total of $31 million and $5.8 million, respectively, through 2025, for program implementation and administration costs. The NYSPSC authorized both CECONY and O&R to recover these costs via surcharge or other mechanisms. The order also provides CECONY and O&R with authorization to offer incentives to encourage electric vehicle charging to occur overnight and during off-peak times totaling approximately $71.8 million and $8.2 million, respectively, through 2025, that would be recovered through the respective company’s revenue reconciliation mechanisms. In October 2022, the NJBPU approved RECO’s electric vehicle make-ready program that includes a budget of $7.6 million through 2026 for electric vehicle infrastructure and related program costs. The NJBPU authorized RECO to recover these costs, including a full rate of return, in rates from customers

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

Clean Energy Businesses

The following table provides information about the Clean Energy Businesses' renewable electric projects that are in operation and/or in construction at September 30, 2022:


Project Name	Generating Capacity (MW AC)	Power Purchase Agreement (PPA) Term (In Years) (a)	Actual In-Service/Acquisition Date	State	PPA Counterparty
Utility Scale
Solar

PJM assets (c)	73	(b)	2011/2013	NJ/PA	Various
New England assets (c)	24	Various	2011/2017	MA/RI	Various
California Solar	110	25	2012/2013	CA	PG&E
Mesquite Solar 1	165	20	2013	AZ	PG&E
Copper Mountain Solar 2	150	25	2013/2015	NV	PG&E
Copper Mountain Solar 3	255	20	2014/2015	NV	SCPPA
California Solar 2	80	20	2014/2016	CA	SCE/PG&E
Texas Solar 4	40	25	2014	TX	City of San Antonio
Texas Solar 5	100	25	2015	TX	City of San Antonio
Texas Solar 7	112	25	2016	TX	City of San Antonio
California Solar 3	110	20	2016/2017	CA	SCE/PG&E
Upton Solar	158	25	2017	TX	City of Austin
California Solar 4	240	20	2017/2018	CA	SCE
Copper Mountain Solar 1	58	12	2018	NV	PG&E
Copper Mountain Solar 4 (d)	94	20	2018	NV	SCE
Mesquite Solar 2 (d)	100	18	2018	AZ	SCE
Mesquite Solar 3 (d)	150	23	2018	AZ	WAPA (U.S. Navy)
Great Valley Solar (d)	200	17	2018	CA	MCE/SMUD/PG&E/SCE
Water Strider Solar (d)	80	20	2021	VA	VEPCO
Battle Mountain Solar/Battery Energy Storage System (d)	101	25	2021	NV	SPP
Copper Mountain Solar 5 (d)	250	25	2021	NV	NPC
Other (c)	26	Various	Various	Various	Various
Total Solar	2,676
Wind
Broken Bow II	75	25	2014	NE	NPPD
Wind Holdings	180	Various	Various	SD/MT	NWE/Basin Electric
Adams Rose Wind	23	7	2016	MN	Dairyland
Other (c)	51	Various	Various	Various	Various
Total Wind	329
Total MW (AC) in Operation	3,005
Total MW (AC) in Construction (c)	293
Total MW (AC) Utility Scale	3,298
Behind the Meter
Total MW (AC) in Operation (c)	66
Total MW (AC) in Construction (c)	3
Total MW Behind the Meter	69

(a)Represents PPA contractual term or remaining term from the date of acquisition.

(b)Solar renewable energy credit hedges are in place, in lieu of PPAs, through 2025.

(c)Projects have generally not been pledged as security for project debt financing.

(d)Projects are financed with tax equity. See Note P to the Third Quarter Financial Statements

Renewable Electric Generation

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


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

Con Edison Transmission

CET Gas

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

Financial and Commodity Market Risks

The Companies are subject to various risks and uncertainties associated with financial and commodity markets. The most significant market risks include interest rate risk, commodity price risk and investment risk.

Interest Rate Risk

The Companies' interest rate risk primarily relates to new debt financing needed to fund capital requirements, including the construction expenditures of the Utilities and maturing debt securities, and variable-rate debt. Con Edison and its subsidiaries manage interest rate risk through the issuance of mostly fixed-rate debt with varying maturities and through opportunistic refinancing of debt. The Clean Energy Businesses use interest rate swaps to exchange variable-rate project financed debt for a fixed interest rate. See Note N to the Third Quarter Financial Statements. Con Edison and CECONY estimate that at September 30, 2022, a 10 percent increase in interest rates applicable to its variable rate debt would result in an increase in annual interest expense of $10 million and $7

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

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

Commodity Price Risk

Con Edison’s commodity price risk primarily relates to the purchase and sale of electricity, gas and related derivative instruments. The Utilities and the Clean Energy Businesses apply risk management strategies to mitigate their related exposures. See Note N to the Third Quarter Financial Statements.

Con Edison estimates that, as of September 30, 2022, a 10 percent decline in market prices would result in a decline in fair value of $230 million for the derivative instruments used by the Utilities to hedge purchases of electricity and gas, of which $213 million is for CECONY and $17 million is for O&R. Con Edison expects that any such change in fair value would be largely offset by directionally opposite changes in the cost of the electricity and gas purchased.

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

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

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

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

The Clean Energy Businesses use a value-at-risk (VaR) model to assess the market price risk of their portfolio of electricity and gas commodity fixed-price purchase and sales commitments, physical forward contracts, generating assets and commodity derivative instruments. VaR represents the potential change in fair value of the portfolio due to changes in market prices for a specified time period and confidence level. These businesses estimate VaR across their portfolio using a delta-normal variance/covariance model with a 95 percent confidence level, compare the measured VaR results against performance due to actual prices and stress test the portfolio each quarter using an assumed 30 percent price change from forecast. Since the VaR calculation involves complex methodologies and estimates and assumptions that are based on past experience, it is not necessarily indicative of future results. VaR for the portfolio, assuming a one-day holding period, for the nine months ended September 30, 2022 and the year ended December 31, 2021, respectively, was as follows:


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

Investment Risk

The Companies’ investment risk relates to the investment of plan assets for their pension and other postretirement benefit plans. Con Edison's investment risk also relates to the investments of Con Edison Transmission that are accounted for under the equity method. See "Investments" in Note A to the Third Quarter Financial Statements.

The Companies’ current investment policy for pension plan assets includes investment targets of 45 to 55 percent equity securities, 33 to 43 percent debt securities and 10 to 14 percent real estate. At September 30, 2022, the pension plan investments consisted of 47 percent equity securities, 36 percent debt securities and 17 percent real estate.

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

Material Contingencies

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

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