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 First 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 First 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, 2023 (File Nos.1-14514 and 1-01217, the Form 10-K).

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

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

									Con Edison
CECONY									O&R																		Con Edison Transmission
									•RECO

Con Edison’s principal business operations are those of the Utilities and Con Edison Transmission. CECONY’s principal business operations are its regulated electric, gas and steam delivery businesses. O&R’s principal business operations are its regulated electric and gas delivery businesses. Con Edison Transmission, through its subsidiaries, invests in electric transmission projects supporting Con Edison's effort to transition to clean, renewable energy and manages, through joint ventures, both electric and gas assets while seeking to develop electric transmission projects that will bring clean, renewable electricity to customers focusing on New York and the Northeast. See "Investments" in Note A to the First Quarter Financial Statements. On March 1, 2023, Con Edison completed the sale of all of the stock of the Clean Energy Businesses. See Note Q and Note R to the First Quarter Financial Statements.

Con Edison seeks to provide shareholder value through continued dividend growth, supported by earnings growth in regulated utilities and contracted electric and gas assets. Con Edison invests to provide reliable, resilient, safe and clean energy critical for its New York customers. Con Edison is a responsible neighbor, helping the communities it serves become more sustainable.

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

Clean Energy Goals

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

and gas businesses may impact the Companies’ future financial condition. The Utilities expect electric usage 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 aim to reduce the carbon intensity of the energy that is consumed. The Utilities’ and their regulators’ efforts to maintain electric reliability in their service territories as electric usage increases may also impact the Companies’ future financial condition. The long-term future of the Utilities’ gas businesses depends upon the role that natural gas or other gaseous fuels will play in facilitating New York State’s and New York City’s climate goals. In addition, the impact and costs of climate change on the Utilities’ systems and the success of the Utilities’ efforts to maintain system reliability and manage service interruptions resulting from severe weather may impact the Companies’ future financial condition, results of operations and liquidity.

Aged Accounts Receivable Balances

At March 31, 2024, CECONY’s and O&R’s customer accounts receivables balances of $2,892 million and $119 million, respectively, included aged accounts receivables (balances outstanding in excess of 60 days) of $1,358 million and $29 million, respectively. In comparison, CECONY’s and O&R’s customer accounts receivable balances at February 28, 2020 were $1,322 million and $89 million, respectively, including aged accounts receivables (balances outstanding in excess of 60 days) of $408 million and $15 million, respectively. Prior to the start of the COVID-19 pandemic, the Utilities’ practice was to write off customer accounts receivables as uncollectible 90 days after the account is disconnected for non-payment or the account is closed during the collection process. In general, the Utilities suspended service disconnections during the COVID-19 pandemic. CECONY’s rate plans include reconciliation of late payment charges (from January 1, 2023 through December 31, 2025 for electric and gas and from January 1, 2020 through October 31, 2026 for steam) and write-offs of customer accounts receivable balances (from January 1, 2020 through December 31, 2025 for electric and gas and from January 1, 2020 through October 31, 2026 for steam) to amounts reflected in rates, with recovery/refund from or to customers via surcharge/sur-credit. CECONY's surcharge recoveries for late payment charges and write-offs of accounts receivable balances will, collectively, be subject to separate annual caps for electric and gas that produce no more than a half percent (0.5 percent) total customer bill impact per commodity (estimated for electric to be $57.3 million, $60.3 million, $62.6 million for 2023, 2024 and 2025, respectively, and for gas to be $14.8 million, $15.9 million and $16.8 million for 2023, 2024 and 2025, respectively). CECONY's surcharge recoveries for late payment charges and write-offs of accounts receivables for steam will each be subject to an annual cap that produces no more than half percent (0.5 percent) total customer bill impact (estimated to be $2.5 million, $3.0 million and $3.5 million for 2024, 2025 and 2026, respectively). Amounts in excess of the surcharge caps will be deferred as a regulatory asset for recovery in CECONY’s next base rate cases. O&R’s 2022 - 2024 rate plans include reconciliation of late payment charges to amounts reflected in rates for years 2022 through 2024, with full recovery/refund via surcharge/sur-credit once the annual variance equals or exceeds 5 basis points of return on equity and reconciliation of write-offs of customer accounts receivable balances to amounts reflected in rates from January 1, 2020 through December 31, 2024, with full recovery/refund via surcharge/sur-credit once the annual variance equals or exceeds 5 basis points of return on equity. Although these regulatory mechanisms are in place, a continued slower recovery in cash of outstanding customer accounts receivable balances has impacted the Companies’ liquidity and may continue to impact liquidity. The Utilities resumed collection activities, including write-offs of uncollectible customer accounts receivable balances. See “Liquidity and Capital Resources” and “Capital Requirements and Resources,” below.

Con Edison Transmission

Con Edison Transmission, through its New York Transco partnership and jointly with the New York Power Authority, is developing the Propel NY Energy transmission project that will deliver offshore wind energy from Long Island to New York City, Westchester County and the rest of New York State's high voltage power grid. Con Edison Transmission is participating in competitive solicitations to develop additional electric projects, including a joint solicitation submitted in April 2024 with another entity to build transmission infrastructure that will carry offshore wind power to New Jersey's electric grid. 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.

CECONY

Electric

CECONY provides electric service to approximately 3.7 million customers in all of New York City (except a part of Queens) and most of Westchester County, an approximately 660 square mile service area with a population of more than nine million.

Gas

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

Steam

CECONY operates the largest steam distribution system in the United States by producing and delivering approximately 15,444 MMlb of steam annually to approximately 1,525 customers in parts of Manhattan.

O&R

Electric

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

Gas

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

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

			For the Three Months Ended March 31, 2024															At March 31, 2024
(Millions of Dollars, except percentages)			Operating Revenues						Net Income for Common Stock												Assets
CECONY			$3,971			93		%	$694			96		%													$61,904			92		%
O&R			308			7			37			5															3,747			6
Total Utilities			$4,279			100		%	$731			101		%													$65,651			98		%
Con Edison Transmission			1			—			11			2															431			1
Other (a)			—			—			(22)			(3)															598			1
Total Con Edison			$4,280			100		%	$720			100		%													$66,680			100		%

(a)Other includes the parent company, Con Edison’s tax equity investments, the deferred project held for sale and consolidation adjustments. Net income for common stock for the three months ended March 31, 2024 includes $(22) million (after-tax) for an adjustment related to the sale of the Clean Energy Businesses. See Note Q and Note R to the First Quarter Financial Statements.

Inflation Reduction Act

On August 16, 2022, the Inflation Reduction Act of 2022 (the IRA) was signed into law and included a new 15 percent Corporate Alternative Minimum Tax (CAMT). Under the IRA, a corporation is subject to the CAMT if its average annual adjusted financial statement Income for the three taxable year period ending prior to the taxable year exceeds $1,000 million, and applies to tax years beginning after December 31, 2022. Con Edison and CECONY were not subject to the CAMT in 2023 and are subject to the CAMT beginning in 2024. The provisions of the CAMT are not expected to have a material impact on the Companies’ financial position, results of operations or liquidity.

New York Legislation

In April 2021, New York passed a law that increased the corporate franchise tax rate on business income from 6.5 percent to 7.25 percent, retroactive to January 1, 2021, for taxpayers with taxable income greater than $5 million. The law also reinstated the business capital tax at 0.1875 percent, not to exceed a maximum tax liability of $5 million per taxpayer. New York requires a corporate franchise taxpayer to calculate and pay the highest amount of tax under the three alternative methods: a tax on business income; a tax on business capital; or a fixed dollar minimum. The provisions to increase the corporate franchise tax rate and reinstate a capital tax were scheduled to expire after 2023. In May 2023, New York passed a law that extended the increase in the corporate franchise tax rate from 6.5 percent to 7.25 percent for an additional three years, through tax year 2026 and extended the business capital tax through tax year 2026. New York also passed a law establishing a permanent rate of 30 percent for the metropolitan transportation business tax surcharge. As a result of the sale of the Clean Energy Businesses in 2023, Con Edison’s New York State taxable income was higher than $5 million and it was subject to the higher 7.25 percent rate (9.425 percent with the surcharge rate) on its taxable income for tax year 2023, but is not expected to be subject to the higher rate in tax year 2024.

Results of Operations

Net income for common stock and earnings per share for the three months ended March 31, 2024 and 2023 were as follows:

			For the Three Months Ended March 31,
			2024			2023			2024			2023
(Millions of Dollars, except per share amounts)			Net Income for Common Stock						Earnings per Share
CECONY			$694			$604			$2.01			$1.71
O&R			37			31			0.11			0.09
Clean Energy Businesses (a) (d)			—			22			—			0.07
Con Edison Transmission			11			2			0.03			—
Other (b)			(22)			774			(0.07)			2.19
Con Edison (c)			$720			$1,433			$2.08			$4.06

(a)Net income for common stock and earnings per share from the Clean Energy Businesses for the three months ended March 31, 2023 includes $(9) million or $(0.03) a share net after-tax mark-to-market effects. Net income for common stock and earnings per share from the Clean Energy Businesses for the three months ended March 31, 2023 also includes $2 million or $0.01 a share (after-tax) net of the effects of HLBV accounting for tax equity investments in certain renewable electric projects. Depreciation and amortization expenses on their assets of $31 million or $0.09 a share (after-tax) were not recorded for the three months ended March 31, 2023.

(b) Other includes the parent company, Con Edison’s tax equity investments, the deferred project held for sale and consolidation adjustments. Net income for common stock and earnings per share for the three months ended March 31, 2024 includes $(22) million (after-tax) or $(0.07) a share (after-tax) for an adjustment related to the sale of the Clean Energy Businesses. See Note Q and Note R to the First Quarter Financial Statements.

Net income for common stock and earnings per share for the three months ended March 31, 2023 includes an immaterial amount or $0.00 a share net 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 months ended March 31, 2023 also includes an immaterial amount or $0.00 a share net of income tax impact on the effects of HLBV accounting for tax equity investments in certain renewable electric projects. Net income for common stock for the three months ended March 31, 2023 also includes $(9) million and $(0.02) a share of transaction costs and other accruals related to the sale of the Clean Energy Businesses (net of tax). Net income for common stock for the three months ended March 31, 2023 also includes the impact of the sale of the Clean Energy Businesses on the changes in state unitary tax apportionments (net of federal taxes) of $(16) million or $(0.05) per share. Depreciation and amortization expenses on the assets of the Clean Energy Businesses of $(3) million or $(0.01) a share (after-tax) were not recorded for the three months ended March 31, 2023. Net income for common stock and earnings per share for the three months ended March 31, 2023 includes $791 million (after-tax) or $2.24 a share (after-tax) for the gain on the sale of all of the stock of the Clean Energy Businesses. See Note Q and Note R to the First Quarter Financial Statements.

(c) Earnings per share on a diluted basis were $2.08 a share and $4.05 a share for the three months ended March 31, 2024 and 2023, respectively.

(d) On March 1, 2023, Con Edison completed the sale of all of the stock of the Clean Energy Businesses. See Note Q and Note R to the First 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 months ended March 31, 2024 as compared with the 2023 period.

Variation for the Three Months Ended March 31, 2024 vs. 2023
			Net Income for Common Stock (Net of Tax) (Millions of Dollars)			Earnings per Share
CECONY (a)
New steam rate plan effective November 2023			$47			$0.13
Higher gas rate base			27			0.08
Higher electric rate base			15			0.04
Accretive effect of share repurchase			—			0.04
Other			1			0.01
Total CECONY			90			0.30
O&R (a)
Electric base rate increase			7			0.02
Gas base rate increase			1			—
Other			(2)			—
Total O&R			6			0.02
Clean Energy Businesses (b)
Total Clean Energy Businesses			(22)			(0.07)
Con Edison Transmission
Higher investment income, primarily due to the recognition of allowance for funds used during construction from Mountain Valley Pipeline, LLC			8			0.02
Other			1			0.01
Total Con Edison Transmission			9			0.03
Other, including parent company expenses
Gain and other impacts related to the sale of the Clean Energy Businesses			(785)			(2.23)
Lower interest income			(8)			(0.02)
Other			(3)			(0.01)
Total Other, including parent company expenses			(796)			(2.26)
Total Reported (GAAP basis)			$(713)			$(1.98)
a.Under the revenue decoupling mechanisms in the Utilities’ New York electric and gas rate plans and the weather-normalization clause applicable to their gas businesses, revenues are generally not affected by changes in delivery volumes from levels assumed when rates were approved. Effective November 1, 2023, revenues from CECONY’s steam sales are also subject to a weather normalization clause, as a result of which, delivery revenues reflect normal weather conditions during the heating season. In general, the Utilities recover on a current basis the fuel, gas purchased for resale and purchased power costs they incur in supplying energy to their full-service customers. Accordingly, such costs do not generally affect Con Edison’s results of operations.
b. On March 1, 2023, Con Edison completed the sale of all of the stock of the Clean Energy Businesses.

The Companies’ other operations and maintenance expenses for the three months ended March 31, 2024 and 2023 were as follows:

			For the Three Months Ended March 31,
(Millions of Dollars)			2024			2023
CECONY
Operations			$488			$423
Pensions and other postretirement benefits			39			86
Health care and other benefits			40			37
Regulatory fees and assessments (a)			107			89
Other			115			115
Total CECONY			$789			$750
O&R			96			97
Clean Energy Businesses (b)			—			48
Con Edison Transmission			4			3
Other (c)			(1)			(2)
Total other operations and maintenance expenses			$888			$896

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

(b)On March 1, 2023, Con Edison completed the sale of all of the stock of the Clean Energy Businesses. See Note Q and Note R to the First Quarter Financial Statements.

(c)Other includes the parent company, Con Edison’s tax equity investments, the deferred project held for sale and consolidation adjustments. See Note R to the First Quarter Financial Statements.

A discussion of the results of operations by principal business segment for the three months ended March 31, 2024 and 2023 follows. For additional business segment financial information, see Note M to the First Quarter Financial Statements.

The Companies’ results of operations for the three months ended March 31, 2024 and 2023 were as follows:

			CECONY						O&R						Clean Energy Businesses (a)						Con Edison Transmission						Other (b)						Con Edison (c)
(Millions of Dollars)			2024			2023			2024			2023			2024			2023			2024			2023			2024			2023			2024			2023
Operating revenues			$3,971			$3,953			$308			$321			$—			$129			$1			$1			$—			$(1)			$4,280			$4,403
Purchased power			579			631			70			71			—			—			—			—			—			—			649			702
Fuel			88			189			—			—			—			—			—			—			—			—			88			189
Gas purchased for resale			235			365			32			63			—			41			—			—			—			(1)			267			468
Other operations and maintenance			789			750			96			97			—			48			4			3			(1)			(2)			888			896
Depreciation and amortization			510			473			29			25			—			—			—			—			—			1			539			499
Taxes, other than income taxes			781			736			25			24			—			4			—			—			2			1			808			765
Gain (loss) on sale of the Clean Energy Businesses			—			—			—			—			—			—			—			—			(30)			855			(30)			855
Operating income (loss)			989			809			56			41			—			36			(3)			(2)			(31)			855			1,011			1,739
Other income (deductions)			156			182			8			12			—			1			18			7			—			(6)			182			196
Net interest expense			270			233			14			13			—			15			—			2			5			(1)			289			262
Income (loss) before income tax expense			875			758			50			40			—			22			15			3			(36)			850			904			1,673
Income tax expense			181			154			13			9			—			3			4			1			(14)			76			184			243
Net income (loss)			$694			$604			$37			$31			$—			$19			$11			$2			$(22)			$774			$720			$1,430
Loss attributable to non-controlling interest			—			—			—			—			—			(3)			—			—			—			—			—			(3)
Net income (loss) for common stock			$694			$604			$37			$31			$—			$22			$11			$2			$(22)			$774			$720			$1,433

(a)On March 1, 2023, Con Edison completed the sale of all of the stock of the Clean Energy Businesses. See Note Q and Note R to the First Quarter Financial Statements.

(b)Other includes the parent company, Con Edison’s tax equity investments, the deferred project held for sale and consolidation adjustments. See Note R to the First Quarter Financial Statements.

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

CECONY

			For the Three Months Ended March 31, 2024												For the Three Months Ended March 31, 2023
(Millions of Dollars)			Electric			Gas			Steam			2024 Total			Electric			Gas			Steam			2023 Total			2024-2023 Variation
Operating revenues			$2,441			$1,243			$287			$3,971			$2,356			$1,291			$306			$3,953			$18
Purchased power			568			—			11			579			613			—			18			631			(52)
Fuel			58			—			30			88			79			—			110			189			(101)
Gas purchased for resale			—			235			—			235			—			365			—			365			(130)
Other operations and maintenance			612			128			49			789			568			125			57			750			39
Depreciation and amortization			370			114			26			510			343			105			25			473			37
Taxes, other than income taxes			593			151			37			781			559			137			40			736			45
Operating income			$240			$615			$134			$989			$194			$559			$56			$809			$180

Electric

CECONY’s results of electric operations for the three months ended March 31, 2024 compared with the 2023 period were as follows:

			For the Three Months Ended
(Millions of Dollars)			March 31, 2024			March 31, 2023			Variation
Operating revenues			$2,441			$2,356			$85
Purchased power			568			613			(45)
Fuel			58			79			(21)
Other operations and maintenance			612			568			44
Depreciation and amortization			370			343			27
Taxes, other than income taxes			593			559			34
Electric operating income			$240			$194			$46

CECONY’s electric sales and deliveries for the three months ended March 31, 2024 compared with the 2023 period were:

			Millions of kWh Delivered															Revenues in Millions (a)
			For the Three Months Ended															For the Three Months Ended
Description			March 31, 2024			March 31, 2023			Variation			Percent Variation						March 31, 2024			March 31, 2023			Variation			Percent Variation
Residential/Religious (b)			2,591			2,614			(23)			(0.9)		%				$965			$712			$253			35.5		%
Commercial/Industrial			2,672			2,787			(115)			(4.1)						737			676			61			9.0
Retail choice customers			4,768			4,805			(37)			(0.8)						542			463			79			17.1
NYPA, Municipal Agency and other sales			2,301			2,330			(29)			(1.2)						177			158			19			12.0
Other operating revenues (c)			—			—			—			—						20			347			(327)			(94.2)
Total			12,332			12,536			(204)			(1.6)		%	(d)			$2,441			$2,356			$85			3.6		%

(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 CECONY's rate plan.

(d)After adjusting for variations, primarily weather and billing days, electric delivery volumes in CECONY’s service area increased 1.1 percent in the three months ended March 31, 2024 compared with the 2023 period.

Operating revenues increased $85 million in the three months ended March 31, 2024 compared with the 2023 period primarily due to an increase in revenues from the electric rate plan ($142 million) and a change in incentives earned under the earnings adjustment mechanisms (EAMs) ($1 million), offset in part by lower purchased power expenses ($45 million) and lower fuel expenses ($21 million).

Purchased power expenses decreased $45 million in the three months ended March 31, 2024 compared with the 2023 period primarily due to lower unit costs ($68 million), offset in part by higher purchased volumes ($23 million).

Fuel expenses decreased $21 million in the three months ended March 31, 2024 compared with the 2023 period due to lower unit costs ($21 million).

Other operations and maintenance expenses increased $44 million in the three months ended March 31, 2024 compared with the 2023 period primarily due to increases in total surcharges for assessments and fees that are collected in revenues from customers ($13 million), electric operations maintenance activities ($10 million), municipal infrastructure support costs ($8 million), costs for injuries and damages ($3 million) and uncollectible expenses ($1 million).

Depreciation and amortization expenses increased $27 million in the three months ended March 31, 2024 compared with the 2023 period primarily due to higher electric utility plant balances.

Taxes, other than income taxes increased $34 million in the three months ended March 31, 2024 compared with the 2023 period due to higher property taxes ($31 million) and higher state and local revenue taxes ($7 million), offset in part by lower deferral of over-collected property taxes ($6 million).

Gas

CECONY’s results of gas operations for the three months ended March 31, 2024 compared with the 2023 period were as follows:

			For the Three Months Ended
(Millions of Dollars)			March 31, 2024			March 31, 2023			Variation
Operating revenues			$1,243			$1,291			$(48)
Gas purchased for resale			235			365			(130)
Other operations and maintenance			128			125			3
Depreciation and amortization			114			105			9
Taxes, other than income taxes			151			137			14
Gas operating income			$615			$559			$56

CECONY’s gas sales and deliveries, excluding off-system sales, for the three months ended March 31, 2024 compared with the 2023 period were:

			Thousands of Dt Delivered															Revenues in Millions (a)
			For the Three Months Ended															For the Three Months Ended
Description			March 31, 2024			March 31, 2023			Variation			Percent Variation						March 31, 2024			March 31, 2023			Variation			Percent Variation
Residential			20,652			22,508			(1,856)			(8.2)		%				$501			$558			$(57)			(10.2)		%
General			12,519			12,526			(7)			(0.1)						275			255			20			7.8
Firm transportation			29,498			31,657			(2,159)			(6.8)						405			403			2			0.5
Total firm sales and transportation			62,669			66,691			(4,022)			(6.0)		%	(b)			$1,181			$1,216			$(35)			(2.9)		%
Interruptible sales (c)			1,185			1,863			(678)			(36.4)						12			20			(8)			(40.0)
NYPA			12,991			9,973			3,018			30.3						1			1			—			—
Generation plants			12,949			11,781			1,168			9.9						5			8			(3)			(37.5)
Other			6,290			6,173			117			1.9						14			12			2			16.7
Other operating revenues (d)			—			—			—			—						30			34			(4)			(11.8)
Total			96,084			96,481			(397)			(0.4)		%				$1,243			$1,291			$(48)			(3.7)		%

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

(b)After adjusting for variations, primarily billing days, firm gas sales and transportation volumes in CECONY’s service area decreased 7.5 percent in the three months ended March 31, 2024 compared with the 2023 period.

(c)Includes 2,574 thousand and 654 thousand of Dt for the 2024 and 2023 periods, respectively, that are also reflected in firm transportation and other.

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

Operating revenues decreased $48 million in the three months ended March 31, 2024 compared with the 2023 period primarily due to lower gas purchased for resale ($130 million), offset in part by an increase in gas revenues under the company's gas rate plan ($88 million).

Gas purchased for resale decreased $130 million in the three months ended March 31, 2024 compared with the 2023 period due to lower unit costs ($148 million), offset in part by higher purchased volumes ($18 million).

Other operations and maintenance expenses increased $3 million in the three months ended March 31, 2024 compared with the 2023 period primarily due to higher gas operations costs ($6 million), offset in part by total sur-credits for assessments and fees that are collected in revenues from customers ($2 million).

Depreciation and amortization expenses increased $9 million in the three months ended March 31, 2024 compared with the 2023 period primarily due to higher gas utility plant balances.

Taxes, other than income taxes increased $14 million in the three months ended March 31, 2024 compared with the 2023 period primarily due to higher property taxes ($13 million) and lower deferral of under-collected property taxes ($6 million), offset in part by lower state and local revenue taxes ($6 million).

Steam

CECONY’s results of steam operations for the three months ended March 31, 2024 compared with the 2023 period were as follows:

			For the Three Months Ended
(Millions of Dollars)			March 31, 2024			March 31, 2023			Variation
Operating revenues			$287			$306			$(19)
Purchased power			11			18			(7)
Fuel			30			110			(80)
Other operations and maintenance			49			57			(8)
Depreciation and amortization			26			25			1
Taxes, other than income taxes			37			40			(3)
Steam operating income			$134			$56			$78

CECONY’s steam sales and deliveries for the three months ended March 31, 2024 compared with the 2023 period were:

			Millions of Pounds Delivered															Revenues in Millions
			For the Three Months Ended															For the Three Months Ended
Description			March 31, 2024			March 31, 2023			Variation			Percent Variation						March 31, 2024			March 31, 2023			Variation			Percent Variation
General			251			261			(10)			(3.8)		%				$17			$14			$3			21.4		%
Apartment house			2,105			2,012			93			4.6						78			80			(2)			(2.5)
Annual power			4,293			4,359			(66)			(1.5)						202			199			3			1.5
Other operating revenues (a)			—			—			—			—						(10)			13			(23)			Large
Total			6,649			6,632			17			0.3		%	(b)			$287			$306			$(19)			(6.2)		%

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

(b)After adjusting for variations, primarily weather prior to November 1, 2023, and billing days, steam sales and deliveries in the company's service area decreased 2.7 percent in the three months ended March 31, 2024 compared with the 2023 period.

Operating revenues decreased $19 million in the three months ended March 31, 2024 compared with the 2023 period primarily due to lower fuel expense ($80 million) and lower purchased power ($7 million), offset in part by the benefit from the new steam rate plan ($63 million) and tax law sur-credit ($5 million).

Purchased power expenses decreased $7 million in the three months ended March 31, 2024 compared with the 2023 period due to lower unit costs ($7 million).

Fuel expenses decreased $80 million in the three months ended March 31, 2024 compared with the 2023 period due to lower unit costs ($83 million), offset in part by higher purchased volumes from the company’s steam generating facilities ($3 million).

Other operations and maintenance expenses decreased $8 million in the three months ended March 31, 2024 compared with the 2023 period primarily due to lower costs for pension and other postretirement benefits, reflecting reconciliation to the rate plan level ($15 million), offset in part by higher steam operations maintenance activities ($5 million) and an increase in municipal infrastructure support ($1 million).

Taxes, other than income taxes decreased $3 million in the three months ended March 31, 2024 compared with the 2023 period primarily due to a lower deferral of over-collected property taxes ($6 million), offset in part by higher property taxes ($2 million).

Taxes, Other Than Income Taxes

At $781 million, taxes other than income taxes remain one of CECONY’s largest operating expenses for the three months ended March 31, 2024. The principal components of, and variations in, taxes other than income taxes were:

			For the Three Months Ended March 31,
(Millions of Dollars)			2024						2023						Variation
Property taxes			$649						$603						$46
State and local taxes related to revenue receipts			120						118						2
Payroll taxes			31						28						3
Other taxes			(19)						(13)						(6)
Total			$781			(a)			$736			(a)			$45

(a)Including sales tax on customers’ bills, total taxes other than income taxes in 2024 and 2023 were $978 million and $902 million, respectively.

Other Income (Deductions)

Other income decreased $26 million in the three months ended March 31, 2024 compared with the 2023 period primarily due to lower credits associated with components of pension and other postretirement benefits other than service cost ($40 million), offset in part by lower expenses resulting from investment performance in the deferred compensation plan ($7 million) and an increase in the allowance for funds used during construction ($4 million).

Net Interest Expense

Net interest expense increased $37 million in the three months ended March 31, 2024 compared with the 2023 period primarily due to higher interest on long-term debt ($26 million) and short-term debt ($5 million) and an increase in the carrying charges and interest on regulatory liability balances ($3 million).

Income Tax Expense

Income taxes increased $27 million in the three months ended March 31, 2024 compared with the 2023 period primarily due to higher income before income tax expense ($25 million), higher state income taxes ($6 million), and lower flow through tax benefits in 2024 for plant-related items ($4 million), offset in part by higher amortization of excess deferred federal income taxes ($7 million).

O&R

			For the Three Months Ended March 31, 2024									For the Three Months Ended March 31, 2023
(Millions of Dollars)			Electric			Gas			2024 Total			Electric			Gas			2023 Total			2024-2023 Variation
Operating revenues			$195			$113			$308			$182			$139			$321			$(13)
Purchased power			70			—			70			71			—			71			(1)
Gas purchased for resale			—			32			32			—			63			63			(31)
Other operations and maintenance			75			21			96			77			20			97			(1)
Depreciation and amortization			20			9			29			18			7			25			4
Taxes, other than income taxes			16			9			25			15			9			24			1
Operating income (loss)			$14			$42			$56			$1			$40			$41			$15

Electric

O&R’s results of electric operations for the three months ended March 31, 2024 compared with the 2023 period were as follows:

			For the Three Months Ended
(Millions of Dollars)			March 31, 2024			March 31, 2023			Variation
Operating revenues			$195			$182			$13
Purchased power			70			71			(1)
Other operations and maintenance			75			77			(2)
Depreciation and amortization			20			18			2
Taxes, other than income taxes			16			15			1
Electric operating income			$14			$1			$13

O&R’s electric sales and deliveries for the three months ended March 31, 2024 compared with the 2023 period were:

			Millions of kWh Delivered															Revenues in Millions (a)
			For the Three Months Ended															For the Three Months Ended
Description			March 31, 2024			March 31, 2023			Variation			Percent Variation						March 31, 2024			March 31, 2023			Variation			Percent Variation
Residential/Religious (b)			500			467			33			7.1		%				$107			$107			$—			—
Commercial/Industrial			238			262			(24)			(9.2)						40			41			(1)			(2.4)
Retail choice customers			582			495			87			17.6						42			30			12			40.0
Public authorities			27			27			—			—						3			3			—			—
Other operating revenues (c)			—			—			—			—						3			1			2			Large
Total			1,347			1,251			96			7.7		%	(d)			$195			$182			$13			7.1		%

(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. The majority of O&R’s electric distribution revenues in New Jersey are subject to a conservation incentive program, as a result of which distribution revenues are generally not affected by changes in delivery volumes from levels assumed when rates were approved. O&R’s electric transmission revenues in New Jersey are not subject to a conservation incentive program, and as a result, changes in such volumes do impact revenues.

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

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

(d)After adjusting for weather and other variations, electric delivery volumes in O&R’s service area increased 2.8 percent in the three months ended March 31, 2024 compared with the 2023 period.

Operating revenues increased $13 million in the three months ended March 31, 2024 compared with the 2023 period primarily due to higher revenues from the electric rate plans ($9 million), offset in part by lower purchased power expenses ($1 million).

Gas

O&R’s results of gas operations for the three months ended March 31, 2024 compared with the 2023 period were as follows:

			For the Three Months Ended
(Millions of Dollars)			March 31, 2024			March 31, 2023			Variation
Operating revenues			$113			$139			$(26)
Gas purchased for resale			32			63			(31)
Other operations and maintenance			21			20			1
Depreciation and amortization			9			7			2
Taxes, other than income taxes			9			9			—
Gas operating income			$42			$40			$2

O&R’s gas sales and deliveries, excluding off-system sales, for the three months ended March 31, 2024 compared with the 2023 period were:

			Thousands of Dt Delivered															Revenues in Millions (a)
			For the Three Months Ended															For the Three Months Ended
Description			March 31, 2024			March 31, 2023			Variation			Percent Variation						March 31, 2024			March 31, 2023			Variation			Percent Variation
Residential			5,974			5,208			766			14.7		%				$85			$100			$(15)			(15.0)		%
General			725			1,094			(369)			(33.7)						9			18			(9)			(50.0)
Firm transportation			2,370			2,180			190			8.7						17			17			—			—
Total firm sales and transportation			9,069			8,482			587			6.9		%	(b)			$111			$135			$(24)			(17.8)		%
Interruptible sales			747			957			(210)			(21.9)						2			2			—			—
Generation plants			2			1			1			Large						—			—			—			—
Other			32			294			(262)			(89.1)						—			—			—			—
Other gas revenues			—			—			—			—						—			2			(2)			Large
Total			9,850			9,734			116			1.2		%				$113			$139			$(26)			(18.7)		%

(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, firm sales and transportation volumes in O&R's service area decreased 3.2 percent in the three months ended March 31, 2024 compared with the 2023 period.

Operating revenues decreased $26 million in the three months ended March 31, 2024 compared with the 2023 period primarily due to lower gas purchased for resale ($31 million), offset in part by higher revenues from the New York gas rate plan ($2 million) and a change in incentives earned under the earnings adjustment mechanisms (EAMs) ($1 million).

Gas purchased for resale decreased $31 million in the three months ended March 31, 2024 compared with the 2023 period due to lower unit costs ($36 million), offset in part by higher purchased volumes ($5 million).

Taxes, Other Than Income Taxes

Taxes, other than income taxes, remained consistent in 2024 compared with 2023 for the three months ended March 31, 2024. The principal components of taxes, other than income taxes, were:

			For the Three Months Ended March 31,
(Millions of Dollars)			2024						2023						Variation
Property taxes			$18						$18						$—
State and local taxes related to revenue receipts			4						3						1
Payroll taxes			3						3						—
Total			$25			(a)			$24			(a)			$1

(a)Including sales tax on customers’ bills, total taxes other than income taxes in 2024 and 2023 were $33 million.

Other Income (Deductions)

Other income decreased $4 million in the three months ended March 31, 2024 compared with the 2023 period primarily due to lower credits associated with components of pension and other postretirement benefits other than service cost ($4 million).

Income Tax Expense

Income taxes increased $4 million in the three months ended March 31, 2024 compared with the 2023 period primarily due to higher income before income tax expense ($2 million) and higher state income taxes ($1 million).

Con Edison Transmission

Other Income (Deductions)

Other income increased $11 million in the three months ended March 31, 2024 compared with the 2023 period primarily due to Con Edison Transmission's recognition of its proportionate share of allowance for funds used during construction for MVP ($10 million).

Income Tax Expense

Income taxes increased $3 million in the three months ended March 31, 2024 compared with the 2023 period primarily due to higher income before income tax expense.

Other

Income Tax Expense

Income taxes decreased $90 million in the three months ended March 31, 2024 compared with the 2023 period primarily due to lower income before income tax expense due to the sale of the Clean Energy Businesses in the 2023 period ($211 million) and a lower unitary state tax adjustment, net of federal benefit ($17 million), offset in part by the recognition of unamortized investment tax credits ($106 million) and higher state taxes due to a change in state apportionments, net of federal income taxes ($36 million), both related to the sale of the Clean Energy Businesses in 2023 and an increase in renewable energy tax credits ($1 million).

Clean Energy Businesses

On March 1, 2023, Con Edison completed the sale of all of the stock of the Clean Energy Businesses. See Note Q and Note R to the First Quarter Financial Statements. The Clean Energy Businesses’ results of operations for the three months ended March 31, 2024 compared with the 2023 period were as follows:

			For the Three Months Ended
(Millions of Dollars)			March 31, 2024			March 31, 2023			Variation
Operating revenues			$—			$129			$(129)
Gas purchased for resale			—			41			(41)
Other operations and maintenance			—			48			(48)
Taxes, other than income taxes			—			4			(4)
Operating income			$—			$36			$(36)

Liquidity and Capital Resources

The Companies monitor the financial markets closely, including borrowing rates and daily cash collections. Increases in aged accounts receivable balances, inflationary pressure and higher interest rates have increased the amount of capital needed by the Utilities and the costs of such capital. See "Interest Rate Risk," below, "Aged Accounts Receivable Balances," above and "Capital Requirements and Resources," below.

Con Edison and the Utilities have a $2,500 million revolving credit agreement (the Credit Agreement) in place under which banks are committed to provide loans on a revolving credit basis until March 2029, unless extended for an additional one-year term, subject to certain conditions. CECONY has a $500 million 364-day revolving credit agreement (the CECONY Credit Agreement) in place under which banks are committed to provide loans on a revolving credit basis until March 2025, subject to certain conditions. Con Edison and the Utilities have not entered into any loans under the Credit Agreement and CECONY has not entered into any loans under the CECONY Credit Agreement. See Note D to the First Quarter Financial Statements.

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

The Companies’ cash, temporary cash investments and restricted cash resulting from operating, investing and financing activities for the three months ended March 31, 2024 and 2023 are summarized as follows:

			For the Three Months Ended March 31,
			CECONY						O&R						Clean Energy Businesses (d)						Con Edison Transmission						Other (a)(b)						Con Edison (c)
(Millions of Dollars)			2024			2023			2024			2023			2024			2023			2024			2023			2024			2023			2024			2023
Operating activities			$522			$45			$45			$44			$—			$—			$(4)			$(152)			$10			$155			$573			$92
Investing activities			(1,266)			(1,077)			(78)			(68)			—			(248)			—			(26)			—			4,037			(1,344)			2,618
Financing activities			(290)			12			45			21			—			—			(1)			189			(3)			(3,688)			(249)			(3,466)
Net change for the period			(1,034)			(1,020)			12			(3)			—			(248)			(5)			11			7			504			(1,020)			(756)
Balance at beginning of period			1,138			1,056			23			35			—			248			25			—			9			191			1,195			1,530
Balance at end of period (c)			$104			$36			$35			$32			$—			$—			$20			$11			$16			$695			$175			$774
Less: Cash balances held for sale (d)			—			—			—			—			—			—			—			—			6			3			6			3
Balance at end of period excluding held for sale			$104			$36			$35			$32			$—			$—			$20			$11			$10			$692			$169			$771

(a) Other includes the parent company, Con Edison’s tax equity investments, the deferred project held for sale and consolidation adjustments. See Note R to the First Quarter Financial Statements.

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

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

(d) On March 1, 2023, Con Edison completed the sale of all of the stock of the Clean Energy Businesses. See Note Q and Note R to the First 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.

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 Note J to the First Quarter Financial Statements.

In general, the Utilities suspended service disconnections during the COVID-19 pandemic. The Utilities’ rate plans

include reconciliation of late payment charges and write-offs of customer accounts receivable balances to amounts

reflected in rates, with recovery/refund from or to customers via surcharge/sur-credit. Although these regulatory

mechanisms are in place, a continued slower recovery in cash of outstanding customer accounts receivable

balances has impacted the Companies’ liquidity and may continue to impact liquidity. See “Aged Accounts

Receivable Balances,” above.

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

Net cash flows from operating activities for the three months ended March 31, 2024 for Con Edison were $481 million higher than in the 2023 period. The change in net cash flows for Con Edison primarily reflects:

• lower net deferred charges, noncurrent assets, leases and other regulatory assets balances ($465 million);

• an increase in accounts payable ($365 million);

• higher accrued interest ($31 million); and

• a decrease in prepayments ($10 million); offset in part by

• a lower increase of accounts receivable balances from customers net of allowance for uncollectible accounts ($322 million) (see "Aged Accounts Receivable Balances,” above);

• a increase in the revenue decoupling mechanism receivable ($103 million).

Net cash flows from operating activities for the three months ended March 31, 2024 for CECONY were $477 million higher than in the 2023 period. The changes in net cash flows for CECONY primarily reflects:

• lower net deferred charges, noncurrent assets, leases and other regulatory assets balances ($457 million); and

• an increase in accounts payable ($192 million); offset in part by

• a increase in the revenue decoupling mechanism receivable ($112 million); and

• a decrease in the pension and retiree benefits obligations, net ($50 million).

Cash Flows From (Used in) Investing Activities

Net cash flows from investing activities for Con Edison were $3,962 million lower for the three months ended March 31, 2024 compared with the 2023 period. The change for Con Edison primarily reflects:

• the proceeds from the sale of all of the stock of the Clean Energy Businesses, net of cash and cash equivalents sold in the prior year ($3,927 million);

• an increase in utility construction expenditures ($187 million); and

• higher cost of removal less salvage ($13 million); offset in part by

• a decrease in non-utility construction expenditures ($140 million).

Net cash flows used in investing activities for CECONY were $189 million higher for the three months ended March 31, 2024 compared with the 2023 period. The change for CECONY primarily reflects:

• an increase in utility construction expenditures ($175 million); and

• higher cost of removal less salvage ($14 million).

Pursuant to their rate plans, the Utilities recover the cost of utility construction expenditures from customers, including an approved rate of return (before and after being placed in service and an allowance for funds used during construction (AFUDC) before being placed in service). Increases in the amount of utility construction expenditures may temporarily increase the amount of short-term debt issued by the Utilities prior to the long-term financing of such amounts.

Cash Flows From (Used In) Financing Activities

Net cash flows used in financing activities for Con Edison were $3,217 million lower for the three months ended March 31, 2024 compared with the 2023 period. Net cash flows from financing activities for CECONY were $302 million lower for the three months ended March 31, 2024 compared with the 2023 period.

In the three months ended March 31, 2024 and 2023, Con Edison contributed $25 million and $1,675 million of equity, respectively, to CECONY.

Con Edison’s cash flows from financing activities for the three months ended March 31, 2024 also reflect a net issuance of short-term debt of $11 million compared with payments of $2,629 million in the 2023 period.

In March 2023, Con Edison entered into accelerated share repurchase agreements with two dealers to repurchase $1,000 million in aggregate of Con Edison’s Common Shares. Con Edison made payments of $1,000 million in aggregate to the dealers and received deliveries of 10,543,263 Common Shares in aggregate. The settlement of the accelerated share repurchase agreements occurred in the second quarter of 2023.

CECONY’s cash flows from financing activities for the three months ended March 31, 2024 also reflect payments of short-term debt of $46 million compared to $1,895 million in the 2023 period.

In February 2023, CECONY issued $500 million aggregate principal amount of 5.20 percent debentures, due 2033, the net proceeds from the sale of which were used to repay short-term borrowings and for other general corporate purposes.

Cash flows from financing activities of the Companies also reflect commercial paper issuances and repayments. The commercial paper amounts outstanding at March 31, 2024 and 2023 and the average daily balances for the three months ended March 31, 2024 and 2023 for Con Edison and CECONY were as follows:

			2024						2023
(Millions of Dollars, except Weighted Average Yield)			Outstanding at March 31,			Daily average			Outstanding at March 31,			Daily average
Con Edison			$2,299			$2,266			$411			$1,858
CECONY			$1,857			$1,854			$405			$1,773
Weighted average yield			5.5		%	5.6		%	5.4		%	4.8		%

Capital Resources

Capital Resources

For each of the Companies, the common equity ratio at March 31, 2024 and December 31, 2023 was:

			Common Equity Ratio (Percent of total capitalization)
			March 31, 2024			December 31, 2023
Con Edison			49.6			49.1
CECONY			48.5			47.9

Assets, Liabilities and Equity

The Companies' assets, liabilities, and equity at March 31, 2024 and December 31, 2023 are summarized as follows.

			CECONY						O&R						Con Edison Transmission						Other (a)						Con Edison (b)
(Millions of Dollars)			2024			2023			2024			2023			2024			2023			2024			2023			2024			2023
ASSETS
Current assets			$5,624			$5,981			$337			$302			$24			$25			$181			$229			$6,166			$6,537
Investments			633			608			23			22			383			365			2			4			1,041			999
Net plant			46,851			46,648			2,986			2,943			17			17			—			—			49,854			49,608
Other noncurrent assets			8,796			8,363			401			408			7			7			415			409			9,619			9,187
Total Assets			$61,904			$61,600			$3,747			$3,675			$431			$414			$598			$642			$66,680			$66,331
LIABILITIES AND SHAREHOLDERS' EQUITY
Current liabilities			$5,418			$5,694			$395			$349			$6			$5			$425			$414			$6,244			$6,462
Noncurrent liabilities			16,077			15,950			1,136			1,146			(71)			(76)			(250)			(236)			16,892			16,784
Long-term debt			20,812			20,810			1,118			1,118			—			—			(1)			(1)			21,929			21,927
Equity			19,597			19,146			1,098			1,062			496			485			424			465			21,615			21,158
Total Liabilities and Equity			$61,904			$61,600			$3,747			$3,675			$431			$414			$598			$642			$66,680			$66,331

(a) Other includes the parent company, Con Edison’s tax equity investments, the deferred project held for sale and consolidation adjustments. See Note R to the First Quarter Financial Statements.

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

CECONY

Current assets at March 31, 2024 were $357 million lower than at December 31, 2023. The change in current assets primarily reflects a decrease in cash and temporary cash investments ($1,034 million) and a decrease in fuel oil, gas in storage, materials and supplies, at average cost ($22 million), offset in part by an increase in prepayments ($546 million) and in accounts receivables, net of allowance for uncollectible accounts ($180 million) (see "Aged Accounts Receivable Balances,” above).

Net plant at March 31, 2024 was $203 million higher than at December 31, 2023. The change in net plant primarily reflects an increase in electric ($677 million), gas ($158 million) and steam ($24 million) plant balances, an increase in construction work in progress ($43 million), offset in part by an increase in accumulated depreciation ($600 million) and a decrease in the general ($98 million) plant balance.

Other noncurrent assets at March 31, 2024 were $433 million higher than at December 31, 2023. The change in other noncurrent assets primarily reflects an increase in the regulatory asset for legacy meters ($420 million). See Note B to the First Quarter Financial Statements.

Current liabilities at March 31, 2024 were $276 million lower than at December 31, 2023. The change in current liabilities primarily reflects a decrease in accounts payable ($324 million) and a decrease in the fair value of derivative liabilities ($76 million), offset in part by an increase in accrued interest ($124 million).

Other noncurrent liabilities at March 31, 2024 were $127 million higher than at December 31, 2023. The change in other noncurrent assets primarily reflects an increase in the deferred income taxes and unamortized investment tax credits ($265 million) and an increase in the pensions and retiree benefits ($39 million). The increase is offset in part by a decrease in the unrecognized pension and other postretirement costs ($117 million) and a decrease in future income tax ($65 million). See Note B to the First Quarter Financial Statements.

Equity at March 31, 2024 was $451 million higher than at December 31, 2023. The change in equity primarily reflects net income for the three months ended March 31, 2024 ($694 million) and capital contributions from Con Edison ($25 million) in 2024, offset in part by common stock dividends to Con Edison ($268 million) in 2024.

O&R

Current assets at March 31, 2024 were $35 million higher than at December 31, 2023. The change in current assets primarily reflects an increase in accounts receivable, net of allowance for uncollectible accounts ($21 million) (see "Aged Accounts Receivable Balances,” above), an increase in accrued unbilled revenue ($14 million), and an increase in cash and temporary cash investments ($13 million), offset in part by a decrease in the revenue decoupling mechanism receivable ($9 million).

Net plant at March 31, 2024 was $43 million higher than at December 31, 2023. The change in net plant primarily reflects an increase in electric ($23 million), gas ($25 million) and general ($19 million) plant balances, offset in part by an increase in accumulated depreciation ($20 million) and a decrease in construction work in progress ($4 million).

Current liabilities at March 31, 2024 were $46 million higher than at December 31, 2023. The change in current liabilities primarily reflects an increase in notes payable ($42 million), an increase in the regulatory liabilities ($10 million) and an increase in accrued interest ($4 million), offset in part by a decrease in accounts payable ($12 million).

Equity at March 31, 2024 was $36 million higher than at December 31, 2023. The change in equity primarily reflects capital contributions from Con Edison ($20 million) in 2024, net income for the three months ended March 31, 2024 ($37 million), offset in part by common stock dividends to Con Edison ($17 million) in 2024 and a decrease in other comprehensive income ($6 million).

Con Edison Transmission

Investments at March 31, 2024 were $18 million higher than at December 31, 2023. The increase in investments reflects investment income from MVP ($10 million) and New York Transco ($8 million).

Equity at March 31, 2024 was $11 million higher than at December 31, 2023. The change in equity primarily reflects an increase in retained earnings ($10 million).

Environmental Matters

Clean Energy Future

New York State’s Climate Leadership and Community Protection Act

In March 2024, O&R filed a petition with FERC to add a formula rate to the NYISO tariff to enable O&R to recover the costs of, and a return on investment for, two types of projects: (1) local transmission upgrades determined by the NYSPSC to be necessary or appropriate to meet the CLCPA goals of New York State and eligible for recovery under the FERC-approved cost sharing recovery agreement that socializes the costs statewide and (2) any regulated transmission projects (or portions thereof) eligible for recovery under the NYISO’s public policy transmission planning process. For local transmission upgrades, O&R proposed the return on equity to be the lower of the NYSPSC-determined rates or 11.20 percent. For NYISO projects, O&R proposed a return on equity of 11.20 percent.

Offshore Wind

In February 2024, NYSERDA announced that it selected two offshore wind projects for contract negotiations representing 1,734 MW of energy by 2026. One of the conditional awards, Empire Wind 1, is expected to connect 810 MW of offshore wind electricity to the New York City electrical grid at CECONY’s Gowanus substation. In March 2024, FERC approved the interconnection agreement among Empire Offshore Wind, LLC, the NYISO, and CECONY.

Thermal Energy Networks

In April 2024, the NYSDPS approved CECONY’s and O&R’s December 2023 Stage 1 filings (Project Scope, Feasibility, and Stakeholder Engagement) related to utility-scale thermal energy network pilot projects. The NYSDPS also confirmed CECONY and O&R are authorized to incur costs of $17.1 million and $4.6 million, respectively, through the completion of Stage 2 (Pilot Project Engineering Design and Customer Protection Plan).

These projected costs are within the budgets proposed by CECONY and O&R of $255 million and $46 million, respectively. The remaining proposed budget amounts are subject to approval by the NYSPSC.

Superfund

Certain federal agencies and the NYSDEC have previously notified potentially responsible parties, including CECONY, of their intent to perform a natural resource damage assessment for the Gowanus Canal Superfund Site. In March 2024, CECONY received a notice that the U.S. Fish and Wildlife Service, the NYSDEC, and the National Oceanic and Atmospheric Administration (collectively, the “Trustees”) published a Draft Natural Resource Assessment Plan that is subject to public comments through June 2024. The Trustees are conducting a natural resource damage assessment to determine, among other things, the appropriate amount and type of projects needed to restore, replace, or acquire the equivalent of injured natural resources at the Gowanus Canal Superfund Site. CECONY is unable to estimate its exposure to liability for the Gowanus Canal Superfund Site.

Other Environmental Matters

In April 2024, a CECONY feeder leak in the Bronx resulted in a release of approximately one thousand gallons of dielectric fluid (a non-toxic synthetic compound similar to mineral oil), a portion of which migrated to a nearby sewer system and a sheen was seen in the Bronx River. CECONY stopped the feeder leak and began the cleanup on the same day the discharge occurred. CECONY, with assistance from the NYSDEC, also placed booms in the Bronx River at various locations to address any fluid that potentially made it to the river through the sewer system. CECONY is continuing to address the remaining sheen on the river, and also voluntarily cleaned up a significant amount of debris and trash in the area of the oil sheen. In April 2024, CECONY also discovered the presence of oil in the Hudson River within the permanent containment boom surrounding Pier 98 that likely originated from an internal leak of approximately 4,400 gallons of oil at CECONY’s steam generating plant on 59th Street in Manhattan. CECONY immediately installed an additional containment boom and an absorbent boom in the Hudson River and has estimated that 72 gallons of oil was released to the river. The U.S. Coast Guard, the New York City Department of Environmental Protection, and the NYSDEC have been notified and continue to oversee the clean-up operations. The costs associated with these matters are not expected to have a material adverse effect on CECONY’s financial condition, results of operations or liquidity. In connection with the incidents, CECONY may incur monetary sanctions from government agencies of more than $0.3 million for violations of certain provisions regulating the discharge of materials into, and for the protection of, the environment.

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

Con Edison Transmission

Con Edison Transmission owns a 45.7 percent interest in New York Transco that is comprised of: a 45.7 percent interest in New York Transco's Transmission Owner Transmission Solutions (TOTS) projects; a 45.7 percent interest in New York Transco’s New York Energy Solution (NYES) project; and a 41.7 percent interest in New York Transco’s share of the Propel NY Energy project. Con Edison Transmission also owns a 71.2 percent interest in Honeoye Storage Corporation (Honeoye) and a 7.2 percent interest in Mountain Valley Pipeline, LLC (MVP) that is expected to be reduced to approximately 6.75 percent as described below.

MVP is a joint venture among five partners, including Con Edison Transmission, to construct and operate the Mountain Valley Pipeline, a proposed 300-mile gas transmission project in West Virginia and Virginia. Con Edison Transmission owns a 7.2 percent interest in MVP that is expected to be reduced to approximately 6.75 percent based on Con Edison Transmission's previous capping of its cash contributions to the joint venture. In June 2023, construction activities for the Mountain Valley Pipeline resumed after resolution of certain legal challenges. In April 2024, the operator of the Mountain Valley Pipeline announced that it expects to complete construction on or about May 31, 2024, with long-term firm capacity obligations to begin on the first day of month immediately following

the date MVP receives FERC authorization to commence service. The operator also announced it is targeting a

total project cost of approximately $7,850 million (including contingency and excluding allowance for funds used during construction). At March 31, 2024, Con Edison Transmission’s carrying value of its investment in MVP was $153 million and its cash contributions to the joint venture amounted to $530 million. See "Investments - Investment in Mountain Valley Pipeline, LLC (MVP)" in Note A.

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. Con Edison and CECONY estimate that at March 31, 2024, a 10 percent increase in interest rates applicable to its variable rate debt would result in an increase in annual interest expense of $14 million and $12 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.

Higher interest rates have resulted in increased interest expense on commercial paper, variable-rate debt and long-term debt issuances.

Commodity Price Risk

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

Con Edison estimates that, as of March 31, 2024, a 10 percent decline in market prices would result in a decline in fair value of $147 million for the derivative instruments used by the Utilities to hedge purchases of electricity and gas, of which $135 million is for CECONY and $12 million is for O&R. As of March 31, 2023, Con Edison estimated that a 10 percent decline in market prices would result in a decline in fair value of $159 million for the derivative instruments used by the Utilities to hedge purchases of electricity and gas, of which $149 million is for CECONY and $10 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.

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 First Quarter Financial Statements.

The Companies’ current investment policy for pension plan assets includes investment targets of 26 to 30 percent equity securities, 42 to 60 percent debt securities and 14 to 30 percent alternatives. At March 31, 2024, the pension plan investments consisted of 27 percent equity securities, 50 percent debt securities and 23 percent alternatives.

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

Material Contingencies

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