0001047862ed:ConsolidatedEdisonCompanyofNewYorkInc.Membered:DerivativeFinancialInstrumentsCurrentLiabilitiesMembersrt:SubsidiariesMember2021-09-30
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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-Q
x☒Quarterly Report Pursuant To Section 13 or 15(d) of the Securities Exchange Act of 1934
FOR THE QUARTERLY PERIOD ENDED SEPTEMBERSeptember 30, 20172021
OR
¨☐Transition Report Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934
For the transition period from to
Commission

File Number
Exact name of registrant as specified in its charter

and principal executive office address and telephone number
State of

Incorporation
I.R.S. Employer

ID. Number
1-14514Consolidated Edison, Inc.New York13-3965100
4 Irving Place,New York,New York 1000310003
(212) 460-4600460-4600
1-1217Consolidated Edison Company of New York, Inc.New York13-5009340
4 Irving Place,New York,New York10003
(212)460-4600

Securities Registered Pursuant to Section 12(b) of the Act:
Title of each classTrading SymbolName of each exchange on which registered
Consolidated Edison, Inc.,EDNew York New York 10003Stock Exchange
Common Shares ($.10 par value)(212) 460-4600

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.
Consolidated Edison, Inc. (Con Edison)Yes☒
Yesx
No¨☐
Consolidated Edison Company of New York, Inc. (CECONY)Yes☒
Yesx
No¨☐
Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files).
Con EdisonYes☒
Yesx
No¨☐
CECONYYes☒
Yesx
No¨☐
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer”, “accelerated filer,” “smaller reporting company,” and "emerging growth company" in Rule 12b-2 of the Exchange Act.
Con Edison
Large accelerated filer☒
Accelerated filer☐

Non-accelerated filer☐
Smaller reporting company☐Emerging growth company☐
CECONY
Large accelerated filerx
☐
Accelerated filer¨☐
Non-accelerated filer¨☒
Smaller reporting company¨
☐
Emerging growth company¨
CECONY
Large accelerated filer¨
☐
Accelerated filer¨
Non-accelerated filer x
Smaller reporting company¨
Emerging growth company ¨


1


If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ¨
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).
Con Edison
Yes¨
☐
Nox☒
CECONY
Yes¨
☐
Nox☒




As of October 31, 2017,2021, Con Edison had outstanding 310,068,797353,748,736 Common Shares ($.10 par value). All of the outstanding common equity of CECONY is held by Con Edison.




Filing Format
This Quarterly Report on Form 10-Q is a combined report being filed separately by two different registrants: Consolidated Edison, Inc. (Con Edison) and Consolidated Edison Company of New York, Inc. (CECONY). CECONY is a wholly-owned subsidiary of Con Edison and, as such, the information in this report about CECONY also applies to Con Edison. As used in this report, the term the “Companies” refers to Con Edison and CECONY. However, CECONY makes no representation as to the information contained in this report relating to Con Edison or the subsidiaries of Con Edison other than itself.




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Glossary of Terms
 
The following is a glossary of abbreviations or acronyms that are used in the Companies’ SEC reports:
 
Con Edison Companies
Con EdisonConsolidated Edison, Inc.
CECONYConsolidated Edison Company of New York, Inc.
Clean Energy BusinessesCon Edison Clean Energy Businesses, Inc., together with its subsidiaries
Con Edison DevelopmentConsolidated Edison Development, Inc.
Con Edison EnergyConsolidated Edison Energy, Inc.
Con Edison SolutionsConsolidated Edison Solutions, Inc.
Con Edison TransmissionCon Edison Transmission, Inc., together with its subsidiaries
CET ElectricConsolidated Edison Transmission, LLC
CET GasCon Edison Gas Pipeline and Storage, LLC
O&ROrange and Rockland Utilities, Inc.
RECORockland Electric Company
The CompaniesCon Edison and CECONY
The UtilitiesCECONY and O&R
Regulatory Agencies, Government Agencies and Other Organizations
EPACPUCCalifornia Public Utilities Commission
EPAU.S. Environmental Protection Agency
FASBFinancial Accounting Standards Board
FERCFederal Energy Regulatory Commission
IASBInternational Accounting Standards Board
IRSInternal Revenue Service
NJBPUNERCNorth American Electric Reliability Corporation
NJBPUNew Jersey Board of Public Utilities
NJDEPNew Jersey Department of Environmental Protection
NYISONew York Independent System Operator
NYPANew York Power Authority
NYSDECNew York State Department of Environmental Conservation
NYSERDANYSDPSNew York State Department of Public Service
NYSERDANew York State Energy Research and Development Authority
NYSPSCNew York State Public Service Commission
NYSRCNew York State Reliability Council, LLC
PJMPHMSAU.S. Department of Transportation’s Pipeline and Hazardous Materials Safety Administration
PJMPJM Interconnection LLC
SECU.S. Securities and Exchange Commission
Accounting
AFUDCAllowance for funds used during constructionFunds Used During Construction
ASUAccounting Standards Update
GAAPGenerally Accepted Accounting Principles in the United States of America
OCIHLBVHypothetical Liquidation at Book Value
NOLNet Operating Loss
OCIOther Comprehensive Income
VIEVariable Interest Entity


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Environmental
CO2EnvironmentalCarbon dioxide
GHGCO2Greenhouse gasesCarbon dioxide
GHGGreenhouse gases
MGP SitesManufactured gas plant sites
PCBsPolychlorinated biphenyls
PRPPotentially responsible party
RGGIRegional Greenhouse Gas Initiative
SuperfundFederal Comprehensive Environmental Response, Compensation and Liability Act of 1980 and similar state statutes
Units of Measure
ACAlternating current
BcfBillion cubic feet
DtDekatherms
kVKilovolt
kWhKilowatt-hour
MDtThousand dekatherms
MMlbMillion pounds
MVAMegavolt ampere
MWMegawatt or thousand kilowatts
MWhMegawatt hour
Other
AMIAdvanced metering infrastructure
COSOCARES ActCoronavirus Aid, Relief, and Economic Security Act, as enacted on March 27, 2020
COSOCommittee of Sponsoring Organizations of the Treadway Commission
DERCOVID-19Coronavirus Disease 2019
DERDistributed energy resources
EGWPFitchEmployer Group Waiver PlanFitch Ratings
FitchFitch Ratings
First Quarter Form 10-QThe Companies' combined Quarterly Report on Form 10-Q for the quarterly period ended March 31 of the current year
Second Quarter Form 10-QThe Companies' combined Quarterly Report on Form 10-Q for the quarterly period ended June 30 of the current year
Third Quarter Form 10-QThe Companies' combined Quarterly Report on Form 10-Q for the quarterly period ended September 30 of the current year
Form 10-KThe Companies’ combined Annual Report on Form 10-K for the year ended December 31, 20162020
LTIPLong Term Incentive Plan
Moody’sMoody’s Investors Service, Inc.
REVReforming the Energy Vision
S&PS&P Global Ratings
VaRTCJAThe federal Tax Cuts and Jobs Act of 2017, as enacted on December 22, 2017
VaRValue-at-Risk






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TABLE OF CONTENTS
 
PAGE
ITEM 1Financial Statements (Unaudited)
Con Edison
Consolidated Income Statement
7
Consolidated Statement of Comprehensive Income
8
Consolidated Statement of Cash Flows
9
Consolidated Balance Sheet
10
Consolidated Statement of Equity
12
CECONY
Consolidated Income Statement
1314
Consolidated Statement of Comprehensive Income
1415
Consolidated Statement of Cash Flows
1516
Consolidated Balance Sheet
1617
Consolidated Statement of Shareholder’s Equity
1819
1920
ITEM 2
3955
ITEM 3
6994
ITEM 4
6994
7095
ITEM 1
7095
ITEM 1A
7095
ITEM 6
7095
7196
 



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FORWARD-LOOKING STATEMENTS
 
This report includescontains forward-looking statements that are intended to qualify for the safe-harbor provisions of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. Forward-looking statements are statements of future expectation and not facts. Words such as “forecasts,” “expects,” “estimates,” “anticipates,” “intends,” “believes,” “plans,” “will”“will,” "target," "guidance" and similar expressions identify forward-looking statements. Forward-lookingThe forward-looking statements are based onreflect information available and assumptions at the time the statements are made, and accordingly speak only as of that time. Actual results or developments might differ materially from those included in the forward-looking statements because of various factors including, but not limited to:
•the Companies are extensively regulated and are subject to penalties;
•the Utilities’ rate plans may not provide a reasonable return;
•the Companies may be adversely affected by changes to the Utilities’ rate plans;
the intentional misconduct of employees or contractors could adversely affect the Companies;
•the failure of, or damage to, the Companies’ facilities could adversely affect the Companies;
•a cyber attack could adversely affect the Companies;
•the failure of processes and systems and the performance of employees and contractors could adversely affect the Companies;
•the Companies are exposed to risks from the environmental consequences of their operations;operations, including increased costs related to climate change;
•a disruption in the wholesale energy markets or failure by an energy supplier or customer could adversely affect the Companies;
•the Companies have substantial unfunded pension and other postretirement benefit liabilities;
•Con Edison’s ability to pay dividends or interest depends on dividends from its subsidiaries;
•the Companies require access to capital markets to satisfy funding requirements;
•changes to tax laws could adversely affect the Companies;
•the Companies’ strategies may not be effective to address changes in the external business environment;
•the Companies face risks related to health epidemics and other outbreaks, including the COVID-19 pandemic; and
•the Companies also face other risks that are beyond their control.control, including inflation and supply chain disruptions.

The Companies assume no obligation to update or revise any forward-looking statements, whether as a result of new information, future events or otherwise, except as required by law.








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ConsolidatedEdison, Inc.
CONSOLIDATED INCOME STATEMENT (UNAUDITED)
For the Three Months Ended September 30,For the Nine Months Ended September 30,
For the Three Months Ended September 30,For the Nine Months Ended September 30,
2017
201620172016
(Millions of Dollars/ Except Per Share Data)
(Millions of Dollars/Except Share Data)(Millions of Dollars/Except Share Data)2021202020212020
OPERATING REVENUES  OPERATING REVENUES
Electric$2,675$2,769$6,573$6,717Electric$2,952$2,770$7,180$6,660
Gas2962351,5931,246Gas3412891,9071,673
Steam6263448406Steam5551393385
Non-utility178350458999Non-utility265223781568
TOTAL OPERATING REVENUES3,2113,4179,0729,368TOTAL OPERATING REVENUES3,6133,33310,2619,286
OPERATING EXPENSES  OPERATING EXPENSES
Purchased power4607981,2532,047Purchased power5485031,4481,192
Fuel3029169133Fuel4424166124
Gas purchased for resale11581584320Gas purchased for resale8355461364
Other operations and maintenance8528402,4062,447Other operations and maintenance8497362,4432,116
Depreciation and amortization337305998905Depreciation and amortization5124821,5111,428
Taxes, other than income taxes5445281,5971,523Taxes, other than income taxes7276732,1031,915
TOTAL OPERATING EXPENSES2,3382,5817,0077,375TOTAL OPERATING EXPENSES2,7632,4738,1327,139
Gain on sale of retail electric supply business and solar electric production project—
1041104
OPERATING INCOME8739402,0662,097OPERATING INCOME8508602,1292,147
OTHER INCOME (DEDUCTIONS)  OTHER INCOME (DEDUCTIONS)
Investment income20205927
Investment income (loss)Investment income (loss)527(180)78
Other income203143Other income581915
Allowance for equity funds used during construction3387Allowance for equity funds used during construction521512
Other deductions(4)(5)(12)(16)Other deductions(37)(50)(113)(177)
TOTAL OTHER INCOME39499861
TOTAL OTHER INCOME (DEDUCTIONS)TOTAL OTHER INCOME (DEDUCTIONS)(22)(13)(259)(72)
INCOME BEFORE INTEREST AND INCOME TAX EXPENSE9129892,1642,158INCOME BEFORE INTEREST AND INCOME TAX EXPENSE8288471,8702,075
INTEREST EXPENSE  INTEREST EXPENSE
Interest on long-term debt183174539504Interest on long-term debt235227693685
Other interest451117Other interest(2)4(15)122
Allowance for borrowed funds used during construction(2)(1)(5)(4)Allowance for borrowed funds used during construction(1)(5)(9)(10)
NET INTEREST EXPENSE185178545517NET INTEREST EXPENSE232226669797
INCOME BEFORE INCOME TAX EXPENSE7278111,6191,641INCOME BEFORE INCOME TAX EXPENSE596 6211,201 1,278
INCOME TAX EXPENSE270314599602INCOME TAX EXPENSE127119194183
NET INCOME$457$497$1,020$1,039NET INCOME469 5021,007 1,095
Income (loss) attributable to non-controlling interestIncome (loss) attributable to non-controlling interest(69)9(115)37
NET INCOME FOR COMMON STOCKNET INCOME FOR COMMON STOCK$538$493$1,122$1,058
Net income per common share—basic$1.48$1.63$3.33$3.47Net income per common share—basic$1.52$1.47$3.23$3.17
Net income per common share—diluted$1.48$1.62$3.31$3.46Net income per common share—diluted$1.52$1.47$3.23$3.16
DIVIDENDS DECLARED PER COMMON SHARE$0.69$0.67$2.07$2.01
AVERAGE NUMBER OF SHARES OUTSTANDING—BASIC (IN MILLIONS)307.8304.5306.2299.1AVERAGE NUMBER OF SHARES OUTSTANDING—BASIC (IN MILLIONS)353.4334.5346.8334.1
AVERAGE NUMBER OF SHARES OUTSTANDING—DILUTED (IN MILLIONS)309.3305.9307.7300.5AVERAGE NUMBER OF SHARES OUTSTANDING—DILUTED (IN MILLIONS)354.1335.4347.5335.0
The accompanying notes are an integral part of these financial statements.



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Consolidated Edison, Inc.
CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME (UNAUDITED)
Three Months Ended September 30,Nine Months Ended September 30,
For the Three Months Ended September 30,For the Nine Months Ended September 30,
2017201620172016
(Millions of Dollars)
(Millions of Dollars)(Millions of Dollars)2021202020212020
NET INCOME$457$497$1,020$1,039NET INCOME$469$502$1,007$1,095
LOSS/(INCOME) ATTRIBUTABLE TO NON-CONTROLLING INTERESTLOSS/(INCOME) ATTRIBUTABLE TO NON-CONTROLLING INTEREST69(9)115(37)
OTHER COMPREHENSIVE INCOME, NET OF TAXES OTHER COMPREHENSIVE INCOME, NET OF TAXES
Pension and other postretirement benefit plan liability adjustments, net of taxes12Pension and other postretirement benefit plan liability adjustments, net of taxes287
TOTAL OTHER COMPREHENSIVE INCOME, NET OF TAXES12TOTAL OTHER COMPREHENSIVE INCOME, NET OF TAXES287
COMPREHENSIVE INCOME$458$498$1,021$1,041COMPREHENSIVE INCOME$540$495$1,130$1,065
The accompanying notes are an integral part of these financial statements.




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Consolidated Edison, Inc.
CONSOLIDATED STATEMENT OF CASH FLOWS (UNAUDITED)
  
For the Nine Months Ended September 30,
(Millions of Dollars)20212020
OPERATING ACTIVITIES
Net income$1,007$1,095
PRINCIPAL NON-CASH CHARGES/(CREDITS) TO INCOME
Depreciation and amortization1,5111,428
Investment loss/impairment211— 
Deferred income taxes167184
Rate case amortization and accruals(14)(30)
Common equity component of allowance for funds used during construction(15)(12)
Net derivative losses/(gains)(26)80
Unbilled revenue and net unbilled revenue deferrals(72)29
Other non-cash items, net10843
CHANGES IN ASSETS AND LIABILITIES
Accounts receivable – customers(387)(322)
Allowance for uncollectible accounts – customers16548
Materials and supplies, including fuel oil and gas in storage(50)(1)
Revenue decoupling mechanism receivable(56)(52)
Other receivables and other current assets81(32)
Taxes receivable18(6)
Prepayments(576)(517)
Accounts payable(15)19
Pensions and retiree benefits obligations237181
Pensions and retiree benefits contributions(467)(474)
Accrued taxes(27)13
Accrued interest126102
Superfund and environmental remediation costs(12)(8)
Distributions from equity investments1829
System benefit charge3(56)
Deferred charges, noncurrent assets and other regulatory assets(705)(443)
Deferred credits and other regulatory liabilities57835
Other current and noncurrent liabilities(96)35
NET CASH FLOWS FROM OPERATING ACTIVITIES1,7121,368
INVESTING ACTIVITIES
Utility construction expenditures(2,697)(2,346)
Cost of removal less salvage(242)(216)
Non-utility construction expenditures(289)(414)
Investments in electric and gas transmission projects(16)— 
Investments in/acquisitions of renewable electric production projects— (24)
Proceeds from sale of assets614— 
Divestiture of renewable electric projects, net183— 
Other investing activities1016
NET CASH FLOWS USED IN INVESTING ACTIVITIES(2,437)(2,984)
FINANCING ACTIVITIES
Net issuance of short-term debt(834)137
Issuance of long-term debt1,9791,675
Retirement of long-term debt(1,904)(463)
Debt issuance costs(30)(25)
Common stock dividends(768)(731)
Issuance of common shares - public offering77588
Issuance of common shares for stock plans4543
Distribution to noncontrolling interest(15)(11)
Sale of equity interest256— 
NET CASH FLOWS FROM (USED IN) FINANCING ACTIVITIES(496)713
CASH, TEMPORARY CASH INVESTMENTS, AND RESTRICTED CASH:
NET CHANGE FOR THE PERIOD(1,221)(903)
BALANCE AT BEGINNING OF PERIOD1,4361,217
BALANCE AT END OF PERIOD$215$314
SUPPLEMENTAL DISCLOSURE OF CASH INFORMATION
Cash paid/(received) during the period for:
Interest$565$583
Income taxes$(9)$31
SUPPLEMENTAL DISCLOSURE OF NON-CASH INFORMATION
Construction expenditures in accounts payable$388$432
Issuance of common shares for dividend reinvestment$37$36
Software licenses acquired but unpaid as of end of period$24$51
Equipment acquired but unpaid as of end of period$22$28
  
For the Nine Months Ended September 30,
  
2017
2016
 (Millions of Dollars)
OPERATING ACTIVITIES  
Net income$1,020$1,039
PRINCIPAL NON-CASH CHARGES/(CREDITS) TO INCOME  
Depreciation and amortization998905
Deferred income taxes626524
Rate case amortization and accruals(93)(157)
Common equity component of allowance for funds used during construction(8)(7)
Net derivative gains(4)(7)
Gain on sale of retail electric supply business and solar electric production project(1)(104)
Other non-cash items, net(1)99
CHANGES IN ASSETS AND LIABILITIES  
Accounts receivable – customers1(138)
Materials and supplies, including fuel oil and gas in storage215
Other receivables and other current assets(39)90
Income taxes receivable33100
Prepayments(433)(403)
Accounts payable(54)142
Pensions and retiree benefits obligations, net305464
Pensions and retiree benefits contributions(462)(510)
Accrued taxes(21)(21)
Accrued interest5966
Superfund and environmental remediation costs, net(9)68
Distributions from equity investments8745
System benefit charge194193
Deferred charges, noncurrent assets and other regulatory assets(18)(104)
Deferred credits and other regulatory liabilities(40)116
Other current and noncurrent liabilities85(79)
NET CASH FLOWS FROM OPERATING ACTIVITIES2,2272,336
INVESTING ACTIVITIES  
Utility construction expenditures(2,148)(2,057)
Cost of removal less salvage(185)(149)
Non-utility construction expenditures(288)(436)
Investments in electric and gas transmission projects(29)(1,040)
Investments in/acquisitions of renewable electric production projects(1)(241)
Proceeds from the transfer of assets to NY Transco—
122
Proceeds from sale of assets34250
Restricted cash13(21)
Other investing activities32(145)
NET CASH FLOWS USED IN INVESTING ACTIVITIES(2,572)(3,717)
FINANCING ACTIVITIES  
Net payment of short-term debt(698)(928)
Issuance of long-term debt9971,765
Retirement of long-term debt(429)(407)
Debt issuance costs(12)(16)
Common stock dividends(600)(570)
Issuance of common shares - public offering343702
Issuance of common shares for stock plans3738
Distribution to noncontrolling interest—
(1)
NET CASH FLOWS (USED IN)/FROM FINANCING ACTIVITIES(362)583
CASH AND TEMPORARY CASH INVESTMENTS:  
NET CHANGE FOR THE PERIOD(707)(798)
BALANCE AT BEGINNING OF PERIOD776944
BALANCE AT END OF PERIOD$69$146
LESS: CHANGE IN CASH BALANCES HELD FOR SALE—
(4)
BALANCE AT END OF PERIOD EXCLUDING HELD FOR SALE$69$150
SUPPLEMENTAL DISCLOSURE OF CASH INFORMATION  
Cash paid/(received) during the period for:  
Interest$479$437
Income taxes$(34)$(144)
SUPPLEMENTAL DISCLOSURE OF NON-CASH INFORMATION  
Construction expenditures in accounts payable$352$242
Issuance of common shares for dividend reinvestment$35$35

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



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Consolidated Edison, Inc.
CONSOLIDATED BALANCE SHEET (UNAUDITED)
September 30,
2017		December 31,
2016
(Millions of Dollars)
(Millions of Dollars)(Millions of Dollars)September 30,
2021		December 31,
2020
ASSETS ASSETS
CURRENT ASSETS CURRENT ASSETS
Cash and temporary cash investments$69$776Cash and temporary cash investments$66$1,272
Accounts receivable – customers, less allowance for uncollectible accounts of $63 and $69 in 2017 and 2016, respectively1,1111,106
Other receivables, less allowance for uncollectible accounts of $8 and $14 in 2017 and 2016, respectively181195
Income taxes receivable4679
Accounts receivable – customers, less allowance for uncollectible accounts of $313 and $148 in 2021 and 2020, respectivelyAccounts receivable – customers, less allowance for uncollectible accounts of $313 and $148 in 2021 and 2020, respectively1,9231,701
Other receivables, less allowance for uncollectible accounts of $7 in 2021 and 2020Other receivables, less allowance for uncollectible accounts of $7 in 2021 and 2020272278
Taxes receivableTaxes receivable826
Accrued unbilled revenue411447Accrued unbilled revenue656599
Fuel oil, gas in storage, materials and supplies, at average cost337339Fuel oil, gas in storage, materials and supplies, at average cost405356
Prepayments592159Prepayments847271
Regulatory assets109100Regulatory assets205266
Restricted cash4154Restricted cash149164
Revenue decoupling mechanism receivableRevenue decoupling mechanism receivable193137
Other current assets199151Other current assets372231
TOTAL CURRENT ASSETS3,0963,406TOTAL CURRENT ASSETS5,0965,301
INVESTMENTS1,9771,921INVESTMENTS1,0781,816
UTILITY PLANT, AT ORIGINAL COST UTILITY PLANT, AT ORIGINAL COST
Electric28,59527,747Electric34,44633,315
Gas7,9727,524Gas11,86910,847
Steam2,4582,421Steam2,7732,696
General2,8912,719General4,0913,880
TOTAL41,91640,411TOTAL53,17950,738
Less: Accumulated depreciation8,9048,541Less: Accumulated depreciation11,90711,188
Net33,01231,870Net41,27239,550
Construction work in progress1,4151,175Construction work in progress2,2642,474
NET UTILITY PLANT34,42733,045NET UTILITY PLANT43,53642,024
NON-UTILITY PLANT NON-UTILITY PLANT
Non-utility property, less accumulated depreciation of $185 and $140 in 2017 and 2016, respectively1,6861,482
Non-utility property, less accumulated depreciation of $590 and $522 in 2021 and 2020, respectivelyNon-utility property, less accumulated depreciation of $590 and $522 in 2021 and 2020, respectively4,2023,893
Construction work in progress615689Construction work in progress209638
NET PLANT36,72835,216NET PLANT47,94746,555
OTHER NONCURRENT ASSETS OTHER NONCURRENT ASSETS
Goodwill428Goodwill446
Intangible assets, less accumulated amortization of $12 and $6 in 2017 and 2016, respectively114124
Intangible assets, less accumulated amortization of $273 and $228 in 2021 and 2020, respectivelyIntangible assets, less accumulated amortization of $273 and $228 in 2021 and 2020, respectively1,3171,460
Regulatory assets6,7697,024Regulatory assets5,9036,195
Operating lease right-of-use assetOperating lease right-of-use asset817837
Other deferred charges and noncurrent assets134136Other deferred charges and noncurrent assets334285
TOTAL OTHER NONCURRENT ASSETS7,4457,712TOTAL OTHER NONCURRENT ASSETS8,8179,223
TOTAL ASSETS$49,246$48,255TOTAL ASSETS$62,938$62,895
The accompanying notes are an integral part of these financial statements.
 




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Consolidated Edison, Inc.
CONSOLIDATED BALANCE SHEET (UNAUDITED)
 
 
September 30,
2017		December 31,
2016
(Millions of Dollars)
(Millions of Dollars)(Millions of Dollars)September 30,
2021		December 31,
2020
LIABILITIES AND SHAREHOLDERS’ EQUITY LIABILITIES AND SHAREHOLDERS’ EQUITY
CURRENT LIABILITIES CURRENT LIABILITIES
Long-term debt due within one year$687$39Long-term debt due within one year$439$1,967
Term loanTerm loan— 165
Notes payable3561,054Notes payable1,0361,705
Accounts payable1,0571,147Accounts payable1,3701,475
Customer deposits344352Customer deposits286311
Accrued taxes4364Accrued taxes123150
Accrued interest209150Accrued interest273149
Accrued wages105101Accrued wages113108
Fair value of derivative liabilities7077Fair value of derivative liabilities163238
Regulatory liabilities58128Regulatory liabilities49036
System benefit charge628434System benefit charge460528
Operating lease liabilitiesOperating lease liabilities11396
Other current liabilities358297Other current liabilities389426
TOTAL CURRENT LIABILITIES3,9153,843TOTAL CURRENT LIABILITIES5,2557,354
NONCURRENT LIABILITIES NONCURRENT LIABILITIES
Provision for injuries and damages164160Provision for injuries and damages177178
Pensions and retiree benefits1,4431,847Pensions and retiree benefits1,4242,257
Superfund and other environmental costs745753Superfund and other environmental costs841857
Asset retirement obligations256246Asset retirement obligations602576
Fair value of derivative liabilities8340Fair value of derivative liabilities166240
Deferred income taxes and unamortized investment tax credits10,74410,205Deferred income taxes and unamortized investment tax credits6,8356,475
Operating lease liabilitiesOperating lease liabilities756764
Regulatory liabilities1,8731,905Regulatory liabilities4,3794,513
Other deferred credits and noncurrent liabilities262215Other deferred credits and noncurrent liabilities285234
TOTAL NONCURRENT LIABILITIES15,57015,371TOTAL NONCURRENT LIABILITIES15,46516,094
LONG-TERM DEBT14,65114,735LONG-TERM DEBT21,84120,382
COMMITMENTS, CONTINGENCIES, AND GUARANTEES (Note B, Note G, and Note H)COMMITMENTS, CONTINGENCIES, AND GUARANTEES (Note B, Note G, and Note H)0
EQUITY EQUITY
Common shareholders’ equity15,10214,298Common shareholders’ equity20,03718,847
Noncontrolling interest8Noncontrolling interest340218
TOTAL EQUITY (See Statement of Equity)15,11014,306TOTAL EQUITY (See Statement of Equity)20,37719,065
TOTAL LIABILITIES AND EQUITY$49,246$48,255TOTAL LIABILITIES AND EQUITY$62,938$62,895
The accompanying notes are an integral part of these financial statements.





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Consolidated Edison, Inc.
CONSOLIDATED STATEMENT OF EQUITY (UNAUDITED)
(In Millions, except for dividends per share)Common StockAdditional
Paid-In
Capital		Retained
Earnings		Treasury StockCapital
Stock
Expense		Accumulated
Other
Comprehensive
Income/(Loss)		Non-
controlling
Interest		Total
SharesAmountSharesAmount
BALANCE AS OF DECEMBER 31, 2019333$35$8,054$11,10023$(1,038)$(110)$(19)$191$18,213
Net income37517392
Common stock dividends ($0.76 per share)(255)(255)
Issuance of common shares - public offering18888
Issuance of common shares for stock plans2626
Other comprehensive income55
Distributions to noncontrolling interests(2)(2)
BALANCE AS OF MARCH 31, 2020334$35$8,168$11,22023$(1,038)$(110)$(14)$206$18,467
Net income19012202
Common stock dividends ($0.76 per share)(256)(256)
Issuance of common shares for stock plans3030
Distributions to noncontrolling interest(2)(2)
BALANCE AS OF JUNE 30, 2020334$35$8,198$11,15423$(1,038)$(110)$(14)$216$18,441
Net income4939502
Common stock dividends ($0.76 per share)(256)(256)
Issuance of common shares - public offering— 
Issuance of common shares for stock plans3030
Other comprehensive income22
Distributions to noncontrolling interest(8)(8)
BALANCE AS OF SEPTEMBER 30, 2020334$35$8,228$11,39123$(1,038)$(110)$(12)$217$18,711
BALANCE AS OF DECEMBER 31, 2020342$36$8,808$11,17823$(1,038)$(112)$(25)$218$19,065
Net income4191420
Common stock dividends ($0.775 per share)(265)(265)
Issuance of common shares for stock plans2828
Other comprehensive income44
Distributions to noncontrolling interests(3)(3)
Net proceeds from sale of equity interest3333
BALANCE AS OF MARCH 31, 2021342$36$8,836$11,33223$(1,038)$(112)$(21)$249$19,282
Net income (loss)165(47)118
Common stock dividends ($0.775 per share)(266)(266)
Issuance of common shares - public offering111785(11)775
Issuance of common shares for stock plans3434
Other comprehensive income22
Distributions to noncontrolling interests(4)(4)
12

(In Millions)Common StockAdditional
Paid-In
Capital		Retained
Earnings		Treasury StockCapital
Stock
Expense		Accumulated
Other
Comprehensive
Income/(Loss)		Noncontrolling
Interest		Total
SharesAmountSharesAmount
BALANCE AS OF
DECEMBER 31, 2015		293$32$5,030$9,12323$(1,038)$(61)$(34)$9$13,061
Net income   310     310
Common stock dividends   (197)     (197)
Issuance of common shares for stock plans1 28      28
Other comprehensive income       
 —
Noncontrolling interest        (1)(1)
BALANCE AS OF
MARCH 31, 2016		294$32$5,058$9,23623$(1,038)$(61)$(34)$8$13,201
Net income   232     232
Common stock dividends   (204)     (204)
Issuance of common shares - public offering101723   (22)  702
Issuance of common shares for stock plans
 26      26
Other comprehensive income       1 1
BALANCE AS OF
JUNE 30, 2016		304$33$5,807$9,26423$(1,038)$(83)$(33)$8$13,958
Net income   497     497
Common stock dividends   (204)     (204)
Issuance of common shares for stock plans1
 23      23
Other comprehensive income       1 1
BALANCE AS OF
SEPTEMBER 30, 2016		305$33$5,830$9,55723$(1,038)$(83)$(32)$8$14,275
           
BALANCE AS OF DECEMBER 31, 2016305$33$5,854$9,55923$(1,038)$(83)$(27)$8$14,306
Net income   388     388
Common stock dividends   (211)     (211)
Issuance of common shares for stock plans  24      24
Other comprehensive loss       (1) (1)
BALANCE AS OF
MARCH 31, 2017		305$33$5,878$9,73623$(1,038)$(83)$(28)$8$14,506
Net income   175     175
Common stock dividends   (210)     (210)
Issuance of common shares for stock plans1 26      26
Other comprehensive income       1 1
BALANCE AS OF
JUNE 30, 2017		306$33$5,904$9,70123$(1,038)$(83)$(27)$8$14,498
Net income   457     457
Common stock dividends   (214)     (214)
Issuance of common shares - public offering4
345   (2)  343
Issuance of common shares for stock plans

25      25
Other comprehensive income       1 1
BALANCE AS OF
SEPTEMBER 30, 2017		310$33$6,274$9,94423$(1,038)$(85)$(26)$8$15,110
Net proceeds from sale of equity interest112112
BALANCE AS OF JUNE 30, 2021353$37$9,655$11,23123$(1,038)$(123)$(19)$310$20,053
Net income (loss)538(69)469 
Common stock dividends ($0.775 per share)(274)(274)
Issuance of common shares - public offering1— 
Issuance of common shares for stock plans2828 
Other comprehensive income22 
Distributions to noncontrolling interests(8)(8)
Net proceeds from sale of equity interest107107 
BALANCE AS OF SEPTEMBER 30, 2021354$37$9,683$11,49523$(1,038)$(123)$(17)$340$20,377

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









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Consolidated Edison Company of New York, Inc.
CONSOLIDATED INCOME STATEMENT (UNAUDITED)
For the Three Months Ended September 30,For the Nine Months Ended September 30,
For the Three Months Ended September 30,For the Nine Months Ended September 30,
2017
201620172016
(Millions of Dollars)
(Millions of Dollars)(Millions of Dollars)2021202020212020
OPERATING REVENUES  OPERATING REVENUES
Electric$2,469$2,557$6,079$6,222Electric$2,730$2,562$6,661$6,178
Gas2682081,4211,113Gas3072591,7301,509
Steam6263448406Steam5551393385
TOTAL OPERATING REVENUES2,7992,8287,9487,741TOTAL OPERATING REVENUES3,0922,8728,7848,072
OPERATING EXPENSES  OPERATING EXPENSES
Purchased power4004951,1101,216Purchased power4814471,2941,065
Fuel3029169133Fuel4424166124
Gas purchased for resale5834372217Gas purchased for resale6138357298
Other operations and maintenance6917241,9922,105Other operations and maintenance6505971,8481,714
Depreciation and amortization300278891825Depreciation and amortization4294011,2671,187
Taxes, other than income taxes5205021,5231,446Taxes, other than income taxes6996432,0161,830
TOTAL OPERATING EXPENSES1,9992,0626,0575,942TOTAL OPERATING EXPENSES2,3642,1506,9486,218
OPERATING INCOME8007661,8911,799OPERATING INCOME7287221,8361,854
OTHER INCOME (DEDUCTIONS)  OTHER INCOME (DEDUCTIONS)
Investment and other income2496Investment and other income561511
Allowance for equity funds used during construction3276Allowance for equity funds used during construction511410
Other deductions(5)(4)(10)Other deductions(33)(45)(99)(159)
TOTAL OTHER INCOME—
262
TOTAL OTHER INCOME (DEDUCTIONS)TOTAL OTHER INCOME (DEDUCTIONS)(23)(38)(70)(138)
INCOME BEFORE INTEREST AND INCOME TAX EXPENSE8007681,8971,801INCOME BEFORE INTEREST AND INCOME TAX EXPENSE7056841,766 1,716
INTEREST EXPENSE  INTEREST EXPENSE
Interest on long-term debt155150456440Interest on long-term debt194179564537
Other interest451114Other interest371126
Allowance for borrowed funds used during construction(2)(1)(4)(3)Allowance for borrowed funds used during construction— (4)(8)(9)
NET INTEREST EXPENSE157154463451NET INTEREST EXPENSE197182567554
INCOME BEFORE INCOME TAX EXPENSE6436141,4341,350INCOME BEFORE INCOME TAX EXPENSE5085021,1991,162
INCOME TAX EXPENSE242226551491INCOME TAX EXPENSE9097188199
NET INCOME$401$388$883$859NET INCOME$418$405$1,011$963
The accompanying notes are an integral part of these financial statements.
 




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Consolidated Edison Company of New York, Inc.
CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME (UNAUDITED)
 
Three Months Ended September 30,Nine Months Ended September 30,
(Millions of Dollars)(Millions of Dollars)2021202020212020
NET INCOMENET INCOME$418$405$1,011$963
For the Three Months Ended September 30,For the Nine Months Ended September 30,
2017
2016
20172016
(Millions of Dollars)
NET INCOME$401$388$883$859
OTHER COMPREHENSIVE INCOME, NET OF TAXES  
Pension and other postretirement benefit plan liability adjustments, net of taxes1
—
1Pension and other postretirement benefit plan liability adjustments, net of taxes— — — 2
TOTAL OTHER COMPREHENSIVE INCOME, NET OF TAXES1
—
1TOTAL OTHER COMPREHENSIVE INCOME, NET OF TAXES— — — 2
COMPREHENSIVE INCOME$402$388$884$860COMPREHENSIVE INCOME$418$405$1,011$965
The accompanying notes are an integral part of these financial statements.
 





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Consolidated Edison Company of New York, Inc.
CONSOLIDATED STATEMENT OF CASH FLOWS (UNAUDITED)
 
For the Nine Months Ended September 30,
For the Nine Months Ended September 30,
2017
2016
(Millions of Dollars)
(Millions of Dollars)(Millions of Dollars)20212020
OPERATING ACTIVITIES  OPERATING ACTIVITIES
Net income$883$859Net income$1,011$963
PRINCIPAL NON-CASH CHARGES/(CREDITS) TO INCOME  PRINCIPAL NON-CASH CHARGES/(CREDITS) TO INCOME
Depreciation and amortization891825Depreciation and amortization1,2671,187
Deferred income taxes566569Deferred income taxes166201
Rate case amortization and accruals(107)(170)Rate case amortization and accruals(13)(30)
Common equity component of allowance for funds used during construction(7)(6)Common equity component of allowance for funds used during construction(14)(10)
Unbilled revenue and net unbilled revenue deferralsUnbilled revenue and net unbilled revenue deferrals2— 
Other non-cash items, net(14)7Other non-cash items, net46(9)
CHANGES IN ASSETS AND LIABILITIES  CHANGES IN ASSETS AND LIABILITIES
Accounts receivable – customers18(79)Accounts receivable – customers(383)(289)
Allowance for uncollectible accounts – customersAllowance for uncollectible accounts – customers16245
Materials and supplies, including fuel oil and gas in storage(18)15Materials and supplies, including fuel oil and gas in storage(47)6
Revenue decoupling mechanism receivableRevenue decoupling mechanism receivable(64)(45)
Other receivables and other current assets2918Other receivables and other current assets353
Accounts receivable from affiliated companies1238Accounts receivable from affiliated companies18(83)
Prepayments(398)(351)Prepayments(573)(481)
Accounts payable(20)82Accounts payable(49)29
Accounts payable to affiliated companies18Accounts payable to affiliated companies1
Pensions and retiree benefits obligations, net274439
Pensions and retiree benefits obligationsPensions and retiree benefits obligations234169
Pensions and retiree benefits contributions(416)(472)Pensions and retiree benefits contributions(430)(434)
Superfund and environmental remediation costs, net(7)76
Superfund and environmental remediation costsSuperfund and environmental remediation costs(19)(14)
Accrued taxes(18)(17)Accrued taxes(31)10
Accrued taxes to affiliated companies(119)(2)Accrued taxes to affiliated companies63
Accrued interest6143Accrued interest10397
System benefit charge175176System benefit charge3(53)
Deferred charges, noncurrent assets and other regulatory assets(60)(153)Deferred charges, noncurrent assets and other regulatory assets(666)(420)
Deferred credits and other regulatory liabilities77165Deferred credits and other regulatory liabilities509112
Other current and noncurrent liabilities(13)(53)Other current and noncurrent liabilities(23)1
NET CASH FLOWS FROM OPERATING ACTIVITIES1,7902,017NET CASH FLOWS FROM OPERATING ACTIVITIES1,251959
INVESTING ACTIVITIES  INVESTING ACTIVITIES
Utility construction expenditures(2,020)(1,932)Utility construction expenditures(2,545)(2,200)
Cost of removal less salvage(179)(146)Cost of removal less salvage(237)(212)
Proceeds from the transfer of assets to NY Transco—
122
Restricted cash213
NET CASH FLOWS USED IN INVESTING ACTIVITIES(2,197)(1,943)NET CASH FLOWS USED IN INVESTING ACTIVITIES(2,782)(2,412)
FINANCING ACTIVITIES  FINANCING ACTIVITIES
Net payment of short-term debt(453)(553)Net payment of short-term debt(718)(146)
Issuance of long-term debt500550Issuance of long-term debt1,5001,600
Retirement of long-term debt—
(400)Retirement of long-term debt(640)(350)
Debt issuance costs(7)(6)Debt issuance costs(20)(24)
Capital contribution by parent27976Capital contribution by parent1,101200
Dividend to parent(597)(558)Dividend to parent(741)(737)
NET CASH FLOWS USED IN FINANCING ACTIVITIES(278)(891)
CASH AND TEMPORARY CASH INVESTMENTS:  
NET CASH FLOWS FROM (USED IN) FINANCING ACTIVITIESNET CASH FLOWS FROM (USED IN) FINANCING ACTIVITIES482543
CASH AND TEMPORARY CASH INVESTMENTSCASH AND TEMPORARY CASH INVESTMENTS
NET CHANGE FOR THE PERIOD(685)(817)NET CHANGE FOR THE PERIOD(1,049)(910)
BALANCE AT BEGINNING OF PERIOD702843BALANCE AT BEGINNING OF PERIOD1,067933
BALANCE AT END OF PERIOD$17$26BALANCE AT END OF PERIOD$18$23
SUPPLEMENTAL DISCLOSURE OF CASH INFORMATION  SUPPLEMENTAL DISCLOSURE OF CASH INFORMATION
Cash paid/(received) during the period for:  Cash paid/(received) during the period for:
Interest$388$386Interest$446$430
Income taxes$96$(130)Income taxes$(2)$78
SUPPLEMENTAL DISCLOSURE OF NON-CASH INFORMATION  SUPPLEMENTAL DISCLOSURE OF NON-CASH INFORMATION
Construction expenditures in accounts payable$240$195Construction expenditures in accounts payable$335$340
Software licenses acquired but unpaid as of end of periodSoftware licenses acquired but unpaid as of end of period$22$48
Equipment acquired but unpaid as of end of periodEquipment acquired but unpaid as of end of period$22$28
The accompanying notes are an integral part of these financial statements. 


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Consolidated Edison Company of New York, Inc.
CONSOLIDATED BALANCE SHEET (UNAUDITED)
 
September 30,
2017		December 31,
2016
(Millions of Dollars)
(Millions of Dollars)(Millions of Dollars)September 30,
2021		December 31,
2020
ASSETS  ASSETS
CURRENT ASSETS  CURRENT ASSETS
Cash and temporary cash investments$17$702Cash and temporary cash investments$18$1,067
Accounts receivable – customers, less allowance for uncollectible accounts of $58 and $65 in 2017 and 2016, respectively1,0211,032
Other receivables, less allowance for uncollectible accounts of $7 and $13 in 2017 and 2016, respectively8581
Accounts receivable – customers, less allowance for uncollectible accounts of $300 and $138 in 2021 and 2020, respectivelyAccounts receivable – customers, less allowance for uncollectible accounts of $300 and $138 in 2021 and 2020, respectively1,8161,595
Other receivables, less allowance for uncollectible accounts of $5 and $4 in 2021 and 2020, respectivelyOther receivables, less allowance for uncollectible accounts of $5 and $4 in 2021 and 2020, respectively141134
Taxes receivableTaxes receivable58
Accrued unbilled revenue382399Accrued unbilled revenue506523
Accounts receivable from affiliated companies97109Accounts receivable from affiliated companies116134
Fuel oil, gas in storage, materials and supplies, at average cost288270Fuel oil, gas in storage, materials and supplies, at average cost338291
Prepayments498100Prepayments732159
Regulatory assets10090Regulatory assets187244
Restricted cash—
2
Revenue decoupling mechanism receivableRevenue decoupling mechanism receivable193129
Other current assets6295Other current assets297123
TOTAL CURRENT ASSETS2,5502,880TOTAL CURRENT ASSETS4,3494,407
INVESTMENTS370315INVESTMENTS597541
UTILITY PLANT, AT ORIGINAL COST  UTILITY PLANT, AT ORIGINAL COST
Electric26,93026,122Electric32,36731,327
Gas7,2296,814Gas10,9049,921
Steam2,4582,421Steam2,7732,696
General2,6402,490General3,7773,585
TOTAL39,25737,847TOTAL49,82147,529
Less: Accumulated depreciation8,1707,836Less: Accumulated depreciation10,96110,297
Net31,08730,011Net38,86037,232
Construction work in progress1,3271,104Construction work in progress2,1232,320
NET UTILITY PLANT32,41431,115NET UTILITY PLANT40,98339,552
NON-UTILITY PROPERTY  NON-UTILITY PROPERTY
Non-utility property, less accumulated depreciation of $25 in 2017 and 201644
Non-utility property, less accumulated depreciation of $25 in 2021 and 2020Non-utility property, less accumulated depreciation of $25 in 2021 and 20202
NET PLANT32,41831,119NET PLANT40,98539,554
OTHER NONCURRENT ASSETS  OTHER NONCURRENT ASSETS
Regulatory assets6,2486,473Regulatory assets5,4735,745
Operating lease right-of-use assetOperating lease right-of-use asset552578
Other deferred charges and noncurrent assets6169Other deferred charges and noncurrent assets222142
TOTAL OTHER NONCURRENT ASSETS6,3096,542TOTAL OTHER NONCURRENT ASSETS6,2476,465
TOTAL ASSETS$41,647$40,856TOTAL ASSETS$52,178$50,967
The accompanying notes are an integral part of these financial statements.
 





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Consolidated Edison Company of New York, Inc.
CONSOLIDATED BALANCE SHEET (UNAUDITED)
 

September 30,
2017		December 31,
2016
(Millions of Dollars)
(Millions of Dollars)(Millions of Dollars)September 30,
2021		December 31,
2020
LIABILITIES AND SHAREHOLDER’S EQUITY  LIABILITIES AND SHAREHOLDER’S EQUITY
CURRENT LIABILITIES  CURRENT LIABILITIES
Long-term debt due within one year$600
$—
Long-term debt due within one year$— $640
Notes payable147600Notes payable9421,660
Accounts payable802876Accounts payable1,1011,232
Accounts payable to affiliated companies1110Accounts payable to affiliated companies2322
Customer deposits332336Customer deposits272296
Accrued taxes3250Accrued taxes101132
Accrued taxes to affiliated companies—
119Accrued taxes to affiliated companies71
Accrued interest172111Accrued interest229126
Accrued wages9591Accrued wages10397
Fair value of derivative liabilities5966Fair value of derivative liabilities114163
Regulatory liabilities3890Regulatory liabilities42811
System benefit charge573398System benefit charge407475
Operating lease liabilitiesOperating lease liabilities8573
Other current liabilities207242Other current liabilities315319
TOTAL CURRENT LIABILITIES3,0682,989TOTAL CURRENT LIABILITIES4,1275,247
NONCURRENT LIABILITIES  NONCURRENT LIABILITIES
Provision for injuries and damages158154Provision for injuries and damages171172
Pensions and retiree benefits1,1501,544Pensions and retiree benefits1,1791,943
Superfund and other environmental costs648655Superfund and other environmental costs765780
Asset retirement obligations234227Asset retirement obligations529508
Fair value of derivative liabilities7333Fair value of derivative liabilities97105
Deferred income taxes and unamortized investment tax credits10,0609,450Deferred income taxes and unamortized investment tax credits6,7706,411
Operating lease liabilitiesOperating lease liabilities507512
Regulatory liabilities1,6731,712Regulatory liabilities3,9414,094
Other deferred credits and noncurrent liabilities217190Other deferred credits and noncurrent liabilities235197
TOTAL NONCURRENT LIABILITIES14,21313,965TOTAL NONCURRENT LIABILITIES14,19414,722
LONG-TERM DEBT11,97112,073LONG-TERM DEBT17,63716,149
COMMITMENTS AND CONTINGENCIES (Note B, Note G and Note H)COMMITMENTS AND CONTINGENCIES (Note B, Note G and Note H)0
SHAREHOLDER’S EQUITY (See Statement of Shareholder’s Equity)12,39511,829SHAREHOLDER’S EQUITY (See Statement of Shareholder’s Equity)16,22014,849
TOTAL LIABILITIES AND SHAREHOLDER’S EQUITY$41,647$40,856TOTAL LIABILITIES AND SHAREHOLDER’S EQUITY$52,178$50,967
The accompanying notes are an integral part of these financial statements.
 


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Consolidated Edison Company of New York, Inc.
CONSOLIDATED STATEMENT OF SHAREHOLDER’S EQUITY (UNAUDITED)
Common StockAdditional
Paid-In
Capital		Retained
Earnings		Repurchased
Con Edison
Stock		Capital
Stock
Expense		Accumulated
Other
Comprehensive
Income/(Loss)		Total
(In Millions)(In Millions)SharesAmount
Common StockAdditional
Paid-In
Capital		Retained
Earnings		Repurchased
Con Edison
Stock		Capital
Stock
Expense		Accumulated
Other
Comprehensive
Income/(Loss)		Total
(In Millions)SharesAmount
BALANCE AS OF DECEMBER 31, 2015235$589$4,247$7,611$(962)$(61)$(9)$11,415
BALANCE AS OF DECEMBER 31, 2019BALANCE AS OF DECEMBER 31, 2019235$589$5,669$8,919$(962)$(62)$(6)$14,147
Net income 310  310Net income406406
Common stock dividend to parent (186)  (186)Common stock dividend to parent(246)(246)
Capital contribution by parent 23  23Capital contribution by parent2525
Other comprehensive income —
—
Other comprehensive income1
BALANCE AS OF MARCH 31, 2016235$589$4,270$7,735$(962)$(61)$(9)$11,562
BALANCE AS OF MARCH 31, 2020BALANCE AS OF MARCH 31, 2020235$589$5,694$9,079$(962)$(62)$(5)$14,333
Net income 161  161Net income152152
Common stock dividend to parent (186)  (186)Common stock dividend to parent(246)(246)
Capital contribution by parent 28  28Capital contribution by parent2525
Other comprehensive income 1Other comprehensive income1
BALANCE AS OF JUNE 30, 2016235$589$4,298$7,710$(962)$(61)$(8)$11,566
BALANCE AS OF JUNE 30, 2020BALANCE AS OF JUNE 30, 2020235$589$5,719$8,985$(962)$(62)$(4)$14,265
Net income 388  388Net income405405
Common stock dividend to parent (186)  (186)Common stock dividend to parent(245)(245)
Capital contribution by parent 25  25Capital contribution by parent150150
Other comprehensive income —
—
Other comprehensive income—— 
BALANCE AS OF SEPTEMBER 30, 2016235$589$4,323$7,912$(962)$(61)$(8)$11,793
BALANCE AS OF SEPTEMBER 30, 2020BALANCE AS OF SEPTEMBER 30, 2020235$589$5,869$9,145$(962)$(62)$(4)$14,575
  
BALANCE AS OF DECEMBER 31, 2016235$589$4,347$7,923$(962)$(61)$(7)$11,829
BALANCE AS OF DECEMBER 31, 2020BALANCE AS OF DECEMBER 31, 2020235$589$6,169$9,122$(962)$(62)$(7)$14,849
Net income 339  339Net income465465
Common stock dividend to parent (199)  (199)Common stock dividend to parent(247)(247)
Capital contribution by parent 22  22Capital contribution by parent125125
Other comprehensive income —
—
BALANCE AS OF MARCH 31, 2017235$589$4,369$8,063$(962)$(61)$(7)$11,991
BALANCE AS OF MARCH 31, 2021BALANCE AS OF MARCH 31, 2021235$589$6,294$9,340$(962)$(62)$(7)$15,192
Net income 143  143Net income128128
Common stock dividend to parent (199)  (199)Common stock dividend to parent(247)(247)
Capital contribution by parent 23  23Capital contribution by parent851851
Other comprehensive income —
—
BALANCE AS OF JUNE 30, 2017235$589$4,392$8,007$(962)$(61)$(7)$11,958
BALANCE AS OF JUNE 30, 2021BALANCE AS OF JUNE 30, 2021235$589$7,145$9,221$(962)$(62)$(7)$15,924
Net income 401  401Net income418418
Common stock dividend to parent (199)  (199)Common stock dividend to parent(247)(247)
Capital contribution by parent 235 (1) 234Capital contribution by parent125125
Other comprehensive income 1
BALANCE AS OF SEPTEMBER 30, 2017235$589$4,627$8,209$(962)$(62)$(6)$12,395
BALANCE AS OF SEPTEMBER 30, 2021BALANCE AS OF SEPTEMBER 30, 2021235$589$7,270$9,392$(962)$(62)$(7)$16,220
The accompanying notes are an integral part of these financial statements.



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NOTES TO THE FINANCIAL STATEMENTS (UNAUDITED)
 
General
These combined notes accompany and form an integral part of the separate interim consolidated financial statements of each of the two2 separate registrants: Consolidated Edison, Inc. and its subsidiaries (Con Edison) and Consolidated Edison Company of New York, Inc. and its subsidiaries (CECONY). CECONY is a subsidiary of Con Edison and as such its financial condition and results of operations and cash flows, which are presented separately in the CECONY consolidated financial statements, are also consolidated, along with those of Orange and Rockland Utilities, Inc. (O&R), Con Edison Clean Energy Businesses, Inc. (together with its subsidiaries, the Clean Energy Businesses) and Con Edison Transmission, Inc. (together with its subsidiaries, Con Edison Transmission) in Con Edison’s consolidated financial statements. The term “Utilities” is used in these notes to refer to CECONY and O&R.
As used in these notes, the term “Companies” refers to Con Edison and CECONY and, except as otherwise noted, the information in these combined notes relates to each of the Companies. However, CECONY makes no representation as to information relating to Con Edison or the subsidiaries of Con Edison other than itself.
The separate interim consolidated financial statements of each of the Companies are unaudited but, in the opinion of their respective managements, reflect all adjustments (which include only normally recurring adjustments) necessary for a fair presentationstatement of the results for the interim periods presented. The Companies’ separate interim consolidated financial statements should be read together with their separate audited financial statements (including the combined notes thereto) included in Item 8 of their combined Annual Report on Form 10-K for the year ended December 31, 20162020 and their separate unaudited financial statements (including the combined notes thereto) included in Part 1, Item 1 of their combined Quarterly ReportReports on Form 10-Q for the quarterly periods ended March 31, 20172021 and June 30, 2017. Certain prior period amounts have been reclassified to conform to the current period presentation.2021.
Con Edison has two2 regulated utility subsidiaries: CECONY and O&R. CECONY provides electric service and gas service in New York City and Westchester County. The company also provides steam service in parts of Manhattan. O&R, along with its regulated utility subsidiary, provides electric service in southeastern New York and northern New Jersey and gas service in southeastern New York. Con Edison Clean Energy Businesses, Inc. has three subsidiaries: Consolidated Edison Development, Inc. (Con Edison Development), a company thatthrough its subsidiaries, develops, owns and operates renewable and sustainable energy infrastructure projects; Consolidated Edison Energy, Inc. (Con Edison Energy), a company thatprojects and provides energy-related products and services to wholesale customers; and Consolidated Edison Solutions, Inc. (Con Edison Solutions), a company that provides energy-related products and services to retail customers. Con Edison Transmission, Inc. invests in and seeks to develop electric transmission facilitiesprojects through its subsidiary, Consolidated Edison Transmission, LLC (CET Electric), and investsmanages, through joint ventures, investments in gas pipeline and storage facilities through its subsidiary Con Edison Gas Pipeline and Storage, LLC (CET Gas). See “Investments” in Note A and Note R.


Note A – Summary of Significant Accounting Policies and Other Matters
Accounting Policies
The accounting policies of Con Edison and its subsidiaries conform to generally accepted accounting principles in the United States of America (GAAP). For the Utilities, these accounting principles include the accounting rules for regulated operations and the accounting requirements of the Federal Energy Regulatory Commission (FERC) and the state regulators having jurisdiction.

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

Partial Impairment of Investment in Stagecoach Gas Services LLC (Stagecoach)
In May 2021, a subsidiary of Con Edison Gas Pipeline and Storage, LLC (CET Gas) entered into a purchase and sale agreement pursuant to which the subsidiary and its joint venture partner agreed to sell their combined interests in Stagecoach Gas Services LLC (Stagecoach) for a total of $1,225 million, of which $612.5 million will be CET Gas' portion for its 50 percent interest, subject to closing adjustments. The purchase and sale agreement contemplates a two-stage closing, the first of which was completed in July 2021 for a sale price of $1,195 million, of which $614 million, including working capital, was attributed to CET Gas. The second closing for the remaining $30 million, of which $15 million will be attributed to CET Gas, subject to closing adjustments, is to occur following approval by the New York State Public Service Commission, which is expected later this year or during the first quarter of 2022, subject to customary closing conditions.

As a result of information made available to Stagecoach as part of the sale process, Stagecoach performed impairment tests that resulted in Stagecoach recording impairment charges of $414 million for the nine months ended September 30, 2021. Accordingly, Con Edison recorded pre-tax impairment losses on its 50 percent interest
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in Stagecoach of $211 million ($147 million after-tax), including working capital and transaction cost adjustments, within "Investment income/(loss)" on Con Edison's consolidated income statement for the nine months ended September 30, 2021. These charges reduced the carrying value of Con Edison’s investment in Stagecoach to $630 million at June 30, 2021.

Stagecoach’s impairment charges and information obtained from the sales process constituted triggering events for Con Edison's investment in Stagecoach as of March 31, 2021 and June 30, 2021. Con Edison evaluated the carrying value of its investment in Stagecoach for other-than-temporary declines in value using income and market-based approaches. Con Edison determined that the carrying value of its investment in Stagecoach of $667 million and $630 million as of March 31, 2021 and June 30, 2021, respectively, was not impaired. The carrying value of $630 million at June 30, 2021 approximates the final sales price received in July 2021 and the remaining amount expected to be received, including closing adjustments.

The accounting rules require Con Edison to evaluate its investments periodically to determine whether they are impaired. The standard for determining whether an impairment exists and must be recorded is whether an other-than-temporary decline in carrying value has occurred. Changes in economic conditions, forecasted cash flows and the regulatory environment, among other factors, could require equity method investments to recognize a decrease in carrying value for an other-than-temporary decline. When management believes such a decline may have occurred, the fair value of the investment is estimated using market inputs, when observable, or a market valuation model such as a discounted cash flow analysis. The fair value is compared to the carrying value of the investment in order to determine the amount of impairment to record, if any.

The evaluation and measurement of impairments involve uncertainties. The judgments that Con Edison makes to estimate the fair value of its equity method investments are based on assumptions that management believes are reasonable, and variations in these estimates or the underlying assumptions, or the receipt of additional market information, could have a material impact on whether a triggering event is determined to exist or the amount of any such impairment. Additionally, if the projects in which Con Edison holds these investments recognize an impairment, Con Edison may record a share of that impairment loss and would evaluate its investment for an other-than-temporary decline in carrying value as described above.

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

Earnings Per Common Share
Con Edison presents basic and diluted earnings per share (EPS) on the face of its consolidated income statement. Basic EPS is calculated by dividing earnings available to common shareholders (“Net income”income for common stock” on Con Edison’s consolidated income statement) by the weighted average number of Con Edison common shares outstanding during the period. In the calculation of diluted EPS, weighted average shares outstanding areis increased for additional shares that would be outstanding if potentially dilutive securities were converted to common stock.


Potentially dilutive securities for Con Edison consist of restricted stock units and deferred stock units and stock options for which the average market price of the common shares for the period was greater than the exercise price.











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For the three and nine months ended September 30, 20172021 and 2016,2020, basic and diluted EPS for Con Edison arewere calculated as follows:
For the Three Months Ended September 30,For the Nine Months Ended September 30,
(Millions of Dollars, except per share amounts/Shares in Millions)2021202020212020
Net income for common stock$538$493$1,122$1,058
Weighted average common shares outstanding – basic353.4334.5346.8334.1
Add: Incremental shares attributable to effect of potentially dilutive securities0.70.90.70.9
Adjusted weighted average common shares outstanding – diluted354.1335.4347.5335.0
Net Income per common share – basic$1.52$1.47$3.23$3.17
Net Income per common share – diluted$1.52$1.47$3.23$3.16

The computation of diluted EPS for the three and nine months ended September 30, 2021 and 2020 excludes immaterial amounts of performance share awards that were not included because of their anti-dilutive effect.


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 For the Three Months Ended September 30,For the Nine Months Ended September 30,
(Millions of Dollars, except per share amounts/Shares in Millions)2017201620172016
Net income$457$497$1,020$1,039
Weighted average common shares outstanding – basic307.8304.5306.2299.1
Add: Incremental shares attributable to effect of potentially dilutive securities1.51.41.51.4
Adjusted weighted average common shares outstanding – diluted309.3305.9307.7300.5
Net Income per common share – basic$1.48$1.63$3.33$3.47
Net Income per common share – diluted$1.48$1.62$3.31$3.46



Changes in Accumulated Other Comprehensive Income/(Loss) by Component
For the three and nine months ended September 30, 20172021 and 2016,2020, changes to accumulated other comprehensive income/(loss) (OCI) for Con Edison and CECONY arewere as follows:
 
For the Three Months Ended September 30,
Con EdisonCECONY
(Millions of Dollars)2021202020212020
Beginning balance, accumulated OCI, net of taxes (a)$(19)$(14)$(7)$(4)
Amounts reclassified from accumulated OCI related to pension plan liabilities, net of tax of $(1) for Con Edison in 2021 and 2020 (a)(b)
22— — 
Current period OCI, net of taxes22— — 
Ending balance, accumulated OCI, net of taxes (a)$(17)$(12)$(7)$(4)

For the Nine Months Ended September 30,
Con EdisonCECONY
(Millions of Dollars)2021202020212020
Beginning balance, accumulated OCI, net of taxes (a)$(25)$(19)$(7)$(6)
OCI before reclassifications, net of tax of $(1) for Con Edison in 2021 and 202024— — 
Amounts reclassified from accumulated OCI related to pension plan liabilities, net of tax of $(2) for Con Edison in 2021 and 2020 (a)(b)63— 2
Current period OCI, net of taxes87— 2
Ending balance, accumulated OCI, net of taxes (a)$(17)$(12)$(7)$(4)
(a) Tax reclassified from accumulated OCI is reported in the income tax expense line item of the consolidated income statement.
(b)For the portion of unrecognized pension and other postretirement benefit costs relating to the Utilities, costs are recorded into, and amortized out of, regulatory assets and liabilities instead of OCI. The net actuarial losses and prior service costs recognized during the period are included in the computation of total periodic pension and other postretirement benefit costs. See Notes E and F.

Reconciliation of Cash, Temporary Cash Investments and Restricted Cash
Cash, temporary cash investments and restricted cash are presented on a combined basis in the Companies’ consolidated statements of cash flows. At September 30, 2021 and 2020, cash, temporary cash investments and restricted cash for Con Edison and CECONY were as follows:
At September 30,
Con EdisonCECONY
(Millions of Dollars)2021202020212020
Cash and temporary cash investments$66$153$18$23
Restricted cash (a)149161— — 
Total cash, temporary cash investments and restricted cash$215$314$18$23
(a)Restricted cash included cash of the Clean Energy Businesses' renewable electric production project subsidiaries ($149 million and $161 million at September 30, 2021 and 2020, respectively) that, under the related project debt agreements, is restricted to being used for normal operating expenses and capital expenditures, debt service, and required reserves until the various maturity dates of the project debt.


 For the Three Months Ended September 30,
         Con Edison        CECONY
(Millions of Dollars)2017201620172016
Beginning balance, accumulated OCI, net of taxes (a)$(27)$(33)$(7)$(8)
Amounts reclassified from accumulated OCI related to pension plan liabilities, net of tax of $(1) for Con Edison in 2017 and 2016 (a)(b)111—
Current period OCI, net of taxes111—
Ending balance, accumulated OCI, net of taxes$(26)$(32)$(6)$(8)













 For the Nine Months Ended September 30,
         Con Edison        CECONY
(Millions of Dollars)201720162017
2016
Beginning balance, accumulated OCI, net of taxes (a)$(27)$(34)$(7)$(9)
OCI before reclassifications, net of tax of $1 for Con Edison in 2017 and 2016(2)(1)—
—
Amounts reclassified from accumulated OCI related to pension plan liabilities, net of tax of $(2) for Con Edison in 2017 and 2016 (a)(b)3311
Current period OCI, net of taxes1211
Ending balance, accumulated OCI, net of taxes$(26)$(32)$(6)$(8)
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(a)Tax reclassified from accumulated OCI is reported in the income tax expense line item of the consolidated income statement.
(b)For the portion of unrecognized pension and other postretirement benefit costs relating to the Utilities, costs are recorded into, and amortized out of, regulatory assets instead of OCI. The net actuarial losses and prior service costs recognized during the period are included in the computation of total periodic pension and other postretirement benefit cost. See Notes E and F.



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Note B —– Regulatory Matters
Rate Plans
In October 2021, O&R, the New York State Department of Public Service (NYSDPS) and other parties entered into a Joint Proposal for new electric and gas rate plans for the three-year period January 2022 through December 2024 (the Joint Proposal). The Joint Proposal is subject to NYSPSC approval. The Joint Proposal includes certain COVID-19 provisions, such as: recovery of 2020 late payment charges over 3 years ($2.8 million); reconciliation of late payment charges to amounts reflected in rates for years 2021 through 2024, with full recovery/refund via surcharge/sur-credit once the annual variance equals or exceeds 5 basis points of return on equity; and reconciliation of write-offs of customer accounts receivable balances to amounts reflected in rates from January 1, 2020 through December 31, 2024, with full recovery/refund via surcharge/sur-credit once the annual variance equals or exceeds 5 basis points of return on equity. The following tables contain a summary of the proposed rate plans.

O&R New York – Electric
Effective periodJanuary 2022 – December 2024 (c)
Base rate changes
Yr. 1 – $4.9 million (a)
Yr. 2 – $16.2 million (a)
Yr. 3 – $23.1 million (a)
Amortizations to income of net
regulatory (assets) and liabilities (b)
Yr. 1 – $11.8 million
Yr. 2 – $13.5 million
Yr. 3 – $15.2 million
Other revenue sourcesPotential earnings adjustment mechanism incentives for energy efficiency and other potential incentives of up to:
Yr. 1 – $3.3 million
Yr. 2 – $2.3 million
Yr. 3 – $4.0 million

Revenue decoupling mechanismsContinuation of reconciliation of actual to authorized electric delivery revenues.
Recoverable energy costsContinuation of current rate recovery of purchased power and fuel costs.
Negative revenue adjustments
Potential charges if certain performance targets relating to service, reliability, safety and other matters are not met:
Yr. 1 – $4.3 million
Yr. 2 – $4.4 million
Yr. 3 – $5.1 million
Cost reconciliationsReconciliation of expenses for pension and other postretirement benefits, environmental remediation costs, property taxes (d), energy efficiency program (e), major storms, and certain other costs to amounts reflected in rates.
Net utility plant reconciliations
Target levels reflected in rates: Electric average net plant target
Yr. 1 – $1,175 million
Yr. 2 – $1,198 million
Yr. 3 – $1,304 million
Average rate base
Yr. 1 – $1,021 million
Yr. 2 – $1,044 million
Yr. 3 – $1,144 million
Weighted average cost of capital (after-tax)
Yr. 1 – 6.77 percent
Yr. 2 – 6.73 percent
Yr. 3 – 6.72 percent
Authorized return on common equity9.2 percent
Earnings sharing
Most earnings above an annual earnings threshold of 9.7 percent are to be applied to reduce regulatory assets for environmental remediation and other costs accumulated in the rate year.


Cost of long-term debt
Yr. 1 – 4.58 percent
Yr. 2 – 4.51 percent
Yr. 3 – 4.49 percent
Common equity ratio48 percent
(a) The Joint Proposal recommends that these base rate changes may be implemented with increases of: Yr. 1 - $11.7 million; Yr. 2 - $11.7 million; and Yr. 3 - $11.7 million.
(b) Reflects amortization of, among other things, previously incurred incremental deferred storm costs over a five-year period. See "Other Regulatory Matters," below.
(c) If at the end of any year, Con Edison’s investments in its non-utility businesses exceed 15 percent of Con Edison’s total consolidated revenues, assets or cash flow, or if the ratio of holding company debt to total consolidated debt rises above 20 percent, O&R is required to notify the NYSPSC and submit a ring-fencing plan or a demonstration why additional ring-fencing measures are not necessary.
(d) Deferrals for property taxes are limited to 90 percent of the difference from amounts reflected in rates, subject to an annual maximum for the remaining difference of not more than a maximum number of basis points impact on return on common equity: Yr. 1 - 10.0 basis points; Yr. 2 - 7.5 basis points; and Yr. 3 - 5.0 basis points.
(e) Energy efficiency costs are expensed as incurred. Such costs are subject to a cumulative reconciliation that is evenly distributed over the term of the rate plan subject to the caps set forth in the January 2020 NYSPSC New Efficiency New York (“NENY”) order. If the NYSPSC modifies O&R's NENY budgets during the rate term, such modifications will be reflected at the time of the cumulative reconciliations.


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O&R New York – Gas
Effective periodJanuary 2022 – December 2024 (b)
Base rate changes
Yr. 1 – $0.7 million (a)
Yr. 2 – $7.4 million (a)
Yr. 3 – $9.9 million (a)
Amortization to income of net regulatory (assets) and liabilities
Yr. 1 – $0.8 million
Yr. 2 – $0.7 million
Yr. 3 – $0.3 million
Other revenue sources
Potential earnings adjustment mechanism incentives for energy efficiency and other potential incentives of up to:
Yr. 1 - $0.2 million
Yr. 2 - $0.2 million
Yr. 3 - $0.4 million

Potential positive rate adjustment for gas safety and performance of up to:
Yr. 1 – $1.2 million
Yr. 2 – $1.3 million
Yr. 3 – $1.4 million
Revenue decoupling mechanismsContinuation of reconciliation of actual to authorized gas delivery revenues.

Recoverable energy costsContinuation of current rate recovery of purchased gas costs.
Negative revenue adjustments
Potential charges if performance targets relating to service, safety and other matters are not met:
Yr. 1 – $6.3 million
Yr. 2 – $6.7 million
Yr. 3 – $7.3 million
Cost reconciliationsReconciliation of expenses for pension and other postretirement benefits, environmental remediation costs, property taxes (c), energy efficiency program (d), major storms and certain other costs to amounts reflected in rates.
Net utility plant reconciliations
Target levels reflected in rates: Gas average net plant target
Yr. 1 – $720 million
Yr. 2 – $761 million
Yr. 3 – $803 million
Average rate base
Yr. 1 – $566 million
Yr. 2 – $607 million
Yr. 3 – $649 million
Weighted average cost of capital (after-tax)
Yr. 1 – 6.77 percent
Yr. 2 – 6.73 percent
Yr. 3 – 6.72 percent
Authorized return on common equity9.2 percent
Earnings sharingMost earnings above an annual earnings threshold of 9.7 percent are to be applied to reduce regulatory assets for environmental remediation and other costs accumulated in the rate year.
Cost of long-term debt
Yr. 1 – 4.58 percent
Yr. 2 – 4.51 percent
Yr. 3 – 4.49 percent
Common equity ratio48 percent
(a) The Joint Proposal recommends that these base rate changes may be implemented with increases of: Yr. 1 – $4.4 million; Yr. 2 - $4.4 million; and Yr. 3 - $4.4 million.
(b) If at the end of any year, Con Edison’s investments in its non-utility businesses exceed 15 percent of Con Edison’s total consolidated revenues, assets or cash flow, or if the ratio of holding company debt to total consolidated debt rises above 20 percent, O&R is required to notify the NYSPSC and submit a ring-fencing plan or a demonstration why additional ring-fencing measures are not necessary.
(c) Deferrals for property taxes are limited to 90 percent of the difference from amounts reflected in rates, subject to an annual maximum for the remaining difference of not more than a maximum number of basis points impact on return on common equity: Yr. 1 - 10.0 basis points; Yr. 2 - 7.5 basis points; and Yr. 3 - 5.0 basis points.
(d) Energy efficiency costs are expensed as incurred. Such costs are subject to a cumulative reconciliation that is evenly distributed over the term of the rate plan subject to the caps set forth in the January 2020 NYSPSC New Efficiency New York (“NENY”) order. If the NYSPSC modifies O&R’s NENY budgets during the rate term, such modifications will be reflected at the time of the cumulative reconciliations.












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Rockland Electric Company (RECO)
In February 2017,May 2021, RECO filed a request with the New Jersey Board of Public Utilities (NJBPU) approved a stipulation of settlement for a RECOan electric rate plan commencing March 2017. The following table contains a summaryincrease of the electric rate plan.

RECO
Effective periodMarch 2017 (a)
Base rate changesYr. 1 - $1.7 million
Amortization to income of net regulatory (assets) and liabilities$0.2 million over three years and continuation of $(25.6) million of deferred storm costs over four years expiring July 31, 2018 (b)
Recoverable energy costsCurrent rate recovery of purchased power costs.
Cost reconciliationsNone
Average rate baseYr. 1 - $178.7 million
Weighted average cost of capital (after-tax)7.47 percent
Authorized return on common equity9.6 percent
Cost of long-term debt5.37 percent
Common equity ratio49.7 percent
(a)Effective until a new rate plan approved by the NJBPU goes into effect.
(b)In January 2016, the NJBPU approved RECO’s plan to spend $15.7 million in capital over three years to harden its electric system against storms, the costs of which RECO, beginning in 2017, is collecting through a customer surcharge.

In September 2017, RECO, the New Jersey Division of Rate Counsel and the New Jersey Board of Public Utilities entered into a settlement agreement, which is subject to FERC approval, that increases RECO's annual transmission revenue requirement from $11.8 million to $17.7$16.9 million, effective April 2017.February 2022. The revenue requirement reflectsfiling reflected a return on common equity of 10.010.00 percent and a common equity ratio of 49.25 percent. RECO also seeks an increase in its annual storm allowance of $1 million, recovery of deferred costs associated with Tropical Storm Isaias, and the collection of various deferred COVID-19 related costs. In October 2021, RECO filed an update to the request it filed in May 2021. The company increased its requested February 2022 rate increase to $19.5 million and decreased the common equity ratio to 48.84 percent. The updated filing continues to reflect a return on common equity of 10.00 percent.


In September 2021, RECO requested authorization from the NJBPU to defer $3.7 million in incremental storm preparation costs for Tropical Storm Henri.

COVID-19 Regulatory Matters
Governors, public utility commissions and other regulatory agencies in the states in which the Utilities operate have issued orders related to the COVID-19 pandemic that impact the Utilities as described below.

New York State Regulation
In March 2020, former New York State Governor Cuomo declared a State Disaster Emergency for the State of New York due to the COVID-19 pandemic and signed the "New York State on PAUSE" executive order that temporarily closed all non-essential businesses statewide. The former Governor then lifted these closures over time and ended the emergency declaration in June 2021. As a result of the emergency declaration, and due to economic conditions, the NYSPSC and the Utilities have worked to mitigate the potential impact of the COVID-19 pandemic on the Utilities, their customers and other stakeholders.

In March 2020, the Utilities began suspending service disconnections, certain collection notices, final bill collection agency activity, new late payment charges and certain other fees for all customers. The Utilities also began providing payment extensions for all customers that were scheduled to be disconnected prior to the start of the COVID-19 pandemic. In June 2020, the state of New York enacted a law prohibiting New York utilities, including CECONY and O&R, from disconnecting residential customers, and starting in May 2021 small business customers, during the COVID-19 state of emergency, which ended in June 2021. In addition, such prohibitions will apply for an additional 180 days after the state of emergency ends (December 21, 2021) for residential and small business customers who have experienced a change in financial circumstances due to the COVID-19 pandemic. For the three and nine months ended September 30, 2021, the estimated late payment charges and fees that were not billed were approximately $11��million and $46 million lower than the amounts that were approved to be collected pursuant to CECONY's rate plans, respectively, and $1 million and $3 million lower than the amounts that were approved to be collected pursuant to O&R's rate plans, respectively (see Note K). For the three and nine months ended September 30, 2020, the estimated late payment charges and fees that were not billed were approximately $17 million and $36 million lower than the amounts that were approved to be collected pursuant to CECONY's rate plans, respectively, and $1 million and $2 million lower than the amounts that were approved to be collected pursuant to O&R's rate plans, respectively (see Note K). In April 2021, CECONY filed a petition with the NYSPSC to timely establish a surcharge recovery mechanism to collect $52 million of late payment charges and fees, offset for related savings, for the year ended December 31, 2020 to begin in September 2021 and end in December 2022. The petition also requested a surcharge recovery or surcredit mechanism for any fee deferrals for 2021 and 2022 starting in January of the subsequent year over a twelve-month period, respectively. Public comments in response to the petition were filed in August 2021. CECONY resumed late payment charges for commercial and residential customers who have not experienced a change in financial circumstances due to the COVID-19 pandemic on September 3, 2021 and October 1, 2021, respectively.O&R resumed late payment charges for commercial and residential customers who have not experienced a change in financial circumstances due to the COVID-19 pandemic on October 1, 2021.


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The Utilities’ New York rate plans allow them to defer costs resulting from a change in legislation, regulation and related actions that have taken effect during the term of the rate plans once the costs exceed a specified threshold. The total reserve increases to the allowance for uncollectible accounts from January 1, 2020 through September 30, 2021 reflecting the impact of the COVID-19 pandemic for CECONY electric and gas operations and O&R electric and gas operations were $235 million and $7 million, respectively, and were deferred pursuant to the legislative, regulatory and related actions provisions of the rate plans as a result of the New York State on PAUSE and related executive orders, that have since been lifted, as described above. The Utilities’ New York rate plans also provide for an allowance for write-offs of customer accounts receivable balances. The above amounts deferred pursuant to the legislative, regulatory and related actions provisions were reduced by the amount that the actual write-offs of customer accounts receivable balances were below the allowance reflected in rates which differences were $12 million and $2 million for CECONY and O&R, respectively, from March 1, 2020 through September 30, 2021.

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

In June 2020, the NYSPSC established a generic proceeding on the impacts of the COVID-19 pandemic and sought comment on a variety of COVID-19 related issues. In July 2020, the Utilities submitted joint comments with other large utilities in New York State that included a formal request to defer all COVID-19 related costs and for a surcharge mechanism to collect such deferrals based upon the individual utility's need. In January 2021, the NYSDPS provided guidance to New York utilities that no additional mechanisms are required because there are already established mechanisms for utility recovery of unexpected material expenses through rate plan change in legislation, regulation and related actions provisions of their respective rate plans and the filing of individual deferral petitions. The guidance further provided that utilities deferring COVID-19 related costs pursuant to the provisions that allow deferral of costs resulting from a change in legislation, regulation and related actions must comply with the provisions of their rate plans, be able to demonstrate the nexus between the changes in law or regulation and the specific revenue and expense items, and consider any offsetting cost savings due to the pandemic.

As of December 31, 2020, CECONY deferred, for New York City residential customers, $54.9 million of higher summer generation capacity supply costs. CECONY recovered such costs from customers as of October 31, 2021.

In April 2021, New York State passed a law that creates a program that allows eligible residential renters in New York State who require assistance with rent and utility bills to have up to twelve months of electric and gas utility bill arrears forgiven, provided that such arrears were accrued on or after March 13, 2020. The program will be administered by the State Office of Temporary Disability Assistance in coordination with the NYSDPS. Under the program, CECONY and O&R would qualify for a refundable tax credit for New York State gross-receipts tax equal to the amount of arrears waived by the Utilities in the year that the arrears are waived and certified by the NYSPSC.
In May 2021, CECONY and O&R, along with other large New York utilities, submitted joint comments to the NYSDPS' February 2021 report on New York State’s Energy Affordability Policy. The report recommends, among other things, that residential and commercial customers’ late payment fees and interest on deferred payment agreements be waived until two years after the expiration of the New York State moratorium on utility terminations (the moratorium will expire on December 21, 2021) and each utility develop an arrears management program to mitigate the financial burdens of the COVID-19 pandemic on New York households and that program costs be shared, perhaps equally, between shareholders and customers.The May 2021 joint comments stated that it is not necessary for the NYSPSC to adopt the report’s COVID-19 related recommendations because New York State already passed laws that address the issues in the report, as described above.

The Utilities’ rate plans have revenue decoupling mechanisms in their New York electric and gas businesses that largely reconcile actual energy delivery revenues to the authorized delivery revenues approved by the NYSPSC per month and accumulate the deferred balances semi-annually under CECONY's electric rate plan (January through June and July through December, respectively) and annually under CECONY's gas rate plan and O&R's New York electric and gas rate plans (January through December). Differences are accrued with interest each month for CECONY's and O&R's New York electric customers and after the annual deferral period ends for CECONY's and O&R's New York gas customers for refund to, or recovery from customers, as applicable. Generally, the refund to or recovery from customers begins August and February of each year over an ensuing six-month period for CECONY's electric customers and February of each year over an ensuing twelve-month period for CECONY's gas and O&R's New York electric and gas customers.

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New Jersey State Regulation
In March 2020, New Jersey Governor Murphy declared a Public Health Emergency and State of Emergency for the State of New Jersey. In June 2021, the Governor ended the emergency declaration. As a result of the emergency declaration, and due to economic conditions, the NJBPU and RECO have worked to mitigate the potential impact of the COVID-19 pandemic on RECO, its customers and other stakeholders. In March 2020, RECO began suspending late payment charges, terminations for non-payment, and no access fees during the COVID-19 pandemic. The suspension of these fees continued through July 31, 2021 and are not material.

In July 2020, the NJBPU authorized RECO and other New Jersey utilities to create a COVID-19-related regulatory asset by deferring prudently incurred incremental costs related to the COVID-19 pandemic beginning on March 9, 2020, and has extended such deferrals through December 31, 2022. RECO deferred net incremental COVID-19 related costs of $0.9 million through September 30, 2021.

Other Regulatory Matters
OnIn August 16,2018, the NYSPSC ordered CECONY to begin on January 1, 2019 to credit the company's electric and gas customers, and to begin on October 1, 2018 to credit its steam customers, with the net benefits of the federal Tax Cuts and Jobs Act of 2017 (TCJA) as measured based on amounts reflected in its rate plans prior to the New York State Public Service Commission (NYSPSC)enactment of the TCJA in December 2017. The net benefits include the revenue requirement impact of the reduction in the corporate federal income tax rate to 21 percent, the elimination for utilities of bonus depreciation and the amortization of excess deferred federal income taxes.
CECONY, under its electric rate plan that was approved in January 2020, is amortizing its TCJA net benefits prior to January 1, 2019 allocable to its electric customers ($377 million) over a three-year period, the “protected” portion of its net regulatory liability for future income taxes related to certain accelerated tax depreciation benefits allocable to its electric customers ($1,663 million) over the remaining lives of the related assets and the remainder, or “unprotected” portion of the net regulatory liability allocable to its electric customers ($784 million) over a five-year period. CECONY, under its gas rate plan that was approved in January 2020, is amortizing its remaining TCJA net benefits prior to January 1, 2019 allocable to its gas customers ($63 million) over a two-year period, the protected portion of its net regulatory liability for future income taxes allocable to its gas customers ($725 million) over the remaining lives of the related assets and the unprotected portion of the net regulatory liability allocable to its gas customers ($107 million) over a five-year period.
CECONY's net benefits prior to October 1, 2018 allocable to the company’s steam customers ($15 million) are being amortized over a three-year period. CECONY’s net regulatory liability for future income taxes, including both the protected and unprotected portions, allocable to the company’s steam customers ($185 million) is being amortized over the remaining lives of the related assets (with the amortization period for the unprotected portion subject to review in its next steam rate proceeding).

O&R, under its current electric and gas rate plans, has reflected its TCJA net benefits in its electric and gas rates beginning as of January 1, 2019. Under the rate plans, O&R is amortizing its net benefits prior to January 1, 2019 ($22 million) over a three-year period, the protected portion of its net regulatory liability for future income taxes ($123 million) over the remaining lives of the related assets and the unprotected portion ($30 million) over a fifteen-year period. Pursuant to the October 2021 Joint Proposal, O&R will amortize the remaining unprotected portion of its net regulatory liability for future income taxes ($34 million) over a six-year period beginning January 1, 2022.

In January 2018, the NYSPSC issued an order in its proceeding investigating an April 21, 2017 Metropolitan Transportation Authority (MTA) subway power outage. The order indicated that the investigation determined that the outage was caused byinitiating a failure of CECONY’s electricity supply to a subway station, which led to a lossfocused operations audit of the subway signals, and that oneUtilities’ financial accounting for income taxes. The audit is investigating the Utilities’ inadvertent understatement of a portion, the secondary services to the MTA facility had been improperly rerouted andamount of which may be material, of their calculation of total federal income tax expense for ratemaking purposes. The understatement was not properly documented by the company. The order also indicated that the loss of power to the subway station affected multiple subway lines and caused widespread delays across the subway system. Pursuant to the order, the company is required to take certain actions, including performing inspections of electrical equipment that serves the MTA system, analyzing power supply and power quality events affecting the MTA’s signaling services, providing new monitoring and other equipment and filing monthly reports with the NYSPSC on all of the company's activities related to the MTA system. In July 2017,calculation of plant retirement-related cost of removal. As a result of such understatement, the ChairmanUtilities accumulated significant income tax regulatory assets that were not reflected in O&R’s rate plans prior to 2014, CECONY’s electric and gas rate plans prior to 2015 and 2016, respectively, and is currently not reflected in CECONY’s steam rate plan. As part of the NYSPSC notifiedaudit, the companyUtilities plan to pursue a private letter ruling from the Internal Revenue Service (IRS) that the April 21, 2017 subway power outage incident will likely resultis expected to confirm, among other things, that in order to comply with IRS normalization rules, such understatement may not be corrected through a prudence reviewwrite-down of a portion of the reasonablenessregulatory asset and must be corrected through an increase in future years’ revenue requirements. The regulatory asset ($1,180 million and $26 million for CECONY and O&R, respectively, as of CECONY's actionsSeptember 30, 2021 and conduct.$1,200 million and $29 million for CECONY and O&R, respectively, as of December 31, 2020) is netted against the future income tax regulatory liability on the Companies’ consolidated balance sheet. The order did not commence a prudence review or address cost recovery. Under the New York State Administrative Procedure Act, the order could not remain in effect for more than 90 days without further action by the NYSPSC because it was adopted on an emergency basis. At its October 19, 2017 meeting, the NYSPSC approved another order in this proceeding. The NYSPSC has not yet issued this other order. The company isUtilities are unable to estimate the amount or range of itstheir possible costsloss, if any, related to this matter. At September 30, 2021, the Utilities have not accrued a liability related to this matter.



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21
Table

In October 2020, the NYSPSC issued an order instituting a proceeding to consider requiring New York’s large, investor-owned utilities, including CECONY and O&R, to annually disclose what risks climate change poses to their companies, investors and customers going forward. The order notes that some holding companies, including Con Edison, already disclose climate change risks at the holding company level, but states that the NYSPSC believes that climate-related risk disclosures should be issued specific to the operating companies in New York, such as CECONY and O&R, and that such climate-related risk disclosures should be included annually with the utilities’ financial reports. In December 2020, CECONY and O&R, along with other large New York utilities, filed comments supporting climate change risk disclosures in annual reports filed with the NYSPSC and recommended the use of Contentsan industry-specific template.

In May 2020, the president of the United States issued the "Securing the United States Bulk-Power System" executive order. The executive order declares threats to the bulk-power system by foreign adversaries constitute a national emergency and prohibits the acquisition, importation, transfer or installation of certain bulk-power system electric equipment that is sourced from foreign adversaries. In January 2021, the president of the United States suspended the May 2020 executive order for 90 days. In April 2021, the executive order was reinstated (and expired shortly thereafter) and the Department of Energy (DOE) subsequently issued a request for information to assist the DOE in developing additional orders and/or regulations to secure the United States’ critical electric infrastructure. In September 2021, the Cybersecurity and Infrastructure Security Agency and the National Institute of Standards and Technology issued preliminary cybersecurity goals for critical infrastructure control systems, with final goals to be issued by September 2022. The Companies are unable to predict the impact on them of any orders or regulations that may be adopted regarding critical infrastructure.

In July 2021, the NYSPSC approved a settlement agreement among CECONY, O&R and the NYSDPS that fully resolves all issues and allegations that have been raised or could have been raised by the NYSPSC against CECONY and O&R with respect to: (1) the July 2018 rupture of a CECONY steam main located on Fifth Avenue and 21st Street in Manhattan (the “2018 Steam Incident”); (2) the July 2019 electric service interruptions to approximately 72,000 CECONY customers on the west side of Manhattan and to approximately 30,000 CECONY customers primarily in the Flatbush area of Brooklyn (the “2019 Manhattan and Brooklyn Outages”); (3) the August 2020 electric service interruptions to approximately 330,000 CECONY customers and approximately 200,000 O&R customers following Tropical Storm Isaias (the “Tropical Storm Isaias Outages”) and (4) the August 2020 electric service interruptions to approximately 190,000 customers resulting from faults at CECONY’s Rainey substation following Tropical Storm Isaias (the “Rainey Outages”). Pursuant to the settlement agreement, CECONY and O&R agreed to a total settlement amount of $75.1 million and $7.0 million, respectively. CECONY and O&R agreed to forgo recovery from customers of $25 million and $2.5 million, respectively, associated with the return on existing storm hardening assets beginning with the next rate plan for each utility (over a period of 35 years). CECONY and O&R also agreed to incur ongoing operations and maintenance costs of up to $15.8 million and $2.9 million, respectively, for, among other things, costs to maintain a certain level of contractor and vehicle storm emergency support and storm preparation audits. For CECONY, the settlement agreement includes previously incurred or accrued costs of $34.3 million, including negative revenue adjustments of $5 million for the Rainey Outages and $15 million for the 2019 Manhattan and Brooklyn Outages and $14.3 million in costs to reimburse customers for food and medicine spoilage and other previously incurred expenses related to Tropical Storm Isaias and the 2018 Steam Incident. For O&R, the settlement agreement includes previously incurred costs of $1.6 million to reimburse customers for food and medicine spoilage and other expenses related to the Tropical Storm Isaias Outages.

Additional information relating to the 2018 Steam Incident, 2019 Manhattan and Brooklyn Outages and Tropical Storm Isaias Outages follow.

2018 Steam Incident: In July 2018, the NYSPSC commenced an investigation into the rupture of a CECONY steam main located on Fifth Avenue and 21st Street in Manhattan. Debris from the incident included dirt and mud containing asbestos. The response to the incident required the closing of buildings and streets for various periods. As of June 30, 2021, with respect to the incident, the company incurred operating costs of $17 million for property damage, clean-up and other response costs and invested $9 million in capital and retirement costs. During the second quarter of 2020, the company accrued a $3 million liability related to this matter. As described above, in July 2021, CECONY entered into a settlement agreement that fully resolves all issues and allegations with respect to this matter.

2019 Manhattan and Brooklyn Outages:In July 2019, electric service was interrupted to approximately 72,000 CECONY customers on the west side of Manhattan. Also in July 2019, electric service was interrupted to approximately 30,000 CECONY customers primarily in the Flatbush area of Brooklyn. In November 2020, the NYSPSC issued an order in its proceedings investigating these July 2019 power outages ordering CECONY to
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show cause why the NYSPSC should not commence a review of the prudency of CECONY’s actions and/or omissions prior to, during, and after the July 2019 outages in Manhattan and Brooklyn, and pursue civil or administrative penalties in the amount of up to $24.8 million for CECONY’s alleged failure to comply with certain requirements. The order further indicated that should the NYSPSC confirm some or all of the apparent violations identified in the order or other orders issued by the NYSPSC in the future in connection with this proceeding, and should such confirmed violations be classified as findings of repeated violations of the Public Service Law or rules or regulations adopted pursuant thereto that demonstrate a failure of CECONY to continue to provide safe and adequate service, the NYSPSC would be authorized to commence a proceeding under Public Service Law Section 68(2) to revoke or modify CECONY’s certificate as it relates to its service territory or any portion thereof.

In December 2020, CECONY filed a response to the NYSPSC order demonstrating why the NYSPSC should not commence a penalty or prudence action against CECONY. CECONY stated that the NYSPSC order misapplied Section 25-a of the Public Service Law by ignoring the reasonable compliance standard under the statute and instead, was imposing a strict liability standard. For both outages, CECONY presented evidence that it either had complied or reasonably complied with NYSPSC requirements. With respect to the Manhattan outage, CECONY stated that a prudency proceeding was not justified because CECONY’s actions with respect to the Manhattan outage were reasonable based on the information the company had at the time. With respect to the Brooklyn outage, the company stated that the order failed to allege that improper company actions caused the outage. During 2019, CECONY recorded negative revenue adjustments associated with reliability performance provisions of $15 million in aggregate primarily related to these outages. As described above, in July 2021, CECONY entered into a settlement agreement that fully resolves all issues and allegations with respect to this matter.

Tropical Storm Isaias Outages:In August 2020, Tropical Storm Isaias caused significant damage to the Utilities’ electric distribution systems and interrupted service to approximately 330,000 CECONY electric customers and approximately 200,000 O&R electric customers. As of September 30, 2021, CECONY incurred costs for Tropical Storm Isaias of $175 million (including $84 million of operation and maintenance expenses charged against a storm reserve pursuant to its electric rate plan, $64 million of capital expenditures and $27 million (including $7.5 million for food and medicine spoilage claims) of operation and maintenance expenses). As of September 30, 2021, O&R incurred costs for Tropical Storm Isaias of $26.5 million (including $19.2 million of operation and maintenance expenses charged against a storm reserve pursuant to its New York electric rate plan, $5.7 million of capital expenditures and $1.6 million for food and medicine spoilage claims). As of September 30, 2021, RECO incurred costs for Tropical Storm Isaias of $11.3 million (including $7.5 million of operation and maintenance expenses charged against a storm reserve pursuant to its rate plan, $2.5 million of capital expenditures and $1.3 million for food and medicine spoilage claims). The Utilities’ electric rate plans provide for recovery of operating costs and capital expenditures under different provisions. The Utilities’ incremental operating costs attributable to storms are to be deferred for recovery as a regulatory asset under their electric rate plans, while capital expenditures, up to specified levels, are reflected in rates under their electric rate plans. The provisions of the Utilities’ New York electric rate plans that impose negative revenue adjustments for operating performance provide for exceptions for major storms and catastrophic events beyond the control of the companies, including natural disasters such as hurricanes and floods.

In November 2020, the NYSPSC issued an order in its proceedings investigating the New York utilities’ preparation for and response to Tropical Storm Isaias that ordered the Utilities to show cause why (i) civil penalties or appropriate injunctive relief should not be imposed against CECONY (in the amount of up to $102.3 million relating to 33 alleged violations) and against O&R (in the amount of up to $19 million relating to 38 alleged violations) to remedy such noncompliance, and (ii) a prudence proceeding should not be commenced against the Utilities for potentially imprudent expenditures of ratepayer funds related to the matter. The order stated that given the continuing nature of the investigation of this matter by the NYSDPS, the NYSPSC may amend the order to include any subsequently determined apparent violations identified by the NYSDPS. In addition, the order indicated that should the NYSPSC confirm some or all of the apparent violations identified in the order or other orders issued by the NYSPSC in the future in connection with this proceeding, and should such respective confirmed violations be classified as findings of repeated violations of the Public Service Law or rules or regulations adopted pursuant thereto that demonstrate a failure of CECONY and/or O&R to continue to provide safe and adequate service, the NYSPSC would be authorized to commence a proceeding under Public Service Law Section 68(2) to revoke or modify CECONY’s and/or O&R’s certificate as it relates to its service territory or any portion thereof.

In December 2020, CECONY and O&R filed responses to the NYSPSC order demonstrating why the NYSPSC should not commence penalty or prudence actions against them. The Utilities stated that the NYSPSC orders misapplied Section 25-a of the Public Service Law by ignoring the reasonable compliance standard under the statute and instead, was imposing a strict liability standard. CECONY and O&R also presented evidence that the order either misrepresented the applicable requirements or ignored that the Utilities were acting pursuant to

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practices approved by the NYSPSC. Finally, CECONY and O&R stated that there was no basis to commence a prudence proceeding because the Utilities acted reasonably based on the information available and the circumstances at the time. As described above, in July 2021, CECONY and O&R entered into a settlement agreement that fully resolves all issues and allegations with respect to this matter.

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Regulatory Assets and Liabilities
Regulatory assets and liabilities at September 30, 20172021 and December 31, 20162020 were comprised of the following items:
 
  
         Con Edison        CECONY
(Millions of Dollars)2021202020212020
Regulatory assets
Unrecognized pension and other postretirement costs$2,527$3,241$2,394$3,065
Environmental remediation costs846865780791
Pension and other postretirement benefits deferrals438315382272
Revenue taxes385356369342
COVID-19 pandemic deferrals274115269113
Deferred storm costs27719515583 
Property tax reconciliation245241245239
MTA power reliability deferral152188152188
System peak reduction and energy efficiency programs145124145124
Deferred derivative losses - long term136120124111
Municipal infrastructure support costs49624962
Brooklyn Queens demand management program35363536
Meadowlands heater odorization project30323032
Preferred stock redemption20212021
Non-wire alternative projects23182318
Unamortized loss on reacquired debt17211519
Recoverable REV demonstration project costs15201418
Gate station upgrade project15251525
Other274200257186
Regulatory assets – noncurrent5,9036,1955,4735,745
Deferred derivative losses - short term166190155177
Recoverable energy costs39763267
Regulatory assets – current205266187244
Total Regulatory Assets$6,108$6,461$5,660$5,989
Regulatory liabilities
Future income tax$2,040$2,207$1,896$2,062
Allowance for cost of removal less salvage1,1141,090950932
Net unbilled revenue deferrals184198184198
TCJA net benefits*167295164286
Net proceeds from sale of property111137111137
Deferred derivative gains - long term11051014
Pension and other postretirement benefit deferrals98855346
System benefit charge carrying charge71646357
Property tax refunds35363535
BQDM and REV Demo reconciliations26272225
Sales and use tax refunds18161716
Energy efficiency portfolio standard unencumbered funds17119— 
Earnings sharing - electric, gas and steam13151010
Unrecognized other postretirement costs1211— — 
Settlement of gas proceedings11211121
Settlement of prudence proceeding6565
Workers' compensation5353
Other341297294257
Regulatory liabilities – noncurrent4,3794,5133,9414,094
Deferred derivative gains - short term45184237
Refundable energy costs312854
Revenue decoupling mechanism8—— — 
Regulatory liabilities – current4903642811
Total Regulatory Liabilities$4,869$4,549$4,369$4,105
* See "Other Regulatory Matters," above.

The recognition of the return on regulatory assets is determined by the Utilities’ rate plans or orders issued by state regulators. In general, the Utilities receive or are being credited with a return at the Other Customer-Provided

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         Con Edison         CECONY
(Millions of Dollars)20172016 2017
2016
Regulatory assets     
Unrecognized pension and other postretirement costs$2,626$2,874
$2,476$2,730
Future income tax2,4192,439
2,3082,325
Environmental remediation costs803823
690711
Revenue taxes341295
325280
Deferred derivative losses8848 7842
Pension and other postretirement benefits deferrals7038 457
Municipal infrastructure support costs5744 5744
Deferred storm costs4356
—
3
Unamortized loss on reacquired debt3943
3741
Indian Point Energy Center program costs3250 3250
O&R property tax reconciliation2937
—
—
Brooklyn Queens demand management program2829 2829
Preferred stock redemption2425 2425
Surcharge for New York State assessment1828 1626
Net electric deferrals1324
1324
Workers’ compensation1213 1213
O&R transition bond charges1015
—
—
Recoverable energy costs442 438
Other113101
10385
Regulatory assets – noncurrent6,7697,024
6,2486,473
Deferred derivative losses8191
7586
Recoverable energy costs289
254
Regulatory assets – current109100
10090
Total Regulatory Assets$6,878$7,124
$6,348$6,563
Regulatory liabilities




Allowance for cost of removal less salvage$798$755
$671$641
Pension and other postretirement benefit deferrals202193 174162
Net unbilled revenue deferrals166145
166145
Property tax reconciliation140178
140178
Unrecognized other postretirement costs8460 8460
Settlement of prudence proceeding7395
7395
Carrying charges on repair allowance and bonus depreciation4968 4867
New York State income tax rate change4861
4860
Variable-rate tax-exempt debt – cost rate reconciliation3655 3248
Property tax refunds281 281
Settlement of gas proceedings2727 2727
Base rate change deferrals2640
2640
Earnings sharing - electric, gas and steam2439
1528
Net utility plant reconciliations1116
815
Other161172
133145
Regulatory liabilities – noncurrent1,8731,905
1,6731,712
Refundable energy costs2929 95
Revenue decoupling mechanism2771
2761
Deferred derivative gains228
224
Regulatory liabilities – current58128
3890
Total Regulatory Liabilities$1,931$2,033
$1,711$1,802
Capital rate for regulatory assets that have not been included in rate base, and receive or are being credited with a return at the pre-tax weighted average cost of capital once the asset is included in rate base. Similarly, the Utilities pay to or credit customers with a return at the Other Customer-Provided Capital rate for regulatory liabilities that have not been included in rate base, and pay to or credit customers with a return at the pre-tax weighted average cost of capital once the liability is included in rate base. The Other Customer-Provided Capital rate for the nine months ended September 30, 2021 and 2020 was 1.80 percent and 2.65 percent, respectively.


In general, the Utilities are receiving or being credited with a return on their regulatory assets for which a cash outflow has been made ($2,027 million and $1,696 million for Con Edison, and $1,817 million and $1,509 million for CECONY at September 30, 2021 and December 31, 2020, respectively). Regulatory assets of RECO for which a cash outflow has been made ($24 million and $31 million at September 30, 2021 and December 31, 2020, respectively) are not receiving or being credited with a return. RECO recovers regulatory assets over a period of up to four years or until they are addressed in its next base rate case in accordance with the rate provisions approved by the New Jersey Board of Public Utilities. Regulatory liabilities are treated in a consistent manner.

Regulatory assets that represent future financial obligations and were deferred in accordance with the Utilities’ rate plans or orders issued by state regulators do not earn a return until such time as a cash outlay has been made. Regulatory liabilities are treated in a consistent manner. At September 30, 2021 and December 31, 2020, regulatory assets for Con Edison and CECONY that did not earn a return consisted of the following items:
Regulatory Assets Not Earning a Return*
                  Con Edison                CECONY
(Millions of Dollars)2021202020212020
Unrecognized pension and other postretirement costs$2,527$3,241$2,394$3,065
Environmental remediation costs832855765781
Revenue taxes364336349323
Deferred derivative losses - long term136120124111
Other56245624
Deferred derivative losses - current166190155177
Total$4,081$4,766$3,843$4,481
*This table includes regulatory assets not earning a return for which no cash outlay has been made.
The recovery periods for regulatory assets for which a cash outflow has not been made and that do not earn a return have not yet been determined, except as noted below, and are expected to be determined pursuant to the Utilities’ future rate plans to be filed or orders issued by the state regulators in connection therewith.
The Utilities recover unrecognized pension and other postretirement costs over 10 years pursuant to NYSPSC policy.
The deferral for revenue taxes represents the New York State metropolitan transportation business tax surcharge on the cumulative temporary differences between the book and tax basis of assets and liabilities of the Utilities, as well as the difference between taxes collected and paid by the Utilities to fund mass transportation. The Utilities recover the majority of the revenue taxes over the remaining book lives of the electric and gas plant assets, as well as the steam plant assets for CECONY.
The Utilities recover deferred derivative losses – current within one year, and noncurrent generally within three years.

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Note C —– Capitalization
In February 2021, a subsidiary of the Clean Energy Businesses borrowed $250 million at a variable-rate, due 2028, secured by equity interests in 4 of the company’s solar electric production 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 3 of the Clean Energy Businesses’ solar electric production projects (CED Nevada Virginia). Under the financing, the tax equity investor acquired a noncontrolling interest in the portfolio and will receive a percentage of earnings, tax attributes and cash flows. As of September 30, 2021, the tax equity investor fully funded its $263 million financing obligation. The Clean Energy Businesses will continue to consolidate this entity and will report the noncontrolling tax equity investor’s interest in the tax equity arrangement. See Note P.

In March 2017, Con Edison issued $4002021, a subsidiary of the Clean Energy Businesses agreed to issue $229 million aggregate principal amount of 3.77 percent senior notes, due 2046, secured by equity interests in CED Nevada Virginia, all of which had been issued at September 30, 2021.

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 May 2021, Con Edison redeemed at maturity $500 million of 2.00 percent debentures, due 2020, and prepaid the $4005-year debentures.

In June 2021, CECONY redeemed at maturity $640 million variableof floating rate term loan that was to mature in 2018. Also, in March 2017, a Con Edison3-year debentures.



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Development subsidiaryIn June 2021, CECONY issued $97$750 million aggregate principal amount of 4.452.40 percent senior notes,debentures, due 2042, secured by the company’s Upton County Solar project. In June 2017, CECONY issued $5002031 and $750 million aggregate principal amount of 3.8753.60 percent debentures, due 2047. 2061.

In August 2017,June 2021, Con Edison issued 4.1 million10,100,000 shares of its common sharesstock resulting in net proceeds of $343approximately $775 million, after issuance expenses, that were invested by Con Edison in its subsidiaries, principally CECONY andexpenses.

In June 2021, as part of the Clean Energy Businesses, for fundingBusinesses’ sale of their construction expendituresa renewable electric production project, $104 million of 4.52 percent senior notes, due 2032 and for other general corporate purposes.$37 million of floating rate loans, due 2024 and loan-related interest rate swaps were assumed by the buyer pursuant to the sale agreement. See Notes N and R.

In September 2021, O&R agreed to issue in December 2021 $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 carrying amounts and fair values of long-term debt at September 30, 20172021 and December 31, 20162020 were:
 
(Millions of Dollars)20212020
Long-Term Debt (including current portion) (a)Carrying
Amount		Fair
Value		Carrying
Amount		Fair
Value
Con Edison$22,280$25,655$22,349$26,808
CECONY$17,637$20,774$16,789$20,974
(Millions of Dollars)20172016
Long-Term Debt (including current portion) (a)
Carrying
Amount
Fair
Value
Carrying
Amount
Fair
Value
Con Edison$15,338$17,195$14,774$16,093
CECONY$12,571$14,213$12,073$13,268
(a)Amounts shown are net of unamortized debt expense and unamortized debt discount of $137 million and $115 million for Con Edison and CECONY, respectively, as of September 30, 2017 and $134 million and $113 million for Con Edison and CECONY, respectively, as of December 31, 2016.

(a)Amounts shown are net of unamortized debt expense and unamortized debt discount of $221 million and $188 million for Con Edison and CECONY, respectively, as of September 30, 2021 and $215 million and $176 million for Con Edison and CECONY, respectively, as of December 31, 2020.
Fair
The fair values of the Companies' long-term debt have been estimated primarily using available market information. For Con Edison, $16,559 millioninformation and $636 million of the fair value of long-term debt at September 30, 20172021 are classified as Level 2 and Level 3, respectively. For CECONY, $13,577 million and $636 million of the fair value of long-term debt at September 30, 2017 are classified as Level 2 and Level 3, respectivelyliabilities (see Note L)O). The $636 million of long-term debt classified as Level 3 is CECONY’s tax-exempt, auction-rate securities for which the market is highly illiquid and there is a lack of observable inputs.



Note D —– Short-Term Borrowing
At September 30, 2017,2021, Con Edison had $356$1,036 million of commercial paper outstanding of which $147$942 million was outstanding under CECONY’s program. The weighted average interest rate at September 30, 20172021 was 1.30.1 percent for both Con Edison and CECONY. At December 31, 2016,2020, Con Edison had $1,054$1,705 million of commercial paper outstanding of which $600$1,660 million was outstanding under CECONY’s program. The weighted average interest rate at December 31, 20162020 was 1.00.3 percent for both Con Edison and CECONY.

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At September 30, 20172021 and December 31, 2016,2020, no loans were outstanding under the Companies' December 2016 credit agreement (Credit Agreement). An immaterial amount and $2 million (including $2 million for CECONY) of letters of credit were outstanding under the Credit Agreement as of September 30, 20172021 and December 31, 2020.

In August 2021, a subsidiary of the Clean Energy Businesses prepaid in full $249 million of borrowings outstanding under, and terminated, a $613 million variable-rate construction loan facility that was secured by and used to fund construction costs for CED Nevada Virginia. At December 31, 2020, the banks’ commitments under the construction loan facility were $613 million, and $165 million of borrowings were outstanding under the construction loan facility.

In April 2021, Con Edison entered into a credit agreement (April 2021 Credit Agreement) under which banks were committed until May 18, 2021, subject to certain conditions, to provide to Con Edison a $500 million variable-rate 364-day term loan. In May 2021, Con Edison borrowed $500 million under the April 2021 Credit Agreement to repay in full all of Con Edison’s outstanding 2.00 percent debentures, Series 2016 respectively.A, that matured on May 15, 2021. In July 2021, Con Edison prepaid in full the $500 million borrowing under the April 2021 Credit Agreement with a portion of the cash proceeds received from the substantial completion of the sale of Stagecoach. See Note R.



Note E —– Pension Benefits
Total Periodic Benefit Cost
The components of the Companies’ total periodic benefit costscost for the three and nine months ended September 30, 20172021 and 20162020 were as follows:
 
For the Three Months Ended September 30,
Con EdisonCECONY
(Millions of Dollars)2021202020212020
Service cost – including administrative expenses$85$73$80$69
Interest cost on projected benefit obligation118137111129
Expected return on plan assets(274)(258)(260)(245)
Recognition of net actuarial loss197175187165
Recognition of prior service credit(4)(4)(5)(5)
TOTAL PERIODIC BENEFIT COST$122$123$113$113
Cost capitalized(41)(34)(39)(32)
Reconciliation to rate level(54)(62)(52)(59)
Total expense recognized$27$27$22$22
 For the Three Months Ended September 30,
            Con Edison         CECONY
(Millions of Dollars)2017201620172016
Service cost – including administrative expenses$66$69$61$65
Interest cost on projected benefit obligation148149139140
Expected return on plan assets(243)(237)(229)(225)
Recognition of net actuarial loss149149141141
Recognition of prior service costs(4)1(5)—
TOTAL PERIODIC BENEFIT COST$116$131$107$121
Cost capitalized(40)(51)(37)(49)
Reconciliation to rate level(14)10(16)13
Cost charged to operating expenses$62$90$54$85


For the Nine Months Ended September 30,
Con EdisonCECONY
(Millions of Dollars)2021202020212020
Service cost – including administrative expenses$257$220$241$206
Interest cost on projected benefit obligation353412332387
Expected return on plan assets(822)(775)(779)(735)
Recognition of net actuarial loss590524559496
Recognition of prior service credit(12)(12)(15)(15)
TOTAL PERIODIC BENEFIT COST$366$369$338$339
Cost capitalized(120)(98)(113)(93)
Reconciliation to rate level(165)(188)(158)(179)
Total expense recognized$81$83$67$67


Components of net periodic benefit cost other than service cost are presented outside of operating income on the Companies' consolidated income statements, and only the service cost component is eligible for capitalization. Accordingly, the service cost component is included in the line "Other operations and maintenance" and the non-service cost components are included in the line "Other deductions" in the Companies' consolidated income statements.


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Table of Contents

 For the Nine Months Ended September 30,
            Con Edison         CECONY
(Millions of Dollars)2017201620172016
Service cost – including administrative expenses$197$207$184$194
Interest cost on projected benefit obligation444447416419
Expected return on plan assets(726)(711)(689)(674)
Recognition of net actuarial loss446447423424
Recognition of prior service costs(13)3(14)1
TOTAL PERIODIC BENEFIT COST$348$393$320$364
Cost capitalized(134)(157)(125)(148)
Reconciliation to rate level(28)35(32)39
Cost charged to operating expenses$186$271$163$255


Expected Contributions
Based on estimates as of September 30, 2017,2021, the Companies expect to make contributions to the pension plans during 20172021 of $450$467 million (of which $412$429 million is to be contributedmade by CECONY). The Companies’ policy is to fund the total periodic benefit cost of the qualified plan to the extent tax deductible and to also contribute to the non-qualified supplemental plans. During the first nine months of 2017,2021, the Companies contributed $446$465 million to the pension plans, (of$428 million of which $409 million was contributed by CECONY).CECONY. CECONY also contributed $14$22 million to itsthe external
trust for its non-qualified supplemental plans.plan.


Note F —– Other Postretirement Benefits
Total Periodic Benefit Cost
The components of the Companies’ total periodic other postretirement benefit costscost/(credit) for the three and nine months ended September 30, 20172021 and 20162020 were as follows:
 
For the Three Months Ended September 30,
  
          Con Edison          CECONY
(Millions of Dollars)2021202020212020
Service cost - including administrative expenses$2$5$1$4
Interest cost on projected other postretirement benefit obligation7968
Expected return on plan assets(17)(16)(14)(14)
Recognition of net actuarial loss4333
Recognition of prior service credit— (1)— — 
TOTAL PERIODIC OTHER POSTRETIREMENT BENEFIT COST$(4)$— $(4)$1
Cost capitalized(3)(2)(3)(2)
Reconciliation to rate level726— 
Total credit recognized$— $— $(1)$(1)
 For the Three Months Ended September 30,
  
          Con Edison          CECONY
(Millions of Dollars)201720162017
2016
Service cost$5$4$3$3
Interest cost on accumulated other postretirement benefit obligation1112910
Expected return on plan assets(17)(19)(15)(17)
Recognition of net actuarial loss11—
1
Recognition of prior service cost(5)(5)(3)(3)
TOTAL PERIODIC OTHER POSTRETIREMENT BENEFIT COST$(5)$(7)$(6)$(6)
Cost capitalized2222
Reconciliation to rate level(1)7—
6
Cost charged to operating expenses$(4)$2$(4)$2


For the Nine Months Ended September 30,
  
Con EdisonCECONY
(Millions of Dollars)2021202020212020
Service cost - including administrative expenses$15$16$11$12
Interest cost on projected other postretirement benefit obligation23281923
Expected return on plan assets(51)(49)(41)(41)
Recognition of net actuarial loss17341332
Recognition of prior service credit(2)(3)(1)(1)
TOTAL PERIODIC OTHER POSTRETIREMENT BENEFIT COST$2$26$1$25
Cost capitalized(9)(7)(7)(5)
Reconciliation to rate level7(19)2(24)
Total credit recognized$— $— $(4)$(4)

 For the Nine Months Ended September 30,
  
          Con Edison          CECONY
(Millions of Dollars)2017201620172016
Service cost$15$13$10$10
Interest cost on accumulated other postretirement benefit obligation34362830
Expected return on plan assets(52)(58)(45)(50)
Recognition of net actuarial loss/(gain)24(2)2
Recognition of prior service cost(13)(15)(9)(11)
TOTAL PERIODIC OTHER POSTRETIREMENT BENEFIT COST$(14)$(20)$(18)$(19)
Cost capitalized6575
Reconciliation to rate level(3)20(1)19
Cost charged to operating expenses$(11)$5$(12)$5
For information about the presentation of the components of other postretirement benefit costs, see Note E.




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24





Contributions
During the first nine months of 2017, Con Edison2021, the Companies contributed $16$2 million (all of which $8 million was contributedmade by CECONY,CECONY) to the other postretirement benefit plans. The Companies' policy is to fund the total periodic benefit cost of the plans to the extent tax deductible.


Note G —– Environmental Matters
Superfund Sites
Hazardous substances, such as asbestos, polychlorinated biphenyls (PCBs) and coal tar, have been used or generated in the course of operations of the Utilities and their predecessors and are present at sites and in facilities and equipment they currently or previously owned, including sites at which gas was manufactured or stored.
The Federal Comprehensive Environmental Response, Compensation and Liability Act of 1980 and similar state statutes (Superfund) impose joint and several liability, regardless of fault, upon generators of hazardous substances

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for investigation and remediation costs (which include costs of demolition, removal, disposal, storage, replacement, containment and monitoring) and natural resource damages. Liability under these laws can be material and may be imposed for contamination from past acts, even though such past acts may have been lawful at the time they occurred. The sites at which the Utilities have been asserted to have liability under these laws, including their manufactured gas plant sites and any neighboring areas to which contamination may have migrated, are referred to herein as “Superfund Sites.”
For Superfund Sites where there are other potentially responsible parties and the Utilities are not managing the site investigation and remediation, the accrued liability represents an estimate of the amount the Utilities will need to pay to investigate and, where determinable, discharge their related obligations. For Superfund Sites (including the manufactured gas plant sites) for which one of the Utilities is managing the investigation and remediation, the accrued liability represents an estimate of the company’s share of the undiscounted cost to investigate the sites and, for sites that have been investigated in whole or in part, the cost to remediate the sites, if remediation is necessary and if a reasonable estimate of such cost can be made. Remediation costs are estimated in light of the information available, applicable remediation standards and experience with similar sites.
The accrued liabilities and regulatory assets related to Superfund Sites at September 30, 20172021 and December 31, 20162020 were as follows:
        Con Edison        CECONY
(Millions of Dollars)2021202020212020
Accrued Liabilities:
Manufactured gas plant sites$737$752$662$676
Other Superfund Sites104105103104
Total$841$857$765$780
Regulatory assets$846$865$780$791
         Con Edison        CECONY
(Millions of Dollars)2017201620172016
Accrued Liabilities:    
Manufactured gas plant sites$659$664$563$567
Other Superfund Sites86898588
Total$745$753$648$655
Regulatory assets$803$823$690$711

Most of the accrued Superfund Site liability relates to sites that have been investigated, in whole or in part. However, for some of the sites, the extent and associated cost of the required remediation has not yet been determined. As investigations progress and information pertaining to the required remediation becomes available, the Utilities expect that additional liability may be accrued, the amount of which is not presently determinable but may be material. The Utilities are permitted to recover or defer as regulatory assets (for subsequent recovery through rates) prudently incurred site investigation and remediation costs.
Environmental remediation costs incurred related to Superfund Sites for the three and nine months ended September 30, 20172021 and 20162020 were as follows:
For the Three Months Ended September 30,
          Con Edison     CECONY
(Millions of Dollars)2021202020212020
Remediation costs incurred$7$8$7$8
 For the Three Months Ended September 30,
           Con Edison     CECONY
(Millions of Dollars)2017201620172016
Remediation costs incurred$4$8$3$5


For the Nine Months Ended September 30,
          Con Edison     CECONY
(Millions of Dollars)2021202020212020
Remediation costs incurred$21$17$20$16



25

 For the Nine Months Ended September 30,
           Con Edison     CECONY
(Millions of Dollars)2017201620172016
Remediation costs incurred$18$20$13$10


Insurance and other third-party recoveries received by Con Edison or CECONY were immaterial for the three and nine months ended September 30, 2017. Con Edison2021 and CECONY received $1 million in insurance recoveries for the three and nine months ended September 30, 2016.2020.
In 2016,2020, Con Edison and CECONY estimated that for their manufactured gas plant sites (including CECONY’s Astoria site), the aggregate undiscounted potential liability for the investigation and remediation of coal tar and/or other environmental contaminants could range up to $2.8$2.7 billion and $2.6 billion, respectively. These estimates were based on the assumption that there is contamination at all sites, including those that have not yet been fully investigated and additional assumptions about the extent of the contamination and the type and extent of the remediation that may be required. Actual experience may be materially different.
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Asbestos Proceedings
Suits have been brought in New York State and federal courts against the Utilities and many other defendants, wherein a large number of plaintiffs sought large amounts of compensatory and punitive damages for deaths and injuries allegedly caused by exposure to asbestos at various premises of the Utilities. The suits that have been resolved, which are many, have been resolved without any payment by the Utilities, or for amounts that were not, in the aggregate, material to them. The amounts specified in all the remaining thousands of suits total billions of dollars; however, the Utilities believe that these amounts are greatly exaggerated, based on the disposition of previous claims. At September 30, 2017,2021, Con Edison and CECONY have accrued their estimated aggregate undiscounted potential liabilities for these suits and additional suits that may be brought over the next 15 years as shown in the following table. These estimates were based upon a combination of modeling, historical data analysis and risk factor assessment. Courts have begun, and unless otherwise determined on appeal may continue, to apply different standards for determining liability in asbestos suits than the standard that applied historically. As a result, the Companies currently believe that there is a reasonable possibility of an exposure to loss in excess of the liability accrued for the suits. The Companies are unable to estimate the amount or range of such loss. In addition, certain current and former employees have claimed or are claiming workers’ compensation benefits based on alleged disability from exposure to asbestos. CECONY is permitted to defer as regulatory assets (for subsequent recovery through rates) costs incurred for its asbestos lawsuits and workers’ compensation claims.
The accrued liability for asbestos suits and workers’ compensation proceedings (including those related to asbestos exposure) and the amounts deferred as regulatory assets or liabilities for the Companies at September 30, 20172021 and December 31, 20162020 were as follows:
          Con Edison     CECONY
(Millions of Dollars)2021202020212020
Accrued liability – asbestos suits$8$8$7$7
Regulatory assets – asbestos suits$8$8$7$7
Accrued liability – workers’ compensation$68$72$65$68
Regulatory liability – workers’ compensation$5$3$5$3

           Con Edison     CECONY
(Millions of Dollars)2017201620172016
Accrued liability – asbestos suits$8$8$7$7
Regulatory assets – asbestos suits$8$8$7$7
Accrued liability – workers’ compensation$87$88$83$83
Regulatory assets – workers’ compensation$12$13$12$13




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Note H —– Other Material Contingencies
Manhattan Explosion and Fire
On March 12, 2014, two2 multi-use five-story tall buildings located on Park Avenue between 116th and 117th Streets in Manhattan were destroyed by an explosion and fire. CECONY had delivered gas to the buildings through service lines from a distribution main located below ground on Park Avenue. EightNaN people died and more than 50 people were injured. Additional buildings were also damaged. The National Transportation Safety Board (NTSB) investigated. The parties to the investigation included the company, the City of New York, the Pipeline and Hazardous Materials Safety Administration and the NYSPSC. In June 2015, the NTSB issued a final report concerning the incident, its probable cause and safety recommendations. The NTSB determined that the probable cause of the incident was (1) the failure of a defective fusion joint at a service tee (which joined a plastic service line to a plastic distribution main) installed by the company that allowed gas to leak from the distribution main and migrate into a building where it ignited and (2) a breach in a City sewer line that allowed groundwater and soil to flow into the sewer, resulting in a loss of support for the distribution main, which caused it to sag and overstressed the defective fusion joint. The NTSB also made safety recommendations, including recommendations to the company that addressed its procedures for the preparation and examination of plastic fusions, training of its staff on conditions for notifications to the City’s Fire Department and extension of its gas main isolation valve installation program. In February 2017, the NYSPSC approved a settlement agreement with the company related to the NYSPSC's investigations of the incident and the practices of qualifying persons to perform plastic fusions. Pursuant to the agreement, the company will not recover from customers $126 million of costs it incurred for gas emergency response activities in 2014, 2015 and 2016 in excess of the amounts reflected in its gas rate plan and will provideis providing $27 million of future benefits to customers (for which it has accrued a regulatory liability, see Note B).liability) and will not recover from customers $126 million of costs for gas emergency response activities that it had previously incurred and expensed. Approximately eighty80 suits are pending against the company seeking generally unspecified damages and, in some cases, punitive damages, for wrongful death, personal injury, property damage and business interruption. The company has notified its insurers of the incident and believes that the policies in force at the time of the incident will cover the company’s costs, in excess of a required retention (the amount of which is not material), to satisfy any liability it may have for damages in connection with the incident. The company In the company’s estimation, there is unablenot a reasonable possibility that an exposure to estimateloss exists for the amount or rangesuits that is materially in excess of its possible loss for damages related to the incident.estimated liability accrued. At September 30, 2017,2021 and December 31, 2020, the company had not accrued aits estimated liability for damages related to the incident.suits of $40 million and an insurance receivable in the same amount.

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Other Contingencies
SeeFor additional contingencies, see "Other Regulatory Matters" in Note B, Note G and “Uncertain Tax Positions” in Note I.J.

Guarantees
Con Edison and its subsidiaries enterhave entered into various agreements providing financial or performance assurance primarily to third parties on behalf of their subsidiaries. Maximum amounts guaranteed by Con Edison and its subsidiaries under these agreements totaled $2,162$2,210 million and $2,370$2,042 million at September 30, 20172021 and December 31, 2016,2020, respectively.
A summary, by type and term, of amounts guaranteed by Con Edison’s total guaranteesEdison and its subsidiaries under these agreements at September 30, 20172021 is as follows:
 
Guarantee Type0 – 3 years4 – 10 years> 10 yearsTotal
(Millions of Dollars)
Con Edison Transmission$547$— $— $547
Energy transactions47533323831
Renewable electric production projects32064378762
Other70— — 70
Total$1,412$97$701$2,210
Guarantee Type0 – 3 years4 – 10 years
> 10 years
Total
 (Millions of Dollars)
Con Edison Transmission$643$404
$—
$1,047
Energy transactions45930211700
Renewable electric production projects268—
19287
Other128—
—
128
Total$1,498$434$230$2,162

Con Edison Transmission — Con Edison has guaranteed payment by CET Electric of the contributions CET Electric agreed to make to New York Transco LLC (NY Transco). CET Electric acquiredowns a 45.7 percent interest in NY Transco when it was formed in 2014.Transco. In May 2016, the transmission owners transferred certain projects to NY Transco, for which CET Electric made its required contributions. NY Transco has proposed other transmission projects inApril 2019, the New York Independent System Operator's competitive bidding process. These otherOperator (NYISO) selected a transmission project that was jointly proposed by National Grid and NY Transco. The siting, construction and operation of the project will require approvals and permits from appropriate governmental agencies and authorities, including the NYSPSC. The NYISO indicated it will work with the developers to enter into agreements for the development and operation of the projects, are subject to certain authorizations from the NYSPSC, the FERC and, as applicable, other federal, state and local agencies.including a schedule for entry into service by December 2023. Guarantee amount shown is forincludes the maximum possible required amount of CET Electric’s contributions for these other projectsthis project as calculated based on the assumptions that the projects areproject is completed at 175 percent of theirits estimated costs and NY Transco does not use any debt financing for the projects.project. Guarantee termamount shown is assumed as the selection of the projects and resulting timing of the contributions is not certain. Also included within the table above isalso includes a $7 million guarantee for $25 million from Con Edison Transmission on behalf of a subsidiary of CET Gas related to the completion of the sale of Stagecoach. See "Investments" in relation to a proposed gas transmission project in West VirginiaNote A and Virginia.Note R.


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Energy Transactions — Con Edison guaranteesand the Clean Energy Businesses guarantee payments on behalf of the Clean Energy Businessestheir subsidiaries in order to facilitate physical and financial transactions in electricity, gas, pipeline capacity, transportation, oil, renewable energy credits and energy services. To the extent that liabilities exist under the contracts subject to these guarantees, such liabilities are included in Con Edison’s consolidated balance sheet.
Renewable Electric Production Projects — Con Edison Con Edison Development, and Con Edison Solutionsthe Clean Energy Businesses guarantee payments on behalf of their wholly-owned subsidiaries associated with their investment in, or development for others of, solar and wind energy facilities.
Other — Other guarantees include $70 million in guarantees provided by Con Edison to Travelers Insurance Company for indemnity agreements for surety bonds in connection with the operation of solar energy facilities and energy service projects of Con Edison Development and Con Edison Solutions, respectively. Other guarantees also includes Con Edison's guarantee (subject to a $53 million maximum amount) of certain obligations of Con Edison Solutions under the agreement pursuant to which it sold its retail electric supply business. In addition, Con Edison issued a guarantee estimated at $5 million to the Public Utility Commission of Texas covering obligations of Con Edison Solutions as a retail electric provider. As part of the sale agreement for the retail electric supply business discussed above, the purchaser has agreed to pay Con Edison Solutions for draws on the guarantee to the Public Utility Commission of Texas.Clean Energy Businesses.



Note I —– Leases
Operating lease cost and cash paid for amounts included in the measurement of lease liabilities for the three and nine months ended September 30, 2021 and 2020 were as follows:
For the Three Months Ended September 30,
Con EdisonCECONY
(Millions of Dollars)2021202020212020
Operating lease cost$22 $21 $16 $16 
Operating lease cash flows$10 $10 $6 $6 

38

For the Nine Months Ended September 30,
Con EdisonCECONY
(Millions of Dollars)2021202020212020
Operating lease cost$65 $63 $49 $48 
Operating lease cash flows$26 $27 $15 $13 

As of September 30, 2021, assets recorded as finance leases were $2 million for Con Edison and $1 million for CECONY, and the accumulated amortization associated with finance leases for Con Edison and CECONY were $3 million and $2 million, respectively. As of December 31, 2020, assets recorded as finance leases were $3 million for Con Edison and $2 million for CECONY, and the accumulated amortization associated with finance leases for Con Edison and CECONY were $3 million and $1 million, respectively.

For the three and nine months ended September 30, 2021 and 2020, finance lease costs and cash flows for Con Edison and CECONY were immaterial.

Right-of-use assets obtained in exchange for operating lease obligations for Con Edison and CECONY were $15 million and $5 million, respectively, for the three months ended September 30, 2021 and $32 million and $7 million, respectively for the nine months ended September 30, 2021. Right-of-use assets obtained in exchange for operating lease obligations for Con Edison and CECONY were $8 million and $2 million, respectively, for the three months ended September 30, 2020 and $13 million and $3 million, respectively for the nine months ended September 30, 2020.


Other information related to leases for Con Edison and CECONY at September 30, 2021 and December 31, 2020 were as follows:
Con EdisonCECONY
2021202020212020
Weighted Average Remaining Lease Term:
Operating leases18.5 years19.1 years12.4 years13.0 years
Finance leases7.1 years7.3 years3.3 years4.0 years
Weighted Average Discount Rate:
Operating leases4.3%4.3%3.6%3.6%
Finance leases1.8%1.8%1.2%1.3%

Future minimum lease payments under non-cancellable leases at September 30, 2021 were as follows:
(Millions of Dollars)Con EdisonCECONY
Year Ending September 30,Operating LeasesFinance LeasesOperating LeasesFinance Leases
2022$82$1$59$1
202376—58—
202475— 57— 
202576— 58— 
202675— 58— 
All years thereafter9371446— 
Total future minimum lease payments$1,321$2$736$1
Less: imputed interest(452)— (144)— 
Total$869$2$592$1
Reported as of September 30, 2021
Operating lease liabilities (current)$113$— $85$— 
Operating lease liabilities (noncurrent)756— 507— 
Other current liabilities— 1— —
Other noncurrent liabilities— 1— 1
Total$869$2$592$1

At September 30, 2021, the Companies did not have material obligations under operating or finance leases that had not yet commenced.

39


The Companies are lessors under certain leases whereby the Companies own real estate and distribution poles and lease portions of them to others. Revenue under such leases was immaterial for Con Edison and CECONY for the three and nine months ended September 30, 2021 and 2020.


Note J – Income Tax
Con Edison’s income tax expense decreasedincreased to $270$127 million for the three months ended September 30, 20172021 from $314$119 million for the three months ended September 30, 2016. Con Edison's effective2020. The increase in income tax rate for the three months ended September 30, 2017 and 2016 was 37 percent and 39 percent, respectively. The decrease in Con Edison's effective tax rateexpense is primarily due to lower state income taxes,attributable to non-controlling interests, offset in part by lower income before income tax expense, lower state income taxes, an increase in the amortization of excess deferred federal income taxes due to the TCJA and a decreasehigher favorable tax adjustment for the prior year tax return primarily due to an increase in the general business tax benefits for plant-related flow through items.credit compared with last year.


CECONY’s income tax expense increaseddecreased to $242$90 million for the three months ended September 30, 20172021 from $226$97 million for the three months ended September 30, 2016. CECONY's effective2020. The decrease in income tax expense is primarily due to an increase in the amortization of excess deferred federal income taxes due to the TCJA and a higher favorable tax adjustment for the prior year tax return primarily due to an increase in the general business tax credit compared with last year, offset in part by higher income before income tax expense and lower flow-through tax benefits in 2021 for plant-related items.

Reconciliation of the difference between income tax expense and the amount computed by applying the prevailing statutory income tax rate to income before income taxes for the three months ended September 30, 20172021 and 2016 was 38 percent and 37 percent, respectively. The increase in CECONY's effective tax rate2020 is primarily due to a decrease in tax benefits for plant-related flow through items and lower research and development credits, offset in part by lower state income taxes.as follows:

Con EdisonCECONY
(% of Pre-tax income)2021202020212020
STATUTORY TAX RATE
Federal21 %21 %21 %21 %
Changes in computed taxes resulting from:
State income tax, net of federal income tax benefit5 6 5 5 
Amortization of excess deferred federal income taxes(7)(7)(8)(8)
Taxes attributable to non-controlling interests4 (1)— — 
Cost of removal1 1 1 2 
Other plant-related items(1)(1)(1)(1)
Renewable energy credits(1)(1)— — 
Injuries and damages reserve
— — 1 — 
Prior period federal income tax return adjustments(1)— (1)— 
Other— 1 — — 
Effective tax rate21 %19 %18 %19 %

Con Edison’s income tax expense decreasedincreased to $599$194 million for the nine months ended September 30, 20172021 from $602$183 million for the nine months ended September 30, 2016. Con Edison's effective2020. The increase in income tax rate for the nine months ended September 30, 2017 and 2016 was 37 percent. The effectiveexpense is primarily due to lower income attributable to non-controlling interests, offset in part by lower income before income tax rate remained unchanged asexpense, lower state income taxes, were offset byan increase in the amortization of excess deferred federal income taxes due to the TCJA and a decreasehigher favorable tax adjustment for the prior year tax return primarily due to an increase in the general business tax benefits for plant-related flow through items.credit compared with last year.


CECONY’s income tax expense increaseddecreased to $551$188 million for the nine months ended September 30, 20172021 from $491$199 million for the nine months ended September 30, 2016. CECONY's effective2020. The decrease in income tax expense is primarily due to an increase in the amortization of excess deferred federal income taxes due to the TCJA, a higher favorable tax adjustment for the prior year tax return primarily due to an increase in the general business tax credit compared with last year, the absence of the amortization of excess deferred state income taxes in 2021, offset in part by higher income before income tax expense and lower flow-through tax benefits in 2021 for plant-related items.

Reconciliation of the difference between income tax expense and the amount computed by applying the prevailing
statutory income tax rate to income before income taxes for the nine months ended September 30, 20172021 and 20162020 is as follows:

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Con EdisonCECONY
(% of Pre-tax income)2021202020212020
STATUTORY TAX RATE
Federal21 %21 %21 %21 %
Changes in computed taxes resulting from:
State income tax, net of federal income tax benefit5 5 5 5 
Amortization of excess deferred federal income taxes(11)(10)(11)(10)
Taxes attributable to non-controlling interests3 (1)— — 
Cost of removal2 2 2 2 
Other plant-related items(1)(1)(1)(2)
Renewable energy credits(2)(2)— — 
Other(1)— — 1 
Effective tax rate16 %14 %16 %17 %

In response to the economic impacts of the COVID-19 pandemic, the Coronavirus Aid, Relief, and Economic Security Act (CARES Act) was 38signed into law on March 27, 2020. The CARES Act provides relief to corporate taxpayers by permitting a five-year carryback of net operating losses (NOLs) for tax years 2018, 2019 and 2020, temporarily removing the 80 percent limitation when applying the NOLs to carryback years, increasing the 30 percent limitation on interest deductibility to 50 percent of adjusted taxable income for tax years 2019 and 36 percent, respectively. The increase2020, and provides for certain employee retention tax credits and refunds for eligible employers.

Under the CARES Act, Con Edison carried back its $29 million NOL from tax year 2018 to tax year 2013 generating a $2.5 million net tax refund for which a tax receivable was established in CECONY's effective2020. In addition, Con Edison recognized a discrete income tax benefit of $4 million in 2020, due to the higher federal statutory tax rate is primarily due to a decrease in tax benefits for plant-related flow through items2013. The 2018 federal NOL was recorded at 21 percent and lower research and development tax credits, offset in part by lower state income taxes.

Con Edison anticipates a federal consolidated net operating loss for 2017, primarily due to bonus depreciation. Con Edison expects to carryback a portion of its 2017 net operating loss to recover $19 million of income tax. The remaining 2017 net operating loss, as well as general business tax credits generated in 2017, will be carried forwardback to future tax years. Ayear 2013, which had a 35 percent federal statutory tax rate. This tax benefit was primarily recognized at the Clean Energy Businesses.

Pursuant to CECONY’s electric rate plan that went into effect in January 2020, the deferral of its net benefits for its electric service ceased and is included in rates. Additionally, the unprotected excess deferred federal income taxes for its electric and gas services is being amortized over a five-year period, which decreased the income tax assetexpense for thesethe nine months ended September 30, 2021 and 2020. See “Other Regulatory Matters” in Note B.

In April 2021, New York State passed a law that increased the corporate franchise tax attribute carryforwards was recorded,rate on business income from 6.5% to 7.25%, retroactive to January 1, 2021, for taxpayers with taxable income greater than $5 million. The law also reinstated the business capital tax at 0.1875%, not to exceed an annual maximum tax liability of $5 million per taxpayer. New York State requires a corporate franchise taxpayer to calculate and no valuation allowance has been provided, as it is more likely thanpay the highest amount of tax under the three alternative methods: a tax on business income; a tax on business capital; or a fixed dollar minimum. The provisions to increase the corporate franchise tax rate and reinstate a business capital tax are scheduled to expire after 2023 and are not thatexpected to have a material impact on the deferred tax asset will be realized.Companies’ financial position, results of operations or liquidity.


Uncertain Tax Positions
At September 30, 2017,2021, the estimated liability for uncertain tax positions for Con Edison was $41$17 million ($216 million for CECONY). Con Edison reasonably expects to resolve approximately $35 million ($24 million, net of federal taxes) of its uncertain tax positions within the next twelve months including $21approximately $3 million ($15 million, net of various federal taxes),and state uncertainties due to the expected completion of ongoing tax examinations, of which the entire amount, if recognized, would reduce Con Edison’sEdison's effective tax rate. The amount related to CECONY is approximately $18 million ($13 million, net of federal taxes), including $4$1 million, which, if recognized, would reduce CECONY’s effective tax rate. The total amount of unrecognized tax benefits, if recognized, that would reduce Con Edison’s effective tax rate is $25$17 million ($1816 million, net of federal taxes). with $6 million attributable to CECONY.


28

28





The Companies recognize interest on liabilities for uncertain tax positions in interest expense and would recognize penalties, if any, in operating expenses in the Companies’ consolidated income statements. InFor the three and nine months ended September 30, 2017,2021, the Companies recognized an immaterial amount of interest expense and no penalties for uncertain tax positions in their consolidated income statements. At September 30, 20172021 and December 31, 2016,2020, the Companies recognized an immaterial amount of accrued interest on their consolidated balance sheets.




41

Note J —K – Revenue Recognition
The following table presents, for the three and nine months ended September 30, 2021 and 2020, revenue from contracts with customers as defined in Accounting Standards Codification Topic 606, "Revenue from Contracts with Customers," as well as additional revenue from sources other than contracts with customers, disaggregated by major source.
For the Three Months Ended September 30, 2021For the Three Months Ended September 30, 2020
(Millions of Dollars)Revenues from contracts with customersOther revenues (a)Total operating revenuesRevenues from contracts with customersOther revenues (a)Total operating revenues
CECONY
Electric$2,776$(46)$2,730$2,594$(32)$2,562
Gas305230724811259
Steam5235550151
Total CECONY$3,133$(41)$3,092$2,892$(20)$2,872
O&R
Electric229(6)223210(2)208
Gas32234273 30
Total O&R$261$(4)$257$237$1 $238
Clean Energy Businesses
Renewables199— 199194— 194
Energy services65— 6514— 14
   Other— — —— 1414
Total Clean Energy Businesses$264$0$264$208$14 $222
Con Edison Transmission1— 11— 1
Other (b)— (1)(1)— — — 
Total Con Edison$3,659$(46)$3,613$3,338$(5)$3,333
(a) For the Utilities, this includes revenue from alternative revenue programs, such as the revenue decoupling mechanisms under their New York electric and gas rate plans.For the Clean Energy Businesses, this includes revenue from wholesale services
(b)    Parent company and consolidation adjustments.

For the Nine Months Ended September 30, 2021For the Nine Months Ended September 30, 2020
(Millions of Dollars)Revenues from contracts with customersOther revenues (a)Total operating revenuesRevenues from contracts with customersOther revenues (a)Total operating revenues
CECONY
Electric$6,695$(34)$6,661$6,108$70$6,178
Gas1,699311,7301,480291,509
Steam3831039337510385
Total CECONY$8,777$7$8,784$7,963$109$8,072
O&R
Electric535(13)5224785483
Gas184(7)1771568164
Total O&R$719$(20)$699$634$13$647
Clean Energy Businesses
Renewables545— 545487— 487
Energy services168— 16836— 36
Other— 6666— 4343
Total Clean Energy Businesses$713$66$779$523$43$566
Con Edison Transmission3— 33— 3
Other (b)— (4)(4)— (2)(2)
Total Con Edison$10,212$49$10,261$9,123$163$9,286
(a) For the Utilities, this includes revenue from alternative revenue programs, such as the revenue decoupling mechanisms under their New York electric and gas rate plans.For the Clean Energy Businesses, this includes revenue from wholesale services.
(b)    Parent company and consolidation adjustments.



42

20212020
(Millions of Dollars)Unbilled contract revenue (a)Unearned revenue (b)Unbilled contract revenue (a)Unearned revenue (b)
Beginning balance as of January 1,$11$41$29$17
Additions (c)174— 7431
Subtractions (c)12731(d)904(d)
Ending balance as of September 30,$58$10$13$44
(a)Unbilled contract revenue represents accumulated incurred costs and earned profits on contracts (revenue arrangements), which have been recorded as revenue, but have not yet been billed to customers, and which represent contract assets as defined in Topic 606. Substantially all accrued unbilled contract revenue is expected to be collected within one year. Unbilled contract revenue arises from the cost-to-cost method of revenue recognition. Unbilled contract revenue from fixed-price type contracts is converted to billed receivables when amounts are invoiced to customers according to contractual billing terms, which generally occur when deliveries or other performance milestones are completed.
(b)Unearned revenue represents a liability for billings to customers in excess of earned revenue, which are contract liabilities as defined in Topic 606.
(c)Additions for unbilled contract revenue and subtractions for unearned revenue represent additional revenue earned. Additions for unearned revenue and subtractions for unbilled contract revenue represent billings. Activity also includes appropriate balance sheet classification for the period.
(d)Of the subtractions from unearned revenue, $31 million and $4 million were included in the balances as of January 1, 2021 and 2020, respectively.

As of September 30, 2021, the aggregate amount of the remaining fixed performance obligations of the Clean Energy Businesses under contracts with customers for energy services is $187 million, of which $148 million will be recognized within the next two years, and the remaining $39 million will be recognized pursuant to long-term service and maintenance agreements.

In March 2020, the Utilities began suspending new late payment charges and certain other fees for all customers. For the three months ended September 30, 2021, the estimated late payment charges and fees that were not billed by Con Edison and CECONY were approximately $12 million and $11 million lower than the amounts that were approved to be collected pursuant to the Utilities’ rate plans, respectively. For the nine months ended September 30, 2021, the estimated late payment charges and fees that were not billed by Con Edison and CECONY were approximately $49 million and $46 million lower than the amounts that were approved to be collected pursuant to the Utilities’ rate plans, respectively. For the three months ended September 30, 2020, the estimated late payment charges and fees that were not billed by Con Edison and CECONY were approximately $18 million and $17 million lower than the amounts that were approved to be collected pursuant to the Utilities’ rate plans, respectively. For the nine months ended September 30, 2020, the estimated late payment charges and fees that were not billed by Con Edison and CECONY were approximately $38 million and $36 million lower than the amounts that were approved to be collected pursuant to the Utilities’ rate plans, respectively. The Utilities also began providing payment extensions for all customers that were scheduled to be disconnected prior to the start of the COVID-19 pandemic. In April 2021, CECONY filed a petition with the NYSPSC to timely establish a surcharge recovery mechanism for $52 million of late payment charges and fees, offset for related savings, for the year ended December 31, 2020 to begin in September 2021 and end in December 2022. The petition also requests a surcharge recovery or surcredit mechanism for any fee deferrals for 2021 and 2022 starting in January of the subsequent year over a twelve-month period, respectively. See "COVID-19 Regulatory Matters" in Note B.


Note L – Current Expected Credit Losses
In January 2020, the Companies adopted Accounting Standards Update (ASU) 2016-13, “Financial Instruments-Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments”.

Allowance for Uncollectible Accounts
The Utilities’ “Account receivable – customers” balance consists of utility bills due (bills are generally due the month following billing) from customers who have energy delivered, generated, or services provided by the Utilities. The balance also reflects the Utilities’ purchase of receivables from energy service companies to support the retail choice programs.
“Other receivables” balance generally reflects costs billed by the Utilities for goods and services provided to external parties, such as accommodation work for private parties and certain governmental entities, real estate rental and pole attachments. The Clean Energy Businesses’ other receivables balance includes bills related to the sale of energy from renewable electric production projects.

43

The Clean Energy Businesses’ customer accounts receivable balance generally reflects the management of energy supply assets, energy-efficiency services to government and commercial customers, and the engineering, procurement, and construction services of renewable energy projects. The Clean Energy Businesses calculate an allowance for uncollectible accounts related to their energy services customers based on an aging and customer-specific analysis. The amount of such reserves was not material at September 30, 2021 or December 31, 2020.
The Companies develop expected loss estimates using past events data and consider current conditions and future reasonable and supportable forecasts. Changes to the Utilities’ reserve balances that result in write-offs of customer accounts receivable balances above existing rate allowances are not reflected in rates during the term of the current rate plans. For the Utilities’ customer accounts receivable allowance for uncollectible accounts, past events considered include write-offs relative to customer accounts receivable; current conditions include macro-and micro-economic conditions related to trends in the local economy and bankruptcy rates and aged customer accounts receivable balances, among other factors; and forecasts about the future include assumptions related to the level of write-offs and recoveries. Generally, the Utilities write off customer accounts receivable as uncollectible 90 days after the account is turned off for non-payment, or the account is closed during the collection process. See "COVID-19 Regulatory Matters" in Note B.
Other receivables allowance for uncollectible accounts is calculated based on a historical average of collections relative to total other receivables, including current receivables. Current macro- and micro-economic conditions are also considered when calculating the current reserve. Probable outcomes of pending litigation, whether favorable or unfavorable to the Companies, are also included in the consideration.
Starting in 2020, the potential economic impact of the COVID-19 pandemic was also considered in forward-looking projections related to write-off and recovery rates and resulted in increases to the allowance for uncollectible accounts. The increases to the allowance for uncollectible customer accounts for Con Edison and CECONY were $38 million for the three months ended September 30, 2021 and $165 million and $162 million, respectively, for the nine months ended September 30, 2021. The increases to the allowance for uncollectible customer accounts for Con Edison and CECONY were $31 million and $30 million, respectively, for the three months ended September 30, 2020 and $48 million and $46 million, respectively, for the nine months ended September 30, 2020.

Customer accounts receivable and the associated allowance for uncollectible accounts are included in the line “Accounts receivable – customers” on the Companies’ consolidated balance sheets. Other receivables and the associated allowance for uncollectible accounts are included in “Other receivables” on the consolidated balance sheets.
The table below presents a rollforward by major portfolio segment type for the three and nine months ended September 30, 2021 and 2020:
For the Three Months Ended September 30,
Con EdisonCECONY
Accounts receivable - customersOther receivablesAccounts receivable - customersOther receivables
(Millions of Dollars)20212020202120202021202020212020
Allowance for credit losses
Beginning Balance at July 1,$275$87$7$5$262$81$4$3
Recoveries32— — 32— — 
Write-offs(24)(4)—— (23)(3)— — 
Reserve adjustments5933—1583111
Ending Balance September 30,$313$118$7$6$300$111$5$4

44

For the Nine Months Ended September 30,
Con EdisonCECONY
Accounts receivable - customersOther receivablesAccounts receivable - customersOther receivables
(Millions of Dollars)20212020202120202021202020212020
Allowance for credit losses
Beginning Balance at January 1,$148$70$7$4$138$65$4$3
Recoveries96— — 86— — 
Write-offs(66)(37)(1)(1)(62)(35)— — 
Reserve adjustments22279132167511
Ending Balance September 30,$313$118$7$6$300$111$5$4

Note M – Financial Information by Business Segment
Con Edison’s principal business segments are CECONY’s regulated utility activities, O&R’s regulated utility activities, the Clean Energy Businesses and Con Edison Transmission. CECONY’s principal business segments are its regulated electric, gas and steam utility activities. The financial data for the business segments for the three and nine months ended September 30, 20172021 and 20162020 were as follows:
 
For the Three Months Ended September 30,
Operating
revenues		Inter-segment
revenues		Depreciation and
amortization		Operating
income/(loss)
(Millions of Dollars)20212020202120202021202020212020
CECONY
Electric$2,730$2,562$5$4$324$305$834$813
Gas307259228274(48)(34)
Steam555118182322(58)(57)
Consolidation adjustments— — (25)(24)— — — — 
Total CECONY$3,092$2,872$— $— $429$401$728$722
O&R
Electric$223$208$— $— $18$17$55$58
Gas3430— — 66(8)(9)
Total O&R$257$238$— $— $24$23$47$49
Clean Energy Businesses$264$222$— $— $58$58$79$92
Con Edison Transmission11— — — — (2)(2)
Other (a)(1)— — — 1 — (2)(1)
Total Con Edison$3,613$3,333$— $— $512$482$850$860
 For the Three Months Ended September 30,
 
Operating
revenues
Inter-segment
revenues
Depreciation and
amortization
Operating
income/(loss)
(Millions of Dollars)2017
2016
2017
2016
2017
2016
2017
2016
CECONY        
Electric$2,469$2,557$4$5$232$217$855$841
Gas268208214741(12)(28)
Steam626319222120(43)(47)
Consolidation adjustments—
—
(25)(28)—
—
—
—
Total CECONY$2,799$2,828
$—

$—
$300$278$800$766
O&R        
Electric$206$213
$—

$—
$13$12$56$55
Gas2827—
—
55(11)(7)
Total O&R$234$240
$—

$—
$18$17$45$48
Clean Energy Businesses$177$350
$—
$(2)$19$11$29$125
Con Edison Transmission1—
—
—
—
—
(2)(1)
Other (a)—
(1)—
2—
(1)12
Total Con Edison$3,211$3,417
$—

$—
$337$305$873$940

 For the Nine Months Ended September 30,
 
Operating
revenues
Inter-segment
revenues
Depreciation and
amortization
Operating
income/(loss)
(Millions of Dollars)2017
2016
2017
2016
2017
2016
2017
2016
CECONY        
Electric$6,079$6,222$12$13$690$645$1,477$1,487
Gas1,4211,11354137118362273
Steam448406556564625239
Consolidation adjustments—
—
(72)(82)—
—
—
—
Total CECONY$7,948$7,741
$—

$—
$891$825$1,891$1,799
O&R        
Electric$495$497
$—

$—
$38$37$83$86
Gas172133—
—
15133328
Total O&R$667$630
$—

$—
$53$50$116$114
Clean Energy Businesses$460$998
$—
$7$54$30$63$184
Con Edison Transmission1—
—
—
—
—
(6)(1)
Other (a)(4)(1)—
(7)—
—
21
Total Con Edison$9,072$9,368
$—

$—
$998$905$2,066$2,097
(a)Parent company and consolidation adjustments. Other does not represent a business segment.






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For the Nine Months Ended September 30,
Operating
revenues		Inter-segment
revenues		Depreciation and
amortization		Operating
income/(loss)
(Millions of Dollars)20212020202120202021202020212020
CECONY
Electric$6,661$6,178$14$13$959$904$1,337$1,413
Gas1,7301,50965239216490440
Steam3933855556696791
Consolidation adjustments— — (75)(74)— — — — 
Total CECONY$8,784$8,072$— $— $1,267$1,187$1,836$1,854
O&R
Electric$522$483$— $— $52$48$78$86
Gas177164— — 19193028
Total O&R$699$647$— $— $71$67$108$114
Clean Energy Businesses$779$566$— $— $172$173$196$188
Con Edison Transmission33— — 11(7)(6)
Other (a)(4)(2)— — — — (4)(3)
Total Con Edison$10,261$9,286$— $— $1,511$1,428$2,129$2,147
(a) Parent company and consolidation adjustments. Other does not represent a business segment.


Note K —N – Derivative Instruments and Hedging Activities
Con Edison’s subsidiaries hedge market price fluctuations associated with physical purchases and sales of electricity, natural gas, steam and, to a lesser extent, refined fuels by using derivative instruments including futures, forwards, basis swaps, options, transmission congestion contracts and financial transmission rights contracts. These are economic hedges, for which the Utilities and the Clean Energy Business do not elect hedge accounting. The Clean Energy Businesses use interest rate swaps to manage the risks associated with interest rates related to outstanding and expected future debt issuances and borrowings. Derivatives are recognized on the consolidated balance sheet at fair value (see Note L)O), unless an exception is available under the accounting rules for derivatives and hedging. Qualifying derivative contracts that have been designated as normal purchases or normal sales contracts are not reported at fair value under the accounting rules.

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The fair values of the Companies’ commodity derivatives including the offsetting of assets and liabilities on the consolidated balance sheet at September 30, 20172021 and December 31, 20162020 were:
 
(Millions of Dollars)20212020
Balance Sheet LocationGross Amounts of
Recognized
Assets/(Liabilities)		Gross
Amounts
Offset		Net Amounts
of Assets/
(Liabilities) (a)		Gross Amounts of
Recognized
Assets/(Liabilities)		Gross
Amounts
Offset		Net Amounts
of Assets/
(Liabilities) (a)
Con Edison
Fair value of derivative assets
Current$652$(375)$277(b)$44$14$58(b)
Noncurrent140(15)125(c)223557
Total fair value of derivative assets$792$(390)$402$66$49$115
Fair value of derivative liabilities
Current$(428)$265$(163)(c)$(225)$(13)$(238)(d)
Noncurrent(183)17(166)(c)(207)(33)(240)(d)
Total fair value of derivative liabilities$(611)$282$(329)$(432)$(46)$(478)
Net fair value derivative assets/(liabilities)$181($108)$73$(366)$3$(363)
CECONY
Fair value of derivative assets
Current$407$(183)$224(b)$20$(12)$8(b)
Noncurrent114(28)8616(8)8
Total fair value of derivative assets$521$(211)$310$36$(20)$16
Fair value of derivative liabilities
Current$(158)$44$(114)$(174)$11$(163)
Noncurrent(125)28(97)(114)9(105)
Total fair value of derivative liabilities$(283)$72$(211)$(288)$20$(268)
Net fair value derivative assets/(liabilities)$238$(139)$99$(252)$—$(252)
(Millions of Dollars)2017 2016 
Balance Sheet Location
Gross Amounts of
Recognized
Assets/(Liabilities)
Gross
Amounts
Offset
Net Amounts
of Assets/
(Liabilities) (a)
 
Gross Amounts of
Recognized
Assets/(Liabilities)
Gross
Amounts
Offset
Net Amounts
of Assets/
(Liabilities) (a)
 
Con Edison        
Fair value of derivative assets        
Current$77$(67)$10(b)$81$(64)$17(b)
Noncurrent64(61)3 49(43)6 
Total fair value of derivative assets$141$(128)$13 $130$(107)$23 
Fair value of derivative liabilities        
Current$(141)$71$(70) $(138)$61$(77) 
Noncurrent(143)60(83) (91)52(39)(c)
Total fair value of derivative liabilities$(284)$131$(153) $(229)$113$(116) 
Net fair value derivative assets/(liabilities)$(143)$3$(140)(b)$(99)$6$(93)(b) (c)
CECONY        
Fair value of derivative assets        
Current$55$(53)$2(b)$52$(45)$7(b)
Noncurrent57(55)2 41(35)6 
Total fair value of derivative assets$112$(108)$4 $93$(80)$13 
Fair value of derivative liabilities        
Current$(116)$57$(59) $(111)$45$(66) 
Noncurrent(127)54(73) (77)44(33) 
Total fair value of derivative liabilities$(243)$111$(132) $(188)$89$(99) 
Net fair value derivative assets/(liabilities)$(131)$3$(128)(b)$(95)$9$(86)(b)
(a)Derivative instruments and collateral were offset on the consolidated balance sheet as applicable under the accounting rules. The Companies enter into master agreements for their commodity derivatives. These agreements typically provide offset in the event of contract termination. In such case, generally the non-defaulting party’s payable will be offset by the defaulting party’s payable. The non-defaulting party will customarily notify the defaulting party within a specific time period and come to an agreement on the early termination amount.
(a)Derivative instruments and collateral were offset on the consolidated balance sheet as applicable under the accounting rules. The Companies enter into master agreements for their commodity derivatives. These agreements typically provide offset in the event of contract termination. In such case, generally the non-defaulting party’s payable will be offset by the defaulting party’s payable. The non-defaulting party will customarily notify the defaulting party within a specific time period and come to an agreement on the early termination amount.
(b)At September 30, 2017 and December 31, 2016, margin deposits for Con Edison ($5 million and $7 million, respectively) and CECONY ($5 million and $7 million, respectively) were classified as derivative assets on the consolidated balance sheet, but not included in the table. Margin is collateral, typically cash, that the holder of a derivative instrument is required to deposit in order to transact on an exchange and to cover its potential losses with its broker or the exchange.
(c)Does not include $(1) million for interest rate swap.

(b)At September 30, 2021, immaterial amounts of margin deposits for Con Edison and CECONY were classified as derivative assets on the consolidated balance sheet, but not included in the table. At December 31, 2020, margin deposits for Con Edison and CECONY of $3 million were classified as derivative assets on the consolidated balance sheet, but not included in the table. Margin is collateral, typically cash, that the holder of a derivative instrument is required to deposit in order to transact on an exchange and to cover its potential losses with its broker or the exchange.
(c)Includes amounts for interest rate swaps of $5 million in noncurrent assets, $(26) millionin current liabilities and $(39) million in noncurrent liabilities. At September 30, 2021, the Clean Energy Businesses had interest rate swaps with notional amounts of $1,046 million. The expiration dates of the swaps range from 2025-2041. In June 2021, as part of the Clean Energy Businesses' sale of a renewable electric project, interest rate swaps terminating in 2024 were assumed by the buyer.
(d)Includes amounts for interest rate swaps of $(24) million in current liabilities and $(82) million in noncurrent liabilities. At December 31, 2020, the Clean Energy Businesses had interest rate swaps with notional amounts of $863 million. The expiration dates of the swaps ranged from 2024-2041.

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

The Clean Energy Businesses record realized and unrealized gains and losses on their derivative contracts in purchased power, gas purchased for resale and non-utility revenue in the reporting period in which they occur. The Clean Energy Businesses record changes in the fair value of their interest rate swaps in other interest expense at the end of each reporting period. Management believes that these derivative instruments represent economic hedges that mitigate exposure to fluctuations in commodity prices.prices and interest rates.
 



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The following table presents the realized and unrealized gains or losses on commodity derivatives that have been deferred or recognized in earnings for the three and nine months ended September 30, 20172021 and 2016:2020:
 
For the Three Months Ended September 30,
          Con Edison          CECONY
(Millions of Dollars)Balance Sheet Location2021202020212020
Pre-tax gains/(losses) deferred in accordance with accounting rules for regulated operations:
CurrentDeferred derivative gains$296$26$279$24
NoncurrentDeferred derivative gains70176616
Total deferred gains/(losses)$366$43$345$40
CurrentDeferred derivative losses$(4)$(9)$(3)$(11)
CurrentRecoverable energy costs17(23)13(19)
NoncurrentDeferred derivative losses(61)(15)(55)(12)
Total deferred gains/(losses)($48)$(47)$(45)$(42)
Net deferred gains/(losses)$318$(4)$300$(2)
Income Statement Location
Pre-tax gains/(losses) recognized in income
Gas purchased for resale$2$— $— $— 
Non-utility revenue(23)(2)— — 
Other operations and maintenance expense1— 1 — 
Other interest expense117— — 
Total pre-tax gains/(losses) recognized in income$(9)$5$1 $— 
  For the Three Months Ended September 30,
            Con Edison           CECONY
(Millions of Dollars)Balance Sheet Location2017
 2016 2017
2016
Pre-tax gains/(losses) deferred in accordance with accounting rules for regulated operations:   
CurrentDeferred derivative gains$(4) $(1) $(3)$(3)
NoncurrentDeferred derivative gains1 (2) 1—
Total deferred gains/(losses) $(3) $(3) $(2)$(3)
CurrentDeferred derivative losses$(11) $(19) $(9)$(18)
CurrentRecoverable energy costs(40) (39) (38)(35)
NoncurrentDeferred derivative losses(12) (17) (8)(14)
Total deferred gains/(losses) $(63) $(75) $(55)$(67)
Net deferred gains/(losses) $(66) $(78) $(57)$(70)
 Income Statement Location      
Pre-tax gains/(losses) recognized in income      
 Purchased power expense
$—
 $(37)(b)
$—

$—
 Gas purchased for resale(47) (38) —
—
 Non-utility revenue5(a)(2)(b)—
—
Total pre-tax gains/(losses) recognized in income$(42) $(77) 
$—

$—
(a)For the three months ended September 30, 2017, Con Edison recorded an unrealized pre-tax gain in non-utility operating revenue ($6 million).
(b)For the three months ended September 30, 2016, Con Edison recorded unrealized pre-tax losses in non-utility operating revenue ($2 million) and purchased power expense ($23 million).



  For the Nine Months Ended September 30,
            Con Edison           CECONY
(Millions of Dollars)Balance Sheet Location2017
 2016 2017
2016
Pre-tax gains/(losses) deferred in accordance with accounting rules for regulated operations:   
CurrentDeferred derivative gains$(26) $6 $(22)$2
NoncurrentDeferred derivative gains(2) (1) (2)(1)
Total deferred gains/(losses) $(28) $5 $(24)$1
CurrentDeferred derivative losses$10 $19 $11$16
CurrentRecoverable energy costs(125) (163) (116)(148)
NoncurrentDeferred derivative losses(40) (5) (36)(3)
Total deferred gains/(losses) $(155) $(149) $(141)$(135)
Net deferred gains/(losses) $(183) $(144) $(165)$(134)
 Income Statement Location      
Pre-tax gains/(losses) recognized in income      
 Purchased power expense
$—
 $(106)(b)
$—

$—
 Gas purchased for resale(161) (72) —
—
 Non-utility revenue11(a)15(b)—
—
Total pre-tax gains/(losses) recognized in income$(150) $(163) 
$—

$—
(a)For the nine months ended September 30, 2017, Con Edison recorded an unrealized pre-tax gain in non-utility operating revenue ($2 million).
(b)For the nine months ended September 30, 2016, Con Edison recorded unrealized pre-tax gains and losses in non-utility operating revenue ($3 million loss) and purchased power expense ($11 million gain).

For the Nine Months Ended September 30,
          Con Edison          CECONY
(Millions of Dollars)Balance Sheet Location2021202020212020
Pre-tax gains/(losses) deferred in accordance with accounting rules for regulated operations:
CurrentDeferred derivative gains$443$23$415$20
NoncurrentDeferred derivative gains106159714
Total deferred gains/(losses)$549$38$512$34
CurrentDeferred derivative losses$25$12$22$9
CurrentRecoverable energy costs(30)(163)(29)(144)
NoncurrentDeferred derivative losses(16)(73)(13)(70)
Total deferred gains/(losses)$(21)$(224)$(20)$(205)
Net deferred gains/(losses)$528$(186)$492$(171)
Income Statement Location
Pre-tax gains/(losses) recognized in income
Gas purchased for resale$4$(3)$— $— 
Non-utility revenue(22)3— — 
Other operations and maintenance expense5(5)5 (5)
Other interest expense45(82)— — 
Total pre-tax gains/(losses) recognized in income$32$(87)$5 $(5)



31


The following table presents the hedged volume of Con Edison’s and CECONY’s commodity derivative transactions at September 30, 2017:2021:
 
Electric Energy
(MWh) (a)(b)		Capacity (MW) (a)Natural Gas
(Dt) (a)(b)		Refined Fuels
(gallons)
Con Edison23,870,400 39,914 280,838,997 4,704,000 
CECONY21,401,150 29,700 261,010,000 4,704,000 
(a)Volumes are reported net of long and short positions, except natural gas collars where the volumes of long positions are reported.
(b)Excludes electric congestion and gas basis swap contracts, which are associated with electric and gas contracts and hedged volumes.

48
 
Electric Energy
(MWh) (a)(b)
Capacity (MW) (a)
Natural Gas
(Dt) (a)(b)
Refined Fuels
(gallons)
Con Edison32,596,372
6,790
166,913,644
672,000
CECONY30,492,575
3,000
158,500,000
672,000

(a)Volumes are reported net of long and short positions, except natural gas collars where the volumes of long positions are reported.
(b)Excludes electric congestion and gas basis swap contracts, which are associated with electric and gas contracts and hedged volumes.

The Companies are exposed to credit risk related to transactions entered into primarily for the various energy supply and hedging activities by the Utilities and the Clean Energy Businesses. Credit risk relates to the loss that may result from a counterparty’s nonperformance. The Companies use credit policies to manage this risk, including an established credit approval process, monitoring of counterparty limits, netting provisions within agreements, collateral or prepayment arrangements, credit insurance and credit default swaps. The Companies measure credit risk exposure as the replacement cost for open energy commodity and derivative positions plus amounts owed from counterparties for settled transactions. The replacement cost of open positions represents unrealized gains, net of any unrealized losses where the Companies have a legally enforceable right to offset.
At September 30, 2017,2021, Con Edison and CECONY had $80$689 million and $8$424 million of credit exposure in connection with open energy supply net receivables and hedging activities, net of collateral, respectively. Con Edison’s net credit exposure consisted of $23$95 million with investment-grade counterparties, $23independent system operators, $103 million with non-investment grade/non-rated counterparties, $19 million with independent system operators and $15$160 million with commodity exchange brokers.brokers, and $331 million with investment-grade counterparties. CECONY’s net credit exposure consisted of $7$131 million with commodity exchange brokers and $1$293 million with investment-grade counterparties.
The collateral requirements associated with, and settlement of, derivative transactions are included in net cash flows from operating activities in the Companies’ consolidated statement of cash flows. Most derivative instrument contracts contain provisions that may require a party to provide collateral on its derivative instruments that are in a net liability position. The amount of collateral to be provided will depend on the fair value of the derivative instruments and the party’s credit ratings.
 
The following table presents the aggregate fair value of the Companies’ derivative instruments with credit-risk-related contingent features that are in a net liability position, the collateral posted for such positions and the additional collateral that would have been required to be posted had the lowest applicable credit rating been reduced one level and to below investment grade at September 30, 2017:2021:
 
(Millions of Dollars)Con Edison (a)CECONY (a)
Aggregate fair value – net liabilities$211$176
Collateral posted170165
Additional collateral (b) (downgrade one level from current ratings)244
Additional collateral (b) (downgrade to below investment grade from current ratings)83(c)54(c)
(Millions of Dollars)Con Edison (a) CECONY (a) 
Aggregate fair value – net liabilities$148 $131 
Collateral posted61 56 
Additional collateral (b) (downgrade one level from current ratings)23 22 
Additional collateral (b) (downgrade to below investment grade from current ratings)101(c)88(c)
(a)(a)Non-derivative transactions for the purchase and sale of electricity and gas and qualifying derivative instruments, which have been designated as normal purchases or normal sales, are excluded from the table. These transactions primarily include purchases of electricity from independent system operators. In the event the Utilities and the Clean Energy Businesses were no longer extended unsecured credit for such purchases, the Companies would be required to post additional collateral of $11 million at September 30, 2017. For certain other such non-derivative transactions, the Companies could be required to post collateral under certain circumstances, including in the event counterparties had reasonable grounds for insecurity.
(b)The Companies measure the collateral requirements by taking into consideration the fair value amounts of derivative instruments that contain credit-risk-related contingent features that are in a net liability position plus amounts owed to counterparties for settled transactions and amounts required by counterparties for minimum financial security. The fair value amounts represent unrealized losses, net of any unrealized gains where the Companies have a legally enforceable right to offset.
(c)Derivative instruments that are net assets have been excluded from the table. At September 30, 2017, if Con Edison had been downgraded to below investment grade, it would have been required to post additional collateral for such derivative instruments of $13 million.

Interest Rate Swap
In December 2016, the Clean Energy Businesses acquired Coram Wind project which holds an interest rate swapwere no longer extended unsecured credit for such purchases, the Companies would be required to post $14 million of additional collateral at September 30, 2021. For certain other such non-derivative transactions, the Companies could be required to post collateral under certain circumstances, including in the event counterparties had reasonable grounds for insecurity.
(b)The Companies measure the collateral requirements by taking into consideration the fair value amounts of derivative instruments that terminatescontain credit-risk-related contingent features that are in June 2024, pursuanta net liability position plus amounts owed to which it pays a fixed-rate of 2.0855 percentcounterparties for settled transactions and receives a LIBOR-based variable rate.amounts required by counterparties for minimum financial security. The fair value amounts represent unrealized losses, net of this interest rate swap was immaterial as ofany unrealized gains where the Companies have a legally enforceable right to offset.
(c)Derivative instruments that are net assets have been excluded from the table. At September 30, 2017 and a liability2021, if Con Edison had been downgraded to below investment grade, it would have been required to post additional collateral for such derivative instruments of $1 million as of December 31, 2016 on Con Edison’s consolidated balance sheet.$72 million.




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Note L —O – Fair Value Measurements
The accounting rules for fair value measurements and disclosures define fair value as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date in a principal or most advantageous market. Fair value is a market-based measurement that is determined based on inputs, which refer broadly to assumptions that market participants use in pricing assets or liabilities. These inputs can be readily observable, market corroborated, or generally unobservable firm inputs. The Companies often make certain assumptions that market participants would use in pricing the asset or liability, including assumptions about risk, and the risks inherent in the inputs to valuation techniques. The Companies use valuation techniques that maximize the use of observable inputs and minimize the use of unobservable inputs.
The accounting rules for fair value measurements and disclosures established a fair value hierarchy, which prioritizes the inputs to valuation techniques used to measure fair value in three broad levels. The rules require that assets and liabilities be classified in their entirety based on the level of input that is significant to the fair value measurement. Assessing the significance of a particular input may require judgment considering factors specific to the asset or liability and may affect the valuation of the asset or liability and their placement within the fair value

49

hierarchy. The Companies classify fair value balances based on the fair value hierarchy defined by the accounting rules for fair value measurements and disclosures as follows:
•Level 1 – Consists of assets or liabilities whose value is based on unadjusted quoted prices in active markets at the measurement date. An active market is one in which transactions for assets or liabilities occur with sufficient frequency and volume to provide pricing information on an ongoing basis. This category includes contracts traded on active exchange markets valued using unadjusted prices quoted directly from the exchange.
•Level 2 – Consists of assets or liabilities valued using industry standard models and based on prices, other than quoted prices within Level 1, that are either directly or indirectly observable as of the measurement date. The industry standard models consider observable assumptions including time value, volatility factors and current market and contractual prices for the underlying commodities, in addition to other economic measures. This category includes contracts traded on active exchanges or in over-the-counter markets priced with industry standard models.
•Level 3 – Consists of assets or liabilities whose fair value is estimated based on internally developed models or methodologies using inputs that are generally less readily observable and supported by little, if any, market activity at the measurement date. Unobservable inputs are developed based on the best available information and subject to cost benefit constraints. This category includes contracts priced using models that are internally developed and contracts placed in illiquid markets. It also includes contracts that expire after the period of time for which quoted prices are available and internal models are used to determine a significant portion of the value.
 


33

Assets and liabilities measured at fair value on a recurring basis as of September 30, 20172021 and December 31, 20162020 are summarized below.
 
  20212020
(Millions of Dollars)Level 1Level 2Level 3Netting
Adjustment (e)		TotalLevel 1Level 2Level 3Netting
Adjustment (e)		Total
Con Edison
Derivative assets:
Commodity (a)(b)(c)$215$533$29$(380)$397$19$42$4$53$118
Interest rate swaps (a)(b)(c)— 5 — — 5 — — — — — 
Other (a)(b)(d)479136— — 615431126— — 557
Total assets$694$674$29$(380)$1,017$450$168$4$53$675
Derivative liabilities:
Commodity (a)(b)(c)$40$462$34$(272)$264$7$296$23$46$372
Interest rate swaps (a)(b)(c)— 65— — 65— 106— — 106
Total liabilities$40$527$34$(272)$329$7$402$23$46$478
CECONY
Derivative assets:
Commodity (a)(b)(c)$142$367$2$(201)$310$15$20$— $(16)$19
Other (a)(b)(d)460128— — 588411120— — 531
Total assets$602$495$2$(201)$898$426$140$—$(16)$550
Derivative liabilities:
Commodity (a)(b)(c)$—$253$19$(61)$211$3$274$10$(19)$268
(a)The Companies’ policy is to review the fair value hierarchy and recognize transfers into and transfers out of the levels at the end of each reporting period. Con Edison and CECONY had no transfers between levels 1, 2, and 3 during the nine months ended September 30, 2021. Con Edison and CECONY had $1 million of commodity derivative liabilities transferred from level 3 to level 2 during the year ended December 31, 2020 because of availability of observable market data due to the decrease in the terms of certain contracts from beyond three years as of September 30, 2020 to less than three years as of December 31, 2020.
(b)Level 2 assets and liabilities include investments held in the deferred compensation plan and/or non-qualified retirement plans, exchange-traded contracts where there is insufficient market liquidity to warrant inclusion in Level 1, and certain over-the-counter derivative instruments for electricity, refined products and natural gas. Derivative instruments classified as Level 2 are valued using industry standard models that incorporate corroborated observable inputs, such as pricing services or prices from similar instruments that trade in liquid markets, time value and volatility factors.
(c)The accounting rules for fair value measurements and disclosures require consideration of the impact of nonperformance risk (including credit risk) from a market participant perspective in the measurement of the fair value of assets and liabilities. At September 30, 2021 and December 31, 2020, the Companies determined that nonperformance risk would have no material impact on their financial position or results of operations.
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  20172016
(Millions of Dollars)Level 1Level 2Level 3
Netting
Adjustment (e)
TotalLevel 1Level 2Level 3
Netting
Adjustment (e)
Total
Con Edison          
Derivative assets:          
Commodity (a)(b)(c)$6$28$2$(18)$18$14$33$7$(24)$30
Other (a)(b)(d)271118—
—
389222111—
—
333
Total assets$277$146$2$(18)$407$236$144$7$(24)$363
Derivative liabilities:          
Commodity (a)(b)(c)$2$155$22$(26)$153$4$144$6$(38)$116
Interest Rate Swap (a)(b)(c)—
—
—
—
—
—
1—
—
1
Total liabilities$2$155$22$(26)$153$4$145$6$(38)$117
CECONY          
Derivative assets:          
Commodity (a)(b)(c)$5$12$1$(9)$9$10$19$1$(10)$20
Other (a)(b)(d)248113—
—
361200106—
—
306
Total assets$253$125$1$(9)$370$210$125$1$(10)$326
Derivative liabilities:          
Commodity (a)(b)(c)$1$133$15$(17)$132$1$124
$—
$(26)$99
(d)Other assets are comprised of assets such as life insurance contracts within the deferred compensation plan and non-qualified retirement plans.
(a)The Companies’ policy is to review the fair value hierarchy and recognize transfers into and transfers out of the levels at the end of each reporting period. There were no transfers between levels 1, 2 and 3 for the nine months ended September 30, 2017 and for the year ended December 31, 2016.
(b)Level 2 assets and liabilities include investments held in the deferred compensation plan and/or non-qualified retirement plans, exchange-traded contracts where there is insufficient market liquidity to warrant inclusion in Level 1, certain over-the-counter derivative instruments for electricity, refined products and natural gas. Derivative instruments classified as Level 2 are valued using industry standard models that incorporate corroborated observable inputs; such as pricing services or prices from similar instruments that trade in liquid markets, time value and volatility factors.
(c)The accounting rules for fair value measurements and disclosures require consideration of the impact of nonperformance risk (including credit risk) from a market participant perspective in the measurement of the fair value of assets and liabilities. At September 30, 2017 and December 31, 2016, the Companies determined that nonperformance risk would have no material impact on their financial position or results of operations.
(d)Other assets are comprised of assets such as life insurance contracts within the deferred compensation plan and non-qualified retirement plans.
(e)Amounts represent the impact of legally-enforceable master netting agreements that allow the Companies to net gain and loss positions and cash collateral held or placed with the same counterparties.

(e)Amounts represent the impact of legally-enforceable master netting agreements that allow the Companies to net gain and loss positions and cash collateral held or placed with the same counterparties.

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


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 Fair Value of Level 3 at September 30, 2017
Valuation
Techniques
Unobservable InputsRange
 (Millions of Dollars)
Con Edison – Commodity
Electricity$(21)Discounted Cash FlowForward energy prices (a)$19.00-$76.25 per MWh
 
Discounted Cash FlowForward capacity prices (a)$1.26-$9.47 per kW-month
Transmission Congestion Contracts/Financial Transmission Rights1Discounted Cash FlowDiscount to adjust auction prices for inter-zonal forward price curves (b)50.0%
   Inter-zonal forward price curves adjusted for historical zonal losses (b)$0.50-$6.75 per MWh
Total Con Edison—Commodity$(20)   
CECONY – Commodity
Electricity$(15)Discounted Cash FlowForward energy prices (a)$20.50-$76.25 per MWh
Transmission Congestion Contracts1Discounted Cash FlowDiscount to adjust auction prices for inter-zonal forward price curves (b)50.0%
Total CECONY—Commodity$(14)   
(a)Generally, increases/(decreases) in this input in isolation would result in a higher/(lower) fair value measurement.Fair Value of Level 3 at September 30, 2021Valuation
Techniques		Unobservable InputsRange
(Millions of Dollars)
Con Edison – Commodity
Electricity$11Discounted Cash FlowForward energy prices (a)$15.00-$130.75 per MWh

(17)Discounted Cash FlowForward capacity prices (a)$0.26-$12.93 per kW-month
Transmission Congestion Contracts/Financial Transmission Rights1Discounted Cash FlowInter-zonal forward price curves adjusted for historical zonal losses (b)$(4.21)-$10.11 per MWh
Total Con Edison—Commodity$(5)
CECONY – Commodity
Electricity$(9)Discounted Cash FlowForward energy prices (a)$26.80-$98.51 per MWh
(10)Discounted Cash FlowForward capacity prices (a)$0.70-$12.93 per kW-month
Transmission Congestion Contracts2Discounted Cash FlowInter-zonal forward price curves adjusted for historical zonal losses (b)$0.63-$5.63 per MWh
Total CECONY—Commodity$(17)
(b)Generally, increases/(decreases) in this input in isolation would result in a lower/(higher) fair value measurement.
(a)Generally, increases/(decreases) in this input in isolation would result in a higher/(lower) fair value measurement.
(b)Generally, increases/(decreases) in this input in isolation would result in a lower/(higher) fair value measurement.
The table listed below provides a reconciliation of the beginning and ending net balances for assets and liabilities measured at fair value as of September 30, 20172021 and 20162020 and classified as Level 3 in the fair value hierarchy:
 
For the Three Months Ended September 30,
            Con Edison          CECONY
(Millions of Dollars)2021202020212020
Beginning balance as of July 1,$(9)$(14)$(7)$(7)
Included in earnings21— 1— 
Included in regulatory assets and liabilities(17)(3)(11)(1)
Settlements———(1)
Ending balance as of September 30,$(5)$(17)$(17)$(9)
 For the Three Months Ended September 30,
   ��        Con Edison          CECONY
(Millions of Dollars)2017
20162017
2016
Beginning balance as of July 1,$(10)$5$(6)$2
Included in earnings7(4)1—
Included in regulatory assets and liabilities(13)(5)(8)(3)
Sales—
4—
—
Settlements(4)1(1)1
Ending balance as of September 30,$(20)$1$(14)
$—


For the Nine Months Ended September 30,
            Con Edison          CECONY
(Millions of Dollars)2021202020212020
Beginning balance as of January 1,$(19)$(16)$(10)$(6)
Included in earnings20(7)(2)(3)
Included in regulatory assets and liabilities(9)(3)(7)(3)
Settlements3923
Ending balance as of September 30,$(5)$(17)$(17)$(9)
 For the Nine Months Ended September 30,
            Con Edison          CECONY
(Millions of Dollars)2017
20162017
2016
Beginning balance as of January 1,$1$6$1$8
Included in earnings8(1)1(1)
Included in regulatory assets and liabilities(21)(11)(14)(6)
Purchases1211
Sales—
4—
—
Settlements(9)1(3)(2)
Ending balance as of September 30,$(20)$1$(14)
$—



For the Utilities, realized gains and losses on Level 3 commodity derivative assets and liabilities are reported as part of purchased power, gas and fuel costs. The Utilities generally recover these costs in accordance with rate provisions approved by the applicable state public utilities regulators. Unrealized gains and losses for commodity derivatives are generally deferred on the consolidated balance sheet in accordance with the accounting rules for regulated operations.

51


For the Clean Energy Businesses, realized and unrealized gains and losses on Level 3 commodity derivative assets and liabilities are reported in non-utility revenues (immaterial for both periods) and purchased power costs ($4 million gain and $5 million loss) on the consolidated income statement for the three months ended September 30, 20172021 and 2016, respectively.2020 ($20 million gain and $1 million gain, respectively). Realized and unrealized gains and losses on Level 3 commodity derivative assets and liabilities are reported in non-utility revenues (immaterial for both periods) and purchased power costs ($3 million gain and $6 million loss) on the consolidated income statement for the nine months ended September 30, 20172021 and 2016, respectively. The change in fair value relating to Level 3 commodity derivative assets and liabilities held at September 30, 2017 and 2016 is included in non-utility revenues (immaterial for both periods) and purchased power costs2020 ($4 million gain and $4 million loss) on the consolidated income statement for the three months ended


35

September 30, 2017 and 2016, respectively. For the nine months ended September 30, 2017 and 2016, the change in fair value relating to Level 3 commodity derivative assets and liabilities is included in non-utility revenues (immaterial for both periods) and purchased power costs ($224 million gain and $2 million loss) on the consolidated income statement, respectively.gain, respectively).

Note M —P – Variable Interest Entities
Con Edison entersThe accounting rules for consolidation address the consolidation of a variable interest entity (VIE) by a business enterprise that is the primary beneficiary. A VIE is an entity that does not have a sufficient equity investment at risk to permit it to finance its activities without additional subordinated financial support, or whose equity investors lack the characteristics of a controlling financial interest. The primary beneficiary is the business enterprise that has the power to direct the activities of the VIE that most significantly impact the VIE’s economic performance and either absorbs a significant amount of the VIE’s losses or has the right to receive benefits that could be significant to the VIE.
The Companies enter into arrangements including leases, partnerships and electricity purchase agreements, with various entities. As a result of these arrangements, Con Edison retainsthe Companies retain or may retain a variable interest in these entities.
CECONY
CECONY has an ongoing long-term electricity purchase agreement with Brooklyn Navy Yard Cogeneration Partners, LP, a potential variable interest entity (VIE).VIE. In April 2017, CECONY's long-term electricity purchase agreement with Cogen Technologies Linden Venture, LP, another potential VIE, expired. In 2016, requests were2020, a request was made of these counterpartiesthis counterparty for information necessary to determine whether the entity was a VIE and whether CECONY is the primary beneficiary; however, the information was not made available. The payments for these contractsthis contract constitute CECONY’s maximum exposure to loss with respect to the potential VIEs.VIE.


The following table summarizesClean Energy Businesses
In June 2021, a subsidiary of the VIEsClean Energy Businesses sold substantially all of its membership interest in a renewable electric project, and retained an equity interest of $11 million in the project which, Con Edison Development has entered into as of September 30, 2017:
Project Name (a)
Generating
Capacity (b)
(MW AC)
Power Purchase Agreement Term (in Years)
Year of
Initial
Investment
Location
Maximum
Exposure to Loss
(Millions of Dollars) (c)
Copper Mountain Solar 3128202014Nevada$175
Mesquite Solar 183202013Arizona102
Copper Mountain Solar 275252013Nevada83
California Solar55252012California64
Broken Bow II38252014Nebraska44
Texas Solar 432252014Texas47
(a) With the exception of Texas Solar 4, Con Edison’s ownership interest2021, is 50 percentvalued at $7 million and these projects areis accounted for as an equity method investment. See Note R. The earnings of the project are determined using the equityhypothetical liquidation at book value (HLBV) method of accounting. Withaccounting, and such earnings were not material for the exception of Texas Solar 4,three and nine months ended September 30, 2021. Con Edison is not the primary beneficiary since the power to direct the activities that most significantly impact the economics of the entities are shared equally betweenrenewable electric project is not held by the Clean Energy Businesses.

In February 2021, a subsidiary of the Clean Energy Businesses entered into an agreement relating to certain projects (CED Nevada Virginia) with a noncontrolling tax equity investor to which a percentage of earnings, tax attributes and cash flows will be allocated. CED Nevada Virginia is a consolidated entity in which Con Edison Development and third parties. Con Edison’s ownership interest in Texas Solar 4 is 80has less than a 100 percent and is consolidated in the financial statements.membership interest. Con Edison is the primary beneficiary since the power to direct the activities that most significantly impact the economics of Texas Solar 4CED Nevada Virginia during construction of the projects, and upon commercial operation, is held by the Clean Energy Businesses.

For the three months ended September 30, 2021, the hypothetical liquidation at book value (HLBV) method of accounting for CED Nevada Virginia resulted in a $74 million loss ($56 million, after-tax) for the tax equity investor and an equivalent amount of income for Con Edison.

For the nine months ended September 30, 2021, the HLBV method of accounting for CED Nevada Virginia resulted in a $127 million loss ($96 million, after tax) for the tax equity investor and an equivalent amount of income for Con Edison.

In December 2018,the Clean Energy Businesses completed its acquisition of Sempra Solar Holdings, LLC. Included in the acquisition were certain operating projects (Tax Equity Projects) with a noncontrolling tax equity investor to which a percentage of earnings, tax attributes and cash flows are allocated. The Tax Equity Projects are consolidated entities in which Con Edison Development.
(b) Representshas less than a 100 percent membership interest. Con Edison Development’s ownership interestis the primary beneficiary since the power to direct the activities that most significantly impact the economics of the Tax
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Equity Projects is held by the Clean Energy Businesses. Electricity generated by the Tax Equity Projects is sold to utilities and municipalities pursuant to long-term power purchase agreements.

For the three months ended September 30, 2021, the HLBV method of accounting for the Tax Equity Projects resulted in an immaterial amount of income for the tax equity investor and $14 million of income ($11 million, after-tax) for Con Edison. For the three months ended September 30, 2020, the HLBV method of accounting for the Tax Equity Projects resulted in $9 million of income ($7 million, after-tax) for the tax equity investor and $7 million of income ($5 million, after-tax) for Con Edison.

For the nine months ended September 30, 2021, the HLBV method of accounting for the Tax Equity Projects resulted in $8 million of income ($6 million, after tax) for the tax equity investor and $27 million of income ($20 million, after tax) for Con Edison. For the nine months ended September 30, 2020, the HLBV method of accounting for the Tax Equity Projects resulted in $38 million of income ($29 million, after tax) for the tax equity investor and a $3 million loss ($2 million, after tax) for Con Edison.

Con Edison has determined that the use of HLBV accounting is reasonable and appropriate to attribute income and loss to the tax equity investors. Using the HLBV method, the company's earnings from the projects are adjusted to reflect the income or loss allocable to the tax equity investors calculated based on how the project would allocate and distribute its cash if it were to sell all of its assets for their carrying amounts and liquidate at a particular point in time. Under the HLBV method, the company calculates the liquidation value allocable to the tax equity investors at the beginning and end of each period based on the contractual liquidation waterfall and adjusts its income for the period to reflect the change in the project.
(c) For investments accounted for under the equity method, maximum exposure is equalliquidation value allocable to the carrying value of the investment on thetax equity investors.

At September 30, 2021 and December 31, 2020, Con Edison’s consolidated balance sheet. For consolidated investments, such as Texas Solar 4, maximum exposure is equal tosheet included the netfollowing amounts associated with its VIEs:
Tax Equity Projects
Great Valley Solar
(c)(d)		Copper Mountain - Mesquite Solar
 (c)(e)		CED Nevada Virginia (c)(h)
(Millions of Dollars)20212020202120202021
Non-utility property, less accumulated depreciation (f)(g)$278$284$435$446$647
Other assets403917417657
Total assets (a)$318$323$609$622$704
Other liabilities14137971328
Total liabilities (b)$14$13$79$71$328
(a)The assets of the project onTax Equity Projects and CED Nevada Virginia represent assets of a consolidated VIE that can be used only to settle obligations of the consolidated balance sheet less any applicable noncontrolling interest ($7 millionVIE.
(b)The liabilities of the Tax Equity Projects and CED Nevada Virginia represent liabilities of a consolidated VIE for Texas Solar 4). which creditors do not have recourse to the general credit of the primary beneficiary.
(c)Con Edison did not provide any financial or other support during the three and nine months ended September 30, 2017year that was not previously contractually required.

(d)Great Valley Solar consists of the Great Valley Solar 1, Great Valley Solar 2, Great Valley Solar 3 and Great Valley Solar 4 projects, for which the noncontrolling interest of the tax equity investor was $88 million and $82 million at September 30, 2021 and December 31, 2020, respectively.

(e)Copper Mountain - Mesquite Solar consists of the Copper Mountain Solar 4, Mesquite Solar 2 and Mesquite Solar 3 projects for which the noncontrolling interest of the tax equity investor was $122 million and $134 million at September 30, 2021 and December 31, 2020, respectively.
(f)Non-utility property is reduced by accumulated depreciation of $24 million for Great Valley Solar, $40 million for Copper Mountain - Mesquite Solar, and $5 million for CED Nevada Virginia at September 30, 2021.
(g)Non-utility property is reduced by accumulated depreciation of $18 million for Great Valley Solar and $30 million for Copper Mountain - Mesquite Solar at December 31, 2020.
(h)CED Nevada Virginia consists of the Copper Mountain Solar 5, Battle Mountain Solar and Water Strider Solar projects for which the noncontrolling interest of the tax equity investor was $128 million at September 30, 2021.


Note N —Q – New Financial Accounting Standards
In May 2014, the Financial Accounting Standards Board (FASB) and the International Accounting Standards Board jointly issued a revenue recognition standard that will supersede the revenue recognition requirements within Accounting Standards Codification Topic 605, “Revenue Recognition,” and most industry-specific guidance under the Codification through Accounting Standards Update (ASU) No. 2014-09, “Revenue from Contracts with Customers (Topic 606).” The purpose of the new guidance is to create a consistent framework for revenue recognition. The guidance clarifies how to measure and recognize revenue arising from customer contracts to depict the transfer of goods or services in an amount that reflects the consideration the entity expects to receive. Amendments were issued subsequently to clarify key areas including principal/agent considerations, performance obligations, licensing, sales taxes, noncash consideration, and contracts. The new standard is effective for reporting periods beginning after December 15, 2017. Early adoption is permitted for reporting periods beginning after December 15, 2016, however, the Companies plan to adopt the new standard for reporting periods beginning after December 15, 2017.

Under the new standard, companies may use either of the following transition methods: (i) a full retrospective approach reflecting the application of the standard in each prior reporting period with the option to elect certain practical expedients, or (ii) a modified retrospective approach with the cumulative effect of initially adopting ASU


36

36




2014-09 recognized at the date of adoption (which includes additional footnote disclosures). The Companies anticipate using the modified retrospective approach.

The Companies have completed their analyses of the impact of the new standard on the majority of their various revenue streams.

The majority of the Companies’ sales are derived from tariffs to provide electric, gas, and steam service to customers. For such tariffs, the Companies expect that the revenue from contracts with customers under ASU 2014-09 will be equivalent to revenue from electricity, gas, or steam supplied in that period which is consistent with current practice. Consequently, the Companies do not anticipate that the new standard will materially impact the amount and/or timing of such revenues.

Con Edison has also completed its evaluation for the majority of the revenue at the Clean Energy Businesses, including revenue from the sale of energy-related products and services to retail customers, revenue from operating renewable and energy infrastructure projects, and revenue from the sale of renewable energy credits. For such revenues, Con Edison expects that the revenue from contracts with customers under ASU 2014-09 will not be materially different from revenue recorded consistent with current practice. Consequently, Con Edison does not anticipate that the new standard will materially impact the amount and/or timing of such revenues.

The Companies continue to review the potential impacts of the remaining revenue at the Utilities and the Clean Energy Businesses on the Companies' financial position, results of operations and liquidity as well as the additional disclosures and related controls required under the new standard, and anticipate completing such reviews during the fourth quarter of 2017.

In February 2016,March 2020, the FASB issued amendments on financial reporting of leasing transactions through ASU No. 2016-02, “Leases2020-04, Reference Rate Reform (Topic 842)." The amendments require lessees to recognize assets and liabilities on the balance sheet and disclose key information about leasing arrangements. Lessees will need to recognize a right-of-use asset and a lease liability for virtually all of their leases (other than leases that meet the definition of a short-term lease). Lessor accounting is similar to the current model, but updated to align with certain changes to the lessee model. For income statement purposes, the pattern of expense recognition will be dependent on whether transactions are designated as operating leases or finance leases. The amendments are effective for reporting periods beginning after December 15, 2018. Early adoption is permitted. The amendments must be adopted using a modified retrospective transition and provide for certain practical expedients. Based on the existing portfolio of leases at implementation, for leases currently classified as operating leases, the Companies expect to recognize on the statements of financial position right-of-use assets and lease liabilities. The Companies are in the process of evaluating the potential impact848): Facilitation of the new guidanceEffects of Reference Rate Reform on Financial Reporting (ASU 2020-04). In 2017, the Companies’ resultsUnited Kingdom’s Financial Conduct Authority announced that it intends to stop persuading or compelling banks to submit the London Interbank Offered Rate (LIBOR), a benchmark interest rate referenced in a variety of operationsagreements, after 2021. In March 2021, the United Kingdom's Financial Conduct Authority confirmed that U.S. Dollar LIBOR will no longer be published after

53

December 31, 2021 for one-week and liquidity.

two-month U.S. Dollar LIBOR tenors, and after June 30, 2023 for all other U.S. Dollar LIBOR tenors. ASU 2020-04 provides entities with optional expedients and exceptions for applying generally accepted accounting principles to contract modifications and hedging relationships, subject to meeting certain criteria, that reference LIBOR or another reference rate expected to be discontinued. In January 2017,2021, the FASB issued amendments to the guidance for Business Combinations through ASU 2017-01, “Business Combinations (Topic 805): Clarifying the Definition of a Business.”2021-01 to include all contract modifications and hedging relationships affected by reference rate reform, including those that do not directly reference LIBOR or another reference rate expected to be discontinued, and clarify which optional expedients may be applied to them. The amendments in this update clarify the definition of a businessguidance can be applied prospectively. The optional relief is temporary and provide guidance on evaluating whether transactions shouldgenerally cannot be accounted for as acquisitions (or disposals) of assetsapplied to contract modifications and hedging relationships entered into or businesses. For public entities, the amendments are effective for reporting periods beginningevaluated after December 15, 2017. Early adoption is permitted.31, 2022. The application of thisCompanies do not expect the new guidance is not expected to have a material impact on the Companies’their financial position, results of operations andor liquidity.



Note R – Dispositions
In January 2017, the FASB issued amendments to the guidance for the subsequent measurement of goodwill through ASU 2017-04, “Intangibles-Goodwill and Other (Topic 350): Simplifying the Test for Goodwill Impairment.” The amendments in this update simplify goodwill impairment testing by eliminating Step 2April 2021, a subsidiary of the goodwill impairment test whereinClean Energy Businesses entered into an entity hasagreement to compute the implied fair value of goodwill by performing procedures to determine the fair valuesell substantially all of its assetsmembership interests in a renewable electric project that it developed and liabilities. Under the new guidance, an entity should recognize an impairment charge for the amount by which the carrying amount exceeds the reporting unit’s fair value up to the total amountalso all of goodwill allocated to that reporting unit. For public entities, the amendments are effective for reporting periods beginning after December 15, 2019. Early adoption is permitted. The application of this guidance is not expected to haveits membership interests in a material impact on the Companies’ financial position, results of operations and liquidity.

In February 2017, the FASB issued amendments to the guidance for other income through ASU 2017-05, “Other Income-Gains and Losses from the Derecognition of Nonfinancial Assets (Subtopic 610-20): Clarifying the Scope of Asset Derecognition Guidance and Accounting for Partial Sales of Nonfinancial Assets.” The amendments in this update clarify the scope of assets within Subtopic 610-20 and add guidance for partial sales of nonfinancial assets. The amendments are effective upon the adoption of ASU 2014-09, and therefore will be effective for reporting


37

periods beginning after December 15, 2017. The Company is in the process of evaluating the potential impact of the new guidance on the Company’s financial position, results of operations and liquidity.

In March 2017, the FASB issued amendments to the guidance for retirement benefits through ASU 2017-07, “Compensation-Retirement Benefits (Topic 715): Improving the Presentation of Net Periodic Pension Cost and Net Periodic Postretirement Benefit Cost.” The amendments in this update modify the presentation of net benefit cost, where the service component must be disaggregated from the other components of net benefit cost and be presented in the same line item as current employee compensation costs. The remaining components of the net benefit cost should be presented outside of income from operations. Additionally, the update allows only the service cost component to be eligible for capitalization. For public entities, the amendments are effective for reporting periods beginning after December 15, 2017. Early adoption is permitted. The Companies are in the process of evaluating the potential impact of the new guidance on the Companies’ financial position, results of operations and liquidity.

In March 2017, the FASB issued amendments to the guidance for debt securities through ASU 2017-08, “Receivables-Nonrefundable Fees and Other Costs (Subtopic 310-20): Premium Amortization on Purchased Callable Debt Securities.” The amendments in this update shorten the amortization period for certain callable debt securities held at a premium. The amendments do not require an accounting change for securities held at a discount; the discount continues to be amortized to maturity. For public entities, the amendments are effective for reporting periods beginning after December 15, 2018. Early adoption is permitted. The application of this guidance is not expected to have a material impact on the Companies’ financial position, results of operations and liquidity.

In May 2017, the FASB issued amendments to the guidance for stock compensation through ASU 2017-09, “Compensation-Stock Compensation (Topic 718): Scope of Modification Accounting.” The amendments in this update specify that changes to value, vesting conditions, or classification of an existing share-based payment award require application of modification accounting in Topic 718. For public entities, the amendments are effective for reporting periods beginning after December 15, 2017. Early adoption is permitted. The application of this guidance is not expected to have a material impact on the Companies’ financial position, results of operations and liquidity.

In August 2017, the FASB issued amendments to the guidance for derivatives and hedging through ASU 2017-12, “Derivatives and Hedging (Topic 815): Targeted Improvements to Accounting for Hedging Activities.” The amendments in this update provide greater clarification on hedge accounting for risk components, presentation and disclosure of hedging instruments, and overall targeted improvements to simplify hedge accounting. For public entities, the amendments are effective for reporting periods beginning after December 15, 2018 and interim periods within those fiscal years. Early adoption is permitted. The Companies are in the process of evaluating the potential impact of the new guidance on the Companies’ financial position, results of operations and liquidity.

Note O — Dispositions
Upton 2
In May 2017, Con Edison Development sold Upton 2, a development stage solarrenewable electric production project that it acquired in 2016. The sales were completed in June 2021. The combined carrying value of both projects was approximately $180 million in June 2021. The net pre-tax gain on the sales was $3 million ($2 million after-tax) and was included within "Other operations and maintenance" on Con Edison's consolidated income statement for the nine months ended September 30, 2021. The retained portion of the membership interest in the renewable electric project, of $11 million, was calculated based on a discounted cash flow of future projected earnings, and the retained portion is accounted for as an equity method investment. The portion of the gain attributable to Vistra Asset Co. and recorded a $1 million gain on sale ($0.7 million, netthe retained portion of taxes). In addition, Con Edison Development agreed to perform the engineering, procurement and constructionmembership interest was not material for the 180 MW (AC) project,nine months ended September 30, 2021. See Note P.

In July 2021, a subsidiary of CET Gas and its joint venture partner completed the first of two closings for the sale of their combined interests in Stagecoach. The first closing was completed for a total sale price of $1,195 million, of which is expected$614 million, including working capital, was attributed to be substantially completedCET Gas. See "Investments" in 2018.


Note A.

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Table of Contents

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, 20162020 (File Nos. 1-14514 and 1-1217, 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, 20172021 and June 30, 20172021 (File Nos. 1-14514 and 1-1217).


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.
 ceiorgchartvfa05.jpg
Con Edison
CECONYO&RClean Energy BusinessesCon 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. Con Edison Transmission invests in and seeks to develop electric transmission facilitiesprojects and manages, through joint ventures, both electric and gas pipelineassets. CET Gas and storage facilities.CECONY are considering strategic alternatives with respect to their interests in Honeoye Storage Corporation (Honeoye), of which CET owns a 71.2 percent interest and CECONY owns a 28.8 percent interest.


Con Edison seeks to provide shareholder value through continued dividend growth, supported by earnings growth in regulated utilities and contracted electric and gas assets. The company invests to provide reliable, resilient, safe and clean energy critical for its New York City’s growing economy.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.






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CECONY
Electric
CECONY provides electric service to approximately 3.43.5 million customers in all of New York City (except a part of Queens) and most of Westchester County, an approximately 660 square mile service area with a population of more than nine million.


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Electric Supply
In 2019, the New York State Department of Environmental Conservation (NYSDEC) issued regulations that may require the retirement or seasonal unavailability of fossil-fueled electric generating units owned by CECONY and others in New York City. The NYSDEC rule limits nitrous oxides (NOx) emissions during the ozone season from May through September and affects older peaking units that are generally located downstate and needed during periods of high electric demand or for local reliability purposes. Compliance with the rule will require affected units (approximately 1,400 MW in CECONY's service territory, of which 65 MW is owned by CECONY) to cease operation during the ozone season, install emission controls, repower, or retire by 2023 or 2025. The NYISO, in its 2020 Reliability Needs Assessment study that was approved by the NYISO board, reported local and bulk transmission system reliability needs that are expected to be caused by the retirement or unavailability of some of the impacted units. In January 2021, CECONY updated its Local Transmission Plan (LTP) to address the identified reliability needs on its local system through the construction of three transmission projects, the Reliable Clean City (RCC) projects. In addition, CECONY continues to monitor forecasted system voltage performance and if a need for support persists in the forecast, CECONY will propose solutions in a subsequent LTP update. CECONY estimates that the costs of the RCC projects to solve the local reliability needs to be approximately $780 million over four years. In April 2021, the NYSPSC approved CECONY’s December 2020 petition to recover $780 million of costs to construct the RCC projects to solve the local reliability needs.

During the summer of 2017,2021, electric peak demand in CECONY's service area was 12,32112,039 MW (which occurred on July 20, 2017)June 30, 2021). At design conditions, electric peak demand in the company's service area would have been approximately 13,27012,336 MW in 20172021 compared to the company's forecast of 13,47012,880 MW. The company'slower peak demand at design conditions as compared to the forecast was primarily due to the slower than expected recovery of electric demand in CECONY's territory during the emergence from the COVID-19 pandemic. The company decreased its five-year forecast of average annual growth of thechange in electric peak demand in its service area at design conditions isfrom approximately 0.10.8 percent for 2018(for 2021 to 2022 (as compared2025) to approximately 0.20.4 percent for 2017(for 2022 to 2021)2026).

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


In May 2017, the company2021, 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 2.31.4 percent (for 20172021 to 2021)2025) to 1.6approximately 1.3 percent (for 20182022 to 2022)2026). The slight decrease reflects among other things,the negative impact that the current economy and lingering effects of the COVID-19 pandemic is expected to have on large new construction, usage from existing large customers, as well as the projected number of applications for firm gas service in rolling the forecast forward a year, another yearCECONY's service territory. The decrease also reflects an expected increase in customers’ energy efficiency measures and electrification of oil-to-gas conversions has been completed and fewer opportunities to convert remain.space heating.


Steam
CECONY operates the largest steam distribution system in the United States by producing and delivering approximately 19,50016,981 MMlb of steam annually to approximately 1,6401,558 customers in parts of Manhattan.


In June 2021, CECONY changed its five-year forecast of average annual growth in the peak steam demand in its service area at design conditions from a 0.4 percent decrease to a 0.1 percent increase (for 2022 to 2026), as steam sales are expected to recover from the decrease in customer usage during 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 and northern New Jersey, an approximately 1,300 square mile service area.


During the summer of 2017,2021, electric peak demand in O&R's service area was 1,4101,520 MW (which occurred on June 13, 2017)30, 2021). At design conditions, electric peak demand in the company's service area would have been approximately 1,6151,575 MW in 20172021 compared to the company's forecast of 1,6251,530 MW. The company’sdifference at design conditions is higher than expected due to a decrease in residential vacancies and faster recovery of electric demand in O&R's service territory during the emergence from the COVID-19 pandemic. The company increased its five-year
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forecast of average annual growth of thechange in electric peak demand in its service area at design conditions is flat for 2018from approximately (0.5) percent (for 2021 to 2022 (as compared2025) to approximately (0.1)(0.3) percent for 2017(for 2022 to 2021)2026).


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


In May 2021, 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 0.2 percent (for 2021 to 2025) to approximately 0.1 percent (for 2022 to 2026). The decrease reflects an expected increase in customers' energy efficiency measures and electrification of space heating.

Clean Energy Businesses
Con Edison Clean Energy Businesses, Inc. has three wholly-owned subsidiaries: Consolidated Edison Development, Inc. (Con Edison Development), Consolidated Edison Energy, Inc. (Con Edison Energy) and Consolidated Edison Solutions, Inc. (Con Edison Solutions). Con Edison Clean Energy Businesses, Inc., together with theseits subsidiaries, (which were formerly referred to as the competitive energy businesses), are referred to in this report as the Clean Energy Businesses.

In September 2016, Con Edison sold the retail electric supply business of its The Clean Energy Businesses develop, own and operate renewable and sustainable energy infrastructure projects and provide energy-related products and services to a subsidiary of Exelon Corporation for cash consideration of $235 million. In addition, Con Edison received $23 million in cash as a working capital adjustment in February 2017.wholesale and retail customers.

In May 2017, Con Edison Development sold a development-stage solar electric production project for $11 million and agreed to perform engineering, procurement and construction for the project. See Note O to the Third Quarter Financial Statements.



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Con Edison Transmission
Con Edison Transmission, Inc. invests in electric transmission projects and manages, through joint ventures, both electric and gas assets while seeking to develop electric transmission projects 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 is proposinghas been selected to build additional electric transmission assets in New York. In May 2021, a CET Gas owns, through subsidiaries,subsidiary entered into a purchase and sale agreement pursuant to which it agreed to sell its 50 percent interest in Stagecoach Gas Services LLC (Stagecoach), a joint venture that owns, operatesowned and will further developoperated an existing gas pipeline and storage business located in northernnortheastern Pennsylvania and the southern tier of New York.York, and in July 2021 the transaction was substantially completed. See "Investments" in Note A and Note R to the Third Quarter Financial Statements. Also, CET Gas and CECONY own 71.2 percent and 28.8 percent interests, respectively, in Honeoye, Storage Corporation which operates a gas storage businessfacility in upstate New York. CET Gas and CECONY are considering strategic alternatives with respect to their interests in Honeoye. At September 30, 2021, the consolidated carrying value of Honeoye was $25 million. In addition, CET Gas owns a 12.510.6 percent interest (that is expected to be reduced to 8.5 percent based on the current project cost estimate and CET Gas’ previous capping of its cash contributions to the joint venture) in Mountain Valley Pipeline LLC (MVP), a joint venture developing a proposed 300 mile300-mile gas transmission project in West Virginia and Virginia (Mountain Valley Pipeline).Virginia. Con Edison Transmission, Inc., together with CET Electric and CET Gas, are referred to in this report as Con Edison Transmission.

In October 2017, FERC issued a Certificate of Public Convenience and Necessity for the Mountain Valley Pipeline. The project has an estimated total cost of $3,000 million to $3,500 million and an in-service date targeted for late 2018.  


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

  
For the Three Months Ended
September 30, 2021		For the Nine Months Ended
September 30, 2021		At September 30, 2021
(Millions of Dollars, except percentages)Operating
Revenues		Net Income for
Common Stock		Operating
Revenues		Net Income for
Common Stock		Assets
CECONY$3,09286 %$41878 %$8,78485 %$1,01190 %$52,17883 %
O&R2577 265 6997 535 3,3445 
Total Utilities3,34993 44483 9,48392 1,06495 55,52288 
Clean Energy Businesses (a)2647 10620 7798 22320 6,60410 
Con Edison Transmission (b)
1— 1— 3— (142)(13)4931 
Other (c)
(1)— (13)(3)(4)— (23)(2)3191 
Total Con Edison$3,613100 %$538100 %$10,261100 %$1,122100 %$62,938100 %
(a)Net income for common stock from the Clean Energy Businesses for the three and nine months ended September 30, 2021 includes $(9) million and $20 million, respectively, of net after-tax mark-to-market income/(loss) and reflects $52 million (after-tax) and $87 million (after-tax), respectively, of income attributable to the non-controlling interest of a tax equity investor in renewable electric production projects accounted for under the HLBV method of accounting. Net income for common stock from the Clean Energy Businesses for the nine months ended September 30, 2021 includes $(3) million (after-tax) for the loss from the sale of a renewable electric production project. See Note P to the Third Quarter Financial Statements.
(b)Net income for common stock from Con Edison Transmission for the nine months ended September 30, 2021 includes $(153) million of a net after-tax impairment loss related to its investment in Stagecoach. See Note A to the Third Quarter Financial Statements.
(c)Other includes parent company and consolidation adjustments. Net income for common stock for the three and nine months ended September 30, 2021 includes $(4) million (after-tax) and $(7) million (after-tax), respectively, of loss attributable to the non-controlling interest of a tax equity investor in renewable electric production projects accounted for under the HLBV method of accounting. Net income for common stock for the nine months ended September 30, 2021 includes $6 million of income tax impact for the impairment loss related to Con Edison's investment in Stagecoach and $(2) million of net after-tax mark-to-market loss.


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For the Three Months Ended
September 30, 2017		For the Nine Months Ended
September 30, 2017		At September 30, 2017
(Millions of Dollars, except percentages)
Operating
Revenues
Net Income
Operating
Revenues
Net IncomeAssets
CECONY$2,79987%$40188%$7,94888%$88387%$41,64785%
O&R2347
225
6677
535
2,8326
Total Utilities3,03394
42393
8,61595
93692
44,47991
Clean Energy Businesses (a)1776
265
4605
545
2,8116
Con Edison Transmission1—
92
1—
252
1,2102
Other (b)—
—
(1)—
(4)—
51
7461
Total Con Edison$3,211100%$457100%$9,072100%$1,020100%$49,246100%
(a)Net income from the Clean Energy Businesses includes for the nine months ended September 30, 2017 $1 million net after-tax gain related to the sale of a development stage solar electric production project (see Note O to the Third Quarter Financial Statements). Also includes for the three and nine months ended September 30, 2017 $4 million and $1 million of net after-tax mark-to-market gains, respectively.
(b)Other includes parent company and consolidation adjustments.


Coronavirus Disease 2019 (COVID-19) Impacts
The Companies continue to respond to the Coronavirus Disease 2019 (COVID-19) global pandemic by working to reduce the potential risks posed by its spread to employees, customers and other stakeholders. The Companies continue to employ an incident command structure led by a pandemic planning team. The Companies support employee health and facility hygiene through regular cleaning and disinfecting of all work and common areas, promoting social distancing, allowing employees to work remotely and directing employees to stay at home if they are experiencing COVID or flu-like symptoms. Employees who test positive for COVID-19 are directed to quarantine at home and are evaluated for close, prolonged contact with other employees that would require those employees to quarantine at home. Following the Centers for Disease Control and Prevention guidelines, sick or quarantined employees return to work when they can safely do so. The Utilities continue to provide critical electric, gas and steam service to customers during the pandemic. Additional safety protocols have been implemented to protect employees, customers and the public, when work at customer premises is required.

On October 22, 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 (January 4, 2022), unless employees are legally entitled to an accommodation. The Companies are continuing to monitor the situation closely and are implementing appropriate measures to mitigate any workforce and cost impacts that may occur.

Below is additional information related to the effects of the COVID-19 pandemic and the Companies’ actions. Also, see “COVID-19 Regulatory Matters” in Note B to the 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 has several key business tax relief measures that may present potential cash benefits and/or refund opportunities for Con Edison and its subsidiaries, including permitting a five-year carryback of a net operating loss (NOL) for tax years 2018, 2019 and 2020, temporary removal of the 80 percent limitation of NOL carryforwards against taxable income for tax years before 2021, temporary relaxation of the limitations on interest deductions, Employee Retention Tax Credit and deferral of payments of employer payroll taxes.

Con Edison carried back its NOL of $29 million from tax year 2018 to tax year 2013. This allowed Con Edison, mostly at the Clean Energy Businesses, to receive a $2.5 million net tax refund and to recognize a discrete income tax benefit of $4 million in 2020, due to the higher federal statutory tax rate in 2013. See "Income Tax" in Note J. Con Edison and its subsidiaries did not have a federal NOL in tax years 2019 or 2020.

Con Edison and its subsidiaries benefited by the increase in the percentage for calculating the limitation on the interest expense deduction from 30 percent of Adjusted Taxable Income (ATI) to 50 percent of ATI in 2019 and 2020, which allowed the Companies to deduct 100 percent of their interest expense. For 2021, the limitation on interest expense for computing ATI has reverted back to 30 percent.

The Companies qualify for an employee retention tax credit created under the CARES Act for "eligible employers" related to governmental authorities imposing restrictions that partially suspended their operations for a portion of their workforce due to the COVID-19 pandemic and the Companies continued to pay them. For the year ended December 31, 2020, Con Edison and CECONY recognized a tax benefit to Taxes, other than income taxes of $10 million and $7 million, respectively.

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

In December 2020, the Consolidated Appropriations Act, 2021 (the 2021 Appropriations Act) was signed into law. The 2021 Appropriations Act, among other things, extends the expiring employee retention tax credit to include qualified wages paid in the first two quarters of 2021, increases the qualified wages paid to an employee from 50 percent up to $10,000 annually in 2020 to 70 percent up to $10,000 per quarter in 2021 and increases the maximum employee retention tax credit amount an employer can take per employee from $5,000 in 2020 to $14,000 in the first two quarters of 2021. In March 2021, the American Rescue Plan Act was signed into law that expanded the
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2021 Appropriations Act to extend the period for eligible employers to receive the employer retention credit from June 30, 2021 to December 31, 2021.

Supply Chain Matters
The Utilities have been impacted, and may continue to be impacted, by global and U.S. supply chain disruptions causing shortages of, and increased pricing pressure on, among other things, certain raw materials, labor, microprocessors and microchips. The Utilities have used mitigation strategies in an effort to minimize these supply chain issues, such as increasing inventory and storage of specified materials, identifying alternate distributors and maintaining regular communications with key suppliers. These supply chain disruptions have not had a material impact on the Utilities’ net income, cash flows and financial condition, but have resulted in increased prices and lead times for certain orders of materials and equipment needed by the Utilities in their operations.
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 New York enacted a law prohibiting New York 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 will apply for an additional 180 days after the state of emergency ends (December 21, 2021) for residential and small business customers who have experienced a change in financial circumstances due to the COVID-19 pandemic. CECONY and O&R have existing allowances for uncollectible accounts established against their customer accounts receivable balances that are reevaluated each quarter and updated accordingly. Changes to the Utilities’ reserve balances that result in write-offs of customer accounts receivable balances are not reflected in rates during the term of the current rate plans. During the third quarter of 2021, the potential economic impact of the COVID-19 pandemic was also considered in forward-looking projections related to write-off and recovery rates, resulting in increases to the customer allowance for uncollectible accounts as detailed herein. CECONY’s and O&R’s allowances for uncollectible customer accounts reserve increased from $138 million and $8.7 million at December 31, 2020 to $300 million and $12.6 million at September 30, 2021, respectively. See "COVID-19 Regulatory Matters" in Note B and Note L to the Third Quarter Financial Statements.

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, 2021.

New York State Legislation
In April 2021, New York State passed a law that increases the corporate franchise tax rate on business income from 6.5% to 7.25%, retroactive to January 1, 2021, for taxpayers with taxable income greater than $5 million. The law also reinstates the business capital tax at 0.1875%, not to exceed a maximum tax liability of $5 million per taxpayer. New York State requires a corporate franchise taxpayer to calculate and pay the highest amount of tax under the three alternative methods: a tax on business income; a tax on business capital; or a fixed dollar minimum. The provisions to increase the corporate franchise tax rate and reinstate a capital tax are scheduled to expire after 2023 and are not expected to have a material impact on the Companies’ financial position, results of operations or liquidity. In addition, the new law created a program that allows eligible residential renters in New York State who require assistance with rent and utility bills to have up to twelve months of electric and gas utility bill arrears forgiven, provided that such arrears were accrued on or after March 13, 2020. The program will be administered by the State Office of Temporary Disability Assistance in coordination with the New York State Department of Public Service and the NYSPSC. Under the program, CECONY and O&R would qualify for a refundable tax credit for New York State gross-receipts tax equal to the amount of arrears waived by the Utilities in the year that the arrears are waived and certified by the NYSPSC. 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. See Notes C and D to the Third Quarter Financial Statements. However, a continued economic downturn as a result of the COVID-19 pandemic has increased the amount of capital needed by the Utilities and could impact the costs of such capital.


59

The decline in business activity in the Utilities’ service territory as a result of the COVID-19 pandemic and subsequent New York State on PAUSE and related executive orders (that have since been lifted), resulted in a slower recovery in cash of outstanding customer accounts receivable balances in 2020 and for the nine months ended September 30, 2021. These trends will likely continue through the remainder of 2021.

The Utilities’ rate plans have revenue decoupling mechanisms in their New York electric and gas businesses that largely reconcile actual energy delivery revenues to the authorized delivery revenues approved by the NYSPSC per month and accumulate the deferred balances semi-annually under CECONY's electric rate plan (January through June and July through December, respectively) and annually under CECONY's gas rate plan and O&R New York's electric and gas rate plans (January through December). Differences are accrued with interest each month for CECONY's and O&R New York’s electric customers and after the annual deferral period ends for CECONY's and O&R New York’s gas customers for refund to, or recovery from customers, as applicable. Generally, the refund to or recovery from customers begins August and February of each year over an ensuing six-month period for CECONY's electric customers and February of each year over an ensuing twelve-month period for CECONY's gas and O&R New York's electric and gas customers. Although these revenue decoupling mechanisms are in place, lower billed sales revenues and higher uncollectible accounts have reduced and are expected to continue to reduce liquidity at the Utilities. Also, in March 2020, the Utilities began suspending service disconnections, certain collection notices, final bill collection agency activity, new late payment charges and certain other fees for all customers and such suspensions may continue through 2021.

For the nine months ended September 30, 2021, the estimated late payment charges and fees that were not billed by CECONY and O&R were approximately $46 million and $3 million lower than the amounts that were approved to be collected pursuant to their rate plans, respectively. These unbilled amounts have reduced and may continue to reduce liquidity at the Utilities. See "COVID-19 Regulatory Matters" in Note B and Note K to the Third Quarter Financial Statements.

Con Edison and the Utilities have a $2,250 million credit agreement (Credit Agreement) in place under which banks are committed to provide loans on a revolving credit basis until December 2023 ($2,200 million of commitments from December 2022). Con Edison and the Utilities have not entered into any loans under the Credit Agreement. See Note D to the Third Quarter Financial Statements.

Results of Operations
Net income for common stock and earnings per share for the three and nine months ended September 30, 20172021 and 20162020 were as follows:

  For the Three Months Ended September 30,For the Nine Months Ended September 30,
20212020202120202021202020212020
(Millions of Dollars, except per share amounts)Net Income for Common StockEarnings
per Share		Net Income for Common StockEarnings
per Share
CECONY$418$405$1.19$1.21$1,011$963$2.92$2.88
O&R26270.070.0853570.150.17
Clean Energy Businesses (a)106560.300.1722380.640.03
Con Edison Transmission (b)
115—0.04(142)42(0.40)0.13
Other (c)
(13)(10)(0.04)(0.03)(23)(12)(0.08)(0.04)
Con Edison (d)
$538$493$1.52$1.47$1,122$1,058$3.23$3.17
  For the Three Months Ended September 30,For the Nine Months Ended September 30,
 201720162017
2016
201720162017
2016
(Millions of Dollars, except per share amounts)Net IncomeEarnings
per Share		Net IncomeEarnings
per Share
CECONY$401$388
$1.30

$1.27
$883$859
$2.88

$2.87
O&R22270.07
0.09
53550.18
0.18
Clean Energy Businesses (a)26780.08
0.26
541200.18
0.40
Con Edison Transmission9100.03
0.03
25110.08
0.04
Other (b)(1)(6)—
(0.02)5(6)0.01
(0.02)
Con Edison (c)$457$497
$1.48

$1.63
$1,020$1,039
$3.33

$3.47
(a)Includes $4 million or $0.01 a share and $(15) million or $(0.05) a share of net after-tax mark-to-market gains/(losses) for the three months ended September 30, 2017 and 2016, respectively, and $1 million or $0.01 a share and $5 million or $0.02 a share of net after-tax mark-to-market gains/(losses) for the nine months ended September 30, 2017 and 2016, respectively. Also includes a $1 million or $0.00 a share net after-tax gain on the sale of a solar electric production project for the nine months ended September 30, 2017 (see Note O to the Third Quarter Financial Statements) and a $47 million or $0.15 a share of net gain related to the sale of the retail electric supply business, $5 million or $0.02 a share of net gain related to the acquisition of a solar electric production investment for the three and nine months ended September 30, 2016 and a $5 million or $0.02 a share of net loss related to the impairment of a solar electric production investment for the nine months ended September 30, 2016.


41

(b)Other includes parent company and consolidation adjustments.
(c)Earnings per share on a diluted basis were $1.48 a share and $1.62 a share for the three months ended September 30, 2017 and 2016, respectively, and $3.31 a share and $3.46 a share for the nine months ended September 30, 2017 and 2016, respectively.

The Companies’ results of operations(a)Net income for common stock from the Clean Energy Businesses for the three and nine months ended September 30, 2017, as compared with2021 includes $(9) million or $(0.03) a share and $20 million or $0.06 a share, respectively, of net after-tax mark-to-market income/(loss) and reflects $52 million or $0.15 a share (after-tax) and $87 million or $0.25 a share (after-tax), respectively, of income attributable to the 2016 periods, reflect changesnon-controlling interest of a tax equity investor in rate plans and regulatory charges andrenewable electric production projects accounted for under the impactHLBV method of weather on steam revenues. The newaccounting. Net income for common stock from the Clean Energy Businesses for the nine months ended September 30, 2021 includes $(3) million or $(0.01) a share (after-tax) for the loss from the sale of a renewable electric rate plan of CECONY includes changes inproduction project. Net income for common stock from the timing of recognition of annual revenues between quarters. Operations and maintenance expenses for CECONYClean Energy Businesses for the three and nine months ended September 30, 2017 primarily reflect lower costs for pensions and other postretirement benefits. In addition, the Utilities' rate plans provide for revenues to cover expected changes in certain operating costs including depreciation, property taxes and other tax matters.

The following table presents the estimated effect on earnings per2020 includes $5 million or $0.01 a share and $(60) million or $(0.18) a share, respectively, of net after-tax mark-to-market income/(loss) and reflects $7 million or $0.02 a share (after-tax) and $29 million or $0.08 a share (after-tax), respectively, of income attributable to the non-controlling interest of a tax equity investor in renewable electric production projects accounted for under the HLBV method of accounting. See Note P to the Third Quarter Financial Statements.
(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 Note A to the Third Quarter Financial Statements.
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(c)Other includes parent company and consolidation adjustments. Net income for common stock for the three and nine months ended September 30, 2017 period2021 includes $(4) million (after-tax) or $(0.01) a share (after-tax) and $(7) million (after-tax) or $(0.02) a share (after-tax), respectively, of loss attributable to the non-controlling interest of a tax equity investor in renewable electric production projects accounted for under the HLBV method of accounting. Net income for common stock for the nine months ended September 30, 2021 includes $6 million or $0.01 a share of income tax impact for the impairment loss related to Con Edison Transmission’s investment in Stagecoach and $(2) million or $(0.01) a share of net after-tax mark-to-market loss. See Note A to the Third Quarter Financial Statements. Net income for common stock for the three and nine months ended September 30, 2020 includes $1 million (after-tax) and $2 million or $0.01 a share (after-tax), respectively, of income attributable to the non-controlling interest of a tax equity investor in renewable electric production projects accounted for under the HLBV method of accounting. Net income for common stock from the Clean Energy Businesses for the nine months ended September 30, 2020 includes $5 million or $0.01 a share of net after-tax mark-to-market income.
(d)Earnings per share on a diluted basis were $1.52 a share and $1.47 a share for the three months ended September 30, 2021 and 2020, respectively, and $3.23 a share and $3.16 a share for the nine months ended September 30, 2021 and 2020, respectively.


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, 2021 as compared with 2016 period, resulting from these and other major factors:the 2020 period.




61
 Three Months VariationNine Months Variation
(Millions of Dollars, except per share amounts)Earnings
per Share
Variation		Net Income 
Variation		Earnings
per Share
Variation		Net Income 
Variation
CECONY (a)    
Changes in rate plans and regulatory charges (b)$0.12$35$0.29$87
Weather impact on steam revenues—
(1)0.014
Other operations and maintenance expenses (c)0.07220.2473
Depreciation, property taxes and other tax matters (d)(0.10)(30)(0.36)(108)
Other (e)(0.06)(13)(0.17)(32)
Total CECONY0.03130.0124
O&R (a)



Changes in rate plans and regulatory charges—
10.0412
Other operations and maintenance expenses (f)(0.01)(2)(0.03)(9)
Depreciation and property taxes(0.01)(4)(0.02)(6)
Other (e)—
—
0.011
Total O&R(0.02)(5)—
(2)
Clean Energy Businesses



Operating revenues less energy costs (g)0.10320.1031
Other operations and maintenance expenses (h)(0.08)(23)(0.10)(30)
Depreciation(0.02)(5)(0.05)(15)
Net interest expense(0.01)(3)(0.02)(6)
Other (e) (i)(0.17)(53)(0.15)(46)
Total Clean Energy Businesses(0.18)(52)(0.22)(66)
Con Edison Transmission (e) (j)—
(1)0.0414
Other, including parent company expenses (e) (k)0.0250.0311
Total variations$(0.15)$(40)$(0.14)$(19)
(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. 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 the Companies' results of operations.
(b)For the three and nine months ended September 30, 2017 as compared to the 2016 periods, reflects lower electric net base revenues of $(0.03) a share, resulting from the timing of recognition of annual revenues between quarters under CECONY's new electric rate plan. Also, for the three and nine months ended September 30, 2017 as compared with the 2016 periods, reflects higher electric net base revenues ($0.07 a share and $0.08 a share, respectively), resulting from the increased base rates under CECONY's new electric rate plan, higher gas net base revenues ($0.01 a share and $0.16 a share, respectively), incentives earned under the electric Earnings Adjustment Mechanisms of $0.02 a share, a property tax refund incentive of $0.01 a share and an increase to the regulatory reserve related to certain gas proceedings in 2016 ($0.02 a share and $0.03 a share, respectively). For the nine months ended September 30, 2017 as compared with the 2016 period, reflects growth in the number of gas customers of $0.03 a share.
(c)Reflects lower pension and other postretirement benefits costs of $0.07 a share and $0.22 a share for the three and nine months ended September 30, 2017 as compared with the 2016 periods.
(d)Reflects higher depreciation and amortization expense of $(0.04) a share and $(0.13) a share, property taxes of $(0.04) a share and $(0.13) a share, and income taxes of $(0.02) a share and $(0.10) a share for the three and nine months ended September 30, 2017 as compared with the 2016 periods.
(e)Includes the impact of the dilutive effect of Con Edison's stock issuances.
(f)Reflects higher pension costs of $(0.01) a share and $(0.02) a share for the three and nine months ended September 30, 2017 as compared with the 2016 periods. Also, for the nine months ended September 30, 2017 as compared with the 2016 period, reflects higher regulatory assessments and fees that are collected in revenues from customers and a higher reserve for injuries and damages of $(0.01) a share.


42

42



Table of Contents

Variation for the Three Months Ended September 30, 2021 vs. 2020
Net Income for Common Stock (Millions of Dollars)Earnings per Share
CECONY (a)
Higher electric rate base$21$0.06
Lower healthcare costs50.02
Lower stock based compensation costs50.01
Uncollected late payment charges and certain other fees associated with COVID-1940.01
Higher uncollectibles written off and increase to reserve for uncollectibles, net of deferrals (that began in the third quarter of 2020) for uncollectibles associated with the Coronavirus Disease (COVID-19) pandemic(18)(0.05)
Higher storm-related costs(3)(0.01)
Dilutive effect of stock issuances—(0.07)
Other(1)0.01
Total CECONY13(0.02)
O&R (a)
Higher storm-related costs(4)(0.01)
Other3—
Total O&R(1)(0.01)
Clean Energy Businesses
HLBV effects590.17
Net mark-to-market effects(14)(0.04)
Dilutive effect of stock issuances—(0.02)
Other50.02
Total Clean Energy Businesses500.13
Con Edison Transmission
Foregoing Allowance for Funds Used During Construction income starting in January 2021 until significant construction resumes on the Mountain Valley Pipeline(11)(0.03)
Other(3)(0.01)
Total Con Edison Transmission(14)(0.04)
Other, including parent company expenses
HLBV effects(4)(0.01)
Other1—
Total Other, including parent company expenses(3)(0.01)
Total Reported (GAAP basis)$45$0.05
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. 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.
(g)Reflects higher revenues from renewable electric production projects and lower revenues and energy costs resulting from the retail electric supply business which was sold in September 2016. Includes $0.01 a share and $(0.05) a share of net after-tax mark-to-market gains/(losses) for the three months ended September 30, 2017 and 2016, respectively, and $0.01 a share and $0.02 a share of net after-tax mark-to-market gains for the nine months ended September 30, 2017 and 2016, respectively. Substantially all the mark-to-market effects in the 2016 periods were related to the retail electric supply business sold in September 2016.
(h)Reflects Upton 2 engineering, procurement and construction costs ($(0.05) a share and $(0.06) a share, respectively) as well as increased energy service costs ($(0.02) a share and $(0.04) a share, respectively) for the three and nine months ended September 30, 2017 as compared with the 2016 periods.
(i)Includes $0.02 a share of net after-tax gain related to the acquisition of a solar electric production investment for the three and nine months ended September 30, 2016, net of $(0.02) a share of impairment loss related to the solar electric production investment for the nine months ended September 30, 2016. Includes $0.15 a share of net after-tax gain related to the sale of the retail electric supply business for the three and nine months ended September 30, 2016.
(j)Reflects income from equity investments.
(k)Reflects higher state income tax benefits.



62


Variation for the Nine Months Ended September 30, 2021 vs. 2020
Net Income for Common Stock (Millions of Dollars)Earnings per Share
CECONY (a)
Higher electric rate base$34$0.10
Higher gas rate base240.07
Weather impact on steam revenues150.05
Lower incremental costs associated with the COVID-19 pandemic80.02
Lower stock based compensation costs30.01
Estimated food and medicine spoilage claims related to outages caused by Tropical Storm Isaias in 202040.01
Higher costs related to heat and storm-related events(29)(0.09)
Uncollected late payment charges and certain other fees associated with the COVID-19 pandemic(7)(0.02)
Higher uncollectibles written off and increase to reserve for uncollectibles, net of deferrals (that began in the third quarter of 2020) for uncollectibles associated with the COVID-19 pandemic(2)(0.01)
Dilutive effect of stock issuances—(0.11)
Other(2)0.01
Total CECONY480.04
O&R (a)
Higher storm-related costs(8)(0.02)
Other4—
Total O&R(4)(0.02)
Clean Energy Businesses
Higher revenues1550.47
HLBV effects1160.33
Net mark-to-market effects800.24
Gain on sale of a renewable electric project40.01
Higher operations and maintenance expenses(134)(0.40)
Loss from sale of a renewable electric production project(3)(0.01)
Dilutive effect of stock issuances—(0.02)
Other(3)(0.01)
Total Clean Energy Businesses2150.61
Con Edison Transmission
Impairment losses on Stagecoach(153)(0.44)
Foregoing Allowance for Funds Used During Construction income starting in January 2021 until significant construction resumes on the Mountain Valley Pipeline(33)(0.10)
Other2—
Total Con Edison Transmission(184)(0.54)
Other, including parent company expenses
HLBV effects(7)(0.02)
Net mark-to-market effects(2)(0.01)
Impairment tax benefits on Stagecoach60.01
Other(8)(0.01)
Total Other, including parent company expenses(11)(0.03)
Total Reported (GAAP basis)$64$0.06
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. 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.

63

The Companies’ other operations and maintenance expenses for the three and nine months ended September 30, 20172021 and 20162020 were as follows:

For the Three Months Ended September 30,For the Nine Months Ended September 30,
(Millions of Dollars)2021202020212020
CECONY
Operations$445$423$1,283$1,210
Pensions and other postretirement benefits(6)(20)(23)(83)
Health care and other benefits4249134115
Regulatory fees and assessments (a)9994252253
Other7051202219
Total CECONY6505971,8481,714
O&R8379240232
Clean Energy Businesses11459348165
Con Edison Transmission3298
Other (b)(1)(1)(2)(3)
Total other operations and maintenance expenses$849$736$2,443$2,116
(a)Includes Demand Side Management, System Benefit Charges and Public Service Law 18A assessments which are collected in revenues.
 For the Three Months Ended September 30,For the Nine Months Ended September 30,
(Millions of Dollars)2017201620172016
CECONY    
Operations$386$381$1,147$1,109
Pensions and other postretirement benefits5187152261
Health care and other benefits4547127124
Regulatory fees and assessments (a)142135355361
Other6774211250
Total CECONY6917241,9922,105
O&R8077236220
Clean Energy Businesses7940174124
Con Edison Transmission3171
Other (b)(1)(2)(3)(3)
Total other operations and maintenance expenses$852$840$2,406$2,447
(b)Includes parent company and consolidation adjustments.
(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, 20172021 and 20162020 follows. For additional business segment financial information, see Note JM to the Third Quarter Financial Statements.






4364


Three Months Ended September 30, 2017 Compared with Three Months Ended September 30, 2016
The Companies’ results of operations in 2017 compared with 2016 were:for the three months ended September 30, 2021 and 2020 were as follows:

  CECONYO&RClean Energy BusinessesCon Edison
Transmission		Other (a)Con Edison (b)
(Millions of Dollars)202120202021202020212020202120202021202020212020
Operating revenues$3,092$2,872$257$238$264$222$1$1$(1)$—$3,613$3,333
Purchased power4814476856— — — — (1)—548503
Fuel4424— — — — — — — — 4424
Gas purchased for resale613813998— — — — 8355
Other operations and maintenance65059783791145932(1)(1)849736
Depreciation and amortization42940124235858— — 1 — 512482
Taxes, other than income taxes699643222245—1 22727673
Operating income72872247497992(2)(2)(2)(1)850860
Other income (deductions)(23)(38)(4)(4)—3527—(1)(22)(13)
Net interest expense197182101018221468232226
Income before income tax expense50850233356173221(8)(10)596621
Income tax expense909778248165 —127119
Net income$418$405$26$27$37$65$1$15$(13)$(10)$469$502
Income (loss) attributable to non-controlling interest
— —— —(69)9— —— —(69)9
Net income for common stock$418$405$26$27$106$56$1$15$(13)$(10)$538$493
(a)Includes parent company and consolidation adjustments.
(b)Represents the consolidated results of operations of Con Edison and its businesses.


65
  CECONYO&RClean Energy Businesses
Con Edison
Transmission
Other (a)Con Edison (b)
(Millions of Dollars)
Increases
(Decreases)
Amount
Increases
(Decreases)
Percent
Increases
(Decreases)
Amount
Increases
(Decreases)
Percent
Increases
(Decreases)
Amount
Increases
(Decreases)
Percent
Increases
(Decreases)
Amount		Increases
(Decreases)
Percent		Increases
(Decreases)
Amount		Increases
(Decreases)
Percent
Increases
(Decreases)
Amount
Increases
(Decreases)
Percent
Operating revenues$(29)(1.0)%$(6)(2.5)%$(173)(49.4)%$1—%$1Large
$(206)(6.0)%
Purchased power(95)(19.2)(9)(13.0)(234)Large
—
—
—
—
(338)(42.4)
Fuel13.4
—
—
—
—
—
—
—
—
13.4
Gas purchased for resale2470.6
225.0
820.5
—
—
—
—
3442.0
Other operations and maintenance(33)(4.6)33.9
3997.5
2Large
1(50.0)121.4
Depreciation and amortization227.9
15.9
872.7
—
—
1Large
3210.5
Taxes, other than income taxes183.6
—
—
(2)(40.0)—
—
—
—
163.0
Gain on sale of retail electric supply business (2016)—
—
—
—
(104)Large
—
—
—
—
(104)Large
Operating income344.4
(3)(6.3)(96)(76.8)(1)Large
(1)(50.0)(67)(7.1)
Other income less deductions(2)Large
(1)Large
(9)(33.3)15.0
1Large
(10)(20.4)
Net interest expense31.9
—
—
571.4
133.3
(2)(40.0)73.9
Income before income tax expense294.7
(4)(10.0)(110)(75.9)(1)(6.3)250.0
(84)(10.4)
Income tax expense167.1
17.7
(58)(86.6)—
—
(3)Large
(44)(14.0)
Net income$133.4%$(5)(18.5)%$(52)(66.7)%$(1)(10.0)%$583.3 %$(40)(8.0)%
(a)Includes parent company and consolidation adjustments.
(b)Represents the consolidated results of operations of Con Edison and its businesses.



44

44





CECONY

  
For the Three Months Ended
September 30, 2021
  
For the Three Months Ended
September 30, 2020
  
  
(Millions of Dollars)ElectricGasSteam2021 TotalElectricGasSteam2020 Total2021-2020 Variation
Operating revenues$2,730$307$55$3,092$2,562$259$51$2,872$220
Purchased power473— 8481443— 444734
Fuel39— 54418— 62420
Gas purchased for resale— 61— 61— 38— 3823
Other operations and maintenance5169242650469874159753
Depreciation and amortization3248223429305742240128
Taxes, other than income taxes54412035699514943564356
Operating income$834$(48)$(58)$728$813$(34)$(57)$722$6
  
For the Three Months Ended
September 30, 2017
  
For the Three Months Ended
September 30, 2016
  
  
(Millions of Dollars)Electric
Gas
Steam
2017 TotalElectric
Gas
Steam
2016 Total2017-2016
Variation
Operating revenues$2,469$268$62$2,799$2,557$208$63$2,828$(29)
Purchased power393—
7400486—
9495(95)
Fuel24—
63021—
8291
Gas purchased for resale—
58—
58—
34—
3424
Other operations and maintenance5471044069157810244724(33)
Depreciation and amortization2324721300217412027822
Taxes, other than income taxes4187131520414592950218
Operating income$855$(12)$(43)$800$841$(28)$(47)$766$34


Electric
CECONY’s results of electric operations for the three months ended September 30, 20172021 compared with the 20162020 period iswere as follows:
 
  
For the Three Months Ended
  
(Millions of Dollars)September 30, 2021September 30, 2020Variation
Operating revenues$2,730$2,562$168
Purchased power47344330
Fuel391821
Other operations and maintenance51646947
Depreciation and amortization32430519
Taxes, other than income taxes54451430
Electric operating income$834$813$21
  
For the Three Months Ended
  
(Millions of Dollars)September 30, 2017September 30, 2016Variation
Operating revenues$2,469$2,557$(88)
Purchased power393486(93)
Fuel24213
Other operations and maintenance547578(31)
Depreciation and amortization23221715
Taxes, other than income taxes4184144
Electric operating income$855$841$14


CECONY’s electric sales and deliveries for the three months ended September 30, 20172021 compared with the 20162020 period were:

  
Millions of kWh DeliveredRevenues in Millions (a)
  
For the Three Months Ended
  
For the Three Months Ended
  
DescriptionSeptember 30, 2021September 30, 2020VariationPercent
Variation		September 30, 2021September 30, 2020VariationPercent
Variation
Residential/Religious (b)3,9054,001(96)(2.4 %)$1,025$995$303.0 %
Commercial/Industrial2,6452,627180.7 6525569617.3 
Retail choice customers6,2746,294(20)(0.3)861784779.8 
NYPA, Municipal Agency and other sales2,4662,532(66)(2.6)228217115.1 
Other operating revenues (c)— — — —(36)10(46)Large
Total15,29015,454(164)(1.1)%(d)$2,730$2,562$1686.6 %
(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 the company’s rate plans.
(d)After adjusting for variations, primarily weather and billing days, electric delivery volumes in CECONY’s service area increased 2.3 percent in the three months ended September 30, 2021 compared with the 2020 period. See “Coronavirus Disease 2019 (COVID-19) Impacts,” above.

Operating revenues increased $168 million in the three months ended September 30, 2021 compared with the 2020 period primarily due to an increase in revenues from the electric rate plan ($95 million), higher purchased power expenses ($30 million) and higher fuel expenses ($21 million).

  
Millions of kWh Delivered Revenues in Millions (a)
  
For the Three Months Ended
  
 For the Three Months Ended
  
DescriptionSeptember 30, 2017
September 30, 2016
Variation
Percent
Variation

 September 30, 2017September 30, 2016Variation
Percent
Variation

Residential/Religious (b)3,237
3,653
(416)(11.4)% $805$883$(78)(8.8)%
Commercial/Industrial2,570
2,749
(179)(6.5) 534551(17)(3.1)
Retail choice customers7,510
8,136
(626)(7.7) 867918(51)(5.6)
NYPA, Municipal Agency and other sales2,705
2,764
(59)(2.1) 20720431.5
Other operating revenues (c)—
—
—
—
 56155Large
Total16,022
17,302
(1,280)(7.4)%(d)$2,469$2,557$(88)(3.4)%
66
(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 regulatory assets and liabilities in accordance with the revenue decoupling mechanism and 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 decreased 1.4 percent in the three months ended September 30, 2017 compared with the 2016 period.



45
Table of Contents

Operating revenues decreased $88Purchased power expenses increased $30 million in the three months ended September 30, 20172021 compared with the 20162020 period due primarily to lowerhigher unit costs ($16 million) and purchased powervolumes ($15 million).

Fuel expenses ($93 million), offset by higher revenues from the electric rate plan ($27 million).

Purchased power expenses decreased $93increased $21 million in the three months ended September 30, 20172021 compared with the 20162020 period due to lowerhigher unit costs ($16 million) and purchased volumes from the company's electric generating facilities ($665 million).

Other operations and unit costs ($27 million).

Fuelmaintenance expenses increased $3$47 million in the three months ended September 30, 20172021 compared with the 20162020 period primarily due to higher unit coststhe timing of the recognition of uncollectible expense compared to the rate plan level ($621 million), offset by lower purchased volumes from the company's electric generating facilities ($3 million).

Other operations and maintenance expenses decreased $31 million in the three months ended September 30, 2017 compared with the 2016 period due primarily to lower pensionhigher costs for pensions and other postretirement benefits ($3811 million), higher storm-related costs ($5 million) and environmental costs ($6 million), offset by higher surcharges for assessments and fees that are collected in revenues from customers ($6 million) and uncollectible expense ($5 million).


Depreciation and amortizationincreased $15$19 million in the three months ended September 30, 20172021 compared with the 20162020 period primarily due primarily to higher electric utility plant balances.


Taxes, other than income taxes increased $4$30 million in the three months ended September 30, 20172021 compared with the 20162020 period primarily due primarily to higher property taxes ($1118 million), offset by lowerhigher state and local taxes ($56 million) and lower deferral of under-collected property taxes ($6 million).


Gas
CECONY’s results of gas operations for the three months ended September 30, 20172021 compared with the 20162020 period iswere as follows:

  
For the Three Months Ended
  
(Millions of Dollars)September 30, 2021September 30, 2020Variation
Operating revenues$307$259$48
Gas purchased for resale613823
Other operations and maintenance92875
Depreciation and amortization82748
Taxes, other than income taxes1209426
Gas operating income$(48)$(34)$(14)
  
For the Three Months Ended
  
(Millions of Dollars)September 30, 2017September 30, 2016Variation
Operating revenues$268$208$60
Gas purchased for resale583424
Other operations and maintenance1041022
Depreciation and amortization47416
Taxes, other than income taxes715912
Gas operating income$(12)$(28)$16


CECONY’s gas sales and deliveries, excluding off-system sales, for the three months ended September 30, 20172021 compared with the 20162020 period were:

  
Thousands of Dt DeliveredRevenues in Millions (a)
  
For the Three Months Ended
  
For the Three Months Ended
  
DescriptionSeptember 30, 2021September 30, 2020VariationPercent
Variation		September 30, 2021September 30, 2020VariationPercent
Variation
Residential4,158 4,314 (156)(3.6 %)$128$117$119.4 %
General4,133 3,504 629 18.0 59352468.6 
Firm transportation8,943 8,668 275 3.2 80701014.3 
Total firm sales and transportation17,234 16,486 748 4.5 (b)26722245 20.3 
Interruptible sales (c)1,198 1,882 (684)(36.3)64250.0 
NYPA15,187 13,701 1,486 10.8 11— —
Generation plants14,955 19,658 (4,703)(23.9)77— —
Other4,193 4,457 (264)(5.9)66— —
Other operating revenues (d)— — — —201915.3 
Total52,767 56,184 (3,417)(6.1 %)$307$259$4818.5 %
(a)Revenues from gas sales are subject to a weather normalization clause and a revenue decoupling mechanism, as a result of which delivery revenues are generally not affected by changes in delivery volumes from levels assumed when rates were approved.
(b)After adjusting for variations, primarily billing days, firm gas sales and transportation volumes in the company’s service area decreased 3.1 percent in the three months ended September 30, 2021 compared with the 2020 period. See “Coronavirus Disease 2019 (COVID-19) Impacts,” above.
(c)Includes 572 thousand and 676 thousand of Dt for the 2021 and 2020 periods, respectively, which are also reflected in firm transportation and other.

  
Thousands of Dt Delivered Revenues in Millions (a)
  
For the Three Months Ended
  
 For the Three Months Ended
  
DescriptionSeptember 30, 2017
September 30, 2016
Variation
Percent
Variation

 September 30, 2017September 30, 2016Variation
Percent
Variation

Residential4,731
4,335
396
9.1% $104$88$1618.2%
General4,292
3,963
329
8.3
 4941819.5
Firm transportation8,766
8,305
461
5.6
 67531426.4
Total firm sales and transportation17,789
16,603
1,186
7.1
(b)2201823820.9
Interruptible sales (c)2,108
1,664
444
26.7
 844Large
NYPA10,148
12,800
(2,652)(20.7) 11—
—
Generation plants24,068
35,745
(11,677)(32.7) 77—
—
Other4,487
4,975
(488)(9.8) 66—
—
Other operating revenues (d)—
—
—
—
 26818Large
Total58,600
71,787
(13,187)(18.4)% $268$208$6028.8%
67
(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.


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Table
(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 Contents
the company’s rate plans.

(b)After adjusting for variations, primarily billing days, firm gas sales and transportation volumes in the company’s service area increased 6.0 percent in the three months ended September 30, 2017 compared with the 2016 period, reflecting primarily increased volumes attributable to the growth in the number of gas customers.
(c)Includes 1,535 thousands and 915 thousands of Dt for the 2017 and 2016 periods, respectively, which are also reflected in firm transportation and other.
(d)Other gas operating revenues generally reflect changes in regulatory assets and liabilities in accordance with the company’s rate plans.


Operating revenues increased $60$48 million in the three months ended September 30, 20172021 compared with the 20162020 period primarily due primarily to higheran increase in revenues from the gas rate plan and growth in the number of customers ($2924 million) and higher gas purchased for resale expense ($2423 million).


Gas purchased for resale increased $24$23 million in the three months ended September 30, 20172021 compared with the 20162020 period due to higher unit costs ($20 million) and purchased volumes ($4 million).

Other operations and maintenance expenses increased $2 million in the three months ended September 30, 2017 compared with the 2016 period due primarily to higher surcharges for assessments and fees that were collected in revenues from customers.

Depreciation and amortization increased $6 million in the three months ended September 30, 2017 compared with the 2016 period due primarily to higher gas utility plant balances.

Taxes, other than income taxes increased $12 million in the three months ended September 30, 2017 compared with the 2016 period due primarily to higher property taxes ($6 million), state and local taxes ($4 million) and payroll taxes ($1 million).

Steam
CECONY’s results of steam operations for the three months ended September 30, 2017 compared with the 2016 period is as follows:

  
For the Three Months Ended
  
(Millions of Dollars)September 30, 2017September 30, 2016Variation
Operating revenues$62$63$(1)
Purchased power79(2)
Fuel68(2)
Other operations and maintenance4044(4)
Depreciation and amortization21201
Taxes, other than income taxes31292
Steam operating income$(43)$(47)$4

CECONY’s steam sales and deliveries for the three months ended September 30, 2017 compared with the 2016 period were:

  
Millions of Pounds Delivered Revenues in Millions
  
For the Three Months Ended
  
 For the Three Months Ended
  
DescriptionSeptember 30, 2017
September 30, 2016
Variation
Percent
Variation

 September 30, 2017September 30, 2016Variation
Percent
Variation

General13
10
3
30.0% $2$2
$—
—%
Apartment house748
776
(28)(3.6) 1515—
—
Annual power2,439
2,950
(511)(17.3) 4249(7)(14.3)
Other operating revenues (a)—
—
—
—
 3(3)6Large
Total3,200
3,736
(536)(14.3)%(b)$62$63$(1)(1.6)%
(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 decreased 8.6 percent in the three months ended September 30, 2017 compared with the 2016 period.



47

Operating revenues decreased $1 million in the three months ended September 30, 2017 compared with the 2016 period due primarily to lower purchased power expenses ($2 million) and lower fuel expenses ($2 million), offset in part by a property tax refund incentive ($3 million).

Purchased power expenses decreased $2 million in the three months ended September 30, 2017 compared with the 2016 period due to lower unit costs ($1 million) and purchased volumes ($1 million).

Fuel expenses decreased $2 million in the three months ended September 30, 2017 compared with the 2016 period due to lower unit costs ($1 million) and purchased volumes from the company's steam generating facilities ($1 million).

Other operations and maintenance expenses decreased $4 million in the three months ended September 30, 2017 compared with the 2016 period due primarily to lower municipal infrastructure support costs.

Depreciation and amortization increased $1 million in the three months ended September 30, 2017 compared with the 2016 period due primarily to higher steam utility plant balances.

Taxes, other than income taxes increased $2 million in the three months ended September 30, 2017 compared with the 2016 period due primarily to higher property taxes.

Other Income (Deductions)
Other income (deductions) decreased $2 million in the three months ended September 30, 2017 compared with the 2016 period due primarily to a decrease in investment and other income.

Net Interest Expense
Net interest expense increased $3 million in the three months ended September 30, 2017 compared with the 2016 period due primarily to higher long-term debt balances in the 2017 period.

Income Tax Expense
Income taxes increased $16 million in the three months ended September 30, 2017 compared with the 2016 period due primarily to higher income before income tax expense ($11 million), a decrease in tax benefits for plant-related flow through items ($7 million), offset in part by higher research and development tax credits ($2 million).

O&R

  
For the Three Months Ended
September 30, 2017		 For the Three Months Ended
September 30, 2016		 
  
(Millions of Dollars)Electric
Gas
2017 TotalElectric
Gas
2016 Total2017-2016
Variation
Operating revenues$206$28$234$213$27$240$(6)
Purchased power60—
6069—
69(9)
Gas purchased for resale—
1010—
882
Other operations and maintenance6317806314773
Depreciation and amortization13518125171
Taxes, other than income taxes1472114721—
Operating income$56$(11)$45$55$(7)$48$(3)

Electric
O&R’s results of electric operations for the three months ended September 30, 2017 compared with the 2016 period is as follows:



48

48




  
For the Three Months Ended
  
(Millions of Dollars)September 30, 2017September 30, 2016Variation
Operating revenues$206$213$(7)
Purchased power6069(9)
Other operations and maintenance6363—
Depreciation and amortization13121
Taxes, other than income taxes1414—
Electric operating income$56$55
$1

O&R’s electric sales and deliveries for the three months ended September 30, 2017 compared with the 2016 period were:

  
Millions of kWh Delivered Revenues in Millions (a)
  
For the Three Months Ended
  
 For the Three Months Ended
  
DescriptionSeptember 30, 2017
September 30, 2016
Variation
Percent
Variation

 September 30, 2017
September 30, 2016Variation
Percent
Variation

Residential/Religious (b)500
585
(85)(14.5)% $105$109$(4)(3.7)%
Commercial/Industrial206
216
(10)(4.6) 3435(1)(2.9)
Retail choice customers818
925
(107)(11.6) 6470(6)(8.6)
Public authorities31
31
—
—
 32150.0
Other operating revenues (c)—
—
—
—
 —
(3)3Large
Total1,555
1,757
(202)(11.5)%(d)$206$213$(7)(3.3)%
(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. O&R’s electric sales in New Jersey are not subject to a decoupling mechanism, and as a result, changes in such volumes do impact revenues.
(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 decreased 3.4 percent in the three months ended September 30, 2017 compared with the 2016 period.

Operating revenues decreased $7 million in the three months ended September 30, 2017 compared with the 2016 period due primarily to lower purchased power expenses ($9 million), offset by higher revenues from the New York electric rate plan ($3 million).

Purchased power expenses decreased $9 million in the three months ended September 30, 2017 compared with the 2016 period due to lower purchased volumes ($10 million), offset by higher unit costs ($1 million).

Depreciation and amortization expenses increased $1 million in the three months ended September 30, 2017 compared with the 2016 period due primarily to higher electric utility plant balances.

Gas
O&R’s results of gas operations for the three months ended September 30, 2017 compared with the 2016 period is as follows:

  
For the Three Months Ended
  
(Millions of Dollars)September 30, 2017September 30, 2016Variation
Operating revenues$28$27$1
Gas purchased for resale1082
Other operations and maintenance17143
Depreciation and amortization55—
Taxes, other than income taxes77—
Gas operating income$(11)$(7)$(4)



49

O&R’s gas sales and deliveries, excluding off-system sales, for the three months ended September 30, 2017 compared with the 2016 period were:

  
Thousands of Dt Delivered Revenues in Millions (a)
  
For the Three Months Ended
  
 For the Three Months Ended
  
DescriptionSeptember 30, 2017
September 30, 2016
Variation
Percent
Variation

 September 30, 2017
September 30, 2016
Variation
Percent
Variation

Residential579
550
29
5.3% $11$9$222.2%
General198
177
21
11.9
 22—
—
Firm transportation898
884
14
1.6
 88—
—
Total firm sales and transportation1,675
1,611
64
4.0
(b)2119210.5
Interruptible sales819
893
(74)(8.3) 1—
1—
Generation plants5
3
2
66.7
 —
—
—
—
Other74
70
4
5.7
 —
—
—
—
Other gas revenues—
—
—
—
 68(2)(25.0)
Total2,573
2,577
(4)(0.2)% $28$27$13.7%
(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 3.1 percent in the three months ended September 30, 2017 compared with the 2016 period.

Operating revenues increased $1 million in the three months ended September 30, 2017 compared with the 2016 period due primarily to higher gas purchased for resale ($2 million), offset by lower revenues from the New York gas rate plan ($1 million).

Gas purchased for resale increased $2 million in the three months ended September 30, 2017 compared with the 2016 period due to higher purchased volumes ($3 million), offset by lower unit costs ($1 million).

Other operations and maintenance expenses increased $3 million in the three months ended September 30, 2017 compared with the 2016 period due primarily to higher pension costs.

Income Tax Expense
Income taxes increased $1 million in the three months ended September 30, 2017 compared with the 2016 period due primarily to the absence in 2017 of a tax benefit from a corporate-owned life insurance policy in 2016 ($229 million), offset in part by lower income before income tax expensepurchased volumes ($17 million).


Clean Energy Businesses
The Clean Energy Businesses’ results of operations for the three months ended September 30, 2017 compared with the 2016 period is as follows:

  
For the Three Months Ended
  
(Millions of Dollars)September 30, 2017
September 30, 2016Variation
Operating revenues$177$350$(173)
Purchased power—
234(234)
Gas purchased for resale47398
Other operations and maintenance794039
Depreciation and amortization19118
Taxes, other than income taxes35(2)
Gain on sale of retail electric supply business (2016)—
(104)104
Operating income$29$125$(96)


Operating revenues decreased $173 million in the three months ended September 30, 2017 compared with the 2016 period, due primarily to lower electric retail revenues of $256 million from the sale of the retail electric supply business in September 2016. Renewable revenues increased $56 million due primarily to an increase in renewable electric production projects in operation and revenues from the engineering, procurement and construction of Upton


50

50




2 (see Note O to the Third Quarter Financial Statements). Energy services revenues increased $9 million. Wholesale revenues increased $10 million due to higher sales volumes. Net mark-to-market values increased $32 million, due primarily to the sale of the retail electric supply business, of which $24 million in gains are reflected in purchased power costs and $8 million in gains are reflected in revenues.

Purchased power expenses decreased $234 million in the three months ended September 30, 2017 compared with the 2016 period due primarily to lower electric costs due to the sale of the retail electric supply business in September 2016 ($210 million) and changes in mark-to-market values ($24 million).

Gas purchased for resale increased $8 million in the three months ended September 30, 2017 compared with the 2016 period due to higher purchased volumes.

Other operations and maintenance expenses increased $39 million in the three months ended September 30, 2017 compared with the 2016 period due primarily to Upton 2 engineering, procurement and construction costs (see Note O to the Third Quarter Financial Statements) and an increase in energy services costs.

Depreciation and amortization increased $8 million in the three months ended September 30, 2017 compared with the 2016 period due to an increase in solar electric production projects in operation during 2017.

Taxes, other than income taxes decreased $2 million in the three months ended September 30, 2017 compared with the 2016 period primarily due to lower gross receipts tax from the sale of the retail electric supply business.

Gain on sale of retail electric supply business was $104 million in the three months ended September 30, 2016 reflecting the sale of the Clean Energy Businesses' retail electric supply business.

Other Income (Deductions)
Other income (deductions) decreased $9 million in the three months ended September 30, 2017 compared with the 2016 period due primarily to the gain related to the acquisition of a solar electric production investment in 2016.

Net Interest Expense
Net interest expense increased $5 million in the three months ended September 30, 20172021 compared with the 20162020 period due primarily to increased debt on solar electric production projects.

Income Tax Expense
Income taxes decreased $58 million in the three months ended September 30, 2017 compared with the 2016 period due primarily to lower income before income tax expense ($44 million), higher renewable energy tax credits ($1 million) and the increase to deferred state income taxes in 2016 as a result of the sale of the retail electric supply business that increased the Clean Energy Businesses’ state apportionment factor on its cumulative temporary differences ($13 million).

Other
For Con Edison, “Other” includes parent company and consolidation adjustments.




51

Nine Months Ended September 30, 2017 Compared with Nine Months Ended September 30, 2016
The Companies’ results of operations in 2017 compared with 2016 were:

  CECONYO&R
Clean Energy Businesses

Con Edison
Transmission		Other (a)Con Edison (b)
(Millions of Dollars)
Increases
(Decreases)
Amount
Increases
(Decreases)
Percent
Increases
(Decreases)
Amount
Increases
(Decreases)
Percent
Increases
(Decreases)
Amount
Increases
(Decreases)
Percent
Increases
(Decreases)
Amount		Increases
(Decreases)
Percent
Increases
(Decreases)
Amount
Increases
(Decreases)
Percent
Increases
(Decreases)
Amount
Increases
(Decreases)
Percent
Operating revenues$2072.7 %$375.9%$(538)(53.9)%$1—%$(3)Large
$(296)(3.2)%
Purchased power(106)(8.7)(6)(3.9)(679)Large
—
—
(3)Large
(794)(38.8)
Fuel3627.1
—
—
—
—
—
—
—
—
3627.1
Gas purchased for resale15571.4
2062.5
89Large
—
—
—
—
26482.5
Other operations and maintenance(113)(5.4)167.3
5040.3
6Large
—
—
(41)(1.7)
Depreciation and amortization668.0
36.0
2480.0
—
—
—
—
9310.3
Taxes, other than income taxes775.3
23.3
(4)(25.0)—
—
(1)Large
744.9
Gain on sale of retail electric supply business (2016) and solar electric production project (2017)

—
—
—
—
(103)Large
—
—
—
—
(103)Large
Operating income925.1
21.8
(121)(65.8)(5)Large
1Large
(31)(1.5)
Other income less deductions4Large
(1)Large
(2)(5.7)37Large
(1)—
3760.7
Net interest expense122.7
(1)(3.6)1147.8
8Large
(2)(18.2)285.4
Income before income tax expense846.2
22.3
(134)(68.4)24Large
2(20.0)(22)(1.3)
Income tax expense6012.2
412.5
(68)(89.5)10Large
(9)Large
(3)(0.5)
Net income$242.8 %$(2)(3.6)%$(66)(55.0)%$14Large
$11Large
$(19)(1.8)%
(a)Includes parent company and consolidation adjustments.
(b)Represents the consolidated results of operations of Con Edison and its businesses.



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CECONY

  
For the Nine Months Ended
September 30, 2017
  
For the Nine Months Ended
September 30, 2016
  
  
(Millions of Dollars)Electric
Gas
Steam
2017 TotalElectric
Gas
Steam
2016 Total2017-2016
Variation
Operating revenues$6,079$1,421$448$7,948$6,222$1,113$406$7,741$207
Purchased power1,084—
261,1101,191—
251,216(106)
Fuel95—
7416981—
5213336
Gas purchased for resale—
372—
372—
217—
217155
Other operations and maintenance1,5283301341,9921,6593071392,105(113)
Depreciation and amortization690137648916451186282566
Taxes, other than income taxes1,205220981,5231,159198891,44677
Operating income$1,477$362$52$1,891$1,487$273$39$1,799$92

Electric
CECONY’s results of electric operations for the nine months ended September 30, 2017 compared with the 2016 period is as follows:
  
For the Nine Months Ended
  
(Millions of Dollars)September 30, 2017September 30, 2016Variation
Operating revenues$6,079$6,222$(143)
Purchased power1,0841,191(107)
Fuel958114
Other operations and maintenance1,5281,659(131)
Depreciation and amortization69064545
Taxes, other than income taxes1,2051,15946
Electric operating income$1,477$1,487$(10)

CECONY’s electric sales and deliveries for the nine months ended September 30, 2017 compared with the 2016 period were:

  
Millions of kWh Delivered Revenues in Millions (a)
  
For the Nine Months Ended
  
 For the Nine Months Ended
  
DescriptionSeptember 30, 2017
September 30, 2016
Variation
Percent
Variation
 September 30, 2017September 30, 2016Variation
Percent
Variation
Residential/Religious (b)7,576
8,130
(554)(6.8)% $1,925$2,017$(92)(4.6)%
Commercial/Industrial6,965
7,220
(255)(3.5) 1,3931,381120.9
Retail choice customers19,748
20,404
(656)(3.2) 2,0922,114(22)(1.0)
NYPA, Municipal Agency and other sales7,548
7,641
(93)(1.2) 48347491.9
Other operating revenues (c)—
—
—
—
 186236(50)(21.2)
Total41,837
43,395
(1,558)(3.6)%(d)$6,079$6,222$(143)(2.3)%
(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 regulatory assets and liabilities in accordance with the revenue decoupling mechanism and 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 decreased 0.9 percent in the nine months ended September 30, 2017 compared with the 2016 period.



53

Operating revenues decreased $143 million in the nine months ended September 30, 2017 compared with the 2016 period due primarily to lower purchased power costs ($107 million). The lower revenues reflected the decline in surcharges for assessments and fees that were collected in revenues from customers ($13 million).

Purchased power expenses decreased $107 million in the nine months ended September 30, 2017 compared with the 2016 period due to lower purchased volumes ($95 million) and unit costs ($12 million).

Fuel expenses increased $14 million in the nine months ended September 30, 2017 compared with the 2016 period due to higher unit costs ($12 million) and purchased volumes from the company’s electric generating facilities ($2 million).

Other operations and maintenance expenses decreased $131 million in the nine months ended September 30, 2017 compared with the 2016 period due primarily to lower costs for pensionpensions and other postretirement benefits ($114 million), surcharges for assessments and fees that are collected in revenues from customers ($13 million), environmental costs ($17 million) and stock based compensation ($6 million), offset by higher costs for municipal infrastructure support ($20 million).

Depreciation and amortization increased $45 million in the nine months ended September 30, 2017 compared with the 2016 period due primarily to higher electric utility plant balances.

Taxes, other than income taxes increased $46 million in the nine months ended September 30, 2017 compared with the 2016 period due primarily to higher property taxes ($43 million) and the absence in 2017 of a favorable state audit settlement in 2016 ($5 million), offset by lower state and local taxes ($4 million).

Gas
CECONY’s results of gas operations for the nine months ended September 30, 2017 compared with the 2016 period is as follows:

  
For the Nine Months Ended
  
(Millions of Dollars)September 30, 2017September 30, 2016Variation
Operating revenues$1,421$1,113$308
Gas purchased for resale372217155
Other operations and maintenance33030723
Depreciation and amortization13711819
Taxes, other than income taxes22019822
Gas operating income$362$273$89



54

54




CECONY’s gas sales and deliveries, excluding off-system sales, for the nine months ended September 30, 2017 compared with the 2016 period were:

  
Thousands of Dt Delivered Revenues in Millions (a)
  
For the Nine Months Ended
  
 For the Nine Months Ended
  
DescriptionSeptember 30, 2017
September 30, 2016
Variation
Percent
Variation
 September 30, 2017September 30, 2016
Variation
Percent
Variation
Residential39,814
35,565
4,249
11.9% $613$506$10721.1 %
General23,427
20,962
2,465
11.8
 2552005527.5
Firm transportation53,952
51,333
2,619
5.1
 3903325817.5
Total firm sales and transportation117,193
107,860
9,333
8.7
(b)1,2581,03822021.2
Interruptible sales (c)6,526
7,587
(1,061)(14.0) 302913.4
NYPA30,233
31,970
(1,737)(5.4) 22—
—
Generation plants48,989
70,895
(21,906)(30.9) 1919—
—
Other16,756
16,442
314
1.9
 2425(1)(4.0)
Other operating revenues (d)—
—
—
—
 88—
88—
Total219,697
234,754
(15,057)(6.4)% $1,421$1,113$30827.7 %
(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 the company’s service area increased 6.4 percent in the nine months ended September 30, 2017 compared with the 2016 period, reflecting primarily increased volumes attributable to the growth in the number of gas customers.
(c)Includes 3,563 thousands and 3,940 thousands of Dt for the 2017 and 2016 periods, respectively, which are also reflected in firm transportation and other.
(d)Other gas operating revenues generally reflect changes in regulatory assets and liabilities in accordance with the company’s rate plans.

Operating revenues increased $308 million in the nine months ended September 30, 2017 compared with the 2016 period due primarily to higher revenues from the gas rate plan and growth in the number of customers ($133 million) and increased gas purchased for resale expense ($155 million).

Gas purchased for resale increased $155 million in the nine months ended September 30, 2017 compared with the 2016 period due to higher unit costs ($151 million) and purchased volumes ($4 million).

Other operations and maintenance expenses increased $23 million in the nine months ended September 30, 2017 compared with the 2016 period due primarily to higher pension and other postretirement benefits costs ($7 million), health and life expenses ($5 million), surcharges for assessments and fees that are collected in revenues from customers ($3 million) and costs for maintenance of gas mains ($2 million).

Depreciation and amortization increased $19 million in the nine months ended September 30, 2017 compared with the 2016 period due primarily to higher gas utility plant balances.

Taxes, other than income taxes increased $22 million in the nine months ended September 30, 2017 compared with the 2016 period due primarily to higher property taxes ($12 million), state and local taxes ($6 million) and payroll taxes ($3 million).



55

Steam
CECONY’s results of steam operations for the nine months ended September 30, 2017 compared with the 2016 period is as follows:

  
For the Nine Months Ended
  
(Millions of Dollars)September 30, 2017September 30, 2016Variation
Operating revenues$448$406$42
Purchased power26251
Fuel745222
Other operations and maintenance134139(5)
Depreciation and amortization64622
Taxes, other than income taxes98899
Steam operating income$52$39$13

CECONY’s steam sales and deliveries for the nine months ended September 30, 2017 compared with the 2016 period were:

  
Millions of Pounds Delivered Revenues in Millions
  
For the Nine Months Ended
  
 For the Nine Months Ended
  
DescriptionSeptember 30, 2017
September 30, 2016
Variation
Percent
Variation
 September 30, 2017September 30, 2016Variation
Percent
Variation
General364
345
19
5.5% $20$18$211.1%
Apartment house4,248
4,251
(3)(0.1) 1191071211.2
Annual power10,074
10,640
(566)(5.3) 300284165.6
Other operating revenues (a)—
—
—
—
 9(3)12Large
Total14,686
15,236
(550)(3.6)%(b)$448$406$4210.3%
(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 decreased 3.5 percent in the nine months ended September 30, 2017 compared with the 2016 period.

Operating revenues increased $42 million in the nine months ended September 30, 2017 compared with the 2016 period due primarily to higher fuel expenses ($22 million), the weather impact on revenues ($6 million), lower regulatory reserve related to steam earnings sharing ($7 million), a property tax refund incentive ($3 million), and higher purchased power costs ($1 million).

Purchased power expenses increased $1 million in the nine months ended September 30, 2017 compared with the 2016 period due to higher unit costs ($5 million), offset by lower purchased volumes ($4 million).

Fuel expenses increased $22 million in the nine months ended September 30, 2017 compared with the 2016 period due to higher unit costs ($23 million), offset by lower purchased volumes from the company’s steam generating facilities ($1 million).

Other operations and maintenance expenses decreased $5 million in the nine months ended September 30, 2017 compared with the 2016 period due primarily to lower equipment maintenance expenses.

Depreciation and amortization increased $2 million in the nine months ended September 30, 2017 compared with the 2016 period due primarily to higher steam utility plant balances.

Taxes, other than income taxes increased $9 million in the nine months ended September 30, 2017 compared with the 2016 period due primarily to higher property taxes ($7 million) and state and local taxes ($1 million).

Net Interest Expense
Net interest expense increased $12 million in the nine months ended September 30, 2017 compared with the 2016 period due primarily to higher long-term debt balances in the 2017 period.



56

56




Income Tax Expense
Income taxes increased $60 million in the nine months ended September 30, 2017 compared with the 2016 period due primarily to higher income before income tax expense ($33 million), a decrease in tax benefits for plant-related flow through items ($27 million), lower research and development tax credits ($10 million) and a higher reserve for injuries and damages ($9 million), offset in part by lower state income taxes ($7 million), higher research and development tax credits included in Con Edison's filing of its 2016 consolidated federal tax return in September 2017 ($5 million), a decrease in bad debtuncollectible expense ($2 million) and a decrease in uncertain tax positions ($1 million).

O&R

  
For the Nine Months Ended
September 30, 2017		 For the Nine Months Ended
September 30, 2016		 
  
(Millions of Dollars)Electric
Gas
2017 TotalElectric
Gas
2016 Total2017-2016
Variation
Operating revenues$495$172$667$497$133$630$37
Purchased power148—
148154—
154(6)
Gas purchased for resale—
5252—
323220
Other operations and maintenance185512361804022016
Depreciation and amortization3815533713503
Taxes, other than income taxes4121624020602
Operating income$83$33$116$86$28$114$2

Electric
O&R’s results of electric operations for the nine months ended September 30, 2017 compared with the 2016 period is as follows:

  
For the Nine Months Ended
  
(Millions of Dollars)September 30, 2017September 30, 2016Variation
Operating revenues$495$497$(2)
Purchased power148154(6)
Other operations and maintenance1851805
Depreciation and amortization38371
Taxes, other than income taxes41401
Electric operating income$83$86$(3)



57

O&R’s electric sales and deliveries for the nine months ended September 30, 2017 compared with the 2016 period were:

  
Millions of kWh Delivered Revenues in Millions (a)
  
For the Nine Months Ended
  
 For the Nine Months Ended
  
DescriptionSeptember 30, 2017
September 30, 2016
Variation
Percent
Variation
 September 30, 2017September 30, 2016Variation
Percent
Variation
Residential/Religious (b)1,208
1,307
(99)(7.6)% $242$240$20.8%
Commercial/Industrial574
607
(33)(5.4) 8889(1)(1.1)
Retail choice customers2,255
2,434
(179)(7.4) 155166(11)(6.6)
Public authorities79
76
3
3.9
 76116.7
Other operating revenues (c)—
—
—
—
 3(4)7Large
Total4,116
4,424
(308)(7.0)%(d)$495$497$(2)(0.4)%
(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. O&R’s electric sales in New Jersey are not subject to a decoupling mechanism, and as a result, changes in such volumes do impact revenues.
(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 decreased 2.2 percent in the nine months ended September 30, 2017 compared with the 2016 period.

Operating revenues decreased $2 million in the nine months ended September 30, 2017 compared with the 2016 period due primarily to lower purchased power expense ($6 million) and lower revenues from rental property ($1 million), offset by higher revenues from the New York electric rate plan ($6 million).

Purchased power expenses decreased $6 million in the nine months ended September 30, 2017 compared with the 2016 period due to lower purchased volumes ($5 million) and unit costs ($1 million).

Other operations and maintenance expenses increased $5 million in the nine months ended September 30, 2017 compared with the 2016 period due primarily to operating costs related to weather events in 2017 ($2 million), higher surcharges for assessments and fees that are collected in revenues from customers ($1 million) and a higher reserve for injuries and damages ($1 million).


Depreciation and amortization increased $1$8 million in the ninethree months ended September 30, 20172021 compared with the 20162020 period primarily due primarily to higher electricgas utility plant balances.


Taxes, other than income taxes increased $1$26 million in the ninethree months ended September 30, 20172021 compared with the 20162020 period primarily due primarily to lower deferral of under-collected property taxes ($16 million), higher property taxes.taxes ($8 million), and higher state and local taxes ($2 million).


GasSteam
O&R’sCECONY’s results of gassteam operations for the ninethree months ended September 30, 20172021 compared with the 20162020 period iswere as follows:

  
For the Three Months Ended
  
(Millions of Dollars)September 30, 2021September 30, 2020Variation
Operating revenues$55$51$4
Purchased power844
Fuel56(1)
Other operations and maintenance42411
Depreciation and amortization23221 
Taxes, other than income taxes3535—
Steam operating income$(58)$(57)$(1)

  
For the Nine Months Ended
  
(Millions of Dollars)September 30, 2017September 30, 2016Variation
Operating revenues$172$133$39
Gas purchased for resale523220
Other operations and maintenance514011
Depreciation and amortization15132
Taxes, other than income taxes21201
Gas operating income$33$28$5



58

58




O&R’s gasCECONY’s steam sales and deliveries excluding off-system sales, for the ninethree months ended September 30, 20172021 compared with the 20162020 period were:

  
Millions of Pounds DeliveredRevenues in Millions
  
For the Three Months Ended
  
For the Three Months Ended
  
DescriptionSeptember 30, 2021September 30, 2020VariationPercent
Variation		September 30, 2021September 30, 2020VariationPercent
Variation
General4 7 (3)(42.9 %)$2$1$1Large
Apartment house588 617 (29)(4.7)131218.3 
Annual power1,904 2,023 (119)(5.9)343313.0 
Other operating revenues (a)— — — —65120.0 
Total2,496 2,647 (151)(5.7)%(b)$55$51$47.8 %
(a)Other steam operating revenues generally reflect changes in regulatory assets and liabilities in accordance with the company’s rate plan.
  
Thousands of Dt Delivered Revenues in Millions (a)
  
For the Nine Months Ended
  
 For the Nine Months Ended
  
DescriptionSeptember 30, 2017
September 30, 2016
Variation
Percent
Variation
 September 30, 2017
September 30, 2016
Variation
Percent
Variation
Residential5,556
5,266
290
5.5% $79$55$2443.6%
General1,447
1,224
223
18.2
 1610660.0
Firm transportation6,543
7,188
(645)(9.0) 504912.0
Total firm sales and transportation13,546
13,678
(132)(1.0)(b)1451143127.2
Interruptible sales2,966
3,020
(54)(1.8) 523Large
Generation plants6
15
(9)(60.0) —
—
—
—
Other589
583
6
1.0
 1—
1—
Other gas revenues—
—
—
—
 2117423.5%
Total17,107
17,296
(189)(1.1)% $172$133$3929.3%
(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 0.1 percent in the nine months ended September 30, 2017 compared with 2016 period.

Operating revenues increased $39 million(b)After adjusting for variations, primarily weather and billing days, steam sales and deliveries decreased 4.3 percent in the ninethree months ended September 30, 20172021 compared with the 2016 period due primarily to an increase in gas purchased for resale ($20 million) and higher2020 period. See “Coronavirus Disease 2019 (COVID-19) Impacts,” above.

Operating revenues from the New York gas rate plan ($14 million).

Gas purchased for resale increased $20$4 million in the ninethree months ended September 30, 20172021 compared with the 20162020 period primarily due to higher purchased power expenses ($4 million).

Purchased power increased $4 million in the three months ended September 30, 2021 compared with the 2020 period due to higher purchased volumes ($123 million) and unit costs ($81 million).


Other operations and maintenance expenses increased $11
68

Fuel decreased $1 million in the ninethree months ended September 30, 20172021 compared with the 20162020 period due primarily to higher pensionlower unit costs.


DepreciationOther operations and amortizationmaintenance expenses increased $2$1 million in the ninethree months ended September 30, 20172021 compared with the 20162020 period primarily due primarily to higher gas utility plant balances.costs for pension and other postretirement benefits.


Taxes, other than income taxesDepreciation and amortization increased $1 million in the ninethree months ended September 30, 20172021 compared with the 20162020 period due primarily to higher property taxes.

Income Tax Expense
Income taxes increased $4 million in the nine months ended September 30, 2017 compared with the 2016 period due primarily to higher income before income tax expense ($1 million), a decrease in tax benefits for plant-related flow through items ($1 million) and the absence in 2017 of a tax benefit from a corporate-owned life insurance policy in 2016 ($2 million).



59

Clean Energy Businesses
The Clean Energy Businesses’ results of operations for the nine months ended September 30, 2017 compared with the 2016 period is as follows:

  
For the Nine Months Ended
  
(Millions of Dollars)September 30, 2017September 30, 2016Variation
Operating revenues$460$998$(538)
Purchased power(3)676(679)
Gas purchased for resale1617289
Other operations and maintenance17412450
Depreciation and amortization543024
Taxes, other than income taxes1216(4)
Gain on sale of retail electric supply business (2016) and solar electric production project (2017) (a)(1)(104)103
Operating income$63$184$(121)
(a)     See Note O to the Third Quarter Financial Statements.

Operating revenues decreased $538 million in the nine months ended September 30, 2017 compared with the 2016 period, due primarily to lower electric retail revenues of $781 million from the sale of the retail electric supply business in September 2016. Renewable revenues increased $112 million due primarily to an increase in renewable electric production projects in operation and revenues from the engineering, procurement and construction of Upton 2 (see Note O to the Third Quarter Financial Statements). Energy services revenues increased $21 million. Wholesale revenues increased $105 million due to higher sales volumes. Net mark-to-market values decreased $6 million of which $11 million in losses are reflected in purchased power costs and $5 million in gains are reflected in revenues.steam utility plant balances.

Purchased power expenses decreased $679 million in the nine months ended September 30, 2017 compared with the 2016 period due primarily to lower electric costs due to the sale of the retail electric supply business in September 2016 ($689 million) offset by changes in mark-to-market values ($11 million).

Gas purchased for resale increased $89 million in the nine months ended September 30, 2017 compared with the 2016 period due to higher purchased volumes.

Other operations and maintenance expenses increased $50 million in the nine months ended September 30, 2017 compared with the 2016 period due to Upton 2 engineering, procurement and construction costs (see Note O to the Third Quarter Financial Statements) and an increase in energy services costs.

Depreciation and amortization increased $24 million in the nine months ended September 30, 2017 compared with the 2016 period due to an increase in solar electric production projects in operation during 2017.

Taxes, other than income taxes decreased $4 million in the nine months ended September 30, 2017 compared with the 2016 period due to lower gross receipts tax from the sale of the retail electric supply business in September 2016.

Gain on sale of retail electric supply business was $104 million in the nine months ended September 30, 2016 reflecting the sale of the Clean Energy Businesses' retail electric supply business.


Other Income (Deductions)
Other income (deductions)deductions decreased $2$15 million in the nine monthsthree months ended September 30, 20172021 compared with the 20162020 period due primarily to earnings from equity investments.

Net Interest Expense
Net interest expense increased $11 million in the nine months ended September 30, 2017 compared with the 2016 period due primarily to increased debt on solar electric production projects.




60

60





Income Tax Expense
Income taxes decreased $68 million in the nine months ended September 30, 2017 compared with the 2016 period due primarily to lower income before income tax expense ($54 million), higher renewable energy tax credits ($1 million)costs associated with components of pension and the increase to deferred state income taxes in 2016 as a result of the sale of the retail electric supply business that increased the Clean Energy Businesses’ state apportionment factor on its cumulative temporary differences ($13 million).other postretirement benefits other than service cost.


Con Edison Transmission
Other operations and maintenance increased $6 million in the nine months ended September 30, 2017 compared with the 2016 period due primarily to CET having no employees or other direct costs until January 1, 2017.

Net Interest Expense
Net Interest Expense increased $15 million in the three months ended September 30, 2021 compared with the 2020 period primarily due to higher interest on long-term debt ($15 million).

Income Tax Expense
Income taxes decreased $7 million in the three months ended September 30, 2021 compared with the 2020 period primarily due to an increase in the amortization of excess deferred federal income taxes due to the TCJA ($4 million) and a higher favorable tax adjustment for the 2020 tax return primarily due to an increase in the general business tax credit ($5 million), offset in part by higher income before income tax expense ($1 million) and lower flow-through tax benefits in 2021 for plant-related items ($1 million).

O&R
  
For the Three Months Ended
September 30, 2021		For the Three Months Ended
September 30, 2020
  
(Millions of Dollars)ElectricGas2021 TotalElectricGas2020 Total2021-2020 Variation
Operating revenues$223$34$257$208$30$238$19
Purchased power68— 6856— 5612
Gas purchased for resale— 1313— 994
Other operations and maintenance6716836217794
Depreciation and amortization18624176231
Taxes, other than income taxes1572215722—
Operating income$55$(8)$47$58$(9)$49$(2)

Electric
O&R’s results of electric operations for the three months ended September 30, 2021 compared with the 2020 period were as follows:
  
For the Three Months Ended
  
(Millions of Dollars)September 30, 2021September 30, 2020Variation
Operating revenues$223$208$15
Purchased power685612
Other operations and maintenance67625
Depreciation and amortization18171
Taxes, other than income taxes1515—
Electric operating income$55$58$(3)


69

O&R’s electric sales and deliveries for the three months ended September 30, 2021 compared with the 2020 period were:
  
Millions of kWh DeliveredRevenues in Millions (a)
  
For the Three Months Ended
  
For the Three Months Ended
  
DescriptionSeptember 30, 2021September 30, 2020VariationPercent
Variation		September 30, 2021September 30, 2020VariationPercent
Variation
Residential/Religious (b)581 647 (66)(10.2 %)$114$110$43.6 %
Commercial/Industrial221 230 (9)(3.9)3235(3)(8.6)
Retail choice customers820 741 79 10.7 756213 21.0 
Public authorities32 32 — —43133.3 
Other operating revenues (c)— — — —(2)(2)——
Total1,654 1,650 4 0.2 %(d)$223$208$157.2 %
(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. O&R’s electric sales in New Jersey are not subject to a decoupling mechanism, and as a result, changes in such volumes do impact revenues.
(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 2.9 percent in the three months ended September 30, 2021 compared with the 2020 period. See “Coronavirus Disease 2019 (COVID-19) Impacts,” above.

Operating revenues increased $15 million in the three months ended September 30, 2021 compared with the 2020 period primarily due to higher purchased power expenses ($12 million) and higher revenues from the New York electric rate plan ($1 million).

Purchased power expenses increased $12 million in the three months ended September 30, 2021 compared with the 2020 period due to higher unit costs ($23 million), offset in part by lower purchased volumes ($10 million).

Other operations and maintenance expenses increased $5 million in the three months ended September 30, 2021 compared with the 2020 period primarily due to higher storm-related costs.

Depreciation and amortization increased $1 million in the three months ended September 30, 2021 compared with the 2020 period primarily due to higher electric utility plant balances.

Gas
O&R’s results of gas operations for the three months ended September 30, 2021 compared with the 2020 period were as follows:
  
For the Three Months Ended
  
(Millions of Dollars)September 30, 2021September 30, 2020Variation
Operating revenues$34$30$4
Gas purchased for resale1394
Other operations and maintenance1617(1)
Depreciation and amortization66— 
Taxes, other than income taxes77— 
Gas operating income$(8)$(9)$1 

70

O&R’s gas sales and deliveries, excluding off-system sales, for the three months ended September 30, 2021 compared with the 2020 period were:
  
Thousands of Dt DeliveredRevenues in Millions (a)
  
For the Three Months Ended
  
For the Three Months Ended
  
DescriptionSeptember 30, 2021September 30, 2020VariationPercent
Variation		September 30, 2021September 30, 2020VariationPercent
Variation
Residential900 724 176 24.3 %$18$13$538.5 %
General258 218 40 18.3 422Large
Firm transportation736 804 (68)(8.5)67(1)(14.3)
Total firm sales and transportation1,894 1,746 148 8.5 (b)2822627.3 
Interruptible sales844 787 57 7.2 —1(1)Large
Generation plants13 21 (8)(38.1)— — — —
Other26 30 (4)(13.3)1 — 1 —
Other gas revenues— — — —57(2)(28.6)
Total2,777 2,584 193 7.5 %$34$30$413.3 %
(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 2.7 percent in the three months ended September 30, 2021 compared with the 2020 period. See “Coronavirus Disease 2019 (COVID-19) Impacts,” above.

Operating revenues increased $4 million in the three months ended September 30, 2021 compared with the 2020 period primarily due to higher gas purchased for resale ($4 million).

Gas purchased for resale increased $4 million in the three months ended September 30, 2021 compared with the 2020 period due to higher unit costs ($2 million) and higher purchased volumes ($1 million).

Other operations and maintenance expenses decreased $1 million in the three months ended September 30, 2021 compared with the 2020 period primarily due to lower uncollectible accounts and lower pension costs.
Income Tax Expense
Income taxes decreased $1 million in the three months ended September 30, 2021 compared with the 2020 period primarily due to lower income before income tax expense.

Clean Energy Businesses
The Clean Energy Businesses’ results of operations for the three months ended September 30, 2021 compared with the 2020 period were as follows:
  
For the Three Months Ended
  
(Millions of Dollars)September 30, 2021September 30, 2020Variation
Operating revenues$264$222$42
Gas purchased for resale981
Other operations and maintenance1145955
Depreciation and amortization5858—
Taxes, other than income taxes45(1)
Operating income$79$92$(13)

Operating revenues increased $42 million in the three months ended September 30, 2021 compared with the 2020 period primarily due to higher revenue from renewable electric production projects ($48 million), higher wholesale revenues ($9 million) and higher energy services revenues ($8 million), offset in part by net mark-to-market values ($23 million).

Gas purchased for resale increased $1 million in the three months ended September 30, 2021 compared with the 2020 period due to higher purchased volumes.

Other operations and maintenance expenses increased $55 million in the three months ended September 30, 2021 compared with the 2020 period primarily due to higher costs from engineering, procurement and construction of renewable electric projects for customers.


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Net Interest Expense
Net interest expense decreased $4 million in the three months ended September 30, 2021 compared with the 2020 period due to higher unrealized gains on interest rate swaps in the 2021 period.

Income Tax Expense
Income taxes increased $16 million in the three months ended September 30, 2021 compared with the 2020 period primarily due to lower income attributable to non-controlling interest ($19 million), offset in part by lower income before income tax expense ($3 million).

Income (Loss) Attributable to Non-Controlling Interest
Income attributable to non-controlling interest decreased $78 million to a loss of $69 million in the three months ended September 30, 2021 compared with the 2020 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 decreased $22 million in the three months ended September 30, 2021 compared with the 2020 period primarily due to the substantial completion of the sale of Stagecoach and CET Gas foregoing AFUDC income from MVP starting January 2021 until significant construction resumes. See "Investments" in Note A and R to the Third Quarter Financial Statements.

Income Tax Expense
Income taxes decreased $5 million in the three months ended September 30, 2021 compared with the 2020 period primarily due to lower income before income tax expense ($4 million) and lower state income taxes ($1 million).

Other
Income Tax Expense
Income taxes increased $5 million in the three months ended September 30, 2021 compared with the 2020 period primarily due to lower consolidated state income tax benefits.


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The Companies’ results of operations for the nine months ended September 30, 2021 and 2020 were as follows:
  CECONYO&RClean Energy BusinessesCon Edison
Transmission		Other (a)Con Edison (b)
(Millions of Dollars)202120202021202020212020202120202021202020212020
Operating revenues$8,784$8,072$699$647$779$566$3$3$(4)$(2)$10,261$9,286
Purchased power1,2941,065157127— — — — (3)—1,4481,192
Fuel166124— — — — — — — — 166124
Gas purchased for resale35729856434924— — (1)(1)461364
Other operations and maintenance1,8481,71424023234816598(2)(3)2,4432,116
Depreciation and amortization1,2671,187716717217311— — 1,5111,428
Taxes, other than income taxes2,0161,83067641416— — 652,1031,915
Operating income1,8361,854108114196188(7)(6)(4)(3)2,1292,147
Other income (deductions) (c)(70)(138)(9)(11)—4(178)78(2)(5)(259)(72)
Net interest expense5675543230441838141816669797
Income before income tax expense1,1991,16267731529(193)58(24)(24)1,2011,278
Income tax expense188199141644(36)(51)16(1)(12)194183
Net income$1,011$963$53$57$108$45$(142)$42$(23)$(12)$1,007$1,095
Income (loss) attributable to non-controlling interest— —— —(115)37— —— —(115)37
Net income for common stock$1,011$963$53$57$223$8$(142)$42$(23)$(12)$1,122$1,058
(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.



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CECONY
  
For the Nine Months Ended
September 30, 2021
  
For the Nine Months Ended
September 30, 2020
  
  
(Millions of Dollars)ElectricGasSteam2021 TotalElectricGasSteam2020 Total2021-2020 Variation
Operating revenues$6,661$1,730$393$8,784$6,178$1,509$385$8,072$712
Purchased power1,267— 271,2941,046— 191,065229
Fuel107— 5916656— 6812442
Gas purchased for resale— 357— 357— 298— 29859
Other operations and maintenance1,4502771211,8481,3222691231,714134
Depreciation and amortization959239691,267904216671,18780
Taxes, other than income taxes1,5413671082,0161,4372861071,830186
Operating income$1,337$490$9$1,836$1,413$440$1$1,854$(18)

Electric
CECONY’s results of electric operations for the nine months ended September 30, 2021 compared with the 2020 period were as follows:
  
For the Nine Months Ended
  
(Millions of Dollars)September 30, 2021September 30, 2020Variation
Operating revenues$6,661$6,178$483
Purchased power1,2671,046221
Fuel1075651
Other operations and maintenance1,4501,322128
Depreciation and amortization95990455
Taxes, other than income taxes1,5411,437104
Electric operating income$1,337$1,413$(76)

CECONY’s electric sales and deliveries for the nine months ended September 30, 2021 compared with the 2020 period were:
  
Millions of kWh DeliveredRevenues in Millions (a)
  
For the Nine Months Ended
  
For the Nine Months Ended
  
DescriptionSeptember 30, 2021September 30, 2020VariationPercent
Variation		September 30, 2021September 30, 2020VariationPercent
Variation
Residential/Religious (b)8,828 8,638 190 2.2 %$2,415$2,220$1958.8 %
Commercial/Industrial6,981 7,145 (164)(2.3)1,6571,40725017.8 
Retail choice customers16,310 17,014 (704)(4.1)2,0081,8381709.2 
NYPA, Municipal Agency and other sales6,854 6,972 (118)(1.7)536506305.9 
Other operating revenues (c)— — — —45207(162)(78.3)
Total38,973 39,769 (796)(2.0)%(d)$6,661$6,178$4837.8 %
(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 decreased 1.3 percent in the nine months ended September 30, 2021 compared with the 2020 period. See “Coronavirus Disease 2019 (COVID-19) Impacts,” above.

Operating revenues increased $483 million in the nine months ended September 30, 2021 compared with the 2020 period primarily due to an increase in revenues from the electric rate plan ($177 million), higher purchased power expenses ($221 million) and higher fuel expenses ($51 million).

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Purchased power expenses increased $221 million in the nine months ended September 30, 2021 compared with the 2020 period due to higher purchased volumes ($157 million) and higher unit costs ($64 million).

Fuel expenses increased $51 million in the nine months ended September 30, 2021 compared with the 2020 period due to higher unit costs.

Other operations and maintenance expenses increased $128 million in the nine months ended September 30, 2021 compared with the 2020 period primarily due to higher costs for pension and other postretirement benefits ($46 million), higher costs related to heat and storm-related events ($40 million), higher uncollectible expense ($6 million) and higher healthcare costs ($10 million).

Depreciation and amortization increased $55 million in the nine months ended September 30, 2021 compared with the 2020 period primarily due to higher electric utility plant balances.

Taxes, other than income taxes increased $104 million in the nine months ended September 30, 2021 compared with the 2020 period primarily due to higher property taxes ($70 million), higher state and local taxes ($17 million) and lower deferral of under-collected property taxes ($14 million).

Gas
CECONY’s results of gas operations for the nine months ended September 30, 2021 compared with the 2020 period were as follows:
  
For the Nine Months Ended
  
(Millions of Dollars)September 30, 2021September 30, 2020Variation
Operating revenues$1,730$1,509$221
Gas purchased for resale35729859
Other operations and maintenance2772698
Depreciation and amortization23921623
Taxes, other than income taxes36728681
Gas operating income$490$440$50

CECONY’s gas sales and deliveries, excluding off-system sales, for the nine months ended September 30, 2021 compared with the 2020 period were:
  
Thousands of Dt DeliveredRevenues in Millions (a)
  
For the Nine Months Ended
  
For the Nine Months Ended
  
DescriptionSeptember 30, 2021September 30, 2020VariationPercent
Variation		September 30, 2021September 30, 2020VariationPercent
Variation
Residential39,231 37,161 2,070 5.6 %$789$691$9814.2 %
General23,663 22,551 1,112 4.9 3132377632.1 
Firm transportation58,783 58,697 86 0.1 523487367.4 
Total firm sales and transportation121,677 118,409 3,268 2.8 (b)1,6251,41521014.8 
Interruptible sales (c)4,747 6,869 (2,122)(30.9)2223(1)(4.3)
NYPA36,601 29,403 7,198 24.5 22— —
Generation plants32,653 40,073 (7,420)(18.5)181715.9 
Other15,872 16,481 (609)(3.7)2727——
Other operating revenues (d)— — — —36251144.0 
Total211,550 211,235 315 0.1 %$1,730$1,509$22114.6 %
(a)Revenues from gas sales are subject to a weather normalization clause and a revenue decoupling mechanism as a result of which delivery revenues are generally not affected by changes in delivery volumes from levels assumed when rates were approved.
(b)After adjusting for variations, primarily billing days, firm gas sales and transportation volumes in the company’s service area decreased 0.9 percent in the nine months ended September 30, 2021 compared with the 2020 period. See “Coronavirus Disease 2019 (COVID-19) Impacts,” above.
(c)Includes 1,700 thousand and 2,961 thousand of Dt for the 2021 and 2020 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.


75

Operating revenues increased $221 million in the nine months ended September 30, 2021 compared with the 2020 period primarily due to an increase in revenues from the gas rate plan ($154 million) and higher gas purchased for resale expense ($59 million).

Gas purchased for resale increased $59 million in the nine months ended September 30, 2021 compared with the 2020 period due to higher unit costs ($43 million) and higher purchased volumes ($15 million).

Other operations and maintenance expenses increased $8 million in the nine months ended September 30, 20172021 compared with the 20162020 period primarily due primarily to a new debt issuancehigher costs for pension and other postretirement benefits ($10 million) and higher surcharges for assessments and fees that are collected in 2016.revenues from customers ($7 million), offset in part by municipal infrastructure support ($10 million).


Other Income (Deductions)
Other income (deductions)Depreciation and amortization increased $37$23 million in the nine months ended September 30, 20172021 compared with the 20162020 period primarily due to higher gas utility plant balances.

Taxes, other than income taxes increased $81 million in the nine months ended September 30, 2021 compared with the 2020 period primarily due to earnings from equity investmentslower deferral of under-collected property taxes ($46 million), higher property taxes ($28 million) and higher state and local taxes ($6 million).

Steam
CECONY’s results of steam operations for the nine months ended September 30, 2021 compared with the 2020 period were as follows:
  
For the Nine Months Ended
  
(Millions of Dollars)September 30, 2021September 30, 2020Variation
Operating revenues$393$385$8
Purchased power27198
Fuel5968(9)
Other operations and maintenance121123(2)
Depreciation and amortization69672 
Taxes, other than income taxes1081071
Steam operating income$9$1$8

CECONY’s steam sales and deliveries for the nine months ended September 30, 2021 compared with the 2020 period were:
  
Millions of Pounds DeliveredRevenues in Millions
  
For the Nine Months Ended
  
For the Nine Months Ended
  
DescriptionSeptember 30, 2021September 30, 2020VariationPercent
Variation		September 30, 2021September 30, 2020VariationPercent
Variation
General396 334 62 18.6 %$19$17$211.8 %
Apartment house3,768 3,830 (62)(1.6)100103(3)(2.9)
Annual power8,888 8,462 426 5.0 256245114.5 
Other operating revenues (a)— — — —1820(2)(10.0)
Total13,052 12,626 426 3.4 %(b)$393$385$82.1 %
(a)Other steam operating revenues generally reflect changes in Stagecoach Gas Services, LLC, substantially all of which were maderegulatory assets and liabilities in June 2016.accordance with the company’s rate plan.

(b)After adjusting for variations, primarily weather and billing days, steam sales and deliveries decreased 3.3 percent in the nine months ended September 30, 2021 compared with the 2020 period. See “Coronavirus Disease 2019 (COVID-19) Impacts,” above.
Income Tax Expense
Income taxesOperating revenues increased $10$8 million in the nine months ended September 30, 20172021 compared with the 20162020 period primarily due to the impact of colder weather ($20 million) and higher purchased power expenses ($8 million), offset in part by lower fuel expenses ($9 million), a tax law surcharge ($6 million) and lower usage by customers due to COVID-19 pandemic ($4 million).

Purchased power expenses increased $8 million in the nine months ended September 30, 2021 compared with the 2020 period due to higher unit costs ($6 million) and purchased volumes ($2 million).

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Fuel expenses decreased $9 million in the nine months ended September 30, 2021 compared with the 2020 period due to lower unit costs ($14 million), offset in part by higher purchased volumes from the company’s steam generating facilities ($4 million).

Other operations and maintenance expenses decreased $2 million in the nine months ended September 30, 2021 compared with the 2020 period primarily due to lower municipal infrastructure support.

Depreciation and amortization increased $2 million in the nine months ended September 30, 2021 compared with the 2020 period due to higher steam utility plant balances.

Taxes, other than income taxes increased $1 million in the nine months ended September 30, 2021 compared with the 2020 period primarily due to higher property taxes.

Other Income (Deductions)
Other deductions decreased $68 million in the nine months ended September 30, 2021 compared with the 2020 period primarily due to lower costs associated with components of pension and other postretirement benefits other than service cost ($60 million).

Net Interest Expense
Net interest expense increased $13 million in the nine months ended September 30, 2021 compared with the 2020 period primarily due to higher interest expense for long-term debt ($28 million), offset in part by lower interest accrued on the system benefit charge liability ($4 million), lower interest on short-term debt ($4 million), lower interest accrued on deferred storm costs ($2 million) and lower interest on deposits ($2 million).

Income Tax Expense
Income taxes decreased $11 million in the nine months ended September 30, 2021 compared with the 2020 period primarily due to an increase in the amortization of excess deferred federal income taxes due to the TCJA ($11 million), a higher favorable tax adjustment for the 2020 tax return primarily due to an increase in the general business tax credit ($5 million) and the absence of the amortization of excess deferred state income taxes in 2021 ($5 million), offset in part by higher income before income tax expense ($8 million) and lower flow-through tax benefits in 2021 for plant-related items ($3 million).

O&R
  
For the Nine Months Ended
September 30, 2021		For the Nine Months Ended
September 30, 2020
  
(Millions of Dollars)ElectricGas2021 TotalElectricGas2020 Total2021-2020 Variation
Operating revenues$522$177$699$483$164$647$52
Purchased power157— 157127— 12730
Gas purchased for resale— 5656— 434313
Other operations and maintenance19347240181512328
Depreciation and amortization5219714819674
Taxes, other than income taxes4324674123643
Operating income$77$31$108$86$28$114$(6)



Electric
O&R’s results of electric operations for the nine months ended September 30, 2021 compared with the 2020 period were as follows:

77

  
For the Nine Months Ended
  
(Millions of Dollars)September 30, 2021September 30, 2020Variation
Operating revenues$522$483$39
Purchased power15712730
Other operations and maintenance19318112
Depreciation and amortization52484
Taxes, other than income taxes43412
Electric operating income$77$86$(9)

O&R’s electric sales and deliveries for the nine months ended September 30, 2021 compared with the 2020 period were:
  
Millions of kWh DeliveredRevenues in Millions (a)
  
For the Nine Months Ended
  
For the Nine Months Ended
  
DescriptionSeptember 30, 2021September 30, 2020VariationPercent
Variation		September 30, 2021September 30, 2020VariationPercent
Variation
Residential/Religious (b)1,366 1,414 (48)(3.4 %)$257$247$10 4.0 %
Commercial/Industrial625 612 13 2.1 8388(5)(5.7)
Retail choice customers2,201 1,995 206 10.3 1761443222.2 
Public authorities83 82 1 1.2 86233.3 
Other operating revenues (c)— — — —(2)(2)——
Total4,275 4,103 172 4.2 %(d)$522$483$398.1 %
(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. O&R’s electric sales in New Jersey are not subject to a decoupling mechanism, and as a result, changes in such volumes do impact revenues.
(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 2.4 percent in the nine months ended September 30, 2021 compared with the 2020 period. See “Coronavirus Disease 2019 (COVID-19) Impacts,” above.

Operating revenues increased $39 million in the nine months ended September 30, 2021 compared with the 2020 period primarily due to higher purchased power expenses ($30 million) and higher revenues from the New York electric rate plan ($7 million).

Purchased power expenses increased $30 million in the nine months ended September 30, 2021 compared with the 2020 period primarily due to higher unit costs ($28 million) and higher purchased volumes ($2 million).

Other operations and maintenance expenses increased $12 million in the nine months ended September 30, 2021 compared with the 2020 period primarily due to higher storm-related costs.

Depreciation and amortization increased $4 million in the nine months ended September 30, 2021 compared with the 2020 period primarily due to higher electric utility plant balances.

Taxes, other than income taxes increased $2 million in the nine months ended September 30, 2021 compared with the 2020 period primarily due to higher property taxes.

Gas
O&R’s results of gas operations for the nine months ended September 30, 2021 compared with the 2020 period were as follows:
78

  
For the Nine Months Ended
  
(Millions of Dollars)September 30, 2021September 30, 2020Variation
Operating revenues$177$164$13
Gas purchased for resale564313
Other operations and maintenance4751(4)
Depreciation and amortization1919—
Taxes, other than income taxes24231 
Gas operating income$31$28$3

O&R’s gas sales and deliveries, excluding off-system sales, for the nine months ended September 30, 2021 compared with the 2020 period were:
  
Thousands of Dt DeliveredRevenues in Millions (a)
  
For the Nine Months Ended
  
For the Nine Months Ended
  
DescriptionSeptember 30, 2021September 30, 2020VariationPercent
Variation		September 30, 2021September 30, 2020VariationPercent
Variation
Residential7,784 6,484 1,300 20.0 %$108$83$2530.1 %
General1,729 1,443 286 19.8 1914535.7 
Firm transportation5,514 5,799 (285)(4.9)4145(4)(8.9)
Total firm sales and transportation15,027 13,726 1,301 9.5 (b)1681422618.3 
Interruptible sales3,002 2,723 279 10.2 44— — 
Generation plants24 24 — — — — — — 
Other271 529 (258)(48.8)11— — 
Other gas revenues— — — —417(13)(76.5)
Total18,324 17,002 1,322 7.8 %$177$164$137.9 %
(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 0.6 percent in the nine months ended September 30, 2021 compared with 2020 period. See “Coronavirus Disease 2019 (COVID-19) Impacts,” above.

Operating revenues increased $13 million in the nine months ended September 30, 2021 compared with the 2020 period primarily due to an increase in gas purchased for resale ($13 million).

Gas purchased for resale increased $13 million in the nine months ended September 30, 2021 compared with the 2020 period primarily due to higher purchased volumes ($11 million) and higher unit costs ($3 million).

Other operations and maintenance expenses decreased $4 million in the nine months ended September 30, 2021 compared with the 2020 period primarily due to lower spending on gas programs ($2 million), lower pension costs ($1 million) and lower uncollectible accounts ($1 million).

Taxes, other than income taxes increased $1 million in the nine months ended September 30, 2021 compared with the 2020 period primarily due to higher property taxes.

Income Tax Expense
Income taxes decreased $2 million in the nine months ended September 30, 2021 compared with the 2020 period primarily due to lower income before income tax expense.


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Clean Energy Businesses
The Clean Energy Businesses’ results of operations for the nine months ended September 30, 2021 compared with the 2020 period were as follows:
  
For the Nine Months Ended
  
(Millions of Dollars)September 30, 2021September 30, 2020Variation
Operating revenues$779$566$213
Gas purchased for resale492425
Other operations and maintenance348165183
Depreciation and amortization172173(1)
Taxes, other than income taxes1416(2)
Operating income$196$188$8

Operating revenues increased $213 million in the nine months ended September 30, 2021 compared with the 2020 period primarily due to higher revenue from renewable electric production projects ($158 million), higher wholesale revenues ($43 million), higher energy services revenues ($34 million), offset in part by net mark-to-market values ($22 million).

Gas purchased for resale increased $25 million in the nine months ended September 30, 2021 compared with the 2020 period primarily due to higher purchased volumes.

Other operations and maintenance expenses increased $183 million in the nine months ended September 30, 2021 compared with the 2020 period primarily due to higher costs from engineering, procurement and construction of renewable electric projects for customers.

Net Interest Expense
Net interest expense decreased $139 million in the nine months ended September 30, 2021 compared with the 2020 period primarily due to higher unrealized gains on interest rate swaps in the 2021 period.

Income Tax Expense
Income taxes increased $80 million in the nine months ended September 30, 2021 compared with the 2020 period primarily due to higher income before income tax expense.expense ($30 million), lower income attributable to non-controlling interests ($38 million), higher state income taxes ($5 million) and the absence of a tax benefit in the 2021 period due to the change in the federal corporate income tax rate recognized for a loss carryback from the 2018 tax year to the 2013 tax year as allowed under the CARES Act that was signed into law during the first quarter of 2020 ($4 million).


Income (Loss) Attributable to Non-Controlling Interest
Income attributable to non-controlling interest decreased $152 million to a loss of $115 million in the nine months ended September 30, 2021 compared with the 2020 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
Net Interest Expense
Net interest expense decreased $6 million in the nine months ended September 30, 2021 compared with the 2020 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. See Note R to the Third Quarter Financial Statements.

Other Income (Deductions)
Other income (deductions) decreased $256 million from $78 million of other income to $178 million of other deductions in the nine months ended September 30, 2021 compared with the 2020 period primarily due to pre-tax impairment losses of $211 million related to Con Edison Transmission's investment in Stagecoach and CET Gas foregoing AFUDC income from MVP starting January 2021 until significant construction resumes. See "Investments" in Note A to the Third Quarter Financial Statements.

80

Income Tax Expense
Income taxes decreased $67 million in the nine months ended September 30, 2021 compared with the 2020 period primarily due to lower income before income tax expense ($53 million) and lower state income taxes ($16 million).

Other
For Con Edison, “Other” includes parent company and consolidation adjustments.Income Tax Expense

Income taxes increased $11 million in the nine months ended September 30, 2021 compared with the 2020 period primarily due to lower consolidated state income tax benefits.

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.


Changes in the

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The Companies’ cash, and temporary cash investments and restricted cash resulting from operating, investing and financing activities for the nine months ended September 30, 20172021 and 20162020 are summarized as follows:

For the Nine Months Ended September 30,
  CECONYO&RClean Energy BusinessesCon Edison
Transmission		Other (a)Con Edison (b)
(Millions of Dollars)202120202021202020212020202120202021202020212020
Operating activities$1,251$959$106$82$56$810$43$(8)$256$(475)$1,712$1,368
Investing activities
(2,782)(2,412)(157)(150)(106)(438)60816——(2,437)(2,984)
Financing activities482543395034(440)(651)(8)(400)568(496)713
Net change for the period(1,049)(910)(12)(18)(15)(68)— —(145)93(1,221)(903)
Balance at beginning of period1,0679333732187251— —14511,4361,217
Balance at end of period (c)$18$23$25$14$172$183$— $— $—$94$215$314
(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.

82
 For the Nine Months Ended September 30,
  Con EdisonCECONY
(Millions of Dollars)2017
2016Variation2017
2016
Variation
Operating activities$2,227$2,336$(109)$1,790$2,017$(227)
Investing activities(2,572)(3,717)1,145(2,197)(1,943)(254)
Financing activities(362)583(945)(278)(891)613
Net change for the period(707)(798)91(685)(817)132
Balance at beginning of period776944(168)702843(141)
Balance at end of period$69$146$(77)$17$26$(9)
Less: Change in cash balances held for sale—
(4)4—
—
—
Balance at end of period excluding held for sale$69$150$(81)$17$26$(9)


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Table of Contents

Cash Flows from Operating Activities
The Utilities’ cash flows from operating activities primarily reflect primarily their energy sales and deliveries and cost of operations. The volume of energy sales and deliveries is primarily affected primarily by factors external to the Utilities, such as growth of customer demand, weather, market prices for energy and economic conditions. Measures that promote distributed energy resources, such as distributed generation, demand reduction and energy efficiency, also affect the volume of energy sales and deliveries. In addition, the decline in business activity in the Utilities’ service territory due to the COVID-19 pandemic resulted and may continue to result in a slower recovery of cash from outstanding customer accounts receivable balances and increases to the allowance for uncollectible accounts, that may further result in increases to write-offs of customer accounts. Under the revenue decoupling mechanisms in the Utilities’ New York electric and gas rate plans, changes in delivery volumes from levels assumed when rates were approved may affect the timing of cash flows, but generallylargely not net income. The prices at which the Utilities provide energy to their customers are determined in accordance with their rate plans. However, increases in electric and gas commodity prices, coupled with the decline in business activity due to the COVID-19 pandemic, may further contribute to a slower recovery of cash from outstanding customer accounts receivable balances and increases to the allowance for uncollectible accounts, and may result in 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. The Utilities’ New York rate plans allow them to defer costs resulting from a change in legislation, regulation and related actions that have taken effect during the term of the rate plans once the costs exceed a specified threshold. Increases to the allowance for uncollectible accounts related to the COVID-19 pandemic have been deferred pursuant to the legislative, regulatory and related actions provisions of their rate plans. Pursuant to their rate plans, the Utilities have recovered from customers a portion of the tax liability they will pay in the future as a result of temporary differences between the book and tax basis of assets and liabilities. These temporary differences affect the timing of cash flows, but not net income, as the Companies are required to record deferred tax assets and liabilities at the current corporate tax rate for the temporary differences. For the Utilities, credits to their customers of the net benefits of the TCJA, including the reduction of the corporate tax rate to 21 percent, decrease cash flows from operating activities. See “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.

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, and amortizations of certain regulatory assets and liabilities.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. For Con Edison, net income for the nine months ended September 30, 2021 also included non-cash losses recognized with respect to an 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, 20172021 for Con Edison and CECONY were $109$344 million and $227$292 million lower,higher, respectively, than in the 20162020 period. The changechanges in net cash flows for Con Edison and CECONY reflects primarily higherreflect a change in pension and retiree benefit obligations ($56 million and $65 million, respectively), lower other receivables and other current assets ($113 million and $32 million, respectively), lower system benefit charge ($59 million and $56 million, respectively), change in pension and retiree benefit contributions ($7 million and $4 million, respectively), for Con Edison, lower cash paid for income taxes, in the 2017 period as compared with the 2016 period of $110 million and $226 million, respectively, net of refunds received. The income tax refund received ($40 million) and lower taxes receivable ($24 million), and for CECONY, a decrease in 2016 reflected the extension of bonus depreciation in late 2015, resulting in a refund of the 2015 estimated federal tax payments.accounts receivables from affiliated companies ($101 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 and recoverable and refundable energy costs within other regulatory assets and liabilities and accounts payable balances.

The changes in regulatory assets primarily reflect changes in deferred pension costs in accordance with the accounting rules for retirement benefits.


Cash Flows Used in Investing Activities
Net cash flows used in investing activities for Con Edison and CECONY were $1,145$547 million lower and $254$370 million higher, respectively, for the nine months ended September 30, 20172021 compared with the 20162020 period. The change for Con Edison primarily reflects primarily lower new investments in electric and gas transmission projectsproceeds from the substantial completion of the sale of Stagecoach ($1,011614 million) and renewable electric production projects ($240 million), and a decrease in non-utility construction expenditures at the Clean Energy Businesses($148125 million) and proceeds from the divestiture of renewable electric projects at the Clean Energy Businesses ($183 million), offset in part by lower proceeds from sale of assets ($216 million). The change for CECONY primarily reflects absence of proceeds from the transfer of assets to NY Transcoan increase in 2016 ($122 million) and increased utility construction expenditures at CECONY ($88345 million) and O&R ($6 million).




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Cash Flows from Financing Activities
Net cash flows from financing activities for Con Edison and CECONY were $945$1,209 million lower and $613$61 million higher,lower, respectively, in the nine months ended September 30, 20172021 compared with the 20162020 period.


In August 2017,June 2021, Con Edison issued 4.1 million10,100,000 shares of its common sharesstock resulting in net proceeds of $343approximately $775 million, after issuance expenses, thatexpenses. The net proceeds from the sale of the common shares were invested by Con Edison in its subsidiaries, principally CECONY, and the Clean Energy Businesses, for funding of theirits construction expenditures and for its other general corporate purposes. See Note C to the Third Quarter Financial Statements.


In May 2021, Con Edison redeemed at maturity $500 million of 2.00 percent 5-year debentures. See Note C to the Third Quarter Financial Statements.

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 July 2020, Con Edison borrowed $820 million pursuant to an April 2020 credit agreement that was amended in June 2020 (as amended, the Supplemental Credit Agreement). Con Edison used the proceeds from the borrowing for general corporate purposes, including repayment of short-term debt bearing interest at variable rates.

In January 2020, Con Edison issued 1,050,000 shares of its common stock for $88 million upon physical settlement of the remaining shares subject to its May 2019 forward sale agreement.

In June 2017,2021, CECONY redeemed at maturity $640 million of floating rate 3-year debentures. See Note C to the Third Quarter Financial Statements.

In June 2021, CECONY issued $500$750 million aggregate principal amount of 3.8752.40 percent debentures, due 2047,2031, the net proceeds from the sale of which were used to repay short-term borrowingsredeem at maturity its $640 million floating rate 3-year debentures and for other general corporate purposes.

In March 2017, Con EdisonJune 2021 CECONY also issued $400$750 million aggregate principal amount of 2.003.60 percent debentures, due 2020, and prepaid the June 2016 $400 million variable rate term loan that was to mature in 2018.

Also, in March 2017, a Con Edison Development subsidiary issued $97 million aggregate principal amount of 4.45 percent senior notes, due 2042, secured by the company’s Upton County Solar project.


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In June 2016, CECONY issued $550 million aggregate principal amount of 3.85 percent debentures, due 2046,2061, the net proceeds from the sale of which werewill be used to repaypay or reimburse the payment of, in whole or in part, existing and new qualifying eligible green expenditures, such as energy efficiency and clean transportation expenditures, that include those funded on or after January 1, 2021 until the maturity date of the debentures. Pending the allocation of the net proceeds to finance or refinance eligible green expenditures, CECONY used the net proceeds for repayment of short-term borrowingsdebt and for other general corporate purposes. temporarily placed the remaining net proceeds in short-term interest-bearing instruments. See Note C to the Third Quarter Financial Statements.

In September 2016,June 2020, CECONY redeemed at maturity $400$350 million of 5.504.45 percent 10-year debentures.


In June 2016, a Con Edison Solutions subsidiary borrowed $2 million pursuant to a loan agreement with a New Jersey utility. The borrowing matures in 2026, bears interest of 11.18 percent and may be repaid in cash or project Solar Renewable Energy Certificates.

In May 2016, Con EdisonMarch 2020, CECONY issued approximately 10 million common shares resulting in net proceeds, after issuance expenses, of $702 million and $500$600 million aggregate principal amount of 2.003.35 percent debentures, due 2021,2030 and $1,000 million aggregate principal amount of 3.95 percent debentures, due 2050, the net proceeds from the sale of which werewill be used to pay or reimburse the payment of, in connection withwhole or in part, existing and new qualifying eligible green expenditures, such as energy efficiency and clean transportation expenditures, that include those funded on or after January 1, 2018 until the acquisition by a CET Gas subsidiarymaturity date of a 50 percent equity interesteach series of the debentures. Pending the allocation of the net proceeds to finance or refinance eligible green expenditures, CECONY used the net proceeds for repayment of short-term debt and temporarily placed the remaining net proceeds in a gas pipeline and storage joint venture (see "Con Edison Transmission", above) and for general corporate purposes.short-term interest-bearing instruments.


In May 2016, a Con Edison Development subsidiary issued $95September 2021, O&R agreed to issue in December 2021 $45 million aggregate principal amount of 4.072.31 percent senior notes,debentures, due 2036, secured by the company's California Holdings 3 solar project.

In February 2016, a Con Edison Development subsidiary issued $2182031 and $30 million aggregate principal amount of 4.213.17 percent debentures, due 2051.

In September 2020, O&R issued $35 million aggregate principal amount of 2.02 percent debentures, due 2030 and $40 million aggregate principal amount of 3.24 percent debentures, due 2050.

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 2041,2046, secured by equity interests in CED Nevada Virginia, all of which had been issued at September 30, 2021. See Notes C and D to the company's Texas Solar 7Third Quarter Financial Statements.

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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 project.electric production projects, the interest rate for which was swapped to a fixed rate of 3.39 percent. See Note C to the Third Quarter Financial Statements.

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 production projects (CED Nevada Virginia). Under the financing, the tax equity investor acquired a noncontrolling interest in the portfolio and will receive a percentage of earnings, tax attributes and cash flows. As of September 30, 2021, the tax equity investor fully funded its $263 million financing obligation. The Clean Energy Businesses will continue to consolidate this entity and will report the noncontrolling tax equity investor’s interest in the tax equity arrangement. See Notes C and P to the Third Quarter Financial Statements.

Con Edison’s cash flows from financing for the nine months ended September 30, 20172021 and 20162020 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 $74$82 million and $77$79 million, respectively.


Cash flows used in financing activities of the Companies also reflect commercial paper issuances and repayments. The commercial paper amounts outstanding at September 30, 20172021 and 20162020 and the average daily balances for the nine months ended September 30, 20172021 and 20162020 for Con Edison and CECONY were as follows:

  
20212020
(Millions of Dollars, except Weighted Average Yield)Outstanding at September 30,Daily
average		Outstanding at September 30,Daily
average
Con Edison$1,036$1,294$1,009$1,027
CECONY$942$1,194$991$633
Weighted average yield0.1 %0.2 %0.2 %1.2 %

  
20172016
(Millions of Dollars, except Weighted Average Yield)Outstanding at September 30,
Daily
average
Outstanding at September 30,
Daily
average
Con Edison$356$645$601$813
CECONY$147$323$480$385
Weighted average yield1.31.10.70.6


Capital Requirements and Resources
During the third quarter of 2021, Con Edison has decreasedincreased its estimate for capital requirements in 2021 from $6,015 million to $6,065 million. The increase reflects additional investments by the Clean Energy Businesses. During the first quarter of 2021, Con Edison increased its estimates for capital requirements for 2021, 2022 and 2023 from $5,985 million to $6,015 million, $4,380 million to $4,644 million and $5,137 million to $5,385 million, respectively. The increase reflects additional investments for the retirementReliable Clean City (RCC) projects approved by the NYSPSC in April 2021. See “CECONY” – “Electric” – “Electric Supply,” above. The company plans to meet its capital requirements for 2021 through 2023, through internally-generated funds and the issuance of long-term debt and common equity. The company's plans include the issuance of between $1,900 million and $2,600 million of long-term debt, including for maturing securities, for 2018 from $1,688primarily at the Utilities, in 2021 and approximately $1,400 million in aggregate of long-term debt at the Utilities during 2022 and 2023. The planned debt issuance is in addition to $1,288 million.the issuance of long-term debt secured by the Clean Energy Businesses’ renewable electric production projects. The decrease reflectscompany's plans also include the $400issuance of up to $800 million prepayment of a variable rate term loan that wascommon equity in 2021 and approximately $700 million in aggregate of common equity during 2022 and 2023, in addition to mature in 2018.equity under its dividend reinvestment, employee stock purchase and long-term incentive plans. See Note C to the Third Quarter Financial Statements.Statements and “Liquidity and Capital Resources - Cash Flows from Financing Activities,” above.


For each of the Companies, the ratio of earnings to fixed charges (Securities and Exchange Commission (SEC) basis) for the nine months ended September 30, 2017 and 2016 and the twelve months ended December 31, 2016 was:
  
Ratio of Earnings to Fixed Charges
  
For the Nine Months Ended September 30, 2017For the Nine Months Ended September 30, 2016For the Twelve Months Ended December 31, 2016
Con Edison3.84.03.6
CECONY3.93.83.6



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Capital Resources
For each of the Companies, the common equity ratio at September 30, 20172021 and December 31, 20162020 was:

  
Common Equity Ratio
(Percent of total capitalization)
  
September 30, 2021December 31, 2020
Con Edison48.348.3
CECONY47.947.9



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Common Equity Ratio
(Percent of total capitalization)
  
September 30, 2017December 31, 2016
Con Edison50.849.3
CECONY50.949.5


Other Changes in Assets, Liabilities and LiabilitiesEquity
The following table shows changes in certainCompanies' assets, liabilities, and liabilitiesequity at September 30, 2017, compared with2021 and December 31, 2016.2020 are summarized as follows. 

  CECONYO&RClean Energy
 Businesses		Con Edison
Transmission		Other (a)Con Edison (b)
(Millions of Dollars)202120202021202020212020202120202021202020212020
ASSETS
Current assets
$4,349$4,407$306$277$510$485$8$42$(77)$90$5,096$5,301
Investments59754127267 — 4541,256(7)(7)1,0781,816
Net plant40,98539,5542,5502,4694,3964,5151717(1)—47,94746,555
Other noncurrent assets6,2476,4654614751,6911,84814334044028,8179,223
Total Assets$52,178$50,967$3,344$3,247$6,604$6,848$493$1,348$319$485$62,938$62,895
LIABILITIES AND SHAREHOLDERS' EQUITY
Current liabilities$4,127$5,247$420$356$990$1,330$92$111$(374)$310$5,255$7,354
Noncurrent liabilities14,19414,7221,1681,191121211(15)28(3)(58)15,46516,094
Long-term debt17,63716,1498938932,6642,776—5006476421,84120,382
Equity16,22014,8498638072,8292,5314167094916920,37719,065
Total Liabilities and Equity$52,178$50,967$3,344$3,247$6,604$6,848$493$1,348$319$485$62,938$62,895
(a) Includes parent company and consolidation adjustments.
 Con EdisonCECONY
(Millions of Dollars)
2017 vs. 2016
Variation
2017 vs. 2016
Variation
Assets  
Prepayments$433$398
Non-utility property, less accumulated depreciation204—
Regulatory asset - Unrecognized pension and other postretirement costs(248)(254)
Liabilities  
Pension and retiree benefits$(404)$(394)
Deferred income taxes and unamortized investment tax credits539610
System benefit charge194175
Prepayments
The increase in prepayments for(b) Represents the consolidated results of operations of Con Edison and its businesses.

CECONY
Current assets at September 30, 2021 were $58 million lower than at December 31, 2020. The change in current assets primarily reflects a decrease in cash and temporary cash investments ($1,049 million), primarily the portion allocabledue to the 2017 fourth quarter of CECONY's July 20172021 payment of its New York City semi-annual property taxes.

Non-Utility Property, Less Accumulated Depreciation
The decrease is offset in part by an increase in non-utilityprepayments reflecting primarily the July 2021 payment of New York City semi-annual property taxes, offset in part by three months of amortization, while the December 2020 balance reflects the amortization of the entire previous semi-annual payment ($555 million), an increase in accounts receivables, less allowance for uncollectible accounts ($221 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) and an increase in the fair value of short-term derivative assets ($213 million).

Investments at September 30, 2021 were $56 million higher than at December 31, 2020. The change in investments primarily reflects an increase in supplemental retirement income plan assets. See Note E to the Third Quarter Financial Statements.

Net plant at September 30, 2021 was $1,431 million higher than at December 31, 2020. The change in net plant primarily reflects an increase in electric ($1,040 million), gas ($983 million), steam ($77 million) and general ($192 million) plant balances, offset in part by an increase in accumulated depreciation for Con Edison($664 million) and a decrease in construction work in progress ($197 million).

Other noncurrent assets at September 30, 2021 were $218 million lower than at December 31, 2020. The change in other noncurrent assets primarily reflects the completion of construction of Con Edison Development's Upton County Solar renewable electric production project (see Con Edison Development, below).

Regulatory Asset for Unrecognized Pension and Other Postretirement Costs and Liability for Pension and Retiree Benefits
Thea decrease in the regulatory asset for unrecognized pension and other postretirement costs and the liability for pension and retiree benefits reflectsto reflect the final actuarial valuation, as measured at December 31, 2020, of the pension and other retiree benefit plans as measured at December 31, 2016, in accordance with the accounting rules for retirement benefits.benefits ($671 million). See Notes B, E and F to the Third Quarter Financial Statements. The change in the regulatory asset also reflects the year’syear's amortization of accounting costs. This decrease is offset in part by an increase in the regulatory assets for deferrals for increased costs related to the COVID-19 pandemic ($156 million), deferred pension and other postretirement benefits ($110 million), deferred storm costs ($72 million), revenue taxes ($27 million) and deferred derivative losses ($13 million). See “Other Regulatory Matters” in Note B and Note G to the Third Quarter Financial Statements. This decrease is also offset in part by an increase in the fair value of long-term derivative assets ($78 million).

Current liabilities at September 30, 2021 were $1,120 million lower than at December 31, 2020. The change in current liabilities primarily reflects decreases in notes payable ($718 million), long-term debt due within one year
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($640 million), accounts payable ($131 million), offset in part by an increase in the regulatory liability for deferred derivative gains ($416 million).

Noncurrent liabilities at September 30, 2021 were $528 million lower than at December 31, 2020. The change in noncurrent liabilities primarily reflects a decrease in the liability for pension and retiree benefits ($764 million) that primarily reflects in part contributions tothe final actuarial valuation, as measured at December 31, 2020, of the plans made byin accordance with the Utilities in 2017.accounting rules for retirement benefits. See Notes E and F to the Third Quarter Financial Statements.

Deferred Income Taxes and Unamortized Investment Tax Credits
The increasechange also reflects a decrease in the regulatory liability for future income tax ($166 million). These decreases are offset in part by a change in deferred income taxes and unamortized investment tax credits for Con Edison($359 million) that primarily reflects accelerated tax depreciation, repair deductions and CECONY reflects primarily bonus depreciation in 2017, partially offset by the increase in deferred income tax assets associated with the federal tax attribute carryforwards related to the net operating loss and general business tax credits.prepayment of New York City property taxes. See Note IJ to the Third Quarter Financial Statements.


System Benefit ChargeLong-term debt at September 30, 2021 was $1,488 million higher than at December 31, 2020. The change in long-term debt primarily reflects the June 2021 issuance of $1,500 million of debentures. See "Liquidity and Capital Resources - Cash Flows From Financing Activities" above and Note C to the Third Quarter Financial Statements.

Equity at September 30, 2021 was $1,371 million higher than at December 31, 2020. The change in equity primarily reflects capital contributions from parent ($1,101 million) in 2021 and net income for the nine months ended September 30, 2021 ($1,011 million), offset in part by common stock dividends to parent ($741 million) in 2021.

O&R
Current assets at September 30, 2021 were $29 million higher than at December 31, 2020. The change in current assets primarily reflects increases in other receivables, less allowance for uncollectible accounts ($11 million) and accounts receivables, less allowance for uncollectible accounts ($11 million).

Net plant at September 30, 2021 was $81 million higher than at December 31, 2020. The change in net plant primarily reflects an increase in electric ($91 million), gas ($39 million), and general ($19 million) plant balances, offset in part by an increase in accumulated depreciation ($55 million) and a decrease in construction work in progress ($13 million).

Other noncurrent assets at September 30, 2021 were $14 million lower than at December 31, 2020. The change in other noncurrent assets primarily reflects a decrease in the regulatory asset for unrecognized pension and other postretirement costs to reflect the final actuarial valuation, as measured at December 31, 2020, of the pension and other retiree benefit plans in accordance with the accounting rules for retirement benefits ($43 million). See Notes B, E and F to the Third Quarter Financial Statements. The change in the regulatory asset also reflects the year's amortization of accounting costs. This decrease is offset in part by an increase in the regulatory asset for deferred pension and other postretirement benefits ($13 million) and an increase in deferred storm costs ($10 million).
Current liabilities at September 30, 2021 were $64 million higher than at December 31, 2020. The change in current liabilities primarily reflects higher notes payable ($43 million), an increase in the regulatory liability for deferred derivative gains ($27 million), offset in part by lower accounts payables ($9 million).

Noncurrent liabilities at September 30, 2021 were $23 million lower than at December 31, 2020. The change in noncurrent liabilities primarily reflects a decrease in the liability for pension and retiree benefits ($69 million), offset in part by deferred income taxes and unamortized investment tax credits ($15 million), primarily due to accelerated tax depreciation and repair deductions, an increase in the systemregulatory liability for long-term deferred derivative gains ($8 million) and deferred other retiree benefit chargeplans rate ($4 million), and an increase in other deferred credits ($16 million).


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Equity at September 30, 2021 was $56 million higher than at December 31, 2020. The change in equity primarily reflects amounts collectednet income for the nine months ended September 30, 2021 ($53 million), capital contributions from parent ($35 million) in 2021 and an increase in other comprehensive income ($7 million) offset in part by common stock dividends to parent ($39 million) in 2021.

Clean Energy Businesses
Current assets at September 30, 2021 were $25 million higher than at December 31, 2020. The change in current assets primarily reflects an increase in accrued unbilled revenue ($74 million), offset in part by a decrease in restricted cash ($15 million) and a decrease in other currents assets ($35 million).

Investments at September 30, 2021 were $7 million higher than at December 31, 2020. The change in investments primarily reflects a tax equity investment.

Net plant at September 30, 2021 was $119 million lower than at December 31, 2020. The change in net plant primarily reflects the Utilitiesdivestiture of renewable electric projects. See Note R to the Third Quarter Financial Statements.

Other noncurrent assets at September 30, 2021 were $157 million lower than at December 31, 2020. The change in other noncurrent assets primarily reflects the divestiture of renewable electric projects. See Note R to the Third Quarter Financial Statements.

Current liabilities at September 30, 2021 were $340 million lower than at December 31, 2020. The change in current liabilities primarily reflects new borrowing offset in part by a decrease in borrowings under a term loan. See Note D to the Third Quarter Financial Statements.

Noncurrent liabilities at September 30, 2021 were $90 million lower than at December 31, 2020. The change in noncurrent liabilities primarily reflects the change in the fair value of derivative liabilities and the change in deferred taxes.

Long-term debt at September 30, 2021 was $112 million lower than at December 31, 2020. The change in long-term debt primarily reflects the repayment of an intercompany loan from their customersthe parent company ($375 million), offset in part by a net increase in project debt ($464 million). See Note C to the Third Quarter Financial Statements.

Equity at September 30, 2021 was $298 million higher than at December 31, 2020. The change in equity primarily reflects an increase in net income for the nine months ended September 30, 2021 ($223 million) and a noncontrolling tax equity interest ($122 million) (see Note P to the Third Quarter Financial Statements), offset in part by common stock dividends to parent ($48 million) in 2021.

Con Edison Transmission
Current assets at September 30, 2021 were $34 million lower than at December 31, 2020. The change in current assets primarily reflects the agreement between Crestwood and a subsidiary of CET Gas that will be requiredprovides for payments from Crestwood to bethe subsidiary of CET Gas for shortfalls in meeting certain earnings growth performance targets. Payments totaled $57 million ($19 million of which was paid in the first quarter 2021 and was recorded as a receivable by CET Gas in March 2020, and the remainder of which, plus interest was paid by Crestwood in July 2021). See "Con Edison Transmission - CET Gas," below.

Investments at September 30, 2021 were $802 million lower than at December 31, 2020. The decrease in investments primarily reflects the substantial completion of the sale of Stagecoach ($828 million), offset in part by additional investment in and income from NY Transco ($27 million). See "Investments" in Note A and Note R to the Third Quarter Financial Statements.

Other noncurrent assets were $19 million lower than at December 31, 2020. The change in noncurrent assets primarily reflects a reduction in accounts receivable due to the noncurrent portion of the $57 million payment from Crestwood described above.

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Current liabilities at September 30, 2021 were $19 million lower than at December 31, 2020. The change in current liabilities primarily reflects the repayment of short-term borrowings under an intercompany capital funding facility with a portion of the proceeds from the substantial completion of the sale of Stagecoach. See Note R to the Third Quarter Financial Statements.

Noncurrent liabilities at September 30, 2021 were $43 million lower than at December 31, 2020. The change in noncurrent liabilities reflects primarily a decrease in deferred income taxes and unamortized investment tax credits that reflects primarily timing differences associated with investments in partnerships and the tax loss on the substantial completion of the sale of Stagecoach. See "Investments" in Note A and Note R to the Third Quarter Financial Statements.

Long-term debt at September 30, 2021 was $500 million lower than at December 31, 2020. The change in long-term debt reflects the repayment of a $500 million intercompany loan from the parent company.

Equity at September 30, 2021 was $293 million lower than at December 31, 2020. The change in equity primarily reflects net loss for the nine months ended September 30, 2021 ($142 million) and a reduction to retained earnings due to a dividend paid to NYSERDA.CEI ($150 million).


Off-Balance Sheet Arrangements
NoneAt September 30, 2021, none of the Companies’ transactions, agreements or other contractual arrangements meetsmet the SEC definition of off-balance sheet arrangements.




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Regulatory Matters
In March 2017, the NYSPSC issued an order that changes the way distributed energy resources are compensated and begins to phase out net energy metering. In New York, net energy metering compensates kilowatt-hours exported to the electric distribution system at the full service rate (that is production plus delivery plus taxes and fees). To provide a gradual transition, the NYSPSC allowed all existing resources to keep their current rate treatment and will delay making significant changes to policies affecting new residential and small commercial rooftop solar until 2020. Larger installations, including new commercial and industrial projects and new community solar projects, will be paid for the value of their exports to the electricity distribution system. The new policy establishes a 2 percent limit on bill increases, reducing the shifting of avoided distribution costs to non-participating residential customers that would have occurred under net energy metering.

In October 2017, the Environmental Defense Fund and the Natural Resources Defense Council requested the NYSPSC to prohibit CECONY from recovering costs under the company’s 20-year transportation contract for 250,000 dekatherms per day of capacity on the Mountain Valley Pipeline unless CECONY demonstrates compliance with a public interest standard.

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


Environmental Matters
In May 2017,July 2021, a transformerfeeder failure at a CECONY substation dischargedled to the discharge of thousands of gallons of transformer oil intodielectric fluid from a street manhole in New Rochelle, New York. Dielectric fluid reached nearby streets, properties and the soil. Some of the transformer oil, which contained small amounts of polychlorinated biphenyls (PCBs), leaked into the East River. The company,New Rochelle Harbor. CECONY, the U.S. Coast Guard, the New York State Department of Environmental Conservation and other agencies responded to the incident. The company stopped the feeder leak on the same day that the discharge occurred and has replacedsubstantially completed the transformer,spill recovery operations. In coordination with federal and state regulators, CECONY is continuingevaluating certain shoreline areas for the potential presence of residual dielectric fluid and the extent to remediate and monitorwhich additional cleaning in such areas may be necessary. In addition, the site, thecompany has received third-party damage claims. The costs of whichassociated with this matter are not expected to have a material adverse effect on itsthe company’s financial condition, results of operations or liquidity. In connection with the incident, the company may incur monetary sanctions of more than $0.1$0.3 million for violations of certain provisions regulating the discharge of materials into, and for the protection of, the environment.

In June 2017, CECONY received a notice of potential liability from the U.S. Environmental Protection Agency (EPA) with respect to the Newtown Creek site that was listed in 2010 on the EPA’s National Priorities List of Superfund sites. The EPA has identified fourteen potentially responsible parties (PRPs) with respect to the site, including CECONY, and has indicated that it will notify the company as additional PRPs are identified and notified by the EPA. Newtown Creek and its tributaries (collectively, Newtown Creek) form a 3.8 mile border between Brooklyn and Queens, New York. Currently, the predominant land use around Newtown Creek includes industrial, petroleum, recycling, manufacturing and distribution facilities and warehouses. Other uses include trucking, concrete manufacture, transportation infrastructure and a wastewater treatment plant. Newtown Creek is near several residential neighborhoods. Six PRPs, not including CECONY, pursuant to an administrative settlement agreement and order on consent the EPA issued to them in 2011, have been performing a remedial investigation of the site. The EPA indicated that sampling events have shown the sediments in Newtown Creek to be contaminated with a wide variety of hazardous substances including PCBs, metals, pesticides, polycyclic aromatic hydrocarbons and volatile organic contaminants. The EPA also indicated that it has reason to believe that hazardous substances have come to be released from CECONY facilities into Newtown Creek. The EPA’s current schedule anticipates completion of a feasibility study for the site by late 2018 and issuance of its record of decision selecting a remedy for the site by late 2020. CECONY is unable to estimate its exposure to liability for the Newtown Creek site.

In the fourth quarter of 2016, CECONY and another utility responded to a reported dielectric fluid leak at a New Jersey marina on the Hudson River associated with one or two underwater transmission lines, the New Jersey portion of which is owned and operated by the other utility and the New York portion of which is owned and operated by CECONY. During the third quarter of 2017, after the marina owner had cleared substantial debris from its collapsed pier, a dielectric fluid leak was found and repaired on one of the underwater transmission lines. In the fourth quarter of 2017, it is anticipated that sediment regrading will be completed in underwater areas of the marina that had been disturbed during the leak search and repair efforts. Monitoring also will be conducted to evaluate whether any further action is necessary. CECONY expects that, consistent with the cost allocation provisions of their prior arrangements for the transmission lines, the costs to respond to the incident and repair the line, net of any recovery from the marina owner, will be shared by CECONY and the other utility. At September 30, 2017, the response and repair costs amounted to approximately $27 million, including those costs incurred by CECONY and those costs which the company has been notified have been incurred by the other utility and the U.S. Coast Guard.


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CECONY does not expect that its ultimate share of the costs to respond to the discharge and repair the transmission line will have a material adverse effect on its financial condition, results of operation or liquidity.


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



Con Edison Development89

Clean Energy Businesses
The following table provides information about the Clean Energy Businesses' renewable electric production projects Con Edison Development ownedthat are in operation and/or in construction at September 30, 2017:2021:
 
Project NameGenerating
Capacity
(MW AC)		Power Purchase Agreement (PPA) Term (In Years) (a)Actual/Expected
In-Service Date (b)		StatePPA Counterparty (c)
Utility Scale
Solar
 PJM assets73(d)2011/2013New Jersey/PennsylvaniaVarious
 New England assets24Various2011/2017Massachusetts/Rhode IslandVarious
 California Solar (e)110252012/2013CaliforniaPG&E
 Mesquite Solar 1 (e)165202013ArizonaPG&E
 Copper Mountain Solar 2 (e)150252013/2015NevadaPG&E
 Copper Mountain Solar 3 (e)255202014/2015NevadaSCPPA
 California Solar 2 (e)80202014/2016CaliforniaSCE/PG&E
 Texas Solar 4 (e)40252014TexasCity of San Antonio
 Texas Solar 5 (e)100252015TexasCity of San Antonio
 Texas Solar 7 (e)112252016TexasCity of San Antonio
 California Solar 3 (e)110202016/2017CaliforniaSCE/PG&E
 Upton Solar (e)158252017TexasCity of Austin
 California Solar 4 (e)240202017/2018CaliforniaSCE
 Copper Mountain Solar 1 (e)58122018NevadaPG&E
 Copper Mountain Solar 4 (e) (f)94202018NevadaSCE
 Mesquite Solar 2 (e) (f)100182018ArizonaSCE
 Mesquite Solar 3 (e) (f)150232018ArizonaWAPA (U.S. Navy)
 Great Valley Solar (e) (f)200172018CaliforniaMCE/SMUD/PG&E/SCE
 Water Strider Solar (e) (f) (g)80202021VirginiaVEPCO
Battle Mountain Solar/Battery Energy Storage System (e) (f) (g)101252021NevadaSPP
 Copper Mountain Solar 5 (e) (f) (g)250252021NevadaNPC
 Other26VariousVariousVariousVarious
Total Solar2,676
Wind
 Broken Bow II (e)75252014NebraskaNPPD
 Wind Holdings (e)180VariousVariousSouth Dakota/ MontanaNWE/Basin Electric
 Adams Rose Wind (e)2372016MinnesotaDairyland
 Other34VariousVariousVariousVarious
Total Wind312
Total MW (AC) in Operation2,988
Total MW (AC) in Construction16
Total MW (AC) Utility Scale3,004
Behind the Meter
Total MW (AC) in Operation62
Total MW (AC) in Construction10
Total MW Behind the Meter72
Project Name
Production
Technology
Generating
Capacity (a)
(MW AC)
Purchased Power Agreement (PPA)Term (In Years) (b)
Actual/Expected
In-Service Date (c)
Location
(State)
Wholly owned projects




PilesgroveSolar18(d)2011New Jersey
Flemington SolarSolar8(d)2011New Jersey
Frenchtown I, II and IIISolar14(d)2011-13New Jersey
PA SolarSolar10 2012Pennsylvania
California Solar 2 (e)Solar80202014-16California
Oak Tree WindWind20202014South Dakota
Texas Solar 3Solar6252015Texas
Texas Solar 5 (e)Solar95252015Texas
Campbell County WindWind95302015South Dakota
Texas Solar 7 (e)Solar106252016Texas
California Solar 3 (e)Solar110202016California
Adams Wind (e)Wind2372016Minnesota
Valley View (e)Wind10142016Minnesota
Coram (e)Wind102162016California
Upton County Solar (e)Solar158252017Texas
Projects of less than 5 MWSolar / Wind25VariousVariousVarious
Jointly owned projects (e) (f)




California SolarSolar55252012-13California
Mesquite Solar 1Solar83202013Arizona
Copper Mountain Solar 2Solar75252013-15Nevada
Copper Mountain Solar 3Solar128202014-15Nevada
Broken Bow IIWind38252014Nebraska
Texas Solar 4Solar32252014Texas
Total MW (AC) in Operation
1,291


Panoche ValleySolar240202018California
Total MW (AC) in Construction
240


Total MW (AC), All Projects
1,531


(a) Represents Con Edison Development’s ownership interest in the project.
(b) Represents PPA contractual term or remaining term from Con Edison Development’sthe date of acquisition.
(c) (b)Represents Actual/Expected In-Service Date or Con Edison Development's date of acquisition.
(c)PPA Counterparties include: Pacific Gas and Electric Company (PG&E), Southern California Public Power Authority (SCPPA), Southern California Edison Company (SCE), Western Area Power Administration (WAPA), Marin Clean Energy (MCE), Sacramento Municipal Utility District (SMUD), Nebraska Public Power District (NPPD), NorthWestern Energy (NWE), Virginia Electric Power Company (VEPCO), Sierra Pacific Power (SPP), and Nevada Power Company (NPC).
(d) Have Solar Renewable Energy Creditrenewable energy credit hedges are in place, in lieu of PPAs, out to 2020.through 2025.
(e)Project has been pledged to secure financingas security for the project.project debt financing.
(f) All of the jointly-owned projectsProjects are 50 percent owned, except for Texas Solar 4 (which is 80 percent owned). financed with tax equity. See Note MP to the Third
Quarter Financial Statements.

(g)Battle Mountain, Water Strider, and Copper Mountain 5 are a portfolio of three solar electric production projects referred to as CED Nevada Virginia. See Notes C, D and P to the Third Quarter Financial Statements.
Con Edison Development's renewable
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Renewable Electric Generation
Renewable electric production volumes generatedfrom utility scale assets for the three and nine months ended September 30, 20172021 compared with the 20162020 period were:

  Millions of kWh
  For the Three Months EndedFor the Nine Months Ended
DescriptionSeptember 30, 2021September 30, 2020VariationPercent VariationSeptember 30, 2021September 30, 2020VariationPercent Variation
Renewable electric production projects
Solar1,9321,66726515.9%4,9984,6063928.5%
Wind257303(46)(15.2)%9781,042(64)(6.1%)
Total2,1891,97021911.1%5,9765,6483285.8%


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TableCon Edison Transmission
CET Gas
CET Gas entered into a purchase and sale agreementpursuant to which CET Gas and Crestwood agreed to sell their combined interests in Stagecoach to a subsidiary of Kinder Morgan Inc. for a total of $1,225 million, subject to certain adjustments, of which $612.5 million will be Con Edison's portion for its 50 percent interest, subject to closing adjustments. The purchase and sale agreement contemplates a two-stage closing, the first of which was completed in July 2021 for a sale price of $1,195 million, of which $614 million, including working capital, was attributed to CET Gas. The second closing for the remaining $30 million, of which $15 million will be attributed to CET Gas, subject to closing adjustments, is to occur following approval by the NYSPSC, which is expected later this year or during the first quarter of 2022, subject to customary closing conditions. See Note R to the Third Quarter Financial Statements.


As a result of information made available to Stagecoach as part of the sale process, Stagecoach performed impairment tests that resulted in Stagecoach recording impairment charges of $414 million for the nine months ended September 30, 2021. Accordingly, Con Edison recorded pre-tax impairment losses on its 50 percent interest in Stagecoach of $211 million ($147 million after-tax), including working capital and transaction cost adjustments, within "Investment income/(loss)" on Con Edison's consolidated income statement for the nine months ended September 30, 2021. These charges reduced the carrying value of Con Edison’s investment in Stagecoach to $630 million at June 30, 2021. See "Investments" in Note A to the Third Quarter Financial Statements.
  Millions of kWh Generated
  For the Three Months EndedFor the Nine Months Ended
DescriptionSeptember 30, 2017
September 30, 2016
Variation
Percent Variation
September 30, 2017September 30, 2016VariationPercent Variation
Renewable electric production projects        
Solar668
458
210
45.9%1,6791,21546438.2%
Wind217
137
80
58.4%73446427058.2%
Total885
595
290
48.7%2,4131,67973443.7%


In May 2021, the operator of the Mountain Valley Pipeline, which is being constructed by a joint venture in which CET Gas owns a 10.6 percent interest (that is expected to be reduced to 8.5 percent based on the current project cost estimate and CET Gas’ previous capping of its cash contributions to the joint venture) indicated that, subject to receipt of certain authorizations and resolution of certain challenges, it is now targeting an in-service date for the project of summer 2022 at an overall project cost of approximately $6,200 million excluding allowance for funds used during construction. For the year ended December 31, 2020, CET Gas recorded a pre-tax impairment loss of $320 million ($223 million after-tax) that reduced the carrying value of its investment in Mountain Valley Pipeline LLC from $662 million to $342 million. At September 30, 2021, CET Gas’ cash contributions to the joint venture amounted to $530 million.

CET Gas and CECONY own 71.2 percent and 28.8 percent interests, respectively, in Honeoye, which operates a gas storage facility in upstate New York. CET Gas and CECONY are in the process of considering strategic alternatives regarding their interests in Honeoye. At September 30, 2021, the consolidated carrying value of CET Gas’ and CECONY’s investments in Honeoye was $25 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 credit risk and investment risk.


Interest Rate Risk
The Companies’ interest rate risk relates primarily to variable rate debt andrelates to new debt financing needed to fund capital requirements, including the construction expenditures of the Utilities and maturing debt securities.securities, and variable-rate debt. Con

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Edison and its businessessubsidiaries 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, 2017,2021, a 10 percent increase in interest rates applicable to its variable rate debt would result in an immaterial increase in annual interest expense of $2 million.expense. Under CECONY’s current electric, gas and steam rate plans, variations in actual variable rate tax-exempt debt interest expense, including costs associated with the refinancing of the variable-rate tax-exempt debt, are reconciled to levels reflected in rates.


Commodity Price Risk
Con Edison’s commodity price risk primarily relates primarily 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 KN to the Third Quarter Financial Statements.


Con Edison estimates that, as of September 30, 2017,2021, a 10 percent decline in market prices would result in a decline in fair value of $66$149 million for the derivative instruments used by the Utilities to hedge purchases of electricity and gas, of which $60$139 million is for CECONY and $6$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. In accordance with provisions approved by state regulators, the Utilities generally recover from customers the costs they incur for energy purchased for their customers, including gains and losses on certain derivative instruments used to hedge energy purchased and related costs. 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.


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, and 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, 20172021 and the year ended December 31, 2016,2020, respectively, was as follows:

95% Confidence Level, One-Day Holding PeriodSeptember 30, 2021December 31, 2020
(Millions of Dollars)
Average for the period$— $— 
High2 — 
Low— — 

95% Confidence Level, One-Day Holding PeriodSeptember 30, 2017
December 31, 2016
 (Millions of Dollars)
Average for the period
$—
$2
High14
Low—
1



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Credit Risk
The Companies are exposed to credit risk related to transactions entered into primarily for the various energy supply and hedging activities by the Utilities and the Clean Energy Businesses. See the discussion of credit exposure in Note K to the Third Quarter Financial Statements.

Investment Risk
The Companies’ investment risk relates to the investment of plan assets for their pension and other postretirement benefit plans andplans. Con Edison's investment risk also relates to the investments of the Clean Energy Businesses and 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 5345 to 6355 percent equitiesequity securities, 33 to 43 percent debt securities and 3510 to 4914 percent fixed income and other securities.real estate. At September 30, 2017,2021, the pension plan investments consisted of 5850 percent equity securities, 39 percent debt securities and 4211 percent fixed income and other securities.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. Generally, O&R also defers such difference pursuant to its New York rate plans.


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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 Third Quarter Financial Statements.



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Item 3: Quantitative and Qualitative Disclosures About Market Risk
For information about the Companies’ primary market risks associated with activities in derivative financial instruments, other financial instruments and derivative commodity instruments, see “Financial and Commodity Market Risks,” in Part I, Item 2 of this report, which information is incorporated herein by reference.


Item 4: Controls and Procedures
The Companies maintain disclosure controls and procedures designed to provide reasonable assurance that the information required to be disclosed in the reports that they submit to the Securities and Exchange Commission (SEC) is recorded, processed, summarized and reported within the time periods specified in the rules and forms of the SEC. Disclosure controls and procedures include, without limitation, controls and procedures designed to ensure that information required to be disclosed by an issuer in the reports that it files or submits under the Securities Exchange Act of 1934, as amended, is accumulated and communicated to the issuer’s management, including its principal executive and principal financial officers, or persons performing similar functions, as appropriate to allow timely decisions regarding required disclosure. For each of the Companies, its management, with the participation of its principal executive officer and principal financial officer, has evaluated its disclosure controls and procedures as of the end of the period covered by this report and, based on such evaluation, has concluded that the controls and procedures are effective to provide such reasonable assurance. Reasonable assurance is not absolute assurance, however, and there can be no assurance that any design of controls or procedures would be effective under all potential future conditions, regardless of how remote.
There was no change in the Companies’ internal control over financial reporting that occurred during the Companies’ most recent fiscal quarter that has materially affected, or is reasonably likely to materially affect, the Companies’ internal control over financial reporting.
 


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Part II Other Information


 
Item 1: Legal Proceedings
For information about certain legal proceedings affecting the Companies, see "Other Regulatory Matters" in Note B and Notes G and H to the financial statements in Part I, Item 1 of this report and "Environmental Matters" in Part I, Item 2 of this report, which information is incorporated herein by reference.


Item 1A: Risk Factors
There were no material changes in the Companies’ risk factors compared to those disclosed in Item 1A of the Form 10-K.

Item 6: Exhibits
Con Edison
Exhibit 10.1.1
Amendment to the Consolidated Edison Retirement Plan.
Exhibit 10.1.2
Amendment to the Consolidated Edison Retirement Plan.
Exhibit 12.1
Statement of computation of Con Edison’s ratio of earnings to fixed charges for the nine-month periods ended September 30, 2017 and 2016, and the 12-month period ended December 31, 2016.
Exhibit 31.1.1
Exhibit 31.1.2
Exhibit 32.1.1
Exhibit 32.1.2
Exhibit 101.INSXBRL Instance Document.Document - the instance document does not appear in the Interactive Data File because its XBRL tags are embedded within the Inline XBRL document.
Exhibit 101.SCHXBRL Taxonomy Extension Schema.
Exhibit 101.CALXBRL Taxonomy Extension Calculation Linkbase.
Exhibit 101.DEFXBRL Taxonomy Extension Definition Linkbase.
Exhibit 101.LABXBRL Taxonomy Extension Label Linkbase.
Exhibit 101.PREXBRL Taxonomy Extension Presentation Linkbase.
Exhibit 104Cover Page Interactive Data File - the cover page XBRL tags are embedded within the Inline XBRL document.
 


CECONY
Exhibit 10.2.1
CECONY Supplemental Medical Benefits.
Exhibit 12.2
Statement of computation of CECONY’s ratio of earnings to fixed charges for the nine-month periods ended September 30, 2017 and 2016, and the 12-month period ended December 31, 2016.
Exhibit 31.2.1
Exhibit 31.2.2
Exhibit 32.2.1
Exhibit 32.2.2
Exhibit 101.INSXBRL Instance Document.Document - the instance document does not appear in the Interactive Data File because its XBRL tags are embedded within the Inline XBRL document.
Exhibit 101.SCHXBRL Taxonomy Extension Schema.
Exhibit 101.CALXBRL Taxonomy Extension Calculation Linkbase.
Exhibit 101.DEFXBRL Taxonomy Extension Definition Linkbase.
Exhibit 101.LABXBRL Taxonomy Extension Label Linkbase.
Exhibit 101.PREXBRL Taxonomy Extension Presentation Linkbase.
Exhibit 104Cover Page Interactive Data File - the cover page XBRL tags are embedded within the Inline XBRL document.
Pursuant to Item 601(b)(4)(iii)(A) of Regulation S-K, instruments defining the rights of holders of long-term debt of Con Edison’s subsidiaries other than CECONY, the total amount of which does not exceed ten percent of the total assets of Con Edison and its subsidiaries on a consolidated basis, are not filed as exhibits to Con Edison’s Form 10-K or Form 10-Q. Con Edison agrees to furnish to the SEC upon request a copy of any such instrument.
 



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Signatures
Pursuant to the requirements of the Securities Exchange Act of 1934, each Registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.
 
Consolidated Edison, Inc.
Consolidated Edison Company of New York, Inc.
Date: November 2, 20174, 2021By /s/ Robert Hoglund
Robert Hoglund

Senior Vice President, Chief

Financial Officer and Duly

Authorized Officer
 




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