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, the MD&A in Item 7 of the Companies’ combined Annual Report on Form 10-K for the year ended
December 31, 2016
(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, 2017 and June 30, 2017 (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.
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 energy infrastructure projects and provide energy-related products and services to wholesale and retail customers. Con Edison Transmission invests in electric transmission facilities and gas pipeline and storage facilities.
Con Edison seeks to provide shareholder value through continued dividend growth, supported by earnings growth in regulated utilities and contracted assets. The company invests to provide reliable, resilient, safe and clean energy critical for New York City’s growing economy. The company is an industry leading owner and operator of contracted, large-scale solar generation in the United States. Con Edison is a responsible neighbor, helping the communities it serves become more sustainable.
CECONY
Electric
CECONY provides electric service to approximately 3.4 million customers in all of New York City (except a part of Queens) and most of Westchester County, an approximately 660 square mile service area with a population of more than nine million.
During the summer of 2017, electric peak demand in CECONY's service area was 12,321 MW (which occurred on July 20, 2017). At design conditions, electric peak demand in the company's service area would have been approximately 13,270 MW in 2017 compared to the company's forecast of 13,470 MW. The company's five-year forecast of average annual growth of the electric peak demand in its service area at design conditions is approximately 0.1 percent for 2018 to 2022 (as compared to approximately 0.2 percent for 2017 to 2021).
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 company decreased its five-year forecast of average annual growth of the peak gas demand in its service area at design conditions from approximately 2.3 percent (for 2017 to 2021) to 1.6 percent (for 2018 to 2022). The decrease reflects, among other things, that
in rolling the forecast forward a year, another year of oil-to-gas conversions has been completed and fewer opportunities to convert remain
.
Steam
CECONY operates the largest steam distribution system in the United States by producing and delivering approximately 19,500 MMlb of steam annually to approximately 1,640 customers in parts of Manhattan.
O&R
Electric
O&R and its utility subsidiary, Rockland Electric Company (RECO) (together referred to herein as O&R) provide electric service to approximately 0.3 million customers in southeastern New York and northern New Jersey, an approximately 1,300 square mile service area.
During the summer of 2017, electric peak demand in O&R's service area was 1,410 MW (which occurred on June 13, 2017). At design conditions, electric peak demand in the company's service area would have been approximately 1,615 MW in 2017 compared to the company's forecast of 1,625 MW. The company’s five-year forecast of average annual growth of the electric peak demand in its service area at design conditions is flat for 2018 to 2022 (as compared to approximately (0.1) percent for 2017 to 2021).
Gas
O&R delivers gas to over 0.1 million customers in southeastern New York.
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 these 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 Clean Energy Businesses 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.
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.
Con Edison Transmission
Con Edison Transmission, Inc. invests in electric and gas 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 proposing to build additional electric transmission assets in New York. CET Gas owns, through subsidiaries, a 50 percent interest in Stagecoach Gas Services, LLC, a joint venture that owns, operates and will further develop an existing gas pipeline and storage business located in northern Pennsylvania and southern New York. Also, CET Gas and CECONY own 71.2 percent and 28.8 percent interests, respectively, in Honeoye Storage Corporation which operates a gas storage business in upstate New York. In addition, CET Gas owns a 12.5 percent interest in Mountain Valley Pipeline LLC, a joint venture developing a proposed 300 mile gas transmission project in West Virginia and Virginia (Mountain Valley Pipeline). 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, 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 Income
|
Assets
|
CECONY
|
$2,799
|
87
|
%
|
$401
|
88
|
%
|
$7,948
|
88
|
%
|
$883
|
87
|
%
|
$41,647
|
85
|
%
|
O&R
|
234
|
7
|
|
22
|
5
|
|
667
|
7
|
|
53
|
5
|
|
2,832
|
6
|
|
Total Utilities
|
3,033
|
94
|
|
423
|
93
|
|
8,615
|
95
|
|
936
|
92
|
|
44,479
|
91
|
|
Clean Energy Businesses (a)
|
177
|
6
|
|
26
|
5
|
|
460
|
5
|
|
54
|
5
|
|
2,811
|
6
|
|
Con Edison Transmission
|
1
|
—
|
|
9
|
2
|
|
1
|
—
|
|
25
|
2
|
|
1,210
|
2
|
|
Other (b)
|
—
|
|
—
|
|
(1)
|
—
|
|
(4)
|
—
|
|
5
|
1
|
|
746
|
1
|
|
Total Con Edison
|
$3,211
|
100
|
%
|
$457
|
100
|
%
|
$9,072
|
100
|
%
|
$1,020
|
100
|
%
|
$49,246
|
100
|
%
|
|
|
(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.
|
Results of Operations
Net income and earnings per share for the
three and nine
months ended
September 30, 2017
and
2016
were as follows:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
For the Three Months Ended September 30,
|
For the Nine Months Ended September 30,
|
|
2017
|
2016
|
2017
|
|
2016
|
|
2017
|
2016
|
2017
|
|
2016
|
|
(Millions of Dollars, except per share amounts)
|
Net Income
|
Earnings
per Share
|
Net Income
|
Earnings
per Share
|
CECONY
|
$401
|
$388
|
|
$1.30
|
|
|
$1.27
|
|
$883
|
$859
|
|
$2.88
|
|
|
$2.87
|
|
O&R
|
22
|
27
|
0.07
|
|
0.09
|
|
53
|
55
|
0.18
|
|
0.18
|
|
Clean Energy Businesses (a)
|
26
|
78
|
0.08
|
|
0.26
|
|
54
|
120
|
0.18
|
|
0.40
|
|
Con Edison Transmission
|
9
|
10
|
0.03
|
|
0.03
|
|
25
|
11
|
0.08
|
|
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.
|
|
|
(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 for the
three and nine
months ended
September 30, 2017
, as compared with the
2016
periods, reflect changes in rate plans and regulatory charges and the impact of weather on steam revenues. The new electric rate plan of CECONY includes changes in the timing of recognition of annual revenues between quarters. Operations and maintenance expenses for CECONY 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 per share and net income for the
three and nine
months ended
September 30, 2017
period as compared with
2016
period, resulting from these and other major factors:
|
|
|
|
|
|
|
|
|
|
Three Months Variation
|
Nine 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)
|
0.01
|
4
|
Other operations and maintenance expenses (c)
|
0.07
|
22
|
0.24
|
73
|
Depreciation, property taxes and other tax matters (d)
|
(0.10)
|
(30)
|
(0.36)
|
(108)
|
Other (e)
|
(0.06)
|
(13)
|
(0.17)
|
(32)
|
Total CECONY
|
0.03
|
13
|
0.01
|
24
|
O&R (a)
|
|
|
|
|
Changes in rate plans and regulatory charges
|
—
|
|
1
|
0.04
|
12
|
Other operations and maintenance expenses (f)
|
(0.01)
|
(2)
|
(0.03)
|
(9)
|
Depreciation and property taxes
|
(0.01)
|
(4)
|
(0.02)
|
(6)
|
Other (e)
|
—
|
|
—
|
|
0.01
|
1
|
Total O&R
|
(0.02)
|
(5)
|
—
|
|
(2)
|
Clean Energy Businesses
|
|
|
|
|
Operating revenues less energy costs (g)
|
0.10
|
32
|
0.10
|
31
|
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)
|
0.04
|
14
|
Other, including parent company expenses (e) (k)
|
0.02
|
5
|
0.03
|
11
|
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.
|
|
|
(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.
|
The Companies’ other operations and maintenance expenses for the
three and nine
months ended
September 30, 2017
and
2016
were as follows:
|
|
|
|
|
|
|
For the Three Months Ended September 30,
|
For the Nine Months Ended September 30,
|
(Millions of Dollars)
|
2017
|
2016
|
2017
|
2016
|
CECONY
|
|
|
|
|
Operations
|
$386
|
$381
|
$1,147
|
$1,109
|
Pensions and other postretirement benefits
|
51
|
87
|
152
|
261
|
Health care and other benefits
|
45
|
47
|
127
|
124
|
Regulatory fees and assessments (a)
|
142
|
135
|
355
|
361
|
Other
|
67
|
74
|
211
|
250
|
Total CECONY
|
691
|
724
|
1,992
|
2,105
|
O&R
|
80
|
77
|
236
|
220
|
Clean Energy Businesses
|
79
|
40
|
174
|
124
|
Con Edison Transmission
|
3
|
1
|
7
|
1
|
Other (b)
|
(1)
|
(2)
|
(3)
|
(3)
|
Total other operations and maintenance expenses
|
$852
|
$840
|
$2,406
|
$2,447
|
|
|
(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, 2017
and
2016
follows. For additional business segment financial information, see
Note J
to the
Third
Quarter Financial Statements.
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:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
CECONY
|
O&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
|
$(29)
|
(1.0
|
)%
|
$(6)
|
(2.5
|
)%
|
$(173)
|
(49.4
|
)%
|
$1
|
—
|
%
|
$1
|
Large
|
|
$(206)
|
(6.0
|
)%
|
Purchased power
|
(95)
|
(19.2
|
)
|
(9)
|
(13.0
|
)
|
(234)
|
Large
|
|
—
|
|
—
|
|
—
|
|
—
|
|
(338)
|
(42.4
|
)
|
Fuel
|
1
|
3.4
|
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
1
|
3.4
|
|
Gas purchased for resale
|
24
|
70.6
|
|
2
|
25.0
|
|
8
|
20.5
|
|
—
|
|
—
|
|
—
|
|
—
|
|
34
|
42.0
|
|
Other operations and maintenance
|
(33)
|
(4.6
|
)
|
3
|
3.9
|
|
39
|
97.5
|
|
2
|
Large
|
|
1
|
(50.0
|
)
|
12
|
1.4
|
|
Depreciation and amortization
|
22
|
7.9
|
|
1
|
5.9
|
|
8
|
72.7
|
|
—
|
|
—
|
|
1
|
Large
|
|
32
|
10.5
|
|
Taxes, other than income taxes
|
18
|
3.6
|
|
—
|
|
—
|
|
(2)
|
(40.0
|
)
|
—
|
|
—
|
|
—
|
|
—
|
|
16
|
3.0
|
|
Gain on sale of retail electric supply business (2016)
|
—
|
|
—
|
|
—
|
|
—
|
|
(104)
|
Large
|
|
—
|
|
—
|
|
—
|
|
—
|
|
(104)
|
Large
|
|
Operating income
|
34
|
4.4
|
|
(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
|
)
|
1
|
5.0
|
|
1
|
Large
|
|
(10)
|
(20.4
|
)
|
Net interest expense
|
3
|
1.9
|
|
—
|
|
—
|
|
5
|
71.4
|
|
1
|
33.3
|
|
(2)
|
(40.0
|
)
|
7
|
3.9
|
|
Income before income tax expense
|
29
|
4.7
|
|
(4)
|
(10.0
|
)
|
(110)
|
(75.9
|
)
|
(1)
|
(6.3
|
)
|
2
|
50.0
|
|
(84)
|
(10.4
|
)
|
Income tax expense
|
16
|
7.1
|
|
1
|
7.7
|
|
(58)
|
(86.6
|
)
|
—
|
|
—
|
|
(3)
|
Large
|
|
(44)
|
(14.0
|
)
|
Net income
|
$13
|
3.4
|
%
|
$(5)
|
(18.5
|
)%
|
$(52)
|
(66.7
|
)%
|
$(1)
|
(10.0
|
)%
|
$5
|
83.3
|
%
|
$(40)
|
(8.0
|
)%
|
|
|
(a)
|
Includes parent company and consolidation adjustments.
|
|
|
(b)
|
Represents the consolidated results of operations of Con Edison and its businesses.
|
CECONY
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
For the Three Months Ended
September 30, 2017
|
|
For the Three Months Ended
September 30, 2016
|
|
|
(Millions of Dollars)
|
Electric
|
|
Gas
|
|
Steam
|
|
2017 Total
|
Electric
|
|
Gas
|
|
Steam
|
|
2016 Total
|
2017-2016
Variation
|
Operating revenues
|
$2,469
|
$268
|
$62
|
$2,799
|
$2,557
|
$208
|
$63
|
$2,828
|
$(29)
|
Purchased power
|
393
|
—
|
|
7
|
400
|
486
|
—
|
|
9
|
495
|
(95)
|
Fuel
|
24
|
—
|
|
6
|
30
|
21
|
—
|
|
8
|
29
|
1
|
Gas purchased for resale
|
—
|
|
58
|
—
|
|
58
|
—
|
|
34
|
—
|
|
34
|
24
|
Other operations and maintenance
|
547
|
104
|
40
|
691
|
578
|
102
|
44
|
724
|
(33)
|
Depreciation and amortization
|
232
|
47
|
21
|
300
|
217
|
41
|
20
|
278
|
22
|
Taxes, other than income taxes
|
418
|
71
|
31
|
520
|
414
|
59
|
29
|
502
|
18
|
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, 2017
compared with the
2016
period is as follows:
|
|
|
|
|
|
For the Three Months Ended
|
|
(Millions of Dollars)
|
September 30, 2017
|
September 30, 2016
|
Variation
|
Operating revenues
|
$2,469
|
$2,557
|
$(88)
|
Purchased power
|
393
|
486
|
(93)
|
Fuel
|
24
|
21
|
3
|
Other operations and maintenance
|
547
|
578
|
(31)
|
Depreciation and amortization
|
232
|
217
|
15
|
Taxes, other than income taxes
|
418
|
414
|
4
|
Electric operating income
|
$855
|
$841
|
$14
|
CECONY’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
|
|
Description
|
September 30, 2017
|
|
September 30, 2016
|
|
Variation
|
|
Percent
Variation
|
|
|
September 30, 2017
|
September 30, 2016
|
Variation
|
Percent
Variation
|
|
Residential/Religious (b)
|
3,237
|
|
3,653
|
|
(416
|
)
|
(11.4
|
)%
|
|
$805
|
$883
|
$(78)
|
(8.8
|
)%
|
Commercial/Industrial
|
2,570
|
|
2,749
|
|
(179
|
)
|
(6.5
|
)
|
|
534
|
551
|
(17)
|
(3.1
|
)
|
Retail choice customers
|
7,510
|
|
8,136
|
|
(626
|
)
|
(7.7
|
)
|
|
867
|
918
|
(51)
|
(5.6
|
)
|
NYPA, Municipal Agency and other sales
|
2,705
|
|
2,764
|
|
(59
|
)
|
(2.1
|
)
|
|
207
|
204
|
3
|
1.5
|
|
Other operating revenues (c)
|
—
|
|
—
|
|
—
|
|
—
|
|
|
56
|
1
|
55
|
Large
|
|
Total
|
16,022
|
|
17,302
|
|
(1,280
|
)
|
(7.4
|
)%
|
(d)
|
$2,469
|
$2,557
|
$(88)
|
(3.4
|
)%
|
|
|
(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.
|
Operating revenues
decreased
$88 million
in the three months ended
September 30, 2017
compared with the
2016
period due primarily to lower purchased power expenses ($93 million), offset by higher revenues from the electric rate plan ($27 million).
Purchased power
expenses
decreased
$93 million
in the three months ended
September 30, 2017
compared with the
2016
period due to lower purchased volumes ($66 million) and unit costs ($27 million).
Fuel
expenses
increased
$3 million
in the three months ended
September 30, 2017
compared with the
2016
period due to higher unit costs ($6 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 pension and other postretirement benefits ($38 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 amortization
increased
$15 million
in the three months ended
September 30, 2017
compared with the
2016
period due primarily to higher electric utility plant balances.
Taxes, other than income taxes
increased
$4 million
in the three months ended
September 30, 2017
compared with the
2016
period due primarily to higher property taxes ($11 million), offset by lower state and local taxes ($5 million).
Gas
CECONY’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, 2017
|
September 30, 2016
|
Variation
|
Operating revenues
|
$268
|
$208
|
$60
|
Gas purchased for resale
|
58
|
34
|
24
|
Other operations and maintenance
|
104
|
102
|
2
|
Depreciation and amortization
|
47
|
41
|
6
|
Taxes, other than income taxes
|
71
|
59
|
12
|
Gas operating income
|
$(12)
|
$(28)
|
$16
|
CECONY’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
|
|
Description
|
September 30, 2017
|
|
September 30, 2016
|
|
Variation
|
|
Percent
Variation
|
|
|
September 30, 2017
|
September 30, 2016
|
Variation
|
|
Percent
Variation
|
|
Residential
|
4,731
|
|
4,335
|
|
396
|
|
9.1
|
%
|
|
$104
|
$88
|
$16
|
18.2
|
%
|
General
|
4,292
|
|
3,963
|
|
329
|
|
8.3
|
|
|
49
|
41
|
8
|
19.5
|
|
Firm transportation
|
8,766
|
|
8,305
|
|
461
|
|
5.6
|
|
|
67
|
53
|
14
|
26.4
|
|
Total firm sales and transportation
|
17,789
|
|
16,603
|
|
1,186
|
|
7.1
|
|
(b)
|
220
|
182
|
38
|
20.9
|
|
Interruptible sales (c)
|
2,108
|
|
1,664
|
|
444
|
|
26.7
|
|
|
8
|
4
|
4
|
Large
|
|
NYPA
|
10,148
|
|
12,800
|
|
(2,652
|
)
|
(20.7
|
)
|
|
1
|
1
|
—
|
|
—
|
|
Generation plants
|
24,068
|
|
35,745
|
|
(11,677
|
)
|
(32.7
|
)
|
|
7
|
7
|
—
|
|
—
|
|
Other
|
4,487
|
|
4,975
|
|
(488
|
)
|
(9.8
|
)
|
|
6
|
6
|
—
|
|
—
|
|
Other operating revenues (d)
|
—
|
|
—
|
|
—
|
|
—
|
|
|
26
|
8
|
18
|
Large
|
|
Total
|
58,600
|
|
71,787
|
|
(13,187
|
)
|
(18.4
|
)%
|
|
$268
|
$208
|
$60
|
28.8
|
%
|
|
|
(a)
|
Revenues from gas sales are subject to a weather normalization clause and a revenue decoupling mechanism, as a result of which delivery revenues are generally not affected by changes in delivery volumes from levels assumed when rates were approved.
|
|
|
(b)
|
After adjusting for variations, primarily billing days, firm gas sales and transportation volumes in the company’s service area 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 million
in the three 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 ($29 million) and higher gas purchased for resale expense (
$24 million
)
.
Gas purchased for resale
increased
$24 million
in the three months ended
September 30, 2017
compared with the
2016
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, 2017
|
September 30, 2016
|
Variation
|
Operating revenues
|
$62
|
$63
|
$(1)
|
Purchased power
|
7
|
9
|
(2)
|
Fuel
|
6
|
8
|
(2)
|
Other operations and maintenance
|
40
|
44
|
(4)
|
Depreciation and amortization
|
21
|
20
|
1
|
Taxes, other than income taxes
|
31
|
29
|
2
|
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
|
|
Description
|
September 30, 2017
|
|
September 30, 2016
|
|
Variation
|
|
Percent
Variation
|
|
|
September 30, 2017
|
September 30, 2016
|
Variation
|
|
Percent
Variation
|
|
General
|
13
|
|
10
|
|
3
|
|
30.0
|
%
|
|
$2
|
$2
|
|
$—
|
|
—
|
%
|
Apartment house
|
748
|
|
776
|
|
(28
|
)
|
(3.6
|
)
|
|
15
|
15
|
—
|
|
—
|
|
Annual power
|
2,439
|
|
2,950
|
|
(511
|
)
|
(17.3
|
)
|
|
42
|
49
|
(7)
|
(14.3
|
)
|
Other operating revenues (a)
|
—
|
|
—
|
|
—
|
|
—
|
|
|
3
|
(3)
|
6
|
Large
|
|
Total
|
3,200
|
|
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.
|
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 Total
|
Electric
|
|
Gas
|
|
2016 Total
|
2017-2016
Variation
|
|
Operating revenues
|
$206
|
$28
|
$234
|
$213
|
$27
|
$240
|
$(6)
|
Purchased power
|
60
|
—
|
|
60
|
69
|
—
|
|
69
|
(9)
|
Gas purchased for resale
|
—
|
|
10
|
10
|
—
|
|
8
|
8
|
2
|
Other operations and maintenance
|
63
|
17
|
80
|
63
|
14
|
77
|
3
|
Depreciation and amortization
|
13
|
5
|
18
|
12
|
5
|
17
|
1
|
Taxes, other than income taxes
|
14
|
7
|
21
|
14
|
7
|
21
|
—
|
|
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:
|
|
|
|
|
|
|
|
For the Three Months Ended
|
|
(Millions of Dollars)
|
September 30, 2017
|
September 30, 2016
|
Variation
|
|
Operating revenues
|
$206
|
$213
|
$(7)
|
Purchased power
|
60
|
69
|
(9)
|
Other operations and maintenance
|
63
|
63
|
—
|
|
Depreciation and amortization
|
13
|
12
|
1
|
Taxes, other than income taxes
|
14
|
14
|
—
|
|
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
|
|
Description
|
September 30, 2017
|
|
September 30, 2016
|
|
Variation
|
|
Percent
Variation
|
|
|
September 30, 2017
|
|
September 30, 2016
|
Variation
|
Percent
Variation
|
|
Residential/Religious (b)
|
500
|
|
585
|
|
(85
|
)
|
(14.5
|
)%
|
|
$105
|
$109
|
$(4)
|
(3.7
|
)%
|
Commercial/Industrial
|
206
|
|
216
|
|
(10
|
)
|
(4.6
|
)
|
|
34
|
35
|
(1)
|
(2.9
|
)
|
Retail choice customers
|
818
|
|
925
|
|
(107
|
)
|
(11.6
|
)
|
|
64
|
70
|
(6)
|
(8.6
|
)
|
Public authorities
|
31
|
|
31
|
|
—
|
|
—
|
|
|
3
|
2
|
1
|
50.0
|
|
Other operating revenues (c)
|
—
|
|
—
|
|
—
|
|
—
|
|
|
—
|
|
(3)
|
3
|
Large
|
|
Total
|
1,555
|
|
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, 2017
|
September 30, 2016
|
Variation
|
|
Operating revenues
|
$28
|
$27
|
$1
|
Gas purchased for resale
|
10
|
8
|
2
|
Other operations and maintenance
|
17
|
14
|
3
|
Depreciation and amortization
|
5
|
5
|
—
|
|
Taxes, other than income taxes
|
7
|
7
|
—
|
|
Gas operating income
|
$(11)
|
$(7)
|
$(4)
|
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
|
|
Description
|
September 30, 2017
|
|
September 30, 2016
|
|
Variation
|
|
Percent
Variation
|
|
|
September 30, 2017
|
|
September 30, 2016
|
|
Variation
|
|
Percent
Variation
|
|
Residential
|
579
|
|
550
|
|
29
|
|
5.3
|
%
|
|
$11
|
$9
|
$2
|
22.2
|
%
|
General
|
198
|
|
177
|
|
21
|
|
11.9
|
|
|
2
|
2
|
—
|
|
—
|
|
Firm transportation
|
898
|
|
884
|
|
14
|
|
1.6
|
|
|
8
|
8
|
—
|
|
—
|
|
Total firm sales and transportation
|
1,675
|
|
1,611
|
|
64
|
|
4.0
|
|
(b)
|
21
|
19
|
2
|
10.5
|
|
Interruptible sales
|
819
|
|
893
|
|
(74
|
)
|
(8.3
|
)
|
|
1
|
—
|
|
1
|
—
|
|
Generation plants
|
5
|
|
3
|
|
2
|
|
66.7
|
|
|
—
|
|
—
|
|
—
|
|
—
|
|
Other
|
74
|
|
70
|
|
4
|
|
5.7
|
|
|
—
|
|
—
|
|
—
|
|
—
|
|
Other gas revenues
|
—
|
|
—
|
|
—
|
|
—
|
|
|
6
|
8
|
(2)
|
(25.0
|
)
|
Total
|
2,573
|
|
2,577
|
|
(4
|
)
|
(0.2
|
)%
|
|
$28
|
$27
|
$1
|
3.7
|
%
|
|
|
(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 ($2 million), offset in part by lower income before income tax expense ($1 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, 2016
|
Variation
|
Operating revenues
|
$177
|
$350
|
$(173)
|
Purchased power
|
—
|
|
234
|
(234)
|
Gas purchased for resale
|
47
|
39
|
8
|
Other operations and maintenance
|
79
|
40
|
39
|
Depreciation and amortization
|
19
|
11
|
8
|
Taxes, other than income taxes
|
3
|
5
|
(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
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.
G
ain on sale of retail electric supply busine
ss 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, 2017
compared with the
2016
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.
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:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
CECONY
|
O&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
|
$207
|
2.7
|
%
|
$37
|
5.9
|
%
|
$(538)
|
(53.9
|
)%
|
$1
|
—
|
%
|
$(3)
|
Large
|
|
$(296)
|
(3.2
|
)%
|
Purchased power
|
(106)
|
(8.7
|
)
|
(6)
|
(3.9
|
)
|
(679)
|
Large
|
|
—
|
|
—
|
|
(3)
|
Large
|
|
(794)
|
(38.8
|
)
|
Fuel
|
36
|
27.1
|
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
36
|
27.1
|
|
Gas purchased for resale
|
155
|
71.4
|
|
20
|
62.5
|
|
89
|
Large
|
|
—
|
|
—
|
|
—
|
|
—
|
|
264
|
82.5
|
|
Other operations and maintenance
|
(113)
|
(5.4
|
)
|
16
|
7.3
|
|
50
|
40.3
|
|
6
|
Large
|
|
—
|
|
—
|
|
(41)
|
(1.7
|
)
|
Depreciation and amortization
|
66
|
8.0
|
|
3
|
6.0
|
|
24
|
80.0
|
|
—
|
|
—
|
|
—
|
|
—
|
|
93
|
10.3
|
|
Taxes, other than income taxes
|
77
|
5.3
|
|
2
|
3.3
|
|
(4)
|
(25.0
|
)
|
—
|
|
—
|
|
(1)
|
Large
|
|
74
|
4.9
|
|
Gain on sale of retail electric supply business (2016) and solar electric production project (2017)
|
—
|
|
—
|
|
—
|
|
—
|
|
(103)
|
Large
|
|
—
|
|
—
|
|
—
|
|
—
|
|
(103)
|
Large
|
|
Operating income
|
92
|
5.1
|
|
2
|
1.8
|
|
(121)
|
(65.8
|
)
|
(5)
|
Large
|
|
1
|
Large
|
|
(31)
|
(1.5
|
)
|
Other income less deductions
|
4
|
Large
|
|
(1)
|
Large
|
|
(2)
|
(5.7
|
)
|
37
|
Large
|
|
(1)
|
—
|
|
37
|
60.7
|
|
Net interest expense
|
12
|
2.7
|
|
(1)
|
(3.6
|
)
|
11
|
47.8
|
|
8
|
Large
|
|
(2)
|
(18.2
|
)
|
28
|
5.4
|
|
Income before income tax expense
|
84
|
6.2
|
|
2
|
2.3
|
|
(134)
|
(68.4
|
)
|
24
|
Large
|
|
2
|
(20.0
|
)
|
(22)
|
(1.3
|
)
|
Income tax expense
|
60
|
12.2
|
|
4
|
12.5
|
|
(68)
|
(89.5
|
)
|
10
|
Large
|
|
(9)
|
Large
|
|
(3)
|
(0.5
|
)
|
Net income
|
$24
|
2.8
|
%
|
$(2)
|
(3.6
|
)%
|
$(66)
|
(55.0
|
)%
|
$14
|
Large
|
|
$11
|
Large
|
|
$(19)
|
(1.8
|
)%
|
|
|
(a)
|
Includes parent company and consolidation adjustments.
|
|
|
(b)
|
Represents the consolidated results of operations of Con Edison and its businesses.
|
CECONY
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
For the Nine Months Ended
September 30, 2017
|
|
For the Nine Months Ended
September 30, 2016
|
|
|
(Millions of Dollars)
|
Electric
|
|
Gas
|
|
Steam
|
|
2017 Total
|
Electric
|
|
Gas
|
|
Steam
|
|
2016 Total
|
2017-2016
Variation
|
Operating revenues
|
$6,079
|
$1,421
|
$448
|
$7,948
|
$6,222
|
$1,113
|
$406
|
$7,741
|
$207
|
Purchased power
|
1,084
|
—
|
|
26
|
1,110
|
1,191
|
—
|
|
25
|
1,216
|
(106)
|
Fuel
|
95
|
—
|
|
74
|
169
|
81
|
—
|
|
52
|
133
|
36
|
Gas purchased for resale
|
—
|
|
372
|
—
|
|
372
|
—
|
|
217
|
—
|
|
217
|
155
|
Other operations and maintenance
|
1,528
|
330
|
134
|
1,992
|
1,659
|
307
|
139
|
2,105
|
(113)
|
Depreciation and amortization
|
690
|
137
|
64
|
891
|
645
|
118
|
62
|
825
|
66
|
Taxes, other than income taxes
|
1,205
|
220
|
98
|
1,523
|
1,159
|
198
|
89
|
1,446
|
77
|
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, 2017
|
September 30, 2016
|
Variation
|
Operating revenues
|
$6,079
|
$6,222
|
$(143)
|
Purchased power
|
1,084
|
1,191
|
(107)
|
Fuel
|
95
|
81
|
14
|
Other operations and maintenance
|
1,528
|
1,659
|
(131)
|
Depreciation and amortization
|
690
|
645
|
45
|
Taxes, other than income taxes
|
1,205
|
1,159
|
46
|
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
|
|
Description
|
September 30, 2017
|
|
September 30, 2016
|
|
Variation
|
Percent
Variation
|
|
September 30, 2017
|
September 30, 2016
|
Variation
|
Percent
Variation
|
Residential/Religious (b)
|
7,576
|
|
8,130
|
|
(554
|
)
|
(6.8
|
)%
|
|
$1,925
|
$2,017
|
$(92)
|
(4.6
|
)%
|
Commercial/Industrial
|
6,965
|
|
7,220
|
|
(255
|
)
|
(3.5
|
)
|
|
1,393
|
1,381
|
12
|
0.9
|
|
Retail choice customers
|
19,748
|
|
20,404
|
|
(656
|
)
|
(3.2
|
)
|
|
2,092
|
2,114
|
(22)
|
(1.0
|
)
|
NYPA, Municipal Agency and other sales
|
7,548
|
|
7,641
|
|
(93
|
)
|
(1.2
|
)
|
|
483
|
474
|
9
|
1.9
|
|
Other operating revenues (c)
|
—
|
|
—
|
|
—
|
|
—
|
|
|
186
|
236
|
(50)
|
(21.2
|
)
|
Total
|
41,837
|
|
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.
|
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 pension 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, 2017
|
September 30, 2016
|
Variation
|
Operating revenues
|
$1,421
|
$1,113
|
$308
|
Gas purchased for resale
|
372
|
217
|
155
|
Other operations and maintenance
|
330
|
307
|
23
|
Depreciation and amortization
|
137
|
118
|
19
|
Taxes, other than income taxes
|
220
|
198
|
22
|
Gas operating income
|
$362
|
$273
|
$89
|
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
|
|
Description
|
September 30, 2017
|
|
September 30, 2016
|
|
Variation
|
Percent
Variation
|
|
September 30, 2017
|
September 30, 2016
|
|
Variation
|
Percent
Variation
|
Residential
|
39,814
|
|
35,565
|
|
4,249
|
|
11.9
|
%
|
|
$613
|
$506
|
$107
|
21.1
|
%
|
General
|
23,427
|
|
20,962
|
|
2,465
|
|
11.8
|
|
|
255
|
200
|
55
|
27.5
|
|
Firm transportation
|
53,952
|
|
51,333
|
|
2,619
|
|
5.1
|
|
|
390
|
332
|
58
|
17.5
|
|
Total firm sales and transportation
|
117,193
|
|
107,860
|
|
9,333
|
|
8.7
|
|
(b)
|
1,258
|
1,038
|
220
|
21.2
|
|
Interruptible sales (c)
|
6,526
|
|
7,587
|
|
(1,061
|
)
|
(14.0
|
)
|
|
30
|
29
|
1
|
3.4
|
|
NYPA
|
30,233
|
|
31,970
|
|
(1,737
|
)
|
(5.4
|
)
|
|
2
|
2
|
—
|
|
—
|
|
Generation plants
|
48,989
|
|
70,895
|
|
(21,906
|
)
|
(30.9
|
)
|
|
19
|
19
|
—
|
|
—
|
|
Other
|
16,756
|
|
16,442
|
|
314
|
|
1.9
|
|
|
24
|
25
|
(1)
|
(4.0
|
)
|
Other operating revenues (d)
|
—
|
|
—
|
|
—
|
|
—
|
|
|
88
|
—
|
|
88
|
—
|
|
Total
|
219,697
|
|
234,754
|
|
(15,057
|
)
|
(6.4
|
)%
|
|
$1,421
|
$1,113
|
$308
|
27.7
|
%
|
|
|
(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).
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, 2017
|
September 30, 2016
|
Variation
|
Operating revenues
|
$448
|
$406
|
$42
|
Purchased power
|
26
|
25
|
1
|
Fuel
|
74
|
52
|
22
|
Other operations and maintenance
|
134
|
139
|
(5)
|
Depreciation and amortization
|
64
|
62
|
2
|
Taxes, other than income taxes
|
98
|
89
|
9
|
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
|
|
Description
|
September 30, 2017
|
|
September 30, 2016
|
|
Variation
|
Percent
Variation
|
|
September 30, 2017
|
September 30, 2016
|
Variation
|
Percent
Variation
|
General
|
364
|
|
345
|
|
19
|
|
5.5
|
%
|
|
$20
|
$18
|
$2
|
11.1
|
%
|
Apartment house
|
4,248
|
|
4,251
|
|
(3
|
)
|
(0.1
|
)
|
|
119
|
107
|
12
|
11.2
|
|
Annual power
|
10,074
|
|
10,640
|
|
(566
|
)
|
(5.3
|
)
|
|
300
|
284
|
16
|
5.6
|
|
Other operating revenues (a)
|
—
|
|
—
|
|
—
|
|
—
|
|
|
9
|
(3)
|
12
|
Large
|
|
Total
|
14,686
|
|
15,236
|
|
(550
|
)
|
(3.6
|
)%
|
(b)
|
$448
|
$406
|
$42
|
10.3
|
%
|
|
|
(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.
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 debt 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 Total
|
Electric
|
|
Gas
|
|
2016 Total
|
2017-2016
Variation
|
Operating revenues
|
$495
|
$172
|
$667
|
$497
|
$133
|
$630
|
$37
|
Purchased power
|
148
|
—
|
|
148
|
154
|
—
|
|
154
|
(6)
|
Gas purchased for resale
|
—
|
|
52
|
52
|
—
|
|
32
|
32
|
20
|
Other operations and maintenance
|
185
|
51
|
236
|
180
|
40
|
220
|
16
|
Depreciation and amortization
|
38
|
15
|
53
|
37
|
13
|
50
|
3
|
Taxes, other than income taxes
|
41
|
21
|
62
|
40
|
20
|
60
|
2
|
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, 2017
|
September 30, 2016
|
Variation
|
Operating revenues
|
$495
|
$497
|
$(2)
|
Purchased power
|
148
|
154
|
(6)
|
Other operations and maintenance
|
185
|
180
|
5
|
Depreciation and amortization
|
38
|
37
|
1
|
Taxes, other than income taxes
|
41
|
40
|
1
|
Electric operating income
|
$83
|
$86
|
$(3)
|
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
|
|
Description
|
September 30, 2017
|
|
September 30, 2016
|
|
Variation
|
|
Percent
Variation
|
|
September 30, 2017
|
September 30, 2016
|
Variation
|
Percent
Variation
|
Residential/Religious (b)
|
1,208
|
|
1,307
|
|
(99
|
)
|
(7.6
|
)%
|
|
$242
|
$240
|
$2
|
0.8
|
%
|
Commercial/Industrial
|
574
|
|
607
|
|
(33
|
)
|
(5.4
|
)
|
|
88
|
89
|
(1)
|
(1.1
|
)
|
Retail choice customers
|
2,255
|
|
2,434
|
|
(179
|
)
|
(7.4
|
)
|
|
155
|
166
|
(11)
|
(6.6
|
)
|
Public authorities
|
79
|
|
76
|
|
3
|
|
3.9
|
|
|
7
|
6
|
1
|
16.7
|
|
Other operating revenues (c)
|
—
|
|
—
|
|
—
|
|
—
|
|
|
3
|
(4)
|
7
|
Large
|
|
Total
|
4,116
|
|
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 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
$1 million
in the
nine
months ended
September 30, 2017
compared with the
2016
period due primarily to higher property taxes.
Gas
O&R’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, 2017
|
September 30, 2016
|
Variation
|
Operating revenues
|
$172
|
$133
|
$39
|
Gas purchased for resale
|
52
|
32
|
20
|
Other operations and maintenance
|
51
|
40
|
11
|
Depreciation and amortization
|
15
|
13
|
2
|
Taxes, other than income taxes
|
21
|
20
|
1
|
Gas operating income
|
$33
|
$28
|
$5
|
O&R’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
|
|
Description
|
September 30, 2017
|
|
September 30, 2016
|
|
Variation
|
Percent
Variation
|
|
September 30, 2017
|
|
September 30, 2016
|
|
Variation
|
Percent
Variation
|
Residential
|
5,556
|
|
5,266
|
|
290
|
|
5.5
|
%
|
|
$79
|
$55
|
$24
|
43.6
|
%
|
General
|
1,447
|
|
1,224
|
|
223
|
|
18.2
|
|
|
16
|
10
|
6
|
60.0
|
|
Firm transportation
|
6,543
|
|
7,188
|
|
(645
|
)
|
(9.0
|
)
|
|
50
|
49
|
1
|
2.0
|
|
Total firm sales and transportation
|
13,546
|
|
13,678
|
|
(132
|
)
|
(1.0
|
)
|
(b)
|
145
|
114
|
31
|
27.2
|
|
Interruptible sales
|
2,966
|
|
3,020
|
|
(54
|
)
|
(1.8
|
)
|
|
5
|
2
|
3
|
Large
|
|
Generation plants
|
6
|
|
15
|
|
(9
|
)
|
(60.0
|
)
|
|
—
|
|
—
|
|
—
|
|
—
|
|
Other
|
589
|
|
583
|
|
6
|
|
1.0
|
|
|
1
|
—
|
|
1
|
—
|
|
Other gas revenues
|
—
|
|
—
|
|
—
|
|
—
|
|
|
21
|
17
|
4
|
23.5
|
%
|
Total
|
17,107
|
|
17,296
|
|
(189
|
)
|
(1.1
|
)%
|
|
$172
|
$133
|
$39
|
29.3
|
%
|
|
|
(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
in the
nine
months ended
September 30, 2017
compared with the
2016
period due primarily to an increase in gas purchased for resale (
$20 million
) and higher revenues from the New York gas rate plan ($14 million).
Gas purchased for resale
increased
$20 million
in the
nine
months ended
September 30, 2017
compared with the
2016
period due to higher purchased volumes ($12 million) and unit costs ($8 million).
Other operations and maintenance
expenses
increased
$11 million
in the
nine
months ended
September 30, 2017
compared with the
2016
period due primarily to higher pension costs.
Depreciation and amortization
increased
$2 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
$1 million
in the
nine
months ended
September 30, 2017
compared with the
2016
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).
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, 2017
|
September 30, 2016
|
Variation
|
Operating revenues
|
$460
|
$998
|
$(538)
|
Purchased power
|
(3)
|
676
|
(679)
|
Gas purchased for resale
|
161
|
72
|
89
|
Other operations and maintenance
|
174
|
124
|
50
|
Depreciation and amortization
|
54
|
30
|
24
|
Taxes, other than income taxes
|
12
|
16
|
(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.
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.
G
ain 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)
decreased
$2 million
in the
nine
months ended
September 30, 2017
compared with the
2016
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.
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) 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).
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
$8 million
in the
nine
months ended
September 30, 2017
compared with the
2016
period due primarily to a new debt issuance in 2016.
Other Income (Deductions)
Other income (deductions)
increased
$37 million
in the
nine
months ended
September 30, 2017
compared with the
2016
period due primarily to earnings from equity investments in Stagecoach Gas Services, LLC
, substantially all of which were made in June
2016.
Income Tax Expense
Income taxes increased
$10 million
in the
nine
months ended
September 30, 2017
compared with the 2016 period due primarily to higher income before income tax expense.
Other
For Con Edison, “Other” includes parent company and consolidation adjustments.
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 Companies’ cash and temporary cash investments resulting from operating, investing and financing activities for the
nine
months ended
September 30, 2017
and
2016
are summarized as follows:
|
|
|
|
|
|
|
|
|
|
|
|
|
For the Nine Months Ended September 30,
|
|
Con Edison
|
CECONY
|
(Millions of Dollars)
|
2017
|
|
2016
|
Variation
|
2017
|
|
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 period
|
776
|
944
|
(168)
|
702
|
843
|
(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)
|
Cash Flows from Operating Activities
The Utilities’ cash flows from operating activities reflect primarily their energy sales and deliveries and cost of operations. The volume of energy sales and deliveries is 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. 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 generally not net income. The prices at which the Utilities provide energy to their customers are determined in accordance with their rate plans. 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.
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. Non-cash charges or credits may also be accrued under the revenue decoupling and cost reconciliation mechanisms in the Utilities’ New York electric and gas rate plans.
Net cash flows from operating activities for the
nine
months ended
September 30, 2017
for Con Edison and CECONY were $
109 million
and $
227 million
lower, respectively, than in the
2016
period. The change in net cash flows for Con Edison and CECONY reflects primarily higher 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 in 2016 reflected the extension of bonus depreciation in late 2015, resulting in a refund of the 2015 estimated federal tax payments.
The change in net cash flows also reflects the timing of payments for and recovery of energy costs. This timing is reflected within changes to accounts receivable – customers, recoverable and refundable energy costs within other regulatory assets and liabilities and accounts payable balances.
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 million
lower and $
254 million
higher, respectively, for the
nine
months ended
September 30, 2017
compared with the
2016
period. The change for Con Edison reflects primarily lower new investments in electric and gas transmission projects (
$1,011 million
) and renewable electric production projects (
$240 million
), and a decrease in non-utility construction expenditures (
$148 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 Transco in 2016 (
$122 million
) and increased utility construction expenditures (
$88 million
).
Cash Flows from Financing Activities
Net cash flows from financing activities for Con Edison and CECONY were $
945 million
lower and $
613 million
higher, respectively, in the
nine
months ended
September 30, 2017
compared with the
2016
period.
In August 2017, Con Edison issued 4.1 million common shares resulting in net proceeds of $343 million, after issuance expenses, that were invested by Con Edison in its subsidiaries, principally CECONY and the Clean Energy Businesses, for funding of their construction expenditures and for other general corporate purposes.
In June 2017, CECONY issued $500 million aggregate principal amount of 3.875 percent debentures, due 2047, the net proceeds from the sale of which were used to repay short-term borrowings and for other general corporate purposes.
In March 2017, Con Edison issued $400 million aggregate principal amount of 2.00 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.
In June 2016, CECONY issued $550 million aggregate principal amount of 3.85 percent debentures, due 2046, the net proceeds from the sale of which were used to repay short-term borrowings and for other general corporate purposes. In September 2016, CECONY redeemed at maturity $400 million of 5.50 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 Edison issued approximately 10 million common shares resulting in net proceeds, after issuance expenses, of $702 million and $500 million aggregate principal amount of 2.00 percent debentures, due 2021, the net proceeds from the sale of which were used in connection with the acquisition by a CET Gas subsidiary of a 50 percent equity interest in a gas pipeline and storage joint venture (see "Con Edison Transmission", above) and for general corporate purposes.
In May 2016, a Con Edison Development subsidiary issued $95 million aggregate principal amount of 4.07 percent senior notes, due 2036, secured by the company's California Holdings 3 solar project.
In February 2016, a Con Edison Development subsidiary issued $218 million aggregate principal amount of 4.21 percent senior notes, due 2041, secured by the company's Texas Solar 7 solar project.
Con Edison’s cash flows from financing for
nine
months ended
September 30, 2017
and
2016
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 million and $77 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, 2017
and
2016
and the average daily balances for the
nine
months ended
September 30, 2017
and
2016
for Con Edison and CECONY were as follows:
|
|
|
|
|
|
|
2017
|
2016
|
(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 yield
|
1.3
|
1.1
|
0.7
|
0.6
|
Capital Requirements and Resources
Con Edison has decreased its estimates for capital requirements for the retirement of long-term securities for 2018 from $1,688 million to $1,288 million. The decrease reflects the $400 million prepayment of a variable rate term loan that was to mature in 2018. See Note C to the
Third
Quarter Financial Statements.
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, 2017
|
For the Nine Months Ended September 30, 2016
|
For the Twelve Months Ended December 31, 2016
|
Con Edison
|
3.8
|
4.0
|
3.6
|
CECONY
|
3.9
|
3.8
|
3.6
|
For each of the Companies, the common equity ratio at
September 30, 2017
and
December 31, 2016
was:
|
|
|
|
|
Common Equity Ratio
(Percent of total capitalization)
|
|
September 30, 2017
|
December 31, 2016
|
Con Edison
|
50.8
|
49.3
|
CECONY
|
50.9
|
49.5
|
Other Changes in Assets and Liabilities
The following table shows changes in certain assets and liabilities at
September 30, 2017
, compared with
December 31, 2016
.
|
|
|
|
|
|
Con Edison
|
CECONY
|
(Millions of Dollars)
|
2017 vs. 2016
Variation
|
2017 vs. 2016
Variation
|
Assets
|
|
|
Prepayments
|
$433
|
$398
|
Non-utility property, less accumulated depreciation
|
204
|
—
|
|
Regulatory asset - Unrecognized pension and other postretirement costs
|
(248)
|
(254)
|
Liabilities
|
|
|
Pension and retiree benefits
|
$(404)
|
$(394)
|
Deferred income taxes and unamortized investment tax credits
|
539
|
610
|
System benefit charge
|
194
|
175
|
Prepayments
The increase in prepayments for Con Edison and CECONY reflects primarily the portion allocable to the 2017 fourth quarter of CECONY's July 2017 payment of its New York City semi-annual property taxes.
Non-Utility Property, Less Accumulated Depreciation
The increase in non-utility property, less accumulated depreciation, for Con Edison 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
The decrease in the regulatory asset for unrecognized pension and other postretirement costs and the liability for pension and retiree benefits reflects the final actuarial valuation of the pension and other retiree benefit plans as measured at December 31, 2016, in accordance with the accounting rules for retirement benefits. The change in the regulatory asset also reflects the year’s amortization of accounting costs. The change in the liability for pension and retiree benefits reflects in part contributions to the plans made by the Utilities in 2017. See Notes E and F to the Third Quarter Financial Statements.
Deferred Income Taxes and Unamortized Investment Tax Credits
The increase in the liability for deferred income taxes and unamortized investment tax credits for Con Edison 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. See Note I to the Third Quarter Financial Statements.
System Benefit Charge
The increase in the liability for the system benefit charge reflects amounts collected by the Utilities from their customers that will be required to be paid to NYSERDA.
Off-Balance Sheet Arrangements
None of the Companies’ transactions, agreements or other contractual arrangements meets the SEC definition of off-balance sheet arrangements.
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, a transformer failure at a CECONY substation discharged thousands of gallons of transformer oil into the soil. Some of the transformer oil, which contained small amounts of polychlorinated biphenyls (PCBs), leaked into the East River. The company, the U.S. Coast Guard, the New York State Department of Environmental Conservation and other agencies responded to the incident. The company has replaced the transformer, and is continuing to remediate and monitor the site, the costs of which are not expected to have a material adverse effect on its financial condition, results of operations or liquidity. In connection with the incident, the company may incur monetary sanctions of more than $0.1 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.
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 Development
The following table provides information about the renewable electric production projects Con Edison Development owned at
September 30, 2017
:
|
|
|
|
|
|
|
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
|
|
|
|
|
|
Pilesgrove
|
Solar
|
18
|
(d)
|
2011
|
New Jersey
|
Flemington Solar
|
Solar
|
8
|
(d)
|
2011
|
New Jersey
|
Frenchtown I, II and III
|
Solar
|
14
|
(d)
|
2011-13
|
New Jersey
|
PA Solar
|
Solar
|
10
|
|
2012
|
Pennsylvania
|
California Solar 2 (e)
|
Solar
|
80
|
20
|
2014-16
|
California
|
Oak Tree Wind
|
Wind
|
20
|
20
|
2014
|
South Dakota
|
Texas Solar 3
|
Solar
|
6
|
25
|
2015
|
Texas
|
Texas Solar 5 (e)
|
Solar
|
95
|
25
|
2015
|
Texas
|
Campbell County
Wind
|
Wind
|
95
|
30
|
2015
|
South Dakota
|
Texas Solar 7 (e)
|
Solar
|
106
|
25
|
2016
|
Texas
|
California Solar 3 (e)
|
Solar
|
110
|
20
|
2016
|
California
|
Adams Wind (e)
|
Wind
|
23
|
7
|
2016
|
Minnesota
|
Valley View (e)
|
Wind
|
10
|
14
|
2016
|
Minnesota
|
Coram (e)
|
Wind
|
102
|
16
|
2016
|
California
|
Upton County Solar (e)
|
Solar
|
158
|
25
|
2017
|
Texas
|
Projects of less than 5 MW
|
Solar / Wind
|
25
|
Various
|
Various
|
Various
|
Jointly owned projects (e) (f)
|
|
|
|
|
|
California Solar
|
Solar
|
55
|
25
|
2012-13
|
California
|
Mesquite Solar 1
|
Solar
|
83
|
20
|
2013
|
Arizona
|
Copper Mountain Solar 2
|
Solar
|
75
|
25
|
2013-15
|
Nevada
|
Copper Mountain Solar 3
|
Solar
|
128
|
20
|
2014-15
|
Nevada
|
Broken Bow II
|
Wind
|
38
|
25
|
2014
|
Nebraska
|
Texas Solar 4
|
Solar
|
32
|
25
|
2014
|
Texas
|
Total MW (AC) in Operation
|
|
1,291
|
|
|
|
Panoche Valley
|
Solar
|
240
|
20
|
2018
|
California
|
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’s date of acquisition.
(c) Represents Actual/Expected In-Service Date or Con Edison Development's date of acquisition.
(d) Have Solar Renewable Energy Credit hedges in place, in lieu of PPAs, out to 2020.
(e) Project has been pledged to secure financing for the project.
(f) All of the jointly-owned projects are 50 percent owned, except for Texas Solar 4 (which is 80 percent owned). See Note M t
o the
Third
Quarter Financial Statements.
Con Edison Development's renewable electric production volumes generated for the three and nine months ended
September 30, 2017
compared with the
2016
period were:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Millions of kWh Generated
|
|
For the Three Months Ended
|
For the Nine Months Ended
|
Description
|
September 30, 2017
|
|
September 30, 2016
|
|
Variation
|
|
Percent Variation
|
|
September 30, 2017
|
September 30, 2016
|
Variation
|
Percent Variation
|
|
Renewable electric production projects
|
|
|
|
|
|
|
|
|
Solar
|
668
|
|
458
|
|
210
|
|
45.9
|
%
|
1,679
|
1,215
|
464
|
38.2
|
%
|
Wind
|
217
|
|
137
|
|
80
|
|
58.4
|
%
|
734
|
464
|
270
|
58.2
|
%
|
Total
|
885
|
|
595
|
|
290
|
|
48.7
|
%
|
2,413
|
1,679
|
734
|
43.7
|
%
|
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 and to new debt financing needed to fund capital requirements, including the construction expenditures of the Utilities and maturing debt securities. Con Edison and its businesses manage interest rate risk through the issuance of mostly fixed-rate debt with varying maturities and through opportunistic refinancing of debt. Con Edison and CECONY estimate that at
September 30, 2017
, a 10 percent increase in interest rates applicable to its variable rate debt would result in an increase in annual interest expense of $2 million. Under CECONY’s current electric, gas and steam rate plans, variations in actual variable rate tax-exempt debt interest expense are reconciled to levels reflected in rates.
Commodity Price Risk
Con Edison’s commodity price risk 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 K
to the
Third
Quarter Financial Statements.
Con Edison estimates that, as of
September 30, 2017
, a 10 percent decline in market prices would result in a decline in fair value of $66 million for the derivative instruments used by the Utilities to hedge purchases of electricity and gas, of which $60 million is for CECONY and $6 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.
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, 2017
and the year ended
December 31, 2016
, respectively, was as follows:
|
|
|
|
|
|
95% Confidence Level, One-Day Holding Period
|
September 30, 2017
|
|
December 31, 2016
|
|
(Millions of Dollars)
|
Average for the period
|
|
$—
|
|
$2
|
High
|
1
|
4
|
Low
|
—
|
|
1
|
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 and to the investments of the Clean Energy Businesses and Con Edison Transmission that are accounted for under the equity method.
The Companies’ current investment policy for pension plan assets includes investment targets of 53 to 63 percent equities and 35 to 49 percent fixed income and other securities. At
September 30, 2017
, the pension plan investments consisted of 58 percent equity and 42 percent fixed income and other securities.
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 rate plans.
Material Contingencies
For information concerning potential liabilities arising from the Companies’ material contingencies, see "Other Regulatory Matters" in Note B and Notes
G
and
H
to the
Third
Quarter Financial Statements.