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, 2018 (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 Report on Form 10-Q for the quarterly periods ended March 31, 2019 and June 30, 2019 (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 3.5 million customers in all of New York City (except a part of Queens) and most of Westchester County, an approximately 660 square mile service area with a population of more than nine million.
During the summer of 2019, electric peak demand in CECONY's service area was 12,389 MW (which occurred on July 17, 2019). At design conditions, electric peak demand in the company's service area would have been approximately 13,222 MW in 2019 compared to the company's forecast of 13,270 MW. The company decreased its five-year forecast of average annual change in electric peak demand in its service area at design conditions from approximately 0.1 percent (for 2019 to 2023) to approximately (0.1) percent (for 2020 to 2024).
Gas
CECONY delivers gas to approximately 1.1 million customers in Manhattan, the Bronx, parts of Queens and most of Westchester County.
In May 2019, the company increased its five-year forecast of average annual growth of the peak gas demand in its service area at design conditions from approximately 1.3 percent (for 2019 to 2023) to approximately 1.5 percent (for 2020 to 2024). The increase reflects increased applications for firm gas service in advance of the March 15, 2019 start of a temporary moratorium on new applications in most of Westchester County.
Steam
CECONY operates the largest steam distribution system in the United States by producing and delivering approximately 20,445 MMlb of steam annually to approximately 1,591 customers in parts of Manhattan.
In July 2019, the company's five-year forecast of average annual change in the peak steam demand in its service area at design conditions increased from approximately (0.5) percent (for 2019 to 2023) to (0.4) percent (for 2020 to 2024).
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 2019, electric peak demand in O&R's service area was 1,446 MW (which occurred on July 21, 2019). At design conditions, electric peak demand in the company's service area would have been approximately 1,543 MW in 2019 compared to the company's forecast of 1,585 MW. The company increased its five-year forecast of average annual change in electric peak demand in its service area at design conditions from approximately (0.3) percent (for 2019 to 2023) to approximately (0.2) percent (for 2020 to 2024).
Gas
O&R delivers gas to over 0.1 million customers in southeastern New York.
In May 2019, the company increased its five-year forecast of average annual growth of the peak gas demand in its service area at design conditions from approximately 0.6 percent (for 2019 to 2023) to 0.7 percent (for 2020 to 2024).
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, are referred to in this report as the Clean Energy 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. In December 2018, a Con Edison Development subsidiary acquired Sempra Solar Holdings, LLC.
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 (NY Transco), 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 and operates 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 owns and operates a gas storage facility 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. Con Edison Transmission, Inc., together with CET Electric and CET Gas, are referred to in this report as Con Edison Transmission.
Certain financial data of Con Edison’s businesses are presented below:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
For the Three Months Ended
September 30, 2019
|
For the Nine Months Ended
September 30, 2019
|
At September 30, 2019
|
|
(Millions of Dollars, except percentages)
|
Operating
Revenues
|
Net Income for
Common Stock
|
Operating
Revenues
|
Net Income for
Common Stock
|
Assets
|
|
CECONY
|
$2,877
|
86
|
%
|
$414
|
88
|
%
|
$8,248
|
86
|
%
|
$978
|
93
|
%
|
$44,808
|
80
|
%
|
|
O&R
|
241
|
7
|
|
25
|
5
|
|
678
|
7
|
|
60
|
6
|
|
2,935
|
5
|
|
|
Total Utilities
|
3,118
|
93
|
|
439
|
93
|
|
8,926
|
93
|
|
1,038
|
99
|
|
47,743
|
85
|
|
|
Clean Energy Businesses (a)
|
247
|
7
|
|
22
|
5
|
|
696
|
7
|
|
(19)
|
(2
|
)
|
6,376
|
12
|
|
|
Con Edison Transmission
|
1
|
—
|
|
14
|
2
|
|
3
|
—
|
|
38
|
4
|
|
1,559
|
3
|
|
|
Other (b)
|
(1)
|
—
|
|
(2)
|
—
|
|
(2)
|
—
|
|
(9)
|
(1
|
)
|
262
|
—
|
|
|
Total Con Edison
|
$3,365
|
100
|
%
|
$473
|
100
|
%
|
$9,623
|
100
|
%
|
$1,048
|
100
|
%
|
$55,940
|
100
|
%
|
|
|
|
|
(a)
|
Net income for common stock from the Clean Energy Businesses for the three and nine months ended September 30, 2019 includes $(17) million and $(41) million, respectively, of net after-tax mark-to-market losses and reflects $23 million (after-tax) and $60 million (after-tax), respectively, of income attributable to the non-controlling interest of a tax equity investor in renewable electric production projects accounted for under the HLBV method of accounting. See Note N to the Third Quarter Financial Statements.
|
|
|
|
|
(b)
|
Other includes parent company and consolidation adjustments.
|
Results of Operations
Net income for common stock and earnings per share for the three and nine months ended September 30, 2019 and 2018 were as follows:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
For the Three Months Ended September 30,
|
For the Nine Months Ended September 30,
|
|
|
2019
|
2018
|
2019
|
2018
|
2019
|
2018
|
2019
|
2018
|
|
(Millions of Dollars, except per share amounts)
|
Net Income for Common Stock
|
Earnings
per Share
|
Net Income for Common Stock
|
Earnings
per Share
|
|
CECONY
|
$414
|
$431
|
$1.25
|
$1.38
|
$978
|
$969
|
$2.99
|
$3.12
|
|
O&R
|
25
|
21
|
0.07
|
0.07
|
60
|
52
|
0.18
|
0.17
|
|
Clean Energy Businesses (a)
|
22
|
27
|
0.07
|
0.10
|
(19)
|
58
|
(0.06)
|
0.19
|
|
Con Edison Transmission
|
14
|
13
|
0.04
|
0.04
|
38
|
35
|
0.11
|
0.11
|
|
Other (b)
|
(2)
|
(57)
|
(0.01)
|
(0.19)
|
(9)
|
(63)
|
(0.02)
|
(0.21)
|
|
Con Edison (c)
|
$473
|
$435
|
$1.42
|
$1.40
|
$1,048
|
$1,051
|
$3.20
|
$3.38
|
|
|
|
|
(a)
|
Net income for common stock from the Clean Energy Businesses for the three and nine months ended September 30, 2019 includes $(17) million or $(0.05) a share and $(41) million or $(0.13) a share, respectively, of net after-tax mark-to-market losses and reflects $23 million or $0.07 a share (after-tax) and $60 million or $0.18 a share (after-tax), respectively, of income attributable to the non-controlling interest of a tax equity investor in renewable electric production projects accounted for under the HLBV method of accounting. See Note N to the Third Quarter Financial Statements. Net income for common stock from the Clean Energy Businesses for the three and nine months ended September 30, 2018 includes $(2) million or $0.00 a share and $(3) million or $(0.01) a share, respectively, of net after-tax mark-to-market losses.
|
|
|
|
|
(b)
|
Other includes parent company and consolidation adjustments. Includes $(42) million or $(0.14) a share of income tax expense resulting from a re-measurement of the company's deferred tax assets and liabilities following the issuance of proposed regulations relating to the TCJA for the three and nine months ended September 30, 2018. See Note I to the Third Quarter Financial Statements. Also includes for the three and nine months ended September 30, 2018 $10 million (net of tax) or $0.03 a share of transaction costs related to a Con Edison Development subsidiary’s agreement to purchase Sempra Solar Holdings, LLC.
|
|
|
|
|
(c)
|
Earnings per share on a diluted basis were $1.42 a share and $1.39 a share for the three months ended September 30, 2019 and 2018, respectively, and $3.19 a share and $3.37 a share for the nine months ended September 30, 2019 and 2018, respectively.
|
The following tables present the estimated effect of major factors on earnings per share and net income for common stock for the three and nine months ended September 30, 2019 as compared with the 2018 periods.
|
|
|
|
|
|
|
|
|
Variation for the Three Months Ended September 30, 2019 vs. 2018
|
|
|
Earnings
per Share
|
Net Income for Common Stock (Millions of Dollars)
|
|
|
CECONY (a)
|
|
|
|
|
Changes in rate plans
|
$0.11
|
$35
|
Reflects higher electric and gas net base revenues of $0.19 a share and $0.01 a share, respectively, due primarily to electric and gas base rates increases in January 2019 under the company's rate plans.
|
|
Weather impact on steam revenues
|
—
|
|
(1)
|
|
|
Operations and maintenance expenses
|
(0.11)
|
(34)
|
Reflects higher costs for pension and other postretirement benefits of $(0.04) a share, stock-based compensation of $(0.03) a share and uncollectibles of $(0.02) a share.
|
|
Depreciation, property taxes and other tax matters
|
(0.10)
|
(31)
|
Reflects higher property taxes of $(0.06) a share and higher depreciation and amortization expense of $(0.06) a share, offset, in part, by the reduction in the sales and use tax reserve upon conclusion of the audit assessment of $0.02 a share.
|
|
Other
|
(0.03)
|
14
|
Reflects primarily the dilutive effect of Con Edison's stock issuances of $(0.09) a share, offset, in part, by lower costs associated with components of pension and other postretirement benefits other than service cost of $0.05 a share.
|
|
Total CECONY
|
(0.13)
|
(17)
|
|
|
O&R (a)
|
|
|
|
|
Changes in rate plans
|
0.03
|
11
|
Reflects primarily an electric base rate increase under the company's new rate plan, effective January 1, 2019.
|
|
Operations and maintenance expenses
|
—
|
|
(1)
|
|
|
Depreciation, property taxes and other tax matters
|
(0.01)
|
(2)
|
Reflects higher depreciation and amortization expense.
|
|
Other
|
(0.02)
|
(4)
|
Reflects primarily the dilutive effect of Con Edison's stock issuances of $(0.01) a share.
|
|
Total O&R
|
—
|
|
4
|
|
|
Clean Energy Businesses
|
|
|
|
|
|
Operating revenues less energy costs
|
0.27
|
85
|
Reflects primarily higher revenues from renewable electric production projects resulting from the December 2018 acquisition of Sempra Solar Holdings, LLC, including the consolidation of certain jointly-owned projects that were previously accounted for as equity investments of $0.30 a share, and lower gas purchased for resale due to lower purchased volume of $0.12 a share, offset, in part, by lower wholesale revenues of $(0.13) a share.
|
|
Operations and maintenance expenses
|
(0.01)
|
(2)
|
Reflects higher costs associated with additional renewable electric production projects in operation resulting from the December 2018 acquisition of Sempra Solar Holdings, LLC. of $(0.03) a share, offset, in part, by lower energy services costs of $0.02 a share.
|
|
Depreciation and amortization
|
(0.08)
|
(26)
|
Reflects an increase in renewable electric production projects resulting from the December 2018 acquisition of Sempra Solar Holdings, LLC.
|
|
Net interest expense
|
(0.12)
|
(35)
|
Reflects primarily an increase in debt resulting from the December 2018 acquisition of Sempra Solar Holdings, LLC.
|
|
HLBV effects
|
(0.07)
|
(23)
|
|
|
Other
|
(0.02)
|
(4)
|
Reflects primarily the absence in 2019 of equity income from certain jointly-owned projects that were accounted for as equity investments in 2018 but consolidated after the December 2018 acquisition of Sempra Solar Holdings, LLC.
|
|
Total Clean Energy Businesses
|
(0.03)
|
(5)
|
|
|
Con Edison Transmission
|
—
|
|
1
|
Reflects income from equity investments.
|
|
Other, including parent company expenses
|
0.18
|
55
|
|
|
Total Reported (GAAP basis)
|
$0.02
|
$38
|
|
|
|
|
|
|
a.
Under the revenue decoupling mechanisms in the Utilities’ New York electric and gas rate plans and the weather-normalization clause applicable to their gas businesses, revenues are generally not affected by changes in delivery volumes from levels assumed when rates were approved. In general, the utilities recover on a current basis the fuel, gas purchased for resale and purchased power costs they incur in supplying energy to their full-service customers. Accordingly, such costs do not generally affect Con Edison’s results of operations.
|
|
|
|
|
|
|
|
|
|
Variation for the Nine Months Ended September 30, 2019 vs. 2018
|
|
|
Earnings
per Share
|
Net Income for Common Stock (Millions of Dollars)
|
|
|
CECONY (a)
|
|
|
|
|
Changes in rate plans
|
$0.59
|
$185
|
Reflects higher electric and gas net base revenues of $0.42 a share and $0.12 a share, respectively, due primarily to electric and gas base rates increases in January 2019 under the company's rate plans and growth in the number of gas customers of $0.02 a share.
|
|
Weather impact on steam revenues
|
(0.05)
|
(15)
|
Reflects the impact of warmer winter weather in 2019.
|
|
Operations and maintenance expenses
|
(0.23)
|
(71)
|
Reflects higher costs for pension and other postretirement benefits of $(0.11) a share, stock-based compensation of $(0.07) a share and regulatory assessments and fees that are collected in revenues from customers of $(0.05) a share.
|
|
Depreciation, property taxes and other tax matters
|
(0.38)
|
(121)
|
Reflects higher property taxes of $(0.19) a share, higher depreciation and amortization expense of $(0.17) a share and the absence of New York State sales and use tax refunds received in 2018 of $(0.04) a share; offset, in part, by the reduction in the sales and use tax reserve upon conclusion of the audit assessment of $0.02 a share.
|
|
Other
|
(0.06)
|
31
|
Reflects primarily the dilutive effect of Con Edison's stock issuances of $(0.16) a share and higher interest expense on long-term debt of $(0.09) a share, offset, in part, by lower costs associated with components of pension and other postretirement benefits other than service cost of $0.14 a share.
|
|
Total CECONY
|
(0.13)
|
9
|
|
|
O&R (a)
|
|
|
|
|
Changes in rate plans
|
0.03
|
10
|
Reflects an electric base rate increase of $0.05 a share, offset, in part, by a gas base rate decrease of $(0.02) a share under the company's new rate plans, effective January 1, 2019.
|
|
Operations and maintenance expenses
|
0.02
|
6
|
Reflects primarily a reduction of a regulatory asset associated with certain site investigation and environmental remediation costs in 2018.
|
|
Depreciation, property taxes and other tax matters
|
(0.02)
|
(5)
|
Reflects higher depreciation and amortization expense.
|
|
Other
|
(0.02)
|
(3)
|
Reflects primarily the dilutive effect of Con Edison's stock issuances of $(0.01) a share.
|
|
Total O&R
|
0.01
|
8
|
|
|
Clean Energy Businesses
|
|
|
|
|
|
Operating revenues less energy costs
|
0.44
|
137
|
Reflects primarily higher revenues from renewable electric production projects resulting from the December 2018 acquisition of Sempra Solar Holdings, LLC, including the consolidation of certain jointly-owned projects that were previously accounted for as equity investments of $0.68 a share, offset, in part, by lower engineering, procurement and construction services revenues of $(0.22) a share.
|
|
Operations and maintenance expenses
|
0.14
|
43
|
Reflects primarily lower engineering, procurement and construction costs of $0.20 a share and lower energy services costs of $0.02 a share, offset, in part, by higher costs associated with additional renewable electric production projects in operation resulting from the December 2018 acquisition of Sempra Solar Holdings, LLC. of $(0.08) a share.
|
|
Depreciation and amortization
|
(0.27)
|
(84)
|
Reflects an increase in renewable electric production projects resulting from the December 2018 acquisition of Sempra Solar Holdings, LLC.
|
|
Net interest expense
|
(0.31)
|
(96)
|
Reflects primarily an increase in debt resulting from the December 2018 acquisition of Sempra Solar Holdings, LLC.
|
|
HLBV effects
|
(0.18)
|
(60)
|
|
|
Other
|
(0.07)
|
(17)
|
Reflects primarily the absence in 2019 of equity income from certain jointly-owned projects that were accounted for as equity investments in 2018 but consolidated after the December 2018 acquisition of Sempra Solar Holdings, LLC.
|
|
Total Clean Energy Businesses
|
(0.25)
|
(77)
|
|
|
Con Edison Transmission
|
—
|
|
3
|
Reflects income from equity investments.
|
|
Other, including parent company expenses
|
0.19
|
54
|
|
|
Total Reported (GAAP basis)
|
$(0.18)
|
$(3)
|
|
|
|
|
|
|
a.
Under the revenue decoupling mechanisms in the Utilities’ New York electric and gas rate plans and the weather-normalization clause applicable to their gas businesses, revenues are generally not affected by changes in delivery volumes from levels assumed when rates were approved. In general, the utilities recover on a current basis the fuel, gas purchased for resale and purchased power costs they incur in supplying energy to their full-service customers. Accordingly, such costs do not generally affect Con Edison’s results of operations.
|
The Companies’ other operations and maintenance expenses for the three and nine months ended September 30, 2019 and 2018 were as follows:
|
|
|
|
|
|
|
|
|
|
|
For the Three Months Ended September 30,
|
For the Nine Months Ended September 30,
|
|
(Millions of Dollars)
|
2019
|
2018
|
2019
|
|
2018
|
|
CECONY
|
|
|
|
|
|
Operations
|
$414
|
$393
|
$1,190
|
$1,186
|
|
Pensions and other postretirement benefits
|
34
|
18
|
100
|
53
|
|
Health care and other benefits
|
46
|
46
|
126
|
132
|
|
Regulatory fees and assessments (a)
|
134
|
132
|
356
|
335
|
|
Other
|
84
|
77
|
250
|
220
|
|
Total CECONY
|
712
|
666
|
2,022
|
1,926
|
|
O&R
|
81
|
80
|
225
|
234
|
|
Clean Energy Businesses (b)
|
53
|
50
|
168
|
226
|
|
Con Edison Transmission
|
2
|
3
|
7
|
7
|
|
Other (c)
|
(1)
|
(2)
|
—
|
|
(4)
|
|
Total other operations and maintenance expenses
|
$847
|
$797
|
$2,422
|
$2,389
|
|
|
|
|
(a)
|
Includes Demand Side Management, System Benefit Charges and Public Service Law 18A assessments which are collected in revenues.
|
|
|
|
|
(b)
|
The decrease in operations and maintenance for the nine months ended September 30, 2019 compared with the 2018 period is due primarily to lower engineering, procurement and construction costs.
|
|
|
|
|
(c)
|
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, 2019 and 2018 follows. For additional business segment financial information, see Note K to the Third Quarter Financial Statements.
The Companies’ results of operations for the three months ended September 30, 2019 and 2018 were as follows:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
CECONY
|
O&R
|
Clean Energy Businesses
|
Con Edison
Transmission
|
Other (a)
|
Con Edison (b)
|
|
(Millions of Dollars)
|
2019
|
|
2018
|
|
2019
|
|
2018
|
|
2019
|
|
2018
|
|
2019
|
|
2018
|
|
2019
|
|
2018
|
|
2019
|
2018
|
|
|
Operating revenues
|
$2,877
|
$2,899
|
$241
|
$246
|
$247
|
$181
|
$1
|
$1
|
$(1)
|
$1
|
$3,365
|
$3,328
|
|
Purchased power
|
423
|
472
|
61
|
73
|
—
|
|
—
|
|
—
|
|
—
|
|
(1)
|
—
|
|
483
|
545
|
|
Fuel
|
31
|
39
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
31
|
39
|
|
Gas purchased for resale
|
52
|
66
|
10
|
12
|
36
|
85
|
—
|
|
—
|
|
—
|
|
1
|
98
|
164
|
|
Other operations and maintenance
|
712
|
666
|
81
|
80
|
53
|
50
|
2
|
3
|
(1)
|
(2)
|
847
|
797
|
|
Depreciation and amortization
|
346
|
322
|
22
|
19
|
53
|
18
|
—
|
|
—
|
|
—
|
|
1
|
421
|
360
|
|
Taxes, other than income taxes
|
590
|
570
|
21
|
20
|
5
|
3
|
—
|
|
—
|
|
2
|
4
|
618
|
597
|
|
Operating income
|
723
|
764
|
46
|
42
|
100
|
25
|
(1)
|
(2)
|
(1)
|
(3)
|
867
|
826
|
|
Other income less deductions
|
(9)
|
(33)
|
(3)
|
(5)
|
1
|
18
|
27
|
24
|
(2)
|
(15)
|
14
|
(11)
|
|
Net interest expense
|
181
|
175
|
10
|
10
|
61
|
13
|
7
|
5
|
3
|
2
|
262
|
205
|
|
Income before income tax expense
|
533
|
556
|
33
|
27
|
40
|
30
|
19
|
17
|
(6)
|
(20)
|
619
|
610
|
|
Income tax expense
|
119
|
125
|
8
|
6
|
(12)
|
3
|
5
|
4
|
(4)
|
37
|
116
|
175
|
|
Net income
|
$414
|
$431
|
$25
|
$21
|
$52
|
$27
|
$14
|
$13
|
$(2)
|
$(57)
|
$503
|
$435
|
|
Income attributable to non-controlling interest
|
—
|
|
—
|
|
—
|
|
—
|
|
30
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
30
|
—
|
|
|
Net income for common stock
|
$414
|
$431
|
$25
|
$21
|
$22
|
$27
|
$14
|
$13
|
$(2)
|
$(57)
|
$473
|
$435
|
|
|
|
|
(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, 2019
|
|
For the Three Months Ended
September 30, 2018
|
|
|
|
(Millions of Dollars)
|
Electric
|
|
Gas
|
|
Steam
|
|
2019 Total
|
Electric
|
|
Gas
|
|
Steam
|
|
2018 Total
|
2019-2018
Variation
|
|
Operating revenues
|
$2,544
|
$275
|
$58
|
$2,877
|
$2,571
|
$264
|
$64
|
$2,899
|
$(22)
|
|
Purchased power
|
418
|
—
|
|
5
|
423
|
465
|
—
|
|
7
|
472
|
(49)
|
|
Fuel
|
27
|
—
|
|
4
|
31
|
34
|
—
|
|
5
|
39
|
(8)
|
|
Gas purchased for resale
|
—
|
|
52
|
—
|
|
52
|
—
|
|
66
|
—
|
|
66
|
(14)
|
|
Other operations and maintenance
|
565
|
102
|
45
|
712
|
518
|
101
|
47
|
666
|
46
|
|
Depreciation and amortization
|
266
|
58
|
22
|
346
|
248
|
52
|
22
|
322
|
24
|
|
Taxes, other than income taxes
|
465
|
87
|
38
|
590
|
456
|
79
|
35
|
570
|
20
|
|
Operating income
|
$803
|
$(24)
|
$(56)
|
$723
|
$850
|
$(34)
|
$(52)
|
$764
|
$(41)
|
Electric
CECONY’s results of electric operations for the three months ended September 30, 2019 compared with the 2018 period were as follows:
|
|
|
|
|
|
|
|
|
For the Three Months Ended
|
|
|
(Millions of Dollars)
|
September 30, 2019
|
September 30, 2018
|
Variation
|
|
Operating revenues
|
$2,544
|
$2,571
|
$(27)
|
|
Purchased power
|
418
|
465
|
(47)
|
|
Fuel
|
27
|
34
|
(7)
|
|
Other operations and maintenance
|
565
|
518
|
47
|
|
Depreciation and amortization
|
266
|
248
|
18
|
|
Taxes, other than income taxes
|
465
|
456
|
9
|
|
Electric operating income
|
$803
|
$850
|
$(47)
|
CECONY’s electric sales and deliveries for the three months ended September 30, 2019 compared with the 2018 period were:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Millions of kWh Delivered
|
|
Revenues in Millions (a)
|
|
|
For the Three Months Ended
|
|
|
For the Three Months Ended
|
|
|
Description
|
September 30, 2019
|
|
September 30, 2018
|
|
Variation
|
|
Percent
Variation
|
|
|
September 30, 2019
|
September 30, 2018
|
Variation
|
Percent
Variation
|
|
|
Residential/Religious (b)
|
3,687
|
|
3,777
|
|
(90)
|
|
(2.4
|
)%
|
|
$923
|
$988
|
$(65)
|
(6.6
|
)%
|
|
Commercial/Industrial
|
2,831
|
|
2,706
|
|
125
|
|
4.6
|
|
|
557
|
542
|
15
|
2.8
|
|
|
Retail choice customers
|
7,339
|
|
7,756
|
|
(417)
|
|
(5.4
|
)
|
|
854
|
910
|
(56)
|
(6.2
|
)
|
|
NYPA, Municipal Agency and other sales
|
2,756
|
|
2,758
|
|
(2)
|
|
(0.1
|
)
|
|
219
|
225
|
(6)
|
(2.7
|
)
|
|
Other operating revenues (c)
|
—
|
|
—
|
|
—
|
|
—
|
|
|
(9)
|
(94)
|
85
|
(90.4
|
)
|
|
Total
|
16,613
|
|
16,997
|
|
(384)
|
|
(2.3
|
)%
|
(d)
|
$2,544
|
$2,571
|
$(27)
|
(1.1
|
)%
|
|
|
|
|
(a)
|
Revenues from electric sales are subject to a revenue decoupling mechanism, as a result of which delivery revenues generally are not affected by changes in delivery volumes from levels assumed when rates were approved.
|
|
|
|
|
(b)
|
“Residential/Religious” generally includes single-family dwellings, individual apartments in multi-family dwellings, religious organizations and certain other not-for-profit organizations.
|
|
|
|
|
(c)
|
Other electric operating revenues generally reflect changes in the revenue decoupling mechanism current asset or regulatory liability and changes in regulatory assets and liabilities in accordance with other provisions of the company’s rate plans.
|
|
|
|
|
(d)
|
After adjusting for variations, primarily weather and billing days, electric delivery volumes in CECONY’s service area increased 0.7 percent in the three months ended September 30, 2019 compared with the 2018 period.
|
Operating revenues decreased $27 million in the three months ended September 30, 2019 compared with the 2018 period due primarily to lower purchased power expenses ($47 million) and fuel expenses ($7 million), offset, in part, by an increase in revenues from the rate plan ($21 million).
Purchased power expenses decreased $47 million in the three months ended September 30, 2019 compared with the 2018 period due to lower unit costs ($82 million), offset, in part, by higher purchased volumes ($35 million).
Fuel expenses decreased $7 million in the three months ended September 30, 2019 compared with the 2018 period due to lower unit costs ($8 million), offset, in part, by higher purchased volumes from the company's electric generating facilities ($1 million).
Other operations and maintenance expenses increased $47 million in the three months ended September 30, 2019 compared with the 2018 period due primarily to higher costs for pension and other postretirement benefits ($18 million), stock-based compensation ($9 million), reserve for uncollectibles ($6 million) and municipal infrastructure support ($3 million).
Depreciation and amortization increased $18 million in the three months ended September 30, 2019 compared with the 2018 period due primarily to higher electric utility plant balances.
Taxes, other than income taxes increased $9 million in the three months ended September 30, 2019 compared with the 2018 period due primarily to higher property taxes ($19 million) and payroll taxes ($2 million), offset, in part, by the reduction in the sales and use tax reserve upon conclusion of the audit assessment ($5 million), higher deferral of under-collected property taxes ($4 million) and lower state and local taxes ($2 million).
Gas
CECONY’s results of gas operations for the three months ended September 30, 2019 compared with the 2018 period were as follows:
|
|
|
|
|
|
|
|
|
For the Three Months Ended
|
|
|
(Millions of Dollars)
|
September 30, 2019
|
September 30, 2018
|
Variation
|
|
Operating revenues
|
$275
|
$264
|
$11
|
|
Gas purchased for resale
|
52
|
66
|
(14)
|
|
Other operations and maintenance
|
102
|
101
|
1
|
|
Depreciation and amortization
|
58
|
52
|
6
|
|
Taxes, other than income taxes
|
87
|
79
|
8
|
|
Gas operating income
|
$(24)
|
$(34)
|
$10
|
CECONY’s gas sales and deliveries, excluding off-system sales, for the three months ended September 30, 2019 compared with the 2018 period were:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Thousands of Dt Delivered
|
|
Revenues in Millions (a)
|
|
|
For the Three Months Ended
|
|
|
For the Three Months Ended
|
|
|
Description
|
September 30, 2019
|
|
September 30, 2018
|
|
Variation
|
|
Percent
Variation
|
|
|
September 30, 2019
|
September 30, 2018
|
Variation
|
|
Percent
Variation
|
|
|
Residential
|
4,032
|
|
4,469
|
|
(437
|
)
|
(9.8
|
)%
|
|
$103
|
$118
|
$(15)
|
(12.7
|
)%
|
|
General
|
4,097
|
|
4,191
|
|
(94
|
)
|
(2.2
|
)
|
|
45
|
54
|
(9)
|
(16.7
|
)
|
|
Firm transportation
|
9,071
|
|
9,211
|
|
(140
|
)
|
(1.5
|
)
|
|
71
|
71
|
—
|
|
—
|
|
|
Total firm sales and transportation
|
17,200
|
|
17,871
|
|
(671
|
)
|
(3.8
|
)
|
(b)
|
219
|
243
|
(24)
|
(9.9
|
)
|
|
Interruptible sales (c)
|
1,974
|
|
1,481
|
|
493
|
|
33.3
|
|
|
6
|
6
|
—
|
|
—
|
|
|
NYPA
|
12,329
|
|
12,815
|
|
(486
|
)
|
(3.8
|
)
|
|
1
|
1
|
—
|
|
—
|
|
|
Generation plants
|
19,558
|
|
29,128
|
|
(9,570
|
)
|
(32.9
|
)
|
|
7
|
9
|
(2)
|
(22.2
|
)
|
|
Other
|
4,604
|
|
3,953
|
|
651
|
|
16.5
|
|
|
6
|
6
|
—
|
|
—
|
|
|
Other operating revenues (d)
|
—
|
|
—
|
|
—
|
|
—
|
|
|
36
|
(1)
|
37
|
Large
|
|
|
Total
|
55,665
|
|
65,248
|
|
(9,583
|
)
|
(14.7
|
)%
|
|
$275
|
$264
|
$11
|
4.2
|
%
|
|
|
|
|
(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 12.1 percent in the three months ended September 30, 2019 compared with the 2018 period, reflecting primarily increased volumes attributable to the growth in the number of gas customers.
|
|
|
|
|
(c)
|
Includes 1,064 thousands and 681 thousands of Dt for the 2019 and 2018 periods, respectively, which are also reflected in firm transportation and other.
|
|
|
|
|
(d)
|
Other gas operating revenues generally reflect changes in the revenue decoupling mechanism and weather normalization clause current asset or regulatory liability and changes in regulatory assets and liabilities in accordance with other provisions of the company’s rate plans.
|
Operating revenues increased $11 million in the three months ended September 30, 2019 compared with the 2018 period due primarily to an increase in revenues from the rate plan ($28 million), offset, in part, by lower gas purchased for resale expense ($14 million).
Gas purchased for resale decreased $14 million in the three months ended September 30, 2019 compared with the 2018 period due to lower unit costs ($11 million) and purchased volumes ($3 million).
Other operations and maintenance expenses increased $1 million in the three months ended September 30, 2019 compared with the 2018 period due primarily to higher stock-based compensation ($2 million) and municipal infrastructure support costs ($2 million), offset, in part, by surcharges for assessments and fees that are collected in revenues from customers ($3 million).
Depreciation and amortization increased $6 million in the three months ended September 30, 2019 compared with the 2018 period due primarily to higher gas utility plant balances.
Taxes, other than income taxes increased $8 million in the three months ended September 30, 2019 compared with the 2018 period due primarily to higher property taxes ($7 million) and lower deferral of under-collected property taxes ($2 million), offset, in part, by the reduction in the sales and use tax reserve upon conclusion of the audit assessment ($1 million).
Steam
CECONY’s results of steam operations for the three months ended September 30, 2019 compared with the 2018 period were as follows:
|
|
|
|
|
|
|
|
|
|
For the Three Months Ended
|
|
|
(Millions of Dollars)
|
September 30, 2019
|
September 30, 2018
|
Variation
|
|
|
Operating revenues
|
$58
|
$64
|
$(6)
|
|
Purchased power
|
5
|
7
|
(2)
|
|
Fuel
|
4
|
5
|
(1)
|
|
Other operations and maintenance
|
45
|
47
|
(2)
|
|
Depreciation and amortization
|
22
|
22
|
—
|
|
|
Taxes, other than income taxes
|
38
|
35
|
3
|
|
Steam operating income
|
$(56)
|
$(52)
|
$(4)
|
CECONY’s steam sales and deliveries for the three months ended September 30, 2019 compared with the 2018 period were:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Millions of Pounds Delivered
|
|
Revenues in Millions
|
|
|
For the Three Months Ended
|
|
|
For the Three Months Ended
|
|
|
Description
|
September 30, 2019
|
|
September 30, 2018
|
|
Variation
|
|
Percent
Variation
|
|
|
September 30, 2019
|
September 30, 2018
|
Variation
|
|
Percent
Variation
|
|
|
General
|
6
|
|
12
|
|
(6
|
)
|
(50.0
|
)%
|
|
$2
|
$2
|
|
$—
|
|
—
|
%
|
|
Apartment house
|
722
|
|
781
|
|
(59
|
)
|
(7.6
|
)
|
|
13
|
16
|
(3)
|
(18.8
|
)
|
|
Annual power
|
2,443
|
|
2,711
|
|
(268
|
)
|
(9.9
|
)
|
|
36
|
45
|
(9)
|
(20.0
|
)
|
|
Other operating revenues (a)
|
—
|
|
—
|
|
—
|
|
—
|
|
|
7
|
1
|
6
|
Large
|
|
|
Total
|
3,171
|
|
3,504
|
|
(333
|
)
|
(9.5
|
)%
|
(b)
|
$58
|
$64
|
$(6)
|
(9.4
|
)%
|
|
|
|
|
(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 7.0 percent in the three months ended September 30, 2019 compared with the 2018 period.
|
Operating revenues decreased $6 million in the three months ended September 30, 2019 compared with the 2018 period due primarily to a higher reserve related to steam earnings sharing ($4 million), lower purchased power expenses ($2 million) and fuel expenses ($1 million).
Purchased power decreased $2 million in the three months ended September 30, 2019 compared with the 2018 period due to lower unit costs ($1 million) and purchased volumes ($1 million).
Fuel expenses decreased $1 million in the three months ended September 30, 2019 compared with the 2018 period due to lower unit costs.
Other operations and maintenance expenses decreased $2 million in the three months ended September 30, 2019 compared with the 2018 period due primarily to the absence of property damage, clean-up and other response costs related to a steam main rupture in 2018 ($9 million), offset, in part, by higher municipal infrastructure support costs ($3 million), costs for pension and other postretirement benefits ($2 million) and stock-based compensation ($1 million).
Taxes, other than income taxes increased $3 million in the three months ended September 30, 2019 compared with the 2018 period due primarily to higher property taxes.
Other Income (Deductions)
Other income (deductions) increased $24 million in the three months ended September 30, 2019 compared with the 2018 period due primarily to lower costs associated with components of pension and other postretirement benefits other than service cost.
Net Interest Expense
Net interest expense increased $6 million in the three months ended September 30, 2019 compared with the 2018 period due primarily to an increase in interest accrued on the TCJA related regulatory liability.
Income Tax Expense
Income taxes decreased $6 million in the three months ended September 30, 2019 compared with the 2018 period due primarily to lower income before income tax expense ($5 million), lower state income taxes ($1 million) and an increase in the amortization of excess deferred federal income taxes due to the TCJA ($4 million), offset, in part, by lower tax benefits in 2019 for plant-related flow through items ($2 million) and higher non-deductible business expenses in the 2018 federal tax return due to the TCJA ($3 million). CECONY deferred as a regulatory liability its estimated net benefits for the 2018 period under the TCJA and continued to defer its estimated net benefits in 2019 for only its electric service. See “Other Regulatory Matters” in Note B to the Third Quarter Financial Statements.
O&R
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
For the Three Months Ended
September 30, 2019
|
|
For the Three Months Ended
September 30, 2018
|
|
|
|
(Millions of Dollars)
|
Electric
|
|
Gas
|
|
2019 Total
|
Electric
|
|
Gas
|
|
2018 Total
|
2019-2018
Variation
|
|
Operating revenues
|
$210
|
$31
|
$241
|
$212
|
$34
|
$246
|
$(5)
|
|
Purchased power
|
61
|
—
|
|
61
|
73
|
—
|
|
73
|
(12)
|
|
Gas purchased for resale
|
—
|
|
10
|
10
|
—
|
|
12
|
12
|
(2)
|
|
Other operations and maintenance
|
63
|
18
|
81
|
60
|
20
|
80
|
1
|
|
Depreciation and amortization
|
16
|
6
|
22
|
14
|
5
|
19
|
3
|
|
Taxes, other than income taxes
|
14
|
7
|
21
|
13
|
7
|
20
|
1
|
|
Operating income
|
$56
|
$(10)
|
$46
|
$52
|
$(10)
|
$42
|
$4
|
Electric
O&R’s results of electric operations for the three months ended September 30, 2019 compared with the 2018 period were as follows:
|
|
|
|
|
|
|
|
|
For the Three Months Ended
|
|
|
(Millions of Dollars)
|
September 30, 2019
|
September 30, 2018
|
Variation
|
|
Operating revenues
|
$210
|
$212
|
$(2)
|
|
Purchased power
|
61
|
73
|
(12)
|
|
Other operations and maintenance
|
63
|
60
|
3
|
|
Depreciation and amortization
|
16
|
14
|
2
|
|
Taxes, other than income taxes
|
14
|
13
|
1
|
|
Electric operating income
|
$56
|
$52
|
$4
|
O&R’s electric sales and deliveries for the three months ended September 30, 2019 compared with the 2018 period were:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Millions of kWh Delivered
|
|
Revenues in Millions (a)
|
|
|
For the Three Months Ended
|
|
|
For the Three Months Ended
|
|
|
Description
|
September 30, 2019
|
|
September 30, 2018
|
|
Variation
|
|
Percent
Variation
|
|
|
September 30, 2019
|
September 30, 2018
|
Variation
|
Percent
Variation
|
|
|
Residential/Religious (b)
|
586
|
|
595
|
|
(9
|
)
|
(1.5
|
)%
|
|
$106
|
$115
|
$(9)
|
(7.8
|
)%
|
|
Commercial/Industrial
|
235
|
|
219
|
|
16
|
|
7.3
|
|
|
36
|
34
|
2
|
5.9
|
|
|
Retail choice customers
|
796
|
|
864
|
|
(68
|
)
|
(7.9
|
)
|
|
62
|
67
|
(5)
|
(7.5
|
)
|
|
Public authorities
|
30
|
|
32
|
|
(2
|
)
|
(6.3
|
)
|
|
2
|
4
|
(2)
|
(50.0
|
)
|
|
Other operating revenues (c)
|
—
|
|
—
|
|
—
|
|
—
|
|
|
4
|
(8)
|
12
|
Large
|
|
|
Total
|
1,647
|
|
1,710
|
|
(63
|
)
|
(3.7
|
)%
|
(d)
|
$210
|
$212
|
$(2)
|
(0.9
|
)%
|
|
|
|
|
(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 0.8 percent in the three months ended September 30, 2019 compared with the 2018 period.
|
Operating revenues decreased $2 million in the three months ended September 30, 2019 compared with the 2018 period due primarily to lower purchased power expenses ($12 million), offset, in part, by higher revenues from the New York electric rate plan ($16 million).
Purchased power expenses decreased $12 million in the three months ended September 30, 2019 compared with the 2018 period due to lower unit costs ($11 million) and purchased volumes ($1 million).
Other operations and maintenance expenses increased $3 million in the three months ended September 30, 2019 compared with the 2018 period due primarily to the deferral as a regulatory asset of costs for storm preparation in 2018 ($5 million), higher storm-related costs ($1 million), higher uncollectible accounts ($1 million), and higher stock-based compensation ($1 million), offset, in part, by the reduction of a regulatory asset associated with certain site investigation and remediation costs in 2018 ($6 million).
Depreciation and amortization increased $2 million in the three months ended September 30, 2019 compared with the 2018 period due primarily to higher electric utility plant balances.
Taxes, other than income taxes increased $1 million in the three months ended September 30, 2019 compared with the 2018 period due primarily to higher property taxes.
Gas
O&R’s results of gas operations for the three months ended September 30, 2019 compared with the 2018 period were as follows:
|
|
|
|
|
|
|
|
|
|
|
For the Three Months Ended
|
|
|
(Millions of Dollars)
|
September 30, 2019
|
September 30, 2018
|
Variation
|
|
|
Operating revenues
|
$31
|
$34
|
$(3)
|
|
Gas purchased for resale
|
10
|
12
|
(2)
|
|
Other operations and maintenance
|
18
|
20
|
(2)
|
|
Depreciation and amortization
|
6
|
5
|
1
|
|
Taxes, other than income taxes
|
7
|
7
|
—
|
|
|
Gas operating income
|
$(10)
|
$(10)
|
|
$—
|
|
O&R’s gas sales and deliveries, excluding off-system sales, for the three months ended September 30, 2019 compared with the 2018 period were:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Thousands of Dt Delivered
|
|
Revenues in Millions (a)
|
|
|
For the Three Months Ended
|
|
|
For the Three Months Ended
|
|
|
Description
|
September 30, 2019
|
|
September 30, 2018
|
|
Variation
|
|
Percent
Variation
|
|
|
September 30, 2019
|
|
September 30, 2018
|
|
Variation
|
|
Percent
Variation
|
|
|
Residential
|
621
|
|
605
|
|
16
|
|
2.6
|
%
|
|
$11
|
$13
|
$(2)
|
(15.4
|
)%
|
|
General
|
161
|
|
202
|
|
(41
|
)
|
(20.3
|
)
|
|
1
|
3
|
(2)
|
(66.7
|
)
|
|
Firm transportation
|
851
|
|
795
|
|
56
|
|
7.0
|
|
|
6
|
8
|
(2)
|
(25.0
|
)
|
|
Total firm sales and transportation
|
1,633
|
|
1,602
|
|
31
|
|
1.9
|
|
(b)
|
18
|
24
|
(6)
|
(25.0
|
)
|
|
Interruptible sales
|
798
|
|
772
|
|
26
|
|
3.4
|
|
|
1
|
1
|
—
|
|
—
|
|
|
Generation plants
|
6
|
|
1
|
|
5
|
|
Large
|
|
|
—
|
|
—
|
|
—
|
|
—
|
|
|
Other
|
74
|
|
62
|
|
12
|
|
19.4
|
|
|
1
|
—
|
|
1
|
—
|
|
|
Other gas revenues
|
—
|
|
—
|
|
—
|
|
—
|
|
|
11
|
9
|
2
|
22.2
|
|
|
Total
|
2,511
|
|
2,437
|
|
74
|
|
3.0
|
%
|
|
$31
|
$34
|
$(3)
|
(8.8
|
)%
|
|
|
|
|
(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 5.2 percent in the three months ended September 30, 2019 compared with the 2018 period.
|
Operating revenues decreased $3 million in the three months ended September 30, 2019 compared with the 2018 period due primarily to lower gas purchased for resale ($2 million) and lower revenues from the New York gas rate plan ($1 million).
Gas purchased for resale decreased $2 million in the three months ended September 30, 2019 compared with the 2018 period due to lower purchased volumes ($1 million) and unit costs ($1 million).
Other operations and maintenance expenses decreased $2 million in the three months ended September 30, 2019 compared with the 2018 period due primarily to the reduction of a regulatory asset associated with certain site investigation and remediation costs in 2018.
Depreciation and amortization increased $1 million in the three months ended September 30, 2019 compared with the 2018 period due primarily to higher gas utility plant balances.
Income Tax Expense
Income taxes increased $2 million in the three months ended September 30, 2019 compared with the 2018 period due primarily to higher income before income tax expense ($2 million). O&R deferred as a regulatory liability its estimated net benefits for the 2018 period under the TCJA. See “Other Regulatory Matters” in Note B to the Third Quarter Financial Statements.
Clean Energy Businesses
The Clean Energy Businesses’ results of operations for the three months ended September 30, 2019 compared with the 2018 period were as follows:
|
|
|
|
|
|
|
|
|
For the Three Months Ended
|
|
|
(Millions of Dollars)
|
September 30, 2019
|
September 30, 2018
|
Variation
|
|
Operating revenues
|
$247
|
$181
|
$66
|
|
Gas purchased for resale
|
36
|
85
|
(49)
|
|
Other operations and maintenance
|
53
|
50
|
3
|
|
Depreciation and amortization
|
53
|
18
|
35
|
|
Taxes, other than income taxes
|
5
|
3
|
2
|
|
Operating income
|
$100
|
$25
|
$75
|
Operating revenues increased $66 million in the three months ended September 30, 2019 compared with the 2018 period due primarily to higher renewable electric production project revenues resulting from the December 2018 acquisition of Sempra Solar Holdings, LLC, including the consolidation of certain jointly-owned projects that were
previously accounted for as equity method investments ($126 million). Wholesale revenues decreased ($55 million) due to lower sales volumes, energy services revenues decreased ($12 million) and net mark-to-market values increased ($7 million).
Gas purchased for resale decreased $49 million in the three months ended September 30, 2019 compared with the 2018 period due to lower purchased volumes.
Other operations and maintenance expenses increased $3 million in the three months ended September 30, 2019 compared with the 2018 period due primarily to higher costs associated with additional renewable electric production projects in operation resulting from the December 2018 acquisition of Sempra Solar Holdings, LLC ($12 million), offset, in part, by lower energy services costs ($9 million).
Depreciation and amortization increased $35 million in the three months ended September 30, 2019 compared with the 2018 period due primarily to an increase in renewable electric production projects resulting from the December 2018 acquisition of Sempra Solar Holdings, LLC (including the consolidation of certain jointly-owned projects that the Clean Energy Businesses previously accounted for as equity method investments).
Taxes, other than income taxes increased $2 million in the three months ended September 30, 2019 compared with the 2018 period due primarily to higher property taxes.
Other Income (Deductions)
Other income (deductions) decreased $17 million in the three months ended September 30, 2019 compared with the 2018 period due primarily to the absence in 2019 of equity income from certain jointly-owned projects that were accounted for as equity investments in 2018 but consolidated after the December 2018 acquisition of Sempra Solar Holdings, LLC.
Net Interest Expense
Net interest expense increased $48 million in the three months ended September 30, 2019 compared with the 2018 period due primarily to an increase in debt resulting from the December 2018 acquisition of Sempra Solar Holdings, LLC, including $825 million that was borrowed to fund a portion of the purchase price, $576 million of Sempra Solar Holdings, LLC subsidiaries' project debt that was outstanding at the time of the acquisition and the consolidation of $506 million of project debt of certain jointly-owned projects that the Clean Energy Businesses previously accounted for as equity method investments.
Income Tax Expense
Income taxes decreased $15 million in the three months ended September 30, 2019 compared with the 2018 period due primarily to lower income before income tax expense (excluding income attributable to non-controlling interest) ($4 million), higher renewable energy credits ($3 million), lower state income taxes ($1 million) and adjustments for prior period federal income tax returns primarily due to increased research and development credits ($14 million), offset, in part, by an increase in uncertain tax positions ($7 million).
Income Attributable to Non-Controlling Interest
Income attributable to non-controlling interest increased $30 million in the three months ended September 30, 2019 compared with the 2018 period due primarily to the income attributable in the 2019 period to a tax equity investor in renewable electric production projects accounted for under the HLBV method of accounting. See Note N to the Third Quarter Financial Statements.
Con Edison Transmission
Income Tax Expense
Income taxes increased $1 million in the three months ended September 30, 2019 compared with the 2018 period due primarily to higher income before income tax expense.
Other
Income Tax Expense
Income taxes decreased $41 million in the three months ended September 30, 2019 compared with the 2018 period due primarily to the absence of the TCJA re-measurement of deferred tax assets with Con Edison’s 2017 federal net operating loss carryforward into 2018 ($42 million), offset, in part, by higher state income taxes ($1 million).
The Companies’ results of operations for the nine months ended September 30, 2019 and 2018 were as follows:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
CECONY
|
O&R
|
Clean Energy Businesses
|
Con Edison
Transmission
|
Other (a)
|
Con Edison (b)
|
|
(Millions of Dollars)
|
2019
|
|
2018
|
|
2019
|
|
2018
|
|
2019
|
|
2018
|
|
2019
|
|
2018
|
|
2019
|
|
2018
|
|
2019
|
2018
|
|
|
Operating revenues
|
$8,248
|
$8,121
|
$678
|
$691
|
$696
|
$573
|
$3
|
$3
|
$(2)
|
|
$—
|
|
$9,623
|
$9,388
|
|
Purchased power
|
1,058
|
1,117
|
146
|
167
|
—
|
|
2
|
—
|
|
—
|
|
(1)
|
1
|
1,203
|
1,287
|
|
Fuel
|
163
|
201
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
163
|
201
|
|
Gas purchased for resale
|
445
|
457
|
68
|
60
|
159
|
219
|
—
|
|
—
|
|
(1)
|
—
|
|
671
|
736
|
|
Other operations and maintenance
|
2,022
|
1,926
|
225
|
234
|
168
|
226
|
7
|
7
|
—
|
|
(4)
|
2,422
|
2,389
|
|
Depreciation and amortization
|
1,020
|
949
|
63
|
57
|
169
|
55
|
1
|
1
|
—
|
|
(1)
|
1,253
|
1,061
|
|
Taxes, other than income taxes
|
1,715
|
1,621
|
63
|
63
|
17
|
12
|
—
|
|
—
|
|
5
|
11
|
1,800
|
1,707
|
|
Operating income
|
1,825
|
1,850
|
113
|
110
|
183
|
59
|
(5)
|
(5)
|
(5)
|
(7)
|
2,111
|
2,007
|
|
Other income less deductions
|
(31)
|
(99)
|
(8)
|
(15)
|
3
|
34
|
76
|
67
|
(9)
|
(16)
|
31
|
(29)
|
|
Net interest expense
|
545
|
508
|
30
|
29
|
170
|
39
|
18
|
14
|
9
|
7
|
772
|
597
|
|
Income before income tax expense
|
1,249
|
1,243
|
75
|
66
|
16
|
54
|
53
|
48
|
(23)
|
(30)
|
1,370
|
1,381
|
|
Income tax expense
|
271
|
274
|
15
|
14
|
(44)
|
(4)
|
15
|
13
|
(14)
|
33
|
243
|
330
|
|
Net income
|
$978
|
$969
|
$60
|
$52
|
$60
|
$58
|
$38
|
$35
|
$(9)
|
$(63)
|
$1,127
|
$1,051
|
|
Income attributable to non-controlling interest
|
—
|
|
—
|
|
—
|
|
—
|
|
79
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
79
|
—
|
|
|
Net income for common stock
|
$978
|
$969
|
$60
|
$52
|
$(19)
|
$58
|
$38
|
$35
|
$(9)
|
$(63)
|
$1,048
|
$1,051
|
|
|
|
|
(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, 2019
|
|
For the Nine Months Ended
September 30, 2018
|
|
|
|
(Millions of Dollars)
|
Electric
|
|
Gas
|
|
Steam
|
|
2019 Total
|
Electric
|
|
Gas
|
|
Steam
|
|
2018 Total
|
2019-2018
Variation
|
|
Operating revenues
|
$6,174
|
$1,605
|
$469
|
$8,248
|
$6,107
|
$1,540
|
$474
|
$8,121
|
$127
|
|
Purchased power
|
1,033
|
—
|
|
25
|
1,058
|
1,091
|
—
|
|
26
|
1,117
|
(59)
|
|
Fuel
|
74
|
—
|
|
89
|
163
|
118
|
—
|
|
83
|
201
|
(38)
|
|
Gas purchased for resale
|
—
|
|
445
|
—
|
|
445
|
—
|
|
457
|
—
|
|
457
|
(12)
|
|
Other operations and maintenance
|
1,582
|
306
|
134
|
2,022
|
1,480
|
315
|
131
|
1,926
|
96
|
|
Depreciation and amortization
|
785
|
168
|
67
|
1,020
|
732
|
152
|
65
|
949
|
71
|
|
Taxes, other than income taxes
|
1,326
|
272
|
117
|
1,715
|
1,265
|
247
|
109
|
1,621
|
94
|
|
Operating income
|
$1,374
|
$414
|
$37
|
$1,825
|
$1,421
|
$369
|
$60
|
$1,850
|
$(25)
|
Electric
CECONY’s results of electric operations for the nine months ended September 30, 2019 compared with the 2018 period were as follows:
|
|
|
|
|
|
|
|
|
For the Nine Months Ended
|
|
|
(Millions of Dollars)
|
September 30, 2019
|
September 30, 2018
|
Variation
|
|
Operating revenues
|
$6,174
|
$6,107
|
$67
|
|
Purchased power
|
1,033
|
1,091
|
(58)
|
|
Fuel
|
74
|
118
|
(44)
|
|
Other operations and maintenance
|
1,582
|
1,480
|
102
|
|
Depreciation and amortization
|
785
|
732
|
53
|
|
Taxes, other than income taxes
|
1,326
|
1,265
|
61
|
|
Electric operating income
|
$1,374
|
$1,421
|
$(47)
|
CECONY’s electric sales and deliveries for the nine months ended September 30, 2019 compared with the 2018 period were:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Millions of kWh Delivered
|
|
Revenues in Millions (a)
|
|
|
For the Nine Months Ended
|
|
|
For the Nine Months Ended
|
|
|
Description
|
September 30, 2019
|
|
September 30, 2018
|
|
Variation
|
Percent
Variation
|
|
September 30, 2019
|
September 30, 2018
|
Variation
|
Percent
Variation
|
|
Residential/Religious (b)
|
8,203
|
|
8,374
|
|
(171
|
)
|
(2.0
|
)%
|
|
$2,060
|
$2,211
|
$(151)
|
(6.8
|
)%
|
|
Commercial/Industrial
|
7,574
|
|
7,343
|
|
231
|
|
3.1
|
|
|
1,405
|
1,433
|
(28)
|
(2.0
|
)
|
|
Retail choice customers
|
18,968
|
|
19,996
|
|
(1,028
|
)
|
(5.1
|
)
|
|
1,879
|
2,030
|
(151)
|
(7.4
|
)
|
|
NYPA, Municipal Agency and other sales
|
7,477
|
|
7,747
|
|
(270
|
)
|
(3.5
|
)
|
|
511
|
509
|
2
|
0.4
|
|
|
Other operating revenues (c)
|
—
|
|
—
|
|
—
|
|
—
|
|
|
319
|
(76)
|
395
|
Large
|
|
|
Total
|
42,222
|
|
43,460
|
|
(1,238
|
)
|
(2.8
|
)%
|
(d)
|
$6,174
|
$6,107
|
$67
|
1.1
|
%
|
|
|
|
|
(a)
|
Revenues from electric sales are subject to a revenue decoupling mechanism, as a result of which delivery revenues generally are not affected by changes in delivery volumes from levels assumed when rates were approved.
|
|
|
|
|
(b)
|
“Residential/Religious” generally includes single-family dwellings, individual apartments in multi-family dwellings, religious organizations and certain other not-for-profit organizations.
|
|
|
|
|
(c)
|
Other electric operating revenues generally reflect changes in the revenue decoupling mechanism current asset or regulatory liability and changes in regulatory assets and liabilities in accordance with other provisions of the company’s rate plans.
|
|
|
|
|
(d)
|
After adjusting for variations, primarily weather and billing days, electric delivery volumes in CECONY’s service area decreased 1.0 percent in the nine months ended September 30, 2019 compared with the 2018 period.
|
Operating revenues increased $67 million in the nine months ended September 30, 2019 compared with the 2018 period due primarily to an increase in revenues from the rate plan ($161 million), offset, in part, by lower purchased power expenses ($58 million) and fuel expenses ($44 million).
Purchased power expenses decreased $58 million in the nine months ended September 30, 2019 compared with the 2018 period due to lower unit costs ($152 million), offset, in part, by higher purchased volumes ($94 million).
Fuel expenses decreased $44 million in the nine months ended September 30, 2019 compared with the 2018 period due to lower unit costs ($40 million) and purchased volumes from the company’s electric generating facilities ($4 million).
Other operations and maintenance expenses increased $102 million in the nine months ended September 30, 2019 compared with the 2018 period due primarily to higher costs for pension and other postretirement benefits ($49 million), surcharges for assessments and fees that are collected in revenues from customers ($36 million) and higher stock-based compensation ($24 million).
Depreciation and amortization increased $53 million in the nine months ended September 30, 2019 compared with the 2018 period due primarily to higher electric utility plant balances.
Taxes, other than income taxes increased $61 million in the nine months ended September 30, 2019 compared with the 2018 period due primarily to higher property taxes ($53 million), the absence of a New York State sales and use tax refund received in 2018 ($14 million) and lower deferral of under-collected property taxes ($5 million), offset, in part, by the reduction in the sales and use tax reserve upon conclusion of the audit assessment ($6 million) and lower state and local taxes ($5 million).
Gas
CECONY’s results of gas operations for the nine months ended September 30, 2019 compared with the 2018 period were as follows:
|
|
|
|
|
|
|
|
|
For the Nine Months Ended
|
|
|
(Millions of Dollars)
|
September 30, 2019
|
September 30, 2018
|
Variation
|
|
Operating revenues
|
$1,605
|
$1,540
|
$65
|
|
Gas purchased for resale
|
445
|
457
|
(12)
|
|
Other operations and maintenance
|
306
|
315
|
(9)
|
|
Depreciation and amortization
|
168
|
152
|
16
|
|
Taxes, other than income taxes
|
272
|
247
|
25
|
|
Gas operating income
|
$414
|
$369
|
$45
|
CECONY’s gas sales and deliveries, excluding off-system sales, for the nine months ended September 30, 2019 compared with the 2018 period were:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Thousands of Dt Delivered
|
|
Revenues in Millions (a)
|
|
|
For the Nine Months Ended
|
|
|
For the Nine Months Ended
|
|
|
Description
|
September 30, 2019
|
|
September 30, 2018
|
|
Variation
|
Percent
Variation
|
|
September 30, 2019
|
September 30, 2018
|
Variation
|
Percent
Variation
|
|
Residential
|
41,035
|
|
43,731
|
|
(2,696
|
)
|
(6.2
|
)%
|
|
$724
|
$728
|
$(4)
|
(0.5
|
)%
|
|
General
|
25,018
|
|
25,894
|
|
(876
|
)
|
(3.4
|
)
|
|
299
|
298
|
1
|
0.3
|
|
|
Firm transportation
|
60,590
|
|
61,628
|
|
(1,038
|
)
|
(1.7
|
)
|
|
444
|
448
|
(4)
|
(0.9
|
)
|
|
Total firm sales and transportation
|
126,643
|
|
131,253
|
|
(4,610
|
)
|
(3.5
|
)
|
(b)
|
1,467
|
1,474
|
(7)
|
(0.5
|
)
|
|
Interruptible sales (c)
|
7,375
|
|
4,956
|
|
2,419
|
|
48.8
|
|
|
34
|
31
|
3
|
9.7
|
|
|
NYPA
|
30,296
|
|
27,528
|
|
2,768
|
|
10.1
|
|
|
2
|
2
|
—
|
|
—
|
|
|
Generation plants
|
41,545
|
|
55,949
|
|
(14,404
|
)
|
(25.7
|
)
|
|
18
|
20
|
(2)
|
(10.0
|
)
|
|
Other
|
16,058
|
|
15,399
|
|
659
|
|
4.3
|
|
|
24
|
24
|
—
|
|
—
|
|
|
Other operating revenues (d)
|
—
|
|
—
|
|
—
|
|
—
|
|
|
60
|
(11)
|
71
|
Large
|
|
|
Total
|
221,917
|
|
235,085
|
|
(13,168
|
)
|
(5.6
|
)%
|
|
$1,605
|
$1,540
|
$65
|
4.2
|
%
|
|
|
|
|
(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 1.9 percent in the nine months ended September 30, 2019 compared with the 2018 period, reflecting primarily increased volumes attributable to the growth in the number of gas customers.
|
|
|
|
|
(c)
|
Includes 3,797 thousands and 1,798 thousands of Dt for the 2019 and 2018 periods, respectively, which are also reflected in firm transportation and other.
|
|
|
|
|
(d)
|
Other gas operating revenues generally reflect changes in the revenue decoupling mechanism and weather normalization clause current asset or regulatory liability and changes in regulatory assets and liabilities in accordance with other provisions of the company’s rate plans.
|
Operating revenues increased $65 million in the nine months ended September 30, 2019 compared with the 2018 period due primarily to an increase in revenues from the rate plan ($83 million), offset, in part, by lower gas purchased for resale expense ($12 million).
Gas purchased for resale decreased $12 million in the nine months ended September 30, 2019 compared with the 2018 period due to lower unit costs ($13 million), offset, in part, by higher purchased volumes ($1 million).
Other operations and maintenance expenses decreased $9 million in the nine months ended September 30, 2019 compared with the 2018 period due primarily to lower surcharges for assessments and fees that are collected in revenues from customers ($12 million) and equipment maintenance expenses ($4 million), offset, in part, by higher stock-based compensation ($5 million).
Depreciation and amortization increased $16 million in the nine months ended September 30, 2019 compared with the 2018 period due primarily to higher gas utility plant balances.
Taxes, other than income taxes increased $25 million in the nine months ended September 30, 2019 compared with the 2018 period due primarily to higher property taxes ($27 million), the absence of a New York State sales and use tax refund received in 2018 ($3 million) and higher state and local taxes ($1 million), offset, in part, by higher deferral of under-collected property taxes ($4 million) and the reduction in the sales and use tax reserve upon conclusion of the audit assessment ($1 million).
Steam
CECONY’s results of steam operations for the nine months ended September 30, 2019 compared with the 2018 period were as follows:
|
|
|
|
|
|
|
|
|
For the Nine Months Ended
|
|
|
(Millions of Dollars)
|
September 30, 2019
|
September 30, 2018
|
Variation
|
|
Operating revenues
|
$469
|
$474
|
$(5)
|
|
Purchased power
|
25
|
26
|
(1)
|
|
Fuel
|
89
|
83
|
6
|
|
Other operations and maintenance
|
134
|
131
|
3
|
|
Depreciation and amortization
|
67
|
65
|
2
|
|
Taxes, other than income taxes
|
117
|
109
|
8
|
|
Steam operating income
|
$37
|
$60
|
$(23)
|
CECONY’s steam sales and deliveries for the nine months ended September 30, 2019 compared with the 2018 period were:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Millions of Pounds Delivered
|
|
Revenues in Millions
|
|
|
For the Nine Months Ended
|
|
|
For the Nine Months Ended
|
|
|
Description
|
September 30, 2019
|
|
September 30, 2018
|
|
Variation
|
Percent
Variation
|
|
September 30, 2019
|
September 30, 2018
|
Variation
|
Percent
Variation
|
|
General
|
394
|
|
442
|
|
(48
|
)
|
(10.9
|
)%
|
|
$20
|
$23
|
$(3)
|
(13.0
|
)%
|
|
Apartment house
|
4,331
|
|
4,670
|
|
(339
|
)
|
(7.3
|
)
|
|
120
|
129
|
(9)
|
(7.0
|
)
|
|
Annual power
|
10,383
|
|
11,313
|
|
(930
|
)
|
(8.2
|
)
|
|
304
|
333
|
(29)
|
(8.7
|
)
|
|
Other operating revenues (a)
|
—
|
|
—
|
|
—
|
|
—
|
|
|
25
|
(11)
|
36
|
Large
|
|
|
Total
|
15,108
|
|
16,425
|
|
(1,317
|
)
|
(8.0
|
)%
|
(b)
|
$469
|
$474
|
$(5)
|
(1.1
|
)%
|
|
|
|
|
(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, 2019 compared with the 2018 period.
|
Operating revenues decreased $5 million in the nine months ended September 30, 2019 compared with the 2018 period due primarily to the impact of warmer winter weather ($21 million) and lower purchased power expenses ($1 million), offset, in part, by certain rate plan reconciliations ($12 million) and higher fuel expenses ($6 million).
Purchased power expenses decreased $1 million in the nine months ended September 30, 2019 compared with the 2018 period due to lower unit costs.
Fuel expenses increased $6 million in the nine months ended September 30, 2019 compared with the 2018 period due to higher unit costs ($9 million), offset, in part, by lower purchased volumes from the company’s steam generating facilities ($3 million).
Other operations and maintenance expenses increased $3 million in the nine months ended September 30, 2019 compared with the 2018 period due primarily to higher municipal infrastructure support costs ($6 million), higher costs for pension and other postretirement benefits ($5 million) and stock-based compensation ($2 million), offset, in part, by the absence of property damage, clean-up and other response costs related to a steam main rupture in 2018 ($7 million).
Depreciation and amortization increased $2 million in the nine months ended September 30, 2019 compared with the 2018 period due primarily to higher steam utility plant balances.
Taxes, other than income taxes increased $8 million in the nine months ended September 30, 2019 compared with the 2018 period due primarily to higher property taxes.
Other Income (Deductions)
Other income (deductions) increased $68 million in the nine months ended September 30, 2019 compared with the 2018 period due primarily to lower costs associated with components of pension and other postretirement benefits other than service cost.
Net Interest Expense
Net interest expense increased $37 million in the nine months ended September 30, 2019 compared with the 2018 period due primarily to higher interest expense for long-term ($10 million) and short-term ($7 million) debt, an increase in interest accrued on the TCJA related regulatory liability ($9 million) and interest accrued on the system benefit charge liability ($6 million).
Income Tax Expense
Income taxes decreased $3 million in the nine months ended September 30, 2019 compared with the 2018 period due primarily to an increase in the amortization of excess deferred federal income taxes due to the TCJA ($5 million) and higher research and development credits ($1 million), offset, in part, by lower tax benefits in 2019 for plant-related flow through items ($1 million) and higher non-deductible business expenses in the 2018 federal tax return due to the TCJA ($3 million). CECONY deferred as a regulatory liability its estimated net benefits for the 2018 period under the TCJA and continued to defer its estimated net benefits in 2019 for only its electric service. See “Other Regulatory Matters” in Note B to the Third Quarter Financial Statements.
O&R
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
For the Nine Months Ended
September 30, 2019
|
|
For the Nine Months Ended
September 30, 2018
|
|
|
|
(Millions of Dollars)
|
Electric
|
|
Gas
|
|
2019 Total
|
Electric
|
|
Gas
|
|
2018 Total
|
2019-2018
Variation
|
|
|
Operating revenues
|
$493
|
$185
|
$678
|
$505
|
$186
|
$691
|
$(13)
|
|
Purchased power
|
146
|
—
|
|
146
|
167
|
—
|
|
167
|
(21)
|
|
Gas purchased for resale
|
—
|
|
68
|
68
|
—
|
|
60
|
60
|
8
|
|
Other operations and maintenance
|
173
|
52
|
225
|
178
|
56
|
234
|
(9)
|
|
Depreciation and amortization
|
46
|
17
|
63
|
41
|
16
|
57
|
6
|
|
Taxes, other than income taxes
|
40
|
23
|
63
|
40
|
23
|
63
|
—
|
|
|
Operating income
|
$88
|
$25
|
$113
|
$79
|
$31
|
$110
|
|
$3
|
|
Electric
O&R’s results of electric operations for the nine months ended September 30, 2019 compared with the 2018 period were as follows:
|
|
|
|
|
|
|
|
|
|
For the Nine Months Ended
|
|
|
(Millions of Dollars)
|
September 30, 2019
|
September 30, 2018
|
Variation
|
|
|
Operating revenues
|
$493
|
$505
|
$(12)
|
|
Purchased power
|
146
|
167
|
(21)
|
|
Other operations and maintenance
|
173
|
178
|
(5)
|
|
Depreciation and amortization
|
46
|
41
|
5
|
|
Taxes, other than income taxes
|
40
|
40
|
—
|
|
|
Electric operating income
|
$88
|
$79
|
$9
|
O&R’s electric sales and deliveries for the nine months ended September 30, 2019 compared with the 2018 period were:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Millions of kWh Delivered
|
|
Revenues in Millions (a)
|
|
|
For the Nine Months Ended
|
|
|
For the Nine Months Ended
|
|
|
Description
|
September 30, 2019
|
|
September 30, 2018
|
|
Variation
|
|
Percent
Variation
|
|
September 30, 2019
|
September 30, 2018
|
Variation
|
Percent
Variation
|
|
Residential/Religious (b)
|
1,339
|
|
1,348
|
|
(9
|
)
|
(0.7
|
)%
|
|
$243
|
$260
|
$(17)
|
(6.5
|
)%
|
|
Commercial/Industrial
|
621
|
|
609
|
|
12
|
|
2.0
|
|
|
87
|
91
|
(4)
|
(4.4
|
)
|
|
Retail choice customers
|
2,194
|
|
2,274
|
|
(80
|
)
|
(3.5
|
)
|
|
147
|
158
|
(11)
|
(7.0
|
)
|
|
Public authorities
|
80
|
|
104
|
|
(24
|
)
|
(23.1
|
)
|
|
7
|
10
|
(3)
|
(30.0
|
)
|
|
Other operating revenues (c)
|
—
|
|
—
|
|
—
|
|
—
|
|
|
9
|
(14)
|
23
|
Large
|
|
|
Total
|
4,234
|
|
4,335
|
|
(101
|
)
|
(2.3
|
)%
|
(d)
|
$493
|
$505
|
$(12)
|
(2.4
|
)%
|
|
|
|
|
(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 1.7 percent in the nine months ended September 30, 2019 compared with the 2018 period.
|
Operating revenues decreased $12 million in the nine months ended September 30, 2019 compared with the 2018 period due primarily to lower purchased power expenses.
Purchased power expenses decreased $21 million in the nine months ended September 30, 2019 compared with the 2018 period due to lower unit costs ($22 million), offset, in part, by higher purchased volumes ($1 million).
Other operations and maintenance expenses decreased $5 million in the nine months ended September 30, 2019 compared with the 2018 period due primarily to the reduction of a regulatory asset associated with certain site investigation and remediation costs in 2018.
Depreciation and amortization increased $5 million in the nine months ended September 30, 2019 compared with the 2018 period due primarily to higher electric utility plant balances.
Gas
O&R’s results of gas operations for the nine months ended September 30, 2019 compared with the 2018 period were as follows:
|
|
|
|
|
|
|
|
|
|
For the Nine Months Ended
|
|
|
(Millions of Dollars)
|
September 30, 2019
|
September 30, 2018
|
Variation
|
|
|
Operating revenues
|
$185
|
$186
|
$(1)
|
|
Gas purchased for resale
|
68
|
60
|
8
|
|
Other operations and maintenance
|
52
|
56
|
(4)
|
|
Depreciation and amortization
|
17
|
16
|
1
|
|
Taxes, other than income taxes
|
23
|
23
|
—
|
|
|
Gas operating income
|
$25
|
$31
|
$(6)
|
O&R’s gas sales and deliveries, excluding off-system sales, for the nine months ended September 30, 2019 compared with the 2018 period were:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Thousands of Dt Delivered
|
|
Revenues in Millions (a)
|
|
|
For the Nine Months Ended
|
|
|
For the Nine Months Ended
|
|
|
Description
|
September 30, 2019
|
|
September 30, 2018
|
|
Variation
|
Percent
Variation
|
|
September 30, 2019
|
|
September 30, 2018
|
|
Variation
|
Percent
Variation
|
|
Residential
|
6,875
|
|
6,503
|
|
372
|
|
5.7
|
%
|
|
$98
|
$96
|
$2
|
2.1
|
%
|
|
General
|
1,608
|
|
1,502
|
|
106
|
|
7.1
|
|
|
18
|
18
|
—
|
|
—
|
|
|
Firm transportation
|
6,430
|
|
6,867
|
|
(437
|
)
|
(6.4
|
)
|
|
44
|
57
|
(13)
|
(22.8
|
)
|
|
Total firm sales and transportation
|
14,913
|
|
14,872
|
|
41
|
|
0.3
|
|
(b)
|
160
|
171
|
(11)
|
(6.4
|
)
|
|
Interruptible sales
|
2,690
|
|
2,842
|
|
(152
|
)
|
(5.3
|
)
|
|
4
|
5
|
(1)
|
(20.0
|
)
|
|
Generation plants
|
6
|
|
1
|
|
5
|
|
Large
|
|
|
—
|
|
—
|
|
—
|
|
—
|
|
|
Other
|
637
|
|
636
|
|
1
|
|
0.2
|
|
|
1
|
1
|
—
|
|
—
|
|
|
Other gas revenues
|
—
|
|
—
|
|
—
|
|
—
|
|
|
20
|
9
|
11
|
Large
|
|
Total
|
18,246
|
|
18,351
|
|
(105
|
)
|
(0.6
|
)%
|
|
$185
|
$186
|
$(1)
|
(0.5
|
)%
|
|
|
|
|
(a)
|
Revenues from New York gas sales are subject to a weather normalization clause and a revenue decoupling mechanism as a result of which delivery revenues are generally not affected by changes in delivery volumes from levels assumed when rates were approved.
|
|
|
|
|
(b)
|
After adjusting for weather and other variations, total firm sales and transportation volumes increased 1.8 percent in the nine months ended September 30, 2019 compared with 2018 period.
|
Operating revenues decreased $1 million in the nine months ended September 30, 2019 compared with the 2018 period due primarily to lower revenues from the New York gas rate plan ($7 million), offset, by an increase in gas purchased for resale ($8 million).
Gas purchased for resale increased $8 million in the nine months ended September 30, 2019 compared with the 2018 period due to higher unit costs ($6 million) and purchased volumes ($2 million).
Other operations and maintenance expenses decreased $4 million in the nine months ended September 30, 2019 compared with the 2018 period due primarily to the reduction of a regulatory asset associated with certain site investigation and remediation costs in 2018.
Depreciation and amortization increased $1 million in the nine months ended September 30, 2019 compared with the 2018 period due primarily to higher gas utility plant balances.
Income Tax Expense
Income taxes increased $1 million in the nine months ended September 30, 2019 compared with the 2018 period due primarily to higher income before income tax expense ($2 million), offset, in part, by an increase in amortization of excess deferred federal income taxes due to TCJA ($1 million).
Clean Energy Businesses
The Clean Energy Businesses’ results of operations for the nine months ended September 30, 2019 compared with the 2018 period were as follows:
|
|
|
|
|
|
|
|
|
|
For the Nine Months Ended
|
|
|
(Millions of Dollars)
|
September 30, 2019
|
|
September 30, 2018
|
Variation
|
|
Operating revenues
|
$696
|
$573
|
$123
|
|
Purchased power
|
—
|
|
2
|
(2)
|
|
Gas purchased for resale
|
159
|
219
|
(60)
|
|
Other operations and maintenance
|
168
|
226
|
(58)
|
|
Depreciation and amortization
|
169
|
55
|
114
|
|
Taxes, other than income taxes
|
17
|
12
|
5
|
|
Operating income
|
$183
|
$59
|
$124
|
Operating revenues increased $123 million in the nine months ended September 30, 2019 compared with the 2018 period due primarily to higher renewable electric production project revenues resulting from the December 2018
acquisition of Sempra Solar Holdings, LLC, including the consolidation of certain jointly-owned projects that were previously accounted for as equity method investments ($286 million), offset, in part, by lower engineering, procurement and construction services revenues due to the completion in 2018 of a solar electric production project developed for another company ($92 million). Wholesale revenues decreased ($66 million) due to lower sales volumes, energy services revenues decreased ($16 million) and net mark-to-market values increased ($12 million).
Purchased power expenses decreased $2 million in the nine months ended September 30, 2019 compared with the 2018 period due primarily to the absence in the 2019 period of the true-ups relating to the retail electric supply business sold in 2016.
Gas purchased for resale decreased $60 million in the nine months ended September 30, 2019 compared with the 2018 period due primarily to lower purchased volumes.
Other operations and maintenance expenses decreased $58 million in the nine months ended September 30, 2019 compared with the 2018 period due primarily to lower engineering, procurement and construction costs ($82 million) and lower energy services costs ($10 million), offset, in part, by higher costs associated with additional renewable electric production projects in operation resulting from the December 2018 acquisition of Sempra Solar Holdings, LLC ($34 million).
Depreciation and amortization increased $114 million in the nine months ended September 30, 2019 compared with the 2018 period due primarily to an increase in renewable electric production projects resulting from the December 2018 acquisition of Sempra Solar Holdings, LLC (including the consolidation of certain jointly-owned projects that the Clean Energy Businesses previously accounted for as equity method investments).
Taxes, other than income taxes increased $5 million in the nine months ended September 30, 2019 compared with the 2018 period due primarily to higher property taxes.
Other Income (Deductions)
Other income (deductions) decreased $31 million in the nine months ended September 30, 2019 compared with the 2018 period due primarily to the absence in 2019 of equity income from certain jointly-owned projects that were accounted for as equity investments in 2018 but consolidated after the December 2018 acquisition of Sempra Solar Holdings, LLC.
Net Interest Expense
Net interest expense increased $131 million in the nine months ended September 30, 2019 compared with the 2018 period due primarily to an increase in debt resulting from the December 2018 acquisition of Sempra Solar Holdings, LLC, including $825 million that was borrowed to fund a portion of the purchase price, $576 million of Sempra Solar Holdings, LLC subsidiaries' project debt that was outstanding at the time of the acquisition and the consolidation of $506 million of project debt of certain jointly-owned projects that the Clean Energy Businesses previously accounted for as equity method investments.
Income Tax Expense
Income taxes decreased $40 million in the nine months ended September 30, 2019 compared with the 2018 period due primarily to lower income before income tax expense (excluding income attributable to non-controlling interest) ($25 million), higher renewable energy credits ($7 million), lower state income taxes ($4 million) and adjustments for prior period federal income tax returns primarily due to increased research and development credits ($11 million), offset, in part, by an increase in uncertain tax positions ($7 million).
Income Attributable to Non-Controlling Interest
Income attributable to non-controlling interest increased $79 million in the nine months ended September 30, 2019 compared with the 2018 period due primarily to the income attributable in the 2019 period to a tax equity investor in renewable electric production projects accounted for under the HLBV method of accounting. See Note N to the Third Quarter Financial Statements.
Con Edison Transmission
Other Income (Deductions)
Other income (deductions) increased $9 million in the nine months ended September 30, 2019 compared with the 2018 period due primarily to increased earnings from equity investments in Mountain Valley Pipeline, LLC.
Income Tax Expense
Income taxes increased $2 million in the nine months ended September 30, 2019 compared with the 2018 period due primarily to higher income before income tax expense.
Other
Income Tax Expense
Income taxes decreased $47 million in the nine months ended September 30, 2019 compared with the 2018 period due primarily to the absence of the TCJA re-measurement of deferred tax assets associated with Con Edison’s 2017 federal net operating loss carryforward into 2018 ($42 million) and lower state income taxes ($5 million).
Liquidity and Capital Resources
The Companies’ liquidity reflects cash flows from operating, investing and financing activities, as shown on their respective consolidated statement of cash flows and as discussed below.
The Companies’ cash, temporary cash investments and restricted cash resulting from operating, investing and financing activities for the nine months ended September 30, 2019 and 2018 are summarized as follows:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
For the Nine Months Ended September 30,
|
|
|
CECONY
|
O&R
|
Clean Energy Businesses
|
Con Edison
Transmission
|
Other (a)
|
Con Edison (b)
|
|
(Millions of Dollars)
|
2019
|
2018
|
2019
|
2018
|
2019
|
2018
|
2019
|
|
2018
|
|
2019
|
|
2018
|
2019
|
2018
|
|
Operating activities
|
$1,490
|
$1,085
|
$168
|
$102
|
$285
|
$(7)
|
$150
|
$114
|
$(133)
|
$306
|
$1,960
|
$1,600
|
|
Investing activities
|
(2,437)
|
(2,498)
|
(163)
|
(147)
|
(142)
|
(195)
|
(143)
|
(106)
|
1
|
|
(1)
|
(2,884)
|
(2,947)
|
|
Financing activities
|
144
|
700
|
(20)
|
22
|
(79)
|
198
|
(9)
|
(8)
|
135
|
(164)
|
171
|
748
|
|
Net change for the period
|
(803)
|
(713)
|
(15)
|
(23)
|
64
|
(4)
|
(2)
|
—
|
|
3
|
141
|
(753)
|
(599)
|
|
Balance at beginning of period
|
818
|
730
|
52
|
47
|
126
|
56
|
2
|
2
|
8
|
9
|
1,006
|
844
|
|
Balance at end of period (c)
|
$15
|
$17
|
$37
|
$24
|
$190
|
$52
|
|
$—
|
|
$2
|
$11
|
$150
|
$253
|
$245
|
(a) Includes parent company and consolidation adjustments.
(b) Represents the consolidated results of operations of Con Edison and its businesses.
(c) See "Reconciliation of Cash, Temporary Cash Investments and Restricted Cash" in Note A to the Third Quarter Financial Statements.
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. Pursuant to their rate plans, the Utilities have recovered from customers a portion of the tax liability they will pay in the future as a result of temporary differences between the book and tax basis of assets and liabilities. These temporary differences affect the timing of cash flows, but not net income, as the Companies are required to record deferred tax assets and liabilities at the current corporate tax rate for the temporary differences. For the Utilities, credits to their customers of the net benefits of the TCJA, including the reduction of the corporate tax rate to 21 percent, decrease cash flows from operating activities. See “Other Regulatory Matters” in Note B to the Third Quarter Financial Statements.
Net income is the result of cash and non-cash (or accrual) transactions. Only cash transactions affect the Companies’ cash flows from operating activities. Principal non-cash charges or credits include depreciation, deferred income tax expense, amortizations of certain regulatory assets and liabilities, and accrued unbilled revenue. Non-cash charges or credits may also be accrued under the revenue decoupling and cost reconciliation mechanisms in the Utilities’ New York electric and gas rate plans.
Net cash flows from operating activities for the nine months ended September 30, 2019 for Con Edison and CECONY were $360 million and $405 million higher, respectively, than in the 2018 period. The changes in net cash flows for Con Edison and CECONY reflect primarily a change in the timing of pension and retiree benefit contributions ($122 million and $114 million, respectively), lower storm restoration costs ($185 million and $124 million, respectively), lower MTA power reliability costs ($123 million and $123 million, respectively), reimbursement received for Puerto Rico related restoration costs ($95 million and $95 million, respectively), and for CECONY, lower net payments of income tax to affiliated companies ($255 million), offset, in part, by higher TCJA net benefits provided to customers in the 2019 period ($289 million and $287 million, respectively).
The change in net cash flows also reflects the timing of payments for and recovery of energy costs. This timing is reflected within changes to accounts receivable – customers and recoverable and refundable energy costs within other regulatory assets and liabilities and accounts payable balances.
Cash Flows Used in Investing Activities
Net cash flows used in investing activities for Con Edison and CECONY were $63 million and $61 million lower, respectively, for the nine months ended September 30, 2019 compared with the 2018 period. The change for Con Edison reflects primarily a decrease in non-utility construction expenditures at the Clean Energy Businesses ($50 million), the proceeds from the sale of a property formerly used by CECONY in its operations ($48 million) and a decrease in utility construction expenditures at CECONY ($44 million), offset, in part, by increases in investments in electric and gas transmission projects at Con Edison Transmission ($36 million), cost of removal less salvage at CECONY ($31 million) and an increase in utility construction expenditures at O&R ($15 million).
Cash Flows from Financing Activities
Net cash flows from financing activities for Con Edison and CECONY were $577 million and $556 million lower, respectively, in the nine months ended September 30, 2019 compared with the 2018 period.
In May 2019, Con Edison entered into a forward sale agreement relating to 5,800,000 shares of its common stock. In June 2019, the company issued 4,750,000 shares for $400 million upon physical settlement of shares subject to the forward sale agreement. Con Edison used the proceeds to invest in CECONY for funding of its capital requirements and other general corporate purposes. At September 30, 2019, 1,050,000 shares remain subject to the forward sale agreement. The company expects the remaining shares under the forward sale agreement to settle by December 28, 2020. See Note C to the Third Quarter Financial Statements.
In March 2019, Con Edison issued 5,649,369 shares of its common stock for $425 million upon physical settlement of the remaining shares subject to its November 2018 forward sale agreements. Con Edison used the proceeds to invest in its subsidiaries for funding of their capital requirements and to repay short-term debt incurred for that purpose.
In February 2019, Con Edison borrowed $825 million under a two-year variable-rate term loan to fund the repayment of a 6-month variable-rate term loan. In June 2019, Con Edison pre-paid $150 million of the amount borrowed.
In May 2019, CECONY issued $700 million aggregate principal amount of 4.125 percent debentures, due 2049, the net proceeds from the sale of which were used to repay short-term borrowings and for other general corporate purposes.
In April 2019, CECONY redeemed at maturity $475 million of 6.65 percent 10-year debentures.
In June 2018, CECONY issued $640 million aggregate principal amount of debentures, due 2021, at a variable interest rate of 0.40 percent above three-month LIBOR and called for redemption on various dates in July and August 2018 the $636 million of CECONY’s tax-exempt debt for which the interest rates were to be determined pursuant to periodic auctions.
In May 2018, CECONY issued $700 million aggregate principal amount of 4.50 percent debentures, due 2058, and $300 million aggregate principal amount of 3.80 percent debentures, due 2028, the net proceeds from the sale of which were used to repay short-term borrowings and for other general corporate purposes.
In April 2018, CECONY redeemed at maturity $600 million of 5.85 percent 10-year debentures.
In September 2019, O&R agreed to issue in November 2019 $43 million aggregate principal amount of 3.73 percent debentures, due 2049 and to issue in December 2019 $44 million aggregate principal amount of 2.94 percent debentures, due 2029 and $38 million aggregate principal amount of 3.46 percent debentures, due 2039.
In August and December 2018, O&R issued $150 million aggregate principal amount of 4.35 percent debentures, due 2048.
In September 2018, O&R redeemed at maturity $50 million of 6.15 percent 10-year debentures.
In October 2019, a Con Edison Development subsidiary issued $303 million aggregate principal amount of 3.82 percent senior notes, due 2038, secured by the company's Panoche Valley and Wistaria Solar renewable electric production projects.
In May 2019, a Con Edison Development subsidiary borrowed $464 million at a variable-rate, due 2026, secured by equity interests in solar electric production projects, the net proceeds from the sale of which were used to repay borrowings from Con Edison and for other general corporate purposes. Con Edison used a portion of the repayment to pre-pay $150 million of an $825 million two-year variable-rate term loan and the remainder to repay short-term borrowings and for other general corporate purposes. The company has entered into fixed-rate interest rate swaps in connection with this borrowing. See Note L to the Third Quarter Financial Statements.
In September 2018, a Con Edison Development subsidiary issued $140 million aggregate principal amount of 4.41 percent Senior Notes, due 2028, secured by five of the company’s wind electric production projects.
Con Edison’s cash flows from financing for the nine months ended September 30, 2019 and 2018 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 $76 million and $75 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, 2019 and 2018 and the average daily balances for the nine months ended September 30, 2019 and 2018 for Con Edison and CECONY were as follows:
|
|
|
|
|
|
|
|
|
|
2019
|
2018
|
|
(Millions of Dollars, except Weighted Average Yield)
|
Outstanding at September 30,
|
Daily
average
|
Outstanding at September 30,
|
Daily
average
|
|
Con Edison
|
$1,300
|
$1,122
|
$1,352
|
$830
|
|
CECONY
|
$930
|
$743
|
$1,004
|
$447
|
|
Weighted average yield
|
2.3
|
2.6
|
2.3
|
2.1
|
Capital Requirements and Resources
Capital Requirements
The capital expenditures reflected in the October 2019 Joint Proposal for new CECONY electric and gas rate plans (see “Rate Plans” in Note B to the Third Quarter Financial Statements) were:
|
|
|
|
|
|
|
|
(Millions of Dollars)
|
2020
|
2021
|
2022
|
|
Electric
|
$2,135
|
$2,137
|
$1,917
|
|
Gas
|
$1,073
|
$1,055
|
$989
|
Contractual Obligations
Con Edison’s material obligations to make payments pursuant to contracts totaled $52,720 million and $49,264 million at September 30, 2019 and December 31, 2018, respectively. The increase at September 30, 2019 is due primarily to increases in long-term debt ($1,288 million) and interest on long-term debt ($828 million). See "Cash Flows from Financing Activities,” above.
Capital Resources
For each of the Companies, the common equity ratio at September 30, 2019 and December 31, 2018 was:
|
|
|
|
|
|
|
|
Common Equity Ratio
(Percent of total capitalization)
|
|
|
September 30, 2019
|
December 31, 2018
|
|
Con Edison
|
50.8
|
49.0
|
|
CECONY
|
50.1
|
48.6
|
Assets, Liabilities and Equity
The Companies' assets, liabilities, and equity at September 30, 2019 and December 31, 2018 are summarized as follows.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
CECONY
|
O&R
|
Clean Energy
Businesses
|
Con Edison
Transmission
|
Other (a)
|
Con Edison (b)
|
|
(Millions of Dollars)
|
2019
|
2018
|
2019
|
2018
|
2019
|
|
2018
|
|
2019
|
|
2018
|
2019
|
|
2018
|
|
2019
|
2018
|
|
ASSETS
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Current assets
|
$3,005
|
$3,357
|
$255
|
$263
|
$458
|
$372
|
|
$—
|
|
$32
|
$(137)
|
$(160)
|
$3,581
|
$3,864
|
|
Investments
|
436
|
385
|
26
|
25
|
—
|
|
—
|
|
1,528
|
1,362
|
(7)
|
(6)
|
1,983
|
1,766
|
|
Net plant
|
36,885
|
35,374
|
2,299
|
2,210
|
4,033
|
4,148
|
17
|
17
|
—
|
|
—
|
|
43,234
|
41,749
|
|
Other noncurrent assets
|
4,482
|
3,992
|
355
|
394
|
1,885
|
1,736
|
14
|
14
|
406
|
405
|
7,142
|
6,541
|
|
Total Assets
|
$44,808
|
$43,108
|
$2,935
|
$2,892
|
$6,376
|
$6,256
|
$1,559
|
$1,425
|
$262
|
$239
|
$55,940
|
$53,920
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
LIABILITIES AND SHAREHOLDERS' EQUITY
|
|
|
|
|
|
|
|
|
|
|
|
Current liabilities
|
$3,813
|
$4,200
|
$410
|
$392
|
$1,819
|
$1,608
|
$94
|
$5
|
$83
|
$2
|
$6,219
|
$6,207
|
|
Noncurrent liabilities
|
12,892
|
12,322
|
1,060
|
1,094
|
44
|
(32)
|
82
|
66
|
(28)
|
(71)
|
14,050
|
13,379
|
|
Long-term debt
|
14,024
|
13,676
|
694
|
694
|
2,124
|
2,330
|
500
|
500
|
195
|
295
|
17,537
|
17,495
|
|
Equity
|
14,079
|
12,910
|
771
|
712
|
2,389
|
2,350
|
883
|
854
|
12
|
13
|
18,134
|
16,839
|
|
Total Liabilities and Equity
|
$44,808
|
$43,108
|
$2,935
|
$2,892
|
$6,376
|
$6,256
|
$1,559
|
$1,425
|
$262
|
$239
|
$55,940
|
$53,920
|
(a) Includes parent company and consolidation adjustments.
(b) Represents the consolidated results of operations of Con Edison and its businesses.
CECONY
Current assets at September 30, 2019 were $352 million lower than at December 31, 2018. The change in current assets reflects a decrease in cash and temporary cash investments primarily due to the July 2019 payment of New York City semi-annual property taxes ($803 million) and a decrease in other receivables ($107 million). The decrease in other receivables reflects primarily the receipt of payments related to costs for aid provided by CECONY for the restoration of power in Puerto Rico in the aftermath of the September 2017 hurricanes ($95 million). These decreases are offset, in part, by an increase in prepayments reflecting primarily the July 2019 payment of New York City semi-annual property taxes, offset, in part, by three months of amortization, while the December 2018 balance reflects the amortization of the entire previous semi-annual payment ($499 million).
Investments at September 30, 2019 were $51 million higher than at December 31, 2018. The change in investments reflects primarily an increase in supplemental retirement income plan assets. See Note E to the Third Quarter Financial Statements.
Net plant at September 30, 2019 was $1,511 million higher than at December 31, 2018. The change in net plant reflects primarily an increase in electric ($1,141 million) and gas ($717 million) plant balances, offset, in part, by an increase in accumulated depreciation ($516 million).
Other noncurrent assets at September 30, 2019 were $490 million higher than at December 31, 2018. The change in other noncurrent assets reflects primarily the adoption of ASU No. 2016-02, “Leases (Topic 842)” ($610 million). See Note I to the Third Quarter Financial Statements. The change also reflects primarily an increase in the regulatory asset for deferred derivative losses ($79 million), property tax reconciliation ($64 million) and MTA power reliability deferral ($16 million) which reflects costs incurred and deferred as a regulatory asset in the 2019 period. See “Other Regulatory Matters” in Note B to the Third Quarter Financial Statements. These increases are offset, in part, by a decrease in the regulatory asset for unrecognized pension and other postretirement costs to reflect the final actuarial valuation, as measured at December 31, 2018, of the pension and other retiree benefit plans in accordance with the accounting rules for retirement benefits ($295 million). See Notes B, E and F to the Third Quarter Financial Statements. The change in the regulatory asset also reflects the year's amortization of accounting costs.
Current liabilities at September 30, 2019 were $387 million lower than at December 31, 2018. The change in current liabilities reflects primarily a decrease in notes payable ($262 million) (see Note D to the Third Quarter Financial Statements) and lower debt due within one year as of September 30, 2019 ($125 million).
Noncurrent liabilities at September 30, 2019 were $570 million higher than at December 31, 2018. The change in noncurrent liabilities reflects primarily the adoption of ASU No. 2016-02, “Leases (Topic 842)” ($595 million). See Note I to the Third Quarter Financial Statements. The change also reflects an increase in deferred income taxes and unamortized investment tax credits ($343 million), which reflects primarily the accelerated method/life of tax depreciation, repair deductions and the prepayment of New York City property taxes. See Note J to the Third Quarter Financial Statements. These increases are offset, in part, by a decrease in the liability for pension and retiree benefits ($375 million), which primarily reflects contributions to the pension and other retiree benefit plans made by the Utilities in 2019 and the final actuarial valuation, as measured at December 31, 2018, of the plans in accordance with the accounting rules for retirement benefits. See Notes E and F to the Third Quarter Financial Statements.
Long-term debt at September 30, 2019 was $348 million higher than at December 31, 2018. The change in long-term debt reflects primarily the May 2019 issuance of $700 million of debentures offset, in part, by the reclassification of $350 million of long-term debt due June 2020 to long-term debt due within one year. See "Liquidity and Capital Resources - Cash Flows From Financing Activities" above and Note C to the Third Quarter Financial Statements.
Equity at September 30, 2019 was $1,169 million higher than at December 31, 2018. The change in equity reflects primarily capital contributions from parent ($875 million) in 2019 and net income for the nine months ended September 30, 2019 ($978 million), offset, in part, by common stock dividends to parent ($685 million) in 2019.
O&R
Current assets at September 30, 2019 were $8 million lower than at December 31, 2018. The change in current assets reflects primarily a decrease in cash and temporary cash investments ($14 million) and customer accounts
receivables, less allowance for uncollectible accounts ($11 million). These decreases are offset, in part, by an increase in prepayments reflecting primarily the property tax payments made in the third quarter of 2019 that are amortized by year end ($18 million).
Net plant at September 30, 2019 was $89 million higher than at December 31, 2018. The change in net plant reflects primarily an increase in electric ($64 million) and gas ($47 million) plant balances, offset, in part, by an increase in accumulated depreciation ($29 million).
Other noncurrent assets at September 30, 2019 were $39 million lower than at December 31, 2018. The change in other noncurrent assets reflects primarily a decrease in the regulatory asset for unrecognized pension and other postretirement costs to reflect the final actuarial valuation, as measured at December 31, 2018, of the pension and other retiree benefit plans in accordance with the accounting rules for retirement benefits ($25 million). The change in the regulatory asset also reflects the year's amortization of accounting costs. The change also reflects a decrease in the regulatory asset for deferred storm costs ($7 million), environmental remediation costs ($5 million) and property tax reconciliation ($5 million).
Current liabilities at September 30, 2019 were $18 million higher than at December 31, 2018. The change in current liabilities reflects primarily an increase in accounts payable.
Noncurrent liabilities at September 30, 2019 were $34 million lower than at December 31, 2018. The change in noncurrent liabilities reflects primarily a decrease in the liability for pension and retiree benefits that primarily reflects contributions to the pension and other retiree benefit plans made by the Utilities in 2019. See Notes E and F to the Third Quarter Financial Statements.
Equity at September 30, 2019 was $59 million higher than at December 31, 2018. The change in equity reflects primarily net income for the nine months ended September 30, 2019 ($60 million), a capital contribution from parent ($30 million) in 2019 and an increase in other comprehensive income ($5 million), offset, in part, by common stock dividends to parent ($35 million) in 2019.
Clean Energy Businesses
Current assets at September 30, 2019 were $86 million higher than at December 31, 2018. The change in current assets reflects primarily increases in restricted cash and accrued unbilled revenue.
Net plant at September 30, 2019 was $115 million lower than at December 31, 2018. The change in net plant reflects primarily depreciation during the nine months ended September 30, 2019, investment tax credits and the reduction in the capitalized asset and related liability for asset retirement obligations for certain property leased by renewable electric production projects, offset, in part, by additional capital expenditures.
Other noncurrent assets at September 30, 2019 were $149 million higher than at December 31, 2018. The change in other noncurrent assets reflects primarily the adoption of ASU No. 2016-02, “Leases (Topic 842).” See Note I to the Third Quarter Financial Statements.
Current liabilities at September 30, 2019 were $211 million higher than at December 31, 2018. The change in current liabilities reflects primarily the reclassification of the PG&E-related project debt from long-term debt to long-term debt due within one year ($990 million), offset, in part, by the repayment of a borrowing under a 6-month term loan agreement ($825 million). See Note C to the Third Quarter Financial Statements.
Noncurrent liabilities at September 30, 2019 were $76 million higher than at December 31, 2018. The change in noncurrent liabilities reflects primarily the adoption of ASU No. 2016-02 “Leases (Topic 842)” ($222 million), offset, in part, by the reduction in the capitalized asset and related liability for asset retirement obligations for certain property leased by renewable electric production projects ($98 million) and an increase in deferred income taxes and unamortized investment tax credits ($81 million), which reflects primarily the accelerated method/life of tax depreciation and additional unamortized investment tax credits on renewable energy projects. See Note I to the Third Quarter Financial Statements.
Long-term debt at September 30, 2019 was $206 million lower than at December 31, 2018. The change in long-term debt reflects primarily the reclassification of the PG&E-related project debt to long-term debt due within one year ($990 million), offset, in part, by an $825 million borrowing from parent company of the proceeds of parent
company's February 2019 two-year variable-rate term loan agreement, $450 million of which was repaid to parent company, and a borrowing of $464 million, due 2026, secured by equity interests in solar electric production projects. See Note C to the Third Quarter Financial Statements.
Equity at September 30, 2019 was $39 million higher than at December 31, 2018. The change in equity reflects primarily an increase in noncontrolling interest ($62 million), offset, in part, by a net loss for the nine months ended September 30, 2019 ($19 million).
CET
Current assets at September 30, 2019 were $32 million lower than at December 31, 2018. The change in current assets reflects an increased investment in Mountain Valley Pipeline, LLC and a NY Transco transmission project. See "Con Edison Transmission" below.
Investments at September 30, 2019 were $166 million higher than at December 31, 2018. The change in investments reflects primarily increased investment in Mountain Valley Pipeline, LLC and a NY Transco transmission project.
Equity at September 30, 2019 was $29 million higher than at December 31, 2018. The change in equity reflects primarily net income for the nine months ended September 30, 2019 ($38 million), offset, in part, by common stock dividends to parent ($9 million) in 2019.
Off-Balance Sheet Arrangements
In May 2019, Con Edison entered into a forward sale agreement which met the SEC definition of an off-balance sheet arrangement. See Note C to the Third Quarter Financial Statements. None of the Companies’ other transactions, agreements or other contractual arrangements meet the SEC definition of off-balance sheet arrangements.
Regulatory Matters