Regulatory Matters (Tables)

9 Months Ended

Sep. 30, 2015

Public Utilities, General Disclosures [Line Items]

Regulatory assets and liabilities at September 30, 2015 and December 31, 2014 were comprised of the following items:



	Con Edison		CECONY
(Millions of Dollars)	2015	2014	2015	2014
Regulatory assets
Unrecognized pension and other postretirement costs	$4,208	$4,846	$4,008	$4,609
Future income tax	2,363	2,273	2,254	2,166
Environmental remediation costs	884	925	784	820
Revenue taxes	235	219	223	208
Deferred storm costs	218	319	137	224
Surcharge for New York State assessment	68	99	63	92
Unamortized loss on reacquired debt	52	57	50	55
Pension and other postretirement benefits deferrals	49	66	21	42
Net electric deferrals	49	63	49	63
O&R property tax reconciliation	45	36	—	—
Deferred derivative losses	32	25	28	23
Preferred stock redemption	26	27	26	27
O&R transition bond charges	22	27	—	—
Workers’ compensation	11	8	11	8
Recoverable energy costs	4	19	4	17
Other	179	147	162	127
Regulatory assets – noncurrent	8,445	9,156	7,820	8,481
Deferred derivative losses	57	97	52	92
Future income tax	9	10	—	—
Recoverable energy costs	1	41	1	40
Regulatory assets – current	67	148	53	132
Total Regulatory Assets	$8,512	$9,304	$7,873	$8,613
Regulatory liabilities
Allowance for cost of removal less salvage	$633	$598	$530	$499
Property tax reconciliation	299	295	299	295
Base rate change deferrals	134	155	134	155
Net unbilled revenue deferrals	134	138	134	138
Prudence proceeding	100	105	100	105
Pension and other postretirement benefit deferrals	76	46	46	37
Variable-rate tax-exempt debt – cost rate reconciliation	75	78	64	78
New York State income tax rate change	67	62	63	59
Property tax refunds	55	87	55	87
Carrying charges on repair allowance and bonus depreciation	50	58	49	57
Earnings sharing – electric and steam	37	19	37	18
Net utility plant reconciliations	31	21	31	20
World Trade Center settlement proceeds	26	41	26	41
Unrecognized other postretirement costs	20	—	20	—
Other	203	290	167	248
Regulatory liabilities – noncurrent	1,940	1,993	1,755	1,837
Refundable energy costs	99	128	71	84
Revenue decoupling mechanism	41	30	39	30
Future income tax	20	24	20	24
Deferred derivative gains	5	5	5	4
Regulatory liabilities – current	165	187	135	142
Total Regulatory Liabilities	$2,105	$2,180	$1,890	$1,979

CECONY | Electric

Public Utilities, General Disclosures [Line Items]

Summary of Rate Plan

The following table contains a summary of the rate plan for 2016:



Effective period	January 2016 – December 2016
Base rate changes	None (a)
Amortizations to income of net regulatory (assets) and liabilities	Additional $123 million of net regulatory liabilities (b).
Other revenue sources	Continued retention of $90 million of annual transmission congestion revenues.
Revenue decoupling mechanism	Continued reconciliation of actual electric delivery revenues to those authorized in the rate plan.
Recoverable energy costs	Continued current rate recovery of purchased power and fuel costs (c).
Negative revenue adjustments	Continued potential penalties (up to $400 million annually) if certain performance targets are not met.
Cost reconciliations	Continued reconciliation of expenses for pension and other postretirement benefits, variable-rate tax-exempt debt, major storms, property taxes, municipal infrastructure support, the impact of new laws and environmental remediation to amounts reflected in rates (d).
Net utility plant reconciliations	Target levels reflected in rates are as follows: Transmission and distribution: $17,929 million Storm hardening: $268 million Other: $2,069 million
Average rate base	$18,282 million
Weighted average cost of capital (after-tax)	6.91 percent
Authorized return on common equity	9.0 percent
Earnings sharing	Most earnings above an annual earnings threshold of 9.6 percent are to be applied to reduce regulatory assets for environmental remediation and other costs.
Cost of long-term debt	5.09 percent
Common equity ratio	48 percent


(a)	The impact of 2014 and 2015 base rate changes under the current electric rate plan will continue to be deferred. $249 million of annual revenues collected from electric customers will continue to be subject to potential refund following NYSPSC staff review of certain costs. Revenues will continue to include $21 million as funding for major storm reserve.


(b)	Annual amortization of $107 million of the regulatory asset for deferred Superstorm Sandy and other major storm costs will continue. The costs recoverable from customers will be reduced by $4 million. The costs will no longer be subject to NYSPSC staff review and the recovery of the costs will no longer be subject to refund.

(c)

For transmission service provided pursuant to the open access transmission tariff of PJM Interconnection LLC (PJM), unless and until changed by the NYSPSC, the company will recover all charges incurred associated with the transmission service. In January 2014, PJM submitted to the Federal Energy Regulatory Commission (FERC) a request that would substantially increase the charges for the transmission service. FERC has granted the request and rejected CECONY’s protests. CECONY is challenging the FERC’s decision. In August 2015, PJM submitted a request to FERC that, if approved by FERC, would further increase the charges. In September 2015, CECONY filed a protest to this increase.

(d)

Deferrals for property taxes will continue to be limited to 90 percent of the difference from amounts reflected in rates, subject to an annual maximum for the remaining difference of not more than a 10 basis point impact on return on common equity. In general, if actual expenses for municipal infrastructure support (other than company labor) are below the amounts reflected in rates the company will defer the difference for credit to customers, and if the actual expenses are above the amount reflected in rates the company will defer for recovery from customers 80 percent of the difference subject to a maximum deferral of 30 percent of the amount reflected in rates.

O&R | Electric

Public Utilities, General Disclosures [Line Items]

Summary of Rate Plan

The following tables contain a summary of the new rate plans:

O&R New York - Electric



Effective period	November 2015 - October 2017
Base rate changes	Yr. 1 - $9.3 million Yr. 2 - $8.8 million
Amortizations to income of net regulatory (assets) and liabilities (a)	Yr. 1 - $(8.5) million Yr. 2 - $(9.4) million
Revenue decoupling mechanism	Continued reconciliation of actual electric delivery revenues to those authorized in the rate plan.
Recoverable energy costs	Continued current rate recovery of purchased power costs.
Negative revenue adjustments	Potential penalties (up to $4 million annually) if certain performance targets are not met.
Cost reconciliations	Continued reconciliation of expenses for pension and other postretirement benefits, major storms, property taxes, the impact of new laws and environmental remediation to amounts reflected in rates.
Net utility plant reconciliations (b)	Target levels reflected in rates are: Yr. 1 - $928 million Yr. 2 - $970 million
Average rate base	Yr. 1 - $763 million Yr. 2 - $805 million
Weighted average cost of capital (after-tax)	Yr. 1 - 7.10 percent Yr. 2 - 7.06 percent
Authorized return on common equity	9.0 percent
Earnings sharing	Most earnings above an annual earnings threshold of 9.6 percent are to be applied to reduce regulatory assets.
Cost of long-term debt	Yr. 1 - 5.42 percent Yr. 2 - 5.35 percent
Common equity ratio	48 percent

(a)

$59.3 million of the regulatory asset for deferred storm costs is to be recovered from customers over a five-year period, including $11.85 million in each of years 1 and 2, $1 million of the regulatory asset for such costs will not be recovered from customers, and all outstanding issues related to Superstorm Sandy and other past major storms prior to November 2014 are resolved. Approximately $4 million of regulatory assets for property tax and interest rate reconciliations will not be recovered from customers. Amounts that will not be recovered from customers were charged-off in June 2015.


(b)	Excludes electric advanced metering infrastructure as to which the company will be required to defer as a regulatory liability the revenue requirement impact of the amount, if any, by which actual average net utility plant balances are less than amounts reflected in rates: $1 million in year 1 and $9 million in year

O&R | Gas

Public Utilities, General Disclosures [Line Items]

Summary of Rate Plan

O&R New York - Gas



Effective period	November 2015 - October 2018
Base rate changes	Yr. 1 - $16.4 million Yr. 2 - $16.4 million Yr. 3 - $5.8 million Yr. 3 - $10.6 million collected through a surcharge
Amortizations to income of net regulatory (assets) and liabilities (a)	Yr. 1 - $(1.7) million Yr. 2 - $(2.1) million Yr. 3 - $(2.5) million
Revenue decoupling mechanism	Continued reconciliation of actual gas delivery revenues to those authorized in the rate plan, including through weather normalization clause.
Recoverable energy costs	Continued current rate recovery of purchased gas costs.
Negative revenue adjustments	Potential penalties (up to $3.7 million in Yr. 1, $4.7 million in Yr. 2 and $5.8 million in Yr. 3) if certain performance targets are not met.
Cost reconciliations	Continued reconciliation of expenses for pension and other postretirement benefits, property taxes, the impact of new laws and environmental remediation to amounts reflected in rates.
Net utility plant reconciliations (b)	Target levels reflected in rates are: Yr. 1 - $492 million Yr. 2 - $518 million Yr. 3 - $546 million
Average rate base	Yr. 1 - $366 million Yr. 2 - $391 million Yr. 3 - $417 million
Weighted average cost of capital (after-tax)	Yr. 1 - 7.10 percent Yr. 2 - 7.06 percent Yr. 3 - 7.06 percent
Authorized return on common equity	9.0 percent
Earnings sharing	Most earnings above an annual earnings threshold of 9.6 percent are to be applied to reduce regulatory assets.
Cost of long-term debt	Yr. 1 - 5.42 percent Yr. 2 - 5.35 percent Yr. 3 - 5.35 percent
Common equity ratio	48 percent


(a)	Reflects that the company will not recover from customers a total of approximately $14 million of regulatory assets for property tax and interest rate reconciliations. Amounts that will not be recovered from customers were charged-off in June 2015.


(b)	Excludes gas advanced metering infrastructure as to which the company will be required to defer as a regulatory liability the revenue requirement impact of the amount, if any, by which actual average net utility plant balances are less than amounts reflected in rates: $0.5 million in year 1, $4.2 million in year 2 and $7.2 million in year 3.