Regulatory Matters

3 Months Ended

Mar. 31, 2016

Public Utilities, General Disclosures [Line Items]

Rate Plans

CECONY - Electric

In March 2016, CECONY filed a preliminary update to its January 2016 request to the New York State Public Service Commission (NYSPSC) for an electric rate increase effective January 2017. The company decreased its requested January 2017 rate increase by $2 million to $480 million, decreased its illustrated January 2018 rate increase by $3 million to $177 million and did not change its illustrated January 2019 rate increase of $141 million.

In April 2016, the Federal Energy Regulatory Commission (FERC) rejected CECONY’s challenge to FERC’s approval of substantially increased charges allocated to CECONY for transmission service provided pursuant to the open access tariff of PJM Interconnection LLC (PJM). CECONY intends to continue to challenge FERC’s approval of the increased charges. Also, in April 2016, CECONY notified PJM that CECONY will not be exercising its option to continue the service beyond April 2017.

CECONY - Gas

In March 2016, CECONY filed a preliminary update to its January 2016 request to the NYSPSC for a gas rate increase effective January 2017. The company increased its requested January 2017 rate increase by $5 million to $159 million, and decreased its illustrated January 2018 and 2019 rate increases by $4 million to $93 million and by $5 million to $104 million, respectively.

Other Regulatory Matters

In April 2016, the NYSPSC approved the September 2015 Joint Proposal among, CECONY, the NYSPSC staff and others with respect to the prudence proceeding the NYSPSC commenced in February 2009 and related matters. Pursuant to the Joint Proposal, the company is required to credit $116 million to customers and, for the period 2017 through 2044, to not seek to recover from customers an aggregate $55 million relating to return on its capital expenditures. In addition, the company’s revenues that were made subject to potential refund in this proceeding are no longer subject to refund. At March 31, 2016, the company had a $98 million regulatory liability for the remaining amount to be credited to customers related to this matter.

In June 2014, the NYSPSC initiated a proceeding to investigate the practices of qualifying persons to perform plastic fusions on gas facilities. New York State regulations require gas utilities to qualify and, except in certain circumstances, annually requalify workers that perform fusion to join plastic pipe. The NYSPSC directed the New York gas utilities to provide information in this proceeding about their compliance with the qualification and requalification requirements and related matters; their procedures for compliance with all gas safety regulations; and their annual chief executive officer certifications regarding these and other procedures. CECONY’s qualification and requalification procedures had not included certain required testing to evaluate specimen fuses. In addition, CECONY and O&R had not timely requalified certain workers that had been qualified under their respective procedures to perform fusion to join plastic pipe. CECONY and O&R have requalified their workers who perform plastic pipe fusions. In May 2015, the NYSPSC, which indicated that it would address enforcement at a later date, ordered CECONY, O&R and other gas utilities to perform risk assessment and remediation plans, additional leakage surveying and reporting; CECONY to hire an independent statistician to develop a risk assessment and remediation plan; and the gas utilities to implement certain new plastic fusion requirements. In December 2015, the NYSPSC staff informed O&R that the company had satisfactorily completed its risk assessment and remediation plan. CECONY expects to submit its risk assessment and remediation plan to the NYSPSC staff in 2016. The Companies are unable to estimate the amount or range of their possible loss related to this proceeding.

In November 2015, the NYSPSC ordered CECONY to show cause why the NYSPSC should not commence proceedings to penalize the company for alleged violations of gas safety regulations identified by the NYSPSC staff in its investigation of a March 2014 explosion and fire and to review the prudence of the company's conduct associated with the incident. See "Manhattan Explosion and Fire" in Note H. In December 2015, the company responded that the NYSPSC should not institute the proceedings and disputed the alleged violations. The company is unable to estimate the amount or range of its possible loss related to any such proceedings that may be instituted.

Regulatory Assets and Liabilities

Regulatory assets and liabilities at March 31, 2016 and December 31, 2015 were comprised of the following items:



	Con Edison		CECONY
(Millions of Dollars)	2016	2015	2016	2015
Regulatory assets
Unrecognized pension and other postretirement costs	$3,663	$3,876	$3,502	$3,697
Future income tax	2,363	2,350	2,246	2,232
Environmental remediation costs	851	904	746	800
Revenue taxes	293	253	279	240
Deferred storm costs	154	185	84	110
Deferred derivative losses	106	50	97	46
Surcharge for New York State assessment	55	44	50	40
Unamortized loss on reacquired debt	48	50	46	48
O&R property tax reconciliation	44	46	—	—
Pension and other postretirement benefits deferrals	41	45	11	16
Net electric deferrals	39	44	39	44
Preferred stock redemption	26	26	26	26
O&R transition bond charges	19	21	—	—
Workers’ compensation	16	11	16	11
Recoverable energy costs	—	16	—	15
Other	212	175	194	157
Regulatory assets – noncurrent	7,930	8,096	7,336	7,482
Deferred derivative losses	143	113	131	103
Recoverable energy costs	9	19	8	18
Regulatory assets – current	152	132	139	121
Total Regulatory Assets	$8,082	$8,228	$7,475	$7,603
Regulatory liabilities
Allowance for cost of removal less salvage	$693	$676	$586	$570
Property tax reconciliation	259	303	259	303
Prudence proceeding	98	99	98	99
Unrecognized other postretirement costs	96	28	96	28
Base rate change deferrals	95	128	95	128
Pension and other postretirement benefit deferrals	89	76	59	46
New York State income tax rate change	71	75	69	72
Variable-rate tax-exempt debt – cost rate reconciliation	67	70	58	60
Carrying charges on repair allowance and bonus depreciation	51	49	49	48
Net unbilled revenue deferrals	44	109	44	109
Property tax refunds	33	44	33	44
Net utility plant reconciliations	30	32	30	31
Earnings sharing – electric and steam	27	80	27	80
World Trade Center settlement proceeds	15	21	15	21
Other	190	187	154	150
Regulatory liabilities – noncurrent	1,858	1,977	1,672	1,789
Revenue decoupling mechanism	69	45	69	45
Refundable energy costs	53	64	26	33
Deferred derivative gains	3	6	2	6
Regulatory liabilities – current	125	115	97	84
Total Regulatory Liabilities	$1,983	$2,092	$1,769	$1,873

CECONY