Derivative Instruments and Hedging Activities (Tables)

9 Months Ended

Sep. 30, 2016

Derivative Instruments and Hedging Activities Disclosure [Abstract]

Fair Values of Commodity Derivatives Including Offsetting Assets

The fair values of the Companies’ commodity derivatives including the offsetting of assets and liabilities on the consolidated balance sheet at September 30, 2016 and December 31, 2015 were:

(Millions of Dollars)	2016				2015
Balance Sheet Location	Gross Amounts of Recognized Assets/(Liabilities)	Gross Amounts Offset	Net Amounts of Assets/ (Liabilities) (a)		Gross Amounts of Recognized Assets/(Liabilities)	Gross Amounts Offset	Net Amounts of Assets/ (Liabilities) (a)
Con Edison
Fair value of derivative assets
Current	$75	$(60)	$15	(b)	$59	$(41)	$18	(b)
Current - assets held for sale (c)	—	—	—		51	(50)	1
Noncurrent	58	(57)	1		57	(54)	3
Noncurrent - assets held for sale (c)	—	—	—		15	(15)	—
Total fair value of derivative assets	$133	$(117)	$16		$182	$(160)	$22
Fair value of derivative liabilities
Current	$(143)	$73	$(70)		$(144)	$78	$(66)
Current - liabilities held for sale (c)	—	—	—		(115)	50	(65)
Noncurrent	(111)	59	(52)		(102)	63	(39)
Noncurrent - liabilities held for sale (c)	—	—	—		(28)	15	(13)
Total fair value of derivative liabilities	$(254)	$132	$(122)		$(389)	$206	$(183)
Net fair value derivative assets/(liabilities)	$(121)	$15	$(106)	(b)	$(207)	$46	$(161)	(b)
CECONY
Fair value of derivative assets
Current	$52	$(46)	$6	(b)	$40	$(32)	$8	(b)
Noncurrent	45	(45)	—		48	(47)	1
Total fair value of derivative assets	$97	$(91)	$6		$88	$(79)	$9
Fair value of derivative liabilities
Current	$(122)	$61	$(61)		$(121)	$71	$(50)
Noncurrent	(92)	47	(45)		(92)	56	(36)
Total fair value of derivative liabilities	$(214)	$108	$(106)		$(213)	$127	$(86)
Net fair value derivative assets/(liabilities)	$(117)	$17	$(100)	(b)	$(125)	$48	$(77)	(b)

(a) Derivative instruments and collateral were offset on the consolidated balance sheet as applicable under the accounting rules. The Companies enter into master agreements for their commodity derivatives. These agreements typically provide offset in the event of contract termination. In such case, generally the non-defaulting party’s payable will be offset by the defaulting party’s payable. The non-defaulting party will customarily notify the defaulting party within a specific time period and come to an agreement on the early termination amount.

(b) At September 30, 2016 and December 31, 2015, margin deposits for Con Edison ($12 million and $26 million, respectively) and CECONY ($12 million and $26 million, respectively) were classified as derivative assets on the consolidated balance sheet, but not included in the table. Margin is collateral, typically cash, that the holder of a derivative instrument is required to deposit in order to transact on an exchange and to cover its potential losses with its broker or the exchange.

(c) Amounts represent derivative assets and liabilities included in assets and liabilities held for sale on the consolidated balance sheet.

Fair Values of Commodity Derivatives Including Offsetting Liabilities

The fair values of the Companies’ commodity derivatives including the offsetting of assets and liabilities on the consolidated balance sheet at September 30, 2016 and December 31, 2015 were:

(Millions of Dollars)	2016				2015
Balance Sheet Location	Gross Amounts of Recognized Assets/(Liabilities)	Gross Amounts Offset	Net Amounts of Assets/ (Liabilities) (a)		Gross Amounts of Recognized Assets/(Liabilities)	Gross Amounts Offset	Net Amounts of Assets/ (Liabilities) (a)
Con Edison
Fair value of derivative assets
Current	$75	$(60)	$15	(b)	$59	$(41)	$18	(b)
Current - assets held for sale (c)	—	—	—		51	(50)	1
Noncurrent	58	(57)	1		57	(54)	3
Noncurrent - assets held for sale (c)	—	—	—		15	(15)	—
Total fair value of derivative assets	$133	$(117)	$16		$182	$(160)	$22
Fair value of derivative liabilities
Current	$(143)	$73	$(70)		$(144)	$78	$(66)
Current - liabilities held for sale (c)	—	—	—		(115)	50	(65)
Noncurrent	(111)	59	(52)		(102)	63	(39)
Noncurrent - liabilities held for sale (c)	—	—	—		(28)	15	(13)
Total fair value of derivative liabilities	$(254)	$132	$(122)		$(389)	$206	$(183)
Net fair value derivative assets/(liabilities)	$(121)	$15	$(106)	(b)	$(207)	$46	$(161)	(b)
CECONY
Fair value of derivative assets
Current	$52	$(46)	$6	(b)	$40	$(32)	$8	(b)
Noncurrent	45	(45)	—		48	(47)	1
Total fair value of derivative assets	$97	$(91)	$6		$88	$(79)	$9
Fair value of derivative liabilities
Current	$(122)	$61	$(61)		$(121)	$71	$(50)
Noncurrent	(92)	47	(45)		(92)	56	(36)
Total fair value of derivative liabilities	$(214)	$108	$(106)		$(213)	$127	$(86)
Net fair value derivative assets/(liabilities)	$(117)	$17	$(100)	(b)	$(125)	$48	$(77)	(b)

(a) Derivative instruments and collateral were offset on the consolidated balance sheet as applicable under the accounting rules. The Companies enter into master agreements for their commodity derivatives. These agreements typically provide offset in the event of contract termination. In such case, generally the non-defaulting party’s payable will be offset by the defaulting party’s payable. The non-defaulting party will customarily notify the defaulting party within a specific time period and come to an agreement on the early termination amount.

(b) At September 30, 2016 and December 31, 2015, margin deposits for Con Edison ($12 million and $26 million, respectively) and CECONY ($12 million and $26 million, respectively) were classified as derivative assets on the consolidated balance sheet, but not included in the table. Margin is collateral, typically cash, that the holder of a derivative instrument is required to deposit in order to transact on an exchange and to cover its potential losses with its broker or the exchange.

(c) Amounts represent derivative assets and liabilities included in assets and liabilities held for sale on the consolidated balance sheet.

Realized and Unrealized Gains or Losses on Commodity Derivatives

The following table presents the realized and unrealized gains or losses on commodity derivatives that have been deferred or recognized in earnings for the three and nine months ended September 30, 2016 and 2015:

		For the Three Months Ended September 30,
		Con Edison				CECONY
(Millions of Dollars)	Balance Sheet Location	2016		2015		2016		2015
Pre-tax gains/(losses) deferred in accordance with accounting rules for regulated operations:
Current	Deferred derivative gains	$(1)		$(1)		$(3)		$(1)
Noncurrent	Deferred derivative gains	(2)		—		—		—
Total deferred gains/(losses)		$(3)		$(1)		$(3)		$(1)
Current	Deferred derivative losses	$(19)		$8		$(18)		$8
Current	Recoverable energy costs	(39)		(53)		(35)		(49)
Noncurrent	Deferred derivative losses	(17)		14		(14)		13
Total deferred gains/(losses)		$(75)		$(31)		$(67)		$(28)
Net deferred gains/(losses)		$(78)		$(32)		$(70)		$(29)
	Income Statement Location
Pre-tax gain/(loss) recognized in income
	Purchased power expense	$(37)	(a)	$(31)	(b)		$—		$—
	Gas purchased for resale	(38)		(26)		—		—
	Non-utility revenue	(2)	(a)	5	(b)	—		—
Total pre-tax gain/(loss) recognized in income		$(77)		$(52)			$—		$—

(a) For the three months ended September 30, 2016, Con Edison recorded unrealized losses in non-utility operating revenue ($2 million) and purchase power expense ($23 million).

(b) For the three months ended September 30, 2015, Con Edison recorded in purchased power expense an unrealized pre-tax gain of $12 million.

		For the Nine Months Ended September 30,
		Con Edison					CECONY
(Millions of Dollars)	Balance Sheet Location	2016		2015			2016		2015
Pre-tax gains/(losses) deferred in accordance with accounting rules for regulated operations:
Current	Deferred derivative gains	$6			$—		$2		$1
Noncurrent	Deferred derivative gains	(1)		—			(1)		—
Total deferred gains/(losses)		$5			$—		$1		$1
Current	Deferred derivative losses	$19		$40			$16		$40
Current	Recoverable energy costs	(163)		(92)			(148)		(87)
Noncurrent	Deferred derivative losses	(5)		(7)			(3)		(5)
Total deferred gains/(losses)		$(149)		$(59)			$(135)		$(52)
Net deferred gains/(losses)		$(144)		$(59)			$(134)		$(51)
	Income Statement Location
Pre-tax gain/(loss) recognized in income
	Purchased power expense	$(106)	(a)	$(60)		(b)		$—		$—
	Gas purchased for resale	(72)		(94)			—		—
	Non-utility revenue	15	(a)	20		(b)	—		—
Total pre-tax gain/(loss) recognized in income		$(163)		$(134)				$—		$—

(a) For the nine months ended September 30, 2016, Con Edison recorded unrealized gains and losses in non-utility operating revenue ($3 million loss) and purchase power expense ($11 million gain).

(b) For the nine months ended September 30, 2015, Con Edison recorded unrealized pre-tax gains and losses in non-utility operating revenue ($3 million loss) and purchased power expense ($6 million gain).

Hedged Volume of Derivative Transactions

The following table presents the hedged volume of Con Edison’s and CECONY’s derivative transactions at September 30, 2016:

	Electric Energy (MWh) (a)(b)	Capacity (MW) (a)	Natural Gas (Dt) (a)(b)	Refined Fuels (gallons)
Con Edison	22,797,395	15,472	69,954,738	1,344,000
CECONY	20,724,225	9,000	70,100,000	1,344,000

(a) Volumes are reported net of long and short positions, except natural gas collars where the volumes of long positions are reported.

(b) Excludes electric congestion and gas basis swap contracts, which are associated with electric and gas contracts and hedged volumes.

Aggregate Fair Value of Companies' Derivative Instruments with Credit-Risk-Related Contingent Features

The following table presents the aggregate fair value of the Companies’ derivative instruments with credit-risk-related contingent features that are in a net liability position, the collateral posted for such positions and the additional collateral that would have been required to be posted had the lowest applicable credit rating been reduced one level and to below investment grade at September 30, 2016:

(Millions of Dollars)	Con Edison (a)		CECONY (a)
Aggregate fair value – net liabilities	$111		$97
Collateral posted	24		23
Additional collateral (b) (downgrade one level from current ratings)	18		15
Additional collateral (b) (downgrade to below investment grade from current ratings)	106	(c)	84	(c)

(a) Non-derivative transactions for the purchase and sale of electricity and gas and qualifying derivative instruments, which have been designated as normal purchases or normal sales, are excluded from the table. These transactions primarily include purchases of electricity from independent system operators. In the event the Utilities and the competitive energy businesses were no longer extended unsecured credit for such purchases, the Companies would be required to post additional collateral of $10 million at September 30, 2016. For certain other such non-derivative transactions, the Companies could be required to post collateral under certain circumstances, including in the event counterparties had reasonable grounds for insecurity.

(b) The Companies measure the collateral requirements by taking into consideration the fair value amounts of derivative instruments that contain credit-risk-related contingent features that are in a net liabilities position plus amounts owed to counterparties for settled transactions and amounts required by counterparties for minimum financial security. The fair value amounts represent unrealized losses, net of any unrealized gains where the Companies have a legally enforceable right to offset.

(c) Derivative instruments that are net assets have been excluded from the table. At September 30, 2016, if Con Edison had been downgraded to below investment grade, it would have been required to post additional collateral for such derivative instruments of $9 million.