Leases

Con Edison’s subsidiaries lease electric transmission facilities, gas distribution facilities, land, office buildings and equipment. In accordance with the accounting rules for leases, these leases are classified as either capital leases or operating leases. Most of the operating leases provide the option to renew at the fair rental value for future periods. Generally, it is expected that leases will be renewed or replaced in the normal course of business.

Capital leases: For ratemaking purposes capital leases are treated as operating leases; therefore, in accordance with the accounting rules for regulated operations, the amortization of the leased asset is based on the rental payments recovered from customers. The following assets under capital leases are included in the Companies’ consolidated balance sheets at December 31, 2016 and 2015:



	Con Edison		CECONY
(Millions of Dollars)	2016	2015	2016	2015
UTILITY PLANT
Common	$3	$3	$2	$2

The accumulated amortization of the capital leases for Con Edison and CECONY was $3 million and $1 million, respectively at December 31, 2016, and $3 million and $2 million, respectively at December 31, 2015.

The future minimum lease commitments for the above assets are as follows:



(Millions of Dollars)	Con Edison	CECONY
2017	$1	$1
2018	1	1
2019	—	—
2020	—	—
2021	—	—
All years thereafter	—	—
Total	2	2
Less: amount representing interest	—	—
Present value of net minimum lease payment	$2	$2

Operating leases: The future minimum lease commitments under the Companies’ operating lease agreements that are not cancellable by the Companies are as follows:



(Millions of Dollars)	Con Edison	CECONY
2017	$61	$53
2018	62	54
2019	61	54
2020	61	54
2021	58	53
All years thereafter	788	696
Total	$1,091	$964

Substantially all of the amounts shown in the above table are estimated amounts payable under CECONY’s revocable consent agreement with New York City for the use of streets and public places for installation and operation of transformers and associated vaults and equipment. Under the agreement, payments by CECONY increase 2.18 percent annually and are subject to decrease if CECONY’s transformer installations decrease by ½ of 1 percent or more from the prior year.

For information about changes to the accounting rules for leases, see Note T.