Other Postretirement Benefits (Tables)
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12 Months Ended |
Dec. 31, 2017 |
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| Retirement Benefits [Abstract] |
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| Net Periodic Benefit Costs |
The components of the Companies’ total periodic benefit costs for 2017, 2016 and 2015 were as follows: | | | | | | | | | | | | | Con Edison | CECONY | (Millions of Dollars) | 2017 |
| 2016 |
| 2015 | 2017 |
| 2016 |
| 2015 | Service cost – including administrative expenses | $263 | $275 | $297 | $246 | $258 | $279 | Interest cost on projected benefit obligation | 591 | 596 | 575 | 554 | 559 | 538 | Expected return on plan assets | (968) | (947) | (886) | (917) | (898) | (840) | Recognition of net actuarial loss | 595 | 596 | 775 | 563 | 565 | 734 | Recognition of prior service costs | (17) | 4 | 4 | (19) | 2 | 2 | NET PERIODIC BENEFIT COST | $464 | $524 | $765 | $427 | $486 | $713 | Amortization of regulatory asset (a) | — |
| — |
| 1 | — |
| — |
| 1 | TOTAL PERIODIC BENEFIT COST | $464 | $524 | $766 | $427 | $486 | $714 | Cost capitalized | (181) | (214) | (301) | (169) | (203) | (285) | Reconciliation to rate level | (34) | 54 | (74) | (41) | 58 | (74) | Cost charged to operating expenses | $249 | $364 | $391 | $217 | $341 | $355 |
(a) Relates to an increase in CECONY’s pension obligation of $45 million from a 1999 special retirement program. The components of the Companies’ total periodic postretirement benefit costs for 2017, 2016 and 2015 were as follows: | | | | | | | | | Con Edison | CECONY | (Millions of Dollars) | 2017 | 2016 | 2015 | 2017 | 2016 | 2015 | Service cost | $20 | $18 | $20 | $13 | $13 | $15 | Interest cost on accumulated other postretirement benefit obligation | 46 | 48 | 51 | 38 | 40 | 43 | Expected return on plan assets | (69) | (77) | (78) | (61) | (67) | (68) | Recognition of net actuarial loss | 2 | 5 | 31 | (3) | 3 | 28 | Recognition of prior service cost | (17) | (20) | (20) | (11) | (14) | (14) | TOTAL PERIODIC POSTRETIREMENT BENEFIT COST | $(18) | $(26) | $4 | $(24) | $(25) | $4 | Cost capitalized | 8 | 11 | (2) | 10 | 10 | (2) | Reconciliation to rate level | (4) | 22 | 14 | (2) | 22 | 6 | Cost charged to operating expenses | $(14) | $7 | $16 | $(16) | $7 | $8 |
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| Schedule of Funded Status |
The funded status at December 31, 2017, 2016 and 2015 was as follows: | | | | | | | | | | | | Con Edison | CECONY | (Millions of Dollars) | 2017 | 2016 | 2015 |
| 2017 |
| 2016 | 2015 |
| CHANGE IN PROJECTED BENEFIT OBLIGATION | | | | | | | Projected benefit obligation at beginning of year | $14,095 | $14,377 | $15,081 | $13,203 | $13,482 | $14,137 | Service cost – excluding administrative expenses | 259 | 271 | 293 | 241 | 254 | 274 | Interest cost on projected benefit obligation | 591 | 596 | 575 | 554 | 559 | 538 | Net actuarial loss/(gain) | 1,231 | (302) | (996) | 1,171 | (282) | (931) | Plan amendments | 6 | (256) | — |
| — |
| (259) | — |
| Benefits paid | (646) | (591) | (576) | (602) | (551) | (536) | PROJECTED BENEFIT OBLIGATION AT END OF YEAR | $15,536 | $14,095 | $14,377 | $14,567 | $13,203 | $13,482 | CHANGE IN PLAN ASSETS | | | | | | | Fair value of plan assets at beginning of year | $12,472 | $11,759 | $11,495 | $11,815 | $11,141 | $10,897 | Actual return on plan assets | 2,041 | 829 | 126 | 1,935 | 787 | 118 | Employer contributions | 450 | 508 | 750 | 412 | 469 | 697 | Benefits paid | (646) | (591) | (576) | (602) | (551) | (536) | Administrative expenses | (43) | (33) | (36) | (41) | (31) | (35) | FAIR VALUE OF PLAN ASSETS AT END OF YEAR | $14,274 | $12,472 | $11,759 | $13,519 | $11,815 | $11,141 | FUNDED STATUS | $(1,262) | $(1,623) | $(2,618) | $(1,048) | $(1,388) | $(2,341) | Unrecognized net loss | $2,760 | $3,157 | $3,909 | $2,624 | $2,995 | $3,704 | Unrecognized prior service costs | (223) | (244) | 16 | (242) | (258) | 3 | Accumulated benefit obligation | 13,897 | 12,655 | 12,909 | 12,972 | 11,806 | 12,055 |
The funded status of the programs at December 31, 2017, 2016 and 2015 were as follows: | | | | | | | | | | | | | | | Con Edison | CECONY | (Millions of Dollars) | 2017 |
| 2016 |
| 2015 |
| 2017 |
| 2016 |
| 2015 |
| CHANGE IN BENEFIT OBLIGATION | | | | | | | Benefit obligation at beginning of year | $1,198 | $1,287 | $1,411 | $1,007 | $1,093 | $1,203 | Service cost | 20 | 18 | 20 | 13 | 13 | 15 | Interest cost on accumulated postretirement benefit obligation | 46 | 48 | 51 | 38 | 40 | 43 | Amendments | — |
| — |
| — |
| — |
| — |
| — |
| Net actuarial loss/(gain) | 53 | (57) | (103) | 16 | (52) | (85) | Benefits paid and administrative expenses | (134) | (134) | (127) | (124) | (122) | (117) | Participant contributions | 36 | 36 | 35 | 35 | 35 | 34 | BENEFIT OBLIGATION AT END OF YEAR | $1,219 | $1,198 | $1,287 | $985 | $1,007 | $1,093 | CHANGE IN PLAN ASSETS | | | | | | | Fair value of plan assets at beginning of year | $975 | $994 | $1,084 | $851 | $870 | $950 | Actual return on plan assets | 150 | 60 | (6) | 130 | 52 | (4) | Employer contributions | 17 | 7 | 6 | 8 | 7 | 6 | EGWP payments | 34 | 35 | 28 | 30 | 33 | 26 | Participant contributions | 35 | 36 | 35 | 35 | 35 | 34 | Benefits paid | (172) | (157) | (153) | (161) | (146) | (142) | FAIR VALUE OF PLAN ASSETS AT END OF YEAR | $1,039 | $975 | $994 | $893 | $851 | $870 | FUNDED STATUS | $(180) | $(223) | $(293) | $(92) | $(156) | $(223) | Unrecognized net loss/(gain) | $(47) | $(24) | $28 | $(85) | $(42) | $4 | Unrecognized prior service costs | (14) | (31) | (51) | (7) | (18) | (32) |
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| Schedule of Actuarial Assumptions |
The actuarial assumptions were as follows: | | | | | | | | | 2017 |
| 2016 |
| 2015 |
| Weighted-average assumptions used to determine benefit obligations at December 31: | | | | Discount rate | 3.70 | % | 4.25 | % | 4.25 | % | Rate of compensation increase | | | | CECONY | 4.25 | % | 4.25 | % | 4.25 | % | O&R | 4.00 | % | 4.00 | % | 4.00 | % | Weighted-average assumptions used to determine net periodic benefit cost for the years ended December 31: | | | | Discount rate | 4.25 | % | 4.25 | % | 3.90 | % | Expected return on plan assets | 7.50 | % | 7.80 | % | 7.80 | % | Rate of compensation increase | | | | CECONY | 4.25 | % | 4.25 | % | 4.25 | % | O&R | 4.00 | % | 4.00 | % | 4.00 | % |
The actuarial assumptions were as follows: | | | | | | | | | 2017 |
| 2016 |
| 2015 |
| Weighted-average assumptions used to determine benefit obligations at December 31: | | | | Discount Rate | | | | CECONY | 3.55 | % | 4.00 | % | 4.05 | % | O&R | 3.70 | % | 4.20 | % | 4.20 | % | Weighted-average assumptions used to determine net periodic benefit cost for the years ended December 31: | | | | Discount Rate | | | | CECONY | 4.00 | % | 4.05 | % | 3.75 | % | O&R | 4.20 | % | 4.20 | % | 3.85 | % | Expected Return on Plan Assets | 7.50 | % | 7.00 | % | 7.75 | % |
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| Schedule of Change of Assumed Health Care Cost Trend Rate |
A one-percentage point change in the assumed health care cost trend rate would have the following effects at December 31, 2017: | | | | | | | | Con Edison | CECONY | | 1-Percentage-Point | (Millions of Dollars) | Increase | Decrease |
| Increase | Decrease | Effect on accumulated other postretirement benefit obligation | $13 | $11 | $(20) | $35 | Effect on service cost and interest cost components for 2017 | 2 | — |
| (1) | 1 |
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| Schedule of Expected Benefit Payments |
Based on current assumptions, the Companies expect to make the following benefit payments over the next ten years: | | | | | | | | (Millions of Dollars) | 2018 | 2019 | 2020 | 2021 | 2022 | 2023-2027 | Con Edison | $728 | $738 | $753 | $765 | $778 | $4,083 | CECONY | 677 | 686 | 700 | 712 | 724 | 3,804 |
Based on current assumptions, the Companies expect to make the following benefit payments over the next ten years, net of receipt of governmental subsidies: | | | | | | | | (Millions of Dollars) | 2018 | 2019 | 2020 | 2021 | 2022 | 2023-2027 | Con Edison | $83 | $81 | $78 | $76 | $75 | $363 | CECONY | 73 | 70 | 67 | 65 | 64 | 303 |
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| Schedule of Plan Assets Allocations |
The asset allocations for the pension plan at the end of 2017, 2016 and 2015, and the target allocation for 2018 are as follows: | | | | | | | | | | | | | Target Allocation Range | | Plan Assets at December 31, | Asset Category | 2018 | | 2017 |
| | 2016 |
| | 2015 |
| Equity Securities | 53% - 63% | | 58 | % | | 58 | % | | 57 | % | Debt Securities | 28% - 38% | | 33 | % | | 33 | % | | 33 | % | Real Estate | 7% -11% | | 9 | % | | 9 | % | | 10 | % | Total | 100% | | 100 | % | | 100 | % | | 100 | % |
The asset allocations for CECONY’s other postretirement benefit plans at the end of 2017, 2016 and 2015, and the target allocation for 2018 are as follows: | | | | | | | | | | | | | Target Allocation Range | | Plan Assets at December 31, | Asset Category | 2018 | | 2017 |
| | 2016 |
| | 2015 |
| Equity Securities | 50%-80% | | 60 | % | | 60 | % | | 59 | % | Debt Securities | 20%-50% | | 40 | % | | 40 | % | | 41 | % | Total | 100% | | 100 | % | | 100 | % | | 100 | % |
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| Schedule of Fair Value of Plan Assets |
The fair values of the pension plan assets at December 31, 2017 by asset category are as follows: | | | | | | | | | (Millions of Dollars) | Level 1 |
| | Level 2 |
| | Total | Investments within the fair value hierarchy | | | | | | U.S. Equity (a) | $3,872 | | $28 | | $3,900 | International Equity (b) | 4,132 | | — |
| | 4,132 | U.S. Government Issued Debt (c) | — |
| | 1,786 | | 1,786 | Corporate Bonds Debt (d) | — |
| | 2,450 | | 2,450 | Structured Assets Debt (e) | — |
| | 3 | | 3 | Other Fixed Income Debt (f) | — |
| | 125 | | 125 | Cash and Cash Equivalents (g) | 124 | | 352 | | 476 | Futures (h) | 308 | | — |
| | 308 | Total investments within the fair value hierarchy | $8,436 | | $4,744 | | $13,180 | Investments measured at NAV per share (n) |
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| Private Equity (i) | | | | | 336 | Real Estate (j) | | | | | 1,214 | Hedge Funds (k) | | | | | 251 | Total investments valued using NAV per share |
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| | $1,801 | Funds for retiree health benefits (l) | (168) | | (94) | | (262) | Funds for retiree health benefits measured at NAV per share (l)(n) |
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| | (36) | Total funds for retiree health benefits |
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| | $(298) | Investments (excluding funds for retiree health benefits) | $8,268 | | $4,650 | | $14,683 | Pending activities (m) | | | | | (409) | Total fair value of plan net assets | | | | | $14,274 |
| | (a) | U.S. Equity includes both actively- and passively-managed assets with investments in domestic equity index funds and actively-managed small-capitalization equities. |
| | (b) | International Equity includes international equity index funds and actively-managed international equities. |
| | (c) | U.S. Government Issued Debt includes agency and treasury securities. |
| | (d) | Corporate Bonds Debt consists of debt issued by various corporations. |
| | (e) | Structured Assets Debt includes commercial-mortgage-backed securities and collateralized mortgage obligations. |
| | (f) | Other Fixed Income Debt includes municipal bonds, sovereign debt and regional governments. |
| | (g) | Cash and Cash Equivalents include short term investments, money markets, foreign currency and cash collateral. |
| | (h) | Futures consist of exchange-traded financial contracts encompassing U.S. Equity, International Equity and U.S. Government indices. |
| | (i) | Private Equity consists of global equity funds that are not exchange-traded. |
| | (j) | Real Estate investments include real estate funds based on appraised values that are broadly diversified by geography and property type. |
| | (k) | Hedge Funds are within a commingled structure which invests in various hedge fund managers who can invest in all financial instruments. |
| | (l) | The Companies set aside funds for retiree health benefits through a separate account within the pension trust, as permitted under Section 401(h) of the Internal Revenue Code of 1986, as amended. In accordance with the Code, the plan’s investments in the 401(h) account may not be used for, or diverted to, any purpose other than providing health benefits for retirees. The net assets held in the 401(h) account are calculated based on a pro-rata percentage allocation of the net assets in the pension plan. The related obligations for health benefits are not included in the pension plan’s obligations and are included in the Companies’ other postretirement benefit obligation. See Note F. |
| | (m) | Pending activities include security purchases and sales that have not settled, interest and dividends that have not been received and reflects adjustments for available estimates at year end. |
| | (n) | In accordance with ASU 2015-07, Fair Value Measurements (Topic 820): Disclosures for Investments in Certain Entities That Calculate Net Asset Value per Share (or its equivalent), certain investments that are measured at fair value using the net asset value per share (or its equivalent) practical expedient have not been classified in the fair value hierarchy. |
The fair values of the pension plan assets at December 31, 2016 by asset category are as follows: | | | | | | | | | | (Millions of Dollars) | Level 1 |
| | Level 2 |
| | Total | Investments within the fair value hierarchy | | | | | | U.S. Equity (a) | $3,466 | |
| $— |
| | $3,466 | International Equity (b) | 3,187 | | 371 | | 3,558 | U.S. Government Issued Debt (c) | — |
| | 1,337 | | 1,337 | Corporate Bonds Debt (d) | — |
| | 2,140 | | 2,140 | Structured Assets Debt (e) | — |
| | 1 | | 1 | Other Fixed Income Debt (f) | — |
| | 200 | | 200 | Cash and Cash Equivalents (g) | 147 | | 389 | | 536 | Futures (h) | 296 | | 68 | | 364 | Total investments within the fair value hierarchy | $7,096 | | $4,506 | | $11,602 | Investments measured at NAV per share (n) | | | | | | Private Equity (i) | | | | | 247 | Real Estate (j) | | | | | 1,139 | Hedge Funds (k) |
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| | | | 229 | Total investments valued using NAV per share |
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| | $1,615 | Funds for retiree health benefits (l) | (165) | | (105) | | (270) | Funds for retiree health benefits measured at NAV per share (l)(n) | | | | | (37) | Total funds for retiree health benefits | | | | | $(307) | Investments (excluding funds for retiree health benefits) | $6,931 | | $4,401 | | $12,910 | Pending activities (m) | | | | | (438) | Total fair value of plan net assets | | | | | $12,472 |
The fair values of the plan assets at December 31, 2017 by asset category as defined by the accounting rules for fair value measurements (see Note P) are as follows: | | | | | | | | | (Millions of Dollars) | Level 1 |
| | Level 2 | | Total | Equity (a) |
| $— |
| | $420 | | $420 | Other Fixed Income Debt (b) | — |
| | 286 | | 286 | Cash and Cash Equivalents (c) | — |
| | 16 | | 16 | Total investments |
| $— |
| | $722 | | $722 | Funds for retiree health benefits (d) | 168 |
| | 94 | | 262 | Investments (including funds for retiree health benefits) |
| $168 |
| | $816 | | $984 | Funds for retiree health benefits measured at net asset value (d)(e) | | | | | 36 | Pending activities (f) | | | | | 19 | Total fair value of plan net assets | | | | | $1,039 |
| | (a) | Equity includes a passively managed commingled index fund benchmarked to the MSCI All Country World Index. |
| | (b) | Other Fixed Income Debt includes a passively managed commingled index fund benchmarked to the Barclays Capital Aggregate Index. |
| | (c) | Cash and Cash Equivalents include short term investments and money markets. |
| | (d) | The Companies set aside funds for retiree health benefits through a separate account within the pension trust, as permitted under Section 401(h) of the Internal Revenue Code of 1986, as amended. In accordance with the Code, the plan’s investments in the 401(h) account may not be used for, or diverted to, any purpose other than providing health benefits for retirees. The net assets held in the 401(h) account are calculated based on a pro-rata percentage allocation of the net assets in the pension plan. The related obligations for health benefits are not included in the pension plan’s obligations and are included in the Companies’ other postretirement benefit obligation. See Note E. |
| | (e) | In accordance with ASU 2015-07, Fair Value Measurements (Topic 820): Disclosures for Investments in Certain Entities That Calculate Net Asset Value per Share (or its equivalent), certain investments that are measured at fair value using the net asset value per share (or its equivalent) practical expedient have not been classified in the fair value hierarchy. |
| | (f) | Pending activities include security purchases and sales that have not settled, interest and dividends that have not been received, and reflects adjustments for available estimates at year end. |
The fair values of the plan assets at December 31, 2016 by asset category (see Note P) are as follows: | | | | | | | | | (Millions of Dollars) | Level 1 |
| | Level 2 | | Total | Equity (a) |
| $— |
| | $391 | | $391 | Other Fixed Income Debt (b) | — |
| | 250 | | 250 | Cash and Cash Equivalents (c) | — |
| | 13 | | 13 | Total investments |
| $— |
| | $654 | | $654 | Funds for retiree health benefits (d) | 165 |
| | 105 | | 270 | Investments (including funds for retiree health benefits) |
| $165 |
| | $759 | | $924 | Funds for retiree health benefits measured at net asset value (d)(e) | | | | | 37 | Pending activities (f) | | | | | 14 | Total fair value of plan net assets | | | | | $975 |
(a) - (f) Reference is made to footnotes (a) through (f) in the above table of other postretirement benefit plan assets at December 31, 2017 by asset category. |