Regulatory Matters (Tables)

9 Months Ended

Sep. 30, 2023

Regulated Operations [Abstract]

Schedule of Public Utilities

The Joint Proposal is subject to approval by the NYSPSC. The following table contains a summary of the steam Joint Proposal.

CECONY – Steam
Effective period	November 2023 – October 2026
Base rate changes	Yr. 1 – $110 million (a) Yr. 2 – $44 million (a) Yr. 3 – $45 million (a)
Capital expenditures	Yr. 1 - $106 million Yr. 2 - $107 million Yr. 3 - $105 million
Amortizations to income of net regulatory liabilities	Yr. 1 – $15 million (b) Yr. 2 – $3 million (b) Yr. 3 – $3 million (b)
Weather Normalization Adjustment	Implementation of a weather normalization adjustment that adjusts base rates to reflect normal weather conditions during the heating season.
Recoverable energy costs	Continuation of current rate recovery of purchased power and fuel costs.
Negative revenue adjustments	Potential charges if certain performance targets relating to service, reliability, safety and other matters are not met: Yr. 1 - $3.7 million  Yr. 2 - $3.8 million  Yr. 3 - $3.8 million
Regulatory reconciliations	Reconciliation of uncollectible expenses and late payment charges (c) and expenses for pension and other postretirement benefits, variable-rate debt, property taxes (d), municipal infrastructure support costs (e), the impact of new laws and environmental site investigation and remediation to amounts reflected in rates. (f)
Net utility plant reconciliations	Yr. 1 - $2,025 million  Yr. 2 - $2,029 million  Yr. 3 - $2,015 million
Average rate base	Yr. 1 - $1,799 million Yr. 2 - $1,848 million  Yr. 3 - $1,882 million
Weighted average cost of capital (after-tax)	Yr. 1 - 6.78 percent Yr. 2 - 6.81 percent Yr. 3 - 6.83 percent
Authorized return on common equity	9.25 percent
Earnings sharing	Most earnings above an annual earnings threshold of 9.75 percent are to be applied to reduce regulatory assets for environmental remediation and other costs accumulated in the rate year.
Cost of long-term debt	Yr. 1 – 4.51 percent Yr. 2 – 4.58 percent Yr. 3 – 4.62 percent
Common equity ratio	48 percent

(a)The base rate increases will be implemented with increases of $77.8 million in Yr. 1; $77.8 million in Yr. 2; and $77.8 million in Yr. 3 to levelize the customer bill impact. New rates will be effective as of November 1, 2023. CECONY will begin billing customers at the new levelized rate once the Joint Proposal is approved by the NYSPSC. Any shortfall in revenues due to the timing of billing to customers will be collected through a surcharge.

(b)Amounts reflect amortization of the tax savings under the federal Tax Cuts and Jobs Act of 2017 (TCJA) for the unprotected portion of the regulatory liability for excess deferred income taxes allocable to CECONY’s steam customers (the entire $24 million in Yr.1), the protected portion of the regulatory liability for excess deferred income taxes allocable to CECONY’s steam customers over the remaining lives of the related assets ($3 million in Yr. 1; $5 million in Yr. 2; and $6 million in Yr. 3) and the non-plant portion of the regulatory asset for deficient deferred income taxes allocable to CECONY’s steam customers (the entire $11 million in Yr.1).

(c)CECONY will defer the difference between its actual write-offs of uncollectible expenses and late payment fees (from January 1, 2020 through October 31, 2026) to amounts reflected in rates, with recovery/refund from or to customers via surcharge/sur-credit. Surcharge recoveries for write-offs of uncollectible expenses and late payment fees will each be subject to an annual cap that produces no more than a half percent (0.5 percent) total customer bill impact (estimated to be $2.5 million, $3.0 million, $3.5 million for Yr. 1, Yr. 2 and Yr. 3, respectively). Amounts in excess of the annual surcharge cap in a specific year may be rolled forward for recovery and will count towards the following year’s surcharge cap. Amounts in excess of the surcharge cap will be deferred as a regulatory asset for recovery in CECONY’s next steam base rate case.

(d)Deferrals for property taxes are 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 maximum number of basis points impact on return on common equity (Yr. 1 – 10.0 basis points; Yr. 2 – 7.5 basis points; and Yr. 3 – 5.0 basis points), with recovery/refund from or to customers via surcharge/sur-credit. Surcharge recoveries will be subject to an annual cap that produces no more than a half percent (0.5 percent) total customer bill impact (estimated to be $2.5 million, $3.0 million, $3.5 million for Yr. 1, Yr. 2 and Yr. 3, respectively). Amounts in excess of the annual surcharge cap in a specific year may be rolled forward for recovery and will count towards the following year’s surcharge cap. Amounts in excess of the surcharge cap will be deferred as a regulatory asset for recovery in CECONY’s next steam base rate case.

(e)In general, if actual expenses for municipal infrastructure support (other than company labor) are below the amounts reflected in rates, CECONY will defer the difference for credit to customers, and if the actual expenses are above the amount reflected in rates, CECONY will defer for recovery from customers 80 percent of the difference subject to a maximum deferral, subject to certain conditions, of 30 percent of the amount reflected in the rate plan.

(f)In addition, the NYSDPS continues its focused operations audit to investigate CECONY's income tax accounting. The audit is investigating CECONY’s inadvertent understatement of a portion, the amount of which may be material, of its calculation of total federal income tax expense for ratemaking purposes. The understatement was related to the tax accounting treatment of its plant retirement-related cost of removal. As a result of such understatement, CECONY accumulated significant income tax regulatory assets that were not reflected in CECONY’s steam rate plans prior to November 1, 2023. A prospective correction is set forth for steam rates in the joint proposal.

Schedule of Regulatory Assets

Regulatory assets and liabilities at September 30, 2023 and December 31, 2022 were comprised of the following items:

 

	Con Edison		CECONY
(Millions of Dollars)	2023	2022	2023	2022
Regulatory assets
Unrecognized pension and other postretirement costs	$125	$78	$125	$78
Environmental remediation costs	983	991	899	906
Revenue taxes	468	436	448	417
Deferred storm costs	221	270	129	173
Municipal infrastructure support costs	20	29	20	29
Brooklyn Queens Demand Management (BQDM) program	31	33	31	33
Meadowlands heater odorization project	24	27	24	27
Recoverable Demonstration project costs	18	17	18	16
Gate station upgrade project	14	14	14	14
System peak reduction and energy efficiency programs	868	783	860	780
Unamortized loss on reacquired debt	9	11	8	10
Deferred derivative losses - long term	99	31	89	26
Property tax reconciliation	195	121	195	121
Legacy meters	17	20	—	—
Gas service line deferred costs	49	99	49	99
COVID - 19 customer arrears relief programs	418	104	415	101
Pension and other postretirement benefits deferrals	56	279	41	240
Preferred stock redemption	18	19	18	19
MTA power reliability deferral	69	92	69	92
Non-wire alternative projects	20	22	20	22
COVID - 19 pandemic deferrals	333	292	329	288
Electric vehicle make ready	59	33	55	30
Other	220	173	201	148
Regulatory assets – noncurrent	4,334	3,974	4,057	3,669
Deferred derivative losses - short term	137	184	132	178
Recoverable energy costs	43	121	31	108
Regulatory assets – current	180	305	163	286
Total Regulatory Assets	$4,514	$4,279	$4,220	$3,955
Regulatory liabilities
Future income tax*	1,583	1,753	1,450	1,616
Allowance for cost of removal less salvage	1,368	1,315	1,181	1,137
Net unbilled revenue deferrals	214	204	214	204
Energy efficiency portfolio standard unencumbered funds	5	5	7	7
Settlement of prudence proceeding	8	10	8	10
Earnings sharing - electric, gas and steam	13	13	10	10
System benefit charge carrying charge	87	73	83	69
BQDM and Demonstration project reconciliations	15	23	15	21
Pension and other postretirement benefit deferrals	194	144	146	98
Property tax refunds	35	35	35	35
COVID - 19 pandemic uncollectible reconciliation deferral	1	12	1	12
Late payment charge deferral	160	127	155	123
Unrecognized pension and other postretirement costs	1,276	1,638	1,197	1,536
Net proceeds from sale of property	54	69	52	69
Sales and use tax refunds	29	37	27	36
Workers’ compensation	15	11	15	11
Deferred derivative gains - long term	17	145	17	130
Other	327	413	277	357
Regulatory liabilities – noncurrent	5,401	6,027	4,890	5,481
Refundable energy costs	99	34	70	—
Revenue decoupling mechanism	—	29	—	21
Deferred derivative gains - short term	90	311	83	287
Regulatory liabilities – current	189	374	153	308
Total Regulatory Liabilities	$5,590	$6,401	$5,043	$5,789

* See "Other Regulatory Matters," above.

Schedule of Regulatory Liabilities

Regulatory assets and liabilities at September 30, 2023 and December 31, 2022 were comprised of the following items:

 

	Con Edison		CECONY
(Millions of Dollars)	2023	2022	2023	2022
Regulatory assets
Unrecognized pension and other postretirement costs	$125	$78	$125	$78
Environmental remediation costs	983	991	899	906
Revenue taxes	468	436	448	417
Deferred storm costs	221	270	129	173
Municipal infrastructure support costs	20	29	20	29
Brooklyn Queens Demand Management (BQDM) program	31	33	31	33
Meadowlands heater odorization project	24	27	24	27
Recoverable Demonstration project costs	18	17	18	16
Gate station upgrade project	14	14	14	14
System peak reduction and energy efficiency programs	868	783	860	780
Unamortized loss on reacquired debt	9	11	8	10
Deferred derivative losses - long term	99	31	89	26
Property tax reconciliation	195	121	195	121
Legacy meters	17	20	—	—
Gas service line deferred costs	49	99	49	99
COVID - 19 customer arrears relief programs	418	104	415	101
Pension and other postretirement benefits deferrals	56	279	41	240
Preferred stock redemption	18	19	18	19
MTA power reliability deferral	69	92	69	92
Non-wire alternative projects	20	22	20	22
COVID - 19 pandemic deferrals	333	292	329	288
Electric vehicle make ready	59	33	55	30
Other	220	173	201	148
Regulatory assets – noncurrent	4,334	3,974	4,057	3,669
Deferred derivative losses - short term	137	184	132	178
Recoverable energy costs	43	121	31	108
Regulatory assets – current	180	305	163	286
Total Regulatory Assets	$4,514	$4,279	$4,220	$3,955
Regulatory liabilities
Future income tax*	1,583	1,753	1,450	1,616
Allowance for cost of removal less salvage	1,368	1,315	1,181	1,137
Net unbilled revenue deferrals	214	204	214	204
Energy efficiency portfolio standard unencumbered funds	5	5	7	7
Settlement of prudence proceeding	8	10	8	10
Earnings sharing - electric, gas and steam	13	13	10	10
System benefit charge carrying charge	87	73	83	69
BQDM and Demonstration project reconciliations	15	23	15	21
Pension and other postretirement benefit deferrals	194	144	146	98
Property tax refunds	35	35	35	35
COVID - 19 pandemic uncollectible reconciliation deferral	1	12	1	12
Late payment charge deferral	160	127	155	123
Unrecognized pension and other postretirement costs	1,276	1,638	1,197	1,536
Net proceeds from sale of property	54	69	52	69
Sales and use tax refunds	29	37	27	36
Workers’ compensation	15	11	15	11
Deferred derivative gains - long term	17	145	17	130
Other	327	413	277	357
Regulatory liabilities – noncurrent	5,401	6,027	4,890	5,481
Refundable energy costs	99	34	70	—
Revenue decoupling mechanism	—	29	—	21
Deferred derivative gains - short term	90	311	83	287
Regulatory liabilities – current	189	374	153	308
Total Regulatory Liabilities	$5,590	$6,401	$5,043	$5,789

* See "Other Regulatory Matters," above.

Schedule of Regulatory Assets Not Earning Return

Regulatory Assets Not Earning a Return*

	Con Edison		CECONY
(Millions of Dollars)	2023	2022	2023	2022
Unrecognized pension and other postretirement costs	$125	$78	$125	$78
Environmental remediation costs	983	987	899	903
Revenue taxes	494	414	474	397
COVID-19 Deferral for Uncollectible Accounts Receivable	207	253	205	249
Deferred derivative losses - current	137	184	133	178
Deferred derivative losses - long term	99	31	89	26
Other	63	28	62	27
Total	$2,108	$1,975	$1,987	$1,858

*This table presents regulatory assets not earning a return for which no cash outlay has been made.