Leases

12 Months Ended

Dec. 31, 2023

Leases [Abstract]

Leases

Leases

The Companies lease land, office buildings, equipment and access rights to support electric transmission facilities. The Companies recognize lease right-of-use assets and lease liabilities on their consolidated balance sheets for virtually all of their leases (other than leases that meet the definition of a short-term lease, the expense for which was immaterial). A lease right-of-use asset represents a right to use an identifiable underlying asset and obtain substantially all of the economic benefits from the use of that asset for the lease term. A lease liability represents an obligation to make lease payments arising from the lease. Leases are classified as either operating leases or finance leases. Operating leases of the Utilities are included in operating lease right-of-use asset and operating lease liabilities on the Companies’ consolidated balance sheets. Operating leases of the Clean Energy businesses are included in assets held for sale and liabilities held for sale on Con Edison's consolidated balance sheet as of December 31, 2022. On March 1, 2023, Con Edison completed the sale of all of the stock of the Clean Energy Businesses. See Note W and Note X. Finance leases are included in other noncurrent assets, other current liabilities and other noncurrent liabilities. The Utilities, as regulated entities, are permitted to continue to recognize expense for operating leases using the timing that conforms to the regulatory rate treatment as rental payments are recovered from our customers and to account the same way for finance leases.

For new operating leases, the Companies recognize operating lease right-of-use assets and operating lease liabilities based on the present value of the future minimum lease payments over the lease term at commencement date. As most of the Companies’ leases do not provide an implicit rate, the Companies used their collateralized incremental borrowing rate based on the information available at the commencement date to determine the present value of future payments. Most of the Companies’ leases have remaining lease terms of one year to 20 years and may include options to renew or extend the leases for up to five years at the fair rental value. The Companies' lease terms include options to renew, extend or terminate the lease when it is reasonably certain that the Companies will exercise that option. There were no leases with material variable lease payments or residual value guarantees. The Companies account for lease and non-lease components as a single lease component.

Operating lease cost and cash paid for amounts included in the measurement of lease liabilities for the years ended December 31, 2023, 2022, and 2021 were as follows:

	Con Edison (a)			CECONY
(Millions of Dollars)	2023	2022	2021	2023	2022	2021
Operating lease cost	$70	$88	$86	$66	$67	$66
Operating lease cash flows	$68	$83	$80	$65	$64	$63

(a)Amounts for Con Edison include amounts for the Clean Energy Businesses through February 2023. On March 1, 2023, Con Edison completed the sale of all of the stock of the Clean Energy Businesses. See Note W and Note X.

As of December 31, 2023, 2022, and 2021, assets recorded as finance leases for Con Edison were $2 million for each year and the accumulated amortization associated with such finance leases were $2 million, $5 million, and $4 million, respectively. As of December 31, 2023, 2022, and 2021, assets recorded as finance leases for CECONY were $1 million for each year and the accumulated amortization associated with such finance leases were $2 million for each year.

For the years ended December 31, 2023, 2022, and 2021, finance lease costs and cash flows for Con Edison and CECONY were immaterial.

Right-of-use assets obtained in exchange for lease obligations for Con Edison and CECONY were $11 million for the year ended December 31, 2023 and $79 million and $68 million, respectively, for the year ended December 31, 2022 of which $10 million for Con Edison related to the Clean Energy Businesses. On March 1, 2023, Con Edison completed the sale of all of the stock of the Clean Energy Businesses. See Note W and Note X.

Other information related to leases for Con Edison and CECONY at December 31, 2023 and 2022 was as follows:

	Con Edison		CECONY
	2023	2022	2023	2022
Weighted Average Remaining Lease Term:
Operating leases, (a) (b)	11.4 years	12.3 years	11.4 years	12.4 years
Finance leases	6.6 years	7.2 years	2.7 years	2.3 years
Weighted Average Discount Rate:
Operating leases, (a) (b)	3.7%	3.7%	3.7%	3.7%
Finance leases	3.0%	1.9%	3.1%	1.0%

(a)Amounts for Con Edison in 2022 exclude operating leases of the Clean Energy Businesses, inclusive of Broken Bow II, that were classified as held for sale as of December 31, 2022. Including the operating leases of the Clean Energy Businesses would result in a weighted average remaining lease term of 18.3 years and a weighted average discount rate of 4.4 percent as of December 31, 2022. On March 1, 2023, Con Edison completed the sale of all of the stock of the Clean Energy Businesses. See Note W and Note X.

(b)Amounts for Con Edison in 2023 exclude the operating lease of Broken Bow II, that was classified as held for sale as of December 31, 2023. Including the operating lease of Broken Bow II would result in a weighted average remaining lease term of 11.6 years and a weighted average discount rate of 3.8 percent as of December 31, 2023. See Note W and Note X.

Future minimum lease payments under non-cancellable leases at December 31, 2023 were as follows:

(Millions of Dollars)	Con Edison		CECONY
Year Ending December 31, (b)	Operating Leases	Finance Leases	Operating Leases	Finance Leases
2024	$67	$1	$66	$1
2025	66	—	66	—
2026	66	—	66	—
2027	65	—	65	—
2028	60	—	60	—
All years thereafter	365	1	365	—
Total future minimum lease payments	$689	$2	$688	$1
Less: imputed interest	(144)	—	(143)	—
Total	$545	$2	$545	$1
Reported as of December 31, 2023
Operating lease liabilities (current) (a)	$116	$—	$116	$—
Operating lease liabilities held for sale (current)	2	—	—	—
Operating lease liabilities (noncurrent) (a)	429	—	429	—
Operating lease liabilities held for sale (noncurrent)	5	—	—	—
Other current liabilities	—	1	—	1
Other noncurrent liabilities	—	1	—	—
Total	$552	$2	$545	$1

(a)Amounts exclude operating lease liabilities of Broken Bow II ($7 million) that are classified as current and noncurrent liabilities held for sale on Con Edison's consolidated balance sheet as of December 31, 2023. See Note X.

(b)Amounts exclude operating lease future minimum lease payments of Broken Bow II, of $3 million in total for years ended December 31, 2024 through 2028, and $10 million for all years thereafter, and imputed interest of $6 million.

The Companies are lessors under certain leases whereby the Companies own real estate and distribution poles and lease portions of them to others. Revenue under such leases was immaterial for Con Edison and CECONY for the years ended December 31, 2023 and 2022.

Leases

Leases

The Companies lease land, office buildings, equipment and access rights to support electric transmission facilities. The Companies recognize lease right-of-use assets and lease liabilities on their consolidated balance sheets for virtually all of their leases (other than leases that meet the definition of a short-term lease, the expense for which was immaterial). A lease right-of-use asset represents a right to use an identifiable underlying asset and obtain substantially all of the economic benefits from the use of that asset for the lease term. A lease liability represents an obligation to make lease payments arising from the lease. Leases are classified as either operating leases or finance leases. Operating leases of the Utilities are included in operating lease right-of-use asset and operating lease liabilities on the Companies’ consolidated balance sheets. Operating leases of the Clean Energy businesses are included in assets held for sale and liabilities held for sale on Con Edison's consolidated balance sheet as of December 31, 2022. On March 1, 2023, Con Edison completed the sale of all of the stock of the Clean Energy Businesses. See Note W and Note X. Finance leases are included in other noncurrent assets, other current liabilities and other noncurrent liabilities. The Utilities, as regulated entities, are permitted to continue to recognize expense for operating leases using the timing that conforms to the regulatory rate treatment as rental payments are recovered from our customers and to account the same way for finance leases.

For new operating leases, the Companies recognize operating lease right-of-use assets and operating lease liabilities based on the present value of the future minimum lease payments over the lease term at commencement date. As most of the Companies’ leases do not provide an implicit rate, the Companies used their collateralized incremental borrowing rate based on the information available at the commencement date to determine the present value of future payments. Most of the Companies’ leases have remaining lease terms of one year to 20 years and may include options to renew or extend the leases for up to five years at the fair rental value. The Companies' lease terms include options to renew, extend or terminate the lease when it is reasonably certain that the Companies will exercise that option. There were no leases with material variable lease payments or residual value guarantees. The Companies account for lease and non-lease components as a single lease component.

Operating lease cost and cash paid for amounts included in the measurement of lease liabilities for the years ended December 31, 2023, 2022, and 2021 were as follows:

	Con Edison (a)			CECONY
(Millions of Dollars)	2023	2022	2021	2023	2022	2021
Operating lease cost	$70	$88	$86	$66	$67	$66
Operating lease cash flows	$68	$83	$80	$65	$64	$63

(a)Amounts for Con Edison include amounts for the Clean Energy Businesses through February 2023. On March 1, 2023, Con Edison completed the sale of all of the stock of the Clean Energy Businesses. See Note W and Note X.

As of December 31, 2023, 2022, and 2021, assets recorded as finance leases for Con Edison were $2 million for each year and the accumulated amortization associated with such finance leases were $2 million, $5 million, and $4 million, respectively. As of December 31, 2023, 2022, and 2021, assets recorded as finance leases for CECONY were $1 million for each year and the accumulated amortization associated with such finance leases were $2 million for each year.

For the years ended December 31, 2023, 2022, and 2021, finance lease costs and cash flows for Con Edison and CECONY were immaterial.

Right-of-use assets obtained in exchange for lease obligations for Con Edison and CECONY were $11 million for the year ended December 31, 2023 and $79 million and $68 million, respectively, for the year ended December 31, 2022 of which $10 million for Con Edison related to the Clean Energy Businesses. On March 1, 2023, Con Edison completed the sale of all of the stock of the Clean Energy Businesses. See Note W and Note X.

Other information related to leases for Con Edison and CECONY at December 31, 2023 and 2022 was as follows:

	Con Edison		CECONY
	2023	2022	2023	2022
Weighted Average Remaining Lease Term:
Operating leases, (a) (b)	11.4 years	12.3 years	11.4 years	12.4 years
Finance leases	6.6 years	7.2 years	2.7 years	2.3 years
Weighted Average Discount Rate:
Operating leases, (a) (b)	3.7%	3.7%	3.7%	3.7%
Finance leases	3.0%	1.9%	3.1%	1.0%

(a)Amounts for Con Edison in 2022 exclude operating leases of the Clean Energy Businesses, inclusive of Broken Bow II, that were classified as held for sale as of December 31, 2022. Including the operating leases of the Clean Energy Businesses would result in a weighted average remaining lease term of 18.3 years and a weighted average discount rate of 4.4 percent as of December 31, 2022. On March 1, 2023, Con Edison completed the sale of all of the stock of the Clean Energy Businesses. See Note W and Note X.

(b)Amounts for Con Edison in 2023 exclude the operating lease of Broken Bow II, that was classified as held for sale as of December 31, 2023. Including the operating lease of Broken Bow II would result in a weighted average remaining lease term of 11.6 years and a weighted average discount rate of 3.8 percent as of December 31, 2023. See Note W and Note X.

Future minimum lease payments under non-cancellable leases at December 31, 2023 were as follows:

(Millions of Dollars)	Con Edison		CECONY
Year Ending December 31, (b)	Operating Leases	Finance Leases	Operating Leases	Finance Leases
2024	$67	$1	$66	$1
2025	66	—	66	—
2026	66	—	66	—
2027	65	—	65	—
2028	60	—	60	—
All years thereafter	365	1	365	—
Total future minimum lease payments	$689	$2	$688	$1
Less: imputed interest	(144)	—	(143)	—
Total	$545	$2	$545	$1
Reported as of December 31, 2023
Operating lease liabilities (current) (a)	$116	$—	$116	$—
Operating lease liabilities held for sale (current)	2	—	—	—
Operating lease liabilities (noncurrent) (a)	429	—	429	—
Operating lease liabilities held for sale (noncurrent)	5	—	—	—
Other current liabilities	—	1	—	1
Other noncurrent liabilities	—	1	—	—
Total	$552	$2	$545	$1

(a)Amounts exclude operating lease liabilities of Broken Bow II ($7 million) that are classified as current and noncurrent liabilities held for sale on Con Edison's consolidated balance sheet as of December 31, 2023. See Note X.

(b)Amounts exclude operating lease future minimum lease payments of Broken Bow II, of $3 million in total for years ended December 31, 2024 through 2028, and $10 million for all years thereafter, and imputed interest of $6 million.

The Companies are lessors under certain leases whereby the Companies own real estate and distribution poles and lease portions of them to others. Revenue under such leases was immaterial for Con Edison and CECONY for the years ended December 31, 2023 and 2022.