Fair Value Measurements (Tables)

3 Months Ended

Mar. 31, 2014

Fair Value Disclosures [Abstract]

Assets and Liabilities Measured at Fair Value on Recurring Basis

Assets and liabilities measured at fair value on a recurring basis as of March 31, 2014 are summarized below.

	Level 1				Level 2				Level 3				Netting Adjustments (d)						Total
(Millions of Dollars)	Con Edison		CECONY		Con Edison		CECONY		Con Edison		CECONY		Con Edison			CECONY			Con Edison		CECONY
Derivative assets:
Commodity (a)(e)(f)	$	8	$	7	$	175	$	46	$	25	$	13	$	(45	)	$	(3	)	$	163	$	63
Other assets (c)(e)(f)		142		135		115		105		—		—		—			—			257		240
Total	$	150	$	142	$	290	$	151	$	25	$	13	$	(45	)	$	(3	)	$	420	$	303
Derivative liabilities:
Commodity (a)(e)(f)	$	3	$	3	$	67	$	16	$	1	$	—	$	(65)		$	(16)		$	6	$	3
Interest rate contract (b)(e)(f)		—		—		2		—		—		—		—			—			2		—
Total	$	3	$	3	$	69	$	16	$	1	$	—	$	(65)		$	(16)		$	8	$	3

(a) A portion of the commodity derivatives categorized in Level 3 is valued using an internally developed model with observable inputs. The models also include some less readily observable inputs resulting in the classification of the entire contract as Level 3. See Note L.

(b) See Note L.

(c) Other assets are comprised of assets such as life insurance contracts within the deferred compensation plan and non-qualified retirement plans.

(d) Amounts represent the impact of legally-enforceable master netting agreements that allow the Companies to net gain and loss positions and cash collateral held or placed with the same counterparties.

(e) The Companies’ policy is to recognize transfers into and transfers out of the levels at the end of the reporting period. There were no transfers between levels 1, 2, and 3 for the three months ended March 31, 2014.

(f) Level 2 assets and liabilities include investments held in the deferred compensation plan and/or non-qualified retirement plans, interest rate swap, or exchange-traded contracts where there is insufficient market liquidity to warrant inclusion in Level 1, and certain over-the-counter derivative instruments for electricity and natural gas. Derivative instruments classified as Level 2 are valued using industry standard models that incorporate corroborated observable inputs; such as pricing services or prices from similar instruments that trade in liquid markets, time value, and volatility factors.

Assets and liabilities measured at fair value on a recurring basis as of December 31, 2013 are summarized below.

	Level 1				Level 2				Level 3				Netting Adjustments (d)				Total
(Millions of Dollars)	Con Edison		CECONY		Con Edison		CECONY		Con Edison		CECONY		Con Edison		CECONY		Con Edison		CECONY
Derivative assets:
Commodity (a)(e)(f)	$	3	$	3	$	130	$	13	$	11	$	6		$(62)		$3	$	82	$	25
Other assets (c)(e)(f)		141		134		113		103		—		—		—		—		254		237
Total	$	144	$	137	$	243	$	116	$	11	$	6		$(62)		$3	$	336	$	262
Derivative liabilities:
Commodity (a)(e)(f)	$	5	$	5	$	84	$	27	$	2	$	—		$(76)		$(18)	$	15	$	14
Interest rate contract (b)(e)(f)		—		—		2		—		—		—		—		—		2		—
Total	$	5	$	5	$	86	$	27	$	2	$	—		$(76)		$(18)	$	17	$	14

(a) A portion of the commodity derivatives categorized in Level 3 is valued using an internally developed model with observable inputs. The models also include some less readily observable inputs resulting in the classification of the entire contract as Level 3. See Note L.

(b) See Note L.

(c) Other assets are comprised of assets such as life insurance contracts within the deferred compensation plan and non-qualified retirement plans.

(d) Amounts represent the impact of legally-enforceable master netting agreements that allow the Companies to net gain and loss positions and cash collateral held or placed with the same counterparties.

(e) The Companies’ policy is to recognize transfers into and transfers out of the levels at the end of the reporting period. There were no transfers between levels 1, 2, and 3 for the year ended December 31, 2013.

(f) Level 2 assets and liabilities include investments held in the deferred compensation plan and/or non-qualified retirement plans, interest rate swap, or exchange-traded contracts where there is insufficient market liquidity to warrant inclusion in Level 1, and certain over-the-counter derivative instruments for electricity and natural gas. Derivative instruments classified as Level 2 are valued using industry standard models that incorporate corroborated observable inputs; such as pricing services or prices from similar instruments that trade in liquid markets, time value, and volatility factors.

Schedule of Commodity Derivatives

The managers of the risk management groups report to the Companies’ Vice President and Treasurer.

	Fair Value of Level 3 at March 31, 2014 (Millions of Dollars)			Valuation Techniques	Unobservable Inputs	Range
Con Edison—Commodity
Electricity		$	9	Discounted Cash Flow	Forward energy prices (a)	$28.00-$137.00 per MWH
				Discounted Cash Flow	Forward capacity prices (a)	$10.00 per kW-month
Transmission Congestion Contracts / Financial Transmission Rights			15	Discounted Cash Flow	Discount to adjust auction prices for inter-zonal forward price curves (b)	(5.8)%-50.6%
					Discount to adjust auction prices for historical monthly realized settlements (b)	(236.2)%-49.1%
					Inter-zonal forward price curves adjusted for historical zonal losses (b)	$(0.99)-$12.00 per MWH
Total Con Edison—Commodity		$	24
CECONY—Commodity
Transmission Congestion Contracts		$	13	Discounted Cash Flow	Discount to adjust auction prices for inter-zonal forward price curves (b)	(5.8)%-50.6%
					Discount to adjust auction prices for historical monthly realized settlements (b)	(236.2)%-49.1%

(a) Generally, increases/(decreases) in this input in isolation would result in a higher/(lower) fair value measurement.

(b) Generally, increases/(decreases) in this input in isolation would result in a lower/(higher) fair value measurement.

Reconciliation of Beginning and Ending Net Balances for Assets and Liabilities Measured at Level 3 Fair Value

The table listed below provides a reconciliation of the beginning and ending net balances for assets and liabilities measured at fair value as of March 31, 2014 and 2013 and classified as Level 3 in the fair value hierarchy:

	For the Three Months Ended March 31, 2014
			Total Gains/(Losses)— Realized and Unrealized
(Millions of Dollars)	Beginning Balance as of January 1, 2014		Included in Earnings		Included in Regulatory Assets and Liabilities		Purchases		Issuances		Sales		Settlements		Transfer In/Out of Level 3		Ending Balance as of March 31, 2014
Con Edison
Derivatives:
Commodity	$	9	$	50	$	4	$	8	$	—	$	—	$	(47)	$	—	$	24
CECONY
Derivatives:
Commodity	$	6	$	11	$	4	$	7	$	—	$	—	$	(15)	$	—	$	13

	For the Three Months Ended March 31, 2013
			Total Gains/(Losses)— Realized and Unrealized
(Millions of Dollars)	Beginning Balance as of January 1, 2013		Included in Earnings		Included in Regulatory Assets and Liabilities		Purchases		Issuances		Sales		Settlements		Transfer In/Out of Level 3		Ending Balance as of March 31,2013
Con Edison
Derivatives:
Commodity	$	(5)	$	31	$	5	$	4	$	—	$	—	$	(21)	$	—	$	14
CECONY
Derivatives:
Commodity	$	10	$	10	$	1	$	4	$	—	$	—	$	(14)	$	—	$	11