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Form 10-Q
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549

/x/	Quarterly Report Pursuant To Section 13 or 15(d) of the Securities Exchange Act of 1934
For The Quarterly Period Ended March 31, 2001
or
/ /	Transition Report Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934

Commission File Number	Exact name of registrant as specified in its charter and principal office address and telephone number	State of Incorporation	I.R.S. Employer ID. Number
1-14514	Consolidated Edison, Inc. 4 Irving Place, New York, New York 10003 (212) 460-4600	New York	13-3965100
1-1217	Consolidated Edison Company of New York, Inc. 4 Irving Place, New York, New York 10003 (212) 460-4600	New York	13-5009340
1-4315	Orange and Rockland Utilities, Inc. One Blue Hill Plaza, Pearl River, New York 10965 (914) 352-6000	New York	13-1727729

Indicate by check mark whether each Registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months, and (2) has been subject to such filing requirements for the past 90 days. Yes /x/  No / /

As of the close of business on April 30, 2001, Consolidated Edison, Inc. (Con Edison) had outstanding 212,096,481 Common Shares ($.10 par value). Con Edison owns all of the outstanding common equity of Consolidated Edison Company of New York, Inc. (Con Edison of New York) and Orange and Rockland Utilities, Inc. (O&R).

O&R meets the conditions specified in general instruction H(1)(a) and (b) of form 10-Q
and is therefore filing this form with the reduced disclosure format.

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TABLE OF CONTENTS

Filing Format
Forward-Looking Statements
Part I.	Financial Information
Item 1.	Financial Statements
	Con Edison	Consolidated Balance Sheet
		Consolidated Income Statement
		Consolidated Statement of Comprehensive Income
		Consolidated Statement of Cash Flows
		Notes to Financial Statements
	Con Edison	Consolidated Balance Sheet
	of New York	Consolidated Income Statement
		Consolidated Statement of Comprehensive Income
		Consolidated Statement of Cash Flows
		Notes to Financial Statements
	O&R	Consolidated Balance Sheet
		Consolidated Income Statement
		Consolidated Statement of Comprehensive Income
		Consolidated Statement of Cash Flows
		Notes to Financial Statements
Item 2.	Management's Discussion and Analysis of Financial Condition and Results of Operations
	Con Edison
	Con Edison of New York
	O&R
	O&R Management's Narrative Analysis of the Results of Operations
Item 3	Quantitative and Qualitative Disclosures About Market Risk
	Con Edison
	Con Edison of New York
	O&R
Part II.	Other Information
Item 1.	Legal Proceedings
Item 6.	Exhibits and Reports on Form 8-K

* O&R is omitting this information pursuant to General Instruction H of Form 10-Q.

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Filing Format

This Quarterly Report on Form 10-Q is a combined report being filed separately by three different registrants: Consolidated Edison, Inc. (Con Edison), Consolidated Edison Company of New York, Inc. (Con Edison of New York) and Orange and Rockland Utilities, Inc. (O&R). Neither Con Edison of New York nor O&R makes any representation as to the information contained in this report relating to Con Edison or the subsidiaries of Con Edison other than itself.

O&R, a wholly-owned subsidiary of Con Edison, meets the conditions specified in General Instruction H of Form 10-Q and is permitted to use the reduced disclosure format for wholly-owned subsidiaries of companies, such as Con Edison, that are reporting companies under the Securities Exchange Act of 1934. Accordingly, O&R has omitted from this report the information called for by Part I, Item 2, Management's Discussion and Analysis of Financial Condition and Results of Operations and has included in this report its Management's Narrative Analysis of the Results of Operations. In accordance with general instruction H, O&R has also omitted from this report the information, if any, called for by Part I, Item 3, Quantitative and Qualitative Disclosure About Market Risk; Part II, Item 2, Changes in Securities and Use of Proceeds; Part II, Item 3, Defaults Upon Senior Securities; and Part II, Item 4, Submission of Matters to a Vote of Security Holders.

Forward-Looking Statements

This Quarterly Report on Form 10-Q includes forward-looking statements, which are statements of future expectation and not facts. Words such as "estimates," "expects," "anticipates," "intends," "plans" and similar expressions identify forward-looking statements. Actual results or developments might differ materially from those included in the forward-looking statements because of factors such as competition and industry restructuring, developments relating to Indian Point 2 (see Note C to the Con Edison financial statements in Part I, Item 1 of this report), developments relating to Northeast Utilities (see Note D to the Con Edison financial statements in Part I, Item 1 of this report), developments in wholesale energy markets, technological developments, changes in economic conditions, changes in historical weather patterns, changes in laws, regulations or regulatory policies, developments in legal or public policy doctrines, and other presently unknown or unforeseen factors.

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Consolidated Edison, Inc.


CONSOLIDATED BALANCE SHEET

(Unaudited)

			As at
			March 31, 2001		December 31, 2000
			(Thousands of Dollars)
ASSETS
UTILITY PLANT, AT ORIGINAL COST
	Electric		$	11,752,292	$	11,808,102
	Gas			2,327,139		2,300,055
	Steam			742,840		740,189
	General			1,393,541		1,388,602
	Unregulated generating assets			279,156		279,060
	TOTAL			16,494,968		16,516,008
	Less: Accumulated depreciation			5,210,338		5,234,701
	NET			11,284,630		11,281,307
	Construction work in progress			538,022		504,471
	Nuclear fuel assemblies and components, less accumulated amortization			104,087		107,641
NET UTILITY PLANT				11,926,739		11,893,419
CURRENT ASSETS
	Cash and temporary cash investments			59,566		94,828
	Accounts receivable - customer, less allowance for uncollectible accounts of $32,282 and $33,714			926,503		910,344
	Other receivables			118,190		168,415
	Fuel, at average cost			16,106		29,148
	Gas in storage, at average cost			49,190		82,419
	Materials and supplies, at average cost			125,041		131,362
	Prepayments			664,539		524,377
	Other current assets			87,451		75,094
TOTAL CURRENT ASSETS				2,046,586		2,015,987
INVESTMENTS
	Nuclear decommissioning trust funds			335,355		328,969
	Other			256,136		238,871
TOTAL INVESTMENTS				591,491		567,840
DEFERRED CHARGES, REGULATORY ASSETS AND NONCURRENT ASSETS
	Goodwill			485,388		488,702
	Regulatory assets
		Future federal income tax		668,685		676,527
		Recoverable energy costs		184,691		340,495
		Real estate sale costs - First Avenue properties		103,348		103,009
		Deferred special retirement program costs		86,949		88,633
		Divestiture - capacity replacement reconciliation		73,850		73,850
		Workers' compensation reserve		54,097		47,097
		Accrued unbilled revenues		66,196		72,619
		Deferred revenue taxes		32,535		43,879
		Deferred environmental remediation costs		54,648		49,056
		Other		126,357		112,604
	TOTAL REGULATORY ASSETS			1,451,356		1,607,769
	Other deferred charges and noncurrent assets			181,880		193,528
TOTAL DEFERRED CHARGES, REGULATORY ASSETS AND NONCURRENT ASSETS				2,118,624		2,289,999
TOTAL			$	16,683,440	$	16,767,245

The accompanying notes are an integral part of these financial statements.

4

Consolidated Edison, Inc.


CONSOLIDATED BALANCE SHEET

(Unaudited)

			As at
			March 31, 2001			December 31, 2000
			(Thousands of Dollars)
CAPITALIZATION AND LIABILITIES
CAPITALIZATION
	Common stock, authorized 500,000,000 shares; outstanding 212,070,531 shares and 212,027,131 shares		$	1,482,341		$	1,482,341
	Retained earnings			5,102,746			5,040,931
	Treasury stock, at cost; 23,417,563 shares and 23,460,963 shares			(1,010,947	)		(1,012,919	)
	Capital stock expense			(35,749	)		(35,817	)
	Accumulated other comprehensive income			(17,546	)		(2,147	)
	TOTAL COMMON SHAREHOLDERS' EQUITY			5,520,845			5,472,389
	Preferred stock subject to mandatory redemption			37,050			37,050
	Other preferred stock			212,563			212,563
	Long-term debt			5,135,175			5,415,409
TOTAL CAPITALIZATION				10,905,633			11,137,411
NONCURRENT LIABILITIES
	Obligations under capital leases			30,727			31,504
	Accumulated provision for injuries and damages			168,541			160,671
	Pension and benefits reserve			197,274			181,346
	Other noncurrent liabilities			38,806			40,456
TOTAL NONCURRENT LIABILITIES				435,348			413,977
CURRENT LIABILITIES
	Long-term debt due within one year			459,590			309,590
	Notes payable			438,062			255,042
	Accounts payable			756,887			1,020,401
	Customer deposits			204,710			202,888
	Accrued taxes			91,182			64,345
	Accrued interest			88,521			85,276
	Accrued wages			87,486			70,951
	Other current liabilities			302,648			328,686
TOTAL CURRENT LIABILITIES				2,429,086			2,337,179
DEFERRED CREDITS AND REGULATORY LIABILITIES
	Accumulated deferred federal income tax			2,323,842			2,302,764
	Accumulated deferred investment tax credits			127,791			131,429
	Regulatory liabilities
		Gain on divestiture		88,321			50,000
		NY state tax law revisions		56,671			59,523
		Deposit from sale of First Avenue properties		50,000			50,000
		Accrued electric rate reduction		38,018			38,018
		NYPA revenue increase		37,368			35,021
		Other		191,007			211,706
	TOTAL REGULATORY LIABILITIES			461,385			444,268
	Other deferred credits			355			217
TOTAL DEFERRED CREDITS AND REGULATORY LIABILITIES				2,913,373			2,878,678
TOTAL			$	16,683,440		$	16,767,245

The accompanying notes are an integral part of these financial statements.

5

Consolidated Edison, Inc.


CONSOLIDATED INCOME STATEMENT

For the Three Months Ended March 31, 2001 and 2000 (Unaudited)		2001			2000
		(Thousands of Dollars)
OPERATING REVENUES
	Electric	$	1,707,374		$	1,512,249
	Gas		701,819			469,473
	Steam		258,252			170,258
	Non-utility		218,819			166,611
TOTAL OPERATING REVENUES			2,886,264			2,318,591
OPERATING EXPENSES
	Purchased power		1,015,885			730,188
	Fuel		170,316			85,238
	Gas purchased for resale		463,485			266,298
	Other operations		261,604			312,098
	Maintenance		128,446			106,832
	Depreciation and amortization		134,998			142,722
	Taxes, other than income tax		307,750			290,735
	Income tax		117,298			101,771
TOTAL OPERATING EXPENSES			2,599,782			2,035,882
OPERATING INCOME			286,482			282,709
OTHER INCOME (DEDUCTIONS)
	Investment income		1,465			4,399
	Allowance for equity funds used during construction		243			(577	)
	Other income less miscellaneous deductions		(3,116	)		(262	)
	Income tax		5,595			(1,200	)
TOTAL OTHER INCOME (DEDUCTIONS)			4,187			2,360
INCOME BEFORE INTEREST CHARGES			290,669			285,069
	Interest on long-term debt		99,208			83,313
	Other interest		10,487			11,978
	Allowance for borrowed funds used during construction		(1,538	)		(1,755	)
NET INTEREST CHARGES			108,157			93,536
PREFERRED STOCK DIVIDEND REQUIREMENTS			3,398			3,398
NET INCOME FOR COMMON STOCK		$	179,114		$	188,135
COMMON SHARES OUTSTANDING - AVERAGE (000)			212,160			212,641
BASIC EARNINGS PER SHARE		$	0.84		$	0.88
DILUTED EARNINGS PER SHARE		$	0.84		$	0.88
DIVIDENDS DECLARED PER SHARE OF COMMON STOCK		$	0.550		$	0.545

The accompanying notes are an integral part of these financial statements.

6

Consolidated Edison, Inc.


CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME

For the Three Months Ended March 31, 2001 and 2000 (Unaudited)		2001			2000
		(Thousands of Dollars)
NET INCOME		$	179,114		$	188,135
OTHER COMPREHENSIVE INCOME (LOSS), NET OF TAXES
	Investment in Marketable Equity Securities, net of $295 taxes		(212	)		-
	Minimum pension liability adjustments, net of $1,362 taxes		(2,348	)		-
	Unrealized gains (losses) on derivatives qualified as hedges due to cumulative effect of a change in accounting principle, net of $6,765 taxes		(8,900	)		-
	Unrealized gains (losses) on derivatives qualified as hedges, net of $406 taxes		(2,013	)		-
	Less: Reclassification adjustment for losses (gains) included in net income, net of ($1,037) taxes		1,926			-
TOTAL OTHER COMPREHENSIVE INCOME (LOSS), NET OF TAXES			(15,399	)		-
COMPREHENSIVE INCOME		$	163,715		$	188,135

The accompanying notes are an integral part of these financial statements.

7

Consolidated Edison, Inc.


CONSOLIDATED STATEMENT OF CASH FLOWS

For the Three Months Ended March 31, 2001 and 2000 (Unaudited)				2001			2000
				(Thousands of Dollars)
OPERATING ACTIVITIES
	Net income for common stock			$	179,114		$	188,135
	PRINCIPAL NON-CASH CHARGES (CREDITS) TO INCOME
		Depreciation and amortization			134,998			142,722
		Income tax deferred (excluding taxes resulting from divestiture of plant)			5,623			67,211
		Common equity component of allowance for funds used during construction			243			(577	)
		Prepayments - accrued pension credits			(80,635	)		(51,021	)
		Other non-cash charges			17,607			27,701
	CHANGES IN ASSETS AND LIABILITIES
		Accounts receivable - customer, less allowance for uncollectibles			(16,159	)		(58,508	)
		Materials and supplies, including fuel and gas in storage			44,940			12,219
		Prepayments (other than pensions), other receivables and other current assets			(21,659	)		(76,615	)
		Deferred recoverable energy costs			155,804			(23,303	)
		Cost of removal less salvage			(21,456	)		(18,800	)
		Accounts payable			(263,514	)		(4,994	)
		Other-net			30,819			(5,003	)
NET CASH FLOWS FROM OPERATING ACTIVITIES					165,725			199,167
INVESTING ACTIVITIES INCLUDING CONSTRUCTION
		Utility construction expenditures			(203,096	)		(180,226	)
		Nuclear fuel expenditures			(4,069	)		(21,124	)
		Contributions to nuclear decommissioning trust			(5,325	)		(5,325	)
		Common equity component of allowance for funds used during construction			(243	)		577
		Divestiture of utility plant (net of federal income tax)			100,041			-
		Investments by unregulated subsidiaries			(6,802	)		(9,237	)
		Unregulated subsidiary utility plant			2,179			(734	)
NET CASH FLOWS USED IN INVESTING ACTIVITIES INCLUDING CONSTRUCTION					(117,315	)		(216,069	)
FINANCING ACTIVITIES INCLUDING DIVIDENDS
		Repurchase of common stock			-			(68,524	)
		Net proceeds from short-term debt			183,020			14,737
		Retirement of long-term debt			(150,000	)		(225,000	)
		Issuance and refunding costs			(76	)		(49	)
		Common stock dividends			(116,616	)		(115,708	)
NET CASH FLOWS USED IN FINANCING ACTIVITIES INCLUDING DIVIDENDS					(83,672	)		(394,544	)
NET DECREASE IN CASH AND TEMPORARY CASH INVESTMENTS					(35,262	)		(411,446	)
CASH AND TEMPORARY CASH INVESTMENTS AT JANUARY 1					94,828			485,050
CASH AND TEMPORARY CASH INVESTMENTS AT MARCH 31				$	59,566		$	73,604
SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION
		Cash paid during the period for:
			Interest	$	81,284		$	93,563
			Income taxes		42,600			-

The accompanying notes are an integral part of these financial statements.

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NOTES TO FINANCIAL STATEMENTS - CON EDISON

Note A - General

These footnotes accompany and form an integral part of the interim consolidated financial statements of Consolidated Edison, Inc. (Con Edison) and its subsidiaries, including the regulated utility Consolidated Edison Company of New York, Inc. (Con Edison of New York), the regulated utility Orange and Rockland Utilities, Inc. (O&R) and several non-utility subsidiaries. These financial statements are unaudited but, in the opinion of Con Edison's management, reflect all adjustments (which include only normally recurring adjustments) necessary for a fair statement of the results for the interim periods presented. These financial statements should be read together with the audited Con Edison financial statements (including the notes thereto) included in the combined Con Edison, Con Edison of New York and O&R Annual Reports on Form 10-K for the year ended December 31, 2000 (the Form 10-K).

Note B - Environmental Matters

Hazardous substances, such as asbestos, polychlorinated biphenyls (PCBs) and coal tar, have been used or generated in the course of operations of Con Edison's utility subsidiaries and may be present in their facilities and equipment.

The Federal Comprehensive Environmental Response, Compensation and Liability Act of 1980 (Superfund) and similar state statutes impose joint and several strict liability, regardless of fault, upon generators of hazardous substances for resulting removal and remedial costs and environmental damages. Liabilities under these laws can be material and in some instances may be imposed without regard to fault, or may be imposed for past acts, even though such past acts may have been lawful at the time they occurred.

At March 31, 2001, Con Edison had accrued $121.3 million as its best estimate of the utility subsidiaries' liability for sites as to which they have received process or notice alleging that hazardous substances generated by them (and, in most instances, other potentially responsible parties) were deposited. There will be additional liability at these sites and other sites, the amount of which is not presently determinable but may be material to Con Edison's financial position, results of operations or liquidity.

Con Edison's utility subsidiaries are permitted under current rate agreements to defer for subsequent recovery through rates certain site investigation and remediation costs with respect to hazardous waste. At March 31, 2001, $54.6 million of such costs had been deferred as regulatory assets.

Suits have been brought in New York State and federal courts against Con Edison's utility subsidiaries and many other defendants, wherein a large number of plaintiffs sought large amounts of compensatory and punitive damages for deaths and injuries allegedly caused by exposure to asbestos at various premises of the utility subsidiaries. Many of these suits have been disposed of without any payment by the utility subsidiaries, or for immaterial amounts. The amounts specified in all the remaining suits total billions of dollars but Con Edison believes that these amounts are greatly exaggerated, as were the claims already

9

disposed of. Based on the information and relevant circumstances known to Con Edison at this time, it does not believe that these suits will have a material adverse effect on its financial position, results of operations or liquidity.

Note C - Nuclear Generation

The Indian Point 2 nuclear generating unit, which Con Edison of New York owns and has agreed to sell, was out of service from February 2000 to January 2001. The New York State Public Service Commission (PSC) is investigating the Indian Point 2 outage and its causes and the prudence of the company's actions regarding the operation and maintenance of Indian Point 2. An appeal is pending in the United States Court of Appeals for the Second Circuit of the October 2000 decision by the United States District Court for the Northern District of New York, in an action entitled Consolidated Edison Company of New York, Inc. v. Pataki, et al., in which the court determined that the law that directed the PSC to prohibit the company from recovering Indian Point 2 replacement power costs from customers was unconstitutional and granted the company's motion for a permanent injunction to prevent its implementation. The staff of the Nuclear Regulatory Commission is monitoring Indian Point 2 with heightened oversight. The company is unable to predict whether or not any Indian Point 2-related proceedings, lawsuits, legislation or other actions will have a material adverse effect on its financial position, results of operations or liquidity. For additional information about Indian Point 2, its pending sale and the outage, see Note G to Con Edison's financial statements included in Item 8 of the Form 10-K.

Note D - Northeast Utilities

On March 6, 2001, Con Edison commenced an action in the United States District Court for the Southern District of New York, entitled Consolidated Edison, Inc. v. Northeast Utilities, seeking a declaratory judgment that Northeast Utilities has failed to meet certain conditions precedent to Con Edison's obligation to complete its acquisition of Northeast Utilities pursuant to their agreement and plan of merger, dated as of October 13, 1999, as amended and restated as of January 11, 2000 (the merger agreement). The action also seeks the court's declaration that under the merger agreement Con Edison has no further or continuing obligations to Northeast Utilities, and that Northeast Utilities has no further or continuing rights as against Con Edison.

On March 12, 2001, Northeast Utilities commenced an action in the same court claiming that Con Edison materially breached the merger agreement by repudiating its obligations under the merger agreement and refusing to proceed with the transaction on the terms set forth in the merger agreement. The action also claims that, as a result of Con Edison's breach of the merger agreement, Northeast Utilities and its shareholders have suffered substantial damages, including the difference between the consideration to be paid to Northeast Utilities shareholders pursuant to the merger agreement and the current market value of Northeast Utilities common stock, expenditures in connection with regulatory approvals and lost business opportunities. Pursuant to the merger agreement, Con Edison agreed to acquire Northeast Utilities for $26.00 per share (an estimated aggregate of not more than $3.9 billion) plus $0.0034 per share for each day after August 5, 2000 through the day prior to the completion of the transaction, payable 50 percent in cash and 50 percent in stock.

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Con Edison believes that it is not obligated to acquire Northeast Utilities because Northeast Utilities does not meet the merger agreement's conditions that Northeast Utilities perform all of its obligations under the merger agreement, including the obligation that it carry on its businesses in the ordinary course consistent with past practice; that the representations and warranties made by it in the merger agreement were true and correct when made and remain true and correct; and that there be no material adverse change with respect to Northeast Utilities. Con Edison believes that it has not materially breached the merger agreement. Con Edison is unable to predict whether or not any Northeast Utilities-related lawsuits or other actions will have a material adverse effect on Con Edison's financial position, results of operations or liquidity.

Note E - Derivative Instruments and Hedging Activities

As of January 2001, Con Edison adopted Statement of Financial Accounting Standards No. 133, "Accounting for Derivative Instruments and Hedging Activities," as amended by SFAS No. 137, "Deferral of the Effective Date of FASB Statement No. 133," and SFAS No. 138, "Accounting for Certain Derivative Instruments and Certain Hedging Activities - an amendment of FASB Statement No. 133" (SFAS No. 133).

Neither Con Edison nor any of its subsidiaries, other than Consolidated Edison Energy, Inc., enters into derivative transactions that will not qualify for deferred accounting treatment. At March 31, 2001, deferred gains or losses were not material. Con Edison Energy, as discussed below, is an "energy trading organization."

Energy Trading

Con Edison's subsidiaries use derivative instruments to hedge purchases or sales of electricity and gas against adverse market price fluctuations.

Con Edison's utility subsidiaries, pursuant to Statement of Financial Accounting Standards No. 71, "Accounting for the Effects of Certain Types of Regulation" (SFAS No. 71), defer recognition in income of hedging gains and losses until the electricity or gas is purchased or sold. Pursuant to rate provisions that permit the recovery of the cost of purchased power and gas, Con Edison's utility subsidiaries credit or charge to their customers hedging gains or losses and related transaction costs. See "Recoverable Energy Costs" in Note A to the company's financial statements included in Item 8 of the Form 10-K. Where SFAS No. 71 does not allow deferred recognition in income, Con Edison's utility subsidiaries have elected special hedge accounting pursuant to SFAS No. 133 to defer recognition of unrealized hedging gains and losses. Upon adoption of SFAS No. 133, Con Edison's utility subsidiaries had no transition adjustments to recognize in other comprehensive income. At March 31, 2001, the utility subsidiaries had $1.4 million of net hedging losses deferred as regulatory assets.

Consolidated Edison Solutions, Inc., a wholly-owned subsidiary of Con Edison (which provides competitive gas and electric supply and energy-related products and services), defers recognition in income of hedging gains and losses until the related electricity or gas is purchased or sold. Pursuant to SFAS No. 133, Con Edison Solutions has elected cash flow hedging for most such transactions and defers any changes in fair value of the transactions in other comprehensive income until the hedging transactions are

11

terminated. Any hedge ineffectiveness is recognized in income in the period in which it occurs. Upon adoption of SFAS No. 133, Con Edison Solutions recognized transition adjustments of $1.9 million in other comprehensive income and $0.4 million in income. In the quarter ended March 31, 2001, the company reclassified $1.9 million of accumulated other comprehensive income to income and recognized in income a pre-tax loss of $1.0 million relating to hedge ineffectiveness. At March 31, 2001, the company had deferred net hedging losses of $0.2 million in other comprehensive income.

Consolidated Edison Energy, Inc., a wholly-owned subsidiary of Con Edison (which markets specialized energy supply services to wholesale customers), enters into over-the-counter and exchange traded contracts for the purchase and sale of electricity or gas (which may provide for either physical or financial settlement) and is considered an "energy trading organization" required to account for such trading activities in accordance with FASB Emerging Issues Task Force Issue No. 98-10, "Accounting for Contracts Involved in Energy Trading and Risk Management Activities" (98-10). Con Edison Energy recognized in income a pre-tax gain of $0.5 million in the quarter ended March 31, 2001, reflecting mark to market gains relating to its outstanding contracts at March 31, 2001. During the quarter ended March 31, 2001, Con Edison Energy entered into transactions for another subsidiary of Con Edison, as to which the company recognized in income a pre-tax mark to market gain of $7.4 million pursuant to 98-10.

Interest Rate Hedging

In connection with its $55 million promissory note issued to the New York State Energy Research and Development Authority for the net proceeds of the Authority's variable rate Pollution Control Refunding Revenue Bonds (O&R Projects), 1994 Series A (the 1994 Bonds), O&R has a swap agreement pursuant to which it pays interest at a fixed rate of 6.09 percent and is paid interest at the same variable rate as is paid on the 1994 Bonds. Upon adoption of SFAS No. 133, O&R recognized transition adjustments of $13.9 million in other comprehensive income. In the quarter ended March 31, 2001, the company did not reclassify any comprehensive income to income. If the swap agreement had been terminated on March 31, 2001, O&R would have been required to pay approximately $14.5 million. In connection with $95 million of variable rate loans undertaken relating to the Lakewood electric generating plant, Consolidated Edison Development, Inc., a wholly-owned subsidiary of Con Edison (which invests in and manages energy infrastructure projects), has swap agreements pursuant to which it pays interest at a fixed rate of 6.68 percent and is paid interest at a variable rate equal to the three-month London Interbank Offered Rate. Upon adoption of SFAS No. 133, Con Edison Development recognized transition adjustments of $2.6 million in other comprehensive income. In the quarter ended March 31, 2001, the company did not reclassify any comprehensive income to income. If these swap agreements had been terminated on March 31, 2001, Con Edison Development would have been required to pay approximately $4.7 million. Pursuant to SFAS No. 133, the O&R and Con Edison Development swap agreements are accounted for as cash flow hedges and changes in their fair value are recorded in other comprehensive income. The fair value of these swap agreements is calculated based upon current market conditions.

12

Note F - Financial Information by Business Segment

Consolidated Edison, Inc.


SEGMENT FINANCIAL INFORMATION

$000's

For the Three Months Ended March 31, 2001 and 2000 (Unaudited)	Electric				Gas
	2001		2000		2001		2000
Operating revenues	$	1,707,374	$	1,512,249	$	701,819	$	469,473
Intersegment revenues		3,529		18,743		719		2,331
Depreciation and amortization		106,098		117,179		17,741		16,884
Operating income		149,126		153,455		97,930		100,614

	Steam				Other
	2001		2000		2001			2000
Operating revenues	$	258,252	$	170,258	$	218,819		$	166,611
Intersegment revenues		467		417		2,336			369
Depreciation and amortization		4,405		4,592		6,754			4,067
Operating income		39,880		30,425		(454	)		(1,785	)

	Total
	2001		2000
Operating revenues	$	2,886,264	$	2,318,591
Intersegment revenues		7,051		21,860
Depreciation and amortization		134,998		142,722
Operating income		286,482		282,709

13

Consolidated Edison Company of New York, Inc.


CONSOLIDATED BALANCE SHEET

(Unaudited)

			As at
			March 31, 2001		December 31, 2000
			(Thousands of Dollars)
ASSETS
UTILITY PLANT, AT ORIGINAL COST
	Electric		$	11,077,066	$	11,135,764
	Gas			2,044,476		2,020,395
	Steam			742,840		740,189
	General			1,283,884		1,282,254
	TOTAL			15,148,266		15,178,602
	Less: Accumulated depreciation			4,785,401		4,819,626
	NET			10,362,865		10,358,976
	Construction work in progress			511,659		476,379
	Nuclear fuel assemblies and components, less accumulated amortization			104,087		107,641
NET UTILITY PLANT				10,978,611		10,942,996
CURRENT ASSETS
	Cash and temporary cash investments			35,780		70,273
	Accounts receivable - customer, less allowance for uncollectible accounts of $25,019 and $25,800			777,662		743,883
	Other receivables			129,385		155,656
	Fuel, at average cost			16,106		28,455
	Gas in storage, at average cost			39,406		64,144
	Materials and supplies, at average cost			112,781		118,344
	Prepayments			631,792		497,884
	Other current assets			53,760		50,977
TOTAL CURRENT ASSETS				1,796,672		1,729,616
INVESTMENTS
	Nuclear decommissioning trust funds			335,355		328,969
	Other			18,724		19,155
TOTAL INVESTMENTS				354,079		348,124
DEFERRED CHARGES, REGULATORY ASSETS AND NONCURRENT ASSETS
	Regulatory assets
		Future federal income tax		634,851		642,868
		Recoverable energy costs		124,751		274,288
		Real estate sale costs - First Avenue properties		103,348		103,009
		Divestiture - capacity replacement reconciliation		73,850		73,850
		Workers' compensation reserve		54,097		47,097
		Deferred special retirement program costs		45,605		46,743
		Accrued unbilled gas revenue		43,594		43,594
		Deferred revenue taxes		23,640		36,542
		Other		120,670		100,843
	TOTAL REGULATORY ASSETS			1,224,406		1,368,834
	Other deferred charges and noncurrent assets			161,997		158,371
TOTAL DEFERRED CHARGES, REGULATORY ASSETS AND NONCURRENT ASSETS				1,386,403		1,527,205
TOTAL			$	14,515,765	$	14,547,941

The accompanying notes are an integral part of these financial statements.

14

Consolidated Edison Company of New York, Inc.


CONSOLIDATED BALANCE SHEET

(Unaudited)

				As at
				March 31, 2001			December 31, 2000
				(Thousands of Dollars)
CAPITALIZATION AND LIABILITIES
CAPITALIZATION
	Common stock			$	1,482,341		$	1,482,341
	Repurchased Consolidated Edison, Inc. common stock				(962,092	)		(962,092	)
	Retained earnings				4,051,034			3,995,825
	Capital stock expense				(35,749	)		(35,817	)
	Accumulated other comprehensive income				(3,085	)		(673	)
	TOTAL COMMON SHAREHOLDER'S EQUITY				4,532,449			4,479,584
	Preferred stock
		Subject to mandatory redemption
		6-1/8% Series J			37,050			37,050
	TOTAL SUBJECT TO MANDATORY REDEMPTION				37,050			37,050
	Other preferred stock
		$5 Cumulative Preferred			175,000			175,000
		4.65% Series C			15,330			15,330
		4.65% Series D			22,233			22,233
	TOTAL OTHER PREFERRED STOCK				212,563			212,563
	TOTAL PREFERRED STOCK				249,613			249,613
	Long-term debt				4,615,666			4,915,108
TOTAL CAPITALIZATION					9,397,728			9,644,305
NONCURRENT LIABILITIES
	Obligations under capital leases				30,672			31,432
	Accumulated provision for injuries and damages				155,657			148,047
	Pension and benefits reserve				116,834			105,124
	Other noncurrent liabilities				14,822			14,822
TOTAL NONCURRENT LIABILITIES					317,985			299,425
CURRENT LIABILITIES
	Long-term debt due within one year				450,000			300,000
	Notes payable				337,944			139,969
	Accounts payable				633,830			879,602
	Customer deposits				197,618			195,762
	Accrued taxes				81,824			49,509
	Accrued interest				80,564			78,230
	Accrued wages				82,436			70,951
	Other current liabilities				246,939			237,634
TOTAL CURRENT LIABILITIES					2,111,155			1,951,657
DEFERRED CREDITS AND REGULATORY LIABILITIES
	Accumulated deferred federal income tax				2,153,639			2,134,973
	Accumulated deferred investment tax credits				120,949			124,532
	Regulatory liabilities
			Gain on divestiture		88,321			50,000
			NY state tax law revisions		56,671			59,523
			Deposit from sale of First Avenue properties		50,000			50,000
			Accrued electric rate reduction		38,018			38,018
			NYPA revenue increase		37,368			35,021
			Other		143,931			160,487
	TOTAL REGULATORY LIABILITIES				414,309			393,049
TOTAL DEFERRED CREDITS AND REGULATORY LIABILITIES					2,688,897			2,652,554
TOTAL				$	14,515,765		$	14,547,941

The accompanying notes are an integral part of these financial statements.

15

Consolidated Edison Company of New York, Inc.


CONSOLIDATED INCOME STATEMENT

For the Three Months Ended March 31, 2001 and 2000 (Unaudited)				2001			2000
				(Thousands of Dollars)
OPERATING REVENUES
	Electric			$	1,583,199		$	1,423,160
	Gas				597,441			393,643
	Steam				258,252			170,258
TOTAL OPERATING REVENUES					2,438,892			1,987,061
OPERATING EXPENSES
	Purchased power				781,987			618,243
	Fuel				170,316			85,198
	Gas purchased for resale				365,027			159,552
	Other operations				215,297			257,099
	Maintenance				121,214			100,684
	Depreciation and amortization				120,001			131,540
	Taxes, other than income tax				288,195			270,303
	Income tax				109,234			95,957
TOTAL OPERATING EXPENSES					2,171,271			1,718,576
OPERATING INCOME					267,621			268,485
OTHER INCOME (DEDUCTIONS)
	Investment income				155			732
	Allowance for equity funds used during construction				243			(626	)
	Other income less miscellaneous deductions				(1,172	)		18
	Income tax				4,635			(390	)
TOTAL OTHER INCOME (DEDUCTIONS)					3,861			(266	)
INCOME BEFORE INTEREST CHARGES					271,482			268,219
	Interest on long-term debt				89,677			76,749
	Other interest				7,894			11,470
	Allowance for borrowed funds used during construction				(1,307	)		(1,680	)
NET INTEREST CHARGES					96,264			86,539
NET INCOME					175,218			181,680
PREFERRED STOCK DIVIDEND REQUIREMENTS					3,398			3,398
NET INCOME FOR COMMON STOCK				$	171,820		$	178,282
CON EDISON OF NEW YORK SALES
	Electric (thousands of kilowatthours)
		Con Edison of New York customers			7,747,989			7,616,450
		Delivery service for Retail Choice			2,439,562			2,254,849
		Delivery service to NYPA and others			2,557,351			2,474,889
	Total sales in service territory				12,744,902			12,346,188
		Off-system and ESCO sales			392,908			1,566,554
	Gas (dekatherms)
		Firm sales and transportation			45,456,863			41,698,003
		Off-peak firm/interruptible			5,827,063			4,855,049
	Total sales to Con Edison of New York customers				51,283,926			46,553,052
		Transportation of customer-owned gas
			NYPA		29,969			3,224,517
			Other		6,609,906			20,321,571
		Off-system sales			1,644,926			8,898,564
	Total sales and transportation				59,568,727			78,997,704
	Steam (thousands of pounds)				10,482,696			10,225,610

The accompanying notes are an integral part of these financial statements.

16

Consolidated Edison Company of New York, Inc.


CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME

For the Three Months Ended March 31, 2001 and 2000 (Unaudited)		2001			2000
		(Thousands of Dollars)
NET INCOME		$	171,820		$	178,282
OTHER COMPREHENSIVE INCOME (LOSS), NET OF TAXES
	Minimum pension liability adjustments, net of $1,299 taxes		(2,412	)		-
TOTAL OTHER COMPREHENSIVE INCOME (LOSS), NET OF TAXES			(2,412	)		-
COMPREHENSIVE INCOME		$	169,408		$	178,282

The accompanying notes are an integral part of these financial statements.

17

Consolidated Edison Company of New York, Inc.


CONSOLIDATED STATEMENT OF CASH FLOWS

For the Three Months Ended March 31, 2001 and 2000 (Unaudited)				2001			2000
				(Thousands of Dollars)
OPERATING ACTIVITIES
	Net income			$	175,218		$	181,680
	PRINCIPAL NON-CASH CHARGES (CREDITS) TO INCOME
		Depreciation and amortization			120,001			131,540
		Income tax deferred (excluding taxes resulting from divestiture of plant)			(2,923	)		70,582
		Common equity component of allowance for funds used during construction			243			(626	)
		Prepayments - accrued pension credits			(80,635	)		(51,021	)
		Other non-cash charges			11,055			3,520
	CHANGES IN ASSETS AND LIABILITIES
		Accounts receivable - customer, less allowance for uncollectibles			(33,779	)		(47,804	)
		Materials and supplies, including fuel and gas in storage			34,998			11,405
		Prepayments (other than pensions), other receivables and other current assets			(29,785	)		(106,860	)
		Deferred recoverable energy costs			149,537			(27,947	)
		Cost of removal less salvage			(21,242	)		(18,800	)
		Accounts payable			(245,772	)		858
		Other-net			64,827			2,874
NET CASH FLOWS FROM OPERATING ACTIVITIES					141,743			149,401
INVESTING ACTIVITIES INCLUDING CONSTRUCTION
		Construction expenditures			(194,525	)		(169,386	)
		Nuclear fuel expenditures			(4,069	)		(21,124	)
		Contributions to nuclear decommissioning trust			(5,325	)		(5,325	)
		Divestiture of utility plant (net of federal income tax)			100,041			-
		Common equity component of allowance for funds used during construction			(243	)		626
NET CASH FLOWS USED IN INVESTING ACTIVITIES INCLUDING CONSTRUCTION					(104,121	)		(195,209	)
FINANCING ACTIVITIES INCLUDING DIVIDENDS
		Repurchase of common stock			-			(29,447	)
		Net proceeds from short-term debt			197,975			(14,743	)
		Retirement of long-term debt			(150,000	)		(125,000	)
		Issuance and refunding costs			(76	)		(49	)
		Common stock dividends			(116,616	)		(115,708	)
		Preferred stock dividends			(3,398	)		(3,398	)
NET CASH FLOWS USED IN FINANCING ACTIVITIES INCLUDING DIVIDENDS					(72,115	)		(288,345	)
NET DECREASE IN CASH AND TEMPORARY CASH INVESTMENTS					(34,493	)		(334,153	)
CASH AND TEMPORARY CASH INVESTMENTS AT JANUARY 1					70,273			349,033
CASH AND TEMPORARY CASH INVESTMENTS AT MARCH 31				$	35,780		$	14,880
SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION
		Cash paid during the period for:
			Interest	$	79,745		$	83,651
			Income taxes		34,701			-

The accompanying notes are an integral part of these financial statements.

18

NOTES TO FINANCIAL STATEMENTS - CON EDISON OF NEW YORK

Note A - General

These footnotes accompany and form an integral part of the interim consolidated financial statements of Consolidated Edison Company of New York, Inc. (Con Edison of New York) and its subsidiaries. Consolidated Edison, Inc. (Con Edison) owns all of the outstanding common stock of Con Edison of New York. These financial statements are unaudited but, in the opinion of Con Edison of New York's management, reflect all adjustments (which include only normally recurring adjustments) necessary for a fair statement of the results for the interim periods presented. These financial statements should be read together with the audited Con Edison of New York financial statements (including the notes thereto) included in the combined Con Edison, Con Edison of New York and Orange and Rockland Utilities, Inc. Annual Reports on Form 10-K for the year ended December 31, 2000 (the Form 10-K).

Note B - Environmental Matters

Hazardous substances, such as asbestos, polychlorinated biphenyls (PCBs) and coal tar, have been used or generated in the course of operations of Con Edison of New York and may be present in its facilities and equipment.

The Federal Comprehensive Environmental Response, Compensation and Liability Act of 1980 (Superfund) and similar state statutes impose joint and several strict liability, regardless of fault, upon generators of hazardous substances for resulting removal and remedial costs and environmental damages. Liabilities under these laws can be material and in some instances may be imposed without regard to fault, or may be imposed for past acts, even though such past acts may have been lawful at the time they occurred.

At March 31, 2001, Con Edison of New York had accrued $89.6 million as its best estimate of its liability for sites as to which it has received process or notice alleging that hazardous substances generated by the company and, in most instances, other potentially responsible parties) were deposited. There will be additional liability at these sites and other sites, the amount of which is not presently determinable but may be material to the company's financial position, results of operations or liquidity.

Under Con Edison of New York's current electric, gas and steam rate agreements, site investigation and remediation costs in excess of $5 million annually incurred with respect to hazardous waste for which it is responsible are to be deferred and subsequently reflected in rates. At March 31, 2001, $20.5 million of such costs had been deferred as regulatory assets.

Suits have been brought in New York State and federal courts against Con Edison of New York and many other defendants, wherein a large number of plaintiffs sought large amounts of compensatory and punitive damages for deaths and injuries allegedly caused by exposure to asbestos at various premises of the company. Many of these suits have been disposed of without any payment by the company, or for immaterial amounts. The amounts specified in all the remaining suits total billions of dollars but the company believes that these amounts are greatly exaggerated, as were the claims already disposed of.

19

Based on the information and relevant circumstances known to the company at this time, it does not believe that these suits will have a material adverse effect on its financial position, results of operations or liquidity.

Note C - Nuclear Generation

The Indian Point 2 nuclear generating unit, which Con Edison of New York owns and has agreed to sell, was out of service from February 2000 to January 2001. The New York State Public Service Commission (PSC) is investigating the Indian Point 2 outage and its causes and the prudence of the company's actions regarding the operation and maintenance of Indian Point 2. An appeal is pending in the United States Court of Appeals for the Second Circuit of the October 2000 decision by the United States District Court for the Northern District of New York, in an action entitled Consolidated Edison Company of New York, Inc. v. Pataki, et al., in which the court determined that the law that directed the PSC to prohibit the company from recovering Indian Point 2 replacement power costs from customers was unconstitutional and granted the company's motion for a permanent injunction to prevent its implementation. The staff of the Nuclear Regulatory Commission is monitoring Indian Point 2 with heightened oversight. The company is unable to predict whether or not any Indian Point 2-related proceedings, lawsuits, legislation or other actions will have a material adverse effect on its financial position, results of operations or liquidity. For additional information about Indian Point 2, its pending sale and the outage, see Note G to Con Edison's financial statements included in Item 8 of the Form 10-K.

Note D - Derivative Instruments and Hedging Activities

As of January 2001, Con Edison of New York adopted Statement of Financial Accounting Standards No. 133, "Accounting for Derivative Instruments and Hedging Activities," as amended by SFAS No. 137, "Deferral of the Effective Date of FASB Statement No. 133," and SFAS No. 138, "Accounting for Certain Derivative Instruments and Certain Hedging Activities — an amendment of FASB Statement No. 133" (SFAS No. 133).

Con Edison of New York does not enter into derivative transactions that will not qualify for deferred accounting treatment. At March 31, 2001, deferred gains or losses were not material.

Con Edison of New York uses derivative instruments to hedge purchases or sales of electricity and gas against adverse market price fluctuations.

Pursuant to Statement of Financial Accounting Standards No. 71, "Accounting for the Effects of Certain Types of Regulation" (SFAS No. 71), the company defers recognition in income of hedging gains and losses until the electricity or gas is purchased or sold. Pursuant to rate provisions that permit the recovery of the cost of purchased power and gas, the company credits or charges its customers hedging gains or losses and related transaction costs. See "Recoverable Energy Costs" in Note A to the company's financial statements included in Item 8 of the Form 10-K. Where SFAS No. 71 does not allow deferred recognition in income, the company has elected special hedge accounting pursuant to SFAS No. 133 to defer recognition of unrealized hedging gains and losses. Upon adoption of SFAS No. 133, the company had no transition adjustments to recognize in other comprehensive income. At March 31, 2001, the company had $1.4 million of net hedging losses deferred as regulatory assets.

20

Note E - Financial Information by Business Segment

Consolidated Edison Company of New York, Inc.

SEGMENT FINANCIAL INFORMATION
$000's

For the Three Months Ended March 31, 2001 and 2000 (Unaudited)	Electric				Gas
	2001		2000		2001		2000
Operating revenues	$	1,583,199	$	1,423,160	$	597,441	$	393,643
Intersegment revenues		2,663		3,185		719		703
Depreciation and amortization		99,915		112,217		15,681		14,731
Operating income		140,243		146,737		87,498		91,323

	Steam				Total
	2001		2000		2001		2000
Operating revenues	$	258,252	$	170,258	$	2,438,892	$	1,987,061
Intersegment revenues		467		417		3,849		4,305
Depreciation and amortization		4,405		4,592		120,001		131,540
Operating income		39,880		30,425		267,621		268,485

21

Orange and Rockland Utilities, Inc.


CONSOLIDATED BALANCE SHEET

(Unaudited)

			As At
			March 31, 2001		December 31, 2000
			(Thousands of Dollars)
ASSETS
UTILITY PLANT, AT ORIGINAL COST
	Electric		$	675,226	$	672,338
	Gas			282,663		279,661
	Common			109,657		106,348
	TOTAL			1,067,546		1,058,347
	Less: Accumulated depreciation			374,018		366,432
	NET			693,528		691,915
	Construction work in progress			26,362		28,091
NET UTILITY PLANT				719,890		720,006
CURRENT ASSETS:
	Cash and cash equivalents			3,740		8,483
	Customer accounts receivable, less allowance for uncollectable accounts of $2,950 and $3,845			98,133		82,183
	Other accounts receivable, less allowance for uncollectable accounts of $963 and $818			7,845		7,551
	Accrued utility revenue			22,602		29,025
	Gas in storage, at average cost			9,680		16,567
	Materials and supplies, at average cost			4,999		4,815
	Prepayments			22,949		23,854
	Other current assets			18,929		20,735
TOTAL CURRENT ASSETS				188,877		193,213
INVESTMENTS
	Non-utility property - net of accumulated depreciation and amortization			3,251		3,249
	Other			6		6
TOTAL INVESTMENTS				3,257		3,255
DEFERRED CHARGES, REGULATORY ASSETS AND NONCURRENT ASSETS
	Regulatory assets
		Deferred pension and other postretirement benefits		41,344		41,890
		Recoverable fuel costs		59,940		66,207
		Deferred environmental remediation costs		34,128		34,056
		Future federal income tax		33,833		33,659
		Other regulatory assets		26,297		26,761
		Deferred revenue taxes		8,895		7,337
	TOTAL REGULATORY ASSETS			204,437		209,910
	Other deferred charges and noncurrent assets			11,699		12,273
TOTAL DEFERRED CHARGES, REGULATORY ASSET AND NONCURRENT ASSETS				216,136		222,183
TOTAL			$	1,128,160	$	1,138,657

The accompanying notes are an integral part of these financial statements.

22

Orange And Rockland Utilities, Inc.


CONSOLIDATED BALANCE SHEET

(Unaudited)

			As At
			March 31, 2001			December 31, 2000
			(Thousands of Dollars)
CAPITALIZATION AND LIABILITIES
CAPITALIZATION:
	Common stock		$	5		$	5
	Additional paid in capital			194,499			194,498
	Retained earnings			145,785			139,610
	Accumulated comprehensive income			(10,114	)		(1,473	)
	TOTAL COMMON SHAREHOLDERS' EQUITY			330,175			332,640
	Long term debt			350,199			335,656
TOTAL CAPITALIZATION				680,374			668,296
NON-CURRENT LIABILITIES:
	Pension and benefit reserve			80,439			76,222
	Other noncurrent liabilities			25,542			26,974
TOTAL NON-CURRENT LIABILITIES				105,981			103,196
CURRENT LIABILITIES:
	Notes payable			30,750			40,820
	Accounts payable			42,907			58,664
	Accounts payable to affiliated companies			16,286			9,169
	Accrued federal income and other taxes			10,761			4,863
	Customer deposits			7,092			7,126
	Accrued interest			7,997			7,087
	Accrued environmental costs			32,944			32,852
	Other current liabilities			25,415			27,756
TOTAL CURRENT LIABILITIES				174,152			188,337
DEFERRED CREDITS AND REGULATORY LIABILITIES
	Accumulated deferred federal income tax			113,602			120,497
	Deferred investment tax credits			6,842			6,897
	Regulatory liabilities
		Pension and other benefits		12,899			15,587
		Gas recoveries and pipeline refunds		12,138			15,076
		Industry restructuring collections		15,108			14,198
		Other current liabilities		6,712			6,358
	TOTAL REGULATORY LIABILITIES			46,857			51,219
	Other deferred credits			352			215
TOTAL DEFERRED CREDITS AND REGULATORY LIABILITIES				167,653			178,828
TOTAL			$	1,128,160		$	1,138,657

The accompanying notes are an integral part of these financial statements.

23

Orange and Rockland Utilities, Inc.


CONSOLIDATED INCOME STATEMENT

For the Three Months Ended March 31, 2001 and 2000 (Unaudited)			2001			2000
			(Thousands of Dollars)
OPERATING REVENUES
	Electric		$	125,036		$	104,643
	Gas			104,378			77,458
	Non-utility			34			95
TOTAL OPERATING REVENUES				229,448			182,196
OPERATING EXPENSES
	Purchased power			69,662			54,557
	Fuel			-			39
	Gas purchased for resale			73,619			48,326
	Other operations			27,803			28,911
	Maintenance			7,233			6,149
	Depreciation and amortization			8,165			7,116
	Taxes, other than income tax			14,923			16,116
	Income tax			8,889			5,212
TOTAL OPERATING EXPENSES				210,294			166,426
OPERATING INCOME				19,154			15,770
OTHER INCOME (DEDUCTIONS)
	Investment income			934			3,105
	Allowance for equity funds used during construction			-			50
	Other income and deductions			(322	)		(348	)
	Income tax			(175	)		(875	)
TOTAL OTHER INCOME (DEDUCTIONS)				437			1,932
INCOME BEFORE INTEREST CHARGES				19,591			17,702
	Interest on long-term debt			5,493			6,563
	Other interest			1,154			504
	Allowance for borrowed funds used during construction			(231	)		(75	)
TOTAL INTEREST CHARGES				6,416			6,992
NET INCOME FOR COMMON STOCK				13,175			10,710
ORANGE AND ROCKLAND SALES & DELIVERIES
	Electric - (thousands of killowatthours)
		Orange And Rockland customers		1,093,054			1,022,124
		Delivery service for Retail Choice		136,548			171,917
	Total sales in service territory			1,229,602			1,194,041
		Off-system sales		45			-
	Gas - (dekatherms)
		Firm sales and transportation		9,851,039			10,137,658
		Off-peak firm/interruptible		2,218,347			2,176,324
	Total sales to Orange And Rockland customers			12,069,386			12,313,982
		Transportation of Customer Owned Gas		1,010,554			2,800,259
		Off-system sales		847,693			2,320,107
	Total sales and transportation			13,927,663			17,434,348

The accompanying notes are an integral part of these financial statements.

24

Orange and Rockland Utilities, Inc.


CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME

For the Three Months Ended March 31, 2001 and 2000		2001			2000
(Unaudited)		(Thousands of Dollars)
NET INCOME		$	13,175		$	10,170
OTHER COMPREHENSIVE INCOME (LOSS)
	Investment in Marketable Equity Securities, net of $295 taxes		(212	)		-
	Minimum pension liability adjustments, net of $63 taxes		63			-
	Unrealized gains (losses) on derivatives qualified as hedges due to cumulative effect of a change in accounting principle, net of $5,751 taxes		(8,107	)		-
	Unrealized gains (losses) on derivatives qualified as hedges, net of $272 taxes		(384	)		-
TOTAL OTHER COMPREHENSIVE INCOME (LOSS), NET OF TAXES			(8,640	)		-
COMPREHENSIVE INCOME		$	4,535		$	10,170

The accompanying notes are an integral part of these financial statements.

25

Orange and Rockland Utilities, Inc.


CONSOLIDATED STATEMENT OF CASH FLOWS

For the Three Months Ended March 31, 2001 and 2000 (Unaudited)			2001			2000
			(Thousands of Dollars)
OPERATING ACTIVITIES
	Net income		$	13,175		$	10,710
	PRINCIPAL NON-CASH CHARGES (CREDITS) TO INCOME
		Depreciation and amortization		8,165			7,116
		Amortization of investment tax credit		(56	)		(114	)
		Federal and state income tax deferred		(689	)		(11,186	)
		Common equity component of allowance for funds used during construction		-			(50	)
		Other non-cash changes		(787	)		(1,914	)
	CHANGES IN ASSETS AND LIABILITIES
		Accounts receivable - net, and accrued utility revenue		(9,528	)		(5,235	)
		Materials and supplies, including fuel and gas in storage		6,704			9,913
		Prepayments, other receivables and other current assets		2,417			11,203
		Deferred recoverable fuel costs		4,494			20,822
		Accounts payable		(8,641	)		(8,640	)
		Refunds to customers		(1,693	)		118
		Other - net		7,337			(5,077	)
NET CASH FLOWS FROM OPERATING ACTIVITIES				20,898			27,666
INVESTING ACTIVITIES INCLUDING CONSTRUCTION
	Construction expenditures			(8,571	)		(10,840	)
	Common equity component of allowance for funds used during construction			-			50
NET CASH FLOWS USED IN INVESTING ACTIVITIES INCLUDING CONSTRUCTION				(8,571	)		(10,790	)
FINANCING ACTIVITIES
	Retirement of long-term debt			-			(100,020	)
	Short-term debt arrangements			(10,070	)		29,500
	Dividend to parent			(7,000	)		-
NET CASH FLOWS FROM FINANCING ACTIVITIES INCLUDING DIVIDENDS				(17,070	)		(70,520	)
NET DECREASE IN CASH AND TEMPORARY CASH INVESTMENTS				(4,743	)		(53,644	)
CASH AND TEMPORARY CASH INVESTMENTS AT JANUARY 1				8,483			78,927
CASH AND TEMPORARY CASH INVESTMENTS AT MARCH 31			$	3,740		$	25,283
SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION
	Cash paid during the period for:
		Interest	$	1,539		$	9,911
		Income Taxes	$	-		$	4,487

The accompanying notes are an integral part of these financial statements.

26

NOTES TO FINANCIAL STATEMENTS - O&R

Note A - General

These footnotes accompany and form an integral part of the interim consolidated financial statements of Orange and Rockland Utilities, Inc. (O&R), a wholly-owned subsidiary of Consolidated Edison, Inc. (Con Edison). These financial statements are unaudited but, in the opinion of O&R's management, reflect all adjustments (which include only normally recurring adjustments) necessary for a fair statement of the results for the interim periods presented. These financial statements should be read together with the audited O&R financial statements (including the notes thereto) included in the combined Con Edison, Consolidated Edison Company of New York, Inc. and O&R Annual Reports on Form 10-K for the year ended December 31, 2000.

Note B - Environmental Matters

Hazardous substances, such as asbestos, polychlorinated biphenyls (PCBs) and coal tar, have been used or generated in the course of operations of O&R and may be present in its facilities and equipment.

The Federal Comprehensive Environmental Response, Compensation and Liability Act of 1980 (Superfund) and similar state statutes impose joint and several strict liability, regardless of fault, upon generators of hazardous substances for resulting removal and remedial costs and environmental damages. Liabilities under these laws can be material and in some instances may be imposed without regard to fault, or may be imposed for past acts, even though such past acts may have been lawful at the time they occurred.

At March 31, 2001, O&R had accrued $31.7 million as its best estimate of its liability for sites as to which it has received process or notice alleging that hazardous substances generated by the company (and, in most instances, other potentially responsible parties) were deposited. There will be additional liability at these sites and other sites, including the costs of investigating and remediating sites where the company or its predecessors manufactured gas. The total amount of liability is not presently determinable but may be material to the company's financial position, results of operations or liquidity.

Under O&R's current gas rate agreement, O&R may defer for subsequent recovery through rates the cost of investigating and remediating manufactured gas sites. At March 31, 2001, $34.1 million of such costs had been deferred as a regulatory asset.

Suits have been brought in New York State and federal courts against O&R and many other defendants, wherein a large number of plaintiffs sought large amounts of compensatory and punitive damages for deaths and injuries allegedly caused by exposure to asbestos at various premises of the company. Many of these suits have been disposed of without any payment by O&R, or for immaterial amounts. The amounts specified in all the remaining suits totals billions of dollars but the company believes that these amounts are greatly exaggerated, as were the claims already disposed of. Based on the information and relevant circumstances known to the company at this time, it does not believe that these suits will have a material adverse effect on its financial position, results of operation or liquidity.

27

In May 2000, the New York State Department of Environmental Conservation (DEC) issued notices of violation to O&R and four other companies that have operated coal-fired electric generating facilities in New York State. The notices allege violations of the federal Clean Air Act and the New York State Environmental Conservation law resulting from the alleged failure of the companies to obtain DEC permits for physical modifications to their generating facilities and to install pollution control equipment that would have reduced harmful emissions. The notice of violation received by O&R relates to the Lovett Generating Station that it sold in June 1999. O&R is unable to predict whether or not the alleged violations will have a material adverse effect on its financial position, results of operations or liquidity.

Note C - Related Party Transactions

Each month O&R is invoiced by Con Edison and its affiliates for the cost of any services they render to O&R. These services, provided primarily by Con Edison of New York, include substantially all administrative support operations such as corporate directorship and associated ministerial duties, accounting, treasury, investor relations, information resources, legal, human resources, fuel supply and energy management services. The cost of these services totaled $3.3 million during the first three months of 2001. In addition, O&R purchased $71.7 million of gas from Con Edison of New York during this period.

O&R provides certain recurring services to Con Edison of New York on a monthly basis, including cash receipts processing and certain other services. The cost of these services totaled $3.0 million during the first three months of 2001.

Note D - Derivative Instruments and Hedging Activities

As of January 2001, O&R adopted Statement of Financial Accounting Standards No. 133, "Accounting for Derivative Instruments and Hedging Activities," as amended by SFAS No. 137, "Deferral of the Effective Date of FASB Statement No. 133," and SFAS No. 138, "Accounting for Certain Derivative Instruments and Certain Hedging Activities — an amendment of FASB Statement No. 133" (SFAS No. 133).

In connection with its $55 million promissory note issued to the New York State Energy Research and Development Authority for the net proceeds of the Authority's variable rate Pollution Control Refunding Revenue Bonds (O&R Projects), 1994 Series A (the 1994 Bonds), O&R has a swap agreement pursuant to which it pays interest at a fixed rate of 6.09 percent and is paid interest at the same variable rate as is paid on the 1994 Bonds. Upon adoption of SFAS No. 133, O&R recognized transition adjustments of $13.9 million in other comprehensive income. In the quarter ended March 31, 2001, the company did not reclassify any comprehensive income to income. If the swap agreement had been terminated on March 31, 2001, O&R would have been required to pay approximately $14.5 million. Pursuant to SFAS No. 133, the swap agreement is accounted for as a cash flow hedge and changes in its fair value are recorded in other comprehensive income. The fair value of the swap agreement is calculated based upon current market conditions.

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Note E - Financial Information by Business Segment

ORANGE AND ROCKLAND UTILITIES, INC.

SEGMENT FINANCIAL INFORMATION

$000's

For The Three Months Ended March 31, 2001 and 2000	Electric				Gas
	2001		2000		2001		2000
Sales Revenues	$	125,031	$	104,639	$	104,378	$	77,458
Intersegment Revenues		5		4		-		-
Depreciation and amortization		6,104		4,962		2,060		2,153
Operating Income		8,882		6,701		10,432		9,291

	Other						Total
	2001			2000			2001		2000
Sales Revenues	$	34		$	95		$	229,443	$	182,192
Intersegment Revenues		-			-			5		4
Depreciation and amortization		1			1			8,165		7,116
Operating Income		(160	)		(222	)		19,154		15,770

29

ITEM 2.  MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

CON EDISON

Consolidated Edison, Inc. (Con Edison) is a holding company that operates only through its subsidiaries and has no material assets other than the stock of its subsidiaries. Con Edison's principal subsidiaries are regulated utilities: Consolidated Edison Company of New York, Inc. (Con Edison of New York) and Orange and Rockland Utilities, Inc. (O&R). Con Edison also has several unregulated subsidiaries.

The following discussion and analysis, which relates to the interim consolidated financial statements of Con Edison and its subsidiaries (including Con Edison of New York and O&R) included in Part I, Item 1 of this report, should be read in conjunction with Con Edison's Management's Discussion and Analysis of Financial Condition and Results of Operations (Con Edison's Form 10-K MD&A) in Item 7 of the combined Con Edison, Con Edison of New York and O&R Annual Reports on Form 10-K for the year ended December 31, 2000 (File Nos. 1-14514, 1-1217 and 1-4315, the Form 10-K). Reference is also made to the notes to the Con Edison financial statements in Part I, Item 1 of this report, which notes are incorporated herein by reference.

Liquidity and Capital Resources

Cash and temporary cash investments and outstanding notes payable (principally commercial paper) at March 31, 2001 and December 31, 2000 were (amounts shown in millions):

	March 31, 2001		December 31, 2000
Cash and temporary cash investments	$	59.6	$	94.8
Notes payable	$	438.1	$	255.0

The decrease in cash and temporary cash investments at March 31, 2001 compared with December 31, 2000 reflects net cash flows from operating activities and net cash flows used in investing and financing activities.

Cash Flows from Operating Activities

Net cash flows from operating activities during the first quarter of 2001 decreased $33.4 million compared with the first quarter of 2000, reflecting principally lower net income (including increased non-cash pension credits), decreased accounts payable and increased accounts receivable, offset in part by decreased deferred recoverable energy costs.

Accounts receivable - customer, less allowance for uncollectible accounts increased $16.2 million at March 31, 2001 compared with year-end 2000 due primarily to increased customer billings by Con Edison's utility subsidiaries, reflecting higher energy sales and energy costs, and the timing of customer payments. Con Edison of New York's equivalent number of days of revenue outstanding (ENDRO) of customer accounts receivable was 30.2 days at March 31, 2001 compared with 29.7 days at December 31, 2000. For O&R, the ENDRO was 43.6 days at March 31, 2001 and 35.4 days at December 31, 2000. The changes in ENDRO reflect increased use by customers of level billing and alternative payment arrangements and the timing of customer payments.

30

Prepayments include cumulative credits to pension expense for Con Edison of New York amounting to $447.4 million at March 31, 2001 compared with $366.7 million at December 31, 2000. Pension credits, which result primarily from favorable performance by the company's pension fund in past years, increase net income but do not provide cash for the company's operations. See Note D to the Con Edison financial statements included in Item 8 of the Form 10-K.

Prepayments at March 31, 2001 also include prepaid property tax for Con Edison of New York of $137.2 million compared with $11.6 million at December 31, 2000. Property taxes are generally prepaid on January 1 and July 1 of each year.

Deferred recoverable energy costs decreased $155.8 million at March 31, 2001 compared with year-end 2000, due primarily to the ongoing recovery of previously deferred amounts, offset in part by the deferral for future recovery of additional purchased power and gas costs. See "Recoverable Energy Costs" in Note A to the Con Edison financial statements included in Item 8 of the Form 10-K.

Unfunded pension and other post-employment benefit (OPEB) obligations (shown as pension and benefit reserve on the balance sheet) increased $15.9 million at March 31, 2001 compared with year-end 2000. Con Edison of New York's policy is to fund its pension and OPEB costs to the extent deductible under current tax regulations. O&R's policy is to fund its pension and OPEB costs to the extent of its rate recovery. The reserve also includes a minimum liability for supplemental executive retirement programs, a portion of which liability has been included in other comprehensive income. See Note E to the Con Edison financial statements included in Item 8 of the Form 10-K.

The accumulated provision for injuries and damages increased $7.9 million at March 31, 2001 compared with year-end 2000, due primarily to increased workers' compensation claims.

Accounts payable decreased $263.5 million at March 31, 2001 compared with year-end 2000, due primarily to lower energy purchases in March 2001 as compared to December 2000.

Accrued taxes increased $26.8 million at March 31, 2001 compared with year-end 2000, due principally to timing differences and the gain on the sale of Con Edison of New York's interest in the Roseton generating station. See Note I to the Con Edison financial statements in Item 8 of the Form 10-K.

Other regulatory liabilities decreased $20.7 million at March 31, 2001 compared with year-end 2000, reflecting an $18 million refund to gas customers of previously deferred credits pursuant to the Con Edison of New York gas rate agreement approved by the PSC in November 2000. See "Rate and Restructuring Agreements" in Note A to the Con Edison financial statements in Item 8 of the Form 10-K.

Cash Flows Used in Investing and Financing Activities

Cash flows used in investing activities during the first quarter of 2001 decreased $98.8 million compared with the first quarter of 2000, reflecting the completion of the sale of Con Edison of New York's 480 MW interest in the Roseton generating station (proceeds of $100.0 million, net of federal income tax) and decreased nuclear fuel expenditures ($17.1 million), offset in part by increased utility construction

31

expenditures ($22.9 million). Nuclear fuel expenditures decreased because refueling was conducted in the 2000 period but not in the 2001 period. Construction expenditures increased principally to meet load growth on Con Edison of New York's electric distribution system.

Cash flows used in financing activities during the first quarter of 2001 decreased $310.9 million compared with the first quarter of 2000, reflecting principally increased net proceeds from commercial paper ($168.2 million), the repurchase of common stock in the 2000 period ($68.5 million) and the retirement of long-term debt ($150 million in the 2001 period compared with $225 million in the 2000 period).

Capital Resources

Con Edison's ratio of earnings to fixed charges (for the 12 months ended on the date indicated) and common equity ratio (as of the date indicated) were:

	March 31, 2001	December 31, 2000
Earnings to fixed charges (SEC basis)	3.03	3.10
Common equity ratio*	50.6	49.1

* Common shareholders' equity as a percentage of total capitalization

Con Edison's ratio of earnings to fixed charges decreased for the 12-month period ending March 31, 2001 compared to the 12-month period ending December 31, 2000 as a result of decreased earnings and increased interest expense. Excluding the $130 million charge for replacement power costs incurred in connection with an outage at the Indian Point nuclear plant and the $33.6 million charge for merger-related expenses (see Notes G and P, respectively, to the Con Edison financial statements included in Item 8 of the Form 10-K), Con Edison's ratio of earnings to fixed charges would have been 3.39 and 3.47 for the 12-month periods ended March 31, 2001 and December 31, 2000, respectively. The change in the equity ratio reflects decreased long-term debt.

Financial Market Risks

Reference is made to "Financial Market Risks" in Con Edison's Form 10-K MD&A and to Note E to the Con Edison financial statements included in Part I, Item 1 of this report. At March 31, 2001 neither the fair value of derivatives outstanding nor potential derivative losses from reasonably possible near-term changes in market prices were material to the financial position, results of operations or liquidity of the company.

Environmental Matters

For information concerning potential liabilities of the company arising from laws and regulations protecting the environment, including the Federal Comprehensive Environmental Response, Compensation and Liability Act of 1980 (Superfund), see the notes to Con Edison's financial statements included in Part I, Item 1 of this report and also see Part II, Item 3 of this report.

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Results of Operations

First Quarter of 2001 Compared with First Quarter of 2000

Con Edison's net income for common stock for the first quarter of 2001 was $179.1 million or $.84 a share (based upon an average of 212.2 million common shares outstanding) compared with $188.1 million or $.88 a share (based upon an average of 212.6 million common shares outstanding) for the first quarter of 2000. The decrease in the company's net income reflects rate reductions and higher maintenance expenses, offset in part by higher sales volumes and decreased other operations expenses.

Earnings for the quarters ended March 31, 2001 and 2000 were as follows:

(Millions of dollars)		2001			2000
Con Edison of New York		$	171.8		$	178.3
O&R			13.2			10.7
Nonregulated subsidiaries			(0.3	)		2.3
Other*			(5.6	)		(3.2	)
	Con Edison	$	179.1		$	188.1

* Includes parent company expenses, goodwill amortization and inter-company eliminations.

A comparison of the results of operations of Con Edison for the first quarter of 2001 compared to the first quarter of 2000 follows.

Three Months Ended March 31, 2001 Compared With Three Months Ended March 31, 2000

(Millions of dollars)	Increases (Decreases) Amount			Increases (Decreases) Percent
Operating revenues	$	567.7		24.5	%
Purchased power - electric and steam		285.7		39.1
Fuel - electric and steam		85.1		99.8
Gas purchased for resale		197.2		74.0
Operating revenues less purchased power, fuel and gas purchased for resale (net revenues)		(0.3	)	-
Other operations and maintenance		(28.9	)	(6.9	)
Depreciation and amortization		(7.7	)	(5.4	)
Taxes, other than income tax		17.0		5.9
Income tax		15.5		15.3
Operating income		3.8		1.3
Other income less deductions and related federal income tax		1.8		77.4
Net interest charges		14.6		15.6
Net income for common stock	$	(9.0	)	(4.8	)%

A discussion of Con Edison's operating revenues and operating income by business segment follows. Con Edison's principal business segments are its electric, gas and steam utility businesses. For additional information about the segments, see the notes to the Con Edison financial statements included in Part I, Item 1 of this report.

Electric

Con Edison's electric operating revenues in the first quarter of 2001 increased $195.1 million compared with the first quarter of 2000, reflecting increased purchased power costs and electric sales, offset by the

33

effects of electric rate reductions of approximately $44.6 million. See "Recoverable Energy Costs" and "Rate and Restructuring Agreements" in Note A to the Con Edison financial statements included in Item 8 of the Form 10-K.

Electricity sales volumes for Con Edison's utility subsidiaries increased 3.2 percent in the first quarter of 2001 compared with the first quarter of 2000. Con Edison of New York and O&R electric sales volumes for these periods are shown at the bottom of their consolidated income statements included in Part I, Item 1 of this report. After adjusting for variations, principally weather and billing days, in each period, electricity sales volumes for Con Edison of New York and O&R increased 2.7 percent and 1.6 percent, respectively, in the 2001 period. Weather-adjusted sales represent an estimate of the sales that would have been made if historical average weather conditions had prevailed.

Purchased power costs increased $266.0 million in the first quarter of 2001 compared with the first quarter of 2000, due primarily to an increase in the price of purchased power, offset in part by decreased purchased volumes. Fuel costs increased $40.4 million as a result of an increase in the unit cost of fuel. In general, Con Edison's utility subsidiaries recover prudently incurred purchased power costs pursuant to rate provisions approved by the relevant state public utility commission. See "Recoverable Energy Costs" in Note A to the Con Edison financial statements included in Item 8 of the Form 10-K.

Con Edison's electric operating income decreased $4.3 million for the first quarter of 2001 compared with the first quarter of 2000. The principal components of this variation were a decrease in net revenues (operating revenues less fuel and purchased power) of $34.3 million, increased maintenance expenses ($18.9 million) and increased property taxes ($14.4 million), offset in part by reduced other operations expenses ($37.1 million) and lower Federal income tax ($12.5 million). Other operations and maintenance expenses in the 2001 period reflect increased transmission and distribution expenses resulting from the 2000-2001 winter weather conditions, relocation of company facilities to avoid interference with municipal infrastructure projects and preparations for summer 2001 ($18.7 million), increased pension credits ($24.8 million) and lower insurance premiums, net of policy distributions ($6.3 million).

Gas

Con Edison's gas operating revenues increased $232.3 million and gas operating income decreased $2.7 million in the first quarter of 2001 compared with the first quarter of 2000. The higher revenues reflect an increased cost of purchased gas, offset in part by a reduction in customer bills of $14.3 million, reflecting a refund of previously deferred credits, and other provisions of the Con Edison of New York gas rate agreement approved by the PSC in November 2000. See "Rate and Restructuring Agreements" and "Recoverable Energy Costs" in Note A to the Con Edison financial statements included in Item 8 of the Form 10-K. The decrease in operating income of $2.7 million reflects primarily increased transmission and distribution expenses ($1.0 million) and increased customer service expenses ($1.1 million).

Firm gas sales and transportation volumes for Con Edison's utility subsidiaries increased 6.5 percent in the first quarter of 2001 compared with the first quarter of 2000. Con Edison of New York and O&R gas sales and transportation volumes for these periods are shown at the bottom of their consolidated income statements included in Part I, Item 1 of this report. After adjusting for variations, principally weather and

34

billing days, in each period, firm gas sales and transportation volumes in the 2001 period increased 2.6 percent for Con Edison of New York and decreased 9.8 percent for O&R. Weather-adjusted sales represent an estimate of the sales that would have been made if historical average weather conditions had prevailed.

A weather-normalization provision that applies to the gas business of Con Edison's utility subsidiaries operating in New York moderates, but does not eliminate, the effect of weather-related changes on gas operating income.

Steam

Con Edison's steam operating revenues increased $88.0 million and steam operating income increased $9.5 million for the first quarter of 2001 compared with the first quarter of 2000, reflecting an October 2000 rate increase and increased sales volumes. The higher revenues also reflect increased fuel and purchased power costs. See "Rate and Restructuring Agreements" and "Recoverable Energy Costs" in Note A to the company's financial statements included in Item 8 of the Form 10-K.

Steam sales volume (see bottom of Con Edison of New York's consolidated income statement included in Part I, Item 1 of this report) increased 2.5 percent in the 2001 period compared with the 2000 period. After adjusting for variations, principally weather and billing days, in each period, steam sales volume decreased 1.0 percent.

Other Income

Income tax decreased $6.8 million in the 2001 period compared with the 2000 period, due primarily to the recognition of deferred federal income tax credits relating to the Roseton generating station sale. Investment income decreased $2.9 million, due principally to O&R's use of proceeds from their 1999 divestiture to retire long-term debt in March 2000.

Net Interest Charges

Net interest charges increased $14.6 million in the 2001 period compared with the 2000 period, reflecting $15.9 million of interest on increased long-term debt and a decrease of $0.8 million of interest related to short-term borrowings.

35

ITEM 2.  MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

CON EDISON OF NEW YORK

Consolidated Edison Company of New York, Inc. (Con Edison of New York) is a regulated utility that provides electric service to over three million customers and gas service to over one million customers in New York City and Westchester County. It also provides steam service in parts of Manhattan. All of the common stock of Con Edison of New York is owned by Consolidated Edison, Inc. (Con Edison).

This discussion and analysis should be read in conjunction with Con Edison of New York's Management's Discussion and Analysis of Financial Condition and Results of Operations (MD&A) in Item 7 of the combined Con Edison, Con Edison of New York and Orange and Rockland Utilities, Inc. (O&R) Annual Reports on Form 10-K for the year ended December 31, 2000 (File Nos. 1-14514, 1-1217 and 1-4315, the Form 10-K). Reference is also made to the notes to the financial statements in Part I, Item 1 of this report, which notes are incorporated herein by reference.

Liquidity and Capital Resources

Cash and temporary cash investments and outstanding commercial paper (shown as notes payable on the balance sheet) at March 31, 2001 and December 31, 2000 were (amounts shown in millions):

	March 31, 2001		December 31, 2000
Cash and temporary cash investments	$	35.8	$	70.3
Commercial paper	$	337.9	$	140.0

The decrease in cash and temporary cash investments at March 31, 2001 compared with December 31, 2000 reflects net cash flows from operating activities and net cash flows used in investing and financing activities.

Cash Flows from Operating Activities

Net cash flows from operating activities during the first quarter of 2001 decreased $7.7 million compared with the first quarter of 2000, reflecting principally lower net income (including increased non-cash pension credits), decreased accounts payable and increased accounts receivable, offset in part by decreased deferred recoverable energy costs.

Con Edison of New York's accounts receivable - customer, less allowance for uncollectible accounts increased $33.8 million at March 31, 2001 compared with year-end 2000 due primarily to increased customer billings, reflecting higher energy sales and energy costs, and the timing of customer payments. The company's equivalent number of days of revenue outstanding (ENDRO) of customer accounts receivable was 30.2 days at March 31, 2001 compared with 29.7 days at December 31, 2000. The changes in ENDRO reflect increased use by customers of level billing and alternative payment arrangements and the timing of customer payments.

Prepayments include cumulative credits to pension expense amounting to $447.4 million at March 31, 2001 compared with $366.7 million at December 31, 2000. Pension credits, which result primarily from

36

favorable performance by the company's pension fund in past years, increase net income but do not provide cash for the company's operations. See Note D to the Con Edison of New York financial statements included in Item 8 of the Form 10-K.

Prepayments at March 31, 2001 also include prepaid property taxes of $137.2 million compared with $11.6 million at December 31, 2000. Property taxes are generally prepaid on January 1 and July 1 of each year.

Deferred recoverable energy costs decreased $149.5 million at March 31, 2001 compared with year-end 2000, due primarily to the recovery of previously deferred amounts, offset in part by the deferral for future recovery of additional purchased power and gas costs. See "Recoverable Energy Costs" in Note A to the Con Edison of New York financial statements included in Item 8 of the Form 10-K.

Unfunded pension and other post-employment benefit (OPEB) obligations (shown as pension and benefit reserve on the balance sheet) increased $11.7 million at March 31, 2001 compared with year-end 2000. The company's policy is to fund its pension and OPEB costs to the extent deductible under current tax regulations. The reserve also includes a minimum liability for the company's supplemental executive retirement program, a portion of which liability has been included in other comprehensive income. See Note E to the Con Edison of New York financial statements included in Item 8 of the Form 10-K.

The accumulated provision for injuries and damages increased $7.6 million at March 31, 2001 compared with year-end 2000, due primarily to increased workers' compensation claims.

Accounts payable decreased $245.8 million at March 31, 2001 compared with year-end 2000, due primarily to lower energy purchases in March 2001 as compared to December 2000.

Accrued taxes increased $32.3 million at March 31, 2001 compared with year-end 2000, due principally to timing differences and the gain on the sale of the company's interest in the Roseton generating station. See Note I to the Con Edison of New York financial statements in Item 8 of the Form 10-K.

Other regulatory liabilities decreased $16.6 million at March 31, 2001 compared with year-end 2000, reflecting an $18 million refund to gas customers of previously deferred credits pursuant to the gas rate agreement approved by the PSC in November 2000. See "Rate and Restructuring Agreements" in Note A to the Con Edison of New York financial statements in Item 8 of the Form 10-K.

Cash Flows Used in Investing and Financing Activities

Cash flows used in investing activities during the first quarter of 2001 decreased $91.1 million compared with the first quarter of 2000, reflecting the completion of the sale of the company's 480 MW interest in the Roseton generating station (proceeds of $100.0 million, net of federal income tax) and decreased nuclear fuel expenditures ($17.1 million), offset in part by increased construction expenditures ($25.1 million). Nuclear fuel expenditures decreased because refueling was conducted in the 2000 period but not in the 2001 period. Construction expenditures increased principally to meet load growth on the company's electric distribution system.

Cash flows used in financing activities during the first quarter of 2001 decreased $216.2 million compared with the first quarter of 2000, reflecting principally increased net proceeds from commercial

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paper ($212.7 million), the repurchase of common stock in the 2000 period ($29.4 million) and the retirement of long-term debt ($150 million in the 2001 period compared with $125 million in the 2000 period).

Capital Resources

Con Edison of New York's ratio of earnings to fixed charges (for the 12 months ended on the date indicated) and common equity ratio (as of the date indicated) were:

	March 31, 2001	December 31, 2000
Earnings to fixed charges (SEC basis)	3.18	3.23
Common equity ratio*	48.2	46.4

* Common shareholder's equity as a percentage of total capitalization

Con Edison of New York's ratio of earnings to fixed charges decreased for the 12-month period ending March 31, 2001 compared to the 12-month period ending December 31, 2000 as a result of decreased earnings and increased interest expense. Excluding the $130 million charge for replacement power costs incurred in connection with an outage at the Indian Point nuclear plant (see Note G to the Con Edison of New York financial statements included in Item 8 of the Form 10-K), Con Edison of New York's ratio of earnings to fixed charges would have been 3.50 and 3.56 for the 12-month periods ended March 31, 2001 and December 31, 2000, respectively. The change in the equity ratio reflects decreased long-term debt.

Financial Market Risks

Reference is made to "Financial Market Risks" in Con Edison of New York's Form 10-K MD&A and to Note D to the Con Edison of New York financial statements included in Part I, Item 1 of this report. At March 31, 2001 neither the fair value of derivatives outstanding nor potential derivative losses from reasonably possible near-term changes in market prices were material to the financial position, results of operations or liquidity of the company.

Environmental Matters

For information concerning potential liabilities of Con Edison of New York arising from laws and regulations protecting the environment, including the Federal Comprehensive Environmental Response, Compensation and Liability Act of 1980 (Superfund), see the notes to the Con Edison of New York financial statements included in Part I, Item 1 of this report and also see Part II, Item 3 of this report.

Results of Operations

First Quarter of 2001 Compared with First Quarter of 2000

Con Edison of New York's net income for common stock for the first quarter of 2001 was $171.8 million compared with $178.3 million for the first quarter of 2000. The decrease in the company's net income reflects rate reductions and higher maintenance expenses, offset in part by higher sales volumes and decreased other operations expenses.

A comparison of the results of operations of Con Edison of New York for the first quarter of 2001 compared with the first quarter of 2000 follows.

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Three Months Ended March 31, 2001 Compared With Three Months Ended March 31, 2000

(Millions of dollars)	Increases (Decreases) Amount			Increases (Decreases) Percent
Operating revenues	$	451.8		22.7	%
Purchased power - electric and steam		163.7		26.5
Fuel - electric and steam		85.1		99.9
Gas purchased for resale		205.5		(A	)
Operating revenues less purchased power, fuel and gas purchased for resale (net revenues)		(2.5	)	(0.2	)
Other operations and maintenance		(21.3	)	(5.9	)
Depreciation and amortization		(11.5	)	(8.8	)
Taxes, other than income tax		17.9		6.6
Income tax		13.3		13.8
Operating income		(0.9	)	(0.3	)
Other income less deductions and related federal income tax		4.1		(A	)
Net interest charges		9.7		11.2
Net income for common stock	$	(6.5	)	(3.6	)%

(A)

Amounts in excess of 100 percent

A discussion of Con Edison of New York's operating revenues and operating income by business segment follows. Con Edison of New York's principal business segments are its electric, gas and steam utility businesses. For additional information about the segments, see the notes to the Con Edison of New York financial statements included in Part I, Item 1 of this report.

Electric

Con Edison of New York's electric operating revenues in the first quarter of 2001 increased $160.0 million compared with the first quarter of 2000. The increase reflects increased purchased power costs and electric sales, offset by the effects of electric rate reductions of approximately $43.9 million. See "Recoverable Energy Costs" and "Rate and Restructuring Agreements" in Note A to the Con Edison of New York financial statements included in Item 8 of the Form 10-K.

Con Edison of New York's electric sales, excluding off-system sales, for the first quarter of 2001 compared with the first quarter of 2000 were:

	Millions of kwhrs.
Description	Three Months Ended March 31, 2001	Three Months Ended March 31, 2000	Variation		Percent Variation
Residential/Religious	2,850	2,798	52		1.9	%
Commercial/Industrial	4,860	4,682	178		3.8
Other	38	136	(98	)	(72.1	)
TOTAL FULL SERVICE CUSTOMERS	7,748	7,616	132		1.7
Retail Choice Customers	2,348	2,255	93		4.1
SUB-TOTAL	10,096	9,871	225		2.3
NYPA, Municipal Agency and Other Sales	2,649	2,477	172		6.9
TOTAL SERVICE AREA	12,745	12,348	397		3.2	%

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Electricity sales volume in Con Edison of New York's service territory increased 3.2 percent in the first quarter of 2001 compared with the first quarter of 2000. The increase in sales volume reflects the continued strength of the New York City economy. After adjusting for variations, principally weather and billing days, in each period, electricity sales volume in the service territory increased 2.7 percent in the 2001 period. Weather-adjusted sales represent an estimate of the sales that would have been made if historical average weather conditions had prevailed.

Con Edison of New York's purchased power costs increased $144.0 million in the first quarter of 2001 compared with the first quarter of 2000, due primarily to an increase in the price of purchased power, offset in part by decreased purchased volumes. Fuel costs increased $40.4 million as a result of an increase in the unit cost of fuel. In general, Con Edison of New York recovers prudently incurred purchased power costs pursuant to rate provisions approved by the PSC. See "Recoverable Energy Costs" in Note A to the Con Edison of New York financial statements included in Item 8 of the Form 10-K.

Con Edison of New York's electric operating income decreased $6.5 million in the first quarter of 2001 compared with the first quarter of 2000. The principal components of the decrease were a reduction in net revenues (operating revenues less fuel and purchased power) of $24.3 million, increased maintenance expenses ($18.3 million) and increased property taxes ($14.3 million), offset in part by reduced other operations expenses ($36.8 million) and lower Federal income tax ($11.8 million). Other operations and maintenance expenses in the 2001 period reflect increased transmission and distribution expenses resulting from the 2000-2001 winter weather conditions, relocation of company facilities to avoid interference with municipal infrastructure projects and preparations for summer 2001 ($18.3 million), increased pension credits ($24.8 million) and lower insurance premiums, net of policy distributions ($6.3 million).

Gas

Con Edison of New York's gas operating revenues increased $203.8 million and gas operating income decreased $3.8 million in the first quarter of 2001 compared with the first quarter of 2000. The higher revenues reflect an increased cost of purchased gas, offset in part by a reduction in customer bills of $14.3 million, reflecting a refund of previously deferred credits, and other provisions of the gas rate agreement approved by the PSC in November 2000. See "Rate and Restructuring Agreements" and "Recoverable Energy Costs" in Note A to the Con Edison of New York financial statements included in Item 8 of the Form 10-K. The decrease in operating income of $3.8 million reflects primarily increased transmission and distribution expenses ($0.9 million) and increased customer service expenses ($1.1 million).

Con Edison of New York's gas sales and transportation volumes for firm customers (see bottom of the company's consolidated income statement included in Part I, Item 1 of this report) increased 9.0 percent in the first quarter of 2001 compared with the 2000 period. After adjusting for variations, principally weather and billing days, in each period, firm gas sales and transportation volumes in the company's service territory increased 2.6 percent in the 2001 period. Weather-adjusted sales represent an estimate of the sales that would have been made if historical average weather conditions had prevailed.

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A weather-normalization provision that applies to Con Edison of New York's gas business moderates, but does not eliminate, the effect of weather-related changes on gas operating income.

Steam

Con Edison of New York's steam operating revenues increased $88.0 million and steam operating income increased $9.5 million for the first quarter of 2001 compared with the first quarter of 2000, reflecting an October 2000 rate increase and increased sales volumes. The higher revenues also reflect increased fuel and purchased power costs. See "Rate and Restructuring Agreements" and "Recoverable Energy Costs" in Note A to the company's financial statements included in Item 8 of the Form 10-K.

Con Edison of New York's steam sales volume (see bottom of the company's consolidated income statement included in Part I, Item 1 of this report) increased 2.5 percent in the 2001 period compared with the 2000 period. After adjusting for variations, principally weather and billing days, in each period, steam sales volume decreased 1.0 percent.

Net Interest Charges

Net interest charges increased $9.7 million in the first quarter of 2001 compared to the 2000 period, principally reflecting $13.0 million of interest on increased long-term debt, offset by a $3.0 million decrease in interest related to short-term borrowings.

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O&R MANAGEMENT'S NARRATIVE ANALYSIS OF THE RESULTS OF OPERATIONS

Orange and Rockland Utilities, Inc. (O&R), a wholly-owned subsidiary of Consolidated Edison, Inc. (Con Edison), meets the conditions specified in General Instruction H to Form 10-Q and is permitted to use the reduced disclosure format for wholly-owned subsidiaries of companies, such as Con Edison, that are reporting companies under the Securities Exchange Act of 1934. Accordingly, this O&R Management's Narrative Analysis of the Results of Operations is included in this report, and O&R has omitted from this report the information called for by Part I, Item 2 (Management's Discussion and Analysis of Financial Condition and Results of Operations).

O&R's net income for common stock for the three-month period ended March 31, 2001 was $13.2 million, $2.5 million higher than the corresponding 2000 period. This increase was due primarily to a 3.0 percent increase in electric sales and the recognition in income in the 2001 period of $2.9 million of previously deferred credits pursuant to its New York gas rate agreement, offset in part by $0.7 million of electric rate reductions in the 2001 period pursuant to its New Jersey utility subsidiary's electric restructuring plan and $0.2 million of purchased power costs of its Pennsylvania subsidiary that are not recoverable from customers. See "Rate Regulation" in Note A to the O&R financial statements in Item 8 of the combined O&R, Con Edison and Consolidated Edison Company of New York, Inc. Annual Reports on Form 10-K for the year ended December 31, 2000 (File Nos. 1- 4315, 1-14514 and 1-1217, the Form 10-K).

A comparison of the results of operations of O&R for the three months ended March 31, 2001 to the three months ended March 31, 2000, follows.

(Millions of dollars)	Increases (Decreases) Amount			Increases (Decreases) Percent
Operating revenues	$	47.3		25.9	%
Purchased power - electric		15.1		27.7
Gas purchased for resale		25.3		52.3
Operating revenues less purchased power, fuel and gas purchased for resale (net revenues)		6.9		8.7
Depreciation and amortization		1.0		14.7
Taxes, other than income tax		(1.2	)	(7.4	)
Income tax		3.7		70.5
Operating income		3.4		21.5
Other income less deductions and related income tax		(1.5	)	(77.3	)
Net interest charges		(0.6	)	(8.2	)
Net income for common stock	$	2.5		23.0	%

A discussion of O&R's operating revenues by business segment follows. O&R's principal business segments are its electric and gas utility businesses. For additional information about O&R's business segments, see the notes to the O&R financial statements included in Part I, Item 1 of this report.

Electric operating revenues increased $20.4 million in the first quarter of 2001 compared to the 2000 period. This increase was attributable primarily to an increase in sales volume and the billing to customers of higher purchased power costs in the 2001 period.

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Electric sales volumes for the 2001 and 2000 periods are shown at the bottom of its consolidated income statement for those periods included in Part I, Item 1 of this report. Electric sales volumes in the three months ended March 31, 2001 increased 3.0 percent compared to the 2000 period. After adjusting for variations, principally weather and billing days, electricity sales volumes were 1.6 percent higher in the 2001 period, reflecting the continued strength of the economy in the company's service area. (Weather-adjusted sales represent an estimate of the sales that would have been made if historical average weather conditions had prevailed).

Purchased power costs increased $15.1 million during the first quarter of 2001 compared to the 2000 period. This increase is attributable primarily to increases in the cost of purchased power and higher customer sales. O&R and its New Jersey utility subsidiary recover all of their prudently incurred purchased power in accordance with rate provisions approved by their state public utility commissions. For O&R, the difference between the actual purchased power costs for a given month and the amounts billed to customers for that month is deferred for recovery from or refund to customers during the next billing cycle (normally within one or two months). For O&R's New Jersey utility subsidiary, differences between actual and billed electricity costs (which amounted to a cumulative excess of actual over billed costs of $35.9 million at March 31, 2001) are deferred for future charge or refund to customers, as the case may be. For O&R's Pennsylvania utility subsidiary, recovery of purchased power costs is limited to a predetermined fixed price and, as a result, in the first quarter of 2001 it incurred $0.2 million of purchased power costs that are not subject to recovery from customers. See "Rate Regulation" in Note A to the O&R financial statements in Item 8 of the Form 10-K.

Gas operating revenues increased $26.9 million in the 2001 period, compared to the 2000 period. The increase was due primarily to recovery from customers of higher gas costs and increases in firm transportation volumes in the 2001 period.

Gas sales volumes for the 2001 and 2000 periods are shown at the bottom of O&R's consolidated income statement for those periods included in Part I, Item 1 of this report. O&R's revenues from gas sales in New York are subject to a weather normalization clause that moderates, but does not eliminate, the effect of weather-related changes on gas operating income. After adjusting for variations, principally weather and billing days, in each period, gas sales and transportation volumes to firm customers were 9.8 percent lower for the 2001 period, compared to the 2000 period.

Gas purchased for resale increased $25.3 million in the first quarter of 2001 compared to the 2000 period, due primarily to higher gas costs.

Taxes other than income tax decreased by $1.2 million in the first quarter of 2001 compared to the 2000 period and state income taxes increased by a like amount, reflecting a change in New York law that effectively transferred the tax liability from a revenue based tax to a net income tax.

Income tax increased $3.7 million in the 2001 period compared to the 2000 period due primarily to the change in New York law and to higher income from operations.

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Other income decreased $1.5 million in the first quarter of 2001 compared to the 2000 period. The 2000 period included a market gain of $1.9 million in relation to O&R's supplemental employee retirement plan. Excluding the impact of the gain, investment income increased $0.4 million, due primarily to more interest income earned on short-term investments, offset by an increase in income tax.

Interest charges decreased $0.6 million in the 2001 period compared to the 2000 period, due primarily to lower debt outstanding.

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ITEM 3.  QUANTITATIVE AND QUALITATIVE DISCLOSURE ABOUT MARKET RISK

Con Edison

For information about Con Edison's primary market risks associated with activities in derivative financial instruments, other financial instruments and derivative commodity instruments, see "Financial Market Risks" in Con Edison's Management's Discussion and Analysis of Financial Condition and Results of Operations in Part I, Item 2 of this report and Item 7A of the combined Con Edison, Con Edison of New York and O&R Annual Reports on Form 10-K for the year ended December 31, 2000 (the Form 10-K), which information is incorporated herein by reference.

Con Edison of New York

For information about Con Edison of New York's primary market risks associated with activities in derivative financial instruments, other financial instruments and derivative commodity instruments, see "Financial Market Risks" in Con Edison of New York's Management's Discussion and Analysis of Financial Condition and Results of Operations in Part I, Item 2 of this report and Item 7A of the Form 10-K, which information is incorporated herein by reference.

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PART II.	OTHER INFORMATION
Item 1.	Legal Proceedings

Con Edison

Northeast Utilities Litigation

For information about legal proceedings relating to Con Edison's October 1999 agreement to acquire Northeast Utilities, see Note D to the Con Edison financial statements included in Part I, Item 1 of this report (which information is incorporated herein by reference).

Item 6.	Exhibits and Reports on Form 8-K
(a) Exhibits

Con Edison

Exhibit 12.1 Statement of computation of Con Edison's ratio of earnings to fixed charges for the twelve-month periods ended March 31, 2001 and 2000.

Con Edison of New York

Exhibit 10.2.1	Con Edison of New York Executive Incentive Plan, as amended and restated as of August 1, 2000.
Exhibit 10.2.2	Amendment No. 1 to the Con Edison of New York Deferred Income Plan, effective as of September 1, 2000.
Exhibit 12.2	Statement of computation of Con Edison of New York's ratio of earnings to fixed charges for the twelve-month periods ended March 31, 2001 and 2000.

O&R

Exhibit 12.3 Statement of computation of O&R's ratio of earnings to fixed charges for the twelve-month periods ended March 31, 2001 and 2000.

(b)

Reports on Form 8-K

Con Edison

Con Edison filed no Current Reports on Form 8-K during the quarter ended March 31, 2001.

Con Edison of New York

Con Edison of New York filed no Current Reports on Form 8-K during the quarter ended March 31, 2001.

O&R

O&R filed no Current Reports on Form 8-K during the quarter ended March 31, 2001.

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Signatures

Pursuant to the requirements of the Securities Exchange Act of 1934, each Registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.

	Consolidated Edison, Inc.
	Consolidated Edison Company of New York, Inc.
Date: May 14, 2001	By	/s/ JOAN S. FREILICH Joan S. Freilich Executive Vice President, Chief Financial Officer and Duly Authorized Officer
	Orange and Rockland Utilities, Inc.
Date: May 14, 2001	By	/s/ EDWARD J. RASMUSSEN Edward J. Rasmussen Vice President, Chief Financial Officer and Duly Authorized Officer

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