CONSOLIDATED EDISON INC

Con Edison operates primarily through its regulated utility subsidiaries, Consolidated Edison Company of New York, Inc. (CECONY) and Orange and Rockland Utilities, Inc. (O&R), which are expected to provide substantially all of its earnings over the next few years ⁸. The company's mission is to provide energy services safely, reliably, and efficiently, while also focusing on a clean energy future, an inclusive workplace, a fair return to investors, and improving community quality of life ⁸. Con Edison Transmission, a subsidiary, develops and invests in electric transmission projects and owns electric and gas assets through joint ventures ⁸.

CECONY provides electric service to approximately 3.7 million customers in New York City and most of Westchester County, gas service to approximately 1.1 million customers in Manhattan, the Bronx, parts of Queens, and most of Westchester County, and steam service to approximately 1,490 customers in parts of Manhattan, delivering approximately 16,975 MMlb of steam annually ¹⁵. O&R provides electric service to approximately 0.3 million customers and gas service to over 0.1 million customers in southeastern New York and northern New Jersey ¹⁶.

The core business model for CECONY and O&R involves providing regulated electric, gas, and steam delivery services. Revenues are generated through tariffs approved by state utility regulators, which are designed to cover the cost of service, including capital and other costs of energy delivery systems [8, 16]. The Utilities recover the cost of energy purchased for full-service customers, generally on a current basis, and charge all customers for delivery service [8, 21, 26, 27]. Revenue decoupling mechanisms are in place for CECONY's electric and gas delivery revenues and O&R's New York electric and gas delivery revenues, meaning these revenues are generally not affected by changes in delivery volumes from levels assumed when rates were approved [21, 23, 26, 27]. CECONY's steam sales are subject to a weather normalization clause ²⁵.

CECONY's electric operations include distribution facilities with a transformer capacity of 33,020 MVA, 38,219 miles of overhead distribution lines, and 100,371 miles of underground distribution lines ²⁰. Its transmission facilities include 490 miles of overhead circuits and 770 miles of underground circuits ²¹. CECONY's electric generating facilities, primarily for steam production, have a combined electric nameplate capacity of approximately 726 MW ²¹. Total electric deliveries in 2025 were 53,798 million kWh, generating $11,670 million in revenue ²¹. Gas operations involve distributing natural gas through an estimated 4,374 miles of mains and 379,939 service lines, and owning a natural gas liquefaction facility with a capacity of approximately 1 Bcf ²³. Total gas delivered to CECONY customers in 2025 was 172,977 MDt, generating $3,164 million in revenue ²³. Steam operations include one steam-electric generating station and four steam-only generating stations, distributing steam through approximately 106 miles of piping ²⁴. Total steam delivered in 2025 was 16,975 MMlb, generating $703 million in revenue ²⁵.

O&R's electric operations include 552 circuit miles of transmission lines, 16 transmission substations, 63 distribution substations, 89,675 in-service line transformers, 3,764 pole miles of overhead distribution lines, and 2,417 miles of underground distribution lines ²⁵. Total electric deliveries in 2025 were 5,775 million kWh, generating $934 million in revenue ²⁶. Gas operations involve distributing natural gas through an estimated 1,902 miles of mains and 107,866 service lines ²⁷. Total gas delivered to O&R customers in 2025 was 25,488 MDt, generating $325 million in revenue ²⁷. Con Edison Transmission develops and invests in electric transmission projects and owns, through joint ventures, both electric and gas assets ²⁸. This includes a 45.7% ownership interest in New York Transco's Transmission Owner Transmission Solutions (TOTS) and New York Energy Solution (NYES) projects, and a 41.7% interest in New York Transco's share of the Propel NY Energy project ²⁸. Con Edison Transmission also owns a 71.2% interest in Honeoye, which operates a gas storage facility ²⁸.

For the fiscal year ended December 31, 2025, Con Edison reported total operating revenues of $16,918 million ⁶⁰. Gross profit, calculated as operating revenues less purchased power, fuel, and gas purchased for resale, was $12,813 million ⁶⁰. The gross margin percentage was 75.7% ($12,813 million / $16,918 million) ⁶⁰. Operating income was $2,935 million ⁶⁰. The operating margin percentage was 17.3% ($2,935 million / $16,918 million) ⁶⁰. Net income for common stock was $2,023 million ⁵⁷. Basic diluted EPS was $5.66 ⁵⁷. Cash and temporary cash investments at year-end 2025 were $1,630 million ⁶⁹. Total long-term debt was $25,551 million ⁶⁹. Free cash flow is not explicitly stated in the provided text.

Comparing 2025 to 2024, Con Edison's total operating revenues increased by $1,662 million, from $15,256 million to $16,918 million ⁶⁰. Net income for common stock increased by $203 million, from $1,820 million to $2,023 million ⁵⁷. CECONY's electric operating income increased by $224 million, from $1,832 million to $2,056 million ⁶¹. CECONY's gas operating income increased by $3 million, from $748 million to $751 million ⁶². CECONY's steam operating income decreased by $8 million, from $13 million to $5 million ⁶³. O&R's electric operating income decreased by $3 million, from $112 million to $109 million ⁶⁴. O&R's gas operating income decreased by $4 million, from $49 million to $45 million ⁶⁵. Con Edison Transmission's net income for common stock decreased by $31 million, from $45 million to $14 million ⁵⁷.

During 2025, Con Edison Transmission completed the sale of approximately 40 percent of its approximately 6.6 percent interest in Mountain Valley Pipeline, LLC (MVP) [9, 28]. CECONY and O&R filed updated climate change resilience plans with the NYSPSC in February 2025, proposing investments of $645.4 million and $184.1 million, respectively, between 2025 and 2029 ³⁷. In May 2025, the NYSPSC issued orders establishing energy efficiency and building electrification program budgets for CECONY and O&R for 2026-2030, with aggregate budgets of $2,138 million and $110 million, respectively ³⁴. In July 2025, CECONY and O&R filed their final Pilot Engineering Design and Customer Protection Plans (Stage 2 Filings) for utility-scale thermal energy network pilot projects, with total estimated costs increasing to $415 million for CECONY and $112 million for O&R ³⁵.

Con Edison expects to invest $6,595 million in total capital requirements for 2026, $7,539 million for 2027, $7,952 million for 2028, $8,643 million for 2029, and $9,223 million for 2030 ³⁰. Specifically, the Utilities expect to invest $6,533 million in 2026, $6,592 million in 2027, $6,939 million in 2028, $8,524 million in 2029, and $8,571 million in 2030 for their energy delivery systems ⁸. Con Edison Transmission expects to invest $62 million in 2026, $167 million in 2027, $213 million in 2028, $75 million in 2029, and $17 million in 2030 in electric transmission ⁸.

CECONY forecasts an average annual increase in peak demand in its service area at design conditions over the next five years for electricity to be approximately 0.7 percent and for gas to be approximately 0.2 percent ⁹. An average annual decrease in steam peak demand in its service area at design weather conditions over the next five years is forecasted to be approximately 0.9 percent ⁹. O&R forecasts an average annual increase in electric peak demand in its service area at design conditions over the next five years to be approximately 4.1 percent, and an average annual increase in gas peak demand in its service area over the next five years at design conditions to be approximately 1.2 percent ⁹.

In January 2026, the NYSPSC approved new electric and gas rate plans for CECONY for the three-year period January 2026 through December 2028 ⁹. The electric rate plan provides for electric rate increases of $222 million, $473 million, and $329 million, effective January 2026, 2027, and 2028, respectively, resulting in a consistent total bill impact of 2.80% each year ⁹. Corresponding base rate increases are $234 million, $410 million, and $421 million, respectively ⁹. The gas rate plan provides for rate changes of $(46) million, $170 million, and $93 million, effective January 2026, 2027, and 2028, respectively, resulting in a consistent total bill impact of 2.01% each year ⁹. Corresponding base rate increases are $28 million, $69 million, and $70 million, respectively ⁹. CECONY's steam rate increase request of $66 million, effective November 1, 2026, is under review, with illustrative rate increases of $50 million and $50 million effective November 2027 and 2028, respectively, calculated based on an assumed return on common equity of 9.9 percent and a common equity ratio of 48 percent ⁹.

The electric and gas rate plans for CECONY include the continuation of the revenue decoupling mechanism and provisions for recovery of purchased power, gas, and fuel costs ⁹. Earnings opportunities from Earnings Adjustment Mechanisms (EAM) for meeting energy efficiency goals and other potential incentives will also continue ⁹. The gas rate plan includes a provision for $33.3 million in annual gas revenue requirement ($100 million in aggregate from 2026 through 2028) to be recovered through a rate adjustment mechanism, subject to refund, related to the NYSDPS's review of CECONY's gas main welds ⁹.

Con Edison plans to meet its capital requirements for 2026 through 2030 through internally-generated funds, the issuance of long-term debt through public and private offerings, and the issuance of common equity through public offerings, including an at-the-market equity program [8, 32]. The plans include the issuance of up to $3,200 million of long-term debt in 2026 and up to $3,000 million of long-term debt in 2027, including for maturing securities, at the Utilities ⁸. Approximately $9,900 million in aggregate of long-term debt, including for maturing securities, is planned at the Utilities during 2028 through 2030 ⁸. Con Edison plans to issue up to $1,100 million of common equity in 2026, in addition to equity issued under its dividend reinvestment, employee stock purchase, and long term incentive plans ⁸. Common equity issuances of approximately $1,200 million in 2027 and up to $3,300 million in aggregate during 2028 through 2030 are also planned, in addition to equity issued under its dividend reinvestment, employee stock purchase, and long term incentive plans ⁸.

The NYISO's 2025 Q3 Short-Term Assessment of Reliability (STAR) identifies a bulk power system electric reliability need in New York City beginning in the summer of 2026 and continuing through 2030, driven by forecasted increases in peak demand, deactivation notices of existing generation, and uncertainty regarding planned projects ²². In its 2025 Q4 STAR report, the NYISO observed that the scope, scale, and nature of the forecasted reliability need remains unchanged ²². CECONY issued its preliminary 2025 Local Transmission Plan (LTP), projecting reliability needs in New York driven by increasing load demand, cumulative generator retirements, and reliability design criteria updates ²². In January 2026, CECONY filed an updated projection of reliability needs in New York City of 125 MW beginning in 2032 and increasing to 750 MW by 2036 ²².

The Companies face significant regulatory and compliance risks, as their operations are extensively regulated by federal, state, and local agencies, including the NYSPSC, NJBPU, and FERC, which can impose substantial penalties for violations of laws, regulations, or orders ⁴³. The Utilities' rate plans, while designed to cover costs, do not guarantee a reasonable return, and actual costs may exceed approved levels, potentially leading to prudence proceedings or denial of cost recovery ⁴³. Changes to tax laws, such as the Inflation Reduction Act, or their interpretations, could materially impact the Companies' financial condition, credit ratings, and liquidity ⁴⁵. Operational risks include the potential for failure or damage to facilities, especially given their location in densely populated areas, which could result in injury, property damage, hazardous substance releases, or extended service interruptions, with climate change impacts exacerbating these risks ⁴⁴. Cyberattacks pose a heightened risk to critical energy infrastructure, with increasing sophistication and frequency, potentially leading to operational disruptions, data theft, financial losses, increased regulation, and reputational damage ⁴⁴. The Companies also face risks related to the failure of internal processes and systems, and the inability to attract and retain a skilled workforce, which could lead to operational challenges and increased costs ⁴⁵. Environmental risks include substantial costs related to climate change adaptation, compliance with GHG emission reduction regulations like the CLCPA and New York City's Climate Mobilization Act, and liabilities for hazardous substances from past operations ⁴⁵. Financial and market risks include Con Edison's dependence on subsidiary dividends, which are limited by regulatory restrictions ⁴⁵. Access to capital markets is crucial for funding substantial capital requirements, and changes in financial market conditions or credit ratings could adversely affect this access and its cost ⁴⁶. Disruptions in wholesale energy markets, increased commodity costs, or failure by energy suppliers or customers could impact the Companies' ability to meet energy needs and recover costs, potentially affecting liquidity due to slower recovery of accounts receivable ⁴⁶. Other risks include health epidemics, which could disrupt essential services, and the ineffectiveness of strategies to address changes in the external business environment, such as competition from distributed energy resources and evolving public policy ⁴⁶. Supply chain disruptions, inflation, and tariffs are also increasing costs and lead times for critical materials and equipment, potentially leading to prolonged customer outages and unrecovered costs ⁴⁶.

Management's message to shareholders emphasizes Con Edison's mission to provide energy services safely, reliably, and efficiently, while also focusing on a clean energy future, an inclusive workplace, a fair return to investors, and improving community quality of life ⁸. The company anticipates that its regulated utilities, CECONY and O&R, will continue to provide substantially all of its earnings over the next few years ⁸. Management expects to meet its capital requirements for 2026 through 2030 through internally-generated funds, the issuance of long-term debt through public and private offerings, and the issuance of common equity through public offerings, including an at-the-market equity program ⁸. Specifically, Con Edison plans to issue up to $3,200 million of long-term debt in 2026 and up to $3,000 million of long-term debt in 2027 at the Utilities, and approximately $9,900 million in aggregate of long-term debt at the Utilities during 2028 through 2030 ⁸. The company also plans to issue up to $1,100 million of common equity in 2026, and approximately $1,200 million in 2027, and up to $3,300 million in aggregate during 2028 through 2030, in addition to equity issued under its dividend reinvestment, employee stock purchase, and long term incentive plans ⁸. Key strategic priorities include investing to provide reliable, resilient, safe, and clean energy, and being a responsible neighbor by helping communities become more sustainable ¹⁵.