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Regulatory Matters (Tables) | 9 Months Ended
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Sep. 30, 2019
Regulated Operations [Abstract] |
Summary of Utilities Rate Plans | The following tables contain a summary of the rate plans.
CECONY Electric |  |
Effective period |  | January 2020 – December 2022 (c)
Base rate changes (a) |  | Yr. 1 – $113 million Yr. 2 – $370 million Yr. 3 – $326 million
Amortizations to income of net regulatory liabilities (b) |  | Yr. 1 – $267 million Yr. 2 – $269 million Yr. 3 – $272 million
Other revenue sources |  | Retention of $75 million of annual transmission congestion revenues. Potential earnings adjustment mechanism incentives for energy efficiency and other potential incentives of up to: Yr. 1 - $69 million; Yr. 2 - $74 million; and Yr. 3 - $79 million.
Revenue decoupling mechanism |  | Continuation of reconciliation of actual to authorized electric delivery revenues.
Recoverable energy costs |  | Continuation of current rate recovery of purchased power and fuel costs.
Negative revenue adjustments |  | Potential charges if certain performance targets relating to service, reliability, safety and other matters are not met: Yr. 1 - $450 million; Yr. 2 - $461 million; and Yr. 3 - $476 million.
Cost reconciliations |  | Continuation of reconciliation of expenses for pension and other postretirement benefits, variable-rate debt, major storms, property taxes (d), municipal infrastructure support costs (e), the impact of new laws and environmental site investigation and remediation to amounts reflected in rates. (f)
Net utility plant reconciliations |  | Target levels reflected in rates: Electric average net plant target excluding advanced metering infrastructure (AMI): Yr. 1 - $24,572 million; Yr. 2 - $25,366 million; Yr. 3 - $26,197 million AMI: Yr. 1 - $572 million; Yr. 2 - $740 million; Yr. 3 - $806 million (g)
Average rate base |  | Yr. 1 - $21,660 million Yr. 2 - $22,783 million Yr. 3 - $23,926 million
Weighted average cost of capital (after-tax) |  | 6.61 percent
Authorized return on common equity |  | 8.80 percent
Earnings sharing |  | Most earnings above an annual earnings threshold of 9.3 percent are to be applied to reduce regulatory assets for environmental remediation and other costs accumulated in the rate year.
Cost of long-term debt |  | 4.63 percent
Common equity ratio |  | 48 percent
(a) | Base rates reflect recovery by the company of certain costs of its energy efficiency, Reforming the Energy Vision demonstration projects, non-wire alternative projects (including the Brooklyn Queens demand management program), and off-peak electric vehicle charging programs (Yr. 1 - $206 million; Yr. 2 - $245 million; and Yr. 3 - $251 million) over a ten-year period, including the overall pre-tax rate of return on such costs.
(b) | Amounts reflect amortization of the 2018 tax savings under the federal Tax Cuts and Jobs Act of 2017 (TCJA) allocable to CECONY’s electric customers ($377 million) over a three-year period ($126 million annually), the protected portion of the regulatory liability for excess deferred income taxes allocable to CECONY’s electric customers ($1,663 million) over the remaining lives of the related assets ($49 million in Yr. 1, $50 million in Yr. 2, and $53 million in Yr. 3) and the unprotected portion of the net regulatory liability ($784 million) over five years ($157 million annually). Amounts also reflect amortization of the regulatory asset for deferred MTA power reliability costs ($238 million) over a 5-year period ($48 million annually).
(c) | If at the end of any semi-annual period ending June 30 and December 31, Consolidated Edison Inc.’s investments in its non-utility businesses exceed 15 percent of its total consolidated revenues, assets or cash flow, or if the ratio of holding company debt to total
consolidated debt rises above 20 percent, CECONY is required to notify the NYSPSC and submit a ring-fencing plan or a demonstration why additional ring-fencing measures are not necessary.
(d) | Deferrals for property taxes are limited to 90 percent of the difference from amounts reflected in rates, subject to an annual maximum for the remaining difference of not more than a maximum number of basis points impact on return on common equity: Yr. 1 - 10.0 basis points; Yr. 2 - 7.5 basis points; and Yr. 3 - 5.0 basis points.
(e) | In general, if actual expenses for municipal infrastructure support (other than company labor) are below the amounts reflected in rates the company will defer the difference for credit to customers, and if the actual expenses are above the amount reflected in rates the company will defer for recovery from customers 80 percent of the difference subject to a maximum deferral, subject to certain exceptions, of 15 percent of the amount reflected in rates.
(f) | In addition, the NYSPSC staff has commenced a focused operations audit to investigate the income tax accounting of CECONY and other New York utilities. Any NYSPSC-ordered adjustment to CECONY’s income tax accounting will be refunded to or collected from customers, as determined by the NYSPSC.
(g) | Reconciliation of net utility plant for AMI will be done on a combined basis for electric and gas.
CECONY Gas |  |
Effective period |  | January 2020 – December 2022 (c)
Base rate changes (a) |  | Yr. 1 – $84 million Yr. 2 – $122 million Yr. 3 – $167 million
Amortizations to income of net regulatory liabilities (b) |  | Yr. 1 – $45 million Yr. 2 – $43 million Yr. 3 – $10 million
Other revenue sources |  | Retention of annual revenues from non-firm customers of up to $65 million and 15 percent of any such revenues above $65 million. Potential earnings adjusted mechanism incentives for energy efficiency and other potential incentives of up to Yr. 1 - $20 million; Yr. 2 - $22 million; and Yr. 3 - $25 million
Revenue decoupling mechanism |  | Continuation of reconciliation of actual to authorized gas delivery revenues, modified to be calculated based upon revenue per customer class instead of revenue per customer.
Recoverable energy costs |  | Continuation of current rate recovery of purchased gas costs.
Negative revenue adjustments |  | Potential charges if performance targets relating to service, safety and other matters are not met: Yr. 1 - $81 million; Yr. 2 - $88 million; and Yr. 3 - $96 million.
Cost reconciliations |  | Continuation of reconciliation of expenses for pension and other postretirement benefits, variable-rate debt, major storms, property taxes (d), municipal infrastructure support costs (e), the impact of new laws and environmental site investigation and remediation to amounts reflected in rates. (f)
Net utility plant reconciliations |  | Target levels reflected in rates: Gas average net plant target excluding AMI: Yr. 1 - $8,123 million; Yr. 2 - $8,861 million; Yr. 3 - $9,600 million AMI: Yr. 1 - $142 million; Yr. 2 - $183 million; Yr. 3 - $211 million (g)
Average rate base |  | Yr. 1 - $7,171 million Yr. 2 - $7,911 million Yr. 3 - $8,622 million
Weighted average cost of capital (after-tax) |  | 6.61 percent
Authorized return on common equity |  | 8.80 percent
Earnings sharing |  | Most earnings above an annual earnings threshold of 9.3 percent are to be applied to reduce regulatory assets for environmental remediation and other costs accumulated in the rate year.
Cost of long-term debt |  | 4.63 percent
Common equity ratio |  | 48 percent
(a) | At the NYSPSC’s option, the gas base rate increases shown above may be implemented with increases of $47 million in Yr. 1; $176 million in Yr. 2; and $170 million in Yr. 3. Base rates reflect recovery by the company of certain costs of its energy efficiency program (Yr. 1 - $30 million; Yr. 2 - $37 million; and Yr. 3 - $40 million) over a ten-year period, including the overall pre-tax rate of return on such costs.
(b) | Amounts reflect amortization of the remaining 2018 TCJA tax savings allocable to CECONY’s gas customers ($63 million) over a two year period ($32 annually), the protected portion of the regulatory liability for excess deferred income taxes allocable to CECONY’s gas customers ($725 million) over the remaining lives of the related assets ($14 million in Yr. 1, $14 million in Yr. 2, and $12 million in Yr. 3) and the unprotected portion of the net regulatory liability ($107 million) over five years ($21 million annually)
(c)-(g) See footnotes (c), (d), (e), (f) and (g) to the table under “CECONY Electric,” above.
Schedule of Regulatory Assets | Regulatory assets and liabilities at September 30, 2019 and December 31, 2018 were comprised of the following items:
| Con Edison |  | CECONY
(Millions of Dollars) | 2019 |  | 2018 |  | 2019 |  | 2018 |
Regulatory assets |  |  |  |  |
Unrecognized pension and other postretirement costs | $1,919 | $2,238 |  | $1,816 | $2,111
Environmental remediation costs | 774 | 810 |  | 685 | 716
Revenue taxes | 315 | 291 |  | 302 | 278
MTA power reliability deferral | 245 | 229 |  | 245 | 229
Property tax reconciliation | 160 | 101 |  | 150 | 86
Deferred derivative losses | 99 | 17 |  | 90 | 11
Municipal infrastructure support costs | 80 | 67 |  | 80 | 67
Pension and other postretirement benefits deferrals | 77 | 73 |  | 55 | 56
Deferred storm costs | 69 | 76 |  | — |  | — |
System peak reduction and energy efficiency programs | 60 | 72 |  | 59 | 70
Meadowlands heater odorization project | 35 | 36 |  | 35 | 36
Brooklyn Queens demand management program | 35 | 39 |  | 35 | 39
Unamortized loss on reacquired debt | 30 | 36 |  | 28 | 34
Preferred stock redemption | 22 | 23 |  | 22 | 23
Recoverable REV demonstration project costs | 21 | 20 |  | 18 | 18
Gate station upgrade project | 19 | 17 |  | 19 | 17
Workers’ compensation | 5 | 5 |  | 5 | 5
O&R transition bond charges | — |  | 2 |  | — |  | — |
Other | 194 | 142 |  | 187 | 127
Regulatory assets – noncurrent | 4,159 | 4,294 |  | 3,831 | 3,923
Deferred derivative losses | 68 | 36 |  | 57 | 29
Recoverable energy costs | 15 | 40 |  | 12 | 35
Regulatory assets – current | 83 | 76 |  | 69 | 64
Total Regulatory Assets | $4,242 | $4,370 |  | $3,900 | $3,987
Regulatory liabilities |  |  |  |  |
Future income tax | $2,448 | $2,515 |  | $2,302 | $2,363
Allowance for cost of removal less salvage | 952 | 928 |  | 808 | 790
TCJA net benefits* | 462 | 434 |  | 444 | 411
Net unbilled revenue deferrals | 145 | 117 |  | 145 | 117
Energy efficiency portfolio standard unencumbered funds | 123 | 127 |  | 119 | 122
Pension and other postretirement benefit deferrals | 67 | 62 |  | 41 | 40
Property tax refunds | 45 | 45 |  | 45 | 45
Net proceeds from sale of property | 44 | 6 |  | 44 | 6
System benefit charge carrying charge | 43 | 27 |  | 38 | 24
Earnings sharing - electric, gas and steam | 26 | 36 |  | 19 | 27
BQDM and REV Demo reconciliations | 25 | 18 |  | 24 | 18
Settlement of prudence proceeding | 15 | 37 |  | 15 | 37
Settlement of gas proceedings | 11 | 15 |  | 11 | 15
Unrecognized other postretirement costs | 5 | 7 |  | — |  | 7
Carrying charges on repair allowance and bonus depreciation | 4 | 21 |  | 4 | 21
New York State income tax rate change | 3 | 17 |  | 3 | 17
Base rate change deferrals | 1 | 10 |  | 1 | 10
Property tax reconciliation | — |  | 36 |  | — |  | 36
Other | 171 | 183 |  | 137 | 152
Regulatory liabilities – noncurrent | 4,590 | 4,641 |  | 4,200 | 4,258
Refundable energy costs | 36 | 31 |  | 8 | 8
Deferred derivative gains | 33 | 30 |  | 32 | 29
Revenue decoupling mechanism | 24 | 53 |  | 16 | 36
Regulatory liabilities – current | 93 | 114 |  | 56 | 73
Total Regulatory Liabilities | $4,683 | $4,755 |  | $4,256 | $4,331
* See "Other Regulatory Matters," above.
Schedule of Regulatory Liabilities | Regulatory assets and liabilities at September 30, 2019 and December 31, 2018 were comprised of the following items:
| Con Edison |  | CECONY
(Millions of Dollars) | 2019 |  | 2018 |  | 2019 |  | 2018 |
Regulatory assets |  |  |  |  |
Unrecognized pension and other postretirement costs | $1,919 | $2,238 |  | $1,816 | $2,111
Environmental remediation costs | 774 | 810 |  | 685 | 716
Revenue taxes | 315 | 291 |  | 302 | 278
MTA power reliability deferral | 245 | 229 |  | 245 | 229
Property tax reconciliation | 160 | 101 |  | 150 | 86
Deferred derivative losses | 99 | 17 |  | 90 | 11
Municipal infrastructure support costs | 80 | 67 |  | 80 | 67
Pension and other postretirement benefits deferrals | 77 | 73 |  | 55 | 56
Deferred storm costs | 69 | 76 |  | — |  | — |
System peak reduction and energy efficiency programs | 60 | 72 |  | 59 | 70
Meadowlands heater odorization project | 35 | 36 |  | 35 | 36
Brooklyn Queens demand management program | 35 | 39 |  | 35 | 39
Unamortized loss on reacquired debt | 30 | 36 |  | 28 | 34
Preferred stock redemption | 22 | 23 |  | 22 | 23
Recoverable REV demonstration project costs | 21 | 20 |  | 18 | 18
Gate station upgrade project | 19 | 17 |  | 19 | 17
Workers’ compensation | 5 | 5 |  | 5 | 5
O&R transition bond charges | — |  | 2 |  | — |  | — |
Other | 194 | 142 |  | 187 | 127
Regulatory assets – noncurrent | 4,159 | 4,294 |  | 3,831 | 3,923
Deferred derivative losses | 68 | 36 |  | 57 | 29
Recoverable energy costs | 15 | 40 |  | 12 | 35
Regulatory assets – current | 83 | 76 |  | 69 | 64
Total Regulatory Assets | $4,242 | $4,370 |  | $3,900 | $3,987
Regulatory liabilities |  |  |  |  |
Future income tax | $2,448 | $2,515 |  | $2,302 | $2,363
Allowance for cost of removal less salvage | 952 | 928 |  | 808 | 790
TCJA net benefits* | 462 | 434 |  | 444 | 411
Net unbilled revenue deferrals | 145 | 117 |  | 145 | 117
Energy efficiency portfolio standard unencumbered funds | 123 | 127 |  | 119 | 122
Pension and other postretirement benefit deferrals | 67 | 62 |  | 41 | 40
Property tax refunds | 45 | 45 |  | 45 | 45
Net proceeds from sale of property | 44 | 6 |  | 44 | 6
System benefit charge carrying charge | 43 | 27 |  | 38 | 24
Earnings sharing - electric, gas and steam | 26 | 36 |  | 19 | 27
BQDM and REV Demo reconciliations | 25 | 18 |  | 24 | 18
Settlement of prudence proceeding | 15 | 37 |  | 15 | 37
Settlement of gas proceedings | 11 | 15 |  | 11 | 15
Unrecognized other postretirement costs | 5 | 7 |  | — |  | 7
Carrying charges on repair allowance and bonus depreciation | 4 | 21 |  | 4 | 21
New York State income tax rate change | 3 | 17 |  | 3 | 17
Base rate change deferrals | 1 | 10 |  | 1 | 10
Property tax reconciliation | — |  | 36 |  | — |  | 36
Other | 171 | 183 |  | 137 | 152
Regulatory liabilities – noncurrent | 4,590 | 4,641 |  | 4,200 | 4,258
Refundable energy costs | 36 | 31 |  | 8 | 8
Deferred derivative gains | 33 | 30 |  | 32 | 29
Revenue decoupling mechanism | 24 | 53 |  | 16 | 36
Regulatory liabilities – current | 93 | 114 |  | 56 | 73
Total Regulatory Liabilities | $4,683 | $4,755 |  | $4,256 | $4,331
* See "Other Regulatory Matters," above.

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