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Dispositions | 6 Months Ended
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Jun. 30, 2023
Discontinued Operations and Disposal Groups [Abstract] |
Dispositions | DispositionsDuring the first nine months of 2022, Con Edison considered strategic alternatives with respect to the Clean Energy Businesses. On October 1, 2022, following the conclusion of such review and to allow for continued focus on the Utilities and their clean energy transition, Con Edison entered into a purchase and sale agreement pursuant to which Con Edison agreed to sell the Clean Energy Businesses to RWE Renewables Americas, LLC, a subsidiary of RWE for a total of $6,800 million, subject to closing adjustments. On March 1, 2023, Con Edison completed the sale of substantially all of the assets of the Clean Energy Businesses to RWE for $3,993 million. The preliminary purchase price at closing was adjusted (i) upward for certain cash and cash equivalents, (ii) downward for certain indebtedness and debt-like items, (iii) downward for certain transaction expenses, (iv) downward to the extent that the net working capital varied from a set target, (v) upward to the extent that capital expenditures incurred prior to the closing of the transaction varied from a set budget, and (vi) downward by the value allocated to Broken Bow II, a project that was not able to be conveyed to RWE upon closing of the transaction. The final purchase price is subject to customary adjustments for timing differences and a final valuation report, among other factors; the process to finalize the purchase price is ongoing. The transaction was completed at arm’s length and RWE was not, and will not be, considered a related party to Con Edison. Con Edison's preliminary gain on the sale of the Clean Energy Businesses was $867 million ($804 million, a fter tax) for the six months ended June 30, 2023, including $13 million for the three months ended June 30, 2023 resulting from certain finalization adjustments, and remains subject to true-up for the finalization adjustments described above. The portion of the gain attributable to the non-controlling interest retained in certain tax-equity projects was not material. The sale included all assets, operations and projects of the Clean Energy Businesses with the exception of tax equity interests in three projects, described below, and one deferred project, Broken Bow II, a 75MW nameplate capacity wind power project located in Nebraska. See Note T. Transfer of the project is dependent on one outstanding counterparty consent, and if and when such consent is obtained within two years of the sale of the Clean Energy Businesses, i.e., by February 28, 2025, the project will transfer. RWE Renewables Americas, LLC is operating the facility on behalf of Con Edison pursuant to certain service agreements, for which the fees are not material. Con Edison retained the Clean Energy Businesses' tax equity investment interest in the Crane solar project and another tax equity investment interest in two solar projects located in Virginia. These tax equity partnerships produce renewable energy tax credits that can be used to reduce Con Edison’s federal income tax in the year in which the projects are placed in service. These tax credits would be subject to recapture, in whole or in part, if the assets were sold within a five-year period beginning on the date on which the assets are placed in service. Con Edison will continue to employ HLBV accounting for its interest s in these tax equity partnerships. The combined carrying value of the retained tax equity interests is approximately $15 million at June 30, 2023. Con Edison has also retained any post-sale deferred income taxes (federal and state income taxes, including tax attributes), any valuation allowances associated with the deferred tax assets, all current federal taxes and New York State taxes and the estimated liability for uncertain tax positions. The unamortized deferred investment tax credits of the Clean Energy Businesses were recognized in full upon the completion of the sale of the Clean Energy Businesses. Concurrent with entering into the purchase and sale agreement, Con Edison incurred costs in the normal course of the sale process. Transaction costs of $48 million ($35 million after-tax) were recorded in 2022, and $11 million ($8 million after-tax) and $12 million ($8 million after-tax) were recorded in the first three and six months of 2023, respectively. Also, depreciation and amortization expense of approximately $41 million ($28 million after-tax) were not recorded on the assets of the Clean Energy Businesses in the first six months of 2023 through the closing of the transaction. Following the sale of the Clean Energy Businesses and pursuant to a reimbursement and indemnity agreement with RWE, Con Edison remains responsible for certain potential costs related to a battery storage project located in Imperial County, California. Con Edison's exposure under the agreement could range up to approximately $172 million. As of June 30, 2023, no amounts were recorded as liabilities on Con Edison's consolidated balance sheet related to this agreement. During the first six months of 2023, Con Edison received $12 million of proceeds from this battery storage project, and $15 million was recorded as u nbilled contract revenue as of June 30, 2023. See Note K. The following table shows the pre-tax operating income for the Clean Energy Businesses. The 2023 period shown is through the date of the sale of the Clean Energy Businesses and as such there is no applicable data for the three months ended June 30, 2023.
| For the Three Months Ended June 30, | For the Six Months Ended June 30,
(Millions of Dollars) | 2022 | 2023 | 2022
Pre-tax operating income | $113 | $25 | $243
Pre-tax operating income, excluding non-controlling interest | $112 | $21 | $194
Assets and Liabilities Held-for-SaleOn March 1, 2023, Con Edison completed the sale of substantially all of the assets of the Clean Energy Businesses. See Note S. The sale included all assets, operations and projects of the Clean Energy Businesses with the exception of tax equity interests in three projects and one deferred project, Broken Bow II, a 75 MW nameplate capacity wind power project located in Nebraska. Transfer of the project from Con Edison to RWE is dependent on one outstanding counterparty consent, and if and when such consent is obtained within two years of the sale of the Clean Energy Businesses, i.e., by February 28, 2025, the project will transfer. RWE Renewables Americas, LLC is operating the facility on behalf of Con Edison pursuant to certain service agreements for which the fees are not material. At June 30, 2023, the carrying amounts of the major classes of assets and liabilities of Broken Bow II that are expected to be sold are presented on a held-for-sale basis, and accordingly exclude net deferred tax liability balances, as follows:
(Millions of Dollars) | June 30, 2023
ASSETS |
CURRENT ASSETS |
Accounts receivable and other receivables - net allowance for uncollectible accounts | $4
Other current assets | 2
TOTAL CURRENT ASSETS | 6
NON-UTILITY PLANT |
Non-utility property, net accumulated depreciation | 76
NET PLANT | 76
OTHER NONCURRENT ASSETS |
Intangible assets, less accumulated amortization | 72
Operating lease right-of-use asset | 7
TOTAL OTHER NONCURRENT ASSETS | 79
TOTAL ASSETS | $161
(Millions of Dollars) | June 30, 2023
LIABILITIES |
CURRENT LIABILITIES |
Long-term debt due within one year | $2
Operating lease liabilities | 2
Other current liabilities | 2
TOTAL CURRENT LIABILITIES | 6
NONCURRENT LIABILITIES |
Asset retirement obligations | 3
Operating lease liabilities | 5
TOTAL NONCURRENT LIABILITIES | 8
LONG-TERM DEBT | 61
TOTAL LIABILITIES | $75

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