Consolidated Edison, Inc. · NYSE:ED
Consolidated Edison — 2018 American Gas Association Financial Forum
30 slides from Consolidated Edison's conference presentation, May 20, 2018
Slide 1: 2018 American Gas Association Financial Forum
2018 American Gas Association Financial Forum May 20-21, 2018
Slide 2: Available Information; Forward-Looking Statements; Non-GAAP Financial Measure
Available Information On May 3, 2018, Consolidated Edison, Inc. issued a press release reporting its first quarter 2018 earnings and filed with the Securities and Exchange Commission the company’s first quarter 2018 Form 10-Q. This presentation should be read together with, and is qualified in its e
Slide 3: Con Edison: Poised for a Strong Future
Con Edison: Poised for a Strong Future • One of the nation’s largest investor-owned energy-delivery companies – $12 billion in annual revenues – $49 billion asset base • Steady earnings, growing dividend – 44 consecutive years of dividend growth • Attractive capex opportunities – $11.1 billion three
Slide 4: Organizational Structure
Organizational Structure Market Cap(a): $24.0 billion Ratings(b): A3 / BBB+ / BBB+ Outlook(b): Negative / Stable / Stable Utilities Transmission Clean Energy Con Edison Con Edison Consolidated Clean Energy Orange and Transmission, Edison Businesses, Rockland Inc. Company of Inc. New York, Inc. Utili
Slide 5: The Con Edison Plan
The Con Edison Plan Customer Focused Strategic Value Oriented Provide safe and Strengthen core Provide steady, reliable service utility delivery predictable business earnings Enhance the Pursue additional Maintain customer regulated growth balance sheet experience opportunities to add stability valu
Slide 6: Dividend Growth for Shareholders
Dividend Growth for Shareholders • 44 consecutive years of dividend increases • Accelerated growth over past five years • Target dividend payout range: 60 – 70% of adjusted earnings 5-year CAGR (2014-2018) 5-year CAGR (2009-2013) 3.0% 1.0% $2.86 $2.68 $2.76 $2.60 $2.46 $2.52 $2.36 $2.38 $2.40 $2.42
Slide 7: Complementary Business Mix with Utilities at the Core
Complementary Business Mix with Utilities at the Core 2017 GAAP EPS Contribution 2017 Adjusted EPS Contribution (Non-GAAP)* Regulated Utilities 76% 92% Clean Energy 21% 5% Transmission 3% 3% *Represents Adjusted Earnings per Share. Please see Appendix for reconciliation to GAAP. 7
Slide 8: Opportunities for Growth Across Our Businesses
Opportunities for Growth Across Our Businesses 2018 – 2020 Forecasted Capital Investment $9.5 billion $1.2 billion $0.4 billion Regulated Utilities Clean Energy Transmission 8
Slide 9: Clean Energy Businesses
Clean Energy Businesses 1.6 GW 1.6 GW Renewables portfolio Renewables portfolio (79% solar) (79% solar, 21% wind) Ranked #5 among solar PV Ranked #5 among solarowners in North America PV owners in North America 9
Slide 10: Con Edison Transmission: Regional Transmission Opportunities Include Gas and Electric
Con Edison Transmission: Regional Transmission Opportunities Include Gas and Electric Executing on existing projects and pursuing additional strategic growth opportunities across the region Stagecoach • 2.9 Bcf/day of delivery capacity • 41 Bcf of storage capacity 45.7% ownership Mountain Valley Pip
Slide 11: Regulatory Framework in NY Supports Energy Efficiency and Distributed Resources
Regulatory Framework in NY Supports Energy Efficiency and Distributed Resources • Reduced regulatory lag ‒ Forward-looking test years ‒ Timely recovery of most fuel and commodity costs ‒ Revenue decoupling mechanism in NY (electric and gas) ‒ Adjustment mechanisms for several major uncontrollable ex
Slide 12: Reforming the Energy Vision (REV) Presents Opportunities as Industry Evolves
Reforming the Energy Vision (REV) Presents Opportunities as Industry Evolves Track 1 Utilities play central role in integration of distributed energy resources into system while customers and third parties own customer-sited resources Track 2 Incentives and new earnings opportunities added to ratema
Slide 13: Smart Meter Initiative: Building an Advanced, Smarter Grid
Smart Meter Initiative: Building an Advanced, Smarter Grid • 5.4 million smart meters to be installed by 2022 • $1.4 billion investment • Expected to improve operations and reduce expenses • Empowers customers to manage their bills and energy usage in new ways Utilities' Approved Annual AMI Capital
Slide 14: Emphasis on Energy Efficiency and Demand Response
Emphasis on Energy Efficiency and Demand Response Technology is providing customers with new ways to reduce energy use 1.6 million MWh of cumulative utility customer energy savings since 2009 14
Slide 15: Environmental Benefits of Steam
Environmental Benefits of Steam Steam cogeneration production has a significantly lower carbon footprint relative to comparative heating technologies • On average, 60% of CECONY’s steam production is cogenerated • The carbon footprint of our steam system per million BTUs is significantly less than a
Slide 16: Orange & Rockland's Efforts to Curb Emissions
Orange & Rockland’s Efforts to Curb Emissions • In 2017, O&R replaced 24 miles of leak prone pipe; on pace to eliminate all cast iron pipes in the O&R system by 2020 • Over the course of the past 20 years, the O&R team has replaced more than 370 miles of leak prone pipe • O&R spends $25 million annu
Slide 17: Marc Huestis, Senior Vice President, CECONY Gas
Marc Huestis, Senior Vice President, CECONY Gas • Gas System Overview • Infrastructure Investment • Methane/GHG Emission Reduction • Smart Solutions for Natural Gas Customers 17
Slide 18: CECONY Gas Service Area
CECONY Gas Service Area • Service territory includes NEW YORK Manhattan, Queens, Bronx, and Westchester County CONNECTICUT • 1.1 million customers NEW JERSEY • 379,000 services WESTCHESTER • 94 miles of transmission mains • 4,300 miles of distribution BRONX mains MANHATTAN QUEENS LONG ISLAND BROOKLY
Slide 19: CECONY Gas Distribution System
CECONY Gas Distribution System Distribution System by Material Plastic 48% Cast Iron 24% Unprotected Steel 22% Protected Steel 6% 19
Slide 20: CECONY Gas Capital Investment
CECONY Gas Capital Investment 40% increase in capital programs over previous rate case, driven by 20 year accelerated main replacement plan 2018 Capital Investment: $970 million Gas Infrastructure Investments Distribution System Improvement 47% Programs • Cast iron and unprotected steel pipe Transmi
Slide 21: CECONY Gas Accelerated Main Replacement Program
CECONY Gas Accelerated Main Replacement Program • Reducing 30+ year plan to a 20 year plan • Targeting 91 miles in 2018 (100 miles annually by 2021) • Incentives in current rate plan: ‒ Complete six additional replacement miles above annual target Maximum Annual Incentive: $4 million • Risk-based re
Slide 22: CECONY Gas Transmission System Upgrades
CECONY Gas Transmission System Upgrades • Over 20 miles of transmission main upgrades • $280 million in investment for replacement of infrastructure in 2018-2019 • All new piping will operate at less than 20% specified minimum yield strength (SMYS) 22
Slide 23: CECONY Gas Capital Expenditures
CECONY Gas Capital Expenditures 2018 capital program CECONY Gas Capital Expenditures ($ in millions) budget includes: • Main replacement $970 $970 $909 program: $300 million $811 • Transmission upgrades: $671 $180 million $549 • Gas work & asset management system: $30 million 2014 2015 2016 2017 201
Slide 24: CECONY Gas Operations and Maintenance Expenses
CECONY Gas Operations and Maintenance Expenses Increase in operations and Operations and Maintenance* ($ in millions) maintenance expenses includes: $144 $147 $147 $144 $147 • Leak management $113 • Capital-related $86 maintenance due to the main replacement program 2013 2014 2015 2016 2017 2018E 20
Slide 25: Environmental Stewardship: GHG Reductions
Environmental Stewardship: GHG Reductions • Con Edison has been a leader in emissions reduction for over a generation; we converted all of our plants from coal to cleaner fuels in 1972 • Essentially all of CECONY’s heavy-duty fleet is fueled by biodiesel and we have enrolled more than 1,000 vehicles
Slide 26: Environmental Stewardship: Oil-to-Gas Conversions
Environmental Stewardship: Oil-to-Gas Conversions 6,800 large heating oil customers converted to gas 521 tons of avoided fine particulate matter (equal to a 1.7 million car reduction) – cleanest air in New York City in fifty years 26
Slide 27: Environmental Stewardship: Reducing Leak Repair Time
Environmental Stewardship: Reducing Leak Repair Time We are committed to reducing emissions associated with gas leaks by improving our average repair time and backlog • Since 2014, CECONY has reduced the average time to repair leaks by more than 50% • CECONY’s year-end leak backlog dropped to histor
Slide 28: Smart Solutions for Natural Gas Customers Proposals
Smart Solutions for Natural Gas Customers Proposals Programs designed to put New York on a path toward a cleaner energy future 1. Enhanced Gas Energy Efficiency – Aim to double gas efficiency gains with additional funding to existing programs – Annual cost: incremental ~$14.5 million per year in 201
Slide 29: Appendix
Appendix ED onEdison, inc. NYSE
Slide 30: Reconciliation of Reported EPS (GAAP) to Adjusted EPS (Non-GAAP) by Company
Reconciliation of Reported EPS (GAAP) to Adjusted EPS (Non- GAAP) by Company For the year ended December 31, 2017 CECONY O&R CEBs CET Other(a) Total Reported EPS – GAAP basis $3.59 $0.21 $1.08 $0.15 $(0.06) $4.97 Enactment of the Tax Cuts and Jobs Act — — (0.88) (0.04) 0.07 (0.85) Net mark-to-market
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