Consolidated Edison, Inc. · NYSE:ED
Consolidated Edison — 2013 AGA Financial Forum
29 slides from Consolidated Edison's conference presentation, May 2013
Slide 1: 2013 AGA Financial Forum
Con Edison, Inc. May 5-6, 2013 2013 AGA Financial Forum 1
Slide 2: Forward-Looking Statements and Non-GAAP Financial Measure
Forward-Looking Statements This presentation includes certain forward-looking statements intended to qualify for safe-harbor provisions of the Federal securities laws. Forward-looking statements are statements of future expectation and not facts. Words such as "expects," "estimates," "anticipates,"
Slide 3: Regulated Transmission and Distribution Focused
Regulated Transmission and Distribution Focused Con Edison, Inc. (ED) 2012 EPS $3.88* Rate Base: $22.1 billion Market Cap: $18.4 billion Regulated Utilities Orange and Rockland 2012 EPS $0.22 Con Edison of New York 2012 EPS $3.46 Competitive Energy Businesses Con Edison Con Edison Con Edison Solutio
Slide 4: Reconciliation of 1st Quarter 2013 and 2012 Earnings Per Share
Reconciliation of 1st Quarter 2013 and 1st Quarter 2012 Earnings Per Share Con Con Con Edison Edison Edison 3 months ending March 31, 2013 CECONY O&R Development Energy Solutions Parent Total Reported EPS – GAAP basis $0.95 $0.10 $(0.45) $- $0.07 $(0.01) $0.66 Mark-to-Market losses/(gains) - - - - $
Slide 5: Regulated Utilities are the Core of Con Edison, Inc.
Regulated Utilities are the Core of Con Edison, Inc. Con Edison of New York (CECONY) • 3.3 million electric customers • 1.1 million gas customers • 1,717 steam customers • 706 MW of regulated generation CECONY and O&R • Delivered 40% of NYS 2012 delivered 43% of electric peak consumption NYS 2012 el
Slide 6: Composition of Rate Base
Composition of Rate Base (as of March 31, 2013) Rate Base* ($ millions) Con Edison of New York Electric (NY) $ 16,202 Gas (NY) $ 3,234 Steam (NY) $ 1,516 Total CECONY $ 20,952 Orange and Rockland Pike Gas (PA) $ 2 Pike Electric (PA) $ 13 Rockland Electric (NJ) (distribution) $ 155 (transmission) $ 2
Slide 7: CECONY Gas Rate Base Growth
Con Edison of New York CECONY Gas Rate Base Growth ($ millions) 5-year CAGR (2007-2012) 5.83% 3,150 3,050 2,964 2,826 2,623 2,373 2,271 2,081 1,935 1,863 1,703 1,753 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 CECONY Gas (NY) 7
Slide 8: Gas Distribution is a Significant Segment of Utility Operating Income
Gas Distribution is a Significant Segment of Utility Operating Income (for the twelve months ended December 31, 2012) Con Edison of New York Orange and Rockland Electric 67% Electric 81% Gas 33% Gas 16% Steam 3% 8
Slide 9: Electric and Gas Franchise Areas
Con Edison of New York Electric and Gas Franchise Areas NEW YORK CONNECTICUT NEW JERSEY WESTCHESTER Con Edison Service Area BRONX Gas and Electric Service Areas MANHATTAN Electric Service Areas QUEENS LONG ISLAND BROOKLYN STATEN ISLAND 9
Slide 10: Gas Distribution Infrastructure Investment
Con Edison of New York Gas Distribution Infrastructure Investment ($ millions) $600 $500 $400 Gas $300 Depreciation $200 $100 $0 2008 2009 2010 2011 2012 2013 2014 2015 Forecast Forecast Forecast $338 $339 $334 $335 $426 $473 $497 $545 10
Slide 11: Breakdown of 2013 Gas Distribution Capital Investment
Breakdown of 2013 Gas Distribution Capital Investment Reliability Info 15% Technology 1% Municipal Infrastructure Support Municipal 7% Infrastructure Support 17% Reliability 28% Equipment Replacement Equipment 12% Replacement 6% System Expansion 14% Reliability Replacement Reliability 67% 19% 67% Sy
Slide 12: 5-Year Annualized Growth Rates in Peak Usage
5-Year Annualized Growth Rates in Peak Usage 5-Year Historical Current 2002-2007 5-Year (Pre-Recession) Forecast CECONY Electric 1.8% 1.3% Gas 1.0% 4.3% Steam (0.8)% (0.5)% O&R Electric 2.6% 0.9% Gas (0.8)% 0.8% 12
Slide 13: Gas Peak Demand Forecast by Component
Con Edison of New York Gas Peak Demand Forecast - 1 Year vs. 5 Year Outlook by Component 2012 Adjusted Peak: 1,174 Mdt / day Components 2013 2013 – 2017 #4 / #6 Oil to Gas 45 183 #2 Oil to Gas 4 19 Economy 1 28 New Business 6 47 Net Transfers 5 25 Distributed Generation 2 10 Energy Efficiency / Cons
Slide 14: Clean Air Goals and Low Gas Prices Influence Oil-to-Gas Conversions
Con Edison of New York Clean Air Goals and Low Gas Prices Influence Oil-to-Gas Conversions New York City Clean Air Price Advantage of Delivered Imperatives Natural Gas Versus Oil* • Reduce greenhouse gas • 50-65% discount to #2 oil emissions by 30% below 2005 levels by 2030 • 45-60% discount to #4 o
Slide 15: Breakdown of #4 and #6 Oil Users Within CECONY's Service Area
Con Edison of New York Breakdown of #4 and #6 Oil Users Within CECONY’s Service Area* • There are around 10,000 boilers Bronx 34% burning #4 or #6 heating oil in NYC • Approximately 7,000 potential conversions within Con Edison gas Manhattan franchise area – NYC Queens 56% 10% *As of April 2011 15
Slide 16: Market for Multi-Family and Commercial Oil-to-Gas Conversions by Oil Type
Con Edison of New York Market for Multi-Family* and Commercial Oil-to-Gas Conversions by Oil Type January 2011 to March 2013 Completed Conversions 4,200 customers Total Conversion #6 Oil 553 converted, 13% Potential 2,800 customers #4 Oil 336 converted, 12% 14,000 customers** #2 Oil 491 converted, 3
Slide 17: Gas Infrastructure Investment Forecast
Con Edison of New York Gas Infrastructure Investment Forecast ($ millions) $600 $500 $99 $90 $108 $400 $300 $446 $200 $407 $365 $100 $0 2013 2014 2015 Other Oil-to-Gas Conversion 17
Slide 18: Gas Conversion Opportunities and Obstacles
Gas Conversion Opportunities and Obstacles • Oil/gas price spread produces compelling economics for most customers burning heavy fuel oils • Large upfront investments and limited access to capital may forestall some conversions from oil to natural gas • Gas Customer Conversion Group has been formed
Slide 19: Cost Mitigation Strategy - Area Growth Approach
Cost Mitigation Strategy - Area Growth Approach Our area approach overcomes significant challenges of traditional infrastructure expansion Traditional • We connect customers on an individual basis • Revenues and costs of each customer are analyzed independently • Construction is scheduled individual
Slide 20: Annual Multi-Family and Commercial Oil-to-Gas Conversions by Oil Type
Con Edison of New York Annual Multi-Family* and Commercial Oil-to-Gas Conversions by Oil Type 2013 figures through March 31 Number of gas service installations 400 350 343** 313 300 250 199 #2 Oil 200 #4 Oil 152 150 #6 Oil 100 92 82** 88 66** 44 45 50 23 6** 0 2010 2011 2012 2013 YTD * Multi-family
Slide 21: Gas Pipelines around NYC
Gas Pipelines around NYC NEW JERSEY SPECTRA PIPELINE NEW YORK 21
Slide 22: Proceeding to Examine Barriers to Expanding Natural Gas Infrastructure
Proceeding to examine barriers and solutions to expanding natural gas infrastructure (12-G-0297) • Public Service Commission opened up a proceeding in November as a result of the NY Energy Highway Blueprint issued in October 2012 • Comments filed March 12th • 5 working groups formed to focus on: – C
Slide 23: 2013 Electric, Gas and Steam Rate Filings
Con Edison of New York 2013 Electric, Gas and Steam Rate Filings (13-E-0030, 13-G-0031, 13-S-0032) • Filed on January 25, 2013 • Historic test year: Twelve months ended June 30, 2012 • Forward test year: January 1, 2014 – December 31, 2014 • New rates in effect January 1, 2014 • Timeline for rate se
Slide 24: Storm Hardening Proposed Investment
Con Edison of New York Storm Hardening Proposed Investment Total Storm Hardening ($000) Forecast Forecast Forecast Forecast Total (4 years) 2013 2014 2015 2016 Electric Distribution 30,000 80,000 170,000 171,000 451,000 Transformer Purchase 10,000 5,000 6,000 4,200 25,200 Substations 30,000 60,000 7
Slide 25: Capital Expenditures
Capital Expenditures ($ millions) Con Edison of New York Orange and Rockland Competitive Energy Businesses $2,500 $2,291 $2,202 $2,057 $2,030 $2,077 $2,000 $1,866 $1,909 $1,778 $1,500 $1,000 $500 $492 $375 $120 $127 $135 $137 $140 $125 $111 $142 $4 $10 $28 $114 $95 $106 $0 2008 2009 2010 2011 2012 2
Slide 26: Features of New York Regulation
Features of New York Regulation • Forward-looking test year for expenses and rate base • True-ups for major expenses: – Fuel and power cost recovery – Pensions and Other Post-employment Benefits – Property taxes (partial) – Environmental clean-up costs – Interest on long-term borrowing • Revenue dec
Slide 27: Leader in Sustainability
Leader in Sustainability Consolidated Edison has been recognized recently through its inclusion in • 2012 Carbon Disclosure Project’s worldwide Leadership Index • 2012 Newsweek ’s 500 Green Rankings for environmental and social performance • Target Rock Sustainability’s Utility Leaders Index for 201
Slide 28: A Compelling Dividend Record: 39 Consecutive Years of Dividend Increases
A Compelling Dividend Record: 39 Consecutive Years of Dividend Increases Annualized Dividend 1975 - 2013 Dividend Payout Ratio 90% 80% 70% 60% 50% 40% 30% 20% 10% 0% 28
Slide 29: Consolidated Edison, Inc. Investment Thesis
Consolidated Edison, Inc. Investment Thesis • The largest of the few publicly-traded, T&D-focused utility companies – Limited commodity exposure • Reduced regulatory lag – Forward-looking test years – Timely recovery of most fuel and commodity costs – Revenue decoupling mechanism in NY (electric and