Consolidated Edison, Inc. · NYSE:ED
Consolidated Edison — Corporate Update (December 2019)
66 slides from Consolidated Edison's corporate update, December 2019
Slide 1: December 2019 Company Update
December 2019 Company Update
Slide 2: Available Information; Forward-Looking Statements
Available Information On November 4, 2019, Consolidated Edison, Inc. issued a press release reporting its third quarter 2019 earnings and filed with the Securities and Exchange Commission the company’s third quarter 2019 Form 10-Q. This presentation should be read together with, and is qualified in
Slide 3: Organizational Structure
Organizational Structure Market Cap(a): $31.4 billion Ratings(b): Baa1 / BBB+ / BBB+ Outlook(b): Stable / Stable / Stable Utilities Transmission Clean Energy (85% of assets) (3% of assets) (12% of assets) Con Edison Con Edison Consolidated Clean Energy Orange and Transmission, Edison Businesses, Roc
Slide 4: The Con Edison Plan
The Con Edison Plan Customer Focused Strategic Value Oriented Provide safe and Strengthen core utility Provide steady, reliable service delivery business predictable earnings Enhance the Pursue additional Maintain balance customer experience regulated growth sheet stability opportunities to add valu
Slide 5: Long-Range Plan – Complementary Business Mix
Long-Range Plan – Complementary Business Mix • Core utility business expected to continue to dominate the business mix • Investment in contracted renewables expected to complement utility growth • Transmission infrastructure investment opportunities expected to contribute to EPS 12-Month Trailing Ea
Slide 6: Summary of CECONY Electric & Gas Joint Proposal
Summary of CECONY Electric & Gas Joint Proposal On October 18, 2019, CECONY, New York State Department of Public Service (NYSDPS) staff and other parties entered into a Joint Proposal, which is subject to New York State Public Service Commission (NYSPSC) approval, for electric and gas delivery servi
Slide 7: Summary of CECONY Electric & Gas Joint Proposal
Summary of CECONY Electric & Gas Joint Proposal • Electric and gas capital investment of $6.2 billion and $3.1 billion over three years, respectively • 10-year recovery of and earned return on clean energy transition project costs ‒ Energy efficiency ‒ Demonstration projects ‒ Non-wire alternatives
Slide 8: CECONY Electric & Gas Joint Proposal – Capital Investment
CECONY Electric & Gas Joint Proposal – Capital Investment Electric capital investment includes: • $3,400 million investment in reliability and system expansion • $222 million investment in grid innovation • $75 million investment in storm hardening for Westchester overhead distribution Gas capital i
Slide 9: Determinants of Proposed 2020 Electric Rate Increase
CECONY Electric & Gas Joint Proposal Determinants of Proposed 2020 Electric Rate Increase 9
Slide 10: Determinants of Proposed 2020 Gas Rate Increase
CECONY Electric & Gas Joint Proposal Determinants of Proposed 2020 Gas Rate Increase 10
Slide 11: CECONY Electric Rate Case – Comparison of Filings
CECONY Electric Rate Case – Comparison of Filings ($ millions) NYSDPS Joint Electric case number 19-E-0065 CECONY Staff CECONY Proposal Jan 2019 April 2019 May 2019 June 2019 October Rate Year (Jan 2020 – Dec 2020) Filing Update Staff Filing Rebuttal 2019 JP New infrastructure investment $271 $244 $
Slide 12: CECONY Gas Rate Case – Comparison of Filings
CECONY Gas Rate Case – Comparison of Filings ($ millions) NYSDPS Joint Gas case number 19-G-0066 CECONY Staff CECONY Proposal Jan 2019 April 2019 May 2019 June 2019 October Rate Year (Jan 2020 – Dec 2020) Filing Update Staff Filing Rebuttal 2019 JP New infrastructure investment $147 $149 $142 $154 $
Slide 13: Joint Proposal – Comparison of Rate Changes
CECONY Electric & Gas Joint Proposal – Comparison of Rate Changes ($ millions) 13
Slide 14: Impact of Changes to Proposed Rate Base and ROE
CECONY Electric & Gas Joint Proposal – Impact of Changes to Proposed Rate Base and ROE CECONY Joint Proposal Rate Base vs January 2019 Filing Rate Base Jan 2019 Oct 2019 Joint Filing Average Proposal Average Equity Net Income ($ in millions) Rate Base Rate Base Difference Ratio ROE Impact Rate Year
Slide 15: Utilities’ Rate Adjustments for Tax Cuts and Jobs Act (CECONY)
Utilities’ Rate Adjustments for Tax Cuts and Jobs Act of 2017 (TCJA)(a) New York State Public Service Commission Order in Case 17-M-0815 – Proceeding on Motion of the Commission on Changes in Law that May Affect Rates (August 9, 2018) CECONY Electric • Pursuant to the October 2019 joint proposal (Ca
Slide 16: Utilities’ Rate Adjustments for Tax Cuts and Jobs Act (O&R, RECO)
Utilities’ Rate Adjustments for Tax Cuts and Jobs Act of 2017 (TCJA)(a) New York State Public Service Commission Order in Case 17-M-0815 – Proceeding on Motion of the Commission on Changes in Law that May Affect Rates (August 9, 2018) O&R Electric and Gas • O&R, pursuant to the November 2018 joint p
Slide 17: Joint Proposal Includes Electrification of Transportation
CECONY Joint Proposal Includes Electrification of Transportation Electric vehicle infrastructure and customer incentives pave the way for electric vehicle ownership in our service territory • Joint Proposal includes electric vehicle programs ‒ $30 million program to provide interconnection for new p
Slide 18: Earnings Adjustment Mechanisms Promote Energy Efficiency and Clean Technologies
CECONY Earnings Adjustment Mechanisms Promote Energy Efficiency and Clean Technologies Earned Adjustment Mechanism Description Goal Reduce unit costs for energy efficiency (“EE”) Share the Savings Lifetime MMBtu savings unit cost reductions portfolio by reducing the unit cost of lifetime energy Elec
Slide 19: Positive Incentives Promote Safety and Customer Service
CECONY Positive Incentives Promote Safety and Customer Service Positive Incentive Description Goal Residential Meet targets for residential service Electric / Gas Service Targets for residential service terminations, bad debt write-offs and Termination / terminations, bad debt write-offs and arrears
Slide 20: CECONY Earnings Adjustment Mechanisms and Positive Incentives
CECONY Earnings Adjustment Mechanisms and Positive Incentives Joint Proposal includes potential additional return on equity for each rate year of up to 48 basis points for CECONY electric and 42 basis points for CECONY gas based on proposed annual rate base for each service Earnings Adjustment Mecha
Slide 21: O&R Earnings Adjustment Mechanisms and Positive Incentives
O&R Earnings Adjustment Mechanisms and Positive Incentives The O&R Rate Plan includes potential additional return on equity of up to 57.5 basis points for 2019 and 62.5 basis points each in 2020 and 2021 for O&R electric and 42 basis points for each rate year for O&R gas based on the annual rate bas
Slide 22: CECONY Commitment to Climate Resilience Planning
CECONY Commitment to Climate Resilience Planning The Joint Proposal outlines actions to assess consequences of climate change • Install weather data sensors and river and soil temperature sensors in our service territory by April 30, 2020 for the purpose of collecting and analyzing data • Complete a
Slide 23: Ambitious New York State Environmental Goals
Ambitious New York State Environmental Goals New York State clean energy initiatives create a path to carbon neutrality New York State Climate Leadership and Community Protection Act (CLCPA) was signed into law on July 18, 2019 • 70% renewable electricity by 2030 • 100% carbon-free power by 2040 • 4
Slide 24: New York State Environmental Goals Include Energy Efficiency
New York State Environmental Goals Include Energy Efficiency New York State energy efficiency goals aim to reduce greenhouse gas emissions, decrease customer energy costs and create job opportunities New Efficiency: New York Order (Case 18-M-0084) • The New Efficiency: New York Order is a collaborat
Slide 25: CECONY Energy Efficiency Programs Lower Customer Bills
CECONY Energy Efficiency Programs Lower Customer Bills Proposed energy efficiency spending aligns with goals of New Efficiency: New York initiative CECONY Electric & Gas Energy Efficiency Budgets ($ in millions) Electric Gas Approved Proposed* *2020-2022 amounts subject to the New Efficiency: New Yo
Slide 26: CECONY Energy Efficiency Also Contributes to Cleaner Air
CECONY Energy Efficiency Also Contributes to Cleaner Air by Lowering Emissions 2.7 million metric tons of carbon dioxide equivalent expected to be avoided by CECONY customers from 2019 to 2022 energy efficiency efforts CECONY Electric Energy CECONY Gas Energy Efficiency Targets (MWh) Efficiency Targ
Slide 27: O&R Energy Efficiency Programs Lower Customer Bills
O&R Energy Efficiency Programs Lower Customer Bills Proposed energy efficiency spending aligns with goals of New Efficiency: New York initiative O&R Electric & Gas Energy Efficiency Budgets ($ in millions) Electric Gas Approved Proposed* *2022 amounts subject to the New Efficiency: New York Order, C
Slide 28: O&R Energy Efficiency Also Contributes to Cleaner Air
O&R Energy Efficiency Also Contributes to Cleaner Air by Lowering Emissions O&R Electric Energy Efficiency O&R Gas Energy Efficiency Targets (MWh) Targets (Dth) 71,977 60,323 60,561 49,557 43,400 26,860 26,860 26,860 21,447 21,447 16,323 16,323 2017 2018 2019 2020 2021 2022E 2017 2018 2019 2020 2021
Slide 29: CEB Utility-Scale Renewable Energy Production Projects
CEB Utility-Scale Renewable Energy Production Projects Geography (MW) Solar PV Asset Ownership (GW) Source: Company information and IHS EER (as of year-end 2018). Off-Takers (MW) Portfolio Mix (MW) Wind 15% Solar 85% Source: Pie charts based on Company information as of September 30, 2019. 29
Slide 30: Con Edison Transmission
Con Edison Transmission • Proposed $600 million NY Energy Solution project approved in April 2019 with target year-end 2023 in-service date (excludes electrical interconnection costs) • 10% allowed return on common equity and actual common equity ratio up to 53% for NY Transco’s $214 million existin
Slide 31: CECONY Operations and Maintenance Expenses
CECONY Operations and Maintenance Expenses ($ in millions) Departmental Other Expenses(a) Other Regulatory Fees and $250 YTD Assessments (b) $1,190 YTD Health Care/ Other Employee $356 YTD Benefits Pension/ OPEBs $126 YTD $100 YTD (c) (c) (c) (c) a. Other Expenses generally are either reconciled thr
Slide 32: Composition of Regulatory Rate Base
Composition of Regulatory Rate Base(a) (as of September 30, 2019) CECONY ($ in millions) Electric NY $20,948 Gas NY 6,177 Steam NY 1,442 Total CECONY $28,567 O&R ($ in millions) O&R Electric NY $825 O&R Gas NY 442 RECO NJ 249 Total O&R $1,516 Total Rate Base $30,083 a. Average rate base for 12 month
Slide 33: Average Rate Base Balances
Average Rate Base Balances $33,872 $31,930 $30,211 $28,515 $25,014 $26,014 $23,795 $24,522 O&R CECONY Actual Forecast ($ in millions) 2014 2015 2016 2017 2018 2019E 2020E (a) 2021E(a) Electric $ 17,403 $ 17,599 $ 17,971 $ 18,513 $ 20,057 $ 20,845 $ 21,660 $ 22,783 CECONY Gas 3,593 4,023 4,267 4,723
Slide 34: Regulated Utilities' Rates of Return and Equity Ratios
Regulated Utilities' Rates of Return and Equity Ratios (12 Months ended September 30, 2019) Regulated Basis Allowed Actual CECONY Electric 9.0% 9.0% Gas 9.0 8.8 Steam 9.3 10.5 Overall – CECONY 9.0(a) 9.0 CECONY Equity Ratio 48.0% 47.5% O&R Electric 9.0% 10.2% Gas 9.0 6.8 RECO 9.6 5.0 Overall – O&R 9
Slide 35: Capital Expenditures
Capital Expenditures ($ in millions) (a) (b) (c) (c) Actual Forecast a. 2016 includes Stagecoach JV investment of $974 million. b. 2018 includes Con Edison Development subsidiary’s purchase of Sempra Solar Holdings, LLC. c. Amounts reflect the CECONY Joint Proposal 35
Slide 36: Utilities' Capital Expenditures
Utilities' Capital Expenditures Steam Gas Electric (a) (a) Actual Forecast ($ in millions) Annual CECONY Capital Expenditures Annual O&R Capital Expenditures Electric Gas Steam Depreciation Electric Gas Depreciation 2014 1,500 549 83 991 105 37 61 2015 1,658 671 106 1,040 114 46 68 2016 1,819 811 12
Slide 37: Financing Activity to Date and Debt Maturities
Financing Activity to Date and Debt Maturities Equity Financing • In March, CEI issued approximately 5.6 million common shares for $425 million upon settlement of the remaining portion of the November 2018 equity forward transaction • In June, CEI issued 4.75 million common shares for $400 million u
Slide 38: Capital Structure – September 30, 2019
Capital Structure – September 30, 2019 ($ in millions) Consolidated Edison, Inc. Baa1 / BBB+ / BBB+ Debt $ 19,451 52% Equity 18,134 48 Total $ 37,585 100% CECONY O&R Parent and Other A3 / A- / A- Baa1 / A- / A- Debt $ 14,374 51% Debt $ 754 49% Debt $ 4,323 57% Equity 14,079 49 Equity 771 51 Equity 3
Slide 39: Commercial Paper and Letters of Credit
Commercial Paper and Letters of Credit ($ in millions) 39
Slide 40: Dividend Growth for Shareholders
Dividend Growth for Shareholders • 45 consecutive years of dividend increases • Accelerated growth over past five years • Target dividend payout range: 60 – 70% of adjusted earnings 5-year CAGR (2015-2019) 3.3% 5-year CAGR (2010-2014) 1.3% $2.96* $2.86 $2.76 $2.68 $2.60 $2.46 $2.52 $2.38 $2.40 $2.42
Slide 41: 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 – $56 billion asset base • Steady earnings, growing dividend – 45 consecutive years of dividend growth • Attractive capex opportunities – Three-year infrastr
Slide 42: Appendix
APPENDIX ED (} conEdison, inc. NYSE
Slide 43: Trailing 12 Months Ended September 30, 2019
Trailing 12 Months Ended September 30, 2019 CECONY O&R CEBs CET Other(d) Total Reported EPS – GAAP basis $3.71 $0.20 $0.21 $0.16 $(0.03) $4.25 HLBV effects of the Clean Energy Businesses (pre-tax) — — 0.25 — — 0.25 Income taxes (a) — — (0.07) — — (0.07) HLBV effects of the Clean Energy Businesses (n
Slide 44: Operational Excellence: Reliability is What Our Customers Demand
Operational Excellence: Reliability is What Our Customers Demand 99.993%* CECONY provides the best electric system reliability in the U.S. *Overall (network and non-network) System Availability Index for 2019 year to date through August Link to Con Edison Sustainability Report: https://www.conedison
Slide 45: Dividend and Earnings Announcements
Dividend and Earnings Announcements • On October 17, 2019, the company issued a press release reporting that the company had declared a quarterly dividend of 74 cents a share on its common stock. • On November 4, 2019, the company issued a press release forecasting its adjusted earnings per share fo
Slide 46: 3Q 2019 Earnings
3Q 2019 Earnings Net Income for Earnings per Share Common Stock ($ in Millions) 2019 2018 2019 2018 Reported Net Income for Common Stock and EPS – GAAP basis $1.42 $1.40 $473 $435 HLBV effects of the Clean Energy Businesses (pre-tax) 0.10 — 30 — Income taxes (a) (0.03) — (7) — HLBV effects of the Cl
Slide 47: Walk from 3Q 2018 EPS to 3Q 2019 EPS
Walk from 3Q 2018 EPS to 3Q 2019 EPS Variance in Reported EPS (GAAP) Variance in Adjusted EPS (Non-GAAP) $1.57 $0.01 $1.54 $0.09 $1.40 $0.18 $1.42 $(0.13) $(0.13) $(0.03) $0.00 $0 $0.00 $0 (a) (a) a. Includes parent company and consolidation adjustments. 47
Slide 48: 3Q 2019 vs. 3Q 2018 EPS Variances
3Q 2019 vs. 3Q 2018 EPS Variances – Three Months Ended Variation CECONY(a) Changes in rate plans $ 0.11 Reflects higher electric and gas net base revenues of $0.19 a share and $0.01 a share, respectively, due primarily to electric and gas base rates increases in January 2019 under the company's rate
Slide 49: 3Q 2019 vs. 3Q 2018 EPS Reconciliation by Company
3Q 2019 vs. 3Q 2018 EPS Reconciliation by Company Three Months Ended September 30, 2019 CECONY O&R CEBs CET Other(c) Total Reported EPS – GAAP basis $1.25 $0.07 $0.07 $0.04 $(0.01) $1.42 HLBV effects of the Clean Energy Businesses (pre-tax) — — 0.10 — — 0.10 Income taxes (a) — — (0.03) — — (0.03) HL
Slide 50: 3Q 2019 Developments
3Q 2019 Developments(a) CECONY & O&R • In October 2019, CECONY, the staff of the New York State Public Service Commission (NYSPSC) and other parties entered into a Joint Proposal for CECONY electric and gas rate plans for the three-year period January 2020 through December 2022 reflecting an 8.8 per
Slide 51: 3Q 2019 Developments
3Q 2019 Developments(a) Clean Energy Businesses • The Clean Energy Businesses have 2,634 MW (AC) of utility-scale renewable energy production projects in service (2,616 MW) or in construction (18 MW) and 54 MW (AC) of behind-the-meter renewable energy production projects in service (46 MW) or in con
Slide 52: YTD 2019 Earnings
YTD 2019 Earnings Net Income for Earnings per Share Common Stock ($ in Millions) 2019 2018 2019 2018 Reported Net Income for Common Stock and EPS – GAAP basis $3.20 $3.38 $1,048 $1,051 HLBV effects of the Clean Energy Businesses (pre-tax) 0.25 — 79 — Income taxes (a) (0.07) — (19) — HLBV effects of
Slide 53: Walk from YTD 2018 EPS to YTD 2019 EPS
Walk from YTD 2018 EPS to YTD 2019 EPS Variance in Reported EPS (GAAP) Variance in Adjusted EPS (Non-GAAP) $3.56 $0.02 $3.51 $3.38 $0.01 $0.05 $0.01 $0.19 $3.20 $(0.13) $(0.13) $(0.25) $0.00 $0.00 (a) (a) a. Includes parent company and consolidation adjustments. 53
Slide 54: YTD 2019 vs. YTD 2018 EPS Variances
YTD 2019 vs. YTD 2018 EPS Variances – Nine Months Ended Variation CECONY(a) Changes in rate plans $ 0.59 Reflects higher electric and gas net base revenues of $0.42 a share and $0.12 a share, respectively, due primarily to electric and gas base rates increases in January 2019 under the company's rat
Slide 55: YTD 2019 vs. YTD 2018 EPS Reconciliation by Company
YTD 2019 vs. YTD 2018 EPS Reconciliation by Company Nine months ended September 30, 2019 CECONY O&R CEBs CET Other(c) Total Reported EPS – GAAP basis $2.99 $0.18 $(0.06) $0.11 $(0.02) $3.20 HLBV effects of the Clean Energy Businesses (pre-tax) — — 0.25 — — 0.25 Income taxes (a) — — (0.07) — — (0.07)
Slide 56: Five-Year Reconciliation of Reported EPS to Adjusted EPS
Five-Year Reconciliation of Reported EPS (GAAP) to Adjusted EPS (Non-GAAP) 12 Months Ending December 31, 2015 2016 2017 2018(d) 2019(a)(d) Reported EPS – GAAP basis $4.07 $4.15 $4.97 $4.43 $4.25 Income tax effect of the TCJA — — (0.85) 0.14 — HLBV effects of the Clean Energy Businesses (pre-tax) — —
Slide 57: Utilities' Sales and Revenues – Third Quarter and Year-to-Date
Utilities' Sales and Revenues – Third Quarter and Year-to-Date The changes in the energy delivered by the company’s utility subsidiaries, both for actual amounts and as adjusted for variations in weather and billing days, for the three and nine months ended September 30, 2019 (expressed as a percent
Slide 58: Utilities' Sales and Revenues – Electric Third Quarter
Utilities' Sales and Revenues – Electric Third Quarter ($ in millions) Electric – 3rd Quarter Millions of Kilowatt-hours Revenues in Millions 2019 2018 2019 2018 Con Edison of New York Residential and Religious 3,687 3,777 $923 $988 Commercial and Industrial 2,831 2,706 557 542 Retail choice custome
Slide 59: Utilities' Sales and Revenues – Electric Year-to-Date
Utilities' Sales and Revenues – Electric Year-to-Date ($ in millions) Electric – Year-to-Date Millions of Kilowatt-hours Revenues in Millions 2019 2018 2019 2018 Con Edison of New York Residential and Religious 8,203 8,374 $2,060 $2,211 Commercial and Industrial 7,574 7,343 1,405 1,433 Retail choice
Slide 60: Utilities' Sales and Revenues – Gas Third Quarter
Utilities' Sales and Revenues – Gas Third Quarter ($ in millions) Gas – 3rd Quarter Thousands of Dekatherms Revenues in Millions 2019 2018 2019 2018 Con Edison of New York Residential 4,032 4,469 $103 $118 General 4,097 4,191 45 54 Firm Transportation 9,071 9,211 71 71 Total Firm Sales and Transport
Slide 61: Utilities' Sales and Revenues – Gas Year-to-Date
Utilities' Sales and Revenues – Gas Year-to-Date ($ in millions) Gas – Year-to-Date Thousands of Dekatherms Revenues in Millions 2019 2018 2019 2018 Con Edison of New York Residential 41,035 43,731 $724 $728 General 25,018 25,894 299 298 Firm Transportation 60,590 61,628 444 448 Total Firm Sales and
Slide 62: Utilities' Sales and Revenues – Steam
Utilities' Sales and Revenues – Steam Third Quarter and Year-to-Date ($ in millions) Steam – 3rd Quarter Millions of Pounds Revenues in Millions 2019 2018 2019 2018 Con Edison of New York General 6 12 $2 $2 Apartment House 722 781 13 16 Annual Power 2,443 2,711 36 45 Total Sales 3,171 3,504 $51 $63
Slide 63: Income Statement – 2019 Third Quarter
Income Statement – 2019 Third Quarter ($ in millions) CECONY O&R CEBs CET Other(a) Total Total operating revenues $2,877 $241 $247 $1 $(1) $3,365 Depreciation and amortization 346 22 53 — — 421 Other operating expenses 1,808 173 94 2 — 2,077 Total operating expenses 2,154 195 147 2 — 2,498 Operating
Slide 64: Income Statement – 2019 Year-to-Date
Income Statement – 2019 Year-to-Date ($ in millions) CECONY O&R CEBs CET Other(a) Total Total operating revenues $8,248 $678 $696 $3 $(2) $9,623 Depreciation and amortization 1,020 63 169 1 — 1,253 Other operating expenses 5,403 502 344 7 3 6,259 Total operating expenses 6,423 565 513 8 3 7,512 Oper
Slide 65: Balance Sheet – As of September 30, 2019
Balance Sheet – As of September 30, 2019 ($ in millions) CECONY O&R CEBs CET Other(a) Total ASSETS Current assets $3,005 $255 $458 $— $(137) $3,581 Investments 436 26 — 1,528 (7) 1,983 Net plant 36,885 2,299 4,033 17 — 43,234 Other noncurrent assets 4,482 355 1,885 14 406 7,142 Total assets $44,808
Slide 66: Statement of Cash Flows – 2019 Year-to-Date
Statement of Cash Flows – 2019 Year-to-Date ($ in millions) CECONY O&R CEBs CET Other(a) Total Net cash flows from/(used in) operating activities $1,490 $168 $285 $150 $(133) $1,960 Net cash flows from/(used in) investing activities (2,437) (163) (142) (143) 1 (2,884) Net cash flows from/(used in) f
Consolidated Edison — Corporate Update (December 2019) on 6ix