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ed-20201231

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

___________________________________________________

FORM 10-K

___________________________________________________

☒ Annual Report Pursuant To Section 13 or 15(d) of the Securities Exchange Act of 1934

FOR THE FISCAL YEAR ENDED DECEMBER 31, 2020

OR

☐ Transition Report Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934

For the transition period from to

___________________________________________________

Commission File Number 1-14514

Consolidated Edison, Inc.

Exact name of registrant as specified in its charter

and principal office address and telephone number

State of Incorporation I.R.S. EmployerID. Number

4 Irving Place,

___________________________________________________

Commission File Number 1-1217

Consolidated Edison Company of New York, Inc.

Exact name of registrant as specified in its charter

and principal office address and telephone number

State of Incorporation I.R.S. EmployerID. Number

4 Irving Place,

___________________________________________________

CON EDISON ANNUAL REPORT 2020 1

Securities Registered Pursuant to Section 12(b) of the Act:

Title of each class Trading Symbol Name of each exchangeon which registered

Consolidated Edison, Inc., ED New York Stock Exchange

Common Shares ($.10 par value)

Securities Registered Pursuant to Section 12(g) of the Act: None

Indicate by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act.

Consolidated Edison, Inc. (Con Edison) Yes x No ̈

Consolidated Edison Company of New York, Inc. (CECONY) Yes x No ̈

Indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or Section 15(d) of the Act.

Con Edison Yes ̈ No x

CECONY Yes ̈ No x

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.

Con Edison Yes x No ̈

CECONY Yes x No ̈

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files).

Con Edison Yes x No ̈

CECONY Yes x No ̈

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer”, “accelerated filer,” “smaller reporting company,” and "emerging growth company" in Rule 12b-2 of the Exchange Act.

Con Edison

Large accelerated filer ☒ Accelerated filer ☐ Non-accelerated filer ☐

Smaller reporting company ☐ Emerging growth company ☐

CECONY

Large accelerated filer ☐ Accelerated filer ☐ Non-accelerated Filer ☒

Smaller reporting company ☐ Emerging growth company ☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ̈

Indicate by check mark whether the registrant has filed a report on and attestation to its management’s assessment of the effectiveness of its internal control over financial reporting under Section 404(b) of the Sarbanes-Oxley Act (15 U.S.C. 7262(b)) by the registered public accounting firm that prepared or issued its audit report. ☒

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Act).

Con Edison Yes ☐ No x

CECONY Yes ☐ No x

The aggregate market value of the common equity of Con Edison held by non-affiliates of Con Edison, as of June 30, 2020, was approximately $24.0 billion.

As of January 31, 2021, Con Edison had outstanding 342,419,162 Common Shares ($.10 par value).

2 CON EDISON ANNUAL REPORT 2020

All of the outstanding common equity of CECONY is held by Con Edison.

Documents Incorporated By Reference

Portions of Con Edison’s definitive proxy statement for its Annual Meeting of Stockholders to be held on May 17, 2021, to be filed with the Commission pursuant to Regulation 14A, not later than 120 days after December 31, 2020, is incorporated in Part III of this report.

Filing Format

This Annual Report on Form 10-K is a combined report being filed separately by two different registrants: Consolidated Edison, Inc. (Con Edison) and Consolidated Edison Company of New York, Inc. (CECONY). CECONY is a wholly-owned subsidiary of Con Edison and, as such, the information in this report about CECONY also applies to Con Edison. CECONY meets the conditions set forth in General Instruction (I)(1)(a) and (b) of Form 10-K and is therefore filing this Form 10-K with the reduced disclosure format.

As used in this report, the term the “Companies” refers to Con Edison and CECONY. However, CECONY makes no representation as to the information contained in this report relating to Con Edison or the subsidiaries of Con Edison other than itself.

CON EDISON ANNUAL REPORT 2020 3

Glossary of Terms

The following is a glossary of abbreviations or acronyms that are used in the Companies’ SEC reports:

Con Edison Companies

Con Edison Consolidated Edison, Inc.

CECONY Consolidated Edison Company of New York, Inc.

CET Electric Consolidated Edison Transmission, LLC

CET Gas Con Edison Gas Pipeline and Storage, LLC

O&R Orange and Rockland Utilities, Inc.

RECO Rockland Electric Company

The Companies Con Edison and CECONY

The Utilities CECONY and O&R

Regulatory Agencies, Government Agencies and Other Organizations

EPA U.S. Environmental Protection Agency

FASB Financial Accounting Standards Board

FERC Federal Energy Regulatory Commission

IASB International Accounting Standards Board

IRS Internal Revenue Service

NJBPU New Jersey Board of Public Utilities

NJDEP New Jersey Department of Environmental Protection

NYISO New York Independent System Operator

NYPA New York Power Authority

NYSDEC New York State Department of Environmental Conservation

NYSERDA New York State Energy Research and Development Authority

NYSPSC New York State Public Service Commission

NYSRC New York State Reliability Council, LLC

PJM PJM Interconnection LLC

SEC U.S. Securities and Exchange Commission

Accounting

AFUDC Allowance for funds used during construction

ASU Accounting Standards Update

GAAP Generally Accepted Accounting Principles in the United States of America

HLBV Hypothetical Liquidation at Book Value

OCI Other Comprehensive Income

VIE Variable Interest Entity

4 CON EDISON ANNUAL REPORT 2020

Environmental

CO2 Carbon dioxide

GHG Greenhouse gases

MGP Sites Manufactured gas plant sites

PCBs Polychlorinated biphenyls

PRP Potentially responsible party

RGGI Regional Greenhouse Gas Initiative

Units of Measure

AC Alternating current

Bcf Billion cubic feet

Dt Dekatherms

kV Kilovolt

kWh Kilowatt-hour

MDt Thousand dekatherms

Mlb Thousands of pounds

MMlb Million pounds

MVA Megavolt ampere

MW Megawatt or thousand kilowatts

MWh Megawatt hour

Other

AMI Advanced Metering Infrastructure

CLCPA Climate Leadership and Community Protection Act

COSO Committee of Sponsoring Organizations of the Treadway Commission

COVID-19 Coronavirus Disease 2019

DER Distributed energy resources

Fitch Fitch Ratings

LTIP Long Term Incentive Plan

Moody’s Moody’s Investors Service

REV Reforming the Energy Vision

S&P S&P Global Ratings

TCJA The federal Tax Cuts and Jobs Act of 2017, as enacted on December 22, 2017

VaR Value-at-Risk

CON EDISON ANNUAL REPORT 2020 5

TABLE OF CONTENTS

PAGE

Introduction 7

Available Information 11

Forward-Looking Statements 11

Non-GAAP Financial Measures 11

Part I

Item 1: Business 16

Item 1A: Risk Factors 45

Item 1B: Unresolved Staff Comments 49

Item 2: Properties 49

Item 3: Legal Proceedings 50

Item 4: Mine Safety Disclosures 50

Information about our Executive Officers 51

Part II

Item 6: Selected Financial Data 53

Item 7A: Quantitative and Qualitative Disclosures about Market Risk 92

Item 8: Financial Statements and Supplementary Data 93

Item 9A: Controls and Procedures 191

Item 9B: Other Information 191

Part III

Item 10: Directors, Executive Officers and Corporate Governance 192

Item 11: Executive Compensation 192

Item 14: Principal Accounting Fees and Services 192

Part IV

Item 15: Exhibits and Financial Statement Schedules 194

6 CON EDISON ANNUAL REPORT 2020

Introduction

This introduction contains certain information about Con Edison and its subsidiaries, including CECONY. This introduction is not a summary and should be read together with, and is qualified in its entirety by reference to, the more detailed information appearing elsewhere or incorporated by reference in this report.

Con Edison’s mission is to provide energy services to our customers safely, reliably, efficiently and in keeping with our vision for a clean energy future; to provide a workplace that embraces diversity and inclusion and allows employees to realize their full potential; to provide a fair return to our investors; and to improve the quality of life in the communities we serve. The company has ongoing programs designed to support each component of its mission, including initiatives focused on safety, operational excellence and the customer experience.

Con Edison is a holding company that owns:

•Consolidated Edison Company of New York, Inc. (CECONY), which provides electric service and gas service in New York City and Westchester County and steam service in parts of Manhattan;

•Orange & Rockland Utilities, Inc., which along with its utility subsidiary, Rockland Electric Company (together referred to herein as O&R), provides electric service in southeastern New York and northern New Jersey and gas service in southeastern New York (O&R, together with CECONY referred to as the Utilities);

•Con Edison Clean Energy Businesses, Inc., which through its subsidiaries, develops, owns and operates renewable and sustainable energy infrastructure projects and provides energy-related products and services to wholesale and retail customers (Con Edison Clean Energy Businesses, Inc., together with its subsidiaries referred to as the Clean Energy Businesses); and

•Con Edison Transmission, Inc., which through its subsidiaries, invests in electric transmission facilities and holds investments in gas pipeline and storage facilities (Con Edison Transmission, Inc., together with its subsidiaries referred to as Con Edison Transmission).

Con Edison anticipates that the Utilities, which are subject to extensive regulation, will continue to provide substantially all of its earnings over the next few years. The Utilities have approved rate plans that are generally designed to cover each company’s cost of service, including capital and other costs of each company’s energy delivery systems. The Utilities recover from their full-service customers (who purchase energy from them), generally on a current basis, the cost the Utilities pay for energy and charge all of their customers the cost of delivery service. See "Utility Regulation" in Item 1, "Risk Factors" in Item 1A and "Rate Plans" in Note B to the financial statements in Item 8.

Selected Financial Data

Con Edison

For the Year Ended December 31,

(a)Reflects a $2,384 million increase in net plant, offset by decreases in regulatory assets resulting from the enactment of the federal Tax Cuts and Jobs Act of 2017, as enacted on December 22, 2017 (TCJA) of $2,418 million (including the netting of $1,168 million against the regulatory liability for future income tax) and unrecognized pension and other postretirement costs of $348 million. See Notes B, E, F and L to the financial statements in Item 8.

CON EDISON ANNUAL REPORT 2020 7

(b)Reflects a $4,149 million increase in net plant, offset by a $288 million decrease in regulatory assets for unrecognized pension and other postretirement costs. See Notes B, E, and F to the financial statements in Item 8.

(c)Reflects a $2,140 million increase in net plant and a $303 increase in regulatory assets for unrecognized pension and other postretirement costs. See Notes B, E, and F to the financial statements in Item 8.

(d)Reflects a $2,666 million increase in net plant and a $700 million increase in regulatory assets for unrecognized pension and other postretirement costs. See Notes B, E, and F to the financial statements in Item 8.

(e)In 2017, upon enactment of the TCJA, Con Edison re-measured its deferred tax assets and liabilities based upon the 21 percent corporate income tax rate under the TCJA. As a result, Con Edison decreased its net deferred tax liabilities by $5,312 million, recognized $259 million (or $0.85 per share) in net income, decreased its regulatory asset for future income tax by $1,250 million, decreased its regulatory asset for revenue taxes by $90 million, and accrued a regulatory liability for federal income tax rate change of $3,713 million. In 2018, Con Edison recognized $42 million of income tax expense resulting from a re-measurement of its deferred tax assets and liabilities following the issuance of proposed TCJA regulations. See “Other Regulatory Matters” in Note B and Note L to the financial statements in Item 8.

(f)Excludes the non-service components of pension and other postretirement benefits. See Notes E and F to the financial statements in Item 8.

CECONY

For the Year Ended December 31,

(a)Reflects a $2,090 million increase in net plant, offset by decreases in regulatory assets resulting from the enactment of the TCJA of $2,305 million (including the netting of $1,123 million against the regulatory liability for future income tax) and unrecognized pension and other postretirement costs of $354 million. See Notes B, E and F to the financial statements in Item 8.

(b)Reflects a $2,165 million increase in net plant and a $265 million decrease in regulatory assets for unrecognized pension and other postretirement costs. See Notes B, E and F to the financial statements in Item 8.

(c)Reflects a $2,040 million increase in net plant and a $292 million increase in regulatory assets for unrecognized pension and other postretirement costs. See Notes B, E and F to the financial statements in Item 8.

(d)Reflects a $2,140 million increase in net plant and a $662 million increase in regulatory assets for unrecognized pension and other postretirement costs. See Notes B, E and F to the financial statements in Item 8.

(e)Excludes the non-service components of pension and other postretirement benefits. See Notes E and F to the financial statements in Item 8.

Significant Developments and Outlook

•Con Edison reported 2020 net income of $1,101 million or $3.29 a share compared with $1,343 million or $4.09 a share in 2019. Adjusted earnings were $1,399 million or $4.18 a share in 2020 compared with $1,438 million or $4.38 a share in 2019. See “Results of Operations” in Item 7 and “Non-GAAP Financial Measures” below.

•In 2020, the Utilities invested $3,466 million to upgrade and reinforce their energy delivery systems, the Clean Energy Businesses invested $616 million in renewable electric production projects and Con Edison Transmission invested $3 million primarily in the electric transmission business. For 2021, 2022 and 2023 the Utilities expect to invest $3,721 million, $3,478 million and $3,724 million, respectively, for their energy delivery systems, the Clean Energy Businesses expect to invest $250 million, $400 million and $400 million, respectively, in renewable electric production projects and Con Edison Transmission expects to invest $47 million, $65 million and $47 million, respectively, primarily in the electric transmission business. See "Capital Requirements and Resources - Capital Requirements" in Item 1.

•Con Edison plans to meet its capital requirements for 2021 through 2023, through internally-generated funds and the issuance of long-term debt and common equity. See “Capital Requirements and Resources - Capital Requirements” in Item 1. The company's plans include the issuance of between $1,900 million and $2,600 million of long-term debt, including for maturing securities, primarily at the Utilities, in 2021 and approximately $1,400 million in aggregate of long-term debt at the Utilities during 2022 and 2023. The planned debt issuance is in addition to the issuance of long-term debt secured by the Clean Energy Businesses’ renewable electric production projects. The company's plans also include the issuance of up to $800 million of common equity in 2021 and approximately $700 million in aggregate of common equity during 2022 and 2023, in addition to equity under its dividend reinvestment, employee stock purchase and long-term incentive plans.

8 CON EDISON ANNUAL REPORT 2020

•CECONY forecasts average annual growth in peak demand in its service area at design conditions over the next five years for electricity and gas to be approximately 0.8 percent and 1.4 percent, respectively, and an average annual decrease in steam peak demand in its service area at design conditions over the next five years to be approximately 0.4 percent. O&R forecasts an average annual decrease in electric peak demand in its service area at design conditions over the next five years to be approximately 0.5 percent and average annual growth in gas peak demand in its service area over the next five years at design conditions to be approximately 0.2 percent. See “The Utilities” in Item 1.

•CECONY established a gas moratorium in March 2019 on new gas service in most of Westchester County. CECONY filed a gas planning analysis with the NYSPSC in July 2020 stating the moratorium could be lifted when increased pipeline capacity is achieved or peak demand is reduced to a level that would enable the company to lift the moratorium and that it is monitoring gas supply constraint in the New York City portion of its service territory. See "The Utilities" in Item 1.

•In 2020, due to the COVID-19 pandemic, the Utilities began suspending service disconnections, certain collection notices, final bill collection agency activity, new late payment charges and certain other fees for all customers and the State of New York enacted a law prohibiting New York utilities, including CECONY and O&R, from disconnecting residential customers during the COVID-19 state of emergency. For the year ended 2020, the reserve increases to the allowance for uncollectible accounts associated with the COVID-19 pandemic for CECONY electric and gas operations and O&R electric operations were $73 million and $2 million, respectively, and were deferred pursuant to the legislative, regulatory and related actions provisions of the rate plans as a result of the New York State on "PAUSE" and related executive orders. See "COVID-19 Regulatory Matters" in Note B to the financial statements in Item 8.

•In November 2020, the New York State Public Service Commission (NYSPSC) issued two separate show cause orders in its proceedings investigating: (1) the New York utilities’ preparation for and response to Tropical Storm Isaias and the resulting power outages in August 2020 and (2) the July 2019 power outages on the west side of Manhattan and in the Flatbush area of Brooklyn. See "Other Regulatory Matters" in Note B to the financial statements in Item 8.

•The NYSPSC also continued its proceedings related to income tax accounting and a July 2018 CECONY steam rupture and concluded its investigations into the Utilities' preparation and response to the March 2018 Winter Storms Riley and Quinn and its proceeding against CECONY for alleged violations of gas operator qualification, performance, and inspection requirements. See "Other Regulatory Matters" in Note B to the financial statements in Item 8.

•In 2020, the NYSPSC continued its Reforming the Energy Vision (REV) and related proceedings. See "Environmental Matters - Clean Energy Future - Reforming the Energy Vision" in Item 1. In July 2020, the NYSPSC established a light-duty electric vehicle make-ready program that includes budgets of $290 million and $24 million for CECONY and O&R, respectively, through 2025 for electric vehicle infrastructure for fast charger stations, fleet assessment services for customers interested in fleet electrification and future-proofing so that components can accommodate updates to the quantity or charging capacity of the station. See "Environmental Matters - Clean Energy Future" in Item 1.

•The Clean Energy Businesses increased their renewable energy portfolio by 186 MW AC, resulting in a year-end installed capacity of 2,868 MW AC, bringing the annual renewable energy production for 2020 to over 7 terawatt hours. See "Clean Energy Businesses" in Item 1.

•In January 2019, Pacific Gas and Electric Company (PG&E) filed for reorganization under Chapter 11 of the U.S. Bankruptcy Code. The output of certain of the Clean Energy Businesses' renewable electric production projects is sold to PG&E under long-term power purchase agreements. As a result of the PG&E bankruptcy, distributions from the related projects to the Clean Energy Businesses were restricted and PG&E-related project debt was reclassified on Con Edison's consolidated balance sheet from long-term debt to long-term debt due within one year. In July 2020, PG&E’s plan of reorganization became effective and the Clean Energy Businesses began receiving previously restricted distributions and all related project debt with a maturity longer than one year was reclassified to long-term debt. See "Clean Energy Businesses - Renewable Electric Production" in Item 1 and "Long-Lived and Intangible Assets" in Note A.

•Con Edison Gas Pipeline and Storage, LLC (CET Gas) recorded a pre-tax impairment loss of $320 million ($223 million after-tax) for the year ended December 31, 2020 that reduced the carrying value of its investment

CON EDISON ANNUAL REPORT 2020 9

in Mountain Valley Pipeline LLC (MVP), a joint venture developing a proposed 300-mile gas transmission project in West Virginia and Virginia from $662 million to $342 million. See “Investments” in Note A to the financial statements in Item 8.

•CET Gas is considering strategic alternatives with respect to its 50 percent interest in Stagecoach Gas Services, LLC, a joint venture that owns and operates an existing gas pipeline and storage business located in northeastern Pennsylvania and the southern tier of New York. See “Con Edison Transmission,” in Item 1.

10 CON EDISON ANNUAL REPORT 2020

Available Information

Con Edison and CECONY file annual, quarterly and current reports and other information, and Con Edison files proxy statements, with the Securities and Exchange Commission (SEC). The SEC maintains an Internet site at www.sec.gov that contains reports, proxy statements, and other information regarding issuers (including Con Edison and CECONY) that file electronically with the SEC.

This information the Companies file with the SEC is also available free of charge on or through the investor information section of their websites as soon as reasonably practicable after the reports are electronically filed with, or furnished to, the SEC. Con Edison’s internet website is at: www.conedison.com; and CECONY’s is at: www.coned.com.

The "About Us - Corporate Governance" section of Con Edison’s website includes the company’s Standards of Business Conduct (its code of ethics) and amendments or waivers of the standards for executive officers or directors, corporate governance guidelines and the charters of the following committees of the company’s Board of Directors: Audit Committee, Corporate Governance and Nominating Committee, Management Development and Compensation Committee, and Safety, Environment, Operations, and Sustainability Committee. This information is available in print to any shareholder who requests it. Requests should be directed to: Corporate Secretary, Consolidated Edison, Inc., 4 Irving Place, New York, NY 10003.

The "About Us - Sustainability Report” section of Con Edison’s website includes “Our Sustainable Future,” the company’s 2019 sustainability report.

Information on the Companies’ websites is not incorporated herein.

Forward-Looking Statements

This report contains forward-looking statements that are intended to qualify for the safe-harbor provisions of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. Forward-looking statements are statements of future expectations and not facts. Words such as "forecasts," "expects," "estimates," "anticipates," "intends," "believes," "plans," "will," "target," and similar expressions identify forward-looking statements. The forward-looking statements reflect information available and assumptions at the time the statements are made, and speak only as of that time. Actual results or developments might differ materially from those included in the forward-looking statements because of various factors including, but not limited to, those discussed under “Risk Factors,” in Item 1A.

Non-GAAP Financial Measures

Adjusted earnings and adjusted earnings per share are financial measures that are not determined in accordance with generally accepted accounting principles in the United States of America (GAAP). These non-GAAP financial measures should not be considered as an alternative to net income for common stock or net income per share, respectively, each of which is an indicator of financial performance determined in accordance with GAAP. Adjusted earnings and adjusted earnings per share exclude from net income and net income per share, respectively, certain other items that the company does not consider indicative of its ongoing financial performance. Management uses these non-GAAP financial measures to facilitate the analysis of the company's financial performance as compared to its internal budgets and previous financial results. Management also uses these non-GAAP financial measures to communicate to investors and others the company’s expectations regarding its future earnings and dividends on its common stock. Management believes that these non-GAAP financial measures also are useful and meaningful to investors to facilitate their analysis of the company's financial performance. The following table is a reconciliation of Con Edison’s reported net income for common stock to adjusted earnings and reported earnings per share to adjusted earnings per share.

CON EDISON ANNUAL REPORT 2020 11

Income tax effect of the Tax Cuts and Jobs Act (a) — (259) 42 — —

Gain on sale of solar electric production projects (pre-tax) — (2) — — —

Income taxes (b) — 1 — — —

Gain on sale of solar electric production projects (net of tax) — (1) — —

Income taxes (b) 48 — — — —

Income taxes (b) (3) — — — —

Income taxes (b) — — 33 — —

Income taxes (b) — — — — (97)

HLBV effects of the Clean Energy Businesses (pre-tax) (e) — — — 98 44

Income taxes (b) — — — (24) (12)

HLBV effects of the Clean Energy Businesses (net of tax) (e) — — — 74 32

Income taxes (b) 2 — (2) (6) (14)

Reported earnings per share – GAAP basis (basic) $4.15 $4.97 $4.43 $4.09 $3.29

Income tax effect of the Tax Cuts and Jobs Act (a) — (0.85) 0.14 — —

Gain on sale of solar electric production projects (pre-tax) — — — — —

Income taxes (b) — — — — —

Gain on sale of solar electric production projects (net of tax) — — — — —

Income taxes (b) 0.16 — — — —

Income taxes (b) (0.03) — — — —

Income taxes (b) — — 0.10 — —

Income taxes (b) — — — — (0.29)

HLBV effects of the Clean Energy Businesses (pre-tax) (e) — — — 0.31 0.14

Income taxes (b) — — — (0.09) (0.04)

HLBV effects of the Clean Energy Businesses (net of tax) (e) — — — 0.22 0.10

12 CON EDISON ANNUAL REPORT 2020

(a)In 2017, upon enactment of the TCJA, Con Edison re-measured its deferred tax assets and liabilities based upon the 21 percent corporate income tax rate under the TCJA. As a result, Con Edison decreased its net deferred tax liabilities by $5,312 million, recognized $259 million (or $0.85 per share) in net income, decreased its regulatory asset for future income tax by $1,250 million, decreased its regulatory asset for revenue taxes by $90 million, and accrued a regulatory liability for federal income tax rate change of $3,713 million. In 2018, Con Edison recognized $42 million of income tax expense resulting from a re-measurement of its deferred tax assets and liabilities following the issuance of the proposed TCJA regulations. See “Other Regulatory Matters” in Note B and Note L to the financial statements in Item 8.

(b)The amount of income taxes was calculated using a combined federal and state income tax rate between 25-27% for the year ended December 31, 2020, a combined federal and state income tax rate between 22-24% for the year ended December 31, 2019, a combined federal and state income tax rate of 28% for the year ended December 31, 2018 and a combined federal and state income tax rate of 40% for the years ended December 31, 2016-2017.

(c)Gain recognized with respect to jointly-owned renewable energy production projects upon completion of the acquisition of Sempra Solar Holdings, LLC, net of transaction costs for the acquisition. See Note V to the financial statements in Item 8.

(d)Loss recognized with respect to the partial impairment of CET Gas' investment in MVP. See "Investments" in Note A to the financial statements in Item 8.

(e)Income attributable to the non-controlling interest of a tax-equity investor in renewable electric production projects accounted for under the hypothetical liquidation at book value (HLBV) method of accounting. See Note R to the financial statements in Item 8.

CON EDISON ANNUAL REPORT 2020 13

Item 1: Business

Contents of Item 1 Page

Overview 16

Electric 16

Electric 17

Clean Energy Businesses 17

Con Edison Transmission 17

Utility Regulation 17

State Utility Regulation 17

Regulators 17

New York Utility Industry 18

Rate Plans 18

Liability for Service Interruptions 19

Generic Proceedings 19

Federal Utility Regulation 20

New York Independent System Operator (NYISO) 20

Competition 20

The Utilities 21

Electric Operations 21

Electric Facilities 21

Electric Sales and Deliveries 22

Electric Peak Demand 22

Electric Supply 23

Gas Operations 24

Gas Facilities 24

Gas Sales and Deliveries 24

Gas Peak Demand 25

Gas Supply 25

Steam Operations 25

Steam Facilities 25

Steam Sales and Deliveries 25

Steam Peak Demand and Capacity 26

Steam Supply 26

Electric Operations 26

Electric Facilities 26

Electric Sales and Deliveries 26

Electric Peak Demand 27

Electric Supply 27

Gas Operations 27

Gas Facilities 27

Gas Sales and Deliveries 28

Gas Peak Demand 28

Gas Supply 29

14 CON EDISON ANNUAL REPORT 2020

Contents of Item 1 Page

Clean Energy Businesses 30

Renewable Electric Generation 31

Energy-Related Products and Services 32

Con Edison Transmission 32

CET Electric 32

Capital Requirements and Resources 33

Environmental Matters 36

Clean Energy Future 36

Climate Change 39

Environmental Sustainability 40

Other Federal, State and Local Environmental Provisions 43

State Anti-Takeover Law 44

Human Capital 44

Incorporation By Reference

Information in any item of this report as to which reference is made in this Item 1 is hereby incorporated by reference in this Item 1. The use of terms such as “see” or “refer to” shall be deemed to incorporate into Item 1 at the place such term is used the information to which such reference is made.

CON EDISON ANNUAL REPORT 2020 15

PART I

Item 1: Business

Overview

Consolidated Edison, Inc. (Con Edison), incorporated in New York State in 1997, is a holding company that owns all of the outstanding common stock of Consolidated Edison Company of New York, Inc. (CECONY), Orange and Rockland Utilities, Inc. (O&R), Con Edison Clean Energy Businesses, Inc. and Con Edison Transmission, Inc. As used in this report, the term the “Companies” refers to Con Edison and CECONY.

Con Edison

CECONY O&R Clean Energy Businesses Con Edison Transmission

•RECO •CET Electric•CET Gas

Con Edison’s principal business operations are those of CECONY, O&R, the Clean Energy Businesses and Con Edison Transmission. CECONY’s principal business operations are its regulated electric, gas and steam delivery businesses. O&R’s principal business operations are its regulated electric and gas delivery businesses. The Clean Energy Businesses develop, own and operate renewable and sustainable energy infrastructure projects and provide energy-related products and services to wholesale and retail customers. Con Edison Transmission invests in electric transmission facilities and holds investments in gas pipeline and storage facilities. Con Edison recorded a pre-tax impairment loss of $320 million for the year ended December 31, 2020 that reduced the carrying value of its investment in Mountain Valley Pipeline LLC and is considering strategic alternatives with respect to its 50 percent interest in Stagecoach Gas Services, LLC. See "Investments" in Note A to the financial statements in Item 8.

Con Edison seeks to provide shareholder value through continued dividend growth, supported by earnings growth in regulated utilities and contracted electric and gas assets. The company invests to provide reliable, resilient, safe and clean energy critical for its New York customers. The company is an industry leading owner and operator of contracted, large-scale solar generation in the United States. Con Edison is a responsible neighbor, helping the communities it serves become more sustainable.

CECONY

Electric

CECONY provides electric service to approximately 3.5 million customers in all of New York City (except a part of Queens) and most of Westchester County, an approximately 660 square mile service area with a population of more than nine million.

Gas

CECONY delivers gas to approximately 1.1 million customers in Manhattan, the Bronx, parts of Queens and most of Westchester County.

Steam

CECONY operates the largest steam distribution system in the United States by producing and delivering approximately 16,554 MMlb of steam annually to approximately 1,576 customers in parts of Manhattan.

16 CON EDISON ANNUAL REPORT 2020

O&R

Electric

O&R and its utility subsidiary, Rockland Electric Company (RECO) (together referred to herein as O&R) provide electric service to approximately 0.3 million customers in southeastern New York and northern New Jersey, an approximately 1,300 square mile service area.

Gas

O&R delivers gas to over 0.1 million customers in southeastern New York.

Clean Energy Businesses

Con Edison Clean Energy Businesses, Inc., together with its subsidiaries, are referred to in this report as the Clean Energy Businesses. The Clean Energy Businesses develop, own and operate renewable and sustainable energy infrastructure projects and provide energy-related products and services to wholesale and retail customers.

Con Edison Transmission

Con Edison Transmission, Inc. invests in electric transmission facilities and holds investments in gas pipeline and storage facilities through its wholly-owned subsidiaries, Consolidated Edison Transmission, LLC (CET Electric) and Con Edison Gas Pipeline and Storage, LLC (CET Gas). CET Electric owns a 45.7 percent interest in New York Transco LLC, which owns and has been selected to build additional electric transmission assets in New York. CET Gas owns, through subsidiaries, a 50 percent interest in Stagecoach Gas Services, LLC, a joint venture that owns and operates an existing gas pipeline and storage business located in northeastern Pennsylvania and the southern tier of New York. Con Edison is considering strategic alternatives with respect to its 50 percent interest in Stagecoach Gas Services, LLC. Also, CET Gas and CECONY own 71.2 percent and 28.8 percent interests, respectively, in Honeoye Storage Corporation, which operates a gas storage facility in upstate New York. In addition, CET Gas owns an 11.3 percent interest (that is expected to be reduced to 8.8 percent based on the current project cost estimate and CET Gas’ previous capping of its cash contributions to the joint venture) in Mountain Valley Pipeline LLC, a joint venture developing a proposed 300-mile gas transmission project in West Virginia and Virginia. CET Gas recorded a pre-tax impairment loss of $320 million ($223 million after-tax) for the year ended December 31, 2020 that reduced the carrying value of its investment in Mountain Valley Pipeline LLC from $662 million to $342 million. See "Investments" in Note A to the financial statements in Item 8 and “Con Edison Transmission,” below. Con Edison Transmission, Inc., together with CET Electric and CET Gas, are referred to in this report as Con Edison Transmission.

Utility Regulation

State Utility Regulation

Regulators

The Utilities are subject to regulation by the NYSPSC, that under the New York Public Service Law, is authorized to set the terms of service and the rates the Utilities charge for providing service in New York. See “Rate Plans,” below and in Note B to the financial statements in Item 8. The NYSPSC also approves the issuance of the Utilities’ securities and transactions between the Utilities and Con Edison and its other subsidiaries. See “Capital Resources,” below and Note T to the financial statements in Item 8. The NYSPSC exercises jurisdiction over the siting of electric transmission lines in New York State (see “Con Edison Transmission,” below) and approves mergers or other business combinations involving New York utilities.

In addition, under the New York Public Service Law, the NYSPSC has the authority to (i) impose penalties on New York utilities, which could be material, for violating state utility laws and regulations and its orders; (ii) review, at least every five years, an electric utility’s capability to provide safe, adequate and reliable service, order the utility to comply with additional and more stringent terms of service than existed prior to the review, assess the continued operation of the utility as the provider of electric service in its service territory and propose, and act upon, such measures as are necessary to ensure safe and adequate service; and (iii) based on findings of repeated violations of the New York Public Service Law or rules or regulations adopted thereto that demonstrate a failure of a combination gas and electric utility to continue to provide safe and adequate service, revoke or modify an operating certificate issued to the utility by the NYSPSC (following consideration of certain factors, including public interest and standards deemed necessary by the NYSPSC to ensure continuity of service, and due process). See "Risk Factors" in Item 1A and “Other Regulatory Matters” and "COVID-19 Regulatory Matters" in Note B to the financial statements in Item 8.

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CON EDISON ANNUAL REPORT 2020 17

In January 2021, Governor Cuomo proposed legislation that, if enacted, would impact New York utilities, including CECONY and O&R, and that would establish an automatic moratorium on utility disconnections for residential and small business customers during certain states of emergency. See "Risk Factors" in Item 1A and “Other Regulatory Matters” in Note B to the financial statements in Item 8. O&R’s New Jersey subsidiary, RECO, is subject to regulation by the New Jersey Board of Public Utilities (NJBPU). The NYSPSC, together with the NJBPU, are referred to herein as state utility regulators.

New York Utility Industry

Restructuring in the 1990s

In the 1990s, the NYSPSC restructured the electric utility industry in the state. In accordance with NYSPSC orders, the Utilities sold all of their electric generating facilities other than those that also produce steam for CECONY’s steam business (see "Electric Operations – Electric Facilities," below) and provided all of their customers the choice to buy electricity or gas from the Utilities or other suppliers (see "Electric Operations – Electric Sales and Deliveries" and "Gas Operations – Gas Sales and Deliveries," below). In 2020, 60 percent of the electricity and 35 percent of the gas CECONY delivered to its customers, and 52 percent of the electricity and 34 percent of the gas O&R delivered to its customers, was purchased by the customers from other suppliers. In addition, the Utilities no longer control and operate their bulk power electric transmission facilities. See “New York Independent System Operator (NYISO),” below.

Following industry restructuring, there were several utility mergers as a result of which substantially all of the electric and gas delivery service in New York State is now provided by one of five investor-owned utility companies – Con Edison, National Grid plc, Avangrid, Inc. (an affiliate of Iberdrola, S.A.), National Fuel Gas Company or CH Energy Group, Inc. (a subsidiary of Fortis Inc.) – or one of two state authorities – New York Power Authority (NYPA) or Long Island Power Authority.

Rate Plans

Investor-owned utilities in the United States provide delivery service to customers according to the terms of tariffs approved by the appropriate state utility regulator. The tariffs include schedules of rates for service that limit the rates charged by the utilities to amounts that the utilities recover from their customers costs approved by the regulator, including capital costs, of providing service to customers as defined by the tariff. The tariffs implement rate plans adopted by state utility regulators in rate orders issued at the conclusion of rate proceedings. The utilities’ earnings depend on the limits on rates authorized in, and the other provisions of, their rate plans and their ability to operate their businesses in a manner consistent with such rate plans.

The utilities’ rate plans cover specified periods, but rates determined pursuant to a plan generally continue in effect until a new rate plan is approved by the state utility regulator. In New York, either the utility or the NYSPSC can commence a proceeding for a new rate plan, and a new rate plan filed by the utility will generally take effect automatically in approximately 11 months unless prior to such time the NYSPSC approves a rate plan.

In each rate proceeding, rates are determined by the state utility regulator following the submission by the utility of testimony and supporting information, which are subject to review by the staff of the regulator. Other parties with an interest in the proceeding can also review the utility’s proposal and become involved in the rate proceeding. In New York State, the review process is overseen by an administrative law judge who is employed by the NYSPSC. After an administrative law judge issues a recommended decision that generally considers the interests of the utility, the regulatory staff, other parties and legal requisites, the regulator will issue a rate order. The utility and the regulator’s staff and interested parties may enter jointly into a proposed settlement agreement prior to the completion of this administrative process, in which case the agreement could be approved by the regulator with or without modification.

For each rate plan, the revenues needed to provide the utility a return on invested capital is determined by multiplying the utilities’ rate base by the pre-tax weighted average cost of capital determined in the rate plan. In general, rate base, as reflected in a utility's rate plans, is the sum of the utility’s net plant, working capital and certain regulatory assets less deferred taxes and certain regulatory liabilities. The NYSPSC uses a forecast of the average rate base for the year that new rates would be in effect (rate year). The NJBPU uses the rate base balances that exist at the end of the historical 12-month period on which base rates are set. The capital structure used in the weighted average cost of capital is determined using actual and forecast data for the same time periods as rate base. The costs of long-term debt, customer deposits and the allowed return on common equity represent a combination of actual and forecast financing information. The allowed return on common equity is determined by each state’s respective utility regulator. The NYSPSC’s current methodology for determining the allowed return on common equity assigns a one-third weight to an estimate determined from a capital asset pricing model applied to a peer group of utility companies and a two-thirds weight to an estimate determined from a dividend discount model

18 CON EDISON ANNUAL REPORT 2020

using stock prices and dividend forecasts for a peer group of utility companies. Both methodologies employ market measurements of equity capital to estimate returns rather than the accounting measurements to which such estimates are applied in setting rates.

Pursuant to the Utilities’ rate plans, there generally can be no change to the rates charged to customers during the respective terms of the rate plans other than specified adjustments provided for in the rate plans.

For information about the Utilities’ rate plans, see Note B to the financial statements in Item 8.

Liability for Service Interruptions

The tariff provisions under which CECONY provides electric, gas and steam service, and O&R provides electric and gas service, limit each company’s liability to pay for damages resulting from service interruptions to circumstances resulting from its gross negligence or willful misconduct. Under RECO's tariff provisions for electric service, the company is not liable for interruptions that are due to causes beyond its control.

CECONY’s tariff for electric service also provides for reimbursement to electric customers for spoilage losses resulting from service interruptions in certain circumstances. In general, the company is obligated to reimburse affected residential and commercial customers for food spoilage of up to approximately $500 and $10,000, respectively, and reimburse affected residential customers for prescription medicine spoilage losses without limitation on amount per claim. The company’s maximum aggregate liability for such reimbursement for an incident is $15 million. The company is not required to provide reimbursement to electric customers for outages attributable to generation or transmission system facilities or events beyond its control, such as storms, provided the company makes reasonable efforts to restore service as soon as practicable.

New York electric utilities are required to provide credits to customers who are without electric service for more than three days. The credit to a customer would equal the portion of the monthly customer charge attributable to the period the customer was without service. If an extraordinary event occurs, the NYSPSC may direct New York gas utilities to implement the same policies.

The NYSPSC has approved a scorecard for use as a guide to assess electric utility performance in restoring electric service during outages that result from a major storm. The scorecard could also be applied by the NYSPSC for other outages or actions. The scorecard includes performance metrics in categories for preparation, operations response, and communications.

Each New York electric utility is required to submit to the NYSPSC annually an emergency response plan for the reasonably prompt restoration of service in the case of widespread outages in the utility’s service territory due to storms or other events beyond the control of the utility. If, after evidentiary hearings or other investigatory proceedings, the NYSPSC finds that the utility failed to implement its plan reasonably, the NYSPSC may deny recovery of any part of the service restoration costs caused by such failure. In May 2020, the NYSPSC approved emergency response plans for CECONY and O&R. In December 2020, CECONY and O&R each submitted updated plans for 2021.

Generic Proceedings

The NYSPSC from time to time conducts “generic” proceedings to consider issues relating to all electric and gas utilities operating in New York State. Proceedings include the REV proceeding and related implementation proceedings, and proceedings relating to data access, retail access, gas planning, energy efficiency and renewable energy programs and climate change risk disclosure. The Utilities are typically active participants in such proceedings.

CON EDISON ANNUAL REPORT 2020 19

Federal Utility Regulation

The Federal Energy Regulatory Commission (FERC), among other things, regulates the transmission and wholesale sales of electricity in interstate commerce and the transmission and sale of natural gas for resale in interstate commerce. In addition, the FERC has the authority to impose penalties, which could be substantial, including penalties for the violation of reliability and cyber security rules. Certain activities of the Utilities, the Clean Energy Businesses and Con Edison Transmission are subject to the jurisdiction of the FERC. The Utilities are subject to regulation by the FERC with respect to electric transmission rates and to regulation by the NYSPSC with respect to electric and gas retail commodity sales and local delivery service. As a matter of practice, the NYSPSC has approved delivery service rates for the Utilities that include both transmission and distribution costs. Wholesale energy and capacity products sold by the Clean Energy Businesses to the regional electric markets are subject to FERC jurisdiction as defined by the independent system operator tariffs. The electric and gas transmission projects in which CET Electric and CET Gas invest are also subject to regulation by the FERC. See “Con Edison Transmission,” below.

New York Independent System Operator (NYISO)

The NYISO is a not-for-profit organization that controls and directs the operation of most of the electric transmission facilities in New York State, including those of the Utilities, as an integrated system. It also administers wholesale markets for electricity in New York State and facilitates the construction of new transmission it considers necessary to meet identified reliability, economic or public policy needs. The New York State Reliability Council (NYSRC) promulgates reliability standards subject to FERC oversight, and the NYISO has agreed to comply with those standards. Pursuant to a requirement that is set annually by the NYSRC, the NYISO requires that entities supplying electricity to customers in New York State have generating capacity (owned, procured through the NYISO capacity markets or contracted for) in an amount equal to the peak demand of their customers plus the applicable reserve margin. In addition, the NYISO has determined that entities that serve customers in New York City must procure sufficient capacity from resources that are electrically located in New York City to cover a substantial percentage of the peak demands of their New York City customers. The NYISO also requires entities that serve customers in the Lower Hudson Valley and New York City customers that are served through the Lower Hudson Valley to procure sufficient capacity from resources electrically located in the Lower Hudson Valley. These requirements apply both to regulated utilities such as CECONY and O&R for the customers they supply under regulated tariffs and to other load serving entities that supply customers on market terms. RECO, O&R’s New Jersey subsidiary, provides electric service in a portion of its service territory that has a different independent system operator – PJM Interconnection LLC (PJM). See “CECONY – Electric Operations – Electric Supply” and “O&R – Electric Operations – Electric Supply,” below.

Competition

The subset of distributed energy resources (DER) that produce electricity are collectively referred to as distributed generation (DG). DG includes solar energy production facilities, fuel cells, and micro-turbines, and provides an alternative source of electricity for the Utilities’ electric delivery customers. Energy storage, though not a form of DG, is also a source of electricity for the Utilities’ electric delivery customers. Typically, customers with DG remain connected to the utility’s delivery system and pay a different rate. Gas delivery customers have electricity, oil and propane as alternatives, and steam customers have electricity, oil and natural gas as alternative sources for heating and cooling their buildings. Micro-grids and community-based micro-grids enable DG to serve multiple locations and multiple customers. Demand reduction and energy efficiency investments provide ways for energy consumers within the Utilities’ service areas to lower their energy usage. The Companies expect DERs and electric alternatives to gas and steam, to increase, and for gas and steam usage to decrease, as the Climate Leadership and Community Protection Act enacted by New York State and the Climate Mobilization Act enacted by New York City in 2019 continue to be implemented. See “Environmental Matters – Clean Energy Future,” below. CECONY’s smart solutions for gas customers include energy efficiency and heating electrification programs. See “CECONY- Gas Operations - Gas Peak Demand,” below. The following table shows the aggregate capacities of the DG projects connected to the Utilities’ distribution systems at the end of the last five years:

20 CON EDISON ANNUAL REPORT 2020

Technology CECONY O&R

Battery energy storage — — — 8 13 — — — 1 6

Steam turbines 4 6 6 6 6 — — — — —

Landfill — — — — — 2 2 2 2 2

The Clean Energy Businesses participate in competitive renewable and sustainable energy infrastructure projects and provide energy-related products and services that are subject to different risks than those found in the businesses of the Utilities. See "Clean Energy Businesses," below. Con Edison Transmission invests in electric transmission facilities and holds investments in gas pipeline and storage facilities, the current and prospective customers of which may have competitive alternatives. See "Con Edison Transmission," below.

The Utilities do not consider it reasonably likely that another company would be authorized to provide utility delivery service of electricity, natural gas or steam where the company already provides service. Any such other company would need to obtain NYSPSC consent, satisfy applicable local requirements, install facilities to provide the service, meet applicable services standards and charge customers comparable taxes and other fees and costs imposed on the service. A new delivery company would also be subject to extensive ongoing regulation by the NYSPSC. See “Utility Regulation – State Utility Regulation – Regulators,” above, "The Companies Are Extensively Regulated And Are Subject To Substantial Penalties" in Item 1A and “Other Regulatory Matters” in Note B to the financial statements in Item 8.

The Utilities

CECONY

CECONY, incorporated in New York State in 1884, is a subsidiary of Con Edison and has no significant subsidiaries of its own. Its principal business segments are its regulated electric, gas and steam businesses.

For a discussion of the company’s operating revenues and operating income for each segment, see “Results of Operations” in Item 7. For additional information about the segments, see Note O to the financial statements in Item 8.

Electric Operations

Electric Facilities

CECONY’s capitalized costs for utility plant, net of accumulated depreciation, for distribution facilities were $20,366 million and $19,602 million at December 31, 2020 and 2019, respectively. For its transmission facilities, the costs for utility plant, net of accumulated depreciation, were $3,496 million and $3,380 million at December 31, 2020 and 2019, respectively, and for its portion of the steam-electric generation facilities, the costs for utility plant, net of accumulated depreciation, were $572 million and $591 million, at December 31, 2020 and 2019, respectively. See "CECONY – Steam Operations – Steam Facilities," below.

Distribution Facilities

CECONY owns 62 area distribution substations and various distribution facilities located throughout New York City and Westchester County. At December 31, 2020, the company’s distribution system had a transformer capacity of 33,027 MVA, with 37,119 miles of overhead distribution lines and 98,404 miles of underground distribution lines. The underground distribution lines represent the single longest underground electric delivery system in the United States.

CON EDISON ANNUAL REPORT 2020 21

Transmission Facilities

CECONY’s transmission facilities are located in New York City and Westchester, Orange, Rockland, Putnam and Dutchess counties in New York State. At December 31, 2020, the company owned or jointly owned 569 miles of overhead circuits operating at 138, 230, 345 and 500 kV and 755 miles of underground circuits operating at 69, 138 and 345 kV. The company’s 40 transmission substations and 62 area stations are supplied by circuits operated at 69 kV and above. For information about transmission projects to address, among other things, reliability concerns associated with the scheduled closure of the Indian Point Energy Center (which is owned by Entergy Corporation subsidiaries) see “CECONY – Electric Operations – Electric Supply” and “Con Edison Transmission,” below. CECONY’s transmission facilities interconnect with those of National Grid, Central Hudson Gas & Electric Corporation, O&R, New York State Electric & Gas, Connecticut Light & Power Company, Long Island Power Authority, NYPA and Public Service Electric and Gas Company.

Generating Facilities

CECONY’s electric generating facilities consist of plants located in Manhattan whose primary purpose is to produce steam for the company's steam business. The facilities have an aggregate capacity of 679 MW. The company expects to have sufficient amounts of gas and fuel oil available in 2021 for use in these facilities.

Electric Sales and Deliveries

CECONY delivers electricity to its full-service customers who purchase electricity from the company. The company also delivers electricity to its customers who choose to purchase electricity from other suppliers (retail choice program). In addition, the company delivers electricity to state and municipal customers of NYPA.

The company charges all customers in its service area for the delivery of electricity. The company generally recovers, on a current basis, the cost of the electricity that it buys and then sells to its full-service customers. It does not make any margin or profit on the electricity it sells. CECONY’s electric revenues are subject to a revenue decoupling mechanism. As a result, its electric delivery revenues are generally not affected by changes in delivery volumes from levels assumed when rates were approved. CECONY’s electric sales and deliveries for the last five years were:

Year Ended December 31,

Electric Energy Delivered (millions of kWh)

Electric Energy Delivered ($ in millions)

Average Revenue per kWh Sold (Cents)

For further discussion of the company’s electric operating revenues and its electric results, see “Results of Operations” in Item 7. For additional segment information, see Note O to the financial statements in Item 8.

Electric Peak Demand

The electric peak demand in CECONY’s service area occurs during the summer air conditioning season. The weather during the summer of 2020 was cooler than design weather conditions. CECONY’s 2020 service area actual hourly peak demand was 11,740 MW, which occurred on July 28, 2020. “Design weather conditions” for the electric system is a standard to which the actual hourly peak demand is adjusted for evaluation and planning purposes. Since NYISO-invoked demand reduction programs can only be called upon under specific circumstances, design weather conditions do not include these programs’ potential impact. However, the CECONY forecasted hourly peak demand at design conditions does include the impact of certain demand reduction programs. The

22 CON EDISON ANNUAL REPORT 2020

company estimates that, under design weather conditions, the 2021 service area hourly peak demand will be 12,880 MW. As of January 2021, the company forecasts an average annual increase in hourly electric peak demand in its service area at design weather conditions over the next five years to be approximately 0.8 percent per year, including the effect of certain electric energy efficiency programs. The five-year forecast in peak demand is used by the company for electric supply planning purposes.

Electric Supply

Most of the electricity sold by CECONY to its full-service customers in 2020 was purchased under firm power contracts or through the wholesale electricity market administered by the NYISO. The company expects that these resources will again be adequate to meet the requirements of its customers in 2021. The company plans to meet its continuing obligation to supply electricity to its customers through a combination of electricity purchased under contracts, purchased through the NYISO’s wholesale electricity market, or generated from its electricity generating facilities. For information about the company’s contracts for electric generating capacity, see Notes I and P to the financial statements in Item 8. To reduce the volatility of its customers’ electric energy costs, the company has contracts to purchase electric energy and enters into derivative transactions to hedge the costs of a portion of its expected purchases under these contracts and through the NYISO’s wholesale electricity market.

CECONY owns generating stations in New York City associated primarily with its steam system. As of December 31, 2020, the generating stations had a combined electric capacity of approximately 679 MW, based on 2020 summer test ratings. For information about electric generating capacity owned by the company, see “Electric Operations – Electric Facilities – Generating Facilities,” above.

In general, the Utilities recover their costs of purchasing power for full service customers, including the cost of hedging purchase prices, pursuant to rate provisions approved by the state public utility regulatory authority having jurisdiction. See “Financial and Commodity Market Risks – Commodity Price Risk” in Item 7 and “Recoverable Energy Costs” in Note A to the financial statements in Item 8.

CECONY monitors the adequacy of the electric capacity resources and related developments in its service area, and works with other parties on long-term resource adequacy within the framework of the NYISO reliability planning process. The NYISO process includes obligations on transmission owners (such as CECONY) to construct facilities that may be needed for system reliability if the market does not solve a reliability need identified by the NYISO. See “New York Independent System Operator,” above. In a July 1998 order, the NYSPSC indicated that it “agree(s) generally that CECONY need not plan on constructing new generation as the competitive market develops,” but considers “overly broad” and did not adopt CECONY’s request for a declaration that, solely with respect to providing generating capacity, it will no longer be required to engage in long-range planning to meet potential demand and, in particular, that it will no longer have the obligation to construct new generating facilities, regardless of the market price of capacity.

In April 2020, one of the two nuclear reactors at the Indian Point Energy Center (which is owned by Entergy Corporation subsidiaries) was shut down, while the other is scheduled to be closed in April 2021. The NYISO indicated that these retirements would not cause a reliability need if three units finalize construction and enter service. All three of the units have been placed into service. Two of the units, Bayonne Energy Center II Uprate (Zone J, 120 MW) and CPV Valley Energy Center (Zone G, 678 MW) entered service in 2018 (with the latter in litigation regarding its air permit) and the third unit, Cricket Valley Energy Center (Zone G, 1,020 MW), fully entered service in early 2020 before the retirement of the Indian Point unit.

In 2019, the New York State Department of Environmental Conservation (NYSDEC) issued regulations that may require the retirement or seasonal unavailability of fossil-fueled electric generating units owned by CECONY and others in New York City. The NYSDEC rule limits nitrous oxides (NOx) emissions during the ozone season from May through September and affects older peaking units that are generally located downstate and needed during periods of high electric demand or for local reliability purposes. Compliance with the rule will require affected units (approximately 1,400 MW in CECONY's service territory, of which 65 MW is owned by CECONY) to cease operation during the ozone season, install emission controls, repower, or retire by 2023 or 2025. The NYISO, in its 2020 Reliability Needs Assessment study that was approved by the NYISO board, reported local and bulk transmission system reliability needs that are expected to be caused by the retirement or unavailability of some of the impacted units. In January 2021, CECONY updated its local transmission plan to address the local transmission system reliability needs and expects to submit a plan to the NYISO to address the bulk transmission system reliability needs in the first half of 2021. The local transmission projects were also submitted to the NYSPSC in November 2020 as part of the New York utilities’ Transmission and Distribution Investment Working Group Report, due to the benefits they provide towards meeting New York State’s clean energy goals. CECONY’s implementation of all or part of its plans will be dependent upon the availability of market solutions and/or NYISO’s selection of

CON EDISON ANNUAL REPORT 2020 23

regulated solutions proposed by others. CECONY estimates that the costs of implementing plans to solve the local reliability needs, if required, to be approximately $780 million over 4 years and is unable to estimate the amount to implement plans to solve the bulk reliability needs, if required. In December 2020, CECONY filed a petition with the NYSPSC to recover the potential costs to solve both requirements and expect such costs to be recovered, including a full rate of return, in rates from customers.

Gas Operations

Gas Facilities

CECONY’s capitalized costs for utility plant, net of accumulated depreciation, for gas facilities, which are primarily distribution facilities, were $8,522 million and $7,961 million at December 31, 2020 and 2019, respectively.

Natural gas is delivered by pipeline to CECONY at various points in or near its service territory and is distributed to customers by the company through an estimated 4,341 miles of mains and 377,490 service lines. The company owns a natural gas liquefaction facility and storage tank at its Astoria property in Queens, New York. The plant can store 1,062 MDt of which a maximum of about 240 MDt can be withdrawn per day. The company has about 1,226 MDt of additional natural gas storage capacity at a field in upstate New York, owned and operated by Honeoye Storage Corporation, a corporation 71.2 percent owned by CET Gas and 28.8 percent owned by CECONY.

Gas Sales and Deliveries

The company generally recovers the cost of the gas that it buys and then sells to its full-service customers. It does not make any margin or profit on the gas it sells. CECONY’s gas revenues are subject to a weather normalization clause and a revenue decoupling mechanism. As a result, its gas delivery revenues are generally not affected by changes in delivery volumes from levels assumed when rates were approved. CECONY’s gas sales and deliveries for the last five years were:

Year Ended December 31,

Gas Delivered (MDt)

Firm sales

Transportation of customer-owned gas

Gas Delivered ($ in millions)

Firm sales

Transportation of customer-owned gas

Other (mainly generating plants and interruptible transportation) 57 56 57 54 55

Off-system sales — — — — —

Other operating revenues (mainly regulatory amortizations) 56 148 28 114 74

Average Revenue per Dt Sold

(a)Includes 4,708, 3,816, 3,326, 5,484 and 3,510 MDt for 2016, 2017, 2018, 2019 and 2020, respectively, which are also reflected in firm transportation and other.

24 CON EDISON ANNUAL REPORT 2020

For further discussion of the company’s gas operating revenues and its gas results, see “Results of Operations” in Item 7. For additional segment information, see Note O to the financial statements in Item 8.

Gas Peak Demand

The gas actual peak day demand for firm sales customers in CECONY’s service area occurs during the winter heating season and during the winter of 2020/2021 (through January 31, 2021) occurred on January 29, 2021 when the firm sales customers' demand reached approximately 1,209 MDt. “Design weather conditions” for the gas system is a standard to which the actual peak demand is adjusted for evaluation and planning purposes. The company estimates that, under design weather conditions, the 2021/2022 service area peak day demand for firm sales customers will be 1,692 MDt. The forecasted peak day demand for firm sales customers at design conditions does not include gas used by interruptible gas customers including electric and steam generating stations. As of January 2021, the company forecasts an average annual growth of the gas peak day demand for firm sales customers over the next five years at design conditions to be approximately 1.4 percent in its service area, including the effect of certain gas energy efficiency programs and the temporary moratorium described below. The five-year forecast in peak demand is used by the company for gas supply planning purposes.

In March 2019, due to gas supply constraints, CECONY established a temporary moratorium on new applications for firm gas service in most of Westchester County. In July 2020, CECONY filed a gas planning analysis with the NYSPSC that stated the moratorium could be lifted when increased pipeline capacity is achieved upon completion of the Tennessee pipeline’s 300L East project or peak demand is reduced through efficiency and other demand side reductions to a level that would enable the company to lift the moratorium. Assuming timely regulatory approvals, the Tennessee pipeline project is expected to be completed by November 2023. CECONY's gas planning analysis also stated that the company is monitoring gas supply constraint in the New York City portion of its service territory.

Gas Supply

CECONY and O&R have combined their gas requirements, and contracts to meet those requirements, into a single portfolio. The combined portfolio is administered by, and related management services are provided by, CECONY (for itself and as agent for O&R) and costs are allocated between the Utilities in accordance with provisions approved by the NYSPSC. See Note T to the financial statements in Item 8.

Charges from suppliers for the firm purchase of gas, which are based on formulas or indexes or are subject to negotiation, are generally designed to approximate market prices. The Utilities have contracts with interstate pipeline companies for the purchase of firm transportation from upstream points where gas has been purchased to the Utilities’ distribution systems, and for upstream storage services. Charges under these transportation and storage contracts are approved by the FERC. The Utilities are required to pay certain fixed charges under the supply, transportation and storage contracts whether or not the contracted capacity is actually used. These fixed charges amounted to approximately $347 million in 2020, including $307 million for CECONY. See “Contractual Obligations,” below. At December 31, 2020, the contracts were for various terms extending to 2025 for supply and 2043 for transportation and storage. During 2020, CECONY entered into three new transportation and storage contracts. In addition, the Utilities purchase gas on the spot market and contract for interruptible gas transportation. See “Recoverable Energy Costs” in Note A, Note Q and Note T to the financial statements in Item 8.

Steam Operations

Steam Facilities

CECONY’s capitalized costs for utility plant, net of accumulated depreciation, for steam facilities, including steam's portion of the steam-electric generation facilities, were $1,854 million and $1,813 million at December 31, 2020 and 2019, respectively. See "CECONY – Electric Operations – Electric Facilities," above.

CECONY generates steam at one steam-electric generating station and four steam-only generating stations and distributes steam to its customers through approximately 104 miles of transmission, distribution and service piping.

Steam Sales and Deliveries

CON EDISON ANNUAL REPORT 2020 25

CECONY’s steam sales and deliveries for the last five years were:

Year Ended December 31,

Steam Sold (MMlb)

Steam Sold ($ in millions)

For further discussion of the company’s steam operating revenues and its steam results, see “Results of Operations” in Item 7. For additional segment information, see Note O to the financial statements in Item 8.

Steam Peak Demand and Capacity

The steam actual hourly peak demand in CECONY’s service area occurs during the winter heating season and during the winter of 2020/2021 (through January 31, 2021) occurred on January 29, 2021 when the actual hourly demand reached approximately 7.0 MMlb per hour. “Design weather conditions” for the steam system is a standard to which the actual hourly peak demand is adjusted for evaluation and planning purposes. The company’s estimate for the winter of 2021/2022 hourly peak demand of its steam customers is about 8.4 MMlb per hour under design weather conditions. As of January 2021, the company forecasts an average annual decrease in steam hourly peak demand in its service area at design weather conditions over the next five years to be approximately 0.4 percent. The five year forecast in peak demand is used by the company for steam asset management purposes.

On December 31, 2020, the steam system was capable of delivering approximately 11.4 MMlb of steam per hour, and CECONY estimates that the system will have the same capability in the 2021/2022 winter.

Steam Supply

27 percent of the steam produced by CECONY in 2020 was supplied by the company’s steam-only generating assets; 53 percent was produced by the company’s steam-electric generating assets, where steam and electricity are primarily cogenerated; and 20 percent was purchased under an agreement with Brooklyn Navy Yard Cogeneration Partners L.P.

O&R

Electric Operations

Electric Facilities

O&R’s capitalized costs for utility plant, net of accumulated depreciation, for distribution facilities were $1,115 million and $1,074 million at December 31, 2020 and 2019, respectively. For its transmission facilities, the costs for utility plant, net of accumulated depreciation, were $290 million and $254 million at December 31, 2020 and 2019, respectively.

O&R and RECO own, in whole or in part, transmission and distribution facilities which include 533 circuit miles of transmission lines, 15 transmission substations, 64 distribution substations, 89,673 in-service line transformers, 3,729 pole miles of overhead distribution lines and 2,210 miles of underground distribution lines. O&R’s transmission system is part of the NYISO system except that portions of RECO’s system are located within the transmission area controlled by PJM.

Electric Sales and Deliveries

O&R delivers electricity to its full-service customers who purchase electricity from the company. The company also delivers electricity to its customers who purchase electricity from other suppliers through the company’s retail choice program.

The company charges all customers in its service area for the delivery of electricity. O&R generally recovers, on a current basis, the cost of the electricity that it buys and then sells to its full-service customers. It does not make any

26 CON EDISON ANNUAL REPORT 2020

margin or profit on the electricity it sells. O&R’s New York electric revenues (which accounted for 75 percent of O&R’s electric revenues in 2020) are subject to a revenue decoupling mechanism. As a result, O&R’s New York electric delivery revenues are generally not affected by changes in delivery volumes from levels assumed when rates were approved. O&R’s electric sales in New Jersey are not subject to a decoupling mechanism. O&R’s electric sales and deliveries for the last five years were:

Year Ended December 31,

Electric Energy Delivered (millions of kWh)

Electric Energy Delivered ($ in millions)

Other operating revenues (2) 8 (12) 14 1

Average Revenue Per kWh Sold (Cents)

For further discussion of the company’s electric operating revenues and its electric results, see “Results of Operations” in Item 7. For additional segment information, see Note O to the financial statements in Item 8.

Electric Peak Demand

The electric peak demand in O&R’s service area occurs during the summer air conditioning season. The weather during the summer of 2020 was cooler than design conditions. O&R’s 2020 service area actual hourly peak demand was 1,430 MW, which occurred on July 27, 2020. “Design weather” for the electric system is a standard to which the actual hourly peak demand is adjusted for evaluation and planning purposes. Since NYISO-invoked demand reduction programs can only be called upon under specific circumstances, design weather conditions do not include these programs’ potential impact. However, the O&R forecasted hourly peak demand at design conditions does include the impact of certain demand reduction programs. The company estimates that, under design weather conditions, the 2021 service area peak demand will be 1,530 MW. The company forecasts an average annual decrease in hourly electric peak demand in its service area at design conditions over the next five years to be approximately 0.5 percent, including the effect of certain electric energy efficiency programs. The five-year forecast in peak demand is used by the company for electric supply planning purposes.

Electric Supply

The electricity O&R sold to its full-service customers in 2020 was purchased under firm power contracts or through the wholesale electricity market. The company expects that these resources will again be adequate to meet the requirements of its customers in 2021. O&R does not own any electric generating capacity. The company plans to meet its continuing obligation to supply electricity to its customers through a combination of electricity purchased under contracts or purchased through the wholesale electricity market. To reduce the volatility of its customers’ electric energy costs, the company has contracts to purchase electric energy and enters into derivative transactions to hedge the costs of a portion of its expected purchases. For information about the company’s contracts, see Note P to the financial statements in Item 8.

In general, the Utilities recover their costs of purchasing power for full service customers, including the cost of hedging purchase prices, pursuant to rate provisions approved by the state public utility regulatory authority having jurisdiction. See “Financial and Commodity Market Risks – Commodity Price Risk,” in Item 7 and “Recoverable Energy Costs” in Note A to the financial statements in Item 8. From time to time, certain parties have petitioned the NYSPSC to review these provisions, the elimination of which could have a material adverse effect on the Companies’ financial position, results of operations or liquidity.

Gas Operations

Gas Facilities

O&R’s capitalized costs for utility plant, net of accumulated depreciation for gas facilities, which are primarily distribution facilities, were $684 million and $656 million at December 31, 2020 and 2019, respectively. Natural gas

CON EDISON ANNUAL REPORT 2020 27

is delivered by pipeline to O&R at various points in or near its service territory and is distributed to customers by the company through an estimated 1,879 miles of mains and 106,701 service lines.

Gas Sales and Deliveries

O&R generally recovers the cost of the gas that it buys and then sells to its full-service customers. It does not make any margin or profit on the gas it sells. O&R’s gas revenues are subject to a weather normalization clause and to a revenue decoupling mechanism. As a result, its gas delivery revenues are generally not affected by changes in delivery volumes from levels assumed when rates were approved. O&R’s gas sales and deliveries for the last five years were:

Year Ended December 31,

Gas Delivered (MDt)

Firm sales

Transportation of customer-owned gas

Sales to electric generating stations 18 9 1 4 59

Year Ended December 31,

Gas Delivered ($ in millions)

Firm sales

Interruptible Sales 3 7 6 6 6

Transportation of customer-owned gas

Sales to electric generating stations — — — — —

Average Revenue Per Dt Sold

For further discussion of the company’s gas operating revenues and its gas results, see “Results of Operations” in Item 7. For additional segment information, see Note O to the financial statements in Item 8.

Gas Peak Demand

The gas actual peak day demand for firm sales customers in O&R’s service area occurs during the winter heating season and during the winter of 2020/2021 (through January 31, 2021) occurred on January 29, 2021 when the firm sales customers' demand reached approximately 181 MDt. “Design Weather” for the gas system is a standard to which the actual peak demand is adjusted for evaluation and planning purposes. The company estimates that, under design weather conditions, the 2021/2022 service area peak day demand for firm sales customers will be 232 MDt. The forecasted peak day demand at design conditions does not include gas used by interruptible gas customers including electric generating stations. The company forecasts an average annual growth of the gas peak day demand for firm sales customers over the next five years at design conditions to be approximately 0.2 percent in its service area, including the effect of certain gas energy efficiency programs. The five-year forecast in peak demand is used by the company for gas supply planning purposes.

28 CON EDISON ANNUAL REPORT 2020

Gas Supply

O&R and CECONY have combined their gas requirements and purchase contracts to meet those requirements into a single portfolio. See “CECONY – Gas Operations – Gas Supply” above.

CON EDISON ANNUAL REPORT 2020 29

Clean Energy Businesses

The following table provides information about the Clean Energy Businesses' renewable electric production projects that are in operation and/or in construction at December 31, 2020:

Utility Scale

Solar

PJM assets 73 (d) 2011/2013 New Jersey/Pennsylvania Various

New England assets 24 Various 2011/2017 Massachusetts/Rhode Island Various

Texas Solar 4 (e) 40 25 2014 Texas City of San Antonio

Texas Solar 5 (e) 100 25 2015 Texas City of San Antonio

Texas Solar 7 (e) 112 25 2016 Texas City of San Antonio

Upton Solar (e) 158 25 2017 Texas City of Austin

Copper Mountain Solar 1 (e) 58 12 2018 Nevada PG&E

Copper Mountain Solar 4 (e) (f) 94 20 2018 Nevada SCE

Mesquite Solar 3 (e) (f) 150 23 2018 Arizona WAPA (U.S. Navy)

Great Valley Solar (e) (f) 200 17 2018 California MCE/SMUD/PG&E/SCE

Other 26 Various Various Various Various

Wind

Broken Bow II (e) 75 25 2014 Nebraska NPPD

Wind Holdings (e) 180 Various Various South Dakota/ Montana NWE/Basin Electric

Adams Rose Wind (e) 23 7 2016 Minnesota Dairyland

Other 34 Various Various Various Various

Total MW (AC) in Operation 2,809

Total MW (AC) in Construction (g) 431

Total MW (AC) Utility Scale 3,240

Behind the Meter

Total MW (AC) in Operation 59

Total MW (AC) in Construction 11

Total MW Behind the Meter 70

(a)Represents PPA contractual term or remaining term from the date of acquisition.

(b)Represents Actual/Expected In-Service Date or date of acquisition.

(c)PPA Counterparties include: PG&E, Southern California Public Power Authority (SCPPA), Southern California Edison Company (SCE), Western Area Power Administration (WAPA), Marin Clean Energy (MCE), Sacramento Municipal Utility District (SMUD), Nebraska Public Power District (NPPD) and NorthWestern Energy (NWE). For information about PG&E’s bankruptcy, see “Long-Lived and Intangible Assets” in Note A to the financial statements in Item 8.

(d)Solar renewable energy credit hedges are in place, in lieu of power purchase agreements, through 2024.

(e)Project has been pledged as security for project debt financing. See Con Edison's Consolidated Statement of Capitalization in Item 8.

(f)Projects are financed with tax equity. See Note R to the financial statements in Item 8.

(g)Projects in construction are being financed under a variable-rate construction loan facility that matures no later than November 2021. See Note D to the financial statements in Item 8.

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Renewable Electric Generation

The Clean Energy Businesses develop, own and operate renewable and sustainable energy infrastructure projects. In December 2018, the Clean Energy Businesses acquired Sempra Solar Holdings, LLC to expand the company's renewable energy asset portfolio. See Note V to the financial statements in Item 8. The Clean Energy Businesses focus their efforts on utility scale renewable electric production projects. The output of most of the projects is sold under long-term power purchase agreements (PPA) with utilities and municipalities. The following table shows the generating capacity (MW AC) of the Clean Energy Businesses' utility scale renewable electric production projects in operation at the end of the last five years:

Renewable electric volumes produced by utility scale assets for the years ended December 31, 2017, 2018, 2019, and 2020 were:

Millions of kWh Produced

For the Years Ended December 31,

Renewable electric production projects

CON EDISON ANNUAL REPORT 2020 31

Energy-Related Products and Services

The Clean Energy Businesses provide services to manage the dispatch, fuel requirements and risk management activities for 11,114 MW of generating plants and merchant transmission in the northeastern United States owned by unrelated parties, manage energy supply assets leased from others and provide wholesale hedging and risk management services to renewable electric production projects owned by their subsidiaries.

The Clean Energy Businesses also provide energy-efficiency services to government and commercial customers. The services include the design and installation of lighting retrofits, high-efficiency heating, ventilating and air conditioning equipment and other energy saving technologies.

For information about the Clean Energy Businesses' results, see "Results of Operations" in Item 7 and Note O to the financial statements in Item 8.

Con Edison Transmission

CET Electric

CET Electric owns a 45.7 percent interest in New York Transco LLC (NY Transco). Affiliates of certain other New York transmission owners own the remaining interests.

NY Transco's Transmission Owner Transmission Solutions (TOTS) projects were approved by the NYSPSC in October 2013 in its proceeding to address potential needs that could arise should the Indian Point Energy Center (which is owned by Entergy Corporation subsidiaries) no longer operate. See “CECONY - Electric Operations - Electric Supply,” above.

In April 2015, the FERC issued an order granting certain transmission incentives for the NY Transco TOTS projects. In March 2016, the FERC approved a November 2015 settlement agreement that provides, in relation to the TOTS projects described above, a 10 percent return on common equity (which is comprised of 9.5 percent base return on equity plus an additional 50 basis points) and a maximum actual common equity ratio of 53 percent. The revenues for these TOTS projects costs are collected by the NYISO and allocated across New York State, with 63 percent allocated to load serving entities in the CECONY and O&R service areas.

In December 2015, the NYSPSC issued an order in its competitive proceeding to select AC transmission projects that would relieve transmission congestion between upstate and downstate. The NYSPSC determined that there was a public policy need for new transmission to address congestion and directed the NYISO, under its FERC-approved public policy planning process, to request developers to submit transmission project proposals for two segments of the transmission system. In April 2019, the New York Independent System Operator (NYISO) selected a project that was jointly proposed by National Grid and NY Transco ($600 million estimated cost, excluding certain interconnection costs that are not yet determined) that would increase transmission capacity by 1,850 MW between upstate and downstate when combined with another developer’s project that was also selected by the NYISO. The siting, construction and operation of the projects will require approvals and permits from appropriate governmental agencies and authorities, including the NYSPSC. The NYISO and National Grid/NY Transco entered into an agreement for the development and operation of the project, referred to as the New York Energy Solution (NYES) project, that is scheduled for entry into service by December 2023. In November 2017, FERC approved a settlement agreement with respect to the National Grid/NY Transco project that provides for a 10.65 percent return on common equity (which is comprised of a 9.65 percent base ROE, with 100 basis points added for congestion reduction and a cost containment mechanism applicable to certain capital costs) and a maximum actual common equity ratio of 53 percent. Revenues for the NYES project are collected by the NYISO including 100 percent of construction work-in-progress, and are allocated across New York State with 84 percent allocated to load serving entities in the CECONY and O&R service areas.

CET Gas

CET Gas, through its subsidiaries, owns a 50 percent interest in Stagecoach Gas Services LLC (Stagecoach), a 71.2 percent interest in Honeoye Storage Corporation (Honeoye) and an interest, described below, in Mountain Valley Pipeline LLC (MVP).

Stagecoach is a joint venture with a subsidiary of Crestwood Equity Partners LP (Crestwood) to own, operate and further develop a gas pipeline and storage business located in northern Pennsylvania and southern New York. Stagecoach provides services to its customers (including CECONY, see Note T to the financial statements in Item 8) through its 181 miles of pipe and 41 Bcf of storage capacity. Con Edison is considering strategic alternatives with respect to its 50 percent interest in Stagecoach Gas Services, LLC. Honeoye, in which CECONY owns the remaining interest, operates a gas storage facility in upstate New York.

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MVP is a joint venture with four other partners to construct and operate a proposed 300-mile gas transmission project in West Virginia and Virginia. CET Gas owns an 11.3 percent interest in the joint venture, that is expected to be reduced to 8.8 percent based on the current project cost estimate and CET Gas’ previous capping of its cash contributions to the joint venture. CET Gas recorded a pre-tax impairment loss of $320 million ($223 million after-tax) for the year ended December 31, 2020 that reduced the carrying value of its investment in MVP from $662 million to $342 million. See "Investments - Partial Impairment of Investment in Mountain Valley Pipeline" in Note A to the financial statements in Item 8

For information about Con Edison Transmission's results, see "Results of Operations" in Item 7 and Note O to the financial statements in Item 8.

Capital Requirements and Resources

Capital Requirements

The following table contains the Companies’ capital requirements for the years 2018 through 2020 and their current estimate of amounts for 2021 through 2023:

Actual Estimate

CECONY (a)(b)

O&R

Con Edison Transmission

Retirement of long-term securities

(a)CECONY’s capital expenditures for environmental protection facilities and related studies were $490 million, $507 million and $491 million in 2018, 2019 and 2020, respectively, and are estimated to be $674 million in 2021.

(b)Amounts shown do not include amounts for the energy efficiency, demand reduction and combined heat and power programs.

The Utilities have an ongoing need to make substantial capital investments primarily to maintain the reliability of their electric, gas and steam delivery systems. Their estimated construction expenditures also reflect programs that will give customers greater control over their energy usage and bills, help integrate customers' new clean energy technologies into the Utilities’ electric delivery systems and accelerate the replacement of leak-prone gas distribution mains and service lines.

Estimated capital expenditures for Con Edison Transmission primarily reflect planned investments in electric transmission projects. Estimated capital expenditures for the Clean Energy Businesses primarily reflect planned investments in renewable electric production projects. Actual capital expenditures for Con Edison Transmission and the Clean Energy Businesses could increase or decrease significantly from the amounts estimated depending on opportunities.

Contractual Obligations

The following table summarizes the Companies’ material obligations at December 31, 2020 to make payments pursuant to contracts. Long-term debt, capital lease obligations and other noncurrent liabilities are included on their

CON EDISON ANNUAL REPORT 2020 33

balance sheets. Operating leases and electricity purchase agreements (for which undiscounted future annual payments are shown) are described in the notes to the financial statements.

Payments Due by Period

(Millions of Dollars) Total 1 yearor less Years2 & 3 Years4 & 5 After 5years

Long-term debt (Statement of Capitalization)

Finance lease obligations (Note J)

CECONY 2 1 1 — —

O&R 1 — — — 1

Total capital lease obligations 3 1 1 — 1

Operating leases (Note J)

Purchase obligations

Electricity power purchase agreements – Utilities (Note I)

CECONY

O&R

Energy and Capacity (b) 119 63 56 — —

Natural gas supply, transportation, and storage contracts – Utilities (c)

CECONY

O&R

Natural gas supply 26 16 10 — —

Other purchase obligations

(a)Includes interest on variable rate debt calculated at rates in effect at December 31, 2020.

(b)Included in these amounts is the cost of minimum quantities of energy that the Utilities are obligated to purchase at both fixed and variable prices.

(c)Included in these amounts is the cost of minimum quantities of natural gas supply, transportation and storage that the Utilities are obligated to purchase at both fixed and variable prices.

(d)Amounts shown for other purchase obligations, which reflect capital and operations and maintenance costs incurred by the Utilities in running their day-to-day operations, were derived from the Utilities’ purchasing system as the difference between the amounts authorized and the amounts paid (or vouchered to be paid) for each obligation. For many of these obligations, the Utilities are committed to purchase less than the amount authorized. Payments for the “Other Purchase Obligations” are generally assumed to be made ratably over the term of the obligations. Long-term Purchase Obligations, which comprises $5,741 million of "Other Purchase Obligations," were derived from the Utilities' purchasing system by using a method that identifies the remaining purchase obligations. The Utilities believe that unreasonable effort and expense would be involved to enable them to report their “Other Purchase Obligations” in a different manner.

(e)Amounts represent commitments by the Clean Energy Businesses to purchase minimum quantities of electric energy and capacity, renewable energy certificates, natural gas, natural gas pipeline capacity, energy efficiency services and construction services. The Clean

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