Business Context and Reporting Period
This Form 8-K, dated September 4, 2026, reports a regulatory event involving Consolidated Edison, Inc. (Con Edison) and its subsidiary, Consolidated Edison Company of New York, Inc. (CECONY). The filing details a joint proposal submitted to the New York State Department of Public Service (NYSDPS) regarding a three-year steam rate plan effective from November 1, 2026, through October 31, 2029. The proposal is subject to approval by the New York State Public Service Commission (NYSPSC).
Key Financial Metrics and Proposal Details
The filing outlines specific financial parameters for the proposed steam rate plan, including base rate changes, capital expenditures, and cost of capital assumptions.
| Metric | Year 1 (2026-2027) | Year 2 (2027-2028) | Year 3 (2028-2029) |
|---|---|---|---|
| Base Rate Changes | $13 million | $42 million | $39 million |
| Capital Expenditures | $143 million | $127 million | $126 million |
| Amortizations to Income | $8 million | $8 million | $8 million |
| Negative Revenue Adjustments | $4.3 million | $4.5 million | $4.7 million |
| Net Utility Plant Reconciliations | $2,147 million | $2,165 million | $2,145 million |
| Average Rate Base | $2,118 million | $2,234 million | $2,311 million |
| Weighted Average Cost of Capital (After-Tax) | 7.07% | 7.14% | 7.19% |
| Cost of Long-Term Debt | 4.86% | 5.00% | 5.10% |
Additional Terms:
- Authorized Return on Common Equity: 9.5%
- Common Equity Ratio: 48%
- Customer Bill Impact: Shaped to result in a consistent 3.5% total bill impact annually.
- Earnings Sharing: Most earnings above a 10% annual threshold will be applied to reduce regulatory assets for environmental remediation.
Material Changes and Regulatory Mechanisms
The proposal introduces several regulatory mechanisms to manage costs and performance:
- Weather Normalization: Continuation of adjustments to reflect normal weather conditions during the heating season.
- Cost Recovery: Continuation of current rate recovery for purchased power and fuel costs.
- Performance Incentives: Potential negative revenue adjustments (charges) if targets for service, reliability, and safety are not met.
- Reconciliations: Mechanisms to reconcile expenses for pension benefits, variable-rate debt, property taxes, municipal infrastructure support, and environmental remediation.
- Property Tax Surcharge Cap: Annual surcharge recoveries for property tax variations are capped at 0.5% of the total customer bill impact (estimated at $3.8 million to $4.0 million annually).
Outlook, Risks, and Contingencies
Approval Status: The Joint Proposal is not yet effective; it requires approval by the NYSPSC. New rates will be effective November 1, 2026, upon approval.
Regulatory Audits and Contingencies:
- Steam Main Welds: $0.5 million in annual steam revenue requirement is subject to refund based on the NYSDPS review of CECONY's steam main welds.
- Income Tax Accounting: The NYSDPS is conducting a focused operations audit of CECONY's income tax accounting. Any adjustments ordered by the NYSPSC will be refunded to or collected from customers.
- Forward-Looking Statements: The filing includes standard disclaimers that actual results may differ materially due to various factors.
Key Facts for Investor Verification
- Verify the final approval status and effective date of the Joint Proposal by the NYSPSC.
- Monitor the outcome of the NYSDPS audit regarding CECONY's income tax accounting and steam main welds, as these could result in refunds or additional collections.
- Track the implementation of the 3.5% shaped bill impact and the associated base rate increases.
- Observe the performance of CECONY against service, reliability, and safety targets to assess potential negative revenue adjustments.
- Review future filings for updates on the reconciliation of property taxes and municipal infrastructure support costs.