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SEC Filing Summary: Consolidated Edison, Inc. (10-Q)

Business Context and Reporting Period

This Form 10-Q covers the quarterly period ended March 31, 2026, for Consolidated Edison, Inc. (Con Edison) and its wholly-owned subsidiary, Consolidated Edison Company of New York, Inc. (CECONY). Con Edison is a holding company operating regulated utility businesses (electric, gas, and steam) in New York City, Westchester County, southeastern New York, and northern New Jersey, alongside electric transmission investments. The report is a combined filing for both registrants.

Key Financial Metrics

Material Changes vs. Prior Period

• Revenue Growth: Total operating revenues increased $297 million (6.2%) year-over-year, driven by higher electric, gas, and steam revenues. CECONY electric revenues rose $72 million, while gas revenues increased $63 million.
• Profitability: Net income increased $133 million (16.8%). A significant driver was a $189 million pre-tax gain ($134 million after-tax) from the sale of Con Edison Transmission's 6.6% equity interest in Mountain Valley Pipeline, LLC (MVP).
• Operating Expenses: Total operating expenses rose $245 million. Notable increases included fuel costs ($62 million increase) and taxes other than income taxes ($88 million increase), partially offset by lower purchased power costs ($30 million decrease).
• Cash Flow: Net cash flows from operating activities decreased significantly by $663 million compared to Q1 2025. This decline was primarily due to higher recoverable energy costs ($348 million impact), increased prepayments ($137 million), and lower net deferred credits.
• Capital Expenditures: Utility capital expenditures were $1,172 million, a slight increase of $17 million from the prior year.

Guidance, Outlook, and Risks

• Asset Dispositions: Con Edison completed the sale of its MVP interest in Q1 2026. In April 2026, an agreement was reached to sell interests in Honeoye Storage Corporation for $5 million, pending regulatory approval.
• Regulatory Matters:
  • Steam Rates: CECONY filed for a $66 million steam rate increase effective November 1, 2026. The NYSDPS has submitted testimony supporting a lower increase of $18 million.
  • Weld Investigation: An ongoing investigation into non-conforming gas and steam main welds continues. While no significant operational impact is anticipated, recovery of certain costs is subject to refund mechanisms.
  • Tax Audit: A focused operations audit regarding income tax accounting for plant retirement costs is ongoing. The Utilities have accrued regulatory assets but cannot estimate potential losses if regulators require a write-down.
• Legislative Impact: The "One Big Beautiful Bill Act" (OBBBA) signed in July 2025 is not expected to have a material impact on financial position. The Corporate Alternative Minimum Tax (CAMT) under the Inflation Reduction Act resulted in a $53 million liability for Con Edison at March 31, 2026, offset by a deferred tax asset.
• Risks: Key risks include regulatory penalties, cyber attacks, supply chain disruptions, inflation, and the impact of climate change on infrastructure. Aged accounts receivable balances remain elevated, impacting liquidity.

Investor Verification Checklist

• MVP Sale Proceeds: Verify the final closing adjustments and net cash proceeds from the Mountain Valley Pipeline sale, which significantly boosted Q1 earnings.
• Operating Cash Flow Variance: Investigate the $663 million year-over-year decline in operating cash flow, specifically the impact of recoverable energy costs and prepayments.
• Regulatory Asset Recovery: Monitor the outcome of the NYSPSC audit regarding income tax accounting and the steam rate case, as these could impact future revenue requirements.
• Aged Receivables: Review the $1.352 billion in aged accounts receivable (over 60 days) for CECONY and its impact on future liquidity and bad debt provisions.
• Capital Expenditure Plan: Confirm the trajectory of utility capital expenditures ($1.172 billion in Q1) against the company's long-term investment plan for grid modernization and clean energy.