10-KPeriod: FY2001

CONSOLIDATED EDISON INC Annual Report, Year Ended Dec 31, 2001

Filed March 27, 2002For Securities:ED

Summary

Consolidated Edison, Inc. (Con Edison) and its subsidiaries reported for the fiscal year ended December 31, 2001. Con Edison, Inc. is a holding company with its primary operations through its regulated utility subsidiaries, Consolidated Edison Company of New York, Inc. (Con Edison of New York) and Orange and Rockland Utilities, Inc. (O&R). The company's business segments include regulated electric, gas, and steam operations, alongside its unregulated subsidiaries which focus on energy services, trading, development, and telecommunications. The company's financial performance reflects significant rate reductions implemented in its electric segment, lower energy costs contributing to improved operating income compared to the previous year, and the impact of warmer weather on energy sales. Key developments during the year included the sale of most of Con Edison of New York's electric generating capacity and its nuclear generating unit, which impacted financial reporting through gains and losses that were deferred as regulatory assets and liabilities. The company also noted the impact of the September 11, 2001 attacks on its facilities, with significant costs incurred for restoration and permanent replacement of damaged infrastructure, which are being managed through insurance and regulatory deferrals for future recovery from customers. Overall, Con Edison's operational focus remains on providing essential energy services while navigating industry restructuring and managing capital requirements for infrastructure improvements and reliability.

Key Highlights

  • 1Consolidated Edison, Inc. (Con Edison) operates through its primary regulated utility subsidiaries, Con Edison of New York and Orange and Rockland Utilities, Inc. (O&R).
  • 2The company's business is diversified across regulated electric, gas, and steam segments, supplemented by unregulated subsidiaries in energy services, trading, and telecommunications.
  • 3Con Edison of New York implemented electric rate reductions totaling $209 million on an annualized basis in 2001, as part of ongoing restructuring agreements.
  • 4The company completed the sale of most of its electric generating capacity and its nuclear generating unit during 2001, resulting in deferred gains and losses treated as regulatory assets/liabilities.
  • 5The September 11, 2001, terrorist attacks caused damage to Con Edison of New York's infrastructure, with estimated costs of $400 million for restoration, partially offset by insurance and regulatory deferrals for customer recovery.
  • 6Operating income for 2001 showed improvement over 2000, partly due to lower energy costs and the absence of significant non-recurring charges from the prior year.
  • 7The company is subject to extensive federal and state regulation, and regulatory changes or deregulation in the energy industry could materially affect its operations.

Frequently Asked Questions

Con Edison's primary business segments are its regulated electric, gas, and steam utility operations in New York City and Westchester County, as well as electric and gas utility services in parts of New Jersey and Pennsylvania through Orange and Rockland Utilities, Inc. It also operates unregulated subsidiaries involved in energy services, energy trading, project development, and telecommunications.

The September 11 attacks damaged Con Edison of New York's electric, gas, and steam facilities, with estimated costs of $400 million for emergency response, temporary restoration, and permanent replacement. The company expects to recover these costs, net of insurance and potential federal reimbursement, through customer rates, with a portion of costs capitalized and deferred as regulatory assets.

Yes, Con Edison of New York reduced its electric rates by $209 million on an annualized basis in April 2001, as part of restructuring agreements. Combined with previous decreases, electric rates have been reduced by $691 million on an annualized basis since its 1997 Restructuring Agreement.

Con Edison has largely divested its electric generating capacity. In 2001, it completed the sale of its interest in the Roseton generating station and its nuclear generating unit. The financial impact of these sales, including gains and losses, has been deferred as regulatory assets and liabilities.