Summary
Consolidated Edison, Inc. (Con Edison) reported its third-quarter 2020 results, reflecting continued operations amidst the COVID-19 pandemic. The company's core utilities, CECONY and O&R, demonstrated resilience, though certain operational metrics were impacted by the pandemic. Con Edison's Clean Energy Businesses also contributed to the results, with ongoing development in renewable energy projects. The company highlighted its proactive measures in managing the impacts of COVID-19, including regulatory relief and financial adjustments. Con Edison's financial position remains stable, supported by its regulated utility operations and strategic investments in clean energy. Management emphasized its commitment to shareholder value through dividend growth and reliable energy delivery, while navigating the evolving regulatory and economic landscape.
Financial Highlights
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Financial Statements
Beta
| Revenue | $3.33B |
| Operating Expenses | $2.47B |
| Operating Income | $860.00M |
| Interest Expense | $226.00M |
| Net Income | $493.00M |
| EPS (Basic) | $1.47 |
| EPS (Diluted) | $1.47 |
| Shares Outstanding (Basic) | 334.50M |
| Shares Outstanding (Diluted) | 335.40M |
Key Highlights
- 1Net income for common stock for the three months ended September 30, 2020, was $493 million, an increase from $473 million in the prior year period, resulting in earnings per share of $1.47, up from $1.42.
- 2CECONY's electric operating income increased by $10 million to $813 million for the three months ended September 30, 2020, primarily driven by higher purchased power expenses and increases in depreciation, property taxes, and other tax matters, partially offset by lower other operations and maintenance expenses.
- 3The COVID-19 pandemic led to foregone revenues of approximately $21 million and $44 million for CECONY in the three and nine months ended September 30, 2020, respectively, due to the suspension of service disconnections and certain fees.
- 4The company is managing regulatory impacts of COVID-19, including deferrals for uncollectible accounts and summer cooling credit costs, with plans to recover these costs from customers over time.
- 5The Clean Energy Businesses contributed positively, with operating revenues at $222 million for the three months ended September 30, 2020, despite a decrease from the prior year, reflecting strategic growth in renewable energy projects.
- 6Con Edison Transmission continues to invest in infrastructure projects, including a stake in the Mountain Valley Pipeline, though subject to regulatory approvals and project cost escalations.
- 7The company maintained stable liquidity, with $820 million outstanding under a supplemental credit agreement and $2,200 million available under a larger credit agreement.
Frequently Asked Questions
The COVID-19 pandemic has influenced Con Edison's financial performance through various channels, including foregone revenues due to suspended service disconnections and late fees, estimated at $21 million and $44 million for CECONY in the three and nine months ended September 30, 2020, respectively. The company has also incurred costs related to customer assistance programs, such as the summer cooling credit program, which are being deferred for future recovery from customers. While peak electricity demand was lower than forecasted due to pandemic impacts, the company's revenue decoupling mechanisms help mitigate volume-related revenue fluctuations for its New York electric and gas businesses.
Con Edison faces significant regulatory challenges, including potential retirement mandates for fossil-fueled electric generating units in New York City by 2023 or 2025 due to new environmental regulations limiting nitrous oxides (NOx) emissions. Compliance may require substantial investment in emission controls or retirement, with estimated costs of approximately $860 million for local reliability needs. Additionally, CECONY is managing a temporary moratorium on new firm gas service in parts of Westchester County due to gas supply constraints, which is expected to be lifted upon completion of pipeline capacity expansion projects.
Con Edison's Clean Energy Businesses continue to develop, own, and operate renewable and energy infrastructure projects. The company is a significant owner of large-scale solar generation in the United States. While operating revenues for the Clean Energy Businesses decreased in the third quarter of 2020 compared to the prior year, this segment remains a strategic growth area for the company, with ongoing investments in renewable electric production projects.
Con Edison maintains a stable liquidity position. As of September 30, 2020, the company had $820 million outstanding under a supplemental credit agreement and has access to a $2,200 million credit agreement. The company has been able to issue commercial paper as needed throughout the pandemic. Additionally, Con Edison's regulated utility rate plans, which include revenue decoupling mechanisms and provisions for deferring costs related to regulatory changes, provide a framework for managing financial impacts and ensuring cost recovery from customers.