8-KOther Events

CONSOLIDATED EDISON INC 8-K Report (Nov 21, 2003)

Filed November 21, 2003For Securities:ED

Summary

Consolidated Edison, Inc. (ED) filed a Current Report on Form 8-K on November 21, 2003, detailing significant rate increase requests by its subsidiary, Consolidated Edison Company of New York, Inc. (Con Edison of New York), with the New York State Public Service Commission (PSC). The company is seeking to increase charges for gas and steam services, totaling $108 million for gas and $129 million for steam, effective October 2004. These proposed increases are presented as necessary for critical infrastructure upgrades, including the East River Repowering Project, to ensure safe and reliable service, and to allow the company to earn a reasonable return for shareholders in light of rising operating expenses such as pension and benefit costs, and property taxes. The rate filings also propose a multi-year rate plan extending through September 2007, with adjustments for inflation and specific cost changes in subsequent years. The company is requesting a return on equity of 12 percent and an equity ratio of 49.3 percent, anticipating modest increases in gas sales volumes. This contrasts with recent rate agreements that saw a decrease in gas charges and a smaller increase in steam charges.

Key Highlights

  • 1Con Edison of New York has filed requests with the NY PSC to increase gas charges by $108 million (approx. 9.8%) and steam charges by $129 million (approx. 14.6% net of fuel savings) effective October 2004.
  • 2The proposed rate increases are intended to fund critical infrastructure upgrades, including the East River Repowering Project, and to offset rising operating expenses.
  • 3The company is seeking to earn a 12 percent return on equity (ROE) and maintain an equity ratio of 49.3 percent.
  • 4A multi-year rate plan is proposed, extending through September 2007, with adjustments for inflation and other cost factors in subsequent years.
  • 5The filings assume modest annual increases in firm gas sales and transportation volumes, with no increase in steam sales.
  • 6This filing follows recent rate agreements that resulted in a $25 million decrease in gas charges and a $16.6 million increase in steam charges.

Frequently Asked Questions

The primary purpose of this 8-K filing is to inform investors that Consolidated Edison Company of New York, Inc. has formally requested significant increases in gas and steam service charges from the New York State Public Service Commission (PSC). These increases are needed to fund infrastructure improvements and to allow the company to achieve a reasonable return for its shareholders.

Consolidated Edison Company of New York is proposing to increase gas charges by $108 million (an estimated 9.8%) and steam charges by $129 million (an estimated 14.6%, after accounting for fuel savings from the East River Repowering Project). These increases are requested to be effective starting October 2004.

The company cites the necessity of upgrading and maintaining critical infrastructure to meet future energy demands and ensure safe, reliable service. This includes funding projects like the East River Repowering Project. Additionally, the increases are needed to provide a reasonable return to shareholders in light of rising pension and benefit expenses, property taxes, and other operating costs.

The company is proposing a multi-year rate plan that would extend the proposed charge levels through September 2007. Under this plan, charges would be adjusted annually starting in October 2005 to reflect inflation, changes in pension and health insurance expenses, property taxes, capital expenditures, environmental expenditures, and other specified costs.