8-KRegulation FDOther EventsExhibits & Filings

CONSOLIDATED EDISON INC 8-K Report, Regulation FD Disclosure (May 8, 2009)

Filed May 8, 2009For Securities:ED

Summary

Consolidated Edison, Inc. (ED) filed an 8-K on May 8, 2009, to report that its subsidiary, Consolidated Edison Company of New York, Inc. (Con Edison of New York), has submitted a request to the New York State Public Service Commission (PSC) for a three-year electric rate plan. The primary proposal seeks level annual rate increases totaling $695 million, commencing in April 2010, 2011, and 2012. This plan is designed with a target return on common equity of 11.60% and a common equity ratio of 48.2%. An alternative, higher rate increase of $854 million, effective April 2010, is also presented, reflecting a 10.9% return on equity. This filing outlines the components of the requested increases, including property taxes, operating costs, infrastructure investments, pension and post-retirement benefits, and an increased return on equity. Key provisions requested for continuation include expense reconciliation mechanisms and a revenue decoupling mechanism, which separates profits from sales volumes. The company is also addressing PSC directives regarding austerity measures, proposing placeholder savings that are subject to further refinement.

Key Highlights

  • 1Con Edison of New York filed a three-year electric rate plan with the NY PSC on May 8, 2009.
  • 2The primary proposal seeks annual rate increases of $695 million for April 2010, 2011, and 2012.
  • 3The plan aims for an 11.60% return on common equity and a 48.2% common equity ratio.
  • 4An alternative filing proposes a larger $854 million increase in April 2010.
  • 5The filing details reasons for the proposed increases, such as property taxes, investments, and operating costs.
  • 6Continuation of expense reconciliation and revenue decoupling mechanisms is requested.
  • 7Austerity measures totaling $30 million for FY2011 are included as a placeholder.

Frequently Asked Questions

The main purpose of this 8-K filing is to inform investors that Consolidated Edison Company of New York, Inc. has officially filed a request with the New York State Public Service Commission (PSC) for a new three-year electric rate plan.

The company proposes level annual electric rate increases of $695 million, effective in April of 2010, 2011, and 2012. An alternative proposal for a single increase of $854 million effective April 2010 is also presented.

The requested increases are driven by several factors, including recovery of increased property taxes, additional operating costs, new and expanded operating programs, carrying charges on infrastructure investments, increased pension and post-retirement benefit costs, and a higher authorized return on equity.

Yes, the filing mentions the continuation of the revenue decoupling mechanism, which removes the direct link between sales volume and profits. It also requests provisions for deferring certain expense increases as regulatory assets if annual returns fall below authorized levels.