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CONSOLIDATED EDISON INC 8-K Report, Corporate Update (May 17, 2024)

Filed May 17, 2024For Securities:ED

Summary

Consolidated Edison Inc. (ED) announced on May 17, 2024, that the New York State Public Service Commission (NYPSC) denied a petition from its subsidiary, Consolidated Edison Company of New York, Inc. (CECONY), to capitalize costs exceeding a $421 million cap for its new customer billing and information system. CECONY's final costs for the project reached approximately $509 million as of March 31, 2024, which is $88 million over the approved rate plan cap. This denial will result in CECONY expensing approximately $50 million in incremental costs during the second quarter of 2024, in addition to a $38 million reserve established previously. CECONY believes these incremental costs were necessary for successful system deployment and is currently reviewing the NYPSC's order and considering potential next steps. Investors should monitor the company's response and any potential impact on future earnings.

Key Highlights

  • 1NYPSC denied CECONY's petition to capitalize costs exceeding the $421 million cap for its new customer billing system.
  • 2CECONY's new system costs reached $509 million as of March 31, 2024, $88 million over the cap.
  • 3CECONY will expense approximately $50 million in incremental costs in Q2 2024 due to the denial.
  • 4An additional $38 million reserve established at December 31, 2023, will also be recognized.
  • 5CECONY believes the incremental costs were justified for system deployment.
  • 6The company is reviewing the NYPSC order and evaluating its options.

Frequently Asked Questions

Consolidated Edison Company of New York, Inc. (CECONY) will expense approximately $50 million in incremental costs during the second quarter of 2024, in addition to a previously established $38 million reserve. This means these costs will be recognized as expenses in the current period rather than being spread over time through capitalization.

The filing states that the NYPSC denied CECONY's petition because the costs incurred exceeded the $421 million cap established in CECONY's 2020-2022 electric and gas rate plans. Specific reasons for the denial beyond exceeding the cap are not detailed in this 8-K.

CECONY is currently reviewing the NYPSC's order and is considering its options. This could potentially include appealing the decision or exploring other regulatory avenues.

This directly impacts CECONY, a significant subsidiary of Consolidated Edison Inc. While the immediate impact is an increase in expenses for CECONY, the full financial implications will depend on the company's response and potential future regulatory actions. Investors should closely follow any further announcements or filings.