Consolidated Edison Inc: Form 10-Q for the period ended Jun 30, 2025

This combined management’s discussion and analysis of financial condition and results of operations (MD&A) relates to the consolidated financial statements (the Second Quarter Financial Statements) included in this report of two separate registrants: Consolidated Edison, Inc. (Con Edison) and Consolidated Edison Company of New York, Inc. (CECONY). As used in this report, the term the “Companies” refers to Con Edison and CECONY. CECONY is a subsidiary of Con Edison and, as such, information in this MD&A about CECONY applies to Con Edison.

This MD&A should be read in conjunction with the Second Quarter Financial Statements and the notes thereto and the MD&A in Item 7 of the Companies’ combined Annual Report on Form 10-K for the year ended December 31, 2024 (File Nos.1-14514 and 1-01217, the Form 10-K) and the MD&A in Part 1, Item 2 of the Companies' combined Quarterly Report on Form 10-Q for the quarterly period ended March 31, 2025 (File Nos. 1-14514 and 1-01217).

Information in any item of this report referred to in this discussion and analysis is incorporated by reference herein. The use of terms such as “see” or “refer to” shall be deemed to incorporate by reference into this discussion and analysis the information to which reference is made.

Con Edison, incorporated in New York State in 1997, is a holding company that owns all of the outstanding common stock of CECONY, Orange and Rockland Utilities, Inc. (O&R) and Con Edison Transmission, Inc. (together with its subsidiaries, “Con Edison Transmission”). As used in this report, the term the “Utilities” refers to CECONY and O&R.

Con Edison’s principal business operations are those of the Utilities and Con Edison Transmission. CECONY’s principal business operations are its regulated electric, gas and steam delivery businesses. O&R’s principal business operations are its regulated electric and gas delivery businesses. Con Edison Transmission, through its subsidiaries, invests in electric transmission projects and manages, through joint ventures, both electric and gas assets while seeking to develop electric transmission projects. Con Edison Transmission is considering strategic alternatives with respect to its investment in Mountain Valley Pipeline, LLC (MVP) and both Con Edison Transmission and CECONY are considering strategic alternatives with respect to their investments in Honeoye Storage Corporation (Honeoye). See “Investments” in Note A to the Second Quarter Financial Statements and “Con Edison Transmission” below.

Con Edison seeks to provide shareholder value through continued dividend growth, supported by earnings growth in regulated utilities and electric transmission assets. Con Edison invests to provide reliable, resilient, safe and clean energy critical for its New York and New Jersey customers. Con Edison is a responsible neighbor, helping the communities it serves become more sustainable.

In addition to the risks and uncertainties described in Item 1A and the Companies’ material contingencies described in Notes B, G and H to the Second Quarter Financial Statements, the Companies’ management considers the following events, trends, and uncertainties to be important to understanding the Companies’ current and future financial condition.

CECONY Electric and Gas Rate Plans

In January 2025, as updated in April 2025, CECONY filed requests with the NYSPSC for electric and gas rate increases of $1,608 million and $349 million, respectively, effective January 1, 2026. The filings reflect a return on common equity of 10 percent and a common equity ratio of 48 percent. In May 2025, the New York State Department of Public Service submitted testimony in the pending electric and gas rate case proceedings, supporting an electric rate increase of $319 million and a gas rate decrease of $45 million, reflecting, among other things, a 9.30 percent return on common equity and a common equity ratio of 48 percent. CECONY’s future earnings will depend on the rates authorized in, and the other provisions of, its January 2026 electric and gas rate plans and CECONY’s ability to operate its businesses in a manner consistent with such rate plans. Therefore, the outcome of CECONY’s rate requests, which require approval by the NYSPSC, will impact the Companies’ future financial condition, results of operations and liquidity. See “Rate Plans” in Note B to the Second Quarter Financial Statements.

Aged Accounts Receivable Balances

At June 30, 2025, CECONY’s and O&R’s customer accounts receivables balances of $2,892 million and $116 million, respectively, included aged accounts receivables (balances outstanding in excess of 60 days) of $1,530 million and $26 million, respectively. At December 31, 2024, CECONY’s and O&R’s customer accounts receivables balances of $2,947 million and $113 million, respectively, included aged accounts receivables (balances outstanding in excess of 60 days) of $1,652 million and $32 million, respectively. In comparison, CECONY’s and O&R’s customer accounts receivable balances at February 28, 2020 were $1,322 million and $89 million, respectively, including aged accounts receivables (balances outstanding in excess of 60 days) of $408 million and $15 million, respectively. Prior to the start of the COVID-19 pandemic, the Utilities’ practice was to write off customer accounts receivables as uncollectible 90 days after the account is disconnected for non-payment or the account is closed during the collection process. In general, the Utilities suspended collection activities and service disconnections during the COVID-19 pandemic and have since resumed such activities.

CECONY’s rate plans include reconciliation of late payment charges (from January 1, 2023 through December 31, 2025 for electric and gas and from January 1, 2020 through October 31, 2026 for steam) and write-offs of customer accounts receivable balances (from January 1, 2020 through December 31, 2025 for electric and gas and from January 1, 2020 through October 31, 2026 for steam) to amounts reflected in rates, with recovery/refund from or to customers via surcharge/sur-credit. CECONY's surcharge recoveries for late payment charges and write-offs of accounts receivable balances will, collectively, be subject to separate annual caps for electric and gas that produce no more than a half percent (0.5 percent) total customer bill impact per commodity (estimated for electric to be $57.3 million, $60.3 million, $62.6 million for 2023, 2024 and 2025, respectively, and for gas to be $14.8 million, $15.9 million and $16.8 million for 2023, 2024 and 2025, respectively). CECONY's surcharge recoveries for late payment charges and write-offs of accounts receivables for steam will each be subject to an annual cap that produces no more than a half percent (0.5 percent) total customer bill impact (estimated to be $2.5 million, $3.0 million and $3.5 million for 2024, 2025 and 2026, respectively). Amounts in excess of the surcharge caps will be deferred as a regulatory asset for recovery in CECONY’s next base rate cases.

O&R’s 2025 – 2027 rate plans include reconciliation of uncollectible expenses and late payment charges that are subject to a combined annual threshold of $0.9 million and $0.5 million for electric and gas, respectively. Once the threshold is met, O&R will defer the variance between actual uncollectible expense and late payment charge, and the level set forth in rates that is above the threshold. Recovery/refunds will be made via surcharge/sur-credit. Surcharge recovery is subject to an annual cap that produces no more than a 0.5 percent total customer bill impact per commodity. Amounts in excess of the surcharge caps will be deferred as a regulatory asset for recovery in O&R’s next base rate cases.

Although these regulatory mechanisms are currently in place, the Utilities’ ability to effectively manage their customer accounts receivable balances, and obtain recovery in rates for their respective carrying costs and any related write-offs could have a material impact on the Companies’ businesses. In addition, a continued increase in accounts receivable balances has impacted and is expected to continue to impact the Companies’ liquidity. See “Liquidity and Capital Resources,” below, and Note B and Note L to the Second Quarter Financial Statements.

In particular, CECONY, in an effort to reduce aged accounts receivables balances, plans to continue to execute on its integrated collections strategy, which includes, among other things, implementation of payment arrangements, enhanced digital and mail communications to customers regarding collections, increased field collections by recently having hired additional field collectors and increasing collector efficiency and employing additional call center representatives to handle in-bound call volumes and to place outbound calls to customers regarding collections. O&R's collection strategy aligns with that of CECONY's in many respects.

Electric Supply

Most of the electricity sold by CECONY to its full-service customers in 2025 was purchased through the wholesale electricity market administered by the NYISO. To reduce the volatility of its full-service customers’ electric energy costs, the company enters into derivative transactions to hedge the costs of a portion of its expected purchases through the NYISO’s wholesale electricity market.

The NYISO is interconnected with two Canadian system operators, Ontario’s Independent Electricity System Operator and Hydro-Québec, allowing for up to approximately 2500 MW and 2100 MW of imports from Ontario to New York and from Quebec to New York, respectively.

Beginning in February 2025, the President of the United States issued an executive order imposing a 10 percent tariff on most Canadian imports to the United States of “energy or energy resources.” This executive order took effect on March 4, 2025 with an exemption for goods compliant with the United States-Mexico-Canada Agreement. The federal government has not provided guidance regarding the applicability of tariffs to imported Canadian electricity and, as of June 30, 2025, no tariffs are being applied to electricity sales. In March 2025, Ontario announced a 25 percent surcharge on all U.S.-bound electricity that was subsequently paused.

These tariffs, if implemented, may result in increases in electric commodity prices. The Utilities do not make any margin or profit on the electricity they sell and generally recover these costs pursuant to their rate plans. See "Aged Accounts Receivable Balances," above and "Commodity Price Risk," below.

The Companies continue to monitor these developments closely, but are unable to predict changes in regulations, regulatory guidance, legal interpretations, policy positions and implementation actions that may result from these governmental actions.

Federal Regulation

Beginning in January 2025, a series of executive orders, presidential memoranda and proclamations were issued (collectively, Presidential Actions) designed to address areas such as tariffs, environmental and energy regulations, domestic energy production and retention of domestic generation resources, among other things. The situation remains fluid and is subject to rapid change.

In April 2025, an executive order was issued by the President of the United States that directs the Attorney General to identify and take action against state laws and policies that burden the use of domestic energy resources and that are unconstitutional, preempted by federal law, or otherwise unenforceable (the April 2025 Executive Order). The April 2025 Executive Order directs the Attorney General to identify and stop the enforcement of laws and policies purporting to address climate change or involving environmental, social and governance initiatives, environmental justice, carbon or greenhouse gas emissions and funds to collect carbon penalties or carbon taxes.

Although the recently imposed or increased tariffs have not had a significant impact on the Companies’ operations or financial condition to date, the cost of materials have increased during the second quarter of 2025 across various supply chain contract portfolios. These tariffs could raise costs for the Companies in the future and could potentially disrupt the supply chain. The Companies continue to monitor these developments closely to understand any potential impact on the Companies. The Companies are unable to predict changes in regulations, regulatory guidance, legal interpretations, policy positions and implementation actions that may result from the Presidential Actions and the April 2025 Executive Order.

Clean Energy Goals

The success of the Companies’ efforts to meet federal, state and city clean energy policy goals and the impact of energy consumers' efforts to meet such goals on CECONY’s electric, gas and steam businesses and O&R’s electric and gas businesses may impact the Companies’ future financial condition. The Utilities expect electric usage to increase and gas and steam usage to decrease in their service territories as federal, state and local laws and policies are enacted and implemented that aim to reduce the carbon intensity of the energy that is consumed in their respective jurisdictions. The Utilities’ and their regulators’ efforts to maintain electric reliability in their service territories as electric usage increases may also impact the Companies’ future financial condition. The long-term future of the Utilities’ gas businesses depends upon the role that natural gas or other gaseous fuels will play in facilitating New York State’s and New York City’s climate goals. In addition, the impact and costs from climate change impacts on the Utilities’ systems and the success of the Utilities’ efforts to maintain system reliability and manage service interruptions resulting from severe weather may impact the Companies’ future financial condition, results of operations and liquidity. See “Federal Regulation,” above.

Con Edison Transmission

Con Edison Transmission, through its New York Transco partnership and jointly with the New York Power Authority (NYPA), is developing the Propel NY Energy transmission project, a 90-mile electric transmission project that is expected to increase high voltage transmission connections between Long Island and the rest of New York State. Con Edison Transmission also participates in competitive solicitations to develop additional electric projects. The success of Con Edison Transmission’s efforts in these competitive solicitations and to grow its electric transmission portfolio may impact Con Edison’s future capital requirements. In January 2025, the President of the United States issued an executive order temporarily withdrawing all areas on the outer continental shelf from new offshore wind leasing, pending review by the new Administration, noting that nothing in this withdrawal affects rights under existing leases in the withdrawn areas, and further that with respect to such existing leases, the Secretary of the Interior, in consultation with the Attorney General as needed, shall conduct a comprehensive review of the ecological, economic, and environmental necessity of terminating or amending any existing wind energy leases. In July 2025, the NYSPSC issued an order withdrawing the public policy transmission need (PPTN) process given actions taken by the federal government that reduced the prospects for the construction of the offshore wind resources that were anticipated to be served by the proposed transmission solutions. See “Federal Regulation,” above and “Environmental Matters – Offshore Wind,” below.

Con Edison Transmission is considering strategic alternatives with respect to its investment in MVP and both Con Edison Transmission and CECONY are considering strategic alternatives with respect to their investments in Honeoye.

CECONY

Electric

CECONY provides electric service to approximately 3.7 million customers in all of New York City (except a part of Queens) and most of Westchester County, an approximately 660 square mile service area with a population of more than nine million.

Gas

CECONY delivers gas to approximately 1.1 million customers in Manhattan, the Bronx, parts of Queens and most of Westchester County.

In June 2025, CECONY increased its five-year forecast of average annual growth of the firm peak gas demand in its service area at design conditions from approximately 0.1 percent (for 2025 to 2029) to approximately 0.2 percent (for 2026 to 2030).

Steam

CECONY operates the largest steam distribution system in the United States by producing and delivering approximately 15,494 MMlb of steam annually to approximately 1,500 customers in parts of Manhattan.

In June 2025, CECONY changed its five-year forecast of the average annual peak steam demand in its service area at design conditions from a 0.4 percent decrease (for 2025 to 2029) to a 0.9 percent decrease (for 2026 to 2030). This percent change indicates lower customer retention for the steam system due to policy and regulations along with increased levels of energy efficiency within the next five years.

O&R

Electric

O&R and its utility subsidiary, Rockland Electric Company (RECO) (together referred to herein as O&R) provide electric service to approximately 0.3 million customers in southeastern New York and northern New Jersey an approximately 1,300 square mile service area.

Gas

O&R delivers gas to over 0.1 million customers in southeastern New York.

In June 2025, O&R increased its five-year forecast of the average annual firm peak gas demand in its service area at design conditions from a 0.1 percent decrease (for 2025 to 2029) to a 1.2 percent increase (for 2026 to 2030). This change reflects an increase in new business within the next five years.

Certain financial data of Con Edison’s businesses are presented below:

(Millions of Dollars, except percentages)

(a) Other includes the parent company, Con Edison’s tax equity investments, consolidation adjustments and Broken Bow II, the deferred project that was classified as held for sale at December 31, 2024, with the sale and transfer completed in January 2025. See Note Q to the Second Quarter Financial Statements.

One Big Beautiful Bill Act

On July 4, 2025, the One Big Beautiful Bill Act (OBBBA) was signed into law, containing a broad range of tax reform provisions, including extending and modifying certain key provisions of the federal Tax Cuts and Jobs Act of 2017, as enacted on December 22, 2017 (TCJA) and expanding certain incentives under the federal Inflation Reduction Act, as enacted on August 16, 2022 (IRA) while accelerating the phase-out of solar and wind credits. The Companies are assessing the potential impacts of the OBBBA and any such assessments may be impacted by future guidance to be issued by the Department of Treasury. However, based on management’s preliminary assessment, the provisions in the OBBBA are not expected to have a material impact on the Companies’ financial position, results of operations or liquidity.

Inflation Reduction Act

On August 16, 2022, the Inflation Reduction Act (IRA) was signed into law and implemented a new corporate alternative minimum tax (CAMT) that imposes a 15 percent tax on modified GAAP net income. Pursuant to the IRA, corporations are entitled to a tax credit (minimum tax credit) to the extent the CAMT liability exceeds the regular tax liability. This amount can be carried forward indefinitely and used in future years when regular tax liability exceeds the CAMT liability.

Beginning in 2024, based on the existing statute, the Companies are subject to and report the CAMT in their Consolidated Income Statements, Consolidated Statements of Cash Flows and the Consolidated Balance Sheets. As of June 30, 2025 and 2024, Con Edison accrued a CAMT liability of $73 million ($88 million for CECONY) and $23 million ($19 million for CECONY), respectively, before the application of general business credits, with an offsetting deferred tax asset representing the minimum tax credit carryforward. The deferred tax asset related to the minimum tax credit carryforward will be realized to the extent the Companies’ consolidated deferred tax liabilities exceed the minimum tax credit carryforward. The Companies’ deferred tax liabilities are expected to exceed the minimum tax credit carryforward for the foreseeable future and thus no valuation allowance is required. The Companies are continuing to assess the impacts of the IRA on their financial statements and will update estimates based on future guidance to be issued by the Department of the Treasury.

New York Legislation

In May 2025, New York adopted the 2025-2026 budget bill into law that included increases in payroll tax rates from 0.6 percent to 0.895 percent for CECONY and from 0.34 percent to 0.635 percent for O&R, effective July 1, 2025.

In April 2021, New York passed a law that increased the corporate franchise tax rate on business income from 6.5 percent to 7.25 percent, retroactive to January 1, 2021, for taxpayers with taxable income greater than $5 million. The law also reinstated the business capital tax at 0.1875 percent, not to exceed a maximum tax liability of $5 million per taxpayer. New York requires a corporate franchise taxpayer to calculate and pay the highest amount of tax under the three alternative methods: a tax on business income; a tax on business capital; or a fixed dollar minimum. The provisions to increase the corporate franchise tax rate and reinstate a capital tax were scheduled to expire after 2023. In May 2023, New York passed a law that extended the increase in the corporate franchise tax rate from 6.5 percent to 7.25 percent for an additional three years, through tax year 2026 and extended the business capital tax through tax year 2026. New York also passed a law establishing a permanent rate of 30 percent for the metropolitan transportation business tax surcharge. Con Edison does not expect to be subject to the higher tax rate of 7.25 percent in 2025.

Results of Operations

Net income for common stock and earnings per share for the three and six months ended June 30, 2025 and 2024 were as follows:

(Millions of Dollars, except per share amounts)

(a) Net income for common stock and earnings per share for the three and six months ended June 30, 2025 includes $2 million or $0.01 a share (after-tax) and $5 million or $0.02 a share (after-tax) for accretion of the basis difference of Con Edison's equity investment in MVP. See “Investment in MVP” in Note A to the Second Quarter Financial Statements.

(b) Other includes the parent company, Con Edison’s tax equity investments, consolidation adjustments and Broken Bow II, the deferred project that was classified as held for sale at December 31, 2024, with the sale and transfer completed in January 2025. Net income for common stock and earnings per share for the six months ended June 30, 2024 includes $(22) million (after-tax) or $(0.06) a share (after-tax) for an adjustment related to the sale of all of the stock of the Clean Energy Businesses. See Note Q to the Second Quarter Financial Statements.

(c) Earnings per share on a diluted basis were $0.68 a share and $0.58 a share for the three months ended June 30, 2025 and 2024, respectively, and $2.92 a share and $2.66 a share for the six months ended June 30, 2025 and 2024, respectively.

The following tables present the estimated effect of major factors on earnings per share and net income for common stock for the three and six months ended June 30, 2025 as compared with the 2024 period.

Variation for the Three Months Ended June 30, 2025 vs. 2024

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Variation for the Six Months Ended June 30, 2025 vs. 2024

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The Companies’ other operations and maintenance expenses for the three and six months ended June 30, 2025 and 2024 were as follows:

(a) Includes Demand Side Management, System Benefit Charges and Public Service Law 18A assessments that are collected in revenues.

(b) Other includes the impact of the May 2024 NYSPSC order denying CECONY's request to capitalize costs to implement its new customer billing and information system ($51 million).

(c) Other includes the parent company, Con Edison’s tax equity investments, consolidation adjustments and Broken Bow II, the deferred project that was classified as held for sale at December 31, 2024, with the sale and transfer completed in January 2025. See Note Q to the Second Quarter Financial Statements.

A discussion of the results of operations by principal business segment for the three and six months ended June 30, 2025 and 2024 follows. For additional business segment financial information, see Note M to the Second Quarter Financial Statements.

The Companies’ results of operations for the three months ended June 30, 2025 and 2024 were as follows:

(a) Other includes the parent company, Con Edison’s tax equity investments, consolidation adjustments and Broken Bow II, the deferred project that was classified as held for sale at December 31, 2024, with the sale and transfer completed in January 2025. See Note Q to the Second Quarter Financial Statements.

(b) Represents the consolidated results of operations of Con Edison and its businesses.

CECONY

Electric

CECONY’s results of electric operations for the three months ended June 30, 2025 compared with the 2024 period were as follows:

CECONY’s electric sales and deliveries for the three months ended June 30, 2025 compared with the 2024 period were:

(a) Revenues from electric sales are subject to a revenue decoupling mechanism, as a result of which delivery revenues generally are not affected by changes in delivery volumes from levels assumed when rates were approved.

(b) “Residential/Religious” generally includes single-family dwellings, individual apartments in multi-family dwellings, religious organizations and certain other not-for-profit organizations.

(c) Other electric operating revenues generally reflect changes in the revenue decoupling mechanism current asset or regulatory liability and changes in regulatory assets and liabilities in accordance with other provisions of CECONY's rate plan.

(d) After adjusting for variations, primarily weather and billing days, electric delivery volumes in CECONY’s service area increased 2.3 percent in the three months ended June 30, 2025 compared with the 2024 period.

Operating revenues increased $211 million in the three months ended June 30, 2025 compared with the 2024 period primarily due to an increase in revenues from the electric rate plan ($139 million) and higher purchased power expenses ($80 million), offset in part by lower operating revenue primarily driven by surcharge and lower deferral activity ($5 million).

Purchased power expenses increased $80 million in the three months ended June 30, 2025 compared with the 2024 period due to higher unit costs ($101 million), offset in part by lower purchased volumes ($21 million).

Fuel expenses increased $4 million in the three months ended June 30, 2025 compared with the 2024 period due to higher unit costs ($5 million), offset in part by lower purchased volumes from the company's electric generating facilities ($1 million).

Other operations and maintenance expenses decreased $35 million in the three months ended June 30, 2025 compared with the 2024 period primarily due to the impact of the May 2024 NYSPSC order denying CECONY's request to capitalize costs to implement its new customer billing and information system ($37 million).

Depreciation and amortization expenses increased $51 million in the three months ended June 30, 2025 compared with the 2024 period primarily due to higher electric utility plant balances.

Taxes, other than income taxes increased $71 million in the three months ended June 30, 2025 compared with the 2024 period due to higher property taxes ($62 million), higher state and local revenue taxes ($5 million) and higher payroll taxes ($2 million).

Gas

CECONY’s results of gas operations for the three months ended June 30, 2025 compared with the 2024 period were as follows:

CECONY’s gas sales and deliveries, excluding off-system sales, for the three months ended June 30, 2025 compared with the 2024 period were:

(a) Revenues from gas sales are subject to a weather normalization clause and a revenue decoupling mechanism as a result of which delivery revenues are generally not affected by changes in delivery volumes from levels assumed when rates were approved.

(b) After adjusting for variations, primarily billing days, firm gas sales and transportation volumes in CECONY’s service area increased 16.9 percent in the three months ended June 30, 2025 compared with the 2024 period.

(c) Other gas operating revenues generally reflect changes in the revenue decoupling mechanism and weather normalization clause current asset or regulatory liability and changes in regulatory assets and liabilities in accordance with other provisions of CECONY’s rate plan.

Operating revenues increased $115 million in the three months ended June 30, 2025 compared with the 2024 period primarily due to higher gas purchased for resale ($91 million) and an increase in gas revenues under the company's gas rate plan ($17 million).

Gas purchased for resale increased $91 million in the three months ended June 30, 2025 compared with the 2024 period due to higher unit costs ($101 million), offset in part by lower purchased volumes ($10 million).

Other operations and maintenance expenses decreased $13 million in the three months ended June 30, 2025 compared with the 2024 period primarily due to the impact of the May 2024 NYSPSC order denying CECONY's request to capitalize costs to implement its new customer billing and information system ($8 million) and lower gas operations costs ($7 million), offset in part by higher uncollectible expenses ($2 million).

Depreciation and amortization expenses increased $7 million in the three months ended June 30, 2025 compared with the 2024 period primarily due to higher gas utility plant balances.

Taxes, other than income taxes increased $29 million in the three months ended June 30, 2025 compared with the 2024 period primarily due to lower deferral of under-collected property taxes ($18 million), higher property taxes ($9 million) and higher state and local revenue taxes ($3 million).

Steam

CECONY’s results of steam operations for the three months ended June 30, 2025 compared with the 2024 period were as follows:

CECONY’s steam sales and deliveries for the three months ended June 30, 2025 compared with the 2024 period were:

Revenues in Millions

(a) Other steam operating revenues generally reflect changes in regulatory assets and liabilities in accordance with CECONY’s rate plan.

(b) After adjusting for variations, primarily weather and billing days, steam sales and deliveries in the company's service area decreased 4.4 percent in the three months ended June 30, 2025 compared with the 2024 period.

Operating revenues increased $18 million in the three months ended June 30, 2025 compared with the 2024 period primarily due to higher fuel expenses ($8 million), an increase in steam revenues under the company's steam rate plan ($6 million) and higher purchased power expenses ($1 million).

Fuel expenses increased $8 million in the three months ended June 30, 2025 compared with the 2024 period due to higher unit costs ($7 million) and higher purchased volumes from the company’s steam generating facilities ($1 million).

Depreciation and amortization expenses increased $4 million in the three months ended June 30, 2025 compared with the 2024 period primarily due to higher steam utility plant balances.

Taxes, other than income taxes increased $10 million in the three months ended June 30, 2025 compared with the 2024 period primarily due to a lower deferral of under-collected property taxes ($8 million) and higher property taxes ($1 million).

Taxes, Other Than Income Taxes

At $869 million, taxes other than income taxes remain one of CECONY’s largest operating expenses for the three months ended June 30, 2025. The principal components of, and variations in, taxes other than income taxes were:

(a) Including sales tax on customers’ bills, total taxes other than income taxes in 2025 and 2024 were $1,048 million and $928 million, respectively.

(b) Including the deferral of over-collected property taxes in 2025 of $22 million and the deferral of under-collected property taxes in 2024 of $6 million, respectively.

Other Income (Deductions)

Other income increased $67 million in the three months ended June 30, 2025 compared with the 2024 period primarily due to higher credits associated with components of pension and other postretirement benefits other than service cost ($55 million) and an increase in AFUDC ($8 million).

Net Interest Expense

Net interest expense increased $17 million in the three months ended June 30, 2025 compared with the 2024 period primarily due to higher interest on long-term debt resulting from increased debt balances ($23 million), offset in part by lower other interest expense ($4 million) and an increase in AFUDC ($3 million).

Income Tax Expense

Income taxes increased $47 million in the three months ended June 30, 2025 compared with the 2024 period primarily due to lower amortization of excess deferred federal income taxes ($41 million) and higher income before income tax expense ($22 million), offset in part by a higher benefit from the annual amortization of Metropolitan Transportation Authority (MTA) tax surcredit ($5 million) and higher write-offs of uncollectible accounts, net of COVID-19 assistance ($10 million).

O&R

Electric

O&R’s results of electric operations for the three months ended June 30, 2025 compared with the 2024 period were as follows:

O&R’s electric sales and deliveries for the three months ended June 30, 2025 compared with the 2024 period were:

(a) O&R’s New York electric delivery revenues are subject to a revenue decoupling mechanism, as a result of which delivery revenues are generally not affected by changes in delivery volumes from levels assumed when rates were approved. The majority of O&R’s electric distribution revenues in New Jersey are subject to a conservation incentive program, as a result of which distribution revenues are generally not affected by changes in delivery volumes from levels assumed when rates were approved. O&R’s electric transmission revenues in New Jersey are not subject to a conservation incentive program, and as a result, changes in such volumes do impact revenues.

(b) “Residential/Religious” generally includes single-family dwellings, individual apartments in multi-family dwellings, religious organizations and certain other not-for-profit organizations.

(c) Other electric operating revenues generally reflect changes in regulatory assets and liabilities in accordance with O&R’s electric rate plan.

(d) After adjusting for weather and other variations, electric delivery volumes in O&R’s service area increased 4.4 percent in the three months ended June 30, 2025 compared with the 2024 period.

Operating revenues increased $16 million in the three months ended June 30, 2025 compared with the 2024 period primarily due to higher purchased power expenses ($12 million) and higher revenues from the company's New York electric rate plan ($5 million).

Purchased power expense increased $12 million in the three months ended June 30, 2025 compared with the 2024 period due to higher purchased volumes ($11 million) and higher unit costs ($1 million).

Gas

O&R’s results of gas operations for the three months ended June 30, 2025 compared with the 2024 period were as follows:

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O&R’s gas sales and deliveries, excluding off-system sales, for the three months ended June 30, 2025 compared with the 2024 period were:

(a) Revenues from New York gas sales are subject to a weather normalization clause and a revenue decoupling mechanism as a result of which delivery revenues are generally not affected by changes in delivery volumes from levels assumed when rates were approved.

(b) After adjusting for weather and other variations, firm sales and transportation volumes in O&R's service area increased 2.9 percent in the three months ended June 30, 2025 compared with the 2024 period.

Operating revenues increased $14 million in the three months ended June 30, 2025 compared with the 2024 period primarily due to higher gas purchased for resale ($13 million) and revenues from the company's New York gas rate plan ($1 million).

Gas purchased for resale increased $13 million in the three months ended June 30, 2025 compared with the 2024 period due to higher unit costs ($8 million) and higher purchased volumes ($5 million).

Taxes, Other Than Income Taxes

Taxes, other than income taxes, remained consistent in 2025 compared with 2024 for the three months ended June 30, 2025. The principal components of taxes, other than income taxes, were:

(a) Including sales tax on customers’ bills, total taxes other than income taxes in 2025 and 2024 were $31 million and $29 million, respectively.

Other Income (Deductions)

Other income increased $3 million in the three months ended June 30, 2025 compared with the 2024 period primarily due to higher credits associated with components of pension and other postretirement benefits other than service cost ($3 million).

Con Edison Transmission

Other Income (Deductions)

Other income increased $6 million in the three months ended June 30, 2025 compared with the 2024 period due to accretion of the basis difference of Con Edison's Transmission's equity investment in MVP ($3 million) and higher investment income from MVP and NY Transco ($3 million).

Income Tax Expense

Income taxes increased $8 million in the three months ended June 30, 2025 compared with the 2024 period primarily due to higher income before income tax expense ($2 million) and the absence of flow through federal and state tax benefits in 2025 for plant-related items ($6 million).

Other

Income Tax Expense

Income taxes increased $4 million in the three months ended June 30, 2025 compared with the 2024 period primarily due to higher income before income tax expense ($4 million) and the absence of production tax credits in 2025 related to the Broken Bow II wind project ($1 million).

The Companies’ results of operations for the six months ended June 30, 2025 and 2024 were as follows:

(a) Other includes the parent company, Con Edison’s tax equity investments, consolidation adjustments and Broken Bow II, the deferred project that was classified as held for sale at December 31, 2024, with the sale and transfer completed in January 2025. See Note Q to the Second Quarter Financial Statements.

(b) Represents the consolidated results of operations of Con Edison and its businesses.

CECONY

Electric

CECONY’s results of electric operations for the six months ended June 30, 2025 compared with the 2024 period were as follows:

CECONY’s electric sales and deliveries for the six months ended June 30, 2025 compared with the 2024 period were:

(a) Revenues from electric sales are subject to a revenue decoupling mechanism, as a result of which delivery revenues generally are not affected by changes in delivery volumes from levels assumed when rates were approved.

(b) “Residential/Religious” generally includes single-family dwellings, individual apartments in multi-family dwellings, religious organizations and certain other not-for-profit organizations.

(c) Other electric operating revenues generally reflect changes in the revenue decoupling mechanism current asset or regulatory liability and changes in regulatory assets and liabilities in accordance with other provisions of CECONY’s rate plan.

(d) After adjusting for variations, primarily weather and billing days, electric delivery volumes in CECONY’s service area increased 4.3 percent in the six months ended June 30, 2025 compared with the 2024 period.

Operating revenues increased $455 million in the six months ended June 30, 2025 compared with the 2024 period primarily due to an increase in revenues from the electric rate plan ($280 million), higher purchased power expenses ($133 million), higher fuel expenses ($12 million) and a change in incentives earned under the earnings adjustment mechanisms ($11 million).

Purchased Power expenses increased $133 million in the six months ended June 30, 2025 compared with the 2024 period due to higher unit costs ($119 million) and higher purchased volumes ($14 million).

Fuel expenses increased $12 million in the six months ended June 30, 2025 compared with the 2024 period due to higher unit costs ($22 million), offset in part by lower purchased volumes from CECONY's electric generating facilities ($10 million).

Other operations and maintenance expenses increased $11 million in the six months ended June 30, 2025 compared with the 2024 period primarily due to higher total surcharges for assessments and fees that are collected in revenues from customers ($29 million), higher health care costs ($17 million) and an increase in stock-based compensation ($13 million), offset in part by the impact of the May 2024 NYSPSC order denying CECONY's request to capitalize costs to implement its new customer billing and information system ($37 million), lower electric operations maintenance activities ($5 million) and lower uncollectible expenses ($3 million).

Depreciation and amortization expenses increased $69 million in the six months ended June 30, 2025 compared with the 2024 period primarily due to higher electric utility plant balances.

Taxes, other than income taxes increased $140 million in the six months ended June 30, 2025 compared with the 2024 period primarily due to higher property taxes ($129 million) and higher state and local revenue taxes ($7 million).

Gas

CECONY’s results of gas operations for the six months ended June 30, 2025 compared with the 2024 period were as follows:

CECONY’s gas sales and deliveries, excluding off-system sales, for the six months ended June 30, 2025 compared with the 2024 period were:

(a) Revenues from gas sales are subject to a weather normalization clause and a revenue decoupling mechanism as a result of which delivery revenues are generally not affected by changes in delivery volumes from levels assumed when rates were approved.

(b) After adjusting for variations, primarily billing days, firm gas sales and transportation volumes in CECONY’s service area increased 6.0 percent in the six months ended June 30, 2025 compared with the 2024 period.

(c) Other gas operating revenues generally reflect changes in the revenue decoupling mechanism and weather normalization clause current asset or regulatory liability and changes in regulatory assets and liabilities in accordance with other provisions of CECONY’s rate plan.

Operating revenues increased $274 million in the six months ended June 30, 2025 compared with the 2024 period primarily due to an increase in gas purchased for resale ($161 million) and an increase in revenues from the gas rate plan ($116 million).

Gas purchased for resale increased $161 million in the six months ended June 30, 2025 compared with the 2024 period due to higher unit costs ($154 million) and higher purchased volumes ($7 million).

Depreciation and amortization expenses increased $11 million in the six months ended June 30, 2025 compared with the 2024 period primarily due to higher gas utility plant balances.

Taxes, other than income taxes increased $78 million in the six months ended June 30, 2025 compared with the 2024 period primarily due to a lower deferral of under-collected property taxes ($52 million), higher property taxes ($17 million) and higher state and local taxes ($7 million).

Steam

CECONY’s results of steam operations for the six months ended June 30, 2025 compared with the 2024 period were as follows:

CECONY’s steam sales and deliveries for the six months ended June 30, 2025 compared with the 2024 period were:

Revenues in Millions

(a) Other steam operating revenues generally reflect changes in regulatory assets and liabilities in accordance with CECONY’s rate plan.

(b) After adjusting for variations, primarily weather and billing days, steam sales and deliveries in the company's service area decreased 4.8 percent in the six months ended June 30, 2025 compared with the 2024 period.

Operating revenues increased $86 million in the six months ended June 30, 2025 compared with the 2024 period primarily due to increase in steam revenues under the company's steam rate plan ($39 million), higher fuel expenses ($39 million) and higher purchased power expenses ($6 million).

Purchased power expenses increased $6 million in the six months ended June 30, 2025 compared with the 2024 period due to higher unit costs ($11 million), offset in part by lower purchased volumes ($5 million).

Fuel expenses increased $39 million in the six months ended June 30, 2025 compared with the 2024 period due to higher unit costs ($33 million) and higher purchased volumes from CECONY’s steam generating facilities ($6 million).

Other operations and maintenance expenses increased $11 million in the six months ended June 30, 2025 compared with the 2024 period primarily due to higher steam operations maintenance activities ($7 million), an increase in municipal infrastructure support ($6 million) and higher costs for pension and other postretirement benefits, reflecting reconciliation to the rate plan level ($3 million), offset in part by the impact of the May 2024 NYSPSC order denying CECONY's request to capitalize costs to implement its new customer billing and information system ($6 million).

Taxes, other than income taxes increased $31 million in the six months ended June 30, 2025 compared with the 2024 period primarily due to lower deferral of under-collected property taxes ($27 million), higher property taxes ($3 million) and higher state and local taxes ($1 million).

Taxes, Other Than Income Taxes

At $1,789 million, taxes other than income taxes remain one of CECONY’s largest operating expenses for the six months ended June 30, 2025. The principal components of, and variations in, taxes other than income taxes were:

(a) Including sales tax on customers’ bills, total taxes other than income taxes in 2025 and 2024 were $2,210 million and $1,906 million, respectively.

(b) Including the deferral of over-collected property taxes in 2025 of $52 million and the deferral of under-collected property taxes in 2024 of $26 million, respectively.

Other Income (Deductions)

Other income increased $109 million in the six months ended June 30, 2025 compared with the 2024 period primarily due to higher credits associated with components of pension and other postretirement benefits other than service cost ($101 million) and an increase in AFUDC ($16 million), offset in part by higher expenses resulting from investment performance in the deferred compensation plan ($9 million).

Net Interest Expense

Net interest expense increased $39 million in the six months ended June 30, 2025 compared with the 2024 period primarily due to higher interest expense for long-term debt ($57 million), offset in part by lower interest on short-term debt ($27 million).

Income Tax Expense

Income taxes increased $93 million in the six months ended June 30, 2025 compared with the 2024 period primarily due to lower amortization of excess deferred federal income taxes ($81 million) and higher income before income tax expense ($48 million), offset in part by a higher benefit from the annual amortization of MTA tax surcredit ($18 million) and higher write-offs of uncollectible accounts, net of COVID-19 assistance ($18 million).

O&R

Electric

O&R’s results of electric operations for the six months ended June 30, 2025 compared with the 2024 period were as follows:

O&R’s electric sales and deliveries for the six months ended June 30, 2025 compared with the 2024 period were:

(a) O&R’s New York electric delivery revenues are subject to a revenue decoupling mechanism, as a result of which delivery revenues are generally not affected by changes in delivery volumes from levels assumed when rates were approved. The majority of O&R’s electric distribution revenues in New Jersey are subject to a conservation incentive program, as a result of which distribution revenues are generally not affected by changes in delivery volumes from levels assumed when rates were approved. O&R’s electric transmission revenues in New Jersey are not subject to a conservation incentive program, and as a result, changes in such volumes do impact revenues.

(b) “Residential/Religious” generally includes single-family dwellings, individual apartments in multi-family dwellings, religious organizations and certain other not-for-profit organizations.

(c) Other electric operating revenues generally reflect changes in regulatory assets and liabilities in accordance with O&R’s electric rate plan.

(d) After adjusting for weather and other variations, electric delivery volumes in O&R’s service area increased 2.8 percent in the six months ended June 30, 2025 compared with the 2024 period.

Operating revenues increased $41 million in the six months ended June 30, 2025 compared with the 2024 period primarily due to higher purchased power expenses ($33 million) and higher revenues from the New York electric rate plan ($5 million).

Purchased power expenses increased $33 million in the six months ended June 30, 2025 compared with the 2024 period due to higher purchased volumes ($20 million) and higher unit costs ($13 million).

Gas

O&R’s results of gas operations for the six months ended June 30, 2025 compared with the 2024 period were as follows:

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O&R’s gas sales and deliveries, excluding off-system sales, for the six months ended June 30, 2025 compared with the 2024 period were:

(a) Revenues from New York gas sales are subject to a weather normalization clause and a revenue decoupling mechanism as a result of which delivery revenues are generally not affected by changes in delivery volumes from levels assumed when rates were approved.

(b) After adjusting for weather and other variations, firm sales and transportation volumes in O&R's service area increased 3.5 percent in the six months ended June 30, 2025 compared with the 2024 period.

Operating revenues increased $42 million in the six months ended June 30, 2025 compared with the 2024 period primarily due to an increase in gas purchased for resale ($37 million) and higher revenues from the New York gas rate plan ($3 million).

Gas purchased for resale increased $37 million in the six months ended June 30, 2025 compared with the 2024 period due to higher unit costs ($19 million) and higher purchased volumes ($18 million).

Taxes, Other Than Income Taxes

Taxes, other than income taxes, increased by $1 million in 2025 compared with 2024 for the six months ended June 30, 2025. The principal components of taxes, other than income taxes, were:

(a) Including sales tax on customers’ bills, total taxes other than income taxes in 2025 and 2024 were $66 million and $62 million, respectively.

Other Income (Deductions)

Other income increased $7 million in the six months ended June 30, 2025 compared with the 2024 period primarily due to higher credits associated with components of pension and other postretirement benefits other than service cost ($7 million).

Con Edison Transmission

Income Tax Expense

Income taxes increased $7 million in the six months ended June 30, 2025 compared with the 2024 period primarily due to higher income before income tax expense ($1 million) and the absence of flow through federal and state tax benefits in 2025 for plant-related items ($6 million).

Other

Income Tax Expense

Income taxes increased $17 million in the six months ended June 30, 2025 compared with the 2024 period primarily due to higher income before income tax expense ($12 million) and the absence of production tax credits in 2025 related to the Broken Bow II wind project ($4 million).

Liquidity and Capital Resources

The Companies monitor the financial markets closely, including borrowing rates and daily cash collections. Increases in aged accounts receivable balances, inflationary pressure and higher interest rates have increased the amount of capital needed by the Utilities and the costs of such capital. See "Interest Rate Risk," below, "Aged Accounts Receivable Balances," above and "Capital Resources," below.

Con Edison and the Utilities have a $2,500 million revolving credit agreement (the Credit Agreement) in place under which banks are committed to provide loans on a revolving credit basis until March 2029, unless extended for an additional one-year term, subject to certain conditions. CECONY has a $500 million 364-day revolving credit agreement (the CECONY Credit Agreement) in place under which banks are committed to provide loans on a revolving credit basis until March 2026, subject to certain conditions. Con Edison and the Utilities have not entered into any loans under the Credit Agreement and CECONY has not entered into any loans under the CECONY Credit Agreement. See Note D to the Second Quarter Financial Statements.

In November 2024 and January 2025, CECONY borrowed $500 million and $200 million, respectively, at a variable rate under a 364-Day Senior Unsecured Delayed Draw Term Loan Credit Agreement entered into by the company in November 2024 (the CECONY Term Loan Credit Agreement). The term loans mature in November 2025. CECONY has the option to prepay the term loans issued under the CECONY Term Loan Credit Agreement prior to maturity.

The FERC has authorized CECONY through April 30, 2026 and O&R through July 31, 2026 to issue short-term borrowings for a period of not more than 12 months, in an amount not to exceed $4,000 million and $250 million, respectively, at prevailing market rates.

The Companies’ liquidity reflects cash flows from operating, investing and financing activities, as shown on their respective consolidated statements of cash flows and as discussed below.

The Companies’ cash, temporary cash investments and restricted cash resulting from operating, investing and financing activities for the six months ended June 30, 2025 and 2024 are summarized as follows:

(a) Other includes the parent company, Con Edison’s tax equity investments, consolidation adjustments and Broken Bow II, the deferred project that was classified as held for sale at December 31, 2024, with the sale and transfer completed in January 2025. See Note Q to the Second Quarter Financial Statements.

(b) Represents the consolidated results of operations of Con Edison and its businesses.

(c) See "Reconciliation of Cash, Temporary Cash Investments and Restricted Cash" in Note A to the Second Quarter Financial Statements.

(d) On March 1, 2023, Con Edison completed the sale of all of the stock of the Clean Energy Businesses. See Note Q to the Second Quarter Financial Statements.

Cash Flows from Operating Activities

The Utilities’ cash flows from operating activities primarily reflect their energy sales and deliveries and cost of operations. The volume of energy sales and deliveries is primarily affected by factors external to the Utilities, such as customer demand, weather, market prices for energy and economic conditions. Measures that promote distributed energy resources, such as distributed generation, demand reduction and energy efficiency, also affect the volume of energy sales and deliveries.

Pursuant to their rate plans, the Utilities have recovered from customers a portion of the tax liability they will pay in the future as a result of temporary differences between the book and tax basis of assets and liabilities. These temporary differences affect the timing of cash flows, but not net income, as the Companies are required to record deferred tax assets and liabilities at the current corporate tax rate for the temporary differences. For the Utilities, credits to their customers of the net benefits of the TCJA, including the reduction of the corporate tax rate to 21 percent, decrease cash flows from operating activities. Pursuant to their rate plans, the Utilities also recover from customers the amount of property taxes they will pay. The payment of property taxes by the Utilities affects the timing of cash flows and increases the amount of short-term borrowings issued by the Utilities when property taxes are due and as property taxes increase, but generally does not impact net income. See Note J to the Second Quarter Financial Statements.

In general, the Utilities suspended service disconnections during the COVID-19 pandemic and have since resumed such activities in accordance with applicable law. At June 30, 2025, CECONY's and O&R's customer accounts receivables balances of $2,912 million and $116 million, respectively, included aged accounts receivables (balances outstanding in excess of 60 days) of $1,530 million and $26 million, respectively. A continued increase in accounts receivable balances has impacted and is expected to continue to impact the Companies' liquidity. See “Aged Accounts Receivable Balances,” above.

Net income is the result of cash and non-cash (or accrual) transactions. Only cash transactions affect the Companies’ cash flows from operating activities. Principal non-cash charges or credits include depreciation, deferred income tax expense, amortizations of certain regulatory assets and liabilities and accrued unbilled revenue. Non-cash charges or credits may also be accrued under the revenue decoupling and cost reconciliation mechanisms in the Utilities’ New York electric and gas rate plans.

Net cash flows from operating activities for the six months ended June 30, 2025 for Con Edison were $904 million higher than in the 2024 period. The change in net cash flows for Con Edison primarily reflects:

• an increase in other current liabilities of $204 million;
• an increase in accounts payable of $201 million;
• a decrease in taxes receivable of $144 million;
• lower accounts receivable – customers, net $113 million;
• lower net deferred charges, noncurrent assets, leases, net and other regulatory assets balances of $101 million; and
• a decrease in revenue decoupling mechanism receivables of $83 million.

Net cash flows from operating activities for the six months ended June 30, 2025 for CECONY were $909 million higher than in the 2024 period. The change in net cash flows for CECONY primarily reflects:

• a decrease in accounts receivable from (to) affiliated companies of $234 million;
• an increase in accounts payable of $210 million;
• an increase in other current liabilities of $205 million;
• lower accounts receivable – customers, net $114 million; and
• a decrease in the revenue decoupling mechanism receivable of $78 million.

Cash Flows Used in Investing Activities

The following table summarizes key components of Con Edison’s investing cash flows.

Net cash flows used in investing activities for Con Edison were $33 million higher for the six months ended June 30, 2025 compared with the 2024 period. The change for Con Edison primarily reflects:

• higher cost of removal less salvage of $37 million;
• an increase in utility capital expenditures of $24 million; and
• an increase in other investing activities of $16 million;

Offset in part by

• the proceeds from the sale of Broken Bow II, net of cash and cash equivalents sold in 2025 of ($45 million).

The following table summarizes key components of CECONY’s investing cash flows.

Net cash flows used in investing activities for CECONY were $26 million higher for the six months ended June 30, 2025 compared with the 2024 period. The change for CECONY primarily reflects:

• higher cost of removal less salvage of $35 million;

Offset in part by

• a decrease in utility capital expenditures of ($9 million).

Pursuant to their rate plans, the Utilities recover the cost of utility capital expenditures from customers, including an approved rate of return (before and after being placed in service and AFUDC before being placed in service). Increases in the amount of utility capital expenditures may temporarily increase the amount of short-term debt issued by the Utilities prior to the long-term financing of such amounts.

Cash Flows Used In Financing Activities

The following table summarizes key components of Con Edison’s financing cash flows.

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Net cash flows from financing activities for Con Edison were $1,009 million higher for the six months ended June 30, 2025 compared with the 2024 period and reflect the following transactions:

• an increase in the net payment of short-term debt of $1,114 million;

Offset in part by

• an increase in the borrowing under term loan ($200 million).

The following table summarizes key components of CECONY’s financing cash flows.

Net cash flows used in financing activities for CECONY were $998 million higher for the six months ended June 30, 2025 compared with the 2024 period and reflects the following transactions:

• an increase in the net payment of short-term debt of $958 million.

Cash flows from financing activities of the Companies also reflect commercial paper issuances and repayments. The commercial paper amounts outstanding at June 30, 2025 and 2024 and the average daily balances for the six months ended June 30, 2025 and 2024 for Con Edison and CECONY were as follows:

Capital Resources

For each of the Companies, the common equity ratio at June 30, 2025 and December 31, 2024 was:

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Assets, Liabilities and Equity

The Companies' assets, liabilities, and equity at June 30, 2025 and December 31, 2024 are summarized as follows.

(a) Other includes the parent company, Con Edison’s tax equity investments, consolidation adjustments and Broken Bow II, the deferred project that was classified as held for sale at December 31, 2024, with the sale and transfer completed in January 2025. See Note Q to the Second Quarter Financial Statements.

(b) Represents the consolidated results of operations of Con Edison and its businesses.

CECONY

Current assets at June 30, 2025 were $509 million lower than at December 31, 2024. The change in current assets primarily reflects a decrease in accounts receivable from affiliated companies ($293 million) and a decrease in accrued unbilled revenue ($203 million).

Net plant at June 30, 2025 was $1,333 million higher than at December 31, 2024. The change in net plant primarily reflects an increase in electric ($1,442 million), gas ($318 million), steam ($16 million) and general ($183 million) plant balances, offset in part by an increase in accumulated depreciation ($497 million) and a decrease in construction work in progress ($129 million).

Current liabilities at June 30, 2025 were $718 million lower than at December 31, 2024. The change in current liabilities primarily reflects a decrease in notes payable ($894 million), offset in part by an increase in the borrowing under term loan ($200 million).

Equity at June 30, 2025 was $1,644 million higher than at December 31, 2024. The change in equity primarily reflects net income for the six months ended June 30, 2025 ($967 million), capital contributions from Con Edison ($1,250 million) in 2025 and a change in stock awards ($3 million), offset in part by common stock dividends to Con Edison ($568 million) in 2025 and a decrease in other comprehensive income ($8 million).

O&R

Current assets at June 30, 2025 were $59 million lower than at December 31, 2024. The change in current assets primarily reflects a decrease in regulatory assets ($25 million), accounts receivable from affiliated companies ($19 million) and the revenue decoupling mechanism receivable ($16 million).

Net plant at June 30, 2025 was $126 million higher than at December 31, 2024. The change in net plant primarily reflects an increase in electric ($74 million), gas ($36 million) and general ($8 million) plant balances and an increase in construction work in progress ($40 million), offset in part by an increase in accumulated depreciation ($32 million).

Current liabilities at June 30, 2025 were $63 million lower than at December 31, 2024. The change in current liabilities primarily reflects a decrease in regulatory liabilities ($28 million), accounts payable ($13 million), accounts payable to affiliated companies ($10 million) and notes payable ($9 million).

Other noncurrent liabilities at June 30, 2025 were $11 million higher than at December 31, 2024. The change in other noncurrent liabilities primarily reflects an increase in deferred income taxes and unamortized investment tax credits ($13 million), pension and retiree benefits ($12 million) and other deferred credits and noncurrent liabilities ($9 million), offset in part by regulatory liabilities ($23 million).

Equity at June 30, 2025 was $116 million higher than at December 31, 2024. The change in equity primarily reflects net income for the six months ended June 30, 2025 ($53 million) and capital contributions from Con Edison ($100 million) in 2025, offset in part by common stock dividends to Con Edison ($34 million) in 2025 and a decrease in other comprehensive income ($3 million).

Con Edison Transmission

Current assets at June 30, 2025 were $8 million lower than at December 31, 2024. The change in current assets primarily reflects a decrease in cash and temporary cash investment ($16 million), offset in part by an increase in accounts receivable from affiliated companies ($9 million).

Investments at June 30, 2025 were $29 million higher than at December 31, 2024. The increase in investments primarily reflects additional investment in New York Transco ($28 million).

Current liabilities at June 30, 2025 were $5 million lower than at December 31, 2024. The change in current liabilities primarily reflects a decrease in accrued taxes ($4 million).

Equity at June 30, 2025 was $17 million higher than at December 31, 2024. The change in equity primarily reflects net income for the six months ended June 30, 2025 ($20 million), offset in part by common stock dividends to Con Edison ($3 million).

Con Edison Transmission

The following table presents Con Edison Transmission's ownership interests in New York Transco's electric transmission projects.

(a) TOTS is a group of three electric power bulk transmission projects ($217 million total cost) constructed on the New York bulk transmission system to increase transfer capability between upstate and downstate New York. In March 2025, the FERC issued an order establishing hearing and settlement procedures for New York Transco's petition requesting an updated base ROE of 10.9 percent.

(b) The NYES project was constructed to relieve transmission congestion between upstate and downstate (estimated cost of approximately $800 million). In June 2024, construction of the Dover Station, an additional network upgrade to support the NYES project, resumed following the reissuance of its permits and is anticipated to be completed during the fourth quarter of 2025. In March 2025, the FERC issued an order establishing hearing and settlement procedures for New York Transco's petition requesting an updated base ROE of 10.9 percent.

(c) Propel NY Energy, a project that is under development jointly with the NYPA, is a 90-mile electric transmission project that is expected to increase high voltage transmission connections between Long Island and the rest of New York State. New York Transco’s share of the estimated cost of the Propel NY Energy project is $2,200 million, excluding interconnection costs and the cost of projects expected to be built by local transmission owners, including CECONY. The siting, construction and operation of the project will require approvals and permits from the appropriate governmental agencies and authorities, including the NYSPSC. The FERC also authorized the project to receive an abandoned plant incentive if the project is cancelled or abandoned for reasons beyond Propel NY Energy’s control and to recover construction work in progress in rate base during the development and construction phase of the project.

Con Edison Transmission owns an interest of approximately 71.2 percent in Honeoye, a company that operates a gas storage facility in upstate New York and in which CECONY owns the remaining interest. Con Edison Transmission and CECONY are considering strategic alternatives with respect to their investments in Honeoye.

Con Edison Transmission owns an interest of approximately 6.6 percent in MVP as of June 30, 2025. MVP is a joint venture among five partners, including Con Edison Transmission, that constructed and operates the Mountain Valley Pipeline, a 303-mile gas transmission project in West Virginia and Virginia that entered service in June 2024. Con Edison Transmission is considering strategic alternatives with respect to its investment in MVP.

In June 2024, construction of the Dover Station, an additional network upgrade to support the NYES project, resumed following the reissuance of its permits and is anticipated to be completed during the fourth quarter of 2025.

Environmental Matters

Clean Energy Future

In May 2025, CECONY and O&R submitted the annual update to their combined gas system long-term plan (GSLTP) that was filed in November 2023. In addition to the annual updates, the filing contained a system planning update with details on potential long-term impacts to revenue requirements, load forecasts, program changes, data on actual customer usage, a framework for scaling back the Utilities’ long-term contracts for natural gas supply, updates on disadvantaged communities and development of a definition of “hard-to-electrify customers.” The Utilities are required to periodically file these long-term plans and the next iteration of the GSLTP is due in August 2027.

In June 2025, the NYSPSC approved five of the nine urgent proactive planning projects proposed by CECONY in its November 2024 filing for grid upgrades needed to meet anticipated demand from transportation and building heating electrification. The total estimated capital costs for the five new urgent projects are $439.9 million. The NYSPSC indicated that the remaining urgent projects not approved may be pursued as part of a rate case, through the yet to be established proactive planning framework study process, or through another relevant generic proceeding. All nine proposed projects were included in the CECONY 2025 rate filing.

In July 2025, the FERC granted CECONY’s request for the abandoned plant and construction work in progress (CWIP) incentives for certain breakers at the Rainey substation in Queens, New York that CECONY has been designated to construct as part of the Propel NY Energy project that is being developed by NYPA and New York

Transco, effective July 14, 2025. See “Con Edison Transmission,” above. CECONY will recover all of its prudently incurred costs associated with the breakers if the installation is cancelled or abandoned for reasons beyond CECONY’s control and CECONY will recover all of the CWIP incentive in rate base during the development and construction phase of the breakers.

Offshore Wind

In July 2025, the NYSPSC issued an order withdrawing the PPTN process given actions taken by the federal government that reduced the prospects for the construction of the offshore wind resources that were anticipated to be served by the proposed transmission solutions. The NYSPSC’s decision does not, however, affect previously permitted offshore wind projects in New York, including Sunrise Wind (924 MW), a project that began construction in June 2024 and is expected to enter commercial operation in 2026 and Empire Wind 1 (810 MW), a project that is expected to enter commercial operation in 2027 and connect to the New York City electrical grid at CECONY’s Gowanus substation.

In May 2025, construction of relevant marine activities associated with the Empire Wind 1 offshore wind project (810 MW) resumed after a suspension that began in April 2025 in compliance with a stop work order issued by the United States Bureau of Ocean Energy Management. See "Federal Regulation," above.

Energy Efficiency and Building Electrification

In May 2025, the NYSPSC issued two orders that established budgets for CECONY’s and O&R’s energy efficiency and building electrification programs (formerly known as New Efficiency New York) for 2026-2030 with aggregate budgets of approximately $2,140 million and $110 million, respectively. The aggregate amounts are comprised of average annual budgets of: $300 million and $19 million for electric energy efficiency and heat pump programs for CECONY and O&R, respectively, and $128 million and $3 million for gas energy efficiency programs for CECONY and O&R, respectively. Energy efficiency and building electrification expenditures are treated as regulatory assets with recovery including the weighted average cost of capital and beginning in 2026 via a surcharge rather than included in base rates.

Thermal Energy Networks

In July 2025, CECONY and O&R filed with the NYSPSC their final Pilot Engineering Design and Customer Protection Plans (Stage 2 Filings) for the utility-scale thermal energy network (UTEN) pilot project. CECONY and O&R requested authorization to proceed to Stage 3 (Customer Enrollment and Construction). The total estimated costs for the UTEN projects have increased to $415 million (from $255 million) and $112 million (from $46 million) for CECONY and O&R, respectively. CECONY and O&R were previously authorized to incur costs of $23.1 million and $4.6 million, respectively. The remaining proposed budget amounts in excess of the previously authorized amounts are subject to approval by the NYSPSC.

Financial and Commodity Market Risks

The Companies are subject to various risks and uncertainties associated with financial and commodity markets. The most significant market risks include interest rate risk, commodity price risk and investment risk.

Interest Rate Risk

The Companies' interest rate risk primarily relates to new debt financing needed to fund capital requirements, including the capital expenditures of the Utilities and maturing debt securities, and variable-rate debt. Con Edison and its subsidiaries manage interest rate risk through the issuance of mostly fixed-rate debt with varying maturities and through opportunistic refinancing of debt. Con Edison and CECONY estimate that at June 30, 2025, a 10 percent increase in interest rates applicable to its variable rate debt would result in an increase in annual interest expense of $11 million and $9 million, respectively. Under CECONY’s current electric, gas and steam rate plans, variations in actual variable rate tax-exempt debt interest expense, including costs associated with the refinancing of the variable rate tax-exempt debt, are reconciled to levels reflected in rates.

Higher interest rates have resulted in increased interest expense on commercial paper, variable-rate debt and long-term debt issuances.

Commodity Price Risk

Con Edison’s commodity price risk primarily relates to the purchase and sale of electricity, gas and related derivative instruments. The Utilities apply risk management strategies to mitigate their related exposures. See Note N to the Second Quarter Financial Statements.

Con Edison estimates that, as of June 30, 2025, a 10 percent decline in market prices would result in a decline in fair value of $153 million for the derivative instruments used by the Utilities to hedge purchases of electricity and gas, of which $141 million is for CECONY and $12 million is for O&R. As of June 30, 2024, Con Edison estimated that a 10 percent decline in market prices would result in a decline in fair value of $155 million for the derivative instruments used by the Utilities to hedge purchases of electricity and gas, of which $142 million is for CECONY and $13 million is for O&R. Con Edison expects that any such change in fair value would be largely offset by directionally opposite changes in the cost of the electricity and gas purchased.

The Utilities do not make any margin or profit on the electricity or gas they sell. In accordance with provisions approved by state regulators, the Utilities generally recover from full-service customers the costs they incur for energy purchased for those customers, including gains and losses on certain derivative instruments used to hedge energy purchased and related costs. However, increases in electric and gas commodity prices may contribute to a slower recovery of cash from outstanding customer accounts receivable balances. See “Electric Supply” and “Aged Accounts Receivable Balances,” above.

Investment Risk

The Companies’ investment risk relates to the investment of plan assets for their pension and other postretirement benefit plans. Con Edison's investment risk also relates to the investments of Con Edison Transmission that are accounted for under the equity method. See "Investments" in Note A to the Second Quarter Financial Statements.

The Companies’ current investment policy for pension plan assets includes investment targets of 26 to 30 percent equity securities, 42 to 60 percent debt securities and 14 to 30 percent alternatives. At June 30, 2025, the pension plan investments consisted of 27 percent equity securities, 50 percent debt securities and 23 percent alternatives.

For the Utilities’ pension and other postretirement benefit plans, regulatory accounting treatment is generally applied in accordance with the accounting rules for regulated operations. In accordance with the Statement of Policy issued by the NYSPSC and its current electric, gas and steam rate plans, CECONY defers for payment to or recovery from customers the difference between the pension and other postretirement benefit expenses and the amounts for such expenses reflected in rates. O&R also defers such difference pursuant to its New York rate plans.

Material Contingencies

For information concerning potential liabilities arising from the Companies’ material contingencies, see "Other Regulatory Matters" in Note B and Notes G and H to the Second Quarter Financial Statements.

For information about the Companies’ primary market risks associated with activities in derivative financial instruments, other financial instruments and derivative commodity instruments, see “Financial and Commodity Market Risks,” in Part I, Item 2 of this report, that is incorporated herein by reference.

The Companies maintain disclosure controls and procedures designed to provide reasonable assurance that the information required to be disclosed in the reports that they submit to the Securities and Exchange Commission (SEC) is recorded, processed, summarized and reported within the time periods specified in the rules and forms of the SEC. Disclosure controls and procedures include, without limitation, controls and procedures designed to ensure that information required to be disclosed by an issuer in the reports that it files or submits under the Securities Exchange Act of 1934, as amended, is accumulated and communicated to the issuer’s management, including its principal executive and principal financial officers, or persons performing similar functions, as appropriate to allow timely decisions regarding required disclosure. For each of the Companies, its management, with the participation of its principal executive officer and principal financial officer, has evaluated its disclosure controls and procedures as of the end of the period covered by this report and, based on such evaluation, has concluded that the controls and procedures are effective to provide such reasonable assurance. Reasonable assurance is not absolute assurance, however, and there can be no assurance that any design of controls or procedures would be effective under all potential future conditions, regardless of how remote.

There was no change in the Companies’ internal control over financial reporting that occurred during the Companies’ most recent fiscal quarter that has materially affected, or is reasonably likely to materially affect, the Companies’ internal control over financial reporting.