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Form 10-K
Securities and Exchange Commission
Washington, D.C. 20549
(Mark One)
[ X ] Annual Report Pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934
For the fiscal year ended DECEMBER 31, 1993
OR
[ ] Transition Report pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934
For the transition period from ____________ to ____________
Commission file number 1-1217
Consolidated Edison Company of New York, Inc.
(Exact name of registrant as specified in its charter)
New York 13-5009340
(State of Incorporation) (I.R.S. Employer Identification No.)
4 Irving Place, New York, New York 10003
(Address of principal executive offices) (Zip Code)
Registrant's telephone number: (212) 460-4600
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Securities Registered Pursuant to Section 12(b) of the Act:
Name of each
exchange on
Title of each class which registered
Consolidated Edison Company of New York, Inc.
$5 Cumulative Preferred Stock, without par value New York
Stock
Exchange
Cumulative Preferred Stock, 4.65% New York
Series C ($100 par value) Stock
Exchange
Cumulative Preference Stock, 6% New York
Convertible Series B ($100 par value) Stock
Exchange
Common Stock ($2.50 par value) New York, Midwest and
Pacific Stock
Exchanges
The Edison Electric Illuminating Company
of New York
First Consolidated Mortgage Gold Bonds, New York
5%, due July 1, 1995 Stock
(non-callable) Exchange
Kings County Electric Light and Power Company,
Purchase Money, 6%, 99 Years Gold Bonds, New York
due October 1, 1997 Stock
(non-callable) Exchange
Securities Registered Pursuant to Section 12(g) of the Act:
Title of each class
Consolidated Edison Company of New York, Inc.
Cumulative Preferred Stock ($100 par value):
4.65% Series D
5-3/4% Series E
6.20% Series F
Indicate by check mark whether the registrant (1) has filed
all reports required to be filed by Section 13 or 15(d) of the
Securities Exchange Act of 1934 during the preceding 12 months,
and (2) has been subject to such filing requirements for the past
90 days.
Yes X No
Indicate by check mark if the disclosure of delinquent
filers pursuant to Item 405 of Regulation S-K is not contained
herein, and will not be contained, to the best of registrant's
knowledge, in the definitive proxy statement incorporated by
reference in Part III of this Form 10-K or any amendment to this
Form 10-K. [ X ]<PAGE>
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The aggregate market value of the voting stock held by
non-affiliates of the registrant, as of January 31, 1994, was
$7,467,331,738. Excluded from this figure is $2,694,969
representing the market value of 86,239 shares of Common Stock
held by the registrant's Trustees (directors). The registrant's
Trustees are the only stockholders of the registrant, known to
the registrant, who might be deemed "affiliates" of the
registrant.
As of February 28, 1994, the registrant had outstanding
234,477,014 shares of Common Stock.
Documents Incorporated By Reference
Portions of the registrant's Proxy Statement for its 1994
Annual Meeting of Stockholders, to be filed with the Commission
pursuant to Regulation 14A not later than 120 days after December
31, 1993, the close of the registrant's fiscal year, are incorpo-
rated in Part III of this report.
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TABLE OF CONTENTS
Page
PART I
ITEM 1. Business . . . . . . . . . . . . . . . . . . . . 5
ITEM 2. Properties . . . . . . . . . . . . . . . . . . . 27
ITEM 3. Legal Proceedings . . . . . . . . . . . . . . . 31
ITEM 4. Submission of Matters to a Vote of
Security Holders . . . . . . . . . . . . . . . . None
Executive Officers of the Registrant . . . . . . . . . . 40
PART II
ITEM 5. Market for the Registrant's Common Equity
and Related Stockholder Matters . . . . . . . . 47
ITEM 6. Selected Financial Data . . . . . . . . . . . . 47
ITEM 7. Management's Discussion and Analysis
of Financial Condition and Results of
Operations . . . . . . . . . . . . . . . . . . 48
ITEM 8. Financial Statements and Supplementary Data. . . 60
ITEM 9. Changes in and Disagreements with
Accountants on Accounting and Financial
Disclosure . . . . . . . . . . . . . . . . . . None
PART III
ITEM 10. Directors and Executive Officers of the
Registrant . . . . . . . . . . . . . . . . . . *
ITEM 11. Executive Compensation . . . . . . . . . . . . *
ITEM 12. Security Ownership of Certain Beneficial
Owners and Management . . . . . . . . . . . . . *
ITEM 13. Certain Relationships and Related
Transactions . . . . . . . . . . . . . . . . . *
PART IV
ITEM 14. Exhibits, Financial Statement Schedules
and Reports on Form 8-K . . . . . . . . . . . . 102
SIGNATURES . . . . . . . . . . . . . . . . . . . . . . . 113
___________________
*Incorporated by reference from the Company's definitive proxy
statement for its Annual Meeting of Stockholders to be held on
May 16, 1994.<PAGE>
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PART I
ITEM 1. BUSINESS
Contents of Item 1 Page
THE COMPANY . . . . . . . . . . . . . . . . . . . . . 5
INDUSTRY SEGMENTS . . . . . . . . . . . . . . . . . . 5
ELECTRIC OPERATIONS . . . . . . . . . . . . . . . . . 6
GAS OPERATIONS . . . . . . . . . . . . . . . . . . . 10
STEAM OPERATIONS . . . . . . . . . . . . . . . . . . 11
CAPITAL REQUIREMENTS AND FINANCING . . . . . . . . . 12
FUEL SUPPLY . . . . . . . . . . . . . . . . . . . . 12
REGULATION AND RATES . . . . . . . . . . . . . . . . 15
COMPETITION . . . . . . . . . . . . . . . . . . . . . 17
ENVIRONMENTAL MATTERS AND
RELATED LEGAL PROCEEDINGS . . . . . . . . . . . . . 18
GENERAL . . . . . . . . . . . . . . . . . . . . . . . 22
EMPLOYEES . . . . . . . . . . . . . . . . . . . . . . 22
RESEARCH AND DEVELOPMENT . . . . . . . . . . . . . . 22
OPERATING STATISTICS . . . . . . . . . . . . . . . . 23
FIVE-YEAR FORECAST . . . . . . . . . . . . . . . . . 25
THE COMPANY
Consolidated Edison Company of New York, Inc. (the Company),
incorporated in New York State in 1884, supplies electric service
in all of New York City (except part of Queens) and most of
Westchester County, a service area with a population of more than
8 million. It also supplies gas in Manhattan, The Bronx and
parts of Queens and Westchester, and steam in part of Manhattan.
Most governmental customers within the Company's service
territory receive electric service from the New York Power
Authority (NYPA) through the Company's facilities.
In 1993, electric, gas and steam operating revenues were
81.9 percent, 12.9 percent and 5.2 percent, respectively, of the
Company's operating revenues.
INDUSTRY SEGMENTS
For information on operating revenues, expenses and income
for the years ended December 31, 1993, 1992 and 1991, and assets
at those dates, relating to the Company's electric, gas and steam
operations, see Note H to the financial statements in Item 8.
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ELECTRIC OPERATIONS
ELECTRIC SALES. Electric operating revenues were $5.1
billion in 1993 or 81.9 percent of total Company operating
revenues. The percentages were 82.4 and 83.4, respectively, in
the two preceding years. Electricity sales in the Company's
service area in 1993, including usage by customers served by NYPA
and the New York City and Westchester County municipal electric
agencies, but excluding sales to other utilities, increased 3.3
percent from 1992, after decreasing 2.7 percent in 1992 and
increasing 2.0 percent in 1991. After adjusting for variations,
principally weather, electricity sales volume increased 1.0
percent in 1993, decreased 0.3 percent in 1992 and increased 0.8
percent in 1991. Weather-adjusted sales represent the Company's
estimate of the sales that would have been made if historical
average weather conditions had occurred.
In 1993, 80.5 percent of the electricity sold in the
Company's service area was sold by the Company to its customers,
and the balance was sold by NYPA and municipal electric agencies
to their customers. Of the Company's sales, 29.0 percent was to
residential customers, 66.3 percent was to commercial customers,
3.0 percent was to industrial customers and the balance was to
railroads and public authorities.
For further information about amounts of electric energy
sold, see "Operating Statistics", below. For a forecast of
electric energy sales, see "Five-Year Forecast", below.
ELECTRIC SUPPLY. The Company either generates the electric
energy it sells, purchases the energy from other utilities or
independent power producers (IPPs) pursuant to long-term firm
power contracts or purchases non-firm economy energy.
The sources of electric energy generated and purchased
during the years 1989-1993 are shown below:
1989 1990 1991 1992 1993
Generated:
Fossil-Fueled . . . . . 64.7% 59.8% 51.4% 42.3% 35.5%
Nuclear (Indian Point 2) 10.9% 13.3% 9.8% 20.4% 14.8%
Total Generated . . . 75.6% 73.1% 61.2% 62.7% 50.3%
Firm Purchases:
NYPA . . . . . . . . . 8.0% 8.1% 8.9% 4.8% 6.0%
Hydro-Quebec . . . . . 6.5% 3.3% 1.9% 2.9% 4.3%
IPPs . . . . . . . . . 0.9% 0.9% 1.0% 8.9% 11.9%
Other Purchases . . . . . 9.0% 14.6% 27.0% 20.7% 27.5%
Generated & Purchased . . 100% 100% 100% 100% 100%
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For information about the Company's generating facilities,
see "Electric Facilities - Generating Facilities" in Item 2. For
information about the Company's purchases of electric energy, see
"NYPA", "Hydro-Quebec", "Independent Power Producers" and "New
York Power Pool", below. For further information about amounts
of electric energy generated and purchased, see "Operating
Statistics", below.
ELECTRIC PEAK LOAD AND CAPACITY. The electric peak load in
the Company's service area occurs during the summer air
conditioning season. The 1993 one-hour peak load in the
Company's service area, which occurred on July 8, 1993, was
10,667 thousand kilowatts (MW), including an estimated 9,032 MW
for the Company's customers and 1,635 MW for NYPA's customers and
municipal electric agency customers. It is estimated that the
service area peak load was reduced by 39 MW of curtailable load
reduction. The record one-hour peak for the service area
occurred on July 23, 1991 - 10,752 MW, including an estimated
9,229 MW for the Company's customers. The peak in 1993, if
adjusted to design weather conditions, would have been 10,650 MW,
50 MW higher than the peak in 1992 and 100 MW higher than 1991's
record peak, each similarly adjusted. "Design weather" for the
electric system is a standard to which the actual peak load is
adjusted for evaluation.
The capacity resources available to the Company's service
area at the time of the system peak in the summer of 1993
totalled (before outages) 13,165 MW, of which 10,882 MW
represented net available generating capacity (including the
capacity of NYPA's Poletti and Indian Point 3 Units) and 2,283 MW
represented net firm purchases by the Company and NYPA.
For a forecast of peak load and capacity, see "Five-Year
Forecast", below. For information about the Company's
generating, transmission and distribution facilities, see
"Electric Facilities" in Item 2. For information about the
Company's plans to meet its requirements for electric generating
capacity, see "Liquidity and Capital Resources - Electric
Generating Capacity" in Item 7.
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NYPA. NYPA supplies its customers in the Company's service
area with electricity from its Poletti fossil-fueled unit in
Queens, New York, its Indian Point 3 nuclear unit in Westchester
County and other NYPA sources. Electricity is delivered to these
NYPA customers through the Company's transmission and
distribution facilities, and NYPA pays a delivery charge to the
Company. NYPA is contractually obligated to the Company to
provide the capacity needed to meet the present and future
electricity requirements of its customers, except that upon 17
years' prior notice to the Company, NYPA may elect not to provide
for future growth of its customers' requirements.
The Company purchases portions of the output of Poletti and
Indian Point 3 on a firm basis. The Company also purchases firm
capacity from NYPA's Blenheim-Gilboa pumped-storage generating
facility in upstate New York. The Company and NYPA also sell to
each other energy through the New York Power Pool. See "New York
Power Pool", below.
HYDRO-QUEBEC. The Company has an agreement with NYPA to
purchase, through a contract between NYPA and Hydro-Quebec (a
government-owned Canadian electric utility), 780 MW of capacity
and associated kilowatt-hours of energy each year during the
months of April through October until October 31, 1998 (the
Diversity Purchase). The amount and price of a "basic amount" of
energy the Company is entitled to purchase each year are subject
to negotiation with Hydro-Quebec and approval by the National
Energy Board of Canada, a Canadian regulatory agency. However,
the capacity commitment is firm and the Company may draw upon the
capacity in accordance with the contract even if the energy
received by the Company exceeds the basic amount, provided the
Company returns the excess energy to Hydro-Quebec during the
following November-through-March period.
The Company, NYPA and Hydro-Quebec have signed agreements
for the continuation of the Diversity Purchase from April 1, 1999
through October 31, 2018. Unlike the agreements for the current
Diversity Purchase, under the new agreements the annual amount of
energy would be fixed and the price for the energy would be
established in accordance with formulas and procedures set forth
in the agreements. Because of changes in the wholesale power
market that have occurred since the new agreements were signed,
the new agreements have become uneconomic. In March 1994, the
Company and NYPA announced their intention to cancel the new
agreements (as is permitted under the new agreements).
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INDEPENDENT POWER PRODUCERS. Federal and state regulations
encourage competition in the market for generation of electric
power. These laws generally require electric utilities to
purchase electric power from and sell electric power to
qualifying IPPs. The Federal Energy Regulatory Commission (FERC)
has issued rules requiring utilities to purchase electricity from
all qualifying facilities at a price equal to the purchasing
utility's "avoided cost." In addition, the Energy Policy Act of
1992 broadened the FERC's authority to require electric utilities
to provide others with access to their transmission systems and
reduced regulation of certain IPPs. See "Liquidity and Capital
Resources - Electric Generating Capacity and Competition" in Item
7.
NEW YORK POWER POOL. The Company and the other major
electric utilities in New York State, including NYPA, are members
of the New York Power Pool. The primary purpose of the Power Pool
is to coordinate planning and operations, including the purchase
and sale of non-firm economy energy.
As a member of the Power Pool, the Company is required to
maintain its capacity resources (net generating capacity and net
firm purchases) at a minimum reserve margin of 18% above its peak
load, and to pay penalties if it fails to maintain the required
level. The Company met the reserve requirement in 1993 and
expects to meet it in 1994. See "Five-Year Forecast", below.
MUNICIPAL ELECTRIC AGENCIES. Westchester County and New
York City maintain municipal electric agencies to purchase
electric energy, including hydroelectric energy from NYPA. The
Company has entered into agreements with the County and City
agencies whereby the Company is delivering interruptible
hydroelectric energy from NYPA's Niagara and St. Lawrence
projects to electric customers designated by the agencies. These
agreements may be terminated by either party on or after December
31, 1995 upon either one year's prior notice or, in certain
circumstances, upon 10 days' notice. A similar agreement,
covering energy from NYPA's Fitzpatrick nuclear plant, terminates
in 2003. For information on the amount of energy delivered, see
"Operating Statistics", below.
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GAS OPERATIONS
GAS SALES. Gas operating revenues in 1993 were $808.4
million or 12.9 percent of total Company operating revenues.
The percentages were 12.3 and 11.5, respectively, in the two
preceding years. Gas sales volume to firm customers increased
0.6 percent in 1993 from the 1992 level. After adjusting for
variations, principally weather, firm gas sales volume to these
customers increased 3.9 percent. Including sales to interruptible
customers, actual sales volume increased 1.6 percent in 1993.
Natural gas is delivered by pipeline to the Company and is
distributed to customers through the Company's system of
distribution mains and services. For information about the
Company's gas facilities, see "Gas Facilities" in Item 2.
Regulatory changes, which have resulted in the unbundling of
services in the natural gas industry, are enabling users of gas
to purchase gas directly from suppliers and arrange for its
transportation by the appropriate pipeline and local utility
companies. In 1993, the Company established an unregulated
subsidiary to market gas and related services. In compliance with
regulatory restrictions, the subsidiary does not market gas
within the Company's gas service area. During 1993, 53
large-volume customers in the Company's service territory
purchased gas directly from suppliers. The customers pay a
transportation charge to the Company for delivering the gas. For
information on the quantities of gas sold, transported for others
and used by the Company as boiler fuel to generate electricity
and steam, see "Operating Statistics" and "Fuel Supply", below.
GAS REQUIREMENTS. Demand for gas in the Company's service
area tends to peak during the winter heating season. The design
criteria for the Company's gas system assume severe weather
conditions that have not occurred in the Company's service area
since 1934. Under these criteria, the Company estimates that the
requirements to supply its firm gas customers, together with the
minimum amount essential for the electric and steam systems,
would amount to 71,300 thousand dekatherms (mdth) of gas during
the 1993/94 winter heating season and that gas available to the
Company would amount to 94,200 mdth. For the 1994/95 winter, the
Company estimates that the requirements would amount to
approximately 73,300 mdth and that the gas available to the
Company would amount to approximately 92,400 mdth. As of March
22, 1994, the 1993/94 winter peak day sendout to the Company's
customers was 800 mdth, which occurred on January 19, 1994. The
Company estimates that, under the design criteria, the peak day
requirements for firm customers during the 1994/95 winter season
would amount to approximately 845 mdth and expects that it would
have sufficient gas available to meet these requirements.
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GAS SUPPLY. The Company has contracts for the purchase of
firm transportation and storage services with seven interstate
pipeline companies. The Company also has contracts with nine
pipeline and non-pipeline suppliers and three Canadian suppliers
for the firm purchase of natural gas. The Company also has
interruptible gas purchase contracts with numerous suppliers and
interruptible gas transportation contracts with interstate
pipelines. Based on its current projections of demand and prices
for gas and oil, the Company expects for at least the next
several years to be able to supply its firm gas customers'
requirements, maintain an adequate inventory of storage gas and
meet most of the requirements of its large-volume interruptible
customers.
STEAM OPERATIONS
STEAM SALES. The Company sells steam in Manhattan south of
96th Street, mostly to large office buildings, apartment houses
and hospitals. In 1993, steam operating revenues were $325.3
million or 5.2 percent of total Company operating revenues. The
percentages were 5.3 and 5.1, respectively, in the two preceding
years. Steam sales volume was unchanged in 1993 from the 1992
level. After adjusting for variations, principally weather,
steam sales decreased 0.1 percent.
STEAM SUPPLY. 74 percent of the steam sold by the Company
is produced in the Company's electric generating stations, where
it is first used to generate electricity. For information about
the Company's steam facilities, see "Steam Facilities" in Item 2.
STEAM PEAK LOAD AND CAPABILITY. Demand for steam in the
Company's service area tends to peak during the winter heating
season. The one-hour peak load during the winter of 1993/94
(through March 22, 1994) occurred on January 20, 1994 when the
load reached 12.2 million pounds. The Company estimates that for
the winter of 1994/95 the peak demand of its steam customers
would be approximately 12.4 million pounds per hour under design
criteria, which assume severe weather.
On December 31, 1993, the steam system had the capability of
delivering about 13.4 million pounds of steam per hour. This
figure does not reflect the unavailability or reduced capacity of
generating facilities resulting from repair or maintenance. The
Company estimates that, on a comparable basis, the system will
have the capability to deliver approximately 13.4 million pounds
of steam per hour in the 1994/95 winter.
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CAPITAL REQUIREMENTS AND FINANCING
For information about the Company's capital requirements and
financing, the refunding of certain securities and the Company's
securities ratings, see "Liquidity and Capital Resources" in Item
7.
Securities ratings assigned by rating organizations are
expressions of opinion and are not recommendations to buy, sell
or hold securities. A securities rating is subject to revision
or withdrawal at any time by the assigning rating organization.
Each rating should be evaluated independently of any other
rating.
For a forecast of certain operating and financial data, see
"Five-Year Forecast", below.
FUEL SUPPLY
GENERAL. In 1993, 28 percent of the electricity supplied to
the Company's customers was obtained by the Company through
economy purchases of energy produced from a variety of fuels. Of
the remaining 72 percent, which was either generated by the
Company or obtained through long-term firm purchases of energy
(see "Electric Operations", above), on the basis of British
thermal units (Btu) consumed, oil was used to generate 10.5
percent of the electricity, natural gas 36.2 percent, nuclear
power 20 percent, hydroelectric power 4.3 percent, and refuse 1.0
percent. The fuel used to produce steam during 1993 was 63.5
percent oil and 36.5 percent natural gas.
A comparison of the cost, in cents per million Btu, of fuel
used by the Company to generate electricity and steam during the
years 1989-1993 is shown below:
1989 1990 1991 1992 1993
Residual Oil . . . . . 315 398 355 345 348
Distillate Oil . . . . 447 558 491 501 499
Natural Gas . . . . . 263 283 288 285 286
Nuclear . . . . . . . 50 63 50 43 37
Weighted Average . . . 268 297 281 232 229
The Company is prohibited from using fuels that do not
conform to the requirements of the New York State air pollution
control code and, in the case of its in-city plants, the New York
City air pollution control code. In the City, the Company is not
permitted to burn coal or to burn residual fuel oil having a
sulfur content of more than 0.3 percent.
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RESIDUAL OIL. Based on anticipated consumption rates, the
Company has an adequate supply of residual fuel oil for its
generating stations and the Company's shares of generating
capacity at the Roseton and Bowline Point stations jointly-owned
by the Company and other utilities. See "Electric Facilities" in
Item 2. Oil consumption rates vary widely from month to month.
The oil burned at Company facilities in 1993, including the
Company's shares of generating capacity at Roseton and Bowline
Point, totaled 11.8 million barrels. The Company has contracts
for oil supply that have staggered termination dates and has
options for additional oil supply sufficient to cover all of its
expected requirements for residual oil through September 1994.
The Company anticipates covering the balance of its 1994
requirements through new contracts, exercise of existing contract
options and purchases on the spot market.
The Company estimates that more than 90 percent of its
residual oil originates from foreign sources of crude oil.
Supplies could be jeopardized by events such as the oil embargo
imposed in 1973 or the 1979 supply disruption resulting from the
revolution in Iran. The Company experienced no supply
interruption during the 1991 Persian Gulf hostilities.
NATURAL GAS. During 1993, the Company burned approximately
122,981 mdth of gas for the production of electricity and steam,
including 14,828 mdth attributable to the Company's share of
generating capacity at the Roseton and Bowline Point stations.
Burning gas instead of oil reduced the Company's 1993 fuel oil
requirements by about 20 million barrels. The Company expects to
continue to have substantial amounts of gas available in 1994 for
the production of electricity and steam.
DISTILLATE OIL. The Company's estimated 1994 requirements
for distillate oil for gas turbine fuel are about 400,000
barrels. The Company expects to be able to satisfy these
requirements through purchases on the spot market.
COAL. The Company does not burn coal. In 1983, the New
York State Department of Environmental Conservation (DEC) ruled
on an application by the Company for permission to convert three
electric generating units, Ravenswood 3 in Queens and Arthur Kill
2 and 3 on Staten Island, to coal-burning. The DEC ruled that
the Company would be permitted to burn coal at each location only
if flue gas desulfurization (FGD) systems were installed. The
Company's studies showed that it would not be economical to
pursue coal conversion with FGD systems. However, the Company
has installed most of the necessary facilities (without FGD
systems) at Ravenswood 3 and Arthur Kill 3 to provide for
coal-burning in emergency circumstances such as an oil supply
interruption. Even in such an emergency, a special permit, or
waiver of existing restrictions, would be required to allow the
Company to burn coal at these units.<PAGE>
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NUCLEAR FUEL. The nuclear fuel cycle for power plants like
Indian Point 2 consists of (1) mining and milling of uranium ore,
(2) chemically converting the uranium in preparation for
enrichment, (3) enriching the uranium, (4) fabricating the
enriched uranium into fuel assemblies, (5) using the fuel
assemblies in the generating station and (6) storing the spent
fuel.
The Company has contracts covering its expected requirements
for uranium and conversion for Indian Point 2 through 1995, with
options extending through 1999, and for fuel fabrication through
2001. The Company has contracts covering most of its
requirements for uranium enrichment services for the operating
life of Indian Point 2. For information about certain
assessments to be paid to the United States Department of Energy
(DOE) by utilities that have used nuclear fuel, see "Liquidity
and Capital Resources - Uranium Enrichment Decontamination and
Decommissioning Fund" in Item 7.
Under normal operating conditions, scheduled refueling and
maintenance outages are generally required for Indian Point 2
after each cycle of approximately 22 months of operation. The
last such outage ran from January 30, 1993 to April 22, 1993.
Mid-cycle inspection and maintenance outages may also be required
from time to time.
The Company has a contract with the DOE, under the Federal
Nuclear Waste Policy Act of 1982, which provides that, starting
in 1998, the DOE will take title to spent fuel, transport it to a
Federal repository and store it permanently. The contract
provides for a schedule of payments by the Company for storing
existing and future spent fuel. Although the Company's contract
has not been changed, the DOE has announced that it will probably
not take possession of spent fuel before 2010. Spent fuel
storage facilities at Indian Point have been expanded and
currently have the capacity to hold all the fuel expected to be
discharged from the unit through 2005. The Company is planning
to provide for further on-site storage of spent fuel as required
until DOE storage becomes available.
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The Company has arranged for the disposal through June 1994
of low-level radioactive wastes (LLRW) generated at Indian Point
1 and 2 at the only domestic licensed disposal facility currently
accepting LLRW for permanent disposal. Under a 1985 Federal law,
by January 1996 New York State is to provide for permanent
disposal of the Company's LLRW. The Company is planning to
provide for further on-site storage of LLRW as required until New
York State establishes a storage facility or adopts some other
LLRW management method.
REGULATION AND RATES
GENERAL. The New York State Public Service Commission (PSC)
regulates, among other things, the Company's electric, gas and
steam rates, the siting of its transmission lines and the
issuance of its securities. Certain activities of the Company
are subject to the jurisdiction of the Federal Energy Regulatory
Commission (FERC). The Nuclear Regulatory Commission (NRC)
regulates the Company's nuclear units. In addition, various
matters relating to the construction and operation of the
Company's facilities are subject to regulation by other
governmental agencies.
ELECTRIC, GAS and STEAM RATES. The Company's rates are
among the highest in the country. In March 1994, the PSC
approved a $55 million increase in electric rates to become
effective April 1, 1994. The increase reflects recovery over a
three-year period of costs associated with the termination of IPP
contracts. For additional information about the Company's rates,
see "Liquidity and Capital Resources - 1990 Electric Rate
Settlement Agreement, 1992 Electric Rate Settlement Agreement,
and Gas and Steam Rate Increases" in Item 7.
In February 1993, an intervenor in the proceeding in which
the PSC approved the 1992 electric rate settlement instituted a
lawsuit in the New York State Supreme Court seeking an order
setting aside the PSC's April 1992 approval of the settlement,
directing refunds by the Company and directing the PSC to
reconsider the Company's electric rates. In December 1993, the
lawsuit was dismissed by the Appellate Division, Third
Department, of the New York State Supreme Court.
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GENERIC PROCEEDINGS. In 1991, the PSC initiated a proceeding
to review the financial policies it uses to set utility rates.
In May 1993, the Company agreed with the PSC staff, the other New
York State electric and gas utilities and intervenors that the
PSC should establish an "A" bond rating as the appropriate
financial integrity target in order to give utilities needed
access to financial markets on reasonable terms. Under this
agreement, no action would be taken to reduce the rating of
utilities above the "A" level unless the PSC found that the
higher rating was inconsistent with the public interest. In June
1993, the utilities, the PSC staff and one intervenor in this
proceeding agreed to a new method of calculating the cost of
common equity in rate cases. The new method is less volatile
because it is less sensitive to changes in interest rates than
the method the PSC traditionally has used. The PSC is expected
to rule on these agreements in 1994.
For several years the PSC has required utilities to favor
demand side resources in evaluating the cost-effectiveness of
such resources by crediting such resources with 1.4 cents per
kilowatt-hour for avoided adverse environmental impacts
("externalities"). In 1992, the PSC instituted a proceeding to
reexamine the appropriate value for externalities. Consideration
is being given to the application of externalities to supply side
resources and the use of environmental (as opposed to economic)
dispatch. This proceeding could have a significant impact on the
cost of electricity.
In March 1993, the PSC instituted a proceeding to examine
competitive opportunities in the energy marketplace. In January
1994, the PSC staff recommended that utilities be permitted to
offer discounted rates to customers with alternative sources of
energy and that a utility's shareholders bear such portion of the
costs of the discounts as is established for that utility in a
rate proceeding. The staff also noted that the PSC could
consider instituting a new proceeding to examine "retail
wheeling". In a notice issued on March 17, 1994, the PSC
requested that the parties to the proceeding address the scope of
a possible PSC investigation into "...the appropriate market
structure and regulatory regime for the future, including such
fundamental changes as de-tarriffing for certain customers,
deregulating the generation function and retail competition."
The PSC is expected to issue a final decision in this proceeding
in 1994.
<PAGE>
<PAGE> - 17 -
In late 1993, the PSC instituted a proceeding to examine the
impact of the emerging competitive gas market on gas utility
rates and services. In particular, the PSC wanted to explore the
impact of "unbundling" of sales and transportation services by
interstate pipeline companies pursuant to FERC Order 636. The
PSC has targeted the 1994/95 winter for implementation of any
changes resulting from this proceeding.
GAS TAKE-OR-PAY PROCEEDING. In 1988, the PSC instituted a
generic proceeding to consider whether, and to what extent, New
York gas utilities should be permitted to recover take-or-pay
charges levied upon them by pipeline suppliers with the approval
of the FERC. The PSC mandated that certain gas take-or-pay costs
be deferred, with interest, pending a determination of
disposition and that the remaining take-or-pay costs be collected
from customers subject to refund. In September 1993, the PSC
approved a settlement between the Company and the PSC staff
pursuant to which amounts already collected from customers will
no longer be subject to refund and the Company is permitted to
bill customers for the deferred take-or-pay costs associated with
the electric and steam departments over a two-year period and for
the costs associated with the gas department over a four-year
period. At December 31, 1993, deferred take-or-pay costs,
including interest, amounted to $35 million. As part of the
settlement, the Company will not accrue additional interest on
unbilled deferred costs during the recovery period.
STATE ENERGY PLAN. In March 1994, the New York State Energy
Planning Board, comprised of the Chairman of the PSC and the
Commissioners of the New York State Energy Office and the
Department of Environmental Conservation, released a draft State
Energy Plan which is designed to provide "an intelligent
framework for evaluating the proper course for energy policy,
environmental protection and economic development." The goal of
the energy planning process is to "assure that New Yorkers will
have a safe, affordable and reliable supply of energy that will
promote future economic growth and protect our environment." The
Company and other interested parties will have the opportunity to
submit comments on and suggest changes to the draft Plan.
COMPETITION
For information concerning competition in the electricity
and gas businesses, see "Liquidity and Capital Resources -
Electric Generating Capacity and Competition" in Item 7 and "Gas
Operations - Gas Sales" above. The PSC has issued rules
requiring competitive bidding to be the primary means by which
additional electric capacity and energy is obtained by utilities,
although the PSC has indicated that utilities should pursue other
alternatives when justified.
<PAGE>
<PAGE> - 18 -
ENVIRONMENTAL MATTERS AND RELATED LEGAL PROCEEDINGS
GENERAL. During 1993, the Company's capital expenditures
for environmental protection facilities and related studies were
approximately $22 million. The Company estimates that its capital
expenditures for such facilities and related studies will amount
to approximately $34 million in 1994 and $16 million in 1995.
INDIAN POINT. The Company believes that a serious accident
at its Indian Point 2 nuclear unit is extremely unlikely, but
despite substantial insurance coverage, the losses to the Company
in the event of a serious accident could materially adversely
affect the Company's financial position and results of
operations. For information about Indian Point 2 and the
Company's retired Indian Point 1 nuclear unit, see "Electric
Operations" and "Fuel Supply - Nuclear Fuel" above, "Cooling
Towers" below, "Electric Facilities - Generating Facilities" in
Item 2, "Liquidity and Capital Resources - Capital Requirements
and Uranium Enrichment Decontamination and Decommissioning Fund"
in Item 7 and Notes A and F to the financial statements in Item
8.
SUPERFUND. The Federal Comprehensive Environmental
Response, Compensation and Liability Act of 1980 (Superfund) by
its terms imposes joint and several strict liability, regardless
of fault, upon generators of hazardous substances for resulting
removal and remedial costs and environmental damages.
In the course of the Company's operations, materials are
generated that are deemed to be hazardous substances under
Superfund. These materials include asbestos and dielectric
fluids containing polychlorinated biphenyls (PCBs). Other
hazardous substances may be generated in the Company's operations
or may be present at Company locations. Also, other hazardous
substances may have been generated at the manufactured gas plants
which the Company and its predecessor companies used to operate.
For information about claims or possible claims against the
Company under Superfund, see "Superfund" in Item 3 and "Superfund
Claims" in Note F to the financial statements in Item 8.
ASBESTOS. Asbestos is present in numerous Company
facilities. In 1989, a Company steam main exploded in the
Gramercy Park area of Manhattan, causing asbestos contamination
of nearby buildings and requiring a major cleanup. Most of the
costs were covered by insurance. See "Gramercy Park" in Item 3.
For information with respect to suits against the Company
involving asbestos, see "Asbestos Claims" in Note F to the
financial statements in Item 8 and "Asbestos Litigation" in Item
3.
<PAGE>
<PAGE> - 19 -
TOXIC SUBSTANCES CONTROL ACT OF 1976. Virtually all
electric utilities, including the Company, own equipment
containing PCBs. PCBs are regulated under the Federal Toxic
Substances Control Act of 1976. The Company has reduced
substantially the amount of PCBs in electrical equipment it uses,
including transformers located in or near public buildings.
AIR QUALITY. For information about the Federal Clean Air
Act amendments of 1990, see "Liquidity and Capital Resources -
Clean Air Act Amendments" in Item 7.
The flue gases from oil combustion furnaces, including the
Company's generating stations as well as home heating furnaces,
contain microscopic particles of ash and soot. Some chemical
constituents of these particles have been designated as
"Hazardous Air Pollutants" under the Clean Air Act Amendments of
1990. Utility boilers are exempt from regulation as sources of
hazardous air pollutants until the United States Environmental
Protection Agency (EPA) completes a study of the hazards to
public health reasonably anticipated to occur as a result of
emissions by electric generating units. The EPA is expected to
make a determination concerning the need for control of hazardous
air pollutants from utility facilities in 1994.
The New York State Department of Environmental Conservation
(DEC) in March 1991 issued a notice of intent to prepare a draft
environmental impact statement (DEIS) concerning a DEC draft of
regulations that would establish standards of performance,
effective beginning in the year 2000, for steam electric
generating units that are operated beyond their "useful design
life." The DEC draft regulations define "useful design life" as
45 years from the date of initial operation. All of the
Company's steam electric generating units in New York City will
have reached that point by 2014. The draft regulations would
impose operating efficiency requirements (heat rates) that many
of these units may not be able to meet, and stringent nitrogen
oxides and particulate matter emissions limitations.
<PAGE>
<PAGE> - 20 -
The DEIS process will afford the Company and other
interested parties the opportunity to submit comments and suggest
changes to the draft regulations. The Governor of New York has
directed the DEC to integrate the requirements of the Clean Air
Act Amendments with the proposed life extension regulations in a
manner that meets the objectives of the State Energy Plan and
considers the impact on utilities and ratepayers. See "Regulation
and Rates - State Energy Plan", above. Upon completion of the
DEIS, the DEC may propose regulations for adoption. If the DEC
proposes regulations in their current draft form and they are
adopted, the regulations could require the retirement of many of
the Company's in-City electric generating units earlier than
planned, starting in the year 2000. The Company and the New York
Power Pool will oppose adoption of any regulations that would
impose unreasonable standards of performance on electric
generating units or require the premature retirement of such
units. The Company is unable to predict the final form of the
regulations.
The New York City air pollution control code contains
limitations on the allowable sulfur content of fuels and on
emissions of sulfur dioxide, particulate matter, oxides of
nitrogen and various trace elements. Certain provisions of the
code, specifically those pertaining to standards for emissions of
nitrogen oxides, may be impracticable to meet at some of the
Company's generating stations located in New York City unless
variances or other relief from such provisions are granted.
COOLING TOWERS. The Federal Clean Water Act provides for
effluent limitations, to be implemented by a permit system, to
regulate the discharge of pollutants, including heat, into United
States waters. In 1981, the Company entered into a settlement
with the EPA and others that relieved the Company for at least 10
years from a proposed regulatory agency requirement that, in
effect, would have required that cooling towers be installed at
the Bowline Point, Roseton and Indian Point units. In return the
Company agreed to certain plant modifications, operating
restrictions and other measures and surrendered its operating
license for a proposed pumped-storage facility that would have
used Hudson River water.
<PAGE>
<PAGE> - 21 -
In September 1991, after the expiration of the 1981
settlement, three environmental interest groups commenced
litigation challenging the permit status of the units pending
renewal of their discharge permits, which expired in October
1992. Under a consent order settling this litigation, certain
restrictions on the units' usage of Hudson River water have been
imposed on an interim basis until September 1994. Permit renewal
applications were filed in April 1992, after which the DEC
determined that the Company must submit a DEIS to provide a basis
for determining new permit conditions. The DEIS, submitted in
July 1993, includes an evaluation of the costs and environmental
benefits of potential mitigation alternatives, one of which is
the installation of cooling towers. After its review, the DEC
will release for public comment the DEIS and draft permit
conditions. Pending issuance of final renewal permits, the terms
and conditions of the expired permits continue in effect.
ELECTRIC AND MAGNETIC FIELDS. Electric and magnetic fields
(EMF) are found wherever electricity is used. Several scientific
studies have raised concerns that EMF surrounding electric
equipment and wires, including power lines, may present health
risks. Although no studies have established a cause-and-effect
relationship between EMF and adverse health effects, the Company
conducts research on EMF and also supports studies by the
Electric Power Research Institute and by the Empire State
Electric Energy Research Corporation.
In the event that a causal relationship between EMF and
adverse health effects is established, there could be a material
adverse effect on the electric utility industry, including the
Company.
Under certain circumstances, there might be a material
adverse effect even if no causal relationship is established. In
October 1993, the New York State Court of Appeals held that to
recover consequential damages in an eminent domain proceeding
for the loss of value of the portion of claimants' property not
taken for the construction of a high voltage power line,
claimants had only to prove that there was some prevalent
perception of a danger emanating from the power line that
diminished the market value of the remainder of their property.
Claimants did not have to prove the reasonableness of this
perception.
<PAGE>
<PAGE> - 22 -
GENERAL
STATE ANTITAKEOVER LAW. New York State law provides that a
"resident domestic corporation," such as the Company, may not
consummate a merger, consolidation or similar transaction with
the beneficial owner of a 20 percent or greater voting stock
interest in the corporation, or with an affiliate of the owner,
for five years after the acquisition of the voting stock
interest, unless the transaction or the acquisition of the voting
stock interest was approved by the corporation's board of
directors prior to the acquisition of the voting stock interest.
After the expiration of the five-year period, the transaction may
be consummated only pursuant to a stringent "fair price" formula
or with the approval of a majority of the disinterested
stockholders.
EMPLOYEES
The Company had 17,586 employees on December 31, 1993.
Approximately two-thirds of the employees are represented by a
union whose collective bargaining agreement with the Company
expires on June 22, 1996. An additional 2.5 percent of the
employees are represented by another union whose collective
bargaining contract expires on June 21, 1997.
RESEARCH AND DEVELOPMENT
For information about the Company's research and development
costs, see Note A to the financial statements in Item 8.
<PAGE>
<PAGE> - 23 -
<TABLE>
OPERATING STATISTICS
===============================================================================================
<S> <C> <C> <C> <C> <C>
Year Ended December 31 1993 1992 1991 1990 1989
- -----------------------------------------------------------------------------------------------
ELECTRIC Energy Generated
Purchased and Sold (MWhrs):
Generated 20,079,995 24,157,503 23,989,334 28,578,580 30,799,214
Purchased from Others 19,813,654 14,360,373 15,238,100 10,497,311 9,817,167
Total Electric Energy
Generated and Purchased 39,893,649 38,517,876 39,227,434 39,075,891 40,616,381
Less:
Electric energy supplied
without direct charge 74 75 74 72 71
Electric energy used by
Company (a) 183,903 173,834 157,079 164,274 164,863
Distribution losses and
other variances 2,863,828 2,781,046 2,786,547 2,543,025 3,099,154
Total Electric Energy
Sold (b) 36,845,844 35,562,921 36,283,734 36,368,520 37,352,293
Electric Energy Sold (MWhrs):
Residential 10,512,496 9,845,397 10,380,814 9,861,492 9,699,143
Commercial and Industrial 25,118,125 24,680,600 24,930,864 25,066,438 24,709,127
Railroads and Railways 49,542 50,934 46,726 47,057 35,226
Public Authorities 560,836 542,358 531,272 499,243 491,114
Total Sales to Con
Edison Customers 36,240,999 35,119,289 35,889,676 35,474,230 34,934,610
Delivery Service to
NYPA Customers 8,441,624 8,187,292 8,241,174 8,205,452 8,138,268
Service for Municipal
Agencies 361,854 287,489 681,791 250,913 113,982
Total Sales in
Franchise Area 45,044,477 43,594,070 44,812,641 43,930,595 43,186,860
Sales to other electric
utilities (c) 604,845 443,632 394,058 894,290 2,417,683
Average Annual kWhr Use Per
Residential Customer (d) 4,104 3,872 4,116 3,928 3,884
Average Revenue Per kWhr
Sold (cents):
Residential (d) 16.0 15.0 14.7 14.4 13.8
Commercial and Industrial (d) 12.6 12.0 11.9 11.6 11.1
(a) Electric Energy used by the Company in 1993, 1992, 1991, 1990 and 1989 includes MWhrs of
29,233; 30,859; 9,354; 22,483 and 21,748 supplied to NYPA.
(b) Includes sales to other electric utilities.
(c) 1993, 1992, 1991, 1990 and 1989 include MWhrs of 2,142; 52,929; 4,982; 38,149 and 539,942
which were sold to NYPA and are also included in the Delivery Service to NYPA.
(d) Includes Municipal Agency sales.
<PAGE>
<PAGE> - 24 -
OPERATING STATISTICS
===============================================================================================
<S> <C> <C> <C> <C> <C>
Year Ended December 31 1993 1992 1991 1990 1989
- -----------------------------------------------------------------------------------------------
GAS (Dth):
Purchased 214,719,241 221,181,200 222,730,835 226,222,779 200,498,993
Underground storage-net 222,559 752,561 (2,691,256) (7,119,602) (2,210,788)
Used as boiler fuel
at Electric and Steam
Stations (108,153,436)(116,951,577)(121,773,852)(120,971,124) (93,140,739)
Gas Purchased for Resale 106,788,364 104,982,184 98,265,727 98,132,053 105,147,466
Less:
Gas used by Company 203,793 153,537 150,387 145,521 209,035
Distribution losses and
other variances 3,998,234 3,856,836 5,563,386 3,001,176 7,781,704
Total Gas Sold 102,586,337 100,971,811 92,551,954 94,985,356 97,156,727
Gas Sold (Dth)
Firm Sales
Residential 52,624,331 52,626,406 46,200,725 46,471,766 48,670,195
General 37,214,994 36,656,433 33,539,780 33,968,421 34,508,071
Total Firm Sales 89,839,325 89,282,839 79,740,505 80,440,187 83,178,266
Interruptible Sales 12,747,012 11,688,972 12,811,449 14,545,169 13,978,461
Total Sales to Con
Edison Customers 102,586,337 100,971,811 92,551,954 94,985,356 97,156,727
Transportation of Customer-
Owned Gas 20,891,649 25,448,441 26,823,303 23,142,014 17,169,728
Total Sales and
Transportation 123,477,986 126,420,252 119,375,257 118,127,370 114,326,455
Average Revenue Per Dth Sold:
Residential $ 9.27 $ 8.41 $ 8.76 $ 8.78 $ 8.33
General $ 6.71 $ 6.03 $ 6.07 $ 6.28 $ 6.61
STEAM Sold (Mlbs): 29,394,335 29,381,922 28,531,067 28,492,095 31,081,097
Average Revenue per Mlbs Sold $11.06 $10.63 $10.45 $10.39 $ 9.03
Customers - Average for Year
Electric 2,964,716 2,950,614 2,938,201 2,928,559 2,908,764
Gas 1,028,048 1,026,546 1,027,933 1,028,018 1,026,152
Steam 1,973 1,970 1,975 1,981 1,994
</TABLE>
<PAGE>
<PAGE> - 25 -
<TABLE>
FIVE-YEAR FORECAST
The following pages show actual 1993 amounts for certain operating and financial data and the Company's forecasts of such data
for the years 1994 through 1998. Footnotes appear following the forecast. The forecast data are estimates and not statements
of fact. These estimates were developed by the Company for its planning purposes, based on information available on or shortly
after December 31, 1993, including information and estimates provided by others. These estimates are reviewed and revised by the
Company periodically. Like all projections, they are subject to, and may be rendered inaccurate by, future events. The forecast
data could be affected by weather variations, changes in economic conditions or trends, changes in laws or regulations, and other
unknown or unforeseen factors.
<S> <C> <C> <C> <C> <C> <C>
Actual Forecast Forecast Forecast Forecast Forecast
1993 1994 1995 1996 1997 1998
ENERGY SALES (a)
Electric - millions of kilowatthours
Con Edison customers:
Total before DSM (b) 38,357 39,034 40,028 40,695 41,297
DSM (c) (2,267) (2,734) (3,116) (3,490) (3,848)
Net Con Edison Customers 36,241 36,090 36,300 36,912 37,205 37,449
NYPA customers (d) 8,441 8,489 8,619 8,776 8,905 9,045
Municipal Electric Agencies (e) 362 382 391 393 397 451
Total Service Area 45,044 44,961 45,310 46,081 46,507 46,945
Gas - firm customers (f)
(thousands of dekatherms) 89,839 93,300 95,400 99,000 101,100 104,500
Steam (million of pounds) 29,394 29,790 29,800 30,300 30,350 30,640
PEAK LOAD (g)
Electric - peak hour load - megawatts
Con Edison customers:
Total before DSM (b) 9,736 9,955 10,176 10,400 10,603
Curtailable Electric Service (h) (i) (50) (25) 0 0 0
DSM (j) (675) (820) (941) (1,061) (1,173)
Net Con Edison Customers 9,032 9,011 9,110 9,235 9,339 9,430
NYPA customers (d) 1,601 1,553 1,569 1,586 1,605 1,624
Municipal Electric Agencies (e)(k) 34 86 92 101 107 129
Net Service Area Peak Load 10,667(l) 10,650 10,771 10,922 11,051 11,183
Gas - firm customers (m)
(thousands of dekatherms per day) 800 845 865 890 915 940
Steam (millions of pounds per hour)(n) 12.2 12.4 12.4 12.5 12.5 12.6
CAPABILITY
Electric (net megawatts at summer peak)
Con Edison generation 9,073 8,668 8,461 8,442 8,442 8,442
Firm purchases - IPPs (o) 648 665 2,020 2,359 2,359 2,359
Firm purchases - NYPA & Hydro-Quebec (p) 1,351 1,513 1,113 1,113 1,113 1,113
Con Edison capacity resources 11,072 10,846 11,594 11,914 11,914 11,914
Capacity for NYPA customers(d) 2,093 2,204 2,212 2,210 2,217 2,266
Total Service Area 13,165 13,050 13,806 14,124 14,131 14,180
Gas - firm purchases
(thousands of dekatherms per day) 894 894 894 925 973 973
Steam (million of pounds per hour) 13.4 13.4 13.4 13.4 13.4 13.4
<PAGE>
<PAGE> - 26 -
<S> <C> <C> <C> <C> <C> <C> <C>
Actual Forecast Forecast Forecast Forecast Forecast Forecast
1993 1994 1995 1996 1997 1998 5 Year Total
CAPITAL REQUIREMENTS AND MATURING SECURITIES
(millions of dollars)
Construction Expenditures
Electric $ 530 $501 $459 $450 $448 $385 $2,243
Gas 106 112 120 124 127 127 610
Steam 32 48 33 30 29 30 170
Common 121 109 131 125 112 100 577
Total Construction Expenditures (q) 789 770 743 729 716 642 3,600
Enlightened Energy program - net 59 64 6 (1) (10) 3 62
Power contract termination costs - net (r) 68 (36) (13) (3) (5) (7) (64)
Nuclear Decommissioning Trust (s) 19 12 12 12 12 12 60
Nuclear Fuel Expenditures 14 53 13 52 14 55 187
Subtotal 949 863 761 789 727 705 3,845
Retirements of Long-Term Debt and
Preferred Stock (t) 178 134 11 184 106 200 635
Total $1,127 $997 $772 $973 $833 $905 $4,480
PRINCIPAL NON-CASH CHARGES AND CREDITS TO INCOME
(million of dollars)
Book Depreciation and Amortization 404 425 448 468 492 514 2,347
Amortization of Nuclear Fuel 20 27 18 26 24 25 120
Deferred Taxes 94 70 80 60 50 60 320
Allowance for Equity and Borrowed
Funds Used During Construction 11 13 10 11 10 9 53
- --------------------------------
FOOTNOTES TO FIVE-YEAR FORECAST
(a) Forecasts for 1994-1998 assume normal weather conditions.
(b) Does not include sales to other utilities.
(c) For 1994-1998, this represents anticipated sales reduction resulting from Company sponsored demand side management and
non-rebate induced conservation, cumulative since 1990.
(d) See "Electric Operations - NYPA," above.
(e) See "Electric Operations - Municipal Electric Agencies", above.
(f) Actual sales to interruptible gas customers in 1993 amounted to 12,747 thousands of dekatherms (including 250
thousands of dekatherms sold to NYPA).
(g) Forecasts for 1994-1998 assume design weather conditions.
(h) For 1994-1995, this represents anticipated load reduction resulting from the Company sponsored curtailable electric
service program. The program is scheduled to be terminated after 1995.
(i) At 1993 peak, an estimated 39 MW of load reduction resulted from the Company sponsored curtailable electric service program.
(j) For 1994-1998, this represents anticipated load reduction resulting from Company sponsored demand side management and
non-rebate induced conservation, cumulative since 1990.
(k) Includes electric demand of economic development customers.
(l) At design weather conditions, the 1993 peak electric load would have been 10,650 MW.
(m) Reflects the gas supply year which begins on November 1 of each calendar year shown. "Actual" peak day demand shown for 1993
assumes that peak day demand for the period occurred prior to March 22, 1994.
(n) Reflects the winter season beginning in the year shown. "Actual" peak steam demand shown for 1993 assumes that peak day demand
for the winter occurred prior to March 22, 1994.
(o) For 1993 and 1994, includes capacity from Cogen Technologies (645 MW). Selkirk Cogen Partners, L.P. (265 MW), is expected to
commence operational testing of its generating plant during the second quarter of 1994 and could commence commercial operation
as early as August 1994. Sithe/Independence Power Partners, L.P. (740 MW) is expected to commence commercial operation late
in 1994. Certain other IPPs (approximately 685 MW) are expected to commence commercial operation during 1995 and 1996.
See "Liquidity and Capital Resources - Electric Generating Capacity" in Item 7.
(p) See "Electric Operations - NYPA and Hydro-Quebec", above.
(q) Assumes cost escalation at an average annual rate of 4.5 percent throughout the forecast period.
(r) Does not reflect recovery provisions approved by the PSC in March 1994. See "Regulation and Rates - Electric, Gas and Steam
Rates", above.
(s) Reflects current rate allowance for nuclear portion of decommissioning costs. See Note A to the financial statements in Item 8.
(t) Does not reflect refundings in advance of maturity.
/TABLE
<PAGE>
<PAGE> - 27 -
ITEM 2. PROPERTIES
At December 31, 1993, the capitalized cost of the Company's
utility plant, net of accumulated depreciation, (and excluding
$70.4 million of nuclear fuel assemblies) was as follows:
Net Capitalized Cost Percentage of
Classification (millions of dollars) Net Utility Plant
In Service:
Electric:
Production $ 1,770.6 18%
Transmission 1,152.4 11%
Distribution 4,602.8 46%
Gas 1,052.2 10%
Steam 329.8 3%
Common 760.5 8%
Held For Future Use 28.2 -
Construction Work in
Progress 389.2 4%
Net Utility Plant $10,085.7 100%
ELECTRIC FACILITIES
GENERATING FACILITIES. As shown in the following table, at
December 31, 1993, the Company's net maximum generating capacity
(on a summer rating basis) was 8,674 MW, without reduction to
reflect the unavailability or reduced capacity at any given time
of particular units because of maintenance or repair or their use
to produce steam for sale. For information about the electric
energy purchased by the Company, see "Electric Operations" in
Item 1.
Net Generating Capacity Percentage of Electric
Generating at December 31, 1993 Energy Generated and
Stations (Megawatts-Summer Rating) Purchased in 1993
Fossil-Fueled
Ravenswood (3 Units) 1,742 11.3%
Astoria (3 Units) 1,075 9.4%
Arthur Kill (2 Units) 826 1.6%
East River (3 Units) 430 1.5%
Bowline Point (2 Units)
- two-thirds interest 808 4.5%
Roseton (2 Units)
- 40% interest 484 3.6%
Other (8 Units) 291 2.9%
Subtotal 5,656 34.8%
Nuclear - Indian Point 931 14.8%
Gas Turbines (39 Units) 2,087 0.7%
Total 8,674 50.3%
<PAGE>
<PAGE> - 28 -
The percentage of electric energy generated and purchased in
1993 shown on the table above for the Astoria station, 9.4
percent, includes energy generated by two units that were retired
at the end of 1993.
The Company's fossil-fueled plants burn natural gas or
residual oil. Most of the gas turbines burn distillate oil.
Certain units have the capability to burn either natural gas or
oil, and certain units can be converted to burn coal. See "Fuel
Supply" in Item 1.
For information about the Company's Indian Point 2 nuclear
unit, see "Electric Operations", "Fuel Supply - Nuclear Fuel",
"Environmental Matters and Related Legal Proceedings - Indian
Point and Cooling Towers" in Item 1, "Liquidity and Capital
Resources - Capital Requirements" in Item 7 and Notes A and F to
the financial statements in Item 8.
The Company's generating stations are located in New York
City with the exception of the Indian Point station in
Westchester County, New York; the Bowline Point station in
Rockland County, New York; and the Roseton station in Orange
County, New York.
The Company's electric and steam generating stations are
held in fee with the following exceptions: (i) Orange and
Rockland Utilities, Inc. (O&R) has a one-third interest and the
Company has a two-thirds interest as tenants in common in the
Bowline Point station, which is operated by O&R; (ii) Central
Hudson Gas & Electric Corporation (Central Hudson) has a 35
percent interest, Niagara Mohawk Power Corporation (Niagara
Mohawk) has a 25 percent interest and the Company has a 40
percent interest as tenants in common in the Roseton station
(which is operated by Central Hudson), with Central Hudson having
the right to acquire the Company's interest in 2004; and (iii)
the Company leases from trusts in which it owns the remainder
interests certain gas turbine generating facilities of which the
Company can assume direct ownership upon expiration of the leases
between 1995 and 1997.
The Company has acquired property in the mid-Hudson valley,
at a cost of approximately $12.8 million, as a possible location
for baseload plants in the next century. Pursuant to the 1992
Electric Rate Settlement Agreement (see "Liquidity and Capital
Resources - 1992 Electric Rate Settlement Agreement" in Item 7),
the Company is conducting a study, expected to be completed in
1994, regarding whether to retain or dispose of the mid-Hudson
site.
<PAGE>
<PAGE> - 29 -
TRANSMISSION FACILITIES. The Company has interconnections
for the transmission of power with Niagara Mohawk, Central
Hudson, O&R, New York State Electric and Gas Corporation,
Connecticut Light and Power Company, Long Island Lighting Company
and Public Service Electric and Gas Company. At December 31,
1993, the Company's capacity to receive power from other systems
to supply service area load at the time of the summer peak was
approximately 3,400 MW, in addition to the transmission capacity
needed to deliver to the Company's service area its share of the
output of the Roseton and Bowline Point stations. The Company's
transmission facilities are located in New York City and
Westchester, Orange, Rockland, Putnam and Dutchess counties in
New York State.
At December 31, 1993, the Company's transmission system had
approximately 427 miles of overhead circuits operating at 138,
230, 345 and 500 kilovolts and approximately 378 miles of
underground circuits operating at 138 and 345 kilovolts. There
are approximately 267 miles of radial subtransmission circuits
operating at 138 kilovolts. The Company's transmission and area
substations, supplied by circuits operated at 69 kilovolts and
above, have a total transformer capacity of 40,759 megavolt
amperes.
DISTRIBUTION FACILITIES. The Company owns various
substations and distribution facilities located throughout New
York City and Westchester County. At December 31, 1993, the
Company's distribution system had 56 distribution substations,
with a transformer capacity of 22,021 megavolt amperes, 32,093
miles of overhead distribution lines and 82,348 miles of
underground distribution lines.
GAS FACILITIES
Natural gas is delivered by pipeline to the Company at
various points in its service territory and is distributed to
customers by the Company through approximately 4,200 miles of
mains and 355,000 service lines. The Company owns a natural gas
liquefaction facility and storage tank at its Astoria property in
Queens, New York. The plant can store approximately 1,000 mdth
of which a maximum of about 250 mdth can be withdrawn per day.
The Company has about 1,230 mdth of additional natural gas
storage capacity at a field in upstate New York, owned and
operated by Honeoye Storage Corporation, a corporation in which
the Company and two neighboring utilities own a controlling
interest.
The Company has a wholly-owned subsidiary, Edison Liberty
Transmission Corporation, which holds a 3 1/3 percent interest in
a partnership planning to build a gas pipeline across the Lower
New York Bay to a delivery point in New York City.
<PAGE>
<PAGE> - 30 -
STEAM FACILITIES
The Company generates steam for distribution at five
electric generating stations and two steam-only generating
stations and distributes steam to customers through approximately
88 miles of mains and 16 miles of service lines.
OTHER FACILITIES
The Company also owns or leases various pipelines, fuel
storage facilities, office equipment, a thermal outfall structure
at Indian Point, and other properties located primarily in New
York City and Westchester, Orange, Rockland, Putnam and Dutchess
counties in New York State.
THE COMPANY MORTGAGE
Substantially all the properties and franchises of the
Company, other than expressly excepted property, are subject to
the liens securing the Company's First and Refunding Mortgage
Bonds and the mortgage bonds of acquired companies. As of
December 31, 1993, $302.9 million aggregate principal amount of
such mortgage bonds remained outstanding, of which $125 million
is scheduled to mature in 1994, $175 million in 1996 and the
balance by 1998. The Company has not issued mortgage bonds since
1974.
<PAGE>
<PAGE> - 31 -
ITEM 3. LEGAL PROCEEDINGS
SUPERFUND
For a discussion of claims and possible claims against the
Company under the Federal Comprehensive Environmental Response,
Compensation and Liability Act of 1980 (Superfund) and the
estimated liability accrued for certain Superfund claims, see
"Environmental Matters and Related Legal Proceedings - Superfund"
in Item 1, and "Superfund Claims" in Note F to the financial
statements in Item 8. The following is a discussion of the
significant proceedings pending under Superfund or similar
statutes involving sites for which the Company has been asserted
to have a liability. The listing is not exhaustive and
additional proceedings may arise in the future.
MAXEY FLATS NUCLEAR DISPOSAL SITE. The United States
Environmental Protection Agency (EPA) advised the Company by
letter, dated November 26, 1986, that it is one of 832
potentially responsible parties (PRPs) under Superfund for the
investigation and cleanup of the Maxey Flats Nuclear Disposal
Site in Morehead, Kentucky. The site is owned by the State of
Kentucky and was operated as a disposal facility for low level
radioactive waste from 1963 through 1977 by the Nuclear
Engineering Corporation (now known as U.S. Ecology Corporation).
EPA's letter alleges that various radionuclides and organic
chemicals have been released from the site into the environment.
In 1987, the Company joined a PRP steering committee that agreed
to perform an EPA-approved study of the site. The study has been
completed. On September 30, 1991, the EPA published its cleanup
program for the Maxey Flats Site. The cleanup program calls for
the installation of impervious covers over the waste disposal
areas of the site. The Company's share of the cleanup costs is
expected to be about $516,000 based on the Company's 0.67 percent
share of the total waste at the site plus administrative costs.
EASTERN DIVERSIFIED METALS SITE. The EPA advised the
Company by letter, dated March 5, 1987, that it is one of 118
PRPs under Superfund for the investigation and cleanup of the
Eastern Diversified Metals Site in Hometown, Pennsylvania.
Between 1966 and 1977, Diversified Industries used the site for a
copper wire salvaging operation which involved the disposal of
shredded wire insulation in a waste pile located on the site.
The EPA alleges that various metals and organic chemicals have
been released from the waste pile into the environment. A
preliminary ranking list appended to the EPA's letter indicates
that the Company is responsible for less than 0.03 percent of the
waste insulation material at the site. An EPA-approved site
study has been performed by the site owner and a PRP allegedly
responsible for about 77 percent of the waste. However, it is
not possible to estimate the cleanup costs at this time because
the EPA has not issued a final cleanup program for the site.
<PAGE>
<PAGE> - 32 -
CURCIO SCRAP METAL SITE. The EPA advised the Company, in a
letter received on August 11, 1987, that it had documented the
release of hazardous substances into the environment at the site
of Curcio Scrap Metal, Inc. in Saddle Brook, New Jersey, and that
the EPA had information indicating that the Company sent
hazardous substances (PCBs) to the site. The Company provided
the EPA with records that indicated that the Company sold scrap
electric transformers to a metal broker who in turn sold them to
the owner of the site. A site study indicated that chemical
contamination has occurred on a portion of the site. Elevated
concentrations of PCBs and various organic compounds and metals
have been detected in the soil and PCBs and organic compounds and
metals have also been detected in the shallow groundwater beneath
the site.
On September 30, 1991, the EPA issued a Unilateral
Administrative Order which requires the Company and three other
PRPs to commence a soil cleanup of this site pursuant to the
EPA's Record of Decision, dated June 28, 1991. This soil cleanup
has been completed. The EPA has not yet formulated a cleanup
program for the groundwater under and around the Curcio site.
The Company's estimate of the cost of the additional groundwater
studies is $100,000. The EPA has only designated five PRPs for
this site and, as a result, the Company will be expected to pay a
major share of the cleanup costs.
METAL BANK OF AMERICA SITES. The EPA advised the Company by
letter dated October 26, 1987 that it has reason to believe that
the Company was a supplier of used transformers to Metal Bank of
America Inc.'s recycling sites in Philadelphia during the late
1960s and thereafter. One of the sites has been placed on the
EPA's national priority list under Superfund as a result of a
leak in a storage tank containing PCBs. The EPA alleges that
PCBs have been found in the ground water, soils and in the
sediments of the adjoining Delaware River. The Company has
provided the EPA with documents which indicate that the Company
sold approximately 81 scrap transformers to a broker who, in
turn, delivered them to the site. Under a steering committee
participation agreement, the Company will be responsible for
1.48% of the expense of a remedial investigation and feasibility
study, the scope of which has been negotiated with the EPA. The
steering committee members, including the Company, have entered
into an EPA administrative consent order to implement the study.
Based on the committee's budget for the study, the Company's
share of the cost of the study will be about $100,000.
<PAGE>
<PAGE> - 33 -
NARROWSBURG SITE. In 1987, the New York State Attorney
General notified the Company that he has evidence that the
Company is a PRP under Superfund for hazardous substances that
have been released at the Cortese landfill in Narrowsburg,
Sullivan County, New York. The Cortese landfill is listed on the
EPA's national priorities list. Company records indicate that
drums containing non-nuclear waste were shipped from Indian Point
to the Cortese landfill for disposal. The Attorney General has
commenced an action under Superfund in the United States District
Court for the Southern District of New York against the Cortese
site owner and operator and SCA Services, an alleged transporter
of hazardous substances to the site. On January 17, 1989, SCA
Services commenced a third-party action for contribution against
the Company and five other parties whose chemical waste was
allegedly disposed of at the site. In 1990, SCA served a second
amended third-party complaint in which it sued the Company and 27
other third-party defendants for contribution. The Company and
SCA Services have reached a settlement of the third-party action
under which the Company's sole responsibility will be to pay 6%
of the first $25 million of remedial costs at the site. SCA
Services has agreed to indemnify the Company for any other
remedial costs that it has to pay.
CARLSTADT SITE. On August 20, 1990, the Company was served
with a third-party complaint in a Superfund cost contribution
action for a former waste solvent and oil recycling facility
located in Carlstadt, New Jersey. The complaint, which is
pending before the United States District Court for the District
of New Jersey, alleges that the Company shipped 120,000 gallons
of waste oil to this site and that the Company is one of several
hundred parties who are responsible under Superfund for the study
and cleanup of the facility. The plaintiffs in the action, which
include a group of former customers of the facility, have
completed a $3 million remedial investigation and feasibility
study for the site. They estimate that 7 to 15 million gallons
of waste solvents and oil were recycled at the site. Based on
this estimate, the Company's share of the cleanup costs is
expected to be about one percent. The costs of the cleanup
alternatives that were evaluated in the remedial investigation
and feasibility study range from $48 million to $321 million. In
1990, the EPA selected an interim remedy, expected to cost about
$3 million, to control release from the site while the EPA
evaluates and develops a final cleanup remedy. The interim
remedy calls for, among other things, the construction of a
slurry wall around the site and an infiltration barrier over the
site.
<PAGE>
<PAGE> - 34 -
HELEN KRAMER LANDFILL SITE. In September 1991, Orange and
Rockland Utilities, Inc. (O&R) was served with third-party
complaints in consolidated Superfund cost recovery contribution
actions for the Helen Kramer Landfill Site in Mantau, New Jersey.
The complaints, which are pending before the United States
District Court for the District of New Jersey, allege that, in
1974, Marvin Jonas, Inc. transported hazardous substances for O&R
and disposed of those substances in the Helen Kramer Landfill.
Preliminary investigation by O&R indicates that waste materials
generated during the construction of the Bowline Point generating
station were hauled and disposed of by Marvin Jonas, Inc. in
1974. The Company owns a two-thirds interest in Bowline Point.
O&R, which operates Bowline Point, owns the remaining one-third
interest. Bowline Point liabilities are shared by the Company
and O&R in accordance with their respective ownership interests.
The EPA has commenced cleanup of this site and the total site
cleanup cost is estimated at $150 million. Assuming that all of
the Bowline wastes alleged to have been disposed of at the site
were so disposed of, they represent about 0.4% of the total
volume of waste-in at the site. On this basis, the Company's
share of the cleanup cost is estimated at $400,000.
GLOBAL LANDFILL SITE. The Company has been designated a PRP
under Superfund and the New Jersey Spill Compensation and Control
Act (Spill Act) for the study and cleanup of the Global Landfill
Site in Old Bridge, New Jersey. This 65-acre municipal and
industrial waste landfill is included on the Superfund National
Priorities List and is being administered by the New Jersey
Department of Environmental Protection and Energy (NJDEPE)
pursuant to an agreement between the EPA and the State of New
Jersey.
The Company provided EPA with records indicating that it had
disposed of approximately ten cubic yards of waste asbestos at
the site in February 1984. In August 1989, the NJDEPE served the
Company with a Spill Act directive that required the Company and
40 other PRPs to fund a $1.5 million remedial investigation and
feasibility study for the site. A PRP Group was formed and the
Group entered into a settlement agreement and an administrative
consent order with NJDEPE that, among other things, required the
PRP Group's members to contribute $500,000 towards the cost of
the study. The Company's share of the PRP Group's payment to the
NJDEPE was $5,000.
<PAGE>
<PAGE> - 35 -
In February 1991, the EPA and the NJDEPE proposed a $30
million interim remedy for the site. This remedy calls for the
installation of gas and leachate collection and treatment systems
at the landfill and the construction of an impervious cover over
the landfill (Phase I). It also calls for further studies to
determine the alternatives for addressing groundwater and
wetlands contamination in the vicinity of the landfill (Phase
II). In March 1991, the NJDEPE served the Company with a second
Spill Act Directive that requires the Company and the other
members of the PRP Group to pay for the implementation of the
Phase I remedy for the site. The PRP Group negotiated a
settlement of this directive with the NJDEPE and the Company's
share of the cost is estimated at $150,000.
CHEMSOL SITE. By letter dated December 20, 1991, the EPA
advised the Company that it had documented the release of
hazardous substances at the Chemsol Site in Piscataway, New
Jersey and that it had reason to believe that the Company sent
waste materials to the site during the 1960 to 1965 period. In
response to EPA's demand for records, including any relating to
Cenco Instruments Corp., the Company submitted to EPA records of
payments to Central Scientific Company, a Division of Cenco
Instruments Corp. during the 1960-1965 period. The Company is
unable at this time to determine either the purpose of the
payments to Central Scientific Company or the connection of that
company to the site. The EPA has not designated the Company as a
PRP and has not yet selected a final cleanup program for the
site. However, the EPA has selected an interim remedy, expected
to cost about $8 million, for the site groundwater contamination
and has ordered several designated PRPs to implement that remedy.
ECHO AVENUE SITE. In December 1987, the DEC classified the
Company's former Echo Avenue Substation Site in New Rochelle, New
York as an "Inactive Hazardous Waste Disposal Site." The basis
for this classification was the presence of PCBs in the soil and
in the buildings on the site. Although the Company has cleaned
up the PCBs on the site, the DEC requires a thorough site survey
before it will remove the site from the Inactive Hazardous Waste
Disposal Site list. Under a consent order with the DEC a new
site survey was done and remedial action taken. The cost to the
Company of this additional work was $213,000. The DEC has asked
for additional studies. The Company does not know whether any
additional cleanup at the site will be required.
In January 1992, the owners of Echo Bay Marina filed suit in
Federal court alleging that PCBs were being discharged from the
Echo Avenue site into Long Island Sound. Plaintiffs are seeking
a declaration that the Company is in violation of the Clean Water
Act, civil penalties of $25,000 per day for each violation,
remediation costs, an injunction against further discharges,
legal fees, and compensatory damages of $24 million. Pretrial
discovery is continuing.<PAGE>
<PAGE> - 36 -
C&D RECYCLING SITE. On July 13, 1992, the Company received
a letter from EPA stating that it is a PRP with respect to the
C&D Recycling site located in Foster Township, Luzerne County,
Pennsylvania. In 1979, the Company retained C&D Recycling
Company to recover copper and lead from a shipment of 30,560
pounds of scrap electric cable. It appears that the bulk of the
scrap cable sent to this site was generated by AT&T Nassau
Metals, a subsidiary of AT&T. Information available to the
Company indicates that the AT&T subsidiary shipped in excess of
five million pounds of scrap cable to this site. The Company has
not been asked to contribute to the cost of the remedial
investigation and feasibility study or cleanup costs. Thus, the
Company is unable to estimate its exposure to liability with
respect to this site. The total cleanup cost is estimated at
$12.5 million.
PELHAM MANOR SITE. Prior to 1968, the Company and its
predecessor companies operated a manufactured gas plant (MGP) on
a site located in Pelham Manor, Westchester County. Soil and
groundwater tests by the current owners and lessees indicate the
presence of hazardous substances which are associated with the
MGP process. The Company has agreed to participate with the site
owners and lessees in further site studies to develop and
implement a cleanup plan that will be acceptable to the DEC.
ASTORIA SITE. The Federal Resource Conservation and
Recovery Act delegates to the states licensing authority for PCB
storage. As a condition to renewal by the DEC of the Company's
permit to store PCBs at the Company's Astoria generating station,
the Company is required to conduct a site investigation and,
where necessary, a remediation program. The site investigation
is expected to commence in April 1994 and to cost approximately
$800,000. The extent and cost of the remediation program will
depend on the results of the investigation.
<PAGE>
<PAGE> - 37 -
GRAMERCY PARK
On August 19, 1989, a Company steam main exploded in the
Gramercy Park area of Manhattan, releasing debris containing
asbestos into that area. The Company took responsibility for the
asbestos cleanup and most of the cost of that cleanup was covered
by the Company's insurance.
A Federal Grand Jury in the Southern District of New York
issued an indictment on December 16, 1993, charging the Company
and two of its retired employees with criminal acts relating to
the reporting of the release of asbestos resulting from the steam
main explosion. The indictment contains four counts against the
Company. The first count alleges a conspiracy to conceal facts
relating to the release. The second count alleges a failure to
report immediately the known release of asbestos. The third and
fourth counts allege false statements to governmental agencies
concerning the asbestos release. The Company will vigorously
contest these charges, which it believes are without merit.
Regardless of the ultimate disposition of the charges, the
Company believes that they will not have a material adverse
effect on the Company's financial condition or business
operations.
DEC PROCEEDINGS
On June 9, 1992, the Company received notice of two civil
administrative proceedings instituted by the DEC staff against
the Company. One complaint alleged violations of the Company's
permits issued under the State Pollutant Discharge Elimination
System (SPDES) relating to the cooling water intake structures at
certain of the Company's generating stations. This complaint was
settled with the DEC under a consent order signed on December 28,
1992, requiring the Company to pay a civil penalty of $100,000.
The other complaint alleged numerous "causes for enforcement
action" relating to alleged SPDES violations, discharges of oil
and other pollutants at various Company facilities and operation
of certain facilities allegedly without required authorization.
The acts complained of occurred over a period of years, and had
for the most part been reported to the DEC by the Company
contemporaneously with their occurrence.
In the pending proceeding, the DEC staff requests the DEC to
assess a civil penalty of $20 million and to require the Company,
among other things, to undertake remedial, restorative and
preventative measures, to perform environmental audits at all of
its facilities, and to implement a hazardous waste generation and
release minimization plan and a "best management practices" plan.
Settlement negotiations for this proceeding are ongoing. For
additional information about this proceeding, see "DEC
Proceeding" in Note F to the financial statements in Item 8.
<PAGE>
<PAGE> - 38 -
ASBESTOS LITIGATION
For a discussion of asbestos and suits against the Company
involving asbestos, see "Environmental Matters and Related Legal
Proceedings - Asbestos" in Item 1, and "Asbestos Claims" in Note
F to the financial statements in Item 8. The following is a
discussion of the significant suits involving asbestos in which
the Company has been named a defendant. The listing is not
exhaustive and additional suits may arise in the future.
MASS TORT CASES. Numerous suits have been brought in New
York State and Federal courts against the Company and many other
defendants for death and injuries allegedly caused by exposure to
asbestos at various Company premises. Many of these suits have
been disposed of without any payment by the Company, or for
immaterial amounts. The amounts specified in the remaining
suits, including the Moran v. Vacarro suit and the pending United
States of America v. Con Edison suit discussed below, total
billions of dollars, but the Company believes that these amounts
are greatly exaggerated, as were the claims already disposed of.
UNITED STATES OF AMERICA, LOCAL 1-2 UTILITY WORKERS' UNION
OF AMERICA, AND THOMAS MORAN V. CON EDISON. This suit was
commenced on January 7, 1988 by the United States in the United
States District Court for the Eastern District of New York. The
complaint alleged that on various occasions and at various
Company facilities the Company violated the Federal Clean Air Act
and regulations issued pursuant to the Act in connection with
asbestos removal activities. On May 31, 1988, Local 1-2 of the
Utility Workers Union of America (a union representing Company
employees) intervened in the action, and, on November 15, 1988,
Thomas Moran, an employee, intervened. With the court's
approval, the Company and the Federal government have settled
this action with the Company paying $219,500.
MORAN, ET AL. V. VACARRO, ET AL. On May 9, 1988, the
Company was served with a complaint in an action in the New York
State Supreme Court, New York County, in which approximately 184
Company employees and their union allege that the employees were
exposed to dangerous levels of asbestos as a result of alleged
intentional conduct of supervisory employees. Each of the
employee plaintiffs seeks $1 million in punitive damages,
unspecified additional compensatory damages, and to enjoin the
Company from violating EPA regulations and exposing employees to
asbestos without first taking certain safety measures. On May
16, 1988, the complaint was amended to add a claim by each
employee plaintiff for $1 million in damages for mental distress.
In November 1988, the complaint was amended to add four
additional employee plaintiffs. On July 9, 1990, the complaint
was amended to add the spouses of 131 plaintiffs as additional
plaintiffs. Each spouse seeks $1 million for emotional distress
and $1 million for punitive damages.<PAGE>
<PAGE> - 39 -
UNITED STATES OF AMERICA V. CON EDISON. This suit was
commenced on March 7, 1994 by the United States in the United
States District Court for the Southern District of New York. The
complaint alleges that the Company violated hazardous emissions
provisions of the Federal Clean Air Act in connection with
asbestos removal activities at the Company's Waterside generating
station during 1989. The complaint seeks civil penalties of
$25,000 per day per violation and injunctive relief. The Company
is in the process of reviewing the complaint and preparing its
answer which is to be filed with the court in early May 1994.
RATE PROCEEDINGS
For information concerning proceedings relating to the
Company's rates, see "Regulation and Rates" in Item 1.
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
None.
<PAGE>
<PAGE> - 40-
EXECUTIVE OFFICERS OF THE REGISTRANT
The names of the executive officers of the Company together
with their ages and the positions and offices with the Company
held by them as of March 1, 1994, the respective dates they
became executive officers and their business experience during
the past five years (or since they became executive officers, if
earlier) are set forth below. Under the Company's By-laws,
officers of the Company are elected to hold office until the next
election of Trustees (directors) of the Company and until their
respective successors are chosen and qualify, subject to removal
at any time by the Company's Board of Trustees.
Business Experience
Name, Age, Positions and During the Past Five Years
Offices with the Company or Since Becoming an
and Date First Became an Executive Officer,
Executive Officer If Longer
Eugene R. McGrath - 52 9/90 to present - Chairman of
Chairman of the Board, the Board, President, Chief
President, Chief Executive Executive Officer and Trustee
Officer and Trustee; 2/89 to 8/90 - President, Chief
9/1/78 Operating Officer and Trustee
10/87 to 1/89 - Executive Vice
President - Operations and
Trustee
9/82 to 9/87 - Executive Vice
President - Central Operations
3/81 to 8/82 - Senior Vice
President - Power Generation
9/78 to 2/81 - Vice President
- Power Generation
Raymond J. McCann - 59 2/89 to present - Executive Vice
Executive Vice President President and Chief Financial
and Chief Financial Officer, and Trustee
Officer, and Trustee; 10/87 to 1/89 - Executive Vice
5/15/72 President, Finance and Law, and
Trustee
8/80 to 9/87 - Executive Vice
President - Division Operations
6/77 to 8/80 - Vice President
- Manhattan Division
6/76 to 5/77 - Vice President
- Accounting and Treasury
3/74 to 5/76 - Controller
5/72 to 3/74 - General Auditor
<PAGE>
<PAGE> - 41 -
Business Experience
Name, Age, Positions and During the Past Five Years
Offices with the Company or Since Becoming an,
and Date First Became an Executive Officer,
Executive Officer If Longer
J. Michael Evans - 48 9/91 to present - Executive Vice
Executive Vice President President - Central Operations
- Central Operations; 7/89 to 8/91 - Senior Vice
9/1/91 President and Chief Operating
Officer - Kansas City Power and
Light (KCP&L)
5/87 to 7/89 - Senior Vice
President - System Operations -
KCP&L
Charles F. Soutar - 57 2/89 to present - Executive Vice
Executive Vice President President - Customer Service
- Customer Service; 3/85 to 1/89 - Executive Vice
9/1/77 President - Central Services
5/80 to 2/85 - Senior Vice
President - Construction,
Engineering and Environmental
Affairs
9/77 to 4/80 - Vice President
- Central Services
Thomas J. Galvin - 55 2/93 to present - Senior Vice
Senior Vice President President - Central Services
- Central Services; 6/89 to 1/93 - Senior Vice
6/1/78 President - Administration
8/86 to 5/89 - Vice President
- Employee Relations
3/83 to 7/86 - Vice President
- Purchasing
6/78 to 2/83 - General Auditor
Carl W. Greene - 58 7/92 to present - Senior Vice
Senior Vice President President - Accounting and
- Accounting and Treasury; Treasury
6/1/76 6/82 to 6/92 - Vice President and
Controller
6/76 to 5/82 - Controller
Edward W. Livingston - 59 9/92 to present - Senior Vice
Senior Vice President President - Executive
- Executive Assistant to Assistant to the Chairman
the Chairman; 6/89 to 8/92 - Senior Vice
3/1/79 President - Public Affairs
3/79 to 5/89 - Vice President
- Government & Community Relations
<PAGE>
<PAGE> - 42 -
Business Experience
Name, Age, Positions and During the Past Five Years
Offices with the Company or Since Becoming an
and Date First Became an Executive Officer,
Executive Officer If Longer
Mary Jane McCartney - 45 10/93 to present - Senior Vice
Senior Vice President President - Gas Operations
- Gas Operations; 2/93 to 10/93 - Vice President
12/1/90 - Gas Supply
7/92 to 1/93 - Vice President
- Gas Business Development
12/90 to 6/92 - Vice President
- Queens
2/89 to 11/90 - Assistant Vice
President - Environmental
Affairs and Fuel Supply
11/80 to 1/89 - Director
- Fossil Fuel Supply
Horace S. Webb - 53 9/92 to present - Senior Vice
Senior Vice President President - Public Affairs
- Public Affairs; 1/90 to 8/92 - Vice President
9/1/92 - Communications and Public
Affairs, Hoechst Celanese
Corp.
9/84 to 1/90 - Vice President
- Hill & Knowlton, Inc.
T. Bowring Woodbury, II - 56 6/89 to present - Senior Vice
Senior Vice President President and General Counsel
and General Counsel; 7/87 to 5/89 - Senior Vice
6/1/89 President, General Counsel
and Secretary, Commercial
Union Insurance Company
Archie M. Bankston - 56 6/89 to present - Secretary and
Secretary and Associate Associate General Counsel
General Counsel; 1/74 to 5/89 - Secretary and
1/7/74 Assistant General Counsel
John F. Cioffi - 60 7/92 to present - Treasurer
Treasurer; 6/87 to 6/92 - Assistant Vice
7/1/92 President
Lawrence F. Travaglia - 55 3/93 to present - General Auditor
General Auditor; 10/80 to 2/93 - Assistant
3/1/93 Treasurer
<PAGE>
<PAGE> - 43 -
Business Experience
Name, Age, Positions and During the Past Five Years
Offices with the Company or Since Becoming an
and Date First Became an Executive Officer,
Executive Officer If Longer
Robert A. Bell - 60 6/81 to present - Vice President
Vice President - Research & Development
Research & Development;
6/1/81
Arthur J. Bennett - 58 3/93 to present - Vice President
Vice President - Brooklyn Customer Service
- Brooklyn Customer; 6/91 to 2/93 - Vice President
Service; 3/1/83 - Transportation & Stores
3/83 to 6/91 - Vice President
- Bronx Division
David G. Bosland - 57 6/91 to present - Vice President
Vice President - Staten Island Customer Service
- Staten Island 3/83 to 6/91 Vice President
Customer Service; - Transportation & Stores
3/1/83
Stephen B. Bram - 51 12/87 to present - Vice President
Vice President - Nuclear Power
- Nuclear Power; 9/82 to 11/87 - Vice President
8/1/79 - Fossil Power
7/80 to 8/82 - Vice President
- Central Substation, Systems
Operations and Technical Services
8/79 to 6/80 - Vice President
- Central Substation and
System Operations
Kevin M. Burke - 43 3/93 to present - Vice President
Vice President - Corporate Planning
- Corporate Planning; 3/90 to 2/93 - Vice President
12/1/87 - Brooklyn Customer Service
12/87 to 2/90 - Vice President
- Construction
Richard P. Cowie - 47 3/94 to present - Vice President
Vice President - Employee Relations
- Employee Relations; 2/91 to 2/94 - Director - Central
3/1/94 Customer Service
9/90 to 1/91 - Assistant to the
Executive Vice President -
Customer Service
9/86 to 8/90 - Director - Credit
& Collections
<PAGE>
<PAGE> - 44 -
Business Experience
Name, Age, Positions and During the Past Five Years
Offices with the Company or Since Becoming an
and Date First Became an Executive Officer,
Executive Officer If Longer
Robert F. Crane - 57 3/94 to present - Vice President
Vice President - Fuel Supply
- Fuel Supply; 10/93 to 2/94 - Vice President
12/1/82 - Gas Supply
2/93 to 10/93 - Vice President
- Gas Business Development
4/91 to 1/93 - Vice President
- Gas Supply
12/84 to 3/91 - Vice President
- Manhattan Division
12/82 to 11/84 - Vice President
- Queens Division
George J. Delaney - 58 12/78 to present - Vice President
Vice President - Westchester Customer Service
- Westchester 9/74 to 11/78 - Vice President
Customer Service; - Bronx Division
5/28/74 5/74 to 8/74 - Vice President
- Staten Island Division
Robert W. Donohue, Jr. - 51 2/94 to present - Vice President
Vice President - Queens Customer Service
- Queens Customer Service; 3/90 to 1/94 - Vice President
3/1/90 - Construction
12/84 to 2/90 - Assistant Vice
President - Electrical
Distribution
Charles J. Durkin, Jr. - 50 12/93 to present - Vice President
Vice President - Fossil Power
- Fossil Power; 1/88 to 12/93 - Vice President
9/1/82 - Engineering
9/82 to 12/87 - Vice President
- System and Transmission
Operations
Jacob Feinstein - 50 4/91 to present - Vice President
Vice President - System & Transmission
- System & Transmission Operations
Operations; 4/1/91 12/88 to 3/91 - Plant Manager
<PAGE>
<PAGE> - 45 -
Business Experience
Name, Age, Positions and During the Past Five Years
Offices with the Company or Since Becoming an
and Date First Became an Executive Officer,
Executive Officer If Longer
Joan S. Freilich - 52 7/92 to present - Vice President
Vice President and and Controller
Controller; 12/1/90 12/90 to 6/92 - Vice President -
Corporate Planning
12/89 to 11/90 - Assistant Vice
President - Corporate Planning
2/89 to 11/89 - Executive
Assistant to President
David F. Gedris - 45 2/94 to present - Vice President
Vice President - Maintenance and Construction
- Maintenance and 7/92 to 1/94 - Assistant Vice
Construction; President - Power Generation
2/1/94 Maintenance
3/90 to 6/92 - Assistant Vice
President - Steam Operations
11/89 to 2/90 - Project Manager
- Steam Operations
7/85 to 10/89 - Plant Manager
Garrett W. Groscup - 53 2/94 to present - Vice President
Vice President - Energy Services
- Energy Services; 4/91 to 1/94 - Vice President
12/1/82 - Manhattan Customer Service
1/88 to 3/91 - Vice President
- System & Transmission
Operations
12/82 to 12/87 - Vice President
- Engineering
William A. Harkins - 48 2/89 to present - Vice President
Vice President - Planning and Inter-Utility
- Planning and Inter- Affairs
Utility Affairs; 9/86 to 1/89 - Assistant Vice
2/1/89 President - Environmental
Affairs and Fuel Supply
Paul H. Kinkel - 49 12/93 to present - Vice President
Vice President - Engineering
- Engineering; 12/87 to 12/93 - Vice President
5/24/83 - Fossil Power
5/83 to 11/87 - Vice President
- Construction
<PAGE>
<PAGE> - 46 -
Business Experience
Name, Age, Positions and During the Past Five Years
Offices with the Company or Since Becoming an
and Date First Became an Executive Officer,
Executive Officer If Longer
Laurence V. Kleinman - 51 9/86 to present - Vice President
Vice President - Corporate Communications and
- Corporate Communications Public Information
and Public Information;
9/1/86
Thomas A. McGovern - 60 6/89 to present - Vice President
Vice President - Services
- Services; 6/1/89 9/82 to 5/89 - Assistant Vice
President - Services
John A. Nutant - 58 2/94 to present - Vice President
Vice President - Manhattan Customer Service
- Manhattan 7/92 to 1/94 - Vice President
Customer Service; - Queens Customer Service
5/27/80 9/86 - 6/92 - Vice President
- Purchasing
7/80 to 8/86 - Vice President -
Environmental Affairs
5/80 to 6/80 - Vice President
James P. O'Brien - 46 3/94 to present - Vice President
Vice President - Systems and Information
- Systems and Information Processing
Processing; 3/1/94 6/89 to 2/94 - Assistant Vice
President - Employee Relations
5/87 to 5/89 - Director -
Personnel Operations
Edwin W. Scott - 55 6/89 to present - Vice President
Vice President and Deputy and Deputy General Counsel
General Counsel; 10/85 to 5/89 - Assistant Vice
6/1/89 President and Associate
General Counsel
Minto L. Soares - 57 6/91 to present - Vice President
Vice President - Bronx Customer Service
- Bronx Customer Service; 11/88 to 5/91 - Plant Manager
6/1/91
Alfred R. Wassler - 49 3/94 to present - Vice President
Vice President - Purchasing, Transportation
- Purchasing, Trans- and Stores
portation and Stores; 7/92 to 2/94 - Vice President
8/15/80 - Purchasing
8/80 to 6/92 - Treasurer
<PAGE>
<PAGE> - 47 -
PART II
ITEM 5. MARKET FOR THE REGISTRANT'S COMMON EQUITY AND RELATED
STOCKHOLDER MATTERS
The Company's Common Stock ($2.50 par value) is the only class of
common equity of the Company. The Common Stock is traded on the
New York, Midwest and Pacific Stock Exchanges.
MARKET PRICE RANGE IN CONSOLIDATED REPORTING SYSTEM AND DIVIDENDS
PAID ON COMMON STOCK
<TABLE>
<CAPTION> 1993 1992
------------------------------ ----------------------------
Dividends Dividends
High Low Paid High Low Paid
- ----------------------------------------------------------------------------------------------
</CAPTION>
<S> <C> <C> <C> <C> <C> <C>
1st Quarter $35-7/8 $31-1/2 $.48-1/2 $28-5/8 $25 $.47-1/2
2nd Quarter 37-3/8 32-1/2 .48-1/2 28-3/4 26-1/4 .47-1/2
3rd Quarter 37-3/4 35-1/8 .48-1/2 31-5/8 27-3/4 .47-1/2
4th Quarter 36-3/8 30-1/4 .48-1/2 32-7/8 30-1/4 .47-1/2
As of January 31, 1994 there were 166,011 holders of record of common stock.
===============================================================================================
</TABLE>
On January 25, 1994, the Board of Trustees of the Company declared
a quarterly dividend of 50 cents per share of Common Stock payable
on March 15, 1994 to holders of record on February 16, 1994.
ITEM 6. SELECTED FINANCIAL DATA
<TABLE>
<CAPTION>
===============================================================================================
Year Ended December 31 (Millions of Dollars) 1993 1992 1991 1990 1989
- -----------------------------------------------------------------------------------------------
</CAPTION>
<S> <C> <C> <C> <C> <C>
Operating revenues $ 6,265.4 $ 5,932.9 $ 5,873.1 $ 5,738.9 $ 5,550.6
Fuel and purchased power and
gas purchased for resale 1,707.5 1,562.2 1,663.9 1,689.2 1,632.5
Operating income 951.1 880.4 813.1 800.8 783.7
Net income for common stock 622.9 567.7 530.1 534.4 568.7
Total assets 13,483.5* 11,596.1 11,107.9 10,685.6 10,349.5
Long-term obligations
Long-term debt 3,643.9 3,493.6 3,364.8 3,312.7 3,072.2
Capitalized leases 50.4 52.9 55.5 58.0 77.7
Preferred stock subject to
mandatory redemption 100.0 100.0 41.3 43.5 45.8
Common shareholders' equity 5,068.5 4,886.9 4,608.3 4,502.1 4,382.4
- -----------------------------------------------------------------------------------------------
Per common share:
Net income $2.66 $2.46 $2.32 $2.34 $2.49
Cash dividends $1.94 $1.90 $1.86 $1.82 $1.72
- -----------------------------------------------------------------------------------------------
Average common shares
outstanding (millions) 234.0 231.1 228.3 228.2 228.1
===============================================================================================
*Includes $1,376.8 million of Regulatory Assets attributable to the
adoption of SFAS 109 in 1993. A Deferred Tax Liability of equal
amount was established in 1993. See Note A to the financial statements.
</TABLE>
<PAGE>
<PAGE> - 48 -
ITEM 7. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
CONDITION AND RESULTS OF OPERATIONS
LIQUIDITY AND CAPITAL RESOURCES
SOURCES OF LIQUIDITY. Cash and temporary cash investments
were $36.8 million at December 31, 1993 compared with $282.5 million
at December 31, 1992 and $317.9 million at December 31, 1991. The
balance at December 31, 1991 included $196.3 million held by Gramercy
Assets Corporation (Gramercy Assets), the Company's wholly-owned
investment subsidiary, which was liquidated in 1992. The
Company's cash balances reflect the timing and amounts of
external financings.
In April 1993 the Company issued $101 million of 35-year
tax-exempt debt through the New York State Energy Research and
Development Authority (NYSERDA) for a portion of the Company's
1993 capital requirements. The balance of 1993 capital
requirements was met from internally generated funds and a
portion of the proceeds of the 1993 debenture issues discussed
below, and through the issuance of 373,227 shares of common stock
in December 1993 for $11.9 million pursuant to the Company's
dividend reinvestment plan. The Company amended the plan in 1993
to permit, at the option of the Company, the sale of new shares
or the purchase in the market of outstanding shares.
In 1992 the Company issued $200 million of 35-year tax-
exempt debt and $100 million of 35-year taxable debentures. In
1992 the Company also issued 5,550,000 shares of common stock for
$156.8 million. In 1991 the Company issued $128 million of 35-
year tax-exempt debt and $175 million of 35-year taxable
debentures.
Declining interest rates during 1992 and 1993 provided the
Company an opportunity to reduce costs by redeeming outstanding
securities in advance of maturity dates and replacing them with
new securities bearing lower interest or dividend rates. The
Company retired all or part of 16 series of securities totaling
more than $1.7 billion, replacing them with 16 new series of debt
and preferred stock. These refundings produced aggregate first-
year savings in interest and preferred dividends of about $22
million, with continued savings in subsequent years.
At various times during 1993 the Company issued $750 million
of intermediate-term debentures to refund in advance of maturity
$670 million of mortgage bonds and for 1993 capital requirements.
Intermediate-term debentures were issued so as to match the
maturities of the refunded issues.
In June 1993 the Company made a tender offer to purchase any
or all of its $200 million 9.70 percent Series 1990 A debentures
and its $175 million 9-3/8 percent Series 1991 A debentures.
Debenture holders tendered, and the Company purchased and
cancelled, $172.6 million of the 9.70 percent debentures and
$79.7 million of the 9-3/8 percent debentures for $295.6 million,
including premiums, but excluding accrued interest. In June 1993
the Company issued $380 million of 30-year 7-1/2 percent
debentures to fund these purchases and for 1993 capital requirements.
<PAGE>
<PAGE> - 49 -
In September 1993 the Company made a tender offer to
purchase any or all of the $256 million 9 percent Series 1985 A
and the $49.145 million 9-1/4 percent Series 1987 B tax-exempt
bonds issued through NYSERDA. Bondholders tendered, and the
Company purchased and cancelled, $127,715,000 of the Series 1985
A bonds and $19,760,000 of the Series 1987 B bonds for $172.5
million, including premiums, but excluding accrued interest. In
October 1993 the Company issued through NYSERDA $127,715,000 of
5-1/4 percent tax-exempt refunding bonds to refund a like amount
of tendered 1985 A bonds, and $19,760,000 of 5-3/8 percent tax-
exempt refunding bonds to refund a like amount of tendered 1987 B
bonds. The Company paid the difference between the net proceeds
of these issues and the price of the purchased bonds from
internally generated funds.
In November 1993 the Company retired the remaining $20
million of the 8-1/8 percent Series LL mortgage bonds through a
combination of mandatory and optional sinking fund and redemption
calls.
In 1992 the Company refunded in advance of maturity $575
million of mortgage bonds with a like amount of intermediate-term
debentures.
In 1992 the Company issued 500,000 shares each of $100 par
value sinking fund Cumulative Preferred Stock, 7.20 percent
Series I and 6-1/8 percent Series J, primarily to refund the
outstanding shares of 8.30 percent Series G and 8-1/8 percent
Series H Cumulative Preferred Stock.
The Company's cash requirements are subject to substantial
fluctuations during the year due to seasonal variations in cash
flow, and peak in January and July of each year when the semi-
annual payments of New York City property taxes are due. At such
times, in 1993, 1992 and 1991 the Company borrowed from banks for
short periods. For 1994 the Company has arranged for bank credit
lines amounting to $150 million. Borrowings thereunder would bear
interest at prevailing market rates. The Company has obtained
authorization from the Federal Energy Regulatory Commission to
make short-term borrowings of up to $300 million from time to
time through 1995.
Customer accounts receivable, less allowance for
uncollectible accounts, amounted to $459.3 million, $424.3
million and $390.0 million at December 31, 1993, 1992 and 1991,
respectively. In terms of equivalent days of revenue outstanding,
these amounts represented 27.6, 26.7 and 26.6 days, respectively.
Regulatory accounts receivable, amounting to $97.1 million
at December 31, 1993 and $167.9 million at December 31, 1992,
include accruals under the three-year electric rate agreement
effective April 1, 1992 for differences in electric sales
revenues from the levels forecast pursuant to the rate agreement
(the "ERAM" accrual), for incentives and "lost revenues" related
to the Company's Enlightened Energy program, for incentives
related to customer service activities and for savings achieved
in fuel and purchased power costs below target levels. Regulatory
accounts receivable are further described in Note A to the
financial statements in this report.
<PAGE>
<PAGE> - 50 -
The following is a summary of the balances and activity in
regulatory accounts receivable in 1993:
Balance Balance
Dec. 31, 1993 1993 Dec. 31,
(Millions of Dollars) 1992 Accruals Billings 1993
ERAM $ 130.1 $ 10.9 $ (104.8) $ 36.2
Incentives
Enlightened Energy program 24.9 36.2 (18.7) 42.4
Customer service 4.5 6.5 (4.6) 6.4
Fuel and purchased power 7.1 26.9 (24.2) 9.8
Lost revenues relating
to Enlightened Energy
program 1.3 1.9 (.9) 2.3
Total $ 167.9 $ 82.4 $ (153.2) $ 97.1
The balance in regulatory accounts receivable at December
31, 1993 will be billed to customers during 1994 and 1995. The
incentives are discussed below under "1992 Electric Rate
Settlement Agreement."
Deferred charges for Enlightened Energy program costs
amounted to $140.1 million at December 31, 1993 and $80.8 million
at December 31, 1992. Under the 1990 and 1992 electric rate
agreements discussed below, the Company was allowed to offset a
portion of such deferred charges (as well as incentives and "lost
revenues") with deferred property tax savings and various other
deferred credits due customers as of March 31, 1992. The balance
at December 31, 1993 reflects the ongoing Enlightened Energy
program costs and the effects of the rate recovery provisions
discussed below under "1992 Electric Rate Settlement Agreement."
In 1993 unamortized debt expense increased $89.9 million,
principally reflecting premiums and expenses related to
refundings in advance of maturity discussed above. These premiums
and expenses will be amortized and recovered in rates, generally
over the lives of the refunded issues.
The Company's earnings include an allowance for funds used
during construction which, as a percent of net income for common
stock, was 1.7 percent in 1993, 2.4 percent in 1992 and 2.7
percent in 1991.
Interest coverage on the SEC book basis was 4.19, 3.93 and
3.73 times for 1993, 1992 and 1991, respectively. The improvement
in interest coverage in 1993 and 1992 was due to the debt
refundings and increased earnings. The Company's interest
coverage continues to be high compared with the electric utility
industry generally.
The Company's senior debt (first mortgage bonds) is rated
Aa2 by Moody's Investors Service (Moody's), AA- by Standard &
Poor's (S&P) and AA- by Duff and Phelps. Moody's and S&P revised
their ratings in February 1994 from Aa1 and AA, respectively. A
major factor was the Company's obligations under contracts with
independent power producers (IPPs) (see "Electric Generating Capacity"
below).
<PAGE>
<PAGE> - 51 -
Cash flows from operating activities, before and after
dividends, for years 1991 through 1993 were as follows:
(Millions of Dollars) 1993 1992 1991
Net cash flows from operating activities $1,025 $962 $945
Less: Dividends on common and preferred stock 490 475 461
Net after dividends $ 535 $487 $484
Net cash flows in 1993 were favorably affected by ERAM billings
of $104.8 million. ERAM billings in 1994 are expected to be
substantially lower.
CAPITAL REQUIREMENTS. The following table compares the Company's
capital requirements for 1991 through 1993 and estimated amounts for
1994 and 1995:
(Millions of Dollars) 1995 1994 1993 1992 1991
Construction expenditures $ 743 $ 770 $ 789 $ 795 $775
Enlightened Energy program
costs less recoveries* 6 64 59 21 44
Power contract termination
costs - net** (13) (36) 68 - -
Nuclear decommissioning
trust*** 12 12 19 7 7
Nuclear fuel 13 53 14 35 9
Sub-Total 761 863 949 858 835
Retirement of long-
term debt and
preferred stock**** 11 134 178 257 124
Total $ 772 $ 997 $1,127 $1,115 $959
* See discussion below of electric rate agreements.
** Assumes recovery of these costs as proposed by the Company.
See 1992 Electric Rate Settlement Agreement-Rate Increases,
below. (ALSO SEE REGULATION AND RATES - ELECTRIC, GAS AND STEAM
RATES" in ITEM 1.)
*** See Note A to the financial statements for discussion of
nuclear decommissioning costs.
****Does not include refundings in advance of maturity in 1992
and 1993 discussed above. For details of securities maturing
after 1995, see Note B to the financial statements.
The Company expects to finance its capital requirements for
1994 and 1995 from internally generated funds and external
financings of about $600 million, most of which would be debt
issues in 1994. This includes a $150 million debt financing which
was deferred from December 1993 to February 1994.
In 1994 and 1995 the Company also expects, from time to
time, to make short-term borrowings.
<PAGE>
<PAGE> - 52 -
ELECTRIC GENERATING CAPACITY. Over the past two years, electric
peak load growth in the Company's service area has declined to about
one-half of one percent per year, attributable to the effects of the
continuing recession in the Northeast and the success of the Company's
Enlightened Energy program. This program was first introduced in
1990 to help our customers purchase and install energy-efficient
equipment and to encourage the efficient use of energy resources.
The PSC has approved the Company's program for 1994. The program
for future years is being modified so as to obtain the same
benefits at lower program costs based on the experience to date.
In compliance with federal and state regulatory policies
that encouraged the development of IPPs and required utilities
to contract with IPPs meeting certain conditions, the Company
entered into contracts for the supply of approximately 2,700
megawatts (MW) of capacity from IPP facilities scheduled to come
into service in the 1990s. Included in this total are contracts for
645 MW of capacity from the Cogen Technologies plant in Linden, N.J.
which began commercial operation in May 1992, and 740 MW of capacity
from Sithe Energies' Independence Power Plant in Oswego, N.Y., which
is expected to be in service in late 1994.
Because of the decline in load growth rates and changing
conditions in the marketplace, the need for the IPP contracts has
been re-evaluated. More than enough generating capacity is
projected for the Northeast and the market price of power has
decreased significantly. The Company has entered into agreements
for the termination of several IPP contracts involving
approximately 440 MW for $121.7 million (exclusive of interest)
to be paid over a period of several years. The Company's electric
customers will save substantially more than this amount based on
current estimates of future market prices for power.
In 1993 the Company retired 384 MW of generating capacity in
order to lower costs. The Company has given notice of termination
to the New York Power Authority (NYPA) effective April 1, 1994 of
a contract for the purchase of approximately 200 MW of power from
NYPA's James A. Fitzpatrick nuclear facility, because the
contract was uneconomic relative to power available in the
electric marketplace. The Company is also examining the economics
of other contracts it has with NYPA for the purchase of firm
power.
Based on current projections, the Company does not expect to
add any capacity resources to its system during the next twenty
years.
COMPETITION. Recent regulatory changes affecting the gas
industry now permit large retail customers to contract for gas
directly with suppliers and interstate pipelines, paying the
local gas utility a delivery charge for transporting the customer's
gas from the pipeline delivery point to the customer's premises.
In the electricity industry, the Energy Policy Act of 1992 permits
unregulated non-utility generating companies to sell power and
energy at wholesale in competition with regulated utilities, and
to require utilities to provide access, for reasonable charges,
to the utilities' electric transmission systems for purposes of
making wholesale deliveries. However, neither the Act nor New
York State regulations require utilities to deliver their
competitors' power and energy directly to electricity consumers,
referred to as "retail wheeling." Depending on the future course
of developments in this area, the Company's market share and
profit margins could become subject to competitive pressures in
addition to traditional regulatory constraints.
<PAGE>
<PAGE> - 53 -
The Company's strategy for dealing with these emerging
competitive issues includes ongoing cost reduction, increasing
productivity, seeking growth opportunities and strengthening
customer relations by providing value-added services. Another
major element of the strategy is seeking from government and
regulators a "level playing field" on which the Company will
compete without unfair burdens of regulation or taxation.
1990 ELECTRIC RATE SETTLEMENT AGREEMENT. In 1990 the Company
entered into an agreement which continued the Company's base
electric rates at their existing level from April 1, 1990 through
March 31, 1992. The agreement directed the Company to refund to
customers $43.3 million, plus interest, relating to property tax
savings set aside in prior periods and to apply $37 million of
excess earnings in the final year of a previous agreement, which
had been set aside by an accounting provision, to offset a like
amount of demand side management program costs deferred from prior
periods.
In the first rate year of the agreement, the twelve months
ended March 31, 1991, $15 million of previously deferred costs
for the Enlightened Energy program were amortized as a charge
against income. During the second rate year, the twelve months
ended March 31, 1992, the Company billed a surcharge of
approximately one mill per kilowatt-hour to its electric
customers, to recover approximately $40 million of the costs of
the Enlightened Energy program.
The agreement provided for sharing between customers and
shareholders of any excess in earnings above an 11.75 percent
return on equity (which computation was to assume a common equity
ratio of 50 percent). For the two-year period ended March 31,
1992, the Company's average rate of return on electric common
equity was below the 11.75 percent threshold.
1992 ELECTRIC RATE SETTLEMENT AGREEMENT. On April 1, 1992
the PSC approved an electric rate agreement covering the three-year
period April 1, 1992 through March 31, 1995. The principal features
of the agreement and subsequent developments are as follows:
Rate Increases. Annual electric rates were increased by
$250.5 million (5.0 percent) in April 1992 for the first rate
year ending March 31, 1993 and were increased by $251.2 million
(5.0 percent) in April 1993 for the second rate year ending
March 31, 1994. The increase for the second rate year included
$138.4 million for recovery of accrued ERAM amounts. On February
10, 1994, the Company submitted to the PSC its estimate of a
$102.8 million (2.0 percent) increase in electric rates to become
effective April 1, l994, the third year of the 1992 electric
agreement.* The requested increase reflects primarily payments for
capacity to be purchased from IPPs, the recovery of costs
associated with the termination of IPP contracts, capital
expenditures for infrastructure improvements and the recovery of
Enlightened Energy program costs, offset in part by lower
property taxes and a substantial decline in ERAM billings (see
discussion of regulatory accounts receivable above, discussion of
ERAM below, and Note A to the financial statements).
Rate of Return and Equity Ratio. The agreement provides a
rate of return on common equity of 11.50 percent for the first
rate year and 11.60 percent for the second and third rate years,
based on a common equity ratio of 52 percent. In order to settle
disputed items, including alleged excess earnings in prior years,
the Company's revenue allowance was reduced in each of the three
years by $35 million.
______________
* In March 1994, the PSC approved a $55 million increase. See
"Regulation and Rates - Electric, Gas and Steam Rates" in Item 1.
<PAGE>
<PAGE> - 54 -
Earnings Sharing. Earnings above an 11.75 percent return on
common equity in the first year, and above 11.85 percent in the
second or third year will be shared with customers. One-half will
be retained by the Company for shareholders. The other half will
be applied first to make up any shortfall below the sharing
threshold in the other rate years and the balance deferred to be
applied for future benefit of customers. For purposes of this
calculation, earnings levels will exclude incentive awards and
labor productivity in excess of amounts reflected in rates. For
the first rate year, the twelve months ended March 31, 1993, the
Company's rate of return on electric common equity, excluding
incentives, was below the 11.75 percent threshold for sharing
with customers.
Incentive Provisions. The rate agreement includes provisions
which permit the Company to earn additional amounts (not subject
to the earnings sharing provision) by attaining certain
objectives for the Company's Enlightened Energy program,
customer service and fuel costs. There are also penalties for
failing to achieve minimum objectives. For calendar years 1993
and 1992, the Company earned $36.2 million and $28.8 million,
respectively, before federal income tax, for the Enlightened
Energy incentive. For calendar year 1994 the Company expects to
earn a substantial Enlightened Energy incentive. For customer
service performance, as measured against agreed-upon objective
criteria, the Company can earn an incentive or penalty of up to
10 basis points for each rate year. For calendar years 1993 and
1992, the Company earned $6.5 million and $4.5 million,
respectively, before federal income tax, for customer service
performance.
Partial Pass-Through Fuel Adjustment Clause. A partial pass-
through fuel adjustment clause (PPFAC) was implemented with
monthly targets for fuel and purchased power costs. The Company
retains for stockholders 30 percent of any savings in actual
costs below the target amount, but must bear 30 percent of any
excess of actual costs over the target. For each rate year of the
agreement there is a $30 million cap, before federal income tax,
on the maximum incentives or penalties under the PPFAC, with a
"sub-cap" (within the $30 million cap) of $10 million for
generation from the Company's Indian Point 2 nuclear unit. For
calendar years 1993 and 1992, the Company earned $26.9 million
and $24.8 million, respectively, before federal income tax. These
amounts are billed to customers on a monthly basis through the
fuel adjustment clause.
Enlightened Energy Program Costs and Incentive Recovery. The
costs for the Enlightened Energy program for each rate year of
the agreement will generally be recovered over a five-year
period. Unrecovered balances will earn an approved rate of
return. The incentive for Enlightened Energy will be recovered in
the rate year following the calendar year in which it is earned.
As part of the agreement, Enlightened Energy program costs,
incentives and associated lost revenues deferred as of March 31,
1992 of approximately $98 million were set off against an equal
amount of property tax reductions and other deferred credits that
had been previously deferred for the future benefit of customers.
Effective April 1, 1992, lost revenues associated with the
Enlightened Energy program are reflected in the ERAM.
<PAGE>
<PAGE> - 55 -
Electric Revenue Adjustment Mechanism. The settlement
included a significant new rate-making concept known as the ERAM.
The purpose of the ERAM is to eliminate the linkage between
customers' energy consumption and Company profits. Under the ERAM
the Company's rates are based on annual forecasts of electric
sales and sales revenues with return to or recovery from
customers of any overages or deficiencies from the forecast for
the prior rate year. Implementation of the ERAM removes from
Company earnings all variations in electric sales from forecasts,
including the effects of year-to-year weather variations and
the results of changes in economic conditions. In 1993 the
Company accrued $10.9 million under the ERAM compared with $130.1
million under the ERAM in 1992.
Other Changes. The agreement does not permit further
changes in the Company's base electric rates during the
settlement period. However, as in previous agreements, there are
limited exceptions for the protection of both the Company and
customers.
GAS AND STEAM RATE INCREASES. In October 1991 the PSC granted
the Company permission to increase its firm gas and steam base rates
by $21.4 million (3.1 percent) and $17.6 million (5.0 percent),
respectively. The increases were premised upon an allowed equity
return of 11.3 percent and a common equity ratio of 50 percent of
total capitalization.
In October 1992 the PSC approved two-year gas and steam rate
settlements which included annual increases for the first
rate year in firm gas and steam rates of $12.3 million (1.9
percent) and $11.8 million (3.6 percent), respectively. In
September 1993 the PSC granted the Company permission to increase
its firm gas rates for the second rate year by $21.6 million (2.8
percent). In lieu of a steam rate increase of $2.1 million for
the second rate year the PSC authorized the Company to retain
certain tax refunds being held by the Company for return to steam
customers. The gas and steam rate decisions are premised upon an
allowed equity return of 11.6 percent and a common equity ratio
of 52 percent of total capitalization. Earnings above an 11.95
percent return are to be shared equally with customers. For the
first rate year, the twelve months ended September 30, 1993, the
Company's rate of return on gas common equity was below the 11.95
percent threshold for sharing with customers. The Company's rate
of return on steam common equity for the first rate year was
above the sharing threshold, and as a result, the Company
recorded a provision for refund to steam customers of $1.7
million in 1993.
In November 1993 the Company filed for increases in gas and
steam rates amounting to $19.1 million (2.3 percent) and $14.6
million (4.4 percent), respectively. The rate increases, which if
approved would take effect October 1, 1994, are premised upon an
11.6 percent return on common equity and a common equity ratio of
52 percent.
URANIUM ENRICHMENT DECONTAMINATION AND DECOMMISSIONING FUND.
Under the Energy Policy Act of 1992, the Department of Energy (DOE)
is to collect a special annual assessment, for a period of 15 years,
from utilities that have used nuclear fuel. According to the DOE, the
1993 assessment attributable to Indian Point nuclear units 1 and 2 is
approximately $3.3 million, with similar amounts due annually thereafter.
The annual amount,including the 1993 amount, is subject to review and
future amounts are subject to adjustment for inflation. The Federal
Energy Regulatory Commission has issued accounting guidelines
requiring recognition of the liability and a corresponding
deferred charge for the estimated total amount of the assessment.
In 1993 the Company paid the first year assessment and recorded a
liability of $46.1 million for future amounts, of which $39.5
million is classified as non-current. The Company is recovering
these costs through its electric fuel adjustment clause.
<PAGE>
<PAGE> - 56 -
GAS TAKE-OR-PAY SETTLEMENT. In September 1993 the PSC approved
a settlement agreement for the recovery of deferred gas take-or-pay
costs, which at December 31, 1993 amounted to $35.0 million, including
interest. Commencing in October 1993, deferred costs associated with the
electric and steam departments are being billed to customers over
a two-year period and the costs associated with the gas
department are being billed to customers over a four-year period.
As settlement of the PSC's contention that the Company's
stockholders should bear some share of these costs, the Company
will not accrue additional interest on the unamortized deferred
balances during the periods of recovery.
CLEAN AIR ACT AMENDMENTS. The Clean Air Act amendments of 1990
impose limits on sulfur dioxide emissions from electric generating units.
Because the Company uses very low sulfur fuel oil and natural gas as boiler
fuels, the sulfur dioxide emission limits should not affect the
Company's operations. However, the Company will incur increased
capital and operating costs to meet the nitrogen oxide emissions
limits set by the New York State Department of Environmental
Conservation under the "Reasonably Available Control Technology"
(RACT) provisions of the Clean Air Act. The cost of compliance
with Phase I limitations which take effect in 1995 is estimated
at $23 million including the cost of the installation of
continuous emission monitors. The State may further reduce the
nitrogen oxide emissions limits under Phase II of the RACT
program which is expected to take effect in 1999. The Phase II
limitations could require the installation of flue gas controls
at generating units which could cost approximately $400 million.
NEW FINANCIAL ACCOUNTING STANDARDS. In 1993 the Company
adopted the provisions of Statement of Financial Accounting Standards
(SFAS) 106, "Employers' Accounting for Postretirement Benefits Other
Than Pensions" and SFAS 109, "Accounting for Income Taxes." See Notes
A, E and G to the financial statements.
SUPERFUND AND ASBESTOS CLAIMS AND OTHER CONTINGENCIES. Reference is
made to Note F to the financial statements for information concerning
potential liabilities of the Company arising from the Federal Comprehensive
Environmental Response, Compensation and Liability Act of 1980 ("Superfund"),
from claims relating to alleged exposure to asbestos, and from certain other
contingencies to which the Company is subject.
IMPACT OF INFLATION. In an inflationary period the purchasing power of
the dollar declines. The historical cost amounts reported in traditional
financial statements represent dollars of varying purchasing
power because such financial statements combine dollars spent at
various times in the past with dollars spent currently.
Although the rate of inflation has eased greatly from
its peak levels, the Company is still affected by the decline in
the purchasing power of the dollar caused by even modest
inflation. The Company cannot readily increase its prices to keep
pace with inflation. The regulatory process introduces a time lag
during which increased operating expenses are typically not fully
recovered. Moreover, regulation permits the Company to recover
through depreciation only the historical cost of its plant assets
even though in an inflationary economy the cost to replace the
assets upon their retirement will substantially exceed historical
cost. Thus, the Company experiences losses on its property
equivalent to the effect of inflation. These losses are, however,
partially offset by the fact that repayment of the Company's
long-term debt is made in dollars of lesser value than the
dollars originally borrowed.
<PAGE>
<PAGE> - 57 -
RESULTS OF OPERATIONS
Earnings per share were $2.66 in 1993, $2.46 in 1992 and
$2.32 in 1991. The average number of common shares outstanding
for 1993, 1992 and 1991 was 234.0 million, 231.1 million and
228.3 million, respectively.
Earnings for 1993 and 1992 reflect electric, gas and steam
rate increases and incentives earned under the provisions of the
1992 electric rate settlement agreement. For year 1992, earnings
were offset, in part, by lower investment income principally as a
result of the liquidation of Gramercy Assets and generally lower
interest rates.
OPERATING REVENUES AND FUEL COSTS. Operating revenues in 1993
and 1992 increased from the prior year by $332.5 million and by
$59.8 million, respectively. The principal increases and decreases
in revenue were:
(Millions of Dollars) Increase (Decrease)
1993 over 1992 1992 over 1991
Electric, gas and steam rate changes $ 238.2 $ 209.3
Fuel billings 113.4 (225.7)
Sales volume changes
Electric-Con Edison direct customers
and delivery service for NYPA and
municipal agencies 62.6 (77.4)
Gas 11.2 80.2
Steam (1.6) 18.9
Weather normalization-Gas 7.9 (25.7)
ERAM (119.2) 130.1
Sales to other electric utilities .9 (1.9)
Other 19.1 (48.0)
Total $ 332.5 $ 59.8
Electric rates were increased by $250.5 million in April
1992 and by $251.2 million in April 1993. Gas rates were
increased by $21.6 million and $12.3 million in October 1993 and
in October 1992, respectively, and steam rates were increased by
$11.8 million in October 1992.
The increase in fuel billings in 1993 reflects an increase
in the unit cost of fuel used to produce electricity and
increased electric sales due to weather variations. The decrease
in fuel billings in 1992 reflects a decrease in the unit cost of
fuel used to produce electricity and steam and reduced sales due
to weather variations. Fuel costs in 1993 and 1992 were also
affected by the availability of lower-cost nuclear generation
from the Company's Indian Point 2 unit. The cost of gas per therm
was 11.5 percent higher in 1993 than in 1992.
Electricity sales volume in the Company's service territory
increased 3.3 percent in 1993 and decreased 2.7 percent in 1992.
Gas sales volume to firm customers increased 0.6 percent in 1993
and 12.0 percent in 1992. Transportation of customer-owned gas
decreased 17.9 percent in 1993 and 2.9 percent in 1992, primarily
due to a reduction in the volume of gas transported for NYPA's
use as boiler fuel at its Poletti unit. Steam sales volume was
unchanged in 1993 and increased 3.0 percent in 1992.
<PAGE>
<PAGE> - 58 -
The Company's electricity, gas and steam sales vary
seasonally in response to weather. Electric peak load occurs in
the summer, while gas and steam sales peak in the winter. After
adjusting for variations, principally weather, in each period,
electricity sales volume increased 1.0 percent in 1993 and
decreased 0.3 percent in 1992. Similarly adjusted, gas sales
volume to firm customers increased 3.9 percent in 1993 and 1.8
percent in 1992, and steam sales volume decreased 0.1 percent in
1993 and 1.2 percent in 1992. Weather-adjusted sales represent
the Company's estimate of the sales that would have been made if
historical average weather conditions had prevailed.
OTHER OPERATIONS AND MAINTENANCE EXPENSES. Other operations
and maintenance expenses increased 5.4 percent and 4.3 percent in
1993 and 1992, respectively. For 1993 the increase reflects higher
production expenses due to the 1993 refueling and maintenance outage
of the Indian Point 2 nuclear unit, higher electric and gas distribution
expenses, the amortization of previously deferred costs associated with
the Company's Enlightened Energy program, in accordance with the
electric rate agreements, and higher labor costs. The increase in
1992 reflects the amortization of previously deferred costs
associated with the Company's Enlightened Energy program,
increased electric and gas distribution expenses and higher labor
costs. These were offset in part by lower production expenses
because there was a refueling and maintenance outage of the
Indian Point 2 nuclear unit in the 1991 period but none in 1992.
TAXES OTHER THAN FEDERAL INCOME TAX. At $1.2 billion, taxes
other than federal income tax remain the Company's largest operating
expense after fuel and purchased power. The principal components and
variations in operating taxes were:
(Millions of Dollars) Increase (Decrease)
1993 1993 1992
Amount Over 1992 Over 1991
Property taxes $ 576.2 $(68.3) $(65.3)
State and local taxes on revenues 468.8 26.9 30.7
Payroll taxes 58.0 1.8 2.7
Other taxes 56.3 (.7) 3.6
Total $1,159.3* $(40.3) $(28.3)
*Including sales taxes on customers' bills, total taxes other
than federal income taxes billed to customers in 1993 were
$1,451.5 million.
New York City property taxes for the fiscal year 1993-
1994 will be approximately $76 million less than for the fiscal
year ended June 30, 1993. The reduction in property taxes
reflects a decrease in the share of total New York City property
taxes borne by the Company. Under the terms of the electric rate
agreement the difference between property taxes included in
electric rates and actual electric property taxes is being
deferred for future credit to customers. Gas and steam rates
which are currently in effect reflect this reduced level of
property taxes.
The increase in state and local taxes on revenues in 1993
and 1992 was due principally to increased revenues. The Company
bills its customers for all revenue taxes and remits the amounts
collected to the municipalities and the state.
OTHER INCOME. Other income decreased $9.7 million in 1993
and $28.3 million in 1992. For 1993 the decrease reflects a lower
level of temporary cash investments and lower interest rates and for
1992 the decrease reflects the liquidation of Gramercy Assets and
lower interest rates.<PAGE>
<PAGE> - 59 -
INTEREST CHARGES. Interest on long-term debt increased
$7.3 million in 1993 and $3.1 million in 1992 principally as a
result of the issuance of new debt offset to a large extent by
the effect of debt refundings.
FEDERAL INCOME TAX. Federal income tax increased $44.5 million
in 1993 and $29.4 million in 1992 reflecting the changes each year in
income before tax and in tax deductions. The effect of the increase in
the corporate income tax rate from 34 percent to 35 percent effective
January 1, 1993 has been deferred in accordance with the rate agreements
in effect for all services. For gas and steam, rates effective October 1,
1993 reflect the 35 percent corporate income tax rate. See Note G to the
financial statements.
February 22, 1994
<PAGE>
<PAGE> - 60 -
ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA
A. Financial Statements
Page
Index to Financial Statements Number
Report of Independent Accountants 62
Consolidated Balance Sheet at December 31, 1993 63-64
and 1992
Consolidated Income Statement for the years 65
December 31, 1993, 1992 and 1991
Consolidated Statement of Cash Flows for the 66
years ended December 31, 1993, 1992 and 1991
Consolidated Statement of Capitalization at 67-69
December 31, 1993 and 1992
Consolidated Statement of Retained Earnings 70
for the years ended December 31, 1993, 1992 and 1991
Notes to Consolidated Financial Statements 71-87
The following Schedules are filed as "Financial Statement
Schedules" pursuant to Item 14 of this report:
Schedule V - Property, Plant and Equipment
(Utility Plant) 88-93
Schedule VI - Accumulated Depreciation -
Utility Plant 94-96
Schedule VIII - Valuation and Qualifying Accounts 97-99
Schedule X - Supplementary Income Statement
Information 100
All other schedules are omitted because they are not
applicable or the required information is shown in the
financial statements or notes thereto.
Separate financial statements of subsidiaries, not
consolidated, have been omitted because, if considered in the
aggregate, they would not constitute a significant
subsidiary.
<PAGE>
<PAGE> - 61 -
B. Supplementary Financial Information
Selected Quarterly Financial Data for the years ended December
31, 1993 and 1992 (Unaudited)
<TABLE>
<CAPTION>
First Second Third Fourth
1993 (Millions of Dollars) Quarter Quarter Quarter Quarter
- -----------------------------------------------------------------------------------------------
</CAPTION>
<S> <C> <C> <C> <C>
Operating revenues $1,586.1 $1,396.0 $1,799.7 $1,483.6
Operating income 222.3 134.5 400.1 194.2
Net income 153.9 62.5 324.8 117.3
Net income for common stock 145.0 53.6 315.9 108.4
Earnings per common share $ .62 $ .23 $1.35 $ .46
- -----------------------------------------------------------------------------------------------
</TABLE>
<TABLE>
<CAPTION>
First Second Third Fourth
1992 (Millions of Dollars) Quarter Quarter Quarter Quarter
- -----------------------------------------------------------------------------------------------
</CAPTION>
<S> <C> <C> <C> <C>
Operating revenues $1,456.1 $1,280.1 $1,717.9 $1,478.8
Operating income 186.0 145.8 377.4 171.2
Net income 116.5 77.5 309.5 100.6
Net income for common stock 107.3 68.5 300.1 91.8
Earnings per common share $ .47 $ .30 $1.30 $ .39
===============================================================================================
</TABLE>
In the opinion of the Company these quarterly amounts include all
djustments, consisting only of normal recurring accruals, necessary
for a fair presentation.
<PAGE>
<PAGE> - 62 -
Report of Independent Accountants
To the Board of Trustees and Stockholders of
Consolidated Edison Company of New York, Inc.
In our opinion, the consolidated financial statements listed under
Item 8.A in the index appearing on page 60 present fairly, in all
material respects, the financial position of Consolidated Edison
Company of New York, Inc. and its subsidiaries at December 31, 1993
and 1992, and the results of their operations and their cash flows
for each of the three years in the period ended December 31, 1993
in conformity with generally accepted accounting principles.
These financial statements are the responsibility of the Company's
management; our responsibility is to express an opinion on these
financial statements based on our audits. We conducted our audits
of these statements in accordance with generally accepted auditing
standards which require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements are free
of material misstatement. An audit includes examining, on a test
basis, evidence supporting the amounts and disclosures in the
financial statements, assessing the accounting principles used
and significant estimates made by management and evaluating the
overall financial statement presentation. We believe that our
audits provide a reasonable basis for the opinion expressed above.
As discussed in Notes A, E and G to the consolidated financial
statements, the Company changed its method of accounting for income
taxes and postretirement benefits other than pensions in 1993.
Price Waterhouse
Price Waterhouse
1177 Avenue of the Americas
New York, N.Y. 10036
February 22, 1994
<PAGE>
<PAGE> - 63 -
<TABLE>
CONSOLIDATED BALANCE SHEET
Consolidated Edison Company of New York, Inc.
======================================================================================
ASSETS
- --------------------------------------------------------------------------------------
<S> <C> <C>
At December 31 (Thousands of Dollars) 1993 1992
- --------------------------------------------------------------------------------------
Utility plant, at original cost (Notes A and B)
Electric $10,530,193 $10,183,064
Gas 1,341,704 1,250,312
Steam 403,411 371,758
General 1,015,947 882,083
- --------------------------------------------------------------------------------------
Total 13,291,255 12,687,217
Less: Accumulated depreciation 3,594,784 3,460,958
- --------------------------------------------------------------------------------------
Net 9,696,471 9,226,259
Construction work in progress 389,244 426,667
Nuclear fuel assemblies and components,
less accumulated amortization 70,441 76,732
- --------------------------------------------------------------------------------------
Net utility plant 10,156,156 9,729,658
======================================================================================
Current assets
Cash and temporary cash investments (Note A) 36,756 282,454
Accounts receivable -- customers, less allowance
for uncollectible accounts of $21,600 and $19,600 459,261 424,349
Other receivables 84,955 55,876
Regulatory accounts receivable (Note A) 97,117 167,931
Fuel, at average cost 53,755 87,485
Gas in storage, at average cost 49,091 45,570
Materials and supplies, at average cost 245,785 276,130
Prepayments 56,274 51,829
Other current assets 11,486 12,774
- --------------------------------------------------------------------------------------
Total current assets 1,094,480 1,404,398
======================================================================================
Investments and nonutility property
Investments (Note A) 92,108 70,033
Nonutility property 1,791 1,237
- --------------------------------------------------------------------------------------
Total investments and nonutility property 93,899 71,270
======================================================================================
Deferred charges
Recoverable fuel costs (Note A) 17,649 21,522
Enlightened Energy program costs (Note A) 140,057 80,760
Unamortized debt expense 144,928 55,072
Power contract termination costs 121,740 -
Other deferred charges 337,826 233,439
- --------------------------------------------------------------------------------------
Total deferred charges 762,200 390,793
======================================================================================
Regulatory asset - future
federal income taxes (Notes A and G) 1,376,759 -
======================================================================================
Total $13,483,494 $11,596,119
======================================================================================
</TABLE>
<PAGE>
<PAGE> - 64 -
<TABLE>
<CAPTION>
======================================================================================
Capitalization and Liabilities
- --------------------------------------------------------------------------------------
At December 31 (Thousands of Dollars) 1993 1992
- --------------------------------------------------------------------------------------
</CAPTION>
<S> <C> <C>
Capitalization (see Consolidated Statement of Capitalization)
Common shareholders' equity $ 5,068,530 $ 4,886,879
Preferred stock subject to mandatory redemption (Note B) 100,000 100,000
Other preferred stock 540,728 541,249
Long-term debt 3,643,891 3,493,553
- --------------------------------------------------------------------------------------
Total capitalization 9,353,149 9,021,681
======================================================================================
Noncurrent liabilities
Obligations under capital leases 50,355 52,906
Other noncurrent liabilities 125,369 90,129
- --------------------------------------------------------------------------------------
Total noncurrent liabilities 175,724 143,035
======================================================================================
Current liabilities
Long-term debt due within one year (Note B) 133,639 162,897
Accounts payable 399,543 376,536
Customer deposits 157,380 153,840
Accrued income taxes 28,410 37,499
Other accrued taxes 30,896 40,838
Accrued interest 82,002 86,559
Accrued wages 81,174 80,320
Other current liabilities 172,876 90,636
- --------------------------------------------------------------------------------------
Total current liabilities 1,085,920 1,029,125
======================================================================================
Deferred credits
Accumulated deferred federal income tax (Note A) 1,083,720 964,290
Accumulated deferred investment tax credits (Note A) 201,144 213,404
Other deferred credits 207,078 224,584
- --------------------------------------------------------------------------------------
Total deferred credits 1,491,942 1,402,278
======================================================================================
Deferred tax liability - future
federal income taxes (Notes A and G) 1,376,759 -
======================================================================================
Contingencies (Note F)
======================================================================================
Total $13,483,494 $11,596,119
======================================================================================
The accompanying notes are an integral part of these financial statements.
/TABLE
<PAGE>
<PAGE> - 65 -
<TABLE>
CONSOLIDATED INCOME STATEMENT
Consolidated Edison Company of New York, Inc.
============================================================================================
Year Ended December 31 (Thousands of Dollars) 1993 1992 1991
- --------------------------------------------------------------------------------------------
<S> <C> <C> <C>
Operating revenues (Note A)
Electric $5,131,665 $4,892,054 $4,896,818
Gas 808,389 728,343 678,332
Steam 325,340 312,507 297,908
- --------------------------------------------------------------------------------------------
Total operating revenues 6,265,394 5,932,904 5,873,058
============================================================================================
Operating expenses
Fuel and purchased power 1,417,829 1,317,072 1,440,575
Gas purchased for resale 289,708 245,175 223,354
Other operations 1,106,966 1,062,552 1,005,137
Maintenance 570,794 528,994 520,901
Depreciation and amortization (Note A) 403,730 380,861 359,826
Taxes, other than federal income tax 1,159,283 1,199,573 1,227,878
Federal income tax (Note G) 366,020 318,320 282,310
- --------------------------------------------------------------------------------------------
Total operating expenses 5,314,330 5,052,547 5,059,981
============================================================================================
Operating income 951,064 880,357 813,077
- --------------------------------------------------------------------------------------------
Other income (deductions)
Investment income (Note A) 4,934 12,063 48,215
Allowance for equity funds used during
construction (Note A) 7,222 9,313 10,286
Other income less miscellaneous deductions (7,565) (3,899) (6,181)
Federal income tax (Note G) 1,010 (2,150) (8,740)
- --------------------------------------------------------------------------------------------
Total other income 5,601 15,327 43,580
============================================================================================
Income before interest charges 956,665 895,684 856,657
- --------------------------------------------------------------------------------------------
Interest on long-term debt 281,756 274,442 271,361
Other interest 19,721 21,688 22,522
Allowance for borrowed funds used during
construction (Note A) (3,334) (4,534) (4,136)
- --------------------------------------------------------------------------------------------
Net interest charges 298,143 291,596 289,747
============================================================================================
Net income 658,522 604,088 566,910
Preferred stock dividend requirements 35,617 36,428 36,850
- --------------------------------------------------------------------------------------------
Net income for common stock $ 622,905 $ 567,660 $ 530,060
============================================================================================
Earnings per common share based on average
number of shares outstanding during each year
(233,981,369; 231,129,040; and 228,282,570) $2.66 $2.46 $2.32
============================================================================================
The accompanying notes are an integral part of these financial statements.
</TABLE>
<PAGE>
<PAGE> - 66 -
<TABLE>
<CAPTION>
CONSOLIDATED STATEMENT OF CASH FLOWS
Consolidated Edison Company of New York, Inc.
============================================================================================
Year Ended December 31 (Thousands of Dollars) 1993 1992 1991
- --------------------------------------------------------------------------------------------
</CAPTION>
<S> <C> <C> <C>
Operating activities
Net income $ 658,522 $ 604,088 $ 566,910
Principal non-cash charges (credits) to income
Depreciation and amortization 403,730 380,861 359,826
Deferred recoverable fuel costs 3,873 (510) 29,866
Federal income tax deferred 94,210 67,870 81,150
Common equity component of allowance for funds
used during construction (6,795) (8,710) (9,688)
Other non-cash charges (24,451) 49,596 8,114
Changes in assets and liabilities
Accounts receivable -- customers, less allowance
for uncollectibles (34,912) (34,367) 5,291
Regulatory accounts receivable 70,814 (127,497) (34,855)
Materials and supplies, including fuel
and gas in storage 60,554 (6,570) 40,630
Prepayments, other receivables and other current assets (32,236) 16,088 (31,307)
Enlightened Energy program costs (59,297) (20,841) (44,036)
Power contract termination costs (68,380) - -
Accounts payable 23,007 31,689 (8,758)
Other -- net (63,374) 10,326 (17,731)
- --------------------------------------------------------------------------------------------
Net cash flows from operating activities 1,025,265 962,023 945,412
============================================================================================
Investing activities including construction
Construction expenditures (789,068) (794,681) (774,817)
Nuclear fuel expenditures (14,092) (35,220) (9,127)
Contributions to nuclear decommissioning trust (19,247) (6,973) (6,973)
Common equity component of allowance for funds
used during construction 6,795 8,710 9,688
Investments other than temporary cash
investments - 137,152 90,095
- --------------------------------------------------------------------------------------------
Net cash flows from investing activities
including construction (815,612) (691,012) (691,134)
============================================================================================
Financing activities including dividends
Issuance of common stock 11,881 156,788 -
Issuance of preferred stock - 100,000 -
Issuance of long-term debt 1,378,475 875,000 303,150
Retirement of long-term debt and preferred stock (177,897) (256,718) (123,848)
Advance refunding of long-term debt and
preferred stock (1,069,732) (664,000) -
Issuance and refunding costs (108,562) (41,996) (7,607)
Common stock dividends (453,902) (439,150) (424,614)
Preferred stock dividends (35,614) (36,343) (36,832)
- --------------------------------------------------------------------------------------------
Net cash flows from financing activities
including dividends (455,351) (306,419) (289,751)
============================================================================================
Net decrease in cash and temporary cash investments (245,698) (35,408) (35,473)
Cash and temporary cash investments at January 1 282,454 317,862 353,335
Cash and temporary cash investments at December 31 $ 36,756 $282,454 $317,862
Supplemental disclosure of cash flow information
Cash paid during the period for:
Interest $ 265,475 $261,619 $259,739
Income taxes 280,122 250,753 220,567
============================================================================================
The accompanying notes are an integral part of these financial statements.
</TABLE>
<PAGE>
<PAGE> - 67 -
<TABLE>
CONSOLIDATED STATEMENT OF CAPITALIZATION
Consolidated Edison Company of New York, Inc.
==========================================================================================
<CAPTION>
At December 31 (Thousands of Dollars) 1993 1992
- ------------------------------------------------------------------------------------------
Shares outstanding
----------------------------
Dec. 31, 1993 Dec. 31, 1992
</CAPTION>
<S> <C> <C> <C> <C>
Common shareholders' equity (Note B)
Common stock, $2.50 par value,
authorized 340,000,000 shares 234,372,931 233,932,000 $1,448,845 $1,436,444
Retained earnings 3,658,886 3,489,880
Capital stock expense (39,201) (39,445)
- ------------------------------------------------------------------------------------------
Total common shareholders' equity 5,068,530 4,886,879
==========================================================================================
Preferred stock (Note B)
Subject to mandatory redemption
Cumulative Preferred, $100 par value,
7.20% Series I 500,000 500,000 50,000 50,000
6-1/8% Series J 500,000 500,000 50,000 50,000
- ------------------------------------------------------------------------------------------
Total subject to mandatory redemption 100,000 100,000
- ------------------------------------------------------------------------------------------
Other preferred stock
$5 Cumulative Preferred, without
par value, authorized 1,915,319
shares 1,915,319 1,915,319 175,000 175,000
Cumulative Preferred, $100 par value,
authorized 6,000,000 shares*
5-3/4% Series A 600,000 600,000 60,000 60,000
5-1/4% Series B 750,000 750,000 75,000 75,000
4.65% Series C 600,000 600,000 60,000 60,000
4.65% Series D 750,000 750,000 75,000 75,000
5-3/4% Series E 500,000 500,000 50,000 50,000
6.20% Series F 400,000 400,000 40,000 40,000
Cumulative Preference, $100 par
value, authorized 2,250,000 shares
6% Convertible Series B 57,278 62,486 5,728 6,249
- ------------------------------------------------------------------------------------------
Total other preferred stock 540,728 541,249
- ------------------------------------------------------------------------------------------
Total preferred stock 640,728 641,249
==========================================================================================
*Represents total authorized shares of cumulative preferred stock, $100 par value, including
preferred stock subject to mandatory redemption.
</TABLE>
<PAGE>
<PAGE> - 68 -
<TABLE>
<CAPTION>
=============================================================================================
At December 31 (Thousands of Dollars) 1993 1992
- ---------------------------------------------------------------------------------------------
Long-term debt (Note B)
Maturity Interest Rate Series
- ---------------------------------------------------------------------------------------------
</CAPTION>
First and Refunding Mortgage Bonds (open-end mortgage):
<S> <C> <C> <C> <C>
1993 4.40 % Y - 75,000
1993 4-5/8 AA - 75,000
1994 4.60 BB 125,000 125,000
1996 5 CC 100,000 100,000
1996 5.90 DD 75,000 75,000
1996 8-1/8 LL - 20,000
1997 6-1/4 EE - 80,000
1998 6.85 FF - 60,000
1999 7.90 GG - 80,000
2001 7.90 JJ - 150,000
2002 7.90 KK - 150,000
2003 7-3/4 MM - 150,000
- ---------------------------------------------------------------------------------------------
Total mortgage bonds 300,000 1,140,000
- ---------------------------------------------------------------------------------------------
Debentures:
1997 5.30 % 1993E 100,000 -
1998 6-1/4 1993A 100,000 -
1998 5.70 1993F 100,000 -
1999 6-1/2 1992D 75,000 75,000
2000 7-3/8 1992A 150,000 150,000
2000 7.60 1992C 125,000 125,000
2001 6-1/2 1993B 150,000 -
2002 6-5/8 1993C 150,000 -
2003 6-3/8 1993D 150,000 -
2004 7-5/8 1992B 150,000 150,000
2005 7-3/8 1992E 75,000 75,000
2023 7-1/2 1993G 380,000 -
2025 9.70 1990A 27,414 200,000
2026 9-3/8 1991A 95,329 175,000
2027 8.05 1992F 100,000 100,000
- ---------------------------------------------------------------------------------------------
Total debentures 1,927,743 1,050,000
- ---------------------------------------------------------------------------------------------
Tax-exempt debt -- notes issued to New York State Energy Research
and Development Authority for Facilities Revenue Bonds:
2020 9 % 1985A 128,285 256,000
2020 5-1/4 1993B 127,715 -
2021 7-1/2 1986A 150,000 150,000
2022 7-1/8 1987A 100,855 100,855
2022 9-1/4 1987B 29,385 49,145
2022 5-3/8 1993C 19,760 -
2024 7-3/4 1989A 150,000 150,000
2024 7-3/8 1989B 100,000 100,000
2024 7-1/4 1989C 150,000 150,000
2025 7-1/2 1990A 150,000 150,000
2026 7-1/2 1991A 128,150 128,150
2027 6-3/4 1992A 100,000 100,000
2027 6-3/8 1992B 100,000 100,000
2028 6 1993A 101,000 -
- ---------------------------------------------------------------------------------------------
Total tax-exempt debt 1,535,150 1,434,150
- ---------------------------------------------------------------------------------------------
<PAGE>
<PAGE> - 69 -
==============================================================================================
At December 31 (Thousands of Dollars) 1993 1992
- ----------------------------------------------------------------------------------------------
Other long-term debt:
Liens on purchased gas turbines 31,419 39,315
Other long-term debt 10,476 11,467
Unamortized debt discount (27,258) (18,482)
- ----------------------------------------------------------------------------------------------
Total 3,777,530 3,656,450
Less: Long-term debt due within one year 133,639 162,897
- ----------------------------------------------------------------------------------------------
Total long-term debt 3,643,891 3,493,553
==============================================================================================
Total capitalization $9,353,149 $9,021,681
==============================================================================================
The accompanying notes are an integral part of these financial statements.
</TABLE>
<PAGE>
<PAGE> - 70 -
<TABLE>
CONSOLIDATED STATEMENT OF RETAINED EARNINGS
Consolidated Edison Company of New York, Inc.
======================================================================================
<S> <S> <S> <S>
Year Ended December 31 (Thousands of Dollars) 1993 1992 1991
- --------------------------------------------------------------------------------------
Balance, January 1 $3,489,880 $3,361,305 $3,255,851
Net income for the year 658,522 604,088 566,910
- --------------------------------------------------------------------------------------
Total 4,148,402 3,965,393 3,822,761
======================================================================================
Dividends declared on capital stock
Cumulative Preferred at required annual rates 35,259 35,957 36,419
Cumulative Preference, 6% Convertible Series B 355 386 413
Common, $1.94, $1.90 and $1.86 per share 453,902 439,150 424,614
- --------------------------------------------------------------------------------------
Total dividends declared 489,516 475,493 461,446
Redemption of Cumulative Preferred Stock,
8-1/8% Series H - 20 10
- --------------------------------------------------------------------------------------
Total deductions 489,516 475,513 461,456
- --------------------------------------------------------------------------------------
Balance, December 31 $3,658,886 $3,489,880 $3,361,305
- --------------------------------------------------------------------------------------
The accompanying notes are an integral part of these financial statements.
</TABLE>
<PAGE>
<PAGE> - 71 -
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
===============================================================
NOTE A SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
- ---------------------------------------------------------------
REGULATION. The Company is subject to regulation by the New
York Public Service Commission (PSC) and the Federal Energy
Regulatory Commission (FERC). The Company's accounting policies
conform to generally accepted accounting principles, as applied
in the case of regulated public utilities, and to the account-
ing requirements and rate-making practices of these regulatory
authorities.
PRINCIPLES OF CONSOLIDATION. The accompanying consolidated
financial statements include the accounts of the Company and
its wholly-owned subsidiaries. Intercompany transactions have
been eliminated.
UTILITY PLANT AND DEPRECIATION. The capitalized cost of
additions to utility plant includes indirect costs such as
engineering, supervision, payroll taxes, pensions, other
benefits and an allowance for funds used during construction
(AFDC). The original cost of property, together with removal
cost, less salvage, is charged to accumulated depreciation as
property is retired. The cost of repairs and maintenance is
charged to expense, and the cost of betterments is capitalized.
Rates used for AFDC include the cost of borrowed funds
used for construction purposes and a reasonable rate on the
Company's own funds when so used, determined in accordance with
PSC and FERC regulations. The AFDC rate was 9.5 percent in 1993
and 1992 and 10.1 percent in 1991. The rate was compounded
semiannually, and the amounts applicable to borrowed funds were
treated as a reduction of interest charges.
The annual charge for depreciation is computed on the
straight-line method for financial statement purposes, using
rates based on average lives and net salvage factors, with the
exception of the Indian Point 2 nuclear unit, the Company's
share of the Roseton generating station and certain leaseholds,
which are depreciated on a remaining life amortization method.
Depreciation rates averaged approximately 3.1 percent in 1993,
1992 and 1991. Depreciation expense includes the amortization
of certain deferred charges authorized by the PSC.
The Company is a joint owner of two 1,200-megawatt
electric generating stations: (1) Bowline Point, operated by
Orange and Rockland Utilities, Inc. with Con Edison owning a
two-thirds interest and (2) Roseton, operated by Central Hudson
Gas & Electric Corp. with Con Edison owning a 40 percent
interest. Central Hudson has the option to acquire the
Company's interest in the Roseton station in 2004. Con Edison's
share of the investment in these stations at original cost and
as included in its balance sheet at December 31, 1993 and
December 31, 1992 was:
- ---------------------------------------------------------------
(Thousands of Dollars) 1993 1992
- ---------------------------------------------------------------
Bowline Point: Plant in service $195,546 $193,466
Construction work in progress 2,400 2,050
Roseton: Plant in service 139,798 141,330
Construction work in progress 1,204 439
- ---------------------------------------------------------------
The Company's share of accumulated depreciation for the
Roseton station at December 31, 1993 and 1992 was $57.9 million
and $56.0 million, respectively. A separate depreciation account
is not maintained for the Company's share of the Bowline Point
station. The Company's share of operating expenses for these stations
is included in its income statement.<PAGE>
<PAGE> - 72 -
NUCLEAR DECOMMISSIONING. Depreciation charges include a
provision for decommissioning both the Indian Point 2 and the
retired Indian Point 1 nuclear units. Decommissioning costs are
being accrued ratably over the Indian Point 2 license period
which extends to the year 2013. The Company has been accruing
for the costs of decommissioning within the internal
depreciation reserve since 1975. In 1989 the PSC permitted the
Company to establish an external trust fund for the costs of
decommissioning the nuclear portions of the plants pursuant to
NRC regulations. Accordingly, beginning in 1989 the Company
made contributions to such a trust. The external trust fund is
discussed below under "Investments" in this Note A.
Accumulated decommissioning provisions at December 31,
1993 and 1992, which include earnings on funds externally
invested, are as follows:
- ------------------------------------------------------------
Amounts Included in
Accumulated Depreciation
(Millions of Dollars) 1993 1992
- ------------------------------------------------------------
Nuclear $ 86.0 $ 70.0
Non-Nuclear 50.6 47.5
Total $136.6 $117.5
- ------------------------------------------------------------
The Company currently provides annual expense allowances
of $11.7 million and $3.1 million, respectively, for decommis-
sioning the nuclear and non-nuclear portions of the plants.
These amounts, which are recovered from customers through
billings, were approved by the PSC in the 1992 electric rate
settlement agreement, and were designed to fund decommissioning
costs which had been estimated, consistent with NRC minimum
funding standards in 1992, at approximately $300 million in
1993 dollars and (using a five percent annual escalation
factor) approximately $950 million in 2016, the midpoint of a
six-year decommissioning period assumed to follow expiration of
the license. In 1993 the NRC, using a substantially revised
scenario for waste disposal, published new funding standards
which would more than double these estimated decommissioning
costs. The Company is preparing a site-specific decommissioning
study for its plants which it intends to file with the PSC in
its next electric rate proceeding, currently planned for 1994.
The Company expects that this study will also produce estimated
decommissioning costs substantially higher than its previous
estimates. In the rate proceeding, the Company will seek an
increase in the amounts of the decommissioning expense
allowances consistent with the new study and NRC requirements.
NUCLEAR FUEL. Nuclear fuel assemblies and components are
amortized to operating expenses based on the quantity of heat
produced for the generation of electricity. A provision for the
future storage of the spent fuel is charged to operating
expenses based on the kilowatt-hours of electricity generated.
Nuclear fuel costs are recovered in revenues through base rates
or through the fuel adjustment clause.
LEASES. In accordance with SFAS 71, "Accounting for the Effects
of Certain Types of Regulation," those leases that meet the
criteria for capitalization are capitalized for accounting
purposes. For rate-making purposes, all leases have been
treated as operating leases.
<PAGE>
<PAGE> - 73 -
REVENUES. Revenues for electric and steam service are
recognized on a monthly billing cycle basis. Pursuant to the
three-year electric rate settlement agreement, effective April
1, 1992, actual electric net revenues (operating revenues less
fuel and purchased power costs and revenue taxes) are adjusted
by accrual to target levels established under the agreement in
accordance with the electric revenue adjustment mechanism
(ERAM). Revenues are also increased (or decreased) each month
to reflect incentives (or penalties) earned for the Enlightened
Energy program and for customer service activities. The
settlement agreement provides that the net regulatory asset (or
liability), including interest thereon, thus accrued in each
rate year is to be reflected in customers' bills in the
following rate year.
In accordance with a PSC rate order the Company began
phasing in recognition of unbilled gas revenues over a 4-1/4
year period effective October 1989. Pursuant to the gas rate
decision in October 1991, this recognition of unbilled gas
revenues was modified so as to be fully phased in by September
30, 1994.
Revenues from the fuel adjustment clause are not recorded
until billed.
RECOVERABLE FUEL COSTS. Fuel and purchased power costs that are
above the levels included in base rates are recoverable under
electric, gas and steam fuel adjustment clauses. If costs fall
below these levels, the difference is credited to customers.
For electric and steam, such costs are deferred until the
period in which they are billed or credited to customers
(40 days for electric, 30 days for steam). For gas, the excess
or deficiency is accumulated for refund or surcharge to
customers on an annual basis.
Effective April 1992, a partial pass-through electric fuel
adjustment clause (PPFAC) was implemented with monthly targets
for fuel and purchased power costs. The Company retains for
stockholders 30 percent of any savings in actual costs below
the target amount, but must bear 30 percent of any excess of
actual costs over the target. For each rate year of the
electric rate agreement there is a $30 million cap on the
maximum increase or decrease in fuel billings, with a limit
(within the $30 million) of $10 million for costs associated
with generation at the Company's Indian Point 2 nuclear unit.
Subject to these limits, 30 percent of any variance below
target amounts is added to regulatory accounts receivable and
30 percent of any variance above target amounts is deducted
from regulatory accounts receivable.
The PSC has allowed the Company to recover in rates
certain deferred recoverable fuel costs that were affected by
shortening the billing lag period or changing the cost of fuel
in base rates. If there were any further such revisions, the
Company believes that deferred recoverable fuel costs affected
thereby would be recovered.
<PAGE>
<PAGE> - 74 -
REGULATORY ACCOUNTS RECEIVABLE. Regulatory accounts receivable,
amounting to $97.1 million at December 31, 1993 include
accruals under the three-year electric rate settlement
agreement for net electric sales revenues in accordance with
the ERAM ($36.2 million), for incentives and lost revenues
related to the Company's Enlightened Energy program ($44.7
million), for incentives related to customer service activities
($6.4 million) and for the amounts to be billed under the PPFAC
($9.8 million). The revenues accrued in 1992 under the ERAM and
for incentives related to the Enlightened Energy program and
customer service activities are being collected from customers
over the twelve-month period ending March 31, 1994. Revenues
accrued in 1993 are anticipated to be collected over a twelve-
month period beginning April 1, 1994. The revenues accrued
under the PPFAC are billed to customers on a monthly basis
through the electric fuel adjustment clause.
ENLIGHTENED ENERGY COSTS. In accordance with PSC directives,
the Company defers the costs for its Enlightened Energy program
for future recovery from ratepayers. Such deferrals amounted to
$140.1 million at December 31, 1993 and $80.8 million at
December 31, 1992. Pursuant to the 1990 electric rate
settlement agreement, the Company recovered approximately $40
million through the fuel adjustment clause over the twelve-
month period ended March 31, 1992. In accordance with the 1992
electric rate settlement agreement, the Company is generally
recovering its Enlightened Energy program costs over a five-
year period.
TEMPORARY CASH INVESTMENTS. Temporary cash investments are
short-term, highly liquid investments which generally have
maturities of three months or less. They are stated at cost
which approximates market. The Company considers temporary cash
investments to be cash equivalents.
INVESTMENTS. Investments consist primarily of an external
nuclear decommissioning trust fund. At December 31, 1993 and
1992, the trust fund amounted to $83.1 million and $59.5
million, respectively. Investments are stated at cost which
approximates market. Earnings on the trust fund are not
recognized in income but are included in the accumulated
depreciation reserve. See "Nuclear Decommissioning" in this
Note A.
FEDERAL INCOME TAX. The Company provides for deferred federal
income taxes with respect to certain benefits realized from
depreciation deductions utilized for tax purposes, deferred
fuel accounting, unbilled revenues (electricity, gas and steam)
included in taxable income, deferrals arising from the rate
settlement agreements, and certain other specific items, when
approved by the PSC.
For rate-making purposes, accumulated deferred federal
income taxes are deducted from rate base and amortized or
otherwise applied as a reduction (or increase) in federal
income tax expense in future years. Accumulated deferred
investment tax credits are amortized ratably over the lives of
the related properties. The balance at December 31, 1993 for
each of the above is reported as a "deferred credit" in the
financial statements.
<PAGE>
<PAGE> - 75 -
In February 1992 the Financial Accounting Standards Board
issued SFAS 109, "Accounting for Income Taxes," which the
Company adopted effective January 1, 1993. It requires the
Company to record deferred income taxes for substantially all
temporary differences between the book and tax bases of assets
and liabilities, including those differences for which deferred
taxes have not previously been provided. It also requires the
Company to adjust deferred income tax balances to reflect
changes in current income tax rates. As a result of the
adoption of SFAS 109, the Company has recorded an increase in
accumulated deferred income tax liabilities and a corresponding
increase in regulatory assets. The $1,376.8 million of
regulatory assets represents the future revenue recoverable
from customers for increases in taxes as these taxes become
payable (see Note G). On January 15, 1993, the PSC issued an
Interim Policy Statement proposing accounting procedures
consistent with SFAS 109 and providing assurances that these
future increases in taxes will be recoverable in rates.
The Company and its subsidiaries file a consolidated
federal income tax return. Income taxes are allocated to each
company based on its taxable income.
RESEARCH AND DEVELOPMENT COSTS. Research and development costs
relating to specific construction projects are capitalized. All
other such costs are charged to operating expenses as incurred.
Research and development costs in 1993, 1992 and 1991,
amounting to $48.0 million, $44.8 million and $36.3 million,
respectively, were charged to operating expenses. No research
and development costs were capitalized in these years.
<PAGE>
<PAGE> - 76 -
Note B Capitalization
- --------------------------------------------------------------
COMMON STOCK AND PREFERRED STOCK NOT SUBJECT TO MANDATORY REDEMPTION.
Each share of Series B preference stock is convertible into 13 shares
of common stock at a conversion price of $7.69 per share. During 1993,
1992 and 1991, 5,208 shares, 4,349 shares and 7,177 shares of Series B
preference stock were converted into 67,704 shares, 56,537 shares and
93,301 shares of common stock, respectively.
At December 31, 1993, 744,614 shares of unissued common
stock were reserved for conversion of preference stock. The
preference stock is subordinate to the $5 Cumulative Preferred
Stock and Cumulative Preferred Stock with respect to dividends
and liquidation rights.
Redemption prices of preferred stock other than Series I
and Series J at December 31, 1993 (in each case, plus accrued
dividends) were as follows:
- --------------------------------------------------------------
$5 Cumulative Preferred Stock $105.00
- --------------------------------------------------------------
Cumulative Preferred Stock:
Series A 102.00
Series B 102.00
Series C 101.00
Series D 101.00
Series E 101.00
Series F 102.50
- --------------------------------------------------------------
Cumulative Preference Stock:
6% Convertible Series B 100.00
- --------------------------------------------------------------
PREFERRED STOCK SUBJECT TO MANDATORY REDEMPTION. The Company is
required to redeem 25,000 of the Series I shares on May 1 of each
year in the five-year period commencing with the year 2002 and to
redeem the remaining Series I shares on May 1, 2007. The Company
is required to redeem the Series J shares on August 1, 2002. In
each case, the redemption price is $100 per share plus accrued and
unpaid dividends to the redemption date. In addition, the Company
may redeem Series I shares at a redemption price of $106.48 per
share, plus accrued dividends, if redeemed prior to May 1, 1994
(and thereafter at prices declining annually to $100 per share,
plus accrued dividends, after April 30, 2002); provided, however,
that prior to May 1, 1997, the Company may not redeem any Series I
shares with borrowed funds or proceeds from certain securities
issuances having a cost to the Company of less than 7.20
percent per annum.
Neither Series I nor Series J shares may be called for
redemption while dividends are in arrears on outstanding shares
of $5 Cumulative Preferred Stock or Cumulative Preferred Stock.
Nevertheless, the mandatory redemption obligation of the
Company with respect to such shares is cumulative and if the
redemption requirement is in arrears the Company may not
purchase or redeem or pay any dividends on the common stock or
any other stock ranking junior as to dividends or assets to the
Cumulative Preferred Stock, except for payments or distribu-
tions in common stock or such junior stock.
<PAGE>
<PAGE> - 77 -
LONG-TERM DEBT. Total long-term debt maturing in the period
1994-1998 is as follows:
- --------------------------------------------------------------
1994 $133,639,000
1995 $ 10,889,000
1996 $183,524,000
1997 $106,256,000
1998 $200,000,000
- --------------------------------------------------------------
Substantially all properties and franchises of the
Company, other than expressly excepted property, are subject to
the liens securing the Company's First and Refunding Mortgage
Bonds and the mortgage bonds of acquired companies.
<PAGE>
<PAGE> - 78 -
===============================================================
Note C Lines of Credit
- ----------------------------------------------------------------
The Company has bank lines of credit for 1994 amounting to $150
million. The credit lines require average compensating balances
of 2.5 percent of the credit lines, with interest on any borrowings
to be at prevailing market rates. There are no legal restrictions
applicable to the Company's cash balances resulting from its
obligation to maintain compensating balances.
===============================================================
<PAGE>
<PAGE> - 79 -
Note D Pension Plans
- ---------------------------------------------------------------
The pension plans for management and bargaining unit employees
cover substantially all employees of the Company and are
designed to comply with the Employee Retirement Income Security
Act of 1974 (ERISA). Contributions are made solely by the
Company based on an actuarial valuation, and are not less than
the minimum amount required by ERISA. The Company's policy is
to fund the actuarially computed net pension cost as such cost
accrues. Benefits for management and bargaining unit employees
are generally based on a final five-year average pay formula.
In accordance with SFAS 87, "Employers' Accounting for
Pensions," the Company uses the projected unit credit method
for determining pension cost. Pension costs for 1993, 1992 and
1991 amounted to $42.4 million, $56.8 million and $65.9
million, respectively, of which $33.6 million for 1993, $44.8
million for 1992 and $52.0 million for 1991 was charged to
operating expense. In accordance with SFAS 88, "Employers'
Accounting for Settlements and Curtailments of Defined Benefit
Pension Plans and for Termination Benefits," as modified by
SFAS 71, the Company in 1993 recorded an additional $4.4
million of pension cost, of which $3.5 million was charged to
operating expense, in connection with the special retirement
program discussed below.
Effective January 1, 1993, the Company adopted the PSC's
"Statement of Policy and Order Concerning the Accounting and
Ratemaking Treatment for Pensions and Postretirement Benefits
Other Than Pensions" ("the Policy"). The Policy requires
certain departures from the Company's previous accounting under
SFAS 87, including actuarial recognition of investment gains
and losses over five years (previously four years), removal of
the 10 percent gain/loss corridor, and adoption of a 10-year
period for amortization of recognized gains and losses.
(Previously, amounts in excess of corridor limits were
amortized over the remaining average service life of active
employees.) These changes have reduced pension cost in 1993 due
to more rapid amortization of outstanding actuarial gains.
The Company offered a special retirement program in 1993
providing enhanced pension benefits for those employees who met
certain eligibility requirements and retired within specific
time limits. The incentives offered by the Company fall within
the category of special termination benefits as described in
SFAS 88. The increase in pension obligations as a result of
this program amounts to $33.3 million. Under an agreement with
the PSC, the Company will amortize this liability over a 15-
year period, with rate recovery anticipated for the costs
allocable to years three through fifteen. In accordance with
SFAS 71, the Company has charged the equivalent of the first
two years of the amortization ($4.4 million) to pension expense
in 1993 and has established a liability and offsetting regula-
tory asset for the $28.9 million allocable to future periods.
<PAGE>
<PAGE> - 80 -
The components of net periodic pension cost for 1993,
1992 and 1991 were as follows:
- -------------------------------------------------------------------
(Millions of Dollars) 1993 1992 1991
- -------------------------------------------------------------------
Service cost -- benefits earned
during the period $ 96.0 $ 89.7 $ 83.4
Interest cost on projected
benefit obligation 259.9 243.2 218.8
Actual return on plan assets (500.0) (258.4) (598.7)
Unrecognized investment
gain (loss) deferred 201.5 (19.3) 355.5
Net amortization (15.0) 1.6 6.9
Net periodic pension cost 42.4 56.8 65.9
Special retirement program cost 33.3 - -
Regulatory asset (28.9) - -
Net special retirement program cost 4.4 - -
Total pension cost $ 46.8 $ 56.8 $ 65.9
- -------------------------------------------------------------------
To determine the present value of the projected benefit
obligation in 1993, 1992 and 1991, a discount rate of 7.5
percent and an average rate of increase in future compensation
levels of approximately 6.5 percent were assumed. The assumed
long-term rate of return on plan assets was 8.5 percent for
these years.
The pension plan assets consist primarily of corporate
common stock and bonds, group annuity contracts and debt of the
United States government and its agencies.
The funded status of the pension plans as of December 31,
1993, 1992 and 1991 was as follows:
- --------------------------------------------------------------------
(Millions of Dollars) 1993 1992 1991
- --------------------------------------------------------------------
Actuarial present value of
benefit obligations:
Vested $2,731.9 $2,421.0 $2,245.0
Nonvested 212.6 206.0 193.0
Accumulated to date 2,944.5 2,627.0 2,438.0
Effect of projected future
compensation levels 841.5 809.0 745.0
Total projected obligation 3,786.0 3,436.0 3,183.0
Plan assets at fair value 4,154.3 3,745.0 3,551.0
Plan assets less projected
benefit obligation 368.3 309.0 368.0
Unrecognized net gain (522.9) (447.0) (446.0)
Unrecognized prior service cost* 102.5 112.0 49.0
Unrecognized net transition
liability at January 1, 1987* 23.2 26.0 29.0
Accrued pension cost $ (28.9)** $ 0 $ 0
- ---------------------------------------------------------------------
*Being amortized over approximately 15 years.
**See discussion above in this Note D.
<PAGE>
<PAGE> - 81 -
Note E Postretirement Benefits Other Than Pensions (OPEB)
- ---------------------------------------------------------------
The Company has a contributory comprehensive hospital, medical
and prescription drug program for all retirees, their
dependents and surviving spouses. The Company also provides
life insurance benefits for approximately 7,000 retired
employees. All of the Company's employees become eligible for
these benefits upon retirement except that the amount of life
insurance is limited and is available only to management
employees and to those bargaining unit employees who
participated in the optional program prior to retirement. The
Company has reserved the right to amend or terminate the
program.
The Company adopted the provisions of SFAS 106,
"Employers' Accounting for Postretirement Benefits Other Than
Pensions," effective January 1, 1993. It contains specific
rules for determining the cost of postretirement health and
life insurance benefits. These rules require accrual of the
obligation for previously unrecognized retiree benefit cost
over a shorter period than previous methods.
The retiree health and life insurance expense for 1993 was
determined in accordance with the PSC policy (see Note D) which
requires the Company to defer the difference between the rate
allowance for OPEB expense and the OPEB expense determined in
accordance with SFAS 106, amortize the transition obligation
over 20 years, and recognize all gains and losses over a 10-
year period in determining the SFAS 106 expense. Electric, gas
and steam rates in 1993 reflect the increase in expense
resulting from the adoption of SFAS 106. Rate allowances that
are not funded to an external trust accrue interest at the pre-
tax rate of return. As of December 31, 1993, the Company has
accrued $6.9 million in interest on its unfunded liability.
The Company's policy is to fund in external trusts the
actuarially determined annual costs for retiree health and life
insurance subject to statutory maximum (and minimum) limits.
The cost to the Company for retiree health benefits for
1993, 1992 and 1991 amounted to $66.3 million, $46.1 million
and $33.5 million, respectively, of which $52.5 million for
1993, $36.4 million for 1992 and $26.5 million for 1991 was
charged to operating expense. The cost of the retiree life
insurance plan to the Company for 1993, 1992 and 1991 amounted
to $22.3 million, $8.6 million and $7.7 million, respectively,
of which $17.7 million for 1993, $6.8 million for 1992 and $6.1
million for 1991 was charged to operating expense.
The components of postretirement benefit (health and life
insurance) costs for year 1993 were as follows:
- -----------------------------------------------------------------
(Millions of Dollars)
- -----------------------------------------------------------------
Service cost -- benefits earned during
the period $ 10.3
Interest cost on accumulated postretirement
benefit obligations 53.0
Actual return on plan assets (8.5)
Unrecognized investment gain deferred 2.9
Amortization of transition obligation
over 20 years 30.9
Net periodic postretirement benefit cost $ 88.6
- -----------------------------------------------------------------
<PAGE>
<PAGE> - 82 -
The discount rate used in determining the accumulated
postretirement benefit obligation was 7.5 percent, and the
expected long-term rate of return on plan assets was 8.5 percent.
The health cost trend rate assumed for year 1993 was 12 percent,
for year 1994, 9 percent, and then declining one percent per year
to 4.5 percent for year 1999 and thereafter. If the assumed health
care cost trend rate were to be increased by one percentage point
each year, the accumulated postretirement benefit obligation would
increase by approximately $89.1 million and the service cost and
interest component of the net periodic postretirement benefit cost
would increase by $8.7 million. Postretirement plan assets consist
of corporate common stock and bonds, group annuity contracts, debt
of the United States government and its agencies and short-term
securities.
The following table sets forth the program's estimated funded
status at December 31, 1993:
- -----------------------------------------------------------------
(Millions of Dollars)
- -----------------------------------------------------------------
Accumulated postretirement benefit obligation:
Retirees $ 413.2
Employees eligible to retire 144.2
Employees not eligible to retire 221.5
Total projected obligation 778.9
Plan assets at fair value 130.8
Plan assets less accumulated postretirement
benefit obligation (648.1)
Unrecognized net loss 33.4
Unrecognized net transition liability
at January 1, 1993* 586.2
Accrued postretirement benefit cost $ (28.5)
- -----------------------------------------------------------------
*Being amortized over a period of 20 years at $30.9 million per
year.
The accrued unfunded liability for retiree health benefits
was $28.5 million at December 31, 1993 and $41.8 million at
December 31, 1992.
<PAGE>
<PAGE> - 83 -
NOTE F - Contingencies
- -----------------------------------------------------------
INDIAN POINT. Nuclear generating units similar in design to the
Company's Indian Point 2 unit have experienced problems of
varying severity in their steam generators, which in a number
of instances have required steam generator replacement.
Inspections of the Indian Point 2 steam generators since 1976
have revealed various problems, some of which appear to have
been arrested, but the remaining service life of the steam
generators is uncertain and may be shorter than the unit's
life. The projected service life of the steam generators is
reassessed periodically in the light of the inspections made
during scheduled outages of the unit. Based on data from the
latest completed inspection (1993) and other sources, the
Company estimates that steam generator replacement will not be
required before 1997, and possibly not until some years later.
To avoid procurement delays in the event replacement is
necessary, the Company purchased, and has stored at the site,
replacement steam generators. If replacement of the steam
generators is required, such replacement is presently estimated
(in 1993 dollars) to require additional expenditures of
approximately $135 million (exclusive of replacement power
costs) and an outage of approximately six months. However,
securing necessary permits and approvals or other factors could
require a substantially longer outage if steam generator
replacement is required on short notice.
NUCLEAR INSURANCE. The insurance polices covering the Company's
nuclear facilities for property damage, excess property damage,
and outage costs permit assessments under certain conditions to
cover insurers' losses. As of December 31, 1993, the highest
amount which could be assessed for losses during the current
policy year under all of the policies was $25.6 million. While
assessments may also be made for losses in certain prior years,
the Company is not aware of any losses in such years which it
believes are likely to result in an assessment.
Under certain circumstances, in the event of nuclear
incidents at facilities covered by the federal government's
third-party liability indemnification program, the Company
could be assessed up to $79.3 million per incident of which not
more than $10 million may be assessed in any one year. The
per-incident limit is to be adjusted for inflation not later
than 1998 and not less than once every five years thereafter.
The Company participates in an insurance program covering
liabilities for injuries to certain workers in the nuclear
power industry. In the event of such injuries, the Company is
subject to assessment up to an estimated maximum of
approximately $3.2 million.
<PAGE>
<PAGE> - 84 -
SUPERFUND CLAIMS. The Federal Comprehensive Environmental
Response, Compensation and Liability Act of 1980 (Superfund) by
its terms imposes joint and several strict liability,
regardless of fault, upon generators of hazardous substances
for resulting removal and remedial costs and environmental
damages. Complex technical and factual determinations must be
made prior to the ultimate disposition of these claims.
Accordingly, estimates of the total removal, remedial and
environmental damage costs for these sites may not be accurate.
Moreover, the Company at appropriate times seeks recovery of
its share of these costs under any applicable insurance
coverage and through inclusion of such costs in allowable costs
for rate-making purposes.
The Company has received process or notice concerning
possible claims under Superfund or similar state statutes
relating to 14 sites at which it is alleged that hazardous
substances generated by the Company (and, in most instances, a
large number of other potentially responsible parties) were
deposited. At the five sites for which the Company has
estimates, the removal, remedial and environmental damage costs
it will be obligated to pay are estimated at approximately $11
million. The Company has accrued a liability in this amount. It
is possible that substantial additional costs may be incurred
with respect to the 14 sites and other sites.
The Company evaluates its potential Superfund liability on
an ongoing basis. Based on the information and relevant
circumstances known to the Company at this time, it is the
opinion of the Company that the amounts it will be obligated to
pay for the 14 sites will not have a material adverse effect on
the Company's financial position.
DEC PROCEEDING. In June 1992 the Staff of the New York State
Department of Environmental Conservation (DEC) instituted a
civil administrative proceeding against the Company before the
DEC, alleging environmental violations. The complaint seeks
approximately $20 million in civil penalties, and injunctive
measures which could require substantial capital expenditures.
The Company does not believe that this proceeding will
materially interfere with its operations or materially
adversely affect the Company's financial position.
ASBESTOS CLAIMS. Suits were brought in New York State and
federal courts against the Company and many other defendants,
wherein several hundred plaintiffs sought large amounts of
compensatory and punitive damages for deaths and injuries
allegedly caused by exposure to asbestos at various premises of
the Company. Many of these suits have been disposed of without
any payment by the Company, or for immaterial amounts.
Additional settlements, also for immaterial amounts, are
pending. The amounts specified in all the remaining suits,
including those for which settlements are pending, total
billions of dollars but the Company believes that these amounts
are greatly exaggerated, as were the claims already disposed
of. Based on the information and relevant circumstances known
to the Company at this time, it is the opinion of the Company
that these suits will not have a material adverse effect on the
Company's financial position.
<PAGE>
<PAGE> - 85 -
<TABLE>
===========================================================================================
NOTE G Federal Income Tax
- -------------------------------------------------------------------------------------------
<S> <C> <C> <C>
Year Ended December 31 (Thousands of Dollars) 1993 1992 1991
- -------------------------------------------------------------------------------------------
Charged to: Operations $ 366,020 $318,320 $282,310
Other income (1,010) 2,150 8,740
- -------------------------------------------------------------------------------------------
Total federal income tax 365,010 320,470 291,050
===========================================================================================
Reconciliation of reported net income with taxable income
Federal income tax -- current 270,800 252,600 209,900
Federal income tax -- deferred 106,470 81,670 94,950
Investment tax credits deferred (12,260) (13,800) (13,800)
- -------------------------------------------------------------------------------------------
Total federal income tax 365,010 320,470 291,050
Net income 658,522 604,088 566,910
- -------------------------------------------------------------------------------------------
Income before federal income tax 1,023,532 924,558 857,960
- -------------------------------------------------------------------------------------------
Effective federal income tax rate 35.7% 34.7% 33.9%
===========================================================================================
Adjustments decreasing (increasing) taxable income:
Tax depreciation in excess of book depreciation:
Amounts subject to normalization 224,833 203,030 191,810
Other (88,819) (86,999) (75,880)
Deferred recoverable fuel costs (3,873) 510 (29,866)
Unbilled revenue (16,076) (3,349) 26,112
Regulatory accounts receivable (70,814) 127,497 34,855
Enlightened Energy program costs 59,297 20,841 44,036
Property tax settlements (66,060) 14,277 (40,273)
Boiler fuel sales tax settlement 52,748 (65,401) -
Pension and other postretirement benefits (978) (38,394) -
Advance refunding of long-term debt 86,346 17,375 -
Power contract termination costs 68,380 - -
Other -- net (3,859) (8,625) 88,115
- -------------------------------------------------------------------------------------------
Total 241,125 180,762 238,909
- -------------------------------------------------------------------------------------------
Taxable income 782,407 743,796 619,051
===========================================================================================
Federal income tax -- current
Amount computed at statutory rates (35%, 34% and 34%)* 273,842 252,891 210,477
Tax credits (3,042) (291) (577)
- -------------------------------------------------------------------------------------------
Total 270,800 252,600 209,900
- -------------------------------------------------------------------------------------------
Charged to: Operations 271,140 250,160 202,860
Other income (340) 2,440 7,040
- -------------------------------------------------------------------------------------------
Total 270,800 252,600 209,900
===========================================================================================
*Under rate agreements, the effect of increases in the statutory rate from 34% to 35%
effective January 1, 1993 was deferred until such effect could next be reflected in rates.
The deferrals applicable to gas and steam operations began to be amortized over a twelve-
month period beginning October 1, l993 when new rates became effective. For electric
operations, deferrals for the year 1993 and the first three months of 1994 will be amortized
over a twelve-month period beginning April 1, 1994 when new electric rates become effective.
<PAGE>
<PAGE> - 86 -
===========================================================================================
NOTE G Federal Income Tax, continued
- -------------------------------------------------------------------------------------------
<S> <C> <C> <C>
Year Ended December 31 (Thousands of Dollars) 1993 1992 1991
- -------------------------------------------------------------------------------------------
Federal income tax -- deferred
Provisions for deferred federal income taxes
consist of the following tax effects of timing
differences between tax and book income:
Tax depreciation in excess of book depreciation 76,193 66,220 62,473
Deferred recoverable fuel costs (1,356) 174 (10,154)
Unbilled revenue (5,626) (1,139) 8,878
Regulatory accounts receivable (24,785) 43,349 11,851
Enlightened Energy program costs 20,754 7,086 14,972
Property tax settlements (23,121) 4,854 (13,693)
Boiler fuel sales tax settlement 18,462 (22,236) -
Pension and other postretirement benefits 3,850 (13,054) -
Advance refunding of long-term debt 30,221 5,908 -
Power contract termination costs 23,933 - -
Other -- net (12,055) (9,492) 20,623
- -------------------------------------------------------------------------------------------
Total 106,470 81,670 94,950
- -------------------------------------------------------------------------------------------
Charged to: Operations 107,140 81,960 93,250
Other income (670) (290) 1,700
- -------------------------------------------------------------------------------------------
Total $ 106,470 $ 81,670 $ 94,950
===========================================================================================
Under SFAS 109, temporary differences gave rise to deferred tax assets of $136,139 and
deferred tax liabilities of $1,512,898 at December 31, 1993. These amounts are summarized
as follows:
Property related differences $1,505,768
Allowance for funds used during construction 5,790
Unamortized investment tax credits (108,311)
Reserve for injuries and damages (26,977)
Other -- net 489
- -------------------------------------------------------------------------------------------
Net deferred tax liability $1,376,759
============================================================================================
</TABLE>
<PAGE>
<PAGE> - 87 -
<TABLE>
===========================================================================================================================
NOTE H Financial Information by Business Segments (Thousands of Dollars)
- ---------------------------------------------------------------------------------------------------------------------------
Electric Steam
------------------------------------ ---------------------------------------
<S> <C> <C> <C> <C> <C> <C>
1993 1992 1991 1993 1992 1991
- ---------------------------------------------------------------------------------------------------------------------------
Operating revenues* $5,145,010 $4,905,523 $4,909,803 $ 326,888 $ 314,075 $ 299,724
- ---------------------------------------------------------------------------------------------------------------------------
Operating expenses
Fuel and purchased power 1,259,194 1,170,171 1,282,872 158,635 146,901 157,703
Other operations and maintenance* 1,403,022 1,328,900 1,276,491 78,787 75,210 72,315
Depreciation and amortization 350,590 331,610 314,526 9,909 9,259 8,561
Taxes, other than federal income 994,174 1,037,461 1,069,483 46,090 46,741 46,586
Federal income tax 322,076 281,960 251,847 4,966 6,069 1,621
- ---------------------------------------------------------------------------------------------------------------------------
Total operating expenses* 4,329,056 4,150,102 4,195,219 298,387 284,180 286,786
- ---------------------------------------------------------------------------------------------------------------------------
Operating income 815,954 755,421 714,584 28,501 29,895 12,938
- ---------------------------------------------------------------------------------------------------------------------------
Construction expenditures 626,494 641,076 634,562 36,612 32,008 26,539
- ---------------------------------------------------------------------------------------------------------------------------
Net utility plant** 8,592,187 8,285,993 7,933,027 337,713 303,198 273,678
Fuel 53,681 87,410 79,714 74 75 87
Other identifiable assets 2,170,016 743,795 607,542 56,732 15,929 8,813
- ---------------------------------------------------------------------------------------------------------------------------
*Intersegment rentals included in segments'
income but eliminated for total company
Operating revenues $13,345 $13,469 $12,985 $ 1,548 $ 1,568 $ 1,816
Operating expenses 2,726 2,559 2,924 14,139 14,250 13,702
===========================================================================================================================
Gas Total Company
------------------------------------ ---------------------------------------
1993 1992 1991 1993 1992 1991
- ---------------------------------------------------------------------------------------------------------------------------
Operating revenues* $ 810,377 $ 730,132 $ 680,175 $ 6,265,394 $ 5,932,904 $ 5,873,058
- ---------------------------------------------------------------------------------------------------------------------------
Operating expenses
Fuel and purchased power - - - 1,417,829 1,317,072 1,440,575
Gas purchased for resale 289,708 245,175 223,354 289,708 245,175 223,354
Other operations and maintenance* 212,832 204,262 193,876 1,677,760 1,591,546 1,526,038
Depreciation and amortization 43,231 39,992 36,739 403,730 380,861 359,826
Taxes, other than federal income 119,019 115,371 111,809 1,159,283 1,199,573 1,227,878
Federal income tax 38,978 30,291 28,842 366,020 318,320 282,310
- ---------------------------------------------------------------------------------------------------------------------------
Total operating expenses* 703,768 635,091 594,620 5,314,330 5,052,547 5,059,981
- ---------------------------------------------------------------------------------------------------------------------------
Operating income 106,609 95,041 85,555 951,064 880,357 813,077
- ---------------------------------------------------------------------------------------------------------------------------
Construction expenditures 125,962 121,597 113,716 789,068 794,681 774,817
- ---------------------------------------------------------------------------------------------------------------------------
Net utility plant** 1,226,256 1,140,467 1,056,289 10,156,156 9,729,658 9,262,994
Fuel and gas in storage 49,091 45,570 43,160 102,846 133,055 122,961
Other identifiable assets 193,724 86,829 84,238 2,420,472 846,553 700,593
Other corporate assets 804,020 886,853 1,021,394
- ---------------------------------------------------------------------------------------------------------------------------
Total assets $13,483,494 $11,596,119 $11,107,942
- ---------------------------------------------------------------------------------------------------------------------------
*Intersegment rentals included in segments'
income but eliminated for total company
Operating revenues $ 1,988 $ 1,789 $ 1,843 $ 16,881 $16,826 $16,644
Operating expenses 16 17 18 16,881 16,826 16,644
===========================================================================================================================
**General Utility Plant was allocated to Electric and Gas on the basis of the departmental use of such plant. Pursuant to
PSC requirements the Steam department is charged an interdepartmental rent for General Plant used in Steam operations
which is credited to the Electric and Gas departments.
/TABLE
<PAGE>
<PAGE> - 88 -
<TABLE>
SCHEDULE V
CONSOLIDATED EDISON COMPANY OF NEW YORK, INC.
PROPERTY, PLANT AND EQUIPMENT (UTILITY PLANT) (D)
YEAR ENDED DECEMBER 31, 1993
(Thousands of Dollars)
<CAPTION>
COLUMN F
COLUMN A BALANCE AT END OF PERIOD
Common
(Electric-
Classification Electric Gas Gas) Steam Total
</CAPTION>
<S> <C> <C> <C> <C> <C>
Plant in service:
Land and land rights......... $ 96,484 $ 665 $ 29,049 $ 758 $ 126,956
Structures and improvements.. 764,009 8,378 353,005 12,702 1,138,094
Production plant equipment... 2,325,769 - - 103,620 2,429,389
Storage plant equipment...... - 30,446 - - 30,446
Transmission lines and
equipment.................. 1,564,717 - - - 1,564,717
Distribution lines, mains
and equipment.............. 5,743,165 1,300,976 - 286,331 7,330,472
General equipment............ - - 633,893 - 633,893
10,494,144 1,340,465 1,015,947 403,411 13,253,967
Construction work in progress.. 261,412 29,422 90,440 7,970 389,244
Plant held for future use:
Land and land rights......... 19,359 - - - 19,359
Structures and improvements.. 15,944 - - - 15,944
Transmission lines and
equipment.................. 746 - - - 746
36,049 - - - 36,049
Gas stored underground -
Non current.................. - 1,239 - - 1,239
Utility Plant (A).......... $10,791,605 $1,371,126 $1,106,387 $ 411,381 $13,680,499
Nuclear fuel assemblies (B).... $ 459,465(E)$ - $ - $ - $ 459,465
Less accumulated provision
for amortization of Nuclear
fuel assemblies (C)........ 389,024(E) - - - 389,024
Net Nuclear Fuel........ $ 70,441 $ - $ - $ - $ 70,441
(A) Neither the total additions nor the total deductions of utility plant, net nuclear fuel,
and gas stored underground - non current during the year ended December 31, 1993 amounted
to more than 10% of the property, plant and equipment account (including nuclear fuel)
and the information required by columns b, c, d and e is therefore
omitted. The additions (Col. (c)) to utility plant aggregated $789,068
(including $8,708 allowance for funds used during construction).
Retirements (Col. (d)) amounted to $219,894. Other charges (Col. (e))
amounted to $(2,559) consisting of the following:
Amortization of Capitalized Leases $ (2,563)
Transfer from Non-Utility Property 4
$ (2,559)
<PAGE>
<PAGE> - 89 -
(B) The additions (Col. (c)) to nuclear fuel aggregated $14,092 (including
$1,848 allowance for funds used during construction) in uranium and
fabrication costs relating to Indian Point 2 - Regions 14 and 15.
(C) The additions (Col. (c)) to the accumulated provision for amortization
of nuclear fuel assemblies amounted to $20,384.
(D) For information as to the Company's methods and rates used in computing
the annual provision for depreciation, see Note A to the Financial
Statements included herein.
(E) Included in the $459,465 and the $389,024 is $328,667 for spent nuclear
fuel removed from the reactor and stored at the Indian Point site.
</TABLE>
<PAGE>
<PAGE> - 90 -
<TABLE>
SCHEDULE V
CONSOLIDATED EDISON COMPANY OF NEW YORK, INC.
PROPERTY, PLANT AND EQUIPMENT (UTILITY PLANT) (D)
YEAR ENDED DECEMBER 31, 1992
(Thousands of Dollars)
<CAPTION>
COLUMN F
COLUMN A BALANCE AT END OF PERIOD
Common
(Electric-
Classification Electric Gas Gas) Steam Total
</CAPTION>
<S> <C> <C> <C> <C> <C>
Plant in service:
Land and land rights......... $ 96,788 $ 665 $ 29,019 $ 666 $ 127,138
Structures and improvements.. 743,262 8,450 287,448 12,482 1,051,642
Production plant equipment... 2,317,613 - - 99,587 2,417,200
Storage plant equipment...... - 29,645 - - 29,645
Transmission lines and
equipment.................. 1,532,927 - - - 1,532,927
Distribution lines, mains
and equipment.............. 5,458,281 1,210,313 - 259,023 6,927,617
General equipment............ - - 565,616 - 565,616
10,148,871 1,249,073 882,083 371,758 12,651,785
Construction work in progress.. 263,431 25,705 129,991 7,540 426,667
Plant held for future use:
Land and land rights......... 18,808 - - - 18,808
Structures and improvements.. 14,514 - - - 14,514
Transmission lines and
equipment.................. 871 - - - 871
34,193 - - - 34,193
Gas stored underground -
Non current.................. - 1,239 - - 1,239
Utility Plant (A).......... $10,446,495 $1,276,017 $1,012,074 $ 379,298 $13,113,884
Nuclear fuel assemblies (B).... $ 445,373(E)$ - $ - $ - $ 445,373
Less accumulated provision
for amortization of Nuclear
fuel assemblies (C)........ 368,641(E) - - - 368,641
Net Nuclear Fuel........ $ 76,732 $ - $ - $ - $ 76,732
(A) Neither the total additions nor the total deductions of utility plant, net nuclear fuel,
and gas stored underground - non current during the year ended December 31, 1992 amounted
to more than 10% of the property, plant and equipment account (including nuclear fuel)
and the information required by columns b, c, d and e is therefore
omitted. The additions (Col. (c)) to utility plant aggregated $794,681
(including $11,903 allowance for funds used during construction).
Retirements (Col. (d)) amounted to $123,832. Other charges (Col. (e))
amounted to $(3,193) consisting of the following:
Amortization of Capitalized Leases $ (2,576)
Amortization of Weaver Unsuccessful Exploration Costs (667)
Transfer from Non-Utility Property 50
$ (3,193)
<PAGE>
<PAGE> - 91 -
(B) The additions (Col. (c)) to nuclear fuel aggregated $35,220 (including
$1,944 allowance for funds used during construction) in uranium and
fabrication costs relating to Indian Point 2 - Regions 14 and 15.
(C) The additions (Col. (c)) to the accumulated provision for amortization
of nuclear fuel assemblies amounted to $32,972.
(D) For information as to the Company's methods and rates used in computing
the annual provision for depreciation, see Note A to the Financial
Statements included herein.
(E) Included in the $445,373 and the $368,641 is $280,985 for spent nuclear
fuel removed from the reactor and stored at the Indian Point site.
/TABLE
<PAGE>
<PAGE> - 92 -
<TABLE>
SCHEDULE V
CONSOLIDATED EDISON COMPANY OF NEW YORK, INC.
PROPERTY, PLANT AND EQUIPMENT (UTILITY PLANT) (D)
YEAR ENDED DECEMBER 31, 1991
(Thousands of Dollars)
<CAPTION>
COLUMN F
COLUMN A BALANCE AT END OF PERIOD
Common
(Electric-
Classification Electric Gas Gas) Steam Total
</CAPTION>
<S> <C> <C> <C> <C> <C>
Plant in service:
Land and land rights......... $ 90,722 $ 665 $ 28,645 $ 694 $ 120,726
Structures and improvements.. 712,062 8,359 282,088 12,434 1,014,943
Production plant equipment... 2,230,217 624 - 98,064 2,328,905
Storage plant equipment...... - 29,672 - - 29,672
Transmission lines and
equipment.................. 1,487,363 - - - 1,487,363
Distribution lines, mains
and equipment.............. 5,195,136 1,120,574 - 234,029 6,549,739
General equipment............ - - 524,175 - 524,175
9,715,500 1,159,894 834,908 345,221 12,055,523
Construction work in progress.. 270,974 28,044 47,626 9,917 356,561
Plant held for future use:
Land and land rights......... 17,627 - - - 17,627
Structures and improvements.. 14,407 - - - 14,407
Transmission lines and
equipment.................. 871 - - - 871
32,905 - - - 32,905
Gas stored underground -
Non current.................. - 1,239 - - 1,239
Utility Plant (A).......... $10,019,379 $1,189,177 $ 882,534 $ 355,138 $12,446,228
Nuclear fuel assemblies (B).... $ 410,152(E)$ - $ - $ - $ 410,152
Less accumulated provision
for amortization of Nuclear
fuel assemblies (C)........ 335,668(E) - - - 335,668
Net Nuclear Fuel........ $ 74,484 $ - $ - $ - $ 74,484
(A) Neither the total additions nor the total deductions of utility plant, net nuclear fuel,
and gas stored underground - non current during the year ended December 31, 1991 amounted
to more than 10% of the property, plant and equipment account (including nuclear fuel)
and the information required by columns b, c, d and e is therefore
omitted. The additions (Col. (c)) to utility plant aggregated $774,817
(including $11,327 allowance for funds used during construction).
Retirements (Col. (d)) amounted to $164,625. Other charges (Col. (e))
amounted to $(2,721) consisting of the following:
Amortization of Capitalized Leases $ (2,597)
Amortization of Weaver Unsuccessful Exploration Costs (90)
Transfer from Non-Utility Property (34)
$ (2,721)
<PAGE>
<PAGE> - 93 -
(B) The additions (Col. (c)) to nuclear fuel aggregated $9,127 (including
$3,095 allowance for funds used during construction) in uranium and
fabrication costs relating to Indian Point 2 - Regions 10, 11, 12 and
13.
(C) The additions (Col. (c)) to the accumulated provision for amortization
of nuclear fuel assemblies amounted to $17,845.
(D) For information as to the Company's methods and rates used in computing
the annual provision for depreciation, see Note A to the Financial
Statements included herein.
(E) Included in the $410,152 and the $335,668 is $280,985 for spent nuclear
fuel removed from the reactor and stored at the Indian Point site.
/TABLE
<PAGE>
<PAGE> - 94 -
<TABLE>
SCHEDULE VI
CONSOLIDATED EDISON COMPANY OF NEW YORK, INC.
ACCUMULATED DEPRECIATION - UTILITY PLANT
YEAR ENDED DECEMBER 31, 1993
(Thousands of Dollars)
<CAPTION>
COLUMN A COLUMN B COLUMN C COLUMN D COLUMN E COLUMN F
Other Charges
Add (Deduct)
Additions
Balance at Charged to Removal Balance
Beginning Costs and Cost Less At End
Description of Period Expenses Retirements Salvage Other of Period
</CAPTION>
<S> <C> <C> <C> <C> <C> <C>
Accumulated Depreciation
Utility Plant:
Electric................ $2,881,521 $297,747 $173,330 $(41,930) $ 4,324(B) $2,968,332
Electric Plant Held
for Future Use 7,838 - 76 76 - 7,838
Gas..................... 269,117 32,702 9,147 (3,137) - 289,535
Steam................... 76,100 9,909 4,529 (7,812) - 73,668
Common.................. 226,382 61,935 32,812 (98) 4 255,411
TOTAL $3,460,958 $402,293(A) $219,894 $(52,901) $ 4,328 $3,594,784
(A) Excludes $1,437 representing the amortization of regulatory study costs.
(B) Represents the estimated net earnings applicable to the External Trust Fund for
Nuclear Decommissioning Costs.
/TABLE
<PAGE>
<PAGE> - 95 -
<TABLE>
SCHEDULE VI
CONSOLIDATED EDISON COMPANY OF NEW YORK, INC.
ACCUMULATED DEPRECIATION - UTILITY PLANT
YEAR ENDED DECEMBER 31, 1992
(Thousands of Dollars)
<CAPTION>
COLUMN A COLUMN B COLUMN C COLUMN D COLUMN E COLUMN F
Other Charges
Add (Deduct)
Additions
Balance at Charged to Removal Balance
Beginning Costs and Cost Less At End
Description of Period Expenses Retirements Salvage Other of Period
</CAPTION>
<S> <C> <C> <C> <C> <C> <C>
Accumulated Depreciation
Utility Plant:
Electric................ $2,718,236 $284,710 $ 80,533 $(43,564) $ 2,672(C) $2,881,521
Electric Plant Held
for Future Use 8,361 - 523 - - 7,838
Gas..................... 248,767 30,309(A) 7,285 (2,674) - 269,117
Steam................... 81,461 9,258 7,848 (6,771) - 76,100
Common.................. 200,893 54,777 27,643 (1,645) - 226,382
TOTAL $3,257,718 $379,054(B) $123,832 $(54,654) $ 2,672 $3,460,958
(A)Excludes $668 representing the amortization of unsuccessful exploration costs which was
credited to Gas Plant in Service.
(B)Excludes $1,437 representing the amortization of regulatory study costs.
(C)Represents the estimated net earnings applicable to the External Trust Fund for
Nuclear Decommissioning Costs.
/TABLE
<PAGE>
<PAGE> - 96 -
<TABLE>
SCHEDULE VI
CONSOLIDATED EDISON COMPANY OF NEW YORK, INC.
ACCUMULATED DEPRECIATION - UTILITY PLANT
YEAR ENDED DECEMBER 31, 1991
(Thousands of Dollars)
<S> <C> <C> <C> <C> <C> <C>
COLUMN A COLUMN B COLUMN C COLUMN D COLUMN E COLUMN F
Other Charges
Add (Deduct)
Additions
Balance at Charged to Removal Balance
Beginning Costs and Cost Less At End
Description of Period Expenses Retirements Salvage Other of Period
Accumulated Depreciation
Utility Plant:
Electric................ $2,607,405 $270,991 $119,212 $(39,642) $(1,306)(D) $2,718,236
Electric Plant Held
for Future Use 8,430 - - (69) - 8,361
Gas..................... 230,162 28,287(A) 7,347 (2,329) (6) 248,767
Steam................... 79,521 8,561 3,317 (3,304) - 81,461
Common.................. 181,285 49,184 34,749 89 5,084 (C) 200,893
TOTAL $3,106,803 $357,023(B) $164,625 $(45,255) $ 3,772 $3,257,718
(A)Excludes $90 representing the amortization of unsuccessful exploration costs which was
credited to Gas Plant in Service.
(B)Excludes: (1) $1,276 representing the amortization of the Company's Cornwall investment.
(2) $1,437 representing the amortization of regulatory study costs.
(C)Represents depreciation on property transferred from electric utility plant to common
utility plant in May 1991.
(D)Represents the estimated net earnings applicable to the External Trust Fund for
Nuclear Decommissioning Costs.
/TABLE
<PAGE>
<PAGE> - 97 -
<TABLE>
SCHEDULE VIII
CONSOLIDATED EDISON COMPANY OF NEW YORK, INC.
VALUATION AND QUALIFYING ACCOUNTS
YEAR ENDED DECEMBER 31, 1993
(Thousands of Dollars)
<S> <C> <C> <C> <C> <C>
COLUMN A COLUMN B COLUMN C COLUMN D COLUMN E
Additions
(1) (2)
Balance at Charged to Charged to Balance
Beginning Costs and Other At End
Description of Period Expenses Accounts Deductions of Period
Valuation Accounts
deducted in the balance
sheet from the assets to
which they apply:
Accumulated Provision
for uncollectible
accounts receivable:
Electric, Gas and
Steam Customers........ $ 19,600 $ 28,006 - $ 26,006* $ 21,600
Other.................... - - - - -
*Accounts written off less cash collections, miscellaneous adjustments and amounts reinstated
as receivables previously written off.
/TABLE
<PAGE>
<PAGE> - 98 -
<TABLE>
SCHEDULE VIII
CONSOLIDATED EDISON COMPANY OF NEW YORK, INC.
VALUATION AND QUALIFYING ACCOUNTS
YEAR ENDED DECEMBER 31, 1992
(Thousands of Dollars)
<S> <C> <C> <C> <C> <C>
COLUMN A COLUMN B COLUMN C COLUMN D COLUMN E
Additions
(1) (2)
Balance at Charged to Charged to Balance
Beginning Costs and Other At End
Description of Period Expenses Accounts Deductions of Period
Valuation Accounts
deducted in the balance
sheet from the assets to
which they apply:
Accumulated Provision
for uncollectible
accounts receivable:
Electric, Gas and
Steam Customers........ $ 18,500 $ 27,037 - $ 25,937* $ 19,600
Other.................... - - - - -
*Accounts written off less cash collections, miscellaneous adjustments and amounts reinstated
as receivables previously written off.
/TABLE
<PAGE>
<PAGE> - 99 -
<TABLE>
SCHEDULE VIII
CONSOLIDATED EDISON COMPANY OF NEW YORK, INC.
VALUATION AND QUALIFYING ACCOUNTS
YEAR ENDED DECEMBER 31, 1991
(Thousands of Dollars)
<S> <C> <C> <C> <C>
COLUMN A COLUMN B COLUMN C COLUMN D COLUMN E
Additions
(1) (2)
Balance at Charged to Charged to Balance
Beginning Costs and Other At End
Description of Period Expenses Accounts Deductions of Period
Valuation Accounts
deducted in the balance
sheet from the assets to
which they apply:
Accumulated Provision
for uncollectible
accounts receivable:
Electric, Gas and
Steam Customers........ $ 18,500 $ 26,444 - $ 26,444* $ 18,500
Other.................... - - - - -
*Accounts written off less cash collections, miscellaneous adjustments and amounts reinstated
as receivables previously written off.
/TABLE
<PAGE>
<PAGE> - 100 -
<TABLE>
SCHEDULE X
CONSOLIDATED EDISON COMPANY OF NEW YORK, INC.
SUPPLEMENTARY INCOME STATEMENT INFORMATION
YEARS ENDED DECEMBER 31, 1993, 1992 AND 1991
YEAR ENDED DECEMBER 31,
<S> <C> <C> <C>
1993 1992 1991
(Thousands of Dollars)
Taxes, other than payroll and income taxes,
are set forth as follows:
Real Estate and Special Franchise.......... $ 577,244 $ 645,383 $ 710,676
State and Local taxes on gross revenue..... 470,229 429,983 430,327
Other...................................... 109,517 107,084 102,764
$1,156,990 $1,182,450 $1,243,767
Charged to:
Operating taxes.............................. $1,101,330 $1,143,400 $1,174,374
Operations - principally fuel................ 37,502 33,726 31,863
Other........................................ 18,158 5,324 37,530
$1,156,990 $1,182,450 $1,243,767
The amounts of maintenance and repairs which are charged to expense, other than those
set forth in the Income Statement, are not considered to be significant. Advertising
costs are not considered to be significant. The Company pays no royalties, and the
Company has no depreciation and amortization of intangible assets.
</TABLE>
<PAGE>
<PAGE> - 101 -
ITEM 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON
ACCOUNTING AND FINANCIAL DISCLOSURE
NONE.
PART III
ITEM 10. DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT
ITEM 11. EXECUTIVE COMPENSATION
ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND
MANAGEMENT
ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
Information required by Part III is incorporated by
reference from the Company's definitive proxy statement for its
Annual Meeting of Stockholders to be held on May 16, 1994. The
proxy statement is to be filed pursuant to Regulation 14A not
later than 120 days after December 31, 1993, the close of the
fiscal year covered by this report.
In accordance with General Instruction G(3) to Form 10-K
other information regarding the Company's Executive Officers may
be found in Part I of this report under the caption "Executive
Officers of the Registrant."
<PAGE>
<PAGE> - 102 -
PART IV
ITEM 14. EXHIBITS, FINANCIAL STATEMENT SCHEDULES AND REPORTS ON
FORM 8-K
(a) Documents filed as part of this report:
1. List of Financial Statements
Consolidated Balance Sheet at December 31, 1993 and
1992
Consolidated Income Statement for the years ended
December 31, 1993, 1992 and 1991
Consolidated Statement of Cash Flows for the years
ended December 31, 1993, 1992 and 1991
Consolidated Statement of Capitalization at December
31, 1993 and 1992
Consolidated Statement of Retained Earnings for the
years ended December 31, 1993, 1992 and 1991
Notes to Consolidated Financial Statements
2. List of Financial Statement Schedules
Property, Plant & Equipment (Utility Plant)
(Schedule V)
Accumulated Depreciation - Utility Plant
(Schedule VI)
Valuation and Qualifying Accounts
(Schedule VIII)
Supplementary Income Statement Information
(Schedule X)
<PAGE>
<PAGE> - 103 -
3. List of Exhibits
3(i).1 Restated Certificate of Incorporation filed with the
Department of State of the State of New York on
December 31, 1984. (Designated in the Company's Annual
Report on Form 10-K for the year ended December 31,
1989 as Exhibit 3(a).)
3(i).2 Certificate of Amendment of Restated Certificate of
Incorporation filed with the Department of State of the
State of New York on May 16, 1988. (Designated in the
Company's Annual Report on Form 10-K for the year ended
December 31, 1989 as Exhibit 3(b).)
3(i).3 Certificate of Amendment of Restated Certificate of
Incorporation filed with the Department of State of the
State of New York on June 2, 1989. (Designated in the
Company's Annual Report on Form 10-K for the year ended
December 31, 1989 as Exhibit 3(c).)
3(i).4 Certificate of Amendment of Restated Certificate of
Incorporation filed with the Department of State of the
State of New York on April 28, 1992. (Designated in
the Company's Current Report on Form 8-K, dated April
24, 1992, as Exhibit 4(d).)
3(i).5 Certificate of Amendment of Restated Certificate of
Incorporation filed with the Department of State of the
State of New York on August 21, 1992. (Designated in
the Company's Current Report on Form 8-K, dated August
20, 1992, as Exhibit 4(e).)
3(ii) By-laws of the Company, effective as of May 31, 1993.
(Designated in the Company's Quarterly Report on Form
10-Q for the quarter ended June 30, 1993 as Exhibit
3.2.)
4.1 Indenture, dated as of April 1, 1946, between the
Company and the National City Bank of New York (now
Citibank, N.A.), as Trustee. (Designated in
Registration Statement No. 2-6932 as Exhibit 7-48.)
<PAGE>
<PAGE> - 104 -
4.2 The following Supplemental Indentures between the
Company and the National City Bank of New York (now
Citibank, N.A.), as Trustee, which are designated as
follows:
Designation
Securities Act Securities Exchange Act
Supplemental Registration File No. 1-1217
Indenture Statement Exhibit Form Date
(1) Fifteenth 2-13939 2-4
(2) Twenty-eighth 10-K 12/31/90
(3) Twenty-ninth 2-24272 4-4
(4) Thirtieth 2-25736 4-4
4.3 Instrument of Resignation, Appointment and Acceptance,
dated as of October 31, 1979, among the Company,
Citibank, N.A., and Chemical Bank, Supplemental to
Mortgage Trust Indenture, dated as of April 1, 1946.
(Designated in the Company's Annual Report on Form 10-K
for the year ended December 31, 1991 as Exhibit 4(c).)
4.4 Participation Agreement, dated as of August 15, 1985,
between New York State Energy Research and Development
Authority ("NYSERDA") and the Company. (Designated in
the Company's Quarterly Report on Form 10-Q for the
quarter ended June 30, 1990 as Exhibit 4(a)(1).)
4.5 The following Supplemental Participation Agreements
supplementing the Participation Agreement, dated as of
August 15, 1985, between NYSERDA and the Company, which
are designated as follows:
Supplemental Securities Exchange Act
Participation Agreement File No. 1-1217
Number Date Form Date Exhibit
(1) First 11/15/86 10-Q 6/30/90 4(a)(2)
(2) Second 4/15/87 10-Q 6/30/90 4(a)(3)
(3) Third 9/15/87 10-Q 6/30/90 4(a)(4)
(4) Fourth 1/1/89 10-Q 6/30/90 4(a)(5)
(5) Fifth 7/1/89 10-Q 6/30/90 4(a)(6)
(6) Sixth 11/1/89 10-Q 6/30/90 4(a)(7)
(7) Seventh 7/1/90 10-Q 6/30/90 4(a)(8)
(8) Eighth 1/1/91 10-K 12/31/90 4(e)(8)
(9) Ninth 1/15/92 10-K 12/31/91 4(e)(9)
4.6 Participation Agreement, dated as of December 1, 1992,
between NYSERDA and the Company. (Designated in the
Company's Annual Report on Form 10-K for the year
ended December 31, 1992 as Exhibit 4(f).)
<PAGE>
<PAGE> - 105 -
4.7 The following Supplemental Participation Agreements
supplementing the Participation Agreement, dated as of
December 1, 1992, between NYSERDA and the Company,
which are designated as follows:
Supplemental Securities Exchange Act
Participation Agreement File No. 1-1217
Number Date Form Date Exhibit
(1) First 3/15/93 10-Q 6/30/93 4.1
(2) Second 10/1/93 10-Q 9/30/93 4.3
4.8 Indenture of Trust, dated as of August 15, 1985,
between NYSERDA and Morgan Guaranty Trust Company of
New York, as Trustee ("Morgan Guaranty"). (Designated
in the Company's Quarterly Report on Form 10-Q for the
quarter ended June 30, 1990 as Exhibit 4(b)(1).)
4.9 The following Supplemental Indentures of Trust
supplementing the Indenture of Trust, dated as of
August 15, 1985, between NYSERDA and Morgan Guaranty.
Supplemental Securities Exchange Act
Indenture of Trust File No. 1-1217
Number Date Form Date Exhibit
(1) First 11/15/86 10-Q 6/30/90 4(b)(2)
(2) Second 4/15/87 10-Q 6/30/90 4(b)(3)
(3) Third 9/15/87 10-Q 6/30/90 4(b)(4)
(4) Fourth 1/1/89 10-Q 6/30/90 4(b)(5)
(5) Fifth 7/1/89 10-Q 6/30/90 4(b)(6)
(6) Sixth 11/1/89 10-Q 6/30/90 4(b)(7)
(7) Seventh 7/1/90 10-Q 6/30/90 4(b)(8)
(8) Eighth 1/1/91 10-K 12/31/90 4(g)(8)
(9) Ninth 1/15/92 10-K 12/31/91 4(g)(9)
4.10 Indenture of Trust, dated as of December 1, 1992,
between NYSERDA and Morgan Guaranty Trust Company of
New York, as Trustee ("Morgan Guaranty"). (Designated
in the Company's Annual Report on Form 10-K for the
year ended December 31, 1992 as Exhibit 4(i).)
4.11 The following Supplemental Indentures of Trust
supplementing the Indenture of Trust, dated as of
December 1, 1992, between NYSERDA and Morgan Guaranty.
Supplemental Securities Exchange Act
Indenture of Trust File No. 1-1217
Number Date Form Date Exhibit
(1) First 3/15/93 10-Q 6/30/93 4.2
(2) Second 10/1/93 10-Q 9/30/93 4.4
<PAGE>
<PAGE> - 106 -
4.12 Indenture, dated as of December 1, 1990, between the
Company and The Chase Manhattan Bank (National
Association), as Trustee. (Designated in the
Company's Annual Report on Form 10-K for the year
ended December 31, 1990 as Exhibit 4(h).)
4.13 The following Forms of the Company's Debentures:
Securities Exchange Act
File No. 1-1217
Debenture Form Date Exhibit
9.70%, Series 1990 A 8-K 11/29/90 4
9 3/8%, Series 1991 A 8-K 6/20/91 4
7 3/8%, Series 1992 A 8-K 2/5/92 4(a)
7 5/8%, Series 1992 B 8-K 2/5/92 4(b)
7.60%, Series 1992 C 8-K 2/25/92 4
6 1/2%, Series 1992 D 8-K 8/26/92 4(a)
7 3/8%, Series 1992 E 8-K 8/26/92 4(b)
8.05%, Series 1992 F 8-K 12/15/92 4
6 1/4%, Series 1993 A 8-K 1/13/93 4
6 1/2%, Series 1993 B 8-K 2/4/93 4(a)
6 5/8%, Series 1993 C 8-K 2/4/93 4(b)
6 3/8%, Series 1993 D 8-K 4/7/93 4
5.30%, Series 1993 E 8-K 5/19/93 4(a)
5.70%, Series 1993 F 8-K 5/19/93 4(b)
7 1/2%, Series 1993 G 8-K 6/7/93 4
7 1/8% Series 1994 A 8-K 2/8/94 4
10.1 Agreement dated as of October 31, 1968 among Central
Hudson Gas & Electric Corporation, the Company and
Niagara Mohawk Power Corporation. (Designated in
Registration Statement No. 2-31884 as Exhibit 7.)
10.2 Amendment dated November 23, 1976 to Agreement dated
as of October 31, 1968 among Central Hudson Gas &
Electric Corporation, the Company and Niagara Mohawk
Power Corporation and Additional Agreement dated as of
November 23, 1976 between Central Hudson and the
Company. (Designated in the Company's Annual Report
on Form 10-K for the year ended December 31, 1991 as
Exhibit 10(b).)
10.3 General Agreement between Orange and Rockland
Utilities, Inc. and the Company dated October 10,
1969. (Designated in Registration Statement No.
2-35734 as Exhibit 7-1.)
<PAGE>
<PAGE> - 107 -
10.4 Letters, dated November 18, 1970 and November 23,
1970, between Orange and Rockland Utilities, Inc. and
the Company pursuant to Article 14(a) of the aforesaid
General Agreement. (Designated in Registration
Statement No. 2-38807 as Exhibit 5-3.)
10.5 The Con Edison Thrift Savings Plan for Management
Employees and Tax Reduction Act Stock Ownership Plan,
as amended. (Designated in the Company's Annual
Report on Form 10-K for the year ended December 31,
1989 as Exhibit 10(m).)
10.6 Amendment No. 13, dated August 30, 1990, to the Con
Edison Thrift Savings Plan for Management Employees
and Tax Reduction Act Stock Ownership Plan.
Designated in the Company's Quarterly Report on Form
10-Q for the quarter ended September 30, 1990 as
Exhibit 19(b).)
10.7 Amendment No. 14, dated April 2, 1991, to the Con
Edison Thrift Savings Plan for Management Employees
and Tax Reduction Stock Ownership Plan. (Designated
in the Company's Quarterly Report on Form 10-Q for the
Quarter ended March 31, 1991 as Exhibit 19(c).)
10.8 Amendment No. 15, dated April 6, 1992, to the Con
Edison Thrift Plan for Management Employees and Tax
Reduction Act Stock Ownership Plan. (Designated in
the Company's Quarterly Report on Form 10-Q for the
Quarter ended March 31, 1992 as Exhibit 19(a).)
10.9 Deferred Compensation Plan for the benefit of Trustees
of the Company, dated February 27, 1979, and
amendments thereto, dated September 19, 1979
(effective February 27, 1979), February 26, 1980, and
November 24, 1992 (effective January 1, 1993).
(Designated in the Company's Annual
Report on Form 10-K for the year ended December 31,
1992 as Exhibit 10(i).)
10.10 Employment contract, dated August 24, 1982, between
the Company and Arthur Hauspurg, as amended.
(Designated in the Company's Annual Report on Form
10-K for the year ended December 31, 1991 as Exhibit
10(i).)
10.11 Agreement, dated January 24, 1991, between the Company
and Arthur Hauspurg. (Designated in the Company's
Annual Report on Form 10-K for the year ended December
31, 1990 as Exhibit 10(l).)
<PAGE>
<PAGE> - 108 -
10.12 Employment Contract, dated May 22, 1990, between the
Company and Eugene R. McGrath. (Designated in the
Company's Quarterly Report on Form 10-Q for the
quarter ended June 30, 1990 as Exhibit 10.)
10.13 Amendment, dated August 27, 1991, to Employment
Contract dated May 22, 1990, between the Company and
Eugene R. McGrath. (Designated in the Company's
Quarterly Report on Form 10-Q for the Quarter ended
September 30, 1991 as Exhibit 19.)
10.14 Amendment, dated August 25, 1992, to Employment
Contract, dated May 22, 1990, between the Company and
Eugene R. McGrath. (Designated in the Company's
Quarterly Report on Form 10-Q for the Quarter ended
September 30, 1992 as Exhibit 19.)
10.15 Amendment, dated February 18, 1993, to Employment
Contract dated May 22, 1990, between the Company and
Eugene R. McGrath. (Designated in the Company's Annual
Report on Form 10-K for the year ended December 31,
1992 as Exhibit 10(o).)
10.16 Amendment, dated August 24, 1993, to Employment
Contract dated May 22, 1990, between the Company and
Eugene R. McGrath. (Designated in the Company's
Quarterly Report on Form 10-Q for the quarterly
period ended September 30, 1993 as Exhibit 10.1.)
10.17 Agreement, effective March 1, 1989, between Raymond J.
McCann and the Company as to salary and deferred
compensation. (Designated in the Company's Annual
Report on Form 10-K for the year ended December 31,
1992 as Exhibit 10(p).)
10.18 Amendment, dated February 27, 1990, to Agreement,
effective March 1, 1989, between Raymond J. McCann and
the Company. (Designated in the Company's Annual
Report on Form 10-K for the year ended December 31,
1989 as Exhibit 10(w).)
10.19 Amendment, dated November 27, 1990, to Agreement,
effective March 1, 1989, between Raymond J. McCann and
the Company. (Designated in the Company's Annual
Report on Form 10-K for the year ended December 31,
1990 as Exhibit 10(r).)
10.20 Amendment, dated March 11, 1992, to Agreement,
effective March 1, 1989, between Raymond J. McCann and
the Company. (Designated in the Company's Annual
Report on Form 10-K for the year ended December 31,
1991, as Exhibit 10(p).)<PAGE>
<PAGE> - 109 -
10.21 Amendment, dated February 18, 1993, to Agreement,
effective March 1, 1989, between Raymond J. McCann and
the Company. (Designated in the Company's Annual
Report on Form 10-K for the year ended December 31,
1992 as Exhibit 10(t).)
10.22 Amendment, dated March 10, 1993, to Agreement,
effective March 1, 1989, between Raymond J. McCann and
the Company. (Designated in the Company's Annual
Report on Form 10-K for the year ended December 31,
1992 as Exhibit 10(u).)
*10.23 Amendment, dated March 10, 1994, to Agreement,
effective March 1, 1989, between Raymond J. McCann and
the Company.
10.24 The Consolidated Edison Company of New York, Inc.
Executive Incentive Plan adopted by the Company's
Board of Trustees on March 23, 1982 as amended through
March 30, 1989. (Designated in the Company's Annual
Report on Form 10-K for the year ended December 31,
1991, as Exhibit 10(q).)
10.25 Amendment and Restatement, dated August 26, 1991 and
effective as of April 30, 1991, of The Consolidated
Edison Company of New York, Inc. Executive Incentive
Plan. (Designated in the Company's Annual Report on
Form 10-K for the year ended December 31, 1991 as
Exhibit 10(r).)
10.26 Amendment and Restatement, dated January 29, 1992 and
effective as of December 1, 1991, of The Consolidated
Edison Company of New York, Inc. Executive Incentive
Plan. (Designated in the Company's Annual Report on
Form 10-K for the year ended December 31, 1991 as
Exhibit 10(s).)
10.27 Conformed copy of The Consolidated Edison Retirement
Plan for Management Employees, effective January 1,
1983, as amended through August 16, 1990. (Designated
in the Company's Annual Report on Form 10-K for the
year ended December 31, 1991 as Exhibit 10(t).)
10.28 Amendment No. 15, dated April 1, 1992, to the
Consolidated Edison Retirement Plan for Management
Employees. (Designated in the Company's Quarterly
Report on Form 10-Q for the Quarter ended March 31,
1992, as Exhibit 19(b).)
<PAGE>
<PAGE> - 110 -
10.29 Amendment No. 16, dated December 18, 1992, to the
Consolidated Edison Retirement Plan for Management
Employees. (Designated in the Company's Annual
Report on Form 10-K for the year ended December 31,
1992 as Exhibit 10(aa).)
10.30 Amendment No. 17, dated March 1, 1993, to the
Consolidated Edison Retirement Plan for Management
Employees. (Designated in the Company's Annual
Report on Form 10-K for the year ended December 31,
1992 as Exhibit 10(bb).)
10.31 Con Edison Supplemental Retirement Income Plan,
adopted July 22, 1987, effective January 1, 1987.
(Designated in the Company's Annual Report on Form
10-K for the year ended December 31, 1992 as Exhibit
10(cc).)
10.32 Copy of memorandum and resolutions adopted by the
Company's Board of Trustees on August 23, 1983
authorizing additional compensation for certain
officers of the Company and permitting the deferral by
the officers of certain compensation. (Designated in
the Company's Annual Report on Form 10-K for the year
ended December 31, 1992 as Exhibit 10(dd).)
10.33 Consolidated Edison Company of New York, Inc.
Retirement Plan for Trustees, effective as of July 1,
1988. (Designated in the Company's Annual Report on
Form 10-K for the year ended December 31, 1992 as
Exhibit 10(ee).)
10.34 Amendment No. 1, dated September 28, 1990, to the
Consolidated Edison Company of New York, Inc.
Retirement Plan for Trustees. (Designated in the
Company's Quarterly Report on Form 10-Q for the
quarter ended September 30, 1990 as Exhibit 19(c).)
10.35 Planning and Supply Agreement, dated March 10, 1989,
between the Company and the Power Authority of the
State of New York. (Designated in the Company's Annual
Report on Form 10-K for the year ended December 31,
1992 as Exhibit 10(gg).)
10.36 Delivery Service Agreement, dated March 10, 1989,
between the Company and the Power Authority of the
State of New York. (Designated in the Company's Annual
Report on Form 10-K for the year ended December 31,
1992 as Exhibit 10(gg).)
<PAGE>
<PAGE> - 111 -
10.37 Supplemental Medical Plan for the Benefit of the
Company's officers. (Designated in the Company's
Annual Report on Form 10-K for the year ended December
31, 1991, as Exhibit 10(aa).)
10.38 The Con Edison Discount Stock Purchase Plan. (Designated
in the Company's Annual Report on Form 10-K for the
year ended December 31, 1991, as Exhibit 10(bb).)
10.39 Employment Agreement, dated June 25, 1991, between the
Company and J. Michael Evans. (Designated in the
Company's Quarterly Report on Form 10-Q for the
quarter ended June 30, 1991 as Exhibit 19.)
10.40 Amendment, dated March 29, 1993, to Employment
Agreement, dated June 25, 1991, between the Company and
J. Michael Evans. (Designated in the
Company's Quarterly Report on Form 10-Q for the
quarter ended March 31, 1993 as Exhibit 10.)
10.41 Amendment, dated November 8, 1993, to Employment
Agreement, dated June 25, 1991, between the Company and
J. Michael Evans. (Designated in the
Company's Quarterly Report on Form 10-Q for the
quarter ended September 30, 1993 as Exhibit 10.2.)
10.42 The Consolidated Edison Retiree Health Program for
Management Employees, effective as of January 1, 1993.
(Designated in the Company's Annual Report on Form 10-K
for the year ended December 31, 1992 as Exhibit 10(ll).)
*12 Statement of computation of ratio of earnings to fixed
charges for the years ended December 31, 1993, 1992,
1991, 1990 and 1989.
*23 Consent of Price Waterhouse dated March 29, 1994.
*24 Powers of Attorney of each of the persons signing this
report by attorney-in-fact.
Exhibits listed above which have been filed with the
Securities and Exchange Commission pursuant to the Securities Act
of 1933 and the Securities Exchange Act of 1934, and which were
designated as noted above, are hereby incorporated by reference
and made a part of this report with the same effect as if filed
with the report.
____________________
* Filed herewith<PAGE>
<PAGE> - 112 -
(b) Reports on Form 8-K:
During the quarter ended December 31, 1993, the Company
filed a Current Report on Form 8-K, dated December 16, 1993,
reporting (under Item 5) the indictment against the Company
discussed under the caption "Gramercy Park" in Item 3 of this
report.
The Company also filed a Current Report on Form 8-K, dated
February 8, 1994, reporting (under Item 5) the sale of $150
million aggregate principal amount of the Company's 7 1/8%
Debentures, Series 1994 A, due February 15, 2029.
<PAGE>
<PAGE> - 113 -
SIGNATURES
Pursuant to the requirements of Section 13 or 15(d) of the
Securities Exchange Act of 1934, the Registrant has duly caused
this report to be signed on its behalf by the undersigned,
thereunto duly authorized.
CONSOLIDATED EDISON COMPANY OF NEW YORK, INC.
Date: March 29, 1994 By Raymond J. McCann
Raymond J. McCann
Executive Vice President &
Chief Financial Officer
Pursuant to the requirements of the Securities Exchange Act
of 1934, this report has been signed below by the following
persons on behalf of the Registrant and in the capacities and on
the dates indicated.
Date Signature Title
March 29, 1994 Eugene R. McGrath* Chairman of the Board,
President, Chief Executive
Officer and Trustee
(Principal Executive Officer)
March 29, 1994 Raymond J. McCann* Executive Vice President
& Chief Financial Officer
and Trustee
(Principal Financial Officer)
March 29, 1994 Carl W. Greene* Senior Vice President -
Accounting and Treasury
(Principal Accounting Officer)
Gordon J. Davis* Trustee
Arthur Hauspurg* Trustee
Frederick P. Rose* Trustee
Robert G. Schwartz* Trustee
Richard A. Voell* Trustee
Myles V. Whalen, Jr.* Trustee
March 29, 1994 *By Raymond J. McCann Attorney-in-Fact
Raymond J. McCann
<PAGE>
<PAGE>
Amendment No. 6 to
Raymond J. McCann Compensation Agreement
WHEREAS, Raymond J. McCann (the "Employee") and Consolidated
Edison Company of New York, Inc. (the "Company") entered into an
Agreement dated February 28, 1989 (the "Agreement"); and
WHEREAS, paragraph 9 of the Agreement provides that the
Agreement may be amended from time to time by a written
instrument executed by the Company and the Employee;
NOW, THEREFORE, in consideration of the foregoing, the
parties hereto agree as follows:
1. The Agreement is amended, effective February 1, 1994, to
increase the Employee's basic salary set forth in clause (i) of
paragraph 1(A) of the Agreement from $295,000 per annum to
$318,000 per annum, subject to all the terms and conditions set
forth in the Agreement relating to basic salary.
2. In all other respects, the Agreement remains in full
force and effect as amended hereby.
IN WITNESS WHEREOF, the Company has caused this Amendment to
be executed by its duly authorized officer and its Corporate seal
to be fixed hereto, and the Employee has hereto set his hand the
day and year set forth below.
CONSOLIDATED EDISON COMPANY
OF NEW YORK, INC.
By: THOMAS J. GALVIN
Thomas J. Galvin
Senior Vice President
RAYMOND J. MCCANN
Raymond J. McCann
Dated: March 8, 1994
Attest:
Approved by the Board of Trustees
the 23rd day of November, 1993.
ARCHIE M. BANKSTON
Archie M. Bankston
Secretary
<PAGE>
<PAGE>
<TABLE>
CONSOLIDATED EDISON COMPANY OF NEW YORK, INC.
Computation in Support of
Ratio of Earnings to Fixed Charges
Years 1989 to 1993
(Thousands of Dollars)
<CAPTION>
1993 1992 1991 1990 1989
</CAPTION>
<S> <C> <C> <C> <C> <C>
EARNINGS
Net Income $658,522 $604,088 $566,910 $571,493 $606,065
Federal Income Tax 270,800 252,600 209,900 225,600 256,500
Federal Income Tax Deferred 106,470 81,670 94,950 77,460 68,140
Investment Tax Credits Deferred (12,260) (13,800) (13,800) (13,800) (12,580)
Total Earnings Before
Federal Income Tax 1,023,532 924,558 857,960 860,753 918,125
Fixed Charges* 320,554 315,305 314,661 280,053 265,132
Total Earnings Before
Federal Income Tax
and Fixed Charges $1,344,086 $1,239,863 $1,172,621 $1,140,806 $1,183,257
*FIXED CHARGES
Interest on Long-Term Debt $272,781 $270,468 $269,420 $234,058 $214,867
Amortization of Debt Discount,
Premium and Expenses 8,975 3,974 1,941 1,627 1,351
Interest Component of Rentals 19,077 19,175 20,778 22,340 26,265
Other Interest 19,721 21,688 22,522 22,028 22,649
Total Fixed Charges $320,554 $315,305 $314,661 $280,053 $265,132
Ratio of Earnings
to Fixed Charges 4.19 3.93 3.73 4.07 4.46
</TABLE>
<PAGE>
<PAGE>
Consent of Independent Accountants
We hereby consent to the incorporation by reference of our report
dated February 22, 1994, appearing on page 62 of this Annual
Report on Form 10-K in (i) the Prospectus constituting part of
the Registration Statement on Form S-8 (No. 33-15725) relating to
The Consolidated Edison Discount Stock Purchase Plan, (ii) the
Prospectus constituting part of the Registration Statement on
Form S-3 (No. 33-62266) relating to $665 million principal amount
of the Company's unsecured debt securities, and (iii) the
Prospectus constituting part of the Registration Statement on
Form S-3 (No. 33-51157) relating to the Company's Automatic
Dividend Reinvestment and Cash Payment Plan.
PRICE WATERHOUSE
Price Waterhouse
New York, New York
March 29, 1994
<PAGE>
<PAGE>
CONSOLIDATED EDISON COMPANY OF NEW YORK, INC.
POWER OF ATTORNEY
WHEREAS Consolidated Edison Company of New York, Inc., a New York
corporation (the "Company"), intends to file with the Securities
and Exchange Commission, under the Securities Exchange Act of
1934, as amended (the "Act"), its Annual Report on Form 10-K for
the fiscal year ended December 31, 1993 with any and all exhibits
and other documents having relation thereto, as prescribed by the
Securities and Exchange Commission pursuant to the Act and the
rules and regulations of the Securities and Exchange Commission
promulgated thereunder.
NOW, THEREFORE,
KNOW ALL PERSONS BY THESE PRESENTS that the undersigned, in his
or her capacity as a Trustee or Officer or both, as the case may
be, of the Company, does hereby constitute and appoint Raymond J.
McCann, T. Bowring Woodbury, II and Travis F. Epes, and each of
them severally, his or her true and lawful attorneys-in-fact,
with power to act with or without the others and with full power
of substitution and resubstitution, to execute in his or her
name, place and stead, in his or her capacity as a Trustee or
Officer or both, as the case may be, of the Company, said Annual
Report on Form 10-K, and any and all amendments thereto, and all
instruments necessary or incidental in connection therewith, and
to file or cause to be filed the same, with all exhibits thereto
and other documents having relation thereto, with the Securities
and Exchange Commission. Each of said attorneys shall have full
power and authority to do and perform, in the name and on behalf
of the undersigned, in any and all capacities, every act
whatsoever necessary or desirable to be done in the premises, as
fully to all intents and purposes as the undersigned might or
could do in person, the undersigned hereby ratifying and
confirming all that said attorneys-in-fact or any of them, or
their or his substitute or substitutes, may lawfully do or cause
to be done by virtue hereof.
IN WITNESS WHEREOF, the undersigned has executed this instrument
this 28th day of March, 1994.
EUGENE R. MCGRATH
EUGENE R. MCGRATH
<PAGE>
<PAGE>
CONSOLIDATED EDISON COMPANY OF NEW YORK, INC.
POWER OF ATTORNEY
WHEREAS Consolidated Edison Company of New York, Inc., a New York
corporation (the "Company"), intends to file with the Securities
and Exchange Commission, under the Securities Exchange Act of
1934, as amended (the "Act"), its Annual Report on Form 10-K for
the fiscal year ended December 31, 1993 with any and all exhibits
and other documents having relation thereto, as prescribed by the
Securities and Exchange Commission pursuant to the Act and the
rules and regulations of the Securities and Exchange Commission
promulgated thereunder.
NOW, THEREFORE,
KNOW ALL PERSONS BY THESE PRESENTS that the undersigned, in his
or her capacity as a Trustee or Officer or both, as the case may
be, of the Company, does hereby constitute and appoint Raymond J.
McCann, T. Bowring Woodbury, II and Travis F. Epes, and each of
them severally, his or her true and lawful attorneys-in-fact,
with power to act with or without the others and with full power
of substitution and resubstitution, to execute in his or her
name, place and stead, in his or her capacity as a Trustee or
Officer or both, as the case may be, of the Company, said Annual
Report on Form 10-K, and any and all amendments thereto, and all
instruments necessary or incidental in connection therewith, and
to file or cause to be filed the same, with all exhibits thereto
and other documents having relation thereto, with the Securities
and Exchange Commission. Each of said attorneys shall have full
power and authority to do and perform, in the name and on behalf
of the undersigned, in any and all capacities, every act
whatsoever necessary or desirable to be done in the premises, as
fully to all intents and purposes as the undersigned might or
could do in person, the undersigned hereby ratifying and
confirming all that said attorneys-in-fact or any of them, or
their or his substitute or substitutes, may lawfully do or cause
to be done by virtue hereof.
IN WITNESS WHEREOF, the undersigned has executed this instrument
this 23rd day of March, 1994.
RAYMOND J. MCCANN
RAYMOND J. MCCANN
<PAGE>
<PAGE>
CONSOLIDATED EDISON COMPANY OF NEW YORK, INC.
POWER OF ATTORNEY
WHEREAS Consolidated Edison Company of New York, Inc., a New York
corporation (the "Company"), intends to file with the Securities
and Exchange Commission, under the Securities Exchange Act of
1934, as amended (the "Act"), its Annual Report on Form 10-K for
the fiscal year ended December 31, 1993 with any and all exhibits
and other documents having relation thereto, as prescribed by the
Securities and Exchange Commission pursuant to the Act and the
rules and regulations of the Securities and Exchange Commission
promulgated thereunder.
NOW, THEREFORE,
KNOW ALL PERSONS BY THESE PRESENTS that the undersigned, in his
or her capacity as a Trustee or Officer or both, as the case may
be, of the Company, does hereby constitute and appoint Raymond J.
McCann, T. Bowring Woodbury, II and Travis F. Epes, and each of
them severally, his or her true and lawful attorneys-in-fact,
with power to act with or without the others and with full power
of substitution and resubstitution, to execute in his or her
name, place and stead, in his or her capacity as a Trustee or
Officer or both, as the case may be, of the Company, said Annual
Report on Form 10-K, and any and all amendments thereto, and all
instruments necessary or incidental in connection therewith, and
to file or cause to be filed the same, with all exhibits thereto
and other documents having relation thereto, with the Securities
and Exchange Commission. Each of said attorneys shall have full
power and authority to do and perform, in the name and on behalf
of the undersigned, in any and all capacities, every act
whatsoever necessary or desirable to be done in the premises, as
fully to all intents and purposes as the undersigned might or
could do in person, the undersigned hereby ratifying and
confirming all that said attorneys-in-fact or any of them, or
their or his substitute or substitutes, may lawfully do or cause
to be done by virtue hereof.
IN WITNESS WHEREOF, the undersigned has executed this instrument
this 28th day of March, 1994.
CARL W. GREENE
CARL W. GREENE
<PAGE>
<PAGE>
CONSOLIDATED EDISON COMPANY OF NEW YORK, INC.
POWER OF ATTORNEY
WHEREAS Consolidated Edison Company of New York, Inc., a New York
corporation (the "Company"), intends to file with the Securities
and Exchange Commission, under the Securities Exchange Act of
1934, as amended (the "Act"), its Annual Report on Form 10-K for
the fiscal year ended December 31, 1993 with any and all exhibits
and other documents having relation thereto, as prescribed by the
Securities and Exchange Commission pursuant to the Act and the
rules and regulations of the Securities and Exchange Commission
promulgated thereunder.
NOW, THEREFORE,
KNOW ALL PERSONS BY THESE PRESENTS that the undersigned, in his
or her capacity as a Trustee or Officer or both, as the case may
be, of the Company, does hereby constitute and appoint Raymond J.
McCann, T. Bowring Woodbury, II and Travis F. Epes, and each of
them severally, his or her true and lawful attorneys-in-fact,
with power to act with or without the others and with full power
of substitution and resubstitution, to execute in his or her
name, place and stead, in his or her capacity as a Trustee or
Officer or both, as the case may be, of the Company, said Annual
Report on Form 10-K, and any and all amendments thereto, and all
instruments necessary or incidental in connection therewith, and
to file or cause to be filed the same, with all exhibits thereto
and other documents having relation thereto, with the Securities
and Exchange Commission. Each of said attorneys shall have full
power and authority to do and perform, in the name and on behalf
of the undersigned, in any and all capacities, every act
whatsoever necessary or desirable to be done in the premises, as
fully to all intents and purposes as the undersigned might or
could do in person, the undersigned hereby ratifying and
confirming all that said attorneys-in-fact or any of them, or
their or his substitute or substitutes, may lawfully do or cause
to be done by virtue hereof.
IN WITNESS WHEREOF, the undersigned has executed this instrument
this 23rd day of March, 1994.
GORDON J. DAVIS
GORDON J. DAVIS
<PAGE>
<PAGE>
CONSOLIDATED EDISON COMPANY OF NEW YORK, INC.
POWER OF ATTORNEY
WHEREAS Consolidated Edison Company of New York, Inc., a New York
corporation (the "Company"), intends to file with the Securities
and Exchange Commission, under the Securities Exchange Act of
1934, as amended (the "Act"), its Annual Report on Form 10-K for
the fiscal year ended December 31, 1993 with any and all exhibits
and other documents having relation thereto, as prescribed by the
Securities and Exchange Commission pursuant to the Act and the
rules and regulations of the Securities and Exchange Commission
promulgated thereunder.
NOW, THEREFORE,
KNOW ALL PERSONS BY THESE PRESENTS that the undersigned, in his
or her capacity as a Trustee or Officer or both, as the case may
be, of the Company, does hereby constitute and appoint Raymond J.
McCann, T. Bowring Woodbury, II and Travis F. Epes, and each of
them severally, his or her true and lawful attorneys-in-fact,
with power to act with or without the others and with full power
of substitution and resubstitution, to execute in his or her
name, place and stead, in his or her capacity as a Trustee or
Officer or both, as the case may be, of the Company, said Annual
Report on Form 10-K, and any and all amendments thereto, and all
instruments necessary or incidental in connection therewith, and
to file or cause to be filed the same, with all exhibits thereto
and other documents having relation thereto, with the Securities
and Exchange Commission. Each of said attorneys shall have full
power and authority to do and perform, in the name and on behalf
of the undersigned, in any and all capacities, every act
whatsoever necessary or desirable to be done in the premises, as
fully to all intents and purposes as the undersigned might or
could do in person, the undersigned hereby ratifying and
confirming all that said attorneys-in-fact or any of them, or
their or his substitute or substitutes, may lawfully do or cause
to be done by virtue hereof.
IN WITNESS WHEREOF, the undersigned has executed this instrument
this 22nd day of March, 1994.
ARTHUR HAUSPURG
ARTHUR HAUSPURG
<PAGE>
<PAGE>
CONSOLIDATED EDISON COMPANY OF NEW YORK, INC.
POWER OF ATTORNEY
WHEREAS Consolidated Edison Company of New York, Inc., a New York
corporation (the "Company"), intends to file with the Securities
and Exchange Commission, under the Securities Exchange Act of
1934, as amended (the "Act"), its Annual Report on Form 10-K for
the fiscal year ended December 31, 1993 with any and all exhibits
and other documents having relation thereto, as prescribed by the
Securities and Exchange Commission pursuant to the Act and the
rules and regulations of the Securities and Exchange Commission
promulgated thereunder.
NOW, THEREFORE,
KNOW ALL PERSONS BY THESE PRESENTS that the undersigned, in his
or her capacity as a Trustee or Officer or both, as the case may
be, of the Company, does hereby constitute and appoint Raymond J.
McCann, T. Bowring Woodbury, II and Travis F. Epes, and each of
them severally, his or her true and lawful attorneys-in-fact,
with power to act with or without the others and with full power
of substitution and resubstitution, to execute in his or her
name, place and stead, in his or her capacity as a Trustee or
Officer or both, as the case may be, of the Company, said Annual
Report on Form 10-K, and any and all amendments thereto, and all
instruments necessary or incidental in connection therewith, and
to file or cause to be filed the same, with all exhibits thereto
and other documents having relation thereto, with the Securities
and Exchange Commission. Each of said attorneys shall have full
power and authority to do and perform, in the name and on behalf
of the undersigned, in any and all capacities, every act
whatsoever necessary or desirable to be done in the premises, as
fully to all intents and purposes as the undersigned might or
could do in person, the undersigned hereby ratifying and
confirming all that said attorneys-in-fact or any of them, or
their or his substitute or substitutes, may lawfully do or cause
to be done by virtue hereof.
IN WITNESS WHEREOF, the undersigned has executed this instrument
this 24th day of March, 1994.
FREDERICK P. ROSE
FREDERICK P. ROSE
<PAGE>
<PAGE>
CONSOLIDATED EDISON COMPANY OF NEW YORK, INC.
POWER OF ATTORNEY
WHEREAS Consolidated Edison Company of New York, Inc., a New York
corporation (the "Company"), intends to file with the Securities
and Exchange Commission, under the Securities Exchange Act of
1934, as amended (the "Act"), its Annual Report on Form 10-K for
the fiscal year ended December 31, 1993 with any and all exhibits
and other documents having relation thereto, as prescribed by the
Securities and Exchange Commission pursuant to the Act and the
rules and regulations of the Securities and Exchange Commission
promulgated thereunder.
NOW, THEREFORE,
KNOW ALL PERSONS BY THESE PRESENTS that the undersigned, in his
or her capacity as a Trustee or Officer or both, as the case may
be, of the Company, does hereby constitute and appoint Raymond J.
McCann, T. Bowring Woodbury, II and Travis F. Epes, and each of
them severally, his or her true and lawful attorneys-in-fact,
with power to act with or without the others and with full power
of substitution and resubstitution, to execute in his or her
name, place and stead, in his or her capacity as a Trustee or
Officer or both, as the case may be, of the Company, said Annual
Report on Form 10-K, and any and all amendments thereto, and all
instruments necessary or incidental in connection therewith, and
to file or cause to be filed the same, with all exhibits thereto
and other documents having relation thereto, with the Securities
and Exchange Commission. Each of said attorneys shall have full
power and authority to do and perform, in the name and on behalf
of the undersigned, in any and all capacities, every act
whatsoever necessary or desirable to be done in the premises, as
fully to all intents and purposes as the undersigned might or
could do in person, the undersigned hereby ratifying and
confirming all that said attorneys-in-fact or any of them, or
their or his substitute or substitutes, may lawfully do or cause
to be done by virtue hereof.
IN WITNESS WHEREOF, the undersigned has executed this instrument
this 22nd day of March, 1994.
ROBERT G. SCHWARTZ
ROBERT G. SCHWARTZ
<PAGE>
<PAGE>
CONSOLIDATED EDISON COMPANY OF NEW YORK, INC.
POWER OF ATTORNEY
WHEREAS Consolidated Edison Company of New York, Inc., a New York
corporation (the "Company"), intends to file with the Securities
and Exchange Commission, under the Securities Exchange Act of
1934, as amended (the "Act"), its Annual Report on Form 10-K for
the fiscal year ended December 31, 1993 with any and all exhibits
and other documents having relation thereto, as prescribed by the
Securities and Exchange Commission pursuant to the Act and the
rules and regulations of the Securities and Exchange Commission
promulgated thereunder.
NOW, THEREFORE,
KNOW ALL PERSONS BY THESE PRESENTS that the undersigned, in his
or her capacity as a Trustee or Officer or both, as the case may
be, of the Company, does hereby constitute and appoint Raymond J.
McCann, T. Bowring Woodbury, II and Travis F. Epes, and each of
them severally, his or her true and lawful attorneys-in-fact,
with power to act with or without the others and with full power
of substitution and resubstitution, to execute in his or her
name, place and stead, in his or her capacity as a Trustee or
Officer or both, as the case may be, of the Company, said Annual
Report on Form 10-K, and any and all amendments thereto, and all
instruments necessary or incidental in connection therewith, and
to file or cause to be filed the same, with all exhibits thereto
and other documents having relation thereto, with the Securities
and Exchange Commission. Each of said attorneys shall have full
power and authority to do and perform, in the name and on behalf
of the undersigned, in any and all capacities, every act
whatsoever necessary or desirable to be done in the premises, as
fully to all intents and purposes as the undersigned might or
could do in person, the undersigned hereby ratifying and
confirming all that said attorneys-in-fact or any of them, or
their or his substitute or substitutes, may lawfully do or cause
to be done by virtue hereof.
IN WITNESS WHEREOF, the undersigned has executed this instrument
this 22nd day of March, 1994.
RICHARD A. VOELL
RICHARD A. VOELL
<PAGE>
<PAGE>
CONSOLIDATED EDISON COMPANY OF NEW YORK, INC.
POWER OF ATTORNEY
WHEREAS Consolidated Edison Company of New York, Inc., a New York
corporation (the "Company"), intends to file with the Securities
and Exchange Commission, under the Securities Exchange Act of
1934, as amended (the "Act"), its Annual Report on Form 10-K for
the fiscal year ended December 31, 1993 with any and all exhibits
and other documents having relation thereto, as prescribed by the
Securities and Exchange Commission pursuant to the Act and the
rules and regulations of the Securities and Exchange Commission
promulgated thereunder.
NOW, THEREFORE,
KNOW ALL PERSONS BY THESE PRESENTS that the undersigned, in his
or her capacity as a Trustee or Officer or both, as the case may
be, of the Company, does hereby constitute and appoint Raymond J.
McCann, T. Bowring Woodbury, II and Travis F. Epes, and each of
them severally, his or her true and lawful attorneys-in-fact,
with power to act with or without the others and with full power
of substitution and resubstitution, to execute in his or her
name, place and stead, in his or her capacity as a Trustee or
Officer or both, as the case may be, of the Company, said Annual
Report on Form 10-K, and any and all amendments thereto, and all
instruments necessary or incidental in connection therewith, and
to file or cause to be filed the same, with all exhibits thereto
and other documents having relation thereto, with the Securities
and Exchange Commission. Each of said attorneys shall have full
power and authority to do and perform, in the name and on behalf
of the undersigned, in any and all capacities, every act
whatsoever necessary or desirable to be done in the premises, as
fully to all intents and purposes as the undersigned might or
could do in person, the undersigned hereby ratifying and
confirming all that said attorneys-in-fact or any of them, or
their or his substitute or substitutes, may lawfully do or cause
to be done by virtue hereof.
IN WITNESS WHEREOF, the undersigned has executed this instrument
this 23rd day of March, 1994.
MYLES V. WHALEN
MYLES V. WHALEN
