Consolidated Edison Files Joint Proposal for CECONY Steam Rates 2026-29

What Happened

• Consolidated Edison, Inc. (CECONY) entered a joint proposal with the New York State Department of Public Service and other parties for a three-year CECONY steam rate plan effective Nov. 1, 2026 through Oct. 31, 2029. The proposal is subject to approval by the New York State Public Service Commission (NYSPSC).
• Key financial terms include proposed base rate changes of $13M (Yr.1), $42M (Yr.2) and $39M (Yr.3) (implemented on a “shaped” billing basis to yield a consistent total bill impact of 3.5% each year, with corresponding shaped base increases of $26.6M, $27.5M and $28.5M). New rates would take effect Nov. 1, 2026; billing will begin once the NYSPSC approves the Joint Proposal and any timing shortfall can be recovered via surcharge.

Key Details

• Capital expenditures: $143M (Yr.1), $127M (Yr.2), $126M (Yr.3).
• Authorized return & capital metrics: authorized return on common equity 9.5%; common equity ratio 48%; after-tax weighted average cost of capital ~7.07% (Yr.1) to 7.19% (Yr.3).
• Other measures: amortizations to income of net regulatory assets $8M per year; negative revenue adjustments (penalties) of $4.3M, $4.5M and $4.7M for Yr.1–3 if performance targets missed; cost of long-term debt ~4.86%→5.10% over the term.
• Reconciliations and protections: mechanisms to reconcile pension/postretirement costs, variable-rate debt, property taxes (subject to an annual surcharge cap ≈0.5% bill impact), municipal infrastructure support, environmental remediation, and certain income tax accounting adjustments (subject to NYSDPS review).

Why It Matters

• For investors, this filing outlines the expected regulated revenue and allowed returns for CECONY’s steam business over 2026–2029, which affects near-term utility revenue and earnings stability if approved. The shaped billing limits annual customer bill impact to ~3.5% while delivering the stated base-rate revenue increases.
• Reconciliation mechanisms reduce exposure to some cost variability (pension, fuel, property taxes subject to caps), but penalty provisions and audit outcomes (e.g., income tax accounting) could affect net results or require refunds. The Joint Proposal remains subject to NYSPSC approval, so final impacts depend on the commission’s decision.