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1
Con Edison, Inc. Berenson & Co.Transmission andDistribution Seminar
New York, NYJanuary 9, 2008
2
Forward-Looking Statements
This presentation contains certain forward-looking statements of future expectations and financial measures not determined in accordance with Generally Accepted Accounting Principles (non-GAAP) financial measures. Actual results might differ materially from those projected in the forward-looking statements because of factors such as those identified in reports the company has filed with the Securities and Exchange Commission.
For more information, contact:
Jan Childress, Director, Investor Relations 1-212-460-6611Ellen Socolow, Manager, Investor Relations 1-212-460-4986
www.conEdison.com
3
Long Tradition, Solid Performance
Con Edison, Inc. Parent Net Loss: $14 million – (2)%
Con Edison of New YorkNet Income: $659 million – 91%
Orange and RocklandNet Income: $39 million – 6%
Con Edison SolutionsNet Income:
$14 million – 2%
Con Edison Energy
Net Income:$0 million – 0%
Con Edison Development
Net Income:$24 million – 3%
Regulated Utilities
Competitive Energy Businesses
Note: For nine months ended September 30, 2007
Note: For nine months ended September 30, 2007
4
Sale of Generating Plants
• Announced December 10, 2007
• 1,706 megawatts sold for $1.477 billion– Located in NH, MA, NJ, and MD
• $572 million pre-tax gain– net of transaction expenses
• $667 million in cash proceeds– net of repayment of project debt, taxes, and transaction
expenses
• Two stage closing expected during first half of 2008
Con Edison Development
5
Regulated Businesses are the Core ofCon Edison, Inc.
• 3.2 million electric customers
• 1.1 million gas customers
• 1,800 steam customers
• 709 MW of regulated generation
Con Edison of New York
• 296,000 electriccustomers
• 126,000 gas customers
Orange and Rockland
6
Composition of Rate Base(as of September 30, 2007)
Rate Base ($ millions)
Orange and Rockland
Pike Gas $ 1Pike Electric $ 9Rockland Electric
(distribution) $ 130(transmission) $ 20
O&R Gas $ 225O&R Electric $ 425
Con Edison of New York
Electric $ 11,310Gas $ 2,340Steam $ 1,360
Total Rate Base $ 15,820
7
Con Edison, Inc. Accounts for 44.5% ofNew York State Electric Peak
• CECONY expects to deliver 41% of NYS 2008 peak consumption
• O&R expects todeliver 3.5% ofNYS 2008 peak consumption
8
New York City Tops All U.S. Cities in Attracting New Residents
Source: Census Bureau
3,849,378 +154,884
2,833,321 -62,700
2,144,491 +172,936
1,512,986 +191,314
1,448,394 -69,156
1,296,682 +136,738
1,232,940 +44,317
929,936 +34,619
New York
Los Angeles
Chicago
Houston
Phoenix
Philadelphia
San Antonio
Dallas
San Jose
1,256,951 +33,535San Diego
10 largest U.S. cities
8,214,426 +205,750
Population as of 2006
Change 2000 – 2006
Con Edison of New York
9
New York City and WestchesterHousing Permits
Con Edison of New York
2004
8,987
Represents New32-Year Record for
New York City
30,000
25,000
20,000
15,000
10,000
5,000
0
Number of New Dwelling Units
2003200220012000199919981997 20062005
35,000
40-year averageof 14,434 forNew York City
Source: U.S. Census Bureau
1,674
New York City Westchester
2007
Total to Date Indicated
30,92731,599 1,0061,364Nov.
31,071Nov.
28,830
Nov.29,935
10
New York City Job Growth By SectorCon Edison of New York
Source: New York State Department of Labor
15,800
10,300
10,100
6,200
5,500
5,200
4,300
1,600
600
Professional and business services
Financial services
Health care
Construction
Trade, transportation, and utilities
Leisure and hospitality
Government
Information
Other services
(2,100)Educational services
2,400Social assistance
For the 12-month period ended November 2007
(5,400)Manufacturing
11
New Development is Helping to Spur Growth in Electric Peak Usage
Con Edison of New York
TRUMP PLACE
NEW YORK TIMES BUILDING
MILLENIUM TOWERS
FLUSHING COMMONS
SILVERCUP WEST111 CENTRAL PARK
NORTH
ATLANTIC YARDS
12
Proliferation of Electric Devices is Driving Higher Usage in Homes
Con Edison of New York
2002 – 2007 2008 – 2012Forecast
650,000
1,000,000
60,000
500,000
900,000
40,000
Growth inPersonal Home Computers
Growth inRoom Air Conditioners
Growth inCentral Air Conditioners
13
New Office Buildings Wired forHigher Consumption
Con Edison of New York
14
New York City Additional Capacity Requirements for 2012 – 2016
New York State Independent System Operator Comprehensive Reliability Plan
300 MWRest of State
500 MWLower Hudson Valley
1,000 MWNew York City
15
Infrastructure Investment
Reliability and Maintenance
57%
Expansion
43%
Con Edison of New York
16
Unparalleled ReliabilityCon Edison of New York
2006 Customer Interruption Rate
0.00
0.160.25
0.50
0.75
1.00
1.25
1.50
1.75
2.00
2.25
0.47
0.600.66 0.68
0.780.89 0.92 0.93
1.07 1.08
1.291.36 1.36
1.42
2.00
Average Rate = 0.85
1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16Con Edison
Major Utilities
Source: Salt River Project – Large City Survey
17
The Electric System
Generating Station(electricity generated at 13.8 to 22.0 kV)
Transformers(voltage stepped up to transmission voltage)
Transmission Substation
Area Substation(voltage stepped down to distribution voltage)
Transformers(voltage stepped down to 480, 208, or 120 V)
Feeders
Connection To Others
Network Customers(residential, commercial, industrial, hospitals, schools, and street and traffic lights)
Radial Customers
Transmission Distribution
Con Edison of New York
18
Under the StreetsWhat is Underground?
Con Edison of New York
19
Network Customersresidential, commercial, industrial, hospitals, schools, and street and traffic lights
Area Substationvoltage is stepped down from transmission for distribution by feeders
Transformersvoltage is stepped down for distribution to residential and commercial customers
Feeders
Con Edison of New York
20
Major Substation Construction Program 1948 – 2017
Con Edison of New York
Planned Construction
1948
1950
1952
1954
1956
1958
1960
1962
1964
1966
1968
1970
1972
1974
1976
1978
1980
1982
1984
1986
1988
1990
1992
1994
1996
1998
2000
2002
2004
2006
2008
2010
2012
2014
2016
Transmission Switching Station
DistributionSubstation
21
Substations Currently Exist In Neighborhoods Throughout The City
Con Edison of New York
22
Power TransformerCon Edison of New York
23
M29 Transmission Line Project
• 9.5-mile, 345-kV line connecting Westchester with upper Manhattan
• Will add 350 MW to New York City’s import capability– Improve the system’s reliability
– Allow increased delivery of lower-cost power to customers
• NYPSC approved Article VII certificate on August 23, 2007
• Received NYPSC approval of Environmental Management and Construction Plan in December 2007
• Expect to be in service by summer 2010
Con Edison of New York
24
Future System: Improve Capital Efficiency andReduce Capital Expenditures• Lower losses and increase utilization
– Use fewer wires and transformers
– Increase utilization of existing assets
Con Edison of New York
• Reduce capital expenditures– Defer construction of new assets
– Reduce total equipment required
25
Regulatory Update
• Gas Rate Plan– Three year plan: October 1, 2007 – September 30, 2010
– Rate increases of $67.5 million in each rate year, 9.7% ROE
• Electric Rate Filing – May 2007– Three year rate plan: April 1, 2008 – March 30, 2011
– Requested $1,207 million rate increase in year one, 11.5% ROE
• Steam Rate Filing – November 2007– Three year plan: October 1, 2008 – September 30, 2011
– Requested $126.6 million rate increase in year one, 11.5% ROE
Con Edison of New York
26
Regulatory Update
• O&R Electric Rate Order– No change in rates effective March 1, 2007, 9.1% ROE
– Increased allowance of $13.1 million for pensions and OPEBs
• O&R Electric Rate Filing – August 2007– Three year rate plan: July 1, 2008 – June 30, 2011
– Requested rate increase of $47.8 million in rate year one, 11.5% ROE
• Rockland Electric– New rates effective April 1, 2007
– Rate increase of $6.4 million in rate year one, 9.75% ROE
Orange and Rockland
27
Key Regulatory Dates
Jan. 8-9, 2008 CECONY – Electric Public statement hearings
Jan. 11, 2008 O&R – Electric Rebuttal testimony
Jan. 15, 2008 CECONY - Steam Procedural conference
Jan. 16,17,22,23, 2008 CECONY – Electric Public statement hearings
Jan. 2008 (anticipated) CECONY – Electric ALJ's recommended decision
Feb. 4-6, 2008 O&R – Electric Hearings
Feb. 29, 2008 O&R – Electric Initial briefs
Mar. 12, 2008 O&R – Electric Reply briefs
Mar. 19, 2008 CECONY – Electric Target date for final order
Apr. 1, 2008 CECONY – Electric New rates go in effect
May 2008 (anticipated) O&R – Electric ALJ's recommended decision
Jun. 30, 2008 O&R – Electric Target date for final order
Jul. 1, 2008 O&R – Electric New rates go in effect
Oct. 1, 2008 CECONY - Steam New rates go in effect
28
Infrastructure Investment is DrivingRate Base Growth
2002
2,200
2,000
1,800
1,600
1,400
1,200
1,000
800
600
400
200
02003 2004 2005 2006 2007 2008 2009 2002
22,000
20,000
18,000
16,000
14,000
12,000
10,000
8,000
6,000
4,000
2,000
02003 2004 2005 2006 2007 2008 2009
CECONY O&R
Regulated Capital Expenditures ($ millions) Regulated Rate Base ($ millions)
29
Solid Balance Sheet(as of September 30, 2007)
Long-TermDebt46.5%$8,004
Capital Structure ($ millions)
Target Equity Ratio 48%–50%
CommonEquity52.3%$8,990
Preferred Stock1.2%$213
• May 2007 – issued 11 million common shares.Net proceeds of $558 million.
• May 2007– redeemed $325 million 7 1/4% CEI PINES.
• August 2007 – issued $525 million in new debt.
• Continued issuances through DRIP andemployee stock plans.
2007
30
A Compelling Dividend Record: 33 Consecutive Years of Dividend Increases
Annualized Dividend 1975 - 2007
$0.50
$1.00
$1.50
$2.00
$2.50
1975
1977
1979
1981
1983
1985
1987
1989
1991
1993
1995
1997
1999
2001
2003
$0.30
$2.32Only utility in S&P 500 with 25 or more consecutive years of dividend increases
2005
2007
$0.00
31
Top Tier Credit Rating and Dividend Yield
1 Nicor AA 4.13 2.03
2 Vectren A 4.27 2.333 NSTAR A 3.83 3.904 Consolidated Edison A- 4.70 13.405 Duke Energy A- 4.29 25.896 Southern A- 4.13 29.577 FPL A- 2.31 28.878 Integrys BBB+ 5.05 3.989 SCANA BBB+ 4.05 5.07
10 Otter Tail BBB+ 3.32 1.0511 PG&E BBB+ 3.07 17.7512 MDU Resources BBB+ 2.15 4.9213 Wisconsin Energy BBB+ 2.03 5.7714 Sempra Energy BBB+ 1.94 16.6815 Constellation Energy BBB+ 1.70 18.48
MarketCap
($ billions)
S&P Senior Unsecured
Credit Rating
DividendYield(%)
Source: SNL Financial and S&P; dividend yield and market cap data as of 12/6/07; credit ratings as of 11/30/07
Note: Includes utilities with market cap greater than $1 billion.
32
Con Edison, Inc. Investment Thesis
T&D FocusedMore than 90% of earnings from growing regulated businesses
+Strong Balance SheetSolid “A”credit rating
High Yield5% yield with 33 consecutive years of dividend increases
Solid Total Return Potential
+ =
33
Appendix
34
Summary of Rate Plans
Con Edison of New York
Electric Apr. 2005 – Yr. 1 – $9.3 b Yr. 1 – $104.6 m Yr. 1 – $128 m $60 m of — 11.4% – 13%: 50/50Mar. 2008 Yr. 2 – $9.6 b Yr. 2 – None Yr. 2 – $173 m annual TCC >13%: 25/75
Yr. 3 – $10.3 b Yr. 3 – $220.4 m**** Yr. 3 – $249 m revenues
Gas Oct. 2007 – Yr. 1 – $2.3 b Yr. 1 – $67.5 m***** Yr. 1 - $2 m $35 m – $50 m 9.7% >10.7%: 50/50Sept. 2010 Yr. 2 – $2.5 b Yr. 2 – $67.5 m Yr. 2 - $0 m of non-firm
Yr. 3 – $2.7 b Yr. 3 – $67.5 m Yr. 3 – $(1) m revenues: 20%> $50 m: 25%
Steam Oct. 2006 – Yr. 1 – $1.3 b — $53 m — 9.8% 11% – 12%: 50/50 Sept. 2008 Yr. 2 – $1.3 b over 2 yrs >12%: 25/75
Orange and Rockland
Electric Mar. 2007 – Yr. 1 – $43.6 b — $(13.1) m — 9.1% —Jun. 2008
Gas Nov. 2006 – Yr. 1 – $235 m Yr. 1 – $6.5 m $(3) m — 9.8% 11% – 12%: 50/50 Oct. 2009 Yr. 2 – $242 m Yr. 2 – $6.5 m over 3 yrs 12% – 14%: 35/65
Yr. 3 – $251 m Yr. 3 – $6.3 m >14%: 0/100
RECO Apr. 2007 – Yr. 1 – $132 m Yr. 1 – $6.4 m $(0.6) m — 9.75% —Mar. 2010 per yr
Effective Rate Rate Amortization Other Authorized Earnings Sharing Terms ***Period Base * Increases ** of Credits Increases ROE (Shareholders/Customers)
(continued)
35
Summary of Rate Plans — Footnotes
* Under Con Edison of New York’s electric rate plan, the company is allowed to accrue a full return on increases in net electric transmission and distribution plant above the levels reflected in rates. For the period from April 1, 2005 through December 31, 2006, actual net transmission and distribution has exceeded the net transmission and distribution reflected in rates by $1 billion. The company accrued revenues of $115 million and $38 million in 2006 and 2005, respectively, to reflect the revenue requirement impact of net transmission and distribution difference. For the nine months ended September 30, 2007, the company recognized $138 million in revenues from this rate mechanism compared with $80 million through September 2006.
** The Orange and Rockland gas rate plan provides for rate increases in base rates of $12 million in the first year, $0.7 million in the second year, and $1.1 million in the third year. To phase in the effect of the increase for customers, the rate plan provides for O&R to accrue revenues for, but defer billing to customers of, $5.5 million of the first rate year increase by establishing a regulatory asset which, together with interest, will be billed to customers in the second and third years. This chart reflects the phase-in of those rate increases.
*** Subject to limitation for cost reconciliations.
**** $60 million accrued to income in rate year two.
***** Includes $14 million for the energy efficiency program administered by NYSERDA.
(continued)
36
Summary of Electric Rate Filing
• Three year rate plan
• Proposed rate increase of $1,207 million, or 11.4%– Proposed rate year 2 increase – $335 million, or 3.2%
– Proposed rate year 3 increase – $390 million, or 3.7%
• ROE requested – 11.5%
• Equity ratio forecast – 48.7%
• True-up reconciliations requested
Con Edison of New York
Rebuttal Testimony
Filing with PSC
Staff Case Briefs Hearings/Recommended
Decision
Brief on Exception
Final Rate Order
New Rates in Effect
Evidentiary Hearings
May 4, 2007
Sept. 7,2007
Sept. 28,2007
October 2007
Nov. – Dec. 2007
January2008
February2008
March2008
April 1, 2008
Possible Settlement Negotiations
37
Major Components of Proposed Rate Increase($ millions)
Impact of current rate plan $ 515Expiring credits – $250Plant additions – $195Pensions, property taxes – $50New deferrals/credits – $20
New and expanded operating programs 284 $ 44 $ 45Public safety, reliability, environmental remediation,interference, other
New infrastructure investments 235 163 204Return on equity 115 – –Depreciation 100 55 57Taxes – 95 93Pension, OPEBs – 5 34Other ( 42 ) ( 27 ) ( 43 )Total $1,207 $ 335 $ 390
Con Edison of New York
Rate Year 3Rate Year 2Rate Year 1
38
Electric Rate BaseCon Edison of New York
For rate years ending$ billions
March 2008*
20
March 2009
March 2010
March 2011
15
10
5
0
10.3
13.314.7
16.3
* Reflected in current rate plan. Rate base on September 30, 2007 was $11.3 billion.
Incremental Investment
Rate Plan/Filing
11.3
39
Summary of Gas Rate Plan
• Three-year rate plan: October 1, 2007 – September 30, 2010
• Base rate increases– RY1 – $67.5 million
– RY2 – $67.5 million
– RY3 – $67.5 million
• Authorized ROE – 9.7%– Earnings sharing threshold – 10.7%
– Based on actual equity ratio – up to 50%
• Continued full recovery of fuel costs
• Revenue decoupling mechanism
• Opportunity to retain 20% of non-firm revenues $35 million – $50 million, 25% above this level
• Reconciliation of average gas utility plant, net of depreciation
• Reconciliation of pension and OPEB costs, property taxes, environmental costs, and interference costs
• Potential penalties of up to $7.5 million (annually) for not meeting certain performance standards
Con Edison of New York
40
Gas Rate BaseCon Edison of New York
For rate years ending$ billions
September 2007*
4
3
2
1
0
2.2 2.32.5
2.7
* Reflected in current rate plan. Rate base on September 30, 2007 was $2.3 billion.
September 2008
September 2009
September 2010