XML 62 R34.htm IDEA: XBRL DOCUMENT v3.25.0.1
Income Tax
 12 Months Ended
Dec. 31, 2024
Income Tax Disclosure [Abstract]  
Income Tax Income Tax
The components of income tax are as follows:
  Con EdisonCECONY
(Millions of Dollars)202420232022202420232022
State
Current$(81)$179$5$(87)$(102)$—
Deferred2236324219246110
Federal
Current(17)176 58(63)(95)170
Deferred198237117246311(23)
Amortization of investment tax credits(5)(111)(6)(1)(2)(2)
Total income tax expense$318$487$498$314$358$255

Reconciliation of the difference between income tax expense and the amount computed by applying the prevailing statutory income tax rate to income before income taxes is as follows:
  Con EdisonCECONY
(% of Pre-tax income)202420232022202420232022
STATUTORY TAX RATE
Federal21 %21 %21 %21 %21 %21 %
Changes in computed taxes resulting from:
State income taxes, net of federal income taxes5 5 6 5 5 5 
Cost of removal1 1 1 1 2 1 
Allowance for uncollectible accounts, net of COVID-19 assistance(1)— — (1)(1)— 
Amortization of excess deferred federal income taxes(10)(6)(9)(10)(8)(10)
Other(1)— (1)(1)(1)(1)
Impacts from the sale of the Clean Energy Businesses:
Changes in state apportionments, net of federal income taxes — (1)6 — — — 
Deferred unamortized ITC recognized on sale of subsidiary— (4)— — — — 
Effective tax rate15 %16 %24 %15 %18 %16 %

The tax effects of temporary differences, which gave rise to deferred tax assets and liabilities, are as follows:
                  Con Edison                CECONY
(Millions of Dollars)2024202320242023
Deferred tax liabilities:
Property basis differences$9,222$8,542$8,632$8,001
Regulatory Assets:
   Energy efficiency and other clean energy programs464351449344
   Environmental remediation costs291310267287
   Legacy meters1164112—
   Other regulatory assets571574510525
Pensions and retiree benefits – asset1,0639181,037894
Operating lease right-of-use asset143154142153
Total deferred tax liabilities$11,870$10,853$11,149$10,204
Deferred tax assets:
   Regulatory liabilities:
      Unrecognized pension and other postretirement costs 296265276244
      Future income tax343427312394
      Other regulatory liabilities909844809744
Tax credits carryforward346270——
Superfund and other environmental costs291314265288
Pensions and retiree benefits – liability154167142153
Corporate alternative minimum tax credit carryforward139—111—
Operating lease liabilities143154142153
Asset retirement obligations127146127146
Equity investments8098——
Loss carryforwards42716—
Valuation allowance(12)(7)——
Other160125140109
Total deferred tax assets$3,018$2,810$2,340$2,231
Net deferred tax liabilities$8,852$8,043$8,809$7,973
Unamortized investment tax credits22261011
Net deferred tax liabilities and unamortized investment tax credits$8,874$8,069$8,819$7,984

At December 31, 2024, Con Edison has $346 million in general business tax credit carryovers (primarily renewable energy tax credits). If unused, these general business tax credit carryovers will begin to expire in 2038. A deferred
tax asset for these tax attribute carryforwards was recorded, and no valuation allowance was provided, as it is more likely than not that the deferred tax asset will be realized.

At December 31, 2024, Con Edison has a deferred tax asset on its New York state net operating loss carryforward of $36 million that will begin to expire, if unused, in 2040. No valuation allowance was provided, as it is more likely than not that the deferred tax asset will be realized.

At December 31, 2024, Con Edison has a deferred tax asset on its New York City net operating loss carryforward of $14 million that will begin to expire, if unused, in 2035. Con Edison increased its valuation allowance by $6 million ($5 million, net of federal tax) resulting in a full valuation allowance against this deferred tax asset as it is not more likely than not that the deferred tax assets will be realized.

In April 2023, the IRS released Revenue Procedure 2023-15, which provides a safe harbor method of accounting that taxpayers may use to determine whether certain expenditures to maintain, repair, replace, or improve natural gas transmission and distribution property must be capitalized as improvements by the taxpayer or deducted for federal income tax purposes in the current tax year. This revenue procedure also provides procedures for taxpayers to obtain automatic consent to change their method of accounting to the safe harbor method of accounting. Con Edison adopted the safe harbor rules on its 2023 federal and state returns and recorded a reduction in its current tax payable and an increase in accumulated deferred tax liabilities of $457 million, $418 million of which is for CECONY and $39 million of which is for O&R, to reflect the cumulative impact of this change in accounting method for the Utilities.
Corporate Alternative Minimum Tax
On August 16, 2022, the Inflation Reduction Act (IRA) was signed into law and implemented a new corporate alternative minimum tax (CAMT) that imposes a 15 percent tax on modified GAAP net income. Pursuant to the IRA, corporations are entitled to a tax credit (minimum tax credit) to the extent the CAMT liability exceeds the regular tax liability. This amount can be carried forward indefinitely and used in future years when regular tax liability exceeds the CAMT liability.

Beginning in 2024, based on the existing statute, the Companies are subject to and report the CAMT in their Consolidated Income Statements, Consolidated Statements of Cash Flows and the Consolidated Balance Sheets. The Companies accrued a CAMT liability of $139 million ($111 million of which is for CECONY) before the application of general business credits, with an offsetting deferred tax asset representing the minimum tax credit carryforward, for the year ended December 31, 2024. The deferred tax asset related to the minimum tax credit carryforward will be realized to the extent the Companies’ consolidated deferred tax liabilities exceed the minimum tax credit carryforward. The Companies’ deferred tax liabilities are expected to exceed the minimum tax credit carryforward for the foreseeable future and thus no valuation allowance is required. The Companies are continuing to assess the impacts of the IRA on their financial statements and will update estimates based on future guidance to be issued by the Department of the Treasury.
Uncertain Tax Positions
Under the accounting rules for income taxes, the Companies are not permitted to recognize the tax benefit attributable to a tax position unless such position is more likely than not to be sustained upon examination by taxing authorities, including resolution of any related appeals and litigation processes, based solely on the technical merits of the position.
A reconciliation of the beginning and ending amounts of unrecognized tax benefits for Con Edison and CECONY follows:
Con EdisonCECONY
(Millions of Dollars)202420232022202420232022
Balance at January 1,$11$23$17$7$8$5
Additions based on tax positions related to the current year483442
Additions based on tax positions of prior years—36—11
Reductions for tax positions of prior years(6)(11)(1)(6)(6)—
Settlements—(12)(2)———
Balance at December 31,$9$11$23$5$7$8

At December 31, 2024, the estimated uncertain tax positions for Con Edison was $9 million ($5 million for CECONY). For the year ended December 31, 2024, Con Edison recognized $4 million of income tax expense related to current year positions and recognized a tax benefit of $3 million related to positions in prior years, both of which were attributed to CECONY. In the fourth quarter of 2024, Con Edison concluded its federal tax examination for its 2022 tax return with no changes and reversed $3 million in uncertain tax positions related to 2022 that reduced its effective tax rate. Con Edison and CECONY reasonably expects to resolve within the next twelve months approximately $1 million of various federal uncertainties due to the expected completion of ongoing tax examinations, of which the entire amount, if recognized, would reduce the Companies’ effective tax rates. The total amount of unrecognized tax benefits, if recognized, that would reduce Con Edison’s effective tax rate is $9 million ($8 million, net of federal taxes) with $5 million attributable to CECONY.

The Companies recognize interest on liabilities for uncertain tax positions in interest expense and would recognize penalties, if any, in operating expenses in the Companies’ consolidated income statements. In 2024, 2023 and 2022, the Companies recognized an immaterial amount of interest expense and no penalties for uncertain tax positions in their consolidated income statements. At December 31, 2024 and December 31, 2023, the Companies recognized an immaterial amount of accrued interest on their consolidated balance sheets.

In February 2024, New York State completed its examination of the Companies' New York State income and franchise tax returns for tax years 2015 through 2021 with no changes.

Con Edison’s federal tax return for 2023 remains under examination. State and local tax returns remain open for examination in New York State for tax years 2022 and 2023, in New Jersey for tax years 2020 through 2023 and in New York City for tax years 2021 through 2023.