Electricity and Gas Purchase Agreements

12 Months Ended

Dec. 31, 2025

Regulated Operations [Abstract]

Electricity and Gas Purchase Agreements

Regulatory Matters

Rate Plans

The Utilities provide service to New York customers according to the terms of tariffs approved by the NYSPSC. Tariffs for service to customers of Rockland Electric Company (RECO), O&R’s New Jersey regulated utility subsidiary, are approved by the New Jersey Board of Public Utilities (NJBPU). The tariffs include schedules of rates for service that limit the rates charged by the Utilities to amounts that the Utilities recover from their customers costs approved by the regulator, including capital costs, of providing service to customers as defined by the tariff. The tariffs implement rate plans adopted by state utility regulators in rate orders issued at the conclusion of rate proceedings. Pursuant to the Utilities’ rate plans, there generally can be no change to the charges to customers during the respective terms of the rate plans other than specified adjustments provided for in the rate plans. The Utilities’ rate plans each cover specified periods, but rates determined pursuant to a plan generally continue in effect until a new rate plan is approved by the state utility regulator.

Common provisions of the Utilities’ New York rate plans include:

Base Rates are designed to recover core costs of providing electric, gas or steam delivery service such as the costs of constructing, operating and maintaining a service’s system.

Earnings sharing that require the Utilities to defer for customer benefit a portion of earnings over specified rates of return on common equity. There is no symmetric mechanism for earnings below specified rates of return on common equity.

Negative revenue adjustments for failure to meet certain performance standards relating to service, reliability, safety and other matters.

Net utility plant reconciliations that require deferral as a regulatory liability of the revenue requirement impact of the amount, if any, by which actual average net utility plant balances are less than amounts reflected in rates. There is generally no symmetric mechanism if actual average net utility plant balances are more than amounts reflected in rates.

Other revenue adjustments that represent positive revenue adjustments, positive incentives, and earnings adjustments mechanisms for achievement of performance standards related to achievement of clean energy goals, safety and other matters.

Rate base, as reflected in the rate plans, is, in general, the sum of the Utilities’ net plant, working capital and certain regulatory assets less deferred taxes and certain regulatory liabilities. For each rate plan, the NYSPSC uses a forecast of the average rate base for each year that new rates would be in effect (“rate year”).

Recoverable energy costs that allow the Utilities to recover on a current basis the costs for the energy they supply with no mark-up to their full-service customers.

Regulatory reconciliations that reconcile pension and other postretirement benefit costs, environmental remediation costs, property taxes, variable-rate tax-exempt debt and certain other costs (including late payment charges and write-offs of customer accounts receivable balances) to amounts reflected in delivery rates for such costs. In addition, changes in the Utilities' costs not reflected in rates, in excess of certain amounts, resulting from changes in tax or changes in legislation, regulation or related actions, are deferred as a regulatory asset or regulatory liability to be reflected in the Utilities' next rate plan or in a manner to be determined by the NYSPSC. Also, the Utilities generally retain the right to petition for recovery or accounting deferral of extraordinary and material cost increases and provision is sometimes made for the utility to retain a share of cost reductions, for example, property tax refunds.

Revenue decoupling mechanisms that reconcile actual energy delivery revenues to the authorized delivery revenues approved by the NYSPSC. The difference is accrued with interest for refund to, or recovery from customers, as applicable.

Weighted average cost of capital is determined based on the authorized common equity ratio, return on common equity, cost of long-term debt and cost of customer deposits reflected in each rate plan. For each rate plan, the revenues designed to provide the utility a return on invested capital for each rate year are determined by multiplying each utility rate base by its pre–tax weighted average cost of capital. The Utilities’ actual return on common equity will reflect their actual operations for each rate year, and may be more or less than the authorized return on equity reflected in their rate plans (and if more, may be subject to earnings sharing).

Current Rate Cases

In January 2026, the NYSPSC approved the November 2025 Joint Proposal for new electric and gas rate plans for CECONY for the three-year period January 2026 through December 2028 that is summarized in the tables below.

In November 2025, CECONY filed a request with the NYSPSC for a steam rate increase of $66 million, effective November 1, 2026. The filing reflects a return on common equity of 9.9 percent and a common equity ratio of 48 percent. CECONY is requesting the continuation of provisions with respect to recovery from customers of the cost of fuel and purchased steam and the reconciliation of actual expenses allocable to the steam business to the amounts for such expenses reflected in steam rates for pension and other postretirement benefits, and environmental remediation expenses. In addition, the company is requesting full reconciliation for property taxes, municipal infrastructure support costs and long-term debt costs. The filing includes supplemental information regarding steam rate plans for November 2027 through October 2028 and November 2028 through October 2029, which the company is not requesting but would consider through settlement discussions. For purposes of illustration, rate increases of $50 million and $50 million effective November 2027 and 2028, respectively, were calculated based upon an assumed return on common equity of 9.9 percent and a common equity ratio of 48 percent.

The following tables contain a summary of the Utilities’ rate plans:

CECONY – Electric
Effective period	January 2023 – December 2025	January 2026 – December 2028 (m)
Base rate changes	Yr. 1 – $442 million (a) Yr. 2 – $518 million (a) Yr. 3 – $382 million (a)	Yr. 1 – $222 million (c) Yr. 2 – $473 million (c) Yr. 3 – $329 million (c)
Amortizations to income of net regulatory (assets) and liabilities	Yr. 1 – $104 million (b) Yr. 2 – $49 million (b) Yr. 3 – $(205) million (b)	Yr. 1 – $88 million (d) Yr. 2 – $81 million (d) Yr. 3 – $78 million(d)
Other revenue sources	Retention of $75 million of annual transmission congestion revenues. Potential earnings adjustment mechanism incentives for energy efficiency and other potential incentives of up to: Yr. 1 - $70 million Yr. 2 - $75 million Yr. 3 - $79 million In 2023, 2024 and 2025, the company recorded $34 million, $52 million, and $35 million, respectively, primarily related to earnings adjustment mechanism incentives for energy efficiency and vehicle electrification. In 2025, the company recorded positive incentives of $7 million.	Retention of $75 million of annual transmission congestion revenues. Potential earnings adjustment mechanism incentives for energy efficiency and other potential incentives of up to: Yr. 1 - $40 million Yr. 2 - $42 million Yr. 3 - $47 million
Revenue decoupling mechanisms	Continuation of reconciliation of actual to authorized electric delivery revenues. In 2023, 2024 and 2025, the company deferred for recovery from customers $162 million, $164 million, and $83 million of revenues, respectively.	Continuation of reconciliation of actual to authorized electric delivery revenues.
Recoverable energy costs	Continuation of current rate recovery of purchased power and fuel costs.	Continuation of current rate recovery of purchased power and fuel costs.
Negative revenue adjustments	Potential charges if certain performance targets relating to service, reliability, safety and other matters are not met: Yr. 1 - $516 million Yr. 2 - $557 million Yr. 3 - $597 million In 2023, 2024 and 2025, the company did not record any negative revenue adjustments.	Potential charges if certain performance targets relating to service, reliability, safety and other matters are not met: Yr. 1 - $651 million Yr. 2 - $685 million Yr. 3 - $742 million
Regulatory reconciliations	Reconciliation of late payment charges (e) and expenses for uncollectibles, pension and other postretirement benefits, variable-rate debt, major storms, property taxes (f), municipal infrastructure support costs (g), the impact of new laws and environmental site investigation and remediation to amounts reflected in rates (h). In 2023 and 2024, the company deferred $140 million and $52 million of net regulatory liabilities, respectively, and in 2025 the company deferred $287 million of net regulatory assets.	Reconciliation of late payment charges and expenses for uncollectibles (k), expenses for pension and other postretirement benefits, variable-rate debt, major storms, property taxes (j), municipal infrastructure support costs (g), the impact of new laws and environmental site investigation and remediation to amounts reflected in rates (h).

Net utility plant reconciliations	Target levels reflected in rates: Electric average net plant target excluding advanced metering infrastructure (AMI) and Customer Service System (CSS): Yr. 1 - $27,847 million Yr. 2 - $29,884 million Yr. 3 - $31,026 million AMI (i) (l): Yr. 1 - $744 million CSS: Yr. 1 - $11 million In 2023, 2024 and 2025, the company deferred $1 million, $(25) million and $12 million, respectively, as a regulatory asset or regulatory liability, as applicable.	Target levels reflected in rates: Electric average net plant target: Yr. 1 - $33,590 million Yr. 2 - $35,186 million Yr. 3 - $38,624 million
Average rate base	Yr. 1 - $26,095 million Yr. 2 - $27,925 million Yr. 3 - $29,362 million	Yr. 1 - $32,935 million Yr. 2 - $35,149 million Yr. 3 - $39,174 million
Weighted average cost of capital (after-tax)	Yr. 1 – 6.75 percent Yr. 2 – 6.79 percent Yr. 3 – 6.85 percent	Yr. 1 - 6.98 percent Yr. 2 - 7.04 percent Yr. 3 - 7.10 percent
Authorized return on common equity	9.25 percent	9.40 percent
Actual return on common equity (l)	Yr. 1 – 9.46 percent Yr. 2 – 9.21 percent Yr. 3 – 9.36 percent
Earnings sharing	Most earnings above an annual earnings threshold of 9.75 percent are to be applied to reduce regulatory assets for environmental remediation and other costs accumulated in the rate year. In 2023, 2024 and 2025, the company had no earnings sharing above the threshold.	Most earnings above an annual earnings threshold of 9.90 percent are to be applied to reduce regulatory assets for environmental remediation and other costs accumulated in the rate year.
Cost of long-term debt	Yr. 1 – 4.46 percent Yr. 2 – 4.54 percent Yr. 3 – 4.64 percent	Yr. 1 – 4.78 percent Yr. 2 – 4.90 percent Yr. 3 – 5.01 percent
Common equity ratio	48 percent	48 percent

(a)The electric base rate increases shown above were implemented with increases of $457 million in Yr. 1; $457 million in Yr. 2; and $457 million in Yr. 3 in order to levelize the customer bill impact. Base rates reflect recovery by the company of certain costs of its energy efficiency, demonstration projects, non-wire alternative projects (including the Brooklyn Queens demand management program), and off-peak electric vehicle charging programs (Yr. 1 - $244 million; Yr. 2 - $237 million; and Yr. 3 - $281 million) over periods varying between seven and fifteen years, including the overall pre-tax rate of return on such costs.

(b)Amounts reflect amortization of the federal Tax Cuts and Jobs Act of 2017 (TCJA) allocable to CECONY’s electric customers ($256 million) over a two-year period ($128 million in Yr. 1 and Yr. 2), the protected portion of the regulatory liability for excess deferred income taxes allocable to CECONY’s electric customers ($1,512 million) over the remaining lives of the related assets ($34 million in Yr. 1, $63 million in Yr. 2, and $34 million in Yr. 3) and the unprotected portion of the net regulatory liability ($306 million) over two years ($153 million annually). Amounts also reflect amortization of the regulatory asset for deferred MTA power reliability costs ($93 million) over a three-year period ($31 million annually).

(c)The electric base rate increases shown above will be implemented on a shaped bill impact basis resulting in a consistent total bill impact of 2.80% each year with corresponding base rate increases of $234 million in Yr. 1; $410 million in Yr. 2; and $421 million in Yr. 3.

(d)Reflects regulatory liability amortization of $63 million in Yr. 1, $58 million in Yr. 2, and $55 million in Yr. 3; amortization of the protected portion of the regulatory liability for excess deferred income taxes allocable to CECONY’s electric customers of $24 million in Yr. 1, $22 million in Yr. 2, and $22 million in Yr. 3; and amortization of the non-plant portion of the regulatory liability for excess deferred income taxes allocable to CECONY’s electric customers of $1 million in Yr. 1, $1 million in Yr. 2, and $1 million in Yr. 3.

(e)Late payment charges from January 1, 2023 through December 31, 2025 and write-offs of customer accounts receivable balances from January 1, 2020 through December 31, 2025 are reconciled to amounts reflected in rates, with recovery/refund from or to customers via surcharge/surcredit. CECONY's surcharge recoveries for late payment charges and write-offs of accounts receivable balances will, collectively, be subject to separate annual caps for electric and gas that produce no more than a half percent (0.5 percent) total customer bill impact per commodity.

(f)Deferrals for property taxes are limited to 90 percent of the difference from amounts reflected in rates, subject to an annual maximum for the remaining difference of not more than a maximum number of basis points impact on return on common equity of 10.0 basis points, 5.0 basis points and 5.0 basis points for each of Yr. 1, Yr. 2 and Yr. 3, respectively, of the 2023 – 2025 rate plan.

(g)In general, if actual expenses for municipal infrastructure support (other than company labor) are below the amounts reflected in rates, CECONY will defer the difference for credit to customers, and if the actual expenses are above the amount reflected in rates the company will defer for recovery from customers 80 percent of the difference subject to a maximum deferral, subject to certain conditions, of 15 percent of the amount reflected in the rate plans.

(h)In addition, the NYSPSC continues its focused operations audit to investigate CECONY's income tax accounting. Any NYSPSC ordered adjustment to CECONY’s income tax accounting is expected to be refunded to or collected from customers, as determined by the NYSPSC. See “Other Regulatory Matters,” below.

(i)Reconciliation of net utility plant for AMI will be done on a combined basis for electric and gas.

(j)If the level of actual expense for property taxes, excluding the effect of property tax refunds, varies in any rate year from the projected level provided in rates, the full amount of the variation will be recovered from or credited to customers via surcharge/surcredit.

(k)During the rate plan, CECONY will calculate the annual difference between (i) its actual uncollectible expenses and late payment charges and (ii) the levels of uncollectible expenses and late payment charges provided in rates. In the event the actual net expenses (late payment charge revenues minus uncollectible expenses) are below the amounts in rates, CECONY will defer the full variance as a regulatory liability and refund to customers via surcredit. In the event the actual net expenses are above the amounts in rates, CECONY will defer the full annual variance above $8.5 million in Yr. 1; $12.75 million in Yr. 2; and $17 million in Yr. 3; as a regulatory asset for recovery via surcharge.

(l)Calculated in accordance with the earnings calculation method prescribed in the rate order.

(m)In January 2026, the NYSPSC approved the November 2025 Joint Proposal for new electric and gas rate plans for CECONY for the three-year period January 2026 through December 2028.

CECONY – Gas
Effective period	January 2023 – December 2025	January 2026 – December 2028 (p)
Base rate changes	Yr. 1 – $217 million (a) Yr. 2 – $173 million (a) Yr. 3 – $122 million (a)	Yr. 1 – $(46) million (c) Yr. 2 – $170 million (c) Yr. 3 – $93 million (c)
Amortizations to income of net regulatory (assets) and liabilities	Yr. 1 – $31 million (b) Yr. 2 – $24 million (b) Yr. 3 – $(11) million (b)	Yr. 1 – $90 million (d) Yr. 2 – $88 million (d) Yr. 3 – $86 million (d)
Other revenue sources	Retention of annual revenues from non-firm customers of up to $65 million and 15 percent of any such revenues above $65 million. Potential earnings adjusted mechanism incentives for energy efficiency and other potential incentives of up to: Yr. 1 – $18 million Yr. 2 – $20 million Yr. 3 – $21 million In 2023, 2024 and 2025, the company recorded $5 million, $7 million and $4 million of earnings adjustment mechanism incentives for energy efficiency and vehicle electrification, respectively. In 2023, 2024 and 2025, the company recorded positive incentives of $3 million, $3 million and $8 million, respectively.	Retention of annual revenues from non-firm customers of up to $65 million and 15 percent of any such revenues above $65 million.
Revenue decoupling mechanism	Continuation of reconciliation of actual to authorized gas delivery revenues, modified to be calculated based upon revenue per customer class instead of revenue per customer. In 2023, 2024 and 2025, the company deferred for recovery from customers $162 million, $93 million and $131.5 million of revenues, respectively.	Continuation of reconciliation of actual to authorized gas delivery revenues calculated based upon revenue per customer class.
Recoverable energy costs	Continuation of current rate recovery of purchased gas costs.	Continuation of current rate recovery of purchased gas costs.
Negative revenue adjustments	Potential charges if performance targets relating to service, safety and other matters are not met: Yr. 1 – $107 million Yr. 2 – $119 million Yr. 3 – $130 million In 2023, 2024 and 2025, the company recorded negative revenue adjustments of $3 million, $2 million and $7 million, respectively.	Potential charges if performance targets relating to service, safety and other matters are not met: Yr. 1 - $135 million (k) (l) Yr. 2 - $143 million (k) (l) Yr. 3 - $152 million (k) (l)
Regulatory reconciliations	Reconciliation of late payment charges and expenses for uncollectibles (e), pension and other postretirement benefits, variable-rate debt, major storms, property taxes (f), municipal infrastructure support costs (g), the impact of new laws and environmental site investigation and remediation to amounts reflected in rates (h). In 2023, 2024 and 2025, the company deferred $12 million, $29 million and $1 million of net regulatory liabilities, respectively.	Reconciliation of late payment charges and expenses for uncollectibles (m), expenses for pension and other postretirement benefits, variable-rate debt, property taxes (j), municipal infrastructure support costs (n), the impact of new laws and environmental site investigation and remediation to amounts reflected in rates (o).
Net utility plant reconciliations	Target levels reflected in rates: Gas average net plant target excluding AMI and CSS for Yr. 1: Yr. 1 – $10,466 million Yr. 2 – $11,442 million Yr. 3 – $12,142 million AMI (i): Yr. 1 – $234 million CSS: Yr. 1 - $2 million In 2023, 2024 and 2025, the company deferred $15.5 million, $31.5 million and $49.2 million, as regulatory liabilities, respectively.	Target levels reflected in rates: Gas average net plant target: Yr. 1 - $12,931 million Yr. 2 - $13,472 million Yr. 3 - $14,014 million
Average rate base	Yr. 1 – $9,647 million Yr. 2 – $10,428 million Yr. 3 – $11,063 million	Yr. 1 - $11,485 million Yr. 2 - $12,050 million Yr. 3 - $12,615 million

Weighted average cost of capital (after-tax)	Yr. 1 – 6.75 percent Yr. 2 – 6.79 percent Yr. 3 – 6.85 percent	Yr. 1 – 6.98 percent Yr. 2 – 7.04 percent Yr. 3 – 7.10 percent
Authorized return on common equity	9.25 percent	9.40 percent
Actual return on common equity (e) (k)	Yr. 1 – 9.00 percent Yr. 2 – 9.82 percent Yr. 3 – 9.45 percent
Earnings sharing	Most earnings above an annual earnings threshold of 9.75 percent are to be applied to reduce regulatory assets for environmental remediation and other costs accumulated in the rate year. In 2023, the company had no earnings above the threshold. In 2024, the company had $4.3 million, above the threshold. In 2025, the company had no earnings above the threshold.	Most earnings above an annual earnings threshold of 9.90 percent are to be applied to reduce regulatory assets for environmental remediation and other costs accumulated in the rate year.
Cost of long-term debt	Yr. 1 – 4.46 percent Yr. 2 – 4.54 percent Yr. 3 – 4.64 percent	Yr. 1 – 4.78 percent Yr. 2 – 4.90 percent Yr. 3 – 5.01 percent
Common equity ratio	48 percent	48 percent

(a)The gas base rate increases shown above were implemented with increases of $187 million in Yr. 1; $187 million in Yr. 2; and $187 million in Yr. 3 in order to levelize the customer bill impact. New rates were effective as of January 1, 2023. CECONY began billing customers at the new levelized rate in August 2023. The shortfall in revenues due to the timing of billing to customers ($99 million) were collected through a surcharge billed through 2025, including a carrying charge on the outstanding balance. Base rates reflect recovery by the company of certain costs of its energy efficiency programs (Yr. 1 - $45 million; Yr. 2 - $78 million; and Yr. 3 - $62 million) over a fifteen-year period, including the overall pre-tax rate of return on such costs.

(b)Amounts reflect amortization of the TCJA allocable to CECONY’s gas customers ($32 million) over a two-year period ($16 million in Yr. 1 and Yr. 2), the protected portion of the regulatory liability for excess deferred income taxes allocable to CECONY’s gas customers ($679 million) over the remaining lives of the related assets ($9 million in Yr. 1, $10 million in Yr. 2, and $10 million in Yr. 3) and the unprotected portion of the net regulatory liability ($42 million) over two years ($21 million annually).

(c)The gas base rate changes shown above will be implemented on a shaped bill impact basis resulting in a consistent total bill impact of 2.01% each year with corresponding base rate increases of $28 million in Yr. 1; $69 million in Yr. 2; and $70 million in Yr. 3.

(d)Reflects regulatory liability amortization of $48 million in Yr. 1, $46 million in Yr. 2, and $45 million in Yr. 3; amortization of the protected portion of the regulatory liability for excess deferred income taxes allocable to CECONY’s gas customers of $6 million in Yr. 1, $6 million in Yr. 2, and $5 million in Yr. 3; and amortization of the unprotected portion of the regulatory liability for excess deferred income taxes allocable to CECONY’s gas customers of $36 million in Yr. 1, $36 million in Yr. 2, and $36 million in Yr. 3.

(e)-(j) See footnotes (e) - (j) to the table under “CECONY Electric,” above.

(k)$33.33 million in annual gas revenue requirement ($100 million over three years) will be recovered through a rate adjustment mechanism, subject to refund to customers relating to NYSDPS's review of CECONY's gas main welds. See "Other Regulatory Matters," below.

(l)The rate plan includes the potential for CECONY to earn Offsetting Credit Adjustments (OCAs) to offset any gas negative revenue adjustments. OCAs may only be applied in the calendar year they are earned. Potential OCAs that may be earned are $12 million in Yr. 1, $13 million in Yr. 2, and $14 million in Yr. 3.

(m)During the rate plan, CECONY will calculate the annual difference between (i) its actual uncollectible expenses and late payment charges and (ii) the levels of uncollectible expenses and late payment charges provided in rates. In the event the actual net expenses (late payment charge revenues minus uncollectible expenses) are below the amounts in rates, CECONY will defer the full variance as a regulatory liability and refund to customers via surcredit. In the event the actual net expenses are above the amounts in rates, CECONY will defer the full annual variance above $1.5 million in Yr. 1; $2.25 million in Yr. 2; and $3 million in Yr. 3; as a regulatory asset for recovery via surcharge.

(n)In general, if actual expenses for municipal infrastructure support (other than company labor) are below the amounts reflected in rates CECONY will defer the difference for credit to customers, and if the actual expenses are above the amounts reflected in rates the company will defer for recovery from customers 80 percent of the difference subject to a maximum deferral, subject to certain conditions, of 15 percent of the amount reflected in the rate plans.

(o)In addition, the NYSDPS continues its focused operations audit to investigate CECONY's income tax accounting. Any NYSPSC ordered adjustment to CECONY’s income tax accounting is expected to be refunded to or collected from customers, as determined by the NYSPSC. See "Other Regulatory Matters," below.

(p)In January 2026, the NYSPSC approved the November 2025 Joint Proposal for new electric and gas rate plans for CECONY for the three-year period January 2026 through December 2028.

CECONY – Steam
Effective period	January 2014 – December 2016 (g)	November 2023 – October 2026
Base rate changes	Yr. 1 – $(22.4) million (h) Yr. 2 –$19.8 million (h) Yr. 3 –$20.3 million(h) Yr. 4 – None Yr. 5 – None Yr. 6 – None Yr. 7 – None Yr. 8 – None Yr. 9 – None Yr.10 – None	Yr. 1 – $110 million (a) Yr. 2 – $44 million (a) Yr. 3 – $45 million (a)
Amortizations to income of net regulatory (assets) and liabilities	$37 million over three years	Yr. 1 – $15 million (b) Yr. 2 – $3 million (b) Yr. 3 – $3 million (b)
Weather Normalization Adjustment		Implementation of a weather normalization adjustment to reflect normal weather conditions during the heating season.
Recoverable energy costs	Current rate recovery of purchased power and fuel costs.	Continuation of current rate recovery of purchased power and fuel costs.
Negative revenue adjustments	Potential charges (up to $1 million annually) if certain performance targets are not met. The company did not record any negative revenue adjustments under this rate plan.	Potential charges if certain performance targets relating to service, reliability, safety and other matters are not met: Yr. 1 - $3.7 million  Yr. 2 - $3.8 million Yr. 3 - $3.8 million In Yr. 1 and Yr. 2, the company did not record any negative revenue adjustments.
Regulatory reconciliations (i) (j)	In 2014, 2015, 2016, 2017, 2018, 2019, 2020, 2021, 2022 and 2023, the company deferred $42 million of net regulatory liabilities, $17 million of net regulatory assets, $8 million and $14 million of net regulatory liabilities, $1 million of net regulatory assets, $8 million of net regulatory liabilities, $35 million of net regulatory assets, $32 million of net regulatory assets, $11 million of net regulatory assets and $18 million of net regulatory liabilities, respectively.	Reconciliation of uncollectible expenses and late payment charges (c) and expenses for pension and other postretirement benefits, variable-rate debt, property taxes (d), municipal infrastructure support costs (e), the impact of new laws and environmental site investigation and remediation to amounts reflected in rates. (f) In Yr. 1, the company deferred $7 million of net regulatory assets and in Yr. 2 the company deferred $33 million of net regulatory liabilities.
Net utility plant reconciliations	Target levels reflected in rates were: Production: Yr. 1 – $1,752 million Yr. 2 – $1,732 million Yr. 3 – $1,720 million Distribution: Yr. 1 – $6 million Yr. 2 – $11 million Yr. 3 – $25 million The company reduced its regulatory liability by $0.1 million in 2014 and immaterial amounts in 2015 and 2016 and no deferrals were recorded in 2017, 2018, 2019. In 2020 and 2021, the company deferred $2 million and $1 million as a regulatory liability, respectively. In 2022, the company deferred $0.1 million as a regulatory asset. No deferral was recorded in 2023.	Yr. 1 - $2,025 million Yr. 2 - $2,029 million Yr. 3 - $2,015 million In Yr. 1 and Yr. 2, the company deferred $2.4 million and $4 million as a regulatory liability, respectively.
Average rate base	Yr. 1 – $1,511 million Yr. 2 – $1,547 million Yr. 3 – $1,604 million	Yr. 1 - $1,799 million Yr. 2 - $1,848 million Yr. 3 - $1,882 million
Weighted average cost of capital (after-tax)	Yr. 1 – 7.10 percent Yr. 2 – 7.13 percent Yr. 3 – 7.21 percent	Yr. 1 - 6.78 percent Yr. 2 - 6.81 percent Yr. 3 - 6.83 percent
Authorized return on common equity	9.3 percent	9.25 percent

Actual return on common equity (j)	Yr. 1 – 9.82 percent Yr. 2 – 10.88 percent Yr. 3 – 10.54 percent Yr. 4 – 9.51 percent Yr. 5 – 11.73 percent Yr. 6 – 10.45 percent Yr. 7 – 7.91 percent Yr. 8 – 5.99 percent Yr. 9 - 5.72 percent Yr. 10 - (0.10) percent .	Yr. 1 – 6.55 percent Yr. 2 – 7.09 percent
Earnings sharing	Weather normalized earnings above an annual earnings threshold of 9.9 percent are to be applied to reduce regulatory assets for environmental remediation and other costs. In 2014, the company had no earnings above the threshold. Actual earnings were $11.5 million and $7.8 million above the threshold in 2015 and 2016, respectively. In 2017, actual earnings were $8.5 million above the threshold, offset in part by a positive adjustment related to 2016 of $4 million. In 2018, actual earnings were $16.5 million above the threshold, and an additional $1.1 million related to 2017 was recorded. In 2019 actual earnings were $5 million above the threshold, offset in part by an adjustment related to 2018 of $2.3 million. In 2020, 2021, 2022 and 2023, the company had no earnings sharing above the threshold. Reserve adjustments of $0.4 million and $0.2 million were recorded in 2021 related to potential adjustment to the excess earnings sharing amounts for 2016 and 2018, respectively.	Most earnings above an annual earnings threshold of 9.75 percent are to be applied to reduce regulatory assets for environmental remediation and other costs accumulated in the rate year. There were no earnings above the threshold in Yr. 1 and Yr. 2.
Cost of long-term debt	Yr. 1 – 5.17 percent Yr. 2 – 5.23 percent Yr. 3 – 5.39 percent	Yr. 1 – 4.51 percent Yr. 2 – 4.58 percent Yr. 3 – 4.62 percent
Common equity ratio	48 percent	48 percent

(a)The base rate increases will be implemented with increases of $77.8 million in Yr. 1; $77.8 million in Yr. 2; and $77.8 million in Yr. 3 to levelize the customer bill impact. New rates were effective as of November 1, 2023. CECONY began billing customers at the new levelized rate in December 2023.

(b)Amounts reflect amortization of the tax savings under the TCJA for the unprotected portion of the regulatory liability for excess deferred income taxes allocable to CECONY’s steam customers (the entire $24 million in Yr.1), the protected portion of the regulatory liability for excess deferred income taxes allocable to CECONY’s steam customers over the remaining lives of the related assets ($3 million in Yr. 1; $5 million in Yr. 2; and $6 million in Yr. 3) and the non-plant portion of the regulatory asset for deficient deferred income taxes allocable to CECONY’s steam customers (the entire $11 million in Yr.1).

(c)CECONY will defer the difference between its actual write-offs of uncollectible expenses and late payment fees (from January 1, 2020 through October 31, 2026) to amounts reflected in rates, with recovery/refund from or to customers via surcharge/sur-credit. Surcharge recoveries for write-offs of uncollectible expenses and late payment fees will each be subject to an annual cap that produces no more than a half percent (0.5 percent) total customer bill impact (estimated to be $2.5 million, $3.0 million, $3.5 million for Yr. 1, Yr. 2 and Yr. 3, respectively). Amounts in excess of the annual surcharge cap in a specific year may be rolled forward for recovery and will count towards the following year’s surcharge cap. Amounts in excess of the surcharge cap will be deferred as a regulatory asset for recovery in CECONY’s next steam base rate case.

(d)Deferrals for property taxes are limited to 90 percent of the difference from amounts reflected in rates, subject to an annual maximum for the remaining difference of not more than a maximum number of basis points impact on return on common equity (Yr. 1 – 10.0 basis points; Yr. 2 – 7.5 basis points; and Yr. 3 – 5.0 basis points), with recovery/refund from or to customers via surcharge/sur-credit. Surcharge recoveries will be subject to an annual cap that produces no more than a half percent (0.5 percent) total customer bill impact (estimated to be $2.5 million, $3.0 million, $3.5 million for Yr. 1, Yr. 2 and Yr. 3, respectively). Amounts in excess of the annual surcharge cap in a specific year may be rolled forward for recovery and will count towards the following year’s surcharge cap. Amounts in excess of the surcharge cap will be deferred as a regulatory asset for recovery in CECONY’s next steam base rate case.

(e)In general, if actual expenses for municipal infrastructure support (other than company labor) are below the amounts reflected in rates, CECONY will defer the difference for credit to customers, and if the actual expenses are above the amount reflected in rates, CECONY will defer for recovery from customers 80 percent of the difference subject to a maximum deferral, subject to certain conditions, of 30 percent of the amount reflected in the rate plan.

(f)In addition, the NYSPSC continues its focused operations audit to investigate CECONY's financial accounting for income taxes. Any NYSPSC ordered adjustment to CECONY’s financial accounting for income taxes is expected to be refunded to or collected from customers, as determined by the NYSPSC. See "Other Regulatory Matters," below.

(g)Rates determined pursuant to this rate plan were in effect until October 31, 2023. 2023 or Yr. 10 represents a partial year commencing January 1, 2023 through October 31, 2023.

(h)The impact of these base rate changes was deferred which resulted in an $8 million regulatory liability at December 31, 2016.

(i)Deferrals for property taxes are limited to 90 percent of the difference from amounts reflected in rates, subject to an annual maximum for the remaining difference of not more than a 10 basis point impact on return on common equity.

(j)Calculated in accordance with the earnings calculation method prescribed in the rate order.

O&R New York – Electric
Effective period	January 2022 – December 2024	January 2025 – December 2027
Base rate changes	Yr. 1 – $4.9 million (a) Yr. 2 – $16.2 million (a) Yr. 3 – $23.1 million (a)	Yr. 1 – $(13.1) million (b) Yr. 2 – $24.8 million (b) Yr. 3 – $44.1 million (b)
Amortizations to income of net regulatory (assets) and liabilities	Yr. 1 – $11.8 million (c) Yr. 2 – $13.5 million (c) Yr. 3 – $15.2 million (c)	Yr. 1 – $(4.5) million Yr. 2 – $(5.4) million Yr. 3 – $(6.4) million
Other revenue sources	Potential earnings adjustment mechanism incentives for energy efficiency and other potential incentives of up to: Yr. 1 – $3.3 million Yr. 2 – $2.3 million Yr. 3 – $4.0 million In 2022, 2023 and 2024, the company recorded $2.7 million, $1.5 million and $2.6 million of earnings adjustment mechanism incentives for energy efficiency, respectively.	Potential earnings adjustment mechanism incentives for energy efficiency and other potential incentives of up to: Yr. 1 – $3.9 million Yr. 2 – $4.7 million Yr. 3 – $5.8 million In 2025, the company recorded $0.8 million of earnings adjustment mechanism incentives for energy efficiency.
Revenue decoupling mechanisms	Continuation of reconciliation of actual to authorized electric delivery revenues. In 2022 and 2023, the company deferred $6.9 million and $3.4 million as regulatory assets, respectively. In 2024, the company deferred $18.6 million as regulatory liabilities.	Continuation of reconciliation of actual to authorized electric delivery revenues. In 2025, the company deferred $(11.3) million as regulatory liabilities.
Recoverable energy costs	Continuation of current rate recovery of purchased power and fuel costs.	Continuation of current rate recovery of purchased power and fuel costs.
Negative revenue adjustments	Potential charges if certain performance targets relating to service, reliability and other matters are not met: Yr. 1 - $4.3 million Yr. 2 - $4.4 million Yr. 3 - $5.1 million In 2022, 2023 and 2024, the company did not record any negative revenue adjustments.	Potential charges if certain performance targets relating to service, reliability, safety and other matters are not met: Yr. 1 – $7.6 million Yr. 2 – $8.5 million Yr. 3 – $11.5 million In 2025, the company did not record any negative revenue adjustments.
Regulatory reconciliations	Reconciliation of late payment charges (d) and reconciliation of expenses for pension and other postretirement benefits, environmental remediation costs, property taxes (e), energy efficiency program (f), major storms, uncollectible expenses and certain other costs to amounts reflected in rates (g). In 2022 and 2023, the company deferred $9.4 million and $15.4 million as net regulatory liabilities, respectively. In 2024, the company deferred $10.2 million as net regulatory assets.	Reconciliation of expenses for pension and other postretirement benefits, environmental remediation costs, property taxes (e), energy efficiency program (h), major storms, low-income bill credits, uncollectible expenses (i), late payment charges (i), and certain other costs to amounts reflected in rates. In 2025, the company deferred $8.9 million as net regulatory assets.
Net utility plant reconciliations	Target levels reflected in rates: Electric average net plant target Yr. 1 - $1,175 million Yr. 2 - $1,198 million Yr. 3 - $1,304 million The company did not record any regulatory liabilities in 2022, 2023 and 2024.	Target levels reflected in rates: Electric average net plant target Yr. 1 – $1,398 million Yr. 2 – $1,471 million Yr. 3 – $1,737 million The company did not record any regulatory liabilities in 2025.
Average rate base	Yr. 1 – $1,021 million Yr. 2 – $1,044 million Yr. 3 – $1,144 million	Yr. 1 – $1,293 million Yr. 2 – $1,393 million Yr. 3 – $1,646 million
Weighted average cost of capital (after-tax)	Yr. 1 – 6.77 percent Yr. 2 – 6.73 percent Yr. 3 – 6.72 percent	Yr. 1 – 7.25 percent Yr. 2 – 7.28 percent Yr. 3 – 7.31 percent
Authorized return on common equity	9.2 percent	9.75 percent
Actual return on common equity (k)	Yr. 1 – 8.96 percent Yr. 2 – 8.73 percent Yr. 3 – 9.86 percent	Yr. 1 – 8.98 percent

Earnings sharing	Most earnings above an annual earnings threshold of 9.7 percent are to be applied to reduce regulatory assets for environmental remediation and other costs accumulated in the rate year. In 2022 and 2023, earnings did not exceed the earnings threshold. In 2024, actual earnings were $1.2 million above the threshold.	Most earnings above an annual earnings threshold of 10.25 percent are to be applied to reduce regulatory assets for environmental remediation and other costs accumulated in the rate year. In 2025, the company had no earnings above the threshold.
Cost of long-term debt	Yr. 1 – 4.58 percent Yr. 2 – 4.51 percent Yr. 3 – 4.49 percent	Yr. 1 – 4.95 percent Yr. 2 – 5.01 percent Yr. 3 – 5.08 percent
Common equity ratio	48 percent	48 percent

a.The base rate changes will be implemented with increases of: Yr. 1 - $11.7 million; Yr. 2 - $11.7 million; and Yr. 3 - $11.7 million.

b.The base rate changes will be implemented with no change in Yr. 1 and increases of $17.7 million in each of Yr. 2 and Yr. 3.

c.Reflects amortization of, among other things, previously incurred incremental deferred storm costs over a five-year period.

d.The rate plan includes certain COVID-19 provisions, such as: recovery of 2020 late payment charges over three years ($2.2 million); reconciliation of late payment charges to amounts reflected in rates for years 2021 through 2024, with full recovery/refund via surcharge/sur-credit once the annual variance equals or exceeds 5 basis points of return on equity; and reconciliation of write-offs of customer accounts receivable balances to amounts reflected in rates from January 1, 2020 through December 31, 2024, with full recovery/refund via surcharge/sur-credit once the annual variance equals or exceeds 5 basis points of return on equity.

e.Deferrals for property taxes are limited to 90 percent of the difference from amounts reflected in rates, subject to an annual maximum for the remaining difference of not more than a maximum number of basis points impact on return on common equity: Yr. 1 - 10.0 basis points; Yr. 2 - 7.5 basis points; and Yr. 3 - 5.0 basis points.

f.Energy efficiency costs are expensed as incurred. Such costs are subject to a cumulative reconciliation that is evenly distributed over the term of the rate plan subject to the caps set forth in the January 2020 NYSPSC New Efficiency New York (“NENY”) order. If the NYSPSC modifies O&R's NENY budgets during the rate term, such modifications will be reflected at the time of the cumulative reconciliations.

g.In addition, the New York State Department of Public Service (NYSDPS) continues its focused operations audit to investigate O&R’s financial accounting for income taxes. Any NYSPSC ordered adjustment to O&R’s financial accounting for income taxes is expected to be refunded to or collected from customers, as determined by the NYSPSC. See "Other Regulatory Matters," below.

h.Energy efficiency costs are deferred as regulatory assets and amortized over a 15-year period. Balances are reconciled to the revenue requirement effect of actual level of cost incurred to the rate plan targets. If the NYSPSC authorizes modified energy efficiency spending budgets over the course of the rate plan, O&R will defer the impact of any variance between the level in rates and the authorized budgets for collection or refund to customers in the next base rate case.

i.Reconciliation of uncollectible expenses and late payment charges are subject to a combined annual threshold of $0.9 million. Once the threshold is met, O&R will defer the variance between actual uncollectible expense and late payment charge, and the level set forth in rates that is above the threshold. Recovery/refunds will be made via surcharge/sur-credit. Surcharge recovery is subject to an annual cap that produces no more than a 0.5 percent total customer bill impact.

j.Calculated in accordance with the earnings calculation method prescribed in the rate order.

O&R New York – Gas
Effective period	January 2022 – December 2024	January 2025 – December 2027
Base rate changes	Yr. 1 – $0.7 million (a) Yr. 2 – $7.4 million (a) Yr. 3 – $9.9 million (a)	Yr. 1 – $3.6 million (b) Yr. 2 – $18.0 million (b) Yr. 3 – $16.5 million (b)
Amortization to income of net regulatory (assets) and liabilities	Yr. 1 – $0.8 million Yr. 2 – $0.7 million Yr. 3 – $0.3 million	Yr. 1 – $8.4 million Yr. 2 – $8.2 million Yr. 3 – $8.0 million
Other revenue sources	Potential earnings adjustment mechanism incentives for energy efficiency and other potential incentives of up to: Yr. 1 - $0.2 million Yr. 2 - $0.2 million Yr. 3 - $0.4 million Potential positive rate adjustment for gas safety and performance of up to: Yr. 1 – $1.2 million Yr. 2 – $1.3 million Yr. 3 – $1.4 million In 2022, 2023 and 2024, the company recorded $0.2 million, immaterial amounts, and $1.4 million of earnings adjustment mechanism incentives for energy efficiency, respectively. In 2022, 2023 and 2024 the company recorded $0.2 million, $0.2 million, and $0.3 million of positive incentives, respectively.	Potential positive rate adjustment for gas safety and performance of up to: Yr. 1 – $1 million Yr. 2 – $1.1 million Yr. 3 – $1.2 million In 2025, the company recorded $0.3 million of earnings adjustment mechanism incentives for energy efficiency. In 2025, the company recorded no positive incentives.
Revenue decoupling mechanisms	Continuation of reconciliation of actual to authorized gas delivery revenues. In 2022, 2023 and 2024, the company deferred $2 million, $7.6 million and $20.6 million as regulatory assets, respectively.	Continuation of reconciliation of actual to authorized gas delivery revenues. In 2025 the company deferred $5.9 million as regulatory assets.
Recoverable energy costs	Continuation of current rate recovery of purchased gas costs.	Continuation of current rate recovery of purchased gas costs.
Negative revenue adjustments	Potential charges if performance targets relating to service, safety and other matters are not met: Yr. 1 – $6.3 million Yr. 2 – $6.7 million Yr. 3 – $7.3 million In 2022, the company recorded $0.1 million and immaterial amounts in 2023 and 2024 of negative revenue adjustments, respectively.	Potential charges if certain performance targets relating to service, reliability, safety and other matters are not met: Yr. 1 – $8.4 million Yr. 2 – $9.4 million Yr. 3 – $11.1 million In 2025, the company recorded no negative revenue adjustments.
Regulatory reconciliations	Reconciliation of late payment charges (c) and reconciliation of expenses for pension and other postretirement benefits, environmental remediation costs, property taxes (d), energy efficiency program (e), major storms, uncollectible expenses and certain other costs to amounts reflected in rates. In 2022 and 2023, the company deferred $3.4 million and $12.1 million as net regulatory assets, respectively. In 2024, the company deferred $5.1 million as net regulatory liabilities.	Reconciliation of expenses for pension and other postretirement benefits, environmental remediation costs, property taxes (d), energy efficiency program (f), low-income bill credits, uncollectible expenses (g), late payment charges (g), and certain other costs to amounts reflected in rates. In 2025, the company deferred $4.4 million as net regulatory assets.
Net utility plant reconciliations	Target levels reflected in rates: Gas average net plant target Yr. 1 – $720 million Yr. 2 – $761 million Yr. 3 – $803 million The company did not record any regulatory liabilities in 2022, 2023 and 2024.	Target levels reflected in rates: Gas average net plant target Yr. 1 – $877 million Yr. 2 – $934 million Yr. 3 – $1,010 million The company did not record any regulatory liabilities in 2025.
Average rate base	Yr. 1 – $566 million Yr. 2 – $607 million Yr. 3 – $694 million	Yr. 1 – $720 million Yr. 2 – $791 million Yr. 3 – $863 million
Weighted average cost of capital (after-tax)	Yr. 1 – 6.77 percent Yr. 2 – 6.73 percent Yr. 3 – 6.72 percent	Yr. 1 – 7.25 percent Yr. 2 – 7.28 percent Yr. 3 – 7.31 percent
Authorized return on common equity	9.2 percent	9.75 percent

Actual return on common equity (h)	Yr. 1 – 10.01 percent Yr. 2 – 10.40 percent Yr. 3 – 9.91 percent	Yr. 1 - 9.63 percent
Earnings sharing	Most earnings above an annual earnings threshold of 9.7 percent are to be applied to reduce regulatory assets for environmental remediation and other costs accumulated in the rate year. In 2022, 2023 and 2024, actual earnings were $1.1 million, $2.8 million and $0.9 million above the threshold, respectively.	Most earnings above an annual earnings threshold of 10.25 percent are to be applied to reduce regulatory assets for environmental remediation and other costs accumulated in the rate year. In 2025,the company had no earnings above the threshold.
Cost of long-term debt	Yr. 1 – 4.58 percent Yr. 2 – 4.51 percent Yr. 3 – 4.49 percent	Yr. 1 – 4.95 percent Yr. 2 – 5.01 percent Yr. 3 – 5.08 percent
Common equity ratio	48 percent	48 percent

(a)The gas base rate changes were implemented with increases of: Yr. 1 - $4.4 million; Yr. 2 - $4.4 million; and Yr. 3 - $4.4 million.

(b)The gas base rate changes will be implemented with increases of: Yr. 1 – $10.4 million; Yr. 2 - $10.4 million; and Yr. 3 -$10.4 million.

(c)The rate plan includes certain COVID-19 provisions, such as: recovery of 2020 late payment charges over three years ($0.6 million); reconciliation of late payment charges to amounts reflected in rates for years 2021 through 2024, with full recovery/refund via surcharge/sur-credit once the annual variance equals or exceeds 5 basis points of return on equity; and reconciliation of write-offs of customer accounts receivable balances to amounts reflected in rates from January 1, 2020 through December 31, 2024, with full recovery/refund via surcharge/sur-credit once the annual variance equals or exceeds 5 basis points of return on equity.

(d)Deferrals for property taxes are limited to 90 percent of the difference from amounts reflected in rates, subject to an annual maximum for the remaining difference of not more than a maximum number of basis points impact on return on common equity: Yr. 1 - 10.0 basis points; Yr. 2 - 7.5 basis points; and Yr. 3 - 5.0 basis points.

(e)Energy efficiency costs are expensed as incurred. Such costs are subject to a cumulative reconciliation that is evenly distributed over the term of the rate plan subject to the caps set forth in the January 2020 NYSPSC NENY order. If the NYSPSC modifies O&R's NENY budgets during the rate term, such modifications will be reflected at the time of the cumulative reconciliations.

(f)Energy efficiency costs are deferred as regulatory assets and amortized over a 15-year period. Balances are reconciled to the revenue requirement effect of actual level of cost incurred to the rate plan targets. If the NYSPSC authorizes modified energy efficiency spending budgets over the course of the rate plan, O&R will defer the impact of any variance between the level in rates and the authorized budgets for collection or refund to customers in the next base rate case.

(g)Reconciliation of uncollectible expenses and late payment charges are subject to a combined annual threshold of $0.5 million. Once the threshold is met, O&R will defer the variance between actual uncollectible expense and late payment charge, and the level set forth in rates that is above the threshold. Recovery/refunds will be made via surcharge/sur-credit. Surcharge recovery is subject to an annual cap that produces no more than a 0.5 percent total customer bill impact.

(h)Calculated in accordance with the earnings calculation method prescribed in the rate order.

Rockland Electric Company (RECO)

In December 2021, the NJBPU approved an electric rate increase, effective January 1, 2022, of $9.65 million for RECO. The following table contains a summary of the terms of the distribution rate plans.

RECO
Effective period	January 2022
Base rate changes	$9.65 million
Amortization to income of net regulatory (assets) and liabilities	$0.2 million over three years and $9.2 million of deferred storm costs over a three-year period (excluding $2.4 million of costs for Tropical Storm Henri which will be deferred over a three-year period in base rates) and continuation of $10 million over three years
Recoverable energy costs	Current rate recovery of purchased power costs.
Cost reconciliations	Reconciliation of uncollectible accounts, Demand Side Management and Clean Energy Program.
Average rate base	$262.8 million
Weighted average cost of capital (after-tax)	7.08 percent
Authorized return on common equity	9.6 percent
Actual return on common equity	Yr. 1 - 9.6 percent Yr. 2 - 9.7 percent Yr. 3 - 8.3 percent Yr. 4 - 7.5 percent
Cost of long-term debt	4.74 percent
Common equity ratio	48.51 percent

Effective July 2021, the NJBPU authorized a conservation incentive program for RECO, that covers all residential and most commercial customers, under which RECO’s actual electric distribution revenues are compared with the authorized distribution revenues and the difference accrued, with interest, for refund to, or recovery from, customers, as applicable. The conservation incentive program is not permitted if RECO’s actual return on equity exceeds the approved base rate filing return on equity by 50 basis points or more.

In December 2022, the NJBPU authorized a $47.8 million Infrastructure Investment Program (IIP) over a five-year period (2023 – 2027). RECO’s IIP provides accelerated infrastructure investments to enhance safety, reliability, and resiliency.

In November 2024, RECO filed a petition with the NJBPU for an order authorizing RECO to defer incremental preparation costs of $5 million associated with six storms that occurred during 2023 and 2024 until RECO’s next base rate case. In August 2025, the NJBPU issued an order authorizing RECO to defer such costs. The prudence of these costs, the manner and time period of recovery, along with carrying costs, are being considered in RECO’s next base rate case.

In September and October 2025, RECO issued credits of $6.6 million in aggregate to its residential electric

customers pursuant to an order issued by the NJBPU that established a residential universal bill credit funded by

New Jersey.

In October 2025, RECO further updated its June and August 2025 requests to the NJBPU for an electric rate increase, effective January 1, 2026. The company increased its requested rate increase to $31.8 million and changed the common equity ratio to 50.04 percent. The October 2025 updated filing

continues to reflect a return on common equity of 10.30 percent.

Other Regulatory Matters

In January 2023, CECONY initiated a review of welds on certain gas and steam mains following the company’s discovery of a leak from a gas main weld in Queens, New York. During the course of its review thus far, CECONY discovered non-conforming gas and steam main welds. The non-conforming welds are not expected to have a significant impact on operations. New York regulations require utilities to perform and record weld films for certain gas and steam main welds. Upon reviewing these films, CECONY determined that in some instances third-party contractors engaged in misconduct by substituting duplicate weld films for different welds, while another third-party

contractor had created poor quality weld films. CECONY voluntarily disclosed its initial review and findings to the NYSDPS which, in turn, initiated its own investigation into CECONY’s compliance with weld requirements under the New York State Public Service Law and the prudence of CECONY’s oversight of the weld testing process that could result in adverse regulatory action against the company. CECONY continues to investigate this matter, is remediating and monitoring non-conforming welds and continues to cooperate with the NYSDPS in its investigation. During the time period CECONY disclosed the issue to the NYSDPS, it also reported the contractors’ misconduct to law enforcement. In August 2025, two employees of the third-party contractors were indicted in the U.S. District Court for the Southern District of New York for wire fraud arising out of their scheme to defraud CECONY. Given the nature of the non-conforming welds identified, CECONY does not anticipate significant impact to the operation of its gas and steam mains. CECONY's authorized rate plan for the three-year period January 2026 through December 2028 provides that $33.3 million in annual gas revenue requirement ($100 million in aggregate from 2026 through 2028) will be recovered through a rate adjustment mechanism that is subject to refund to customers relating to this matter. See “Rate Plans,” above. CECONY is unable to estimate the amount or range of its possible loss related to this matter.

In January 2018, the NYSPSC issued an order initiating a focused operations audit of the Utilities’ financial accounting for income taxes. The audit is investigating the Utilities’ inadvertent understatement of a portion, the amount of which may be material, of their calculation of total federal income tax expense for ratemaking purposes related to the calculation of plant retirement-related cost of removal. As a result of such understatement, the Utilities accumulated significant income tax regulatory assets ($1,049 million and $10 million for CECONY and O&R, respectively, as of December 31, 2025 and $1,078 million and $14 million for CECONY and O&R, respectively, as of December 31, 2024) which are not earning a return. While the Utilities have properly calculated and paid their federal income taxes and there is no uncertain tax position related to this matter, this understatement of historical income tax expense materially reduced the amount of revenue collected from the Utilities' customers in the past relative to what it should have been. The Utilities’ rate plans have reflected the correct amount of federal income taxes recoverable from customers, including a proportionate recovery of the regulatory asset, beginning with O&R’s rate plans effective November 2015, CECONY’s electric and gas rate plans effective January 2017, and CECONY’s steam plan effective November 2023. As part of the audit, the Utilities plan to pursue a private letter ruling from the Internal Revenue Service (IRS) confirming that the Utilities’ inadvertent understatement of prior years’ income tax expense constitutes a normalization violation that can be cured through an increase in future years’ revenue requirements until such time as the regulatory asset is fully recovered in rates, and not through a write-down of all or a portion of the Utilities’ regulatory asset. Under Accounting Standards Codification Topic (ASC) 740, the Utilities recorded an unfunded deferred federal income tax liability (with a gross-up amount) and a corresponding regulatory asset. The income tax regulatory assets are netted against the related regulatory liability for future income tax and are shown in the line “Future income tax” in the following table of Regulatory Assets and Liabilities and on the Companies’ consolidated balance sheets in the line “Regulatory liabilities.” Management’s assessment is that the income tax regulatory assets as of December 31, 2025 are probable of collection through future rates. The IRS provides safe harbor relief for inadvertent normalization violations through the jurisdictional rate setting process of including in rates adequate revenue to fully recover the deferred tax balance. However, the Utilities would record a liability or impair a portion of the regulatory assets associated with this understatement if the NYSPSC were to issue an order that required the Utilities to write off all or a portion of their existing regulatory asset. The Utilities are unable to estimate the amount or range of their possible loss, if any, related to this matter. At December 31, 2025, the Utilities had not accrued a liability related to this matter.

Regulatory Assets and Liabilities

Regulatory assets and liabilities at December 31, 2025 and 2024 were comprised of the following items:

	Con Edison		CECONY
(Millions of Dollars)	2025	2024	2025	2024
Regulatory assets
Energy efficiency and other clean energy programs (a)	$1,994	$1,689	$1,893	$1,601
Customer account deferrals (b)	1,089	1,073	1,084	1,058
Environmental investigation and remediation costs	1,079	1,038	987	952
Revenue taxes	638	540	611	517
Legacy meters (c)	382	413	370	398
Property tax reconciliation (d)	101	131	97	131
Deferred storm costs (e)	85	147	1	53
Deferred derivative losses-long-term	18	106	15	94
Unrecognized pension and other postretirement costs	4	—	—	—
MTA power reliability deferral (f)	—	31	—	31
Pension and other postretirement benefits deferrals	—	2	—	2
Other	209	353	177	321
Regulatory assets - noncurrent	5,599	5,523	5,235	5,158
Deferred derivative losses - short term	97	102	90	92
Recoverable energy cost	6	39	5	14
Regulatory assets - current	103	141	95	106
Total Regulatory Assets	$5,702	$5,664	$5,330	$5,264
Regulatory liabilities
Allowance for cost of removal less salvage (g)	$1,686	$1,527	$1,468	$1,322
Future Income Tax*	1,120	1,224	1,015	1,112
Unrecognized Other Postretirement Benefit Cost (h)	873	1,054	806	984
Net unbilled revenue deferrals	397	436	397	436
Pension and Other Postretirement Employee Benefit Deferrals	356	368	313	304
Late Payment Charge Deferral	192	231	191	224
Deferred derivative gains – long term	119	8	109	6
System benefit charge carrying charge	108	115	100	110
Storm reserve passback	80	—	80	—
Settlement of prudence proceeding (i)	8	10	8	10
Other	435	471	392	432
Regulatory liabilities - noncurrent	5,374	5,444	4,879	4,940
Deferred derivative gains	165	25	152	22
Refundable energy costs current	71	59	53	18
Revenue decoupling mechanism liabilities	13	18	—	—
Regulatory liabilities - current	249	102	205	40
Total Regulatory Liabilities	$5,623	$5,546	$5,084	$4,980

* See "Federal Income Tax" in Note A, "Other Regulatory Matters," above, and Note L.

(a) Energy Efficiency and Other Clean Energy Programs represent programs designed to increase energy efficiency achievements and other clean energy transformation efforts.

(b) Customer account deferrals include (1) the amount to be collected from customers related to the Emergency Summer Cooling Credits program for CECONY, (2) deferrals under CECONY and O&R's electric and gas rate plans for the reconciliation of write-offs of customer accounts receivable balances to amounts reflected in rates as well as for increases to the allowance for uncollectible accounts receivable and (3) deferral related to the arrears relief programs. Amounts deferred under the arrears relief programs were $262.9 million and $0.8 million for CECONY and O&R at December 31, 2025, respectively, and $323.7 million and $1.4 million at December 31, 2024, respectively, and receive a return at the pre-tax weighted average cost of capital.

(c) Pursuant to their rate plans, CECONY and O&R are recovering the costs of legacy meters over a 15-year period beginning January 1, 2024 and a 12-year period beginning January 1, 2022, respectively.

(d) Property tax reconciliation represents the amount deferred between actual property taxes incurred and the level included in rates subject to the provisions of the respective rate plans.

(e) Deferred storm costs represent response and restoration costs, other than capital expenditures, in connection with Tropical Storm Isaias and other major storms that were deferred by the Utilities.

(f) MTA power reliability deferral represents CECONY’s costs in excess of those reflected in its prior electric rate plan to take certain actions relating to the electrical equipment that serves the Metropolitan Transportation Authority (MTA) subway system. The company recovered this regulatory asset pursuant to its 2023-2025 rate plan. See footnote (b) to the CECONY - Electric table under “Rate Plans,” above.

(g) Allowance for cost of removal less salvage represents cash previously collected from customers to fund future anticipated removal expenditures.

(h) Unrecognized pension and other postretirement costs represent the deferrals associated with the accounting rules for retirement benefits. See "Pension and Other Postretirement Benefits" in Note A.

(i) Settlement of prudence proceeding represents the remaining amount to be credited to customers pursuant to a Joint Proposal, approved by the NYSPSC in April 2016, with respect to the prudence of certain CECONY expenditures and related matters.

The NYSPSC has authorized CECONY to accrue unbilled electric, gas and steam revenues. CECONY has deferred the differences between unbilled revenues and energy costs for the future benefit of customers by recording a regulatory liability of $397 million and $436 million at December 31, 2025 and 2024, respectively.

In general, the Utilities receive or are being credited with a return at the Other Customer-Provided Capital rate for regulatory assets that have not been included in rate base, and receive or are being credited with a return at the pre-tax weighted average cost of capital once the asset is included in rate base. Similarly, the Utilities pay to or credit customers with a return at the Other Customer-Provided Capital rate for regulatory liabilities that have not been included in rate base, and pay to or credit customers with a return at the pre-tax weighted average cost of capital once the liability is included in rate base. The Other Customer-Provided Capital rate for the years ended December 31, 2025 and 2024 was 4.75 percent and 5.95 percent, respectively.

In general, the Utilities are receiving or being credited with a return on their regulatory assets for which a cash outflow has been made ($3,421 million and $3,262 million for Con Edison, and $3,193 million and $3,024 million for CECONY at December 31, 2025 and 2024, respectively). Regulatory assets of RECO for which a cash outflow has been made ($41 million and $28 million at December 31, 2025 and 2024, respectively) are not receiving or being credited with a return. RECO recovers regulatory assets over a period of up to four years or until they are addressed in its next base rate case in accordance with the rate provisions approved by the NJBPU. Regulatory liabilities are treated in a consistent manner.

Regulatory assets that represent future financial obligations and were deferred in accordance with the Utilities’ rate plans or orders issued by state regulators do not earn a return until such time as a cash outlay has been made. Regulatory liabilities are treated in a consistent manner. At December 31, 2025 and 2024, regulatory assets for Con Edison and CECONY that did not earn a return consisted of the following items:

Regulatory Assets Not Earning a Return*

	Con Edison		CECONY
(Millions of Dollars)	2025	2024	2025	2024
Environmental investigation and remediation costs	$1,072	$1,037	$980	$942
Revenue taxes	621	567	595	543
UB deferral for uncollectible accounts receivable	427	551	426	541
Deferred derivative losses - short-term	97	102	90	92
Deferred derivative losses - long-term	18	106	15	94
Unrecognized pension and other postretirement costs	4	—	—	—
Other	42	39	31	28
Total	$2,281	$2,402	$2,137	$2,240

*This table presents regulatory assets not earning a return for which no cash outlay has been made.

The recovery periods for regulatory assets for which a cash outflow has not been made and that do not earn a return have not yet been determined, except as noted below, and are expected to be determined pursuant to the Utilities’ future rate plans to be filed or orders issued by the state regulators in connection therewith.

The deferral for revenue taxes represents the New York State metropolitan transportation business tax surcharge on the cumulative temporary differences between the book and tax basis of assets and liabilities of the Utilities, as well as the difference between taxes collected and paid by the Utilities to fund mass transportation. The Utilities recover the majority of the revenue taxes over the remaining book lives of the electric and gas plant assets, as well as the steam plant assets for CECONY.

The Utilities recover deferred derivative losses - short-term within one year, and long-term generally within three years.

The Utilities recover unrecognized pension and other postretirement costs over 10 years, and the portion of investment gains or losses is recognized in expense over 15 years, pursuant to NYSPSC policy.

Electricity and Gas Purchase Agreements

The Utilities have electricity purchase agreements with non-utility generators and others for generating capacity and gas purchase agreements for natural gas supply, transportation and storage. The Utilities recover their purchased power and gas costs in accordance with provisions approved by the applicable state public utility regulators. See “Recoverable Energy Costs” in Note A. The Utilities also conducted auctions and have entered into various other electricity and gas purchase agreements. Assuming performance by the parties to the electricity purchase agreements, the Utilities are obligated over the terms of the agreements to make capacity and other fixed payments.

The future capacity and other fixed payments under the electricity and gas purchase agreements are estimated to be as follows:

(Millions of Dollars)	2026	2027	2028	2029	2030	All Years Thereafter
Con Edison
Electricity power purchase agreements	$225	$188	$147	$72	$44	$259
Natural gas	522	8	—	—	—	—
Gas transportation and storage	564	565	447	311	222	2,266
CECONY
Electricity power purchase agreements	222	187	147	72	44	259
Natural gas	466	7	—	—		—
Gas transportation and storage	493	494	391	272	193	1,975

For energy delivered and gas purchased under most of the electricity and gas purchase agreements, the Utilities are obligated to pay variable prices. The company’s payments under the significant terms of the agreements for capacity, energy, gas transportation and storage, and other fixed payments in 2025, 2024 and 2023 were as follows:

	For the Years Ended December 31,
(Millions of Dollars)	2025	2024	2023
Con Edison
Astoria Generating Company (a)	$132	$75	$40
Brooklyn Navy Yard (b)	144	139	134
Gas Transportation and Storage (c)	580	422	372
Total	$856	$636	$546
CECONY
Astoria Generating Company (a)	$132	$75	$40
Brooklyn Navy Yard (b)	144	139	134
Gas Transportation and Storage (c)	509	372	327
Total	$785	$586	$501

(a) Capacity purchase agreements with terms ending in 2025 through 2029.

(b) Contract for plant output, which started in 1996 and ends in 2036.

(c) Contracts for various counterparties and terms extending through 2047.