Leadership and Strategy

Letter From The Chairman Utility of the Future
Five Business Overview Strategy
Enterprise Risk TimeLine

Managing Our Business

Environmental Performance Safety
Policy Management and Regulatory Impact Governance and Business Ethics
Auditing and ISO Certification Cost Management

Reliability and Resiliency

Reliability Resiliency

Meeting Community Needs

Customers Strategic Partnerships
Employees Shareholders
Supply Chain  


Executive Summary Data snapshot


At Con Edison, we look to offer customers opportunities to manage their energy needs cost-effectively and provide consistently excellent customer service. Our suite of energy efficiency programs, the ability to convert from oil to gas, and our competitive business solutions are helping our customers to reduce their energy use, energy costs, and carbon footprint. We are also working to help our customers integrate new technologies like distributed generation and electric vehicles. Finally, we know our customers are interested in better communication, and in 2014, we made significant strides to make it easier for our customers to talk to us, whether online, through text messages, or on social media.

Energy Efficiency


Energy Efficiency

Our energy efficiency programs are a prime example of a sustainable effort – by reducing demand we reduce the cost burden for our customers (community), reduce emissions associated with electric generation (environment), and reduce our system peak, helping us defer large capital investments (business value).

 bar-t CON EDISON, INC. UTILITY CUSTOMER CUMULATIVE ENERGY SAVINGS (THOUSAND MWH AND DTH) Array ( [0] => Array ( [name] => [data] => Array ( [0] => Array ( [label] => MWH [color] => #23d3e0 [values] => Array ( [0] => Array ( [x] => 2009 [y] => 1.2 ) [1] => Array ( [x] => 2010 [y] => 84.2 ) [2] => Array ( [x] => 2011 [y] => 349 ) [3] => Array ( [x] => 2012 [y] => 486.9 ) [4] => Array ( [x] => 2013 [y] => 659.5 ) [5] => Array ( [x] => 2014 [y] => 762.3 ) ) ) [1] => Array ( [label] => DTH [color] => #1f75c1 [values] => Array ( [0] => Array ( [x] => 2009 [y] => 4.3 ) [1] => Array ( [x] => 2010 [y] => 68.8 ) [2] => Array ( [x] => 2011 [y] => 436.3 ) [3] => Array ( [x] => 2012 [y] => 556.2 ) [4] => Array ( [x] => 2013 [y] => 899.6 ) [5] => Array ( [x] => 2014 [y] => 1059.6 ) ) ) ) ) ) 


  • MWH
  • DTH


    The New York State Energy Research and Development Authority (NYSERDA) and New York utilities are responsible for implementing the Energy Efficiency Portfolio Standard (EEPS) established by the New York Public Service Commission through energy efficiency, targeted demand- side management and demand-response programs. Through the utilities’ energy-efficiency programs, customers reduced their annual energy use by a cumulative 762,270 MWh and 1,059,556 DTHs from the programs’ inception in 2009 through 2014.

    Con Edison’s targeted demand-side management programs, which are designed for particular areas of the grid in need, assisted customers in reducing their annual energy use and resulted in the avoided release of greenhouse gases into the atmosphere every year. The following is a listing of the programs that we currently offer:

    Residential Programs: Through Con Edison programs, customers are empowered to take control of their energy use, better manage their utility bills, and reduce their environmental impact. Residential programs include:

    • Rebates for replacing old HVAC systems (Multifamily)
    • Free smart thermostats
    • Appliance recycling

    Commercial Programs: These programs give business owners and facility

    managers the tools they need to manage their energy use to best meet the

    needs of their businesses. Commercial and industrial programs include:

    • Financial incentives to upgrade aging HVAC systems (Small Business) (Large Commercial & Industrial)
    • Energy surveys and studies (Small Business)(Large Commercial & Industrial)
    • Free smart thermostat (Small Business)
    • Lighten Up! Small Business energy assessment and efficiency
    • upgrades (Orange and Rockland)
    • Commercial System Relief Program
    • Distribution Load Relief Program

    We continually adjust our programs to respond to market conditions, which

    keeps our programs relevant and attractive to customers.

  • Energy Efficiency: DEMAND RESPONSE


    Demand response (DR) is another tool that can be used to help customers conserve in Con Edison’s service territory. In 2014, approximately 735 participants enrolled in the Distribution Load Relief (DLRP) program and 450 participants enrolled in the Commercial System Relief (CSRP) program with 200 MW and 145 MW of load reduction, respectively. Since the programs are generally called at different times, for different purposes, and may involve the same customer resources, the MW enrolled in the two programs cannot be considered additive. Nearly 33,000 residential and small business customers are enrolled in the Direct Load Control (DLC) and Residential Smart Appliance (RSAP) programs with approximately 50 MW of participation. Throughout the year, there were no days of events called across the DR programs, other than a one hour test event for each program.

    Con Edison won a 2014 Innovation Award from the Utility Analytics Institute for a software program that helps the company to reduce customer electrical usage at times of high demand. The Innovation Award recognizes companies that use analytics to transform their business.

    Con Edison’s program lets the company study usage patterns in electric networks, groups of networks and other geographic areas. The company can use that information to decide where options like energy efficiency, demand response, distributed generation and energy storage can most help the electrical-delivery system. Reducing usage at times when demandis high, such as on hot summer days, can help the utility delay or avoid capital investments in its infrastructure. By holding down capital investments, Con Edison saves customers money.

  • Energy Efficiency: COMPETITIVE SOLUTIONS


    Con Edison Solutions is a leading energy services company that provides competitive electricity and natural gas supply, renewable energy, sustainability services, cost-effective energy efficiency solutions, and energy performance contracting. In 2014, the company signed a $56 million contract with the U.S. Army Reserve’s 99th Regional Support Command (RSC) to provide energy efficiency services and operations and maintenance support at 90 sites in 11 states.

    The contract is a component of the U.S. Department of Energy’s Energy Savings Performance Contract (ESPC) program. Under this initiative, a limited number of qualified, private-sector energy service providers — selected on a competitive basis – can provide energy efficiency, renewable energy and water conservation services to federally owned buildings and facilities.

    According to federal officials, the Energy Department’s ESPC program is designed to save energy, reduce federal energy costs, cut greenhouse gas emissions, bring more cutting-edge technologies to use, strengthen national security and help strengthen the economy.

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Distributed Generation and Microgrids

Throughout the service territories of the regulated utilities, we are working to empower customers’ innovative energy choices, with an emphasis on targeting areas that maximize ratepayer benefits. There has been strong customer interest in distributed generation, and we are seeing rapid growth. As we strive to meet our customers’ needs and expectations, a focus on distributed generation is critical.

The primary type of distributed generation (DG) in terms of MW installed is combined heat and power (CHP). At Con Edison of New York, 90 MW of large (greater than 1 MW) CHP projects came online between 2006 and 2011. Though large project installation slowed in 2011, there are multiple projects in development and we expect and additional 100 MW of large CHP by 2018. Small CHP (less than 1 MW) has also experienced increased growth thanks to a new, modular-CHP incentive program we developed with The New York State Energy Research and Development Authority (NYSERDA). In the Orange and Rockland territories, over 24 MW of CHP has been installed.

While CHP installations have been significant, Con Edison of New York and Orange and Rockland (O&R) customers have rapidly been installing solar photovoltaic (PV) panels as well. An additional 2,872 (Con Edison of New York – 2138, O&R – 734) customers installed solar PV last year alone, growing from 53 MW (Con Edison of New York – 34.8 MW, O&R- 18.2 MW) at the start of 2014 to 84.5 MW (Con Edison of New York – 59.8 MW, O&R – 24.7 MW) by the end of year throughout Con Edison of New York and O&R’s territories. Solar power production has more than quadrupled across our service territory in the last four years, with a CAGR over 75 percent.

Additionally, more than 65 MW (CE – 45.1 MW, O&R – 19.9 MW) of solar PV development are in the queue for interconnection. Large customer solar installations are on the rise thanks to new NYSERDA incentives from the NY Sun Program, which has earmarked almost $1 Billion for solar installations across the State by 2023.

The future growth of Distributed Generation in our service territories will be closely tied to the outcomes of the Public Service Commission’s Reforming the Energy Vision (REV) Proceedings. One of the goals of REV is the creation of active markets where DG, and other forms of Distributed Energy Resources (DER), can provide services to the utility grid to help mitigate or alleviate traditional utility capital expenditures for infrastructure. An early example of these markets will be demonstrated by the Con Edison’s Brooklyn-Queens Demand Management Program, where by active solicitation and integration of customer-sided DER into Substation Planning efforts we are aiming to defer the construction of a $1 billion substation. In addition, O&R is requesting qualified and experienced vendors deliver innovative Demand Management (“DM”) solutions that provide distribution system load relief in its Pomona Load Pocket, potentially deferring the construction of a $56 million substation, which also includes the use of smart meters to allow customers to make more informed decisions about their energy use.

In addition to the REV initiatives, NY State is trying to further expand the opportunities for customer’s to develop microgrid facilities through the NYSERDA NY Prize funding opportunity. A microgrid uses a mix of DG and DER technologies to provide resilient support to a portion of the utilities load which can also operate off-the-grid in times of natural disaster or utility need to provide basic services to the community. Both Con Edison and O&R will be working with various community groups and DG Developers who are participating in NY Prize in order to coordinate our electric system planning efforts as well as to drive value for all our ratepayers. Distributed Generation will continue to be an area of focus in 2015 and beyond. We will continue to identify ways that we can partner with our customers and regulators to ensure that customers are able to produce the power they want while keeping the distribution grid reliable and affordable for all.


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Oil-to-gas Conversions

In 2011, the City of New York passed regulations phasing out the use of #4 and #6 heavy fuel oils. These fuel oils are typically only used to heat large buildings. When the fuel is combusted, soot and smog-forming pollutants are released into the atmosphere. As part of the city’s goals to reduce local pollutant emissions and improve air quality, permits for the use of #6 heavy heating oil will expire by the middle of 2015, and existing permits/renewals will expire for #4 fuel oil by the end of 2030. Con Edison anticipates that many of these large buildings will want to convert their primary fuel source to natural gas supplied from the company’s gas distribution system.

Con Edison of New York estimated that 70 percent of the buildings in New York City that burn #4 or #6 heating oil were located within its gas distribution system’s service territory (as of April 2011). New demand for gas services is creating opportunities for the company to grow our gas business, but it also poses challenges to the logistics of our operations and the management of our infrastructure.

We are seeing not only an increase in customers due to the NYC regulation requirements, but also an increase in #2 conversions due to customers’ interest in a lower costing source of fuel. In 2014 we worked with customers to convert 824 New York City buildings burning #4 or #6 fuel oil and 618 from #2 oil, resulting in a reduction of 311 tons of fine particulate matter (PM2.5) since 2011. More than 4,000 conversions have occurred in New York City alone over the last three years.

Although Orange and Rockland counties in New York do not have any regulatory requirements associated with conversion, Orange and Rockland is also experiencing growth in oil-to-gas conversions. O&R converted nearly 6,000 customers in the last five years. In 2014, 266 conversions from oil or propane to natural gas were completed, representing one of the top three highest natural gas conversion rates in the last five years.

To help manage these opportunities and challenges, Con Edison is tracking and setting annual goals for the number of customers who convert from heavy fuel oil to natural gas. At Con Edison of New York, we strive to get all customers connected at zero cost. The traditional approach was to connect customers on an individual basis (85 percent of those requesting received zero cost); however, with the new Area Growth Strategy, 100 percent received zero cost connections.

Con Edison of New York’s Area Growth Strategy started in 2012 (first zones constructed in 2013) but the existing tariff was limiting. Working for more than 18 months with New York State Public Service Commission Staff, we were granted permission to use our proposed tariff amendment. Approved by the Commission in November with an effective date December 1, 2013, the new Area Growth tariff allows us to aggregate customers in a new way and evaluates projects based on their economics. Customers who previously would have a very high cost are now able to benefit from aggregating a larger area and get service for no cost. If one customer makes the entire project uneconomical, the company has flexibility to revise the boundaries of the zone. In short, this new tariff amendment allows us to apply a new revenue test and more closely align capital costs with actual anticipated revenue.

Please visit our Oil-to-Gas Conversion website for more information, including how to begin the gas conversion process for your building.

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Electric Vehicles


The federal government has pledged to invest significant funds in alternative-fuel vehicles to address climate change and reduce carbon emissions. Con Edison recognizes the benefits of plug-in electric vehicles (PEVs) as a green technology, offering drivers greater fuel-economy or using no fuel at all. For these reasons, the company is committed to making the transition from gasoline to electric vehicles as simple and convenient as possible.

By end of year 2014, Con Edison had 3,622 electric vehicles throughout the Con Edison of New York and Orange and Rockland service territories – more than five times the population of 666 in 2012, and almost doubling the population of 2,040 in 2013. We anticipate that number to dramatically increase as consumer awareness rises and prices plateau. We anticipate over 5,800 electric vehicles on the system by the end of 2015, and we are preparing for over 16,400, electric vehicles to plug in by 2018.

By encouraging energy-efficiency, off-peak charging, demand response programming, and distributed generation development, we will be able to manage the new loads for these electric vehicles on our grid. Con Edison will look to offer incentives to encourage customers to charge their PEVs during off-peak hours. As a step towards this effort, the company filed a new SC1 Time of Use (TOU) rate with the PSC in January 2015. It provides an adequate amount of off-peak hours for charging all EVs and can be used by residential customers that have a dedicated service for their EV. As of March 1, 2014, Con Edison offers a one-year price guarantee for residential EV owners who switch to the new SC1 Time-of-Use Rate.

Additionally, Con Edison expanded its EV pilot program to 53 participants – 51 from Con Edison of New York, and two from O&R. The pilot focuses on evaluating the usefulness and accuracy of alternative meter technology to measure EV load separate from whole house load, as well as participants’ responsiveness to peak demand information.

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Information Needs


At both Con Edison and Orange and Rockland, we are doing more than ever to better communicate with our customers where they are and in the way they prefer to hear from us.

We made a major push in 2014 to proactively notify community boards, and elected officials when our work in their neighborhoods may be disruptive. We also send this information via email to customers living nearby, to help them plan around our work to minimize inconvenience.

As our customers increasingly turn to social media to communicate with businesses, we are now monitoring our Twitter and Facebook accounts around-the-clock, ready to respond to questions and concerns. We use social media to share information about energy safety, storm-related outages, and tips to save money and energy.

We are focused on meeting our customers’ expectations and bringing them new ways to do business with us.

In 2015, we will begin rebuilding our website to improve customer interaction, improve self-service transactions, and make it easier to find information. That means improvements to welcome pages, menu structures, informational pages, secure login sections, and transactional processes. The improved online experience will cover our external website, mobile website, and mobile application interfaces.

An improved “My Account” service center will make it easier for customers to view and pay bills, review account information, and submit meter readings, among other tasks.

We also send monthly emails to customers with useful information about storm safety, energy conservation, rebate programs, and how to save money on their bills. A new video series, How Much Juice Does It Use?, was launched in 2014 to show customers how much energy is used by common household appliances. The videos are embedded in emails, shared on social media, and highlighted in customer newsletters.

Con Edison’s quarterly Customer News is inserted in paper bills and sent electronically to approximately 1.7 million customers with email addresses on file. Orange and Rockland’s newsletter, @ Home, is inserted in customer bills. Both newsletters include energy and storm-safety information, tips to conserve energy, details about energy efficiency rebate programs, and information about reporting outages.

In the aftermath of Superstorm Sandy, we are now doing more to communicate outage information during severe weather. According to their preference, customers can now opt-in to receive recorded telephone messages and text messages with estimates of when we expect to have their power restored.

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Energy Affordability


We recognize the importance of energy affordability and value for our customers. Our company continues to focus on the entire customer bill as well as the value customers get from our services, including the reliability of the system. We continue to make good progress on optimizing capital investment through supporting demand side management and employing new system designs and planning process improvements.

Non-delivery costs account for roughly two thirds of the customer bill, including supply costs and taxes and fees. We recognize that we must advocate for our customers in all of these areas in order to help control costs.

Low-income customers are eligible for discounts on their electric and gas service at both Con Edison of New York and O&R. Participants in Con Edison’s low-income electric discount program receive a $9.50 discount. For the low-income gas program, participants who use gas for heating receive a discount of $7.25 on their monthly minimum charge, as well as a discount of $0.4880 per therm for usage in the 4-90 therm block. Low- income program participants who only use gas for cooking receive a $1.50 discount on their monthly minimum charge. At O&R, participants in the electric low income discount program who heat with electric receive a $17.40 bill credit while all other electric customers will receive a $8.00 bill credit. For the low-income gas program, participants receive a bill credit of $11.63 on their monthly bill.

Both Con Edison of New York and Orange and Rockland provide funding through customer and employee contributions for programs that provide financial assistance to customers who find themselves temporarily unable to pay their utility or home-heating bills because of emergency conditions. Con Edison of New York’s program is called EnergyShare, and it is administered by a local human services agency. The O&R program in New York State is called The Neighbor Fund. In New Jersey, program is called NJ Shares, and both are administered by human service agencies in the local communities.

In addition, both companies inform customers about the Home Energy Assistance Program, commonly referred to as HEAP. HEAP is a federally funded program that helps low-income residents struggling with heating costs. HEAP also offers an emergency benefit for households in a heat or heat-related energy emergency. The HEAP heating equipment repair and replacement component is available to help eligible low-income homeowners repair or replace primary heating equipment necessary to keep the home’s primary heating source functional.


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