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



Maintaining our world-class service reliability is a top priority for Con Edison. Our investments in our electric, gas, and steam infrastructure demonstrates our commitment to providing reliable service for our customers today and for decades to come.

Con Edison of New York’s 2014 reliability performance on the System Average Interruption Frequency Index (SAIFI) for 2014 included 107 per 1,000 system customers served, 343 per 1,000 non-network customers served, and 25.2 per 1,000 network customers served. Performance on the Customer Average Interruption Duration Index (CAIDI) for the year included 3.02 hours, 1.83 hours, and 8.62 hours, respectively.


Con Edison is known for being one of the most reliable electric service providers in the U.S.—and has been the recipient of numerous reliability awards over the years, including PA Consulting’s 2014 ReliabilityOne award for the Northeast region.



    During the winter of 2013/2014 CECONY and O&R service territories experienced a polar vortex, a large pocket of very cold air, which sits over the polar region during the winter season and finds its way down to the U.S. Because of this phenomenon the winter had 32 days below freezing and 18 snow days, which was more than any year in the past five years. CECONY also saw the largest amount of rock salt dispersed in NYC in the last five years – 122% higher than the average amount of salt in the previous four years. The mixture of salt and water is highly conductive of electricity and advances the deterioration of cables, connections, and transformers creating the short-term result of increases in electrical shocks and failure of underground electrical equipment and the long-term result of the potential for future electric equipment failures. The number of electric shocks and manhole events more than doubled over the preceding winter. Despite the impacts of the polar vortex, Con Edison continued to provide reliable and cost effective service to its customers. The Company earned the PA Consulting Group’s 2014 Outstanding System Reliability Award. The award recognizes superior annual system-wide reliability performance for customers. We were also named best in the Northeast Region.

    Con Edison of New York’s electric system performed very well in 2014, successfully serving a peak demand of 11,763 MW on Wednesday July 2nd. However, electric delivery volumes decreased 1.1 percent from 2013 and were 0.9 percent lower than budget. After adjusting for variations, primarily weather, delivery volumes were 0.1 percent below 2013 and 0.3 percent below budget. Distribution feeder lines marked their best performance in 10 years and the system experienced fewer transformer failures than in any of the past eight years. Orange and Rockland successfully met a peak demand of 1,370 MW on July 2, 2014 at 3 p.m. The system performed well throughout the remainder of the year.

    Con Edison of New York and Orange and Rockland completed key electric infrastructure improvement initiatives in 2014, fortifying lines and equipment across the service territory. CECONY’s robust and wide-reaching storm hardening program continued into its second year and began to reap important system benefits. In 2014, the Company installed submersible switches and replaced non-submersible transformers with submersible units. The Fulton and Bowling Green networks in Manhattan and the Brighton Beach network in Brooklyn were redesigned to allow flooded equipment and/or areas to be isolated instead of de-energizing the entire network.Based on analysis of actual damage sustained on the overhead distribution systems this year, CECONY estimates that more than 43,000 customer interruptions were avoided in 2014 as a result of the automatic switches and fuses that have been installed system-wide. CECONY also increased the reliability of 9 overhead auto loop systems by establishing spur loops and installing more resilient equipment. For its electric distribution substations, CECONY introduced improvements in 31 area substations.

    To provide for reliable service in the future, CECONY, along with other NY investor-owned utilities, formed the NY Transco LLC, a transmission company whose mission will be to construct and own transmission facilities that will reinforce and augment the existing backbone system in NY. Three projects have been identified for NY Transco: (i) a Ramapo to Rock Tavern line; (ii) the Staten Island Unbottling project; and (iii) the Fraser to Coopers Corners Reconductoring project.

  • Electric: ENERGY HIGHWAY


    In addition to strengthening our distribution networks, we are also partnering with other utilities to bolster New York’s high-voltage transmission system. For more information on this topic, please read on within the Policy Management and Regulatory Impact section of this report

  • Electric: Reforming the energy vision

    Reforming the energy vision

    In April 2014 the NYPSC established the REV proceeding with the purpose of examining the electric utility regulatory and business model in the context of the potential growth of distributed electric resources and the development of new technologies. The NYPSC articulated six core policy outcomes intended to better align the role and operations of utilities to enable market- and customer-driven change:

    • Customer engagement
    • Distributed market animation
    • System-wide efficiency
    • Fuel and resource diversity
    • System reliability and resiliency
    • Carbon reduction

    In August 2014, the NYPSC issued its Straw Proposal on “Track 1” policy issues in the REV proceeding, focusing on the operational aspects of creating energy markets at the distribution level. In the proposal, markets would operate via a Distributed System Platform, addressing distribution system planning and operations issues with inclusion of a market operations role. Other issues contemplated in Track 1 include utility ownership of distributed energy resources, sharing of customer and system information, benefit-cost analysis, demonstration projects, and clean energy programs. Significantly, the Straw Proposal included consideration of the state’s utilities taking over the role of renewable energy procurement from NYSERDA. Con Edison has expressed interest in assuming this role, provided it is allowed to directly own renewable resources because such ownership is a less expensive way to procure renewable energy compared to long term contracts between utilities and private developers.

    “Track 2” of the proceeding addresses New York’s regulatory framework and explores changes that could be made to better align utility interests with policy objectives. Issues under consideration include: rate and tariff design, alternate regulatory schemes such as the U.K.’s ‘RIIO’ regulatory model, and performance-based regulation. At a November technical conference on Track 2 sponsored by NYU for the Commission’s benefit, expert speakers counseled a measured approach to regulatory changes. Commission rulemakings have been issued on narrow and well-defined REV issues. Further action on broader questions posed in Track 1 in the first quarter of 2015 and a straw proposal on Track 2 is now expected in the second quarter of 2015.

    Specific issues receiving early attention include:

    Deferring utility infrastructure investments- 

    Targeted use of distributed resources and energy efficiency has the potential to defer utility infrastructure investments. In line with the REV vision, the NYPSC recently approved a Con Edison proposal for the Brooklyn-Queens Demand Management program (BQDM) that would defer the need to build a major substation in an area with higher-than-forecast growth. The BQDM program aims to locate 52 MW of distributed resources, thus pushing the need for a new substation from 2017 until 2024. The NYPSC also approved the company’s proposal to earn a rate of return on the costs of the project and incentives related to achieving resource acquisition targets, supplier diversity, and lower costs for customer-side solutions. The NYPSC will allow Con Edison to install and own energy storage devices on its own property as part of the program, but will only allow ownership of distributed generation if the market does not respond to requests for these types of resources.

    Demonstration Projects-

    Con Edison is currently developing a portfolio of demonstration projects designed to test REV concepts. Potential projects include electric vehicle charging, grid-connected community solar, multi-tenant advanced metering coupled with energy usage analysis, and variable pricing.

    Stakeholder Processes-

    Two stakeholder processes are scheduled to launch in January 2015. The first will focus on the technology platform needed to animate distributed energy markets, and the second will focus on market design elements. The state’s utilities will participate in each process.

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Con Edison of New York and Orange and Rockland safely and reliably supply natural gas to more than 1.2 million gas customers. The fuel provides many benefits, including lower emissions and more moderate prices than heating oil alternatives. To meet rising customer demand, we are enhancing our infrastructure to increase capacity and to protect our customers from any reliability impact that might arise from a disruption to the interstate pipeline system.

For all its benefits, natural gas also has risks. The invisible fuel dissolves in air and can only be detected by an odorant that is added to the fuel for safety or by specialized instrumentation. To protect customers, Con Edison of New York and Orange and Rockland immediately respond to leak reports, and identify, repair, and replace leak-prone pipes, and survey the system for new damage following weather events.



    Con Edison customer use of natural gas reached its peak for the 2014/2015 winter season through January at 1,118 MDt on January 7, 2015. Con Edison of New York’s total sales and transportation of natural gas exceeded 307,000 million MDt by year end, nearly 10 percent higher than in 2013.

    In Orange and Rockland, customer demand also peaked on January 7, 2015 at 191 MDt. Throughout the year, Orange and Rockland customers used 27,000 million MDt of natural gas, nearly 6 percent more than in 2013.



    Key improvements were made to our natural gas transmission and distribution network in 2014 to meet growing demand and enhance system reliability. Con Edison’s main replacement program continued, replacing over 64 miles of leak-prone iron and steel pipe. In addition, we replaced 2.36 miles of leak prone iron and steel pipe in flood – prone areas. We have replaced 280 miles of leak-prone pipe over the past five years. Crews also replaced 4,729 customer service lines and converted nearly 1,500 large New York City buildings from oil to gas, and installed more than 2,000 other new business services in 2014. Significant upgrades were also made to Con Edison’s natural gas transmission interconnection infrastructure to increase capacity. A new interconnection to the TETCO pipeline was brought into service via the Spectra gate in lower Manhattan. The project increases pipeline capacity into the Con Edison system and significantly improves system reliability in the event an unexpected disruption at other transmission interconnections. Additional upgrades were made to pipeline system components serving the territory to increase capacity.

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Con Edison provides steam service for 1,691 accounts, representing approximately three million customers in Manhattan through an underground network of steam pipes. By generating steam primarily through cogeneration, we provide efficient steam production and reduce emissions that would otherwise be generated by customer-sited boilers and equipment. Con Edison’s steam system is evolving to reduce costs to customers, sustain optimal reliability, and help improve our environmental footprint.

Our steam system performed well in 2014, meeting a peak demand of 8.9 million pounds on January 23. The system experienced no major service disruptions, maintaining its reliability rate of 100 percent. Our focus on public safety continued in 2014, progressing with the development and integration of the remote monitoring of structures prone to impact following major weather events.

Steam Accomplishments

One steam generating station eliminated the need for the existing 1,000 gallon bulk caustic storage tank, which is currently regulated by the jurisdiction of the New York State Department of Environmental Conservation (NYSDEC), and replaced it with two 120-gallon storage units. This effort has made the station environmentally friendlier and safer for our employees, while also reducing operating costs by approximately $15,000 per year in fees and inspections. This effort also eliminated the need for hazardous bulk chemical deliveries to the station. One steam generating station was awarded third place among 84 national stations considered for Emerson’s 2014 Reliability Program of the Year. The station used new technologies and process changes to streamline preventative maintenance work and reduced the forced outage rate. These measures increased steam availability to provide customers with a more economical and sustainable energy source.

  • Steam: Dual fuel capability

    Dual fuel capability

    Two Con Edison steam generating stations that were converted from oil to natural gas in 2013 cut CO2emissions by 21 percent (132,676 tons) in 2014. This reduction in emissions and fuel costs saved approximately $90 million, resulting in about a 10-percent drop in costs for our steam customers. All converted units remain capable of burning an alternate fuel in a supply shortage. This capability is particularly important to maintaining reliability and moderating price impacts during periods of high demand for natural gas. In 2014, another Con Edison steam generating station upgraded its kerosene system for operational purposes and installed new NOx burners to help lower the NOx output of the station.



    Key enhancements were made to the steam system in 2014 to help reduce Con Edison’s environmental footprint and maintain compliance with more stringent NOx RACT limits, which became effective July 1, 2014. Con Edison decreased the overall NOx rate for steam generating units by 17 percent in 2014 through increased use of natural gas and operational changes such as installing new NOx burners to certain steam generating stations to reduce NOx emissions.

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