Con Edison is committed to helping make a transformational impact on the environment, our region, and the lives of the people we serve. The company’s sustainability strategy goes hand in hand with our guiding principles of:
- Operational excellence, and
- Enhancing the customer experience.
Through implementing our strategy, we will mitigate the effects of climate change even as we harden our critical infrastructure in anticipation of climate change impacts. We have focused our strategy on the following elements:
- Delivering our Clean Energy Commitment, which includes:
- Significantly ramped up energy efficiency initiatives
- Goal of 100% clean electricity by 2040
- Investments in electric vehicle make-ready
- Accelerating reduction of fossil fuels for heating
- Expansion of our national renewable electric production business – currently the second-largest owner of solar electricity production in North America
- Developing transmission opportunities to bring clean energy to customers
- Protecting our critical infrastructure against the impacts of climate change and cyber attacks
- Offering diversity, equity, and inclusion through and to our workforce
- Maintaining sound governance practices
Our Corporate Strategy Stems from Our Guiding Principles
Our corporate strategy stems from our three principles, embracing the growing worldwide concern over the impacts of climate change and the desire of customers and the public to have increasing say over how energy is produced and used.
Accordingly, our strategy involves three areas where we can positively impact society and our planet while building value for our stakeholders:
- Strengthen our core utility business through sustainable means
- Pursue additional regulated growth opportunities that add value for customers and our capital providers as New York and New Jersey pursue clean energy agendas
- Grow, outside our core businesses, existing clean energy businesses and pursue additional clean energy growth opportunities consistent with our risk appetite
Successful implementation of our corporate strategy will enable us to continue to provide steady, predictable earnings, maintain balance sheet stability, and pay increasing dividends for our shareholders – in 2021 we raised our annualized dividend for the 47th consecutive year.
Provide safe and reliable service
Provide steady, predictable earnings
Strengthen core utility delivery business
Enhance the customer experience
Maintain balance sheet stability
Pursue additional regulated growth opportunities to add value in the evolving industry
Achieve operational excellence and cost optimization
Pay attractive, growing dividends
Grow existing clean energy businesses and pursue additional clean energy growth opportunities consistent with our risk appetite
Core Utility Business Strategy: Safety
Safety is the cornerstone of all that we do at Con Edison. We continue to strive for a zero-harm work environment for our employees and the public we serve.
We have been aggressive in upgrading our systems against severe weather, having invested $1 billion over four years following Superstorm Sandy. We coordinated with Westchester County in New York to invest an additional $100 million to fortify our electric system following a pair of successive severe storms in 2018. Orange & Rockland (O&R) invested $47 million in storm hardening from 2018-2020.
In our gas delivery systems, we have improved safety as well as reducing harmful methane emissions through our accelerated and prioritized distribution pipe replacement. Orange & Rockland (O&R) completed the retirement of its entire low-pressure gas system and continues to focus on retirement of the remaining leak prone pipe by 2029. Consolidated Edison Company of New York (CECONY) is on track to complete its priority pipe replacement program in 2038.
CECONY and O&R were the first utilities to install smart natural-gas detectors that monitor the air in our customers’ basements, sending alerts to homeowners and emergency responders when a gas leak is detected.
Monitoring the safety performance of our electric and gas distribution systems is also a priority, so we conduct surveys of our entire electric and gas systems monthly for stray voltage and leaks, respectively, going far beyond industry standards.
Core Utility Business Strategy: Enhancing the Customer Experience
Our customers want more access to renewables, energy efficiency, demand response, storage, and information to help them manage their energy usage and bills.
We are more than 60% complete in our $1.4 billion, multi-year, smart meter investment. By the program’s completion at the end of 2022, we will have installed more than 5 million smart meters. Smart meters are central to our efforts to meet the evolving needs of customers by providing greater insight into energy use with near real-time data—truly a transformation from the days of a single manual reading each month.
We are already seeing other benefits from our smart meter rollout. Integrating smart meters with our outage management system, as we have done at O&R, has resulted in improved customer restoration times following storm outages. Net savings from smart meters are expected to accumulate to $1 billion over the life of the assets.
The environmental benefits of smart meters are substantial as well: we expect to be able to reduce distribution voltage by as much as 3%, resulting in a one-and-a-half percent reduction in energy consumption. Smart meters also make possible more interactive rate designs that send the right signals to customers to be efficient in their energy consumption. During storm events, our smart-meter infrastructure helps to avoid truck rolls to restored outages, further decreasing carbon emissions.
Sequenced with our smart meter rollout are two customer-focused investments totaling in aggregate more than $500 million:
- A new customer service system that will further enhance our energy efficiency and demand response programs, and
- A next-generation program that will advance online and mobile customer experiences.
Core Utility Business Strategy: Operational Excellence and Cost Optimization
Over its long history, Con Edison has operated the most reliable electric delivery system in the country by a sizeable margin. Nevertheless, we recognize that we can always improve. We are deploying sensors, using robotics to monitor our systems, applying analytics, and using other technologies to achieve the operational excellence that our customers deserve.
We invest more than $3 billion each year in our energy systems using a risk-based approach to maximize the value of each dollar spent. We use industry-changing practices such as conservation voltage optimization to give customers just the right amount of voltage they need at their outlets and not more. This helps us better manage peak demand and cut pollution.
Minimizing risk is key to operational excellence. We continue to invest in and enhance the security of our cyber and physical systems. We have participated in many large-scale drills with the government and other major utilities to prepare for cyber and physical threats to the U.S. energy grid and to develop technology to speed up restoration.
When it comes to a cleaner, more efficient future, implementation of our strategy will reduce harmful emissions and expand our portfolio of renewable energy production. Our targets include reducing SF6 (sulfur hexafluoride) emissions by 5% annually from current levels, keeping us well ahead of our commitment to the EPA. SF6 is a nontoxic, nonflammable greenhouse gas, with a warming potential more than 22,000 times higher than carbon dioxide, that can remain in the atmosphere for up to 3,200 years. We have a dedicated team and targeted programs to replace or retire equipment that uses SF6, including circuit breakers.
We also have a targeted effort to reduce methane (CH4) emissions from our natural gas distribution system. CH4 is the main constituent of natural gas. In 2016, Con Edison joined 40 other local distribution companies as a founding partner in the EPA’s Natural Gas STAR Methane Challenge program. The goal of this program is to reduce methane emissions by replacing a significant number of natural gas mains. CECONY’s goal is to replace 4% of its priority pipe, i.e., cast iron and unprotected steel mains (without cathodic protection), each year. This will put CECONY on target to replace all its priority pipe by 2038. O&R completed the retirement of its entire low-pressure gas system and continues to focus on the retirement of the remaining leak prone pipe by 2029.
Our Clean Energy Commitment
Our broad energy efforts are focused on helping address climate risks. We are the second-largest owner and operator of solar electricity production in North America. Our portfolio includes 2,800 MW portfolio of utility-scale solar- and wind-powered electric generation in 20 states. And in early 2021, we partnered in the development of a landmark 100-MW battery storage project in New York City. These efforts are part of the company’s commitment to lead and help deliver the transition to the clean energy future that our customers deserve and expect.
We are working together with government, our customers, industry, and other stakeholders to help rapidly reduce the use of fossil fuels. This is our vision for a clean, smart, and reliable energy future—for all our customers, our children, and future generations.
Tripling Energy Efficiency by 2030
- By avoiding unnecessary energy use, energy efficiency is the cleanest technology
- Plan to invest $1.5 billion in energy efficiency by 2025 to meet statewide targets
- Since 2009, more than 1.3 million customers have upgraded to more efficient equipment, saving about 9 million metric tons of carbon emissions, equal to taking more than one million cars off the road
100% Clean Electricity by 2040
- We want to use our expertise in developing, owning, and operating renewable generation and are seeking governmental authorization to add thousands of megawatts of medium- and large-scale renewable generation in New York
- We want to continue investing in new electric transmission and storage to support the increased use of clean energy resources
- Our support for customer-sited solar energy enabled 45,000 local solar installations as of the end of 2020
All-in Support for Electric Vehicles
- We will accelerate the move toward electric cars, trucks, and buses by providing the infrastructure to connect thousands of new public and customer-owned charging stations
- We have played a key role in the second-largest State-authorized electric vehicle make-ready initiative in the U.S.
- CECONY and O&R will invest more than $350 million by 2025 to develop EV charging stations in our service areas with the following targets:
- CECONY targets 18,539 Level 2 (L2) plugs and 457 DCFC plugs (fast charging)
- O&R targets 2,845 Level 2 (L2) plugs and 71 DCFC plugs (fast charging)
Accelerating Reduction of Fossil Fuels for Heating
- We will expand our efforts to reduce the use of fossil fuels for heating through energy efficiency, investing in emerging technologies, and our innovative clean-energy technologies, including our Smart Solutions program
- We are an anchor sponsor of a project called the Low Carbon Resource Initiative with Electric Power Research Institute exploring low-carbon fuels such as green hydrogen — a carbon-free fuel made from water by using excess energy from renewables like wind and solar. And we are investing in renewable natural gas.
Our Clean Energy Commitment is available on our website at the following link: https://www.coned.com/en/our-energy-future/our-energy-vision/our-energy-future-commitment
We successfully executed our first issuance of Green Bonds in March 2020. We issued one of the largest Green Bond offerings of $1.6 billion consisting of $600 million 10-year 3.35% debentures and $1,000 million 3.95% 30-year debentures. The proceeds were primarily used to support our smart meter and energy efficiency investments.
Con Edison Clean Energy Businesses
As part of our firm commitment to renewable energy, Con Edison’s Clean Energy Businesses continued growing by investing approximately $600 million in renewable projects in 2020, expanding its footprint to 20 states and operating a total of 2,868 megawatts of aggregate solar and wind capacity by the end of 2020. Our assets are comprised of 85% solar and 15% wind. Our Clean Energy Businesses is the second-largest producer of solar energy in the U.S. and seventh largest in the world.
Renewable energy sources, such as solar and wind, produce energy when the sun is shining or the wind is blowing. That makes battery storage especially important for storing power when it is produced and delivering it when it is needed. Battery storage can help ensure reliability and can reduce peak demand. Con Edison Clean Energy Businesses has a dedicated battery storage team and is actively integrating battery storage into new renewable development and operating assets when economical, and is offering battery storage for projects they are developing on behalf of their renewable energy and energy efficiency customers.
We continue to make our customers aware of energy efficiency improvements that will help them save money on their bills and give them more control over their energy usage. We work regularly with customers and regulators to test new models for the distribution of energy.
Additional Opportunities in Electric Transmission
To connect new renewable energy projects to customers, Con Edison is pursuing opportunities to own electric transmission. New York State, our principle state regulatory jurisdiction, has a goal of 70% renewable electricity by 2030, which will require significant investment in the state’s electric high-voltage system.
During the fourth quarter of 2020, CECONY filed with the New York State Public Service Commission to build three electric transmission projects at an estimated cost of $780 million. These projects will allow electric generating peaking plants owned by others that will not meet the 2025 NOx emission rules to close and will also enable the delivery of renewable generation from offshore and upstate. The first project would need to be in service by 2023, and the other two projects would need to be in service in 2025.
CECONY and O&R joined other New York utilities in a joint filing to develop additional electric transmission projects that implement the State’s climate mandates of the Climate Leadership and Community Protection Act and the Accelerated Renewable Energy Growth and Community Benefit Act.
Con Edison Transmission
Con Edison Transmission (CET) is the company’s FERC (Federal Energy Regulatory Commission) regulated subsidiary that invests in new electric transmission to support the increased use of clean energy resources, including offshore wind.
CET is a 45.7% owner in the NY Transco that will own a $600 million electric transmission line that will enhance the grid’s reliability and bring renewable energy to customers. That line is scheduled to be in service in December 2023, and along with another segment under construction, it will increase capacity by 1,850 MW.
We are interested in the transmission to support offshore wind, including associated underwater or “wet” transmission. We are not pursuing ownership of offshore wind generation currently. At this early stage, we have decided that the risks associated with building offshore wind in the U.S. are too high for our shareholders.
We do not consider the gas transmission assets that we own to be core to our business, and we will not be making further investments in this area. We announced in February 2021 that we are pursuing strategic alternatives for our 50% ownership interest in Stagecoach Gas Services.
Climate Change Resilience and Adaptation
To address the risks of climate change to our energy infrastructure, in December 2020, the company released our Climate Change Implementation Plan, a follow-up to our landmark 2019 Climate Change Vulnerability Study. The 36-month study, performed in conjunction with ICF International and Columbia University’s Lamont-Doherty Earth Observatory, evaluated our present-day infrastructure serving New York City and Westchester County, design specifications and procedures under a range of potential climate futures.
The plan reflects not only the experience of experts across Con Edison, but also the feedback, input, and experience of more than 50 stakeholders, including New York State Department of Public Service staff, municipal representatives, and environmental advocacy organizations.
The company selected science-based, future climate pathways to prepare our energy delivery systems for the upper end of potential climate change, beyond the goals set out in the Paris Agreement. The plan addresses mitigation measures in response to identified company-specific climate-driven risks:
- Sea level rise
- Coastal storm surge
- Inland flooding from intense rainfall
- Hurricane-Strength winds, and
- Extreme heat
The study currently estimates that we may need to invest between $1.8 billion and $5.2 billion by 2050 on targeted programs to protect our electric, gas and steam delivery systems and our customers from the impacts of climate change.
Con Edison has already begun using its climate change projections for decision making and planning processes. In addition, the company has formed a new executive-level committee focused on climate risk and resilience.
While the Climate Change Resilience and Adaptation Plan provides a strong foundation for action, Con Edison will assess its adaptation efforts over time based on new science and customer needs. The company will review these climate projections annually and update them at least every five years. The company will provide regular public reporting on its progress through its annual Sustainability Report and other disclosures.
Diversity, Equity, & Inclusion
At Con Edison, we have a long-standing commitment to diversity, equity, and inclusion. Our vision is to be a company whose values and behaviors foster a culture of inclusion and respect for all. Our corporate Diversity, Equity & Inclusion (DEI) strategy sets the foundation to achieve this vision and drives all our efforts to foster an inclusive and equitable workplace. Our strategy anchors our direction to ensuring that our employees feel seen, heard, and valued for their unique and individual talents.
Our Diversity, Equity & Inclusion Strategy is built on four key elements – ongoing learning and competency building; inclusive and visible leadership support; reviewing our systems, policies, and procedures to eliminate potential barriers to inclusion; celebrating and acknowledging the diversity of our workforce.
Last summer, after the murders of George Floyd and Breonna Taylor, we, like many other companies, used this time as an opportunity for self-reflection, asking, what more can we do to further support our employees and address any potential inequities and bias that may exist in our workplace. To that end, we developed a 14-point Action Plan, built on a two-pronged approach: 1) we are focused on data-driven change to ensure that our employees at all levels reflect the diversity of our communities; and 2) we are also focused on enabling culture transformation to drive the behaviors and mindsets that support a diverse, equitable and inclusive workplace. Our Action Plan is supported by our newly formed Diversity & Inclusion Task Force – a cross functional team of employees that will look at demographic representation, identify any gaps, review policies and procedures, and help to further advance the overall experience of inclusion for all employees.
Our leaders, Employee Resource Groups and local D&I councils are actively engaged in open dialogue about race, racism, and systemic inequality, and have committed to learning more about how to foster safe spaces where these conversations can continue. While we are proud of the progress that we are making, we are still not where we want to be. There is more work to be done and we are fully committed.
Maintaining Sound Governance Practices: Setting Priorities and Strategy
The Company has a governance structure and strategy in place to harness the skills and intellect of our employees consistent with sound, sustainable business principles.
As disclosed in our Proxy Statement, the Company is firmly committed to sustainability that is broadly overseen by the Board (see Corporate Sustainability). The Board reviews and discusses various sustainability topics throughout the year and routinely considers environmental issues (including climate issues) and assesses how they impact the Company’s operations, strategies, and risk profile.
In addition, the Board has delegated to the appropriate committees, responsibility for the specific sustainability categories relating to the oversight of risks with which such committees are charged. The Safety, Environment, Operations and Sustainability Committee oversees sustainability considerations relating to safety and the environment and reviews the Company’s Annual Sustainability Report prior to its publication. In discharging its responsibilities, the Safety, Environment, Operations and Sustainability Committee reviews, at each of its meetings, certain key performance indicators relating to climate risk, including energy efficiency and environmentally beneficial electrification. The Corporate Governance and Nominating Committee is charged with sustainability matters relating to governance. The Management, Development, and Compensation Committee’s responsibilities include oversight of sustainability considerations relating to human capital management. The Management, Development, and Compensation Committee annually reviews performance results as well as proposed performance indicators for the following year. Committees not specifically tasked with oversight of sustainability also periodically review matters related to sustainability.
To help guide and oversee our sustainability strategy, we have developed a governance structure that extends from our board of directors to the employee level. Our structure includes:
- Safety, Environment, Operations, and Sustainability Committee of the Board
- Vice president-level Environment, Social, and Governance Committee
We engaged BSR, a leading sustainability consulting firm, to assist us in developing our sustainability materiality assessment and determine our key sustainability priorities, and in 2019 we worked with New York University in refreshing that assessment and resulting priorities.
We have integrated our sustainability priorities and will include the integration of the Climate Change Implementation Plan, with our long-range planning. Our 20-year plan for our electric and gas businesses is designed to help us navigate today’s challenges while preparing for changes in the energy landscape. The plans are available on our website at the following links:
To hear more about our strides toward a more sustainable future, visit https://soundcloud.com/con-edison