Con Edison(ED) - 2022 Q4 - Annual Report

Financial Performance - Con Edison reported a net income of $1,660 million or $4.68 per share in 2022, compared to $1,346 million or $3.86 per share in 2021, reflecting a 23.3% increase in net income [26]. - Adjusted earnings for 2022 were $1,620 million or $4.57 per share, up from $1,528 million or $4.39 per share in 2021, indicating a growth of 6.0% [26]. - The company reported a significant impairment loss related to investments in various projects, impacting adjusted earnings [36]. - Adjusted earnings for 2022 exclude the tax impact on the parent company of HLBV accounting, resulting in a reduction of $(4) million or $(0.02) per share [39]. - The combined federal and state income tax rate for 2022 was 31%, with adjusted earnings reflecting this rate [39]. - Losses recognized due to partial impairments of investments in Stagecoach Gas Services LLC and Mountain Valley Pipeline, LLC were noted, impacting overall financial performance [39]. - The company reported a goodwill impairment related to its investment in Honeoye Storage Corporation, impacting financial results [39]. - The adjusted earnings per share for 2021 also excluded the tax impact of $(9) million or $(0.02) related to HLBV accounting [39]. Capital Investments and Financial Strategy - The Utilities invested $4,001 million in 2022 to upgrade energy delivery systems, with planned investments of $4,675 million, $4,840 million, and $4,957 million for 2023, 2024, and 2025 respectively [26]. - The company plans to meet its capital requirements for 2023 through internally-generated funds and proceeds from the sale of Clean Energy Businesses, aiming to repay $1,250 million of parent company debt in 2023 [27]. - Con Edison plans to issue up to $1,400 million of long-term debt at the Utilities in 2023 and approximately $2,600 million in aggregate during 2024 and 2025 [27]. - The overall financial strategy includes a focus on divesting non-core assets to enhance operational efficiency and profitability [39]. - The total capital requirements for Con Edison are estimated to be $5,484 million in 2023, compared to $4,905 million in 2022, indicating a 11.8% increase [136]. Clean Energy Initiatives - Con Edison emphasizes a commitment to a clean energy future and operational excellence as part of its mission [22]. - Con Edison Clean Energy Businesses invested $399 million in renewable electric projects in 2022, with a sale agreement to RWE Renewables America expected to close by the end of Q1 2023 [26]. - The anticipated sale of Clean Energy Businesses was classified as held for sale as of December 31, 2022, impacting the financial outlook [26]. - The anticipated sale of the Clean Energy Businesses will incur transaction costs of $0.14 per share, totaling $48 million before tax [39]. - The Clean Energy Businesses have approximately 3,300 megawatts (AC) of renewable energy projects in the U.S. [54]. - Total renewable electric volumes produced increased from 3,754 million kWh in 2018 to 8,206 million kWh in 2022, reflecting a growth of 118.8% [125]. - Solar energy production rose from 2,680 million kWh in 2018 to 6,926 million kWh in 2022, an increase of 158.5% [125]. - CECONY has a goal to deploy 3,000 MW of energy storage by 2030, with an interim target of 1,500 MW by 2025, and has contracted for 100 MW of energy storage services [166]. Customer Service and Operations - Con Edison provides electric service to approximately 3.6 million customers in New York City and most of Westchester County, covering an area of about 660 square miles with a population exceeding 9 million [49]. - CECONY delivers gas to approximately 1.1 million customers in Manhattan, the Bronx, parts of Queens, and most of Westchester County [50]. - CECONY operates the largest steam distribution system in the U.S., producing and delivering approximately 17,427 million pounds of steam annually to around 1,530 customers in parts of Manhattan [51]. - CECONY's total deliveries in its franchise area amounted to $9,751 million in 2022, compared to $7,971 million in 2018, indicating a growth of about 22.3% [84]. - The company expects to meet its electricity supply obligations through a combination of purchased electricity and generation from its facilities, with a focus on reducing cost volatility for customers [87]. Regulatory and Compliance - The NYSPSC regulates the Utilities, setting terms of service and rates, with the authority to impose penalties for violations of state utility laws [58]. - The NYSPSC authorized CECONY to issue up to $4,025 million in debt securities through 2025, with $1,450 million issued as of December 31, 2022 [148]. - The NYSPSC approved $2,000 million for statewide electric and gas energy efficiency programs from 2020 to 2025, with specific budgets for CECONY and O&R [162]. - The NYSPSC has authorized CECONY to recover costs related to climate change adaptation through a climate resiliency cost recovery surcharge [174]. Environmental and Sustainability Efforts - CECONY's direct GHG emissions have decreased by over 50% from a 2005 baseline of 6.0 million metric tons, reflecting emission reductions from various projects [176]. - CECONY is required to conduct a climate change vulnerability study by September 2023 and develop a resiliency plan by November 2023 [174]. - The estimated potential liability for the completion of site investigation and cleanup of known contamination on manufactured gas sites ranges from $710 million to $2,500 million [187]. - CECONY has initiated remedial investigations at 51 manufactured gas sites, with 15 sites receiving No Further Action letters from the NYSDEC [186]. Workforce and Employee Engagement - Con Edison had a total of 14,319 employees as of December 31, 2022, with 12,717 at CECONY and 1,131 at O&R [212]. - The company's voluntary attrition rate in 2022 was approximately 8.2%, with 35% of turnover attributed to retirements [213]. - Women represented 22.6% of the total workforce, while people of color accounted for 51.7% [214]. - Employees spent over 600,000 hours in instructor-led, leadership, and skill-based training during 2022 [215]. - Con Edison emphasizes a strong safety culture, with a dedicated Learning Center for employee training [215].