CONSOLIDATED EDISON CO OF NEW YORK INC

New York State’s Clean Energy Goals

In 2019, New York State enacted the Climate Leadership and Community Protection Act (CLCPA) that established a goal of 70 percent of the electricity procured by load serving entities regulated by the NYSPSC to be produced by renewable energy systems by 2030 and requires the statewide electrical demand system to have zero emissions by 2040. The law also codified state targets for energy efficiency (end-use energy savings of 185 trillion British thermal units below 2025 energy-use forecast), offshore wind (9,000 MW by 2035), solar (6,000 MW by 2025) and energy storage (3,000 MW by 2030, that was subsequently increased by the NYSPSC to 6,000 MW by 2030). See “Energy Storage,” below. The CLCPA established a climate action council that made recommendations for meeting the statewide greenhouse gas (GHG) emission reduction requirements through displacing fossil-fuel fired electricity with renewable electricity, transitioning heating and transportation to lower GHG impact fuels (including substantial electrification), implementing energy efficiency measures and providing 35 percent to 40 percent of the benefits of CLCPA-related investments to disadvantaged communities. As required by the law, the New York State Department of Environmental Conservation (NYSDEC) adopted regulations establishing statewide GHG emissions limits that are 60 percent of 1990 emissions levels by 2030 and 15 percent of 1990 emissions by 2050. The Utilities are unable to predict the impact that the implementation of this law will have on them.

In January 2025, CECONY published its integrated long-range plan, which sets forth CECONY’s planning and investment strategy to provide safe, reliable and resilient service to customers and to support the decarbonization of energy use for electric, gas and steam customers, aligning with the greenhouse gas emissions reduction targets mandated by the CLCPA. Implementing this strategy will require capital expenditures above historic norms. While the details of CECONY’s investments will continue to be addressed in its rate cases or other filings, subject to the approval of the NYSPSC, CECONY projects that $72 billion of capital expenditures will be needed between 2025 and 2034 to implement its strategy.

Offshore Wind

In an effort to meet the CLCPA’s offshore wind goals, load serving entities, such as CECONY and O&R, will be required to purchase offshore wind renewable energy credits when NYSERDA's offshore wind projects begin operation.

NYSERDA issued competitive solicitations for offshore wind energy resulting in two projects that are in development, Sunrise Wind (924 MW), a project that began construction in June 2024 and that is expected to enter commercial operation in 2026 and Empire Wind 1 (810 MW), a project that is expected to enter commercial operation in 2027 and connect to the New York City electrical grid at CECONY’s Gowanus substation.

In December 2025, the United States Department of the Interior issued stop work orders to a number of awarded offshore wind projects, including Sunrise Wind and Empire Wind 1, citing national security risks. In January and February 2026, a federal district judge granted Empire Wind 1 and Sunrise Wind a preliminary injunction that allowed construction activities to resume.

Building Electrification and Energy Efficiency

In January 2020, and updated in August 2022, the NYSPSC issued an order directing energy efficiency targets and budgets for New York utilities. The order approved electric and gas energy efficiency programs and heat pump budgets for building electrification, and associated targets, for the years 2020 through 2025 to meet the NYSPSC’s goal of reducing electric use by 3 percent annually and gas use by 1.3 percent annually by 2025. The order and subsequent update authorized budgets for the years 2020 through 2025 for: electric energy efficiency programs of $688 million and $71 million for CECONY and O&R, respectively; gas energy efficiency programs of $338 million and $17 million for CECONY and O&R, respectively; and heat pump programs of $1,106 million and $15 million for CECONY and O&R, respectively. CECONY’s 2023-2025 electric and gas rate plans allowed it to recover the costs of heat pumps for building electrification and energy efficiency expenditures, including a full rate of return, in rates from customers. See Note B to the financial statements in Item 8.

In May 2025, the NYSPSC issued two orders that established budgets for CECONY’s and O&R’s energy efficiency and building electrification programs (formerly known as New Efficiency New York) for 2026-2030 with aggregate budgets of $2,138 million and $110 million, respectively. The aggregate amounts are comprised of average annual budgets of: $300 million and $19 million for electric energy efficiency and heat pump programs for CECONY and O&R, respectively, and $128 million and $3 million for gas energy efficiency programs for CECONY and O&R, respectively. Building electrification and energy efficiency expenditures are treated as regulatory assets with recovery including the weighted average cost of capital and beginning on March 1, 2026 collected via a surcharge rather than included in base rates.

Electric Vehicles

In July 2020, the NYSPSC established light-duty electric vehicle make-ready and other infrastructure programs that included budgets of $290 million and $24 million for CECONY and O&R, respectively, through 2025. In November 2023, the light-duty infrastructure and other programs, including medium and heavy-duty make-ready pilot projects and a new micromobility infrastr ucture incentive program, were expanded to approximately $823 million for CECONY and $56 million for O&R. The November 2023 order also permitted the make-ready programs to extend beyond 2025 until targets are met or authorized budgets depleted. The NYSPSC authorized CECONY and O&R to recover these costs, including a full rate of return, through surcharge mecha nisms and subsequently in rates from customers.

In July 2022, the NYSPSC issued an order that provided CECONY and O&R with up to a total of $31 million and $5.8 million, respectively, through 2025, for implementation of residential vehicle managed charging programs and administration costs. The order also provided CECONY and O&R with authorization to offer incentives to encourage electric vehicle charging to occur overnight and during off-peak times totaling approximately $71.8 million and $8.2 million, respectively, through 2025, that would be recovered through the respective company’s revenue reconciliation mechanisms. In August 2025, the NYSPSC authorized the continuance of the residential vehicle managed charging programs beyond the original end date of December 31, 2025 as it conducts a program review.

In October 2022, the NJBPU approved RECO’s electric vehicle make-ready program that includes a budget of $7.6 million through 2026 for electric vehicle infrastructure and related program costs. The NJBPU authorized RECO to recover these costs, including a full rate of return, in rates from customers.

In November 2023, the NYSPSC issued an order that provides CECONY and O&R with up to $432 million and $18 million through 2026, respectively, for the implementation of commercial managed charging programs and demand charge rebates, participant incentives and administration costs. The NYSPSC authorized CECONY and O&R to recover these costs, including a full rate of return, through surcharge mechanisms and subsequently in rates from customers.

Energy Storage

In June 2024, the NYSPSC issued an order adopting an updated roadmap for achieving 6,000 MW of statewide energy storage resource deployment by 2030 and recognized the need for additional statewide energy storage of 12,000 MW by 2040 and 17,000 MW by 2050. In October 2024, New York utilities, including CECONY and O&R, completed a study of the potential of energy storage to provide non-market transmission and distribution services and identified services for which energy storage is suitable.

CECONY owns and operates three energy storage projects located in Ozone Park, Queens, Fox Hills, Staten Island, and Brownsville, Brooklyn that are designed to store 1.5 MW/12 MWh, 7.5 MW/30 MWh, and 5.8MW/23.2MWh of energy, respectively. CECONY has procured 185 MW of energy storage projects under its Utility Dispatch Rights program and is evaluating proposals for additional projects. These long-term contracts provide CECONY with the right to dispatch energy from the storage projects for both wholesale market and grid purposes.

O&R owns and operates one energy storage project located in Pomona, New York that is designed to store 3MW / 12MWh of energy and is engaged in procuring for Utility Dispatch Rights in its service territory.

The Utilities expect to recover the cost of energy storage services procured under their Utility Dispatch Rights programs, including a full rate of return, in rates and surcharges from customers.

Thermal Energy Networks

In April 2024, the NYSDPS approved CECONY’s and O&R’s December 2023 Stage 1 filings (Project Scope, Feasibility, and Stakeholder Engagement) for utility-scale thermal energy network pilot projects. The NYSDPS also confirmed CECONY and O&R are authorized to incur costs of $17.1 million and $4.6 million, respectively, through the completion of Stage 2 (Pilot Project Engineering Design and Customer Protection Plan). These projected costs are within the budgets previously proposed by CECONY and O&R in December 2023 of $255 million and $46 million, respectively. In December 2024, the NYSPSC issued an order approving CECONY’s May 2024 petition seeking $6 million for certain unaddressed costs that are necessary to complete Stage 2 of its utility thermal energy network pilot projects, in addition to the $17.1 million described above. The remaining proposed budget amounts are subject to approval by the NYSPSC.

In July 2025, CECONY and O&R filed with the NYSPSC their final Pilot Engineering Design and Customer Protection Plans (Stage 2 Filings) for the utility-scale thermal energy network (UTEN) pilot projects. CECONY and O&R requested authorization to proceed to Stage 3 (Customer Enrollment and Construction). The total estimated costs for the UTEN projects have increased to $415 million (from $255 million) and $112 million (from $46 million) for CECONY and O&R, respectively. CECONY and O&R were previously authorized to incur costs of $23.1 million and $4.6 million, respectively. The remaining proposed budget amounts in excess of the previously authorized amounts are subject to approval by the NYSPSC.

Distribution System and Distributed Energy Resources

The NYSPSC is directing development by New York electric utilities of a distributed system platform to manage and coordinate distributed energy resources (DER) in their service areas under NYSPSC regulation and to provide customers, together with third parties, with data and tools to better manage their energy use. Although DER has the ability to reduce load on the system, increased deployment of bidirectional DER may lead to DER hotspots that trigger system upgrades. The NYSPSC has required the Utilities to file distributed system implementation plans and ordered the Utilities to develop demonstration projects to inform distributed system platform business models. As of December 31, 2025, CECONY and O&R had three and one active demonstration projects, respectively.

In New York, net energy metering (NEM) compensates kilowatt-hours exported to the electric distribution system at the full-service rate for production, delivery, taxes and fees. NYSPSC’s policy is to phase in changes to limit annual bill increases on non-participating customers to two percent. In addition, NEM projects interconnected on or after January 1, 2022 are charged for their share of energy efficiency and other public policy benefit programs.

New York City’s Clean Energy Goals

In 2014, New York City announced a goal to reduce GHG emissions 80 percent below 2005 levels by 2050. In May 2019, New York City enacted a package of legislation known as the Climate Mobilization Act, that includes provisions intended to reduce GHG emissions from large buildings by 40 percent from 2005 levels by 2030. Building owners may achieve compliance through operational changes, building retrofits, the purchase of GHG offsets, the purchase of renewable energy credits and the use of clean distributed energy resources.

Federal Regulation of GHG Emissions

Section 111 of the Clean Air Act authorizes the U.S. Environmental Protection Agency (EPA) to set standards of performance (emissions limits) for new sources of air pollution, including GHG emissions, and establish guidelines for states to issue standards of performance for existing sources. These standards of performance are based on technology that the EPA determines to be the best system of emission reduction (BSER).

In April 2024, the EPA issued a final Section 111 rule (Section 111 Rule) regulating GHG emissions from new electric-generating gas-fired combustion turbines and existing coal, oil, and gas-fired boilers used to generate electricity. The Section 111 Rule included carbon capture and sequestration (CCS) at a 90% capture rate as the BSER for certain new gas-fired combustion turbines and certain existing coal-fired boilers. The Section 111 Rule did not cover existing electric-generating, gas-fired combustion turbines. After the EPA issued the Section 111 Rule, petitioners challenged it in the United States Court of Appeals for the District of Columbia Circuit (D.C. Circuit). Con Edison, as part of a coalition of public and private utilities, intervened in this litigation, arguing that the EPA had the authority to set the BSER, but the coalition took no position as to whether CCS was achievable in the timeframe set forth in the Section 111 Rule. In February 2025, the D.C. Circuit held the case in abeyance at the EPA's request. In June 2025, the EPA proposed a rule (Section 111 Repeal Rule) which would repeal all Section 111 GHG emissions standards from fossil fuel-fired power plants, including those found in the Section 111 Rule. The Section 111 Repeal Rule also contained a narrower, alternative proposal that would repeal the CCS-based and certain other GHG emissions standards found in the Section 111 Rule.

In February 2026, the EPA issued a final rule which rescinded its 2009 Greenhouse Gas Endangerment Finding under Section 202(a)(1) of the Clean Air Act and eliminated all existing GHG emissions standards for motor vehicles. While the 2009 endangerment finding did not directly regulate the utility industry, the EPA could apply the same legal theories in this final rule to other federal regulations on GHG emissions, including those under Section 111. After the EPA issued the final rule, certain entities filed litigation in the D.C. Circuit challenging the rescission. Additional litigation is expected to be filed.

The Companies are unable to predict the impact that the above matters will have on them.

See "Federal Regulation," above.