con edison, inc. berenson & co. transmission and...

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Con Edison, Inc. Berenson & Co.Transmission andDistribution Seminar

New York, NYJanuary 9, 2008

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Forward-Looking Statements

This presentation contains certain forward-looking statements of future expectations and financial measures not determined in accordance with Generally Accepted Accounting Principles (non-GAAP) financial measures. Actual results might differ materially from those projected in the forward-looking statements because of factors such as those identified in reports the company has filed with the Securities and Exchange Commission.

For more information, contact:

Jan Childress, Director, Investor Relations 1-212-460-6611Ellen Socolow, Manager, Investor Relations 1-212-460-4986

www.conEdison.com

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Long Tradition, Solid Performance

Con Edison, Inc. Parent Net Loss: $14 million – (2)%

Con Edison of New YorkNet Income: $659 million – 91%

Orange and RocklandNet Income: $39 million – 6%

Con Edison SolutionsNet Income:

$14 million – 2%

Con Edison Energy

Net Income:$0 million – 0%

Con Edison Development

Net Income:$24 million – 3%

Regulated Utilities

Competitive Energy Businesses

Note: For nine months ended September 30, 2007

Note: For nine months ended September 30, 2007

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Sale of Generating Plants

• Announced December 10, 2007

• 1,706 megawatts sold for $1.477 billion– Located in NH, MA, NJ, and MD

• $572 million pre-tax gain– net of transaction expenses

• $667 million in cash proceeds– net of repayment of project debt, taxes, and transaction

expenses

• Two stage closing expected during first half of 2008

Con Edison Development

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Regulated Businesses are the Core ofCon Edison, Inc.

• 3.2 million electric customers

• 1.1 million gas customers

• 1,800 steam customers

• 709 MW of regulated generation

Con Edison of New York

• 296,000 electriccustomers

• 126,000 gas customers

Orange and Rockland

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Composition of Rate Base(as of September 30, 2007)

Rate Base ($ millions)

Orange and Rockland

Pike Gas $ 1Pike Electric $ 9Rockland Electric

(distribution) $ 130(transmission) $ 20

O&R Gas $ 225O&R Electric $ 425


Electric $ 11,310Gas $ 2,340Steam $ 1,360

Total Rate Base $ 15,820

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Con Edison, Inc. Accounts for 44.5% ofNew York State Electric Peak

• CECONY expects to deliver 41% of NYS 2008 peak consumption

• O&R expects todeliver 3.5% ofNYS 2008 peak consumption

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New York City Tops All U.S. Cities in Attracting New Residents

Source: Census Bureau

3,849,378 +154,884

2,833,321 -62,700

2,144,491 +172,936

1,512,986 +191,314

1,448,394 -69,156

1,296,682 +136,738

1,232,940 +44,317

929,936 +34,619

New York

Los Angeles

Chicago

Houston

Phoenix

Philadelphia

San Antonio

Dallas

San Jose

1,256,951 +33,535San Diego

10 largest U.S. cities

8,214,426 +205,750

Population as of 2006

Change 2000 – 2006


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New York City and WestchesterHousing Permits


2004

8,987

Represents New32-Year Record for

New York City

30,000

25,000

20,000

15,000

10,000

5,000

0

Number of New Dwelling Units

2003200220012000199919981997 20062005

35,000

40-year averageof 14,434 forNew York City

Source: U.S. Census Bureau

1,674

New York City Westchester

2007

Total to Date Indicated

30,92731,599 1,0061,364Nov.

31,071Nov.

28,830

Nov.29,935

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New York City Job Growth By SectorCon Edison of New York

Source: New York State Department of Labor

15,800

10,300

10,100

6,200

5,500

5,200

4,300

1,600

600

Professional and business services

Financial services

Health care

Construction

Trade, transportation, and utilities

Leisure and hospitality

Government

Information

Other services

(2,100)Educational services

2,400Social assistance

For the 12-month period ended November 2007

(5,400)Manufacturing

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New Development is Helping to Spur Growth in Electric Peak Usage


TRUMP PLACE

NEW YORK TIMES BUILDING

MILLENIUM TOWERS

FLUSHING COMMONS

SILVERCUP WEST111 CENTRAL PARK

NORTH

ATLANTIC YARDS

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Proliferation of Electric Devices is Driving Higher Usage in Homes


2002 – 2007 2008 – 2012Forecast

650,000

1,000,000

60,000

500,000

900,000

40,000

Growth inPersonal Home Computers

Growth inRoom Air Conditioners

Growth inCentral Air Conditioners

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New Office Buildings Wired forHigher Consumption


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New York City Additional Capacity Requirements for 2012 – 2016

New York State Independent System Operator Comprehensive Reliability Plan

300 MWRest of State

500 MWLower Hudson Valley

1,000 MWNew York City

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Infrastructure Investment

Reliability and Maintenance

57%

Expansion

43%


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Unparalleled ReliabilityCon Edison of New York

2006 Customer Interruption Rate

0.00

0.160.25

0.50

0.75

1.00

1.25

1.50

1.75

2.00

2.25

0.47

0.600.66 0.68

0.780.89 0.92 0.93

1.07 1.08

1.291.36 1.36

1.42

2.00

Average Rate = 0.85

1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16Con Edison

Major Utilities

Source: Salt River Project – Large City Survey

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The Electric System

Generating Station(electricity generated at 13.8 to 22.0 kV)

Transformers(voltage stepped up to transmission voltage)

Transmission Substation

Area Substation(voltage stepped down to distribution voltage)

Transformers(voltage stepped down to 480, 208, or 120 V)

Feeders

Connection To Others

Network Customers(residential, commercial, industrial, hospitals, schools, and street and traffic lights)

Radial Customers

Transmission Distribution


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Under the StreetsWhat is Underground?


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Network Customersresidential, commercial, industrial, hospitals, schools, and street and traffic lights

Area Substationvoltage is stepped down from transmission for distribution by feeders

Transformersvoltage is stepped down for distribution to residential and commercial customers

Feeders


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Major Substation Construction Program 1948 – 2017


Planned Construction

1948

1950

1952

1954

1956

1958

1960

1962

1964

1966

1968

1970

1972

1974

1976

1978

1980

1982

1984

1986

1988

1990

1992

1994

1996

1998

2000

2002

2004

2006

2008

2010

2012

2014

2016

Transmission Switching Station

DistributionSubstation

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Substations Currently Exist In Neighborhoods Throughout The City


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Power TransformerCon Edison of New York

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M29 Transmission Line Project

• 9.5-mile, 345-kV line connecting Westchester with upper Manhattan

• Will add 350 MW to New York City’s import capability– Improve the system’s reliability

– Allow increased delivery of lower-cost power to customers

• NYPSC approved Article VII certificate on August 23, 2007

• Received NYPSC approval of Environmental Management and Construction Plan in December 2007

• Expect to be in service by summer 2010


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Future System: Improve Capital Efficiency andReduce Capital Expenditures• Lower losses and increase utilization

– Use fewer wires and transformers

– Increase utilization of existing assets


• Reduce capital expenditures– Defer construction of new assets

– Reduce total equipment required

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Regulatory Update

• Gas Rate Plan– Three year plan: October 1, 2007 – September 30, 2010

– Rate increases of $67.5 million in each rate year, 9.7% ROE

• Electric Rate Filing – May 2007– Three year rate plan: April 1, 2008 – March 30, 2011

– Requested $1,207 million rate increase in year one, 11.5% ROE

• Steam Rate Filing – November 2007– Three year plan: October 1, 2008 – September 30, 2011

– Requested $126.6 million rate increase in year one, 11.5% ROE


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Regulatory Update

• O&R Electric Rate Order– No change in rates effective March 1, 2007, 9.1% ROE

– Increased allowance of $13.1 million for pensions and OPEBs

• O&R Electric Rate Filing – August 2007– Three year rate plan: July 1, 2008 – June 30, 2011

– Requested rate increase of $47.8 million in rate year one, 11.5% ROE

• Rockland Electric– New rates effective April 1, 2007

– Rate increase of $6.4 million in rate year one, 9.75% ROE

Orange and Rockland

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Key Regulatory Dates

Jan. 8-9, 2008 CECONY – Electric Public statement hearings

Jan. 11, 2008 O&R – Electric Rebuttal testimony

Jan. 15, 2008 CECONY - Steam Procedural conference

Jan. 16,17,22,23, 2008 CECONY – Electric Public statement hearings

Jan. 2008 (anticipated) CECONY – Electric ALJ's recommended decision

Feb. 4-6, 2008 O&R – Electric Hearings

Feb. 29, 2008 O&R – Electric Initial briefs

Mar. 12, 2008 O&R – Electric Reply briefs

Mar. 19, 2008 CECONY – Electric Target date for final order

Apr. 1, 2008 CECONY – Electric New rates go in effect

May 2008 (anticipated) O&R – Electric ALJ's recommended decision

Jun. 30, 2008 O&R – Electric Target date for final order

Jul. 1, 2008 O&R – Electric New rates go in effect

Oct. 1, 2008 CECONY - Steam New rates go in effect

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Infrastructure Investment is DrivingRate Base Growth

2002

2,200

2,000

1,800

1,600

1,400

1,200

1,000

800

600

400

200

02003 2004 2005 2006 2007 2008 2009 2002

22,000

20,000

18,000

16,000

14,000

12,000

10,000

8,000

6,000

4,000

2,000

02003 2004 2005 2006 2007 2008 2009

CECONY O&R

Regulated Capital Expenditures ($ millions) Regulated Rate Base ($ millions)

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Solid Balance Sheet(as of September 30, 2007)

Long-TermDebt46.5%$8,004

Capital Structure ($ millions)

Target Equity Ratio 48%–50%

CommonEquity52.3%$8,990

Preferred Stock1.2%$213

• May 2007 – issued 11 million common shares.Net proceeds of $558 million.

• May 2007– redeemed $325 million 7 1/4% CEI PINES.

• August 2007 – issued $525 million in new debt.

• Continued issuances through DRIP andemployee stock plans.

2007

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A Compelling Dividend Record: 33 Consecutive Years of Dividend Increases

Annualized Dividend 1975 - 2007

$0.50

$1.00

$1.50

$2.00

$2.50

1975

1977

1979

1981

1983

1985

1987

1989

1991

1993

1995

1997

1999

2001

2003

$0.30

$2.32Only utility in S&P 500 with 25 or more consecutive years of dividend increases

2005

2007

$0.00

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Top Tier Credit Rating and Dividend Yield

1 Nicor AA 4.13 2.03

2 Vectren A 4.27 2.333 NSTAR A 3.83 3.904 Consolidated Edison A- 4.70 13.405 Duke Energy A- 4.29 25.896 Southern A- 4.13 29.577 FPL A- 2.31 28.878 Integrys BBB+ 5.05 3.989 SCANA BBB+ 4.05 5.07

10 Otter Tail BBB+ 3.32 1.0511 PG&E BBB+ 3.07 17.7512 MDU Resources BBB+ 2.15 4.9213 Wisconsin Energy BBB+ 2.03 5.7714 Sempra Energy BBB+ 1.94 16.6815 Constellation Energy BBB+ 1.70 18.48

MarketCap

($ billions)

S&P Senior Unsecured

Credit Rating

DividendYield(%)

Source: SNL Financial and S&P; dividend yield and market cap data as of 12/6/07; credit ratings as of 11/30/07

Note: Includes utilities with market cap greater than $1 billion.

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Con Edison, Inc. Investment Thesis

T&D FocusedMore than 90% of earnings from growing regulated businesses

+Strong Balance SheetSolid “A”credit rating

High Yield5% yield with 33 consecutive years of dividend increases

Solid Total Return Potential

+ =

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Appendix

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Summary of Rate Plans


Electric Apr. 2005 – Yr. 1 – $9.3 b Yr. 1 – $104.6 m Yr. 1 – $128 m $60 m of — 11.4% – 13%: 50/50Mar. 2008 Yr. 2 – $9.6 b Yr. 2 – None Yr. 2 – $173 m annual TCC >13%: 25/75

Yr. 3 – $10.3 b Yr. 3 – $220.4 m**** Yr. 3 – $249 m revenues

Gas Oct. 2007 – Yr. 1 – $2.3 b Yr. 1 – $67.5 m***** Yr. 1 - $2 m $35 m – $50 m 9.7% >10.7%: 50/50Sept. 2010 Yr. 2 – $2.5 b Yr. 2 – $67.5 m Yr. 2 - $0 m of non-firm

Yr. 3 – $2.7 b Yr. 3 – $67.5 m Yr. 3 – $(1) m revenues: 20%> $50 m: 25%

Steam Oct. 2006 – Yr. 1 – $1.3 b — $53 m — 9.8% 11% – 12%: 50/50 Sept. 2008 Yr. 2 – $1.3 b over 2 yrs >12%: 25/75

Orange and Rockland

Electric Mar. 2007 – Yr. 1 – $43.6 b — $(13.1) m — 9.1% —Jun. 2008

Gas Nov. 2006 – Yr. 1 – $235 m Yr. 1 – $6.5 m $(3) m — 9.8% 11% – 12%: 50/50 Oct. 2009 Yr. 2 – $242 m Yr. 2 – $6.5 m over 3 yrs 12% – 14%: 35/65

Yr. 3 – $251 m Yr. 3 – $6.3 m >14%: 0/100

RECO Apr. 2007 – Yr. 1 – $132 m Yr. 1 – $6.4 m $(0.6) m — 9.75% —Mar. 2010 per yr

Effective Rate Rate Amortization Other Authorized Earnings Sharing Terms ***Period Base * Increases ** of Credits Increases ROE (Shareholders/Customers)

(continued)

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Summary of Rate Plans — Footnotes

* Under Con Edison of New York’s electric rate plan, the company is allowed to accrue a full return on increases in net electric transmission and distribution plant above the levels reflected in rates. For the period from April 1, 2005 through December 31, 2006, actual net transmission and distribution has exceeded the net transmission and distribution reflected in rates by $1 billion. The company accrued revenues of $115 million and $38 million in 2006 and 2005, respectively, to reflect the revenue requirement impact of net transmission and distribution difference. For the nine months ended September 30, 2007, the company recognized $138 million in revenues from this rate mechanism compared with $80 million through September 2006.

** The Orange and Rockland gas rate plan provides for rate increases in base rates of $12 million in the first year, $0.7 million in the second year, and $1.1 million in the third year. To phase in the effect of the increase for customers, the rate plan provides for O&R to accrue revenues for, but defer billing to customers of, $5.5 million of the first rate year increase by establishing a regulatory asset which, together with interest, will be billed to customers in the second and third years. This chart reflects the phase-in of those rate increases.

*** Subject to limitation for cost reconciliations.

**** $60 million accrued to income in rate year two.

***** Includes $14 million for the energy efficiency program administered by NYSERDA.

(continued)

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Summary of Electric Rate Filing

• Three year rate plan

• Proposed rate increase of $1,207 million, or 11.4%– Proposed rate year 2 increase – $335 million, or 3.2%

– Proposed rate year 3 increase – $390 million, or 3.7%

• ROE requested – 11.5%

• Equity ratio forecast – 48.7%

• True-up reconciliations requested


Rebuttal Testimony

Filing with PSC

Staff Case Briefs Hearings/Recommended

Decision

Brief on Exception

Final Rate Order

New Rates in Effect

Evidentiary Hearings

May 4, 2007

Sept. 7,2007

Sept. 28,2007

October 2007

Nov. – Dec. 2007

January2008

February2008

March2008

April 1, 2008

Possible Settlement Negotiations

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Major Components of Proposed Rate Increase($ millions)

Impact of current rate plan $ 515Expiring credits – $250Plant additions – $195Pensions, property taxes – $50New deferrals/credits – $20

New and expanded operating programs 284 $ 44 $ 45Public safety, reliability, environmental remediation,interference, other

New infrastructure investments 235 163 204Return on equity 115 – –Depreciation 100 55 57Taxes – 95 93Pension, OPEBs – 5 34Other ( 42 ) ( 27 ) ( 43 )Total $1,207 $ 335 $ 390


Rate Year 3Rate Year 2Rate Year 1

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Electric Rate BaseCon Edison of New York

For rate years ending$ billions

March 2008*

20

March 2009

March 2010

March 2011

15

10

5

0

10.3

13.314.7

16.3

* Reflected in current rate plan. Rate base on September 30, 2007 was $11.3 billion.

Incremental Investment

Rate Plan/Filing

11.3

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Summary of Gas Rate Plan

• Three-year rate plan: October 1, 2007 – September 30, 2010

• Base rate increases– RY1 – $67.5 million

– RY2 – $67.5 million

– RY3 – $67.5 million

• Authorized ROE – 9.7%– Earnings sharing threshold – 10.7%

– Based on actual equity ratio – up to 50%

• Continued full recovery of fuel costs

• Revenue decoupling mechanism

• Opportunity to retain 20% of non-firm revenues $35 million – $50 million, 25% above this level

• Reconciliation of average gas utility plant, net of depreciation

• Reconciliation of pension and OPEB costs, property taxes, environmental costs, and interference costs

• Potential penalties of up to $7.5 million (annually) for not meeting certain performance standards


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Gas Rate BaseCon Edison of New York

For rate years ending$ billions

September 2007*

4

3

2

1

0

2.2 2.32.5

2.7

* Reflected in current rate plan. Rate base on September 30, 2007 was $2.3 billion.

September 2008

September 2009

September 2010

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