ED · 10-Q · 2026Q2 · Full report
State Utility Regulation
CONSOLIDATED EDISON INC · 2026-08-06 · Importance 44 · Surprise 60 · In source text
New York enacted Chapter 58 of the Laws of 2026 in May as part of the Fiscal Year 2026–2027 budget. For utility base-rate filings submitted after January 1, 2027, the law requires a budget-constrained alternative limiting aggregate revenue increases to the prior three-year average CPI growth, requires returns above authorized ROE to be returned to customers subject to limited retention, and expands NYSPSC authority over rate cases. It also limits recovery of lobbying, public-relations, goodwill-advertising and rate-case expenses, requires affordability analyses and performance-based compensation targets, and authorizes multi-year litigated rate plans. The Utilities are assessing the law’s effect and the timing of upcoming rate-case filings.
Key facts
- In May 2025 New York increased payroll tax rates effective July 1, 2025 from 0.6% to 0.895% for CECONY and from 0.34% to 0.635% for O&R.
- In May 2026, New York enacted Chapter 58 of the Laws of 2026 which, effective for base rate filings submitted after January 1, 2027, requires utilities to submit a budget-constrained rate plan limiting aggregate revenue increases to the average CPI growth over the prior three years and directs utilities to return revenues above the authorized ROE with retention of up to 0.25% over authorized ROE if certain criteria are met.
- Chapter 58 extends the NYSPSC’s authority to suspend a rate case to 14 months and authorizes approval of multi-year litigated rate plans.
- In 2026 CECONY will defer the full annual variance above $10 million ($8.5 million for electric and $1.5 million for gas) as a regulatory asset for recovery via surcharge.
- O&R’s rate plans for January 2025 through December 2027 include reconciliation thresholds of $0.9 million for electric and $0.5 million for gas per year.
- CECONY’s rate plans include reconciliation of uncollectible expenses and late payment charges from January 1, 2026 through December 31, 2028 for electric and gas and from January 1, 2020 through October 31, 2026 for steam.
- Under revenue decoupling mechanisms, delivery revenues are generally not affected by changes in delivery volumes from levels assumed when rates were approved for the Utilities' New York electric and gas rate plans.
- In accordance with the Statement of Policy issued by the NYSPSC and its current electric, gas and steam rate plans, CECONY defers for payment to or recovery from customers the difference between the pension and other postretirement benefit expenses and the amounts for such expenses reflected in rates.
Impact estimates
| metric | direction | stage | expected | basis |
|---|---|---|---|---|
| assets | positive | committed | +0.0% | In 2026 CECONY will defer the full annual variance above $10 million ($8.5 million for electric and $1.5 million for gas) as a regulatory… |
| operating_income | negative | realized | — | In May 2025 New York increased payroll tax rates effective July 1, 2025 from 0.6% to 0.895% for CECONY and from 0.34% to 0.635% for O&R. |
| net_income | negative | realized | — | In May 2025 New York increased payroll tax rates effective July 1, 2025 from 0.6% to 0.895% for CECONY and from 0.34% to 0.635% for O&R. |
| revenue | negative | committed | — | In May 2026, New York enacted Chapter 58 of the Laws of 2026 which, effective for base rate filings submitted after January 1, 2027,… |
| revenue | negative | committed | — | Chapter 58 extends the NYSPSC’s authority to suspend a rate case to 14 months and authorizes approval of multi-year litigated rate plans. |