By Michael Kuser
Consolidated Edison on Thursday reported 2019 net income of $1.34 billion ($4.09/share), down slightly from $1.38 billion ($4.43/share) the previous year.
Net income for the fourth quarter was $295 million ($0.89/share), compared to $331 million ($1.06/share) in 2018.
The company attributed the decline in income to depreciation and amortization expenses increasing 14.6% year-on-year, and taxes other than income taxes going up 8.4% in the same period.
“While meeting many challenges in 2019, Con Edison delivered solid financial results and remained focused on leading the way towards a cleaner energy future for our customers and the planet,” CEO John McAvoy said. “Our recently approved three-year rate plans are essential to helping New York state achieve its clean energy goals, as well as to continue providing safe and reliable service to our customers.”
The state’s Public Service Commission last month approved electric and gas rate plans for January 2020 through December 2022 reflecting an 8.8% return on equity, and the New Jersey Board of Public Utilities approved an electric rate increase, effective Feb. 1., of $12 million for Rockland Electric, reflecting a 9.5% ROE.
The PSC last month also issued an order directing energy efficiency targets and budgets for New York utilities, approving $2 billion statewide for EE programs, heat pump budgets and associated targets through 2025 to meet the goal of reducing electric use by 3% and gas use by 1.3% annually by 2025 (19-E-0065).
In December, Con Ed completed a study of climate change vulnerability. Considering the increased risk of sea level rise, coastal storm surge, inland flooding from intense rainfall, hurricane-strength winds and extreme heat, the company estimates it might need to invest between $1.8 billion and $5.2 billion by 2050 on programs to adapt to impacts from climate change.
Con Ed is still extremely exposed to Pacific Gas and Electric’s bankruptcy through a large volume of power purchase agreements sold to the California utility. At year-end, Con Ed’s balance sheet included $819 million of net non-utility plant relating to PG&E projects, approximately $1 billion of intangible assets relating to PG&E PPAs, $282 million of additional projects that secure the related debt and approximately $1 billion of non-recourse related project debt. (See PG&E Reports $3.6 Billion Q4 Loss.)
Pursuant to the related project debt agreements, Con Ed reported distributions from the related projects to the Clean Energy Businesses have been suspended.
“Unless the lenders for the related project debt otherwise agree, the lenders may, upon written notice, declare principal and interest on the related project debt to be due and payable immediately and, if such amounts are not timely paid, foreclose on the related projects,” the company said.