ED: Con Edison Files Three-Year Steam Rate Plan

As of 2026-09-04, Con Edison’s steam filing is a targeted regulatory request rather than a material revenue shift for the company. The requested $66 million increase, if approved, would affect a small and concentrated customer base (approximately 1,520 customers in parts of Manhattan). Steam operations account for less than 1% of consolidated revenue, so the direct earnings and cash-flow impact at the consolidated level is likely to be modest compared with electric and gas rate decisions. That said, the filing is meaningful for several investor-focused reasons. First, the filing’s assumed capital structure (48% common equity) and illustrative ROE (9.9%) show the framework Con Edison is using to translate capital and operating costs into allowed rate recovery. Second, Con Edison’s broader capital program is accelerating: utility CapEx is forecast to jump to roughly $7.97 billion in 2026 and remain elevated through 2028. Financing that program includes planned equity issuance (about $1.0 billion in 2026, $1.2 billion in 2027 and additional equity through 2028–2030) and approximately $9.1 billion of long-term debt planned for 2026–2029. Any approved steam rate increases would contribute to cash flow needed to support these investments, but steam’s small revenue share limits its standalone contribution. Investors should also weigh regulatory risk. The NYSPSC must approve the filing and is simultaneously conducting an audit focused on utilities’ federal income tax accounting tied to plant retirements. Outcomes from that audit could affect how costs are recovered and could influence future rate decisions. Finally, steam demand shows a negative 5‑year design-condition forecast (average annual change of -0.9%), indicating structural decline in that commodity which could limit long-term upside from steam rate base growth.

If the NYSPSC approves the requested increase on terms similar to the filing’s assumptions, Con Edison would secure incremental rate recovery for steam operations starting November 1, 2026. Given steam’s limited scale within the consolidated business, the absolute dollar impact to consolidated net income and EPS is expected to be limited unless the commission’s decision establishes precedent that materially changes allowed returns or cost recovery treatment across other rate mechanisms. Operationally, the steam filing occurs against a backdrop of elevated capital spending across Con Edison’s utility businesses. Maintaining and modernizing distribution and thermal infrastructure consumes a meaningful portion of Con Edison’s investment profile. The company will rely on regulatory recoveries, debt and equity financing to fund those projects. Any material deviation in regulatory outcomes (e.g., lower ROE, reduced recoveries, or retroactive adjustments tied to the NYSPSC audit) could pressure cash flow and increase reliance on capital markets.

All rate adjustments for CECONY require NYSPSC approval; the commission also holds leverage through audits and policy decisions that can affect cost recovery and allowed returns. The ongoing NYSPSC operations audit — specifically focused on income tax accounting and potential understatement of federal income tax expense tied to plant retirement cost-of-removal calculations — represents a higher-severity regulatory risk. Findings from that audit could lead to retroactive adjustments, changes to future rate treatment, or other remedies that would compound uncertainty around any newly approved rate plan.