Consolidated Edison : 2023 Annual Report for Consolidated Edison, Inc.

2023 Annual Report

Con Edison Annual Report 2023

CON EDISON'S CLEAN ENERGY COMMITMENT

Build the Grid of the Future

Empower All of Our Customers to Meet Their Climate Goals

2050

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Reimagine the Gas System

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Partner With Our Stakeholders

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Con Edison Annual Report 2023

Tim Cawley

Chairman, President, and

Chief Executive Officer

Dear Fellow Shareholders,

As the groundswell of public support for clean energy grows, Con Edison is addressing this urgent societal need. Because we operate one of the world's largest and most reliable energy delivery systems, our work is critical to New York's ability to deliver on its promise of a cleaner future.

Building on our foundation of safety, operational excellence, and the customer experience, our company made significant progress toward our clean energy goals this past year. We continued investing in our energy systems to allow for an influx of clean energy and growing demand from customers choosing to electrify their heating and transportation. This work supports the state's ambitious climate agenda and New Yorkers as they transition away from fossil fuels.

In 2024, we're advancing our bold plans while we continue to provide world-class reliability to our dynamic metropolis. We're building infrastructure to connect cleaner sources of electricity to the grid. And we're reimagining our gas system and working to deeply reduce carbon in our steam system.

Our recently approved investment plans for electric, gas, and steam, as well as the sale of our Clean Energy Businesses, give us a solid balance sheet and strong growth opportunities.

Shareholders continue to gain value from our agile and disciplined management. Our annualized dividend has increased to $3.32 per share, an 8-cent gain over 2023. That's 50 years in a row of rising dividends.

As we go forward, New Yorkers, particularly those in disadvantaged communities, are counting on us to advocate for their interests. Their needs for affordable energy and a healthier environment remain integral to our work. Now is the time for action so that we can all share a more sustainable world.

Con Edison Annual Report 2023

USHERING IN THE CLEAN ENERGY FUTURE

There's no doubt climate change and our region's legislative policies require us to be innovative and nimble. We must act swiftly. Our Clean Energy Commitment focuses us on the areas we need to transform now to meet the state's carbon-reduction targets. By thinking wholistically-about everything from electric vehicle chargers to transmission lines-we'll be ready. We are designing and building a next-generation electric grid that can deliver 100% clean energy by 2040 in support of New York State's goal.

We envision investing $29 billion in our systems from 2024 to 2028.

Build the Grid of the Future

Customer adoption of electric heating and EVs will drastically increase electricity use. Indeed, we anticipate our peak electric demand to increase 45 to 85% by 2050 and we'll need to invest in the grid to provide the resilient, reliable service our customers expect and deserve.

Con Edison Annual Report 2023

• Adoption of electric heating and EVs will drastically increase electricity use.

We'll make about $29 billion worth of capital investments from 2024 through 2028 in our Con Edison and O&R territories. This past year, we broke ground on a project for continued reliability in Brooklyn and Queens that will serve as a future interconnection point for offshore wind. We also celebrated the completion of a transmission line in Queens that will help us connect renewable resources to the grid and allow the closure of fossil fuel-burning plants. Another project will see us invest in the area near John F. Kennedy International Airport to support reliability for homes, businesses, and major transportation hubs.

Ensuring clean energy can be dispatched when needed is paramount for reliability; the value of battery storage will only increase. In 2023, we brought online a 7.5-MWenergy-storage system on Staten Island, the largest such project in New York City. Our recently approved investment plan authorizes more utility-owned battery storage in support of New York State's climate goals.

Con Edison Annual Report 2023

Con Edison Transmission, which owns the largest share in the New York Transco, provides additional investment opportunities. Last year, we received regulatory authorization for a project that will strengthen the reliability and resilience of the grid and allow more than 3,000 MW of new offshore wind to connect by 2030.

Besides being ready for an influx of clean energy, the grid of the future will need to withstand ever more extreme weather. New York City is facing rising sea levels, increased rainfall, and soaring temperatures with major climate shifts coming by the 2030s. That's why we developed a follow-up to our original climate resiliency and adaptation plan, which industry experts hailed as the "gold standard." Our new climate change resilience plans call for investing about $1.3 billion more in climate resiliency by 2030. We've proposed burying overhead wires to limit storm damage, installing additional submersible equipment, and constructing a new state-of-the-art storm resilience center to reduce outage and recovery times.

Physical security and cybersecurity are vital to our infrastructure and our customers. We continue to enhance our cyber defenses through people, processes, and technology. We've tightened access to our critical facilities and collaborated with government, law enforcement, and energy sector partners to further protect the grid. We've also heightened awareness among our employees about external factors such as geopolitical unrest and terrorism.

We continuously evolve our grid operations. Last year, we upgraded numerous tech applications that better integrate our backend systems to create more operational efficiencies and enhance customer service. Those efforts, along with the installation of more than 5 million smart meters, will benefit all our stakeholders as we go forward.

Empowering All Customers to Meet Climate Goals

Energy efficiency is the cornerstone of the clean energy future. Since 2009, our rebates and incentives have helped more than 6 million customers upgrade their lighting, "heating, and cooling systems. The work is equivalent to taking more than 3 million gasoline vehicles off the road.

Today, we offer customers deeper and wider ways to save energy. We'll have invested $2.2 billion from 2020 to 2025 in energy efficiency incentives. And we're aiming to triple the size of our heating electrification programs and double the size of our weatherization

Con Edison Annual Report 2023

programs from current levels by 2030. These efforts will allow our customers to make the clean energy transition efficiently and affordably.

At the same time, we're preparing the grid for an ever-increasing number of EVs on the road, so customers can charge when and where they want. And with 40% of plugs already installed in our territory within one mile of traditionally underserved communities, we're helping ensure every New Yorker can participate in the clean energy transition. We'll also more than double the funding for incentives for developers to install chargers. And to meet the future needs of electric transportation, we've engaged with fleet operators to understand their longer-term electrification plans so we can ensure our infrastructure is there to support them when and where they're ready.

Distributed energy resources like customer rooftop solar installations and battery storage projects will be essential to the clean energy transition. That's why we are helping customers to connect their systems to ours. Nearly 80,000 customer-owned solar projects and more than 1,100 customer-owned battery storage systems now work with our grid.

CLEAN ENERGY COMMITMENT MILESTONES

By the close of 2023, customers had installed about 820 MW of solar capacity and 83 MW of battery storage capacity.

Con Edison Annual Report 2023

Reimagining the Gas System

Our 1.3 million gas customers rely on us for heating, hot water, and cooking. We remain "focused on providing them with safe, reliable, and efficient service while transitioning to the clean energy future.

Our longer-range plans call for reducing gas consumption by increasing energy efficiency of buildings and appliances and providing customers who use gas with alternative heating options. For hard-to-electrify customers, we support options to procure a portfolio of low-carbon fuels, including renewable natural gas. We're also performing innovative leak detection and repairs on our system.

Reducing Carbon in Our Steam System

Our steam system can play a critical role in reducing greenhouse gas emissions. Buildings that use fossil fuels for heat, hot water, and cooking need to act fast or face "city fines for not switching to cleaner energy. Converting to electricity is one option. Moving to steam service is another.

We're identifying the best technologies to reduce carbon in the system and are now studying how and when to implement them as we aim for net-zero Scope 1 emissions from our operations by 2050. Our new steam investment plan sets new rates for steam service for the first time in 10 years. It provides funding for studies and technologies to reduce carbon in our system and includes a new weather adjustment clause that reduces volatility of revenues.

Con Edison Annual Report 2023

Reducing Our Carbon Footprint

We've already succeeded in reducing our carbon footprint, namely our directly "produced emissions, by more than 50% since 2005. Our carbon reduction targets for our facilities support city and state goals.

We're committed to electrifying our fleet of light-duty vehicles by 2035. Crews are already testing our first electric heavy-duty bucket truck in the field. We are collaborating with manufacturers to advance design for medium- and heavy-duty EVs.

Protecting our environment also means protecting biodiversity, which provides communities with cleaner air and healthier soil. We're safeguarding pollinator habitats along transmission lines, converting manicured lawns into native vegetation, and partnering with researchers to measure the potential for future biodiversity projects in our territory.

Financial Highlights 2023

Con Edison Annual Report 2023

MAKING AN IMPACT WITH STAKEHOLDERS

Con Edison generates thousands of jobs and billions of dollars in economic activity in our region. An investment in us means an investment in the fabric of society.

Environmental Justice

We're building bridges with traditionally underserved communities to deliver a more just energy future. We're considering customers specifically within these geographic areas for certain investments. We've formed an internal group to consult on our analysis and educate employees on environmental justice issues. We've also published a policy statement expressing our intention to listen to and learn from disadvantaged communities by collaborating with them to make certain their perspectives are fully considered and integrated into our work.

Nonprofit Support

"To make deeper, more meaningful differences in the communities we serve, we increased our philanthropic budget by 25% this past year. In doing so, we've realigned

our charitable giving portfolio to reflect our core business goals and values addressing climate change and environmental stewardship, clean energy and tech workforce development, and social justice. In each area, we're prioritizing organizations that focus on disadvantaged communities.

Con Edison Annual Report 2023