Consolidated Edison, Inc. (ED): Business Model Canvas [10-2024 Updated]

Understanding the business model of Consolidated Edison, Inc. (ED) reveals how this energy giant successfully navigates the complexities of the utility sector. From its key partnerships with renewable energy providers to its commitment to clean energy initiatives, Con Edison’s approach is multifaceted and robust. Explore how this company balances customer relationships and operational efficiency while addressing the challenges of regulatory compliance and infrastructure maintenance. Delve into the details below to uncover the strategic components that drive Con Edison’s business success.

Consolidated Edison, Inc. (ED) - Business Model: Key Partnerships

Collaborations with state regulatory agencies

Consolidated Edison, Inc. (ED) works closely with various state regulatory agencies to ensure compliance with operational standards and regulations. In 2024, CECONY's total operating revenues reached $6.967 billion, reflecting ongoing regulatory engagements. The company is also involved in initiatives with the New York State Public Service Commission (NYSPSC) to support energy efficiency programs and infrastructure improvements.

Partnerships with renewable energy providers

Con Edison has established partnerships with renewable energy providers to enhance its sustainability initiatives. As of June 30, 2024, the company retained tax equity interests in solar projects, which generated renewable energy tax credits estimated at a carrying value of approximately $6 million. This collaboration is part of Con Edison's strategy to transition to cleaner energy sources, aligning with state mandates for renewable energy integration.

Joint ventures for transmission projects

Con Edison is a significant stakeholder in the Mountain Valley Pipeline (MVP), a critical gas transmission project. The total project cost is approximately $7.9 billion. Con Edison Transmission holds about a 6.7% interest in MVP, with cash contributions amounting to $530 million. Additionally, Con Edison Transmission is involved with New York Transco, focusing on enhancing the electric transmission network.

Contracts with fuel suppliers

Con Edison maintains contracts with various fuel suppliers to secure natural gas and other energy sources. For the three months ended June 30, 2024, the company purchased natural gas for resale amounting to $57 million. The ongoing contracts are crucial for managing fuel costs and ensuring reliable energy delivery to customers.

Partnership Type	Details	Financial Impact (Millions)
Regulatory Agency Collaboration	Working with NYSPSC on compliance and energy efficiency programs	$6,967 (Total Operating Revenues)
Renewable Energy Partnerships	Tax equity interests in solar projects	$6 (Carrying Value of Tax Credits)
Joint Ventures	Investment in Mountain Valley Pipeline	$530 (Cash Contributions)
Fuel Supply Contracts	Natural gas purchases for resale	$57 (Gas Purchases)

Consolidated Edison, Inc. (ED) - Business Model: Key Activities

Electricity and gas distribution

Consolidated Edison, Inc. (Con Edison) operates as one of the largest energy delivery companies in the United States. For the three months ended June 30, 2024, the company's operating revenues from electricity amounted to $2,370 million, while gas revenues were $538 million. In total, the company reported $2,996 million in operating revenues from its utility services for the same period.

Renewable energy integration

Con Edison is actively involved in renewable energy initiatives as part of its commitment to sustainability. Although the Clean Energy Businesses segment was sold in March 2023, the company has retained interests in renewable projects, such as a wind power project with a nameplate capacity of 75 MW. The integration of renewable sources is also reflected in the forecasted 0.1 percent decrease in average annual firm peak gas demand in its service area from 2025 to 2029, aligning with state policies aimed at reducing reliance on fossil fuels.

Infrastructure maintenance and upgrades

Infrastructure is a critical aspect of Con Edison’s operations. For the six months ended June 30, 2024, the company invested $2,242 million in utility construction expenditures. This was an increase of $273 million compared to the previous year, underscoring the company’s focus on upgrading its infrastructure to enhance service reliability and meet growing energy demands.

Activity	Investment (Millions of Dollars)	Description
Utility Construction Expenditures	$2,242	Investment in infrastructure improvements and capacity expansion.
Maintenance Costs	$871	Operating expenses related to the maintenance of electric, gas, and steam systems for Q2 2024.

Regulatory compliance and reporting

Regulatory compliance is essential for Con Edison’s operations. The company has undergone recent scrutiny, with New York State completing examinations of tax returns for the years 2015 to 2021, resulting in no changes. As of June 30, 2024, Con Edison’s total liabilities and equity stood at $67,920 million. The company is also preparing for the impacts of the Inflation Reduction Act, which introduces a 15 percent Corporate Alternative Minimum Tax applicable starting in 2024.

Regulatory Metrics	Value
Total Liabilities and Equity	$67,920 million
Tax Compliance Review Period	2015 - 2021
Corporate Alternative Minimum Tax Rate	15%

Consolidated Edison, Inc. (ED) - Business Model: Key Resources

Extensive utility infrastructure

Consolidated Edison, Inc. operates a significant utility infrastructure, including:

• Approximately 47,572 miles of electric distribution lines.
• Over 3,037 miles of gas distribution pipelines.
• Largest steam distribution system in the U.S., producing about 15,444 million pounds of steam annually.

The total assets as of June 30, 2024, were $67.92 billion, with net plant assets accounting for $50.63 billion.

Skilled workforce and management team

Con Edison employs approximately 7,300 employees who are covered under a recent four-year collective bargaining agreement, ensuring a skilled workforce to maintain its operations. The management team is experienced in utility operations, regulatory compliance, and financial management.

The company reported a net income for common stock of $202 million for the second quarter of 2024.

Regulatory licenses and permits

Con Edison holds numerous regulatory licenses and permits, essential for its utility services, including:

• State and local utility operating licenses.
• Environmental permits necessary for energy production and distribution.
• Certificates of public convenience and necessity for gas and electric service expansions.

As of June 30, 2024, the company’s total noncurrent liabilities were $16.83 billion, reflecting its regulatory obligations.

Financial capital for investments

Con Edison has demonstrated strong financial capital management, with key financial highlights including:

• Issuance of long-term debt totaling $1.4 billion in May 2024 to support ongoing capital investments.
• Net cash flows from financing activities of $1.022 billion for the first half of 2024, significantly higher than the prior year.
• Common stock dividends of $549 million paid in the first half of 2024.

The company’s cash flows from operations were $1.912 billion for the first six months of 2024, reflecting robust operational performance.

Key Financial Metrics	2024 (Q2)	2023 (Q2)
Operating Revenues	$3.220 billion	$2.944 billion
Net Income for Common Stock	$202 million	$226 million
Total Assets	$67.92 billion	$66.33 billion
Total Liabilities	$46.36 billion	$45.78 billion
Common Stock Dividends	$549 million	$562 million

Consolidated Edison, Inc. (ED) - Business Model: Value Propositions

Reliable energy supply to millions of customers

Consolidated Edison, Inc. (Con Edison) provides electricity, gas, and steam services to approximately 3.8 million customers in New York City and Westchester County. In the second quarter of 2024, Con Edison reported total operating revenues of $2.996 billion, reflecting an increase from $2.744 billion in the same period of 2023. The company’s electric operations generated $2.370 billion in revenues for the quarter, up from $2.144 billion in 2023. This growth indicates a strong demand for reliable energy supply amidst urban challenges.

Commitment to clean energy initiatives

Con Edison is actively involved in transitioning to clean energy, although the sale of its Clean Energy Businesses in March 2023 has shifted its focus. The company is committed to reducing greenhouse gas emissions and enhancing energy efficiency across its operations. The New York State Public Service Commission has mandated that electric utilities reduce emissions by 40% by 2030. As part of its clean energy strategy, Con Edison has invested $2.453 billion in utility construction expenditures for the six months ended June 30, 2024, which includes efforts to enhance renewable energy integration.

Strong customer service and support

Con Edison is dedicated to providing exceptional customer service, demonstrated by its customer satisfaction ratings. In 2024, the company has implemented new customer billing and information systems, aiming to improve user experience and support. Furthermore, its operating revenues from customer contracts reached $7.495 billion for the six months ending June 30, 2024, indicating effective customer engagement strategies. The company's commitment to customer service is reflected in their proactive communication during outages and service disruptions.

Resilient and safe energy infrastructure

Con Edison maintains a robust and resilient infrastructure, crucial for delivering reliable energy. The net plant as of June 30, 2024, was valued at $63.075 billion, representing a solid investment in infrastructure. The company has also reported an operating income of $1.304 billion for the first half of 2024, highlighting the effectiveness of its operational strategies. Safety measures and infrastructure upgrades are prioritized to ensure uninterrupted service, especially in densely populated urban areas.

Value Proposition	Key Metrics	Financial Impact
Reliable energy supply	3.8 million customers	Operating revenues: $2.996 billion (Q2 2024)
Commitment to clean energy	40% emissions reduction by 2030	Utility construction expenditures: $2.453 billion (H1 2024)
Strong customer service	High customer satisfaction ratings	Operating revenues from contracts: $7.495 billion (H1 2024)
Resilient infrastructure	Net plant value: $63.075 billion	Operating income: $1.304 billion (H1 2024)

Consolidated Edison, Inc. (ED) - Business Model: Customer Relationships

Direct engagement through customer service channels

Consolidated Edison, Inc. (Con Edison) prioritizes direct engagement with customers through a variety of service channels. As of June 30, 2024, the company reported approximately 3.2 million customer accounts across its electric, gas, and steam services. The customer service channels include phone support, online chat, and a mobile app, allowing customers to manage their accounts efficiently. The company also employs a dedicated customer service team, with a reported average response time of under two minutes for phone inquiries.

Regular communication about energy usage

Con Edison emphasizes regular communication regarding energy usage to enhance customer engagement. In 2024, the company launched a new energy management tool that provides customers with real-time data about their energy consumption. According to the latest reports, 45% of customers actively use this tool, leading to an average reduction of 10% in energy usage among participants. Additionally, Con Edison sends monthly statements that include personalized insights and tips for reducing energy costs, contributing to a more informed customer base.

Community outreach programs

Con Edison is committed to community outreach, focusing on energy efficiency and sustainability. In 2024, the company invested $5 million in community programs aimed at educating customers about energy conservation. This includes workshops and partnerships with local organizations to promote energy-saving practices. The company also participates in local events, reaching approximately 500,000 community members annually through these initiatives.

Customer feedback initiatives to improve services

Customer feedback initiatives are a cornerstone of Con Edison’s strategy to enhance service offerings. In 2024, the company conducted a customer satisfaction survey with a response rate of 20%, resulting in a satisfaction score of 85%. The feedback collected is analyzed to identify areas for improvement in customer service and operational efficiency. Furthermore, Con Edison implements quarterly focus groups with customers to discuss new service offerings and gather direct input on company initiatives.

Customer Engagement Metrics	2024	2023	Change (%)
Customer Accounts	3,200,000	3,150,000	1.59
Average Response Time (Minutes)	2	2.5	-20.00
Energy Management Tool Usage (%)	45	30	50.00
Community Program Investment (Millions)	5	4	25.00
Customer Satisfaction Score (%)	85	80	6.25

Consolidated Edison, Inc. (ED) - Business Model: Channels

Direct billing through online platforms

Consolidated Edison, Inc. (Con Edison) has enhanced its direct billing capabilities through user-friendly online platforms. As of June 30, 2024, Con Edison reported total operating revenues of $6,967 million, with a significant portion attributed to residential and commercial customers utilizing online billing services. The company has seen a steady increase in online account management, with approximately 60% of customers managing their accounts digitally by mid-2024. This shift aims to streamline billing processes and enhance customer satisfaction.

Customer service via phone and online chat

Customer service remains a critical component of Con Edison’s channels. The company reported receiving around 1.5 million customer service calls in the first half of 2024, with an average response time of 3 minutes. Additionally, the online chat feature has been increasingly adopted, with around 25% of customer inquiries now handled through this medium, reflecting a growing preference for digital communication. The investment in customer service technology has yielded a 15% increase in customer satisfaction ratings over the past year.

Social media for community engagement

Con Edison actively engages with its customer base through various social media platforms. As of mid-2024, the company has over 250,000 followers on Twitter and 300,000 on Facebook. Social media campaigns focused on energy conservation and safety tips have reached over 1 million users. The company reported a 20% increase in engagement metrics compared to the previous year, demonstrating the effectiveness of its community outreach efforts. This channel allows for real-time communication and feedback from customers, fostering a sense of community.

Educational programs and workshops on energy efficiency

Con Edison has implemented numerous educational programs aimed at promoting energy efficiency. In 2024, the company conducted over 100 workshops, attended by approximately 10,000 customers. These programs cover topics such as energy-saving technologies and sustainable practices. The workshops have resulted in a measurable impact, with participants reporting an average reduction of 15% in their energy consumption following attendance. Con Edison also offers online resources, including webinars and informational articles, further enhancing its educational outreach.

Channel	Key Metrics	Performance Indicators
Online Billing	Total Operating Revenues: $6,967 million	60% of customers manage accounts digitally
Customer Service	1.5 million calls (H1 2024)	Average response time: 3 minutes
Social Media Engagement	250,000 Twitter followers, 300,000 Facebook followers	20% increase in engagement metrics
Educational Programs	100 workshops, 10,000 attendees	15% average reduction in energy consumption

Consolidated Edison, Inc. (ED) - Business Model: Customer Segments

Residential customers in New York City and Westchester

Consolidated Edison serves approximately 3.8 million residential customers across New York City and Westchester County. For the three months ended June 30, 2024, the electric sales to residential customers amounted to 2,520 million kWh, generating revenues of $901 million, which is a 34.7% increase compared to $669 million in the same period of 2023.

Commercial and industrial clients

Con Edison caters to around 250,000 commercial and industrial customers. In the same quarter, the commercial and industrial electric sales were 2,208 million kWh, with revenues of $622 million, reflecting a 9.5% increase from $568 million in the prior year. The company has also seen a slight decline in volume delivered to commercial clients, down 5.6% from the previous year.

Government and municipal entities

Government and municipal entities represent a significant segment for Con Edison. The company provides electric service to several municipal agencies and local government bodies. For the three months ended June 30, 2024, sales to municipal customers totaled 2,261 million kWh, generating revenues of $206 million, a 24.1% increase from $166 million in the same period of the previous year.

Low-income assistance programs

Con Edison has various programs aimed at assisting low-income customers, including energy efficiency initiatives and financial assistance programs. The company allocates approximately $60 million annually for low-income assistance programs, helping thousands of customers manage their energy costs. In 2024, the company is expected to increase its investment in these programs in line with New York State mandates for energy affordability.

Customer Segment	Number of Customers	Electric Sales (million kWh)	Revenue (millions)	Year-over-Year Change (%)
Residential	3.8 million	2,520	$901	34.7%
Commercial & Industrial	250,000	2,208	$622	9.5%
Government & Municipal	Varies	2,261	$206	24.1%
Low-Income Assistance	Thousands served	N/A	$60 million (annual budget)	N/A

Consolidated Edison, Inc. (ED) - Business Model: Cost Structure

Operational and maintenance costs for infrastructure

For the six months ended June 30, 2024, Consolidated Edison reported total operating expenses of $5,663 million, which included:

• Purchased power: $1,076 million
• Fuel: $103 million
• Gas purchased for resale: $292 million
• Other operations and maintenance: $1,659 million
• Depreciation and amortization: $993 million
• Taxes, other than income taxes: $1,540 million

Operational and maintenance costs increased primarily due to higher electric operations maintenance activities, which accounted for an increase of $21 million, and higher gas operations costs contributing another $17 million.

Regulatory compliance costs

Regulatory compliance costs, which are integral to the operation of Consolidated Edison, included:

• Taxes, other than income taxes: $1,540 million
• Property taxes: $650 million
• State and local taxes related to revenue receipts: $94 million

These regulatory costs have increased due to higher property taxes of $62 million and an increase in state and local revenue taxes of $21 million.

Employee salaries and benefits

Employee salaries and benefits represent a significant portion of operational costs. In June 2024, Consolidated Edison reached a four-year collective bargaining agreement covering approximately 7,300 employees. The impact of this agreement on salaries and benefits is expected to reflect in subsequent financial reports.

Investments in renewable energy projects

Investments in renewable energy and related projects remain a focus for Consolidated Edison. The company reported an ongoing commitment to renewable energy projects, which includes:

• Retained tax equity interests in solar projects valued at approximately $6 million as of June 30, 2024.
• Investment in renewable energy projects, which is expected to grow in alignment with state clean energy policies.

Overall, the financial statements indicated a cumulative gain of $835 million from the sale of Clean Energy Businesses, reflecting a strategic shift towards focusing on core utility operations.

Cost Category	Amount (Millions)
Purchased Power	$1,076
Fuel	$103
Gas Purchased for Resale	$292
Other Operations and Maintenance	$1,659
Depreciation and Amortization	$993
Taxes, Other than Income Taxes	$1,540
Total Operating Expenses	$5,663

Consolidated Edison, Inc. (ED) - Business Model: Revenue Streams

Sales of electricity and gas

For the six months ended June 30, 2024, Consolidated Edison, Inc. reported operating revenues from electricity sales amounting to $4,812 million and gas sales of $1,781 million. In total, the operating revenues for the electricity and gas segments combined reached $6,967 million.

Regulatory adjustments and surcharges

Con Edison employs regulatory mechanisms to adjust revenues, including revenue decoupling mechanisms. For the six months ended June 30, 2024, the utility recognized negative adjustments in revenue of $(36) million related to regulatory assets. This reflects adjustments made to align revenues with costs incurred and regulatory requirements set by state authorities.

Fees from renewable energy projects

As of June 2024, Con Edison does not report direct revenues from renewable energy projects following the sale of its Clean Energy Businesses on March 1, 2023. However, previously, these projects contributed approximately $82 million in revenues for the six months ended June 30, 2023. The transition towards renewable energy solutions remains a focus, although current revenues are not being generated from this segment.

Tax credits from clean energy initiatives

Tax credits from clean energy initiatives significantly impact Con Edison’s financials. As of June 30, 2024, the deferred income taxes and unamortized investment tax credits amounted to $8,389 million. These tax credits are critical for enhancing financial performance and promoting investment in sustainable energy technologies.

Revenue Stream	Amount (Millions)	Details
Electricity Sales	$4,812	Operating revenues for six months ended June 30, 2024
Gas Sales	$1,781	Operating revenues for six months ended June 30, 2024
Total Operating Revenues	$6,967	Combined revenues from electricity and gas for six months ended June 30, 2024
Regulatory Adjustments	$(36)	Negative adjustments for six months ended June 30, 2024
Renewable Energy Revenues	—	Revenue from renewable projects ceased post-sale on March 1, 2023
Tax Credits	$8,389	Deferred income taxes and unamortized investment tax credits as of June 30, 2024