Consolidated Edison, Inc. (ED) Earnings Call Transcript & Summary

Hello, and thank you for joining us. I'm Jan Childress, Director of Investor Relations for Consolidated Edison. We're happy to be here today for our Annual Investor Relations update. This presentation includes information on Con Edison's strategy. That strategy includes enabling the achievement of goals set forth in clean energy and climate related laws and regulations and strengthening and modernizing our energy delivery systems. The presentation accordingly contains forward-looking statements of future expectations and not facts that are intended to qualify for the safe harbor provisions of the federal securities laws. Actual results or developments might differ materially from those included in the forward-looking statements because of various factors identified in the presentation and in our public filings. This presentation also contains financial measures, adjusted earnings and adjusted earnings per share that are not determined in accordance with generally accepted accounting principles or GAAP. These non-GAAP financial measures should not be considered as an alternative financial performance determined in accordance with GAAP. A reconciliation of non-GAAP financial measures to their GAAP equivalents are included within the presentation. Please note that there is an Ask a Question box right beneath the webcast player. Type in any questions you have at any time and click the submit button. We will go through your questions at the end of our formal remarks. And then I'd like to turn this over to Con Edison's Chairman and CEO, Tim Cawley.

Good morning, and welcome to our seventh annual webcast, outlining our company's direction, our priorities and the work underway across the enterprise to serve one of the most important, complex and dynamic regions in the world. I want to begin with a simple but important point about our investment thesis. Serving much of the New York metropolitan area, Con Edison is not a major candidate for the hyperscale data centers that seem to dominate the news today for some of our peers. Instead, Con Edison's investment thesis is largely granted in the nation-leading electrification effort. New York State Clean Energy targets, New York City mandates and customer preferences are fueling an unprecedented energy transition, encompassing buildings, both new and existing and vehicles, especially fleets. Electrification, coupled with core system needs and resiliency demands are fueling our increasing infrastructure investments. Today, I joined seven members of our senior management team to share with you how we're helping to make this energy transition a reality, how we're anticipating and meeting the challenge of more frequent and extreme weather events and how we're accomplishing our charge in a sustainable manner that prioritizes safety, reliability, customer affordability and shareholder value. To be sure, behind the eight of us presenting today are 15,000 dedicated skilled employees who constitute our very core and make all of this happen. We salute them as we present their hard work to you. New York City and the adjacent counties we serve are not an ordinary service territory. We serve a global economic center against urban ecosystem and a region where energy reliability underpins daily life, commerce, health care, transportation, education, culture and financial markets. New York City is home to the nation's largest central business district, world-leading hospitals, nearly 200,000 small businesses, the largest public school system in the United States, the United Nations, the New York Stock Exchange, NASDAQ, the nation's largest mass transit system and LaGuardia and JFK International Airports. Con Edison powers that ecosystem. Con Edison is among the nation's largest investor-owned utilities. Through regulated utilities Con Edison of New York and Orange and Rockland, which we'll refer to as CECONY and O&R, respectively, we provide electric, gas and steam service to millions of people. Most of our systems are underground. In fact, 70% of our electric grid is underground, making it the largest underground system in the U.S. CECONY's best-in-class electrical liability is enhanced by grid resiliency initiatives and diagnostic tools to manage our vast underground system. Our gas system overlaps our electric service area but only partially as the boroughs of Brooklyn, Staten Island and roughly 2/3 of Queens are served by other gas distribution utilities. That means that as gas and other fossil fuel customers in these boroughs electrify, the Con Edison Electric Grid grows. We also operate the largest steam system in the U.S., serving Manhattan below 96th Street. Our federally regulated Con Edison transmission unit invests in and develops electric transmission projects in the Northeast. New York's energy transition must be understood in the context of New York itself. We've been providing energy to New York City for more than 200 years. Over that time, we faced and overcome many challenges and managed through many transitions. The geography of our service area, this year building density and the proximity to major waterways underscores the varied hurdles we face today from the threat of sea level rise to meeting city and state mandates to help deliver clean renewable energy to 10 million residents safely, reliably and affordably. At the same time, New York faces physical and climate-related risks that are especially acute because of our geography and density. Much of our infrastructure is located near waterways. Our climate studies inform us that extreme weather events are becoming more frequent and severe. Longer and more frequent heat waves, sea level rise and flooding must be incorporated into engineering standards, investment plans and emergency response. That's why our long range -- our long-term strategy integrates climate resilience into core system planning rather than treating it as a separate initiative. And Michele O'Connell will explore this later in the program. From heavy snowfall in January and February to blistering heat in July and August, this past year illustrates the extremes that we're prepared to face. And we meet these challenges. CECONY's reliability performance has garnered industry recognition including the 2025 ReliabilityOne National Reliability Award. CECONY is 9x more reliable than the national average. Our system design, which Matt Ketschke will discuss later, as well as ongoing strategic investments contribute to CECONY's unparalleled reliability. Our resiliency investments since 2013, following Superstorm Sandy, have enabled us to avoid an estimated 1.3 million weather-related customer outages to date, thanks in large part to our skilled and talented workforce. New York has some of the most expansive clean energy policies in the country. State and city policies encourage electrification of buildings and transportation, renewable energy development, energy efficiency, and emissions reductions. These policies create demand for new customer solutions, new grid capacity and new ways of planning across our electric gas and steam systems. These are three examples of projects currently under development that are adding demand through electrification. The modernization of JFK International Airport, the Willet's Point mixed-use development in Queens, and the modernization of the Port Authority bus terminal in Midtown Manhattan. The JFK and Port Authority projects will include extensive fleet electrification. [Audio Gap] we implement non-wires alternatives that deploy battery storage, demand management, energy efficiency measures and customer-cited distributed resources to delay or avoid more costly infrastructure investments, and we're able to put off new substation development for several years because of these measures. But across our system, new customer requests for electric capacity are approximately 20% higher than the levels we've historically seen. New residential and commercial development, electrical vehicle charging, building heating, water heating and cooking electrification are converging today in our service area. Our responsibility is to plan for that demand so that customers can electrify without compromising reliability. Distribution investments are only one part of the clean energy transition. Transmission is the backbone that connects clean energy resources to the communities that need them. Con Edison transmission was established to build on more than 100 years of experience developing, constructing, maintaining and operating transmission facilities. Its mission is to become a leading developer and long-term owner of transmission infrastructure that enables the clean energy transition. We plan to invest more than $1 billion over the next 5 to 10 years to develop electric transmission that can bring clean renewable energy from where it's produced to where it's needed. That means supporting projects that are rightsized, expandable and capable of improving reliability and resiliency while having to meet clean energy goals. In August, the New York Independent System Operator or NYISO, launched its latest public policy transmission need planning process. The NYISO is due to file proposed transmission needs based on stakeholder feedback with the New York State Public Service Commission on October 16, 2026, in the 2026 through 2028 planning cycle. The Propel New York Energy project came out of NYISO's public policy process. New York ISO selected the New York Power Authority and New York Transco to bolster the electric transmission network across Long Island, New York City and Westchester County. The project includes underground and submarine transmission lines and newer upgraded substations. Its purpose is to improve reliability, strength and resiliency and help deliver more clean energy from renewable generation sources into the statewide grid. New York Transco share of the $3.3 billion project is $2.2 billion, of which Con Ed transmission has a 41.7% interest. Planning at the state level through New York ISO and the New York State Reliability Council dovetail with our own planning processes. We have worked to build adaptability into our planning so that we can adjust to the latest insights and requirements as well as the pace of customers' adoption of renewables and electrification technologies while balancing cost impacts. Our utilities integrated long-range plans detail our plan to reduce GHG emissions while staying true to our mission to efficiently provide safe, reliable, clean and resilient energy. We identified investments by strategic objectives: clean energy, climate resilience, core service and customer engagement. As a regulated business, state and local policy do much to shape the direction of our business. To explore that topic, I'd like to introduce Jen Hensley, our Senior Vice President for Corporate Affairs.

Thank you, Tim. As Tim heighted, what makes New York unique is not a single feature, but the rare combination of global finance, extraordinary diversity, immense density, cultural influence, historic significance and complex infrastructure, all concentrated into one highly connected urban ecosystem and Con Edison powers that ecosystem. But policy at both the state and city levels recognizes that keeping that ecosystem functioning, powered without interruption is vital to our state and our nation. And a key part of this state and city policy also for delivering on a clean energy transition. Statewide and local policies are the major driver of the energy transition central to our investment thesis. There is a clear mandate to make the state's energy system safe, reliable, affordable, accessible and clean. That is the spirit behind New York State's climate leadership and Community Protection Act, the CLCPA. And those priorities are echoed in New York City local laws 97 and 154 as well as a host of companion mandates. The 2026 amendments to the CLCPA reflect the importance of feasibility, cost effectiveness and consumer affordability. They include shifting greenhouse gas accounting from a 20-year to a 100-year global warming potential methodology, delaying implementation of regulations such as cap and invest until 2028, adding feasibility and cost effectiveness requirements, and revising the statewide interim greenhouse gas target from a 2030 milestone to a 2040 goal of 60% reduction below 1990 levels while retaining the long-term 2015 net-zero goal. At the same time, the requirements that the electric sector reached 70% renewable energy by 2030 and 100% by 2040, remain unchanged at this time. Con Edison has joined with other utilities in the state to propose a framework for utilities to develop and then own land-based renewable energy projects like wind and solar. Collectively, the utilities proposed developing 1 gigawatt of clean resources annually. We believe this would provide a long-term cost-effective strategy for supplying clean energy to customers, and we anticipate a white on this topic from the New York State Public Service Commission later this year. Affordability is not a separate issue from the infrastructure investment and Tim underscored that point. Affordability is absolutely central to how we plan. It's important then to understand the major components of our customers' bills. We show here the components of a typical Con Edison residential customer bill broken out by supply, delivery and taxes and fees. Supply costs are passed on to customers directly, and Con Edison does not earn a profit from them. Delivery charges fund the infrastructure, people and operations needed to provide safe and reliable service. And taxes and fees and local taxes on energy infrastructure, which are expected to exceed $3.2 billion in 2026. Property taxes on our infrastructure alone account for as much as 17% to 18% of customers' bills. We get full reconciliation for the property taxes. And for the first time, we will be breaking out these taxes on customers' bills beginning later this year. The major component of the customer bill are just one way to contextualize affordability. Another way is to take unit rates for CECONY and O&R, which are higher compared with national averages, and examine them in terms of usage and share of wallet. CECONY average bills and share of wallet are below peer averages because our average usage as well. Imagine the relatively small size and energy efficiency of a New York City apartment where 40% of our customers dwell. O&R average bills are higher than peers, roughly $160 per month compared with a peer average of $135. But O&R's average wallet share is slightly lower than the peer group. Our energy efficiency programs are the most robust in the nation and are helping to address the affordability equation for our customers. We also continue to expand affordability programs. As of August 2026, roughly 494,000 customers across CECONY and O&R are enrolled in energy affordability programs. In 2025, more than 0.5 million income eligible customers in New York and New Jersey received discounts. And together, the utilities applied $268 million in discounts. More than 25,000 customers have been approved for the enhanced energy affordability program that we launched earlier this year. Our Smart Charge New York program allows electric vehicle drivers to earn year-round cash incentives for charging their EVs during overnight off-peak hours. While most of our clean energy and affordability initiatives target in New York, Rockland Electric, which serves New Jersey is also focused on these issues. About 99% of the company's earnings base is subject to regulation by the New York State Public Service Commission, the PSC. Features of New York regulation include reconciliation of major costs like pensions and property taxes, a formulaic approach to return on equity, current recovery of the investments necessary to maintain a safe, reliable and resilient system and a degree of revenue certainty through revenue decoupling and weather normalization at our New York utilities. New York's governor, Kathy Hocol's budget approved earlier this year includes some changes to the regulatory process. For instance, the filing process has been extended to 15 months from 11. Utilities will also need to file an inflation conforming alternative along with the normal request for new rates. And the earnings cap, which had been 50 basis points above the allowed ROE is now 25 basis points. Tim cited our long history during which we have seen many changes and faced myriad challenges. We will continue, as we have for two centuries to adapt and improve with every step. That includes strengthening our already world-class reliability in the face of growing customer demand for electricity and more frequent and severe extreme weather events. To discuss these topics, I want to introduce the 2 presidents of our utilities, Matt Ketschke, President of CECONY; and Michele O'Connell, President and CEO of O&R.

Thank you, Jen. I'm happy to be sharing these topics with Michele, because reliability alongside safety remains the nonnegotiable foundation of everything we do, and it requires a total team effort across our business units. Reliability is also a priority, both the PSC and New York independent system operator. Unlike most jurisdictions in the United States, NYISO as we call it, is a single state independent system operator that evolved from the New York Power Pool. It was formed in late 1965 following the Northeast blackout. The evolution of NYISO coincided with the restructuring in the 1990s of New York's public energy sector to promote competitive opportunities in electric and gas supply. Today, NYISO provides a marketplace for utilities in the state to procure power for our customers. In addition, NYISO sets statewide capacity requirements with reserve margins. In more constrained markets such as New York City, Long Island and the Lower Hudson Valley, NYISO sets local minimum installed capacity requirements. CECONY and O&R together deliver 44% of New York State's electricity. From a statewide perspective, New York today has sufficient electric supply to meet reliability requirements, with a cushion of approximately 1,500 megawatts beyond the reserve requirements. New York City has a margin of roughly 1,219 megawatts beyond the requirements. But due to the increasing electric demand that Tim outlined, we project that by 2033, New York City made 125 megawatts of new capacity. That increases to 675 megawatts by 2036. And beyond the 10-year plan, we forecast that capacities will continue to grow, reaching 2,275 megawatts by 2045. Those forecasts included in CECONY's reliability contingency plan, which was filed with the New York State Public Service Commission in July. Our plan includes market-based solutions, including procuring bids for additional transmission connected battery storage systems, creating a new distribution connected battery storage framework and issuing an RFP for nonstorage clean and non-emitting technologies. We are also planning for but not seeking authorization for transmission cooling enhancements that could increase transfer capability of generation from outside New York City by 300 megawatts. After a 60-day comment period, the PSC will determine the final timing on the decision for our plan. CECONY will continue to file reliability needs assessment reports every 6 months to update the reliability needs and progress towards solutions. We'll make our next filing in January 2027. Separate from the need for new capacity identified in our filing is the need for new infrastructure investment to support the network configuration of our grid. CECONY's system is comprised of 84 networks, each served by a substation. As the network grows beyond the capacity of the substation serving it, we divide the network in two and build a new substation to serve the new network, but not before we exhaust our toolkit of non-wire solutions, including demand management, battery storage and a host of other measures to avoid costly infrastructure investment. Given the growth we anticipate from electrification, we are planning five new substations in addition to four that are currently under construction, so nine in total. And Michele, your list is even longer than mine.

That's right, Matt. Since O&R doesn't have the population density of CECONY, our substations are considerably smaller, but we have many on the joint board. At 2035, we plan to install 19 new substations. We also plan to complete major upgrades at 12 substations and deliver 33 transmission project upgrades. This will be our biggest build-out in more than two decades. It's challenging, but it's also exciting because it speaks to the economic vitality of our service area. Here's one example. This is our new Liberty substation currently under construction, and this substation is needed to accommodate 25 megawatts of new industrial load coming into our area, but it also serves another important role that Matt referenced, improved reliability. Siding Liberty between two existing substations will shorten the distribution pathways among the three, making contingency back up easier. The will also enable transmission switching to enhance restoration during contingents. It is truly a multi-value project.

Contingency planning is critical. One strength of CECONY system is that it incorporates redundancies that help us prevent outages. In addition, our system is deliberately designed into networks with switches and sensors to prevent problems in one network from cascading across the system, enhancing reliability. A significant portion of our capital investment is dedicated to risk management, preventing the cascading effect of system problems. Brooklyn and Queens provides a clear example of what this looks like in practice. 20 of CECONY's 84 networks are in Brooklyn and Queens. By 2035, our planning calls the number of networks in these two borosilicate to 27, brings CECONY's total networks to 91. New substations enable network splits, which allow us to transfer load from substations that are reaching their capacity. The investments also create additional feeder capacity, reduced feeder length, increased redundancy and improve restoration options during outages. This is how we invest ahead of band. We don't wait until capacity constraints are already affecting our customers. We build the foundation of our customers, communities and policymakers to pursue electrification and economic development with confidence. That approach is essential in New York with a margin for error is small and the consequences for service interruptions can be significant. Michele is going to dive into climate science in a moment. But our extreme weather events for more than a century ago, shape the design of our New York City The great blizzard of 1888, so devastated the city's network of overhead wires that undergrounding became a mandate. Today, 72% of CECONY's electric grid is underground, largely protected from wind, storms and wildfires. In addition, our design criteria incorporates a double redundancy dime for most of our networks, 65 of the 84. That means that two supply distribution feeders can go out of service during peak summer conditions, and we can still maintain full service to our customers. These features, along with sensors that detect issues before they become major problems all contribute to the unparalleled reliability that we provide.

As Matt alluded, we draw valuable lessons from major events. It was Superstorm Sandy coming one year after Hurricane Irene that provided the catalyst for a gold standard climate change vulnerability studies can follow our resiliency plans. Our science-based studies localized for our service area, tell us that we can expect by 2050 is that 1/3 of our summer will be engulfed in high heat days, more heat waves, more frequent and intense storms and sea level rise 4x what we have experienced in the previous 30 years, which was only 4 inches. Incorporating what we learned from our studies is critical to how we design and operate our systems. Our climate studies inform investments, including selective undergrounding for some parts of our overhead system, line reinforcement for the parts that remain overhead and updated flood design standards. Equipment installed today is intended to still be in service in 2050 and must be designed to meet our climate expectations. The broader point is that resiliency must be embedded into normal utility planning. It's not enough to build -- rebuild after storms. We must anticipate the conditions our assets will face over their useful life. That means using climate data to inform engineering standards, prioritize vulnerable locations and design infrastructure that can withstand both current and future risks, plan to invest nearly $800 million in resiliency 2026 through 2030. And we will update our climate vulnerability and resiliency studies every 5 years to keep up with the latest science. So I mentioned that this can energy transition was both challenging and exciting. Matt and I largely laid out how we are meeting the challenges but an exciting part comes to the group headed by Vicki Kuo, Senior Vice President of Customer Energy Solutions.

Thank you, Michele and Matt. And yes, there's a lot of excitement within our company and across our service territory as employees and customers are thinking outside the box to make this clinic energy transition a reality. NY is a strong example. Building 1928, the 155,000 square foot landmark building reopened in 2024 after a major renovation with more than $3 million in support from Con Edison's Clean Heat program, MO NYU replace fossil fuel radiators and boilers with the Chilwater system, introduced air conditioning, installed a dedicated outside air system with heat recovery, insulated the building envelope and upgraded to triple paying windows. The payoff is significant, complete elimination of fossil fuel use and 50% reduction in energy consumption annually. That's a 40% reduction in annual greenhouse gas emissions. Cost savings, clean air, everybody wins. We're also excited about the financial incentives we have for residential customers in this transition. Since the inception of the clean heat program, we supported over 55,000 Heaton projects to help customers electrify their heat. To make electrifying easier, we've been developing digital tools to help customers understand the electrification journey and their bills. Our steady use rate shows how redesign can support electrification. The rate rewards customers who use energy more evenly throughout the day, which aligns well with heat pump operation. This rig can yield 15% savings for customers who reside in one to four family homes and using air source heat pumps and 19% savings for residential customers installing ground source heat pumps. And it comes with a 12-month price guarantee allowing customers to try it without risk. Transportation electrification is equally important and also exciting. In the Bronx, Con Edison helped to energize the largest electric school bus fleet in New York State. The family-owned bus company, GVC installed 23 dual poor chargers to support 45 electric school buses. Con Edison provided $450,000 in incentive and upgraded electric service and 1,000 kVA transformer. The fleet is expected to avoid 1 million pounds of carbon emissions per school year, and serve about 800 special needs children. The Bronx has the highest incidence of asthma among the 5 borrowers. So this initiative promoting electric transportation over diesel is important to the health of the borrowers residents. The Bronx also illustrates why customer solutions and grid investment must move together. The Zerega Avenue area is expected to add 61 megawatts of low from transportation electrification by 2043. Hunts Point is expected to add more than 80 megawatts of EV driven loads in the Central Bronx network. Con Edison is planning 6 feeders in each area, along with related substation upgrades, with expected target cost of approximately $116 million in Zerega and $105 million for Hunts Point. The Zerega Avenue and Hunts Point projects are among five projects approved as part of the Public Service Commission's new proactive planning process. This is a departure from the normal just-in-time investment policy in New York State. Where appropriate Proactive planning allows us to build in areas where significant electrification loan growth is expected to occur more quickly than, for instance, the construction of a new residential high-rise. The PSC introduced proactive planning in August 2024. And in June 2025, approved 5 CECONY projects. The total investment is approximately $440 million representing 380 megawatts of new capacity. Jen talked about some of the tenants of New York regulation. This is one of numerous examples in which the commission has met the moment with thoughtful innovation. Innovation is one of the cornerstones of operational excellence. We see that playing out successfully, particularly on the safety front, in Mary Kelly's organization. Mary Kelly is Senior Vice President of Gas Operations, and it's a pleasure to turn this over to her.

Thank you, Vicki. Safety, like reliability is one of the pillars of our company. Even as electrification continues, the gas system remains essential to reliability and customer service. CECONY serves approximately 1.1 million gas customers and O&R serves approximately 145,000. Winter 2025-'26 produced record gas use, underscoring the gas system's continued critical role during peak conditions and its importance to electric and steam reliability. Our gas strategy focuses on prevention, detection, response and modernization. In 2025, CECONY and O&R together replaced nearly 104 miles of gasoline. At the current pace, CECONY expects to complete replacement of remaining leak prone mains by 2040, and O&R expects to do so by 2031. We've installed overpressure protection at 120 CECONY regulator stations and 47 O&R gate and regulator stations. In terms of innovation, we're leaders in gas detection. CECONY and O&R helped to develop AMI-enabled natural gas detectors. As of year-end 2025, CECONY has installed approximately 287,000 detectors and O&R have installed more than 25,000. When it detect our alarms, it sends a signal to the gas emergency response center, which dispatches qualified technicians and contact the local fire department. It's truly a life-saving innovation. CECONY remains a New York state leader, responding to 99.5% of gas leak calls within 30 minutes in 2025. The company also repaired nonhazardous week sooner than required by regulation avoiding an estimated 4.4 billion liters or 157,000 decatherms of fugitive emissions. In addition, we use cross compression technology to capture natural gas and reduce methane emissions during main replacements. As of 2025, CECONY reduced methane emissions from its gas system by 66% relative to its 1990 baseline in updated U.S. EPA emissions factors. Steam is another strategic asset. CECONY provides steam service to nearly 1,500 customers occupying roughly 500 million square feet of Manhattan real estate. District team is currently the lowest greenhouse gas emitting energy source per unit delivered under the latest New York City Local Law 97 regulation, and it provides important electric grid benefits. District steam used for cooling offsets more than 100 megawatts of New York City summer electric peak. Buildings that remain on steam for heating can also help reduce future electric peaks by avoiding additional electric load. From 2024 to 2025, Con Edison's steam electric cogeneration provided $33 million in lower electric supply cost benefits to electric customers. Over the long term, we're exploring steam decarbonization pathways to further reduce greenhouse gas emissions. We want to turn now to supply chain and our people, the 15,000 employees who make all of what we've just talked about happen. For that discussion, I introduced Bob Sanchez, the President of Shared Services.

Thank you, Mary. Much of what -- what has been discussed today, centers around adaptation and innovation in achieving the clean energy transition, the evolving supply chain and labor market created an opportunity to deliver greater value and drive meaningful impact. Our supply chain resiliency initiatives are designed to increase our supplier pool, strengthening existing relationships and mitigate supply chain risk. An operational stewardship approach supports additional value in the supply chain and links to sustainability. Our investment recovery program advances a circular economy strategy by maximizing the value of retired, surplus and end-of-life assets to reuse, redeployment, resale, recycling and responsible disposition. Over the past 5 years, the program generated approximately $70 million in value, including $16.2 million in 2025. In 2025 alone, we recycled more than 12.4 million pounds of material and approximately 94,000 gallons of oil, while additional repetitive, non-repetitive sales diverted roughly 850,000 pounds of material from landfills. Our workforce is one of our greatest strengths. As skilled and engaged workforce is essential to deliver safe and reliable service our customers and communities depend on every day. We have strong employee retention and access to a broad skilled labor pool. Last year, we hired nearly 1,200 employees with half coming from disadvantaged communities. We also continued to invest in our employees. In 2025, more than 11,000 employees took part in leadership and professional development programs through our learning center and external training opportunities. Discipline is at the foundation of all that we've outlined for you today. That discipline honed in by two centuries of serving the country's most important metropolis is about -- is also at the heart of our financial management. To talk about that, I turn to Kirk Andrews, Senior Vice President and Chief Financial Officer.

Thank you, Bob. Maintaining discipline is the key to steady financial performance. Discipline is also the key to managing customer bill pressures. The clean energy transition as well as our ongoing infrastructure needs for safety and reliability are fueling a growing investment base for our company. Executing on our rate plans and leading projects on time and within budget are critical for keeping costs in line for customers and earning returns for the investors that are financing our operations through debt and equity. Our earnings base, which is made up largely of rate base is expected to grow at a compounded annual rate of 8.7% over 5 years. Financial discipline enables this long-term investment agenda. The scale of the programs we have discussed requires consistent access to debt and equity markets, a strong balance sheet, constructive regulation and disciplined execution are what investors look for when they invest in Con Edison. We maintain roughly a 50% debt and 50% equity capital structure on a consolidated basis, and that's skewed towards the 48% equity allowed in our New York utilities rates. CECONY and O&R maintained strong investment-grade credit ratings, and we have no long-term holding company debt, a distinguishing feature that sets us apart from our peers and helps insulate our shareholders from the impact of rising rates on holding company debt costs. Our practice is to maintain debt financing at the operating company level, keeping the balance sheet straightforward and aligned with the regulated asset base. Our recent rate case outcomes support our investment plans. The 2026 CECONY Electric and Gas 3-year rate plans approved in January, provide a 9.4% return on equity, a 48% equity ratio and approximately $17 billion in new capital investment. The current O&R electric and gas 3-year plans provide a 9.75% return on equity and a 48% equity ratio. More recently, the Rico rate plan was approved in New Jersey allowing a 9.6% return on equity and a 48.5% equity ratio. And in September, we reached a 3-year settlement on our CECONY steam rate filing. Subject to approval by the PSC, the joint proposal provides a 9.5% return on equity and a 48% equity ratio. These outcomes provide rate certainty, important for our investors and help support the infrastructure investments required for safety, reliability, resiliency and customer energy needs. Our financial discipline has enabled us to build a track record of consistent execution. For the last 5 years, we've delivered earnings at or above the upper half of our annual earnings per share guidance range. And furthermore, we've exceeded the 5-year earnings per share compounded annual growth rate that we targeted back in 2020. We have the distinction of maintaining one of the strongest dividend records in the utility industry and among investor-owned companies. 52 consecutive years of dividend growth earning us dividend aristocrat and dividend King status. Over time, our objective is to align dividend growth more closely with earnings growth while preserving the capital needed to fund the long-term investment program. The road ahead of us in the clean energy transition is long, and while the challenges are significant, so too, as you've heard of the opportunities, to be present to serve this great metropolis and surrounding errors is to have scale, to execute and thus deliver on our promises and to be transparent, steady, reliable and consistent. That is the basis for our strong financial underpinning. Our strong financial execution all that completes our story today, but not right. To wrap things up, I'll turn this back over to Tim Cawley.

Thanks, Kirk. The final piece of this story of our strength and commitment is governance. We have an engaged Board with the wide-ranging skills required to see our company through the clean energy transition and beyond. Transparency and integrity mark our public disclosures, and we scored 100% for the fifth year in a row in the widely followed CPA-Zicklin Index of corporate political disclosure and accountability. All that we have talked about today, providing unparalleled reliability, assisting customers experiencing bill pressure, enabling the clean energy transition and building our dividend track anchor would not be possible without the guidance of our strong Board and the commitment of our 15,000 remarkable employees. Let me close by returning to the core thesis. Con Edison is not a data center play. We're an energy infrastructure company serving one of the most essential and demanding regions in the world. Our growth is driven by electrification, climate resilience, reliability, customer energy solutions and the need to modernize the systems that keep New York operating. The work ahead is significant. We must build substations, reinforce networks, expand transmission, support EV charging, help customers electrify buildings, modernize gas and steam infrastructure, protect the system from extreme weather, manage affordability and maintain the financial strength necessary to invest for the long term. We must do all of this while continuing to deliver safe and reliable service every day. It's a demanding mission, but it's also a mission that matches Con Edison's history and capabilities. Durability is what we're about. For more than 200 years, we've adopted to change and powered New York through every era of growth. Today, we're doing that again in support of New York's energy transition. We're invented to meet demand, planning for the future, supporting customers and building the infrastructure required for a cleaner, more resilient and more reliable energy system. Thank you for your time, your interest and your continued confidence in Con Edison. We can now take some questions.

Tim, we do have some questions. And the first question concerns our proactive planning filing that we made last Friday. And could you just briefly summarize it.