To Our Stakeholders:

Our sustainability strategy is an integral part of our business, and helps to guide the decisions we make every day. We focus on serving our stakeholders, safeguarding the environment, and securing the long-term vitality of our company. Our work has yielded measurable results.

To meet the needs of our stakeholders—the more than nine million people who live in our region, our shareholders, and our 15,000 employees—we provide efficient and clean energy, reliably and safely. Our electric-delivery system is the most reliable in the country, and New Yorkers are taking advantage of incentives and rebates we provide to make their homes and businesses more energy efficient. More than 150,000 customers are using energy more efficiently because of our programs. In response to a fourfold increase in customers who want to switch from fuel oil, we are expanding our natural-gas service. Through our corporate giving, we support hundreds of local nonprofit groups that invest in the neighborhoods we serve.

Enduring heavy snow, sweltering heat, and hurricane winds and rain last year, our employees kept the energy flowing with fewer accidents and injuries than ever before. We are making excellent progress in reaching our goal to be among the industry's best in employee safety performance by 2014.

Protecting the environment and curtailing our carbon footprint are top priorities, and our efforts are paying off. In 2011 we reduced our greenhouse gas emissions by 12 percent, and in the last decade we've cut these emissions in half. One of our new substations was the first in the nation to be LEED-certified. Six new solar projects—with a total of 28 megawatts went online last year, and about 20 megawatts of new solar projects are set to go into service in 2012. Our new 75,000-panel solar farm is producing enough energy to power more than 5,000 homes in the Middle Atlantic region. Based on these successes, among others in this report, Newsweek magazine recognized us as the greenest utility in the nation.

We promote the company's sustainability by managing costs and investing strategically in our extensive energy-delivery systems. To keep pace with the growing renewable-energy market, we are investing $300 million over the next three years to develop green-power generation. Our sustainability efforts contribute to our financial success: our placement on the Dow Jones Sustainability Index for North America, and our top-20 ranking in Corporate Responsibility magazine's Best 100 Corporate Citizens, help us attract and keep investors.

This sustainability report details the work we are doing to meet the needs of the people we serve, protect the environment, and foster the fundamental strength of our company, for today and tomorrow.

Kevin Burke
Chairman, President and Chief Executive Officer

Randolph Price
Vice President Environment, Health and Safety