Con Edison, Inc. (CEI) is one of the nation’s largest investor-owned energy companies, with over $12 billion in annual revenues and $40 billion in assets. The principal business segments of Con Edison, Inc. are Consolidated Edison Company of New York, Inc. (CECONY) with regulated electric, gas, and steam utility activities in the five boroughs of New York City and Westchester County; Orange & Rockland Utilities, Inc. (O&R) with regulated electric and gas utility activities in southeastern New York and northeastern Pennsylvania, and electricity in northern New Jersey; and Con Edison’s competitive energy businesses, Con Edison Solutions (CES), Con Edison Development (CED), and Con Edison Energy (CEE).
From our early history lighting gas lamps to today’s cutting edge electric vehicle and smart-grid technologies, Con Edison has powered New York for 200 years. A population of nearly ten million across our service territory depend on us to provide safe, reliable, and affordable energy to light and warm their homes, run their businesses, and help the region grow. Operationally, safety and sustainability are at the forefront of everything we do. Our employees work to ensure a zero-harm environment for the public, our employees, and the environment. In 2014, we reduced customer emissions through initiatives such as oil-to-gas conversions and energy efficiency improvements. Our infrastructure investments gave our customers greater control and expanded their energy choices. These initiatives not only benefit our customers, but they improve our community and better protect and preserve our environment.
This report outlines the many components of our sustainability strategy which, partnered with our Integrated Long Range Plan, will strengthen Con Edison and help us prepare for the challenges ahead, so that we can thrive and grow as a company for the next 200 years and beyond. Our sustainability strategy outlines how we strive to be an enterprise valued by all stakeholders, incorporating a focus on business, environmental, and community value as the foundation of our company strategy and our employees’ day-to-day activities. This vision is supported by six principles and 15 Key Sustainability Aspects which are mapped throughout this report using the icon mapping detailed in the sustainability strategy section.
As we further evaluate what the utility of the future means, we recognize that there are essential aspects of our business which will always remain fundamental to our success. We are committed to minimizing our impact to, and enhancing, the environment in which we work. There are five primary areas of focus related to our environmental stewardship disclosure: air quality, water, resource conservation, habitat and biodiversity, and climate change.
We also recognize safety as a core value and strive to achieve an injury-free workplace. We coordinate a robust safety program, communicate with our employees every day about the importance of identifying and mitigating hazards, and work to empower employees to take ownership of their own safety and that of their teammates. We rely on our employees to identify ways that we can improve safety. These combined efforts resulted in another record year of safety performance, with Con Edison of New York achieving an OSHA rate of 1.31, and Orange and Rockland reducing their rate to 1.26. Along with a commitment to keeping our employees safe, the safety of our contractors and members of the public are equal priorities for Con Edison.
The company’s continuing commitment to cost management, ethical operations and our rigorous audit program ensure our business remains compliant with regulations, that procedural requirements are correctly implemented, and that we continue to drive improvement.
Protecting our systems from extreme weather has long been part of Con Edison’s investment plan. From work as basic as trimming trees around power lines to investments in sophisticated smart-grid technologies, the measures give our energy-delivery systems greater flexibility and reliability.
Energizing the greatest city in the world without interruption demands an uncompromising focus on system reliability and resiliency. Each day, we monitor and maintain system components, work with customers to facilitate major construction and renovation, research and develop new technologies, and invest in infrastructure to serve growing areas of our service territory.
Con Edison is known for being one of the most reliable electric service providers in the U.S. — and has been the recipient of numerous reliability awards over the years, including most recently PA Consulting’s 2014 ReliabilityOne™ award for the Northeast region.
Safely and reliably supplying natural gas service to our more than 1.2 million gas customers is a daily focus for both Con Edison of New York and Orange and Rockland. To meet rising customer demand, we are enhancing our infrastructure to increase capacity and to protect our customers from any impact that might arise from a disruption to the interstate pipeline delivery system.
For all its benefits, natural gas also has risks. The invisible fuel dissolves in air and can only be detected by an odorant that is added to the fuel for safety or by specialized instrumentation. To protect customers, Con Edison of New York and Orange and Rockland work steadily to quickly respond to leak reports, identify, repair, and replace leak-prone pipes, and survey the system for new damage following weather events.
In 2014, Con Edison of New York replaced approximately 65 miles of leak-prone pipe against an annual target of 60 miles. This achieved the main replacement performance measure required under its current gas rate agreement. Under the terms of its gas rate agreement, Con Edison of New York will be replacing 65 miles in 2015 and 70 miles in 2016. In 2014, O&R replaced over 17 miles of gas main, exceeding the goal to replace no less than 90,000 feet, and reduced active gas leaks to an all-time low.
Con Edison also replaced 32.3 miles of cast iron main in 2014 compared to a target of 30 miles required under the curent gas rate agreement. The total gas leak backlog in 2014 was 740 leaks compared to an annual Public Service Commission goal of 950. Finally, total incoming gas leaks identified in 2014 were 8,717. A total of 10,961 repairs were made resulting in the backlog of 740 leaks described above. Together, these activities resulted in an estimated reduction in methane emissions of 0.009 million metric tons of carbon dioxide equivalent (based upon greenhouse gas reporting per foot emission factors for pipe materials).
Con Edison provides steam service to over 1,700 customers in Manhattan through an underground network of steam pipes, a steam-electric generating station, and five steam-only generating stations. Our focus on public safety continued in 2014, as we continued our integration of remote monitoring of structures prone to impact following major weather events.
Late in 2012, Superstorm Sandy impacted more than just our physical assets – it impacted the way we think about storm potential. From 2013 to 2016, Con Edison has proposed to invest approximately $1 billion to improve the resiliency of the electric and gas delivery systems and the steam generating stations. Con Edison of New York is investing in measures such as reinforced concrete flood walls around critical equipment, submersible pumps to control water infiltration, flood doors and gates at station openings, and expansive foam sealant in cable conduits and troughs which were installed at nine substations and three generating stations that were impacted by Sandy.
In 2014 we continued to implement system reliability enhancements to support peak use and address evolving issues like physical and cyber security.
Con Edison has a long tradition of contributing to and maintaining the social, cultural, and economic vitality of our service areas. Our community is comprised of all our stakeholders including customers, shareholders, employees, and the over 10 million people that make our service territory the diverse and prosperous region it is known around the world to be.
As we further evaluate what the utility of the future means, we recognize that there are essential aspects of our business which will always remain fundamental to our success. We are committed to minimizing our impact to, and enhancing, the environment in which we work. There are five primary areas of focus related to our environmental stewardship disclosure: air quality, water, resource conservation, habitat and biodiversity, and climate change.
We also recognize safety as a core value and strive to achieve an injury-free workplace. We coordinate a robust safety program, communicate with our employees every day about the importance of identifying and mitigating hazards, and work to empower employees to take ownership of their own safety and that of their teammates. We rely on our employees to identify ways that we can improve safety. These combined efforts resulted in another record year of safety performance, with Con Edison of New York achieving an OSHA rate of 1.31, and Orange and Rockland reducing their rate to 1.26. Along with a commitment to keeping our employees safe, the safety of our contractors and members of the public are equal priorities for Con Edison.
The company’s continuing commitment to cost management, ethical operations and our rigorous audit program ensure our business remains compliant with regulations, that procedural requirements are correctly implemented, and that we continue to drive improvement.
Con Edison supports hundreds of nonprofit organizations in New York City, and in Westchester, Orange and Rockland counties whose programs illustrate our dedication to healthy and sustainable communities. We commit our time and nearly $8 million in charitable funding. For gifts to academic institutions, Con Edison provides a double match for employee and retiree gifts up to $3,000, and a single match for gifts of $3,001 up to a maximum of $7,500 in one calendar year. In addition, Con Edison enhances its support of nonprofit organizations through in-kind, non-cash donations. For example, we donate compact fluorescent light bulbs, services, and loaned labor, whereby an employee with a particular expertise or skill assists a nonprofit on a short-term project or program.
In addition to financial support, our employees are actively engaged in our strategic partnerships program. Con Edison employee and retiree volunteers participate in diverse and innovative activities at nonprofits throughout our service territory, and donated more than 7,300 volunteer hours in 2014.
Con Edison recognizes that one of our most important resources is our people. We work hard to promote inclusion, ensuring that our employees represent the full vitality of the area we serve. Con Edison’s corporate culture is built around a strong commitment to ethical business practices. We continue to strive to be open, fair, trusted, and trusting, in all our relationships, both externally and internally. The company’s efforts focus on identifying observable behaviors, recognizing how perceptions become realities and how culture change can only happen as assumptions, mindsets, and ultimately, behaviors change. We continue to work on these areas from the top down.
We also know the value of ensuring our workforce has the ability to improve continually through career development. Con Edison’s Learning Center offers more than 800 classes, covering technical courses, as well as skills enhancement and leadership development for Con Edison of New York and Orange and Rockland employees. In 2014, employees spent 505,000 hours doing instructor-led skills-based and leadership training at the Learning Center. Additionally, employees spent over 100,000 hours doing eLearning on such topics as Enhancing Customer Relations, Standards of Business Conduct and Safety and Environment training. Employees also have the ability to take advantage of the company’s tuition reimbursement and corporate mentorship programs to further their development.
In line with a commitment to employee development, we look to make every voice heard, fostering an inclusive workplace for our employees to realize their full potential. Diversity at all levels of the company helps us see and understand the needs of our customers, the communities we serve, and the employees we work hard to recruit, develop, and retain. In 2014, Con Edison had 14,601 employees. Of these employees, 46 percent are minorities and 20 percent are women. Minority representation increased from 45 to 46 percent, and the percentage of women remained steady at 20 percent. Of the 846 employees hired in 2014, 51 percent were minorities and 28 percent were women. Minorities accounted for 48 percent of all promotions in 2014. Twenty-four percent of promotions were earned by women.
Of the total women promoted, 68 percent were minorities. The percentage of minorities in officer positions increased from 26 to 32 in 2014, and women made up 25 percent of positions in officer positions.
Finally, we look to attract and retain our talented workforce through a competitive employee compensation program consisting of fair wages, augmented by a comprehensive benefits program.
Our shareholders are critical to our success as we look to be recognized as a financially sound company and a preferred utility. We strive to adapt our business model to industry changes and manage risk to meet our shareholders’ expectation of financial stability and a growing dividend. Through strong cost management, we were able to again increase the annual dividend for the 40th consecutive year to $2.52 per share.
At Con Edison, we recognize that our suppliers are an important part of our value chain and their performance can impact our sustainability. The regulated utilities have a strict vendor qualification process, ensuring that the companies we contract with are able to provide the highest quality goods and services at the most reasonable cost for our customers. Con Edison’s award-winning supplier diversity program invites entrepreneurs and executives to partner with us in mutually beneficial business relationships. Our program combines collaboration through programming, as well as a commitment to purchase goods and services from minority- and women-owned business enterprises. Including fuel and gas, expenditures with minority- and women- owned businesses totaled more than $286 million. Along with a commitment to invest in our supplier diversity program, we have committed to spend $3 million annually on green products, which we again met in 2014.
If you have questions or comments about this report, please let us know by contacting sustainableconed@coned.com.
