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## Con Edison of New York 

## Electric 

Con Edison of New York’s electric operating revenues in 2002 decreased $575 million compared with 2001, reflecting primari- ly lower fuel and purchased power costs of $227 million (dis- cussed below). The decrease also reflects the completion in March 2002 of amortizations of a previously deferred gain on the sale of divested plants and a previously deferred NYPA rev- enue increase ($43 million), a reserve established in 2002 for earnings in excess of a specified rate of return that are to be retained for customer benefit in accordance with the 2000 Electric Rate Agreement ($40 million), a reserve established in 2002 related to the sale of the company’s nuclear generating unit ($25 million), the amortization of the loss ($30 million) relat- ed to the sale of the company’s nuclear generating unit and rate reductions and other amortizations in accordance with the company’s rate agreements. The decrease in electric operating revenues was offset, in part, by an increase in electric sales revenues ($24 million) reflecting principally the hot summer weather. 

Con Edison of New York’s electric sales and deliveries, exclud- ing off-system sales, in 2002 compared with 2001 were: 

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Electricity delivery volumes in Con Edison of New York’s service territory increased 1.7 percent in 2002 compared with 2001. The increase reflects the impact of the hot summer weather, offset in part by the mild winter weather in the first quarter of 2002, and the soft economy. After adjusting for variations, prin- cipally weather and billing days in each period, electricity deliv- ery volumes in the service territory increased 0.5 percent in 2002. 

The company’s electric purchased power costs decreased $175 million in 2002 compared with 2001, due to a decrease in the price of purchased power and an increase in volumes of electricity purchased from other suppliers by participants in the 

retail access programs. This decrease was offset in part by the company’s increased purchased volumes resulting from the sale of the company’s nuclear generating unit in September 2001 and the hot summer weather in 2002. Fuel costs decreased $52 million as a result of decreased generation at company-owned power plants. In general, the company recovers prudently incurred fuel and purchased power costs pursuant to rate provisions approved by the PSC. 

The company’s electric operating income decreased $93 mil- lion in 2002 compared with 2001. The principal component of the decrease was lower net electric revenues (operating rev- enues less fuel and purchased power costs) of $348 million. The decrease in net electric revenues reflects the sale of the nuclear generation unit and the same factors (other than lower fuel and purchased power costs) as discussed above with respect to the decrease in electric operating income. The decrease in net electric revenues was offset in part by reduced other operations and maintenance expenses ($137 million) reflecting nuclear production expenses incurred in 2001 but not in 2002, and productivity improvements, lower depreciation and amortization expense ($32 million) and lower revenue taxes ($26 million). The decrease is also offset by lower operat- ing income tax of $62 million. 

## Gas 

Con Edison of New York’s gas operating revenues decreased $223 million, resulting primarily from the lower cost of pur- chased gas ($194 million) in 2002 compared with 2001. The lower cost of purchased gas reflects primarily lower unit costs. The lower revenues also reflect reduced sales volumes, result- ing primarily from the mild winter weather in the first quarter of 2002, and revenue reductions implemented in accordance with the gas rate agreement approved by the PSC in April 2002. Gas operating income decreased $8 million in 2002, reflecting a $29 million decrease in net revenues (operating revenues less gas purchased for resale), and increased property tax expense ($10 million), offset in part by reduced operations and mainte- nance expenses ($16 million), reduced revenue taxes ($10 mil- lion) and lower income taxes ($9 million). 

