Con Ed Capital Plans Caught Between Affordability and Reliability Concerns

Written by John Egan for IIR News (Sugar Land, Texas)

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Summary

New York combination electric, gas and steam utility Consolidated Edison Incorporated plans to make capital investments totaling about $72 billion over the next decade, mainly to preserve system reliability, but the utility has faced heavy push-back from customers and elected officials.

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Con Ed Lays Out $72-Billion, 10-Year Capital Spending Program

Jennifer Hensley, senior vice president of corporate affairs for Consolidated Edison Incorporated (Con Ed) (New York, New York) told investors last October that it needed to make about $72 billion of investments over the next decade "to maintain the safety and reliability of our system and to manage growth as more customers electrify their heating and transportation. And also to fortify our grid against extreme weather events that data shows are occurring more frequently and with greater severity."

But the first tranche of that capital spending plan, a three-year proposal released in early 2025, under which electricity prices would rise 11.4% and gas prices would increase 13.3%, was heavily criticized by elected officials, including New York Governor Kathy Hochul and New York's then-mayoral candidate Zohran Mamdani, a Democratic Socialist who ran on a platform of affordability. Mamdani was elected last November and he reiterated his view that the price increases were unwarranted.

In late November, Con Ed cut the proposed three-year increases to 2.8% for electric customers and 2% for gas customers, but that didn't allay the concerns of elected officials. The matter currently sits in front of the New York Department of Public Service (DPS) (Albany, New York). Utility regulators in New York are appointed by the governor.

The utility serves the five boroughs of New York plus close-in New York suburban communities in Westchester, Rockland and Orange counties as well as some customers in Northern New Jersey. It delivers electricity to about 4 million customers, gas to roughly 1.2 million customers and steam to about 1,500 customers. It owns no electric generation.

Click on the images at right to see the areas served by Con Ed and its major proposed infrastructure projects.

Throughout 2025, Con Ed negotiated with the staff of the DPS and other intervenors, eventually resulting in a proposed settlement agreement that must be approved by DPS commissioners. The proposal before the regulators calls for about $20.2 billion in capital outlays over the 2026-2028 period. It is not clear when the matter will come to a vote.

Click on the image at right to see Con Ed's proposed three-year capital program for 2026-2028.

Industrial Info is tracking four active capital projects involving Con Ed, totaling about $363 million.

Reliability Concerns Emerge

Separate from the front-page drama over the affordability of electricity, a second challenge--reliability--emerged in late 2025 after New York's grid manager warned Con Ed that it faced potential blackouts in New York City as early as the summer of 2026 unless it addressed reliability concerns.

The report by the New York Independent System Operator (Rensselaer, New York), "Comprehensive Reliability Plan 2025-2034," said increased electricity demand and decreasing fossil fuel generation capacity may lead to power outages in New York City as soon as this summer. It asked Con Ed for a plan to prevent that from happening.

"If these risks materialize without timely action, the consequences could extend beyond operational challenges to widespread impacts on public safety, property, and economic activity," the grid manager wrote in the report, released November 21.

In discussing the overall New York electric grid, which extends beyond Con Ed's service territory, the report noted, "The grid is at an inflection point, driven by the convergence of three structural trends: the aging of the existing generation fleet, the rapid growth of large loads, and the increasing difficulty of developing new dispatchable resources. These trends are not isolated, they are compounding."

Proposal Comes During Heightened Focus on Affordability

However the DPS decides on the rate case before it, the Con Ed capital expenditure (capex) program comes with consumers in a sour mood and elected officials increasingly facing calls to lower the cost of living. "Affordability" was the watchword in last fall's elections, which brought Democrats (and one Democratic Socialist) into office. Affordability is shaping up as a key driver of the 2026 mid-term elections in Congress. Despite his initial denial that consumers face a rising cost of living, President Trump has felt compelled to address affordability in recent weeks.

Con Ed operates in a challenging built environment, where skyscrapers define the New York skyline and high customer densities are the rule in the five New York boroughs. Approximately 72% of its electric system is underground, which provides customers with higher levels of reliability and resilience to wind, storms, wildfires, extreme weather and other events that cause problems for overhead electric systems.

Still, as electrification increasingly displaces natural gas in the areas it serves, the utility has plans to build at least 18 new substations in addition to the five it currently is building. A lot of the new demand will come from electric vehicles, building electrification and the increased deployment of electric heat pumps.

In considering a utility's request for a price increase, utility regulators assess how the requested increase will affect customers, principally residential customers. The regulators will have to make their decision in a context shaped, to an unusual degree, by sharply rising concerns over affordability and reliability.

Key Takeaways

• Con Edison wants to make capital investments totaling about $72 billion over the next decade, mainly to improve the reliability and resilience of its electric system.
• An early 2025 price plan drew widespread pushback from consumers and elected officials.
• In November 2025, Con Ed reached a settlement agreement with intervenors, including the staff of the New York Department of Public Service (DPS). That plan includes about $20.2 billion in capital outlays over the 2026-2028 period, essentially a down payment on longer-term capital needs.
• DPS Commissioners must approve any settlement before the utility can begin charging higher prices.
• The settlement agreement came as the New York grid manager warned of a rising potential for operational problems and potentially blackouts hitting New York City as early as the summer of 2026.

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Industrial Info Resources (IIR) is the leading provider of industrial market intelligence. Since 1983, IIR has provided comprehensive research, news and analysis on the industrial process, manufacturing and energy related industries. IIR's Global Market Intelligence (GMI) helps companies identify and pursue trends across multiple markets with access to real, qualified and validated plant and project opportunities. Across the world, IIR is tracking over 200,000 current and future projects worth $17.8 Trillion (USD).