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Con Edison Media Relations
Richard D. Mulieri, Director
Telephone: (212) 460-4111

For Immediate Release: September 10, 1997

CON EDISON’S PLAN TO REDUCE RATES, FOSTER COMPETITION APPROVED

Con Edison’s plan to reduce rates for all electric customers by more than $1 billion and bring competition to the electric supply business in New York City and Westchester County within the next year was approved today by the New York State Public Service Commission (PSC). The plan also clears the way for Con Edison to provide competitive energy services to its traditional customers, as well as to new customers in the emerging energy marketplace.

"Today’s action marks the end of a year of intense negotiations and allows us to begin a new era for Con Edison and its customers," Con Edison Chairman and CEO Eugene R. McGrath said. "It’s a balanced plan that serves the interests of customers, employees and shareholders. It gives us substantial flexibility to develop new energy-related services for customers."

Significant Rate Reductions For All Customers
The plan’s rate reductions will total more than $1 billion. More than $800 million of the total is earmarked to cut residential and small business rates over five years, reducing rates for these customers 10 percent by the fifth year of the plan. Large commercial customers will receive a reduction of nearly $300 million over five years and large industrial customers’ rates will be cut by about $40 million.

In order to foster competition, Con Edison will sell at least half its in-city electric generating capacity. The company will submit a divestiture plan to the PSC early next year, and put the first of its power plants up for sale within three months of PSC approval of this plan, expected late next year.

Customers To Choose Electricity Suppliers
Under the plan approved today, competition for the sale of electricity will begin in mid-1998. Up to 60,000 customers, both commercial and residential, will be given the opportunity to choose their electricity suppliers. All customers who wish to choose an alternative electricity supplier could be able to do so within the next two years. Con Edison will continue to deliver the electricity to customers over its transmission and distribution systems. The process for choosing alternative suppliers is currently being developed and will be submitted shortly to the PSC for its review.

An aggressive public outreach and education program will inform customers of the opportunity to choose energy suppliers.

Flexibility in Providing Customer Services
The plan approved today by the PSC also gives Con Edison the flexibility to provide new services to customers and to expand into new businesses. Con Edison will continue to provide electric, natural gas and steam distribution services and will be regulated by the PSC. Unregulated subsidiaries will provide new services to customers and will compete with other entrants in the wholesale and retail energy markets.

Currently, three unregulated subsidiaries are in position or under development. Con Edison’s existing energy services company (ESCO), ProMark Energy, will provide electricity, natural gas and oil to commercial and residential customers throughout the Northeast. It also will offer a host of related services.

Another Con Edison subsidiary, Gramercy Development, Inc., will invest in energy and non-energy business endeavors, both in the United States and abroad. When formed, a third unregulated subsidiary will own and operate electric generating plants. It will sell power and energy to energy services companies and directly to large customers acting as their own energy services company.

Con Edison is one of the nation's largest investor-owned utilities, with nearly $7 billion in annual revenues and $14 billion in assets. The company provides electric, gas and steam service to three million customers in New York City and Westchester County, New York.