Businessmodel of Con Edison

Customer Segments

Con Edison serves a range of products and services to customers in the US. The Company broadly organises its customers into the following categories:

• Residential and Religious, comprising general consumers – including single-family dwellings and individual apartments in multi-family dwellings – religious organisations such as churches, and certain other non-profit organisations.
• Commercial and Industrial, comprising commercial and industrial entities across multiple business sectors;
• Retail Choice, comprising customers that receive electricity purchased from other suppliers but delivered by Con Edison; and
• Public Authorities, including government and government-owned bodies, largely comprising municipal organisations and local and regional bodies. Con Edison exclusively serves customers in the US. The Company’s utility services are limited primarily to customers based in New York, northern New Jersey, northeastern Pennsylvania, and Westchester County.

Value Propositions

Con Edison provides value to its customers in the following ways:

• Its reputation and industry standing, with the Company being one of the largest investor-owned energy companies in the US, including a number of commercial customers and public bodies among its customers;
• The reliability and efficiency of its utility services, with the Company having a track-record of reliably providing electricity, gas and steam to customers across areas of the US;
• Its commitment to innovation and development, with the Company devoting a significant portion of its funds to research and development activities, with a view to providing its customers with up-to-date services;
• Its Retail Choice program, which allows customers to choose from which supplier it purchases its utilities, with Con Edison remaining the transmission company; and
• Its industry expertise and experience, with the Company employing specialist technical staff and experienced industry executives. ### Channels

Con Edison operates a website at www.coned.com, through which it provides customers with information on its services, business activities and tariffs. Customers are also able to manage their accounts through the Company’s website and pay utility bills directly. This functionality is also available through the Con Edison mobile app. The Company, however, does no operate an online sales channel.

Con Edison makes its sales through an in-house direct sales force, which customers are able to contact over the phone. It operates its own distribution channels and transmission facilities, which interconnect with those of the National Grid, Central Hudson Gas and Electric Corporation, Orange and Rockland Utilities, New York State Electric and Gas, Connecticut Light and Power Company, Long Island Power Authority, the New York Power Authority, and Public Service Electric and Gas Company. This includes the largest steam distribution system in the US, and the longest underground electric delivery system in the US.

Customer Relationships

Con Edison does not sell products to customers on a self-service basis; however, customers are able to manage their accounts and pay utility bills on a self-service basis through the Company’s website, without interacting with any Con Edison sales representatives.

Con Edison makes sales through its direct sales team, consulting with customers and agreeing fixed-term service contracts. The Company aims to establish long-term relationships with customers.

Con Edison provides ongoing support to its customers, who are able to contact customer service representatives over the phone, via email, and through the postal service. The Company also operates customer service walk-in centres where customers can receive personalised, in-person assistance.

The Con Edison website includes a range of support materials, including FAQs, guides, pricing guidelines, and safety tips. The Company is also able to interact with its customer through its social media accounts, including with Twitter and Facebook.

Key Activities

Con Edison is a holding company. It operates through a number of subsidiary companies – notably Consolidated Edison Company of New York, Orange and Rockland Utilities, and Con Edison Transmission – and owns several competitive energy businesses.

The Company also owns Con Edison Transmission, which invests in electric and gas transmission projects through its subsidiaries, Consolidated Edison Transmission and Con Edison Gas Midstream. Consolidated Edison Company of New York provides electricity, natural gas and steam to customers in New York City and Westchester County, while Orange and Rockland delivers electricity and natural gas to customers located in south-eastern New York, northern New Jersey and north eastern Pennsylvania.

Con Edison provides energy-related products and services to wholesale and retail customers, and develops, owns and operates renewable and energy infrastructure projects.

Key Partners

Con Edison enters into arrangements including leases, partnerships and electricity purchase agreements, with a range of companies and organisations.

Con Edison operates a Commercial & Industrial Energy Efficiency Program Market Partner Network, through which it collaborates with a range of experienced energy efficiency contractors, distributors and energy sector professionals. These partners provide technical support to the Company’s commercial and industrial customers with regard to the installation of energy efficient equipment and the completion of the application process. Con Edison’s market partners comprise consultants, engineering firms, suppliers and architects, including Serious Energy, Vidaris, Associated Renewable, Edwards and Zuck, AKF Group, and the Cotocon Group.

Con Edison also operates a community partnerships scheme, with a view to contributing to and maintaining the social, cultural, and economic stability of its service areas. To this end the Company collaborates with education groups, environmental stewardship groups, civic programs, arts and culture organisations, and volunteer programs. These partners include Bronxworks, City year, and Neighbourhood Housing Services of New York.

Key Resources

Con Edison’s key resources are its transmission and distribution infrastructure, its supply chain, its partnerships, its sales and support channels, and its personnel.

Con Edison operates a network of 62 area distribution substations and various distribution facilities across New York City and Westchester County, 36,929 miles of overhead distribution lines, 97,286 miles of underground distribution lines, 438 miles of owned or joint-owned overhead circuits, 39 transmission substations, and 62 area stations, as well as electric generating facilities in Manhattan, which are key to the Company’s operations.

Searches of records published by the US Patent and Trademark Office identified two patent applications filed in Con Edison’s name entitled ‘Machine learning for power grid’ and ‘Capital asset planning system’.

Cost Structure

Con Edison incurs costs in relation to the maintenance of its physical transmission and distribution infrastructure, the operation of the its electricity production facilities, the management of its supply chain, the management of its partnerships, the operation of its sales and support channels, and the retention of its personnel.

In 2015 Con Edison’s purchased power expenses amounted to $352 million, while its fuel expenses totaled $62 million. The Company also accrues costs in relation to the payment of salaries and benefits to its workforce of 14,806 employees across its three operating segments.

Revenue Streams

Con Edison generates revenue through the provision of utilities – including the production of electricity, the transmission of utilities supplied by third parties, and the provision of competitive energy services, and the development and operation of renewable and energy infrastructure projects.

In 2015 Con Edison recorded total operating revenue of $12.55 billion, down slightly on the $12.92 billion generated by the Company the previous year. The Company’s utility business accounts for the vast majority of its revenue, with Consolidated Edison Company of New York and Orange and Rockwell Utilities generating a combined utility revenue of $11.17 billion. Of this revenue, $10.33 billion was derived from the activities of Consolidated Edison Company of New York.