Consolidated Edison, Inc.

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Prepared by MERRILL CORPORATION www.edgaradvantage.com

Form 10-Q
Securities and Exchange Commission
Washington, D.C. 20549

/x/	Quarterly Report Pursuant To Section 13 or 15(d) of the Securities Exchange Act of 1934
For The Quarterly Period Ended September 30, 2000
or
/ /	Transition Report Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934

Commission File Number	Exact name of registrant as specified in its charter and principal office address and telephone number	State of Incorporation	I.R.S. Employer ID. Number

1-14514	Consolidated Edison, Inc. 4 Irving Place, New York, New York 10003 (212) 460-4600	New York	13-3965100
1-1217	Consolidated Edison Company of New York, Inc. 4 Irving Place, New York, New York 10003 (212) 460-4600	New York	13-5009340
1-4315	Orange and Rockland Utilities, Inc. One Blue Hill Plaza, Pearl River, New York 10965 (914) 352-6000	New York	13-1727729

Indicate by check mark whether each Registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months, and (2) has been subject to such filing requirements for the past 90 days. Yes /x/ No / /

As of the close of business on October 31, 2000, Consolidated Edison, Inc. ("Con Edison") had outstanding 211,990,844 Common Shares ($.10 par value). Con Edison owns all of the outstanding common equity of Consolidated Edison Company of New York, Inc. ("Con Edison of New York") and Orange and Rockland Utilities, Inc. ("O&R").

O&R meets the conditions specified in general instruction H (1) (a) and (b) of form 10-Q
and is therefore filing this form with the reduced disclosure format.

Table of Contents

			PAGE


Filing Format			3
Forward-Looking Statements			3
Part I.	Financial Information
Item 1.	Financial Statements
	Con Edison	Consolidated Balance Sheet	4-5
		Consolidated Income Statements	6-7
		Consolidated Statement of Cash Flows	8
		Notes to Financial Statements	9
	Con Edison	Consolidated Balance Sheet	14-15
	of New York	Consolidated Income Statements	16-17
		Consolidated Statement of Cash Flows	18
		Notes to Financial Statements	19
	O&R	Consolidated Balance Sheet	23-24
		Consolidated Income Statements	25-26
		Consolidated Statement of Cash Flows	27
		Notes to Financial Statements	28
Item 2.	Management's Discussion and Analysis of Financial Condition and Results of Operations
	Con Edison		32
	Con Edison of New York		49
	O&R		*
O&R Management's Narrative Analysis of the Results of Operations			64
Item 3.	Quantitative and Qualitative Disclosures About Market Risk
	Con Edison		68
	Con Edison of New York		68
	O&R		*
Part II.	Other Information
Item 1.	Legal Proceedings		69
Item 6.	Exhibits and Reports on Form 8-K		71

* O&R is omitting this information pursuant to General Instruction H of Form 10-Q.

Filing Format

This Quarterly Report on Form 10-Q is a combined report being filed separately by three different registrants: Consolidated Edison, Inc. ("Con Edison"), Consolidated Edison Company of New York, Inc. ("Con Edison of New York") and Orange and Rockland Utilities, Inc. ("O&R"). Neither Con Edison of New York nor O&R makes any representation as to the information contained in this report relating to Con Edison or the subsidiaries of Con Edison other than itself.

O&R, a wholly-owned subsidiary of Con Edison, meets the conditions specified in General Instruction H of Form 10-Q and is permitted to use the reduced disclosure format for wholly-owned subsidiaries of companies, such as Con Edison, that are reporting companies under the Securities Exchange Act of 1934. Accordingly, O&R has omitted from this report the information called for by Part 1, Item 2, Management's Discussion and Analysis of Financial Condition and Results of Operations and has included in this report its Management's Narrative Analysis of the Results of Operations. In accordance with general instruction H, O&R has also omitted from this report the information, if any, called for by Part 1, Item 3, Quantitative and Qualitative Disclosure About Market Risk; Part II, Item 2, Changes in Securities and Use of Proceeds; Part II, Item 3, Defaults Upon Senior Securities; and Part II, Item 4, Submission of Matters to a Vote of Security Holders.

Forward-Looking Statements

This Quarterly Report on Form 10-Q includes forward-looking statements, which are statements of future expectation and not facts. Words such as "estimates," "expects," "anticipates," "intends," "plans" and similar expressions identify forward-looking statements. Actual results or developments might differ materially from those included in the forward-looking statements because of factors such as competition and industry restructuring, Con Edison's pending acquisition of Northeast Utilities, the ongoing Indian Point 2 outage, technological developments, changes in economic conditions, changes in historical weather patterns, changes in laws, regulations or regulatory policies, developments in legal or public policy doctrines, and other presently unknown or unforeseen factors.

Consolidated Edison, Inc.

CONSOLIDATED BALANCE SHEET

			As at
As at September 30, 2000 and December 31, 1999 (Unaudited)			September 30, 2000		December 31, 1999

			(Thousands of Dollars)
ASSETS
UTILITY PLANT, AT ORIGINAL COST
	Electric		$	11,621,217	$	11,323,826
	Gas			2,263,998		2,197,735
	Steam			732,371		722,265
	General			1,369,405		1,328,544
	Unregulated generating assets			351,702		48,583

	TOTAL			16,338,693		15,620,953
	Less: Accumulated depreciation			5,028,658		4,733,613

	NET			11,310,035		10,887,340
	Construction work in progress			497,748		381,804
	Nuclear fuel assemblies and components, less accumulated amortization			106,757		84,701

NET UTILITY PLANT				11,914,540		11,353,845

CURRENT ASSETS
	Cash and temporary cash investments			72,810		485,050
	Accounts receivable - customer, less allowance for uncollectible accounts of $29,675 and $34,821			800,019		647,545
	Other receivables			108,137		98,454
	Fuel, at average cost			23,040		24,271
	Gas in storage, at average cost			75,586		55,387
	Materials and supplies, at average cost			160,347		142,905
	Prepayments			495,676		197,671
	Other current assets			81,901		61,395

TOTAL CURRENT ASSETS				1,817,516		1,712,678

INVESTMENTS
	Nuclear decommissioning trust funds			335,444		305,717
	Other			214,871		182,201

TOTAL INVESTMENTS				550,315		487,918

DEFERRED CHARGES AND REGULATORY ASSETS
	Goodwill			419,328		427,496
	Regulatory assets
		Future federal income tax		750,353		785,014
		Recoverable energy costs		218,566		95,162
		Power contract termination costs		73,063		71,861
		Accrued unbilled revenues		74,105		67,775
		Divestiture - capacity replacement reconciliation		73,850		24,373
		Deferred revenue taxes		67,685		60,712
		Property tax reconciliation		49,229		29,751
		Deferred pension and other postretirement benefits		43,956		57,630
		Deferred environmental remediation costs		74,990		13,330
		Other		193,448		172,504

	TOTAL REGULATORY ASSETS			1,619,245		1,378,112
	Other deferred charges			187,006		171,427

TOTAL DEFERRED CHARGES AND REGULATORY ASSETS				2,225,579		1,977,035

TOTAL			$	16,507,950	$	15,531,476

The accompanying notes are an integral part of these financial statements.

Consolidated Edison, Inc.

CONSOLIDATED BALANCE SHEET

			As at
As at September 30, 2000 and December 31, 1999 (Unaudited)			September 30, 2000			December 31, 1999

			(Thousands of Dollars)
CAPITALIZATION AND LIABILITIES
CAPITALIZATION
	Common stock, authorized 500,000,000 shares; outstanding 211,986,844 shares and 213,810,634 shares		$	1,482,346		$	1,482,341
	Retained earnings			5,111,002			4,921,089
	Treasury stock, at cost; 23,210,700 shares and 21,358,500 shares			(1,014,740	)		(955,311	)
	Capital stock expense			(35,884	)		(36,112	)

	TOTAL COMMON SHAREHOLDERS' EQUITY			5,542,724			5,412,007

	Preferred stock subject to mandatory redemption			37,050			37,050
	Other preferred stock			212,563			212,563
	Long-term debt			5,222,309			4,524,604

TOTAL CAPITALIZATION				11,014,646			10,186,224

NONCURRENT LIABILITIES
	Obligations under capital leases			32,283			34,544
	Accumulated provision for injuries and damages			131,528			119,010
	Pension and benefits reserve			187,130			143,757
	Other noncurrent liabilities			51,124			42,865

TOTAL NONCURRENT LIABILITIES				402,065			340,176

CURRENT LIABILITIES
	Long-term debt due within one year			158,910			395,000
	Notes payable			243,004			495,371
	Accounts payable			832,264			615,983
	Customer deposits			203,158			204,421
	Accrued taxes			122,009			18,389
	Accrued interest			81,680			60,061
	Accrued wages			81,217			79,408
	Other current liabilities			297,247			232,706

TOTAL CURRENT LIABILITIES				2,019,489			2,101,339

DEFERRED CREDITS AND REGULATORY LIABILITIES
	Accumulated deferred federal income tax			2,410,001			2,267,548
	Regulatory liabilities
		Gain on divestiture		310,623			306,867
		Accumulated deferred investment tax credits		133,706			139,838
		NYPA revenue increase		32,676			25,630
		Interruptible sales credit		21,028			23,715
		Other		163,714			139,972

	TOTAL REGULATORY LIABILITIES			661,747			636,022
	Other deferred credits			2			167

TOTAL DEFERRED CREDITS AND REGULATORY LIABILITIES				3,071,750			2,903,737

TOTAL			$	16,507,950		$	15,531,476

The accompanying notes are an integral part of these financial statements.

CONSOLIDATED EDISON, INC.
CONSOLIDATED INCOME STATEMENT
FOR THE THREE MONTHS ENDED SEPTEMBER 30, 2000 AND 1999
(UNAUDITED)

			2000			1999
			(Thousands of Dollars)
Operating revenues
	Electric		$	2,328,220		$	2,005,523
	Gas			177,891			154,548
	Steam			82,837			66,808
	Non-utility			231,831			119,362

		Total operating revenues		2,820,779			2,346,241

Operating expenses
	Purchased power			1,208,450			647,360
	Fuel			105,544			110,402
	Gas purchased for resale			131,921			81,172
	Other operations			263,463			325,389
	Maintenance			114,971			115,753
	Depreciation and amortization			150,786			134,470
	Taxes, other than federal income tax			330,041			317,826
	Federal income tax			130,730			190,585

		Total operating expenses		2,435,906			1,922,957

Operating income				384,873			423,284
Other income (deductions)
	Investment income			1,520			7,478
	Allowance for equity funds used during construction			542			859
	Other income less miscellaneous deductions			6,560			1,325
	Federal income tax			(2,075	)		(4,329	)

		Total other income (deductions)		6,547			5,333

Income before interest charges				391,420			428,617
Interest on long-term debt				95,399			84,498
Other interest				13,899			5,171
Allowance for borrowed funds used during construction				(1,148	)		(457	)

		Net interest charges		108,150			89,212

Net income				283,270			339,405
Preferred stock dividend requirements				3,399			3,399

Net income for common stock			$	279,871		$	336,006

Common shares outstanding—average (000)				211,974			220,293
Basic earnings per share			$	1.32		$	1.50

Diluted earnings per share			$	1.32		$	1.50

Dividends declared per share of common stock			$	0.545		$	0.535

The accompanying notes are an integral part of these financial statements.

Consolidated Edison, Inc.

CONSOLIDATED INCOME STATEMENT

For the nine months ended September 30, 2000 and 1999 (Unaudited)		2000			1999

		(Thousands of Dollars)
OPERATING REVENUES
	Electric	$	5,371,732		$	4,361,566
	Gas		894,380			725,590
	Steam		327,695			260,419
	Non-utility		587,458			254,332

TOTAL OPERATING REVENUES			7,181,265			5,601,907

OPERATING EXPENSES
	Purchased power		2,724,301			1,216,637
	Fuel		239,189			349,369
	Gas purchased for resale		562,758			339,716
	Other operations		865,426			899,613
	Maintenance		349,943			320,634
	Depreciation and amortization		439,125			400,793
	Taxes, other than federal income tax		896,471			903,185
	Federal income tax		265,141			340,524

TOTAL OPERATING EXPENSES			6,342,354			4,770,471

OPERATING INCOME			838,911			831,436
OTHER INCOME (DEDUCTIONS)
	Investment income		8,461			9,500
	Allowance for equity funds used during construction		451			2,768
	Other income less miscellaneous deductions		2,310			(117	)
	Federal income tax		(2,315	)		(5,207	)

TOTAL OTHER INCOME (DEDUCTIONS)			8,907			6,944

INCOME BEFORE INTEREST CHARGES			847,818			838,380
	Interest on long-term debt		266,370			236,161
	Other interest		38,436			14,322
	Allowance for borrowed funds used during construction		(3,935	)		(1,349	)

NET INTEREST CHARGES			300,871			249,134

NET INCOME			546,947			589,246

PREFERRED STOCK DIVIDEND REQUIREMENTS			10,194			10,194

NET INCOME FOR COMMON STOCK		$	536,753		$	579,052

COMMON SHARES OUTSTANDING - AVERAGE (000)			212,240			225,754
BASIC EARNINGS PER SHARE		$	2.53		$	2.56

DILUTED EARNINGS PER SHARE		$	2.53		$	2.56

DIVIDENDS DECLARED PER SHARE OF COMMON STOCK		$	1.635		$	1.605

The accompanying notes are an integral part of these financial statements.

Consolidated Edison, Inc.

CONSOLIDATED STATEMENT OF CASH FLOWS

For the nine months ended September 30, 2000 and 1999 (Unaudited)			2000			1999

			(Thousands of Dollars)
OPERATING ACTIVITIES
	Net income for common stock		$	536,753		$	579,052
	PRINCIPAL NON-CASH CHARGES (CREDITS) TO INCOME
		Depreciation and amortization		439,125			400,793
		Federal income tax deferred (excluding taxes resulting from divestiture of plant)		164,031			74,655
		Common equity component of allowance for funds used during construction		(451	)		(2,768	)
		Other non-cash charges		28,437			27,573
	CHANGES IN ASSETS AND LIABILITIES
		Accounts receivable - customer, less allowance for uncollectibles		(152,474	)		(137,138	)
		Materials and supplies, including fuel and gas in storage		(36,410	)		44,790
		Prepayments, other receivables and other current assets		(328,194	)		(212,638	)
		Enlightened Energy program costs		17,261			26,651
		Deferred recoverable energy costs		(123,404	)		(49,691	)
		Cost of removal less salvage		(83,386	)		(48,931	)
		Power contract termination costs		(1,050	)		(1,050	)
		Accounts payable		216,281			175,426
		Accrued income taxes		27,766			93,173
		Other-net		43,002			48,444

NET CASH FLOWS FROM OPERATING ACTIVITIES				747,287			1,018,341

INVESTING ACTIVITIES INCLUDING CONSTRUCTION
		Construction expenditures		(633,180	)		(435,527	)
		Nuclear fuel expenditures		(26,473	)		(4,394	)
		Contributions to nuclear decommissioning trust		(15,975	)		(15,975	)
		Common equity component of allowance for funds used during construction		451			2,768
		Payment for purchase of Orange and Rockland, net of cash and cash equivalents		—			(509,083	)
		Divestiture of utility plant (net of federal income tax)		—			1,138,750
		Non-regulated subsidiary investments		(19,072	)		(54,180	)
		Non-regulated subsidiary utility plant		(256,392	)		(48,152	)

NET CASH FLOWS (USED IN) FROM INVESTING ACTIVITIES INCLUDING CONSTRUCTION				(950,641	)		74,207

FINANCING ACTIVITIES INCLUDING DIVIDENDS

		Repurchase of common stock		(68,531	)		(672,702	)
		Repayments of short-term debt		(252,367	)		—
		Additions to long-term debt		858,660			567,700
		Retirement of long-term debt		(395,000	)		(225,000	)
		Advance refunding of long-term debt		—			(300,000	)
		Issuance and refunding costs		(4,894	)		(13,971	)
		Common stock dividends		(346,754	)		(361,930	)

NET CASH FLOWS USED IN FINANCING ACTIVITIES INCLUDING DIVIDENDS				(208,886	)		(1,005,903	)

NET INCREASE (DECREASE) IN CASH AND TEMPORARY CASH INVESTMENTS				(412,240	)		86,645

CASH AND TEMPORARY CASH INVESTMENTS AT JANUARY 1				485,050			102,295

CASH AND TEMPORARY CASH INVESTMENTS AT SEPTEMBER 30			$	72,810		$	188,940

SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION
	Cash paid during the period for:
		Interest	$	241,157		$	247,017
		Income taxes		74,245			624,275

The accompanying notes are an integral part of these financial statements.

NOTES TO FINANCIAL STATEMENTS - CON EDISON

Note A - General

These footnotes accompany and form an integral part of the interim consolidated financial statements of Consolidated Edison, Inc. (Con Edison) and its subsidiaries, including the regulated utility Consolidated Edison Company of New York, Inc. (Con Edison of New York), the regulated utility Orange and Rockland Utilities, Inc. (O&R), which Con Edison acquired in July 1999, and several non-utility subsidiaries. These financial statements are unaudited but, in the opinion of Con Edison's management, reflect all adjustments (which include only normally recurring adjustments) necessary for a fair statement of the results for the interim periods presented. These financial statements should be read together with the audited Con Edison financial statements (including the notes thereto) included in the combined Con Edison, Con Edison of New York and O&R Annual Report on Form 10-K for the year ended December 31, 1999 (the "Form 10-K").

Note B - Environmental Matters

Hazardous substances, such as asbestos, polychlorinated biphenyls (PCBs) and coal tar, have been used or generated in the course of operations of Con Edison's utility subsidiaries and may be present in their facilities and equipment.

The Federal Comprehensive Environmental Response, Compensation and Liability Act of 1980 (Superfund) and similar state statutes impose joint and several strict liability, regardless of fault, upon generators of hazardous substances for resulting removal and remedial costs and environmental damages. Liabilities under these laws can be material and in some instances may be imposed without regard to fault, or may be imposed for past acts, even though such past acts may have been lawful at the time they occurred.

At September 30, 2000, Con Edison had accrued $120.0 million as its best estimate of the utility subsidiaries' liability for sites as to which they have received process or notice alleging that hazardous substances generated by them (and, in most instances, other potentially responsible parties) were deposited. There will be additional liability at these sites and other sites, the amount of which is not presently determinable but may be material to Con Edison's financial position, results of operations or liquidity.

Con Edison's utility subsidiaries are permitted under current rate agreements to defer for subsequent recovery through rates certain site investigation and remediation costs with respect to hazardous waste. At September 30, 2000, $74.9 million of such costs had been deferred as a regulatory asset.

Suits have been brought in New York State and federal courts against Con Edison's utility subsidiaries and many other defendants, wherein a large number of plaintiffs sought large amounts of compensatory and punitive damages for deaths and injuries allegedly caused by exposure to asbestos at various premises

of the utility subsidiaries. Many of these suits have been disposed of without any payment by the utility subsidiaries, or for immaterial amounts. The amounts specified in all the remaining suits total billions of dollars but Con Edison believes that these amounts are greatly exaggerated, as were the claims already disposed of. Based on the information and relevant circumstances known to Con Edison at this time, it does not believe that these suits will have a material adverse effect on its financial position, results of operations or liquidity.

Note C - Nuclear Generation

Con Edison of New York owns the Indian Point 2 nuclear generating unit, which has a capacity of approximately 1,000 MW, and the retired Indian Point 1 nuclear generating unit. See Note G to the Con Edison financial statements included in the Form 10-K.

On February 15, 2000, Con Edison of New York shut down Indian Point 2 following a leak in one of its four steam generators. Con Edison of New York expects to complete replacement of the steam generators by the end of 2000, and estimates that replacement will require capital expenditures of up to $150 million (exclusive of the costs of the replacement steam generators, which it has owned since 1988).

The staff of the Nuclear Regulatory Commission (NRC) has advised Con Edison of New York that it will monitor Indian Point 2 with heightened oversight.

The New York State Public Service Commission (PSC) is investigating the Indian Point 2 outage and its causes and the prudence of Con Edison of New York's actions regarding the operation and maintenance of Indian Point 2. The PSC has indicated that the examination should include, among other things, Con Edison of New York's inspection practices, the circumstances surrounding Indian Point 2's October 1997 to September 1998 outage, the basis for postponement of the steam generator replacement and whether, and to what extent, increased replacement power costs and repair and replacement costs should be borne by Con Edison's shareholders. Con Edison of New York is in settlement discussions with the staff of the PSC and other interested parties with respect to this proceeding.

In August 2000, following the passage of the Indian Point 2 Law (discussed below) and pursuant to a PSC order, Con Edison of New York revised its electric tariff to prevent prospective recovery of Indian Point 2 replacement power costs.

The "Indian Point 2 Law" was signed into law by New York Governor Pataki in August 2000. The law directed the PSC to prohibit Con Edison of New York from recovering Indian Point 2 replacement power costs from customers. In October 2000, United States District Court for the Northern District of New York, in an action entitled Consolidated Edison Company of New York, Inc. v. Pataki, et al., determined that the Indian Point 2 Law was unconstitutional and granted the company's motion for a permanent injunction to prevent its implementation. Appeals of the court's decision have been filed in the United States Court of Appeals for the Second Circuit.

Con Edison of New York has billed to customers the Indian Point 2 replacement power costs incurred prior to August 2000, but not the replacement power costs it has incurred since then (which amounted to approximately $32 million in August 2000, $26 million in September 2000 and $31.5 million in October 2000).

Westchester County, New York is suing the PSC and Con Edison of New York seeking to prevent the company from recovering costs relating to the ongoing outage. The suit, which is entitled The County of Westchester et al., v. Maureen O. Helmer, et al., was brought in May 2000 in the Supreme Court of the State of New York, County of Albany.

In November 2000, Con Edison of New York entered into an agreement with Entergy Corporation for the sale of Indian Point 2, the retired Indian Point 1 and certain related assets for $602 million. The sale is subject to NRC, PSC and Federal Energy Regulatory Commission approvals and other conditions.

Con Edison believes that the operation, maintenance and inspection practices related to Indian Point 2 have been prudent. However, the company is unable to predict whether or not any Indian Point 2-related proceedings, lawsuits, legislation or other actions, will have a material adverse effect on its financial position, results of operations or liquidity.

Note D - O&R

In July 1999, Con Edison completed its acquisition of O&R for $791.5 million in cash. See Note K to the Con Edison financial statements included in the Form 10-K. The unaudited pro forma consolidated Con Edison financial information shown below has been prepared based upon the historical consolidated income statements of Con Edison and O&R for the nine-month period ended September 30,1999, giving effect to the acquisition as if it had occurred at January 1, 1999. The historical information has been adjusted to reflect amortization for the nine-month period of the goodwill recorded by Con Edison in connection the acquisition and the after-tax cost Con Edison would have incurred during the period for financing the acquisition by issuing debt on January 1, 1999 at an assumed 8 percent per annum interest rate. The proforma information is not necessarily indicative of the results that Con Edison would have had if the acquisition had been completed prior to July 1999, or the results that Con Edison will have in the future.

	Nine Months Ended September 30, 1999
Revenues	$	5,927,399
Operating income		816,855
Net income		544,591
Non-recurring charges		21,530
Adjusted net income		566,121
Earnings per share	$	2.51
Average shares outstanding (000)		225,754

Note E - Financial Information by Business Segment (Thousands of Dollars)

For the three months ended September 30, 2000 and 1999
(Unaudited)

	Electric						Gas
	2000			1999			2000		1999

Operating revenues	$	2,328,220		$	2,005,523		$	177,891	$	154,548
Intersegment revenues		4,623			56,607			719		878
Depreciation and amortization		119,943			108,361			17,482		17,826
Operating income		390,411			433,987			525		(1,963	)
	Steam						Other
	2000			1999			2000		1999

Operating revenues	$	82,837		$	66,808		$	231,831	$	119,362
Intersegment revenues		467			423			157		—
Depreciation and amortization		4,631			4,513			8,730		3,770
Operating income		(11,468	)		(7,539	)		5,405		(1,201	)
	Total
	2000			1999

Operating revenues	$	2,820,779		$	2,346,241
Intersegment revenues		5,966			57,908
Depreciation and amortization		150,786			134,470
Operating income		384,873			423,284

For the nine months ended September 30, 2000 and 1999
(Unaudited)

	Electric				Gas
	2000		1999		2000			1999

Operating revenues	$	5,371,732	$	4,361,566	$	894,380		$	725,590
Intersegment revenues		36,359		116,233		5,155			1,988
Depreciation and amortization		355,664		333,046		51,624			49,528
Operating income		695,039		711,343		130,209			111,104
	Steam				Other
	2000		1999		2000			1999

Operating revenues	$	327,695	$	260,419	$	587,458		$	254,332
Intersegment revenues		1,401		1,250		848			309
Depreciation and amortization		13,841		13,438		17,996			4,781
Operating income		14,906		19,777		(1,243	)		(10,788	)
	Total
	2000		1999

Operating revenues	$	7,181,265	$	5,601,907
Intersegment revenues		43,763		119,780
Depreciation and amortization		439,125		400,793
Operating income		838,911		831,436

Note F - New Financial Accounting Standard

In June 2000, Statement of Financial Accounting Standards (SFAS) No. 138, "Accounting for Certain Derivative Instruments and Certain Hedging Activities - an amendment of FASB Statement No. 133," was issued. SFAS No. 133, "Accounting for Derivative Instruments and Hedging Activities," is effective for fiscal years beginning after June 15, 2000. The company will adopt SFAS No. 133, as amended by SFAS No. 138, on January 1, 2001. The application of SFAS No. 133, as amended by SFAS No. 138, is not expected to have a material effect on the financial position or results of operations of the company or materially change its current disclosure practices.

Consolidated Edison Company of New York, Inc.

CONSOLIDATED BALANCE SHEET

			As at
As at September 30, 2000 and December 31, 1999 (Unaudited)			September 30, 2000		December 31, 1999

			(Thousands of Dollars)
ASSETS
UTILITY PLANT, AT ORIGINAL COST
	Electric		$	10,952,705	$	10,670,257
	Gas			1,989,968		1,934,090
	Steam			732,371		722,265
	General			1,261,821		1,220,948

	TOTAL			14,936,865		14,547,560
	Less: Accumulated depreciation			4,613,790		4,384,783

	NET			10,323,075		10,162,777
	Construction work in progress			472,224		359,431
	Nuclear fuel assemblies and components, less accumulated amortization			106,757		84,701

NET UTILITY PLANT				10,902,056		10,606,909

CURRENT ASSETS
	Cash and temporary cash investments			46,309		349,033
	Accounts receivable - customer, less allowance for uncollectible accounts of $21,883 and $22,600			649,694		541,978
	Other receivables			84,294		71,746
	Fuel, at average cost			22,435		23,641
	Gas in storage, at average cost			59,065		40,280
	Materials and supplies, at average cost			153,404		138,300
	Prepayments			466,207		178,693
	Other current assets			43,050		32,513

TOTAL CURRENT ASSETS				1,524,458		1,376,184

INVESTMENTS
	Nuclear decommissioning trust funds			335,444		305,717
	Other			24,513		18,491

TOTAL INVESTMENTS				359,957		324,208

DEFERRED CHARGES AND REGULATORY ASSETS

	Regulatory assets
		Future federal income tax		717,620		751,899
		Recoverable energy costs		181,984		78,650
		Divestiture - capacity replacement reconciliation		73,850		24,373
		Power contract termination costs		73,063		71,861
		MTA business tax surcharge		58,736		60,712
		Property tax reconciliation		49,229		29,751
		Accrued unbilled gas revenue		43,594		43,594
		Deferred environmental remediation costs		41,247		10,000
		Other		171,087		148,371

	TOTAL REGULATORY ASSETS			1,410,410		1,219,211
	Other deferred charges			163,182		155,640

TOTAL DEFERRED CHARGES AND REGULATORY ASSETS				1,573,592		1,374,851

TOTAL			$	14,360,063	$	13,682,152

The accompanying notes are an integral part of these financial statements.

Consolidated Edison Company of New York, Inc.

CONSOLIDATED BALANCE SHEET

				As at
As at September 30, 2000 and December 31, 1999 (Unaudited)				September 30, 2000			December 31, 1999

				(Thousands of Dollars)
CAPITALIZATION AND LIABILITIES
CAPITALIZATION
	Common stock			$	1,482,341		$	1,482,341
	Repurchased Concolidated Edison, Inc. common stock				(962,092	)		(940,477	)
	Retained earnings				4,056,978			3,887,993
	Capital stock expense				(35,884	)		(36,086	)

	TOTAL COMMON SHAREHOLDER'S EQUITY				4,541,343			4,393,771

	Preferred stock
		Subject to mandatory redemption 6¹/8% Series J			37,050			37,050

	TOTAL SUBJECT TO MANDATORY REDEMPTION				37,050			37,050

		Other preferred stock
			$5 Cumulative Preferred		175,000			175,000
			4.65% Series C		15,330			15,330
			4.65% Series D		22,233			22,233

	TOTAL OTHER PREFERRED STOCK				212,563			212,563

	TOTAL PREFERRED STOCK				249,613			249,613

	Long-term debt				4,716,901			4,243,080

TOTAL CAPITALIZATION					9,507,857			8,886,464

NONCURRENT LIABILITIES
	Obligations under capital leases				32,184			34,406
	Accumulated provision for injuries and damages				122,070			110,131
	Pension and benefits reserve				115,932			76,807
	Other noncurrent liabilities				17,210			17,210

TOTAL NONCURRENT LIABILITIES					287,396			238,554

CURRENT LIABILITIES
	Long-term debt due within one year				150,000			275,000
	Accounts payable				697,042			505,357
	Notes payable				164,969			495,371
	Customer deposits				196,763			208,865
	Accrued taxes				104,694			23,272
	Accrued interest				74,642			51,581
	Accrued wages				81,217			79,408
	Other current liabilities				225,897			202,657

TOTAL CURRENT LIABILITIES					1,695,224			1,841,511

DEFERRED CREDITS AND REGULATORY LIABILITIES
	Accumulated deferred federal income tax				2,253,152			2,121,054
	Regulatory liabilities
		Gain on divestiture			310,623			306,867
		Accumulated deferred investment tax credits			126,695			132,487
		NYPA rate increase			32,676			25,630
		Interruptible sales credit			21,028			23,715
		Other			125,412			105,870

	Total regulatory liabilities				616,434			594,569
TOTAL DEFERRED CREDITS AND REGULATORY LIABILITIES					2,869,586			2,715,623

TOTAL				$	14,360,063		$	13,682,152

The accompanying notes are an integral part of these financial statements.

Consolidated Edison Company of New York, Inc.

CONSOLIDATED INCOME STATEMENT

For The Three Months Ended September 30, 2000 and 1999 (Unaudited)				2000			1999

				(Thousands of Dollars)
OPERATING REVENUES
	Electric			$	2,156,383		$	1,900,467
	Gas				159,439			141,697
	Steam				82,837			66,808

	TOTAL OPERATING REVENUES				2,398,659			2,108,972

OPERATING EXPENSES
	Purchased power				984,022			574,913
	Fuel				95,977			110,486
	Gas purchased for resale				72,866			52,484
	Other operations				212,756			264,557
	Maintenance				107,544			107,867
	Depreciation and amortization				134,651			123,962
	Taxes, other than federal income tax				307,983			295,446
	Federal income tax				123,067			179,775

	TOTAL OPERATING EXPENSES				2,038,866			1,709,490

OPERATING INCOME					359,793			399,482
Other income (deductions)
	Investment income				547			4,484
	Allowance for equity funds used during construction				439			851
	Other income less miscellaneous deductions				7,627			2,728
	Federal income tax				(2,501	)		(3,758	)

	TOTAL OTHER INCOME (DEDUCTIONS)				6,112			4,305

INCOME BEFORE INTEREST CHARGES					365,905			403,787
	Interest on long-term debt				85,633			77,468
	Other interest				11,540			3,768
	Allowance for borrowed funds used during construction				(994	)		(397	)

	NET INTEREST CHARGES				96,179			80,839

NET INCOME					269,726			322,948
PREFERRED STOCK DIVIDEND REQUIREMENTS					3,399			3,399
NET INCOME FOR COMMON STOCK				$	266,327		$	319,549

CON EDISON OF NEW YORK SALES
	Electric (thousands of kilowatthours)
		Con Edison of New York customers			9,263,651			9,785,280
		Delivery service for Retail Choice			2,597,461			2,743,698
		Delivery service to NYPA and others			2,682,320			2,753,558

		Total sales in service territory			14,543,432			15,282,536
		Off-system and ESCO sales			1,217,721			3,322,358
	Gas (dekatherms)
		Firm sales and transportation			10,914,927			10,024,570
		Off-peak firm/interruptible			3,049,018			2,894,472

			Total sales to Con Edison of New York customers		13,963,945			12,919,042
		Transportation of customer-owned gas
			NYPA		6,626,479			5,474,790
			Other		33,674,972			4,779,375
		Off-system sales			5,087,047			9,685,972

			Total sales and transportation		59,352,443			32,859,179
	Steam (thousands of pounds)				5,500,759			6,324,110

The accompanying notes are an integral part of these financial statements.

Consolidated Edison Company of New York, Inc.

CONSOLIDATED INCOME STATEMENT

For the Nine Months Ended September 30, 2000 and 1999 (Unaudited)				2000			1999

				(Thousands of Dollars)
OPERATING REVENUES
	Electric			$	5,009,046		$	4,310,741
	Gas				770,461			712,739
	Steam				327,695			260,419

TOTAL OPERATING REVENUES					6,107,202			5,283,899

OPERATING EXPENSES
	Purchased power				2,241,446			1,131,911
	Fuel				223,906			349,453
	Gas purchased for resale				323,046			265,737
	Other operations				709,050			807,958
	Maintenance				329,786			312,748
	Depreciation and amortization				399,149			389,274
	Taxes, other than federal income tax				835,402			875,635
	Federal income tax				251,184			333,962

TOTAL OPERATING EXPENSES					5,312,969			4,466,678

OPERATING INCOME					794,233			817,221
OTHER INCOME (DEDUCTIONS)
	Investment income				2,097			4,676
	Allowance for equity funds used during construction				214			2,760
	Other income less miscellaneous deductions				5,330			1,484
	Federal income tax				(1,685	)		(4,703	)

TOTAL OTHER INCOME (DEDUCTIONS)					5,956			4,217

INCOME BEFORE INTEREST CHARGES					800,189			821,438
	Interest on long-term debt				243,532			229,131
	Other interest				34,303			12,664
	Allowance for borrowed funds used during construction				(3,579	)		(1,289	)

NET INTEREST CHARGES					274,256			240,506

NET INCOME					525,933			580,932
PREFERRED STOCK DIVIDEND REQUIREMENTS					10,194			10,194

NET INCOME FOR COMMON STOCK				$	515,739		$	570,738

CON EDISON OF NEW YORK SALES
	Electric (thousands of kilowatthours)
		Con Edison of New York customers			24,282,320			25,359,206
		Delivery service for Retail Choice			6,973,290			5,609,770
		Delivery service to NYPA and others			7,494,113			7,483,393

		Total sales in service territory			38,749,723			38,452,369
		Off-system and ESCO sales			3,661,958			7,150,548
	Gas (dekatherms)
		Firm sales and transportation			71,562,503			68,229,912
		Off-peak firm/interruptible			11,404,662			10,857,220

			Total sales to Con Edison of New York customers		82,967,165			79,087,132
		Transportation of customer-owned gas
			NYPA		15,607,822			7,741,815
			Other		78,807,982			16,247,948
		Off-system sales			20,896,680			26,147,665

			Total sales and transportation		198,279,649			129,224,560
	Steam (thousands of pounds)				20,392,813			21,099,048

The accompanying notes are an integral part of these financial statements.

Consolidated Edison Company of New York, Inc.

CONSOLIDATED STATEMENT OF CASH FLOWS

For the Nine Months Ended September 30, 2000 and 1999 (Unaudited)			2000			1999

			(Thousands of Dollars)
OPERATING ACTIVITIES
	Net income		$	525,933		$	580,932
	PRINCIPAL NON-CASH CHARGES (CREDITS) TO INCOME
		Depreciation and amortization		399,149			389,274
		Federal income tax deferred (excluding taxes resulting from divestiture of plant)		153,943			57,203
		Common equity component of allowance for funds used during construction		(214	)		(2,760	)
		Other non-cash charges		4,256			27,984
	CHANGES IN ASSETS AND LIABILITIES
		Accounts receivable - customer, less allowance for uncollectibles		(107,716	)		(120,211	)
		Materials and supplies, including fuel and gas in storage		(32,683	)		51,568
		Prepayments, other receivables and other current assets		(310,599	)		(208,541	)
		Enlightened Energy program costs		17,261			26,651
		Deferred recoverable energy costs		(103,334	)		(42,442	)
		Cost of removal less salvage		(83,386	)		(48,931	)
		Power contract termination costs		(1,050	)		(1,050	)
		Accounts payable		191,685			140,759
		Accrued income taxes		15,487			165,010
		Other-net		44,556			175,903

NET CASH FLOWS FROM OPERATING ACTIVITIES				713,288			1,191,349

INVESTING ACTIVITIES INCLUDING CONSTRUCTION
		Construction expenditures		(602,080	)		(435,527	)
		Nuclear fuel expenditures		(26,473	)		(4,394	)
		Contributions to nuclear decommissioning trust		(15,975	)		(15,975	)
		Common equity component of allowance for funds used during construction		214			2,760
		Divestiture of utility plant (net of federal income tax)		—			1,138,750

NET CASH FLOWS (USED IN) FROM INVESTING ACTIVITIES INCLUDING CONSTRUCTION				(644,314	)		685,614

FINANCING ACTIVITIES INCLUDING DIVIDENDS
		Repurchase of common stock		(29,454	)		(672,702	)
		Repayments of short-term debt		(330,402	)		—
		Issuance of long-term debt		625,000			567,700
		Retirement of long-term debt		(275,000	)		(225,000	)
		Advance refunding of long-term debt		—			(300,000	)
		Issuance and refunding costs		(4,894	)		(13,971	)
		Common stock dividends		(346,754	)		(1,211,930	)
		Preferred stock dividends		(10,194	)		(10,194	)

NET CASH FLOWS USED IN FINANCING ACTIVITIES INCLUDING DIVIDENDS				(371,698	)		(1,866,097	)

NET INCREASE (DECREASE) IN CASH AND TEMPORARY CASH INVESTMENTS				(302,724	)		10,866
CASH AND TEMPORARY CASH INVESTMENTS AT JANUARY 1				349,033			30,026

CASH AND TEMPORARY CASH INVESTMENTS AT SEPTEMBER 30			$	46,309		$	40,892

SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION
	Cash paid during the period for:
		Interest	$	226,346		$	247,017
		Income taxes		67,515			638,450

The accompanying notes are an integral part of these financial statements.

NOTES TO FINANCIAL STATEMENTS - CON EDISON OF NEW YORK

Note A - General

These footnotes accompany and form an integral part of the interim consolidated financial statements of Consolidated Edison Company of New York, Inc. (Con Edison of New York) and its subsidiaries. Consolidated Edison, Inc. (Con Edison) owns all of the outstanding common stock of Con Edison of New York. These financial statements are unaudited but, in the opinion of Con Edison of New York's management, reflect all adjustments (which include only normally recurring adjustments) necessary for a fair statement of the results for the interim periods presented. These financial statements should be read together with the audited Con Edison of New York financial statements (including the notes thereto) included in the combined Con Edison, Con Edison of New York and Orange and Rockland Utilities, Inc. Annual Report on Form 10-K for the year ended December 31, 1999 (the"Form 10-K").

Note B - Environmental Matters

Hazardous substances, such as asbestos, polychlorinated biphenyls (PCBs) and coal tar, have been used or generated in the course of operations of Con Edison of New York and may be present in its facilities and equipment.

At September 30, 2000, Con Edison of New York had accrued $87.4 million as its best estimate of its liability for sites as to which it has received process or notice alleging that hazardous substances generated by the company (and, in most instances, other potentially responsible parties) were deposited. There will be additional liability at these sites and other sites, the amount of which is not presently determinable but may be material to the company's financial position, results of operations or liquidity.

Under Con Edison of New York's current electric, gas and steam rate agreements, site investigation and remediation costs in excess of $5 million annually incurred with respect to hazardous waste for which it is responsible are to be deferred and subsequently reflected in rates. At September 30, 2000, $41.2 million of such costs had been deferred as a regulatory asset.

Suits have been brought in New York State and federal courts against Con Edison of New York and many other defendants, wherein a large number of plaintiffs sought large amounts of compensatory and punitive damages for deaths and injuries allegedly caused by exposure to asbestos at various premises of the company. Many of these suits have been disposed of without any payment by Con Edison of

New York, or for immaterial amounts. The amounts specified in all the remaining suits total billions of dollars but the company believes that these amounts are greatly exaggerated, as were the claims already disposed of. Based on the information and relevant circumstances known to the company at this time, it does not believe that these suits will have a material adverse effect on its financial position, results of operations or liquidity.

Note C - Nuclear Generation

On February 15, 2000, Con Edison of New York shut down Indian Point 2 following a leak in one of its four steam generators. The company expects to complete replacement of the steam generators by the end of 2000, and estimates that replacement will require capital expenditures of up to $150 million (exclusive of the costs of the replacement steam generators, which it has owned since 1988).

The staff of the Nuclear Regulatory Commission (NRC) has advised the company that it will monitor Indian Point 2 with heightened oversight.

The New York State Public Service Commission (PSC) is investigating the Indian Point 2 outage and its causes and the prudence of the company's actions regarding the operation and maintenance of Indian Point 2. The PSC has indicated that the examination should include, among other things, Con Edison of New York's inspection practices, the circumstances surrounding Indian Point 2's October 1997 to September 1998 outage, the basis for postponement of the steam generator replacement and whether, and to what extent, increased replacement power costs and repair and replacement costs should be borne by Con Edison's shareholders. The company is in settlement discussions with the staff of the PSC and other interested parties with respect to this proceeding.

In August 2000, following the passage of the Indian Point 2 Law (discussed below) and pursuant to a PSC order, the company revised its electric tariff to prevent prospective recovery of Indian Point 2 replacement power costs.

Con Edison of New York believes that the operation, maintenance and inspection practices related to Indian Point 2 have been prudent. However, the company is unable to predict whether or not any Indian Point 2-related proceedings, lawsuits, legislation or other actions, will have a material adverse effect on its financial position, results of operations or liquidity.

Note D - Financial Information By Business Segment (Thousands of Dollars)

For the three months ended September 30, 2000 and 1999
(Unaudited)

	Electric						Gas
	2000			1999			2000		1999

Operating revenues	$	2,156,383		$	1,900,467		$	159,439	$	141,697
Intersegment revenues		2,663			4,160			719		878
Depreciation and amortization		114,835			103,379			15,185		16,070
Operating income		368,097			403,102			3,164		3,919
	Steam						Total
	2000			1999			2000		1999

Operating revenues	$	82,837		$	66,808		$	2,398,659	$	2,108,972
Intersegment revenues		467			423			3,849		5,461
Depreciation and amortization		4,631			4,513			134,651		123,962
Operating income		(11,468	)		(7,539	)		359,793		399,482

For the nine months ended September 30, 2000 and 1999
(Unaudited)

	Electric				Gas
	2000		1999		2000		1999

Operating revenues	$	5,009,046	$	4,310,741	$	770,461	$	712,739
Intersegment revenues		7,990		9,555		2,155		2,108
Depreciation and amortization		340,448		328,064		44,860		47,772
Operating income		654,857		680,458		124,470		116,986
	Steam				Total
	2000		1999		2000		1999

Operating revenues	$	327,695	$	260,419	$	6,107,202	$	5,283,899
Intersegment revenues		1,401		1,250		11,546		12,913
Depreciation and amortization		13,841		13,438		399,149		389,274
Operating income		14,906		19,777		794,233		817,221

Note E - New Financial Accounting Standard

Orange and Rockland Utilities, Inc. and Subsidiaries

CONSOLIDATED BALANCE SHEET

			As at
As at September 30, 2000 and December 31, 1999 (Unaudited)			September 30, 2000		December 31, 1999

			(Thousands of Dollars)
ASSETS
UTILITY PLANT, AT ORIGINAL COST
	Electric		$	668,512	$	653,503
	Gas			274,030		263,645
	General			107,584		107,661

	TOTAL			1,050,126		1,024,809
	Less: Accumulated depreciation			367,372		348,060

	NET			682,754		676,749
	Construction work in progress			25,524		22,373

NET UTILITY PLANT				708,278		699,122

CURRENT ASSETS:
	Cash and cash equivalents			8,181		78,927
	Customer accounts receivable, less allowance for uncollectible accounts of $3,474 and $5,395			62,584		58,586
	Other accounts receivable, less allowance for uncollectible accounts of $1,345 and $1,401			13,298		12,707
	Account receivable from affiliated company			5,888		626
	Accrued utility revenue			30,511		24,181
	Gas in storage, at average cost			14,425		14,856
	Materials and supplies, at average cost			4,487		4,333
	Prepayments			26,593		20,761
	Other current assets			19,066		22,316

TOTAL CURRENT ASSETS				185,033		237,293

INVESTMENTS
	Non-Utility Property-net of accumulated depreciation and amortization			3,252		3,415
	Other			6		6

TOTAL INVESTMENTS				3,258		3,421

DEFERRED CHARGES AND REGULATORY ASSETS
	Regulatory Assets
		Deferred pension and other postretirement benefits		42,650		45,328
		Recoverable energy costs		38,223		18,400
		Deferred environmental remediation costs		33,743		3,330
		Future federal income tax		32,733		33,115
		Other regulatory assets		22,390		31,400
		Deferred revenue taxes		8,949		10,130

	TOTAL REGULATORY ASSETS			178,688		141,703
	Other deferred charges			12,427		7,237

TOTAL DEFERRED CHARGES AND REGULATORY ASSETS				191,115		148,940

TOTAL			$	1,087,684	$	1,088,776

The accompanying notes are an integral part of these financial statements.

Orange and Rockland Utilities, Inc. and Subsidiaries

CONSOLIDATED BALANCE SHEET

		As at
As at September 30, 2000 and December 31, 1999 (Unaudited)		September 30, 2000		December 31, 1999

		(Thousands of Dollars)
CAPITALIZATION AND LIABILITIES
CAPITALIZATION:
	Common stock	$	5	$	5
	Additional paid in capital		194,499		194,499
	Capital stock expense		—		(25	)
	Retained earnings		142,156		137,535

	TOTAL COMMON SHAREHOLDER'S EQUITY		336,660		332,014
	Long-term debt		335,628		281,524

TOTAL CAPITALIZATION			672,288		613,538

NON-CURRENT LIABILITIES:
	Pension and benefit reserve		71,198		66,950
	Other noncurrent liabilities		34,068		34,538

TOTAL NON-CURRENT LIABILITIES			105,266		101,488

CURRENT LIABILITIES:
	Long-term debt due within one year		—		120,000
	Notes payable		5,900		—
	Accounts payable		57,805		49,626
	Accounts payable to affiliated companies		—		5,105
	Accrued federal income and other taxes		10,600		—
	Customer deposits		6,395		7,217
	Accrued interest		7,078		8,521
	Dividend payable to parent		9,250		—
	Accrued environmental costs		32,557		2,300
	Other current liabilities		22,944		20,019

TOTAL CURRENT LIABILITIES			152,529		212,788

DEFERRED CREDITS AND REGULATORY LIABILITIES
	Deferred federal income taxes		112,289		119,509
	Deferred investment tax credits		7,010		7,351
	Regulatory liabilities and other deferred credits		38,302		34,102

TOTAL DEFERRED CREDITS AND REGULATORY LIABILITIES			157,601		160,962

TOTAL		$	1,087,684	$	1,088,776

The accompanying notes are an integral part of these financial statements.

Orange And Rockland Utilities, Inc.

CONSOLIDATED INCOME STATEMENT

For the three months ended September 30, 2000 and 1999 (Unaudited)			2000			1999

			(Thousands of Dollars)
OPERATING REVENUES
		Electric	$	173,794		$	157,503
		Gas		18,452			12,731
		Non-utility		4,390			44

TOTAL OPERATING REVENUES				196,636			170,278

OPERATING EXPENSES
		Purchased power		97,827			63,235
		Gas purchased for resale		11,148			5,759
		Other operations		27,785			34,999
		Maintenance		7,426			7,833
		Depreciation and amortization		7,406			6,739
		Taxes, other than federal income tax		16,943			17,582
		Federal income tax		6,234			9,052

TOTAL OPERATING EXPENSES				174,769			145,199

OPERATING INCOME				21,867			25,079
OTHER INCOME (DEDUCTIONS)
		Investment income		817			1,857
		Allowance for equity funds used during construction		102			8
		Other income and deductions		326			(235	)
		Federal income tax		(442	)		(484	)

TOTAL OTHER INCOME (DEDUCTIONS)				803			1,146

INCOME BEFORE INTEREST CHARGES				22,670			26,225
INTEREST CHARGES
		Interest on long-term debt		5,616			7,030
		Other interest		887			348
		Allowance for borrowed funds used during construction		(154	)		(60	)

TOTAL INTEREST CHARGES				6,349			7,318

NET INCOME			$	16,321		$	18,907

ORANGE AND ROCKLAND SALES & DELIVERIES
	Electric - Thousands of killowatthours (Mwhr's)
		O&R Customers		1,442,651			1,473,895
		Off-system sales		—			928

		Total Electric Sales & Deliveries		1,442,651			1,474,823
	Gas - Dekatherms (Dth)			3,517,813			3,098,289

The accompanying notes are an integral part of these financial statements.

Orange and Rockland Utilities, Inc.

CONSOLIDATED INCOME STATEMENT

For nine months ended September 30, 2000 and 1999 (Unaudited)			2000			1999

			(Thousands of Dollars)
OPERATING REVENUES
		Electric	$	391,046		$	359,214
		Gas		126,919			113,284
		Non-utility		4,506			661

TOTAL OPERATING REVENUES				522,471			473,159

OPERATING EXPENSES
		Purchased power		206,998			86,383
		Fuel		39			43,504
		Gas purchased for resale		78,074			62,803
		Other operations		85,524			138,731
		Maintenance		20,158			26,443
		Depreciation and amortization		21,982			25,960
		Taxes, other than federal income tax		47,935			63,838
		Federal income tax		14,035			3,631

TOTAL OPERATING EXPENSES				474,745			451,293

OPERATING INCOME				47,726			21,866
OTHER INCOME (DEDUCTIONS)
		Investment income		5,202			2,089
		Allowance for equity funds used during construction		237			23
		Other income and deductions		83			52,930
		Federal income tax		(1,813	)		(40,965	)

TOTAL OTHER INCOME (DEDUCTIONS)				3,709			14,077

INCOME BEFORE INTEREST CHARGES				51,435			35,943
INTEREST CHARGES
		Interest on long-term debt		17,286			20,431
		Other interest		2,140			4,292
		Allowance for borrowed funds used during construction		(356	)		(177	)

TOTAL INTEREST CHARGES				19,070			24,546

NET INCOME				32,365			11,397
PREFERRED AND PREFERENCE STOCK REQUIREMENTS				—			886

NET INCOME FOR COMMON STOCK			$	32,365		$	10,511

ORANGE AND ROCKLAND SALES & DELIVERIES
	Electric - Thousands of killowatthours (Mwhr's)
		O&R Customers		3,846,181			3,727,678
		Off-system sales		2,400			109,158

		Total Electric Sales & Deliveries		3,848,581			3,836,836
	Gas - Dekatherms (Dth)			20,748,167			19,879,334

The accompanying notes are an integral part of these financial statements.

Orange and Rockland Utilities, Inc.

CONSOLIDATED STATEMENT OF CASH FLOWS

For the nine months ended September 30, 2000 and 1999 (Unaudited)			2000			1999

			(Thousands of Dollars)
OPERATING ACTIVITIES
	NET INCOME		$	32,365		$	11,397
	PRINCIPAL NON-CASH CHARGES (CREDITS) TO INCOME
		Depreciation and amortization		21,982			25,960
		Amortization of investment tax credit		(341	)		(6,194	)
		Federal income tax deferred		(6,839	)		(45,777	)
		Common equity component of allowance for funds used during construction		(237	)		(23	)
		Other non-cash charges (debits)		1,676			2,543
	CHANGES IN ASSETS AND LIABILITIES
		Accounts receivable - net, and accrued utility revenue		(10,328	)		(3,169	)
		Materials and supplies, including fuel and gas in storage		277			15,681
		Prepayments, other receivables and other current assets		(8,442	)		7,855
		Deferred recoverable energy costs		(11,854	)		1,730
		Accounts payable		3,075			6,989
		Refunds to customers		(1,049	)		25,597
		Deferred environmental remediation costs		(30,413	)		(414	)
		Accrued environmental costs		29,981			(1,200	)
		Other - net		17,894			33,633

NET CASH FLOWS FROM OPERATING ACTIVITIES				37,747			74,608

INVESTING ACTIVITIES INCLUDING CONSTRUCTION
		Construction expenditures		(31,100	)		(30,480	)
		Net proceeds from the sale of the electric generating assets		—			243,888
		Common equity component of allowance for funds used during construction		237			23

NET CASH FLOWS (USED IN) FROM INVESTING ACTIVITIES INCLUDING CONSTRUCTION				(30,863	)		213,431

FINANCING ACTIVITIES
		Issuance of long-term debt		55,000			45,000
		Retirement of long-term debt		(120,030	)		(2,354	)
		Retirement of preference and preferred stock		—			(43,516	)
		Short-term debt arrangements		5,900			(148,386	)
		Dividend to parent		(18,500	)		(45,000	)
		Common stock dividends		—			(17,447	)
		Preferred stock dividends		—			(886	)

NET CASH FLOWS USED IN FINANCING ACTIVITIES INCLUDING DIVIDENDS				(77,630	)		(212,589	)

NET (DECREASE) INCREASE IN CASH AND TEMPORARY CASH INVESTMENTS				(70,746	)		75,450
CASH AND TEMPORARY CASH INVESTMENTS AT JANUARY 1				78,927			6,143

CASH AND TEMPORARY CASH INVESTMENTS AT SEPTEMBER 30			$	8,181		$	81,593

	Cash paid during the period for:
		Interest	$	20,878		$	24,137
		Income Taxes		27,819			93,000

The accompanying notes are an integral part of these financial statements.

NOTES TO FINANCIAL STATEMENTS - O&R

Note A - General

These footnotes accompany and form an integral part of the interim consolidated financial statements of Orange and Rockland Utilities, Inc. (O&R), a wholly-owned subsidiary of Cosolidated Edison, Inc. (Con Edison). These financial statements are unaudited but, in the opinion of O&R's management, reflect all adjustments (which include only normally recurring adjustments) necessary for a fair statement of the results for the interim periods presented. These financial statements should be read together with the audited O&R financial statements (including the notes thereto) included in the combined Con Edison, Consolidated Edison Company of New York, Inc. and O&R Annual Report on Form 10-K for the year ended December 31, 1999 (the Form 10-K).

Note B - Environmental And Other Litigation

Environmental Matters

Hazardous substances, such as asbestos, polychlorinated biphenyls (PCBs) and coal tar, have been used or generated in the course of operations of O&R and may be present in its facilities and equipment.

The Federal Comprehensive Environmental Response, Compensation and Liability Act of 1980 (Superfund) and similar state statutes impose joint and several liability, regardless of fault, upon generators of hazardous substances for resulting removal and remedial costs and environmental damages. Liabilities under these laws can be material and in some instances may be imposed without regard to fault, or may imposed for past acts, even though such past acts may have been lawful at the time they occurred.

At September 30, 2000, O&R had accrued $32.6 million as its best estimate of its liability for sites as to which it has received process or notice alleging that hazardous substances generated by the company (and, in most instances, other potentially responsible parties) were deposited. There will be additional liability at these sites and other sites, including the costs of investigating and remediating sites where the company or its predecessors manufactured gas. The total amount of liability is not presently determinable but may be material to the company's financial position, results of operations or liquidity.

Under O&R's current gas rate agreement, O&R may defer for subsequent recovery through rates the costs of investigating and remediating manufactured gas sites. At September 30, 2000, $33.7 million of such costs had been deferred as a regulatory asset.

Suits have been brought in New York State and federal courts against O&R and many other defendants, wherein a large number of plaintiffs sought large amounts of compensatory and punitive damages for deaths and injuries allegedly caused by exposure to asbestos at various premises of the company. Many of these suits have been disposed of without any payment by O&R, or for immaterial amounts. The

amounts specified in all the remaining suits total billions of dollars but the company believes that these amounts are greatly exaggerated, as were the claims already disposed of. Based on the information and relevant circumstances known to the company at this time, it does not believe that these suits will have a material adverse effect on its financial position, results of operations or liquidity.

In May 2000, the New York State Department of Environmental Conservation (DEC) issued notices of violation to O&R and four other companies that have operated coal-fired electric generating facilities in New York State. The notices allege violations of the federal Clean Air Act and the New York State Environmental Conservation Law resulting from the alleged failure of the companies to obtain DEC permits for physical modifications to their generating facilities and to install air pollution control equipment that would have reduced harmful emissions. The notice of violation received by O&R relates to the Lovett Generating Station that it sold in June 1999. O&R is unable to predict whether or not the alleged violations will have a material adverse effect on its financial position, results of operation or liquidity.

Other Litigation

In 1996, O&R was sued for its alleged breach of an agreement to purchase electric capacity and associated energy from a 4 MW cogeneration facility and for an alleged breach of an implied covenant of good faith. In August 2000, the court denied the plaintiff's motion for summary judgment. O&R cannot predict the ultimate outcome of this proceeding.

Note C - Financial Information By Business Segment (Thousands of Dollars)

For The Three Months Ended September 30, 2000 and 1999
(Unaudited)

	Electric		Gas
	2000	1999	2000		1999

Sales Revenues	173,794	157,503	18,452		12,731
Intersegment Revenues	3	—	—		—
Depreciation and amortization	5,108	4,982	2,297		1,756
Operating Income	22,314	30,885	(2,639	)	(5,882	)
	Other		Total
	2000	1999	2000		1999

Sales Revenues	4,390	44	196,636		170,278
Intersegment Revenues	—	—	3		0
Depreciation and amortization	1	1	7,406		6,739
Operating Income	2,192	76	21,867		25,079

For The Nine Months Ended September 30, 2000 and 1999
(Unaudited)

	Electric			Gas
	2000	1999		2000	1999

Sales Revenues	391,046	359,214		126,919	113,284
Intersegment Revenues	9	7		—	37
Depreciation and amortization	15,216	20,889		6,764	5,068
Operating Income	40,182	19,733		5,739	3,676
	Other			Total
	2000	1999		2000	1999

Sales Revenues	4,506	661		522,471	473,159
Intersegment Revenues	—	—		9	44
Depreciation and amortization	2	3		21,982	25,960
Operating Income	1,805	(1,543	)	47,726	21,866

Note D - Related Party Transactions

Each month O&R is invoiced by Con Edison and its affiliates for the cost of any services rendered to O&R by Con Edison and its affiliates. These services, provided primarily by Con Edison of New York, include substantially all administrative support operations such as corporate directorship and associated ministerial duties, accounting, treasury, investor relations, information resources, legal, human resources, fuel supply and energy management services. The cost of these services totaled $8.0 million during the first nine months of 2000. In addition, O&R purchased $47.2 million of gas from Con Edison of New York during this period.

O&R provides certain recurring services to Con Edison of New York on a monthly basis, including cash receipts processing, rubber goods testing, and certain administrative services. The cost of these services totaled $5.9 million during the first nine months of 2000. In addition, O&R sold $4.9 million of gas to Con Edison of New York during this period.

Note E - Restatement Of Retained Earnings

In July 1999, O&R's retained earnings as of the effective date of its acquisition by Con Edison was reclassified to additional paid in capital. See "Acquisition By Con Edison" immediately preceding Note A to the O&R financial statements included in the Form 10-K. O&R has reversed this reclassification. The amounts shown as additional paid in capital and retained earnings on O&R's December 31, 1999 balance sheet have been changed to reflect this restatement. This restatement did not change the total common shareholder's equity for any of the periods presented.

Note F - New Financial Accounting Standard

Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations

CON EDISON

Consolidated Edison, Inc. (Con Edison) is a holding company which operates only through its subsidiaries and has no material assets other than the stock of its subsidiaries. Con Edison's principal subsidiaries are regulated utilities: Consolidated Edison Company of New York, Inc. (Con Edison of New York) and Orange and Rockland Utilities, Inc. (O&R). Con Edison also has several unregulated subsidiaries. In October 1999 Con Edison agreed to acquire Northeast Utilities.

The following discussion and analysis, which relates to the interim consolidated financial statements of Con Edison and its subsidiaries (including Con Edison of New York and, from its date of acquisition in July 1999, O&R) included in Part I, Item 1 of this report, should be read in conjunction with Con Edison's Management's Discussion and Analysis of Financial Condition and Results of Operations (Con Edison's 10-K MD&A) in Item 7 of the combined Con Edison, Con Edison of New York and O&R Annual Report on Form 10-K for the year ended December 31, 1999 (File Nos. 1-14514, 1-1217 and 1-4315, the Form 10-K) and Con Edison's Management's Discussion and Analysis of Financial Condition and Results of Operations (Con Edison's earlier 2000 10-Q MD&As) in Part I, Item 2 of the combined Con Edison, Con Edison of New York and O&R Quarterly Reports on Form 10-Q for the quarterly periods ended March 31, 2000 and June 30, 2000 (the earlier 2000 Form 10-Qs). Reference is also made to the notes to the Con Edison financial statements in Part I, Item 1 of this report, which notes are incorporated herein by reference.

Liquidity and Capital Resources

Cash and temporary cash investments and outstanding commercial paper (shown as notes payable on the balance sheet) at September 30, 2000 and December 31, 1999 were (amounts shown in millions):

	September 30, 2000		December 31, 1999

Cash and temporary cash investments	$	72.8	$	485.1
Commercial paper	$	243.0	$	495.4

Cash and temporary cash investments, net of commercial paper, decreased at September 30, 2000, compared to December 31, 1999, reflecting reduced cash flows from operations, increased construction expenditures by Con Edison of New York, investment in nonregulated electric generating facilities, repayments and issuances of long-term debt and repurchases of common stock.

Net cash flows from operating activities during the first nine months of 2000 decreased $271.1 million, compared to the first nine months of 1999, reflecting principally lower net income, pension credits (see discussion of prepayments, below) and increased purchased power costs (see discussion of accounts receivable and recoverable energy costs, below).

Construction expenditures during the first nine months of 2000 increased $197.7 million compared to the first nine months of 1999, principally as a result of expenditures related to meeting load growth on Con Edison of New York's electric distribution system and replacement of the steam generators at its Indian Point 2 nuclear generating unit. See "Nuclear Generation," below.

In June 2000 an unregulated subsidiary of Con Edison purchased an 80 percent interest in a partnership that owns a 236-MW electric generating unit in Lakewood, New Jersey (the Lakewood Project) for $96.3 million. The Lakewood Project had $178.7 million of long-term debt outstanding at September 30, 2000, which has been included in Con Edison's interim consolidated financial statements.

During the first nine months of 2000, Con Edison of New York repaid at maturity $275 million of debentures, with a weighted average annual interest rate of approximately 7.48 percent, and issued $625 million of ten-year debentures, with a weighted average annual interest rate of approximately 7.83 percent. During this period O&R repaid at maturity $120 million of debentures, with a weighted average annual interest rate of 8.27 percent, and issued $55 million of ten-year 7.5 percent debentures. See "Liquidity and Capital Resources - Capital Resources" in Con Edison's 10-K MD&A.

During the first quarter of 2000, Con Edison purchased approximately 1.9 million shares of its common stock at an aggregate cost of $60.6 million. No shares were repurchased in the second or third quarters of 2000. See "Liquidity and Capital Resources - Stock Repurchases" in Con Edison's 10-K MD&A.

Con Edison's accounts receivable - customer, less allowance for uncollectible accounts increased $152.5 million at September 30, 2000, compared with year-end 1999, due primarily to increased customer billings by Con Edison of New York and O&R, reflecting higher wholesale power costs. Con Edison of New York's equivalent number of days of revenue outstanding (ENDRO) of customer accounts receivable was 26.4 days at September 30, 2000, compared with 28.8 days at December 31, 1999. For O&R, the ENDRO was 33.7 days at September 30, 2000 and 36.5 days at December 31, 1999.

Prepayments at September 30, 2000 include cumulative credits to pension expense for Con Edison of New York of $293.0 million, compared with $116.0 million at December 31, 1999. See Note D to the Con Edison financial statements included in Item 8 of the Form 10-K. Prepayments at September 30, 2000 also include prepaid property tax for Con Edison of New York of $129.6 million, compared with $10.7 million at December 31, 1999. Property taxes are generally prepaid on January 1 and July 1 of each year.

Recoverable energy costs increased $123.4 million at September 30, 2000, compared with year-end 1999, reflecting increased purchased power costs, discussed below in "Results of Operations," offset in part by the ongoing recovery of previously deferred amounts. Purchased power costs of Con Edison of New York and O&R are recovered, on average, 40 days after such costs are incurred. See "Recoverable

Fuel Costs" in Note A to the Con Edison financial statements included in Item 8 of the Form 10-K. Also see "Regulatory Matters - Electric," below, and Note C to the Con Edison financial statements included in Part I, Item 1 of this report (which Note C is incorporated herein by reference).

Deferred charges for divestiture - capacity replacement reconciliation increased $49.5 million at September 30, 2000, compared with year-end 1999, reflecting the deferral of incremental electric capacity costs under contracts with the buyers of the generating assets sold by Con Edison of New York incurred prior to the initiation in May 2000 of a capacity market under the New York Independent System Operator. See Note I to the Con Edison financial statements included in Item 8 of the Form 10-K and "Regulatory Matters - Electric," below.

Deferred environmental remediation costs increased $61.7 million at September 30, 2000, compared with year-end 1999, reflecting site investigation and remediation costs of Con Edison's utility subsidiaries deferred under current rate agreements. See Note B to the Con Edison financial statements included in Part I, Item 1 of this report (which Note B is incorporated herein by reference).

Other regulatory assets increased $20.9 million at September 30, 2000, compared with year-end 1999, reflecting primarily the deferral of $14.4 million of Indian Point 2 refueling and maintenance outage expenses discussed below in "Results of Operations."

Unfunded other post-employment benefit (OPEB) obligations (shown as pension and benefit reserve on the balance sheet) were $187.1 million at September 30, 2000, compared to $143.8 million at December 31, 1999. Con Edison of New York's policy is to fund its estimated OPEB costs to the extent deductible under current tax limitations. O&R's policy is to fund its obligations to the extent of its cost recovery in rates. O&R's obligations also include a reserve for its supplemental executive retirement program. See Note E to the Con Edison financial statements included in Item 8 of the Form 10-K.

The accumulated provision for injuries and damages was $131.5 million at September 30, 2000, compared to $119.0 million at December 31, 1999. The increase resulted primarily from increased workers' compensation claims.

Accounts payable increased $216.3 million compared with year-end 1999, due primarily to the higher costs of power purchases.

Accrued taxes increased $103.6 million compared to year-end 1999, due principally to timing differences.

Other regulatory liabilities increased $23.7 million compared with year-end 1999, reflecting primarily the deferral under Con Edison of New York's current gas rate agreement of $14.5 million of earnings above a 13 percent threshold that are to be shared with customers (see "Regulatory Matters - Gas" in Con Edison's 10-K MD&A) and $8.0 million of interest on the gain on divestiture (see "Regulatory Matters - Electric," below), offset by the recognition of $22.3 million of previously deferred revenues relating to a scheduled Indian Point 2 refueling and maintenance outage.

Capital Resources

Con Edison's ratio of earnings to fixed charges (for the 12 months ended on the date indicated) and common equity ratio (as of the date indicated) were:

	September 30, 2000	December 31, 1999

Earnings to fixed charges (SEC basis)	3.35	4.04
Common equity ratio*	50.3	53.1

* Common shareholders' equity as a percentage of total capitalization

Con Edison's ratio of earnings to fixed charges decreased for the 12-month period ending September 30, 2000 compared to the 12-month period ending December 31, 1999 as a result of decreased net income available for common stock before Federal income tax and increased interest expense.

Northeast Utilities

In October 1999 Con Edison agreed to acquire Northeast Utilities for an estimated aggregate purchase price of not more than $3.8 billion, payable 50 percent in cash and 50 percent in common stock (subject to election and proration procedures). The merger is subject to certain conditions, including the approval of shareholders and federal and state regulatory agencies.

In April 2000 Con Edison and Northeast Utilities shareholders approved the merger.

In June 2000 the Federal Energy Regulatory Commission approved the merger.

In June 2000 Con Edison and Northeast Utilities entered into a settlement agreement with the staff of the New Hampshire Public Utilities Commission (NHPUC) under which the NHPUC is asked to approve the merger, subject to the conditions set forth in the agreement.

In October 2000 Con Edison, Con Edison of New York, O&R and Northeast Utilities entered into an agreement with the staff of the New York State Public Service Commission (PSC) and certain other parties, which, among other things, provides for the PSC's approval of the merger. For additional information about the agreement, which is subject to PSC approval, see "Regulatory Matters—Electric," below.

In October 2000 the Connecticut Department of Public Utility Control (DPUC) issued a decision conditionally approving the merger. In November 2000 Con Edison and Northeast Utilities petitioned

the DPUC to reconsider its decision. The petition indicates that the companies accept many of the conditions set forth in the decision, but that "substantial uncertainty remains as to whether the merger will proceed based on the conditions currently imposed by the Decision."

The merger also requires approval by the Securities and Exchange Commission. In addition, applicable waiting periods under the Hart-Scott-Rodino Antitrust Improvements Act and the related rules and regulations must be satisfied. Con Edison is in the process of responding to related requests for additional information from the Department of Justice.

In September 2000 the required Connecticut regulatory recommendation with respect to the sale by subsidiaries of Northeast Utilities of interests in certain nuclear facilities was received and, as a result, the consideration that Con Edison would be required to pay to shareholders of Northeast Utilities under the merger agreement was increased by $1.00 per share to $26.00 per share plus $.0034 per share for every day after August 5, 2000 through the day prior to the closing of the merger.

Con Edison does not expect that the merger will be completed prior to the end of 2000.

For additional information about the merger, see "Liquidity and Capital Resources - Northeast Utilities Merger" in Con Edison's 10-K MD&A. See also "Financial Market Risks," below.

Regulatory Matters

Electric

In October 2000 Con Edison, Con Edison of New York, O&R and Northeast Utilities entered into an agreement with the staff of the PSC and certain other parties (the Agreement). The Agreement, which is subject to PSC approval, revises and extends the electric rate plan provisions of the 1997 restructuring agreement pursuant to which Con Edison of New York has been implementing retail choice for all its electric customers and has divested most of its electric generating assets (the 1997 Restructuring Agreement) and addresses certain divestiture-related issues. The Agreement also provides for the approval by the PSC of Con Edison's acquisition of Northeast Utilities. See "Northeast Utilities," above.

The electric rate plan provisions of the Agreement, which cover the five-year period ending March 2005, revise and extend the rate plan provisions of the 1997 Restructuring Agreement. The Agreement provides for Con Edison of New York to reduce the distribution component of its electric rates by $170 million on an annual basis, effective October 2000, and, in accordance with the 1997 Restructuring Agreement, to reduce the generation-related component of its electric rates by $208.7 million on an annual basis, effective April 2001. Following completion of Con Edison's acquisition of Northeast Utilities, Con Edison of New York's electric rates would be further reduced by $18.5 million on an annual basis to reflect approximately half of the net synergy savings applicable to its electric operations that are expected to result from the merger.

In general, under the Agreement, Con Edison of New York's base electric transmission and distribution rates will not otherwise be changed during the five-year period ending March 2005 except (i) with respect to certain changes in costs above anticipated annual levels resulting from legal or regulatory requirements, inflation in excess of a 4 percent annual rate, property tax changes and environmental cost increases or (ii) if the PSC determines that circumstances have occurred that either threaten the company's economic viability or ability to provide, or render the company's rate of return unreasonable for the provision of, safe and adequate service.

The Agreement continues the rate provisions pursuant to which Con Edison of New York recovers purchased power and fuel costs from its customers. The Agreement does not address the New York State Attorney General's petitions that are discussed below. The Agreement includes the recommendation that the PSC establish a proceeding to consider rate measures that reduce the volatility of fuel and energy costs experienced during the months of peak usage, provided that such measures may neither be materially inconsistent with the Agreement nor adversely impact Con Edison of New York's financial integrity. For information about recovery of replacement power and other costs relating to Con Edison of New York's Indian Point 2 nuclear generating unit, see Note C to the Con Edison financial statements included in Part I, Item 1 of this report.

Under the Agreement, 50 percent of any earnings in each of the rate years ending March 2002 through 2005 in excess of a specified rate of return on electric common equity (12.9 percent for the rate year ending March 2002; 11.75 percent for the other rate years, the Earnings Sharing Level) will be retained for shareholders and 50 percent will be applied for customer benefit through rate reductions or as otherwise determined by the PSC. The rate of return calculation will exclude certain items, including incentives and penalties discussed in the Agreement and the synergy savings from Con Edison's acquisition of Northeast Utilities that have been allocated to the company's shareholders. For the rate year ending March 2004, the calculation will reflect the amount, if any, by which the calculated rate of return fell below the Earnings Sharing Level for the rate year ending March 2003; for the rate year ending March 2005, the calculation will reflect any shortfall in the prior two rate years. There is no sharing of earnings for the rate year ending March 2001.

Under the Agreement's performance incentive mechanisms, the Earnings Sharing Level for the rate years ending March 2003 through 2005 may be increased to 12 percent if certain customer service and reliability objectives are achieved. The Agreement includes other incentive mechanisms, pursuant to which Con Edison of New York could be required to pay up to $40 million annually in penalties if certain threshold service and reliability objectives are not achieved.

The Agreement continues the stranded cost recovery provisions of the 1997 Restructuring Agreement, stating that Con Edison of New York "will be given a reasonable opportunity to recover stranded and strandable costs remaining at March 31, 2005, including a reasonable return on investments, under the parameters and during the time periods set forth therein."

The Agreement provides for the following disposition of the approximately $303.9 million estimated net gain on the sale by Con Edison of New York of most of its electric generating assets: $192.3 million will be credited against electric distribution plant balances; $103.8 million may be retained by the company to offset a like amount of existing regulatory assets (including deferred power contract termination costs, property tax increases and retail choice customer incentives), and the balance will be set aside as a partial funding source for low-income ratepayer programs.

The Agreement also addresses Con Edison of New York's recovery of an approximately $74 million regulatory asset representing incremental electric capacity costs incurred prior to May 2000 to purchase capacity from the buyers of the generating assets it sold. The Agreement provides for the company to recover these deferred costs from the shareholders' portion of any earnings above the Earnings Sharing Levels and by March 2005 to charge to expense any remaining asset balance. For additional information about these incremental capacity costs, see "Regulatory Matters" in Con Edison's earlier 2000 10-Q MD&As and Note I to the Con Edison financial statements in Item 8 of the Form 10-K.

The Agreement provides for the approval of Con Edison's acquisition of Northeast Utilities, indicates that the PSC should authorize the merger as being in the public interest and allocates to New York customers approximately half of the net synergy savings applicable to New York utility operations that are expected to result from the merger over the ten-year period ending March 2011. To reflect this allocation, following the completion of the merger, Con Edison of New York will reduce its electric rates by $18.5 million (discussed above) and annually accrue credits of about $3.4 million and $0.9 million, respectively, for its gas and steam customers, and O&R will annually accrue credits of about $1.15 million and $0.4 million, respectively, for its electric and gas customers. The Agreement also amends the existing guidelines governing transactions among affiliates of Con Edison of New York to reflect, to the extent necessary, the requirements of the Public Utility Holding Company Act that will apply following the merger.

For additional information about the 1997 Restructuring Agreement, see "Regulatory Matters - Electric" in Con Edison's 10-K MD&A and "Regulatory Matters" in Con Edison's earlier 2000 10-Q MD&As.

PSC inquiry into the cause of increases in electric bills, to make electric rates temporary until the conclusion of the PSC's inquiry, and to roll those rates back to levels such that customers would pay no more for the same amount of electric service than they would have in 1999. In October 2000, AARP and the Public Utility Law Project of New York, Inc. filed a similar petition with the PSC. Con Edison believes that these petitions are without merit, but is unable to predict whether or not any related proceedings or other actions will have a material adverse effect on its financial position, results of operations or liquidity.

Gas

In November 2000 Con Edison of New York, the PSC staff and certain other parties agreed to revise and extend the 1996 gas rate settlement agreement through September 2001. For information about the 1996 agreement, see "Regulatory Matters - Gas" in Con Edison's 10-K MD&A.

Under the new agreement, which is subject to PSC approval, the level above which the company will share with customers 50 percent of earnings is increased from 13 percent to a 14 percent rate of return on gas common equity. In addition, customer bills are to be reduced by $20 million during the January through March 2001 period; approximately $22.6 million that normally would be credited to customers over various annual periods is to be credited during the four-month period ending March 2001; and $19 million of charges to customers resulting from the reconciliation of actual gas costs to amounts included in rates which were scheduled to be billed to customers beginning January 2001 instead are to be billed to customers beginning April 2001. These provisions are intended to reduce gas costs during the winter months.

Under the new agreement, the company will also reduce firm transportation customer bills by a retail choice credit and will implement other programs designed to increase customer and marketer participation in the company's gas Retail Choice program, the net costs of which are to be recovered by reducing credits otherwise due customers or deferred for future recovery from customers.

Steam

In November 2000 the PSC approved a settlement agreement between Con Edison of New York, the PSC staff and certain other parties with respect to the steam rate plan filed by the company in November 1999.

East River steam-electric generating plant is not completed). A rate moderation mechanism will permit the company to defer a portion of the revenues collected in the first two rate years attributable to the rate increase and recognize such deferrals in income during the last two rate years.

Under the agreement, upon completion of the East River repowering project, the net benefits of the project (including any net gain from the sale of certain mid-town Manhattan real estate) allocable to steam operations will be used to offset any deficiency in the accumulated reserve for depreciation of steam plant or otherwise inure to the benefit of steam customers.

The settlement agreement continues the rate provisions pursuant to which the company recovers from its customers purchased steam and fuel costs and requires the company to develop a strategy for hedging price variations for a portion of the steam produced each year.

For additional information, see "Regulatory Matters - Steam" in Con Edison's 10-K MD&A.

Nuclear Generation

Con Edison of New York's Indian Point 2 nuclear generating unit was shut down on February 15, 2000 following a leak in one of its four steam generators. See "Nuclear Generation" in Con Edison's 10-K MD&A and Con Edison's earlier 2000 Form 10-Q MD&As, the combined Con Edison and Con Edison of New York Current Reports on Form 8-K, dated March 30, 2000 and October 10, 2000 and Note C to the Con Edison financial statements included in Part I, Item 1 of this report (which Note C is incorporated herein by reference).

Financial Market Risks

Reference is made to "Financial Market Risks" in Con Edison's 10-K MD&A. At September 30, 2000 the cash-settled options expiring December 2000 that Con Edison purchased for $8.9 million in June 2000 to hedge its interest rate risk with respect to $800 million of the cash portion of the Northeast Utilities merger consideration had a fair market value of approximately $309,000. See "Northeast Utilities," above. At September 30, 2000 neither the fair value of derivatives outstanding nor potential derivative losses from reasonably possible near-term changes in market prices were material to the financial position, results of operations or liquidity of the company.

Environmental Matters

For information concerning potential liabilities of the company arising from laws and regulations protecting the environment, including the Federal Comprehensive Environmental Response, Compensation and Liability Act of 1980 (Superfund), see the notes to Con Edison's financial statements included in Part I, Item 1 of this report and also see Part II, Item 3 of this report.

Results of Operations

Third Quarter of 2000 Compared with Third Quarter of 1999

Con Edison's net income for common stock for the third quarter of 2000 was $279.9 million or $1.32 a share (based upon an average of 212.0 million common shares outstanding), compared with $336.0 million or $1.50 a share (based upon an average of 220.3 million common shares outstanding) for the third quarter of 1999.

Earnings for the quarters ended September 30, 2000 and 1999 were as follows:

(Millions of dollars)

		2000			1999

Con Edison of New York		$	266.3		$	319.5
O&R			16.3			18.9
Nonregulated subsidiaries			2.7			(1.1	)
Other*			(5.4	)		(1.3	)
	Con Edison	$	279.9		$	336.0

* Includes holding company expenses (including amortization of $2.7 million and $1.3 million for 2000 and 1999, respectively, of goodwill from the acquisition of O&R) and intercompany eliminations.

Con Edison's earnings for the third quarter of 2000, compared to the third quarter of 1999, decreased $56.1 million, reflecting $28 million of Indian Point 2 replacement power costs that have not been recovered by Con Edison of New York from its customers (see "Nuclear Generation," above), $31.1 million of electric rate reductions and the effects of cooler than normal summer weather as compared to the warmer than normal weather experienced in the 1999 period, offset in part by $57.7 million of increased pension credits (see Note D to the Con Edison financial statements included in Item 8 of the Form 10-K) and a $59.8 million reduction in Federal income taxes.

A comparison of the results of operations of Con Edison for the third quarter of 2000 compared to the third quarter of 1999 follows.

Three Months Ended Sept. 30, 2000 Compared With Three Months Ended Sept. 30, 1999

(Millions of dollars)

	Increases (Decreases) Amount			Increases (Decreases) Percent

Operating revenues	$	474.5		20.2
Purchased power - electric and steam		561.1		86.7
Fuel - electric and steam		(4.9	)	(4.4	)
Gas purchased for resale		50.7		62.5
Operating revenues less purchased power, fuel and gas purchased for resale (net revenues)		(132.4	)	(8.8	)
Other operations and maintenance		(62.7	)	(14.2	)
Depreciation and amortization		16.3		12.1
Taxes, other than federal income tax		12.2		3.8
Federal income tax		(59.8	)	(31.4	)
Operating income		(38.4	)	(9.1	)
Other income less deductions and related federal income tax		1.2		22.8
Net interest charges		18.9		21.2
Preferred stock dividend requirements		—		—
Net income for common stock	$	(56.1	)	(16.7	)%

A discussion of Con Edison's operating revenues and operating income by business segment follows. Con Edison's principal business segments are its electric, gas and steam utility businesses. For additional information about Con Edison's business segments, see the notes to the Con Edison financial statements included in Part I, Item 1 of this report.

Electric

Con Edison's electric operating revenues in the third quarter of 2000 increased $322.7 million, compared to the third quarter of 1999, reflecting Con Edison of New York's and O&R's increased purchased power costs, offset by electric rate reductions of approximately $31.1 million and the effects of cooler than normal summer weather as compared to the warmer than normal weather experienced in the 1999 period. Under PSC-approved rate provisions, Con Edison of New York and O&R recover their purchased power costs from customers. See, however, Note C to the Con Edison financial statements included in Part I, Item 1 of this report (which Note C is incorporated herein by reference).

Electricity sales volumes for Con Edison of New York and O&R for the three-month periods ended September 30, 2000 and 1999 are shown at the bottom of their consolidated income statements for those periods included in Part I, Item 1 of this report. Electricity sales volume decreased 4.6 percent in the third quarter of 2000, compared to the third quarter of 1999. The decrease in sales volume is attributable to the cooler than normal summer weather, offset in part by the continued strength of the economy in the New York City metropolitan area. After adjusting for variations, principally weather and billing days, in

each period, electricity sales volume increased 3.6 percent in the 2000 period. Weather-adjusted sales represent an estimate of the sales that would have been made if historical average weather conditions had prevailed.

Purchased power costs increased $557.9 million in the third quarter of 2000, compared to the third quarter of 1999, as a result of divestiture of electric generating capacity in 1999 (and the resultant requirement to purchase capacity and energy to serve customers), replacement power costs for the Indian Point 2 nuclear generating station and increases in the price of purchased power. Fuel costs decreased $21.9 million as a result of generation divestiture.

Con Edison's electric operating income decreased $43.6 million in the third quarter of 2000, compared to the third quarter of 1999. The principal components of this variation were: a reduction in net revenues (operating revenues less fuel and purchased power) of $138.3 million (reflecting the effects of the cooler than normal summer weather, $31.1 million of electric rate reductions and $28 million of Indian Point 2 replacement power costs that have not been recovered from customers), offset by decreases in other operations and maintenance expenses (discussed in the following paragraph) and reduced Federal income tax ($51.4 million).

The decrease in the 2000 period in other operations and maintenance expenses reflects certain expenses relating to Indian Point 2, increased pension credits ($45.8 million) and a $17.8 million decrease in expenses relating to Con Edison of New York's other electric generating assets (most of which were sold in 1999). Indian Point 2 refueling and maintenance expenses of $10.5 million, offset by $7.2 million of revenues, were recognized in income in the third quarter of 2000. Approximately $14.4 million of Indian Point 2 refueling and maintenance expenses have been deferred and will be matched against revenues of an equal amount which will be realized during the remaining months of the rate year ending March 2001. See "Outage Accounting" in Note G to the Con Edison financial statements included in the Form 10-K and Note C to the Con Edison financial statements included in Part I, Item 1 of this report (which Note C is incorporated herein by reference).

Gas

Gas sales volumes for Con Edison of New York and O&R for the three-month periods ended September 30, 2000 and 1999 are shown at the bottom of their consolidated income statements for those periods included in Part I, Item 1 of this report. Con Edison's gas operating revenues and operating income increased $23.3 million and $2.5 million, respectively, in the third quarter of 2000, compared to the third quarter of 1999, reflecting increased gas sales and transportation volumes.

Gas sales and transportation volume for firm customers increased 10.0 percent in the third quarter of 2000, compared to the third quarter of 1999. Weather had a minimal impact on gas sales for this period.

Steam

Con Edison's steam operating revenues increased $16.0 million and operating income decreased $3.9 million in the third quarter of 2000, compared to the third quarter of 1999. The higher revenues reflect Con Edison of New York's increased fuel and purchased power costs (which it bills to customers under PSC-approved rate provisions).

Steam sales volume decreased 13.0 percent in the 2000 period. After adjusting for variations, principally weather and billing days, in each period, steam sales volume decreased 0.5 percent in the 2000 period.

Other Income

Investment income decreased $6.0 million in the 2000 period, compared to the 1999 period, because during a portion of the 1999 period net proceeds from generation divestiture were invested in temporary cash investments.

Net Interest Charges

Net interest charges increased $18.9 million in the 2000 period, reflecting $10.9 million of increased interest on long-term borrowings, $2.3 million of increased interest related to short-term borrowings and $4.0 million of interest accrued on the gain on generation divestiture that has been deferred for disposition by the PSC. See "Regulatory Matters - Electric," above.

Nine Months Ended September 30, 2000 Compared with the Nine Months Ended September 30, 1999

Con Edison's net income for common stock for the nine months ended September 30, 2000 was $536.8 million or $2.53 a share (based upon an average of 212.2 million common shares outstanding), compared with $579.1 million or $2.56 a share (based upon an average of 225.8 million common shares outstanding) for the nine months ended September 30, 1999. O&R financial results are not included in earnings for periods prior to its July 1999 acquisition by Con Edison.

Earnings for the nine months ended September 30, 2000 and 1999 were as follows:

	2000			1999

Con Edison of New York	$	515.7		$	570.7
O&R		32.4			18.9
Nonregulated subsidiaries		0.9			(9.0	)
Other*		(12.2	)		(1.5	)
Con Edison	$	536.8		$	579.1

* Includes holding company expenses (including amortization of $8.2 million and $1.3 million for 2000 and 1999, respectively, of goodwill from the acquisition of O&R) and intercompany eliminations.

Con Edison's earnings for the first nine months of 2000, compared to the first nine months of 1999, decreased $42.3 million, reflecting the effects of cooler than normal summer weather for the 2000 period as compared to the warmer than normal weather experienced in the 1999 period, electric rate reductions of $76.8 million, $58 million of replacement power costs for Con Edison of New York's Indian Point 2 nuclear generating station that have not been recovered from customers, $43.6 million of increased transmission and distribution expenses and $51.7 million of increased interest charges, offset by increased revenues resulting from the favorable economy, $114.7 million of increased pension credits, reduced federal income tax expense of $75.4 million, and $13.5 million of O&R earnings.

Con Edison estimates that the earnings per share impact in the 2000 period of the June and August 1999 divestiture of most of Con Edison of New York's electric generating capacity was substantially offset by reductions in property taxes, depreciation and other operating and maintenance costs, its acquisition of O&R and the common stock repurchase program.

A comparison of the results of operations of Con Edison for the nine months ended September 30, 2000 compared to the nine months ended September 30, 1999 follows.

Nine Months Ended Sept. 30, 2000 Compared With Nine Months Ended Sept. 30, 1999

		Increases (Decreases)			Increases (Decreases)
(Millions of dollars)		Amount			Percent

	Operating revenues	$	1,579.3		28.2	%
	Purchased power - electric and steam		1,507.7		(A	)
	Fuel - electric and steam		(110.2	)	(31.5	)
	Gas purchased for resale		223.0		65.7
	Operating revenues less purchased power, fuel and gas purchased for resale (net revenues)		(41.2	)	(1.1	)
	Other operations and maintenance		(4.9	)	(0.4	)
	Depreciation and amortization		38.3		9.6
	Taxes, other than federal income tax		(6.7	)	(0.7	)
	Federal income tax		(75.4	)	(22.1	)
	Operating income		7.5		0.9
	Other income less deductions and related federal income tax		1.9		28.3
	Net interest charges		51.7		20.8
	Preferred stock dividend requirements		—		—
	Net income for common stock	$	(42.3	)	(7.3	)%

(A): Amounts in excess of 100 percent

Electric

Con Edison's electric operating revenues for the nine months ended September 30, 2000 increased $1.0 billion compared to the comparable period of 1999, reflecting Con Edison of New York's increased sales volumes and increased purchased power costs (which it bills to customers under PSC-approved rate provisions), offset by electric rate reductions of approximately $76.8 million. See Note C to the Con Edison financial statements included in Part I, Item 1 of this report (which Note C is incorporated herein by reference). The increase also reflects $391.0 million of O&R electric operating revenues for the nine months ended September 30, 2000, compared to $157.5 million of O&R electric operating revenues recognized in the 1999 period following Con Edison's July 1999 acquisition of O&R.

Electricity sales volumes for Con Edison of New York and O&R for the nine-month periods ended September 30, 2000 and 1999 are shown at the bottom of their consolidated income statements for those periods included in Part I, Item 1 of this report. Electricity sales volume in Con Edison of New York's service territory increased 0.8 percent for the nine months ended September 30, 2000, compared to the nine months ended September 30, 1999. The increase in sales volume reflects the continued strength of the New York City economy, offset in part by the effects of the cooler than normal summer weather. After adjusting for variations, principally weather and billing days, in each period, electricity sales volume in Con Edison of New York's service territory increased 3.2 percent in the 2000 period. Weather-adjusted sales represent an estimate of the sales that would have been made if historical average weather conditions had prevailed.

Con Edison's purchased power costs increased $1.5 billion in the nine months ended September 30, 2000, compared to the nine months ended September 30, 1999, reflecting a $1.1 billion increase in Con Edison of New York's purchased power costs as a result of its divestiture of most of its generating capacity in 1999, the ongoing Indian Point 2 outage and increases in the price of purchased power and a $254.6 million increase in Con Edison's unregulated subsidiaries' purchased power costs as a result of increased sales and trading volume and increases in the price of purchased power. The increase also reflects $207.0 million of O&R purchased power costs for the nine months ended September 30, 2000, compared to $63.2 million of O&R purchased power costs recognized in the 1999 period following Con Edison's July 1999 acquisition of O&R. Fuel costs decreased $177.1 million as a result of generation divestiture.

Con Edison's electric operating income decreased $16.3 million for the nine months ended September 30, 2000 from the comparable 1999 period, reflecting a decrease in Con Edison of New York's electric operating income of $25.6 million, comprised primarily of a reduction in net revenues (operating revenues less fuel and purchased power) of $225.5 million (reflecting the effects of the cooler than normal summer weather, $76.8 million of electric rate reductions and $58 million of Indian Point 2 replacement power costs that have not been recovered from customers) and $43.6 million of increased transmission

and distribution expenses, offset by decreases in other operations and maintenance expenses (discussed in the following paragraph), property taxes ($33.6 million) and Federal income tax ($70.8 million) and the deferral of electric capacity costs ($49.5 million). The decrease also reflects $40.2 million of O&R electric operating income for the nine months ended September 30, 2000, compared to $30.9 million of O&R electric operating income recognized in the 1999 period following Con Edison's July 1999 acquisition of O&R.

The decrease in the 2000 period in other operations and maintenance expenses reflects certain expenses relating to Indian Point 2, increased pension credits ($91.3 million), and an $89.2 million decrease in expenses relating to Con Edison of New York's other electric generating assets (most of which were sold in 1999). Indian Point 2 refueling and maintenance expenses of $47.1 million, offset by $43.9 million of revenues, were recognized in income in the 2000 period. Approximately $14.4 million of Indian Point 2 refueling and maintenance expenses have been deferred and will be matched against revenues of an equal amount which will be realized during the remaining months of the rate year ending March 2001. In addition, operation and maintenance expenses in the 2000 period reflect $15.2 million of other expenses related to the ongoing Indian Point 2 outage. See "Outage Accounting" in Note G to the Con Edison financial statements included in the Form 10-K and Note C to the Con Edison financial statements included in Part I, Item 1 of this report (which Note C is incorporated herein by reference). The decrease in the 2000 period also reflects $105.7 million of O&R operations and maintenance expenses for the nine months ended September 30, 2000, compared to $42.8 million of O&R operations and maintenance expenses recognized in the 1999 period following Con Edison's July 1999 acquisition of O&R.

Gas

Con Edison's gas operating revenues and operating income increased $168.8 million and $19.1 million, respectively, for the nine months ended September 30, 2000, compared to the nine months ended September 30, 1999. These changes reflect increases in O&R's gas operating revenues of approximately $114.2 million and gas operating income of approximately $11.6 million (reflecting O&R's 1999 financial results only since its July 1999 acquisition by Con Edison), Con Edison of New York's increased gas sales and transportation volumes, and higher pension credits.

Gas sales volumes for Con Edison of New York and O&R for the nine-month periods ended September 30, 2000 and 1999 are shown at the bottom of their consolidated income statements for those periods included in Part I, Item 1 of this report. Gas sales and transportation volume for Con Edison of New York's firm customers increased 4.9 percent in the nine months ended September 30, 2000, compared to the nine months ended September 30, 1999. After adjusting for variations, principally weather and billing days, in each period, firm gas sales and transportation volume increased 2.3 percent in the 2000 period.

A weather-normalization provision that applies to the gas businesses of Con Edison's utility subsidiaries operating in New York moderates, but does not eliminate, the effect of weather-related changes on gas operating income.

Steam

Con Edison of New York's steam operating revenues increased $67.3 million and operating income decreased $4.9 million for the nine months ended September 30, 2000, compared to the nine months ended September 30, 1999. The higher revenues reflect increased fuel and purchased power costs (which it bills to customers under PSC-approved rate provisions).

Steam sales volume decreased 3.3 percent in the 2000 period. After adjusting for variations, principally weather and billing days, in each period, steam sales volume decreased 0.6 percent in the 2000 period.

Net Interest Charges

Net interest charges increased $51.7 million in the 2000 period, reflecting $4.3 million of increased interest expense related to short-term borrowings of Con Edison (the holding company) and increases in Con Edison of New York's interest expense of $14.4 million related to long-term borrowings and $10.5 million related to short-term borrowings, and $8.0 million of interest accrued on the gain on generation divestiture that has been deferred for disposition by the PSC. See "Regulatory Matters - Electric," above. The increase also reflects $19.1 million of O&R interest expense for the nine months ended September 30, 2000, compared to $7.3 million of O&R interest expense recognized in the 1999 period following Con Edison's July 1999 acquisition of O&R. In addition $5.6 million of interest was incurred in the 2000 period on the long-term debt of the Lakewood Project (which Con Edison purchased on June 2000 - see "Liquidity and Capital Resources," above).

Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations

CON EDISON OF NEW YORK

Consolidated Edison Company of New York, Inc. (Con Edison of New York) is a regulated utility that provides electric service to over three million customers and gas service to over one million customers in New York City and Westchester County. It also provides steam service in parts of Manhattan. All of the common stock of Con Edison of New York is owned by Consolidated Edison, Inc. (Con Edison).

This discussion and analysis should be read in conjunction with Con Edison of New York's Management's Discussion and Analysis of Financial Condition and Results of Operations in Item 7 of the combined Con Edison, Con Edison of New York and Orange and Rockland Utilities, Inc. (O&R) Annual Report on Form 10-K for the year ended December 31, 1999 (File Nos. 1-14514, 1-1217 and 1-4315, the Form 10-K) and Con Edison of New York's Management's Discussion and Analysis of Financial Condition and Results of Operations (Con Edison of New York's earlier 2000 10-Q MD&As) in Part I, Item 2 of the combined Con Edison, Con Edison of New York and O&R Quarterly Reports on Form 10-Q for the quarterly periods ended March 31, 2000 and June 30, 2000 (Con Edison of New York's earlier 2000 Form 10-Qs). Reference is also made to the notes to the financial statements in Part I, Item 1 of this report, which notes are incorporated herein by reference.

Liquidity and Capital Resources

Cash and temporary cash investments and outstanding commercial paper (shown as notes payable on the balance sheet) at September 30, 2000 and December 31, 1999 were (amounts shown in millions):

	September 30, 2000		December 31,1999

Cash and temporary cash investments	$	46.3	$	349.0
Commercial paper	$	165.0	$	495.4

Net cash flows from operating activities during the first nine months of 2000 decreased $478.1 million, compared to the first nine months of 1999, reflecting principally lower net income, pension credits (see discussion of prepayments, below) and increased purchased power costs (see discussion of accounts receivable and recoverable energy costs, below).

Construction expenditures during the first nine months of 2000 increased $166.6 million compared to the first nine months of 1999, principally as a result of expenditures related to meeting load growth on the company's electric distribution system and replacement of the steam generators at its Indian Point 2 nuclear generating unit. See "Nuclear Generation," below.

Con Edison of New York's accounts receivable - customer, less allowance for uncollectible accounts increased $107.7 million at September 30, 2000 compared with year-end 1999, due primarily to increased customer billings, reflecting higher wholesale power costs. The company's equivalent number of days of revenue outstanding (ENDRO) of customer accounts receivable was 26.4 days at September 30, 2000, compared with 28.8 days at December 31, 1999.

Prepayments at September 30, 2000 include cumulative credits to pension expense of $293.0 million, compared with $116.0 million at December 31, 1999. See Note D to the Con Edison of New York financial statements included in Item 8 of the Form 10-K. Prepayments at September 30, 2000 also include prepaid property tax of $129.6 million, compared with $10.7 million at December 31, 1999. Property taxes are generally prepaid on January 1 and July 1 of each year.

Recoverable energy costs increased $103.3 million at September 30, 2000 compared with year-end 1999, reflecting increased purchased power costs discussed below in "Results of Operations," offset in part by the ongoing recovery of previously deferred amounts. Purchased power costs are recovered, on average, 40 days after such costs are incurred. See "Recoverable Fuel Costs" in Note A to the Con Edison of New York financial statements included in Item 8 of the Form 10-K. Also see "Regulatory Matters - Electric," below, and Note C to the Con Edison of New York financial statements included in Part I, Item 1 of this report (which Note C is incorporated herein by reference).

Deferred charges for divestiture - capacity replacement reconciliation increased $49.5 million at September 30, 2000, compared with year-end 1999, reflecting the deferral of incremental electric capacity costs under contracts with the buyers of the generating assets sold by Con Edison of New York incurred prior to the initiation in May 2000 of a capacity market under the New York Independent System Operator. See Note G to the Con Edison of New York financial statements included in Item 8 of the Form 10-K and "Regulatory Matters - Electric," below.

Deferred environmental remediation costs increased $31.2 million at September 30, 2000, compared with year-end 1999, reflecting site investigation and remediation costs deferred under current rate agreements. See Note B to the Con Edison of New York financial statements included in Part I, Item 1 of this report (which Note B is incorporated herein by reference).

Other regulatory assets increased $22.7 million at September 30, 2000 compared with year-end 1999, reflecting the deferral of $14.4 million of Indian Point 2 refueling and maintenance outage expenses discussed below in "Results of Operations."

Unfunded other post-employment benefit (OPEB) obligations (shown as pension and benefit reserve on the balance sheet) were $115.9 million at September 30, 2000, compared to $76.8 million at December 31, 1999. Con Edison of New York's policy is to fund its estimated OPEB costs to the extent deductible under current tax limitations. See Note E to the Con Edison of New York financial statements included in Item 8 of the Form 10-K.

The accumulated provision for injuries and damages was $122.1 million at September 30, 2000, compared to $110.1 million at December 31, 1999. The increase resulted primarily from increased workers' compensation claims.

Accounts payable increased $191.7 million compared with year-end 1999, due primarily to the higher costs of power purchases.

Accrued taxes increased $81.4 million compared to year-end 1999, due principally to timing differences.

Other regulatory liabilities increased $19.5 million compared with year-end 1999, reflecting primarily the deferral under the company's current gas rate agreement of $14.5 million of earnings above a 13 percent threshold that are to be shared with customers (see "Regulatory Matters - Gas" in Con Edison of New York's 10-K MD&A) and $8.0 million of interest on the gain on divestiture (see "Regulatory Matters - Electric," below), offset by the recognition of $22.3 million of previously deferred revenues relating to a scheduled Indian Point 2 refueling and maintenance outage.

Capital Resources

Con Edison of New York's ratio of earnings to fixed charges (for the 12 months ended on the date indicated) and common equity ratio (as of the date indicated) were:

	September 30, 2000	December 31, 1999

Earnings to fixed charges (SEC basis)	3.49	4.17
Common equity ratio*	47.8	49.4

* Common shareholder's equity as a percentage of total capitalization

Con Edison of New York's ratio of earnings to fixed charges decreased for the 12-month period ending September 30, 2000 compared to the 12-month period ending December 31, 1999 as a result of decreased net income available for common stock before Federal income tax and increased interest expense.

Regulatory Matters

Electric

The Agreement continues the rate provisions pursuant to which Con Edison of New York recovers from its customers purchased power and fuel costs. The Agreement does not address the New York State Attorney General's petitions that are discussed below. The Agreement includes the recommendation that the PSC establish a proceeding to consider rate measures that reduce the volatility of fuel and energy costs experienced during the months of peak usage, provided that such measures may neither be materially inconsistent with the Agreement nor adversely impact Con Edison of New York's financial

integrity. For information about recovery of replacement power and other costs relating to Con Edison of New York's Indian Point 2 nuclear generating unit, see Note C to the Con Edison of New York financial statements included in Part I, Item 1 of this report.

about these incremental capacity costs, see "Regulatory Matters" in Con Edison of New York's earlier 2000 10-Q MD&As and Note I to the Con Edison of New York financial statements in Item 8 of the Form 10-K.

The Agreement provides for the approval of Con Edison's acquisition of Northeast Utilities, indicates that the PSC should authorize the merger as being in the public interest and allocates to New York customers approximately half of the net synergy savings applicable to New York utility operations that are expected to result from the merger over the ten-year period ending March 2011. To reflect this allocation, following the completion of the merger, Con Edison of New York will reduce its electric rates by $18.5 million (discussed above) and annually accrue credits of about $3.4 million and $0.9 million, respectively, for its gas and steam customers. The Agreement also amends the existing guidelines governing transactions among affiliates of Con Edison of New York to reflect, to the extent necessary, the requirements of the Public Utility Holding Company Act that will apply following the merger.

For additional information about the 1997 Restructuring Agreement, see "Regulatory Matters - Electric" in Con Edison of New York's 10-K MD&A and "Regulatory Matters" in Con Edison of New York's earlier 2000 10-Q MD&As.

In August and September 2000, the New York State Attorney General (NYSAG) filed petitions with the PSC regarding the rate adjustment mechanisms that permit Con Edison of New York to recover purchased power and other costs from its customers. The petitions seek the institution of a PSC inquiry into the cause of increases in electric bills, to make electric rates temporary until the conclusion of the PSC's inquiry, and to roll those rates back to levels such that customers would pay no more for the same amount of electric service than they would have in 1999. In October 2000, AARP and the Public Utility Law Project of New York, Inc. filed a similar petition with the PSC. Con Edison of New York believes that these petitions are without merit, but is unable to predict whether or not any related proceedings or other actions will have a material adverse effect on its financial position, results of operations or liquidity.

Gas

in rates which was scheduled to be billed to customers beginning January 2001 instead are to be billed to customers beginning April 2001. These provisions are intended to reduce gas costs during the winter months.

Steam

The settlement agreement provides for a $16.6 million steam rate increase to take effect October 2000 and, with limited exceptions, no further changes in steam rates prior to October 2004. The company is required to share with customers 50 percent of any earnings for any rate year covered by the agreement in excess of a specified rate of return on steam common equity (11.0 percent for the first rate year, the 12-month period ending September 2001; 10.5 percent thereafter if the repowering of the company's East River steam-electric generating plant is not completed). A rate moderation mechanism will permit the company to defer a portion of the revenues collected in the first two rate years attributable to the rate increase and recognize such deferrals in income during the last two rate years.

For additional information, see "Regulatory Matters - Steam" in Con Edison of New York's 10-K MD&A.

Nuclear Generation

Con Edison and Con Edison of New York Current Reports on Form 8-K, dated March 30, 2000 and October 10, 2000 and Note C to the Con Edison of New York financial statements included in Part I, Item 1 of this report (which Note C is incorporated herein by reference).

Financial Market Risks

Reference is made to "Financial Market Risks" in Con Edison of New York's 10-K MD&A. At September 30, 2000 neither the fair value of derivatives outstanding nor potential derivative losses from reasonably possible near-term changes in market prices were material to the financial position, results of operations or liquidity of the company.

Environmental Matters

For information concerning potential liabilities of Con Edison of New York arising from laws and regulations protecting the environment, including the Federal Comprehensive Environmental Response, Compensation and Liability Act of 1980 (Superfund), see the notes to Con Edison of New York's financial statements included in Part I, Item 1 of this report and also see Part II, Item 3 of this report.

Results Of Operations

Third Quarter of 2000 Compared with Third Quarter of 1999

Con Edison of New York's net income for common stock for the third quarter of 2000 was $266.3 million, compared with $319.5 million for the third quarter of 1999. Con Edison of New York's net income reflects the effects of the cooler than normal summer weather as compared to the warmer than normal weather experienced in the 1999 period, $29.1 million of electric rate reductions and $28 million of Indian Point 2 replacement power costs that have not been recovered from customers (see "Nuclear Generation," above), offset in part by $57.7 million of increased pension credits (see Note D to the Con Edison of New York financial statements included in Item 8 of the Form 10-K) and a $56.7 million reduction in Federal income taxes.

A comparison of the results of operations of Con Edison of New York for the third quarter of 2000 compared to the third quarter of 1999 follows.

Three Months Ended Sept. 30, 2000 Compared With Three Months Ended Sept. 30, 1999

(Millions of dollars)	Increases (Decreases) Amount			Increases (Decreases) Percent

Operating revenues	$	289.7		13.7	%
Purchased power - electric and steam		409.1		71.2
Fuel - electric and steam		(14.5	)	(13.1	)
Gas purchased for resale		20.4		38.8
Operating revenues less purchased power, fuel and gas purchased for resale (net revenues)		(125.3	)	(9.1	)
Other operations and maintenance		(52.1	)	(14.0	)
Depreciation and amortization		10.7		8.6
Taxes, other than federal income tax		12.5		4.2
Federal income tax		(56.7	)	(31.5	)
Operating income		(39.7	)	(9.9	)
Other income less deductions and related federal income tax		1.8		42.0
Net interest charges		15.3		19.0
Net income for common stock	$	(53.2	)	(16.7	)%

A discussion of Con Edison of New York's operating revenues and operating income by business segment follows. Con Edison of New York's principal business segments are its electric, gas and steam utility businesses. For additional information about Con Edison of New York's business segments, see the notes to the Con Edison of New York financial statements included in Part I, Item 1 of this report.

Electric

Con Edison of New York's electric operating revenues in the third quarter of 2000 increased $255.9 million compared to the third quarter of 1999. The increase reflects increased purchased power costs (which it bills to customers under PSC-approved rate provisions), offset by the effects of the cooler than normal summer weather compared to warmer than normal summer weather for the 1999 period and electric rate reductions of approximately $29.1 million. See Note C to the Con Edison of New York financial statements included in Part I, Item 1 of this report (which Note C is incorporated herein by reference).

Con Edison of New York's electric sales, excluding off-system sales, for the third quarter of 2000 compared with the third quarter of 1999 were:

Millions of KWHRS.

Description	Three Months Ended September 30, 2000	Three Months Ended September 30, 1999	Variation		Percent Variation

Residential/Religious	3,517	4,032	(515	)	(12.8	)%
Commercial/Industrial	5,679	5,612	67		1.2
Other	68	142	(74	)	(52.1	)

TOTAL FULL SERVICE CUSTOMERS	9,264	9,786	(522	)	(5.3	)
Retail Choice Customers	2,597	2,743	(146	)	(5.3	)

SUB-TOTAL	11,861	12,529	(668	)	(5.3	)
NYPA, Municipal Agency and Other Sales	2,682	2,754	(72	)	(2.6	)

TOTAL SERVICE AREA	14,543	15,283	(740	)	(4.8	)%

Electricity sales volume in Con Edison of New York's service territory decreased 4.8 percent in the third quarter of 2000, compared to the third quarter of 1999. The decrease in sales volume reflects the effects of the cooler than normal summer weather, offset in part by the continued strength of the New York City economy. After adjusting for variations, principally weather and billing days, in each period, electricity sales volume in Con Edison of New York's service territory increased 3.0 percent in the 2000 period. Weather-adjusted sales represent an estimate of the sales that would have been made if historical average weather conditions had prevailed.

Con Edison of New York's purchased power costs increased $405.9 million in the third quarter of 2000, compared to the third quarter of 1999, as a result of its divestiture of most of its generating capacity in 1999, replacement power costs for the Indian Point 2 nuclear generating station and increases in the price of purchased power. Fuel costs decreased $31.5 million as a result of generation divestiture.

Con Edison of New York's electric operating income decreased $35.0 million in the third quarter of 2000, compared to the third quarter of 1999. The principal components of the decrease were a reduction in net revenues (operating revenues less fuel and purchased power) of $120.0 million, reflecting the cooler than normal summer weather and $28.0 million of replacement power costs for the Indian Point 2 nuclear generating station that have not been recovered from customers, offset by decreases in other operations and maintenance expenses (discussed in the following paragraph) and lower Federal income tax ($47.3 million).

2001. See "Outage Accounting" in Note G to the Con Edison of New York financial statements included in the Form 10-K and Note C to the Con Edison of New York financial statements included in Part I, Item 1 of this report (which Note C is incorporated herein by reference).

Gas

Con Edison of New York's gas operating revenues increased $17.7 million and operating income decreased $0.8 million in the third quarter of 2000, compared to the third quarter of 1999. These changes reflect increased gas sales and transportation volumes.

Con Edison of New York's gas sales volumes for the third quarter of 2000 and the third quarter of 1999 are shown at the bottom of its consolidated income statement for those periods included in Part I, Item 1 of this report. Gas sales and transportation volume for Con Edison of New York's firm customers increased 8.9 percent in the third quarter of 2000, compared to the 1999 period. Weather had a minimal impact on gas sales for this period.

Steam

Con Edison of New York's steam operating revenues increased $16.0 million and operating income decreased $3.9 million in the third quarter of 2000 compared to the third quarter of 1999. The higher revenues reflect increased fuel and purchased power costs (which it bills to customers under PSC-approved rate provisions).

Con Edison of New York's steam sales volumes for the third quarter of 2000 and the third quarter of 1999 are shown at the bottom of its consolidated income statement for those periods included in Part I, Item 1 of this report. Steam sales volume decreased 13.0 percent in the 2000 period. After adjusting for variations, principally weather and billing days, in each period, steam sales volume decreased 0.5 percent in the 2000 period.

Net Interest Charges

Net interest charges increased $15.3 million in the 2000 period, reflecting $8.2 million of increased interest on long-term borrowings, $2.6 million of increased interest related to short-term borrowings and $4.0 million of interest accrued on the gain on generation divestiture that has been deferred for disposition by the PSC. See "Regulatory Matters - Electric," above.

Nine Months Ended September 30, 2000 Compared with the Nine Months Ended
September 30, 1999

Con Edison of New York's net income for common stock for the nine months ended September 30, 2000 was $515.7 million, compared with $570.7 million for the nine months ended September 30, 1999. Con Edison of New York's net income reflects the effects of cooler than normal summer weather for the 2000 period as compared to the warmer than normal weather experienced in the 1999 period, $76.8 million of electric rate reductions, $58 million of replacement power costs for the Indian Point nuclear generating station that were not recovered from customers, $33.7 million of increased interest charges and increased transmission and distribution expenses of $43.6 million, offset by increased revenues from a favorable economy, increased pension credits of $114.7 million and reduced federal income taxes of $82.8 million.

A comparison of the results of operations of Con Edison of New York for the nine months ended September 30, 2000 compared to the nine months ended September 30, 1999 follows.

Nine Months Ended Sept. 30, 2000 Compared With Nine Months Ended Sept. 30, 1999

	Increases (Decreases) Amount			Increases (Decreases) Percent

Operating revenues	$	823.3		15.6	%
Purchased power - electric and steam		1,109.5		98.0
Fuel - electric and steam		(125.5	)	(35.9	)
Gas purchased for resale		57.3		21.6
Operating revenues less purchased power, fuel and gas purchased for resale (net revenues)		(218.0	)	(6.2	)
Other operations and maintenance		(81.9	)	(7.3	)
Depreciation and amortization		9.9		2.5
Taxes, other than federal income tax		(40.2	)	(4.6	)
Federal income tax		(82.8	)	(24.8	)
Operating income		(23.0	)	(2.8	)
Other income less deductions and related federal income tax		1.7		41.2
Net interest charges		33.7		14.0
Net income for common stock	$	(55.0	)	(9.6	)%

Electric

Con Edison of New York's electric operating revenues in the nine months ended September 30, 2000 increased $698.3 million, compared to the nine months ended September 30, 1999. The increase reflects increased sales volumes and increased purchased power costs (which it bills to customers under

PSC-approved rate provisions), offset by electric rate reductions of approximately $76.8 million. See Note C to the Con Edison of New York financial statements included in Part I, Item 1 of this report (which Note C is incorporated herein by reference).

Con Edison of New York's electric sales, excluding off-system sales, for the nine months ended September 30, 2000 compared with the nine months ended September 30, 1999 were:

Millions of Kwhrs.

Description	Nine Months Ended September 30, 2000	Nine Months Ended September 30, 1999	Variation		Percent Variation

Residential/Religious	8,925	9,224	(299	)	(3.2	)%
Commercial/Industrial	15,049	15,731	(682	)	(4.3	)
Other	308	404	(96	)	(23.8	)

TOTAL FULL SERVICE CUSTOMERS	24,282	25,359	(1,077	)	(4.2	)
Retail Choice Customers	6,974	5,610	1,364		24.3

SUB-TOTAL	31,256	30,969	287		0.9
NYPA, Municipal Agency and Other Sales	7,494	7,483	11		0.1

TOTAL SERVICE AREA	38,750	38,452	298		0.8	%

Electricity sales volume in Con Edison of New York's service territory increased 0.8 percent for the nine months ended September 30, 2000 compared to the nine months ended September 30, 1999. The increase in sales volume reflects the continued strength of the New York City economy, offset in part by the cooler than normal summer weather. After adjusting for variations, principally weather and billing days, in each period, electricity sales volume in Con Edison of New York's service territory increased 3.2 percent in the 2000 period. Weather-adjusted sales represent an estimate of the sales that would have been made if historical average weather conditions had prevailed.

Con Edison of New York's purchased power costs increased $1.1 billion for the nine months ended September 30, 2000, compared to the nine months ended September 30, 1999, as a result of its divestiture of most of its generating capacity in 1999, replacement power costs for the Indian Point 2 nuclear generating station and increases in the price of purchased power. Fuel costs decreased $177.1 million as a result of generation divestiture.

Con Edison of New York's electric operating income decreased $25.6 million in the nine months ended September 30, 2000, compared with the nine months ended September 30, 1999, reflecting decreased net revenues (operating revenues less fuel and purchased power) of $225.5 million (reflecting the effects of the cooler than normal summer weather, $76.8 million of electric rate reductions and $58 million of Indian Point 2 replacement power costs that have not been recovered from customers) and $43.6 million

of increased transmission and distribution expenses, offset by decreases in other operations and maintenance expenses (discussed on the following paragraph) property taxes ($33.6 million) and reduced Federal income tax ($70.8 million) and the deferral of electric capacity costs ($49.5 million).

The decrease in the 2000 period in other operations and maintenance expenses reflects increased pension credits ($91.3 million), an $89.2 million decrease in expenses relating to Con Edison of New York's other electric generating assets (most of which were sold in 1999) and certain expenses relating to Indian Point 2. Indian Point 2 refueling and maintenance expenses of $47.1 million, offset by $43.9 million of revenues, were recognized in income in the 2000 period. Approximately $14.4 million of Indian Point 2 refueling and maintenance expenses have been deferred and will be matched against revenues of an equal amount which will be realized during the remaining months of the rate year ending March 2001. See "Outage Accounting" in Note G to the Con Edison of New York financial statements included in the Form 10-K. In addition, operation and maintenance expenses in the 2000 period reflect $15.2 million of other expenses related to the ongoing Indian Point 2 outage.

Gas

Con Edison of New York's gas operating revenues and operating income increased $57.7 million and $7.5 million, respectively, for the nine months ended September 30, 2000, compared to the nine months ended September 30, 1999. These changes reflect increased gas sales and transportation volumes and higher pension credits.

Con Edison of New York's gas sales volumes for the nine-month periods ended September 30, 2000 and 1999 are shown at the bottom of its consolidated income statement for those periods included in Part I, Item 1 of this report. Gas sales and transportation volume for Con Edison of New York's firm customers increased 4.9 percent for the nine months ended September 30, 2000 compared to the 1999 period. After adjusting for variations, principally weather and billing days, in each period, firm gas sales and transportation volume increased 2.3 percent in the 2000 period.

A weather-normalization provision that applies to Con Edison of New York's gas business moderates, but does not eliminate, the effect of weather-related changes on gas operating income.

Steam

Con Edison of New York's steam sales volumes for the nine-month periods ended September 30, 2000 and 1999 are shown at the bottom of its consolidated income statement for those periods included in

Part I, Item 1 of this report. Steam sales volume decreased 3.3 percent in the 2000 period. After adjusting for variations, principally weather and billing days, in each period, steam sales volume decreased 0.6 percent in the 2000 period.

Net Interest Charges

Net interest charges increased $33.7 million in the 2000 period, reflecting $14.4 million of increased interest on long-term borrowings, $10.5 million of increased interest related to short-term borrowings and $8.0 million of interest accrued on the gain on generation divestiture that has been deferred for disposition by the PSC. See "Regulatory Matters - Electric," above.

O&R Management's Narrative Analysis Of The Results Of Operations

Orange and Rockland Utilities, Inc. (O&R), a wholly-owned subsidiary of Consolidated Edison, Inc. (Con Edison), meets the conditions specified in General Instruction H to Form 10-Q and is permitted to use the reduced disclosure format for wholly-owned subsidiaries of companies, such as Con Edison, that are reporting companies under the Securities Exchange Act of 1934. Accordingly, this O&R Management's Narrative Analysis of the Results of Operations is included in this report, and O&R has omitted from this report the information called for by Part I, Item 2 (Management's Discussion and Analysis of Financial Condition and Results of Operations).

O&R's net income for common stock for the nine months ended September 30, 2000 was $32.4 million, $21.9 million higher than the corresponding 1999 period. The 1999 period included $21.5 million of non-recurring merger and electric generating capacity divestiture related charges. Excluding the impact of these charges, net income increased $0.4 million in the 2000 period compared to the corresponding 1999 period. This increase was due primarily to higher electric and gas sales, a gain on the sale of land by a non-utility subsidiary and reduced operation and maintenance expenses, property taxes, depreciation expense and interest charges. These items were offset in part by rate reductions implemented in 1999 as a result of generation divestiture and acquisition by Con Edison. See Note A to the O&R financial statements in Item 8 of the combined Con Edison, Consolidated Edison Company of New York (Con Edison of New York) and O&R Annual Reports on Form 10-K for the year ended December 31, 1999 (File Nos. 1-14514, 1-1217 and 1-4315, the Form 10-K).

In September 2000 O&R, the Staff of the New York State Public Service Commission (PSC) and other parties entered into a settlement agreement in O&R's gas base rate case. The agreement, which is subject to PSC approval, covers the three-year period ending October 2003. The agreement maintains base gas rates at approximately current levels and allows O&R to record in income over the term of the agreement $18 million of previously deferred credits and Gas Adjustment Clause overcollections. O&R may reduce the term of the agreement to 18 months (with a corresponding reduction in the amount of credits to be recorded to income) if the company and the PSC staff are unable to reach agreement on certain further restructuring of the company's gas business by April 2002.

In October 2000 Con Edison, O&R, Con Edison of New York and Northeast Utilities entered into an agreement with the staff of the PSC and certain other parties. The agreement, which is subject to PSC approval, among other things, provides for the approval by the PSC of Con Edison's acquisition of Northeast Utilities and allocates to New York customers approximately half of the net synergy savings applicable to New York utility operations that are expected to result from the merger over the ten-year period ending March 2011. To reflect this allocation, following the completion of the merger, O&R will annually accrue credits of about $1.15 million and $0.4 million, respectively, for its electric and gas customers.

A comparison of the results of operations of O&R for the nine months ended September 30, 2000 compared to the nine months ended September 30, 1999 follows.

(Millions of dollars)	Increases (Decreases) Amount			Increases (Decreases) Percent

Operating revenues	$	49.3		10.4	%
Purchased power - electric		120.6		(A	)
Fuel - electric		(43.5	)	(A	)
Gas purchased for resale		15.3		24.3
Operating revenues less purchased power, fuel and gas purchased for resale (net revenues)		(43.1	)	(15.4	)
Other operations and maintenance		(59.5	)	(36.0	)
Depreciation and amortization		(4.0	)	(15.3	)
Taxes, other than federal income tax		(15.8	)	(24.9	)
Federal income tax		10.4		(A	)
Operating income		25.8		(A	)
Other income less deductions and related federal income tax		(10.3	)	(73.7	)
Net interest charges		(5.5	)	(22.3	)
Preferred stock dividend requirements		(0.9	)	(A	)
Net income for common stock	$	21.9		(A	)

(A): Amounts in excess of 100 percent

A discussion of O&R's operating revenues by business segment follows. O&R's principal business segments are its electric and gas utility businesses. For additional information about O&R's business segments, see the notes to the O&R financial statements included in Part I, Item 1 of this report.

Electric operating revenues increased $32.0 million in the nine months ended September 30, 2000, compared to the corresponding 1999 period. In the 1999 period, O&R reduced revenues by $24.9 million to reflect a liability to refund to customers this amount of proceeds from the June 1999 divestiture of the company's electric generating assets. See Note H to the O&R financial statements in Item 8 of the Form 10-K. Excluding the impact of this non-recurring accrual, electric operating revenues increased $7.1 million in the 2000 period compared to the corresponding 1999 period, due primarily to an increase in sales and higher purchased power costs (which O&R bills to its New York customers under rate provisions approved by state utility regulatory commissions) in the 2000 period, offset in part by rate reductions in August 1999.

O&R's electric sales volumes for the nine-month periods ended September 30, 2000 and 1999 are shown at the bottom of its consolidated income statement for those periods included in Part I, Item 1 of this report. O&R's electric energy sales in the nine months ended September 30, 2000 increased 3.0 percent from the corresponding 1999 period. The increase was due primarily to the continued strength of the

economy. After adjusting for variations, principally weather and billing days, electricity sales were 5.4 percent higher in the 2000 period. Weather-adjusted sales represent an estimate of the sales that would have been made if historical average weather conditions had prevailed.

O&R's purchased power costs increased $120.6 million during the nine months ended September 30, 2000, compared to the corresponding 1999 period. Fuel costs decreased $43.5 million in the 2000 period. These variations are attributable primarily to the June 1999 divestiture of the company's electric generating assets, higher customer sales, and increases in the cost of purchased energy. O&R's purchased power and fuel costs are recoverable from O&R's customers under rate provisions approved by the PSC. For Rockland Electric Company, an O&R utility subsidiary subject to regulation by the New Jersey Board of Public Utilities, current recovery of these costs is subject to certain limitations, and costs that are not currently recovered are deferred for future recovery. At September 30, 2000, net recoverable purchased power costs of approximately $21.4 million were deferred for future recovery by Rockland Electric Company.

O&R's gas operating revenues increased $13.6 million in the nine months ended September 30, 2000, compared to the corresponding 1999 period. The increase was due primarily to recovery from customers of higher gas costs and increases in gas sales and transportation volumes in the 2000 period. O&R's total sales of gas to customers during the 2000 period increased 4.4 percent compared with the 1999 period.

O&R's gas sales volumes for the nine-month periods ended September 30, 2000 and 1999 are shown at the bottom of its consolidated income statement for those periods included in Part I, Item 1 of this report. O&R's revenues from gas sales in New York are subject to a weather normalization clause. After adjusting for variations, principally weather and billing days, in each period, gas sales and transportation volume was 6.6 percent higher for the 2000 period, compared to the 1999 period.

Non-utility operating revenues in the nine months ended September 30, 2000 increased compared to the corresponding 1999 period, primarily as a result of a $2.4 million after-tax gain on the sale of land by a non-utility subsidiary of O&R that is winding down its business.

O&R's cost of gas purchased for resale increased $15.3 million in the nine months ended September 30, 2000, compared to the corresponding 1999 period, due primarily to higher gas costs and an increase in firm sales for the period.

O&R's other operation and maintenance expenses decreased $59.5 million in the nine months ended September 30, 2000, compared to the corresponding 1999 period, due primarily to the June 1999 divestiture of the company's electric generating assets and operating efficiencies resulting from Con Edison's July 1999 acquisition of the company.

Taxes other than federal income tax decreased $15.8 million in the nine months ended September 30, 2000, compared to the corresponding 1999 period, due primarily to reduced property taxes resulting from the June 1999 divestiture of the company's electric generating assets.

O&R's other income decreased $10.4 million in the nine months ended September 30, 2000, compared to the corresponding 1999 period. The 1999 period included a $14.7 million gain relating to the company's June 1999 divestiture of its electric generating assets. Excluding the impact of the gain in the 1999 period, other income increased $4.3 million in the 2000 period, due primarily to interest earned on proceeds from the divestiture.

O&R's interest charges decreased $5.5 million in the nine months ended September 30, 2000 compared to the corresponding 1999 period, due primarily to lower debt outstanding as a result of repayment of indebtedness with a portion of the proceeds from the June 1999 divestiture of the company's electric generating assets.

O&R redeemed all outstanding shares of its preferred stock in April 1999 and therefore had no preferred stock dividend requirements in the nine months ended September 30, 2000.

Item 3. Quantitative And Qualitative Disclosure About Market Risk

Con Edison

For information about Con Edison's primary market risks associated with activities in derivative financial instruments, other financial instruments and derivative commodity instruments, see "Financial Market Risks" in Con Edison's Management's Discussion and Analysis of Financial Condition and Results of Operations in Part 1, Item 2 of this report and Item 7A of the combined Con Edison, Con Edison of New York and O&R Annual Report on Form 10-K for the year ended December 31, 1999 (the "Form 10-K"), which information is incorporated herein by reference.

Con Edison Of New York

For information about Con Edison of New York's primary market risks associated with activities in derivative financial instruments, other financial instruments and derivative commodity instruments, see "Financial Market Risks" in Con Edison of New York's Management's Discussion and Analysis of Financial Condition and Results of Operations in Part 1, Item 2 of this report and Item 7A of the Form 10-K, which information is incorporated herein by reference.

PART II. OTHER INFORMATION

Item 1. Legal Proceedings

Con Edison

Northeast Utilities Shareholders' Suit

Reference is made to "Northeast Utilities Shareholders Suit" in Part II, Item 1, Legal Proceedings in the combined Con Edison, Con Edison of New York and O&R Quarterly Report on Form 10-Q for the quarterly period ended March 31, 2000 (the "First Quarter Form 10-Q").

Con Edison Of New York

Superfund - Arthur Kill Transformer Site

Reference is made to "Superfund - Arthur Kill Transformer Site" in Part I, Item 3, Legal Proceedings of the combined Con Edison, Con Edison of New York and O&R Annual Report on Form 10-K for the year ended December 31, 1999 (the "Form 10-K") and in Part II, Item 1, Legal Proceedings in the First Quarter Form 10-Q.

Superfund - Manufactured Gas Sites

Reference is made to "Superfund - Manufactured Gas Sites" in Part I, Item 3, Legal Proceedings of the Form 10-K and in Part II, Item 1, Legal Proceedings in the combined Con Edison, Con Edison of New York and O&R Quarterly Report on Form 10-Q for the quarterly period ended June 30, 2000 (the "Second Quarter Form 10-Q").

Superfund - BCF Oil Refining Site

Reference is made to "Superfund - BCF Oil Refining Site" in Part II, Item 1, Legal Proceedings in the Second Quarter Form 10-Q.

Superfund - Mattiace Petrochemical Company Site

Reference is made to "Superfund - Mattiace Petrochemical Company Site" in Part II, Item 1, Legal Proceedings in the Second Quarter Form 10-Q.

Employees' Class Action

Reference is made to "Employees' Class Action" in Part I, Item 3, Legal Proceedings of the Form 10-K and in Part II, Item 1, Legal Proceedings in the Second Quarter Form 10-Q. In June 2000, the court preliminarily approved a settlement agreement between Con Edison of New York and the plaintiffs. If the agreement receives final approval, the company will pay an estimated aggregate $10 million (including attorneys' fees) and will take certain actions with respect to its personnel practices. At September 30, 2000, the company had accrued a $12.1 million liability with respect to this action.

Washington Heights Power Outage

Reference is made to "Washington Heights Power Outage" in Part I, Item 3, Legal Proceedings of the Form 10-K. In August 2000, the New York State Supreme Court, New York County denied plaintiffs' motion to certify the class action. In September 2000, the City of New York's lawsuit against the company was discontinued.

Indian Point 2 Outage Litigation

Reference is made to "Indian Point 2 Outage Litigation" in Part II, Item 1, Legal Proceedings in the Second Quarter Form 10-Q and Note C to the Con Edison of New York financial statements included in Part I, Item1 of this report.

Religious Rate Proceedings

Reference is made to "Religious Rate Proceedings" in Part I, Item 3, Legal Proceedings of the Form 10-K. The Appellate Division of the New York State Supreme Court, Second Department has affirmed the trial court's dismissal of plaintiffs' lawsuit and denial of their class certification motion.

O&R

Shareholder Lawsuits

Reference is made to "Shareholder Lawsuits" in Part I, Item 3, Legal Proceedings of the Form 10-K and in Part II, Item 1, Legal Proceedings in the First Quarter Form 10-Q and Second Quarter Form 10-Q. In September 2000, the New York State Court of Appeals denied plaintiffs' motion for leave to appeal the April 2000 Appellate Division of the New York State Supreme Court, First Department's affirmation of the trial court's dismissal of plaintiffs' complaint in Virgilio Ciullo, et al. v. Orange and Rockland Utilities, Inc., et al. Plaintiffs have filed a notice of appeal with the Appellate Division of the New York State Supreme Court, First Department with respect to the May 2000 trial court's dismissal of plaintiffs' actions in Suzanne Hennessy, et al. v. D. Louis Peoples, et al.

O&R Clean Air Act Proceeding

Reference is made to "O&R Clean Air Act Proceeding" in Part II, Item 1, Legal Proceedings in the Second Quarter Form 10-Q.

Crossroads Cogeneration

Reference is made to "Crossroads Cogeneration" in Part I, Item 3, Legal Proceedings of the Form 10-K. In August 2000, the United States District Court for the District of New Jersey denied plaintiff's motion for summary judgement.

Item 6. Exhibits And Reports On Form 8-K

(a) Exhibits

Con Edison

Exhibit 10.1.1		Employment Agreement, dated as of September 1, 2000, between Con Edison and Eugene R. McGrath.
Exhibit 10.1.2		Employment Agreement, dated as of September 1, 2000, between Con Edison and Joan S. Freilich.
Exhibit 10.1.3		Severance Program for Officers of Consolidated Edison, Inc. and its Subsidiaries, effective as of September 1, 2000.
Exhibit 12.1		Statement of computation of Con Edison's ratio of earnings to fixed charges for the twelve-month periods ended September 30, 2000 and 1999.
Exhibit 27.1		Financial Data Schedule for Con Edison.*

Con Edison Of New York

Exhibit 10.2.1		Amendment, dated July 20, 2000, to Employment Contract, dated May 22, 1990, between Con Edison of New York and Eugene R. McGrath.
Exhibit 10.2.2		Agreement, dated August 22, 2000, between Con Edison of New York and J. Michael Evans.
Exhibit 12.2		Statement of computation of Con Edison of New York's ratio of earnings to fixed charges for the twelve-month periods ended September 30, 2000 and 1999.
Exhibit 27.2		Financial Data Schedule for Con Edison of New York.*

O&R

Exhibit 12.3		Statement of computation of O&R's ratio of earnings to fixed charges for the twelve-month periods ended September 30, 2000 and 1999.
Exhibit 27.3		Financial Data Schedule for O&R.*

* To the extent provided in Rule 402 of Regulation S-T, this exhibit shall not be deemed "filed", or otherwise subject to liabilities, or be deemed part of a registration statement.

(b) Reports On Form 8-K

Con Edison of New York filed a Current Report on Form 8-K, dated August 23, 2000, reporting (under Item 5): (i) the issuance and sale of $300 million aggregate principal amount of its 7.50% Debentures, Series 2000 B and (ii) the New York State Attorney General's August 2000 petition discussed under "Regulatory Matters - Electric" in the Management's Discussion and Analysis of Financial Condition and Results of Operation of Con Edison and Con Edison of New York included in Part I, Item 2 of this report.

Con Edison, along with Con Edison of New York and O&R, filed a combined Current Report on Form 8-K, dated September 22, 2000, reporting (under Item 5): (i) the October 2000 agreement with the staff of the New York State Public Service Commission and other parties discussed under "Regulatory Matters - Electric" in the Management's Discussion and Analysis of Financial Condition and Results of Operation of Con Edison and Con Edison of New York included in Part I, Item 2 of this report, and (ii) the increase in the merger consideration and issuance of a draft of the October 2000 decision of the Connecticut Department of Public Utility Control discussed under "Northeast Utilities" in the Management's Discussion and Analysis of Financial Condition and Results of Operation of Con Edison included in Part I, Item 2 of this report.

In addition, Con Edison, along with Con Edison of New York, filed (i) a combined Current Report on Form 8-K, dated October 10, 2000, reporting (under Item 5) the determination by the United States District Court for the Northern District of New York that the Indian Point 2 Law was unconstitutional and certain other developments with respect to the ongoing Indian Point 2 outage discussed in Note C to the Con Edison and Con Edison of New York financial statements included in Part I, Item 1 of this report, and (ii) combined Current Reports on Form 8-K, dated October 31, 2000 and November 3, 2000, furnishing (under Item 9) certain material pursuant to Regulation FD.

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, each Registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.

		Consolidated Edison, Inc.
		Consolidated Edison Company of New York, Inc.
Date: November 13, 2000		By:
		/s/ JOAN S. FREILICH Joan S. Freilich
		Executive Vice President,
		Chief Financial Officer and
		Duly Authorized Officer
		Orange and Rockland Utilities, Inc.
Date: November 13, 2000		By:
		/s/ HYMAN SCHOENBLUM Hyman Schoenblum
		Vice President,
		Chief Financial Officer and
		Duly Authorized Officer



                              EMPLOYMENT AGREEMENT

         AGREEMENT, by and between Consolidated Edison, Inc., a New York
corporation ("CEI"), and Eugene R. McGrath (the "Executive"), dated as of
September 1, 2000.

         WHEREAS, the Executive is currently serving as Chairman of the Board of
Directors of CEI (the "Board"), President and Chief Executive Officer of CEI,
and as Chairman of the Board of Trustees and Chief Executive Officer of its
subsidiary, Consolidated Edison Company of New York, Inc. ("CECONY"), a New York
corporation, such corporations hereinafter collectively referred to as the
"Company";

         WHEREAS, the Executive is willing to commit himself to be employed by
the Company on the terms and conditions herein set forth; and

         WHEREAS, the parties desire to enter into this Agreement setting forth
the terms and conditions for the employment relationship of the Executive with
the Company during the Employment Period (as hereinafter defined).

         NOW, THEREFORE, IN CONSIDERATION of the mutual premises, covenants and
agreements set forth below, it is hereby agreed as follows:

         1.   General.
              -------

         (a) Employment. The Company agrees to employ the Executive, and the
Executive agrees to be employed by the Company, in accordance with the terms and
provisions of this Agreement during the Employment Period.

         (b) Term. The term of the Executive's employment under this Agreement
(the "Initial Employment Period") shall commence as of the date hereof (the
"Effective Date") and shall continue until August 31, 2005. If the Executive
elects to retire prior to such date, the Initial Employment Period shall end on
the date of retirement. The Initial Employment Period shall be automatically
extended without further action of either party for additional one year periods,
unless written notice of either party's intention not to extend has been given
to the other party at least six months prior to the expiration of the Initial
Employment Period or any such one year extension; provided that the maximum
number of such one year extensions shall not exceed two and the second extension
shall expire on February 28, 2007. Collectively, the Initial Employment Period
and each such extension (if any) are herein referred to the "Employment Period".

         2.   Position, Duties and Powers of the Executive.
              --------------------------------------------

         (a) Position. During the Employment Period, the Executive shall serve
as Chairman of the Board and Chief Executive Officer of CEI and as Chairman of
the Board and Chief Executive Officer of CECONY.



         (b) Reporting, Duties and Powers. During the Employment Period, the
Executive shall report directly to the Board of Directors of CEI (the "Board").
As Chief Executive Officer of CEI, he shall be the highest ranking officer of
CEI with plenary powers of the supervision and direction of the business and
affairs of CEI and its subsidiaries and affiliates.

         (c) End of Employment Period. Upon his Date of Termination, as
hereinafter defined, whether before or at the end of the Employment Period (the
"Retirement Date"), the Executive will retire from all offices held with the
Company and shall be entitled to a pension unreduced for early retirement and
calculated in accordance with Section 3(f) hereof (hereinafter referred to as
"Retirement").

         (d) Board Membership. The Executive shall continue as a member of, and
as Chairman of, the Board on the first day of the Employment Period through the
end of his current term ending with the Annual Meeting of Stockholders in 2001.
Thereafter, the Board shall nominate the Executive for re-election to the Board
throughout the Employment Period in accordance with its customary practice for
nominations to the Board, and shall elect him Chairman of the Board if elected
as a director by the shareholders. At the end of the Employment Period, the
Executive may continue as a member of the Board and be considered for nomination
for reelection to the Board thereafter, in accordance with the Board's customary
practice for nominations and its Retirement Policy.

         (e) Other Positions. In addition to serving as Chairman and Chief
Executive Officer of CEI, the Executive is also presently serving as President
of CEI and as Chairman of the Board and Chief Executive Officer of CECONY. The
Executive agrees to serve, if elected, at no additional compensation in the
position of officer or director of any direct or indirect subsidiary or
affiliate of CEI.

         (f) Attention. During the Employment Period, and excluding any periods
of vacation and sick leave to which the Executive is entitled, the Executive
agrees to devote full attention and time during normal business hours to the
business and affairs of the Company and to use his reasonable best efforts to
perform such responsibilities in a professional manner. It shall not be a
violation of this Agreement for the Executive to (i) serve on corporate, civic
or charitable boards or committees, (ii) deliver lectures, fulfill speaking
engagements or teach at educational institutions and (iii) manage personal
investments, so long as such activities do not significantly interfere with the
performance of the Executive's responsibilities as an officer and director of
the Company in accordance with this Agreement and are in compliance with the
Company's Code of Conduct.

         (g) Location. During the Employment Period, the Company's headquarters
shall be located in New York, New York, and the Executive shall be employed at
such headquarters, except for reasonably required travel on the Company's
business.

         3.   Compensation.
              ------------

         Except as modified by this Agreement, the Executive's compensation
shall be provided in accordance with the Company's standard compensation and
payroll practices as in effect from time to time. The aggregate of Base Salary,
Annual Incentive Compensation and Long-Term Incentive Compensation in paragraphs
(a), (b) and (c) below shall be determined by the Executive Personnel and
Pension Committee of the Board (the "Compensation Committee") based upon
competitive practices for chief executive officers of companies of comparable
size and standing in the same industry.

                                        2



         (a) Base Salary. The annual rate of base salary payable to the
Executive during the Employment Period (the "Annual Base Salary") shall be his
annual rate of base salary approved by the Board, effective as of September 1,
2000. During the Employment Period, the Annual Base Salary shall be reviewed by
the Compensation Committee for possible increase at least annually. Any increase
in Annual Base Salary shall be approved by the Board. Annual Base Salary shall
not be reduced after any such increase, and the term "Annual Base Salary" shall
thereafter refer to the Annual Base Salary as so increased.

         (b) Annual Incentive Compensation. The Board has established and
intends to continue an annual incentive compensation plan for the benefit of the
officers and other key employees of the Company, including the Executive, based
on competitive practices for companies of comparable size and standing in the
same industry. Any performance objectives for the Executive in respect of such
incentive compensation plan will be determined by the Compensation Committee in
accordance with past practices. Currently, the Executive participates in
CECONY's annual incentive plan, the Executive Incentive Plan. In the event that
the Executive's employment ends for any reason, all mandatorily deferred amounts
under such Plan shall be immediately vested and nonforfeitable and paid to him
in accordance with his applicable payment election then in effect.

         (c) Long-Term Incentive Compensation. CEI currently has, and the Board
intends to continue, a long-term incentive compensation program, currently
consisting of a stock option plan, for the benefit of the officers and other key
employees of the Company, including the Executive, based on competitive
practices for companies of comparable size and standing in the same industry. In
addition to stock options, such program may in the future provide for stock
appreciation rights, restricted stock or stock units, performance stock or units
and/or other types of long-term incentive awards. The Board, subject to any
required shareholder approval, will determine the Company's long term incentive
compensation program, and the type and amount of equity and any other long-term
incentive grants provided under the program will be determined by the
Compensation Committee from time to time, provided that any such award shall
provide by its terms that it will either (i) vest and/or become exercisable upon
the Executive's retirement and remain exercisable until the third anniversary of
the Executive's date of retirement or (ii) remain outstanding notwithstanding
the Executive's termination of employment and continue to vest and/or become
exercisable, as though the Executive's employment had not terminated, until the
later of (x) the third anniversary of the Executive's date of retirement and (y)
90 days from the date that a stock option or other award (or portion thereof)
first becomes exercisable, but in no event beyond the original term thereof.

         (d) Stock Award. In consideration of the commitment he will assume
during the Employment Period, the Executive shall be granted an award (the
"Restricted Stock Unit Award") of restricted stock units ("Units") with respect
to 200,000 shares of the Common Shares ($.10 par value) of CEI ("Stock"),
effective as of the Effective Date, in accordance with the following terms and
conditions:

                                        3



         (i) Each Unit shall represent the right, upon vesting, to receive one
     share of Stock. The shares of Stock issuable in respect of the vesting of
     Units shall be shares purchased by the Company or its agent on the open
     market. In the event any of the shares issuable in respect of Units
     pertaining to the Restricted Stock Unit Award shall be forfeited, CEI may
     re-apply such shares for its corporate purposes in its discretion.

         (ii) The Executive's Units shall vest in accordance with the following
     schedule, provided that the Executive has remained continuously employed by
     the Company, or its successor, during the Employment Period through the
     dates indicated below:

     Date       Percentage of Then Outstanding NonVested Units
                (which shall include any dividend equivalents
                credited thereon)

     08/31/2003             50%
     08/31/2004             50%
     08/31/2005             100%

 If, during the Employment Period, the Company terminates the Executive's
 employment for Cause or the Executive terminates his employment without Good
 Reason, including Retirement prior to September 1, 2003, the Executive shall
 forfeit all right to Units that are not then vested as of the Date of
 Termination. If, during the Employment Period, the Company shall terminate the
 Executive's  employment without Cause or the Executive  terminates his
 employment for Good Reason, or the Executive's employment terminates by reason
 of death or Disability, the Executive's Units shall fully and immediately vest
 as of the Date of Termination.

         (iii) Once Units shall vest, CEI shall promptly issue to the Executive
     a certificate for the shares of Stock represented thereby without any
     legend or restriction (other than may be required by law). Prior to
     vesting, Units shall represent an unfunded promise to deliver Stock upon
     vesting thereof.

         (iv) Units may not be sold, assigned, transferred, pledged,
     hypothecated or otherwise disposed of, except by will or the laws of
     descent and distribution. Any attempted sale, assignment, transfer, pledge,
     hypothecation or disposition in contravention of the foregoing shall be
     null and void and of no effect.

                                        4



         (v) Except as otherwise provided herein, the Executive shall have no
     rights of a stockholder with respect to the shares of Stock represented by
     Units, including no right to vote the shares, to receive dividends and
     other distributions thereon and to participate in any change in
     capitalization of CEI. In the event of any change in capitalization
     resulting in the issuance of additional shares to the CEI shareholders, the
     shares of Stock represented by the Executive's Units shall be equitably
     adjusted as determined in good faith by the Compensation Committee. Prior
     to the delivery of shares of Stock upon vesting of Units, at the time of
     each distribution of any regular cash dividend paid by CEI in respect of
     Stock, the Executive shall be entitled to receive a cash payment from the
     Company equal to the aggregate regular cash dividend payment that would
     have been made in respect of the shares of Stock subject to Units that have
     not yet vested, as if the shares subject to such Units had actually been
     delivered to the Executive, provided, that no such payment in respect of
     Units shall be made if, prior to the time such payment is due, the
     Executive's rights with respect to such Units have previously terminated
     under this Agreement. In the event of a dividend payable in shares of Stock
     instead of cash, the Executive shall be entitled to receive on the
     distribution date additional Units in such number that would have been
     received in respect of the shares of Stock represented by Units that have
     not yet vested, as if the shares represented by such Units had actually
     been delivered to the Executive. Prior to the commencement of a calendar
     year, beginning with calendar year 2002, the Executive shall have the right
     to elect to defer the receipt of any dividend equivalent cash payments that
     may become payable to the Executive in the calendar year and to have such
     cash payments invested under the Company's Deferred Income Plan according
     to the terms and conditions of the Deferred Income Plan.

         (vi) Unless the shares of Stock represented by his Units that are to be
     issued to the Executive have been registered pursuant to a registration
     statement under the Securities Act of 1933, prior to receiving such shares
     the Executive shall represent in writing to CEI that such shares are being
     acquired for investment purposes only and not with a view towards the
     further sale or distribution thereof and shall supply CEI with such other
     documentation as may be required by CEI, unless in the opinion of counsel
     to the CEI such representation, agreement or documentation is not necessary
     to comply with the Securities Act of 1933 and the rules and regulations
     thereunder.

         (vii) CEI shall not be required to deliver any shares subject to this
     Restricted Stock Unit Award until the shares have been listed on each
     securities exchange on which shares of Stock are listed or until there has
     been qualification under or compliance with such state and federal laws,
     rules or regulations that CEI may deem applicable. CEI will use its best
     efforts to obtain such listing, qualification and compliance.

         (viii) The Compensation Committee may make such provisions and take
     such steps as it may deem necessary or appropriate for the withholding of
     any taxes that the Company is required by law or regulation of any
     governmental authority, whether federal, state or local, domestic or
     foreign, to withhold in connection with the Restricted Stock Unit Award,
     including, but not limited to (1) withholding delivery of the certificate
     for shares of Stock until the Executive reimburses the Company for the
     amount it is required to withhold with respect to such taxes, (2) the
     canceling of any number of shares of Stock issuable to the Executive in an
     amount necessary to reimburse the Company for the amount it is required to
     so withhold, or (3) withholding the amount due from the Executive's other
     compensation.

         (ix) The Executive may elect to defer all or a portion of the receipt
     of Stock in respect of Units according to terms and conditions established
     by the Compensation Committee for such deferrals.


                                       5




         (e) Employee Benefit Programs. During the Employment Period, (i) the
Executive shall be eligible to participate in all savings and retirement plans,
practices, policies and programs to the same extent as other senior executives
of the Company and (ii) the Executive and/or the Executive's family, as the case
may be, shall be eligible for participation in and shall receive all benefits
under welfare benefit plans, practices, policies and programs provided by the
Company, other than severance plans, practices, policies and programs but
including, without limitation, medical, prescription, dental, disability, salary
continuance, employee life insurance, group life insurance, accidental death and
travel accident insurance plans and programs, and, upon retirement, all
applicable retirement benefit plans to the same extent and subject to the same
terms, conditions, cost-sharing requirements and the like, as other senior
executives of the Company, as such plans may be amended from time to time, and
as supplemented hereby. During the Employment Period, no benefit coverage
available to the Executive and/or to his family under any such plan, practice,
policy or program shall be materially reduced without the prior written consent
of the Executive, unless a substantially equivalent reduction is applied to the
other senior executives of the Company, provided, however, that the exception
for across-the-board reductions shall not apply following a Change in Control
(as defined below) and, further provided, that the Executive shall be provided
during the Employment Period with life insurance providing for a death benefit,
as a multiple of Annual Base Salary, at least equal to the insurance coverage
provided by the Company to the Executive immediately prior to the date hereof,
including the cash value feature. To the extent not inconsistent with the
provisions of this Agreement, the provisions of Section 3(d) of the CECONY
Employment Agreement defined below are incorporated herein by reference.

         (f) Supplemental Retirement Benefits. During the Employment Period, the
Executive shall participate in CECONY's Retirement Plan for Management
Employees, and also in CECONY's Supplemental Retirement Income Plan and such
other supplemental executive retirement plans as may be adopted and amended by
the Company from time to time ("SERPs"), such that the aggregate value of the
retirement benefits that he and his beneficiaries will receive at the end of the
Employment Period under all pension benefit plans of the Company and its
affiliates (whether qualified or not) will not be less than the benefits he
would have received had he continued, through the end of the Employment Period,
to participate in such plans, as in effect immediately before the date hereof
and giving effect to the benefit calculation, deferral, service credits and
payment terms set forth in Section 3(c) of the employment agreement dated May
22, 1990, as amended by Amendment Nos. 1-11, between CECONY and the Executive
(the "CECONY Employment Agreement"), the terms of which Section 3(c) are
incorporated herein by reference. It is agreed that the Restricted Stock Unit
Award and any dividends or other distributions in respect of the Restricted
Stock Unit Award shall not be included in SERP or other any pension calculation.

         (g) Expenses. The Executive is authorized to incur reasonable expenses
in carrying out his duties and responsibilities under this Agreement. The
Company shall promptly reimburse him for all such expenses in accordance with
the policies of the Company in effect from time to time for reimbursement of
expenses for senior executives, and subject to documentation provided by the
Executive in accordance with such Company policies.

         (h) Fringe Benefits. During the Employment Period, the Executive shall
be furnished with such fringe benefits and perquisites as are customary for the
Chairman and Chief Executive Officer of a corporation of the size and nature of,
and in the same industry as, the Company and shall participate in all fringe
benefits and perquisites available to senior executives of the Company on terms
and conditions that are commensurate with his positions and responsibilities at
the Company.

                                        6



         (i) Vacation. During the Employment Period, the Executive shall be
entitled to paid vacation in accordance with Company policy for its most senior
executives as in effect from time to time, but not less than five weeks'
vacation per annum.

         (j) Deferred Compensation. The Executive will retain all of his rights
in any compensation deferred prior to the date hereof in accordance with Section
4 of the CECONY Employment Agreement, including earnings thereon, and CECONY's
Executive Incentive Plan and Deferred Income Plan, including earnings thereon,
and following the date hereof the obligations of CECONY to pay such deferred
compensation at the times and in the manner specified in such Agreement and
Plans will continue; provided that in lieu of the payment and valuation
provisions in Section 4 of the CECONY Employment Agreement, the Executive may
elect to have such deferred compensation invested and paid under CECONY's
Deferred Income Plan. Section 4 of the CECONY Employment Agreement is
incorporated herein by reference, and CEI will cause CECONY to fulfill all its
obligations under such Section 4 in accordance with their terms.

         4.   Termination of Employment.
              -------------------------

         (a) Death or Disability. The Executive's employment shall terminate
automatically upon the Executive's death during the Employment Period. If the
Company determines in good faith that the Disability of the Executive has
occurred during the Employment Period (pursuant to the definition of Disability
set forth below), it may give to the Executive written notice in accordance with
Section 4(b) of this Agreement of its intention to terminate the Executive's
employment. In such event, the Executive's employment with the Company shall
terminate effective on the 30th day after receipt of such notice by the
Executive (the "Disability Effective Date"), provided that, within the 30 days
after such receipt, the Executive shall not have returned to full-time
performance of the Executive's duties. For purposes of this Agreement,
"Disability" means that (i) the Executive has been unable, for the period, if
any, specified in the Company's disability plan for senior executives, but not
less than a period of 180 consecutive days, to perform the Executive's duties
under this Agreement and (ii) a physician selected by the Company or its
insurers, and acceptable to the Executive or the Executive's legal
representative, has determined that the Executive is disabled within the meaning
of the applicable disability plan for senior executives.

         (b)  By the Company.
              --------------

         (i) The Company may terminate the Executive's employment during the
     Employment Period for Cause or without Cause. For purposes of this
     Agreement, "Cause" shall mean (A) willful and continued failure by the
     Executive to substantially perform his duties under this Agreement or (B)
     the conviction of the Executive of a felony or the entering by the
     Executive of a plea of nolo contendere to a felony, in either case having a
     significant adverse effect on the business and affairs of the Company. No
     act or failure to act on the part of the Executive shall be considered
     "willful" unless it is done, or omitted to be done, by the Executive in bad
     faith or without reasonable belief that the Executive's action or omission
     was in the best interests of the Company. Any act or failure to act that is
     based upon authority given pursuant to a resolution duly adopted by the
     Board, or the advice of counsel for the Company, shall be conclusively
     presumed to be done, or omitted to be done, by the Executive in good faith
     and in the best interests of the Company. The Company expressly
     acknowledges that Cause will not exist merely because of a failure of the
     Company or its affiliates to meet budgeted results.

                                        7



         (ii) A termination of the Executive's employment for Cause shall be
     effected in accordance with the following procedures. The Company shall
     give the Executive written notice ("Notice of Termination for Cause") of
     its intention to terminate the Executive's employment for Cause, setting
     forth in reasonable detail the specific conduct of the Executive that it
     considers to constitute Cause and the specific provision(s) of this
     Agreement on which it relies. Such notice shall be given no later than 60
     days after the act or failure (or the last in a series of acts or failures)
     that the Company alleges to constitute Cause. The Executive shall have 30
     days after receiving the Notice of Termination for Cause in which to cure
     such act or failure, to the extent such cure is possible. If the Executive
     fails to cure such act or failure to the reasonable satisfaction of the
     Board, the Company shall give the Executive a second written notice stating
     the date, time and place of a special meeting of the Board called and held
     specifically for the purpose of considering the Executive's termination for
     Cause, which special meeting shall take place not less than ten and not
     more than twenty business days after the Executive receives notice thereof.
     The Executive shall be given an opportunity, together with counsel, to be
     heard at the special meeting of the Board. The Executive's termination for
     Cause shall be effective when and if a resolution is duly adopted at such
     special meeting by the affirmative vote of a majority of the Board stating
     that in the good faith opinion of the Board, the Executive is guilty of the
     conduct described in the Notice of Termination for Cause and that such
     conduct constitutes Cause under this Agreement.

         (c)  Good Reason.
              -----------

         (i) The Executive may terminate his employment for Good Reason or
     without Good Reason. For purpose of this Agreement, "Good Reason" shall
     mean:

         (A) any adverse change in the Executive's titles, authority, duties,
     responsibilities and reporting lines as specified in Sections 2(a) and 2(b)
     of this Agreement, or the assignment to the Executive of any duties or
     responsibilities inconsistent in any respect with those customarily
     associated with the positions to be held by the Executive pursuant to this
     Agreement;

         (B) the failure by the Board to elect the Executive to the positions of
     Chairman and Chief Executive Officer of CEI and of CECONY during the
     Employment Period;

         (C) the failure by the Board to nominate the Executive for reelection
     to the Board at any annual meeting of CEI's shareholders during the
     Employment Period at which the Executive's term as a director is scheduled
     to expire;

                                        8



         (D) the appointment, without the Executive's prior written consent, at
     any time during the Employment Period of any person other than the
     Executive to (x) the positions specified in Sections 2(a) and 2(e) or (y)
     any other position or title conferring similar status or authority;

         (E) any reduction in the Executive's salary, target annual bonus,
     target long-term incentive or Retirement benefit;

         (F) any requirement by the Company that the Executive's services be
     rendered primarily at a location or locations other than that provided for
     in Section 2(g);

         (G) any purported termination of the Executive's employment by the
     Company for a reason or in a manner not expressly permitted by this
     Agreement;

         (H) any failure by CEI to comply with Section 10(c) of this Agreement;
     or

         (I) any other material breach of this Agreement by the Company that
     either is not taken in good faith or, even if taken in good faith, is not
     remedied by the Company promptly after receipt of notice thereof from the
     Executive.

Following a Change in Control that is recommended to the Board by the Executive,
Sections 4(c)(i) (A), (B), (C) and (D) shall not permit the Executive to
terminate his employment for Good Reason so long as during the remainder of the
Employment Period, the Board nominates the Executive as a director of the
surviving parent corporation, his office with the surviving parent corporation
is Chairman, Vice Chairman or President, and his executive position with the
surviving parent corporation is Chief Executive Officer or Chief Operating
Officer; and the provisions of Sections 2(a), (b) and (d) shall be deemed
modified to reflect such offices, positions and duties as are so held by the
Executive.

Following a Change in Control, the Executive's determination that an act or
failure to act constitutes Good Reason shall be conclusively presumed to be
valid unless such determination is decided to be unreasonable by an arbitrator
pursuant to Section 9.

         (ii) A termination of employment by the Executive for Good Reason shall
     be effectuated by giving the Company written notice ("Notice of Termination
     for Good Reason") of the termination, setting forth in reasonable detail
     the specific acts or omissions of the Company that constitute Good Reason
     and the specific provision(s) of this Agreement on which the Executive
     relies. Unless the Board determines otherwise, a Notice of Termination for
     Good Reason by the Executive must be made within 60 days after the
     Executive first has actual knowledge of the act or omission (or the last in
     a series of acts or omissions) that the Executive alleges to constitute
     Good Reason, and the Company shall have 30 days from the receipt of such
     Notice of Termination for Good Reason to cure the conduct cited therein. A
     termination of employment by the Executive for Good Reason shall be
     effective on the final day of such 30-day cure period unless prior to such
     time the Company has cured the specific conduct asserted by the Executive
     to constitute Good Reason to the reasonable satisfaction of the Executive
     (unless the notice sets forth a later date (which date shall in no event be
     later than 30 days after the notice is given) as of which such termination
     shall be effective).

                                        9



         (iii) A termination of the Executive's employment by the Executive
     without Good Reason shall be effected by giving the Company written notice
     specifying the effective date of termination.

         (d) Date of Termination. The "Date of Termination" means the date of
the Executive's death, the Disability Effective Date, the date on which the
termination of the Executive's employment by the Company for Cause or without
Cause or by the Executive for Good Reason is effective, or the effective date
specified in a notice of a termination of employment without Good Reason from
the Executive to the Company, or Retirement, as the case may be.

         5. Obligations of the Company upon Termination.
            --------------------------------------------

         (a) Good Reason; Other Than for Cause, Death or Disability. If, during
the Employment Period, the Company shall terminate the Executive's employment
other than for Cause, death or Disability, or the Executive shall terminate his
employment for Good Reason:

         (i) the Company shall pay to the Executive in a lump sum in cash,
     within 15 days after the Date of Termination, the aggregate of the amounts
     set forth in clauses A, B and C below:

         A.    The sum of:

               (1)  the Executive's Annual Base Salary through the Date of
                    Termination;

               (2)  the product of (x) the "target" annual bonus as in effect
                    under the Company's annual incentive plan for the calendar
                    year in which occurs the Date of Termination or, if no such
                    target annual bonus has been established for the Executive
                    for that year, for the immediately preceding calendar year
                    (the "Target Bonus") and (y) a fraction, the numerator of
                    which is the number of days in the current calendar year
                    through the Date of Termination, and the denominator of
                    which is 365; and

               (3)  any accrued vacation pay;

          in each case to the extent not theretofore paid (the sum of
          the amounts described in clauses (1), (2) and (3) shall be
          hereinafter referred to as the "Accrued Obligations");

                                       10



          B.   the amount equal to the product of (1) two and (2) the sum of (x)
               the Executive's Annual Base Salary and (y) the Target Bonus; and

          C.   an amount equal to the excess of (1) the actuarial equivalent of
               the benefit under the Company's applicable qualified defined
               benefit retirement plan in which the Executive is participating
               immediately prior to his Date of Termination (the "Retirement
               Plan") (utilizing the rate used to determine lump sums and, to
               the extent applicable, other actuarial assumptions no less
               favorable to the Executive than those in effect under the
               Retirement Plan immediately prior to the date of this Agreement),
               any nonqualified defined benefit SERPs in which the Executive
               participates and, to the extent applicable, any other defined
               benefit retirement arrangement between the Executive and the
               Company ("Other Pension Benefits") which the Executive would
               receive if the Executive's employment continued for two
               additional years beyond the Date of Termination, assuming for
               this purpose that all accrued benefits are fully vested, and,
               assuming that the Executive's compensation for such deemed
               additional period was the Executive's Annual Base Salary as in
               effect immediately prior to the Date of Termination and assuming
               a bonus in each year during such deemed additional period equal
               to the Target Bonus, over (2) the actuarial equivalent of the
               Executive's actual benefit (paid or payable), if any, under the
               Retirement Plan, the nonqualified defined benefit SERPs and Other
               Pension Benefits as of the Date of Termination (utilizing the
               rate used to determine lump sums and, to the extent applicable,
               other actuarial assumptions no less favorable to the Executive
               than those in effect under the Retirement Plan immediately prior
               to the date of this Agreement).


         (ii) the Restricted Stock Unit Award shall vest in accordance with
     Section 3(d)(ii) above;

         (iii) any stock awards (other than the Restricted Stock Unit Award),
     stock options, stock appreciation rights or other equity-based awards that
     were outstanding immediately prior to the Date of Termination ("Prior
     Equity Awards") shall vest as of the Date of Termination and shall remain
     outstanding and shall be exercisable as though the Executive's employment
     had not terminated until the later of (x) the third anniversary of the Date
     of Termination and (y) 90 days from the date that the Prior Equity Award
     (or portion thereof) first becomes exercisable, but in no event beyond the
     end of the original term thereof, and the Company shall take all such
     actions as may be necessary to effectuate the foregoing;

                                       11



         (iv) for two years after the Executive's Date of Termination or such
     longer period as may be provided by the terms of the appropriate plan,
     program, practice or policy, the Company shall continue benefits to the
     Executive and/or the Executive's family at least equal to those which would
     have been provided to them in accordance with the medical, prescription,
     dental and life insurance plans, programs, practices and policies described
     in Section 3(e) of this Agreement if the Executive's employment had not
     been terminated or, if more favorable to the Executive, as in effect
     generally at any time thereafter with respect to other peer executives of
     the Company and its affiliated companies and their families, provided
     however, that if the Executive becomes re-employed with another employer
     and is eligible to receive medical, prescription or dental benefits under
     another employer-provided plan, the medical, prescription and dental
     benefits described herein shall be secondary to those provided under such
     other plan during such applicable period of eligibility. The Executive's
     right to continued eligibility under the Company's medical, prescription
     and dental plans under Section 4980B of the Internal Revenue Code of 1986,
     as amended (the "Code"), shall commence at the end of the period described
     hereinabove in this clause (iv). For purposes of determining eligibility
     (but not time of commencement of benefits) of the Executive for retiree
     benefits pursuant to such plans, practices, programs and policies, the
     Executive shall be considered to have remained employed until two years
     after the Date of Termination and to have retired on the last day of such
     period;

         (v) any compensation previously deferred (other than pursuant to a
     tax-qualified plan) by or on behalf of the Executive (together with any
     accrued interest or earnings thereon), whether or not then vested, shall
     become vested on the Date of Termination and shall be paid in accordance
     with the terms of the plan, policy or practice under which it was deferred;

         (vi) the Company shall, at its sole expense as incurred, provide the
     Executive with outplacement services suitable to the Executive's position
     for a period not to exceed two years or until the Executive reaches age 65,
     whichever shall first occur, with a nationally recognized outplacement
     firm; and,

         (vii) to the extent not theretofore paid or provided, the Company shall
     timely pay or provide to the Executive any other vested amounts or vested
     benefits required to be paid or provided or which the Executive is entitled
     to receive under any plan, program, policy, practice, contract or agreement
     of the Company and its affiliated companies (other than medical,
     prescription or dental benefits if the Executive is eligible for such
     benefits to be provided by a subsequent employer), including earned but
     unpaid stock and similar compensation but excluding any severance plan or
     policy (such other amounts and benefits shall be hereinafter referred to as
     the "Other Benefits").

                                       12



         (b) Cause; Other than for Good Reason. If the Executive's employment
shall be terminated for Cause during the Employment Period, or if the Executive
voluntarily terminates employment during the Employment Period, excluding a
resignation for Good Reason, this Agreement shall terminate without further
obligations to the Executive other than for amounts described in Sections
5(a)(i)(A)(1) and 5(a)(i)(A)(3) and the timely payment or provision of Other
Benefits (unless the terms of such Other Benefits provide for forfeiture upon
termination for Cause or termination for other than Good Reason). In such case,
all such amounts shall be paid to the Executive in a lump sum within 30 days of
the Date of Termination.

         (c) Death. If the Executive's employment terminates by reason of the
Executive's death during the Employment Period, all Accrued Obligations as of
the time of death shall be paid to the Executive's estate or beneficiary, as
applicable, in a lump sum in cash within 30 days of the Date of Termination and
the Executive's estate or beneficiary shall be entitled to any Other Benefits in
accordance with their terms. In addition, the Restricted Stock Unit Award shall
vest in accordance with Section 3(d)(ii) above. Any Prior Equity Awards shall
vest and/or become exercisable, as the case may be, as of the Date of
Termination and the Executive's estate or beneficiary, as the case may be, shall
have the right to exercise any such stock option, stock appreciation right or
other exercisable equity-based award until the earlier of (A) one year from the
Date of Termination (or such longer period as may be provided under the terms of
any such stock option, stock appreciation right or other equity-based award) and
(B) the normal expiration date of such stock option, stock appreciation right or
other equity-based award.

         (d) Disability. If the Executive's employment is terminated by reason
of Disability during the Employment Period, all Accrued Obligations shall be
paid to the Executive in a lump sum in cash within 30 days of the Date of
Termination, and the Executive shall be entitled to any Other Benefits in
accordance with their terms. In addition, the Restricted Stock Unit Award shall
vest in accordance with Section 3(d)(ii) above. Any Prior Equity Awards shall
vest immediately and/or become exercisable, as the case may be, and the
Executive shall have the right to exercise any such stock option, stock
appreciation right or other exercisable equity-based award until the earlier of
(A) one year from the Date of Termination (or such longer period as may be
provided under the terms of any such stock option, stock appreciation right or
other equity-based award) and (B) the normal expiration date of such stock
option, stock appreciation right or other equity-based award.

         (e) Retirement. If the Executive's employment terminates at the
expiration of the Employment Period (or at any earlier date at which the
Executive elects to retire under any retirement plan maintained by the Company),
the Executive shall be paid the Accrued Obligations in a lump sum in cash within
30 days of the Date of Termination and the Executive shall be entitled to any
Other Benefits in accordance with their terms. Upon the Executive's retirement,
unless the Board otherwise determines, there shall be no acceleration of vesting
of any portion of the Restricted Stock Unit Award not yet earned. The Executive
agrees not to retire (except for any Disability) prior to September 1, 2003.

         6.   Change in Control.
              -----------------

         (a) Benefits Upon a Change in Control. Upon the occurrence of a Change
in Control during the Employment Period, the Restricted Stock Unit Award shall
continue in effect and vest (or be forfeited) in accordance with provisions of
this Agreement as though no Change in Control had occurred, except that, as
appropriate, the shares of Stock represented by the Restricted Stock Unit Award
shall be treated the same as all other shares of Stock of CEI in any transaction
constituting a Change in Control. The Executive's rights upon a termination of
employment that occurs following a Change in Control shall be as specified in
Section 5 generally for termination of employment, except (i) the amount payable
under Section 5(a)(i)(B) shall be three times the sum of (x) the Executive's
Annual Base Salary and (y) the Target Bonus; (ii) the amount payable under
Section 5(a)(i)(C) shall be determined as if the Executive had remained employed
for three additional years after the Date of Termination and (iii) the benefits
under Section 5(a)(iv) shall be provided for three years after the Date of
Termination and the Executive's eligibility (but not the time of commencement of
such benefits) for retiree benefits pursuant to such plans, practices, programs
and policies shall be determined as if the Executive had remained employed until
three years after the Date of Termination and to have retired on the last day of
such period.

                                       13



         (b) Definition. For purposes of this Agreement, a "Change in Control"
shall mean the occurrence of any of the following events after the date of this
Agreement:

         (i) any "person" (within the meaning of Section 13(d) of the Securities
     Exchange Act of 1934, as amended (the "Exchange Act") is or becomes the
     beneficial owner within the meaning of Rule 13d-3 under the Exchange Act (a
     "Beneficial Owner"), directly or indirectly, of securities of CEI (not
     including in the securities beneficially owned by such person any
     securities acquired directly from CEI or its affiliates) representing 20%
     or more of the combined voting power of CEI's then outstanding securities,
     excluding any person who becomes such a Beneficial Owner in connection with
     a transaction described in clause (A) of paragraph (iii) below; or

         (ii) the following individuals cease for any reason to constitute a
     majority of the number of directors of CEI then serving: individuals who,
     on the date of this Agreement, constitute the Board and any new director
     (other than a director whose initial assumption of office is in connection
     with an actual or threatened election contest, including but not limited to
     a consent solicitation, relating to the election of directors of CEI) whose
     appointment or election by the Board or nomination for election by CEI's
     stockholders was approved or recommended by a vote of at least two-thirds
     (2/3) of the directors then still in office who either were directors on
     the date hereof or whose appointment, election or nomination for election
     was previously so approved or recommended; or

         (iii) the shareholders of CEI approve or there is consummated a merger
     or consolidation of CEI or any direct or indirect wholly-owned subsidiary
     of CEI with any other corporation, other than (A) a merger or consolidation
     which would result in the voting securities of CEI outstanding immediately
     prior to such merger or consolidation continuing to represent (either by
     remaining outstanding or by being converted into voting securities of the
     surviving entity or any parent thereof), in combination with the ownership
     of any trustee or other fiduciary holding securities under an employee
     benefit plan of CEI or any subsidiary of CEI, at least 65% of the combined
     voting power of the securities of CEI or such surviving entity or any
     parent thereof outstanding immediately after such merger or consolidation,
     or (B) a merger or consolidation effected to implement a recapitalization
     of CEI (or similar transaction) in which no person is or becomes the
     Beneficial Owner, directly or indirectly, of securities of CEI representing
     20% or more of the combined voting power of CEI's then outstanding
     securities; or

                                       14



         (iv) the shareholders of CEI approve a plan of complete liquidation or
     dissolution of CEI or there is consummated an agreement for the sale or
     disposition by CEI of all or substantially all of CEI's assets, other than
     a sale or disposition by CEI of all or substantially all of CEI's assets to
     an entity, at least 75% of the combined voting power of the voting
     securities of which are owned by stockholders of CEI in substantially the
     same proportions as their ownership of CEI immediately prior to such sale.

Notwithstanding the foregoing, a "Change in Control" shall not be deemed to have
occurred by virtue of the consummation of any transaction or series of
integrated transactions immediately following which the record holders of the
common stock of CEI immediately prior to such transaction or series of
transactions continue to have substantially the same proportionate ownership in
an entity which owns all or substantially all of the assets of CEI immediately
following such transaction or series of transactions.

         7.    Confidential Information; No Competition.
              ----------------------------------------

         (a) The Executive shall hold in a fiduciary capacity for the benefit of
the Company all confidential information, knowledge or data (defined below)
relating to the Company or any of its affiliates or subsidiaries, and their
respective businesses, which shall have been obtained by the Executive during
the Executive's employment by the Company or any of its affiliated companies and
which shall not be or become public knowledge (other than by acts by the
Executive or representatives of the Executive in violation of this Agreement).
Upon termination of the Executive's employment, he shall return to the Company
all Company information. After termination of the Executive's employment with
the Company, the Executive shall not, without the prior written consent of the
Company or as may otherwise be required by law or legal process, communicate or
divulge any such information, knowledge or data to anyone other than the Company
and those designated by it, except (x) otherwise publicly available information,
or (y) as may be necessary to enforce his rights under this Agreement or
necessary to defend himself against a claim asserted directly or indirectly by
the Company or its affiliates. Unless and until a determination has been made in
accordance with Section 7(d) or Section 9 hereof that the Executive has violated
this Section 7, an asserted violation of the provisions of this Section 7 shall
not constitute a basis for deferring or withholding any amounts otherwise
payable to the Executive under this Agreement.

         (b) As used herein, the term "confidential information, knowledge or
data" means all trade secrets, proprietary and confidential business information
belonging to, used by, or in the possession of the Company or any of its
affiliates and subsidiaries, including but not limited to information, knowledge
or data related to business strategies, plans and financial information,
mergers, acquisitions or consolidations, purchase or sale of property, leasing,
pricing, sales programs or tactics, actual or past sellers, purchasers, lessees,
lessors or customers, those with whom the Company or its affiliates and
subsidiaries has begun negotiations for new business, costs, employee
compensation, marketing and development plans, inventions and technology,
whether such confidential information, knowledge or data is oral, written or
electronically recorded or stored, except information in the public domain,
information known by the Executive prior to employment with CECONY, and
information received by the Executive from sources other than the Company or its
affiliates and subsidiaries, without obligation of confidentiality.

                                       15



         (c) The confidential knowledge, information and data, as defined in the
previous paragraph, gained in the performance of the Executive's duties
hereunder may be valuable to those who are now, or might become, competitors of
the Company or its affiliates and subsidiaries. Accordingly, the Executive
agrees that he will not, for the period of two years from Date of Termination,
directly own, manage, operate, join, control, become employed by, consult to or
participate in the ownership, management, or control of any business which is in
direct competition with any business maintained by the Company and/or its
affiliates and subsidiaries as of the Date of Termination. Further, the
Executive agrees that, for two years following the Date of Termination, he will
not, directly or indirectly, solicit or hire, or encourage the solicitation or
hiring of any person who was a managerial or higher level employee of the
Company at any time during the term of the Executive's employment by the Company
by any employer other than the Company for any position as an employee,
independent contractor, consultant or otherwise. The foregoing agreement of the
Executive shall not apply to any person after 6 months have elapsed subsequent
to the date on which such person's employment by the Company has terminated. In
the case of any such prohibited activity, the Executive shall not be entitled to
post-employment payments under this Agreement (including any unpaid installments
of the Restricted Stock Unit Award), and the Executive shall return or repay to
the Company a portion of any installments of the Restricted Stock Unit Award
that have vested in accordance with Section 3(d) (ii) during the two year period
immediately preceding such prohibited activity which is equal to the amount of
such installments paid within such two year period times a fraction, the
numerator of which is the number of months from the commencement of such
activity to the date that is 24 months after the Date of Termination and the
denominator of which is 24. This Section 7(c) shall be inapplicable upon the
occurrence of a Change in Control.

         (d) In the event of a breach by the Executive of any of the agreements
set forth in Paragraphs (a), (b) or (c) above, it is agreed that the Company
shall suffer irreparable harm for which money damages are not an adequate
remedy, and that, in the event of such breach, the Company shall be entitled to
obtain an order of a court of competent jurisdiction for equitable relief from
such breach, including, but not limited to, temporary restraining orders and
preliminary and/or permanent injunctions against the breach of such agreements
by the Executive. In the event that the Company should initiate any legal action
for the breach or enforcement of any of the provisions contained in this Section
7 and the Company does not prevail in such action, the Company shall promptly
reimburse the Executive the full amount of any court costs, filing fees,
attorney's fees which the Executive reasonably incurs in defending such action,
and any loss of income during the period of such litigation.

          8.    Full Settlement.
                ---------------

         (a) No Duty to Mitigate; No Reduction. Except as provided in Section
7(c), and except to the extent that a Court under Section 7(d) or an arbitrator
appointed under Section 9 shall determine to permit an offset in respect of a
violation by the Executive of his obligations under Section 7, the Company's
obligation to make the payments provided for in this Agreement and otherwise to
perform its obligations hereunder shall not be affected by any set-off,
counterclaim, recoupment, defense or other claim, right or action which the
Company may have against the Executive or others. In no event shall the
Executive be obligated to seek other employment or take any other action by way
of mitigation of the amounts payable to the Executive under any of the
provisions of this Agreement and, except as specifically provided in Section
5(a)(iv) and Section 5(a)(vii) with respect to certain medical and dental
benefits, such amounts shall not be reduced whether or not the Executive obtains
other employment.

                                       16



         (b) Non-exclusivity of Rights. Except as provided in Section 7(c),
nothing in the Agreement shall prevent or limit the Executive's continuing or
future participation in any plan, program, policy or practice provided by the
Company or any of its affiliated companies for which the Executive may qualify,
nor, subject to Section 12(g), shall anything in this Agreement limit or
otherwise affect such rights as the Executive may have under any contract or
agreement with the Company or any or its affiliated companies. Vested benefits
and other amounts that the Executive is otherwise entitled to receive under the
incentive compensation plans referred to in Section 3(c), the SERPs, or any
other plan, policy, practice or program of, or any contract or agreement with,
the Company or any of its affiliated companies on or after the Date of
Termination shall be payable in accordance with the terms of each such plan,
policy, practice, program, contract or agreement, as the case may be, except as
explicitly modified by this Agreement.

          9.    Disputes.
                --------

         Except with respect to equitable relief provided for in Section 7(d),
any dispute about the validity, interpretation, effect or alleged violation of
this Agreement shall be resolved by confidential binding arbitration to be held
in New York, New York, in accordance with the Commercial Arbitration Rules of
the American Arbitration Association. Judgment upon the award rendered by the
arbitrator(s) may be entered in any court having jurisdiction thereover. All
costs and expenses incurred by the Company or the Executive or the Executive's
beneficiaries in connection with any such controversy or dispute, including
without limitation reasonable attorney's fees, shall be borne by the Company as
incurred, except that the Executive shall be responsible for any such costs and
expenses incurred in connection with any claim determined by the arbitrator(s)
to have been without reasonable basis or to have been brought in bad faith. The
Executive shall be entitled to interest at the applicable Federal rate provided
for in Section 7872(f)(2)(A) of the Code, on any delayed payment which the
arbitrator(s) determine he was entitled to under this Agreement.

         10.    Successors.
                ----------

         (a) No Assignment by Executive. This Agreement is personal to the
Executive and without the prior written consent of CEI shall not be assignable
by the Executive otherwise than by will or the laws of descent and distribution.
This Agreement shall inure to the benefit of and be binding upon and enforceable
by the Executive's legal representatives.

         (b) Successors to CEI. This Agreement shall inure to the benefit of and
be binding upon and enforceable by CEI and its successors and assigns.

                                       17



         (c) Performance by a Successor to CEI. CEI will require any successor
(whether direct or indirect, by purchase, merger, consolidation or otherwise) to
all or substantially all of the business and/or assets of CEI to assume
expressly and agree to perform this Agreement in the same manner and to the same
extent that CEI would be required to perform it if no such succession had taken
place. As used in this Agreement, "CEI" shall mean CEI as hereinbefore defined
and any successor to its business and/or assets as aforesaid which assumes and
agrees to perform this Agreement by operation of law, or otherwise, including
New CEI which is to be established upon consummation of the merger with
Northeast Utilities pursuant to the Amended and Restated Agreement and Plan of
Merger, dated as of January 11, 2000, among CEI, Northeast Utilities, CWB
Holdings, Inc. and N Acquisition LLC if such transaction is consummated.

         11.    Certain Additional Payments by the Company.
                ------------------------------------------

         (a) Anything in this Agreement to the contrary notwithstanding, in the
event it shall be determined that any payment or distribution by the Company to
or for the benefit of the Executive (whether paid or payable or distributed or
distributable pursuant to the terms of this Agreement or otherwise, but
determined without regard to any additional payments required under this Section
11) (a "Payment") would be subject to the excise tax imposed by Section 4999 of
the Code or any interest or penalties are incurred by the Executive with respect
to such excise tax (such excise tax, together with any such interest and
penalties, are hereinafter collectively referred to as the "Excise Tax"), then
the Executive shall be entitled to receive an additional payment (a "Gross-Up
Payment") in an amount such that after payment by the Executive of all taxes
(including any interest or penalties imposed with respect to such taxes),
including, without limitation, any income and employment taxes (and any interest
and penalties imposed with respect thereto) and Excise Tax imposed upon the
Gross-Up Payment, the Executive retains an amount of the Gross-Up Payment equal
to the Excise Tax imposed upon the Payments.

         (b) Subject to the provisions of Section 11(c), all determinations
required to be made under this Section 11, including whether and when a Gross-Up
Payment is required and the amount of such Gross-Up Payment and the assumptions
to be utilized in arriving at such determination, shall be made by the Company's
independent auditors or such other certified public accounting firm as may be
jointly designated by the Executive and the Company (the "Accounting Firm"),
which shall provide detailed supporting calculations both to the Company and the
Executive. All fees and expenses of the Accounting Firm shall be borne solely by
the Company. Any Gross-Up Payment, as determined pursuant to this Section 11,
shall be paid by the Company to the Executive within 15 days of the receipt of
the Accounting Firm's determination. Any determination by the Accounting Firm
shall be binding upon the Company and the Executive. As a result of the
uncertainty in the application of Section 4999 of the Code at the time of the
initial determination by the Accounting Firm hereunder, it is possible that
Gross-Up Payments which will not have been made by the Company should have been
made ("Underpayment"), consistent with the calculations required to be made
hereunder. In the event that the Company exhausts its remedies pursuant to
Section 11(c) and the Executive thereafter is required to make a payment of any
Excise Tax, the Accounting Firm shall determine the amount of the Underpayment
that has occurred and any such Underpayment shall be promptly paid by the
Company to or for the benefit of the Executive.

                                       18



         (c) The Executive shall notify the Company in writing of any claim by
the Internal Revenue Service that, if successful, would require the payment by
the Company of the Gross-Up Payment. Such notification shall be given as soon as
practicable but no later than ten business days after the Executive is informed
in writing of such claim and shall apprise the Company of the nature of such
claim and the date on which such claim is requested to be paid. The Executive
shall not pay such claim prior to the expiration of the 30-day period following
the date on which he gives such notice to the Company (or such shorter period
ending on the date that any payment of taxes with respect to such claim is due).
If the Company notifies the Executive in writing prior to the expiration of such
period that it desires to contest such claim, the Executive shall:

         (i) give the Company any information reasonably requested by the
     Company relating to such claim,

         (ii) take such action in connection with contesting such claim as the
     Company shall reasonably request in writing from time to time, including,
     without limitation, accepting legal representation with respect to such
     claim by an attorney reasonably selected by the Company,

         (iii) cooperate with the Company in good faith in order effectively to
     contest such claim, and

         (iv) permit the Company to participate in any proceedings relating to
     such claim;

provided however, that the Company shall bear and pay directly all costs and
expenses (including additional interest and penalties) incurred in connection
with such contest and shall indemnify and hold the Executive harmless, on an
after-tax basis, for any Excise Tax or income tax (including interest and
penalties with respect thereto) imposed as a result of such representation and
payment of costs and expenses. Without limitation on the foregoing provisions of
this Section 11(c), the Company shall control all proceedings taken in
connection with such contest and, at its sole option, may pursue or forgo any
and all administrative appeals, proceedings, hearings and conferences with the
taxing authority in respect of such claim and may, at its sole option, either
direct the Executive to pay the tax claimed and sue for a refund or contest the
claim in any permissible manner, and the Executive agrees to prosecute such
contest to a determination before any administrative tribunal, in a court of
initial jurisdiction and in one or more appellate courts, as the Company shall
determine; provided however, that if the Company directs the Executive to pay
such claim and sue for a refund, the Company shall advance the amount of such
payment to the Executive, on an interest-free basis and shall indemnify and hold
the Executive harmless, on an after-tax basis, from any Excise Tax or income tax
(including interest or penalties with respect thereto) imposed with respect to
such advance or with respect to any imputed income with respect to such advance;
and further provided that any extension of the statute of limitations relating
to payment of taxes for the taxable year of the Executive with respect to which
such contested amount is claimed to be due is limited solely to such contested
amount. Furthermore, the Company's control of the contest shall be limited to
issues with respect to which a Gross-Up Payment would be payable hereunder and
the Executive shall be entitled to settle or contest, as the case may be, any
other issue raised by the Internal Revenue Service or any other taxing
authority.

                                       19



         (d) If, after the receipt by the Executive of an amount advanced by the
Company pursuant to Section 11(c), the Executive becomes entitled to receive any
refund with respect to such claim, the Executive shall (subject to the Company's
complying with the requirements of Section 11(c)) promptly pay to the Company
the amount of such refund (together with any interest paid or credited thereon
after taxes applicable thereto). If, after the receipt by the Executive of an
amount advanced by the Company pursuant to Section 11(c), a determination is
made that the Executive shall not be entitled to any refund with respect to such
claim and the Company does not notify the Executive in writing of its intent to
contest such denial of refund prior to the expiration of 30 days after such
determination, then such advance shall be forgiven and shall not be required to
be repaid and the amount of such advance shall offset, to the extent thereof,
the amount of Gross-Up Payment required to be paid.

         12.    Miscellaneous.
                -------------

         (a) Governing Law. This Agreement shall be governed by and construed in
accordance with the laws of the State of New York applicable to agreements
executed and performed entirely therein. The captions of this Agreement are not
part of the provisions hereof and shall have no force or effect.

         (b) Notices. All notices and other communications hereunder shall be in
writing and shall be given by hand delivery to the other party or by registered
or certified mail, return receipt requested, postage prepaid, addressed as
follows:

         If to the Executive:    4 Irving Place
                                 New York, NY 10003


         If to the Company:     4 Irving Place
                                New York, NY 10003,
                                Attention: General Counsel

or to such other address as either party shall have furnished to the other in
writing in accordance herewith. Notice and communications shall be effective
when actually received by the addressee.

         (c) Invalidity. The invalidity or unenforceability of any provision of
this Agreement shall not affect the validity or enforceability of any other
provision of this Agreement. If any provision of this Agreement shall be held
invalid or unenforceable in part, the remaining portion of such provision,
together with all other provisions of this Agreement, shall remain valid and
enforceable and continue in full force and effect to the fullest extent
consistent with law.

         (d) Tax Withholding. Notwithstanding any other provision of this
Agreement, the Company may withhold from any amounts payable under this
Agreement such Federal, state, local or foreign taxes as shall be required to be
withheld pursuant to any applicable law or regulation.

         (e) Failure to Assert Rights. Except as provided in Section 4(b)(ii)
and 4(c)(ii), the Executive's or the Company's failure to insist upon strict
compliance with any provisions of, or to assert any right under, this Agreement
shall not be deemed to be a waiver of such provision or right or of any other
provision of or right under this Agreement.

                                       20



         (f) No Alienation. The rights and benefits of the Executive under this
Agreement may not be anticipated, assigned, alienated or subject to attachment,
garnishment, levy, execution or other legal or equitable process except as
required by law. Any attempt by the Executive to anticipate, alienate, assign,
sell, transfer, pledge, encumber or charge the same shall be void. Payments
hereunder shall not be considered assets of the Executive in the event of
insolvency or bankruptcy.

         (g) Entire Agreement. This Employment Agreement represents the complete
agreement between the Executive and the Company relating to employment and
termination and may not be altered or changed except by written agreement
executed by the parties hereto or their respective successors or legal
representatives. This Agreement supersedes all prior agreements and other
understandings between the parties with respect to the subject matter herein,
including the CECONY Employment Agreement, except for the portions thereof which
have been incorporated by reference in this Agreement.

         IN WITNESS WHEREOF, the Executive and, pursuant to due authorization
from its Board of Directors, the Company have caused this Agreement to be
executed as of the day and year first above written.

                            CONSOLIDATED EDISON, INC.



                            By: E. Virgil Conway
                                E. Virgil Conway, Chairman
                                   Executive Personnel and Pension Committee

                            By: Eugene R. McGrath
                                Eugene R. McGrath

                                       21



                              EMPLOYMENT AGREEMENT

         AGREEMENT by and between Consolidated Edison, Inc., a New York
Corporation ("CEI"), and Joan S. Freilich (the "Executive"), dated as of
September 1, 2000.

         WHEREAS, the Executive is currently serving as Executive Vice President
and Chief Financial Officer of CEI, and as Executive Vice President and Chief
Financial Officer of its subsidiary, Consolidated Edison Company of New York,
Inc. ("CECONY"), a New York corporation, (CEI and its subsidiaries and
affiliates hereinafter collectively referred to as the "Company");

         WHEREAS, the Executive is willing to commit herself to be employed by
the Company on the terms and conditions herein set forth; and

         WHEREAS, the parties desire to enter into this Agreement setting forth
the terms and conditions for the employment relationship of the Executive with
the Company during the Employment Period (as hereinafter defined).

         NOW, THEREFORE, IN CONSIDERATION of the mutual premises, covenants and
agreements set forth below, it is hereby agreed as follows:

         1.  General.
             -------

            (a) Employment. CEI agrees to cause its subsidiaries and affiliates
to employ the Executive in a senior executive position, and the Executive agrees
to be so employed, in accordance with the terms and provisions of this Agreement
during the Employment Period.

            (b) Term. The term of the Executive's employment under this
Agreement (the "Initial Employment Period") shall commence as of the date hereof
(the "Effective Date") and shall continue until August 31, 2005. The Initial
Employment Period shall be automatically extended without further action of
either party for additional one year periods, unless written notice of either
party's intention not to extend has been given to the other party at least six
months prior to the expiration of the Initial Employment Period or any such one
year extension. Collectively, the Initial Employment Period and each such
extension (if any) are herein referred to the "Employment Period".



         2.  Position, Duties and Powers of the Executive.
             --------------------------------------------

            (a) Position. During the Employment Period, the Executive shall
serve as Executive Vice President and Chief Financial Officer of CEI and as
Executive Vice President and Chief Financial Officer of CECONY or in such other
senior executive positions in CEI or its subsidiaries or affiliates to which the
Executive may be elected or appointed by the Board or designated or assigned by
the chief executive officer of CEI.

            (b) Reporting, Duties and Powers. During the Employment Period, the
Executive shall report directly to chief executive officer of CEI or to such
other person or position as may be designated by the Board or the chief
executive officer of CEI.

            (c) Board Membership. The Executive shall continue as a member of
the Board on the first day of the Employment Period through the end of her
current term ending with the Annual Meeting of Stockholders in 2001. Thereafter,
the Board shall nominate the Executive for re-election to the Board throughout
the Employment Period in accordance with its customary practice for nominations
to the Board.

            (d) Other Positions. The Executive agrees to serve, if elected, at
no additional compensation in the position of officer or director of any direct
or indirect subsidiary or affiliate of CEI.

            (e) Attention. During the Employment Period, and excluding any
periods of vacation and sick leave to which the Executive is entitled, the
Executive agrees to devote full attention and time during normal business hours
to the business and affairs of the Company and to use her reasonable best
efforts to perform such responsibilities in a professional manner. It shall not
be a violation of this Agreement for the Executive to (i) serve on corporate,
civic or charitable boards or committees, (ii) deliver lectures, fulfill
speaking engagements or teach at educational institutions and (iii) manage
personal investments, so long as such activities do not significantly interfere
with the performance of the Executive's responsibilities as an officer and
director of the Company in accordance with this Agreement and are in compliance
with the Company's Code of Conduct.

            (f) Location. During the Employment Period, the Company's
headquarters shall be located in New York, New York, and the Executive shall be
employed at such headquarters or at any other office or location designated by
the Board or the chief executive officer of CEI, except for reasonably required
travel on the Company's business.

                                        2



         3.  Compensation.
             ------------

             Except as modified by this Agreement, the Executive's compensation
shall be provided in accordance with the Company's standard compensation and
payroll practices as in effect from time to time. The aggregate of Base Salary,
Annual Incentive Compensation and Long-Term Incentive Compensation in paragraphs
(a), (b) and (c) below shall be determined by the Executive Personnel and
Pension Committee of the Board or any subsequent committee of the Board that has
primary responsibility for compensation policies (the "Compensation Committee")
based upon competitive practices for similarly situated officers of companies in
the same industry as CEI and of comparable size and standing.

            (a) Base Salary. The annual rate of base salary payable to the
Executive during the Employment Period (the "Annual Base Salary") shall be her
annual rate of base salary in effect immediately prior to the date hereof.
During the Employment Period, the Annual Base Salary shall be reviewed by the
Compensation Committee for possible increase at least annually. Any increase in
Annual Base Salary shall be approved by the Board. Annual Base Salary shall not
be reduced after any such increase, and the term "Annual Base Salary" shall
thereafter refer to the Annual Base Salary as so increased.

            (b) Annual Incentive Compensation. The Board has established and
intends to continue an annual incentive compensation plan for the benefit of the
officers and other key employees of the Company, including the Executive, based
on competitive practices for companies of comparable size and standing in the
same industry. Any performance objectives for the Executive in respect of such
incentive compensation plan will be determined by the Compensation Committee in
accordance with past practices. Currently, the Executive participates in
CECONY's annual incentive plan, the Executive Incentive Plan.

            (c) Long-Term Incentive Compensation. CEI currently has, and the
Board intends to continue, a long-term incentive compensation program, currently
consisting of a stock option plan, for the benefit of the officers and other key
employees of the Company, including the Executive, based on competitive
practices for companies of comparable size and standing in the same industry. In
addition to stock options, such program may in the future provide for stock
appreciation rights, restricted stock or stock units, performance stock or units
and/or other types of long-term incentive awards. The Board, subject to any
required shareholder approval, will determine the Company's long term incentive
compensation program, and the type and amount of equity and any other long-term
incentive grants provided under the program will be determined by the
Compensation Committee from time to time, provided that any such award shall
provide by its terms that it will either (i) vest and/or become exercisable upon
the Executive's retirement and remain exercisable until the third anniversary of
the Executive's date of retirement or (ii) remain outstanding notwithstanding
the Executive's termination of employment and continue to vest and/or become
exercisable, as though the Executive's employment had not terminated, until the
later of (x) the third anniversary of the Executive's date of retirement and (y)
90 days from the date that a stock option or other award (or portion thereof)
first becomes exercisable, but in no event beyond the original term thereof.

                                        3



            (d) Stock Award. In consideration of the commitment she will assume
during the Employment Period, the Executive shall be granted an award (the "
Restricted Stock Unit Award") of restricted stock units ("Units") with respect
to 50,000 shares of the Common Shares ($.10 par value) of CEI ("Stock"),
effective as of the Effective Date, in accordance with the following terms and
conditions:

            (i) Each Unit shall represent the right, upon vesting, to receive
      one share of Stock. The shares of Stock issuable in respect of the vesting
      of Units shall be shares purchased by the Company or its agent on the open
      market. In the event any of the shares issuable in respect of Units
      pertaining to the Restricted Stock Unit Award shall be forfeited, CEI may
      re-apply such shares for its corporate purposes in its discretion.

            (ii) The Executive's Units shall vest in accordance with the
      following schedule, provided that the Executive has remained continuously
      employed by the Company, or its successor, during the Employment Period
      through the dates indicated below:

            Date        Percentage of Then
                      Outstanding Non Vested
                              Units

            8/31/2003            50%
            8/31/2004            50%
            8/31/2005           100%

      If, during the Employment Period and prior to a Change in Control, the
      Company terminates the Executive's employment for Cause or without Cause
      or the Executive terminates his employment, the Executive shall forfeit
      all right to Units that are not vested as of the Date of Termination. If,
      during the Employment Period and following a Change in Control, the
      Company shall terminate the Executive's employment without Cause or the
      Executive terminates his employment for Good Reason, the Executive's Units
      shall fully and immediately vest as of the Date of Termination. If, during
      the Employment Period, the Executive's employment terminates by reason of
      death or Disability, the Executive's Units shall fully and immediately
      vest as of the Date of Termination.

            (iii) Once Units shall vest, CEI shall promptly issue to the
      Executive a certificate for the shares of Stock represented thereby
      without any legend or restriction (other than may be required by law).
      Prior to vesting, Units shall represent an unfunded promise to deliver
      Stock upon vesting thereof.

            (iv) Units may not be sold, assigned, transferred, pledged,
      hypothecated or otherwise disposed of, except by will or the laws of
      descent and distribution. Any attempted sale, assignment, transfer,
      pledge, hypothecation or disposition in contravention of the foregoing
      shall be null and void and of no effect.

                                        4


            (v) Except as otherwise provided herein, the Executive shall have no
      rights of a stockholder with respect to the shares of Stock represented by
      Units, including no right to vote the shares, to receive dividends and
      other distributions thereon and to participate in any change in
      capitalization of CEI. In the event of any change in capitalization
      resulting in the issuance of additional shares to CEI's stockholders, the
      shares of Stock represented by her Units shall be equitably adjusted as
      determined in good faith by the Compensation Committee. Prior to the
      delivery of shares of Stock upon vesting of Units, at the time of each
      distribution of any regular cash dividend paid by CEI in respect of Stock,
      the Executive shall be entitled to receive a cash payment from the Company
      equal to the aggregate regular cash dividend payment that would have been
      made in respect of the shares of Stock subject to Units which have not yet
      vested, as if the shares subject to such Units had been actually delivered
      to the Executive, provided, that no such payment in respect of Units shall
      be made if, prior to the time such payment is due, the Executive's rights
      with respect to such Units have previously terminated under this
      Agreement. In the event of a dividend payable in shares of Stock instead
      of cash, the Executive shall be entitled to receive on the distribution
      date additional Units in such number that would have been received in
      respect of the shares of Stock represented by Units that have not yet
      vested, as if the shares represented by such Units had actually been
      delivered to the Executive. The Executive hereby elects to defer the
      receipt of any dividend equivalent cash payments that may become payable
      to the Executive prior to December 31, 2001 and have the cash payment
      invested under the Company's Deferred Income Plan according to the terms
      and conditions of the Deferred Income Plan. Prior to the commencement of a
      calendar year, beginning with calendar year 2002, the Executive shall have
      the right to elect to defer receipt of any dividend equivalent cash
      payments that may become payable to the Executive in the calendar year and
      to have such cash payments invested under the Company's Deferred Income
      Plan according to the terms and conditions of the Deferred Income Plan.

            (vi) Unless the shares of Stock represented by her Units which are
      to be issued to the Executive have been registered pursuant to a
      registration statement under the Securities Act of 1933, prior to
      receiving such shares the Executive shall represent in writing to CEI that
      such shares are being acquired for investment purposes only and not with a
      view towards the further sale or distribution thereof and shall supply CEI
      with such other documentation as may be required by CEI, unless in the
      opinion of counsel to the CEI such representation, agreement or
      documentation is not necessary to comply with the Securities Act of 1933
      and the rules and regulations thereunder.

            (vii) CEI shall not be required to deliver any shares subject to
      this Restricted Stock Unit Award until they have been listed on each
      securities exchange on which shares of Stock are listed or until there has
      been qualification under or compliance with such state and federal laws,
      rules or regulations that CEI may deem applicable. CEI will use its best
      efforts to obtain such listing, qualification and compliance.

                                       5



            (viii) The Compensation Committee may make such provisions and take
      such steps as it may deem necessary or appropriate for the withholding of
      any taxes that the Company is required by law or regulation of any
      governmental authority, whether federal, state or local, domestic or
      foreign, to withhold in connection with the Restricted Stock Unit Award,
      including, but not limited to (1) withholding delivery of the certificate
      for shares of Stock until the Executive reimburses the Company for the
      amount it is required to withhold with respect to such taxes, (2) the
      canceling of any number of shares of Stock issuable to the Executive in an
      amount necessary to reimburse the Company for the amount it is required to
      so withhold, or (3) withholding the amount due from the Executive's other
      compensation.

            (ix) The Executive may elect to defer all or a portion of the
      receipt of Stock in respect of Units according to terms and conditions
      established by the Compensation Committee for such deferrals.

            (e) Employee Benefit Programs. During the Employment Period, (i) the
Executive shall be eligible to participate in all savings and retirement plans,
practices, policies and programs to the same extent as other senior executives
of the Company and (ii) the Executive and/or the Executive's family, as the case
may be, shall be eligible for participation in and shall receive all benefits
under welfare benefit plans, practices, policies and programs provided by the
Company, other than severance plans, practices, policies and programs but
including, without limitation, medical, prescription, dental, disability, salary
continuance, employee life insurance, group life insurance, accidental death and
travel accident insurance plans and programs, and, upon retirement, all
applicable retirement benefit plans to the same extent and subject to the same
terms, conditions, cost-sharing requirements and the like, as other senior
executives of the Company, as such plans may be amended from time to time, and
as supplemented hereby. During the Employment Period, no benefit coverage
available to the Executive and/or to his family under any such plan, practice,
policy or program shall be materially reduced without the prior written consent
of the Executive, unless a substantially equivalent reduction is applied to the
other senior executives of the Company, provided, however, that the exception
for across-the-board reductions shall not apply following a Change in Control
(as defined below) and, further provided, that the Executive shall be provided
during the Employment Period with life insurance providing for a death benefit,
as a multiple of Annual Base Salary, at least equal to the insurance coverage
provided by the Company to the Executive immediately prior to the date hereof.

            (f) Supplemental Retirement Benefits. During the Employment Period,
the Executive shall participate in CECONY's Retirement Plan for Management
Employees, and also in CECONY's Supplemental Retirement Income Plan and such
other supplemental executive retirement plans as may be adopted and amended by
the Company from time to time ("SERPs"). It is agreed that the Restricted Stock
Unit Award (including the grant of Units and any dividend equivalents or other
distributions in respect of the Units) shall not be included in the SERP or
other any pension calculation.

            (g) Expenses. The Executive is authorized to incur reasonable
expenses in carrying out her duties and responsibilities under this Agreement.
The Company shall promptly reimburse her for all such expenses in accordance
with the policies of the Company in effect from time to time for reimbursement
of expenses for senior executives, and subject to documentation provided by the
Executive in accordance with such Company policies.

                                        6



            (h) Fringe Benefits. During the Employment Period, the Executive
shall participate in all fringe benefits and perquisites available to senior
executives of the Company on terms and conditions that are commensurate with her
positions and responsibilities at the Company.

            (i) Vacation. During the Employment Period, the Executive shall be
entitled to paid vacation in accordance with Company policy as in effect from
time to time, but not less than four weeks' vacation per annum.


  Termination of Employment.
             -------------------------

             (a) Death or Disability. The Executive's employment shall terminate
automatically upon the Executive's death during the Employment Period. If the
Company determines in good faith that the Disability of the Executive has
occurred during the Employment Period (pursuant to the definition of Disability
set forth below), it may give to the Executive written notice in accordance with
Section 4(b) of this Agreement of its intention to terminate the Executive's
employment. In such event, the Executive's employment with the Company shall
terminate effective on the 30th day after receipt of such notice by the
Executive (the "Disability Effective Date"), provided that, within the 30 days
after such receipt, the Executive shall not have returned to full-time
performance of the Executive's duties. For purposes of this Agreement,
"Disability" means that (i) the Executive has been unable, for the period, if
any, specified in the Company's disability plan for senior executives, but not
less than a period of 180 consecutive days, to perform the Executive's duties
under this Agreement and (ii) a physician selected by the Company or its
insurers, and acceptable to the Executive or the Executive's legal
representative, has determined that the Executive is disabled within the meaning
of the applicable disability plan for senior executives.

            (b)  By the Company.
                 --------------

         (i) The Company may terminate the Executive's employment during the
     Employment Period for Cause or without Cause. For purposes of this
     Agreement, "Cause" shall mean (A) willful and continued failure by the
     Executive to substantially perform her duties under this Agreement or (B)
     the conviction of the Executive of a felony or the entering by the
     Executive of a plea of nolo contendere to a felony, in either case having a
     significant adverse effect on the business and affairs of the Company. No
     act or failure to act on the part of the Executive shall be considered
     "willful" unless it is done, or omitted to be done, by the Executive in bad
     faith or without reasonable belief that the Executive's action or omission
     was in the best interests of the Company. Any act or failure to act that is
     based upon authority given pursuant to a resolution duly adopted by the
     Board, or the advice of counsel for the Company, shall be conclusively
     presumed to be done, or omitted to be done, by the Executive in good faith
     and in the best interests of the Company. The Company expressly
     acknowledges that Cause will not exist merely because of a failure of the
     Company or its affiliates to meet budgeted results.

                                        7



         (ii) A termination of the Executive's employment for Cause shall be
     effected in accordance with the following procedures. The Company shall
     give the Executive written notice ("Notice of Termination for Cause") of
     its intention to terminate the Executive's employment for Cause, setting
     forth in reasonable detail the specific conduct of the Executive that it
     considers to constitute Cause and the specific provision(s) of this
     Agreement on which it relies. Such notice shall be given no later than 60
     days after the act or failure (or the last in a series of acts or failures)
     that the Company alleges to constitute Cause. The Executive shall have 30
     days after receiving the Notice of Termination for Cause in which to cure
     such act or failure, to the extent such cure is possible. If the Executive
     fails to cure such act or failure to the reasonable satisfaction of the
     Board, the Company shall give the Executive a second written notice stating
     the date, time and place of a special meeting of the Board called and held
     specifically for the purpose of considering the Executive's termination for
     Cause, which special meeting shall take place not less than ten and not
     more than twenty business days after the Executive receives notice thereof.
     The Executive shall be given an opportunity, together with counsel, to be
     heard at the special meeting of the Board. The Executive's termination for
     Cause shall be effective when and if a resolution is duly adopted at such
     special meeting by the affirmative vote of a majority of the Board stating
     that in the good faith opinion of the Board, the Executive is guilty of the
     conduct described in the Notice of Termination for Cause and that such
     conduct constitutes Cause under this Agreement.

            (c)  Good Reason.
                 -----------

         (i) The Executive may terminate her employment for Good Reason
     following a Change in Control or without Good Reason. For purpose of this
     Agreement, "Good Reason" following a Change in Control shall mean:

                 (A) any adverse change in the Executive's titles, authority,
         duties, responsibilities and reporting lines as in effect immediately
         prior to a Change in Control, or the assignment to the Executive of any
         duties or responsibilities inconsistent in any respect with those
         customarily associated with the positions held by the Executive
         immediately prior to a Change in Control;

                 (B) the failure by the Board to nominate the Executive for
         reelection to the Board at any annual meeting of CEI's shareholders
         during the Employment Period at which the Executive's term as a
         director is scheduled to expire;

                 (C) the appointment of any person other than the Executive to
         the position held by the Executive immediately prior to a Change in
         Control or any other position or title conferring similar status or
         authority;

                 (D) any reduction in the Executive's salary, target annual
         bonus, target long-term incentive or Retirement benefit as in effect
         immediately prior to a Change in Control;

                                        8


                 (E) any requirement by the Company that the Executive's
         services be rendered primarily at an office or location that is more
         than 50 miles from the Executive's employment office or location
         immediately prior to a Change in Control;

                 (F) any purported termination of the Executive's employment by
         the Company for a reason or in a manner not expressly permitted by this
         Agreement;

                 (G) any failure by CEI to comply with Section 10(c) of this
         Agreement; or

                 (H) any other material breach of this Agreement by the Company
         that either is not taken in good faith or, even if taken in good faith,
         is not remedied by the Company promptly after receipt of notice thereof
         from the Executive.

     Following a Change in Control, the Executive's determination that an act or
     failure to act constitutes Good Reason shall be conclusively presumed to be
     valid unless such determination is decided to be unreasonable by an
     arbitrator pursuant to Section 9.

         (ii) A termination of employment by the Executive for Good Reason shall
     be effectuated by giving the Company written notice ("Notice of Termination
     for Good Reason") of the termination, setting forth in reasonable detail
     the specific acts or omissions of the Company that constitute Good Reason
     and the specific provision(s) of this Agreement on which the Executive
     relies. Unless the Board determines otherwise, a Notice of Termination for
     Good Reason by the Executive must be made within 60 days after the
     Executive first has actual knowledge of the act or omission (or the last in
     a series of acts or omissions) that the Executive alleges to constitute
     Good Reason, and the Company shall have 30 days from the receipt of such
     Notice of Termination for Good Reason to cure the conduct cited therein. A
     termination of employment by the Executive for Good Reason shall be
     effective on the final day of such 30-day cure period unless prior to such
     time the Company has cured the specific conduct asserted by the Executive
     to constitute Good Reason to the reasonable satisfaction of the Executive
     (unless the notice sets forth a later date (which date shall in no event be
     later than 30 days after the notice is given) as of which such termination
     shall be effective).

         (iii) A termination of the Executive's employment by the Executive
     without Good Reason shall be effected by giving the Company written notice
     specifying the effective date of termination.

             (d) Date of Termination. The "Date of Termination" means the date
of the Executive's death, the Disability Effective Date, the date on which the
termination of the Executive's employment by the Company for Cause or without
Cause or by the Executive for Good Reason is effective, or the effective date
specified in a notice of a termination of employment without Good Reason from
the Executive to the Company, or Retirement, as the case may be.

                                        9


         5.  Obligations of the Company upon Termination.
             -------------------------------------------

             (a) Other Than for Cause, Death or Disability. If, during the
Employment Period and prior to a Change in Control, the Company shall terminate
the Executive's employment other than for Cause, death or Disability:

         (i) the Company shall pay to the Executive in a lump sum in cash,
     within 15 days after the Date of Termination, the aggregate of the amounts
     set forth in clauses A, B and C below:

          A.   The sum of:

               (1)  the Executive's Annual Base Salary through the Date of
                    Termination;

               (2)  the product of (x) the "target" annual bonus as in effect
                    under the Company's annual incentive plan for the calendar
                    year in which occurs the Date of Termination or, if no such
                    target annual bonus has been established for the Executive
                    for that year, for the immediately preceding calendar year
                    (the "Target Bonus") and (y) a fraction, the numerator of
                    which is the number of days in the current calendar year
                    through the Date of Termination, and the denominator of
                    which is 365; and

               (3)  any accrued vacation pay;

     in each case to the extent not theretofore paid (the sum of the amounts
     described in clauses (1), (2) and (3) shall be hereinafter referred to as
     the "Accrued Obligations");

          B.   the amount equal to the product of (1) two and (2) the sum of (x)
               the Executive's Annual Base Salary and (y) the Target Bonus; and

                                       10



          C.   an amount equal to the excess of (1) the actuarial equivalent of
               the benefit under the Company's applicable qualified defined
               benefit retirement plan in which the Executive is participating
               immediately prior to her Date of Termination (the "Retirement
               Plan") (utilizing the rate used to determine lump sums and, to
               the extent applicable, other actuarial assumptions no less
               favorable to the Executive than those in effect under the
               Retirement Plan immediately prior to the date of this Agreement),
               any nonqualified defined benefit SERPs in which the Executive
               participates and, to the extent applicable, any other defined
               benefit retirement arrangement between the Executive and the
               Company ("Other Pension Benefits") which the Executive would
               receive if the Executive's employment continued for two
               additional years beyond the Date of Termination, assuming for
               this purpose that all accrued benefits are fully vested, and,
               assuming that the Executive's compensation for such deemed
               additional period was the Executive's Annual Base Salary as in
               effect immediately prior to the Date of Termination and assuming
               a bonus in each year during such deemed additional period equal
               to the Target Bonus, over (2) the actuarial equivalent of the
               Executive's actual benefit (paid or payable), if any, under the
               Retirement Plan, the nonqualified defined benefit SERPs and Other
               Pension Benefits as of the Date of Termination (utilizing the
               rate used to determine lump sums and, to the extent applicable,
               other actuarial assumptions no less favorable to the Executive
               than those in effect under the Retirement Plan immediately prior
               to the date of this Agreement).


         (ii) the Executive's rights to the Restricted Stock Unit Award shall be
     forfeited in accordance with Section 3(d)(ii) above;

         (iii) any stock awards (other than the Restricted Stock Unit Award),
     stock options, stock appreciation rights or other equity-based awards that
     were outstanding immediately prior to the Date of Termination ("Prior
     Equity Awards") shall vest as of the Date of Termination and shall remain
     outstanding and shall be exercisable as though the Executive's employment
     had not terminated until the later of (x) the third anniversary of the Date
     of Termination and (y) 90 days from the date that the Prior Equity Award
     (or portion thereof) first becomes exercisable, but in no event beyond the
     end of the original term thereof, and the Company shall take all such
     actions as may be necessary to effectuate the foregoing;

         (iv) for two years after the Executive's Date of Termination or such
     longer period as may be provided by the terms of the appropriate plan,
     program, practice or policy, the Company shall continue benefits to the
     Executive and/or the Executive's family at least equal to those which would
     have been provided to them in accordance with the medical, prescription,
     dental and life insurance plans, programs, practices and policies described
     in Section 3(e) of this Agreement if the Executive's employment had not
     been terminated or, if more favorable to the Executive, as in effect
     generally at any time thereafter with respect to other peer executives of
     the Company and its affiliated companies and their families, provided
     however, that if the Executive becomes re-employed with another employer
     and is eligible to receive medical, prescription or dental benefits under
     another employer-provided plan, the medical, prescription and dental
     benefits described herein shall be secondary to those provided under such
     other plan during such applicable period of eligibility. Executive's right
     to continued eligibility under the Company's medical, prescription and
     dental plans under Section 4980B of the Internal Revenue Code of 1986, as
     amended (the "Code"), shall commence at the end of the period described
     hereinabove in this clause (iv). For purposes of determining eligibility
     (but not time of commencement of benefits) of the Executive for retiree
     benefits pursuant to such plans, practices, programs and policies, the
     Executive shall be considered to have remained employed until two years
     after the Date of Termination and to have retired on the last day of such
     period;

                                       11


         (v) any compensation previously deferred (other than pursuant to a
     tax-qualified plan) by or on behalf of the Executive (together with any
     accrued interest or earnings thereon), whether or not then vested, shall
     become vested on the Date of Termination and shall be paid in accordance
     with the terms of the plan, policy or practice under which it was deferred;

         (vi) the Company shall, at its sole expense as incurred, provide the
     Executive with outplacement services suitable to the Executive's position
     for a period not to exceed two years with a nationally recognized
     outplacement firm; and,

         (vii) to the extent not theretofore paid or provided, the Company shall
     timely pay or provide to the Executive any other vested amounts or vested
     benefits required to be paid or provided or which the Executive is entitled
     to receive under any plan, program, policy, practice, contract or agreement
     of the Company and its affiliated companies (other than medical,
     prescription or dental benefits if the Executive is eligible for such
     benefits to be provided by a subsequent employer), including earned but
     unpaid stock and similar compensation but excluding any severance plan or
     policy (such other amounts and benefits shall be hereinafter referred to as
     the "Other Benefits").

             (b) Cause; Other than for Good Reason. If the Executive's
employment shall be terminated for Cause during the Employment Period, or if the
Executive voluntarily terminates employment during the Employment Period,
excluding a resignation for Good Reason following a Change in Control, this
Agreement shall terminate without further obligations to the Executive other
than for amounts described in Sections 5(a)(i)(A)(1) and 5(a)(i)(A)(3) and the
timely payment or provision of Other Benefits (unless the terms of such Other
Benefits provide for forfeiture upon termination for Cause or termination for
other than Good Reason). In such case, all such amounts shall be paid to the
Executive in a lump sum within 30 days of the Date of Termination.

                                       12


             (c) Death. If the Executive's employment terminates by reason of
the Executive's death during the Employment Period, all Accrued Obligations as
of the time of death shall be paid to the Executive's estate or beneficiary, as
applicable, in a lump sum in cash within 30 days of the Date of Termination and
the Executive's estate or beneficiary shall be entitled to any Other Benefits in
accordance with their terms. In addition, the Restricted Stock Unit Award shall
vest in accordance with Section 3(d)(ii) above. Any Prior Equity Awards shall
vest and/or become exercisable, as the case may be, as of the Date of
Termination and the Executive's estate or beneficiary, as the case may be, shall
have the right to exercise any such stock option, stock appreciation right or
other exercisable equity-based award until the earlier of (A) one year from the
Date of Termination (or such longer period as may be provided under the terms of
any such stock option, stock appreciation right or other equity-based award) and
(B) the normal expiration date of such stock option, stock appreciation right or
other equity-based award.

             (d) Disability. If the Executive's employment is terminated by
reason of Disability during the Employment Period, all Accrued Obligations shall
be paid to the Executive in a lump sum in cash within 30 days of the Date of
Termination, and the Executive shall be entitled to any Other Benefits in
accordance with their terms. In addition, the Restricted Stock Unit Award shall
vest in accordance with Section 3(d)(ii) above. Any Prior Equity Awards shall
vest immediately and/or become exercisable, as the case may be, and the
Executive shall have the right to exercise any such stock option, stock
appreciation right or other exercisable equity-based award until the earlier of
(A) one year from the Date of Termination (or such longer period as may be
provided under the terms of any such stock option, stock appreciation right or
other equity-based award) and (B) the normal expiration date of such stock
option, stock appreciation right or other equity-based award.

             (e) Retirement. If the Executive's employment terminates at the
expiration of the Employment Period (or at any earlier date at which the
Executive elects to retire under any retirement plan maintained by the Company),
the Executive shall be paid the Accrued Obligations in a lump sum in cash within
30 days of the Date of Termination and the Executive shall be entitled to any
Other Benefits in accordance with their terms. Upon the Executive's retirement,
unless the Board otherwise determines, there shall be no acceleration of vesting
of any portion of the Restricted Stock Unit Award not yet earned.

         6.  Change in Control.
             -----------------

             (a) Benefits Upon a Change in Control. Upon the occurrence of a
Change in Control during the Employment Period, the Restricted Stock Unit Award
shall continue in effect and vest (or be forfeited) in accordance with
provisions of this Agreement as though no Change in Control had occurred, except
that, as appropriate, the shares of Stock represented by the Restricted Stock
Unit Award shall be treated the same as all other shares of Stock of CEI in any
transaction constituting a Change in Control. The Executive's rights upon a
termination of employment by the Company, by reason of death or Disability or by
the Executive for Good Reason, which termination occurs following a Change in
Control, shall be as specified in Section 5 generally for termination of
employment, except (i) the amount payable under Section 5(a)(i)(B) shall be
three times the sum of (x) the Executive's Annual Base Salary and (y) the Target
Bonus; (ii) the amount payable under Section 5(a)(i)(C) shall be determined as
if the Executive had remained employed for three additional years after the Date
of Termination and (iii) the benefits under Section 5(a) (iv) shall be provided
for three years after the Date of Termination and the Executive's eligibility
(but not the time of commencement of such benefits) for retiree benefits
pursuant to such plans, practices, programs and policies shall be determined as
if the Executive had remained employed until three years after the Date of
Termination and to have retired on the last day of such period.

                                       13


             (b) Definition. For purposes of this Agreement, a "Change in
Control" shall mean the occurrence of any of the following events after the date
of this Agreement:

         (i) any "person" (within the meaning of Section 13(d) of the Securities
     Exchange Act of 1934, as amended (the "Exchange Act") is or becomes the
     beneficial owner within the meaning of Rule 13d-3 under the Exchange Act (a
     "Beneficial Owner"), directly or indirectly, of securities of CEI (not
     including in the securities beneficially owned by such person any
     securities acquired directly from CEI or its affiliates) representing 20%
     or more of the combined voting power of CEI's then outstanding securities,
     excluding any person who becomes such a Beneficial Owner in connection with
     a transaction described in clause (A) of paragraph (iii) below; or

         (ii) the following individuals cease for any reason to constitute a
     majority of the number of directors of CEI then serving: individuals who,
     on the date of this Agreement, constitute the Board and any new director
     (other than a director whose initial assumption of office is in connection
     with an actual or threatened election contest, including but not limited to
     a consent solicitation, relating to the election of directors of CEI) whose
     appointment or election by the Board or nomination for election by CEI's
     stockholders was approved or recommended by a vote of at least two-thirds
     (2/3) of the directors then still in office who either were directors on
     the date hereof or whose appointment, election or nomination for election
     was previously so approved or recommended; or

         (iii) the shareholders of CEI approve or there is consummated a merger
     or consolidation of CEI or any direct or indirect wholly-owned subsidiary
     of CEI with any other corporation, other than (A) a merger or consolidation
     which would result in the voting securities of CEI outstanding immediately
     prior to such merger or consolidation continuing to represent (either by
     remaining outstanding or by being converted into voting securities of the
     surviving entity or any parent thereof), in combination with the ownership
     of any trustee or other fiduciary holding securities under an employee
     benefit plan of CEI or any subsidiary of CEI, at least 65% of the combined
     voting power of the securities of CEI or such surviving entity or any
     parent thereof outstanding immediately after such merger or consolidation,
     or (B) a merger or consolidation effected to implement a recapitalization
     of CEI (or similar transaction) in which no person is or becomes the
     Beneficial Owner, directly or indirectly, of securities of CEI representing
     20% or more of the combined voting power of CEI's then outstanding
     securities; or

         (iv) the shareholders of CEI approve a plan of complete liquidation or
     dissolution of CEI or there is consummated an agreement for the sale or
     disposition by CEI of all or substantially all of CEI's assets, other than
     a sale or disposition by CEI of all or substantially all of CEI's assets to
     an entity, at least 75% of the combined voting power of the voting
     securities of which are owned by stockholders of CEI in substantially the
     same proportions as their ownership of CEI immediately prior to such sale.

                                       14


     Notwithstanding the foregoing, a "Change in Control" shall not be deemed to
     have occurred by virtue of the consummation of any transaction or series of
     integrated transactions immediately following which the record holders of
     the common stock of CEI immediately prior to such transaction or series of
     transactions continue to have substantially the same proportionate
     ownership in an entity which owns all or substantially all of the assets of
     CEI immediately following such transaction or series of transactions.

         7.  Confidential Information; No Competition.
             ----------------------------------------

             (a) The Executive shall hold in a fiduciary capacity for the
benefit of the Company all confidential information, knowledge or data (defined
below) relating to the Company or any of its affiliates or subsidiaries, and
their respective businesses, which shall have been obtained by the Executive
during the Executive's employment by the Company or any of its affiliated
companies and which shall not be or become public knowledge (other than by acts
by the Executive or representatives of the Executive in violation of this
Agreement). Upon termination of the Executive's employment, she shall return to
the Company all Company information. After termination of the Executive's
employment with the Company, the Executive shall not, without the prior written
consent of the Company or as may otherwise be required by law or legal process,
communicate or divulge any such information, knowledge or data to anyone other
than the Company and those designated by it, except (x) otherwise publicly
available information, or (y) as may be necessary to enforce her rights under
this Agreement or necessary to defend herself against a claim asserted directly
or indirectly by the Company or its affiliates. Unless and until a determination
has been made in accordance with Section 7(d) or Section 9 hereof that the
Executive has violated this Section 7, an asserted violation of the provisions
of this Section 7 shall not constitute a basis for deferring or withholding any
amounts otherwise payable to the Executive under this Agreement.

             (b) As used herein, the term "confidential information, knowledge
or data" means all trade secrets, proprietary and confidential business
information belonging to, used by, or in the possession of the Company or any of
its affiliates and subsidiaries, including but not limited to information,
knowledge or data related to business strategies, plans and financial
information, mergers, acquisitions or consolidations, purchase or sale of
property, leasing, pricing, sales programs or tactics, actual or past sellers,
purchasers, lessees, lessors or customers, those with whom the Company or its
affiliates and subsidiaries has begun negotiations for new business, costs,
employee compensation, marketing and development plans, inventions and
technology, whether such confidential information, knowledge or data is oral,
written or electronically recorded or stored, except information in the public
domain, information known by the Executive prior to employment with CECONY, and
information received by the Executive from sources other than the Company or its
affiliates and subsidiaries, without obligation of confidentiality.

                                       15


             (c) The confidential knowledge, information and data, as defined in
the previous paragraph, gained in the performance of the Executive's duties
hereunder may be valuable to those who are now, or might become, competitors of
the Company or its affiliates and subsidiaries. Accordingly, the Executive
agrees that she will not, for the period of two years from Date of Termination,
without the consent of the chief executive officer of the Company which shall
not be unreasonably withheld, directly own, manage, operate, join, control,
become employed by, consult to or participate in the ownership, management, or
control of any business which is in direct competition with any business
maintained by the Company and/or its affiliates and subsidiaries as of the Date
of Termination. Further, the Executive agrees that, for two years following the
Date of Termination, she will not, directly or indirectly, solicit or hire, or
encourage the solicitation or hiring of any person who was a managerial or
higher level employee of the Company at any time during the term of the
Executive's employment by the Company by any employer other than the Company for
any position as an employee, independent contractor, consultant or otherwise.
The foregoing agreement of the Executive shall not apply to any person after 6
months have elapsed subsequent to the date on which such person's employment by
the Company has terminated. In the case of any such prohibited activity, the
Executive shall not be entitled to post-employment payments under this Agreement
(including any unpaid installments of the Restricted Stock Unit Award), and the
Executive shall return or repay to the Company a portion of any installments of
the Restricted Stock Unit Award that have vested in accordance with Section 3(d)
(ii) during the two year period immediately preceding such prohibited activity
which is equal to the amount of such installments paid within such two year
period times a fraction, the numerator of which is the number of months from the
commencement of such activity to the date that is 24 months after the Date of
Termination and the denominator of which is 24. This Section 7(c) shall be
inapplicable upon a Change in Control.

             (d) In the event of a breach by the Executive of any of the
agreements set forth in Sections 7 (a), (b) or (c) above, it is agreed that the
Company shall suffer irreparable harm for which money damages are not an
adequate remedy, and that, in the event of such breach, the Company shall be
entitled to obtain an order of a court of competent jurisdiction for equitable
relief from such breach, including, but not limited to, temporary restraining
orders and preliminary and/or permanent injunctions against the breach of such
agreements by the Executive. In the event that the Company should initiate any
legal action for the breach or enforcement of any of the provisions contained in
this Section 7 and the Company does not prevail in such action, the Company
shall promptly reimburse the Executive the full amount of any court costs,
filing fees, attorney's fees which the Executive reasonably incurs in defending
such action, and any loss of income during the period of such litigation.

                                       16


         8.  Full Settlement.
             ---------------

             (a) No Duty to Mitigate; No Reduction. Except as provided in
Section 7(c), and except to the extent that a Court under Section 7(d) or an
arbitrator appointed under Section 9 shall determine to permit an offset in
respect of a violation by the Executive of her obligations under Section 7, the
Company's obligation to make the payments provided for in this Agreement and
otherwise to perform its obligations hereunder shall not be affected by any
set-off, counterclaim, recoupment, defense or other claim, right or action which
the Company may have against the Executive or others. In no event shall the
Executive be obligated to seek other employment or take any other action by way
of mitigation of the amounts payable to the Executive under any of the
provisions of this Agreement and, except as specifically provided in Section
5(a)(iv) and Section 5(a)(vii) with respect to certain medical, prescription and
dental benefits, such amounts shall not be reduced whether or not the Executive
obtains other employment.

             (b) Non-exclusivity of Rights. Except as provided in Section 7(c),
nothing in the Agreement shall prevent or limit the Executive's continuing or
future participation in any plan, program, policy or practice provided by the
Company or any of its affiliated companies for which the Executive may qualify,
nor, subject to Section 12(g), shall anything in this Agreement limit or
otherwise affect such rights as the Executive may have under any contract or
agreement with the Company or any or its affiliated companies. Vested benefits
and other amounts that the Executive is otherwise entitled to receive under the
incentive compensation plans referred to in Section 3(c), the SERPs, or any
other plan, policy, practice or program of, or any contract or agreement with,
the Company or any of its affiliated companies on or after the Date of
Termination shall be payable in accordance with the terms of each such plan,
policy, practice, program, contract or agreement, as the case may be, except as
explicitly modified by this Agreement.

         9.  Disputes.
             --------

             Except with respect to equitable relief provided for in Section
7(d), any dispute about the validity, interpretation, effect or alleged
violation of this Agreement shall be resolved by confidential binding
arbitration to be held in New York, New York, in accordance with the Commercial
Arbitration Rules of the American Arbitration Association. Judgment upon the
award rendered by the arbitrator(s) may be entered in any court having
jurisdiction thereover. All costs and expenses incurred by the Company or the
Executive or the Executive's beneficiaries in connection with any such
controversy or dispute, including without limitation reasonable attorney's fees,
shall be borne by the Company as incurred, except that the Executive shall be
responsible for any such costs and expenses incurred in connection with any
claim determined by the arbitrator(s) to have been without reasonable basis or
to have been brought in bad faith. The Executive shall be entitled to interest
at the applicable Federal rate provided for in Section 7872(f)(2)(A) of the
Code, on any delayed payment which the arbitrator(s) determine she was entitled
to under this Agreement.

                                       17


         10.  Successors.
              ----------

             (a) No Assignment by Executive. This Agreement is personal to the
Executive and without the prior written consent of CEI shall not be assignable
by the Executive otherwise than by will or the laws of descent and distribution.
This Agreement shall inure to the benefit of and be binding upon and enforceable
by the Executive's legal representatives.

             (b) Successors to CEI. This Agreement shall inure to the benefit of
and be binding upon and enforceable by CEI and its successors and assigns.

             (c) Performance by a Successor to CEI. CEI will require any
successor (whether direct or indirect, by purchase, merger, consolidation or
otherwise) to all or substantially all of the business and/or assets of CEI to
assume expressly and agree to perform this Agreement in the same manner and to
the same extent that CEI would be required to perform it if no such succession
had taken place. As used in this Agreement, "CEI" shall mean CEI as hereinbefore
defined and any successor to its business and/or assets as aforesaid which
assumes and agrees to perform this Agreement by operation of law, or otherwise,
including New CEI which is to be established upon consummation of the merger
with Northeast Utilities pursuant to the Amended and Restated Agreement and Plan
of Merger, dated as of January 11, 2000, among CEI, Northeast Utilities, CWB
Holdings, Inc. and N Acquisition LLC if such transaction is consummated.

         11.  Certain Additional Payments by the Company.
              ------------------------------------------

             (a) Anything in this Agreement to the contrary notwithstanding, in
the event it shall be determined that any payment or distribution by the Company
to or for the benefit of the Executive (whether paid or payable or distributed
or distributable pursuant to the terms of this Agreement or otherwise, but
determined without regard to any additional payments required under this Section
11) (a "Payment") would be subject to the excise tax imposed by Section 4999 of
the Code or any interest or penalties are incurred by the Executive with respect
to such excise tax (such excise tax, together with any such interest and
penalties, are hereinafter collectively referred to as the "Excise Tax"), then
the Executive shall be entitled to receive an additional payment (a "Gross-Up
Payment") in an amount such that after payment by the Executive of all taxes
(including any interest or penalties imposed with respect to such taxes),
including, without limitation, any income and employment taxes (and any interest
and penalties imposed with respect thereto) and Excise Tax imposed upon the
Gross-Up Payment, the Executive retains an amount of the Gross-Up Payment equal
to the Excise Tax imposed upon the Payments.

             (b) Subject to the provisions of Section 11(c), all determinations
required to be made under this Section 11, including whether and when a Gross-Up
Payment is required and the amount of such Gross-Up Payment and the assumptions
to be utilized in arriving at such determination, shall be made by the Company's
independent auditors or such other certified public accounting firm as may be
jointly designated by the Executive and the Company (the "Accounting Firm"),
which shall provide detailed supporting calculations both to the Company and the
Executive. All fees and expenses of the Accounting Firm shall be borne solely by
the Company. Any Gross-Up Payment, as determined pursuant to this Section 11,
shall be paid by the Company to the Executive within 15 days of the receipt of
the Accounting Firm's determination. Any determination by the Accounting Firm
shall be binding upon the Company and the Executive. As a result of the
uncertainty in the application of Section 4999 of the Code at the time of the
initial determination by the Accounting Firm hereunder, it is possible that
Gross-Up Payments which will not have been made by the Company should have been
made ("Underpayment"), consistent with the calculations required to be made
hereunder. In the event that the Company exhausts its remedies pursuant to
Section 11(c) and the Executive thereafter is required to make a payment of any
Excise Tax, the Accounting Firm shall determine the amount of the Underpayment
that has occurred and any such Underpayment shall be promptly paid by the
Company to or for the benefit of the Executive.


                                       18


             (c) The Executive shall notify the Company in writing of any claim
by the Internal Revenue Service that, if successful, would require the payment
by the Company of the Gross-Up Payment. Such notification shall be given as soon
as practicable but no later than ten business days after the Executive is
informed in writing of such claim and shall apprise the Company of the nature of
such claim and the date on which such claim is requested to be paid. The
Executive shall not pay such claim prior to the expiration of the 30-day period
following the date on which she gives such notice to the Company (or such
shorter period ending on the date that any payment of taxes with respect to such
claim is due). If the Company notifies the Executive in writing prior to the
expiration of such period that it desires to contest such claim, the Executive
shall:

         (i) give the Company any information reasonably requested by the
     Company relating to such claim,

         (ii) take such action in connection with contesting such claim as the
     Company shall reasonably request in writing from time to time, including,
     without limitation, accepting legal representation with respect to such
     claim by an attorney reasonably selected by the Company,

         (iii) cooperate with the Company in good faith in order effectively to
     contest such claim, and

         (iv) permit the Company to participate in any proceedings relating to
     such claim;

provided however, that the Company shall bear and pay directly all costs and
expenses (including additional interest and penalties) incurred in connection
with such contest and shall indemnify and hold the Executive harmless, on an
after-tax basis, for any Excise Tax or income tax (including interest and
penalties with respect thereto) imposed as a result of such representation and
payment of costs and expenses. Without limitation on the foregoing provisions of
this Section 11(c), the Company shall control all proceedings taken in
connection with such contest and, at its sole option, may pursue or forgo any
and all administrative appeals, proceedings, hearings and conferences with the
taxing authority in respect of such claim and may, at its sole option, either
direct the Executive to pay the tax claimed and sue for a refund or contest the
claim in any permissible manner, and the Executive agrees to prosecute such
contest to a determination before any administrative tribunal, in a court of
initial jurisdiction and in one or more appellate courts, as the Company shall
determine; provided however, that if the Company directs the Executive to pay
such claim and sue for a refund, the Company shall advance the amount of such
payment to the Executive, on an interest-free basis and shall indemnify and hold
the Executive harmless, on an after-tax basis, from any Excise Tax or income tax
(including interest or penalties with respect thereto) imposed with respect to
such advance or with respect to any imputed income with respect to such advance;
and further provided that any extension of the statute of limitations relating
to payment of taxes for the taxable year of the Executive with respect to which
such contested amount is claimed to be due is limited solely to such contested
amount. Furthermore, the Company's control of the contest shall be limited to
issues with respect to which a Gross-Up Payment would be payable hereunder and
the Executive shall be entitled to settle or contest, as the case may be, any
other issue raised by the Internal Revenue Service or any other taxing
authority.

                                       19



         (d) If, after the receipt by the Executive of an amount advanced by the
Company pursuant to Section 11(c), the Executive becomes entitled to receive any
refund with respect to such claim, the Executive shall (subject to the Company's
complying with the requirements of Section 11(c)) promptly pay to the Company
the amount of such refund (together with any interest paid or credited thereon
after taxes applicable thereto). If, after the receipt by the Executive of an
amount advanced by the Company pursuant to Section 11(c), a determination is
made that the Executive shall not be entitled to any refund with respect to such
claim and the Company does not notify the Executive in writing of its intent to
contest such denial of refund prior to the expiration of 30 days after such
determination, then such advance shall be forgiven and shall not be required to
be repaid and the amount of such advance shall offset, to the extent thereof,
the amount of Gross-Up Payment required to be paid.

         12.  Miscellaneous.
              -------------

             (a) Governing Law. This Agreement shall be governed by and
construed in accordance with the laws of the State of New York applicable to
agreements executed and performed entirely therein. The captions of this
Agreement are not part of the provisions hereof and shall have no force or
effect.

             (b) Notices. All notices and other communications hereunder shall
be in writing and shall be given by hand delivery to the other party or by
registered or certified mail, return receipt requested, postage prepaid,
addressed as follows:

             If to the Executive:  4 Irving Place
                                   New York, NY 10003


             If to the Company:   4 Irving Place
                                  New York, NY 10003,
                                  Attention: General Counsel

                                       20


or to such other address as either party shall have furnished to the other in
writing in accordance herewith. Notice and communications shall be effective
when actually received by the addressee.

             (c) Invalidity. The invalidity or unenforceability of any provision
of this Agreement shall not affect the validity or enforceability of any other
provision of this Agreement. If any provision of this Agreement shall be held
invalid or unenforceable in part, the remaining portion of such provision,
together with all other provisions of this Agreement, shall remain valid and
enforceable and continue in full force and effect to the fullest extent
consistent with law.

             (d) Tax Withholding. Notwithstanding any other provision of this
Agreement, the Company may withhold from any amounts payable under this
Agreement such Federal, state, local or foreign taxes as shall be required to be
withheld pursuant to any applicable law or regulation.

             (e) Failure to Assert Rights. Except as provided in Section
4(b)(ii) and 4(c)(ii), the Executive's or the Company's failure to insist upon
strict compliance with any provisions of, or to assert any right under, this
Agreement shall not be deemed to be a waiver of such provision or right or of
any other provision of or right under this Agreement.

             (f) No Alienation. The rights and benefits of the Executive under
this Agreement may not be anticipated, assigned, alienated or subject to
attachment, garnishment, levy, execution or other legal or equitable process
except as required by law. Any attempt by the Executive to anticipate, alienate,
assign, sell, transfer, pledge, encumber or charge the same shall be void.
Payments hereunder shall not be considered assets of the Executive in the event
of insolvency or bankruptcy.

             (g) Entire Agreement. This Employment Agreement represents the
complete agreement between the Executive and the Company relating to employment
and termination and may not be altered or changed except by written agreement
executed by the parties hereto or their respective successors or legal
representatives. This Agreement supersedes all prior employment agreements and
other understandings between the parties with respect to the subject matter
herein except for the portions thereof which have been incorporated by reference
in this Agreement.

                                       21


         IN WITNESS WHEREOF, the Executive and, pursuant to due authorization
from its Board of Directors, the Company have caused this Agreement to be
executed as of the day and year first above written.

                                CONSOLIDATED EDISON, INC.



                                By:  Eugene R. McGrath
                                     Eugene R. McGrath
                                     Chairman of the Board and
                                     Chief Executive Officer

                                By:  Joan S. Freilich
                                     Joan S. Freilich



                        SEVERANCE PROGRAM FOR OFFICERS OF
                 CONSOLIDATED EDISON, INC. AND ITS SUBSIDIARIES

I.      Purpose.

         The purpose of this Severance Program for Officers of Consolidated
Edison, Inc. and its Subsidiaries (the "Program") is to provide certain
Participants with severance payments and benefits in the event of a "Termination
of Employment", including additional severance payments and benefits in the
event of a "Termination upon a Change of Control", each as hereinafter defined.
The Program is not intended to meet the qualification requirements of Section
401 of the Code or to be an "employee pension benefit plan" as defined in ERISA.
The Program is not intended to affect eligibility for or payment of any other
compensation or benefits in accordance with the terms of any applicable plans or
programs of the Company.

II.     Definitions.

         When used herein with initial capital letters, each of the following
terms shall have the corresponding meaning set forth below unless a different
meaning is plainly required by the context in which the term is used:

         "Administrator" shall mean the Vice President, Human Resources of
CECONY or such other person designated by the Committee.

         "Affiliate" shall mean an "affiliate" as defined in Rule 12b-2 of the
General Rules and Regulations under the Exchange Act.

         "Base Compensation" for any Participant shall mean the Participant's
annualized base rate of salary received by the Participant in all capacities
with the Company (before any and all salary reduction authorized amounts under
any of the Company's benefit plans or programs) as in effect immediately prior
to the Effective Date as the same may be increased from time to time. "Base
Compensation" shall not include the value of any target bonuses or other short
term incentive compensation, stock options, stock appreciation rights,
restricted stock, or restricted stock units granted to a Participant by the
Company.

     "Board" shall mean the Board of Directors of the Company.

     "Cause" with respect to the Termination of Employment of a Participant
shall mean (i) the conviction of the Participant of a felony or the entering by
the Participant of a plea of nolo contendere to a felony, in either case having
a significant adverse effect on the business and affairs of the Company, (ii)
the willful and continued failure by the Participant to substantially perform
his duties in the course of his employment with the Company (other than any such
failure resulting from incapacity due to physical or mental illness), after a
written demand for substantial performance is delivered to the Participant by
the Board or the Chief Executive Officer of the Company which specifically
identifies the manner in which the Board or Chief Executive Officer believes
that the Participant has not substantially performed the Participant's duties;
or (iii) the willful engaging by the Participant in illegal conduct or in gross
misconduct which is materially and demonstrably injurious to the Company. No act
or failure to act on the part of the Participant shall be considered "willful"
unless it is done, or omitted to be done, by the Participant in bad faith or
without reasonable belief that the Participant's action or omission was in the
best interests of the Company. Any act or failure to act that is based upon
authority given pursuant to a resolution fully adopted by the Board, or the
advice of counsel for the Company, shall, for purposes of this Program, be
conclusively presumed to be done, or omitted to be done, by the Participant in
good faith and in the best interests of the Company. The Company expressly
acknowledges that Cause will not exist merely because of a failure of the
Company or its affiliates to meet budgeted results.



         "CECONY" shall mean Consolidated Edison Company of New York, Inc., a
New York corporation.

         "Change of Control" shall mean the occurrence of any of the following
events:

         (i) any "person" (within the meaning of Section 13(d) of the Act) is or
becomes the beneficial owner within the meaning of Rule 13d-3 under the Act (a
"Beneficial Owner"), directly or indirectly, of securities of the Company (not
including in the securities beneficially owned by such person any securities
acquired directly from the Company or its affiliates) representing 20% or more
of the combined voting power of the Company's then outstanding securities,
excluding any person who becomes such a Beneficial Owner in connection with a
transaction described in clause (A) of paragraph (iii) below; or

         (ii) the following individuals cease for any reason to constitute a
majority of the number of directors then serving: individuals who, on the date
hereof, constitute the Board and any new director (other than a director whose
initial assumption of office is in connection with an actual or threatened
election contest, including but not limited to a consent solicitation, relating
to the election of directors of the Company) whose appointment or election by
the Board or nomination for election by the Company's stockholders was approved
or recommended by a vote of at least two-thirds (2/3) of the directors then
still in office who either were directors on the date hereof or whose
appointment, election or nomination for election was previously so approved or
recommended; or

     (iii) there is consummated a merger or consolidation of the Company or any
direct or indirect subsidiary of the Company with any other corporation, other
than (A) a merger or consolidation which would result in the voting securities
of the Company outstanding immediately prior to such merger or consolidation
continuing to represent (either by remaining outstanding or by being converted
into voting securities of the surviving entity or any parent thereof), in
combination with the ownership of any trustee or other fiduciary holding
securities under an employee benefit plan of the Company or any subsidiary of
the Company, at least 65% of the combined voting power of the securities of the
Company or such surviving entity or any parent thereof outstanding immediately
after such merger or consolidation, or (B) a merger or consolidation effected to
implement a recapitalization of the Company (or similar transaction) in which no
person is or becomes the Beneficial Owner, directly or indirectly, of securities
of the Company (not including in the securities beneficially owned by such
person any securities acquired directly from the Company or its affiliates other
than in connection with the acquisition by the Company or its affiliates of a
business) representing 20% or more of the combined voting power of the Company's
then outstanding securities; or

                                        2



     (iv) the stockholders of the Company approve a plan of complete liquidation
or dissolution of the Company or there is consummated an agreement for the sale
or disposition by the Company of all or substantially all of the Company's
assets, other than a sale or disposition by the Company of all or substantially
all of the Company's assets to an entity, at least 75% of the combined voting
power of the voting securities of which are owned by stockholders of the Company
in substantially the same proportions as their ownership of the Company
immediately prior to such sale.

Notwithstanding the foregoing, a "Change of Control" shall not be deemed to have
occurred by virtue of the consummation of any transaction or series of
integrated transactions immediately following which the record holders of the
common stock of the Company immediately prior to such transaction or series of
transactions continue to have substantially the same proportionate ownership in
an entity which owns all or substantially all of the assets of the Company
immediately following such transaction or series of transactions.

         "Code" shall mean the Internal Revenue Code of 1986, as amended.

         "Committee" shall mean the Executive Personnel and Pension Committee
that has been established by the Board, or any subsequent committee of the Board
that has primary responsibility for compensation policies. In the absence of
such a committee, "Committee" shall mean the Board or any committee of the Board
designated by the Board to perform the functions of the Committee under the
Program.

     "Company" includes, individually and/or collectively as the context
requires, Consolidated Edison, Inc., Consolidated Edison Company of New York,
Inc. and all other subsidiaries of the Company that have approved and adopted
this Program pursuant to Article VIII, whether or not such entity directly
compensates the Participant or the Participant appears on the payroll of such
entity; provided, however, that, for purposes of the definition of a "Change of
Control", "Company" shall mean Consolidated Edison, Inc. (or, following the
Merger, New CEI).

         "Disability" shall mean the inability of a Participant substantially to
perform his or her duties and responsibilities to the full extent required by
the Board, by reason of illness, injury or incapacity for six consecutive
months, or for more than six months in the aggregate during any period of twelve
calendar months.

                                        3


         "Effective Date" shall mean September 1, 2000.

         "ERISA" shall mean the Employee Retirement Income Security Act of 1974,
as amended.

         "Exchange Act" shall mean the Securities Exchange Act of 1934, as
amended.

         "Good Reason" shall mean:

         (i) any (A) decrease in the Participant's Base Compensation, or (B)
decrease in the Participant's Target Bonus (if any) or (C) material decrease in
the benefits provided to the Participant as in effect immediately prior to the
Effective Date, except, in each case, for across-the-board decreases uniformly
affecting similarly situated employees of the Company or the business unit in
which the Participant is then employed;

         (ii) any failure by the Company to comply with any of the material
provisions of this Agreement, other than an isolated, insubstantial and
inadvertent failure not occurring in bad faith and which is remedied by the
Company promptly after receipt of notice thereof given by the Participant;

         (iii) the Company's requiring the Participant to be based at any office
or location more than 50 miles from the location at which the Participant is
employed immediately prior to the Change of Control;

         (iv) any purported termination by the Company of the Participant's
employment otherwise than as expressly permitted by this Program;

         (v) any failure by the Company to comply with and satisfy Section IX F
of this Program; or

         (vi) the assignment to the Participant of any duties materially
inconsistent in any respect with the Participant's position (including status,
offices, titles and reporting requirements), authority, duties or
responsibilities of the Participant as in effect immediately prior to the Change
of Control, or any other action by the Company which results in a significant
diminution in such position, authority, duties or responsibilities, excluding,
for this purpose, an isolated, insubstantial and inadvertent action not taken in
bad faith and which is remedied by the Company promptly after receipt of notice
thereof given by the Participant.

                                        4


         "Merger" shall mean the consummation of the merger of the Company and
Northeast Utilities pursuant to the Amended and Restated Agreement and Plan of
Merger dated as of January 11, 2000.

         "New CEI" shall, upon the Merger, mean Consolidated Edison, Inc.

         "Notice of Termination" means a written notice given in accordance with
Section IX E which (i) indicates the specific termination provision in this
Program relied upon, (ii) briefly summarizes the facts and circumstances deemed
to provide a basis for a Termination of Employment and the applicable provision
hereof, and (iii) if the Termination Date is other than the date of receipt of
such notice, specifies the Termination Date (which date shall not be more than
15 days after the giving of such notice).

         "Participant" at any time shall mean each person who (a) (i) is an
officer of CECONY or is then holding the office of president or higher level of
each subsidiary of the Company and (ii) is designated by the Committee to be a
participant under the Program, or (b) is an officer or key employee of New CEI
or any or its direct or indirect subsidiaries who is designated by the chief
executive officer of New CEI to be a participant under the Program; provided,
however, that any individual who would otherwise be a participant shall not be
eligible to receive any severance payments or benefits hereunder (x) unless such
individual has signed a release agreement with the Company in the form of Annex
1 hereto or in such form as has been approved by the Administrator for this
purpose from time to time prior to a Change of Control, or (y) if such
individual is a party to a then effective separate written agreement with the
Company which has been authorized or adopted by the Board or the Committee which
expressly provides for severance payments or benefits (unless such agreement
expressly provides for participation in this Program) or (z) if such individual
is an employee of Northeast Utilities who is eligible to participate in a
Northeast Utilities Severance plan or program prior to the termination of such
plan or program.

         "Target Bonus" shall mean the target bonus opportunity (if any) in
effect for a Participant in respect of the calendar year in which the
Participant's Termination of Employment occurs or, if no such target bonus
opportunity has been established by the Company, the average of the two annual
bonuses, if any, paid or awarded to the Participant in respect of the most
recent two (2) calendar years immediately preceding the calendar year in which
occurs the Participant's Termination Date or preceding the Change of Control, if
higher.

         "Termination Date" with respect to any Participant shall mean the date
of any action by the Company constituting a Termination of Employment of such
Participant.

         "Termination of Employment" of a Participant shall mean (i) the
involuntary termination of the Participant's actual employment relationship with
the Company occasioned by the Company's action other than (w) an involuntary
termination for Cause, (x) due to a Participant's Disability or death, (y) due
to a sale, merger, acquisition or other transaction (1) in which the Participant
is employed or is offered the opportunity to become employed by another employer
in a position with the same or similar duties to the Participant's duties with
the Company immediately prior to the termination of employment and without any
decrease in the Participant's Base Compensation or Target Bonus or (2) accepts
employment in any position with the new employer or (z) due to a Participant's
retirement (voluntary at any time or mandatory at or after attainment of age 65)
or (ii) a termination initiated by a Participant on or within 24 months
following a Change of Control for Good Reason. The Company in its sole
discretion shall determine whether a Participant's termination of employment is
within the meaning of clauses (w), (x), (y) or (z) of subdivision (i).

                                        5


         "Termination upon a Change of Control" of a Participant shall mean a
Termination of Employment upon or within 24 months following a Change of
Control.

III.     Benefits.

A.       Benefits Following a Termination of Employment.

1.       Before a Change of Control. Subject to a Participant executing a
         written release substantially in the form of Annex 1 hereto, if, prior
         to a Change of Control, the Participant shall incur a Termination of
         Employment:

         a.       the Company shall pay to the Participant in a lump sum in
                  cash, within 15 days after the Date of Termination, the
                  aggregate of the following amounts:

                  (1)      the sum of (a) the Participant's Base Compensation
                           through the Date of Termination to the extent not
                           theretofore paid, (b) the product of (i) the sum of
                           the Participant's Target Bonus, and (ii) a fraction,
                           the numerator of which is the number of days in the
                           calendar year in which the Date of Termination occurs
                           through the Date of Termination, and the denominator
                           of which is 365 and (c) any accrued vacation pay, in
                           each case to the extent not theretofore paid (the sum
                           of the amounts described in clauses (a), (b), and (c)
                           shall be hereinafter referred to as the "Accrued
                           Obligations"); and

                  (2)      an amount equal to the excess of (a) the actuarial
                           equivalent of the benefit under the Company's
                           applicable qualified defined benefit retirement plan
                           in which the Participant is participating immediately
                           prior to his Date of Termination (the "Retirement
                           Plan") (utilizing the rate used to determine lump
                           sums and, to the extent applicable, other actuarial
                           assumptions no less favorable to the Participant than
                           those in effect under the Retirement Plan immediately
                           prior to the Effective Date), any excess or
                           supplemental nonqualified defined benefit retirement
                           plan in which the Participant participates (together,
                           the "SERP") and, to the extent applicable, any other
                           defined benefit retirement arrangement between the
                           Participant and the Company ("Other Pension
                           Benefits") which the Participant would receive if the
                           Participant's employment continued for one additional
                           year beyond the Date of Termination, assuming for
                           this purpose that all accrued benefits are fully
                           vested, and, assuming that the Participant's
                           compensation for such deemed additional period was
                           the Participant's Base Compensation as in effect
                           immediately prior to the Date of Termination and
                           assuming a bonus in each year during such deemed
                           additional period equal to the Target Bonus, over (b)
                           the actuarial equivalent of the Participant's actual
                           benefit (paid or payable), if any, under the
                           Retirement Plan, the SERP and Other Pension Benefits
                           as of the Date of Termination (utilizing the rate
                           used to determine lump sums and, to the extent
                           applicable, other actuarial assumptions no less
                           favorable to the Participant than those in effect
                           under the Retirement Plan immediately prior to the
                           Effective Date); and

                    6


         b.       the Company shall pay to the Participant in a lump sum in
                  cash, within 30 days after the Date of Termination, an amount
                  equal to one times the sum of the Participant's Base
                  Compensation and Target Bonus;

         c.       for a period of one year following the Date of Termination,
                  the Company shall continue to provide medical, dental and
                  Company-provided life insurance benefits to the Participant
                  and/or the Participant's eligible dependents at least equal to
                  those which would have been provided to them in accordance
                  with the Company's plans, programs, practices and policies if
                  the Participant's employment had not been terminated (at the
                  same contribution rate between the Participant and the Company
                  as is applicable for the Participant while actively employed
                  immediately prior to the Date of Termination); provided,
                  however, that if the Participant becomes employed by another
                  employer and is eligible to receive medical or dental benefits
                  under another employer provided plan, the medical and dental
                  benefits described herein shall be secondary to those provided
                  under such other plan during such applicable period of
                  eligibility. Such period shall be counted as part of the
                  Participant's right to continued eligibility under the
                  Company's medical and dental plans under Section 4980B of the
                  Code. For purposes of determining eligibility (but not the
                  time of commencement of benefits) of the Participant for
                  retiree benefits pursuant to such plans, practices, programs
                  and policies, the Participant shall be considered to have
                  remained employed until one year following the Date of
                  Termination and to have terminated on the last day of such
                  period;

                                        7


         d.       the Company shall, at its sole expense as incurred, provide
                  the Participant with outplacement services suitable to the
                  Participant's position for a period not to exceed one year
                  with a nationally recognized outplacement firm;

         e.       any compensation previously deferred (other than pursuant to a
                  tax-qualified plan) by or on behalf of the Participant
                  (together with any accrued interest or earnings thereon),
                  whether or not then vested, shall become vested on the Date of
                  Termination and shall be paid in accordance with the terms of
                  the plan, policy or practice under which it was deferred;

         f.       to the extent not theretofore paid or provided, the Company
                  shall timely pay or provide to the Participant any other
                  amounts or benefits required to be paid or provided or which
                  the Participant is eligible to receive under any plan,
                  program, policy or practice or contract or agreement of the
                  Company and its affiliated companies, including earned but
                  unpaid stock and similar compensation (such other amounts and
                  benefits shall be hereinafter referred to as the "Other
                  Benefits"); and

         g.       for purposes of the Company's stock option and other equity
                  incentive plans and the options, benefits and rights granted
                  to the Participant thereunder, the Participant shall be deemed
                  to have terminated employment with the consent of the Company.

2.       Following a Change of Control. Upon a Termination upon a Change of
         Control, the provisions of Section III.A.1. shall apply, except that
         references to "one" in clauses a.(2), b. and c., respectively, of
         Section III A.1. shall be increased to "two".

B.       Certain Reduction of Payments.

1.       Anything in this Program to the contrary notwithstanding, in the event
         that it shall be determined that any payment or distribution by the
         Company to or for the benefit of a Participant, whether paid or payable
         or distributed or distributable pursuant to the terms of this Program
         or otherwise (the "Payment"), would constitute an "excess parachute
         payment" within the meaning of Section 280G of the Code, and that such
         Participant would receive a greater net after-tax amount if the Payment
         to Participant were reduced to avoid the taxation of excess parachute
         payments under Section 4999 of the Code, the aggregate present value of
         amounts payable or distributable to or for the benefit of Participant
         pursuant to this Program (such payments or distributions pursuant to
         this Program are hereinafter referred to as "Program Payments") shall
         be reduced (but not below zero) to the Reduced Amount. The "Reduced
         Amount" shall be an amount expressed in present value which maximizes
         the aggregate present value of Program Payments without causing any
         Payment to be subject to the taxation under Section 4999 of the Code.
         For purposes of this Section III B, present value shall be determined
         in accordance with Section 28OG(d)(4) of the Code.

                                        8


2.       All determinations to be made under this Section III B shall be made by
         the Company's independent public accountant immediately prior to the
         Change of Control (the "Accounting Firm"), which firm shall provide its
         determinations and any supporting calculations both to the Company and
         the affected Participant within 10 days of the Termination Date of such
         Participant. Any such determination by the Accounting Firm shall be
         binding upon the Company and the Participant; provided, however, that
         Participant shall, in his or her sole discretion, determine whether,
         which and how much of the Program Payments shall be eliminated or
         reduced consistent with the requirements of this Section III B. Within
         five days after the Participant's determination, the Company shall pay
         (or cause to be paid) or distribute (or cause to be distributed) to or
         for the benefit of the Participant such amounts as are then due to the
         Participant under this Program.

3.       As a result of the uncertainty in the application of Section 280G of
         the Code at the time of the initial determination by the Accounting
         Firm hereunder, it is possible that Program Payments will have been
         made by the Company which should not have been made ("Overpayment") or
         that additional Program Payments which have not been made by the
         Company could have been made ("Underpayment"), in each case, consistent
         with the calculations required to be made hereunder. Within two years
         after the Termination of Employment of any Participant, the Accounting
         Firm shall review the determination made by it pursuant to subsection
         III B.2. above. In the event that the Accounting Firm determines that
         an overpayment has been made, any such Overpayment shall be treated for
         all purposes as a loan to the Participant which the Participant shall
         repay to the Company together with interest at the applicable Federal
         rate provided for in Section 7872(f)(2) of the Code (the "Federal
         Rate"); provided, however, that no amount shall be payable by the
         Participant to the Company if and to the extent such payment would not
         increase the net amount which is payable to the Participant after
         taking into account the provisions of Section 4999 of the Code. In the
         event that the Accounting Firm determines that an Underpayment has
         occurred, any such Underpayment shall be promptly paid by the Company
         to or for the benefit of the Participant together with interest at the
         Federal Rate.

4.       All of the fees and expenses of the Accounting Firm in performing the
         determinations referred to in subsections III B.2. and III B.3. above
         shall be borne solely by the Company. The Company agrees to indemnify
         and hold harmless the Accounting Firm of and from any and all claims,
         damages and expenses resulting from or relating to its determinations
         pursuant to subsections III B.2. and III B.3. above, except for claims,
         damages or expenses resulting from the gross negligence or wilful
         misconduct of the Accounting Firm.

                                        9


C.       Vesting. Except as provided in Article V hereof, a Participant shall be
         vested and shall have a nonforfeitable right with respect to the
         benefits to be provided hereunder from and after the Termination Date.
         The respective rights and obligations of the Company and the
         Participant under this Program shall survive any termination of
         Participant's employment to the extent necessary to the intended
         preservation of such rights and obligations.

D.       Non-Exclusivity of Rights. Nothing in this Program shall prevent or
         limit any Participant's continuing or future participation in or rights
         under any benefit, bonus, incentive or other plan or program provided
         by the Company and for which such Participant may qualify; provided,
         however, that if such Participant becomes entitled to and receives all
         of the payments provided for in this Program, the Participant hereby
         waives his or her right to receive payments under any other plan,
         program, agreement or arrangement of the Company providing severance
         benefits.

E.       Notice of Termination. No Termination upon a Change of Control shall be
         effective unless accompanied or preceded by a Notice of Termination.

IV.      Confidential Information.

A.       Each Participant shall hold in a fiduciary capacity for the benefit of
         the Company all confidential information, knowledge or data (defined
         below) relating to the Company or any of its affiliates or
         subsidiaries, and their respective businesses, which shall have been
         obtained by the Participant during the Participant's employment by the
         Company or any of its affiliated companies and which shall not be or
         become public knowledge (other than by acts by the Participant or
         representatives of the Participant in violation of this Agreement).
         Upon termination of the Participant's employment, he or she shall
         return to the Company all Company information. After termination of the
         Participant's employment with the Company, the Participant shall not,
         without the prior written consent of the Company or as may otherwise be
         required by law or legal process, communicate or divulge any such
         information, knowledge or data to anyone other than the Company and
         those designated by it, except (a) otherwise publicly available
         information, or (b) as may be necessary to enforce his rights under
         this Agreement or necessary to defend himself against a claim asserted
         directly or indirectly by the Company or its affiliates.

B.       As used herein, the term "confidential information, knowledge or data"
         means all trade secrets, proprietary and confidential business
         information belonging to, used by, or in the possession of the Company
         or any of its affiliates and subsidiaries, including but not limited to
         information, knowledge or data related to business strategies, plans
         and financial information, mergers, acquisitions or consolidations,
         purchase or sale of property, leasing, pricing, sales programs or
         tactics, actual or past sellers, purchasers, lessees, lessors or
         customers, those with whom the Company or its affiliates and
         subsidiaries has begun negotiations for new business, costs, employee
         compensation, marketing and development plans, inventions and
         technology, whether such confidential information, knowledge or data is
         oral, written or electronically recorded or stored, except information
         in the public domain, information known by a Participant prior to
         employment with the Company, and information received by the
         Participant from sources other than the Company or its affiliates and
         subsidiaries, without obligation of confidentiality.

                                       10


V.       Funding.

         Benefits payable under this Program shall be unfunded, as that term is
used in Sections 201(2), 301(a)(3), 401(a)(1) and 4021(a)(6) of ERISA, with
respect to unfunded plans maintained primarily for the purpose of providing
deferred compensation to a select group of management or highly compensated
employees, and the Administrator shall administer this Program in a manner that
will ensure that benefits are unfunded and that Participants will not be
considered to have received a taxable economic benefit prior to the time at
which benefits are actually payable hereunder. Accordingly, the Company shall
not be required to segregate or earmark any of its assets for the benefit of
Participants or their spouses or other beneficiaries, and each such person shall
have only a contractual right against the Company for benefits hereunder. The
Company may from time to time establish a trust and deposit with the trustee
thereof funds to be held in trust for the payment of benefits hereunder;
provided, that the use of such funds for such purpose shall be subject to the
claims of the Company's general creditors as set forth in the agreement
establishing any such trust. The rights and interests of a Participant under
this Program shall not be subject in any manner to anticipation, alienation,
sale, transfer, assignment, pledge or encumbrance by a Participant or any person
claiming under or through a Participant, nor shall they be subject to the debts,
contracts, liabilities or torts of a Participant or anyone else prior to
payment. The Administrator may from time to time appoint an investment manager
or managers for the funds held in any such trust.

VI.     Administration.

         The Program shall be operated under the direction of the Committee and
administered by the Administrator. The calculation of all benefits payable under
the Program shall be performed by the Administrator, subject to the review of
the Committee.

VII.     Claims Procedure.

         All claims for benefits under this Program shall be determined under
the claims procedure in effect under the Company's tax-qualified defined benefit
pension plan on the date that such claims are submitted, except that the
Administrator shall make initial determinations with respect to claims hereunder
and the Committee shall decide appeals of such determinations. In the event that
any dispute under the provisions of this Program is not resolved to the
satisfaction of the affected Participant, other than a dispute in which the
primary relief sought is an equitable remedy such as an injunction, the parties
shall be required to have the dispute, controversy or claim settled by
arbitration in New York City, New York in accordance with the Commercial
Arbitration Rules of the American Arbitration Association. Any award entered by
the arbitrator shall be final, binding and nonappealable and judgment may be
entered thereon by either party in accordance with applicable law in any court
of competent jurisdiction. This arbitration provision shall be specifically
enforceable. The arbitrator shall have no authority to modify any provision of
this Program or to award a remedy for a dispute involving this Program other
than a benefit specifically provided under or by virtue of the Program. If a
Participant prevails on any material issue which is the subject of any such
arbitration or lawsuit, the Company shall be responsible for all of the fees of
the American Arbitration Association and the arbitrator and any expenses
relating to the conduct of the arbitration (including the Company's and the
Participant's reasonable attorneys' fees and expenses). Otherwise, each party
shall be responsible for its own expenses relating to the conduct of the
arbitration (including reasonable attorneys' fees and expenses) and shall share
the fees of the American Arbitration Association.

                                       11


VIII.    Adoption by Company: Obligations of Company.

A.       At the earliest feasible time or times, the Company shall cause each
         entity in which it now or hereafter holds, directly or indirectly, more
         than a 50 percent voting interest to approve and adopt this Program
         and, by such approval and adoption, to be bound by the terms hereof.

B.       Benefits under this Program shall, in the first instance, be paid and
         satisfied by the Company. If the Company shall be dissolved or for any
         other reason shall fail to pay and satisfy such benefits, each
         individual entity referred to in (a) above shall pay and satisfy its
         share of such benefits, such share to be the ratio of the Participant's
         Base Compensation charged to such entity during the three calendar
         years immediately preceding the Participant's Termination Upon a Change
         of Control to the total of the Participant's Base Compensation charged
         to all such entities during the same period.

IX.      Miscellaneous.

A.       Amendment or Termination. Prior to the occurrence of a Change of
         Control, the Board may amend or discontinue this Program at any time.
         Prior to the occurrence of a Change in Control, the Administrator may
         amend the Program to facilitate the administration of the Program. Upon
         and following a Change of Control, this Program may not be amended or
         terminated in any way that would adversely affect the rights of
         Participants under the Program.

                                       12


B.       Headings. Headings are included in the Program for convenience only and
         are not substantive provisions of the Program.

C.       Applicable Law. The interpretation of the provisions and the
         administration of the Program shall be governed by the laws of the
         State of New York without giving effect to any conflict of laws
         provisions, and to the extent applicable, the United States of America.

D.       Mitigation. No Participant shall be required to mitigate the amount of
         any payment or benefit provided for in this Program by seeking other
         employment or otherwise and there shall be no offset against amounts
         due any Participant under this Program on account of any remuneration
         attributable to any subsequent employment that may be obtained.

E.       Notices. All notices and other communications required or permitted
         under this Program or necessary or convenient in connection herewith
         shall be in writing and shall be deemed to have been given when hand
         delivered or mailed by registered or certified mail to the last known
         address of the Company or the Participant, as the case may be,
         reflected upon Company records. Notices to the Company shall be
         addressed to:

               Consolidated Edison, Inc.
               4 Irving Place
               New York, NY 10003
               Attention: General Counsel

F.       Binding Effect; Successors and Assigns. All of the terms and provisions
         of this Program shall be binding upon and inure to the benefit of and
         be enforceable by the respective heirs, executors, administrators,
         legal representatives, successors and assigns of the parties hereto,
         except that the duties and responsibilities of the Participants under
         this Program are of a personal nature and shall not be assignable or
         delegatable in whole or in part by the Participants. The Company shall
         require any successor (whether direct or indirect, by purchase, merger,
         consolidation, reorganization or otherwise) to all or substantially all
         of the business or assets of the Company, by agreement in form and
         substance satisfactory to the Participants, expressly to assume and
         agree to perform this Program in the same manner and to the extent the
         Company would be required to perform if no such succession had taken
         place.

                                       13


G.       Severability. If any provision of this Program or application thereof
         to anyone or under any circumstances is adjudicated to be invalid or
         unenforceable in any jurisdiction, such invalidity or unenforceability
         shall not affect any other provision or application of this Program
         which can be given effect without the invalid or unenforceable
         provision or application and shall not invalidate or render
         unenforceable such provision or application in any other jurisdiction.
         If any provision is held void, invalid or unenforceable with respect to
         particular circumstances, it shall nevertheless remain in full force
         and effect in all other circumstances.

H.       Remedies Cumulative; No Waiver. No remedy conferred upon a party by
         this Program is intended to be exclusive of any other remedy, and each
         and every such remedy shall be cumulative and shall be in addition to
         any other remedy given under this Program or now or hereafter existing
         at law or in equity. No delay or omission by a party in exercising any
         right, remedy or power under this Program or existing at law or in
         equity shall be construed as a waiver thereof, and any such right,
         remedy or power may be exercised by such party from time to time and as
         often as may be deemed expedient or necessary by such party in its sole
         discretion.

I.       Beneficiaries/References. Each Participant shall be entitled, to the
         extent permitted under any applicable law, to select and change a
         beneficiary or beneficiaries to receive any compensation or benefit
         payable under this Program following his or her death by giving the
         Company written notice thereof. In the event of a Participant's death
         or a judicial determination of a Participant's incompetence, reference
         in this Program to "Participant" shall be deemed, where appropriate, to
         refer to such Participant's beneficiary, estate or other legal
         representative.

J.       Withholding. The Company may withhold from any payments under this
         Program all federal, state and local taxes as the Company is required
         to withhold pursuant to any law or governmental rule or regulation.
         Each Participant shall bear all expense of, and be solely responsible
         for, all federal, state and local taxes due with respect to any payment
         received under this Program.

                                       14


                                     Annex 1

                          RELEASE AND WAIVER AGREEMENT

         This Release and Waiver Agreement ("Agreement") is between Consolidated
Edison, Inc. ("Company") and ______________________ ("Employee") and is being
entered into by the Employee in consideration for the Company's providing the
Employee with severance payments and benefits under the Severance Program for
Officers of Consolidated Edison, Inc. (the "Program"). The parties hereto agree
as follows:

                  1. Employee agrees to waive, release and discharge the Company
         and its subsidiaries and affiliates, and their respective legal
         representatives, successors and assigns, agents, past, present and
         future employees, directors, officers, shareholders and trustees, from
         any and all actions, causes of action, claims, cross-claims, third
         party claims, counterclaims, contribution claims, debts, demands,
         actions, promises, judgments, trespasses, extents, executions, awards,
         damages, liabilities of any kind or nature whatsoever, which Employee
         and his/her successors and assigns may have or have had against the
         Company or the above-referenced entities and individuals for all times
         in the past to the date that this Agreement is signed. This release and
         discharge is specifically understood to apply to, but is not limited
         to, claims for alleged oral, written or implied contract of employment,
         claims for salary or wages, severance payments, bonuses or other
         compensation of any kind, claims for libel, slander, defamation and
         attorneys' fees, claims of wrongful discharge, claims of discriminatory
         treatment based upon any one or combination of the factors of age, sex,
         race, religion, handicap, national origin and any and all other claims
         arising under federal, state or local law, whether such claims arise at
         common law (whether sounding in tort or contract) or by constitution,
         statute or ordinance, including, by way of illustration, Title VII of
         the Civil Rights Act of 1964, as amended, 42 U.S.C. 2000(e) et seq.,
         the Civil Rights Act of 1991, the federal Fair Labor Standards Act, the
         Employee Retirement Income Security Act of 1974, as amended, the
         Americans with Disabilities Act, the Age Discrimination in Employment
         Act of 1967, as amended, 29 U.S.C. 621 et seq., the New York State
         Human Rights Law and the New York City Human Rights Law, each as
         amended from time to time; provided, however, that this waiver, release
         and discharge shall not apply to any compensation and benefits payable
         under the Program.

                  2. Employee acknowledges that he/she is entering into this
         Agreement voluntarily and of his/her own free will. Employee also
         agrees that this Agreement contains the parties' complete understanding
         and that there are no other agreements, oral or written, pertaining to
         the subject matter of this Agreement. Any amendment or modification of
         this Agreement must be made in writing and signed by both Employee and
         the Company.

                                       15


                  3. The parties hereto agree that this Agreement shall be
         governed by and construed in accordance with the laws of the State of
         New York. The parties further agree that should any part or provision
         of this Agreement be held unenforceable or in conflict with controlling
         law, the validity of the remaining parts and provisions shall be
         unaffected.

                  4. The parties expressly agree that this Agreement shall inure
         to the benefit of and be binding upon the parties hereto and their
         respective heirs, successors and assigns.

                  5. Employee acknowledges that he/she was provided a copy of
         this Agreement on _________ and that he/she has until [21][45] days
         from such date to sign and return it to the Company. The Employee shall
         have seven days from the date on which he/she signs and returns this
         Agreement, to revoke said Agreement. It is agreed that this Agreement
         shall not become effective or enforceable until this seven-day
         revocation period has passed. Any such revocation within this period
         must be submitted in writing to the Company and signed by the Employee.

                  6. Employee acknowledges that he/she has been advised to
         consult with an attorney and other advisors of his/her choice prior to
         signing this Agreement and that his/her execution of this Agreement is
         made voluntarily and with a full understanding of its consequences and
         has not been coerced in any way.

                  IN WITNESS WHEREOF, the parties have executed this Agreement
         as of _____.


                                                    CONSOLIDATED EDISON, INC.

                                                    By _________________________

                                                       -------------------------
                                                               Employee

                                       16







                               Amendment No. 11 to
                     EUGENE R. MCGRATH EMPLOYMENT AGREEMENT


         WHEREAS, Eugene R. McGrath (the "Employee") and Consolidated Edison
Company of New York, Inc. (the "Company") entered into an Employment Agreement
effective September 1, l990 (the "Agreement");

         WHEREAS, the parties to the Agreement desire to amend the Agreement to
increase the basic salary payable to the Employee; and

         WHEREAS, paragraph 12 of the Agreement provides that the Agreement may
be amended from time to time by a written instrument executed by the Company and
the Employee;

         NOW, THEREFORE, in consideration of the foregoing the parties hereto
agree as follows:

         1. The Agreement is amended, effective September 1, 2000, to increase
the Employee's basic salary set forth in clause (i) of paragraph 3(a) of the
Agreement from $1,000,000 per annum to $1,090,000 per annum, subject to all the
terms and conditions set forth in the Agreement relating to the basic salary.

         2. In all other respects, the Agreement remains in full force and
effect as amended hereby.

         IN WITNESS WHEREOF, the Company has caused this Amendment to be
executed by its duly authorized officer and its Corporate seal to be affixed
hereto, and the Employee has hereto set his hand the day and year set forth
below.

                              CONSOLIDATED EDISON COMPANY OF NEW YORK, INC.


                              By:______________________________________
                                             Charles F. Soutar
                                         Executive Vice President


                                 ---------------------------------------
                                                Eugene R. McGrath


Dated:  July 20, 2000

Attest:

Approved by the Board
the 20th day of July, 2000.


- ---------------------------------
         Archie M. Bankston
         Secretary



                              AGREEMENT AND RELEASE

         This Agreement and Release (hereinafter called the "Agreement") is made
this 22nd day of August, 2000, by and between Consolidated Edison Company of New
York, Inc. (hereinafter called the "Company") and J. Michael Evans (hereinafter
called the "Executive").

         WHEREAS, the Executive has served as a senior executive and a member of
the Company's Corporate Policy Committee since joining the Company in September
1991, and most recently as President and Chief Operating Officer of the Company;
and

         WHEREAS, the Executive desires to retire from the Company and the
Company desires to provide certain benefits to the Executive in connection with
his retirement from the Company, on the terms and conditions set forth below.

         NOW, THEREFORE, in consideration of the premises and covenants and
subject to the terms and conditions contained herein, the parties hereto agree
as follows:

         1. The Executive hereby voluntarily and irrevocably elects to retire
from the Company and from his position as President and Chief Operating Officer
of the Company effective September 1, 2000.

         2. (a) The Company shall pay the Executive the amount of One million
four hundred eighty-one thousand six hundred dollars ($1,481,600) as follows: in
a single lump sum within fifteen (15) days after this Agreement becomes
effective in accordance with Paragraph 8




of this Agreement. Such amount shall not be included as part of the Executive's
compensation for purposes of determining the benefits to which he is entitled
under the Company's employee benefit plans, programs or arrangements. Such
amount shall be due and payable notwithstanding any disability or incapacity of
the Executive, and in the event of the death of the Executive shall be payable
to his estate.

         (b) During the period from September 1, 2000 until August 31, 2002 the
Company shall continue benefits to the Executive and/or the Executive's family
at least equal to those and at the same contribution rates that would have been
provided to them in accordance with the medical, prescription, dental, and life
insurance plans of the Company if the Executive had not retired or, if more
favorable to the Executive, as in effect generally at any time with respect to
other peer executives of the Company and their families, provided, however, that
if the Executive becomes re-employed with another employer and is eligible to
receive such health benefits under another employer-provided plan, the health
benefits described herein shall be secondary to those provided under such other
plan during such two-year period. The Executive's right to continued eligibility
under the Company's health care plans under Section 4980B of the Internal
Revenue Code of 1986, as amended (the "Code"), shall commence at the end of such
two-year period. At the end of such two-year period the Executive shall be
eligible to participate in the health care coverage available to retired
officers of the Company, including coverage available under the Company's
Retiree Health Program for Management Employees, as such coverage is in effect
from time to time, on the same terms and conditions as are applicable to retired
officers of the Company.

         (c) Pursuant to the employment agreement dated as of June 25,
1991 between the Company and the Executive, the Executive shall be given credit
for the period from





July 1974 through August 1991 in addition to his actual years of service for
purposes of calculating his pension benefits under the Company's Retirement Plan
for Management Employees and Supplemental Retirement Income Plan (collectively,
the "Pension Plans"). Upon termination of his employment the Executive shall
elect an annuity form of payment under the Pension Plans. Payment of the
Executive's benefits under the Pension Plans shall commence effective as of
September 1, 2000.

         (d) The Company hereby confirms to the Executive that termination of
the Executive's employment with the Company by his retirement effective
September 1, 2000 (i) shall vest, and not result in the forfeiture of, any
mandatory deferred amounts to the Executive's credit under the Company's
Executive Incentive Plan, and (ii) shall be considered to be retirement prior to
age 65 under a Company pension plan with the consent of the Company for purposes
of any outstanding options granted to the Executive under the Consolidated
Edison, Inc. 1996 Stock Option Plan, as amended and restated February 24, 1998.
The Executive hereby confirms his election that the mandatory deferred amounts
to the Executive's credit under the Executive Incentive Plan shall be
transferred to the Company's Deferred Income Plan immediately upon becoming
vested, and shall be distributable to the Executive in accordance with his
elections on file with the Company.

         (e) The Company shall, at its sole expense as incurred, provide the
Executive with outplacement services suitable to the Executive's position for a
period of not to exceed two years with a nationally recognized outplacement
firm.

         (f) The Executive shall continue to be eligible to use the financial
counseling services of Ayco & Company for the period of two years following his
retirement, on





the same terms as provided from time to time to other peer executives or former
peer executives of the Company.

         3. (a) The Executive shall hold in a fiduciary capacity for the benefit
of the Company all confidential information, knowledge or data (defined below)
relating to the Company or any of its affiliates or subsidiaries, and their
respective businesses, which shall have been obtained by the Executive during
the Executive's employment by the Company or any of its affiliated companies and
which shall not be or become public knowledge (other than by acts by the
Executive or representatives of the Executive in violation of this Agreement).
Upon termination of the Executive's employment, he shall return to the Company
all Company confidential information. After termination of the Executive's
employment with the Company, the Executive shall not, without the prior written
consent of the Company or as may otherwise be required by law or legal process,
communicate or divulge any such information, knowledge or data to anyone other
than the Company and those designated by it, except (x) otherwise publicly
available information, or (y) as may be necessary to enforce his rights under
this Agreement or necessary to defend himself against a claim asserted directly
or indirectly by the Company or its affiliates. Unless and until a final
determination not subject to appeal has been made in accordance with Paragraph
3(d) hereof that the Executive has violated this Paragraph 3, an asserted
violation of the provisions of this Paragraph 3 shall not constitute a basis for
deferring or withholding any amounts otherwise payable to the Executive under
this Agreement.

         (b) As used herein, the term "confidential information, knowledge or
data" means all trade secrets, proprietary and confidential business information
belonging to, used by, or in the possession of the Company or any of its
affiliates and subsidiaries, including but not limited to information, knowledge
or data related to business strategies, plans and financial




information, mergers, acquisitions or consolidations, purchase or sale of
property, leasing, pricing, sales programs or tactics, actual or past sellers,
purchasers, lessees, lessors or customers, those with whom the Company or its
affiliates and subsidiaries has begun negotiations for new business, costs,
employee compensation, marketing and development plans, inventions and
technology, whether such confidential information, knowledge or data is oral,
written or electronically recorded or stored, except information in the public
domain, information known by the Executive prior to employment with the Company,
and information received by the Executive from sources other than the Company or
its affiliates and subsidiaries, without obligation of confidentiality.

         (c) The confidential knowledge, information and data, as defined in the
previous subdivision, gained in the performance of the Executive's duties
hereunder may be valuable to those who are now, or might become, competitors of
the Company or its affiliates and subsidiaries. Accordingly, the Executive
agrees that he will not, without the approval of the Chief Executive Officer of
the Company, which approval shall not be unreasonably withheld, for the period
of two years from his termination of employment, directly own, manage, operate,
join, control, become employed by, consult to or participate in the ownership,
management, or control of any business which is in direct competition with any
business maintained by the Company and/or its affiliates and subsidiaries as of
the date of his termination of employment provided that the foregoing shall not
restrict the Executive from participating as a passive investor owning not in
excess of 5% of the equity of any such competing business. Further, the
Executive agrees that, for two years following his termination of employment, he
will not, directly or indirectly, solicit or hire, or encourage the solicitation
or hiring of any person who was a managerial or higher level employee of the
Company or any of its




affiliates or subsidiaries at any time during the term of the Executive's
employment by the Company by any employer other than the Company or any of its
affiliates and subsidiaries for any position as an employee, independent
contractor, consultant or otherwise. The foregoing agreement of the Executive
shall not apply to any person after 6 months have elapsed subsequent to the date
on which such person's employment by the Company or any of its affiliates or
subsidiaries has terminated.

         (d) In the event of a breach by the Executive of any of the agreements
set forth in Paragraphs 3(a), (b) or (c) above, it is agreed that the Company
shall suffer irreparable harm for which money damages are not an adequate
remedy, and that, in the event of such breach, the Company shall be entitled to
obtain an order of a court of competent jurisdiction for equitable relief from
such breach, including, but not limited to, temporary restraining orders and
preliminary and/or permanent injunctions against the breach of such agreements
by the Executive.

         (e) If the Company shall institute any legal action against the
Executive for breach of this Agreement and shall be unsuccessful in obtaining
a final judgment of a court of competent jurisdiction not subject to appeal
affirming such breach, the Company shall reimburse the Executive for the
Executive's reasonable legal fees and costs incurred in defending such legal
action.

         4. Vested benefits and other amounts that the Executive is otherwise
entitled to receive under the Company's incentive compensation plans, the
Pension Plans or any other plan, policy, practice or program of, or any contract
or agreement with, the Company on or after his termination of employment shall
be payable in accordance with the terms of each such plan, policy, practice,
program, contract or agreement, as the case may be, except as explicitly
modified by this Agreement.




         5. The Executive does hereby waive, release and discharge the Company,
its parent corporation, subsidiaries, affiliates, successors and assigns and
their respective directors, trustees, officers, agents, representatives,
employees and employee benefit plans (hereinafter referred to collectively as
the "Releasees"), both individually and in their official capacity, of and from
any and all claims and causes of action of any kind, that he, his heirs,
executors, administrators, agents or assigns ever had, now have or may have,
whether known or unknown, with respect to, arising out of, or as a result of his
employment or termination of his employment. This Agreement includes but is not
limited to all claims or causes of action which might have been asserted under
the federal, state or city laws prohibiting employment discrimination based on
race, color, sex, religion, national origin, age, disability, sexual
orientation, or marital status, including but not limited to the federal Age
Discrimination in Employment Act, 29 U.S.C. 623, ET. SEQ.; the federal Equal Pay
Act, 29 U.S.C. 206(d), ET. SEQ.; Title VII of the Civil Rights Act of 1964, 42
U.S.C. 2000 e, ET SEQ.; 42 U.S.C. 1981; the Civil Rights Act of 1991; the
federal Fair Labor Standards Act; the New York State Human Rights Law; the New
York City Human Rights Law; the Employee Retirement Income Security Act of 1974;
the Americans with Disabilities Act; all as amended; claims for wrongful
discharge, unjust dismissal, or constructive discharge; claims for breach of any
alleged oral, written or implied contract of employment; claims for salary,
severance payments, bonuses or other compensation of any kind; claims for libel,
slander, defamation and attorneys' fees and any other claims under any contract
or otherwise at common law or any other law, regulation or ordinance in any
action, suit or administrative or other proceeding before any city, state or
federal court or agency; provided, however, that this waiver, release and
discharge shall not apply to any claim that may arise after this Agreement
becomes effective, including any breach of this Agreement by the Company. This
Agreement is intended to include in its effect, without limitation, all claims
which have arisen and of which the




Executive knows or does not know, should have known, had reason to know or
suspects to exist in his favor at the time this Agreement becomes effective, and
this Agreement contemplates the extinguishment of any such claim or claims.

         6. Neither the Executive nor any person, organization or any other
entity acting on the Executive's behalf will file, charge, claim, sue or pursue,
cause or permit to be filed, charged, claimed or pursued any charge, complaint,
or other action, suit or proceeding for damages or other relief (including
injunctive, declaratory, monetary relief, attorneys' fees or other) against the
Releasees involving any matter occurring in the past up to the effective date of
this Agreement, or involving any continuing effects of any actions or practices
which arose prior to the effective date of this Agreement. Notwithstanding the
foregoing, nothing in this Agreement is intended to prohibit the Executive from
filing, or impose any condition, penalty or other limitation adversely affecting
the Executive's right to file, a charge or complaint, including a challenge to
the validity of the waiver included in this Agreement, with the federal Equal
Employment Opportunity Commission ("EEOC"), or to participate in any
investigation or proceeding conducted by the EEOC.

         7. The Executive understands that he has until September 22, 2000,
which is a period of more than twenty-one days, to consider this Agreement and
that he may choose to execute this Agreement before the expiration of the
twenty-one day period. In the event the Executive fails to execute and deliver
this Agreement to the Company's Vice President-Human Resources by such date,
this Agreement shall not take effect and shall be null and void. The Executive
represents that he has carefully read and fully understands the provisions and
effects of this Agreement, that he has had the opportunity to discuss all
aspects of this Agreement thoroughly with his attorney, that he is voluntarily
entering into this Agreement, and that neither




the Company nor its trustees, officers, employees, agents, representatives or
employee benefit plans made any representations concerning the terms or effects
of this Agreement other than those contained herein. The Company hereby advises
the Executive to consult with an attorney prior to executing this Agreement, and
the Company shall reimburse the Executive for his reasonable attorneys fees and
costs not exceeding $4,500 incurred by the Executive in connection with review
of this Agreement. The Executive agrees that he will not disclose the terms,
amounts, fact or circumstances of this Agreement except to members of his
family, his attorney or his accountant or other financial advisor and except as
required by law.

         8. The Executive acknowledges that this Agreement includes a waiver of
rights or claims under the federal Age Discrimination in Employment Act, 29
U.S.C. 623 ET SEQ., as amended by the Older Workers Benefit Protection Act, Pub.
L. 101-433, in consideration of the benefits that are to be provided to him by
the Company under this Agreement, which are in addition to anything of value to
which the Executive is otherwise entitled. The Executive further acknowledges
that he has been advised in writing to consult with an attorney prior to
executing this Agreement. For the period of seven days after the Executive
executes and delivers this Agreement the Executive may revoke this Agreement by
delivering written notice of revocation to the Company to the attention of its
Vice President-Human Resources. The revocation shall be effective upon receipt
of the notice by the Vice President- Human Resources. In the event of such
revocation this Agreement shall become null and void and of no force and effect.
In the absence of a revocation this Agreement shall become effective upon the
opening of business on the first day following the expiration of the revocation
period.

         9. Neither the Executive nor any other person that may be entitled to
any payment hereunder shall have the power to transfer, assign, anticipate,
mortgage or otherwise encumber




any right to receive a payment hereunder in advance of such payment, and any
attempted transfer, assignment, anticipation, mortgage or encumbrance shall be
void.

         10. The Company shall not be required to segregate any funds
representing any amounts payable under this Agreement, and nothing in this
Agreement shall be construed as providing for such segregation. In addition, the
Company shall not be deemed to be a trustee or a fiduciary for the Executive of
any such amounts, and the liabilities of the Company to the Executive in respect
of such amounts shall be those of a debtor pursuant to such contract obligations
as are created by this Agreement, and no such liabilities of the Company shall
be deemed to be secured by any pledge or other encumbrance on any property of
the Company. The amounts payable under this Agreement, other than amounts
payable under the Company's Retirement Plan for Management Employees, shall be
payable out of the general assets of the Company.

         11. The Company may withhold from any amount payable under this
Agreement such federal, state or local taxes as it may determine to be required
to be withheld pursuant to any applicable law or regulation.

         12. In the event that any one or more of the provisions contained in
this Agreement shall for any reason be held to be unenforceable in any respect
under the laws of any state or of the United States of America, such
unenforceability shall not affect any other provisions of this Agreement, but,
with respect only to that jurisdiction holding the provision to be
unenforceable, this Agreement shall then be construed as if such unenforceable
provision or provisions had never been contained in this Agreement, such that
the remaining provisions shall, to the extent




possible, be carried into effect, taking into account the general purpose and
spirit of this Agreement.

         13. This Agreement sets forth the parties' full understanding
pertaining to the subject matter hereof, and fully supersedes any and all prior
agreements or understanding between the parties pertaining to such matter.

         14. This Agreement shall be governed by and construed in accordance
with the laws of the State of New York applicable to agreements executed and
performed entirely therein. This Agreement may not be amended or modified
otherwise than by written agreement executed by the parties hereto or their
respective successors or legal representatives.

         PLEASE READ CAREFULLY. THIS AGREEMENT INCLUDES A RELEASE OF ALL KNOWN
AND UNKNOWN CLAIMS. THE EXECUTIVE ACKNOWLEDGES THAT HE HAS READ THIS AGREEMENT,
UNDERSTANDS IT AND IS VOLUNTARILY ENTERING INTO IT.

         IN WITNESS WHEREOF, the parties have executed this Agreement as of the
day and year first above written.

                                             CONSOLIDATED EDISON COMPANY
                                             OF NEW YORK, INC.



                                             By
                                                 ------------------------------
                                                      Richard P. Cowie
                                                      Vice President-
                                                      Human Resources




                                                 ------------------------------
                                                      J. Michael Evans


STATE OF NEW YORK      )
                           ) ss.:
COUNTY OF ____________ )

                  On the 22nd day of August, 2000, before me personally came
J. Michael Evans to me known to be the individual described in and who executed
the foregoing instrument and he acknowledged to me that he executed the
instrument.



                                                  -----------------------------
                                                  Notary Public



                            CONSOLIDATED EDISON, INC.

                       RATIO OF EARNINGS TO FIXED CHARGES

                               TWELVE MONTHS ENDED
                             (Thousands of Dollars)




                                                                  SEPTEMBER                SEPTEMBER
                                                                    2000                     1999

                                                              ------------------      ------------------

                                                                               

Earnings

      Net Income for Common Stock                                      $658,316                $710,883
      Preferred Dividends                                                13,593                  13,593
      Federal Income Tax                                                294,548                 432,052
                                                              ------------------      ------------------

                Total Earnings Before Federal Income Tax                966,457               1,156,528

Fixed Charges*                                                          411,362                 348,021
                                                              ------------------      ------------------
                Total Earnings Before Federal Income Tax
                   and Fixed Charges                                 $1,377,819              $1,504,549
                                                              ==================      ==================



      * Fixed Charges

      Interest on Long-Term Debt                                       $336,842                $298,281
      Amortization of Debt Discount, Premium and Expense                 12,762                  13,687
      Interest on Component of Rentals                                   17,579                  18,213
      Other Interest                                                     44,179                  17,840
                                                              ------------------      ------------------

                Total Fixed Charges                                    $411,362                $348,021
                                                              ==================      ==================



      Ratio of Earnings to Fixed Charges                                   3.35                    4.32




                  CONSOLIDATED EDISON COMPANY OF NEW YORK, INC.

                       RATIO OF EARNINGS TO FIXED CHARGES

                               TWELVE MONTHS ENDED
                             (Thousands of Dollars)




                                                                   SEPTEMBER                SEPTEMBER
                                                                     2000                      1999

                                                              ---------------------   --------------------

                                                                                

Earnings

         Net Income                                                    $656,844                $718,914
         Federal Income Tax                                             280,285                 426,820
                                                              ---------------------   ---------------------

                    Total Earnings Before Federal Income Tax            937,129               1,145,734

Fixed Charges*                                                          376,241                 338,989
                                                              ---------------------   ---------------------
                    Total Earnings Before Federal Income Tax
                       and Fixed Charges                             $1,313,370              $1,484,723
                                                              =====================   =====================



         * Fixed Charges

         Interest on Long-Term Debt                                    $306,898                $291,252
         Amortization of Debt Discount, Premium and Expense              12,762                  13,687
         Interest on Component of Rentals                                17,579                  18,213
         Other Interest                                                  39,002                  15,837
                                                              ---------------------   ---------------------

                    Total Fixed Charges                                $376,241                $338,989
                                                              =====================   =====================



         Ratio of Earnings to Fixed Charges                                3.49                    4.38



              ORANGE AND ROCKLAND UTILITIES, INC. AND SUBSIDIARIES

                       RATIO OF EARNINGS TO FIXED CHARGES

                               Twelve Months Ended
                             (Thousands of Dollars)




                                                                              SEPTEMBER           SEPTEMBER
                                                                                2000                1999

                                                                          -----------------  -----------------

                                                                                      

Earnings

        Net Income                                                                $36,579              $20,409
        Federal Income Tax                                                          9,410               45,233
        State Income Tax                                                            2,461                2,317
                                                                         -----------------  -------------------

        Total Earnings Before Federal and State Income Tax                         48,450               67,959

Fixed Charges*                                                                     33,475               39,015
                                                                         -----------------  -------------------
                    Total Earnings Before Federal and State
                       Income Tax and Fixed Charges                               $81,925             $106,974
                                                                         =================  ===================



        * Fixed Charges

        Interest on Long-Term Debt                                                $23,276              $25,477
        Amortization of Debt Discount, Premium and Expense                          1,112                1,191
        Interest Component on lease Payment                                         5,918                5,442
        Other Interest                                                              3,169                6,905
                                                                         -----------------  -------------------

                    Total Fixed Charges                                           $33,475              $39,015
                                                                         =================  ===================




        Ratio of Earnings to Fixed Charges                                           2.45                 2.74

 


 UT

THE SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTACTED FROM CONSOLIDATED
BALANCE SHEET, INCOME STATEMENT AND STATEMENT OF CASH FLOWS FOR CONSOLIDATED
EDISON, INC. AND IS QUALIFIED IN ITS ENTIRETY BY REFERENCE TO SUCH FINANCIAL
STATEMENTS AND THE NOTES THERETO.

 0001047862
 CONSOLIDATED EDISON, INC.
 1,000

                             
                   9-MOS
                          DEC-31-2000
                               SEP-30-2000
                                  PER-BOOK
                   11,914,540
                    550,315
                       1,817,516
                     2,225,579
                                       0
                              16,507,950
                                       588,720
                      857,742
                          5,111,002
               5,542,724
                           37,050
                                    212,563
                         5,222,309
                                   0
                            0
                 243,004
                  158,910
                            0
                     32,283
                                 2,720
               5,056,387
               16,507,950
                    7,181,265
                           265,141
                   6,077,213
                   6,342,354
                        838,911
                               8,907
                 847,818
                       300,871
                                   546,947
                     10,194
                  536,753
                       346,754
                      266,370
                         747,287
                                       2.53
                                     2.53

 


 UT

THE SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM CONSOLIDATED
BALANCE SHEET, INCOME STATEMENT AND STATEMENT OF CASH FLOWS FOR CONSOLIDATED
EDISON COMPANY OF NEW YORK, INC. AND IS QUALIFIED IN ITS ENTIRETY BY REFERENCE
TO SUCH FINANCIAL STATEMENTS AND THE NOTES THERETO.

 0000023632
 CONSOLIDATED EDISON COMPANY OF NEW YORK, INC.
 1,000

                             
                   9-MOS
                          DEC-31-2000
                               SEP-30-2000
                                  PER-BOOK
                   10,902,056
                    359,957
                       1,524,458
                     1,573,592
                                       0
                              14,360,063
                                       588,720
                      857,737
                          4,056,978
               4,541,343
                           37,050
                                    212,563
                         4,716,901
                                   0
                            0
                 164,969
                  150,000
                            0
                     32,184
                                 2,720
               4,502,333
               14,360,063
                    6,107,202
                           251,184
                   5,061,785
                   5,312,969
                        794,233
                               5,956
                 800,189
                       274,256
                                   525,933
                     10,194
                  515,739
                       346,754
                      243,532
                         713,288
                                          0
                                        0

 


 UT

THE SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM CONSOLIDATED
BALANCE SHEET, INCOME STATEMENT AND STATEMENT OF CASH FLOWS FOR ORANGE AND
ROCKLAND UTILITIES, INC. AND IS QUALIFIED IN ITS ENTIRETY BY REFERENCE TO SUCH
FINANCIAL STATEMENT AND THE NOTES THERETO.

 0000074778
 ORANGE AND ROCKLAND UTILITIES, INC.
 1,000

                             
                   9-MOS
                          DEC-31-1999
                               SEP-30-2000
                                  PER-BOOK
                      708,278
                      3,258
                         185,033
                       191,115
                                       0
                               1,087,684
                                             5
                      194,499
                            142,156
                 336,660
                                0
                                          0
                           335,628
                                   0
                            0
                       0
                        0
                            0
                          0
                                     0
                 415,396
                1,087,684
                      522,471
                            14,035
                     460,710
                     474,745
                         47,726
                               3,709
                  51,435
                        19,070
                                    32,365
                          0
                   32,365
                             0
                       17,286
                          46,997
                                          0
                                        0