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ConEd: Replacing aging gas pipelines could take decades

  • Consolidated Edison (ED) reckons it will take four decades - and cost $10B - to replace the hundreds of miles of aging iron and unprotected steel gas pipelines that form a large part of its infrastructure.
  • The issue has taken on new urgency following the gas explosion in Harlem in March, which killed eight people and injured dozens of others.
  • From 2010-2013, ConEd replaced 83 miles of cast-iron pipelines, leaving it with another 1,110 miles. ConEd has another 1,084 miles of unprotected steel gas pipes, nearly all of which the utility intends to replace.
Comments (10)
  • al roman
    , contributor
    Comments (4613) | Send Message
     
    The whole industry has been sounding about infrastructure.And it takes $$ and manpower to resolve.
    2 Apr, 08:55 AM Reply Like
  • WZT
    , contributor
    Comments (28) | Send Message
     
    If there continue to be events such as what happened in Harlem there will be a sudden urgency from all utilities to get the job done. That means the cost of this delivery service will have to increase, profits will not keep up with the expense for a period of time, and the dividend may have to be reduced. I recently recall having read an article that Con Ed agreed with NY to freeze rates or hold them to a predetermined level. The specifics are a little fuzzy so do your own homework for clarity but I do remeber thinking this could effect future profits.
    What I am interested in is who manufactures the pipe and equipment needed to repair and replace the old infrastructure?
    2 Apr, 10:57 AM Reply Like
  • al roman
    , contributor
    Comments (4613) | Send Message
     
    Some of it is over 80 years old and runs underground and a lot has changed in 80 years !
    with a stress problem we have to be aware and adjust our use too.The cause of a breakdown have wider effects.
    2 Apr, 11:05 AM Reply Like
  • Qniform
    , contributor
    Comments (2460) | Send Message
     
    Regulated utilities are allowed a negotiated ROC. Costs are ultimately passed on to consumers, and even if there is some "lag" in when the rates are adjusted, there are catch-up provisions. Rate guarantees (or freezes) are not part of this landscape in the event costs go up. In the utility landscape, it is mostly the private, unregulated activities (e.g. energy commodity supply), which get them into financial difficulties.
    2 Apr, 01:49 PM Reply Like
  • User 15394812
    , contributor
    Comments (2) | Send Message
     
    The amortization of historical cost does not come close to the true expense for the nearly all industries. It is especially difficult when an industry is regulated.
    2 Apr, 07:20 PM Reply Like
  • Qniform
    , contributor
    Comments (2460) | Send Message
     
    "The amortization of historical cost does not come close to the true expense ..." True enough. My point is that when money must be spent for infrastructure, it is built into rates or it will not be spent.
    2 Apr, 10:41 PM Reply Like
  • al roman
    , contributor
    Comments (4613) | Send Message
     
    To raise the rates to the revenue that's truly needed would flatten this economy.
    3 Apr, 06:48 AM Reply Like
  • WZT
    , contributor
    Comments (28) | Send Message
     
    Thanks to all for the comments. I helped bring clarity to my concerns. I have been invested in Con Ed for 5 or 6 years and over the various market girations we have witnessed during that time it has proven to be a very solid and profitable stock to hold. I can't ever remember having any substantial concerns over significant losses with Con Ed when most if not all of my other investments were crumbling. i.e. The 2008 market crash. WZT
    6 Apr, 02:57 PM Reply Like
  • etq2000
    , contributor
    Comments (3) | Send Message
     
    What an enormous task ahead! It probably should have received a higher priority years ago, but there are always reasons, many of them sound, to divert finances and resources to other areas. If it takes four decades, so be it. Just stay the course.
    17 Apr, 03:14 PM Reply Like
  • WZT
    , contributor
    Comments (28) | Send Message
     
    etq200:
    Yes it is an enormous task. Another possible reason for the procrastination of the task could be compliance with the Feds. on emissions and the green energy initiatives.
    20 Apr, 03:56 PM Reply Like
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