Consolidated Edison, Inc. (ED) Balance Sheet

The sequential increase from $56.1B in Q1 2026 to $57.6B in Q2 2026, coupled with a $1.2B quarterly capex, indicates a deliberate push to expand rate base. This growth trajectory appears aligned with the company's strategy to recover investments through regulated returns, though the pace of asset growth may outpace regulatory approvals, potentially widening the gap between authorized and earned ROE.

The equity-to-assets ratio remained stable at 0.34, but the absolute increase in PPE ($7.2B over the period) versus equity growth ($4.1B) implies a rising reliance on debt to finance the capital program. This trend may pressure future rate case outcomes if regulators view the capital structure as overly leveraged, potentially reducing the allowed ROE.

While the D/E ratio appears stable, the absolute debt increase from $25.0B to $28.3B over the last five quarters suggests the company is funding its capex program with incremental borrowings. This is typical for utilities, but the pace of debt accumulation may warrant monitoring, especially if interest rates remain elevated, as higher financing costs could compress earnings if not fully recovered in rates.

The equity-to-assets ratio has held steady at 0.34, but the absolute equity growth of $4.1B over the period is less than half the PPE increase, implying that a significant portion of asset growth is funded by debt. This may indicate a reliance on external equity issuance or DRIP programs to maintain the capital structure, which could dilute existing shareholders if not offset by rate base growth.

The significant cash build in Q2 2026, likely from seasonal working capital inflows and regulatory deferrals, provides a cushion for construction financing. However, the current ratio remains below the peer average of 0.68, suggesting that ED's liquidity is adequate but not exceptional, and the company may still rely on its revolver or commercial paper for short-term needs.

The consistent capex spend, coupled with the prior income statement analysis showing revenue growth of 13.2% year-over-year, suggests that rate base growth is translating into revenue. However, the risk of regulatory lag remains, as the NYPSC may not grant rate increases fast enough to cover the rising capital costs, potentially compressing earned ROE below authorized levels.