WEBVTT 00:00:00.000 --> 00:00:03.200 Welcome to the Deep Dive. Today, we're peeling 00:00:03.200 --> 00:00:06.580 back the layers on one of the most foundational 00:00:06.580 --> 00:00:09.300 companies in American history, Consolidated Edison, 00:00:09.539 --> 00:00:12.539 or just Cone Ed. Right. You sent us a stack of 00:00:12.539 --> 00:00:14.919 sources detailing this massive energy provider, 00:00:15.099 --> 00:00:17.420 and what we found goes far beyond just, you know, 00:00:17.440 --> 00:00:19.699 utility bills. Oh, much further. This is a story 00:00:19.699 --> 00:00:22.780 of explosive history, both literally and figuratively. 00:00:23.359 --> 00:00:26.100 We're talking nearly 200 years of operation and 00:00:26.100 --> 00:00:28.379 infrastructure so vast it connects Thomas Edison, 00:00:28.559 --> 00:00:31.820 Tammany Hall, and the world's largest steam system. 00:00:31.940 --> 00:00:34.640 Our mission today is to really synthesize the 00:00:34.640 --> 00:00:37.020 complexity of ConEd. I mean, we are looking at 00:00:37.020 --> 00:00:40.039 an enterprise with over $70 billion in assets, 00:00:40.119 --> 00:00:42.840 according to 2024 data. $70 billion. And it holds 00:00:42.840 --> 00:00:45.630 this. singular, essential, and let's be honest, 00:00:45.770 --> 00:00:48.030 often deeply controversial role in the New York 00:00:48.030 --> 00:00:50.390 metropolitan area. So we're going to trace its 00:00:50.390 --> 00:00:52.490 journey from a 19th century gaslight company 00:00:52.490 --> 00:00:55.869 to a 21st century energy distributor. We'll highlight 00:00:55.869 --> 00:00:57.990 the staggering scale of its systems, so much 00:00:57.990 --> 00:01:00.469 of which is hidden, and the accountability challenges 00:01:00.469 --> 00:01:03.350 that inevitably come with powering nearly 9 million 00:01:03.350 --> 00:01:06.090 people. Okay, let's unpack this. We have to start 00:01:06.090 --> 00:01:08.609 with a history lesson that predates the Civil 00:01:08.609 --> 00:01:11.670 War, because the story of this utility is... 00:01:11.900 --> 00:01:15.739 Just it's completely tangled up with the physical 00:01:15.739 --> 00:01:18.219 and political growth of New York City itself. 00:01:18.659 --> 00:01:21.099 Absolutely. The lineage here is extraordinarily 00:01:21.099 --> 00:01:23.980 long. And the earliest corporate predecessor 00:01:23.980 --> 00:01:26.400 of Con Ed wasn't even about electricity. No, 00:01:26.439 --> 00:01:29.280 it was about light. Gaslight. Exactly. Light. 00:01:29.420 --> 00:01:32.060 That company was called the New York Gaslight 00:01:32.060 --> 00:01:34.579 Company, and it was incorporated by the 46th 00:01:34.579 --> 00:01:37.040 New York State Legislature way back on March 00:01:37.040 --> 00:01:40.400 23, 1823. That's the starting point. The move 00:01:40.400 --> 00:01:43.180 from, you know, oil lamps and candles to gaslight 00:01:43.180 --> 00:01:45.700 must have been a massive leap forward for a city. 00:01:45.780 --> 00:01:47.640 I mean, revolutionary technology for the time. 00:01:47.719 --> 00:01:49.680 It was completely transformative. And what gave 00:01:49.680 --> 00:01:52.540 this new company its huge early value wasn't 00:01:52.540 --> 00:01:54.359 just the tech. It was the politics. Of course. 00:01:54.540 --> 00:01:57.859 On May 12, 1823. the New York Gaslight Company 00:01:57.859 --> 00:02:00.519 received the exclusive right, the franchise, 00:02:00.859 --> 00:02:04.099 to lay gas pipes south of Grand Street. Exclusive. 00:02:04.120 --> 00:02:07.939 So a monopoly. A monopoly. In a rapidly growing 00:02:07.939 --> 00:02:10.560 city, that kind of control over infrastructure 00:02:10.560 --> 00:02:13.620 in the most valuable commercial district, that 00:02:13.620 --> 00:02:15.979 was the single most vital piece of the puzzle. 00:02:16.139 --> 00:02:18.819 It completely insulated them from competition 00:02:18.819 --> 00:02:22.750 and guaranteed a revenue stream. And the stability 00:02:22.750 --> 00:02:24.550 of that revenue must have been obvious right 00:02:24.550 --> 00:02:28.210 away because just a year later, 1824, this little 00:02:28.210 --> 00:02:30.229 company was listed on the New York Stock Exchange. 00:02:30.729 --> 00:02:33.229 It was. And this is where the historical significance 00:02:33.229 --> 00:02:36.270 really lands for you, the listener. That listing 00:02:36.270 --> 00:02:39.469 in 1824, it means that Con Ed's earliest ancestor 00:02:39.469 --> 00:02:42.069 holds the record as the longest continuously 00:02:42.069 --> 00:02:44.909 listed stock on the NYSE. That's incredible. 00:02:45.110 --> 00:02:47.449 Think about all the economic upheavals, the wars, 00:02:47.569 --> 00:02:49.770 the depressions, the regulatory changes since 00:02:49.770 --> 00:02:53.050 1824. The fundamental necessity of utilities, 00:02:53.330 --> 00:02:55.009 once you get that strong government franchise, 00:02:55.430 --> 00:02:58.349 has kept that stock listed for two full centuries. 00:02:58.629 --> 00:03:00.610 That remarkable duration. It doesn't just speak 00:03:00.610 --> 00:03:03.870 to business savvy, but to political skill, because 00:03:03.870 --> 00:03:06.530 building anything in 19th century New York wasn't 00:03:06.530 --> 00:03:08.789 really an engineering problem, was it? No, it 00:03:08.789 --> 00:03:10.729 was a political negotiation. It required being 00:03:10.729 --> 00:03:12.770 completely immersed in the system. And that system 00:03:12.770 --> 00:03:15.110 was Tammany Hall. Right. In the early to mid 00:03:15.110 --> 00:03:18.509 19th century, if you wanted to expand any major 00:03:18.509 --> 00:03:20.789 business, you needed the approval of the Board 00:03:20.789 --> 00:03:23.500 of Aldermen. They granted the street franchises. 00:03:23.780 --> 00:03:26.259 By the time we get to the Gilded Age, Tammany 00:03:26.259 --> 00:03:28.319 Hall controlled the board. And by extension, 00:03:28.479 --> 00:03:30.560 they controlled who got to lay pipes and wires. 00:03:30.840 --> 00:03:32.360 And the sources show that the political machine 00:03:32.360 --> 00:03:34.879 didn't just, you know, approve these businesses. 00:03:34.960 --> 00:03:36.620 They were directly involved. They were fully 00:03:36.620 --> 00:03:39.319 integrated. We see this most clearly during the 00:03:39.319 --> 00:03:44.280 reign of William Boss Tweed. By 1871, Tweed himself, 00:03:44.639 --> 00:03:48.400 the infamous boss of Tammany Hall, he was documented 00:03:48.400 --> 00:03:50.300 as being a member of the board of the Harlem 00:03:50.300 --> 00:03:53.409 Gaslight Company. Which was a precursor to Con 00:03:53.409 --> 00:03:56.289 Ed. One of the many precursors. This early history 00:03:56.289 --> 00:03:58.569 just shows you that the utility was born from 00:03:58.569 --> 00:04:01.370 this fusion of state sanctioned monopoly and 00:04:01.370 --> 00:04:03.930 raw political patronage. I mean, it's the original 00:04:03.930 --> 00:04:05.930 blueprint for how large American corporations 00:04:05.930 --> 00:04:08.430 operated in cities. So Tammany Hall provides 00:04:08.430 --> 00:04:11.430 the political consolidation and then the technological 00:04:11.430 --> 00:04:13.550 consolidation happens as these gas companies 00:04:13.550 --> 00:04:16.430 start merging together. Exactly. On November 00:04:16.430 --> 00:04:20.569 10th, 1884. Six of the big gas companies, including 00:04:20.569 --> 00:04:22.750 the original New York Gaslight and the Harlem 00:04:22.750 --> 00:04:25.529 Gaslight Company, they all merged to form the 00:04:25.529 --> 00:04:27.870 Consolidated Gas Company of New York. Makes sense. 00:04:28.069 --> 00:04:31.310 Consolidation. It was all about efficiency, streamlining 00:04:31.310 --> 00:04:33.730 operations across the city that was just exploding 00:04:33.730 --> 00:04:37.579 in size. The future of light wasn't gas anymore. 00:04:37.720 --> 00:04:40.259 It was electricity. And this is where the name 00:04:40.259 --> 00:04:43.060 Edison becomes part of the corporate DNA, even 00:04:43.060 --> 00:04:44.980 though he started out as a competitor. That's 00:04:44.980 --> 00:04:46.959 right. Consolidated gas saw where things were 00:04:46.959 --> 00:04:49.240 headed, and they bought the Edison Illuminating 00:04:49.240 --> 00:04:52.300 Company in 1901. Thomas Edison had founded that 00:04:52.300 --> 00:04:55.139 company in 1880, pioneering DC power. And his 00:04:55.139 --> 00:04:57.199 initial system was tiny, right? Incredibly small. 00:04:57.319 --> 00:04:59.680 When he started, his system supplied electricity 00:04:59.680 --> 00:05:02.519 to just 59 customers in a single square mile 00:05:02.519 --> 00:05:05.040 of lower Manhattan. So the acquisition was a 00:05:05.040 --> 00:05:07.740 brilliant strategic move by the gas company to 00:05:07.740 --> 00:05:10.959 just dominate the emerging electric market. We 00:05:10.959 --> 00:05:13.000 always talk about the war of currents, Edison's 00:05:13.000 --> 00:05:16.620 DC versus Westinghouse's AC. This suggests that 00:05:16.620 --> 00:05:18.560 after the war was technically won by AC, the 00:05:18.560 --> 00:05:20.920 real battle was just who controlled the infrastructure 00:05:20.920 --> 00:05:24.129 itself. That's a really sharp insight. The technical 00:05:24.129 --> 00:05:26.629 battle may have favored AC for transmission, 00:05:26.949 --> 00:05:29.470 but the corporate battle was all about market 00:05:29.470 --> 00:05:32.509 share and who owned the wires. And after that 00:05:32.509 --> 00:05:35.149 period of intense competition, you had over 30 00:05:35.149 --> 00:05:37.509 companies distributing electricity in the region. 00:05:37.709 --> 00:05:42.050 But by 1920, Consolidated Gas's electricity arm, 00:05:42.170 --> 00:05:44.009 which was then called the New York Edison Company, 00:05:44.310 --> 00:05:47.250 had just used its financial power and its existing 00:05:47.250 --> 00:05:49.449 infrastructure base to crush the competition. 00:05:49.769 --> 00:05:51.769 So they're the Consolidated Gas. gas company, 00:05:51.889 --> 00:05:54.149 but their main product is clearly electricity. 00:05:54.550 --> 00:05:56.529 How long did it take for the corporate name to 00:05:56.529 --> 00:05:59.089 catch up? Decades. Which, you know, it says a 00:05:59.089 --> 00:06:00.990 lot about corporate inertia. It wasn't until 00:06:00.990 --> 00:06:03.750 1936 that the name finally changed. That prompted 00:06:03.750 --> 00:06:07.350 it. The company's own annual report. It revealed 00:06:07.350 --> 00:06:10.970 this stark fact. Approximately 75 % of their 00:06:10.970 --> 00:06:13.089 gross operating revenue came from electricity. 00:06:13.579 --> 00:06:15.579 They were basically an electric company pretending 00:06:15.579 --> 00:06:18.000 to be a gas company. So the realization that 00:06:18.000 --> 00:06:20.319 three quarters of their income came from electrons, 00:06:20.420 --> 00:06:23.259 not methane, finally forced the change. Correct. 00:06:23.300 --> 00:06:26.839 On March 16th, 1936, the stockholders voted to 00:06:26.839 --> 00:06:29.160 change the name to Consolidated Edison Company 00:06:29.160 --> 00:06:31.959 of New York, Inc. It just reflects that major 00:06:31.959 --> 00:06:35.660 operational shift from just light and heat to 00:06:35.660 --> 00:06:38.259 being an integrated energy utility. OK, let's 00:06:38.259 --> 00:06:40.399 fast forward to the modern era. The whole utility 00:06:40.399 --> 00:06:43.519 industry goes through deregulation. How did Ken 00:06:43.519 --> 00:06:46.459 Ed... adapt its structure for that? The structure 00:06:46.459 --> 00:06:48.939 changed fundamentally in the late 90s. After 00:06:48.939 --> 00:06:51.300 deregulation in New York State, Consolidated 00:06:51.300 --> 00:06:54.079 Edison Inc. was formed on January 1st, 1998. 00:06:54.480 --> 00:06:56.620 It became a holding company. Which is a pretty 00:06:56.620 --> 00:06:59.420 typical post -deregulation move. It is. This 00:06:59.420 --> 00:07:01.939 parent structure lets the main company own the 00:07:01.939 --> 00:07:04.740 regulated utilities, but also potentially some 00:07:04.740 --> 00:07:07.699 non -regulated energy services. It insulates 00:07:07.699 --> 00:07:10.220 the core utility from non -utility risks and 00:07:10.220 --> 00:07:12.660 allows for, you know, more diversified shareholder 00:07:12.660 --> 00:07:15.079 returns. What are the key subsidiaries that are 00:07:15.079 --> 00:07:17.360 actually managing the services we all use today? 00:07:17.519 --> 00:07:19.680 It's a tiered structure. The heart of it is the 00:07:19.680 --> 00:07:22.199 Consolidated Edison Company of New York, Inc., 00:07:22.199 --> 00:07:25.560 or CECONI. That's the regulated utility for electric 00:07:25.560 --> 00:07:28.500 and gas in NYC and Westchester, and importantly, 00:07:28.720 --> 00:07:31.730 that unique steam service in Manhattan. Then 00:07:31.730 --> 00:07:35.069 in 1998, they acquired Orange and Rockland Utilities 00:07:35.069 --> 00:07:37.629 Inc. That's another regulated utility serving 00:07:37.629 --> 00:07:40.889 a big 1300 square mile area in southeastern New 00:07:40.889 --> 00:07:43.050 York and northern New Jersey. And the third piece? 00:07:43.209 --> 00:07:45.649 The third piece is Con Edison Transmission Inc. 00:07:45.810 --> 00:07:48.970 That part focuses on the big stuff, high voltage, 00:07:49.009 --> 00:07:50.930 electric and natural gas transmission projects. 00:07:51.170 --> 00:07:53.230 They're the literal bridges between the power 00:07:53.230 --> 00:07:55.370 sources in the service area. So when we look 00:07:55.370 --> 00:07:57.790 at the money specifically for the regulated utility, 00:07:58.149 --> 00:08:01.199 what defines their business today? While using 00:08:01.199 --> 00:08:05.189 2015 data, The hierarchy is crystal clear. Electricity 00:08:05.189 --> 00:08:09.509 is the engine. Over 70%, 70 .35 % of their sales 00:08:09.509 --> 00:08:12.470 revenue came from electric service. Gas was the 00:08:12.470 --> 00:08:15.310 next biggest truck at about 13 .6%. And that 00:08:15.310 --> 00:08:17.649 unique Manhattan steam system accounted for about 00:08:17.649 --> 00:08:20.089 5%. So while we talk about the history of gas 00:08:20.089 --> 00:08:22.069 and the uniqueness of steam, the economic reality 00:08:22.069 --> 00:08:24.610 is that Kahn is overwhelmingly an electric company. 00:08:24.769 --> 00:08:26.689 That sets us up perfectly for part two, because 00:08:26.689 --> 00:08:29.009 we absolutely have to talk about that grid. The 00:08:29.009 --> 00:08:30.949 scale of this infrastructure, I mean, most of 00:08:30.949 --> 00:08:33.940 it hidden right under our feet. What's fascinating 00:08:33.940 --> 00:08:37.700 here is the sheer infrastructure scale, particularly 00:08:37.700 --> 00:08:40.840 how much of it is hidden from view. It makes 00:08:40.840 --> 00:08:43.480 the maintenance and the complexity just exponential 00:08:43.480 --> 00:08:46.379 compared to overhead systems. We're talking about 00:08:46.379 --> 00:08:49.320 engineering marvels that span thousands and thousands 00:08:49.320 --> 00:08:52.419 of miles operating in the most demanding urban 00:08:52.419 --> 00:08:54.580 environment on Earth. Let's start with that electrical 00:08:54.580 --> 00:08:56.940 network, the subterranean web that's responsible 00:08:56.940 --> 00:09:00.740 for that 70 percent revenue figure. Those mileage 00:09:00.740 --> 00:09:02.919 numbers in the sources were astonishing. They 00:09:02.919 --> 00:09:06.000 really defy easy visualization. The ConEd system 00:09:06.000 --> 00:09:09.840 includes a staggering 93 ,000 miles of underground 00:09:09.840 --> 00:09:13.240 cable. 93 ,000 miles. To give you some perspective, 00:09:13.480 --> 00:09:15.679 that's enough insulated copper and steel cable 00:09:15.679 --> 00:09:18.820 to wrap around the entire Earth 3 .6 times. So 00:09:18.820 --> 00:09:21.259 why is managing 93 ,000 miles of underground 00:09:21.259 --> 00:09:23.840 cable so much more challenging than, say, overhead 00:09:23.840 --> 00:09:27.159 lines in a suburb? Oh, the complexity is multidimensional. 00:09:27.379 --> 00:09:30.139 First... just access. Maintenance means tearing 00:09:30.139 --> 00:09:32.759 up streets, navigating subway tunnels, working 00:09:32.759 --> 00:09:35.200 around a thousand other pipes. It's a logistical 00:09:35.200 --> 00:09:38.720 nightmare. Second is heat. With overhead lines, 00:09:38.899 --> 00:09:42.899 heat just radiates away. But underground, all 00:09:42.899 --> 00:09:45.700 that heat from the electricity is trapped. It 00:09:45.700 --> 00:09:48.179 requires specialized conduits and cooling techniques 00:09:48.179 --> 00:09:50.740 to stop the cables from literally melting down. 00:09:50.899 --> 00:09:53.440 And I imagine water is a constant enemy. A constant, 00:09:53.580 --> 00:09:56.470 ongoing battle in a coastal city. Even the slightest 00:09:56.470 --> 00:09:58.570 damage to cable insulation from construction 00:09:58.570 --> 00:10:01.070 or just the ground shifting allows water in. 00:10:01.190 --> 00:10:04.269 That leads to shorts and eventual failure. The 00:10:04.269 --> 00:10:06.769 sheer density of it all requires this incredibly 00:10:06.769 --> 00:10:09.850 complex, real -time computerized mapping just 00:10:09.850 --> 00:10:11.889 to keep track of everything. It's one of the 00:10:11.889 --> 00:10:14.110 most technologically challenging grids in the 00:10:14.110 --> 00:10:15.990 world to operate. And that's just the stuff we 00:10:15.990 --> 00:10:17.929 can't see. They still have a massive network 00:10:17.929 --> 00:10:20.789 of traditional overhead wires. They do, mostly 00:10:20.789 --> 00:10:23.210 in the less dense areas like Westchester and 00:10:23.210 --> 00:10:25.909 parts of the outer boroughs. The system is complemented 00:10:25.909 --> 00:10:28.730 by nearly 36 ,000 miles of overhead electric 00:10:28.730 --> 00:10:31.570 wires. 36 ,000. That's enough to run a cable 00:10:31.570 --> 00:10:34.590 between New York and Los Angeles 13 times. It's 00:10:34.590 --> 00:10:36.649 the combination of the dense underground network 00:10:36.649 --> 00:10:38.789 and the sprawling overhead one that makes the 00:10:38.789 --> 00:10:41.870 scale so hard to grasp. And to bring power in 00:10:41.870 --> 00:10:44.210 from outside sources, which they rely on heavily 00:10:44.210 --> 00:10:47.110 now, they need extremely high transmission voltages. 00:10:47.389 --> 00:10:49.570 Right. High voltages are key to minimizing energy 00:10:49.570 --> 00:10:52.490 loss over long distances. Kahn's system uses 00:10:52.490 --> 00:10:56.679 138 kilovolts, 300... 345 kilovie and even 500 00:10:56.679 --> 00:11:00.460 kilovie transmission lines. Those 345 and 500 00:11:00.460 --> 00:11:03.220 kilovie corridors are the critical arteries for 00:11:03.220 --> 00:11:05.519 importing bulk power into the city. And since 00:11:05.519 --> 00:11:07.720 they became primarily a distributor, not a generator, 00:11:07.940 --> 00:11:10.059 those external connections are absolutely vital. 00:11:10.159 --> 00:11:12.759 They have to work. They are the lifelines. Con 00:11:12.759 --> 00:11:16.159 Ed has two major 345 kilovie interconnections 00:11:16.159 --> 00:11:18.279 upstate. Those are the key access points for 00:11:18.279 --> 00:11:20.480 regional power markets. And that includes the 00:11:20.480 --> 00:11:23.179 ability to import hydroelectric power from Hydro 00:11:23.179 --> 00:11:24.879 -Quebec. in Canada. And they're connected to 00:11:24.879 --> 00:11:27.460 their neighbors, too. Yep. They have a 345 kilovee 00:11:27.460 --> 00:11:30.299 connection with PSE &G in New Jersey and also 00:11:30.299 --> 00:11:33.019 with Long Island. That facilitates crucial power 00:11:33.019 --> 00:11:35.539 transfers during, you know, heat waves or local 00:11:35.539 --> 00:11:38.000 generation failures. Are there any major future 00:11:38.000 --> 00:11:40.379 projects they're anticipating to shore up that 00:11:40.379 --> 00:11:43.129 supply? The sources highlight two key connections. 00:11:43.590 --> 00:11:48.009 There's a planned, more direct, 345 kV connection 00:11:48.009 --> 00:11:51.250 to New Jersey via the Branchburg -Romapo 500 00:11:51.250 --> 00:11:55.009 kV line. And crucially, the expectation is for 00:11:55.009 --> 00:11:58.289 the Champlain -Hudson Power Express HVDC line 00:11:58.289 --> 00:12:02.549 to come online in 2025. HVDC. That's high voltage 00:12:02.549 --> 00:12:05.250 direct current. Exactly. And that project is 00:12:05.250 --> 00:12:07.490 a potential game changer. It's designed to bring 00:12:07.490 --> 00:12:09.970 huge volumes of clean power directly into the 00:12:09.970 --> 00:12:12.730 city, bypassing a lot of the current grid limitations. 00:12:13.029 --> 00:12:15.269 Okay, moving from the electrical grid to the 00:12:15.269 --> 00:12:17.350 medium that actually started the company. Yeah. 00:12:17.429 --> 00:12:19.830 Gas. Even though it's a smaller revenue driver, 00:12:20.070 --> 00:12:22.710 the gas system is equally immense. The gas system 00:12:22.710 --> 00:12:25.090 is a reminder of Con Ed's founding purpose, and 00:12:25.090 --> 00:12:27.090 that system has also scaled dramatically. It 00:12:27.090 --> 00:12:30.190 consists of nearly 7 ,200 miles of pipes. 7 ,200 00:12:30.190 --> 00:12:32.379 miles. Stretch that out, it would be enough pipe 00:12:32.379 --> 00:12:34.139 to run from New York to Paris and back again. 00:12:34.279 --> 00:12:36.419 And that system serves a very specific geographic 00:12:36.419 --> 00:12:39.580 area within the metro zone. Correct. Con Ed's 00:12:39.580 --> 00:12:42.159 gas service area covers Westchester County, the 00:12:42.159 --> 00:12:44.779 Bronx, Manhattan, and certain parts of Queens. 00:12:45.299 --> 00:12:47.720 But it's important to note the complexity of 00:12:47.720 --> 00:12:50.539 utility zoning in New York. National Grid USA 00:12:50.539 --> 00:12:53.240 handles gas service in Brooklyn, Staten Island, 00:12:53.480 --> 00:12:55.659 and the rest of Queens. It's all chopped up based 00:12:55.659 --> 00:12:58.399 on historical mergers. Exactly. Except for the 00:12:58.399 --> 00:13:00.539 Rockaway Peninsula, which is served by National 00:13:00.539 --> 00:13:03.480 Grid's Long Island operations. It's a real patchwork. 00:13:03.659 --> 00:13:06.179 And the volume of gas flowing through Con Ed's 00:13:06.179 --> 00:13:08.590 system. That gives you a sense of the constant 00:13:08.590 --> 00:13:11.710 demand, especially for heating. It really speaks 00:13:11.710 --> 00:13:14.470 to the continuous, massive energy requirement 00:13:14.470 --> 00:13:17.769 of the city. The average annual volume of gas 00:13:17.769 --> 00:13:20.190 traveling through Con Ed's system could fill 00:13:20.190 --> 00:13:23.350 the Empire State Building nearly 6 ,100 times. 00:13:23.690 --> 00:13:26.330 Wow. That is a truly staggering metric. It is. 00:13:26.470 --> 00:13:27.870 All right, let's shift to the element that makes 00:13:27.870 --> 00:13:31.240 Con Ed globally unique. The New York City steam 00:13:31.240 --> 00:13:33.960 system. It's this almost forgotten marvel of 00:13:33.960 --> 00:13:36.360 urban engineering. It is entirely unique. Con 00:13:36.360 --> 00:13:38.879 Ed operates the largest commercial district steam 00:13:38.879 --> 00:13:41.759 system in the world. And this system, it actually 00:13:41.759 --> 00:13:44.779 predates Con Ed's final corporate form. It began 00:13:44.779 --> 00:13:47.320 service in 1882 as the New York Steam Company. 00:13:47.500 --> 00:13:50.120 And Con Ed acquired it later. They acquired the 00:13:50.120 --> 00:13:53.679 system in 1954. So what's the scope of this steam 00:13:53.679 --> 00:13:56.570 delivery today? Who uses it? It provides high 00:13:56.570 --> 00:13:59.809 -pressure steam to nearly 1 ,600 commercial and 00:13:59.809 --> 00:14:02.730 residential establishments in Manhattan. It spans 00:14:02.730 --> 00:14:05.669 from Battery Park all the way up to 96th Street. 00:14:05.830 --> 00:14:08.110 And the pipes are just running under the busiest 00:14:08.110 --> 00:14:11.529 streets in the world? Roughly 105 miles of mains 00:14:11.529 --> 00:14:14.350 and service pipes, yes. And this isn't just hot 00:14:14.350 --> 00:14:16.809 water. This is superheated, industrial -grade 00:14:16.809 --> 00:14:19.769 steam. How is it made? It's supplied from seven 00:14:19.769 --> 00:14:22.860 power plants. Five in Manhattan, one in Queens, 00:14:23.080 --> 00:14:25.580 one in Brooklyn. Plus, they get some extra steam 00:14:25.580 --> 00:14:28.299 under contract from the Brooklyn Navy Yard. And 00:14:28.299 --> 00:14:30.799 to produce it, these plants boil water to an 00:14:30.799 --> 00:14:34.259 incredibly high temperature, 1 ,000 degrees Fahrenheit. 00:14:34.580 --> 00:14:36.600 1 ,000 degrees. So this is not your home boiler. 00:14:36.970 --> 00:14:39.149 Not at all. This is industrial level thermal 00:14:39.149 --> 00:14:41.629 energy. And the scale of production is incredible. 00:14:41.889 --> 00:14:45.129 The uses are central to iconic New York buildings. 00:14:45.350 --> 00:14:49.009 The system produces 30 billion pounds of steam 00:14:49.009 --> 00:14:51.330 annually. And it's not just for heating in the 00:14:51.330 --> 00:14:53.690 winter. It's also used for cooling in the summer 00:14:53.690 --> 00:14:56.169 via absorption chillers. Right. It is the hidden 00:14:56.169 --> 00:14:58.389 power source for famous landmarks you'd recognize. 00:14:58.570 --> 00:15:01.590 The entire United Nations complex, the Empire 00:15:01.590 --> 00:15:04.169 State Building, and the Metropolitan Museum of 00:15:04.169 --> 00:15:07.679 Art. It is the unseen thermal backbone of midtown 00:15:07.679 --> 00:15:10.779 and lower Manhattan. That massive physical system 00:15:10.779 --> 00:15:13.700 is now being updated for the digital age. Let's 00:15:13.700 --> 00:15:15.580 talk about the Smart Meter Project and how they're 00:15:15.580 --> 00:15:17.759 trying to manage customer demand. The Smart Meter 00:15:17.759 --> 00:15:21.019 Project was an essential modernization. ConEd 00:15:21.019 --> 00:15:23.039 partnered with the Clara Smart Grid Solutions, 00:15:23.259 --> 00:15:26.620 and they replaced over 5 million electric and 00:15:26.620 --> 00:15:29.000 gas meters. 5 million. The bulk of that rollout 00:15:29.000 --> 00:15:31.779 was completed in 2022, but they still ran into, 00:15:31.899 --> 00:15:34.179 you know, resistance and access issues, which 00:15:34.179 --> 00:15:36.659 stretched out the final completion. And there 00:15:36.659 --> 00:15:39.090 was a specific temporary marker. they use to 00:15:39.090 --> 00:15:41.190 keep track of this huge installation process. 00:15:41.549 --> 00:15:43.669 Yes, a small detail, but it's indicative of the 00:15:43.669 --> 00:15:46.210 scale. To visually confirm that a contractor 00:15:46.210 --> 00:15:48.990 had replaced a meter, Con Ed used these lime 00:15:48.990 --> 00:15:52.169 green colored seals on the electric meters. It 00:15:52.169 --> 00:15:54.370 just highlights the massive logistical coordination 00:15:54.370 --> 00:15:56.950 required to do something across millions of individual 00:15:56.950 --> 00:15:59.690 locations. They're also actively preparing the 00:15:59.690 --> 00:16:02.370 grid for the huge increase in load that's coming 00:16:02.370 --> 00:16:04.870 from electric vehicles. Managing that load is 00:16:04.870 --> 00:16:07.629 everything to prevent future blackouts. Con Ed 00:16:07.629 --> 00:16:09.789 set up a program, partnered with a company called 00:16:09.789 --> 00:16:13.049 Fleet Karma, that offered $500 rewards to EV 00:16:13.049 --> 00:16:15.509 owners in New York City and Westchester. And 00:16:15.509 --> 00:16:18.110 the goal was to manage demand. The programs done 00:16:18.110 --> 00:16:20.990 was entirely focused on demand management. They 00:16:20.990 --> 00:16:22.789 were incentivizing customers to charge their 00:16:22.789 --> 00:16:26.070 cars only when overall energy demand is traditionally 00:16:26.070 --> 00:16:28.570 low, you know, overnight. That way you avoid 00:16:28.570 --> 00:16:31.389 straining the grid during peak hours. We've established 00:16:31.389 --> 00:16:33.769 the scale of their distribution network. Now 00:16:33.769 --> 00:16:36.190 we really have to pivot to their history with 00:16:36.190 --> 00:16:38.669 energy generation, especially nuclear power, 00:16:38.769 --> 00:16:40.809 and this complicated path they're walking today 00:16:40.809 --> 00:16:43.570 with clean energy commitments. If we connect 00:16:43.570 --> 00:16:46.370 this to the bigger picture, you see, Conant's 00:16:46.370 --> 00:16:48.450 corporate journey is really defined by this evolving 00:16:48.450 --> 00:16:51.250 strategy, from being a monopoly generator and 00:16:51.250 --> 00:16:54.350 distributor to divesting entirely from high -risk 00:16:54.350 --> 00:16:57.230 generation assets to focus on the stability of 00:16:57.230 --> 00:16:59.809 regulated distribution. Let's start with Indian 00:16:59.809 --> 00:17:02.309 Point. For many years, that was their biggest 00:17:02.309 --> 00:17:04.869 power plant. It was a massive commitment to nuclear 00:17:04.869 --> 00:17:08.150 technology in the mid -20th century. Kahn acquired 00:17:08.150 --> 00:17:10.849 the land for the Indian Point Nuclear Plant in 00:17:10.849 --> 00:17:14.490 Buchanan, New York, in 1954. The first reactor... 00:17:14.700 --> 00:17:17.539 Indian Point One, went online in 1962. But that 00:17:17.539 --> 00:17:19.519 first foray was pretty short -lived. It was. 00:17:19.720 --> 00:17:23.740 IP1 only operated until October 1974. It was 00:17:23.740 --> 00:17:25.980 shut down because its emergency core cooling 00:17:25.980 --> 00:17:28.859 system failed to meet the rigorous new regulatory 00:17:28.859 --> 00:17:31.579 requirements that the Atomic Energy Commission 00:17:31.579 --> 00:17:33.740 imposed at the time. And the cost to upgrade 00:17:33.740 --> 00:17:35.799 was just too high. Prohibitive. So they just... 00:17:36.079 --> 00:17:38.319 retired the reactor. But they kept investing 00:17:38.319 --> 00:17:40.319 in the site, building more reactors. They did. 00:17:40.460 --> 00:17:42.559 They built Indian Point 2 and Indian Point 3 00:17:42.559 --> 00:17:46.319 in the 1970s. But the regulatory burden plus 00:17:46.319 --> 00:17:48.819 rising costs and, you know, public skepticism 00:17:48.819 --> 00:17:51.559 after the IP1 shutdown led them to start divesting 00:17:51.559 --> 00:17:54.319 almost immediately. IP3 was sold to the New York 00:17:54.319 --> 00:17:57.779 Power Authority in 1975. The final major divestment 00:17:57.779 --> 00:17:59.920 came after a steam generator leak in February 00:17:59.920 --> 00:18:02.420 2000, which really heightened regulatory scrutiny. 00:18:02.660 --> 00:18:05.259 So Indian Point 2 was sold to Entergy in November. 00:18:05.480 --> 00:18:10.019 of 2000. So by the year 2000, Con Ed is out of 00:18:10.019 --> 00:18:13.019 the nuclear generation business. This was a critical 00:18:13.019 --> 00:18:14.940 turning point for the company's identity. It 00:18:14.940 --> 00:18:17.619 fundamentally reshaped them. With the sale of 00:18:17.619 --> 00:18:20.779 Indian Point 2, Consolidated Edison Inc. transitioned 00:18:20.779 --> 00:18:23.240 from being an integrated utility -owning generation, 00:18:23.619 --> 00:18:26.640 transmission and distribution, to being primarily 00:18:26.640 --> 00:18:29.140 just an energy distributor. And that shift allowed 00:18:29.140 --> 00:18:32.180 them to focus on the stable, regulated returns 00:18:32.180 --> 00:18:34.619 of the distribution business. Exactly. Rather 00:18:34.619 --> 00:18:37.000 than the higher capital risk and regulatory risk 00:18:37.000 --> 00:18:39.059 that comes with generation, especially nuclear 00:18:39.059 --> 00:18:41.660 generation. This transition leads directly into 00:18:41.660 --> 00:18:43.880 the modern paradox we see in the sources. Yeah. 00:18:43.920 --> 00:18:46.279 Public commitments to clean energy. but at the 00:18:46.279 --> 00:18:50.319 same time, criticism for continued fossil fuel 00:18:50.319 --> 00:18:52.740 investment. This is the most timely and complex 00:18:52.740 --> 00:18:55.240 part of their modern operation. On one hand, 00:18:55.299 --> 00:18:57.140 Con Ed made these significant public investments 00:18:57.140 --> 00:18:59.839 in renewables. They initially invested $3 billion 00:18:59.839 --> 00:19:04.359 in solar and wind projects. Then, in 2017, they 00:19:04.359 --> 00:19:07.519 announced a plan to pour another $1 .25 billion 00:19:07.519 --> 00:19:10.240 over three years into expanding their renewable 00:19:10.240 --> 00:19:13.380 energy production facilities. And at its peak... 00:19:13.630 --> 00:19:16.210 That portfolio was pretty substantial. It certainly 00:19:16.210 --> 00:19:18.650 helped burnish their green credentials. Their 00:19:18.650 --> 00:19:22.029 renewable portfolio reached over 1 .5 gigawatts 00:19:22.029 --> 00:19:25.210 of operating capacity. And notably, three quarters, 00:19:25.329 --> 00:19:28.890 75 percent of that came from solar energy. At 00:19:28.890 --> 00:19:31.470 the time of that 2017 announcement, clean energy 00:19:31.470 --> 00:19:34.089 was contributing about 8 percent of the company's 00:19:34.089 --> 00:19:36.329 total earnings. They were positioning themselves 00:19:36.329 --> 00:19:38.910 as a utility that was actively transitioning. 00:19:39.049 --> 00:19:41.970 But then in a dramatic strategic reversal. They 00:19:41.970 --> 00:19:44.289 sold the whole thing off just recently. The sources 00:19:44.289 --> 00:19:47.970 confirm it. A major divestiture in 2023. Con 00:19:47.970 --> 00:19:50.430 Edison sold its entire clean energy business 00:19:50.430 --> 00:19:53.230 to RWE. So what does that move signal? It signals 00:19:53.230 --> 00:19:56.049 a corporate decision to retrench, to focus back 00:19:56.049 --> 00:19:59.450 on the core regulated utility businesses, Seacony 00:19:59.450 --> 00:20:02.009 and Orange and Rockland, which offer guaranteed 00:20:02.009 --> 00:20:04.170 returns on infrastructure investment rather than 00:20:04.170 --> 00:20:05.950 navigating the less predictable, more competitive 00:20:05.950 --> 00:20:08.230 world of renewable power generation. And while 00:20:08.230 --> 00:20:10.009 they were showcasing all these solar and wind 00:20:10.009 --> 00:20:12.230 projects, critics were pointing out that the 00:20:12.230 --> 00:20:14.069 company was still heavily committed to expanding 00:20:14.069 --> 00:20:16.789 its gas pipeline network. This is the heart of 00:20:16.789 --> 00:20:19.430 the paradox. The Energy and Policy Institute, 00:20:19.589 --> 00:20:22.829 in a 2021 critique, pointed out that Con Ed was 00:20:22.829 --> 00:20:25.549 continuing to invest heavily in updating and 00:20:25.549 --> 00:20:27.970 expanding its gas infrastructure. And they specifically 00:20:27.970 --> 00:20:31.289 called out unclean fracked gas. Yes, methane 00:20:31.289 --> 00:20:34.450 gas produced by hydraulic fracturing. The criticism 00:20:34.450 --> 00:20:36.650 wasn't just that they used gas, but that these 00:20:36.650 --> 00:20:39.250 huge infrastructure investments lock the utility 00:20:39.250 --> 00:20:42.089 and its customers into decades of future fossil 00:20:42.089 --> 00:20:45.500 fuel use. It makes true decarbonization goals 00:20:45.500 --> 00:20:48.359 much, much harder to achieve. If the company 00:20:48.359 --> 00:20:50.279 is making these public environmental commitments, 00:20:50.680 --> 00:20:52.900 how does that tension investing in both solar 00:20:52.900 --> 00:20:56.039 and fracked gas get reconciled internally? Well, 00:20:56.099 --> 00:20:58.039 the external analysis suggests that the corporate 00:20:58.039 --> 00:20:59.920 incentives were misaligned with comprehensive 00:20:59.920 --> 00:21:02.559 climate goals. Critics found that while executive 00:21:02.559 --> 00:21:04.980 compensation policies did include renewable energy 00:21:04.980 --> 00:21:07.740 growth goals as a factor, they did not reward 00:21:07.740 --> 00:21:10.160 executives specifically for reducing overall 00:21:10.160 --> 00:21:12.680 greenhouse gas emissions across their regulated 00:21:12.680 --> 00:21:15.460 gas and electric operations. The incentive was 00:21:15.460 --> 00:21:18.019 structured to reward asset growth, not necessarily 00:21:18.019 --> 00:21:20.420 environmental stewardship across the whole enterprise. 00:21:20.759 --> 00:21:22.940 That paints a really complex picture of corporate 00:21:22.940 --> 00:21:25.849 mandates. But the reality... is, when you run 00:21:25.849 --> 00:21:28.190 infrastructure this massive, the consequences 00:21:28.190 --> 00:21:31.349 of failure are catastrophic. Which brings us 00:21:31.349 --> 00:21:34.009 to the dark side of reliability. Here's where 00:21:34.009 --> 00:21:36.329 it gets really interesting. Because when a massive 00:21:36.329 --> 00:21:39.329 system fails, the failures are catastrophic and 00:21:39.329 --> 00:21:41.650 they're memorable. New York has experienced this 00:21:41.650 --> 00:21:44.670 over and over, and these incidents become part 00:21:44.670 --> 00:21:46.849 of the city's collective memory. We have to start 00:21:46.849 --> 00:21:49.490 with the 1977 blackout. It's become a cultural 00:21:49.490 --> 00:21:52.869 touchstone. That event was iconic for all the 00:21:52.869 --> 00:21:55.450 wrong reasons. The entire city of New York was 00:21:55.450 --> 00:21:58.130 blacked out overnight on July 13th and 14th, 00:21:58.130 --> 00:22:01.769 1977. The only exception was the Rockaways, which, 00:22:01.890 --> 00:22:04.130 because of that split utility zoning, were powered 00:22:04.130 --> 00:22:06.509 by LAL Co. And it was all triggered by lightning. 00:22:06.670 --> 00:22:09.329 A cascade failure. Several lightning strikes 00:22:09.329 --> 00:22:11.730 on substations led to a chain reaction failure 00:22:11.730 --> 00:22:14.150 of the critical interconnects that link the city's 00:22:14.150 --> 00:22:17.390 grid to outside power. The 77 blackout was tied 00:22:17.390 --> 00:22:20.690 up with massive social unrest and looting. Decades 00:22:20.690 --> 00:22:23.650 later, on the exact anniversary, a failure happened 00:22:23.650 --> 00:22:26.630 again, though it was much more localized. Yes, 00:22:26.829 --> 00:22:30.089 the 2019 Manhattan blackout. It happened on the 00:22:30.089 --> 00:22:33.789 evening of July 13th, affecting about 73 ,000 00:22:33.789 --> 00:22:36.329 customers. This one was caused by a specific 00:22:36.329 --> 00:22:39.230 consolidated Edison cable that burnt out in a 00:22:39.230 --> 00:22:42.250 transformer on West End Avenue. It wasn't a citywide 00:22:42.250 --> 00:22:45.420 collapse, but the impact was huge. That three 00:22:45.420 --> 00:22:48.039 -hour outage paralyzed the cultural heart of 00:22:48.039 --> 00:22:50.460 the city. It shut down a huge part of the West 00:22:50.460 --> 00:22:53.880 Side, from the 40s up to 72nd Street. It closed 00:22:53.880 --> 00:22:56.339 subway stations, took out power in parts of Times 00:22:56.339 --> 00:22:58.940 Square, Rockefeller Center. It showed that even 00:22:58.940 --> 00:23:01.819 a very localized underground failure can bring 00:23:01.819 --> 00:23:03.900 the world's most dense urban environment to a 00:23:03.900 --> 00:23:07.359 dead stop. Blackouts are one thing. But Con Ed's 00:23:07.359 --> 00:23:09.460 infrastructure has also been responsible for 00:23:09.460 --> 00:23:12.299 fatal, violent explosions, especially with those 00:23:12.299 --> 00:23:14.460 high pressure steam and gas systems. And these 00:23:14.460 --> 00:23:17.539 incidents carry a tragic human cost. We can start 00:23:17.539 --> 00:23:20.039 with the 1989 Gramercy Park steam explosion. 00:23:20.359 --> 00:23:22.819 A pipe rupture killed three people and injured 00:23:22.819 --> 00:23:25.400 24. And there was a major health concern afterward. 00:23:25.660 --> 00:23:27.980 A damaged apartment building had to be evacuated, 00:23:28.000 --> 00:23:29.740 not just for structural damage, but because of 00:23:29.740 --> 00:23:31.839 extremely high levels of asbestos contamination 00:23:31.839 --> 00:23:34.400 that the explosion released into the air. And 00:23:34.400 --> 00:23:36.750 the cause was directly... linked to human error. 00:23:36.890 --> 00:23:39.730 It was worker failure. The investigation cited 00:23:39.730 --> 00:23:42.230 the failure of personnel to properly drain water 00:23:42.230 --> 00:23:44.230 from the pipe section before turning the steam 00:23:44.230 --> 00:23:46.470 back on. This caused the pressure to build up 00:23:46.470 --> 00:23:48.490 and the pipe just ruptured. And then the company 00:23:48.490 --> 00:23:50.920 made it worse. They did. Compounding the tragedy, 00:23:51.140 --> 00:23:53.839 Coned later pleaded guilty to lying about the 00:23:53.839 --> 00:23:56.119 extent of the asbestos contamination, and they 00:23:56.119 --> 00:23:59.079 had to pay a $2 million fine. That combination 00:23:59.079 --> 00:24:02.200 of engineering failure, human error, and corporate 00:24:02.200 --> 00:24:04.880 dishonesty was just deeply damaging to their 00:24:04.880 --> 00:24:07.779 public trust. And the incredible forces in that 00:24:07.779 --> 00:24:11.339 steam system led to another major disaster almost 00:24:11.339 --> 00:24:14.680 two decades later in 2007. That was the Midtown 00:24:14.680 --> 00:24:17.799 Steam explosion right near Grand Central. An 00:24:17.799 --> 00:24:20.680 83 -year -old steam pipe failed. It caused one 00:24:20.680 --> 00:24:24.140 fatality and over 40 injuries. What did the investigation 00:24:24.140 --> 00:24:26.660 find there? Independent experts found the cause 00:24:26.660 --> 00:24:29.119 wasn't corrosion, but this rare phenomenon called 00:24:29.119 --> 00:24:31.900 a bubble collapse water hammer. Can you explain 00:24:31.900 --> 00:24:34.099 the physics of a water hammer in this context? 00:24:34.279 --> 00:24:36.539 What does that even mean? A water hammer happens 00:24:36.539 --> 00:24:38.720 when water suddenly stops or changes direction 00:24:38.720 --> 00:24:41.940 in a pipe. But in a steam system, it's different. 00:24:42.319 --> 00:24:44.519 It happens when a massive steam bubble suddenly 00:24:44.519 --> 00:24:46.819 collapses when it comes into contact with cooler 00:24:46.819 --> 00:24:49.720 water. When that bubble collapses, it creates 00:24:49.720 --> 00:24:52.259 a vacuum and the water rushes into that void, 00:24:52.500 --> 00:24:54.680 slamming into the pipe walls with tremendous 00:24:54.680 --> 00:24:58.059 force. The experts figured that this momentary 00:24:58.059 --> 00:25:00.819 shock wave generated a force that was seven times 00:25:00.819 --> 00:25:03.279 the pipe's normal operating pressure. It's seven 00:25:03.279 --> 00:25:05.559 times. And it just instantly ruptured the pipe. 00:25:05.700 --> 00:25:09.400 That sounds like a catastrophic, almost unpreventable 00:25:09.400 --> 00:25:12.289 engineering event tied to just... The immense 00:25:12.289 --> 00:25:14.450 force is required to operate that unique steam 00:25:14.450 --> 00:25:16.490 system. Precisely. It highlights the immense 00:25:16.490 --> 00:25:18.930 risk inherent in running a high -pressure, high 00:25:18.930 --> 00:25:21.210 -temperature system beneath a densely populated 00:25:21.210 --> 00:25:24.789 city. And the gas system has its own risks, as 00:25:24.789 --> 00:25:28.109 the 2014 East Harlem explosion showed. That event, 00:25:28.349 --> 00:25:30.990 preceded by a reported gas leak, was absolutely 00:25:30.990 --> 00:25:33.470 devastating. It was an unimaginable tragedy. 00:25:34.109 --> 00:25:37.849 On March 12, 2014, two apartment buildings just 00:25:37.849 --> 00:25:40.750 exploded. It killed eight people and leveled 00:25:40.750 --> 00:25:43.309 the structures. It was a horrific reminder of 00:25:43.309 --> 00:25:45.869 the destructive power of compromised gas lines. 00:25:46.130 --> 00:25:48.730 We also see deadly interactions between the electrical 00:25:48.730 --> 00:25:51.329 and gas systems underground, as noted in the 00:25:51.329 --> 00:25:54.420 2009 incident. This is a classic example of subterranean 00:25:54.420 --> 00:25:57.619 complexity leading to danger. In Queens in 2009, 00:25:57.900 --> 00:26:00.480 a fatal explosion happened while conned personnel 00:26:00.480 --> 00:26:03.299 were actually on the scene investigating a problem. 00:26:03.460 --> 00:26:05.839 What was the sequence of events? A fault in an 00:26:05.839 --> 00:26:08.240 electrical feeder cable created a spark, which 00:26:08.240 --> 00:26:10.579 then ignited a leak in a nearby gas line inside 00:26:10.579 --> 00:26:13.319 a manhole. When a mechanic opened the manhole 00:26:13.319 --> 00:26:16.140 cover, introducing fresh oxygen, the accumulated 00:26:16.140 --> 00:26:19.430 gas ignited, causing the fatal blast. Wow. That 00:26:19.430 --> 00:26:22.250 incident was a direct catalyst for a major change 00:26:22.250 --> 00:26:24.470 in Con Ed's internal procedures for how they 00:26:24.470 --> 00:26:26.990 handle outside gas leak calls. Now, to a hidden 00:26:26.990 --> 00:26:29.369 failure that terrified the public, the issue 00:26:29.369 --> 00:26:32.009 of stray voltage. The electrocution of Jody Lane 00:26:32.009 --> 00:26:35.069 in 2004 was a truly shocking event. The death 00:26:35.069 --> 00:26:37.609 of East Village resident Jody Lane and her dog 00:26:37.609 --> 00:26:40.650 in 2004 really brought the issue of stray voltage 00:26:40.650 --> 00:26:43.710 to the forefront. She stepped on an improperly 00:26:43.710 --> 00:26:46.450 insulated service box that was leaking high voltage 00:26:46.450 --> 00:26:49.730 current into the sidewalk. It exposed the systemic 00:26:49.730 --> 00:26:52.890 hidden risk in the city's aging electrical infrastructure. 00:26:53.210 --> 00:26:56.230 What causes stray voltage in these boxes? Why 00:26:56.230 --> 00:26:58.210 is it such a problem in an old city like New 00:26:58.210 --> 00:27:00.650 York? Stray voltage happens when the insulation 00:27:00.650 --> 00:27:03.130 on underground electrical lines degrades over 00:27:03.130 --> 00:27:06.250 time from water, age, or damage. The current 00:27:06.250 --> 00:27:09.470 then jumps to nearby metallic objects, lamp posts, 00:27:09.730 --> 00:27:12.809 manhole covers, service boxes, and energizes 00:27:12.809 --> 00:27:15.190 them. And after the fatality, they were forced 00:27:15.190 --> 00:27:17.309 to check everything. Following the fatality and 00:27:17.309 --> 00:27:19.450 the regulatory mandate, ConEd was required to 00:27:19.450 --> 00:27:21.750 test its equipment. During the next year, they 00:27:21.750 --> 00:27:25.430 found 1 ,214 instances of stray voltage that 00:27:25.430 --> 00:27:29.329 needed immediate repair. 1 ,214. That statistic 00:27:29.329 --> 00:27:31.710 alone must have forced a radical change in their 00:27:31.710 --> 00:27:34.170 maintenance procedures. The corner where she 00:27:34.170 --> 00:27:36.650 died was renamed Jody Lane Place in her honor. 00:27:37.000 --> 00:27:40.460 It became a permanent sobering reminder. And 00:27:40.460 --> 00:27:43.140 beyond these localized failures, the company's 00:27:43.140 --> 00:27:45.759 storm response, specifically during Hurricane 00:27:45.759 --> 00:27:50.160 Sandy in 2012, also drew intense public and regulatory 00:27:50.160 --> 00:27:52.779 criticism. What was the main failure during Sandy? 00:27:53.150 --> 00:27:55.970 The massive storm surge caused historic flooding 00:27:55.970 --> 00:27:59.390 across lower Manhattan. This resulted in a dramatic 00:27:59.390 --> 00:28:02.769 transformer explosion at a Con Ed plant on the 00:28:02.769 --> 00:28:05.349 east side. It was captured on video and it became 00:28:05.349 --> 00:28:08.150 this symbol of the storm's power. And the response 00:28:08.150 --> 00:28:09.910 from their subsidiary was heavily criticized. 00:28:10.490 --> 00:28:12.289 While the main company worked to restore the 00:28:12.289 --> 00:28:15.049 Manhattan grid, the subsidiary, Orange and Rocklin 00:28:15.049 --> 00:28:17.349 Utilities, was heavily criticized for a slow 00:28:17.349 --> 00:28:20.009 and poor response in its territory. Some of their 00:28:20.009 --> 00:28:22.130 customers lost power for as long as 11 days. 00:28:22.329 --> 00:28:24.009 Though in terms of communication, the company 00:28:24.009 --> 00:28:26.210 did show an adaptation to the modern digital 00:28:26.210 --> 00:28:28.680 age during that storm. They did manage their 00:28:28.680 --> 00:28:31.339 public messaging well. Conad actively used platforms 00:28:31.339 --> 00:28:33.819 like Twitter to provide real -time updates on 00:28:33.819 --> 00:28:36.539 outages and restoration times. Their Twitter 00:28:36.539 --> 00:28:39.619 account gained an impressive 16 ,000 followers 00:28:39.619 --> 00:28:42.160 during the crisis, which just showed how essential 00:28:42.160 --> 00:28:45.099 utilities had become in spreading immediate digital 00:28:45.099 --> 00:28:48.160 crisis information. Now let's talk about a spectacular 00:28:48.160 --> 00:28:51.880 failure that caused widespread panic, the 2018 00:28:51.880 --> 00:28:55.240 Astoria Borealis. This incident captured the 00:28:55.240 --> 00:28:57.839 public imagination globally. On December 27, 00:28:58.160 --> 00:29:01.119 2018, a transformer short -circuited at a Con 00:29:01.119 --> 00:29:04.180 Ed power plant in Astoria, Queens. In a sight, 00:29:04.259 --> 00:29:06.640 that incredible blue glow illuminated the night 00:29:06.640 --> 00:29:08.880 sky. It looked like something out of a sci -fi 00:29:08.880 --> 00:29:11.160 movie. What was the scientific explanation for 00:29:11.160 --> 00:29:13.200 that? The source of the light was intense arc 00:29:13.200 --> 00:29:15.839 flashes. When the transformer short -circuited, 00:29:15.940 --> 00:29:18.259 it created these powerful electrical arcs that 00:29:18.259 --> 00:29:20.779 vaporized metal and heated the surrounding gas 00:29:20.779 --> 00:29:23.299 into a plasma. That's what was emitting the light. 00:29:23.420 --> 00:29:25.680 But why was it so big and visible? Crucially, 00:29:25.779 --> 00:29:28.640 the specific meteorological conditions that night 00:29:28.640 --> 00:29:31.579 -low clouds and fog acted like a giant reflector 00:29:31.579 --> 00:29:34.200 and lens, amplifying the blue light and making 00:29:34.200 --> 00:29:36.960 it visible across the entire metropolitan area. 00:29:37.180 --> 00:29:39.559 And the public reaction was immediate fear. Absolutely. 00:29:40.000 --> 00:29:43.559 The sources track the panic. 911 calls spiked 00:29:43.559 --> 00:29:46.500 dramatically, rocketing from about 500 in the 00:29:46.500 --> 00:29:49.720 half hour before the event to over 3 ,200 in 00:29:49.720 --> 00:29:51.900 the 30 minutes after. What was the actual impact? 00:29:52.299 --> 00:29:54.619 The event temporarily shut down LaGuardia Airport 00:29:54.619 --> 00:29:57.319 until it switched to backup power, caused extensive 00:29:57.319 --> 00:30:00.579 delays on the Hashtag 7 subway line and a localized 00:30:00.579 --> 00:30:03.299 outage on Rikers Island. The sheer visual impact 00:30:03.299 --> 00:30:05.460 and the public fear of why it was so quickly 00:30:05.460 --> 00:30:08.940 nicknamed the Astoria Borealis. Finally, let's 00:30:08.940 --> 00:30:11.599 touch on a more mundane but pervasive operational 00:30:11.599 --> 00:30:14.680 failure that causes daily headaches for New Yorkers. 00:30:14.779 --> 00:30:18.160 The infamous stop tag system for broken streetlights. 00:30:18.319 --> 00:30:20.779 The stop tag is a classic bureaucratic failure 00:30:20.779 --> 00:30:23.900 point. A contractor assigns a stop tag when they 00:30:23.900 --> 00:30:25.880 can't repair a streetlight or a traffic signal 00:30:25.880 --> 00:30:28.059 because the problem isn't the light itself, it's 00:30:28.059 --> 00:30:30.519 a failure in the power supply to the unit. The 00:30:30.519 --> 00:30:33.539 problem is coneds. And historically, these repairs 00:30:33.539 --> 00:30:36.119 have taken an absurd amount of time. The frustration 00:30:36.119 --> 00:30:38.460 comes from the fact that reports indicated these 00:30:38.460 --> 00:30:40.700 repairs could sometimes take over two years. 00:30:40.980 --> 00:30:43.099 That's because fixing the issue means tearing 00:30:43.099 --> 00:30:45.660 up busy city streets to replace failed underground 00:30:45.660 --> 00:30:48.940 wiring. And the temporary fixes are an eyesore. 00:30:49.039 --> 00:30:51.000 Right, the shunts. They're essentially... these 00:30:51.000 --> 00:30:54.200 heavy duty overhead extension cords left in place 00:30:54.200 --> 00:30:57.519 for months or years. Did Con Ed make any commitments 00:30:57.519 --> 00:31:00.559 to fix this systemic delay? Yes. In response 00:31:00.559 --> 00:31:02.779 to public and political pressure, Con Ed committed 00:31:02.779 --> 00:31:05.920 in 2017 to fixing at least 90 percent of these 00:31:05.920 --> 00:31:09.220 stop tag issues within a 90 day window. It was 00:31:09.220 --> 00:31:11.839 a recognition that slow utility response was 00:31:11.839 --> 00:31:14.200 impacting essential city infrastructure. We've 00:31:14.200 --> 00:31:16.359 seen the sheer physical scale and the consequences 00:31:16.359 --> 00:31:19.500 of failure. Now let's turn to how a utility this 00:31:19.500 --> 00:31:21.660 magnitude is governed and held accountable. If 00:31:21.660 --> 00:31:23.759 we connect this to the bigger picture, we see 00:31:23.759 --> 00:31:25.920 the systemic challenge of policing a utility 00:31:25.920 --> 00:31:28.640 that is, by definition, an essential monopoly, 00:31:29.000 --> 00:31:31.680 especially when its operations are largely hidden 00:31:31.680 --> 00:31:33.920 underground, which gives it this unique power 00:31:33.920 --> 00:31:36.480 and anonymity. Let's discuss the major black 00:31:36.480 --> 00:31:39.779 eye the company received, the bribery prosecution 00:31:39.779 --> 00:31:43.380 that came out of the cleanup of the 2007 Midtown 00:31:43.380 --> 00:31:46.400 steam pipe explosion. This scandal, uncovered 00:31:46.400 --> 00:31:49.480 in 2009, was just a brazen display of corruption 00:31:49.480 --> 00:31:52.819 within management ranks. Eleven Con Edison supervisors 00:31:52.819 --> 00:31:55.859 were arrested for demanding over $1 million in 00:31:55.859 --> 00:31:58.500 kickbacks, specifically related to the repair 00:31:58.500 --> 00:32:01.039 work after that fatal explosion. How did this 00:32:01.039 --> 00:32:03.519 scheme work, and how did investigators prove 00:32:03.519 --> 00:32:06.450 it? The supervisors were running a simple but 00:32:06.450 --> 00:32:08.710 effective scheme. They would approve payment 00:32:08.710 --> 00:32:10.470 for contract work that was either completely 00:32:10.470 --> 00:32:13.470 unnecessary or in some cases never even performed. 00:32:13.750 --> 00:32:16.190 And in return for faster payment on legitimate 00:32:16.190 --> 00:32:19.410 contracts, they demanded cash bribes. And the 00:32:19.410 --> 00:32:21.849 FBI recorded them. They successfully used undercover 00:32:21.849 --> 00:32:24.269 methods, including two retired Con Ed employees 00:32:24.269 --> 00:32:26.890 and a construction company president who wore 00:32:26.890 --> 00:32:28.869 recording devices to capture the suspects demanding 00:32:28.869 --> 00:32:31.329 the kickbacks. So contractors were being shaken 00:32:31.329 --> 00:32:33.269 down while the company was trying to recover. 00:32:33.390 --> 00:32:35.809 from a fatal system failure, what was the ultimate 00:32:35.809 --> 00:32:38.589 financial consequence for Con Ed? Well, the company 00:32:38.589 --> 00:32:41.349 itself maintained they admitted no criminal wrongdoing, 00:32:41.490 --> 00:32:44.289 but the Public Service Commission, the PSC, took 00:32:44.289 --> 00:32:47.210 a very dim view of the lack of internal controls. 00:32:47.430 --> 00:32:51.730 In April 2016, the PSC mandated that Con Ed pay 00:32:51.730 --> 00:32:56.460 over $171 million back to its customers. That 00:32:56.460 --> 00:32:59.640 compensation, which was about 1 .5 % of its annual 00:32:59.640 --> 00:33:02.119 revenue, was for the failure to supervise its 00:33:02.119 --> 00:33:04.259 employees. That is a remarkable demonstration 00:33:04.259 --> 00:33:07.160 of how regulators can enforce corporate accountability, 00:33:07.500 --> 00:33:09.920 even when the company tries to distance itself 00:33:09.920 --> 00:33:12.680 from the actions of its employees. It reinforces 00:33:12.680 --> 00:33:14.940 the principle that utilities operate under heightened 00:33:14.940 --> 00:33:17.920 scrutiny. And yet, despite these massive failures, 00:33:18.240 --> 00:33:20.940 fines and scandals, the company has simultaneously 00:33:20.940 --> 00:33:23.799 received significant corporate honors and praise. 00:33:24.140 --> 00:33:26.380 That strong juxtaposition is a persistent theme 00:33:26.380 --> 00:33:28.339 in the sources. What are some of those honors? 00:33:28.740 --> 00:33:31.119 Con Ed has been repeatedly recognized for its 00:33:31.119 --> 00:33:33.859 stability and operational excellence. Fortune 00:33:33.859 --> 00:33:36.079 magazine named it one of America's most admired 00:33:36.079 --> 00:33:38.460 companies, even hitting second place on the top 00:33:38.460 --> 00:33:40.960 10 list for electric and gas utilities in 2003. 00:33:41.359 --> 00:33:43.240 And they've scored well in other metrics, too. 00:33:43.380 --> 00:33:45.920 Highly in sustainability and diversity. They 00:33:45.920 --> 00:33:48.079 got top utility rankings in Newsweek's green 00:33:48.079 --> 00:33:51.160 rankings in 2014 and were recognized as a top 00:33:51.160 --> 00:33:53.759 employer by publications like Hispanic Network 00:33:53.759 --> 00:33:57.079 Magazine and Diversity Inc. So a company recognized 00:33:57.079 --> 00:33:59.940 for stability and diversity on one hand, but 00:33:59.940 --> 00:34:01.940 facing sharp financial critique on the other. 00:34:02.440 --> 00:34:04.900 Let's get into the tax and lobbying criticism. 00:34:05.470 --> 00:34:07.690 The critique by the nonpartisan group Public 00:34:07.690 --> 00:34:10.650 Campaign in 2011 was particularly pointed. It 00:34:10.650 --> 00:34:13.730 analyzed Con Ed's finances between 2008 and 2010. 00:34:14.170 --> 00:34:17.309 During that time, Con Ed reported huge profits, 00:34:17.510 --> 00:34:21.019 $4 .2 billion. And what was the issue? The report 00:34:21.019 --> 00:34:24.280 noted that Con Ed spent $1 .8 million on lobbying 00:34:24.280 --> 00:34:27.780 while, astonishingly, receiving $127 million 00:34:27.780 --> 00:34:30.639 in tax rebates, meaning they paid zero federal 00:34:30.639 --> 00:34:33.380 income taxes. How is it even possible for a company 00:34:33.380 --> 00:34:36.340 making billions in profit to get tax rebates? 00:34:36.440 --> 00:34:37.860 This is where you have to understand utility 00:34:37.860 --> 00:34:40.380 finance. Utilities operate under unique tax codes 00:34:40.380 --> 00:34:42.400 because they make these massive long -term investments 00:34:42.400 --> 00:34:44.659 in capital infrastructure, pipes, cables, plants. 00:34:45.019 --> 00:34:47.820 These regulations often let utilities use things 00:34:47.820 --> 00:34:55.210 like accelerated depreciation or... So while 00:34:55.210 --> 00:34:58.090 it's legal and common in the industry, the criticism 00:34:58.090 --> 00:35:00.630 was directed at the optics and the timing. And 00:35:00.630 --> 00:35:02.809 the optics were certainly made worse by the simultaneous 00:35:02.809 --> 00:35:06.010 hike in executive pay. Absolutely. The critique 00:35:06.010 --> 00:35:08.469 highlighted that during the very period the company 00:35:08.469 --> 00:35:12.590 was getting $127 million in tax rebates, compensation 00:35:12.590 --> 00:35:15.429 for the top five executives increased by 82%, 00:35:15.429 --> 00:35:20.110 up to $17 .4 million in 2010. The criticism was 00:35:20.110 --> 00:35:22.550 less about legality and more about the perceived 00:35:22.550 --> 00:35:25.050 moral failure of maximizing executive wealth 00:35:25.050 --> 00:35:26.869 while getting taxpayer subsidies and lobbying 00:35:26.869 --> 00:35:29.389 legislators. Let's shift to a more physical and 00:35:29.389 --> 00:35:32.369 lasting legacy. The cultural footprint left by 00:35:32.369 --> 00:35:34.670 Con Ed's massive infrastructure, particularly 00:35:34.670 --> 00:35:36.989 the adaptive reuse of its old buildings. The 00:35:36.989 --> 00:35:38.969 industrial nature of Con Ed's original assets 00:35:38.969 --> 00:35:41.769 means the buildings they occupy are often architecturally 00:35:41.769 --> 00:35:44.269 unique. They're built for heavy loads and massive 00:35:44.269 --> 00:35:46.670 equipment. When those industrial uses become 00:35:46.670 --> 00:35:48.750 obsolete, the buildings become candidates for 00:35:48.750 --> 00:35:51.210 really unique conversions. What are some examples 00:35:51.210 --> 00:35:53.480 of these repurposed buildings? One of the coolest 00:35:53.480 --> 00:35:56.199 cultural connections is a former Con Ed building 00:35:56.199 --> 00:35:59.199 on West 53rd Street in Manhattan. Because of 00:35:59.199 --> 00:36:01.719 its massive electrical capacity, its Edison history, 00:36:02.000 --> 00:36:04.579 it was later converted into the studio for the 00:36:04.579 --> 00:36:07.940 TV game show Let's Make a Deal. No way. But most 00:36:07.940 --> 00:36:10.079 famously, it became a legendary recording studio 00:36:10.079 --> 00:36:12.920 called Power Station, drawing directly from its 00:36:12.920 --> 00:36:15.559 history. It was later renamed Avatar Studios, 00:36:15.739 --> 00:36:19.050 but went back to being Power Station 2017. That 00:36:19.050 --> 00:36:22.369 is a fantastic, fitting cultural irony. A power 00:36:22.369 --> 00:36:24.710 station that powers music. Another example is 00:36:24.710 --> 00:36:27.409 the Excelsior Power Company building, a former 00:36:27.409 --> 00:36:30.050 substation in the financial district. Con Ed 00:36:30.050 --> 00:36:33.429 sold it in 1978. It was renovated into a residential 00:36:33.429 --> 00:36:35.849 apartment building and was eventually designated 00:36:35.849 --> 00:36:39.409 a New York City landmark in 2016. These buildings 00:36:39.409 --> 00:36:41.469 are like physical time capsules of the city's 00:36:41.469 --> 00:36:44.119 energy history. Finally, let's acknowledge the 00:36:44.119 --> 00:36:46.659 unprecedented operational challenges Con Ed faced 00:36:46.659 --> 00:36:49.559 during the start of the COVID -19 pandemic. The 00:36:49.559 --> 00:36:52.360 pandemic posed immediate, severe challenges to 00:36:52.360 --> 00:36:55.079 essential services. The sources document the 00:36:55.079 --> 00:36:59.500 human cost in 2020. 170 Con Edison employees 00:36:59.500 --> 00:37:02.460 tested positive for COVID -19, and tragically, 00:37:02.559 --> 00:37:05.679 three employees died. Utilities had to develop 00:37:05.679 --> 00:37:07.679 rapid protocols to keep the essential workforce 00:37:07.679 --> 00:37:10.059 operational. And how did the company respond 00:37:10.059 --> 00:37:12.659 to its customers who are facing economic hardship? 00:37:13.099 --> 00:37:15.820 Con Edison made a significant public pledge to 00:37:15.820 --> 00:37:18.079 help. They committed not to shut off service 00:37:18.079 --> 00:37:20.579 for electric gas or steam due to payment difficulties 00:37:20.579 --> 00:37:23.639 related to the pandemic. And they also waived 00:37:23.639 --> 00:37:25.860 any new late payment charges for all customers 00:37:25.860 --> 00:37:28.099 during that period, recognizing how critical 00:37:28.099 --> 00:37:30.659 utility access is during a national health emergency. 00:37:31.340 --> 00:37:34.119 We've journeyed from 1823 gas lamps tied to Tammany 00:37:34.119 --> 00:37:36.559 Hall, securing the single longest stock listing 00:37:36.559 --> 00:37:39.539 on the NYSE through the War of Currents, past 00:37:39.539 --> 00:37:42.219 a controversial nuclear history, and navigated 00:37:42.219 --> 00:37:45.320 massive blackouts, fatal steam explosions, and 00:37:45.320 --> 00:37:47.679 the incredible panic light show of the Astoria 00:37:47.679 --> 00:37:50.539 Borealis. Conn, it isn't just a company. It is 00:37:50.539 --> 00:37:52.480 the physical circulatory system of New York, 00:37:52.579 --> 00:37:55.179 operating this unique global marvel that is the 00:37:55.179 --> 00:37:57.099 world's largest steam system right beneath the 00:37:57.099 --> 00:38:00.139 streets. This raises an important question. about 00:38:00.139 --> 00:38:02.619 the unseen machinery that underpins modern life. 00:38:02.820 --> 00:38:05.639 The sheer logistical and engineering effort to 00:38:05.639 --> 00:38:08.440 keep 93 ,000 miles of underground cable running 00:38:08.440 --> 00:38:12.260 reliably is just staggering. Yet the sources 00:38:12.260 --> 00:38:14.239 demonstrate that the consequences of occasional 00:38:14.239 --> 00:38:17.179 failure Whether it's the localized tragedy of 00:38:17.179 --> 00:38:19.800 stray voltage, the systemic shock of grid collapse, 00:38:20.099 --> 00:38:22.679 or the moral failure of a multi -million dollar 00:38:22.679 --> 00:38:25.699 bribery scandal, show the incredibly high stakes 00:38:25.699 --> 00:38:27.920 involved in maintaining such a complex aging 00:38:27.920 --> 00:38:30.599 system beneath the world's most dense urban environment. 00:38:31.400 --> 00:38:33.579 Our deep dive revealed a company trying to embrace 00:38:33.579 --> 00:38:36.420 clean energy with one hand, investing billions 00:38:36.420 --> 00:38:38.599 and touting its green profile, while continuously 00:38:38.599 --> 00:38:40.820 investing in gas infrastructure with the other, 00:38:40.920 --> 00:38:43.099 and then ultimately selling off its entire renewable 00:38:43.099 --> 00:38:45.400 generation fleet to focus on regulated returns. 00:38:45.739 --> 00:38:48.380 Given the fundamental tension between Con Ed's 00:38:48.380 --> 00:38:50.500 historical investment in long -term gas infrastructure 00:38:50.500 --> 00:38:53.440 and the associated criticism that executive pay 00:38:53.440 --> 00:38:55.340 focused on asset growth rather than specific 00:38:55.340 --> 00:38:59.019 greenhouse gas emissions reduction, How do you 00:38:59.019 --> 00:39:01.079 think investor -owned utilities should best be 00:39:01.079 --> 00:39:03.480 incentivized or perhaps more forcefully regulated 00:39:03.480 --> 00:39:06.519 to achieve true comprehensive decarbonization 00:39:06.519 --> 00:39:08.840 across all of their massive operational areas 00:39:08.840 --> 00:39:11.539 without simply passing all of the capital risk 00:39:11.539 --> 00:39:14.059 directly onto the consumer? It's a challenge 00:39:14.059 --> 00:39:16.059 of balancing corporate fiduciary duty with a 00:39:16.059 --> 00:39:17.579 critical environmental mandate.