Superfund Sites Note G – Environmental Matters 74 Con Edison Annual Report 2003 The accrued liabilities and regulatory assets related to Superfund Sites for each of the Companies at December 31, 2003 and December 31, 2002 were as follows: For the 12 months ended December 31, 2003, Con Edison of New York and O&R incurred approximately $21 million and $5 million, respectively, for environmental remediation costs. No insurance recoveries were received. For the 12 months ended December 31, 2002, Con Edison of New York and O&R incurred approximately $22 million and $2 million, respectively, for environmental remediation costs, and O&R received  insurance recoveries of $7 million. For Superfund Sites where there are other potentially responsi- ble parties and the Utilities are not managing the site investiga- tion and remediation, the accrued liability represents an esti- mate of the amount the Utilities will need to pay to discharge their related obligations. For Superfund Sites (including the manufactured gas sites) for which one of the Utilities is manag- ing the investigation and remediation, the accrued liability rep- resents an estimate of the undiscounted cost to investigate the sites and, for sites that have been investigated in whole or in part, the cost to remediate the sites in light of the information available, applicable remediation standards and experience with similar sites. The Federal Comprehensive Environmental Response, Compensation and Liability Act of 1980 and similar state statutes (Superfund) impose joint and several liability, regardless of fault, upon generators of hazardous substances for investi- gation and remediation costs (which includes costs of demoli- tion, removal, disposal, storage, replacement, containment and monitoring) and environmental damages. Liability under these laws can be material and may be imposed for contamination from past acts, even though such past acts may have been lawful at the time they occurred. The sites at which the Utilities have been asserted to have liability under these laws, including their manufactured gas sites, are referred to herein as “Superfund Sites.” Hazardous substances, such as asbestos, polychlorinated biphenyls (PCBs) and coal tar, have been used or generated in the course of operations of the Utilities and their predecessors and are present at sites and in facilities and equipment they currently or previously owned, including sites at which gas was manufactured or stored. Most of the accrued Superfund Site liability relates to Superfund Sites that have been investigated, in whole or in part. As investigations progress on these and other sites, the Companies expect that additional liability will be accrued, the amount of which is not presently determinable but may be material. The Utilities are permitted under their current rate agreements to recover or defer as regulatory assets (for subse- quent recovery through rates) certain site investigation and re mediation costs. Con Edison of New York estimated in 2002 that for its manu- factured gas sites, many of which have not been investigated, its aggregate undiscounted potential liability for the investiga- tion and remediation of coal tar and/or other manufactured gas plant-related environmental contaminants could range from approximately $65 million to $1.1 billion. O&R estimated in 2002 that for its manufactured gas sites the aggregate undis- counted potential liability for the remediation of such contami- nants could range from approximately $25 million to $95 mil- lion. These estimates were based on the assumption that there is contamination at each of the sites and additional assump- tions regarding the extent of contamination and the type and extent of remediation that may be required. Actual experience may be materially different. Suits have been brought in New York State and federal courts against the Utilities 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 Utilities. The suits that have been resolved, which are many, have been resolved without any payment by the Utilities, or for amounts that were not, in the aggregate, material to them. The amounts specified in all the remaining thousands of suits total billions of dollars but the Companies believe that these amounts are greatly exaggerated, as experienced through the disposition of previous claims. Con Edison of New York estimated in 2002 that its aggregate undiscounted potential liability for these suits and additional such suits that may be brought over the next 50 years ranges from approximately $38 million to $162 million (with no amount within the range considered  Asbestos Proceedings Con Edison  Con Edison of New York O&R (Millions of Dollars) 2003 2002 2003 2002 2003 2002 Accrued liabilities: Manufactur ed  gas plant sites $145 $110 $106 $76 $39 $34 Other Superfund Sites 48 33 47 32 1 1 To tal $193 $143 $153 $108 $40 $35 Regulatory assets $155 $183 $116 $152 $39 $31