Regulatory Assets and Liabilities Regulatory assets and liabilities at December 31, 2003 and 2002 wer e comprised of the following items: Con Edison Con Edison of New York O&R (Millions of Dollars) 2003 2002 2003 2002 2003 2002 Regulatory Assets Future federal income tax $ 1,629 $1,614 $1,589 $1,575 $040 $039 Recoverable energy costs 264 310 176 223 88 87 Sale of nuclear generating plant 159 215 159 215 - - Real estate sale costs - First Avenue properties 138 134 138 134 - - Deferred retirement program costs 77 84 33 38 44 46 Deferred unbilled gas revenue 44 44 44 44 - - Deferred environmental remediation reserve costs 155 83 116 52 39 31 Workers’ compensation 51 54 51 54 - - Deferred asbestos-related reserve costs 39 39 38 38 1 1 Divestiture - capacity replacement reconciliation 16 29 16 29 - - Deferred revenue taxes 48 78 45 72 3 6 World Trade Center restoration costs 68 63 68 63 - - NYS tax law changes 23 43 23 43 - - Property tax reconciliation 41 (33) 41 (33) - - Other 109 109 103 83 6 26 Total Regulatory Assets $1,861 $1,866 $1,640 $1,630 $221 $236 Regulatory Liabilities Allowance for cost of removal less salvage $ 1,777 $1,813 $1,721 $1,773 $056 $040 NYISO reconciliation 134 107 134 107 - - Gain on divestiture 56 69 55 64 1 5 Deposit from sale of First Avenue properties 50 50 50 50 - - Refundable energy costs 21 31 - - 21 31 Accrued electric rate reduction 33 45 32 38 1 7 DC service incentive 38 35 38 35 - - Transmission congestion contracts 284 125 284 125 - - Gas rate plan - World Trade Center recovery 36 36 36 36 - - Electric excess earnings 49 40 49 40 - - Natural gas refunds 9 17 9 17 - - NYS tax law changes 18 38 18 38 - - Gas interference – cost sharing 10 12 10 12 - - Federal income tax refund 29 29 29 29 - - Gas interruptible sales credits 26 25 26 25 - - Steam special franchise tax 10 3 10 3 - - Other 179 157 163 135 16 22 Total Regulatory Liabilities $1,759 $1,632 $1,664 $1,527 $ 0 95 $105 64 Con Edison Annual Report 2003