Notes to the Financial Statements — Continued Net Periodic Benefit Cost The components of the Companies’ net periodic benefit costs for 2013, 2012, and 2011 were as follows:
## Table 0 ##
* Relates to an increase in CECONY’s pension obligation of $45 million from a 1999 special retirement program.
Funded Status The funded status at December 31, 2013, 2012, and 2011 was as follows:
## Table 1 ##
The decrease in the pension plan’s projected benefit obligation (due primarily to increased discount rates) and an increase in actual return on plan assets, were the primary drivers in the decreased pension liability at Con Edison and CECONY of $2,829 million and $2,672 million, respectively, compared with December 31, 2012.
For Con Edison, this decrease in pension liability resulted in a decrease to regulatory assets of $2,799 million for unrecognized net losses and unrecognized prior service costs associated with the Utilities consistent with the accounting rules for regulated operations and a credit to OCI of $24 million (net of taxes) for the unrecognized net losses and an immaterial change to OCI (net of taxes) for the unrecognized prior service costs associated with the competitive energy businesses and O&R’s New Jersey and Pennsylvania utility subsidiaries.
Notes to the Financial Statements — Continued As of December 31, 2013, Con Edison had 1,116 contracts, including 547 CECONY contracts, which were considered to be derivatives under the accounting rules for derivatives and hedging (excluding qualifying derivative contracts, which have been designated as normal purchases or normal sales contracts).
The following table presents the number of contracts by commodity type:
## Table 2 ##
(a) Qualifying derivative contracts, which have been designated as normal purchases or normal sales contracts, are not reported at fair value under the accounting rules for derivatives and hedging and, therefore, are excluded from the table.
(b) Volumes are reported net of long and short positions.
The Companies also enter into electric congestion and gas basis swap contracts to hedge the congestion and transportation charges which are associated with electric and gas contracts and hedged volumes.
The collateral requirements associated with, and settlement of, derivative transactions are included in net cash flows from operating activities in the Companies’ consolidated statement of cash flows.
Most derivative instrument contracts contain provisions that may require the Companies to provide collateral on derivative instruments in net liability positions.
The amount of collateral to be provided will depend on the fair value of the derivative instruments and the Companies’ credit ratings.
The aggregate fair value of all derivative instruments with creditrisk-related contingent features that are in a net liability position and collateral posted at December 31, 2013, and the additional collateral that would have been required to be posted had the lowest applicable credit rating been reduced one level and to below investment grade were:
## Table 3 ##
(a) Non-derivative transactions for the purchase and sale of electricity and gas and qualifying derivative instruments, which have been designated as normal purchases or normal sales, are excluded from the table.
These transactions primarily include purchases of electricity from independent system operators.
In the event the Utilities and Con Edison’s competitive energy businesses were no longer extended unsecured credit for such purchases, the Companies would be required to post collateral, which at December 31, 2013, would have amounted to an estimated $28 million for Con Edison, including $15 million for CECONY.
For certain other such non-derivative transactions, the Companies could be required to post collateral under certain circumstances, including in the event counterparties had reasonable grounds for insecurity.
(b) The Companies measure the collateral requirements by taking into consideration the fair value amounts of derivative instruments that contain credit-risk-related contingent features that are in a net liabilities position plus amounts owed to counterparties for settled transactions and amounts required by counterparties for minimum financial security.
The fair value amounts represent unrealized losses, net of any unrealized gains where the Companies have a legally enforceable right of setoff.
(c) Derivative instruments that are net assets have been excluded from the table.
At December 31, 2013, if Con Edison had been downgraded to below investment grade, it would have been required to post additional collateral for such derivative instruments of $41 million, including $1 million for CECONY.
Interest Rate Swap O&R has an interest rate swap, which terminates in October 2014, pursuant to which it pays a fixed-rate of 6.09 percent and receives a LIBOR-based variable rate.
The fair value of this interest rate swap at December 31, 2013 was an unrealized loss of $2 million, which has been included in Con Edison’s consolidated balance sheet as a current liability/fair value of derivative liabilities and a regulatory asset.
The increase in the fair value of the swap for the year ended December 31, 2013 was $4 million.
In the event O&R’s credit rating was downgraded to BBB- or lower by S&P or Baa3 or lower by Moody’s, the swap counterparty could elect to terminate the agreement and, if it did so, the parties would then be required to settle the transaction.
Note P – Fair Value Measurements The accounting rules for fair value measurements and disclosures define fair value as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date in a principal or most advantageous market.
Fair value is a market-based measurement that is determined based on inputs, which refer broadly to assumptions that market participants use in pricing assets or liabilities.
These inputs can be readily observable, market corroborated, or generally unobservable firm inputs.
The Companies often make certain assumptions that market participants would use in pricing the asset or liability, including assumptions about risk, and the risks inherent in the inputs to valuation techniques.
The Companies use valuation techniques that maximize the use of observable inputs and minimize the use of unobservable inputs.
The accounting rules for fair value measurements and disclosures established a fair value hierarchy, which prioritizes the inputs to valuation techniques used to measure fair value in three broad levels.
The rules require that assets and liabilities be classified in their entirety based on the level of input that is
permit, the company is required to investigate the property and, where environmental contamination is found and action is necessary, to conduct corrective action to remediate the contamination.
The company has investigated various sections of the property and is performing additional investigations.
The company has submitted to the NYSDEC and the New York State Department of Health reports and in the future will be submitting additional reports identifying the known areas of contamination.
The company estimates that its undiscounted potential liability for the completion of the site investigation and cleanup of the known contamination on the property could range from $152 million to $451 million.
Flushing Service Center Site The owner of a former CECONY service center facility in Flushing, New York, informed the company that PCB contamination had been detected on a substantial portion of the property, which the owner remediated pursuant to the New York State Brownfield Cleanup Program administered by the NYSDEC and has redeveloped for residential and commercial use.
The property owner’s claim against the company for its environmental response costs for the site has been resolved.
In September 2007, the NYSDEC demanded that the company investigate and remediate PCB contamination that may have migrated into the adjacent Flushing River from the site.
In April 2008, the company and NYSDEC entered into a consent order under which the company has agreed to implement a NYSDECapproved investigation program for the Flushing River and, if deemed necessary by the NYSDEC to protect human health and the environment from such contamination, to implement a NYSDEC-approved remediation program for any PCB contamination in the river attributable to the site.
In March 2011, the company submitted to NYSDEC a report indicating that PCBs had migrated from the site to sediment in a portion of the river.
In August 2013, the NYSDEC selected a remedy that requires the company to submit a remedial design report, remove contaminated sediment, restore the river bed with clean material, prepare a site management plan and implement institutional controls.
The company estimates that its undiscounted potential liability for the completion of the cleanup in Flushing River will be at least $5.4 million.
Gowanus Canal In August 2009, CECONY received a notice of potential liability and request for information from the EPA about the operations of the company and its predecessors at sites adjacent or near the 1.8 mile Gowanus Canal in Brooklyn, New York.
In March 2010, the EPA added the Gowanus Canal to its National Priorities List of Superfund sites.
The canal’s adjacent waterfront is primarily commercial and industrial, currently consisting of concrete plants, warehouses, and parking lots, and the canal is near several residential neighborhoods.
In September 2013, the EPA issued its record of decision for the site.
The EPA concluded that there was significant contamination at the site, including polycyclic aromatic hydrocarbons, polychlorinated biphenyls (PCBs), pesticides, metals, and volatile organic compounds.
The EPA selected a remedy for the site that includes dredging and disposal of some contaminated sediments and stabilization and capping of contamination that will not be removed.
The EPA estimated the cost of the selected remedy to be $506.1 million (and indicated the actual cost could be significantly higher or lower).
The EPA has identified 35 potentially responsible parties (PRPs) with respect to the site, including CECONY (which the EPA indicated has facilities that may be a source of PCBs at the site).
The EPA is expected to order certain of the PRPs, including CECONY, to coordinate and cooperate with each other to perform and/or fund the remedial design for the selected remedy.
CECONY is unable to predict its exposure to liability with respect to the Gowanus Canal site.
Other Superfund Sites CECONY is a potentially responsible party (PRP) with respect to other Superfund sites where there are other PRPs and where it is generally not responsible for managing the site investigation and remediation.
Work at these sites is in various stages, with the company participating in PRP groups at some of the sites.
Investigation, remediation and monitoring at some of these sites have been, and are expected to continue to be, conducted over extended periods of time.
The company does not believe that it is reasonably likely that monetary sanctions, such as penalties, will be imposed upon it by any governmental authority with respect to these sites.
The following table lists each of CECONY’s other Superfund sites for which the company anticipates it may have a liability.
The table also shows for each such site, its location, the year in which the company was designated or alleged to be a PRP or to otherwise have responsibilities with respect to the site (shown in the table under “Start”), the name of the court or agency in which proceedings with respect to the site are pending and CECONY’s estimated percentage of total liability for each site.
The company currently estimates that its potential liability for investigation, remediation, monitoring and environmental damages at each site is $0.2 million or less, with the exception of the Cortese Landfill site for which the estimate is $1 million.
Superfund liability is joint and several.
The company’s estimate of its liability for each site was determined pursuant to consent decrees, settlement agreements or otherwise and in light of the financial condition of other PRPs.
The company’s actual liability could differ substantially from amounts estimated.
## Table 4 ##
Our existing cash flow hedges are highly effective and there is no current impact on earnings due to hedge ineffectiveness.
It is our policy to execute such instruments with credit-worthy banks and not to enter into derivative financial instruments for speculative purposes.
Contractual Obligations FIS’s long-term contractual obligations generally include its long-term debt and operating lease payments on certain of its property and equipment.
The following table summarizes FIS’s significant contractual obligations and commitments as of December 31, 2007 (in thousands):

<table><tr><td></td><td colspan="3">Con Edison</td><td colspan="3">CECONY</td></tr><tr><td> (Millions of Dollars)</td><td>2013</td><td>2012</td><td>2011</td><td>2013</td><td>2012</td><td>2011</td></tr><tr><td>Service cost – including administrative expenses</td><td>$267</td><td>$237</td><td>$190</td><td>$249</td><td>$220</td><td>$177</td></tr><tr><td>Interest cost on projected benefit obligation</td><td>537</td><td>547</td><td>560</td><td>503</td><td>513</td><td>524</td></tr><tr><td>Expected return on plan assets</td><td>-750</td><td>-705</td><td>-734</td><td>-713</td><td>-670</td><td>-698</td></tr><tr><td>Recognition of net actuarial loss</td><td>832</td><td>709</td><td>530</td><td>788</td><td>670</td><td>501</td></tr><tr><td>Recognition of prior service costs</td><td>5</td><td>8</td><td>8</td><td>4</td><td>6</td><td>6</td></tr><tr><td>NET PERIODIC BENEFIT COST</td><td>$891</td><td>$796</td><td>$554</td><td>$831</td><td>$739</td><td>$510</td></tr><tr><td>Amortization of regulatory asset*</td><td>2</td><td>2</td><td>2</td><td>2</td><td>2</td><td>2</td></tr><tr><td>TOTAL PERIODIC BENEFIT COST</td><td>$893</td><td>$798</td><td>$556</td><td>$833</td><td>$741</td><td>$512</td></tr><tr><td>Cost capitalized</td><td>-348</td><td>-277</td><td>-185</td><td>-327</td><td>-260</td><td>-172</td></tr><tr><td>Reconciliation to rate level</td><td>-84</td><td>-8</td><td>-65</td><td>-87</td><td>-12</td><td>-68</td></tr><tr><td>Cost charged to operating expenses</td><td>$461</td><td>$513</td><td>$306</td><td>$419</td><td>$469</td><td>$272</td></tr></table>
<table><tr><td></td><td colspan="3">Con Edison</td><td colspan="3">CECONY</td></tr><tr><td> (Millions of Dollars)</td><td>2013</td><td>2012</td><td>2011</td><td>2013</td><td>2012</td><td>2011</td></tr><tr><td>CHANGE IN PROJECTED BENEFIT OBLIGATION</td><td></td><td></td><td></td><td></td><td></td><td></td></tr><tr><td>Projected benefit obligation at beginning of year</td><td>$13,406</td><td>$11,825</td><td>$10,307</td><td>$12,572</td><td>$11,072</td><td>$9,653</td></tr><tr><td>Service cost – excluding administrative expenses</td><td>259</td><td>224</td><td>186</td><td>241</td><td>209</td><td>174</td></tr><tr><td>Interest cost on projected benefit obligation</td><td>537</td><td>547</td><td>560</td><td>503</td><td>513</td><td>524</td></tr><tr><td>Net actuarial (gain)/loss</td><td>-1,469</td><td>1,323</td><td>1,251</td><td>-1,388</td><td>1,255</td><td>1,166</td></tr><tr><td>Benefits paid</td><td>-536</td><td>-513</td><td>-479</td><td>-499</td><td>-477</td><td>-445</td></tr><tr><td>PROJECTED BENEFIT OBLIGATION AT END OF YEAR</td><td>$12,197</td><td>$13,406</td><td>$11,825</td><td>$11,429</td><td>$12,572</td><td>$11,072</td></tr><tr><td>CHANGE IN PLAN ASSETS</td><td></td><td></td><td></td><td></td><td></td><td></td></tr><tr><td>Fair value of plan assets at beginning of year</td><td>$9,135</td><td>$7,800</td><td>$7,721</td><td>$8,668</td><td>$7,406</td><td>$7,340</td></tr><tr><td>Actual return on plan assets</td><td>1,310</td><td>1,094</td><td>37</td><td>1,241</td><td>1,040</td><td>33</td></tr><tr><td>Employer contributions</td><td>879</td><td>785</td><td>542</td><td>819</td><td>729</td><td>498</td></tr><tr><td>Benefits paid</td><td>-536</td><td>-513</td><td>-479</td><td>-499</td><td>-477</td><td>-445</td></tr><tr><td>Administrative expenses</td><td>-33</td><td>-31</td><td>-21</td><td>-32</td><td>-30</td><td>-20</td></tr><tr><td>FAIR VALUE OF PLAN ASSETS AT END OF YEAR</td><td>$10,755</td><td>$9,135</td><td>$7,800</td><td>$10,197</td><td>$8,668</td><td>$7,406</td></tr><tr><td>FUNDED STATUS</td><td>$-1,442</td><td>$-4,271</td><td>$-4,025</td><td>$-1,232</td><td>$-3,904</td><td>$-3,666</td></tr><tr><td>Unrecognized net loss</td><td>$2,759</td><td>$5,594</td><td>$5,351</td><td>$2,617</td><td>$5,297</td><td>$5,063</td></tr><tr><td>Unrecognized prior service costs</td><td>17</td><td>23</td><td>30</td><td>6</td><td>10</td><td>16</td></tr><tr><td>Accumulated benefit obligation</td><td>11,004</td><td>11,911</td><td>10,595</td><td>10,268</td><td>11,116</td><td>9,876</td></tr></table>
<table><tr><td></td><td colspan="3"> Electric Derivatives</td><td></td><td colspan="3"> Gas Derivatives</td></tr><tr><td></td><td> Number of Energy Contracts(a)</td><td> MWHs(b)</td><td> Number of Capacity Contracts(a)</td><td> MWs(b)</td><td> Number of Contracts(a)</td><td> Dths(b)</td><td> Total Number Of Contracts(a)</td></tr><tr><td>Con Edison</td><td>501</td><td>16,143,806</td><td>61</td><td>6,376</td><td>554</td><td>74,672,185</td><td>1,116</td></tr><tr><td>CECONY</td><td>75</td><td>3,075,850</td><td>4</td><td>1,200</td><td>468</td><td>70,490,000</td><td>547</td></tr></table>
<table><tr><td> (Millions of Dollars)</td><td> Con Edison(a)</td><td> CECONY(a)</td></tr><tr><td>Aggregate fair value – net liabilities</td><td>$17</td><td>$14</td></tr><tr><td>Collateral posted</td><td>$-</td><td>$-</td></tr><tr><td>Additional collateral(b) (downgrade one level from current ratings)</td><td>$-</td><td>$-</td></tr><tr><td>Additional collateral(b) (downgrade to below investment grade from currentratings)</td><td>$11(c)</td><td>$9(c)</td></tr></table>
<table><tr><td> Site</td><td> Location</td><td> Start</td><td> Court or Agency</td><td> % of Total Liability</td></tr><tr><td>Maxey Flats Nuclear</td><td>Morehead, KY</td><td>1986</td><td>EPA</td><td>0.8%</td></tr><tr><td>Curcio Scrap Metal</td><td>Saddle Brook, NJ</td><td>1987</td><td>EPA</td><td>100%</td></tr><tr><td>Metal Bank of America</td><td>Philadelphia, PA</td><td>1987</td><td>EPA</td><td>0.97%</td></tr><tr><td>Cortese Landfill</td><td>Narrowsburg, NY</td><td>1987</td><td>EPA</td><td>6.0%</td></tr><tr><td>Global Landfill</td><td>Old Bridge, NJ</td><td>1988</td><td>EPA</td><td>0.3%</td></tr><tr><td>Borne Chemical</td><td>Elizabeth, NJ</td><td>1997</td><td>NJDEP</td><td>0.7%</td></tr></table>

Question: When is Service cost – excluding administrative expenses in Con Edison the largest?