<PAGE>





                                  FORM 10-Q

                      SECURITIES AND EXCHANGE COMMISSION

                            WASHINGTON, D.C. 20549

                           -----------------------

             [x] Quarterly Report Pursuant To Section 13 or 15(d)
                    of the Securities Exchange Act of 1934
                 FOR THE QUARTERLY PERIOD ENDED JUNE 30, 1997

                                      OR

            [ ] Transition Report Pursuant to Section 13 or 15(d)
                    of the Securities Exchange Act of 1934

                          -------------------------

                          Commission File No. 1-1217


                CONSOLIDATED EDISON COMPANY OF NEW YORK, INC.
                             (Name of Registrant)

                     NEW YORK                     13-5009340
             (State of  Incorporation)  (IRS Employer Identification No.)

          4 IRVING PLACE, NEW YORK, NEW YORK 10003 - (212) 460-4600
                        (Address and Telephone Number)


The Registrant has filed all reports required to be filed by Section 13 or 15(d)
of the  Securities  Exchange Act of 1934 during the  preceding 12 months and has
been subject to such filing requirements for the past 90 days.

                            Yes ___X___ No _______

As of the close of business on July 31, 1997,  the  Registrant  had  outstanding
235,031,192 shares of Common Stock ($2.50 par value).



<PAGE>


                                    - 2 -




PART I. -  FINANCIAL INFORMATION


      CONTENTS                                                    PAGE NO.

ITEM 1.     Financial  Statements:

               Consolidated Balance Sheet                            3-4

               Consolidated Income Statements                        5-7

               Consolidated Statements of Cash Flows                 8-9

               Note to Financial Statements                        10-11


ITEM 2.     Management's Discussion and Analysis                   12-23
            of Financial Condition and Results of
            Operations



                          -------------------------



The  following  consolidated  financial  statements  are  unaudited  but, in the
opinion of  management,  reflect  all  adjustments  (which  include  only normal
recurring  adjustments)  necessary  to a fair  statement  of the results for the
interim  periods   presented.   These  condensed   unaudited  interim  financial
statements  do  not  contain  the  detail,  or  footnote  disclosure  concerning
accounting  policies  and other  matters,  which would be included in  full-year
financial  statements and,  accordingly,  should be read in conjunction with the
Company's audited financial statements (including the notes thereto) included in
the Company's  Annual  Report on Form 10-K for the year ended  December 31, 1996
(File No. 1-1217).



<PAGE>



                                           - 3 -


<TABLE>
<CAPTION>
                       CONSOLIDATED EDISON COMPANY OF NEW YORK, INC.
                                 CONSOLIDATED BALANCE SHEET
                  AS AT JUNE 30, 1997, DECEMBER 31, 1996 AND JUNE 30, 1996


                                                              As At
                                           June 30, 1997  Dec. 31, 1996  June 30, 1996
                                                       (Thousands of Dollars)
<S>                                         <C>            <C>            <C>

ASSETS
Utility plant, at original cost
Electric                                    $ 11,754,898   $ 11,588,344   $ 11,444,742
  Gas                                          1,686,174      1,642,231      1,581,682
  Steam                                          546,949        536,672        520,536
  General                                      1,159,098      1,152,001      1,119,112
                                            ------------   ------------  -------------
      Total                                   15,147,119     14,919,248     14,666,072
    Less: Accumulated depreciation             4,447,539      4,285,732      4,205,894
                                            ------------   ------------  -------------
      Net                                     10,699,580     10,633,516     10,460,178
  Construction work in progress                  324,400        332,333        356,915
  Nuclear fuel assemblies and components,
    less accumulated amortization                102,101        101,461         69,652
                                            ------------   ------------  -------------

                        Net utility plant     11,126,081     11,067,310     10,886,745
                                            ------------   ------------   ------------

Current assets
  Cash and temporary cash investments             12,231        106,882         57,369
  Accounts receivable - customers, less
    allowance for uncollectible accounts
    of $20,804, $21,600 and $22,514              472,773        544,004        499,516
  Other receivables                               51,763         42,056         46,102
  Regulatory accounts receivable                    (866)        45,397          4,938
  Fuel, at average cost                           34,940         64,709         41,415
  Gas in storage, at average cost                 37,746         44,979         23,373
  Materials and supplies, at average cost        199,795        204,801        215,169
  Prepayments                                    293,592         64,492         62,634
  Other current assets                            15,732         15,167         14,732
                                            ------------   ------------   ------------

                     Total current assets      1,117,706      1,132,487        965,248
                                            ------------   ------------   ------------

Investments and nonutility property              217,745        177,224        164,358
                                            ------------   ------------   ------------

Deferred charges
  Enlightened Energy program costs               120,837        133,718        129,739
  Unamortized debt expense                       125,770        130,786        135,934
  Recoverable fuel costs                          43,170        101,462         21,968
  Power contract termination costs                35,136         58,560         81,984
  Other deferred charges                         280,602        271,356        267,877
                                            ------------   ------------   ------------

                   Total deferred charges        605,515        695,882        637,502
                                            ------------   ------------   ------------

Regulatory asset-future federal
  income taxes                                   948,410        984,282      1,016,829
                                            -------------  ------------   ------------

                                    Total   $ 14,015,457   $ 14,057,185   $ 13,670,682
                                            ============   ============   ============



The accompanying note is an integral part of these financial statements.
</TABLE>


<PAGE>


                                           - 4 -

<TABLE>
<CAPTION>
                       CONSOLIDATED EDISON COMPANY OF NEW YORK, INC.
                                 CONSOLIDATED BALANCE SHEET
                  AS AT JUNE 30, 1997, DECEMBER 31, 1996 AND JUNE 30, 1996


                                                                     As At
                                               June 30, 1997  Dec. 31, 1996  June 30, 1996
                                                         (Thousands of Dollars)
<S>                                          <C>            <C>            <C>
CAPITALIZATION AND LIABILITIES

Capitalization
Common stock, authorized 340,000,000
   shares; outstanding 235,023,795
   shares, 234,993,596 shares and
   234,978,113 shares                        $  1,478,768   $  1,478,536   $  1,478,416
  Capital stock expense                           (34,754)       (34,903)       (35,052)
  Retained earnings                             4,242,133      4,283,935      4,089,399
                                             ------------   ------------   ------------
     Total common shareholders' equity          5,686,147      5,727,568      5,532,763
                                             ------------   ------------   ------------
  Preferred stock
     Subject to mandatory redemption
      7.20%  Series I                              47,500         47,500         47,500
      6-1/8% Series J                              37,050         37,050         37,050
                                             ------------   ------------   ------------
            Total subject to mandatory
                  redemption                       84,550         84,550         84,550
                                             ------------   ------------   ------------
    Other preferred stock
      $ 5 Cumulative Preferred                    175,000        175,000        175,000
        5-3/4%  Series  A                           7,061          7,061          7,061
        5-1/4%  Series  B                          13,844         13,844         13,844
        4.65%   Series  C                          15,330         15,330         15,329
        4.65%   Series  D                          22,233         22,233         22,233
        6% Convertible Series B                     4,398          4,630          4,750
                                             ------------   ------------   ------------
           Total other preferred stock            237,866        238,098        238,217
                                             ------------   -------------  ------------
                 Total preferred stock            322,416        322,648        322,767
                                             ------------   ------------   ------------
  Long-term debt                                4,288,383      4,238,622      4,190,366
                                             ------------   ------------   ------------
                  Total capitalization         10,296,946     10,288,838     10,045,896
                                             ------------   ------------   ------------

Noncurrent liabilities
Obligations under capital leases                   41,265         42,661         43,969 
  Other noncurrent liabilities                     82,125         80,499         80,701
                                             ------------   ------------   ------------
        Total noncurrent liabilities              123,390        123,160        124,670
                                             ------------   ------------   ------------

Current liabilities
  Long-term debt due within one year              202,630        106,256         82,095
  Accounts payable                                375,438        431,115        341,235
  Notes payable                                    15,000           -              -
  Customer deposits                               159,749        159,616        158,312
  Accrued taxes                                   (56,676)        27,342         38,163
  Accrued interest                                 83,310         83,090         83,625
  Accrued wages                                    78,312         80,225         75,815
  Other current liabilities                       142,895        147,968        148,073
                                             ------------   ------------   ------------
             Total current liabilities          1,000,658      1,035,612        927,318
                                             ------------   ------------   ------------

Provisions related to future federal income
  taxes and other deferred credits
  Accumulated deferred federal income tax       2,333,097      2,289,092      2,270,151
  Accumulated deferred investment tax credits     168,070        172,510        176,860
  Other deferred credits                           93,296        147,973        125,787
                                             ------------   ------------   ------------
                Total deferred credits          2,594,463      2,609,575      2,572,798
                                             ------------   ------------   ------------
                                 Total       $ 14,015,457   $ 14,057,185   $ 13,670,682
                                             ============   ============   ============

</TABLE>

The accompanying note is an integral part of these financial statements.


<PAGE>



                                           - 5 -

                       CONSOLIDATED EDISON COMPANY OF NEW YORK, INC.
                               CONSOLIDATED INCOME STATEMENT
                     FOR THE THREE MONTHS ENDED JUNE 30, 1997 AND 1996

                                                            1997           1996
                                                            ----           ----
                                                         (Thousands of Dollars)
Operating revenues
  Electric                                           $ 1,228,366    $ 1,244,306
  Gas                                                    213,376        223,428
  Steam                                                   62,272         72,001
                                                     -----------    -----------
                          Total operating revenues     1,504,014      1,539,735
Operating expenses
  Purchased power                                        314,221        321,588
  Fuel                                                   122,426        120,389
  Gas purchased for resale                                85,408         96,554
  Other operations                                       283,338        286,676
  Maintenance                                            146,859        123,915
  Depreciation and amortization                          124,932        119,981
  Taxes, other than federal income tax                   270,802        277,474
  Federal income tax                                      25,990         40,880
                                                     -----------    -----------
                          Total operating expenses     1,373,976      1,387,457

Operating income                                         130,038        152,278
Other income (deductions)
  Investment income                                        2,849          2,283
  Allowance for equity funds used during construction      1,520            745
  Other income less miscellaneous deductions              (5,764)        (1,996)
  Federal income tax                                         650           (510)
                                                     -----------    -----------
                                Total other income          (745)           522
                                                     -----------    -----------

Income before interest charges                           129,293        152,800

Interest on long-term debt                                79,192         78,106
Other interest                                             3,287          3,629
Allowance for borrowed funds used during construction       (745)          (350)
                                                     -----------    -----------
                              Net interest charges        81,734         81,385

Net income                                                47,559         71,415
Preferred stock dividend requirements                     (4,603)        (4,608)
                                                     -----------    -----------
Net income for common stock                          $    42,956    $    66,807
                                                     ===========    ===========

Common shares outstanding - average (000)                235,016        234,974
Earnings per share                                     $    0.18      $    0.28
                                                       =========      =========
Dividends declared per share of common stock           $   0.525      $    0.52
                                                       =========      =========
Sales
  Electric (Thousands of kilowatthours)
    Con Edison customers                               8,281,386      8,461,823
    Delivery service to NYPA and others                2,028,973      2,072,831
    Service for municipal agencies                       296,530        176,772
                                                     -----------    -----------
      Total sales in service territory                10,606,889     10,711,426
    Off-system sales  (A)                                701,070      1,108,443
  Gas (dekatherms)
    Firm                                              19,685,630     20,290,373
    Off-peak firm/interruptible                        5,215,550      4,271,271
                                                     -----------    -----------
      Total sales to Con Edison customers             24,901,180     24,561,644
    Transportation of customer-owned gas
      NYPA                                             4,668,422         15,207
      Others                                           1,798,581      1,422,041
    Off-system sales                                   1,255,168      3,287,507
      Total sales and transportation                  32,623,351     29,286,399
  Steam (Thousands of pounds)                          4,796,828      5,458,166

(A) Includes 424,223 and 537,445  thousands of kWh, respectively,  subsequently
    purchased by the Company for sale to its customers.

The accompanying note is an integral part of these financial statements.


<PAGE>
                                           - 6 -

                       CONSOLIDATED EDISON COMPANY OF NEW YORK, INC.
                              CONSOLIDATED INCOME STATEMENT
                     FOR THE SIX MONTHS ENDED JUNE 30, 1997 AND 1996
                     -----------------------------------------------
                                                        1997           1996
                                                        ----           ----
                                                       (Thousands of Dollars)
Operating revenues
  Electric                                         $ 2,497,316    $ 2,530,574
  Gas                                                  668,396        630,292
  Steam                                                224,450        246,234
                                                   -----------    -----------
                         Total operating revenues    3,390,162      3,407,100
Operating expenses
  Purchased power                                      666,929        625,587
  Fuel                                                 273,780        304,277
  Gas purchased for resale                             308,120        277,394
  Other operations                                     560,177        563,977
  Maintenance                                          261,022        248,950
  Depreciation and amortization                        248,684        252,546(A)
  Taxes, other than federal income tax                 575,764        583,510
  Federal income tax                                   118,130        145,920
                                                    -----------    -----------
                         Total operating expenses    3,012,606      3,002,161

Operating income                                       377,556        404,939
Other income (deductions)
  Investment income                                      3,693          3,721
  Allowance for equity funds used during construction    3,320          1,258
  Other income less miscellaneous deductions            (6,984)        (2,673)
  Federal income tax                                       600           (930)
                                                    -----------    -----------
                       Total other income                  629          1,376
                                                   -----------    -----------

Income before interest charges                         378,185        406,315

Interest on long-term debt                             157,944        152,475
Other interest                                           7,701          8,481
Allowance for borrowed funds used during construction   (1,627)          (591)
                                                    -----------    -----------
                    Net interest charges               164,018        160,365

Net income                                             214,167        245,950
Preferred stock dividend requirements                   (9,207)       (10,643)
Gain on refunding of preferred stock                      -            13,943(A)
                                                   -----------    -----------
Net income for common stock                        $   204,960    $   249,250
                                                   ===========    ===========

Common shares outstanding - average (000)              235,009        234,968
Earnings per share                                   $    0.87      $    1.06
                                                     =========      =========
Dividends declared per share of common stock         $    1.05      $    1.04
                                                     =========      =========
Sales
  Electric (Thousands of kilowatthours)
    Con Edison customers                            17,213,254     17,635,244
    Delivery service to NYPA and others              4,250,306      4,392,665
    Service for municipal agencies                     510,591        284,227
                                                   -----------    -----------
      Total sales in service territory              21,974,151     22,312,136
    Off-system sales (B)                             1,012,848      1,269,146
  Gas (dekatherms)
    Firm                                            58,928,092     65,132,812
    Off-peak firm/interruptible                     13,419,753     11,125,581
                                                   -----------    -----------
      Total sales to Con Edison customers           72,347,845     76,258,393
    Transportation of customer-owned gas
      NYPA                                           7,368,630        194,555
      Others                                         3,547,403      1,881,683
    Off-system sales                                 4,760,561      7,136,458
                                                   -----------    -----------
      Total sales and transportation                88,024,439     85,471,089
  Steam (Thousands of pounds)                       14,937,516     17,322,853

(A) The gain from the preferred  stock  refunding was offset by an additional
    provision for depreciation.

(B) Includes 488,023 and 537,445  thousands of kWh,  respectively, subsequently
    purchased by the Company for sale to its customers.

  The accompanying note is an integral part of these financial statements.

<PAGE>
                                           - 7 -
                       CONSOLIDATED EDISON COMPANY OF NEW YORK, INC.
                               CONSOLIDATED INCOME STATEMENT
                    FOR THE TWELVE MONTHS ENDED JUNE 30, 1997 AND 1996
                    --------------------------------------------------
                                                         1997           1996
                                                         ----           ----
                                                         (Thousands of Dollars)
Operating revenues
  Electric                                         $ 5,507,860    $ 5,466,102
  Gas                                                1,053,175        952,617
  Steam                                                381,763        396,640
                                                   -----------    -----------
                           Total operating revenues  6,942,798      6,815,359
Operating expenses
  Purchased power                                    1,314,196      1,175,350
  Fuel                                                 542,779        581,342
  Gas purchased for resale                             448,997        373,720
  Other operations                                   1,159,359      1,137,245
  Maintenance                                          470,887        489,127
  Depreciation and amortization                        492,549        485,153(A)
  Taxes, other than federal income tax               1,158,453      1,175,673
  Federal income tax                                   369,370        387,470
                                                   -----------    -----------
                           Total operating expenses  5,956,590      5,805,080

Operating income                                       986,208      1,010,279
Other income (deductions)
  Investment income                                      8,299         16,389
  Allowance for equity funds used during construction    5,530          2,145
  Other income less miscellaneous deductions           (13,060)        (7,392)
  Federal income tax                                     2,500         (1,680)
                                                   -----------    -----------
                         Total other income              3,269          9,462
                                                   -----------    -----------

Income before interest charges                         989,477      1,019,741

Interest on long-term debt                             313,289        305,351
Other interest                                          16,551         23,039
Allowance for borrowed funds used during construction   (2,665)        (1,019)
                                                    -----------    -----------
                        Net interest charges           327,175        327,371

Net income                                             662,302        692,370
Preferred stock dividend requirements                  (18,424)       (28,422)
Gain on refunding of preferred stock                      -            13,943(A)
Net income for common stock                        $   643,878    $   677,891
                                                   ===========    ===========

Common shares outstanding - average (000)              234,997        234,956
Earnings per share                                   $    2.74      $    2.89
                                                     =========      =========
Dividends declared per share of common stock         $    2.09      $    2.06
                                                     =========      =========
Sales
  Electric (Thousands of kilowatthours)
    Con Edison customers                            36,781,964     37,557,246
    Delivery service to NYPA and others              8,674,514      8,951,651
    Service for municipal agencies                     843,657        531,578
                                                   -----------   ------------
      Total sales in service territory              46,300,135     47,040,475
    Off-system sales (B)                             3,661,056      3,987,450
  Gas (dekatherms)
    Firm                                            92,575,389     98,896,627
    Off-peak firm/interruptible                     22,600,610     18,118,759
                                                   -----------   ------------
      Total sales to Con Edison customers          115,175,999    117,015,386
    Transportation of customer-owned gas
      NYPA                                          12,141,175     12,338,432
      Others                                         6,676,727      4,880,492
    Off-system sales                                 8,917,528     10,190,997
                                                   -----------   ------------
      Total sales and transportation               142,911,429    144,425,307
  Steam (Thousands of pounds)                       27,610,425     31,279,809

(A) The gain from the preferred  stock  refunding  was offset by an  additional
    provision for depreciation.

(B) Includes  1,504,342 and 1,882,652  thousands of kWh,  respectively,
   subsequently  purchased  by the  Company  for  sale  to its customers.

The  accompanying  note  is an  integral  part  of  these  financial statements.

<PAGE>


                                           - 8 -

<TABLE>
<CAPTION>
                        CONSOLIDATED EDISON COMPANY OF NEW YORK, INC
                      CONSOLIDATED STATEMENT OF CASH FLOWS
                 FOR THE SIX MONTHS ENDED JUNE 30, 1997 AND 1996


                                                               1997           1996
                                                              (Thousands  of  Dollars)
<S>                                                         <C>            <C>
     Operating activities
      Net income                                           $ 214,167       $ 245,950
      Principal non-cash charges (credits) to income
        Depreciation and amortization                        248,684         252,546
        Deferred recoverable fuel costs                       58,292          37,486
        Federal income tax deferred                           74,360          (5,840)
        Common equity component of allowance
          for funds used during construction                  (3,225)         (1,188)
        Other non-cash charges (credits)                      13,680         (10,433)
      Changes in assets and liabilities
        Accounts receivable - customers, less
          allowance for uncollectibles                        71,231          (2,301)
        Regulatory accounts receivable                        46,263         (11,419)
        Materials and supplies, including fuel
          and gas in storage                                  42,008           8,027
        Prepayments, other receivables and
          other current assets                              (239,372)          3,364
        Enlightened Energy program costs                      12,881          14,543
        Accounts payable                                     (55,677)        (79,617)
        Accrued income taxes                                 (81,412)         22,658
        Other - net                                          (88,162)        (20,799)
                                                           ---------       ---------
          Net cash flows from operating activities           313,718         452,977
                                                           ---------       ---------

    Investing activities including construction
        Construction expenditures                           (292,308)       (313,280)
        Nuclear fuel expenditures                             (7,230)            182
        Contributions to nuclear decommissioning trust       (17,047)        (17,047)
        Common equity component of allowance
          for funds used during construction                   3,225           1,188
                                                           ---------       ---------
          Net cash flows from investing activities
            including construction                          (313,360)       (328,957)
                                                           ---------       ---------

    Financing activities including dividends
        Net proceeds from short-term debt                     15,000            -
        Issuance of long-term debt                           150,000         375,000
        Retirement of long-term debt                          (3,626)       (105,055)
        Advance refunding of long-term debt                     -            (95,329)
        Advance refunding of preferred stock                    -           (316,982)
        Issuance and refunding costs                            (410)         (8,711)
        Common stock dividends                              (246,763)       (244,369)
        Preferred stock dividends                             (9,210)        (13,497)
                                                           ---------       ---------
          Net cash flows from financing activities
            including dividends                              (95,009)       (408,943)
                                                           ---------       ---------

    Net decrease in cash and temporary
      cash investments                                       (94,651)       (284,923)

    Cash and temporary cash investments
      at January 1                                           106,882         342,292
                                                           ---------       ---------

    Cash and temporary cash investments
      at June 30                                           $  12,231       $  57,369
                                                           =========       =========

    Supplemental disclosure of cash flow information Cash paid during the period
      for:
        Interest                                           $ 151,686       $ 156,017
        Income taxes                                         126,133         131,000



The accompanying note is an integral part of these financial statements.
</TABLE>

<PAGE>



                                            - 9 -
<TABLE>
<CAPTION>


                  CONSOLIDATED EDISON COMPANY OF NEW YORK, INC.
                      CONSOLIDATED STATEMENT OF CASH FLOWS
                       FOR THE TWELVE MONTHS ENDED JUNE 30, 1997 AND 1996


                                                            1997            1996
                                                            ----            ----
                                                          (Thousands of  Dollars)
<S>                                                     <C>              <C>
Operating activities
     Net income                                         $ 662,302       $ 692,370
     Principal non-cash charges (credits) to income
       Depreciation and amortization                      492,550         485,153
       Deferred recoverable fuel costs                    (21,202)        (18,234)
       Federal income tax deferred                        120,800           3,400
       Common equity component of allowance
         for funds used during construction                (5,311)         (2,024)
       Other non-cash charges                              33,715          17,157
     Changes in assets and liabilities
       Accounts receivable - customers, less
         allowance for uncollectibles                      26,743         (79,307)
       Regulatory accounts receivable                       5,804          31,537
       Materials and supplies, including fuel
         and gas in storage                                 7,476          23,236
       Prepayments, other receivables and
         other current assets                            (237,619)        110,123
       Enlightened Energy program costs                     8,902          16,681
       Accounts payable                                    34,203          62,843
       Accrued income taxes                               (94,251)        (22,377)
       Other - net                                        (66,034)         28,431
                                                        ---------       ---------
         Net cash flows from operating activities         968,078       1,348,989
                                                        ---------       ---------

  Investing activities including construction
      Construction expenditures                          (654,261)       (703,352)
      Nuclear fuel expenditures                           (56,117)         (5,889)
      Contributions to nuclear decommissioning trust      (21,301)        (27,697)
      Common equity component of allowance
        for funds used during construction                  5,311           2,024
                                                         ---------       ---------
        Net cash flows from investing activities
         including  construction                         (726,368)       (734,914)
                                                         ---------       ---------

  Financing activities including dividends
      Net proceeds from short-term debt                    15,000            -
      Issuance of long-term debt                          300,000         603,285
      Retirement of long-term debt                        (82,095)       (111,324)
      Advance refunding of long-term debt                    -           (251,028)
      Advance refunding of preferred stock                   -           (316,982)
      Issuance and refunding costs                        (10,179)        (13,851)
      Common stock dividends                             (491,150)       (484,014)
      Preferred stock dividends                           (18,424)        (31,277)
                                                        ---------       ---------
        Net cash flows from financing activities
          including dividends                            (286,848)       (605,191)
                                                        ---------       ---------

  Net increase (decrease) in cash and temporary
    cash investments                                      (45,138)          8,884

  Cash and temporary cash investments
    at beginning of period                                 57,369          48,485

  Cash and temporary cash investments
    at June 30                                          $  12,231       $  57,369
                                                        =========       =========

Supplemental disclosure of cash flow information
  Cash paid during the period for:
      Interest                                          $ 304,948       $ 316,872
      Income taxes                                        341,888         409,907


The accompanying note is an integral part of these financial statements.
</TABLE>



<PAGE>



                                               - 10 -

Contingency Note

Indian Point. Nuclear generating units similar in design to the Company's Indian
Point 2 unit have  experienced  problems  that  have  required  steam  generator
replacement.  Inspections of the Indian Point 2 steam generators since 1976 have
revealed various problems,  some of which appear to have been arrested,  but the
remaining  service life of the steam  generators is uncertain and may be shorter
than the unit's life.  The  projected  service life of the steam  generators  is
reassessed  periodically in the light of the inspections  made during  scheduled
outages of the unit.  Based on the latest  available  data and  current  Nuclear
Regulatory  Commission  criteria,  the Company  estimates  that steam  generator
replacement  will not be required before 1999, and possibly not until some years
later. To avoid procurement  delays in the event  replacement is necessary,  the
Company purchased replacement steam generators, which are stored at the site. If
replacement of the steam  generators is required,  such replacement is presently
estimated (in 1996 dollars) to require additional  expenditures of approximately
$110  million   (exclusive  of  replacement   power  costs)  and  an  outage  of
approximately four months. However,  securing necessary permits and approvals or
other  factors could require a  substantially  longer outage if steam  generator
replacement is required on short notice.

Nuclear  Insurance.  The  insurance  policies  covering  the  Company's  nuclear
facilities for property damage,  excess property damage, and outage costs permit
assessments  under certain  conditions to cover insurers' losses. As of June 30,
1997,  the highest  amount which could be assessed for losses during the current
policy year under all of the policies was $28.1 million.  While  assessments may
also be made for losses in certain prior years,  the Company is not aware of any
losses in such years which it believes are likely to result in an assessment.

Under  certain  circumstances,  in the event of nuclear  incidents at facilities
covered  by  the  federal  government's  third-party  liability  indemnification
program, the Company could be assessed up to $79.3 million per incident of which
not more than $10  million may be  assessed  in any one year.  The  per-incident
limit is to be adjusted for inflation not later than 1998 and not less than once
every five years thereafter.

The Company  participates  in an  insurance  program  covering  liabilities  for
injuries to certain workers in the nuclear power industry.  In the event of such
injuries,  the Company is subject to  assessment  up to an estimated  maximum of
approximately $3.1 million.

Environmental Matters. The normal course of the Company's operations necessarily
involves  activities  and  substances  that  expose  the  Company  to  potential
liabilities under federal, state and local laws protecting the environment. Such
liabilities  can be material and in some instances may be imposed without regard
to fault,  or may be imposed for past acts,  even though such past acts may have
been lawful at the time they  occurred.  Sources of such  potential  liabilities
include  (but  are not  limited  to)  the  Federal  Comprehensive  Environmental
Response,   Compensation  and  Liability  Act  of  1980  ("Superfund"),  a  1994
settlement  with the New York State  Department  of  Environmental  Conservation
(DEC), asbestos, and electric and magnetic fields (EMF).


<PAGE>


                                            - 11 -

Superfund.  By its terms Superfund  imposes joint and several strict  liability,
regardless  of fault,  upon  generators  of hazardous  substances  for resulting
removal and remedial costs and environmental  damages.  The Company has received
process or notice  concerning  possible  claims under Superfund or similar state
statutes  relating  to a number of sites at which it is alleged  that  hazardous
substances  generated by the Company (and, in most instances,  a large number of
other  potentially  responsible  parties)  were  deposited.   Estimates  of  the
investigative,  removal,  remedial and  environmental  damage costs (if any) the
Company  will be obligated to pay with respect to each of these sites range from
extremely preliminary to highly refined.  Based on these estimates,  the Company
had accrued a liability at June 30, 1997 of approximately  $22.1 million.  There
will be  additional  costs with respect to these and possibly  other sites,  the
materiality of which is not presently determinable.

DEC  Settlement.  In 1994 the Company agreed to a consent order settling a civil
administrative   proceeding   instituted  by  the  DEC  alleging   environmental
violations  by the  Company.  Pursuant  to the  consent  order,  the Company has
conducted an environmental  management  systems  evaluation and is conducting an
environmental compliance audit. The Company also must implement "best management
practices" plans for certain  facilities and undertake a remediation  program at
certain sites.  At June 30, 1997, the Company had an accrued  liability of $17.2
million for these sites.  Expenditures for  environment-related  projects in the
five years 1997-2001,  including  expenditures to comply with the consent order,
are  currently  estimated  at $147  million.  There  will be  additional  costs,
including costs arising out of the compliance audit, the materiality of which is
not presently determinable.

Asbestos  Claims.  Suits have been brought in New York State and federal  courts
against  the  Company  and  many  other  defendants,   wherein  several  hundred
plaintiffs  sought large amounts of compensatory and punitive damages for deaths
and injuries allegedly caused by exposure to asbestos at various premises of the
Company.  Many of these  suits have been  disposed of without any payment by the
Company, or for immaterial  amounts.  The amounts specified in all the remaining
suits total billions of dollars but the Company  believes that these amounts are
greatly  exaggerated,  as were the  claims  already  disposed  of.  Based on the
information and relevant  circumstances known to the Company at this time, it is
the  opinion of the Company  that these  suits will not have a material  adverse
effect on the Company's financial position.

EMF.  Electric and magnetic  fields are found wherever  electricity is used. The
Company is the defendant in several suits  claiming  property  damage  resulting
from EMF. In the event that a causal relationship between EMF and adverse health
effects is established,  or independently of any such causal  determination,  in
the event of adverse  developments in related legal or public policy  doctrines,
there  could be a material  adverse  effect on the  electric  utility  industry,
including the Company.


<PAGE>


                                            - 12 -

MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
OF OPERATIONS

      The following  discussion  and analysis  relates to the interim  financial
statements  appearing  in this  report  and should be read in  conjunction  with
Management's Discussion and Analysis in Item 7 of the Company's Annual Report on
Form 10-K for the year ended December 31, 1996 (File No.  1-1217).  Reference is
made to the note to the  financial  statements  in Item 1 of this report,  which
note is incorporated herein by reference.

      This report includes forward-looking  statements,  which are statements of
future  expectation  and  not  facts.  Words  such  as  "estimates,"  "expects,"
"anticipates,"   "plans,"  and  similar  expressions  identify   forward-looking
statements.  Actual results or developments  might differ  materially from those
included  in  the   forward-looking   statements  because  of  factors  such  as
competition and industry restructuring,  changes in economic conditions, changes
in  historical  weather  patterns,  changes in laws,  regulations  or regulatory
policies,  developments  in  legal or  public  policy  doctrines,  technological
developments and other presently unknown or unforeseen factors.

LIQUIDITY AND CAPITAL RESOURCES

      Cash and temporary  cash  investments  were $12.2 million at June 30, 1997
compared with $106.9  million at December 31, 1996 and $57.4 million at June 30,
1996.  Net cash flows from operating  activities was negatively  affected by the
prepayment  in June 1997 of $226 million of New York City  property  taxes.  The
Company's cash balances also reflect, among other things, the timing and amounts
of external financing.

      In June 1997 the Company  issued $150 million of five-year  floating  rate
debentures,  the interest rate on which is reset quarterly. The proceeds of this
issue were used for the June 1997 prepayment of New York City property taxes and
for working capital purposes.

      The  Company  borrowed  from banks at various  times  during the first six
months of 1997 at prevailing  market rates.  The highest amount  outstanding was
$165 million and $15 million was outstanding at June 30, 1997.  These borrowings
have been repaid.

      Customer accounts receivable,  less allowance for uncollectible  accounts,
amounted to $472.8  million at June 30,  1997  compared  with $544.0  million at
December 31, 1996 and $499.5  million at June 30, 1996.  In terms of  equivalent
number of days of revenue outstanding,  these amounts represented 27.8, 28.6 and
27.7 days, respectively.



<PAGE>


                                            - 13 -

      The regulatory  accounts  receivable  negative  balance of $0.9 million at
June 30, 1997 is comprised of $3.2 million to be refunded to customers  pursuant
to the partial pass-through fuel adjustment clause, offset by $2.3 million to be
recovered  from  customers  under the incentive  mechanisms of the 1994 gas rate
agreement.  The  regulatory  accounts  receivable  balances of $45.4  million at
December  31, 1996 and $4.9 million at June 30, 1996  represented  amounts to be
recovered  from  customers.  Pursuant  to the  Settlement  Agreement  (discussed
below),  the  balances  at March  31,  1997  relating  to the  electric  revenue
adjustment and revenue per customer  mechanisms  (Modified ERAM) and Enlightened
Energy and customer service incentives have been eliminated. See "PSC Settlement
Agreement," below.

     The balance in accrued  taxes of ($56.7  million) at June 30, 1997 reflects
the effect on the Company's current federal income tax liability of the property
tax prepayment. The Company has accrued a related deferred tax liability.

      Interest  coverage  under the SEC formula for the 12 months ended June 30,
1997 was 3.96  times  compared  with 4.18 times for the year 1996 and 4.11 times
for the 12 months ended June 30, 1996. The decline in interest coverage reflects
a lower level of pre-tax earnings and higher interest charges.

1995 Electric Rate Agreement

      In April 1995 the New York  Public  Service  Commission  (PSC)  approved a
three-year electric rate agreement  effective April 1, 1995. See, however,  "PSC
Settlement Agreement," below.

      For details of the 1995  electric rate  agreement,  including the Modified
ERAM, see "Liquidity  and Capital  Resources - 1995 Electric Rate  Agreement" in
Management's Discussion and Analysis in Item 7 of the Company's Annual Report on
Form 10-K for the year ended December 31, 1996.

      For the  second  rate year of the 1995  electric  rate  agreement,  the 12
months ended March 31,  1997,  the  Company's  actual rate of return on electric
common equity,  excluding  incentives,  exceeded the sharing  threshold of 10.81
percent,  principally  due to  increased  productivity  and  earnings  under the
revenue per customer provisions of the Modified ERAM. Pursuant to the Settlement
Agreement,  the  balance  at March 31,  1997  that was set aside for the  future
benefit of customers has been eliminated. See "PSC Settlement Agreement," below.

PSC Settlement Agreement

      In March 1997,  the Company and the PSC staff  entered  into a  settlement
agreement (the  "Settlement  Agreement")  with respect to the PSC's  Competitive
Opportunities  proceeding.  For details concerning the Settlement Agreement, see
"Liquidity  and Capital  Resources - PSC Settlement  Agreement" in  Management's
Discussion  and Analysis in Item 7 of the  Company's  Annual Report on Form 10-K
for the year ended December 31, 1996.


<PAGE>


                                            - 14 -

      The Settlement Agreement is subject to PSC approval. The Company is unable
to predict  whether the PSC will  approve the  Settlement  Agreement  or whether
there will be changes to the Settlement  Agreement.  The Chairman of the PSC has
indicated that it is anticipated that the Settlement  Agreement will come to the
PSC for consideration in August or September.

      The  Settlement  Agreement  includes a rate plan for the five-year  period
beginning  April 1, 1997 which  supersedes  the  provisions of the 1995 electric
rate  agreement  applicable  to the  12-month  period  beginning  April 1, l997.
Consistent  with  a  PSC  order,  the  material  provisions  of  the  Settlement
Agreement's rate plan (including the rate reductions) have been given effect for
financial statement  purposes,  effective April 1, 1997, subject to PSC approval
of  the  Settlement  Agreement.   The  Settlement  Agreement  provides  for  the
elimination  of the  Modified  ERAM,  Enlightened  Energy and  customer  service
incentives,  earnings sharing and reconciliation provisions of the 1995 electric
rate agreement and reversal of related, accumulated debit and credit balances in
the Company's financial  statements.  There was no material effect on net income
from the reversal of these balances.

      In June 1997, a PSC  administrative law judge (ALJ) issued her recommended
decision on the  Settlement  Agreement.  The ALJ concluded  that the  Settlement
Agreement "represents an extraordinary step toward resolution of complicated and
contentious  issues  involving rates and  competition  ... however,  it does not
allow  competition  for generation and energy services to commence in a way that
is fair to competitors or in the best interests of Con Edison's  customers." The
recommended decision identified certain concerns,  as to which "parties would be
well advised to attempt to devise a  resolution...  since the alternative is for
the  Commission  to impose its  determination."  Among the concerns are: (1) the
differences in rate  reductions  among  industrial,  commercial and  residential
customers  should be reduced (but the ALJ supported the total amount of the rate
reductions,  the implied rate of return on equity and the stranded cost recovery
provisions);  (2) Con  Edison's  delivery  rates  for  retail  access  customers
appeared  to be  excessive  because  the  amount  to be  deducted  from the rate
applicable to full-service customers may be too low; (3) the period within which
Con  Edison  must  submit  a  detailed  divestiture  plan to the PSC  should  be
shortened  to three  months,  following  the PSC's  approval  of the  Settlement
Agreement;  and (4) there has not been the  opportunity to address the impact on
the  settlement  agreement of a recent PSC decision  promoting  competition at a
future date in the provision of metering  services and future PSC decisions with
respect to billing and information services.


<PAGE>


                                            - 15 -

      In July 1997,  the  Emerging  Issues  Task Force  (EITF) of the  Financial
Accounting  Standards Board reached a consensus that utilities  subject to plans
that, like the Settlement Agreement, use a transition period to recover stranded
costs must  discontinue the use of Statement of Financial  Accounting  Standards
(SFAS) No. 71,  "Accounting for the Effects of Certain Types of Regulation," for
the separable  portion of their businesses that are being  deregulated and apply
the  standards  in  SFAS  No.  101,  "Regulated  Enterprises-Accounting  for the
Discontinuation  of  Application  of FASB  Statement  No. 71." The consensus was
published  on  August  12,  1997 and is still  being  reviewed  by the  Company.
Accordingly,  the  Company  is  unable  to  determine  the  extent  to which the
Settlement  Agreement will adversely affect its eligibility to continue to apply
SFAS No. 71. However,  assuming the PSC approves the Settlement  Agreement,  the
Company does not expect that  discontinuation  of SFAS No. 71 for the  separable
portion of its business that is being  deregulated  will have a material adverse
effect on the Company's financial position.

      The Company  understands  that the Office of the Chief  Accountant  of the
Securities  and  Exchange  Commission  has also  been  considering  the need for
utilities to discontinue use of SFAS No. 71 for portions of their businesses.

Gas and Steam Rate Agreements

      For details of the Company's gas rate  agreements  and the Company's  1994
steam rate agreement,  see "Liquidity and Capital Resources - Gas and Steam Rate
Agreements" in  Management's  Discussion and Analysis in Item 7 of the Company's
Annual Report on Form 10-K for the year ended December 31, 1996.

      In June 1997, the Company and the PSC staff signed a steam rate agreement.
The  three-year  agreement  provides  for  a $16  million  base  rate  increase,
effective  October 1, 1997,  and that rates for the remainder of the term of the
agreement  will not be  increased  or  decreased  except in certain  limited and
extraordinary  circumstances.  With respect to $10.8 million eligible for future
recovery under the 1994 steam rate  agreement,  $4.6 million will continue to be
deferred until amortized against earnings in excess of a rate of return on steam
common equity of 11.1 percent over the three-year period. Any earnings in excess
of a 12.6 percent rate of return over the three-year  period will be shared:  50
percent to be retained by shareholders and 50 percent to be set aside for future
refund to customers.

Competition and Industry Restructuring

      In recent years federal and New York State  initiatives  have promoted the
development of competition in the sale of electricity  and gas. For  information
about these initiatives,  see "Liquidity and Capital Resources - Competition and
Industry Restructuring" in Management's Discussion and Analysis in Item 7 of the
Company's Annual Report on Form 10-K for the year ended December 31, 1996.



<PAGE>


                                            - 16 -

New Air Quality Standards

      In July 1997,  the United  States  Environmental  Protection  Agency (EPA)
adopted new ambient air quality standards for ozone and particulate  matter. The
New York State  Department  of  Environmental  Conservation  will be required to
develop an  implementation  plan  acceptable  to the EPA to attain and  maintain
these standards.  The Company does not expect that compliance with the new ozone
standard  will  require  additional  capital   expenditures  in  excess  of  the
approximately $150 million of capital expenditures  estimated to be required for
compliance  with the Clean  Air Act  amendments  of 1990.  (See  "Liquidity  and
Capital  Resources - Clean Air Act Amendments " in  Management's  Discussion and
Analysis  in Item 7 of the  Company's  Annual  Report  on Form 10-K for the year
ended December 31, 1996.) With respect to the new particulate  matter  standard,
the  Company  expects  that  compliance  could  require  a  material  amount  of
additional capital expenditures.

Environmental Claims and Other Contingencies

      Reference is made to the note to the financial statements included in this
report for information  concerning potential  liabilities of the Company arising
from  the  Federal  Comprehensive   Environmental  Response,   Compensation  and
Liability Act of 1980  (Superfund),  from claims relating to alleged exposure to
asbestos, and from certain other contingencies to which the Company is subject.


<PAGE>


                                            - 17 -

RESULTS OF OPERATIONS

      Net  income for common  stock for the  second  quarter,  six months and 12
months ended June 30, 1997 was lower than in the  corresponding  1996 periods by
$23.9  million ($.10 a share),  $44.3 million ($.19 a share),  and $34.0 million
($.15 a share), respectively,  due primarily to weather-related sales variations
and the agreements covering the Company's electric rates.

      The impact of weather on the Company's  earnings  depends on the Company's
rate  agreements.  The  Modified  ERAM under the 1995  electric  rate  agreement
removed from the  Company's  earnings  the impact of  variations  in  forecasted
electric  sales due to weather.  The Modified ERAM was  eliminated for financial
statement  purposes  effective  April 1, 1997. See "PSC  Settlement  Agreement,"
above.  Most  weather-related  variations  in gas sales do not affect  earnings,
while weather-related variations in steam sales do affect earnings.

<TABLE>
<CAPTION>


                                                                       Increases (Decreases)
                                                Three Months Ended  Six Months Ended  Twelve Months Ended
                                                   June 30, 1997     June 30, 1997     June 30, 1997
                                                   Compared With    Compared With      Compared with
                                                Three Months Ended  Six Months Ended  Twelve Months Ended
                                                   June 30, 1996    June 30, 1996     June 30, 1996
                                               Amount     Percent  Amount  Percent   Amount   Percent

                                                                (Amounts in Millions)
<S>                                        <C>           <C>   <C>       <C>     <C>         <C>

Operating revenues                         $   (35.7)    (2.3)% $ (16.9)  (0.5)% $   127.4     1.9 %
Purchased power ( electric & steam)             (7.4)    (2.3)     41.4    6.6       138.8    11.8
Fuel - electric and steam                        2.0      1.7     (30.5) (10.0)      (38.6)   (6.6)
Gas purchased for resale                       (11.1)   (11.5)     30.7   11.1        75.3    20.1

Operating revenues less
    purchased power  and fuel
    and gas purchased for resale
    (Net revenues)                             (19.2)    (1.9)   (58.5)  (2.7)      (48.1)    (1.0)
Other operations and maintenance                19.6      4.8      8.3    1.0         3.9      0.2
Depreciation and amortization                    5.0      4.1     (3.9)  (1.5)        7.4      1.5
Taxes, other than federal
    income tax                                  (6.7)    (2.4)    (7.7)  (1.3)      (17.2)    (1.5)
Federal income tax                             (14.9)   (36.4)   (27.8) (19.0)      (18.1)    (4.7)
Operating income                               (22.2)   (14.6)   (27.4)  (6.8)      (24.1)    (2.4)
Other income less deductions
    and related federal income tax              (1.3)   Large     (0.7)  (54.3)      (6.2)   (65.5)
Interest charges                                 0.4     0.4       3.7     2.3       (0.2)    (0.1)
Net income                                     (23.9)  (33.4)    (31.8)  (12.9)     (30.1)    (4.3)
Preferred stock dividend
    requirements                               --        --        1.4    13.5       10.0     35.2
Gain on refunding of preferred stock           --        --      (13.9)   Large     (13.9)   Large

Net income for common stock               $   (23.9)  (35.7)%  $ (44.3)  (17.8)% $  (34.0)   (5.0)%
                                                                                                             
</TABLE>


<PAGE>


                                            - 18 -

Second Quarter 1997
Compared with
Second Quarter 1996

      Net  revenues  (operating  revenues  less  purchased  power,  fuel and gas
purchased  for resale)  decreased  $19.2  million in the second  quarter of 1997
compared with the 1996 period.  Electric and steam net revenues  decreased $14.4
million and $5.8 million, respectively. Gas net revenues increased $1.0 million.

      Electric  net  revenues  in the 1997  period  were  lower than in the 1996
period   primarily   because  of   weather-related   sales   decreases  and  the
implementation  of the  Settlement  Agreement for financial  statement  purposes
effective April 1, 1997. See "PSC  Settlement  Agreement,"  above.  Electric net
revenues for the second quarter of 1996 included $13.4 million under the revenue
per  customer  provisions  of the Modified  ERAM.  Electric net revenues for the
second quarter of 1997 include $.1 million,  compared with $14.6 million for the
1996 period, for the net impact of regulatory incentive provisions.

      Electric  net  revenues  for the  second  quarter of 1997  included  $22.5
million,  compared  with a reduction  in  revenues  of $6.8  million in the 1996
period, relating to the refueling and maintenance outage at the Company's Indian
Point 2 nuclear  generating  station (Indian Point 2) that was completed in July
1997.  This  increase did not affect net income  because,  under the  accounting
provisions  of  the  agreements  covering  the  Company's  electric  rates  (PSC
Refueling  Accounting),  amounts  collected  from  customers  for the  estimated
expenses of such outages are deferred and are recognized  during the outage when
the actual expenses for the outage are incurred.

      Gas net  revenues in the 1997 period  reflect  increased  retention of net
revenues from  interruptible  sales in accordance with the gas rate  agreement.s
Steam net revenues in the 1997 period reflect  weather-related  sales decreases,
offset in part by a rate increase effective October 1996.

      Electric sales,  excluding off-system sales, in the second quarter of 1997
compared with the 1996 period were:


                                                Millions of Kwhrs
                                  2nd Quarter  2nd Quarter           Percent
Description                            1997     1996      Variation  Variation
Residential/Religious                 2,308     2,379        (71)    (3.0)%
Commercial/Industrial                 5,833     5,941       (108)    (1.8)%
Other                                   140       142         (2)    (1.4)%
Total Con Edison Customers            8,281     8,462       (181)    (2.1)%

NYPA, Municipal Agency
 and Other Sales                     2,326     2,249          77      3.4 %

Total Service Area                  10,607    10,711       (104)     (1.0)%



<PAGE>


                                            - 19 -

      For the  second  quarter  of 1997,  firm gas sales  volume  decreased  3.0
percent and steam sales volume  decreased  12.1 percent  compared  with the 1996
period.

      The decreases in electric, gas and steam sales volumes for the 1997 period
were due primarily to cooler than normal 1997 spring weather. The second quarter
of 1997 was  approximately  22 percent  cooler than  normal on a cooling  degree
basis. After adjusting for variations,  primarily in weather and billing days in
each period,  electric sales volume in the Company's service territory increased
1.7 percent in the second quarter of 1997,  firm gas sales volume  decreased 0.1
percent and steam sales volume decreased 0.6 percent.

      Electric fuel costs  increased  $11.6 million in the 1997 period due to an
increase in the unit cost of fuel,  partially offset by lower sendout.  Electric
purchased  power costs  decreased in the second quarter of 1997 by $13.1 million
from the 1996  period  due to  lower  purchased  volumes  and  unit  costs.  The
variations in fuel and purchased  power costs also reflect the  availability  of
Indian Point 2, which was out of service for a refueling and maintenance  outage
for part of the 1997 period but was operating during the 1996 period. Steam fuel
costs  decreased  $9.6  million  due to  decreased  generation  of  steam by the
Company.  Steam purchased power costs were $5.7 million in the 1997 period;  the
Company did not purchase  steam in the 1996  period.  Gas  purchased  for resale
decreased $11.1 million reflecting a lower unit cost of purchased gas, partially
offset by higher sendout.

      Other operations and maintenance  expenses increased $19.6 million for the
second quarter of 1997 compared with the 1996 period,  due primarily to expenses
related to the Indian Point refueling and  maintenance  outage (a like amount of
deferred  revenues were recognized  under PSC Refueling  Accounting),  partially
offset by lower administrative and general expenses.

      Depreciation and amortization increased $5.0 million in the second quarter
of 1997 due principally to higher plant balances.

      Taxes,   other  than  federal  income  tax,  decreased  $6.7  million  due
principally to lower revenue taxes.

      Federal  income tax  decreased  $14.9  million for the quarter  reflecting
lower pre-tax income.

     Other income less miscellaneous deductions for the 1997 period reflects the
start-up and business development expenses of the Company's ProMark Energy, Inc.
and Gramercy Development, Inc. subsidiaries (the "Subsidiaries").

<PAGE>


                                            - 20 -

Six Months Ended June 30, 1997
Compared with
Six Months Ended June 30, 1996

      Net  revenues  decreased  $58.5  million  in the first six  months of 1997
compared  with the first six  months of 1996.  Electric  and steam net  revenues
decreased  $49.2 million and $16.7 million,  respectively,  and gas net revenues
increased $7.4 million.

      Electric  net  revenues  in  the  1997  period  were  lower  than  in  the
corresponding  1996 period due primarily to weather-related  sales decreases,  a
lower  allowed   return  on  common  equity  and  a  lower  level  of  incentive
opportunities  under the 1995 electric rate agreement and the  implementation of
the Settlement  Agreement for financial  statement  purposes  effective April 1,
1997. See "PSC Settlement Agreement," above. Electric net revenues for the first
six months of 1997 included  $14.0 million under the Modified ERAM compared with
$20.3  million for the 1996  period.  Electric  net  revenues  for the first six
months of 1997 also  include $1.0 million  compared  with $24.9  million for the
1996 period for the net impact of regulatory incentive provisions.

      Electric net revenues for the 1997 period included $20.6 million, compared
with a reduction in revenues of $6.8 million in the 1996 period,  because of the
recognition  of deferred  revenues  relating to the Indian Point 2 refueling and
maintenance  outage.  This  increase  did not affect  net income  because of PSC
Refueling Accounting.

      Gas net  revenues in the 1997 period  reflect  increased  retention of net
revenues from  interruptible  sales in accordance with the gas rate  agreements.
Steam net revenues in the 1997 period reflect  weather-related  sales decreases,
offset in part by a rate increase effective October 1996.

      Electric  sales,  excluding  off-system  sales, in the first six months of
1997 compared with the 1996 period were:


                                           Millions of Kwhrs 
                          Six Months       Six Months 
                             Ended          Ended                    Percent
   Description           June 30, 1997  June 30, 1996   Variation  Variation
                                                                               

Residential/Religious        4,949         5,088            (139)       (2.7)%
Commercial/Industrial       11,976        12,252            (276)       (2.3)%
Other                          288           295              (7)       (2.4)%

Total Con Edison Customers  17,213        17,635            (422)       (2.4)%

NYPA Municipal Agency
 and Other Sales             4,761         4,677              84         1.8 %

Total Service Area          21,974        22,312            (338)       (1.5)%



<PAGE>


                                            - 21 -

      For the first six  months of 1997  firm gas  sales  volume  decreased  9.5
percent and steam sales volume decreased 13.8 percent from the 1996 period.

      The decreases in electric, gas and steam sales volumes for the 1997 period
were due primarily to milder than normal 1997 winter  weather  compared with the
colder than normal  1996 winter  weather,  and to cooler than normal 1997 spring
weather.  After adjusting for variations,  primarily weather and billing days in
each period,  electric  sales volume in the Company's  service  territory in the
first six months of 1997  increased 1.2 percent.  Similarly  adjusted,  firm gas
sales volume decreased 0.3 percent and steam sales volume increased 0.1 percent.

      Electric  fuel costs  decreased  $8.0  million  in the 1997  period due to
decreased  generation of electricity by the Company  partially  offset by higher
unit cost of fuel.  Electric  purchased power costs increased $23.9 million over
the 1996 period due to a higher volume of purchases.  The variations in fuel and
purchased power costs also reflect the availability of Indian Point 2, which was
out of service for parts of the 1997 period but was operating during most of the
1996 period.  Steam fuel costs  decreased  $22.5  million due to lower  sendout.
Steam purchased  power costs were $17.5 million in the 1997 period;  the Company
did not purchase  steam in the 1996 period.  Gas purchased for resale  increased
$30.7 million reflecting a higher unit cost, partially offset by lower sendout.

      Other  operations and maintenance  expenses  increased $8.3 million in the
first six months of 1997 compared with the 1996 period due primarily to expenses
related to the Indian Point 2 refueling and maintenance outage (a like amount of
deferred  revenues were recognized  under PSC Refueling  Accounting),  partially
offset by lower administrative and general expenses.

       Depreciation and amortization  decreased $3.9 million in the 1997 period;
an additional  provision for depreciation  expense of $13.9 million was recorded
in the 1996 period to offset a gain on refunding of preferred stock.

      Taxes,  other than federal income tax, decreased $7.7 million in the first
six months of 1997  compared  with the 1996 period due  primarily  to  decreased
revenue taxes.

     Federal income tax decreased $27.8 million in the 1997 period compared with
the 1996 period, reflecting lower pre-tax income.

      Other income less  miscellaneous  deductions for the 1997 period  reflects
the start-up and business development expenses of the Subsidiaries.


<PAGE>


                                            - 22 -

Twelve Months Ended June 30, 1997
Compared with
Twelve Months Ended June 30, 1996

      Net revenues  decreased $48.1 million in the 12 months ended June 30, 1997
compared with the 1996 period.  Electric and steam net revenues  decreased $53.7
million  and $19.7  million,  respectively.  Gas net  revenues  increased  $25.3
million.

      Electric  net  revenues  in  the  1997  period  were  lower  than  in  the
corresponding  1996 period due  primarily  to a lower  allowed  return on common
equity under the 1995 electric rate agreement,  weather-related sales variations
and the  implementation  of the  Settlement  Agreement for  financial  statement
purposes  effective  April 1,  l997.  See  "PSC  Settlement  Agreement,"  above.
Electric  net  revenues  for the 12 months  ended June 30, 1997  included  $53.4
million  under the  Modified  ERAM,  compared  with $33.5  million  for the 1996
period.  Electric  net  revenues  for the 12 months  ended June 30, 1997 include
$31.3 million for incentives, compared with $47.7 million for the 1996 period.

      Gas net revenues in the 1997 period  reflect the retention of net revenues
from  interruptible  sales in accordance with the gas rate  agreements.  Gas net
revenues  for the 1997 and 1996 periods  include $9.2 million and $2.7  million,
respectively,  for incentives earned under the 1994 gas rate agreement,  related
to the  achievement of gas system  improvement  targets and to customer  service
performance. Steam net revenues in the 1997 period reflect weather-related sales
decreases, offset in part by a rate increase in October 1996.

     Electric sales,  excluding  off-system  sales, for the 12 months ended June
30, 1997 compared with the 12 months ended June 30, 1996 were:

                                      Millions of Kwhrs.
                             Twelve  Months  Twelve Months 
                               Ended          Ended                    Percent
    Description             June 30, 1997   June 30, 1996 Variation   Variation


Residential/Religious        10,728          11,108        (380)      (3.4)%
Commercial/Industrial        25,450          25,824        (374)      (1.4)%
Other                           604             625         (21)      (3.4)%

Total Con Edison Customers   36,782          37,557        (775)      (2.1)%

NYPA, Municipal Agency
 and Other Sales              9,518           9,483          35          .4%

Total Service Area           46,300          47,040        (740)      (1.6)%

      For the 12 months ended June 30, 1997, firm gas sales volume decreased 6.4
percent and steam sales volume  decreased  11.7 percent  compared  with the 1996
period.


<PAGE>


                                            - 23 -

      The decreases in electric, gas and steam sales volumes for the 1997 period
were due  primarily  to milder than normal 1997  winter  weather  compared  with
colder  than  normal  1996  winter  weather  and cooler  than normal 1997 spring
weather. After adjustment for variations, primarily weather and billing days, in
each period,  electric sales volume in the Company's service territory in the 12
months ended June 30, 1997 increased 0.8 percent.  Similarly adjusted,  firm gas
sales volume decreased 0.7 percent and steam sales volume decreased 1.1 percent.

      Electric  fuel costs  decreased  $22.0  million in the 1997  period due to
decreased  generation of electricity by the Company partially offset by a higher
unit cost of fuel.  Electric  purchased power costs increased in the 1997 period
by $117.5 million over the 1996 period,  reflecting  increased purchased volumes
and unit costs.  During the 1997 period, the Company purchased 62 percent of its
electric energy  requirements  compared with 56 percent for the 1996 period. The
variations in electric  fuel and  purchased  power costs also reflect the higher
availability of Indian Point 2 in the 1996 period than in the 1997 period. Steam
fuel costs decreased  $16.6 million due to decreased  generation of steam by the
Company  partially  offset by a higher unit cost of fuel.  Steam purchased power
costs were $21.3 million in the 1997 period;  the Company did not purchase steam
in the 1996 period. Gas purchased for resale increased $75.3 million, reflecting
a higher unit cost of fuel partially offset by lower sendout.

      Depreciation  and  amortization  increased $7.4 million in the 1997 period
due principally to higher plant balances. The 1996 period included an additional
provision  for  depreciation  expense  of  $13.9  million  to  offset  a gain on
refunding of preferred stock.

      Taxes,  other than federal income tax,  decreased  $17.2 million in the 12
months ended June 30, 1997 compared with the 1996 period,  reflecting  primarily
decreased revenue taxes.

     Federal income tax decreased $18.1 million in the 1997 period compared with
the 1996 period, reflecting lower pre-tax income.

     Investment  income  decreased $8.1 million in the 1997 period due primarily
to lower investment balances.

     Other income less miscellaneous deductions for the 1997 period reflects the
start-up and business development expenses of the Subsidiaries.

      Interest on  long-term  debt for the  12-month  period ended June 30, 1997
increased $7.9 million principally as a result of new debt issues, including the
issuance of subordinated  debentures to refund preferred  stock.  Other interest
decreased $6.5 million,  principally  as a result of lower  interest  associated
with certain tax settlements.


<PAGE>


                                            - 24 -

PART II.    OTHER INFORMATION


ITEM 1.     LEGAL PROCEEDINGS

TOXIC SUBSTANCES CONTROL ACT

      Reference is made to the information  under the caption "TOXIC  SUBSTANCES
CONTROL ACT" in Part I, Item 3, Legal Proceedings in the Company's Annual Report
on Form 10-K for the year ended December 31, 1996.

     In May 1997, the court denied the Company's motion to dismiss the remaining
claim in the suit entitled BCF Oil Refining, Inc. v. Consolidated Edison Company
of New York, Inc., et. al.

RATE PROCEEDINGS

      Reference is made to (i) the  information  under the captions  "REGULATION
AND RATES" in Part I, Item 1, Business,  "RATE  PROCEEDINGS"  in Part I, Item 3,
Legal  Proceedings  and  "LIQUIDITY  AND  CAPITAL  RESOURCES -  Competition  and
Industry  Restructuring,  1992  Electric  Rate  Agreement,  1995  Electric  Rate
Agreement,  PSC Settlement Agreement, and Gas and Steam Rate Agreements" in Part
I, Item 7,  Management's  Discussion and Analysis in the Company's Annual Report
on Form 10-K for the year ended  December  31,  1996;  and (ii) the  information
under the  captions  "LIQUIDITY  AND  CAPITAL  RESOURCES  - 1995  Electric  Rate
Agreement,  PSC Settlement Agreement, and Gas and Steam Rate Agreements" in Part
I, Item 2, Management's Discussion and Analysis in this Quarterly Report on Form
10-Q for the quarterly period ended June 30, 1997.

     In August 1997, the United States District Court for the Southern  District
of New York dismissed the suit against the Company entitled  Brownsville Baptist
Church, et. al. v. Consolidated Edison Company of New York, Inc.


ITEM 4.     SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS

(a) At the Annual Meeting of  Stockholders  of the Company held on May 19, 1997,
the  stockholders  of the Company voted to elect  management's  nominees for the
Board of  Trustees,  to ratify and  approve  the  appointment  of the  Company's
independent accountants, and not to adopt two stockholder proposals.


<PAGE>


                                            - 25 -

(b) The name of each  nominee for election and the number of shares voted for or
with respect to which authority to vote for was withheld are as follows:

                                     For              Withheld
     E. Virgil Conway            179,050,318         3,220,764
     Gordon J. Davis             179,108,047         3,163,035
     Ruth M. Davis               177,602.087         4,668,995
     Joan S. Freilich            179,189,657         3,081,425
     Ellen V. Futter             179,112,509         3,158,573
     Arthur Hauspurg             177,572,372         4,698,710
     Sally Hernandez-Pinero      179,120,737         3,150,345
     Peter W. Likins             179,207,379         3,063,703
     Eugene R. McGrath           179,163,242         3,107,840
     Donald K. Ross              178,785,176         3,485,906
     Robert G. Schwartz          179,026,093         3,244,989
     Richard A. Voell            179,248,546         3,022,536
     Stephen R. Volk             179,177,580         3,093,502

(c)  The  results  of the  vote  on  the  appointment  of  Price  Waterhouse  as
independent  accountants  for the Company for 1997 were as follows:  179,591,532
shares were voted for this  proposal;  1,128,721  shares were voted  against the
proposal; and 1,550,829 shares were abstentions.

(d) The  following  stockholder-proposed  resolution  was voted upon at the
Annual Meeting:

      "RESOLVED:  That the  stockholders of  Consolidated  Edison Company of New
      York,  Inc.,  assembled in annual  meeting in person and by proxy,  hereby
      request the Board of Directors to take the steps  necessary to provide for
      cumulative  voting  in  the  election  of  directors,   which  means  each
      stockholder  shall be  entitled to as many votes as shall equal the number
      of shares he or she owns  multiplied  by the  number  of  directors  to be
      elected,  and he or she may cast all of such votes for a single candidate,
      or any two or more of them as he or she may see fit."

The results of the vote on this proposal were as follows: 47,363,551 shares were
voted for this  proposal;  95,886,584  shares were voted  against the  proposal;
6,058,700 shares were abstentions; and 32,962,247 shares were broker nonvotes.



<PAGE>


                                            - 26 -

 (e) The  following  stockholder-proposed  resolution  was voted upon at the
 Annual Meeting:

      "RESOLVED:  That  the  shareholders  recommend  that  the  Board  take the
      necessary step that Con Edison specifically identify by name and corporate
      title  in all  future  proxy  statements  those  executive  officers,  not
      otherwise  so  identified,  who are  contractually  entitled to receive in
      excess of $100,000  annually as base salary,  together with whatever other
      additional compensation bonuses and other cash payments were due them."

The results of the vote on this proposal were as follows: 17,330,744 shares were
voted for this  proposal;  126,326,374  shares were voted  against the proposal;
5,651,718 shares were abstentions; and 32,962,246 shares were broker nonvotes.


ITEM 6.     EXHIBITS AND REPORTS ON FORM 8-K

(a)   EXHIBITS

Exhibit  4  Form of the  Company's  Floating Rate  Debentures,  Series 1997 A.
            (Incorporated  by  reference to Exhibit 4 to the  Company's  Current
            Report on Form 8-K, dated June 17, 1997, in Commission File No.
            1-1217.)

Exhibit  10 Amendment, dated July 22, 1997, to Employment Contract, dated May
            22, 1990, between the Company and Eugene R. McGrath.

Exhibit  12 Statement of  computation  of ratio of earnings to fixed  charges
            for the twelve-month periods ended June 30, 1997 and 1996.

Exhibit  27 Financial Data Schedule.  (To the extent  provided in Rule 402 of
            Regulation  S-T,  this  exhibit  shall  not be  deemed  "filed",  or
            otherwise   subject  to   liabilities,   or  be  deemed  part  of  a
            registration statement.)

(b)   REPORTS ON FORM 8-K

      The  Company  filed a Current  Report on Form 8-K,  dated  June 17,  1997,
reporting (under Item 5) certain information about the PSC Settlement  Agreement
(discussed  in  Part I,  Item 2 of this  report)  and the  sale of $150  million
aggregate  principal amount of its Floating Rate Debentures,  Series 1997 A. The
Company filed no other Current Reports on Form 8-K during the quarter ended June
30, 1997.



<PAGE>


                                            - 27 -


                                   SIGNATURES




Pursuant  to the  requirements  of the  Securities  Exchange  Act of  1934,  the
Registrant  has duly  caused  this  report  to be  signed  on its  behalf by the
undersigned thereunto duly authorized.



                           CONSOLIDATED EDISON COMPANY
                                OF NEW YORK, INC.


DATE:       August 13, 1997         By:   Joan S. Freilich
                                          Joan S. Freilich
                                          Senior Vice President,
                                          Chief Financial Officer and
                                          Duly Authorized Officer


DATE:       August 13, 1997         By:   John F. Cioffi
                                          John F. Cioffi
                                          Vice President, Controller and
                                          Chief Accounting Officer





<PAGE>



                                INDEX TO EXHIBITS


                                                          SEQUENTIAL PAGE
EXHIBIT                                                   NUMBER AT WHICH
  NO.       DESCRIPTION                                   EXHIBIT BEGINS

4.          Form of the Company's Floating Rate Debentures,
            Series 1997 A. (Incorporated by reference
            to Exhibit 4 to the Company's Current
            Report on Form 8-K, dated June 17, 1997, in
            Commission File No. 1-1217.)

10.         Amendment, dated July 22, 1997, to Employment
            Contract, dated May 22, 1990, between the
            Company and Eugene R. McGrath.

12.         Statement of computation of ratio of earnings to
            fixed charges for the twelve-month periods ended
            June 30, 1997 and 1996.

27.         Financial Data Schedule.  (To the extent provided
            in Rule 402 of Regulation S-T, this exhibit shall
            not be deemed "filed", or otherwise subject to
            liabilities, or be deemed part of a registration statement.)