Summary
This 8-K filing by Duke Energy Corporation (DUK) on April 30, 2012, primarily concerns a settlement agreement reached by its subsidiary, Duke Energy Indiana, Inc., regarding the Edwardsport clean coal gasification plant project. The agreement, subject to Indiana Utility Regulatory Commission approval, caps the costs to be reflected in customer rates at $2.595 billion, including estimated financing costs through June 30, 2012. This settlement addresses cost increases associated with the project. As a direct consequence of this settlement, Duke Energy and its subsidiary will record an approximate $420 million pre-tax charge to earnings in the first quarter of 2012. This charge is designated as a special item and will be excluded from the calculation of Duke Energy's adjusted diluted earnings per share, providing investors with a clearer view of ongoing operational performance.
Key Highlights
- 1Duke Energy Indiana, Inc. reached a settlement agreement on the cost increases for the Edwardsport clean coal gasification plant.
- 2The settlement caps costs recoverable in customer rates at $2.595 billion, including estimated financing costs up to June 30, 2012.
- 3Duke Energy Indiana agrees not to request a retail electric base rate increase before March 2013, with new rates potentially effective April 1, 2014.
- 4The agreement is contingent upon approval from the Indiana Utility Regulatory Commission.
- 5Duke Energy Corporation and Duke Energy Indiana will recognize an approximate $420 million pre-tax charge in Q1 2012 due to the settlement.
- 6This pre-tax charge will be treated as a special item and excluded from adjusted diluted earnings per share.