8-KRegulation FD

Duke Energy CORP 8-K Report, Regulation FD Disclosure (Feb 26, 2013)

Filed February 26, 2013For Securities:DUKDUKBDUK-PA

Summary

This 8-K filing from Duke Energy Corporation (DUK) on February 26, 2013, relates to a settlement in principle for a rate case involving its subsidiary, Carolina Power & Light Company d/b/a Progress Energy Carolinas, Inc. The settlement, reached with the North Carolina Public Staff, outlines a two-year stepped rate increase totaling approximately $182.8 million in additional annual rates. Key terms include a 4.7% rate increase in the first year, amounting to about $151.4 million, and an additional 1.0% increase in the second year ($31.4 million). This second-year increase is contingent on Progress Energy Carolinas delaying the collection of construction work in progress costs for the Sutton natural gas plant. The settlement is based on a 10.2% Return on Equity (ROE) and a 53% equity component in the capital structure. Additionally, the company will convert $20 million of a regulatory liability to benefit low-income customers and job training programs in North Carolina. The agreement is subject to final approval by the North Carolina Utilities Commission (NCUC).

Key Highlights

  • 1Progress Energy Carolinas and North Carolina Public Staff reached a settlement in principle for a rate case.
  • 2The settlement includes a two-year stepped increase in rates, totaling approximately $182.8 million in additional annual revenue.
  • 3Year one rate increase is approximately $151.4 million (4.7% average), and year two is an additional $31.4 million (1.0% average).
  • 4The second-year rate increase is tied to delaying the collection of construction work in progress for the Sutton natural gas plant.
  • 5The settlement is based on an agreed-upon Return on Equity (ROE) of 10.2% and a 53% equity component in the capital structure.
  • 6Duke Energy will convert $20 million of a regulatory liability to support low-income customers and job training in North Carolina.
  • 7The settlement is subject to review and approval by the North Carolina Utilities Commission (NCUC).

Frequently Asked Questions

This 8-K filing announces a settlement in principle reached between Duke Energy's subsidiary, Progress Energy Carolinas, and the North Carolina Public Staff regarding a rate case. It outlines the agreed-upon terms for future rate increases for Progress Energy Carolinas' North Carolina retail customers.

The settlement outlines a two-year stepped rate increase. In the first year, rates are expected to increase by approximately $151.4 million (4.7% average), and in the second year, by an additional $31.4 million (1.0% average), bringing the total potential increase over two years to approximately $182.8 million.

The settlement is based on an agreed-upon Return on Equity (ROE) of 10.2% and a capital structure with a 53% equity component. These are critical metrics that influence the allowed profitability for the utility.

Yes, the settlement is subject to review and final approval by the North Carolina Utilities Commission (NCUC). Additionally, the parties did not reach an agreement on the appropriate cost-of-service allocation methodology or the proposed Industrial Economic Rider, which may be subjects of further discussion or commission determination.