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).