Summary
Duke Energy Corporation, through its subsidiary Duke Energy Progress, LLC (DEP), announced a preliminary partial settlement on November 20, 2017, with the Public Staff of the North Carolina Utilities Commission (NCUC) regarding its June 1, 2017 rate case filing. This settlement addresses several key components of the rate case, aiming to streamline the regulatory process. Investors should note that while a significant portion of the rate case issues appear to be nearing resolution, specific areas like coal ash basin deferred costs and storm costs remain subjects of negotiation. The preliminary settlement includes an agreed-upon return on equity (ROE) of 9.9% and a capital structure of 52% equity and 48% debt. This provides clarity on a crucial element for future earnings and shareholder returns. However, the exclusion of coal ash and storm cost recovery and amortization periods from this partial settlement indicates these will be subject to further deliberation and potential evidentiary hearings, which could impact future operating expenses and regulatory outcomes for DEP.
Key Highlights
- 1Duke Energy Progress, LLC (DEP) reached a preliminary partial settlement with the North Carolina Utilities Commission Public Staff.
- 2The settlement pertains to DEP's June 1, 2017 rate case filing in North Carolina.
- 3Key terms agreed upon include a 9.9% return on equity (ROE).
- 4The agreed-upon capital structure consists of 52% equity and 48% debt.
- 5Issues not yet settled include recovery and amortization periods for coal ash basin deferred costs and ongoing coal ash costs.
- 6Recovery and amortization periods for deferred storm costs are also unresolved.
- 7A final, definitive partial settlement agreement is expected before the evidentiary hearing scheduled for November 27, 2017, subject to NCUC approval.