Summary
Duke Energy Carolinas (DEC), a subsidiary of Duke Energy Corp (DUK), has reached a partial settlement with the Public Staff of the North Carolina Utilities Commission (NCUC) regarding its August 2017 rate case. The settlement, if approved by the NCUC, is expected to result in an approximate $105 million annual customer rate increase before considering tax benefits, or a $45 million increase after accounting for the return of excess North Carolina state deferred income taxes over four years. This partial agreement resolves several issues, including a negotiated return on equity of 9.9% and the treatment of Customer Connect project costs. However, significant matters remain unsettled, notably the recovery of coal ash basin deferred costs, ongoing coal ash costs, the structure and costs associated with a Grid Reliability and Resiliency Rider, and the impacts of the Federal Tax Cuts and Jobs Act of 2017. DEC has also filed supplemental comments on implementing the federal tax changes. An evidentiary hearing is scheduled for March 5, 2018, to address the remaining issues and the proposed settlement.
Key Highlights
- 1Duke Energy Carolinas (DEC) reached a partial settlement in its North Carolina rate case.
- 2The partial settlement proposes a 9.9% return on equity, based on a 52% equity and 48% debt capital structure.
- 3Customers will receive excess North Carolina state deferred income taxes back over four years.
- 4The settlement results in an approximate $105 million annual customer rate increase before tax reductions, or $45 million after tax reductions.
- 5Key issues remain unresolved, including coal ash costs and recovery, grid reliability rider, and the impact of the Federal Tax Cuts and Jobs Act.
- 6DEC filed supplemental comments on implementing the Federal Tax Cuts and Jobs Act.
- 7An evidentiary hearing is scheduled for March 5, 2018, with the final decision subject to NCUC approval.