Summary
Duke Energy's subsidiaries, Duke Energy Carolinas, LLC (DEC) and Duke Energy Progress, LLC (DEP), have filed a Second Agreement and Stipulation of Partial Settlement with the North Carolina Utilities Commission (NCUC) Public Staff regarding their general rate cases. This filing represents a significant step towards resolving key aspects of the rate-setting process, with an agreed-upon return on equity (ROE) of 9.6% and a capital structure of 52% equity and 48% debt. Investors should note that this partial settlement covers approximately $1.3 billion in grid improvement projects for deferral treatment and includes updates to plant in service totaling about $70 million in annual revenue requirement, subject to audit. However, crucial issues such as the recovery of coal ash basin expenditures and annual depreciation expense remain unresolved. The hearings for the general rate cases have been postponed to August 24, 2020, impacting the original rate implementation timelines, with DEC requesting interim rates effective August 24, 2020, and DEP planning to implement interim rates by September 1, 2020. The Stipulations are pending final approval from the NCUC.
Key Highlights
- 1Partial settlement reached on general rate cases for Duke Energy Carolinas (DEC) and Duke Energy Progress (DEP) in North Carolina.
- 2Agreed-upon Return on Equity (ROE) set at 9.6% and a capital structure of 52% equity / 48% debt.
- 3Approximately $1.3 billion in grid improvement projects to be deferred.
- 4Annual revenue requirement updates totaling approximately $70 million for DEC and DEP included, subject to audit.
- 5Key issues like coal ash basin expenditures and depreciation expense are *not* part of this partial settlement.
- 6Hearings for rate cases postponed to August 24, 2020, impacting previously scheduled rate effective dates.
- 7Interim rate requests are being adjusted by DEC and DEP to reflect the settlement terms and new hearing schedule.