Summary
Duke Energy Carolinas, LLC (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 Performance Based Regulation (PBR) application. This settlement addresses key components of the rate case, including the prudence of plant-related investments, capital projects for a multi-year rate plan, and the acceptance of depreciation rates with adjustments. It also supports the recovery of Grid Improvement Plan deferred costs over 18 years. While this partial settlement is a positive step, certain contentious issues remain unresolved, notably the return on equity, capitalization structure, and recovery of COVID-19 related deferred costs. These outstanding matters will be subject to an evidentiary hearing scheduled for August 28, 2023. Investors should note that the settlement is expected to result in a one-time pre-tax accounting charge of approximately $30-$40 million in the third quarter of 2023.
Key Highlights
- 1Duke Energy Carolinas (DEC) reached a partial settlement with the Public Staff – North Carolina Utilities Commission (NCUC) on its Performance Based Regulation (PBR) application.
- 2The settlement covers the prudence of plant-related investments, capital projects for a 3-year multi-year rate plan, and depreciation rates.
- 3Full recovery of Grid Improvement Plan deferred costs over 18 years is supported, with specific return provisions.
- 4Key issues like return on equity, capitalization structure, and COVID-19 deferred cost recovery remain unresolved.
- 5An evidentiary hearing for remaining issues and review of the settlement is scheduled for August 28, 2023.
- 6A one-time pre-tax accounting charge of $30-$40 million is expected in Q3 2023 as a result of the settlement.