8-KRegulation FDExhibits & Filings

Duke Energy CORP 8-K Report, Regulation FD Disclosure (Dec 18, 2023)

Filed December 18, 2023For Securities:DUKDUKBDUK-PA

Summary

Duke Energy Carolinas, a subsidiary of Duke Energy CORP, announced a significant development following its base rate case proceeding. The North Carolina Utilities Commission (NCUC) issued an order on December 15, 2023, approving key settlements that will impact the company's financial operations and customer rates. The order includes approval for an increase in base rates and the implementation of Performance-Based Regulation, designed to align regulatory outcomes with company performance. Key aspects of the approved settlement include the agreement on the prudence of plant-related investments, inclusion of specific capital projects in a 3-year multi-year rate plan, acceptance of depreciation rates with adjustments, and the recovery of Grid Improvement Plan deferred costs. Notably, the NCUC approved a return on equity (ROE) of 10.1% and will allow for the recovery of deferred COVID-related costs. Duke Energy Carolinas will implement revised Year 1 rates and residential decoupling in January 2024.

Key Highlights

  • 1NCUC approves base rate increase for Duke Energy Carolinas (DEC) effective January 2024.
  • 2NCUC order includes implementation of Performance-Based Regulation (PBR).
  • 3Approved Return on Equity (ROE) set at 10.1% with a capital structure of 53% equity and 47% debt.
  • 4Settlement reached on prudence of plant-related investments and inclusion of capital projects in a 3-year multi-year rate plan.
  • 5DEC will recover Grid Improvement Plan deferred costs over 18 years.
  • 6Recovery of deferred COVID-related costs approved over three years.
  • 7Revised Year 1 rates and residential decoupling to be implemented in January 2024.

Frequently Asked Questions

The primary impact is the approval of an increase in base rates for Duke Energy Carolinas, along with the implementation of Performance-Based Regulation. This order allows the company to recover specific investments and costs, and it establishes a framework for future regulatory treatment of performance metrics and capital expenditures.

The North Carolina Utilities Commission approved a return on equity of 10.1% for Duke Energy Carolinas. This is based on a capital structure of 53% equity and 47% debt.

Duke Energy Carolinas will implement revised Year 1 rates and residential decoupling in January 2024, reflecting the NCUC's decision.

The NCUC order allows for the recovery of Grid Improvement Plan deferred costs over 18 years. Additionally, deferred COVID-related costs will be recovered over a three-year period, with returns allowed during the deferral and amortization periods for both categories.