01—Abstract
Summary
Summary of the 8-K filed November 20, 2025. Cited figures are marked; the original filing is the authoritative source.
On November 20, 2025, Duke Energy Carolinas (DEC) and Duke Energy Progress (DEP) filed rate cases with the North Carolina Utilities Commission (NCUC) seeking retail revenue increases.
If approved in full, DEC's net retail revenues would rise about $727 milliona (10.9%) in Year 1 and $275 million (4.1%) in Year 2, a cumulative 15.0% increase totaling $1,002 million. DEP's request is about $528 million (10.9%) in Year 1 and $200 million (4.1%) in Year 2, a cumulative 15.1% increase totaling $729 million. Both filings propose a two-year Multi-Year Rate Plan (MYRP) for 2027 and 2028, along with residential decoupling, performance incentive mechanisms (PIMs), and an earnings sharing mechanism (ESM).
The requests are driven mainly by historical plant investment and depreciation changes, planned MYRP capital projects (about $4.4 billionb for DEC and $3.9 billion for DEP on an NC retail basis), and a higher requested return. The companies request a 10.95% ROE with a 53% equity component, compared with 10.1% for DEC and 9.8% for DEP in their last cases. Recovery of deferred coal ash costs (about $417 million for DEC and $411 million for DEP, amortized over five years) and new storm reserves are also included.
Both requests incorporate production tax credit (PTC) flowbacks to customers. DEC already returns nuclear PTC benefits through an existing rider, while DEP proposes a new rider starting in 2027. The companies ask the NCUC to approve Year 1 rates effective no later than January 1, 2027.
No procedural schedule has been set, but hearings are expected to begin in the third quarter of 2026. Investors should watch the NCUC's treatment of the requested ROE, the size of the capital investment recovery, and the final scope of the MYRP, since these determine the earnings trajectory for both utilities over 2027 and 2028.
02—Key points
Key Highlights
- DEC requests a net retail revenue increase of $727M (10.9%) in Year 1 and $275M (4.1%) in Year 2, totaling $1,002M (15.0%).
- DEP requests a net retail revenue increase of $528M (10.9%) in Year 1 and $200M (4.1%) in Year 2, totaling $729M (15.1%), net of a proposed PTC Rider that would flow monetized PTCs back to customers starting in 2027.
- Both utilities request a 10.95% ROE with a 53% equity component, an overall return of 7.92%, up from 10.1% (DEC) and 9.8% (DEP) in their last rate cases.
- Performance Based Regulation proposals include a two-year MYRP (2027–2028), residential decoupling with no structural changes, an ESM that returns earnings above authorized ROE plus 50 bps to customers, four PIMs, and three tracking metrics.
- Planned MYRP capital projects total about $4.4B (DEC) and $3.9B (DEP) on an NC retail basis, with transmission and distribution making up roughly 55–60% of that spending.
- Coal ash cost recovery requests about $417M (DEC) and $411M (DEP) over five years, and both companies propose new storm reserves ($20M and $30M annual funding).
- Hearings are expected to begin in Q3 2026, with the companies seeking Year 1 rates effective no later than January 1, 2027; the NCUC has not yet set a procedural schedule.
03—Questions
Frequently Asked Questions
How large are the proposed rate increases and when would they take effect?
DEC seeks a $727M (10.9%) increase in Year 1 and a further $275M (4.1%) in Year 2, a 15.0% cumulative increase. DEP seeks $528M (10.9%) in Year 1 and $200M (4.1%) in Year 2, a 15.1% cumulative increase. The companies ask that Year 1 rates take effect no later than January 1, 2027, and hearings are expected in Q3 2026. Final amounts depend on NCUC approval, which may differ from these requests.
What is driving the requested increases?
For DEC, the largest drivers are historical plant investments and depreciation changes ($423M, 42%) and MYRP projected investments ($407M, 41%), followed by ROE and capital structure ($155M, 15%). For DEP, MYRP projected investments ($328M, 45%) and historical plant investments ($290M, 40%) are the largest drivers, with ROE and capital structure at $141M (19%). Both filings also include coal ash and storm reserve costs, partly offset by lower O&M and storm securitization reconciliations.
What return on equity are the utilities requesting, and how does it compare to prior cases?
Both utilities request a 10.95% ROE with a 53% equity component, producing an overall rate of return of 7.92%. This compares with an ROE of 10.1% for DEC and 9.8% for DEP in their last rate cases, both at a 53% equity component. The 7.92% figure reflects a 150 basis point ROE reduction tied to the coal ash settlement for deferred coal ash costs during the amortization period. The NCUC's decision on ROE will be a key driver of earnings outcomes.
What do the Performance Based Regulation proposals mean for earnings volatility?
The filings propose a two-year MYRP covering 2027 and 2028 with an earnings sharing mechanism. If adjusted annual earnings exceed the authorized ROE plus 50 basis points, the excess is returned to customers through a rider, which caps upside. Performance incentive mechanisms carry potential annual upside and downside of up to $8.1M for DEC and $5.4M for DEP. Residential decoupling continues with no structural changes, though incremental EV revenue is excluded from the calculation.
How do the production tax credit riders affect customers and the companies?
DEC already returns nuclear PTC benefits through a standalone rider, with $50M flowed back in 2025 and $100M in 2026, and expects to return at least $100M in 2027. DEP proposes a new PTC Rider similar to DEC's, which would flow back about $40M (NC retail) in each of 2027 and 2028, with annual updates thereafter. DEP's requested revenue increase is shown net of this rider, so the PTC flowbacks partly offset the rate request for customers.
04—Continue