TABLE OF CONTENTS



	Cautionary Statement Regarding Forward-Looking Information

PART I. FINANCIAL INFORMATION
Item 1.	Financial Statements

	Duke Energy Corporation Financial Statements	9

	Duke Energy Carolinas, LLC Financial Statements	14

	Progress Energy, Inc. Financial Statements	18

	Duke Energy Progress, LLC Financial Statements	22

	Duke Energy Florida, LLC Financial Statements	26

	Duke Energy Ohio, Inc. Financial Statements	30

	Duke Energy Indiana, LLC Financial Statements	34

	Piedmont Natural Gas Company, Inc. Financial Statements	38

	Combined Notes to Condensed Consolidated Financial Statements
	Note 1 – Organization and Basis of Presentation	42
	Note 2 – Business Segments	44
	Note 3 – Regulatory Matters	4645
	Note 4 – Commitments and Contingencies	5458
	Note 5 – ~~Leases~~Debt and Credit Facilities	5861
	Note 6 – ~~Debt and Credit Facilities~~Goodwill	62
	Note 7 – ~~Asset Retirement Obligations~~Related Party Transactions	63
	Note 8 – Derivatives and Hedging	64
	Note ~~8 – Goodwill~~	65
	~~Note~~ 9 ~~– Related Party Transactions~~	66
	~~Note 10 – Derivatives and Hedging~~	67
	~~Note 11~~ – Investments in Debt and Equity Securities	7270
	Note 10 – Fair Value Measurements	75
	Note 11 – Variable Interest Entities	80
	Note 12 – ~~Fair Value Measurements~~Revenue	7784
	Note 13 – ~~Variable Interest Entities~~Stockholders' Equity	8287
	Note 14 – ~~Revenue~~Employee Benefit Plans	8688
	Note 15 – ~~Stockholders' Equity~~Income Taxes	89
	Note 16 – ~~Employee Benefit Plans~~	90
	~~Note 17 – Income Taxes~~	91
	~~Note 18 –~~ Subsequent Events	9290

Item 2.	Management's Discussion and Analysis of Financial Condition and Results of Operations	9391

Item 3.	Quantitative and Qualitative Disclosures About Market Risk	~~113~~109

Item 4.	Controls and Procedures	~~113~~109

PART II. OTHER INFORMATION
Item 1.	Legal Proceedings	~~114~~111

Item 1A.	Risk Factors	~~114~~111

Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	~~114~~111

Item 6.	Exhibits	~~115~~112

	Signatures	~~118~~115



~~FORWARD LOOKING~~FORWARD-LOOKING STATEMENTS

CAUTIONARY STATEMENT REGARDING FORWARD-LOOKING INFORMATION

This document includes forward-looking statements within the meaning of Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934. Forward-looking statements are based on management’s beliefs and assumptions and can often be identified by terms and phrases that include “anticipate,” “believe,” “intend,” “estimate,” “expect,” “continue,” “should,” “could,” “may,” “plan,” “project,” “predict,” “will,” “potential,” “forecast,” “target,” “guidance,” “outlook” or other similar terminology. Various factors may cause actual results to be materially different than the suggested outcomes within forward-looking statements; accordingly, there is no assurance that such results will be realized. These factors include, but are not limited to:


◦	The impact of the COVID-19 pandemic;


◦	State, federal and foreign legislative and regulatory initiatives, including costs of compliance with existing and future environmental requirements, including those related to climate change, as well as rulings that affect cost and investment recovery or have an impact on rate structures or market prices;


◦	The extent and timing of costs and liabilities to comply with federal and state laws, regulations and legal requirements related to coal ash remediation, including amounts for required closure of certain ash impoundments, are uncertain and difficult to estimate;


◦	The ability to recover eligible costs, including amounts associated with coal ash impoundment retirement obligations and costs related to significant weather events, and to earn an adequate return on investment through rate case proceedings and the regulatory process;


◦	The costs of decommissioning nuclear facilities could prove to be more extensive than amounts estimated and all costs may not be fully recoverable through the regulatory process;


◦	Costs and effects of legal and administrative proceedings, settlements, investigations and claims;


◦	Industrial, commercial and residential growth or decline in service territories or customer bases resulting from sustained downturns of the economy and the economic health of our service territories or variations in customer usage patterns, including energy efficiency efforts and use of alternative energy sources, such as self-generation and distributed generation technologies;


◦	Federal and state regulations, laws and other efforts designed to promote and expand the use of energy efficiency measures and distributed generation technologies, such as private solar and battery storage, in Duke Energy service territories could result in customers leaving the electric distribution system, excess generation resources as well as stranded costs;


◦	Advancements in technology;


◦	Additional competition in electric and natural gas markets and continued industry consolidation;


◦	The influence of weather and other natural phenomena on operations, including the economic, operational and other effects of severe storms, hurricanes, droughts, earthquakes and tornadoes, including extreme weather associated with climate change;


◦	The ability to successfully operate electric generating facilities and deliver electricity to customers including direct or indirect effects to the company resulting from an incident that affects the United States electric grid or generating resources;


◦	The ability to obtain the necessary permits and approvals and to complete necessary or desirable pipeline expansion or infrastructure projects in our natural gas business;


◦	Operational interruptions to our natural gas distribution and transmission activities;


◦	The availability of adequate interstate pipeline transportation capacity and natural gas supply;


◦	The impact on facilities and business from a terrorist attack, cybersecurity threats, data security breaches, operational accidents, information technology failures or other catastrophic events, such as fires, explosions, pandemic health events or other similar occurrences;


◦	The inherent risks associated with the operation of nuclear facilities, including environmental, health, safety, regulatory and financial risks, including the financial stability of third-party service providers;


◦	The timing and extent of changes in commodity prices and interest rates and the ability to recover such costs through the regulatory process, where appropriate, and their impact on liquidity positions and the value of underlying assets;


◦	The results of financing efforts, including the ability to obtain financing on favorable terms, which can be affected by various factors, including credit ratings, interest rate fluctuations, compliance with debt covenants and conditions and general market and economic conditions;


◦	Credit ratings of the Duke Energy Registrants may be different from what is expected;


◦	Declines in the market prices of equity and fixed-income securities and resultant cash funding requirements for defined benefit pension plans, other post-retirement benefit plans and nuclear decommissioning trust funds;

◦

Construction and development risks associated with the completion of the Duke Energy Registrants’ capital investment projects, including risks related to financing, obtaining and complying with terms of permits, meeting construction budgets and schedules and satisfying operating and environmental performance standards, as well as the ability to recover costs from customers in a timely manner, or at all;


◦	Changes in rules for regional transmission organizations, including changes in rate designs and new and evolving capacity markets, and risks related to obligations created by the default of other participants;


◦	The ability to control operation and maintenance costs;


◦	The level of creditworthiness of counterparties to transactions;


◦	The ability to obtain adequate insurance at acceptable costs;


◦	Employee workforce factors, including the potential inability to attract and retain key personnel;

State, federal and foreign legislative and regulatory initiatives, including costs of compliance with existing and future environmental requirements, including those related to climate change, as well as rulings that affect cost and investment recovery or have an impact on rate structures or market prices;

The extent and timing of costs and liabilities to comply with federal and state laws, regulations and legal requirements related to coal ash remediation, including amounts for required closure of certain ash impoundments, are uncertain and difficult to estimate;

The ability to recover eligible costs, including amounts associated with coal ash impoundment retirement obligations and costs related to significant weather events, and to earn an adequate return on investment through rate case proceedings and the regulatory process;

The costs of decommissioning Crystal River Unit 3 and other nuclear facilities could prove to be more extensive than amounts estimated and all costs may not be fully recoverable through the regulatory process;

~~Costs and effects of legal and administrative proceedings, settlements, investigations and claims;~~

Industrial, commercial and residential growth or decline in service territories or customer bases resulting from sustained downturns of the economy and the economic health of our service territories or variations in customer usage patterns, including energy efficiency efforts and use of alternative energy sources, such as self-generation and distributed generation technologies;

Federal and state regulations, laws and other efforts designed to promote and expand the use of energy efficiency measures and distributed generation technologies, such as private solar and battery storage, in Duke Energy service territories could result in customers leaving the electric distribution system, excess generation resources as well as stranded costs;

~~Advancements in technology;~~

~~Additional competition in electric and natural gas markets and continued industry consolidation;~~

The influence of weather and other natural phenomena on operations, including the economic, operational and other effects of severe storms, hurricanes, droughts, earthquakes and tornadoes, including extreme weather associated with climate change;

The ability to successfully operate electric generating facilities and deliver electricity to customers including direct or indirect effects to the company resulting from an incident that affects the U.S. electric grid or generating resources;

~~The ability to obtain the necessary permits and approvals and to complete necessary or desirable pipeline expansion or infrastructure projects in our natural gas business;~~

~~Operational interruptions to our natural gas distribution and transmission activities;~~

~~The availability of adequate interstate pipeline transportation capacity and natural gas supply;~~

The impact on facilities and business from a terrorist attack, cybersecurity threats, data security breaches, operational accidents, information technology failures or other catastrophic events, such as fires, explosions, pandemic health events or other similar occurrences;

The inherent risks associated with the operation of nuclear facilities, including environmental, health, safety, regulatory and financial risks, including the financial stability of third-party service providers;

The timing and extent of changes in commodity prices and interest rates and the ability to recover such costs through the regulatory process, where appropriate, and their impact on liquidity positions and the value of underlying assets;

The results of financing efforts, including the ability to obtain financing on favorable terms, which can be affected by various factors, including credit ratings, interest rate fluctuations, compliance with debt covenants and conditions and general market and economic conditions;

~~Credit ratings of the Duke Energy Registrants may be different from what is expected;~~

Declines in the market prices of equity and fixed-income securities and resultant cash funding requirements for defined benefit pension plans, other post-retirement benefit plans and nuclear decommissioning trust funds;

Changes in rules for regional transmission organizations, including changes in rate designs and new and evolving capacity markets, and risks related to obligations created by the default of other participants;

~~The ability to control operation and maintenance costs;~~

~~The level of creditworthiness of counterparties to transactions;~~

~~Employee workforce factors, including the potential inability to attract and retain key personnel;~~

~~The ability of subsidiaries to pay dividends or distributions to Duke Energy Corporation holding company (the Parent);~~



~~FORWARD LOOKING~~FORWARD-LOOKING STATEMENTS

~~The performance of projects undertaken by our nonregulated businesses and the success of efforts to invest in and develop new opportunities;~~

~~The effect of accounting pronouncements issued periodically by accounting standard-setting bodies;~~

~~The impact of U.S. tax legislation to our financial condition, results of operations or cash flows and our credit ratings;~~

~~The impacts from potential impairments of goodwill or equity method investment carrying values; and~~

~~The ability to implement our business strategy, including enhancing existing technology systems.~~


◦	The ability of subsidiaries to pay dividends or distributions to Duke Energy Corporation holding company (the Parent);


◦	The performance of projects undertaken by our nonregulated businesses and the success of efforts to invest in and develop new opportunities;


◦	The effect of accounting pronouncements issued periodically by accounting standard-setting bodies;


◦	The impact of United States tax legislation to our financial condition, results of operations or cash flows and our credit ratings;


◦	The impacts from potential impairments of goodwill or equity method investment carrying values; and


◦	The ability to implement our business strategy, including enhancing existing technology systems.

Additional risks and uncertainties are identified and discussed in the Duke Energy Registrants' reports filed with the SEC and available at the SEC's website at sec.gov. In light of these risks, uncertainties and assumptions, the events described in the forward-looking statements might not occur or might occur to a different extent or at a different time than described. Forward-looking statements speak only as of the date they are made and the Duke Energy Registrants expressly disclaim an obligation to publicly update or revise any forward-looking statements, whether as a result of new information, future events or otherwise.



GLOSSARY OF TERMS

Glossary of Terms

The following terms or acronyms used in this Form 10-Q are defined below:



Term or Acronym	Definition

2013 Settlement	Revised and Restated Stipulation and Settlement Agreement approved in November 2013 among Duke Energy Florida, the Florida OPC and other customer ~~advocates~~representatives

2017 Settlement	Second Revised and Restated Settlement Agreement in 2017 among Duke Energy Florida, the Florida OPC and other customer ~~advocates,~~representatives, which replaces and supplants the 2013 Settlement

ACP	Atlantic Coast Pipeline, LLC, a limited liability company owned by Dominion Energy, Inc. and Duke Energy ~~and Southern Company Gas~~

ACP pipeline	The approximately 600-mile proposed interstate natural gas pipeline

AFS	Available for Sale

AFUDC	Allowance for funds used during construction

~~the Agents~~	~~Wells Fargo Securities, LLC, Citigroup Global Market Inc., J.P. Morgan Securities, LLC~~

AMI	Advanced Metering Infrastructure

AMT	Alternative Minimum Tax

~~AOCI~~	~~Accumulated Other Comprehensive Income (Loss)~~

ARO	Asset retirement obligations

~~ATM~~	~~At-the-market~~

~~Beckjord~~	~~Beckjord Generating Station~~

~~Belews Creek~~	~~Belews Creek Steam Station~~

Bison	Bison Insurance Company Limited

~~Cardinal~~	~~Cardinal Pipeline Company, LLC~~

CC	Combined Cycle

CCR	Coal Combustion Residuals

CARES Act	Coronavirus Aid, Relief and Economic Security Act

Citrus County CC	Citrus County Combined Cycle Facility

Coal Ash Act	North Carolina Coal Ash Management Act of 2014

the Company	Duke Energy Corporation and its subsidiaries

Constitution	Constitution Pipeline Company, LLC

~~CPCN~~COVID-19	~~Certificate of Public Convenience and Necessity~~Coronavirus Disease 2019

CRC	Cinergy Receivables Company, LLC

Crystal River Unit 3	Crystal River Unit 3 Nuclear Plant

~~CWA~~	~~Clean Water Act~~

~~D.C. Circuit Court~~	~~U.S. Court of Appeals for the District of Columbia Circuit~~

DEFPF	Duke Energy Florida Project Finance, LLC

DEFR	Duke Energy Florida Receivables, LLC

DEPR	Duke Energy Progress Receivables, LLC

DERF	Duke Energy Receivables Finance Company, LLC

~~DRIP~~	~~Dividend Reinvestment Program~~

Duke Energy	Duke Energy Corporation (collectively with its subsidiaries)

Duke Energy Ohio	Duke Energy Ohio, Inc.

Duke Energy Progress	Duke Energy Progress, LLC

Duke Energy Carolinas	Duke Energy Carolinas, LLC

Duke Energy Florida	Duke Energy Florida, LLC



~~GLOSSARY OF TERMS~~



Duke Energy Indiana	Duke Energy Indiana, LLC

Duke Energy Kentucky	Duke Energy Kentucky, Inc.

Duke Energy Registrants	Duke Energy, Duke Energy Carolinas, Progress Energy, Duke Energy Progress, Duke Energy Florida, Duke Energy Ohio, Duke Energy Indiana and Piedmont

~~the EDA~~	~~Equity Distribution Agreement~~

EDIT	Excess deferred income tax

EPA	U.S. Environmental Protection Agency

~~EPC~~	~~Engineering, Procurement and Construction agreement~~

EPS	Earnings Per Share

ESP	Electric Security Plan

ETR	Effective tax rate



GLOSSARY OF TERMS




Exchange Act	Securities Exchange Act of 1934

FASB	Financial Accounting Standards Board

FERC	Federal Energy Regulatory Commission

~~FES~~	~~FirstEnergy Solutions Corp.~~

~~Fluor~~	~~Fluor Enterprises, Inc.~~

FPSC	Florida Public Service Commission

FTR	Financial transmission rights

~~FV-NI~~	~~Fair value through net income~~

GAAP	Generally accepted accounting principles in the U.S.

GAAP Reported Earnings	Net Income ~~Attributable~~Available to Duke Energy Corporation Common Stockholders

GAAP Reported EPS	~~Diluted~~Basic EPS ~~Attributable~~Available to Duke Energy Corporation common stockholders

GWh	Gigawatt-hours

~~Hardy Storage~~	~~Hardy Storage Company, LLC~~

~~ICPA~~	~~Inter-Company Power Agreement~~

IGCC	Integrated Gasification Combined Cycle

IMR	Integrity Management Rider

IRP	Integrated Resource Plan

IRS	Internal Revenue Service

Investment Trusts	NDTF investments and grantor trusts of Duke Energy Progress, Duke Energy Florida and Duke Energy Indiana

IURC	Indiana Utility Regulatory Commission

~~JAAR~~	~~Joint Asset Agency Rider~~

~~JDA~~	~~Joint Dispatch Agreement~~

KPSC	Kentucky Public Service Commission

~~Lee Nuclear Station~~LLC	~~William States Lee III Nuclear Station~~Limited Liability Company

MGP	Manufactured gas plant

~~MISO~~	~~Midcontinent Independent System Operator, Inc.~~

MMBtu	Million British Thermal Unit

MW	Megawatt

MWh	Megawatt-hour

~~NAV~~	~~Net asset value~~



~~GLOSSARY OF TERMS~~



NCDEQ	North Carolina Department of Environmental Quality ~~(formerly the North Carolina Department of Environment and Natural Resources)~~

NCUC	North Carolina Utilities Commission

NDTF	Nuclear decommissioning trust funds

~~NMC~~	~~National Methanol Company~~

~~NPDES~~	~~National Pollutant Discharge Elimination System~~

NPNS	Normal purchase/normal sale

~~NRC~~	~~U.S. Nuclear Regulatory Commission~~

OPEB	Other Post-Retirement Benefit Obligations

ORS	South Carolina Office of Regulatory Staff

OTTI	Other-than-temporary impairment

OVEC	Ohio Valley Electric Corporation

Piedmont	Piedmont Natural Gas Company, Inc.

~~Piedmont Term Loan~~	~~Term loan facility with commitments totaling $350M entered in June 2017~~

~~Pine Needle~~	~~Pine Needle LNG Company, LLC~~

~~Pioneer~~	~~Pioneer Transmission, LLC~~

~~PJM~~	~~PJM Interconnection, LLC~~

~~PMPA~~	~~Piedmont Municipal Power Agency~~

~~PPAs~~PPA	Purchase Power ~~Agreements~~Agreement

Progress Energy	Progress Energy, Inc.

PSCSC	Public Service Commission of South Carolina

PUCO	Public Utilities Commission of Ohio

~~REC~~	~~Renewable Energy Certificate~~

~~REC Solar~~	~~REC Solar Corp.~~

ROU assets	Right-of-use assets

~~RRBA~~	~~Roanoke River Basin Association~~

~~SELC~~	~~Southern Environmental Law Center~~

Subsidiary Registrants	Duke Energy Carolinas, Progress Energy, Duke Energy Progress, Duke Energy Florida, Duke Energy Ohio, Duke Energy Indiana and Piedmont

the Tax Act	Tax Cuts and Jobs Act

~~TDSIC~~	~~Transmission, Distribution and Storage System Improvement Charge~~

TPUC	Tennessee Public Utility Commission

U.S.	United States

VIE	Variable Interest Entity

~~WNA~~WACC	~~Weather normalization adjustment~~

~~W.S. Lee CC~~	~~William States Lee Combined Cycle Facility~~
	Weighted Average Cost of Capital



FINANCIAL STATEMENTS

ITEM 1. FINANCIAL STATEMENTS

DUKE ENERGY CORPORATION

Condensed Consolidated Statements of Operations

(Unaudited)


	Three Months Ended						Three Months Ended
	March 31,						March 31,
(in millions, except per-share amounts)	2019			2018
(in millions, except per share amounts)							2020			2019
Operating Revenues
Regulated electric	$	5,285		$	5,284		$	5,124		$	5,285
Regulated natural gas	728			700			638			728
Nonregulated electric and other	150			151			187			150
Total operating revenues	6,163			6,135			5,949			6,163
Operating Expenses
Fuel used in electric generation and purchased power	1,609			1,676			1,447			1,609
Cost of natural gas	327			313			199			327
Operation, maintenance and other	1,419			1,464			1,339			1,419
Depreciation and amortization	1,089			967			1,130			1,089
Property and other taxes	343			316			345			343
Impairment charges	—			43			2			—
Total operating expenses	4,787			4,779			4,462			4,787
Losses on Sales of Other Assets and Other, net	(3		)	(100		)
Gains (Losses) on Sales of Other Assets and Other, net							1			(3		)
Operating Income	1,373			1,256			1,488			1,373
Other Income and Expenses
Equity in earnings (losses) of unconsolidated affiliates	43			(24		)
Equity in earnings of unconsolidated affiliates							44			43
Other income and expenses, net	115			86			46			115
Total other income and expenses	158			62			90			158
Interest Expense	543			515			551			543
Income Before Income Taxes	988			803			1,027			988
Income Tax Expense	95			181			137			95
Net Income	893			622			890			893
Less: Net (Loss) Income Attributable to Noncontrolling Interests	(7		)	2
Less: Net Loss Attributable to Noncontrolling Interests							(48		)	(7		)
Net Income Attributable to Duke Energy Corporation	$	900		$	620		938			900
Less: Preferred Dividends							39			—
Net Income Available to Duke Energy Corporation Common Stockholders							$	899		$	900

Earnings Per Share – Basic and Diluted
Net income attributable to Duke Energy Corporation common stockholders
Net income available to Duke Energy Corporation common stockholders
Basic and Diluted	$	1.24		$	0.88		$	1.24		$	1.24
Weighted average shares outstanding
Basic and Diluted	727			701
Basic							734			727
Diluted							736			727



FINANCIAL STATEMENTS	REGULATORY MATTERS

Duke Energy Carolinas also requested approval of its proposed Grid Improvement Plan (GIP), adjustments to its Prepaid Advantage Program and a variety of accounting orders related to ongoing costs for environmental compliance, including recovery over a five-year period of $242 million of deferred coal ash related compliance costs, grid investments between rate changes, incremental depreciation expense, a result of new depreciation rates from the depreciation study approved in the 2017 North Carolina Rate Case above, and the balance of development costs associated with the cancellation of the Lee Nuclear Project. Finally, Duke Energy Carolinas sought approval to establish a reserve and accrual for end-of-life nuclear costs for nuclear fuel and materials and supplies. On March 8, 2019, the ORS moved to establish a new and separate hearing docket to review and consider the GIP proposed by Duke Energy Carolinas. Subsequently, on March 12, 2019, the ORS and Duke Energy Carolinas executed a Stipulation resolving the ORS’s motion. The Stipulation ~~provides~~provided that costs incurred for the GIP after January 1, 2019, ~~for the GIP will~~would be deferred with a return, subject to evaluation in a future rate ~~proceeding, and that Duke Energy Carolinas will refile for consideration of the GIP in a new docket for resolution by January 1, 2020.~~proceeding. The Stipulation was approved by the ~~PSCSC’s hearing officer~~PSCSC on June 19, 2019. On December 16, 2019, Duke Energy Carolinas and Duke Energy Progress filed a Joint Petition to Establish an Informational Docket for Review and Consideration of Grid Improvement Plans through which Duke Energy Carolinas and Duke Energy Progress would provide interested stakeholders information on the companies' grid activities. The PSCSC requested parties comment on procedural matters by January 31, 2020; accordingly, various groups filed comments, none of which opposed an informational docket. Duke Energy Carolinas cannot predict the outcome of this matter.

After hearings in March ~~13, 2019. An evidentiary hearing began~~2019, the PSCSC issued an order on ~~March~~May 21, 2019, which included a return on equity of 9.5% and ~~concluded March 27,~~a capital structure of 53% equity and 47% debt. The order also included the following material components:

Approval of cancellation of the Lee Nuclear Project, with Duke Energy Carolinas maintaining the Combined Operating License;

Approval of recovery of $125 million (South Carolina retail portion) of Lee Nuclear Project development costs (including AFUDC through December 2017) over a 12-year period, but denial of a return on the deferred balance of costs;

Approval of recovery of $96 million of coal ash costs over a five-year period with a return at Duke Energy Carolinas' WACC;

Denial of recovery of $115 million of certain coal ash costs deemed to be related to the Coal Ash Act and incremental to the federal CCR rule;

Approval of a $66 million decrease to base rates to reflect the change in ongoing tax expense, primarily the reduction in the federal income tax rate from 35% to 21%;

Approval of a $45 million decrease through the EDIT Rider to return EDIT resulting from the federal tax rate change and deferred revenues since January 2018 related to the change, to be returned in accordance with the Average Rate Assumption Method (ARAM) for protected EDIT, over a 20-year period for unprotected EDIT associated with Property, Plant and Equipment, over a five-year period for unprotected EDIT not associated with Property, Plant and Equipment and over a five-year period for the deferred revenues; and

Approval of a $17 million decrease through the EDIT Rider related to reductions in the North Carolina state income tax rate from 6.9% to 2.5% to be returned over a five-year period.

As a result of the order, revised customer rates were effective June 1, 2019.

On May 1,31, 2019, Duke Energy Carolinas filed a Petition for Rehearing or Reconsideration of that order contending substantial rights of Duke Energy Carolinas were prejudiced by unlawful, arbitrary and capricious rulings by the commission on certain issues presented in the proceeding. On June 19, 2019, the PSCSC issued a ~~Commission~~ Directive ondenying Duke Energy ~~Carolinas’ application for a retail rate increase. The Directive granted, among other things: a retail rate increase~~Carolinas' request to rehear or reconsider the commission's rulings on certain issues presented in the proceeding including coal ash remediation and disposal costs, return on equity and the recovery of ~~$107 million, excluding the EDIT Rider;~~ a return on ~~equity~~deferred operation and maintenance expenses. An order detailing the commission's decision in the Directive was issued on October 18, 2019. Duke Energy Carolinas filed a notice of ~~9.5 percent;~~appeal on November 15, 2019, with the Supreme Court of South Carolina. On November 20, 2019, the South Carolina Energy Users Committee filed a Notice of Appeal and the ORS filed a ~~capital structure~~Notice of ~~53 percent equity~~Cross Appeal with the Supreme Court of South Carolina. On February 12, 2020, Duke Energy Carolinas and ~~47 percent debt. The Directive denied~~ the ORS filed a joint motion to extend briefing schedule deadlines, which was approved by the Supreme Court of South Carolina on February 20, 2020. On March 10, 2020, the ORS filed a consent motion requesting withdrawal of their appeal. Initial briefs were filed on April 21, 2020. Response briefs and reply briefs are due July 6, 2020, and August 11, 2020, respectively. Also on April 21, 2020, the South Carolina Energy User's Committee filed a brief arguing that the PSCSC erred in allowing Duke Energy Carolinas' recovery of ~~coal ash~~ costs ~~of approximately $115 million.~~related to the Lee Nuclear Station. Based ~~upon~~on legal analysis and ~~Duke Energy Carolinas' intention to file a Petition for Rehearing with~~ the ~~PSCSC,~~filing of the appeal, Duke Energy Carolinas has not recorded an adjustment for its deferred coal ash costs. The Directive also denied recovery of a return on pre-construction costs associated with the canceled Lee Nuclear Project. Duke Energy Carolinas is evaluating the financial statement impacts of this Directive and will record associated one-time costs when the final order is issued. Except for the coal ash matter, the financial statement impacts of this Directive are not material. An order and revised customer rates are expected by mid-2019. Duke Energy Carolinas cannot predict the outcome of this matter.

~~FERC Formula Rate Matter~~

On July 31, 2017, PMPA filed a complaint with FERC alleging that Duke Energy Carolinas misapplied the formula rate under the PPA between the parties by including in its rates amortization expense associated with regulatory assets and recorded in a certain account without FERC approval. On February 15, 2018, FERC issued an order ruling in favor of PMPA and ordered Duke Energy Carolinas to refund to PMPA all amounts improperly collected under the PPA. Duke Energy Carolinas has issued to PMPA and similarly situated wholesale customers refunds of approximately $25 million. FERC also set the matter for settlement and hearing. PMPA and other customers filed a protest to Duke Energy Carolinas' refund report claiming that the refunds are inadequate in that (1) Duke Energy Carolinas invoked the limitations periods in the contracts to limit the time period for which the refunds were paid and the customers disagree that this limitation applies, and (2) Duke Energy Carolinas refunded only amounts recovered through a certain account and the customers have asserted that the order applies to all regulatory assets. On July 3, 2018, FERC issued an order accepting Duke Energy Carolinas' refund report and ruling that these two claims are outside the scope of FERC's February order. The settlement agreements and revised formula rates for all parties to the proceeding were filed on December 28, 2018. On April 2, 2019, FERC issued an order approving the settlement agreement as filed. Duke Energy Carolinas is working with wholesale customers that did not intervene in this case to implement the same settlement terms.

~~Sale of Hydroelectric (Hydro) Plants~~

In May 2018, Duke Energy Carolinas entered an agreement for the sale of five hydro plants with a combined 18.7-MW generation capacity in the Western Carolinas region to Northbrook Energy. The completion of the transaction is subject to approval from FERC for the four FERC-licensed plants, as well as other state regulatory agencies and is contingent upon regulatory approval from the NCUC and PSCSC to defer the total estimated loss on the sale of approximately $40 million. On July 5, 2018, Duke Energy Carolinas filed with NCUC for approval of the sale of the five hydro plants to Northbrook, to transfer the CPCNs for the four North Carolina hydro plants and to establish a regulatory asset for the North Carolina retail portion of the difference between sales proceeds and net book value. On September 4, 2018, the Public Staff filed comments supporting the CPCN transfer with conditions. On September 18, 2018, Duke Energy Carolinas filed reply comments opposing the Public Staff’s proposed conditions. On November 29, 2018, the NCUC issued a procedural order and held an evidentiary hearing on this matter on February 5, 2019. On March 27, 2019, Duke Energy Carolinas and the Public Staff filed proposed orders with the NCUC. On August 28, 2018, Duke Energy Carolinas filed with PSCSC its Application for Approval of Transfer and Sale of Hydroelectric Generation Facilities, Acceptance for Filing of a Power Purchase Agreement and an Accounting Order to Establish a Regulatory Asset. On September 10, 2018, the ORS provided a letter to the commission stating its position on the application and on September 18, 2018, Duke Energy Carolinas requested this matter be carried over to allow Duke Energy Carolinas time to discuss certain accounting issues with the ORS. On August 9, 2018, Duke Energy Carolinas and Northbrook filed a joint Application for Transfer of Licenses with the FERC. On December 27, 2018, the FERC issued its Order Approving Transfer of Licenses (“Order”) for the four FERC-licensed hydro plants. On January 18, 2019, Duke Energy Carolinas and Northbrook Carolina Hydro II, LLC requested a six-month extension of time to comply with the requirement of the Order that Northbrook submit to FERC certified copies of all instruments of conveyance and signed acceptance sheets within 60 days of the date of the Order, given that compliance by the deadline set in the Order was not possible because the conveyance of the projects is contingent on the receipt of state regulatory approvals, which were not anticipated to be issued by February 25, 2019. On February 14, 2019, FERC issued an Order Granting Extensions of Time until August 26, 2019, to comply with the requirements of the Order.

If commission approvals are not received, Duke Energy Carolinas can cancel the sales agreement and retain the hydro facilities. If commission approvals are received, the closing is expected to occur in 2019. After closing, Duke Energy Carolinas will purchase all the capacity and energy generated by these facilities at the avoided cost for five years through power purchase agreements. Duke Energy Carolinas cannot predict the outcome of this matter.



~~FINANCIAL STATEMENTS~~	~~REGULATORY MATTERS~~

Duke Energy Progress

2017 North Carolina Rate Case

On June 1, 2017, Duke Energy Progress filed an application with the NCUC for a rate increase for retail customers of approximately $477 million, which represented an approximate ~~14.9 percent~~14.9% increase in annual base revenues. Subsequent to the filing, Duke Energy Progress adjusted the requested amount to $420 million, representing an approximate ~~13 percent~~13% increase. The request for rate increase was driven by capital investments subsequent to the previous base rate case, costs of complying with CCR regulations and the Coal Ash Act, costs relating to storm recovery, investments in customer service technologies and recovery of costs associated with renewable purchased power.

On November 22, 2017, Duke Energy Progress and the Public Staff filed an Agreement and Stipulation of Partial Settlement resolving certain portions of the proceeding. Terms of the settlement included a return on equity of ~~9.9 percent~~9.9% and a capital structure of ~~52 percent~~52% equity and ~~48 percent~~48% debt. On February 23, 2018, the NCUC issued an order approving the stipulation.

The order also impacted certain amounts that were similarly recorded on Duke Energy Carolinas' Condensed Consolidated Balance Sheets. As a result of the order, Duke Energy Progress and Duke Energy Carolinas recorded pretax charges of $68 million and $14 million, respectively, in the first quarter of 2018 to Impairment charges, Operation, maintenance and other and Interest Expense on the Condensed Consolidated Statements of Operations. Revised customer rates became effective on March 16, 2018.



FINANCIAL STATEMENTS	REGULATORY MATTERS

On May 15, 2018, the Public Staff filed a Notice of Cross Appeal to the North Carolina Supreme Court from the NCUC's February 23, 2018, ~~Order Accepting Stipulation, Deciding Contested Issues and Granting Partial Rate Increase issued by the NCUC.~~order. The Public Staff ~~contend~~contends the ~~commission’s~~NCUC’s order should be reversed and remanded, as it is affected by errors of law, and is unsupported by competent, material and substantial evidence in view of the entire record as submitted. The North Carolina Attorney General and Sierra Club also filed Notices of Appeal to the North Carolina Supreme Court from the February 23, 2018, ~~Order Accepting Stipulation, Deciding Contested Issues and Granting Partial Rate Increase.~~order. On November 29, 2018, the North Carolina Attorney General's Office filed a motion with the North Carolina Supreme Court requesting the court consolidate the Duke Energy Progress and Duke Energy Carolinas appeals and enter an order adopting the parties’ proposed briefing schedule as set out in the filing. On November 29, 2018, the North Carolina Supreme Court adopted a schedule for briefing set forth in the motion to consolidate the Duke Energy Progress and Duke Energy Carolinas appeals. On March 14, 2019, the North Carolina Attorney General’s Office filed a motion for extension of time to file its brief. On March 18, 2019, the North Carolina Supreme Court granted the North Carolina Attorney General’s motion, and the Appellant’s brief wasAppellant briefs were filed on April 26, 2019. The Appellee response briefs ~~are due~~were filed on ~~August 24,~~September 25, 2019. Oral arguments before the North Carolina Supreme Court were held on March 11, 2020. Duke Energy Progress cannot predict the outcome of this matter.

2019 North Carolina Rate Case

On October 30, 2019, Duke Energy Progress filed an application with the NCUC for a net rate increase for retail customers of approximately $464 million, which represented an approximate 12.3% increase in annual base revenues. The gross rate case revenue increase request was $586 million, which was offset by riders of $122 million, primarily an EDIT rider of $120 million to return to customers North Carolina and federal EDIT resulting from recent reductions in corporate tax rates. The request for rate increase was driven by major capital investments subsequent to the previous base rate case, coal ash pond closure costs, accelerated coal plant depreciation and deferred 2018 storm costs. Duke Energy Progress seeks to defer and recover incremental Hurricane Dorian storm costs in this proceeding and requests rates be effective no later than September 1, 2020. As a result of the COVID-19 pandemic, on March 24, 2020, the NCUC suspended the procedural schedule and postponed the previously scheduled evidentiary hearing on this matter indefinitely. On April 7, 2020, the NCUC issued an order partially resuming the procedural schedule requiring intervenors to file direct testimony on April 13, 2020. Public Staff filed supplemental direct testimony on April 23, 2020. Duke Energy Progress filed rebuttal testimony on May 4, 2020. On May 6, 2020, Duke Energy Progress, Duke Energy Carolinas and the Public Staff filed a joint motion requesting that the NCUC issue an order scheduling one consolidated evidentiary hearing to consider the companies’ applications for net rate increases. The joint motion suggests, health and safety permitting, that the commission consider the possibility of holding the consolidated hearing in July. If the NCUC grants the joint motion, Duke Energy Progress expects the NCUC to issue an order on its net rate increase by the end of the year. Duke Energy Progress cannot predict the outcome of this matter.

Hurricane Dorian

Hurricane Dorian reached the Carolinas in September 2019 as a Category 2 hurricane making landfall within Duke Energy Progress’ service territory. Approximately 270,000 North Carolina customers and 30,000 South Carolina customers were impacted by the slow-moving storm that brought high winds, tornadoes and heavy rain. With storm-response mobilization occurring in preparation for the storm and the assistance of mutual aid partners, full restoration was accomplished within four days for all customers able to receive service. Total estimated incremental operation and maintenance expenses incurred to repair and restore the system are approximately $177 million with an additional $4 million in capital investments made for restoration efforts. Approximately $151 million and $179 million of the operation and maintenance expenses are deferred in Regulatory assets within Other Noncurrent Assets on the Condensed Consolidated Balance Sheets as of March 31, 2020, and December 31, 2019, respectively. A request for an accounting order to defer incremental storm costs associated with Hurricane Dorian was included in Duke Energy Progress' October 30, 2019, general rate case filing with the NCUC. Duke Energy Progress cannot predict the outcome of this matter.

On February 7, 2020, a petition was filed with the PSCSC in the 2019 storm deferrals docket requesting deferral of approximately $22 million in operation and maintenance expenses to an existing storm deferral balance previously approved by the PSCSC. The PSCSC voted to approve the request on March 4, 2020, and issued a final order on April 7, 2020.

2018 South Carolina Rate Case

On November 8, 2018, Duke Energy Progress filed an application with the PSCSC for a rate increase for retail customers of approximately $59 million, which ~~represents~~represented an approximate ~~10.3 percent~~10.3% increase in annual base revenues. The request for rate increase iswas driven by capital investments and environmental compliance progress made by Duke Energy Progress since its previous rate case, including the further implementation of Duke Energy Progress’ generation modernization program, which consists of retiring, replacing and upgrading generation plants, investments in customer service technologies and continued investments in base work to maintain its transmission and distribution systems. The request included a decrease resulting from the Tax Act of $17 million to reflect the change in ongoing tax expense, primarily the reduction in the federal income tax rate from 3535% to ~~21 percent.~~21%. The request also included $10 million to return EDIT resulting from the federal tax rate change and deferred revenues since January 2018 related to the change (EDIT Rider) and a $12 million increase due to the expiration of EDITs related to reductions in North Carolina state income taxes allocable to South Carolina.

Duke Energy Progress also requested approval of its proposed GIP, approval of a Prepaid Advantage Program and a variety of accounting orders related to ongoing costs for environmental compliance, including recovery over a five-year period of $51 million of deferred coal ash related compliance costs, AMI deployment, grid investments between rate changes and regulatory asset treatment related to the retirement of a generating plant located in Asheville, North Carolina. Finally, Duke Energy Progress sought approval to establish a reserve and accrual for end-of-life nuclear costs for materials and supplies and nuclear fuel. On March 8, 2019, the ORS moved to establish a new and separate hearing docket to review and consider the GIP proposed by Duke Energy Progress. Subsequently, on March 12, 2019, the ORS and Duke Energy Carolinas executed a Stipulation resolving the ORS’s motion, and Duke Energy Progress agreed to the Stipulation, as did other parties in the rate case. The Stipulation ~~provides~~provided that costs incurred for the GIP after January 1, 2019, ~~for the GIP will~~would be deferred with a return, with all costs subject to evaluation in a future rate proceeding, and that Duke Energy Progress ~~will~~would refile for consideration of the GIP in a new docket for resolution by January 1, 2020. The Stipulation was approved by the ~~PSCSC’s hearing officer~~PSCSC on ~~March 13,~~June 19, 2019. ~~An evidentiary hearing began~~On December 16, 2019, Duke Energy Progress and Duke Energy Carolinas filed a Joint Petition to Establish an Informational Docket for Review and Consideration of Grid Improvement Plans through which Duke Energy Progress and Duke Energy Carolinas would provide interested stakeholders information on the companies' grid activities. The PSCSC requested parties comment on procedural matters by January 31, 2020; accordingly, various groups filed comments, none of which opposed an informational docket. Duke Energy Progress cannot predict the outcome of this matter.



FINANCIAL STATEMENTS	REGULATORY MATTERS

After hearings in April ~~11,~~ 2019, the PSCSC issued an order on May 21, 2019, which included a return on equity of 9.5% and ~~concluded on April 17,~~a capital structure of 53% equity and 47% debt. The order also included the following material components:

Approval of recovery of $4 million of coal ash costs over a five-year period with a return at Duke Energy Progress' WACC;

Denial of recovery of $65 million of certain coal ash costs deemed to be related to the Coal Ash Act and incremental to the federal CCR rule;

Approval of a $17 million decrease to base rates to reflect the change in ongoing tax expense, primarily the reduction in the federal income tax rate from 35% to 21%;

Approval of a $12 million decrease through the EDIT Tax Savings Rider resulting from the federal tax rate change and deferred revenues since January 2018 related to the change, to be returned in accordance with ARAM for protected EDIT, over a 20-year period for unprotected EDIT associated with Property, Plant and Equipment, over a five-year period for unprotected EDIT not associated with Property, Plant and Equipment and over a three-year period for the deferred revenues; and

Approval of a $12 million increase due to the expiration of EDIT related to reductions in the North Carolina state income tax rate from 6.9% to 2.5%.

As a result of the order, revised customer rates were effective June 1, 2019.

On May 8,31, 2019, Duke Energy Progress filed a Petition for Rehearing or Reconsideration of that order contending substantial rights of Duke Energy Progress were prejudiced by unlawful, arbitrary and capricious rulings by the commission on certain issues presented in the proceeding. On June 19, 2019, the PSCSC issued a ~~Commission~~ Directive ondenying Duke Energy ~~Progress’ application for a retail rate increase. The Directive granted, among other things: a retail rate increase~~Progress' request to rehear or reconsider the commission's rulings on certain issues presented in the proceeding including coal ash remediation and disposal costs, return on equity and the recovery of ~~$41 million, excluding the EDIT Rider;~~ a return on ~~equity~~deferred operation and maintenance expenses, but allowing additional litigation-related costs. As a result of ~~9.5 percent~~the Directive allowing litigation-related costs, customer rates were revised effective July 1, 2019. An order detailing the commission's decision in the Directive was issued on October 18, 2019. Duke Energy Progress filed a notice of appeal on November 15, 2019, with the Supreme Court of South Carolina. The ORS filed a Notice of Cross Appeal on November 20, 2019. On February 12, 2020, Duke Energy Progress and the ORS filed a ~~capital structure~~joint motion to extend briefing schedule deadlines, which was approved by the Supreme Court of ~~53 percent equity~~South Carolina on February 20, 2020. On March 10, 2020, the ORS filed a consent motion requesting withdrawal of their appeal. Initial briefs were filed on April 21, 2020. Response briefs and ~~47 percent debt. The Directive denied the recovery of coal ash costs of approximately $65 million.~~reply briefs are due July 6, 2020, and August 11, 2020, respectively. Based ~~upon~~on legal analysis and ~~Duke Energy Progress' intention to file a Petition for Rehearing with~~ the ~~PSCSC,~~filing of the appeal, Duke Energy Progress has not recorded an adjustment for its deferred coal ash costs. Duke Energy Progress is evaluating the financial statement impacts of this Directive and will record associated one-time costs when the final order is issued. Except for the coal ash matter, the financial statement impacts of this Directive are not material. An order and revised customer rates are expected by mid-2019. Duke Energy Progress cannot predict the outcome of this matter.



~~FINANCIAL STATEMENTS~~	~~REGULATORY MATTERS~~

Western Carolinas Modernization Plan

On November 4, 2015, Duke Energy Progress announced a Western Carolinas Modernization Plan, which included retirement of the existing Asheville coal-fired plant, the construction of two 280‑MW combined-cycle natural gas plants having dual-fuel capability, with the option to build a third natural gas simple cycle unit in 2023 based upon the outcome of initiatives to reduce the region's power demand. The plan also included upgrades to existing transmission lines and substations, installation of solar generation and a pilot battery storage project. ~~These investments will be made within the next seven years.~~

Duke Energy Progress ~~worked with~~retired the ~~local natural gas distribution company~~376-MW Asheville coal-fired plant on January 29, 2020, at which time the net book value, including associated ash basin closure costs, of $214 million was transferred from Generation facilities to ~~upgrade an existing natural gas pipeline~~be retired, net to ~~serve~~Regulatory assets within Current Assets and Other Noncurrent Assets on the ~~natural gas plant. The lease became effective on March 2, 2019.~~Condensed Consolidated Balance Sheets.

On March 28, 2016, the NCUC issued an order approving a ~~CPCN~~Certificate of Public Convenience and Necessity (CPCN) for the new combined-cycle natural gas plants with an estimated cost of $893 million, but ~~denying the CPCN for the contingent simple cycle unit without prejudice to~~required Duke Energy Progress to refile for CPCN approval for the contingent simple cycle unit.

On December 27, 2019, Asheville Combined Cycle Power Block 1 and the common systems that serve both combined cycle units went into commercial operation. Power Block 1 consists of the Unit 5 Combustion Turbine and Unit 6 Steam Turbine Generator (which together form the first combined cycle unit approved in the ~~future. On March 28, 2018,~~CPCN Order). Power Block 2 consists of the Unit 7 Combustion Turbine and Unit 8 Steam Turbine Generator (which together form the second combined cycle unit approved in the CPCN Order). Duke Energy Progress ~~filed an annual progress report for~~placed the ~~construction~~Unit 7 Combustion Turbine portion of ~~the combined-cycle plants with the NCUC, with an estimated cost of $893 million. Site preparation activities for the combined-cycle plants are complete and construction of these plants began~~Power Block 2 into commercial operation in ~~2017, with an expected in-service date in late 2019.~~simple-cycle mode on January 15, 2020. The Unit 8 Steam Turbine Generator went into commercial operation on April 5, 2020.

On October 8, 2018, Duke Energy Progress filed an application with the NCUC for a CPCN to construct the Hot Springs Microgrid Solar and Battery Storage Facility. ~~On November 30, 2018, the NCUC issued an order scheduling hearings, requiring filing of testimony, establishing discovery guidelines and requiring public notice.~~ On February 7, 2019, Duke Energy Progress made a joint filing with the Public Staff, which accepted the Public Staff’s proposed conditions and requested that the NCUC cancel the evidentiary hearing. On February 19, 2019, the NCUC granted the request to cancel the hearing. On March 22, 2019, Duke Energy Progress and the Public Staff filed a Joint Proposed Order. On May 10, 2019, the NCUC issued an Order ~~now pending before the NCUC.~~ Granting Certificate of Public Convenience and Necessity with Conditions. On November 19, 2019, Duke Energy Progress ~~cannot predict~~filed a semiannual progress report for its Hot Springs Microgrid Solar and Battery Storage Facility. As required by an NCUC order issued December 6, 2019, an updated progress report was filed on January 15, 2020. An evidentiary hearing was held on March 5, 2020. Construction is expected to begin in the ~~outcome~~second quarter of ~~this matter.~~2020 with commercial operation expected to begin in December 2020.

The carrying value of the 376-MW Asheville coal-fired plant, including associated ash basin closure costs, of $302 million and $327 million is included in Generation facilities to be retired, net on Duke Energy Progress' Condensed Consolidated Balance Sheets as of March 31, 2019, and December 31, 2018, respectively. Duke Energy Progress' request for a regulatory asset at the time of retirement with amortization over a 10-year period was approved by the NCUC on February 23, 2018.



FINANCIAL STATEMENTS	REGULATORY MATTERS

Duke Energy Florida

COVID-19 Filings

On March 1, 2020, Governor Ron DeSantis issued Executive Order No. 20-51 directing the State Health Officer of Florida to declare a public health emergency in Florida related to the COVID-19 pandemic. The governor then issued a second Executive Order No. 20-52 on March 9, 2020, in which he declared a state of emergency in Florida and directed the Director of the Division of Emergency Management to implement the state’s Comprehensive Emergency Management Plan. The governor issued additional Executive Orders – Nos. 2020-68, 2020-69, 2020-71, 2020-72 and 2020-83 – in response to the ongoing health care emergency that, among other things, suspended the in-person public meeting requirements for state agencies and local governments and directed the state surgeon general to issue public health advisories to limit potential exposure to COVID-19, advising against gatherings of 10 or more persons. On March 19, 2020, Duke Energy Florida filed a request to modify its tariff to allow it to waive late fees for customers, and on April 6, 2020, the FPSC issued an order approving the request. Duke Energy Florida had already voluntarily waived reconnect fees and credit card fees, and is not disconnecting customers for nonpayment. On April 2, 2020, Duke Energy Florida filed a petition with the FPSC to accelerate a $78 million fuel cost refund to customers in the month of May 2020. Typically, the refund would be made over the course of 2021. The FPSC approved the petition on April 28, 2020.

Storm Restoration Cost Recovery

In September 2017, Duke Energy Florida’s service territory suffered significant damage from Hurricane Irma, resulting in approximately 1 million customers experiencing outages. In the fourth quarter of 2017, Duke Energy Florida also incurred preparation costs related to Hurricane Nate. On December 28, 2017, Duke Energy Florida filed a petition with the FPSC to recover incremental storm restoration costs for Hurricane Irma and Hurricane Nate and to replenish the storm reserve. On February 6, 2018, the FPSC approved a stipulation that would apply tax savings resulting from the Tax Act toward storm costs effective January 2018 in lieu of implementing a storm surcharge. Storm costs are currently expected to be fully recovered by approximately mid-2021. On May 31, 2018, Duke Energy Florida filed a petition for approval of actual storm restoration costs and associated recovery process related to Hurricane Irma and Hurricane Nate. The petition sought the approval for the recovery in the amount of $510 million in actual recoverable storm restoration costs, including the replenishment of Duke Energy Florida’s storm reserve of $132 million, and the process for recovering these recoverable storm costs. On August 20, 2018, the FPSC approved Duke Energy Florida's unopposed Motion for Continuance filed August 17, 2018, to allow for an evidentiary hearing in this matter. On January 28, 2019, Duke Energy Florida made a supplemental filing to reduce the total storm cost recovery from $510 million to $508 million. On April 3, 2019, the FPSC issued an Order abating all remaining filing dates. On April 9, 2019, Duke Energy Florida filed an unopposed motion to approve a settlement agreement resolving all outstanding issues in this docket. The FPSC has scheduled the hearing to begin on May 21, 2019, to consider the Storm Cost Settlement Agreement filed with the FPSC. If approved, the Storm Cost Settlement Agreement would obligate Duke Energy Florida to capitalize $18 million of storm costs and remove $6 million of operating and maintenance expense, thereby reducing the requested storm cost recovery amount by $24 million. Duke Energy Florida will also implement process changes with respect to storm cost restoration. At March 31, 2019, and December 31, 2018, Duke Energy Florida's Condensed Consolidated Balance Sheets included approximately $157 million and $217 million, respectively, of recoverable costs under the FPSC's storm rule in Regulatory assets within Current Assets and Other Noncurrent Assets related to storm recovery for Hurricane Irma and Hurricane Nate. Duke Energy Florida cannot predict the outcome of this matter.

In October 2018, Duke Energy Florida’s service territory suffered damage when Hurricane Michael made landfall as a ~~strong~~ Category 5 hurricane with maximum sustained winds of 160 mph. The storm caused catastrophic damage from wind and storm surge, particularly from Panama City Beach to Mexico Beach, resulting in widespread outages and significant damage to transmission and distribution facilities across the central Florida Panhandle. In response to Hurricane Michael, Duke Energy Florida restored service to approximately 72,000 customers. Total ~~current~~ estimated incremental operation and maintenance and capital costs are ~~$360~~$311 million. Approximately ~~$70~~$106 million and ~~$35~~$107 million of the costs are included in Net property, plant and equipment on the Condensed Consolidated Balance Sheets as of March 31, ~~2019,~~2020, and December 31, ~~2018,~~2019, respectively. Approximately ~~$213~~$205 million and ~~$165~~$204 million of costs ~~represent recoverable costs under the FPSC’s storm rule and Duke Energy Florida's Open Access Transmission Tariff formula rates and~~ are included in Regulatory assets within Current Assets and Other Noncurrent Assets on the Condensed Consolidated Balance Sheets as of March 31, ~~2019,~~2020, and December 31, ~~2018, respectively. Additional~~2019, respectively, representing recoverable costs ~~could be incurred in 2019 related to this fourth quarter 2018 storm.~~under the FPSC’s storm rule and Duke Energy Florida's OATT formula rates.

Duke Energy Florida filed a petition with the FPSC on April 30, 2019, to recover the retail portion of estimated incremental storm restoration costs for Hurricane Michael. On June 11, 2019, the FPSC approved the petition for recovery of estimated incremental storm restoration costs related to Hurricane Michael. The ~~estimated recovery amount is approximately $221 million to be recovered over a 12-month period beginning in July 2019, subject to true up through~~FPSC also approved the ~~Storm Surcharge consistent with the provisions of the 2017 Settlement. Concurrently,~~stipulation Duke Energy Florida filed, ~~for approval a stipulation that would apply~~which will allow Duke Energy Florida to use the tax savings resulting from the Tax Act ~~toward~~to recover these storm costs in lieu of implementing a storm surcharge. ~~Storm~~Approved storm costs are currently expected to be fully recovered by approximately year-end 2021. On November 22, 2019, Duke Energy Florida filed a petition for approval of actual retail recoverable storm restoration costs related to Hurricane Michael in the amount of $191 million plus interest. An Order Establishing Procedure was issued on January 30, 2020, and hearings are scheduled to begin September 15, 2020. Duke Energy Florida cannot predict the outcome of this matter.

Hurricane Dorian



~~FINANCIAL STATEMENTS~~	~~REGULATORY MATTERS~~

~~Tax Act~~

~~Pursuant~~In September 2019, Duke Energy Florida’s service territory was threatened by Hurricane Dorian with landfall as a possible Category 5 hurricane. For several days, various forecasts and models predicted significant impact to Duke Energy ~~Florida's 2017 Settlement, on May 31, 2018,~~Florida’s service territory; accordingly, Duke Energy Florida incurred costs to secure necessary resources to be prepared for that potential impact. Although Hurricane Dorian never made landfall in Florida, its effects were still felt, and outages did occur. Preparations were required so that, if Hurricane Dorian had made landfall and impacts had been more severe, Duke Energy Florida would have been prepared to restore its customers’ power in a timely fashion.

On December 19, 2019, Duke Energy Florida filed a petition ~~related~~with the FPSC to recover $169 million, the ~~Tax Act, which included revenue requirement impacts~~estimated retail portion of annual tax savings of $134 million and estimated annual amortization of EDIT of $67 million for a total of $201 million. Of this amount, $50 million would be offset by accelerated depreciation of Crystal River 4 and 5 coal units and an estimated $151 million would be offset by Hurricane Irma storm cost recovery as explainedthese costs, consistent with the provisions in the ~~Storm Restoration Cost Recovery section above.~~2017 Settlement. On ~~December 27, 2018, Duke Energy Florida~~February 24, 2020, the commission approved the request for recovery over a 12-month period with rates effective in March 2020 and subject to true up. The final actual amount will be filed ~~actual EDIT balances~~later in 2020 and amortization based on its 2017 filed tax return. This increased the revenue requirement impact of the amortization of EDIT by $4 million, from $67 million to $71 million, which increased the total storm amortization from $151 million to $155 million. On January 8, 2019, the FPSC ~~approved~~will hold a ~~joint motion by Duke Energy Florida and~~hearing to determine the ~~Office~~final amount of Public Counsel resolving all stipulated positions. As part of that stipulation, Duke Energy Florida agreed to seek a Private Letter Ruling (PLR) from the IRS on its treatment of cost of removal (COR) as mostly protected by tax normalization rules. If the IRS rules that COR is not protected by tax normalization rules, then Duke Energy Florida will make a final adjustment to the amortization of EDIT and an adjustment to the storm recovery amount retroactive to January 2018. The IRS has communicated that it will not issue individual PLRs on the treatment of COR. Rather, the IRS is drafting a notice that will request comments on a number of issues, including COR, and the IRS plans to issue industrywide guidance on those issues.incremental costs. Duke Energy Florida cannot predict the outcome of this matter. Approximately $147 million and $167 million of these costs are included in Regulatory assets within Current Assets and Other Noncurrent Assets on the Condensed Consolidated Balance Sheets as of March 31, 2020, and December 31, 2019, respectively, representing recoverable costs under the FPSC’s storm rule and Duke Energy Florida's OATT formula rates.

Solar Base Rate Adjustment

On July 31, 2018, Duke Energy Florida petitioned the FPSC to include in base rates the revenue requirements for its first two solar generation projects, the Hamilton Project and the Columbia Project, as authorized by the 2017 Settlement. The Hamilton Project, which was placed into service on December 22, 2018, ~~has~~had an annual retail revenue requirement of $15 million and the increase was effective in January 2019. The Columbia Project has a projected annual revenue requirement of $14 million and a projected in-service date in early 2020; the associated rate increase would take place with the first month’s billing cycle after the Columbia Project goes into service.million. At its October 30, 2018, Agenda Conference, the FPSC approved the rate increase related to the Hamilton Project to go into effect beginning with the first billing cycle in January 2019 under its file and suspend ~~authority.~~authority, and revised customer rates became effective in January 2019. On April 2, 2019, the commission approved both solar projects as filed. The Columbia Project, which has a projected annual revenue requirement of $14 million, was placed in service in March 2020 and revised customer rates became effective in April 2020.

On March 25, 2019, Duke Energy Florida petitioned the FPSC to include in base rates the revenue requirements for its next wave of solar generation projects, the Trenton, Lake Placid and DeBary Solar Projects, as authorized by the 2017 Settlement. The annual retail revenue requirement for the Trenton and Lake Placid Projects iswas $13 million and $8 million, respectively, and they were placed into service in December 2019 with ~~projected in-service dates~~rates taking effect in ~~the fourth quarter of 2019.~~January 2020. The DeBary Project has a projected annual revenue requirement of $11 million and a projected in-service date in the ~~first~~second quarter of 2020. The associated rate increase would take place with the first month’s billing cycle after each solar generation project goes into service. On July 22, 2019, the FPSC issued an order approving Duke Energy Florida's request.



FINANCIAL STATEMENTS	REGULATORY MATTERS

Crystal River Unit 3 Accelerated Decommissioning Filing

On May 29, 2019, Duke Energy Florida entered into a Decommissioning Services Agreement for the accelerated decommissioning of the Crystal River Unit 3 nuclear power station located in Citrus County, Florida, with ADP CR3, LLC and ADP SF1, LLC, each of which is a wholly owned subsidiary of Accelerated Decommissioning Partners, LLC, a joint venture between NorthStar Group Services, Inc. and Orano USA LLC. Closing of this agreement is contingent upon the approval of the U.S. Nuclear Regulatory Commission (NRC) and FPSC. If approved, the decommissioning will be accelerated starting in 2020 and continuing through 2027, rather than the expected time frame under SAFSTOR of starting in 2067 and ending in 2074. Duke Energy Florida expects that the assets of the Nuclear Decommissioning Trust Fund will be sufficient to cover the contract price. On July 10, 2019, Duke Energy Florida petitioned the FPSC for approval of the agreement. On April 1, 2020, the NRC issued an order approving the license transfer application. Following the NRC order, on April 15, 2020, the FPSC issued its Second Order Modifying Order Establishing Procedure in which hearings are scheduled to begin July 7, 2020. Duke Energy Florida cannot predict the outcome of this matter.

Duke Energy Ohio

~~Tax Act –~~Duke Energy Ohio COVID-19 Filing

In response to the COVID-19 pandemic, on March 9, 2020, Governor Mike DeWine issued Executive Order No. 2020-01D declaring a state of emergency in the State of Ohio. The PUCO issued an order directing utilities to cease disconnections for nonpayment and waive late payment and reconnection fees and to minimize direct customer contact. The PUCO also directed utilities to maintain flexible payment plans and tariff interpretations to assist customers during this crisis and to seek any regulatory waivers, if necessary. In response, Duke Energy Ohio has ceased all disconnections except for safety-related concerns and is waiving late payment and reconnection fees. On March 19, 2020, Duke Energy Ohio filed its compliance plan with the PUCO and sought waiver of several regulations to minimize direct customer contact.

On ~~July 25, 2018,~~April 16, 2020, Duke Energy Ohio filed an application for a Reasonable Arrangement to ~~establish a new rider to implement~~temporarily lower the ~~benefits of the Tax Act~~minimum bill for ~~electric distribution~~demand-metered commercial and industrial customers. The ~~new rider will flow through to customers the benefit of the lower statutory federal tax rate from 35 to 21 percent since January 1, 2018, all future benefits of the lower tax rates and a~~proposal is conditioned on full refund of deferred income taxes collected at the higher tax rates in prior years. Deferred income taxes subject to normalization rules will be refunded consistent with federal law and deferred income taxes not subject to normalization rules will be refunded over a 10-year period.recovery via Duke Energy Ohio's transmission rates reflect lower federal income tax but guidance from FERC on amortization of both protected and unprotected transmission-related EDITs is still pending. On October 24, 2018, the PUCO issued a Finding and Order that, among other things, directed all utilities overexisting Economic Competitiveness Fund Rider (Rider ECF), which ~~the commission~~ has ~~rate-making authority to file an application to pass the benefits of the Tax Act to customers~~been used by January 1, 2019, unless otherwise exempted or directed by the PUCO. Duke Energy Ohio's July 25, 2018, filing for electric distribution operations is consistent with the commission's October 24, 2018, Finding and Order and no further action is needed. On February 20, 2019, the PUCO approved the application without material modification. Rates became effective March 1, 2019.

~~On December 21, 2018,~~ Duke Energy Ohio ~~filed an application to change its base rates and establish a new rider to implement~~in the ~~benefits~~past for other reasonable arrangements with customers. On April 24, 2020, the Staff of the ~~Tax Act for natural gas customers.~~PUCO filed its recommendation finding Duke Energy ~~Ohio requested commission approval to implement~~Ohio’s application is reasonable and that the changes and rider effective April 1, 2019. The new rider will flow through to customers the benefit of the lower statutory federal tax rate from 35 to 21 percent since January 1, 2018, all future benefits of the lower tax rates and a full refund of deferred income taxes collected at the higher tax rates in prior years. Deferred income taxes subject to normalization rules will be refunded consistent with federal law and deferred income taxes not subject to normalization rules will be refunded over a 10-year period. The PUCO ~~has not yet ruled on the application for changes for natural gas customers.~~should approve it. Duke Energy Ohio cannot predict the outcome of this matter.

On May 11, 2020, Duke Energy Ohio filed with the PUCO a request seeking deferral of incremental costs incurred, as well as specific miscellaneous lost revenues. The request seeks to use existing bad debts and uncollectible riders already in place for both electric and natural gas operations. Duke Energy Ohio would subsequently file for rider recovery at a later date. Duke Energy Ohio cannot predict the outcome of this matter.

Duke Energy Kentucky COVID-19

In response to the COVID-19 pandemic, on March 6, 2020, Governor Andy Beshear issued Executive Order No. 2020-215 declaring a state of emergency in the Commonwealth of Kentucky. The KPSC issued an order directing utilities to cease disconnections for nonpayment and waive late payment and reconnection fees. The KPSC also directed utilities to maintain flexible payment plans and tariff interpretations to assist customers during this crisis and to seek any regulatory waivers if necessary. Duke Energy Kentucky had already voluntarily ceased all disconnections except for safety-related concerns and was waiving late payment and reconnection fees.

2017 Electric Security Plan Filing

On June 1, 2017, Duke Energy Ohio filed with the PUCO a request for a standard service offer in the form of an ESP. On February 15, 2018, the procedural schedule was suspended to facilitate ongoing settlement discussions. On April 13, 2018, Duke Energy Ohio filed a Motion to consolidate this proceeding with several other cases pending before the PUCO, including, but not limited to, its Electric Base Rate Case. Additionally, on April 13, 2018, Duke Energy Ohio, along with certain intervenors, filed a Stipulation and Recommendation (Stipulation) with the PUCO resolving certain issues in this proceeding. The term of the ESP would be from June 1, 2018, to May 31, 2025, and included continuation of market-based customer rates through competitive procurement processes for generation, continuation and expansion of existing rider mechanisms and proposed new rider mechanisms relating to regulatory mandates, costs incurred to enhance the customer experience and transform the grid and a service reliability rider for vegetation management. The Stipulation established a regulatory model for the next seven years via the approval of the ESP and continued the current model for procuring supply for non-shopping customers, including recovery mechanisms. On December 19, 2018, the PUCO approved the Stipulation without material modification. Several parties, including the Office of the Ohio Consumers' Counsel (OCC), filed applications for rehearing. On February 6, 2019, the PUCO granted the parties rehearing. The PUCO issued its Second Entry on Rehearing on July 17, 2019, upholding its December 19, 2018 order and denying all assignments of error raised by the non-stipulating parties. On October 11, 2019, the OCC filed its Third Application for Rehearing arguing the PUCO erred in finding OCC’s Second Application for Rehearing as improper. Duke Energy Ohio filed its Memorandum Contra on October 21, 2019. The PUCO denied OCC's Third Application for Rehearing as a matter of law. On September 13, 2019, Interstate Gas Supply/Retail Supply Association filed appeals to the Supreme Court of Ohio claiming the PUCO’s order was in error because it approved unsupported charges to competitive suppliers and cost subsidies shopping customers pay for non-shopping customers. On September 16, 2019, the OCC filed an appeal challenging the PUCO’s approval of OVEC recovery through Duke Energy Ohio's Price Stability Rider (Rider PSR) alleging the FPA pre-empts the commission’s jurisdiction and that the record does not support finding that Rider PSR results in a limitation on shopping. Appellant briefs were filed on January 6, 2020. Appellee briefs were scheduled to be filed on March 16, 2020. On March 13, 2020, the Supreme Court of Ohio granted OCC's motion to withdraw its appeal related to OVEC recovery. On April 22, 2020, the Supreme Court of Ohio dismissed all remaining appeals of PUCO's December 19, 2018 order approving the stipulation. The case has been resolved.



FINANCIAL STATEMENTS	REGULATORY MATTERS

Electric Base Rate Case

Duke Energy Ohio filed with the PUCO an electric distribution base rate case application and supporting testimony in March 2017. Duke Energy Ohio requested an estimated annual increase of approximately $15 million and a return on equity of 10.4%. The application also included requests to continue certain current riders and establish new riders. On September 26, 2017, the PUCO staff filed a report recommending a revenue decrease between approximately $18 million and $29 million and a return on equity between 9.22% and 10.24%. On April 13, 2018, Duke Energy Ohio filed a Motion to consolidate this proceeding with several other cases pending before the PUCO. On April 13, 2018, Duke Energy Ohio, along with certain intervenors, filed the Stipulation with the PUCO resolving numerous issues including those in this base rate proceeding. Major components of the Stipulation related to the base distribution rate case included a $19 million decrease in annual base distribution revenue with a return on equity unchanged from the current rate of 9.84% based upon a capital structure of 50.75% equity and 49.25% debt. Upon approval of new rates, Duke Energy Ohio's rider for recovering its initial SmartGrid implementation ended as these costs would be recovered through base rates. The Stipulation also renewed 14 existing riders, some of which were included in the company's ESP, and added two new riders including the Enhanced Service Reliability Rider to recover vegetation management costs not included in base rates, up to $10 million per year (operation and maintenance only) and the PowerForward Rider to recover costs incurred to enhance the customer experience and further transform the grid (operation and maintenance and capital). In addition to the changes in revenue attributable to the Stipulation, Duke Energy Ohio’s capital-related riders, including the Distribution Capital Investments Rider, began to reflect the lower federal income tax rate associated with the Tax Act with updates to customers’ bills beginning April 1, 2018. This change reduced electric revenue by approximately $20 million on an annualized basis. On December 19, 2018, the PUCO approved the Stipulation without material modification. New base rates were implemented effective January 2, 2019. Several parties, including the OCC, filed applications for rehearing. On February 6, 2019, the PUCO granted the parties rehearing. The PUCO issued its Second Entry on Rehearing on July 17, 2019, upholding its December 19, 2018 order and denying all assignments of error raised by the non-stipulating parties. On October 11, 2019, the OCC filed its Third Application for Rehearing arguing the PUCO erred in finding OCC’s Second Application for Rehearing as improper. Duke Energy Ohio filed its Memorandum Contra on October 21, 2019. The PUCO denied OCC's Third Application for Rehearing as a matter of law. On September 13, 2019, Interstate Gas Supply/Retail Supply Association filed appeals to the Supreme Court of Ohio claiming the PUCO’s order was in error because it approved unsupported charges to competitive suppliers and cost subsidies shopping customers pay for non-shopping customers. On September 16, 2019, the OCC filed an appeal challenging the PUCO’s approval of OVEC recovery through Rider PSR alleging the FPA pre-empts the commission’s jurisdiction and that the record does not support finding that Rider PSR results in a limitation on shopping. Appellant briefs were filed on January 6, 2020. Appellee briefs were scheduled to be filed on March 16, 2020. On March 13, 2020, the Supreme Court of Ohio granted OCC's motion to withdraw its appeal related to OVEC recovery. On April 22, 2020, the Supreme Court of Ohio dismissed all remaining appeals of PUCO's December 19, 2018 order approving the stipulation. The case has been resolved.

Ohio Valley Electric Corporation

On March 31, 2017, Duke Energy Ohio filed for approval to adjust its existing Rider PSR to pass through net costs related to its contractual entitlement to capacity and energy from the generating assets owned by OVEC. Duke Energy Ohio sought deferral authority for net costs incurred from April 1, 2017, until the new rates under Rider PSR were put into effect. On April 13, 2018, Duke Energy Ohio filed a Motion to consolidate this proceeding with several other cases currently pending before the PUCO. Also, on April 13, 2018, Duke Energy Ohio, along with certain intervenors, filed a Stipulation with the PUCO resolving numerous issues including those related to Rider PSR. The Stipulation activated Rider PSR for recovery of net costs incurred from January 1, 2018, through May 2025. On December 19, 2018, the PUCO approved the Stipulation without material modification. The PSR rider became effective April 1, 2019. Several parties, including the OCC, filed applications for rehearing. On February 6, 2019, the PUCO granted the parties rehearing. The PUCO issued its Second Entry on Rehearing on July 17, 2019, upholding its December 19, 2018 order and denying all assignments of error raised by the non-stipulating parties. On October 11, 2019, the OCC filed its Third Application for Rehearing arguing the PUCO erred in finding OCC’s Second Application for Rehearing as improper. Duke Energy Ohio filed its Memorandum Contra on October 21, 2019. The PUCO denied OCC's Third Application for Rehearing as a matter of law. On September 13, 2019, Interstate Gas Supply/Retail Supply Association filed appeals to the Supreme Court of Ohio claiming the PUCO’s order was in error because it approved unsupported charges to competitive suppliers and cost subsidies shopping customers pay for non-shopping customers. On September 16, 2019, the OCC filed an appeal challenging the PUCO’s approval of OVEC recovery through Rider PSR alleging the FPA pre-empts the commission’s jurisdiction and that the record does not support finding that Rider PSR results in a limitation on shopping. Appellant briefs were filed on January 6, 2020. Appellee briefs were scheduled to be filed on March 16, 2020. On March 13, 2020, the Supreme Court of Ohio granted OCC's motion to withdraw its appeal related to OVEC recovery. On April 22, 2020, the Supreme Court of Ohio dismissed all remaining appeals of PUCO's December 19, 2018 order approving the stipulation. The case has been resolved.

On July 23, 2019, an Ohio bill was signed into law that became effective January 1, 2020. Among other things, the bill allows for recovery of prudently incurred costs, net of any revenues, for Ohio investor-owned utilities that are participants under the OVEC power agreement. The recovery shall be through a non-bypassable rider that is to replace any existing recovery mechanism approved by the PUCO and will remain in place through 2030. The amounts recoverable from customers will be subject to an annual cap, with incremental costs that exceed such cap eligible for deferral and recovery subject to review. See Note 13 for additional discussion of Duke Energy Ohio's ownership interest in OVEC.



FINANCIAL STATEMENTS	REGULATORY MATTERS

Energy Efficiency Cost Recovery

On March 28, 2014, Duke Energy Ohio filed an application for recovery of program costs, lost distribution revenue and performance incentives related to its energy efficiency and peak demand reduction programs. These programs are undertaken to comply with environmental mandates set forth in Ohio law. The PUCO approved Duke Energy Ohio’s application but found that Duke Energy Ohio was not permitted to use banked energy savings from previous years in order to calculate the amount of allowed incentive. This conclusion represented a change to the cost recovery mechanism that had been agreed upon by intervenors and approved by the PUCO in previous cases. The PUCO granted the applications for rehearing filed by Duke Energy Ohio and an intervenor. On January 6, 2016, Duke Energy Ohio and the PUCO Staff entered into a stipulation, pending the PUCO's approval, to resolve issues related to performance incentives and the PUCO Staff audit of 2013 costs, among other issues. In December 2015, based upon the stipulation, Duke Energy Ohio re-established approximately $20 million of the revenues that had been previously reversed. On October 26, 2016, the PUCO issued an order approving the stipulation without modification. In December 2016, the PUCO granted the intervenors request for rehearing for the purpose of further review. On April 10, 2019, the PUCO issued an Entry on Rehearing denying the rehearing applications.



~~FINANCIAL STATEMENTS~~	~~REGULATORY MATTERS~~

On February 26, 2020, the PUCO issued an order directing utilities to wind down their demand-side management programs by September 30, 2020, and to terminate the programs by December 31, 2020, in response to changes in Ohio law that eliminated Ohio's energy efficiency mandates. On March 27, 2020, Duke Energy Ohio filed an Application for Rehearing seeking clarification on the final true-up and reconciliation process after 2020. On April 22, 2020, the PUCO granted rehearing for further consideration.

On June 15, 2016, Duke Energy Ohio filed an application for approval of a three-year energy efficiency and peak demand reduction portfolio of programs. A stipulation and modified stipulation were filed on December 22, 2016, and January 27, 2017, respectively. Under the terms of the stipulations, which included support for deferral authority of all costs and a cap on shared savings incentives, Duke Energy Ohio has offered its energy efficiency and peak demand reduction programs throughout 2017. On February 3, 2017, Duke Energy Ohio filed for deferral authority of its costs incurred in 2017 in respect of its proposed energy efficiency and peak demand reduction portfolio. On September 27, 2017, the PUCO issued an order approving a modified stipulation. The modifications impose an annual cap of approximately $38 million on program costs and shared savings incentives combined, but allowed for Duke Energy Ohio to file for a waiver of costs in excess of the cap in 2017. The PUCO approved the waiver request for 2017 up to a total cost of $56 million. On November 21, 2017, the PUCO granted Duke Energy Ohio's and intervenor's applications for rehearing of the September 27, 2017, order. On January 10, 2018, the PUCO denied the ~~Ohio Consumers' Counsel’s~~OCC's application for rehearing of the PUCO order granting Duke Energy Ohio's waiver request; however, a decision on Duke Energy Ohio's application for rehearing remains pending. Duke Energy Ohio cannot predict the outcome of this matter.

~~2014 Electric Security Plan~~

In April 2015, the PUCO modified and approved Duke Energy Ohio's proposed ESP, with a three-year term and an effective date of June 1, 2015. The PUCO approved a competitive procurement process for SSO load, a distribution capital investment rider (Rider DCI) and a tracking mechanism for incremental distribution expenses caused by major storms. The PUCO also approved a placeholder tariff for a price stabilization rider, but denied Duke Energy Ohio's specific request to include Duke Energy Ohio's entitlement to generation from OVEC in the rider at this time; however, the order allows Duke Energy Ohio to submit additional information to request recovery in the future. On May 4, 2015, Duke Energy Ohio filed an application for rehearing requesting the PUCO to modify or amend certain aspects of the order. On May 28, 2015, the PUCO granted all applications for rehearing filed in the case for future consideration. On March 21, 2018, the PUCO issued an order denying Duke Energy Ohio's issues on rehearing. On April 20, 2018, Duke Energy Ohio filed a second application for rehearing based upon the commission’s March 21, 2018, Order. On May 16, 2018, the commission issued its third Entry on Rehearing granting in part, and denying in part, Duke Energy Ohio’s rehearing request.

On March 9, 2018, Duke Energy Ohio filed a motion to extend its then-current ESP, including all terms and conditions thereof, pending approval of a new ESP. On May 30, 2018, the PUCO granted the request, with modification. Specifically, the PUCO did not extend the cap applicable to Rider DCI beyond July 31, 2018. Duke Energy Ohio sought rehearing of this finding. On July 25, 2018, the PUCO granted the request and allowed a continuing cap on recovery under Rider DCI. On August 24, 2018, the Ohio Manufacturers' Association (OMA) and the Office of the Ohio Consumers' Counsel (OCC) filed an Application for Rehearing of the commission's decision. Duke Energy Ohio filed a Memorandum Contra OCC's request for rehearing of the commission's continuation of Rider DCI on September 4, 2018. On September 19, 2018, the PUCO issued an Order granting rehearing on the matter for further consideration. On April 3, 2019, the PUCO issued its Fourth Entry on Rehearing denying the rehearing of OCC and OMA and upholding its decision to continue Rider DCI. Further applications for rehearing or notices of appeal are due in 60 days. Duke Energy Ohio cannot predict the outcome of this matter.

On May 21, 2018, the OMA filed a notice of appeal of PUCO's approval of Duke Energy Ohio’s ESP with the Ohio Supreme Court, challenging PUCO's approval of Duke Energy Ohio’s Price Stability Rider as a placeholder and its Rider DCI to recover incremental revenue requirement for distribution capital since Duke Energy Ohio’s last base rate case. On July 16, 2018, the OCC filed its own appeal of Duke Energy Ohio’s ESP with the Ohio Supreme Court raising similar issues to that of the OMA. Duke Energy Ohio filed a Motion to Intervene in the two Ohio Supreme Court appeals. OMA's Supreme Court brief was filed on August 20, 2018. PUCO submitted its brief on October 26, 2018, and Duke Energy Ohio filed its brief on October 29, 2018. The OCC’s Supreme Court brief was filed on October 15, 2018. Duke Energy Ohio filed its brief on December 20, 2018. The PUCO submitted its brief on December 21, 2018. The Ohio Supreme Court issued an order on March 13, 2019, for the appellants to show cause why the appeals should not be dismissed as moot in light of the commission’s approval of Duke Energy Ohio’s current ESP. OCC and OMA made the requested filings on March 20, 2019, and Duke Energy Ohio filed its response on March 27, 2019. On May 8, 2019, the Ohio Supreme Court dismissed the appeals as moot.

Natural Gas Pipeline Extension

Duke Energy Ohio is proposing to install a new natural gas pipeline (the Central Corridor Project) in its Ohio service territory to increase system reliability and enable the retirement of older infrastructure. Duke Energy Ohio currently estimates the pipeline development costs and construction activities will range from $163 million to $245 million in direct costs (excluding overheads and AFUDC). On January 20, 2017, Duke Energy Ohio filed an amended application with the Ohio Power Siting Board (OPSB) for approval of one of two proposed routes. A public hearing was held on June 15, 2017. In April 2018, Duke Energy Ohio filed a motion with OPSB to establish a procedural schedule and filed supplemental information supporting its application. On December 18, 2018, the OPSB established a procedural schedule that included a local public hearing on March 21, 2019. An evidentiary hearing began on April 9, 2019, and concluded on April 11, 2019. Briefs ~~are due~~were filed on May 13, 2019, ~~with~~and reply briefs ~~due~~were filed on June 10, 2019. IfOn November 21, 2019, the OPSB approved ~~construction~~Duke Energy Ohio's application subject to 41 conditions on construction. Applications for rehearing were filed by several stakeholders on December 23, 2019, arguing that the OPSB approval was incorrect. Duke Energy Ohio filed a memorandum contra on January 2, 2020. On February 20, 2020, the OPSB denied the rehearing requests. Construction of the pipeline extension is expected to be completed before the 2021/2022 winter season. On April 15, 2020, Joint Appellants filed a notice of appeal at the Supreme Court of Ohio of the OPSB’s decision approving Duke Energy Ohio’s Central Corridor application. On April 16, 2020, several of the Joint Appellants filed a motion for a Stay asking the court to suspend the OPSB’s order. On April 27, 2020, Duke Energy Ohio and the OPSB each filed a motion in opposition to the Stay. If the Stay is granted, Duke Energy Ohio cannot continue working during the appeal process. Duke Energy Ohio cannot predict the outcome of this matter.



~~FINANCIAL STATEMENTS~~	~~REGULATORY MATTERS~~

2012 Natural Gas Rate Case/MGP Cost Recovery

As part of its 2012 natural gas base rate case, Duke Energy Ohio has approval to defer and recover costs related to environmental remediation at two sites (East End and West End) that housed former MGP operations. Duke Energy Ohio has made annual applications for recovery of these deferred costs. Duke Energy Ohio ~~is currently recovering~~has collected approximately $55 million in environmental remediation costs between 2009 through 2012 through a separate rider, Rider ~~MGP.~~MGP, which is currently suspended. Duke Energy Ohio has made annual applications with the PUCO to recover its incremental remediation costs consistent with the PUCO’s directive in Duke Energy Ohio’s 2012 natural gas rate case. To date, the PUCO has not ruled on Duke Energy Ohio’s annual applications for the calendar years 2013 through 2017. On September 28, 2018, the staff of the PUCO issued a report recommending a disallowance of approximately $12 million of the $26 million in MGP remediation costs incurred between 2013 through 2017 that staff believes are not eligible for recovery. Staff interprets the PUCO’s 2012 Order granting Duke Energy Ohio recovery of MGP remediation as limiting the recovery to work directly on the East End and West End sites. On October 30, 2018, Duke Energy Ohio filed reply comments objecting to the staff’s recommendations and explaining, among other things, the obligation Duke Energy Ohio has under Ohio law to remediate all areas impacted by the former MGPs and not just physical property that housed the former plants and equipment. To date, the PUCO has not ~~issued a procedural schedule and has not~~ ruled on Duke Energy Ohio’s applications. On March 29, 2019, Duke Energy Ohio filed its annual application to recover incremental remediation expense for the calendar year ~~2018.~~2018 seeking recovery of approximately $20 million in remediation costs. On July 12, 2019, the staff recommended a disallowance of approximately $11 million for work that staff believes occurred in areas not authorized for recovery. Additionally, staff recommended that any discussion pertaining to Duke Energy Ohio's recovery of ongoing MGP costs should be directly tied to or netted against insurance proceeds collected by Duke Energy Ohio. An evidentiary hearing began on November 18, 2019, and concluded on November 21, 2019. Initial briefs were filed on January 17, 2020, and reply briefs were filed on February 14, 2020. Duke Energy Ohio cannot predict the outcome of this matter.



FINANCIAL STATEMENTS	REGULATORY MATTERS

On March 31, 2020, Duke Energy Ohio filed its annual application to recover incremental remediation expense for the calendar year 2019 seeking recovery of approximately $39 million in remediation costs incurred during 2019. Duke Energy Ohio cannot predict the outcome of this matter.

The 2012 PUCO order also contained conditional deadlines for completing the MGP environmental investigation and remediation costs at the MGP sites. Subsequent to the order, the deadline was extended to December 31, 2019. On May 10, 2019, Duke Energy Ohio filed an application requesting a continuation of its existing deferral authority for MGP remediation and investigation that must occur after December 31, 2019. On September 13, 2019, intervenor comments were filed opposing Duke Energy Ohio's request for continuation of existing deferral authority and on October 2, 2019, Duke Energy Ohio filed reply comments. Duke Energy Ohio cannot predict the outcome of this matter.

Duke Energy Kentucky ~~Natural Gas~~Electric Base Rate Case

On ~~August 31, 2018,~~September 3, 2019, Duke Energy Kentucky filed ~~an application~~a rate case with the KPSC requesting an increase in ~~natural gas~~electric base rates of approximately ~~$11~~$46 million, which represents an approximate ~~11.1 percent average~~12.5% increase across all customer classes. The request for rate increase ~~was net of approximately $5 million~~is driven by increased investment in ~~annual savings as~~utility plant since the last electric base rate case in 2017. Duke Energy Kentucky seeks to implement a ~~result of the Tax Act. The drivers~~Storm Deferral Mechanism that will enable Duke Energy Kentucky to defer actual costs incurred for ~~this case~~major storms that are ~~capital invested since~~over or under amounts in base rates. In response to large customers’ desire to have access to renewable resources, Duke Energy Kentucky is proposing a Green Source Advantage tariff designed for those large customers that wish to invest in renewable energy resources to meet sustainability goals. Duke Energy Kentucky is proposing an electric vehicle (EV) infrastructure pilot and modest incentives to assist customers in investing in EV technologies. Additionally, Duke Energy Kentucky is proposing to build an approximate 3.4-MW distribution battery energy storage system to be attached to Duke Energy Kentucky’s ~~last rate case in 2009.~~distribution system providing frequency regulation and enhanced reliability to Kentucky customers. The commission issued a procedural schedule with two rounds of discovery and opportunities for intervenor and rebuttal testimony. The Kentucky Attorney General filed its testimony recommending an increase of approximately $26 million. On January 31, 2020, Duke Energy Kentucky ~~also sought implementation of~~filed rebuttal testimony updating its rate increase calculations to approximately $44 million. Hearings were held on February 19-20, 2020, with briefing completed March 20, 2020. On April 27, 2020, the KPSC issued its decision approving a ~~Weather Normalization Adjustment Mechanism, amortization of regulatory assets and to implement the impacts of the Tax Act, prospectively. On January 30, 2019,~~$24 million increase for Duke Energy Kentucky ~~entered into~~with a ~~settlement agreement with~~9.25% return on equity. The KPSC denied Duke Energy Kentucky’s major storm deferral mechanism and EV and battery storage pilots. The KPSC approved Duke Energy Kentucky’s Green Source Advantage tariff. New customer rates were effective on May 1, 2020. Duke Energy Kentucky is evaluating the ~~Attorney General~~order and whether to seek rehearing. Duke Energy Kentucky cannot predict the outcome of Kentucky, the only intervenor in the case. The settlement provided for an approximate $7 million increase in natural gas base revenue and approval of the proposed Weather Normalization Mechanism. A hearing was held on February 5, 2019. The commission issued its Order approving the settlement without material modification on March 27, 2019.this matter.

Duke Energy Indiana

~~FERC Transmission Return~~COVID-19

In response to the COVID-19 pandemic, on ~~Equity Complaint~~

~~Customer groups have filed with~~March 6, 2020, Governor Eric Holcomb issued Executive Order No. 20-02, which by law expired in 30 days unless extended, declaring a public health disaster emergency in the ~~FERC complaints against MISO and its transmission-owning members, including~~state of Indiana. On April 3, 2020, the governor then issued Executive Order No. 20-17 which renewed the public health disaster emergency declaration for an additional 30 days to May 5, 2020. On May 1, 2020, Executive Order No, 20-25 further renewed the public health disaster emergency an additional 30 days to June 4, 2020. All other Executive Orders issued since March 6, 2020, (Nos. 20-04 – 20-16) were renewed for the same 30-day period, provided they were supplements to Executive Order No. 20-02. Executive Order No. 20-05 was issued on March 19, 2020, requiring utilities in the state to suspend disconnections of utility service. Duke Energy Indiana ~~alleging, among other things, that the current base rate of~~had already voluntarily suspended all disconnections and is waiving late payment fees and check return ~~on equity earned by MISO transmission owners of 12.38 percent~~fees. The utility is ~~unjust and unreasonable. The complaints claim, among other things, that the current base rate of return on equity earned by MISO transmission owners should be reduced to 8.67 percent.~~ also waiving credit card fees for residential customers.

On January 5, 2015, the FERC issued an order accepting the MISO transmission owners' adder of 0.50 percent to the base rate of return on equity based on participation in an RTO subject to it being applied to a return on equity that is shown to be just and reasonable in the pending return on equity complaints. On December 22, 2015, the presiding FERC ALJ in the first complaint issued an Initial Decision in which the base rate of return on equity was set at 10.32 percent. On September 28, 2016, the Initial Decision in the first complaint was affirmed by FERC, but is subject to rehearing requests. On June 30, 2016, the presiding FERC ALJ in the second complaint issued an Initial Decision setting the base rate of return on equity at 9.70 percent. The Initial Decision in the second complaint is pending FERC review. On April 14, 2017, the D.C. Circuit Court, in ~~Emera Maine v. FERC~~, reversed and remanded certain aspects of the methodology employed by FERC to establish rates of return on equity. On October 16, 2018, FERC issued an order in response to the Emera remand proceeding proposing a new method for determining whether an existing return on equity is unjust and unreasonable, and a new process for determining a just and reasonable return on equity. On November 14, 2018, FERC directed parties to the MISO complaints to file briefs on how the new process for determining return on equity proposed in the Emera proceeding should be applied to the complaints involving the MISO transmission owners’ return on equity. Initial briefs were filed on February 13, 2019, and reply briefs were filed April 10, 2019.May 8, 2020, Duke Energy Indiana, ~~currently believes these matters will not have~~along with other Indiana utilities, filed a ~~material impact on its results~~request with the IURC for approval of ~~operations, cash flows~~deferral treatment for costs and ~~financial position.~~

~~Edwardsport Integrated Gasification Combined Cycle Plant~~

~~On September 20, 2018, Duke Energy Indiana,~~revenue reductions associated with the COVID-19 pandemic. The utilities requested initial deferral approval in July 2020, with individual subdockets for each utility to be established for consideration of utility-specific cost and revenue impacts, cost recovery timing and customer payment plans. The same day, the Indiana Office of Utility Consumer Counselor filed a petition asking the IURC to continue to suspend disconnections, allow the utilities accounting deferrals and require tacking of cost savings. Duke ~~Industrial Group~~Energy Indiana cannot predict the outcome of thIs matter.

2019 Indiana Rate Case

On July 2, 2019, Duke Energy Indiana filed a general rate case with the IURC, its first general rate case in 16 years, for a rate increase for retail customers of approximately $395 million. The request for rate increase is driven by strategic investments to generate cleaner electricity, improve reliability and ~~Nucor Steel –~~serve a growing customer base. The request is premised upon a Duke Energy Indiana ~~entered into a settlement agreement to resolve IGCC ratemaking issues for calendar years~~rate base of $10.2 billion as of December 31, 2018, and ~~2019.~~adjusted for projected changes through December 31, 2020. On September 9, 2019, Duke Energy Indiana revised its revenue request from $395 million to $393 million and filed updated testimony for the Retail Rate Case. The ~~agreement~~updated filing reflects a clarification in the presentation of Utility Receipts Tax, a $2 million reduction in the revenue requirement for revenues that will remain in ~~effect until new~~riders and changes to allocation of revenue requirements within rate classes. The Utility Receipts Tax is currently embedded in base rates ~~are established~~and rider rates. The proposed treatment is to include the Utility Receipts Tax as a line item on the customer bill rather than included in ~~Duke Energy Indiana's next base~~rates. The request is an approximate 15% increase in retail revenues and approximately 17% when including estimated Utility Receipts Tax. The rebuttal case, filed on December 4, 2019, updated the requested revenue requirement to result in a 15.6% or $396 million average retail rate ~~case, which is~~increase, including the impacts of the Utility Receipts Tax. Hearings concluded on February 7, 2020, and rates are expected to be ~~filed~~effective mid-2020. Duke Energy Indiana cannot predict the outcome of these matters.

The IURC determined to take two issues out of the rate case and place them in ~~mid-2019 with rates effective in mid-2020. It addressed~~separate subdocket proceedings due to the ~~pending Edwardsport filing at~~complexity of the ~~commission and eliminated the need for future filings until the overall~~ rate case. The ~~settlement is subject~~commission moved the request for approval of an electric transportation pilot and future coal ash recovery issues to ~~IURC approval.~~separate subdockets. Coal ash expenditures prior to 2019 are still included in the rate case. Duke Energy Indiana filed testimony on April 15, 2020, in the coal ash subdocket requesting recovery for the post-2018 coal ash basin closure costs for plans that have been approved by the Indiana Department of Environmental Management as well as continuing deferral, with carrying costs, on the balance. An evidentiary hearing ~~was held in December 2018,~~is scheduled to begin on September 14, 2020, and an ~~IURC Order~~order is expected in ~~May 2019.~~the first quarter of 2021. Duke Energy Indiana cannot predict the outcome of this matter.



FINANCIAL STATEMENTS	REGULATORY MATTERS

Piedmont

COVID-19 Filings

North Carolina

On March 10, 2020, Governor Roy Cooper issued Executive Order No. 116 declaring a state of emergency due to the COVID-19 pandemic. In an effort to help mitigate the financial impacts of the COVID-19 pandemic on their customers, on March 19, 2020, Piedmont filed a request with the NCUC seeking authorization to waive: (1) any late payment charges incurred by a residential or nonresidential customer, effective March 21, 2020; (2) the application of fees for checks returned for insufficient funds for residential and nonresidential customers; (3) the reconnection charge when a residential or nonresidential customer seeks to have service restored for those customers whose service was recently disconnected for nonpayment and to work with customers regarding the other requirements to restore service, including re-establishment of credit; and (4) the fees and charges associated with the use of credit cards or debit cards to pay residential electric utility bills, effective March 21, 2020. The NCUC granted Piedmont’s request on March 20, 2020.

On March 31, 2020, the governor issued Executive Order No. 124, which, in addition to requiring the steps in the NCUC order noted above, stated that nothing in Executive Order No. 124 shall relieve a customer of its obligation to pay bills for receipt of utility services provided. Executive Order No. 124 remains in effect for 60 days unless otherwise rescinded or replaced with a superseding Executive Order.

South Carolina

On March 13, 2020, Governor Henry McMaster issued Executive Order No. 2020-08 declaring a state of emergency due to the COVID-19 pandemic. The governor also issued a letter on March 14, 2020, to the ORS Executive Director regarding the suspension of disconnection of essential utility services for nonpayment. On March 16, 2020, citing the governor’s letter, the ORS filed a request asking the PSCSC to grant waivers so that utilities could suspend disconnections of utility services for nonpayment. Piedmont supported such motion. On March 18, 2020, the PSCSC issued an order approving such waivers, and also approved waivers for regulations related to late fees and reconnect fees. The PSCSC's order also required utilities to track the financial impacts of actions taken pursuant to such waivers for possible reporting to the PSCSC.

On April 30, 2020, the ORS requested the PSCSC grant a waiver of the applicable regulations to allow customers the flexibility to obtain deferred payment plans longer than 6 months for past-due amounts. On May 5, 2020, Piedmont filed responsive comments stating that while utility bills will remain due, Piedmont does not plan to immediately reinstitute disconnection upon the expiration of the state of emergency and intends to work through a potential grace period as economic recovery begins. Piedmont also concurred with the observation of the ORS that reduced usage is impacting the fixed cost recovery and revenue assumptions included in rates. Those costs include not only ongoing operational and financing costs necessary to serve customers, but also the borrowings necessary to support extended payment arrangements that will be an important part of emerging from the COVID-19 pandemic. Piedmont will continue to track such costs, lost revenues and potential cost savings for future evaluation by the PSCSC.

Additionally, on May 8, 2020, the ORS filed a motion for the PSCSC to solicit comments from utilities and interested stakeholders regarding measures to be taken to mitigate impacts of COVID-19 on utility customers and require recordkeeping. In a detailed motion, the ORS specifically asked the PSCSC to: (1) solicit input from utilities regarding the temporary mitigation measures to address COVID-19; (2) request utilities to inform the PSCSC of the plans utilities have to return to normalized operations; (3) require utilities to track revenue impacts, incremental costs and savings related to COVID-19 and file the findings with the PSCSC on a quarterly basis; and (4) include any other matters that the PSCSC believes should be addressed. The ORS requests that such comments be filed within 30 days of a PSCSC order approving the motion. Piedmont cannot predict the outcome of this matter.

Tennessee

On March 12, 2020, Governor Bill Lee issued Executive Order No. 14 declaring a state of emergency due to the COVID-19 pandemic. In an effort to help mitigate the financial impacts of the COVID-19 pandemic on their customers, on March 20, 2020, Piedmont filed a request with the TPUC seeking authorization to waive, effective March 21, 2020: (1) any late payment charges incurred by a residential or nonresidential customer; (2) the application of fees for checks returned for insufficient funds for residential and nonresidential customers; and (3) the reconnection charge when a residential or nonresidential customer seeks to have service restored for those customers whose service was recently disconnected for nonpayment and to work with customers regarding the other requirements to restore service, including re-establishment of credit. The TPUC granted Piedmont’s request by Order issued March 31,2020. The Order also stated that customers were not relieved of their obligation to pay for utility services received.

North Carolina Integrity Management Rider Filing

In April 2020, Piedmont filed a petition with the NCUC under the IMR mechanism to collect an additional $15 million in annual revenues, effective June 2020, based on the eligible capital investments closed to integrity and safety projects over the six-month period ending March 31, 2020. Piedmont cannot predict the outcome of this matter.

Tennessee Integrity Management Rider Filing

In November ~~2018,~~2019, Piedmont filed a petition with the TPUC under the IMR mechanism to collect an additional $3$2 million in annual revenues, effective January ~~2019,~~2020, based on the eligible capital investments closed to integrity and safety projects over the 12-month period ending October 31, ~~2018. A~~2019. An evidentiary hearing occurred on May 11, 2020. Upon approval from the ~~matter was held on March 11, 2019, and a decision is expected in May 2019.~~TPUC, the revenue adjustment will be implemented, retroactive to January 2020. Piedmont cannot predict the outcome of this matter.



FINANCIAL STATEMENTS	REGULATORY MATTERS

~~2019 North Carolina Rate Case~~

On April 1, 2019, Piedmont filed an application with the NCUC, its first general rate case in North Carolina in six years, for a rate increase for retail customers of approximately $83 million, which represents an approximate 9 percent increase in retail revenues. The rate increase is driven by significant infrastructure upgrade investments (plant additions) since the last general rate case, offset by savings that customers will begin receiving due to federal and state tax reform. Approximately half of the plant additions being rolled into rate base are categories of plant investment not covered under the IMR mechanism, which was originally approved as part of the 2013 North Carolina Rate Case. Piedmont anticipates the NCUC will schedule the evidentiary hearing for late summer/early fall 2019, which would enable the rate change arising from this proceeding to take effect by the end of 2019. Piedmont cannot predict the outcome of this matter.

OTHER REGULATORY MATTERS

Atlantic Coast Pipeline, LLC

On September 2, 2014, Duke Energy, Dominion ~~Resources~~Energy, Inc. (Dominion), Piedmont and Southern Company Gas announced the formation of Atlantic Coast Pipeline, LLC (ACP) to build and own the proposed Atlantic Coast Pipeline (ACP pipeline), an approximately 600-mile interstate natural gas pipeline running from West Virginia to North Carolina. The ACP pipeline is designed to meet, in part, the needs identified by Duke Energy Carolinas, Duke Energy Progress and Piedmont. Dominion will be responsible for building and operating the ACP pipeline and holds a leading ownership percentage in ACP of ~~48 percent.~~53%, following the purchase in March 2020 of Southern Company Gas' 5% ownership interest. Duke Energy owns a ~~47 percent~~47% interest, which is accounted for as an equity method investment through its Gas Utilities and Infrastructure segment. ~~Southern Company Gas maintains a 5 percent interest.~~ See Note 1311 for additional information related to Duke Energy's ownership interest. Duke Energy Carolinas, Duke Energy Progress and Piedmont, among others, will be customers of the pipeline. Purchases will be made under several 20-year supply contracts, subject to state regulatory approval.

In 2018, the FERC issued a series of Notices to Proceed, which authorized the project to begin certain construction-related activities along the pipeline route, including supply header and compressors. On May 11, 2018, and October 19, 2018, FERC issued Notices to Proceed allowing full construction activities in all areas of West Virginia except in the Monongahela National Forest. On July 24, 2018, FERC issued a Notice to Proceed allowing full construction activities along the project route in North Carolina. On October 19, 2018, the conditions to effectiveness of the Virginia 401 water quality certification were ~~satisfied. Immediately~~satisfied and, following receipt of the Virginia 401 certification, ACP filed a request for FERC to issue a Notice to Proceed with full construction activities in Virginia. ~~We appreciate~~Due to legal challenges not directly related to the ~~professional and collaborative process by the permitting agencies designed~~request for a Notice to ~~ensure that~~Proceed in Virginia, this ~~critical energy infrastructure project will meet the stringent environmental standards required by law and regulation.~~request is still pending.

ACP is the subject of challenges in state and federal courts and agencies, including, among others, challenges of the project’s biological opinion (BiOp) and incidental take statement (ITS), crossings of the Blue Ridge Parkway, the Appalachian Trail, and the Monongahela and George Washington National Forests, the project’s U.S. Army Corps of Engineers (USACE) 404 permit, the project's air permit for a compressor station at Buckingham, Virginia, ~~conditional 401 water quality certification,~~ the FERC Environmental Impact Statement order and the FERC order approving the Certificate of Public Convenience and Necessity. Each of these challenges alleges non-compliance on the part of federal and state permitting authorities and adverse ecological consequences if the project is permitted to proceed. Since December 2018, notable developments in these challenges include a stay in December 2018 issued by the U.S. Court of Appeals for the Fourth Circuit (Fourth Circuit) and the same court's July 26, 2019, vacatur of the project's ~~biological opinion~~BiOp and ITS (which stay ~~has~~and subsequent vacatur halted most project construction activity), a Fourth Circuit decision vacating the project's permits to cross the Monongahela and George Washington National Forests and the Appalachian Trail, the Fourth Circuit's remand to USACE of ACP's Huntington District 404 verification, ~~and~~ the Fourth Circuit’s remand to the National Park Service of ~~the~~ ACP’s Blue Ridge Parkway ~~right-of-way.~~right-of-way and the most recent vacatur of the air permit for a compressor station at Buckingham, Virginia. ACP is vigorously defending these challenges and coordinating with the federal and state authorities which are the direct parties to the challenges. The Solicitor General of the United States and ACP filed petitions for certiorari to the Supreme Court of the United States on June 25, 2019, regarding the Appalachian Trail crossing and ~~federal agencies are coordinating~~certiorari was granted on October 4, 2019. The Supreme Court hearing took place on February 24, 2020, and a ~~potential appeal~~ruling is expected in the second quarter of 2020.

In anticipation of the Fourth ~~Circuit’s recent ruling~~Circuit's vacatur of the BiOp and ITS, ACP and the FWS commenced work in mid-May of 2019 to set the basis for a reissued BiOp and ITS. On February 10, 2020, the FERC issued a letter to FWS requesting the re-initiation of formal consultation in support of reissuing the BiOp and ITS, and on April 14, 2020, ACP submitted the Biological Assessment, which may form the foundation for FWS' BiOp. ACP continues coordinating and working with FWS and other parties in preparation for a reissuance of the BiOp and ITS.

ACP triggered the Adverse Government Actions (AGA) clause of its agreements with its customers in December 2019. Formal negotiations have resulted in agreement on material terms, such as updated pricing and construction milestones. The modified customer agreements are expected to be executed by the third quarter of 2020.

On April 15, 2020, the United States District Court for the District of Montana granted partial summary judgment in favor of the plaintiffs in Northern Plains Resource Council v. U.S. Army Corps of Engineers (Northern Plains), vacating USACE’s Nationwide Permit 12 (NWP 12) and remanding it to USACE for consultation under the ~~project’s permit~~Endangered Species Act (ESA) of 1973. In Northern Plains, the court ruled that NWP 12 was unlawful because USACE did not consult under the ESA with the FWS and/or National Marine Fisheries Service prior to ~~cross~~NWP 12’s reissuance in 2017. Because NWP 12 has been vacated and its application enjoined, USACE currently has suspended verification of any new or pending applications under NWP 12 until further court action clarifies the ~~Appalachian Trail.~~situation. ACP is ~~also evaluating possible legislative~~reviewing the potential impact of this ruling to its own reliance on NWP 12 for small water body crossings along the pipeline route, as well as potential mitigation measures.

Given the legal challenges and ~~administrative remedies. On May 9, 2019,~~ongoing discussions with customers, ACP expects the ~~U.S. Fish and Wildlife Service and~~project to enter full in-service in the ~~Department~~first half of ~~Justice will present arguments before the Fourth Circuit supporting the project’s stayed biological opinion and ITS.~~2022.

The delays resulting from the legal challenges described above have also impacted the cost ~~and schedule~~ for the project. ~~As a result, project~~Project cost ~~estimates have increased to $7.0 billion to $7.8~~is approximately $8 billion, excluding financing costs. ~~ACP expects~~This estimate is based on the current facts available around construction costs and timelines, and is subject to ~~achieve a late 2020 in-service date for key segments of the project, while it expects the remainder to extend into 2021.~~future changes as those facts develop. Abnormal weather, work delays (including delays due to judicial or regulatory ~~action)~~action or COVID-19 social distancing) and other conditions may result in cost or schedule modifications, a suspension of AFUDC for ACP and/or impairment charges potentially material to Duke Energy's cash flows, financial position and results of operations.

Duke Energy’s investment in ACP was $1.2 billion at March 31, 2020. Duke Energy evaluated this investment for impairment at March 31, 2020, and December 31, 2019, and determined that fair value approximated carrying value and therefore no impairment was necessary. Duke Energy also has a guarantee agreement supporting its share of the ~~future.~~ACP revolving credit facility. Duke Energy’s maximum exposure to loss under the terms of the guarantee is $845 million, which represents 47% of the outstanding borrowings under the credit facility as of March 31, 2020. See Note 13 for additional information.



FINANCIAL STATEMENTS	REGULATORY MATTERS

Constitution Pipeline Company, LLC

Duke Energy ~~owns~~owned a ~~24 percent~~24% ownership interest in Constitution, which iswas accounted for as an equity method investment. Constitution iswas a natural gas pipeline project slated to transport natural gas supplies from the Marcellus supply region in northern Pennsylvania to major northeastern markets. The pipeline ~~will~~was to be constructed and operated by Williams Partners L.P., which ~~has~~had a ~~41 percent~~41% ownership share. The remaining interest iswas held by Cabot Oil and Gas Corporation and WGL Holdings, Inc. Before the permitting delays discussed below, Duke Energy's total anticipated contributions were approximately $229 million. As a result of the permitting delays and project uncertainty, total anticipated contributions by Duke Energy can no longer be reasonably estimated. Since April 2016, with the actions of the New York State Department of Environmental Conservation (NYSDEC), Constitution stopped construction and discontinued capitalization of future development costs until the project's uncertainty is resolved.

In December 2014, Constitution received approval from the FERC to construct and operate the proposed pipeline. However, onsince April ~~22,~~ 2016, Constitution had stopped construction and discontinued capitalization of future development costs due to permitting delays and adverse rulings by regulatory agencies and courts.

In late 2019, Constitution determined that its principal shipper would not agree to an amended precedent agreement. Without such an amendment, the ~~NYSDEC denied Constitution’s application for a necessary water quality certification for the New York portion~~project would no longer be viable and, as of February 5, 2020, the Constitution ~~pipeline.~~partners formally resolved to initiate the dissolution of Constitution, ~~filed a series of legal actions challenging~~and to terminate the ~~legality and appropriateness of the NYSDEC’s decision, culminating in an appeal to the Supreme Court of the United States, which appeal was denied on April 30, 2018. In addition, in October 2017,~~ Constitution filed a petition for declaratory order requesting FERC to find that the NYSDEC waived its rights to issue a Section 401 water quality certification by not acting on Constitution's application within a reasonable period of time as required by statute, which petition was denied on January 11, 2018.



~~FINANCIAL STATEMENTS~~	~~REGULATORY MATTERS~~

~~On January 25, 2019, the D.C. Circuit Court rendered a decision in~~ ~~Hoopa Valley Tribe v. FERC~~ that withdrawal and resubmission of an application for a Section 401 water quality certification constituted a waiver by the relevant state agency when such withdrawals and resubmissions were intended to extend the one-year limit on accepting or rejecting such an application. As Constitution had made similar arguments in its 2018 petition to FERC for a declaratory order, on April 1, 2019, Constitution filed a new petition for declaratory order requesting FERC find a waiver on the part of NYSDEC in accordance with the D.C. Circuit Court’s newly established precedent. On May 1, 2019, Constitution filed its response to supplemental pleadings filed by NYSDEC and others in this proceeding. A FERC response is expected later this year.

Constitution is currently unable to approximate an in-service date for the project due to the NYSDEC's denial of the water quality certification. The Constitution partners remain committed to the project and are evaluating next steps to move the project forward. On June 25, 2018, Constitution filed with FERC a Request for Extension of Time until December 2, 2020, for construction of thePipeline project. ~~On November 5, 2018, FERC issued an Order Granting Extension of Time.~~

During the three months ended March 31, 2018, Duke Energy recorded an OTTI of $55 million within Equity in (losses) earnings of unconsolidated affiliates on Duke Energy's Condensed Consolidated Statements of Income. The charge represented the excess carrying value over the estimated fair value of the project, which was based on a Level 3 Fair Value measurement that was determined from the income approach using discounted cash flows. The impairment was primarily due to actions taken by the courts and regulators to uphold the NYSDEC's denial of the certification and uncertainty associated with the remaining legal and regulatory challenges.

See Note 1311 for additional information related to ownership interest and carrying value of the investment. Williams Partners L.P., as project Operator, is currently working to liquidate the project's assets.

Potential Coal Plant Retirements

The Subsidiary Registrants periodically file IRPs with their state regulatory commissions. The IRPs provide a view of forecasted energy needs over a long term (10 to 20 years) and options being considered to meet those needs. IRPs filed by the Subsidiary Registrants included planning assumptions to potentially retire certain coal-fired generating facilities in North Carolina and Indiana earlier than their current estimated useful ~~lives primarily because facilities do not have the requisite emission control equipment to meet regulatory requirements expected to apply in the near future.~~lives. Duke Energy continues to evaluate the potential need to retire these coal-fired generating facilities earlier than the current estimated useful lives and plans to seek regulatory recovery for amounts that would not be otherwise recovered when any of these assets are retired.

The table below contains the net carrying value of generating facilities planned for retirement or included in recent IRPs as evaluated for potential ~~retirement due to a lack of requisite environmental control equipment.~~retirement. Dollar amounts in the table below are included in Net property, plant and equipment on the Condensed Consolidated Balance Sheets as of March 31, ~~2019,~~2020, and exclude capitalized asset retirement costs.


		Remaining Net			Remaining Net
	Capacity	Book Value		Capacity	Book Value
	(in MW)	(in millions)		(in MW)	(in millions)
Duke Energy Carolinas
Allen Steam Station Units 1-3^(a)	585	$	159	585	$	149
Duke Energy Indiana
Gallagher Units 2 and 4^(b)	280	120		280	118
Gibson Units 1-5^(c)				3,132	1,708
Cayuga Units 1-2^(c)				1,005	964
Total Duke Energy	865	$	279	5,002	$	2,939



FINANCIAL STATEMENTS	VARIABLE INTEREST ENTITIES

The table below presents Duke Energy's ownership interest and investment balances in these joint ventures.



			VIE Investment Amount (in millions)
	Ownership		March 31,		December 31,
Entity Name	Interest		2020		2019
ACP^(a)	47	%	$	1,243	$	1,179
Constitution^(b)	24	%	—		—
Total			$	1,243	$	1,179

VIE Investment Amount (in millions)
Ownership March 31, December 31,
Entity Name Interest 2019 2018
ACP^(a)
47 % $ 973
$ 797
Constitution 24 % 25
25
Total $ 998
$ 822


(a)	Duke Energy evaluated this investment for impairment as of March 31, ~~2019,~~2020, and December 31, ~~2018,~~2019, and determined that fair value approximated carrying value and therefore no impairment was necessary.


(b)	During the year ended December 31, 2019, Duke Energy recorded an OTTI related to Constitution. This charge resulted in the full write-down of Duke Energy's investment in Constitution.

Commercial Renewables

Duke Energy has investments in various renewable energy project entities. Some of these entities are VIEs due to Duke Energy issuing guarantees for debt service and operations and maintenance reserves in support of debt financings. Duke Energy does not consolidate these VIEs because power to direct and control key activities is shared jointly by Duke Energy and other owners.

~~Pioneer~~

In 2019, Duke Energy ~~holds~~acquired a ~~50 percent equity interest~~majority ownership in ~~Pioneer. Pioneer is considered~~ a VIE due to having insufficient equity to finance its own activities without subordinated financial support. The activities that most significantly impact Pioneer's economic performance are decisions related to the developmentportfolio of ~~new transmission facilities. The power to direct these activities is jointly and equally shared by~~distributed fuel cell projects from Bloom Energy Corporation. Duke Energy ~~and~~is not the ~~other joint venture partner, American Electric Power; therefore, Duke Energy~~primary beneficiary of the assets within the portfolio and does not consolidate ~~Pioneer.~~the assets in the portfolio.

OVEC

Duke Energy Ohio’s ~~9 percent~~9% ownership interest in OVEC is considered a non-consolidated VIE due to OVEC having insufficient equity to finance its activities without subordinated financial support. The activities that most significantly impact OVEC's economic performance include fuel strategy and supply activities and decisions associated with ongoing operations and maintenance-related activities. Duke Energy Ohio does not have the unilateral power to direct these activities, and therefore, does not consolidate OVEC.

As a counterparty to an ~~ICPA,~~Inter-Company Power Agreement (ICPA), Duke Energy Ohio has a contractual arrangement to receive entitlements to capacity and energy from OVEC’s power plants through June 2040 commensurate with its power participation ratio, which is equivalent to Duke Energy Ohio's ownership interest. Costs, including fuel, operating expenses, fixed costs, debt amortization and interest expense, are allocated to counterparties to the ICPA based on their power participation ratio. The value of the ICPA is subject to variability due to fluctuation in power prices and changes in OVEC's cost of business. On March 31, 2018, ~~FES,~~FirstEnergy Solutions Corp (FES), a subsidiary of FirstEnergy Corp. and an ICPA counterparty with a power participation ratio of ~~4.85 percent,~~4.85%, filed for Chapter 11 bankruptcy, which could increase costs allocated to the counterparties. On July 31, 2018, the bankruptcy court rejected the FES ICPA, which means OVEC is an unsecured creditor in the FES bankruptcy proceeding. ~~Duke Energy Ohio cannot predict the impact of the bankruptcy filing on its OVEC interests.~~ In addition, certain proposed environmental rulemaking could result in future increased OVEC cost allocations. See Note 3 for additional information.

CRC

See discussion under Consolidated VIEs for additional information related to CRC.

Amounts included in Receivables from affiliated companies in the above table for Duke Energy Ohio and Duke Energy Indiana reflect their retained interest in receivables sold to CRC. These subordinated notes held by Duke Energy Ohio and Duke Energy Indiana are stated at fair value.

The following table shows the gross and net receivables sold.



	Duke Energy Ohio				Duke Energy Indiana
(in millions)	March 31, 2020		December 31, 2019		March 31, 2020		December 31, 2019
Receivables sold	$	234	$	253	$	274	$	307
Less: Retained interests	39		64		48		77
Net receivables sold	$	195	$	189	$	226	$	230

Duke Energy Ohio Duke Energy Indiana
(in millions) March 31, 2019
December 31, 2018
March 31, 2019
December 31, 2018
Receivables sold $ 253
$ 269
$ 322
$ 336
Less: Retained interests 67
93
89
118
Net receivables sold $ 186
$ 176
$ 233
$ 218



FINANCIAL STATEMENTS	VARIABLE INTEREST ENTITIES

The following table shows sales and cash flows related to receivables sold.



	Duke Energy Ohio				Duke Energy Indiana
	Three Months Ended				Three Months Ended
	March 31,				March 31,
(in millions)	2020		2019		2020		2019
Sales
Receivables sold	$	537	$	575	$	647	$	734
Loss recognized on sale	4		4		4		5
Cash flows
Cash proceeds from receivables sold	$	559	$	597	$	672	$	758
Return received on retained interests	2		2		2		3

Duke Energy Ohio Duke Energy Indiana
Three Months Ended Three Months Ended
March 31, March 31,
(in millions) 2019
2018
2019
2018
Sales
Receivables sold $ 575
$ 567
$ 734
$ 694
Loss recognized on sale 4
3
5
3
Cash flows
Cash proceeds from receivables sold $ 597
$ 585
$ 758
$ 711
Return received on retained interests 2
2
3
2

Cash flows from sales of receivables are reflected within Cash Flows From Operating Activities on Duke Energy Ohio’s and Duke Energy Indiana’s Condensed Consolidated Statements of Cash Flows.

~~14.~~12. REVENUE

Duke Energy earns substantially all of its revenues through its reportable segments, Electric Utilities and Infrastructure, Gas Utilities and Infrastructure and Commercial Renewables.

Electric Utilities and Infrastructure

Electric Utilities and Infrastructure earns the majority of its revenues through retail and wholesale electric service through the generation, transmission, distribution and sale of electricity. Duke Energy generally provides retail and wholesale electric service customers with their full electric load requirements or with supplemental load requirements when the customer has other sources of electricity.

The majority of wholesale revenues are full requirements contracts where the customers purchase the substantial majority of their energy needs and do not have a fixed quantity of contractually required energy or capacity. As such, related forecasted revenues are considered optional purchases. Supplemental requirements contracts that include contracted blocks of energy and capacity at contractually fixed prices have the following estimated remaining performance obligations:



	Remaining Performance Obligations
(in millions)	2020		2021		2022		2023		2024		Thereafter		Total
Progress Energy	$	84	$	92	$	87	$	44	$	45	$	58	$	410
Duke Energy Progress	6		8		8		8		8		—		38
Duke Energy Florida	78		84		79		36		37		58		372
Duke Energy Indiana	8		5		—		—		—		—		13

Remaining Performance Obligations
(in millions) 2019
2020
2021
2022
2023
Thereafter
Total
Progress Energy $ 86
$ 121
$ 87
$ 82
$ 39
$ 42
$ 457
Duke Energy Progress 7
9
9
9
9
9
52
Duke Energy Florida 79
112
78
73
30
33
405
Duke Energy Indiana 7
10
5
—
—
—
22

Revenues for block sales are recognized monthly as energy is delivered and stand-ready service is provided, consistent with invoiced amounts and unbilled estimates.

Gas Utilities and Infrastructure

Gas Utilities and Infrastructure earns its revenues through retail and wholesale natural gas service through the transportation, distribution and sale of natural gas. Duke Energy generally provides retail and wholesale natural gas service customers with all natural gas load requirements. Additionally, while natural gas can be stored, substantially all natural gas provided by Duke Energy is consumed by customers simultaneously with receipt of delivery.

~~Fixed capacity~~Fixed-capacity payments under long-term contracts for the Gas Utilities and Infrastructure segment include minimum margin contracts and supply arrangements with municipalities and power generation facilities. Revenues for related sales are recognized monthly as natural gas is delivered and stand-ready service is provided, consistent with invoiced amounts and unbilled estimates. Estimated remaining performance obligations are as follows:



	Remaining Performance Obligations
(in millions)	2020		2021		2022		2023		2024		Thereafter		Total
Piedmont	$	51	$	65	$	64	$	61	$	58	$	376	$	675

Remaining Performance Obligations
(in millions) 2019
2020
2021
2022
2023
Thereafter
Total
Piedmont $ 53
$ 69
$ 65
$ 64
$ 61
$ 431
$ 743

Commercial Renewables

Commercial Renewables earns the majority of its revenues through long-term PPAs and generally sells all of its wind and solar facility output, electricity and ~~RECs~~Renewable Energy Certificates (RECs) to customers. The majority of these PPAs have historically been accounted for as leases. For PPAs that are not accounted for as leases, the delivery of electricity and the delivery of RECs are considered separate performance obligations.



FINANCIAL STATEMENTS	REVENUE

Other

The remainder of Duke Energy’s operations is presented as Other, which does not include material revenues from contracts with customers.

Disaggregated Revenues

Disaggregated revenues are presented as follows:

Three Months Ended March 31, 2019
Duke
Duke
Duke
Duke
Duke

(in millions) Duke
Energy
Progress
Energy
Energy
Energy
Energy

By market or type of customer Energy
Carolinas
Energy
Progress
Florida
Ohio
Indiana
Piedmont
Electric Utilities and Infrastructure
   Residential $ 2,370
$ 760
$ 1,114
$ 536
$ 578
$ 189
$ 306
$ —
   General 1,427
496
632
306
326
103
197
—
   Industrial 711
266
222
161
61
33
190
—
   Wholesale 541
119
353
315
38
14
54
—
   Other revenues 172
78
172
125
47
16
17
—
Total Electric Utilities and Infrastructure revenue from contracts with customers $ 5,221
$ 1,719
$ 2,493
$ 1,443
$ 1,050
$ 355
$ 764
$ —

Gas Utilities and Infrastructure
   Residential $ 414
$ —
$ —
$ —
$ —
$ 112
$ —
$ 302
   Commercial 206
—
—
—
—
49
—
157
   Industrial 48
—
—
—
—
7
—
42
   Power Generation —
—
—
—
—
—
—
13
   Other revenues 63
—
—
—
—
8
—
56
Total Gas Utilities and Infrastructure revenue from contracts with customers $ 731
$ —
$ —
$ —
$ —
$ 176
$ —
$ 570

Commercial Renewables
Revenue from contracts with customers $ 42
$ —
$ —
$ —
$ —
$ —
$ —
$ —

Other
Revenue from contracts with customers $ 4
$ —
$ —
$ —
$ —
$ —
$ —
$ —
Total revenue from contracts with customers $ 5,998
$ 1,719
$ 2,493
$ 1,443
$ 1,050
$ 531
$ 764
$ 570

Other revenue sources^(a)
$ 165
$ 25
$ 79
$ 41
$ 36
$ —
$ 4
$ 9
Total revenues $ 6,163
$ 1,744
$ 2,572
$ 1,484
$ 1,086
$ 531
$ 768
$ 579



~~FINANCIAL STATEMENTS~~	~~REVENUE~~


	Three Months Ended March 31, 2018																	Three Months Ended March 31, 2020
			Duke				Duke		Duke		Duke		Duke							Duke				Duke		Duke		Duke			Duke
(in millions)	Duke		Energy		Progress		Energy		Energy		Energy		Energy					Duke		Energy		Progress		Energy		Energy		Energy			Energy
By market or type of customer	Energy		Carolinas		Energy		Progress		Florida		Ohio		Indiana		Piedmont			Energy		Carolinas		Energy		Progress		Florida		Ohio			Indiana		Piedmont
Electric Utilities and Infrastructure
Residential	$	2,350	$	781	$	1,112	$	516	$	595	$	180	$	278	$	—		$	2,261	$	756	$	1,064	$	502	$	562	$	176		$	265	$	—
General	1,375		472		631		299		333		96		178		—			1,492		549		648		319		329		114			181		—
Industrial	664		255		208		145		62		30		173		—			693		269		216		154		62		35			175		—
Wholesale	633		119		446		397		50		—		68		—			497		114		321		279		42		7			55		—
Other revenues	139		67		129		85		43		14		17		—			191		60		118		63		55		20			16		—
Total Electric Utilities and Infrastructure revenue from contracts with customers	$	5,161	$	1,694	$	2,526	$	1,442	$	1,083	$	320	$	714	$	—		$	5,134	$	1,748	$	2,367	$	1,317	$	1,050	$	352		$	692	$	—

Gas Utilities and Infrastructure
Residential	$	413	$	—	$	—	$	—	$	—	$	111	$	—	$	302		$	362	$	—	$	—	$	—	$	—	$	97		$	—	$	264
Commercial	201		—		—		—		—		49		—		152			169		—		—		—		—		43			—		126
Industrial	48		—		—		—		—		7		—		41			41		—		—		—		—		6			—		36
Power Generation	—		—		—		—		—		—		—		13			—		—		—		—		—		—			—		11
Other revenues	55		—		—		—		—		6		—		49			30		—		—		—		—		6			—		24
Total Gas Utilities and Infrastructure revenue from contracts with customers	$	717	$	—	$	—	$	—	$	—	$	173	$	—	$	557		$	602	$	—	$	—	$	—	$	—	$	152		$	—	$	461

Commercial Renewables
Revenue from contracts with customers	$	33	$	—	$	—	$	—	$	—	$	—	$	—	$	—		$	58	$	—	$	—	$	—	$	—	$	—		$	—	$	—

Other
Revenue from contracts with customers	$	17	$	—	$	—	$	—	$	—	$	14	$	—	$	—		$	6	$	—	$	—	$	—	$	—	$	—		$	—	$	—
Total revenue from contracts with customers	$	5,928	$	1,694	$	2,526	$	1,442	$	1,083	$	507	$	714	$	557		$	5,800	$	1,748	$	2,367	$	1,317	$	1,050	$	504		$	692	$	461

Other revenue sources^(a)	$	207	$	69	$	50	$	18	$	32	$	17	$	17	$	(4	)	$	149	$	—	$	55	$	21	$	30	$	(6	)	$	—	$	51
Total revenues	$	6,135	$	1,763	$	2,576	$	1,460	$	1,115	$	524	$	731	$	553		$	5,949	$	1,748	$	2,422	$	1,338	$	1,080	$	498		$	692	$	512


(a)	Other revenue sources include revenues from leases, derivatives and alternative revenue programs that are not considered revenues from contracts with customers. Alternative revenue programs in certain jurisdictions include regulatory mechanisms that periodically adjust for over or under collection of related revenues.



FINANCIAL STATEMENTS	REVENUE



	Three Months Ended March 31, 2019
			Duke				Duke		Duke		Duke		Duke
(in millions)	Duke		Energy		Progress		Energy		Energy		Energy		Energy
By market or type of customer	Energy		Carolinas		Energy		Progress		Florida		Ohio		Indiana		Piedmont
Electric Utilities and Infrastructure
Residential	$	2,370	$	760	$	1,114	$	536	$	578	$	189	$	306	$	—
General	1,427		496		632		306		326		103		197		—
Industrial	711		266		222		161		61		33		190		—
Wholesale	541		119		353		315		38		14		54		—
Other revenues	172		78		172		125		47		16		17		—
Total Electric Utilities and Infrastructure revenue from contracts with customers	$	5,221	$	1,719	$	2,493	$	1,443	$	1,050	$	355	$	764	$	—

Gas Utilities and Infrastructure
Residential	$	414	$	—	$	—	$	—	$	—	$	112	$	—	$	302
Commercial	206		—		—		—		—		49		—		157
Industrial	48		—		—		—		—		7		—		42
Power Generation	—		—		—		—		—		—		—		13
Other revenues	63		—		—		—		—		8		—		56
Total Gas Utilities and Infrastructure revenue from contracts with customers	$	731	$	—	$	—	$	—	$	—	$	176	$	—	$	570

Commercial Renewables
Revenue from contracts with customers	$	42	$	—	$	—	$	—	$	—	$	—	$	—	$	—

Other
Revenue from contracts with customers	$	4	$	—	$	—	$	—	$	—	$	—	$	—	$	—
Total revenue from contracts with customers	$	5,998	$	1,719	$	2,493	$	1,443	$	1,050	$	531	$	764	$	570

Other revenue sources^(a)	$	165	$	25	$	79	$	41	$	36	$	—	$	4	$	9
Total revenues	$	6,163	$	1,744	$	2,572	$	1,484	$	1,086	$	531	$	768	$	579


(a)	Other revenue sources include revenues from leases, derivatives and alternative revenue programs that are not considered revenues from contracts with customers. Alternative revenue programs in certain jurisdictions include regulatory mechanisms that periodically adjust for over or under collection of related revenues.

As described in Note 1, Duke Energy adopted the new guidance for credit losses effective January 1, 2020, using the modified retrospective method of adoption, which does not require restatement of prior year reported results. The following table presents the reserve for credit losses for trade and other receivables based on adoption of the new standard.



	March 31, 2020
				Duke						Duke			Duke			Duke		Duke
	Duke			Energy			Progress			Energy			Energy			Energy		Energy
(in millions)	Energy			Carolinas			Energy			Progress			Florida			Ohio		Indiana		Piedmont
Balance at December 31, 2019	$	76		$	10		$	16		$	8		$	7		$	4	$	3	$	6
Cumulative Change in Accounting Principle	5			1			2			1			1			—		—		1
Write-Offs	(10		)	(3		)	(4		)	(2		)	(2		)	—		—		(1		)
Credit Loss Expense	18			3			6			2			5			1		—		3
Balance at March 31, 2020	$	89		$	11		$	20		$	9		$	11		$	5	$	3	$	9

Trade and other receivables are evaluated based on an estimate of the risk of loss over the life of the receivable and current and historical conditions using supportable assumptions. Management evaluates the risk of loss for trade and other receivables by comparing the historical write-off amounts to total revenue over a specified period. Historical loss rates are adjusted due to the impact of current conditions as well as forecasted conditions over a reasonable time period. The calculated write-off rate can be applied to the receivable balance for which an established reserve does not already exist. Management reviews the assumptions and risk of loss annually for trade and other receivables. Due to the COVID-19 pandemic, as described in Note 1, the Duke Energy Registrants suspended customer disconnections for nonpayment. The specific actions taken by each Duke Energy Registrant are described in Note 3. The impact of COVID-19 and Duke Energy’s related response on customers’ ability to pay for service is uncertain, and it is reasonably possible eventual write-offs of customer receivables may increase over current estimates.



FINANCIAL STATEMENTS	REVENUE

The aging of trade receivables is presented in the table below. Duke Energy considers receivables greater than 30 days outstanding past due.



	March 31, 2020
			Duke				Duke		Duke		Duke		Duke
	Duke		Energy		Progress		Energy		Energy		Energy		Energy
(in millions)	Energy		Carolinas		Energy		Progress		Florida		Ohio		Indiana		Piedmont
Unbilled Receivables	$	716	$	285	$	195	$	85	$	110	$	1	$	16	$	32
0-30 days	1,584		448		585		321		262		45		24		134
30-60 days	216		69		67		44		23		9		1		18
60-90 days	65		18		20		14		6		2		1		5
90+ days	145		19		57		32		25		32		11		11
Trade and Other Receivables	$	2,726	$	839	$	924	$	496	$	426	$	89	$	53	$	200

UNBILLED REVENUE

Unbilled revenues are recognized by applying customer billing rates to the estimated volumes of energy or natural gas delivered but not yet billed. Unbilled revenues can vary significantly from period to period as a result of seasonality, weather, customer usage patterns, customer mix, average price in effect for customer classes, timing of rendering customer bills and meter reading schedules and the impact of weather normalization or margin decoupling mechanisms.

Unbilled revenues are included within Receivables and Receivables of VIEs on the Condensed Consolidated Balance Sheets as shown in the following table.



(in millions)	March 31, 2020		December 31, 2019
Duke Energy	$	716	$	843
Duke Energy Carolinas	285		298
Progress Energy	195		217
Duke Energy Progress	85		122
Duke Energy Florida	110		95
Duke Energy Ohio	1		1
Duke Energy Indiana	16		16
Piedmont	32		78

(in millions) March 31, 2019
December 31, 2018
Duke Energy $ 733
$ 896
Duke Energy Carolinas 281
313
Progress Energy 193
244
Duke Energy Progress 108
148
Duke Energy Florida 85
96
Duke Energy Ohio 1
2
Duke Energy Indiana 18
23
Piedmont 38
73



~~FINANCIAL STATEMENTS~~	~~REVENUE~~

Additionally, Duke Energy Ohio and Duke Energy Indiana sell, on a revolving basis, nearly all of their retail accounts receivable, including receivables for unbilled revenues, to an affiliate, CRC, and account for the transfers of receivables as sales. Accordingly, the receivables sold are not reflected on the Condensed Consolidated Balance Sheets of Duke Energy Ohio and Duke Energy Indiana. See Note 1311 for further information. These receivables for unbilled revenues are shown in the table below.



(in millions)	March 31, 2020		December 31, 2019
Duke Energy Ohio	$	61	$	82
Duke Energy Indiana	94		115

(in millions) March 31, 2019
December 31, 2018
Duke Energy Ohio $ 62
$ 86
Duke Energy Indiana 109
128

~~15.~~13. STOCKHOLDERS' EQUITY

Basic EPS is computed by dividing net income ~~attributable~~available to Duke Energy common stockholders, as adjusted for distributed and undistributed earnings allocated to participating securities, by the weighted average number of common shares outstanding during the period. Diluted EPS is computed by dividing net income ~~attributable~~available to Duke Energy common stockholders, as adjusted for distributed and undistributed earnings allocated to participating securities, by the diluted weighted average number of common shares outstanding during the period. Diluted EPS reflects the potential dilution that could occur if securities or other agreements to issue common stock, such as stock options and equity forward sale agreements, were exercised or settled. Duke Energy’s participating securities are restricted stock units that are entitled to dividends declared on Duke Energy common stock during the restricted stock unit’s vesting periods. Dividends declared on preferred stock are recorded on the Condensed Consolidated Statements of Operations as a reduction of net income to arrive at net income available to Duke Energy common stockholders. Dividends accumulated on preferred stock are an adjustment to net income used in the calculation of basic and diluted EPS.



FINANCIAL STATEMENTS	STOCKHOLDERS' EQUITY

The following table presents Duke Energy’s basic and diluted EPS calculations, the weighted average number of common shares outstanding and common and preferred share dividends declared.

Three Months Ended March 31,
(in millions, except per-share amounts) 2019
2018
Income from continuing operations attributable to Duke Energy common stockholders excluding impact of participating securities $ 898
$ 619
Weighted average shares outstanding – basic and diluted 727
701
Earnings per share from continuing operations attributable to Duke Energy common stockholders
Basic and Diluted $ 1.24
$ 0.88
Potentially dilutive items excluded from the calculation^(a)
2
2
Dividends declared per common share $ 0.9275
$ 0.89



	Three Months Ended March 31,
(in millions, except per share amounts)	2020		2019
Income from continuing operations available to Duke Energy common stockholders excluding impact of participating securities and including accumulated preferred stock dividends adjustment	$	911	$	898

Weighted average common shares outstanding – basic	734		727
Equity forwards	2		—
Weighted average common shares outstanding – diluted	736		727
EPS from continuing operations available to Duke Energy common stockholders
Basic and diluted	$	1.24	$	1.24
Potentially dilutive items excluded from the calculation^(a)	2		2
Dividends declared per common share	$	0.945	$	0.9275
Dividends declared on Series A preferred stock per depositary share^(b)	$	0.359	$	—
Dividends declared on Series B preferred stock per share^(c)	$	24.917	$	—


(a)	Performance stock awards were not included in the dilutive securities calculation because the performance measures related to the awards had not been met.


(b)	5.75% Series A Cumulative Redeemable Perpetual Preferred Stock dividends are payable quarterly in arrears on the 16th day of March, June, September and December. The preferred stock has a $25 liquidation preference per depositary share.


(c)	4.875% Series B Fixed-Rate Reset Cumulative Redeemable Perpetual Preferred Stock dividends are payable semiannually in arrears on the 16th day of March and September. The preferred stock has a $1,000 liquidation preference per share.

Common Stock

~~On February 20, 2018,~~In November 2019, Duke Energy filed a prospectus supplement and executed an ~~EDA~~Equity Distribution Agreement (EDA) under which it may sell up to $1$1.5 billion of its common stock through an ~~ATM~~at-the-market (ATM) offering program, including an equity forward sales component. ~~The EDA was entered into with the Agents.~~ Under the terms of the EDA, Duke Energy may issue and sell ~~through any of the Agents,~~ shares of common stock through September ~~23, 2019.~~

2022. In ~~June 2018,~~March 2020, Duke Energy marketed ~~two separate tranches, each for 1.3 million~~approximately 940,000 shares of common stock through an equity forward ~~transactions~~transaction under the ATM ~~program. In December 2018, Duke Energy physically settled these equity forwards by delivering 2.6 million shares~~with an initial forward price of ~~common stock in exchange for net proceeds of approximately $195 million.~~$89.76 per share.

Separately, in ~~March 2018,~~November 2019, Duke Energy marketed an equity offering of ~~21.3~~28.75 million shares of common stock through an Underwriting Agreement. In connection with the offering, Duke Energy entered into an equity forward sale agreements. The equity forwards required Duke Energy to either physically settle the transactions by issuing 21.3 million shares in exchange for net proceeds at the then-applicable forward sale price specified by the agreements, or net settle in whole or in part through the delivery or receipt of cash or shares. In June 2018, Duke Energy physically settled one-half of the equity forwards by delivering approximately 10.6 million shares of common stock in exchange for net cash proceeds of approximately $781 million. In December 2018, Duke Energy physically settled the remaining equity forward by delivering 10.6 million shares of common stock in exchange for net cash proceeds of approximately $766 million.

~~In 2018, Duke Energy also issued 2.2 million shares through its DRIP~~sales agreement with ~~an increase in additional paid-in capital of approximately $174 million.~~

~~In March and April 2019, Duke Energy marketed two separate tranches, each for 1.1 million shares, of common stock through equity forward transactions under the ATM program. The first tranche had~~ an initial forward price of ~~$89.83~~$85.99 per ~~share and the second tranche had an initial forward price of $88.82 per~~ share.

The equity ~~forwards~~forward sales agreements require Duke Energy to either physically settle the transaction by issuing shares in exchange for net proceeds at the then-applicable forward sale price specified by the ~~agreements~~agreement, or net settle in whole or in part through the delivery or receipt of cash or shares. The settlement ~~alternative is~~alternatives are at Duke Energy's election. ~~No amounts have or will be recorded in Duke Energy's Condensed Consolidated Financial Statements with respect to these ATM offerings until settlements~~Settlement of the ~~equity forwards~~forward sales agreements are expected to occur ~~which is expected by~~on or prior to December 31, 2019. The initial forward sale price will be subject to adjustment on a daily basis based on a floating interest rate factor and will decrease by other fixed amounts specified in the relevant forward sale agreements.2020. Until settlement of the equity forwards, ~~earnings per share~~EPS dilution resulting from the agreements, if any, will be determined under the treasury stock method.



~~FINANCIAL STATEMENTS~~	~~STOCKHOLDERS' EQUITY~~

~~Preferred Stock~~

On March 29, 2019, Duke Energy completed the issuance of 40 million depositary shares, each representing 1/1,000th share of its Series A Cumulative Redeemable Perpetual Preferred Stock, at a price of $25 per depositary share. The transaction resulted in net proceeds of $974 million after issuance costs and the proceeds are being used for general corporate purposes and to reduce short-term debt. The preferred stock has a $25 liquidation preference per depositary share and earns dividends on a cumulative basis at a rate of 5.75 percent per annum. Dividends are payable quarterly in arrears on the 16th day of March, June, September and December, beginning on June 16, 2019. Dividends issued on its preferred stock are subject to approval by the Duke Energy Board of Directors. However, the deferral of dividend payments on the preferred stock prohibits the declaration of common stock dividends. Dividends declared on preferred stock will be recorded on the income statement as a reduction of net income to arrive at net income attributable to Duke Energy common stockholders. Dividends accumulated on preferred stock will be a reduction to net income used in the calculation of basic and diluted EPS.

~~The Series A Preferred Stock ranks, with respect to dividends and distributions upon liquidation or dissolution:~~

senior to Common Stock and to each other class or series of capital stock established after the original issue date of the Series A Preferred Stock that is expressly made subordinated to the Series A Preferred Stock;

on a parity with any class or series of capital stock established after the original issue date of the Series A Preferred Stock that is not expressly made senior or subordinated to the Series A Preferred Stock;

~~junior to any class or series of capital stock established after the original issue date of the Series A Preferred Stock that is expressly made senior to the Series A Preferred Stock;~~

junior to all of existing and future indebtedness (including indebtedness outstanding under Duke Energy's credit facilities, unsecured senior notes, junior subordinated debentures and commercial paper) and other liabilities with respect to assets available to satisfy claims against Duke Energy; and

~~structurally subordinated to existing and future indebtedness and other liabilities of Duke Energy's subsidiaries and future preferred stock of subsidiaries.~~

The preferred stock has no maturity or mandatory redemption date, is not redeemable at the option of the holders and includes separate call options. The first call option allows Duke Energy to call the preferred stock at a redemption price of $25.50 per depositary share prior to June 15, 2024, in whole but not in part, at any time within 120 days after a ratings event where a rating agency amends, clarifies or changes the criteria it uses to assign equity credit for securities such as the preferred stock. The second call option allows Duke Energy to call the preferred stock, in whole or in part, at any time, on or after June 15, 2024, at a redemption price of $25 per depositary share. Duke Energy is also required to redeem all accumulated and unpaid dividends if either call option is exercised.

Holders of the preferred stock have no voting rights with respect to matters that generally require the approval of voting stockholders. The limited voting rights of holders of preferred stock include the right to vote as a single class on certain matters that may affect the preference or special rights of the preferred stock, except in the instance that Duke Energy elects to defer the payment of dividends for a total of six quarterly full dividend periods. If dividends are deferred for a cumulative total of six quarterly full dividend periods, whether or not for consecutive dividend periods, holders of the preferred stock have the right to nominate two additional Board members to the Duke Energy Board of Directors.

~~16.~~14. EMPLOYEE BENEFIT PLANS

DEFINED BENEFIT RETIREMENT PLANS

Duke Energy and certain subsidiaries maintain, and the Subsidiary Registrants participate in, qualified and non-qualified, non-contributory defined benefit retirement plans. Duke Energy's policy is to fund amounts on an actuarial basis to provide assets sufficient to meet benefit payments to be paid to plan participants.



FINANCIAL STATEMENTS	EMPLOYEE BENEFIT PLANS

QUALIFIED PENSION PLANS

The following tables include the components of net periodic pension costs for qualified pension plans.


	Three Months Ended March 31, 2019																								Three Months Ended March 31, 2020
				Duke						Duke			Duke			Duke			Duke									Duke						Duke			Duke			Duke			Duke
	Duke			Energy			Progress			Energy			Energy			Energy			Energy						Duke			Energy			Progress			Energy			Energy			Energy			Energy
(in millions)	Energy			Carolinas			Energy			Progress			Florida			Ohio			Indiana			Piedmont			Energy			Carolinas			Energy			Progress			Florida			Ohio			Indiana			Piedmont
Service cost	$	37		$	12		$	11		$	6		$	4		$	1		$	2		$	1		$	41		$	12		$	12		$	6		$	5		$	1		$	2		$	1
Interest cost on projected benefit obligation	83			20			26			12			14			5			6			3			67			16			21			10			12			4			6			2
Expected return on plan assets	(143		)	(38		)	(44		)	(23		)	(22		)	(8		)	(11		)	(5		)	(143		)	(36		)	(48		)	(22		)	(25		)	(7		)	(11		)	(5		)
Amortization of actuarial loss	24			6			9			3			6			1			2			2			34			7			11			5			6			2			3			2
Amortization of prior service credit	(8		)	(2		)	(1		)	—			—			—			—			(3		)	(8		)	(2		)	(1		)	—			—			—			—			(2		)
Amortization of settlement charges																									2			1			1			—			—			—			—			—
Net periodic pension costs	$	(7	)	$	(2	)	$	1		$	(2	)	$	2		$	(1	)	$	(1	)	$	(2	)	$	(7	)	$	(2	)	$	(4	)	$	(1	)	$	(2	)	$	—		$	—		$	(2	)


	Three Months Ended March 31, 2018																								Three Months Ended March 31, 2019
				Duke						Duke			Duke			Duke			Duke									Duke						Duke			Duke			Duke			Duke
	Duke			Energy			Progress			Energy			Energy			Energy			Energy						Duke			Energy			Progress			Energy			Energy			Energy			Energy
(in millions)	Energy			Carolinas			Energy			Progress			Florida			Ohio			Indiana			Piedmont			Energy			Carolinas			Energy			Progress			Florida			Ohio			Indiana			Piedmont
Service cost	$	45		$	15		$	13		$	7		$	5		$	1		$	2		$	2		$	37		$	12		$	11		$	6		$	4		$	1		$	2		$	1
Interest cost on projected benefit obligation	75			18			24			11			13			5			6			3			83			20			26			12			14			5			6			3
Expected return on plan assets	(140		)	(37		)	(45		)	(21		)	(23		)	(7		)	(10		)	(6		)	(143		)	(38		)	(44		)	(23		)	(22		)	(8		)	(11		)	(5		)
Amortization of actuarial loss	33			7			11			5			6			1			2			3			24			6			9			3			6			1			2			2
Amortization of prior service credit	(8		)	(2		)	(1		)	—			—			—			—			(3		)	(8		)	(2		)	(1		)	—			—			—			—			(3		)
Net periodic pension costs	$	5		$	1		$	2		$	2		$	1		$	—		$	—		$	(1	)	$	(7	)	$	(2	)	$	1		$	(2	)	$	2		$	(1	)	$	(1	)	$	(2	)



Commission file number	Registrant, State of Incorporation or Organization, Address of Principal Executive Offices and Telephone Number	IRS Employer Identification ~~No.~~Number

1-32853	DUKE ENERGY CORPORATION ~~(a Delaware corporation)~~ ~~550 South Tryon Street~~ ~~Charlotte, North Carolina 28202-1803~~ ~~704-382-3853~~	20-2777218



~~Commission file number~~	~~Registrant, State of Incorporation or Organization, Address of Principal Executive Offices, Telephone Number and IRS Employer Identification Number~~	~~Commission file number~~	~~Registrant, State of Incorporation or Organization, Address of Principal Executive Offices, Telephone Number and IRS Employer Identification Number~~
1-4928	DUKE ENERGY CAROLINAS, LLC	56-0205520


~~1-15929~~	~~PROGRESS ENERGY, INC.~~ ~~(a North Carolina corporation)~~ ~~410 South Wilmington Street~~ ~~Raleigh, North Carolina 27601-1748~~ ~~704-382-3853~~ ~~56-2155481~~
1-1232	DUKE ENERGY OHIO, INC.	31-0240030


~~1-3382~~	~~DUKE ENERGY PROGRESS, LLC~~ ~~(a North Carolina limited liability company)~~ ~~410 South Wilmington Street~~ ~~Raleigh, North Carolina 27601-1748~~ ~~704-382-3853~~ ~~56-0165465~~
1-3543	DUKE ENERGY INDIANA, LLC	35-0594457



Duke Energy Corporation (Duke Energy)	Yesx	☒	No¨	☐	Duke Energy Florida, LLC (Duke Energy Florida)	Yesx	☒	No¨	☐
Duke Energy Carolinas, LLC (Duke Energy Carolinas)	Yesx	☒	No¨	☐	Duke Energy Ohio, Inc. (Duke Energy Ohio)	Yesx	☒	No¨	☐
Progress Energy, Inc. (Progress Energy)	Yesx	☒	No¨	☐	Duke Energy Indiana, LLC (Duke Energy Indiana)	Yesx	☒	No¨	☐
Duke Energy Progress, LLC (Duke Energy Progress)	Yesx	☒	No¨	☐	Piedmont Natural Gas Company, Inc. (Piedmont)	Yesx	☒	No¨	☐



ý☒	QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934



¨☐	TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934


Registrant	Title of each classTrading symbolswhich registered


Duke Energy	Common Stock, $0.001 par valueDUKNew York Stock Exchange LLC


Duke Energy	5.125% Junior Subordinated Debentures due DUKHNew York Stock Exchange LLC


Duke Energy	5.625% Junior Subordinated Debentures due DUKBNew York Stock Exchange LLC


Duke Energy	Depositary Shares, each representing a 1/1,000th DUK PR ANew York Stock Exchange LLC



Duke Energy	Large accelerated filerx	☒	Accelerated filer¨	☐	Non-accelerated filer¨	☐	Smaller reporting company¨	☐	Emerging growth company¨	☐
Duke Energy Carolinas	Large accelerated filer¨	☐	Accelerated filer¨	☐	Non-accelerated filerx	☒	Smaller reporting company¨	☐	Emerging growth company¨	☐
Progress Energy	Large accelerated filer¨	☐	Accelerated filer¨	☐	Non-accelerated filerx	☒	Smaller reporting company¨	☐	Emerging growth company¨	☐
Duke Energy Progress	Large accelerated filer¨	☐	Accelerated filer¨	☐	Non-accelerated filerx	☒	Smaller reporting company¨	☐	Emerging growth company¨	☐
Duke Energy Florida	Large accelerated filer¨	☐	Accelerated filer¨	☐	Non-accelerated filerx	☒	Smaller reporting company¨	☐	Emerging growth company¨	☐
Duke Energy Ohio	Large accelerated filer¨	☐	Accelerated filer¨	☐	Non-accelerated filerx	☒	Smaller reporting company¨	☐	Emerging growth company¨	☐
Duke Energy Indiana	Large accelerated filer¨	☐	Accelerated filer¨	☐	Non-accelerated filerx	☒	Smaller reporting company¨	☐	Emerging growth company¨	☐
Piedmont	Large accelerated filer¨	☐	Accelerated filer¨	☐	Non-accelerated filerx	☒	Smaller reporting company¨	☐	Emerging growth company¨	☐



Duke Energy	Yes¨	☐	Nox	☒	Duke Energy Florida	Yes¨	☐	Nox	☒
Duke Energy Carolinas	Yes¨	☐	Nox	☒	Duke Energy Ohio	Yes¨	☐	Nox	☒
Progress Energy	Yes¨	☐	Nox	☒	Duke Energy Indiana	Yes¨	☐	Nox	☒
Duke Energy Progress	Yes¨	☐	Nox	☒	Piedmont	Yes¨	☐	Nox	☒



~~SECURITIES REGISTERED PURSUANT TO SECTION 12(b) OF THE ACT:~~
~~Registrant~~	~~Title of each class~~	~~Trading Symbol(s)~~	~~Name of each exchange on which registered~~
~~Duke Energy~~	~~Common Stock, $0.001 par value~~	~~DUK~~	~~New York Stock Exchange LLC~~
~~Duke Energy~~	~~5.125% Junior Subordinated Debentures due January 15, 2073~~	~~DUKH~~	~~New York Stock Exchange LLC~~
~~Duke Energy~~	~~5.625% Junior Subordinated Debentures due September 15, 2078~~	~~DUKB~~	~~New York Stock Exchange LLC~~
~~Duke Energy~~	~~Depositary Shares, each representing a 1/1,000th interest in a share of 5.75% Series A Cumulative Redeemable Perpetual Preferred Stock, par value $0.001 per share~~	~~DUK PR A~~	~~New York Stock Exchange LLC~~



1-15929	PROGRESS ENERGY, INC.	56-2155481



1-3274	DUKE ENERGY FLORIDA, LLC	59-0247770



1-6196	PIEDMONT NATURAL GAS COMPANY, INC.	56-0556998



Registrant	Description	Shares
Duke Energy	Common stock, $0.001 par value	~~728,046,950~~734,852,539


(a)	Net of income tax impact of approximately $23 million in the first quarter of 2020 and immaterial income tax impact in the first quarter of 2019.


(in millions)	March 31, 2019			December 31, 2018			March 31, 2020			December 31, 2019
ASSETS
Current Assets
Cash and cash equivalents	$	377		$	442		$	1,450		$	311
Receivables (net of allowance for doubtful accounts of $19 at 2019 and $16 at 2018)	775			962
Receivables of VIEs (net of allowance for doubtful accounts of $56 at 2019 and $55 at 2018)	1,981			2,172
Receivables (net of allowance for doubtful accounts of $28 at 2020 and $22 at 2019)							809			1,066
Receivables of VIEs (net of allowance for doubtful accounts of $61 at 2020 and $54 at 2019)							1,828			1,994
Inventory	3,102			3,084			3,324			3,232
Regulatory assets (includes $52 at 2019 and 2018 related to VIEs)	1,957			2,005
Other (includes $152 at 2019 and $162 at 2018 related to VIEs)	976			1,049
Regulatory assets (includes $53 at 2020 and $52 at 2019 related to VIEs)							1,770			1,796
Other (includes $300 at 2020 and $242 at 2019 related to VIEs)							1,000			764
Total current assets	9,168			9,714			10,181			9,163
Property, Plant and Equipment
Cost	139,377			134,458			149,676			147,654
Accumulated depreciation and amortization	(43,992		)	(43,126		)	(46,599		)	(45,773		)
Generation facilities to be retired, net	336			362			31			246
Net property, plant and equipment	95,721			91,694			103,108			102,127
Operating Lease Right-of-Use Assets, net	1,698			—
Other Noncurrent Assets
Goodwill	19,303			19,303			19,303			19,303
Regulatory assets (includes $1,032 at 2019 and $1,041 at 2018 related to VIEs)	13,301			13,617
Regulatory assets (includes $980 at 2020 and $989 at 2019 related to VIEs)							13,413			13,222
Nuclear decommissioning trust funds	7,374			6,720			7,052			8,140
Operating lease right-of-use assets, net							1,633			1,658
Investments in equity method unconsolidated affiliates	1,602			1,409			2,067			1,936
Other (includes $280 at 2019 and $261 at 2018 related to VIEs)	2,969			2,935
Other (includes $87 at 2020 and $110 at 2019 related to VIEs)							3,315			3,289
Total other noncurrent assets	44,549			43,984			46,783			47,548
Total Assets	$	151,136		$	145,392		$	160,072		$	158,838
LIABILITIES AND EQUITY
Current Liabilities
Accounts payable	$	2,538		$	3,487		$	2,364		$	3,487
Notes payable and commercial paper	3,029			3,410			3,033			3,135
Taxes accrued	470			577			493			392
Interest accrued	544			559			571			565
Current maturities of long-term debt (includes $227 at 2019 and 2018 related to VIEs)	2,501			3,406
Current maturities of long-term debt (includes $216 at 2020 and 2019 related to VIEs)							5,077			3,141
Asset retirement obligations	779			919			802			881
Regulatory liabilities	611			598			826			784
Other	1,810			2,085			2,004			2,367
Total current liabilities	12,282			15,041			15,170			14,752
Long-Term Debt (includes $4,065 at 2019 and $3,998 at 2018 related to VIEs)	53,681			51,123
Operating Lease Liabilities	1,488			—
Long-Term Debt (includes $3,966 at 2020 and $3,997 at 2019 related to VIEs)							56,311			54,985
Other Noncurrent Liabilities
Deferred income taxes	8,040			7,806			9,321			8,878
Asset retirement obligations	12,256			9,548			12,497			12,437
Regulatory liabilities	15,212			14,834			14,029			15,264
Operating lease liabilities							1,414			1,432
Accrued pension and other post-retirement benefit costs	974			988			919			934
Investment tax credits	571			568			659			624
Other (includes $212 at 2019 and 2018 related to VIEs)	1,587			1,650
Other (includes $258 at 2020 and $228 at 2019 related to VIEs)							1,669			1,581
Total other noncurrent liabilities	38,640			35,394			40,508			41,150
Commitments and Contingencies
Equity
Preferred stock, $0.001 par value, 40 million depositary shares authorized and outstanding at 2019	974			—
Common stock, $0.001 par value, 2 billion shares authorized; 728 million shares outstanding at 2019 and 727 million shares outstanding at 2018	1			1
Preferred stock, Series A, $0.001 par value, 40 million depositary shares authorized and outstanding at 2020 and 2019							973			973
Preferred stock, Series B, $0.001 par value, 1 million shares authorized and outstanding at 2020 and 2019							989			989
Common stock, $0.001 par value, 2 billion shares authorized; 735 million shares outstanding at 2020 and 733 million shares outstanding at 2019							1			1
Additional paid-in capital	40,823			40,795			40,930			40,881
Retained earnings	3,360			3,113			4,221			4,108
Accumulated other comprehensive loss	(128		)	(92		)	(193		)	(130		)
Total Duke Energy Corporation stockholders' equity	45,030			43,817			46,921			46,822
Noncontrolling interests	15			17			1,162			1,129
Total equity	45,045			43,834			48,083			47,951
Total Liabilities and Equity	$	151,136		$	145,392		$	160,072		$	158,838



											Accumulated Other Comprehensive
											(Loss) Income
														Net Unrealized						Total
											Net Gains			(Losses) Gains						Duke Energy
			Common			Additional					(Losses) on			on Available-			Pension and			Corporation
	Preferred		Stock	Common		Paid-in		Retained			Cash Flow			for-Sale-			OPEB			Stockholders'			Noncontrolling			Total
(in millions)	Stock		Shares	Stock		Capital		Earnings			Hedges			Securities			Adjustments			Equity			Interests			Equity
Balance at December 31, 2017	$	—	700	$	1	$	38,792	$	3,013		$	(10	)	$	12		$	(69	)	$	41,739		$	(2	)	$	41,737
Net income	—		—	—		—		620			—			—			—			620			2			622
Other comprehensive income (loss)	—		—	—		—		—			13			(3		)	1			11			—			11
Common stock issuances, including dividend reinvestment and employee benefits	—		1	—		47		—			—			—			—			47			—			47
Common stock dividends	—		—	—		—		(625		)	—			—			—			(625		)	—			(625		)
Distributions to noncontrolling interest in subsidiaries	—		—	—		—		—			—			—			—			—			(1		)	(1		)
Other^(a)	—		—	—		—		13			—			(13		)	—			—			7			7
Balance at March 31, 2018	$	—	701	$	1	$	38,839	$	3,021		$	3		$	(4	)	$	(68	)	$	41,792		$	6		$	41,798

Balance at December 31, 2018	$	—	727	$	1	$	40,795	$	3,113		$	(14	)	$	(3	)	$	(75	)	$	43,817		$	17		$	43,834
Net income (loss)	—		—	—		—		900			—			—			—			900			(7		)	893
Other comprehensive (loss) income	—		—	—		—		—			(16		)	4			—			(12		)	—			(12		)
Preferred stock issuances, net of issuance costs^(b)	974		—	—		—		—			—			—			—			974			—			974
Common stock issuances, including dividend reinvestment and employee benefits	—		1	—		28		—			—			—			—			28			—			28
Common stock dividends	—		—	—		—		(676		)	—			—			—			(676		)	—			(676		)
Other^(c)	—		—	—		—		23			(6		)	(1		)	(17		)	(1		)	5			4
Balance at March 31, 2019	$	974	728	$	1	$	40,823	$	3,360		$	(36	)	$	—		$	(92	)	$	45,030		$	15		$	45,045


(a)	Amounts in Retained Earnings and Accumulated Other Comprehensive (Loss) Income represent a cumulative-effect adjustment due to implementation of a new accounting standard related to Financial Instruments Classification and Measurement.


~~(b)~~	Duke Energy issued 40 million depositary shares of preferred stock, ~~in the first quarter of 2019.~~


~~(c)~~	Amounts in Retained Earnings and Accumulated Other Comprehensive (Loss) Income primarily represent impacts to accumulated other comprehensive income as a result of the adoption of Accounting Standards Update 2018-02: Reclassification of Certain Tax Effects from Accumulated Other Comprehensive Income.



				Accumulated Other
				Comprehensive
				Loss
				Net Losses on
	Member's			Cash Flow			Total
(in millions)	Equity			Hedges			Equity
Balance at December 31, 2017	$	11,368		$	(7	)	$	11,361
Net income	323			—			323
Other comprehensive income	—			1			1
Distributions to parent	(250		)	—			(250		)
Balance at March 31, 2018	$	11,441		$	(6	)	$	11,435

Balance at December 31, 2018	$	11,689		$	(6	)	$	11,683
Net income	293			—			293
Other	—			(1		)	(1		)
Balance at March 31, 2019	$	11,982		$	(7	)	$	11,975



						Accumulated Other Comprehensive (Loss) Income
									Net Unrealized						Total Progress
	Additional					Net Losses on			Gains (losses) on			Pension and			Energy, Inc.
	Paid-in			Retained		Cash Flow			Available-for-			OPEB			Stockholders'			Noncontrolling			Total
(in millions)	Capital			Earnings		Hedges			Sale Securities			Adjustments			Equity			Interests			Equity
Balance at December 31, 2017	$	9,143		$	4,350	$	(18	)	$	5		$	(12	)	$	13,468		$	(3	)	$	13,465
Net income	—			235		—			—			—			235			2			237
Other comprehensive income	—			—		2			—			—			2			—			2
Other^(a)	(1		)	6		—			(6		)	—			(1		)	—			(1		)
Balance at March 31, 2018	$	9,142		$	4,591	$	(16	)	$	(1	)	$	(12	)	$	13,704		$	(1	)	$	13,703

Balance at December 31, 2018	$	9,143		$	5,131	$	(12	)	$	(1	)	$	(7	)	$	14,254		$	3		$	14,257
Net income	—			249		—			—			—			249			(1		)	248
Other comprehensive income	—			—		2			—			1			3			—			3
Other^(b)	—			6		(4		)	—			(2		)	—			—			—
Balance at March 31, 2019	$	9,143		$	5,386	$	(14	)	$	(1	)	$	(8	)	$	14,506		$	2		$	14,508


~~(a)~~	Amounts in Retained Earnings and Accumulated Other Comprehensive Loss represent a cumulative-effect adjustment due to implementation of a new accounting standard related to Financial Instruments Classification and Measurement.Series A.


(c)	Amounts in Retained earnings primarily represent impacts due to implementation of a new accounting standard related to Current Estimated Credit Losses. See Note 1 for additional discussion.


(a)	Amounts primarily represent impacts due to implementation of a new accounting standard related to Current Estimated Credit Losses. See Note 1 for additional discussion.


			Accumulated							Accumulated
			Other							Other
			Comprehensive							Comprehensive
			Income (Loss)							Income (Loss)
			Net Unrealized							Net Unrealized
			Gains (Losses) on							Gains on
	Member's		Available-for-Sale			Total		Member's		Available-for-Sale			Total
(in millions)	Equity		Securities			Equity		Equity		Securities			Equity
Balance at December 31, 2017	$	5,614	$	4		$	5,618
Net income	103		—			103
Other^(a)	6		(6		)	—
Balance at March 31, 2018	$	5,723	$	(2	)	$	5,721

Balance at December 31, 2018	$	6,097	$	(2	)	$	6,095	$	6,097	$	(2	)	$	6,095
Net income	96		—			96		96		—			96
Other comprehensive income	—		1			1		—		1			1
Balance at March 31, 2019	$	6,193	$	(1	)	$	6,192	$	6,193	$	(1	)	$	6,192

Balance at December 31, 2019								$	6,789	$	(1	)	$	6,788
Net income								120		—			120
Other comprehensive income								—		1			1
Balance at March 31, 2020								$	6,909	$	—		$	6,909


~~(a)~~	Amounts in Member's Equity and Accumulated Other Comprehensive Income (Loss) represent a cumulative-effect adjustment due to implementation of a new accounting standard related to Financial Instruments Classification and Measurement.



~~Practical Expedient~~	~~Description~~
~~Package of transition practical expedients (for leases commenced prior to adoption date and must be adopted as a package)~~	Do not need to 1) reassess whether any expired or existing contracts are/or contain leases, 2) reassess the lease classification for any expired or existing leases and 3) reassess initial direct costs for any existing leases.
~~Short-term lease expedient (elect by class of underlying asset)~~	~~Elect as an accounting policy to not apply the recognition requirements to short-term leases by asset class.~~
~~Lease and non-lease components (elect by class of underlying asset)~~	Elect as an accounting policy to not separate non-lease components from lease components and instead account for each lease and associated non-lease component as a single lease component by asset class.
~~Hindsight expedient (when determining lease term)~~	~~Elect to use hindsight to determine the lease term.~~
~~Existing and expired land easements not previously accounted for as leases~~	~~Elect to not evaluate existing or expired easements under the new guidance and carry forward current accounting treatment.~~
~~Comparative reporting requirements for initial adoption~~	Elect to apply transition requirements at adoption date, recognize cumulative effect adjustment to retained earnings in period of adoption and not apply the new requirements to comparative periods, including disclosures.
~~Lessor expedient (elect by class of underlying asset)~~	Elect as an accounting policy to aggregate non-lease components with the related lease component when specified conditions are met by asset class. Account for the combined component based on its predominant characteristic (revenue or operating lease).



	January 1, 2020
			Duke				Duke		Duke
	Duke		Energy		Progress		Energy		Energy
(in millions)	Energy		Carolinas		Energy		Progress		Florida		Piedmont
Total pretax impact to Retained Earnings	$	120	$	16	$	2	$	1	$	1	$	1



	Three Months Ended March 31, 2019
	Electric		Gas				Total
	Utilities and		Utilities and		Commercial		Reportable
(in millions)	Infrastructure		Infrastructure		Renewables		Segments		Other			Eliminations			Total
Unaffiliated revenues	$	5,321	$	732	$	106	$	6,159	$	4		$	—		$	6,163
Intersegment revenues	8		24		—		32		17			(49		)	—
Total revenues	$	5,329	$	756	$	106	$	6,191	$	21		$	(49	)	$	6,163
Segment income (loss)	$	750	$	226	$	13	$	989	$	(89	)	$	—		$	900
Add back noncontrolling interest component															(7		)
Net income															$	893
Segment assets	$	130,406	$	12,639	$	4,378	$	147,423	$	3,536		$	177		$	151,136


(b)	~~Gas Utilities and Infrastructure includes an impairment~~Includes the allocation of ~~the investment in Constitution.~~losses to noncontrolling tax equity members. See Note 31 for additional information.


~~(c)~~	~~Other includes the loss on the sale of Beckjord described below, costs to achieve the Piedmont acquisition and a valuation allowance recorded against the AMT credits.~~


(a)	Duke Energy Carolinas will retire Allen Steam Station Units 1 through 3 by December 31, 2024, as part of the resolution of a lawsuit involving alleged New Source Review violations.