0001326160 duk:September2020DebtIssuance2.450CouponDue2030Member us-gaap:UnsecuredDebtMember 2020-09-30 0001326160 duk:ProgressEnergyMember duk:GeneralMember us-gaap:ElectricityUsRegulatedMember duk:ElectricUtilitiesandInfrastructureMember ~~2019-12-31 0001326160 duk:DukeEnergyOhioMember duk:CommercialMember us-gaap:NaturalGasUsRegulatedMember duk:GasUtilitiesandInfrastructureMember 2019-04-01 2019-06-30~~2019-07-01 2019-09-30

UNITED STATES SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

FORM 10-Q

(Mark One)



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

For the quarterly period ended ~~June~~September 30, 2020



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

For the transition period from _________to_________



Commission file number	Registrant, State of Incorporation or Organization, Address of Principal Executive Offices and Telephone Number	IRS Employer Identification Number

1-32853	DUKE ENERGY CORPORATION	20-2777218

(a Delaware corporation)

550 South Tryon Street

Charlotte, North Carolina 28202-1803

704-382-3853



1-4928	DUKE ENERGY CAROLINAS, LLC	56-0205520

(a North Carolina limited liability company)

526 South Church Street

Charlotte, North Carolina 28202-1803

704-382-3853



1-15929	PROGRESS ENERGY, INC.	56-2155481

(a North Carolina corporation)

410 South Wilmington Street

Raleigh, North Carolina 27601-1748

704-382-3853



1-3382	DUKE ENERGY PROGRESS, LLC	56-0165465

(a North Carolina limited liability company)

410 South Wilmington Street

Raleigh, North Carolina 27601-1748

704-382-3853



1-3274	DUKE ENERGY FLORIDA, LLC	59-0247770

(a Florida limited liability company)

299 First Avenue North

St. Petersburg, Florida 33701

704-382-3853



1-1232	DUKE ENERGY OHIO, INC.	31-0240030

(an Ohio corporation)

139 East Fourth Street

Cincinnati, Ohio 45202

704-382-3853



1-3543	DUKE ENERGY INDIANA, LLC	35-0594457

(an Indiana limited liability company)

1000 East Main Street

Plainfield, Indiana 46168

704-382-3853



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

(a North Carolina corporation)

4720 Piedmont Row Drive

Charlotte, North Carolina 28210

704-364-3120

SECURITIES REGISTERED PURSUANT TO SECTION 12(b) OF THE ACT:

Name of each exchange on


Registrant	Title of each class Trading symbols which registered


Duke Energy	Common Stock, $0.001 par value DUK New York Stock Exchange LLC


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

January 15, 2073


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

September 15, 2078


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

interest in a share of 5.75% Series A Cumulative

Redeemable Perpetual Preferred Stock, par value

$0.001 per share

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.



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

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files).



Duke Energy	Yes	☒	No	☐	Duke Energy Florida	Yes	☒	No	☐
Duke Energy Carolinas	Yes	☒	No	☐	Duke Energy Ohio	Yes	☒	No	☐
Progress Energy	Yes	☒	No	☐	Duke Energy Indiana	Yes	☒	No	☐
Duke Energy Progress	Yes	☒	No	☐	Piedmont	Yes	☒	No	☐

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company” and "emerging growth company" in Rule 12b-2 of the Exchange Act.



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

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ¨

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).



Duke Energy	Yes	☐	No	☒	Duke Energy Florida	Yes	☐	No	☒
Duke Energy Carolinas	Yes	☐	No	☒	Duke Energy Ohio	Yes	☐	No	☒
Progress Energy	Yes	☐	No	☒	Duke Energy Indiana	Yes	☐	No	☒
Duke Energy Progress	Yes	☐	No	☒	Piedmont	Yes	☐	No	☒

Number of shares of common stock outstanding at ~~July~~October 31, 2020:



Registrant	Description	Shares
Duke Energy	Common stock, $0.001 par value	~~735,432,137~~735,958,560

This combined Form 10-Q is filed separately by eight registrants: Duke Energy, Duke Energy Carolinas, Progress Energy, Duke Energy Progress, Duke Energy Florida, Duke Energy Ohio, Duke Energy Indiana and Piedmont (collectively the Duke Energy Registrants). Information contained herein relating to any individual registrant is filed by such registrant solely on its own behalf. Each registrant makes no representation as to information relating exclusively to the other registrants.

Duke Energy Carolinas, Progress Energy, Duke Energy Progress, Duke Energy Florida, Duke Energy Ohio, Duke Energy Indiana and Piedmont meet the conditions set forth in General Instructions H(1)(a) and (b) of Form 10-Q and are therefore filing this form with the reduced disclosure format specified in General Instructions H(2) of Form 10-Q.

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	15

	Progress Energy, Inc. Financial Statements	19

	Duke Energy Progress, LLC Financial Statements	23

	Duke Energy Florida, LLC Financial Statements	27

	Duke Energy Ohio, Inc. Financial Statements	31

	Duke Energy Indiana, LLC Financial Statements	35

	Piedmont Natural Gas Company, Inc. Financial Statements	39

	Combined Notes to Condensed Consolidated Financial Statements
	Note 1 – Organization and Basis of Presentation	43
	Note 2 – Business Segments	46
	Note 3 – Regulatory Matters	48
	Note 4 – Commitments and Contingencies	60
	Note 5 – Debt and Credit Facilities	6364
	Note 6 – ~~Goodwill~~Asset Retirement Obligations	65
	Note 7 – ~~Related Party Transactions~~Goodwill	66
	Note 8 – ~~Derivatives and Hedging~~Related Party Transactions	67
	Note 9 – Derivatives and Hedging	68
	Note 10 – Investments in Debt and Equity Securities	72
	~~Note 10 – Fair Value Measurements~~	7774
	Note 11 – ~~Variable Interest Entities~~Fair Value Measurements	8379
	Note 12 – ~~Revenue~~Variable Interest Entities	8785
	Note 13 – ~~Stockholders' Equity~~Revenue	9389
	Note 14 – ~~Employee Benefit Plans~~	94
	~~Note 15 – Income Taxes~~Stockholders' Equity	95
	Note 15 – Employee Benefit Plans	96
	Note 16 – Income Taxes	97
	Note 17 – Subsequent Events	9698

Item 2.	Management's Discussion and Analysis of Financial Condition and Results of Operations	9799

Item 3.	Quantitative and Qualitative Disclosures About Market Risk	~~115~~119

Item 4.	Controls and Procedures	~~115~~119

PART II. OTHER INFORMATION
Item 1.	Legal Proceedings	~~117~~120

Item 1A.	Risk Factors	~~117~~120

Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	~~117~~120

Item 6.	Exhibits	~~118~~121

	Signatures	~~121~~124



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;



FORWARD-LOOKING STATEMENTS


◦	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~~Office of Public Counsel and other customer representatives

2017 Settlement	Second Revised and Restated Settlement Agreement in 2017 among Duke Energy Florida, the Florida ~~OPC~~Office of Public Counsel and other customer 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

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

AFS	Available for Sale

AFUDC	Allowance for funds used during construction

AMT	Alternative Minimum Tax

ARO	Asset retirement obligations

Bison	Bison Insurance Company Limited

CC	Combined Cycle

CCR	Coal Combustion Residuals

CARES Act	Coronavirus Aid, Relief and Economic Security Act

Coal Ash Act	North Carolina Coal Ash Management Act of 2014

the ~~Company~~company	Duke Energy Corporation and its subsidiaries

Constitution	Constitution Pipeline Company, LLC

COVID-19	Coronavirus Disease 2019

CRC	Cinergy Receivables Company, LLC

Crystal River Unit 3	Crystal River Unit 3 Nuclear Plant

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

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

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

EDIT	Excess deferred income tax

EPA	U.S. Environmental Protection Agency

EPS	Earnings Per Share

ESP	Electric Security Plan

ETR	Effective tax rate

Exchange Act	Securities Exchange Act of 1934



GLOSSARY OF TERMS



FERC	Federal Energy Regulatory Commission

FPSC	Florida Public Service Commission

FTR	Financial transmission rights

GAAP	Generally accepted accounting principles in the U.S.

GAAP Reported Earnings ~~(Loss)~~	Net Income ~~(Loss)~~ Available to Duke Energy Corporation Common Stockholders

GAAP Reported ~~Earnings (Loss) Per Share~~EPS	Basic Earnings ~~(Loss)~~ Per Share Available to Duke Energy Corporation common stockholders

GWh	Gigawatt-hours

IGCC	Integrated Gasification Combined Cycle

IMR	Integrity Management Rider

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

KPSC	Kentucky Public Service Commission

LLC	Limited Liability Company

MGP	Manufactured gas plant

MMBtu	Million British Thermal Unit

MW	Megawatt

MWh	Megawatt-hour

NCUC	North Carolina Utilities Commission

NDTF	Nuclear decommissioning trust funds

NPNS	Normal purchase/normal sale

OPEB	Other Post-Retirement Benefit Obligations

ORS	South Carolina Office of Regulatory Staff

OVEC	Ohio Valley Electric Corporation

Piedmont	Piedmont Natural Gas Company, Inc.

PPA	Purchase Power Agreement

Progress Energy	Progress Energy, Inc.

PSCSC	Public Service Commission of South Carolina

PUCO	Public Utilities Commission of Ohio

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

TPUC	Tennessee Public Utility Commission

U.S.	United States

VIE	Variable Interest Entity

WACC	Weighted Average Cost of Capital



FINANCIAL STATEMENTS

ITEM 1. FINANCIAL STATEMENTS

DUKE ENERGY CORPORATION

Condensed Consolidated Statements of Operations

(Unaudited)


	Three Months Ended					Six Months Ended					Three Months Ended						Nine Months Ended
	June 30,					June 30,					September 30,						September 30,
(in millions, except per share amounts)	2020			2019		2020			2019		2020			2019			2020			2019
Operating Revenues
Regulated electric	$	4,963		$	5,423	$	10,087		$	10,708	$	6,315		$	6,515		$	16,402		$	17,223
Regulated natural gas	263			280		901			1,008		214			223			1,115			1,231
Nonregulated electric and other	195			170		382			320		192			202			574			522
Total operating revenues	5,421			5,873		11,370			12,036		6,721			6,940			18,091			18,976
Operating Expenses
Fuel used in electric generation and purchased power	1,349			1,641		2,796			3,250		1,849			1,978			4,645			5,228
Cost of natural gas	59			76		258			403		41			48			299			451
Operation, maintenance and other	1,353			1,434		2,692			2,853		1,450			1,484			4,142			4,337
Depreciation and amortization	1,150			1,089		2,280			2,178		1,217			1,186			3,497			3,364
Property and other taxes	334			334		679			677		324			335			1,003			1,012
Impairment charges	6			4		8			4		28			(20		)	36			(16		)
Total operating expenses	4,251			4,578		8,713			9,365		4,909			5,011			13,622			14,376
Gains on Sales of Other Assets and Other, net	7			3		8			—		2			—			10			—
Operating Income	1,177			1,298		2,665			2,671		1,814			1,929			4,479			4,600
Other Income and Expenses
Equity in (losses) earnings of unconsolidated affiliates	(1,968		)	44		(1,924		)	87		(80		)	50			(2,004		)	137
Other income and expenses, net	137			89		183			204		127			104			310			308
Total other income and expenses	(1,831		)	133		(1,741		)	291		47			154			(1,694		)	445
Interest Expense	554			542		1,105			1,085		522			572			1,627			1,657
(Loss) Income Before Income Taxes	(1,208		)	889		(181		)	1,877
Income Tax (Benefit) Expense	(316		)	141		(179		)	236
Net (Loss) Income	(892		)	748		(2		)	1,641
Income Before Income Taxes											1,339			1,511			1,158			3,388
Income Tax Expense (Benefit)											105			188			(74		)	424
Net Income											1,234			1,323			1,232			2,964
Add: Net Loss Attributable to Noncontrolling Interests	90			84		138			91		70			19			208			110
Net (Loss) Income Attributable to Duke Energy Corporation	(802		)	832		136			1,732
Net Income Attributable to Duke Energy Corporation											1,304			1,342			1,440			3,074
Less: Preferred Dividends	15			12		54			12		39			15			93			27
Net (Loss) Income Available to Duke Energy Corporation Common Stockholders	$	(817	)	$	820	$	82		$	1,720
Net Income Available to Duke Energy Corporation Common Stockholders											$	1,265		$	1,327		$	1,347		$	3,047

Earnings (Loss) Per Share – Basic and Diluted
Net (loss) income available to Duke Energy Corporation common stockholders
Earnings Per Share – Basic and Diluted
Basic and Diluted	$	(1.13	)	$	1.12	$	0.11		$	2.36	$	1.74		$	1.82		$	1.85		$	4.18
Weighted average shares outstanding
Basic	735			728		734			728
Diluted	735			728		735			728
Weighted Average Shares Outstanding
Basic and Diluted											735			729			735			728

~~See Notes to Condensed Consolidated Financial Statements~~



FINANCIAL STATEMENTS

DUKE ENERGY CORPORATION

Condensed Consolidated Statements of Comprehensive Income

(Unaudited)

Three Months Ended Six Months Ended
June 30, June 30,
(in millions) 2020
2019
2020
2019
Net (Loss) Income $ (892 ) $ 748
$ (2 ) $ 1,641
Other Comprehensive Loss, net of tax^(a)

Pension and OPEB adjustments (1 ) 3
—
3
Net unrealized gains (losses) on cash flow hedges 5
(29 ) (76 ) (46 )
Reclassification into earnings from cash flow hedges 2
2
4
3
Unrealized gains on available-for-sale securities 6
4
7
8
Other Comprehensive Income (Loss), net of tax 12
(20 ) (65 ) (32 )
Comprehensive (Loss) Income (880 ) 728
(67 ) 1,609
Add: Comprehensive Loss Attributable to Noncontrolling Interests 88
84
150
91
Comprehensive (Loss) Income Attributable to Duke Energy (792 ) 812
83
1,700
Less: Preferred Dividends 15
12
54
12
Comprehensive (Loss) Income Available to Duke Energy Corporation Common Stockholders $ (807 ) $ 800
$ 29
$ 1,688



	Three Months Ended						Nine Months Ended
	September 30,						September 30,
(in millions)	2020			2019			2020			2019
Net Income	$	1,234		$	1,323		$	1,232		$	2,964
Other Comprehensive Loss, net of tax^(a)
Pension and OPEB adjustments	1			(2		)	1			1
Net unrealized losses on cash flow hedges	(83		)	(16		)	(159		)	(62		)
Reclassification into earnings from cash flow hedges	4			1			8			4
Unrealized (losses) gains on available-for-sale securities	(2		)	2			5			10
Other Comprehensive Loss, net of tax	(80		)	(15		)	(145		)	(47		)
Comprehensive Income	1,154			1,308			1,087			2,917
Add: Comprehensive Loss Attributable to Noncontrolling Interests	70			19			220			110
Comprehensive Income Attributable to Duke Energy	1,224			1,327			1,307			3,027
Less: Preferred Dividends	39			15			93			27
Comprehensive Income Available to Duke Energy Corporation Common Stockholders	$	1,185		$	1,312		$	1,214		$	3,000


(a)	Net of income tax impacts of approximately ~~$20 million and $10~~$24 million for the ~~six~~three months ended ~~June~~September 30, 2020, and $43 million and $14 million for the nine months ended September 30, 2020, and 2019, respectively. All other periods presented include immaterial income tax impacts.

~~See Notes to Condensed Consolidated Financial Statements~~



FINANCIAL STATEMENTS

DUKE ENERGY CORPORATION

Condensed Consolidated Balance Sheets

(Unaudited)


(in millions)	June 30, 2020			December 31, 2019			September 30, 2020			December 31, 2019
ASSETS
Current Assets
Cash and cash equivalents	$	341		$	311		$	308		$	311
Receivables (net of allowance for doubtful accounts of $23 at 2020 and $22 at 2019)	753			1,066
Receivables of VIEs (net of allowance for doubtful accounts of $79 at 2020 and $54 at 2019)	2,049			1,994
Receivables (net of allowance for doubtful accounts of $27 at 2020 and $22 at 2019)							719			1,066
Receivables of VIEs (net of allowance for doubtful accounts of $106 at 2020 and $54 at 2019)							2,320			1,994
Inventory	3,289			3,232			3,190			3,232
Regulatory assets (includes $53 at 2020 and $52 at 2019 related to VIEs)	1,774			1,796			1,637			1,796
Other (includes $260 at 2020 and $242 at 2019 related to VIEs)	1,031			764
Other (includes $335 at 2020 and $242 at 2019 related to VIEs)							505			764
Total current assets	9,237			9,163			8,679			9,163
Property, Plant and Equipment
Cost	151,592			147,654			153,916			147,654
Accumulated depreciation and amortization	(47,295		)	(45,773		)	(48,185		)	(45,773		)
Generation facilities to be retired, net	28			246			29			246
Net property, plant and equipment	104,325			102,127			105,760			102,127
Other Noncurrent Assets
Goodwill	19,303			19,303			19,303			19,303
Regulatory assets (includes $969 at 2020 and $989 at 2019 related to VIEs)	13,285			13,222
Regulatory assets (includes $951 at 2020 and $989 at 2019 related to VIEs)							13,264			13,222
Nuclear decommissioning trust funds	8,000			8,140			8,363			8,140
Operating lease right-of-use assets, net	1,580			1,658			1,577			1,658
Investments in equity method unconsolidated affiliates	861			1,936			924			1,936
Other (includes $85 at 2020 and $110 at 2019 related to VIEs)	3,458			3,289
Other (includes $90 at 2020 and $110 at 2019 related to VIEs)							3,539			3,289
Total other noncurrent assets	46,487			47,548			46,970			47,548
Total Assets	$	160,049		$	158,838		$	161,409		$	158,838
LIABILITIES AND EQUITY
Current Liabilities
Accounts payable	$	2,398		$	3,487		$	2,486		$	3,487
Notes payable and commercial paper	4,785			3,135			3,425			3,135
Taxes accrued	657			392			768			392
Interest accrued	569			565			556			565
Current maturities of long-term debt (includes $462 at 2020 and $216 at 2019 related to VIEs)	3,756			3,141
Current maturities of long-term debt (includes $466 at 2020 and $216 at 2019 related to VIEs)							4,669			3,141
Asset retirement obligations	729			881			742			881
Regulatory liabilities	898			784			1,218			784
Other	2,898			2,367			2,829			2,367
Total current liabilities	16,690			14,752			16,693			14,752
Long-Term Debt (includes $3,643 at 2020 and $3,997 at 2019 related to VIEs)	56,143			54,985
Long-Term Debt (includes $3,628 at 2020 and $3,997 at 2019 related to VIEs)							56,049			54,985
Other Noncurrent Liabilities
Deferred income taxes	8,979			8,878			9,170			8,878
Asset retirement obligations	12,539			12,437			12,912			12,437
Regulatory liabilities	14,553			15,264			14,546			15,264
Operating lease liabilities	1,377			1,432			1,379			1,432
Accrued pension and other post-retirement benefit costs	911			934			903			934
Investment tax credits	683			624			689			624
Other (includes $251 at 2020 and $228 at 2019 related to VIEs)	1,563			1,581
Other (includes $342 at 2020 and $228 at 2019 related to VIEs)							1,773			1,581
Total other noncurrent liabilities	40,605			41,150			41,372			41,150
Commitments and Contingencies
Equity
Preferred stock, Series A, $0.001 par value, 40 million depositary shares authorized and outstanding at 2020 and 2019	973			973			973			973
Preferred stock, Series B, $0.001 par value, 1 million shares authorized and outstanding at 2020 and 2019	989			989			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
Common stock, $0.001 par value, 2 billion shares authorized; 736 million shares outstanding at 2020 and 733 million shares outstanding at 2019							1			1
Additional paid-in capital	40,997			40,881			41,046			40,881
Retained earnings	2,707			4,108			3,260			4,108
Accumulated other comprehensive loss	(183		)	(130		)	(263		)	(130		)
Total Duke Energy Corporation stockholders' equity	45,484			46,822			46,006			46,822
Noncontrolling interests	1,127			1,129			1,289			1,129
Total equity	46,611			47,951			47,295			47,951
Total Liabilities and Equity	$	160,049		$	158,838		$	161,409		$	158,838

~~See Notes to Condensed Consolidated Financial Statements~~



FINANCIAL STATEMENTS

DUKE ENERGY CORPORATION

Condensed Consolidated Statements of Cash Flows

(Unaudited)


	Six Months Ended							Nine Months Ended
	June 30,							September 30,
(in millions)	2020				2019			2020			2019
CASH FLOWS FROM OPERATING ACTIVITIES
Net (loss) income	$	(2	)	��	$	1,641		$	1,232		$	2,964
Adjustments to reconcile net (loss) income to net cash provided by operating activities:
Depreciation, amortization and accretion (including amortization of nuclear fuel)	2,651				2,483			4,081			3,831
Equity in losses (earnings) of unconsolidated affiliates	1,924				(87		)	2,004			(137		)
Equity component of AFUDC	(76		)		(67		)	(112		)	(99		)
Gains on sales of other assets	(8		)		—			(10		)	—
Impairment charges	8				4			36			(16		)
Deferred income taxes	105				527			210			736
Contributions to qualified pension plans								—			(77		)
Payments for asset retirement obligations	(287		)		(336		)	(463		)	(582		)
Provision for rate refunds	(12		)		57			(15		)	61
Refund of AMT credit carryforwards								572			—
(Increase) decrease in
Net realized and unrealized mark-to-market and hedging transactions	(24		)		(11		)	87			(4		)
Receivables	281				304			58			62
Inventory	(56		)		(110		)	43			(3		)
Other current assets	(124		)		(265		)	199			(134		)
Increase (decrease) in
Accounts payable	(638		)		(700		)	(563		)	(538		)
Taxes accrued	273				(56		)	386			125
Other current liabilities	(344		)		(378		)	(284		)	(198		)
Other assets	(193		)		(1		)	(328		)	(279		)
Other liabilities	(121		)		51			(367		)	(75		)
Net cash provided by operating activities	3,357				3,056			6,766			5,637
CASH FLOWS FROM INVESTING ACTIVITIES
Capital expenditures	(5,103		)		(5,465		)	(7,408		)	(8,084		)
Contributions to equity method investments	(164		)		(162		)	(276		)	(264		)
Purchases of debt and equity securities	(3,818		)		(2,316		)	(6,160		)	(3,105		)
Proceeds from sales and maturities of debt and equity securities	3,755				2,302			6,087			3,092
Other	(141		)		(147		)	(207		)	(272		)
Net cash used in investing activities	(5,471		)		(5,788		)	(7,964		)	(8,633		)
CASH FLOWS FROM FINANCING ACTIVITIES
Proceeds from the:
Issuance of long-term debt	3,788				4,622			6,162			6,131
Issuance of preferred stock	—				973			—			1,963
Issuance of common stock	57				27			75			41
Payments for the redemption of long-term debt	(1,951		)		(2,155		)	(3,468		)	(2,737		)
Proceeds from the issuance of short-term debt with original maturities greater than 90 days	1,866				240			2,372			339
Payments for the redemption of short-term debt with original maturities greater than 90 days	(113		)		(299		)	(1,143		)	(479		)
Notes payable and commercial paper	(129		)		383			(969		)	(879		)
Contributions from noncontrolling interests	163				193			402			615
Dividends paid	(1,391		)		(1,312		)	(2,113		)	(1,990		)
Other	(108		)		(50		)	(93		)	(17		)
Net cash provided by financing activities	2,182				2,622			1,225			2,987
Net increase (decrease) in cash, cash equivalents and restricted cash	68				(110		)	27			(9		)
Cash, cash equivalents and restricted cash at beginning of period	573				591			573			591
Cash, cash equivalents and restricted cash at end of period	$	641			$	481		$	600		$	582
Supplemental Disclosures:
Significant non-cash transactions:
Accrued capital expenditures	$	945			$	917		$	992		$	1,073
Non-cash dividends	54				54			82			81

~~See Notes to Condensed Consolidated Financial Statements~~



FINANCIAL STATEMENTS

DUKE ENERGY CORPORATION

Condensed Consolidated Statements of Changes in Equity

(Unaudited)


	Three Months Ended June 30, 2019 and 2020																												Three Months Ended September 30, 2019 and 2020
												Accumulated Other Comprehensive																												Accumulated Other Comprehensive
												(Loss) Income																												(Loss) Income
															Net Unrealized					Total																							Net Unrealized						Total
												Net Gains			(Losses) Gains					Duke Energy																				Net Gains			(Losses) Gains						Duke Energy
				Common			Additional					(Losses) on			on Available-		Pension and			Corporation											Common			Additional						(Losses) on			on Available-			Pension and			Corporation
	Preferred			Stock	Common		Paid-in		Retained			Cash Flow			for-Sale-		OPEB			Stockholders'			Noncontrolling			Total			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			Stock		Shares	Stock		Capital			Earnings			Hedges			Securities			Adjustments			Equity			Interests			Equity
Balance at March 31, 2019	$	974		728	$	1	$	40,823	$	3,360		$	(36	)	$	—	$	(92	)	$	45,030		$	15		$	45,045
Balance at June 30, 2019																													$	973	728	$	1	$	40,885		$	3,502		$	(63	)	$	4		$	(89	)	$	45,213		$	119		$	45,332
Net income (loss)	—			—	—		—		820			—			—		—			820			(84		)	736			—		—	—		—			1,327			—			—			—			1,327			(19		)	1,308
Other comprehensive (loss) income	—			—	—		—		—			(27		)	4		3			(20		)	—			(20		)	—		—	—		—			—			(15		)	2			(2		)	(15		)	—			(15		)
Preferred stock issuances, net of issuance costs	(1		)	—	—		—		—			—			—		—			(1		)	—			(1		)
Preferred stock, Series B, issuances, net of issuance costs^(a)																													990		—	—		—			—			—			—			—			990			—			990
Common stock issuances, including dividend reinvestment and employee benefits	—			—	—		61		—			—			—		—			61			—			61			—		1	—		69			—			—			—			—			69			—			69
Common stock dividends	—			—	—		—		(678		)	—			—		—			(678		)	—			(678		)	—		—	—		—			(690		)	—			—			—			(690		)	—			(690		)
Contribution from noncontrolling interest in subsidiaries^(a)	—			—	—		—		—			—			—		—			—			193			193
Distributions to noncontrolling interest in subsidiaries	—			—	—		—		—			—			—		—			—			(1		)	(1		)
Sale of noncontrolling interest^(b)																													—		—	—		(465		)	—			10			—			—			(455		)	863			408
Contribution from noncontrolling interests, net of transaction costs																													—		—	—		—			—			—			—			—			—			7			7
Other	—			—	—		1		—			—			—		—			1			(4		)	(3		)	—		—	—		(1		)	—			—			—			—			(1		)	(1		)	(2		)
Balance at June 30, 2019	$	973		728	$	1	$	40,885	$	3,502		$	(63	)	$	4	$	(89	)	$	45,213		$	119		$	45,332
Balance at September 30, 2019																													$	1,963	729	$	1	$	40,488		$	4,139		$	(68	)	$	6		$	(91	)	$	46,438		$	969		$	47,407

Balance at March 31, 2020	$	1,962		735	$	1	$	40,930	$	4,221		$	(116	)	$	4	$	(81	)	$	46,921		$	1,162		$	48,083
Balance at June 30, 2020																													$	1,962	735	$	1	$	40,997		$	2,707		$	(111	)	$	10		$	(82	)	$	45,484		$	1,127		$	46,611
Net income (loss)	—			—	—		—		(817		)	—			—		—			(817		)	(90		)	(907		)	—		—	—		—			1,265			—			—			—			1,265			(70		)	1,195
Other comprehensive (loss) income	—			—	—		—		—			5			6		(1		)	10			2			12			—		—	—		—			—			(79		)	(2		)	1			(80		)	—			(80		)
Common stock issuances, including dividend reinvestment and employee benefits	—			—	—		66		—			—			—		—			66			—			66			—		1	—		65			—			—			—			—			65			—			65
Common stock dividends	—			—	—		—		(696		)	—			—		—			(696		)	—			(696		)	—		—	—		—			(712		)	—			—			—			(712		)	—			(712		)
Contribution from noncontrolling interest in subsidiaries^(a)	—			—	—		—		—			—			—		—			—			60			60
Contribution from noncontrolling interests, net of transaction costs^(d)																													—		—	—		(17		)	—			—			—			—			(17		)	239			222
Distributions to noncontrolling interest in subsidiaries	—			—	—		—		—			—			—		—			—			(7		)	(7		)	—		—	—		—			—			—			—			—			—			(8		)	(8		)
Other	—			—	—		1		(1		)	—			—		—			—			—			—			—		—	—		1			—			—			—			—			1			1			2
Balance at June 30, 2020	$	1,962		735	$	1	$	40,997	$	2,707		$	(111	)	$	10	$	(82	)	$	45,484		$	1,127		$	46,611
Balance at September 30, 2020																													$	1,962	736	$	1	$	41,046		$	3,260		$	(190	)	$	8		$	(81	)	$	46,006		$	1,289		$	47,295

~~See Notes to Condensed Consolidated Financial Statements~~



FINANCIAL STATEMENTS


	Six Months Ended June 30, 2019 and 2020																												Nine Months Ended September 30, 2019 and 2020
											Accumulated Other Comprehensive																													Accumulated Other Comprehensive
											(Loss) Income																													(Loss) Income
														Net Unrealized						Total																							Net Unrealized						Total
											Net			(Losses) Gains						Duke Energy																				Net			(Losses) Gains						Duke Energy
			Common			Additional					Losses on			on Available-			Pension and			Corporation											Common			Additional						Losses on			on Available-			Pension and			Corporation
	Preferred		Stock	Common		Paid-in		Retained			Cash Flow			for-Sale-			OPEB			Stockholders'			Noncontrolling			Total			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			Stock		Shares	Stock		Capital			Earnings			Hedges			Securities			Adjustments			Equity			Interests			Equity
Balance at December 31, 2018	$	—	727	$	1	$	40,795	$	3,113		$	(14	)	$	(3	)	$	(75	)	$	43,817		$	17		$	43,834		$	—	727	$	1	$	40,795		$	3,113		$	(14	)	$	(3	)	$	(75	)	$	43,817		$	17		$	43,834
Net income (loss)	—		—	—		—		1,720			—			—			—			1,720			(91		)	1,629			—		—	—		—			3,047			—			—			—			3,047			(110		)	2,937
Other comprehensive (loss) income	—		—	—		—		—			(43		)	8			3			(32		)	—			(32		)	—		—	—		—			—			(58		)	10			1			(47		)	—			(47		)
Preferred stock, Series A, issuances, net of issuance costs^(b)(c)	973		—	—		—		—			—			—			—			973			—			973			973		—	—		—			—			—			—			—			973			—			973
Preferred stock, Series B, issuances, net of issuance costs^(a)																													990		—	—		—			—			—			—			—			990			—			990
Common stock issuances, including dividend reinvestment and employee benefits	—		1	—		89		—			—			—			—			89			—			89			—		2	—		158			—			—			—			—			158			—			158
Common stock dividends	—		—	—		—		(1,354		)	—			—			—			(1,354		)	—			(1,354		)	—		—	—		—			(2,044		)	—			—			—			(2,044		)	—			(2,044		)
Contributions from noncontrolling interest in subsidiaries^(a)	—		—	—		—		—			—			—			—			—			193			193
Sale of noncontrolling interest^(b)																													—		—	—		(465		)	—			10			—			—			(455		)	863			408
Contributions from noncontrolling interests, net of transaction costs^(d)																													—		—	—		—			—			—			—			—			—			200			200
Distributions to noncontrolling interest in subsidiaries	—		—	—		—		—			—			—			—			—			(1		)	(1		)	—		—	—		—			—			—			—			—			—			(1		)	(1		)
Other^(c)	—		—	—		1		23			(6		)	(1		)	(17		)	—			1			1
Balance at June 30, 2019	$	973	728	$	1	$	40,885	$	3,502		$	(63	)	$	4		$	(89	)	$	45,213		$	119		$	45,332
Other^(e)																													—		—	—		—			23			(6		)	(1		)	(17		)	(1		)	—			(1		)
Balance at September 30, 2019																													$	1,963	729	$	1	$	40,488		$	4,139		$	(68	)	$	6		$	(91	)	$	46,438		$	969		$	47,407

Balance at December 31, 2019	$	1,962	733	$	1	$	40,881	$	4,108		$	(51	)	$	3		$	(82	)	$	46,822		$	1,129		$	47,951		$	1,962	733	$	1	$	40,881		$	4,108		$	(51	)	$	3		$	(82	)	$	46,822		$	1,129		$	47,951
Net income (loss)	—		—	—		—		82			—			—			—			82			(138		)	(56		)	—		—	—		—			1,347			—			—			—			1,347			(208		)	1,139
Other comprehensive (loss) income	—		—	—		—		—			(60		)	7			—			(53		)	(12		)	(65		)	—		—	—		—			—			(139		)	5			1			(133		)	(12		)	(145		)
Common stock issuances, including dividend reinvestment and employee benefits	—		2	—		116		—			—			—			—			116			—			116			—		3	—		181			—			—			—			—			181			—			181
Common stock dividends	—		—	—		—		(1,391		)	—			—			—			(1,391		)	—			(1,391		)	—		—	—		—			(2,103		)	—			—			—			(2,103		)	—			(2,103		)
Contributions from noncontrolling interest in subsidiaries^(a)	—		—	—		—		—			—			—			—			—			163			163
Contributions from noncontrolling interests, net of transaction costs^(d)																													—		—	—		(17		)	—			—			—			—			(17		)	402			385
Distributions to noncontrolling interest in subsidiaries	—		—	—		—		—			—			—			—			—			(14		)	(14		)	—		—	—		—			—			—			—			—			—			(22		)	(22		)
Other^(d)	—		—	—		—		(92		)	—			—			—			(92		)	(1		)	(93		)
Balance at June 30, 2020	$	1,962	735	$	1	$	40,997	$	2,707		$	(111	)	$	10		$	(82	)	$	45,484		$	1,127		$	46,611
Other^(f)																													—		—	—		1			(92		)	—			—			—			(91		)	—			(91		)
Balance at September 30, 2020																													$	1,962	736	$	1	$	41,046		$	3,260		$	(190	)	$	8		$	(81	)	$	46,006		$	1,289		$	47,295


(a)	~~Relates to tax equity financing activity~~Duke Energy issued 1 million shares of preferred stock, series B, in the ~~Commercial Renewables segment.~~third quarter of 2019.


(b)	See Note 2 for additional discussion of the transaction.


(c)	Duke Energy issued 40 million depositary shares of preferred stock, Series A.


~~(c)~~(d)	Relates to tax equity financing activity in the Commercial Renewables segment.


(e)	Amounts in Retained Earnings and Accumulated Other Comprehensive (Loss) Income primarily represent impacts to accumulated other comprehensive income due to implementation of a new accounting standard related to Reclassification of Certain Tax Effects from Accumulated Other Comprehensive Income.

~~new accounting standard related to Reclassification of Certain Tax Effects from Accumulated Other Comprehensive Income.~~


~~(d)~~(f)	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.

~~See Notes to Condensed Consolidated Financial Statements~~



FINANCIAL STATEMENTS

DUKE ENERGY CAROLINAS, LLC

Condensed Consolidated Statements of Operations and Comprehensive Income

(Unaudited)


	Three Months Ended					Six Months Ended				Three Months Ended				Nine Months Ended
	June 30,					June 30,				September 30,				September 30,
(in millions)	2020			2019		2020		2019		2020		2019		2020		2019
Operating Revenues	$	1,610		$	1,713	$	3,358	$	3,457	$	2,058	$	2,162	$	5,416	$	5,619
Operating Expenses
Fuel used in electric generation and purchased power	376			395		829		867		497		504		1,326		1,371
Operation, maintenance and other	430			441		816		881		402		443		1,218		1,324
Depreciation and amortization	375			346		718		663		372		350		1,090		1,013
Property and other taxes	75			75		156		155		57		66		213		221
Impairment charges	—			5		2		5		20		6		22		11
Total operating expenses	1,256			1,262		2,521		2,571		1,348		1,369		3,869		3,940
Losses on Sales of Other Assets and Other, net	(1		)	—		—		—
Gains on Sales of Other Assets and Other, net										1		—		1		—
Operating Income	353			451		837		886		711		793		1,548		1,679
Other Income and Expenses, net	43			41		86		72		42		34		128		106
Interest Expense	125			117		248		227		122		119		370		346
Income Before Income Taxes	271			375		675		731		631		708		1,306		1,439
Income Tax Expense	37			74		102		137		76		118		178		255
Net Income and Comprehensive Income	$	234		$	301	$	573	$	594	$	555	$	590	$	1,128	$	1,184

~~See Notes to Condensed Consolidated Financial Statements~~



FINANCIAL STATEMENTS

DUKE ENERGY CAROLINAS, LLC

Condensed Consolidated Balance Sheets

(Unaudited)


(in millions)	June 30, 2020			December 31, 2019			September 30, 2020			December 31, 2019
ASSETS
Current Assets
Cash and cash equivalents	$	24		$	18		$	23		$	18
Receivables (net of allowance for doubtful accounts of $1 at 2020 and $3 at 2019)	255			324			177			324
Receivables of VIEs (net of allowance for doubtful accounts of $13 at 2020 and $7 at 2019)	675			642
Receivables of VIEs (net of allowance for doubtful accounts of $21 at 2020 and $7 at 2019)							770			642
Receivables from affiliated companies	78			114			64			114
Notes receivable from affiliated companies							65			—
Inventory	1,080			996			992			996
Regulatory assets	490			550			495			550
Other	19			21			44			21
Total current assets	2,621			2,665			2,630			2,665
Property, Plant and Equipment
Cost	50,068			48,922			50,622			48,922
Accumulated depreciation and amortization	(17,098		)	(16,525		)	(17,406		)	(16,525		)
Net property, plant and equipment	32,970			32,397			33,216			32,397
Other Noncurrent Assets
Regulatory assets	3,440			3,360			3,400			3,360
Nuclear decommissioning trust funds	4,265			4,359			4,506			4,359
Operating lease right-of-use assets, net	125			123			117			123
Other	1,158			1,149			1,179			1,149
Total other noncurrent assets	8,988			8,991			9,202			8,991
Total Assets	$	44,579		$	44,053		$	45,048		$	44,053
LIABILITIES AND EQUITY
Current Liabilities
Accounts payable	$	615		$	954		$	583		$	954
Accounts payable to affiliated companies	147			210			155			210
Notes payable to affiliated companies	131			29			—			29
Taxes accrued	166			46			398			46
Interest accrued	127			115			130			115
Current maturities of long-term debt	508			458			751			458
Asset retirement obligations	194			206			267			206
Regulatory liabilities	293			255			430			255
Other	488			611			487			611
Total current liabilities	2,669			2,884			3,201			2,884
Long-Term Debt	11,713			11,142			11,497			11,142
Long-Term Debt Payable to Affiliated Companies	300			300			300			300
Other Noncurrent Liabilities
Deferred income taxes	4,004			3,921			3,915			3,921
Asset retirement obligations	5,566			5,528			5,507			5,528
Regulatory liabilities	6,232			6,423			6,243			6,423
Operating lease liabilities	106			102			102			102
Accrued pension and other post-retirement benefit costs	77			84			76			84
Investment tax credits	229			231			237			231
Other	611			627			644			627
Total other noncurrent liabilities	16,825			16,916			16,724			16,916
Commitments and Contingencies
Equity
Member's equity	13,079			12,818			13,333			12,818
Accumulated other comprehensive loss	(7		)	(7		)	(7		)	(7		)
Total equity	13,072			12,811			13,326			12,811
Total Liabilities and Equity	$	44,579		$	44,053		$	45,048		$	44,053

~~See Notes to Condensed Consolidated Financial Statements~~



FINANCIAL STATEMENTS

DUKE ENERGY CAROLINAS, LLC

Condensed Consolidated Statements of Cash Flows

(Unaudited)


	Six Months Ended						Nine Months Ended
	June 30,						September 30,
(in millions)	2020			2019			2020			2019
CASH FLOWS FROM OPERATING ACTIVITIES
Net income	$	573		$	594		$	1,128		$	1,184
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation and amortization (including amortization of nuclear fuel)	854			804			1,295			1,227
Equity component of AFUDC	(29		)	(21		)	(46		)	(29		)
Gains on sales of other assets							(1		)	—
Impairment charges	2			5			22			11
Deferred income taxes	31			54			(103		)	96
Contributions to qualified pension plans							—			(7		)
Payments for asset retirement obligations	(86		)	(131		)	(127		)	(234		)
Provision for rate refunds	2			35			(1		)	34
(Increase) decrease in
Net realized and unrealized mark-to-market and hedging transactions	—			(8		)	—			(7		)
Receivables	40			83			41			(80		)
Receivables from affiliated companies	36			81			50			74
Inventory	(84		)	(77		)	4			5
Other current assets	170			(133		)	197			(117		)
Increase (decrease) in
Accounts payable	(249		)	(282		)	(313		)	(284		)
Accounts payable to affiliated companies	(63		)	(41		)	(55		)	(56		)
Taxes accrued	120			38			352			91
Other current liabilities	(134		)	(71		)	(121		)	44
Other assets	(83		)	87			(71		)	(2		)
Other liabilities	(35		)	(18		)	(23		)	(44		)
Net cash provided by operating activities	1,065			999			2,228			1,906
CASH FLOWS FROM INVESTING ACTIVITIES
Capital expenditures	(1,271		)	(1,357		)	(1,931		)	(1,984		)
Purchases of debt and equity securities	(1,017		)	(1,114		)	(1,313		)	(1,658		)
Proceeds from sales and maturities of debt and equity securities	1,017			1,114			1,313			1,658
Notes receivable from affiliated companies							(65		)	—
Other	(73		)	(46		)	(105		)	(80		)
Net cash used in investing activities	(1,344		)	(1,403		)	(2,101		)	(2,064		)
CASH FLOWS FROM FINANCING ACTIVITIES
Proceeds from the issuance of long-term debt	938			25			965			819
Payments for the redemption of long-term debt	(454		)	(3		)	(457		)	(5		)
Notes payable to affiliated companies	102			365			(29		)	(390		)
Distributions to parent	(300		)	—			(600		)	(275		)
Other	(1		)	(1		)	(1		)	(1		)
Net cash provided by financing activities	285			386
Net cash (used in) provided by financing activities							(122		)	148
Net increase (decrease) in cash and cash equivalents	6			(18		)	5			(10		)
Cash and cash equivalents at beginning of period	18			33			18			33
Cash and cash equivalents at end of period	$	24		$	15		$	23		$	23
Supplemental Disclosures:
Significant non-cash transactions:
Accrued capital expenditures	$	256		$	252		$	295		$	261

~~See Notes to Condensed Consolidated Financial Statements~~



FINANCIAL STATEMENTS

DUKE ENERGY CAROLINAS, LLC

Condensed Consolidated Statements of Changes in Equity

(Unaudited)


	Three Months Ended June 30, 2019 and 2020									Three Months Ended September 30, 2019 and 2020
				Accumulated Other									Accumulated Other
				Comprehensive									Comprehensive
				Loss									Loss
	Member's			Net Losses on			Total			Member's			Net Losses on			Total
(in millions)	Equity			Cash Flow Hedges			Equity			Equity			Cash Flow Hedges			Equity
Balance at March 31, 2019	$	11,982		$	(7	)	$	11,975
Balance at June 30, 2019										$	12,283		$	(7	)	$	12,276
Net income	301			—			301			590			—			590
Balance at June 30, 2019	$	12,283		$	(7	)	$	12,276
Distributions to parent										(275		)	—			(275		)
Balance at September 30, 2019										$	12,598		$	(7	)	$	12,591

Balance at March 31, 2020	$	12,844		$	(7	)	$	12,837
Balance at June 30, 2020										$	13,079		$	(7	)	$	13,072
Net income	234			—			234			555			—			555
Distributions to parent										(300		)	—			(300		)
Other	1			—			1			(1		)	—			(1		)
Balance at June 30, 2020	$	13,079		$	(7	)	$	13,072
Balance at September 30, 2020										$	13,333		$	(7	)	$	13,326

	Six Months Ended June 30, 2019 and 2020									Nine Months Ended September 30, 2019 and 2020
				Accumulated Other									Accumulated Other
				Comprehensive									Comprehensive
				Loss									Loss
	Member's			Net Losses on			Total			Member's			Net Losses on			Total
(in millions)	Equity			Cash Flow Hedges			Equity			Equity			Cash Flow Hedges			Equity
Balance at December 31, 2018	$	11,689		$	(6	)	$	11,683		$	11,689		$	(6	)	$	11,683
Net income	594			—			594			1,184			—			1,184
Distributions to parent										(275		)	—			(275		)
Other	—			(1		)	(1		)	—			(1		)	(1		)
Balance at June 30, 2019	$	12,283		$	(7	)	$	12,276
Balance at September 30, 2019										$	12,598		$	(7	)	$	12,591

Balance at December 31, 2019	$	12,818		$	(7	)	$	12,811		$	12,818		$	(7	)	$	12,811
Net income	573			—			573			1,128			—			1,128
Distributions to parent	(300		)	—			(300		)	(600		)	—			(600		)
Other^(a)	(12		)	—			(12		)	(13		)	—			(13		)
Balance at June 30, 2020	$	13,079		$	(7	)	$	13,072
Balance at September 30, 2020										$	13,333		$	(7	)	$	13,326


(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.

~~See Notes to Condensed Consolidated Financial Statements~~



FINANCIAL STATEMENTS

PROGRESS ENERGY, INC.

Condensed Consolidated Statements of Operations and Comprehensive Income

(Unaudited)


	Three Months Ended						Six Months Ended					Three Months Ended					Nine Months Ended
	June 30,						June 30,					September 30,					September 30,
(in millions)	2020			2019			2020		2019			2020		2019			2020		2019
Operating Revenues	$	2,498		$	2,744		$	4,920	$	5,316		$	3,197	$	3,242		$	8,117	$	8,558
Operating Expenses
Fuel used in electric generation and purchased power	777			988			1,540		1,913			1,088		1,187			2,628		3,100
Operation, maintenance and other	589			606			1,143		1,173			646		640			1,789		1,813
Depreciation and amortization	432			426			884		881			472		496			1,356		1,377
Property and other taxes	137			143			272		280			147		159			419		439
Impairment charges												1		(25		)	1		(25		)
Total operating expenses	1,935			2,163			3,839		4,247			2,354		2,457			6,193		6,704
Gains (Losses) on Sales of Other Assets and Other, net	7			(1		)	6		(1		)
Gains on Sales of Other Assets and Other, net												3		1			9		—
Operating Income	570			580			1,087		1,068			846		786			1,933		1,854
Other Income and Expenses, net	33			34			65		65			24		41			89		106
Interest Expense	199			219			405		438			194		212			599		650
Income Before Income Taxes	404			395			747		695			676		615			1,423		1,310
Income Tax Expense	60			66			120		118			70		94			190		212
Net Income	344			329			627		577			606		521			1,233		1,098
Less: Net Income Attributable to Noncontrolling Interests	—			1			—		—			1		0			1		0
Net Income Attributable to Parent	$	344		$	328		$	627	$	577		$	605	$	521		$	1,232	$	1,098

Net Income	$	344		$	329		$	627	$	577		$	606	$	521		$	1,233	$	1,098
Other Comprehensive Income, net of tax
Pension and OPEB adjustments	1			1			1		2			—		—			1		2
Net unrealized gains on cash flow hedges	1			1			2		3			1		1			3		4
Unrealized (losses) gains on available-for-sale securities	(1		)	1			—		1
Unrealized gains on available-for-sale securities												1		1			1		2
Other Comprehensive Income, net of tax	1			3			3		6			2		2			5		8
Comprehensive Income	345			332			630		583			608		523			1,238		1,106
Less: Comprehensive Income Attributable to Noncontrolling Interests	—			1			—		—			1		—			1		0
Comprehensive Income Attributable to Parent	$	345		$	331		$	630	$	583		$	607	$	523		$	1,237	$	1,106

~~See Notes to Condensed Consolidated Financial Statements~~



FINANCIAL STATEMENTS

PROGRESS ENERGY, INC.

Condensed Consolidated Balance Sheets

(Unaudited)


(in millions)	June 30, 2020			December 31, 2019			September 30, 2020			December 31, 2019
ASSETS
Current Assets
Cash and cash equivalents	$	78		$	48		$	70		$	48
Receivables (net of allowance for doubtful accounts of $9 at 2020 and $7 at 2019)	153			220			196			220
Receivables of VIEs (net of allowance for doubtful accounts of $20 at 2020 and $9 at 2019)	920			830
Receivables of VIEs (net of allowance for doubtful accounts of $28 at 2020 and $9 at 2019)							1,071			830
Receivables from affiliated companies	42			76			44			76
Notes receivable from affiliated companies	—			164			—			164
Inventory	1,466			1,423			1,378			1,423
Regulatory assets (includes $53 at 2020 and $52 at 2019 related to VIEs)	957			946			775			946
Other (includes $32 at 2020 and $39 at 2019 related to VIEs)	145			210
Other (includes $16 at 2020 and $39 at 2019 related to VIEs)							81			210
Total current assets	3,761			3,917			3,615			3,917
Property, Plant and Equipment
Cost	56,420			55,070			57,152			55,070
Accumulated depreciation and amortization	(17,704		)	(17,159		)	(18,008		)	(17,159		)
Generation facilities to be retired, net	28			246			29			246
Net property, plant and equipment	38,744			38,157			39,173			38,157
Other Noncurrent Assets
Goodwill	3,655			3,655			3,655			3,655
Regulatory assets (includes $969 at 2020 and $989 at 2019 related to VIEs)	6,308			6,346
Regulatory assets (includes $951 at 2020 and $989 at 2019 related to VIEs)							6,270			6,346
Nuclear decommissioning trust funds	3,734			3,782			3,857			3,782
Operating lease right-of-use assets, net	737			788			710			788
Other	1,164			1,049			1,212			1,049
Total other noncurrent assets	15,598			15,620			15,704			15,620
Total Assets	$	58,103		$	57,694		$	58,492		$	57,694
LIABILITIES AND EQUITY
Current Liabilities
Accounts payable	$	675		$	1,104		$	795		$	1,104
Accounts payable to affiliated companies	222			310			208			310
Notes payable to affiliated companies	2,373			1,821			2,159			1,821
Taxes accrued	201			46			310			46
Interest accrued	213			228			199			228
Current maturities of long-term debt (includes $304 at 2020 and $54 at 2019 related to VIEs)	1,829			1,577
Current maturities of long-term debt (includes $305 at 2020 and $54 at 2019 related to VIEs)							1,726			1,577
Asset retirement obligations	357			485			297			485
Regulatory liabilities	388			330			545			330
Other	847			902			756			902
Total current liabilities	7,105			6,803			6,995			6,803
Long-Term Debt (includes $1,361 at 2020 and $1,632 at 2019 related to VIEs)	17,625			17,907
Long-Term Debt (includes $1,351 at 2020 and $1,632 at 2019 related to VIEs)							17,989			17,907
Long-Term Debt Payable to Affiliated Companies	150			150			150			150
Other Noncurrent Liabilities
Deferred income taxes	4,560			4,462			4,508			4,462
Asset retirement obligations	6,038			5,986			6,058			5,986
Regulatory liabilities	4,813			5,225			4,809			5,225
Operating lease liabilities	662			697			637			697
Accrued pension and other post-retirement benefit costs	480			488			474			488
Other	449			383			443			383
Total other noncurrent liabilities	17,002			17,241			16,929			17,241
Commitments and Contingencies
Equity
Common Stock, $0.01 par value, 100 shares authorized and outstanding at 2020 and 2019	—			—			—			—
Additional paid-in capital	9,143			9,143			9,143			9,143
Retained earnings	7,090			6,465			7,296			6,465
Accumulated other comprehensive loss	(15		)	(18		)	(13		)	(18		)
Total Progress Energy, Inc. stockholders' equity	16,218			15,590			16,426			15,590
Noncontrolling interests	3			3			3			3
Total equity	16,221			15,593			16,429			15,593
Total Liabilities and Equity	$	58,103		$	57,694		$	58,492		$	57,694

~~See Notes to Condensed Consolidated Financial Statements~~



FINANCIAL STATEMENTS

PROGRESS ENERGY, INC.

Condensed Consolidated Statements of Cash Flows

(Unaudited)


	Six Months Ended						Nine Months Ended
	June 30,						September 30,
(in millions)	2020			2019			2020			2019
CASH FLOWS FROM OPERATING ACTIVITIES
Net income	$	627		$	577		$	1,233		$	1,098
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation, amortization and accretion (including amortization of nuclear fuel)	1,118			1,061			1,734			1,649
Equity component of AFUDC	(24		)	(31		)	(30		)	(48		)
(Gains) Losses on sales of other assets	(6		)	1			(9		)	—
Impairment charges							1			(25		)
Deferred income taxes	94			126			(3		)	342
Contributions to qualified pension plans							—			(57		)
Payments for asset retirement obligations	(173		)	(183		)	(287		)	(309		)
Provision for rate refunds	2			10			4			13
(Increase) decrease in
Net realized and unrealized mark-to-market and hedging transactions	(22		)	(1		)	(13		)	9
Receivables	(15		)	(42		)	(207		)	(128		)
Receivables from affiliated companies	34			119			32			135
Inventory	(42		)	(26		)	46			45
Other current assets	102			114			214			79
Increase (decrease) in
Accounts payable	(238		)	(196		)	(124		)	(64		)
Accounts payable to affiliated companies	(88		)	(125		)	(102		)	(6		)
Taxes accrued	155			82			263			150
Other current liabilities	(64		)	(162		)	(41		)	(96		)
Other assets	(51		)	(82		)	(145		)	(282		)
Other liabilities	(97		)	24			(102		)	(75		)
Net cash provided by operating activities	1,312			1,266			2,464			2,430
CASH FLOWS FROM INVESTING ACTIVITIES
Capital expenditures	(1,812		)	(1,988		)	(2,602		)	(2,866		)
Purchases of debt and equity securities	(2,602		)	(1,094		)	(4,554		)	(1,304		)
Proceeds from sales and maturities of debt and equity securities	2,588			1,089			4,543			1,300
Notes receivable from affiliated companies	164			—			164			—
Other	(81		)	(59		)	(114		)	(130		)
Net cash used in investing activities	(1,743		)	(2,052		)	(2,563		)	(3,000		)
CASH FLOWS FROM FINANCING ACTIVITIES
Proceeds from the issuance of long-term debt	514			1,295			1,791			1,295
Payments for the redemption of long-term debt	(550		)	(1,188		)	(1,555		)	(1,263		)
Notes payable to affiliated companies	552			685			338			554
Dividends to parent							(400		)	—
Other	—			2			(13		)	8
Net cash provided by financing activities	516			794			161			594
Net increase in cash, cash equivalents and restricted cash	85			8			62			24
Cash, cash equivalents and restricted cash at beginning of period	126			112			126			112
Cash, cash equivalents and restricted cash at end of period	$	211		$	120		$	188		$	136
Supplemental Disclosures:
Significant non-cash transactions:
Accrued capital expenditures	$	287		$	278		$	311		$	400

~~See Notes to Condensed Consolidated Financial Statements~~



FINANCIAL STATEMENTS

PROGRESS ENERGY, INC.

Condensed Consolidated Statements of Changes in Equity

(Unaudited)


	Three Months Ended June 30, 2019 and 2020																							Three Months Ended September 30, 2019 and 2020
						Accumulated Other Comprehensive (Loss) Income																							Accumulated Other Comprehensive Loss
						Net Gains			Net Unrealized						Total Progress														Net Gains			Net Unrealized						Total Progress
	Additional					(Losses) on			Gains (Losses) on			Pension and			Energy, Inc.									Additional					(Losses) on			Gains (Losses) on			Pension and			Energy, Inc.
	Paid-in		Retained			Cash Flow			Available-for-			OPEB			Stockholders'			Noncontrolling			Total			Paid-in		Retained			Cash Flow			Available-for-			OPEB			Stockholders'			Noncontrolling			Total
(in millions)	Capital		Earnings			Hedges			Sale Securities			Adjustments			Equity			Interests			Equity			Capital		Earnings			Hedges			Sale Securities			Adjustments			Equity			Interests			Equity
Balance at March 31, 2019	$	9,143	$	5,386		$	(14	)	$	(1	)	$	(8	)	$	14,506		$	2		$	14,508
Balance at June 30, 2019																								$	9,143	$	5,715		$	(13	)	$	—		$	(8	)	$	14,837		$	2		$	14,839
Net income	—		328			—			—			—			328			1			329			—		521			—			—			—			521			—			521
Other comprehensive income	—		—			1			1			1			3			—			3			—		—			1			1			—			2			—			2
Other	—		1			—			—			(1		)	—			(1		)	(1		)	—		—			—			(1		)	1			—			1			1
Balance at June 30, 2019	$	9,143	$	5,715		$	(13	)	$	—		$	(8	)	$	14,837		$	2		$	14,839
Balance at September 30, 2019																								$	9,143	$	6,236		$	(12	)	$	—		$	(7	)	$	15,360		$	3		$	15,363

Balance at March 31, 2020	$	9,143	$	6,747		$	(9	)	$	—		$	(7	)	$	15,874		$	3		$	15,877
Balance at June 30, 2020																								$	9,143	$	7,090		$	(8	)	$	(1	)	$	(6	)	$	16,218		$	3		$	16,221
Net income	—		344			—			—			—			344			—			344			—		605			—			—			—			605			1			606
Other comprehensive income	—		—			1			(1		)	1			1			—			1			—		—			1			1			—			2			—			2
Distributions to noncontrolling interests	—		—			—			—			—			—			(1		)	(1		)
Dividends to parent																								—		(400		)	—			—			—			(400		)	—			(400		)
Other	—		(1		)	—			—			—			(1		)	1			—			—		1			—			—			—			1			(1		)	—
Balance at June 30, 2020	$	9,143	$	7,090		$	(8	)	$	(1	)	$	(6	)	$	16,218		$	3		$	16,221
Balance at September 30, 2020																								$	9,143	$	7,296		$	(7	)	$	—		$	(6	)	$	16,426		$	3		$	16,429

	Six Months Ended June 30, 2019 and 2020																							Nine Months Ended September 30, 2019 and 2020
						Accumulated Other Comprehensive Loss																							Accumulated Other Comprehensive Loss
						Net Gains			Net Unrealized						Total Progress														Net Gains			Net Unrealized						Total Progress
	Additional					(Losses) on			Losses on			Pension and			Energy, Inc.									Additional					(Losses) on			Gains (Losses) on			Pension and			Energy, Inc.
	Paid-in		Retained			Cash Flow			Available-for-			OPEB			Stockholders'			Noncontrolling			Total			Paid-in		Retained			Cash Flow			Available-for-			OPEB			Stockholders'			Noncontrolling			Total
	Capital		Earnings			Hedges			Sale Securities			Adjustments			Equity			Interests			Equity			Capital		Earnings			Hedges			Sale Securities			Adjustments			Equity			Interests			Equity
Balance at December 31, 2018	$	9,143	$	5,131		$	(12	)	$	(1	)	$	(7	)	$	14,254		$	3		$	14,257		$	9,143	$	5,131		$	(12	)	$	(1	)	$	(7	)	$	14,254		$	3		$	14,257
Net income	—		577			—			—			—			577			—			577			—		1,098			—			—			—			1,098			—			1,098
Other comprehensive income	—		—			3			1			2			6			—			6			—		—			4			2			2			8			—			8
Other^(a)	—		7			(4		)	—			(3		)	—			(1		)	(1		)	—		7			(4		)	(1		)	(2		)	—			—			—
Balance at June 30, 2019	$	9,143	$	5,715		$	(13	)	$	—		$	(8	)	$	14,837		$	2		$	14,839
Balance at September 30, 2019																								$	9,143	$	6,236		$	(12	)	$	—		$	(7	)	$	15,360		$	3		$	15,363

Balance at December 31, 2019	$	9,143	$	6,465		$	(10	)	$	(1	)	$	(7	)	$	15,590		$	3		$	15,593		$	9,143	$	6,465		$	(10	)	$	(1	)	$	(7	)	$	15,590		$	3		$	15,593
Net income	—		627			—			—			—			627			—			627			—		1,232			—			—			—			1,232			1			1,233
Other comprehensive income	—		—			2			—			1			3			—			3			—		—			3			1			1			5			—			5
Distributions to noncontrolling interests	—		—			—			—			—			—			(1		)	(1		)	—		—			—			—			—			—			(1		)	(1		)
Dividends to parent																								—		(400		)	—			—			—			(400		)	—			(400		)
Other	—		(2		)	—			—			—			(2		)	1			(1		)	—		(1		)	—			—			—			(1		)	—			(1		)
Balance at June 30, 2020	$	9,143	$	7,090		$	(8	)	$	(1	)	$	(6	)	$	16,218		$	3		$	16,221
Balance at September 30, 2020																								$	9,143	$	7,296		$	(7	)	$	—		$	(6	)	$	16,426		$	3		$	16,429


(a)	Amounts in Retained Earnings and Accumulated Other Comprehensive (Loss) Income primarily represent impacts to accumulated other comprehensive income due to implementation of a new accounting standard related to Reclassification of Certain Tax Effects from Accumulated Other Comprehensive Income.

~~See Notes to Condensed Consolidated Financial Statements~~



FINANCIAL STATEMENTS

DUKE ENERGY PROGRESS, LLC

Condensed Consolidated Statements of Operations and Comprehensive Income

(Unaudited)


	Three Months Ended				Six Months Ended				Three Months Ended				Nine Months Ended
	June 30,				June 30,				September 30,				September 30,
(in millions)	2020		2019		2020		2019		2020		2019		2020		2019
Operating Revenues	$	1,243	$	1,387	$	2,581	$	2,871	$	1,626	$	1,688	$	4,207	$	4,559
Operating Expenses
Fuel used in electric generation and purchased power	395		479		800		994		537		577		1,337		1,571
Operation, maintenance and other	317		357		622		692		348		378		970		1,070
Depreciation and amortization	257		251		544		541		289		314		833		855
Property and other taxes	44		41		91		85		38		46		129		131
Impairment charges									5		—		5		—
Total operating expenses	1,013		1,128		2,057		2,312		1,217		1,315		3,274		3,627
Gains on Sales of Other Assets and Other, net	6		—		5		—		3		—		8		—
Operating Income	236		259		529		559		412		373		941		932
Other Income and Expenses, net	19		24		41		48		11		27		52		75
Interest Expense	68		81		137		158		66		74		203		232
Income Before Income Taxes	187		202		433		449		357		326		790		775
Income Tax Expense	26		33		68		77		11		48		79		125
Net Income and Comprehensive Income	$	161	$	169	$	365	$	372	$	346	$	278	$	711	$	650

~~See Notes to Condensed Consolidated Financial Statements~~



FINANCIAL STATEMENTS

DUKE ENERGY PROGRESS, LLC

Condensed Consolidated Balance Sheets

(Unaudited)


(in millions)	June 30, 2020			December 31, 2019			September 30, 2020			December 31, 2019
ASSETS
Current Assets	��
Cash and cash equivalents	$	51		$	22		$	43		$	22
Receivables (net of allowance for doubtful accounts of $4 at 2020 and $3 at 2019)	77			123			103			123
Receivables of VIEs (net of allowance for doubtful accounts of $10 at 2020 and $5 at 2019)	451			489
Receivables of VIEs (net of allowance for doubtful accounts of $17 at 2020 and $5 at 2019)							559			489
Receivables from affiliated companies	42			52			45			52
Inventory	980			934			910			934
Regulatory assets	526			526			472			526
Other	37			60			54			60
Total current assets	2,164			2,206			2,186			2,206
Property, Plant and Equipment
Cost	35,120			34,603			35,479			34,603
Accumulated depreciation and amortization	(12,303		)	(11,915		)	(12,548		)	(11,915		)
Generation facilities to be retired, net	28			246			29			246
Net property, plant and equipment	22,845			22,934			22,960			22,934
Other Noncurrent Assets
Regulatory assets	4,448			4,152			4,449			4,152
Nuclear decommissioning trust funds	3,023			3,047			3,189			3,047
Operating lease right-of-use assets, net	367			387			357			387
Other	688			651			720			651
Total other noncurrent assets	8,526			8,237			8,715			8,237
Total Assets	$	33,535		$	33,377		$	33,861		$	33,377
LIABILITIES AND EQUITY
Current Liabilities
Accounts payable	$	287		$	629		$	372		$	629
Accounts payable to affiliated companies	153			203			144			203
Notes payable to affiliated companies	257			66			167			66
Taxes accrued	88			17			207			17
Interest accrued	102			110			80			110
Current maturities of long-term debt	1,006			1,006			603			1,006
Asset retirement obligations	357			485			297			485
Regulatory liabilities	306			236			436			236
Other	468			478			389			478
Total current liabilities	3,024			3,230			2,695			3,230
Long-Term Debt	7,907			7,902			8,605			7,902
Long-Term Debt Payable to Affiliated Companies	150			150			150			150
Other Noncurrent Liabilities
Deferred income taxes	2,485			2,388			2,426			2,388
Asset retirement obligations	5,457			5,408			5,503			5,408
Regulatory liabilities	4,087			4,232			4,140			4,232
Operating lease liabilities	339			354			329			354
Accrued pension and other post-retirement benefit costs	237			238			236			238
Investment tax credits	134			137			133			137
Other	105			92			88			92
Total other noncurrent liabilities	12,844			12,849			12,855			12,849
Commitments and Contingencies
Equity
Member's Equity	9,610			9,246			9,556			9,246
Total Liabilities and Equity	$	33,535		$	33,377		$	33,861		$	33,377

~~See Notes to Condensed Consolidated Financial Statements~~



FINANCIAL STATEMENTS

DUKE ENERGY PROGRESS, LLC

Condensed Consolidated Statements of Cash Flows

(Unaudited)


	Six Months Ended						Nine Months Ended
	June 30,						September 30,
(in millions)	2020			2019			2020			2019
CASH FLOWS FROM OPERATING ACTIVITIES
Net income	$	365		$	372		$	711		$	650
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation and amortization (including amortization of nuclear fuel)	635			634			972			996
Equity component of AFUDC	(19		)	(28		)	(22		)	(44		)
Gains on sales of other assets	(6		)	—			(8		)	—
Impairment charges							5			—
Deferred income taxes	60			26			(33		)	144
Contributions to qualified pension plans							—			(4		)
Payments for asset retirement obligations	(164		)	(166		)	(249		)	(288		)
Provision for rate refunds	2			10			4			13
(Increase) decrease in
Net realized and unrealized mark-to-market and hedging transactions	(5		)	(5		)	—			(4		)
Receivables	96			58			(34		)	(9		)
Receivables from affiliated companies	10			(17		)	7			(11		)
Inventory	(46		)	(26		)	24			15
Other current assets	87			115			82			65
Increase (decrease) in
Accounts payable	(260		)	(223		)	(185		)	(54		)
Accounts payable to affiliated companies	(50		)	(96		)	(59		)	(80		)
Taxes accrued	71			53			190			37
Other current liabilities	(16		)	(74		)	(24		)	(17		)
Other assets	(86		)	(3		)	(177		)	(201		)
Other liabilities	(5		)	25			21			39
Net cash provided by operating activities	669			655			1,225			1,247
CASH FLOWS FROM INVESTING ACTIVITIES
Capital expenditures	(795		)	(1,115		)	(1,142		)	(1,592		)
Purchases of debt and equity securities	(569		)	(473		)	(1,269		)	(656		)
Proceeds from sales and maturities of debt and equity securities	548			458			1,238			632
Other	(21		)	(20		)	(31		)	(56		)
Net cash used in investing activities	(837		)	(1,150		)	(1,204		)	(1,672		)
CASH FLOWS FROM FINANCING ACTIVITIES
Proceeds from the issuance of long-term debt	20			1,270			1,296			1,270
Payments for the redemption of long-term debt	(13		)	(602		)	(985		)	(603		)
Notes payable to affiliated companies	191			(167		)	101			(215		)
Distributions to parent							(400		)	—
Other	(1		)	(1		)	(12		)	(1		)
Net cash provided by financing activities	197			500			—			451
Net increase in cash and cash equivalents	29			5			21			26
Cash and cash equivalents at beginning of period	22			23			22			23
Cash and cash equivalents at end of period	$	51		$	28		$	43		$	49
Supplemental Disclosures:
Significant non-cash transactions:
Accrued capital expenditures	$	95		$	112		$	124		$	182

~~See Notes to Condensed Consolidated Financial Statements~~



FINANCIAL STATEMENTS

DUKE ENERGY PROGRESS, LLC

Condensed Consolidated Statements of Changes in Equity

(Unaudited)


	Three Months Ended			Three Months Ended
	June 30, 2019 and 2020			September 30, 2019 and 2020
	Member's			Member's
(in millions)	Equity			Equity
Balance at March 31, 2019	$	8,644
Balance at June 30, 2019				$	8,813
Net income	169			278
Balance at June 30, 2019	$	8,813
Balance at September 30, 2019				$	9,091

Balance at March 31, 2020	$	9,450
Balance at June 30, 2020				$	9,610
Net income	161			346
Other	(1		)
Balance at June 30, 2020	$	9,610
Distributions to parent				(400		)
Balance at September 30, 2020				$	9,556

	Six Months Ended			Nine Months Ended
	June 30, 2019 and 2020			September 30, 2019 and 2020
	Member's			Member's
(in millions)	Equity			Equity
Balance at December 31, 2018	$	8,441		$	8,441
Net income	372			650
Balance at June 30, 2019	$	8,813
Balance at September 30, 2019				$	9,091

Balance at December 31, 2019	$	9,246		$	9,246
Net income	365			711
Distributions to parent				(400		)
Other	(1		)	(1		)
Balance at June 30, 2020	$	9,610
Balance at September 30, 2020				$	9,556

~~See Notes to Condensed Consolidated Financial Statements~~



FINANCIAL STATEMENTS

DUKE ENERGY FLORIDA, LLC

Condensed Consolidated Statements of Operations and Comprehensive Income

(Unaudited)


	Three Months Ended						Six Months Ended					Three Months Ended						Nine Months Ended
	June 30,						June 30,					September 30,						September 30,
(in millions)	2020			2019			2020		2019			2020			2019			2020			2019
Operating Revenues	$	1,250		$	1,353		$	2,330	$	2,439		$	1,567		$	1,548		$	3,897		$	3,987
Operating Expenses
Fuel used in electric generation and purchased power	382			509			740		919			551			610			1,291			1,529
Operation, maintenance and other	269			244			514		474			292			256			806			730
Depreciation and amortization	175			175			340		340			183			182			523			522
Property and other taxes	92			103			180		196			110			113			290			309
Impairment charges												(4		)	(25		)	(4		)	(25		)
Total operating expenses	918			1,031			1,774		1,929			1,132			1,136			2,906			3,065
Losses on Sales of Other Assets and Other, net	—			(1		)	—		(1		)
Gains on Sales of Other Assets and Other, net												—			1			—			—
Operating Income	332			321			556		509			435			413			991			922
Other Income and Expenses, net	15			12			25		25			11			14			36			39
Interest Expense	80			83			164		165			81			81			245			246
Income Before Income Taxes	267			250			417		369			365			346			782			715
Income Tax Expense	51			49			81		72			78			57			159			129
Net Income	$	216		$	201		$	336	$	297		$	287		$	289		$	623		$	586
Other Comprehensive Income, net of tax
Unrealized (losses) gains on available-for-sale securities	(1		)	—			—		1
Unrealized gains on available-for-sale securities												1			1			1			2
Comprehensive Income	$	215		$	201		$	336	$	298		$	288		$	290		$	624		$	588

~~See Notes to Condensed Consolidated Financial Statements~~



FINANCIAL STATEMENTS

DUKE ENERGY FLORIDA, LLC

Condensed Consolidated Balance Sheets

(Unaudited)


(in millions)	June 30, 2020			December 31, 2019			September 30, 2020			December 31, 2019
ASSETS
Current Assets
Cash and cash equivalents	$	20		$	17		$	19		$	17
Receivables (net of allowance for doubtful accounts of $5 at 2020 and $3 at 2019)	72			96			91			96
Receivables of VIEs (net of allowance for doubtful accounts of $9 at 2020 and $4 at 2019)	469			341
Receivables of VIEs (net of allowance for doubtful accounts of $11 at 2020 and $4 at 2019)							512			341
Receivables from affiliated companies	2			—			3			—
Notes receivable from affiliated companies	—			173			—			173
Inventory	486			489			468			489
Regulatory assets (includes $53 at 2020 and $52 at 2019 related to VIEs)	432			419			303			419
Other (includes $32 at 2020 and $39 at 2019 related to VIEs)	44			58
Other (includes $16 at 2020 and $39 at 2019 related to VIEs)							25			58
Total current assets	1,525			1,593			1,421			1,593
Property, Plant and Equipment
Cost	21,290			20,457			21,662			20,457
Accumulated depreciation and amortization	(5,394		)	(5,236		)	(5,452		)	(5,236		)
Net property, plant and equipment	15,896			15,221			16,210			15,221
Other Noncurrent Assets
Regulatory assets (includes $969 at 2020 and $989 at 2019 related to VIEs)	1,860			2,194
Regulatory assets (includes $951 at 2020 and $989 at 2019 related to VIEs)							1,821			2,194
Nuclear decommissioning trust funds	711			734			668			734
Operating lease right-of-use assets, net	370			401			354			401
Other	327			311			341			311
Total other noncurrent assets	3,268			3,640			3,184			3,640
Total Assets	$	20,689		$	20,454		$	20,815		$	20,454
LIABILITIES AND EQUITY
Current Liabilities
Accounts payable	$	388		$	474		$	424		$	474
Accounts payable to affiliated companies	80			131			77			131
Notes payable to affiliated companies	232			—			66			—
Taxes accrued	177			43			260			43
Interest accrued	67			75			73			75
Current maturities of long-term debt (includes $304 at 2020 and $54 at 2019 related to VIEs)	323			571
Current maturities of long-term debt (includes $305 at 2020 and $54 at 2019 related to VIEs)							623			571
Regulatory liabilities	82			94			109			94
Other	372			415			359			415
Total current liabilities	1,721			1,803			1,991			1,803
Long-Term Debt (includes $1,028 at 2020 and $1,307 at 2019 related to VIEs)	7,628			7,416
Long-Term Debt (includes $1,001 at 2020 and $1,307 at 2019 related to VIEs)							7,294			7,416
Other Noncurrent Liabilities
Deferred income taxes	2,181			2,179			2,175			2,179
Asset retirement obligations	581			578			555			578
Regulatory liabilities	726			993			669			993
Operating lease liabilities	323			343			308			343
Accrued pension and other post-retirement benefit costs	211			218			207			218
Other	194			136			205			136
Total other noncurrent liabilities	4,216			4,447			4,119			4,447
Commitments and Contingencies
Equity
Member's equity	7,125			6,789			7,411			6,789
Accumulated other comprehensive loss	(1		)	(1		)	—			(1		)
Total equity	7,124			6,788			7,411			6,788
Total Liabilities and Equity	$	20,689		$	20,454		$	20,815		$	20,454

~~See Notes to Condensed Consolidated Financial Statements~~



FINANCIAL STATEMENTS

DUKE ENERGY FLORIDA, LLC

Condensed Consolidated Statements of Cash Flows

(Unaudited)


	Six Months Ended						Nine Months Ended
	June 30,						September 30,
(in millions)	2020			2019			2020			2019
CASH FLOWS FROM OPERATING ACTIVITIES
Net income	$	336		$	297		$	623		$	586
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation, amortization and accretion	478			423			755			647
Equity component of AFUDC	(6		)	(2		)	(8		)	(4		)
Losses on sales of other assets	—			1
Impairment charges							(4		)	(25		)
Deferred income taxes	37			82			19			164
Contributions to qualified pension plans							—			(53		)
Payments for asset retirement obligations	(9		)	(17		)	(38		)	(21		)
(Increase) decrease in
Net realized and unrealized mark-to-market and hedging transactions	(20		)	2			(17		)	9
Receivables	(110		)	(101		)	(172		)	(119		)
Receivables from affiliated companies	(2		)	10			(3		)	27
Inventory	4			1			22			29
Other current assets	(11		)	8			41			100
Increase (decrease) in
Accounts payable	23			27			63			(11		)
Accounts payable to affiliated companies	(51		)	(29		)	(54		)	67
Taxes accrued	134			74			217			101
Other current liabilities	(50		)	(80		)	(20		)	(77		)
Other assets	37			(77		)	48			(77		)
Other liabilities	(91		)	(8		)	(136		)	(123		)
Net cash provided by operating activities	699			611			1,336			1,220
CASH FLOWS FROM INVESTING ACTIVITIES
Capital expenditures	(1,016		)	(873		)	(1,460		)	(1,274		)
Purchases of debt and equity securities	(2,033		)	(621		)	(3,284		)	(648		)
Proceeds from sales and maturities of debt and equity securities	2,040			631			3,305			668
Notes receivable from affiliated companies	173			—			173			—
Other	(60		)	(37		)	(82		)	(73		)
Net cash used in investing activities	(896		)	(900		)	(1,348		)	(1,327		)
CASH FLOWS FROM FINANCING ACTIVITIES
Proceeds from the issuance of long-term debt	495			25			495			25
Payments for the redemption of long-term debt	(537		)	(136		)	(570		)	(210		)
Notes payable to affiliated companies	232			369			66			248
Other	2			3			—			9
Net cash provided by financing activities	192			261
Net cash (used in) provided by financing activities							(9		)	72
Net decrease in cash, cash equivalents and restricted cash	(5		)	(28		)	(21		)	(35		)
Cash, cash equivalents and restricted cash at beginning of period	56			75			56			75
Cash, cash equivalents and restricted cash at end of period	$	51		$	47		$	35		$	40
Supplemental Disclosures:
Significant non-cash transactions:
Accrued capital expenditures	$	192		$	166		$	187		$	218

~~See Notes to Condensed Consolidated Financial Statements~~



FINANCIAL STATEMENTS

DUKE ENERGY FLORIDA, LLC

Condensed Consolidated Statements of Changes in Equity

(Unaudited)


	Three Months Ended June 30, 2019 and 2020								Three Months Ended September 30, 2019 and 2020
			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 March 31, 2019	$	6,193	$	(1	)	$	6,192
Net income	201		—			201
Balance at June 30, 2019	$	6,394	$	(1	)	$	6,393		$	6,394		$	(1	)	$	6,393

Balance at March 31, 2020	$	6,909	$	—		$	6,909
Net income	216		—			216			289			—			289
Other comprehensive income	—		(1		)	(1		)	—			1			1
Balance at September 30, 2019									$	6,683		$	—		$	6,683

Balance at June 30, 2020	$	7,125	$	(1	)	$	7,124		$	7,125		$	(1	)	$	7,124
Net income									287			—			287
Other comprehensive income									—			1			1
Other									(1		)	—			(1		)
Balance at September 30, 2020									$	7,411		$	—		$	7,411

	Six Months Ended June 30, 2019 and 2020								Nine Months Ended September 30, 2019 and 2020
			Accumulated									Accumulated
			Other									Other
			Comprehensive									Comprehensive
			Income (Loss)									Income (Loss)
			Net Unrealized									Net Unrealized
			Gains 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, 2018	$	6,097	$	(2	)	$	6,095		$	6,097		$	(2	)	$	6,095
Net income	297		—			297			586			—			586
Other comprehensive income	—		1			1			—			2			2
Balance at June 30, 2019	$	6,394	$	(1	)	$	6,393
Balance at September 30, 2019									$	6,683		$	—		$	6,683

Balance at December 31, 2019	$	6,789	$	(1	)	$	6,788		$	6,789		$	(1	)	$	6,788
Net income	336		—			336			623			—			623
Balance at June 30, 2020	$	7,125	$	(1	)	$	7,124
Other comprehensive income									—			1			1
Other									(1		)	—			(1		)
Balance at September 30, 2020									$	7,411		$	—		$	7,411

~~See Notes to Condensed Consolidated Financial Statements~~



FINANCIAL STATEMENTS

DUKE ENERGY OHIO, INC.

Condensed Consolidated Statements of Operations and Comprehensive Income

(Unaudited)


	Three Months Ended				Six Months Ended				Three Months Ended				Nine Months Ended
	June 30,				June 30,				September 30,				September 30,
(in millions)	2020		2019		2020		2019		2020		2019		2020		2019
Operating Revenues
Regulated electric	$	330	$	336	$	676	$	691	$	394	$	408	$	1,070	$	1,099
Regulated natural gas	93		97		245		273		79		81		324		354
Total operating revenues	423		433		921		964		473		489		1,394		1,453
Operating Expenses
Fuel used in electric generation and purchased power	77		86		164		179		94		114		258		293
Cost of natural gas	6		10		43		64		3		4		46		68
Operation, maintenance and other	95		123		218		255		115		123		333		378
Depreciation and amortization	68		66		136		130		72		69		208		199
Property and other taxes	78		74		161		158		83		71		244		229
Total operating expenses	324		359		722		786		367		381		1,089		1,167
Operating Income	99		74		199		178		106		108		305		286
Other Income and Expenses, net	4		6		7		15		4		4		11		19
Interest Expense	25		24		49		54		26		27		75		81
Income Before Income Taxes	78		56		157		139		84		85		241		224
Income Tax Expense	12		9		26		23		14		11		40		34
Net Income and Comprehensive Income	$	66	$	47	$	131	$	116	$	70	$	74	$	201	$	190

~~See Notes to Condensed Consolidated Financial Statements~~



FINANCIAL STATEMENTS

DUKE ENERGY OHIO, INC.

Condensed Consolidated Balance Sheets

(Unaudited)


(in millions)	June 30, 2020			December 31, 2019			September 30, 2020			December 31, 2019
ASSETS
Current Assets
Cash and cash equivalents	$	8		$	17		$	10		$	17
Receivables (net of allowance for doubtful accounts of $5 at 2020 and $4 at 2019)	83			84			90			84
Receivables from affiliated companies	47			92			57			92
Notes receivable from affiliated companies	35			—
Inventory	129			135			130			135
Regulatory assets	32			49			35			49
Other	14			21			13			21
Total current assets	348			398			335			398
Property, Plant and Equipment
Cost	10,591			10,241			10,804			10,241
Accumulated depreciation and amortization	(2,923		)	(2,843		)	(2,989		)	(2,843		)
Net property, plant and equipment	7,668			7,398			7,815			7,398
Other Noncurrent Assets
Goodwill	920			920			920			920
Regulatory assets	593			549			597			549
Operating lease right-of-use assets, net	21			21			20			21
Other	59			52			62			52
Total other noncurrent assets	1,593			1,542			1,599			1,542
Total Assets	$	9,609		$	9,338		$	9,749		$	9,338
LIABILITIES AND EQUITY
Current Liabilities
Accounts payable	$	249		$	288		$	240		$	288
Accounts payable to affiliated companies	58			68			54			68
Notes payable to affiliated companies	79			312			85			312
Taxes accrued	210			219			193			219
Interest accrued	31			30			32			30
Asset retirement obligations	5			1			7			1
Regulatory liabilities	69			64			66			64
Other	71			75			73			75
Total current liabilities	772			1,057			750			1,057
Long-Term Debt	2,994			2,594			3,064			2,594
Long-Term Debt Payable to Affiliated Companies	25			25			25			25
Other Noncurrent Liabilities
Deferred income taxes	958			922			965			922
Asset retirement obligations	77			79			84			79
Regulatory liabilities	751			763			753			763
Operating lease liabilities	20			21			20			21
Accrued pension and other post-retirement benefit costs	102			100			104			100
Other	96			94			100			94
Total other noncurrent liabilities	2,004			1,979			2,026			1,979
Commitments and Contingencies
Equity
Common Stock, $8.50 par value, 120 million shares authorized; 90 million shares outstanding at 2020 and 2019	762			762			762			762
Additional paid-in capital	2,776			2,776			2,776			2,776
Retained earnings	276			145			346			145
Total equity	3,814			3,683			3,884			3,683
Total Liabilities and Equity	$	9,609		$	9,338		$	9,749		$	9,338

~~See Notes to Condensed Consolidated Financial Statements~~



FINANCIAL STATEMENTS

DUKE ENERGY OHIO, INC.

Condensed Consolidated Statements of Cash Flows

(Unaudited)


	Six Months Ended						Nine Months Ended
	June 30,						September 30,
(in millions)	2020			2019			2020			2019
CASH FLOWS FROM OPERATING ACTIVITIES
Net income	$	131		$	116		$	201		$	190
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation and amortization	138			132			211			202
Equity component of AFUDC	(2		)	(7		)	(4		)	(9		)
Deferred income taxes	24			45			31			68
Contributions to qualified pension plans							—			(2		)
Payments for asset retirement obligations	—			(5		)	(1		)	(7		)
Provision for rate refunds	6			3			10			5
(Increase) decrease in
Receivables	2			24			(5		)	24
Receivables from affiliated companies	45			64			35			51
Inventory	6			2			5			(2		)
Other current assets	8			(13		)	5			(15		)
Increase (decrease) in
Accounts payable	(22		)	(44		)	(28		)	(40		)
Accounts payable to affiliated companies	(10		)	—			(14		)	(9		)
Taxes accrued	(9		)	(67		)	(23		)	(40		)
Other current liabilities	2			2			6			(4		)
Other assets	(24		)	(18		)	(24		)	(12		)
Other liabilities	(3		)	(15		)	(7		)	(22		)
Net cash provided by operating activities	292			219			398			378
CASH FLOWS FROM INVESTING ACTIVITIES
Capital expenditures	(403		)	(473		)	(611		)	(714		)
Notes receivable from affiliated companies	(35		)	—			—			(74		)
Other	(27		)	(31		)	(34		)	(45		)
Net cash used in investing activities	(465		)	(504		)	(645		)	(833		)
CASH FLOWS FROM FINANCING ACTIVITIES
Proceeds from the issuance of long-term debt	397			794			467			1,003
Payments for the redemption of long-term debt	—			(451		)	—			(451		)
Notes payable to affiliated companies	(233		)	(71		)	(227		)	(107		)
Net cash provided by financing activities	164			272			240			445
Net decrease in cash and cash equivalents	(9		)	(13		)	(7		)	(10		)
Cash and cash equivalents at beginning of period	17			21			17			21
Cash and cash equivalents at end of period	$	8		$	8		$	10		$	11
Supplemental Disclosures:
Significant non-cash transactions:
Accrued capital expenditures	$	94		$	93		$	92		$	100

~~See Notes to Condensed Consolidated Financial Statements~~



FINANCIAL STATEMENTS

DUKE ENERGY OHIO, INC.

Condensed Consolidated Statements of Changes in Equity

(Unaudited)


	Three Months Ended June 30, 2019 and 2020									Three Months Ended September 30, 2019 and 2020
			Additional		Retained							Additional		Retained
	Common		Paid-in		Earnings			Total		Common		Paid-in		Earnings			Total
(in millions)	Stock		Capital		(Deficit)			Equity		Stock		Capital		(Deficit)			Equity
Balance at March 31, 2019	$	762	$	2,776	$	(24	)	$	3,514
Balance at June 30, 2019										$	762	$	2,776	$	23		$	3,561
Net income	—		—		47			47		—		—		74			74
Balance at June 30, 2019	$	762	$	2,776	$	23		$	3,561
Balance at September 30, 2019										$	762	$	2,776	$	97		$	3,635

Balance at March 31, 2020	$	762	$	2,776	$	210		$	3,748
Balance at June 30, 2020										$	762	$	2,776	$	276		$	3,814
Net income	—		—		66			66		—		—		70			70
Balance at June 30, 2020	$	762	$	2,776	$	276		$	3,814
Balance at September 30, 2020										$	762	$	2,776	$	346		$	3,884

	Six Months Ended June 30, 2019 and 2020									Nine Months Ended September 30, 2019 and 2020
			Additional		Retained							Additional		Retained
	Common		Paid-in		Earnings			Total		Common		Paid-in		Earnings			Total
(in millions)	Stock		Capital		(Deficit)			Equity		Stock		Capital		(Deficit)			Equity
Balance at December 31, 2018	$	762	$	2,776	$	(93	)	$	3,445	$	762	$	2,776	$	(93	)	$	3,445
Net income	—		—		116			116		—		—		190			190
Balance at June 30, 2019	$	762	$	2,776	$	23		$	3,561
Balance at September 30, 2019										$	762	$	2,776	$	97		$	3,635

Balance at December 31, 2019	$	762	$	2,776	$	145		$	3,683	$	762	$	2,776	$	145		$	3,683
Net income	—		—		131			131		—		—		201			201
Balance at June 30, 2020	$	762	$	2,776	$	276		$	3,814
Balance at September 30, 2020										$	762	$	2,776	$	346		$	3,884

~~See Notes to Condensed Consolidated Financial Statements~~



FINANCIAL STATEMENTS

DUKE ENERGY INDIANA, LLC

Condensed Consolidated Statements of Operations and Comprehensive Income

(Unaudited)


	Three Months Ended				Six Months Ended				Three Months Ended				Nine Months Ended
	June 30,				June 30,				September 30,				September 30,
(in millions)	2020		2019		2020		2019		2020		2019		2020		2019
Operating Revenues	$	617	$	714	$	1,309	$	1,482	$	761	$	807	$	2,070	$	2,289
Operating Expenses
Fuel used in electric generation and purchased power	161		229		355		486		222		234		577		720
Operation, maintenance and other	171		188		357		377		207		192		564		569
Depreciation and amortization	134		132		266		263		149		130		415		393
Property and other taxes	20		20		42		39		15		16		57		55
Total operating expenses	486		569		1,020		1,165		593		572		1,613		1,737
Gains on Sales of Other Assets and Other, net	—		3		—		—
Operating Income	131		148		289		317		168		235		457		552
Other Income and Expenses, net	9		8		19		27		9		8		28		35
Interest Expense	42		28		85		71		29		40		114		111
Income Before Income Taxes	98		128		223		273		148		203		371		476
Income Tax Expense	17		31		43		66		29		47		72		113
Net Income and Comprehensive Income	$	81	$	97	$	180	$	207	$	119	$	156	$	299	$	363

~~See Notes to Condensed Consolidated Financial Statements~~



FINANCIAL STATEMENTS

DUKE ENERGY INDIANA, LLC

Condensed Consolidated Balance Sheets

(Unaudited)


(in millions)	June 30, 2020			December 31, 2019			September 30, 2020			December 31, 2019
ASSETS
Current Assets
Cash and cash equivalents	$	16		$	25		$	15		$	25
Receivables (net of allowance for doubtful accounts of $3 at 2020 and 2019)	44			60			48			60
Receivables from affiliated companies	59			79			84			79
Notes receivable from affiliated companies	425			—
Inventory	489			517			507			517
Regulatory assets	90			90			119			90
Other	45			60			30			60
Total current assets	1,168			831			803			831
Property, Plant and Equipment
Cost	16,736			16,305			17,223			16,305
Accumulated depreciation and amortization	(5,472		)	(5,233		)	(5,579		)	(5,233		)
Net property, plant and equipment	11,264			11,072			11,644			11,072
Other Noncurrent Assets
Regulatory assets	1,113			1,082			1,184			1,082
Operating lease right-of-use assets, net	56			57			55			57
Other	251			234			228			234
Total other noncurrent assets	1,420			1,373			1,467			1,373
Total Assets	$	13,852		$	13,276		$	13,914		$	13,276
LIABILITIES AND EQUITY
Current Liabilities
Accounts payable	$	204		$	201		$	172		$	201
Accounts payable to affiliated companies	74			87			65			87
Notes payable to affiliated companies	—			30			83			30
Taxes accrued	46			49			110			49
Interest accrued	64			58			63			58
Current maturities of long-term debt	503			503			13			503
Asset retirement obligations	172			189			170			189
Regulatory liabilities	51			55			76			55
Other	104			112			98			112
Total current liabilities	1,218			1,284			850			1,284
Long-Term Debt	3,950			3,404			3,941			3,404
Long-Term Debt Payable to Affiliated Companies	150			150			150			150
Other Noncurrent Liabilities
Deferred income taxes	1,195			1,150			1,179			1,150
Asset retirement obligations	643			643			1,044			643
Regulatory liabilities	1,655			1,685			1,648			1,685
Operating lease liabilities	54			55			53			55
Accrued pension and other post-retirement benefit costs	150			148			151			148
Investment tax credits	170			164			168			164
Other	12			18			56			18
Total other noncurrent liabilities	3,879			3,863			4,299			3,863
Commitments and Contingencies
Equity
Member's Equity	4,655			4,575			4,674			4,575
Total Liabilities and Equity	$	13,852		$	13,276		$	13,914		$	13,276

~~See Notes to Condensed Consolidated Financial Statements~~



FINANCIAL STATEMENTS

DUKE ENERGY INDIANA, LLC

Condensed Consolidated Statements of Cash Flows

(Unaudited)


	Six Months Ended						Nine Months Ended
	June 30,						September 30,
(in millions)	2020			2019			2020			2019
CASH FLOWS FROM OPERATING ACTIVITIES
Net income	$	180		$	207		$	299		$	363
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation, amortization and accretion	267			265			416			395
Equity component of AFUDC	(12		)	(9		)	(18		)	(13		)
Deferred income taxes	38			60			11			108
Contributions to qualified pension plans							—			(2		)
Payments for asset retirement obligations	(28		)	(17		)	(48		)	(31		)
(Increase) decrease in
Receivables	19			5			15			1
Receivables from affiliated companies	20			39			(5		)	37
Inventory	28			(41		)	10			(56		)
Other current assets	13			48			12			91
Increase (decrease) in
Accounts payable	22			26			(1		)	1
Accounts payable to affiliated companies	(13		)	(17		)	(22		)	(9		)
Taxes accrued	4			(18		)	65			(14		)
Other current liabilities	(22		)	(13		)	(2		)	(12		)
Other assets	(29		)	(33		)	(41		)	(75		)
Other liabilities	(6		)	15			104			67
Net cash provided by operating activities	481			517			795			851
CASH FLOWS FROM INVESTING ACTIVITIES
Capital expenditures	(456		)	(443		)	(669		)	(663		)
Purchases of debt and equity securities	(14		)	(14		)	(24		)	(19		)
Proceeds from sales and maturities of debt and equity securities	7			11			15			15
Notes receivable from affiliated companies	(425		)	—			—			(213		)
Other	(16		)	(21		)	(24		)	(33		)
Net cash used in investing activities	(904		)	(467		)	(702		)	(913		)
CASH FLOWS FROM FINANCING ACTIVITIES
Proceeds from the issuance of long-term debt	544			—			544			485
Payments for the redemption of long-term debt	—			(60		)	(500		)	(60		)
Notes payable to affiliated companies	(30		)	(2		)	53			(167		)
Distributions to parent	(100		)	—			(200		)	(200		)
Net cash provided by (used in) financing activities	414			(62		)	(103		)	58
Net decrease in cash and cash equivalents	(9		)	(12		)	(10		)	(4		)
Cash and cash equivalents at beginning of period	25			24			25			24
Cash and cash equivalents at end of period	$	16		$	12		$	15		$	20
Supplemental Disclosures:
Significant non-cash transactions:
Accrued capital expenditures	$	83		$	84		$	73		$	82

~~See Notes to Condensed Consolidated Financial Statements~~



FINANCIAL STATEMENTS

DUKE ENERGY INDIANA, LLC

Condensed Consolidated Statements of Changes in Equity

(Unaudited)


	Three Months Ended			Three Months Ended
	June 30, 2019 and 2020			September 30, 2019 and 2020
	Member's			Member's
(in millions)	Equity			Equity
Balance at March 31, 2019	$	4,449
Net income	97
Balance at June 30, 2019	$	4,546		$	4,546

Balance at March 31, 2020	$	4,674
Net income	81			156
Distributions to parent	(100		)	(200		)
Balance at September 30, 2019				$	4,502

Balance at June 30, 2020	$	4,655		$	4,655
Net income				119
Distributions to parent				(100		)
Balance at September 30, 2020				$	4,674

	Six Months Ended			Nine Months Ended
	June 30, 2019 and 2020			September 30, 2019 and 2020
	Member's			Member's
(in millions)	Equity			Equity
Balance at December 31, 2018	$	4,339		$	4,339
Net income	207			363
Balance at June 30, 2019	$	4,546
Distributions to parent				(200		)
Balance at September 30, 2019				$	4,502

Balance at December 31, 2019	$	4,575		$	4,575
Net income	180			299
Distributions to parent	(100		)	(200		)
Balance at June 30, 2020	$	4,655
Balance at September 30, 2020				$	4,674

~~See Notes to Condensed Consolidated Financial Statements~~



FINANCIAL STATEMENTS

PIEDMONT NATURAL GAS COMPANY, INC.

Condensed Consolidated Statements of Operations and Comprehensive Income

(Unaudited)


	Three Months Ended						Six Months Ended				Three Months Ended						Nine Months Ended
	June 30,						June 30,				September 30,						September 30,
(in millions)	2020			2019			2020		2019		2020			2019			2020		2019
Operating Revenues	$	197		$	209		$	709	$	788	$	162		$	168		$	871	$	956
Operating Expenses
Cost of natural gas	53			65			215		338		39			46			254		384
Operation, maintenance and other	79			83			159		163		75			78			234		241
Depreciation and amortization	43			42			88		84		45			43			133		127
Property and other taxes	12			13			24		25		13			14			37		39
Impairment charges											7			—			7		—
Total operating expenses	187			203			486		610		179			181			665		791
Operating Income	10			6			223		178
Operating (Loss) Income											(17		)	(13		)	206		165
Other Income and Expenses, net	16			6			28		12		16			7			44		19
Interest Expense	33			21			60		43		29			22			89		65
(Loss) Income Before Income Taxes	(7		)	(9		)	191		147		(30		)	(28		)	161		119
Income Tax (Benefit) Expense	(9		)	(2		)	11		32		(5		)	(10		)	6		22
Net Income (Loss) and Comprehensive Income (Loss)	$	2		$	(7	)	$	180	$	115
Net (Loss) Income and Comprehensive (Loss) Income											$	(25	)	$	(18	)	$	155	$	97

~~See Notes to Condensed Consolidated Financial Statements~~



FINANCIAL STATEMENTS

PIEDMONT NATURAL GAS COMPANY, INC.

Condensed Consolidated Balance Sheets

(Unaudited)


(in millions)	June 30, 2020			December 31, 2019			September 30, 2020			December 31, 2019
ASSETS
Current Assets
Receivables (net of allowance for doubtful accounts of $6 at 2020 and 2019)	$	102		$	241
Receivables (net of allowance for doubtful accounts of $9 at 2020 and $6 at 2019)							$	93		$	241
Receivables from affiliated companies	14			10			11			10
Inventory	29			72			47			72
Regulatory assets	118			73			119			73
Other	54			28			51			28
Total current assets	317			424			321			424
Property, Plant and Equipment
Cost	8,701			8,446			8,882			8,446
Accumulated depreciation and amortization	(1,715		)	(1,681		)	(1,713		)	(1,681		)
Net property, plant and equipment	6,986			6,765			7,169			6,765
Other Noncurrent Assets
Goodwill	49			49			49			49
Regulatory assets	280			290			287			290
Operating lease right-of-use assets, net	22			24			21			24
Investments in equity method unconsolidated affiliates	85			83			86			83
Other	278			121			279			121
Total other noncurrent assets	714			567			722			567
Total Assets	$	8,017		$	7,756		$	8,212		$	7,756
LIABILITIES AND EQUITY
Current Liabilities
Accounts payable	$	138		$	215		$	177		$	215
Accounts payable to affiliated companies	36			3			63			3
Notes payable to affiliated companies	200			476			327			476
Taxes accrued	28			24			36			24
Interest accrued	34			33			37			33
Current maturities of long-term debt	160			—			160			—
Regulatory liabilities	97			81			101			81
Other	56			67			59			67
Total current liabilities	749			899			960			899
Long-Term Debt	2,619			2,384			2,620			2,384
Other Noncurrent Liabilities
Deferred income taxes	763			708			775			708
Asset retirement obligations	17			17			17			17
Regulatory liabilities	1,078			1,131			1,070			1,131
Operating lease liabilities	21			23			20			23
Accrued pension and other post-retirement benefit costs	7			3			7			3
Other	141			148			146			148
Total other noncurrent liabilities	2,027			2,030			2,035			2,030
Commitments and Contingencies
Equity
Common stock, no par value: 100 shares authorized and outstanding at 2020 and 2019	1,310			1,310			1,310			1,310
Retained earnings	1,312			1,133			1,287			1,133
Total equity	2,622			2,443			2,597			2,443
Total Liabilities and Equity	$	8,017		$	7,756		$	8,212		$	7,756

~~See Notes to Condensed Consolidated Financial Statements~~



FINANCIAL STATEMENTS

PIEDMONT NATURAL GAS COMPANY, INC.

Condensed Consolidated Statements of Cash Flows

(Unaudited)


	Six Months Ended						Nine Months Ended
	June 30,						September 30,
(in millions)	2020			2019			2020			2019
CASH FLOWS FROM OPERATING ACTIVITIES
Net income	$	180		$	115		$	155		$	97
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation and amortization	89			85			135			129
Equity component of AFUDC	(9		)	—			(14		)	—
Impairment charges							7			—
Deferred income taxes	17			40			24			110
Equity in earnings from unconsolidated affiliates	(4		)	(4		)	(7		)	(6		)
Contributions to qualified pension plans							—			(1		)
Provision for rate refunds	(24		)	9			(27		)	9
(Increase) decrease in
Receivables	154			168			164			192
Receivables from affiliated companies	(4		)	5			(1		)	12
Inventory	42			37			25			23
Other current assets	(69		)	(17		)	(59		)	(95		)
Increase (decrease) in
Accounts payable	(68		)	(70		)	(53		)	(93		)
Accounts payable to affiliated companies	33			14			60			12
Taxes accrued	5			(61		)	16			(51		)
Other current liabilities	(4		)	10			(4		)	(6		)
Other assets	(13		)	(9		)	(14		)	(10		)
Other liabilities	7			(2		)	7			(5		)
Net cash provided by operating activities	332			320			414			317
CASH FLOWS FROM INVESTING ACTIVITIES
Capital expenditures	(438		)	(480		)	(641		)	(751		)
Contributions to equity method investments	—			(16		)	—			(16		)
Notes receivable from affiliated companies	—			(16		)
Other	(11		)	(6		)	(18		)	(10		)
Net cash used in investing activities	(449		)	(518		)	(659		)	(777		)
CASH FLOWS FROM FINANCING ACTIVITIES
Proceeds from the issuance of long-term debt	394			596			394			596
Payments for the redemption of long-term debt	—			(350		)	—			(350		)
Notes payable to affiliated companies	(277		)	(198		)	(149		)	64
Capital contributions from parent	—			150			—			150
Net cash provided by financing activities	117			198			245			460
Net increase in cash and cash equivalents	—			—			—			—
Cash and cash equivalents at beginning of period	—			—			—			—
Cash and cash equivalents at end of period	$	—		$	—		$	—		$	—
Supplemental Disclosures:
Significant non-cash transactions:
Accrued capital expenditures	$	98		$	115		$	123		$	121

~~See Notes to Condensed Consolidated Financial Statements~~



FINANCIAL STATEMENTS

PIEDMONT NATURAL GAS COMPANY, INC.

Condensed Consolidated Statements of Changes in Equity

(Unaudited)


	Three Months Ended June 30, 2019 and 2020								Three Months Ended September 30, 2019 and 2020
	Common		Retained			Total			Common		Retained			Total
(in millions)	Stock		Earnings			Equity			Stock		Earnings			Equity
Balance at March 31, 2019	$	1,160	$	1,053		$	2,213
Balance at June 30, 2019									$	1,310	$	1,046		$	2,356
Net loss	—		(7		)	(7		)	—		(18		)	(18		)
Contribution from parent	150		—			150
Balance at June 30, 2019	$	1,310	$	1,046		$	2,356
Balance at September 30, 2019									$	1,310	$	1,028		$	2,338

Balance at March 31, 2020	$	1,310	$	1,310		$	2,620
Net income	—		2			2
Balance at June 30, 2020	$	1,310	$	1,312		$	2,622		$	1,310	$	1,312		$	2,622
Net loss									—		(25		)	(25		)
Balance at September 30, 2020									$	1,310	$	1,287		$	2,597

	Six Months Ended June 30, 2019 and 2020								Nine Months Ended September 30, 2019 and 2020
	Common		Retained			Total			Common		Retained			Total
(in millions)	Stock		Earnings			Equity			Stock		Earnings			Equity
Balance at December 31, 2018	$	1,160	$	931		$	2,091		$	1,160	$	931		$	2,091
Net income	—		115			115			—		97			97
Contribution from parent	150		—			150			150		—			150
Balance at June 30, 2019	$	1,310	$	1,046		$	2,356
Balance at September 30, 2019									$	1,310	$	1,028		$	2,338

Balance at December 31, 2019	$	1,310	$	1,133		$	2,443		$	1,310	$	1,133		$	2,443
Net income	—		180			180			—		155			155
Other	—		(1		)	(1		)	—		(1		)	(1		)
Balance at June 30, 2020	$	1,310	$	1,312		$	2,622
Balance at September 30, 2020									$	1,310	$	1,287		$	2,597

~~See Notes to Condensed Consolidated Financial Statements~~



FINANCIAL STATEMENTS	ORGANIZATION AND BASIS OF PRESENTATION

Index to Combined Notes to Condensed Consolidated Financial Statements

The unaudited notes to the Condensed Consolidated Financial Statements that follow are a combined presentation. The following list indicates the registrants to which the footnotes apply.

Applicable Notes

Registrant

Duke Energy

•

Duke Energy Carolinas

•

Progress Energy

•

Duke Energy Progress

•

Duke Energy Florida

•

Duke Energy Ohio

•

Duke Energy Indiana

•

Piedmont

•

Tables within the notes may not sum across due to (i) Progress Energy's consolidation of Duke Energy Progress, Duke Energy Florida and other subsidiaries that are not registrants and (ii) subsidiaries that are not registrants but included in the consolidated Duke Energy balances.

1. ORGANIZATION AND BASIS OF PRESENTATION

BASIS OF PRESENTATION

These Condensed Consolidated Financial Statements have been prepared in accordance with GAAP for interim financial information and with the instructions to Form 10-Q and Regulation S-X. Accordingly, these Condensed Consolidated Financial Statements do not include all information and notes required by GAAP for annual financial statements and should be read in conjunction with the Consolidated Financial Statements in the Duke Energy Registrants’ combined Annual Report on Form 10-K for the year ended December 31, 2019.

The information in these combined notes relates to each of the Duke Energy Registrants as noted in the Index to Combined Notes to Condensed Consolidated Financial Statements. However, none of the registrants make any representations as to information related solely to Duke Energy or the subsidiaries of Duke Energy other than itself.

These Condensed Consolidated Financial Statements, in the opinion of the respective companies’ management, reflect all normal recurring adjustments necessary to fairly present the financial position and results of operations of each of the Duke Energy Registrants. Amounts reported in Duke Energy’s interim Condensed Consolidated Statements of Operations and each of the Subsidiary Registrants’ interim Condensed Consolidated Statements of Operations and Comprehensive Income are not necessarily indicative of amounts expected for the respective annual periods due to effects of seasonal temperature variations on energy consumption, regulatory rulings, timing of maintenance on electric generating units, changes in mark-to-market valuations, changing commodity prices and other factors.

In preparing financial statements that conform to GAAP, management must make estimates and assumptions that affect the reported amounts of assets and liabilities, the reported amounts of revenues and expenses and the disclosure of contingent assets and liabilities at the date of the financial statements. Actual results could differ from those estimates.

BASIS OF CONSOLIDATION

These Condensed Consolidated Financial Statements include, after eliminating intercompany transactions and balances, the accounts of the Duke Energy Registrants and subsidiaries or VIEs where the respective Duke Energy Registrants have control. See Note 1112 for additional information on VIEs. These Condensed Consolidated Financial Statements also reflect the Duke Energy Registrants’ proportionate share of certain jointly owned generation and transmission facilities.

COVID-19

The COVID-19 pandemic is having a significant impact on global health and economic environments. In March 2020, the World Health Organization declared COVID-19 a global pandemic, and President Trump proclaimed that the COVID-19 outbreak in the United States constitutes a national emergency. The ~~extent to which the COVID-19 pandemic will impact the Duke Energy Registrants during 2020 and beyond is uncertain, and the~~ Duke Energy Registrants are monitoring developments ~~closely.~~closely and responding appropriately. The company incurred approximately ~~$34~~$39 million and ~~$40~~$91 million of incremental COVID-19 costs before deferral for the three and ~~six~~nine months ended ~~June~~September 30, 2020, respectively, included in Operation, maintenance and other on the Condensed Consolidated Statements of Operations. ~~These~~For the nine months ended September 30, 2020, the company has deferred approximately $56 million of these incremental costs, which were primarily bad debt expense, personal protective equipment and cleaning supplies. Further, the company ~~experienced~~waived approximately ~~another $25~~$29 million and $54 million of ~~waived~~ late payment fees for the three and ~~six~~nine months ended ~~June~~September 30, ~~2020.~~2020, respectively. See Notes 3, 5, ~~11,~~ 12, 13 and 1516 for additional information as well as steps taken to mitigate the impacts to our business and customers from the COVID-19 pandemic.

OTHER CURRENT ASSETS

Included in Other within Current Assets on the Piedmont Condensed Consolidated Balance Sheets are ~~income taxes receivable~~prepaid assets of ~~$22~~$23 million and ~~$14~~$3 million as of ~~June~~September 30, 2020, and December 31, 2019, ~~respectively, and prepaid assets of $19 million and $3 million as of June 30, 2020, and December 31, 2019,~~ respectively. ~~The income taxes receivable relates to increases of net operating losses for Piedmont and intercompany tax settlements.~~ The prepaid assets relate to natural gas storage injections and inventory transfers classified as prepaid assets until winter season when the natural gas is moved to Inventory on the Piedmont Condensed Consolidated Balance Sheets under certain agreements.



FINANCIAL STATEMENTS	ORGANIZATION AND BASIS OF PRESENTATION

OTHER CURRENT LIABILITIES

~~During~~Included in Other within Current Liabilities on the Duke Energy Condensed Consolidated Balance Sheet is a current liability of $935 million and $0 as of September 30, 2020, and December 31, 2019, respectively. The current liability, initially recorded in the second quarter ~~of 2020, Duke Energy recorded a current liability related to~~and increased during the ~~abandonment of ACP within Current Liabilities in the Gas Utilities and Infrastructure segment. The liability~~third quarter, primarily represents Duke Energy's ~~obligation to fund~~share of ACP's obligations of outstanding debt and to satisfy ARO requirements to restore construction sites. ~~As a result, Liabilities associated with unconsolidated affiliates is $920 million, and exceeds 5% of Total current liabilities on the Duke Energy Condensed Consolidated Balance Sheets as of~~ ~~June 30, 2020~~. See Notes 3, 4 and 1112 for further information.

NONCONTROLLING INTEREST

Duke Energy maintains a controlling financial interest in certain less than wholly owned nonregulated subsidiaries. As a result, Duke Energy consolidates these subsidiaries and presents the third-party investors' portion of Duke Energy's net income (loss), net assets and comprehensive income (loss) as noncontrolling interest. Noncontrolling interest is included as a component of equity on the Condensed Consolidated Balance Sheet.

Several operating agreements of Duke Energy's subsidiaries with noncontrolling interest are subject to allocations of earnings, tax attributes and cash flows in accordance with contractual agreements that vary throughout the lives of the subsidiaries. Therefore, Duke Energy and the other investors' (the owners) interests in the subsidiaries are not fixed, and the subsidiaries apply the Hypothetical Liquidation at Book Value (HLBV) method in allocating income or loss and other comprehensive income or loss (all measured on a pretax basis) to the owners. The HLBV method measures the amounts that each owner would hypothetically claim at each balance sheet reporting date, including tax benefits realized by the owners over the IRS recapture period, upon a hypothetical liquidation of the subsidiary at the net book value of its underlying assets. The change in the amount that each owner would hypothetically receive at the reporting date compared to the amount it would have received on the previous reporting date represents the amount of income or loss allocated to each owner for the reporting period. The following table presents cash received for the sale of noncontrolling interest to tax equity members and allocated losses to noncontrolling tax equity members utilizing the HLBV method for the three and six months ended June 30, 2020, and 2019.

Three Months Ended Six Months Ended
(in millions) June 30, 2020 June 30, 2019 June 30, 2020 June 30, 2019
Cash received for the sale of noncontrolling interest to tax equity members $ 60
$ 187
$ 163
$ 193
Allocated losses to noncontrolling tax equity members utilizing the HLBV method 79
83
128
90

Other operating agreements of Duke Energy's subsidiaries with noncontrolling interest allocate profit and loss based on their pro rata shares of the ownership interest in the respective subsidiary. Therefore, Duke Energy allocates net income or loss and other comprehensive income or loss of these subsidiaries to the owners based on their pro rata shares.

The following table presents cash received for the sale of noncontrolling interest and allocated losses to noncontrolling interest for the three and nine months ended September 30, 2020, and 2019.



	Three Months Ended September 30,				Nine Months Ended September 30,
(in millions)	2020		2019		2020		2019
Noncontrolling Interest Capital Contributions
Cash received for the sale of noncontrolling interest to tax equity members	$	239	$	7	$	402	$	200
Cash received for the sale of noncontrolling interest to pro rata share members	0		0		0		415
Total Noncontrolling Interest Capital Contributions	239		7		402		615
Noncontrolling Interest Allocation of Income
Allocated losses to noncontrolling tax equity members utilizing the HLBV method	59		15		187		105
Allocated losses to noncontrolling members based on pro rata shares of ownership	11		4		21		5
Total Noncontrolling Interest Allocated Losses	$	70	$	19	$	208	$	110

CASH, CASH EQUIVALENTS AND RESTRICTED CASH

Duke Energy, Progress Energy and Duke Energy Florida have restricted cash balances related primarily to collateral assets, escrow deposits and VIEs. See Notes 910 and 1112 for additional information. Restricted cash amounts are included in Other within Current Assets and Other Noncurrent Assets on the Condensed Consolidated Balance Sheets. The following table presents the components of cash, cash equivalents and restricted cash included in the Condensed Consolidated Balance Sheets.


	June 30, 2020						December 31, 2019						September 30, 2020						December 31, 2019
					Duke						Duke						Duke						Duke
	Duke		Progress		Energy		Duke		Progress		Energy		Duke		Progress		Energy		Duke		Progress		Energy
	Energy		Energy		Florida		Energy		Energy		Florida		Energy		Energy		Florida		Energy		Energy		Florida
Current Assets
Cash and cash equivalents	$	341	$	78	$	20	$	311	$	48	$	17	$	308	$	70	$	19	$	311	$	48	$	17
Other	193		31		31		222		39		39		187		16		16		222		39		39
Other Noncurrent Assets
Other	107		102		—		40		39		—		105		102		—		40		39		—
Total cash, cash equivalents and restricted cash	$	641	$	211	$	51	$	573	$	126	$	56	$	600	$	188	$	35	$	573	$	126	$	56



FINANCIAL STATEMENTS	ORGANIZATION AND BASIS OF PRESENTATION

INVENTORY

Provisions for inventory write-offs were not material at ~~June~~September 30, 2020, and December 31, 2019. The components of inventory are presented in the tables below.


	June 30, 2020																September 30, 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
Materials and supplies	$	2,220	$	769	$	1,014	$	682	$	333	$	83	$	254	$	5	$	2,341	$	779	$	1,021	$	682	$	340	$	79	$	314	$	13
Coal	776		271		257		189		68		13		234		—		546		173		168		120		48		12		192		—
Natural gas, oil and other fuel	293		40		195		109		85		33		1		24		303		40		189		108		80		39		1		34
Total inventory	$	3,289	$	1,080	$	1,466	$	980	$	486	$	129	$	489	$	29	$	3,190	$	992	$	1,378	$	910	$	468	$	130	$	507	$	47



	December 31, 2019
			Duke				Duke		Duke		Duke		Duke
	Duke		Energy		Progress		Energy		Energy		Energy		Energy
(in millions)	Energy		Carolinas		Energy		Progress		Florida		Ohio		Indiana		Piedmont
Materials and supplies	$	2,297	$	768	$	1,038	$	686	$	351	$	79	$	318	$	5
Coal	586		187		186		138		48		15		198		—
Natural gas, oil and other fuel	349		41		199		110		90		41		1		67
Total inventory	$	3,232	$	996	$	1,423	$	934	$	489	$	135	$	517	$	72

NEW ACCOUNTING STANDARDS

The following new accounting standard was adopted by the Duke Energy Registrants in 2020.

Current Expected Credit Losses. In June 2016, the Financial Accounting Standards Board (FASB) issued new accounting guidance for credit losses. Duke Energy adopted the new accounting guidance for credit losses effective January 1, 2020, using the modified retrospective method of adoption, which does not require restatement of prior year results. Duke Energy did not adopt any practical expedients.

Duke Energy recognizes allowances for credit losses based on management's estimate of losses expected to be incurred over the lives of certain assets or guarantees. Management monitors credit quality, changes in expected credit losses and the appropriateness of the allowance for credit losses on a forward-looking basis. Management reviews the risk of loss periodically as part of the existing assessment of collectability of receivables.

Duke Energy reviews the credit quality of its counterparties as part of its regular risk management process and requires credit enhancements, such as deposits or letters of credit, as appropriate and as allowed by regulators.

Duke Energy recorded cumulative effects of changes in accounting principles related to the adoption of new credit loss standard, for allowances for credit losses of trade and other receivables, insurance receivables and financial guarantees. These amounts are included in the Condensed Consolidated Balance Sheets in Receivables, Receivables of VIEs, Other Noncurrent Assets and Other Noncurrent Liabilities. See Notes 4 and 1213 for more information.

Duke Energy recorded an adjustment for the cumulative effect of a change in accounting principle due to the adoption of this standard on January 1, 2020, as shown in the table below:



	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

The following new accounting standard has been issued but not yet adopted by the Duke Energy Registrants as of ~~June~~September 30, 2020.

Reference Rate Reform. In March 2020, the FASB issued new accounting guidance for reference rate reform. This guidance is elective and provides expedients to facilitate financial reporting for the anticipated transition away from the London Inter-bank Offered Rate (LIBOR) and other interbank reference rates by the end of 2021. The optional expedients are effective for modification of existing contracts or new arrangements executed between March 12, 2020, through December 31, 2022.



FINANCIAL STATEMENTS	ORGANIZATION AND BASIS OF PRESENTATION

Duke Energy has variable-rate debt and manages interest rate risk by entering into financial contracts including interest rate swaps that are generally indexed to LIBOR. Impacted financial arrangements extending beyond 2021 may require contractual amendment or termination to fully adapt to a post-LIBOR environment. Duke Energy is assessing these financial arrangements and is evaluating the use of optional expedients outlined in the new accounting guidance. Alternative index provisions are also being assessed and incorporated into new financial arrangements that extend beyond 2021. The full outcome of the transition away from LIBOR cannot be determined at this time, but is not expected to have a material impact on the financial statements.

2. BUSINESS SEGMENTS

Duke Energy

Duke Energy's segment structure includes the following segments: Electric Utilities and Infrastructure, Gas Utilities and Infrastructure and Commercial Renewables. The Electric Utilities and Infrastructure segment primarily includes Duke Energy's regulated electric utilities in the Carolinas, Florida and the Midwest. The Gas Utilities and Infrastructure segment includes Piedmont, Duke Energy's natural gas local distribution companies in Ohio and Kentucky, and Duke Energy's natural gas storage and midstream pipeline investments.

The Commercial Renewables segment is primarily comprised of nonregulated utility-scale wind and solar generation assets located throughout the U.S. In 2020, Duke Energy ~~evaluated~~continues to evaluate recoverability of a renewable merchant plant located in the Electric Reliability Council of Texas West market due to declining market pricing and declining long-term forecasted energy prices, primarily driven by lower forecasted natural gas prices. Duke Energy determined that the asset was not impaired as of September 30, 2020, because the carrying value of ~~$155~~approximately $150 million approximates the aggregate estimated future undiscounted cash ~~flows and therefore further testing was not required.~~flows. A continued decline in energy market pricing would likely result in a future impairment. Duke Energy retained 51% ownership interest in this facility following the 2019 transaction to sell a minority interest in certain renewable assets.

The remainder of Duke Energy’s operations is presented as Other, which is primarily comprised of interest expense on holding company debt, unallocated corporate costs, Duke Energy’s wholly owned captive insurance company, Bison, and Duke Energy's ownership interest in National Methanol Company.

Business segment information is presented in the following tables. Segment assets presented exclude intercompany assets.


	Three Months Ended June 30, 2020																			Three Months Ended September 30, 2020
	Electric		Gas					Total												Electric		Gas					Total
	Utilities and		Utilities and			Commercial		Reportable												Utilities and		Utilities and			Commercial		Reportable
(in millions)	Infrastructure		Infrastructure			Renewables		Segments			Other			Eliminations			Total			Infrastructure		Infrastructure			Renewables		Segments		Other			Eliminations			Total
Unaffiliated revenues	$	5,026	$	265		$	123	$	5,414		$	7		$	—		$	5,421		$	6,371	$	217		$	126	$	6,714	$	7		$	—		$	6,721
Intersegment revenues	8		24			—		32			19			(51		)	—			8		24			—		32		17			(49		)	—
Total revenues	$	5,034	$	289		$	123	$	5,446		$	26		$	(51	)	$	5,421		$	6,379	$	241		$	126	$	6,746	$	24		$	(49	)	$	6,721
Segment income (loss)^(a)(b)	$	753	$	(1,576	)	$	90	$	(733	)	$	(84	)	$	—		$	(817	)	$	1,381	$	(73	)	$	60	$	1,368	$	(103	)	$	—		$	1,265
Less: Noncontrolling interests^(c)																	90																		70
Add: Preferred stock dividend																	15																		39
Net Loss																	$	(892	)
Net Income																																			$	1,234
Segment assets	$	136,724	$	13,072		$	6,386	$	156,182		$	3,874		$	(7	)	$	160,049		$	138,142	$	13,343		$	6,541	$	158,026	$	3,387		$	(4	)	$	161,409


	Three Months Ended June 30, 2019																Three Months Ended September 30, 2019
	Electric		Gas				Total										Electric		Gas				Total
	Utilities and		Utilities and		Commercial		Reportable										Utilities and		Utilities and		Commercial		Reportable
(in millions)	Infrastructure		Infrastructure		Renewables		Segments		Other			Eliminations			Total		Infrastructure		Infrastructure		Renewables		Segments		Other			Eliminations			Total
Unaffiliated revenues	$	5,467	$	282	$	118	$	5,867	$	6		$	—		$	5,873	$	6,569	$	225	$	138	$	6,932	$	8		$	—		$	6,940
Intersegment revenues	8		24		—		32		19			(51		)	—		8		24		—		32		17			(49		)	—
Total revenues	$	5,475	$	306	$	118	$	5,899	$	25		$	(51	)	$	5,873	$	6,577	$	249	$	138	$	6,964	$	25		$	(49	)	$	6,940
Segment income (loss)(c)	$	809	$	40	$	86	$	935	$	(115	)	$	—		$	820	$	1,385	$	26	$	40	$	1,451	$	(124	)	$	—		$	1,327
Less: Noncontrolling interests^(c)															84																19
Add: Preferred stock dividend															12																15
Net Income															$	748															$	1,323



FINANCIAL STATEMENTS	BUSINESS SEGMENTS

Six Months Ended June 30, 2020
Electric
Gas
Total

Utilities and
Utilities and
Commercial
Reportable

(in millions) Infrastructure
Infrastructure
Renewables
Segments
Other
Eliminations
Total
Unaffiliated revenues $ 10,200
$ 905
$ 252
$ 11,357
$ 13
$ —
$ 11,370
Intersegment revenues 17
48
—
65
36
(101 ) —
Total revenues $ 10,217
$ 953
$ 252
$ 11,422
$ 49
$ (101 ) $ 11,370
Segment income (loss)^(a)(b)
$ 1,458
$ (1,327 ) $ 147
$ 278
$ (196 ) $ —
$ 82
Less: Noncontrolling interests^(c)
138
Add: Preferred stock dividend 54
Net Loss $ (2 )

Six Months Ended June 30, 2019
Electric
Gas
Total

Utilities and
Utilities and
Commercial
Reportable

(in millions) Infrastructure
Infrastructure
Renewables
Segments
Other
Eliminations
Total
Unaffiliated revenues $ 10,788
$ 1,014
$ 224
$ 12,026
$ 10
$ —
$ 12,036
Intersegment revenues 16
48
—
64
36
(100 ) —
Total revenues $ 10,804
$ 1,062
$ 224
$ 12,090
$ 46
$ (100 ) $ 12,036
Segment income (loss) $ 1,559
$ 266
$ 99
$ 1,924
$ (204 ) $ —
$ 1,720
Less: Noncontrolling interests^(c)
91
Add: Preferred stock dividend 12
Net Income $ 1,641

(a)

Electric Utilities and Infrastructure includes $19 million recorded within Impairment charges and $8 million recorded within Operations, maintenance and other on the Duke Energy Carolinas' Condensed Consolidated Statements of Operations related to a partial settlement in the Duke Energy Carolinas' 2019 North Carolina rate case and $8 million recorded within Operations, maintenance and other on Duke Energy Progress' Condensed Consolidated Statements of Operation related to a partial settlement in the Duke Energy Progress' 2019 North Carolina rate case. See Note 3 for more information. Additionally, Electric Utilities and Infrastructure includes $5 million of Impairment charges related to gas pipeline assets recorded on Duke Energy Progress' Condensed Consolidated Statements of Operations.

(b)

Gas Utilities and Infrastructure includes ~~$2.0 billion of pretax costs related to the abandonment of its ACP investment~~$78 million recorded within Equity in (losses) earnings of unconsolidated affiliates on the Condensed Consolidated Statements of Operations and $7 million in Impairment charges recorded on the Piedmont Condensed Consolidated Statements of Operations related to gas pipeline investments.


(c)	Electric Utilities and Infrastructure includes a $25 million reduction of a prior year impairment recorded at Citrus County CC related to the plant's cost cap and is recorded within Impairment charges on Duke Energy Florida's Condensed Consolidated Statements of Operations.



	Nine Months Ended September 30, 2020
	Electric		Gas					Total
	Utilities and		Utilities and			Commercial		Reportable
(in millions)	Infrastructure		Infrastructure			Renewables		Segments		Other			Eliminations			Total
Unaffiliated revenues	$	16,571	$	1,122		$	378	$	18,071	$	20		$	—		$	18,091
Intersegment revenues	25		72			—		97		53			(150		)	—
Total revenues	$	16,596	$	1,194		$	378	$	18,168	$	73		$	(150	)	$	18,091
Segment income (loss)^(a)(b)(c)	$	2,839	$	(1,400	)	$	207	$	1,646	$	(299	)	$	—		$	1,347
Less: Noncontrolling interests																208
Add: Preferred stock dividend																93
Net Income																$	1,232



	Nine Months Ended September 30, 2019
	Electric		Gas				Total
	Utilities and		Utilities and		Commercial		Reportable
(in millions)	Infrastructure		Infrastructure		Renewables		Segments		Other			Eliminations			Total
Unaffiliated revenues	$	17,357	$	1,239	$	362	$	18,958	$	18		$	—		$	18,976
Intersegment revenues	24		72		—		96		53			(149		)	—
Total revenues	$	17,381	$	1,311	$	362	$	19,054	$	71		$	(149	)	$	18,976
Segment income (loss)^(d)	$	2,944	$	292	$	139	$	3,375	$	(328	)	$	—		$	3,047
Less: Noncontrolling interests															110
Add: Preferred stock dividend															27
Net Income															$	2,964

(a)


(b)	Gas Utilities and Infrastructure includes $2.1 billion recorded within Equity in (losses) earnings of unconsolidated affiliates on the Condensed Consolidated Statements of Operations and $7 million of Impairment charges recorded on the Piedmont Condensed Consolidated Statements of Operations related to gas pipeline investments. See Notes 1, 3 and ~~Note 11~~12 for additional information.


~~(b)~~(c)	Other includes a $98 million reversal, included in Operations, maintenance and other on the Condensed Consolidated Statements of Operations, of 2018 severance costs due to ~~the~~a partial settlement ofin the Duke Energy ~~Carolina's~~Carolinas' 2019 North Carolina rate case. See Note 3 for additional information.


~~(c)~~(d)	~~Includes~~Electric Utilities and Infrastructure includes a $25 million reduction of a prior year impairment recorded at Citrus County CC related to the ~~allocation~~plant's costs cap and is recorded within Impairment charges on Duke Energy Florida's Condensed Consolidated Statements of ~~losses to noncontrolling tax equity members. See Note 1 for additional information.~~Operations.



FINANCIAL STATEMENTS	BUSINESS SEGMENTS

Duke Energy Ohio

Duke Energy Ohio has 2 reportable segments, Electric Utilities and Infrastructure and Gas Utilities and Infrastructure. The remainder of Duke Energy Ohio's operations is presented as Other.


	Three Months Ended June 30, 2020														Three Months Ended September 30, 2020
	Electric		Gas		Total										Electric		Gas		Total
	Utilities and		Utilities and		Reportable										Utilities and		Utilities and		Reportable
(in millions)	Infrastructure		Infrastructure		Segments		Other			Eliminations			Total		Infrastructure		Infrastructure		Segments		Other			Eliminations			Total
Total revenues	$	330	$	93	$	423	$	—		$	—		$	423	$	394	$	79	$	473	$	—		$	—		$	473
Segment income/Net (loss) income	$	44	$	23	$	67	$	(1	)	$	—		$	66
Segment income/Net income															$	63	$	9	$	72	$	(2	)	$	—		$	70
Segment assets	$	6,378	$	3,213	$	9,591	$	26		$	(8	)	$	9,609	$	6,448	$	3,297	$	9,745	$	27		$	(23	)	$	9,749


	Three Months Ended June 30, 2019											Three Months Ended September 30, 2019
	Electric		Gas		Total							Electric		Gas		Total
	Utilities and		Utilities and		Reportable							Utilities and		Utilities and		Reportable
(in millions)	Infrastructure		Infrastructure		Segments		Other			Total		Infrastructure		Infrastructure		Segments		Other			Total
Total revenues	$	336	$	97	$	433	$	—		$	433	$	408	$	81	$	489	$	—		$	489
Segment income/Net (loss) income	$	31	$	17	$	48	$	(1	)	$	47
Segment income/Net income												$	62	$	13	$	75	$	(1	)	$	74



~~FINANCIAL STATEMENTS~~	~~BUSINESS SEGMENTS~~



	Nine Months Ended September 30, 2020
	Electric		Gas		Total
	Utilities and		Utilities and		Reportable
(in millions)	Infrastructure		Infrastructure		Segments		Other			Total
Total revenues	$	1,070	$	324	$	1,394	$	—		$	1,394
Segment income/Net (loss) income	$	137	$	68	$	205	$	(4	)	$	201

Six Months Ended June 30, 2020
Electric
Gas
Total

Utilities and
Utilities and
Reportable

(in millions) Infrastructure
Infrastructure
Segments
Other
Total
Total revenues $ 676
$ 245
$ 921
$ —
$ 921
Segment income/Net (loss) income $ 74
$ 59
$ 133
$ (2 ) $ 131


	Six Months Ended June 30, 2019											Nine Months Ended September 30, 2019
	Electric		Gas		Total							Electric		Gas		Total
	Utilities and		Utilities and		Reportable							Utilities and		Utilities and		Reportable
(in millions)	Infrastructure		Infrastructure		Segments		Other			Total		Infrastructure		Infrastructure		Segments		Other			Total
Total revenues	$	691	$	273	$	964	$	—		$	964	$	1,099	$	354	$	1,453	$	—		$	1,453
Segment income/Net (loss) income	$	67	$	52	$	119	$	(3	)	$	116	$	129	$	65	$	194	$	(4	)	$	190

3. REGULATORY MATTERS

RATE-RELATED INFORMATION

The NCUC, PSCSC, FPSC, IURC, PUCO, TPUC and KPSC approve rates for retail electric and natural gas services within their states. The FERC approves rates for electric sales to wholesale customers served under cost-based rates (excluding Ohio and Indiana), as well as sales of transmission service. The FERC also regulates certification and siting of new interstate natural gas pipeline projects.

Duke Energy Carolinas and Duke Energy Progress

COVID-19 Filings

North Carolina

On March 10, 2020, Governor Roy Cooper ~~issued Executive Order No. 116 declaring~~declared a state of emergency due to the COVID-19 pandemic. On March 19, 2020, the NCUC issued an order directing that utilities under its jurisdiction suspend disconnections for nonpayment of utility bills during the state of emergency ~~(as defined by Executive Order No. 116)~~ and allow for customers to enter into payment arrangements to pay off arrearages accumulated during the state of emergency after the end of the state of emergency. Additionally, to help mitigate the financial impacts of the COVID-19 pandemic on their customers, on March 19, 2020, Duke Energy Carolinas and Duke Energy Progress 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 the companies’ 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. On May 30, 2020, the governor issued Executive Order No. 142, which extended effective period for Executive Order No. 124 to July 29, 2020. Executive Order No. 142 was not extended.

On July 10, 2020, Duke Energy Carolinas and Duke Energy Progress filed a petition with the NCUC for clarification regarding when they may begin working with customers on establishing payment arrangements for arrears accumulated since March 13, 2020.



FINANCIAL STATEMENTS	REGULATORY MATTERS

On July 29, 2020, the NCUC issued its Order Lifting Disconnection Moratorium and Allowing Collection of Arrearages Pursuant to Special Repayment Plans. The order contained the following: 1)(1) public utilities may resume customer disconnections due to nonpayment for bills first rendered on or after September 1, 2020, after appropriate notice; 2)(2) the late fee moratorium will continue through the end of the state of emergency or until further order of the commission; 3)(3) Duke Energy utilities may reinstate fees for checks returned for insufficient funds as well as transaction fees for use of credit cards or debit cards for bills first rendered on or after September 1, 2020; and 4)(4) no sooner than September 1, 2020, the collection of past-due or delinquent accounts accrued up to and including August 31, 2020, may proceed subject to conditions. Duke Energy Carolinas and Duke Energy Progress resumed normal billing practices as of October 1, 2020, with the exception of the billing of late payment charges. Customers were notified of the resumption of normal billing practices, the option of deferred payment arrangements and where to find assistance, if necessary. Service disconnections for nonpayment for residential customers resumed on November 2, 2020.

Duke Energy Carolinas and Duke Energy Progress filed a joint petition on August 7, 2020, with the NCUC for deferral treatment of incremental costs and waived customer fees due to the COVID-19 pandemic. On October 30, 2020, the NCUC issued an order extending deadlines to file comments on the joint petition to November 5, 2020, and reply comments to November 30, 2020. Duke Energy Carolinas and Duke Energy Progress cannot predict the outcome of this matter.

South Carolina

On March 13, 2020, Governor Henry McMaster ~~issued Executive Order No. 2020-08 declaring~~declared 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 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.



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

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 six months for past-due amounts. On May 5, 2020, Duke Energy Carolinas and Duke Energy Progress filed responsive comments stating that while utility bills will remain due, Duke Energy Carolinas and Duke Energy Progress do not plan to immediately reinstitute disconnection upon the expiration of the state of emergency and intend to work through a potential grace period as economic recovery begins. Duke Energy Carolinas and Duke Energy Progress 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. Duke Energy Carolinas and Duke Energy Progress 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. On May 14, 2020, the PSCSC adopted the ORS' motion.

On May 13, 2020, the ORS filed a letter with the PSCSC that included a request from Governor McMaster that utilities proceed with developing and implementing plans for phasing in normal business operations. On May 14, 2020, the PSCSC conditionally vacated the regulation waivers regarding termination of service and suspension of disconnect fees. Prior to termination, utilities are to refer past-due customers to local organizations for assistance and/or deferred payment arrangements. Duke Energy Carolinas and Duke Energy Progress filed a report on June 30, 2020, as required by PSCSC order, reporting revenue impact, costs and savings related to COVID-19 to date. On August 14, 2020, Duke Energy Carolinas and Duke Energy Progress ~~are evaluating~~filed a ~~filing~~joint petition with the PSCSC for approval of an accounting order to defer incremental COVID-19 related costs incurred through June 30, 2020, and for the ongoing months during the duration of the COVID-19 pandemic. The deferral ~~treatment~~request did not include lost revenues. Updates on cost impacts were filed on September 30, 2020, and included financial impacts through the end of ~~incremental~~August 2020. On October 16, 2020, the ORS requested the PSCSC delay taking formal action on the deferral request until the ORS and any intervenors complete discovery. The PSCSC issued an order on October 21, 2020, to grant additional time to complete discovery until January 20, 2021, and to establish a procedural schedule.

On August 17, 2020, Duke Energy Carolinas and Duke Energy Progress filed an update on their planned return to normal operations during the COVID-19 pandemic. Normal billing practices resumed in South Carolina as of October 1, 2020, and service disconnections for nonpayment resumed on October 12, 2020. Customers were notified of the resumption of normal billing practices, the option of payment arrangements and where to find assistance, if necessary. Duke Energy Carolinas and Duke Energy Progress cannot predict the outcome of this matter.

2020 North Carolina Storm Securitization Filings

On October 26, 2020, Duke Energy Carolinas and Duke Energy Progress filed a joint petition with the NCUC, as agreed to in partial settlements reached in the 2019 North Carolina Rate Cases for Duke Energy Carolinas and Duke Energy Progress, seeking authorization for the financing of each utilities’ storm recovery activities required as a result of Hurricane Florence, Hurricane Michael, Hurricane Dorian and Winter Storm Diego. Specifically, Duke Energy Carolinas and Duke Energy Progress requested that the NCUC find that their storm recovery costs and ~~waived customer fees due~~related financing costs are appropriately financed by debt secured by storm recovery property, and that the commission issue financing orders by which each utility may accomplish such financing using a securitization structure. The total revenue requirement over the proposed 15-year bond period for the storm recovery charges is approximately $262 million for Duke Energy Carolinas and $842 million for Duke Energy Progress. The NCUC has until March 10, 2021, to ~~the COVID-19 pandemic.~~issue financing orders. Duke Energy Carolinas and Duke Energy Progress cannot predict the outcome of this matter.

Duke Energy Carolinas

2017 North Carolina Rate Case

On August 25, 2017, Duke Energy Carolinas filed an application with the NCUC for a rate increase for retail customers of approximately $647 million. On February 28, 2018, Duke Energy Carolinas and the North Carolina Public Staff (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% and a capital structure of 52% equity and 48% debt. On June 22, 2018, the NCUC issued an order approving the Stipulation of Partial Settlement and requiring a revenue reduction.



FINANCIAL STATEMENTS	REGULATORY MATTERS

2019 North Carolina Rate Case

On September 30, 2019, Duke Energy Carolinas filed an application with the NCUC for a net rate increase for retail customers of approximately $291 million, which represented an approximate 6% increase in annual base revenues. The gross rate case revenue increase request was $445 million, which was offset by an EDIT rider of $154 million to return to customers North Carolina and federal EDIT resulting from recent reductions in corporate tax rates. The request for a 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 Carolinas requested rates be effective no later than August 1, 2020. The NCUC established a procedural schedule with an evidentiary hearing to begin on March 23, 2020. On March 16, 2020, in consideration of public health and safety as a result of the COVID-19 pandemic, Duke Energy Carolinas filed a motion with the NCUC seeking a suspension of the procedural schedule in the rate case, including issuing discovery requests, and postponement of the evidentiary hearing for 60 days. Also on March 16, 2020, the NCUC issued an Order Postponing Hearing and Addressing Procedural Matters, which postponed the evidentiary hearing until further order by the commission.

On March 25, 2020, Duke Energy Carolinas and the Public Staff filed an Agreement and Stipulation of Partial Settlement, which is subject to review and approval of the NCUC, resolving certain issues in the base rate proceeding. Major components of the settlement included:

Removal of deferred storm costs from the rate case;

Filing a petition seeking to securitize the deferred storm costs within 120 days of a commission order in this rate case regarding the reasonableness and prudency of the storm costs;

Agreement of certain assumptions to demonstrate the quantifiable benefits to customers of a securitization financing; and

Agreement on certain accounting matters, including recovery of employee incentives, severance, aviation costs and executive compensation.



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

On May 6, 2020, Duke Energy Carolinas, Duke Energy Progress 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. On June 17, 2020, the NCUC issued an order adopting procedures for the expert witness hearings to take place in three phases: 1)(1) a hearing on issues common to both rate cases conducted remotely; 2)(2) a hearing on Duke Energy Carolinas specific rate case issues, ~~conducted in person,~~ followed immediately by; 3)(3) a hearing on Duke Energy Progress specific rate case ~~issues conducted in person.~~issues. On July 24, 2020, Duke Energy Carolinas filed its request for approval of its notice to customers required to implement temporary rates. On July 27, 2020, Duke Energy Carolinas filed a joint motion with Duke Energy Progress and the Public Staff notifying the commission that the parties reached a joint partial settlement with the Public ~~Staff and requesting a postponement of the evidentiary hearing until August 24, 2020. The NCUC granted the joint motion on July 27, 2020.~~Staff. Also on July 27, 2020, Duke Energy Carolinas filed a letter stating that it intended to update its temporary rates calculation to reflect the terms of the partial settlement.

On July 31, 2020, Duke Energy Carolinas and the Public Staff filed a Second Agreement and Stipulation of Partial Settlement (Second Partial Settlement), which is subject to review and approval of the NCUC, resolving certain remaining issues in the base rate proceeding. Major components of the Second Partial Settlement included:

A return on equity of 9.6% and a capital structure of 52% equity and 48% debt;

Agreement on amortization over a five-year period for unprotected federal EDIT flowbacks to customers;

Agreement on the inclusion of plant in service and other revenue requirement updates through May 31, 2020, subject to Public Staff review. Annual revenue requirement associated with the May 31 update is estimated at $45 million; and

Settlement onto allow the deferral of costs for certain grid ~~deferral~~ projects ofplaced in service between June 1, 2020, and December 31, 2022, totaling $0.8 ~~billion and agreement to withdraw Duke Energy Carolinas' request for deferral of remaining grid projects of $0.5~~ billion.

The remaining items ~~to be~~ litigated at hearing ~~include~~included recovery of deferred coal ash compliance costs that are subject to asset retirement obligation accounting, implementation of new depreciation rates and the amortization period of the loss on the hydro station sale. ~~As a result of the additional settlement terms, the NCUC ordered the Duke Energy Carolinas and Duke Energy Progress remote, consolidated evidentiary hearing to be delayed until August 24, 2020.~~

On August 4, 2020, Duke Energy Carolinas filed an amended motion for approval of its amended notice to customers, seeking to exercise its statutory right to implement temporary rates subject to refund on or after August 24, 2020. The revenue requirement to be recovered, subject to refund, through the temporary rates is based on and consistent with the base rate component of the Second Partial Settlement with the Public Staff and excludes the items to be litigated noted above. Duke Energy Carolinas will not begin the amortization or implementation of these items until a final order is issued in the rate case and new base rates are implemented. These items will also be excluded when determining whether a refund of amounts collected through these temporary rates is needed. In addition, Duke Energy Carolinas also seeks authorization to place a temporary decrement EDIT Rider into effect, concurrent with the temporary base rate change. The temporary rate changes are not final rates and remain subject to the NCUC's determination of the just and reasonable rates to be charged by Duke Energy Carolinas on a permanent basis. The NCUC approved the August 4, 2020 amended temporary rates motion on August 6, 2020, and temporary rates went into effect on August 24, 2020.

The Duke Energy Carolinas evidentiary hearing concluded on September 18, 2020, and post-hearing filings were filed with the NCUC from all parties by November 4, 2020. Duke Energy Carolinas expects the NCUC to issue an order on its net rate increase bybefore the end of the ~~year.~~first quarter of 2021. Duke Energy Carolinas cannot predict the outcome of this matter.

2018 South Carolina Rate Case

On November 8, 2018, Duke Energy Carolinas filed an application with the PSCSC for a rate increase for retail customers of approximately $168 million.



FINANCIAL STATEMENTS	REGULATORY MATTERS

After hearings in March 2019, the PSCSC issued an order on May 21, 2019, which included a return on equity of 9.5% and 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.



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

As a result of the order, revised customer rates were effective June 1, 2019. On May 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~~PSCSC on certain issues presented in the proceeding. On June 19, 2019, the PSCSC issued a Directive denying Duke Energy 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 a return on 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 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 Notice of Cross Appeal with the Supreme Court of South Carolina. On February 12, 2020, Duke Energy Carolinas and 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, which was granted by the Supreme Court of South Carolina on April 30, 2020. Initial briefs were filed on April 21, 2020, which included the South Carolina Energy User's Committee brief arguing that the PSCSC erred in allowing Duke Energy Carolinas' recovery of costs related to the Lee Nuclear Station. Response briefs were filed on July 6, 2020, and reply briefs ~~are due~~were filed on August 11, 2020. Oral arguments have not yet been scheduled by the Supreme Court of South Carolina. Based on legal analysis and the filing of the appeal, Duke Energy Carolinas has not recorded an adjustment for its deferred coal ash costs. Duke Energy Carolinas cannot predict the outcome of this matter.

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 was subsequently adjusted to $420 million. 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% and a capital structure of 52% equity and 48% debt. On February 23, 2018, the NCUC issued an order approving the stipulation. The Public Staff, the North Carolina Attorney General and the Sierra Club filed ~~notes~~notices of appeal to the North Carolina Supreme Court.

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. Appellant briefs were filed on April 26, 2019. The Appellee response briefs were filed on 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.



FINANCIAL STATEMENTS	REGULATORY MATTERS

On June 2, 2020, Duke Energy Progress and the Public Staff filed an Agreement and Stipulation of Partial Settlement, which is subject to review and approval of the NCUC, resolving certain issues in the base rate proceeding. Major components of the settlement included:

Removal of deferred storm costs from the rate case;

Filing a petition seeking to securitize the deferred storm costs within 120 days of a commission order in this rate case regarding the reasonableness and prudency of the storm costs;

Agreement of certain assumptions to demonstrate the quantifiable benefits to customers of a securitization financing;

Agreement that the Asheville CC project is complete and in service and agreement on the amount to be included in rate base; and

Agreement on certain accounting matters, including recovery of employee incentives, severance, aviation costs and executive compensation.

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. On June 17, 2020, the NCUC issued an order adopting procedures for the expert witness hearings to take place in three phases: 1)(1) a hearing on issues common to both rate cases conducted remotely; 2)(2) a hearing on Duke Energy Carolinas specific rate case issues, ~~conducted in person,~~ followed immediately by; 3)(3) a hearing on Duke Energy Progress specific rate case ~~issues conducted in person.~~issues. On July 27, 2020, Duke Energy Progress filed a joint motion with Duke Energy Carolinas and the Public Staff notifying the commission that the parties reached a joint partial settlement with the Public ~~Staff and requesting a postponement of the evidentiary hearing until August 24, 2020. The NCUC granted the joint motion on July 27, 2020.~~



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

Staff.

On July 31, 2020, Duke Energy Progress and the Public Staff filed a Second Agreement and Stipulation of Partial Settlement (Second Partial Settlement), which is subject to review and approval of the NCUC, resolving certain remaining issues in the base rate proceeding. Major components of the Second Partial Settlement included:

A return on equity of 9.6% and a capital structure of 52% equity and 48% debt;

Agreement on amortization over a five-year period for unprotected federal EDIT flowbacks to customers;

Settlement onto allow the deferral of costs for certain grid ~~deferral~~ projects ~~of $0.5 billion~~placed in service between June 1, 2020, and ~~agreement to withdraw Duke Energy Progress' request for deferral of remaining grid projects~~December 31, 2022, of $0.5 billion.

The remaining items ~~to be~~ litigated at hearing ~~include~~included recovery of deferred coal ash compliance costs that are subject to asset retirement obligation accounting and implementation of new depreciation rates. ~~As a result of the additional settlement terms, the NCUC ordered the Duke Energy Progress and Duke Energy Carolinas remote, consolidated evidentiary hearing to be delayed until August 24, 2020.~~

On August 7, 2020, Duke Energy Progress filed a motion for approval of notice required to implement temporary rates, seeking to exercise its statutory right to implement temporary rates subject to refund on or after September 1, 2020. The revenue requirement to be recovered subject to refund through the temporary rates is based on and consistent with the terms of the base rate component of the settlement agreements with the Public Staff and excludes items to be litigated noted above. Duke Energy Progress will not begin the amortization or implementation of these items until a final determination is issued in the rate case and new base rates are implemented. These items will also be excluded when determining whether a refund of amounts collected through these temporary rates is needed. In addition, Duke Energy Progress also seeks authorization to place a temporary decrement EDIT Rider into effect, concurrent with the temporary base rate change. The temporary rate changes are not final rates and remain subject to the NCUC's determination of the just and reasonable rates to be charged by Duke Energy Progress on a permanent basis. The NCUC approved the August 7, 2020 temporary rates motion on August 11, 2020, and temporary rates went into effect on September 1, 2020.

The Duke Energy Progress evidentiary hearing concluded on October 6, 2020, and post-hearing filings are due to be filed with the NCUC from all parties by December 4, 2020. Duke Energy Progress expects the NCUC to issue an order on its net rate increase by the end of the ~~year.~~first quarter of 2021. 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. Total estimated incremental operation and maintenance expenses incurred to repair and restore the system are approximately ~~$165~~$168 million with an additional $4 million in capital investments made for restoration efforts. Approximately ~~$139~~$145 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 ~~June~~September 30, 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. Terms of the June 2, 2020, Agreement and Stipulation of Partial Settlement removed incremental storm costs from the general rate case. A petition seeking to securitize these costs, ~~will be~~along with costs from Hurricane Florence, Hurricane Michael and Winter Storm Diego, was filed ~~within 120 days of an~~on October 26, 2020, with the NCUC. The NCUC ~~order in the general rate case.~~has until March 10, 2021, to issue financing orders. 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. On July 1, 2020, Duke Energy Progress filed a supplemental true up reducing the actual costs to $17 million.



FINANCIAL STATEMENTS	REGULATORY MATTERS

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.

After hearings in April 2019, the PSCSC issued an order on May 21, 2019, which included a return on equity of 9.5% and 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%.



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

As a result of the order, revised customer rates were effective June 1, 2019. On May 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~~PSCSC on certain issues presented in the proceeding. On June 19, 2019, the PSCSC issued a Directive denying Duke Energy 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 a return on deferred operation and maintenance expenses, but allowing additional litigation-related costs. As a result of 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 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, which was granted by the Supreme Court of South Carolina on April 30, 2020. Initial briefs were filed on April 21, 2020. Response briefs were filed on July 6, 2020, and reply briefs ~~are due~~were filed on August 11, 2020. Oral arguments have not yet been scheduled by the Supreme Court of South Carolina. Based on legal analysis and the filing of the appeal, Duke Energy Progress has not recorded an adjustment for its deferred coal ash costs. Duke Energy Progress cannot predict the outcome of this matter.

Western Carolinas Modernization Plan

Duke Energy Progress retired the 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 be retired, net to Regulatory assets within Current Assets and Other Noncurrent Assets on the Condensed Consolidated Balance Sheets.

On December 27, 2019, Asheville Combined Cycle Unit 5 Combustion Turbine and Unit 6 Steam Turbine Generator and the common systems that serve combined cycle units went into commercial operation. Duke Energy Progress placed the Unit 7 Combustion Turbine into commercial operation in simple-cycle mode on January 15, 2020. The Unit 8 Steam Turbine Generator went into commercial operation on April 5, 2020. On June 2, 2020, Duke Energy Progress filed a request with the PSCSC for an accounting order for the deferral of post-in-service costs incurred in connection with the addition of the Asheville ~~combined cycle~~combined-cycle generating plant. The petition requested the PSCSC issue an accounting order authorizing Duke Energy Progress to defer post-in-service costs including the Asheville ~~combined cycle’s~~combined-cycle’s depreciation expense, property taxes, incremental O&M and carrying costs at WACC of approximately $8 million annually. On June 17, 2020, the PSCSC voted to approve the petition and issued its final order on July 6, 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, which was approved with certain conditions on May 10, 2019. A hearing to update the NCUC on the status of the project was held on March 5, 2020. Construction began in May 2020 with commercial operation expected to begin in ~~December~~October 2021.

On July 27, 2020, Duke Energy Progress filed an application with the NCUC for a CPCN to construct the Woodfin Solar Facility, a 5-MW solar generating facility to be constructed on a closed landfill in Buncombe County. The expert hearing is scheduled for November 18, 2020.

FERC Return on Equity ~~Complaint~~Complaints

On October 11, 2019, North Carolina Eastern Municipal Power Agency (NCEMPA) filed a complaint at the FERC against Duke Energy Progress pursuant to Section 206 of the Federal Power Act (FPA). Duke Energy Progress provides NCEMPA with service under the Full Requirements Power Purchase Agreement (FRPPA). The complaint alleges that the 11% stated return on equity (ROE) component contained in the FRPPA’s demand formula rate is unjust and unreasonable. On July 16, 2020, the FERC set this matter for hearing and settlement judge procedures and established a refund effective date of October 11, 2019. In its order setting the matter for settlement, the FERC allowed for variation to the base transmission-related ROE methodology developed in Order No. 569-A, through the introduction of “specific facts and circumstances” involving the parties to this case. The parties to this case are currently in FERC settlement procedures.It is Duke Energy Progress’ view that, in consideration of the specific facts and circumstances of risks under the provisions of the FRPPA, the stated 11% ROE applied to NCEMPA’s metered billing demand is just and reasonable. Duke Energy Progress cannot predict the outcome of this matter.



FINANCIAL STATEMENTS	REGULATORY MATTERS

On October 16, 2020, North Carolina Electric Membership Corporation (NCEMC) filed a complaint at the FERC against Duke Energy Progress pursuant to Section 206 of the FPA. The complaint alleges that the ROE component in the formula rate contained within the Power Supply and Coordination Agreement (PSCA) between NCEMC and Duke Energy Progress is unjust and unreasonable. The PSCA's return on equity is 11% as applied to the Production Capacity Rate for the requirements service provided by Duke Energy Progress. Under FPA Section 206, the earliest refund effective date that the FERC can establish is the date of the filing of the complaint. Duke Energy Progress will respond to the complaint and believes the 11% ROE is just and reasonable for the service provided under the contract. Duke Energy Progress cannot predict the outcome of this matter.

Duke Energy Florida

COVID-19 Filings

OnIn March 1, 2020, Governor Ron DeSantis ~~issued Executive Order No. 20-51 directing~~directed the State Health Officer of Florida to declare a public health emergency in Florida related to the COVID-19 pandemic. The governor ~~then~~also issued ~~a second~~an 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~~ceased 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.



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

Duke Energy Florida resumed normal billing practices as of August 24, 2020, with the exception of the billing of late payment charges. Customers were notified of the resumption of normal billing practices, the option of deferred payment arrangements and where to find assistance, if necessary. Service disconnections for nonpayment for residential customers resumed on October 5, 2020.

Storm Restoration Cost Recovery

Duke Energy Florida filed a petition with the FPSC on April 30, 2019, to recover $223 million of estimated retail incremental storm restoration costs for Hurricane Michael, consistent with the provisions in the 2017 Settlement, and the FPSC approved the petition on June 11, 2019. The FPSC also approved allowing Duke Energy Florida to use the tax savings resulting from the Tax Act to recover these storm costs in lieu of implementing a storm surcharge. 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. On May 19, 2020, Duke Energy Florida filed a supplemental true up reducing the actual retail recoverable storm restoration costs related to Hurricane Michael by approximately $3 million, resulting in a total request to recover $188 million actual retail recoverable storm restoration costs, plus interest. An Order Establishing Procedure was issued on January 30, 2020, and hearings are scheduled to begin ~~September 15,~~December 8, 2020. Approximately ~~$163~~$119 million and $204 million of these costs are included in Regulatory assets within Current Assets and Other Noncurrent Assets on the Condensed Consolidated Balance Sheets as of ~~June~~September 30, 2020, and December 31, 2019, respectively. Duke Energy Florida cannot predict the outcome of this matter.

Duke Energy Florida filed a petition with the FPSC on December 19, 2019, to recover $169 million of estimated retail incremental storm restoration costs for Hurricane Dorian, consistent with the provisions in the 2017 Settlement and the FPSC approved the petition on February 24, 2020. Approved storm costs are ~~currently expected to be~~being recovered over a 12-month period with rates effective in March 2020 and subject to true up. The final actual amount ~~will be~~of $145 million was filed ~~later in~~on September 30, 2020, and the FPSC will hold a hearing to determine the final amount of incremental costs. Approximately ~~$95~~$38 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 ~~June~~September 30, 2020, and December 31, 2019, respectively, representing recoverable costs under the FPSC’s storm rule and Duke Energy Florida's OATT formula rates. Duke Energy Florida cannot predict the outcome of this matter.

Clean Energy Connection

On July 1, 2020, Duke Energy Florida petitioned the FPSC for approval of a voluntary solar program. The program consists of 10 new solar generating facilities with combined capacity of approximately 750 MW. The program allows participants to support ~~cost effective~~cost-effective solar development in ~~Florida. Participants will pay~~Florida by paying a subscription fee based on per kilowatt-subscriptions and ~~receive~~receiving a credit on their bill based on the actual generation associated with their portion of the solar portfolio. The estimated cost of the 10 new solar generation facilities is approximately $1 billion over the next four years, and this investment will be included in base rates offset by the revenue from the subscription fees. The credits will be included for recovery in the fuel cost recovery clause. A hearing on the petition is scheduled to begin on November 17, 2020. Duke Energy Florida cannot predict the outcome of this matter.

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 (ADP), a joint venture between NorthStar Group Services, Inc. and Orano USA LLC. ~~Closing of this~~The agreement ~~is contingent upon the approval~~will allow for completion of the ~~U.S. Nuclear Regulatory Commission (NRC), which was received on April 1, 2020, and FPSC. If approved, the~~ decommissioning ~~will be accelerated starting in 2020 and continuing through~~of Crystal River Unit 3 by 2027, rather than 2074 as originally planned. Duke Energy Florida will also sell and assign the ~~expected time frame under SAFSTOR of starting in 2067~~spent nuclear fuel, storage canisters, high-level waste and ~~ending in 2074.~~existing dry spent fuel storage installation and certain related assets, together with certain associated liabilities and obligations to ADP SF1, LLC. Duke Energy Florida expects that the assets of the Nuclear Decommissioning Trust Fund as of September 30, 2020, will be sufficient to cover the contract price. ~~On July 10, 2019, Duke Energy Florida petitioned~~The U.S. Nuclear Regulatory Commission approved the transaction on April 1, 2020, and the FPSC ~~for approval of~~issued an order approving the ~~agreement.~~transaction on August 27, 2020. The ~~FPSC held the hearing~~agreement closed on ~~July 7-9, 2020, and is expected to vote on the petition at its August 18 Agenda Conference. Duke Energy Florida cannot predict the outcome of this matter.~~October 1, 2020.



FINANCIAL STATEMENTS	REGULATORY MATTERS

Storm Protection Plan

On April 10, 2020, Duke Energy Florida filed its initial Storm Protection Plan (SPP) with the FPSC. The SPP outlines storm protection programs over a 10-year planning period intended to enhance the existing infrastructure for the purpose of reducing restoration costs and reducing outage times associated with extreme weather conditions therefore improving overall service reliability. ~~The FPSC will hold a hearing to determine whether to approve, deny, or approve the SPP with modifications beginning on August 10, 2020.~~ On July 31, 2020, Duke Energy Florida entered into a settlement with certain intervenors in support of this filing. ~~Duke Energy Florida cannot predict~~On August 28, 2020, the ~~outcome of this matter.~~FPSC unanimously approved the settlement agreement, which effectively approves the 2020-2029 SPP as-filed, without modification.

Duke Energy Ohio

Duke Energy Ohio COVID-19 ~~Filing~~Filings

In response to the COVID-19 pandemic, on March 9, 2020, Governor Mike DeWine ~~issued Executive Order No. 2020-01D declaring~~declared 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~~waived 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 May 4, 2020, Duke Energy Ohio filed a motion to suspend payment rules to enable proactive outreach to residential customers offering additional options for managing their utility bills. PUCO found the proposal to address the state of emergency and the accompanying waivers reasonable and directed Duke Energy Ohio to work with the PUCO Staff on a comprehensive plan for resumption of activities and operations, to be filed 45 days before resumption of activities. The transition plan to resume normal operations to pre-COVID-19 levels was filed on June 26, 2020, and approved by the PUCO on July 29, 2020. It included resuming suspended work and activities beginning August 10, 2020, and resuming disconnections in September 2020.

On April 16, 2020, Duke Energy Ohio filed an application for a Reasonable Arrangement to temporarily lower the minimum bill for demand-metered commercial and industrial customers. On June 17, 2020, the PUCO denied Duke Energy Ohio's application for a reasonable arrangement and ordered ~~the~~ Duke Energy Ohio to work with the PUCO Staff on payment arrangements for impacted nonresidential customers.



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

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 using 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. On June 17, 2020, the PUCO approved Duke Energy Ohio’s deferral application. The commission denied the accrual of carrying costs and ordered Duke Energy Ohio to also track potential savings experienced as a result of COVID-19.

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~~declared 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.~~payment 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. In response, Duke Energy Kentucky ~~has~~ ceased all disconnections except for safety-related concerns and ~~is waiving~~waived late payment and reconnection fees. On ~~June 23,~~September 21, 2020, the KPSC issued ~~data requests~~an order ending the disconnection moratorium for residential and nonresidential customers effective no earlier than October 20, 2020. Utilities are required to ~~all jurisdictional utilities seeking information on customer bill impacts,~~offer residential customers a default payment plan for any arrearages ~~bad debt~~accumulated through the October 2020 billing cycle. Utilities are permitted to resume assessment of late payment charges for nonresidential customers beginning October 20, 2020, and ~~incremental costs and savings due to COVID-19. Responses were filed on July 21,~~for residential customers after December 31, 2020. Duke Energy Kentucky ~~cannot predict~~will follow the ~~outcome of this matter.~~order, as clarified on September 30, 2020, by the KPSC.

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 April 13, 2018, Duke Energy Ohio, along with certain intervenors, filed a Stipulation and Recommendation (Stipulation) with the PUCO resolving that 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 approved new rider mechanisms relating to costs incurred to enhance the customer experience and transform the grid and a service reliability rider for vegetation management. On September 13, 2019, and September 16, 2019, Interstate Gas Supply/Retail Supply Association and the Ohio Consumers' Counsel (OCC), respectively, filed appeals to the Supreme Court of Ohio claiming the PUCO’s order was in error. On March 13, 2020, the Supreme Court of Ohio dismissed OCC's appeal. On April 22, 2020, the Supreme Court of Ohio dismissed all remaining appeals of the PUCO's December 19, 2018 order approving the ~~stipulation.~~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%. On April 13, 2018, Duke Energy Ohio, along with certain intervenors, filed the Stipulation with the PUCO including 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~~Duke Energy Ohio'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 Power Future Initiatives Rider (formerly 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. On September 13, 2019, and September 16, 2019, Interstate Gas Supply/Retail Supply Association and the OCC, respectively, filed appeals to the Supreme Court of Ohio claiming the PUCO’s order was in error. On March 13, 2020, the Supreme Court of Ohio dismissed OCC's appeal. On April 22, 2020, the Supreme Court of Ohio dismissed all remaining appeals of the PUCO's December 19, 2018 order approving the ~~stipulation.~~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, 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. On September 13, 2019, and September 16, 2019, Interstate Gas Supply/Retail Supply Association and the OCC filed appeals to the Supreme Court of Ohio claiming the PUCO’s order was in error. On March 13, 2020, the Supreme Court of Ohio dismissed OCC's appeal. On April 22, 2020, the Supreme Court of Ohio dismissed all remaining appeals of the PUCO's December 19, 2018 order approving the ~~stipulation.~~Stipulation. The case has been resolved.

On July 23, 2019, House Bill 6 ~~(HB6)~~(HB 6) was signed into law that became effective January 1, 2020. Among other things, the bill allows for funding of two nuclear generating facilities located in Northern Ohio through a charge on utility bills owned by Energy Harbor (f/k/a FirstEnergy Solutions), repeal of energy efficiency mandates, and 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 1312 for additional discussion of Duke Energy Ohio's ownership interest in OVEC. In July 2020, legislation to repeal HB 6 ~~has been~~was proposed in both the Ohio House and ~~Senate.~~Senate, with subsequent hearings to receive witness testimony. Duke Energy Ohio cannot predict the outcome of this matter.



~~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. 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. 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 8, 2020, Duke Energy Ohio filed an application to implement a voluntary energy efficiency program portfolio to commence on January 1, 2021. The application proposes a mechanism for recovery of program costs, lost margins and a shared savings incentive mechanism similar to those previously approved by the PUCO. On June 17, 2020, the PUCO, on its own motion, struck Duke Energy Ohio’s proposal to include a shared savings mechanism in its plan finding such incentives are not permissible or supportable under Ohio law. On June 26, 2020, Duke Energy Ohio withdrew its application. On October 9, 2020, Duke Energy Ohio filed an application to implement a voluntary efficiency program portfolio to commence on January 1, 2021. The application proposes a mechanism for recovery of program costs and a benefit associated with avoided transmission and distribution costs. Duke Energy Ohio cannot predict the outcome of this matter.

~~Natural Gas Pipeline Extension~~South Carolina

On March 13, 2020, Governor Henry McMaster declared 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 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 May 13, 2020, the ORS filed a letter with the PSCSC that included a request from Governor McMaster that utilities proceed with developing and implementing plans for phasing in normal business operations. On May 14, 2020, the PSCSC conditionally vacated the regulation waivers regarding termination of service and suspension of disconnect fees. Prior to termination, utilities are to refer past-due customers to local organizations for assistance and/or deferred payment arrangements. 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~~Carolinas and ~~enable the retirement of older infrastructure.~~ Duke Energy ~~Ohio currently estimates the pipeline development~~Progress filed a report on June 30, 2020, as required by PSCSC order, reporting revenue impact, costs and ~~construction activities will range from $163 million~~savings related to ~~$245 million in direct~~COVID-19 to date. On August 14, 2020, Duke Energy Carolinas and Duke Energy Progress filed a joint petition with the PSCSC for approval of an accounting order to defer incremental COVID-19 related costs ~~(excluding overheads~~incurred through June 30, 2020, and ~~AFUDC) and that construction~~for the ongoing months during the duration of the ~~pipeline extension is expected to be completed before the 2021/2022 winter season. An evidentiary hearing for a Certificate of Environmental Compatibility and Public Need concluded~~COVID-19 pandemic. The deferral request did not include lost revenues. Updates on ~~April 11, 2019. Briefs~~cost impacts were filed on ~~May 13, 2019,~~September 30, 2020, and ~~reply briefs were filed~~included financial impacts through the end of August 2020. On October 16, 2020, the ORS requested the PSCSC delay taking formal action on ~~June 10, 2019.~~ the deferral request until the ORS and any intervenors complete discovery. The PSCSC issued an order on October 21, 2020, to grant additional time to complete discovery until January 20, 2021, and to establish a procedural schedule.

On ~~November 21, 2019, the OPSB approved~~August 17, 2020, Duke Energy ~~Ohio's application subject~~Carolinas and Duke Energy Progress filed an update on their planned return to ~~41 conditions~~normal operations during the COVID-19 pandemic. Normal billing practices resumed in South Carolina as of October 1, 2020, and service disconnections for nonpayment resumed on ~~construction. Applications for rehearing~~October 12, 2020. Customers were filed by several stakeholders on December 23, 2019, arguing that the OPSB approval was incorrect. On February 20, 2020, the OPSB denied the rehearing requests. On April 15, 2020, Joint Appellants filed a notice of appeal at the Supreme Court of Ohionotified of the ~~OPSB’s decision approving~~resumption of normal billing practices, the option of payment arrangements and where to find assistance, if necessary. Duke Energy ~~Ohio’s Central Corridor application. On June 4, 2020, the OPSB filed a motion to dismiss claims raised by one of the Joint Appellants~~Carolinas and to suspend the briefing schedule while the court considers the motion to dismiss. On August 5, 2020, the Supreme Court of Ohio dismissed one of the Joint Appellants from the appeal and established a new briefing schedule, with appellants' briefs due in 20 days. Duke Energy ~~Ohio~~Progress cannot predict the outcome of this matter.

~~MGP Cost Recovery~~2020 North Carolina Storm Securitization Filings

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 2 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 has collected approximately $55 million in environmental remediation costs between 2009 through 2012 through Rider 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. On March 29, 2019, Duke Energy Ohio filed its annual application to recover incremental remediation expense for the calendar year 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 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.

~~On March 31,~~26, 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. On July 23, 2020, the staff recommended a disallowance of approximately $4 million for work the staff believes occurred in areas not authorized for recovery. Additionally, the staff recommended insurance proceeds, net of litigation costsCarolinas and ~~attorney fees, should be reimbursed to customers and not be held by~~ Duke Energy ~~Ohio until all investigation and remediation is complete. 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 the deferral of 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.



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

~~Duke Energy Kentucky Electric Base Rate Case~~

~~On September 3, 2019, Duke Energy Kentucky~~Progress filed a ~~rate case~~joint petition with the ~~KPSC requesting an increase~~NCUC, as agreed to in electric base rates of approximately $46 million. On January 31, 2020, Duke Energy Kentucky filed rebuttal testimony updating its rate increase calculations to approximately $44 million. Hearings concluded on February 20, 2020, and briefing was completed March 20, 2020. On April 27, 2020,partial settlements reached in the ~~KPSC issued its decision approving a $24 million increase~~2019 North Carolina Rate Cases for Duke Energy ~~Kentucky with a 9.25% return on equity. The KPSC denied~~Carolinas and Duke Energy ~~Kentucky’s major~~Progress, seeking authorization for the financing of each utilities’ storm ~~deferral mechanism~~recovery activities required as a result of Hurricane Florence, Hurricane Michael, Hurricane Dorian and ~~EV and battery storage pilots. The KPSC approved~~Winter Storm Diego. Specifically, Duke Energy ~~Kentucky’s Green Source Advantage tariff. New customer rates were effective on May 1, 2020. On May 18, 2020,~~Carolinas and Duke Energy ~~Kentucky filed its motion~~Progress requested that the NCUC find that their storm recovery costs and related financing costs are appropriately financed by debt secured by storm recovery property, and that the commission issue financing orders by which each utility may accomplish such financing using a securitization structure. The total revenue requirement over the proposed 15-year bond period for ~~rehearing and on June 4, 2020,~~ the ~~motion was granted in part and denied in part by the KPSC. On August 6, 2020,~~storm recovery charges is approximately $262 million for Duke Energy ~~Kentucky submitted a letter to the commission submitting the case~~Carolinas and $842 million for decision without hearing. On August 6, 2020, the Kentucky Attorney General also filed a letter requesting to submit the rehearing case for decision without hearing. The Attorney General’s letter also stated that the commission’s reduction to the company’s forecasted capital in its initial order was overstated and should be corrected, resulting in an approximate $5 million increase in the company’s revenue requirement. Duke Energy ~~Kentucky~~Progress. The NCUC has until March 10, 2021, to issue financing orders. Duke Energy Carolinas and Duke Energy Progress cannot predict the outcome of this matter.

Duke Energy ~~Indiana~~Carolinas

~~COVID-19~~

In response to the COVID-19 pandemic, on 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 state of Indiana. Subsequently, the governor issued Executive Orders Nos. 20-17, 20-25, 20-30 and 20-34, each renewing the public health disaster emergency declaration for an additional 30 days, which is currently extended through September 2, 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 had already voluntarily suspended all disconnections and is waiving late payment fees and check return fees. The utility is also waiving credit card fees for residential customers.

~~2019 Indiana~~2017 North Carolina Rate Case

On ~~July 2, 2019,~~August 25, 2017, Duke Energy ~~Indiana~~Carolinas filed ~~a general rate case~~an application with the ~~IURC~~NCUC for a rate increase for retail customers of approximately ~~$395~~$647 million. ~~The rebuttal case,~~On February 28, 2018, Duke Energy Carolinas and the North Carolina Public Staff (Public Staff) filed ~~on December 4, 2019, updated the requested revenue requirement to result in a 15.6% or $396 million average retail rate increase, including the impacts~~an Agreement and Stipulation of Partial Settlement resolving certain portions of the ~~Utility Receipts Tax. Hearings concluded on February 7, 2020. On June 29, 2020,~~proceeding. Terms of the ~~IURC issued the order in the rate case approving~~settlement included a ~~revenue increase of $146 million before certain adjustments and ratemaking refinements. The order provided for an overall cost of capital of 5.7% based on a 9.7%~~ return on equity of 9.9% and a ~~53% equity component of the~~ capital structure of 52% equity and ~~approved~~48% debt. On June 22, 2018, the NCUC issued an order approving the Stipulation of Partial Settlement and requiring a revenue reduction.

The North Carolina Attorney General and other parties separately filed Notices of Appeal to the North Carolina Supreme Court. On August 8, 2018, the Public Staff filed a Notice of Cross Appeal to the North Carolina Supreme Court. 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 ~~Indiana’s requested forecasted rate base of $10.2 billion as of December 31, 2020, including the Edwardsport IGCC Plant. The IURC reduced~~Carolinas and Duke Energy ~~Indiana’s request by slightly more than $200 million, when accounting~~Progress 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 ~~utility receipts tax~~motion to consolidate the Duke Energy Carolinas and ~~other adjustments. Approximately 50% of~~Duke Energy Progress appeals. Appellant briefs were filed on April 26, 2019. The Appellee response briefs were filed on September 25, 2019. Oral arguments before the ~~reduction is due to a prospective change in depreciation and use of regulatory asset for the end-of-life inventory at retired generating plants, approximately 20% is due to the approved 9.7% return~~North Carolina Supreme Court were held on equity versus requested 10.4% and approximately 20% is related to miscellaneous earnings neutral adjustments. The rates were effective July 30, 2020. Several groups filed notices of appeal of the IURC order on July 29,March 11, 2020. Duke Energy ~~Indiana~~Carolinas cannot predict the outcome of this matter.

~~2020 Indiana Coal Ash Recovery Case~~

In Duke Energy Indiana’s rate case, the IURC approved coal ash basin closure costs expended through 2018 including financing costs as a regulatory asset and included in rate base. The IURC opened a subdocket to deal with the post-2018 coal ash related expenditures. 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 is scheduled to begin on September 14, 2020, and an order is expected in the first quarter of 2021. Duke Energy Indiana cannot predict the outcome of this matter.



FINANCIAL STATEMENTS	REGULATORY MATTERS

~~Piedmont~~

~~COVID-19 Filings~~

2019 North Carolina Rate Case

On ~~March 10, 2020, Governor Roy Cooper issued Executive Order No. 116 declaring~~September 30, 2019, Duke Energy Carolinas filed an application with the NCUC for a ~~state~~net rate increase for retail customers of ~~emergency due~~approximately $291 million, which represented an approximate 6% increase in annual base revenues. The gross rate case revenue increase request was $445 million, which was offset by an EDIT rider of $154 million to return to customers North Carolina and federal EDIT resulting from recent reductions in corporate tax rates. The request for a rate increase was driven by major capital investments subsequent to the ~~COVID-19 pandemic.~~previous base rate case, coal ash pond closure costs, accelerated coal plant depreciation and deferred 2018 storm costs. Duke Energy Carolinas requested rates be effective no later than August 1, 2020. The NCUC established a procedural schedule with an evidentiary hearing to begin on March 23, 2020. On March ~~19,~~16, 2020, in consideration of public health and safety as a result of the COVID-19 pandemic, Duke Energy Carolinas filed a motion with the NCUC seeking a suspension of the procedural schedule in the rate case, including issuing discovery requests, and postponement of the evidentiary hearing for 60 days. Also on March 16, 2020, the NCUC issued an Order Postponing Hearing and Addressing Procedural Matters, which postponed the evidentiary hearing until further order by the commission.

Removal of deferred storm costs from the rate case;

Filing a petition seeking to securitize the deferred storm costs within 120 days of a commission order in this rate case regarding the reasonableness and prudency of the storm costs;

Agreement of certain assumptions to demonstrate the quantifiable benefits to customers of a securitization financing; and

Agreement on certain accounting matters, including recovery of employee incentives, severance, aviation costs and executive compensation.

On May 6, 2020, Duke Energy Carolinas, Duke Energy Progress and the Public Staff filed a joint motion requesting that the NCUC issue an order ~~directing~~scheduling one consolidated evidentiary hearing to consider the companies’ applications for net rate increases. On June 17, 2020, the NCUC issued an order adopting procedures for the expert witness hearings to take place in three phases: (1) a hearing on issues common to both rate cases conducted remotely; (2) a hearing on Duke Energy Carolinas specific rate case issues, followed immediately by; (3) a hearing on Duke Energy Progress specific rate case issues. On July 24, 2020, Duke Energy Carolinas filed its request for approval of its notice to customers required to implement temporary rates. On July 27, 2020, Duke Energy Carolinas filed a joint motion with Duke Energy Progress and the Public Staff notifying the commission that ~~utilities under~~the parties reached a joint partial settlement with the Public Staff. Also on July 27, 2020, Duke Energy Carolinas filed a letter stating that it intended to update its ~~jurisdiction suspend disconnections~~temporary rates calculation to reflect the terms of the partial settlement.

A return on equity of 9.6% and a capital structure of 52% equity and 48% debt;

Agreement on amortization over a five-year period for ~~nonpayment~~unprotected federal EDIT flowbacks to customers;

Agreement on the inclusion of ~~utility bills during~~plant in service and other revenue requirement updates through May 31, 2020, subject to Public Staff review. Annual revenue requirement associated with the ~~state~~May 31 update is estimated at $45 million; and

Settlement to allow the deferral of ~~emergency (as defined~~costs for certain grid projects placed in service between June 1, 2020, and December 31, 2022, totaling $0.8 billion.

The remaining items litigated at hearing included recovery of deferred coal ash compliance costs that are subject to asset retirement obligation accounting, implementation of new depreciation rates and the amortization period of the loss on the hydro station sale.

On August 4, 2020, Duke Energy Carolinas filed an amended motion for approval of its amended notice to customers, seeking to exercise its statutory right to implement temporary rates subject to refund on or after August 24, 2020. The revenue requirement to be recovered, subject to refund, through the temporary rates is based on and consistent with the base rate component of the Second Partial Settlement with the Public Staff and excludes the items to be litigated noted above. Duke Energy Carolinas will not begin the amortization or implementation of these items until a final order is issued in the rate case and new base rates are implemented. These items will also be excluded when determining whether a refund of amounts collected through these temporary rates is needed. In addition, Duke Energy Carolinas also seeks authorization to place a temporary decrement EDIT Rider into effect, concurrent with the temporary base rate change. The temporary rate changes are not final rates and remain subject to the NCUC's determination of the just and reasonable rates to be charged by ~~Executive Order No. 116)~~Duke Energy Carolinas on a permanent basis. The NCUC approved the August 4, 2020 amended temporary rates motion on August 6, 2020, and ~~allow for customers~~temporary rates went into effect on August 24, 2020.

The Duke Energy Carolinas evidentiary hearing concluded on September 18, 2020, and post-hearing filings were filed with the NCUC from all parties by November 4, 2020. Duke Energy Carolinas expects the NCUC to ~~enter into payment arrangements to pay off arrearages accumulated during the state of emergency after~~issue an order on its net rate increase before the end of the ~~state~~first quarter of emergency. Additionally, 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 July 10, 2020, Piedmont filed a petition with the NCUC for clarification regarding when they may begin working with customers on establishing payment arrangements for arrears accumulated since March 13, 2020. On July 29, 2020, the NCUC issued its Order Lifting Disconnection Moratorium and Allowing Collection of Arrearages Pursuant to Special Repayment Plans. The order contained the following: 1) public utilities may resume customer disconnections due to nonpayment for bills first rendered on or after September 1, 2020, after appropriate notice; 2) the late fee moratorium will continue through the end of the state of emergency or until further order of the commission; 3)2021. Duke Energy utilities may reinstate fees for checks returned for insufficient funds as well as transaction fees for use of credit cards or debit cards for bills first rendered on or after September 1, 2020; and 4) no sooner than September 1, 2020, the collection of past due or delinquent accounts accrued up to and including August 31, 2020, may proceed subject to conditions. PiedmontCarolinas cannot predict the outcome of this matter.

2018 South Carolina Rate Case

On November 8, 2018, Duke Energy Carolinas filed an application with the PSCSC for a rate increase for retail customers of approximately $168 million.



FINANCIAL STATEMENTS	REGULATORY MATTERS

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

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 $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 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 PSCSC on certain issues presented in the proceeding. On June 19, 2019, the PSCSC issued a Directive denying Duke Energy 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 a return on 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 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 Notice of Cross Appeal with the Supreme Court of South Carolina. On February 12, 2020, Duke Energy Carolinas and 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, which was granted by the Supreme Court of South Carolina on April 30, 2020. Initial briefs were filed on April 21, 2020, which included the South Carolina Energy User's Committee brief arguing that the PSCSC erred in allowing Duke Energy Carolinas' recovery of costs related to the Lee Nuclear Station. Response briefs were filed on July 6, 2020, and reply briefs were filed on August 11, 2020. Oral arguments have not yet been scheduled by the Supreme Court of South Carolina. Based on legal analysis and the filing of the appeal, Duke Energy Carolinas has not recorded an adjustment for its deferred coal ash costs. Duke Energy Carolinas cannot predict the outcome of this matter.

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 was subsequently adjusted to $420 million. 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% and a capital structure of 52% equity and 48% debt. On February 23, 2018, the NCUC issued an order approving the stipulation. The Public Staff, the North Carolina Attorney General and the Sierra Club filed notices of appeal to the North Carolina Supreme Court.

2019 North Carolina Rate Case



FINANCIAL STATEMENTS	REGULATORY MATTERS

Removal of deferred storm costs from the rate case;

Filing a petition seeking to securitize the deferred storm costs within 120 days of a commission order in this rate case regarding the reasonableness and prudency of the storm costs;

Agreement of certain assumptions to demonstrate the quantifiable benefits to customers of a securitization financing;

Agreement that the Asheville CC project is complete and in service and agreement on the amount to be included in rate base; and

Agreement on certain accounting matters, including recovery of employee incentives, severance, aviation costs and executive compensation.

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. On June 17, 2020, the NCUC issued an order adopting procedures for the expert witness hearings to take place in three phases: (1) a hearing on issues common to both rate cases conducted remotely; (2) a hearing on Duke Energy Carolinas specific rate case issues, followed immediately by; (3) a hearing on Duke Energy Progress specific rate case issues. On July 27, 2020, Duke Energy Progress filed a joint motion with Duke Energy Carolinas and the Public Staff notifying the commission that the parties reached a joint partial settlement with the Public Staff.

A return on equity of 9.6% and a capital structure of 52% equity and 48% debt;

Agreement on amortization over a five-year period for unprotected federal EDIT flowbacks to customers;

Settlement to allow the deferral of costs for certain grid projects placed in service between June 1, 2020, and December 31, 2022, of $0.5 billion.

The remaining items litigated at hearing included recovery of deferred coal ash compliance costs that are subject to asset retirement obligation accounting and implementation of new depreciation rates.

The Duke Energy Progress evidentiary hearing concluded on October 6, 2020, and post-hearing filings are due to be filed with the NCUC from all parties by December 4, 2020. Duke Energy Progress expects the NCUC to issue an order on its net rate increase by the end of the first quarter of 2021. 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. Total estimated incremental operation and maintenance expenses incurred to repair and restore the system are approximately $168 million with an additional $4 million in capital investments made for restoration efforts. Approximately $145 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 September 30, 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. Terms of the June 2, 2020, Agreement and Stipulation of Partial Settlement removed incremental storm costs from the general rate case. A petition seeking to securitize these costs, along with costs from Hurricane Florence, Hurricane Michael and Winter Storm Diego, was filed on October 26, 2020, with the NCUC. The NCUC has until March 10, 2021, to issue financing orders. Duke Energy Progress cannot predict the outcome of this matter.



FINANCIAL STATEMENTS	REGULATORY MATTERS

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.

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 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 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 PSCSC on certain issues presented in the proceeding. On June 19, 2019, the PSCSC issued a Directive denying Duke Energy 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 a return on deferred operation and maintenance expenses, but allowing additional litigation-related costs. As a result of 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 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, which was granted by the Supreme Court of South Carolina on April 30, 2020. Initial briefs were filed on April 21, 2020. Response briefs were filed on July 6, 2020, and reply briefs were filed on August 11, 2020. Oral arguments have not yet been scheduled by the Supreme Court of South Carolina. Based on legal analysis and the filing of the appeal, Duke Energy Progress has not recorded an adjustment for its deferred coal ash costs. Duke Energy Progress cannot predict the outcome of this matter.

Western Carolinas Modernization Plan

On December 27, 2019, Asheville Combined Cycle Unit 5 Combustion Turbine and Unit 6 Steam Turbine Generator and the common systems that serve combined cycle units went into commercial operation. Duke Energy Progress placed the Unit 7 Combustion Turbine into commercial operation in simple-cycle mode on January 15, 2020. The Unit 8 Steam Turbine Generator went into commercial operation on April 5, 2020. On June 2, 2020, Duke Energy Progress filed a request with the PSCSC for an accounting order for the deferral of post-in-service costs incurred in connection with the addition of the Asheville combined-cycle generating plant. The petition requested the PSCSC issue an accounting order authorizing Duke Energy Progress to defer post-in-service costs including the Asheville combined-cycle’s depreciation expense, property taxes, incremental O&M and carrying costs at WACC of approximately $8 million annually. On June 17, 2020, the PSCSC voted to approve the petition and issued its final order on July 6, 2020.

FERC Return on Equity Complaints

On October 11, 2019, North Carolina Eastern Municipal Power Agency (NCEMPA) filed a complaint at the FERC against Duke Energy Progress pursuant to Section 206 of the Federal Power Act (FPA). Duke Energy Progress provides NCEMPA with service under the Full Requirements Power Purchase Agreement (FRPPA). The complaint alleges that the 11% stated return on equity (ROE) component contained in the FRPPA’s demand formula rate is unjust and unreasonable. On July 16, 2020, the FERC set this matter for hearing and settlement judge procedures and established a refund effective date of October 11, 2019. In its order setting the matter for settlement, the FERC allowed for variation to the base transmission-related ROE methodology developed in Order No. 569-A, through the introduction of “specific facts and circumstances” involving the parties to this case. The parties to this case are currently in FERC settlement procedures. It is Duke Energy Progress’ view that, in consideration of the specific facts and circumstances of risks under the provisions of the FRPPA, the stated 11% ROE applied to NCEMPA’s metered billing demand is just and reasonable. Duke Energy Progress cannot predict the outcome of this matter.



FINANCIAL STATEMENTS	REGULATORY MATTERS

Duke Energy Florida

COVID-19 Filings

In March 2020, Governor Ron DeSantis directed the State Health Officer of Florida to declare a public health emergency in Florida related to the COVID-19 pandemic. The governor also issued an Executive Order 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. 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 ceased 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. Duke Energy Florida resumed normal billing practices as of August 24, 2020, with the exception of the billing of late payment charges. Customers were notified of the resumption of normal billing practices, the option of deferred payment arrangements and where to find assistance, if necessary. Service disconnections for nonpayment for residential customers resumed on October 5, 2020.

Storm Restoration Cost Recovery

Duke Energy Florida filed a petition with the FPSC on April 30, 2019, to recover $223 million of estimated retail incremental storm restoration costs for Hurricane Michael, consistent with the provisions in the 2017 Settlement, and the FPSC approved the petition on June 11, 2019. The FPSC also approved allowing Duke Energy Florida to use the tax savings resulting from the Tax Act to recover these storm costs in lieu of implementing a storm surcharge. 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. On May 19, 2020, Duke Energy Florida filed a supplemental true up reducing the actual retail recoverable storm restoration costs related to Hurricane Michael by approximately $3 million, resulting in a total request to recover $188 million actual retail recoverable storm restoration costs, plus interest. An Order Establishing Procedure was issued on January 30, 2020, and hearings are scheduled to begin December 8, 2020. Approximately $119 million and $204 million of these costs are included in Regulatory assets within Current Assets and Other Noncurrent Assets on the Condensed Consolidated Balance Sheets as of September 30, 2020, and December 31, 2019, respectively. Duke Energy Florida cannot predict the outcome of this matter.

Duke Energy Florida filed a petition with the FPSC on December 19, 2019, to recover $169 million of estimated retail incremental storm restoration costs for Hurricane Dorian, consistent with the provisions in the 2017 Settlement and the FPSC approved the petition on February 24, 2020. Approved storm costs are being recovered over a 12-month period with rates effective in March 2020 and subject to true up. The final actual amount of $145 million was filed on September 30, 2020, and the FPSC will hold a hearing to determine the final amount of incremental costs. Approximately $38 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 September 30, 2020, and December 31, 2019, respectively, representing recoverable costs under the FPSC’s storm rule and Duke Energy Florida's OATT formula rates. Duke Energy Florida cannot predict the outcome of this matter.

Clean Energy Connection

On July 1, 2020, Duke Energy Florida petitioned the FPSC for approval of a voluntary solar program. The program consists of 10 new solar generating facilities with combined capacity of approximately 750 MW. The program allows participants to support cost-effective solar development in Florida by paying a subscription fee based on per kilowatt-subscriptions and receiving a credit on their bill based on the actual generation associated with their portion of the solar portfolio. The estimated cost of the 10 new solar generation facilities is approximately $1 billion over the next four years, and this investment will be included in base rates offset by the revenue from the subscription fees. The credits will be included for recovery in the fuel cost recovery clause. A hearing on the petition is scheduled to begin on November 17, 2020. Duke Energy Florida cannot predict the outcome of this matter.

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 Crystal River Unit 3 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 (ADP), a joint venture between NorthStar Group Services, Inc. and Orano USA LLC. The agreement will allow for completion of the decommissioning of Crystal River Unit 3 by 2027, rather than 2074 as originally planned. Duke Energy Florida will also sell and assign the spent nuclear fuel, storage canisters, high-level waste and existing dry spent fuel storage installation and certain related assets, together with certain associated liabilities and obligations to ADP SF1, LLC. Duke Energy Florida expects that the assets of the Nuclear Decommissioning Trust Fund as of September 30, 2020, will be sufficient to cover the contract price. The U.S. Nuclear Regulatory Commission approved the transaction on April 1, 2020, and the FPSC issued an order approving the transaction on August 27, 2020. The agreement closed on October 1, 2020.



FINANCIAL STATEMENTS	REGULATORY MATTERS

Storm Protection Plan

On April 10, 2020, Duke Energy Florida filed its initial Storm Protection Plan (SPP) with the FPSC. The SPP outlines storm protection programs over a 10-year planning period intended to enhance the existing infrastructure for the purpose of reducing restoration costs and reducing outage times associated with extreme weather conditions therefore improving overall service reliability. On July 31, 2020, Duke Energy Florida entered into a settlement with certain intervenors in support of this filing. On August 28, 2020, the FPSC unanimously approved the settlement agreement, which effectively approves the 2020-2029 SPP as-filed, without modification.

Duke Energy Ohio

Duke Energy Ohio COVID-19 Filings

In response to the COVID-19 pandemic, on March 9, 2020, Governor Mike DeWine declared 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 ceased all disconnections except for safety-related concerns and waived 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 May 4, 2020, Duke Energy Ohio filed a motion to suspend payment rules to enable proactive outreach to residential customers offering additional options for managing their utility bills. PUCO found the proposal to address the state of emergency and the accompanying waivers reasonable and directed Duke Energy Ohio to work with the PUCO Staff on a comprehensive plan for resumption of activities and operations, to be filed 45 days before resumption of activities. The transition plan to resume normal operations to pre-COVID-19 levels was filed on June 26, 2020, and approved by the PUCO on July 29, 2020. It included resuming suspended work and activities beginning August 10, 2020, and resuming disconnections in September 2020.

On April 16, 2020, Duke Energy Ohio filed an application for a Reasonable Arrangement to temporarily lower the minimum bill for demand-metered commercial and industrial customers. On June 17, 2020, the PUCO denied Duke Energy Ohio's application for a reasonable arrangement and ordered Duke Energy Ohio to work with the PUCO Staff on payment arrangements for impacted nonresidential customers.

Duke Energy Kentucky COVID-19

In response to the COVID-19 pandemic, on March 6, 2020, Governor Andy Beshear declared 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 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. In response, Duke Energy Kentucky ceased all disconnections except for safety-related concerns and waived late payment and reconnection fees. On September 21, 2020, the KPSC issued an order ending the disconnection moratorium for residential and nonresidential customers effective no earlier than October 20, 2020. Utilities are required to offer residential customers a default payment plan for any arrearages accumulated through the October 2020 billing cycle. Utilities are permitted to resume assessment of late payment charges for nonresidential customers beginning October 20, 2020, and for residential customers after December 31, 2020. Duke Energy Kentucky will follow the order, as clarified on September 30, 2020, by the KPSC.

2017 Electric Security Plan Filing



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%. On April 13, 2018, Duke Energy Ohio, along with certain intervenors, filed the Stipulation with the PUCO including 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 Duke Energy Ohio'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 Power Future Initiatives Rider (formerly 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. On September 13, 2019, and September 16, 2019, Interstate Gas Supply/Retail Supply Association and the OCC, respectively, filed appeals to the Supreme Court of Ohio claiming the PUCO’s order was in error. On March 13, 2020, the Supreme Court of Ohio dismissed OCC's appeal. On April 22, 2020, the Supreme Court of Ohio dismissed all remaining appeals of the PUCO's December 19, 2018 order approving the Stipulation. The case has been resolved.

Ohio Valley Electric Corporation

On July 23, 2019, House Bill 6 (HB 6) was signed into law that became effective January 1, 2020. Among other things, the bill allows for funding of two nuclear generating facilities located in Northern Ohio through a charge on utility bills owned by Energy Harbor (f/k/a FirstEnergy Solutions), repeal of energy efficiency mandates, and 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 12 for additional discussion of Duke Energy Ohio's ownership interest in OVEC. In July 2020, legislation to repeal HB 6 was proposed in both the Ohio House and Senate, with subsequent hearings to receive witness testimony. Duke Energy Ohio cannot predict the outcome of this matter.

Energy Efficiency Cost Recovery

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.

South Carolina

2020 North Carolina Storm Securitization Filings

On October 26, 2020, Duke Energy Carolinas and Duke Energy Progress filed a joint petition with the NCUC, as agreed to in partial settlements reached in the 2019 North Carolina Rate Cases for Duke Energy Carolinas and Duke Energy Progress, seeking authorization for the financing of each utilities’ storm recovery activities required as a result of Hurricane Florence, Hurricane Michael, Hurricane Dorian and Winter Storm Diego. Specifically, Duke Energy Carolinas and Duke Energy Progress requested that the NCUC find that their storm recovery costs and related financing costs are appropriately financed by debt secured by storm recovery property, and that the commission issue financing orders by which each utility may accomplish such financing using a securitization structure. The total revenue requirement over the proposed 15-year bond period for the storm recovery charges is approximately $262 million for Duke Energy Carolinas and $842 million for Duke Energy Progress. The NCUC has until March 10, 2021, to issue financing orders. Duke Energy Carolinas and Duke Energy Progress cannot predict the outcome of this matter.

Duke Energy Carolinas

2017 North Carolina Rate Case



FINANCIAL STATEMENTS	REGULATORY MATTERS

2019 North Carolina Rate Case

Removal of deferred storm costs from the rate case;

Filing a petition seeking to securitize the deferred storm costs within 120 days of a commission order in this rate case regarding the reasonableness and prudency of the storm costs;

Agreement of certain assumptions to demonstrate the quantifiable benefits to customers of a securitization financing; and

Agreement on certain accounting matters, including recovery of employee incentives, severance, aviation costs and executive compensation.

On May 6, 2020, Duke Energy Carolinas, Duke Energy Progress 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. On June 17, 2020, the NCUC issued an order adopting procedures for the expert witness hearings to take place in three phases: (1) a hearing on issues common to both rate cases conducted remotely; (2) a hearing on Duke Energy Carolinas specific rate case issues, followed immediately by; (3) a hearing on Duke Energy Progress specific rate case issues. On July 24, 2020, Duke Energy Carolinas filed its request for approval of its notice to customers required to implement temporary rates. On July 27, 2020, Duke Energy Carolinas filed a joint motion with Duke Energy Progress and the Public Staff notifying the commission that the parties reached a joint partial settlement with the Public Staff. Also on July 27, 2020, Duke Energy Carolinas filed a letter stating that it intended to update its temporary rates calculation to reflect the terms of the partial settlement.

A return on equity of 9.6% and a capital structure of 52% equity and 48% debt;

Agreement on amortization over a five-year period for unprotected federal EDIT flowbacks to customers;

Settlement to allow the deferral of costs for certain grid projects placed in service between June 1, 2020, and December 31, 2022, totaling $0.8 billion.

The Duke Energy Carolinas evidentiary hearing concluded on September 18, 2020, and post-hearing filings were filed with the NCUC from all parties by November 4, 2020. Duke Energy Carolinas expects the NCUC to issue an order on its net rate increase before the end of the first quarter of 2021. Duke Energy Carolinas cannot predict the outcome of this matter.

2018 South Carolina Rate Case

On November 8, 2018, Duke Energy Carolinas filed an application with the PSCSC for a rate increase for retail customers of approximately $168 million.



FINANCIAL STATEMENTS	REGULATORY MATTERS

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

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 $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 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 PSCSC on certain issues presented in the proceeding. On June 19, 2019, the PSCSC issued a Directive denying Duke Energy 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 a return on 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 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 Notice of Cross Appeal with the Supreme Court of South Carolina. On February 12, 2020, Duke Energy Carolinas and 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, which was granted by the Supreme Court of South Carolina on April 30, 2020. Initial briefs were filed on April 21, 2020, which included the South Carolina Energy User's Committee brief arguing that the PSCSC erred in allowing Duke Energy Carolinas' recovery of costs related to the Lee Nuclear Station. Response briefs were filed on July 6, 2020, and reply briefs were filed on August 11, 2020. Oral arguments have not yet been scheduled by the Supreme Court of South Carolina. Based on legal analysis and the filing of the appeal, Duke Energy Carolinas has not recorded an adjustment for its deferred coal ash costs. Duke Energy Carolinas cannot predict the outcome of this matter.

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 was subsequently adjusted to $420 million. 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% and a capital structure of 52% equity and 48% debt. On February 23, 2018, the NCUC issued an order approving the stipulation. The Public Staff, the North Carolina Attorney General and the Sierra Club filed notices of appeal to the North Carolina Supreme Court.

2019 North Carolina Rate Case



FINANCIAL STATEMENTS	REGULATORY MATTERS