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 September 30, 2020March 31, 2021
OR
| ☐ | 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 Carolina28202-1803
704-382-3853
| 1-4928 | DUKE ENERGY CAROLINAS, LLC | 56-0205520 | |||||||||
(a North Carolina limited liability company)
526 South Church Street
Charlotte,, North Carolina28202-1803
704-382-3853
| 1-15929 | PROGRESS ENERGY, INC. | 56-2155481 | |||||||||
(a North Carolina corporation)
410 South Wilmington Street
Raleigh,, North Carolina27601-1748
704-382-3853
| 1-3382 | DUKE ENERGY PROGRESS, LLC | 56-0165465 | |||||||||
(a North Carolina limited liability company)
410 South Wilmington Street
Raleigh,, North Carolina27601-1748
704-382-3853
| 1-3274 | DUKE ENERGY FLORIDA, LLC | 59-0247770 | |||||||||
(a Florida limited liability company)
299 First Avenue North
St. Petersburg,, Florida33701
704-382-3853
| 1-1232 | DUKE ENERGY OHIO, INC. | 31-0240030 | |||||||||
(an Ohio corporation)
139 East Fourth Street
Cincinnati,, Ohio45202
704-382-3853
| 1-3543 | DUKE ENERGY INDIANA, LLC | 35-0594457 | |||||||||
(an Indiana limited liability company)
1000 East Main Street
Plainfield,, Indiana46168
704-382-3853
| 1-6196 | PIEDMONT NATURAL GAS COMPANY, INC. | 56-0556998 | |||||||||
(a North Carolina corporation)
4720 Piedmont Row Drive
Charlotte,, North Carolina28210
704-364-3120
SECURITIES REGISTERED PURSUANT TO SECTION 12(b) OF THE ACT:
Name of each exchange on
RegistrantTitle of each class Trading symbols which registered Duke Energy Common Stock, $0.001 par value DUKNew 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 | ☐ | Non-accelerated | ☐ | Smaller reporting company | ☐ | Emerging growth company | ☐ | ||||||||||||||||||||||
| Duke Energy Carolinas | Large | ☐ | Accelerated filer | ☐ | Non-accelerated | ☒ | Smaller reporting company | ☐ | Emerging growth company | ☐ | ||||||||||||||||||||||
| Progress Energy | Large | ☐ | Accelerated filer | ☐ | Non-accelerated | ☒ | Smaller reporting company | ☐ | Emerging growth company | ☐ | ||||||||||||||||||||||
| Duke Energy Progress | Large | ☐ | Accelerated filer | ☐ | Non-accelerated | ☒ | Smaller reporting company | ☐ | Emerging growth company | ☐ | ||||||||||||||||||||||
| Duke Energy Florida | Large | ☐ | Accelerated filer | ☐ | Non-accelerated | ☒ | Smaller reporting company | ☐ | Emerging growth company | ☐ | ||||||||||||||||||||||
| Duke Energy Ohio | Large | ☐ | Accelerated filer | ☐ | Non-accelerated | ☒ | Smaller reporting company | ☐ | Emerging growth company | ☐ | ||||||||||||||||||||||
| Duke Energy Indiana | Large | ☐ | Accelerated filer | ☐ | Non-accelerated | ☒ | Smaller reporting company | ☐ | Emerging growth company | ☐ | ||||||||||||||||||||||
| Piedmont | Large | ☐ | Accelerated filer | ☐ | Non-accelerated | ☒ | 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 October 31, 2020:
April 30, 2021:
| Registrant | Description | Shares | ||||||
| Duke Energy | Common stock, $0.001 par value | 769,218,956 | ||||||
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
| PART I. FINANCIAL INFORMATION | ||||||||||
| Piedmont Natural Gas Company, Inc. Financial Statements | ||||||||||
| Note 1 – Organization and Basis of Presentation | ||||||||||
| Note 2 | ||||||||||
| Note 3 – Regulatory Matters | ||||||||||
| Note 4 – Commitments and Contingencies | ||||||||||
| Note 5 – Debt and Credit Facilities | ||||||||||
| Note 6 – | ||||||||||
| Note 7 | ||||||||||
| Note | ||||||||||
| Note | ||||||||||
| Note | ||||||||||
| Note | ||||||||||
| Note 12 – Revenue | ||||||||||
| Note 13 – | ||||||||||
| Note 14 | ||||||||||
| Note 15 – Income Taxes | ||||||||||
| Note 16 – | ||||||||||
| PART II. OTHER INFORMATION | ||||||||||
| 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;
◦Changing customer expectations and demands including heightened emphasis on environmental, social and governance concerns;
◦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;
◦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 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 Office of Public Counsel and other customer representatives | ||||
| 2017 Settlement | Second Revised and Restated Settlement Agreement in 2017 among Duke Energy Florida, the Florida 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 | ||||
| Asset retirement obligations | |||||
| Bison | Bison Insurance Company Limited | ||||
| Coal Combustion Residuals | |||||
| Coal Ash Act | North Carolina Coal Ash Management Act of 2014 | ||||
| the company | Duke Energy Corporation and its subsidiaries | ||||
| 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 | ||||
| Excess deferred income tax | |||||
| U.S. Environmental Protection Agency | |||||
| EPS | Earnings Per Share | ||||
| ETR | Effective tax rate | ||||
| Exchange Act | Securities Exchange Act of 1934 | ||||
| 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 | Net Income Available to Duke Energy Corporation Common Stockholders | ||||
| GAAP Reported EPS | Basic Earnings Per Share Available to Duke Energy Corporation common stockholders | ||||
| GIC | GIC Private Limited | ||||
| 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 | ||||
| North Carolina Utilities Commission | |||||
| NDTF | Nuclear decommissioning trust funds | ||||
| NPNS | Normal purchase/normal sale | ||||
| OPEB | Other Post-Retirement Benefit Obligations | ||||
| Ohio Valley Electric Corporation | |||||
| Piedmont | Piedmont Natural Gas Company, Inc. | ||||
| Pennsylvania-New Jersey-Maryland Interconnection | |||||
| PPA | Purchase Power Agreement | ||||
| Progress Energy | Progress Energy, Inc. | ||||
| PSCSC | Public Service Commission of South Carolina | ||||
| PUCO | Public Utilities Commission of Ohio | ||||
| RTO | Regional Transmission Organization | ||||
| Subsidiary Registrants | Duke Energy Carolinas, Progress Energy, Duke Energy Progress, Duke Energy Florida, Duke Energy Ohio, Duke Energy Indiana and Piedmont | ||||
| 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 | |||||||||||||||||||||||
| March 31, | |||||||||||||||||||||||
| (in millions, except per share amounts) | 2021 | 2020 | |||||||||||||||||||||
| Operating Revenues | |||||||||||||||||||||||
| Regulated electric | $ | 5,219 | $ | 5,124 | |||||||||||||||||||
| Regulated natural gas | 749 | 638 | |||||||||||||||||||||
| Nonregulated electric and other | 182 | 187 | |||||||||||||||||||||
| Total operating revenues | 6,150 | 5,949 | |||||||||||||||||||||
| Operating Expenses | |||||||||||||||||||||||
| Fuel used in electric generation and purchased power | 1,443 | 1,447 | |||||||||||||||||||||
| Cost of natural gas | 276 | 199 | |||||||||||||||||||||
| Operation, maintenance and other | 1,402 | 1,339 | |||||||||||||||||||||
| Depreciation and amortization | 1,226 | 1,130 | |||||||||||||||||||||
| Property and other taxes | 353 | 345 | |||||||||||||||||||||
| Impairment of assets and other charges | — | 2 | |||||||||||||||||||||
| Total operating expenses | 4,700 | 4,462 | |||||||||||||||||||||
| Gains on Sales of Other Assets and Other, net | — | 1 | |||||||||||||||||||||
| Operating Income | 1,450 | 1,488 | |||||||||||||||||||||
| Other Income and Expenses | |||||||||||||||||||||||
| Equity in (losses) earnings of unconsolidated affiliates | (17) | 44 | |||||||||||||||||||||
| Other income and expenses, net | 127 | 46 | |||||||||||||||||||||
| Total other income and expenses | 110 | 90 | |||||||||||||||||||||
| Interest Expense | 535 | 551 | |||||||||||||||||||||
| Income Before Income Taxes | 1,025 | 1,027 | |||||||||||||||||||||
| Income Tax Expense | 84 | 137 | |||||||||||||||||||||
| Net Income | 941 | 890 | |||||||||||||||||||||
| Add: Net Loss Attributable to Noncontrolling Interests | 51 | 48 | |||||||||||||||||||||
| Net Income Attributable to Duke Energy Corporation | 992 | 938 | |||||||||||||||||||||
| Less: Preferred Dividends | 39 | 39 | |||||||||||||||||||||
| Net Income Available to Duke Energy Corporation Common Stockholders | $ | 953 | $ | 899 | |||||||||||||||||||
| Earnings Per Share – Basic and Diluted | |||||||||||||||||||||||
| Net income available to Duke Energy Corporation common stockholders | |||||||||||||||||||||||
| Basic and Diluted | $ | 1.25 | $ | 1.24 | |||||||||||||||||||
| Weighted Average Shares Outstanding | |||||||||||||||||||||||
| Basic | 769 | 734 | |||||||||||||||||||||
| Diluted | 769 | 736 | |||||||||||||||||||||
| Three Months Ended | Nine Months Ended | ||||||||||||||
| September 30, | September 30, | ||||||||||||||
| (in millions, except per share amounts) | 2020 | 2019 | 2020 | 2019 | |||||||||||
| Operating Revenues | |||||||||||||||
| Regulated electric | $ | 6,315 | $ | 6,515 | $ | 16,402 | $ | 17,223 | |||||||
| Regulated natural gas | 214 | 223 | 1,115 | 1,231 | |||||||||||
| Nonregulated electric and other | 192 | 202 | 574 | 522 | |||||||||||
| Total operating revenues | 6,721 | 6,940 | 18,091 | 18,976 | |||||||||||
| Operating Expenses | |||||||||||||||
| Fuel used in electric generation and purchased power | 1,849 | 1,978 | 4,645 | 5,228 | |||||||||||
| Cost of natural gas | 41 | 48 | 299 | 451 | |||||||||||
| Operation, maintenance and other | 1,450 | 1,484 | 4,142 | 4,337 | |||||||||||
| Depreciation and amortization | 1,217 | 1,186 | 3,497 | 3,364 | |||||||||||
| Property and other taxes | 324 | 335 | 1,003 | 1,012 | |||||||||||
| Impairment charges | 28 | (20 | ) | 36 | (16 | ) | |||||||||
| Total operating expenses | 4,909 | 5,011 | 13,622 | 14,376 | |||||||||||
| Gains on Sales of Other Assets and Other, net | 2 | — | 10 | — | |||||||||||
| Operating Income | 1,814 | 1,929 | 4,479 | 4,600 | |||||||||||
| Other Income and Expenses | |||||||||||||||
| Equity in (losses) earnings of unconsolidated affiliates | (80 | ) | 50 | (2,004 | ) | 137 | |||||||||
| Other income and expenses, net | 127 | 104 | 310 | 308 | |||||||||||
| Total other income and expenses | 47 | 154 | (1,694 | ) | 445 | ||||||||||
| Interest Expense | 522 | 572 | 1,627 | 1,657 | |||||||||||
| 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 | 70 | 19 | 208 | 110 | |||||||||||
| Net Income Attributable to Duke Energy Corporation | 1,304 | 1,342 | 1,440 | 3,074 | |||||||||||
| Less: Preferred Dividends | 39 | 15 | 93 | 27 | |||||||||||
| Net Income Available to Duke Energy Corporation Common Stockholders | $ | 1,265 | $ | 1,327 | $ | 1,347 | $ | 3,047 | |||||||
| Earnings Per Share – Basic and Diluted | |||||||||||||||
| Basic and Diluted | $ | 1.74 | $ | 1.82 | $ | 1.85 | $ | 4.18 | |||||||
| Weighted Average Shares Outstanding | |||||||||||||||
| Basic and Diluted | 735 | 729 | 735 | 728 | |||||||||||
See Notes to Condensed Consolidated Financial Statements
9
| FINANCIAL STATEMENTS | |||||
DUKE ENERGY CORPORATION
Condensed Consolidated Statements of Comprehensive Income
(Unaudited)
| Three Months Ended | |||||||||||||||||||||||
| March 31, | |||||||||||||||||||||||
| (in millions) | 2021 | 2020 | |||||||||||||||||||||
| Net Income | $ | 941 | $ | 890 | |||||||||||||||||||
Other Comprehensive Income (Loss), net of tax(a) | |||||||||||||||||||||||
| Pension and OPEB adjustments | 2 | 1 | |||||||||||||||||||||
| Net unrealized gains (losses) on cash flow hedges | 29 | (81) | |||||||||||||||||||||
| Reclassification into earnings from cash flow hedges | 3 | 2 | |||||||||||||||||||||
| Unrealized (losses) gains on available-for-sale securities | (8) | 1 | |||||||||||||||||||||
| Other Comprehensive Income (Loss), net of tax | 26 | (77) | |||||||||||||||||||||
| Comprehensive Income | 967 | 813 | |||||||||||||||||||||
| Add: Comprehensive Loss Attributable to Noncontrolling Interests | 44 | 62 | |||||||||||||||||||||
| Comprehensive Income Attributable to Duke Energy | 1,011 | 875 | |||||||||||||||||||||
| Less: Preferred Dividends | 39 | 39 | |||||||||||||||||||||
| Comprehensive Income Available to Duke Energy Corporation Common Stockholders | $ | 972 | $ | 836 | |||||||||||||||||||
| 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 | |||||||
See Notes to Condensed Consolidated Financial Statements
10
| FINANCIAL STATEMENTS | |||||
DUKE ENERGY CORPORATION
Condensed Consolidated Balance Sheets
(Unaudited)
| (in millions) | March 31, 2021 | December 31, 2020 | |||||||||
| ASSETS | |||||||||||
| Current Assets | |||||||||||
| Cash and cash equivalents | $ | 379 | $ | 259 | |||||||
| Receivables (net of allowance for doubtful accounts of $31 at 2021 and $29 at 2020) | 950 | 1,009 | |||||||||
| Receivables of VIEs (net of allowance for doubtful accounts of $116 at 2021 and $117 at 2020) | 1,834 | 2,144 | |||||||||
| Inventory | 3,076 | 3,167 | |||||||||
| Regulatory assets (includes $54 at 2021 and $53 at 2020 related to VIEs) | 1,650 | 1,641 | |||||||||
| Other (includes $333 at 2021 and $296 at 2020 related to VIEs) | 619 | 462 | |||||||||
| Total current assets | 8,508 | 8,682 | |||||||||
| Property, Plant and Equipment | |||||||||||
| Cost | 157,372 | 155,580 | |||||||||
| Accumulated depreciation and amortization | (49,772) | (48,827) | |||||||||
| Generation facilities to be retired, net | 29 | 29 | |||||||||
| Net property, plant and equipment | 107,629 | 106,782 | |||||||||
| Other Noncurrent Assets | |||||||||||
| Goodwill | 19,303 | 19,303 | |||||||||
| Regulatory assets (includes $927 at 2021 and $937 at 2020 related to VIEs) | 12,441 | 12,421 | |||||||||
| Nuclear decommissioning trust funds | 9,410 | 9,114 | |||||||||
| Operating lease right-of-use assets, net | 1,540 | 1,524 | |||||||||
| Investments in equity method unconsolidated affiliates | 919 | 961 | |||||||||
| Other (includes $82 at 2021 and $81 at 2020 related to VIEs) | 3,715 | 3,601 | |||||||||
| Total other noncurrent assets | 47,328 | 46,924 | |||||||||
| Total Assets | $ | 163,465 | $ | 162,388 | |||||||
| LIABILITIES AND EQUITY | |||||||||||
| Current Liabilities | |||||||||||
| Accounts payable | $ | 2,497 | $ | 3,144 | |||||||
| Notes payable and commercial paper | 4,064 | 2,873 | |||||||||
| Taxes accrued | 574 | 482 | |||||||||
| Interest accrued | 536 | 537 | |||||||||
| Current maturities of long-term debt (includes $472 at 2021 and 2020 related to VIEs) | 5,586 | 4,238 | |||||||||
| Asset retirement obligations | 709 | 718 | |||||||||
| Regulatory liabilities | 1,509 | 1,377 | |||||||||
| Other | 1,858 | 2,936 | |||||||||
| Total current liabilities | 17,333 | 16,305 | |||||||||
| Long-Term Debt (includes $3,686 at 2021 and $3,535 at 2020 related to VIEs) | 54,768 | 55,625 | |||||||||
| Other Noncurrent Liabilities | |||||||||||
| Deferred income taxes | 9,459 | 9,244 | |||||||||
| Asset retirement obligations | 12,299 | 12,286 | |||||||||
| Regulatory liabilities | 15,070 | 15,029 | |||||||||
| Operating lease liabilities | 1,352 | 1,340 | |||||||||
| Accrued pension and other post-retirement benefit costs | 1,010 | 969 | |||||||||
| Investment tax credits | 747 | 687 | |||||||||
| Other (includes $331 at 2021 and $316 at 2020 related to VIEs) | 1,769 | 1,719 | |||||||||
| Total other noncurrent liabilities | 41,706 | 41,274 | |||||||||
| Commitments and Contingencies | 0 | 0 | |||||||||
| Equity | |||||||||||
| Preferred stock, Series A, $0.001 par value, 40 million depositary shares authorized and outstanding at 2021 and 2020 | 973 | 973 | |||||||||
| Preferred stock, Series B, $0.001 par value, 1 million shares authorized and outstanding at 2021 and 2020 | 989 | 989 | |||||||||
| Common stock, $0.001 par value, 2 billion shares authorized; 769 million shares outstanding at 2021 and 2020 | 1 | 1 | |||||||||
| Additional paid-in capital | 43,761 | 43,767 | |||||||||
| Retained earnings | 2,680 | 2,471 | |||||||||
| Accumulated other comprehensive loss | (218) | (237) | |||||||||
| Total Duke Energy Corporation stockholders' equity | 48,186 | 47,964 | |||||||||
| Noncontrolling interests | 1,472 | 1,220 | |||||||||
| Total equity | 49,658 | 49,184 | |||||||||
| Total Liabilities and Equity | $ | 163,465 | $ | 162,388 | |||||||
| (in millions) | September 30, 2020 | December 31, 2019 | |||||
| ASSETS | |||||||
| Current Assets | |||||||
| Cash and cash equivalents | $ | 308 | $ | 311 | |||
| 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 | 3,190 | 3,232 | |||||
| Regulatory assets (includes $53 at 2020 and $52 at 2019 related to VIEs) | 1,637 | 1,796 | |||||
| Other (includes $335 at 2020 and $242 at 2019 related to VIEs) | 505 | 764 | |||||
| Total current assets | 8,679 | 9,163 | |||||
| Property, Plant and Equipment | |||||||
| Cost | 153,916 | 147,654 | |||||
| Accumulated depreciation and amortization | (48,185 | ) | (45,773 | ) | |||
| Generation facilities to be retired, net | 29 | 246 | |||||
| Net property, plant and equipment | 105,760 | 102,127 | |||||
| Other Noncurrent Assets | |||||||
| Goodwill | 19,303 | 19,303 | |||||
| Regulatory assets (includes $951 at 2020 and $989 at 2019 related to VIEs) | 13,264 | 13,222 | |||||
| Nuclear decommissioning trust funds | 8,363 | 8,140 | |||||
| Operating lease right-of-use assets, net | 1,577 | 1,658 | |||||
| Investments in equity method unconsolidated affiliates | 924 | 1,936 | |||||
| Other (includes $90 at 2020 and $110 at 2019 related to VIEs) | 3,539 | 3,289 | |||||
| Total other noncurrent assets | 46,970 | 47,548 | |||||
| Total Assets | $ | 161,409 | $ | 158,838 | |||
| LIABILITIES AND EQUITY | |||||||
| Current Liabilities | |||||||
| Accounts payable | $ | 2,486 | $ | 3,487 | |||
| Notes payable and commercial paper | 3,425 | 3,135 | |||||
| Taxes accrued | 768 | 392 | |||||
| Interest accrued | 556 | 565 | |||||
| Current maturities of long-term debt (includes $466 at 2020 and $216 at 2019 related to VIEs) | 4,669 | 3,141 | |||||
| Asset retirement obligations | 742 | 881 | |||||
| Regulatory liabilities | 1,218 | 784 | |||||
| Other | 2,829 | 2,367 | |||||
| Total current liabilities | 16,693 | 14,752 | |||||
| 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 | 9,170 | 8,878 | |||||
| Asset retirement obligations | 12,912 | 12,437 | |||||
| Regulatory liabilities | 14,546 | 15,264 | |||||
| Operating lease liabilities | 1,379 | 1,432 | |||||
| Accrued pension and other post-retirement benefit costs | 903 | 934 | |||||
| Investment tax credits | 689 | 624 | |||||
| Other (includes $342 at 2020 and $228 at 2019 related to VIEs) | 1,773 | 1,581 | |||||
| Total other noncurrent liabilities | 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 | |||||
| Preferred stock, Series B, $0.001 par value, 1 million shares authorized and outstanding at 2020 and 2019 | 989 | 989 | |||||
| Common stock, $0.001 par value, 2 billion shares authorized; 736 million shares outstanding at 2020 and 733 million shares outstanding at 2019 | 1 | 1 | |||||
| Additional paid-in capital | 41,046 | 40,881 | |||||
| Retained earnings | 3,260 | 4,108 | |||||
| Accumulated other comprehensive loss | (263 | ) | (130 | ) | |||
| Total Duke Energy Corporation stockholders' equity | 46,006 | 46,822 | |||||
| Noncontrolling interests | 1,289 | 1,129 | |||||
| Total equity | 47,295 | 47,951 | |||||
| Total Liabilities and Equity | $ | 161,409 | $ | 158,838 | |||
See Notes to Condensed Consolidated Financial Statements
11
| FINANCIAL STATEMENTS | |||||
DUKE ENERGY CORPORATION
Condensed Consolidated Statements of Cash Flows
(Unaudited)
| Three Months Ended | |||||||||||
| March 31, | |||||||||||
| (in millions) | 2021 | 2020 | |||||||||
| CASH FLOWS FROM OPERATING ACTIVITIES | |||||||||||
| Net income | $ | 941 | $ | 890 | |||||||
| Adjustments to reconcile net income to net cash provided by operating activities: | |||||||||||
| Depreciation, amortization and accretion (including amortization of nuclear fuel) | 1,385 | 1,301 | |||||||||
| Equity in losses (earnings) of unconsolidated affiliates | 17 | (44) | |||||||||
| Equity component of AFUDC | (42) | (40) | |||||||||
| Deferred income taxes | 86 | 422 | |||||||||
| Payments for asset retirement obligations | (114) | (132) | |||||||||
| (Increase) decrease in | |||||||||||
| Receivables | 377 | 466 | |||||||||
| Inventory | 91 | (92) | |||||||||
| Other current assets | (47) | (131) | |||||||||
| Increase (decrease) in | |||||||||||
| Accounts payable | (467) | (657) | |||||||||
| Taxes accrued | 104 | 113 | |||||||||
| Other current liabilities | (263) | (455) | |||||||||
| Other assets | 51 | (37) | |||||||||
| Other liabilities | (31) | (50) | |||||||||
| Net cash provided by operating activities | 2,088 | 1,554 | |||||||||
| CASH FLOWS FROM INVESTING ACTIVITIES | |||||||||||
| Capital expenditures | (2,215) | (2,832) | |||||||||
| Contributions to equity method investments | — | (77) | |||||||||
| Purchases of debt and equity securities | (1,584) | (1,392) | |||||||||
| Proceeds from sales and maturities of debt and equity securities | 1,601 | 1,347 | |||||||||
| Disbursements to canceled equity method investments | (855) | — | |||||||||
| Other | (84) | (68) | |||||||||
| Net cash used in investing activities | (3,137) | (3,022) | |||||||||
| CASH FLOWS FROM FINANCING ACTIVITIES | |||||||||||
| Proceeds from the: | |||||||||||
| Issuance of long-term debt | 608 | 1,954 | |||||||||
| Issuance of common stock | 5 | 40 | |||||||||
| Payments for the redemption of long-term debt | (76) | (292) | |||||||||
| Proceeds from the issuance of short-term debt with original maturities greater than 90 days | 50 | 1,784 | |||||||||
| Payments for the redemption of short-term debt with original maturities greater than 90 days | (909) | (17) | |||||||||
| Notes payable and commercial paper | 2,046 | (198) | |||||||||
| Contributions from noncontrolling interests | 303 | 103 | |||||||||
| Dividends paid | (783) | (707) | |||||||||
| Other | (59) | (74) | |||||||||
| Net cash provided by financing activities | 1,185 | 2,593 | |||||||||
| Net increase in cash, cash equivalents and restricted cash | 136 | 1,125 | |||||||||
| Cash, cash equivalents and restricted cash at beginning of period | 556 | 573 | |||||||||
| Cash, cash equivalents and restricted cash at end of period | $ | 692 | $ | 1,698 | |||||||
| Supplemental Disclosures: | |||||||||||
| Significant non-cash transactions: | |||||||||||
| Accrued capital expenditures | $ | 921 | $ | 934 | |||||||
| Non-cash dividends | — | 27 | |||||||||
| Nine Months Ended | |||||||
| September 30, | |||||||
| (in millions) | 2020 | 2019 | |||||
| CASH FLOWS FROM OPERATING ACTIVITIES | |||||||
| Net (loss) income | $ | 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) | 4,081 | 3,831 | |||||
| Equity in losses (earnings) of unconsolidated affiliates | 2,004 | (137 | ) | ||||
| Equity component of AFUDC | (112 | ) | (99 | ) | |||
| Gains on sales of other assets | (10 | ) | — | ||||
| Impairment charges | 36 | (16 | ) | ||||
| Deferred income taxes | 210 | 736 | |||||
| Contributions to qualified pension plans | — | (77 | ) | ||||
| Payments for asset retirement obligations | (463 | ) | (582 | ) | |||
| Provision for rate refunds | (15 | ) | 61 | ||||
| Refund of AMT credit carryforwards | 572 | — | |||||
| (Increase) decrease in | |||||||
| Net realized and unrealized mark-to-market and hedging transactions | 87 | (4 | ) | ||||
| Receivables | 58 | 62 | |||||
| Inventory | 43 | (3 | ) | ||||
| Other current assets | 199 | (134 | ) | ||||
| Increase (decrease) in | |||||||
| Accounts payable | (563 | ) | (538 | ) | |||
| Taxes accrued | 386 | 125 | |||||
| Other current liabilities | (284 | ) | (198 | ) | |||
| Other assets | (328 | ) | (279 | ) | |||
| Other liabilities | (367 | ) | (75 | ) | |||
| Net cash provided by operating activities | 6,766 | 5,637 | |||||
| CASH FLOWS FROM INVESTING ACTIVITIES | |||||||
| Capital expenditures | (7,408 | ) | (8,084 | ) | |||
| Contributions to equity method investments | (276 | ) | (264 | ) | |||
| Purchases of debt and equity securities | (6,160 | ) | (3,105 | ) | |||
| Proceeds from sales and maturities of debt and equity securities | 6,087 | 3,092 | |||||
| Other | (207 | ) | (272 | ) | |||
| Net cash used in investing activities | (7,964 | ) | (8,633 | ) | |||
| CASH FLOWS FROM FINANCING ACTIVITIES | |||||||
| Proceeds from the: | |||||||
| Issuance of long-term debt | 6,162 | 6,131 | |||||
| Issuance of preferred stock | — | 1,963 | |||||
| Issuance of common stock | 75 | 41 | |||||
| Payments for the redemption of long-term debt | (3,468 | ) | (2,737 | ) | |||
| Proceeds from the issuance of short-term debt with original maturities greater than 90 days | 2,372 | 339 | |||||
| Payments for the redemption of short-term debt with original maturities greater than 90 days | (1,143 | ) | (479 | ) | |||
| Notes payable and commercial paper | (969 | ) | (879 | ) | |||
| Contributions from noncontrolling interests | 402 | 615 | |||||
| Dividends paid | (2,113 | ) | (1,990 | ) | |||
| Other | (93 | ) | (17 | ) | |||
| Net cash provided by financing activities | 1,225 | 2,987 | |||||
| Net increase (decrease) in cash, cash equivalents and restricted cash | 27 | (9 | ) | ||||
| Cash, cash equivalents and restricted cash at beginning of period | 573 | 591 | |||||
| Cash, cash equivalents and restricted cash at end of period | $ | 600 | $ | 582 | |||
| Supplemental Disclosures: | |||||||
| Significant non-cash transactions: | |||||||
| Accrued capital expenditures | $ | 992 | $ | 1,073 | |||
| Non-cash dividends | 82 | 81 | |||||
See Notes to Condensed Consolidated Financial Statements
12
| FINANCIAL STATEMENTS | |||||
DUKE ENERGY CORPORATION
Condensed Consolidated Statements of Changes in Equity
(Unaudited)
| 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 | Gains (Losses) | 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 | (in millions) | Stock | Shares | Stock | Capital | Earnings | Hedges | Securities | Adjustments | Equity | Interests | Equity | ||||||||||||||||||||||||||||||||||||||||||||||||||
| Balance at June 30, 2019 | $ | 973 | 728 | $ | 1 | $ | 40,885 | $ | 3,502 | $ | (63 | ) | $ | 4 | $ | (89 | ) | $ | 45,213 | $ | 119 | $ | 45,332 | ||||||||||||||||||||||||||||||||||||||||||||||||||
| Balance at December 31, 2019 | Balance at December 31, 2019 | $ | 1,962 | 733 | $ | 1 | $ | 40,881 | $ | 4,108 | $ | (51) | $ | 3 | $ | (82) | $ | 46,822 | $ | 1,129 | $ | 47,951 | |||||||||||||||||||||||||||||||||||||||||||||||||||
| Net income (loss) | — | — | — | — | 1,327 | — | — | — | 1,327 | (19 | ) | 1,308 | Net income (loss) | — | — | — | — | 899 | — | — | — | 899 | (48) | 851 | |||||||||||||||||||||||||||||||||||||||||||||||||
| Other comprehensive (loss) income | — | — | — | — | — | (15 | ) | 2 | (2 | ) | (15 | ) | — | (15 | ) | Other comprehensive (loss) income | — | — | — | — | — | (65) | 1 | 1 | (63) | (14) | (77) | ||||||||||||||||||||||||||||||||||||||||||||||
Preferred stock, Series B, issuances, net of issuance costs(a) | 990 | — | — | — | — | — | — | — | 990 | — | 990 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Common stock issuances, including dividend reinvestment and employee benefits | — | 1 | — | 69 | — | — | — | — | 69 | — | 69 | Common stock issuances, including dividend reinvestment and employee benefits | — | 2 | — | 50 | — | — | — | — | 50 | — | 50 | ||||||||||||||||||||||||||||||||||||||||||||||||||
| Common stock dividends | — | — | — | — | (690 | ) | — | — | — | (690 | ) | — | (690 | ) | Common stock dividends | — | — | — | — | (695) | — | — | — | (695) | — | (695) | |||||||||||||||||||||||||||||||||||||||||||||||
Sale of noncontrolling interest(b) | — | — | — | (465 | ) | — | 10 | — | — | (455 | ) | 863 | 408 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Contribution from noncontrolling interests, net of transaction costs | — | — | — | — | — | — | — | — | — | 7 | 7 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Other | — | — | — | (1 | ) | — | — | — | — | (1 | ) | (1 | ) | (2 | ) | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Balance at September 30, 2019 | $ | 1,963 | 729 | $ | 1 | $ | 40,488 | $ | 4,139 | $ | (68 | ) | $ | 6 | $ | (91 | ) | $ | 46,438 | $ | 969 | $ | 47,407 | ||||||||||||||||||||||||||||||||||||||||||||||||||
| Balance at June 30, 2020 | $ | 1,962 | 735 | $ | 1 | $ | 40,997 | $ | 2,707 | $ | (111 | ) | $ | 10 | $ | (82 | ) | $ | 45,484 | $ | 1,127 | $ | 46,611 | ||||||||||||||||||||||||||||||||||||||||||||||||||
| Contributions from noncontrolling interests, net of transaction costs | Contributions from noncontrolling interests, net of transaction costs | — | — | — | — | — | — | — | — | — | 103 | 103 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Distributions to noncontrolling interest in subsidiaries | Distributions to noncontrolling interest in subsidiaries | — | — | — | — | — | — | — | — | — | (7) | (7) | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Other(a) | Other(a) | — | — | — | (1) | (91) | — | — | — | (92) | (1) | (93) | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Balance at March 31, 2020 | Balance at March 31, 2020 | $ | 1,962 | 735 | $ | 1 | $ | 40,930 | $ | 4,221 | $ | (116) | $ | 4 | $ | (81) | $ | 46,921 | $ | 1,162 | $ | 48,083 | |||||||||||||||||||||||||||||||||||||||||||||||||||
| Balance at December 31, 2020 | Balance at December 31, 2020 | $ | 1,962 | 769 | $ | 1 | $ | 43,767 | $ | 2,471 | $ | (167) | $ | 6 | $ | (76) | $ | 47,964 | $ | 1,220 | $ | 49,184 | |||||||||||||||||||||||||||||||||||||||||||||||||||
| Net income (loss) | — | — | — | — | 1,265 | — | — | — | 1,265 | (70 | ) | 1,195 | Net income (loss) | — | — | — | — | 953 | — | — | — | 953 | (51) | 902 | |||||||||||||||||||||||||||||||||||||||||||||||||
| Other comprehensive (loss) income | — | — | — | — | — | (79 | ) | (2 | ) | 1 | (80 | ) | — | (80 | ) | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Other comprehensive income (loss) | Other comprehensive income (loss) | — | — | — | — | — | 25 | (8) | 2 | 19 | 7 | 26 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Common stock issuances, including dividend reinvestment and employee benefits | — | 1 | — | 65 | — | — | — | — | 65 | — | 65 | Common stock issuances, including dividend reinvestment and employee benefits | — | — | — | (3) | — | — | — | — | (3) | — | (3) | ||||||||||||||||||||||||||||||||||||||||||||||||||
| Common stock dividends | — | — | — | — | (712 | ) | — | — | — | (712 | ) | — | (712 | ) | Common stock dividends | — | — | — | — | (744) | — | — | — | (744) | — | (744) | |||||||||||||||||||||||||||||||||||||||||||||||
Contribution from noncontrolling interests, net of transaction costs(d) | — | — | — | (17 | ) | — | — | — | — | (17 | ) | 239 | 222 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Contributions from noncontrolling interests, net of transaction costs | Contributions from noncontrolling interests, net of transaction costs | — | — | — | (3) | — | — | — | — | (3) | 303 | 300 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Distributions to noncontrolling interest in subsidiaries | — | — | — | — | — | — | — | — | — | (8 | ) | (8 | ) | Distributions to noncontrolling interest in subsidiaries | — | — | — | — | — | — | — | — | — | (7) | (7) | ||||||||||||||||||||||||||||||||||||||||||||||||
| Other | — | — | — | 1 | — | — | — | — | 1 | 1 | 2 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Balance at September 30, 2020 | $ | 1,962 | 736 | $ | 1 | $ | 41,046 | $ | 3,260 | $ | (190 | ) | $ | 8 | $ | (81 | ) | $ | 46,006 | $ | 1,289 | $ | 47,295 | ||||||||||||||||||||||||||||||||||||||||||||||||||
| Balance at March 31, 2021 | Balance at March 31, 2021 | $ | 1,962 | 769 | $ | 1 | $ | 43,761 | $ | 2,680 | $ | (142) | $ | (2) | $ | (74) | $ | 48,186 | $ | 1,472 | $ | 49,658 | |||||||||||||||||||||||||||||||||||||||||||||||||||
See Notes to Condensed Consolidated Financial Statements
13
| FINANCIAL STATEMENTS | |||||
| Nine Months Ended September 30, 2019 and 2020 | ||||||||||||||||||||||||||||||||
| Accumulated Other Comprehensive | ||||||||||||||||||||||||||||||||
| (Loss) Income | ||||||||||||||||||||||||||||||||
| Net Unrealized | Total | |||||||||||||||||||||||||||||||
| Net | (Losses) Gains | Duke Energy | ||||||||||||||||||||||||||||||
| Common | Additional | Losses on | on Available- | Pension and | Corporation | |||||||||||||||||||||||||||
| Preferred | Stock | Common | Paid-in | Retained | Cash Flow | for-Sale- | OPEB | Stockholders' | Noncontrolling | Total | ||||||||||||||||||||||
| (in millions) | Stock | Shares | Stock | Capital | Earnings | Hedges | Securities | Adjustments | Equity | Interests | Equity | |||||||||||||||||||||
| Balance at December 31, 2018 | $ | — | 727 | $ | 1 | $ | 40,795 | $ | 3,113 | $ | (14 | ) | $ | (3 | ) | $ | (75 | ) | $ | 43,817 | $ | 17 | $ | 43,834 | ||||||||
| Net income (loss) | — | — | — | — | 3,047 | — | — | — | 3,047 | (110 | ) | 2,937 | ||||||||||||||||||||
| Other comprehensive (loss) income | — | — | — | — | — | (58 | ) | 10 | 1 | (47 | ) | — | (47 | ) | ||||||||||||||||||
Preferred stock, Series A, issuances, net of issuance costs(c) | 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 | — | 2 | — | 158 | — | — | — | — | 158 | — | 158 | |||||||||||||||||||||
| Common stock dividends | — | — | — | — | (2,044 | ) | — | — | — | (2,044 | ) | — | (2,044 | ) | ||||||||||||||||||
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 | ) | |||||||||||||||||||
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 | |||||||||
| Net income (loss) | — | — | — | — | 1,347 | — | — | — | 1,347 | (208 | ) | 1,139 | ||||||||||||||||||||
| Other comprehensive (loss) income | — | — | — | — | — | (139 | ) | 5 | 1 | (133 | ) | (12 | ) | (145 | ) | |||||||||||||||||
| Common stock issuances, including dividend reinvestment and employee benefits | — | 3 | — | 181 | — | — | — | — | 181 | — | 181 | |||||||||||||||||||||
| Common stock dividends | — | — | — | — | (2,103 | ) | — | — | — | (2,103 | ) | — | (2,103 | ) | ||||||||||||||||||
Contributions from noncontrolling interests, net of transaction costs(d) | — | — | — | (17 | ) | — | — | — | — | (17 | ) | 402 | 385 | |||||||||||||||||||
| Distributions to noncontrolling interest in subsidiaries | — | — | — | — | — | — | — | — | — | (22 | ) | (22 | ) | |||||||||||||||||||
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 | |||||||||
DUKE ENERGY CAROLINAS, LLC
Condensed Consolidated Statements of Operations and Comprehensive Income
(Unaudited)
| Three Months Ended | |||||||||||||||||||||||
| March 31, | |||||||||||||||||||||||
| (in millions) | 2021 | 2020 | |||||||||||||||||||||
| Operating Revenues | $ | 1,716 | $ | 1,748 | |||||||||||||||||||
| Operating Expenses | |||||||||||||||||||||||
| Fuel used in electric generation and purchased power | 422 | 453 | |||||||||||||||||||||
| Operation, maintenance and other | 441 | 386 | |||||||||||||||||||||
| Depreciation and amortization | 359 | 343 | |||||||||||||||||||||
| Property and other taxes | 83 | 81 | |||||||||||||||||||||
| Impairment of assets and other charges | — | 2 | |||||||||||||||||||||
| Total operating expenses | 1,305 | 1,265 | |||||||||||||||||||||
| Gains on Sales of Other Assets and Other, net | — | 1 | |||||||||||||||||||||
| Operating Income | 411 | 484 | |||||||||||||||||||||
| Other Income and Expenses, net | 48 | 43 | |||||||||||||||||||||
| Interest Expense | 124 | 123 | |||||||||||||||||||||
| Income Before Income Taxes | 335 | 404 | |||||||||||||||||||||
| Income Tax Expense | 23 | 65 | |||||||||||||||||||||
| Net Income and Comprehensive Income | $ | 312 | $ | 339 | |||||||||||||||||||
| Three Months Ended | Nine Months Ended | ||||||||||||||
| September 30, | September 30, | ||||||||||||||
| (in millions) | 2020 | 2019 | 2020 | 2019 | |||||||||||
| Operating Revenues | $ | 2,058 | $ | 2,162 | $ | 5,416 | $ | 5,619 | |||||||
| Operating Expenses | |||||||||||||||
| Fuel used in electric generation and purchased power | 497 | 504 | 1,326 | 1,371 | |||||||||||
| Operation, maintenance and other | 402 | 443 | 1,218 | 1,324 | |||||||||||
| Depreciation and amortization | 372 | 350 | 1,090 | 1,013 | |||||||||||
| Property and other taxes | 57 | 66 | 213 | 221 | |||||||||||
| Impairment charges | 20 | 6 | 22 | 11 | |||||||||||
| Total operating expenses | 1,348 | 1,369 | 3,869 | 3,940 | |||||||||||
| Gains on Sales of Other Assets and Other, net | 1 | — | 1 | — | |||||||||||
| Operating Income | 711 | 793 | 1,548 | 1,679 | |||||||||||
| Other Income and Expenses, net | 42 | 34 | 128 | 106 | |||||||||||
| Interest Expense | 122 | 119 | 370 | 346 | |||||||||||
| Income Before Income Taxes | 631 | 708 | 1,306 | 1,439 | |||||||||||
| Income Tax Expense | 76 | 118 | 178 | 255 | |||||||||||
| Net Income and Comprehensive Income | $ | 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) | March 31, 2021 | December 31, 2020 | |||||||||
| ASSETS | |||||||||||
| Current Assets | |||||||||||
| Cash and cash equivalents | $ | 12 | $ | 21 | |||||||
| Receivables (net of allowance for doubtful accounts of $2 at 2021 and $1 at 2020) | 171 | 247 | |||||||||
| Receivables of VIEs (net of allowance for doubtful accounts of $32 at 2021 and $22 at 2020) | 613 | 696 | |||||||||
| Receivables from affiliated companies | 119 | 124 | |||||||||
| Inventory | 1,021 | 1,010 | |||||||||
| Regulatory assets | 433 | 473 | |||||||||
| Other | 90 | 20 | |||||||||
| Total current assets | 2,459 | 2,591 | |||||||||
| Property, Plant and Equipment | |||||||||||
| Cost | 51,027 | 50,640 | |||||||||
| Accumulated depreciation and amortization | (17,690) | (17,453) | |||||||||
| Net property, plant and equipment | 33,337 | 33,187 | |||||||||
| Other Noncurrent Assets | |||||||||||
| Regulatory assets | 3,028 | 2,996 | |||||||||
| Nuclear decommissioning trust funds | 5,147 | 4,977 | |||||||||
| Operating lease right-of-use assets, net | 105 | 110 | |||||||||
| Other | 1,185 | 1,187 | |||||||||
| Total other noncurrent assets | 9,465 | 9,270 | |||||||||
| Total Assets | $ | 45,261 | $ | 45,048 | |||||||
| LIABILITIES AND EQUITY | |||||||||||
| Current Liabilities | |||||||||||
| Accounts payable | $ | 643 | $ | 1,000 | |||||||
| Accounts payable to affiliated companies | 206 | 199 | |||||||||
| Notes payable to affiliated companies | 508 | 506 | |||||||||
| Taxes accrued | 138 | 76 | |||||||||
| Interest accrued | 128 | 117 | |||||||||
| Current maturities of long-term debt | 507 | 506 | |||||||||
| Asset retirement obligations | 258 | 264 | |||||||||
| Regulatory liabilities | 559 | 473 | |||||||||
| Other | 440 | 546 | |||||||||
| Total current liabilities | 3,387 | 3,687 | |||||||||
| Long-Term Debt | 11,522 | 11,412 | |||||||||
| Long-Term Debt Payable to Affiliated Companies | 300 | 300 | |||||||||
| Other Noncurrent Liabilities | |||||||||||
| Deferred income taxes | 3,913 | 3,842 | |||||||||
| Asset retirement obligations | 5,117 | 5,086 | |||||||||
| Regulatory liabilities | 6,540 | 6,535 | |||||||||
| Operating lease liabilities | 93 | 97 | |||||||||
| Accrued pension and other post-retirement benefit costs | 72 | 73 | |||||||||
| Investment tax credits | 235 | 236 | |||||||||
| Other | 616 | 626 | |||||||||
| Total other noncurrent liabilities | 16,586 | 16,495 | |||||||||
| Commitments and Contingencies | 0 | 0 | |||||||||
| Equity | |||||||||||
| Member's equity | 13,473 | 13,161 | |||||||||
| Accumulated other comprehensive loss | (7) | (7) | |||||||||
| Total equity | 13,466 | 13,154 | |||||||||
| Total Liabilities and Equity | $ | 45,261 | $ | 45,048 | |||||||
| (in millions) | September 30, 2020 | December 31, 2019 | |||||
| ASSETS | |||||||
| Current Assets | |||||||
| Cash and cash equivalents | $ | 23 | $ | 18 | |||
| Receivables (net of allowance for doubtful accounts of $1 at 2020 and $3 at 2019) | 177 | 324 | |||||
| Receivables of VIEs (net of allowance for doubtful accounts of $21 at 2020 and $7 at 2019) | 770 | 642 | |||||
| Receivables from affiliated companies | 64 | 114 | |||||
| Notes receivable from affiliated companies | 65 | — | |||||
| Inventory | 992 | 996 | |||||
| Regulatory assets | 495 | 550 | |||||
| Other | 44 | 21 | |||||
| Total current assets | 2,630 | 2,665 | |||||
| Property, Plant and Equipment | |||||||
| Cost | 50,622 | 48,922 | |||||
| Accumulated depreciation and amortization | (17,406 | ) | (16,525 | ) | |||
| Net property, plant and equipment | 33,216 | 32,397 | |||||
| Other Noncurrent Assets | |||||||
| Regulatory assets | 3,400 | 3,360 | |||||
| Nuclear decommissioning trust funds | 4,506 | 4,359 | |||||
| Operating lease right-of-use assets, net | 117 | 123 | |||||
| Other | 1,179 | 1,149 | |||||
| Total other noncurrent assets | 9,202 | 8,991 | |||||
| Total Assets | $ | 45,048 | $ | 44,053 | |||
| LIABILITIES AND EQUITY | |||||||
| Current Liabilities | |||||||
| Accounts payable | $ | 583 | $ | 954 | |||
| Accounts payable to affiliated companies | 155 | 210 | |||||
| Notes payable to affiliated companies | — | 29 | |||||
| Taxes accrued | 398 | 46 | |||||
| Interest accrued | 130 | 115 | |||||
| Current maturities of long-term debt | 751 | 458 | |||||
| Asset retirement obligations | 267 | 206 | |||||
| Regulatory liabilities | 430 | 255 | |||||
| Other | 487 | 611 | |||||
| Total current liabilities | 3,201 | 2,884 | |||||
| Long-Term Debt | 11,497 | 11,142 | |||||
| Long-Term Debt Payable to Affiliated Companies | 300 | 300 | |||||
| Other Noncurrent Liabilities | |||||||
| Deferred income taxes | 3,915 | 3,921 | |||||
| Asset retirement obligations | 5,507 | 5,528 | |||||
| Regulatory liabilities | 6,243 | 6,423 | |||||
| Operating lease liabilities | 102 | 102 | |||||
| Accrued pension and other post-retirement benefit costs | 76 | 84 | |||||
| Investment tax credits | 237 | 231 | |||||
| Other | 644 | 627 | |||||
| Total other noncurrent liabilities | 16,724 | 16,916 | |||||
| Commitments and Contingencies | |||||||
| Equity | |||||||
| Member's equity | 13,333 | 12,818 | |||||
| Accumulated other comprehensive loss | (7 | ) | (7 | ) | |||
| Total equity | 13,326 | 12,811 | |||||
| Total Liabilities and Equity | $ | 45,048 | $ | 44,053 | |||
See Notes to Condensed Consolidated Financial Statements
| FINANCIAL STATEMENTS | |||||
DUKE ENERGY CAROLINAS, LLC
Condensed Consolidated Statements of Cash Flows
(Unaudited)
| Three Months Ended | |||||||||||
| March 31, | |||||||||||
| (in millions) | 2021 | 2020 | |||||||||
| CASH FLOWS FROM OPERATING ACTIVITIES | |||||||||||
| Net income | $ | 312 | $ | 339 | |||||||
| Adjustments to reconcile net income to net cash provided by operating activities: | |||||||||||
| Depreciation and amortization (including amortization of nuclear fuel) | 428 | 414 | |||||||||
| Equity component of AFUDC | (16) | (14) | |||||||||
| Deferred income taxes | (8) | 22 | |||||||||
| Payments for asset retirement obligations | (35) | (41) | |||||||||
| (Increase) decrease in | |||||||||||
| Receivables | 156 | 156 | |||||||||
| Receivables from affiliated companies | 5 | 27 | |||||||||
| Inventory | (11) | (72) | |||||||||
| Other current assets | (48) | 96 | |||||||||
| Increase (decrease) in | |||||||||||
| Accounts payable | (255) | (253) | |||||||||
| Accounts payable to affiliated companies | 7 | 15 | |||||||||
| Taxes accrued | 62 | 87 | |||||||||
| Other current liabilities | (77) | (108) | |||||||||
| Other assets | 43 | (60) | |||||||||
| Other liabilities | (17) | (10) | |||||||||
| Net cash provided by operating activities | 546 | 598 | |||||||||
| CASH FLOWS FROM INVESTING ACTIVITIES | |||||||||||
| Capital expenditures | (622) | (724) | |||||||||
| Purchases of debt and equity securities | (1,128) | (607) | |||||||||
| Proceeds from sales and maturities of debt and equity securities | 1,128 | 607 | |||||||||
| Notes receivable from affiliated companies | — | (436) | |||||||||
| Other | (43) | (18) | |||||||||
| Net cash used in investing activities | (665) | (1,178) | |||||||||
| CASH FLOWS FROM FINANCING ACTIVITIES | |||||||||||
| Proceeds from the issuance of long-term debt | 142 | 910 | |||||||||
| Payments for the redemption of long-term debt | (33) | (2) | |||||||||
| Notes payable to affiliated companies | 2 | (29) | |||||||||
| Distributions to parent | — | (300) | |||||||||
| Other | (1) | (1) | |||||||||
| Net cash provided by financing activities | 110 | 578 | |||||||||
| Net decrease in cash and cash equivalents | (9) | (2) | |||||||||
| Cash and cash equivalents at beginning of period | 21 | 18 | |||||||||
| Cash and cash equivalents at end of period | $ | 12 | $ | 16 | |||||||
| Supplemental Disclosures: | |||||||||||
| Significant non-cash transactions: | |||||||||||
| Accrued capital expenditures | $ | 268 | $ | 254 | |||||||
| Nine Months Ended | |||||||
| September 30, | |||||||
| (in millions) | 2020 | 2019 | |||||
| CASH FLOWS FROM OPERATING ACTIVITIES | |||||||
| Net income | $ | 1,128 | $ | 1,184 | |||
| Adjustments to reconcile net income to net cash provided by operating activities: | |||||||
| Depreciation and amortization (including amortization of nuclear fuel) | 1,295 | 1,227 | |||||
| Equity component of AFUDC | (46 | ) | (29 | ) | |||
| Gains on sales of other assets | (1 | ) | — | ||||
| Impairment charges | 22 | 11 | |||||
| Deferred income taxes | (103 | ) | 96 | ||||
| Contributions to qualified pension plans | — | (7 | ) | ||||
| Payments for asset retirement obligations | (127 | ) | (234 | ) | |||
| Provision for rate refunds | (1 | ) | 34 | ||||
| (Increase) decrease in | |||||||
| Net realized and unrealized mark-to-market and hedging transactions | — | (7 | ) | ||||
| Receivables | 41 | (80 | ) | ||||
| Receivables from affiliated companies | 50 | 74 | |||||
| Inventory | 4 | 5 | |||||
| Other current assets | 197 | (117 | ) | ||||
| Increase (decrease) in | |||||||
| Accounts payable | (313 | ) | (284 | ) | |||
| Accounts payable to affiliated companies | (55 | ) | (56 | ) | |||
| Taxes accrued | 352 | 91 | |||||
| Other current liabilities | (121 | ) | 44 | ||||
| Other assets | (71 | ) | (2 | ) | |||
| Other liabilities | (23 | ) | (44 | ) | |||
| Net cash provided by operating activities | 2,228 | 1,906 | |||||
| CASH FLOWS FROM INVESTING ACTIVITIES | |||||||
| Capital expenditures | (1,931 | ) | (1,984 | ) | |||
| Purchases of debt and equity securities | (1,313 | ) | (1,658 | ) | |||
| Proceeds from sales and maturities of debt and equity securities | 1,313 | 1,658 | |||||
| Notes receivable from affiliated companies | (65 | ) | — | ||||
| Other | (105 | ) | (80 | ) | |||
| Net cash used in investing activities | (2,101 | ) | (2,064 | ) | |||
| CASH FLOWS FROM FINANCING ACTIVITIES | |||||||
| Proceeds from the issuance of long-term debt | 965 | 819 | |||||
| Payments for the redemption of long-term debt | (457 | ) | (5 | ) | |||
| Notes payable to affiliated companies | (29 | ) | (390 | ) | |||
| Distributions to parent | (600 | ) | (275 | ) | |||
| Other | (1 | ) | (1 | ) | |||
| Net cash (used in) provided by financing activities | (122 | ) | 148 | ||||
| Net increase (decrease) in cash and cash equivalents | 5 | (10 | ) | ||||
| Cash and cash equivalents at beginning of period | 18 | 33 | |||||
| Cash and cash equivalents at end of period | $ | 23 | $ | 23 | |||
| Supplemental Disclosures: | |||||||
| Significant non-cash transactions: | |||||||
| Accrued capital expenditures | $ | 295 | $ | 261 | |||
See Notes to Condensed Consolidated Financial Statements
| FINANCIAL STATEMENTS | |||||
DUKE ENERGY CAROLINAS, LLC
Condensed Consolidated Statements of Changes in Equity
(Unaudited)
| Accumulated Other | |||||||||||||||||
| Comprehensive | |||||||||||||||||
| Loss | |||||||||||||||||
| Member's | Net Losses on | Total | |||||||||||||||
| (in millions) | Equity | Cash Flow Hedges | Equity | ||||||||||||||
| Balance at December 31, 2019 | $ | 12,818 | $ | (7) | $ | 12,811 | |||||||||||
| Net income | 339 | — | 339 | ||||||||||||||
| Distributions to parent | (300) | — | (300) | ||||||||||||||
Other(a) | (13) | — | (13) | ||||||||||||||
| Balance at March 31, 2020 | $ | 12,844 | $ | (7) | $ | 12,837 | |||||||||||
| Balance at December 31, 2020 | $ | 13,161 | $ | (7) | $ | 13,154 | |||||||||||
| Net income | 312 | — | 312 | ||||||||||||||
| Balance at March 31, 2021 | $ | 13,473 | $ | (7) | $ | 13,466 | |||||||||||
| Three Months Ended September 30, 2019 and 2020 | |||||||||||
| Accumulated Other | |||||||||||
| Comprehensive | |||||||||||
| Loss | |||||||||||
| Member's | Net Losses on | Total | |||||||||
| (in millions) | Equity | Cash Flow Hedges | Equity | ||||||||
| Balance at June 30, 2019 | $ | 12,283 | $ | (7 | ) | $ | 12,276 | ||||
| Net income | 590 | — | 590 | ||||||||
| Distributions to parent | (275 | ) | — | (275 | ) | ||||||
| Balance at September 30, 2019 | $ | 12,598 | $ | (7 | ) | $ | 12,591 | ||||
| Balance at June 30, 2020 | $ | 13,079 | $ | (7 | ) | $ | 13,072 | ||||
| Net income | 555 | — | 555 | ||||||||
| Distributions to parent | (300 | ) | — | (300 | ) | ||||||
| Other | (1 | ) | — | (1 | ) | ||||||
| Balance at September 30, 2020 | $ | 13,333 | $ | (7 | ) | $ | 13,326 | ||||
| Nine Months Ended September 30, 2019 and 2020 | |||||||||||
| Accumulated Other | |||||||||||
| Comprehensive | |||||||||||
| Loss | |||||||||||
| Member's | Net Losses on | Total | |||||||||
| (in millions) | Equity | Cash Flow Hedges | Equity | ||||||||
| Balance at December 31, 2018 | $ | 11,689 | $ | (6 | ) | $ | 11,683 | ||||
| Net income | 1,184 | — | 1,184 | ||||||||
| Distributions to parent | (275 | ) | — | (275 | ) | ||||||
| Other | — | (1 | ) | (1 | ) | ||||||
| Balance at September 30, 2019 | $ | 12,598 | $ | (7 | ) | $ | 12,591 | ||||
| Balance at December 31, 2019 | $ | 12,818 | $ | (7 | ) | $ | 12,811 | ||||
| Net income | 1,128 | — | 1,128 | ||||||||
| Distributions to parent | (600 | ) | — | (600 | ) | ||||||
Other(a) | (13 | ) | — | (13 | ) | ||||||
| Balance at September 30, 2020 | $ | 13,333 | $ | (7 | ) | $ | 13,326 | ||||
See Notes to Condensed Consolidated Financial Statements
| FINANCIAL STATEMENTS | |||||
PROGRESS ENERGY, INC.
Condensed Consolidated Statements of Operations and Comprehensive Income
(Unaudited)
| Three Months Ended | |||||||||||||||||||||||
| March 31, | |||||||||||||||||||||||
| (in millions) | 2021 | 2020 | |||||||||||||||||||||
| Operating Revenues | $ | 2,505 | $ | 2,422 | |||||||||||||||||||
| Operating Expenses | |||||||||||||||||||||||
| Fuel used in electric generation and purchased power | 795 | 763 | |||||||||||||||||||||
| Operation, maintenance and other | 601 | 554 | |||||||||||||||||||||
| Depreciation and amortization | 485 | 452 | |||||||||||||||||||||
| Property and other taxes | 142 | 135 | |||||||||||||||||||||
| Total operating expenses | 2,023 | 1,904 | |||||||||||||||||||||
| Losses on Sales of Other Assets and Other, net | — | (1) | |||||||||||||||||||||
| Operating Income | 482 | 517 | |||||||||||||||||||||
| Other Income and Expenses, net | 43 | 32 | |||||||||||||||||||||
| Interest Expense | 192 | 206 | |||||||||||||||||||||
| Income Before Income Taxes | 333 | 343 | |||||||||||||||||||||
| Income Tax Expense | 43 | 60 | |||||||||||||||||||||
| Net Income | $ | 290 | $ | 283 | |||||||||||||||||||
| Net Income | $ | 290 | $ | 283 | |||||||||||||||||||
| Other Comprehensive Income, net of tax | |||||||||||||||||||||||
| Net unrealized gains on cash flow hedges | 1 | 1 | |||||||||||||||||||||
| Unrealized (losses) gains on available-for-sale securities | (1) | 1 | |||||||||||||||||||||
| Other Comprehensive Income, net of tax | — | 2 | |||||||||||||||||||||
| Comprehensive Income | $ | 290 | $ | 285 | |||||||||||||||||||
| Three Months Ended | Nine Months Ended | ||||||||||||||
| September 30, | September 30, | ||||||||||||||
| (in millions) | 2020 | 2019 | 2020 | 2019 | |||||||||||
| Operating Revenues | $ | 3,197 | $ | 3,242 | $ | 8,117 | $ | 8,558 | |||||||
| Operating Expenses | |||||||||||||||
| Fuel used in electric generation and purchased power | 1,088 | 1,187 | 2,628 | 3,100 | |||||||||||
| Operation, maintenance and other | 646 | 640 | 1,789 | 1,813 | |||||||||||
| Depreciation and amortization | 472 | 496 | 1,356 | 1,377 | |||||||||||
| Property and other taxes | 147 | 159 | 419 | 439 | |||||||||||
| Impairment charges | 1 | (25 | ) | 1 | (25 | ) | |||||||||
| Total operating expenses | 2,354 | 2,457 | 6,193 | 6,704 | |||||||||||
| Gains on Sales of Other Assets and Other, net | 3 | 1 | 9 | — | |||||||||||
| Operating Income | 846 | 786 | 1,933 | 1,854 | |||||||||||
| Other Income and Expenses, net | 24 | 41 | 89 | 106 | |||||||||||
| Interest Expense | 194 | 212 | 599 | 650 | |||||||||||
| Income Before Income Taxes | 676 | 615 | 1,423 | 1,310 | |||||||||||
| Income Tax Expense | 70 | 94 | 190 | 212 | |||||||||||
| Net Income | 606 | 521 | 1,233 | 1,098 | |||||||||||
| Less: Net Income Attributable to Noncontrolling Interests | 1 | 0 | 1 | 0 | |||||||||||
| Net Income Attributable to Parent | $ | 605 | $ | 521 | $ | 1,232 | $ | 1,098 | |||||||
| Net Income | $ | 606 | $ | 521 | $ | 1,233 | $ | 1,098 | |||||||
| Other Comprehensive Income, net of tax | |||||||||||||||
| Pension and OPEB adjustments | — | — | 1 | 2 | |||||||||||
| Net unrealized gains on cash flow hedges | 1 | 1 | 3 | 4 | |||||||||||
| Unrealized gains on available-for-sale securities | 1 | 1 | 1 | 2 | |||||||||||
| Other Comprehensive Income, net of tax | 2 | 2 | 5 | 8 | |||||||||||
| Comprehensive Income | 608 | 523 | 1,238 | 1,106 | |||||||||||
| Less: Comprehensive Income Attributable to Noncontrolling Interests | 1 | — | 1 | 0 | |||||||||||
| Comprehensive Income Attributable to Parent | $ | 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) | March 31, 2021 | December 31, 2020 | |||||||||
| ASSETS | |||||||||||
| Current Assets | |||||||||||
| Cash and cash equivalents | $ | 74 | $ | 59 | |||||||
| Receivables (net of allowance for doubtful accounts of $8 at 2021 and 2020) | 166 | 228 | |||||||||
| Receivables of VIEs (net of allowance for doubtful accounts of $29 at 2021 and 2020) | 749 | 901 | |||||||||
| Receivables from affiliated companies | 76 | 157 | |||||||||
| Inventory | 1,336 | 1,375 | |||||||||
| Regulatory assets (includes $54 at 2021 and $53 at 2020 related to VIEs) | 821 | 758 | |||||||||
| Other (includes $14 at 2021 and $39 at 2020 related to VIEs) | 257 | 109 | |||||||||
| Total current assets | 3,479 | 3,587 | |||||||||
| Property, Plant and Equipment | |||||||||||
| Cost | 58,546 | 57,892 | |||||||||
| Accumulated depreciation and amortization | (18,718) | (18,368) | |||||||||
| Generation facilities to be retired, net | 29 | 29 | |||||||||
| Net property, plant and equipment | 39,857 | 39,553 | |||||||||
| Other Noncurrent Assets | |||||||||||
| Goodwill | 3,655 | 3,655 | |||||||||
| Regulatory assets (includes $927 at 2021 and $937 at 2020 related to VIEs) | 5,749 | 5,775 | |||||||||
| Nuclear decommissioning trust funds | 4,263 | 4,137 | |||||||||
| Operating lease right-of-use assets, net | 720 | 690 | |||||||||
| Other | 1,267 | 1,227 | |||||||||
| Total other noncurrent assets | 15,654 | 15,484 | |||||||||
| Total Assets | $ | 58,990 | $ | 58,624 | |||||||
| LIABILITIES AND EQUITY | |||||||||||
| Current Liabilities | |||||||||||
| Accounts payable | $ | 796 | $ | 919 | |||||||
| Accounts payable to affiliated companies | 321 | 289 | |||||||||
| Notes payable to affiliated companies | 2,844 | 2,969 | |||||||||
| Taxes accrued | 143 | 121 | |||||||||
| Interest accrued | 187 | 202 | |||||||||
| Current maturities of long-term debt (includes $305 at 2021 and 2020 related to VIEs) | 2,127 | 1,426 | |||||||||
| Asset retirement obligations | 267 | 283 | |||||||||
| Regulatory liabilities | 702 | 640 | |||||||||
| Other | 744 | 793 | |||||||||
| Total current liabilities | 8,131 | 7,642 | |||||||||
| Long-Term Debt (includes $1,322 at 2021 and $1,252 at 2020 related to VIEs) | 17,056 | 17,688 | |||||||||
| Long-Term Debt Payable to Affiliated Companies | 150 | 150 | |||||||||
| Other Noncurrent Liabilities | |||||||||||
| Deferred income taxes | 4,489 | 4,396 | |||||||||
| Asset retirement obligations | 5,859 | 5,866 | |||||||||
| Regulatory liabilities | 5,126 | 5,051 | |||||||||
| Operating lease liabilities | 648 | 623 | |||||||||
| Accrued pension and other post-retirement benefit costs | 501 | 505 | |||||||||
| Other | 500 | 462 | |||||||||
| Total other noncurrent liabilities | 17,123 | 16,903 | |||||||||
| Commitments and Contingencies | 0 | 0 | |||||||||
| Equity | |||||||||||
| Common Stock, $0.01 par value, 100 shares authorized and outstanding at 2021 and 2020 | — | — | |||||||||
| Additional paid-in capital | 9,143 | 9,143 | |||||||||
| Retained earnings | 7,400 | 7,109 | |||||||||
| Accumulated other comprehensive loss | (15) | (15) | |||||||||
| Total Progress Energy, Inc. stockholders' equity | 16,528 | 16,237 | |||||||||
| Noncontrolling interests | 2 | 4 | |||||||||
| Total equity | 16,530 | 16,241 | |||||||||
| Total Liabilities and Equity | $ | 58,990 | $ | 58,624 | |||||||
| (in millions) | September 30, 2020 | December 31, 2019 | |||||
| ASSETS | |||||||
| Current Assets | |||||||
| Cash and cash equivalents | $ | 70 | $ | 48 | |||
| Receivables (net of allowance for doubtful accounts of $9 at 2020 and $7 at 2019) | 196 | 220 | |||||
| Receivables of VIEs (net of allowance for doubtful accounts of $28 at 2020 and $9 at 2019) | 1,071 | 830 | |||||
| Receivables from affiliated companies | 44 | 76 | |||||
| Notes receivable from affiliated companies | — | 164 | |||||
| Inventory | 1,378 | 1,423 | |||||
| Regulatory assets (includes $53 at 2020 and $52 at 2019 related to VIEs) | 775 | 946 | |||||
| Other (includes $16 at 2020 and $39 at 2019 related to VIEs) | 81 | 210 | |||||
| Total current assets | 3,615 | 3,917 | |||||
| Property, Plant and Equipment | |||||||
| Cost | 57,152 | 55,070 | |||||
| Accumulated depreciation and amortization | (18,008 | ) | (17,159 | ) | |||
| Generation facilities to be retired, net | 29 | 246 | |||||
| Net property, plant and equipment | 39,173 | 38,157 | |||||
| Other Noncurrent Assets | |||||||
| Goodwill | 3,655 | 3,655 | |||||
| Regulatory assets (includes $951 at 2020 and $989 at 2019 related to VIEs) | 6,270 | 6,346 | |||||
| Nuclear decommissioning trust funds | 3,857 | 3,782 | |||||
| Operating lease right-of-use assets, net | 710 | 788 | |||||
| Other | 1,212 | 1,049 | |||||
| Total other noncurrent assets | 15,704 | 15,620 | |||||
| Total Assets | $ | 58,492 | $ | 57,694 | |||
| LIABILITIES AND EQUITY | |||||||
| Current Liabilities | |||||||
| Accounts payable | $ | 795 | $ | 1,104 | |||
| Accounts payable to affiliated companies | 208 | 310 | |||||
| Notes payable to affiliated companies | 2,159 | 1,821 | |||||
| Taxes accrued | 310 | 46 | |||||
| Interest accrued | 199 | 228 | |||||
| Current maturities of long-term debt (includes $305 at 2020 and $54 at 2019 related to VIEs) | 1,726 | 1,577 | |||||
| Asset retirement obligations | 297 | 485 | |||||
| Regulatory liabilities | 545 | 330 | |||||
| Other | 756 | 902 | |||||
| Total current liabilities | 6,995 | 6,803 | |||||
| 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 | |||||
| Other Noncurrent Liabilities | |||||||
| Deferred income taxes | 4,508 | 4,462 | |||||
| Asset retirement obligations | 6,058 | 5,986 | |||||
| Regulatory liabilities | 4,809 | 5,225 | |||||
| Operating lease liabilities | 637 | 697 | |||||
| Accrued pension and other post-retirement benefit costs | 474 | 488 | |||||
| Other | 443 | 383 | |||||
| Total other noncurrent liabilities | 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 | |||||
| Retained earnings | 7,296 | 6,465 | |||||
| Accumulated other comprehensive loss | (13 | ) | (18 | ) | |||
| Total Progress Energy, Inc. stockholders' equity | 16,426 | 15,590 | |||||
| Noncontrolling interests | 3 | 3 | |||||
| Total equity | 16,429 | 15,593 | |||||
| Total Liabilities and Equity | $ | 58,492 | $ | 57,694 | |||
See Notes to Condensed Consolidated Financial Statements
| FINANCIAL STATEMENTS | |||||
PROGRESS ENERGY, INC.
Condensed Consolidated Statements of Cash Flows
(Unaudited)
| Three Months Ended | |||||||||||
| March 31, | |||||||||||
| (in millions) | 2021 | 2020 | |||||||||
| CASH FLOWS FROM OPERATING ACTIVITIES | |||||||||||
| Net income | $ | 290 | $ | 283 | |||||||
| Adjustments to reconcile net income to net cash provided by operating activities: | |||||||||||
| Depreciation, amortization and accretion (including amortization of nuclear fuel) | 575 | 552 | |||||||||
| Equity component of AFUDC | (13) | (14) | |||||||||
| Deferred income taxes | 79 | 80 | |||||||||
| Payments for asset retirement obligations | (69) | (79) | |||||||||
| (Increase) decrease in | |||||||||||
| Net realized and unrealized mark-to-market and hedging transactions | 6 | 1 | |||||||||
| Receivables | 214 | 149 | |||||||||
| Receivables from affiliated companies | 81 | 27 | |||||||||
| Inventory | 39 | (40) | |||||||||
| Other current assets | (150) | 43 | |||||||||
| Increase (decrease) in | |||||||||||
| Accounts payable | (69) | (211) | |||||||||
| Accounts payable to affiliated companies | 32 | 19 | |||||||||
| Taxes accrued | 23 | 71 | |||||||||
| Other current liabilities | (60) | (128) | |||||||||
| Other assets | (27) | (38) | |||||||||
| Other liabilities | (64) | (56) | |||||||||
| Net cash provided by operating activities | 887 | 659 | |||||||||
| CASH FLOWS FROM INVESTING ACTIVITIES | |||||||||||
| Capital expenditures | (796) | (972) | |||||||||
| Purchases of debt and equity securities | (517) | (651) | |||||||||
| Proceeds from sales and maturities of debt and equity securities | 537 | 643 | |||||||||
| Notes receivable from affiliated companies | — | 164 | |||||||||
| Other | (59) | (39) | |||||||||
| Net cash used in investing activities | (835) | (855) | |||||||||
| CASH FLOWS FROM FINANCING ACTIVITIES | |||||||||||
| Proceeds from the issuance of long-term debt | 98 | — | |||||||||
| Payments for the redemption of long-term debt | (34) | (283) | |||||||||
| Notes payable to affiliated companies | (125) | 479 | |||||||||
| Other | (2) | (1) | |||||||||
| Net cash (used in) provided by financing activities | (63) | 195 | |||||||||
| Net decrease in cash, cash equivalents and restricted cash | (11) | (1) | |||||||||
| Cash, cash equivalents and restricted cash at beginning of period | 200 | 126 | |||||||||
| Cash, cash equivalents and restricted cash at end of period | $ | 189 | $ | 125 | |||||||
| Supplemental Disclosures: | |||||||||||
| Significant non-cash transactions: | |||||||||||
| Accrued capital expenditures | $ | 317 | $ | 310 | |||||||
| Nine Months Ended | |||||||
| September 30, | |||||||
| (in millions) | 2020 | 2019 | |||||
| CASH FLOWS FROM OPERATING ACTIVITIES | |||||||
| Net income | $ | 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) | 1,734 | 1,649 | |||||
| Equity component of AFUDC | (30 | ) | (48 | ) | |||
| (Gains) Losses on sales of other assets | (9 | ) | — | ||||
| Impairment charges | 1 | (25 | ) | ||||
| Deferred income taxes | (3 | ) | 342 | ||||
| Contributions to qualified pension plans | — | (57 | ) | ||||
| Payments for asset retirement obligations | (287 | ) | (309 | ) | |||
| Provision for rate refunds | 4 | 13 | |||||
| (Increase) decrease in | |||||||
| Net realized and unrealized mark-to-market and hedging transactions | (13 | ) | 9 | ||||
| Receivables | (207 | ) | (128 | ) | |||
| Receivables from affiliated companies | 32 | 135 | |||||
| Inventory | 46 | 45 | |||||
| Other current assets | 214 | 79 | |||||
| Increase (decrease) in | |||||||
| Accounts payable | (124 | ) | (64 | ) | |||
| Accounts payable to affiliated companies | (102 | ) | (6 | ) | |||
| Taxes accrued | 263 | 150 | |||||
| Other current liabilities | (41 | ) | (96 | ) | |||
| Other assets | (145 | ) | (282 | ) | |||
| Other liabilities | (102 | ) | (75 | ) | |||
| Net cash provided by operating activities | 2,464 | 2,430 | |||||
| CASH FLOWS FROM INVESTING ACTIVITIES | |||||||
| Capital expenditures | (2,602 | ) | (2,866 | ) | |||
| Purchases of debt and equity securities | (4,554 | ) | (1,304 | ) | |||
| Proceeds from sales and maturities of debt and equity securities | 4,543 | 1,300 | |||||
| Notes receivable from affiliated companies | 164 | — | |||||
| Other | (114 | ) | (130 | ) | |||
| Net cash used in investing activities | (2,563 | ) | (3,000 | ) | |||
| CASH FLOWS FROM FINANCING ACTIVITIES | |||||||
| Proceeds from the issuance of long-term debt | 1,791 | 1,295 | |||||
| Payments for the redemption of long-term debt | (1,555 | ) | (1,263 | ) | |||
| Notes payable to affiliated companies | 338 | 554 | |||||
| Dividends to parent | (400 | ) | — | ||||
| Other | (13 | ) | 8 | ||||
| Net cash provided by financing activities | 161 | 594 | |||||
| Net increase in cash, cash equivalents and restricted cash | 62 | 24 | |||||
| Cash, cash equivalents and restricted cash at beginning of period | 126 | 112 | |||||
| Cash, cash equivalents and restricted cash at end of period | $ | 188 | $ | 136 | |||
| Supplemental Disclosures: | |||||||
| Significant non-cash transactions: | |||||||
| Accrued capital expenditures | $ | 311 | $ | 400 | |||
See Notes to Condensed Consolidated Financial Statements
| FINANCIAL STATEMENTS | |||||
PROGRESS ENERGY, INC.
Condensed Consolidated Statements of Changes in Equity
(Unaudited)
| Accumulated Other Comprehensive Income (Loss) | |||||||||||||||||||||||||||||||||||||||||||||||
| Net Gains | Net Unrealized | Total Progress | |||||||||||||||||||||||||||||||||||||||||||||
| Additional | (Losses) on | Gains (Losses) on | Pension and | Energy, Inc. | |||||||||||||||||||||||||||||||||||||||||||
| Paid-in | Retained | Cash Flow | Available-for- | OPEB | Stockholders' | Noncontrolling | Total | ||||||||||||||||||||||||||||||||||||||||
| Capital | Earnings | Hedges | Sale Securities | Adjustments | Equity | Interests | Equity | ||||||||||||||||||||||||||||||||||||||||
| Balance at December 31, 2019 | $ | 9,143 | $ | 6,465 | $ | (10) | $ | (1) | $ | (7) | $ | 15,590 | $ | 3 | $ | 15,593 | |||||||||||||||||||||||||||||||
| Net income | — | 283 | — | — | — | 283 | — | 283 | |||||||||||||||||||||||||||||||||||||||
| Other comprehensive income | — | — | 1 | 1 | — | 2 | — | 2 | |||||||||||||||||||||||||||||||||||||||
| Other | — | (1) | — | — | — | (1) | — | (1) | |||||||||||||||||||||||||||||||||||||||
| Balance at March 31, 2020 | $ | 9,143 | $ | 6,747 | $ | (9) | $ | — | $ | (7) | $ | 15,874 | $ | 3 | $ | 15,877 | |||||||||||||||||||||||||||||||
| Balance at December 31, 2020 | $ | 9,143 | $ | 7,109 | $ | (5) | $ | (2) | $ | (8) | $ | 16,237 | $ | 4 | $ | 16,241 | |||||||||||||||||||||||||||||||
| Net income | — | 290 | — | — | — | 290 | — | 290 | |||||||||||||||||||||||||||||||||||||||
| Other comprehensive income (loss) | — | — | 1 | (1) | — | — | — | — | |||||||||||||||||||||||||||||||||||||||
| Distributions to noncontrolling interests | — | — | — | — | — | — | (1) | (1) | |||||||||||||||||||||||||||||||||||||||
| Other | — | 1 | — | — | — | 1 | (1) | — | |||||||||||||||||||||||||||||||||||||||
| Balance at March 31, 2021 | $ | 9,143 | $ | 7,400 | $ | (4) | $ | (3) | $ | (8) | $ | 16,528 | $ | 2 | $ | 16,530 | |||||||||||||||||||||||||||||||
| Three Months Ended September 30, 2019 and 2020 | |||||||||||||||||||||||||||||||
| Accumulated Other Comprehensive Loss | |||||||||||||||||||||||||||||||
| Net Gains | Net Unrealized | Total Progress | |||||||||||||||||||||||||||||
| Additional | (Losses) on | Gains (Losses) on | Pension and | Energy, Inc. | |||||||||||||||||||||||||||
| Paid-in | Retained | Cash Flow | Available-for- | OPEB | Stockholders' | Noncontrolling | Total | ||||||||||||||||||||||||
| (in millions) | Capital | Earnings | Hedges | Sale Securities | Adjustments | Equity | Interests | Equity | |||||||||||||||||||||||
| Balance at June 30, 2019 | $ | 9,143 | $ | 5,715 | $ | (13 | ) | $ | — | $ | (8 | ) | $ | 14,837 | $ | 2 | $ | 14,839 | |||||||||||||
| Net income | — | 521 | — | — | — | 521 | — | 521 | |||||||||||||||||||||||
| Other comprehensive income | — | — | 1 | 1 | — | 2 | — | 2 | |||||||||||||||||||||||
| Other | — | — | — | (1 | ) | 1 | — | 1 | 1 | ||||||||||||||||||||||
| Balance at September 30, 2019 | $ | 9,143 | $ | 6,236 | $ | (12 | ) | $ | — | $ | (7 | ) | $ | 15,360 | $ | 3 | $ | 15,363 | |||||||||||||
| Balance at June 30, 2020 | $ | 9,143 | $ | 7,090 | $ | (8 | ) | $ | (1 | ) | $ | (6 | ) | $ | 16,218 | $ | 3 | $ | 16,221 | ||||||||||||
| Net income | — | 605 | — | — | — | 605 | 1 | 606 | |||||||||||||||||||||||
| Other comprehensive income | — | — | 1 | 1 | — | 2 | — | 2 | |||||||||||||||||||||||
| Dividends to parent | — | (400 | ) | — | — | — | (400 | ) | — | (400 | ) | ||||||||||||||||||||
| Other | — | 1 | — | — | — | 1 | (1 | ) | — | ||||||||||||||||||||||
| Balance at September 30, 2020 | $ | 9,143 | $ | 7,296 | $ | (7 | ) | $ | — | $ | (6 | ) | $ | 16,426 | $ | 3 | $ | 16,429 | |||||||||||||
| Nine Months Ended September 30, 2019 and 2020 | |||||||||||||||||||||||||||||||
| Accumulated Other Comprehensive Loss | |||||||||||||||||||||||||||||||
| Net Gains | Net Unrealized | Total Progress | |||||||||||||||||||||||||||||
| Additional | (Losses) on | Gains (Losses) on | Pension and | Energy, Inc. | |||||||||||||||||||||||||||
| Paid-in | Retained | Cash Flow | Available-for- | OPEB | Stockholders' | Noncontrolling | Total | ||||||||||||||||||||||||
| 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 | ||||||||||||
| Net income | — | 1,098 | — | — | — | 1,098 | — | 1,098 | |||||||||||||||||||||||
| Other comprehensive income | — | — | 4 | 2 | 2 | 8 | — | 8 | |||||||||||||||||||||||
Other(a) | — | 7 | (4 | ) | (1 | ) | (2 | ) | — | — | — | ||||||||||||||||||||
| 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 | ||||||||||||
| Net income | — | 1,232 | — | — | — | 1,232 | 1 | 1,233 | |||||||||||||||||||||||
| Other comprehensive income | — | — | 3 | 1 | 1 | 5 | — | 5 | |||||||||||||||||||||||
| Distributions to noncontrolling interests | — | — | — | — | — | — | (1 | ) | (1 | ) | |||||||||||||||||||||
| Dividends to parent | — | (400 | ) | — | — | — | (400 | ) | — | (400 | ) | ||||||||||||||||||||
| Other | — | (1 | ) | — | — | — | (1 | ) | — | (1 | ) | ||||||||||||||||||||
| Balance at September 30, 2020 | $ | 9,143 | $ | 7,296 | $ | (7 | ) | $ | — | $ | (6 | ) | $ | 16,426 | $ | 3 | $ | 16,429 | |||||||||||||
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 | |||||||||||||||||||||||
| March 31, | |||||||||||||||||||||||
| (in millions) | 2021 | 2020 | |||||||||||||||||||||
| Operating Revenues | $ | 1,401 | $ | 1,338 | |||||||||||||||||||
| Operating Expenses | |||||||||||||||||||||||
| Fuel used in electric generation and purchased power | 436 | 405 | |||||||||||||||||||||
| Operation, maintenance and other | 357 | 305 | |||||||||||||||||||||
| Depreciation and amortization | 285 | 287 | |||||||||||||||||||||
| Property and other taxes | 49 | 47 | |||||||||||||||||||||
| Total operating expenses | 1,127 | 1,044 | |||||||||||||||||||||
| Losses on Sales of Other Assets and Other, net | — | (1) | |||||||||||||||||||||
| Operating Income | 274 | 293 | |||||||||||||||||||||
| Other Income and Expenses, net | 24 | 22 | |||||||||||||||||||||
| Interest Expense | 69 | 69 | |||||||||||||||||||||
| Income Before Income Taxes | 229 | 246 | |||||||||||||||||||||
| Income Tax Expense | 19 | 42 | |||||||||||||||||||||
| Net Income and Comprehensive Income | $ | 210 | $ | 204 | |||||||||||||||||||
| Three Months Ended | Nine Months Ended | ||||||||||||||
| September 30, | September 30, | ||||||||||||||
| (in millions) | 2020 | 2019 | 2020 | 2019 | |||||||||||
| Operating Revenues | $ | 1,626 | $ | 1,688 | $ | 4,207 | $ | 4,559 | |||||||
| Operating Expenses | |||||||||||||||
| Fuel used in electric generation and purchased power | 537 | 577 | 1,337 | 1,571 | |||||||||||
| Operation, maintenance and other | 348 | 378 | 970 | 1,070 | |||||||||||
| Depreciation and amortization | 289 | 314 | 833 | 855 | |||||||||||
| Property and other taxes | 38 | 46 | 129 | 131 | |||||||||||
| Impairment charges | 5 | — | 5 | — | |||||||||||
| Total operating expenses | 1,217 | 1,315 | 3,274 | 3,627 | |||||||||||
| Gains on Sales of Other Assets and Other, net | 3 | — | 8 | — | |||||||||||
| Operating Income | 412 | 373 | 941 | 932 | |||||||||||
| Other Income and Expenses, net | 11 | 27 | 52 | 75 | |||||||||||
| Interest Expense | 66 | 74 | 203 | 232 | |||||||||||
| Income Before Income Taxes | 357 | 326 | 790 | 775 | |||||||||||
| Income Tax Expense | 11 | 48 | 79 | 125 | |||||||||||
| Net Income and Comprehensive Income | $ | 346 | $ | 278 | $ | 711 | $ | 650 | |||||||
See Notes to Condensed Consolidated Financial Statements
| FINANCIAL STATEMENTS | |||||
DUKE ENERGY PROGRESS, LLC
Condensed Consolidated Balance Sheets
(Unaudited)
| (in millions) | March 31, 2021 | December 31, 2020 | |||||||||
| ASSETS | |||||||||||
| Current Assets | |||||||||||
| Cash and cash equivalents | $ | 46 | $ | 39 | |||||||
| Receivables (net of allowance for doubtful accounts of $4 at 2021 and 2020) | 80 | 132 | |||||||||
| Receivables of VIEs (net of allowance for doubtful accounts of $19 at 2021 and 2020) | 422 | 500 | |||||||||
| Receivables from affiliated companies | 70 | 50 | |||||||||
| Inventory | 882 | 911 | |||||||||
| Regulatory assets | 469 | 492 | |||||||||
| Other | 138 | 60 | |||||||||
| Total current assets | 2,107 | 2,184 | |||||||||
| Property, Plant and Equipment | |||||||||||
| Cost | 36,077 | 35,759 | |||||||||
| Accumulated depreciation and amortization | (13,064) | (12,801) | |||||||||
| Generation facilities to be retired, net | 29 | 29 | |||||||||
| Net property, plant and equipment | 23,042 | 22,987 | |||||||||
| Other Noncurrent Assets | |||||||||||
| Regulatory assets | 4,033 | 3,976 | |||||||||
| Nuclear decommissioning trust funds | 3,645 | 3,500 | |||||||||
| Operating lease right-of-use assets, net | 386 | 346 | |||||||||
| Other | 759 | 740 | |||||||||
| Total other noncurrent assets | 8,823 | 8,562 | |||||||||
| Total Assets | $ | 33,972 | $ | 33,733 | |||||||
| LIABILITIES AND EQUITY | |||||||||||
| Current Liabilities | |||||||||||
| Accounts payable | $ | 339 | $ | 454 | |||||||
| Accounts payable to affiliated companies | 225 | 215 | |||||||||
| Notes payable to affiliated companies | 163 | 295 | |||||||||
| Taxes accrued | 73 | 85 | |||||||||
| Interest accrued | 71 | 99 | |||||||||
| Current maturities of long-term debt | 1,302 | 603 | |||||||||
| Asset retirement obligations | 267 | 283 | |||||||||
| Regulatory liabilities | 618 | 530 | |||||||||
| Other | 383 | 411 | |||||||||
| Total current liabilities | 3,441 | 2,975 | |||||||||
| Long-Term Debt | 7,904 | 8,505 | |||||||||
| Long-Term Debt Payable to Affiliated Companies | 150 | 150 | |||||||||
| Other Noncurrent Liabilities | |||||||||||
| Deferred income taxes | 2,374 | 2,298 | |||||||||
| Asset retirement obligations | 5,366 | 5,352 | |||||||||
| Regulatory liabilities | 4,454 | 4,394 | |||||||||
| Operating lease liabilities | 356 | 323 | |||||||||
| Accrued pension and other post-retirement benefit costs | 240 | 242 | |||||||||
| Investment tax credits | 131 | 132 | |||||||||
| Other | 86 | 102 | |||||||||
| Total other noncurrent liabilities | 13,007 | 12,843 | |||||||||
| Commitments and Contingencies | 0 | 0 | |||||||||
| Equity | |||||||||||
| Member's Equity | 9,470 | 9,260 | |||||||||
| Total Liabilities and Equity | $ | 33,972 | $ | 33,733 | |||||||
| (in millions) | September 30, 2020 | December 31, 2019 | |||||
| ASSETS | |||||||
| Current Assets | |||||||
| Cash and cash equivalents | $ | 43 | $ | 22 | |||
| Receivables (net of allowance for doubtful accounts of $4 at 2020 and $3 at 2019) | 103 | 123 | |||||
| Receivables of VIEs (net of allowance for doubtful accounts of $17 at 2020 and $5 at 2019) | 559 | 489 | |||||
| Receivables from affiliated companies | 45 | 52 | |||||
| Inventory | 910 | 934 | |||||
| Regulatory assets | 472 | 526 | |||||
| Other | 54 | 60 | |||||
| Total current assets | 2,186 | 2,206 | |||||
| Property, Plant and Equipment | |||||||
| Cost | 35,479 | 34,603 | |||||
| Accumulated depreciation and amortization | (12,548 | ) | (11,915 | ) | |||
| Generation facilities to be retired, net | 29 | 246 | |||||
| Net property, plant and equipment | 22,960 | 22,934 | |||||
| Other Noncurrent Assets | |||||||
| Regulatory assets | 4,449 | 4,152 | |||||
| Nuclear decommissioning trust funds | 3,189 | 3,047 | |||||
| Operating lease right-of-use assets, net | 357 | 387 | |||||
| Other | 720 | 651 | |||||
| Total other noncurrent assets | 8,715 | 8,237 | |||||
| Total Assets | $ | 33,861 | $ | 33,377 | |||
| LIABILITIES AND EQUITY | |||||||
| Current Liabilities | |||||||
| Accounts payable | $ | 372 | $ | 629 | |||
| Accounts payable to affiliated companies | 144 | 203 | |||||
| Notes payable to affiliated companies | 167 | 66 | |||||
| Taxes accrued | 207 | 17 | |||||
| Interest accrued | 80 | 110 | |||||
| Current maturities of long-term debt | 603 | 1,006 | |||||
| Asset retirement obligations | 297 | 485 | |||||
| Regulatory liabilities | 436 | 236 | |||||
| Other | 389 | 478 | |||||
| Total current liabilities | 2,695 | 3,230 | |||||
| Long-Term Debt | 8,605 | 7,902 | |||||
| Long-Term Debt Payable to Affiliated Companies | 150 | 150 | |||||
| Other Noncurrent Liabilities | |||||||
| Deferred income taxes | 2,426 | 2,388 | |||||
| Asset retirement obligations | 5,503 | 5,408 | |||||
| Regulatory liabilities | 4,140 | 4,232 | |||||
| Operating lease liabilities | 329 | 354 | |||||
| Accrued pension and other post-retirement benefit costs | 236 | 238 | |||||
| Investment tax credits | 133 | 137 | |||||
| Other | 88 | 92 | |||||
| Total other noncurrent liabilities | 12,855 | 12,849 | |||||
| Commitments and Contingencies | |||||||
| Equity | |||||||
| Member's Equity | 9,556 | 9,246 | |||||
| Total Liabilities and Equity | $ | 33,861 | $ | 33,377 | |||
See Notes to Condensed Consolidated Financial Statements
| FINANCIAL STATEMENTS | |||||
DUKE ENERGY PROGRESS, LLC
Condensed Consolidated Statements of Cash Flows
(Unaudited)
| Three Months Ended | |||||||||||
| March 31, | |||||||||||
| (in millions) | 2021 | 2020 | |||||||||
| CASH FLOWS FROM OPERATING ACTIVITIES | |||||||||||
| Net income | $ | 210 | $ | 204 | |||||||
| Adjustments to reconcile net income to net cash provided by operating activities: | |||||||||||
| Depreciation and amortization (including amortization of nuclear fuel) | 331 | 331 | |||||||||
| Equity component of AFUDC | (8) | (10) | |||||||||
| Deferred income taxes | 6 | 43 | |||||||||
| Payments for asset retirement obligations | (46) | (75) | |||||||||
| (Increase) decrease in | |||||||||||
| Net realized and unrealized mark-to-market and hedging transactions | 2 | (2) | |||||||||
| Receivables | 131 | 133 | |||||||||
| Receivables from affiliated companies | (20) | 2 | |||||||||
| Inventory | 29 | (22) | |||||||||
| Other current assets | (21) | 54 | |||||||||
| Increase (decrease) in | |||||||||||
| Accounts payable | (62) | (220) | |||||||||
| Accounts payable to affiliated companies | 10 | 5 | |||||||||
| Taxes accrued | (12) | 26 | |||||||||
| Other current liabilities | (25) | (73) | |||||||||
| Other assets | (35) | (48) | |||||||||
| Other liabilities | (15) | (8) | |||||||||
| Net cash provided by operating activities | 475 | 340 | |||||||||
| CASH FLOWS FROM INVESTING ACTIVITIES | |||||||||||
| Capital expenditures | (400) | (466) | |||||||||
| Purchases of debt and equity securities | (382) | (550) | |||||||||
| Proceeds from sales and maturities of debt and equity securities | 380 | 540 | |||||||||
| Other | (29) | (16) | |||||||||
| Net cash used in investing activities | (431) | (492) | |||||||||
| CASH FLOWS FROM FINANCING ACTIVITIES | |||||||||||
| Proceeds from the issuance of long-term debt | 98 | — | |||||||||
| Payments for the redemption of long-term debt | (2) | (1) | |||||||||
| Notes payable to affiliated companies | (132) | 163 | |||||||||
| Other | (1) | — | |||||||||
| Net cash (used in) provided by financing activities | (37) | 162 | |||||||||
| Net increase in cash and cash equivalents | 7 | 10 | |||||||||
| Cash and cash equivalents at beginning of period | 39 | 22 | |||||||||
| Cash and cash equivalents at end of period | $ | 46 | $ | 32 | |||||||
| Supplemental Disclosures: | |||||||||||
| Significant non-cash transactions: | |||||||||||
| Accrued capital expenditures | $ | 96 | $ | 87 | |||||||
| Nine Months Ended | |||||||
| September 30, | |||||||
| (in millions) | 2020 | 2019 | |||||
| CASH FLOWS FROM OPERATING ACTIVITIES | |||||||
| Net income | $ | 711 | $ | 650 | |||
| Adjustments to reconcile net income to net cash provided by operating activities: | |||||||
| Depreciation and amortization (including amortization of nuclear fuel) | 972 | 996 | |||||
| Equity component of AFUDC | (22 | ) | (44 | ) | |||
| Gains on sales of other assets | (8 | ) | — | ||||
| Impairment charges | 5 | — | |||||
| Deferred income taxes | (33 | ) | 144 | ||||
| Contributions to qualified pension plans | — | (4 | ) | ||||
| Payments for asset retirement obligations | (249 | ) | (288 | ) | |||
| Provision for rate refunds | 4 | 13 | |||||
| (Increase) decrease in | |||||||
| Net realized and unrealized mark-to-market and hedging transactions | — | (4 | ) | ||||
| Receivables | (34 | ) | (9 | ) | |||
| Receivables from affiliated companies | 7 | (11 | ) | ||||
| Inventory | 24 | 15 | |||||
| Other current assets | 82 | 65 | |||||
| Increase (decrease) in | |||||||
| Accounts payable | (185 | ) | (54 | ) | |||
| Accounts payable to affiliated companies | (59 | ) | (80 | ) | |||
| Taxes accrued | 190 | 37 | |||||
| Other current liabilities | (24 | ) | (17 | ) | |||
| Other assets | (177 | ) | (201 | ) | |||
| Other liabilities | 21 | 39 | |||||
| Net cash provided by operating activities | 1,225 | 1,247 | |||||
| CASH FLOWS FROM INVESTING ACTIVITIES | |||||||
| Capital expenditures | (1,142 | ) | (1,592 | ) | |||
| Purchases of debt and equity securities | (1,269 | ) | (656 | ) | |||
| Proceeds from sales and maturities of debt and equity securities | 1,238 | 632 | |||||
| Other | (31 | ) | (56 | ) | |||
| Net cash used in investing activities | (1,204 | ) | (1,672 | ) | |||
| CASH FLOWS FROM FINANCING ACTIVITIES | |||||||
| Proceeds from the issuance of long-term debt | 1,296 | 1,270 | |||||
| Payments for the redemption of long-term debt | (985 | ) | (603 | ) | |||
| Notes payable to affiliated companies | 101 | (215 | ) | ||||
| Distributions to parent | (400 | ) | — | ||||
| Other | (12 | ) | (1 | ) | |||
| Net cash provided by financing activities | — | 451 | |||||
| Net increase in cash and cash equivalents | 21 | 26 | |||||
| Cash and cash equivalents at beginning of period | 22 | 23 | |||||
| Cash and cash equivalents at end of period | $ | 43 | $ | 49 | |||
| Supplemental Disclosures: | |||||||
| Significant non-cash transactions: | |||||||
| Accrued capital expenditures | $ | 124 | $ | 182 | |||
See Notes to Condensed Consolidated Financial Statements
| FINANCIAL STATEMENTS | |||||
DUKE ENERGY PROGRESS, LLC
Condensed Consolidated Statements of Changes in Equity
(Unaudited)
| Member's | |||||||||||||||||||||||
| (in millions) | Equity | ||||||||||||||||||||||
| Balance at December 31, 2019 | $ | 9,246 | |||||||||||||||||||||
| Net income | 204 | ||||||||||||||||||||||
| Balance at March 31, 2020 | $ | 9,450 | |||||||||||||||||||||
| Balance at December 31, 2020 | $ | 9,260 | |||||||||||||||||||||
| Net income | 210 | ||||||||||||||||||||||
| Balance at March 31, 2021 | $ | 9,470 | |||||||||||||||||||||
| Three Months Ended | |||
| September 30, 2019 and 2020 | |||
| Member's | |||
| (in millions) | Equity | ||
| Balance at June 30, 2019 | $ | 8,813 | |
| Net income | 278 | ||
| Balance at September 30, 2019 | $ | 9,091 | |
| Balance at June 30, 2020 | $ | 9,610 | |
| Net income | 346 | ||
| Distributions to parent | (400 | ) | |
| Balance at September 30, 2020 | $ | 9,556 | |
| Nine Months Ended | |||
| September 30, 2019 and 2020 | |||
| Member's | |||
| (in millions) | Equity | ||
| Balance at December 31, 2018 | $ | 8,441 | |
| Net income | 650 | ||
| Balance at September 30, 2019 | $ | 9,091 | |
| Balance at December 31, 2019 | $ | 9,246 | |
| Net income | 711 | ||
| Distributions to parent | (400 | ) | |
| Other | (1 | ) | |
| 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 | |||||||||||||||||||||||
| March 31, | |||||||||||||||||||||||
| (in millions) | 2021 | 2020 | |||||||||||||||||||||
| Operating Revenues | $ | 1,101 | $ | 1,080 | |||||||||||||||||||
| Operating Expenses | |||||||||||||||||||||||
| Fuel used in electric generation and purchased power | 359 | 358 | |||||||||||||||||||||
| Operation, maintenance and other | 242 | 245 | |||||||||||||||||||||
| Depreciation and amortization | 200 | 165 | |||||||||||||||||||||
| Property and other taxes | 93 | 88 | |||||||||||||||||||||
| Total operating expenses | 894 | 856 | |||||||||||||||||||||
| Operating Income | 207 | 224 | |||||||||||||||||||||
| Other Income and Expenses, net | 18 | 10 | |||||||||||||||||||||
| Interest Expense | 80 | 84 | |||||||||||||||||||||
| Income Before Income Taxes | 145 | 150 | |||||||||||||||||||||
| Income Tax Expense | 28 | 30 | |||||||||||||||||||||
| Net Income | $ | 117 | $ | 120 | |||||||||||||||||||
| Other Comprehensive Income, net of tax | |||||||||||||||||||||||
| Unrealized (losses) gains on available-for-sale securities | (1) | 1 | |||||||||||||||||||||
| Comprehensive Income | $ | 116 | $ | 121 | |||||||||||||||||||
| Three Months Ended | Nine Months Ended | ||||||||||||||
| September 30, | September 30, | ||||||||||||||
| (in millions) | 2020 | 2019 | 2020 | 2019 | |||||||||||
| Operating Revenues | $ | 1,567 | $ | 1,548 | $ | 3,897 | $ | 3,987 | |||||||
| Operating Expenses | |||||||||||||||
| Fuel used in electric generation and purchased power | 551 | 610 | 1,291 | 1,529 | |||||||||||
| Operation, maintenance and other | 292 | 256 | 806 | 730 | |||||||||||
| Depreciation and amortization | 183 | 182 | 523 | 522 | |||||||||||
| Property and other taxes | 110 | 113 | 290 | 309 | |||||||||||
| Impairment charges | (4 | ) | (25 | ) | (4 | ) | (25 | ) | |||||||
| Total operating expenses | 1,132 | 1,136 | 2,906 | 3,065 | |||||||||||
| Gains on Sales of Other Assets and Other, net | — | 1 | — | — | |||||||||||
| Operating Income | 435 | 413 | 991 | 922 | |||||||||||
| Other Income and Expenses, net | 11 | 14 | 36 | 39 | |||||||||||
| Interest Expense | 81 | 81 | 245 | 246 | |||||||||||
| Income Before Income Taxes | 365 | 346 | 782 | 715 | |||||||||||
| Income Tax Expense | 78 | 57 | 159 | 129 | |||||||||||
| Net Income | $ | 287 | $ | 289 | $ | 623 | $ | 586 | |||||||
| Other Comprehensive Income, net of tax | |||||||||||||||
| Unrealized gains on available-for-sale securities | 1 | 1 | 1 | 2 | |||||||||||
| Comprehensive Income | $ | 288 | $ | 290 | $ | 624 | $ | 588 | |||||||
See Notes to Condensed Consolidated Financial Statements
| FINANCIAL STATEMENTS | |||||
DUKE ENERGY FLORIDA, LLC
Condensed Consolidated Balance Sheets
(Unaudited)
| (in millions) | March 31, 2021 | December 31, 2020 | |||||||||
| ASSETS | |||||||||||
| Current Assets | |||||||||||
| Cash and cash equivalents | $ | 22 | $ | 11 | |||||||
| Receivables (net of allowance for doubtful accounts of $5 at 2021 and $4 at 2020) | 84 | 94 | |||||||||
| Receivables of VIEs (net of allowance for doubtful accounts of $10 at 2021 and 2020) | 327 | 401 | |||||||||
| Receivables from affiliated companies | 7 | 3 | |||||||||
| Inventory | 455 | 464 | |||||||||
| Regulatory assets (includes $54 at 2021 and $53 at 2020 related to VIEs) | 352 | 265 | |||||||||
| Other (includes $14 at 2021 and $39 at 2020 related to VIEs) | 82 | 41 | |||||||||
| Total current assets | 1,329 | 1,279 | |||||||||
| Property, Plant and Equipment | |||||||||||
| Cost | 22,459 | 22,123 | |||||||||
| Accumulated depreciation and amortization | (5,646) | (5,560) | |||||||||
| Net property, plant and equipment | 16,813 | 16,563 | |||||||||
| Other Noncurrent Assets | |||||||||||
| Regulatory assets (includes $927 at 2021 and $937 at 2020 related to VIEs) | 1,717 | 1,799 | |||||||||
| Nuclear decommissioning trust funds | 617 | 637 | |||||||||
| Operating lease right-of-use assets, net | 333 | 344 | |||||||||
| Other | 355 | 335 | |||||||||
| Total other noncurrent assets | 3,022 | 3,115 | |||||||||
| Total Assets | $ | 21,164 | $ | 20,957 | |||||||
| LIABILITIES AND EQUITY | |||||||||||
| Current Liabilities | |||||||||||
| Accounts payable | $ | 457 | $ | 465 | |||||||
| Accounts payable to affiliated companies | 108 | 85 | |||||||||
| Notes payable to affiliated companies | 279 | 196 | |||||||||
| Taxes accrued | 84 | 82 | |||||||||
| Interest accrued | 75 | 69 | |||||||||
| Current maturities of long-term debt (includes $305 at 2021 and 2020 related to VIEs) | 824 | 823 | |||||||||
| Regulatory liabilities | 84 | 110 | |||||||||
| Other | 356 | 374 | |||||||||
| Total current liabilities | 2,267 | 2,204 | |||||||||
| Long-Term Debt (includes $972 at 2021 and $1,002 at 2020 related to VIEs) | 7,060 | 7,092 | |||||||||
| Other Noncurrent Liabilities | |||||||||||
| Deferred income taxes | 2,209 | 2,191 | |||||||||
| Asset retirement obligations | 493 | 514 | |||||||||
| Regulatory liabilities | 672 | 658 | |||||||||
| Operating lease liabilities | 292 | 300 | |||||||||
| Accrued pension and other post-retirement benefit costs | 230 | 231 | |||||||||
| Other | 267 | 209 | |||||||||
| Total other noncurrent liabilities | 4,163 | 4,103 | |||||||||
| Commitments and Contingencies | 0 | 0 | |||||||||
| Equity | |||||||||||
| Member's equity | 7,677 | 7,560 | |||||||||
| Accumulated other comprehensive loss | (3) | (2) | |||||||||
| Total equity | 7,674 | 7,558 | |||||||||
| Total Liabilities and Equity | $ | 21,164 | $ | 20,957 | |||||||
| (in millions) | September 30, 2020 | December 31, 2019 | |||||
| ASSETS | |||||||
| Current Assets | |||||||
| Cash and cash equivalents | $ | 19 | $ | 17 | |||
| Receivables (net of allowance for doubtful accounts of $5 at 2020 and $3 at 2019) | 91 | 96 | |||||
| Receivables of VIEs (net of allowance for doubtful accounts of $11 at 2020 and $4 at 2019) | 512 | 341 | |||||
| Receivables from affiliated companies | 3 | — | |||||
| Notes receivable from affiliated companies | — | 173 | |||||
| Inventory | 468 | 489 | |||||
| Regulatory assets (includes $53 at 2020 and $52 at 2019 related to VIEs) | 303 | 419 | |||||
| Other (includes $16 at 2020 and $39 at 2019 related to VIEs) | 25 | 58 | |||||
| Total current assets | 1,421 | 1,593 | |||||
| Property, Plant and Equipment | |||||||
| Cost | 21,662 | 20,457 | |||||
| Accumulated depreciation and amortization | (5,452 | ) | (5,236 | ) | |||
| Net property, plant and equipment | 16,210 | 15,221 | |||||
| Other Noncurrent Assets | |||||||
| Regulatory assets (includes $951 at 2020 and $989 at 2019 related to VIEs) | 1,821 | 2,194 | |||||
| Nuclear decommissioning trust funds | 668 | 734 | |||||
| Operating lease right-of-use assets, net | 354 | 401 | |||||
| Other | 341 | 311 | |||||
| Total other noncurrent assets | 3,184 | 3,640 | |||||
| Total Assets | $ | 20,815 | $ | 20,454 | |||
| LIABILITIES AND EQUITY | |||||||
| Current Liabilities | |||||||
| Accounts payable | $ | 424 | $ | 474 | |||
| Accounts payable to affiliated companies | 77 | 131 | |||||
| Notes payable to affiliated companies | 66 | — | |||||
| Taxes accrued | 260 | 43 | |||||
| Interest accrued | 73 | 75 | |||||
| Current maturities of long-term debt (includes $305 at 2020 and $54 at 2019 related to VIEs) | 623 | 571 | |||||
| Regulatory liabilities | 109 | 94 | |||||
| Other | 359 | 415 | |||||
| Total current liabilities | 1,991 | 1,803 | |||||
| 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 | 2,175 | 2,179 | |||||
| Asset retirement obligations | 555 | 578 | |||||
| Regulatory liabilities | 669 | 993 | |||||
| Operating lease liabilities | 308 | 343 | |||||
| Accrued pension and other post-retirement benefit costs | 207 | 218 | |||||
| Other | 205 | 136 | |||||
| Total other noncurrent liabilities | 4,119 | 4,447 | |||||
| Commitments and Contingencies | |||||||
| Equity | |||||||
| Member's equity | 7,411 | 6,789 | |||||
| Accumulated other comprehensive loss | — | (1 | ) | ||||
| Total equity | 7,411 | 6,788 | |||||
| Total Liabilities and Equity | $ | 20,815 | $ | 20,454 | |||
See Notes to Condensed Consolidated Financial Statements
| FINANCIAL STATEMENTS | |||||
DUKE ENERGY FLORIDA, LLC
Condensed Consolidated Statements of Cash Flows
(Unaudited)
| Three Months Ended | |||||||||||
| March 31, | |||||||||||
| (in millions) | 2021 | 2020 | |||||||||
| CASH FLOWS FROM OPERATING ACTIVITIES | |||||||||||
| Net income | $ | 117 | $ | 120 | |||||||
| Adjustments to reconcile net income to net cash provided by operating activities: | |||||||||||
| Depreciation, amortization and accretion | 243 | 219 | |||||||||
| Equity component of AFUDC | (4) | (4) | |||||||||
| Deferred income taxes | 74 | 34 | |||||||||
| Payments for asset retirement obligations | (24) | (5) | |||||||||
| (Increase) decrease in | |||||||||||
| Net realized and unrealized mark-to-market and hedging transactions | 2 | 3 | |||||||||
| Receivables | 83 | 15 | |||||||||
| Receivables from affiliated companies | (4) | — | |||||||||
| Inventory | 10 | (19) | |||||||||
| Other current assets | (101) | 7 | |||||||||
| Increase (decrease) in | |||||||||||
| Accounts payable | (7) | 11 | |||||||||
| Accounts payable to affiliated companies | 23 | (20) | |||||||||
| Taxes accrued | 3 | 31 | |||||||||
| Other current liabilities | (41) | (58) | |||||||||
| Other assets | 12 | 13 | |||||||||
| Other liabilities | (48) | (46) | |||||||||
| Net cash provided by operating activities | 338 | 301 | |||||||||
| CASH FLOWS FROM INVESTING ACTIVITIES | |||||||||||
| Capital expenditures | (396) | (506) | |||||||||
| Purchases of debt and equity securities | (134) | (101) | |||||||||
| Proceeds from sales and maturities of debt and equity securities | 157 | 103 | |||||||||
| Notes receivable from affiliated companies | — | 173 | |||||||||
| Other | (30) | (23) | |||||||||
| Net cash used in investing activities | (403) | (354) | |||||||||
| CASH FLOWS FROM FINANCING ACTIVITIES | |||||||||||
| Payments for the redemption of long-term debt | (33) | (282) | |||||||||
| Notes payable to affiliated companies | 83 | 305 | |||||||||
| Other | — | (1) | |||||||||
| Net cash provided by financing activities | 50 | 22 | |||||||||
| Net decrease in cash, cash equivalents and restricted cash | (15) | (31) | |||||||||
| Cash, cash equivalents and restricted cash at beginning of period | 50 | 56 | |||||||||
| Cash, cash equivalents and restricted cash at end of period | $ | 35 | $ | 25 | |||||||
| Supplemental Disclosures: | |||||||||||
| Significant non-cash transactions: | |||||||||||
| Accrued capital expenditures | $ | 222 | $ | 223 | |||||||
| Nine Months Ended | |||||||
| September 30, | |||||||
| (in millions) | 2020 | 2019 | |||||
| CASH FLOWS FROM OPERATING ACTIVITIES | |||||||
| Net income | $ | 623 | $ | 586 | |||
| Adjustments to reconcile net income to net cash provided by operating activities: | |||||||
| Depreciation, amortization and accretion | 755 | 647 | |||||
| Equity component of AFUDC | (8 | ) | (4 | ) | |||
| Impairment charges | (4 | ) | (25 | ) | |||
| Deferred income taxes | 19 | 164 | |||||
| Contributions to qualified pension plans | — | (53 | ) | ||||
| Payments for asset retirement obligations | (38 | ) | (21 | ) | |||
| (Increase) decrease in | |||||||
| Net realized and unrealized mark-to-market and hedging transactions | (17 | ) | 9 | ||||
| Receivables | (172 | ) | (119 | ) | |||
| Receivables from affiliated companies | (3 | ) | 27 | ||||
| Inventory | 22 | 29 | |||||
| Other current assets | 41 | 100 | |||||
| Increase (decrease) in | |||||||
| Accounts payable | 63 | (11 | ) | ||||
| Accounts payable to affiliated companies | (54 | ) | 67 | ||||
| Taxes accrued | 217 | 101 | |||||
| Other current liabilities | (20 | ) | (77 | ) | |||
| Other assets | 48 | (77 | ) | ||||
| Other liabilities | (136 | ) | (123 | ) | |||
| Net cash provided by operating activities | 1,336 | 1,220 | |||||
| CASH FLOWS FROM INVESTING ACTIVITIES | |||||||
| Capital expenditures | (1,460 | ) | (1,274 | ) | |||
| Purchases of debt and equity securities | (3,284 | ) | (648 | ) | |||
| Proceeds from sales and maturities of debt and equity securities | 3,305 | 668 | |||||
| Notes receivable from affiliated companies | 173 | — | |||||
| Other | (82 | ) | (73 | ) | |||
| Net cash used in investing activities | (1,348 | ) | (1,327 | ) | |||
| CASH FLOWS FROM FINANCING ACTIVITIES | |||||||
| Proceeds from the issuance of long-term debt | 495 | 25 | |||||
| Payments for the redemption of long-term debt | (570 | ) | (210 | ) | |||
| Notes payable to affiliated companies | 66 | 248 | |||||
| Other | — | 9 | |||||
| Net cash (used in) provided by financing activities | (9 | ) | 72 | ||||
| Net decrease in cash, cash equivalents and restricted cash | (21 | ) | (35 | ) | |||
| Cash, cash equivalents and restricted cash at beginning of period | 56 | 75 | |||||
| Cash, cash equivalents and restricted cash at end of period | $ | 35 | $ | 40 | |||
| Supplemental Disclosures: | |||||||
| Significant non-cash transactions: | |||||||
| Accrued capital expenditures | $ | 187 | $ | 218 | |||
See Notes to Condensed Consolidated Financial Statements
| FINANCIAL STATEMENTS | |||||
DUKE ENERGY FLORIDA, LLC
Condensed Consolidated Statements of Changes in Equity
(Unaudited)
| Accumulated | |||||||||||||||||
| Other | |||||||||||||||||
| Comprehensive | |||||||||||||||||
| Income (Loss) | |||||||||||||||||
| Net Unrealized | |||||||||||||||||
| Gains (Losses) on | |||||||||||||||||
| Member's | Available-for-Sale | Total | |||||||||||||||
| (in millions) | Equity | Securities | Equity | ||||||||||||||
| Balance at December 31, 2019 | $ | 6,789 | $ | (1) | $ | 6,788 | |||||||||||
| Net income | 120 | — | 120 | ||||||||||||||
| Other comprehensive income | — | 1 | 1 | ||||||||||||||
| Balance at March 31, 2020 | $ | 6,909 | $ | — | $ | 6,909 | |||||||||||
| Balance at December 31, 2020 | $ | 7,560 | $ | (2) | $ | 7,558 | |||||||||||
| Net income | 117 | — | 117 | ||||||||||||||
| Other comprehensive loss | — | (1) | (1) | ||||||||||||||
| Balance at March 31, 2021 | $ | 7,677 | $ | (3) | $ | 7,674 | |||||||||||
| Three Months Ended September 30, 2019 and 2020 | |||||||||||
| Accumulated | |||||||||||
| Other | |||||||||||
| Comprehensive | |||||||||||
| Income (Loss) | |||||||||||
| Net Unrealized | |||||||||||
| Gains on | |||||||||||
| Member's | Available-for-Sale | Total | |||||||||
| (in millions) | Equity | Securities | Equity | ||||||||
| Balance at June 30, 2019 | $ | 6,394 | $ | (1 | ) | $ | 6,393 | ||||
| Net income | 289 | — | 289 | ||||||||
| Other comprehensive income | — | 1 | 1 | ||||||||
| Balance at September 30, 2019 | $ | 6,683 | $ | — | $ | 6,683 | |||||
| Balance at June 30, 2020 | $ | 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 | |||||
| Nine Months Ended September 30, 2019 and 2020 | |||||||||||
| Accumulated | |||||||||||
| Other | |||||||||||
| Comprehensive | |||||||||||
| Income (Loss) | |||||||||||
| Net Unrealized | |||||||||||
| Gains on | |||||||||||
| Member's | Available-for-Sale | Total | |||||||||
| (in millions) | Equity | Securities | Equity | ||||||||
| Balance at December 31, 2018 | $ | 6,097 | $ | (2 | ) | $ | 6,095 | ||||
| Net income | 586 | — | 586 | ||||||||
| Other comprehensive income | — | 2 | 2 | ||||||||
| Balance at September 30, 2019 | $ | 6,683 | $ | — | $ | 6,683 | |||||
| Balance at December 31, 2019 | $ | 6,789 | $ | (1 | ) | $ | 6,788 | ||||
| Net income | 623 | — | 623 | ||||||||
| 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 | |||||||||||||||||||||||
| March 31, | |||||||||||||||||||||||
| (in millions) | 2021 | 2020 | |||||||||||||||||||||
| Operating Revenues | |||||||||||||||||||||||
| Regulated electric | $ | 363 | $ | 346 | |||||||||||||||||||
| Regulated natural gas | 169 | 152 | |||||||||||||||||||||
| Total operating revenues | 532 | 498 | |||||||||||||||||||||
| Operating Expenses | |||||||||||||||||||||||
| Fuel used in electric generation and purchased power | 82 | 87 | |||||||||||||||||||||
| Cost of natural gas | 51 | 37 | |||||||||||||||||||||
| Operation, maintenance and other | 108 | 123 | |||||||||||||||||||||
| Depreciation and amortization | 74 | 68 | |||||||||||||||||||||
| Property and other taxes | 92 | 83 | |||||||||||||||||||||
| Total operating expenses | 407 | 398 | |||||||||||||||||||||
| Operating Income | 125 | 100 | |||||||||||||||||||||
| Other Income and Expenses, net | 5 | 3 | |||||||||||||||||||||
| Interest Expense | 25 | 24 | |||||||||||||||||||||
| Income Before Income Taxes | 105 | 79 | |||||||||||||||||||||
| Income Tax Expense | 14 | 14 | |||||||||||||||||||||
| Net Income and Comprehensive Income | $ | 91 | $ | 65 | |||||||||||||||||||
| Three Months Ended | Nine Months Ended | ||||||||||||||
| September 30, | September 30, | ||||||||||||||
| (in millions) | 2020 | 2019 | 2020 | 2019 | |||||||||||
| Operating Revenues | |||||||||||||||
| Regulated electric | $ | 394 | $ | 408 | $ | 1,070 | $ | 1,099 | |||||||
| Regulated natural gas | 79 | 81 | 324 | 354 | |||||||||||
| Total operating revenues | 473 | 489 | 1,394 | 1,453 | |||||||||||
| Operating Expenses | |||||||||||||||
| Fuel used in electric generation and purchased power | 94 | 114 | 258 | 293 | |||||||||||
| Cost of natural gas | 3 | 4 | 46 | 68 | |||||||||||
| Operation, maintenance and other | 115 | 123 | 333 | 378 | |||||||||||
| Depreciation and amortization | 72 | 69 | 208 | 199 | |||||||||||
| Property and other taxes | 83 | 71 | 244 | 229 | |||||||||||
| Total operating expenses | 367 | 381 | 1,089 | 1,167 | |||||||||||
| Operating Income | 106 | 108 | 305 | 286 | |||||||||||
| Other Income and Expenses, net | 4 | 4 | 11 | 19 | |||||||||||
| Interest Expense | 26 | 27 | 75 | 81 | |||||||||||
| Income Before Income Taxes | 84 | 85 | 241 | 224 | |||||||||||
| Income Tax Expense | 14 | 11 | 40 | 34 | |||||||||||
| Net Income and Comprehensive Income | $ | 70 | $ | 74 | $ | 201 | $ | 190 | |||||||
See Notes to Condensed Consolidated Financial Statements
| FINANCIAL STATEMENTS | |||||
DUKE ENERGY OHIO, INC.
Condensed Consolidated Balance Sheets
(Unaudited)
| (in millions) | March 31, 2021 | December 31, 2020 | |||||||||
| ASSETS | |||||||||||
| Current Assets | |||||||||||
| Cash and cash equivalents | $ | 18 | $ | 14 | |||||||
| Receivables (net of allowance for doubtful accounts of $4 at 2021 and 2020) | 98 | 98 | |||||||||
| Receivables from affiliated companies | 60 | 102 | |||||||||
| Inventory | 108 | 110 | |||||||||
| Regulatory assets | 54 | 39 | |||||||||
| Other | 18 | 31 | |||||||||
| Total current assets | 356 | 394 | |||||||||
| Property, Plant and Equipment | |||||||||||
| Cost | 11,199 | 11,022 | |||||||||
| Accumulated depreciation and amortization | (3,049) | (3,013) | |||||||||
| Net property, plant and equipment | 8,150 | 8,009 | |||||||||
| Other Noncurrent Assets | |||||||||||
| Goodwill | 920 | 920 | |||||||||
| Regulatory assets | 620 | 610 | |||||||||
| Operating lease right-of-use assets, net | 20 | 20 | |||||||||
| Other | 75 | 72 | |||||||||
| Total other noncurrent assets | 1,635 | 1,622 | |||||||||
| Total Assets | $ | 10,141 | $ | 10,025 | |||||||
| LIABILITIES AND EQUITY | |||||||||||
| Current Liabilities | |||||||||||
| Accounts payable | $ | 266 | $ | 279 | |||||||
| Accounts payable to affiliated companies | 56 | 68 | |||||||||
| Notes payable to affiliated companies | 270 | 169 | |||||||||
| Taxes accrued | 192 | 247 | |||||||||
| Interest accrued | 32 | 31 | |||||||||
| Current maturities of long-term debt | 50 | 50 | |||||||||
| Asset retirement obligations | 8 | 3 | |||||||||
| Regulatory liabilities | 59 | 65 | |||||||||
| Other | 67 | 70 | |||||||||
| Total current liabilities | 1,000 | 982 | |||||||||
| Long-Term Debt | 3,015 | 3,014 | |||||||||
| Long-Term Debt Payable to Affiliated Companies | 25 | 25 | |||||||||
| Other Noncurrent Liabilities | |||||||||||
| Deferred income taxes | 1,001 | 981 | |||||||||
| Asset retirement obligations | 104 | 108 | |||||||||
| Regulatory liabilities | 739 | 748 | |||||||||
| Operating lease liabilities | 20 | 20 | |||||||||
| Accrued pension and other post-retirement benefit costs | 114 | 113 | |||||||||
| Other | 97 | 99 | |||||||||
| Total other noncurrent liabilities | 2,075 | 2,069 | |||||||||
| Commitments and Contingencies | 0 | 0 | |||||||||
| Equity | |||||||||||
| Common Stock, $8.50 par value, 120 million shares authorized; 90 million shares outstanding at 2021 and 2020 | 762 | 762 | |||||||||
| Additional paid-in capital | 2,776 | 2,776 | |||||||||
| Retained earnings | 488 | 397 | |||||||||
| Total equity | 4,026 | 3,935 | |||||||||
| Total Liabilities and Equity | $ | 10,141 | $ | 10,025 | |||||||
| (in millions) | September 30, 2020 | December 31, 2019 | |||||
| ASSETS | |||||||
| Current Assets | |||||||
| Cash and cash equivalents | $ | 10 | $ | 17 | |||
| Receivables (net of allowance for doubtful accounts of $5 at 2020 and $4 at 2019) | 90 | 84 | |||||
| Receivables from affiliated companies | 57 | 92 | |||||
| Inventory | 130 | 135 | |||||
| Regulatory assets | 35 | 49 | |||||
| Other | 13 | 21 | |||||
| Total current assets | 335 | 398 | |||||
| Property, Plant and Equipment | |||||||
| Cost | 10,804 | 10,241 | |||||
| Accumulated depreciation and amortization | (2,989 | ) | (2,843 | ) | |||
| Net property, plant and equipment | 7,815 | 7,398 | |||||
| Other Noncurrent Assets | |||||||
| Goodwill | 920 | 920 | |||||
| Regulatory assets | 597 | 549 | |||||
| Operating lease right-of-use assets, net | 20 | 21 | |||||
| Other | 62 | 52 | |||||
| Total other noncurrent assets | 1,599 | 1,542 | |||||
| Total Assets | $ | 9,749 | $ | 9,338 | |||
| LIABILITIES AND EQUITY | |||||||
| Current Liabilities | |||||||
| Accounts payable | $ | 240 | $ | 288 | |||
| Accounts payable to affiliated companies | 54 | 68 | |||||
| Notes payable to affiliated companies | 85 | 312 | |||||
| Taxes accrued | 193 | 219 | |||||
| Interest accrued | 32 | 30 | |||||
| Asset retirement obligations | 7 | 1 | |||||
| Regulatory liabilities | 66 | 64 | |||||
| Other | 73 | 75 | |||||
| Total current liabilities | 750 | 1,057 | |||||
| Long-Term Debt | 3,064 | 2,594 | |||||
| Long-Term Debt Payable to Affiliated Companies | 25 | 25 | |||||
| Other Noncurrent Liabilities | |||||||
| Deferred income taxes | 965 | 922 | |||||
| Asset retirement obligations | 84 | 79 | |||||
| Regulatory liabilities | 753 | 763 | |||||
| Operating lease liabilities | 20 | 21 | |||||
| Accrued pension and other post-retirement benefit costs | 104 | 100 | |||||
| Other | 100 | 94 | |||||
| Total other noncurrent liabilities | 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 | |||||
| Additional paid-in capital | 2,776 | 2,776 | |||||
| Retained earnings | 346 | 145 | |||||
| Total equity | 3,884 | 3,683 | |||||
| Total Liabilities and Equity | $ | 9,749 | $ | 9,338 | |||
See Notes to Condensed Consolidated Financial Statements
| FINANCIAL STATEMENTS | |||||
DUKE ENERGY OHIO, INC.
Condensed Consolidated Statements of Cash Flows
(Unaudited)
| Three Months Ended | |||||||||||
| March 31, | |||||||||||
| (in millions) | 2021 | 2020 | |||||||||
| CASH FLOWS FROM OPERATING ACTIVITIES | |||||||||||
| Net income | $ | 91 | $ | 65 | |||||||
| Adjustments to reconcile net income to net cash provided by operating activities: | |||||||||||
| Depreciation and amortization | 75 | 69 | |||||||||
| Equity component of AFUDC | (2) | (1) | |||||||||
| Deferred income taxes | 12 | 14 | |||||||||
| (Increase) decrease in | |||||||||||
| Receivables | — | 1 | |||||||||
| Receivables from affiliated companies | 5 | 40 | |||||||||
| Inventory | 2 | 14 | |||||||||
| Other current assets | (5) | 8 | |||||||||
| Increase (decrease) in | |||||||||||
| Accounts payable | 8 | (19) | |||||||||
| Accounts payable to affiliated companies | (12) | — | |||||||||
| Taxes accrued | (55) | (49) | |||||||||
| Other current liabilities | (8) | 2 | |||||||||
| Other assets | (16) | (2) | |||||||||
| Other liabilities | 1 | (5) | |||||||||
| Net cash provided by operating activities | 96 | 137 | |||||||||
| CASH FLOWS FROM INVESTING ACTIVITIES | |||||||||||
| Capital expenditures | (220) | (217) | |||||||||
| Notes receivable from affiliated companies | 37 | — | |||||||||
| Other | (10) | (10) | |||||||||
| Net cash used in investing activities | (193) | (227) | |||||||||
| CASH FLOWS FROM FINANCING ACTIVITIES | |||||||||||
| Notes payable to affiliated companies | 101 | 87 | |||||||||
| Net cash provided by financing activities | 101 | 87 | |||||||||
| Net increase (decrease) in cash and cash equivalents | 4 | (3) | |||||||||
| Cash and cash equivalents at beginning of period | 14 | 17 | |||||||||
| Cash and cash equivalents at end of period | $ | 18 | $ | 14 | |||||||
| Supplemental Disclosures: | |||||||||||
| Significant non-cash transactions: | |||||||||||
| Accrued capital expenditures | $ | 84 | $ | 66 | |||||||
| Nine Months Ended | |||||||
| September 30, | |||||||
| (in millions) | 2020 | 2019 | |||||
| CASH FLOWS FROM OPERATING ACTIVITIES | |||||||
| Net income | $ | 201 | $ | 190 | |||
| Adjustments to reconcile net income to net cash provided by operating activities: | |||||||
| Depreciation and amortization | 211 | 202 | |||||
| Equity component of AFUDC | (4 | ) | (9 | ) | |||
| Deferred income taxes | 31 | 68 | |||||
| Contributions to qualified pension plans | — | (2 | ) | ||||
| Payments for asset retirement obligations | (1 | ) | (7 | ) | |||
| Provision for rate refunds | 10 | 5 | |||||
| (Increase) decrease in | |||||||
| Receivables | (5 | ) | 24 | ||||
| Receivables from affiliated companies | 35 | 51 | |||||
| Inventory | 5 | (2 | ) | ||||
| Other current assets | 5 | (15 | ) | ||||
| Increase (decrease) in | |||||||
| Accounts payable | (28 | ) | (40 | ) | |||
| Accounts payable to affiliated companies | (14 | ) | (9 | ) | |||
| Taxes accrued | (23 | ) | (40 | ) | |||
| Other current liabilities | 6 | (4 | ) | ||||
| Other assets | (24 | ) | (12 | ) | |||
| Other liabilities | (7 | ) | (22 | ) | |||
| Net cash provided by operating activities | 398 | 378 | |||||
| CASH FLOWS FROM INVESTING ACTIVITIES | |||||||
| Capital expenditures | (611 | ) | (714 | ) | |||
| Notes receivable from affiliated companies | — | (74 | ) | ||||
| Other | (34 | ) | (45 | ) | |||
| Net cash used in investing activities | (645 | ) | (833 | ) | |||
| CASH FLOWS FROM FINANCING ACTIVITIES | |||||||
| Proceeds from the issuance of long-term debt | 467 | 1,003 | |||||
| Payments for the redemption of long-term debt | — | (451 | ) | ||||
| Notes payable to affiliated companies | (227 | ) | (107 | ) | |||
| Net cash provided by financing activities | 240 | 445 | |||||
| Net decrease in cash and cash equivalents | (7 | ) | (10 | ) | |||
| Cash and cash equivalents at beginning of period | 17 | 21 | |||||
| Cash and cash equivalents at end of period | $ | 10 | $ | 11 | |||
| Supplemental Disclosures: | |||||||
| Significant non-cash transactions: | |||||||
| Accrued capital expenditures | $ | 92 | $ | 100 | |||
See Notes to Condensed Consolidated Financial Statements
| FINANCIAL STATEMENTS | |||||
DUKE ENERGY OHIO, INC.
Condensed Consolidated Statements of Changes in Equity
(Unaudited)
| Additional | |||||||||||||||||||||||||||||
| Common | Paid-in | Retained | Total | ||||||||||||||||||||||||||
| (in millions) | Stock | Capital | Earnings | Equity | |||||||||||||||||||||||||
| Balance at December 31, 2019 | $ | 762 | $ | 2,776 | $ | 145 | $ | 3,683 | |||||||||||||||||||||
| Net income | — | — | 65 | 65 | |||||||||||||||||||||||||
| Balance at March 31, 2020 | $ | 762 | $ | 2,776 | $ | 210 | $ | 3,748 | |||||||||||||||||||||
| Balance at December 31, 2020 | $ | 762 | $ | 2,776 | $ | 397 | $ | 3,935 | |||||||||||||||||||||
| Net income | — | — | 91 | 91 | |||||||||||||||||||||||||
| Balance at March 31, 2021 | $ | 762 | $ | 2,776 | $ | 488 | $ | 4,026 | |||||||||||||||||||||
| Three Months Ended September 30, 2019 and 2020 | |||||||||||||||
| Additional | Retained | ||||||||||||||
| Common | Paid-in | Earnings | Total | ||||||||||||
| (in millions) | Stock | Capital | (Deficit) | Equity | |||||||||||
| Balance at June 30, 2019 | $ | 762 | $ | 2,776 | $ | 23 | $ | 3,561 | |||||||
| Net income | — | — | 74 | 74 | |||||||||||
| Balance at September 30, 2019 | $ | 762 | $ | 2,776 | $ | 97 | $ | 3,635 | |||||||
| Balance at June 30, 2020 | $ | 762 | $ | 2,776 | $ | 276 | $ | 3,814 | |||||||
| Net income | — | — | 70 | 70 | |||||||||||
| Balance at September 30, 2020 | $ | 762 | $ | 2,776 | $ | 346 | $ | 3,884 | |||||||
| Nine Months Ended September 30, 2019 and 2020 | |||||||||||||||
| Additional | Retained | ||||||||||||||
| Common | Paid-in | Earnings | Total | ||||||||||||
| (in millions) | Stock | Capital | (Deficit) | Equity | |||||||||||
| Balance at December 31, 2018 | $ | 762 | $ | 2,776 | $ | (93 | ) | $ | 3,445 | ||||||
| Net income | — | — | 190 | 190 | |||||||||||
| Balance at September 30, 2019 | $ | 762 | $ | 2,776 | $ | 97 | $ | 3,635 | |||||||
| Balance at December 31, 2019 | $ | 762 | $ | 2,776 | $ | 145 | $ | 3,683 | |||||||
| Net income | — | — | 201 | 201 | |||||||||||
| 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 | |||||||||||||||||||||||
| March 31, | |||||||||||||||||||||||
| (in millions) | 2021 | 2020 | |||||||||||||||||||||
| Operating Revenues | $ | 745 | $ | 692 | |||||||||||||||||||
| Operating Expenses | |||||||||||||||||||||||
| Fuel used in electric generation and purchased power | 217 | 194 | |||||||||||||||||||||
| Operation, maintenance and other | 178 | 186 | |||||||||||||||||||||
| Depreciation and amortization | 152 | 132 | |||||||||||||||||||||
| Property and other taxes | 21 | 22 | |||||||||||||||||||||
| Total operating expenses | 568 | 534 | |||||||||||||||||||||
| Operating Income | 177 | 158 | |||||||||||||||||||||
| Other Income and Expenses, net | 9 | 10 | |||||||||||||||||||||
| Interest Expense | 50 | 43 | |||||||||||||||||||||
| Income Before Income Taxes | 136 | 125 | |||||||||||||||||||||
| Income Tax Expense | 24 | 26 | |||||||||||||||||||||
| Net Income and Comprehensive Income | $ | 112 | $ | 99 | |||||||||||||||||||
| Three Months Ended | Nine Months Ended | ||||||||||||||
| September 30, | September 30, | ||||||||||||||
| (in millions) | 2020 | 2019 | 2020 | 2019 | |||||||||||
| Operating Revenues | $ | 761 | $ | 807 | $ | 2,070 | $ | 2,289 | |||||||
| Operating Expenses | |||||||||||||||
| Fuel used in electric generation and purchased power | 222 | 234 | 577 | 720 | |||||||||||
| Operation, maintenance and other | 207 | 192 | 564 | 569 | |||||||||||
| Depreciation and amortization | 149 | 130 | 415 | 393 | |||||||||||
| Property and other taxes | 15 | 16 | 57 | 55 | |||||||||||
| Total operating expenses | 593 | 572 | 1,613 | 1,737 | |||||||||||
| Operating Income | 168 | 235 | 457 | 552 | |||||||||||
| Other Income and Expenses, net | 9 | 8 | 28 | 35 | |||||||||||
| Interest Expense | 29 | 40 | 114 | 111 | |||||||||||
| Income Before Income Taxes | 148 | 203 | 371 | 476 | |||||||||||
| Income Tax Expense | 29 | 47 | 72 | 113 | |||||||||||
| Net Income and Comprehensive Income | $ | 119 | $ | 156 | $ | 299 | $ | 363 | |||||||
See Notes to Condensed Consolidated Financial Statements
| FINANCIAL STATEMENTS | |||||
DUKE ENERGY INDIANA, LLC
Condensed Consolidated Balance Sheets
(Unaudited)
| (in millions) | March 31, 2021 | December 31, 2020 | |||||||||
| ASSETS | |||||||||||
| Current Assets | |||||||||||
| Cash and cash equivalents | $ | 17 | $ | 7 | |||||||
| Receivables (net of allowance for doubtful accounts of $3 at 2021 and 2020) | 63 | 55 | |||||||||
| Receivables from affiliated companies | 62 | 112 | |||||||||
| Notes receivable from affiliated companies | 51 | — | |||||||||
| Inventory | 436 | 473 | |||||||||
| Regulatory assets | 151 | 125 | |||||||||
| Other | 34 | 37 | |||||||||
| Total current assets | 814 | 809 | |||||||||
| Property, Plant and Equipment | |||||||||||
| Cost | 17,548 | 17,382 | |||||||||
| Accumulated depreciation and amortization | (5,821) | (5,661) | |||||||||
| Net property, plant and equipment | 11,727 | 11,721 | |||||||||
| Other Noncurrent Assets | |||||||||||
| Regulatory assets | 1,217 | 1,203 | |||||||||
| Operating lease right-of-use assets, net | 54 | 55 | |||||||||
| Other | 251 | 253 | |||||||||
| Total other noncurrent assets | 1,522 | 1,511 | |||||||||
| Total Assets | $ | 14,063 | $ | 14,041 | |||||||
| LIABILITIES AND EQUITY | |||||||||||
| Current Liabilities | |||||||||||
| Accounts payable | $ | 163 | $ | 188 | |||||||
| Accounts payable to affiliated companies | 72 | 88 | |||||||||
| Notes payable to affiliated companies | — | 131 | |||||||||
| Taxes accrued | 122 | 62 | |||||||||
| Interest accrued | 59 | 51 | |||||||||
| Current maturities of long-term debt | 123 | 70 | |||||||||
| Asset retirement obligations | 176 | 168 | |||||||||
| Regulatory liabilities | 119 | 111 | |||||||||
| Other | 82 | 83 | |||||||||
| Total current liabilities | 916 | 952 | |||||||||
| Long-Term Debt | 3,818 | 3,871 | |||||||||
| Long-Term Debt Payable to Affiliated Companies | 150 | 150 | |||||||||
| Other Noncurrent Liabilities | |||||||||||
| Deferred income taxes | 1,230 | 1,228 | |||||||||
| Asset retirement obligations | 997 | 1,008 | |||||||||
| Regulatory liabilities | 1,629 | 1,627 | |||||||||
| Operating lease liabilities | 52 | 53 | |||||||||
| Accrued pension and other post-retirement benefit costs | 172 | 171 | |||||||||
| Investment tax credits | 168 | 168 | |||||||||
| Other | 35 | 30 | |||||||||
| Total other noncurrent liabilities | 4,283 | 4,285 | |||||||||
| Commitments and Contingencies | 0 | 0 | |||||||||
| Equity | |||||||||||
| Member's Equity | 4,896 | 4,783 | |||||||||
| Total Liabilities and Equity | $ | 14,063 | $ | 14,041 | |||||||
| (in millions) | September 30, 2020 | December 31, 2019 | |||||
| ASSETS | |||||||
| Current Assets | |||||||
| Cash and cash equivalents | $ | 15 | $ | 25 | |||
| Receivables (net of allowance for doubtful accounts of $3 at 2020 and 2019) | 48 | 60 | |||||
| Receivables from affiliated companies | 84 | 79 | |||||
| Inventory | 507 | 517 | |||||
| Regulatory assets | 119 | 90 | |||||
| Other | 30 | 60 | |||||
| Total current assets | 803 | 831 | |||||
| Property, Plant and Equipment | |||||||
| Cost | 17,223 | 16,305 | |||||
| Accumulated depreciation and amortization | (5,579 | ) | (5,233 | ) | |||
| Net property, plant and equipment | 11,644 | 11,072 | |||||
| Other Noncurrent Assets | |||||||
| Regulatory assets | 1,184 | 1,082 | |||||
| Operating lease right-of-use assets, net | 55 | 57 | |||||
| Other | 228 | 234 | |||||
| Total other noncurrent assets | 1,467 | 1,373 | |||||
| Total Assets | $ | 13,914 | $ | 13,276 | |||
| LIABILITIES AND EQUITY | |||||||
| Current Liabilities | |||||||
| Accounts payable | $ | 172 | $ | 201 | |||
| Accounts payable to affiliated companies | 65 | 87 | |||||
| Notes payable to affiliated companies | 83 | 30 | |||||
| Taxes accrued | 110 | 49 | |||||
| Interest accrued | 63 | 58 | |||||
| Current maturities of long-term debt | 13 | 503 | |||||
| Asset retirement obligations | 170 | 189 | |||||
| Regulatory liabilities | 76 | 55 | |||||
| Other | 98 | 112 | |||||
| Total current liabilities | 850 | 1,284 | |||||
| Long-Term Debt | 3,941 | 3,404 | |||||
| Long-Term Debt Payable to Affiliated Companies | 150 | 150 | |||||
| Other Noncurrent Liabilities | |||||||
| Deferred income taxes | 1,179 | 1,150 | |||||
| Asset retirement obligations | 1,044 | 643 | |||||
| Regulatory liabilities | 1,648 | 1,685 | |||||
| Operating lease liabilities | 53 | 55 | |||||
| Accrued pension and other post-retirement benefit costs | 151 | 148 | |||||
| Investment tax credits | 168 | 164 | |||||
| Other | 56 | 18 | |||||
| Total other noncurrent liabilities | 4,299 | 3,863 | |||||
| Commitments and Contingencies | |||||||
| Equity | |||||||
| Member's Equity | 4,674 | 4,575 | |||||
| Total Liabilities and Equity | $ | 13,914 | $ | 13,276 | |||
See Notes to Condensed Consolidated Financial Statements
| FINANCIAL STATEMENTS | |||||
DUKE ENERGY INDIANA, LLC
Condensed Consolidated Statements of Cash Flows
(Unaudited)
| Three Months Ended | |||||||||||
| March 31, | |||||||||||
| (in millions) | 2021 | 2020 | |||||||||
| CASH FLOWS FROM OPERATING ACTIVITIES | |||||||||||
| Net income | $ | 112 | $ | 99 | |||||||
| Adjustments to reconcile net income to net cash provided by operating activities: | |||||||||||
| Depreciation, amortization and accretion | 153 | 133 | |||||||||
| Equity component of AFUDC | (5) | (6) | |||||||||
| Deferred income taxes | (12) | 16 | |||||||||
| Payments for asset retirement obligations | (10) | (12) | |||||||||
| (Increase) decrease in | |||||||||||
| Net realized and unrealized mark-to-market and hedging transactions | 1 | — | |||||||||
| Receivables | (9) | 15 | |||||||||
| Receivables from affiliated companies | — | 3 | |||||||||
| Inventory | 38 | (21) | |||||||||
| Other current assets | (23) | 25 | |||||||||
| Increase (decrease) in | |||||||||||
| Accounts payable | 1 | (13) | |||||||||
| Accounts payable to affiliated companies | (16) | (21) | |||||||||
| Taxes accrued | 71 | 43 | |||||||||
| Other current liabilities | 20 | (27) | |||||||||
| Other assets | 3 | (4) | |||||||||
| Other liabilities | 12 | 8 | |||||||||
| Net cash provided by operating activities | 336 | 238 | |||||||||
| CASH FLOWS FROM INVESTING ACTIVITIES | |||||||||||
| Capital expenditures | (186) | (210) | |||||||||
| Purchases of debt and equity securities | (5) | (5) | |||||||||
| Proceeds from sales and maturities of debt and equity securities | 4 | 2 | |||||||||
| Notes receivable from affiliated companies | (1) | (543) | |||||||||
| Other | (7) | (6) | |||||||||
| Net cash used in investing activities | (195) | (762) | |||||||||
| CASH FLOWS FROM FINANCING ACTIVITIES | |||||||||||
| Proceeds from the issuance of long-term debt | — | 544 | |||||||||
| Notes payable to affiliated companies | (131) | (30) | |||||||||
| Net cash (used in) provided by financing activities | (131) | 514 | |||||||||
| Net increase (decrease) in cash and cash equivalents | 10 | (10) | |||||||||
| Cash and cash equivalents at beginning of period | 7 | 25 | |||||||||
| Cash and cash equivalents at end of period | $ | 17 | $ | 15 | |||||||
| Supplemental Disclosures: | |||||||||||
| Significant non-cash transactions: | |||||||||||
| Accrued capital expenditures | $ | 74 | $ | 70 | |||||||
| Nine Months Ended | |||||||
| September 30, | |||||||
| (in millions) | 2020 | 2019 | |||||
| CASH FLOWS FROM OPERATING ACTIVITIES | |||||||
| Net income | $ | 299 | $ | 363 | |||
| Adjustments to reconcile net income to net cash provided by operating activities: | |||||||
| Depreciation, amortization and accretion | 416 | 395 | |||||
| Equity component of AFUDC | (18 | ) | (13 | ) | |||
| Deferred income taxes | 11 | 108 | |||||
| Contributions to qualified pension plans | — | (2 | ) | ||||
| Payments for asset retirement obligations | (48 | ) | (31 | ) | |||
| (Increase) decrease in | |||||||
| Receivables | 15 | 1 | |||||
| Receivables from affiliated companies | (5 | ) | 37 | ||||
| Inventory | 10 | (56 | ) | ||||
| Other current assets | 12 | 91 | |||||
| Increase (decrease) in | |||||||
| Accounts payable | (1 | ) | 1 | ||||
| Accounts payable to affiliated companies | (22 | ) | (9 | ) | |||
| Taxes accrued | 65 | (14 | ) | ||||
| Other current liabilities | (2 | ) | (12 | ) | |||
| Other assets | (41 | ) | (75 | ) | |||
| Other liabilities | 104 | 67 | |||||
| Net cash provided by operating activities | 795 | 851 | |||||
| CASH FLOWS FROM INVESTING ACTIVITIES | |||||||
| Capital expenditures | (669 | ) | (663 | ) | |||
| Purchases of debt and equity securities | (24 | ) | (19 | ) | |||
| Proceeds from sales and maturities of debt and equity securities | 15 | 15 | |||||
| Notes receivable from affiliated companies | — | (213 | ) | ||||
| Other | (24 | ) | (33 | ) | |||
| Net cash used in investing activities | (702 | ) | (913 | ) | |||
| CASH FLOWS FROM FINANCING ACTIVITIES | |||||||
| Proceeds from the issuance of long-term debt | 544 | 485 | |||||
| Payments for the redemption of long-term debt | (500 | ) | (60 | ) | |||
| Notes payable to affiliated companies | 53 | (167 | ) | ||||
| Distributions to parent | (200 | ) | (200 | ) | |||
| Net cash provided by (used in) financing activities | (103 | ) | 58 | ||||
| Net decrease in cash and cash equivalents | (10 | ) | (4 | ) | |||
| Cash and cash equivalents at beginning of period | 25 | 24 | |||||
| Cash and cash equivalents at end of period | $ | 15 | $ | 20 | |||
| Supplemental Disclosures: | |||||||
| Significant non-cash transactions: | |||||||
| Accrued capital expenditures | $ | 73 | $ | 82 | |||
See Notes to Condensed Consolidated Financial Statements
| FINANCIAL STATEMENTS | |||||
DUKE ENERGY INDIANA, LLC
Condensed Consolidated Statements of Changes in Equity
(Unaudited)
| Member's | |||||||||||||||||||||||||||||||||||
| (in millions) | Equity | ||||||||||||||||||||||||||||||||||
| Balance at December 31, 2019 | $ | 4,575 | |||||||||||||||||||||||||||||||||
| Net income | 99 | ||||||||||||||||||||||||||||||||||
| Balance at March 31, 2020 | $ | 4,674 | |||||||||||||||||||||||||||||||||
| Balance at December 31, 2020 | $ | 4,783 | |||||||||||||||||||||||||||||||||
| Net income | 112 | ||||||||||||||||||||||||||||||||||
| Other | 1 | ||||||||||||||||||||||||||||||||||
| Balance at March 31, 2021 | $ | 4,896 | |||||||||||||||||||||||||||||||||
| Three Months Ended | ||||
| September 30, 2019 and 2020 | ||||
| Member's | ||||
| (in millions) | Equity | |||
| Balance at June 30, 2019 | $ | 4,546 | ||
| Net income | 156 | |||
| Distributions to parent | (200 | ) | ||
| Balance at September 30, 2019 | $ | 4,502 | ||
| Balance at June 30, 2020 | $ | 4,655 | ||
| Net income | 119 | |||
| Distributions to parent | (100 | ) | ||
| Balance at September 30, 2020 | $ | 4,674 | ||
| Nine Months Ended | ||||
| September 30, 2019 and 2020 | ||||
| Member's | ||||
| (in millions) | Equity | |||
| Balance at December 31, 2018 | $ | 4,339 | ||
| Net income | 363 | |||
| Distributions to parent | (200 | ) | ||
| Balance at September 30, 2019 | $ | 4,502 | ||
| Balance at December 31, 2019 | $ | 4,575 | ||
| Net income | 299 | |||
| Distributions to parent | (200 | ) | ||
| 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 | |||||||||||||||||||||||
| March 31, | |||||||||||||||||||||||
| (in millions) | 2021 | 2020 | |||||||||||||||||||||
| Operating Revenues | $ | 606 | $ | 512 | |||||||||||||||||||
| Operating Expenses | |||||||||||||||||||||||
| Cost of natural gas | 225 | 162 | |||||||||||||||||||||
| Operation, maintenance and other | 78 | 80 | |||||||||||||||||||||
| Depreciation and amortization | 48 | 45 | |||||||||||||||||||||
| Property and other taxes | 14 | 12 | |||||||||||||||||||||
| Total operating expenses | 365 | 299 | |||||||||||||||||||||
| Operating Income | 241 | 213 | |||||||||||||||||||||
| Other Income and Expenses, net | 17 | 12 | |||||||||||||||||||||
| Interest Expense | 29 | 27 | |||||||||||||||||||||
| Income Before Income Taxes | 229 | 198 | |||||||||||||||||||||
| Income Tax Expense | 26 | 20 | |||||||||||||||||||||
| Net Income and Comprehensive Income | $ | 203 | $ | 178 | |||||||||||||||||||
| Three Months Ended | Nine Months Ended | ||||||||||||||
| September 30, | September 30, | ||||||||||||||
| (in millions) | 2020 | 2019 | 2020 | 2019 | |||||||||||
| Operating Revenues | $ | 162 | $ | 168 | $ | 871 | $ | 956 | |||||||
| Operating Expenses | |||||||||||||||
| Cost of natural gas | 39 | 46 | 254 | 384 | |||||||||||
| Operation, maintenance and other | 75 | 78 | 234 | 241 | |||||||||||
| Depreciation and amortization | 45 | 43 | 133 | 127 | |||||||||||
| Property and other taxes | 13 | 14 | 37 | 39 | |||||||||||
| Impairment charges | 7 | — | 7 | — | |||||||||||
| Total operating expenses | 179 | 181 | 665 | 791 | |||||||||||
| Operating (Loss) Income | (17 | ) | (13 | ) | 206 | 165 | |||||||||
| Other Income and Expenses, net | 16 | 7 | 44 | 19 | |||||||||||
| Interest Expense | 29 | 22 | 89 | 65 | |||||||||||
| (Loss) Income Before Income Taxes | (30 | ) | (28 | ) | 161 | 119 | |||||||||
| Income Tax (Benefit) Expense | (5 | ) | (10 | ) | 6 | 22 | |||||||||
| 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) | March 31, 2021 | December 31, 2020 | |||||||||
| ASSETS | |||||||||||
| Current Assets | |||||||||||
| Cash and cash equivalents | $ | 1 | $ | 0 | |||||||
| Receivables (net of allowance for doubtful accounts of $14 at 2021 and $12 at 2020) | 257 | 250 | |||||||||
| Receivables from affiliated companies | 10 | 10 | |||||||||
| Notes receivable from affiliated companies | 198 | 0 | |||||||||
| Inventory | 37 | 68 | |||||||||
| Regulatory assets | 100 | 153 | |||||||||
| Other | 12 | 20 | |||||||||
| Total current assets | 615 | 501 | |||||||||
| Property, Plant and Equipment | |||||||||||
| Cost | 9,358 | 9,134 | |||||||||
| Accumulated depreciation and amortization | (1,809) | (1,749) | |||||||||
| Net property, plant and equipment | 7,549 | 7,385 | |||||||||
| Other Noncurrent Assets | |||||||||||
| Goodwill | 49 | 49 | |||||||||
| Regulatory assets | 324 | 302 | |||||||||
| Operating lease right-of-use assets, net | 19 | 20 | |||||||||
| Investments in equity method unconsolidated affiliates | 88 | 88 | |||||||||
| Other | 274 | 270 | |||||||||
| Total other noncurrent assets | 754 | 729 | |||||||||
| Total Assets | $ | 8,918 | $ | 8,615 | |||||||
| LIABILITIES AND EQUITY | |||||||||||
| Current Liabilities | |||||||||||
| Accounts payable | $ | 166 | $ | 230 | |||||||
| Accounts payable to affiliated companies | 58 | 79 | |||||||||
| Notes payable to affiliated companies | — | 530 | |||||||||
| Taxes accrued | 68 | 23 | |||||||||
| Interest accrued | 37 | 34 | |||||||||
| Current maturities of long-term debt | 160 | 160 | |||||||||
| Regulatory liabilities | 70 | 88 | |||||||||
| Other | 73 | 69 | |||||||||
| Total current liabilities | 632 | 1,213 | |||||||||
| Long-Term Debt | 2,967 | 2,620 | |||||||||
| Other Noncurrent Liabilities | |||||||||||
| Deferred income taxes | 837 | 821 | |||||||||
| Asset retirement obligations | 20 | 20 | |||||||||
| Regulatory liabilities | 1,015 | 1,044 | |||||||||
| Operating lease liabilities | 17 | 19 | |||||||||
| Accrued pension and other post-retirement benefit costs | 8 | 8 | |||||||||
| Other | 179 | 155 | |||||||||
| Total other noncurrent liabilities | 2,076 | 2,067 | |||||||||
| Commitments and Contingencies | 0 | 0 | |||||||||
| Equity | |||||||||||
| Common stock, no par value: 100 shares authorized and outstanding at 2021 and 2020 | 1,635 | 1,310 | |||||||||
| Retained earnings | 1,608 | 1,405 | |||||||||
| Total equity | 3,243 | 2,715 | |||||||||
| Total Liabilities and Equity | $ | 8,918 | $ | 8,615 | |||||||
| (in millions) | September 30, 2020 | December 31, 2019 | |||||
| ASSETS | |||||||
| Current Assets | |||||||
| Receivables (net of allowance for doubtful accounts of $9 at 2020 and $6 at 2019) | $ | 93 | $ | 241 | |||
| Receivables from affiliated companies | 11 | 10 | |||||
| Inventory | 47 | 72 | |||||
| Regulatory assets | 119 | 73 | |||||
| Other | 51 | 28 | |||||
| Total current assets | 321 | 424 | |||||
| Property, Plant and Equipment | |||||||
| Cost | 8,882 | 8,446 | |||||
| Accumulated depreciation and amortization | (1,713 | ) | (1,681 | ) | |||
| Net property, plant and equipment | 7,169 | 6,765 | |||||
| Other Noncurrent Assets | |||||||
| Goodwill | 49 | 49 | |||||
| Regulatory assets | 287 | 290 | |||||
| Operating lease right-of-use assets, net | 21 | 24 | |||||
| Investments in equity method unconsolidated affiliates | 86 | 83 | |||||
| Other | 279 | 121 | |||||
| Total other noncurrent assets | 722 | 567 | |||||
| Total Assets | $ | 8,212 | $ | 7,756 | |||
| LIABILITIES AND EQUITY | |||||||
| Current Liabilities | |||||||
| Accounts payable | $ | 177 | $ | 215 | |||
| Accounts payable to affiliated companies | 63 | 3 | |||||
| Notes payable to affiliated companies | 327 | 476 | |||||
| Taxes accrued | 36 | 24 | |||||
| Interest accrued | 37 | 33 | |||||
| Current maturities of long-term debt | 160 | — | |||||
| Regulatory liabilities | 101 | 81 | |||||
| Other | 59 | 67 | |||||
| Total current liabilities | 960 | 899 | |||||
| Long-Term Debt | 2,620 | 2,384 | |||||
| Other Noncurrent Liabilities | |||||||
| Deferred income taxes | 775 | 708 | |||||
| Asset retirement obligations | 17 | 17 | |||||
| Regulatory liabilities | 1,070 | 1,131 | |||||
| Operating lease liabilities | 20 | 23 | |||||
| Accrued pension and other post-retirement benefit costs | 7 | 3 | |||||
| Other | 146 | 148 | |||||
| Total other noncurrent liabilities | 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 | |||||
| Retained earnings | 1,287 | 1,133 | |||||
| Total equity | 2,597 | 2,443 | |||||
| Total Liabilities and Equity | $ | 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)
| Three Months Ended | |||||||||||
| March 31, | |||||||||||
| (in millions) | 2021 | 2020 | |||||||||
| CASH FLOWS FROM OPERATING ACTIVITIES | |||||||||||
| Net income | $ | 203 | $ | 178 | |||||||
| Adjustments to reconcile net income to net cash provided by operating activities: | |||||||||||
| Depreciation and amortization | 48 | 46 | |||||||||
| Equity component of AFUDC | (6) | (5) | |||||||||
| Deferred income taxes | (12) | 12 | |||||||||
| Equity in earnings from unconsolidated affiliates | (2) | (2) | |||||||||
| (Increase) decrease in | |||||||||||
| Receivables | (8) | 65 | |||||||||
| Receivables from affiliated companies | — | (3) | |||||||||
| Inventory | 31 | 33 | |||||||||
| Other current assets | 66 | (9) | |||||||||
| Increase (decrease) in | |||||||||||
| Accounts payable | (63) | (76) | |||||||||
| Accounts payable to affiliated companies | (21) | 9 | |||||||||
| Taxes accrued | 45 | 12 | |||||||||
| Other current liabilities | (16) | (12) | |||||||||
| Other assets | 2 | 1 | |||||||||
| Other liabilities | (2) | (19) | |||||||||
| Net cash provided by operating activities | 265 | 230 | |||||||||
| CASH FLOWS FROM INVESTING ACTIVITIES | |||||||||||
| Capital expenditures | (200) | (231) | |||||||||
| Notes receivable from affiliated companies | (198) | — | |||||||||
| Other | (8) | (5) | |||||||||
| Net cash used in investing activities | (406) | (236) | |||||||||
| CASH FLOWS FROM FINANCING ACTIVITIES | |||||||||||
| Proceeds from the issuance of long-term debt | 347 | — | |||||||||
| Notes payable to affiliated companies | (530) | 10 | |||||||||
| Capital contributions from parent | 325 | — | |||||||||
| Net cash provided by financing activities | 142 | 10 | |||||||||
| Net increase in cash and cash equivalents | 1 | 4 | |||||||||
| Cash and cash equivalents at beginning of period | — | — | |||||||||
| Cash and cash equivalents at end of period | $ | 1 | $ | 4 | |||||||
| Supplemental Disclosures: | |||||||||||
| Significant non-cash transactions: | |||||||||||
| Accrued capital expenditures | $ | 106 | $ | 114 | |||||||
| Nine Months Ended | |||||||
| September 30, | |||||||
| (in millions) | 2020 | 2019 | |||||
| CASH FLOWS FROM OPERATING ACTIVITIES | |||||||
| Net income | $ | 155 | $ | 97 | |||
| Adjustments to reconcile net income to net cash provided by operating activities: | |||||||
| Depreciation and amortization | 135 | 129 | |||||
| Equity component of AFUDC | (14 | ) | — | ||||
| Impairment charges | 7 | — | |||||
| Deferred income taxes | 24 | 110 | |||||
| Equity in earnings from unconsolidated affiliates | (7 | ) | (6 | ) | |||
| Contributions to qualified pension plans | — | (1 | ) | ||||
| Provision for rate refunds | (27 | ) | 9 | ||||
| (Increase) decrease in | |||||||
| Receivables | 164 | 192 | |||||
| Receivables from affiliated companies | (1 | ) | 12 | ||||
| Inventory | 25 | 23 | |||||
| Other current assets | (59 | ) | (95 | ) | |||
| Increase (decrease) in | |||||||
| Accounts payable | (53 | ) | (93 | ) | |||
| Accounts payable to affiliated companies | 60 | 12 | |||||
| Taxes accrued | 16 | (51 | ) | ||||
| Other current liabilities | (4 | ) | (6 | ) | |||
| Other assets | (14 | ) | (10 | ) | |||
| Other liabilities | 7 | (5 | ) | ||||
| Net cash provided by operating activities | 414 | 317 | |||||
| CASH FLOWS FROM INVESTING ACTIVITIES | |||||||
| Capital expenditures | (641 | ) | (751 | ) | |||
| Contributions to equity method investments | — | (16 | ) | ||||
| Other | (18 | ) | (10 | ) | |||
| Net cash used in investing activities | (659 | ) | (777 | ) | |||
| CASH FLOWS FROM FINANCING ACTIVITIES | |||||||
| Proceeds from the issuance of long-term debt | 394 | 596 | |||||
| Payments for the redemption of long-term debt | — | (350 | ) | ||||
| Notes payable to affiliated companies | (149 | ) | 64 | ||||
| Capital contributions from parent | — | 150 | |||||
| Net cash provided by financing activities | 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 | $ | 123 | $ | 121 | |||
See Notes to Condensed Consolidated Financial Statements
| FINANCIAL STATEMENTS | |||||
PIEDMONT NATURAL GAS COMPANY, INC.
Condensed Consolidated Statements of Changes in Equity
(Unaudited)
| Common | Retained | Total | |||||||||||||||||||||||||||||||||
| (in millions) | Stock | Earnings | Equity | ||||||||||||||||||||||||||||||||
| Balance at December 31, 2019 | $ | 1,310 | $ | 1,133 | $ | 2,443 | |||||||||||||||||||||||||||||
| Net income | — | 178 | 178 | ||||||||||||||||||||||||||||||||
| Other | — | (1) | (1) | ||||||||||||||||||||||||||||||||
| Balance at March 31, 2020 | $ | 1,310 | $ | 1,310 | $ | 2,620 | |||||||||||||||||||||||||||||
| Balance at December 31, 2020 | $ | 1,310 | $ | 1,405 | $ | 2,715 | |||||||||||||||||||||||||||||
| Net income | — | 203 | 203 | ||||||||||||||||||||||||||||||||
| Contribution from parent | 325 | — | 325 | ||||||||||||||||||||||||||||||||
| Balance at March 31, 2021 | $ | 1,635 | $ | 1,608 | $ | 3,243 | |||||||||||||||||||||||||||||
| Three Months Ended September 30, 2019 and 2020 | |||||||||||
| Common | Retained | Total | |||||||||
| (in millions) | Stock | Earnings | Equity | ||||||||
| Balance at June 30, 2019 | $ | 1,310 | $ | 1,046 | $ | 2,356 | |||||
| Net loss | — | (18 | ) | (18 | ) | ||||||
| Balance at September 30, 2019 | $ | 1,310 | $ | 1,028 | $ | 2,338 | |||||
| Balance at June 30, 2020 | $ | 1,310 | $ | 1,312 | $ | 2,622 | |||||
| Net loss | — | (25 | ) | (25 | ) | ||||||
| Balance at September 30, 2020 | $ | 1,310 | $ | 1,287 | $ | 2,597 | |||||
| Nine Months Ended September 30, 2019 and 2020 | |||||||||||
| Common | Retained | Total | |||||||||
| (in millions) | Stock | Earnings | Equity | ||||||||
| Balance at December 31, 2018 | $ | 1,160 | $ | 931 | $ | 2,091 | |||||
| Net income | — | 97 | 97 | ||||||||
| Contribution from parent | 150 | — | 150 | ||||||||
| Balance at September 30, 2019 | $ | 1,310 | $ | 1,028 | $ | 2,338 | |||||
| Balance at December 31, 2019 | $ | 1,310 | $ | 1,133 | $ | 2,443 | |||||
| Net income | — | 155 | 155 | ||||||||
| Other | — | (1 | ) | (1 | ) | ||||||
| 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 | Applicable Notes | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Registrant | 1 | 2 | 3 | 4 | 5 | 6 | 7 | 8 | 9 | 10 | 11 | 12 | 13 | 14 | 15 | 16 | 17 | Registrant | 1 | 2 | 3 | 4 | 5 | 6 | 7 | 8 | 9 | 10 | 11 | 12 | 13 | 14 | 15 | 16 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Duke Energy | • | • | • | • | • | • | • | • | • | • | • | • | • | • | • | • | Duke Energy | • | • | • | • | • | • | • | • | • | • | • | • | • | • | • | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Duke Energy Carolinas | • | • | • | • | • | • | • | • | • | • | • | • | • | • | • | Duke Energy Carolinas | • | • | • | • | • | • | • | • | • | • | • | • | • | • | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Progress Energy | • | • | • | • | • | • | • | • | • | • | • | • | • | • | • | • | Progress Energy | • | • | • | • | • | • | • | • | • | • | • | • | • | • | • | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Duke Energy Progress | • | • | • | • | • | • | • | • | • | • | • | • | • | • | • | Duke Energy Progress | • | • | • | • | • | • | • | • | • | • | • | • | • | • | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Duke Energy Florida | • | • | • | • | • | • | • | • | • | • | • | • | • | • | • | Duke Energy Florida | • | • | • | • | • | • | • | • | • | • | • | • | • | • | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Duke Energy Ohio | • | • | • | • | • | • | • | • | • | • | • | • | • | • | • | Duke Energy Ohio | • | • | • | • | • | • | • | • | • | • | • | • | • | • | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Duke Energy Indiana | • | • | • | • | • | • | • | • | • | • | • | • | • | • | • | Duke Energy Indiana | • | • | • | • | • | • | • | • | • | • | • | • | • | • | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Piedmont | • | • | • | • | • | • | • | • | • | • | • | • | • | • | 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, 2019.2020.
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 1211 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.
OTHER CURRENT LIABILITIES
Included in Other within Current Liabilities on the Duke Energy Condensed Consolidated Balance Sheet is a current liability of $935$46 million and $0$936 million as of September 30, 2020,March 31, 2021, and December 31, 2019,2020, respectively. The current liability, initially recorded in the second quarter and increased during the third quarter,2020, primarily representsrepresented Duke Energy's share of ACP's obligations of outstanding debt and to satisfy ARO requirements to restore construction sites. See Notes 3 4 and 1211 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.
42
| FINANCIAL STATEMENTS | ORGANIZATION AND BASIS OF PRESENTATION | ||||
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,March 31, 2021, and 2019.2020.
| 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 | |||||||
| Three Months Ended March 31, | |||||||||||||||||||||||
| (in millions) | 2021 | 2020 | |||||||||||||||||||||
| Noncontrolling Interest Capital Contributions | |||||||||||||||||||||||
| Cash received for the sale of noncontrolling interest to tax equity members | $ | 303 | $ | 103 | |||||||||||||||||||
| Cash received for the sale of noncontrolling interest to pro rata share members | 0 | 0 | |||||||||||||||||||||
| Total Noncontrolling Interest Capital Contributions | 303 | 103 | |||||||||||||||||||||
| Noncontrolling Interest Allocation of Income | |||||||||||||||||||||||
| Allocated losses to noncontrolling tax equity members utilizing the HLBV method | 43 | 49 | |||||||||||||||||||||
| Allocated losses (gains) to noncontrolling members based on pro rata shares of ownership | 8 | (1) | |||||||||||||||||||||
| Total Noncontrolling Interest Allocated Losses | $ | 51 | $ | 48 | |||||||||||||||||||
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 109 and 1211 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.
| September 30, 2020 | December 31, 2019 | ||||||||||||||||||
| Duke | Duke | ||||||||||||||||||
| Duke | Progress | Energy | Duke | Progress | Energy | ||||||||||||||
| Energy | Energy | Florida | Energy | Energy | Florida | ||||||||||||||
| Current Assets | |||||||||||||||||||
| Cash and cash equivalents | $ | 308 | $ | 70 | $ | 19 | $ | 311 | $ | 48 | $ | 17 | |||||||
| Other | 187 | 16 | 16 | 222 | 39 | 39 | |||||||||||||
| Other Noncurrent Assets | |||||||||||||||||||
| Other | 105 | 102 | — | 40 | 39 | — | |||||||||||||
| Total cash, cash equivalents and restricted cash | $ | 600 | $ | 188 | $ | 35 | $ | 573 | $ | 126 | $ | 56 | |||||||
| March 31, 2021 | December 31, 2020 | ||||||||||||||||||||||
| Duke | Duke | ||||||||||||||||||||||
| Duke | Progress | Energy | Duke | Progress | Energy | ||||||||||||||||||
| Energy | Energy | Florida | Energy | Energy | Florida | ||||||||||||||||||
| Current Assets | |||||||||||||||||||||||
| Cash and cash equivalents | $ | 379 | $ | 74 | $ | 22 | $ | 259 | $ | 59 | $ | 11 | |||||||||||
| Other | 210 | 13 | 13 | 194 | 39 | 39 | |||||||||||||||||
| Other Noncurrent Assets | |||||||||||||||||||||||
| Other | 103 | 102 | — | 103 | 102 | — | |||||||||||||||||
| Total cash, cash equivalents and restricted cash | $ | 692 | $ | 189 | $ | 35 | $ | 556 | $ | 200 | $ | 50 | |||||||||||
INVENTORY
Provisions for inventory write-offs were not material at September 30, 2020,March 31, 2021, and December 31, 2019.2020. The components of inventory are presented in the tables below.
| September 30, 2020 | |||||||||||||||||||||||||||||||
| 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 | $ | 2,341 | $ | 779 | $ | 1,021 | $ | 682 | $ | 340 | $ | 79 | $ | 314 | $ | 13 | |||||||||||||||
| Coal | 546 | 173 | 168 | 120 | 48 | 12 | 192 | — | |||||||||||||||||||||||
| Natural gas, oil and other fuel | 303 | 40 | 189 | 108 | 80 | 39 | 1 | 34 | |||||||||||||||||||||||
| Total inventory | $ | 3,190 | $ | 992 | $ | 1,378 | $ | 910 | $ | 468 | $ | 130 | $ | 507 | $ | 47 | |||||||||||||||
| December 31, 2019 | March 31, 2021 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| 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 | (in millions) | Energy | Carolinas | Energy | Progress | Florida | Ohio | Indiana | Piedmont | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Materials and supplies | $ | 2,297 | $ | 768 | $ | 1,038 | $ | 686 | $ | 351 | $ | 79 | $ | 318 | $ | 5 | Materials and supplies | $ | 2,365 | $ | 816 | $ | 1,011 | $ | 680 | $ | 332 | $ | 77 | $ | 313 | $ | 11 | |||||||||||||||||||||||||||||||||||||||||||||
| Coal | 586 | 187 | 186 | 138 | 48 | 15 | 198 | — | Coal | 464 | 170 | 160 | 101 | 59 | 12 | 122 | — | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Natural gas, oil and other fuel | 349 | 41 | 199 | 110 | 90 | 41 | 1 | 67 | Natural gas, oil and other fuel | 247 | 35 | 165 | 101 | 64 | 19 | 1 | 26 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Total inventory | $ | 3,232 | $ | 996 | $ | 1,423 | $ | 934 | $ | 489 | $ | 135 | $ | 517 | $ | 72 | Total inventory | $ | 3,076 | $ | 1,021 | $ | 1,336 | $ | 882 | $ | 455 | $ | 108 | $ | 436 | $ | 37 | |||||||||||||||||||||||||||||||||||||||||||||
| December 31, 2020 | |||||||||||||||||||||||||||||||||||||||||||||||
| 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 | $ | 2,312 | $ | 785 | $ | 999 | $ | 673 | $ | 325 | $ | 78 | $ | 307 | $ | 12 | |||||||||||||||||||||||||||||||
| Coal | 561 | 186 | 193 | 131 | 63 | 16 | 165 | — | |||||||||||||||||||||||||||||||||||||||
| Natural gas, oil and other fuel | 294 | 39 | 183 | 107 | 76 | 16 | 1 | 56 | |||||||||||||||||||||||||||||||||||||||
| Total inventory | $ | 3,167 | $ | 1,010 | $ | 1,375 | $ | 911 | $ | 464 | $ | 110 | $ | 473 | $ | 68 | |||||||||||||||||||||||||||||||
43
| FINANCIAL STATEMENTS | ORGANIZATION AND BASIS OF PRESENTATION | ||||
NEW ACCOUNTING STANDARDS
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 1312 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 September 30, 2020.March 31, 2021.
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.
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 2020,2021, Duke Energy continues to evaluatemonitor recoverability of aits renewable merchant plantplants located in the Electric Reliability Council of Texas West market and in the PJM 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 wasThe assets were not impaired as of September 30, 2020,March 31, 2021, because the carrying value of approximately $150$210 million approximatescontinues to approximate the aggregate estimated future undiscounted cash flows. A continued decline in energy market pricing would likely result in a future impairment. Duke Energy retained 51% ownership interest in this facilitythese facilities 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.
44
| FINANCIAL STATEMENTS | BUSINESS SEGMENTS | ||||
Business segment information is presented in the following tables. Segment assets presented exclude intercompany assets.
| Three Months Ended March 31, 2021 | |||||||||||||||||||||||||||||||||||||||||
| Electric | Gas | Total | |||||||||||||||||||||||||||||||||||||||
| Utilities and | Utilities and | Commercial | Reportable | ||||||||||||||||||||||||||||||||||||||
| (in millions) | Infrastructure | Infrastructure | Renewables | Segments | Other | Eliminations | Total | ||||||||||||||||||||||||||||||||||
| Unaffiliated revenues | $ | 5,273 | $ | 752 | $ | 119 | $ | 6,144 | $ | 6 | $ | — | $ | 6,150 | |||||||||||||||||||||||||||
| Intersegment revenues | 8 | 23 | — | 31 | 20 | (51) | — | ||||||||||||||||||||||||||||||||||
| Total revenues | $ | 5,281 | $ | 775 | $ | 119 | $ | 6,175 | $ | 26 | $ | (51) | $ | 6,150 | |||||||||||||||||||||||||||
Segment income (loss)(a) | $ | 820 | $ | 245 | $ | 27 | $ | 1,092 | $ | (139) | $ | — | $ | 953 | |||||||||||||||||||||||||||
| Less: Noncontrolling interests | 51 | ||||||||||||||||||||||||||||||||||||||||
| Add: Preferred stock dividend | 39 | ||||||||||||||||||||||||||||||||||||||||
| Net Income | $ | 941 | |||||||||||||||||||||||||||||||||||||||
| Segment assets | $ | 138,734 | $ | 14,139 | $ | 6,894 | $ | 159,767 | $ | 3,710 | $ | (12) | $ | 163,465 | |||||||||||||||||||||||||||
| Three Months Ended March 31, 2020 | |||||||||||||||||||||||||||||||||||||||||
| Electric | Gas | Total | |||||||||||||||||||||||||||||||||||||||
| Utilities and | Utilities and | Commercial | Reportable | ||||||||||||||||||||||||||||||||||||||
| (in millions) | Infrastructure | Infrastructure | Renewables | Segments | Other | Eliminations | Total | ||||||||||||||||||||||||||||||||||
| Unaffiliated revenues | $ | 5,174 | $ | 640 | $ | 129 | $ | 5,943 | $ | 6 | $ | — | $ | 5,949 | |||||||||||||||||||||||||||
| Intersegment revenues | 9 | 24 | — | 33 | 17 | (50) | — | ||||||||||||||||||||||||||||||||||
| Total revenues | $ | 5,183 | $ | 664 | $ | 129 | $ | 5,976 | $ | 23 | $ | (50) | $ | 5,949 | |||||||||||||||||||||||||||
Segment income (loss)(b) | $ | 705 | $ | 249 | $ | 57 | $ | 1,011 | $ | (112) | $ | — | $ | 899 | |||||||||||||||||||||||||||
| Less: Noncontrolling interests | 48 | ||||||||||||||||||||||||||||||||||||||||
| Add: Preferred stock dividend | 39 | ||||||||||||||||||||||||||||||||||||||||
| Net Income | $ | 890 | |||||||||||||||||||||||||||||||||||||||
(a)
| Three 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 | $ | 6,371 | $ | 217 | $ | 126 | $ | 6,714 | $ | 7 | $ | — | $ | 6,721 | |||||||||||||
| Intersegment revenues | 8 | 24 | — | 32 | 17 | (49 | ) | — | |||||||||||||||||||
| Total revenues | $ | 6,379 | $ | 241 | $ | 126 | $ | 6,746 | $ | 24 | $ | (49 | ) | $ | 6,721 | ||||||||||||
Segment income (loss)(a)(b) | $ | 1,381 | $ | (73 | ) | $ | 60 | $ | 1,368 | $ | (103 | ) | $ | — | $ | 1,265 | |||||||||||
| Less: Noncontrolling interests | 70 | ||||||||||||||||||||||||||
| Add: Preferred stock dividend | 39 | ||||||||||||||||||||||||||
| Net Income | $ | 1,234 | |||||||||||||||||||||||||
| Segment assets | $ | 138,142 | $ | 13,343 | $ | 6,541 | $ | 158,026 | $ | 3,387 | $ | (4 | ) | $ | 161,409 | ||||||||||||
| Three 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 | $ | 6,569 | $ | 225 | $ | 138 | $ | 6,932 | $ | 8 | $ | — | $ | 6,940 | |||||||||||||
| Intersegment revenues | 8 | 24 | — | 32 | 17 | (49 | ) | — | |||||||||||||||||||
| Total revenues | $ | 6,577 | $ | 249 | $ | 138 | $ | 6,964 | $ | 25 | $ | (49 | ) | $ | 6,940 | ||||||||||||
Segment income (loss)(c) | $ | 1,385 | $ | 26 | $ | 40 | $ | 1,451 | $ | (124 | ) | $ | — | $ | 1,327 | ||||||||||||
| Less: Noncontrolling interests | 19 | ||||||||||||||||||||||||||
| Add: Preferred stock dividend | 15 | ||||||||||||||||||||||||||
| Net Income | $ | 1,323 | |||||||||||||||||||||||||
| 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 | |||||||||||||||||||||||||
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 March 31, 2021 | |||||||||||||||||||||||||||||||||||
| Electric | Gas | Total | |||||||||||||||||||||||||||||||||
| Utilities and | Utilities and | Reportable | |||||||||||||||||||||||||||||||||
| (in millions) | Infrastructure | Infrastructure | Segments | Other | Eliminations | Total | |||||||||||||||||||||||||||||
| Total revenues | $ | 363 | $ | 169 | $ | 532 | $ | — | $ | — | $ | 532 | |||||||||||||||||||||||
| Segment income/Net income | $ | 50 | $ | 43 | $ | 93 | $ | (2) | $ | — | $ | 91 | |||||||||||||||||||||||
| Segment assets | $ | 6,544 | $ | 3,575 | $ | 10,119 | $ | 29 | $ | (7) | $ | 10,141 | |||||||||||||||||||||||
| Three Months Ended March 31, 2020 | |||||||||||||||||||||||||||||||||||
| Electric | Gas | Total | |||||||||||||||||||||||||||||||||
| Utilities and | Utilities and | Reportable | |||||||||||||||||||||||||||||||||
| (in millions) | Infrastructure | Infrastructure | Segments | Other | Total | ||||||||||||||||||||||||||||||
| Total revenues | $ | 346 | $ | 152 | $ | 498 | $ | — | $ | 498 | |||||||||||||||||||||||||
| Segment income/Net income | $ | 30 | $ | 36 | $ | 66 | $ | (1) | $ | 65 | |||||||||||||||||||||||||
45
| Three Months Ended September 30, 2020 | |||||||||||||||||||||||
| Electric | Gas | Total | |||||||||||||||||||||
| Utilities and | Utilities and | Reportable | |||||||||||||||||||||
| (in millions) | Infrastructure | Infrastructure | Segments | Other | Eliminations | Total | |||||||||||||||||
| Total revenues | $ | 394 | $ | 79 | $ | 473 | $ | — | $ | — | $ | 473 | |||||||||||
| Segment income/Net income | $ | 63 | $ | 9 | $ | 72 | $ | (2 | ) | $ | — | $ | 70 | ||||||||||
| Segment assets | $ | 6,448 | $ | 3,297 | $ | 9,745 | $ | 27 | $ | (23 | ) | $ | 9,749 | ||||||||||
| FINANCIAL STATEMENTS | REGULATORY MATTERS | ||||
| Three Months Ended September 30, 2019 | |||||||||||||||||||
| Electric | Gas | Total | |||||||||||||||||
| Utilities and | Utilities and | Reportable | |||||||||||||||||
| (in millions) | Infrastructure | Infrastructure | Segments | Other | Total | ||||||||||||||
| Total revenues | $ | 408 | $ | 81 | $ | 489 | $ | — | $ | 489 | |||||||||
| Segment income/Net income | $ | 62 | $ | 13 | $ | 75 | $ | (1 | ) | $ | 74 | ||||||||
| 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 | ||||||||
| Nine Months Ended September 30, 2019 | |||||||||||||||||||
| Electric | Gas | Total | |||||||||||||||||
| Utilities and | Utilities and | Reportable | |||||||||||||||||
| (in millions) | Infrastructure | Infrastructure | Segments | Other | Total | ||||||||||||||
| Total revenues | $ | 1,099 | $ | 354 | $ | 1,453 | $ | — | $ | 1,453 | |||||||||
| Segment income/Net (loss) income | $ | 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
2021 Coal Ash Settlement
On January 22, 2021, Duke Energy Carolinas and Duke Energy Progress entered into the Coal Combustion Residuals Settlement Agreement (the “CCR Settlement Agreement”) with the North Carolina Public Staff (Public Staff), the North Carolina Attorney General’s Office and the Sierra Club (collectively, the "Settling Parties"), which was filed with the NCUC on January 25, 2021. The CCR Settlement Agreement resolves all coal ash prudence and cost recovery issues in connection with 2019 rate cases filed by Duke Energy Carolinas and Duke Energy Progress with the NCUC, as well as the equitable sharing issue on remand from the 2017 Duke Energy Carolinas and Duke Energy Progress North Carolina rate cases as a result of the December 11, 2020, North Carolina Supreme Court opinion. The settlement also provides clarity on coal ash cost recovery in North Carolina for Duke Energy Carolinas and Duke Energy Progress through January 2030 and February 2030 (the "Term"), respectively.
Duke Energy Carolinas and Duke Energy Progress agreed not to seek recovery of approximately $1 billion of systemwide deferred coal ash expenditures, but will retain the ability to earn a debt and equity return during the amortization period, which shall be five years in the pending 2019 North Carolina rate cases and will be set by the NCUC in future rate case proceedings. The equity return and the amortization period on deferred coal ash costs under the 2017 Duke Energy Carolinas and Duke Energy Progress North Carolina rate cases will remain unaffected. The equity return on deferred coal ash costs under the 2019 North Carolina rate cases and future rate cases in North Carolina will be set at 150 basis points lower than the authorized return on equity (ROE) then in effect, with a capital structure composed of 48% debt and 52% equity. Duke Energy Carolinas and Duke Energy Progress retain the ability to earn a full WACC return during the deferral period, which is the period from when costs are incurred until they are recovered in rates.
The Settling Parties agreed that execution by Duke Energy Carolinas and Duke Energy Progress of a settlement agreement between themselves and the NCDEQ dated December 31, 2019, (the “DEQ Settlement”) and the coal ash management plans included therein or subsequently approved by DEQ are reasonable and prudent. The Settling Parties retain the right to challenge the reasonableness and prudence of actions taken by Duke Energy Carolinas and Duke Energy Progress and costs incurred to implement the scope of work agreed upon in the DEQ Settlement, after February 1, 2020, and March 1, 2020, for Duke Energy Carolinas and Duke Energy Progress, respectively. The Settling Parties further agreed to waive rights through the Term to challenge the reasonableness or prudence of Duke Energy Carolinas’ and Duke Energy Progress’ historical coal ash management practices, and to waive the right to assert any arguments that future coal ash costs, including financing costs, shall be shared between either company and customers through equitable sharing or any other rate base or return adjustment that shares the revenue requirement burden of coal ash costs not otherwise disallowed due to imprudence.
The Settling Parties agreed to a sharing arrangement for future coal ash insurance litigation proceeds between Duke Energy Carolinas and Duke Energy Progress and North Carolina customers, if achieved.
On January 29, 2021, Duke Energy Carolinas and Duke Energy Progress filed joint motions with the Settling Parties seeking approval of the CCR Settlement Agreement, along with supporting testimony and exhibits from Duke Energy Carolinas and Duke Energy Progress. On February 5, 2021, the Public Staff filed testimony and exhibits supporting the CCR Settlement Agreement.
As a result of the CCR Settlement Agreement, Duke Energy Carolinas and Duke Energy Progress recorded a pretax charge of approximately $454 million and $494 million, respectively, in the fourth quarter of 2020 to Impairment charges and a reversal of approximately $50 million and $102 million, respectively, to Regulated electric operating revenues on the respective Consolidated Statements of Operations.
The Coal Ash Settlement was approved without modification in the NCUC Orders in the 2019 rate cases on March 31, 2021, and April 16, 2021, for Duke Energy Carolinas and Duke Energy Progress, respectively.
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 the costs of each utility's 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. On January 27, 2021, Duke Energy Carolinas, 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 accounting issues, including agreement to support an 18- to 20-year bond period. The total revenue requirement over a proposed 20-year bond period for the storm recovery charges is approximately $287 million for Duke Energy Carolinas and $920 million for Duke Energy Progress. A remote evidentiary hearing ended on January 29, 2021, and on February 1, 2021, the NCUC granted a motion by Duke Energy Carolinas and Duke Energy Progress for a temporary 30-day waiver of the 135-day time frame for the NCUC to issue orders on the joint petition, extending the deadline for the NCUC to issue an order to May 10, 2021. In the NCUC Orders in the 2019 rate cases on March 31, 2021, and April 16, 2021, for Duke Energy Carolinas and Duke Energy Progress, respectively, the reasonableness and prudence of the deferred storm costs was approved. Duke Energy Carolinas and Duke Energy Progress cannot predict the outcome of this matter.
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| FINANCIAL STATEMENTS | REGULATORY MATTERS | ||||
COVID-19 Filings
North Carolina
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 commentsComments on the joint petition towere filed on November 5, 2020, and reply comments towere filed on November 30, 2020. Duke Energy Carolinas and Duke Energy Progress cannot predict the outcome of this matter.
South Carolina
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 equityan ROE 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.
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 theThe North Carolina Supreme Court requesting the court consolidate the Duke Energy Carolinas and Duke Energy 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 motion to consolidateconsolidated the Duke Energy Carolinas and Duke Energy Progress appeals. Appellant briefs were filed on April 26, 2019. The Appellee response briefs were filed on September 25, 2019. Oral arguments beforeOn December 11, 2020, the North Carolina Supreme Court were heldissued an opinion, which affirmed, in part, and reversed and remanded, in part, the NCUC’s decisions. In the Opinion, the court upheld the NCUC's decision to include coal ash costs in the cost of service, as well as the NCUC’s discretion to allow a return on Marchthe unamortized balance of coal ash costs. The court also remanded to the NCUC a single issue to consider the assessment of support for the Public Staff’s equitable sharing argument. In response to a NCUC order seeking comments on the proposed procedure on remand, on January 11, 2020.2021, Duke Energy Carolinas, cannot predictDuke Energy Progress, the outcome of this matter.
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:
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:
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 iswas based on and consistent with the base rate component of the Second Partial Settlement with the Public Staff and excludesexcluded 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.
47
| FINANCIAL STATEMENTS | REGULATORY MATTERS | ||||
The Duke Energy Carolinas evidentiary hearing concluded on September 18, 2020, and post-hearing filings were filedmade with the NCUC from all parties by November 4, 2020. On January 22, 2021, Duke Energy Carolinas expectsand Duke Energy Progress entered into the CCR Settlement Agreement with the Settling Parties, which was filed with the NCUC to issueon January 25, 2021.
On March 31, 2021, the NCUC issued an order on its netapproving the March 25, 2020, and July 31, 2020, partial settlements. The order includes approval of 1) an ROE of 9.6% based upon a capital structure of 52% equity and 48% debt; 2) deferral treatment of approximately $800 million of grid improvement projects with a return; 3) a flow back period of five years for unprotected federal EDIT; and 4) the reasonableness and prudence of $213 million of deferred storm costs, which were removed from the rate increase before the end of the first quarter of 2021.case and for which Duke Energy Carolinas cannot predictfiled a petition seeking securitization in October 2020. Additionally, the outcomeorder approved without modification the CCR Settlement Agreement.
The order denied Duke Energy Carolinas' proposal to shorten the remaining depreciable lives of this matter.certain Duke Energy Carolinas coal-fired generating units, indicating the appropriate proceeding for the review of generating plant retirements is Duke Energy Carolinas' integrated resource planning (IRP) proceeding.
On April 12, 2021, Duke Energy Carolinas filed its final revenue requirement with the NCUC, which results in a net increase of approximately $33 million. Revised customer rates are expected to become effective in June 2021.
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.
After hearings in March 2019, the PSCSC issued an order on May 21, 2019, which included a return on equityan ROE 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.
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 equityROE 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 bybefore the Supreme Court of South Carolina.Carolina have been scheduled to occur on May 26, 2021. Based on legal analysis and the filing of the appeal, Duke Energy Carolinas has not recorded an adjustment for its deferred coal ash costs.costs in this matter. 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 equityan ROE 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.
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| FINANCIAL STATEMENTS | REGULATORY MATTERS | ||||
The North Carolina Attorney General's Office filed a motion withSupreme Court consolidated the Duke Energy Carolinas and Duke Energy Progress appeals. On December 11, 2020, the North Carolina Supreme Court requestingissued an opinion, which affirmed, in part, and reversed and remanded, in part, the NCUC’s decisions. In the Opinion, the court consolidateupheld the NCUC's decision to include coal ash costs in the cost of service, as well as the NCUC’s discretion to allow a return on the unamortized balance of coal ash costs. The court also remanded to the NCUC a single issue to consider the assessment of support for the Public Staff’s equitable sharing argument. In response to a NCUC order seeking comments on the proposed procedure on remand, on January 11, 2021, Duke Energy Carolinas, Duke Energy Progress, the Public Staff, the North Carolina Attorney General, Sierra Club and Carolina Industrial Group for Fair Utility Rates II and III filed joint comments proposing that the NCUC not hold additional evidentiary hearings, but instead rely upon existing records in the 2017 North Carolina rate cases or in the alternative the records in the 2019 North Carolina rate cases, in deciding the issue on remand. On January 22, 2021, Duke Energy Progress and Duke Energy Carolinas appealsentered into the CCR Settlement Agreement with the Settling Parties, which was filed with the NCUC on January 25, 2021, and enter an order adoptingapproved by the parties’ proposed briefing schedule as set out in the filing. Appellant briefs were filedNCUC 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.16, 2021.
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 seekssought to defer and recover incremental Hurricane Dorian storm costs in this proceeding and requestsrequested rates be effective no later than September 1, 2020. As a result of the COVID-19 pandemic, on March 24, 2020, the NCUC suspended the procedural schedule and postponed the previously scheduled evidentiary hearing on this matter indefinitely. On April 7, 2020, the NCUC issued an order partially resuming the procedural schedule requiring intervenors to file direct testimony on April 13, 2020. Public Staff filed supplemental direct testimony on April 23, 2020. Duke Energy Progress filed rebuttal testimony on May 4, 2020.
On 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:
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:
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.
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 iswas based on and consistent with the terms of the base rate component of the settlement agreements with the Public Staff and excludesexcluded 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 seekssought 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 bewere filed with the NCUC from all parties by December 4, 2020. On January 22, 2021, Duke Energy Progress expectsand Duke Energy Carolinas entered into the CCR Settlement Agreement with the Settling Parties, which was filed with the NCUC to issueon January 25, 2021.
On April 16, 2021, the NCUC issued an order on its netapproving the June 2, 2020, and July 31, 2020, partial settlements. The order includes approval of 1) an ROE of 9.6% based upon a capital structure of 52% equity and 48% debt; 2) deferral treatment of approximately $400 million of grid improvement projects with a return; 3) a flow back period of five years for unprotected federal EDIT; and 4) the reasonableness and prudence of approximately $714 million of deferred storm costs, which were removed from the rate increase by the end of the first quarter of 2021.case and for which Duke Energy Progress cannot predictfiled a petition seeking securitization in October 2020. Additionally, the outcomeorder approved without modification the CCR Settlement Agreement.
The order denied Duke Energy Progress' proposal to shorten the remaining depreciable lives of this matter.certain Duke Energy Progress coal-fired generating units, indicating the appropriate proceeding for the review of generating plant retirements is Duke Energy Progress' IRP proceeding.
On April 26, 2021, Duke Energy Progress filed its final revenue requirement with the NCUC, which results in a net increase of approximately $178 million. Revised customer rates are expected to become effective in June 2021.
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,March 31, 2021, and December 31, 2019, respectively.2020. 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.For information on the securitization filing, see "2020 North Carolina Storm Securitization Filings." 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.
After hearings in April 2019, the PSCSC issued an order on May 21, 2019, which included a return on equityan ROE 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%.
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 equityROE 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 bybefore the Supreme Court of South Carolina.Carolina have been scheduled to occur on May 26, 2021. Based on legal analysis and the filing of the appeal, Duke Energy Progress has not recorded an adjustment for its deferred coal ash costs.costs in this matter. Duke Energy Progress cannot predict the outcome of this matter.
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 March 31, 2021 | |||||||||||||||||||||||||||||||||||
| Electric | Gas | Total | |||||||||||||||||||||||||||||||||
| Utilities and | Utilities and | Reportable | |||||||||||||||||||||||||||||||||
| (in millions) | Infrastructure | Infrastructure | Segments | Other | Eliminations | Total | |||||||||||||||||||||||||||||
| Total revenues | $ | 363 | $ | 169 | $ | 532 | $ | — | $ | — | $ | 532 | |||||||||||||||||||||||
| Segment income/Net income | $ | 50 | $ | 43 | $ | 93 | $ | (2) | $ | — | $ | 91 | |||||||||||||||||||||||
| Segment assets | $ | 6,544 | $ | 3,575 | $ | 10,119 | $ | 29 | $ | (7) | $ | 10,141 | |||||||||||||||||||||||
| Three Months Ended March 31, 2020 | |||||||||||||||||||||||||||||||||||
| Electric | Gas | Total | |||||||||||||||||||||||||||||||||
| Utilities and | Utilities and | Reportable | |||||||||||||||||||||||||||||||||
| (in millions) | Infrastructure | Infrastructure | Segments | Other | Total | ||||||||||||||||||||||||||||||
| Total revenues | $ | 346 | $ | 152 | $ | 498 | $ | — | $ | 498 | |||||||||||||||||||||||||
| Segment income/Net income | $ | 30 | $ | 36 | $ | 66 | $ | (1) | $ | 65 | |||||||||||||||||||||||||
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| FINANCIAL STATEMENTS | REGULATORY MATTERS | ||||
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 retired the 376-MW Asheville coal-fired plant on
2021 Coal Ash Settlement
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 Assets22, 2021, Duke Energy Carolinas and Other Noncurrent Assets on the Condensed Consolidated Balance Sheets.
Duke Energy Carolinas and Duke Energy Progress agreed not to seek recovery of approximately $1 billion of systemwide deferred coal ash expenditures, but will retain the ability to earn a debt and equity return during the amortization period, which shall be five years in the pending 2019 North Carolina rate cases and will be set by the NCUC in future rate case proceedings. The equity return and the amortization period on deferred coal ash costs under the 2017 Duke Energy Carolinas and Duke Energy Progress North Carolina rate cases will remain unaffected. The equity return on deferred coal ash costs under the 2019 North Carolina rate cases and future rate cases in North Carolina will be set at 150 basis points lower than the authorized return on equity (ROE) then in effect, with a capital structure composed of 48% debt and 52% equity. Duke Energy Carolinas and Duke Energy Progress retain the ability to earn a full WACC return during the deferral period, which is the period from when costs are incurred until they are recovered in rates.
The Settling Parties agreed that execution by Duke Energy Carolinas and Duke Energy Progress of a settlement agreement between themselves and the NCDEQ dated December 31, 2019, (the “DEQ Settlement”) and the coal ash management plans included therein or subsequently approved by DEQ are reasonable and prudent. The Settling Parties retain the right to challenge the reasonableness and prudence of actions taken by Duke Energy Carolinas and Duke Energy Progress and costs incurred to implement the scope of work agreed upon in the DEQ Settlement, after February 1, 2020, and March 1, 2020, for Duke Energy Carolinas and Duke Energy Progress, respectively. The Settling Parties further agreed to waive rights through the Term to challenge the reasonableness or prudence of Duke Energy Carolinas’ and Duke Energy Progress’ historical coal ash management practices, and to waive the right to assert any arguments that future coal ash costs, including financing costs, shall be shared between either company and customers through equitable sharing or any other rate base or return adjustment that shares the revenue requirement burden of coal ash costs not otherwise disallowed due to imprudence.
The Settling Parties agreed to a sharing arrangement for future coal ash insurance litigation proceeds between Duke Energy Carolinas and Duke Energy Progress and North Carolina customers, if achieved.
On January 29, 2021, Duke Energy Carolinas and Duke Energy Progress filed joint motions with the Settling Parties seeking approval of the CCR Settlement Agreement, along with supporting testimony and exhibits from Duke Energy Carolinas and Duke Energy Progress. On February 5, 2021, the Public Staff filed testimony and exhibits supporting the CCR Settlement Agreement.
As a result of the CCR Settlement Agreement, Duke Energy Carolinas and Duke Energy Progress recorded a pretax charge of approximately $454 million and $494 million, respectively, in the fourth quarter of 2020 to Impairment charges and a reversal of approximately $50 million and $102 million, respectively, to Regulated electric operating revenues on the respective Consolidated Statements of Operations.
The Coal Ash Settlement was approved without modification in the NCUC Orders in the 2019 rate cases on March 31, 2021, and April 5, 2020. 16, 2021, for Duke Energy Carolinas and Duke Energy Progress, respectively.
2020 North Carolina Storm Securitization Filings
On June 2,October 26, 2020, Duke Energy Carolinas and Duke Energy Progress filed a requestjoint 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 the costs of each utility's 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. On January 27, 2021, Duke Energy Carolinas, 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 accounting issues, including agreement to support an 18- to 20-year bond period. The total revenue requirement over a proposed 20-year bond period for the storm recovery charges is approximately $287 million for Duke Energy Carolinas and $920 million for Duke Energy Progress. A remote evidentiary hearing ended on January 29, 2021, and on February 1, 2021, the NCUC granted a motion by Duke Energy Carolinas and Duke Energy Progress for a temporary 30-day waiver of the 135-day time frame for the NCUC to issue orders on the joint petition, extending the deadline for the NCUC to issue an order to May 10, 2021. In the NCUC Orders in the 2019 rate cases on March 31, 2021, and April 16, 2021, for Duke Energy Carolinas and Duke Energy Progress, respectively, the reasonableness and prudence of the deferred storm costs was approved. Duke Energy Carolinas and Duke Energy Progress cannot predict the outcome of this matter.
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| FINANCIAL STATEMENTS | REGULATORY MATTERS | ||||
COVID-19 Filings
North Carolina
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. Comments on the joint petition were filed on November 5, 2020, and reply comments were filed on November 30, 2020. Duke Energy Carolinas and Duke Energy Progress cannot predict the outcome of this matter.
South Carolina
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 filed a 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 deferral of post-in-service costs incurred in connection withongoing months during the additionduration of the Asheville combined-cycle generating plant.COVID-19 pandemic. The petitiondeferral request did not include lost revenues. Updates on cost impacts were filed on September 30, 2020, and included financial impacts through the end of August 2020. On October 16, 2020, the South Carolina Office of Regulatory Staff (ORS) requested the PSCSC issuedelay taking formal action on the deferral request until the ORS and any intervenors complete discovery. The PSCSC issued an accounting order authorizing Duke Energy Progresson October 21, 2020, to defer post-in-service costs includinggrant additional time to complete discovery until January 20, 2021, and to establish a procedural schedule. Updates on cost impacts were filed on December 30, 2020, and included financial impacts through November 30, 2020. On January 15, 2021, the Asheville combined-cycle’s depreciation expense, property taxes, incremental O&MORS requested the PSCSC suspend the dates for the ORS report and carrying costs at WACCpublic hearing. The ORS conferred with the companies regarding the status of approximately $8 million annually.the docket, and the parties mutually agreed that recently enacted federal laws addressing COVID-19 aid and recovery should be studied before further action is taken in this docket. On June 17, 2020,January 27, 2021, the PSCSC voted to approvegrant the ORS request to suspend the virtual public hearing. The ORS filed its report on April 16, 2021. 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 Public Staff filed an Agreement and Stipulation of Partial Settlement resolving certain portions of the proceeding. Terms of the settlement included an ROE 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.
The North Carolina Attorney General and other parties separately filed Notices of Appeal to the North Carolina Supreme Court. The North Carolina Supreme Court consolidated the Duke Energy Carolinas and Duke Energy Progress appeals. On December 11, 2020, the North Carolina Supreme Court issued an opinion, which affirmed, in part, and reversed and remanded, in part, the NCUC’s decisions. In the Opinion, the court upheld the NCUC's decision to include coal ash costs in the cost of service, as well as the NCUC’s discretion to allow a return on the unamortized balance of coal ash costs. The court also remanded to the NCUC a single issue to consider the assessment of support for the Public Staff’s equitable sharing argument. In response to a NCUC order seeking comments on the proposed procedure on remand, on January 11, 2021, Duke Energy Carolinas, Duke Energy Progress, the Public Staff, the North Carolina Attorney General, Sierra Club and Carolina Industrial Group for Fair Utility Rates II and III filed joint comments proposing that the NCUC not hold additional evidentiary hearings, but instead rely upon existing records in the 2017 North Carolina rate cases, or in the alternative the records in the 2019 North Carolina rate cases, in deciding the issue on remand. On January 22, 2021, Duke Energy Carolinas and Duke Energy Progress entered into the CCR Settlement Agreement with the Settling Parties, which was filed with the NCUC on January 25, 2021, and approved by the NCUC on March 31, 2021.
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, subject to review and approval of the NCUC, resolving certain issues in the base rate proceeding. 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. On July 31, 2020, Duke Energy Carolinas and the Public Staff filed a Second Agreement and Stipulation of Partial Settlement (Second Partial Settlement), subject to review and approval of the NCUC, resolving certain remaining issues in the base rate proceeding. 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 was based on and consistent with the base rate component of the Second Partial Settlement and excluded the items to be litigated noted above. 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.
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| FINANCIAL STATEMENTS | REGULATORY MATTERS | ||||
The Duke Energy Carolinas evidentiary hearing concluded on September 18, 2020, and post-hearing filings were made with the NCUC from all parties by November 4, 2020. On January 22, 2021, Duke Energy Carolinas and Duke Energy Progress entered into the CCR Settlement Agreement with the Settling Parties, which was filed with the NCUC on January 25, 2021.
On March 31, 2021, the NCUC issued an order approving the March 25, 2020, and July 31, 2020, partial settlements. The order includes approval of 1) an ROE of 9.6% based upon a capital structure of 52% equity and 48% debt; 2) deferral treatment of approximately $800 million of grid improvement projects with a return; 3) a flow back period of five years for unprotected federal EDIT; and 4) the reasonableness and prudence of $213 million of deferred storm costs, which were removed from the rate case and for which Duke Energy Carolinas filed a petition and issuedseeking securitization in October 2020. Additionally, the order approved without modification the CCR Settlement Agreement.
The order denied Duke Energy Carolinas' proposal to shorten the remaining depreciable lives of certain Duke Energy Carolinas coal-fired generating units, indicating the appropriate proceeding for the review of generating plant retirements is Duke Energy Carolinas' integrated resource planning (IRP) proceeding.
On April 12, 2021, Duke Energy Carolinas filed its final revenue requirement with the NCUC, which results in a net increase of approximately $33 million. Revised customer rates are expected to become effective in June 2021.
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.
After hearings in March 2019, the PSCSC issued an order on May 21, 2019, which included an ROE 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.
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, ROE 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 with the Supreme Court of South Carolina. 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 before the Supreme Court of South Carolina have been scheduled to occur on May 26, 2021. Based on legal analysis and the filing of the appeal, Duke Energy Carolinas has not recorded an adjustment for its deferred coal ash costs in this matter. Duke Energy Carolinas cannot predict the outcome of this matter.
Duke Energy Progress
2017 North Carolina Rate Case
On October 8, 2018,June 1, 2017, Duke Energy Progress filed an application with the NCUC for a CPCN to construct the Hot Springs Microgrid Solar and Battery Storage Facility,rate increase for retail customers of approximately $477 million, which was approvedsubsequently 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 an ROE 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.
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| FINANCIAL STATEMENTS | REGULATORY MATTERS | ||||
The North Carolina Supreme Court consolidated the Duke Energy Carolinas and Duke Energy Progress appeals. On December 11, 2020, the North Carolina Supreme Court issued an opinion, which affirmed, in part, and reversed and remanded, in part, the NCUC’s decisions. In the Opinion, the court upheld the NCUC's decision to include coal ash costs in the cost of service, as well as the NCUC’s discretion to allow a return on the unamortized balance of coal ash costs. The court also remanded to the NCUC a single issue to consider the assessment of support for the Public Staff’s equitable sharing argument. In response to a NCUC order seeking comments on the proposed procedure on remand, on January 11, 2021, Duke Energy Carolinas, Duke Energy Progress, the Public Staff, the North Carolina Attorney General, Sierra Club and Carolina Industrial Group for Fair Utility Rates II and III filed joint comments proposing that the NCUC not hold additional evidentiary hearings, but instead rely upon existing records in the 2017 North Carolina rate cases or in the alternative the records in the 2019 North Carolina rate cases, in deciding the issue on remand. On January 22, 2021, Duke Energy Progress and Duke Energy Carolinas entered into the CCR Settlement Agreement with certain conditions on May 10, 2019. A hearing to updatethe Settling Parties, which was filed with the NCUC on January 25, 2021, and approved by the status of the project was heldNCUC on March 5, 2020. Construction began in May 2020 with commercial operation expected to begin in OctoberApril 16, 2021.
2019 North Carolina Rate Case
On July 27, 2020,October 30, 2019, Duke Energy Progress filed an application with the NCUC for a CPCNnet 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 construct the Woodfin Solar Facility, a 5-MW solar generating facilityreturn to be constructed on a closed landfill in Buncombe County. The expert hearing is scheduled for November 18, 2020.
On July 16,June 2, 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 predictand the outcomePublic Staff filed an Agreement and Stipulation of this matter.
Partial Settlement, subject to review and approval of the NCUC, resolving certain issues in the base rate proceeding. On October 16,July 27, 2020, North Carolina Electric Membership Corporation (NCEMC) filed a complaint at the FERC against Duke Energy Progress pursuant to Section 206 offiled a joint motion with Duke Energy Carolinas and the FPA. The complaint allegesPublic Staff notifying the commission that the ROE component inparties reached a joint partial settlement with the formula rate contained within the Power Supply and Coordination Agreement (PSCA) between NCEMC andPublic Staff. On July 31, 2020, Duke Energy Progress is unjust and unreasonable.the Public Staff filed a Second Agreement and Stipulation of Partial Settlement, subject to review and approval of the NCUC, resolving certain remaining issues in the base rate proceeding. The PSCA's return on equity is 11% as appliedremaining items litigated at hearing included recovery of deferred coal ash compliance costs that are subject to the Production Capacity Rate for the requirements service provided byasset retirement obligation accounting and implementation of new depreciation rates.
On August 7, 2020, Duke Energy Progress. Under FPA Section 206,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 earliest refund effective date thattemporary rates was based on and consistent with the FERC can establish is the dateterms of the filingbase rate component of the complaint.settlement agreements with the Public Staff and excluded items to be litigated noted above. Duke Energy Progress will respondnot 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 sought 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 complaint and believesNCUC's determination of the 11% ROE is 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 were filed with the NCUC from all parties by December 4, 2020. On January 22, 2021, Duke Energy Progress and Duke Energy Carolinas entered into the CCR Settlement Agreement with the Settling Parties, which was filed with the NCUC on January 25, 2021.
On April 16, 2021, the NCUC issued an order approving the June 2, 2020, and July 31, 2020, partial settlements. The order includes approval of 1) an ROE of 9.6% based upon a capital structure of 52% equity and 48% debt; 2) deferral treatment of approximately $400 million of grid improvement projects with a return; 3) a flow back period of five years for unprotected federal EDIT; and 4) the reasonableness and prudence of approximately $714 million of deferred storm costs, which were removed from the rate case and for which Duke Energy Progress filed a petition seeking securitization in October 2020. Additionally, the order approved without modification the CCR Settlement Agreement.
The order denied Duke Energy Progress' proposal to shorten the remaining depreciable lives of certain Duke Energy Progress coal-fired generating units, indicating the appropriate proceeding for the review of generating plant retirements is Duke Energy Progress' IRP proceeding.
On April 26, 2021, Duke Energy Progress filed its final revenue requirement with the NCUC, which results in a net increase of approximately $178 million. Revised customer rates are expected to become effective in June 2021.
Hurricane Dorian
Hurricane Dorian reached the Carolinas in September 2019 as a Category 2 hurricane making landfall within Duke Energy Progress’ service provided underterritory. Total estimated incremental operation and maintenance expenses incurred to repair and restore the contract.system are approximately $168 million with an additional $4 million in capital investments made for restoration efforts. Approximately $145 million of the operation and maintenance expenses are deferred in Regulatory assets within Other Noncurrent Assets on the Condensed Consolidated Balance Sheets as of March 31, 2021, and December 31, 2020. 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. For information on the securitization filing, see "2020 North Carolina Storm Securitization Filings." 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 FloridaProgress filed an application with the PSCSC for a rate increase for retail customers of approximately $59 million.
•Denial of recovery of $65 million of certain coal ash costs deemed to declare a public health emergency in Floridabe related to the COVID-19 pandemic. The governor also issued an Executive Order on March 9, 2020,Coal Ash Act and incremental to the federal CCR rule;
•Approval of a $17 million decrease to base rates to reflect the change in which he declared a state of emergency in Florida and directedongoing tax expense, primarily 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 customersreduction in the monthfederal income tax rate from 35% to 21%;
•Approval of May 2020. Typically,a $12 million decrease through 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.
•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 November 22,May 31, 2019, Duke Energy FloridaProgress filed a petitionPetition for approvalRehearing or Reconsideration of actual retail recoverable storm restoration costs related to Hurricane Michaelthat 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 amount of $191 million plus interest.proceeding. On MayJune 19, 2020,2019, the PSCSC issued a Directive denying 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 totalProgress' request to recover $188 million actual retail recoverable storm restorationrehear or reconsider the commission's rulings on certain issues presented in the proceeding including coal ash remediation and disposal costs, plus interest.ROE 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 Establishing Procedureorder detailing the commission's decision in the Directive was issued on January 30,October 18, 2019. Duke Energy Progress filed a notice of appeal on November 15, 2019, with the Supreme Court of South Carolina. Initial briefs were filed on April 21, 2020. Response briefs were filed on July 6, 2020, and hearings arereply briefs were filed on August 11, 2020. Oral arguments before the Supreme Court of South Carolina have been scheduled to begin December 8, 2020. Approximately $119 millionoccur on May 26, 2021. Based on legal analysis and $204 millionthe filing 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.appeal, Duke Energy FloridaProgress has not recorded an adjustment for its deferred coal ash costs in this matter. Duke Energy Progress cannot predict the outcome of this matter.
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 March 31, 2021 | |||||||||||||||||||||||||||||||||||
| Electric | Gas | Total | |||||||||||||||||||||||||||||||||
| Utilities and | Utilities and | Reportable | |||||||||||||||||||||||||||||||||
| (in millions) | Infrastructure | Infrastructure | Segments | Other | Eliminations | Total | |||||||||||||||||||||||||||||
| Total revenues | $ | 363 | $ | 169 | $ | 532 | $ | — | $ | — | $ | 532 | |||||||||||||||||||||||
| Segment income/Net income | $ | 50 | $ | 43 | $ | 93 | $ | (2) | $ | — | $ | 91 | |||||||||||||||||||||||
| Segment assets | $ | 6,544 | $ | 3,575 | $ | 10,119 | $ | 29 | $ | (7) | $ | 10,141 | |||||||||||||||||||||||
| Three Months Ended March 31, 2020 | |||||||||||||||||||||||||||||||||||
| Electric | Gas | Total | |||||||||||||||||||||||||||||||||
| Utilities and | Utilities and | Reportable | |||||||||||||||||||||||||||||||||
| (in millions) | Infrastructure | Infrastructure | Segments | Other | Total | ||||||||||||||||||||||||||||||
| Total revenues | $ | 346 | $ | 152 | $ | 498 | $ | — | $ | 498 | |||||||||||||||||||||||||
| Segment income/Net income | $ | 30 | $ | 36 | $ | 66 | $ | (1) | $ | 65 | |||||||||||||||||||||||||
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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
2021 Coal Ash Settlement
On January 22, 2021, Duke Energy Carolinas and Duke Energy Progress entered into the Coal Combustion Residuals Settlement Agreement (the “CCR Settlement Agreement”) with the North Carolina Public Staff (Public Staff), the North Carolina Attorney General’s Office and the Sierra Club (collectively, the "Settling Parties"), which was filed with the NCUC on January 25, 2021. The CCR Settlement Agreement resolves all coal ash prudence and cost recovery issues in connection with 2019 rate cases filed by Duke Energy Carolinas and Duke Energy Progress with the NCUC, as well as the equitable sharing issue on remand from the 2017 Duke Energy Carolinas and Duke Energy Progress North Carolina rate cases as a result of the December 11, 2020, North Carolina Supreme Court opinion. The settlement also provides clarity on coal ash cost recovery in North Carolina for Duke Energy Carolinas and Duke Energy Progress through January 2030 and February 2030 (the "Term"), respectively.
Duke Energy Carolinas and Duke Energy Progress agreed not to seek recovery of approximately $1 billion of systemwide deferred coal ash expenditures, but will retain the ability to earn a debt and equity return during the amortization period, which shall be five years in the pending 2019 North Carolina rate cases and will be set by the NCUC in future rate case proceedings. The equity return and the amortization period on deferred coal ash costs under the 2017 Duke Energy Carolinas and Duke Energy Progress North Carolina rate cases will remain unaffected. The equity return on deferred coal ash costs under the 2019 North Carolina rate cases and future rate cases in North Carolina will be set at 150 basis points lower than the authorized return on equity (ROE) then in effect, with a capital structure composed of 48% debt and 52% equity. Duke Energy Carolinas and Duke Energy Progress retain the ability to earn a full WACC return during the deferral period, which is the period from when costs are incurred until they are recovered in rates.
The Settling Parties agreed that execution by Duke Energy Carolinas and Duke Energy Progress of a settlement agreement between themselves and the NCDEQ dated December 31, 2019, (the “DEQ Settlement”) and the coal ash management plans included therein or subsequently approved by DEQ are reasonable and prudent. The Settling Parties retain the right to challenge the reasonableness and prudence of actions taken by Duke Energy Carolinas and Duke Energy Progress and costs incurred to implement the scope of work agreed upon in the DEQ Settlement, after February 1, 2020, and March 1, 2020, for Duke Energy Carolinas and Duke Energy Progress, respectively. The Settling Parties further agreed to waive rights through the Term to challenge the reasonableness or prudence of Duke Energy Carolinas’ and Duke Energy Progress’ historical coal ash management practices, and to waive the right to assert any arguments that future coal ash costs, including financing costs, shall be shared between either company and customers through equitable sharing or any other rate base or return adjustment that shares the revenue requirement burden of coal ash costs not otherwise disallowed due to imprudence.
The Settling Parties agreed to a sharing arrangement for future coal ash insurance litigation proceeds between Duke Energy Carolinas and Duke Energy Progress and North Carolina customers, if achieved.
On January 29, 2021, Duke Energy Carolinas and Duke Energy Progress filed joint motions with the Settling Parties seeking approval of the CCR Settlement Agreement, along with supporting testimony and exhibits from Duke Energy Carolinas and Duke Energy Progress. On February 5, 2021, the Public Staff filed testimony and exhibits supporting the CCR Settlement Agreement.
As a result of the CCR Settlement Agreement, Duke Energy Carolinas and Duke Energy Progress recorded a pretax charge of approximately $454 million and $494 million, respectively, in the fourth quarter of 2020 to Impairment charges and a reversal of approximately $50 million and $102 million, respectively, to Regulated electric operating revenues on the respective Consolidated Statements of Operations.
The Coal Ash Settlement was approved without modification in the NCUC Orders in the 2019 rate cases on March 31, 2021, and April 16, 2021, for Duke Energy Carolinas and Duke Energy Progress, respectively.
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 the costs of each utility's 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. On January 27, 2021, Duke Energy Carolinas, 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 accounting issues, including agreement to support an 18- to 20-year bond period. The total revenue requirement over a proposed 20-year bond period for the storm recovery charges is approximately $287 million for Duke Energy Carolinas and $920 million for Duke Energy Progress. A remote evidentiary hearing ended on January 29, 2021, and on February 1, 2021, the NCUC granted a motion by Duke Energy Carolinas and Duke Energy Progress for a temporary 30-day waiver of the 135-day time frame for the NCUC to issue orders on the joint petition, extending the deadline for the NCUC to issue an order to May 10, 2021. In the NCUC Orders in the 2019 rate cases on March 31, 2021, and April 16, 2021, for Duke Energy Carolinas and Duke Energy Progress, respectively, the reasonableness and prudence of the deferred storm costs was approved. Duke Energy Carolinas and Duke Energy Progress cannot predict the outcome of this matter.
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COVID-19 Filings
North Carolina
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. Comments on the joint petition were filed on November 5, 2020, and reply comments were filed on November 30, 2020. Duke Energy Carolinas and Duke Energy Progress cannot predict the outcome of this matter.
South Carolina
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 filed a 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 request did not include lost revenues. Updates on cost impacts were filed on September 30, 2020, and included financial impacts through the end of August 2020. On October 16, 2020, the South Carolina Office of Regulatory Staff (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. Updates on cost impacts were filed on December 30, 2020, and included financial impacts through November 30, 2020. On January 15, 2021, the ORS requested the PSCSC suspend the dates for the ORS report and public hearing. The ORS conferred with the companies regarding the status of the docket, and the parties mutually agreed that recently enacted federal laws addressing COVID-19 aid and recovery should be studied before further action is taken in this docket. On January 27, 2021, the PSCSC voted to grant the ORS request to suspend the virtual public hearing. The ORS filed its report on April 16, 2021. 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 Public Staff filed an Agreement and Stipulation of Partial Settlement resolving certain portions of the proceeding. Terms of the settlement included an ROE 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.
The North Carolina Attorney General and other parties separately filed Notices of Appeal to the North Carolina Supreme Court. The North Carolina Supreme Court consolidated the Duke Energy Carolinas and Duke Energy Progress appeals. On December 11, 2020, the North Carolina Supreme Court issued an opinion, which affirmed, in part, and reversed and remanded, in part, the NCUC’s decisions. In the Opinion, the court upheld the NCUC's decision to include coal ash costs in the cost of service, as well as the NCUC’s discretion to allow a return on the unamortized balance of coal ash costs. The court also remanded to the NCUC a single issue to consider the assessment of support for the Public Staff’s equitable sharing argument. In response to a NCUC order seeking comments on the proposed procedure on remand, on January 11, 2021, Duke Energy Carolinas, Duke Energy Progress, the Public Staff, the North Carolina Attorney General, Sierra Club and Carolina Industrial Group for Fair Utility Rates II and III filed joint comments proposing that the NCUC not hold additional evidentiary hearings, but instead rely upon existing records in the 2017 North Carolina rate cases, or in the alternative the records in the 2019 North Carolina rate cases, in deciding the issue on remand. On January 22, 2021, Duke Energy Carolinas and Duke Energy Progress entered into the CCR Settlement Agreement with the Settling Parties, which was filed with the NCUC on January 25, 2021, and approved by the NCUC on March 31, 2021.
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 9,16, 2020, Governor Mike DeWine declared a state of emergency in the state of Ohio. The PUCONCUC issued an Order Postponing Hearing and Addressing Procedural Matters, which postponed the evidentiary hearing until further 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. by the commission.
On March 19,25, 2020, Duke Energy OhioCarolinas and the Public Staff filed an Agreement and Stipulation of Partial Settlement, subject to review and approval of the NCUC, resolving certain issues in the base rate proceeding. On July 24, 2020, Duke Energy Carolinas filed its compliance planrequest 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 PUCOPublic 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 sought waiverthe Public Staff filed a Second Agreement and Stipulation of several regulationsPartial Settlement (Second Partial Settlement), subject to minimize direct customer contact. review and approval of the NCUC, resolving certain remaining issues in the base rate proceeding. 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 MayAugust 4, 2020, Duke Energy OhioCarolinas 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 was based on and consistent with the base rate component of the Second Partial Settlement and excluded the items to be litigated noted above. 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.
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The Duke Energy Carolinas evidentiary hearing concluded on September 18, 2020, and post-hearing filings were made with the NCUC from all parties by November 4, 2020. On January 22, 2021, Duke Energy Carolinas and Duke Energy Progress entered into the CCR Settlement Agreement with the Settling Parties, which was filed with the NCUC on January 25, 2021.
On March 31, 2021, the NCUC issued an order approving the March 25, 2020, and July 31, 2020, partial settlements. The order includes approval of 1) an ROE of 9.6% based upon a capital structure of 52% equity and 48% debt; 2) deferral treatment of approximately $800 million of grid improvement projects with a return; 3) a flow back period of five years for unprotected federal EDIT; and 4) the reasonableness and prudence of $213 million of deferred storm costs, which were removed from the rate case and for which Duke Energy Carolinas filed a motion to suspend payment rules to enable proactive outreach to residential customers offering additional options for managing their utility bills. PUCO foundpetition seeking securitization in October 2020. Additionally, the order approved without modification the CCR Settlement Agreement.
The order denied Duke Energy Carolinas' proposal to addressshorten the stateremaining depreciable lives of emergency and the accompanying waivers reasonable and directedcertain Duke Energy Ohio to work withCarolinas coal-fired generating units, indicating the PUCO Staff on a comprehensive planappropriate proceeding for resumptionthe review 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.generating plant retirements is Duke Energy Carolinas' integrated resource planning (IRP) proceeding.
On April 16, 2020,12, 2021, Duke Energy OhioCarolinas filed its final revenue requirement with the NCUC, which results in a net increase of approximately $33 million. Revised customer rates are expected to become effective in June 2021.
2018 South Carolina Rate Case
On November 8, 2018, Duke Energy Carolinas filed an application with the PSCSC for a Reasonable Arrangement to temporarily lowerrate increase for retail customers of approximately $168 million.
After hearings in March 2019, the minimum bill for demand-metered commercialPSCSC issued an order on May 21, 2019, which included an ROE of 9.5% and industrial customers. On June 17, 2020,a capital structure of 53% equity and 47% debt. The order also included the PUCO deniedfollowing material components:
•Approval of cancellation of the Lee Nuclear Project, with Duke Energy Ohio's application forCarolinas 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 reasonable arrangement and ordered12-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 OhioCarolinas' WACC;
•Denial of recovery of $115 million of certain coal ash costs deemed to workbe 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 PUCO Staff on payment arrangementsAverage Rate Assumption Method (ARAM) for impacted nonresidential customers.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
As a result of COVID-19.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, ROE 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 with the Supreme Court of South Carolina. 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 before the Supreme Court of South Carolina have been scheduled to occur on May 26, 2021. Based on legal analysis and the filing of the appeal, Duke Energy Carolinas has not recorded an adjustment for its deferred coal ash costs in this matter. Duke Energy Carolinas cannot predict the outcome of this matter.
Duke Energy Kentucky COVID-19
2017 Electric Security Plan FilingNorth Carolina Rate Case
On June 1, 2017, Duke Energy OhioProgress 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 an ROE 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.
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The North Carolina Supreme Court consolidated the Duke Energy Carolinas and Duke Energy Progress appeals. On December 11, 2020, the North Carolina Supreme Court issued an opinion, which affirmed, in part, and reversed and remanded, in part, the NCUC’s decisions. In the Opinion, the court upheld the NCUC's decision to include coal ash costs in the cost of service, as well as the NCUC’s discretion to allow a return on the unamortized balance of coal ash costs. The court also remanded to the NCUC a single issue to consider the assessment of support for the Public Staff’s equitable sharing argument. In response to a NCUC order seeking comments on the proposed procedure on remand, on January 11, 2021, Duke Energy Carolinas, Duke Energy Progress, the Public Staff, the North Carolina Attorney General, Sierra Club and Carolina Industrial Group for Fair Utility Rates II and III filed joint comments proposing that the NCUC not hold additional evidentiary hearings, but instead rely upon existing records in the 2017 North Carolina rate cases or in the alternative the records in the 2019 North Carolina rate cases, in deciding the issue on remand. On January 22, 2021, Duke Energy Progress and Duke Energy Carolinas entered into the CCR Settlement Agreement with the Settling Parties, which was filed with the PUCONCUC on January 25, 2021, and approved by the NCUC on April 16, 2021.
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 sought to defer and recover incremental Hurricane Dorian storm costs in this proceeding and requested rates be effective no later than September 1, 2020. As a standard service offerresult of the COVID-19 pandemic, on March 24, 2020, the NCUC suspended the procedural schedule and postponed the previously scheduled evidentiary hearing on this matter indefinitely. On April 7, 2020, the NCUC issued an order partially resuming the procedural schedule requiring intervenors to file direct testimony on April 13, 2020. Public Staff filed supplemental direct testimony on April 23, 2020. Duke Energy Progress filed rebuttal testimony on May 4, 2020.
On June 2, 2020, Duke Energy Progress and the Public Staff filed an Agreement and Stipulation of Partial Settlement, subject to review and approval of the NCUC, resolving certain issues in the formbase rate proceeding. 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. On July 31, 2020, Duke Energy Progress and the Public Staff filed a Second Agreement and Stipulation of an ESP. Partial Settlement, subject to review and approval of the NCUC, resolving certain remaining issues in the base rate proceeding. 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.
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 was based on and consistent with the terms of the base rate component of the settlement agreements with the Public Staff and excluded 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 sought 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 were filed with the NCUC from all parties by December 4, 2020. On January 22, 2021, Duke Energy Progress and Duke Energy Carolinas entered into the CCR Settlement Agreement with the Settling Parties, which was filed with the NCUC on January 25, 2021.
On April 13, 2018, Duke Energy Ohio, along with certain intervenors, filed a Stipulation and Recommendation (Stipulation) with16, 2021, 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, 2018NCUC issued an order approving the Stipulation.June 2, 2020, and July 31, 2020, partial settlements. The case has been resolved.
The order denied Duke Energy Progress' proposal to shorten the remaining depreciable lives of certain Duke Energy Progress coal-fired generating units, indicating the appropriate proceeding for recoveringthe review of generating plant retirements is Duke Energy Progress' IRP proceeding.
On April 26, 2021, Duke Energy Progress filed its initial SmartGrid implementation endedfinal revenue requirement with the NCUC, which results in a net increase of approximately $178 million. Revised customer rates are expected to become effective in June 2021.
Hurricane Dorian
Hurricane Dorian reached the Carolinas in September 2019 as thesea 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 of the operation and maintenance expenses are deferred in Regulatory assets within Other Noncurrent Assets on the Condensed Consolidated Balance Sheets as of March 31, 2021, and December 31, 2020. A request for an accounting order to defer incremental storm costs would be recovered through base rates. The Stipulation also renewed 14 existing riders, some of which wereassociated with Hurricane Dorian was included in Duke Energy Ohio's ESP,Progress' October 30, 2019, general rate case filing with the NCUC. Terms of the June 2, 2020, Agreement and added twoStipulation 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. For information on the securitization filing, see "2020 North Carolina Storm Securitization Filings." Duke Energy Progress cannot predict the outcome of this matter.
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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 an ROE 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%.
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, ROE 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. 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 before the Supreme Court of South Carolina have been scheduled to occur on May 26, 2021. Based on legal analysis and the filing of the appeal, Duke Energy Progress has not recorded an adjustment for its deferred coal ash costs in this matter. Duke Energy Progress cannot predict the outcome of this matter.
Western Carolinas Modernization Plan
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 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 was held on November 18, 2020. The application was approved and a CPCN was granted by order of the NCUC on April 20, 2021.
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), alleging that the 11% stated ROE component contained in the demand formula rate in the Full Requirements Power Purchase Agreement (FRPPA) between NCEMPA and Duke Energy Progress 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 the consideration of variations to the base transmission-related ROE methodology developed in its Order No. 569-A, through the introduction of “specific facts and circumstances” involving issues specific to the case. The parties reached a settlement in principle at a settlement conference on January 7, 2021, and filed a settlement package on March 10, 2021. The FERC Trial Staff filed comments in support of the settlement. On April 19, 2021, the Settlement Judge certified the settlement to the FERC as an uncontested settlement and recommended approval by the FERC. Duke Energy Progress cannot predict the outcome of this matter.
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, alleging that the 11% stated ROE component in the demand formula rate in the Power Supply and Coordination Agreement between NCEMC and Duke Energy Progress is unjust and unreasonable. 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 responded to the complaint on November 20, 2020, seeking dismissal, demonstrating that the 11% ROE is just and reasonable for the service provided. The parties filed responsive pleadings and are awaiting an order from the FERC. Duke Energy Progress cannot predict the outcome of this matter.
Duke Energy Florida
2021 Settlement Agreement
On January 14, 2021, Duke Energy Florida filed a Settlement Agreement (the “Settlement”) with the FPSC. The parties to the Settlement include Duke Energy Florida, the Office of Public Counsel (OPC), the Florida Industrial Power Users Group, White Springs Agricultural Chemicals, Inc. d/b/a PCS Phosphate and NUCOR Steel Florida, Inc. (collectively, the “Parties”).
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Pursuant to the Settlement, the parties agreed to a base rate stay-out provision that expires year-end 2024; however, Duke Energy Florida is allowed an increase to its base rates of an incremental $67 million in 2022, $49 million in 2023 and $79 million in 2024, subject to adjustment in the event of tax reform during the years 2021, 2022 and 2023. The parties also agreed to a ROE band of 8.85% to 10.85% with a midpoint of 9.85% based on a capital structure of 53% equity and 47% debt. The ROE band can be increased by 25 basis points if the average 30-year U.S. Treasury rate increases 50 basis points or more over a six-month period in which case the midpoint ROE would rise from 9.85% to 10.10%. Duke Energy Florida will also be able to retain the DOE award of approximately $173 million for spent nuclear fuel, which is expected to be received in 2022, in order to mitigate customer rates over the term of the Settlement. In return, Duke Energy Florida will be able to recognize the $173 million into earnings from 2022 through 2024.
In addition to these terms, the Settlement contains provisions related to the accelerated depreciation of Crystal River Units 4-5, the approval of approximately $1 billion in future investments in new riders includingcost effective solar power, the Enhanced Service Reliability Riderimplementation of a new Electric Vehicle Charging Station Program and the deferral and recovery of costs in connection with the implementation of Duke Energy Florida’s Vision Florida program, which explores various emerging non-carbon emitting generation technology, distributed technologies and resiliency projects, among other things. The Settlement also resolves remaining unrecovered storm costs for hurricanes Dorian and Michael.
The FPSC approved the Settlement on May 4, 2021. Revised customer rates will be effective January 1, 2022, with subsequent base rate increases effective January 1, 2023, and January 1, 2024.
Storm Restoration Cost Recovery
Duke Energy Florida filed a petition with the FPSC on April 30, 2019, to recover vegetation management$223 million of estimated retail incremental storm restoration costs notfor 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. Approximately $42 million and $80 million of these costs are included in Regulatory assets within Current Assets and Other Noncurrent Assets on the Condensed Consolidated Balance Sheets as of March 31, 2021, and December 31, 2020, respectively.
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. The final actual amount of $145 million was filed on September 30, 2020. The Settlement was approved by the FPSC and all matters regarding storm cost recovery relating to Hurricane Michael and Hurricane Dorian are resolved.
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 upoffset by the revenue from the subscription fees. The credits will be included for recovery in the fuel cost recovery clause. A remote hearing was held on November 17, 2020, and post-hearing briefs were filed with the FPSC from all parties by December 9, 2020. The FPSC voted to $10 million per year (operationapprove the program on January 5, 2021, and maintenance only) andissued its written order on January 26, 2021.
On February 24, 2021, the Power Future Initiatives Rider (formerly PowerForward Rider) to recover costs incurred to enhanceLeague of United Latin American Citizens filed a notice of appeal of the customer experience and further transformFPSC’s Order approving the grid (operation and maintenance and capital). In additionClean Energy Connection to the changesFlorida Supreme Court. The FPSC approval order remains in revenue attributable toeffect pending the Stipulation,outcome of the appeal. Duke Energy Ohio’s capital-related riders, includingFlorida cannot predict 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 Courtoutcome 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.this matter.
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. The case has been resolved.House Bill 6
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, through a rider mechanism referred to as the Clean Air Fund (Rider CAF), of two2 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 beis through a non-bypassable rider that is to replacereplaced any existing recovery mechanism approved by the PUCO and will remain in place through 2030. As such, Duke Energy Ohio created the Legacy Generation Rider (Rider LGR) that replaced Rider PSR effective January 1, 2020. The amounts recoverable from customers will beare subject to an annual cap, with incremental costs that exceed such cap eligible for deferral and recovery subject to review. See Note 1211 for additional discussion of Duke Energy Ohio's ownership interest in OVEC. In July 2020, legislation to repeal HB 6House Bill 128 was proposed in both the Ohio Housesigned into law on March 31, 2021, which becomes effective June 30, 2021. The bill removes nuclear plant funding from Rider CAF and Senate, with subsequent hearings to receive witness testimony. Duke Energy Ohio cannot predict the outcome of this matter.does not impact OVEC cost recovery.
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South Carolina
Duke Energy Efficiency Cost Recovery
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 February 26,August 14, 2020, Duke Energy Carolinas and Duke Energy Progress filed a joint petition with the PUCO issuedPSCSC for approval of an accounting order directing utilities to wind down their demand-side management programs bydefer 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 request did not include lost revenues. Updates on cost impacts were filed on September 30, 2020, and included financial impacts through the end of August 2020. On October 16, 2020, the South Carolina Office of Regulatory Staff (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 terminategrant additional time to complete discovery until January 20, 2021, and to establish a procedural schedule. Updates on cost impacts were filed on December 30, 2020, and included financial impacts through November 30, 2020. On January 15, 2021, the programs by December 31, 2020,ORS requested the PSCSC suspend the dates for the ORS report and public hearing. The ORS conferred with the companies regarding the status of the docket, and the parties mutually agreed that recently enacted federal laws addressing COVID-19 aid and recovery should be studied before further action is taken in responsethis docket. On January 27, 2021, the PSCSC voted to changes in Ohio law that eliminated Ohio's energy efficiency mandates. On March 27, 2020,grant the ORS request to suspend the virtual public hearing. The ORS filed its report on April 16, 2021. Duke Energy Ohio filed an Application for Rehearing seeking clarification on the final true upCarolinas and reconciliation process after 2020. On April 22, 2020, the PUCO granted rehearing for further consideration.
Duke Energy Ohio is proposing to install a new natural gas pipeline (the Central Corridor Project) in its Ohio service territory to increase system reliability and enable the retirement of older infrastructure.Carolinas
2017 North Carolina Rate Case
On August 25, 2017, Duke Energy Ohio currently estimatesCarolinas filed an application with the pipeline developmentNCUC for a rate increase for retail customers of approximately $647 million. On February 28, 2018, Duke Energy Carolinas and the Public Staff filed an Agreement and Stipulation of Partial Settlement resolving certain portions of the proceeding. Terms of the settlement included an ROE 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.
The North Carolina Attorney General and other parties separately filed Notices of Appeal to the North Carolina Supreme Court. The North Carolina Supreme Court consolidated the Duke Energy Carolinas and Duke Energy Progress appeals. On December 11, 2020, the North Carolina Supreme Court issued an opinion, which affirmed, in part, and reversed and remanded, in part, the NCUC’s decisions. In the Opinion, the court upheld the NCUC's decision to include coal ash costs in the cost of service, as well as the NCUC’s discretion to allow a return on the unamortized balance of coal ash costs. The court also remanded to the NCUC a single issue to consider the assessment of support for the Public Staff’s equitable sharing argument. In response to a NCUC order seeking comments on the proposed procedure on remand, on January 11, 2021, Duke Energy Carolinas, Duke Energy Progress, the Public Staff, the North Carolina Attorney General, Sierra Club and construction activities will range from $163Carolina Industrial Group for Fair Utility Rates II and III filed joint comments proposing that the NCUC not hold additional evidentiary hearings, but instead rely upon existing records in the 2017 North Carolina rate cases, or in the alternative the records in the 2019 North Carolina rate cases, in deciding the issue on remand. On January 22, 2021, Duke Energy Carolinas and Duke Energy Progress entered into the CCR Settlement Agreement with the Settling Parties, which was filed with the NCUC on January 25, 2021, and approved by the NCUC on March 31, 2021.
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 $245 millionreturn to customers North Carolina and federal EDIT resulting from recent reductions in directcorporate 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, (excluding overheadsaccelerated coal plant depreciation and AFUDC)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 that constructionsafety as a result of the pipeline extension is expected to be completed beforeCOVID-19 pandemic, Duke Energy Carolinas filed a motion with the 2021/2022 winter season. AnNCUC 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, subject to review and approval of the NCUC, resolving certain issues in the base rate proceeding. 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 Certificatejoint 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 Environmental Compatibilitythe partial settlement. On July 31, 2020, Duke Energy Carolinas and the Public NeedStaff filed a Second Agreement and Stipulation of Partial Settlement (Second Partial Settlement), subject to review and approval of the NCUC, resolving certain remaining issues in the base rate proceeding. 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 was based on and consistent with the base rate component of the Second Partial Settlement and excluded the items to be litigated noted above. 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.
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The Duke Energy Carolinas evidentiary hearing concluded on September 18, 2020, and post-hearing filings were made with the NCUC from all parties by November 4, 2020. On January 22, 2021, Duke Energy Carolinas and Duke Energy Progress entered into the CCR Settlement Agreement with the Settling Parties, which was filed with the NCUC on January 25, 2021.
On March 31, 2021, the NCUC issued an order approving the March 25, 2020, and July 31, 2020, partial settlements. The order includes approval of 1) an ROE of 9.6% based upon a capital structure of 52% equity and 48% debt; 2) deferral treatment of approximately $800 million of grid improvement projects with a return; 3) a flow back period of five years for unprotected federal EDIT; and 4) the reasonableness and prudence of $213 million of deferred storm costs, which were removed from the rate case and for which Duke Energy Carolinas filed a petition seeking securitization in October 2020. Additionally, the order approved without modification the CCR Settlement Agreement.
The order denied Duke Energy Carolinas' proposal to shorten the remaining depreciable lives of certain Duke Energy Carolinas coal-fired generating units, indicating the appropriate proceeding for the review of generating plant retirements is Duke Energy Carolinas' integrated resource planning (IRP) proceeding.
On April 11,12, 2021, Duke Energy Carolinas filed its final revenue requirement with the NCUC, which results in a net increase of approximately $33 million. Revised customer rates are expected to become effective in June 2021.
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.
After hearings in March 2019, the PSCSC issued an order on May 21, 2019, which included an ROE 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.
As a result of the order, revised customer rates were effective June 1, 2019. BriefsOn 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, ROE 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 with the Supreme Court of South Carolina. Initial briefs were filed on May 13, 2019,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 June 10, 2019. On November 21, 2019, the Ohio Power Siting Board (OPSB) approved Duke Energy Ohio's application subject to 41 conditions on construction. Applications for rehearing were filed by several stakeholders on December 23, 2019, arguing that the OPSB approval was incorrect. On February 20, 2020, the OPSB denied the rehearing requests. On April 15, 2020, Joint Appellants filed a notice of appeal atAugust 11, 2020. Oral arguments before the Supreme Court of OhioSouth Carolina have been scheduled to occur on May 26, 2021. Based on legal analysis and the filing of the OPSB’s decision approvingappeal, 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 and on August 5, 2020, the Supreme Court of Ohio dismissed one of the Joint Appellants from the appeal. Joint Appellants filed their merit briefs on August 26, 2020. Appellee briefs were filed October 15, 2020. On September 22, 2020,Carolinas has not recorded an adjustment for its deferred coal ash costs in this matter. Duke Energy Ohio filed an application with OPSB for approval to amend the certificated pipeline route. Duke Energy OhioCarolinas 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 an ROE 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.
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On June 2, 2020, Duke Energy Progress and the Public Staff filed an Agreement and Stipulation of Partial Settlement, subject to review and approval of the NCUC, resolving certain issues in the base rate proceeding. 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. On July 31, 2020, Duke Energy Progress and the Public Staff filed a Second Agreement and Stipulation of Partial Settlement, subject to review and approval of the NCUC, resolving certain remaining issues in the base rate proceeding. The remaining items litigated at hearing included recovery of these deferred costs.coal ash compliance costs that are subject to asset retirement obligation accounting and implementation of new depreciation rates.
On August 7, 2020, Duke Energy Ohio has collected approximately $55 million in environmental remediation costs between 2009Progress 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 2012 through Rider MGP, which is currently suspended. Duke Energy Ohio has made annual applications with the PUCO to recover its incremental remediation coststemporary rates was based on and consistent with the PUCO’s directive interms of the base rate component of the settlement agreements with the Public Staff and excluded items to be litigated noted above. Duke Energy Ohio’s 2012 natural gasProgress will not begin the amortization or implementation of these items until a final determination is issued in the rate case. To date, the PUCO has not ruled oncase 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 Ohio’s annual applications forProgress also sought authorization to place a temporary decrement EDIT Rider into effect, concurrent with the calendar years 2013 through 2017. On September 28, 2018,temporary base rate change. The temporary rate changes are not final rates and remain subject to the staffNCUC's determination 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 recoveryjust and reasonable rates 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 collectedcharged by Duke Energy Ohio. AnProgress 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 were filed with the NCUC from all parties by December 4, 2020. On January 22, 2021, Duke Energy Progress and Duke Energy Carolinas entered into the CCR Settlement Agreement with the Settling Parties, which was filed with the NCUC on January 25, 2021.
On April 16, 2021, the NCUC issued an order approving the June 2, 2020, and July 31, 2020, partial settlements. The order includes approval of 1) an ROE of 9.6% based upon a capital structure of 52% equity and 48% debt; 2) deferral treatment of approximately $400 million of grid improvement projects with a return; 3) a flow back period of five years for unprotected federal EDIT; and 4) the reasonableness and prudence of approximately $714 million of deferred storm costs, which were removed from the rate case and for which Duke Energy Progress filed a petition seeking securitization in October 2020. Additionally, the order approved without modification the CCR Settlement Agreement.
The order denied Duke Energy Progress' proposal to shorten the remaining depreciable lives of certain Duke Energy Progress coal-fired generating units, indicating the appropriate proceeding for the review of generating plant retirements is Duke Energy Progress' IRP proceeding.
On April 26, 2021, Duke Energy Progress filed its final revenue requirement with the NCUC, which results in a net increase of approximately $178 million. Revised customer rates are expected to become effective in June 2021.
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 of the operation and maintenance expenses are deferred in Regulatory assets within Other Noncurrent Assets on the Condensed Consolidated Balance Sheets as of March 31, 2021, and December 31, 2020. 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. For information on the securitization filing, see "2020 North Carolina Storm Securitization Filings." Duke Energy Progress cannot predict the outcome of this matter.
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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 an ROE 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%.
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, ROE 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. Initial briefs were filed on January 17,April 21, 2020. Response briefs were filed on July 6, 2020, and reply briefs were filed on February 14,August 11, 2020. Oral arguments before the Supreme Court of South Carolina have been scheduled to occur on May 26, 2021. Based on legal analysis and the filing of the appeal, Duke Energy OhioProgress has not recorded an adjustment for its deferred coal ash costs in this matter. Duke Energy Progress cannot predict the outcome of this matter.
Western Carolinas Modernization Plan
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 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 was held on November 18, 2020. The application was approved and a CPCN was granted by order of the NCUC on April 20, 2021.
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), alleging that the 11% stated ROE component contained in the demand formula rate in the Full Requirements Power Purchase Agreement (FRPPA) between NCEMPA and Duke Energy Progress 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 the consideration of variations to the base transmission-related ROE methodology developed in its Order No. 569-A, through the introduction of “specific facts and circumstances” involving issues specific to the case. The parties reached a settlement in principle at a settlement conference on January 7, 2021, and filed a settlement package on March 10, 2021. The FERC Trial Staff filed comments in support of the settlement. On April 19, 2021, the Settlement Judge certified the settlement to the FERC as an uncontested settlement and recommended approval by the FERC. Duke Energy Progress cannot predict the outcome of this matter.
On March 31,October 16, 2020, North Carolina Electric Membership Corporation (NCEMC) filed a complaint at the FERC against Duke Energy Ohio filed its annual applicationProgress pursuant to recover incremental remediation expenseSection 206 of the FPA, alleging that the 11% stated ROE component in the demand formula rate in the Power Supply and Coordination Agreement between NCEMC and Duke Energy Progress is unjust and unreasonable. 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 responded to the complaint on November 20, 2020, seeking dismissal, demonstrating that the 11% ROE is just and reasonable for the calendar year 2019 seeking recovery of approximately $39 million in remediation costs incurred during 2019. On July 23, 2020,service provided. The parties filed responsive pleadings and are awaiting an order from 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 costs and attorney fees, should be reimbursed to customers and not be held byFERC. Duke Energy Ohio until all investigation and remediation is complete. Duke Energy Ohio filed comments in response to the staff report on August 21, 2020. Duke Energy OhioProgress cannot predict the outcome of this matter.
Duke Energy Florida
2021 Settlement Agreement
On January 14, 2021, Duke Energy Florida filed a Settlement Agreement (the “Settlement”) with the FPSC. The 2012 PUCOparties to the Settlement include Duke Energy Florida, the Office of Public Counsel (OPC), the Florida Industrial Power Users Group, White Springs Agricultural Chemicals, Inc. d/b/a PCS Phosphate and NUCOR Steel Florida, Inc. (collectively, the “Parties”).
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Pursuant to the Settlement, the parties agreed to a base rate stay-out provision that expires year-end 2024; however, Duke Energy Florida is allowed an increase to its base rates of an incremental $67 million in 2022, $49 million in 2023 and $79 million in 2024, subject to adjustment in the event of tax reform during the years 2021, 2022 and 2023. The parties also agreed to a ROE band of 8.85% to 10.85% with a midpoint of 9.85% based on a capital structure of 53% equity and 47% debt. The ROE band can be increased by 25 basis points if the average 30-year U.S. Treasury rate increases 50 basis points or more over a six-month period in which case the midpoint ROE would rise from 9.85% to 10.10%. Duke Energy Florida will also be able to retain the DOE award of approximately $173 million for spent nuclear fuel, which is expected to be received in 2022, in order also contained conditional deadlines for completingto mitigate customer rates over the MGP environmental investigationterm of the Settlement. In return, Duke Energy Florida will be able to recognize the $173 million into earnings from 2022 through 2024.
In addition to these terms, the Settlement contains provisions related to the accelerated depreciation of Crystal River Units 4-5, the approval of approximately $1 billion in future investments in new cost effective solar power, the implementation of a new Electric Vehicle Charging Station Program and the deferral and recovery of remediation costs atin connection with the MGP sites. Subsequentimplementation of Duke Energy Florida’s Vision Florida program, which explores various emerging non-carbon emitting generation technology, distributed technologies and resiliency projects, among other things. The Settlement also resolves remaining unrecovered storm costs for hurricanes Dorian and Michael.
The FPSC approved the Settlement on May 4, 2021. Revised customer rates will be effective January 1, 2022, with subsequent base rate increases effective January 1, 2023, and January 1, 2024.
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 order,provisions in the deadline was extended2017 Settlement, and the FPSC approved the petition on June 11, 2019. The FPSC also approved allowing Duke Energy Florida to December 31, 2019.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 May 10,November 22, 2019, Duke Energy OhioFlorida filed an application requesting a continuationpetition for approval of its existing deferral authority for MGP remediationactual 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. Approximately $42 million and investigation that must occur after$80 million of these costs are included in Regulatory assets within Current Assets and Other Noncurrent Assets on the Condensed Consolidated Balance Sheets as of March 31, 2021, and December 31, 2019. 2020, respectively.
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. The final actual amount of $145 million was filed on September 30, 2020. The Settlement was approved by the FPSC and all matters regarding storm cost recovery relating to Hurricane Michael and Hurricane Dorian are resolved.
Clean Energy Connection
On September 13, 2019, intervenor commentsJuly 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 remote hearing was held on November 17, 2020, and post-hearing briefs were filed opposingwith the FPSC from all parties by December 9, 2020. The FPSC voted to approve the program on January 5, 2021, and issued its written order on January 26, 2021.
On February 24, 2021, the League of United Latin American Citizens filed a notice of appeal of the FPSC’s Order approving the Clean Energy Connection to the Florida Supreme Court. The FPSC approval order remains in effect pending the outcome of the appeal. Duke Energy Ohio's request for continuation of existing deferral authority and on October 2, 2019, Duke Energy Ohio filed reply comments. Duke Energy OhioFlorida cannot predict the outcome of this matter.
Duke Energy IndianaOhio
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South Carolina
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 Public Staff filed an Agreement and Stipulation of Partial Settlement resolving certain portions of the proceeding. Terms of the settlement included an ROE 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.
The North Carolina Attorney General and other parties separately filed Notices of Appeal to the North Carolina Supreme Court. The North Carolina Supreme Court consolidated the Duke Energy Carolinas and Duke Energy Progress appeals. On December 11, 2020, the North Carolina Supreme Court issued an opinion, which affirmed, in part, and reversed and remanded, in part, the NCUC’s decisions. In the Opinion, the court upheld the NCUC's decision to include coal ash costs in the cost of service, as well as the NCUC’s discretion to allow a return on the unamortized balance of coal ash costs. The court also remanded to the NCUC a single issue to consider the assessment of support for the Public Staff’s equitable sharing argument. In response to a NCUC order seeking comments on the proposed procedure on remand, on January 11, 2021, Duke Energy Carolinas, Duke Energy Progress, the Public Staff, the North Carolina Attorney General, Sierra Club and Carolina Industrial Group for Fair Utility Rates II and III filed joint comments proposing that the NCUC not hold additional evidentiary hearings, but instead rely upon existing records in the 2017 North Carolina rate cases, or in the alternative the records in the 2019 North Carolina rate cases, in deciding the issue on remand. On January 22, 2021, Duke Energy Carolinas and Duke Energy Progress entered into the CCR Settlement Agreement with the Settling Parties, which was filed with the NCUC on January 25, 2021, and approved by the NCUC on March 31, 2021.
2019 North Carolina Rate Case
On September 30, 2020, Piedmont2019, Duke Energy Carolinas filed an update on their plannedapplication 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 normal operations duringcustomers 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. Normal billing practices resumed as of Octoberprevious 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, and service disconnections for nonpayment resumed2020. The NCUC established a procedural schedule with an evidentiary hearing to begin on November 4,March 23, 2020. Customers were notified of the resumption of normal billing practices, the option of payment arrangements and where to find assistance, if necessary.
On March 12,16, 2020, Governor Bill Lee issued Executive Order No. 14 declaringin consideration of public health and safety as a state of emergency due to the COVID-19 pandemic. In an effort to help mitigate the financial impactsresult of the COVID-19 pandemic, on their customers,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 20,16, 2020, Piedmont filed a request with the TPUC seeking authorization to waive, effective March 21, 2020: (1) any late payment charges incurred by a residential or nonresidential customer; (2) the application of fees for checks returned for insufficient funds for residential and nonresidential customers; and (3) the reconnection charge when a residential or nonresidential customer seeks to have service restored for those customers whose service was recently disconnected for nonpayment and to work with customers regarding the other requirements to restore service, including re-establishment of credit. The TPUC granted Piedmont’s request by Order issued March 31,2020. The Order also stated that customers were not relieved of their obligation to pay for utility services received.
On March 25, 2020, Duke Energy Carolinas and the Public Staff filed an Agreement and Stipulation of DisconnectionsPartial Settlement, subject to review and approval of Servicethe NCUC, resolving certain issues in the base rate proceeding. On July 24, 2020, Duke Energy Carolinas filed its request for Lackapproval of Paymentits notice to customers required to implement temporary rates. On July 27, 2020, Duke Energy Carolinas filed a joint motion with Conditions, effectiveDuke 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. On July 31, 2020, Duke Energy Carolinas and the Public Staff filed a Second Agreement and Stipulation of Partial Settlement (Second Partial Settlement), subject to review and approval of the NCUC, resolving certain remaining issues in the base rate proceeding. 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 29,4, 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 conditions relaterevenue requirement to requiredbe recovered, subject to refund, through the temporary rates was based on and consistent with the base rate component of the Second Partial Settlement and excluded the items to be litigated noted above. 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.
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The Duke Energy Carolinas evidentiary hearing concluded on September 18, 2020, and post-hearing filings were made with the NCUC from all parties by November 4, 2020. On January 22, 2021, Duke Energy Carolinas and Duke Energy Progress entered into the CCR Settlement Agreement with the Settling Parties, which was filed with the NCUC on January 25, 2021.
On March 31, 2021, the NCUC issued an order approving the March 25, 2020, and July 31, 2020, partial settlements. The order includes approval of 1) an ROE of 9.6% based upon a capital structure of 52% equity and 48% debt; 2) deferral treatment of approximately $800 million of grid improvement projects with a return; 3) a flow back period of five years for unprotected federal EDIT; and 4) the reasonableness and prudence of $213 million of deferred storm costs, which were removed from the rate case and for which Duke Energy Carolinas filed a petition seeking securitization in October 2020. Additionally, the order approved without modification the CCR Settlement Agreement.
The order denied Duke Energy Carolinas' proposal to shorten the remaining depreciable lives of certain Duke Energy Carolinas coal-fired generating units, indicating the appropriate proceeding for the review of generating plant retirements is Duke Energy Carolinas' integrated resource planning (IRP) proceeding.
On April 12, 2021, Duke Energy Carolinas filed its final revenue requirement with the NCUC, which results in a net increase of approximately $33 million. Revised customer communications, payment plan optionsrates are expected to become effective in June 2021.
2018 South Carolina Rate Case
On November 8, 2018, Duke Energy Carolinas filed an application with the PSCSC for past-due amountsa rate increase for retail customers of approximately $168 million.
After hearings in March 2019, the PSCSC issued an order on May 21, 2019, which included an ROE of 9.5% and ongoing reportinga 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 TPUC. PotentialCoal Ash Act and incremental to the federal CCR rule;
•Approval of a $66 million decrease to base rates to reflect the change in ongoing tax expense, primarily the reduction in the federal income tax rate from 35% to 21%;
•Approval of a $45 million decrease through the EDIT Rider to return EDIT resulting from the federal tax rate change and deferred revenues since January 2018 related to the change, to be returned in accordance with the Average Rate Assumption Method (ARAM) for protected EDIT, over a 20-year period for unprotected EDIT associated with Property, Plant and Equipment, over a five-year period for unprotected EDIT not associated with Property, Plant and Equipment and over a five-year period for the deferred revenues; and
•Approval of a $17 million decrease through the EDIT Rider related to reductions in the North Carolina state income tax rate from 6.9% to 2.5% to be returned over a five-year period.
As a result of the order, revised customer rates were effective June 1, 2019. On May 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, ROE 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 with the Supreme Court of South Carolina. 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 COVID-19 pandemic may be consideredLee Nuclear Station. Response briefs were filed on July 6, 2020, and reply briefs were filed on August 11, 2020. Oral arguments before the Supreme Court of South Carolina have been scheduled to occur on May 26, 2021. Based on legal analysis and the filing of the appeal, Duke Energy Carolinas has not recorded an adjustment for its deferred coal ash costs in future, individual docketed proceedings.this matter. 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 an ROE 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.
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The North Carolina Supreme Court consolidated the Duke Energy Carolinas and Duke Energy Progress appeals. On December 11, 2020, the North Carolina Supreme Court issued an opinion, which affirmed, in part, and reversed and remanded, in part, the NCUC’s decisions. In the Opinion, the court upheld the NCUC's decision to include coal ash costs in the cost of service, as well as the NCUC’s discretion to allow a return on the unamortized balance of coal ash costs. The court also remanded to the NCUC a single issue to consider the assessment of support for the Public Staff’s equitable sharing argument. In response to a NCUC order seeking comments on the proposed procedure on remand, on January 11, 2021, Duke Energy Carolinas, Duke Energy Progress, the Public Staff, the North Carolina Attorney General, Sierra Club and Carolina Industrial Group for Fair Utility Rates II and III filed joint comments proposing that the NCUC not hold additional evidentiary hearings, but instead rely upon existing records in the 2017 North Carolina rate cases or in the alternative the records in the 2019 North Carolina rate cases, in deciding the issue on remand. On January 22, 2021, Duke Energy Progress and Duke Energy Carolinas entered into the CCR Settlement Agreement with the Settling Parties, which was filed with the NCUC on January 25, 2021, and approved by the NCUC on April 16, 2021.
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 sought to defer and recover incremental Hurricane Dorian storm costs in this proceeding and requested rates be effective no later than September 1, 2020. As a result of the COVID-19 pandemic, on March 24, 2020, the NCUC suspended the procedural schedule and postponed the previously scheduled evidentiary hearing on this matter indefinitely. On April 7, 2020, the NCUC issued an order partially resuming the procedural schedule requiring intervenors to file direct testimony on April 13, 2020. Public Staff filed supplemental direct testimony on April 23, 2020. Duke Energy Progress filed rebuttal testimony on May 4, 2020.
On June 2, 2020, Duke Energy Progress and the Public Staff filed an Agreement and Stipulation of Partial Settlement, subject to review and approval of the NCUC, resolving certain issues in the base rate proceeding. 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. On July 31, 2020, Duke Energy Progress and the Public Staff filed a Second Agreement and Stipulation of Partial Settlement, subject to review and approval of the NCUC, resolving certain remaining issues in the base rate proceeding. 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.
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 was based on and consistent with the terms of the base rate component of the settlement agreements with the Public Staff and excluded 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 sought 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 were filed with the NCUC from all parties by December 4, 2020. On January 22, 2021, Duke Energy Progress and Duke Energy Carolinas entered into the CCR Settlement Agreement with the Settling Parties, which was filed with the NCUC on January 25, 2021.
On April 16, 2021, the NCUC issued an order approving the June 2, 2020, and July 31, 2020, partial settlements. The order includes approval of 1) an ROE of 9.6% based upon a capital structure of 52% equity and 48% debt; 2) deferral treatment of approximately $400 million of grid improvement projects with a return; 3) a flow back period of five years for unprotected federal EDIT; and 4) the reasonableness and prudence of approximately $714 million of deferred storm costs, which were removed from the rate case and for which Duke Energy Progress filed a petition seeking securitization in October 2020. Additionally, the order approved without modification the CCR Settlement Agreement.
The order denied Duke Energy Progress' proposal to shorten the remaining depreciable lives of certain Duke Energy Progress coal-fired generating units, indicating the appropriate proceeding for the review of generating plant retirements is Duke Energy Progress' IRP proceeding.
On April 26, 2021, Duke Energy Progress filed its final revenue requirement with the NCUC, which results in a net increase of approximately $178 million. Revised customer rates are expected to become effective in June 2021.
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 of the operation and maintenance expenses are deferred in Regulatory assets within Other Noncurrent Assets on the Condensed Consolidated Balance Sheets as of March 31, 2021, and December 31, 2020. 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. For information on the securitization filing, see "2020 North Carolina Storm Securitization Filings." Duke Energy Progress cannot predict the outcome of this matter.
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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 an ROE 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%.
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, ROE 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. 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 before the Supreme Court of South Carolina have been scheduled to occur on May 26, 2021. Based on legal analysis and the filing of the appeal, Duke Energy Progress has not recorded an adjustment for its deferred coal ash costs in this matter. Duke Energy Progress cannot predict the outcome of this matter.
Western Carolinas Modernization Plan
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 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 was held on November 18, 2020. The application was approved and a CPCN was granted by order of the NCUC on April 20, 2021.
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), alleging that the 11% stated ROE component contained in the demand formula rate in the Full Requirements Power Purchase Agreement (FRPPA) between NCEMPA and Duke Energy Progress 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 the consideration of variations to the base transmission-related ROE methodology developed in its Order No. 569-A, through the introduction of “specific facts and circumstances” involving issues specific to the case. The parties reached a settlement in principle at a settlement conference on January 7, 2021, and filed a settlement package on March 10, 2021. The FERC Trial Staff filed comments in support of the settlement. On April 19, 2021, the Settlement Judge certified the settlement to the FERC as an uncontested settlement and recommended approval by the FERC. Duke Energy Progress cannot predict the outcome of this matter.
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, alleging that the 11% stated ROE component in the demand formula rate in the Power Supply and Coordination Agreement between NCEMC and Duke Energy Progress is unjust and unreasonable. 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 responded to the complaint on November 20, 2020, seeking dismissal, demonstrating that the 11% ROE is just and reasonable for the service provided. The parties filed responsive pleadings and are awaiting an order from the FERC. Duke Energy Progress cannot predict the outcome of this matter.
Duke Energy Florida
2021 Settlement Agreement
On January 14, 2021, Duke Energy Florida filed a Settlement Agreement (the “Settlement”) with the FPSC. The parties to the Settlement include Duke Energy Florida, the Office of Public Counsel (OPC), the Florida Industrial Power Users Group, White Springs Agricultural Chemicals, Inc. d/b/a PCS Phosphate and NUCOR Steel Florida, Inc. (collectively, the “Parties”).
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Pursuant to the Settlement, the parties agreed to a base rate stay-out provision that expires year-end 2024; however, Duke Energy Florida is allowed an increase to its base rates of an incremental $67 million in 2022, $49 million in 2023 and $79 million in 2024, subject to adjustment in the event of tax reform during the years 2021, 2022 and 2023. The parties also agreed to a ROE band of 8.85% to 10.85% with a midpoint of 9.85% based on a capital structure of 53% equity and 47% debt. The ROE band can be increased by 25 basis points if the average 30-year U.S. Treasury rate increases 50 basis points or more over a six-month period in which case the midpoint ROE would rise from 9.85% to 10.10%. Duke Energy Florida will also be able to retain the DOE award of approximately $173 million for spent nuclear fuel, which is expected to be received in 2022, in order to mitigate customer rates over the term of the Settlement. In return, Duke Energy Florida will be able to recognize the $173 million into earnings from 2022 through 2024.
In addition to these terms, the Settlement contains provisions related to the accelerated depreciation of Crystal River Units 4-5, the approval of approximately $1 billion in future investments in new cost effective solar power, the implementation of a new Electric Vehicle Charging Station Program and the deferral and recovery of costs in connection with the implementation of Duke Energy Florida’s Vision Florida program, which explores various emerging non-carbon emitting generation technology, distributed technologies and resiliency projects, among other things. The Settlement also resolves remaining unrecovered storm costs for hurricanes Dorian and Michael.
The FPSC approved the Settlement on May 4, 2021. Revised customer rates will be effective January 1, 2022, with subsequent base rate increases effective January 1, 2023, and January 1, 2024.
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. Approximately $42 million and $80 million of these costs are included in Regulatory assets within Current Assets and Other Noncurrent Assets on the Condensed Consolidated Balance Sheets as of March 31, 2021, and December 31, 2020, respectively.
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. The final actual amount of $145 million was filed on September 30, 2020. The Settlement was approved by the FPSC and all matters regarding storm cost recovery relating to Hurricane Michael and Hurricane Dorian are resolved.
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 remote hearing was held on November 17, 2020, and post-hearing briefs were filed with the FPSC from all parties by December 9, 2020. The FPSC voted to approve the program on January 5, 2021, and issued its written order on January 26, 2021.
On February 24, 2021, the League of United Latin American Citizens filed a notice of appeal of the FPSC’s Order approving the Clean Energy Connection to the Florida Supreme Court. The FPSC approval order remains in effect pending the outcome of the appeal. Duke Energy Florida cannot predict the outcome of this matter.
Duke Energy Ohio
Ohio House Bill 6
On July 23, 2019, House Bill 6 was signed into law that became effective January 1, 2020. Among other things, the bill allows for funding, through a rider mechanism referred to as the Clean Air Fund (Rider CAF), of 2 nuclear generating facilities located in Northern Ohio 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 is through a non-bypassable rider that replaced any existing recovery mechanism approved by the PUCO and will remain in place through 2030. As such, Duke Energy Ohio created the Legacy Generation Rider (Rider LGR) that replaced Rider PSR effective January 1, 2020. The amounts recoverable from customers are subject to an annual cap, with incremental costs that exceed such cap eligible for deferral and recovery subject to review. See Note 11 for additional discussion of Duke Energy Ohio's ownership interest in OVEC. House Bill 128 was signed into law on March 31, 2021, which becomes effective June 30, 2021. The bill removes nuclear plant funding from Rider CAF and does not impact OVEC cost recovery.
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| FINANCIAL STATEMENTS | REGULATORY MATTERS | ||||
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 November 18, 2020, the PUCO issued two orders on the application for rehearing. The first order was a Third Entry on Rehearing on the Duke Energy Ohio portfolio holding the cost cap previously imposed was unlawful, a shared savings cap of $8 million pretax should be imposed and lost distribution revenues could not be recovered after December 31, 2020. The second order directs all utilities set the rider to zero effective January 1, 2021, and to file a separate application for final reconciliation of all energy efficiency costs prior to December 31, 2020. On December 18, 2020, Duke Energy Ohio filed an application for rehearing. On January 13, 2021, the application for rehearing was granted for further consideration. Duke Energy Ohio cannot predict the outcome of this matter.
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. The application remains under review. As of January 1, 2021, Duke Energy Ohio suspended its energy efficiency programs due to changes in Ohio law. Duke Energy Ohio cannot predict the outcome of this matter.
Natural Gas Pipeline Extension
Duke Energy Ohio is installing a new natural gas pipeline (the Central Corridor Project) in its Ohio service territory to increase system reliability and enable the retirement of older infrastructure. Duke Energy Ohio currently estimates the pipeline development costs and construction activities will range from $163 million to $245 million in direct costs (excluding overheads and AFUDC) and that construction of the pipeline extension will be completed before the 2021/2022 winter season. An evidentiary hearing for a Certificate of Environmental Compatibility and Public Need concluded on April 11, 2019. On November 21, 2019, the Ohio Power Siting Board (OPSB) approved Duke Energy Ohio's application subject to 41 conditions on construction. Applications for rehearing were filed by several stakeholders on December 23, 2019, arguing that the OPSB approval was incorrect. On February 20, 2020, the OPSB denied the rehearing requests. On April 15, 2020, PiedmontJoint Appellants filed a notice of appeal at the Supreme Court of Ohio of the OPSB’s decision approving Duke Energy Ohio’s Central Corridor application. The appeal was fully briefed and the Ohio Supreme Court oral argument was held on March 31, 2021. Duke Energy Ohio cannot predict the outcome of this matter.
On September 22, 2020, Duke Energy Ohio filed an application with the OPSB for approval to amend the certificated pipeline route due to changes in the route negotiated with property owners and municipalities. On January 21, 2021, the OPSB approved the amended filing with recommended conditions that reaffirm previous conditions and provide guidance regarding local permitting and construction supervision. Duke Energy Ohio cannot predict the outcome of this matter.
MGP Cost Recovery
In an order issued in 2013, the PUCO approved Duke Energy Ohio's deferral and recovery of costs related to environmental remediation at 2 sites (East End and West End) that housed former MGP operations. Duke Energy Ohio has collected approximately $55 million in environmental remediation costs incurred 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 base rate case. To date, the PUCO has not ruled on Duke Energy Ohio’s annual applications for the calendar years 2013 through 2019. 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, 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 costs 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 filed comments in response to the staff report on their planned returnAugust 21, 2020, and intervenor comments were filed on November 9, 2020. Duke Energy Ohio cannot predict the outcome of this matter.
The 2012 PUCO order also contained conditional deadlines for completing the MGP environmental remediation and the deferral of remediation costs at the MGP sites. Subsequent to normal operations during the COVID-19 pandemic. Normal billing practices resumedorder, 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 that must occur after December 31, 2019. On July 12, 2019, staff recommended the commission deny the deferral authority request. 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.
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| FINANCIAL STATEMENTS | REGULATORY MATTERS | ||||
Tax Act – Ohio
On December 21, 2018, Duke Energy Ohio filed an application to change its base rate tariffs and establish a new rider to implement the benefits of the Tax Act for natural gas customers. Duke Energy Ohio requested commission approval to implement the tariff changes and rider effective April 1, 2019. The new rider will flow through to customers the benefit of the lower statutory federal tax rate from 35% to 21% since January 1, 2018, all future benefits of the lower tax rates and a full refund of deferred income taxes collected at the higher tax rates in prior years. Deferred income taxes subject to normalization rules will be refunded consistent with federal law and deferred income taxes not subject to normalization rules will be refunded over a 10-year period. The PUCO established a procedural schedule and testimony was filed on July 31, 2019. An evidentiary hearing occurred on August 7, 2019. Initial briefs were filed on September 11, 2019. Reply briefs were filed on September 25, 2019. Duke Energy Ohio cannot predict the outcome of this matter.
Duke Energy Kentucky Natural Gas Base Rate Case
On April 30, 2021, Duke Energy Kentucky filed a Notice of Intent with the KPSC to file a general natural gas rate case no earlier than 30 days from the date of the notice.
Duke Energy Indiana
2019 Indiana Rate Case
On July 2, 2019, Duke Energy Indiana filed a general rate case with the IURC for a rate increase for retail customers of approximately $395 million. The rebuttal case, filed on December 4, 2019, updated the requested revenue requirement to result in a 15.6% or $396 million average retail rate increase, including the impacts of the Utility Receipts Tax. Hearings concluded on February 7, 2020. On June 29, 2020, the IURC issued the order in the rate case approving 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 an ROE of 9.7% and a 53% equity component of the capital structure, and approved 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 Duke Energy Indiana’s request by slightly more than $200 million, when accounting for the utility receipts tax and other adjustments. Approximately 50% of 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 ROE of 9.7%versus the requested ROE of 10.4% and approximately 20% is related to miscellaneous earnings neutral adjustments. Step one rates are estimated to be approximately 75% of the total and became effective on July 30, 2020. Step two rates are estimated to be the remaining 25% of the total rate increase and will be implemented in mid-2021. Several groups appealed the IURC order to the Indiana Court of Appeals. Appellate briefs were filed on October 1,14, 2020, focusing on three issues: wholesale sales allocations, coal ash basin cost recovery and the Edwardsport IGCC operating and maintenance expense level approved. The appeal was fully briefed in January 2021 and an oral argument was held on April 8, 2021. A decision is expected in the second or third quarter of 2021. Duke Energy Indiana cannot predict the outcome of this matter.
2020 Indiana Coal Ash Recovery Case
In Duke Energy Indiana’s 2019 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 was held on September 14, 2020, and service disconnectionsthe parties have agreed on a delayed briefing schedule that allows for nonpayment resumed on November 4, 2020. Customers were notifiedthe Indiana Rate Case appeal to proceed. Briefing will be completed by mid-August 2021. Duke Energy Indiana cannot predict the outcome of the resumption of normal billing practices, the option of payment arrangements and where to find assistance, if necessary.this matter.
Piedmont
2020 Tennessee Rate Case
On July 2, 2020, Piedmont filed an application with the TPUC, its first general rate case in Tennessee in nine years, for a rate increase for retail customers of approximately $30 million, which represents an approximate 15% increase in annual revenues. The rate increase is driven by significant infrastructure upgrade investments since itsPiedmont's previous rate case. Approximately half of the plant additions being added to rate base are categories of capital investment not covered under the IMR mechanism, which was approved in 2013. Piedmont amended its requested increase to approximately $26 million in December 2020. As authorized under Tennessee law, Piedmont implemented interim rates on January 2, 2021, at the level requested in its adjusted request. A settlement reached with the Tennessee Consumer Advocate in mid-January was filed with the TPUC on February 2, 2021. The settlement results in an increase of revenues of approximately $16 million and a ROE of 9.8%. On August 25, 2020,May 6, 2021, the TPUC issued an order approving the procedural schedulesettlement. Revised customer rates became effective January 2, 2021. Piedmont refunded customers the difference between bills previously rendered under interim rates and such bills if rendered under approved rates, plus interest, in April 2021.
2021 North Carolina Rate Case
On March 22, 2021, Piedmont filed an application with the NCUC for this case, targetinga rate increase for retail customers of approximately $109 million, which represents an approximate 10% increase in retail revenues. The rate increase is driven by customer growth and significant infrastructure upgrade investments (plant additions) since the last general rate case. Approximately 30% of the plant additions being rolled into rate base are categories of plant investment that are covered under the IMR mechanism, which was originally approved as part of the 2013 North Carolina Rate Case. A hearing to begin on January 11, 2021. The TPUC is required to render a decision on this matter on or before April 1, 2021.date has not yet been established. Piedmont cannot predict the outcome of this matter.
| FINANCIAL STATEMENTS | REGULATORY MATTERS | ||||
OTHER REGULATORY MATTERS
Atlantic Coast Pipeline, LLC
Atlantic Coast Pipeline (ACP pipeline) iswas planned to be an approximately 600-mile interstate natural gas pipeline running from West Virginia to North Carolina. Duke Energy indirectly owns a 47% interest, which is accounted for as an equity method investment through its Gas Utilities and Infrastructure segment.
As a result of the uncertainty created by the NWP 12various legal rulings, the potential impact on the cost and schedule for the project, the ongoing legal challenges and the risk of additional legal challenges and delays through the construction period and Dominion’s decision to sell substantially all of its gas transmission and storage segment assets, Duke Energy's Board of Directors and management decided that it was not prudent to continue to invest in the project. On July 5, 2020, Duke Energy and Dominion announced the cancellation of the ACP pipeline project.
As a result, Duke Energy recordedpart of the pretax charges to earnings of approximately $2.1 billion for the nine months ended September 30,recorded in June 2020, within Equity in (losses) earnings of unconsolidated affiliates on the Duke Energy Condensed Consolidated Statements of Operations. The tax benefit associated with this cancellation was $389 million and is recorded in Income Tax Expense (Benefit) on the Duke Energy Condensed Consolidated Statements of Operations. Additional charges of less than $50 million are expected to be recorded within the next 12 months as ACP incurs obligations to exit operations.
See Notes 1 4 and 1211 for additional information regarding this transaction.
Potential Coal Plant Retirements
The Subsidiary Registrants periodically file integrated resource plans (IRPs) with their state regulatory commissions. The IRPs provide a view of forecasted energy needs over a long term (10 to 20 years) and options being considered to meet those needs. IRPs filed by the Subsidiary Registrants included planning assumptions to potentially retire certain coal-fired generating facilities in North Carolina and Indiana earlier than their current estimated useful lives. Duke Energy continues to evaluate the potential need to retire these coal-fired generating facilities earlier than the current estimated useful lives and plans to seek regulatory recovery for amounts that would not be otherwise recovered when any of these assets are retired.
The table below contains the net carrying value of generating facilities planned for retirement or included in recent IRPsintegrated resource plans (IRPs) as evaluated for potential retirement. Dollar amounts in the table below are included in Net property, plant and equipment on the Condensed Consolidated Balance Sheets as of September 30, 2020,March 31, 2021, and exclude capitalized asset retirement costs.
| Remaining Net | |||||||||||||||||||||||||||||||||||||||||
| Capacity | Book Value | ||||||||||||||||||||||||||||||||||||||||
| (in MW) | (in millions) | ||||||||||||||||||||||||||||||||||||||||
| Duke Energy Carolinas | |||||||||||||||||||||||||||||||||||||||||
Allen Steam Station Units 1-2(a) | 334 | $ | 21 | ||||||||||||||||||||||||||||||||||||||
Allen Steam Station Units 4-5(b) | 526 | 388 | |||||||||||||||||||||||||||||||||||||||
Cliffside Unit 5(b) | 546 | 343 | |||||||||||||||||||||||||||||||||||||||
| Duke Energy Progress | |||||||||||||||||||||||||||||||||||||||||
Mayo Unit 1(b) | 746 | 660 | |||||||||||||||||||||||||||||||||||||||
Roxboro Units 3-4(b) | 1,409 | 478 | |||||||||||||||||||||||||||||||||||||||
| Duke Energy Florida | |||||||||||||||||||||||||||||||||||||||||
Crystal River Units 4-5(c) | 1,430 | 1,683 | |||||||||||||||||||||||||||||||||||||||
| Duke Energy Indiana | |||||||||||||||||||||||||||||||||||||||||
Gallagher Units 2 and 4(d) | 280 | 91 | |||||||||||||||||||||||||||||||||||||||
Gibson Units 1-5(e) | 2,845 | 1,834 | |||||||||||||||||||||||||||||||||||||||
Cayuga Units 1-2(e) | 1,005 | 755 | |||||||||||||||||||||||||||||||||||||||
| Total Duke Energy | 9,121 | $ | 6,253 | ||||||||||||||||||||||||||||||||||||||
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| Remaining Net | ||||||
| Capacity | Book Value | |||||
| (in MW) | (in millions) | |||||
| Duke Energy Carolinas | ||||||
Allen Steam Station Units 1-3(a) | 582 | $ | 141 | |||
Allen Steam Station Units 4-5(b) | 516 | 321 | ||||
Cliffside Unit 5(b) | 544 | 355 | ||||
| Duke Energy Progress | ||||||
Mayo Unit 1(b) | 727 | 673 | ||||
Roxboro Units 3-4(b) | 1,392 | 486 | ||||
| Duke Energy Indiana | ||||||
Gallagher Units 2 and 4(c) | 280 | 112 | ||||
Gibson Units 1-5(d) | 3,132 | 1,683 | ||||
Cayuga Units 1-2(d) | 1,005 | 935 | ||||
| Total Duke Energy | 8,178 | $ | 4,706 | |||
(a)As part of the 2015 resolution of a lawsuit involving alleged New Source Review violations, Duke Energy Carolinas must retire Allen Steam Station Units 1 through 3 by December 31, 2024. The long-term energy options considered in the IRP could result in retirement of these units earlier than their current estimated useful lives. Unit 3 with a capacity of 270 MW and a net book value of $26 million at December 31, 2020, was retired in March 2021.
(b)These units are included in the IRP filed by Duke Energy Carolinas and Duke Energy Progress in North Carolina and South Carolina on September 1, 2020. The long-term energy options considered in the IRP could result in retirement of these units earlier than their current estimated useful lives. In 2019, Duke Energy Carolinas and Duke Energy Progress filed North Carolina rate cases that included depreciation studies that accelerate end-of-life dates for these plants. NCUC issued orders in the 2019 rate cases of Duke Energy Carolinas and Duke Energy Progress on March 31, 2021, and April 16, 2021, respectively, in which the proposals to shorten the remaining depreciable lives of these units were denied, while indicating the IRP proceeding was the appropriate proceeding for the review of generating plant retirements.
(c)On January 14, 2021, Duke Energy Florida filed a settlement agreement with the FPSC, which proposed depreciation rates reflecting retirement dates for Duke Energy Florida's last 2 coal-fired generating facilities, Crystal River Units 4-5, eight years ahead of schedule in 2034 rather than in 2042. The settlement was approved by the FPSC on May 4, 2021.
(d)Duke Energy Indiana committed to either retire or stop burning coal at Gallagher Units 2 and 4 by December 31, 2022, as part of the 2016 settlement of Edwardsport IGCC matters. In February 2021, upon approval by MISO of a new retirement date, Duke Energy Indiana determined it would modify the retirement date to June 1, 2021.
(e)On July 1, 2019, Duke Energy Indiana filed its 2018 IRP with the IURC. The 2018 IRP included scenarios evaluating the potential retirement of coal-fired generating units at Gibson and Cayuga. The rate case filed July 2, 2019, included proposed depreciation rates reflecting retirement dates from 2026 to 2038. The depreciation rates reflecting these updated retirement dates were approved by the IURC as part of the rate case order issued on June 29, 2020.
4. COMMITMENTS AND CONTINGENCIES
ENVIRONMENTAL
The Duke Energy Registrants are subject to federal, state and local regulations regarding air and water quality, hazardous and solid waste disposal, coal ash and other environmental matters. These regulations can be changed from time to time, imposing new obligations on the Duke Energy Registrants. The following environmental matters impact all Duke Energy Registrants.
Remediation Activities
In addition to AROs recorded as a result of various environmental regulations, the Duke Energy Registrants are responsible for environmental remediation at various sites. These include certain properties that are part of ongoing operations and sites formerly owned or used by Duke Energy entities. These sites are in various stages of investigation, remediation and monitoring. Managed in conjunction with relevant federal, state and local agencies, remediation activities vary based upon site conditions and location, remediation requirements, complexity and sharing of responsibility. If remediation activities involve joint and several liability provisions, strict liability, or cost recovery or contribution actions, the Duke Energy Registrants could potentially be held responsible for environmental impacts caused by other potentially responsible parties and may also benefit from insurance policies or contractual indemnities that cover some or all cleanup costs. Liabilities are recorded when losses become probable and are reasonably estimable. The total costs that may be incurred cannot be estimated because the extent of environmental impact, allocation among potentially responsible parties, remediation alternatives and/or regulatory decisions have not yet been determined at all sites. Additional costs associated with remediation activities are likely to be incurred in the future and could be significant. Costs are typically expensed as Operation, maintenance and other on the Condensed Consolidated Statements of Operations unless regulatory recovery of the costs is deemed probable.
The following table contains information regarding reserves for probable and estimable costs related to the various environmental sites. These reserves are recorded in Accounts Payable within Current Liabilities and Other within Other Noncurrent Liabilities on the Condensed Consolidated Balance Sheets.
| (in millions) | September 30, 2020 | December 31, 2019 | ||||
| Reserves for Environmental Remediation | ||||||
| Duke Energy | $ | 66 | $ | 58 | ||
| Duke Energy Carolinas | 16 | 11 | ||||
| Progress Energy | 15 | 16 | ||||
| Duke Energy Progress | 5 | 4 | ||||
| Duke Energy Florida | 8 | 9 | ||||
| Duke Energy Ohio | 22 | 19 | ||||
| Duke Energy Indiana | 5 | 4 | ||||
| Piedmont | 8 | 8 | ||||
| (in millions) | March 31, 2021 | December 31, 2020 | ||||||||||||
| Reserves for Environmental Remediation | ||||||||||||||
| Duke Energy | $ | 74 | $ | 75 | ||||||||||
| Duke Energy Carolinas | 18 | 19 | ||||||||||||
| Progress Energy | 18 | 19 | ||||||||||||
| Duke Energy Progress | 6 | 6 | ||||||||||||
| Duke Energy Florida | 12 | 12 | ||||||||||||
| Duke Energy Ohio | 21 | 22 | ||||||||||||
| Duke Energy Indiana | 5 | 6 | ||||||||||||
| Piedmont | 11 | 10 | ||||||||||||
Additional losses in excess of recorded reserves that could be incurred for the stages of investigation, remediation and monitoring for environmental sites that have been evaluated at this time are not material except as presented in the table below.
| (in millions) | |||||
| Duke Energy | $ | 20 | |||
| Duke Energy Carolinas | 12 | ||||
| Duke Energy Ohio | 4 | ||||
55
| FINANCIAL STATEMENTS | COMMITMENTS AND CONTINGENCIES | ||||
| (in millions) | |||
| Duke Energy | $ | 56 | |
| Duke Energy Carolinas | 12 | ||
| Duke Energy Ohio | 38 | ||
LITIGATION
Duke Energy
Texas Storm Uri Tort Litigation
Duke Energy and several Duke Energy renewables project companies have been named in multiple lawsuits arising out of Texas Storm Uri in mid-February 2021, and particularly, in the deregulated market managed by the Electric Reliability Council of Texas.. Currently, 15 state court actions have been filed in counties across Texas and 1 case is pending in federal court in Texas. These lawsuits, filed by individuals, seek recovery for property damages, personal injury and for wrongful death allegedly incurred by the plaintiffs as a result of power losses, which the plaintiffs claim was the result of the defendants' failure to take appropriate precautions. Certain defendants have moved to transfer all related cases including those naming Duke Energy entities into a Texas state court multi-district litigation proceeding for coordination before a single judge. No ruling has yet been issued on this motion. Duke Energy cannot predict the outcomes of these state and federal litigation matters.
Duke Energy Carolinas and Duke Energy Progress
Coal Ash Insurance Coverage Litigation
In March 2017, Duke Energy Carolinas and Duke Energy Progress filed a civil action in the North Carolina Business Court against various insurance providers. The lawsuit seeks payment for coal ash-related liabilities covered by third-party liability insurance policies. The insurance policies were issued between 1971 and 1986 and provide third-party liability insurance for property damage. The civil action seeks damages for breach of contract and indemnification for costs arising from the Coal Ash Act and the EPAU.S. Environmental Protection Agency CCR rule at 15 coal-fired plants in North Carolina and South Carolina. DueFact discovery has been completed. The parties' fully briefed and argued motions relating to COVID-19,key legal matters are pending before the court has issued a new scheduling order and the trial is nowfor rulings. Trial remains scheduled for January 24, 2022. Fact and expert discovery is scheduled to be completed by mid-November 2020. The parties are required to file all dispositive pre-trial motions by December 4, 2020. Duke Energy Carolinas and Duke Energy Progress cannot predict the outcome of this matter.
Duke Energy Carolinas
NTE Carolinas II, LLC Litigation
In November 2017, Duke Energy Carolinas entered into a standard FERC large generator interconnection agreement (LGIA) with NTE Carolinas II, LLC (NTE), a company that intendedproposed to build a combined-cycle natural gas plant in Rockingham County, North Carolina. On September 6, 2019, Duke Energy Carolinas filed a lawsuit in Mecklenburg County Superior Court against NTE for breach of contract, and alleging that NTE's failure to pay benchmark payments for Duke Energy Carolinas' transmission system upgrades required under the interconnection agreement constituted a termination of the interconnection agreement. Duke Energy Carolinas is seeking a monetary judgment against NTE because NTE failed to make multiple milestone payments. The lawsuit was moved to federal court in North Carolina. NTE filed a motion to dismiss Duke Energy Carolinas’ complaint and brought counterclaims alleging anti-competitive conduct and violations of state and federal statutes. Duke Energy Carolinas filed a motion to dismiss NTE's counterclaims.
On May 21, 2020, FERC issued a decision, in response to ana NTE petition challenging Duke Energy Carolinas' termination of the LGIA, FERC issued a ruling (i) that it has exclusive jurisdiction to determine whether a transmission provider may terminate a Large Generator Interconnection Agreement (LGIA),LGIA, (ii) FERC approval is required to terminate a conforming LGIA if objected to by the interconnection customer, and (iii) Duke Energy may not announce the termination of a conforming LGIA unless FERC has approved the termination. On May 27, 2020, NTE filed FERC's May 21, 2020, Order as a noticeOffice of supplemental authority with the federal district court where its Motion to Dismiss is pending. On June 1, 2020,Enforcement also initiated an investigation of Duke Energy Carolinas filed a response to NTE’s notice of supplemental authority noting that FERC declined to address the merits of any breach of contract claim relatinginto matters pertaining to the LGIA and thatLGIA. Duke Energy Carolinas is cooperating with the federal court then necessarily retains exclusive authority to award damages for NTE’s breach.Office of Enforcement but cannot predict the outcome of this investigation.
On August 17, 2020, the court denied both NTE’s and Duke Energy Carolinas’ Motion to Dismiss. The parties are now preparing to commence discovery.in active discovery and trial is scheduled for June 20, 2022. Duke Energy Carolinas cannot predict the outcome of this matter.
Asbestos-related Injuries and Damages Claims
Duke Energy Carolinas has experienced numerous claims for indemnification and medical cost reimbursement related to asbestos exposure. These claims relate to damages for bodily injuries alleged to have arisen from exposure to or use of asbestos in connection with construction and maintenance activities conducted on its electric generation plants prior to 1985. As of September 30, 2020,March 31, 2021, there were 159126 asserted claims for non-malignant cases with cumulative relief sought of up to $41$31 million, and 6847 asserted claims for malignant cases with cumulative relief sought of up to $23$17 million. Based on Duke Energy Carolinas’ experience, it is expected that the ultimate resolution of most of these claims likely will be less than the amount claimed.
Duke Energy CarolinasCarolinas has recognized asbestos-related reserves of $578$564 million at September 30, 2020,March 31, 2021, and $604$572 million at December 31, 2019.2020. These reserves are classified in Other within Other Noncurrent Liabilities and Other within Current Liabilities on the Condensed Consolidated Balance Sheets. These reserves are based upon Duke Energy Carolinas' best estimate for current and future asbestos claims through 2040 and are recorded on an undiscounted basis. In light of the uncertainties inherent in a longer-term forecast, management does not believe they can reasonably estimate the indemnity and medical costs that might be incurred after 2040 related to such potential claims. It is possible Duke Energy Carolinas may incur asbestos liabilities in excess of the recorded reserves.
Duke Energy Carolinas has third-party insurance to cover certain losses related to asbestos-related injuries and damages above an aggregate self-insured retention. Duke Energy Carolinas’ cumulative payments began to exceed the self-insured retention in 2008. Future payments up to the policy limit will be reimbursed by the third-party insurance carrier. The insurance policy limit for potential future insurance recoveries indemnification and medical cost claim payments is $714 million in excess of the self-insured retention. Receivables for insurance recoveries were $704 million at September 30, 2020, March 31, 2021, and $742 million at December 31, 2019.2020. These amounts are classified in Other within Other Noncurrent Assets and Receivables within Current Assets on the Condensed Consolidated Balance Sheets. Duke Energy Carolinas is not aware of any uncertainties regarding the legal sufficiency of insurance claims. Duke Energy Carolinas believes the insurance recovery asset is probable of recovery as the insurance carrier continues to have a strong financial strength rating.
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| FINANCIAL STATEMENTS | COMMITMENTS AND CONTINGENCIES | ||||
As described in Note 1, Duke Energy adopted the new guidance for credit losses effective January 1, 2020, using the modified retrospective method of adoption, which does not require restatement of prior year reported results. The reserve for credit losses for insurance receivables based on adoption of the new standard is $15 million for Duke Energy and Duke Energy Carolinas as of March 31, 2021, and December 31, 2020. The insurance receivable is evaluated based on the risk of default and the historical losses, current conditions and expected conditions around collectability. Management evaluates the risk of default annually based on payment history, credit rating and changes in the risk of default from credit agencies.
Duke Energy Progress and Duke Energy Florida
Spent Nuclear Fuel Matters
On June 18, 2018, Duke Energy Progress and Duke Energy Florida sued the U.S. in the U.S. Court of Federal Claims for damages incurred for the period 2014 through 2018. The lawsuit claimed the Department of Energy breached a contract in failing to accept spent nuclear fuel under the Nuclear Waste Policy Act of 1982 and asserted damages for the cost of on-site storage in the amount of $100 million and $203$200 million for Duke Energy Progress and Duke Energy Florida, respectively. Discovery is ongoing and a trial is expected to occur in 2021.
Duke Energy Florida
Power Purchase Dispute Arbitration
Duke Energy Florida, on behalf of its customers, entered into a PPA for the purchase of firm capacity and energy from a qualifying facility under the Public Utilities Regulatory Policies Act of 1978. Duke Energy Florida determined the qualifying facility did not perform in accordance with the PPA, and Duke Energy Florida terminated the PPA. The qualifying facility counterparty filed a confidential American Arbitration Association (AAA) arbitration demand, challenging the termination of the PPA and seeking damages. Duke Energy Florida denies liability and is vigorously defending the arbitration claim.
The final arbitration hearing is scheduled foroccurred during the week of December 2020.7, 2020. An arbitral award was issued in March 2021, upholding Duke Energy Florida cannot predictFlorida's positions on all issues and awarding the outcome of this matter.company termination costs.
Duke Energy Indiana
Coal Ash Basin Closure Plan Appeal
On January 27, 2020, Hoosier Environmental Council (HEC) filed a Petition for Administrative Review with the Indiana Office of Environmental Adjudication (the court) challenging the Indiana Department of Environmental Management’s December 10, 2019, partial approval of Duke Energy Indiana’s ash pond closure plan. On March 11, 2020, Duke Energy Indiana filed a Motion to Dismiss. On May 5, 2020, the court denied the motion. The parties are completing discoveryAfter hearing oral arguments in early April 2021 on Duke Energy Indiana's and haveHEC's competing Motions for Summary Judgment, on May 4, 2021, the administrative court rejected all of HEC’s claims and issued a ruling in favor of Duke Energy Indiana. HEC has until December 22, 2020,June 3, 2021, to file dispositive motions. If these claims survive dispositive motions, a hearing is scheduled for April 2021. Dukeseek judicial review of the order. Duke Energy Indiana cannot predict the outcome of this matter. See Note 6 for additional information.
Other Litigation and Legal Proceedings
The Duke Energy Registrants are involved in other legal, tax and regulatory proceedings arising in the ordinary course of business, some of which involve significant amounts. The Duke Energy Registrants believe the final disposition of these proceedings will not have a material effect on their results of operations, cash flows or financial position.
The table below presents recorded reserves based on management’s best estimate of probable loss for legal matters, excluding asbestos-related reserves discussed above. Reserves are classified on the Condensed Consolidated Balance Sheets in Other within Other Noncurrent Liabilities and Other within Current Liabilities. The reasonably possible range of loss in excess of recorded reserves is not material, other than as described above.
| (in millions) | September 30, 2020 | December 31, 2019 | |||||
| Reserves for Legal Matters | |||||||
| Duke Energy | $ | 60 | $ | 62 | |||
| Duke Energy Carolinas | 2 | 2 | |||||
| Progress Energy | 52 | 55 | |||||
| Duke Energy Progress | 9 | 12 | |||||
| Duke Energy Florida | 23 | 22 | |||||
| Piedmont | 1 | 1 | |||||
| (in millions) | March 31, 2021 | December 31, 2020 | |||||||||
| Reserves for Legal Matters | |||||||||||
| Duke Energy | $ | 65 | $ | 68 | |||||||
| Duke Energy Carolinas | 3 | 2 | |||||||||
| Progress Energy | 57 | 61 | |||||||||
| Duke Energy Progress | 11 | 13 | |||||||||
| Duke Energy Florida | 26 | 28 | |||||||||
| Piedmont | 1 | 1 | |||||||||
OTHER COMMITMENTS AND CONTINGENCIES
General
As part of their normal business, the Duke Energy Registrants are party to various financial guarantees, performance guarantees and other contractual commitments to extend guarantees of credit and other assistance to various subsidiaries, investees and other third parties. These guarantees involve elements of performance and credit risk, which are not fully recognized on the Condensed Consolidated Balance Sheets and have uncapped maximum potential payments. However, the Duke Energy Registrants do not believe these guarantees will have a material effect on their results of operations, cash flows or financial position.
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| FINANCIAL STATEMENTS | COMMITMENTS AND CONTINGENCIES | ||||
In addition, the Duke Energy Registrants enter into various fixed-price, noncancelable commitments to purchase or sell power or natural gas, take-or-pay arrangements, transportation, or throughput agreements and other contracts that may or may not be recognized on their respective Condensed Consolidated Balance Sheets. Some of these arrangements may be recognized at fair value on their respective Condensed Consolidated Balance Sheets if such contracts meet the definition of a derivative and the NPNS exception does not apply. In most cases, the Duke Energy Registrants’ purchase obligation contracts contain provisions for price adjustments, minimum purchase levels and other financial commitments.
5. DEBT AND CREDIT FACILITIES
SUMMARY OF SIGNIFICANT DEBT ISSUANCES
The following table summarizes significant debt issuances (in millions).
| Three Months Ended March 31, 2021 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Duke | Duke | Duke | Duke | Duke | Duke | ||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Maturity | Interest | Duke | Energy | Energy | Energy | Energy | Energy | Energy | |||||||||||||||||||||||||||||||||||||||||||||||||||
| Issuance Date | Date | Rate | Energy | (Parent) | Carolinas | Progress | Florida | Ohio | Indiana | Piedmont | |||||||||||||||||||||||||||||||||||||||||||||||||
| Unsecured Debt | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
March 2021(a) | Mar 2031 | 2.500 | % | $ | 350 | $ | 0 | $ | — | $ | — | $ | — | $ | — | $ | — | $ | 350 | ||||||||||||||||||||||||||||||||||||||||
| Total issuances | $ | 350 | $ | 0 | $ | 0 | $ | 0 | $ | 0 | $ | 0 | $ | 0 | $ | 350 | |||||||||||||||||||||||||||||||||||||||||||
(a)
| Nine Months Ended September 30, 2020 | ||||||||||||||||||||||||||||||||||||
| Duke | Duke | Duke | Duke | Duke | Duke | |||||||||||||||||||||||||||||||
| Maturity | Interest | Duke | Energy | Energy | Energy | Energy | Energy | Energy | ||||||||||||||||||||||||||||
| Issuance Date | Date | Rate | Energy | (Parent) | Carolinas | Progress | Florida | Ohio | Indiana | Piedmont | ||||||||||||||||||||||||||
| Unsecured Debt | ||||||||||||||||||||||||||||||||||||
May 2020(a) | Jun 2030 | 2.450 | % | $ | 500 | $ | 500 | $ | — | $ | — | $ | — | $ | — | $ | — | $ | — | |||||||||||||||||
May 2020(b) | Jun 2050 | 3.350 | % | 400 | — | — | — | — | — | 400 | ||||||||||||||||||||||||||
August 2020(c) | Feb 2022 | 0.430 | % | (d) | 700 | — | — | 700 | — | — | — | — | ||||||||||||||||||||||||
September 2020(e) | Sep 2025 | 0.900 | % | 650 | 650 | — | — | — | — | — | — | |||||||||||||||||||||||||
September 2020(e) | Jun 2030 | 2.450 | % | 350 | 350 | — | — | — | — | — | — | |||||||||||||||||||||||||
| First Mortgage Bonds | ||||||||||||||||||||||||||||||||||||
January 2020(f) | Feb 2030 | 2.450 | % | 500 | — | 500 | — | — | — | — | — | |||||||||||||||||||||||||
January 2020(f) | Aug 2049 | 3.200 | % | 400 | — | 400 | — | — | — | — | — | |||||||||||||||||||||||||
March 2020(g) | Apr 2050 | 2.750 | % | 550 | — | — | — | — | — | 550 | — | |||||||||||||||||||||||||
May 2020(b) | Jun 2030 | 2.125 | % | 400 | — | — | — | — | 400 | — | — | |||||||||||||||||||||||||
June 2020(b) | Jun 2030 | 1.750 | % | 500 | — | — | — | 500 | — | — | — | |||||||||||||||||||||||||
August 2020(h) | Aug 2050 | 2.500 | % | 600 | — | — | 600 | — | — | — | — | |||||||||||||||||||||||||
| Total issuances | $ | 5,550 | $ | 1,500 | $ | 900 | $ | 1,300 | $ | 500 | $ | 400 | $ | 550 | $ | 400 | ||||||||||||||||||||
In March 2021, Duke Energy Carolinas priced $1 billion of First Mortgage Bonds. The issuance and sale of securities settled in April 2021, in 2 separate tranches. The first tranche was issued for $550 million at a fixed interest rate of 2.55% and mature in April 2031. The second tranche was issued for $450 million at a fixed interest rate of 3.45% and mature in April 2051. Proceeds from the issuance will be used to repay at maturity $500 million of 3.90% First Mortgage Bonds due June 2021, pay down intercompany short-term debt and for general company purposes.
CURRENT MATURITIES OF LONG-TERM DEBT
The following table shows the significant components of Current maturities of long-term debt on the Condensed Consolidated Balance Sheets. The Duke Energy Registrants currently anticipate satisfying these obligations with cash on hand and proceeds from additional borrowings.
| (in millions) | Maturity Date | Interest Rate | September 30, 2020 | (in millions) | Maturity Date | Interest Rate | March 31, 2021 | ||||||||||||||||||
| Unsecured Debt | Unsecured Debt | ||||||||||||||||||||||||
| Progress Energy, Inc | January 2021 | 4.400 | % | $ | 500 | ||||||||||||||||||||
| Duke Energy (Parent) | May 2021 | 0.765 | % | (a) | 500 | Duke Energy (Parent) | May 2021 | 0.698 | % | (a) | 500 | ||||||||||||||
| Piedmont | June 2021 | 4.240 | % | 160 | Piedmont | June 2021 | 4.240 | % | 160 | ||||||||||||||||
| Duke Energy (Parent) | September 2021 | 3.550 | % | 500 | Duke Energy (Parent) | September 2021 | 3.550 | % | 500 | ||||||||||||||||
| Duke Energy (Parent) | September 2021 | 1.800 | % | 750 | Duke Energy (Parent) | September 2021 | 1.800 | % | 750 | ||||||||||||||||
| Secured Debt | |||||||||||||||||||||||||
| Duke Energy Florida | April 2021 | 1.035 | % | (a) | 250 | Duke Energy Florida | November 2021 | 0.441 | % | (a) | 200 | ||||||||||||||
| Duke Energy Progress | Duke Energy Progress | February 2022 | 0.369 | % | (a) | 700 | |||||||||||||||||||
| Duke Energy (Parent) | Duke Energy (Parent) | March 2022 | 3.227 | % | 300 | ||||||||||||||||||||
| Duke Energy (Parent) | Duke Energy (Parent) | March 2022 | 0.827 | % | (a) | 300 | |||||||||||||||||||
| First Mortgage Bonds | First Mortgage Bonds | ||||||||||||||||||||||||
| Duke Energy Carolinas | June 2021 | 3.900 | % | 500 | Duke Energy Carolinas | June 2021 | 3.900 | % | 500 | ||||||||||||||||
| Duke Energy Florida | August 2021 | 3.100 | % | 300 | Duke Energy Florida | August 2021 | 3.100 | % | 300 | ||||||||||||||||
| Duke Energy Progress | September 2021 | 3.000 | % | 500 | Duke Energy Progress | September 2021 | 3.000 | % | 500 | ||||||||||||||||
| Duke Energy Progress | September 2021 | 8.625 | % | 100 | Duke Energy Progress | September 2021 | 8.625 | % | 100 | ||||||||||||||||
| Duke Energy Indiana | Duke Energy Indiana | January 2022 | 8.850 | % | 53 | ||||||||||||||||||||
Other(b) | 609 | Other(b) | 723 | ||||||||||||||||||||||
| Current maturities of long-term debt | $ | 4,669 | Current maturities of long-term debt | $ | 5,586 | ||||||||||||||||||||
(a) Debt has a floating interest rate.
(b) Includes finance lease obligations, amortizing debt, tax-exempt bonds with mandatory put options and small bullet maturities.
AVAILABLE CREDIT FACILITIES
Master Credit Facility
In March 2020,2021, Duke Energy amended its existing $8 billion Master Credit Facility to extend the termination date to March 2025.2026. The Duke Energy Registrants, excluding Progress Energy, have borrowing capacity under the Master Credit Facility up to a specified sublimit for each borrower. Duke Energy has the unilateral ability at any time to increase or decrease the borrowing sublimits of each borrower, subject to a maximum sublimit for each borrower. The amount available under the Master Credit Facility has been reduced to backstop issuances of commercial paper, certain letters of credit and variable-rate demand tax-exempt bonds that may be put to the Duke Energy Registrants at the option of the holder.
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| FINANCIAL STATEMENTS | DEBT AND CREDIT FACILITIES | ||||
The table below includes the current borrowing sublimits and available capacity under these credit facilities.
| September 30, 2020 | March 31, 2021 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Duke | Duke | Duke | Duke | Duke | Duke | Duke | Duke | Duke | Duke | Duke | Duke | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Duke | Energy | Energy | Energy | Energy | Energy | Energy | Duke | Energy | Energy | Energy | Energy | Energy | Energy | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| (in millions) | Energy | (Parent) | Carolinas | Progress | Florida | Ohio | Indiana | Piedmont | (in millions) | Energy | (Parent) | Carolinas | Progress | Florida | Ohio | Indiana | Piedmont | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Facility size(a) | $ | 8,000 | $ | 2,650 | $ | 1,475 | $ | 1,250 | $ | 800 | $ | 625 | $ | 600 | $ | 600 | Facility size(a) | $ | 8,000 | $ | 2,650 | $ | 1,475 | $ | 1,250 | $ | 700 | $ | 625 | $ | 600 | $ | 700 | |||||||||||||||||||||||||||||||||||||||||||||
| Reduction to backstop issuances | Reduction to backstop issuances | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Commercial paper(b) | (2,007 | ) | (693 | ) | (300 | ) | (308 | ) | (62 | ) | (106 | ) | (229 | ) | (309 | ) | Commercial paper(b) | (3,466) | (1,781) | (741) | (292) | (243) | (259) | (150) | — | |||||||||||||||||||||||||||||||||||||||||||||||||||||
| Outstanding letters of credit | (40 | ) | (34 | ) | (4 | ) | (2 | ) | — | — | — | — | Outstanding letters of credit | (31) | (25) | (4) | (2) | — | — | — | — | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Tax-exempt bonds | (81 | ) | — | — | — | — | — | (81 | ) | — | Tax-exempt bonds | (81) | — | — | — | — | — | (81) | — | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Available capacity under the Master Credit Facility | $ | 5,872 | $ | 1,923 | $ | 1,171 | $ | 940 | $ | 738 | $ | 519 | $ | 290 | $ | 291 | Available capacity under the Master Credit Facility | $ | 4,422 | $ | 844 | $ | 730 | $ | 956 | $ | 457 | $ | 366 | $ | 369 | $ | 700 | |||||||||||||||||||||||||||||||||||||||||||||