0001326160us-gaap:OtherCurrentLiabilitiesMemberus-gaap:NondesignatedMemberduk:DukeEnergyProgressMemberus-gaap:CommodityContractMember2022-12-310001326160duk:DukeEnergyOhioMemberus-gaap:OtherCurrentLiabilitiesMember2023-12-31
UNITED STATES SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-Q
(Mark One)
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☒ | QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
For the quarterly period ended September 30, 2023March 31, 2024
OR
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☐ | TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
For the transition period from _________to_________
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Commission File Number | Registrant, State of Incorporation or Organization, Address of Principal Executive Offices, Zip Code and Telephone Number | IRS Employer Identification No. |
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1-32853 | DUKE ENERGY CORPORATION | 20-2777218 |
(a Delaware corporation)
526525 South ChurchTryon Street
Charlotte, North Carolina 28202-180328202
704-382-3853800-488-3853
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1-4928 | DUKE ENERGY CAROLINAS, LLC | 56-0205520 |
(a North Carolina limited liability company)
526525 South ChurchTryon Street
Charlotte, North Carolina 28202-180328202
704-382-3853800-488-3853
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1-15929 | PROGRESS ENERGY, INC. | 56-2155481 |
(a North Carolina corporation)
410 South Wilmington411 Fayetteville Street
Raleigh, North Carolina 27601-174827601
704-382-3853800-488-3853
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1-3382 | DUKE ENERGY PROGRESS, LLC | 56-0165465 |
(a North Carolina limited liability company)
410 South Wilmington411 Fayetteville Street
Raleigh, North Carolina 27601-174827601
704-382-3853800-488-3853
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1-3274 | DUKE ENERGY FLORIDA, LLC | 59-0247770 |
(a Florida limited liability company)
299 First Avenue North
St. Petersburg, Florida 33701
704-382-3853800-488-3853
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1-1232 | DUKE ENERGY OHIO, INC. | 31-0240030 |
(an Ohio corporation)
139 East Fourth Street
Cincinnati, Ohio 45202
704-382-3853800-488-3853
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1-3543 | DUKE ENERGY INDIANA, LLC | 35-0594457 |
(an Indiana limited liability company)
1000 East Main Street
Plainfield, Indiana 46168
704-382-3853800-488-3853
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1-6196 | PIEDMONT NATURAL GAS COMPANY, INC. | 56-0556998 |
(a North Carolina corporation)
4720 Piedmont Row Drive525 South Tryon Street
Charlotte, North Carolina 2821028202
704-364-3120800-488-3853
SECURITIES REGISTERED PURSUANT TO SECTION 12(b) OF THE ACT:
Name of each exchange on
Registrant Title of each class Trading symbols which registered
Duke Energy Common Stock, $0.001 par value DUK New York Stock Exchange LLC
Duke Energy 5.625% 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
Duke Energy 3.10% Senior Notes due 2028 DUK 28A New York Stock Exchange LLC
Duke Energy 3.85% Senior Notes due 2034 DUK 34 New York Stock Exchange LLC
Duke Energy 3.75% Senior Notes due 2031 DUK 31A New York Stock Exchange LLC
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.
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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).
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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.
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Duke Energy | Large Accelerated Filer | ☒ | Accelerated filer | ☐ | Non-accelerated Filer | ☐ | Smaller reporting company | ☐ | Emerging growth company | ☐ |
Duke Energy Carolinas | Large Accelerated Filer | ☐ | Accelerated filer | ☐ | Non-accelerated Filer | ☒ | Smaller reporting company | ☐ | Emerging growth company | ☐ |
Progress Energy | Large Accelerated Filer | ☐ | Accelerated filer | ☐ | Non-accelerated Filer | ☒ | Smaller reporting company | ☐ | Emerging growth company | ☐ |
Duke Energy Progress | Large Accelerated Filer | ☐ | Accelerated filer | ☐ | Non-accelerated Filer | ☒ | Smaller reporting company | ☐ | Emerging growth company | ☐ |
Duke Energy Florida | Large Accelerated Filer | ☐ | Accelerated filer | ☐ | Non-accelerated Filer | ☒ | Smaller reporting company | ☐ | Emerging growth company | ☐ |
Duke Energy Ohio | Large Accelerated Filer | ☐ | Accelerated filer | ☐ | Non-accelerated Filer | ☒ | Smaller reporting company | ☐ | Emerging growth company | ☐ |
Duke Energy Indiana | Large Accelerated Filer | ☐ | Accelerated filer | ☐ | Non-accelerated Filer | ☒ | Smaller reporting company | ☐ | Emerging growth company | ☐ |
Piedmont | Large Accelerated Filer | ☐ | Accelerated filer | ☐ | Non-accelerated Filer | ☒ | Smaller reporting company | ☐ | Emerging growth company | ☐ |
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ¨
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).
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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, 2023:April 30, 2024:
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Registrant | Description | Shares |
Duke Energy | Common stock, $0.001 par value | 770,711,728771,768,612 |
Duke Energy Carolinas | All of the registrant's limited liability company member interests are directly owned by Duke Energy. | N/A |
Progress Energy | All of the registrant's common stock is directly owned by Duke Energy. | 100 |
Duke Energy Progress | All of the registrant's limited liability company member interests are indirectly owned by Duke Energy. | N/A |
Duke Energy Florida | All of the registrant's limited liability company member interests are indirectly owned by Duke Energy. | N/A |
Duke Energy Ohio | All of the registrant's common stock is indirectly owned by Duke Energy. | 89,663,086 |
Duke Energy Indiana | All of the registrant's limited liability company member interests are owned by a Duke Energy subsidiary that is 80.1% indirectly owned by Duke Energy. | N/A |
Piedmont | All of the registrant's common stock is directly owned by Duke Energy. | 100 |
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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
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PART I. FINANCIAL INFORMATION |
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| Piedmont Natural Gas Company, Inc. Financial Statements | |
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| Note 1 – Organization and Basis of Presentation | |
| Note 2 – Dispositions | |
| Note 3 – Business Segments | |
| Note 4 – Regulatory Matters | |
| Note 5 – Commitments and Contingencies | |
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| Note 6 – Debt and Credit Facilities | |
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| Note 7 – Asset Retirement Obligations | |
| Note 8 – Goodwill | |
| Note 98 – Related Party Transactions | |
| Note 109 – Derivatives and Hedging | |
| Note 1110 – Investments in Debt and Equity Securities | |
| Note 1211 – Fair Value Measurements | |
| Note 1312 – Variable Interest Entities | |
| Note 13 – Revenue | |
| Note 14 – RevenueStockholders' Equity | |
| Note 15 – Stockholders' Equity | |
| Note 16 – Employee Benefit Plans | |
| Note 1716 – Income Taxes | |
| Note 1817 – Subsequent Events | |
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PART II. OTHER INFORMATION |
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Item 5. | Other Information | |
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Glossary of Terms
The following terms or acronyms used in this Form 10-Q are defined below:
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Term or Acronym | Definition |
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2021 Settlement | Settlement Agreement in 2021 among Duke Energy Florida, the Florida Office of Public Counsel, the Florida Industrial Power Users Group, White Springs Agricultural Chemicals, Inc. d/b/a PSC Phosphate and NUCOR Steel Florida, Inc. |
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AFUDC | Allowance for funds used during construction |
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ArcLight | ArcLight Capital Partners, LLC |
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ARM | Annual Review Mechanism |
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| ARO | Asset retirement obligations
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Bison | Bison Insurance Company Limited |
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Brookfield | Brookfield Renewable Partners L.P. |
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CCR | Coal Combustion Residuals |
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CCR Rule | A 2015 EPA rule establishing national regulations to provide a comprehensive set of requirements for the management and disposal of CCR from coal-fired power plants |
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CEP | Capital Expenditure Program |
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CPCN | Certificate of Public Convenience and Necessity |
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the Company | Duke Energy Corporation and its subsidiaries |
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Commercial Renewables Disposal Groups | Commercial Renewables business segment, excluding the offshore wind contract for Carolina Long Bay, separated into the utility-scale solar and wind group, the distributed generation group and the remaining assets |
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COVID-19 | Coronavirus Disease 2019 |
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CRC | Cinergy Receivables Company, LLC |
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Crystal River Unit 3 | Crystal River Unit 3 Nuclear Plant |
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DEFR | Duke Energy Florida Receivables, LLC |
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DEPR | Duke Energy Progress Receivables, LLC |
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DERF | Duke Energy Receivables Finance Company, LLC |
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DOE | U.S. Department of Energy |
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Duke Energy | Duke Energy Corporation (collectively with its subsidiaries) |
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Duke Energy Ohio | Duke Energy Ohio, Inc. |
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Duke Energy Progress | Duke Energy Progress, LLC |
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Duke Energy Carolinas | Duke Energy Carolinas, LLC |
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Duke Energy Florida | Duke Energy Florida, LLC |
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Duke Energy Indiana | Duke Energy Indiana, LLC |
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Duke Energy Registrants | Duke Energy, Duke Energy Carolinas, Progress Energy, Duke Energy Progress, Duke Energy Florida, Duke Energy Ohio, Duke Energy Indiana and Piedmont |
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EDIT | Excess deferred income tax |
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EPA | United States Environmental Protection Agency |
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EPS | Earnings (Loss) Per Share |
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ERCOT | Electric Reliability Council of Texas |
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ETR | Effective tax rate |
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EU&I | Electric Utilities and Infrastructure |
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Exchange Act | Securities Exchange Act of 1934 |
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FERC | Federal Energy Regulatory Commission |
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FPSC | Florida Public Service Commission |
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FTR | Financial transmission rights |
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GAAP | Generally accepted accounting principles in the U.S. |
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GAAP Reported Earnings | Net Income Available to Duke Energy Corporation Common Stockholders |
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GAAP Reported EPS | Basic Earnings Per Share Available to Duke Energy Corporation common stockholders |
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GHG | Greenhouse Gas |
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GIC | GIC Private Limited, Singapore's sovereign wealth fund and an experienced investor in U.S. infrastructure |
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GU&I | Gas Utilities and Infrastructure |
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GWh | Gigawatt-hours |
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HB 951 | The Energy Solutions for North Carolina, or House Bill 951, passed in October 2021 |
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IMR | Integrity Management Rider |
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IRA | Inflation Reduction Act |
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IRS | Internal Revenue Service |
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IURC | Indiana Utility Regulatory Commission |
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JDA | Joint Dispatch Agreement |
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KPSC | Kentucky Public Service Commission |
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LLC | Limited Liability Company |
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| MGP | Manufactured gas plant
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| MGP Settlement | Stipulation and Recommendation filed jointly by Duke Energy Ohio the staff of the PUCO, the Office of the Ohio Consumers' Counsel and the Ohio Energy Group on August 31, 2021
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MW | Megawatt |
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MWh | Megawatt-hour |
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MYRP | Multiyear rate plan |
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NCUC | North Carolina Utilities Commission |
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NDTF | Nuclear decommissioning trust funds |
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NPNS | Normal purchase/normal sale |
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NYSE | The New York Stock Exchange |
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OCC | Ohio Consumers' Counsel |
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OPEB | Other Post-Retirement Benefit Obligations |
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the Parent | Duke Energy Corporation holding company |
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PBR | Performance-based regulation |
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Piedmont | Piedmont Natural Gas Company, Inc. |
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Progress Energy | Progress Energy, Inc. |
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PSCSC | Public Service Commission of South Carolina |
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PTC | Production Tax Credit |
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PUCO | Public Utilities Commission of Ohio |
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RTO | Regional Transmission Organization |
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Subsidiary Registrants | Duke Energy Carolinas, Progress Energy, Duke Energy Progress, Duke Energy Florida, Duke Energy Ohio, Duke Energy Indiana and Piedmont |
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TPUC | Tennessee Public Utility Commission |
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U.S. | United States |
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VIE | Variable Interest Entity |
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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 ability to implement our business strategy, including our carbon emission reduction goals;
◦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, asset retirement and construction costs related to carbon emissions reductions, 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;
◦The impact of extraordinary external events, such as the pandemic health event resulting from COVID-19, and their collateral consequences, including the disruption of global supply chains or the economic activity in our service territories;
◦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, reduced customer usage due to cost pressures from inflation or fuel costs, and the economic health of our service territories or variations in customer usage patterns, including energy efficiency efforts, natural gas building and appliance electrification, 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, natural gas electrification, and distributed generation technologies, such as private solar and battery storage, in Duke Energy service territories could result in a reduced number of customers, 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 investor, customer and other stakeholder expectations and demands including heightened emphasis on environmental, social and governance concerns and costs related thereto;
◦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 or other attack, war, vandalism, cybersecurity threats, data security breaches, operational events, 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, an individual utility’s generation mix, 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;
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FORWARD-LOOKING STATEMENTS | |
◦Construction and development risks associated with the completion of the Duke Energy Registrants’ capital investment projects, including risks related to financing, timing and receipt of necessary regulatory approvals, 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;
◦The ability of subsidiaries to pay dividends or distributions to Duke Energy Corporation holding company (the Parent);
◦The performance of projects undertaken by our nonregulated businesses and the success of efforts to invest in and develop new opportunities, as well as the successful sale of the Commercial Renewables Disposal Groups;opportunities;
◦The effect of accounting and reporting pronouncements issued periodically by accounting standard-setting bodies and the SEC;
◦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;
◦Asset or business acquisitions and dispositions may not yield the anticipated benefits; and
◦The actions of activist shareholders could disrupt our operations, impact our ability to execute on our business strategy, or cause fluctuations in the trading price of our common stock.
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 anyan obligation to publicly update or revise any forward-looking statements, whether as a result of new information, future events or otherwise.
ITEM 1. FINANCIAL STATEMENTS
DUKE ENERGY CORPORATION
Condensed Consolidated Statements of Operations
(Unaudited)
| | Three Months Ended | | Nine Months Ended |
| September 30, | | September 30, |
| | | Three Months Ended | |
| | | Three Months Ended | |
| | | Three Months Ended | |
| | | March 31, | | | | | March 31, |
(in millions, except per share amounts) | (in millions, except per share amounts) | 2023 | | 2022 | | 2023 | | 2022 | (in millions, except per share amounts) | | | | | 2024 | | 2023 |
Operating Revenues | Operating Revenues | |
Regulated electric | |
Regulated electric | |
Regulated electric | Regulated electric | $ | 7,640 | | | $ | 7,373 | | | $ | 20,140 | | | $ | 19,381 | |
Regulated natural gas | Regulated natural gas | 284 | | | 397 | | | 1,497 | | | 1,824 | |
Nonregulated electric and other | Nonregulated electric and other | 70 | | | 72 | | | 211 | | | 212 | |
Total operating revenues | Total operating revenues | 7,994 | | | 7,842 | | | 21,848 | | | 21,417 | |
Operating Expenses | Operating Expenses | |
Fuel used in electric generation and purchased power | |
Fuel used in electric generation and purchased power | |
Fuel used in electric generation and purchased power | Fuel used in electric generation and purchased power | 2,571 | | | 2,632 | | | 6,987 | | | 6,421 | |
Cost of natural gas | Cost of natural gas | 57 | | | 189 | | | 434 | | | 859 | |
Operation, maintenance and other | Operation, maintenance and other | 1,428 | | | 1,308 | | | 4,113 | | | 4,223 | |
Depreciation and amortization | Depreciation and amortization | 1,353 | | | 1,299 | | | 3,913 | | | 3,793 | |
Property and other taxes | Property and other taxes | 394 | | | 368 | | | 1,136 | | | 1,118 | |
Impairment of assets and other charges | Impairment of assets and other charges | 88 | | | (4) | | | 96 | | | 202 | |
Total operating expenses | Total operating expenses | 5,891 | | | 5,792 | | | 16,679 | | | 16,616 | |
Gains on Sales of Other Assets and Other, net | Gains on Sales of Other Assets and Other, net | 8 | | | 6 | | | 46 | | | 17 | |
Operating Income | Operating Income | 2,111 | | | 2,056 | | | 5,215 | | | 4,818 | |
Other Income and Expenses | Other Income and Expenses | |
Equity in earnings of unconsolidated affiliates | Equity in earnings of unconsolidated affiliates | 45 | | | 28 | | | 85 | | | 92 | |
Equity in earnings of unconsolidated affiliates | |
Equity in earnings of unconsolidated affiliates | |
Other income and expenses, net | Other income and expenses, net | 133 | | | 87 | | | 431 | | | 290 | |
Total other income and expenses | Total other income and expenses | 178 | | | 115 | | | 516 | | | 382 | |
Interest Expense | Interest Expense | 774 | | | 603 | | | 2,221 | | | 1,760 | |
Income From Continuing Operations Before Income Taxes | Income From Continuing Operations Before Income Taxes | 1,515 | | | 1,568 | | | 3,510 | | | 3,440 | |
Income Tax Expense From Continuing Operations | Income Tax Expense From Continuing Operations | 42 | | | 158 | | | 316 | | | 297 | |
Income From Continuing Operations | Income From Continuing Operations | 1,473 | | | 1,410 | | | 3,194 | | | 3,143 | |
(Loss) Income From Discontinued Operations, net of tax | (152) | | | 3 | | | (1,316) | | | (30) | |
Loss From Discontinued Operations, net of tax | |
Net Income | Net Income | 1,321 | | | 1,413 | | | 1,878 | | | 3,113 | |
Add: Net (Income) Loss Attributable to Noncontrolling Interests | Add: Net (Income) Loss Attributable to Noncontrolling Interests | (69) | | | 9 | | | (42) | | | 73 | |
Net Income Attributable to Duke Energy Corporation | Net Income Attributable to Duke Energy Corporation | 1,252 | | | 1,422 | | | 1,836 | | | 3,186 | |
Less: Preferred Dividends | Less: Preferred Dividends | 39 | | | 39 | | | 92 | | | 92 | |
Net Income Available to Duke Energy Corporation Common Stockholders | Net Income Available to Duke Energy Corporation Common Stockholders | $ | 1,213 | | | $ | 1,383 | | | $ | 1,744 | | | $ | 3,094 | |
| Earnings Per Share – Basic and Diluted | Earnings Per Share – Basic and Diluted | |
Earnings Per Share – Basic and Diluted | |
Earnings Per Share – Basic and Diluted | |
Income from continuing operations available to Duke Energy Corporation common stockholders | |
Income from continuing operations available to Duke Energy Corporation common stockholders | |
Income from continuing operations available to Duke Energy Corporation common stockholders | Income from continuing operations available to Duke Energy Corporation common stockholders | |
Basic and Diluted | Basic and Diluted | $ | 1.83 | | | $ | 1.78 | | | $ | 3.94 | | | $ | 3.95 | |
Basic and Diluted | |
Basic and Diluted | |
| (Loss) Income from discontinued operations attributable to Duke Energy Corporation common stockholders | |
Loss from discontinued operations attributable to Duke Energy Corporation common stockholders | |
Loss from discontinued operations attributable to Duke Energy Corporation common stockholders | |
Loss from discontinued operations attributable to Duke Energy Corporation common stockholders | |
Basic and Diluted | |
Basic and Diluted | |
Basic and Diluted | Basic and Diluted | $ | (0.24) | | | $ | 0.03 | | | $ | (1.67) | | | $ | 0.08 | |
| Net income available to Duke Energy Corporation common stockholders | Net income available to Duke Energy Corporation common stockholders | |
Net income available to Duke Energy Corporation common stockholders | |
Net income available to Duke Energy Corporation common stockholders | |
Basic and Diluted | |
Basic and Diluted | |
Basic and Diluted | Basic and Diluted | $ | 1.59 | | | $ | 1.81 | | | $ | 2.27 | | | $ | 4.03 | |
| Weighted Average Shares Outstanding | Weighted Average Shares Outstanding | |
Weighted Average Shares Outstanding | |
Weighted Average Shares Outstanding | |
Basic and Diluted | |
Basic and Diluted | |
Basic and Diluted | Basic and Diluted | 771 | | | 770 | | | 771 | | | 770 | |
|
See Notes to Condensed Consolidated Financial Statements
9
DUKE ENERGY CORPORATION
Condensed Consolidated Statements of Comprehensive Income
(Unaudited)
| | Three Months Ended | | Nine Months Ended |
| September 30, | | September 30, |
| | | Three Months Ended | |
| | | Three Months Ended | |
| | | Three Months Ended | |
| | | March 31, | | | | | March 31, |
(in millions) | (in millions) | 2023 | | 2022 | | 2023 | | 2022 | (in millions) | | | | | 2024 | | 2023 |
Net Income | Net Income | $ | 1,321 | | | $ | 1,413 | | | $ | 1,878 | | | $ | 3,113 | |
Other Comprehensive Income, net of tax(a) | Other Comprehensive Income, net of tax(a) | |
| Pension and OPEB adjustments | Pension and OPEB adjustments | (1) | | | (7) | | | (1) | | | (3) | |
Net unrealized gains on cash flow hedges | 200 | | | 14 | | | 206 | | | 276 | |
| Pension and OPEB adjustments | |
| Pension and OPEB adjustments | |
Net unrealized gains (losses) on cash flow hedges | |
Reclassification into earnings from cash flow hedges | Reclassification into earnings from cash flow hedges | 24 | | | — | | | 28 | | | 9 | |
| Net unrealized gains (losses) on fair value hedges | Net unrealized gains (losses) on fair value hedges | 15 | | | (8) | | | 30 | | | (20) | |
Net unrealized gains (losses) on fair value hedges | |
Net unrealized gains (losses) on fair value hedges | |
Unrealized (losses) gains on available-for-sale securities | Unrealized (losses) gains on available-for-sale securities | (6) | | | 1 | | | (2) | | | (20) | |
| Other Comprehensive Income, net of tax | 232 | | | — | | | 261 | | | 242 | |
Other Comprehensive Income (Loss), net of tax | |
Other Comprehensive Income (Loss), net of tax | |
Other Comprehensive Income (Loss), net of tax | |
Comprehensive Income | Comprehensive Income | 1,553 | | | 1,413 | | | 2,139 | | | 3,355 | |
Add: Comprehensive (Income) Loss Attributable to Noncontrolling Interests | Add: Comprehensive (Income) Loss Attributable to Noncontrolling Interests | (69) | | | 4 | | | (42) | | | 56 | |
Comprehensive Income Attributable to Duke Energy | Comprehensive Income Attributable to Duke Energy | 1,484 | | | 1,417 | | | 2,097 | | | 3,411 | |
Less: Preferred Dividends | Less: Preferred Dividends | 39 | | | 39 | | | 92 | | | 92 | |
Comprehensive Income Available to Duke Energy Corporation Common Stockholders | Comprehensive Income Available to Duke Energy Corporation Common Stockholders | $ | 1,445 | | | $ | 1,378 | | | $ | 2,005 | | | $ | 3,319 | |
(a)Net of income tax expense of approximately $69$34 million and tax benefit of $8 million for the three months ended September 30,March 31, 2024, and 2023, and approximately $78 million and $72 million for the nine months ended September 30, 2023, and 2022, respectively. All other periods presented include immaterial income tax impacts.
See Notes to Condensed Consolidated Financial Statements
10
DUKE ENERGY CORPORATION
Condensed Consolidated Balance Sheets
(Unaudited)
| (in millions) | (in millions) | September 30, 2023 | | December 31, 2022 | (in millions) | March 31, 2024 | | December 31, 2023 |
ASSETS | ASSETS | |
Current Assets | Current Assets | |
Current Assets | |
Current Assets | |
Cash and cash equivalents | |
Cash and cash equivalents | |
Cash and cash equivalents | Cash and cash equivalents | $ | 324 | | | $ | 409 | |
| Receivables (net of allowance for doubtful accounts of $49 at 2023 and $40 at 2022) | 831 | | | 1,309 | |
Receivables of VIEs (net of allowance for doubtful accounts of $154 at 2023 and $176 at 2022) | 3,244 | | | 3,106 | |
Inventory | 4,118 | | | 3,584 | |
Regulatory assets (includes $109 at 2023 and $106 at 2022 related to VIEs) | 3,489 | | | 3,485 | |
Receivables (net of allowance for doubtful accounts of $102 at 2024 and $55 at 2023) | |
Receivables (net of allowance for doubtful accounts of $102 at 2024 and $55 at 2023) | |
Receivables (net of allowance for doubtful accounts of $102 at 2024 and $55 at 2023) | |
Receivables of VIEs (net of allowance for doubtful accounts of $102 at 2024 and $150 at 2023) | |
Inventory (includes $470 at 2024 and $462 at 2023 related to VIEs) | |
Regulatory assets (includes $110 at 2024 and 2023 related to VIEs) | |
Assets held for sale | Assets held for sale | 440 | | | 356 | |
Other (includes $56 at 2023 and $116 at 2022 related to VIEs) | 602 | | | 973 | |
Other (includes $44 at 2024 and $90 at 2023 related to VIEs) | |
Total current assets | Total current assets | 13,048 | | | 13,222 | |
Property, Plant and Equipment | Property, Plant and Equipment | |
Cost | Cost | 170,941 | | | 163,839 | |
Cost | |
Cost | |
Accumulated depreciation and amortization | Accumulated depreciation and amortization | (54,994) | | | (52,100) | |
Facilities to be retired, net | — | | | 9 | |
| Net property, plant and equipment | |
Net property, plant and equipment | |
Net property, plant and equipment | Net property, plant and equipment | 115,947 | | | 111,748 | |
Other Noncurrent Assets | Other Noncurrent Assets | |
Goodwill | Goodwill | 19,303 | | | 19,303 | |
Regulatory assets (includes $1,668 at 2023 and $1,715 at 2022 related to VIEs) | 13,745 | | | 14,645 | |
Goodwill | |
Goodwill | |
Regulatory assets (includes $1,616 at 2024 and $1,642 at 2023 related to VIEs) | |
Nuclear decommissioning trust funds | Nuclear decommissioning trust funds | 9,245 | | | 8,637 | |
Operating lease right-of-use assets, net | Operating lease right-of-use assets, net | 1,073 | | | 1,042 | |
Investments in equity method unconsolidated affiliates | Investments in equity method unconsolidated affiliates | 505 | | | 455 | |
Assets held for sale | Assets held for sale | 4,596 | | | 5,634 | |
Other (includes $43 at 2023 and $52 at 2022 related to VIEs) | 3,698 | | | 3,400 | |
Other | |
Total other noncurrent assets | Total other noncurrent assets | 52,165 | | | 53,116 | |
Total Assets | Total Assets | $ | 181,160 | | | $ | 178,086 | |
LIABILITIES AND EQUITY | LIABILITIES AND EQUITY | |
Current Liabilities | Current Liabilities | |
Accounts payable | $ | 3,539 | | | $ | 4,754 | |
Current Liabilities | |
Current Liabilities | |
Accounts payable (includes $188 at 2024 and 2023 related to VIEs) | |
Accounts payable (includes $188 at 2024 and 2023 related to VIEs) | |
Accounts payable (includes $188 at 2024 and 2023 related to VIEs) | |
Notes payable and commercial paper | Notes payable and commercial paper | 3,154 | | | 3,952 | |
Taxes accrued | Taxes accrued | 991 | | | 722 | |
Interest accrued | Interest accrued | 750 | | | 626 | |
Current maturities of long-term debt (includes $428 at 2023 and $350 at 2022 related to VIEs) | 4,034 | | | 3,878 | |
Current maturities of long-term debt (includes $929 at 2024 and $428 at 2023 related to VIEs) | |
Asset retirement obligations | Asset retirement obligations | 620 | | | 773 | |
Regulatory liabilities | Regulatory liabilities | 1,396 | | | 1,466 | |
Liabilities associated with assets held for sale | Liabilities associated with assets held for sale | 589 | | | 535 | |
Other | Other | 2,087 | | | 2,167 | |
Total current liabilities | Total current liabilities | 17,160 | | | 18,873 | |
Long-Term Debt (includes $3,025 at 2023 and $3,108 at 2022 related to VIEs) | 71,353 | | | 65,873 | |
Long-Term Debt (includes $2,134 at 2024 and $3,000 at 2023 related to VIEs) | |
Other Noncurrent Liabilities | Other Noncurrent Liabilities | |
Deferred income taxes | |
Deferred income taxes | |
Deferred income taxes | Deferred income taxes | 10,438 | | | 9,964 | |
Asset retirement obligations | Asset retirement obligations | 11,613 | | | 11,955 | |
Regulatory liabilities | Regulatory liabilities | 13,396 | | | 13,582 | |
Operating lease liabilities | Operating lease liabilities | 897 | | | 876 | |
Accrued pension and other post-retirement benefit costs | Accrued pension and other post-retirement benefit costs | 662 | | | 832 | |
Investment tax credits | Investment tax credits | 856 | | | 849 | |
Liabilities associated with assets held for sale | Liabilities associated with assets held for sale | 1,634 | | | 1,927 | |
Other (includes $54 at 2023 related to VIEs) | 1,325 | | | 1,502 | |
Other (includes $42 at 2024 and $35 at 2023 related to VIEs) | |
Total other noncurrent liabilities | Total other noncurrent liabilities | 40,821 | | | 41,487 | |
Commitments and Contingencies | Commitments and Contingencies | | Commitments and Contingencies | | | |
Equity | Equity | |
Preferred stock, Series A, $0.001 par value, 40 million depositary shares authorized and outstanding at 2023 and 2022 | 973 | | | 973 | |
Preferred stock, Series B, $0.001 par value, 1 million shares authorized and outstanding at 2023 and 2022 | 989 | | | 989 | |
Common stock, $0.001 par value, 2 billion shares authorized; 771 million and 770 million shares outstanding at 2023 and 2022 | 1 | | | 1 | |
Preferred stock, Series A, $0.001 par value, 40 million depositary shares authorized and outstanding at 2024 and 2023 | |
Preferred stock, Series A, $0.001 par value, 40 million depositary shares authorized and outstanding at 2024 and 2023 | |
Preferred stock, Series A, $0.001 par value, 40 million depositary shares authorized and outstanding at 2024 and 2023 | |
Preferred stock, Series B, $0.001 par value, 1 million shares authorized and outstanding at 2024 and 2023 | |
Common stock, $0.001 par value, 2 billion shares authorized; 772 million and 771 million shares outstanding at 2024 and 2023 | |
Additional paid-in capital | Additional paid-in capital | 44,886 | | | 44,862 | |
Retained earnings | Retained earnings | 2,036 | | | 2,637 | |
Accumulated other comprehensive loss | 121 | | | (140) | |
Accumulated other comprehensive income (loss) | |
Total Duke Energy Corporation stockholders' equity | Total Duke Energy Corporation stockholders' equity | 49,006 | | | 49,322 | |
Noncontrolling interests | Noncontrolling interests | 2,820 | | | 2,531 | |
Total equity | Total equity | 51,826 | | | 51,853 | |
Total Liabilities and Equity | Total Liabilities and Equity | $ | 181,160 | | | $ | 178,086 | |
See Notes to Condensed Consolidated Financial Statements
11
DUKE ENERGY CORPORATION
Condensed Consolidated Statements of Cash Flows
(Unaudited)
| | Nine Months Ended |
| September 30, |
| Three Months Ended | | | Three Months Ended |
| March 31, | | | March 31, |
(in millions) | (in millions) | 2023 | | 2022 | (in millions) | 2024 | | 2023 |
CASH FLOWS FROM OPERATING ACTIVITIES | CASH FLOWS FROM OPERATING ACTIVITIES | |
Net income | Net income | $ | 1,878 | | | $ | 3,113 | |
Net income | |
Net income | |
Adjustments to reconcile net income to net cash provided by operating activities: | Adjustments to reconcile net income to net cash provided by operating activities: | |
Depreciation, amortization and accretion (including amortization of nuclear fuel) | Depreciation, amortization and accretion (including amortization of nuclear fuel) | 4,538 | | | 4,414 | |
Depreciation, amortization and accretion (including amortization of nuclear fuel) | |
Depreciation, amortization and accretion (including amortization of nuclear fuel) | |
Equity component of AFUDC | Equity component of AFUDC | (146) | | | (151) | |
(Gains) Losses on sales of Commercial Renewables Disposal Groups | |
Gains on sales of other assets | Gains on sales of other assets | (46) | | | (16) | |
Impairment of assets and other charges | Impairment of assets and other charges | 1,699 | | | 202 | |
Deferred income taxes | Deferred income taxes | (29) | | | 209 | |
Equity in earnings of unconsolidated affiliates | Equity in earnings of unconsolidated affiliates | (70) | | | (87) | |
| Contributions to qualified pension plans | (100) | | | (58) | |
| Payments for asset retirement obligations | |
| Payments for asset retirement obligations | |
| Payments for asset retirement obligations | Payments for asset retirement obligations | (423) | | | (418) | |
Provision for rate refunds | Provision for rate refunds | (59) | | | (97) | |
(Increase) decrease in | (Increase) decrease in | |
Net realized and unrealized mark-to-market and hedging transactions | Net realized and unrealized mark-to-market and hedging transactions | 29 | | | 33 | |
Net realized and unrealized mark-to-market and hedging transactions | |
Net realized and unrealized mark-to-market and hedging transactions | |
Receivables | Receivables | 481 | | | (356) | |
| Inventory | |
Inventory | |
Inventory | Inventory | (531) | | | (290) | |
Other current assets | Other current assets | 40 | | | (2,403) | |
Increase (decrease) in | Increase (decrease) in | |
Accounts payable | Accounts payable | (972) | | | 504 | |
Accounts payable | |
Accounts payable | |
| Taxes accrued | |
Taxes accrued | |
Taxes accrued | Taxes accrued | 277 | | | 206 | |
Other current liabilities | Other current liabilities | (116) | | | 263 | |
Other assets | Other assets | 491 | | | (68) | |
Other liabilities | Other liabilities | 368 | | | 188 | |
Net cash provided by operating activities | Net cash provided by operating activities | 7,309 | | | 5,188 | |
CASH FLOWS FROM INVESTING ACTIVITIES | CASH FLOWS FROM INVESTING ACTIVITIES | |
Capital expenditures | Capital expenditures | (9,310) | | | (8,148) | |
Capital expenditures | |
Capital expenditures | |
Contributions to equity method investments | Contributions to equity method investments | (30) | | | (37) | |
| | Purchases of debt and equity securities | |
| Purchases of debt and equity securities | |
| Purchases of debt and equity securities | Purchases of debt and equity securities | (2,811) | | | (3,619) | |
Proceeds from sales and maturities of debt and equity securities | Proceeds from sales and maturities of debt and equity securities | 2,848 | | | 3,691 | |
| Net proceeds from the sales of other assets | Net proceeds from the sales of other assets | 130 | | | — | |
Net proceeds from the sales of other assets | |
Net proceeds from the sales of other assets | |
| | Other | |
| Other | |
| Other | Other | (578) | | | (517) | |
Net cash used in investing activities | Net cash used in investing activities | (9,751) | | | (8,630) | |
CASH FLOWS FROM FINANCING ACTIVITIES | CASH FLOWS FROM FINANCING ACTIVITIES | |
Proceeds from the: | Proceeds from the: | |
Proceeds from the: | |
Proceeds from the: | |
Issuance of long-term debt | |
Issuance of long-term debt | |
Issuance of long-term debt | Issuance of long-term debt | 8,704 | | | 9,466 | |
| Issuance of common stock | |
Issuance of common stock | |
Issuance of common stock | |
| Payments for the redemption of long-term debt | |
Payments for the redemption of long-term debt | |
Payments for the redemption of long-term debt | Payments for the redemption of long-term debt | (3,097) | | | (3,803) | |
Proceeds from the issuance of short-term debt with original maturities greater than 90 days | Proceeds from the issuance of short-term debt with original maturities greater than 90 days | 575 | | | 80 | |
Payments for the redemption of short-term debt with original maturities greater than 90 days | Payments for the redemption of short-term debt with original maturities greater than 90 days | (110) | | | (287) | |
Notes payable and commercial paper | Notes payable and commercial paper | (1,404) | | | 476 | |
| Contributions from noncontrolling interests | Contributions from noncontrolling interests | 278 | | | 132 | |
Contributions from noncontrolling interests | |
Contributions from noncontrolling interests | |
Dividends paid | Dividends paid | (2,438) | | | (2,389) | |
| Other | Other | (95) | | | (124) | |
Other | |
Other | |
Net cash provided by financing activities | Net cash provided by financing activities | 2,413 | | | 3,551 | |
| Net (decrease) increase in cash, cash equivalents and restricted cash | (29) | | | 109 | |
Net increase in cash, cash equivalents and restricted cash | |
Net increase in cash, cash equivalents and restricted cash | |
Net increase in cash, cash equivalents and restricted cash | |
Cash, cash equivalents and restricted cash at beginning of period | Cash, cash equivalents and restricted cash at beginning of period | 603 | | | 520 | |
Cash, cash equivalents and restricted cash at end of period | Cash, cash equivalents and restricted cash at end of period | $ | 574 | | | $ | 629 | |
Supplemental Disclosures: | Supplemental Disclosures: | |
| Significant non-cash transactions: | Significant non-cash transactions: | |
| Significant non-cash transactions: | |
| Significant non-cash transactions: | |
Accrued capital expenditures | |
Accrued capital expenditures | |
Accrued capital expenditures | Accrued capital expenditures | $ | 1,528 | | | $ | 1,387 | |
|
See Notes to Condensed Consolidated Financial Statements
12
DUKE ENERGY CORPORATION
Condensed Consolidated Statements of Changes in Equity
(Unaudited)
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| | Three Months Ended September 30, 2022 and 2023 |
| | | | | | | | Accumulated Other Comprehensive | | | |
| | | | | | | | (Loss) Income | | | |
| | | | | | | | Net | Net Unrealized | | Total | | |
| | | | | | | | Gains | (Losses) Gains | | Duke Energy | | |
| | | Common | | Additional | | | (Losses) | on Available- | Pension and | Corporation | Non- | |
| | Preferred | Stock | Common | Paid-in | Retained | | on | for-Sale- | OPEB | Stockholders' | controlling | Total |
(in millions) | | Stock | Shares | Stock | Capital | Earnings | | Hedges(b) | Securities | Adjustments | Equity | Interests | Equity |
Balance at June 30, 2022 | | $ | 1,962 | | 770 | | $ | 1 | | $ | 44,373 | | $ | 3,457 | | | $ | 15 | | $ | (23) | | $ | (65) | | $ | 49,720 | | $ | 1,864 | | $ | 51,584 | |
Net income (loss) | | — | | — | | — | | — | | 1,383 | | | — | | — | | — | | 1,383 | | (9) | | 1,374 | |
Other comprehensive income (loss) | | — | | — | | — | | — | | — | | | 1 | | 1 | | (7) | | (5) | | 5 | | — | |
| | | | | | | | | | | | | |
| | | | | | | | | | | | | |
Common stock issuances, including dividend reinvestment and employee benefits | | — | | — | | — | | 21 | | — | | | — | | — | | — | | 21 | | — | | 21 | |
| | | | | | | | | | | | | |
Common stock dividends | | — | | — | | — | | — | | (776) | | | — | | — | | — | | (776) | | — | | (776) | |
| | | | | | | | | | | | | |
| | | | | | | | | | | | | |
Contribution from noncontrolling interests, net of transaction costs(a) | | — | | — | | — | | — | | — | | | — | | — | | — | | — | | 6 | | 6 | |
Distributions to noncontrolling interest in subsidiaries | | — | | — | | — | | — | | — | | | — | | — | | — | | — | | (42) | | (42) | |
Other | | — | | — | | — | | 3 | | (1) | | | — | | — | | — | | 2 | | — | | 2 | |
Balance at September 30, 2022 | | $ | 1,962 | | $ | 770 | | $ | 1 | | $ | 44,397 | | $ | 4,063 | | | $ | 16 | | $ | (22) | | $ | (72) | | $ | 50,345 | | $ | 1,824 | | $ | 52,169 | |
| | | | | | | | | | | | | |
Balance at June 30, 2023 | | $ | 1,962 | | 771 | | $ | 1 | | $ | 44,866 | | $ | 1,615 | | | $ | (4) | | $ | (19) | | $ | (88) | | $ | 48,333 | | $ | 2,738 | | $ | 51,071 | |
Net income | | — | | — | | — | | — | | 1,213 | | | — | | — | | — | | 1,213 | | 69 | | 1,282 | |
Other comprehensive income (loss) | | — | | — | | — | | — | | — | | | 239 | | (6) | | (1) | | 232 | | — | | 232 | |
| | | | | | | | | | | | | |
Common stock issuances, including dividend reinvestment and employee benefits | | — | | — | | — | | 22 | | — | | | — | | — | | — | | 22 | | — | | 22 | |
| | | | | | | | | | | | | |
Common stock dividends | | — | | — | | — | | — | | (793) | | | — | | — | | — | | (793) | | — | | (793) | |
| | | | | | | | | | | | | |
Contribution from noncontrolling interests, net of transaction costs(a) | | — | | — | | — | | — | | — | | | — | | — | | — | | — | | 30 | | 30 | |
Distributions to noncontrolling interest in subsidiaries | | — | | — | | — | | — | | — | | | — | | — | | — | | — | | (20) | | (20) | |
Other | | — | | — | | — | | (2) | | 1 | | | — | | — | | — | | (1) | | 3 | | 2 | |
Balance at September 30, 2023 | | $ | 1,962 | | $ | 771 | | $ | 1 | | $ | 44,886 | | $ | 2,036 | | | $ | 235 | | $ | (25) | | $ | (89) | | $ | 49,006 | | $ | 2,820 | | $ | 51,826 | |
See Notes to Condensed Consolidated Financial Statements
13
DUKE ENERGY CORPORATION
Condensed Consolidated Statements of Changes in Equity
(Unaudited)
| | | Nine Months Ended September 30, 2022 and 2023 |
| | | | Accumulated Other Comprehensive | |
| | | | (Loss) Income | |
| | | | Net | | Net Unrealized | | Total | |
| | | | Gains | | Gains (Losses) | | Duke Energy | |
| | | Common | | Additional | | | (Losses) | | on Available- | Pension and | Corporation | Non- | |
| | Preferred | Stock | Common | Paid-in | Retained | | on | | for-Sale- | OPEB | Stockholders' | controlling | Total |
| | Three Months Ended March 31, 2023 and 2024 | |
| | Three Months Ended March 31, 2023 and 2024 | |
| | Three Months Ended March 31, 2023 and 2024 | |
| | | | | | | | Accumulated Other Comprehensive | |
| | | | | | | | (Loss) Income | |
| | | | | | | | (Loss) Income | |
| | | | | | | | (Loss) Income | |
| | | | | | | | Net | |
| | | | | | | | Net | |
| | | | | | | | Net | |
| | | | | | | | Gains | |
| | | | | | | | Gains | |
| | | | | | | | Gains | |
| | | Common | |
| | | Common | |
| | | Common | |
| | Preferred | |
| | Preferred | |
| | Preferred | | Stock | Common | Paid-in | Retained | | on | | for-Sale- | OPEB | Stockholders' | controlling | Total |
(in millions) | (in millions) | | Stock | Shares | Stock | Capital | Earnings | | Hedges(b) | | Securities | Adjustments | Equity | Interests | Equity | (in millions) | | Stock | Shares | Stock | Capital | Earnings | | Hedges(b) | | Securities | Adjustments | Equity | Interests | Equity |
Balance at December 31, 2021 | | $ | 1,962 | | 769 | | $ | 1 | | $ | 44,371 | | $ | 3,265 | | | $ | (232) | | | $ | (2) | | $ | (69) | | $ | 49,296 | | $ | 1,840 | | $ | 51,136 | |
Balance at December 31, 2022 | |
Net income (loss) | Net income (loss) | | — | | — | | — | | — | | 3,094 | | | — | | | — | | — | | 3,094 | | (73) | | 3,021 | |
Other comprehensive income (loss) | Other comprehensive income (loss) | | — | | — | | — | | — | | — | | | 248 | | | (20) | | (3) | | 225 | | 17 | | 242 | |
| Common stock issuances, including dividend reinvestment and employee benefits | Common stock issuances, including dividend reinvestment and employee benefits | | — | | 1 | | — | | 41 | | — | | | — | | | — | | — | | 41 | | — | | 41 | |
| Common stock issuances, including dividend reinvestment and employee benefits | |
| Common stock issuances, including dividend reinvestment and employee benefits | |
| Common stock dividends | |
Common stock dividends | |
Common stock dividends | Common stock dividends | | — | | — | | — | | — | | (2,297) | | | — | | | — | | — | | (2,297) | | — | | (2,297) | |
| Sale of noncontrolling interest | |
Sale of noncontrolling interest | |
Sale of noncontrolling interest | Sale of noncontrolling interest | | — | | — | | — | | (17) | | — | | | — | | | — | | — | | (17) | | 38 | | 21 | |
Contributions from noncontrolling interests, net of transaction costs(a) | Contributions from noncontrolling interests, net of transaction costs(a) | | — | | — | | — | | — | | — | | | — | | | — | | — | | — | | 94 | | 94 | |
Distributions to noncontrolling interest in subsidiaries | Distributions to noncontrolling interest in subsidiaries | | — | | — | | — | | — | | — | | | — | | | — | | — | | — | | (92) | | (92) | |
Other | Other | | — | | — | | — | | 2 | | 1 | | | — | | | — | | — | | 3 | | — | | 3 | |
Balance at September 30, 2022 | | $ | 1,962 | | 770 | | $ | 1 | | $ | 44,397 | | $ | 4,063 | | | $ | 16 | | | $ | (22) | | $ | (72) | | $ | 50,345 | | $ | 1,824 | | $ | 52,169 | |
Balance at March 31, 2023 | |
| Balance at December 31, 2022 | | $ | 1,962 | | 770 | | $ | 1 | | $ | 44,862 | | $ | 2,637 | | | $ | (29) | | | $ | (23) | | $ | (88) | | $ | 49,322 | | $ | 2,531 | | $ | 51,853 | |
Balance at December 31, 2023 | |
Balance at December 31, 2023 | |
Balance at December 31, 2023 | |
Net income | Net income | | — | | — | | — | | — | | 1,744 | | | — | | | — | | — | | 1,744 | | 42 | | 1,786 | |
Other comprehensive income (loss) | Other comprehensive income (loss) | | — | | — | | — | | — | | — | | | 264 | | | (2) | | (1) | | 261 | | — | | 261 | |
| Common stock issuances, including dividend reinvestment and employee benefits | Common stock issuances, including dividend reinvestment and employee benefits | | — | | 1 | | — | | 43 | | — | | | — | | | — | | — | | 43 | | — | | 43 | |
| Common stock issuances, including dividend reinvestment and employee benefits | |
| Common stock issuances, including dividend reinvestment and employee benefits | |
| Common stock dividends | Common stock dividends | | — | | — | | — | | — | | (2,346) | | | — | | | — | | — | | (2,346) | | — | | (2,346) | |
Sale of noncontrolling interest | | — | | — | | — | | (13) | | — | | | — | | | — | | — | | (13) | | 10 | | (3) | |
Contributions from noncontrolling interests, net of transaction costs(a) | | — | | — | | — | | — | | — | | | — | | | — | | — | | — | | 278 | | 278 | |
Distributions to noncontrolling interest in subsidiaries | | — | | — | | — | | — | | — | | | — | | | — | | — | | — | | (45) | | (45) | |
Common stock dividends | |
Common stock dividends | |
| Other | Other | | — | | — | | — | | (6) | | 1 | | | — | | | — | | — | | (5) | | 4 | | (1) | |
Balance at September 30, 2023 | | $ | 1,962 | | 771 | | $ | 1 | | $ | 44,886 | | $ | 2,036 | | | $ | 235 | | | $ | (25) | | $ | (89) | | $ | 49,006 | | $ | 2,820 | | $ | 51,826 | |
| Other | |
| Other | |
Balance at March 31, 2024 | |
(a)Relates primarily to tax equity financing activity in the Commercial Renewables Disposal Groups.
(b)See Duke Energy Condensed Consolidated Statements of Comprehensive Income for detailed activity related to Cash Flow and Fair Value hedges.
See Notes to Condensed Consolidated Financial Statements
1413
DUKE ENERGY CAROLINAS, LLC
Condensed Consolidated Statements of Operations and Comprehensive Income
(Unaudited)
| | Three Months Ended | | Nine Months Ended |
| September 30, | | September 30, |
| | | Three Months Ended | |
| | | Three Months Ended | |
| | | Three Months Ended | |
| | | March 31, | | | | | March 31, |
(in millions) | (in millions) | 2023 | | 2022 | | 2023 | | 2022 | (in millions) | | | | | 2024 | | 2023 |
Operating Revenues | Operating Revenues | $ | 2,393 | | | $ | 2,175 | | | $ | 6,155 | | | $ | 5,844 | |
Operating Expenses | Operating Expenses | |
Fuel used in electric generation and purchased power | |
Fuel used in electric generation and purchased power | |
Fuel used in electric generation and purchased power | Fuel used in electric generation and purchased power | 690 | | | 544 | | | 1,823 | | | 1,423 | |
Operation, maintenance and other | Operation, maintenance and other | 424 | | | 436 | | | 1,285 | | | 1,410 | |
Depreciation and amortization | Depreciation and amortization | 407 | | | 375 | | | 1,186 | | | 1,138 | |
Property and other taxes | Property and other taxes | 90 | | | 88 | | | 276 | | | 258 | |
Impairment of assets and other charges | Impairment of assets and other charges | 64 | | | 6 | | | 70 | | | (3) | |
Total operating expenses | Total operating expenses | 1,675 | | | 1,449 | | | 4,640 | | | 4,226 | |
Gains on Sales of Other Assets and Other, net | Gains on Sales of Other Assets and Other, net | — | | | 4 | | | 26 | | | 4 | |
Operating Income | Operating Income | 718 | | | 730 | | | 1,541 | | | 1,622 | |
Other Income and Expenses, net | Other Income and Expenses, net | 63 | | | 59 | | | 181 | | | 172 | |
Interest Expense | Interest Expense | 172 | | | 131 | | | 504 | | | 415 | |
Income Before Income Taxes | Income Before Income Taxes | 609 | | | 658 | | | 1,218 | | | 1,379 | |
Income Tax Expense | Income Tax Expense | 30 | | | 34 | | | 97 | | | 87 | |
Net Income and Comprehensive Income | Net Income and Comprehensive Income | $ | 579 | | | $ | 624 | | | $ | 1,121 | | | $ | 1,292 | |
|
See Notes to Condensed Consolidated Financial Statements
14
DUKE ENERGY CAROLINAS, LLC
Condensed Consolidated Balance Sheets
(Unaudited)
| | | | | | | | | | | |
(in millions) | March 31, 2024 | | December 31, 2023 |
ASSETS | | | |
Current Assets | | | |
Cash and cash equivalents | $ | 5 | | | $ | 9 | |
Receivables (net of allowance for doubtful accounts of $13 at 2024 and $11 at 2023) | 245 | | | 265 | |
Receivables of VIEs (net of allowance for doubtful accounts of $49 at 2024 and $45 at 2023) | 997 | | | 991 | |
Receivables from affiliated companies | 173 | | | 203 | |
| | | |
Inventory | 1,478 | | | 1,484 | |
Regulatory assets (includes $12 at 2024 and 2023 related to VIEs) | 1,347 | | | 1,564 | |
Other (includes $5 at 2024 and $9 at 2023 related to VIEs) | 62 | | | 31 | |
Total current assets | 4,307 | | | 4,547 | |
Property, Plant and Equipment | | | |
Cost | 57,477 | | | 56,670 | |
Accumulated depreciation and amortization | (20,210) | | | (19,896) | |
| | | |
Net property, plant and equipment | 37,267 | | | 36,774 | |
Other Noncurrent Assets | | | |
Regulatory assets (includes $193 at 2024 and $196 at 2023 related to VIEs) | 3,850 | | | 3,916 | |
Nuclear decommissioning trust funds | 6,077 | | | 5,686 | |
Operating lease right-of-use assets, net | 75 | | | 78 | |
Other | 1,116 | | | 1,109 | |
Total other noncurrent assets | 11,118 | | | 10,789 | |
Total Assets | $ | 52,692 | | | $ | 52,110 | |
LIABILITIES AND EQUITY | | | |
Current Liabilities | | | |
Accounts payable | $ | 925 | | | $ | 1,183 | |
Accounts payable to affiliated companies | 230 | | | 195 | |
Notes payable to affiliated companies | 55 | | | 668 | |
Taxes accrued | 148 | | | 281 | |
Interest accrued | 161 | | | 179 | |
Current maturities of long-term debt (includes $511 at 2024 and $10 at 2023 related to VIEs) | 520 | | | 19 | |
Asset retirement obligations | 236 | | | 224 | |
Regulatory liabilities | 574 | | | 587 | |
Other | 617 | | | 702 | |
Total current liabilities | 3,466 | | | 4,038 | |
Long-Term Debt (includes $203 at 2024 and $708 at 2023 related to VIEs) | 16,199 | | | 15,693 | |
Long-Term Debt Payable to Affiliated Companies | 300 | | | 300 | |
Other Noncurrent Liabilities | | | |
Deferred income taxes | 4,329 | | | 4,379 | |
Asset retirement obligations | 3,779 | | | 3,789 | |
Regulatory liabilities | 6,302 | | | 5,990 | |
Operating lease liabilities | 72 | | | 75 | |
Accrued pension and other post-retirement benefit costs | 54 | | | 57 | |
Investment tax credits | 300 | | | 301 | |
Other (includes $19 at 2024 and $17 at 2023 related to VIEs) | 554 | | | 581 | |
Total other noncurrent liabilities | 15,390 | | | 15,172 | |
Commitments and Contingencies | | | |
Equity | | | |
Member's equity | 17,343 | | | 16,913 | |
Accumulated other comprehensive loss | (6) | | | (6) | |
Total equity | 17,337 | | | 16,907 | |
Total Liabilities and Equity | $ | 52,692 | | | $ | 52,110 | |
See Notes to Condensed Consolidated Financial Statements
15
DUKE ENERGY CAROLINAS, LLC
Condensed Consolidated Balance SheetsStatements of Cash Flows
(Unaudited)
| | | | | | | | | | | |
(in millions) | September 30, 2023 | | December 31, 2022 |
ASSETS | | | |
Current Assets | | | |
Cash and cash equivalents | $ | 19 | | | $ | 44 | |
Receivables (net of allowance for doubtful accounts of $9 at 2023 and $3 at 2022) | 279 | | | 338 | |
Receivables of VIEs (net of allowance for doubtful accounts of $47 at 2023 and $65 at 2022) | 1,028 | | | 928 | |
Receivables from affiliated companies | 165 | | | 390 | |
| | | |
Inventory | 1,422 | | | 1,164 | |
Regulatory assets (includes $12 at 2023 and 2022 related to VIEs) | 1,447 | | | 1,095 | |
Other (includes $5 at 2023 and $8 at 2022 related to VIEs) | 86 | | | 216 | |
Total current assets | 4,446 | | | 4,175 | |
Property, Plant and Equipment | | | |
Cost | 56,888 | | | 54,650 | |
Accumulated depreciation and amortization | (19,668) | | | (18,669) | |
| | | |
Net property, plant and equipment | 37,220 | | | 35,981 | |
Other Noncurrent Assets | | | |
Regulatory assets (includes $199 at 2023 and $208 at 2022 related to VIEs) | 4,020 | | | 4,293 | |
Nuclear decommissioning trust funds | 5,156 | | | 4,783 | |
Operating lease right-of-use assets, net | 75 | | | 78 | |
Other | 1,087 | | | 1,036 | |
Total other noncurrent assets | 10,338 | | | 10,190 | |
Total Assets | $ | 52,004 | | | $ | 50,346 | |
LIABILITIES AND EQUITY | | | |
Current Liabilities | | | |
Accounts payable | $ | 1,015 | | | $ | 1,472 | |
Accounts payable to affiliated companies | 221 | | | 209 | |
Notes payable to affiliated companies | 331 | | | 1,233 | |
Taxes accrued | 350 | | | 228 | |
Interest accrued | 150 | | | 120 | |
Current maturities of long-term debt (includes $11 at 2023 and $10 at 2022 related to VIEs) | 19 | | | 1,018 | |
Asset retirement obligations | 238 | | | 261 | |
Regulatory liabilities | 532 | | | 530 | |
Other | 597 | | | 580 | |
Total current liabilities | 3,453 | | | 5,651 | |
Long-Term Debt (includes $708 at 2023 and $689 at 2022 related to VIEs) | 15,676 | | | 12,948 | |
Long-Term Debt Payable to Affiliated Companies | 300 | | | 300 | |
Other Noncurrent Liabilities | | | |
Deferred income taxes | 4,369 | | | 4,153 | |
Asset retirement obligations | 5,030 | | | 5,121 | |
Regulatory liabilities | 5,614 | | | 5,783 | |
Operating lease liabilities | 75 | | | 83 | |
Accrued pension and other post-retirement benefit costs | 60 | | | 38 | |
Investment tax credits | 302 | | | 300 | |
Other | 565 | | | 527 | |
Total other noncurrent liabilities | 16,015 | | | 16,005 | |
Commitments and Contingencies | | | |
Equity | | | |
Member's equity | 16,566 | | | 15,448 | |
Accumulated other comprehensive loss | (6) | | | (6) | |
Total equity | 16,560 | | | 15,442 | |
Total Liabilities and Equity | $ | 52,004 | | | $ | 50,346 | |
| | | | | | | | | | | |
| Three Months Ended |
| March 31, |
(in millions) | 2024 | | 2023 |
CASH FLOWS FROM OPERATING ACTIVITIES | | | |
Net income | $ | 430 | | | $ | 272 | |
Adjustments to reconcile net income to net cash provided by operating activities: | | | |
Depreciation and amortization (including amortization of nuclear fuel) | 463 | | | 426 | |
Equity component of AFUDC | (28) | | | (24) | |
| | | |
Impairment of assets and other charges | 1 | | | 2 | |
Deferred income taxes | 14 | | | 32 | |
| | | |
| | | |
| | | |
Payments for asset retirement obligations | (36) | | | (39) | |
Provision for rate refunds | (4) | | | (19) | |
(Increase) decrease in | | | |
| | | |
Receivables | 14 | | | 199 | |
Receivables from affiliated companies | 30 | | | 209 | |
Inventory | 7 | | | (139) | |
Other current assets | (23) | | | (293) | |
Increase (decrease) in | | | |
Accounts payable | (203) | | | (594) | |
Accounts payable to affiliated companies | 35 | | | 27 | |
Taxes accrued | (133) | | | (119) | |
Other current liabilities | (134) | | | (78) | |
Other assets | 191 | | | 206 | |
Other liabilities | (19) | | | 76 | |
Net cash provided by operating activities | 605 | | | 144 | |
CASH FLOWS FROM INVESTING ACTIVITIES | | | |
Capital expenditures | (952) | | | (866) | |
| | | |
| | | |
Purchases of debt and equity securities | (535) | | | (556) | |
Proceeds from sales and maturities of debt and equity securities | 535 | | | 556 | |
| | | |
| | | |
Other | (51) | | | (59) | |
Net cash used in investing activities | (1,003) | | | (925) | |
CASH FLOWS FROM FINANCING ACTIVITIES | | | |
Proceeds from the issuance of long-term debt | 1,011 | | | 1,845 | |
Payments for the redemption of long-term debt | (7) | | | (1,007) | |
Notes payable to affiliated companies | (612) | | | (79) | |
| | | |
Other | (1) | | | (1) | |
Net cash provided by financing activities | 391 | | | 758 | |
Net decrease in cash, cash equivalents and restricted cash | (7) | | | (23) | |
Cash, cash equivalents and restricted cash at beginning of period | 19 | | | 53 | |
Cash, cash equivalents and restricted cash at end of period | $ | 12 | | | $ | 30 | |
Supplemental Disclosures: | | | |
Significant non-cash transactions: | | | |
Accrued capital expenditures | $ | 550 | | | $ | 449 | |
See Notes to Condensed Consolidated Financial Statements
16
DUKE ENERGY CAROLINAS, LLC
Condensed Consolidated Statements of Cash FlowsChanges in Equity
(Unaudited)
| | | | | | | | | | | |
| Nine Months Ended |
| September 30, |
(in millions) | 2023 | | 2022 |
CASH FLOWS FROM OPERATING ACTIVITIES | | | |
Net income | $ | 1,121 | | | $ | 1,292 | |
Adjustments to reconcile net income to net cash provided by operating activities: | | | |
Depreciation and amortization (including amortization of nuclear fuel) | 1,380 | | | 1,335 | |
Equity component of AFUDC | (69) | | | (75) | |
Gains on sales of other assets | (26) | | | — | |
Impairment of assets and other charges | 70 | | | (3) | |
Deferred income taxes | (7) | | | 230 | |
| | | |
| | | |
Contributions to qualified pension plans | (26) | | | (15) | |
Payments for asset retirement obligations | (145) | | | (137) | |
Provision for rate refunds | (35) | | | (55) | |
(Increase) decrease in | | | |
| | | |
Receivables | (4) | | | (17) | |
Receivables from affiliated companies | 225 | | | (107) | |
Inventory | (257) | | | (86) | |
Other current assets | (439) | | | (1,139) | |
Increase (decrease) in | | | |
Accounts payable | (523) | | | 104 | |
Accounts payable to affiliated companies | 12 | | | (88) | |
Taxes accrued | 121 | | | (9) | |
Other current liabilities | (48) | | | 279 | |
Other assets | 526 | | | 22 | |
Other liabilities | 105 | | | (269) | |
Net cash provided by operating activities | 1,981 | | | 1,262 | |
CASH FLOWS FROM INVESTING ACTIVITIES | | | |
Capital expenditures | (2,646) | | | (2,313) | |
| | | |
| | | |
Purchases of debt and equity securities | (1,594) | | | (2,083) | |
Proceeds from sales and maturities of debt and equity securities | 1,594 | | | 2,083 | |
Net proceeds from the sales of other assets | 30 | | | — | |
| | | |
Other | (215) | | | (185) | |
Net cash used in investing activities | (2,831) | | | (2,498) | |
CASH FLOWS FROM FINANCING ACTIVITIES | | | |
Proceeds from the issuance of long-term debt | 2,764 | | | 1,352 | |
Payments for the redemption of long-term debt | (1,040) | | | (389) | |
Notes payable to affiliated companies | (902) | | | 358 | |
Distributions to parent | — | | | (50) | |
Other | (1) | | | (1) | |
Net cash provided by financing activities | 821 | | | 1,270 | |
Net (decrease) increase in cash, cash equivalents and restricted cash | (29) | | | 34 | |
Cash, cash equivalents and restricted cash at beginning of period | 53 | | | 8 | |
Cash, cash equivalents and restricted cash at end of period | $ | 24 | | | $ | 42 | |
Supplemental Disclosures: | | | |
Significant non-cash transactions: | | | |
Accrued capital expenditures | $ | 534 | | | $ | 460 | |
| | | | | | | | | | | | | | | | | |
| |
| | | | | |
| | | | | |
| | | | | |
| | | | | |
| | | | | |
| | | | | |
| | | | | |
| | | | | |
| | | | | |
| | | | | |
| | | | | |
| | | | | |
| | | | | |
| | | | | |
| | | | | |
| | | | | |
| | | | | |
| | | | | |
| | | | | |
| Three Months Ended March 31, 2023 and 2024 |
| | | Accumulated Other | | |
| | | Comprehensive | | |
| | | Loss | | |
| Member's | | Net Losses on | | Total |
(in millions) | Equity | | Cash Flow Hedges | | Equity |
Balance at December 31, 2022 | $ | 15,448 | | | $ | (6) | | | $ | 15,442 | |
Net income | 272 | | | — | | | 272 | |
| | | | | |
| | | | | |
| | | | | |
Balance at March 31, 2023 | $ | 15,720 | | | $ | (6) | | | $ | 15,714 | |
| | | | | |
Balance at December 31, 2023 | $ | 16,913 | | | $ | (6) | | | $ | 16,907 | |
Net income | 430 | | | — | | | 430 | |
| | | | | |
| | | | | |
| | | | | |
Balance at March 31, 2024 | $ | 17,343 | | | $ | (6) | | | $ | 17,337 | |
See Notes to Condensed Consolidated Financial Statements
17
DUKE ENERGY CAROLINAS, LLC
Condensed Consolidated Statements of Changes in Equity
(Unaudited)
| | | | | | | | | | | | | | | | | |
| Three Months Ended September 30, 2022 and 2023 |
| | | Accumulated Other | | |
| | | Comprehensive | | |
| | | Loss | | |
| Member's | | Net Losses on | | Total |
(in millions) | Equity | | Cash Flow Hedges | | Equity |
Balance at June 30, 2022 | $ | 14,515 | | | $ | (6) | | | $ | 14,509 | |
Net income | 624 | | | — | | | 624 | |
| | | | | |
| | | | | |
| | | | | |
Balance at September 30, 2022 | $ | 15,139 | | | $ | (6) | | | $ | 15,133 | |
| | | | | |
Balance at June 30, 2023 | $ | 15,990 | | | $ | (6) | | | $ | 15,984 | |
Net income | 579 | | | — | | | 579 | |
| | | | | |
| | | | | |
Other | (3) | | | — | | | (3) | |
Balance at September 30, 2023 | $ | 16,566 | | | $ | (6) | | | $ | 16,560 | |
| | | | | |
| Nine Months Ended September 30, 2022 and 2023 |
| | | Accumulated Other | | |
| | | Comprehensive | | |
| | | Loss | | |
| Member's | | Net Losses on | | Total |
(in millions) | Equity | | Cash Flow Hedges | | Equity |
Balance at December 31, 2021 | $ | 13,897 | | | $ | (6) | | | $ | 13,891 | |
Net income | 1,292 | | | — | | | 1,292 | |
| | | | | |
Distributions to parent | (50) | | | — | | | (50) | |
| | | | | |
Balance at September 30, 2022 | $ | 15,139 | | | $ | (6) | | | $ | 15,133 | |
| | | | | |
Balance at December 31, 2022 | $ | 15,448 | | | $ | (6) | | | $ | 15,442 | |
Net income | 1,121 | | | — | | | 1,121 | |
| | | | | |
| | | | | |
Other | (3) | | | — | | | (3) | |
Balance at September 30, 2023 | $ | 16,566 | | | $ | (6) | | | $ | 16,560 | |
See Notes to Condensed Consolidated Financial Statements
18
PROGRESS ENERGY, INC.
Condensed Consolidated Statements of Operations and Comprehensive Income
(Unaudited)
| | Three Months Ended | | Nine Months Ended |
| September 30, | | September 30, |
| | | Three Months Ended | |
| | | Three Months Ended | |
| | | Three Months Ended | |
| | | March 31, | | | | | March 31, |
(in millions) | (in millions) | 2023 | | 2022 | | 2023 | | 2022 | (in millions) | | | | | 2024 | | 2023 |
Operating Revenues | Operating Revenues | $ | 4,055 | | | $ | 3,881 | | | $ | 10,315 | | | $ | 10,087 | |
Operating Expenses | Operating Expenses | |
Fuel used in electric generation and purchased power | |
Fuel used in electric generation and purchased power | |
Fuel used in electric generation and purchased power | Fuel used in electric generation and purchased power | 1,535 | | | 1,605 | | | 3,902 | | | 3,927 | |
Operation, maintenance and other | Operation, maintenance and other | 711 | | | 581 | | | 1,963 | | | 1,829 | |
Depreciation and amortization | Depreciation and amortization | 563 | | | 562 | | | 1,609 | | | 1,607 | |
Property and other taxes | Property and other taxes | 205 | | | 169 | | | 546 | | | 472 | |
Impairment of assets and other charges | Impairment of assets and other charges | 24 | | | — | | | 29 | | | 4 | |
Total operating expenses | Total operating expenses | 3,038 | | | 2,917 | | | 8,049 | | | 7,839 | |
Gains on Sales of Other Assets and Other, net | Gains on Sales of Other Assets and Other, net | 8 | | | 3 | | | 20 | | | 6 | |
Operating Income | Operating Income | 1,025 | | | 967 | | | 2,286 | | | 2,254 | |
Other Income and Expenses, net | Other Income and Expenses, net | 49 | | | 45 | | | 146 | | | 150 | |
Interest Expense | Interest Expense | 241 | | | 197 | | | 706 | | | 616 | |
Income Before Income Taxes | Income Before Income Taxes | 833 | | | 815 | | | 1,726 | | | 1,788 | |
Income Tax Expense | Income Tax Expense | 131 | | | 129 | | | 280 | | | 289 | |
| | Net Income | Net Income | 702 | | | 686 | | | 1,446 | | | 1,499 | |
Less: Net Income Attributable to Noncontrolling Interests | — | | | — | | | — | | | 1 | |
Net Income Attributable to Parent | $ | 702 | | | $ | 686 | | | $ | 1,446 | | | $ | 1,498 | |
| Net Income | |
| | Net Income | Net Income | $ | 702 | | | $ | 686 | | | $ | 1,446 | | | $ | 1,499 | |
Other Comprehensive Income, net of tax | Other Comprehensive Income, net of tax | |
| Net unrealized gains on cash flow hedges | — | | | — | | | — | | | 1 | |
| Unrealized (losses) gains on available-for-sale securities | — | | | (1) | | | 2 | | | (4) | |
| Other Comprehensive (Loss) Income, net of tax | — | | | (1) | | | 2 | | | (3) | |
Unrealized gains on available-for-sale securities | |
| Unrealized gains on available-for-sale securities | |
| Unrealized gains on available-for-sale securities | |
| Other Comprehensive Income, net of tax | |
Other Comprehensive Income, net of tax | |
Other Comprehensive Income, net of tax | |
Comprehensive Income | Comprehensive Income | $ | 702 | | | $ | 685 | | | $ | 1,448 | | | $ | 1,496 | |
Less: Comprehensive Income Attributable to Noncontrolling Interests | — | | | — | | | — | | | 1 | |
Comprehensive Income Attributable to Parent | $ | 702 | | | $ | 685 | | | $ | 1,448 | | | $ | 1,495 | |
|
See Notes to Condensed Consolidated Financial Statements
18
PROGRESS ENERGY, INC.
Condensed Consolidated Balance Sheets
(Unaudited)
| | | | | | | | | | | |
(in millions) | March 31, 2024 | | December 31, 2023 |
ASSETS | | | |
Current Assets | | | |
Cash and cash equivalents | $ | 49 | | | $ | 59 | |
Receivables (net of allowance for doubtful accounts of $20 at 2024 and $18 at 2023) | 224 | | | 225 | |
Receivables of VIEs (net of allowance for doubtful accounts of $53 at 2024 and $56 at 2023) | 1,256 | | | 1,365 | |
Receivables from affiliated companies | 3 | | | 90 | |
| | | |
Inventory (includes $470 at 2024 and $462 at 2023 related to VIEs) | 1,987 | | | 1,901 | |
Regulatory assets (includes $98 at 2024 and 2023 related to VIEs) | 1,359 | | | 1,661 | |
Other (includes $29 at 2024 and $68 at 2023 related to VIEs) | 122 | | | 134 | |
Total current assets | 5,000 | | | 5,435 | |
Property, Plant and Equipment | | | |
Cost | 68,755 | | | 67,644 | |
Accumulated depreciation and amortization | (22,729) | | | (22,300) | |
| | | |
Net property, plant and equipment | 46,026 | | | 45,344 | |
Other Noncurrent Assets | | | |
Goodwill | 3,655 | | | 3,655 | |
Regulatory assets (includes $1,423 at 2024 and $1,446 at 2023 related to VIEs) | 6,526 | | | 6,430 | |
Nuclear decommissioning trust funds | 4,697 | | | 4,457 | |
Operating lease right-of-use assets, net | 597 | | | 617 | |
Other | 1,221 | | | 1,156 | |
Total other noncurrent assets | 16,696 | | | 16,315 | |
Total Assets | $ | 67,722 | | | $ | 67,094 | |
LIABILITIES AND EQUITY | | | |
Current Liabilities | | | |
Accounts payable (includes $179 at 2024 and $188 at 2023 related to VIEs) | $ | 1,174 | | | $ | 1,374 | |
Accounts payable to affiliated companies | 548 | | | 464 | |
Notes payable to affiliated companies | 820 | | | 1,043 | |
Taxes accrued | 201 | | | 259 | |
Interest accrued | 246 | | | 224 | |
Current maturities of long-term debt (includes $418 at 2024 and 2023 related to VIEs) | 659 | | | 661 | |
Asset retirement obligations | 229 | | | 245 | |
Regulatory liabilities | 394 | | | 418 | |
Other | 788 | | | 860 | |
Total current liabilities | 5,059 | | | 5,548 | |
Long-Term Debt (includes $1,862 at 2024 and $1,910 at 2023 related to VIEs) | 23,389 | | | 22,948 | |
Long-Term Debt Payable to Affiliated Companies | 150 | | | 150 | |
Other Noncurrent Liabilities | | | |
Deferred income taxes | 5,214 | | | 5,197 | |
Asset retirement obligations | 3,870 | | | 3,900 | |
Regulatory liabilities | 5,344 | | | 5,083 | |
Operating lease liabilities | 530 | | | 544 | |
Accrued pension and other post-retirement benefit costs | 263 | | | 266 | |
Investment tax credits | 370 | | | 371 | |
Other (includes $22 at 2024 and $19 at 2023 related to VIEs) | 238 | | | 227 | |
Total other noncurrent liabilities | 15,829 | | | 15,588 | |
Commitments and Contingencies | | | |
Equity | | | |
Common Stock, $0.01 par value, 100 shares authorized and outstanding at 2024 and 2023 | — | | | — | |
Additional paid-in capital | 11,830 | | | 11,830 | |
Retained earnings | 11,475 | | | 11,040 | |
Accumulated other comprehensive loss | (10) | | | (10) | |
| | | |
| | | |
Total equity | 23,295 | | | 22,860 | |
Total Liabilities and Equity | $ | 67,722 | | | $ | 67,094 | |
See Notes to Condensed Consolidated Financial Statements
19
PROGRESS ENERGY, INC.
Condensed Consolidated Balance SheetsStatements of Cash Flows
(Unaudited)
| | | | | | | | | | | |
(in millions) | September 30, 2023 | | December 31, 2022 |
ASSETS | | | |
Current Assets | | | |
Cash and cash equivalents | $ | 87 | | | $ | 108 | |
Receivables (net of allowance for doubtful accounts of $16 at 2023 and $13 at 2022) | 212 | | | 318 | |
Receivables of VIEs (net of allowance for doubtful accounts of $61 at 2023 and $68 at 2022) | 1,597 | | | 1,289 | |
Receivables from affiliated companies | 20 | | | 22 | |
| | | |
Inventory | 1,803 | | | 1,579 | |
Regulatory assets (includes $97 at 2023 and $94 at 2022 related to VIEs) | 1,696 | | | 1,833 | |
Other (includes $42 at 2023 and $88 at 2022 related to VIEs) | 164 | | | 342 | |
Total current assets | 5,579 | | | 5,491 | |
Property, Plant and Equipment | | | |
Cost | 67,872 | | | 64,822 | |
Accumulated depreciation and amortization | (21,772) | | | (20,584) | |
| | | |
Net property, plant and equipment | 46,100 | | | 44,238 | |
Other Noncurrent Assets | | | |
Goodwill | 3,655 | | | 3,655 | |
Regulatory assets (includes $1,469 at 2023 and $1,507 at 2022 related to VIEs) | 6,448 | | | 7,146 | |
Nuclear decommissioning trust funds | 4,089 | | | 3,855 | |
Operating lease right-of-use assets, net | 631 | | | 628 | |
Other | 1,203 | | | 1,066 | |
Total other noncurrent assets | 16,026 | | | 16,350 | |
Total Assets | $ | 67,705 | | | $ | 66,079 | |
LIABILITIES AND EQUITY | | | |
Current Liabilities | | | |
Accounts payable | $ | 1,201 | | | $ | 1,481 | |
Accounts payable to affiliated companies | 506 | | | 712 | |
Notes payable to affiliated companies | 983 | | | 843 | |
Taxes accrued | 492 | | | 135 | |
Interest accrued | 217 | | | 206 | |
Current maturities of long-term debt (includes $417 at 2023 and $340 at 2022 related to VIEs) | 1,265 | | | 697 | |
Asset retirement obligations | 261 | | | 289 | |
Regulatory liabilities | 515 | | | 576 | |
Other | 838 | | | 782 | |
Total current liabilities | 6,278 | | | 5,721 | |
Long-Term Debt (includes $1,911 at 2023 and $2,003 at 2022 related to VIEs) | 21,866 | | | 21,592 | |
Long-Term Debt Payable to Affiliated Companies | 150 | | | 150 | |
Other Noncurrent Liabilities | | | |
Deferred income taxes | 5,228 | | | 5,147 | |
Asset retirement obligations | 5,669 | | | 5,892 | |
Regulatory liabilities | 4,784 | | | 4,753 | |
Operating lease liabilities | 548 | | | 546 | |
Accrued pension and other post-retirement benefit costs | 270 | | | 292 | |
Investment tax credits | 363 | | | 358 | |
Other (includes $30 at 2023 related to VIEs) | 198 | | | 222 | |
Total other noncurrent liabilities | 17,060 | | | 17,210 | |
Commitments and Contingencies | | | |
Equity | | | |
Common Stock, $0.01 par value, 100 shares authorized and outstanding at 2023 and 2022 | — | | | — | |
Additional paid-in capital | 11,830 | | | 11,832 | |
Retained earnings | 10,530 | | | 9,585 | |
Accumulated other comprehensive loss | (9) | | | (11) | |
| | | |
| | | |
Total equity | 22,351 | | | 21,406 | |
Total Liabilities and Equity | $ | 67,705 | | | $ | 66,079 | |
| | | | | | | | | | | |
| Three Months Ended |
| March 31, |
(in millions) | 2024 | | 2023 |
CASH FLOWS FROM OPERATING ACTIVITIES | | | |
Net income | $ | 435 | | | $ | 359 | |
Adjustments to reconcile net income to net cash provided by operating activities: | | | |
Depreciation, amortization and accretion (including amortization of nuclear fuel) | 669 | | | 554 | |
Equity component of AFUDC | (18) | | | (16) | |
| | | |
Impairment of assets and other charges | — | | | 5 | |
Deferred income taxes | (5) | | | 51 | |
| | | |
| | | |
| | | |
Payments for asset retirement obligations | (68) | | | (58) | |
Provision for rate refunds | — | | | (14) | |
(Increase) decrease in | | | |
| | | |
Receivables | 103 | | | 188 | |
Receivables from affiliated companies | 87 | | | (2) | |
Inventory | (86) | | | (133) | |
Other current assets | 232 | | | 319 | |
Increase (decrease) in | | | |
Accounts payable | (79) | | | (214) | |
Accounts payable to affiliated companies | 84 | | | (302) | |
Taxes accrued | (57) | | | 36 | |
Other current liabilities | (36) | | | (107) | |
Other assets | (134) | | | (212) | |
Other liabilities | 27 | | | 4 | |
Net cash provided by operating activities | 1,154 | | | 458 | |
CASH FLOWS FROM INVESTING ACTIVITIES | | | |
Capital expenditures | (1,373) | | | (1,275) | |
| | | |
| | | |
Purchases of debt and equity securities | (381) | | | (279) | |
Proceeds from sales and maturities of debt and equity securities | 424 | | | 304 | |
Notes receivable from affiliated companies | — | | | (118) | |
Other | (74) | | | (71) | |
Net cash used in investing activities | (1,404) | | | (1,439) | |
CASH FLOWS FROM FINANCING ACTIVITIES | | | |
Proceeds from the issuance of long-term debt | 498 | | | 996 | |
Payments for the redemption of long-term debt | (73) | | | (66) | |
Notes payable to affiliated companies | (223) | | | 2 | |
| | | |
| | | |
| | | |
| | | |
Other | (1) | | | (1) | |
Net cash provided by financing activities | 201 | | | 931 | |
Net decrease in cash, cash equivalents and restricted cash | (49) | | | (50) | |
Cash, cash equivalents and restricted cash at beginning of period | 135 | | | 184 | |
Cash, cash equivalents and restricted cash at end of period | $ | 86 | | | $ | 134 | |
Supplemental Disclosures: | | | |
| | | |
| | | |
| | | |
| | | |
| | | |
| | | |
Significant non-cash transactions: | | | |
Accrued capital expenditures | $ | 680 | | | $ | 516 | |
| | | |
| | | |
See Notes to Condensed Consolidated Financial Statements
20
PROGRESS ENERGY, INC.
Condensed Consolidated Statements of Cash FlowsChanges in Equity
(Unaudited)
| | | | | | | | | | | |
| Nine Months Ended |
| September 30, |
(in millions) | 2023 | | 2022 |
CASH FLOWS FROM OPERATING ACTIVITIES | | | |
Net income | $ | 1,446 | | | $ | 1,499 | |
Adjustments to reconcile net income to net cash provided by operating activities: | | | |
Depreciation, amortization and accretion (including amortization of nuclear fuel) | 2,021 | | | 1,826 | |
Equity component of AFUDC | (49) | | | (50) | |
| | | |
Impairment of assets and other charges | 29 | | | 4 | |
Deferred income taxes | (38) | | | 284 | |
| | | |
| | | |
Contributions to qualified pension plans | (22) | | | (13) | |
Payments for asset retirement obligations | (212) | | | (207) | |
Provision for rate refunds | (24) | | | (44) | |
(Increase) decrease in | | | |
| | | |
Receivables | (198) | | | (314) | |
Receivables from affiliated companies | 2 | | | 110 | |
Inventory | (224) | | | (154) | |
Other current assets | 399 | | | (1,133) | |
Increase (decrease) in | | | |
Accounts payable | (177) | | | 360 | |
Accounts payable to affiliated companies | (206) | | | (31) | |
Taxes accrued | 357 | | | 173 | |
Other current liabilities | 4 | | | 216 | |
Other assets | 183 | | | (262) | |
Other liabilities | (10) | | | 615 | |
Net cash provided by operating activities | 3,281 | | | 2,879 | |
CASH FLOWS FROM INVESTING ACTIVITIES | | | |
Capital expenditures | (3,607) | | | (3,130) | |
| | | |
| | | |
Purchases of debt and equity securities | (1,108) | | | (1,301) | |
Proceeds from sales and maturities of debt and equity securities | 1,151 | | | 1,357 | |
Notes receivable from affiliated companies | — | | | (232) | |
Other | (239) | | | (88) | |
Net cash used in investing activities | (3,803) | | | (3,394) | |
CASH FLOWS FROM FINANCING ACTIVITIES | | | |
Proceeds from the issuance of long-term debt | 1,272 | | | 1,452 | |
Payments for the redemption of long-term debt | (440) | | | (1,136) | |
Notes payable to affiliated companies | 140 | | | 509 | |
| | | |
| | | |
| | | |
Dividends to parent | (500) | | | (250) | |
Other | (1) | | | (36) | |
Net cash provided by financing activities | 471 | | | 539 | |
Net (decrease) increase in cash, cash equivalents and restricted cash | (51) | | | 24 | |
Cash, cash equivalents and restricted cash at beginning of period | 184 | | | 113 | |
Cash, cash equivalents and restricted cash at end of period | $ | 133 | | | $ | 137 | |
Supplemental Disclosures: | | | |
| | | |
| | | |
| | | |
| | | |
| | | |
| | | |
Significant non-cash transactions: | | | |
Accrued capital expenditures | $ | 558 | | | $ | 472 | |
| | | |
| | | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
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| | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | |
| Three Months Ended March 31, 2023 and 2024 |
| | | | | 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' | | | | Total |
| Capital | | Earnings | | Hedges | | Sale Securities | | Adjustments | | Equity | | | | Equity |
Balance at December 31, 2022 | $ | 11,832 | | | $ | 9,585 | | | $ | (1) | | | $ | (8) | | | $ | (2) | | | $ | 21,406 | | | | | $ | 21,406 | |
Net income | — | | | 359 | | | — | | | — | | | — | | | 359 | | | | | 359 | |
Other comprehensive income | — | | | — | | | — | | | 2 | | | — | | | 2 | | | | | 2 | |
| | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | |
Other | (2) | | | — | | | — | | | — | | | — | | | (2) | | | | | (2) | |
Balance at March 31, 2023 | $ | 11,830 | | | $ | 9,944 | | | $ | (1) | | | $ | (6) | | | $ | (2) | | | $ | 21,765 | | | | | $ | 21,765 | |
| | | | | | | | | | | | | | | |
Balance at December 31, 2023 | $ | 11,830 | | | $ | 11,040 | | | $ | (1) | | | $ | (5) | | | $ | (4) | | | $ | 22,860 | | | | | $ | 22,860 | |
Net income | — | | | 435 | | | — | | | — | | | — | | | 435 | | | | | 435 | |
| | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | |
Balance at March 31, 2024 | $ | 11,830 | | | $ | 11,475 | | | $ | (1) | | | $ | (5) | | | $ | (4) | | | $ | 23,295 | | | | | $ | 23,295 | |
See Notes to Condensed Consolidated Financial Statements
21
PROGRESS ENERGY, INC.
Condensed Consolidated Statements of Changes in Equity
(Unaudited)
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| Three Months Ended September 30, 2022 and 2023 |
| | | | | Accumulated Other Comprehensive Loss | | | | | | |
| | | | | Net Gains | | Net Unrealized | | | | Total Progress | | | | |
| Additional | | | | on | | 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, 2022 | $ | 9,149 | | | $ | 11,001 | | | $ | (1) | | | $ | (5) | | | $ | (7) | | | $ | 20,137 | | | $ | 3 | | | $ | 20,140 | |
Net income | — | | | 686 | | | — | | | — | | | — | | | 686 | | | — | | | 686 | |
Other comprehensive loss | — | | | — | | | — | | | (1) | | | — | | | (1) | | | — | | | (1) | |
Distributions to noncontrolling interests | — | | | — | | | — | | | — | | | — | | | — | | | (33) | | | (33) | |
| | | | | | | | | | | | | | | |
Equitization of certain notes payable to affiliates | 475 | | | — | | | — | | | — | | | — | | | 475 | | | — | | | 475 | |
Other | 2 | | | — | | | — | | | — | | | — | | | 2 | | | — | | | 2 | |
Balance at September 30, 2022 | $ | 9,626 | | | $ | 11,687 | | | $ | (1) | | | $ | (6) | | | $ | (7) | | | $ | 21,299 | | | $ | (30) | | | $ | 21,269 | |
| | | | | | | | | | | | | | | |
Balance at June 30, 2023 | $ | 11,830 | | | $ | 10,329 | | | $ | (1) | | | $ | (6) | | | $ | (2) | | | $ | 22,150 | | | $ | — | | | $ | 22,150 | |
Net income | — | | | 702 | | | — | | | — | | | — | | | 702 | | | — | | | 702 | |
| | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | |
Dividends to parent | — | | | (500) | | | — | | | — | | | — | | | (500) | | | — | | | (500) | |
| | | | | | | | | | | | | | | |
Other | — | | | (1) | | | — | | | — | | | — | | | (1) | | | — | | | (1) | |
Balance at September 30, 2023 | $ | 11,830 | | | $ | 10,530 | | | $ | (1) | | | $ | (6) | | | $ | (2) | | | $ | 22,351 | | | $ | — | | | $ | 22,351 | |
| | | | | | | | | | | | | | | |
| Nine Months Ended September 30, 2022 and 2023 |
| | | | | Accumulated Other Comprehensive Loss | | | | | | |
| | | | | Net Gains | | Net Unrealized | | | | Total Progress | | | | |
| Additional | | | | 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, 2021 | $ | 9,149 | | | $ | 8,007 | | | $ | (2) | | | $ | (2) | | | $ | (7) | | | $ | 17,145 | | | $ | 3 | | | $ | 17,148 | |
Net income | — | | | 1,498 | | | — | | | — | | | — | | | 1,498 | | | 1 | | | 1,499 | |
Other comprehensive income (loss) | — | | | — | | | 1 | | | (4) | | | — | | | (3) | | | — | | | (3) | |
| | | | | | | | | | | | | | | |
Distributions to noncontrolling interests | — | | | — | | | — | | | — | | | — | | | — | | | (34) | | | (34) | |
Dividends to parent | — | | | (250) | | | — | | | — | | | — | | | (250) | | | — | | | (250) | |
Equitization of certain notes payable to affiliates | 475 | | | 2,431 | | | — | | | — | | | — | | | 2,906 | | | — | | | 2,906 | |
| | | | | | | | | | | | | | | |
Other | 2 | | | 1 | | | — | | | — | | | — | | | 3 | | | — | | | 3 | |
Balance at September 30, 2022 | $ | 9,626 | | | $ | 11,687 | | | $ | (1) | | | $ | (6) | | | $ | (7) | | | $ | 21,299 | | | $ | (30) | | | $ | 21,269 | |
| | | | | | | | | | | | | | | |
Balance at December 31, 2022 | $ | 11,832 | | | $ | 9,585 | | | $ | (1) | | | $ | (8) | | | $ | (2) | | | $ | 21,406 | | | $ | — | | | $ | 21,406 | |
Net income | — | | | 1,446 | | | — | | | — | | | — | | | 1,446 | | | — | | | 1,446 | |
Other comprehensive income | — | | | — | | | — | | | 2 | | | — | | | 2 | | | — | | | 2 | |
| | | | | | | | | | | | | | | |
Dividends to parent | — | | | (500) | | | — | | | — | | | — | | | (500) | | | — | | | (500) | |
| | | | | | | | | | | | | | | |
Other | (2) | | | (1) | | | — | | | — | | | — | | | (3) | | | — | | | (3) | |
Balance at September 30, 2023 | $ | 11,830 | | | $ | 10,530 | | | $ | (1) | | | $ | (6) | | | $ | (2) | | | $ | 22,351 | | | $ | — | | | $ | 22,351 | |
See Notes to Condensed Consolidated Financial Statements
22
DUKE ENERGY PROGRESS, LLC
Condensed Consolidated Statements of Operations and Comprehensive Income
(Unaudited)
| | Three Months Ended | | Nine Months Ended |
| September 30, | | September 30, |
| | | Three Months Ended | |
| | | Three Months Ended | |
| | | Three Months Ended | |
| | | March 31, | | | | | March 31, |
(in millions) | (in millions) | 2023 | | 2022 | | 2023 | | 2022 | (in millions) | | | | | 2024 | | 2023 |
Operating Revenues | Operating Revenues | $ | 1,886 | | | $ | 1,969 | | | $ | 4,844 | | | $ | 5,182 | |
Operating Expenses | Operating Expenses | |
Fuel used in electric generation and purchased power | |
Fuel used in electric generation and purchased power | |
Fuel used in electric generation and purchased power | Fuel used in electric generation and purchased power | 651 | | | 749 | | | 1,685 | | | 1,916 | |
Operation, maintenance and other | Operation, maintenance and other | 345 | | | 350 | | | 1,051 | | | 1,101 | |
Depreciation and amortization | Depreciation and amortization | 324 | | | 313 | | | 935 | | | 890 | |
Property and other taxes | Property and other taxes | 48 | | | 46 | | | 143 | | | 136 | |
Impairment of assets and other charges | Impairment of assets and other charges | 24 | | | — | | | 31 | | | 4 | |
Total operating expenses | Total operating expenses | 1,392 | | | 1,458 | | | 3,845 | | | 4,047 | |
Gains on Sales of Other Assets and Other, net | Gains on Sales of Other Assets and Other, net | 1 | | | 1 | | | 2 | | | 2 | |
Operating Income | Operating Income | 495 | | | 512 | | | 1,001 | | | 1,137 | |
Other Income and Expenses, net | Other Income and Expenses, net | 31 | | | 29 | | | 92 | | | 83 | |
Interest Expense | Interest Expense | 109 | | | 85 | | | 315 | | | 260 | |
Income Before Income Taxes | Income Before Income Taxes | 417 | | | 456 | | | 778 | | | 960 | |
Income Tax Expense | Income Tax Expense | 49 | | | 59 | | | 101 | | | 129 | |
Net Income and Comprehensive Income | Net Income and Comprehensive Income | $ | 368 | | | $ | 397 | | | $ | 677 | | | $ | 831 | |
|
See Notes to Condensed Consolidated Financial Statements
22
DUKE ENERGY PROGRESS, LLC
Condensed Consolidated Balance Sheets
(Unaudited)
| | | | | | | | | | | |
(in millions) | March 31, 2024 | | December 31, 2023 |
ASSETS | | | |
Current Assets | | | |
Cash and cash equivalents | $ | 27 | | | $ | 18 | |
Receivables (net of allowance for doubtful accounts of $9 at 2024 and $8 at 2023) | 132 | | | 139 | |
Receivables of VIEs (net of allowance for doubtful accounts of $38 at 2024 and $36 at 2023) | 789 | | | 833 | |
Receivables from affiliated companies | 3 | | | 16 | |
| | | |
Inventory | 1,294 | | | 1,227 | |
Regulatory assets (includes $39 at 2024 and 2023 related to VIEs) | 834 | | | 942 | |
Other (includes $18 at 2024 and $31 at 2023 related to VIEs) | 58 | | | 72 | |
Total current assets | 3,137 | | | 3,247 | |
Property, Plant and Equipment | | | |
Cost | 39,865 | | | 39,283 | |
Accumulated depreciation and amortization | (15,503) | | | (15,227) | |
| | | |
Net property, plant and equipment | 24,362 | | | 24,056 | |
Other Noncurrent Assets | | | |
Regulatory assets (includes $633 at 2024 and $643 at 2023 related to VIEs) | 4,631 | | | 4,546 | |
Nuclear decommissioning trust funds | 4,345 | | | 4,075 | |
Operating lease right-of-use assets, net | 304 | | | 318 | |
Other | 715 | | | 682 | |
Total other noncurrent assets | 9,995 | | | 9,621 | |
Total Assets | $ | 37,494 | | | $ | 36,924 | |
LIABILITIES AND EQUITY | | | |
Current Liabilities | | | |
Accounts payable | $ | 557 | | | $ | 634 | |
Accounts payable to affiliated companies | 294 | | | 332 | |
Notes payable to affiliated companies | 754 | | | 891 | |
Taxes accrued | 129 | | | 176 | |
Interest accrued | 89 | | | 114 | |
Current maturities of long-term debt (includes $34 at 2024 and 2023 related to VIEs) | 73 | | | 72 | |
Asset retirement obligations | 228 | | | 244 | |
Regulatory liabilities | 300 | | | 300 | |
Other | 429 | | | 481 | |
Total current liabilities | 2,853 | | | 3,244 | |
Long-Term Debt (includes $1,062 at 2024 and $1,079 at 2023 related to VIEs) | 11,955 | | | 11,492 | |
Long-Term Debt Payable to Affiliated Companies | 150 | | | 150 | |
Other Noncurrent Liabilities | | | |
Deferred income taxes | 2,555 | | | 2,560 | |
Asset retirement obligations | 3,619 | | | 3,626 | |
Regulatory liabilities | 4,635 | | | 4,375 | |
Operating lease liabilities | 283 | | | 293 | |
Accrued pension and other post-retirement benefit costs | 144 | | | 146 | |
Investment tax credits | 128 | | | 129 | |
Other (includes $13 at 2024 and $12 at 2023 related to VIEs) | 93 | | | 102 | |
Total other noncurrent liabilities | 11,457 | | | 11,231 | |
Commitments and Contingencies | | | |
Equity | | | |
Member's Equity | 11,079 | | | 10,807 | |
| | | |
| | | |
Total Liabilities and Equity | $ | 37,494 | | | $ | 36,924 | |
See Notes to Condensed Consolidated Financial Statements
23
DUKE ENERGY PROGRESS, LLC
Condensed Consolidated Balance SheetsStatements of Cash Flows
(Unaudited)
| | | | | | | | | | | |
(in millions) | September 30, 2023 | | December 31, 2022 |
ASSETS | | | |
Current Assets | | | |
Cash and cash equivalents | $ | 27 | | | $ | 49 | |
Receivables (net of allowance for doubtful accounts of $7 at 2023 and $4 at 2022) | 129 | | | 167 | |
Receivables of VIEs (net of allowance for doubtful accounts of $37 at 2023 and $40 at 2022) | 831 | | | 793 | |
Receivables from affiliated companies | 32 | | | 25 | |
| | | |
Inventory | 1,141 | | | 1,006 | |
Regulatory assets (includes $39 at 2023 and 2022 related to VIEs) | 946 | | | 690 | |
Other (includes $18 at 2023 and $42 at 2022 related to VIEs) | 49 | | | 174 | |
Total current assets | 3,155 | | | 2,904 | |
Property, Plant and Equipment | | | |
Cost | 40,283 | | | 38,875 | |
Accumulated depreciation and amortization | (14,869) | | | (14,201) | |
| | | |
Net property, plant and equipment | 25,414 | | | 24,674 | |
Other Noncurrent Assets | | | |
Regulatory assets (includes $653 at 2023 and $681 at 2022 related to VIEs) | 4,406 | | | 4,724 | |
Nuclear decommissioning trust funds | 3,697 | | | 3,430 | |
Operating lease right-of-use assets, net | 329 | | | 370 | |
Other | 693 | | | 650 | |
Total other noncurrent assets | 9,125 | | | 9,174 | |
Total Assets | $ | 37,694 | | | $ | 36,752 | |
LIABILITIES AND EQUITY | | | |
Current Liabilities | | | |
Accounts payable | $ | 502 | | | $ | 601 | |
Accounts payable to affiliated companies | 252 | | | 508 | |
Notes payable to affiliated companies | 691 | | | 238 | |
Taxes accrued | 255 | | | 77 | |
Interest accrued | 86 | | | 101 | |
Current maturities of long-term debt (includes $34 at 2023 and 2022 related to VIEs) | 71 | | | 369 | |
Asset retirement obligations | 260 | | | 288 | |
Regulatory liabilities | 290 | | | 332 | |
Other | 452 | | | 384 | |
Total current liabilities | 2,859 | | | 2,898 | |
Long-Term Debt (includes $1,079 at 2023 and $1,114 at 2022 related to VIEs) | 11,497 | | | 10,568 | |
Long-Term Debt Payable to Affiliated Companies | 150 | | | 150 | |
Other Noncurrent Liabilities | | | |
Deferred income taxes | 2,558 | | | 2,477 | |
Asset retirement obligations | 5,362 | | | 5,535 | |
Regulatory liabilities | 4,120 | | | 4,120 | |
Operating lease liabilities | 298 | | | 335 | |
Accrued pension and other post-retirement benefit costs | 150 | | | 160 | |
Investment tax credits | 130 | | | 124 | |
Other (includes $19 at 2023 related to VIEs) | 84 | | | 76 | |
Total other noncurrent liabilities | 12,702 | | | 12,827 | |
Commitments and Contingencies | | | |
Equity | | | |
Member's Equity | 10,486 | | | 10,309 | |
| | | |
| | | |
Total Liabilities and Equity | $ | 37,694 | | | $ | 36,752 | |
| | | | | | | | | | | |
| Three Months Ended |
| March 31, |
(in millions) | 2024 | | 2023 |
CASH FLOWS FROM OPERATING ACTIVITIES | | | |
Net income | $ | 272 | | | $ | 169 | |
Adjustments to reconcile net income to net cash provided by operating activities: | | | |
Depreciation and amortization (including amortization of nuclear fuel) | 385 | | | 360 | |
Equity component of AFUDC | (13) | | | (13) | |
| | | |
Impairment of assets and other charges | — | | | 4 | |
Deferred income taxes | (21) | | | 27 | |
| | | |
| | | |
| | | |
Payments for asset retirement obligations | (46) | | | (46) | |
Provision for rate refunds | — | | | (14) | |
(Increase) decrease in | | | |
| | | |
Receivables | 50 | | | 144 | |
Receivables from affiliated companies | 13 | | | (1) | |
Inventory | (67) | | | (76) | |
Other current assets | 97 | | | (61) | |
Increase (decrease) in | | | |
Accounts payable | (31) | | | (3) | |
Accounts payable to affiliated companies | (38) | | | (256) | |
Taxes accrued | (47) | | | (21) | |
Other current liabilities | (49) | | | (86) | |
Other assets | (105) | | | (16) | |
Other liabilities | (11) | | | 21 | |
Net cash provided by operating activities | 389 | | | 132 | |
CASH FLOWS FROM INVESTING ACTIVITIES | | | |
Capital expenditures | (704) | | | (666) | |
| | | |
| | | |
Purchases of debt and equity securities | (351) | | | (239) | |
Proceeds from sales and maturities of debt and equity securities | 351 | | | 236 | |
Notes receivable from affiliated companies | — | | | (160) | |
Other | (12) | | | (33) | |
Net cash used in investing activities | (716) | | | (862) | |
CASH FLOWS FROM FINANCING ACTIVITIES | | | |
Proceeds from the issuance of long-term debt | 495 | | | 991 | |
| | | |
Payments for the redemption of long-term debt | (33) | | | (32) | |
Notes payable to affiliated companies | (137) | | | (239) | |
| | | |
| | | |
Other | — | | | (1) | |
Net cash provided by financing activities | 325 | | | 719 | |
Net decrease in cash, cash equivalents and restricted cash | (2) | | | (11) | |
Cash, cash equivalents and restricted cash at beginning of period | 51 | | | 79 | |
Cash, cash equivalents and restricted cash at end of period | $ | 49 | | | $ | 68 | |
Supplemental Disclosures: | | | |
Significant non-cash transactions: | | | |
Accrued capital expenditures | $ | 259 | | | $ | 176 | |
| | | |
See Notes to Condensed Consolidated Financial Statements
24
DUKE ENERGY PROGRESS, LLC
Condensed Consolidated Statements of Cash FlowsChanges in Equity
(Unaudited)
| | | | | | | | | | | |
| Nine Months Ended |
| September 30, |
(in millions) | 2023 | | 2022 |
CASH FLOWS FROM OPERATING ACTIVITIES | | | |
Net income | $ | 677 | | | $ | 831 | |
Adjustments to reconcile net income to net cash provided by operating activities: | | | |
Depreciation and amortization (including amortization of nuclear fuel) | 1,077 | | | 1,034 | |
Equity component of AFUDC | (38) | | | (37) | |
| | | |
Impairment of assets and other charges | 31 | | | 4 | |
Deferred income taxes | (12) | | | 66 | |
| | | |
| | | |
Contributions to qualified pension plans | (13) | | | (8) | |
Payments for asset retirement obligations | (166) | | | (133) | |
Provision for rate refunds | (24) | | | (44) | |
(Increase) decrease in | | | |
| | | |
Receivables | 5 | | | (95) | |
Receivables from affiliated companies | (7) | | | 64 | |
Inventory | (135) | | | (58) | |
Other current assets | (189) | | | (266) | |
Increase (decrease) in | | | |
Accounts payable | (38) | | | 7 | |
Accounts payable to affiliated companies | (256) | | | 58 | |
Taxes accrued | 178 | | | (1) | |
Other current liabilities | (25) | | | 122 | |
Other assets | 175 | | | (105) | |
Other liabilities | 23 | | | 39 | |
Net cash provided by operating activities | 1,263 | | | 1,478 | |
CASH FLOWS FROM INVESTING ACTIVITIES | | | |
Capital expenditures | (1,756) | | | (1,506) | |
| | | |
| | | |
Purchases of debt and equity securities | (973) | | | (1,148) | |
Proceeds from sales and maturities of debt and equity securities | 969 | | | 1,141 | |
Notes receivable from affiliated companies | — | | | (329) | |
Other | (114) | | | (11) | |
Net cash used in investing activities | (1,874) | | | (1,853) | |
CASH FLOWS FROM FINANCING ACTIVITIES | | | |
Proceeds from the issuance of long-term debt | 991 | | | 1,448 | |
| | | |
Payments for the redemption of long-term debt | (364) | | | (612) | |
Notes payable to affiliated companies | 452 | | | (172) | |
| | | |
Distributions to parent | (500) | | | (250) | |
Other | (1) | | | (1) | |
Net cash provided by financing activities | 578 | | | 413 | |
Net (decrease) increase in cash, cash equivalents and restricted cash | (33) | | | 38 | |
Cash, cash equivalents and restricted cash at beginning of period | 79 | | | 39 | |
Cash, cash equivalents and restricted cash at end of period | $ | 46 | | | $ | 77 | |
Supplemental Disclosures: | | | |
Significant non-cash transactions: | | | |
Accrued capital expenditures | $ | 206 | | | $ | 184 | |
| | | |
| | | | | | | | | | | |
| | | | | | | |
| | | | | | | |
| | | | | | | |
| | | | | | | |
| | | | | | | |
| | | | | | | |
| | | | | | | |
| | | | | | | |
| | | | | | | |
| | | | | | | |
| | | | | | | |
| | | | | | | |
| | | | | | | |
| | | | | | | |
| | | | | | | |
| | | | | | | |
| | | | | | | |
| | | | | | | |
| | | | | Three Months Ended | | |
| | | | | March 31, 2023 and 2024 | | |
| | | | | | | |
(in millions) | | | | | Member's Equity | | |
Balance at December 31, 2022 | | | | | $ | 10,309 | | | |
Net income | | | | | 169 | | | |
| | | | | | | |
| | | | | | | |
| | | | | | | |
Balance at March 31, 2023 | | | | | $ | 10,478 | | | |
| | | | | | | |
Balance at December 31, 2023 | | | | | $ | 10,807 | | | |
Net income | | | | | 272 | | | |
| | | | | | | |
| | | | | | | |
| | | | | | | |
| | | | | | | |
Balance at March 31, 2024 | | | | | $ | 11,079 | | | |
See Notes to Condensed Consolidated Financial Statements
25
DUKE ENERGY PROGRESS, LLC
Condensed Consolidated Statements of Changes in Equity
(Unaudited)
| | | | | | | | | | | |
| | | | | Three Months Ended | | |
| | | | | September 30, 2022 and 2023 | | |
| | | | | | | |
(in millions) | | | | | Member's Equity | | |
Balance at June 30, 2022 | | | | | $ | 9,735 | | | |
Net income | | | | | 397 | | | |
| | | | | | | |
| | | | | | | |
| | | | | | | |
Balance at September 30, 2022 | | | | | $ | 10,132 | | | |
| | | | | | | |
Balance at June 30, 2023 | | | | | $ | 10,618 | | | |
Net income | | | | | 368 | | | |
| | | | | | | |
Distributions to parent | | | | | (500) | | | |
| | | | | | | |
Balance at September 30, 2023 | | | | | $ | 10,486 | | | |
| | | | | | | |
| | | | | Nine Months Ended | | |
| | | | | September 30, 2022 and 2023 | | |
| | | | | | | |
(in millions) | | | | | Member's Equity | | |
Balance at December 31, 2021 | | | | | $ | 9,551 | | | |
Net income | | | | | 831 | | | |
Distributions to parent | | | | | (250) | | | |
| | | | | | | |
| | | | | | | |
Balance at September 30, 2022 | | | | | $ | 10,132 | | | |
| | | | | | | |
Balance at December 31, 2022 | | | | | $ | 10,309 | | | |
Net income | | | | | 677 | | | |
| | | | | | | |
| | | | | | | |
Distributions to parent | | | | | (500) | | | |
| | | | | | | |
Balance at September 30, 2023 | | | | | $ | 10,486 | | | |
See Notes to Condensed Consolidated Financial Statements
26
DUKE ENERGY FLORIDA, LLC
Condensed Consolidated Statements of Operations and Comprehensive Income
(Unaudited)
| | Three Months Ended | | Nine Months Ended |
| September 30, | | September 30, |
| | | Three Months Ended | |
| | | Three Months Ended | |
| | | Three Months Ended | |
| | | March 31, | | | | | March 31, |
(in millions) | (in millions) | 2023 | | 2022 | | 2023 | | 2022 | (in millions) | | | | | 2024 | | 2023 |
Operating Revenues | Operating Revenues | $ | 2,164 | | | $ | 1,907 | | | $ | 5,456 | | | $ | 4,890 | |
Operating Expenses | Operating Expenses | |
Fuel used in electric generation and purchased power | |
Fuel used in electric generation and purchased power | |
Fuel used in electric generation and purchased power | Fuel used in electric generation and purchased power | 885 | | | 856 | | | 2,218 | | | 2,011 | |
Operation, maintenance and other | Operation, maintenance and other | 361 | | | 226 | | | 898 | | | 716 | |
Depreciation and amortization | Depreciation and amortization | 239 | | | 249 | | | 674 | | | 717 | |
Property and other taxes | Property and other taxes | 157 | | | 123 | | | 403 | | | 335 | |
Impairment of assets and other charges | Impairment of assets and other charges | — | | | — | | | (1) | | | — | |
Total operating expenses | Total operating expenses | 1,642 | | | 1,454 | | | 4,192 | | | 3,779 | |
Gains on Sales of Other Assets and Other, net | Gains on Sales of Other Assets and Other, net | — | | | 3 | | | 1 | | | 5 | |
Operating Income | Operating Income | 522 | | | 456 | | | 1,265 | | | 1,116 | |
Other Income and Expenses, net | Other Income and Expenses, net | 19 | | | 19 | | | 56 | | | 74 | |
Interest Expense | Interest Expense | 103 | | | 84 | | | 305 | | | 258 | |
Income Before Income Taxes | Income Before Income Taxes | 438 | | | 391 | | | 1,016 | | | 932 | |
Income Tax Expense | Income Tax Expense | 91 | | | 72 | | | 206 | | | 181 | |
Net Income | Net Income | $ | 347 | | | $ | 319 | | | $ | 810 | | | $ | 751 | |
| Other Comprehensive (Loss) Gain, net of tax | |
Other Comprehensive Income, net of tax | |
| Unrealized (losses) gains on available-for-sale securities | — | | | (1) | | | 2 | | | (3) | |
| Other Comprehensive Income, net of tax | |
| Other Comprehensive Income, net of tax | |
| Unrealized gains on available-for-sale securities | |
| Unrealized gains on available-for-sale securities | |
| Unrealized gains on available-for-sale securities | |
| Comprehensive Income | Comprehensive Income | $ | 347 | | | $ | 318 | | | $ | 812 | | | $ | 748 | |
| Comprehensive Income | |
| Comprehensive Income | |
See Notes to Condensed Consolidated Financial Statements
26
DUKE ENERGY FLORIDA, LLC
Condensed Consolidated Balance Sheets
(Unaudited)
| | | | | | | | | | | |
(in millions) | March 31, 2024 | | December 31, 2023 |
ASSETS | | | |
Current Assets | | | |
Cash and cash equivalents | $ | 4 | | | $ | 24 | |
Receivables (net of allowance for doubtful accounts of $12 at 2024 and $11 at 2023) | 90 | | | 83 | |
Receivables of VIEs (net of allowance for doubtful accounts of $15 at 2024 and $20 at 2023) | 467 | | | 532 | |
Receivables from affiliated companies | 2 | | | 238 | |
| | | |
Inventory (includes $470 at 2024 and $462 at 2023 related to VIEs) | 693 | | | 674 | |
Regulatory assets (includes $59 at 2024 and 2023 related to VIEs) | 525 | | | 720 | |
Other (includes $11 at 2024 and $37 at 2023 related to VIEs) | 57 | | | 51 | |
Total current assets | 1,838 | | | 2,322 | |
Property, Plant and Equipment | | | |
Cost | 28,882 | | | 28,353 | |
Accumulated depreciation and amortization | (7,219) | | | (7,067) | |
Net property, plant and equipment | 21,663 | | | 21,286 | |
Other Noncurrent Assets | | | |
Regulatory assets (includes $790 at 2024 and $803 at 2023 related to VIEs) | 1,895 | | | 1,883 | |
Nuclear decommissioning trust funds | 352 | | | 382 | |
Operating lease right-of-use assets, net | 294 | | | 299 | |
Other | 456 | | | 429 | |
Total other noncurrent assets | 2,997 | | | 2,993 | |
Total Assets | $ | 26,498 | | | $ | 26,601 | |
LIABILITIES AND EQUITY | | | |
Current Liabilities | | | |
Accounts payable (includes $179 at 2024 and $188 at 2023 related to VIEs) | $ | 616 | | | $ | 738 | |
Accounts payable to affiliated companies | 121 | | | 135 | |
Notes payable to affiliated companies | 66 | | | 152 | |
Taxes accrued | 134 | | | 185 | |
Interest accrued | 128 | | | 86 | |
Current maturities of long-term debt (includes $384 at 2024 and 2023 related to VIEs) | 586 | | | 589 | |
Asset retirement obligations | 1 | | | 1 | |
Regulatory liabilities | 93 | | | 118 | |
Other | 332 | | | 350 | |
Total current liabilities | 2,077 | | | 2,354 | |
Long-Term Debt (includes $800 at 2024 and $831 at 2023 related to VIEs) | 9,791 | | | 9,812 | |
Other Noncurrent Liabilities | | | |
Deferred income taxes | 2,750 | | | 2,733 | |
Asset retirement obligations | 252 | | | 274 | |
Regulatory liabilities | 709 | | | 708 | |
Operating lease liabilities | 247 | | | 251 | |
Accrued pension and other post-retirement benefit costs | 97 | | | 98 | |
Investment tax credits | 242 | | | 242 | |
Other (includes $10 at 2024 and $6 at 2023 related to VIEs) | 111 | | | 86 | |
Total other noncurrent liabilities | 4,408 | | | 4,392 | |
Commitments and Contingencies | | | |
Equity | | | |
Member's equity | 10,227 | | | 10,048 | |
Accumulated other comprehensive loss | (5) | | | (5) | |
Total equity | 10,222 | | | 10,043 | |
Total Liabilities and Equity | $ | 26,498 | | | $ | 26,601 | |
See Notes to Condensed Consolidated Financial Statements
27
DUKE ENERGY FLORIDA, LLC
Condensed Consolidated Balance SheetsStatements of Cash Flows
(Unaudited)
| | | | | | | | | | | |
(in millions) | September 30, 2023 | | December 31, 2022 |
ASSETS | | | |
Current Assets | | | |
Cash and cash equivalents | $ | 41 | | | $ | 45 | |
Receivables (net of allowance for doubtful accounts of $10 at 2023 and $8 at 2022) | 80 | | | 148 | |
Receivables of VIEs (net of allowance for doubtful accounts of $24 at 2023 and $28 at 2022) | 766 | | | 496 | |
Receivables from affiliated companies | 3 | | | 2 | |
| | | |
Inventory | 662 | | | 573 | |
Regulatory assets (includes $58 at 2023 and $55 at 2022 related to VIEs) | 749 | | | 1,143 | |
Other (includes $24 at 2023 and $46 at 2022 related to VIEs) | 129 | | | 108 | |
Total current assets | 2,430 | | | 2,515 | |
Property, Plant and Equipment | | | |
Cost | 27,581 | | | 25,940 | |
Accumulated depreciation and amortization | (6,896) | | | (6,377) | |
Net property, plant and equipment | 20,685 | | | 19,563 | |
Other Noncurrent Assets | | | |
Regulatory assets (includes $816 at 2023 and $826 at 2022 related to VIEs) | 2,042 | | | 2,422 | |
Nuclear decommissioning trust funds | 393 | | | 424 | |
Operating lease right-of-use assets, net | 302 | | | 258 | |
Other | 463 | | | 372 | |
Total other noncurrent assets | 3,200 | | | 3,476 | |
Total Assets | $ | 26,315 | | | $ | 25,554 | |
LIABILITIES AND EQUITY | | | |
Current Liabilities | | | |
Accounts payable | $ | 698 | | | $ | 880 | |
Accounts payable to affiliated companies | 154 | | | 177 | |
Notes payable to affiliated companies | 292 | | | 605 | |
Taxes accrued | 342 | | | 53 | |
Interest accrued | 104 | | | 80 | |
Current maturities of long-term debt (includes $383 at 2023 and $306 at 2022 related to VIEs) | 1,194 | | | 328 | |
Asset retirement obligations | 1 | | | 1 | |
Regulatory liabilities | 224 | | | 244 | |
Other | 349 | | | 363 | |
Total current liabilities | 3,358 | | | 2,731 | |
Long-Term Debt (includes $832 at 2023 and $890 at 2022 related to VIEs) | 8,726 | | | 9,381 | |
Other Noncurrent Liabilities | | | |
Deferred income taxes | 2,771 | | | 2,789 | |
Asset retirement obligations | 307 | | | 357 | |
Regulatory liabilities | 664 | | | 633 | |
Operating lease liabilities | 250 | | | 211 | |
Accrued pension and other post-retirement benefit costs | 100 | | | 111 | |
Investment tax credits | 233 | | | 234 | |
Other (includes $11 at 2023 related to VIEs) | 70 | | | 84 | |
Total other noncurrent liabilities | 4,395 | | | 4,419 | |
Commitments and Contingencies | | | |
Equity | | | |
Member's equity | 9,842 | | | 9,031 | |
Accumulated other comprehensive loss | (6) | | | (8) | |
Total equity | 9,836 | | | 9,023 | |
Total Liabilities and Equity | $ | 26,315 | | | $ | 25,554 | |
| | | | | | | | | | | |
| Three Months Ended |
| March 31, |
(in millions) | 2024 | | 2023 |
CASH FLOWS FROM OPERATING ACTIVITIES | | | |
Net income | $ | 179 | | | $ | 205 | |
Adjustments to reconcile net income to net cash provided by operating activities: | | | |
Depreciation, amortization and accretion | 284 | | | 194 | |
Equity component of AFUDC | (5) | | | (3) | |
| | | |
Impairment of assets and other charges | — | | | 1 | |
Deferred income taxes | 10 | | | 21 | |
| | | |
| | | |
| | | |
Payments for asset retirement obligations | (22) | | | (12) | |
| | | |
(Increase) decrease in | | | |
| | | |
Receivables | 53 | | | 42 | |
Receivables from affiliated companies | 236 | | | (1) | |
Inventory | (19) | | | (57) | |
Other current assets | 132 | | | 363 | |
Increase (decrease) in | | | |
Accounts payable | (48) | | | (211) | |
Accounts payable to affiliated companies | (14) | | | (67) | |
Taxes accrued | (51) | | | 79 | |
Other current liabilities | 11 | | | (27) | |
Other assets | (16) | | | (193) | |
Other liabilities | 34 | | | (8) | |
Net cash provided by operating activities | 764 | | | 326 | |
CASH FLOWS FROM INVESTING ACTIVITIES | | | |
Capital expenditures | (669) | | | (609) | |
| | | |
| | | |
Purchases of debt and equity securities | (30) | | | (40) | |
Proceeds from sales and maturities of debt and equity securities | 73 | | | 68 | |
| | | |
Other | (62) | | | (38) | |
Net cash used in investing activities | (688) | | | (619) | |
CASH FLOWS FROM FINANCING ACTIVITIES | | | |
Proceeds from the issuance of long-term debt | 3 | | | 5 | |
Payments for the redemption of long-term debt | (39) | | | (34) | |
Notes payable to affiliated companies | (86) | | | 281 | |
| | | |
Other | (1) | | | (1) | |
Net cash (used in) provided by financing activities | (123) | | | 251 | |
Net decrease in cash, cash equivalents and restricted cash | (47) | | | (42) | |
Cash, cash equivalents and restricted cash at beginning of period | 67 | | | 86 | |
Cash, cash equivalents and restricted cash at end of period | $ | 20 | | | $ | 44 | |
Supplemental Disclosures: | | | |
Significant non-cash transactions: | | | |
Accrued capital expenditures | $ | 421 | | | $ | 340 | |
See Notes to Condensed Consolidated Financial Statements
28
DUKE ENERGY FLORIDA, LLC
Condensed Consolidated Statements of Cash FlowsChanges in Equity
(Unaudited)
| | | | | | | | | | | |
| Nine Months Ended |
| September 30, |
(in millions) | 2023 | | 2022 |
CASH FLOWS FROM OPERATING ACTIVITIES | | | |
Net income | $ | 810 | | | $ | 751 | |
Adjustments to reconcile net income to net cash provided by operating activities: | | | |
Depreciation, amortization and accretion | 943 | | | 790 | |
Equity component of AFUDC | (10) | | | (13) | |
| | | |
Impairment of assets and other charges | (1) | | | — | |
Deferred income taxes | (42) | | | 237 | |
Equity in (earnings) losses of unconsolidated affiliates | 1 | | | — | |
| | | |
Contributions to qualified pension plans | (9) | | | (5) | |
Payments for asset retirement obligations | (46) | | | (73) | |
| | | |
(Increase) decrease in | | | |
| | | |
Receivables | (203) | | | (218) | |
Receivables from affiliated companies | (1) | | | 10 | |
Inventory | (89) | | | (95) | |
Other current assets | 516 | | | (814) | |
Increase (decrease) in | | | |
Accounts payable | (140) | | | 354 | |
Accounts payable to affiliated companies | (23) | | | (90) | |
Taxes accrued | 289 | | | 123 | |
Other current liabilities | 23 | | | 72 | |
Other assets | 12 | | | (162) | |
Other liabilities | (14) | | | 37 | |
Net cash provided by operating activities | 2,016 | | | 904 | |
CASH FLOWS FROM INVESTING ACTIVITIES | | | |
Capital expenditures | (1,851) | | | (1,624) | |
| | | |
| | | |
Purchases of debt and equity securities | (135) | | | (153) | |
Proceeds from sales and maturities of debt and equity securities | 182 | | | 216 | |
| | | |
Other | (125) | | | (76) | |
Net cash used in investing activities | (1,929) | | | (1,637) | |
CASH FLOWS FROM FINANCING ACTIVITIES | | | |
Proceeds from the issuance of long-term debt | 281 | | | 4 | |
Payments for the redemption of long-term debt | (76) | | | (74) | |
Notes payable to affiliated companies | (313) | | | 784 | |
| | | |
Other | (1) | | | (1) | |
Net cash (used in) provided by financing activities | (109) | | | 713 | |
Net decrease in cash, cash equivalents and restricted cash | (22) | | | (20) | |
Cash, cash equivalents and restricted cash at beginning of period | 86 | | | 62 | |
Cash, cash equivalents and restricted cash at end of period | $ | 64 | | | $ | 42 | |
Supplemental Disclosures: | | | |
Significant non-cash transactions: | | | |
Accrued capital expenditures | $ | 352 | | | $ | 288 | |
| | | | | | | | | | | | | | | | | |
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| | | | | |
| Three Months Ended March 31, 2023 and 2024 |
| | | Accumulated | | |
| | | Other | | |
| | | Comprehensive | | |
| | | Loss | | |
| | | Net Unrealized | | |
| | | Gains (Losses) on | | |
| Member's | | Available-for-Sale | | Total |
(in millions) | Equity | | Securities | | Equity |
Balance at December 31, 2022 | $ | 9,031 | | | $ | (8) | | | $ | 9,023 | |
Net income | 205 | | | — | | | 205 | |
Other comprehensive income | — | | | 2 | | | 2 | |
| | | | | |
| | | | | |
| | | | | |
| | | | | |
Other | 1 | | | — | | | 1 | |
Balance at March 31, 2023 | $ | 9,237 | | | $ | (6) | | | $ | 9,231 | |
| | | | | |
Balance at December 31, 2023 | $ | 10,048 | | | $ | (5) | | | $ | 10,043 | |
Net income | 179 | | | — | | | 179 | |
| | | | | |
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Balance at March 31, 2024 | $ | 10,227 | | | $ | (5) | | | $ | 10,222 | |
See Notes to Condensed Consolidated Financial Statements
29
DUKE ENERGY FLORIDA, LLC
Condensed Consolidated Statements of Changes in Equity
(Unaudited)
| | | | | | | | | | | | | | | | | |
| Three Months Ended September 30, 2022 and 2023 |
| | | Accumulated | | |
| | | Other | | |
| | | Comprehensive | | |
| | | Loss | | |
| | | Net Unrealized | | |
| | | Losses on | | |
| Member's | | Available-for-Sale | | Total |
(in millions) | Equity | | Securities | | Equity |
Balance at June 30, 2022 | $ | 8,730 | | | $ | (5) | | | $ | 8,725 | |
Net income | 319 | | | — | | | 319 | |
Other comprehensive loss | — | | | (1) | | | (1) | |
| | | | | |
| | | | | |
| | | | | |
| | | | | |
| | | | | |
Balance at September 30, 2022 | $ | 9,049 | | | $ | (6) | | | $ | 9,043 | |
| | | | | |
Balance at June 30, 2023 | $ | 9,494 | | | $ | (6) | | | $ | 9,488 | |
Net income | 347 | | | — | | | 347 | |
| | | | | |
Other | 1 | | | — | | | 1 | |
Balance at September 30, 2023 | $ | 9,842 | | | $ | (6) | | | $ | 9,836 | |
| | | | | |
| Nine Months Ended September 30, 2022 and 2023 |
| | | Accumulated | | |
| | | Other | | |
| | | Comprehensive | | |
| | | Loss | | |
| | | Net Unrealized | | |
| | | Gains (Losses) on | | |
| Member's | | Available-for-Sale | | Total |
(in millions) | Equity | | Securities | | Equity |
Balance at December 31, 2021 | $ | 8,298 | | | $ | (3) | | | $ | 8,295 | |
Net income | 751 | | | — | | | 751 | |
Other comprehensive loss | — | | | (3) | | | (3) | |
| | | | | |
| | | | | |
| | | | | |
| | | | | |
| | | | | |
Balance at September 30, 2022 | $ | 9,049 | | | $ | (6) | | | $ | 9,043 | |
| | | | | |
Balance at December 31, 2022 | $ | 9,031 | | | $ | (8) | | | $ | 9,023 | |
Net income | 810 | | | — | | | 810 | |
Other comprehensive income | — | | | 2 | | | 2 | |
| | | | | |
| | | | | |
| | | | | |
Other | 1 | | | — | | | 1 | |
Balance at September 30, 2023 | $ | 9,842 | | | $ | (6) | | | $ | 9,836 | |
See Notes to Condensed Consolidated Financial Statements
30
DUKE ENERGY OHIO, INC.
Condensed Consolidated Statements of Operations and Comprehensive Income
(Unaudited)
| | Three Months Ended | | Nine Months Ended |
| September 30, | | September 30, |
| | | Three Months Ended | |
| | | Three Months Ended | |
| | | Three Months Ended | |
| | | March 31, | | | | | March 31, |
(in millions) | (in millions) | 2023 | | 2022 | | 2023 | | 2022 | (in millions) | | | | | 2024 | | 2023 |
Operating Revenues | Operating Revenues | |
Regulated electric | |
Regulated electric | |
Regulated electric | Regulated electric | $ | 472 | | | $ | 507 | | | $ | 1,411 | | | $ | 1,320 | |
Regulated natural gas | Regulated natural gas | 105 | | | 121 | | | 464 | | | 491 | |
| Total operating revenues | Total operating revenues | 577 | | | 628 | | | 1,875 | | | 1,811 | |
Total operating revenues | |
Total operating revenues | |
Operating Expenses | Operating Expenses | |
Fuel used in electric generation and purchased power | Fuel used in electric generation and purchased power | 145 | | | 185 | | | 485 | | | 439 | |
Fuel used in electric generation and purchased power | |
Fuel used in electric generation and purchased power | |
| Cost of natural gas | |
Cost of natural gas | |
Cost of natural gas | Cost of natural gas | 6 | | | 21 | | | 118 | | | 174 | |
Operation, maintenance and other | Operation, maintenance and other | 114 | | | 121 | | | 358 | | | 408 | |
Depreciation and amortization | Depreciation and amortization | 90 | | | 84 | | | 266 | | | 247 | |
Property and other taxes | Property and other taxes | 94 | | | 79 | | | 258 | | | 272 | |
Impairment of assets and other charges | — | | | (11) | | | — | | | (11) | |
| Total operating expenses | Total operating expenses | 449 | | | 479 | | | 1,485 | | | 1,529 | |
Losses on Sales of Other Assets and Other, net | — | | | (1) | | | — | | | — | |
Total operating expenses | |
Total operating expenses | |
| Operating Income | |
Operating Income | |
Operating Income | Operating Income | 128 | | | 148 | | | 390 | | | 282 | |
Other Income and Expenses, net | Other Income and Expenses, net | 12 | | | 4 | | | 33 | | | 16 | |
Interest Expense | Interest Expense | 46 | | | 32 | | | 125 | | | 92 | |
Income Before Income Taxes | Income Before Income Taxes | 94 | | | 120 | | | 298 | | | 206 | |
Income Tax Expense (Benefit) | 14 | | | 17 | | | 47 | | | (30) | |
Income Tax Expense | |
| | Net Income and Comprehensive Income | |
| Net Income and Comprehensive Income | |
| Net Income and Comprehensive Income | Net Income and Comprehensive Income | $ | 80 | | | $ | 103 | | | $ | 251 | | | $ | 236 | |
|
See Notes to Condensed Consolidated Financial Statements
30
DUKE ENERGY OHIO, INC.
Condensed Consolidated Balance Sheets
(Unaudited)
| | | | | | | | | | | |
(in millions) | March 31, 2024 | | December 31, 2023 |
ASSETS | | | |
Current Assets | | | |
Cash and cash equivalents | $ | 5 | | | $ | 24 | |
Receivables (net of allowance for doubtful accounts of $41 at 2024 and $9 at 2023) | 437 | | | 112 | |
Receivables from affiliated companies | 3 | | | 239 | |
| | | |
Inventory | 185 | | | 179 | |
| | | |
Regulatory assets | 75 | | | 73 | |
Other | 17 | | | 134 | |
Total current assets | 722 | | | 761 | |
Property, Plant and Equipment | | | |
Cost | 13,378 | | | 13,210 | |
Accumulated depreciation and amortization | (3,507) | | | (3,451) | |
| | | |
Net property, plant and equipment | 9,871 | | | 9,759 | |
Other Noncurrent Assets | | | |
Goodwill | 920 | | | 920 | |
Regulatory assets | 678 | | | 676 | |
| | | |
Operating lease right-of-use assets, net | 16 | | | 16 | |
| | | |
Other | 98 | | | 84 | |
Total other noncurrent assets | 1,712 | | | 1,696 | |
Total Assets | $ | 12,305 | | | $ | 12,216 | |
LIABILITIES AND EQUITY | | | |
Current Liabilities | | | |
Accounts payable | $ | 288 | | | $ | 338 | |
Accounts payable to affiliated companies | 69 | | | 71 | |
Notes payable to affiliated companies | 306 | | | 613 | |
Taxes accrued | 249 | | | 316 | |
Interest accrued | 51 | | | 35 | |
| | | |
| | | |
Asset retirement obligations | 7 | | | 6 | |
Regulatory liabilities | 40 | | | 56 | |
Other | 64 | | | 65 | |
Total current liabilities | 1,074 | | | 1,500 | |
Long-Term Debt | 3,914 | | | 3,493 | |
Long-Term Debt Payable to Affiliated Companies | 25 | | | 25 | |
Other Noncurrent Liabilities | | | |
Deferred income taxes | 1,282 | | | 1,272 | |
Asset retirement obligations | 134 | | | 130 | |
Regulatory liabilities | 481 | | | 497 | |
Operating lease liabilities | 16 | | | 16 | |
Accrued pension and other post-retirement benefit costs | 98 | | | 97 | |
| | | |
Other | 87 | | | 86 | |
Total other noncurrent liabilities | 2,098 | | | 2,098 | |
Commitments and Contingencies | | | |
Equity | | | |
Common Stock, $8.50 par value, 120 million shares authorized; 90 million shares outstanding at 2024 and 2023 | 762 | | | 762 | |
Additional paid-in capital | 3,100 | | | 3,100 | |
Retained earnings | 1,332 | | | 1,238 | |
| | | |
Total equity | 5,194 | | | 5,100 | |
Total Liabilities and Equity | $ | 12,305 | | | $ | 12,216 | |
See Notes to Condensed Consolidated Financial Statements
31
DUKE ENERGY OHIO, INC.
Condensed Consolidated Balance SheetsStatements of Cash Flows
(Unaudited)
| | | | | | | | | | | |
(in millions) | September 30, 2023 | | December 31, 2022 |
ASSETS | | | |
Current Assets | | | |
Cash and cash equivalents | $ | 20 | | | $ | 16 | |
Receivables (net of allowance for doubtful accounts of $8 at 2023 and $6 at 2022) | 97 | | | 73 | |
Receivables from affiliated companies | 155 | | | 247 | |
| | | |
Inventory | 168 | | | 144 | |
| | | |
Regulatory assets | 48 | | | 103 | |
Other | 47 | | | 86 | |
Total current assets | 535 | | | 669 | |
Property, Plant and Equipment | | | |
Cost | 12,976 | | | 12,497 | |
Accumulated depreciation and amortization | (3,385) | | | (3,250) | |
| | | |
Net property, plant and equipment | 9,591 | | | 9,247 | |
Other Noncurrent Assets | | | |
Goodwill | 920 | | | 920 | |
Regulatory assets | 655 | | | 581 | |
| | | |
Operating lease right-of-use assets, net | 17 | | | 18 | |
| | | |
Other | 76 | | | 71 | |
Total other noncurrent assets | 1,668 | | | 1,590 | |
Total Assets | $ | 11,794 | | | $ | 11,506 | |
LIABILITIES AND EQUITY | | | |
Current Liabilities | | | |
Accounts payable | $ | 322 | | | $ | 380 | |
Accounts payable to affiliated companies | 71 | | | 72 | |
Notes payable to affiliated companies | 273 | | | 497 | |
Taxes accrued | 247 | | | 317 | |
Interest accrued | 51 | | | 29 | |
Current maturities of long-term debt | 175 | | | 475 | |
| | | |
Asset retirement obligations | 8 | | | 17 | |
Regulatory liabilities | 46 | | | 99 | |
Other | 72 | | | 74 | |
Total current liabilities | 1,265 | | | 1,960 | |
Long-Term Debt | 3,492 | | | 2,745 | |
Long-Term Debt Payable to Affiliated Companies | 25 | | | 25 | |
Other Noncurrent Liabilities | | | |
Deferred income taxes | 1,169 | | | 1,136 | |
Asset retirement obligations | 130 | | | 137 | |
Regulatory liabilities | 498 | | | 534 | |
Operating lease liabilities | 17 | | | 17 | |
Accrued pension and other post-retirement benefit costs | 91 | | | 90 | |
| | | |
Other | 90 | | | 96 | |
Total other noncurrent liabilities | 1,995 | | | 2,010 | |
Commitments and Contingencies | | | |
Equity | | | |
Common Stock, $8.50 par value, 120 million shares authorized; 90 million shares outstanding at 2023 and 2022 | 762 | | | 762 | |
Additional paid-in capital | 3,100 | | | 3,100 | |
Retained earnings | 1,155 | | | 904 | |
| | | |
Total equity | 5,017 | | | 4,766 | |
Total Liabilities and Equity | $ | 11,794 | | | $ | 11,506 | |
| | | | | | | | | | | |
| Three Months Ended |
| March 31, |
(in millions) | 2024 | | 2023 |
CASH FLOWS FROM OPERATING ACTIVITIES | | | |
Net income | $ | 94 | | | $ | 100 | |
Adjustments to reconcile net income to net cash provided by operating activities: | | | |
Depreciation and amortization | 100 | | | 91 | |
| | | |
| | | |
| | | |
Deferred income taxes | 2 | | | (3) | |
| | | |
| | | |
| | | |
Payments for asset retirement obligations | (1) | | | (1) | |
| | | |
(Increase) decrease in | | | |
| | | |
Receivables | 12 | | | — | |
Receivables from affiliated companies | 65 | | | 17 | |
Inventory | (5) | | | (11) | |
Other current assets | 100 | | | 94 | |
Increase (decrease) in | | | |
Accounts payable | (20) | | | (60) | |
Accounts payable to affiliated companies | (2) | | | (7) | |
Taxes accrued | (67) | | | (90) | |
Other current liabilities | (7) | | | (42) | |
Other assets | 7 | | | 1 | |
Other liabilities | (17) | | | (1) | |
Net cash provided by operating activities | 261 | | | 88 | |
CASH FLOWS FROM INVESTING ACTIVITIES | | | |
Capital expenditures | (217) | | | (232) | |
| | | |
| | | |
| | | |
| | | |
Net proceeds from the sales of other assets | — | | | 75 | |
Notes receivable from affiliated companies | (166) | | | (224) | |
Other | (10) | | | (16) | |
Net cash used in investing activities | (393) | | | (397) | |
CASH FLOWS FROM FINANCING ACTIVITIES | | | |
Proceeds from the issuance of long-term debt | 424 | | | 749 | |
| | | |
Notes payable to affiliated companies | (307) | | | (425) | |
| | | |
Other | (4) | | | (5) | |
Net cash provided by financing activities | 113 | | | 319 | |
Net (decrease) increase in cash and cash equivalents | (19) | | | 10 | |
Cash and cash equivalents at beginning of period | 24 | | | 16 | |
Cash and cash equivalents at end of period | $ | 5 | | | $ | 26 | |
Supplemental Disclosures: | | | |
Significant non-cash transactions: | | | |
Accrued capital expenditures | $ | 84 | | | $ | 87 | |
| | | |
See Notes to Condensed Consolidated Financial Statements
32
DUKE ENERGY OHIO, INC.
Condensed Consolidated Statements of Cash FlowsChanges in Equity
(Unaudited)
| | | | | | | | | | | |
| Nine Months Ended |
| September 30, |
(in millions) | 2023 | | 2022 |
CASH FLOWS FROM OPERATING ACTIVITIES | | | |
Net income | $ | 251 | | | $ | 236 | |
Adjustments to reconcile net income to net cash provided by operating activities: | | | |
Depreciation and amortization | 269 | | | 251 | |
Equity component of AFUDC | (7) | | | (7) | |
| | | |
Impairment of assets and other charges | — | | | (11) | |
Deferred income taxes | 7 | | | (13) | |
| | | |
| | | |
Contributions to qualified pension plans | (5) | | | (3) | |
Payments for asset retirement obligations | (9) | | | (7) | |
Provision for rate refunds | — | | | 5 | |
(Increase) decrease in | | | |
| | | |
Receivables | (23) | | | 8 | |
Receivables from affiliated companies | 103 | | | 11 | |
Inventory | (24) | | | (2) | |
Other current assets | 103 | | | (60) | |
Increase (decrease) in | | | |
Accounts payable | (69) | | | (6) | |
Accounts payable to affiliated companies | (1) | | | (4) | |
Taxes accrued | (70) | | | (44) | |
Other current liabilities | (29) | | | (76) | |
Other assets | (39) | | | (54) | |
Other liabilities | (8) | | | 80 | |
Net cash provided by operating activities | 449 | | | 304 | |
CASH FLOWS FROM INVESTING ACTIVITIES | | | |
Capital expenditures | (676) | | | (623) | |
| | | |
| | | |
| | | |
| | | |
Net proceeds from the sales of other assets | 75 | | | — | |
Notes receivable from affiliated companies | (11) | | | (85) | |
Other | (53) | | | (47) | |
Net cash used in investing activities | (665) | | | (755) | |
CASH FLOWS FROM FINANCING ACTIVITIES | | | |
Proceeds from the issuance of long-term debt | 749 | | | 50 | |
Payments for the redemption of long-term debt | (300) | | | — | |
Notes payable to affiliated companies | (224) | | | 399 | |
| | | |
Other | (5) | | | (2) | |
Net cash provided by financing activities | 220 | | | 447 | |
Net increase (decrease) in cash and cash equivalents | 4 | | | (4) | |
Cash and cash equivalents at beginning of period | 16 | | | 13 | |
Cash and cash equivalents at end of period | $ | 20 | | | $ | 9 | |
Supplemental Disclosures: | | | |
Significant non-cash transactions: | | | |
Accrued capital expenditures | $ | 134 | | | $ | 119 | |
| | | |
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| | | | | | | | | |
| Three Months Ended March 31, 2023 and 2024 |
| | | Additional | | | | | | |
| Common | | Paid-in | | Retained | | | | Total |
(in millions) | Stock | | Capital | | Earnings | | | | Equity |
Balance at December 31, 2022 | $ | 762 | | | $ | 3,100 | | | $ | 904 | | | | | $ | 4,766 | |
Net income | — | | | — | | | 100 | | | | | 100 | |
| | | | | | | | | |
| | | | | | | | | |
| | | | | | | | | |
Balance at March 31, 2023 | $ | 762 | | | $ | 3,100 | | | $ | 1,004 | | | | | $ | 4,866 | |
| | | | | | | | | |
Balance at December 31, 2023 | $ | 762 | | | $ | 3,100 | | | $ | 1,238 | | | | | $ | 5,100 | |
Net income | — | | | — | | | 94 | | | | | 94 | |
| | | | | | | | | |
| | | | | | | | | |
| | | | | | | | | |
Balance at March 31, 2024 | $ | 762 | | | $ | 3,100 | | | $ | 1,332 | | | | | $ | 5,194 | |
See Notes to Condensed Consolidated Financial Statements
33
DUKE ENERGY OHIO, INC.
Condensed Consolidated Statements of Changes in Equity
(Unaudited)
| | | | | | | | | | | | | | | | | | | | | | | | | |
| Three Months Ended September 30, 2022 and 2023 |
| | | Additional | | | | | | |
| Common | | Paid-in | | Retained | | | | Total |
(in millions) | Stock | | Capital | | Earnings | | | | Equity |
Balance at June 30, 2022 | $ | 762 | | | $ | 3,100 | | | $ | 735 | | | | | $ | 4,597 | |
Net income | — | | | — | | | 103 | | | | | 103 | |
| | | | | | | | | |
| | | | | | | | | |
Other | — | | | — | | | 1 | | | | | 1 | |
Balance at September 30, 2022 | $ | 762 | | | $ | 3,100 | | | $ | 839 | | | | | $ | 4,701 | |
| | | | | | | | | |
Balance at June 30, 2023 | $ | 762 | | | $ | 3,100 | | | $ | 1,075 | | | | | $ | 4,937 | |
Net income | — | | | — | | | 80 | | | | | 80 | |
| | | | | | | | | |
| | | | | | | | | |
| | | | | | | | | |
Balance at September 30, 2023 | $ | 762 | | | $ | 3,100 | | | $ | 1,155 | | | | | $ | 5,017 | |
| | | | | | | | | |
| Nine Months Ended September 30, 2022 and 2023 |
| | | Additional | | | | | | |
| Common | | Paid-in | | Retained | | | | Total |
(in millions) | Stock | | Capital | | Earnings | | | | Equity |
Balance at December 31, 2021 | $ | 762 | | | $ | 3,100 | | | $ | 602 | | | | | $ | 4,464 | |
Net income | — | | | — | | | 236 | | | | | 236 | |
| | | | | | | | | |
| | | | | | | | | |
Other | — | | | — | | | 1 | | | | | 1 | |
Balance at September 30, 2022 | $ | 762 | | | $ | 3,100 | | | $ | 839 | | | | | $ | 4,701 | |
| | | | | | | | | |
Balance at December 31, 2022 | $ | 762 | | | $ | 3,100 | | | $ | 904 | | | | | $ | 4,766 | |
Net income | — | | | — | | | 251 | | | | | 251 | |
| | | | | | | | | |
| | | | | | | | | |
| | | | | | | | | |
Balance at September 30, 2023 | $ | 762 | | | $ | 3,100 | | | $ | 1,155 | | | | | $ | 5,017 | |
See Notes to Condensed Consolidated Financial Statements
34
DUKE ENERGY INDIANA, LLC
Condensed Consolidated Statements of Operations and Comprehensive Income
(Unaudited)
| | Three Months Ended | | Nine Months Ended |
| September 30, | | September 30, |
| | | Three Months Ended | |
| | | Three Months Ended | |
| | | Three Months Ended | |
| | | March 31, | | | | | March 31, |
(in millions) | (in millions) | 2023 | | 2022 | | 2023 | | 2022 | (in millions) | | | | | 2024 | | 2023 |
Operating Revenues | Operating Revenues | $ | 851 | | | $ | 1,095 | | | $ | 2,606 | | | $ | 2,835 | |
Operating Expenses | Operating Expenses | |
Fuel used in electric generation and purchased power | Fuel used in electric generation and purchased power | 283 | | | 556 | | | 980 | | | 1,234 | |
Fuel used in electric generation and purchased power | |
Fuel used in electric generation and purchased power | |
Operation, maintenance and other | Operation, maintenance and other | 160 | | | 177 | | | 524 | | | 551 | |
Depreciation and amortization | Depreciation and amortization | 173 | | | 167 | | | 500 | | | 478 | |
Property and other taxes | Property and other taxes | 17 | | | 13 | | | 42 | | | 60 | |
Impairment of assets and other charges | — | | | — | | | — | | | 211 | |
| Total operating expenses | |
Total operating expenses | |
Total operating expenses | Total operating expenses | 633 | | | 913 | | | 2,046 | | | 2,534 | |
| Operating Income | |
Operating Income | |
Operating Income | Operating Income | 218 | | | 182 | | | 560 | | | 301 | |
Other Income and Expenses, net | Other Income and Expenses, net | 30 | | | 9 | | | 58 | | | 27 | |
Interest Expense | Interest Expense | 53 | | | 48 | | | 157 | | | 138 | |
Income Before Income Taxes | Income Before Income Taxes | 195 | | | 143 | | | 461 | | | 190 | |
Income Tax Expense | Income Tax Expense | 36 | | | 24 | | | 82 | | | 1 | |
Net Income and Comprehensive Income | $ | 159 | | | $ | 119 | | | $ | 379 | | | $ | 189 | |
| Net Income | |
Other Comprehensive Loss, net of tax | |
Pension and OPEB adjustments | |
Pension and OPEB adjustments | |
Pension and OPEB adjustments | |
Comprehensive Income | |
See Notes to Condensed Consolidated Financial Statements
34
DUKE ENERGY INDIANA, LLC
Condensed Consolidated Balance Sheets
(Unaudited)
| | | | | | | | | | | |
(in millions) | March 31, 2024 | | December 31, 2023 |
ASSETS | | | |
Current Assets | | | |
Cash and cash equivalents | $ | 5 | | | $ | 8 | |
Receivables (net of allowance for doubtful accounts of $16 at 2024 and $5 at 2023) | 429 | | | 156 | |
Receivables from affiliated companies | 12 | | | 197 | |
| | | |
Inventory | 534 | | | 582 | |
Regulatory assets | 101 | | | 102 | |
Other | 59 | | | 98 | |
Total current assets | 1,140 | | | 1,143 | |
Property, Plant and Equipment | | | |
Cost | 19,097 | | | 18,900 | |
Accumulated depreciation and amortization | (6,598) | | | (6,501) | |
| | | |
Net property, plant and equipment | 12,499 | | | 12,399 | |
Other Noncurrent Assets | | | |
Regulatory assets | 900 | | | 894 | |
| | | |
Operating lease right-of-use assets, net | 48 | | | 50 | |
Other | 353 | | | 325 | |
Total other noncurrent assets | 1,301 | | | 1,269 | |
Total Assets | $ | 14,940 | | | $ | 14,811 | |
LIABILITIES AND EQUITY | | | |
Current Liabilities | | | |
Accounts payable | $ | 234 | | | $ | 300 | |
Accounts payable to affiliated companies | 78 | | | 176 | |
Notes payable to affiliated companies | 136 | | | 256 | |
Taxes accrued | 75 | | | 66 | |
Interest accrued | 73 | | | 54 | |
Current maturities of long-term debt | 4 | | | 4 | |
Asset retirement obligations | 131 | | | 120 | |
Regulatory liabilities | 213 | | | 209 | |
Other | 179 | | | 184 | |
Total current liabilities | 1,123 | | | 1,369 | |
Long-Term Debt | 4,646 | | | 4,348 | |
Long-Term Debt Payable to Affiliated Companies | 150 | | | 150 | |
Other Noncurrent Liabilities | | | |
Deferred income taxes | 1,476 | | | 1,436 | |
Asset retirement obligations | 672 | | | 689 | |
Regulatory liabilities | 1,450 | | | 1,459 | |
Operating lease liabilities | 45 | | | 46 | |
Accrued pension and other post-retirement benefit costs | 101 | | | 115 | |
Investment tax credits | 186 | | | 186 | |
Other | 13 | | | — | |
Total other noncurrent liabilities | 3,943 | | | 3,931 | |
Commitments and Contingencies | | | |
Equity | | | |
Member's equity | 5,078 | | | 5,012 | |
Accumulated other comprehensive income | — | | | 1 | |
Total equity | 5,078 | | | 5,013 | |
Total Liabilities and Equity | $ | 14,940 | | | $ | 14,811 | |
See Notes to Condensed Consolidated Financial Statements
35
DUKE ENERGY INDIANA, LLC
Condensed Consolidated Balance SheetsStatements of Cash Flows
(Unaudited)
| | | | | | | | | | | |
(in millions) | September 30, 2023 | | December 31, 2022 |
ASSETS | | | |
Current Assets | | | |
Cash and cash equivalents | $ | 14 | | | $ | 31 | |
Receivables (net of allowance for doubtful accounts of $5 at 2023 and $4 at 2022) | 117 | | | 112 | |
Receivables from affiliated companies | 154 | | | 298 | |
| | | |
Inventory | 600 | | | 489 | |
Regulatory assets | 93 | | | 249 | |
Other | 59 | | | 197 | |
Total current assets | 1,037 | | | 1,376 | |
Property, Plant and Equipment | | | |
Cost | 18,638 | | | 18,121 | |
Accumulated depreciation and amortization | (6,359) | | | (6,021) | |
| | | |
Net property, plant and equipment | 12,279 | | | 12,100 | |
Other Noncurrent Assets | | | |
Regulatory assets | 899 | | | 875 | |
| | | |
Operating lease right-of-use assets, net | 47 | | | 49 | |
Other | 323 | | | 254 | |
Total other noncurrent assets | 1,269 | | | 1,178 | |
Total Assets | $ | 14,585 | | | $ | 14,654 | |
LIABILITIES AND EQUITY | | | |
Current Liabilities | | | |
Accounts payable | $ | 277 | | | $ | 391 | |
Accounts payable to affiliated companies | 111 | | | 206 | |
Notes payable to affiliated companies | 200 | | | 435 | |
Taxes accrued | 88 | | | 92 | |
Interest accrued | 74 | | | 48 | |
Current maturities of long-term debt | 3 | | | 303 | |
Asset retirement obligations | 114 | | | 207 | |
Regulatory liabilities | 205 | | | 187 | |
Other | 157 | | | 161 | |
Total current liabilities | 1,229 | | | 2,030 | |
Long-Term Debt | 4,351 | | | 3,854 | |
Long-Term Debt Payable to Affiliated Companies | 150 | | | 150 | |
Other Noncurrent Liabilities | | | |
Deferred income taxes | 1,352 | | | 1,299 | |
Asset retirement obligations | 728 | | | 744 | |
Regulatory liabilities | 1,478 | | | 1,454 | |
Operating lease liabilities | 45 | | | 47 | |
Accrued pension and other post-retirement benefit costs | 116 | | | 122 | |
Investment tax credits | 186 | | | 186 | |
Other | 14 | | | 65 | |
Total other noncurrent liabilities | 3,919 | | | 3,917 | |
Commitments and Contingencies | | | |
Equity | | | |
Member's equity | 4,935 | | | 4,702 | |
Accumulated other comprehensive income | 1 | | | 1 | |
Total equity | 4,936 | | | 4,703 | |
Total Liabilities and Equity | $ | 14,585 | | | $ | 14,654 | |
| | | | | | | | | | | |
| Three Months Ended |
| March 31, |
(in millions) | 2024 | | 2023 |
CASH FLOWS FROM OPERATING ACTIVITIES | | | |
Net income | $ | 67 | | | $ | 106 | |
Adjustments to reconcile net income to net cash provided by operating activities: | | | |
Depreciation, amortization and accretion | 170 | | | 158 | |
Equity component of AFUDC | (2) | | | (1) | |
| | | |
| | | |
Deferred income taxes | 24 | | | 2 | |
| | | |
| | | |
| | | |
Payments for asset retirement obligations | (12) | | | (19) | |
| | | |
(Increase) decrease in | | | |
| | | |
Receivables | 35 | | | 20 | |
Receivables from affiliated companies | (6) | | | (26) | |
Inventory | 48 | | | (71) | |
Other current assets | 30 | | | 174 | |
Increase (decrease) in | | | |
Accounts payable | (39) | | | (107) | |
Accounts payable to affiliated companies | (57) | | | (33) | |
Taxes accrued | 9 | | | 14 | |
Other current liabilities | 32 | | | 112 | |
Other assets | (13) | | | (12) | |
Other liabilities | (7) | | | 35 | |
Net cash provided by operating activities | 279 | | | 352 | |
CASH FLOWS FROM INVESTING ACTIVITIES | | | |
Capital expenditures | (275) | | | (226) | |
| | | |
| | | |
Purchases of debt and equity securities | (5) | | | (23) | |
Proceeds from sales and maturities of debt and equity securities | 4 | | | 16 | |
Notes receivable from affiliated companies | (117) | | | 96 | |
Other | (24) | | | (10) | |
Net cash used in investing activities | (417) | | | (147) | |
CASH FLOWS FROM FINANCING ACTIVITIES | | | |
Proceeds from the issuance of long-term debt | 298 | | | 495 | |
Payments for the redemption of long-term debt | — | | | (300) | |
Notes payable to affiliated companies | (120) | | | (231) | |
Distributions to parent | (42) | | | (188) | |
Other | (1) | | | (1) | |
Net cash provided by (used in) financing activities | 135 | | | (225) | |
Net decrease in cash and cash equivalents | (3) | | | (20) | |
Cash and cash equivalents at beginning of period | 8 | | | 31 | |
Cash and cash equivalents at end of period | $ | 5 | | | $ | 11 | |
Supplemental Disclosures: | | | |
Significant non-cash transactions: | | | |
Accrued capital expenditures | $ | 88 | | | $ | 85 | |
See Notes to Condensed Consolidated Financial Statements
36
DUKE ENERGY INDIANA, LLC
Condensed Consolidated Statements of Cash FlowsChanges in Equity
(Unaudited)
| | | | | | | | | | | |
| Nine Months Ended |
| September 30, |
(in millions) | 2023 | | 2022 |
CASH FLOWS FROM OPERATING ACTIVITIES | | | |
Net income | $ | 379 | | | $ | 189 | |
Adjustments to reconcile net income to net cash provided by operating activities: | | | |
Depreciation, amortization and accretion | 503 | | | 481 | |
Equity component of AFUDC | (7) | | | (12) | |
| | | |
Impairment of assets and other charges | — | | | 211 | |
Deferred income taxes | 15 | | | (26) | |
| | | |
| | | |
Contributions to qualified pension plans | (8) | | | (5) | |
Payments for asset retirement obligations | (57) | | | (67) | |
| | | |
(Increase) decrease in | | | |
| | | |
Receivables | (23) | | | (1) | |
Receivables from affiliated companies | (12) | | | 17 | |
Inventory | (112) | | | (34) | |
Other current assets | 209 | | | (181) | |
Increase (decrease) in | | | |
Accounts payable | (86) | | | 44 | |
Accounts payable to affiliated companies | (32) | | | (24) | |
Taxes accrued | (4) | | | 5 | |
Other current liabilities | 107 | | | 18 | |
Other assets | (62) | | | 8 | |
Other liabilities | 26 | | | 9 | |
Net cash provided by operating activities | 836 | | | 632 | |
CASH FLOWS FROM INVESTING ACTIVITIES | | | |
Capital expenditures | (699) | | | (643) | |
| | | |
| | | |
Purchases of debt and equity securities | (53) | | | (43) | |
Proceeds from sales and maturities of debt and equity securities | 42 | | | 32 | |
Notes receivable from affiliated companies | 156 | | | (32) | |
Other | (50) | | | (38) | |
Net cash used in investing activities | (604) | | | (724) | |
CASH FLOWS FROM FINANCING ACTIVITIES | | | |
Proceeds from the issuance of long-term debt | 495 | | | 67 | |
Payments for the redemption of long-term debt | (300) | | | (81) | |
Notes payable to affiliated companies | (234) | | | 483 | |
Distributions to parent | (209) | | | (350) | |
Other | (1) | | | (1) | |
Net cash (used in) provided by financing activities | (249) | | | 118 | |
Net (decrease) increase in cash and cash equivalents | (17) | | | 26 | |
Cash and cash equivalents at beginning of period | 31 | | | 6 | |
Cash and cash equivalents at end of period | $ | 14 | | | $ | 32 | |
Supplemental Disclosures: | | | |
Significant non-cash transactions: | | | |
Accrued capital expenditures | $ | 94 | | | $ | 102 | |
| | | | | | | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | |
| | | | | | | | | | | |
| | | | | | | | | | | |
| | | | | | | | | | | |
| | | | | | | | | | | |
| | | | | | | | | | | |
| | | | | | | | | | | |
| | | | | | | | | | | |
| | | | | | | | | | | |
| | | | | | | | | | | |
| | | | | | | | | | | |
| | | | | | | | | | | |
| | | | | | | | | | | |
| | | | | | | | | | | |
| | | | | | | | | | | |
| | | | | | | | | | | |
| | | | | | | | | | | |
| | | | | | | Three Months Ended March 31, 2023 and 2024 |
| | | | | | | | | Accumulated Other | | |
| | | | | | | | | Comprehensive Income (Loss) | | |
| | | | | | | Member's | | Pension and | | Total |
(in millions) | | | | | | | Equity | | OPEB Adjustments | | Equity |
Balance at December 31, 2022 | | | | | | | $ | 4,702 | | | $ | 1 | | | $ | 4,703 | |
Net income | | | | | | | 106 | | | — | | | 106 | |
| | | | | | | | | | | |
Distributions to parent | | | | | | | (75) | | | — | | | (75) | |
| | | | | | | | | | | |
Balance at March 31, 2023 | | | | | | | $ | 4,733 | | | $ | 1 | | | $ | 4,734 | |
| | | | | | | | | | | |
Balance at December 31, 2023 | | | | | | | $ | 5,012 | | | $ | 1 | | | $ | 5,013 | |
Net income | | | | | | | 67 | | | — | | | 67 | |
| | | | | | | | | | | |
| | | | | | | | | | | |
Other | | | | | | | (1) | | | (1) | | | (2) | |
| | | | | | | | | | | |
Balance at March 31, 2024 | | | | | | | $ | 5,078 | | | $ | — | | | $ | 5,078 | |
See Notes to Condensed Consolidated Financial Statements
37
DUKE ENERGY INDIANA, LLC
Condensed Consolidated Statements of Changes in Equity
(Unaudited)
| | | | | | | | | | | | | | | | | | | | | | | |
| | | | | | | | | Accumulated Other | | |
| | | | | | | | | Comprehensive Income | | |
| | | | | | | Member's | | Pension and | | Total |
(in millions) | | | | | | | Equity | | OPEB Adjustments | | Equity |
Balance at June 30, 2022 | | | | | | | $ | 4,861 | | | $ | — | | | $ | 4,861 | |
Net income | | | | | | | 119 | | | — | | | 119 | |
| | | | | | | | | | | |
| | | | | | | | | | | |
Other | | | | | | | (1) | | | — | | | (1) | |
Balance at September 30, 2022 | | | | | | | $ | 4,979 | | | $ | — | | | $ | 4,979 | |
| | | | | | | | | | | |
Balance at June 30, 2023 | | | | | | | $ | 4,826 | | | $ | 1 | | | $ | 4,827 | |
Net income | | | | | | | 159 | | | — | | | 159 | |
Distributions to parent | | | | | | | (50) | | | — | | | (50) | |
| | | | | | | | | | | |
Balance at September 30, 2023 | | | | | | | $ | 4,935 | | | $ | 1 | | | $ | 4,936 | |
| | | | | | | | | | | |
| | | | | | | | | Accumulated Other | | |
| | | | | | | | | Comprehensive Income | | |
| | | | | | | Member's | | Pension and | | Total |
(in millions) | | | | | | | Equity | | OPEB Adjustments | | Equity |
Balance at December 31, 2021 | | | | | | | $ | 5,015 | | | $ | — | | | $ | 5,015 | |
Net income | | | | | | | 189 | | | — | | | 189 | |
| | | | | | | | | | | |
Distributions to parent | | | | | | | (225) | | | — | | | (225) | |
| | | | | | | | | | | |
Balance at September 30, 2022 | | | | | | | $ | 4,979 | | | $ | — | | | $ | 4,979 | |
| | | | | | | | | | | |
Balance at December 31, 2022 | | | | | | | $ | 4,702 | | | $ | 1 | | | $ | 4,703 | |
Net income | | | | | | | 379 | | | — | | | 379 | |
| | | | | | | | | | | |
Distributions to parent | | | | | | | (146) | | | — | | | (146) | |
| | | | | | | | | | | |
| | | | | | | | | | | |
Balance at September 30, 2023 | | | | | | | $ | 4,935 | | | $ | 1 | | | $ | 4,936 | |
See Notes to Condensed Consolidated Financial Statements
38
PIEDMONT NATURAL GAS COMPANY, INC.
Condensed Consolidated Statements of Operations and Comprehensive Income
(Unaudited)
| | Three Months Ended | | Nine Months Ended |
| September 30, | | September 30, |
| | | Three Months Ended | |
| | | Three Months Ended | |
| | | Three Months Ended | |
| | | March 31, | | | | | March 31, |
(in millions) | (in millions) | 2023 | | 2022 | | 2023 | | 2022 | (in millions) | | | | | 2024 | | 2023 |
| Operating Revenues | Operating Revenues | $ | 208 | | | $ | 306 | | | $ | 1,119 | | | $ | 1,421 | |
| Operating Revenues | |
| Operating Revenues | |
Operating Expenses | Operating Expenses | |
Cost of natural gas | |
Cost of natural gas | |
Cost of natural gas | Cost of natural gas | 51 | | | 168 | | | 316 | | | 685 | |
Operation, maintenance and other | Operation, maintenance and other | 77 | | | 87 | | | 248 | | | 270 | |
Depreciation and amortization | Depreciation and amortization | 59 | | | 56 | | | 175 | | | 166 | |
Property and other taxes | Property and other taxes | 16 | | | 13 | | | 46 | | | 44 | |
Impairment of assets and other charges | Impairment of assets and other charges | — | | | 1 | | | (4) | | | 1 | |
Total operating expenses | Total operating expenses | 203 | | | 325 | | | 781 | | | 1,166 | |
Gains on Sales of Other Assets and Other, net | — | | | — | | | — | | | 4 | |
Operating Income (Loss) | 5 | | | (19) | | | 338 | | | 259 | |
| Operating Income | |
Operating Income | |
Operating Income | |
| Other Income and Expenses, net | Other Income and Expenses, net | 17 | | | 13 | | | 49 | | | 41 | |
| | Other Income and Expenses, net | |
| Other Income and Expenses, net | |
| Interest Expense | Interest Expense | 41 | | | 36 | | | 120 | | | 102 | |
(Loss) Income Before Income Taxes | (19) | | | (42) | | | 267 | | | 198 | |
Income Tax (Benefit) Expense | (5) | | | (9) | | | 46 | | | 18 | |
Net (Loss) Income and Comprehensive (Loss) Income | $ | (14) | | | $ | (33) | | | $ | 221 | | | $ | 180 | |
Interest Expense | |
Interest Expense | |
Income Before Income Taxes | |
Income Tax Expense | |
Net Income and Comprehensive Income | |
|
See Notes to Condensed Consolidated Financial Statements
38
PIEDMONT NATURAL GAS COMPANY, INC.
Condensed Consolidated Balance Sheets
(Unaudited)
| | | | | | | | | | | |
(in millions) | March 31, 2024 | | December 31, 2023 |
ASSETS | | | |
Current Assets | | | |
| | | |
Receivables (net of allowance for doubtful accounts of $12 at 2024 and $11 at 2023) | $ | 297 | | | $ | 311 | |
Receivables from affiliated companies | 12 | | | 10 | |
| | | |
Inventory | 65 | | | 112 | |
Regulatory assets | 131 | | | 161 | |
| | | |
Other | 9 | | | 7 | |
Total current assets | 514 | | | 601 | |
Property, Plant and Equipment | | | |
Cost | 12,157 | | | 11,908 | |
Accumulated depreciation and amortization | (2,296) | | | (2,259) | |
| | | |
Net property, plant and equipment | 9,861 | | | 9,649 | |
Other Noncurrent Assets | | | |
Goodwill | 49 | | | 49 | |
Regulatory assets | 403 | | | 410 | |
Operating lease right-of-use assets, net | 5 | | | 4 | |
Investments in equity method unconsolidated affiliates | 78 | | | 78 | |
Other | 282 | | | 276 | |
Total other noncurrent assets | 817 | | | 817 | |
Total Assets | $ | 11,192 | | | $ | 11,067 | |
LIABILITIES AND EQUITY | | | |
Current Liabilities | | | |
Accounts payable | $ | 246 | | | $ | 315 | |
Accounts payable to affiliated companies | 56 | | | 54 | |
| | | |
Notes payable to affiliated companies | 508 | | | 538 | |
Taxes accrued | 101 | | | 89 | |
Interest accrued | 48 | | | 39 | |
Current maturities of long-term debt | 40 | | | 40 | |
Regulatory liabilities | 88 | | | 98 | |
Other | 64 | | | 77 | |
Total current liabilities | 1,151 | | | 1,250 | |
Long-Term Debt | 3,629 | | | 3,628 | |
| | | |
Other Noncurrent Liabilities | | | |
Deferred income taxes | 930 | | | 933 | |
Asset retirement obligations | 26 | | | 26 | |
Regulatory liabilities | 973 | | | 988 | |
Operating lease liabilities | 10 | | | 10 | |
Accrued pension and other post-retirement benefit costs | 7 | | | 8 | |
| | | |
Other | 168 | | | 172 | |
Total other noncurrent liabilities | 2,114 | | | 2,137 | |
Commitments and Contingencies | | | |
Equity | | | |
Common stock, no par value: 100 shares authorized and outstanding at 2024 and 2023 | 1,635 | | | 1,635 | |
| | | |
Retained earnings | 2,662 | | | 2,416 | |
| | | |
Total Piedmont Natural Gas Company, Inc. stockholder's equity | 4,297 | | | 4,051 | |
Noncontrolling interests | 1 | | | 1 | |
Total equity | 4,298 | | | 4,052 | |
Total Liabilities and Equity | $ | 11,192 | | | $ | 11,067 | |
See Notes to Condensed Consolidated Financial Statements
39
PIEDMONT NATURAL GAS COMPANY, INC.
Condensed Consolidated Balance SheetsStatements of Cash Flows
(Unaudited)
| | | | | | | | | | | |
(in millions) | September 30, 2023 | | December 31, 2022 |
ASSETS | | | |
Current Assets | | | |
| | | |
Receivables (net of allowance for doubtful accounts of $10 at 2023 and $14 at 2022) | $ | 99 | | | $ | 436 | |
Receivables from affiliated companies | 12 | | | 11 | |
| | | |
Inventory | 88 | | | 172 | |
Regulatory assets | 120 | | | 119 | |
| | | |
Other | 63 | | | 4 | |
Total current assets | 382 | | | 742 | |
Property, Plant and Equipment | | | |
Cost | 11,595 | | | 10,869 | |
Accumulated depreciation and amortization | (2,230) | | | (2,081) | |
Facilities to be retired, net | — | | | 9 | |
Net property, plant and equipment | 9,365 | | | 8,797 | |
Other Noncurrent Assets | | | |
Goodwill | 49 | | | 49 | |
Regulatory assets | 415 | | | 392 | |
Operating lease right-of-use assets, net | 3 | | | 4 | |
Investments in equity method unconsolidated affiliates | 78 | | | 79 | |
Other | 288 | | | 272 | |
Total other noncurrent assets | 833 | | | 796 | |
Total Assets | $ | 10,580 | | | $ | 10,335 | |
LIABILITIES AND EQUITY | | | |
Current Liabilities | | | |
Accounts payable | $ | 209 | | | $ | 345 | |
Accounts payable to affiliated companies | 48 | | | 51 | |
| | | |
Notes payable to affiliated companies | 297 | | | 514 | |
Taxes accrued | 44 | | | 74 | |
Interest accrued | 49 | | | 40 | |
Current maturities of long-term debt | 85 | | | 45 | |
Regulatory liabilities | 98 | | | 74 | |
Other | 66 | | | 81 | |
Total current liabilities | 896 | | | 1,224 | |
Long-Term Debt | 3,628 | | | 3,318 | |
| | | |
Other Noncurrent Liabilities | | | |
Deferred income taxes | 948 | | | 870 | |
Asset retirement obligations | 28 | | | 26 | |
Regulatory liabilities | 993 | | | 1,024 | |
Operating lease liabilities | 10 | | | 13 | |
Accrued pension and other post-retirement benefit costs | 7 | | | 7 | |
| | | |
Other | 176 | | | 180 | |
Total other noncurrent liabilities | 2,162 | | | 2,120 | |
Commitments and Contingencies | | | |
Equity | | | |
Common stock, no par value: 100 shares authorized and outstanding at 2023 and 2022 | 1,635 | | | 1,635 | |
| | | |
Retained earnings | 2,258 | | | 2,037 | |
| | | |
Total Piedmont Natural Gas Company, Inc. stockholder's equity | 3,893 | | | 3,672 | |
Noncontrolling interests | 1 | | | 1 | |
Total equity | 3,894 | | | 3,673 | |
Total Liabilities and Equity | $ | 10,580 | | | $ | 10,335 | |
| | | | | | | | | | | |
| Three Months Ended |
| March 31, |
(in millions) | 2024 | | 2023 |
CASH FLOWS FROM OPERATING ACTIVITIES | | | |
Net income | $ | 246 | | | $ | 232 | |
Adjustments to reconcile net income to net cash provided by operating activities: | | | |
Depreciation and amortization | 63 | | | 58 | |
Equity component of AFUDC | (6) | | | (5) | |
| | | |
Impairment of assets and other charges | — | | | 1 | |
Deferred income taxes | (15) | | | 14 | |
Equity in earnings from unconsolidated affiliates | (2) | | | (2) | |
| | | |
| | | |
| | | |
| | | |
(Increase) decrease in | | | |
| | | |
Receivables | 13 | | | 189 | |
Receivables from affiliated companies | (2) | | | — | |
Inventory | 48 | | | 73 | |
Other current assets | 20 | | | (19) | |
Increase (decrease) in | | | |
Accounts payable | (43) | | | (107) | |
Accounts payable to affiliated companies | 2 | | | (12) | |
Taxes accrued | 12 | | | (13) | |
Other current liabilities | (1) | | | 42 | |
Other assets | (2) | | | (2) | |
Other liabilities | 9 | | | (1) | |
Net cash provided by operating activities | 342 | | | 448 | |
CASH FLOWS FROM INVESTING ACTIVITIES | | | |
Capital expenditures | (294) | | | (271) | |
| | | |
| | | |
| | | |
| | | |
| | | |
| | | |
| | | |
Other | (18) | | | (6) | |
Net cash used in investing activities | (312) | | | (277) | |
CASH FLOWS FROM FINANCING ACTIVITIES | | | |
| | | |
| | | |
Notes payable to affiliated companies | (30) | | | (171) | |
| | | |
| | | |
| | | |
| | | |
| | | |
Net cash used in financing activities | (30) | | | (171) | |
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 | $ | 195 | | | $ | 160 | |
| | | |
See Notes to Condensed Consolidated Financial Statements
40
PIEDMONT NATURAL GAS COMPANY, INC.
Condensed Consolidated Statements of Cash FlowsChanges in Equity
(Unaudited)
| | | | | | | | | | | |
| Nine Months Ended |
| September 30, |
(in millions) | 2023 | | 2022 |
CASH FLOWS FROM OPERATING ACTIVITIES | | | |
Net income | $ | 221 | | | $ | 180 | |
Adjustments to reconcile net income to net cash provided by operating activities: | | | |
Depreciation and amortization | 177 | | | 168 | |
Equity component of AFUDC | (15) | | | (7) | |
| | | |
Impairment of assets and other charges | (4) | | | 1 | |
Deferred income taxes | 52 | | | 13 | |
Equity in earnings from unconsolidated affiliates | (6) | | | (5) | |
| | | |
Contributions to qualified pension plans | (3) | | | (2) | |
| | | |
Provision for rate refunds | — | | | (3) | |
(Increase) decrease in | | | |
| | | |
Receivables | 335 | | | 198 | |
Receivables from affiliated companies | (1) | | | 1 | |
Inventory | 83 | | | (26) | |
Other current assets | (63) | | | (91) | |
Increase (decrease) in | | | |
Accounts payable | (78) | | | 24 | |
Accounts payable to affiliated companies | (3) | | | (5) | |
Taxes accrued | (30) | | | (18) | |
Other current liabilities | 25 | | | 23 | |
Other assets | (23) | | | (8) | |
Other liabilities | 7 | | | (3) | |
Net cash provided by operating activities | 674 | | | 440 | |
CASH FLOWS FROM INVESTING ACTIVITIES | | | |
Capital expenditures | (774) | | | (598) | |
Contributions to equity method investments | — | | | (8) | |
| | | |
| | | |
| | | |
| | | |
| | | |
| | | |
Other | (32) | | | (17) | |
Net cash used in investing activities | (806) | | | (623) | |
CASH FLOWS FROM FINANCING ACTIVITIES | | | |
Proceeds from the issuance of long-term debt | 348 | | | 394 | |
| | | |
Notes payable to affiliated companies | (216) | | | (210) | |
| | | |
| | | |
| | | |
| | | |
Other | — | | | (1) | |
Net cash provided by financing activities | 132 | | | 183 | |
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 | $ | 149 | | | $ | 163 | |
| | | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| |
| | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | |
| Three Months Ended March 31, 2023 and 2024 |
| | | | | | | | | | | Total | | | | |
| | | | | | | | | | | Piedmont | | | | |
| | | | | | | | | | | Natural Gas | | | | |
| Common | | | | Retained | | | | | | Company, Inc. | | Noncontrolling | | Total |
(in millions) | Stock | | | | Earnings | | | | | | Equity | | Interests | | Equity |
Balance at December 31, 2022 | $ | 1,635 | | | | | $ | 2,037 | | | | | | | $ | 3,672 | | | $ | 1 | | | $ | 3,673 | |
Net income | — | | | | | 232 | | | | | | | 232 | | | — | | | 232 | |
| | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | |
Balance at March 31, 2023 | $ | 1,635 | | | | | $ | 2,269 | | | | | | | $ | 3,904 | | | $ | 1 | | | $ | 3,905 | |
| | | | | | | | | | | | | | | |
Balance at December 31, 2023 | $ | 1,635 | | | | | $ | 2,416 | | | | | | | $ | 4,051 | | | $ | 1 | | | $ | 4,052 | |
Net income | — | | | | | 246 | | | | | | | 246 | | | — | | | 246 | |
| | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | |
Balance at March 31, 2024 | $ | 1,635 | | | | | $ | 2,662 | | | | | | | $ | 4,297 | | | $ | 1 | | | $ | 4,298 | |
See Notes to Condensed Consolidated Financial Statements
41
PIEDMONT NATURAL GAS COMPANY, INC.
Condensed Consolidated Statements of Changes in Equity
(Unaudited)
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| Three Months Ended September 30, 2022 and 2023 |
| | | | | | | | | | | Total | | | | |
| | | | | | | | | | | Piedmont | | | | |
| | | | | | | | | | | Natural Gas | | | | |
| Common | | | | Retained | | | | | | Company, Inc. | | Noncontrolling | | Total |
(in millions) | Stock | | | | Earnings | | | | | | Equity | | Interests | | Equity |
Balance at June 30, 2022 | $ | 1,635 | | | | | $ | 1,927 | | | | | | | $ | 3,562 | | | $ | — | | | $ | 3,562 | |
Net loss | — | | | | | (33) | | | | | | | (33) | | | — | | | (33) | |
| | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | |
Balance at September 30, 2022 | $ | 1,635 | | | | | $ | 1,894 | | | | | | | $ | 3,529 | | | $ | — | | | $ | 3,529 | |
| | | | | | | | | | | | | | | |
Balance at June 30, 2023 | $ | 1,635 | | | | | $ | 2,272 | | | | | | | $ | 3,907 | | | $ | 1 | | | $ | 3,908 | |
Net loss | — | | | | | (14) | | | | | | | (14) | | | — | | | (14) | |
| | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | |
Balance at September 30, 2023 | $ | 1,635 | | | | | $ | 2,258 | | | | | | | $ | 3,893 | | | $ | 1 | | | $ | 3,894 | |
| | | | | | | | | | | | | | | |
| Nine Months Ended September 30, 2022 and 2023 |
| | | | | | | | | | | Total | | | | |
| | | | | | | | | | | Piedmont | | | | |
| | | | | | | | | | | Natural Gas | | | | |
| Common | | | | Retained | | | | | | Company, Inc. | | Noncontrolling | | Total |
(in millions) | Stock | | | | Earnings | | | | | | Equity | | Interests | | Equity |
Balance at December 31, 2021 | $ | 1,635 | | | | | $ | 1,714 | | | | | | | $ | 3,349 | | | $ | — | | | $ | 3,349 | |
Net income | — | | | | | 180 | | | | | | | 180 | | | — | | | 180 | |
| | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | |
Balance at September 30, 2022 | $ | 1,635 | | | | | $ | 1,894 | | | | | | | $ | 3,529 | | | $ | — | | | $ | 3,529 | |
| | | | | | | | | | | | | | | |
Balance at December 31, 2022 | $ | 1,635 | | | | | $ | 2,037 | | | | | | | $ | 3,672 | | | $ | 1 | | | $ | 3,673 | |
Net income | — | | | | | 221 | | | | | | | 221 | | | — | | | 221 | |
| | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | |
Balance at September 30, 2023 | $ | 1,635 | | | | | $ | 2,258 | | | | | | | $ | 3,893 | | | $ | 1 | | | $ | 3,894 | |
See Notes to Condensed Consolidated Financial Statements
42
| | | | | |
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 | |
| Applicable Notes | |
| Applicable Notes | |
Registrant | Registrant | 1 | | 2 | | 3 | | 4 | | 5 | | | 6 | | 7 | | 8 | | 9 | | 10 | | 11 | | 12 | | 13 | | 14 | | 15 | | 16 | | 17 | | 18 | Registrant | 1 | | 2 | | 3 | | 4 | | 5 | | | | 6 | | | | 7 | | 8 | | 9 | | 10 | | 11 | | 12 | | 13 | | 14 | | 15 | | 16 | | 17 |
Duke Energy | Duke Energy | • | | • | | • | | • | | • | | | • | | • | | • | | • | | • | | • | | • | | • | | • | | • | | • | | • | Duke Energy | • | | • | | | | • | | | | • | | | | • | | • |
Duke Energy Carolinas | Duke Energy Carolinas | • | | • | | • | | • | | | • | | • | | • | | • | | • | | • | | • | | • | | • | | • | | • | Duke Energy Carolinas | • | | | | • | | • | | | | • | | | | | | • | | • | | | | • | | • |
Progress Energy | Progress Energy | • | | • | | • | | • | | | • | | • | | • | | • | | • | | • | | • | | • | | • | | • | | • | | • | Progress Energy | • | | | | • | | • | | | | • | | | | • | | • | | | | • | | • |
Duke Energy Progress | Duke Energy Progress | • | | • | | • | | • | | | • | | • | | • | | • | | • | | • | | • | | • | | • | | • | | • | Duke Energy Progress | • | | | | • | | • | | | | • | | | | | | • | | • | | | | • | | • |
Duke Energy Florida | Duke Energy Florida | • | | • | | • | | • | | | • | | • | | • | | • | | • | | • | | • | | • | | • | | • | | • | Duke Energy Florida | • | | | | • | | • | | | | • | | | | | | • | | • | | | | • | | • |
Duke Energy Ohio | Duke Energy Ohio | • | | • | | • | | • | | | • | | • | | • | | • | | • | | • | | • | | • | | • | | • | | • | Duke Energy Ohio | • | | | | • | | • | | | | • | | | | • | | • | | | | • | | • | | | | • | | • |
Duke Energy Indiana | Duke Energy Indiana | • | | • | | • | | • | | | • | | • | | • | | • | | • | | • | | • | | • | | • | | • | | • | Duke Energy Indiana | • | | | | • | | • | | | | • | | | | | | • | | • | | | | • | | • |
Piedmont | 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's Annual Report on Form 10-K for the year ended December 31, 2022.2023.
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 1312 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.
Discontinued Operations
Duke Energy has elected to present cash flows of discontinued operations combined with cash flows of continuing operations. Unless otherwise noted, the notes to these condensed consolidated financial statements exclude amounts related to discontinued operations for all periods presented. For the ninethree months ended September 30,March 31, 2024, and 2023, and 2022, the Loss (Income) From Discontinued Operations, net of tax on Duke Energy's Condensed Consolidated Statements of Operations includes amounts related to noncontrolling interests. A portion of Noncontrolling interests on Duke Energy's Condensed Consolidated Balance Sheets relates to discontinued operations for the periods presented. See Note 2 for discussion of discontinued operations related to the Commercial Renewables Disposal Groups.
NONCONTROLLING INTEREST
Duke Energy maintains a controlling financial interest in certain less than wholly owned 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 Sheets. 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.
| | | | | |
FINANCIAL STATEMENTS | ORGANIZATION AND BASIS OF PRESENTATION |
CASH, CASH EQUIVALENTS AND RESTRICTED CASH
Duke Energy, Duke Energy Carolinas, Progress Energy, Duke Energy Progress and Duke Energy Florida have restricted cash balances related primarily to collateral assets, escrow deposits and VIEs. See Notes 1110 and 1312 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, 2023 | | December 31, 2022 |
| | Duke | | Duke | Duke | | | Duke | | Duke | Duke |
| Duke | Energy | Progress | Energy | Energy | | Duke | Energy | Progress | Energy | Energy |
| Energy | Carolinas | Energy | Progress | Florida | | Energy(a) | Carolinas | Energy | Progress | Florida |
Current Assets | | | | | | | | | | | |
Cash and cash equivalents | $ | 324 | | $ | 19 | | $ | 87 | | $ | 27 | | $ | 41 | | | $ | 409 | | $ | 44 | | $ | 108 | | $ | 49 | | $ | 45 | |
Other | 49 | | 4 | | 44 | | 17 | | 23 | | | 82 | | 8 | | 74 | | 28 | | 41 | |
Other Noncurrent Assets | | | | | | | | | | | |
Other | 9 | | 1 | | 2 | | 2 | | — | | | 11 | | 1 | | 2 | | 2 | | — | |
Total cash, cash equivalents and restricted cash | $ | 382 | | $ | 24 | | $ | 133 | | $ | 46 | | $ | 64 | | | $ | 502 | | $ | 53 | | $ | 184 | | $ | 79 | | $ | 86 | |
| | | | | | | | | | | |
(a) Certain prior year balances have been adjusted for held for sale presentation. See Note 2 for additional information. | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| March 31, 2024 | | December 31, 2023 |
| | Duke | | Duke | Duke | | | Duke | | Duke | Duke |
| Duke | Energy | Progress | Energy | Energy | | Duke | Energy | Progress | Energy | Energy |
| Energy | Carolinas | Energy | Progress | Florida | | Energy | Carolinas | Energy | Progress | Florida |
Current Assets | | | | | | | | | | | |
Cash and cash equivalents | $ | 459 | | $ | 5 | | $ | 49 | | $ | 27 | | $ | 4 | | | $ | 253 | | $ | 9 | | $ | 59 | | $ | 18 | | $ | 24 | |
Other | 33 | | 6 | | 27 | | 18 | | 9 | | | 76 | | 9 | | 67 | | 31 | | 36 | |
Other Noncurrent Assets | | | | | | | | | | | |
Other | 17 | | 1 | | 10 | | 4 | | 7 | | | 16 | | 1 | | 9 | | 2 | | 7 | |
Total cash, cash equivalents and restricted cash | $ | 509 | | $ | 12 | | $ | 86 | | $ | 49 | | $ | 20 | | | $ | 345 | | $ | 19 | | $ | 135 | | $ | 51 | | $ | 67 | |
| | | | | | | | | | | |
INVENTORY
Provisions for inventory write-offs were not material at September 30, 2023,March 31, 2024, and December 31, 2022.2023. The components of inventory are presented in the tables below.
| | | September 30, 2023 | | March 31, 2024 |
| | Duke | | Duke | | Duke | | Duke | | Duke | |
| Duke | | Energy | | Progress | | Energy | | Energy | | Energy | | Energy | |
| | | Duke | |
| Duke | |
| Duke | |
| Duke | |
(in millions) | |
(in millions) | |
(in millions) | (in millions) | Energy | | Carolinas | | Energy | | Progress | | Florida | | Ohio | | Indiana | | Piedmont | Energy | | Carolinas | | Energy | | Progress | | Florida | | Ohio | | Indiana | | Piedmont |
Materials and supplies | Materials and supplies | $ | 3,018 | | | $ | 1,045 | | | $ | 1,408 | | | $ | 920 | | | $ | 488 | | | $ | 132 | | | $ | 381 | | | $ | 15 | |
Coal | Coal | 758 | | | 330 | | | 187 | | | 110 | | | 77 | | | 24 | | | 217 | | | — | |
Natural gas, oil and other fuel | Natural gas, oil and other fuel | 342 | | | 47 | | | 208 | | | 111 | | | 97 | | | 12 | | | 2 | | | 73 | |
Total inventory | Total inventory | $ | 4,118 | | | $ | 1,422 | | | $ | 1,803 | | | $ | 1,141 | | | $ | 662 | | | $ | 168 | | | $ | 600 | | | $ | 88 | |
| | | December 31, 2022 | | December 31, 2023 |
| | Duke | | Duke | | Duke | | Duke | | Duke | |
| Duke | | Energy | | Progress | | Energy | | Energy | | Energy | | Energy | |
| | | Duke | |
| Duke | |
| Duke | |
| Duke | |
(in millions) | |
(in millions) | |
(in millions) | (in millions) | Energy | | Carolinas | | Energy | | Progress | | Florida | | Ohio | | Indiana | | Piedmont | Energy | | Carolinas | | Energy | | Progress | | Florida | | Ohio | | Indiana | | Piedmont |
Materials and supplies | Materials and supplies | $ | 2,604 | | | $ | 876 | | | $ | 1,232 | | | $ | 819 | | | $ | 413 | | | $ | 105 | | | $ | 342 | | | $ | 12 | |
Coal | Coal | 620 | | | 253 | | | 190 | | | 99 | | | 91 | | | 34 | | | 144 | | | — | |
Natural gas, oil and other fuel | Natural gas, oil and other fuel | 360 | | | 35 | | | 157 | | | 88 | | | 69 | | | 5 | | | 3 | | | 160 | |
Total inventory | Total inventory | $ | 3,584 | | | $ | 1,164 | | | $ | 1,579 | | | $ | 1,006 | | | $ | 573 | | | $ | 144 | | | $ | 489 | | | $ | 172 | |
OTHER NONCURRENT ASSETS
Duke Energy, through a nonregulated subsidiary, was the winner of the Carolina Long Bay offshore wind auction in May 2022 and recorded an asset of $150 million related to the arrangement in Other within Other noncurrent assets. In November 2022, Duke Energy committedassets on the Consolidated Balance Sheets as of March 31, 2024, and December 31, 2023. The asset is recorded in the EU&I segment at historical cost and is subject to a plan to sellimpairment testing should circumstances indicate the Commercial Renewables business segment, excluding the offshore wind contract for Carolina Long Bay, which was moved to the Electric Utilities and Infrastructure (EU&I) segment. See Notes 2 and 3 for further information.carrying value may not be recoverable.
ACCOUNTS PAYABLE
Duke Energy maintainshas a voluntary supply chain finance program (the “program”) with a global financial institution. The program is voluntary andthat allows Duke Energy suppliers, at their sole discretion, to sell their receivables from Duke Energy to thea global financial institution at a rate that leverages Duke Energy’s credit rating and which may result in favorable terms compared to the rate available to the supplier on their own credit rating. Suppliers participating in the program determine at their sole discretion, which invoices they will sell to the financial institution. Suppliers’ decisions on which invoices are sold do not impact Duke Energy confirms invoices sold by suppliers under the program to the financial institution and pays the financial institutionEnergy’s payment terms, which are based on commercial terms negotiated between Duke Energy and the supplier regardless of program participation. Suppliers’ decisions on which invoices are sold do not impact Duke Energy’s payment terms. The commercial terms negotiated between Duke Energy and its suppliers are consistent regardless of whether the supplier elects to participate in the program. Duke Energy does not issue any guarantees with respect to the program and does not participate in negotiations between suppliers and the financial institution. Duke Energy does not have an economic interest in the supplier’s decision to participate in the program and receives no interest, fees or other benefit from the financial institution based on supplier participation in the program.
| | | | | |
FINANCIAL STATEMENTS | ORGANIZATION AND BASIS OF PRESENTATION |
The following table represents the changes in confirmed obligations outstanding for the three and nine months ended September 30, 2023,March 31, 2024, and 2022.2023.
| | | Three months ended September 30, 2022 and 2023 |
| | | Duke | | Duke | |
| | Duke | Energy | Progress | Energy | |
(in millions) | Energy | Carolinas | Energy | Progress | Florida | Ohio | Indiana | Piedmont |
Confirmed obligations outstanding at the June 30, 2022 | $ | 46 | | $ | 9 | | $ | 11 | | $ | 3 | | $ | 8 | | $ | 9 | | $ | — | | $ | 17 | |
Invoices confirmed during the period | 86 | | 6 | | 21 | | 7 | | 14 | | 12 | | — | | 47 | |
Confirmed invoices paid during the period | (58) | | (12) | | (15) | | (5) | | (10) | | (9) | | — | | (22) | |
Confirmed obligations outstanding at September 30, 2022 | $ | 74 | | $ | 3 | | $ | 17 | | $ | 5 | | $ | 12 | | $ | 12 | | $ | — | | $ | 42 | |
| Confirmed obligations outstanding at the June 30, 2023 | $ | 40 | | $ | 5 | | $ | 14 | | $ | 12 | | $ | 2 | | $ | 2 | | $ | — | | $ | 19 | |
Invoices confirmed during the period | 47 | | 2 | | 11 | | 2 | | 9 | | 4 | | — | | 30 | |
Confirmed invoices paid during the period | (18) | | (4) | | (8) | | (3) | | (5) | | — | | — | | (6) | |
Confirmed obligations outstanding at September 30, 2023 | $ | 69 | | $ | 3 | | $ | 17 | | $ | 11 | | $ | 6 | | $ | 6 | | $ | — | | $ | 43 | |
| | | Nine months ended September 30, 2022 and 2023 |
| | | Duke | | Duke | |
| | Duke | Energy | Progress | Energy | |
| | Three Months Ended March 31, 2023 and 2024 | |
| | Three Months Ended March 31, 2023 and 2024 | |
| | Three Months Ended March 31, 2023 and 2024 | |
| | Duke | |
| Duke | |
| Duke | |
| Duke | |
(in millions) | (in millions) | Energy | Carolinas | Energy | Progress | Florida | Ohio | Indiana | Piedmont |
Confirmed obligations outstanding at the December 31, 2021 | $ | 19 | | $ | — | | $ | 9 | | $ | — | | $ | 9 | | $ | 6 | | $ | — | | $ | 4 | |
(in millions) | |
(in millions) | | Energy | Carolinas | Energy | Progress | Florida | Ohio | Indiana | Piedmont |
Confirmed obligations outstanding at December 31, 2022 | |
Invoices confirmed during the period | Invoices confirmed during the period | 181 | | 20 | | 52 | | 17 | | 35 | | 27 | | 1 | | 81 | |
Confirmed invoices paid during the period | Confirmed invoices paid during the period | (126) | | (17) | | (44) | | (12) | | (32) | | (21) | | (1) | | (43) | |
Confirmed obligations outstanding at September 30, 2022 | $ | 74 | | $ | 3 | | $ | 17 | | $ | 5 | | $ | 12 | | $ | 12 | | $ | — | | $ | 42 | |
Confirmed obligations outstanding at March 31, 2023 | |
| Confirmed obligations outstanding at the December 31, 2022 | $ | 87 | | $ | 6 | | $ | 19 | | $ | 8 | | $ | 11 | | $ | 5 | | $ | — | | $ | 57 | |
Confirmed obligations outstanding at December 31, 2023 | |
Confirmed obligations outstanding at December 31, 2023 | |
Confirmed obligations outstanding at December 31, 2023 | |
Invoices confirmed during the period | Invoices confirmed during the period | 161 | | 22 | | 53 | | 25 | | 28 | | 7 | | — | | 79 | |
Confirmed invoices paid during the period | Confirmed invoices paid during the period | (179) | | (25) | | (55) | | (22) | | (33) | | (6) | | — | | (93) | |
Confirmed obligations outstanding at September 30, 2023 | $ | 69 | | $ | 3 | | $ | 17 | | $ | 11 | | $ | 6 | | $ | 6 | | $ | — | | $ | 43 | |
Confirmed obligations outstanding at March 31, 2024 | |
NEW ACCOUNTING STANDARDS
No new accounting standards were adopted by the Duke Energy Registrants in 2023.2024.
2. DISPOSITIONS
Sale of Commercial Renewables Segment
In August 2022,2023, Duke Energy announced a strategic reviewcompleted the sale of its commercial renewables business. Since 2007, Duke Energy has built a portfolio of commercial wind, solar and battery projects acrosssubstantially all the U.S., and established a development pipeline. Duke Energy has developed a strategy to focus on renewables, grid and other investment opportunities within its regulated operations. In November 2022, Duke Energy committed to a plan to sellassets in the Commercial Renewables business segment, excluding the offshore wind contract for Carolina Long Bay, which was moved to the EU&I segment. In June 2023, Duke Energy announced that it had entered into a purchase and sale agreement with affiliates of Brookfield for the sale of the utility-scale solar and wind group. Duke Energy closed on this transaction on October 25, 2023, for proceeds of $1.1 billion, with approximately half of the proceeds received at closing and the remainder due 18 months after closing. In July 2023, Duke Energy announced that it had entered into a purchase and sale agreement with affiliates of ArcLight for the distributed generation group. Duke Energy closed on this transaction on October 4, 2023, and received proceeds of $243 million. In March 2023, assets for certain projects were removed from the utility-scale solar and wind group and placed in a separate disposal group. The disposal process for the remaining assets is expected to be completed by earlyaround midyear 2024, with net proceeds from the dispositions not anticipated to be material.
Assets Held For Sale and Discontinued Operations
The utility-scale solar and wind group, the distributed generation group and the remaining assets (collectively, Commercial Renewables Disposal Groups)Groups were classified as held for sale and as discontinued operations in the fourth quarter of 2022. OriginallyNo interest from corporate level debt was allocated to discontinued operations and the related restricted cash and interest rate swaps were not expected to transfer to a buyer but during the marketing process it was determined they would be included with the sale and were classified as held for sale in March 2023. As a result, adjustments were made to the December 31, 2022, Consolidated Balance Sheet to present debt and the related restricted cash and interest rate swaps as held for sale. Nono adjustments were made to the historical activity within the Consolidated Statements of Comprehensive Income, Consolidated Statements of Cash Flows or the Consolidated Statements of Changes in Equity. Unless otherwise noted, the notes to these consolidated financial statements exclude amounts related to discontinued operations for all periods presented.
No interest from corporate level debt was allocated to discontinued operations.
| | | | | |
FINANCIAL STATEMENTS | DISPOSITIONS |
The following table presents the carrying values of the major classes of Assets held for sale and Liabilities associated with assets held for sale included in Duke Energy's Consolidated Balance Sheets.
| (in millions) | (in millions) | September 30, 2023 | | December 31, 2022 | |
(in millions) | |
(in millions) | |
Current Assets Held for Sale | Current Assets Held for Sale | | |
Cash and cash equivalents | $ | 70 | | | $ | 10 | | |
Receivables, net | 107 | | | 107 | | |
Inventory | 84 | | | 88 | | |
Current Assets Held for Sale | |
Current Assets Held for Sale | |
| Other | |
| Other | |
| Other | Other | 179 | | | 151 | | |
Total current assets held for sale | Total current assets held for sale | 440 | | | 356 | | |
Total current assets held for sale | |
Total current assets held for sale | |
Noncurrent Assets Held for Sale | |
Noncurrent Assets Held for Sale | |
Noncurrent Assets Held for Sale | Noncurrent Assets Held for Sale | | |
Property, Plant and Equipment | Property, Plant and Equipment | | |
Property, Plant and Equipment | |
Property, Plant and Equipment | |
Cost | |
Cost | |
Cost | Cost | 5,387 | | | 6,444 | | |
Accumulated depreciation and amortization | Accumulated depreciation and amortization | (1,651) | | | (1,651) | | |
Accumulated depreciation and amortization | |
Accumulated depreciation and amortization | |
Net property, plant and equipment | |
Net property, plant and equipment | |
Net property, plant and equipment | Net property, plant and equipment | 3,736 | | | 4,793 | | |
Operating lease right-of-use assets, net | Operating lease right-of-use assets, net | 144 | | | 140 | | |
Investments in equity method unconsolidated affiliates | 504 | | | 522 | | |
Operating lease right-of-use assets, net | |
Operating lease right-of-use assets, net | |
| Other | |
| Other | |
| Other | Other | 212 | | | 179 | | |
Total other noncurrent assets held for sale | Total other noncurrent assets held for sale | 860 | | | 841 | | |
Total other noncurrent assets held for sale | |
Total other noncurrent assets held for sale | |
Total Assets Held for Sale | |
Total Assets Held for Sale | |
Total Assets Held for Sale | Total Assets Held for Sale | $ | 5,036 | | | $ | 5,990 | | |
Current Liabilities Associated with Assets Held for Sale | Current Liabilities Associated with Assets Held for Sale | | |
Current Liabilities Associated with Assets Held for Sale | |
Current Liabilities Associated with Assets Held for Sale | |
Accounts payable | |
Accounts payable | |
Accounts payable | Accounts payable | $ | 124 | | | $ | 122 | | |
Taxes accrued | Taxes accrued | 22 | | | 17 | | |
Taxes accrued | |
Taxes accrued | |
Current maturities of long-term debt | Current maturities of long-term debt | 268 | | | 276 | | |
Current maturities of long-term debt | |
Current maturities of long-term debt | |
Unrealized losses on commodity hedges | |
Unrealized losses on commodity hedges | |
Unrealized losses on commodity hedges | |
Other | |
Other | |
Other | Other | 175 | | | 120 | | |
Total current liabilities associated with assets held for sale | Total current liabilities associated with assets held for sale | 589 | | | 535 | | |
Total current liabilities associated with assets held for sale | |
Total current liabilities associated with assets held for sale | |
Noncurrent Liabilities Associated with Assets Held for Sale | Noncurrent Liabilities Associated with Assets Held for Sale | | |
Noncurrent Liabilities Associated with Assets Held for Sale | |
Noncurrent Liabilities Associated with Assets Held for Sale | |
Long-Term debt | |
Long-Term debt | |
Long-Term debt | Long-Term debt | 1,047 | | | 1,188 | | |
| Operating lease liabilities | Operating lease liabilities | 154 | | | 150 | | |
| Operating lease liabilities | |
| Operating lease liabilities | |
Asset retirement obligations | Asset retirement obligations | 201 | | | 190 | | |
Asset retirement obligations | |
Asset retirement obligations | |
Unrealized losses on commodity hedges | |
Unrealized losses on commodity hedges | |
Unrealized losses on commodity hedges | |
Other | |
Other | |
Other | Other | 232 | | | 399 | | |
Total other noncurrent liabilities associated with assets held for sale | Total other noncurrent liabilities associated with assets held for sale | 1,634 | | | 1,927 | | |
Total other noncurrent liabilities associated with assets held for sale | |
Total other noncurrent liabilities associated with assets held for sale | |
Total Liabilities Associated with Assets Held for Sale | |
Total Liabilities Associated with Assets Held for Sale | |
Total Liabilities Associated with Assets Held for Sale | Total Liabilities Associated with Assets Held for Sale | $ | 2,223 | | | $ | 2,462 | | |
|
As of September 30, 2023,March 31, 2024, and December 31, 2022,2023, the noncontrolling interest balance is $1.8 billion and $1.6 billion, respectively.$66 million.
The following table presents the results of the Commercial Renewables Disposal Groups, which are included in (Loss) IncomeLoss from Discontinued Operations, net of tax in Duke Energy's Consolidated Statements of Operations.
| | | | | | | | | | | | | | | | | | | | |
| Three Months Ended | Nine Months Ended |
| September 30, | September 30, |
(in millions) | 2023 | | 2022 | 2023 | | 2022 |
Operating revenues | $ | 103 | | | $ | 129 | | $ | 293 | | | $ | 372 | |
| | | | | | |
| | | | | | |
Operation, maintenance and other | 93 | | | 85 | 270 | | | 248 |
Depreciation and amortization(a) | — | | | 65 | — | | | 193 |
Property and other taxes | 8 | | | 10 | 27 | | | 31 |
| | | | | | |
| | | | | | |
Other income and expenses, net | (2) | | | (1) | | (9) | | | (4) | |
Interest expense | 10 | | | 18 | 53 | | | 55 |
Loss on disposal | 169 | | | — | | 1,603 | | | — | |
Loss before income taxes | (179) | | | (50) | | (1,669) | | | (159) | |
Income tax benefit | (27) | | | (30) | | (353) | | | (106) | |
Loss from discontinued operations | $ | (152) | | | $ | (20) | | $ | (1,316) | | | $ | (53) | |
Add: Net (income) loss attributable to noncontrolling interest included in discontinued operations | (38) | | | 20 | | 33 | | | 92 | |
Net (loss) income from discontinued operations attributable to Duke Energy Corporation | $ | (190) | | | $ | — | | $ | (1,283) | | | $ | 39 | |
| | | | | | |
| | | | | | |
| | | | | | |
| | | | | | |
(a) Upon meeting the criteria for assets held for sale, beginning in November 2022 depreciation and amortization expense were ceased.
| | | | | |
FINANCIAL STATEMENTS | DISPOSITIONS |
| | | | | | | | | | | | | | |
| Three Months Ended | |
| March 31, | |
(in millions) | 2024 | | 2023 | | | |
Operating revenues | $ | (6) | | | $ | 80 | | | | |
| | | | | | |
| | | | | | |
Operation, maintenance and other | 4 | | | 89 | | | |
| | | | | | |
Property and other taxes | — | | | 10 | | | |
| | | | | | |
| | | | | | |
Other income and expenses, net | — | | | (4) | | | | |
Interest expense | 2 | | | 31 | | | |
(Gain) Loss on disposal | (10) | | | 220 | | | | |
Loss before income taxes | (2) | | | (274) | | | | |
Income tax expense (benefit) | 1 | | | (65) | | | | |
Loss from discontinued operations | $ | (3) | | | $ | (209) | | | | |
Add: Net loss attributable to noncontrolling interest included in discontinued operations | — | | | 64 | | | | |
Net loss from discontinued operations attributable to Duke Energy Corporation | $ | (3) | | | $ | (145) | | | | |
| | | | | | |
| | | | | | |
| | | | | | |
| | | | | | |
The Commercial Renewables Disposal Groups' assets held for sale assets reflectedamounts presented above reflect pretax impairments recorded against property, plant and equipment of approximately $1.7 billion as of December 31, 2022,$268 million and an incremental pretax impairment of $220$278 million as of March 31, 2023. The final purchase2024, and sale agreements were signed with Brookfield in JuneDecember 31, 2023, for the utility-scale solar and wind group and with ArcLight in July 2023 for the distributed generation group, and accordingly, in the second quarter of 2023, pretax impairments of approximately $1.2 billion were recorded to write-down the carrying amount of property, plant and equipment assets to the estimated fair value of the business, based on the expected selling price less estimated costs to sell. Pretax impairments of $169 million were recorded in the third quarter of 2023 reflecting closing-related adjustments for the transactions that closed and ongoing assessment of the estimated fair values of the remaining assets held for sale. The impairments were included in (Loss) Income from Discontinued Operations, net of tax, in Duke Energy's Condensed Consolidated Statements of Operations and Comprehensive Income for the periods presented. The fair value was primarily determined from purchase and sale agreements for the utility scale and distributed generation groups and discounted cash flow analysis for the remainder of the assets. The discounted cash flow model utilized Level 2 and Level 3 inputs. The fair value hierarchy levels are further discussed in Note 12. The impairments for the utility-scale and distributed generation assets were updated based on customary adjustments at closing, and will be updated, if necessary, for any post-closing adjustments.respectively. The carrying amounts for the remaining assets will be updated, if necessary, based on final disposition amounts.
| | | | | |
FINANCIAL STATEMENTS | DISPOSITIONS |
Duke Energy has elected not to separately disclose discontinued operations on Duke Energy's Consolidated Statements of Cash Flows. The following table summarizes Duke Energy's cash flows from discontinued operations related to the Commercial Renewables Disposal Groups.
| | Nine Months Ended |
| September 30, |
| Three Months Ended | | | Three Months Ended |
| March 31, | | | March 31, |
(in millions) | (in millions) | 2023 | | 2022 | (in millions) | 2024 | | 2023 |
Cash flows provided by (used in): | |
Cash flows used in: | |
Operating activities | |
Operating activities | |
Operating activities | Operating activities | $ | 545 | | | $ | 485 | |
Investing activities | Investing activities | (597) | | | (223) | |
|
Other Sale-Related Matters
Duke Energy (Parent) and several Duke Energy renewables project companies, located in the ERCOT market, were named in several lawsuits arising out of Texas Storm Uri, which occurred in February 2021. The legal actions related to all but one of the project companies in this matter transferred to affiliates of Brookfield in conjunction with the transaction closing in October 2023. The plaintiffs have begun to dismiss Duke Energy (parent) from these lawsuits and have represented to the court that they will dismiss Duke Energy (Parent) from all such cases. See Note 5 for more information.
As part of the purchase and sale agreement for the distributed generation group, Duke Energy has agreed to retain certain guarantees, with expiration dates between 2029 through 2034, related to tax equity partners' assets and operations that will be disposed of via sale. Duke Energy has obtained certain guarantees from the buyers in regards to future performance obligations to assist in limiting Duke Energy's exposure under the retained guarantees. The fair value of the guarantees is immaterial as Duke Energy does not believe conditions are likely for performance under these guarantees.
3. BUSINESS SEGMENTS
Duke Energy
Due to Duke Energy's commitment in the fourth quarter of 2022 to sell the Commercial Renewables business segment, Duke Energy's segment structure now includes the following two segments: EU&I and GU&I. Prior period information has been recast to conform to the current segment structure. See Note 2 for further information on the Commercial Renewables Disposal Groups.
The EU&I segment primarily includes Duke Energy's regulated electric utilities in the Carolinas, Florida and the Midwest. EU&I also includes Duke Energy's electric transmission infrastructure investments and the offshore wind contract for Carolina Long Bay. Refer to Note 2 for further information.
The GU&I segment includes Piedmont, Duke Energy's natural gas local distribution companies in Ohio and Kentucky and Duke Energy's natural gas storage, midstream pipeline and renewable natural gas investments.
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.
| | | | | |
FINANCIAL STATEMENTS | BUSINESS SEGMENTS |
Business segment information is presented in the following tables. Segment assets presented exclude intercompany assets.
| | Three Months Ended September 30, 2023 |
| Electric | | Gas | | | Total | |
| Utilities and | | Utilities and | | | Reportable | |
| Three Months Ended March 31, 2024 | |
| Three Months Ended March 31, 2024 | |
| Three Months Ended March 31, 2024 | |
| Electric | |
| Utilities and | |
| Utilities and | |
| Utilities and | |
(in millions) | |
(in millions) | |
(in millions) | (in millions) | Infrastructure | | Infrastructure | | | Segments | | Other | | Eliminations | | Total | Infrastructure | | Infrastructure | | | | Segments | | Other | | Eliminations | | Total |
Unaffiliated revenues | Unaffiliated revenues | $ | 7,695 | | | $ | 291 | | | | $ | 7,986 | | | $ | 8 | | | $ | — | | | $ | 7,994 | |
Intersegment revenues | Intersegment revenues | 20 | | | 22 | | | | 42 | | | 25 | | | (67) | | | — | |
Total revenues | Total revenues | $ | 7,715 | | | $ | 313 | | | | $ | 8,028 | | | $ | 33 | | | $ | (67) | | | $ | 7,994 | |
Segment income (loss)(a) | $ | 1,447 | | | $ | 15 | | | | $ | 1,462 | | | $ | (59) | | | $ | — | | | $ | 1,403 | |
Segment income (loss) | |
Less: Noncontrolling interests | Less: Noncontrolling interests | | | | (69) | |
Add: Preferred stock dividend | Add: Preferred stock dividend | | | | 39 | |
Discontinued operations | Discontinued operations | | | | (190) | |
Net Income | Net Income | | | | $ | 1,321 | |
Segment assets(b) | $ | 155,588 | | | $ | 16,724 | | | | $ | 172,312 | | | $ | 8,848 | | | $ | — | | | $ | 181,160 | |
Segment assets(a) | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| Three Months Ended September 30, 2022 |
| Electric | | Gas | | | | Total | | | | | | |
| Utilities and | | Utilities and | | | | Reportable | | | | | | |
(in millions) | Infrastructure | | Infrastructure | | | | Segments | | Other | | Eliminations | | Total |
Unaffiliated revenues | $ | 7,431 | | | $ | 404 | | | | | $ | 7,835 | | | $ | 7 | | | $ | — | | | $ | 7,842 | |
Intersegment revenues | 8 | | | 23 | | | | | 31 | | | 23 | | | (54) | | | — | |
Total revenues | $ | 7,439 | | | $ | 427 | | | | | $ | 7,866 | | | $ | 30 | | | $ | (54) | | | $ | 7,842 | |
Segment income (loss) | $ | 1,540 | | | $ | 4 | | | | | $ | 1,544 | | | $ | (183) | | | $ | (1) | | | $ | 1,360 | |
Less: Noncontrolling interests | | | | | | | | | | | | | 9 | |
Add: Preferred stock dividend | | | | | | | | | | | | | 39 | |
Discontinued operations | | | | | | | | | | | | | 23 | |
Net Income | | | | | | | | | | | | | $ | 1,413 | |
| | | | | |
FINANCIAL STATEMENTS | BUSINESS SEGMENTS |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| Three Months Ended March 31, 2023 |
| Electric | | Gas | | | | Total | | | | | | |
| Utilities and | | Utilities and | | | | Reportable | | | | | | |
(in millions) | Infrastructure | | Infrastructure | | | | Segments | | Other | | Eliminations | | Total |
Unaffiliated revenues | $ | 6,381 | | | $ | 888 | | | | | $ | 7,269 | | | $ | 7 | | | $ | — | | | $ | 7,276 | |
Intersegment revenues | 17 | | | 23 | | | | | 40 | | | 24 | | | (64) | | | — | |
Total revenues | $ | 6,398 | | | $ | 911 | | | | | $ | 7,309 | | | $ | 31 | | | $ | (64) | | | $ | 7,276 | |
Segment income (loss) | $ | 791 | | | $ | 287 | | | | | $ | 1,078 | | | $ | (168) | | | $ | — | | | $ | 910 | |
Less: Noncontrolling interests | | | | | | | | | | | | | 43 | |
Add: Preferred stock dividend | | | | | | | | | | | | | 39 | |
Discontinued operations | | | | | | | | | | | | | (145) | |
Net Income | | | | | | | | | | | | | $ | 761 | |
(a)EU&I includes $95 million recorded within Impairment of assets and other charges and $16 million within Operations, maintenance and other on Duke Energy Carolinas' and Duke Energy Progress' Condensed Consolidated Statement of Operations related primarily to Duke Energy Carolinas' North Carolina rate case settlement and Duke Energy Progress' North Carolina rate case order. See Note 4 for additional information.
(b)Other includes Assets Held for Sale balances related to the Commercial Renewables Disposal Groups. Refer to Note 2 for further information.
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| Nine Months Ended September 30, 2023 |
| Electric | | Gas | | | | Total | | | | | | |
| Utilities and | | Utilities and | | | | Reportable | | | | | | |
(in millions) | Infrastructure | | Infrastructure | | | | Segments | | Other | | Eliminations | | Total |
Unaffiliated revenues | $ | 20,308 | | | $ | 1,516 | | | | | $ | 21,824 | | | $ | 24 | | | $ | — | | | $ | 21,848 | |
Intersegment revenues | 55 | | | 67 | | | | | 122 | | | 74 | | | (196) | | | — | |
Total revenues | $ | 20,363 | | | $ | 1,583 | | | | | $ | 21,946 | | | $ | 98 | | | $ | (196) | | | $ | 21,848 | |
Segment income (loss)(a) | $ | 3,088 | | | $ | 327 | | | | | $ | 3,415 | | | $ | (388) | | | $ | — | | | $ | 3,027 | |
Less: Noncontrolling interests | | | | | | | | | | | | | (42) | |
Add: Preferred stock dividend | | | | | | | | | | | | | 92 | |
Discontinued operations | | | | | | | | | | | | | (1,283) | |
Net Income | | | | | | | | | | | | | $ | 1,878 | |
| | | | | | | | | | | | | |
| | | | | |
FINANCIAL STATEMENTS | BUSINESS SEGMENTS |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| Nine Months Ended September 30, 2022 |
| Electric | | Gas | | | | Total | | | | | | |
| Utilities and | | Utilities and | | | | Reportable | | | | | | |
(in millions) | Infrastructure | | Infrastructure | | | | Segments | | Other | | Eliminations | | Total |
Unaffiliated revenues | $ | 19,552 | | | $ | 1,843 | | | | | $ | 21,395 | | | $ | 22 | | | $ | — | | | $ | 21,417 | |
Intersegment revenues | 24 | | | 69 | | | | | 93 | | | 69 | | | (162) | | | — | |
Total revenues | $ | 19,576 | | | $ | 1,912 | | | | | $ | 21,488 | | | $ | 91 | | | $ | (162) | | | $ | 21,417 | |
Segment income (loss)(b) | $ | 3,237 | | | $ | 277 | | | | | $ | 3,514 | | | $ | (480) | | | $ | (2) | | | $ | 3,032 | |
Less: Noncontrolling interests | | | | | | | | | | | | | 73 | |
Add: Preferred stock dividend | | | | | | | | | | | | | 92 | |
Discontinued operations | | | | | | | | | | | | | 62 | |
Net Income | | | | | | | | | | | | | $ | 3,113 | |
| | | | | | | | | | | | | |
(a)EU&I includes $95 million recorded within Impairment of assets and other charges and $16 million within Operations, maintenance and other on Duke Energy Carolinas' and Duke Energy Progress' Condensed Consolidated Statement of Operations related primarily to Duke Energy Carolinas' North Carolina rate case settlement and Duke Energy Progress' North Carolina rate case order. See Note 4 for additional information.
(b)EU&I includes $211 million recorded within Impairment of assets and other charges, $46 million within Operating revenues and $20 million within Noncontrolling Interests on the Condensed Consolidated Statements of Operations related to a Duke Energy Indiana Supreme Court ruling. See Note 4 for additional information.
Duke Energy Ohio
Duke Energy Ohio has two reportable segments, EU&I and GU&I. The remainder of Duke Energy Ohio's operations is presented as Other.
| | Three Months Ended March 31, 2024 | | | Three Months Ended March 31, 2024 |
| Electric | |
| Utilities and | |
| Utilities and | |
| Utilities and | |
(in millions) | |
(in millions) | |
(in millions) | | Infrastructure | | Infrastructure | | Segments | | Other | | Eliminations | | Total |
| | | Three Months Ended September 30, 2023 |
Total revenues | |
| | Electric | | Gas | | Total | |
| Utilities and | | Utilities and | | Reportable | |
(in millions) | Infrastructure | | Infrastructure | | Segments | | Other | | Eliminations | | Total |
| Total revenues | |
| Total revenues | Total revenues | $ | 472 | | | $ | 105 | | | $ | 577 | | | $ | — | | | $ | — | | | $ | 577 | |
Segment income (loss)/Net income | Segment income (loss)/Net income | $ | 65 | | | $ | 17 | | | $ | 82 | | | $ | (2) | | | $ | — | | | $ | 80 | |
| Segment assets | Segment assets | $ | 7,745 | | | $ | 4,218 | | | $ | 11,963 | | | $ | 10 | | | $ | (179) | | | $ | 11,794 | |
Segment assets | |
Segment assets | |
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| Three Months Ended September 30, 2022 |
| Electric | | Gas | | Total | | | | | | |
| Utilities and | | Utilities and | | Reportable | | | | | | |
(in millions) | Infrastructure | | Infrastructure | | Segments | | Other | | | | Total |
| | | | | | | | | | | |
| | | | | | | | | | | |
Total revenues | $ | 507 | | | $ | 121 | | | $ | 628 | | | $ | — | | | | | $ | 628 | |
Segment income (loss)/Net income | $ | 74 | | | $ | 30 | | | $ | 104 | | | $ | (1) | | | | | $ | 103 | |
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| Nine Months Ended September 30, 2023 |
| Electric | | Gas | | Total | | | | | | |
| Utilities and | | Utilities and | | Reportable | | | | | | |
(in millions) | Infrastructure | | Infrastructure | | Segments | | Other | | | | Total |
| | | | | | | | | | | |
| | | | | | | | | | | |
Total revenues | $ | 1,411 | | | $ | 464 | | | $ | 1,875 | | | $ | — | | | | | $ | 1,875 | |
Segment income (loss)/Net income | $ | 168 | | | $ | 87 | | | $ | 255 | | | $ | (4) | | | | | $ | 251 | |
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| | Three Months Ended March 31, 2023 | |
| Three Months Ended March 31, 2023 | |
| Three Months Ended March 31, 2023 | |
| Electric | |
| Utilities and | |
| Utilities and | |
| Utilities and | |
(in millions) | |
(in millions) | |
(in millions) | | Infrastructure | | Infrastructure | | Segments | | Other | | | | Total |
| | | Nine Months Ended September 30, 2022 |
Total revenues | |
| | Electric | | Gas | | Total | | | |
| Utilities and | | Utilities and | | Reportable | | | |
(in millions) | Infrastructure | | Infrastructure | | Segments | | Other | | | Total |
| Total revenues | |
| Total revenues | Total revenues | $ | 1,320 | | | $ | 491 | | | $ | 1,811 | | | $ | — | | | | $ | 1,811 | |
Segment income (loss)/Net income | Segment income (loss)/Net income | $ | 152 | | | $ | 87 | | | $ | 239 | | | $ | (3) | | | | $ | 236 | |
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4. 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.
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FINANCIAL STATEMENTS | REGULATORY MATTERS |
For open regulatory matters, unless otherwise noted, the Subsidiary Registrants and Duke Energy Kentucky cannot predict the outcome or ultimate resolution of their respective matters.Duke Energy Carolinas and Duke Energy Progress
Nuclear Station Subsequent License Renewal
On June 7, 2021, Duke Energy Carolinas filed a subsequent license renewal (SLR) application for the Oconee Nuclear Station (ONS) with the U.S. Nuclear Regulatory Commission (NRC) to renew ONS’s operating license for an additional 20 years. The SLR would extend operations of the facility from 60 to 80 years. The current licenses for units 1 and 2 expire in 2033 and the license for unit 3 expires in 2034. By a Federal Register Notice dated July 28, 2021, the NRC provided a 60-day comment period for persons whose interest may be affected by the issuance of a subsequent renewed license for ONS to file a request for a hearing and a petition for leave to intervene. On September 27, 2021, Beyond Nuclear and Sierra Club (Petitioners) filed a Hearing Request and Petition to Intervene (Hearing Request) and a Petition for Waiver. The Hearing Request proposed three contentions and claimed that Duke Energy Carolinas did not satisfy the National Environmental Policy Act (NEPA) of 1969, as amended, or the NRC’s NEPA-implementing regulations. Following Duke Energy Carolinas' answer and the Petitioners' reply, on February 11, 2022, the Atomic Safety and Licensing Board (ASLB) issued its decision on the Hearing Request and found that the Petitioners failed to establish that the proposed contentions are litigable. The ASLB also denied the Petitioners' Petition for Waiver and terminated the proceeding.
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FINANCIAL STATEMENTS | REGULATORY MATTERS |
On February 24, 2022, the NRC issued a decision in the SLR appeal related to Florida Power and Light's Turkey Point nuclear generating station in Florida. The NRC ruled that the NRC’s license renewal Generic Environmental Impact Statement (GEIS) does not apply to SLR because the GEIS does not address SLR. The decision overturned a 2020 NRC decision that found the GEIS applies to SLR. Although Turkey Point is not owned or operated by a Duke Energy Registrant, the NRC’s order applies to all SLR applicants, including ONS. The NRC order also indicated no subsequent renewed licenses will be issued until the NRC staff has completed an adequate NEPA review for each application. On April 5, 2022, the NRC approved a 24-month rulemaking plan that will enable the NRC staff to complete an adequate NEPA review. Although an SLR applicant may wait until the rulemaking is completed, the NRC also noted that an applicant may submit a supplement to its environmental report providing information on environmental impacts during the SLR period prior to the rulemaking being completed. On November 7, 2022, Duke Energy Carolinas submitted a supplement to its environmental report addressing environmental impacts during the SLR period. On September 14, 2023, the NRC posted on its website that the issuance of the GEIS will now be issued in August 2024 instead of May 2024 due to the volume and technical complexity of the comments received. On March 6, 2024, the NRC staff submitted the rulemaking, which included the updated GEIS, to the NRC.
On December 19, 2022, the NRC published a notice in the Federal Register that the NRC will conduct a limited scoping process to gather additional information necessary to prepare an environmental impact statement (EIS) to evaluate the environmental impacts at ONS during the SLR period. The NRC received comments from the EPA and the Petitioners and these comments identify 18 potential impacts that should be considered by the NRC in the EIS, which include, but are not limited to, climate change and flooding, environmental justice, severe accidents, and external events. On February 8, 2024, the NRC issued the Oconee site-specific draft EIS. The NRC has notifiedand EPA published the notice for the public to submit comments on the ONS site-specific draft EIS. On April 29, 2024, the petitioners filed a hearing request. The request proposed three contentions and claimed that the ONS site-specific draft EIS is inadequate to satisfy the requirements of NEPA and the NRC’s NEPA-implementing regulations. Duke Energy Carolinas that the draft EIS will now be issued in JanuaryCarolinas' deadline to respond to any such requests was extended to May 31, 2024.
On December 19, 2022, the NRC issued the Safety Evaluation Report (SER) for the safety portion of the SLR application. The NRC determined Duke Energy Carolinas met the requirements of the applicable regulations and identified actions that have been taken or will be taken to manage the effects of aging and address time-limited analyses. Duke Energy Carolinas and the NRC met with the Advisory Committee on Reactor Safeguards (ACRS) on February 2, 2023, to discuss issues regarding the SER and SLR application. On February 25, 2023, the ACRS issued a report to the NRC on the safety aspects of the ONS SLR application, which concluded that the established programs and commitments made by Duke Energy Carolinas to manage age-related degradation provide confidence that ONS can be operated in accordance with its current licensing basis for the subsequent period of extended operation without undue risk to the health and safety of the public and the SLR application for ONS should be approved.
Although the NRC’s GEIS applicability decision will delayhas delayed completion of the SLR proceeding, Duke Energy Carolinas does not believe it changes the probability that the ONS subsequent renewed licenses will ultimately be issued, although Duke Energy Carolinas cannot guarantee the outcome of the license application process.
Duke Energy Carolinas and Duke Energy Progress intend to seek renewal of operating licenses and 20-year license extensions for all of their nuclear stations. NewAccordingly, new depreciation rates were implemented for all of the nuclear facilities during the second quarter of 2021. Duke Energy Carolinas and Duke Energy Progress cannot predict the outcome of these additional relicensing proceedings.
Duke Energy Carolinas
2023 North Carolina Rate Case
On January 19, 2023, Duke Energy Carolinas filed a PBR application with the NCUC to request an increase in base rate retail revenues. The PBR Application included an MYRPa Multiyear rate plan (MYRP) to recover projected capital investments during the three-yearthree-year MYRP period. In addition to the MYRP, the PBR Application included an Earnings Sharing Mechanism, Residential Decoupling Mechanism and Performance Incentive Mechanisms (PIMS) as required by HB 951. The application as originally filed requested an overall retail revenue increase of $501 million in Year 1, $172 million in Year 2 and $150 million in Year 3, for a combined total of $823 million, or 15.7%, by early 2026. The rate increase is driven primarily by major transmission and distribution investments since the last rate case and projected in the MYRP, as well as investments in energy storage and solar assets included in the MYRP consistent with the Carolinas Carbon Plan (Carbon Plan). The Public Staff – North Carolina Utilities Commission (Public Staff) and intervenor testimony was filed on July 19, 2023, and Duke Energy Carolinas' rebuttal testimony was filed on August 4, 2023.
On August 22, 2023, Duke Energy Carolinas filed with the NCUC a partial settlement with the Public Staff in connection with its PBR application. The partial settlement includes,included, among other things, agreement on a substantial portion of the North Carolina retail rate base for the historic base case of approximately $19.5 billion and all of the capital projects and related costs to be included in the three-yearthree-year MYRP, including $4.6 billion (North Carolina retail allocation) projected to go in service over the MYRP period. Additionally, the partial settlement includesincluded agreement, with certain adjustments, on depreciation rates, the recovery of grid improvement plan costs and PIMs, Tracking Metrics and the Residential Decoupling Mechanism under the PBR application. On August 28, 2023, Duke Energy Carolinas filed with the NCUC a second partial settlement with the Public Staff resolving additional issues, including the future treatment of nuclear production tax credits related to the Inflation Reduction Act, through a stand-alone rider that will provide the benefits to customers beginning January 1, 2025.
On December 1As a result of5, 2023, the NCUC issued an order approving Duke Energy Carolinas' PBR Application, as modified by the partial settlements Duke Energy Carolinas recognized pretax chargesand the order, including an overall retail revenue increase of $59$436 million within Impairmentin Year 1, $174 million in Year 2 and $158 million in Year 3, for a combined total of assets$768 million. The order established an ROE of 10.1% based upon an equity ratio of 53% and other charges, which primarily related toapproved, with certain COVID-19 deferredadjustments, depreciation rates and the recovery of grid improvement plan costs and $8 million within Operations, maintenancecertain deferred COVID-related costs. Additionally, the Residential Decoupling Mechanism and other, forPIMs were approved as requested under the threePBR Application and nine months ended September 30, 2023, onrevised by the Condensed Consolidated Statements of Operations. These partial settlements are subject to the review and approval of the NCUsettlements.C.
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FINANCIAL STATEMENTS | REGULATORY MATTERS |
Remaining items litigated at the evidentiary hearing, which occurred August 28 to September 5, 2023, include ROE, capital structure, and recovery of the remaining COVID-19 deferred costs. Duke Energy Carolinas implemented interim rates, subject to refund, on September 1, 2023. New revised Year 1 rates and the residential decoupling were implemented on January 15, 2024.
On February 13, 2024, a number of parties filed Notices of Appeal of the December 15, 2023, NCUC order. Notices of Appeal were filed by the Carolina Industrial Group for Fair Utility Rates (CIGFUR) III, a collection of various electric membership corporations (collectively, the EMCs), and has requested permanent rates be effective bythe North Carolina Attorney General’s Office (the AGO). CIGFUR III and the EMCs appealed the interclass subsidy reduction percentage and the Transmission Cost Allocation stipulation. In addition, CIGFUR III appealed the NCUC’s elimination of the equal percentage fuel cost allocation methodology. The AGO appealed several issues including the authorized ROE and certain rate design and accounting matters. On March 1, 2024, Carolina Utility Customers Association, Inc. appealed several issues, including the authorized ROE and certain rate design and accounting matters.
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FINANCIAL STATEMENTS | REGULATORY MATTERS |
2024 South Carolina Rate Case
On January 1, 2024. On October 13, 2023, the Public Staff filed supplemental testimony, and on October 23, 2023, the NCUC ordered the hearing to reconvene on October 30, 2023.4, 2024, Duke Energy Carolinas expectsfiled a decision on its applicationrate case with the PSCSC to request a net increase in this caseannual retail revenues of 11.4%, or approximately $239 million, in the fourth quarterfirst two years, and an additional overall increase of this year. about 4.1%, or approximately $84 million additional revenue, after the first two years. The requested increases, if approved, would result in an overall average 15.5% increase in annual retail revenues, or approximately $323 million, prior to mitigation efforts. Duke Energy Carolinas cannot predictrequested an ROE of 10.5% with an equity ratio of 53%. To mitigate the outcomerate increase, Duke Energy Carolinas has proposed to accelerate the return of this matter.remaining federal unprotected EDIT balances to customers over two years. This offset reduces the impact to customers in the first two years to the effective net increase of 11.4% after which the credit for EDIT balances expire. Duke Energy Carolinas has requested the revised rates to be effective no later than August 1, 2024. Intervenor testimony and Duke Energy Carolinas' rebuttal testimony were filed in April 2024. The evidentiary hearing is scheduled to commence on May 20, 2024.
Marshall Combustion Turbines CPCN
On March 14, 2024, Duke Energy Carolinas filed with the NCUC an application to construct and operate two hydrogen-capable advanced-class simple-cycle combustion turbines (CTs) at the site of the existing Marshall Steam Station. The two new CTs – totaling approximately 850 MW – will enable the retirement of Marshall coal units 1 and 2 and provide incremental capacity to support system capacity needs and expanded flexibility to support integration of renewables. Pending regulatory approvals, construction is planned to start in 2026, and the CTs are targeted to be placed into service by the end of 2028. As part of the application, Duke Energy Carolinas noted that Construction Work in Progress for the proposed facility will accrue AFUDC and will not be in rate base, resulting in no impact on Duke Energy Carolinas' North Carolina retail revenue requirement during the construction period. The 2029 North Carolina retail revenue requirement for the proposed facility is estimated to be $104 million, representing an approximate average retail rate increase of 2.2% across all classes.
Duke Energy Progress
2022 North Carolina Rate Case
On October 6, 2022, Duke Energy Progress filed a PBR application with the NCUC to request an increase in base rate retail revenues. The rate request before the NCUC included an MYRP to recover projected capital investments during the three-yearthree-year MYRP period. In addition to the MYRP, the PBR Application included an Earnings Sharing Mechanism, Residential Decoupling Mechanism and PIMs as required by HB 951. The overall retail revenue increase as originally filed would have been $326 million in Year 1, $151 million in Year 2 and $138 million in Year 3, for a combined total of $615 million, by late 2025. The rate increase is driven primarily by major transmission and distribution investments since the last rate case and as projected in the MYRP, as well as investments in energy storage and solar assets included in the MYRP consistent with the Carbon Plan.
On April 26, 2023, Duke Energy Progress filed with the NCUC a partial settlement with Public Staff, which included agreement on many aspects of Duke Energy Progress' three-yearthree-year MYRP proposal. In May 2023, the Carolina Industrial Group for Fair Utility RatesCIGFUR II (CIGFUR) joined this partial settlement and Public Staff and CIGFUR II filed a separate settlement reaching agreement on PIMs, Tracking Metrics and the Residential Decoupling Mechanism under the PBR application.
On August 18, 2023, the NCUC issued an order approving Duke Energy Progress' PBR Application, as modified by the partial settlements and the order, approving ofincluding an overall retail revenue increase of $233 million in Year 1, $126 million in Year 2 and $135 million in Year 3, for a combined total of $494 million. Key aspects of the order include the approval of North Carolina retail rate base for the historic base case of approximately $12.2 billion and capital projects and related costs to be included in the three-yearthree-year MYRP, including $3.5 billion (North Carolina retail allocation) projected to go in service over the MYRP period. The order established an ROE of 9.8% based upon a capital structurean equity ratio of 53% equity and 47% debt and approved, with certain adjustments, depreciation rates and the recovery of grid improvement plan costs and certain deferred COVID-related costs. Additionally, the Residential Decoupling Mechanism and PIMs were approved as requested under the PBR Application and revised by the partial settlements. As a result of the order, Duke Energy Progress recognized pretax charges of $28 million within Impairment of assets and other charges, which primarily related to certain COVID-19 deferred costs, and $8 million within Operations, maintenance and other, for the three and nine months ended September 30, 2023, on the Condensed Consolidated Statements of Operations. Duke Energy Progress implemented interim rates, subject to refund, on June 1, 2023, and implemented revised Year 1 rates and the residential decoupling on October 1, 2023.
On October 17, 2023, CIGFUR II and Haywood Electric Membership Corporation each filed a Notice of Appeal and Exceptions toof the Supreme Court of North Carolina.August 18, 2023 NCUC order. Both parties are appealing certain matters that do not impact the overall revenue requirement in the rate case. Specifically, they are appealingappealed the classinterclass subsidy reduction percentage, and CIGFUR isII also appealingappealed the Customer Assistance Program and the equal percentage fuel cost allocation methodology. CIGFUR alsoOn November 6, 2023, the AGO filed with the NCUC a Motion for Reconsideration and Motion for Stay with respect to those issues during the pendencyNotice of Cross Appeal of the appeal.NCUC's determination regarding the exclusion of electric vehicle revenue from the residential decoupling mechanism. On November 9, 2023, DukeDuke Energy Progress, cannot predict the outcomePublic Staff, CIGFUR II, and a number of this matter.other parties reached a settlement pursuant to which CIGFUR II agreed not to pursue its appeal of the Customer Assistance Program.
2023 South Carolina Storm Securitization
On May 31, 2023, Duke Energy Progress filed a petition with the PSCSC requesting authorization for the financing of Duke Energy Progress' storm recovery costs in the amount of approximately $171 million, through securitization due to storm recovery activities required as a result of the following storms: Pax, Ulysses, Matthew, Florence, Michael, Dorian, Izzy and Jasper. On September 8, 2023, Duke Energy Progress filed a comprehensive settlement agreement with all parties on all cost recovery issues raised in the storm securitization proceeding.
The evidentiary hearing occurred in early September 2023. On September 20, 2023, the PSCSC approved the comprehensive settlement agreement and on October 13, 2023, the PSCSC issued its financing order. The storm recovery bonds of $177 million were issued by Duke Energy Progress will proceed with structuring, marketing and pricing the storm recovery bonds and thenon April 25, 202 seek PSCSC authorization to issue the bonds in the first half of 2024.4. Duke Energy Progress cannot predict the outcome of this matter.
2022 South Carolina Rate Case
On Septemberimplemented storm recovery charges effective May 1, 2022, Duke Energy Progress filed an application with the PSCSC to request an increase in base rate retail revenues. On January2024. See notes 6 and 12 2023, Duke Energy Progress and the ORS, as well as other consumer, environmental, and industrial intervening parties, filed a comprehensive Agreement and Stipulation of Settlement resolving all issues in the base rate proceeding. The major components of the stipulation include:
•A $52 million annual customer rate increase prior to the reduction from the accelerated return to customers of federal unprotected Property, Plant and Equipment related EDIT. After extending the remaining EDIT giveback to customers to 33 months, the net annual retail rate increase is approximately $36 million.
•ROE of 9.6% based on a capital structure of 52.43% equity and 47.57% debt.
•Continuation of deferral treatment of coal ash basin closure costs. Supports an amortization period for remaining coal ash closure costs in this rate case of seven years. Duke Energy Progress agreed not to seek recovery of approximately $50 million of deferred coal ash expenditures related to retired sites in this rate case (South Carolina retail allocation).
•Acceptance of the 2021 Depreciation Study as proposed in this case, as adjusted for certain recommendations from ORS and includes accelerated retirement dates for certain coal units as originally proposed.
•Establishment of a storm reserve to help offset the costs of major storms.more information.
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FINANCIAL STATEMENTS | REGULATORY MATTERS |
Person County Combined Cycle CPCN
On March 28, 2024, Duke Energy Progress filed with the NCUC its application to construct and operate a 1,360 MW hydrogen-capable, advanced-class combined-cycle generating facility (CC) in Person County at the site of the existing Roxboro Plant. Subject to negotiation of final contractual terms, the new Roxboro CC will be co-owned with the North Carolina Electric Membership Corporation (NCEMC), with Duke Energy Progress owning approximately 1,135 MW and NCEMC owning the remaining 225 MW. Pending regulatory approvals, construction is planned to start in 2026, with the CC targeted to be placed in service by the end of 2028. The PSCSC heldCC will allow for the retirement of Roxboro’s coal-fired units 1 and 4. As part of the application, Duke Energy Progress noted that the recovery of Construction Work in Progress during the construction period for the proposed facility may be pursued in a hearing on January 17, 2023,future rate case. The 2029 North Carolina retail revenue requirement for the proposed facility is estimated to consider evidence supporting the stipulation and unanimously voted to approve the comprehensive agreement on February 9, 2023. A final written order was issued on March 8, 2023. New rates went into effect April 1, 2023.be $98 million, representing an approximate average retail rate increase of 2.6% across all classes.
Duke Energy Florida
2021 Settlement Agreement
On January 14, 2021, Duke Energy Florida filed a Settlement Agreement (the “2021 Settlement”) with the FPSC. The parties to the 2021 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”).
Pursuant to the 2021 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 an ROE band of 8.85% to 10.85% with a midpoint of 9.85% based on a capital structureupon an equity ratio 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%. On July 25, 2022, this provision was triggered. Duke Energy Florida filed a petition with the FPSC on August 12, 2022, to increase the ROE effective August 2022 with a base rate increase effective January 1, 2023. The FPSC approved this request on October 4, 2022. The 2021 Settlement Agreement also provided that Duke Energy Florida will be able to retain $173 million of the expected Department of Energy (DOE) award from its lawsuit to recover spent nuclear fuel to mitigate customer rates over the term of the 2021 Settlement. In return, Duke Energy Florida is permitted to recognize the $173 million into earnings through the approved settlement period. Duke Energy Florida settled the DOE lawsuit and received payment of approximately $180 million on June 15, 2022, of which the retail portion was approximately $154 million. The 2021 Settlement authorizes Duke Energy Florida to collect the difference between $173 million and the $154 million retail portion of the amount received through the capacity cost recovery clause. As of September 30, 2023,March 31, 2024, Duke Energy Florida has recognized $94$149 million into earnings.earnings, including $8 million and $54 million recognized during the three months ended March 31, 2024, and 2023, respectively. The remaining $79$24 million is expected to be recognized over the remainder of 2023 and 2024, while also remaining within the approved return on equity band.in 2024.
The 2021 Settlement also contained a provision to recover or flow back the effects of tax law changes. As a result of the IRA enacted on August 16, 2022, Duke Energy Florida is eligible for Production Tax Credits (PTCs)PTCs associated with solar facilities placed in service beginning in January 2022. Duke Energy Florida filed a petition with the FPSC on October 17, 2022, to reduce base rates effective January 1, 2023, by $56 million to flow back the expected 2023 PTCs and to flow back the expected 2022 PTCs via an adjustment to the capacity cost recovery clause. On December 14, 2022, the FPSC issued an order approving Duke Energy Florida's petition.
In addition to these terms, the 2021 Settlement contained 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 2021 Settlement also resolved remaining unrecovered storm costs for Hurricane Michael and Hurricane Dorian.
The FPSC approved the 2021 Settlement on May 4, 2021, issuing an order on June 4, 2021. Revised customer rates became effective January 1, 2022, with subsequent base rate increases effective January 1, 2023, and January 1, 2024.
Clean Energy Connection
On July 1, 2020, Duke Energy Florida petitioned the FPSC for approval of a voluntary solar program. The program consistsconsisting 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 and the projects are expected to be completed by the end of 2024. This investment will beis included in base rates offset by the revenue from the subscription fees and the credits will be included for recovery in the fuel cost recovery clause. The FPSC approved the program in January 2021.
On February 24, 2021, the League of United Latin American Citizens (LULAC) filed a notice of appeal of the FPSC’s order approving the Clean Energy Connection to the Supreme Court of Florida. The Supreme Court of Florida heard oral arguments in the appeal on February 9, 2022. On May 27, 2022, the Supreme Court of Florida issued an order remanding the case back to the FPSC so that the FPSC can amend its order to better address some of the arguments raised by LULAC. On September 23, 2022, the FPSC issued a revised order and submitted it on September 26, 2022, to the Supreme Court of Florida. The Supreme Court of Florida requested that the parties file supplemental briefs regarding the revised order, which were filed February 6, 2023. LULAC has filed a request for Oral Argument on the issues discussed in the supplemental briefs, but the Courtcourt has yet to rule on that request. The FPSC approval order remains in effect pending the outcome of the appeal. Duke Energy Florida cannot predict the outcome of this matter.
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FINANCIAL STATEMENTS | REGULATORY MATTERS |
Storm Protection Plan
On April 11, 2022, Duke Energy Florida filed a Storm Protection Plan for approval with the FPSC. The plan, which covers investments for the 2023-2032 time frame, reflects approximately $7 billion of capital investment in transmission and distribution meant to strengthen its infrastructure, reduce outage times associated with extreme weather events, reduce restoration costs and improve overall service reliability. The evidentiary hearing began on August 2, 2022. On October 4, 2022, the FPSC voted to approve Duke Energy Florida’s plan with one modification to remove the transmission loop radially fed program, representing a reduction of approximately $80 million over the 10-year period starting in 2025. On December 9, 2022, the OPC filed a notice of appeal of this order to the Florida Supreme Court. The OPC's initial brief was filed on April 18, 2023. Duke Energy Florida filed its answer brief on July 17, 2023. The OPC's reply brief was filed on October 16, 2023. The OPC has filed a request for oral argument, but the Florida Supreme Court has yet to ruleheard oral arguments on that request. Duke Energy Florida cannot predict the outcome of this matter.February 7, 2024.
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FINANCIAL STATEMENTS | REGULATORY MATTERS |
Hurricanes Ian and Idalia
On September 28, 2022, much of Duke Energy Florida’s service territory was impacted by Hurricane Ian, which caused significant damage resulting in more than 1.1 million outages. Duke Energy Florida's September 30, 2023, Condensed Consolidated Balance Sheets includes an estimate of approximately $357 million in regulatory assets related to deferred Hurricane Ian storm costs consistent with the FPSC's storm rule. After depleting any existing storm reserves, which were approximately $107 million before Hurricane Ian, Duke Energy Florida is permitted to petition the FPSC for recovery of additional incremental operation and maintenance costs resulting from the storm and to replenish the retail customer storm reserve to approximately $132 million. Duke Energy Florida filed its petition for cost recovery of various storms, including Hurricane Ian, and replenishment of the storm reserve on January 23, 2023, seeking recovery of $442 million, for recovery over 12 months beginning with the first billing cycle in April 2023. On March 7, 2023, the FPSC approved this request for interim recovery, subject to refund, and ordered Duke Energy Florida to file documentation of the total actual storm costs, once known. Duke Energy Florida filed documentation evidencing its total actual storm costs of $431 million on September 29, 2023. The FPSC will hold a final hearing to determine the prudence of these costs on May 21 and 22, 2024.
On August 30, 2023, Hurricane Idalia made landfall on Florida’s gulf coast, causing damage and impacting more than 200,000 customers across Duke Energy Florida's service territory. Duke Energy Florida's September 30, 2023, Condensed Consolidated Balance Sheets includes an estimate of approximately $96 million in regulatory assets related to deferred Hurricane Idalia storm costs consistent with the FPSC's storm rule. On October 16, 2023, Duke Energy Florida requested to combine the $92 million retail portion of the deferred estimated Hurricane Idalia costs with $74 million of costs projected to be collected after December 31, 2023, under the existing approved storm cost recovery and storm surcharge. This $74 million of costs relates primarily to the approved ongoing replenishment of the storm reserves. Duke Energy Florida is seekingAt its December 5, 2023 Agenda Conference, the FPSC approved recovery of the total $166 million over 12 months beginning with its first billing cycle in January 2024, replacing the previously approved storm cost recovery and storm surcharge.surcharge, and ordered Duke Energy Florida cannot predictto file documentation of the outcometotal actual Idalia related storm costs, once known. Revised rates were effective January 1, 2024.
2024 Florida Rate Case
On April 2, 2024, Duke Energy Florida filed a formal request for new base rates with the FPSC. Duke Energy Florida has proposed a three-year rate plan that would begin in January 2025, once its current base rate settlement agreement concludes at the end of these matters.2024. Duke Energy Florida proposed multiyear rate increases that use the projected 12-month periods ending December 31, 2025, 2026, and 2027 as the test years, with adjusted rates to be effective with the first billing period of January 2025, 2026, and 2027, respectively. Duke Energy Florida requested additional base rate revenue requirements of approximately $593 million in 2025, $98 million in 2026 and $129 million in 2027, representing an average annual increase in revenue requirements of approximately 4% over 2025 through 2027. Duke Energy Florida requested an ROE midpoint at 11.15% and an equity ratio of 53%. A final hearing on this request is scheduled to begin on August 12, 2024.
Duke Energy Ohio
Duke Energy Ohio Electric Base Rate Case
Duke Energy Ohio filed with the PUCO an electric distribution base rate case application on October 1, 2021, with supporting testimony filed on October 15, 2021, requesting an increase in electric distribution base rates of approximately $55 million and an ROE of 10.3%.million. On September 19, 2022, Duke Energy Ohio filed a Stipulation and Recommendation with the PUCO, which includes an increase in overall electric distribution base rates of approximately $23 million with an equity ratio of 50.5% and an ROE of 9.5%. The stipulation is among all but one party to the proceeding. The PUCO issued an order on December 14, 2022, approving the Stipulation without material modification. Rates went into effect on January 3, 2023. The OCCOhio Consumers' Counsel filed an application for rehearing on January 13, 2023, arguing the Stipulation was unreasonable, discriminatory, and denied OCC due process. On February 8, 2023, the PUCO granted the OCC's application for rehearing for further consideration. Duke Energy Ohio cannot predict the outcome of this matter.
Energy Efficiency Cost Recovery
In response to changes in Ohio law that eliminated Ohio's energy efficiency mandates, the PUCO issued an order on February 26, 2020, directing utilities to wind down their demand-side management programs by September 30, 2020, and to terminate the programs by December 31, 2020. Duke Energy Ohio took the following actions:
•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 an order replacing the cost cap previously imposed upon Duke Energy Ohio with a cap on shared savings recovery. On December 18, 2020, Duke Energy Ohio filed an additional application for rehearing challenging, among other things, the imposition of the cap on shared savings. On January 13, 2021, the application for rehearing was granted for further consideration.
•On October 9, 2020, Duke Energy Ohio filed an application to implement a voluntary energy efficiency program portfolio to commence on January 1, 2021. The application proposed a mechanism for recovery of program costs and a benefit associated with avoided transmission and distribution costs.
•On November 18, 2020, the PUCO issued an order directing all utilities to set their energy efficiency riders 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. Effective January 1, 2021, Duke Energy Ohio suspended its energy efficiency programs.
•On June 14, 2021, the PUCO requested each utility to file by July 15, 2021, a proposal to reestablish low-income programs through December 31, 2021. Duke Energy Ohio filed its application on July 14, 2021.
•On February 23, 2022,20, 2024, the PUCO issued its FifthSecond Entry on Rehearing, that 1) affirmed its reduction in Duke Energy Ohio's shared savings cap; 2) denied rehearing/clarification regarding lost distribution revenues and shared savings recovery for periods after December 31, 2020; and 3) directed Duke Energy Ohiodenying OCC's rehearing application. OCC has 60 days to submitseek an updated application with exhibits. On March 25, 2022, Duke Energy Ohio filed its Amended Application consistent with the PUCO's order.
•On March 17, 2023, the Staff of the PUCO submitted its Staff Review and Recommendation. This Staff Report, like prior such reports, recommends certain disallowances related to incentives.
•On March 27, 2023, the PUCO established a procedural schedule. Intervention/comments were filed on April 26, 2023, and Duke Energy Ohio filed reply comments on May 11, 2023.
On August 9, 2023, the PUCO issued its decision approving the Company’s request for recovery and final true up of energy efficiency program costs, lost distribution revenues and performance incentives from calendar years 2018 through 2020, resulting in $14 million of Regulated electric revenue on the Condensed Consolidated Statements of Operations for the three and nine months ended September 30, 2023, and resolving all outstanding issues in these proceedings. Rates were revised effective September 1, 2023.
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FINANCIAL STATEMENTS | REGULATORY MATTERS |
appeal.Duke Energy Ohio Natural Gas Base Rate Case
Duke Energy Ohio filed with the PUCO a natural gas base rate case application on June 30, 2022, with supporting testimony filed on July 14, 2022, requesting an increase in natural gas base rates of approximately $49 million and an ROE of 10.3%. This is an approximate 5.6% average increase in the customer's total bill across all customer classes.million. The drivers for this case are capital invested since Duke Energy Ohio's last natural gas base rate case in 2012. Duke Energy Ohio is also seekingsought to adjust the caps on its CEP rider. The report of the Staff of the PUCO was issued on December 21, 2022, recommending an increase in natural gas base rates of $24 million to $36 million, with an equity ratio of 52.32% and an ROE range of 9.03% to 10.04%. On April 28, 2023, Duke Energy Ohio filed a stipulation with all parties to the case except the OCC. In the stipulation, the parties agreed to approximately $32 million in revenue increases with an equity ratio of 52.32% and an ROE of 9.6%, and adjustments to the CEP Rider caps. The stipulation was opposed by the OCC at an evidentiary hearing that concluded on May 24, 2023. Initial briefs were filed June 16, 2023, and reply briefs were filed on July 14, 2023. On November 1, 2023, PUCO issued an order approving the stipulation as filed. New rates went into effect November 1, 2023. On December 1, 2023, the OCC filed an application for rehearing. On December 13, 2023, the PUCO granted OCC's application for rehearing for further consideration of issues raised.
Duke Energy Ohio cannot predictElectric Security Plan
On April 1, 2024, Duke Energy Ohio filed with the outcomePUCO a request for an Electric Security Plan (ESP). The ESP application proposes a three-year term from June 1, 2025 through May 31, 2028 and includes continuation of this matter.market-based customer rates through competitive procurement processes for generation and continuation and expansion of existing rider mechanisms. Duke Energy Ohio is proposing a new rider mechanism relating to electric distribution infrastructure modernization programs, which may be enabled by and partially funded through federal or state funding opportunities, future battery storage projects, and two proposed electric vehicle programs. Additional proposed new rider mechanisms are related to solar for all investments for low-income and disadvantaged communities, low-income senior citizen bill assistance, and energy efficiency and demand-side management programs.
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FINANCIAL STATEMENTS | REGULATORY MATTERS |
Duke Energy Kentucky Electric Base Rate Case
On December 1, 2022, Duke Energy Kentucky filed a rate case with the KPSC requesting an annualized increase in electric base rates of approximately $75 million and an ROE of 10.35%. This is an overall increase in rates of approximately 17.8%.million. The request for rate increase iswas driven by capital investments to strengthen the electricity generation and delivery systems along with adjusted depreciation rates for the East Bend and Woodsdale Combustion Turbine (CT) generation stations. Duke Energy Kentucky is also requestingrequested approval for new programs for the benefit of customers and tariff updates, including a voluntary community-based renewable subscription program and two electric vehicle charging programs. Intervenor testimony was filed March 10, 2023, and rebuttal testimony was filed April 14, 2023. The Kentucky Attorney General recommended an increase of $31 million and an ROE of 9.55%. An evidentiary hearing concluded on May 11, 2023, with simultaneous briefs filed June 9, 2023, and replies filed on June 19, 2023. The KPSC issued an order on October 12, 2023, including a $48 million increase in base revenues, an ROE of 9.75% for electric base rates and 9.65% for electric riders and an equity ratio of 52.145%. New rates went into effect October 13, 2023. The Company's request to align the depreciation rates of East Bend with a 2035 retirement date was denied and the KPSC ordered depreciation rates with a 2041 retirement date for the unit. The KPSC did approve the request to align the depreciation rates of Woodsdale CT with a 2040 retirement date and denied the voluntary community-based renewable subscription program and the two electric vehicle charging programs.
On November 1, 2023, Duke Energy Kentucky filed for rehearing requesting certain matters be reconsidered by the KPSC. On November 21, 2023, KPSC granted in part and denied in part the Company's request for rehearing. On February 15, 2024, the KPSC issued a briefing schedule for the rehearing process. The briefing concluded on April 1, 2024, and the matter was submitted for decision on April 2, 2024.
On December 14, 2023, Duke Energy Kentucky cannot predictfiled an appeal with the outcome of this matter.Franklin County Circuit Court on certain matters for which the KPSC denied rehearing, specifically as it relates to including decommissioning costs in depreciation rates for East Bend and Woodsdale. On January 8, 2024, answers to the appeal were filed by the KPSC, Kentucky Attorney General, and the Kentucky Broadband & Cable Association. On April 11, 2024, the Franklin County Circuit Court approved a briefing schedule with Duke Energy Kentucky's initial brief due June 26, 2024, appellee briefs due September 24, 2024, and Duke Energy Kentucky's reply brief due November 8, 2024.
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. On June 29, 2020, the IURC issued an order in the rate case approving a revenue increase of $146 million before certain adjustments and ratemaking refinements. The order approved Duke Energy Indiana’s requested forecasted rate base of $10.2 billion as of December 31, 2020, including the Edwardsport Integrated Gasification Combined Cycle (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 was due to a prospective change in depreciation and use of regulatory asset for the end-of-life inventory at retired generating plants, approximately 20% was due to the approved ROE of 9.7% versus the requested ROE of 10.4% and approximately 20% was related to miscellaneous earnings neutral adjustments. Step one rates were estimated to be approximately 75% of the total and became effective on July 30, 2020. Step two rates estimated to be the remaining 25% of the total rate increase were approved on July 28, 2021, and implemented in August 2021.
Several groups appealed the IURC order to the Indiana Court of Appeals. The Indiana Court of Appeals affirmed the IURC decision on May 13, 2021. However, upon appeal by the Indiana Office of Utility Consumer Counselor (OUCC) and the Duke Industrial Group on March 10, 2022, the Indiana Supreme Court found that the IURC erred in allowing Duke Energy Indiana to recover coal ash costs incurred before the IURC’s rate case order in June 2020. The Indiana Supreme Court found that allowing Duke Energy Indiana to recover coal ash costs incurred between rate cases that exceeded the amount built into base rates violated the prohibition against retroactive ratemaking. The IURC’s order has been remanded to the IURC for additional proceedings consistent with the Indiana Supreme Court’s opinion. As a result of the court's opinion, Duke Energy Indiana recognized pretax charges of approximately $211 million to Impairment of assets and other charges and $46 million to Operating revenues in the Condensed Consolidated Statements of Operations for the three months ended March 31, 2022. Duke Energy Indiana filed a request for rehearing with the Supreme Court on April 11, 2022, which the court denied on May 26, 2022. Duke Energy Indiana filed its testimony in the remand proceeding on August 18, 2022. On February 3, 2023, Duke Energy Indiana filed a settlement agreement reached with the OUCC and Duke Industrial Group, which includes an agreed amount of approximately $70 million of refunds to be paid to customers. The IURC approved this settlement agreement in its entirety on April 12, 2023. In June of 2023, Duke Energy Indiana commenced refunding the approximate $70 million to customers in accordance with the settlement agreement.
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FINANCIAL STATEMENTS | REGULATORY MATTERS |
Indiana Coal Ash Recovery Cases
In Duke Energy Indiana’s 2019 rate case, the IURC also opened a subdocket for 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 (IDEM) as well as continuing deferral, with carrying costs, on the balance. An evidentiary hearing was held on September 14, 2020. Briefing was completed by mid-September 2021. On November 3, 2021, the IURC issued an order allowing recovery for post-2018 coal ash basin closure costs for the plans that have been approved by IDEM, as well as continuing deferral, with carrying costs, on the balance. The OUCC and the Duke Industrial Group appealed. The Indiana Court of Appeals issued its opinion on February 21, 2023, reversing the IURC's order to the extent that it allowed Duke Energy Indiana to recover federally mandated costs incurred prior to the IURC's November 3, 2021 order. In addition, the court found that any costs incurred pre-petition to determine federally mandated compliance options were not specifically authorized by the statute and should also be disallowed. As a result
In the second quarter of the Court's opinion, Duke Energy Indiana recognized a pretax charge of approximately $175 million to Impairment of assets and other charges for the year ended December 31, 2022.2023, Duke Energy Indiana filed its proposal to remove from rates certain costs incurred prior to the IURC's November 3, 2021 order date. On September 20, 2023, the commission approved the Company's proposal to remove the costs from its rates and assessed simple interest of the refunds of 4.71%, beginning from when the costs were initially recovered from customers. Duke Energy Indiana alsoseeks to recover the pre-order costs denied by the Indiana Court of Appeals and certain future coal ash closure costs as part of depreciation costs in the 2024 Indiana Rate Case.
Duke Energy Indiana filed a new petition under the amended version of the federal mandate statute for additional post-2018 coal ash closure costs for the remaining basins not included in the 2020 Indiana Coal Ash Recovery Case.coal ash recovery case from 2020. An evidentiary hearing has been scheduled forwas held on January 25, 2024. Duke Energy Indiana cannot predict the outcome of this matter.
TDSIC 2.0
On November 23, 2021, Duke Energy Indiana filed for approval of the Transmission, Distribution, Storage Improvement Charge 2.0 investment plan for 2023-2028 (TDSIC 2.0). On June 15, 2022, the IURC approved, without modification, TDSIC 2.0, which includes approximately $2 billion in transmission and distribution investments selected to improve customer reliability, harden and improve resiliency of the grid, enable expansion of renewable and distributed energy projects and encourage economic development. In addition, the IURC set up a subdocket to consider thea targeted economic development project, which the IURC approved on March 2, 2022. On July 15, 2022, the OUCC filed a notice of appeal to the Indiana Court of Appeals in Duke Energy Indiana’s TDSIC 2.0 proceeding. An appellant brief was filed on October 28, 2022, and Duke Energy Indiana filed its responsive brief on December 28, 2022. The Indiana Court of Appeals issued its opinion on March 9, 2023, affirming the IURC’s order in its entirety. The Duke Industrial Group filed a petition to transfer to the Indiana Supreme Court. The Indiana Supreme Court granted transfer and held an oral argument on September 28, 2023.
2024 Indiana Rate Case
On April 4, 2024, Duke Energy Indiana cannot predictfiled an application with the outcome of this matter.
Piedmont
Tennessee Annual Review Mechanism
On October 10, 2022, the TPUC approved Piedmont’s petition to adopt an ARM as allowed by Tennessee law. Under the ARM, Piedmont will adjust rates annually to achieve its allowed 9.80% ROE over the upcoming year and to true up any variance between its allowed ROE and actual ROE from the prior calendar year. The initial year subject to the true up is 2022, and Piedmont filed the initial rate adjustments request on May 19, 2023,IURC for a totalrate increase of $492 million, representing an overall average bill increase of approximately $42 million16.2%, which, if approved, would be added to retail customer bills in two steps, approximately 11.7% in 2025 and for ratesapproximately 4.5% in 2026. Duke Energy Indiana requested an ROE of 10.5% with an equity ratio of 53%. The rate increase is driven by $1.6 billion in investments made since the last general rate case filed in 2019 in order to become effective October 1, 2023. On September 11, 2023, the TPUC approved a settlement between Piedmont and the Consumer Advocate Divisionreliably serve customers, improve resiliency of the Tennessee Attorney General's Office,system, and advance environmental sustainability. An evidentiary hearing is scheduled to begin August 29, 2024.
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FINANCIAL STATEMENTS | REGULATORY MATTERS |
Piedmont
2024 North Carolina Rate Case
On April 1, 2024, Piedmont filed an application with the NCUC for a rate increase for retail customers of approximately $159 million, which provided for recoveryrepresents a 12.5% increase in retail revenues. Piedmont requested an ROE of 10.5% with an equity ratio of 53%. The rate increase is driven by significant infrastructure upgrade investments since the last general rate case, offset by lower fixed natural gas costs and remaining federal and state tax reform savings to be received by customers. Approximately 40% of the Historic Base Period Reconciliation costplant additions being rolled into rate base are categories of service of $11 million through rider rates and an increase in Piedmont's base rates of $29 million forplant investment that are covered under the Annual Base Rate Reset componentIMR mechanism, which was originally approved as part of the ARM. These amounts result in a total increase of $40 million with adjusted2013 North Carolina Rate Case. Piedmont plans to implement revised interim rates effective Octoberby November 1, 2023.2024.
5. 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 on 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.
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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 Other Current Liabilities and Other within Other Noncurrent Liabilities on the Condensed Consolidated Balance Sheets.
| (in millions) | (in millions) | September 30, 2023 | | December 31, 2022 | |
(in millions) | |
(in millions) | |
Reserves for Environmental Remediation | |
Reserves for Environmental Remediation | |
Reserves for Environmental Remediation | Reserves for Environmental Remediation | | | | |
Duke Energy | Duke Energy | $ | 90 | | | $ | 84 | | |
Duke Energy | |
Duke Energy | |
Duke Energy Carolinas | |
Duke Energy Carolinas | |
Duke Energy Carolinas | Duke Energy Carolinas | 24 | | | 22 | | |
Progress Energy | Progress Energy | 20 | | | 19 | | |
Progress Energy | |
Progress Energy | |
Duke Energy Progress | |
Duke Energy Progress | |
Duke Energy Progress | Duke Energy Progress | 10 | | | 8 | | |
Duke Energy Florida | Duke Energy Florida | 10 | | | 11 | | |
Duke Energy Florida | |
Duke Energy Florida | |
Duke Energy Ohio | |
Duke Energy Ohio | |
Duke Energy Ohio | Duke Energy Ohio | 36 | | | 33 | | |
Duke Energy Indiana | Duke Energy Indiana | 2 | | | 3 | | |
Duke Energy Indiana | |
Duke Energy Indiana | |
Piedmont | Piedmont | 7 | | | 7 | | |
Piedmont | |
Piedmont | |
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.
LITIGATION
For open litigation, unless otherwise noted, Duke Energy and the Subsidiary Registrants cannot predict the outcome or ultimate resolution of their respective matters.
Duke Energy
Texas Storm Uri Tort Litigation
Duke Energy (Parent), several Duke Energy renewables project companies, and others in the ERCOT market were named in multiple lawsuits arising out of Texas Storm Uri, which occurred in February 2021. These lawsuits seek recovery for property damages,damage, personal injury and wrongful death allegedly caused by the power outages that plaintiffs claim were the collective failure of generators including Duke Energy entities, transmission and distribution operators (TDUs), retail energy providers, and all others, including ERCOT. The cases were consolidated into a Texas state court multidistrict litigation (MDL) proceeding for discovery and pre-trial motions. Five MDL cases were designated as lead cases in which motions to dismiss were filed and all other cases were stayed.
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FINANCIAL STATEMENTS | COMMITMENTS AND CONTINGENCIES |
On January 28, 2023, the Courtcourt denied certain motions including those by the generator defendants and TDUs and granted others. The generators and TDUs filed separate petitions for Writ of Mandamus to the Texas Court of Appeals seeking to overturn the denials. The TDUs' petition, filed first, was accepted and oral argument was held on October 23, 2023. The parties await a ruling fromIn the court. The generators’ petition has not yet been set for argument. Aftercases against the rulings ongenerators, plaintiffs have dismissed the motions to dismiss, plaintiffs filed new lawsuitsclaims against Duke Energy (Parent), Duke Energy Renewables, LLC, and several Duke Energy renewable entities, which are included in the MDL proceeding and are currently stayed. The plaintiffs have begun to dismiss. However, before Duke Energy (Parent) was dismissed from these lawsuitsall cases, on December 14, 2023, without argument, the Court of Appeals accepted mandamus of the generator defendants’ appeal, which includes all Duke Energy entities, and have representeddirected the MDL court to dismiss all claims. Plaintiffs filed their Petition for Reconsideration on January 29, 2024, and the court that they will dismissgenerator defendants responded on May 6, 2024. Regardless of the outcome of any motion for reconsideration or appeal, claims against Duke Energy (Parent) fromwill remain dismissed. In October 2023, in conjunction with the closing of the sale of the utility-scale solar and wind group, all such cases. Dukbut one of the project company lawsuits transferred to Brookfield. Based on legal proceedings to date and applicable insurance and reinsurance coverage, Duke Energy (Parent) does not anticipate any material financial impacts with this remaining case. e Energy cannot predict the outcome of this matter. See Note 2 for more information related to the sale of the Commercial Renewables Disposal Groups.
Duke Energy Carolinas
Ruben Villano, et al. v. Duke Energy Carolinas, LLC
On June 16, 2021, a group of nine individuals went over a low-head dam adjacent to the Dan River Steam Station in Eden, North Carolina, while water tubing. Emergency personnel rescued four people and five others were confirmed deceased. On August 11, 2021, Duke Energy Carolinas was served with the complaint filed in Durham County Superior Court on behalf of four survivors, which was later amended to include all the decedents along with the survivors. The lawsuit alleges that Duke Energy Carolinas knew that the river was used for recreational purposes, did not adequately warn about the dam, and created a dangerous and hidden hazard on the Dan River by building and maintaining the low-head dam. Duke Energy Carolinas reached an agreement that resolved this matter. The resolution, which did not have a material financial impact, was approved by the Durham County Superior Court. The case was dismissed on June 6, 2023.
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 proposed 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, 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 sought 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. Both NTE's and Duke Energy Carolinas' motions to dismiss were subsequently denied by the court.
On May 21, 2020, in response to a NTE petition challenging Duke Energy Carolinas' termination of the LGIA, FERC issued a ruling that 1) it has exclusive jurisdiction to determine whether a transmission provider may terminate aan LGIA; 2) FERC approval is required to terminate a conforming LGIA if objected to by the interconnection customer; and 3) Duke Energy may not announce the termination of a conforming LGIA unless FERC has approved the termination. FERC's Office of Enforcement also initiated an investigation of Duke Energy Carolinas into matters pertaining to the LGIA. On April 6, 2023, Duke Energy Carolinas received notice from the FERC Office of Enforcement that they have closed their non-public investigation with no further action recommended.
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FINANCIAL STATEMENTS | COMMITMENTS AND CONTINGENCIES |
Following completion of discovery, Duke Energy Carolinas filed a motion for summary judgment seeking a ruling in its favor as to some of its affirmative claims against NTE and to all of NTE’s counterclaims. On June 24, 2022, the court issued an order partially granting Duke Energy Carolinas' motion by dismissing NTE's counterclaims that Duke Energy Carolinas engaged in anti-competitive behavior in violation of state and federal statutes. On October 12, 2022, the parties executed a settlement agreement with respect to the remaining breach of contract claims in the litigation and a Stipulation of Dismissal was filed with the court on October 13, 2022. On November 11, 2022, NTE filed its Notice of Appeal to the U.S. Court of Appeals for the Fourth Circuit as to the District Court's summary judgment ruling in Duke Energy Carolinas' favor on NTE's antitrust and unfair competition claims. Briefing on NTE's appeal was completed on June 30, 2023. The oralOral argument has beenis scheduled for t DecemberMay 7, 2023. Duke Energy Carolinas cannot predict the outcome of this matter.2024.
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.
Duke Energy Carolinas has recognized asbestos-related reserves of $436$417 million at September 30, 2023,March 31, 2024, and $457$423 million at December 31, 2022.2023. 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 on Duke Energy Carolinas' best estimate for current and future asbestos claims through 2043 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 2043 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. Receivables for insurance recoveries were $572 million at September 30, 2023,March 31, 2024, and $595 million at December 31, 2022.2023. These amounts are classified in Other within Other Noncurrent Assets and Receivables within Current Assets on the Condensed Consolidated Balance Sheets. Any future payments up to the policy limit will be reimbursed by the third-party insurance carrier. 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.
The reserve for credit losses for insurance receivables is $9 million as of March 31, 2024, and $12 millionDecember 31, 2023, for both Duke Energy and Duke Energy Carolinas as of September 30, 2023, and December 31, 2022, respectively.Carolinas. 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.
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Duke Energy Indiana
Coal Ash Insurance Coverage Litigation
In June 2022, Duke Energy Indiana filed a civil action in Indiana Superior Court against various insurance companies seeking declaratory relief with respect to insurance coverage for coal combustion residuals-related expenses and liabilities covered by third-party liability insurance policies. The insurance policies cover the 1969-1972 and 1984-1985 periods and provide third-party liability insurance for claims and suits alleging property damage, bodily injury and personal injury (or a combination thereof). A trial date has not yet been set. On June 30, 2023, Duke Energy Indiana and Associated Electric and Gas Insurance Services (AEGIS) reached a confidential settlement, the results of which were not material to Duke Energy, and as a result, AEGIS was dismissed from the litigation on July 13, 2023. On December 11, 2023, Duke Energy Indiana and Munich Reinsurance America, Inc. (formerly known as American Re-Insurance Company) (AmRe) reached a confidential settlement, the results of which were not material, and AmRe was dismissed from the litigation on January 18, 2024. The lawsuit remains pending as to the other insurers but is stayed until December 31, 2023,June 14, 2024, to allow for further settlement negotiations. Duke Energy Indiana cannot predict the outcome of this matter.negotiations with other defendants.
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. Reserves are classified on the Condensed Consolidated Balance Sheets in Other within Other Noncurrent Liabilities and Other within Current Liabilities.
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.
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.
6. DEBT AND CREDIT FACILITIES
DebtIn April 2024, Duke Energy issued 750 million euros aggregate principal amount of 3.75% senior notes due April 2031. Duke Energy's obligations under its euro-denominated fixed-rate notes were effectively converted to fixed-rate U.S. dollars at issuance through cross-currency swaps, mitigating foreign currency exchange risk associated with the interest and principal payments. The $815 million equivalent in U.S. dollars were used to repay a portion of a $1 billion debt maturity due April 2024, pay down short-term debt and for general corporate purposes. See Note 9 for additional information.
In April 2024, Duke Energy Florida issued $173 million of First Mortgage Bonds due April 2074, with an interest rate of SOFR minus 35 basis points. Proceeds were used to pay down a portion of the DEFR accounts receivable securitization facility maturing in April 2024, and for general company purposes. The terms of the indenture could require repayment in less than 12 months if exercised by the bondholders and, as such, these first mortgage bonds will be classified as Current maturities of long-term debt on the Condensed Consolidated Balance Sheets.
In April 2024, Duke Energy Progress issued $177 million of storm recovery bonds at an interest rate of 5.404%. Proceeds were used to finance the South Carolina portion of restoration expenditures related to the Commercial Renewables Disposal Groups is now classified as heldfollowing storms: Pax, Ulysses, Matthew, Florence, Michael, Dorian, Izzy and Jasper. See notes 4 and 12 for sale and is excluded from the following disclosures. See Note 2 for furthermore information.
| | | | | |
FINANCIAL STATEMENTS | DEBT AND CREDIT FACILITIES |
SUMMARY OF SIGNIFICANT DEBT ISSUANCES
The following table summarizes significant debt issuances (in millions).
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| | | | | Nine Months Ended September 30, 2023 |
| | | | | | | 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 | | | | | | | | | | | | | | | | | | |
April 2023(a) | April 2026 | | 4.125 | % | | $ | 1,725 | | | $ | 1,725 | | | $ | — | | | $ | — | | | $ | — | | | $ | — | | | $ | — | | | $ | — | |
June 2023(b) | June 2033 | | 5.400 | % | | 350 | | | — | | | — | | | — | | | — | | | — | | | — | | | 350 | |
September 2023(c) | September 2033 | | 5.750 | % | | 600 | | | 600 | | | — | | | — | | | — | | | — | | | — | | | — | |
September 2023(c) | September 2053 | | 6.100 | % | | 750 | | | 750 | | | — | | | — | | | — | | | — | | | — | | | — | |
| | | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | |
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First Mortgage Bonds | | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | |
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January 2023(d) | January 2033 | | 4.950 | % | | 900 | | | — | | | 900 | | | — | | | — | | | — | | | — | | | — | |
January 2023(d) | January 2053 | | 5.350 | % | | 900 | | | — | | | 900 | | | — | | | — | | | — | | | — | | | — | |
March 2023(e) | March 2033 | | 5.250 | % | | 500 | | | — | | | — | | | 500 | | | — | | | — | | | — | | | — | |
March 2023(e) | March 2053 | | 5.350 | % | | 500 | | | — | | | — | | | 500 | | | — | | | — | | | — | | | — | |
March 2023(f) | April 2033 | | 5.250 | % | | 375 | | | — | | | — | | | — | | | — | | | 375 | | | — | | | — | |
March 2023(f) | April 2053 | | 5.650 | % | | 375 | | | — | | | — | | | — | | | — | | | 375 | | | — | | | — | |
March 2023(g) | April 2053 | | 5.400 | % | | 500 | | | — | | | — | | | — | | | — | | | — | | | 500 | | | — | |
June 2023(h) | January 2033 | | 4.950 | % | | 350 | | | — | | | 350 | | | — | | | — | | | — | | | — | | | — | |
June 2023(h) | January 2054 | | 5.400 | % | | 500 | | | — | | | 500 | | | — | | | — | | | — | | | — | | | — | |
September 2023(i) | October 2073 | | 4.960 | % | | 200 | | | — | | | — | | | — | | | 200 | | | — | | | — | | | — | |
| | | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | |
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| | | | | | | | | | | | | | | | | | | |
Total issuances | | | | | $ | 8,525 | | | $ | 3,075 | | | $ | 2,650 | | | $ | 1,000 | | | $ | 200 | | | $ | 750 | | | $ | 500 | | | $ | 350 | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| | | | | Three Months Ended March 31, 2024 |
| | | | | | | Duke | | Duke | | Duke | | | | Duke | | Duke | | |
| Maturity | | Interest | | Duke | | Energy | | Energy | | Energy | | | | Energy | | Energy | | |
Issuance Date | Date | | Rate | | Energy | | (Parent) | | Carolinas | | Progress | | | | Ohio | | Indiana | | |
Unsecured Debt | | | | | | | | | | | | | | | | | | |
January 2024(a) | January 2027 | | 4.85 | % | | $ | 600 | | | $ | 600 | | | $ | — | | | $ | — | | | | | $ | — | | | $ | — | | | |
January 2024(a) | January 2029 | | 4.85 | % | | 650 | | | 650 | | | — | | | — | | | | | — | | | — | | | |
| | | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | |
First Mortgage Bonds | | | | | | | | | | | | | | | | | | |
January 2024(b) | January 2034 | | 4.85 | % | | $ | 575 | | | $ | — | | | $ | 575 | | | $ | — | | | | | $ | — | | | $ | — | | | |
January 2024(b) | January 2054 | | 5.40 | % | | 425 | | | — | | | 425 | | | — | | | | | — | | | — | | | |
March 2024(b) | March 2034 | | 5.25 | % | | 300 | | | — | | | — | | | — | | | | | — | | | 300 | | | |
March 2024(c) | March 2034 | | 5.10 | % | | 500 | | | — | | | — | | | 500 | | | | | — | | | — | | | |
March 2024(d) | March 2054 | | 5.55 | % | | 425 | | | — | | | — | | | — | | | | | 425 | | | — | | | |
| | | | | | | | | | | | | | | | | | | |
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| | | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | |
Total issuances | | | | | $ | 3,475 | | | $ | 1,250 | | | $ | 1,000 | | | $ | 500 | | | | | $ | 425 | | | $ | 300 | | | |
(a)See "Duke Energy (Parent) Convertible Senior Notes"below for additional information.
(b)Proceeds will bewere used to repay $45 million of maturitiesthe remaining $1 billion outstanding on Duke Energy (Parent)'s variable rate Term Loan Facility due October 2023, toMarch 2024, pay down a portion of short-term debt and for general corporate purposes. Duke Energy (Parent)'s Term Loan Facility was terminated in March 2024 in conjunction with the payoff of remaining borrowings.
(c)Proceeds were primarily used to repay $400 million of maturities due October 2023, to pay down a portion of short-term debt and for general corporate purposes.
(d)Proceeds were used to repay $1 billion of maturities due March 2023, to pay down a portion of short-term debt and for general company purposes.
(e)Proceeds will be used to repay $300 million of maturities due September 2023, to pay down a portion of short-term debt and for general company purposes.
(f)Proceeds will be used to repay $300 million of maturities due September 2023 and a portion of the $100 million term loan due October 2023. Remaining proceeds will be used to repay a portion of short-term debt and for general corporate purposes.
(g)Proceeds were used to repay the $300 million term loan due October 2023. Remaining proceeds will be used to repay a portion of short-term debt and for general company purposes.
(h)(b)Proceeds were used to pay down a portion of short-term debt and for general company purposes.
(i)(c)Proceeds were used to fund eligible green energy projects, pay down a portion of short-term debt and for general company purposes.
(d)Proceeds were used to pay down a portion of short-term debt and for general companycorporate purposes.
Duke Energy (Parent) Convertible Senior Notes
In April 2023, Duke Energy (Parent) completed the sale of $1.7 billion 4.125% Convertible Senior Notes due April 2026 (convertible notes). The convertible notes are senior unsecured obligations of Duke Energy, and will mature on April 15, 2026, unless earlier converted or repurchased in accordance with their terms. The convertible notes bear interest at a fixed rate of 4.125% per year, payable semiannually in arrears on April 15 and October 15 of each year, beginning on October 15, 2023. Proceeds were used to repay a portion of outstanding commercial paper and for general corporate purposes.
Prior to the close of business on the business day immediately preceding January 15, 2026, the convertible notes will be convertible at the option of the holders when the following conditions are met:
•during any calendar quarter commencing after the calendar quarter ending on June 30, 2023, (and only during such calendar quarter) if the last reported sale price of Duke Energy common stock for at least 20 trading days (whether or not consecutive) during a period of 30 consecutive trading days ending on, and including, the last trading day of the immediately preceding calendar quarter is greater than or equal to 130% of the conversion price on each applicable trading day;
•during the five consecutive business day period after any 10 consecutive trading day period (the measurement period) in which the trading price, as defined, per $1,000 principal amount of notes for each trading day of the measurement period was less than 98% of the product of the last reported sale price of Duke Energy common stock and the conversion rate on each such trading day; or
•upon the occurrence of specified corporate events described in the indenture agreement.
| | | | | |
FINANCIAL STATEMENTS | DEBT AND CREDIT FACILITIES |
On or after January 15, 2026, until the close of business on the second scheduled trading day immediately preceding the maturity date, holders of the convertible notes may convert all or any portion of their convertible notes at their option at any time at the conversion rate then in effect, irrespective of these conditions. Duke Energy will settle conversions of the convertible notes by paying cash up to the aggregate principal amount of the convertible notes to be converted and paying or delivering, as the case may be, cash, shares of Duke Energy's common stock, $0.001 par value per share, or a combination of cash and shares of its common stock, at its election, in respect of the remainder, if any, of its conversion obligation in excess of the aggregate principal amount of the convertible notes being converted.
The conversion rate for the convertible notes is initially 8.4131 shares of Duke Energy's common stock per $1,000 principal amount of convertible notes. The initial conversion price of the convertible notes represents a premium of approximately 25% over the last reported sale price of Duke Energy’s common stock on the NYSE on April 3, 2023. The conversion rate and the corresponding conversion price will not be adjusted for any accrued and unpaid interest but will be subject to adjustment in some instances, such as stock splits or share combinations, certain distributions to common stockholders, or tender offers at off-market rates. The changes in the conversion rates are intended to make convertible note holders whole for changes in the fair value of Duke Energy common stock resulting from such events. Duke Energy may not redeem the convertible notes prior to the maturity date.
Duke Energy issued the convertible notes pursuant to an indenture, dated as of April 6, 2023, by and between Duke Energy and The Bank of New York Mellon Trust Company, N.A., as trustee. The terms of the convertible notes include customary fundamental change provisions that require repayment of the notes with interest upon certain events, such as a stockholder approved plan of liquidation or if Duke Energy's common stock ceases to be listed on the NYSE.
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) | (in millions) | Maturity Date | | Interest Rate | | September 30, 2023 | (in millions) | Maturity Date | | Interest Rate | | March 31, 2024 |
Unsecured Debt | Unsecured Debt | |
Duke Energy Ohio(a) | October 2023 | | 5.813 | % | | $ | 150 | |
Duke Energy (Parent) | October 2023 | | 3.950 | % | | 400 | |
Duke Energy (Parent) Term Loan Facility(a) | March 2024 | | 6.048 | % | | 1,000 | |
Duke Energy (Parent) | April 2024 | | 3.750 | % | | 1,000 | |
Duke Energy Florida(a) | April 2024 | | 6.196 | % | | 800 | |
| Duke Energy (Parent) | |
| Other(b) | | 684 | |
Duke Energy (Parent) | |
| Duke Energy (Parent) | |
| Secured Debt | |
| Secured Debt | |
| Secured Debt | |
Duke Energy Florida(a) | |
Duke Energy Florida(a) | |
Duke Energy Florida(a) | |
Duke Energy Florida(a) | |
Duke Energy Carolinas(a) | |
First Mortgage Bonds | |
Duke Energy Florida(b) | |
Duke Energy Florida(b) | |
Duke Energy Florida(b) | |
| Other(c) | |
Other(c) | |
Other(c) | |
Current maturities of long-term debt | Current maturities of long-term debt | | $ | 4,034 | |
(a)Debt has a floating interest rate. In October 2023,April 2024, Duke Energy Kentucky's $50Florida repaid the $325 million two-year term loan facility was increased to $75 million and it's maturity was extended to April 2024. The term loan was fully drawn at the time of closing with incrementalin total borrowings outstanding under the DEFR accounts receivable securitization facility used to pay down short-term debtmaturing in April 2024 and terminated the facility. See Note 12 for general corporate purposes.additional information.
(b)While final maturity is October 2073, these first mortgage bonds are classified as Current maturities of long-term debt on the Consolidated Balance Sheets, based on terms of the indenture, which could require repayment in less than 12 months if exercised by the bondholders.
(c)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 2023,2024, Duke Energy amendedextended the termination date of its existing $9 billion Master Credit Facility of $9 billion to extend the termination date to March 2028.2029. 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. An amendment in conjunction with the issuance of the Convertible Senior Notes due April 2026 clarifies that payments due as a result of a conversion of a convertible note would not constitute an event of default.
| | | | | |
FINANCIAL STATEMENTS | DEBT AND CREDIT FACILITIES |
The table below includes the current borrowing sublimits and available capacity under these credit facilities.
| | September 30, 2023 |
| | Duke | | Duke | | Duke | | Duke | | Duke | | Duke | |
| Duke | | Energy | | Energy | | Energy | | Energy | | Energy | | Energy | |
| March 31, 2024 | | | March 31, 2024 |
| | | Duke | |
| Duke | |
| Duke | |
| Duke | |
(in millions) | |
(in millions) | |
(in millions) | (in millions) | Energy | | (Parent) | | Carolinas | | Progress | | Florida | | Ohio | | Indiana | | Piedmont | Energy | | (Parent) | | Carolinas | | Progress | | Florida | | Ohio | | Indiana | | Piedmont |
Facility size(a) | Facility size(a) | $ | 9,000 | | | $ | 2,275 | | | $ | 1,575 | | | $ | 1,400 | | | $ | 1,250 | | | $ | 750 | | | $ | 950 | | | $ | 800 | |
Reduction to backstop issuances | Reduction to backstop issuances | |
Commercial paper(b) | |
Commercial paper(b) | |
Commercial paper(b) | Commercial paper(b) | (2,815) | | | (106) | | | (631) | | | (841) | | | (292) | | | (298) | | | (350) | | | (297) | |
Outstanding letters of credit | Outstanding letters of credit | (39) | | | (27) | | | (4) | | | (1) | | | (7) | | | — | | | — | | | — | |
Tax-exempt bonds | Tax-exempt bonds | (81) | | | — | | | — | | | — | | | — | | | — | | | (81) | | | — | |
| Available capacity under the Master Credit Facility | Available capacity under the Master Credit Facility | $ | 6,065 | | | $ | 2,142 | | | $ | 940 | | | $ | 558 | | | $ | 951 | | | $ | 452 | | | $ | 519 | | | $ | 503 | |
Available capacity under the Master Credit Facility | |
Available capacity under the Master Credit Facility | |
(a)Represents the sublimit of each borrower.
(b)Duke Energy issued $625 million of commercial paper and loaned the proceeds through the money pool to Duke Energy Carolinas, Duke Energy Progress, Duke Energy Ohio and Duke Energy Indiana. The balances are classified as Long-Term Debt Payable to Affiliated Companies on the Condensed Consolidated Balance Sheets.
Other Credit Facilities
Duke Energy (Parent) Term Loan Facility
InOn March 2022,26, 2024, Duke Energy (Parent) entered into a Term Loan Credit Agreement (Credit Agreement)364-day term loan facility with commitments totaling $1.4 billion maturing March 2024. The maturity$700 million. Any undrawn commitments could be drawn up until April 25, 2024 (30 days after the effective date of the Credit Agreement mayagreement) or are otherwise ineligible to be extended for up to two years by request of Duke Energy (Parent), upon satisfaction of certain conditions contained in the Credit Agreement. Borrowingsdrawn. On April 24, 2024, $500 million was drawn under the facility werewith borrowings used to repay amounts drawn under the Three-Year Revolving Credit Facility and for general corporate purposes, including repaymentpurposes. Borrowings can be prepaid at any time throughout the term of a portionthe facility. The terms and conditions of the facility are generally consistent with those governing Duke Energy's outstanding commercial paper. The balance is classified as Current maturities of long-term debt on Duke Energy's Condensed Consolidated Balance Sheets.
In March 2023, Duke Energy amended its existingMaster Credit Agreement in conjunction with the issuance of the Convertible Senior Notes due April 2026 to clarify that payments due as a result of a conversion of a convertible note would not constitute an event of default.Facility.
7. ASSET RETIREMENT OBLIGATIONS
The Duke Energy Registrants record AROs when there is a legal obligation to incur retirement costs associated with the retirement of a long-lived asset and the obligation can be reasonably estimated. Actual costs incurred could be materially different from current estimates that form the basis of the recorded AROs.
The following table presents the AROs recorded on the Condensed Consolidated Balance Sheets.
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| September 30, 2023 |
| | | Duke | | | | Duke | | Duke | | Duke | | Duke | | |
| Duke | | Energy | | Progress | | Energy | | Energy | | Energy | | Energy | | |
(in millions) | Energy | | Carolinas | | Energy | | Progress | | Florida | | Ohio | | Indiana | | Piedmont |
Decommissioning of nuclear power facilities(a) | $ | 7,459 | | | $ | 3,136 | | | $ | 4,295 | | | $ | 4,069 | | | $ | 226 | | | $ | — | | | $ | — | | | $ | — | |
Closure of ash impoundments | 4,474 | | | 2,065 | | | 1,530 | | | 1,509 | | | 21 | | | 77 | | | 801 | | | — | |
Other | 300 | | | 67 | | | 105 | | | 44 | | | 61 | | | 61 | | | 41 | | | 28 | |
Total ARO | $ | 12,233 | | | $ | 5,268 | | | $ | 5,930 | | | $ | 5,622 | | | $ | 308 | | | $ | 138 | | | $ | 842 | | | $ | 28 | |
Less: Current portion | 620 | | | 238 | | | 261 | | | 260 | | | 1 | | | 8 | | | 114 | | | — | |
Total noncurrent ARO | $ | 11,613 | | | $ | 5,030 | | | $ | 5,669 | | | $ | 5,362 | | | $ | 307 | | | $ | 130 | | | $ | 728 | | | $ | 28 | |
(a)Duke Energy amount includes purchase accounting adjustments related to the merger with Progress Energy.
ARO Liability Rollforward
The following table presents the change in liability associated with AROs for the Duke Energy Registrants.
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| | | Duke | | | | Duke | | Duke | | Duke | | Duke | | |
| Duke | | Energy | | Progress | | Energy | | Energy | | Energy | | Energy | | |
(in millions) | Energy | | Carolinas | | Energy | | Progress | | Florida | | Ohio | | Indiana | | Piedmont |
Balance at December 31, 2022(a) | $ | 12,728 | | | $ | 5,382 | | | $ | 6,181 | | | $ | 5,823 | | | $ | 358 | | | $ | 154 | | | $ | 951 | | | $ | 26 | |
| | | | | | | | | | | | | | | |
Accretion expense(b) | 391 | | | 189 | | | 178 | | | 169 | | | 9 | | | 5 | | | 24 | | | 2 | |
Liabilities settled(c) | (494) | | | (171) | | | (247) | | | (196) | | | (51) | | | (11) | | | (66) | | | — | |
| | | | | | | | | | | | | | | |
Revisions in estimates of cash flows(d) | (392) | | | (132) | | | (182) | | | (174) | | | (8) | | | (10) | | | (67) | | | — | |
Balance at September 30, 2023 | $ | 12,233 | | | $ | 5,268 | | | $ | 5,930 | | | $ | 5,622 | | | $ | 308 | | | $ | 138 | | | $ | 842 | | | $ | 28 | |
| | | | | |
FINANCIAL STATEMENTS | ASSET RETIREMENT OBLIGATIONS |
(a)Primarily relates to decommissioning nuclear power facilities, closure of ash impoundments, asbestos removal, closure of landfills at fossil generation facilities, retirement of natural gas mains and removal of renewable energy generation assets.
(b)For the nine months ended September 30, 2023, substantially all accretion expense relates to Duke Energy's regulated operations and has been deferred in accordance with regulatory accounting treatment.
(c)Primarily relates to ash impoundment closures and nuclear decommissioning.
(d)The amounts recorded represent the discounted cash flows for estimated closure costs as evaluated on a site-by-site basis. The decreases primarily relate to lower unit costs associated with basin closure, routine maintenance and beneficiation activities, as well as a reduction in monitoring wells needed.
Asset retirement costs associated with the AROs for operating plants and retired plants are included in Net property, plant and equipment and Regulatory assets within Other Noncurrent Assets, respectively, on the Condensed Consolidated Balance Sheets.
8. GOODWILL
Duke Energy
Duke Energy's Goodwill balance of $19.3 billion is allocated $17.4 billion to EU&I and $1.9 billion to GU&I on Duke Energy's Condensed Consolidated Balance Sheets at September 30, 2023,March 31, 2024, and December 31, 2022.2023. There are no accumulated impairment charges.
Duke Energy Ohio
Duke Energy Ohio's Goodwill balance of $920 million, allocated $596 million to EU&I and $324 million to GU&I, is presented net of accumulated impairment charges of $216 million on the Condensed Consolidated Balance Sheets at September 30, 2023,March 31, 2024, and December 31, 2022.2023.
Progress Energy
Progress Energy's Goodwill is included in the EU&I segment and there are no accumulated impairment charges.
Piedmont
Piedmont's Goodwill is included in the GU&I segment and there are no accumulated impairment charges.
Impairment Testing
Duke Energy, Progress Energy, Duke Energy Ohio and Piedmont are required to perform an annual goodwill impairment test as of the same date each year and, accordingly, perform their annual impairment testing of goodwill as of August 31. Duke Energy, Progress Energy, Duke Energy Ohio and Piedmont update their test between annual tests if events or circumstances occur that would more likely than not reduce the fair value of a reporting unit below its carrying value. As the fair value for Duke Energy, Progress Energy, Duke Energy Ohio and Piedmont exceeded their respective carrying values at the date of the annual impairment analysis, no goodwill impairment charges were recorded in the third quarter of 2023.
| | | | | |
FINANCIAL STATEMENTS | RELATED PARTY TRANSACTIONS |
9.8. RELATED PARTY TRANSACTIONS
The Subsidiary Registrants engage in related party transactions in accordance with applicable state and federal commission regulations. Refer to the Condensed Consolidated Balance Sheets of the Subsidiary Registrants for balances due to or due from related parties. Material amounts related to transactionsTransactions with related parties included on the Condensed Consolidated Statements of Operations and Comprehensive Income are presented in the following table.
| | Three Months Ended September 30, | | Nine Months Ended September 30, |
| Three Months Ended March 31, | |
| Three Months Ended March 31, | |
| Three Months Ended March 31, | |
(in millions) | |
(in millions) | |
(in millions) | (in millions) | 2023 | | 2022 | | 2023 | | 2022 |
Duke Energy Carolinas | Duke Energy Carolinas | |
Duke Energy Carolinas | |
Duke Energy Carolinas | |
Corporate governance and shared service expenses(a) | |
Corporate governance and shared service expenses(a) | |
Corporate governance and shared service expenses(a) | Corporate governance and shared service expenses(a) | $ | 198 | | | $ | 193 | | | $ | 586 | | | $ | 590 | |
Indemnification coverages(b) | Indemnification coverages(b) | 9 | | | 7 | | | 26 | | | 21 | |
Joint Dispatch Agreement (JDA) revenue(c) | 5 | | | 16 | | | 26 | | | 54 | |
Indemnification coverages(b) | |
Indemnification coverages(b) | |
JDA revenue(c) | |
JDA revenue(c) | |
JDA revenue(c) | |
JDA expense(c) | |
JDA expense(c) | |
JDA expense(c) | JDA expense(c) | 58 | | | 210 | | | 121 | | | 477 | |
Intercompany natural gas purchases(d) | Intercompany natural gas purchases(d) | 5 | | | 5 | | | 14 | | | 14 | |
Intercompany natural gas purchases(d) | |
Intercompany natural gas purchases(d) | |
Progress Energy | |
Progress Energy | |
Progress Energy | Progress Energy | |
Corporate governance and shared service expenses(a) | Corporate governance and shared service expenses(a) | $ | 172 | | | $ | 188 | | | $ | 522 | | | $ | 568 | |
Corporate governance and shared service expenses(a) | |
Corporate governance and shared service expenses(a) | |
Indemnification coverages(b) | |
Indemnification coverages(b) | |
Indemnification coverages(b) | Indemnification coverages(b) | 11 | | | 10 | | | 35 | | | 32 | |
JDA revenue(c) | JDA revenue(c) | 58 | | | 210 | | | 121 | | | 477 | |
JDA revenue(c) | |
JDA revenue(c) | |
JDA expense(c) | |
JDA expense(c) | |
JDA expense(c) | JDA expense(c) | 5 | | | 16 | | | 26 | | | 54 | |
Intercompany natural gas purchases(d) | Intercompany natural gas purchases(d) | 19 | | | 19 | | | 56 | | | 57 | |
Intercompany natural gas purchases(d) | |
Intercompany natural gas purchases(d) | |
Duke Energy Progress | |
Duke Energy Progress | |
Duke Energy Progress | Duke Energy Progress | |
Corporate governance and shared service expenses(a) | Corporate governance and shared service expenses(a) | $ | 103 | | | $ | 111 | | | $ | 314 | | | $ | 338 | |
Corporate governance and shared service expenses(a) | |
Corporate governance and shared service expenses(a) | |
Indemnification coverages(b) | |
Indemnification coverages(b) | |
Indemnification coverages(b) | Indemnification coverages(b) | 5 | | | 5 | | | 15 | | | 15 | |
JDA revenue(c) | JDA revenue(c) | 58 | | | 210 | | | 121 | | | 477 | |
JDA revenue(c) | |
JDA revenue(c) | |
JDA expense(c) | |
JDA expense(c) | |
JDA expense(c) | JDA expense(c) | 5 | | | 16 | | | 26 | | | 54 | |
Intercompany natural gas purchases(d) | Intercompany natural gas purchases(d) | 19 | | | 19 | | | 56 | | | 57 | |
Intercompany natural gas purchases(d) | |
Intercompany natural gas purchases(d) | |
Duke Energy Florida | |
Duke Energy Florida | |
Duke Energy Florida | Duke Energy Florida | |
Corporate governance and shared service expenses(a) | Corporate governance and shared service expenses(a) | $ | 69 | | | $ | 77 | | | $ | 208 | | | $ | 230 | |
Corporate governance and shared service expenses(a) | |
Corporate governance and shared service expenses(a) | |
Indemnification coverages(b) | |
Indemnification coverages(b) | |
Indemnification coverages(b) | Indemnification coverages(b) | 6 | | | 5 | | | 20 | | | 17 | |
Duke Energy Ohio | Duke Energy Ohio | |
Duke Energy Ohio | |
Duke Energy Ohio | |
Corporate governance and shared service expenses(a) | |
Corporate governance and shared service expenses(a) | |
Corporate governance and shared service expenses(a) | Corporate governance and shared service expenses(a) | $ | 73 | | | $ | 87 | | | $ | 222 | | | $ | 251 | |
Indemnification coverages(b) | Indemnification coverages(b) | 1 | | | 2 | | | 4 | | | 4 | |
Indemnification coverages(b) | |
Indemnification coverages(b) | |
Duke Energy Indiana | |
Duke Energy Indiana | |
Duke Energy Indiana | Duke Energy Indiana | |
Corporate governance and shared service expenses(a) | Corporate governance and shared service expenses(a) | $ | 92 | | | $ | 115 | | | $ | 275 | | | $ | 330 | |
Corporate governance and shared service expenses(a) | |
Corporate governance and shared service expenses(a) | |
Indemnification coverages(b) | |
Indemnification coverages(b) | |
Indemnification coverages(b) | Indemnification coverages(b) | 2 | | | 2 | | | 6 | | | 6 | |
Piedmont | Piedmont | |
Piedmont | |
Piedmont | |
Corporate governance and shared service expenses(a) | |
Corporate governance and shared service expenses(a) | |
Corporate governance and shared service expenses(a) | Corporate governance and shared service expenses(a) | $ | 32 | | | $ | 37 | | | $ | 107 | | | $ | 109 | |
Indemnification coverages(b) | Indemnification coverages(b) | 1 | | | 1 | | | 3 | | | 2 | |
Indemnification coverages(b) | |
Indemnification coverages(b) | |
Intercompany natural gas sales(d) | |
Intercompany natural gas sales(d) | |
Intercompany natural gas sales(d) | Intercompany natural gas sales(d) | 24 | | | 24 | | | 70 | | | 71 | |
Natural gas storage and transportation costs(e) | Natural gas storage and transportation costs(e) | 6 | | | 6 | | | 18 | | | 17 | |
Natural gas storage and transportation costs(e) | |
Natural gas storage and transportation costs(e) | |
(a)The Subsidiary Registrants are charged their proportionate share of corporate governance and other shared services costs, primarily related to human resources, employee benefits, information technology, legal and accounting fees, as well as other third-party costs. These amounts are primarily recorded in Operation, maintenance and other and Impairment of assets and other charges on the Condensed Consolidated Statements of Operations and Comprehensive Income.
(b)The Subsidiary Registrants incur expenses related to certain indemnification coverages through Bison, Duke Energy’s wholly owned captive insurance subsidiary. These expenses are recorded in Operation, maintenance and other on the Condensed Consolidated Statements of Operations and Comprehensive Income.
(c)Duke Energy Carolinas and Duke Energy Progress participate in a JDA, which allows the collective dispatch of power plants between the service territories to reduce customer rates. Revenues from the sale of power and expenses from the purchase of power pursuant to the JDA are recorded in Operating Revenues and Fuel used in electric generation and purchased power, respectively, on the Condensed Consolidated Statements of Operations and Comprehensive Income.
(d)Piedmont provides long-term natural gas delivery service to certain Duke Energy Carolinas and Duke Energy Progress natural gas-fired generation facilities. Piedmont records the sales in Operating Revenues, and Duke Energy Carolinas and Duke Energy Progress record the related purchases as a component of Fuel used in electric generation and purchased power on their respective Condensed Consolidated Statements of Operations and Comprehensive Income.
(e)Piedmont has related party transactions as a customer of its equity method investments in Pine Needle LNG Company, LLC, Hardy Storage Company, LLC and Cardinal Pipeline Company, LLC natural gas storage and transportation facilities. These expenses are included in Cost of natural gas on Piedmont's Condensed Consolidated Statements of Operations and Comprehensive Income.
| | | | | |
FINANCIAL STATEMENTS | RELATED PARTY TRANSACTIONS |
In addition to the amounts presented above, the Subsidiary Registrants have other affiliate transactions, including rental of office space, participation in a money pool arrangement, other operational transactions, such as pipeline lease arrangements, and their proportionate share of certain charged expenses. These transactions of the Subsidiary Registrants are incurred in the ordinary course of business and are eliminated in consolidation.
As discussed in Note 13,12, certain trade receivables have beenwere previously sold by Duke Energy Ohio and Duke Energy Indiana to CRC, an affiliate formed by a subsidiary of Duke Energy. The proceeds obtained from the sales of receivables arewere largely cash but do includeincluded a subordinated note from CRC for a portion of the purchase price. In March 2024, Duke Energy repaid all outstanding CRC borrowings and terminated the related CRC credit facility.
Intercompany Income Taxes
Duke Energy and the Subsidiary Registrants file a consolidated federal income tax return and other state and jurisdictional returns. The Subsidiary Registrants have a tax sharing agreement with Duke Energy for the allocation of consolidated tax liabilities and benefits. Income taxes recorded represent amounts the Subsidiary Registrants would incur as separate C-Corporations. The following table includes the balance of intercompany income tax receivables and payables for the Subsidiary Registrants.
| | Duke | | Duke | |
| Energy | Progress | Energy | |
| Duke | |
| Energy | |
| Energy | |
| Energy | |
(in millions) | (in millions) | Carolinas | Energy | Progress | Florida | Ohio | Indiana | Piedmont |
September 30, 2023 | |
(in millions) | |
(in millions) | | Carolinas | Energy | Progress | Florida | Ohio | Indiana | Piedmont |
March 31, 2024 | |
Intercompany income tax receivable | |
Intercompany income tax receivable | |
Intercompany income tax receivable | Intercompany income tax receivable | $ | — | | $ | — | | $ | — | | $ | — | | $ | — | | $ | — | | $ | 24 | |
Intercompany income tax payable | Intercompany income tax payable | 72 | | 138 | | 114 | | 110 | | 18 | | 20 | | — | |
| December 31, 2022 | |
December 31, 2023 | |
December 31, 2023 | |
December 31, 2023 | |
Intercompany income tax receivable | |
Intercompany income tax receivable | |
Intercompany income tax receivable | Intercompany income tax receivable | $ | — | | $ | 95 | | $ | 36 | | $ | 17 | | $ | — | | $ | — | | $ | — | |
Intercompany income tax payable | Intercompany income tax payable | 37 | | — | | — | | — | | 17 | | 18 | | 38 | |
10.9. DERIVATIVES AND HEDGING
The Duke Energy Registrants use commodity, interest rate and foreign currency contracts to manage commodity price risk, interest rate risk and foreign currency exchange rate risk. The primary use of commodity derivatives is to hedge the generation portfolio against changes in the prices of electricity and natural gas. Piedmont enters into natural gas supply contracts to provide diversification, reliability and natural gas cost benefits to its customers. Interest rate derivatives are used to manage interest rate risk associated with borrowings. Foreign currency derivatives are used to manage risk related to foreign currency exchange rates on certain issuances of debt. Derivatives related to interest rate risk for the Commercial Renewables Disposal Groups are now classified as held for sale and are excluded from the following disclosures. See Note 2 for further information.
All derivative instruments not identified as NPNS are recorded at fair value as assets or liabilities on the Condensed Consolidated Balance Sheets. Cash collateral related to derivative instruments executed under master netting arrangements is offset against the collateralized derivatives on the Condensed Consolidated Balance Sheets. The cash impacts of settled derivatives are recorded as operating activities or financing activities on the Condensed Consolidated Statements of Cash Flows consistent with the classification of the hedged transaction.
INTEREST RATE RISK
The Duke Energy Registrants are exposed to changes in interest rates as a result of their issuance or anticipated issuance of variable-rate and fixed-rate debt and commercial paper. Interest rate risk is managed by limiting variable-rate exposures to a percentage of total debt and by monitoring changes in interest rates. To manage risk associated with changes in interest rates, the Duke Energy Registrants may enter into interest rate swaps, U.S. Treasury lock agreements and other financial contracts. In anticipation of certain fixed-rate debt issuances, a series of forward-starting interest rate swaps or Treasury locks may be executed to lock in components of current market interest rates. These instruments are later terminated prior to or upon the issuance of the corresponding debt.
Cash Flow Hedges
For a derivative designated as hedging the exposure to variable cash flows of a future transaction, referred to as a cash flow hedge, the effective portion of the derivative's gain or loss is initially reported as a component of other comprehensive income and subsequently reclassified into earnings once the future transaction impacts earnings. Amounts for interest rate contracts are reclassified to earnings as interest expense over the term of the related debt. Gains and losses reclassified out of accumulated other comprehensive income (loss) for the three and nine months ended September 30,March 31, 2024, and 2023, and 2022, were not material. Duke Energy's interest rate derivatives designated as hedges include forward-starting interest rate swaps not accounted for under regulatory accounting.
Undesignated Contracts
Undesignated contracts primarily include contracts not designated as a hedge because they are accounted for under regulatory accounting or contracts that do not qualify for hedge accounting.
Duke Energy’s interest rate swaps for its regulated operations employ regulatory accounting. With regulatory accounting, the mark-to-market gains or losses on the swaps are deferred as regulatory liabilities or regulatory assets, respectively. Regulatory assets and liabilities are amortized consistent with the treatment of the related costs in the ratemaking process. The accrual of interest on the swaps is recorded as Interest Expense on the Duke Energy Registrant's Condensed Consolidated Statements of Operations and Comprehensive Income.
| | | | | |
FINANCIAL STATEMENTS | DERIVATIVES AND HEDGING |
The following tables show notional amounts of outstanding derivatives related to interest rate risk.
| | September 30, 2023 |
| | Duke | | Duke | | Duke | | Duke | | Duke |
| Duke | | Energy | | Progress | | Energy | | Energy | | Energy | | Energy |
| March 31, 2024 | | | March 31, 2024 |
| | | Duke | | | | | Duke | | | | Duke | | Duke |
| Duke | | | Duke | | Energy | | Progress | | Energy |
(in millions) | (in millions) | Energy | | Carolinas | | Energy | | Progress | | Florida | | Indiana | | Ohio | (in millions) | Energy | | Carolinas | | Energy | | Progress | | Florida | | Indiana | | Ohio |
Cash flow hedges | Cash flow hedges | $ | 1,875 | | | $ | — | | | $ | — | | | $ | — | | | $ | — | | | $ | — | | | $ | — | |
Undesignated contracts | Undesignated contracts | 2,477 | | | 650 | | | 1,500 | | | 500 | | | 1,000 | | | 300 | | | 27 | |
Total notional amount | Total notional amount | $ | 4,352 | | | $ | 650 | | | $ | 1,500 | | | $ | 500 | | | $ | 1,000 | | | $ | 300 | | | $ | 27 | |
| | December 31, 2022 |
| | Duke | | Duke | | Duke | | Duke | | Duke |
| Duke | | Energy | | Progress | | Energy | | Energy | | Energy | | Energy |
| December 31, 2023 | | | December 31, 2023 |
| | | Duke | | | | | Duke | | | | Duke | | Duke |
| Duke | | | Duke | | Energy | | Progress | | Energy |
(in millions) | (in millions) | Energy | | Carolinas | | Energy | | Progress | | Florida | | Indiana | | Ohio | (in millions) | Energy | | Carolinas | | Energy | | Progress | | Florida | | Indiana | | Ohio |
Cash flow hedges | Cash flow hedges | $ | 500 | | | $ | — | | | $ | — | | | $ | — | | | $ | — | | | $ | — | | | $ | — | |
Undesignated contracts | Undesignated contracts | 2,377 | | | 1,250 | | | 800 | | | 500 | | | 300 | | | 300 | | | 27 | |
Total notional amount | Total notional amount | $ | 2,877 | | | $ | 1,250 | | | $ | 800 | | | $ | 500 | | | $ | 300 | | | $ | 300 | | | $ | 27 | |
COMMODITY PRICE RISK
The Duke Energy Registrants are exposed to the impact of changes in the prices of electricity purchased and sold in bulk power markets and natural gas purchases, including Piedmont's natural gas supply contracts. Exposure to commodity price risk is influenced by a number of factors including the term of contracts, the liquidity of markets and delivery locations. To manage risk associated with commodity prices, the Duke Energy Registrants may enter into long-term power purchase or sales contracts and long-term natural gas supply agreements.
Undesignated Contracts
Undesignated contracts primarily include contracts not designated as a hedge because they are accounted for under regulatory accounting or contracts that do not qualify for hedge accounting.
For the Subsidiary Registrants, bulk power electricity and natural gas purchases flow through fuel adjustment clauses, formula-based contracts or other cost-sharing mechanisms. Differences between the costs included in rates and the incurred costs, including undesignated derivative contracts, are largely deferred as regulatory assets or regulatory liabilities. Piedmont policies allow for the use of financial instruments to hedge commodity price risks. The strategy and objective of these hedging programs are to use the financial instruments to reduce natural gas cost volatility for customers.
Volumes
The tables below include volumes of outstanding commodity derivatives. Amounts disclosed represent the absolute value of notional volumes of commodity contracts excluding NPNS. The Duke Energy Registrants have netted contractual amounts where offsetting purchase and sale contracts exist with identical delivery locations and times of delivery. Where all commodity positions are perfectly offset, no quantities are shown.
| | September 30, 2023 |
| | Duke | | Duke | | | Duke | | Duke | |
| Duke | | Energy | | Progress | | Energy | | | Energy | | Energy | |
| Energy | | Carolinas | | Energy | | Progress | | | Ohio | | Indiana | | Piedmont |
| March 31, 2024 | |
| March 31, 2024 | |
| March 31, 2024 | |
| | | Duke | |
| Duke | |
| Duke | |
| Duke | |
| Energy | |
| Energy | |
| Energy | | | Carolinas | | Energy | | Progress | | | | Ohio | | Indiana | | Piedmont |
Electricity (GWh) | Electricity (GWh) | 20,961 | | | — | | | — | | | — | | | | 2,550 | | | 18,411 | | | — | |
Natural gas (millions of dekatherms) | Natural gas (millions of dekatherms) | 841 | | | 276 | | | 272 | | | 272 | | | | — | | | 21 | | | 272 | |
| | December 31, 2022 |
| | Duke | | Duke | | | Duke | | Duke | |
| Duke | | Energy | | Progress | | Energy | | | Energy | | Energy | |
| Energy | | Carolinas | | Energy | | Progress | | | Ohio | | Indiana | | Piedmont |
| December 31, 2023 | |
| December 31, 2023 | |
| December 31, 2023 | |
| | | Duke | |
| Duke | |
| Duke | |
| Duke | |
| Energy | |
| Energy | |
| Energy | | | Carolinas | | Energy | | Progress | | | | Ohio | | Indiana | | Piedmont |
Electricity (GWh) | Electricity (GWh) | 14,086 | | | — | | | — | | | — | | | | 1,820 | | | 12,266 | | | — | |
Natural gas (millions of dekatherms) | Natural gas (millions of dekatherms) | 909 | | | 307 | | | 292 | | | 292 | | | | — | | | 11 | | | 299 | |
FOREIGN CURRENCY RISK
Duke Energy may enter into foreign currency derivatives to hedge exposure to changes in foreign currency exchange rates, such as that arising from the issuance of debt denominated in a currency other than U.S. dollars.
| | | | | |
FINANCIAL STATEMENTS | DERIVATIVES AND HEDGING |
Fair Value Hedges
Derivatives related to existing fixed-rate securities are accounted for as fair value hedges, where the derivatives’ fair value gains or losses and hedged items’ fair value gains or losses are both recorded directly to earnings on the same income statement line item, including foreign currency gains or losses arising from changes in the U.S. currency exchange rates. Duke Energy has elected to exclude the cross-currency basis spread from the assessment of effectiveness in the fair value hedges of its foreign currency risk and record any difference between the change in the fair value of the excluded components and the amounts recognized in earnings as a component of other comprehensive income or loss.
The following table shows Duke Energy's outstanding derivatives related to foreign currency risk at September 30, 2023.March 31, 2024.
| | | | Fair Value Loss(a) |
| (in millions) |
| Pay Notional | | Receive Notional | Receive | Hedge | Three Months Ended September 30, | | Nine Months Ended September 30, | |
| (in millions) | Pay Rate | (in millions) | Rate | Maturity Date | 2023 | 2022 | | 2023 | 2022 | |
| | | | | | | | Fair Value Gain (Loss)(a) | |
| | | | | | | | Fair Value Gain (Loss)(a) | |
| | | | | | | | Fair Value Gain (Loss)(a) | |
| | | | | | | | | (in millions) | | | | | | | | | | | (in millions) |
| Pay Notional | |
| (in millions) | |
| (in millions) | |
| (in millions) | |
Fair value hedges | Fair value hedges | | |
| $ | 645 | | 4.75 | % | 600 | | euros | 3.10 | % | June 2028 | $ | (20) | | $ | (41) | | | $ | (10) | | $ | (57) | | |
| 537 | | 5.31 | % | 500 | | euros | 3.85 | % | June 2034 | (17) | | (34) | | | (9) | | (47) | | |
Fair value hedges | |
Fair value hedges | |
| $ | |
| $ | |
| $ | |
| 537 | |
| 537 | |
| 537 | |
Total notional amount | Total notional amount | $ | 1,182 | | | 1,100 | | euros | | $ | (37) | | $ | (75) | | | $ | (19) | | $ | (104) | | |
Total notional amount | |
Total notional amount | |
(a) Amounts are recorded in Other Income and expenses, net on the Condensed Consolidated Statement of Operations, which offsets an equal translation adjustment of the foreign denominated debt. See the Condensed Consolidated Statements of Comprehensive Income for amounts excluded from the assessment of effectiveness for which the difference between changes in fair value and periodic amortization is recorded.
In April 2024, Duke Energy issued 750 million euros aggregate principal amount of 3.75% senior notes due 2031. The notes were effectively converted to fixed-rate U.S. dollars at issuance for $815 million at 5.648%. See Note 6 for additional information.
LOCATION AND FAIR VALUE OF DERIVATIVE ASSETS AND LIABILITIES RECOGNIZED IN THE CONDENSEDCONDENSED CONSOLIDATED BALANCE SHEETS
The following tables show the fair value and balance sheet location of derivative instruments. Although derivatives subject to master netting arrangements are netted on the Condensed Consolidated Balance Sheets, the fair values presented below are shown gross and cash collateral on the derivatives has not been netted against the fair values shown.
| Derivative Assets | Derivative Assets | | September 30, 2023 | Derivative Assets | | March 31, 2024 |
| Duke | | Duke | | Duke | | Duke | | Duke | |
| Duke | | Energy | | Progress | | Energy | | Energy | | Energy | | Energy | |
| | | | Duke | |
| | Duke | |
| | Duke | |
| | Duke | |
(in millions) | |
(in millions) | |
(in millions) | (in millions) | | Energy | | Carolinas | | Energy | | Progress | | Florida | | Ohio | | Indiana | | Piedmont | | Energy | | Carolinas | | Energy | | Progress | | Florida | | Ohio | | Indiana | | Piedmont |
Commodity Contracts | Commodity Contracts | |
| Not Designated as Hedging Instruments | Not Designated as Hedging Instruments | |
| Not Designated as Hedging Instruments | |
| Not Designated as Hedging Instruments | |
Current | |
Current | |
Current | Current | | $ | 57 | | | $ | 11 | | | $ | 14 | | | $ | 9 | | | $ | 5 | | | $ | 2 | | | $ | 28 | | | $ | 1 | |
Noncurrent | Noncurrent | | 86 | | | 40 | | | 46 | | | 46 | | | — | | | — | | | — | | | — | |
Total Derivative Assets – Commodity Contracts | Total Derivative Assets – Commodity Contracts | | $ | 143 | | | $ | 51 | | | $ | 60 | | | $ | 55 | | | $ | 5 | | | $ | 2 | | | $ | 28 | | | $ | 1 | |
Interest Rate Contracts | Interest Rate Contracts | |
Designated as Hedging Instruments | Designated as Hedging Instruments | |
Designated as Hedging Instruments | |
Designated as Hedging Instruments | |
Current | |
Current | |
Current | |
Noncurrent | |
Not Designated as Hedging Instruments | |
| Noncurrent | Noncurrent | | 177 | | | — | | | — | | | — | | | — | | | — | | | — | | | — | |
Not Designated as Hedging Instruments | |
Current | | 104 | | | 26 | | | 78 | | | — | | | 78 | | | — | | | — | | | — | |
| Noncurrent | |
| Noncurrent | Noncurrent | | 101 | | | 16 | | | 58 | | | 24 | | | 34 | | | — | | | 27 | | | — | |
Total Derivative Assets – Interest Rate Contracts | Total Derivative Assets – Interest Rate Contracts | | $ | 382 | | | $ | 42 | | | $ | 136 | | | $ | 24 | | | $ | 112 | | | $ | — | | | $ | 27 | | | $ | — | |
Foreign Currency Contracts | |
Designated as Hedging Instruments | |
Designated as Hedging Instruments | |
Designated as Hedging Instruments | |
| Noncurrent | |
| Noncurrent | |
| Noncurrent | |
| Total Derivative Assets – Foreign Currency Contracts | |
| Total Derivative Assets – Foreign Currency Contracts | |
| Total Derivative Assets – Foreign Currency Contracts | |
Total Derivative Assets | Total Derivative Assets | | $ | 525 | | | $ | 93 | | | $ | 196 | | | $ | 79 | | | $ | 117 | | | $ | 2 | | | $ | 55 | | | $ | 1 | |
| | | | | |
FINANCIAL STATEMENTS | DERIVATIVES AND HEDGING |
| Derivative Liabilities | Derivative Liabilities | | September 30, 2023 | Derivative Liabilities | | March 31, 2024 |
| Duke | | Duke | | Duke | | Duke | | Duke | |
| Duke | | Energy | | Progress | | Energy | | Energy | | Energy | | Energy | |
| | | | Duke | |
| | Duke | |
| | Duke | |
| | Duke | |
(in millions) | |
(in millions) | |
(in millions) | (in millions) | | Energy | | Carolinas | | Energy | | Progress | | Florida | | Ohio | | Indiana | | Piedmont | | Energy | | Carolinas | | Energy | | Progress | | Florida | | Ohio | | Indiana | | Piedmont |
Commodity Contracts | Commodity Contracts | |
| Not Designated as Hedging Instruments | Not Designated as Hedging Instruments | |
Current | | $ | 275 | | | $ | 156 | | | $ | 97 | | | $ | 97 | | | $ | — | | | $ | — | | | $ | 4 | | | $ | 18 | |
Noncurrent | | 215 | | | 48 | | | 40 | | | 40 | | | — | | | — | | | — | | | 127 | |
Total Derivative Liabilities – Commodity Contracts | | $ | 490 | | | $ | 204 | | | $ | 137 | | | $ | 137 | | | $ | — | | | $ | — | | | $ | 4 | | | $ | 145 | |
Interest Rate Contracts | |
| Not Designated as Hedging Instruments | Not Designated as Hedging Instruments | |
| | Not Designated as Hedging Instruments | |
Current | |
Current | |
Current | |
Noncurrent | |
Total Derivative Liabilities – Commodity Contracts | |
Interest Rate Contracts | |
Designated as Hedging Instruments | |
Designated as Hedging Instruments | |
Designated as Hedging Instruments | |
Current | |
Current | |
Current | |
Noncurrent | |
Not Designated as Hedging Instruments | |
| Noncurrent | |
| Noncurrent | |
| Noncurrent | Noncurrent | | 1 | | | — | | | — | | | — | | | — | | | 1 | | | — | | | — | |
Total Derivative Liabilities – Interest Rate Contracts | Total Derivative Liabilities – Interest Rate Contracts | | $ | 1 | | | $ | — | | | $ | — | | | $ | — | | | $ | — | | | $ | 1 | | | $ | — | | | $ | — | |
Foreign Currency Contracts | Foreign Currency Contracts | |
Designated as Hedging Instruments | Designated as Hedging Instruments | |
Designated as Hedging Instruments | |
Designated as Hedging Instruments | |
Current | Current | | $ | 18 | | | $ | — | | | $ | — | | | $ | — | | | $ | — | | | $ | — | | | $ | — | | | $ | — | |
Noncurrent | | 11 | | | — | | | — | | | — | | | — | | | — | | | — | | | — | |
Current | |
Current | |
| Total Derivative Liabilities – Foreign Currency Contracts | |
| Total Derivative Liabilities – Foreign Currency Contracts | |
| Total Derivative Liabilities – Foreign Currency Contracts | Total Derivative Liabilities – Foreign Currency Contracts | | $ | 29 | | | $ | — | | | $ | — | | | $ | — | | | $ | — | | | $ | — | | | $ | — | | | $ | — | |
Total Derivative Liabilities | Total Derivative Liabilities | | $ | 520 | | | $ | 204 | | | $ | 137 | | | $ | 137 | | | $ | — | | | $ | 1 | | | $ | 4 | | | $ | 145 | |
| Derivative Assets | Derivative Assets | | December 31, 2022 | Derivative Assets | | December 31, 2023 |
| Duke | | Duke | | Duke | | Duke | | Duke | |
| Duke | | Energy | | Progress | | Energy | | Energy | | Energy | | Energy | |
| | | | Duke | |
| | Duke | |
| | Duke | |
| | Duke | |
(in millions) | |
(in millions) | |
(in millions) | (in millions) | | Energy | | Carolinas | | Energy | | Progress | | Florida | | Ohio | | Indiana | | Piedmont | | Energy | | Carolinas | | Energy | | Progress | | Florida | | Ohio | | Indiana | | Piedmont |
Commodity Contracts | Commodity Contracts | |
| Not Designated as Hedging Instruments | Not Designated as Hedging Instruments | |
| Not Designated as Hedging Instruments | |
| Not Designated as Hedging Instruments | |
Current | |
Current | |
Current | Current | | $ | 265 | | | $ | 132 | | | $ | 99 | | | $ | 99 | | | $ | — | | | $ | 5 | | | $ | 29 | | | $ | — | |
Noncurrent | Noncurrent | | 213 | | | 104 | | | 108 | | | 108 | | | — | | | — | | | — | | | — | |
Total Derivative Assets – Commodity Contracts | Total Derivative Assets – Commodity Contracts | | $ | 478 | | | $ | 236 | | | $ | 207 | | | $ | 207 | | | $ | — | | | $ | 5 | | | $ | 29 | | | $ | — | |
Interest Rate Contracts | Interest Rate Contracts | |
Designated as Hedging Instruments | Designated as Hedging Instruments | |
Designated as Hedging Instruments | |
Designated as Hedging Instruments | |
Current | Current | | $ | 101 | | | $ | — | | | $ | — | | | $ | — | | | $ | — | | | $ | — | | | $ | — | | | $ | — | |
| Current | |
Current | |
Noncurrent | |
Not Designated as Hedging Instruments | Not Designated as Hedging Instruments | |
Current | Current | | $ | 216 | | | $ | 94 | | | $ | 41 | | | $ | 23 | | | $ | 17 | | | $ | — | | | $ | 81 | | | $ | — | |
Current | |
Current | |
Noncurrent | |
Total Derivative Assets – Interest Rate Contracts | |
Foreign Currency Contracts | |
Designated as Hedging Instruments | |
Designated as Hedging Instruments | |
Designated as Hedging Instruments | |
| Total Derivative Assets – Interest Rate Contracts | | $ | 317 | | | $ | 94 | | | $ | 41 | | | $ | 23 | | | $ | 17 | | | $ | — | | | $ | 81 | | | $ | — | |
Noncurrent | |
| Noncurrent | |
| Noncurrent | |
| Total Derivative Assets – Foreign Currency Contracts | |
| Total Derivative Assets – Foreign Currency Contracts | |
| Total Derivative Assets – Foreign Currency Contracts | |
Total Derivative Assets | Total Derivative Assets | | $ | 795 | | | $ | 330 | | | $ | 248 | | | $ | 230 | | | $ | 17 | | | $ | 5 | | | $ | 110 | | | $ | — | |
| | | | | |
FINANCIAL STATEMENTS | DERIVATIVES AND HEDGING |
| Derivative Liabilities | Derivative Liabilities | | December 31, 2022 | Derivative Liabilities | | December 31, 2023 |
| Duke | | Duke | | Duke | | Duke | | Duke | |
| Duke | | Energy | | Progress | | Energy | | Energy | | Energy | | Energy | |
| | | | Duke | |
| | Duke | |
| | Duke | |
| | Duke | |
(in millions) | |
(in millions) | |
(in millions) | (in millions) | | Energy | | Carolinas | | Energy | | Progress | | Florida | | Ohio | | Indiana | | Piedmont | | Energy | | Carolinas | | Energy | | Progress | | Florida | | Ohio | | Indiana | | Piedmont |
Commodity Contracts | Commodity Contracts | |
| Not Designated as Hedging Instruments | Not Designated as Hedging Instruments | |
Current | | $ | 175 | | | $ | 96 | | | $ | 36 | | | $ | 18 | | | $ | 19 | | | $ | — | | | $ | 16 | | | $ | 27 | |
Noncurrent | | 202 | | | 31 | | | 30 | | | 30 | | | — | | | — | | | — | | | 141 | |
Total Derivative Liabilities – Commodity Contracts | | $ | 377 | | | $ | 127 | | | $ | 66 | | | $ | 48 | | | $ | 19 | | | $ | — | | | $ | 16 | | | $ | 168 | |
Interest Rate Contracts | |
| Not Designated as Hedging Instruments | Not Designated as Hedging Instruments | |
| | Not Designated as Hedging Instruments | |
Current | |
Current | |
Current | |
Noncurrent | |
Total Derivative Liabilities – Commodity Contracts | |
Interest Rate Contracts | |
Designated as Hedging Instruments | |
Designated as Hedging Instruments | |
Designated as Hedging Instruments | |
Current | |
Current | |
Current | |
Noncurrent | |
Not Designated as Hedging Instruments | |
Current | |
Current | |
Current | |
Noncurrent | Noncurrent | | $ | 2 | | | $ | — | | | $ | — | | | $ | — | | | $ | — | | | $ | 2 | | | $ | — | | | $ | — | |
Total Derivative Liabilities – Interest Rate Contracts | Total Derivative Liabilities – Interest Rate Contracts | | $ | 2 | | | $ | — | | | $ | — | | | $ | — | | | $ | — | | | $ | 2 | | | $ | — | | | $ | — | |
Foreign Currency Contracts | Foreign Currency Contracts | |
Designated as Hedging Instruments | Designated as Hedging Instruments | |
Designated as Hedging Instruments | |
Designated as Hedging Instruments | |
Current | Current | | $ | 18 | | | $ | — | | | $ | — | | | $ | — | | | $ | — | | | $ | — | | | $ | — | | | $ | — | |
Noncurrent | | 40 | | | — | | | — | | | — | | | — | | | — | | | — | | | — | |
Current | |
Current | |
| Total Derivative Liabilities – Equity Securities Contracts | | $ | 58 | | | $ | — | | | $ | — | | | $ | — | | | $ | — | | | $ | — | | | $ | — | | | $ | — | |
| Total Derivative Liabilities – Foreign Currency Contracts | |
| Total Derivative Liabilities – Foreign Currency Contracts | |
| Total Derivative Liabilities – Foreign Currency Contracts | |
Total Derivative Liabilities | Total Derivative Liabilities | | $ | 437 | | | $ | 127 | | | $ | 66 | | | $ | 48 | | | $ | 19 | | | $ | 2 | | | $ | 16 | | | $ | 168 | |
OFFSETTING ASSETS AND LIABILITIES
The following tables present the line items on the Condensed Consolidated Balance Sheets where derivatives are reported. Substantially all of Duke Energy's outstanding derivative contracts are subject to enforceable master netting arrangements. The amounts shown are calculated by counterparty. Accounts receivable or accounts payable may also be available to offset exposures in the event of bankruptcy. These amounts are not included in the tables below.
| Derivative Assets | Derivative Assets | | September 30, 2023 | Derivative Assets | | March 31, 2024 |
| Duke | | Duke | | Duke | | Duke | | Duke | |
| Duke | | Energy | | Progress | | Energy | | Energy | | Energy | | Energy | |
| | | | Duke | |
| | Duke | |
| | Duke | |
| | Duke | |
(in millions) | |
(in millions) | |
(in millions) | (in millions) | | Energy | | Carolinas | | Energy | | Progress | | Florida | | Ohio | | Indiana | | Piedmont | | Energy | | Carolinas | | Energy | | Progress | | Florida | | Ohio | | Indiana | | Piedmont |
Current | Current | |
Gross amounts recognized | |
Gross amounts recognized | |
Gross amounts recognized | Gross amounts recognized | | $ | 161 | | | $ | 37 | | | $ | 92 | | | $ | 9 | | | $ | 83 | | | $ | 2 | | | $ | 28 | | | $ | 1 | |
Offset | Offset | | (17) | | | (9) | | | (8) | | | (8) | | | — | | | — | | | — | | | — | |
| Net amounts presented in Current Assets: Other | Net amounts presented in Current Assets: Other | | $ | 144 | | | $ | 28 | | | $ | 84 | | | $ | 1 | | | $ | 83 | | | $ | 2 | | | $ | 28 | | | $ | 1 | |
Net amounts presented in Current Assets: Other | |
Net amounts presented in Current Assets: Other | |
Noncurrent | Noncurrent | |
Gross amounts recognized | |
Gross amounts recognized | |
Gross amounts recognized | Gross amounts recognized | | $ | 364 | | | $ | 56 | | | $ | 104 | | | $ | 70 | | | $ | 34 | | | $ | — | | | $ | 27 | | | $ | — | |
Offset | Offset | | (60) | | | (32) | | | (28) | | | (28) | | | — | | | — | | | — | | | — | |
| Net amounts presented in Other Noncurrent Assets: Other | Net amounts presented in Other Noncurrent Assets: Other | | $ | 304 | | | $ | 24 | | | $ | 76 | | | $ | 42 | | | $ | 34 | | | $ | — | | | $ | 27 | | | $ | — | |
Net amounts presented in Other Noncurrent Assets: Other | |
Net amounts presented in Other Noncurrent Assets: Other | |
|
| | | | | |
FINANCIAL STATEMENTS | DERIVATIVES AND HEDGING |
| Derivative Liabilities | Derivative Liabilities | | September 30, 2023 | Derivative Liabilities | | March 31, 2024 |
| Duke | | Duke | | Duke | | Duke | | Duke | |
| Duke | | Energy | | Progress | | Energy | | Energy | | Energy | | Energy | |
| | | | Duke | |
| | Duke | |
| | Duke | |
| | Duke | |
(in millions) | |
(in millions) | |
(in millions) | (in millions) | | Energy | | Carolinas | | Energy | | Progress | | Florida | | Ohio | | Indiana | | Piedmont | | Energy | | Carolinas | | Energy | | Progress | | Florida | | Ohio | | Indiana | | Piedmont |
Current | Current | |
Gross amounts recognized | |
Gross amounts recognized | |
Gross amounts recognized | Gross amounts recognized | | $ | 293 | | | $ | 156 | | | $ | 97 | | | $ | 97 | | | $ | — | | | $ | — | | | $ | 4 | | | $ | 18 | |
Offset | Offset | | (17) | | | (9) | | | (8) | | | (8) | | | — | | | — | | | — | | | — | |
Cash collateral posted | Cash collateral posted | | (16) | | | (12) | | | (1) | | | (1) | | | — | | | — | | | (4) | | | — | |
Net amounts presented in Current Liabilities: Other | Net amounts presented in Current Liabilities: Other | | $ | 260 | | | $ | 135 | | | $ | 88 | | | $ | 88 | | | $ | — | | | $ | — | | | $ | — | | | $ | 18 | |
Noncurrent | Noncurrent | |
Gross amounts recognized | Gross amounts recognized | | $ | 227 | | | $ | 48 | | | $ | 40 | | | $ | 40 | | | $ | — | | | $ | 1 | | | $ | — | | | $ | 127 | |
Gross amounts recognized | |
Gross amounts recognized | |
Offset | Offset | | (60) | | | (33) | | | (28) | | | (28) | | | — | | | — | | | — | | | — | |
Cash collateral posted | Cash collateral posted | | $ | (8) | | | $ | (7) | | | $ | (1) | | | $ | (1) | | | $ | — | | | $ | — | | | $ | — | | | $ | — | |
Net amounts presented in Other Noncurrent Liabilities: Other | Net amounts presented in Other Noncurrent Liabilities: Other | | $ | 159 | | | $ | 8 | | | $ | 11 | | | $ | 11 | | | $ | — | | | $ | 1 | | | $ | — | | | $ | 127 | |
| Derivative Assets | Derivative Assets | | December 31, 2022 | Derivative Assets | | December 31, 2023 |
| Duke | | Duke | | Duke | | Duke | | Duke | |
| Duke | | Energy | | Progress | | Energy | | Energy | | Energy | | Energy | |
| | | | Duke | |
| | Duke | |
| | Duke | |
| | Duke | |
(in millions) | |
(in millions) | |
(in millions) | (in millions) | | Energy | | Carolinas | | Energy | | Progress | | Florida | | Ohio | | Indiana | | Piedmont | | Energy | | Carolinas | | Energy | | Progress | | Florida | | Ohio | | Indiana | | Piedmont |
Current | Current | |
Gross amounts recognized | Gross amounts recognized | | $ | 582 | | | $ | 226 | | | $ | 140 | | | $ | 122 | | | $ | 17 | | | $ | 5 | | | $ | 110 | | | $ | — | |
Gross amounts recognized | |
Gross amounts recognized | |
Offset | Offset | | (33) | | | (15) | | | (18) | | | (18) | | | — | | | — | | | — | | | — | |
Cash collateral received | | (31) | | | (18) | | | (12) | | | (12) | | | — | | | — | | | — | | | — | |
| Net amounts presented in Current Assets: Other | |
Net amounts presented in Current Assets: Other | |
Net amounts presented in Current Assets: Other | Net amounts presented in Current Assets: Other | | $ | 518 | | | $ | 193 | | | $ | 110 | | | $ | 92 | | | $ | 17 | | | $ | 5 | | | $ | 110 | | | $ | — | |
Noncurrent | Noncurrent | |
Gross amounts recognized | Gross amounts recognized | | $ | 213 | | | $ | 104 | | | $ | 108 | | | $ | 108 | | | $ | — | | | $ | — | | | $ | — | | | $ | — | |
Gross amounts recognized | |
Gross amounts recognized | |
Offset | Offset | | (59) | | | (29) | | | (30) | | | (30) | | | — | | | — | | | — | | | — | |
Cash collateral received | | (38) | | | (11) | | | (27) | | | (27) | | | — | | | — | | | — | | | — | |
| Net amounts presented in Other Noncurrent Assets: Other | Net amounts presented in Other Noncurrent Assets: Other | | $ | 116 | | | $ | 64 | | | $ | 51 | | | $ | 51 | | | $ | — | | | $ | — | | | $ | — | | | $ | — | |
Net amounts presented in Other Noncurrent Assets: Other | |
Net amounts presented in Other Noncurrent Assets: Other | |
| Derivative Liabilities | Derivative Liabilities | | December 31, 2022 | Derivative Liabilities | | December 31, 2023 |
| Duke | | Duke | | Duke | | Duke | | Duke | |
| Duke | | Energy | | Progress | | Energy | | Energy | | Energy | | Energy | |
| | | | Duke | |
| | Duke | |
| | Duke | |
| | Duke | |
(in millions) | |
(in millions) | |
(in millions) | (in millions) | | Energy | | Carolinas | | Energy | | Progress | | Florida | | Ohio | | Indiana | | Piedmont | | Energy | | Carolinas | | Energy | | Progress | | Florida | | Ohio | | Indiana | | Piedmont |
Current | Current | |
Gross amounts recognized | |
Gross amounts recognized | |
Gross amounts recognized | Gross amounts recognized | | $ | 193 | | | $ | 96 | | | $ | 36 | | | $ | 18 | | | $ | 19 | | | $ | — | | | $ | 16 | | | $ | 27 | |
Offset | Offset | | (33) | | | (15) | | | (18) | | | (18) | | | — | | | — | | | — | | | — | |
Cash collateral posted | Cash collateral posted | | (16) | | | — | | | — | | | — | | | — | | | — | | | (16) | | | — | |
Net amounts presented in Current Liabilities: Other | Net amounts presented in Current Liabilities: Other | | $ | 144 | | | $ | 81 | | | $ | 18 | | | $ | — | | | $ | 19 | | | $ | — | | | $ | — | | | $ | 27 | |
Noncurrent | Noncurrent | |
Gross amounts recognized | Gross amounts recognized | | $ | 244 | | | $ | 31 | | | $ | 30 | | | $ | 30 | | | $ | — | | | $ | 2 | | | $ | — | | | $ | 141 | |
Gross amounts recognized | |
Gross amounts recognized | |
Offset | Offset | | (59) | | | (29) | | | (30) | | | (30) | | | — | | | — | | | — | | | — | |
| Cash collateral posted | |
Net amounts presented in Other Noncurrent Liabilities: Other | Net amounts presented in Other Noncurrent Liabilities: Other | | $ | 185 | | | $ | 2 | | | $ | — | | | $ | — | | | $ | — | | | $ | 2 | | | $ | — | | | $ | 141 | |
| | | | | |
FINANCIAL STATEMENTS | DERIVATIVES AND HEDGING |
OBJECTIVE CREDIT CONTINGENT FEATURES
Certain derivative contracts contain objective credit contingent features. These features include the requirement to post cash collateral or letters of credit if specific events occur, such as a credit rating downgrade below investment grade. The following tables show information with respect to derivative contracts that are in a net liability position and contain objective credit risk-related payment provisions.
| | September 30, 2023 | |
| | Duke | | Duke | |
| Duke | | Energy | | Progress | | Energy | |
| March 31, 2024 | |
| March 31, 2024 | |
| March 31, 2024 | |
| | | Duke | |
| | | Duke | |
| | | Duke | |
| Duke | |
| Duke | |
| Duke | |
(in millions) | |
(in millions) | |
(in millions) | (in millions) | Energy | | Carolinas | | Energy | | Progress | |
Aggregate fair value of derivatives in a net liability position | Aggregate fair value of derivatives in a net liability position | $ | 312 | | | $ | 175 | | | $ | 138 | | | $ | 138 | | |
Aggregate fair value of derivatives in a net liability position | |
Aggregate fair value of derivatives in a net liability position | |
Fair value of collateral already posted | |
Fair value of collateral already posted | |
Fair value of collateral already posted | Fair value of collateral already posted | 21 | | | 19 | | | 2 | | | 2 | | |
Additional cash collateral or letters of credit in the event credit risk-related contingent features were triggered | Additional cash collateral or letters of credit in the event credit risk-related contingent features were triggered | $ | 291 | | | $ | 156 | | | $ | 136 | | | $ | 136 | | |
Additional cash collateral or letters of credit in the event credit risk-related contingent features were triggered | |
Additional cash collateral or letters of credit in the event credit risk-related contingent features were triggered | |
| | December 31, 2022 |
| | Duke | | Duke | | Duke | |
| Duke | | Energy | | Progress | | Energy | | Energy | |
| December 31, 2023 | |
| December 31, 2023 | |
| December 31, 2023 | |
| | | Duke | |
| Duke | |
| Duke | |
| Duke | |
(in millions) | |
(in millions) | |
(in millions) | (in millions) | Energy | | Carolinas | | Energy | | Progress | | Florida | |
Aggregate fair value of derivatives in a net liability position | Aggregate fair value of derivatives in a net liability position | $ | 141 | | | $ | 86 | | | $ | 55 | | | $ | 48 | | | $ | 7 | | |
Aggregate fair value of derivatives in a net liability position | |
Aggregate fair value of derivatives in a net liability position | |
Fair value of collateral already posted | |
Fair value of collateral already posted | |
Fair value of collateral already posted | Fair value of collateral already posted | — | | | — | | | — | | | — | | | — | | |
Additional cash collateral or letters of credit in the event credit risk-related contingent features were triggered | Additional cash collateral or letters of credit in the event credit risk-related contingent features were triggered | $ | 141 | | | $ | 86 | | | $ | 55 | | | $ | 48 | | | $ | 7 | | |
Additional cash collateral or letters of credit in the event credit risk-related contingent features were triggered | |
Additional cash collateral or letters of credit in the event credit risk-related contingent features were triggered | |
The Duke Energy Registrants have elected to offset cash collateral and fair values of derivatives. For amounts to be netted, the derivative and cash collateral must be executed with the same counterparty under the same master netting arrangement.
11.10. INVESTMENTS IN DEBT AND EQUITY SECURITIES
Duke Energy’s investments in debt and equity securities are primarily comprised of investments held in (i) the NDTF at Duke Energy Carolinas, Duke Energy Progress and Duke Energy Florida, (ii) the grantor trusts at Duke Energy Progress, Duke Energy Florida and Duke Energy Indiana related to OPEB plans and (iii) Bison. The Duke Energy Registrants classify investments in debt securities as Available for Sale (AFS) and investments in equity securities as fair value through net income (FV-NI).
For investments in debt securities classified as AFS, the unrealized gains and losses are included in other comprehensive income until realized, at which time they are reported through net income. For investments in equity securities classified as FV-NI, both realized and unrealized gains and losses are reported through net income. Substantially all of Duke Energy’s investments in debt and equity securities qualify for regulatory accounting, and accordingly, all associated realized and unrealized gains and losses on these investments are deferred as a regulatory asset or liability.
Duke Energy classifies the majority of investments in debt and equity securities as long term, unless otherwise noted.
Investment Trusts
The investments within the Investment Trusts are managed by independent investment managers with discretion to buy, sell and invest pursuant to the guidelines set forth by the investment manager agreements and trust agreements. The Duke Energy Registrants have limited oversight of the day-to-day management of these investments. As a result, the ability to hold investments in unrealized loss positions is outside the control of the Duke Energy Registrants. Accordingly, all unrealized losses associated with debt securities within the Investment Trusts are recognized immediately and deferred to regulatory accounts where appropriate.
Other AFS Securities
Unrealized gains and losses on all other AFS securities are included in other comprehensive income until realized, unless it is determined the carrying value of an investment has a credit loss. The Duke Energy Registrants analyze all investment holdings each reporting period to determine whether a decline in fair value is related to a credit loss. If a credit loss exists, the unrealized credit loss is included in earnings. There were no material credit losses as of September 30, 2023,March 31, 2024, and December 31, 2022.2023.
Other Investments amounts are recorded in Other within Other Noncurrent Assets on the Condensed Consolidated Balance Sheets.
| | | | | |
FINANCIAL STATEMENTS | INVESTMENTS IN DEBT AND EQUITY SECURITIES |
DUKE ENERGY
The following table presents the estimated fair value of investments in debt and equity securities; equity investments are classified as FV-NI and debt investments are classified as AFS.
| | September 30, 2023 | | December 31, 2022 |
| Gross | | Gross | | | Gross | | Gross | |
| Unrealized | | Unrealized | | Estimated | | Unrealized | | Unrealized | | Estimated |
| Holding | | Holding | | Fair | | Holding | | Holding | | Fair |
| March 31, 2024 | | | March 31, 2024 | | December 31, 2023 |
| Gross | |
| Unrealized | |
| Unrealized | |
| Unrealized | | | Unrealized | | Estimated | | Unrealized | | Estimated |
| Holding | | | Holding | | Fair | | Holding | | Fair |
(in millions) | (in millions) | Gains | | Losses | | Value | | Gains | | Losses | | Value | (in millions) | Gains | | Losses | | Value | | Gains | | Losses | | Value |
NDTF | NDTF | |
Cash and cash equivalents | |
Cash and cash equivalents | |
Cash and cash equivalents | Cash and cash equivalents | $ | — | | | $ | — | | | $ | 160 | | | $ | — | | | $ | — | | | $ | 215 | |
Equity securities | Equity securities | 4,218 | | | 44 | | | 6,530 | | | 3,658 | | | 105 | | | 5,871 | |
Corporate debt securities | Corporate debt securities | — | | | 80 | | | 612 | | | 1 | | | 85 | | | 641 | |
Municipal bonds | Municipal bonds | — | | | 41 | | | 318 | | | — | | | 39 | | | 330 | |
U.S. government bonds | U.S. government bonds | — | | | 136 | | | 1,470 | | | 2 | | | 112 | | | 1,423 | |
| Other debt securities | Other debt securities | — | | | 18 | | | 169 | | | — | | | 18 | | | 156 | |
Other debt securities | |
Other debt securities | |
Total NDTF Investments | Total NDTF Investments | $ | 4,218 | | | $ | 319 | | | $ | 9,259 | | | $ | 3,661 | | | $ | 359 | | | $ | 8,636 | |
Other Investments | Other Investments | |
Cash and cash equivalents | |
Cash and cash equivalents | |
Cash and cash equivalents | Cash and cash equivalents | $ | — | | | $ | — | | | $ | 36 | | | $ | — | | | $ | — | | | $ | 22 | |
Equity securities | Equity securities | 26 | | | 9 | | | 141 | | | 21 | | | 16 | | | 128 | |
Corporate debt securities | Corporate debt securities | — | | | 10 | | | 83 | | | — | | | 12 | | | 84 | |
Municipal bonds | Municipal bonds | — | | | 3 | | | 74 | | | — | | | 3 | | | 78 | |
U.S. government bonds | U.S. government bonds | — | | | 5 | | | 46 | | | — | | | 2 | | | 62 | |
Other debt securities | Other debt securities | — | | | 5 | | | 52 | | | — | | | 3 | | | 41 | |
Total Other Investments | Total Other Investments | $ | 26 | | | $ | 32 | | | $ | 432 | | | $ | 21 | | | $ | 36 | | | $ | 415 | |
Total Investments | Total Investments | $ | 4,244 | | | $ | 351 | | | $ | 9,691 | | | $ | 3,682 | | | $ | 395 | | | $ | 9,051 | |
Realized gains and losses, which were determined on a specific identification basis, from sales of FV-NI and AFS securities for the three and nine months ended September 30,March 31, 2024, and 2023, and 2022, were as follows.
| | Three Months Ended | | Nine Months Ended |
| | | Three Months Ended | |
| | | Three Months Ended | |
| | | Three Months Ended | |
(in millions) | (in millions) | September 30, 2023 | | September 30, 2022 | | September 30, 2023 | | September 30, 2022 | (in millions) | | | | | March 31, 2024 | | March 31, 2023 |
FV-NI: | FV-NI: | |
Realized gains | |
Realized gains | |
Realized gains | Realized gains | $ | 61 | | | $ | 25 | | | $ | 107 | | | $ | 170 | |
Realized losses | Realized losses | 35 | | | 61 | | | 117 | | | 247 | |
AFS: | AFS: | |
Realized gains | Realized gains | 16 | | | 7 | | | 37 | | | 22 | |
Realized gains | |
Realized gains | |
Realized losses | Realized losses | 45 | | | 40 | | | 104 | | | 105 | |
DUKE ENERGY CAROLINAS
The following table presents the estimated fair value of investments in debt and equity securities; equity investments are classified as FV-NI and debt investments are classified as AFS.
| | September 30, 2023 | | December 31, 2022 |
| Gross | | Gross | | | Gross | | Gross | |
| Unrealized | | Unrealized | | Estimated | | Unrealized | | Unrealized | | Estimated |
| Holding | | Holding | | Fair | | Holding | | Holding | | Fair |
| March 31, 2024 | | | March 31, 2024 | | December 31, 2023 |
| Gross | |
| Unrealized | |
| Unrealized | |
| Unrealized | | | Unrealized | | Estimated | | Unrealized | | Estimated |
| Holding | | | Holding | | Fair | | Holding | | Fair |
(in millions) | (in millions) | Gains | | Losses | | Value | | Gains | | Losses | | Value | (in millions) | Gains | | Losses | | Value | | Gains | | Losses | | Value |
NDTF | NDTF | |
Cash and cash equivalents | |
Cash and cash equivalents | |
Cash and cash equivalents | Cash and cash equivalents | $ | — | | | $ | — | | | $ | 59 | | | $ | — | | | $ | — | | | $ | 117 | |
Equity securities | Equity securities | 2,468 | | | 25 | | | 3,767 | | | 2,147 | | | 51 | | | 3,367 | |
Corporate debt securities | Corporate debt securities | — | | | 60 | | | 376 | | | 1 | | | 62 | | | 401 | |
Municipal bonds | Municipal bonds | — | | | 9 | | | 45 | | | — | | | 10 | | | 64 | |
U.S. government bonds | U.S. government bonds | — | | | 73 | | | 745 | | | 1 | | | 51 | | | 685 | |
Other debt securities | Other debt securities | — | | | 18 | | | 163 | | | — | | | 18 | | | 148 | |
Total NDTF Investments | Total NDTF Investments | $ | 2,468 | | | $ | 185 | | | $ | 5,155 | | | $ | 2,149 | | | $ | 192 | | | $ | 4,782 | |
|
| | | | | |
FINANCIAL STATEMENTS | INVESTMENTS IN DEBT AND EQUITY SECURITIES |
Realized gains and losses, which were determined on a specific identification basis, from sales of FV-NI and AFS securities for the three and nine months ended September 30,March 31, 2024, and 2023, and 2022, were as follows.
| | Three Months Ended | | Nine Months Ended |
| | | Three Months Ended | |
| | | Three Months Ended | |
| | | Three Months Ended | |
(in millions) | (in millions) | September 30, 2023 | | September 30, 2022 | | September 30, 2023 | | September 30, 2022 | (in millions) | | | | | March 31, 2024 | | March 31, 2023 |
FV-NI: | FV-NI: | |
Realized gains | |
Realized gains | |
Realized gains | Realized gains | $ | 43 | | | $ | 16 | | | $ | 70 | | | $ | 109 | |
Realized losses | Realized losses | 17 | | | 39 | | | 64 | | | 143 | |
AFS: | AFS: | |
Realized gains | Realized gains | 12 | | | 7 | | | 21 | | | 19 | |
Realized gains | |
Realized gains | |
Realized losses | Realized losses | 26 | | | 20 | | | 54 | | | 57 | |
PROGRESS ENERGY
The following table presents the estimated fair value of investments in debt and equity securities; equity investments are classified as FV-NI and debt investments are classified as AFS.
| | September 30, 2023 | | December 31, 2022 |
| Gross | | Gross | | | Gross | | Gross | |
| Unrealized | | Unrealized | | Estimated | | Unrealized | | Unrealized | | Estimated |
| Holding | | Holding | | Fair | | Holding | | Holding | | Fair |
| March 31, 2024 | | | March 31, 2024 | | December 31, 2023 |
| Gross | |
| Unrealized | |
| Unrealized | |
| Unrealized | | | Unrealized | | Estimated | | Unrealized | | Estimated |
| Holding | | | Holding | | Fair | | Holding | | Fair |
(in millions) | (in millions) | Gains | | Losses | | Value | | Gains | | Losses | | Value | (in millions) | Gains | | Losses | | Value | | Gains | | Losses | | Value |
NDTF | NDTF | |
Cash and cash equivalents | |
Cash and cash equivalents | |
Cash and cash equivalents | Cash and cash equivalents | $ | — | | | $ | — | | | $ | 101 | | | $ | — | | | $ | — | | | $ | 98 | |
Equity securities | Equity securities | 1,750 | | | 19 | | | 2,763 | | | 1,511 | | | 54 | | | 2,504 | |
Corporate debt securities | Corporate debt securities | — | | | 20 | | | 236 | | | — | | | 23 | | | 240 | |
Municipal bonds | Municipal bonds | — | | | 32 | | | 273 | | | — | | | 29 | | | 266 | |
U.S. government bonds | U.S. government bonds | — | | | 63 | | | 725 | | | 1 | | | 61 | | | 738 | |
| Other debt securities | Other debt securities | — | | | — | | | 6 | | | — | | | — | | | 8 | |
Other debt securities | |
Other debt securities | |
Total NDTF Investments | Total NDTF Investments | $ | 1,750 | | | $ | 134 | | | $ | 4,104 | | | $ | 1,512 | | | $ | 167 | | | $ | 3,854 | |
Other Investments | Other Investments | |
Cash and cash equivalents | Cash and cash equivalents | $ | — | | | $ | — | | | $ | 8 | | | $ | — | | | $ | — | | | $ | 11 | |
Cash and cash equivalents | |
Cash and cash equivalents | |
| Municipal bonds | |
Municipal bonds | |
Municipal bonds | Municipal bonds | — | | | — | | | 23 | | | — | | | — | | | 25 | |
Total Other Investments | Total Other Investments | $ | — | | | $ | — | | | $ | 31 | | | $ | — | | | $ | — | | | $ | 36 | |
Total Investments | Total Investments | $ | 1,750 | | | $ | 134 | | | $ | 4,135 | | | $ | 1,512 | | | $ | 167 | | | $ | 3,890 | |
Realized gains and losses, which were determined on a specific identification basis, from sales of FV-NI and AFS securities for the three and nine months ended September 30,March 31, 2024, and 2023, and 2022, were as follows.
| | Three Months Ended | Nine Months Ended |
| | Three Months Ended | |
| | Three Months Ended | |
| | Three Months Ended | |
(in millions) | (in millions) | September 30, 2023 | | September 30, 2022 | | September 30, 2023 | | September 30, 2022 | (in millions) | | | | | March 31, 2024 | | March 31, 2023 |
FV-NI: | FV-NI: | |
Realized gains | |
Realized gains | |
Realized gains | Realized gains | $ | 18 | | | $ | 9 | | | $ | 37 | | | $ | 61 | |
Realized losses | Realized losses | 18 | | | 22 | | | 53 | | | 104 | |
AFS: | AFS: | |
Realized gains | Realized gains | 4 | | | — | | | 16 | | | 3 | |
Realized gains | |
Realized gains | |
Realized losses | Realized losses | 19 | | | 9 | | | 50 | | | 32 | |
| | | | | |
FINANCIAL STATEMENTS | INVESTMENTS IN DEBT AND EQUITY SECURITIES |
DUKE ENERGY PROGRESS
The following table presents the estimated fair value of investments in debt and equity securities; equity investments are classified as FV-NI and debt investments are classified as AFS.
| | September 30, 2023 | | December 31, 2022 |
| Gross | | Gross | | | Gross | | Gross | |
| Unrealized | | Unrealized | | Estimated | | Unrealized | | Unrealized | | Estimated |
| Holding | | Holding | | Fair | | Holding | | Holding | | Fair |
| March 31, 2024 | | | March 31, 2024 | | December 31, 2023 |
| Gross | |
| Unrealized | |
| Unrealized | |
| Unrealized | | | Unrealized | | Estimated | | Unrealized | | Estimated |
| Holding | | | Holding | | Fair | | Holding | | Fair |
(in millions) | (in millions) | Gains | | Losses | | Value | | Gains | | Losses | | Value | (in millions) | Gains | | Losses | | Value | | Gains | | Losses | | Value |
NDTF | NDTF | |
Cash and cash equivalents | |
Cash and cash equivalents | |
Cash and cash equivalents | Cash and cash equivalents | $ | — | | | $ | — | | | $ | 62 | | | $ | — | | | $ | — | | | $ | 56 | |
Equity securities | Equity securities | 1,661 | | | 19 | | | 2,663 | | | 1,431 | | | 54 | | | 2,411 | |
Corporate debt securities | Corporate debt securities | — | | | 19 | | | 224 | | | — | | | 22 | | | 230 | |
Municipal bonds | Municipal bonds | — | | | 32 | | | 273 | | | — | | | 29 | | | 266 | |
U.S. government bonds | U.S. government bonds | — | | | 43 | | | 469 | | | 1 | | | 37 | | | 460 | |
Other debt securities | Other debt securities | — | | | — | | | 5 | | | — | | | — | | | 7 | |
Total NDTF Investments | Total NDTF Investments | $ | 1,661 | | | $ | 113 | | | $ | 3,696 | | | $ | 1,432 | | | $ | 142 | | | $ | 3,430 | |
Other Investments | Other Investments | |
Cash and cash equivalents | Cash and cash equivalents | $ | — | | | $ | — | | | $ | 4 | | | $ | — | | | $ | — | | | $ | 9 | |
Cash and cash equivalents | |
Cash and cash equivalents | |
Total Other Investments | Total Other Investments | $ | — | | | $ | — | | | $ | 4 | | | $ | — | | | $ | — | | | $ | 9 | |
Total Investments | Total Investments | $ | 1,661 | | | $ | 113 | | | $ | 3,700 | | | $ | 1,432 | | | $ | 142 | | | $ | 3,439 | |
Realized gains and losses, which were determined on a specific identification basis, from sales of FV-NI and AFS securities for the three and nine months ended September 30,March 31, 2024, and 2023, and 2022, were as follows.
| | Three Months Ended | Nine Months Ended |
| | Three Months Ended | |
| | Three Months Ended | |
| | Three Months Ended | |
(in millions) | (in millions) | September 30, 2023 | | September 30, 2022 | | September 30, 2023 | | September 30, 2022 | (in millions) | | | | | March 31, 2024 | | March 31, 2023 |
FV-NI: | FV-NI: | |
Realized gains | |
Realized gains | |
Realized gains | Realized gains | $ | 15 | | | $ | 9 | | | $ | 34 | | | $ | 60 | |
Realized losses | Realized losses | 18 | | | 21 | | | 52 | | | 101 | |
AFS: | AFS: | |
Realized gains | Realized gains | 4 | | | — | | | 15 | | | 3 | |
Realized gains | |
Realized gains | |
Realized losses | Realized losses | 18 | | | 9 | | | 47 | | | 29 | |
DUKE ENERGY FLORIDA
The following table presents the estimated fair value of investments in debt and equity securities; equity investments are classified as FV-NI and debt investments are classified as AFS.
| | September 30, 2023 | | December 31, 2022 |
| Gross | | Gross | | | Gross | | Gross | |
| Unrealized | | Unrealized | | Estimated | | Unrealized | | Unrealized | | Estimated |
| Holding | | Holding | | Fair | | Holding | | Holding | | Fair |
| March 31, 2024 | | | March 31, 2024 | | December 31, 2023 |
| Gross | |
| Unrealized | |
| Unrealized | |
| Unrealized | | | Unrealized | | Estimated | | Unrealized | | Estimated |
| Holding | | | Holding | | Fair | | Holding | | Fair |
(in millions) | (in millions) | Gains | | Losses | | Value | | Gains | | Losses | | Value | (in millions) | Gains | | Losses | | Value | | Gains | | Losses | | Value |
NDTF | NDTF | |
Cash and cash equivalents | |
Cash and cash equivalents | |
Cash and cash equivalents | Cash and cash equivalents | $ | — | | | $ | — | | | $ | 39 | | | $ | — | | | $ | — | | | $ | 42 | |
Equity securities | Equity securities | 89 | | | — | | | 100 | | | 80 | | | — | | | 93 | |
Corporate debt securities | Corporate debt securities | — | | | 1 | | | 12 | | | — | | | 1 | | | 10 | |
| U.S. government bonds | U.S. government bonds | — | | | 20 | | | 256 | | | — | | | 24 | | | 278 | |
U.S. government bonds | |
U.S. government bonds | |
| Other debt securities | |
Other debt securities | |
Other debt securities | Other debt securities | — | | | — | | | 1 | | | — | | | — | | | 1 | |
Total NDTF Investments(a) | Total NDTF Investments(a) | $ | 89 | | | $ | 21 | | | $ | 408 | | | $ | 80 | | | $ | 25 | | | $ | 424 | |
Other Investments | Other Investments | |
Cash and cash equivalents | Cash and cash equivalents | $ | — | | | $ | — | | | $ | 1 | | | $ | — | | | $ | — | | | $ | 1 | |
Cash and cash equivalents | |
Cash and cash equivalents | |
| Municipal bonds | |
Municipal bonds | |
Municipal bonds | Municipal bonds | — | | | — | | | 23 | | | — | | | — | | | 25 | |
Total Other Investments | Total Other Investments | $ | — | | | $ | — | | | $ | 24 | | | $ | — | | | $ | — | | | $ | 26 | |
Total Investments | Total Investments | $ | 89 | | | $ | 21 | | | $ | 432 | | | $ | 80 | | | $ | 25 | | | $ | 450 | |
(a)During the ninethree months ended September 30, 2023,March 31, 2024, and the year ended December 31, 2022,2023, Duke Energy Florida received reimbursements from the NDTF for costs related to ongoing decommissioning activity of Crystal River Unit 3.
| | | | | |
FINANCIAL STATEMENTS | INVESTMENTS IN DEBT AND EQUITY SECURITIES |
Realized gains and losses, which were determined on a specific identification basis, from sales of FV-NI and AFS securities for the three and nine months ended September 30,March 31, 2024, and 2023, and 2022, were immaterial.
DUKE ENERGY INDIANA
The following table presents the estimated fair value of investments in debt and equity securities; equity investments are measured at FV-NI and debt investments are classified as AFS.
| | September 30, 2023 | | December 31, 2022 |
| Gross | | Gross | | | Gross | | Gross | |
| Unrealized | | Unrealized | | Estimated | | Unrealized | | Unrealized | | Estimated |
| Holding | | Holding | | Fair | | Holding | | Holding | | Fair |
| March 31, 2024 | | | March 31, 2024 | | December 31, 2023 |
| Gross | |
| Unrealized | |
| Unrealized | |
| Unrealized | | | Unrealized | | Estimated | | Unrealized | | Estimated |
| Holding | | | Holding | | Fair | | Holding | | Fair |
(in millions) | (in millions) | Gains | | Losses | | Value | | Gains | | Losses | | Value | (in millions) | Gains | | Losses | | Value | | Gains | | Losses | | Value |
Investments | Investments | |
Cash and cash equivalents | |
Cash and cash equivalents | |
Cash and cash equivalents | Cash and cash equivalents | $ | — | | | $ | — | | | $ | 3 | | | $ | — | | | $ | — | | | $ | 1 | |
Equity securities | Equity securities | 3 | | | 9 | | | 88 | | | 2 | | | 16 | | | 79 | |
Corporate debt securities | Corporate debt securities | — | | | — | | | 9 | | | — | | | 1 | | | 8 | |
Municipal bonds | Municipal bonds | — | | | 3 | | | 44 | | | — | | | 3 | | | 45 | |
U.S. government bonds | U.S. government bonds | — | | | — | | | 6 | | | — | | | — | | | 7 | |
| Total Investments | Total Investments | $ | 3 | | | $ | 12 | | | $ | 150 | | | $ | 2 | | | $ | 20 | | | $ | 140 | |
Total Investments | |
Total Investments | |
Realized gains and losses, which were determined on a specific identification basis, from sales of FV-NI and AFS securities for the three and nine months ended September 30,March 31, 2024, and 2023, and 2022, were immaterial.
DEBT SECURITY MATURITIES
The table below summarizes the maturity date for debt securities.
| | September 30, 2023 |
| | Duke | | Duke | | Duke | | Duke |
| Duke | | Energy | | Progress | | Energy | | Energy | | Energy |
| March 31, 2024 | | | March 31, 2024 |
| | | Duke | | | | | Duke | | | | Duke | | Duke |
| Duke | | | Duke | | Energy | | Progress | | Energy |
(in millions) | (in millions) | Energy | | Carolinas | | Energy | | Progress | | Florida | | Indiana | (in millions) | Energy | | Carolinas | | Energy | | Progress | | Florida | | Indiana |
Due in one year or less | Due in one year or less | $ | 137 | | | $ | 7 | | | $ | 109 | | | $ | 21 | | | $ | 88 | | | $ | 7 | |
Due after one through five years | Due after one through five years | 671 | | | 209 | | | 388 | | | 235 | | | 153 | | | 19 | |
Due after five through 10 years | Due after five through 10 years | 545 | | | 311 | | | 197 | | | 184 | | | 13 | | | 10 | |
Due after 10 years | Due after 10 years | 1,471 | | | 802 | | | 569 | | | 531 | | | 38 | | | 23 | |
Total | Total | $ | 2,824 | | | $ | 1,329 | | | $ | 1,263 | | | $ | 971 | | | $ | 292 | | | $ | 59 | |
12.11. FAIR VALUE MEASUREMENTS
Fair value is the exchange price to sell an asset or transfer a liability in an orderly transaction between market participants at the measurement date. The fair value definition focuses on an exit price versus the acquisition cost. Fair value measurements use market data or assumptions market participants would use in pricing the asset or liability, including assumptions about risk and the risks inherent in the inputs to the valuation technique. These inputs may be readily observable, corroborated by market data or generally unobservable. Valuation techniques maximize the use of observable inputs and minimize the use of unobservable inputs. A midmarket pricing convention (the midpoint price between bid and ask prices) is permitted for use as a practical expedient.
Fair value measurements are classified in three levels based on the fair value hierarchy as defined by GAAP. Certain investments are not categorized within the fair value hierarchy. These investments are measured at fair value using the net asset value per share practical expedient. The net asset value is derived based on the investment cost, less any impairment, plus or minus changes resulting from observable price changes for an identical or similar investment of the same issuer.
Fair value accounting guidance permits entities to elect to measure certain financial instruments that are not required to be accounted for at fair value, such as equity method investments or the Company’s own debt, at fair value. The Duke Energy Registrants have not elected to record any of these items at fair value.
Valuation methods of the primary fair value measurements disclosed below are as follows.
Investments in equity securities
The majority of investments in equity securities are valued using Level 1 measurements. Investments in equity securities are typically valued at the closing price in the principal active market as of the last business day of the quarter. Principal active markets for equity prices include published exchanges such as the NYSENew York Stock Exchange and Nasdaq Stock Market. Foreign equity prices are translated from their trading currency using the currency exchange rate in effect at the close of the principal active market. There was no after-hours market activity that was required to be reflected in the reported fair value measurements.
| | | | | |
FINANCIAL STATEMENTS | FAIR VALUE MEASUREMENTS |
Investments in debt securities
Most investments in debt securities are valued using Level 2 measurements because the valuations use interest rate curves and credit spreads applied to the terms of the debt instrument (maturity and coupon interest rate) and consider the counterparty credit rating. If the market for a particular fixed-income security is relatively inactive or illiquid, the measurement is Level 3.
Commodity derivatives
Commodity derivatives with clearinghouses are classified as Level 1. Commodity derivatives with observable forward curves are classified as Level 2. If forward price curves are not observable for the full term of the contract and the unobservable period had more than an insignificant impact on the valuation, the commodity derivative is classified as Level 3. In isolation, increases (decreases) in natural gas forward prices result in favorable (unfavorable) fair value adjustments for natural gas purchase contracts; and increases (decreases) in electricity forward prices result in unfavorable (favorable) fair value adjustments for electricity sales contracts. Duke Energy regularly evaluates and validates pricing inputs used to estimate the fair value of certain commodity contracts by a market participant price verification procedure. This procedure provides a comparison of internal forward commodity curves to market participant generated curves.
Interest rate derivatives
Most over-the-counter interest rate contract derivatives are valued using financial models that utilize observable inputs for similar instruments and are classified as Level 2. Inputs include forward interest rate curves, notional amounts, interest rates and credit quality of the counterparties. Derivatives related to interest rate risk for the Commercial Renewables Disposal Groups are now classified as held for sale and are excluded from the following disclosures. See Note 2 for further information.
Foreign currency derivatives
Most over-the-counter foreign currency derivatives are valued using financial models that utilize observable inputs for similar instruments and are classified as Level 2. Inputs include forward foreign currency rate curves, notional amounts, foreign currency rates and credit quality of the counterparties.
Other fair value considerations
See Note 12 in Duke Energy's Annual Report on Form 10-K for the year ended December 31, 2022,2023, for a discussion of the valuation of goodwill and intangible assets. Also, see Note 8 for further information on the annual impairment test as of August 31, 2023.
DUKE ENERGY
The following tables provide recorded balances for assets and liabilities measured at fair value on a recurring basis on the Condensed Consolidated Balance Sheets. Derivative amounts in the tables below for all Duke Energy Registrants exclude cash collateral, which is disclosed in Note 10.9. See Note 1110 for additional information related to investments by major security type for the Duke Energy Registrants.
| | September 30, 2023 |
| March 31, 2024 | | | March 31, 2024 |
(in millions) | (in millions) | Total Fair Value | Level 1 | Level 2 | Level 3 | Not Categorized | (in millions) | Total Fair Value | Level 1 | Level 2 | Level 3 | Not Categorized |
NDTF cash and cash equivalents | NDTF cash and cash equivalents | $ | 160 | | $ | 160 | | $ | — | | $ | — | | $ | — | |
NDTF equity securities | NDTF equity securities | 6,530 | | 6,491 | | — | | — | | 39 | |
NDTF debt securities | NDTF debt securities | 2,569 | | 755 | | 1,814 | | — | | — | |
Other equity securities | Other equity securities | 141 | | 141 | | — | | — | | — | |
Other debt securities | Other debt securities | 255 | | 40 | | 215 | | — | | — | |
Other cash and cash equivalents | Other cash and cash equivalents | 36 | | 36 | | — | | — | | — | |
| Derivative assets | Derivative assets | 525 | | 2 | | 493 | | 30 | | — | |
Derivative assets | |
Derivative assets | |
Total assets | Total assets | 10,216 | | 7,625 | | 2,522 | | 30 | | 39 | |
| Derivative liabilities | Derivative liabilities | (520) | | (4) | | (516) | | — | | — | |
Derivative liabilities | |
Derivative liabilities | |
Net assets | Net assets | $ | 9,696 | | $ | 7,621 | | $ | 2,006 | | $ | 30 | | $ | 39 | |
| | December 31, 2022 |
| December 31, 2023 | | | December 31, 2023 |
(in millions) | (in millions) | Total Fair Value | Level 1 | Level 2 | Level 3 | Not Categorized | (in millions) | Total Fair Value | Level 1 | Level 2 | Level 3 | Not Categorized |
NDTF cash and cash equivalents | NDTF cash and cash equivalents | $ | 215 | | $ | 215 | | $ | — | | $ | — | | $ | — | |
NDTF equity securities | NDTF equity securities | 5,871 | | 5,829 | | — | | — | | 42 | |
NDTF debt securities | NDTF debt securities | 2,550 | | 780 | | 1,770 | | — | | — | |
Other equity securities | Other equity securities | 128 | | 128 | | — | | — | | — | |
Other debt securities | Other debt securities | 265 | | 55 | | 210 | | — | | — | |
Other cash and cash equivalents | Other cash and cash equivalents | 22 | | 22 | | — | | — | | — | |
Derivative assets | Derivative assets | 795 | | 1 | | 760 | | 34 | | — | |
Total assets | Total assets | 9,846 | | 7,030 | | 2,740 | | 34 | | 42 | |
| Derivative liabilities | Derivative liabilities | (437) | | (16) | | (421) | | — | | — | |
Derivative liabilities | |
Derivative liabilities | |
Net assets | Net assets | $ | 9,409 | | $ | 7,014 | | $ | 2,319 | | $ | 34 | | $ | 42 | |
| | | | | |
FINANCIAL STATEMENTS | FAIR VALUE MEASUREMENTS |
The following table provides reconciliations of beginning and ending balances of assets and liabilities measured at fair value using Level 3 measurements.
| | Derivatives (net) |
| Three Months Ended September 30, | | Nine Months Ended September 30, |
| | | | | Derivatives (net) | |
| | | | | Derivatives (net) | |
| | | | | Derivatives (net) | |
| | | Three Months Ended March 31, | | | | | Three Months Ended March 31, |
(in millions) | (in millions) | 2023 | | 2022 | | 2023 | | 2022 | (in millions) | | | | | 2024 | | 2023 |
Balance at beginning of period | Balance at beginning of period | $ | 41 | | | $ | 89 | | | $ | 34 | | | $ | 24 | |
| Purchases, sales, issuances and settlements: | Purchases, sales, issuances and settlements: | |
Purchases | 3 | | | — | | | 50 | | | 77 | |
| Purchases, sales, issuances and settlements: | |
| Purchases, sales, issuances and settlements: | |
| Settlements | |
| Settlements | |
| | Settlements | Settlements | (18) | | | (21) | | | (76) | | | (13) | |
| Total gains (losses) included on the Condensed Consolidated Balance Sheet | Total gains (losses) included on the Condensed Consolidated Balance Sheet | 4 | | | (8) | | | 22 | | | (28) | |
Total gains (losses) included on the Condensed Consolidated Balance Sheet | |
Total gains (losses) included on the Condensed Consolidated Balance Sheet | |
Balance at end of period | Balance at end of period | $ | 30 | | | $ | 60 | | | $ | 30 | | | $ | 60 | |
DUKE ENERGY CAROLINAS
The following tables provide recorded balances for assets and liabilities measured at fair value on a recurring basis on the Condensed Consolidated Balance Sheets.
| | September 30, 2023 |
| March 31, 2024 | |
| March 31, 2024 | |
| March 31, 2024 | |
(in millions) | (in millions) | Total Fair Value | Level 1 | Level 2 | | Not Categorized | (in millions) | Total Fair Value | Level 1 | Level 2 | | Not Categorized |
NDTF cash and cash equivalents | NDTF cash and cash equivalents | $ | 59 | | $ | 59 | | $ | — | | | $ | — | |
NDTF equity securities | NDTF equity securities | 3,767 | | 3,728 | | — | | | 39 | |
NDTF debt securities | NDTF debt securities | 1,329 | | 320 | | 1,009 | | | — | |
| Other AFS debt securities | |
Derivative assets | Derivative assets | 93 | | — | | 93 | | | — | |
Total assets | Total assets | 5,248 | | 4,107 | | 1,102 | | | 39 | |
Derivative liabilities | Derivative liabilities | (204) | | — | | (204) | | | — | |
Net assets | Net assets | $ | 5,044 | | $ | 4,107 | | $ | 898 | | | $ | 39 | |
| | December 31, 2022 |
| December 31, 2023 | |
| December 31, 2023 | |
| December 31, 2023 | |
(in millions) | (in millions) | Total Fair Value | Level 1 | Level 2 | | Not Categorized | (in millions) | Total Fair Value | Level 1 | Level 2 | | Not Categorized |
NDTF cash and cash equivalents | NDTF cash and cash equivalents | $ | 117 | | $ | 117 | | $ | — | | | $ | — | |
NDTF equity securities | NDTF equity securities | 3,367 | | 3,325 | | — | | | 42 | |
NDTF debt securities | NDTF debt securities | 1,298 | | 323 | | 975 | | | — | |
| Derivative assets | Derivative assets | 330 | | — | | 330 | | | — | |
Derivative assets | |
Derivative assets | |
Total assets | Total assets | 5,112 | | 3,765 | | 1,305 | | | 42 | |
Derivative liabilities | Derivative liabilities | (127) | | — | | (127) | | | — | |
Net assets | Net assets | $ | 4,985 | | $ | 3,765 | | $ | 1,178 | | | $ | 42 | |
PROGRESS ENERGY
The following table provides recorded balances for assets and liabilities measured at fair value on a recurring basis on the Condensed Consolidated Balance Sheets.
| | September 30, 2023 | | December 31, 2022 | |
| March 31, 2024 | |
| March 31, 2024 | |
| March 31, 2024 | |
(in millions) | |
(in millions) | |
(in millions) | (in millions) | Total Fair Value | Level 1 | Level 2 | | Total Fair Value | Level 1 | Level 2 | |
NDTF cash and cash equivalents | NDTF cash and cash equivalents | $ | 101 | | $ | 101 | | $ | — | | | $ | 98 | | $ | 98 | | $ | — | | |
NDTF cash and cash equivalents | |
NDTF cash and cash equivalents | |
NDTF equity securities | |
NDTF equity securities | |
NDTF equity securities | NDTF equity securities | 2,763 | | 2,763 | | — | | | 2,504 | | 2,504 | | — | | |
NDTF debt securities | NDTF debt securities | 1,240 | | 435 | | 805 | | | 1,252 | | 457 | | 795 | | |
NDTF debt securities | |
NDTF debt securities | |
Other debt securities | |
Other debt securities | |
Other debt securities | Other debt securities | 23 | | — | | 23 | | | 25 | | — | | 25 | | |
Other cash and cash equivalents | Other cash and cash equivalents | 8 | | 8 | | — | | | 11 | | 11 | | — | | |
Other cash and cash equivalents | |
Other cash and cash equivalents | |
Derivative assets | Derivative assets | 196 | | — | | 196 | | | 248 | | — | | 248 | | |
Derivative assets | |
Derivative assets | |
Total assets | |
Total assets | |
Total assets | Total assets | 4,331 | | 3,307 | | 1,024 | | | 4,138 | | 3,070 | | 1,068 | | |
| Derivative liabilities | Derivative liabilities | (137) | | — | | (137) | | | (66) | | — | | (66) | | |
| Derivative liabilities | |
| Derivative liabilities | |
Net assets | Net assets | $ | 4,194 | | $ | 3,307 | | $ | 887 | | | $ | 4,072 | | $ | 3,070 | | $ | 1,002 | | |
Net assets | |
Net assets | |
| | | | | |
FINANCIAL STATEMENTS | FAIR VALUE MEASUREMENTS |
DUKE ENERGY PROGRESS
The following table provides recorded balances for assets and liabilities measured at fair value on a recurring basis on the Condensed Consolidated Balance Sheets.
| | September 30, 2023 | | December 31, 2022 | |
| March 31, 2024 | |
| March 31, 2024 | |
| March 31, 2024 | |
(in millions) | |
(in millions) | |
(in millions) | (in millions) | Total Fair Value | Level 1 | Level 2 | | Total Fair Value | Level 1 | Level 2 | |
NDTF cash and cash equivalents | NDTF cash and cash equivalents | $ | 62 | | $ | 62 | | $ | — | | | $ | 56 | | $ | 56 | | $ | — | | |
NDTF cash and cash equivalents | |
NDTF cash and cash equivalents | |
NDTF equity securities | NDTF equity securities | 2,663 | | 2,663 | | — | | | 2,411 | | 2,411 | | — | | |
NDTF equity securities | |
NDTF equity securities | |
NDTF debt securities | |
NDTF debt securities | |
NDTF debt securities | NDTF debt securities | 971 | | 226 | | 745 | | | 963 | | 225 | | 738 | | |
| Other cash and cash equivalents | Other cash and cash equivalents | 4 | | 4 | | — | | | 9 | | 9 | | — | | |
| Other cash and cash equivalents | |
| Other cash and cash equivalents | |
Derivative assets | |
Derivative assets | |
Derivative assets | Derivative assets | 79 | | — | | 79 | | | 230 | | — | | 230 | | |
Total assets | Total assets | 3,779 | | 2,955 | | 824 | | | 3,669 | | 2,701 | | 968 | | |
Total assets | |
Total assets | |
Derivative liabilities | |
Derivative liabilities | |
Derivative liabilities | Derivative liabilities | (137) | | — | | (137) | | | (48) | | — | | (48) | | |
Net assets | Net assets | $ | 3,642 | | $ | 2,955 | | $ | 687 | | | $ | 3,621 | | $ | 2,701 | | $ | 920 | | |
Net assets | |
Net assets | |
DUKE ENERGY FLORIDA
The following table provides recorded balances for assets and liabilities measured at fair value on a recurring basis on the Condensed Consolidated Balance Sheets.
| | September 30, 2023 | | December 31, 2022 | |
| March 31, 2024 | |
| March 31, 2024 | |
| March 31, 2024 | |
(in millions) | |
(in millions) | |
(in millions) | (in millions) | Total Fair Value | Level 1 | Level 2 | | Total Fair Value | Level 1 | Level 2 | |
NDTF cash and cash equivalents | NDTF cash and cash equivalents | $ | 39 | | $ | 39 | | $ | — | | | $ | 42 | | $ | 42 | | $ | — | | |
NDTF cash and cash equivalents | |
NDTF cash and cash equivalents | |
NDTF equity securities | |
NDTF equity securities | |
NDTF equity securities | NDTF equity securities | 100 | | 100 | | — | | | 93 | | 93 | | — | | |
NDTF debt securities | NDTF debt securities | 269 | | 209 | | 60 | | | 289 | | 232 | | 57 | | |
NDTF debt securities | |
NDTF debt securities | |
Other debt securities | |
Other debt securities | |
Other debt securities | Other debt securities | 23 | | — | | 23 | | | 25 | | — | | 25 | | |
Other cash and cash equivalents | Other cash and cash equivalents | 1 | | 1 | | — | | | 1 | | 1 | | — | | |
Other cash and cash equivalents | |
Other cash and cash equivalents | |
Derivative assets | Derivative assets | 117 | | — | | 117 | | | 17 | | — | | 17 | | |
Derivative assets | |
Derivative assets | |
Total assets | |
Total assets | |
Total assets | Total assets | 549 | | 349 | | 200 | | | 467 | | 368 | | 99 | | |
| Derivative liabilities | Derivative liabilities | — | | — | | — | | | (19) | | — | | (19) | | |
| Derivative liabilities | |
| Derivative liabilities | |
Net assets | Net assets | $ | 549 | | $ | 349 | | $ | 200 | | | $ | 448 | | $ | 368 | | $ | 80 | | |
Net assets | |
Net assets | |
DUKE ENERGY OHIO
The recorded balances for assets and liabilities measured at fair value on a recurring basis on the Condensed Consolidated Balance Sheets were not material at September 30, 2023,March 31, 2024, and December 31, 2022.2023.
DUKE ENERGY INDIANA
The following table provides recorded balances for assets and liabilities measured at fair value on a recurring basis on the Condensed Consolidated Balance Sheets.
| | September 30, 2023 | | December 31, 2022 | |
| March 31, 2024 | |
| March 31, 2024 | |
| March 31, 2024 | |
(in millions) | |
(in millions) | |
(in millions) | (in millions) | Total Fair Value | Level 1 | Level 2 | Level 3 | | Total Fair Value | Level 1 | Level 2 | Level 3 | |
Other equity securities | Other equity securities | $ | 88 | | $ | 88 | | $ | — | | $ | — | | | $ | 79 | | $ | 79 | | $ | — | | $ | — | | |
Other equity securities | |
Other equity securities | |
Other debt securities | |
Other debt securities | |
Other debt securities | Other debt securities | 59 | | — | | 59 | | — | | | 60 | | — | | 60 | | — | | |
Other cash and cash equivalents | Other cash and cash equivalents | 3 | | 3 | | — | | — | | | 1 | | 1 | | — | | — | | |
Other cash and cash equivalents | |
Other cash and cash equivalents | |
Derivative assets | |
Derivative assets | |
Derivative assets | Derivative assets | 55 | | 1 | | 27 | | 27 | | | 110 | | — | | 81 | | 29 | | |
Total assets | Total assets | 205 | | 92 | | 86 | | 27 | | | 250 | | 80 | | 141 | | 29 | | |
Total assets | |
Total assets | |
Derivative liabilities | |
Derivative liabilities | |
Derivative liabilities | Derivative liabilities | (4) | | (4) | | — | | — | | | (16) | | (16) | | — | | — | | |
Net assets | Net assets | $ | 201 | | $ | 88 | | $ | 86 | | $ | 27 | | | $ | 234 | | $ | 64 | | $ | 141 | | $ | 29 | | |
Net assets | |
Net assets | |
| | | | | |
FINANCIAL STATEMENTS | FAIR VALUE MEASUREMENTS |
The following table provides a reconciliation of beginning and ending balances of assets and liabilities measured at fair value using Level 3 measurements.
| | Derivatives (net) |
| Three Months Ended September 30, | | Nine Months Ended September 30, |
| | | | | Derivatives (net) | |
| | | | | Derivatives (net) | |
| | | | | Derivatives (net) | |
| | | Three Months Ended March 31, | | | | | Three Months Ended March 31, |
(in millions) | (in millions) | 2023 | | 2022 | | 2023 | | 2022 | (in millions) | | | | | 2024 | | 2023 |
Balance at beginning of period | Balance at beginning of period | $ | 37 | | | $ | 84 | | | $ | 29 | | | $ | 22 | |
| Purchases, sales, issuances and settlements: | Purchases, sales, issuances and settlements: | |
Purchases | — | | | — | | | 42 | | | 74 | |
| Purchases, sales, issuances and settlements: | |
| Purchases, sales, issuances and settlements: | |
| | Settlements | Settlements | (14) | | | (20) | | | (70) | | | (10) | |
| Total gains (losses) included on the Condensed Consolidated Balance Sheet | 4 | | | (8) | | | 26 | | | (30) | |
| Settlements | |
| Settlements | |
| Total gains included on the Condensed Consolidated Balance Sheet | |
Total gains included on the Condensed Consolidated Balance Sheet | |
Total gains included on the Condensed Consolidated Balance Sheet | |
Balance at end of period | Balance at end of period | $ | 27 | | | $ | 56 | | | $ | 27 | | | $ | 56 | |
PIEDMONT
The following table provides recorded balances for assets and liabilities measured at fair value on a recurring basis on the Condensed Consolidated Balance Sheets.
| | September 30, 2023 | | December 31, 2022 |
| March 31, 2024 | |
| March 31, 2024 | |
| March 31, 2024 | | | December 31, 2023 |
(in millions) | (in millions) | Total Fair Value | Level 1 | Level 2 | | | Total Fair Value | Level 1 | Level 2 | |
| Derivative assets | Derivative assets | $ | 1 | | $ | 1 | | $ | — | | | | $ | — | | $ | — | | $ | — | | |
| | Derivative assets | |
| Derivative assets | |
| Derivative liabilities | |
| Derivative liabilities | |
| Derivative liabilities | Derivative liabilities | (145) | | — | | (145) | | | | (168) | | — | | (168) | | |
Net (liabilities) assets | Net (liabilities) assets | $ | (144) | | $ | 1 | | $ | (145) | | | | $ | (168) | | $ | — | | $ | (168) | | |
Net (liabilities) assets | |
Net (liabilities) assets | |
QUANTITATIVE INFORMATION ABOUT UNOBSERVABLE INPUTS
The following tables include quantitative information about the Duke Energy Registrants' derivatives classified as Level 3.
| | September 30, 2023 |
| | Weighted |
| Fair Value | | Average |
| March 31, 2024 | | | March 31, 2024 |
| | | | | | | Weighted | | | | | | | | | Weighted |
| Fair Value | | | Fair Value | | | | | | Average |
Investment Type | Investment Type | (in millions) | Valuation Technique | Unobservable Input | Range | Range | Investment Type | (in millions) | Valuation Technique | Unobservable Input | Range | Range |
| Duke Energy Ohio | Duke Energy Ohio | | |
| Duke Energy Ohio | |
| Duke Energy Ohio | |
FTRs | |
FTRs | |
FTRs | FTRs | $ | 3 | | RTO auction pricing | FTR price – per MWh | $ | 0.43 | | - | $ | 2.07 | | $ | 0.77 | |
Duke Energy Indiana | Duke Energy Indiana | | |
FTRs | |
FTRs | |
FTRs | FTRs | 27 | | RTO auction pricing | FTR price – per MWh | (1.64) | | - | 12.51 | | 1.90 | |
| Duke Energy | Duke Energy | |
| Duke Energy | |
| Duke Energy | |
Total Level 3 derivatives | Total Level 3 derivatives | $ | 30 | | |
Total Level 3 derivatives | |
Total Level 3 derivatives | |
| | December 31, 2022 |
| | Weighted |
| Fair Value | | Average |
| December 31, 2023 | | | December 31, 2023 |
| | | | | | | Weighted | | | | | | | | | Weighted |
| Fair Value | | | Fair Value | | | | | | Average |
Investment Type | Investment Type | (in millions) | Valuation Technique | Unobservable Input | Range | Range | Investment Type | (in millions) | Valuation Technique | Unobservable Input | Range | Range |
| Duke Energy Ohio | Duke Energy Ohio | | | | | |
| | Duke Energy Ohio | |
| Duke Energy Ohio | |
| FTRs | |
| FTRs | |
| FTRs | FTRs | $ | 5 | | RTO auction pricing | FTR price – per MWh | $ | 0.89 | | - | $ | 6.25 | | $ | 3.35 | |
| Duke Energy Indiana | Duke Energy Indiana | | | | | | |
Duke Energy Indiana | |
Duke Energy Indiana | |
FTRs | |
FTRs | |
FTRs | FTRs | 29 | | RTO auction pricing | FTR price – per MWh | 0.09 | | - | 21.79 | | 2.74 | |
| Duke Energy | Duke Energy | |
| Duke Energy | |
| Duke Energy | |
Total Level 3 derivatives | Total Level 3 derivatives | $ | 34 | | |
Total Level 3 derivatives | |
Total Level 3 derivatives | |
| | | | | |
FINANCIAL STATEMENTS | FAIR VALUE MEASUREMENTS |
OTHER FAIR VALUE DISCLOSURES
The fair value and book value of long-term debt, including current maturities, is summarized in the following table. Debt related to the Commercial Renewables Disposal Groups is now classified as held for sale and is excluded from the following disclosures. See Note 2 for further information. Estimates determined are not necessarily indicative of amounts that could have been settled in current markets. Fair value of long-term debt uses Level 2 measurements.
| | September 30, 2023 | | December 31, 2022 |
| March 31, 2024 | | | March 31, 2024 | | December 31, 2023 |
(in millions) | (in millions) | Book Value | | Fair Value | | Book Value | | Fair Value | (in millions) | Book Value | | Fair Value | | Book Value | | Fair Value |
Duke Energy(a) | Duke Energy(a) | $ | 75,387 | | | $ | 65,070 | | | $ | 69,751 | | | $ | 61,986 | |
Duke Energy Carolinas | Duke Energy Carolinas | 15,995 | | | 13,973 | | | 14,266 | | | 12,943 | |
Progress Energy | Progress Energy | 23,281 | | | 20,417 | | | 22,439 | | | 20,467 | |
Duke Energy Progress | Duke Energy Progress | 11,718 | | | 9,808 | | | 11,087 | | | 9,689 | |
Duke Energy Florida | Duke Energy Florida | 9,920 | | | 8,892 | | | 9,709 | | | 8,991 | |
Duke Energy Ohio | Duke Energy Ohio | 3,692 | | | 3,264 | | | 3,245 | | | 2,927 | |
Duke Energy Indiana | Duke Energy Indiana | 4,504 | | | 3,874 | | | 4,307 | | | 3,913 | |
Piedmont | Piedmont | 3,713 | | | 3,123 | | | 3,363 | | | 2,940 | |
(a)Book value of long-term debt includes $1.1$1.1 billion and $1.2$1.0 billion at September 30, 2023,March 31, 2024, and December 31, 2022,2023, respectively, of net unamortized debt discount and premium of purchase accounting adjustments related to the mergers with Progress Energy and Piedmont that are excluded from fair value of long-term debt.
At both September 30, 2023,March 31, 2024, and December 31, 2022,2023, fair value of cash and cash equivalents, accounts and notes receivable, accounts payable, notes payable and commercial paper and nonrecourse notes payable of VIEs are not materially different from their carrying amounts because of the short-term nature of these instruments and/or because the stated rates approximate market rates.
13.12. VARIABLE INTEREST ENTITIES
CONSOLIDATED VIEs
The obligations of the consolidated VIEs discussed in the following paragraphs are nonrecourse to the Duke Energy Registrants. The registrants have no requirement to provide liquidity to, purchase assets of or guarantee performance of these VIEs unless noted in the following paragraphs.
No financial support was provided to any of the consolidated VIEs during the ninethree months ended September 30, 2023,March 31, 2024, and the year ended December 31, 2022,2023, or is expected to be provided in the future that was not previously contractually required.
Receivables Financing – DERF/DEPR/DEFR
DERF, DEPR and DEFR are bankruptcy remote, special purpose subsidiaries of Duke Energy Carolinas, Duke Energy Progress and Duke Energy Florida, respectively. DERF, DEPR and DEFR are wholly owned LLCs with separate legal existence from their parent companies, and their assets are not generally available to creditors of their parent companies. On a revolving basis, DERF, DEPR and DEFR buy certain accounts receivable arising from the sale of electricity and related services from their parent companies.
DERF, DEPR and DEFR borrow amounts under credit facilities to buy these receivables. Borrowing availability from the credit facilities is limited to the amount of qualified receivables purchased, which generally exclude receivables past due more than a predetermined number of days and reserves for expected past-due balances. The sole source of funds to satisfy the related debt obligations is cash collections from the receivables. Amounts borrowed under the DERF and DEPR credit facilitiesfacility are reflected on the Condensed Consolidated Balance Sheets as Long-Term Debt. Amounts borrowed under the DERF and DEFR credit facilityfacilities are reflected on the Condensed Consolidated Balance Sheets as Current maturities of long-term debt.
The most significant activity that impacts the economic performance of DERF, DEPR and DEFR are the decisions made to manage delinquent receivables. Duke Energy Carolinas, Duke Energy Progress and Duke Energy Florida are considered the primary beneficiaries and consolidate DERF, DEPR and DEFR, respectively, as they make those decisions.
In April 2024, Duke Energy Florida repaid all outstanding DEFR borrowings totaling $325 million and terminated the related DEFR credit facility. Additionally, Duke Energy Florida's related restricted receivables outstanding at DEFR at the time of termination totaled $459 million and were transferred back to Duke Energy Florida to be collected and reported as Receivables on the Condensed Consolidated Balance Sheets.
Receivables Financing – CRC
CRC is a bankruptcy remote, special purpose entity indirectly owned by Duke Energy. On a revolving basis, CRC buysbought certain accounts receivable arising from the sale of electricity, natural gas and related services from Duke Energy Ohio and Duke Energy Indiana. CRC borrowsthen borrowed amounts under a credit facility to buy the receivables from Duke Energy Ohio and Duke Energy Indiana. Borrowing availability from the credit facility iswas limited to the amount of qualified receivables sold to CRC, which generally excludeexcluded receivables past due more than a predetermined number of days and reservesreserved for expected past-due balances. The sole source of funds to satisfy the related debt obligation iswas cash collections from the receivables. Amounts borrowed under the credit facility are reflected on Duke Energy's Condensed Consolidated Balance Sheets as Long-Term Debt.
The proceeds Duke Energy Ohio and Duke Energy Indiana receivereceived from the sale of receivables to CRC arewere approximately 75% cash and 25% in the form of a subordinated note from CRC. The subordinated note iswas a retained interest in the receivables sold. Depending on collection experience, additional equity infusions to CRC maywould be required by Duke Energy to maintain a minimum equity balance of $3 million.
| | | | | |
FINANCIAL STATEMENTS | VARIABLE INTEREST ENTITIES |
CRC iswas considered a VIE because (i) equity capitalization iswas insufficient to support its operations, (ii) power to direct the activities that most significantly impact the economic performance of the entity iswas not held by the equity holder and (iii) deficiencies in net worth of CRC arewere funded by Duke Energy. The most significant activities that impactimpacted the economic performance of CRC arewere decisions made to manage delinquent receivables. Duke Energy iswas considered the primary beneficiary and consolidatesconsolidated CRC as it makesmade these decisions. Neither Duke Energy Ohio nor Duke Energy Indiana consolidateconsolidated CRC.
In March 2024, Duke Energy repaid all outstanding CRC borrowings totaling $350 million and terminated the related CRC credit facility. Additionally, Duke Energy's related restricted receivables outstanding at CRC at the time of termination totaled $682 million, consisting of $316 million and $366 million of restricted receivables that were transferred back to Duke Energy Indiana and Duke Energy Ohio, respectively, to be collected and reported as Receivables on the Condensed Consolidated Balance Sheets.
Receivables Financing – Credit Facilities
The following table summarizes the amounts and expiration dates of the credit facilities and associated restricted receivables described above.
| | | | | | | | | | | | | | | | | | | | | | | |
| Duke Energy |
| | | Duke Energy | | Duke Energy | | Duke Energy |
| | | Carolinas | | Progress | | Florida |
(in millions) | CRC | | DERF | | DEPR | | DEFR |
Expiration date | February 2025 | | January 2025 | | April 2025 | | April 2024 |
Credit facility amount | $ | 350 | | | $ | 500 | | | $ | 400 | | | $ | 325 | |
Amounts borrowed at September 30, 2023 | 336 | | | 500 | | | 400 | | | 325 | |
Amounts borrowed at December 31, 2022 | 350 | | | 471 | | | 400 | | | 250 | |
Restricted Receivables at September 30, 2023 | 619 | | | 1,028 | | | 831 | | | 758 | |
Restricted Receivables at December 31, 2022 | 917 | | | 928 | | | 793 | | | 490 | |
| | | | | | | | | | | | | | | | | | | | | | | |
| Duke Energy |
| | | Duke Energy | | Duke Energy | | Duke Energy |
| | | Carolinas | | Progress | | Florida |
(in millions) | CRC | | DERF | | DEPR | | DEFR |
Expiration date | (a) | | January 2025 | | April 2025 | | (b) |
Credit facility amount | (a) | | $ | 500 | | | $ | 400 | | | (b) |
Amounts borrowed at March 31, 2024 | — | | | 500 | | | 400 | | | 325 | |
Amounts borrowed at December 31, 2023 | 312 | | | 500 | | | 400 | | | 325 | |
Restricted Receivables at March 31, 2024 | — | | | 997 | | | 789 | | | 467 | |
Restricted Receivables at December 31, 2023 | 663 | | | 991 | | | 833 | | | 532 | |
(a) In March 2024, Duke Energy repaid all outstanding CRC borrowings and terminated the related $350 million CRC credit facility.
(b) In April 2024, Duke Energy Florida repaid all outstanding DEFR borrowings and terminated the related $325 million DEFR credit facility.
Nuclear Asset-Recovery Bonds – Duke Energy Florida Project Finance
Duke Energy Florida Project Finance, LLC (DEFPF) is a bankruptcy remote, wholly owned special purpose subsidiary of Duke Energy Florida. DEFPF was formed in 2016 for the sole purpose of issuing nuclear asset-recovery bonds to finance Duke Energy Florida's unrecovered regulatory asset related to Crystal River Unit 3.
In 2016, DEFPF issued senior secured bonds and used the proceeds to acquire nuclear asset-recovery property from Duke Energy Florida. The nuclear asset-recovery property acquired includes the right to impose, bill, collect and adjust a non-bypassable nuclear asset-recovery charge from all Duke Energy Florida retail customers until the bonds are paid in full and all financing costs have been recovered. The nuclear asset-recovery bonds are secured by the nuclear asset-recovery property and cash collections from the nuclear asset-recovery charges are the sole source of funds to satisfy the debt obligation. The bondholders have no recourse to Duke Energy Florida.
DEFPF is considered a VIE primarily because the equity capitalization is insufficient to support its operations. Duke Energy Florida has the power to direct the significant activities of the VIE as described above and therefore Duke Energy Florida is considered the primary beneficiary and consolidates DEFPF.
The following table summarizes the impact of DEFPF on Duke Energy Florida's Condensed Consolidated Balance Sheets.
| (in millions) | (in millions) | September 30, 2023 | December 31, 2022 | (in millions) | March 31, 2024 | December 31, 2023 |
Receivables of VIEs | $ | 8 | | $ | 6 | |
| Regulatory Assets: Current | |
Regulatory Assets: Current | |
Regulatory Assets: Current | Regulatory Assets: Current | 58 | | 55 | |
Current Assets: Other | Current Assets: Other | 24 | | 41 | |
Other Noncurrent Assets: Regulatory assets | Other Noncurrent Assets: Regulatory assets | 816 | | 826 | |
Current Liabilities: Other | Current Liabilities: Other | 2 | | 9 | |
Current maturities of long-term debt | Current maturities of long-term debt | 58 | | 56 | |
Long-Term Debt | Long-Term Debt | 832 | | 890 | |
Storm Recovery Bonds – Duke Energy Carolinas NC Storm Funding and Duke Energy Progress NC Storm Funding
Duke Energy Carolinas NC Storm Funding, LLC (DECNCSF) and Duke Energy Progress NC Storm Funding, LLC (DEPNCSF) are bankruptcy remote, wholly owned special purpose subsidiaries of Duke Energy Carolinas and Duke Energy Progress, respectively. These entities were formed in 2021 for the sole purpose of issuing storm recovery bonds to finance certain of Duke Energy Carolinas’ and Duke Energy Progress’ unrecovered regulatory assets related to storm costs.costs incurred in North Carolina.
In November 2021, DECNCSF and DEPNCSF issued $237 million and $770 million of senior secured bonds, respectively and used the proceeds to acquire storm recovery property from Duke Energy Carolinas and Duke Energy Progress. The storm recovery property was created by state legislation and NCUC financing orders for the purpose of financing storm costs incurred in 2018 and 2019. The storm recovery property acquired includes the right to impose, bill, collect and adjust a non-bypassable charge from all Duke Energy Carolinas’ and Duke Energy Progress’ North Carolina retail customers until the bonds are paid in full and all financing costs have been recovered. The storm recovery bonds are secured by the storm recovery property and cash collections from the storm recovery charges are the sole source of funds to satisfy the debt obligation. The bondholders have no recourse to Duke Energy Carolinas or Duke Energy Progress.
| | | | | |
FINANCIAL STATEMENTS | VARIABLE INTEREST ENTITIES |
DECNCSF and DEPNCSF are considered VIEs primarily because the equity capitalization is insufficient to support their operations. Duke Energy Carolinas and Duke Energy Progress have the power to direct the significant activities of the VIEs as described above and therefore Duke Energy Carolinas and Duke Energy Progress are considered the primary beneficiaries and consolidate DECNCSF and DEPNCSF, respectively.
| | | | | |
FINANCIAL STATEMENTS | VARIABLE INTEREST ENTITIES |
The following table summarizes the impact of these VIEs on Duke Energy Carolinas’ and Duke Energy Progress’ Consolidated Balance Sheets.
| | September 30, 2023 | | December 31, 2022 |
| Duke Energy | | Duke Energy |
| March 31, 2024 | | | March 31, 2024 | | December 31, 2023 |
| Duke Energy | | | Duke Energy | Duke Energy | | Duke Energy | Duke Energy |
(in millions) | (in millions) | Carolinas | Progress | | Carolinas | Progress | (in millions) | Carolinas | Progress | | Carolinas | Progress |
Regulatory Assets: Current | Regulatory Assets: Current | $ | 12 | | $ | 39 | | | $ | 12 | | $ | 39 | |
Current Assets: Other | Current Assets: Other | 5 | | 16 | | | 8 | | 29 | |
Other Noncurrent Assets: Regulatory assets | Other Noncurrent Assets: Regulatory assets | 199 | | 653 | | | 208 | | 681 | |
Other Noncurrent Assets: Other | Other Noncurrent Assets: Other | 1 | | 2 | | | 1 | | 2 | |
| Current Liabilities: Other | Current Liabilities: Other | 1 | | 4 | | | 3 | | 8 | |
Current Liabilities: Other | |
Current Liabilities: Other | |
Current maturities of long-term debt | Current maturities of long-term debt | 11 | | 34 | | | 10 | | 34 | |
Long-Term Debt | Long-Term Debt | 208 | | 680 | | | 219 | | 714 | |
Storm Recovery Bonds – Duke Energy Progress SC Storm Funding
Duke Energy Progress SC Storm Funding, LLC (DEPSCSF) is a bankruptcy remote, wholly owned special purpose subsidiary of Duke Energy Progress. This entity was formed in 2023 for the sole purpose of issuing storm recovery bonds to finance certain of Duke Energy Progress’ unrecovered regulatory assets related to storm costs incurred in South Carolina.
In April 2024, DEPSCSF issued $177 million of senior secured bonds and used the proceeds to acquire storm recovery property from Duke Energy Progress. The storm recovery property was created by state legislation and a PSCSC financing order for the purpose of financing storm costs incurred from 2014 through 2022. The storm recovery property acquired includes the right to impose, bill, collect and adjust a non-bypassable charge from all Duke Energy Progress’ South Carolina retail customers until the bonds are paid in full and all financing costs have been recovered. The storm recovery bonds are secured by the storm recovery property and cash collections from the storm recovery charges are the sole source of funds to satisfy the debt obligation. The bondholders have no recourse to Duke Energy Progress.
DEPSCSF is considered a VIE primarily because the equity capitalization is insufficient to support their operations. Duke Energy Progress has the power to direct the significant activities of the VIE as described above and therefore Duke Energy Progress is considered the primary beneficiary and consolidates DEPSCSF.
Procurement Company – Duke Energy Florida
Duke Energy Florida Purchasing Company, LLC (DEF ProCo) is a wholly owned special purpose subsidiary of Duke Energy Florida. DEF ProCo
was formed in 2023 as the primary procurer of equipment, materials and supplies for Duke Energy Florida. DEF ProCo interacts with
third-party suppliers on Duke Energy Florida’s behalf with credit and risk support provided by Duke Energy Florida. DEF ProCo is a qualified
reseller under Florida tax law and conveys acquired assets to Duke Energy Florida through leases on each acquired asset.
This entity is considered a VIE primarily because the equity capitalization is insufficient to support their operations. Duke Energy Florida has the power to direct the significant activities of this VIE as described above and therefore Duke Energy Florida is considered the primary beneficiary and consolidates the procurement company.
The following table summarizes the impact of this VIE on Duke Energy Florida's Consolidated Balance Sheets.
| | | | | | | | | | | | |
(in millions) | March 31, 2024 | December 31, 2023 | | | |
Inventory | $ | 470 | | $ | 462 | | | | | |
Accounts Payable | 179 | | 188 | | | | | |
| | | | | |
FINANCIAL STATEMENTS | VARIABLE INTEREST ENTITIES |
NON-CONSOLIDATED VIEs
The following tables summarize the impact of non-consolidated VIEs on the Condensed Consolidated Balance Sheets.
| | | | | | | | | | | | | | | | | | | | | | | |
| September 30, 2023 |
| Duke Energy | | | | | | | | Duke | | Duke |
| Natural Gas | | | | | | | | Energy | | Energy |
(in millions) | Investments | | | | | | | | Ohio | | Indiana |
Receivables from affiliated companies | $ | — | | | | | | | | | $ | 122 | | | $ | 161 | |
| | | | | | | | | | | |
Investments in equity method unconsolidated affiliates | 61 | | | | | | | | | — | | | — | |
Other noncurrent assets | 43 | | | | | | | | | — | | | — | |
Total assets | $ | 104 | | | | | | | | | $ | 122 | | | $ | 161 | |
| | | | | | | | | | | |
Other current liabilities | 18 | | | | | | | | | — | | | — | |
| | | | | | | | | | | |
Other noncurrent liabilities | 12 | | | | | | | | | — | | | — | |
Total liabilities | $ | 30 | | | | | | | | | $ | — | | | $ | — | |
Net assets | $ | 74 | | | | | | | | | $ | 122 | | | $ | 161 | |
| | | | | | | | | | | | | | | | | | | | | | | |
| March 31, 2024 |
| Duke Energy | | | | | | | | Duke | | Duke |
| Natural Gas | | | | | | | | Energy | | Energy |
(in millions) | Investments | | | | | | | | Ohio | | Indiana |
Receivables from affiliated companies | $ | — | | | | | | | | | $ | — | | | $ | — | |
| | | | | | | | | | | |
Investments in equity method unconsolidated affiliates | 63 | | | | | | | | | — | | | — | |
Other noncurrent assets | 30 | | | | | | | | | — | | | — | |
Total assets | $ | 93 | | | | | | | | | $ | — | | | $ | — | |
| | | | | | | | | | | |
Other current liabilities | 1 | | | | | | | | | — | | | — | |
| | | | | | | | | | | |
Other noncurrent liabilities | 6 | | | | | | | | | — | | | — | |
Total liabilities | $ | 7 | | | | | | | | | $ | — | | | $ | — | |
Net assets | $ | 86 | | | | | | | | | $ | — | | | $ | — | |
| | December 31, 2022 |
| Duke Energy | | | Duke | | Duke |
| Natural Gas | | | Energy | | Energy |
| December 31, 2023 | |
| December 31, 2023 | |
| December 31, 2023 | |
| Duke Energy | | | Duke Energy | | | | | | | | Duke | | Duke |
| Natural Gas | | | Natural Gas | | | | | | | | Energy | | Energy |
(in millions) | (in millions) | Investments | | | Ohio | | Indiana | (in millions) | Investments | | | | | | | | Ohio | | Indiana |
Receivables from affiliated companies | Receivables from affiliated companies | $ | — | | | | $ | 198 | | | $ | 317 | |
| Investments in equity method unconsolidated affiliates | |
Investments in equity method unconsolidated affiliates | |
Investments in equity method unconsolidated affiliates | Investments in equity method unconsolidated affiliates | 43 | | | | — | | | — | |
Other noncurrent assets | Other noncurrent assets | 45 | | | | — | | | — | |
Total assets | Total assets | $ | 88 | | | | $ | 198 | | | $ | 317 | |
| Other current liabilities | Other current liabilities | 59 | | | | — | | | — | |
Other current liabilities | |
Other current liabilities | |
| Other noncurrent liabilities | Other noncurrent liabilities | 47 | | | | — | | | — | |
Other noncurrent liabilities | |
Other noncurrent liabilities | |
Total liabilities | Total liabilities | $ | 106 | | | | $ | — | | | $ | — | |
Net (liabilities) assets | $ | (18) | | | | $ | 198 | | | $ | 317 | |
Net assets | |
The Duke Energy Registrants are not aware of any situations where the maximum exposure to loss significantly exceeds the carrying values shown above.
Natural Gas Investments
Duke Energy has investments in various joint ventures including pipeline and renewable natural gas projects. These entities are considered VIEs due to having insufficient equity to finance their own activities without subordinated financial support. Duke Energy does not have the power to direct the activities that most significantly impact the economic performance, the obligation to absorb losses or the right to receive benefits of these VIEs and therefore does not consolidate these entities.
CRC
See discussion under Consolidated VIEs for additional information related to CRC.
Amounts included in Receivables from affiliated companies in the above table for Duke Energy Ohio and Duke Energy Indiana reflect their retained interest in receivables sold to CRC. TheseCRC as of December 31, 2023. The subordinated notes held by Duke Energy Ohio and Duke Energy Indiana are stated at fair value.value as of December 31, 2023.
The following table shows the gross and net receivables sold.
| | | | | | | | | | | | | | | | | | | | | | | |
| Duke Energy Ohio | | Duke Energy Indiana |
(in millions) | March 31, 2024 | | December 31, 2023 | | March 31, 2024 | | December 31, 2023 |
Receivables sold | $ | — | | | $ | 361 | | | $ | — | | | $ | 351 | |
Less: Retained interests | — | | | 150 | | | — | | | 208 | |
Net receivables sold | $ | — | | | $ | 211 | | | $ | — | | | $ | 143 | |
| | | | | |
FINANCIAL STATEMENTS | VARIABLE INTEREST ENTITIES |
The following table shows the gross and net receivables sold.
| | | | | | | | | | | | | | | | | | | | | | | |
| Duke Energy Ohio | | Duke Energy Indiana |
(in millions) | September 30, 2023 | | December 31, 2022 | | September 30, 2023 | | December 31, 2022 |
Receivables sold | $ | 334 | | | $ | 423 | | | $ | 330 | | | $ | 508 | |
Less: Retained interests | 122 | | | 198 | | | 161 | | | 317 | |
Net receivables sold | $ | 212 | | | $ | 225 | | | $ | 169 | | | $ | 191 | |
The following table shows sales and cash flows related to receivables sold.sold and reflects CRC activity prior to its termination in March 2024.
| | | Duke Energy Ohio | | | Duke Energy Indiana |
| | | Nine Months Ended | | | | Nine Months Ended |
| | | September 30, | | | | September 30, |
| | | | | Duke Energy Ohio | |
| | | | | Duke Energy Ohio | |
| | | | | Duke Energy Ohio | | | | | | Duke Energy Indiana |
| | | Three Months Ended | | | | | Three Months Ended | | | | Three Months Ended |
| | | March 31, | | | | | March 31, | | | | March 31, |
(in millions) | (in millions) | | | 2023 | | 2022 | | | | 2023 | | 2022 | (in millions) | | | | | 2024 | | 2023 | | | | | | 2024 | | 2023 |
Sales | Sales | | | | |
Receivables sold | |
Receivables sold | |
Receivables sold | Receivables sold | | | $ | 1,973 | | | $ | 1,869 | | | | | $ | 2,453 | | | $ | 2,646 | |
Loss recognized on sale | Loss recognized on sale | | | 25 | | | 11 | | | | | 29 | | | 15 | |
Cash flows | Cash flows | | | | |
Cash proceeds from receivables sold | Cash proceeds from receivables sold | | | $ | 2,024 | | | $ | 1,757 | | | | | $ | 2,580 | | | $ | 2,465 | |
Collection fees received | | | 1 | | | 1 | | | | | 1 | | | 1 | |
Cash proceeds from receivables sold | |
Cash proceeds from receivables sold | |
| Return received on retained interests | Return received on retained interests | | | 15 | | | 6 | | | | | 19 | | | 9 | |
Return received on retained interests | |
Return received on retained interests | |
Cash flows from sales of receivables are reflected within Cash Flows From Operating Activities and Cash Flows from Investing Activities on Duke Energy Ohio’s and Duke Energy Indiana’s Condensed Consolidated Statements of Cash Flows.
14.13. REVENUE
Duke Energy earns substantially all of its revenues through its reportable segments, EU&I and GU&I.
Electric Utilities and Infrastructure
EU&I earns the majority of its revenues through retail and wholesale electric service through the generation, transmission, distribution and sale of electricity. Duke Energy generally provides retail and wholesale electric service customers with their full electric load requirements or with supplemental load requirements when the customer has other sources of electricity.
The majority of wholesale revenues are full requirements contracts where the customers purchase the substantial majority of their energy needs and do not have a fixed quantity of contractually required energy or capacity. As such, related forecasted revenues are considered optional purchases. Supplemental requirements contracts that include contracted blocks of energy and capacity at contractually fixed prices have the following estimated remaining performance obligations:
| | Remaining Performance Obligations |
| Remaining Performance Obligations | | | Remaining Performance Obligations |
(in millions) | (in millions) | 2023 | 2024 | 2025 | 2026 | 2027 | Thereafter | Total | (in millions) | 2024 | 2025 | 2026 | 2027 | 2028 | Thereafter | Total |
| Progress Energy | |
Progress Energy | |
Progress Energy | Progress Energy | $ | 15 | | $ | 70 | | $ | 7 | | $ | 7 | | $ | 7 | | $ | 36 | | $ | 142 | |
Duke Energy Progress | Duke Energy Progress | 2 | | 8 | | — | | — | | — | | — | | 10 | |
Duke Energy Florida | Duke Energy Florida | 13 | | 62 | | 7 | | 7 | | 7 | | 36 | | 132 | |
| Duke Energy Indiana | Duke Energy Indiana | 4 | | 16 | | 17 | | 15 | | 7 | | 5 | | 64 | |
Duke Energy Indiana | |
Duke Energy Indiana | |
Revenues for block sales are recognized monthly as energy is delivered and stand-ready service is provided, consistent with invoiced amounts and unbilled estimates.
Gas Utilities and Infrastructure
GU&I earns its revenue through retail and wholesale natural gas service through the transportation, distribution and sale of natural gas. Duke Energy generally provides retail and wholesale natural gas service customers with all natural gas load requirements. Additionally, while natural gas can be stored, substantially all natural gas provided by Duke Energy is consumed by customers simultaneously with receipt of delivery.
Fixed-capacity payments under long-term contracts for the GU&I segment include minimum margin contracts and supply arrangements with municipalities and power generation facilities. Revenues for related sales are recognized monthly as natural gas is delivered and stand-ready service is provided, consistent with invoiced amounts and unbilled estimates. Estimated remaining performance obligations are as follows:
| | | | | | | | | | | | | | | | | | | | | | | |
| Remaining Performance Obligations |
(in millions) | 2023 | 2024 | 2025 | 2026 | 2027 | Thereafter | Total |
| | | | | | | |
Piedmont | $ | 17 | | $ | 62 | | $ | 61 | | $ | 51 | | $ | 49 | | $ | 241 | | $ | 481 | |
| | | | | |
FINANCIAL STATEMENTS | REVENUE |
| | | | | | | | | | | | | | | | | | | | | | | |
| Remaining Performance Obligations |
(in millions) | 2024 | 2025 | 2026 | 2027 | 2028 | Thereafter | Total |
| | | | | | | |
Piedmont | $ | 49 | | $ | 61 | | $ | 51 | | $ | 49 | | $ | 46 | | $ | 195 | | $ | 451 | |
Other
The remainder of Duke Energy’s operations is presented as Other, which does not include material revenues from contracts with customers.
| | | | | |
FINANCIAL STATEMENTS | REVENUE |
Disaggregated Revenues
Disaggregated revenues are presented as follows:
| | Three Months Ended September 30, 2023 |
| | Duke | | Duke | |
| Three Months Ended March 31, 2024 | | | Three Months Ended March 31, 2024 |
| | Duke | |
(in millions) | |
(in millions) | |
(in millions) | (in millions) | Duke | Energy | Progress | Energy | |
By market or type of customer | By market or type of customer | Energy | Carolinas | Energy | Progress | Florida | Ohio | Indiana | Piedmont |
By market or type of customer | |
By market or type of customer | | Energy | Carolinas | Energy | Progress | Florida | Ohio | Indiana | Piedmont |
Electric Utilities and Infrastructure | Electric Utilities and Infrastructure | |
Residential | |
Residential | |
Residential | Residential | $ | 3,602 | | $ | 988 | | $ | 2,043 | | $ | 756 | | $ | 1,287 | | $ | 268 | | $ | 303 | | $ | — | |
General | General | 2,229 | | 779 | | 1,089 | | 467 | | 622 | | 135 | | 224 | | — | |
Industrial | Industrial | 912 | | 395 | | 298 | | 203 | | 95 | | 28 | | 190 | | — | |
Wholesale | Wholesale | 647 | | 141 | | 422 | | 364 | | 58 | | 12 | | 71 | | — | |
Other revenues | Other revenues | 285 | | 75 | | 175 | | 100 | | 75 | | 24 | | 56 | | — | |
Total Electric Utilities and Infrastructure revenue from contracts with customers | Total Electric Utilities and Infrastructure revenue from contracts with customers | $ | 7,675 | | $ | 2,378 | | $ | 4,027 | | $ | 1,890 | | $ | 2,137 | | $ | 467 | | $ | 844 | | $ | — | |
| Gas Utilities and Infrastructure | Gas Utilities and Infrastructure | |
Gas Utilities and Infrastructure | |
Gas Utilities and Infrastructure | |
Residential | |
Residential | |
Residential | Residential | $ | 152 | | $ | — | | $ | — | | $ | — | | $ | — | | $ | 73 | | $ | — | | $ | 80 | |
Commercial | Commercial | 88 | | — | | — | | — | | — | | 24 | | — | | 65 | |
Industrial | Industrial | 26 | | — | | — | | — | | — | | 4 | | — | | 23 | |
Power Generation | Power Generation | — | | — | | — | | — | | — | | — | | — | | 23 | |
Other revenues | Other revenues | 28 | | — | | — | | — | | — | | 4 | | — | | 8 | |
Total Gas Utilities and Infrastructure revenue from contracts with customers | Total Gas Utilities and Infrastructure revenue from contracts with customers | $ | 294 | | $ | — | | $ | — | | $ | — | | $ | — | | $ | 105 | | $ | — | | $ | 199 | |
| Other | Other | |
Other | |
Other | |
Revenue from contracts with customers | |
Revenue from contracts with customers | |
Revenue from contracts with customers | Revenue from contracts with customers | $ | 8 | | $ | — | | $ | — | | $ | — | | $ | — | | $ | — | | $ | — | | $ | — | |
Total revenue from contracts with customers | Total revenue from contracts with customers | $ | 7,977 | | $ | 2,378 | | $ | 4,027 | | $ | 1,890 | | $ | 2,137 | | $ | 572 | | $ | 844 | | $ | 199 | |
| Other revenue sources(a) | Other revenue sources(a) | $ | 17 | | $ | 15 | | $ | 28 | | $ | (4) | | $ | 27 | | $ | 5 | | $ | 7 | | $ | 9 | |
Other revenue sources(a) | |
Other revenue sources(a) | |
Total revenues | Total revenues | $ | 7,994 | | $ | 2,393 | | $ | 4,055 | | $ | 1,886 | | $ | 2,164 | | $ | 577 | | $ | 851 | | $ | 208 | |
| | | | | |
FINANCIAL STATEMENTS | REVENUE |
| | Three Months Ended September 30, 2022 |
| | Duke | | Duke | |
| Three Months Ended March 31, 2023 | | | Three Months Ended March 31, 2023 |
| | Duke | |
(in millions) | |
(in millions) | |
(in millions) | (in millions) | Duke | Energy | Progress | Energy | |
By market or type of customer | By market or type of customer | Energy | Carolinas | Energy | Progress | Florida | Ohio | Indiana | Piedmont |
By market or type of customer | |
By market or type of customer | | Energy | Carolinas | Energy | Progress | Florida | Ohio | Indiana | Piedmont |
Electric Utilities and Infrastructure | Electric Utilities and Infrastructure | |
Residential | |
Residential | |
Residential | Residential | $ | 3,250 | | $ | 887 | | $ | 1,719 | | $ | 670 | | $ | 1,049 | | $ | 249 | | $ | 396 | | $ | — | |
General | General | 2,077 | | 686 | | 947 | | 419 | | 528 | | 150 | | 291 | | — | |
Industrial | Industrial | 986 | | 366 | | 298 | | 216 | | 82 | | 62 | | 260 | | — | |
Wholesale | Wholesale | 874 | | 140 | | 588 | | 403 | | 185 | | 32 | | 115 | | — | |
Other revenues | Other revenues | 248 | | 105 | | 317 | | 259 | | 58 | | 15 | | 19 | | — | |
Total Electric Utilities and Infrastructure revenue from contracts with customers | Total Electric Utilities and Infrastructure revenue from contracts with customers | $ | 7,435 | | $ | 2,184 | | $ | 3,869 | | $ | 1,967 | | $ | 1,902 | | $ | 508 | | $ | 1,081 | | $ | — | |
| Gas Utilities and Infrastructure | Gas Utilities and Infrastructure | |
Gas Utilities and Infrastructure | |
Gas Utilities and Infrastructure | |
Residential | |
Residential | |
Residential | Residential | $ | 167 | | $ | — | | $ | — | | $ | — | | $ | — | | $ | 88 | | $ | — | | $ | 79 | |
Commercial | Commercial | 108 | | — | | — | | — | | — | | 26 | | — | | 82 | |
Industrial | Industrial | 34 | | — | | — | | — | | — | | 4 | | — | | 30 | |
Power Generation | Power Generation | — | | — | | — | | — | | — | | — | | — | | 24 | |
Other revenues | Other revenues | 103 | | — | | — | | — | | — | | 4 | | — | | 83 | |
Total Gas Utilities and Infrastructure revenue from contracts with customers | Total Gas Utilities and Infrastructure revenue from contracts with customers | $ | 412 | | $ | — | | $ | — | | $ | — | | $ | — | | $ | 122 | | $ | — | | $ | 298 | |
| Other | Other | |
Other | |
Other | |
Revenue from contracts with customers | |
Revenue from contracts with customers | |
Revenue from contracts with customers | Revenue from contracts with customers | $ | 6 | | $ | — | | $ | — | | $ | — | | $ | — | | $ | — | | $ | — | | $ | — | |
Total revenue from contracts with customers | Total revenue from contracts with customers | $ | 7,853 | | $ | 2,184 | | $ | 3,869 | | $ | 1,967 | | $ | 1,902 | | $ | 630 | | $ | 1,081 | | $ | 298 | |
| Other revenue sources(a) | Other revenue sources(a) | $ | (11) | | $ | (9) | | $ | 12 | | $ | 2 | | $ | 5 | | $ | (2) | | $ | 14 | | $ | 8 | |
Other revenue sources(a) | |
Other revenue sources(a) | |
Total revenues | Total revenues | $ | 7,842 | | $ | 2,175 | | $ | 3,881 | | $ | 1,969 | | $ | 1,907 | | $ | 628 | | $ | 1,095 | | $ | 306 | |
(a)Other revenue sources include revenues from leases, derivatives and alternative revenue programs that are not considered revenues from contracts with customers. Alternative revenue programs in certain jurisdictions include regulatory mechanisms that periodically adjust for over or under collection of related revenues.
| | | | | |
FINANCIAL STATEMENTS | REVENUE |
| | | | | | | | | | | | | | | | | | | | | | | | | | |
| Nine Months Ended September 30, 2023 |
| | Duke | | Duke | Duke | Duke | Duke | |
(in millions) | Duke | Energy | Progress | Energy | Energy | Energy | Energy | |
By market or type of customer | Energy | Carolinas | Energy | Progress | Florida | Ohio | Indiana | Piedmont |
Electric Utilities and Infrastructure | | | | | | | | |
Residential | $ | 9,193 | | $ | 2,527 | | $ | 5,019 | | $ | 1,902 | | $ | 3,117 | | $ | 710 | | $ | 937 | | $ | — | |
General | 5,936 | | 1,974 | | 2,844 | | 1,194 | | 1,650 | | 411 | | 706 | | — | |
Industrial | 2,630 | | 1,011 | | 844 | | 560 | | 284 | | 155 | | 618 | | — | |
Wholesale | 1,695 | | 402 | | 1,064 | | 942 | | 122 | | 33 | | 195 | | — | |
Other revenues | 618 | | 202 | | 440 | | 238 | | 202 | | 73 | | 103 | | — | |
Total Electric Utilities and Infrastructure revenue from contracts with customers | $ | 20,072 | | $ | 6,116 | | $ | 10,211 | | $ | 4,836 | | $ | 5,375 | | $ | 1,382 | | $ | 2,559 | | $ | — | |
| | | | | | | | |
Gas Utilities and Infrastructure | | | | | | | | |
Residential | $ | 838 | | $ | — | | $ | — | | $ | — | | $ | — | | $ | 317 | | $ | — | | $ | 522 | |
Commercial | 421 | | — | | — | | — | | — | | 113 | | — | | 309 | |
Industrial | 103 | | — | | — | | — | | — | | 19 | | — | | 84 | |
Power Generation | — | | — | | — | | — | | — | | — | | — | | 69 | |
Other revenues | 93 | | — | | — | | — | | — | | 15 | | — | | 32 | |
Total Gas Utilities and Infrastructure revenue from contracts with customers | $ | 1,455 | | $ | — | | $ | — | | $ | — | | $ | — | | $ | 464 | | $ | — | | $ | 1,016 | |
| | | | | | | | |
Other | | | | | | | | |
Revenue from contracts with customers | $ | 24 | | $ | — | | $ | — | | $ | — | | $ | — | | $ | — | | $ | — | | $ | — | |
| | | | | | | | |
Total Revenue from contracts with customers | $ | 21,551 | | $ | 6,116 | | $ | 10,211 | | $ | 4,836 | | $ | 5,375 | | $ | 1,846 | | $ | 2,559 | | $ | 1,016 | |
| | | | | | | | |
Other revenue sources(a) | $ | 297 | | $ | 39 | | $ | 104 | | $ | 8 | | $ | 81 | | $ | 29 | | $ | 47 | | $ | 103 | |
Total revenues | $ | 21,848 | | $ | 6,155 | | $ | 10,315 | | $ | 4,844 | | $ | 5,456 | | $ | 1,875 | | $ | 2,606 | | $ | 1,119 | |
(a)Other revenue sources include revenues from leases, derivatives and alternative revenue programs that are not considered revenues from contracts with customers. Alternative revenue programs in certain jurisdictions include regulatory mechanisms that periodically adjust for over or under collection of related revenues.
| | | | | |
FINANCIAL STATEMENTS | REVENUE |
| | | | | | | | | | | | | | | | | | | | | | | | | | |
| Nine Months Ended September 30, 2022 |
| | Duke | | Duke | Duke | Duke | Duke | |
(in millions) | Duke | Energy | Progress | Energy | Energy | Energy | Energy | |
By market or type of customer | Energy | Carolinas | Energy | Progress | Florida | Ohio | Indiana | Piedmont |
Electric Utilities and Infrastructure | | | | | | | | |
Residential | $ | 8,642 | | $ | 2,454 | | $ | 4,487 | | $ | 1,824 | | $ | 2,663 | | $ | 656 | | $ | 1,046 | | $ | — | |
General | 5,498 | | 1,796 | | 2,562 | | 1,114 | | 1,448 | | 377 | | 760 | | — | |
Industrial | 2,582 | | 938 | | 842 | | 594 | | 248 | | 130 | | 672 | | — | |
Wholesale | 2,129 | | 356 | | 1,388 | | 1,033 | | 355 | | 90 | | 296 | | — | |
Other revenues | 652 | | 308 | | 775 | | 608 | | 167 | | 56 | | 6 | | — | |
Total Electric Utilities and Infrastructure revenue from contracts with customers | $ | 19,503 | | $ | 5,852 | | $ | 10,054 | | $ | 5,173 | | $ | 4,881 | | $ | 1,309 | | $ | 2,780 | | $ | — | |
| | | | | | | | |
Gas Utilities and Infrastructure | | | | | | | | |
Residential | $ | 936 | | $ | — | | $ | — | | $ | — | | $ | — | | $ | 331 | | $ | — | | $ | 605 | |
Commercial | 504 | | — | | — | | — | | — | | 128 | | — | | 376 | |
Industrial | 125 | | — | | — | | — | | — | | 17 | | — | | 108 | |
Power Generation | — | | — | | — | | — | | — | | — | | — | | 71 | |
Other revenues | 284 | | — | | — | | — | | — | | 16 | | — | | 220 | |
Total Gas Utilities and Infrastructure revenue from contracts with customers | $ | 1,849 | | $ | — | | $ | — | | $ | — | | $ | — | | $ | 492 | | $ | — | | $ | 1,380 | |
| | | | | | | | |
Other | | | | | | | | |
Revenue from contracts with customers | $ | 21 | | $ | — | | $ | — | | $ | — | | $ | — | | $ | — | | $ | — | | $ | — | |
| | | | | | | | |
Total Revenue from contracts with customers | $ | 21,373 | | $ | 5,852 | | $ | 10,054 | | $ | 5,173 | | $ | 4,881 | | $ | 1,801 | | $ | 2,780 | | $ | 1,380 | |
| | | | | | | | |
Other revenue sources(a) | $ | 44 | | $ | (8) | | $ | 33 | | $ | 9 | | $ | 9 | | $ | 10 | | $ | 55 | | $ | 41 | |
Total revenues | $ | 21,417 | | $ | 5,844 | | $ | 10,087 | | $ | 5,182 | | $ | 4,890 | | $ | 1,811 | | $ | 2,835 | | $ | 1,421 | |
(a)Other revenue sources include revenues from leases, derivatives and alternative revenue programs that are not considered revenues from contracts with customers. Alternative revenue programs in certain jurisdictions include regulatory mechanisms that periodically adjust for over or under collection of related revenues.
| | | | | |
FINANCIAL STATEMENTS | REVENUE |
The following table presents the reserve for credit losses for trade and other receivables.
| | | Three Months Ended September 30, 2022 and 2023 |
| | | Duke | | Duke | |
| | Duke | Energy | Progress | Energy | |
(in millions) | Energy | Carolinas | Energy | Progress | Florida | Ohio | Indiana | Piedmont |
Balance at June 30, 2022 | $ | 135 | | $ | 52 | | $ | 52 | | $ | 31 | | $ | 21 | | $ | 4 | | $ | 3 | | $ | 15 | |
Write-Offs | (49) | | (19) | | (26) | | (11) | | (15) | | — | | — | | (4) | |
Credit Loss Expense | 37 | | 10 | | 20 | | 5 | | 15 | | 2 | | 1 | | 3 | |
Other Adjustments | 51 | | 19 | | 21 | | 16 | | 5 | | — | | — | | — | |
Balance at September 30, 2022 | $ | 174 | | $ | 62 | | $ | 67 | | $ | 41 | | $ | 26 | | $ | 6 | | $ | 4 | | $ | 14 | |
| Balance at June 30, 2023 | $ | 199 | | $ | 57 | | $ | 73 | | $ | 43 | | $ | 30 | | $ | 8 | | $ | 4 | | $ | 13 | |
Write-Offs | (36) | | (14) | | (20) | | (11) | | (8) | | — | | — | | (5) | |
Credit Loss Expense | 23 | | 5 | | 15 | | 2 | | 13 | | — | | 1 | | 2 | |
Other Adjustments | 17 | | 8 | | 9 | | 10 | | (1) | | — | | — | | — | |
Balance at September 30, 2023 | $ | 203 | | $ | 56 | | $ | 77 | | $ | 44 | | $ | 34 | | $ | 8 | | $ | 5 | | $ | 10 | |
| | | Nine Months Ended September 30, 2022 and 2023 |
| | | Duke | | Duke | |
| | Duke | Energy | Progress | Energy | |
| | Three Months Ended March 31, 2023 and 2024 | |
| | Three Months Ended March 31, 2023 and 2024 | |
| | Three Months Ended March 31, 2023 and 2024 | |
| | Duke | |
| Duke | |
| Duke | |
| Duke | |
(in millions) | (in millions) | Energy | Carolinas | Energy | Progress | Florida | Ohio | Indiana | Piedmont |
Balance at December 31, 2021 | $ | 121 | | $ | 42 | | $ | 36 | | $ | 21 | | $ | 16 | | $ | 4 | | $ | 3 | | $ | 15 | |
(in millions) | |
(in millions) | | Energy | Carolinas | Energy | Progress | Florida | Ohio | Indiana | Piedmont |
Balance at December 31, 2022 | |
| Write-Offs | |
Write-Offs | |
Write-Offs | Write-Offs | (103) | | (44) | | (45) | | (18) | | (28) | | — | | — | | (10) | |
Credit Loss Expense | Credit Loss Expense | 81 | | 23 | | 39 | | 11 | | 28 | | 2 | | 1 | | 9 | |
Other Adjustments | Other Adjustments | 75 | | 41 | | 37 | | 27 | | 10 | | — | | — | | — | |
Balance at September 30, 2022 | $ | 174 | | $ | 62 | | $ | 67 | | $ | 41 | | $ | 26 | | $ | 6 | | $ | 4 | | $ | 14 | |
Balance at March 31, 2023 | |
| Balance at December 31, 2022 | $ | 216 | | $ | 68 | | $ | 81 | | $ | 44 | | $ | 36 | | $ | 6 | | $ | 4 | | $ | 14 | |
Balance at December 31, 2023 | |
Balance at December 31, 2023 | |
Balance at December 31, 2023 | |
Write-Offs | Write-Offs | (121) | | (54) | | (60) | | (30) | | (28) | | — | | — | | (11) | |
Credit Loss Expense | Credit Loss Expense | 62 | | 18 | | 33 | | 7 | | 26 | | 2 | | 1 | | 7 | |
Other Adjustments | Other Adjustments | 46 | | 24 | | 23 | | 23 | | — | | — | | — | | — | |
Balance at September 30, 2023 | $ | 203 | | $ | 56 | | $ | 77 | | $ | 44 | | $ | 34 | | $ | 8 | | $ | 5 | | $ | 10 | |
Balance at March 31, 2024 | |
Trade and other receivables are evaluated based on an estimate of the risk of loss over the life of the receivable and current and historical conditions using supportable assumptions. Management evaluates the risk of loss for trade and other receivables by comparing the historical write-off amounts to total revenue over a specified period. Historical loss rates are adjusted due to the impact of current conditions, as well as forecasted conditions over a reasonable time period. The calculated write-off rate can be applied to the receivable balance for which an established reserve does not already exist. Management reviews the assumptions and risk of loss periodically for trade and other receivables.
| | | | | |
FINANCIAL STATEMENTS | REVENUE |
The aging of trade receivables is presented in the table below.
| | September 30, 2023 |
| | Duke | | Duke | |
| Duke | Energy | Progress | Energy | |
| March 31, 2024 | | | March 31, 2024 |
| | Duke | |
| Duke | |
| Duke | |
| Duke | |
(in millions) | |
(in millions) | |
(in millions) | (in millions) | Energy | Carolinas | Energy | Progress | Florida | Ohio | Indiana | Piedmont | Energy | Carolinas | Energy | Progress | Florida | Ohio | Indiana | Piedmont |
Unbilled Revenue(a)(b) | Unbilled Revenue(a)(b) | $ | 977 | | $ | 356 | | $ | 333 | | $ | 206 | | $ | 127 | | $ | 2 | | $ | 27 | | $ | 8 | |
Current | Current | 2,538 | | 795 | | 1,233 | | 658 | | 573 | | 55 | | 54 | | 83 | |
1-31 days past due | 1-31 days past due | 258 | | 71 | | 121 | | 44 | | 77 | | 5 | | 10 | | 5 | |
31-61 days past due | 31-61 days past due | 114 | | 31 | | 57 | | 38 | | 19 | | 2 | | 5 | | 5 | |
61-91 days past due | 61-91 days past due | 53 | | 19 | | 21 | | 7 | | 14 | | 1 | | 2 | | 3 | |
91+ days past due | 91+ days past due | 234 | | 60 | | 71 | | 24 | | 47 | | 37 | | 24 | | 5 | |
Deferred Payment Arrangements(c) | Deferred Payment Arrangements(c) | 104 | | 31 | | 50 | | 27 | | 23 | | 3 | | — | | — | |
Trade and Other Receivables | Trade and Other Receivables | $ | 4,278 | | $ | 1,363 | | $ | 1,886 | | $ | 1,004 | | $ | 880 | | $ | 105 | | $ | 122 | | $ | 109 | |
| | | | | |
FINANCIAL STATEMENTS | REVENUE |
| | December 31, 2022 |
| | Duke | | Duke | |
| Duke | Energy | Progress | Energy | |
| December 31, 2023 | | | December 31, 2023 |
| | Duke | |
| Duke | |
| Duke | |
| Duke | |
(in millions) | (in millions) | Energy | Carolinas | Energy | Progress | Florida | Ohio | Indiana | Piedmont |
Unbilled Revenue(a)(b) | $ | 1,457 | | $ | 486 | | $ | 355 | | $ | 232 | | $ | 123 | | $ | 20 | | $ | 28 | | $ | 160 | |
(in millions) | |
(in millions) | | Energy | Carolinas | Energy | Progress | Florida | Ohio | Indiana | Piedmont |
Unbilled Revenue(a)(d) | |
Current | Current | 2,347 | | 577 | | 1,059 | | 637 | | 417 | | 15 | | 52 | | 265 | |
1-31 days past due | 1-31 days past due | 261 | | 96 | | 60 | | 15 | | 45 | | 5 | | 17 | | 15 | |
31-61 days past due | 31-61 days past due | 123 | | 23 | | 61 | | 49 | | 12 | | 6 | | 2 | | 3 | |
61-91 days past due | 61-91 days past due | 74 | | 25 | | 18 | | 9 | | 9 | | 3 | | 11 | | 2 | |
91+ days past due | 91+ days past due | 209 | | 70 | | 74 | | 27 | | 47 | | 26 | | 6 | | 4 | |
Deferred Payment Arrangements(c) | Deferred Payment Arrangements(c) | 160 | | 57 | | 62 | | 35 | | 27 | | 4 | | — | | 1 | |
Trade and Other Receivables | Trade and Other Receivables | $ | 4,631 | | $ | 1,334 | | $ | 1,689 | | $ | 1,004 | | $ | 680 | | $ | 79 | | $ | 116 | | $ | 450 | |
(a)Unbilled revenues are recognized by applying customer billing rates to the estimated volumes of energy or natural gas delivered but not yet billed and are included within Receivables and Receivables of VIEs on the Condensed Consolidated Balance Sheets.
(b)In March 2024, Duke Energy repaid all outstanding CRC borrowings and terminated the related CRC credit facility. Duke Energy's related restricted receivables outstanding at CRC at the time of termination totaled $682 million, consisting of $316 million and $366 million of restricted receivables that were transferred back to Duke Energy Indiana and Duke Energy Ohio, respectively, to be collected and Duke Energy Indiana sell, on a revolving basis, nearly all of their retail accounts receivable, including receivables for unbilled revenues, to an affiliate, CRC, and account for the transfers of receivablesreported as sales. Accordingly, the receivables sold are not reflectedReceivables on the Condensed Consolidated Balance Sheets of Duke Energy Ohio and Duke Energy Indiana.Sheets. See Note 1312 for further information. These receivables for unbilled revenues are $95 million and $156 million for Duke Energy Ohio and Duke Energy Indiana, respectively, as of September 30, 2023, and $148 million and $260 million for Duke Energy Ohio and Duke Energy Indiana, respectively, as of December 31, 2022.
(c)Due to ongoing financial hardships impacting customers, Duke Energy has permitted customers to defer payment of past-due amounts through installment payment plans.
(d)Duke Energy Ohio and Duke Energy Indiana sold, on a revolving basis, nearly all of their retail accounts receivable, including receivables for unbilled revenues, to an affiliate, CRC, and accounted for the transfers of receivables as sales. Accordingly, the receivables sold were not reflected on the Condensed Consolidated Balance Sheets of Duke Energy Ohio and Duke Energy Indiana. These receivables for unbilled revenues are $141 million and $197 million for Duke Energy Ohio and Duke Energy Indiana, respectively, as of December 31, 2023.
15.
14. STOCKHOLDERS' EQUITY
Basic EPS is computed by dividing net income available to Duke Energy common stockholders, as adjusted for distributed and undistributed earnings allocated to participating securities and accumulated preferred dividends, by the weighted average number of common shares outstanding during the period. Diluted EPS is computed by dividing net income available to Duke Energy common stockholders, as adjusted for distributed and undistributed earnings allocated to participating securities and accumulated preferred dividends, by the diluted weighted average number of common shares outstanding during the period. Diluted EPS reflects the potential dilution that could occur if securities or other agreements to issue common stock, such as equity forward sale agreements or convertible debt, were exercised or settled. Duke Energy applies the if-converted method for calculating any potential dilutive effect of the conversion of the outstanding convertible notes on diluted EPS, if applicable. Duke Energy’s participating securities are restricted stock units that are entitled to dividends declared on Duke Energy common stock during the restricted stock unit’s vesting periods. Dividends declared on preferred stock are recorded on the Condensed Consolidated Statements of Operations as a reduction of net income to arrive at net income available to Duke Energy common stockholders. Dividends accumulated on preferred stock are an adjustment to net income used in the calculation of basic and diluted EPS.
| | | | | |
FINANCIAL STATEMENTS | STOCKHOLDERS' EQUITY |
The following table presents Duke Energy’s basic and diluted EPS calculations, the weighted average number of common shares outstanding and common and preferred share dividends declared.
| | Three Months Ended September 30, | | Nine Months Ended September 30, |
| | | Three Months Ended March 31, | |
| | | Three Months Ended March 31, | |
| | | Three Months Ended March 31, | |
(in millions, except per share amounts) | (in millions, except per share amounts) | 2023 | | 2022 | | 2023 | | 2022 | (in millions, except per share amounts) | | | | | 2024 | | 2023 |
Net Income available to Duke Energy common stockholders | Net Income available to Duke Energy common stockholders | $ | 1,213 | | | $ | 1,383 | | | $ | 1,744 | | | $ | 3,094 | |
Less: (Loss) Income from discontinued operations attributable to Duke Energy common stockholders | (190) | | | 23 | | | (1,283) | | | 62 | |
Less: Loss from discontinued operations attributable to Duke Energy common stockholders | |
Accumulated preferred stock dividends adjustment | Accumulated preferred stock dividends adjustment | 12 | | | 12 | | | 12 | | | 12 | |
Less: Impact of participating securities | Less: Impact of participating securities | 2 | | | 1 | | | 4 | | | 2 | |
Income from continuing operations available to Duke Energy common stockholders | Income from continuing operations available to Duke Energy common stockholders | $ | 1,413 | | | $ | 1,371 | | | $ | 3,035 | | | $ | 3,042 | |
| (Loss) Income from discontinued operations, net of tax | $ | (152) | | | $ | 3 | | | $ | (1,316) | | | $ | (30) | |
Add: (Income) Loss attributable to NCI | (38) | | | 20 | | | 33 | | 92 | |
(Loss) Income from discontinued operations attributable to Duke Energy common stockholders | $ | (190) | | | $ | 23 | | | $ | (1,283) | | | $ | 62 | |
Loss from discontinued operations, net of tax | |
Loss from discontinued operations, net of tax | |
Loss from discontinued operations, net of tax | |
Add: Loss attributable to NCI | |
Loss from discontinued operations attributable to Duke Energy common stockholders | |
| Weighted average common shares outstanding – basic and diluted | |
Weighted average common shares outstanding – basic and diluted | |
Weighted average common shares outstanding – basic and diluted | Weighted average common shares outstanding – basic and diluted | 771 | | | 770 | | | 771 | | | 770 | |
| EPS from continuing operations available to Duke Energy common stockholders | EPS from continuing operations available to Duke Energy common stockholders | |
| EPS from continuing operations available to Duke Energy common stockholders | |
| EPS from continuing operations available to Duke Energy common stockholders | |
Basic and diluted(a) | |
Basic and diluted(a) | |
Basic and diluted(a) | Basic and diluted(a) | $ | 1.83 | | | $ | 1.78 | | | $ | 3.94 | | | $ | 3.95 | |
| (Loss) Earnings Per Share from discontinued operations attributable to Duke Energy common stockholders | |
Loss Per Share from discontinued operations attributable to Duke Energy common stockholders | |
Loss Per Share from discontinued operations attributable to Duke Energy common stockholders | |
Loss Per Share from discontinued operations attributable to Duke Energy common stockholders | |
Basic and diluted(a) | |
Basic and diluted(a) | |
Basic and diluted(a) | Basic and diluted(a) | $ | (0.24) | | | $ | 0.03 | | | $ | (1.67) | | | $ | 0.08 | |
Potentially dilutive items excluded from the calculation(b) | Potentially dilutive items excluded from the calculation(b) | 2 | | | 2 | | | 2 | | | 2 | |
Dividends declared per common share | Dividends declared per common share | $ | 1.025 | | | $ | 1.005 | | | $ | 3.035 | | | $ | 2.975 | |
Dividends declared on Series A preferred stock per depositary share(c) | Dividends declared on Series A preferred stock per depositary share(c) | $ | 0.359 | | | $ | 0.359 | | | $ | 1.078 | | | $ | 1.078 | |
Dividends declared on Series B preferred stock per share(d) | Dividends declared on Series B preferred stock per share(d) | $ | 24.375 | | | $ | 24.375 | | | $ | 48.750 | | | $ | 48.750 | |
(a)For the periods presented subsequent to issuance in April 2023, the convertible notes were excluded from the calculations of diluted EPS because the effect was antidilutive.
(b)Performance stock awards were not included in the dilutive securities calculation because the performance measures related to the awards had not been met.
(c)5.75% Series A Cumulative Redeemable Perpetual Preferred Stock dividends are payable quarterly in arrears on the 16th day of March, June, September and December. The preferred stock has a $25 liquidation preference per depositary share.
(d)4.875% Series B Fixed-Rate Reset Cumulative Redeemable Perpetual Preferred Stock dividends are payable semiannually in arrears on the 16th day of March and September. The preferred stock has a $1,000 liquidation preference per share.
Common Stock
16.In November 2022, Duke Energy filed a prospectus supplement and executed an Equity Distribution Agreement (EDA) under which it may sell up to $1.5 billion of its common stock through an at-the-market (ATM) offering program, including an equity forward sales component. Under the terms of the EDA, Duke Energy may issue and sell shares of common stock through September 2025.
In March 2024, Duke Energy marketed its first tranche, issuing 0.8 million shares of common stock through an equity forward transaction under the ATM program with an initial forward price of $92.77 per share. The equity forward requires Duke Energy to either physically settle the transaction by issuing shares in exchange for net proceeds at the then-applicable forward sale price specified by the agreements or net settle in whole or in part through the delivery or receipt of cash or shares. The settlement alternative is at Duke Energy's election. No amounts have or will be recorded in Duke Energy's Condensed Consolidated Financial Statements with respect to the ATM offering until settlement of the equity forward occurs, which is expected during or prior to December 2024. The initial forward sale price will be subject to adjustment on a daily basis based on a floating interest rate factor and will decrease by other fixed amounts specified in the relevant forward sale agreement. Until settlement of the equity forward, earnings per share dilution resulting from the agreement, if any, will be determined under the treasury stock method.
15. EMPLOYEE BENEFIT PLANS
DEFINED BENEFIT RETIREMENT PLANS
Duke Energy and certain subsidiaries maintain, and the Subsidiary Registrants participate in, qualified and non-qualified, non-contributory defined benefit retirement plans. Duke Energy's policy is to fund amounts on an actuarial basis to provide assets sufficient to meet benefit payments to be paid to plan participants.
The following table includes information related to the Duke Energy Registrants' contributions to its qualified defined benefit pension plans.
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| Nine Months Ended September 30, 2023 and 2022 |
| | | Duke | | | Duke | | Duke | | Duke | | Duke | | |
| Duke | | Energy | | Progress | Energy | | Energy | | Energy | | Energy | | |
(in millions) | Energy | | Carolinas | | Energy | Progress | | Florida | | Ohio | | Indiana | | Piedmont |
Contributions made: | | | | | | | | | | | | | | |
2023 | $ | 100 | | | $ | 26 | | | $ | 22 | | $ | 13 | | | $ | 9 | | | $ | 5 | | | $ | 8 | | | $ | 3 | |
2022 | $ | 58 | | | $ | 15 | | | $ | 13 | | $ | 8 | | | $ | 5 | | | $ | 3 | | | $ | 5 | | | $ | 2 | |
| | | | | |
FINANCIAL STATEMENTS | EMPLOYEE BENEFIT PLANS |
QUALIFIED PENSION PLANS
The following tables include the components of net periodic pension costs for qualified pension plans.
| | Three Months Ended September 30, 2023 |
| | Duke | | Duke | | Duke | | Duke | | Duke | |
| Duke | | Energy | | Progress | | Energy | | Energy | | Energy | | Energy | |
| Three Months Ended March 31, 2024 | | | Three Months Ended March 31, 2024 |
| | | Duke | |
| Duke | |
| Duke | |
| Duke | |
(in millions) | |
(in millions) | |
(in millions) | (in millions) | Energy | | Carolinas | | Energy | | Progress | | Florida | | Ohio | | Indiana | | Piedmont | Energy | | Carolinas | | Energy | | Progress | | Florida | | Ohio | | Indiana | | Piedmont |
Service cost | Service cost | $ | 28 | | | $ | 9 | | | $ | 9 | | | $ | 5 | | | $ | 3 | | | $ | 1 | | | $ | 1 | | | $ | 1 | |
Interest cost on projected benefit obligation | Interest cost on projected benefit obligation | 86 | | | 21 | | | 26 | | | 12 | | | 14 | | | 4 | | | 6 | | | 2 | |
Expected return on plan assets | Expected return on plan assets | (147) | | | (40) | | | (50) | | | (24) | | | (26) | | | (6) | | | (10) | | | (5) | |
Amortization of actuarial loss | Amortization of actuarial loss | 2 | | | — | | | 1 | | | — | | | 1 | | | — | | | 1 | | | — | |
Amortization of prior service credit | Amortization of prior service credit | (3) | | | — | | | — | | | — | | | — | | | — | | | — | | | (1) | |
Amortization of settlement charges | Amortization of settlement charges | 5 | | | 3 | | | 1 | | | 1 | | | — | | | — | | | — | | | 1 | |
Net periodic pension costs | Net periodic pension costs | $ | (29) | | | $ | (7) | | | $ | (13) | | | $ | (6) | | | $ | (8) | | | $ | (1) | | | $ | (2) | | | $ | (2) | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| Three Months Ended September 30, 2022 |
| | | Duke | | | | Duke | | Duke | | Duke | | Duke | | |
| Duke | | Energy | | Progress | | Energy | | Energy | | Energy | | Energy | | |
(in millions) | Energy | | Carolinas | | Energy | | Progress | | Florida | | Ohio | | Indiana | | Piedmont |
Service cost | $ | 39 | | | $ | 12 | | | $ | 11 | | | $ | 6 | | | $ | 4 | | | $ | 1 | | | $ | 3 | | | $ | 1 | |
Interest cost on projected benefit obligation | 58 | | | 14 | | | 19 | | | 9 | | | 10 | | | 3 | | | 4 | | | 2 | |
Expected return on plan assets | (140) | | | (38) | | | (46) | | | (22) | | | (24) | | | (6) | | | (9) | | | (6) | |
Amortization of actuarial loss | 24 | | | 5 | | | 6 | | | 3 | | | 3 | | | 2 | | | 3 | | | 2 | |
Amortization of prior service credit | (5) | | | (1) | | | — | | | — | | | — | | | — | | | — | | | (2) | |
Amortization of settlement charges | 14 | | | 3 | | | 5 | | | 4 | | | 1 | | | 2 | | | 1 | | | 2 | |
Net periodic pension costs | $ | (10) | | | $ | (5) | | | $ | (5) | | | $ | — | | | $ | (6) | | | $ | 2 | | | $ | 2 | | | $ | (1) | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| Nine Months Ended September 30, 2023 |
| | | Duke | | | | Duke | | Duke | | Duke | | Duke | | |
| Duke | | Energy | | Progress | | Energy | | Energy | | Energy | | Energy | | |
(in millions) | Energy | | Carolinas | | Energy | | Progress | | Florida | | Ohio | | Indiana | | Piedmont |
Service cost | $ | 87 | | | $ | 28 | | | $ | 25 | | | $ | 15 | | | $ | 10 | | | $ | 2 | | | $ | 4 | | | $ | 3 | |
Interest cost on projected benefit obligation | 258 | | | 63 | | | 80 | | | 37 | | | 43 | | | 13 | | | 20 | | | 7 | |
Expected return on plan assets | (441) | | | (120) | | | (149) | | | (70) | | | (78) | | | (18) | | | (30) | | | (15) | |
Amortization of actuarial loss | 7 | | | 1 | | | 3 | | | 1 | | | 2 | | | — | | | 2 | | | — | |
Amortization of prior service credit | (10) | | | — | | | — | | | — | | | — | | | — | | | (1) | | | (5) | |
Amortization of settlement charges | 14 | | | 7 | | | 3 | | | 3 | | | 1 | | | — | | | 1 | | | 3 | |
Net periodic pension costs | $ | (85) | | | $ | (21) | | | $ | (38) | | | $ | (14) | | | $ | (22) | | | $ | (3) | | | $ | (4) | | | $ | (7) | |
| | Nine Months Ended September 30, 2022 |
| | Duke | | Duke | | Duke | | Duke | | Duke | |
| Duke | | Energy | | Progress | | Energy | | Energy | | Energy | | Energy | |
| Three Months Ended March 31, 2023 | | | Three Months Ended March 31, 2023 |
| | | Duke | |
| Duke | |
| Duke | |
| Duke | |
(in millions) | |
(in millions) | |
(in millions) | (in millions) | Energy | | Carolinas | | Energy | | Progress | | Florida | | Ohio | | Indiana | | Piedmont | Energy | | Carolinas | | Energy | | Progress | | Florida | | Ohio | | Indiana | | Piedmont |
Service cost | Service cost | $ | 120 | | | $ | 38 | | | $ | 34 | | | $ | 20 | | | $ | 14 | | | $ | 3 | | | $ | 7 | | | $ | 4 | |
Interest cost on projected benefit obligation | Interest cost on projected benefit obligation | 175 | | | 41 | | | 55 | | | 25 | | | 30 | | | 9 | | | 14 | | | 6 | |
Expected return on plan assets | Expected return on plan assets | (421) | | | (114) | | | (139) | | | (66) | | | (72) | | | (17) | | | (28) | | | (18) | |
Amortization of actuarial loss | Amortization of actuarial loss | 71 | | | 15 | | | 19 | | | 10 | | | 9 | | | 4 | | | 8 | | | 5 | |
Amortization of prior service credit | Amortization of prior service credit | (14) | | | (3) | | | — | | | — | | | — | | | — | | | (1) | | | (6) | |
Amortization of settlement charges | Amortization of settlement charges | 18 | | | 6 | | | 6 | | | 5 | | | 1 | | | 2 | | | 1 | | | 2 | |
Net periodic pension costs | Net periodic pension costs | $ | (51) | | | $ | (17) | | | $ | (25) | | | $ | (6) | | | $ | (18) | | | $ | 1 | | | $ | 1 | | | $ | (7) | |
NON-QUALIFIED PENSION PLANS
Net periodic pension costs for non-qualified pension plans were not material for the three and nine months ended September 30, 2023,March 31, 2024, and 2022.2023.
OTHER POST-RETIREMENT BENEFIT PLANS
Net periodic costs for OPEB plans were not material for the three and nine months ended September 30, 2023,March 31, 2024, and 2022.
| | | | | |
FINANCIAL STATEMENTS | INCOME TAXES |
17.16. INCOME TAXES
On August 16, 2022, the IRA was signed into law. Among other provisions, the IRA created a new, zero-emission nuclear power PTC available for taxpayers beginning January 1, 2024. In the first quarter of 2024, Duke Energy Carolinas and Duke Energy Progress recorded a PTC deferred tax asset of approximately $107 million and $14 million, respectively. These amounts represent the net realizable value of the PTCs, which were deferred to a regulatory liability. The Subsidiary Registrants will work with the state utility commissions on the best regulatory process to pass the net realizable value back to customers over time. See Note 4 for additional information on Duke Energy Carolinas' approval for a stand-alone rider starting January 1, 2025. The Company will continue to assess its calculations and interpretations as new information and guidance becomes available.
EFFECTIVE TAX RATES
The ETRs from continuing operations for each of the Duke Energy Registrants are included in the following table.
| | | | | | | | | | | | | | | | | | | | | | | |
| Three Months Ended | | Nine Months Ended |
| September 30, | | September 30, |
| 2023 | | 2022 | | 2023 | | 2022 |
Duke Energy | 2.8 | % | | 10.1 | % | | 9.0 | % | | 8.6 | % |
Duke Energy Carolinas | 4.9 | % | | 5.2 | % | | 8.0 | % | | 6.3 | % |
Progress Energy | 15.7 | % | | 15.8 | % | | 16.2 | % | | 16.2 | % |
Duke Energy Progress | 11.8 | % | | 12.9 | % | | 13.0 | % | | 13.4 | % |
Duke Energy Florida | 20.8 | % | | 18.4 | % | | 20.3 | % | | 19.4 | % |
Duke Energy Ohio | 14.9 | % | | 14.2 | % | | 15.8 | % | | (14.6) | % |
Duke Energy Indiana | 18.5 | % | | 16.8 | % | | 17.8 | % | | 0.5 | % |
Piedmont | 26.3 | % | | 21.4 | % | | 17.2 | % | | 9.1 | % |
The decrease in the ETR for Duke Energy for the three months ended September 30, 2023, was primarily due to benefits associated with ongoing tax efficiency efforts, partially offset by a decrease in the amortization of excess deferred taxes. During the third quarter of 2023, the Company evaluated the deductibility of certain items spanning periods currently open under federal statute, including items related to interest on company-owned life insurance. As a result of this analysis, the Company recorded a favorable adjustment of approximately $120 million.
The increase in the ETR for Duke Energy Carolinas for the nine months ended September 30, 2023, was primarily due to a decrease in the amortization of excess deferred taxes.
The decrease in the ETR for Duke Energy Progress for the three months ending September 30, 2023, was primarily due to the amortization of excess deferred taxes in relation to lower pretax income.
The increase in the ETR for Duke Energy Florida for the three months ending September 30, 2023, was primarily due to a decrease in the amortization of excess deferred taxes, partially offset by an increase in production tax credits.
The increase in the ETR for Duke Energy Ohio for the nine months ended September 30, 2023, was primarily due to a decrease in the amortization of excess deferred taxes related to the MGP Settlement recorded in the prior year.
The increase in the ETR for Duke Energy Indiana for the three months ended September 30, 2023, was primarily due to the amortization of excess deferred taxes in relation to higher pretax income.
The increase in the ETR for Duke Energy Indiana for the nine months ended September 30, 2023, was primarily due to the coal ash impairment based on the Indiana Supreme Court Opinion and the associated amortization of excess deferred taxes recorded in the prior year. | | | | | | | | | | | | | | | |
| | | Three Months Ended |
| | | March 31, |
| | | | | 2024 | | 2023 |
Duke Energy | | | | | 13.4 | % | | 13.8 | % |
Duke Energy Carolinas | | | | | 11.5 | % | | 11.4 | % |
Progress Energy | | | | | 16.5 | % | | 16.7 | % |
Duke Energy Progress | | | | | 15.0 | % | | 14.6 | % |
Duke Energy Florida | | | | | 19.4 | % | | 19.9 | % |
Duke Energy Ohio | | | | | 16.8 | % | | 16.7 | % |
Duke Energy Indiana | | | | | 17.3 | % | | 17.2 | % |
Piedmont | | | | | 19.6 | % | | 17.7 | % |
The increase in the ETR for Piedmont for the three months ended September 30, 2023, was primarily due to the amortization of excess deferred taxes in relation to lower pretax losses.
The increase in the ETR for Piedmont for the nine months ended September 30, 2023,March 31, 2024, was primarily due to a decrease in the amortization of excess deferred taxes.EDIT.
18. | | | | | | |
FINANCIAL STATEMENTS | SUBSEQUENT EVENTS | |
17. SUBSEQUENT EVENTS
For information on subsequent events related to dispositions, regulatory matters, commitments and contingencies, and debt and credit facilities, derivatives, and variable interest entities see Notes 2, 4, 5, 6, 9, and 6,12, respectively.
ITEM 2. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
The following combined Management’s Discussion and Analysis of Financial Condition and Results of Operations is separately filed by Duke Energy and Duke Energy Carolinas, Progress Energy, Duke Energy Progress, Duke Energy Florida, Duke Energy Ohio, Duke Energy Indiana and Piedmont. However, none of the registrants make any representation as to information related solely to Duke Energy or the Subsidiary Registrants of Duke Energy other than itself.
DUKE ENERGY
Duke Energy is an energy company headquartered in Charlotte, North Carolina. Duke Energy operates in the U.S. primarily through its subsidiaries, Duke Energy Carolinas, Duke Energy Progress, Duke Energy Florida, Duke Energy Ohio, Duke Energy Indiana and Piedmont. When discussing Duke Energy’s consolidated financial information, it necessarily includes the results of the Subsidiary Registrants, which along with Duke Energy are collectively referred to as the Duke Energy Registrants.
Management’s Discussion and Analysis should be read in conjunction with the Condensed Consolidated Financial Statements and Notes for the ninethree months ended September 30, 2023,March 31, 2024, and with Duke Energy’s Annual Report on Form 10-K for the year ended December 31, 2022.2023.
Executive Overview
Advancing Our Clean Energy Transformation
Transition. During the ninethree months ended September 30, 2023,March 31, 2024, we continued to execute on our clean energy transformation,transition, remaining focused on reliability and affordability while delivering increasingly clean energy and providing strong, sustainable value for shareholders, customers, communities and employees.
•In November 2022, the Duke Energy Board of Directors approved pursuing the sale of the Commercial Renewables business, excluding the offshore wind contract for Carolina Long Bay. We entered into purchase and sale agreements with affiliates of Brookfield for the sale of the utility-scale solar and wind group in June 2023 and with affiliates of ArcLight for the distributed generation group in July 2023. Both transactions closed in October 2023. See Note 2 to the Condensed Consolidated Financial Statements, "Dispositions," for additional information.
•Renewable energy remains a critical component of our generation mix and we've continued to actively expand the use of these assets across our service territories. In June 2023, we announced an agreement with Ranger Power for up to 199 MW of solar power in Indiana. Pending regulatory approval, energy generated from this facility will be sold to Duke Energy Indiana and serve the equivalent of roughly 35,000 homes. In July 2023, we announced a new utility-scale solar panel installation in Kentucky. Located on the rooftop of a facility owned by Amazon, the site complements our emerging solar portfolio in the state and demonstrates our commitment to furthering the clean energy goals of both the Company and our customers.
•In January 2024, we filed supplemental modeling and analysis with the NCUC and PSCSC related to our combined systemwide Carolinas Resource Plan filed in August 2023. These updates were necessary due to substantially increased load forecasts resulting from continued economic development successes in the Carolinas occurring since the systemwide integrated resource plan was prepared. In March 2023,2024, we began operatingfiled for CPCNs for new generation facilities at the largestsites of the current Marshall Steam Station and Roxboro Plant in the Carolinas. Our energy transition strategy continues to focus on delivering a path to cleaner energy in a manner that protects grid reliability and affordability, all while meeting the energy demands of the growing and economically vibrant communities that we serve.
•As we continue to strengthen our grid and bring clean energy resources online, our customers are important partners in our clean energy future. In January 2024, we received approval for PowerPairSM, a new incentive-based pilot program for installing home solar generation with battery systemenergy storage in North Carolina, an 11-MW project in Onslow County, which will operate in conjunction with an adjacent 13-MW solar facility located on a leased site within Marine Corps Base (MCB) Camp Lejeune. Both projects are connected to aour Duke Energy substationCarolinas and will be used to serve all Duke Energy Progress customers. As partNorth Carolina service territories. Enrollment options for residential customers that participate in the pilot include a one-time incentive of an ongoing collaboration with the Department of Defense, further work could enable the solar and battery systemsup to improve the resiliency of MCB Camp Lejeune against outages.
•In March 2023, Duke Energy Florida announced two new solar projects as part of Clean Energy Connection, the Company's community solar program. Once complete, each 74.9-MW solar facility will generate enough carbon-free electricity to power what would be the equivalent to around 23,000 homes. Additionally, in March 2023, Duke Energy Florida announced its first floating solar array pilot. The project will feature more than 1,800 floating solar modules and occupy approximately 2 acres of water surface on an existing cooling pond at the Duke Energy Hines Energy Complex in Bartow. The pilot is part of Duke Energy's Vision Florida program, which is designed to test innovative projects such as microgrids and battery energy storage, among others, to prepare the power grid for a clean energy future. We now operate 1,200 MW of solar in Florida, with plans to continue adding approximately 300 MW a year going forward.
•While transitioning to cleaner energy resources, affordability continues to be a focus for Duke Energy. Our cost reduction initiatives are grounded in our culture of safety and serving our customers with excellence, while maintaining our assets$9,000 for the future. We’re leveraging digital innovation, data analytics, and process improvements to increase efficiency, making targeted capital investments to reduce maintenance costs, and reshaping our operations to streamline work and lower costs. Coming into 2023, we implementedinstallation of a $300 million cost mitigation initiative to address cost pressures, primarily related to rising interest rates. These cost reductions are primarily focused on corporate and support areas, and remain on track.solar plus battery system.
Regulatory Activity. During the ninethree months ended September 30, 2023,March 31, 2024, we continued to monitor developments while movingmove our regulatory strategy forward. See Note 4 to the Condensed Consolidated Financial Statements, "Regulatory Matters," for additional information.
•HB 951 providesIn April 2024, we filed formal requests for new base rates across several jurisdictions including Duke Energy Florida, Duke Energy Indiana and Piedmont.
•Duke Energy Florida filed a three-year rate plan that would begin in January 2025, once its current base rate settlement agreement concludes at the frameworkend of 2024, and proposed approximately $4.9 billion in investments to reduce outages, expand solar generation, and increase generation unit efficiency. The overall additional base rate revenue requirement would be $820 million over the three-year period and, if approved by the FPSC, will facilitate improved grid reliability for manya growing customer base, reduced fuel consumption at existing power plants, and the construction of 14 new solar plants, providing 1,050 MW of clean energy to Florida's grid.
•Duke Energy Indiana filed a general rate case with the benefitsIURC requesting an overall increase in revenues of modernized regulatory constructs$492 million. This is the first base rate case filed by Duke Energy Indiana since 2019 and reflects strategic investments to improve grid reliability and security, serve a growing customer base, and meet environmental regulations. These investments, which include approximately 345 miles of new power lines expected to be constructed through 2025, will support the more than 60,000 new customers anticipated since our last base rate case.
•Piedmont filed a general rate case with the NCUC requesting an overall increase in revenues of $159 million. This is the first base rate case filed by Piedmont in North Carolina under the direction of the NCUC including PBRsince 2021 and MYRP.reflects significant investments to support ongoing service reliability, system growth, and compliance with federal pipeline safety regulations in addition to two energy reliability centers in eastern North Carolina.
•Also, in April 2024, Duke Energy Progress filed itsissued $177 million of storm recovery bonds, our first rate case utilizing these benefits, including both PBR and MYRP, in North Carolina in Octoberissuance under South Carolina's 2022 and reached partial settlementssecuritization legislation, which provided the necessary framework for us to lower the bill impacts on key matters in April and May 2023. In August 2023, the NCUC issued a constructive order approving these partial settlements and Duke Energy Progress' PBR Application with certain modifications, marking the first implementation of an MYRP under the performance-based regulations authorized by HB 951 in North Carolina. Duke Energy Progress implemented revised Year 1 rates and residential decoupling on October 1, 2023.our customers related to critical storm restoration activities.
•In January 2023,2024, Duke Energy Carolinas filed a rate case in North Carolina that also incorporated elements of PBR and MYRP as allowed under HB 951. In August 2023, we reached partial settlements on key matters with the Public Staff, subject to the approval of the NCUC. We expect an order from the NCUC on the Duke Energy Carolinas rate case in the fourth quarter of this year.
•In the Midwest, we received a constructive order on our Duke Energy Kentucky electric rate case in October 2023. In August 2023, the PUCO approved recovery and true up of certain historical energy efficiency program costs in Ohio, with new rates effective September 1, 2023.
•In August 2023, we filed new resource plans in North Carolina and South Carolina. Between economic development success, population growth and increased adoption of electric vehicles, energy use by Duke Energy customers in the Carolinas is projected to grow by around 35,000 GWh over the next 15 years – more than the annual electric generation of Delaware, Maine and New Hampshire combined. These plans advance our energy transition while prioritizing reliability and affordability.
•In February 2023, the PSCSC approved a constructive comprehensive settlement with all parties in the Duke Energy Progress South Carolina rate case andrequesting an overall increase in revenues of approximately $323 million, prior to proposed mitigation efforts including the acceleration of the return of certain EDIT balances. This is the first base rate case filed by Duke Energy Progress implemented new customer rates effective April 1, 2023. We also made progress on ourCarolinas in the state since 2018 and reflects the South Carolina storm securitization filings, completing our petition for a financing order with the PSCSC in May 2023. The PSCSC approved a comprehensive settlement in September 2023retail allocation of significant investments, including approximately $1.5 billion of transmission and issued its financing order in October 2023.
•In February 2023, the Indiana Court of Appeals issued an opinion findingdistribution assets and certain coal ash related expenditures should be disallowed under a statute specific to federally mandated projects and also denied a petition for rehearing on the matter.
•As it relates to our natural gas businesses, in Duke Energy Ohio, we filed a stipulation on key matters in our base rate case with all parties except the OCC in April 2023. We received an order approving the stipulation in November 2023. In September 2023, the TPUC approved a settlement related to our Annual Review Mechanism in Tennessee, with adjusted rates effective October 1, 2023.compliance costs.
Matters Impacting Future Results
The matters discussed herein could materially impact the future operating results, financial condition and cash flows of the Duke Energy Registrants and Business Segments.
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MD&A | MATTERS IMPACTING FUTURE RESULTS |
Regulatory Matters
Coal Ash Costs
Future spending of coal ash costs, including amounts recorded for depreciation and liability accretion, is expected to be recovered in future rate cases or rider filings. The majority of spend is expected to occur over the next 10 to 15 years.
Duke Energy Indiana has interpreted the Coal Combustion Residuals (CCR) ruleCCR Rule to identify the coal ash basin sites impacted and has assessed the amounts of coal ash subject to the rule and a methodestablished methods of compliance. Interpretation of the requirements of the CCR ruleRule is subject to further legal challenges and regulatory approvals, which could result in additional coal ash basin closure requirements, higher costs of compliance and greater AROs.asset retirement obligations. Additionally, Duke Energy Indiana has retired facilities that are not subject to the CCR rule.Rule. Duke Energy Indiana may incur costs at these facilities to comply with environmental regulations or to mitigate risks associated with on-site storage of coal ash. In January 2022, Duke Energy Indiana received a letter from the EPA regarding application and interpretation of the CCR rule for some of the ash basins at its Gallagher Station. In response to the letter, Duke Energy Indiana has submitted revised closure plans for those basins to the Indiana Department of Environmental Management (IDEM). Those closure plans are pending review by IDEM. For more information, see "Other Matters" and Note 4 to the Condensed Consolidated Financial Statements, "Regulatory Matters."
Fuel Cost Recovery
As a result of rapidly rising commodity costs during 2022, including natural gas, fuel and purchased power prices in excess of amounts included in fuel-related revenues led to an increase in the under collection of fuel costs from customers in jurisdictions including Duke Energy Carolinas, Duke Energy Progress and Duke Energy Florida. These amounts have been deferred in regulatory assets and have impacted the cash flows of the registrants, including increased borrowings to temporarily finance related expenditures until recovery. Natural gas costs have stabilized in 2023 and the Duke Energy Registrants are making progress collecting deferred fuel balances. Regulatory filings have now been made and approved for recovery of all remaining uncollected 2022 fuel costs. Across all jurisdictions, Duke Energy is currently on pace to recover $1.7approximately $1.9 billion of deferred fuel costs in 2023, and expects deferred fuel balances to be back2024.We anticipate being in line with our historical normsaverage balance of deferred fuel costs by the end of 2024.this year.
Commercial RenewablesEnvironmental Regulations
In November 2022,April 2024, the EPA issued a final rule under the Resource Conservation and Recovery Act, which significantly expands the scope of the CCR Rule by establishing regulatory requirements for inactive surface impoundments at retired generating facilities and previously unregulated coal ash sources at regulated facilities. The EPA also issued a final rule under section 111 of the Clean Air Act regulating GHG emissions from existing coal-fired and new natural gas-fired power plants. Duke Energy committed to a plan to sellis reviewing these final rules and analyzing the Commercial Renewables Disposal Groups. The Commercial Renewables Disposal Groups were classified as heldpotential impacts they could have on the Company, which could be material. Cost recovery for salefuture expenditures will be pursued through the normal ratemaking process with federal and as discontinued operations in the fourth quarterstate utility commissions, which permit recovery of 2022.necessary and prudently incurred costs associated with Duke Energy’s regulated operations. Duke Energy entered into purchase and sale agreements with affiliates of Brookfield in June 2023 foris evaluating potential legal challenges to the sale of the utility-scale solar and wind group and with affiliates of ArcLight in July 2023 for the distributed generation group. Both transactions closed in October 2023 and proceeds from the sales are expected to be used for debt avoidance. Duke Energy expects to complete the disposition of the remaining assets by early 2024.final rules. For more information, see Note 2 to the Condensed Consolidated Financial Statements, "Dispositions."
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MD&A | MATTERS IMPACTING FUTURE RESULTS |
In February 2021, a severe winter storm impacted certain Commercial Renewables assets in Texas. Extreme weather conditions limited the ability for these solar and wind facilities to generate and sell electricity into the ERCOT market. Originally, Duke Energy (Parent) was named in multiple lawsuits arising out of this winter storm, but the plaintiffs have begun to dismiss Duke Energy (parent) from these lawsuits and have represented to the court that they will dismiss Duke Energy (Parent) from all such cases. The legal actions related to project companies in this matter transferred to affiliates of Brookfield in conjunction with the transaction closing in October 2023. For more information, see Note 5 to the Condensed Consolidated Financial Statements, "Commitments and Contingencies."Other Matters."
Supply Chain
In 2023, Duke Energy has experienced modest improvement in the stability of the markets for key materials purchased and used by the Company. The Company continues to monitor the ongoing stability of markets for key materials and other developments, including proposed federal regulations,public policy outcomes, that could disrupt or impact the Company's supply chain and, as a result, may impact Duke Energy's execution of its capital plan, future financial results or the achievement of its clean energy goals.
Goodwill
The Duke Energy Registrants performed their annual goodwill impairment tests as of August 31, 2023, as described in Note 8 to the Condensed Consolidated Financial Statements, "Goodwill."2023. As of August 31, 2023,this date, all of the Duke Energy Registrants' reporting units' estimated fair values materially exceeded the carrying values except for the GU&I reporting unit of Duke Energy Ohio. While no goodwill impairment charges were recorded in 2023, the third quarter of 2023,potential for continued rising interest rates,rate pressures, and the related impact on the weighted average cost of capital, without timely or adequate updates to the regulated allowed return on equity or deteriorating economic conditions impacting GU&I's future cash flows or equity valuations of peer companies could impact the estimated fair value of GU&I, and goodwill impairment charges could be recorded in the future. The carrying value of goodwill within GU&I for Duke Energy Ohio was approximately $324 million as of September 30, 2023.
Other
Duke Energy is monitoringcontinues to monitor general market conditions, including the potential for continued rising interest rates, and evaluatingrate pressures on the Company's cost of capital, which may impact toDuke Energy's execution of its capital plan, future financial results, or the achievement of operations, financial position and cash flows in the future.its clean energy goals.
Results of Operations
Non-GAAP Measures
Management’s Discussion and Analysis includes financial information prepared in accordance with GAAP in the U.S., as well as certain non-GAAP financial measures, adjusted earnings and adjusted EPS, discussed below. Non-GAAP financial measures are numerical measures of financial performance, financial position or cash flows that excludes (or includes) amounts that are included in (or excluded from) the most directly comparable measure calculated and presented in accordance with GAAP. Non-GAAP financial measures should be viewed as a supplement to, and not a substitute for, financial measures presented in accordance with GAAP. Non-GAAP measures presented may not be comparable to similarly titled measures used by other companies because other companies may not calculate the measures in the same manner.
Management evaluates financial performance in part based on non-GAAP financial measures, including adjusted earnings and adjusted EPS. Adjusted earnings and adjusted EPS represent income from continuing operations available to Duke Energy Corporation common stockholders in dollar and per share amounts, adjusted for the dollar and per share impact of special items. As discussed below, special items represent certain charges and credits, which management believes are not indicative of Duke Energy's ongoing performance. The most directly comparable GAAP measures for adjusted earnings and adjusted EPS are GAAP Reported Earnings (Loss) and GAAP Reported Earnings (Loss) Per Share, respectively.
Special items included in the periods presented below include the following, which management believes do not reflect ongoing costs:
•For 2022, Regulatory MattersDiscontinued operations primarily represents the net impact of chargesoperating results and impairments recognized related to the 2022 Indiana Supreme Court ruling on coal ash, andsale of the Commercial Renewables business disposal group.
Three Months Ended March 31, 2024, as compared to March 31, 2023
GAAP reported EPS was $1.44 for 2023, itthe first quarter of 2024 compared to $1.01 in the first quarter of 2023. In addition to the drivers below, GAAP reported EPS increased primarily represents impairment charges relateddue to Duke Energy Carolinas' North Carolina rate case settlement and Duke Energy Progress' North Carolina rate case order.
Discontinued operations primarily includes the impairments on the sale of the Commercial Renewables business in the current year and results from Duke Energy's Commercial Renewables Disposal Groups.prior year.
Three Months Ended September 30, 2023, as compared to September 30, 2022
GAAP reported EPS was $1.59 for the third quarter of 2023 compared to $1.81 in the third quarter of 2022. In addition to the drivers below, GAAP reported EPS decreased primarily due to impairments on the sale of the Commercial Renewables business.
As discussed above, management also evaluates financial performance based on adjusted EPS. Duke Energy’s thirdfirst quarter 20232024 adjusted EPS was $1.94$1.44 compared to $1.78$1.20 for the thirdfirst quarter of 2022.2023. The increase in adjusted EPSEPS was primarily due to ongoing tax efficiency efforts,improved weather and favorable rate case impacts along with growth from riders and other margin, rate case impacts and favorable weather, partially offset by higher interest expense and lower volumes.
The following table reconciles non-GAAP measures, including adjusted EPS, to their most directly comparable GAAP measures.
| | | Three Months Ended September 30, | | Three Months Ended March 31, |
| 2023 | | 2022 |
| 2024 | | | 2024 | | 2023 |
(in millions, except per share amounts) | (in millions, except per share amounts) | Earnings | | EPS | | Earnings | | EPS | (in millions, except per share amounts) | Earnings | | EPS | | Earnings | | EPS |
| GAAP Reported Earnings/GAAP Reported EPS | |
GAAP Reported Earnings/GAAP Reported EPS | |
GAAP Reported Earnings/GAAP Reported EPS | GAAP Reported Earnings/GAAP Reported EPS | $ | 1,213 | | | $ | 1.59 | | | $ | 1,383 | | | $ | 1.81 | |
Adjustments: | Adjustments: | |
| Regulatory Matters(a) | 84 | | | 0.11 | | | — | | | — | |
| Discontinued Operations(b) | 190 | | | 0.24 | | | (22) | | | (0.03) | |
| Discontinued Operations(a) | |
| Discontinued Operations(a) | |
| Discontinued Operations(a) | |
Adjusted Earnings/Adjusted EPS | Adjusted Earnings/Adjusted EPS | $ | 1,487 | | | $ | 1.94 | | | $ | 1,361 | | | $ | 1.78 | |
(a)Net of $27 million tax benefit. $95 within Impairment of assets and other charges and $16 million within Operations, maintenance and other.
(b)Recorded in (Loss) IncomeLoss from Discontinued Operations, net of tax, and Net (Income) Loss Attributable to Noncontrolling Interests.
Nine Months Ended September 30, 2023, as compared to September 30, 2022
GAAP Reported EPS was $2.27 for the nine months ended September 30, 2023, compared to $4.03 for the nine months ended September 30, 2022. In addition to the drivers below, GAAP reported EPS decreased primarily due to impairments on the sale of the Commercial Renewables business.
As discussed above, management also evaluates financial performance based on adjusted EPS. Duke Energy’s adjusted EPS was $4.05 for the nine months ended September 30, 2023, compared to $4.16 for the nine months ended September 30, 2022. The decrease in adjusted EPS was primarily due to higher interest expense, unfavorable weather and lower volumes, partially offset by growth from riders and other margin, rate case impacts, lower operations and maintenance expense and ongoing tax efficiency efforts.
The following table reconciles non-GAAP measures, including adjusted EPS, to their most directly comparable GAAP measures.
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| Nine Months Ended September 30, |
| 2023 | | 2022 |
(in millions, except per share amounts) | Earnings | | EPS | | Earnings | | EPS |
GAAP Reported Earnings/GAAP Reported EPS | $ | 1,744 | | | $ | 2.27 | | | $ | 3,094 | | | $ | 4.03 | |
Adjustments: | | | | | | | |
Regulatory Matters(a) | 84 | | | 0.11 | | | 157 | | | 0.21 | |
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Discontinued Operations(b) | 1,283 | | | 1.67 | | | (60) | | | (0.08) | |
Adjusted Earnings/Adjusted EPS | $ | 3,111 | | | $ | 4.05 | | | $ | 3,191 | | | $ | 4.16 | |
(a)In 2023, net of $27 million tax benefit. $95 within Impairment of assets and other charges and $16 million within Operations, maintenance and other. In 2022, net of $80 million tax benefit. $211 million recorded within Impairment of assets and other charges, $46 million within Regulated electric (Operating revenues) and $20 million within Noncontrolling Interests.
(b)Recorded in (Loss) Income from Discontinued Operations, net of tax, and Net (Income) Loss Attributable to Noncontrolling Interests.
SEGMENT RESULTS
The remaining information presented in this discussion of results of operations is on a GAAP basis. Management evaluates segment performance based on segment income. Segment income is defined as income from continuing operations net of income attributable to noncontrolling interests and preferred stock dividends. Segment income includes intercompany revenues and expenses that are eliminated in the Condensed Consolidated Financial Statements.
Duke Energy's segment structure includes the following segments: EU&I and GU&I. The remainder of Duke Energy’s operations is presented as Other. See Note 3 to the Condensed Consolidated Financial Statements, “Business Segments,” for additional information on Duke Energy’s segment structure.
Electric Utilities and Infrastructure
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| | | Three Months Ended March 31, |
(in millions) | | | | | | | 2024 | | 2023 | | Variance |
Operating Revenues | | | | | | | $ | 6,803 | | | $ | 6,398 | | | $ | 405 | |
Operating Expenses | | | | | | | | | | | |
Fuel used in electric generation and purchased power | | | | | | | 2,355 | | | 2,396 | | | (41) | |
Operation, maintenance and other | | | | | | | 1,316 | | | 1,269 | | | 47 | |
Depreciation and amortization | | | | | | | 1,225 | | | 1,096 | | | 129 | |
Property and other taxes | | | | | | | 337 | | | 348 | | | (11) | |
Impairment of assets and other charges | | | | | | | 1 | | | 7 | | | (6) | |
Total operating expenses | | | | | | | 5,234 | | | 5,116 | | | 118 | |
Gains on Sales of Other Assets and Other, net | | | | | | | 6 | | | 1 | | | 5 | |
Operating Income | | | | | | | 1,575 | | | 1,283 | | | 292 | |
Other Income and Expenses, net | | | | | | | 131 | | | 130 | | | 1 | |
Interest Expense | | | | | | | 499 | | | 452 | | | 47 | |
Income Before Income Taxes | | | | | | | 1,207 | | | 961 | | | 246 | |
Income Tax Expense | | | | | | | 173 | | | 149 | | | 24 | |
Less: Income Attributable to Noncontrolling Interest | | | | | | | 13 | | | 21 | | | (8) | |
Segment Income | | | | | | | $ | 1,021 | | | $ | 791 | | | $ | 230 | |
| | | | | | | | | | | |
Duke Energy Carolinas GWh sales | | | | | | | 22,388 | | | 20,919 | | | 1,469 | |
Duke Energy Progress GWh sales | | | | | | | 16,128 | | | 15,345 | | | 783 | |
Duke Energy Florida GWh sales | | | | | | | 8,839 | | | 8,990 | | | (151) | |
Duke Energy Ohio GWh sales | | | | | | | 5,780 | | | 5,642 | | | 138 | |
Duke Energy Indiana GWh sales | | | | | | | 7,475 | | | 7,350 | | | 125 | |
Total Electric Utilities and Infrastructure GWh sales | | | | | | | 60,610 | | | 58,246 | | | 2,364 | |
Net proportional MW capacity in operation | | | | | | | 54,504 | | | 54,314 | | | 190 | |
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MD&A | SEGMENT RESULTS — ELECTRIC UTILITIES AND INFRASTRUCTURE |
Electric UtilitiesThe residential decoupling mechanism adjusts for variations in residential use per customer, including those due to weather and Infrastructure
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| Three Months Ended September 30, | | Nine Months Ended September 30, |
(in millions) | 2023 | | 2022 | | Variance | | 2023 | | 2022 | | Variance |
Operating Revenues | $ | 7,715 | | | $ | 7,439 | | | $ | 276 | | | $ | 20,363 | | | $ | 19,576 | | | $ | 787 | |
Operating Expenses | | | | | | | | | | | |
Fuel used in electric generation and purchased power | 2,591 | | | 2,653 | | | (62) | | | 7,045 | | | 6,481 | | | 564 | |
Operation, maintenance and other | 1,398 | | | 1,257 | | | 141 | | | 4,008 | | | 4,011 | | | (3) | |
Depreciation and amortization | 1,209 | | | 1,170 | | | 39 | | | 3,493 | | | 3,411 | | | 82 | |
Property and other taxes | 392 | | | 336 | | | 56 | | | 1,077 | | | 1,004 | | | 73 | |
Impairment of assets and other charges | 88 | | | 8 | | | 80 | | | 100 | | | 214 | | | (114) | |
Total operating expenses | 5,678 | | | 5,424 | | | 254 | | | 15,723 | | | 15,121 | | | 602 | |
Gains on Sales of Other Assets and Other, net | 2 | | | 7 | | | (5) | | | 30 | | | 12 | | | 18 | |
Operating Income | 2,039 | | | 2,022 | | | 17 | | | 4,670 | | | 4,467 | | | 203 | |
Other Income and Expenses, net | 131 | | | 114 | | | 17 | | | 388 | | | 381 | | | 7 | |
Interest Expense | 468 | | | 377 | | | 91 | | | 1,364 | | | 1,144 | | | 220 | |
Income Before Income Taxes | 1,702 | | | 1,759 | | | (57) | | | 3,694 | | | 3,704 | | | (10) | |
Income Tax Expense | 224 | | | 207 | | | 17 | | | 531 | | | 448 | | | 83 | |
Less: Income Attributable to Noncontrolling Interest | 31 | | | 12 | | | 19 | | | 75 | | | 19 | | | 56 | |
Segment Income | $ | 1,447 | | | $ | 1,540 | | | $ | (93) | | | $ | 3,088 | | | $ | 3,237 | | | $ | (149) | |
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Duke Energy Carolinas GWh sales | 24,810 | | | 24,554 | | | 256 | | | 66,367 | | | 69,125 | | | (2,758) | |
Duke Energy Progress GWh sales | 19,704 | | | 19,608 | | | 96 | | | 50,503 | | | 54,492 | | | (3,989) | |
Duke Energy Florida GWh sales | 13,665 | | | 13,555 | | | 110 | | | 34,055 | | | 35,797 | | | (1,742) | |
Duke Energy Ohio GWh sales | 6,356 | | | 7,074 | | | (718) | | | 17,694 | | | 18,635 | | | (941) | |
Duke Energy Indiana GWh sales | 8,526 | | | 8,934 | | | (408) | | | 22,803 | | | 24,528 | | | (1,725) | |
Total Electric Utilities and Infrastructure GWh sales | 73,061 | | | 73,725 | | | (664) | | | 191,422 | | | 202,577 | | | (11,155) | |
Net proportional MW capacity in operation | | | | | | | 49,906 | | | 49,520 | | | 386 | |
conservation, and is calculated based on an annual target revenue-per-customer.Three Months Ended September 30, 2023,March 31, 2024, as compared to September 30, 2022March 31, 2023
EU&I’s lower segment income is due toresults were driven by higher interest expenserevenues from rate cases across multiple jurisdictions, improved weather, and higher weather-normal retail sales volumes, partially offset by higher depreciation related to higheradditional plant in service.service. The following is a detailed discussion of the variance drivers by line item.
Operating Revenues. The variance was driven primarily by:
•a $155 million increase in fuel revenues primarily due to higher fuel cost recovery in the current year;
•a $146 million increase in storm revenues at Duke Energy Florida due to hurricanes Ian and Nicole collections;
•a $76 million increase in price due to 2022 Duke Energy Ohio Electric retail rate case and Ohio tax reform deferrals in prior year, higher pricing at Duke Energy Progress from the South Carolina retail rate case and interim rates from the North Carolina retail rate case, and base rate adjustments related to annual increases from the 2021 Settlement Agreement at Duke Energy Florida;
•a $60$149 million increase in retail sales due to favorableimproved weather compared to prior year; andyear, including impacts of decoupling;
•a $42$147 million increase due to higher pricing from jurisdictional rate cases primarily at Duke Energy Carolinas, Duke Energy Progress and Duke Energy Kentucky;
•a $40 million increase in weather-normal retail sales volumes;
•a $39 million increase in rider revenues primarily due to a decrease in the return of EDIT to customers compared to the prior year at Duke Energy CarolinasCarolinas; and increased Storm Protection Plan rider revenue
•a $36 million increase in storm revenues at Duke Energy Florida.Florida due to Hurricane Idalia collections.
Partially offset by:
•a $141$49 million decrease in wholesalefuel revenues primarily due to net lower capacity volumes at Duke Energy Progress and lower demand at Duke Energy Florida; and
•a $72 million decreasefuel cost recovery in weather-normal retail sales volumes.the current year.
Operating Expenses.Expenses. The variance was driven primarily by:
•a $141$129 million increase in depreciation and amortization primarily due to lower amortization of the DOE settlement regulatory liability and higher depreciable base at Duke Energy Florida, and higher depreciable base and higher net amortizations driven by the North Carolina rate cases at Duke Energy Carolinas and Duke Energy Progress; and
•a $47 million increase in operation, maintenance and other primarily driven by higher storm amortization at Duke Energy Florida;
•an $80 million increase in impairment of assetsFlorida, higher storm and other charges primarily due to rate case impactsnuclear outage costs at Duke Energy Carolinas and Duke Energy Progress, in the current year;
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MD&A | SEGMENT RESULTS — ELECTRIC UTILITIES AND INFRASTRUCTURE |
•a $56 million increase in property and other taxes primarily due to franchise taxes and higher property tax valuation adjustmentsstorm costs at Duke Energy Florida; and
•a $39 million increase in depreciation and amortization primarily due to higher plant in service.Carolinas.
Partially offset by:
•a $62$41 million decrease in fuel used in electric generation and purchased power due to lower deferred fuel amortization and lower fuel prices and lower volumes at Duke Energy Indiana, Duke Energy Florida and Duke Energy Ohio, partially offset by change in generation mix and higher amortizationsrecovery of deferred fuel.fuel expense at Duke Energy Carolinas and Duke Energy Progress; and
Other Income•an $11 million decrease in property and Expenses, net. The increase isother taxes primarily due to the sale of OPEB liabilities to a third party insurance company.lower franchise and gross receipts tax, driven by lower revenues and lower property taxes at Duke Energy Florida.
Interest Expense. The variance was primarily driven by higher interest rates and outstanding debt balances.balances and interest rates.
Income Tax Expense. The increase in tax expense was primarily due to a decreasean increase in pretax income, partially offset by an increase in the amortization of excess deferred taxes, partially offset by a decrease in pretax income.EDIT. The ETRs for the three months ended September 30,March 31, 2024, and 2023, were 14.3% and 2022, were 13.2% and 11.815.5%, respectively. The increasedecrease in the ETR was primarily due to a decreasean increase in the amortization of excess deferred taxes.
Income Attributable to Noncontrolling Interest.The increase is due to the second and final tranche of the GIC minority interest sale.
Nine Months Ended September 30, 2023, as compared to September 30, 2022
EU&I’s lower segment income is due to unfavorable weather, lower weather-normal retail sales volumes and higher interest expense, partially offset by the prior year Indiana Supreme Court ruling on recovery of certain coal ash costs. The following is a detailed discussion of the variance drivers by line item.
Operating Revenues. The variance was driven primarily by:
•a $1,052 million increase in fuel revenues primarily due to higher fuel cost recovery in the current year;
•a $260 million increase in storm revenues at Duke Energy Florida due to hurricanes Ian and Nicole collections;
•a $154 million increase in price due to 2022 Duke Energy Ohio Electric retail rate case, higher pricing at Duke Energy Progress from the South Carolina retail rate case and interim rates from the North Carolina retail rate case and base rate adjustments related to annual increases from the 2021 Settlement Agreement at Duke Energy Florida;
•an $84 million increase in rider revenues primarily due to a decrease in the return of EDIT to customers compared to the prior year at Duke Energy Carolinas and increased Storm Protection Plan rider revenue at Duke Energy Florida; and
•a $71 million increase due to the provision for rate refund recognized in the prior year related to the Indiana Supreme Court ruling on recovery of certain coal ash costs.
Partially offset by:
•a $320 million decrease in wholesale revenues primarily due to lower capacity revenues at Duke Energy Progress and lower demand at Duke Energy Florida;
•a $294 million decrease in retail sales due to unfavorable weather compared to prior year; and
•a $214 million decrease in weather-normal retail sales volumes.
Operating Expenses. The variance was driven primarily by:
•a $564 million increase in fuel used in electric generation and purchased power due to changes in the generation mix at Duke Energy Carolinas and higher amortization of deferred fuel;
•an $82 million increase in depreciation and amortization primarily due to higher plant in service, partially offset by the amortization of the Department of Energy settlement regulatory liability at Duke Energy Florida; and
•a $73 million increase in property and other taxes primarily due to higher property tax valuations at Duke Energy Florida and Duke Energy Carolinas, partially offset by favorable property tax true ups at Duke Energy Indiana.
Partially offset by:
•a $114 million decrease in impairment of assets and other charges primarily due to the Indiana Supreme Court ruling on recovery of certain coal ash costs in the prior year, partially offset by rate case impacts at Duke Energy Carolinas and Duke Energy Progress in the current year.
Gains on Sales of Other Assets and Other, net. Theincrease was primarily due to the sale of the Mint Street parking deck.
Interest Expense. The variance was primarily driven by higher interest rates and outstanding debt balances.
Income Tax Expense. The increase in tax expense was primarily due to a decrease in the amortization of excess deferred taxes. The ETRs for the nine months ended September 30, 2023, and 2022, were 14.4% and 12.1%, respectively. The increase in the ETR was primarily due to a decrease in the amortization of excess deferred taxes.
Income Attributable to Noncontrolling Interest.The increase is due to the second and final tranche of the GIC minority interest sale.EDIT.
| | | | | |
MD&A | SEGMENT RESULTS — GAS UTILITIES AND INFRASTRUCTURE |
Gas Utilities and Infrastructure
| | Three Months Ended September 30, | | Nine Months Ended September 30, |
| | | Three Months Ended March 31, | |
| | | Three Months Ended March 31, | |
| | | Three Months Ended March 31, | |
(in millions) | (in millions) | 2023 | | 2022 | | Variance | | 2023 | | 2022 | | Variance | (in millions) | | | | | | | 2024 | | 2023 | | Variance |
Operating Revenues | Operating Revenues | $ | 313 | | | $ | 427 | | | $ | (114) | | | $ | 1,583 | | | $ | 1,912 | | | $ | (329) | |
Operating Expenses | Operating Expenses | |
Cost of natural gas | |
Cost of natural gas | |
Cost of natural gas | Cost of natural gas | 57 | | | 189 | | | (132) | | | 434 | | | 859 | | | (425) | |
Operation, maintenance and other | Operation, maintenance and other | 103 | | | 115 | | | (12) | | | 332 | | | 410 | | | (78) | |
Depreciation and amortization | Depreciation and amortization | 88 | | | 80 | | | 8 | | | 257 | | | 241 | | | 16 | |
Property and other taxes | Property and other taxes | 32 | | | 29 | | | 3 | | | 93 | | | 103 | | | (10) | |
Impairment of assets and other charges | Impairment of assets and other charges | — | | | (12) | | | 12 | | | (4) | | | (12) | | | 8 | |
Total operating expenses | Total operating expenses | 280 | | | 401 | | | (121) | | | 1,112 | | | 1,601 | | | (489) | |
(Losses) Gains on Sales of Other Assets and Other, net | — | | | — | | | — | | | (1) | | | 4 | | | (5) | |
| Operating Income | |
Operating Income | |
Operating Income | Operating Income | 33 | | | 26 | | | 7 | | | 470 | | | 315 | | | 155 | |
| Other Income and Expenses, net | Other Income and Expenses, net | 39 | | | 25 | | | 14 | | | 86 | | | 61 | | | 25 | |
| Other Income and Expenses, net | |
| Other Income and Expenses, net | |
Interest Expense | Interest Expense | 56 | | | 45 | | | 11 | | | 158 | | | 127 | | | 31 | |
Income Before Income Taxes | Income Before Income Taxes | 16 | | | 6 | | | 10 | | | 398 | | | 249 | | | 149 | |
Income Tax Expense (Benefit) | 1 | | | 2 | | | (1) | | | 71 | | | (28) | | | 99 | |
Income Tax Expense | |
| Segment Income | |
Segment Income | |
Segment Income | Segment Income | $ | 15 | | | $ | 4 | | | $ | 11 | | | $ | 327 | | | $ | 277 | | | $ | 50 | |
| Piedmont LDC throughput (dekatherms) | Piedmont LDC throughput (dekatherms) | 143,224,608 | | | 157,145,659 | | | (13,921,051) | | | 426,926,457 | | | 463,863,034 | | | (36,936,577) | |
Piedmont LDC throughput (dekatherms) | |
Piedmont LDC throughput (dekatherms) | |
Duke Energy Midwest LDC throughput (Mcf) | Duke Energy Midwest LDC throughput (Mcf) | 9,899,743 | | | 9,559,214 | | | 340,529 | | | 55,809,898 | | | 63,346,715 | | | (7,536,817) | |
Three Months Ended September 30, 2023,March 31, 2024, as compared to September 30, 2022March 31, 2023
GU&I’s results were impacted primarily by margin growth, partially offset by higher interest expense and operation, maintenance and other expense. The following is a detailed discussion of the variance drivers by line item.
Operating Revenues. The variance was driven primarily by:
•a $132 million decrease in cost of natural gas due to lower rates, decreased off-system sales natural gas costs and lower volumes.
Partially offset by:
•an $11 million increase due to Tennessee ARM revenue true up.
Operating Expenses.The variance was driven primarily by:
•a $132 million decrease in cost of natural gas due to lower rates, decreased off-system sales natural gas costs and lower volumes; and
•a $12 million decrease in operations, maintenance and other primarily due to lower spend on internal and contract labor costs.
Partially offset by:
•a $12 million increase in impairment in assets and other charges due to the reversal in the prior year of the impairment related to the propane caverns in Ohio; and
•an $8 million increase in depreciation and amortization due to additional plant in service and lower CEP deferrals.
Other Income and Expenses, Net. The increase was primarily due to the revision in the Atlantic Coast Pipeline (ACP) ARO closure cost.
Interest Expense.The increase was primarily due to higher interest rates and outstanding debt balances.
Income Tax Expense (Benefit). The decrease in tax expense was primarily due to an increase in the amortization of excess deferred taxes, partially offset by an increase in pretax income. The ETRs for the three months ended September 30, 2023, and 2022, were 6.3% and 33.3%, respectively. The decrease in the ETR was primarily due to an increase in the amortization of excess deferred taxes.
Nine Months Ended September 30, 2023, as compared to September 30, 2022
GU&I’s results were impacted primarily by margin growth partially offset by higher interest expense. The following is a detailed discussion of the variance drivers by line item.
Operating Revenues.The variance was driven primarily by:
•a $425$66 million decrease due to lower natural gas costs passed through to customers, lower volumes,rates, and decreased off-system sales natural gas costs.
| | | | | |
MD&A | SEGMENT RESULTS — GAS UTILITIES AND INFRASTRUCTURE |
Partially offset by:
•an $18a $21 million increase due to higher base rates, primarily from the Duke Energy Ohio rate case, partially offset by lower rider revenues relatedat Duke Energy Ohio;
•a $16 million increase due to Ohio CEP;Tennessee ARM revenues;
•a $9 million increase due to customer growth; and
•an $18 million increase due to secondary marketing sales;
•a $15 million increase due to the MGP Settlement in prior year; and
•a $13$8 million increase due to North Carolina IMR.
Operating Expenses. The variance was driven primarily by:
•a $425$66 million decrease in cost of natural gas due to lower natural gas costs passed through to customers, lower volumes,rates, and decreased off-system sales natural gas costs;
•a $78 million decrease in operations, maintenance and other due to Ohio MGP Settlement in prior year and lower spend on internal and contract labor costs; and
•a $10 million decrease in property and other taxes due to Ohio and Kentucky property tax true ups.costs.
Partially offset by:
•a $16$15 million increase in property and other taxes due to property tax true ups in the prior year and higher property tax in current year;
•a $13 million increase in depreciation and amortization due to additional plant in service andhigher depreciable base, lower CEP deferrals.deferrals, an increase in rider amortization and higher depreciation for Foothills and Upper Piedmont projects; and
•a $10 million increase in operations, maintenance and other primarily due to higher outside services, labor and service company costs.
Other Income and Expenses, net.Net. The increasedecrease was primarily due to revision in ACP ARO closure cost and higher AFUDC equity income.lower production at SustainRNG.
Interest Expense. The increase was primarily due to higher outstanding debt balances and interest rates.
Income Tax Expense (Benefit). The increase in tax expense was primarily due to a decrease in the amortization of excess deferred taxes related to the Ohio MGP Settlement recorded in the prior yearEDIT and an increase in pretax income. The ETRs for the ninethree months ended September 30,March 31, 2024, and 2023, were 19.5% and 2022, were 17.8% and (11.2)%18.0%, respectively. The increase in the ETR was primarily due to a decrease in the amortization of excess deferred taxesEDIT.
| | | | | |
MD&A | SEGMENT RESULTS — GAS UTILITIES AND INFRASTRUCTURE |
Other
| | | | | | | | | | | | | | | | | | | | | | | |
| | | Three Months Ended March 31, |
(in millions) | | | | | | | 2024 | | 2023 | | Variance |
Operating Revenues | | | | | | | $ | 38 | | | $ | 31 | | | $ | 7 | |
| | | | | | | | | | | |
| | | | | | | | | | | |
| | | | | | | | | | | |
| | | | | | | | | | | |
| | | | | | | | | | | |
| | | | | | | | | | | |
Operating Expenses | | | | | | | 56 | | | 29 | | | 27 | |
Gains on Sales of Other Assets and Other, net | | | | | | | 5 | | | 6 | | | (1) | |
Operating (Loss) Income | | | | | | | (13) | | | 8 | | | (21) | |
Other Income and Expenses, net | | | | | | | 79 | | | 62 | | | 17 | |
Interest Expense | | | | | | | 294 | | | 256 | | | 38 | |
Loss Before Income Taxes | | | | | | | (228) | | | (186) | | | (42) | |
Income Tax Benefit | | | | | | | (64) | | | (57) | | | (7) | |
| | | | | | | | | | | |
Less: Preferred Dividends | | | | | | | 39 | | | 39 | | | — | |
Net Loss | | | | | | | $ | (203) | | | $ | (168) | | | $ | (35) | |
Three Months Ended March 31, 2024, as compared to March 31, 2023
Other's results were impacted by higher interest expense driven by higher outstanding long-term debt.
Operating Expenses. The increase was primarily driven by obligations to the Duke Energy Foundation and lower loss experience related to the Ohio MGP Settlement recordedcaptive insurance claims in the prior year.
Other
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| Three Months Ended September 30, | | Nine Months Ended September 30, |
(in millions) | 2023 | | 2022 | | Variance | | 2023 | | 2022 | | Variance |
Operating Revenues | $ | 33 | | | $ | 30 | | | $ | 3 | | | $ | 98 | | | $ | 91 | | | $ | 7 | |
| | | | | | | | | | | |
| | | | | | | | | | | |
| | | | | | | | | | | |
| | | | | | | | | | | |
| | | | | | | | | | | |
| | | | | | | | | | | |
Operating Expenses | 4 | | | 27 | | | (23) | | | 53 | | | 69 | | | (16) | |
Gains on Sales of Other Assets and Other, net | 5 | | | — | | | 5 | | | 16 | | | 1 | | | 15 | |
Operating Income | 34 | | | 3 | | | 31 | | | 61 | | | 23 | | | 38 | |
Other Income and Expenses, net | 47 | | | 6 | | | 41 | | | 168 | | | (5) | | | 173 | |
Interest Expense | 283 | | | 205 | | | 78 | | | 810 | | | 529 | | | 281 | |
Loss Before Income Taxes | (202) | | | (196) | | | (6) | | | (581) | | | (511) | | | (70) | |
Income Tax Benefit | (182) | | | (51) | | | (131) | | | (285) | | | (123) | | | (162) | |
Add: Income Attributable to Noncontrolling Interests | — | | | 1 | | | (1) | | | — | | | — | | | — | |
Less: Preferred Dividends | 39 | | | 39 | | | — | | | 92 | | | 92 | | | — | |
Net Loss | $ | (59) | | | $ | (183) | | | $ | 124 | | | $ | (388) | | | $ | (480) | | | $ | 92 | |
Three Months Ended September 30, 2023, as compared to September 30, 2022
The lower net loss was driven by an increase in the tax benefit due to a favorable adjustment related to certain allowable tax deductions, lower franchise tax expense and higher returns on investments, partially offset by higher interest expense.
Operating Expenses. The decrease was primarily driven by franchise tax refunds of $38 million in the current year, partially offset by an increase in franchise tax accruals of $6 million.
Other Income and Expenses, net. The varianceincrease was primarily due to higher yields on captive insurance investments and higher return on investments that fund certain employee benefit obligations.
Interest Expense. The varianceincrease was primarily due to higher interest rates on long-term debt and commercial paper, and higher outstanding long-term debt balances.balances and interest rates.
Income Tax Benefit. The increase in the tax benefit was primarily due to benefits associated with ongoing tax efficiency efforts.higher pretax losses. The ETRs for the three months ended September 30,March 31, 2024, and 2023, were 28.1% and 2022, were 90.1% and 26.0%30.6%, respectively. The decrease in the ETR was primarily due to benefits associated with ongoing tax efficiency efforts. During the third quarter of 2023, the Company evaluated the deductibility of certain items spanning periods currently open under federal statute, including items related to interest on company-owned life insurance. As a result of this analysis, the Company recorded a favorable adjustment of approximately $120 million.
Nine Months Ended September 30, 2023, as compared to September 30, 2022
The lower net loss was driven by an increase in the tax benefit and higher return on investments,levelization, partially offset by highernon-deductible interest expense.
| | | | | |
MD&A | SEGMENT RESULTS - OTHER |
Operating Expenses. The decrease was primarily driven by franchise tax refunds of $63 millionon company owned life insurance in the current year, partially offset by an increase in franchise tax accruals of $19 million and $26 million of increased expense on certain employee benefit obligations in the currentprior year.
Other Income and Expenses, net. The variance was primarily due to higher return on investments that fund certain employee benefit obligations and higher yields on captive insurance investments.
Interest Expense. The variance was primarily due to higher interest rates on long-term debt and commercial paper, and higher outstanding long-term debt balances.
Income Tax Benefit. The increase in the tax benefit was primarily due to benefits associated with ongoing tax efficiency efforts and an increase in pretax losses. The ETRs for the nine months ended September 30, 2023, and 2022, were 49.1% and 24.1%, respectively. The increase in the ETR was primarily due to benefits associated with ongoing tax efficiency efforts. During the third quarter of 2023, the Company evaluated the deductibility of certain items spanning periods currently open under federal statute, including items related to interest on company-owned life insurance. As a result of this analysis, the Company recorded a favorable adjustment of approximately $120 million.
(LOSS) INCOMELOSS FROM DISCONTINUED OPERATIONS, NET OF TAX
| | Three Months Ended September 30, | | Nine Months Ended September 30, |
| | | Three Months Ended March 31, | |
| | | Three Months Ended March 31, | |
| | | Three Months Ended March 31, | |
(in millions) | (in millions) | 2023 | | 2022 | | Variance | | 2023 | | 2022 | | Variance | (in millions) | | | | | | | 2024 | | 2023 | | Variance |
(Loss) Income From Discontinued Operations, net of tax | $ | (152) | | | $ | 3 | | | $ | (155) | | | $ | (1,316) | | | $ | (30) | | | $ | (1,286) | |
Loss From Discontinued Operations, net of tax | |
Three Months Ended September 30, 2023,March 31, 2024, as compared to September 30, 2022March 31, 2023
The variance was primarily driven by the impairmentsimpairment on the sale of the Commercial Renewables business recorded in 2023.
Nine Months Ended September 30, 2023, as compared to September 30, 2022
The variance was primarily driven by the impairments on the sale of the Commercial Renewables business recorded in 2023.prior year.
DUKE ENERGY CAROLINAS
Results of Operations
| | Nine Months Ended September 30, |
| Three Months Ended March 31, | | | Three Months Ended March 31, |
(in millions) | (in millions) | 2023 | | 2022 | | Variance | (in millions) | 2024 | | 2023 | | Variance |
Operating Revenues | Operating Revenues | $ | 6,155 | | | $ | 5,844 | | | $ | 311 | |
Operating Expenses | Operating Expenses | |
Fuel used in electric generation and purchased power | |
Fuel used in electric generation and purchased power | |
Fuel used in electric generation and purchased power | Fuel used in electric generation and purchased power | 1,823 | | | 1,423 | | | 400 | |
Operation, maintenance and other | Operation, maintenance and other | 1,285 | | | 1,410 | | | (125) | |
Depreciation and amortization | Depreciation and amortization | 1,186 | | | 1,138 | | | 48 | |
Property and other taxes | Property and other taxes | 276 | | | 258 | | | 18 | |
Impairment of assets and other charges | Impairment of assets and other charges | 70 | | | (3) | | | 73 | |
Total operating expenses | Total operating expenses | 4,640 | | | 4,226 | | | 414 | |
Gains on Sales of Other Assets and Other, net | Gains on Sales of Other Assets and Other, net | 26 | | | 4 | | | 22 | |
Operating Income | Operating Income | 1,541 | | | 1,622 | | | (81) | |
Other Income and Expenses, net | Other Income and Expenses, net | 181 | | | 172 | | | 9 | |
Interest Expense | Interest Expense | 504 | | | 415 | | | 89 | |
Income Before Income Taxes | Income Before Income Taxes | 1,218 | | | 1,379 | | | (161) | |
Income Tax Expense | Income Tax Expense | 97 | | | 87 | | | 10 | |
Net Income | Net Income | $ | 1,121 | | | $ | 1,292 | | | $ | (171) | |
| | | | | |
MD&A | DUKE ENERGY CAROLINAS |
The following table shows the percent changes in GWh sales and average number of customers. The percentages for retail customer classes represent billed sales only. Total sales includes billed and unbilled retail sales and wholesale sales to incorporated municipalities, public and private utilities and power marketers. Amounts are not weather-normalized.
| | | | | |
Increase (Decrease) over prior year | 20232024 |
Residential sales | (4.5)6.9 | % |
General service sales | (0.7)4.8 | % |
Industrial sales | (5.1)(0.5) | % |
Wholesale power sales | 6.319.1 | % |
Joint dispatch sales | 28.7(0.3) | % |
Total sales | (4.0)7.0 | % |
Average number of customers | 1.72.1 | % |
| | | | | |
MD&A | DUKE ENERGY CAROLINAS |
NineThree Months Ended September 30, 2023,March 31, 2024, as compared to September 30, 2022March 31, 2023
Operating Revenues. The variance was driven primarily by:
•a $429$238 million increase in fuel revenues due to higher fuel cost recovery;rates and volumes;
•a $73$91 million increase in retail pricing due to rates from the North Carolina retail rate case;
•an $80 million increase in retail sales due to improved weather compared to prior year, including the impacts of decoupling;
•a $31 million increase in rider revenues primarily due to the decrease in the return of EDIT to customers compared to the prior year and increases in energy efficiency primarily due to program performance.
Partially offset by:
•a $153 million decrease in retail sales due to unfavorable weather compared to prior year; and
•a $71$21 million decreaseincrease in weather-normal retail sales volumes.
Operating Expenses. The variance was driven primarily by:
•a $400$237 million increase in fuel used in electric generation and purchased power primarily due to changes in the generation mix, the recovery of fuel expense and higher amortization of deferred fuel, partially offset by lower Joint Dispatch Agreement (JDA)JDA purchased volumes and prices;
•a $73 million increase in impairment of assets and other primarily due to rate case impacts and a prior year adjustment of the South Carolina Supreme Court decision on coal ash; and
•a $48$31 million increase in depreciation and amortization primarily due to a higher depreciable base, partially offsetand higher net amortizations driven by a decrease in depreciationthe North Carolina rate case; and amortization primarily due to the prior year South Carolina Supreme Court decision on coal ash and an increase in Grid Improvement Plan deferrals.
Partially offset by:
•a $125an $11 million decreaseincrease in operation, maintenance and other expense primarily due to a decrease in spend on outside services and lowerhigher storm restoration costs.
Gains on Sales of Other Assets and Other, net. Theincrease was primarily due to the sale of the Mint Street parking deck.
Interest Expense. The varianceincrease was driven byprimarily due to higher interest rates and outstanding debt balances.balances and interest rates.
Income Tax Expense. The increase in tax expense was primarily due to a decreasean increase in pretax income, partially offset by an increase in the amortization of excess deferred taxes, partially offset by a decrease in pretax income.EDIT.
PROGRESS ENERGY
Results of Operations
| | Nine Months Ended September 30, |
| Three Months Ended March 31, | | | Three Months Ended March 31, |
(in millions) | (in millions) | 2023 | | 2022 | | Variance | (in millions) | 2024 | | 2023 | | Variance |
Operating Revenues | Operating Revenues | $ | 10,315 | | | $ | 10,087 | | | $ | 228 | |
Operating Expenses | Operating Expenses | |
Fuel used in electric generation and purchased power | |
Fuel used in electric generation and purchased power | |
Fuel used in electric generation and purchased power | Fuel used in electric generation and purchased power | 3,902 | | | 3,927 | | | (25) | |
Operation, maintenance and other | Operation, maintenance and other | 1,963 | | | 1,829 | | | 134 | |
Depreciation and amortization | Depreciation and amortization | 1,609 | | | 1,607 | | | 2 | |
Property and other taxes | Property and other taxes | 546 | | | 472 | | | 74 | |
Impairment of assets and other charges | Impairment of assets and other charges | 29 | | | 4 | | | 25 | |
Total operating expenses | Total operating expenses | 8,049 | | | 7,839 | | | 210 | |
Gains on Sales of Other Assets and Other, net | Gains on Sales of Other Assets and Other, net | 20 | | | 6 | | | 14 | |
Operating Income | Operating Income | 2,286 | | | 2,254 | | | 32 | |
Other Income and Expenses, net | Other Income and Expenses, net | 146 | | | 150 | | | (4) | |
Interest Expense | Interest Expense | 706 | | | 616 | | | 90 | |
Income Before Income Taxes | Income Before Income Taxes | 1,726 | | | 1,788 | | | (62) | |
Income Tax Expense | Income Tax Expense | 280 | | | 289 | | | (9) | |
Net Income | Net Income | $ | 1,446 | | | $ | 1,499 | | | $ | (53) | |
| Less: Net Income Attributable to Noncontrolling Interests | — | | | 1 | | | (1) | |
Net Income Attributable to Parent | $ | 1,446 | | | $ | 1,498 | | | $ | (52) | |
|
NineThree Months Ended September 30, 2023,March 31, 2024, as compared to September 30, 2022March 31, 2023
Operating Revenues. The variance was driven primarily by:
•a $260$63 million increase in retail sales due to improved weather compared to the prior year, including impacts of decoupling, at Duke Energy Progress;
•a $62 million increase in weather-normal retail sales volumes at Duke Energy Progress;
•a $44 million increase due to higher pricing from the North Carolina and South Carolina rate cases at Duke Energy Progress;
•a $36 million increase in storm revenues at Duke Energy Florida due to hurricanes Ian and NicoleHurricane Idalia collections;
•a $242 million increase in fuel cost recovery at Duke Energy Florida driven by higher fuel rates in the current year, partially offset by a decrease at Duke Energy Progress driven by lower JDA sales volumes at lower prices;
•a $74 million increase due to higher pricing related to rate cases at Duke Energy Progress from interim rates from the North Carolina retail rate case and the South Carolina retail rate case, and base rate adjustments related to annual increases from the 2021 Settlement Agreement at Duke Energy Florida;
•a $35 million increase in rider revenues at Duke Energy Florida primarily due to increased Storm Protection Plan rider revenue; and
•a $20$10 million increase in franchise taxes revenue primarilywholesale revenues, net of fuel, due to increased revenues over prior year.higher capacity rates at Duke Energy Progress.
Partially offset by:
•a $265$46 million decrease in wholesalefuel and capacity revenues net of fuel,primarily due to lower capacity raterates at Duke Energy Florida, partially offset by an increase in fuel rates and volumes at Duke Energy Progress and lower demand at Duke Energy Florida;
•an $85 million decrease in weather-normal retail sales volumes; and
•a $66 million decrease in retail sales due to unfavorable weather compared to prior year.Progress.
Operating Expenses. The variance was driven primarily by:
•an $83 million increase in depreciation and amortization due to lower amortization of the DOE settlement regulatory liability and higher depreciable base at Duke Energy Florida and higher depreciable base, and higher net amortizations driven by the North Carolina rate case, at Duke Energy Progress; and
•a $134$60 million increase in operation, maintenance and other primarily due to storm amortization at Duke Energy Florida partially offset by a decrease at Duke Energy Progress due to lowerand higher storm costs;
•a $74 million increase in property and other taxes primarily due to franchise taxes driven by higher revenues and property taxes due to higher property tax valuation adjustments at Duke Energy Florida; and
•a $25 million increase in impairment of asset and other charges primarily due to rate case impactsnuclear outage costs at Duke Energy Progress.
Partially offset by:
•a $25$48 million decrease in fuel used in electric generation and purchased power primarily due to lower volumesnatural gas prices and pricethe expiration of a purchased power contract in December 2023 at Duke Energy Progress,Florida, partially offset by higher amortizationvolumes and prices, net of deferredthe recovery of fuel balancesexpense, at Duke Energy Progress; and
•a $10 million decrease in property and other taxes primarily due to lower franchise and gross receipts tax, driven by lower revenues and lower property taxes at Duke Energy Florida.
Gains on Sales of Other Assets and Other, net.Interest Expense. Theincrease was primarily due to sales of cell tower leases.
Interest Expense. The variance was driven primarily by higher outstanding debt balances and interest rates at Duke Energy Florida and Duke Energy Progress.
Income Tax Expense. The decreaseincrease in tax expense was primarily due to a decreasean increase in pretax income.income, partially offset by an increase in the amortization of EDIT.
DUKE ENERGY PROGRESS
Results of Operations
| | Nine Months Ended September 30, |
| Three Months Ended March 31, | | | Three Months Ended March 31, |
(in millions) | (in millions) | 2023 | | 2022 | | Variance | (in millions) | 2024 | | 2023 | | Variance |
Operating Revenues | Operating Revenues | $ | 4,844 | | | $ | 5,182 | | | $ | (338) | |
Operating Expenses | Operating Expenses | |
Fuel used in electric generation and purchased power | |
Fuel used in electric generation and purchased power | |
Fuel used in electric generation and purchased power | Fuel used in electric generation and purchased power | 1,685 | | | 1,916 | | | (231) | |
Operation, maintenance and other | Operation, maintenance and other | 1,051 | | | 1,101 | | | (50) | |
Depreciation and amortization | Depreciation and amortization | 935 | | | 890 | | | 45 | |
Property and other taxes | Property and other taxes | 143 | | | 136 | | | 7 | |
Impairment of assets and other charges | Impairment of assets and other charges | 31 | | | 4 | | | 27 | |
Total operating expenses | Total operating expenses | 3,845 | | | 4,047 | | | (202) | |
Gains on Sales of Other Assets and Other, net | Gains on Sales of Other Assets and Other, net | 2 | | | 2 | | | — | |
Operating Income | Operating Income | 1,001 | | | 1,137 | | | (136) | |
Other Income and Expenses, net | Other Income and Expenses, net | 92 | | | 83 | | | 9 | |
Interest Expense | Interest Expense | 315 | | | 260 | | | 55 | |
Income Before Income Taxes | Income Before Income Taxes | 778 | | | 960 | | | (182) | |
Income Tax Expense | Income Tax Expense | 101 | | | 129 | | | (28) | |
Net Income | Net Income | $ | 677 | | | $ | 831 | | | $ | (154) | |
The following table shows the percent changes in GWh sales and average number of customers. The percentages for retail customer classes represent billed sales only. Total sales includes billed and unbilled retail sales and wholesale sales to incorporated municipalities, public and private utilities and power marketers. Amounts are not weather-normalized.
| | | | | |
Increase (Decrease) over prior period | 20232024 |
Residential sales | (5.2)5.9 | % |
General service sales | (2.7)5.6 | % |
Industrial sales | (13.6)(5.4) | % |
Wholesale power sales | (4.5)6.4 | % |
Joint dispatch sales | (14.0)(3.2) | % |
Total sales | (7.3)5.1 | % |
Average number of customers | 1.72.1 | % |
NineThree Months Ended September 30, 2023,March 31, 2024, as compared to September 30, 2022March 31, 2023
Operating Revenues. The variance was driven primarily by:
•a $182an $80 million decreaseincrease in fuel revenues due to lower JDA sales volumes at lower prices in the current year, partially offset by higher fuel cost recovery;rates and volumes;
•a $110$63 million decreaseincrease in retail sales due to unfavorableimproved weather compared to prior year;year, including impacts of decoupling;
•a $69$62 million decreaseincrease in weather-normal retail sales volumes;
•a $44 million increase due to higher pricing from the North Carolina and South Carolina rate cases; and
•a $33$10 million decreaseincrease in wholesale revenues, net of fuel, due to lowerhigher capacity rates and volumes.
Partially offset by:
•a $60 million increase due to higher pricing from interim rates from the North Carolina retail rate case and the South Carolina retail rate case.rates.
Operating Expenses. The variance was driven primarily by:
•a $231$75 million decreaseincrease in fuel used in electric generation and purchased power primarily due to lower volumes and prices, partially offset by the recovery of fuel expenses;expenses and changes in the generation mix, partially offset by lower natural gas prices;
•a $25 million increase in operation, maintenance and other primarily due to higher storm costs and higher nuclear outage costs, net of levelization; and
•a $50 million decrease in operation, maintenance and other expense primarily due to lower storm costs.
Partially offset by:
•a $45$24 million increase in depreciation and amortization due to higher depreciable base; and
•a $27 million increase in impairment of assets and other charges primarily due to a higher depreciable base, and higher net amortizations driven by the North Carolina rate case impacts.case.
Interest Expense. The varianceincrease was driven primarily by higher interest rates and outstanding debt balances.balances and interest rates.
Income Tax Expense. The decreaseincrease in tax expense was primarily due to a decreasean increase in pretax income, partially offset by a decreasean increase in the amortization of excess deferred taxes.EDIT.
DUKE ENERGY FLORIDA
Results of Operations
| | | | | | | | | | | | | | | | | |
| Three Months Ended March 31, |
(in millions) | 2024 | | 2023 | | Variance |
Operating Revenues | $ | 1,436 | | | $ | 1,510 | | | $ | (74) | |
Operating Expenses | | | | | |
Fuel used in electric generation and purchased power | 523 | | | 646 | | | (123) | |
Operation, maintenance and other | 251 | | | 213 | | | 38 | |
Depreciation and amortization | 248 | | | 190 | | | 58 | |
Property and other taxes | 106 | | | 120 | | | (14) | |
Impairment of assets and other charges | — | | | 1 | | | (1) | |
Total operating expenses | 1,128 | | | 1,170 | | | (42) | |
Gains on Sales of Other Assets and Other, net | 1 | | | 1 | | | — | |
Operating Income | 309 | | | 341 | | | (32) | |
Other Income and Expenses, net | 24 | | | 30 | | | (6) | |
Interest Expense | 111 | | | 115 | | | (4) | |
Income Before Income Taxes | 222 | | | 256 | | | (34) | |
Income Tax Expense | 43 | | | 51 | | | (8) | |
Net Income | $ | 179 | | | $ | 205 | | | $ | (26) | |
DUKE ENERGY FLORIDA
Results of Operations
| | | | | | | | | | | | | | | | | |
| Nine Months Ended September 30, |
(in millions) | 2023 | | 2022 | | Variance |
Operating Revenues | $ | 5,456 | | | $ | 4,890 | | | $ | 566 | |
Operating Expenses | | | | | |
Fuel used in electric generation and purchased power | 2,218 | | | 2,011 | | | 207 | |
Operation, maintenance and other | 898 | | | 716 | | | 182 | |
Depreciation and amortization | 674 | | | 717 | | | (43) | |
Property and other taxes | 403 | | | 335 | | | 68 | |
Impairment of assets and other charges | (1) | | | — | | | (1) | |
Total operating expenses | 4,192 | | | 3,779 | | | 413 | |
Gains on Sales of Other Assets and Other, net | 1 | | | 5 | | | (4) | |
Operating Income | 1,265 | | | 1,116 | | | 149 | |
Other Income and Expenses, net | 56 | | | 74 | | | (18) | |
Interest Expense | 305 | | | 258 | | | 47 | |
Income Before Income Taxes | 1,016 | | | 932 | | | 84 | |
Income Tax Expense | 206 | | | 181 | | | 25 | |
Net Income | $ | 810 | | | $ | 751 | | | $ | 59 | |
The following table shows the percent changes in GWh sales and average number of customers. The percentages for retail customer classes represent billed sales only. Wholesale power sales include both billed and unbilled sales. Total sales includes billed and unbilled retail sales and wholesale sales to incorporated municipalities, public and private utilities and power marketers. Amounts are not weather-normalized.
| | | | | |
Increase (Decrease) over prior period | 20232024 |
Residential sales | (2.7) | % |
General service sales | (2.4) | % |
Industrial sales | 1.5 | % |
General serviceWholesale power sales | 1.1 | % |
Industrial sales | (5.6) | % |
Wholesale and other | (46.7)(6.2) | % |
Total sales | (4.9)(1.7) | % |
Average number of customers | 1.72.2 | % |
NineThree Months Ended September 30, 2023,March 31, 2024, as compared to September 30, 2022March 31, 2023
Operating Revenues. The variance was driven primarily by:
•a $424$126 million increasedecrease in fuel and capacity revenues primarily due to an increase inlower fuel and capacity rates billed to retail customers;
•a $260 million increase in storm revenues due to hurricanes Ian and Nicole collections;
•a $44 million increase in retail sales due to favorable weather in the current year;
•a $35 million increase in rider revenues primarily due to increased rate of Storm Protection Plan rider; and
•a $20 million increase in franchise taxes revenue primarily due to increased revenues over prior year.customers.
Partially offset by:
•a $232$36 million decreaseincrease in wholesale powerstorm revenues net of fuel, primarily due to decreased demand.Hurricane Idalia collections; and
•a $15 million increase in other revenues due to higher residential fixed bill program revenues and higher Clean Energy Connection subscription revenues.
Operating Expenses. The variance was driven primarily by:
•a $207$123 million increasedecrease in fuel used in electric generation and purchased power primarily due to higher amortizationlower natural gas prices and the expiration of deferred fuela purchased power contract in December 2023; and capacity expense;
•a $182$14 million decrease in property and other taxes primarily due to lower franchise and gross receipts tax, driven by lower revenues and lower property taxes.
Partially offset by:
•a $58 million increase in depreciation and amortization primarily due to lower amortization of the DOE settlement regulatory liability and higher depreciable base; and
•a $38 million increase in operation, maintenance and other primarily due to storm amortization; and
•a $68 million increase in property and other taxes primarily due to franchise taxes driven by higher revenues and property taxes due to higher property tax valuation adjustments.
Partially offset by:
•a $43 million decrease in depreciation and amortization primarily due to the amortization of Department of Energy settlement regulatory liability, partially offset by higher depreciable base.
Other Income and Expenses, net. The decrease is primarily due to the wholesale portion of the Department of Energy settlement for nuclear fuel storage in prior year.
Interest Expense. The increase was primarily due to higher interest rates and outstanding debt balances.amortization.
Income Tax Expense. The increasedecrease in tax expense was primarily due to an increase in pretax income and a decrease in the amortization of excess deferred taxes, partially offset by an increase in production tax credits.pretax income.
DUKE ENERGY OHIO
Results of Operations
| | Nine Months Ended September 30, |
| Three Months Ended March 31, | | | Three Months Ended March 31, |
(in millions) | (in millions) | 2023 | | 2022 | | Variance | (in millions) | 2024 | | 2023 | | Variance |
Operating Revenues | Operating Revenues | |
Regulated electric | |
Regulated electric | |
Regulated electric | Regulated electric | $ | 1,411 | | | $ | 1,320 | | | $ | 91 | |
Regulated natural gas | Regulated natural gas | 464 | | | 491 | | | (27) | |
| Total operating revenues | Total operating revenues | 1,875 | | | 1,811 | | | 64 | |
Total operating revenues | |
Total operating revenues | |
Operating Expenses | Operating Expenses | |
Fuel used in electric generation and purchased power | Fuel used in electric generation and purchased power | 485 | | | 439 | | | 46 | |
Fuel used in electric generation and purchased power | |
Fuel used in electric generation and purchased power | |
| Cost of natural gas | |
Cost of natural gas | |
Cost of natural gas | Cost of natural gas | 118 | | | 174 | | | (56) | |
Operation, maintenance and other | Operation, maintenance and other | 358 | | | 408 | | | (50) | |
Depreciation and amortization | Depreciation and amortization | 266 | | | 247 | | | 19 | |
Property and other taxes | Property and other taxes | 258 | | | 272 | | | (14) | |
Impairment of assets and other charges | — | | | (11) | | | 11 | |
| Total operating expenses | |
Total operating expenses | |
Total operating expenses | Total operating expenses | 1,485 | | | 1,529 | | | (44) | |
| Operating Income | |
Operating Income | |
Operating Income | Operating Income | 390 | | | 282 | | | 108 | |
Other Income and Expenses, net | Other Income and Expenses, net | 33 | | | 16 | | | 17 | |
Interest Expense | Interest Expense | 125 | | | 92 | | | 33 | |
Income Before Income Taxes | Income Before Income Taxes | 298 | | | 206 | | | 92 | |
Income Tax Expense (Benefit) | 47 | | | (30) | | | 77 | |
Income Tax Expense | |
| Net Income | Net Income | $ | 251 | | | $ | 236 | | | $ | 15 | |
| Net Income | |
| Net Income | |
The following table shows the percent changes in GWh sales of electricity, dekatherms of natural gas delivered and average number of electric and natural gas customers. The percentages for retail customer classes represent billed sales only. Total sales includes billed and unbilled retail sales and wholesale sales to incorporated municipalities, public and private utilities and power marketers. Amounts are not weather-normalized.
| | Electric | Natural Gas |
| Electric | | | Electric | Natural Gas |
Increase (Decrease) over prior year | Increase (Decrease) over prior year | 2023 | 2023 | Increase (Decrease) over prior year | 2024 | 2024 |
Residential sales | Residential sales | (5.6) | % | (13.4) | % | Residential sales | 2.4 | % | 3.8 | % |
General service sales | General service sales | 1.8 | % | (24.2) | % | General service sales | (1.8) | % | 5.1 | % |
Industrial sales | Industrial sales | 8.7 | % | 2.7 | % | Industrial sales | (9.1) | % | 6.0 | % |
Wholesale electric power sales | Wholesale electric power sales | (33.8) | % | n/a | Wholesale electric power sales | 271.4 | % | n/a |
Other natural gas sales | Other natural gas sales | n/a | (0.4) | % | Other natural gas sales | n/a | 4.0 | % |
Total sales | Total sales | (5.0) | % | (11.9) | % | Total sales | 2.4 | % | 4.3 | % |
Average number of customers | Average number of customers | 0.9 | % | 0.5 | % | Average number of customers | 1.0 | % | 1.0 | % |
NineThree Months Ended September 30, 2023,March 31, 2024, as compared to September 30, 2022March 31, 2023
Operating Revenues. The variance was driven primarily by:
•a $93an $84 million increase in price due to the 2022 Duke Energy Ohio Electric retail rate case and Ohio tax reform deferrals in prior year;
•a $58 million increasedecrease in fuel-related revenues primarily due to higherlower retail sales volumes, and higher fuel cost recovery in the current year; and
•a $15 million increase due to the MGP Settlement in the prior year.as well as decreased natural gas costs.
Partially offset by:
•a $54$21 million decreaseincrease due to higher pricing due to the Duke Energy Ohio natural gas rate case net of decreases in the Ohio CEP rider and Accelerated Main Replacement Program (AMRP) Rider;
•a $12 million increase due to higher pricing due to the Duke Energy Kentucky electric rate case;
•a $10 million increase in revenues related to lowerhigher Ohio Valley Electric Corporation (OVEC) rider collections and OVEC sales into PJM Interconnection, LLC (PJM);
•a $33 million decrease due to unfavorable weather compared to prior year; and
•a $6an $8 million decreaseincrease in retail revenue riders primarily due to the decrease in Distribution Capital Investment Rider (DCI), partially offset by increases in the Ohio CEP rider and Energy Efficiency Rider. rider.
Operating Expenses. The variance was driven primarily by:
•a $50 million decrease in operation, maintenance and other expense primarily due to the MGP Settlement in the prior year;
•a $14 million decrease in property and other taxes primarily due to property tax true ups in Ohio and Kentucky and higher deferrals, partially offset by higher franchise taxes; and
•a $10$69 million decrease in fuel expense primarily driven by lower retail prices for natural gas and purchased power, partially offset by an increaseand a decrease in purchased power volumes.
Partially offset by:
•a $19$22 million increase in property and other taxes primarily due to property tax true ups for prior years and higher property tax in current year, partially offset by Network Integration Transmission Service (NITS) deferral and franchise taxes; and
•a $9 million increase in depreciation and amortization primarily driven by an increase in distribution plant in service and depreciation rates resulting from the 2022 Duke Energy Ohio Electric retailKentucky electric rate case implemented in 2023;2023 and
•an $11 million increase CEP deferrals in impairment of assets and other charges primarily due to the reversal in the prior year of the impairment related to the propane caverns in Ohio.
Other Income and Expenses. The increase was primarily due intercompany interest income.2024.
Interest Expense. The increase was primarily due to higher outstanding debt balances and interest rates.
Income Tax Expense (Benefit). The increase in tax expense was primarily due to a decrease in the amortization of excess deferred taxes related to the MGP Settlement recorded in the prior year and an increase in pretax income.
DUKE ENERGY INDIANA
Results of Operations
| | Nine Months Ended September 30, |
| Three Months Ended March 31, | | | Three Months Ended March 31, |
(in millions) | (in millions) | 2023 | | 2022 | | Variance | (in millions) | 2024 | | 2023 | | Variance |
Operating Revenues | Operating Revenues | $ | 2,606 | | | $ | 2,835 | | | $ | (229) | |
Operating Expenses | Operating Expenses | |
Fuel used in electric generation and purchased power | Fuel used in electric generation and purchased power | 980 | | | 1,234 | | | (254) | |
Fuel used in electric generation and purchased power | |
Fuel used in electric generation and purchased power | |
Operation, maintenance and other | Operation, maintenance and other | 524 | | | 551 | | | (27) | |
Depreciation and amortization | Depreciation and amortization | 500 | | | 478 | | | 22 | |
Property and other taxes | Property and other taxes | 42 | | | 60 | | | (18) | |
Impairment of assets and other charges | — | | | 211 | | | (211) | |
| Total operating expenses | |
Total operating expenses | |
Total operating expenses | Total operating expenses | 2,046 | | | 2,534 | | | (488) | |
| Operating Income | |
Operating Income | |
Operating Income | Operating Income | 560 | | | 301 | | | 259 | |
Other Income and Expenses, net | Other Income and Expenses, net | 58 | | | 27 | | | 31 | |
Interest Expense | Interest Expense | 157 | | | 138 | | | 19 | |
Income Before Income Taxes | Income Before Income Taxes | 461 | | | 190 | | | 271 | |
Income Tax Expense | Income Tax Expense | 82 | | | 1 | | | 81 | |
Net Income | Net Income | $ | 379 | | | $ | 189 | | | $ | 190 | |
The following table shows the percent changes in GWh sales and average number of customers. The percentages for retail customer classes represent billed sales only. Total sales includes billed and unbilled retail sales and wholesale sales to incorporated municipalities, public and private utilities and power marketers. Amounts are not weather-normalized.
| | | | | |
Increase (Decrease) over prior year | 20232024 |
Residential sales | (7.3)3.4 | % |
General service sales | (1.3)(0.1) | % |
Industrial sales | 7.1(5.1) | % |
Wholesale power sales | (7.9)15.3 | % |
Total sales | (7.0)1.7 | % |
Average number of customers | 1.11.6 | % |
NineThree Months Ended September 30, 2023,March 31, 2024, as compared to September 30, 2022March 31, 2023
Operating Revenues. The variance was driven primarily by:
•a $111$172 million decrease in retail fuel revenues primarily due to lower fuel cost recovery driven by lower retail sales volumes and fuel prices;
•a $55$32 million decrease in weather-normal retail sales volumes; and
•an $11 million decrease in wholesale revenues, including fuel, revenues, driven by lower fuel and purchased power prices;
•a $51 million decrease in weather-normal retail sales volumes primarily due to lower customer demand;
•a $46 million decrease in retail sales due to unfavorable weather; and
•a $26 million decrease primarily due to the Utility Receipts Tax repeal.expiration of a wholesale customer contract.
Partially offset by:
•a $71 million increase primarily due to the net provision for rate refund related to the Indiana Supreme Court ruling on recovery of certain coal ash costs.
Operating Expenses. The variance was driven primarily by:
•a $254$178 million decrease in fuel used in electric generation and purchased power primarily due to lower deferred fuel amortization as well as lower purchased power expense, natural gas and coal costs, partially offset by higher deferred fuel amortization;
•a $211 million decrease in impairment of assets and other charges primarily due to the Indiana Supreme Court ruling on recovery of certain coal ash costs in the prior year;
•a $27 million decrease in operation, maintenance and other primarily due to lower employee-related expenses and storm contingency costs; and
•an $18 million decrease in property and other taxes primarily due to franchise taxes and property tax true ups for prior periods.costs.
Partially offset by:
•a $22an $11 million increase in depreciation and amortization primarily due to a higher depreciable base.
Other Incomebase and Expenses, net. The variance is primarily due to coal ash insurance proceeds and intercompany interest income.
Interest Expense. The variance is primarily due to higher outstanding debt balances and interest rates.related amortization.
Income Tax Expense. The increasedecrease in tax expense was primarily due to an increasea decrease in pretax income, andpartially offset by a decrease in the amortization of excess deferred income taxes related to the coal ash impairment recorded in the prior year.EDIT.
PIEDMONT
Results of Operations
| | Nine Months Ended September 30, |
| Three Months Ended March 31, | | | Three Months Ended March 31, |
(in millions) | (in millions) | 2023 | | 2022 | | Variance | (in millions) | 2024 | | 2023 | | Variance |
| Operating Revenues | Operating Revenues | $ | 1,119 | | | $ | 1,421 | | | $ | (302) | |
| Operating Revenues | |
| Operating Revenues | |
Operating Expenses | Operating Expenses | |
Cost of natural gas | |
Cost of natural gas | |
Cost of natural gas | Cost of natural gas | 316 | | | 685 | | | (369) | |
Operation, maintenance and other | Operation, maintenance and other | 248 | | | 270 | | | (22) | |
Depreciation and amortization | Depreciation and amortization | 175 | | | 166 | | | 9 | |
Property and other taxes | Property and other taxes | 46 | | | 44 | | | 2 | |
Impairment of assets and other charges | Impairment of assets and other charges | (4) | | | 1 | | | (5) | |
Total operating expenses | Total operating expenses | 781 | | | 1,166 | | | (385) | |
Gains on Sales of Other Assets and Other, net | — | | | 4 | | | (4) | |
| Operating Income | |
Operating Income | |
Operating Income | Operating Income | 338 | | | 259 | | | 79 | |
Other Income and Expenses, net | Other Income and Expenses, net | 49 | | | 41 | | | 8 | |
Interest Expense | Interest Expense | 120 | | | 102 | | | 18 | |
Income Before Income Taxes | Income Before Income Taxes | 267 | | | 198 | | | 69 | |
Income Tax Expense | Income Tax Expense | 46 | | | 18 | | | 28 | |
Net Income | Net Income | $ | 221 | | | $ | 180 | | | $ | 41 | |
The following table shows the percent changes in dekatherms delivered and average number of customers. The percentages for all throughput deliveries represent billed and unbilled sales. Amounts are not weather-normalized.
| | | | | |
Increase (Decrease) over prior year | 20232024 |
Residential deliveries | (16.3)20.9 | % |
Commercial deliveries | (10.4)19.2 | % |
Industrial deliveries | (2.9)3.9 | % |
Power generation deliveries | (7.7)(7.6) | % |
For resale | (18.1)4.1 | % |
Total throughput deliveries | (8.0)1.1 | % |
Secondary market volumes | (27.0)(11.6) | % |
Average number of customers | 1.5 | % |
The margin decoupling mechanism adjusts for variations in residential and commercial use per customer, including those due to weather and conservation. The weather normalization adjustment mechanisms mostly offset the impact of weather on bills rendered, but do not ensure full recovery of approved margin during periods when winter weather is significantly warmer or colder than normal.
NineThree Months Ended September 30, 2023,March 31, 2024, as compared to September 30, 2022March 31, 2023
Operating Revenues. The variance was driven primarily by:
•a $369 $16 million increase due to Tennessee ARM revenue recognition;
•a $9 million increase due to customer growth;
•an $8 million increase due to North Carolina IMR; and
•a $7 million increase due to South Carolina RSA.
Partially offset by:
•a $36 million decrease due to lower natural gas costs passed through to customers, lower volumes,rates, and decreased off-system sales natural gas costs.
Partially offset by:
•coan $18 million increase due to secondary marketing sales;
•a $13 million increase due to North Carolina IMR;
•an $11 million increase due to customer growth; and
•an $11 million increase due to Tennessee ARM revenue true up.sts.
Operating Expenses. The variance was driven primarily by:
•a $369$36 million decrease in the cost of natural gas due to lower natural gas costs passed through to customers, lower volumes,rates, and decreased off-system sales natural gas costs; andcosts.
Partially offset by:
•a $22$6 million decreaseincrease in operations, maintenance and other primarily due to lower spend on internalhigher outside services and contract labor costs.software projects; and
Partially offset by:
•a $9$5 million increase in depreciation and amortization due to additional plant in service.
Other Income and Expenses, net. The increase was primarily due to higher AFUDC equity income.
Interest Expense. The increase was primarily due to higher outstanding debt balances and interest rates.
Income Tax Expense. The increase in tax expense was primarily due to an increase in pretax income and a decrease in the amortization of excess deferred taxes.EDIT.
LIQUIDITY AND CAPITAL RESOURCES
Sources and Uses of Cash
Duke Energy relies primarily upon cash flows from operations, debt and equity issuances and its existing cash and cash equivalents to fund its liquidity and capital requirements. Duke Energy’s capital requirements arise primarily from capital and investment expenditures, repaying long-term debt and paying dividends to shareholders. Additionally, due to its existing tax attributes and projected tax credits to be generated relating to the IRA, Duke Energy does not expect to be a significant federal cash taxpayer until around 2030. Duke Energy’s Annual Report on Form 10-K for the year ended December 31, 2022,2023, included a summary and detailed discussion of projected primary sources and uses of cash for 20232024 to 2025.2026.
As part of the ATM program, in March 2024, Duke Energy executed an equity forward sales agreement. Settlement of the forward sales agreement is expected to occur during or prior to December 2024. See Note 14 to the Condensed Consolidated Financial Statements, “Stockholders’ Equity” for further details.
As of September 30, 2023,March 31, 2024, Duke Energy had $324$459 million of cash on hand and $6.1$5.1 billion available under its $9 billion Master CreditCredit Facility. Duke Energy expects to have sufficient liquidity in the form of cash on hand, cash from operations and available credit capacity to support its funding needs.
As discussed in Note 12 to the Condensed Consolidated Financial Statements, "Variable Interest Entities," Duke Energy terminated and repaid CRC in March 2024 and Duke Energy Florida terminated and repaid DEFR in April 2024. As a result of these repayments, CRC and DEFR have ceased operations and no longer acquire the receivables of Duke Energy’s subsidiaries. Duke Energy Carolinas and Duke Energy Progress continue to evaluate financing opportunities and anticipate termination and repayment of the borrowing facilities of DERF and DEPR prior to their scheduled termination dates in January 2025 and April 2025, respectively.
| | | | | |
MD&A | LIQUIDITY AND CAPITAL RESOURCES |
Refer to Note 6 to the Condensed Consolidated Financial Statements, "Debt and Credit Facilities," for information regarding Duke Energy's debt issuances and maturities, and available credit facilities including the Master Credit Facility. Additionally, see Note 2 to the Condensed Consolidated Financial Statements, "Dispositions," for the timing and use of proceeds from the sale of certain Commercial Renewables assets to affiliates of Brookfield and ArcLight.ArcLight Capital Partners, LLC.
In April 2023, Moody’s Investors Service, Inc. (Moody's) maintained the credit ratings and affirmed the ratings outlook for all of the Duke Energy Registrants, including Duke Energy Ohio. Operations in Kentucky are conducted through Duke Energy Ohio's wholly owned subsidiary, Duke Energy Kentucky. Moody's lowered Duke Energy Kentucky's ratings outlook from stable to negative while maintaining Duke Energy Kentucky's credit rating of Baa1 for senior unsecured debt.
| | | | | |
MD&A | LIQUIDITY AND CAPITAL RESOURCES |
Cash Flow Information
The following table summarizes Duke Energy’s cash flows.
| | Nine Months Ended |
| September 30, |
| | Three Months Ended | | | | Three Months Ended |
| | March 31, | | | | March 31, |
(in millions) | (in millions) | | 2023 | | 2022 | (in millions) | | 2024 | | 2023 |
Cash flows provided by (used in): | Cash flows provided by (used in): | |
Operating activities | |
Operating activities | |
Operating activities | Operating activities | | $ | 7,309 | | | $ | 5,188 | |
Investing activities | Investing activities | | (9,751) | | | (8,630) | |
Financing activities | Financing activities | | 2,413 | | | 3,551 | |
| Net (decrease) increase in cash, cash equivalents and restricted cash | | (29) | | | 109 | |
Net increase in cash, cash equivalents and restricted cash | |
Net increase in cash, cash equivalents and restricted cash | |
Net increase in cash, cash equivalents and restricted cash | |
Cash, cash equivalents and restricted cash at beginning of period | Cash, cash equivalents and restricted cash at beginning of period | | 603 | | | 520 | |
Cash, cash equivalents and restricted cash at end of period | Cash, cash equivalents and restricted cash at end of period | | $ | 574 | | | $ | 629 | |
OPERATING CASH FLOWS
The following table summarizes key components of Duke Energy’s operating cash flows.
| | Nine Months Ended | |
| September 30, | |
| | Three Months Ended | |
| | Three Months Ended | |
| | Three Months Ended | |
| | March 31, | |
| | March 31, | |
| | March 31, | |
(in millions) | |
(in millions) | |
(in millions) | (in millions) | | 2023 | | 2022 | | Variance | |
Net income | Net income | | $ | 1,878 | | | $ | 3,113 | | | $ | (1,235) | | |
Net income | |
Net income | |
Non-cash adjustments to net income | Non-cash adjustments to net income | | 5,887 | | | 4,474 | | | 1,413 | | |
Contributions to qualified pension plans | | (100) | | | (58) | | | (42) | | |
Non-cash adjustments to net income | |
Non-cash adjustments to net income | |
| Payments for asset retirement obligations | |
| Payments for asset retirement obligations | |
| Payments for asset retirement obligations | Payments for asset retirement obligations | | (423) | | | (418) | | | (5) | | |
Working capital | Working capital | | (792) | | | (2,043) | | | 1,251 | | |
Working capital | |
Working capital | |
Other assets and Other liabilities | |
Other assets and Other liabilities | |
Other assets and Other liabilities | Other assets and Other liabilities | | 859 | | | 120 | | | 739 | | |
Net cash provided by operating activities | Net cash provided by operating activities | | $ | 7,309 | | | $ | 5,188 | | | $ | 2,121 | | |
Net cash provided by operating activities | |
Net cash provided by operating activities | |
The variance is primarily driven by:
•a $523 million decrease in net cash outflows from working capital accounts, primarily due to the recovery of deferred fuel costs and the timing of accruals and paymentspayments; and
•a $420 million increase in net income, after adjustment for non-cash items, primarily due to improved weather and favorable rate case impacts along with growth from riders and other working capital accounts.margin, partially offset by higher interest expense.
INVESTING CASH FLOWS
The following table summarizes key components of Duke Energy’s investing cash flows.
| | Nine Months Ended |
| September 30, |
| | Three Months Ended | | | | Three Months Ended |
| | March 31, | | | | March 31, |
(in millions) | (in millions) | | 2023 | | 2022 | | Variance | (in millions) | | 2024 | | 2023 | | Variance |
Capital, investment and acquisition expenditures | Capital, investment and acquisition expenditures | | $ | (9,340) | | | $ | (8,185) | | | $ | (1,155) | |
| Other investing items | Other investing items | | (411) | | | (445) | | | 34 | |
Other investing items | |
Other investing items | |
Net cash used in investing activities | Net cash used in investing activities | | $ | (9,751) | | | $ | (8,630) | | | $ | (1,121) | |
The variance is primarily due to higher overall investments in the EU&I segment.segment in the current year. Additionally, there were net proceeds of $76 million received in the prior year related to the sale of certain assets.
| | | | | |
MD&A | LIQUIDITY AND CAPITAL RESOURCES |
FINANCING CASH FLOWS
The following table summarizes key components of Duke Energy’s financing cash flows.
| | | | | | | | | | | | | | | | | | | | |
| | Nine Months Ended |
| | September 30, |
(in millions) | | 2023 | | 2022 | | Variance |
Issuances of long-term debt, net | | $ | 5,607 | | | $ | 5,663 | | | $ | (56) | |
| | | | | | |
| | | | | | |
Notes payable, commercial paper and other short-term borrowings | | (939) | | | 269 | | | (1,208) | |
Dividends paid | | (2,438) | | | (2,389) | | | (49) | |
Contributions from noncontrolling interests | | 278 | | | 132 | | | 146 | |
| | | | | | |
Other financing items | | (95) | | | (124) | | | 29 | |
Net cash provided by financing activities | | $ | 2,413 | | | $ | 3,551 | | | $ | (1,138) | |
| | | | | |
MD&A | LIQUIDITY AND CAPITAL RESOURCES |
| | | | | | | | | | | | | | | | | | | | |
| | Three Months Ended |
| | March 31, |
(in millions) | | 2024 | | 2023 | | Variance |
Issuances of long-term debt, net | | $ | 2,089 | | | $ | 2,705 | | | $ | (616) | |
| | | | | | |
| | | | | | |
Notes payable, commercial paper and other short-term borrowings | | (191) | | | (265) | | | 74 | |
Dividends paid | | (806) | | | (815) | | | 9 | |
Contributions from noncontrolling interests | | — | | | 206 | | | (206) | |
| | | | | | |
Other financing items | | (63) | | | (84) | | | 21 | |
Net cash provided by financing activities | | $ | 1,029 | | | $ | 1,747 | | | $ | (718) | |
The variance was primarily due to:
•a $1,208$616 million decrease in proceeds from net issuances of long-term debt, primarily due to timing of issuances and redemptions of long-term debt; and
•a $206 million decrease in contributions from noncontrolling interests.
Partially offset by:
•a $74 million increase in net borrowings from notes payable and commercial paper.
Partially offset by:
•a $146 million increase in contributions from noncontrolling interests.
OTHER MATTERS
Environmental Regulations
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 and result in new obligations of the Duke Energy Registrants. Refer to Note 4, "Regulatory Matters," in Duke Energy's Annual Report on Form 10-K for the year ended December 31, 2022,2023, for more information regarding potential plant retirements and Note 4, "Regulatory Matters," to the Condensed Consolidated Financial Statements, for further information regarding regulatory filings related to the Duke Energy Registrants.
On May 18, 2023,In April 2024, the EPA published in the Federal Registerissued a proposedfinal rule under the Resource Conservation and Recovery Act, which would establishsignificantly expands the scope of the CCR Rule by establishing regulatory requirements for inactive surface impoundments at inactiveretired generating facilities (Legacy CCR Surface Impoundments) and establish. The final rule also imposes a subset of the CCR Rule’s requirements, including groundwater monitoring, corrective action (where necessary), and in certain cases, closure, and post-closure care requirements, for allon previously unregulated coal ash sources at regulated facilities (CCR Management Units). CCR management units at facilities otherwise subjectManagement Units may include surface impoundments and landfills that closed prior to the effective date of the 2015 CCR rule.Rule, inactive CCR landfills, and other areas where CCR is managed directly on the land at Duke Energy facilities. Duke Energy is reviewing the proposedfinal rule and analyzing the potential impacts it could have on the Company, which could be material.
In April 2024, the EPA issued a final rule under section 111 of the Clean Air Act (EPA Rule 111) regulating GHG emissions from existing coal-fired and new natural gas-fired power plants, referred to as electric generating units (EGUs). EPA Rule 111 requires existing coal-fired power plants expected to operate in 2039 and beyond to reduce GHG emissions by 90% through the use of carbon capture and sequestration starting in 2032, subject to certain modifications for coal plants that retire sooner and co-fire natural gas. EPA Rule 111 also establishes GHG emissions reduction standards for new natural gas-fired EGUs, subject to carve-outs for smaller peaking units that fill gaps that cannot be met with renewables or storage. The EPA did not finalize emission guidelines for GHG emissions from existing fossil fuel-fired stationary combustion turbines and intends to address these is a future rulemaking. Duke Energy is reviewing the final rule and analyzing the potential impacts it could have on the Company, which could be material.
On May 23, 2023,Cost recovery for future expenditures will be pursued through the EPA published in the Federal Register proposed new source performance standards under Clean Air Act (CAA) section 111(b) that would establish standardsnormal ratemaking process with federal and state utility commissions, which permit recovery of performance for emissions of carbon dioxide for newly constructed, modified,necessary and reconstructed fossil fuel-fired electric utility steam generating units and fossil fuel-fired stationary combustion turbines. On that same day, in a separate rulemaking under CAA section 111(d), the EPA published proposed emission guidelines for states to use in developing plans to limit carbon dioxide emissions from existing fossil fuel-fired electric generating units and certain large existing stationary combustion turbines.prudently incurred costs associated with Duke Energy’s regulated operations. Duke Energy is reviewingevaluating potential legal challenges to the proposed rules and analyzing the potential impacts they could have on the Company, which could be material.final rules.
ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
For an in-depth discussion of the Duke Energy Registrants' market risks, see “Quantitative and Qualitative Disclosures about Market Risk” in Item 7 of Duke Energy's Annual Report on Form 10-K for the year ended December 31, 2022.2023.
ITEM 4. CONTROLS AND PROCEDURES
Disclosure Controls and Procedures
Disclosure controls and procedures are controls and other procedures that are designed to ensure that information required to be disclosed by the Duke Energy Registrants in the reports they file or submit under the Exchange Act is recorded, processed, summarized and reported, within the time periods specified by the SEC rules and forms.
| | | | | |
ITEM 4. | CONTROLS AND PROCEDURES |
Disclosure controls and procedures include, without limitation, controls and procedures designed to provide reasonable assurance that information required to be disclosed by the Duke Energy Registrants in the reports they file or submit under the Exchange Act is accumulated and communicated to management, including the Chief Executive Officer and Chief Financial Officer, as appropriate, to allow timely decisions regarding required disclosure.
Under the supervision and with the participation of management, including the Chief Executive Officer and Chief Financial Officer, the Duke Energy Registrants have evaluated the effectiveness of their disclosure controls and procedures (as such term is defined in Rule 13a-15(e) and 15d-15(e) under the Exchange Act) as of September 30, 2023,March 31, 2024, and, based on this evaluation, the Chief Executive Officer and Chief Financial Officer have concluded that these controls and procedures are effective in providing reasonable assurance of compliance.
Changes in Internal Control over Financial Reporting
Under the supervision and with the participation of management, including the Chief Executive Officer and Chief Financial Officer, the Duke Energy Registrants have evaluated changes in internal control over financial reporting (as such term is defined in Rules 13a-15 and 15d-15 under the Exchange Act) that occurred during the fiscal quarter ended September 30, 2023,March 31, 2024, and have concluded no change has materially affected, or is reasonably likely to materially affect, internal controls over financial reporting.
ITEM 1. LEGAL PROCEEDINGS
The Duke Energy Registrants are, from time to time, parties to various lawsuits and regulatory proceedings in the ordinary course of their business. For information regarding legal proceedings, including regulatory and environmental matters, see Note 4, "Regulatory Matters," and Note 5, "Commitments and Contingencies," to the Condensed Consolidated Financial Statements. For additional information, see Item 3, "Legal Proceedings," in Duke Energy's Annual Report on Form 10-K for the year ended December 31, 2022.2023.
ITEM 1A. RISK FACTORS
In addition to the other information set forth in this report, careful consideration should be given to the factors discussed in Part I, “Item 1A. Risk Factors” in the Duke Energy's Annual Report on Form 10-K for the year ended December 31, 2022,2023, which could materially affect the Duke Energy Registrants’ financial condition or future results. The information presented below updates, and should be read in conjunction with, the risk factors and information disclosed in Duke Energy's Annual Report on Form 10-K for the year ended December 31, 2023.
BUSINESS STRATEGY RISKS
Duke Energy’s future results could be adversely affected if it is unable to implement its business strategy including achieving its carbon emissions reduction goals.
Duke Energy’s results of operations depend, in significant part, on the extent to which it can implement its business strategy successfully. Duke Energy's clean energy transition, which includes achieving net-zero carbon emissions from electricity generation by 2050, modernizing the regulatory construct, transforming the customer experience, and digital transformation, is subject to business, policy, regulatory, technology, economic and competitive uncertainties and contingencies, many of which are beyond its control and may make those goals difficult to achieve.
Federal or state policies could be enacted that restrict the availability of, and increase the costs associated with the use of, fuels or generation technologies, such as natural gas or nuclear power, that enable Duke Energy to reduce its carbon emissions. For example, new EPA rules issued in April 2024 impose stringent GHG emission reduction standards, revised air toxic limits, and wastewater discharge limitations that may impact our carbon-reduction targets, and operational timeline and costs associated with certain new and existing generation. Supportive policies may be needed to facilitate the siting and cost recovery of transmission and distribution upgrades needed to accommodate the build out of large volumes of renewables and energy storage. Further, the approval of our state regulators will be necessary for the Company to continue to retire existing carbon emitting assets or make investments in new generating capacity. The Company may be constrained by the ability to procure resources or labor needed to build new generation at a reasonable price as well as to construct projects on time. In addition, new technologies that are not yet commercially available or are unproven at utility-scale will likely be needed, including carbon capture and sequestration and supporting infrastructure as well as new resources capable of following electric load over long durations such as advanced nuclear, hydrogen and long-duration storage. If these technologies are not developed or are not available at reasonable prices, or if we invest in early stage technologies that are then supplanted by technological breakthroughs, Duke Energy’s ability to achieve a net-zero target by 2050 at a cost-effective price could be at risk.
Achieving our carbon reduction goals will require continued operation of our existing carbon-free technologies including nuclear and renewables. The rapid transition to and expansion of certain low-carbon resources, such as renewables without cost-effective storage, may challenge our ability to meet customer expectations of reliability and affordability in a carbon constrained environment, particularly as demand increases. Our nuclear fleet is central to our ability to meet these objectives and customer expectations. We are continuing to seek to renew the operating licenses of the 11 reactors we operate at six nuclear stations for an additional 20 years, extending their operating lives to and beyond midcentury. Failure to receive approval from the NRC for the relicensing of any of these reactors could affect our ability to achieve a net-zero target by 2050.
As a consequence, Duke Energy may not be able to fully implement or realize the anticipated results of its energy transition strategy, which may have an adverse effect on its financial condition.
REGULATORY, LEGISLATIVE AND LEGAL RISKS
The Duke Energy Registrants are subject to numerous environmental laws and regulations requiring significant capital expenditures that can increase the cost of operations, and which may impact or limit business plans, or cause exposure to environmental liabilities.
The Duke Energy Registrants are subject to numerous environmental laws and regulations affecting many aspects of their present and future operations, including CCRs, air emissions, water quality, wastewater discharges, solid waste and hazardous waste. For example, the new EPA rules issued in April 2024, among other things, impose stringent GHG emissions limitations on existing coal plants and new natural gas plants and more stringent air toxic limits on existing coal plants, increase limitations on wastewater discharge, and impose groundwater monitoring and corrective action requirements on previously unregulated coal ash sources at regulated facilities (CCR Management Units) and inactive surface impoundments at retired generating facilities (Legacy CCR Surface Impoundments). Potential legal challenges to such rules may not be successful, and adherence to these rules may increase the cost of compliance, impact generation resource mix and carbon-reduction targets, and negatively impact customer reliability and affordability due to such rules' imposition of stringent GHG emissions limitations and reliance on carbon capture technologies that are not yet adequately demonstrated at utility-scale. These and other environmental laws and regulations can result in increased capital, operating and other costs. These laws and regulations generally require the Duke Energy Registrants to obtain and comply with a wide variety of environmental licenses, permits, inspections and other approvals. Compliance with environmental laws and regulations can require significant expenditures, including expenditures for cleanup costs and damages arising from contaminated properties. Failure to comply with environmental regulations may result in the imposition of fines, penalties and injunctive measures affecting operating assets, as well as reputational damage. The steps the Duke Energy Registrants could be required to take to ensure their facilities are in compliance could be prohibitively expensive. As a result, the Duke Energy Registrants may be required to shut down or alter the operation of their facilities, which may cause the Duke Energy Registrants to incur losses. Further, the Duke Energy Registrants may not be successful in recovering capital and operating costs incurred to comply with new environmental regulations through existing regulatory rate structures and their contracts with customers. Also, the Duke Energy Registrants may not be able to obtain or maintain from time to time all required environmental regulatory approvals for their operating assets or development projects. Delays in obtaining any required environmental regulatory approvals, failure to obtain and comply with them or changes in environmental laws or regulations to more stringent compliance levels could, and are likely to, result in additional costs of operation for existing facilities or development of new facilities being prevented, delayed or subject to additional costs. The costs to comply with environmental laws and regulations could have a material effect on the Duke Energy Registrants’ results of operations, financial position or cash flows.
The EPA has issued or proposed federal regulations, including the new rules issued in April 2024, governing the management of cooling water intake structures, wastewater, CCR management units, air toxics emissions, and CO2 emissions. New state legislation in response to such regulations could impose carbon reduction goals that are more aggressive than the Company's plans. These regulations may require the Duke Energy Registrants to make additional capital expenditures and increase operating and maintenance costs.
OPERATIONAL RISKS
The reputation and financial condition of the Duke Energy Registrants could be negatively impacted due to their obligations to comply with federal and state regulations, laws, and other legal requirements that govern the operations, assessments, storage, closure, remediation, disposal and monitoring relating to CCR, the high costs and new rate impacts associated with implementing these new CCR-related requirements and the strategies and methods necessary to implement these requirements in compliance with these legal obligations.
As a result of electricity produced for decades at coal-fired power plants, the Duke Energy Registrants manage large amounts of CCR that are primarily stored in dry storage within landfills or combined with water in surface impoundments, all in compliance with applicable regulatory requirements. A CCR-related operational incident could have a material adverse impact on the reputation and results of operations, financial position and cash flows of the Duke Energy Registrants.
During 2015, EPA regulations were enacted related to the management of CCR from power plants. These regulations classify CCR as nonhazardous waste under the RCRA and apply to electric generating sites with new and existing landfills and, new and existing surface impoundments, and establish requirements regarding landfill design, structural integrity design and assessment criteria for surface impoundments, groundwater monitoring, protection and remedial procedures and other operational and reporting procedures for the disposal and management of CCR. In addition to the federal regulations, CCR landfills and surface impoundments will continue to be regulated by existing state laws, regulations and permits, as well as additional legal requirements that may be imposed in the future, such as the settlement reached with the NCDEQ to excavate seven of the nine remaining coal ash basins in North Carolina, and partially excavate the remaining two, and the EPA's January 11, 2022, issuance of a letter interpreting the CCR Rule, including its applicability and closure provisions. Most recently, in April 2024, the EPA issued its final Legacy Surface Impoundment Rule, which significantly expands the scope of the 2015 CCR Rule to apply to legacy CCR surface impoundments (inactive impoundments at retired facilities) and CCR management units (previously unregulated coal ash sources at regulated facilities). These federal and state laws, regulations and other legal requirements may require or result in additional expenditures, including increased operating and maintenance costs, which could affect the results of operations, financial position and cash flows of the Duke Energy Registrants. The Duke Energy Registrants will continue to seek full cost recovery for expenditures through the normal ratemaking process with state and federal utility commissions, who permit recovery in rates of necessary and prudently incurred costs associated with the Duke Energy Registrants’ regulated operations, and through other wholesale contracts with terms that contemplate recovery of such costs, although there is no guarantee of full cost recovery. In addition, the timing for and amount of recovery of such costs could have a material adverse impact on Duke Energy's cash flows.
The Duke Energy Registrants have recognized significant AROs related to these CCR-related requirements. Closure activities began in 2015 at the four sites specified as high priority by the Coal Ash Act and at the W.S. Lee Steam Station site in South Carolina in connection with other legal requirements. Excavation at these sites involves movement of CCR materials to off-site locations for use as structural fill, to appropriately engineered off-site or on-site lined landfills or conversion of the ash for beneficial use. Duke Energy has completed excavation of coal ash at the four high-priority North Carolina sites. At other sites, planning and closure methods have been studied and factored into the estimated retirement and management costs, and closure activities have commenced. As the closure and CCR management work progresses and final closure plans and corrective action measures are developed and approved at each site, the scope and complexity of work and the amount of CCR material could be greater than estimates and could, therefore, materially increase compliance expenditures and rate impacts.
ITEM 2. UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS
None.
ITEM 5. OTHER INFORMATION
On August 25, 2023, Alex Glenn, Senior Vice President and Chief Executive Officer, Duke Energy Florida and Midwest,During the three months ended March 31, 2024, no director or officer of the Company adopted, terminated or modified a Rule 10b5-1 trading arrangement for the sale of up to 1,000 shares of the Company’s common stock between January 31, 2024, and March 28, 2024, or such earlier date if such plan is terminated sooner pursuant to the terms specified therein. Mr. Glenn's Rulenon-Rule 10b5-1 trading arrangement, was entered into during an open insider trading window andas each term is intended to satisfy the affirmative defensedefined in Item 408(a) of Rule 10b5-1 under the Exchange Act and the Company's policies regarding insider transactions.Regulation S-K.
ITEM 6. EXHIBITS
Exhibits filed herein are designated by an asterisk (*). All exhibits not so designated are incorporated by reference to a prior filing, as indicated. Items constituting management contracts or compensatory plans or arrangements are designated by a double asterisk (**). The Company agrees to furnish upon request to the commission a copy of any omitted schedules or exhibits upon request on all items designated by a triple asterisk (***).
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| | | | | Duke | | | | Duke | | Duke | | Duke | | Duke | | |
Exhibit | | Duke | | Energy | | Progress | | Energy | | Energy | | Energy | | Energy | | |
Number | | Energy | | Carolinas | | Energy | | Progress | | Florida | | Ohio | | Indiana | | Piedmont |
4.1 | | ThirtiethOne-hundred and tenth Supplemental Indenture, dated as of September 8, 2023,January 5, 2024, between the registrant and The Bank of New York Mellon Trust Company, N.A., as Trustee (incorporated by reference to theExhibit 4.2 to registrant's Current Report on Form 8-K, filed on January 5, 2024, File No. 1-04928). | | | X | | | | | | | | | | | | |
4.2 | | One-hundred and eleventh Supplemental Indenture, dated as of June 3, 2008,January 5, 2024, between theDuke Energy Corporation registrantand The Bank of New York Mellon Trust Company, N.A., as Trustee, and formsa form of global notes included thereinbonds representing the First and Refunding Mortgage Bonds, 4.85% Series due 2034 (incorporated(incorporated by reference to exhibitExhibit 4.3 to registrant's Current Report on Form 8-K, filed on January 5, 2024, File No. 1-04928). | | | X | | | | | | | | | | | | |
4.3 | | | | | | | | | | | | | | | X | | |
4.4 | | | | | | | | | | | | | X | | | | |
4.5 | | | | | | | | | X | | | | | | | | |
*4.6 | | | X | | | | | | | | | | | | | | |
4.2 | | | | | | | | | | | X | | | | | | |
*31.1.1 | | X | | | | | | | | | | | | | | |
*31.1.2 | | | | X | | | | | | | | | | | | |
*31.1.3 | | | | | | X | | | | | | | | | | |
*31.1.4 | | | | | | | | X | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
*31.1.5 | | | | | | | | | | X | | | | | | |
*31.1.6 | | | | | | | | | | | | X | | | | |
*31.1.7 | | | | | | | | | | | | | | X | | |
*31.1.8 | | | | | | | | | | | | | | | | X |
*31.2.1 | | X | | | | | | | | | | | | | | |
*31.2.2 | | | | X | | | | | | | | | | | | |
*31.2.3 | | | | | | X | | | | | | | | | | |
*31.2.4 | | | | | | | | X | | | | | | | | |
*31.2.5 | | | | | | | | | | X | | | | | | |
*31.2.6 | | | | | | | | | | | | X | | | | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
*31.2.7 | | | | | | | | | | | | | | X | | |
*31.2.8 | | | | | | | | | | | | | | | | X |
*32.1.1 | | X | | | | | | | | | | | | | | |
*32.1.2 | | | | X | | | | | | | | | | | | |
*32.1.3 | | | | | | X | | | | | | | | | | |
*32.1.4 | | | | | | | | X | | | | | | | | |
*32.1.5 | | | | | | | | | | X | | | | | | |
*32.1.6 | | | | | | | | | | | | X | | | | |
*32.1.7 | | | | | | | | | | | | | | X | | |
*32.1.8 | | | | | | | | | | | | | | | | X |
*32.2.1 | | X | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
*32.2.2 | | | | X | | | | | | | | | | | | |
*32.2.3 | | | | | | X | | | | | | | | | | |
*32.2.4 | | | | | | | | X | | | | | | | | |
*32.2.5 | | | | | | | | | | X | | | | | | |
*32.2.6 | | | | | | | | | | | | X | | | | |
*32.2.7 | | | | | | | | | | | | | | X | | |
*32.2.8 | | | | | | | | | | | | | | | | X |
*101.INS | XBRL Instance Document (this does not appear in the Interactive Data File because its XBRL tags are embedded within the Inline XBRL document). | X | | X | | X | | X | | X | | X | | X | | X |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
*101.SCH | XBRL Taxonomy Extension Schema Document. | X | | X | | X | | X | | X | | X | | X | | X |
*101.CAL | XBRL Taxonomy Calculation Linkbase Document. | X | | X | | X | | X | | X | | X | | X | | X |
*101.LAB | XBRL Taxonomy Label Linkbase Document. | X | | X | | X | | X | | X | | X | | X | | X |
*101.PRE | XBRL Taxonomy Presentation Linkbase Document. | X | | X | | X | | X | | X | | X | | X | | X |
*101.DEF | XBRL Taxonomy Definition Linkbase Document. | X | | X | | X | | X | | X | | X | | X | | X |
*104 | Cover Page Interactive Data File (formatted in Inline XBRL and contained in Exhibit 101). | X | | X | | X | | X | | X | | X | | X | | X |
The total amount of securities of the registrant or its subsidiaries authorized under any instrument with respect to long-term debt not filed as an exhibit does not exceed 10% of the total assets of the registrant and its subsidiaries on a consolidated basis. The registrant agrees, upon request of the SEC, to furnish copies of any or all of such instruments to it.
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrants have duly caused this report to be signed on their behalf by the undersigned thereunto duly authorized. | | | | | | | | |
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DUKE ENERGY CORPORATION DUKE ENERGY CAROLINAS, LLC PROGRESS ENERGY, INC. DUKE ENERGY PROGRESS, LLC DUKE ENERGY FLORIDA, LLC DUKE ENERGY OHIO, INC. DUKE ENERGY INDIANA, LLC PIEDMONT NATURAL GAS COMPANY, INC.
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Date: | November 2, 2023May 7, 2024 | /s/ BRIAN D. SAVOY |
| | Brian D. Savoy Executive Vice President and Chief Financial Officer (Principal Financial Officer)
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Date: | November 2, 2023May 7, 2024 | /s/ CYNTHIA S. LEE |
| | Cynthia S. Lee Vice President, Chief Accounting Officer and Controller (Principal Accounting Officer) |