Exhibit 99.1
Duke Energy Carolinas
Summary of Proposed Settlement Agreement with North Carolina Public Staff
Major Components
· $315 million increase in base rates (65% of requested $482 million total):
· $315 million increase in base rates implemented at 1/1/2010
· In addition to the base rate increase, there are 4 temporary riders:
· One year rider starting 1/1/2010 to defer Cliffside CWIP cash recovery in the amount of $89 million (deferred until 1/1/2011)
· There is no earnings impact due to this rider as Duke Energy Carolinas will accrue a similar amount as AFUDC in 2010
· 16 month rider starting 1/1/2010 and ending 4/30/2011 to recover carrying costs associated with coal inventory balance exceeding 40 day supply (current estimate of $12 million in 2010)
· One year rider starting 1/1/2010 to accelerate return of $50 million in fuel over-collections (no earnings impact)
· Rider to return distributions related to nuclear insurance starting 1/1/2010 and ending 12/31/2011 to return $40 million annually to NC retail customers ($80 million cumulative effect and no earnings impact)
· Duke Energy Carolinas agrees to forgo a general rate case filing in 2010. Earliest general rate case filing will be in 2011, using a 2010 test year with rates effective no sooner than 1/1/2012
· Allowed ROE of 10.7%, common equity of 52.5%
· Proposed settlement subject to the review and approval by the North Carolina Utilities Commission
Rate Increase Impacts (reflects net impact of base rate and rider changes):
($ in Millions) | | 2010 | | 2011 | | 2012 | |
Base Rates | | $ | 315 | | $ | 315 | | $ | 315 | |
Deferral of Cliffside CWIP Cash Recovery (no earnings impact) | | (89 | ) | | | | |
Estimated Carrying Charges on Coal Inventory | | 12 | | 2 | | | |
Return of Fuel Over-Collection (no earnings impact) | | (50 | ) | | | | |
Return of Nuclear Insurance Distributions (no earnings impact) | | (40 | ) | (40 | ) | | |
Cumulative Net Increase to Customers ($) | | $ | 148 | | $ | 277 | | $ | 315 | |
Cumulative Net Increase to Customers (%) | | 3.8 | % | 7.0 | % | 8.0 | %* |
*Does not include any potential rate increases from general rate case proceedings that may take effect in 2012.
