Exhibit 99.1
Duke Energy Carolinas
Summary of Settlement Agreement with North Carolina Public Staff
Docket E-7, Sub 989
Background
· On July 1, 2011, Duke Energy Carolinas filed a rate case with the North Carolina Utilities Commission (NCUC) to request an average 15 percent increase in retail revenues, or approximately $646 million
· Based upon 11.5% return on equity (ROE) and a 53% equity component of the capital structure
· On November 1, 2011, North Carolina Public Staff, who represents consumers, recommended a rate increase of approximately $211 million
· Based upon 9.25% ROE and a 50% equity component of the capital structure
· On November 17, 2011, Duke Energy Carolinas revised its requested rate increase to approximately $525 million
· Based upon 11.25% ROE and a 53% equity component of the capital structure
· On November 22, 2011, Duke Energy Carolinas reached agreement with the North Carolina Public Staff (see details below)
Major Components of Settlement
· $369 million increase in base rates, before cash mitigation (57% of original request)
· Based upon ROE of 10.5% and a 53% equity component of the capital structure
· Cash recovery for CWIP will be deferred until the next rate case
· This deferral will have no earnings impact as Duke Energy Carolinas will continue to accrue AFUDC on CWIP not in base rates
· Duke Energy Carolinas expects to file a general rate case in 2012 for rates in effect in early 2013
· Average rate increase of 7.2% for each customer class
· Duke Energy Carolinas will donate $11 million to help needy customers in North Carolina pay their energy bills
· Settlement subject to the review and approval by the NCUC
· Hearing is scheduled to commence November 28, 2011
Rate Increase Impacts:
($ in Millions) | | 2012 | |
Increase in Base Rates, Before Cash Mitigation | | $ | 369 | |
Deferral of CWIP Cash Recovery (no earnings impact) | | (51 | ) |
Return of Regulatory Liability (no earnings impact) | | (8 | ) |
Net Increase to Customers ($) | | $ | 310 | |
Net Increase to Customers (%) | | 7.2 | % |
Note – increase in base rates expected to be effective February 2012
