Exhibit 99.1
Duke Energy Carolinas
Summary of 2019 Rate Case Filing in North Carolina
(Docket E-7 Sub 1214)
| · | On September 30, 2019, Duke Energy Carolinas (DEC) filed a rate case with the North Carolina Utilities Commission (NCUC) to request an approximate overall 6.0 percent increase in annualized retail revenues, or approximately $291 million: |
| o | The rate case filing requests an overall rate of return of 7.58% based on approval of a 10.3% return on equity and a 53% equity component of the capital structure |
| o | The filing is based on a North Carolina retail rate base of $15.5 billion as of June 30, 2019 and adjusted for known and measurable changes through January 2020 |
| o | Hearings are expected to commence early next year |
| · | This annualized rate increase request is driven by: |
| Drivers | Revenue
Requirement | % of Total
Request |
| Significant plant additions and changes | $317 million | 109% |
| Coal ash pond closure costs | $97 million | 33% |
| Depreciation, including accelerated coal plant depreciation | $66 million | 23% |
| Deferred storm costs | $36 million | 12% |
| Proposed rider for return of federal and state EDIT | ($155) million | (53%) |
| All other changes | ($70) million | (24%) |
| · | Major capital investments1 including pro-forma adjustments to reflect known and measurable changes include: |
| o | Grid investments ($2.3 billion), including Advanced Metering Infrastructure ($128 million) |
| o | Investment in steam plants to meet environmental obligations2 ($689 million) |
| o | Dual fuel plant upgrades ($278 million) |
| · | Coal ash pond closure costs |
| o | Requests recovery of $480 million of deferred coal ash costs over 5 years. Includes amounts deferred from January 1, 2018 – January 31, 2020 |
| o | Requests continued deferral of ongoing coal ash closure costs |
1Represents Duke Energy Carolinas total investment, which is allocated ~67% to NC.
2Investments largely driven by dry bottom ash conversions, wastewater treatment enhancements and lined retention basin projects
| o | Requests recovery of $193 million of deferred storm costs over 8 years, including costs incurred to rebuild the electric system and restore power after major storms in 2018, including Hurricanes Florence and Michael and Winter Storm Diego |
| o | If Senate Bill 559 (currently under consideration by the N.C. General Assembly) becomes law, Duke Energy will seek to securitize these costs |
| · | Accelerated coal plant retirements |
| o | DEC is proposing to shorten the remaining depreciable lives of several coal-fired power plants. The depreciation study filed in the rate case shows the following updated retirement dates |
| § | Allen Units 4 & 5 in 2024 (up from 2026) |
| § | Cliffside Unit 5 in 2026 (up from 2032) |
| · | Grid Improvement Plan deferral request |
| o | Requests deferral treatment for certain costs related to investments in the transmission and distribution grid under the company’s Grid Improvement Plan |
| · | Request includes reductions of $155 million through a rider as a result of federal and state tax reform. This includes: |
| o | $123 million to return federal excess deferred income taxes (EDIT) resulting from the Tax Cuts and Jobs Act of 2017. The proposed amortization periods for federal EDIT are as follows: |
| § | Protected EDIT over ARAM (~39 years) |
| § | Unprotected, PP&E related over 20 years |
| § | Unprotected, non-PP&E related over 5 years |
| o | $25 million to return deferred revenues from January through July 2018 related to the change in the federal statutory tax rate from 35% to 21%, over 5 years. Customer rates were updated to reflect the lower tax rate as of August 1, 2018. |
| o | $7 million to return N.C. state EDIT related to the reduction of the N.C. state income tax rate from 3% to 2.5%, over 5 years. |
| · | The Company has requested the NCUC approve the requested rates to be effective no later than August 1, 2020 |
