Duke Energy CORP 8-K, filed Jul 15, 2024
Duke Energy CORP (DUK)
About this 8-K
Duke Energy CORP filed this 8-K on July 15, 2024.
Items reported
- Item 7.01: Regulation FD disclosure
- Item 9.01: Financial statements and exhibits
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934
Date of Report (Date of earliest event reported):
| Commission file number | Registrant, State of Incorporation or Organization, Address of Principal Executive Offices and Telephone Number |
IRS Employer Identification No. |
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Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:
SECURITIES REGISTERED PURSUANT TO SECTION 12(b) OF THE ACT:
| Registrant | Title of each class | Trading Symbol(s) | Name
of each exchange on which registered | |||
| Duke Energy | ||||||
| Duke Energy | ||||||
| Duke Energy | each representing a 1/1,000th interest in a share of 5.75% Series A Cumulative Redeemable Perpetual Preferred Stock, par value $0.001 per share | |||||
| Duke Energy | ||||||
| Duke Energy | ||||||
| Duke Energy |
Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter).
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. ¨
Item 7.01. Regulation FD Disclosure.
On July 15, 2024, Duke Energy Florida, LLC (“DEF”) filed a Settlement Agreement (the “Settlement”) with the Florida Public Service Commission (“FPSC”). The parties to the Settlement include DEF, the Office of Public Counsel, and other intervening parties (collectively, the “Parties.”)
Pursuant to the Settlement, the Parties agreed to a base rate stay-out provision that expires year-end 2027; however, DEF is allowed an increase to its base rates in 2025 and 2026, as well as utilization of certain tax benefits in lieu of a revenue increase in 2027. Additionally, revenue increases related to solar investments will be recovered via the Solar Base Rate Adjustment (“SOBRA”) mechanism.
The Parties also agreed to a return on equity (“ROE”) band of 9.3% to 11.3% with a midpoint of 10.3% based on a capital structure of 53% equity and 47% debt.
The Settlement is subject to the review and approval of the FPSC.
An overview providing additional detail on the Settlement is attached to this Form 8-K as Exhibit 99.1. The information in Exhibit 99.1 is being furnished pursuant to this Item 7.01 and shall not be deemed “filed” for purposes of Section 18 of the Securities and Exchange Act of 1934, as amended, or otherwise subject to the liabilities of that section.
Item 9.01. Financial Statements and Exhibits.
(d) Exhibits.
| 99.1 | Duke Energy Florida, LLC Fact Sheet Regarding 2024 Rate Case Settlement. |
| 104 | Cover Page Interactive Data File (the cover page XBRL tags are embedded in the Inline XBRL document). |
SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.
| DUKE ENERGY CORPORATION | ||
| Date: July 15, 2024 | By: | /s/ David S. Maltz |
| David S. Maltz | ||
| Vice President, Legal, Chief Governance Officer and Assistant Corporate Secretary | ||
| DUKE ENERGY FLORIDA, LLC | ||
| Date: July 15, 2024 | By: | /s/ David S. Maltz |
| David S. Maltz | ||
| Vice President, Legal, Assistant Secretary and Chief Governance Officer | ||
| Co-Registrant Amendment Flag | |
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| Co-Registrant Written Communications | |
| Co-Registrant Solicitating Materials | |
| Co-Registrant PreCommencement Tender Offer | |
| Co-Registrant PreCommencement Issuer Tender Offer | |
| Co-Registrant Emerging Growth Company |
Exhibit 99.1
Duke Energy Florida
Summary of 2024 Florida Proposed Settlement Agreement
(Docket #20240025)
Background:
| · | On April 2, 2024, Duke Energy Florida (“DEF”) filed a request for new base rates with the Florida Public Service Commission (“FPSC”). The company proposed a three-year rate plan that would begin in January 2025, once its current base rate settlement agreement concludes at the end of this year. |
| o | DEF requested multi-year 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. | |
| o | The rate case filing requested base rate revenue increases of $593 million in 2025, $98 million in 2026, and $129 million in 2027. This is an average annual increase in revenue requirements of approximately 4% percent over 2025 through 2027. | |
| o | DEF expected these increases to be offset by bill reductions from ending 2022 fuel under-recovery, concluding storm restoration cost recovery and the expiration of legacy purchased power contracts. | |
| o | The filing requested a return on common equity (“ROE”) midpoint at 11.15% on a proposed capital structure containing 53% equity and 47% debt. |
| · | In June, DEF adjusted the 2025 requested revenue increase to $503 million, primarily to reflect an updated sales forecast. |
| · | On July 15, 2024, DEF filed a comprehensive Settlement Agreement with the FPSC. Parties to the Settlement Agreement include DEF, the Office of Public Counsel, and other intervening parties. |
Major components of the proposed Settlement Agreement:
| · | The Settlement will provide for rate stability through a base rate stay out provision that expires year-end 2027; however, DEF is allowed a multi-year increase to its base rate of $203 million and $59 million in 2025 and 2026, respectively. In lieu of a revenue increase in 2027, DEF will utilize investment tax credits estimated at $50 million ($67 million on a pre-tax revenue requirement basis), which are expected to be monetized in 2027. |
| o | Additionally, DEF will recover solar investments via Solar Base Rate Adjustment (“SOBRA”) mechanism upon commercial in-service of 12 projected solar facilities, versus the MYRP as originally requested. |
| · | ROE band of 9.3% to 11.3% with a midpoint of 10.3%, based on a capital structure of 53% equity and 47% debt. | |
| · | Investments over the settlement period (2025-2027), include: |
| o | Grid modernization investments to serve population growth and support reliability | |
| o | 12 new solar plants totaling 900 megawatts | |
| o | Continued investments in innovative renewable energy technologies such as utility-scale battery storage |
| o | Ongoing power plant enhancements and efficiencies |
| · | Depreciation Updates: Acceptance of the depreciation study proposed by DEF with certain agreed upon adjustments. |
Additional information:
| · | The Settlement Agreement is subject to the review and approval of the FPSC. The settlement hearing dates will be determined by the FPSC and may occur within the currently schedule two-week window of August 12th through August 23rd. | |
| · | Subject to FPSC approval, DEF has requested permanent total rate adjustments to be effective January 1, 2025, and January 1, 2026, as well as SOBRA adjustments during the settlement term, which will correspond to in-service timing of each solar facility. | |
| · | The settlement does not result in any material immediate accounting impacts. |
Reconciliation of Original Request to Settlement Agreement:
| · | The Settlement Agreement itemized revenue requirement adjustments for 2025. For 2026, the parties agreed to a subsequent year adjustment of $59 million. For 2027, the parties agreed to allow DEF to offset otherwise needed revenues with expected ITCs. |
| ($ in millions) | 2025 | 2026 | 2027 | |||||||||
| Original filed base revenue increase | $ | 593 | $ | 98 | $ | 129 | ||||||
| Post-filing, pre-Settlement adjustments | (91 | ) | 7 | 0 | ||||||||
| Revised company requested base revenue increase | $ | 503 | $ | 105 | $ | 129 | ||||||
| Reduced ROE (from 11.15 to 10.3%) | (109 | ) | ||||||||||
| Changes to depreciation/ amortization periods | (87 | ) | ||||||||||
| Solar investments to be recovered via SOBRA | (37 | ) | (41 | ) | (39 | ) | ||||||
| DEF to utilize ITCs in lieu of 2027 increase | (67 | ) | ||||||||||
| Other revenue changes | (66 | ) | (4 | ) | (20 | ) | ||||||
| Base annual revenue increase per Settlement Agreement, excluding SOBRA revenues | $ | 203 | 59 | $ | 0 | |||||||
| Estimated SOBRA revenues(1) | 12 | 71 | 58 | |||||||||
| 2027 ITC benefit | 67 | |||||||||||
| Base annual revenue increase per Settlement Agreement, including SOBRA & ITC benefit | $ | 215 | $ | 130 | $ | 125 | ||||||
Totals may not tie due to rounding
(1) Estimated SOBRA revenues reflect updated project timing compared to original filing