Duke Energy CORP 8-K, filed Jul 1, 2020
Duke Energy CORP (DUK)
8-K
2020-07-01
For: 2020-06-29
View Original
Added on
April 09, 2026
About this 8-K
Duke Energy CORP filed this 8-K on July 1, 2020, reporting on events of June 29, 2020.
Items reported
- Item 8.01: Other events
- Item 9.01: Financial statements and exhibits
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934
Date of Report (Date of earliest event reported): June 29, 2020
Commission file number | Registrant, State of Incorporation or Organization, Address of Principal Executive Offices and Telephone Number | IRS Employer Identification Number | |
 | |||
(a Delaware corporation)
(an Indiana limited liability company)
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:
Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425) | |
Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12) | |
Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b)) | |
Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c)) | |
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 | ||||||
due January 15, 2073 | ||||||
Duke Energy | ||||||
due September 15, 2078 | ||||||
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 | ||||||
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. o
Item 8.01. Other Events.
On July 2, 2019, Duke Energy Indiana, LLC (“DEI”) filed a general rate case with the Indiana Utility Regulatory Commission (the “IURC”), which was adjusted on September 9, 2019, and December 4, 2019, for an ultimate request of an overall approximate 15.6% increase in retail revenues, or approximately $396 million, with an overall rate of return of approximately 6.0% based on approval of a 10.4% return on equity and a 53.0% equity component of the capital structure. The request was premised upon a DEI forecasted rate base of $10.2 billion as of December 31, 2020.
On June 29, 2020, the IURC issued an order (the “Order”) approving, among other things, a revenue increase of approximately $146 million for the total increase, before utility receipt taxes, predicated in part on a 9.70% return on equity and a 53.0% equity component of the capital structure. Step 1 rates are estimated to be approximately 75% of the total and become effective late July 2020, and Step 2 rates are estimated to be the remaining 25% of the total rate increase to be effective in the first quarter of 2021, trued up with carrying costs to January 2021. DEI will make a compliance filing with the IURC in July 2020 for their review and approval before Step 1 rates are implemented.
An overview providing additional detail on the filing is attached to this Form 8-K as Exhibit 99.1.
Item 9.01. Financial Statements and Exhibits.
(d) Exhibits.
99.1 |
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 1, 2020 | By: /s/ David S. Maltz |
David S. Maltz | |
Assistant Secretary | |
DUKE ENERGY INDIANA, LLC | |
Date: July 1, 2020 | By: /s/ David S. Maltz |
David S. Maltz | |
Assistant Secretary | |
EXHIBIT 99.1
Duke Energy Indiana
Summary of Order Issued by the Indiana Utility Regulatory Commission
(IURC Cause No. 45253)
Background
• | On July 2, 2019, Duke Energy Indiana (DEI) filed a general rate case with the Indiana Utility Regulatory Commission (IURC). On September 9, and December 4, 2019, DEI adjusted the request to $396 million for an overall approximate 15.6% increase in retail revenues: |
◦ | The rate case filing requests an overall rate of return of 6.0% based on approval of a 10.4% return on equity (ROE) and a 53.0% equity component of the capital structure |
◦ | The request is based on a DEI forecasted rate base of $10.2 billion as of December 31, 2020 |
◦ | If approved, annualized rates would increase $345 million in 2020 Step 1) and another $50 million in 2021 (Step 2) |
• | On June 29, 2020, the IURC issued an order approving a revenue increase of approximately $146 million for the total increase, before utility receipt taxes. Step 1 rates are estimated to be approximately 75% of the total and become effective late July 2020, and Step 2 rates are estimated to be the remaining 25% of the total rate increase to be effective Q1 2021, trued up with carrying costs to January 2021 |
• | DEI will make a compliance filing with the IURC in July 2020 for their review and approval before Step 1 rates are implemented |
Major Components of the Order
ROE, Capital Structure and Rate Base
• | Implements an overall cost of capital of 5.71% based on a 9.7% return on equity and a 53.0%1 equity component of the capital structure |
• | Approved DEI rate base of $9.9 billion as of December 31, 2019, and $10.2 billion as of December 31, 2020 |
Edwardsport
• | The Edwardsport IGCC station will be moved to base rates and the rider currently recovering the costs will be terminated |
Depreciation
• | Approves the useful lives of the depreciation study, including accelerated retirement dates for certain coal-fired generating units. Also approves the use of a regulatory asset for end-of-life inventory at retired generating plants in lieu of inclusion as a cost of decommission and dismantlement |
• | Changes the methodology to average life group (ALG) from the equal life group (ELG) |
Coal Ash Related Compliance Costs
• | Approves recovery of and on $212 million in coal ash costs incurred through 2018 over an 18-year period |
• | Deferral and cost recovery of expenditures post-2018 are being considered in a pending sub docket proceeding |
_______________________________
1 Indiana’s capital structure includes Accumulated Deferred Income Taxes (ADIT). When ADIT is excluded, resulting cap structure approximates 53% equity.
Additional Information
• | Includes recovery of and on the remaining 20% of costs under Duke Energy Indiana’s T&D Infrastructure Modernization Plan (TDSIC) plan; 80% is recovered through the TDSIC rider |
• | Approves recovery of various renewables investments through inclusion in rate base |
• | Establishes reserve accounting for major storms expenditures and vegetation management |
• | Approves request to defer O&M, depreciation and carrying costs on the Customer Connect customer service platform during appropriate phases of the project |
• | DEI’s request for a five-year de-coupling program for residential and commercial customers and optional dynamic pricing rates was not approved |
Reconciliation of Request to Order
• | The Indiana Utility Regulatory Commission reduced DEI’s request by slightly more than $200 million, when accounting for the utility receipts tax |
◦ | Approximately 50% is due to the change in depreciation methodology and use of regulatory asset for the end-of-life inventory at retired generating plants |
◦ | Approximately 20% is due to the approved 9.7% ROE versus requested 10.4% |
◦ | Approximately 20% is related to miscellaneous earnings neutral adjustments |
• | DEI’s compliance filing to the IURC for their review and approval before Step 1 rates are implemented will include the final reconciliation and Step 1 and 2 increase amounts |