Duke Energy CORP 8-K, filed Jun 2, 2020
Duke Energy CORP (DUK)
About this 8-K
Duke Energy CORP filed this 8-K on June 2, 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
CURRENT REPORT
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Item 8.01. Other Events.
On June 2, 2020, Duke Energy Progress, LLC (“DEP”) reached a partial settlement with the Public Staff – North Carolina Utilities Commission (the “Public Staff”) in connection with DEP’s general rate case filed with the North Carolina Utilities Commission (the “NCUC”) on October 30, 2019. In DEP’s initial rate case application, it sought to recover costs related to Hurricanes Florence, Michael, Dorian, and Winter Storm Diego (“Deferred Storm Costs”). Pursuant to the partial settlement, the parties agreed that (1) DEP will remove its request for recovery of its Deferred Storm Costs in the rate case; (2) file a petition for a securitization financing order for its Deferred Storm Costs no later than 120 days from the issuance of an order by the NCUC in the rate case in which the NCUC makes findings and conclusions regarding Deferred Storm Costs and the partial settlement; (3) a recovery rider related to Deferred Storm Costs, initially to be set at $0, will be established in the rate case; and (4) if DEP does not file a petition for a securitization financing order or is unable to recover the Deferred Storm Costs through securitization, DEP may request recovery of Deferred Storm Costs from the NCUC by filing a petition requesting an adjustment to the recovery rider outside a general rate case proceeding. The parties agreed to certain assumptions to demonstrate the quantifiable benefits to customers of a securitization financing. The parties also agreed to certain accounting adjustments related to the rate case.
The partial settlement does not include an agreement on coal ash recovery, return on equity, capitalization structure, depreciation rates, the grid improvement plan, or the return of unprotected Excess Deferred Income Tax (EDIT) balances, among other items. The Stipulation is subject to the review and approval of the NCUC. 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 | Duke Energy Progress Summary of Partial Settlement in North Carolina Rate Case |
| 104 | Cover Page Interactive Data File (the cover page XBRL tags are embedded in the Inline XBRL document). |
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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: June 2, 2020 | By: | /s/ David S. Maltz |
| Name: | David S. Maltz | |
| Title: | Assistant Corporate Secretary | |
| DUKE ENERGY PROGRESS, LLC | ||
| Date: June 2, 2020 | By: | /s/ David S. Maltz |
| Name: | David S. Maltz | |
| Title: | Vice President, Legal, Assistant Secretary and Chief Governance Officer | |
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Exhibit 99.1
Duke Energy Progress
Partial Settlement in North Carolina Rate Case (Docket E-2 Sub 1219)
Background:
| · | On October 30, 2019, Duke Energy Progress (DEP) filed a rate case with the North Carolina Utilities Commission (NCUC) to request an approximate overall 12.3 percent increase in annualized retail revenues, or approximately $464 million: |
| o | The rate case filing requests an overall rate of return of 7.41% 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 $10.8 billion as of December 31, 2018 and adjusted for known and measurable changes through February 2020 |
| o | The filing requests recovery of $656 million of deferred storm costs over 15 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, and Hurricane Dorian in 2019 |
| · | On June 2, 2020, DEP and the Public Staff - North Carolina Utilities Commission (Public Staff) filed an Agreement and Stipulation of Partial Settlement (Stipulation) resolving certain issues in the base rate proceeding |
Major components of the Stipulation:
| · | DEP will remove deferred storm costs from the rate case and file a petition seeking to securitize the costs within 120 days of a Commission order in the rate case regarding the reasonableness and prudency of the storm costs |
| · | The parties agreed to certain assumptions to demonstrate quantifiable benefits to customers of a securitization financing |
| · | Agreement that the Asheville combined cycle plant is complete and in service and amount is to be included in rate base as reflected in DEP's rebuttal testimony |
| · | Agreement on certain accounting matters, including recovery of employee incentives, severance, aviation costs and executive compensation |
Additional Information:
| · | The partial settlement does not include an agreement on ROE, capitalization structure, coal ash recovery, depreciation rates, the grid improvement plan, or the return of unprotected EDIT, among other things. Nothing precludes these and other parties from continuing settlement discussions regarding these remaining or other issues |
| · | The Stipulation is subject to the review and approval of the NCUC |
| · | An evidentiary hearing to review the Stipulation and other issues in the DEP case has been has been scheduled to begin July 27, 2020 |
| · | DEP originally requested new rates go into effect September 1, 2020. With the delay in the hearing, DEP is evaluating whether it would put interim rates into effect, subject to refund, or request approval for deferrals or other accounting mechanisms in lieu of interim rates |