Hello, everyone, and welcome. My name is Brica, and I will be your conference operator today. I would like to welcome everyone to the Duke Energy Third Quarter 2022 Earnings Conference Call. Thank you. Jack Sullivan, Vice President of Investor Relations, you may begin your conference.

Thank you, Brica and good morning everyone. Welcome to Duke Energy’s third quarter 2022 earnings review and business update. Leading our call today is Lynn Good, Chair, President and CEO, along with Brian Savoy, Executive Vice President and CFO. Today’s discussion will include the use of non-GAAP financial measures and forward-looking information within the meaning of securities laws. Actual results may be different than forward-looking statements and those factors are outlined herein and disclosed in Duke Energy’s SEC filings. The appendix of today’s presentation includes supplemental information and disclosures and along with a reconciliation of non-GAAP financial measures. So with that, let’s turn the call over to Lynn.

Jack, thank you and good morning everyone. Before I begin, I’d like to take a moment and recognize the work of our team in responding to Hurricane Ian, one of the most powerful and destructive storms in U.S. history. Duke Energy mobilized 20,000 people working day and night to restore power to over 2 million customers across Florida and the Carolinas. And what’s more impressive is the speed with which we did it, with 99% of our customers restored within 72 hours. This is an amazing accomplishment and a testament to our strong corporation, the tireless effort of our restoration teams, and the value of our grid-hardening investments. Moving to our financial results today, we announced adjusted earnings per share of $1.78 for the third quarter. We continue to see strong volumes from the electric utilities offset by lower contributions from commercial renewables due to fewer projects placed in service compared to 2021. Turning to the commercial renewables business, we have completed the strategic review and our Board has authorized the sale of this business. I will provide more context about this decision in a moment, but first, I’d like to address what this means for our 2022 earnings guidance. Beginning in the fourth quarter, we will move commercial renewables to discontinued operations and remove it from guidance going forward. Bringing focus to our core regulated businesses, we are updating full year 2022 adjusted earnings guidance to a range of $5.20 to $5.30. The $5.25 midpoint of this updated range represents our original guidance midpoint of $5.45, less the $0.20 contribution we originally forecasted for commercial renewables. The regulated utilities remain on track for 2022 with strong operating results offsetting rising financing costs giving us confidence in achieving earnings within this tighter range. Turning to Slide 5, in August, we announced a strategic review of the commercial renewables business, which includes our utility scale renewables platform in a smaller distributed generation business. As part of this review, we have worked with advisers to evaluate the strategic fit of these businesses and to test the market on valuation. We have received indications of interest for the utility scale business at attractive valuations, and this process will continue through year-end. We expect to announce a definitive transaction in Q1 2023 and close as early as mid-year. We are preparing the sale process for the distributed generation business, which includes REC Solar and expect this transaction will follow a similar timeline to closing. The majority of proceeds from both transactions will be used to reduce holding company debt. This will strengthen the balance sheet and allow us to fund our clean energy transition with our common equity issuances through at least 2027. I am very proud of our commercial team who has remained focused on maximizing the value of the portfolio, continuing to expand our robust development pipeline and operating a renewables fleet with excellence. With this pending change in our business mix, I’d like to walk you through our earnings trajectory over the next 2 years. For 2023, we are introducing a guidance range of $5.55 to $5.75, with a midpoint of $5.65. This reflects 5% to 7% growth of the updated 2022 EPS midpoint of 5.25%. It also includes a partial year benefit from lower interest expense after reducing holding company debt with sales proceeds. Turning to 2024 and beyond, we expect to grow 5% to 7% off the $5.65 midpoint of our 2023 guidance range through 2027. The 2023 guidance range reflects what we know today, including the present interest rate environment, inflation, supply chain constraints, and an economic forecast that continues to support positive GDP growth in 2023. But the economic outlook remains uncertain and we will continue to closely monitor trends. Consistent with past practices, we will do all we can to control costs to match challenges in our business while maintaining excellent service to our customers. As a result, we have increased our 2023 cost mitigation target from $200 million to $300 million. We expect about 75% of these savings to be sustainable over the long term. We will keep you apprised along the way and look forward to sharing our traditional guidance package on the year-end earnings call in February. Brian will provide more on our 2023 earnings drivers, but I want to underscore the strength of our underlying core utility business. We operate premier regulated franchises in growing service territories with constructive regulatory jurisdictions and robust customer-focused investment opportunities. They have always been the lifeblood of our company. This portfolio transition will fully highlight the strong, predictable, transparent earnings and cash flows from our premier regulated utilities and strengthen our overall investor value proposition. Next, I’d like to take a few minutes to highlight some of the important strategic work underway throughout our jurisdictions. Moving to Slide 6, in October, we filed our first performance-based regulation application under HB 951. We filed with the North Carolina Utilities Commission requesting a review of the significant investments we are making for our 1.5 million Duke Energy Progress customers served in North Carolina. The rate increase would cover upgrades we have made to improve grid reliability and resiliency and to facilitate a clean secure energy future. Our application contains a traditional base rate case based on historical investments and measurable changes projected through April of 2023. Our request is mitigated by a reduction in annual operating costs of over $100 million since our last rate case. In addition to historic investments, our application includes gradual customer rate step-ups over the next 3 years to recover future investments we will make through the multiyear rate plan. This consists of roughly $3.8 billion of capital projects that are projected to go into service by 2025. Approximately 75% of which is related to transmission and distribution investments. Evidentiary hearings are expected to begin in the May 2023 timeframe. Consistent with past practice, we intend to implement temporary rates in June for the historic base case subject to refund. If approved, we expect year one revised rates to be effective by October 1, 2023. Turning to Slide 7, our focus on providing customers with affordable, reliable, and cleaner energy continues to advance across each of our jurisdictions. In North Carolina, carbon plan hearings concluded in late September after almost 3 weeks and we submitted our proposed order at the end of October. During the hearing, we presented strong testimony that confirms the need for our near-term development activities. The MCU team will make a final decision on the carbon plan by the end of this year. We expect to file a Duke Energy Carolinas rate case with the NCUC in early 2023. In South Carolina, we filed a rate case for Duke Energy Progress in September, as we continue to work on increasing system reliability and resiliency and enhancing the customer experience. To ease the impact of these investments on customers, proposed rates would go into effect over 2 years beginning in the first half of 2023. In Florida, the Public Service Commission approved our storm protection plan update in October. Over the next 10 years, we expect to deploy $7 billion in capital investments through this rider. Shifting to the Midwest and Indiana, we are updating our integrated resource plan. We have held the first of three public information sessions with stakeholders to share information about plans under consideration and we anticipate filing CPCNs for new generation resource needs with the Commission beginning in early 2023. And in Ohio, we completed a hearing in October for our electric distribution rate case. We expect to receive a final order by the end of 2022 or early 2023. Moving to Slide 8, I’d like to update you on our ongoing review of the clean energy provisions under the IRA legislation. High energy costs are top of mind for our customers and the IRA’s clean energy tax credits present an opportunity to help address those issues. We expect to qualify for a variety of PTCs and ITCs that will generate billions of dollars in tax credits over the next decade. These tax credits will be returned to our customers, lowering our overall cost of service and providing for a more affordable energy transition. We will continue to evaluate the impact of the corporate minimum tax as new information and guidance from treasury becomes available. Because of the credits generated by our substantial clean energy infrastructure investments, we do not expect this to have a material impact on our cash flows. In closing, we are advancing our strategy across our jurisdictions, balancing the progress of our clean energy transition while preserving affordability and reliability for our customers and communities. I am confident in our long-term earnings growth and ability to execute our strategy moving forward. As I look ahead, we are well positioned to deliver exceptional value to our customers, stakeholders, and investors. And with that, let me turn the call over to Brian.

Thanks, Lynn and good morning everyone. I will start with a brief discussion on our quarterly results, highlighting a few of the key variances to the prior year. As shown on Slide 9, we had reported earnings per share of $1.81 compared to $1.79 last year. As Lynn shared, we are moving forward with the sale of our commercial renewables business and we will move those results to discontinued operations in the fourth quarter. For presentation purposes, going forward, our focus will be on the strong earnings profile of our core regulated operations, which delivered $1.78 in adjusted EPS in the third quarter. And on a year-to-date basis, our core operations generated earnings of $4.15 compared to $4.10 for 2021. Please see our non-GAAP reconciliation included in the earnings release for more details. Within our core business segments, Electric Utilities & Infrastructure was up $0.06 compared to the prior year, driven by higher retail volumes and lower O&M. Partially offsetting these items were higher depreciation costs on our growing investment base. We continue to be encouraged by the sustained retail load growth in the post-COVID environment and I will provide more on the volume trends in a moment. Shifting to Gas Utilities & Infrastructure, results were $0.01 higher than last year due to increases in riders in the North Carolina Piedmont rate case. And in the other segment, we were $0.07 lower primarily due to higher financing costs, timing of tax expense, and lower returns on investments. Turning to Slide 10, I will touch on electric volumes and economic trends. On a 12-month rolling average basis, total retail volumes are up 1.7%, in line with our 2022 load growth forecast of 1.5% to 2%. In the third quarter, higher year-over-year volumes were driven by residential customer growth of 1.7%. We continue to see strong and steady migration to our service territories and continuing expansion in the commercial class, including higher data center usage. This was partially offset by lower industrial volumes, isolated to a few automotive customers experiencing supply chain constraints. We are closely monitoring how these factors and other potential economic dynamics are impacting our customers’ usage, but we continue to expect 2022 volume growth to land within our 1.5% to 2% range. Our economic development achievements to attract jobs and capital investment to our service territories were recently recognized by Site Selection magazine, which named Duke Energy a top utility for economic development for the 17th consecutive year. We have continued to accelerate this work into 2022. We partnered with our states to win record-setting projects in North Carolina with semiconductor manufacturer Wolfspeed, in South Carolina with BMW’s entry into the EV market, and in Indiana with the Stellantis Samsung EV battery plant. These projects and others announced throughout 2022 involve capital investments exceeding $20 billion and will bring more than 24,000 jobs to our growing service territories. We will begin to see top line growth from these business expansions as we progress through the 5-year plan. We will breakdown the outlook for the fourth quarter on Slide 11. We are well positioned to achieve our updated $5.25 adjusted EPS midpoint for 2022. Year-to-date, our core regulated business has generated earnings, adjusted earnings of $4.15. We expect a solid finish to the year with continued strong performance in our regulated utilities. We have good line in sight to the remaining $1.10 in the fourth quarter. Let me take a moment to highlight some of the key drivers. Beginning with the Electric segment, we expect year-over-year revenue favorability from higher volumes, which were impacted by the Omicron variant in 2021, a return to normal weather and the Florida multiyear rate plan and other riders. Turning to gas, we will benefit from rate cases and our integrity management riders. We will see lower O&M across our electric and gas operations. The timing of plant outages and shaping of O&M led to higher O&M in the first half of 2022 as compared to 2021. We saw this trend begin to reverse in Q3 and expect it to accelerate in Q4. Finally, we expect the other segment to be unfavorable to the prior year, primarily due to higher interest expense. Moving to Slide 12, I will highlight the key growth drivers for 2023 that support our $5.55 to $5.75 EPS range for the year. 2023 reflects the acceleration of investments in our clean energy transition across our service territories and the implementation of key provisions from House Bill 951. Beginning with the Electric segment, we will enter 2023 with load that is 2% higher than pre-pandemic levels. Going forward, we expect load growth to be back in line with our pre-pandemic consumption of flat to 0.5% growth per year. This will be offset by weather, which has been favorable year-to-date in 2022. Shifting to rate cases and riders, we have an active regulatory calendar across our jurisdictions. This includes three rate cases in the Carolinas and two rate cases in Ohio. In Florida, we will move to the second year of our multiyear rate plan with an updated 10.1% ROE. Finally, we see growth through continued investment in our electric and gas riders. Macroeconomic conditions remain dynamic. As Lynn mentioned earlier, we’re exercising our business agility by increasing our 2023 cost mitigation target from $200 million to $300 million. We have a strong track record of pulling both structural and tactical livers to flex our costs to meet business challenges head on and are confident we can achieve these savings. Lastly, we will enjoy a partial year benefit of interest expense savings from reduced holding company debt with proceeds from the commercial renewables sale. Before we open it up for questions, let me close with Slide 13. With the pending sale of our commercial business, we will transition to a fully regulated business with robust investment opportunities, roughly $145 billion over the next decade. This also positions the company with a de-risked earnings profile, giving us confidence in achieving our 2023 adjusted EPS guidance range of $5.55 to $5.75, with a growth rate of 5% to 7%. With that, we will open the line for your questions.

Thank you. We have the first question on the phone lines from Shar Pourreza from Guggenheim Partners. Your line is now open.

Hey, good morning, guys.

Hi, Shar.

Good morning.

Good morning. So when you guys put out a ‘23 guidance figure without a commercial deal actually being announced. I know obviously, you see robust interest but the ultimate transaction multiple here matters a lot. And can you maybe touch a little bit on your sort of level of confidence ahead of selecting a better – do you have some firm offers that are giving you this kind of visibility into ‘23 and to have this type of an EPS range? Or are recent deals in New York a good proxy? Have you narrowed down the bidders? I guess, just some more visibility on this pending deal that’s kind of embedded in your ‘23 guide would be really helpful and if there is any conservative bend here? Thanks.

Thanks, Shar. Sure. I would start by saying we have a lot of experience in dealing with portfolio transactions if you think about the history of Duke. As we began the strategic review process, a lot of work has been done, not only to challenge our strategic assumptions, but also to do work in the market, hiring advisers, and understanding the range of potential valuations, including soliciting feedback from the market and credible counterparties. So we do have indications of interest, robust indications of interest from credible counterparties and have a high degree of confidence that we will transact on this business. All of that went into our decision to announce the sale. So that’s kind of consistent with the way we would approach anything of this magnitude and this type of decision to do our homework before we announce. When we look at the guidance range for 2023, we not only have commercial renewables contemplated, but we have a high degree of confidence that we will execute, and we also have strong regulated growth. Additionally, we have strong cost mitigation already in place and ready to go in light of some of the headwinds that we’re all experiencing in the economy. I feel like we’ve put together a very credible guidance range for a company that represents one of the strongest regulated utilities in the industry, so we feel like 2023 is off to a strong start.

Got it. And then just tax leakage, I guess you guys have enough in plan to offset any kind of leakage there from the sale?

We believe we can manage within this range, Shar. We wouldn’t have put it out there if we didn’t think we could do that, so high degree of confidence in executing and a high degree of confidence in the range.

Okay. Perfect. And then lastly, when turning to the carbon plan. Obviously, the commission has been very clear at hearings and filings that intends to meet that December 31 deadline to have a fine to order and an initial plan in place. I mean, obviously, you guys highlighted last week, you filed the proposed order in the docket supporting a real wide range of different technologies. But everyone seems to be kind of in different directions. It doesn’t appear we have a lot of consensus, more over a dozen parties that are involved. So it’s a little bit more contentious than we would have thought. I guess how does the commission bridge these gaps, it seems to be a little bit of a tight timeframe by year-end? Thanks.

Sure. Shar, what I would say to you is the feedback in this process seems reasonable and somewhat predictable to us. The solar industry is interested in more solar. The industrials are interested in low prices. Low income communities are interested in the impact to low-income. The attorney general and the environmental community want us to go as fast as we can to reduce carbon. So as we look at how the hearing rolled out, the testimony that we presented and the case we put forward, we felt like all of those positions were well understood, we’re well-discussed in the hearing and didn’t find them surprising in any way, frankly. But that’s what creates kind of the fertile ground for the commission to make decisions. The good news is, in the near term, it’s all about solar and battery. And we have time on the long-term to make decisions about some of the more difficult pump storage, small modular reactors, and offshore wind. We think there is a strength to our recommendation to use the next couple of years to look at development on those key technologies so that we’re prepared by the mid-decade to make the decisions about where to go. So I would say a very good process, a very transparent process, not surprising in any way on where the parties put forward their positions. I think the commission has a lot of good information on which to make their decisions, and we expect them to do so by the end of the year.

Got it. Terrific, guys. Thanks so much and we will see about a week. Appreciate it.

Yes. Thanks, Shar.

Hey, good morning, Lynn and team. Thanks, guys very much.

Hi, Julien.

Good morning. Just following up on Shar’s question, maybe a couple of details tied to it. Again, I see the discount off. So can you talk a little bit about the partial year assumption of lower interest expense? Just what’s the timing assumed there? I know people are looking very carefully at these ‘23 numbers. So just if you can elaborate there. And then related, actually, I’ll just ask you, the follow-up would be, can you elaborate a little bit on effectively the $0.30 of cost reductions of the $300 million how does that square with the earlier sensitivity you provided against interest rates at this point, effectively, where are you on ‘23 and beyond assumptions on sort of effectively fully offsetting that impact?

Sure. And Julien, I think for planning purposes, we are thinking about the commercial renewables transaction being mid-year. We will know more as we get into the final round, bidding, etc., and hope to be able to give you more feedback in the February call. I think mid-year is the partial year we’d be realistically planning for. On the cost reduction, I think you’ll recall that back in the second quarter, we had undertaken something that we call the work reduction initiative, really focused on ways we can simplify work, use digital technologies in order to streamline our governance processes, our reporting processes, etc. We were targeting $200 million. We were also looking at supply chain and other things that we could do to potentially more tactically move O&M out of ‘23. We were able to increase that $200 million target to $300 million. We have sized that, Julien, to give us confidence around the macroeconomic trends. So when I look at interest rates, for example, we are in a position with the work that we’ve done to be able to hit this guidance range despite the headwind of interest rates. As we look ahead beyond 2023, we have modest amounts of maturities in ‘24. We also see the benefit of the IRA showing up more materially in 2024. I think we’ve talked about the nuclear PTCs being consequential for us. We see IRA is not only benefiting customers but being credit positive, cash flow positive to the utility. So we feel like we’ve got good plans in place here and are really pleased that we got after cost reduction. As you know, we always do early enough in 2022 that we have a high degree of confidence for 2023 and beyond. We think that the $300 million, 75% of it is sustainable.

Got it. And if I may, just to continue with that thought, the unsustainable piece, that remaining 25%. Is that order of magnitude pretty comparable to the interest savings that you get from the tailwind in the 24 from the first half of the year would be commercial renewables having a run rate impact on the sale?

Julien, I haven’t thought about it that specifically because the way I approach every year is looking for a way to save money. So we may come up with some new ideas in 2023 for 2024. The continuous improvement mindset at Duke runs pretty deep, and we’re always trying to find ways to reduce costs.

Got it. And so the cash flow uplift on the nuclear side to your credit metrics, just to elaborate on that, if you can. I know things are still in flux a bit, but if you can quantify that?

Julien, it’s several hundred million dollars, we believe. We believe our regulated fleet qualifies and we operate very low cost, very low cost nuclear units. We will be working with our regulators on the appropriate way to recognize those benefits. Those scenarios could have a range of passing it back over 2 years, 3 years, 5 years, and in the meantime, we have the opportunity to strengthen the balance sheet or the cash flows, if you will, from those credits.

Thank you again. Good luck. I will see you soon.

Thank you.

Hi, good morning.

Hi, Steve.

Hi, Lynn. Just I think you just answered this on Julien’s question, but just to maybe ask again a little differently. So, obviously, the cost-cutting offsets a lot of pressures in ‘23 in ‘24 and beyond. As you mentioned, the cost-cutting moderates, and it goes through regulated rates also, and but the holding company debt refinancing and stuff continues, assuming rates stay high. But it sounds like what you’re thinking is that the improved cash flow and performance at the utilities kind of could sustain the offset? Is that how to think about beyond ‘23?

Steve, I would maybe expand the thinking to be a little broader on that. We also use tools like interest rate hedging, which you would expect us to. We have $1 billion of proceeds from GIC coming in. We have the commercial renewable transaction. We have cost mitigation. We’ve sized it at $200 to $300 million this year. That will carry forward, and we will continue to look for ways to drive costs out of the business. We also have the IRA coming. I feel like we’ve got a variety of tools. As we look at the profile into ‘24, we don’t have a lot of additional headwinds from a relatively light maturity period. I would think about all of those factors together and recognize that we are working very strategically to minimize these costs and to manage the business effectively.

Okay. Great. And then just in terms of thinking about kind of dividend growth, should we – given that there is some kind of reset a little bit on the earnings, just should we assume you continue at kind of a rate below the earnings growth for another couple of years before you move it up into the earnings growth range?

Steve, it’s a really good question. This is something we’re looking at closely, and we had set a target of being in the 65% to 70% payout range. In this 5-year period, we will be well positioned in that range. Our expectation would be to recommend a dividend increase at the right time in the 5-year period to match something closer to the growth in the business. But I think 2% is a good planning assumption for ‘23. We will look at it again in ‘24 and beyond. But this is something that’s getting a lot of attention in light of the de-risking of the business and the strength of the capital, the cash flow we’re anticipating, and the work that we’ve done to moderate the payout ratio.

Okay, great. Thanks so much.

Thank you.

Hey, good morning. Thanks so much for taking my questions.

Good morning.

I was wondering if you could just maybe elaborate a little bit more around the load growth backdrop that you’re seeing. It sounded like flat to 0.5% growth assumed into 2023. What are the puts and takes there? Is that conservative based on what you’ve seen so far this year? And then would be just curious on that industrial slowdown that you’ve seen, do you expect that to continue into 2023 as well? Is that factored in?

And David, I’ll make a couple of comments and then turn it over to Brian. We use a conservative load growth assumption in our planning. We size our cost structure to be consistent with that. But when I look at the strength of the economy that we are enjoying right now and the volumes that are coming through, we’re very well positioned. Brian made a comment in his remarks that we’re already 2% above pre-pandemic levels, which I think is quite an extraordinary rebound. But Brian, how would you add to that and maybe talk a little bit about the industrial.

Sure. Yes. So first, on the general economy, David, we continue to see migration into our territories. It’s driving both the residential and the commercial class. So those growth profiles are strong. As Lynn said, we use conservative assumptions as we look out in future years to really size our business. On the industrial side, we’ve seen some companies with planned shutdowns this quarter. We don’t feel like it’s a trend that’s going to linger. It was planned, as well as some of the supply chain bottlenecks that continue to show up in different pockets of the industry. The automotive sector was impacted this quarter, but again, those things will work themselves out over time and nothing systemic. So we are still bullish on all three sectors.

No, David, some of the statistics we shared with you on economic development are also noteworthy. That’s not even a complete list of what’s happened in 2022. North Carolina was rated number one for business for a reason, which is a low tax environment and a good workforce, great university system, and we have had an extraordinary year from an economic development standpoint. We expect that to show up over the 5-year period.

Got it. Thanks so much. That’s helpful. And then was interested in just expanding a bit more on the cost reduction outlook into 2023. What are you seeing for inflationary pressures right now in the O&M budgets? Obviously, the backdrop has been tough in terms of inflation pressures, but you are expanding the cost reduction aspirations into next year. Wondering just how achievable that looks and what pressures you are seeing in the current environment?

We do see some inflationary pressures. I would point to materials. I would point to labor, but all of that, David was a part of the analysis that went into our cost reduction efforts. I don’t see anything happening in the inflation environment that’s impacting our commitment to drive these costs out of the business. The other thing I would point to, a lot of the material inflation is showing up in our capital plan. We are monitoring that as well to make sure that we are spending capital in a prudent way to benefit customers.

Okay. Understood. I appreciate it. Thanks so much.

Thank you.

Hey. Good morning everyone. Thanks. Hi. So, I guess just – thanks for the updates on the CAGR. It sounds like you are now kind of including the inflation outlook going forward. So, that’s great. And I recall on just previous calls and talking about the CAGR, you kind of talked about getting to the higher end of the range as the multiyear rate plans kind of come into effect and you execute on this carbon plan. So, I am just curious if you could just update the investment community on if that dynamic still exists as we get to the out years here in the new CAGR? Thank you.

Yes. Nick, thanks for that question. Let me start by saying we believe our regulated business with this clean energy transition, $125 billion of capital over the 10 years has the potential to achieve at the high end of the range. Given the dynamic economic environment that we are in right now, we believe 5% to 7% is the right range to use for the planning assumption, and know that we will work every year to be as well positioned within that range as we possibly can. We have talked about many of those puts and takes, IRA benefits, reducing O&M, all of these things represent opportunities as the plan unfolds, and further this very meaningful regulatory activity that’s underway is another key ingredient. The first all-year rate plan filing for DEP occurred this year, and we are expecting another one for DEC in the coming year. We are putting pieces in place and trying to address the macroeconomic environment at the same time. We believe all of this, given the premier regulated utilities that we offer, is a very strong value proposition for investors.

Thanks for that. And then I just wanted to pivot to renewables quick, acknowledging that you are moving away from the Commercial segment. As you mentioned, you are doing a ton in the regulated arena. So, just maybe just a general state of the state on what you are seeing in the renewable supply chain at this point. I see that you are still kind of executing in Florida with the 300 megawatts that went into service in 2022 as planned, but just general comments on the supply chain and ability to kind of get things done in the 5-year window? Thanks.

Nick, thank you for that. As we have talked over the last year with some of the challenges in the supply chain, we have always leaned to our regulated business and made sure we have adequate supply. We have extended our purchasing relationships with our suppliers to ensure we have confidence around supply into ‘26 and beyond with options to continue. We are putting similar arrangements in place for battery storage. We are confident in our ability to execute the regulated plan and have so many opportunities as we pursue this clean energy transition. We are working to make sure we have got the supply chain, the labor, etc., and we have been successful so far and see that continuing.

Hey. Good morning Lynn. I just had a quick follow-up, hopefully quick, on the interest expense into 2023. Any color, Brian, that you can share as to what level of rates – interest rates are you using as we look out to 2023, particularly related to your variable there, so we can kind of do the sensitivity as we look out to the interest rate outlook here?

Durgesh, the sensitivity of 100 basis points, representing about $0.12 is probably the best and cleanest without getting into specific detail on commercial paper and long-term debt, recognizing the tenor can fluctuate. I think that’s a really good proxy for you, and I would point you there.

Okay. Perfect. Thank you. I appreciate it.

Thank you.

Hi. Good morning. Thank you for taking my questions. So, a couple of questions here, if I may. First, with the sale of the renewable business, does that present an opportunity for you to have conversations with rating agencies about reviewing and maybe improving your corporate rating? And what impact could it have on your borrowing costs?

Yes. So, we keep a close relationship with the agencies. By that, I mean sharing with them all of our plans, what we expect in terms of this transaction, the de-risking of the business. I wouldn’t expect, though, given the magnitude of this recently 5% of the business, that it would have an impact on downgrade thresholds or anything of that sort. But it gives us an opportunity to de-risk. It gives us an opportunity to bring in some cash, and all of that is important to the agencies, and we will keep them apprised every step of the way.

Got it. Thank you. And then on the cost-cutting initiatives you are talking about, could you just maybe share some examples of what you are planning to do there? So, we can get a better sense of what the initiatives are?

Sure. Yes. The one comment I would make is this is where size and scale matter because we have had an opportunity to drive costs through the supply chain as a result of that size and scale that has been helpful. We have been working on this over the course of the summer, looking at ways to simplify, using digital technologies in order to streamline our governance processes, our reporting processes, etc. We were looking to prioritize certain roles over others. We assessed our real estate footprint; there was an opportunity to really reduce the amount of corporate real estate we operate. We looked at governance across the company to maintain our controls while running a leaner organization. It was a grassroots effort where we got input from all of our teammates to determine the best areas to execute on. We have over 200 initiatives. So, this isn’t a one-off, it’s many small improvements that will add up to this $200 million that we have upsized to $300 million as we identified opportunities.

Yes. Certainly, Sophie. Looking at reports and systems, you find lots of applications. Do we need all of them? Do we have applications that are only used for a handful of people and can we transfer or eliminate them? With that, you have got license fees, cybersecurity expenses, and people who maintain those systems. So, it’s things like that where you just step back and assess corporate functions and the service levels we offer to determine if there is a way to do it leaner and more efficiently using technology.

Thank you so much for the color there.

Thank you.

Hey Lynn. Thank you for taking my questions and Brian. I think this is your first earnings call, leading as CFO. Congrats.

It is, Michael. Thank you.

Well, everybody remembers their first call, Michael. It’s true.

I could imagine. They should give out trophies or something like that. Hey, a couple of questions. One is short-term a little bit, Lynn, one is long-term. Can you remind me – one is short-term a little bit, Lynn, one is long-term. Can you remind me the cadence and schedule for filing both the North and South Carolina at Duke Energy Carolinas? That’s question one. Question two is kind of think of much longer term, which is many of the stakeholders in North Carolina in the carbon plan have expressed support for offshore wind? And yet if you look at the company’s developing offshore wind in the U.S. you have got one company on the East Coast that’s trying to back out of its PPAs, signed contracts that they signed less than 1.5 years ago. You have got a large European operator and developer of U.S.-based offshore winds in its earnings call this week that returns and the progress of developing and installing offshore wind is facing headwinds. Can you just kind of talk about your views of some of the – I don’t know, I’ll call it offshore wind still a bit of an emerging technology, but just kind of how you are thinking about the risk reward for Duke relative to doing something as significant as that?

Yes. Michael, thank you. And let me – I will do first rate cases. Duke Energy Carolinas in North Carolina will be filed in early 2023. The sequence of these things, you host a technical conference to talk about the capital in the multiyear rate plan that occurred recently. The rate case will follow. We have not yet announced timing or plans for a DEC case in South Carolina. More to come on that, and we will keep you updated along the way. Offshore wind is something that we believe is an option over this 2030, 2040, 2050 periods here in the Carolinas. It represents diversity of supply. It is a renewable resource system. But as I say all of that, we also recognize it’s expensive. It has transmission requirements, particularly here in the Carolinas, where you have got to get the power to the load centers that are further west than the coast. The approach that we are taking is one of studying and learning more and also allowing the commission, stakeholders, and communities that could be impacted by both the offshore and the onshore transmission to be involved as well. We will not be the first to move into it, and we will not move outside of the regulated business. The risk reward for investors and customers has to be appropriate for us to move forward. I would describe our current status as being in evaluation mode. We think it’s an important resource and necessary as part of the clean energy transition, but we are being deliberate and cautious as we move into it.

Got it. And then last question, just on energy reliability. Just curious how you are thinking about the near term, meaning next 3 years to 5 years for your coal generation fleet, given the uptick in demand that you and some of your peers in the Southeastern states as well as in the Midwest. And just some of the details like in the Midwest so and elsewhere, that the grid operators and others have put out concerned about near-term reliability constraints.

Michael, it’s a really good question. I would say to you is as we contemplated the various scenarios we presented in the carbon plan, as we contemplated the integrated resource plan in Indiana. We are updating that integrated resource plan in Indiana to include the new planning assumptions that MISO requires consistent with those reliability concerns. We will not present a plan that does not maintain reliability. We will not retire assets that are needed to maintain reliability. That’s being closely monitored, and our regulators completely understand and support that. We just have to work our way through it, making sure that we have replacement generation and transmission ready to go. The combination of resources, ready to go so that when we retire, our customers can expect reliability. That is our commitment, and that’s the way we are planning and executing these transition plans.

Got it. Thank you and much appreciate it.

Brica, thank you and thanks to everyone who joined. We will see you in a week. We are pretty confident we will get to do this again, a small room for EEI. So, we look forward to seeing you then. Thanks again for your interest, your questions, and look forward to seeing you soon.

Thank you. That does conclude today’s conference call. Thank you all again for joining. You may now disconnect your lines.