Business Context and Reporting Period
This Form 8-K is a current report filed by Duke Energy Corporation and Duke Energy Progress, LLC (DEP) on November 20, 2017. The filing addresses a regulatory development concerning a rate case filed by DEP with the North Carolina Utilities Commission (NCUC) on June 1, 2017.
Key Financial Metrics
The filing does not provide consolidated revenue, profit, cash flow, or liquidity metrics for the reporting period. The only specific financial metric disclosed relates to the proposed rate case settlement:
- Return on Equity (ROE): 9.9%
- Proposed Capital Structure: 52% equity and 48% debt
Material Changes and Regulatory Developments
On November 20, 2017, DEP and the Public Staff notified the NCUC of a preliminary partial settlement in principle regarding the 2017 rate case. While the parties agreed on the ROE and capital structure, they have not reached a compromise on the following items:
- Coal ash basin deferred costs to be recovered and the amortization period.
- Ongoing coal ash costs to be included in rates.
- Deferred storm costs to be recovered and the amortization period.
Outlook, Risks, and Contingencies
The parties intend to file a final, definitive partial settlement agreement with further details and supporting testimony prior to the evidentiary hearing scheduled to begin on November 27, 2017. The partial settlement is subject to review and approval by the NCUC. The filing notes that the outcome of the rate case remains contingent on the resolution of the outstanding coal ash and storm cost issues.
Investor Verification Checklist
- Verify the final approval status of the 9.9% ROE by the NCUC.
- Monitor the resolution of deferred coal ash basin costs and ongoing coal ash cost recovery.
- Track the determination of deferred storm cost recovery and amortization periods.
- Review the final definitive settlement agreement once filed prior to the November 27, 2017 hearing.