Duke Energy CORP (Form: 8-K, Received: 10/06/2022 16:20:01)

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): October 6, 2022

Commission file number	Registrant, State of Incorporation or Organization, Address of Principal Executive Offices and Telephone Number	IRS Employer Identification Number

1-32853	DUKE ENERGY CORPORATION (a Delaware corporation) 526 South Church Street Charlotte, North Carolina 28202-1803 704-382-3853	20-2777218
1-3382	DUKE ENERGY PROGRESS, LLC (a North Carolina limited liability company) 410 South Wilmington Street Raleigh, North Carolina 27601-1748 704-382-3853	56-0165465

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))

Title of each class	Trading Symbol(s)	Name of each exchange on which registered
Common Stock, $0.001 par value	DUK	New York Stock Exchange LLC
5.625% Junior Subordinated Debentures due September 15, 2078	DUKB	New York Stock Exchange LLC
Depositary Shares each representing a 1/1,000^th interest in a share of 5.75% Series A Cumulative Redeemable Perpetual Preferred Stock, par value $0.001 per share	DUK PR A	New York Stock Exchange LLC
3.10% Senior Notes due 2028	DUK 28A	New York Stock Exchange
3.85% Senior Notes due 2034	DUK 34	New York Stock Exchange

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 8.01. Other Events.

On October 6, 2022, Duke Energy Progress, LLC (“DEP”) filed a rate case with the North Carolina Utilities Commission (the “NCUC”) to request an increase in base rate retail revenues. DEP’s rate request before the NCUC includes a Performance Based Regulation Application which includes a Multi-Year Rate Plan (“MYRP”) and proposes rates for 3 years within the MYRP period. If approved by the NCUC, the net increase in retail revenues in year one is about $326 million or 8.5%, followed by $151 million (3.9%) in year two and $138 million (3.6%) in year three – a total 16% increase by late 2025. The rate case filing requests an overall rate of return of 7.13% based on approval of a 10.2% return on equity and a 53% equity component of the capital structure.

Although a procedural schedule has not yet been established by the NCUC, hearings are expected to commence in May 2023. DEP intends to implement temporary rates, subject to refund, on June 1, 2023 for the historic base case increase and has requested the NCUC approve the requested permanent total Year 1 rates to be effective no later than October 1, 2023.

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 2022 Rate Case Filing
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: October 6, 2022	By:	/s/ David S. Maltz

	Name:	David S. Maltz
	Title:	Vice President, Legal, Chief Governance Officer and Assistant Corporate Secretary

	DUKE ENERGY PROGRESS, LLC
Date: October 6, 2022	By:	/s/ David S. Maltz

	Name:	David S. Maltz
	Title:	Vice President, Legal, Chief Governance Officer and Assistant Secretary

Co-Registrant CIK	0000017797
Co-Registrant Amendment Flag	false
Co-Registrant Form Type	8-K
Co-Registrant DocumentPeriodEndDate	2022-10-6
Co-Registrant Written Communications	false
Co-Registrant Solicitating Materials	false
Co-Registrant PreCommencement Tender Offer	false
Co-Registrant PreCommencement Issuer Tender Offer	false
Co-Registrant Emerging Growth Company	false

Exhibit 99.1

Duke Energy Progress, LLC

Summary of 2022 Rate Case Filing in North Carolina

(Docket E-2 Sub 1300)

On October 6, 2022, Duke Energy Progress (DEP) filed a rate case with the North Carolina Utilities Commission (NCUC) to request an increase in base rate retail revenues. DEP’s rate request before the NCUC includes a Performance Based Regulation (PBR) Application which includes a Multi-Year Rate Plan (MYRP) and proposes rates for 3 years within the MYRP period. If approved, the overall retail revenue increase is as follows:

	Annual Revenues		Average % Rate Impact
Historic Base Case	$	219 million		5.7	%
Year 1 – MYRP	$	107 million		2.8	%
Total Year 1	$	326 million		8.5	%
Year 2 – MYRP	$	151 million		3.9	%
Year 3 – MYRP	$	138 million		3.6	%
Combined Total	$	615 million		16.0	%

	o	The rate case filing requests an overall rate of return of 7.13% based on approval of a 10.2% return on equity (ROE) and a 53% equity component of the capital structure.¹
	o	The historic base case in the filing is based on a North Carolina retail rate base of $12.3 billion as of December 31, 2021, adjusted for known and measurable changes projected through April 30, 2023.
	o	Since its previous rate case, Duke Energy Progress has reduced its North Carolina Retail annual operating costs by more than $100 million (2018 to 2021). Those savings will be passed on to customers in this case.
	o	The MYRP includes impacts of approximately $3.8 billion (NC retail allocation) of capital projects that are projected to go in service over the MYRP period.
	o	In addition to the MYRP, the PBR Application includes an Earnings Sharing Mechanism, Residential Decoupling Mechanism and Performance Incentive Metrics (PIMs) as required by NC House Bill 951.
	o	Hearings are expected to commence in May 2023.
	o	The Company intends to implement temporary rates subject to refund June 1, 2023 for the historic base case increase and has requested the NCUC approve the requested permanent total Year 1 rates to be effective no later than October 1, 2023.

¹ This overall rate of return includes the provisions of the CCR settlement which includes a 150 basis point reduction in the ROE with a 52% equity component for the capital structure allowed for coal ash deferrals during the amortization period.

This rate increase is driven by:

Drivers	Revenue Requirement		% of Total Request
Significant historical plant investments and changes, including changes in depreciation rates	$	324 million		53	%
MYRP projected investments	$	396 million		64	%
All other changes, including lower O&M costs	$	(105) million		(11	)%
Rate Increase – Total	$	615 million

Major capital investments² including pro-forma adjustment to reflect known and measurable changes include:

	o	Transmission and Distribution (T&D) investments, including Grid improvement investments of approximately $2.2 billion since the last rate case through the capital cutoff in the base case and $2.9 billion of T&D investments proposed in the MYRP (approximately 75% of MYRP).
	o	$300 million of investment in energy storage and solar assets included in MYRP consistent with Carbon Plan filing.
	o	Nuclear life extensions and accelerated coal plant retirement dates are factored into the depreciation study.

Performance Based Regulation Application

MYRP with an Earnings Sharing Mechanism

	o	Quarterly reporting required on status of MYRP projects as well as ROE
	o	If adjusted annual earnings exceed the authorized ROE plus 50 basis points, the excess earnings will be distributed to customers through a rider.
	o	If adjusted annual earnings fall below the authorized ROE, the utility may file a rate case (prior to the end of the MYRP).

Residential Decoupling

	o	Residential revenues will grow based on growth in number of customers instead of growth in kwh. Decoupling mechanism will break link between earnings and changes in usage per residential customer, including decreases due to NEM/DER and volatility due to weather.
	o	One exemption is that growth in sales from EV adoption are proposed to be excluded from the mechanism, to incent the utility to encourage EV adoption.
	o	Net lost revenues associated with DSM/EE programs will continue to be recovered through EE rider and therefore will not be included in the decoupling calculation.

² Amounts presented represent the NC Retail allocation of project costs

PIMs and Tracking Metrics

	o	DEP already has performance incentives in place for its DSM/EE programs, and therefore is not proposing an additional DSM/EE PIM. The existing DSM/EE incentives are collected through the DSM/EE rider and are excluded from the 1% cap on PIMs under HB951.
	o	4 PIMs proposed - Peak Load Reduction, Low-Income, Renewables Integration, and Reliability
	o	3 Tracking Metrics – Electric vehicle adoption, Carbon reductions, Customer Service
	o	Rewards and Penalties associated with PIMs – potential maximum upside of $8M annually and maximum downside of $8M annually. Amounts associated with PIMs will be collected from or distributed to customers through annual PIMs rider.

Coal Ash Compliance Costs:

	o	Requests continued regulatory asset treatment for ongoing coal ash closure costs.
	o	Includes recovery of approximately $220 million (NC retail) over a 5-year period. Consists of costs from March 2020 – April 2023 which are partially offset by proceeds received from insurance litigation and the CCR Settlement adjustment that was approved by the Commission.
	o	Net increase of $4M in NC retail revenues requested due to earlier tranche of coal ash spend being fully amortized and expiring. Change is included in “All Other Changes” line above.