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UNITED STATES SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-Q
(Mark One)
QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended September 30, 2021
OR
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the transition period from _________to_________
Commission file number Registrant, State of Incorporation or Organization,
Address of Principal Executive Offices and Telephone Number
IRS Employer Identification Number
DUK-20210930_G1.JPG
1-32853
DUKE ENERGY CORPORATION
20-2777218
(a Delaware corporation)
526 South Church Street
Charlotte, North Carolina 28202-1803
704-382-3853
1-4928
DUKE ENERGY CAROLINAS, LLC
56-0205520
(a North Carolina limited liability company)
526 South Church Street
Charlotte, North Carolina 28202-1803
704-382-3853
1-15929
PROGRESS ENERGY, INC.
56-2155481
(a North Carolina corporation)
410 South Wilmington Street
Raleigh, North Carolina 27601-1748
704-382-3853
1-3382
DUKE ENERGY PROGRESS, LLC
56-0165465
(a North Carolina limited liability company)
410 South Wilmington Street
Raleigh, North Carolina 27601-1748
704-382-3853
1-3274
DUKE ENERGY FLORIDA, LLC
59-0247770
(a Florida limited liability company)
299 First Avenue North
St. Petersburg, Florida 33701
704-382-3853
1-1232
DUKE ENERGY OHIO, INC.
31-0240030
(an Ohio corporation)
139 East Fourth Street
Cincinnati, Ohio 45202
704-382-3853
1-3543
DUKE ENERGY INDIANA, LLC
35-0594457
(an Indiana limited liability company)
1000 East Main Street
Plainfield, Indiana 46168
704-382-3853
1-6196
PIEDMONT NATURAL GAS COMPANY, INC.
56-0556998
(a North Carolina corporation)
4720 Piedmont Row Drive
Charlotte, North Carolina 28210
704-364-3120





SECURITIES REGISTERED PURSUANT TO SECTION 12(b) OF THE ACT:
Name of each exchange on
Registrant    Title of each class    Trading symbols        which registered
Duke Energy    Common Stock, $0.001 par value    DUK    New York Stock Exchange LLC

Duke Energy    5.625% Junior Subordinated Debentures due    DUKB    New York Stock Exchange LLC
September 15, 2078
Duke Energy    Depositary Shares, each representing a 1/1,000th    DUK PR A    New York Stock Exchange LLC
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 (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.
Duke Energy Corporation (Duke Energy) Yes No Duke Energy Florida, LLC (Duke Energy Florida) Yes No
Duke Energy Carolinas, LLC (Duke Energy Carolinas) Yes No Duke Energy Ohio, Inc. (Duke Energy Ohio) Yes No
Progress Energy, Inc. (Progress Energy) Yes No Duke Energy Indiana, LLC (Duke Energy Indiana) Yes No
Duke Energy Progress, LLC (Duke Energy Progress) Yes No Piedmont Natural Gas Company, Inc. (Piedmont) Yes No
Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files).
Duke Energy Yes No Duke Energy Florida Yes No
Duke Energy Carolinas Yes No Duke Energy Ohio Yes No
Progress Energy Yes No Duke Energy Indiana Yes No
Duke Energy Progress Yes No Piedmont Yes No
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company” and "emerging growth company" in Rule 12b-2 of the Exchange Act.
Duke Energy Large Accelerated Filer Accelerated filer Non-accelerated Filer Smaller reporting company Emerging growth company
Duke Energy Carolinas Large Accelerated Filer Accelerated filer Non-accelerated Filer Smaller reporting company Emerging growth company
Progress Energy Large Accelerated Filer Accelerated filer Non-accelerated Filer Smaller reporting company Emerging growth company
Duke Energy Progress Large Accelerated Filer Accelerated filer Non-accelerated Filer Smaller reporting company Emerging growth company
Duke Energy Florida Large Accelerated Filer Accelerated filer Non-accelerated Filer Smaller reporting company Emerging growth company
Duke Energy Ohio Large Accelerated Filer Accelerated filer Non-accelerated Filer Smaller reporting company Emerging growth company
Duke Energy Indiana Large Accelerated Filer Accelerated filer Non-accelerated Filer Smaller reporting company Emerging growth company
Piedmont Large Accelerated Filer Accelerated filer Non-accelerated Filer Smaller reporting company 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. ¨
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).
Duke Energy Yes
No Duke Energy Florida Yes
No
Duke Energy Carolinas Yes
No Duke Energy Ohio Yes
No
Progress Energy Yes
No Duke Energy Indiana Yes
No
Duke Energy Progress Yes
No Piedmont Yes
No
Number of shares of common stock outstanding at October 31, 2021:
Registrant Description Shares
Duke Energy Common stock, $0.001 par value 769,343,372



This combined Form 10-Q is filed separately by eight registrants: Duke Energy, Duke Energy Carolinas, Progress Energy, Duke Energy Progress, Duke Energy Florida, Duke Energy Ohio, Duke Energy Indiana and Piedmont (collectively the Duke Energy Registrants). Information contained herein relating to any individual registrant is filed by such registrant solely on its own behalf. Each registrant makes no representation as to information relating exclusively to the other registrants.
Duke Energy Carolinas, Progress Energy, Duke Energy Progress, Duke Energy Florida, Duke Energy Ohio, Duke Energy Indiana and Piedmont meet the conditions set forth in General Instructions H(1)(a) and (b) of Form 10-Q and are therefore filing this form with the reduced disclosure format specified in General Instructions H(2) of Form 10-Q.



TABLE OF CONTENTS
PART I. FINANCIAL INFORMATION
9
15
19
23
27
31
35
Piedmont Natural Gas Company, Inc. Financial Statements
39
Note 1 – Organization and Basis of Presentation
43
Note 2 – Business Segments
45
Note 3 – Regulatory Matters
49
Note 4 – Commitments and Contingencies
59
Note 5 – Debt and Credit Facilities
62
Note 6 – Goodwill
63
Note 7 – Related Party Transactions
64
Note 8 – Derivatives and Hedging
65
Note 9 – Investments in Debt and Equity Securities
70
Note 10 – Fair Value Measurements
75
Note 11 – Variable Interest Entities
80
Note 12 – Revenue
83
Note 13 – Stockholders' Equity
89
Note 14 – Employee Benefit Plans
90
Note 15 – Income Taxes
91
Note 16 – Subsequent Events
92
93
110
111
PART II. OTHER INFORMATION
112
112
112
113
116



FORWARD-LOOKING STATEMENTS

CAUTIONARY STATEMENT REGARDING FORWARD-LOOKING INFORMATION
This document includes forward-looking statements within the meaning of Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934. Forward-looking statements are based on management’s beliefs and assumptions and can often be identified by terms and phrases that include “anticipate,” “believe,” “intend,” “estimate,” “expect,” “continue,” “should,” “could,” “may,” “plan,” “project,” “predict,” “will,” “potential,” “forecast,” “target,” “guidance,” “outlook” or other similar terminology. Various factors may cause actual results to be materially different than the suggested outcomes within forward-looking statements; accordingly, there is no assurance that such results will be realized. These factors include, but are not limited to:
The impact of the COVID-19 pandemic;
State, federal and foreign legislative and regulatory initiatives, including costs of compliance with existing and future environmental requirements, including those related to climate change, as well as rulings that affect cost and investment recovery or have an impact on rate structures or market prices;
The extent and timing of costs and liabilities to comply with federal and state laws, regulations and legal requirements related to coal ash remediation, including amounts for required closure of certain ash impoundments, are uncertain and difficult to estimate;
The ability to recover eligible costs, including amounts associated with coal ash impoundment retirement obligations and costs related to significant weather events, and to earn an adequate return on investment through rate case proceedings and the regulatory process;
The costs of decommissioning nuclear facilities could prove to be more extensive than amounts estimated and all costs may not be fully recoverable through the regulatory process;
Costs and effects of legal and administrative proceedings, settlements, investigations and claims;
Industrial, commercial and residential growth or decline in service territories or customer bases resulting from sustained downturns of the economy and the economic health of our service territories or variations in customer usage patterns, including energy efficiency efforts and use of alternative energy sources, such as self-generation and distributed generation technologies;
Federal and state regulations, laws and other efforts designed to promote and expand the use of energy efficiency measures and distributed generation technologies, such as private solar and battery storage, in Duke Energy service territories could result in customers leaving the electric distribution system, excess generation resources as well as stranded costs;
Advancements in technology;
Additional competition in electric and natural gas markets and continued industry consolidation;
The influence of weather and other natural phenomena on operations, including the economic, operational and other effects of severe storms, hurricanes, droughts, earthquakes and tornadoes, including extreme weather associated with climate change;
Changing customer expectations and demands including heightened emphasis on environmental, social and governance concerns;
The ability to successfully operate electric generating facilities and deliver electricity to customers including direct or indirect effects to the company resulting from an incident that affects the U.S. electric grid or generating resources;
Operational interruptions to our natural gas distribution and transmission activities;
The availability of adequate interstate pipeline transportation capacity and natural gas supply;
The impact on facilities and business from a terrorist attack, cybersecurity threats, data security breaches, operational accidents, information technology failures or other catastrophic events, such as fires, explosions, pandemic health events or other similar occurrences;
The inherent risks associated with the operation of nuclear facilities, including environmental, health, safety, regulatory and financial risks, including the financial stability of third-party service providers;
The timing and extent of changes in commodity prices and interest rates and the ability to recover such costs through the regulatory process, where appropriate, and their impact on liquidity positions and the value of underlying assets;
The results of financing efforts, including the ability to obtain financing on favorable terms, which can be affected by various factors, including credit ratings, interest rate fluctuations, compliance with debt covenants and conditions and general market and economic conditions;
Credit ratings of the Duke Energy Registrants may be different from what is expected;
Declines in the market prices of equity and fixed-income securities and resultant cash funding requirements for defined benefit pension plans, other post-retirement benefit plans and nuclear decommissioning trust funds;
Construction and development risks associated with the completion of the Duke Energy Registrants’ capital investment projects, including risks related to financing, obtaining and complying with terms of permits, meeting construction budgets and schedules and satisfying operating and environmental performance standards, as well as the ability to recover costs from customers in a timely manner, or at all;
Changes in rules for regional transmission organizations, including changes in rate designs and new and evolving capacity markets, and risks related to obligations created by the default of other participants;
The ability to control operation and maintenance costs;
The level of creditworthiness of counterparties to transactions;
The ability to obtain adequate insurance at acceptable costs;
Employee workforce factors, including the potential inability to attract and retain key personnel;


FORWARD-LOOKING STATEMENTS

The ability of subsidiaries to pay dividends or distributions to Duke Energy Corporation holding company (the Parent);
The performance of projects undertaken by our nonregulated businesses and the success of efforts to invest in and develop new opportunities;
The effect of accounting pronouncements issued periodically by accounting standard-setting bodies;
The impact of U.S. tax legislation to our financial condition, results of operations or cash flows and our credit ratings;
The impacts from potential impairments of goodwill or equity method investment carrying values;
Asset or business acquisitions and dispositions, including our ability to successfully consummate the second closing of the minority investment in Duke Energy Indiana, may not yield the anticipated benefits;
The actions of activist shareholders could disrupt our operations, impact our ability to execute on our business strategy, or cause fluctuations in the trading price of our common stock; and
The ability to implement our business strategy, including enhancing existing technology systems.
Additional risks and uncertainties are identified and discussed in the Duke Energy Registrants' reports filed with the SEC and available at the SEC's website at sec.gov. In light of these risks, uncertainties and assumptions, the events described in the forward-looking statements might not occur or might occur to a different extent or at a different time than described. Forward-looking statements speak only as of the date they are made and the Duke Energy Registrants expressly disclaim an obligation to publicly update or revise any forward-looking statements, whether as a result of new information, future events or otherwise.


GLOSSARY OF TERMS

Glossary of Terms 
The following terms or acronyms used in this Form 10-Q are defined below:
Term or Acronym Definition
2013 Settlement Revised and Restated Stipulation and Settlement Agreement approved in November 2013 among Duke Energy Florida, the Florida Office of Public Counsel and other customer representatives
2017 Settlement Second Revised and Restated Settlement Agreement in 2017 among Duke Energy Florida, the Florida Office of Public Counsel and other customer representatives, which replaces and supplants the 2013 Settlement
2021 Settlement Settlement Agreement in 2021 among Duke Energy Florida, the Florida Office of Public Counsel, the Florida Industrial Power Users Group, White Springs Agricultural Chemicals, Inc. d/b/a PSC Phosphate and NUCOR Steel Florida, Inc.
ACP Atlantic Coast Pipeline, LLC, a limited liability company owned by Dominion Energy, Inc. and Duke Energy
ACP pipeline The approximately 600-mile canceled interstate natural gas pipeline
AFS Available for Sale
AFUDC Allowance for funds used during construction
ARO Asset retirement obligations
Bison Bison Insurance Company Limited
Board Duke Energy Board of Directors
CCR Coal Combustion Residuals
Coal Ash Act North Carolina Coal Ash Management Act of 2014
the company Duke Energy Corporation and its subsidiaries
COVID-19 Coronavirus Disease 2019
CRC Cinergy Receivables Company, LLC
Crystal River Unit 3 Crystal River Unit 3 Nuclear Plant
DEFPF Duke Energy Florida Project Finance, LLC
DEFR Duke Energy Florida Receivables, LLC
DEPR Duke Energy Progress Receivables, LLC
DERF Duke Energy Receivables Finance Company, LLC
Duke Energy Duke Energy Corporation (collectively with its subsidiaries)
Duke Energy Ohio Duke Energy Ohio, Inc.
Duke Energy Progress Duke Energy Progress, LLC
Duke Energy Carolinas Duke Energy Carolinas, LLC
Duke Energy Florida Duke Energy Florida, LLC
Duke Energy Indiana Duke Energy Indiana, LLC
Duke Energy Kentucky Duke Energy Kentucky, Inc.
Duke Energy Registrants Duke Energy, Duke Energy Carolinas, Progress Energy, Duke Energy Progress, Duke Energy Florida, Duke Energy Ohio, Duke Energy Indiana and Piedmont
EDIT Excess deferred income tax
Elliott Elliott Investment Management, L.P.
EPS Earnings Per Share
ETR Effective tax rate
Exchange Act Securities Exchange Act of 1934
FERC Federal Energy Regulatory Commission
FPSC Florida Public Service Commission
FTR Financial transmission rights
GAAP Generally accepted accounting principles in the U.S.


GLOSSARY OF TERMS

GAAP Reported Earnings Net Income Available to Duke Energy Corporation Common Stockholders
GAAP Reported EPS Basic Earnings Per Share Available to Duke Energy Corporation common stockholders
GIC GIC Private Limited, Singapore's sovereign wealth fund and an experienced investor in U.S. infrastructure
GWh Gigawatt-hours
IMR Integrity Management Rider
IRS Internal Revenue Service
Investment Trusts NDTF investments and grantor trusts of Duke Energy Progress, Duke Energy Florida and Duke Energy Indiana
IURC Indiana Utility Regulatory Commission
KPSC Kentucky Public Service Commission
LLC Limited Liability Company
MGP Manufactured gas plant
MW Megawatt
MWh Megawatt-hour
NCUC North Carolina Utilities Commission
NDTF Nuclear decommissioning trust funds
NPNS Normal purchase/normal sale
OPEB Other Post-Retirement Benefit Obligations
OVEC Ohio Valley Electric Corporation
Piedmont Piedmont Natural Gas Company, Inc.
PJM Pennsylvania-New Jersey-Maryland Interconnection
PPA Purchase Power Agreement
Progress Energy Progress Energy, Inc.
PSCSC Public Service Commission of South Carolina
PUCO Public Utilities Commission of Ohio
RTO Regional Transmission Organization
Subsidiary Registrants Duke Energy Carolinas, Progress Energy, Duke Energy Progress, Duke Energy Florida, Duke Energy Ohio, Duke Energy Indiana and Piedmont
the Tax Act Tax Cuts and Jobs Act
TPUC Tennessee Public Utility Commission
U.S. United States
VIE Variable Interest Entity
WACC Weighted Average Cost of Capital



FINANCIAL STATEMENTS

ITEM 1. FINANCIAL STATEMENTS

DUKE ENERGY CORPORATION
Condensed Consolidated Statements of Operations
(Unaudited)
Three Months Ended Nine Months Ended
September 30, September 30,
(in millions, except per share amounts) 2021 2020 2021 2020
Operating Revenues
Regulated electric $ 6,495  $ 6,315  $ 16,972  $ 16,402 
Regulated natural gas 263  214  1,314  1,115 
Nonregulated electric and other 193  192  573  574 
Total operating revenues 6,951  6,721  18,859  18,091 
Operating Expenses
Fuel used in electric generation and purchased power 1,844  1,849  4,702  4,645 
Cost of natural gas 75  41  430  299 
Operation, maintenance and other 1,507  1,450  4,319  4,142 
Depreciation and amortization 1,265  1,217  3,698  3,497 
Property and other taxes 371  324  1,073  1,003 
Impairment of assets and other charges 211  28  342  36 
Total operating expenses 5,273  4,909  14,564  13,622 
Gains on Sales of Other Assets and Other, net 9  11  10 
Operating Income 1,687  1,814  4,306  4,479 
Other Income and Expenses
Equity in earnings (losses) of unconsolidated affiliates 22  (80) 14  (2,004)
Other income and expenses, net 238  127  493  310 
Total other income and expenses 260  47  507  (1,694)
Interest Expense 581  522  1,688  1,627 
Income Before Income Taxes 1,366  1,339  3,125  1,158 
Income Tax Expense (Benefit) 90  105  210  (74)
Net Income 1,276  1,234  2,915  1,232 
Add: Net Loss Attributable to Noncontrolling Interests 129  70  247  208 
Net Income Attributable to Duke Energy Corporation 1,405  1,304  3,162  1,440 
Less: Preferred Dividends 39  39  92  93 
Net Income Available to Duke Energy Corporation Common Stockholders $ 1,366  $ 1,265  $ 3,070  $ 1,347 
Earnings Per Share – Basic and Diluted
Net income available to Duke Energy Corporation common stockholders
Basic and Diluted $ 1.79  $ 1.74  $ 4.00  $ 1.85 
Weighted Average Shares Outstanding
Basic and Diluted 769  735  769  735 

See Notes to Condensed Consolidated Financial Statements
9

FINANCIAL STATEMENTS
DUKE ENERGY CORPORATION
Condensed Consolidated Statements of Comprehensive Income
(Unaudited)
Three Months Ended Nine Months Ended
September 30, September 30,
(in millions) 2021 2020 2021 2020
Net Income $ 1,276  $ 1,234  $ 2,915  $ 1,232 
Other Comprehensive Income (Loss), net of tax(a)
Pension and OPEB adjustments 1  3 
Net unrealized gains (losses) on cash flow hedges 9  (83) (59) (159)
Reclassification into earnings from cash flow hedges 2  9 
Unrealized (losses) gains on available-for-sale securities (2) (2) (6)
Other Comprehensive Income (Loss), net of tax 10  (80) (53) (145)
Comprehensive Income 1,286  1,154  2,862  1,087 
Add: Comprehensive Loss Attributable to Noncontrolling Interests 128  70  240  220 
Comprehensive Income Attributable to Duke Energy 1,414  1,224  3,102  1,307 
Less: Preferred Dividends 39  39  92  93 
Comprehensive Income Available to Duke Energy Corporation Common Stockholders $ 1,375  $ 1,185  $ 3,010  $ 1,214 
(a)Net of income tax impacts of approximately $24 million for the three months ended September 30, 2020, and $16 million and $43 million for the nine months ended September 30, 2021, and 2020, respectively. All other periods presented include immaterial income tax impacts.
See Notes to Condensed Consolidated Financial Statements
10

FINANCIAL STATEMENTS
DUKE ENERGY CORPORATION
Condensed Consolidated Balance Sheets
(Unaudited)
(in millions) September 30, 2021 December 31, 2020
ASSETS
Current Assets
Cash and cash equivalents $ 548  $ 259 
Receivables (net of allowance for doubtful accounts of $48 at 2021 and $29 at 2020)
998  1,009 
Receivables of VIEs (net of allowance for doubtful accounts of $75 at 2021 and $117 at 2020)
2,431  2,144 
Inventory 2,900  3,167 
Regulatory assets (includes $54 at 2021 and $53 at 2020 related to VIEs)
1,791  1,641 
Other (includes $347 at 2021 and $296 at 2020 related to VIEs)
768  462 
Total current assets 9,436  8,682 
Property, Plant and Equipment
Cost 160,652  155,580 
Accumulated depreciation and amortization (50,543) (48,827)
Facilities to be retired, net 127  29 
Net property, plant and equipment 110,236  106,782 
Other Noncurrent Assets
Goodwill 19,303  19,303 
Regulatory assets (includes $896 at 2021 and $937 at 2020 related to VIEs)
12,247  12,421 
Nuclear decommissioning trust funds 9,861  9,114 
Operating lease right-of-use assets, net 1,287  1,524 
Investments in equity method unconsolidated affiliates 951  961 
Other (includes $134 at 2021 and $81 at 2020 related to VIEs)
3,686  3,601 
Total other noncurrent assets 47,335  46,924 
Total Assets $ 167,007  $ 162,388 
LIABILITIES AND EQUITY
Current Liabilities
Accounts payable $ 2,888  $ 3,144 
Notes payable and commercial paper 2,098  2,873 
Taxes accrued 908  482 
Interest accrued 558  537 
Current maturities of long-term debt (includes $221 at 2021 and $472 at 2020 related to VIEs)
4,873  4,238 
Asset retirement obligations 673  718 
Regulatory liabilities 1,319  1,377 
Other 2,239  2,936 
Total current liabilities 15,556  16,305 
Long-Term Debt (includes $3,923 at 2021 and $3,535 at 2020 related to VIEs)
57,929  55,625 
Other Noncurrent Liabilities
Deferred income taxes 9,875  9,244 
Asset retirement obligations 12,278  12,286 
Regulatory liabilities 15,530  15,029 
Operating lease liabilities 1,093  1,340 
Accrued pension and other post-retirement benefit costs 988  969 
Investment tax credits 804  687 
Other (includes $341 at 2021 and $316 at 2020 related to VIEs)
1,714  1,719 
Total other noncurrent liabilities 42,282  41,274 
Commitments and Contingencies
Equity
Preferred stock, Series A, $0.001 par value, 40 million depositary shares authorized and outstanding at 2021 and 2020
973  973 
Preferred stock, Series B, $0.001 par value, 1 million shares authorized and outstanding at 2021 and 2020
989  989 
Common stock, $0.001 par value, 2 billion shares authorized; 769 million shares outstanding at 2021 and 2020
1 
Additional paid-in capital 44,348  43,767 
Retained earnings 3,293  2,471 
Accumulated other comprehensive loss (297) (237)
Total Duke Energy Corporation stockholders' equity 49,307  47,964 
Noncontrolling interests 1,933  1,220 
Total equity 51,240  49,184 
Total Liabilities and Equity $ 167,007  $ 162,388 

See Notes to Condensed Consolidated Financial Statements
11

FINANCIAL STATEMENTS
DUKE ENERGY CORPORATION
Condensed Consolidated Statements of Cash Flows
(Unaudited)
Nine Months Ended
September 30,
(in millions) 2021 2020
CASH FLOWS FROM OPERATING ACTIVITIES
Net income $ 2,915  $ 1,232 
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation, amortization and accretion (including amortization of nuclear fuel) 4,189  4,081 
Equity in (earnings) losses of unconsolidated affiliates (14) 2,004 
Equity component of AFUDC (126) (112)
Impairment of assets and other charges 342  36 
Deferred income taxes 206  210 
Payments for asset retirement obligations (389) (463)
Provision for rate refunds (41) (15)
Refund of AMT credit carryforwards   572 
(Increase) decrease in
Net realized and unrealized mark-to-market and hedging transactions 116  87 
Receivables (167) 58 
Inventory 268  43 
Other current assets (643) 199 
Increase (decrease) in
Accounts payable (146) (563)
Taxes accrued 431  386 
Other current liabilities 10  (284)
Other assets 199  (338)
Other liabilities 77  (367)
Net cash provided by operating activities 7,227  6,766 
CASH FLOWS FROM INVESTING ACTIVITIES
Capital expenditures (7,089) (7,408)
Contributions to equity method investments (30) (276)
Purchases of debt and equity securities (4,292) (6,160)
Proceeds from sales and maturities of debt and equity securities 4,335  6,087 
Disbursements to canceled equity method investments (855) — 
Other (269) (207)
Net cash used in investing activities (8,200) (7,964)
CASH FLOWS FROM FINANCING ACTIVITIES
Proceeds from the:
Issuance of long-term debt 6,379  6,162 
Issuance of common stock 5  75 
Payments for the redemption of long-term debt (3,696) (3,468)
Proceeds from the issuance of short-term debt with original maturities greater than 90 days 109  2,372 
Payments for the redemption of short-term debt with original maturities greater than 90 days (997) (1,143)
Notes payable and commercial paper 165  (969)
Contributions from noncontrolling interests 1,556  402 
Dividends paid (2,340) (2,113)
Other (21) (93)
Net cash provided by financing activities 1,160  1,225 
Net increase in cash, cash equivalents and restricted cash 187  27 
Cash, cash equivalents and restricted cash at beginning of period 556  573 
Cash, cash equivalents and restricted cash at end of period $ 743  $ 600 
Supplemental Disclosures:
Significant non-cash transactions:
Accrued capital expenditures $ 998  $ 992 
Non-cash dividends   82 

See Notes to Condensed Consolidated Financial Statements
12

FINANCIAL STATEMENTS
DUKE ENERGY CORPORATION
Condensed Consolidated Statements of Changes in Equity
(Unaudited)
Three Months Ended September 30, 2020 and 2021
Accumulated Other Comprehensive
 (Loss) Income
Net Unrealized Total
Net Gains (Losses) Gains Duke Energy
Common Additional (Losses) on on Available- Pension and Corporation
Preferred Stock Common Paid-in Retained Cash Flow for-Sale- OPEB Stockholders' Noncontrolling Total
(in millions) Stock Shares Stock Capital Earnings Hedges Securities Adjustments Equity Interests Equity
Balance at June 30, 2020 $ 1,962  735  $ $ 40,997  $ 2,707  $ (111) $ 10  $ (82) $ 45,484  $ 1,127  $ 46,611 
Net income (loss) —  —  —  —  1,265  —  —  —  1,265  (70) 1,195 
Other comprehensive (loss) income —  —  —  —  —  (79) (2) (80) —  (80)
Common stock issuances, including dividend reinvestment and employee benefits —  —  65  —  —  —  —  65  —  65 
Common stock dividends —  —  —  —  (712) —  —  —  (712) —  (712)
Contribution from noncontrolling interests, net of transaction costs(a)
—  —  —  (17) —  —  —  —  (17) 239  222 
Distributions to noncontrolling interest in subsidiaries —  —  —  —  —  —  —  —  —  (8) (8)
Other —  —  —  —  —  —  — 
Balance at September 30, 2020 $ 1,962  $ 736  $ $ 41,046  $ 3,260  $ (190) $ $ (81) $ 46,006  $ 1,289  $ 47,295 
Balance at June 30, 2021 $ 1,962  769  $ $ 43,788  $ 2,687  $ (234) $ $ (74) $ 48,132  $ 1,413  $ 49,545 
Net income (loss)         1,366        1,366  (129) 1,237 
Other comprehensive income (loss)           10  (2) 1  9  1  10 
Common stock issuances, including dividend reinvestment and employee benefits       20          20    20 
Common stock dividends         (760)       (760)   (760)
Sale of noncontrolling interest(c)
      545          545  454  999 
Contribution from noncontrolling interests, net of transaction costs(a)
      (3)         (3) 213  210 
Distributions to noncontrolling interest in subsidiaries                   (22) (22)
Other       (2)         (2) 3  1 
Balance at September 30, 2021 $ 1,962  $ 769  $ 1  $ 44,348  $ 3,293  $ (224) $   $ (73) $ 49,307  $ 1,933  $ 51,240 

See Notes to Condensed Consolidated Financial Statements
13

FINANCIAL STATEMENTS



DUKE ENERGY CORPORATION
Condensed Consolidated Statements of Changes in Equity
(Unaudited)
Nine Months Ended September 30, 2020 and 2021
Accumulated Other Comprehensive
 (Loss) Income
Net Unrealized Total
Net Gains Gains (Losses) Duke Energy
Common Additional (Losses) on on Available- Pension and Corporation
Preferred Stock Common Paid-in Retained Cash Flow for-Sale- OPEB Stockholders' Noncontrolling Total
(in millions) Stock Shares Stock Capital Earnings Hedges Securities Adjustments Equity Interests Equity
Balance at December 31, 2019 $ 1,962  733  $ $ 40,881  $ 4,108  $ (51) $ $ (82) $ 46,822  $ 1,129  $ 47,951 
Net income (loss) —  —  —  —  1,347  —  —  —  1,347  (208) 1,139 
Other comprehensive (loss) income —  —  —  —  —  (139) (133) (12) (145)
Common stock issuances, including dividend reinvestment and employee benefits —  —  181  —  —  —  —  181  —  181 
Common stock dividends —  —  —  —  (2,103) —  —  —  (2,103) —  (2,103)
Contributions from noncontrolling interests, net of transaction costs(a)
—  —  —  (17) —  —  —  —  (17) 402  385 
Distributions to noncontrolling interest in subsidiaries —  —  —  —  —  —  —  —  —  (22) (22)
Other(b)
—  —  —  (92) —  —  —  (91) —  (91)
Balance at September 30, 2020 $ 1,962  736  $ $ 41,046  $ 3,260  $ (190) $ $ (81) $ 46,006  $ 1,289  $ 47,295 
Balance at December 31, 2020 $ 1,962  769  $ $ 43,767  $ 2,471  $ (167) $ $ (76) $ 47,964  $ 1,220  $ 49,184 
Net income (loss)         3,070        3,070  (247) 2,823 
Other comprehensive (loss) income           (57) (6) 3  (60) 7  (53)
Common stock issuances, including dividend reinvestment and employee benefits       43          43    43 
Common stock dividends         (2,248)       (2,248)   (2,248)
Sale of noncontrolling interest(c)
      545          545  454  999 
Contributions from noncontrolling interests, net of transaction costs(a)
      (6)         (6) 531  525 
Distributions to noncontrolling interest in subsidiaries                   (34) (34)
Other       (1)         (1) 2  1 
Balance at September 30, 2021 $ 1,962  769  $ 1  $ 44,348  $ 3,293  $ (224) $   $ (73) $ 49,307  $ 1,933  $ 51,240 
(a)Relates to tax equity financing activity in the Commercial Renewables segment.
(b)Amounts in Retained earnings primarily represent impacts due to implementation of a new accounting standard related to Current Estimated Credit Losses. See Note 1 for additional discussion.
(c)Relates to the sale of a noncontrolling interest in Duke Energy Indiana. See Note 2 for additional discussion.
See Notes to Condensed Consolidated Financial Statements
14

FINANCIAL STATEMENTS

DUKE ENERGY CAROLINAS, LLC
Condensed Consolidated Statements of Operations and Comprehensive Income
(Unaudited)
Three Months Ended Nine Months Ended
September 30, September 30,
(in millions) 2021 2020 2021 2020
Operating Revenues $ 2,104  $ 2,058  $ 5,430  $ 5,416 
Operating Expenses
Fuel used in electric generation and purchased power 452  497  1,218  1,326 
Operation, maintenance and other 471  402  1,347  1,218 
Depreciation and amortization 366  372  1,088  1,090 
Property and other taxes 91  57  248  213 
Impairment of assets and other charges 163  20  238  22 
Total operating expenses 1,543  1,348  4,139  3,869 
(Losses) Gains on Sales of Other Assets and Other, net (1) 1 
Operating Income 560  711  1,292  1,548 
Other Income and Expenses, net 126  42  218  128 
Interest Expense 137  122  400  370 
Income Before Income Taxes 549  631  1,110  1,306 
Income Tax Expense 16  76  40  178 
Net Income and Comprehensive Income $ 533  $ 555  $ 1,070  $ 1,128 

See Notes to Condensed Consolidated Financial Statements
15

FINANCIAL STATEMENTS
DUKE ENERGY CAROLINAS, LLC
Condensed Consolidated Balance Sheets
(Unaudited)
(in millions) September 30, 2021 December 31, 2020
ASSETS
Current Assets
Cash and cash equivalents $ 21  $ 21 
Receivables (net of allowance for doubtful accounts of $2 at 2021 and $1 at 2020)
278  247 
Receivables of VIEs (net of allowance for doubtful accounts of $40 at 2021 and $22 at 2020)
915  696 
Receivables from affiliated companies 85  124 
Inventory 969  1,010 
Regulatory assets 460  473 
Other 104  20 
Total current assets 2,832  2,591 
Property, Plant and Equipment
Cost 51,790  50,640 
Accumulated depreciation and amortization (17,959) (17,453)
Facilities to be retired, net 89  — 
Net property, plant and equipment 33,920  33,187 
Other Noncurrent Assets
Regulatory assets 2,743  2,996 
Nuclear decommissioning trust funds 5,434  4,977 
Operating lease right-of-use assets, net 95  110 
Other 1,197  1,187 
Total other noncurrent assets 9,469  9,270 
Total Assets $ 46,221  $ 45,048 
LIABILITIES AND EQUITY
Current Liabilities
Accounts payable $ 673  $ 1,000 
Accounts payable to affiliated companies 184  199 
Notes payable to affiliated companies 86  506 
Taxes accrued 391  76 
Interest accrued 137  117 
Current maturities of long-term debt 357  506 
Asset retirement obligations 245  264 
Regulatory liabilities 503  473 
Other 516  546 
Total current liabilities 3,092  3,687 
Long-Term Debt 12,318  11,412 
Long-Term Debt Payable to Affiliated Companies 300  300 
Other Noncurrent Liabilities
Deferred income taxes 3,893  3,842 
Asset retirement obligations 5,134  5,086 
Regulatory liabilities 6,867  6,535 
Operating lease liabilities 83  97 
Accrued pension and other post-retirement benefit costs 64  73 
Investment tax credits 288  236 
Other 558  626 
Total other noncurrent liabilities 16,887  16,495 
Commitments and Contingencies
Equity
Member's equity 13,631  13,161 
Accumulated other comprehensive loss (7) (7)
Total equity 13,624  13,154 
Total Liabilities and Equity $ 46,221  $ 45,048 

See Notes to Condensed Consolidated Financial Statements
16

FINANCIAL STATEMENTS
DUKE ENERGY CAROLINAS, LLC
Condensed Consolidated Statements of Cash Flows
(Unaudited)
Nine Months Ended
September 30,
(in millions) 2021 2020
CASH FLOWS FROM OPERATING ACTIVITIES
Net income $ 1,070  $ 1,128 
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation and amortization (including amortization of nuclear fuel) 1,295  1,295 
Equity component of AFUDC (46) (46)
Loss on sales of other assets (1) — 
Impairment of assets and other charges 238  22 
Deferred income taxes (146) (103)
Payments for asset retirement obligations (132) (127)
Provision for rate refunds (29) (1)
(Increase) decrease in
Net realized and unrealized mark-to-market and hedging transactions (1) — 
Receivables (172) 41 
Receivables from affiliated companies 39  50 
Inventory 41 
Other current assets (153) 197 
Increase (decrease) in
Accounts payable (254) (313)
Accounts payable to affiliated companies (15) (55)
Taxes accrued 315  352 
Other current liabilities 72  (121)
Other assets 52  (72)
Other liabilities 167  (23)
Net cash provided by operating activities 2,340  2,228 
CASH FLOWS FROM INVESTING ACTIVITIES
Capital expenditures (1,947) (1,931)
Purchases of debt and equity securities (2,465) (1,313)
Proceeds from sales and maturities of debt and equity securities 2,465  1,313 
Notes receivable from affiliated companies   (65)
Other (122) (105)
Net cash used in investing activities (2,069) (2,101)
CASH FLOWS FROM FINANCING ACTIVITIES
Proceeds from the issuance of long-term debt 1,367  965 
Payments for the redemption of long-term debt (616) (457)
Notes payable to affiliated companies (421) (29)
Distributions to parent (600) (600)
Other (1) (1)
Net cash used in financing activities (271) (122)
Net increase in cash and cash equivalents  
Cash and cash equivalents at beginning of period 21  18 
Cash and cash equivalents at end of period $ 21  $ 23 
Supplemental Disclosures:
Significant non-cash transactions:
Accrued capital expenditures $ 308  $ 295 

See Notes to Condensed Consolidated Financial Statements
17

FINANCIAL STATEMENTS
DUKE ENERGY CAROLINAS, LLC
Condensed Consolidated Statements of Changes in Equity
(Unaudited)
Three Months Ended September 30, 2020 and 2021
Accumulated Other
Comprehensive
Loss
Member's Net Losses on Total
(in millions) Equity Cash Flow Hedges Equity
Balance at June 30, 2020 $ 13,079  $ (7) $ 13,072 
Net income 555  —  555 
Distributions to parent (300) —  (300)
Other (1) —  (1)
Balance at September 30, 2020 $ 13,333  $ (7) $ 13,326 
Balance at June 30, 2021 $ 13,399  $ (7) $ 13,392 
Net income 533    533 
Distributions to parent (300)   (300)
Other (1)   (1)
Balance at September 30, 2021 $ 13,631  $ (7) $ 13,624 
Nine Months Ended September 30, 2020 and 2021
Accumulated Other
Comprehensive
Loss
Member's Net Losses on Total
(in millions) Equity Cash Flow Hedges Equity
Balance at December 31, 2019 $ 12,818  $ (7) $ 12,811 
Net income 1,128  —  1,128 
Distributions to parent (600) —  (600)
Other(a)
(13) —  (13)
Balance at September 30, 2020 $ 13,333  $ (7) $ 13,326 
Balance at December 31, 2020 $ 13,161  $ (7) $ 13,154 
Net income 1,070    1,070 
Distributions to parent (600)   (600)
Balance at September 30, 2021 $ 13,631  $ (7) $ 13,624 
(a)Amounts primarily represent impacts due to implementation of a new accounting standard related to Current Estimated Credit Losses. See Note 1 for additional discussion.
See Notes to Condensed Consolidated Financial Statements
18

FINANCIAL STATEMENTS

PROGRESS ENERGY, INC.
Condensed Consolidated Statements of Operations and Comprehensive Income
(Unaudited)
Three Months Ended Nine Months Ended
September 30, September 30,
(in millions) 2021 2020 2021 2020
Operating Revenues $ 3,233  $ 3,197  $ 8,417  $ 8,117 
Operating Expenses
Fuel used in electric generation and purchased power 1,074  1,088  2,702  2,628 
Operation, maintenance and other 636  646  1,863  1,789 
Depreciation and amortization 504  472  1,430  1,356 
Property and other taxes 144  147  419  419 
Impairment of assets and other charges 42  79 
Total operating expenses 2,400  2,354  6,493  6,193 
Gains on Sales of Other Assets and Other, net 8  9 
Operating Income 841  846  1,933  1,933 
Other Income and Expenses, net 86  24  167  89 
Interest Expense 200  194  592  599 
Income Before Income Taxes 727  676  1,508  1,423 
Income Tax Expense 94  70  174  190 
Net Income 633  606  $ 1,334  $ 1,233 
Less: Net Income Attributable to Noncontrolling Interests 1  1 
Net Income Attributable to Parent $ 632  $ 605  $ 1,333  $ 1,232 
Net Income $ 633  $ 606  $ 1,334  $ 1,233 
Other Comprehensive Income, net of tax
Pension and OPEB adjustments (1) —   
Net unrealized gains on cash flow hedges 1  2 
Unrealized gains on available-for-sale securities    
Other Comprehensive Income, net of tax   2 
Comprehensive Income 633  608  $ 1,336  $ 1,238 
Less: Comprehensive Income Attributable to Noncontrolling Interests 1  1 
Comprehensive Income Attributable to Parent $ 632  $ 607  $ 1,335  $ 1,237 

See Notes to Condensed Consolidated Financial Statements
19

FINANCIAL STATEMENTS
PROGRESS ENERGY, INC.
Condensed Consolidated Balance Sheets
(Unaudited)
(in millions) September 30, 2021 December 31, 2020
ASSETS
Current Assets
Cash and cash equivalents $ 102  $ 59 
Receivables (net of allowance for doubtful accounts of $11 at 2021 and $8 at 2020)
268  228 
Receivables of VIEs (net of allowance for doubtful accounts of $25 at 2021 and $29 at 2020)
981  901 
Receivables from affiliated companies 61  157 
Inventory 1,255  1,375 
Regulatory assets (includes $54 at 2021 and $53 at 2020 related to VIEs)
864  758 
Other (includes $17 at 2021 and $39 at 2020 related to VIEs)
178  109 
Total current assets 3,709  3,587 
Property, Plant and Equipment
Cost 59,976  57,892 
Accumulated depreciation and amortization (19,211) (18,368)
Facilities to be retired, net 27  29 
Net property, plant and equipment 40,792  39,553 
Other Noncurrent Assets
Goodwill 3,655  3,655 
Regulatory assets (includes $896 at 2021 and $937 at 2020 related to VIEs)
5,785  5,775 
Nuclear decommissioning trust funds 4,427  4,137 
Operating lease right-of-use assets, net 714  690 
Other 1,175  1,227 
Total other noncurrent assets 15,756  15,484 
Total Assets $ 60,257  $ 58,624 
LIABILITIES AND EQUITY
Current Liabilities
Accounts payable $ 898  $ 919 
Accounts payable to affiliated companies 221  289 
Notes payable to affiliated companies 3,123  2,969 
Taxes accrued 284  121 
Interest accrued 175  202 
Current maturities of long-term debt (includes $56 at 2021 and $305 at 2020 related to VIEs)
1,932  1,426 
Asset retirement obligations 234  283 
Regulatory liabilities 541  640 
Other 856  793 
Total current liabilities 8,264  7,642 
Long-Term Debt (includes $1,546 at 2021 and $1,252 at 2020 related to VIEs)
17,406  17,688 
Long-Term Debt Payable to Affiliated Companies 150  150 
Other Noncurrent Liabilities
Deferred income taxes 4,784  4,396 
Asset retirement obligations 5,850  5,866 
Regulatory liabilities 5,335  5,051 
Operating lease liabilities 623  623 
Accrued pension and other post-retirement benefit costs 490  505 
Other 473  462 
Total other noncurrent liabilities 17,555  16,903 
Commitments and Contingencies
Equity
Common Stock, $0.01 par value, 100 shares authorized and outstanding at 2021 and 2020
  — 
Additional paid-in capital 9,149  9,143 
Retained earnings 7,743  7,109 
Accumulated other comprehensive loss (13) (15)
Total Progress Energy, Inc. stockholders' equity 16,879  16,237 
Noncontrolling interests 3 
Total equity 16,882  16,241 
Total Liabilities and Equity $ 60,257  $ 58,624 
See Notes to Condensed Consolidated Financial Statements
20

FINANCIAL STATEMENTS
PROGRESS ENERGY, INC.
Condensed Consolidated Statements of Cash Flows
(Unaudited)
Nine Months Ended
September 30,
(in millions) 2021 2020
CASH FLOWS FROM OPERATING ACTIVITIES
Net income $ 1,334  $ 1,233 
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation, amortization and accretion (including amortization of nuclear fuel) 1,707  1,734 
Equity component of AFUDC (37) (30)
Impairment of assets and other charges 79 
Deferred income taxes 235  (3)
Payments for asset retirement obligations (206) (287)
Provision for rate refunds (22)
(Increase) decrease in
Net realized and unrealized mark-to-market and hedging transactions 117  (13)
Receivables (123) (207)
Receivables from affiliated companies 96  32 
Inventory 120  46 
Other current assets (347) 214 
Increase (decrease) in
Accounts payable 79  (124)
Accounts payable to affiliated companies (68) (102)
Taxes accrued 161  263 
Other current liabilities (36) (41)
Other assets (3) (154)
Other liabilities (139) (102)
Net cash provided by operating activities 2,947  2,464 
CASH FLOWS FROM INVESTING ACTIVITIES
Capital expenditures (2,628) (2,602)
Purchases of debt and equity securities (1,583) (4,554)
Proceeds from sales and maturities of debt and equity securities 1,649  4,543 
Notes receivable from affiliated companies   164 
Other (131) (114)
Net cash used in investing activities (2,693) (2,563)
CASH FLOWS FROM FINANCING ACTIVITIES
Proceeds from the issuance of long-term debt 1,190  1,791 
Payments for the redemption of long-term debt (977) (1,555)
Notes payable to affiliated companies 154  338 
Dividends to parent (700) (400)
Other (2) (13)
Net cash (used in) provided by financing activities (335) 161 
Net (decrease) increase in cash, cash equivalents and restricted cash (81) 62 
Cash, cash equivalents and restricted cash at beginning of period 200  126 
Cash, cash equivalents and restricted cash at end of period $ 119  $ 188 
Supplemental Disclosures:
Significant non-cash transactions:
Accrued capital expenditures $ 290  $ 311 
See Notes to Condensed Consolidated Financial Statements
21

FINANCIAL STATEMENTS

PROGRESS ENERGY, INC.
Condensed Consolidated Statements of Changes in Equity
(Unaudited)
Three Months Ended September 30, 2020 and 2021
Accumulated Other Comprehensive Loss
Net Gains Net Unrealized Total Progress
Additional (Losses) on Gains (Losses) on Pension and Energy, Inc.
Paid-in Retained Cash Flow Available-for- OPEB Stockholders' Noncontrolling Total
(in millions) Capital Earnings Hedges Sale Securities Adjustments Equity Interests Equity
Balance at June 30, 2020 $ 9,143  $ 7,090  $ (8) $ (1) $ (6) $ 16,218  $ $ 16,221 
Net income —  605  —  —  —  605  606 
Other comprehensive income —  —  —  — 
Dividends to parent —  (400) —  —  —  (400) —  (400)
Other —  —  —  —  (1) — 
Balance at September 30, 2020 $ 9,143  $ 7,296  $ (7) $ —  $ (6) $ 16,426  $ $ 16,429 
Balance at June 30, 2021 $ 9,143  $ 7,809  $ (4) $ (2) $ (7) $ 16,939  $ $ 16,942 
Net income   632        632  1  633 
Other comprehensive income (loss)     1    (1)      
Dividends to parent   (700)       (700)   (700)
Other 6  2        8  (1) 7 
Balance at September 30, 2021 $ 9,149  $ 7,743  $ (3) $ (2) $ (8) $ 16,879  $ 3  $ 16,882 
Nine Months Ended September 30, 2020 and 2021
Accumulated Other Comprehensive Loss
Net Gains Net Unrealized Total Progress
Additional (Losses) on Gains (Losses) on Pension and Energy, Inc.
Paid-in Retained Cash Flow Available-for- OPEB Stockholders' Noncontrolling Total
Capital Earnings Hedges Sale Securities Adjustments Equity Interests Equity
Balance at December 31, 2019 $ 9,143  $ 6,465  $ (10) $ (1) $ (7) $ 15,590  $ $ 15,593 
Net income —  1,232  —  —  —  1,232  1,233 
Other comprehensive income —  —  — 
Distributions to noncontrolling interests —  —  —  —  —  —  (1) (1)
Dividends to parent —  (400) —  —  —  (400) —  (400)
Other —  (1) —  —  —  (1) —  (1)
Balance at September 30, 2020 $ 9,143  $ 7,296  $ (7) $ —  $ (6) $ 16,426  $ $ 16,429 
Balance at December 31, 2020 $ 9,143  $ 7,109  $ (5) $ (2) $ (8) $ 16,237  $ $ 16,241 
Net income   1,333        1,333  1  1,334 
Other comprehensive income     2      2    2 
Distributions to noncontrolling interests             (1) (1)
Dividends to parent   (700)       (700)   (700)
Other 6  1        7  (1) 6 
Balance at September 30, 2021 $ 9,149  $ 7,743  $ (3) $ (2) $ (8) $ 16,879  $ 3  $ 16,882 
See Notes to Condensed Consolidated Financial Statements
22

FINANCIAL STATEMENTS

DUKE ENERGY PROGRESS, LLC
Condensed Consolidated Statements of Operations and Comprehensive Income
(Unaudited)
Three Months Ended Nine Months Ended
September 30, September 30,
(in millions) 2021 2020 2021 2020
Operating Revenues $ 1,667  $ 1,626  $ 4,417  $ 4,207 
Operating Expenses
Fuel used in electric generation and purchased power 523  537  1,368  1,337 
Operation, maintenance and other 368  348  1,092  970 
Depreciation and amortization 290  289  811  833 
Property and other taxes 39  38  129  129 
Impairment of assets and other charges 42  60 
Total operating expenses 1,262  1,217  3,460  3,274 
Gains on Sales of Other Assets and Other, net 7  8 
Operating Income 412  412  965  941 
Other Income and Expenses, net 67  11  111  52 
Interest Expense 79  66  226  203 
Income Before Income Taxes 400  357  850  790 
Income Tax Expense 25  11  50  79 
Net Income and Comprehensive Income $ 375  $ 346  $ 800  $ 711 

See Notes to Condensed Consolidated Financial Statements
23

FINANCIAL STATEMENTS
DUKE ENERGY PROGRESS, LLC
Condensed Consolidated Balance Sheets
(Unaudited)
(in millions) September 30, 2021 December 31, 2020
ASSETS
Current Assets
Cash and cash equivalents $ 51  $ 39 
Receivables (net of allowance for doubtful accounts of $4 at 2021 and 2020)
162  132 
Receivables of VIEs (net of allowance for doubtful accounts of $17 at 2021 and $19 at 2020)
532  500 
Receivables from affiliated companies 68  50 
Inventory 815  911 
Regulatory assets 499  492 
Other 116  60 
Total current assets 2,243  2,184 
Property, Plant and Equipment
Cost 36,666  35,759 
Accumulated depreciation and amortization (13,365) (12,801)
Facilities to be retired, net 27  29 
Net property, plant and equipment 23,328  22,987 
Other Noncurrent Assets
Regulatory assets 3,955  3,976 
Nuclear decommissioning trust funds 3,857  3,500 
Operating lease right-of-use assets, net 402  346 
Other 772  740 
Total other noncurrent assets 8,986  8,562 
Total Assets $ 34,557  $ 33,733 
LIABILITIES AND EQUITY
Current Liabilities
Accounts payable $ 392  $ 454 
Accounts payable to affiliated companies 113  215 
Notes payable to affiliated companies 117  295 
Taxes accrued 163  85 
Interest accrued 68  99 
Current maturities of long-term debt 1,207  603 
Asset retirement obligations 234  283 
Regulatory liabilities 439  530 
Other 442  411 
Total current liabilities 3,175  2,975 
Long-Term Debt 8,491  8,505 
Long-Term Debt Payable to Affiliated Companies 150  150 
Other Noncurrent Liabilities
Deferred income taxes 2,488  2,298 
Asset retirement obligations 5,407  5,352 
Regulatory liabilities 4,685  4,394 
Operating lease liabilities 359  323 
Accrued pension and other post-retirement benefit costs 234  242 
Investment tax credits 129  132 
Other 79  102 
Total other noncurrent liabilities 13,381  12,843 
Commitments and Contingencies
Equity
Member's Equity 9,360  9,260 
Total Liabilities and Equity $ 34,557  $ 33,733 

See Notes to Condensed Consolidated Financial Statements
24

FINANCIAL STATEMENTS
DUKE ENERGY PROGRESS, LLC
Condensed Consolidated Statements of Cash Flows
(Unaudited)
Nine Months Ended
September 30,
(in millions) 2021 2020
CASH FLOWS FROM OPERATING ACTIVITIES
Net income $ 800  $ 711 
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation and amortization (including amortization of nuclear fuel) 951  972 
Equity component of AFUDC (25) (22)
Impairment of assets and other charges 60 
Deferred income taxes 22  (33)
Payments for asset retirement obligations (129) (249)
Provision for rate refunds (22)
(Increase) decrease in
Net realized and unrealized mark-to-market and hedging transactions 108  — 
Receivables (66) (34)
Receivables from affiliated companies (18)
Inventory 95  24 
Other current assets (79) 82 
Increase (decrease) in
Accounts payable 20  (185)
Accounts payable to affiliated companies (102) (59)
Taxes accrued 75  190 
Other current liabilities (36) (24)
Other assets 48  (185)
Other liabilities (32) 21 
Net cash provided by operating activities 1,670  1,225 
CASH FLOWS FROM INVESTING ACTIVITIES
Capital expenditures (1,313) (1,142)
Purchases of debt and equity securities (1,306) (1,269)
Proceeds from sales and maturities of debt and equity securities 1,291  1,238 
Other (36) (31)
Net cash used in investing activities (1,364) (1,204)
CASH FLOWS FROM FINANCING ACTIVITIES
Proceeds from the issuance of long-term debt 1,190  1,296 
Payments for the redemption of long-term debt (605) (985)
Notes payable to affiliated companies (178) 101 
Distributions to parent (700) (400)
Other (1) (12)
Net cash used in financing activities (294) — 
Net increase in cash and cash equivalents 12  21 
Cash and cash equivalents at beginning of period 39  22 
Cash and cash equivalents at end of period $ 51  $ 43 
Supplemental Disclosures:
Significant non-cash transactions:
Accrued capital expenditures $ 82  $ 124 

See Notes to Condensed Consolidated Financial Statements
25

FINANCIAL STATEMENTS
DUKE ENERGY PROGRESS, LLC
Condensed Consolidated Statements of Changes in Equity
(Unaudited)
Three Months Ended
September 30, 2020 and 2021
(in millions) Member's Equity
Balance at June 30, 2020 $ 9,610 
Net income 346 
Distributions to parent (400)
Balance at September 30, 2020 $ 9,556 
Balance at June 30, 2021 $ 9,685 
Net income 375 
Distributions to parent (700)
Balance at September 30, 2021 $ 9,360 
Nine Months Ended
September 30, 2020 and 2021
(in millions) Member's Equity
Balance at December 31, 2019 $ 9,246 
Net income 711 
Distributions to parent (400)
Other (1)
Balance at September 30, 2020 $ 9,556 
Balance at December 31, 2020 $ 9,260 
Net income 800 
Distributions to parent (700)
Balance at September 30, 2021 $ 9,360 

See Notes to Condensed Consolidated Financial Statements
26

FINANCIAL STATEMENTS

DUKE ENERGY FLORIDA, LLC
Condensed Consolidated Statements of Operations and Comprehensive Income
(Unaudited)
Three Months Ended Nine Months Ended
September 30, September 30,
(in millions) 2021 2020 2021 2020
Operating Revenues $ 1,561  $ 1,567  $ 3,987  $ 3,897 
Operating Expenses
Fuel used in electric generation and purchased power 552  551  1,335  1,291 
Operation, maintenance and other 263  292  760  806 
Depreciation and amortization 214  183  619  523 
Property and other taxes 105  110  290  290 
Impairment of assets and other charges   (4) 19  (4)
Total operating expenses 1,134  1,132  3,023  2,906 
Gains on Sales of Other Assets and Other, net 1  —  1  — 
Operating Income 428  435  965  991 
Other Income and Expenses, net 18  11  54  36 
Interest Expense 79  81  239  245 
Income Before Income Taxes 367  365  780  782 
Income Tax Expense 70  78  149  159 
Net Income $ 297  $ 287  $ 631  $ 623 
Other Comprehensive Income, net of tax
Unrealized gains on available-for-sale securities    
Comprehensive Income $ 297  $ 288  $ 631  $ 624 

See Notes to Condensed Consolidated Financial Statements
27

FINANCIAL STATEMENTS
DUKE ENERGY FLORIDA, LLC
Condensed Consolidated Balance Sheets
(Unaudited)
(in millions) September 30, 2021 December 31, 2020
ASSETS
Current Assets
Cash and cash equivalents $ 40  $ 11 
Receivables (net of allowance for doubtful accounts of $8 at 2021 and $4 at 2020)
104  94 
Receivables of VIEs (net of allowance for doubtful accounts of $8 at 2021 and $10 at 2020)
449  401 
Receivables from affiliated companies 3 
Inventory 439  464 
Regulatory assets (includes $54 at 2021 and $53 at 2020 related to VIEs)
365  265 
Other (includes $17 at 2021 and $39 at 2020 related to VIEs)
35  41 
Total current assets 1,435  1,279 
Property, Plant and Equipment
Cost 23,300  22,123 
Accumulated depreciation and amortization (5,839) (5,560)
Net property, plant and equipment 17,461  16,563 
Other Noncurrent Assets
Regulatory assets (includes $896 at 2021 and $937 at 2020 related to VIEs)
1,829  1,799 
Nuclear decommissioning trust funds 570  637 
Operating lease right-of-use assets, net 312  344 
Other 351  335 
Total other noncurrent assets 3,062  3,115 
Total Assets $ 21,958  $ 20,957 
LIABILITIES AND EQUITY
Current Liabilities
Accounts payable $ 506  $ 465 
Accounts payable to affiliated companies 129  85 
Notes payable to affiliated companies 603  196 
Taxes accrued 177  82 
Interest accrued 72  69 
Current maturities of long-term debt (includes $56 at 2021 and $305 at 2020 related to VIEs)
276  823 
Regulatory liabilities 102  110 
Other 403  374 
Total current liabilities 2,268  2,204 
Long-Term Debt (includes $1,196 at 2021 and $1,002 at 2020 related to VIEs)
7,273  7,092 
Other Noncurrent Liabilities
Deferred income taxes 2,382  2,191 
Asset retirement obligations 443  514 
Regulatory liabilities 649  658 
Operating lease liabilities 265  300 
Accrued pension and other post-retirement benefit costs 225  231 
Other 265  209 
Total other noncurrent liabilities 4,229  4,103 
Commitments and Contingencies
Equity
Member's equity 8,190  7,560 
Accumulated other comprehensive loss (2) (2)
Total equity 8,188  7,558 
Total Liabilities and Equity $ 21,958  $ 20,957 

See Notes to Condensed Consolidated Financial Statements
28

FINANCIAL STATEMENTS
DUKE ENERGY FLORIDA, LLC
Condensed Consolidated Statements of Cash Flows
(Unaudited)
Nine Months Ended
September 30,
(in millions) 2021 2020
CASH FLOWS FROM OPERATING ACTIVITIES
Net income $ 631  $ 623 
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation, amortization and accretion 752  755 
Equity component of AFUDC (12) (8)
Impairment of assets and other charges 19  (4)
Deferred income taxes 207  19 
Payments for asset retirement obligations (77) (38)
(Increase) decrease in
Net realized and unrealized mark-to-market and hedging transactions 7  (17)
Receivables (57) (172)
Receivables from affiliated companies   (3)
Inventory 25  22 
Other current assets (247) 41 
Increase (decrease) in
Accounts payable 59  63 
Accounts payable to affiliated companies 44  (54)
Taxes accrued 95  217 
Other current liabilities (5) (20)
Other assets (46) 48 
Other liabilities (94) (136)
Net cash provided by operating activities 1,301  1,336 
CASH FLOWS FROM INVESTING ACTIVITIES
Capital expenditures (1,316) (1,460)
Purchases of debt and equity securities (277) (3,284)
Proceeds from sales and maturities of debt and equity securities 358  3,305 
Notes receivable from affiliated companies   173 
Other (95) (82)
Net cash used in investing activities (1,330) (1,348)
CASH FLOWS FROM FINANCING ACTIVITIES
Proceeds from the issuance of long-term debt   495 
Payments for the redemption of long-term debt (372) (570)
Notes payable to affiliated companies 408  66 
Net cash provided by (used in) financing activities 36  (9)
Net increase (decrease) in cash, cash equivalents and restricted cash 7  (21)
Cash, cash equivalents and restricted cash at beginning of period 50  56 
Cash, cash equivalents and restricted cash at end of period $ 57  $ 35 
Supplemental Disclosures:
Significant non-cash transactions:
Accrued capital expenditures $ 208  $ 187 

See Notes to Condensed Consolidated Financial Statements
29

FINANCIAL STATEMENTS
DUKE ENERGY FLORIDA, LLC
Condensed Consolidated Statements of Changes in Equity
(Unaudited)
Three Months Ended September 30, 2020 and 2021
Accumulated
Other
Comprehensive
Income (Loss)
Net Unrealized
Losses on
Member's Available-for-Sale Total
(in millions) Equity Securities Equity
Balance at June 30, 2020 $ 7,125  $ (1) $ 7,124 
Net income 287  —  287 
Other comprehensive income — 
Other (1) —  (1)
Balance at September 30, 2020 $ 7,411  $ —  $ 7,411 
Balance at June 30, 2021 $ 7,893  $ (2) $ 7,891 
Net income 297    297 
Balance at September 30, 2021 $ 8,190  $ (2) $ 8,188 
Nine Months Ended September 30, 2020 and 2021
Accumulated
Other
Comprehensive
Income (Loss)
Net Unrealized
Losses on
Member's Available-for-Sale Total
(in millions) Equity Securities Equity
Balance at December 31, 2019 $ 6,789  $ (1) $ 6,788 
Net income 623  —  623 
Other comprehensive income — 
Other (1) —  (1)
Balance at September 30, 2020 $ 7,411  $ —  $ 7,411 
Balance at December 31, 2020 $ 7,560  $ (2) $ 7,558 
Net income 631    631 
Other (1)   (1)
Balance at September 30, 2021 $ 8,190  $ (2) $ 8,188 
See Notes to Condensed Consolidated Financial Statements
30

FINANCIAL STATEMENTS

DUKE ENERGY OHIO, INC.
Condensed Consolidated Statements of Operations and Comprehensive Income
(Unaudited)
Three Months Ended Nine Months Ended
September 30, September 30,
(in millions) 2021 2020 2021 2020
Operating Revenues
Regulated electric $ 413  $ 394  $ 1,119  $ 1,070 
Regulated natural gas 93  79  375  324 
Total operating revenues 506  473  1,494  1,394 
Operating Expenses
Fuel used in electric generation and purchased power 119  94  294  258 
Cost of natural gas 9  76  46 
Operation, maintenance and other 116  115  335  333 
Depreciation and amortization 79  72  228  208 
Property and other taxes 91  83  266  244 
Impairment of assets and other charges   —  5  — 
Total operating expenses 414  367  1,204  1,089 
Operating Income 92  106  290  305 
Other Income and Expenses, net 4  14  11 
Interest Expense 29  26  82  75 
Income Before Income Taxes 67  84  222  241 
Income Tax Expense 9  14  34  40 
Net Income and Comprehensive Income $ 58  $ 70  $ 188  $ 201 

See Notes to Condensed Consolidated Financial Statements
31

FINANCIAL STATEMENTS
DUKE ENERGY OHIO, INC.
Condensed Consolidated Balance Sheets
(Unaudited)
(in millions) September 30, 2021 December 31, 2020
ASSETS
Current Assets
Cash and cash equivalents $ 16  $ 14 
Receivables (net of allowance for doubtful accounts of $4 at 2021 and 2020)
107  98 
Receivables from affiliated companies 77  102 
Inventory 114  110 
Regulatory assets 61  39 
Other 45  31 
Total current assets 420  394 
Property, Plant and Equipment
Cost 11,531  11,022 
Accumulated depreciation and amortization (3,102) (3,013)
Net property, plant and equipment 8,429  8,009 
Other Noncurrent Assets
Goodwill 920  920 
Regulatory assets 634  610 
Operating lease right-of-use assets, net 19  20 
Other 83  72 
Total other noncurrent assets 1,656  1,622 
Total Assets $ 10,505  $ 10,025 
LIABILITIES AND EQUITY
Current Liabilities
Accounts payable $ 304  $ 279 
Accounts payable to affiliated companies 59  68 
Notes payable to affiliated companies 451  169 
Taxes accrued 210  247 
Interest accrued 32  31 
Current maturities of long-term debt 50  50 
Asset retirement obligations 17 
Regulatory liabilities 63  65 
Other 68  70 
Total current liabilities 1,254  982 
Long-Term Debt 3,017  3,014 
Long-Term Debt Payable to Affiliated Companies 25  25 
Other Noncurrent Liabilities
Deferred income taxes 1,032  981 
Asset retirement obligations 95  108 
Regulatory liabilities 734  748 
Operating lease liabilities 19  20 
Accrued pension and other post-retirement benefit costs 114  113 
Other 92  99 
Total other noncurrent liabilities 2,086  2,069 
Commitments and Contingencies
Equity
Common Stock, $8.50 par value, 120 million shares authorized; 90 million shares outstanding at 2021 and 2020
762  762 
Additional paid-in capital 2,776  2,776 
Retained earnings 585  397 
Total equity 4,123  3,935 
Total Liabilities and Equity $ 10,505  $ 10,025 

See Notes to Condensed Consolidated Financial Statements
32

FINANCIAL STATEMENTS
DUKE ENERGY OHIO, INC.
Condensed Consolidated Statements of Cash Flows
(Unaudited)
Nine Months Ended
September 30,
(in millions) 2021 2020
CASH FLOWS FROM OPERATING ACTIVITIES
Net income $ 188  $ 201 
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation and amortization 231  211 
Equity component of AFUDC (5) (4)
Impairment of assets and other charges 5  — 
Deferred income taxes 27  31 
Payments for asset retirement obligations (1) (1)
Provision for rate refunds 12  10 
(Increase) decrease in
Receivables (9) (5)
Receivables from affiliated companies (11) 35 
Inventory (4)
Other current assets (34)
Increase (decrease) in
Accounts payable 27  (28)
Accounts payable to affiliated companies (9) (14)
Taxes accrued (37) (23)
Other current liabilities (12)
Other assets (35) (24)
Other liabilities 8  (7)
Net cash provided by operating activities 341  398 
CASH FLOWS FROM INVESTING ACTIVITIES
Capital expenditures (615) (611)
Notes receivable from affiliated companies 36  — 
Other (42) (34)
Net cash used in investing activities (621) (645)
CASH FLOWS FROM FINANCING ACTIVITIES
Proceeds from the issuance of long-term debt   467 
Notes payable to affiliated companies 282  (227)
Net cash provided by financing activities 282  240 
Net increase (decrease) in cash and cash equivalents 2  (7)
Cash and cash equivalents at beginning of period 14  17 
Cash and cash equivalents at end of period $ 16  $ 10 
Supplemental Disclosures:
Significant non-cash transactions:
Accrued capital expenditures $ 103  $ 92 

See Notes to Condensed Consolidated Financial Statements
33

FINANCIAL STATEMENTS
DUKE ENERGY OHIO, INC.
Condensed Consolidated Statements of Changes in Equity
(Unaudited)
Three Months Ended September 30, 2020 and 2021
Additional
Common Paid-in Retained Total
(in millions) Stock Capital Earnings Equity
Balance at June 30, 2020 $ 762  $ 2,776  $ 276  $ 3,814 
Net income —  —  70  70 
Balance at September 30, 2020 $ 762  $ 2,776  $ 346  $ 3,884 
Balance at June 30, 2021 $ 762  $ 2,776  $ 527  $ 4,065 
Net income     58  58 
Balance at September 30, 2021 $ 762  $ 2,776  $ 585  $ 4,123 
Nine Months Ended September 30, 2020 and 2021
Additional
Common Paid-in Retained Total
(in millions) Stock Capital Earnings Equity
Balance at December 31, 2019 $ 762  $ 2,776  $ 145  $ 3,683 
Net income —  —  201  201 
Balance at September 30, 2020 $ 762  $ 2,776  $ 346  $ 3,884 
Balance at December 31, 2020 $ 762  $ 2,776  $ 397  $ 3,935 
Net income     188  188 
Balance at September 30, 2021 $ 762  $ 2,776  $ 585  $ 4,123 
See Notes to Condensed Consolidated Financial Statements
34

FINANCIAL STATEMENTS

DUKE ENERGY INDIANA, LLC
Condensed Consolidated Statements of Operations and Comprehensive Income
(Unaudited)
Three Months Ended Nine Months Ended
September 30, September 30,
(in millions) 2021 2020 2021 2020
Operating Revenues $ 886  $ 761  $ 2,366  $ 2,070 
Operating Expenses
Fuel used in electric generation and purchased power 292  222  710  577 
Operation, maintenance and other 173  207  543  564 
Depreciation and amortization 154  149  458  415 
Property and other taxes 16  15  57  57 
Impairment of assets and other charges   —  8  — 
Total operating expenses 635  593  1,776  1,613 
Gains on Sales of Other Assets and Other, net 1  —    — 
Operating Income 252  168  590  457 
Other Income and Expenses, net 12  31  28 
Interest Expense 49  29  148  114 
Income Before Income Taxes 215  148  473  371 
Income Tax Expense 34  29  77  72 
Net Income and Comprehensive Income $ 181  $ 119  $ 396  $ 299 

See Notes to Condensed Consolidated Financial Statements
35

FINANCIAL STATEMENTS
DUKE ENERGY INDIANA, LLC
Condensed Consolidated Balance Sheets
(Unaudited)
(in millions) September 30, 2021 December 31, 2020
ASSETS
Current Assets
Cash and cash equivalents $ 14  $
Receivables (net of allowance for doubtful accounts of $3 at 2021 and 2020)
81  55 
Receivables from affiliated companies 62  112 
Notes receivable from affiliated companies 252  — 
Inventory 367  473 
Regulatory assets 196  125 
Other 59  37 
Total current assets 1,031  809 
Property, Plant and Equipment
Cost 17,320  17,382 
Accumulated depreciation and amortization (5,550) (5,661)
Net property, plant and equipment 11,770  11,721 
Other Noncurrent Assets
Regulatory assets 1,300  1,203 
Operating lease right-of-use assets, net 51  55 
Other 276  253 
Total other noncurrent assets 1,627  1,511 
Total Assets $ 14,428  $ 14,041 
LIABILITIES AND EQUITY
Current Liabilities
Accounts payable $ 239  $ 188 
Accounts payable to affiliated companies 198  88 
Notes payable to affiliated companies   131 
Taxes accrued 83  62 
Interest accrued 59  51 
Current maturities of long-term debt 151  70 
Asset retirement obligations 177  168 
Regulatory liabilities 147  111 
Other 104  83 
Total current liabilities 1,158  952 
Long-Term Debt 3,791  3,871 
Long-Term Debt Payable to Affiliated Companies 150  150 
Other Noncurrent Liabilities
Deferred income taxes 1,289  1,228 
Asset retirement obligations 966  1,008 
Regulatory liabilities 1,573  1,627 
Operating lease liabilities 49  53 
Accrued pension and other post-retirement benefit costs 172  171 
Investment tax credits 172  168 
Other 53  30 
Total other noncurrent liabilities 4,274  4,285 
Commitments and Contingencies
Equity
Member's Equity 5,055  4,783 
Total Liabilities and Equity $ 14,428  $ 14,041 

See Notes to Condensed Consolidated Financial Statements
36

FINANCIAL STATEMENTS
DUKE ENERGY INDIANA, LLC
Condensed Consolidated Statements of Cash Flows
(Unaudited)
Nine Months Ended
September 30,
(in millions) 2021 2020
CASH FLOWS FROM OPERATING ACTIVITIES
Net income $ 396  $ 299 
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation, amortization and accretion 460  416 
Equity component of AFUDC (19) (18)
Impairment of assets and other charges 8  — 
Deferred income taxes 19  11 
Payments for asset retirement obligations (49) (48)
(Increase) decrease in
Receivables (7) 15 
Receivables from affiliated companies 17  (5)
Inventory 106  10 
Other current assets (58) 12 
Increase (decrease) in
Accounts payable 46  (1)
Accounts payable to affiliated companies (15) (22)
Taxes accrued 25  65 
Other current liabilities 23  (2)
Other assets 11  (41)
Other liabilities 3  104 
Net cash provided by operating activities 966  795 
CASH FLOWS FROM INVESTING ACTIVITIES
Capital expenditures (584) (669)
Purchases of debt and equity securities (34) (24)
Proceeds from sales and maturities of debt and equity securities 16  15 
Notes receivable from affiliated companies (218) — 
Other (8) (24)
Net cash used in investing activities (828) (702)
CASH FLOWS FROM FINANCING ACTIVITIES
Proceeds from the issuance of long-term debt   544 
Payments for the redemption of long-term debt   (500)
Notes payable to affiliated companies (131) 53 
Distributions to parent   (200)
Net cash used in financing activities (131) (103)
Net increase (decrease) in cash and cash equivalents 7  (10)
Cash and cash equivalents at beginning of period 7  25 
Cash and cash equivalents at end of period $ 14  $ 15 
Supplemental Disclosures:
Significant non-cash transactions:
Accrued capital expenditures $ 105  $ 73 
See Notes to Condensed Consolidated Financial Statements
37

FINANCIAL STATEMENTS
DUKE ENERGY INDIANA, LLC
Condensed Consolidated Statements of Changes in Equity
(Unaudited)
Three Months Ended
September 30, 2020 and 2021
(in millions) Member's Equity
Balance at June 30, 2020 $ 4,655 
Net income 119 
Distributions to parent (100)
Balance at September 30, 2020 $ 4,674 
Balance at June 30, 2021 $ 4,999 
Net income 181 
Distributions to parent (125)
Balance at September 30, 2021 $ 5,055 
Nine Months Ended
September 30, 2020 and 2021
(in millions) Member's Equity
Balance at December 31, 2019 $ 4,575 
Net income 299 
Distributions to parent (200)
Balance at September 30, 2020 $ 4,674 
Balance at December 31, 2020 $ 4,783 
Net income 396 
Distributions to parent (125)
Other 1 
Balance at September 30, 2021 $ 5,055 

See Notes to Condensed Consolidated Financial Statements
38

FINANCIAL STATEMENTS

PIEDMONT NATURAL GAS COMPANY, INC.
Condensed Consolidated Statements of Operations and Comprehensive Income
(Unaudited)
Three Months Ended Nine Months Ended
September 30, September 30,
(in millions) 2021 2020 2021 2020
Operating Revenues $ 195  $ 162  $ 1,016  $ 871 
Operating Expenses
Cost of natural gas 66  39  354  254 
Operation, maintenance and other 77  75  231  234 
Depreciation and amortization 51  45  150  133 
Property and other taxes 16  13  44  37 
Impairment of assets and other charges 4  9 
Total operating expenses 214  179  788  665 
Operating (Loss) Income (19) (17) 228  206 
Other Income and Expenses, net 16  16  51  44 
Interest Expense 29  29  88  89 
(Loss) Income Before Income Taxes (32) (30) 191  161 
Income Tax (Benefit) Expense (8) (5) 16 
Net (Loss) Income and Comprehensive (Loss) Income $ (24) $ (25) $ 175  $ 155 

See Notes to Condensed Consolidated Financial Statements
39

FINANCIAL STATEMENTS
PIEDMONT NATURAL GAS COMPANY, INC.
Condensed Consolidated Balance Sheets
(Unaudited)
(in millions) September 30, 2021 December 31, 2020
ASSETS
Current Assets
Receivables (net of allowance for doubtful accounts of $15 at 2021 and $12 at 2020)
$ 96  $ 250 
Receivables from affiliated companies 11  10 
Inventory 68  68 
Regulatory assets 125  153 
Other 59  20 
Total current assets 359  501 
Property, Plant and Equipment
Cost 9,733  9,134 
Accumulated depreciation and amortization (1,862) (1,749)
Facilities to be retired, net 11  — 
Net property, plant and equipment 7,882  7,385 
Other Noncurrent Assets
Goodwill 49  49 
Regulatory assets 335  302 
Operating lease right-of-use assets, net 17  20 
Investments in equity method unconsolidated affiliates 100  88 
Other 282  270 
Total other noncurrent assets 783  729 
Total Assets $ 9,024  $ 8,615 
LIABILITIES AND EQUITY
Current Liabilities
Accounts payable $ 184  $ 230 
Accounts payable to affiliated companies 31  79 
Notes payable to affiliated companies 315  530 
Taxes accrued 41  23 
Interest accrued 35  34 
Current maturities of long-term debt   160 
Regulatory liabilities 64  88 
Other 76  69 
Total current liabilities 746  1,213 
Long-Term Debt 2,968  2,620 
Other Noncurrent Liabilities
Deferred income taxes 875  821 
Asset retirement obligations 21  20 
Regulatory liabilities 1,004  1,044 
Operating lease liabilities 15  19 
Accrued pension and other post-retirement benefit costs 6 
Other 175  155 
Total other noncurrent liabilities 2,096  2,067 
Commitments and Contingencies
Equity
Common stock, no par value: 100 shares authorized and outstanding at 2021 and 2020
1,635  1,310 
Retained earnings 1,579  1,405 
Total equity 3,214  2,715 
Total Liabilities and Equity $ 9,024  $ 8,615 

See Notes to Condensed Consolidated Financial Statements
40

FINANCIAL STATEMENTS
PIEDMONT NATURAL GAS COMPANY, INC.
Condensed Consolidated Statements of Cash Flows
(Unaudited)
Nine Months Ended
September 30,
(in millions) 2021 2020
CASH FLOWS FROM OPERATING ACTIVITIES
Net income $ 175  $ 155 
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation and amortization 152  135 
Equity component of AFUDC (19) (14)
Impairment of assets and other charges 10 
Deferred income taxes 10  24 
Equity in earnings from unconsolidated affiliates (7) (7)
Provision for rate refunds (3) (27)
(Increase) decrease in
Receivables 151  164 
Receivables from affiliated companies (1) (1)
Inventory   25 
Other current assets 7  (59)
Increase (decrease) in
Accounts payable (55) (53)
Accounts payable to affiliated companies (48) 60 
Taxes accrued 17  16 
Other current liabilities (32) (4)
Other assets 3  (14)
Other liabilities 2 
Net cash provided by operating activities 362  414 
CASH FLOWS FROM INVESTING ACTIVITIES
Capital expenditures (628) (641)
Contributions to equity method investments (9) — 
Return of investment capital 1  — 
Other (23) (18)
Net cash used in investing activities (659) (659)
CASH FLOWS FROM FINANCING ACTIVITIES
Proceeds from the issuance of long-term debt 347  394 
Payments for the redemption of long-term debt (160) — 
Notes payable to affiliated companies (215) (149)
Capital contributions from parent 325  — 
Net cash provided by financing activities 297  245 
Net increase in cash and cash equivalents   — 
Cash and cash equivalents at beginning of period   — 
Cash and cash equivalents at end of period $   $ — 
Supplemental Disclosures:
Significant non-cash transactions:
Accrued capital expenditures $ 115  $ 123 

See Notes to Condensed Consolidated Financial Statements
41

FINANCIAL STATEMENTS
PIEDMONT NATURAL GAS COMPANY, INC.
Condensed Consolidated Statements of Changes in Equity
(Unaudited)
Three Months Ended September 30, 2020 and 2021
Common Retained Total
(in millions) Stock Earnings Equity
Balance at June 30, 2020 $ 1,310  $ 1,312  $ 2,622 
Net loss —  (25) (25)
Balance at September 30, 2020 $ 1,310  $ 1,287  $ 2,597 
Balance at June 30, 2021 $ 1,635  $ 1,604  $ 3,239 
Net loss   (24) (24)
Other   (1) (1)
Balance at September 30, 2021 $ 1,635  $ 1,579  $ 3,214 
Nine Months Ended September 30, 2020 and 2021
Common Retained Total
(in millions) Stock Earnings Equity
Balance at December 31, 2019 $ 1,310  $ 1,133  $ 2,443 
Net income —  155  155 
Other —  (1) (1)
Balance at September 30, 2020 $ 1,310  $ 1,287  $ 2,597 
Balance at December 31, 2020 $ 1,310  $ 1,405  $ 2,715 
Net income   175  175 
Contribution from parent 325    325 
Other   (1) (1)
Balance at September 30, 2021 $ 1,635  $ 1,579  $ 3,214 

See Notes to Condensed Consolidated Financial Statements
42

FINANCIAL STATEMENTS ORGANIZATION AND BASIS OF PRESENTATION

Index to Combined Notes to Condensed Consolidated Financial Statements
The unaudited notes to the Condensed Consolidated Financial Statements that follow are a combined presentation. The following list indicates the registrants to which the footnotes apply.
Applicable Notes
Registrant 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16
Duke Energy
Duke Energy Carolinas
Progress Energy
Duke Energy Progress
Duke Energy Florida
Duke Energy Ohio
Duke Energy Indiana
Piedmont
Tables within the notes may not sum across due to (i) Progress Energy's consolidation of Duke Energy Progress, Duke Energy Florida and other subsidiaries that are not registrants and (ii) subsidiaries that are not registrants but included in the consolidated Duke Energy balances.
1. ORGANIZATION AND BASIS OF PRESENTATION
BASIS OF PRESENTATION
These Condensed Consolidated Financial Statements have been prepared in accordance with GAAP for interim financial information and with the instructions to Form 10-Q and Regulation S-X. Accordingly, these Condensed Consolidated Financial Statements do not include all information and notes required by GAAP for annual financial statements and should be read in conjunction with the Consolidated Financial Statements in the Duke Energy Registrants’ combined Annual Report on Form 10-K for the year ended December 31, 2020.
The information in these combined notes relates to each of the Duke Energy Registrants as noted in the Index to Combined Notes to Condensed Consolidated Financial Statements. However, none of the registrants make any representations as to information related solely to Duke Energy or the subsidiaries of Duke Energy other than itself.
These Condensed Consolidated Financial Statements, in the opinion of the respective companies’ management, reflect all normal recurring adjustments necessary to fairly present the financial position and results of operations of each of the Duke Energy Registrants. Amounts reported in Duke Energy’s interim Condensed Consolidated Statements of Operations and each of the Subsidiary Registrants’ interim Condensed Consolidated Statements of Operations and Comprehensive Income are not necessarily indicative of amounts expected for the respective annual periods due to effects of seasonal temperature variations on energy consumption, regulatory rulings, timing of maintenance on electric generating units, changes in mark-to-market valuations, changing commodity prices and other factors.
In preparing financial statements that conform to GAAP, management must make estimates and assumptions that affect the reported amounts of assets and liabilities, the reported amounts of revenues and expenses and the disclosure of contingent assets and liabilities at the date of the financial statements. Actual results could differ from those estimates.
BASIS OF CONSOLIDATION
These Condensed Consolidated Financial Statements include, after eliminating intercompany transactions and balances, the accounts of the Duke Energy Registrants and subsidiaries or VIEs where the respective Duke Energy Registrants have control. See Note 11 for additional information on VIEs. These Condensed Consolidated Financial Statements also reflect the Duke Energy Registrants’ proportionate share of certain jointly owned generation and transmission facilities.
OTHER CURRENT LIABILITIES
Included in Other within Current Liabilities on the Duke Energy Condensed Consolidated Balance Sheet is a current liability of $36 million and $936 million as of September 30, 2021, and December 31, 2020, respectively. The current liability, initially recorded in 2020, primarily represented Duke Energy's share of ACP's obligations of outstanding debt and to satisfy ARO requirements to restore construction sites. See Notes 3 and 11 for further information.
NONCONTROLLING INTEREST
Duke Energy maintains a controlling financial interest in certain less than wholly owned nonregulated subsidiaries. As a result, Duke Energy consolidates these subsidiaries and presents the third-party investors' portion of Duke Energy's net income (loss), net assets and comprehensive income (loss) as noncontrolling interest. Noncontrolling interest is included as a component of equity on the Condensed Consolidated Balance Sheet.
Several operating agreements of Duke Energy's subsidiaries with noncontrolling interest are subject to allocations of earnings, tax attributes and cash flows in accordance with contractual agreements that vary throughout the lives of the subsidiaries. Therefore, Duke Energy and the other investors' (the owners) interests in the subsidiaries are not fixed, and the subsidiaries apply the Hypothetical Liquidation at Book Value (HLBV) method in allocating income or loss and other comprehensive income or loss (all measured on a pretax basis) to the owners. The HLBV method measures the amounts that each owner would hypothetically claim at each balance sheet reporting date, including tax benefits realized by the owners over the IRS recapture period, upon a hypothetical liquidation of the subsidiary at the net book value of its underlying assets. The change in the amount that each owner would hypothetically receive at the reporting date compared to the amount it would have received on the previous reporting date represents the amount of income or loss allocated to each owner for the reporting period.
43

FINANCIAL STATEMENTS ORGANIZATION AND BASIS OF PRESENTATION

During September 2021, Duke Energy completed the initial minority interest investment in a portion of Duke Energy Indiana to an affiliate of GIC. GIC's ownership interest in Duke Energy Indiana represents a noncontrolling interest. See Note 2 for additional information on the sale.
Other operating agreements of Duke Energy's subsidiaries with noncontrolling interest allocate profit and loss based on their pro rata shares of the ownership interest in the respective subsidiary. Therefore, Duke Energy allocates net income or loss and other comprehensive income or loss of these subsidiaries to the owners based on their pro rata shares.
The following table presents allocated losses to noncontrolling interest for the three and nine months ended September 30, 2021, and 2020.
Three Months Ended September 30, Nine Months Ended September 30,
(in millions) 2021 2020 2021 2020
Noncontrolling Interest Allocation of Income
Allocated losses to noncontrolling tax equity members utilizing the HLBV method $ 119  $ 59  $ 217  $ 187 
Allocated losses to noncontrolling members based on pro rata shares of ownership 10  11  30  21 
Total Noncontrolling Interest Allocated Losses $ 129  $ 70  $ 247  $ 208 
CASH, CASH EQUIVALENTS AND RESTRICTED CASH
Duke Energy, Progress Energy and Duke Energy Florida have restricted cash balances related primarily to collateral assets, escrow deposits and VIEs. See Notes 9 and 11 for additional information. Restricted cash amounts are included in Other within Current Assets and Other Noncurrent Assets on the Condensed Consolidated Balance Sheets. The following table presents the components of cash, cash equivalents and restricted cash included in the Condensed Consolidated Balance Sheets.
September 30, 2021 December 31, 2020
Duke Duke
Duke Progress Energy Duke Progress Energy
Energy Energy Florida Energy Energy Florida
Current Assets
Cash and cash equivalents $ 548  $ 102  $ 40  $ 259  $ 59  $ 11 
Other 194  17  17  194  39  39 
Other Noncurrent Assets
Other 1      103  102  — 
Total cash, cash equivalents and restricted cash $ 743  $ 119  $ 57  $ 556  $ 200  $ 50 
INVENTORY
Provisions for inventory write-offs were not material at September 30, 2021, and December 31, 2020. The components of inventory are presented in the tables below.
  September 30, 2021
Duke Duke Duke Duke Duke
Duke Energy Progress Energy Energy Energy Energy
(in millions) Energy Carolinas Energy Progress Florida Ohio Indiana Piedmont
Materials and supplies $ 2,317  $ 779  $ 1,009  $ 674  $ 336  $ 85  $ 305  $ 11 
Coal 312  152  89  45  43  10  61   
Natural gas, oil and other fuel 271  38  157  96  60  19  1  57 
Total inventory $ 2,900  $ 969  $ 1,255  $ 815  $ 439  $ 114  $ 367  $ 68 
  December 31, 2020
Duke Duke Duke Duke Duke
Duke Energy Progress Energy Energy Energy Energy
(in millions) Energy Carolinas Energy Progress Florida Ohio Indiana Piedmont
Materials and supplies $ 2,312  $ 785  $ 999  $ 673  $ 325  $ 78  $ 307  $ 12 
Coal 561  186  193  131  63  16  165  — 
Natural gas, oil and other fuel 294  39  183  107  76  16  56 
Total inventory $ 3,167  $ 1,010  $ 1,375  $ 911  $ 464  $ 110  $ 473  $ 68 
44

FINANCIAL STATEMENTS ORGANIZATION AND BASIS OF PRESENTATION

PROPERTY, PLANT & EQUIPMENT AND LEASES
Duke Energy continues to execute on its business transformation strategy, including the evaluation of in-office work policies considering the experience with the COVID-19 pandemic and also workforce realignment of roles and responsibilities. In May 2021, Duke Energy management approved the sale of certain properties and entered into an agreement to exit certain leased space on December 31, 2021. The sale of the properties is subject to abandonment accounting and resulted in an impairment charge. Additionally, the exit of the leased space resulted in the impairment of related furniture, fixtures and equipment. The total 2021 charges related to the reduction in physical workspace, including these impairments, are expected to be approximately $200 million. During the three months ended September 30, 2021, Duke Energy recorded a pretax charge to earnings of $9 million on the Condensed Consolidated Statements of Operations, which includes $8 million within Impairment of assets and other charges and $1 million within Operations, maintenance and other. During the nine months ended September 30, 2021, Duke Energy recorded a pretax charge to earnings of $184 million on the Condensed Consolidated Statements of Operations, which includes $139 million within Impairment of assets and other charges, $28 million within Operations, maintenance and other and $17 million within Depreciation and amortization.
NEW ACCOUNTING STANDARDS
The following new accounting standard was adopted by the Duke Energy Registrants in 2021.
Leases with Variable Lease Payments. In July 2021, the Financial Accounting Standards Board (FASB) issued new accounting guidance requiring lessors to classify a lease with variable lease payments that do not depend on a reference index or rate as an operating lease if both of the following are met: (1) the lease would have to be classified as a sales-type or direct financing lease under prior guidance, and (2) the lessor would have recognized a day-one loss. Duke Energy elected to adopt the guidance immediately upon issuance of the new standard and will be applying the new standard prospectively to new lease arrangements meeting the criteria. Duke Energy does not currently have any lease arrangements that this new accounting guidance will materially impact.
The following accounting standard was adopted by the Duke Energy Registrants in 2020.
Current Expected Credit Losses. In June 2016, the FASB issued new accounting guidance for credit losses. Duke Energy adopted the new accounting guidance for credit losses effective January 1, 2020, using the modified retrospective method of adoption, which does not require restatement of prior year results. Duke Energy did not adopt any practical expedients.
Duke Energy recognizes allowances for credit losses based on management's estimate of losses expected to be incurred over the lives of certain assets or guarantees. Management monitors credit quality, changes in expected credit losses and the appropriateness of the allowance for credit losses on a forward-looking basis. Management reviews the risk of loss periodically as part of the existing assessment of collectability of receivables.
Duke Energy reviews the credit quality of its counterparties as part of its regular risk management process and requires credit enhancements, such as deposits or letters of credit, as appropriate and as allowed by regulators.
Duke Energy recorded cumulative effects of changes in accounting principles related to the adoption of the new credit loss standard for allowances for credit losses of trade and other receivables, insurance receivables and financial guarantees. These amounts are included in the Condensed Consolidated Balance Sheets in Receivables, Receivables of VIEs, Other Noncurrent Assets and Other Noncurrent Liabilities. See Notes 4 and 12 for more information.
Duke Energy recorded an adjustment for the cumulative effect of a change in accounting principle due to the adoption of this standard on January 1, 2020, as shown in the table below:
  January 1, 2020
Duke Duke Duke
Duke Energy Progress Energy Energy
(in millions) Energy Carolinas Energy Progress Florida Piedmont
Total pretax impact to Retained Earnings $ 120  $ 16  $ 2  $ 1  $ 1  $ 1 
The following new accounting standard has been issued but not yet adopted by the Duke Energy Registrants as of September 30, 2021.
Reference Rate Reform. In March 2020, the FASB issued new accounting guidance for reference rate reform. This guidance is elective and provides expedients to facilitate financial reporting for the anticipated transition away from the London Inter-bank Offered Rate (LIBOR) and other interbank reference rates by the end of 2022. The optional expedients are effective for modification of existing contracts or new arrangements executed between March 12, 2020, through December 31, 2022.
Duke Energy has variable-rate debt and manages interest rate risk by entering into financial contracts including interest rate swaps that are generally indexed to LIBOR. Impacted financial arrangements extending beyond 2022 may require contractual amendment or termination to fully adapt to a post-LIBOR environment. Duke Energy is assessing these financial arrangements and is evaluating the use of optional expedients outlined in the new accounting guidance. Alternative index provisions are also being assessed and incorporated into new financial arrangements that extend beyond 2022. The full outcome of the transition away from LIBOR cannot be determined at this time, but is not expected to have a material impact on the financial statements.
2. BUSINESS SEGMENTS
Duke Energy
Duke Energy's segment structure includes the following segments: Electric Utilities and Infrastructure, Gas Utilities and Infrastructure and Commercial Renewables.
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FINANCIAL STATEMENTS BUSINESS SEGMENTS

The Electric Utilities and Infrastructure segment primarily includes Duke Energy's regulated electric utilities in the Carolinas, Florida and the Midwest. On January 28, 2021, Duke Energy executed an agreement providing for an investment by an affiliate of GIC in Duke Energy Indiana in exchange for a 19.9% minority interest issued by Duke Energy Indiana Holdco, LLC, the holding company for Duke Energy Indiana. The transaction will be completed following two closings for an aggregate purchase price of approximately $2 billion. The first closing, which occurred on September 8, 2021, resulted in Duke Energy Indiana Holdco, LLC issuing 11.05% of its membership interests in exchange for approximately $1,025 million or 50% of the purchase price. Duke Energy retained indirect control of these assets, and, therefore, no gain or loss was recognized on the Condensed Consolidated Statements of Operations. The difference between the cash consideration received, net of transaction costs of approximately $27 million, and the carrying value of the noncontrolling interest is $545 million and was recorded as an increase to equity.
The Gas Utilities and Infrastructure segment includes Piedmont, Duke Energy's natural gas local distribution companies in Ohio and Kentucky and Duke Energy's natural gas storage, midstream pipeline and renewable natural gas investments.
The Commercial Renewables segment is primarily comprised of nonregulated utility-scale wind and solar generation assets located throughout the U.S. In 2021, Duke Energy continues to monitor recoverability of its renewable merchant plants located in the Electric Reliability Council of Texas West market and in the PJM West market due to fluctuating market pricing and long-term forecasted energy prices. The assets were not impaired as of September 30, 2021, because the carrying value of approximately $206 million continues to approximate the aggregate estimated future undiscounted cash flows. Duke Energy has a 50% ownership interest in these assets. A continued decline in energy market pricing or other factors unfavorably impacting the economics would likely result in a future impairment.
The remainder of Duke Energy’s operations is presented as Other, which is primarily comprised of interest expense on holding company debt, unallocated corporate costs, Duke Energy’s wholly owned captive insurance company, Bison, and Duke Energy's ownership interest in National Methanol Company.
Business segment information is presented in the following tables. Segment assets presented exclude intercompany assets.
Three Months Ended September 30, 2021
Electric Gas Total
Utilities and Utilities and Commercial Reportable
(in millions) Infrastructure Infrastructure Renewables Segments Other Eliminations Total
Unaffiliated revenues $ 6,560  $ 266  $ 117  $ 6,943  $ 8  $   $ 6,951 
Intersegment revenues 9  23    32  20  (52)  
Total revenues $ 6,569  $ 289  $ 117  $ 6,975  $ 28  $ (52) $ 6,951 
Segment income (loss)(a)
$ 1,425  $ (3) $ 78  $ 1,500  $ (134) $   $ 1,366 
Less: Noncontrolling interests 129 
Add: Preferred stock dividend 39 
Net Income $ 1,276 
Segment assets $ 141,565  $ 14,692  $ 7,037  $ 163,294  $ 3,717  $ (4) $ 167,007 
Three Months Ended September 30, 2020
Electric Gas Total
Utilities and Utilities and Commercial Reportable
(in millions) Infrastructure Infrastructure Renewables Segments Other Eliminations Total
Unaffiliated revenues $ 6,371  $ 217  $ 126  $ 6,714  $ $ —  $ 6,721 
Intersegment revenues 24  —  32  17  (49) — 
Total revenues $ 6,379  $ 241  $ 126  $ 6,746  $ 24  $ (49) $ 6,721 
Segment income (loss)(b)
$ 1,381  $ (73) $ 60  $ 1,368  $ (103) $ —  $ 1,265 
Less: Noncontrolling interests 70 
Add: Preferred stock dividend 39 
Net Income $ 1,234 
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FINANCIAL STATEMENTS BUSINESS SEGMENTS

(a)Gas Utilities and Infrastructure includes $3 million, recorded within Equity in earnings (losses) of unconsolidated affiliates on the Condensed Consolidated Statements of Operations, related to gas pipeline investments. See Note 3 for additional information. Other includes $8 million recorded within Impairment of assets and other charges, $1 million within Operations, maintenance and other on the Condensed Consolidated Statements of Operations, related to the workplace and workforce realignment. See Note 1 for additional information. Electric Utilities and Infrastructure includes $160 million recorded within Impairment of assets and other charges, $77 million within Other Income and expenses, $5 million within Operations, maintenance and other, $13 million within Regulated electric operating revenues and $3 million within Interest expense on the Duke Energy Carolinas' Condensed Consolidated Statement of Operations related to the 2018 South Carolina rate cases and the CCR settlement and insurance proceeds distributed in accordance with that agreement; it also includes $42 million recorded within Impairment of assets and other charges, $34 million within Other Income and expenses, $7 million within Operations, maintenance, and other, $15 million within Regulated electric operating revenues and $5 million within Interest expense on the Duke Energy Progress' Condensed Consolidated Statement of Operations. See Notes 3 and 4 for more information.
(b)Electric Utilities and Infrastructure includes $19 million recorded within Impairment charges and $8 million recorded within Operations, maintenance and other on the Duke Energy Carolinas' Condensed Consolidated Statements of Operations related to a partial settlement in the Duke Energy Carolinas' 2019 North Carolina rate case and $8 million recorded within Operations, maintenance and other on Duke Energy Progress' Condensed Consolidated Statements of Operation related to a partial settlement in the Duke Energy Progress' 2019 North Carolina rate case. See Note 3 for more information. Additionally, Electric Utilities and Infrastructure includes $5 million of Impairment charges related to gas pipeline assets recorded on Duke Energy Progress' Condensed Consolidated Statement of Operations. Gas Utilities and Infrastructure includes $78 million recorded within Equity in earnings (losses) of unconsolidated affiliates on the Condensed Consolidated Statements of Operations and $7 million in Impairment charges recorded on the Piedmont Condensed Consolidated Statements of Operations related to gas pipeline investments.
Nine Months Ended September 30, 2021
Electric Gas Total
Utilities and Utilities and Commercial Reportable
(in millions) Infrastructure Infrastructure Renewables Segments Other Eliminations Total
Unaffiliated revenues $ 17,161  $ 1,323  $ 355  $ 18,839  $ 20  $   $ 18,859 
Intersegment revenues 24  68    92  61  (153)  
Total revenues $ 17,185  $ 1,391  $ 355  $ 18,931  $ 81  $ (153) $ 18,859 
Segment income (loss)(a)
$ 3,180  $ 259  $ 152  $ 3,591  $ (521) $   $ 3,070 
Less: Noncontrolling interests 247 
Add: Preferred stock dividend 92 
Net Income $ 2,915 
Nine Months Ended September 30, 2020
Electric Gas Total
Utilities and Utilities and Commercial Reportable
(in millions) Infrastructure Infrastructure Renewables Segments Other Eliminations Total
Unaffiliated revenues $ 16,571  $ 1,122  $ 378  $ 18,071  $ 20  $ —  $ 18,091 
Intersegment revenues 25  72  —  97  53  (150) — 
Total revenues $ 16,596  $ 1,194  $ 378  $ 18,168  $ 73  $ (150) $ 18,091 
Segment income (loss)(b)
$ 2,839  $ (1,400) $ 207  $ 1,646  $ (299) $ —  $ 1,347 
Less: Noncontrolling interests 208 
Add: Preferred stock dividend 93 
Net Income $ 1,232 
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FINANCIAL STATEMENTS BUSINESS SEGMENTS

(a)Gas Utilities and Infrastructure includes $19 million, recorded within Equity in earnings (losses) of unconsolidated affiliates on the Condensed Consolidated Statements of Operations, related to gas pipeline investments. See Note 3 for additional information. Commercial Renewables includes a $35 million loss related to Texas Storm Uri, of which ($8 million) is recorded within Nonregulated electric and other revenues, $2 million within Operations, maintenance and other, $29 million within Equity in earnings (losses) of unconsolidated affiliates and $12 million within Loss Attributable to Noncontrolling Interests on the Condensed Consolidated Statements of Operations. See Note 4 for additional information. Other includes $139 million recorded within Impairment of assets and other charges, $28 million within Operations, maintenance and other, and $17 million within Depreciation and amortization on the Condensed Consolidated Statements of Operations, related to the workplace and workplace realignment. See Note 1 for additional information. Electric Utilities and Infrastructure includes $160 million recorded within Impairment of assets and other charges, $77 million within Other Income and expenses, $5 million within Operations, maintenance and other, $13 million within regulated operating revenues and $3 million within interest expense on the Duke Energy Carolinas' Condensed Consolidated Statement of Operations related to the 2018 South Carolina rate cases and the CCR settlement and insurance proceeds distributed in accordance with that agreement; it also includes $42 million recorded within Impairment of assets and other charges, $34 million within Other Income and expenses, $7 million within Operations, maintenance, and other, $15 million within Regulated electric operating revenues and $5 million within interest expense on the Duke Energy Progress' Condensed Consolidated Statement of Operations. See Notes 3 and 4 for more information.
(b)Gas Utilities and Infrastructure includes $2 billion recorded within Equity in earnings (losses) of unconsolidated affiliates on the Condensed Consolidated Statements of Operations, related to gas pipeline investments. See Note 3 for additional information. Other includes a $98 million reversal, included in Operations, maintenance and other on the Condensed Consolidated Statements of Operations, of 2018 severance costs due to a partial settlement in the Duke Energy Carolinas' 2019 North Carolina rate case. See Note 3 for additional information. Electric Utilities and Infrastructure includes $19 million recorded within Impairment charges and $8 million recorded within Operations, maintenance and other on the Duke Energy Carolinas' Condensed Consolidated Statements of Operations related to a partial settlement in the Duke Energy Carolinas' 2019 North Carolina rate case and $8 million recorded within Operations, maintenance and other on Duke Energy Progress' Condensed Consolidated Statements of Operation related to a partial settlement in the Duke Energy Progress' 2019 North Carolina rate case. See Note 3 for more information. Additionally, Electric Utilities and Infrastructure includes $5 million of Impairment charges related to gas pipeline assets recorded on Duke Energy Progress' Condensed Consolidated Statement of Operations in the prior year.
Duke Energy Ohio
Duke Energy Ohio has two reportable segments, Electric Utilities and Infrastructure and Gas Utilities and Infrastructure. The remainder of Duke Energy Ohio's operations is presented as Other.
Three Months Ended September 30, 2021
Electric Gas Total
Utilities and Utilities and Reportable
(in millions) Infrastructure Infrastructure Segments Other Eliminations Total
Total revenues $ 413  $ 93  $ 506  $   $   $ 506 
Segment income/Net (loss) income $ 48  $ 11  $ 59  $ (1) $   $ 58 
Segment assets $ 6,716  $ 3,783  $ 10,499  $ 27  $ (21) $ 10,505 
Three Months Ended September 30, 2020
Electric Gas Total
Utilities and Utilities and Reportable
(in millions) Infrastructure Infrastructure Segments Other Total
Total revenues $ 394  $ 79  $ 473  $ —  $ 473 
Segment income/Net (loss) income $ 63  $ $ 72  $ (2) $ 70 
Nine Months Ended September 30, 2021
Electric Gas Total
Utilities and Utilities and Reportable
(in millions) Infrastructure Infrastructure Segments Other Total
Total revenues $ 1,119  $ 375  $ 1,494  $   $ 1,494 
Segment income/Net (loss) income $ 122  $ 77  $ 199  $ (11) $ 188 
Nine Months Ended September 30, 2020
Electric Gas Total
Utilities and Utilities and Reportable
(in millions) Infrastructure Infrastructure Segments Other Total
Total revenues $ 1,070  $ 324  $ 1,394  $ —  $ 1,394 
Segment income/Net (loss) income $ 137  $ 68  $ 205  $ (4) $ 201 
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FINANCIAL STATEMENTS REGULATORY MATTERS

3. REGULATORY MATTERS
RATE-RELATED INFORMATION
The NCUC, PSCSC, FPSC, IURC, PUCO, TPUC and KPSC approve rates for retail electric and natural gas services within their states. The FERC approves rates for electric sales to wholesale customers served under cost-based rates (excluding Ohio and Indiana), as well as sales of transmission service. The FERC also regulates certification and siting of new interstate natural gas pipeline projects.
Duke Energy Carolinas and Duke Energy Progress
2021 Coal Ash Settlement
On January 22, 2021, Duke Energy Carolinas and Duke Energy Progress entered into the Coal Combustion Residuals Settlement Agreement (the “CCR Settlement Agreement”) with the North Carolina Public Staff (Public Staff), the North Carolina Attorney General’s Office and the Sierra Club (collectively, the "Settling Parties"), which was filed with the NCUC on January 25, 2021. The CCR Settlement Agreement resolves all coal ash prudence and cost recovery issues in connection with 2019 rate cases filed by Duke Energy Carolinas and Duke Energy Progress with the NCUC, as well as the equitable sharing issue on remand from the 2017 Duke Energy Carolinas and Duke Energy Progress North Carolina rate cases as a result of the December 11, 2020 North Carolina Supreme Court opinion. The settlement also provides clarity on coal ash cost recovery in North Carolina for Duke Energy Carolinas and Duke Energy Progress through January 2030 and February 2030 (the "Term"), respectively.
Duke Energy Carolinas and Duke Energy Progress agreed not to seek recovery of approximately $1 billion of systemwide deferred coal ash expenditures, but will retain the ability to earn a debt and equity return during the amortization period, which shall be five years under the 2019 North Carolina rate cases and will be set by the NCUC in future rate case proceedings. The equity return and the amortization period on deferred coal ash costs under the 2017 Duke Energy Carolinas and Duke Energy Progress North Carolina rate cases will remain unaffected. The equity return on deferred coal ash costs under the 2019 North Carolina rate cases and future rate cases in North Carolina will be set at 150 basis points lower than the authorized return on equity (ROE) then in effect, with a capital structure composed of 48% debt and 52% equity. Duke Energy Carolinas and Duke Energy Progress retain the ability to earn a full WACC return during the deferral period, which is the period from when costs are incurred until they are recovered in rates.
The Settling Parties agreed that execution by Duke Energy Carolinas and Duke Energy Progress of a settlement agreement between themselves and the NCDEQ dated December 31, 2019, (the “DEQ Settlement”) and the coal ash management plans included therein or subsequently approved by DEQ are reasonable and prudent. The Settling Parties retain the right to challenge the reasonableness and prudence of actions taken by Duke Energy Carolinas and Duke Energy Progress and costs incurred to implement the scope of work agreed upon in the DEQ Settlement, after February 1, 2020, and March 1, 2020, for Duke Energy Carolinas and Duke Energy Progress, respectively. The Settling Parties further agreed to waive rights through the Term to challenge the reasonableness or prudence of Duke Energy Carolinas’ and Duke Energy Progress’ historical coal ash management practices, and to waive the right to assert any arguments that future coal ash costs, including financing costs, shall be shared between either company and customers through equitable sharing or any other rate base or return adjustment that shares the revenue requirement burden of coal ash costs not otherwise disallowed due to imprudence.
The Settling Parties agreed to a sharing arrangement for future coal ash insurance litigation proceeds between Duke Energy Carolinas and Duke Energy Progress and North Carolina customers. For more information, see Note 4 "Commitments and Contingencies."
As a result of the CCR Settlement Agreement, Duke Energy Carolinas and Duke Energy Progress recorded a pretax charge of approximately $454 million and $494 million, respectively, in the fourth quarter of 2020 to Impairment charges and a reversal of approximately $50 million and $102 million, respectively, to Regulated electric operating revenues on the respective Consolidated Statements of Operations.
The Coal Ash Settlement was approved without modification in the NCUC Orders in the 2019 rate cases on March 31, 2021, and April 16, 2021, for Duke Energy Carolinas and Duke Energy Progress, respectively. The NCUC issued an Order on Remand Accepting CCR Settlement and Affirming Previous Orders Setting Rates and Imposing Penalties in the 2017 rate cases on June 25, 2021.
2020 North Carolina Storm Securitization Filings
On October 26, 2020, Duke Energy Carolinas and Duke Energy Progress filed a joint petition with the NCUC, as agreed to in partial settlements reached in the 2019 North Carolina Rate Cases for Duke Energy Carolinas and Duke Energy Progress, seeking authorization for the financing of the costs of each utility's storm recovery activities required as a result of Hurricane Florence, Hurricane Michael, Hurricane Dorian and Winter Storm Diego. Specifically, Duke Energy Carolinas and Duke Energy Progress requested that the NCUC find that their storm recovery costs and related financing costs are appropriately financed by debt secured by storm recovery property, and that the commission issue financing orders by which each utility may accomplish such financing using a securitization structure. On January 27, 2021, Duke Energy Carolinas, Duke Energy Progress and the Public Staff filed an Agreement and Stipulation of Partial Settlement, subject to review and approval of the NCUC, resolving certain accounting issues, including agreement to support an 18- to 20-year bond period. The total revenue requirement over a proposed 20-year bond period for the storm recovery charges is approximately $287 million for Duke Energy Carolinas and $920 million for Duke Energy Progress and will be finalized upon issuance of the bonds. A remote evidentiary hearing ended on January 29, 2021. In the NCUC Orders in the 2019 rate cases issued on March 31, 2021, and April 16, 2021, for Duke Energy Carolinas and Duke Energy Progress, respectively, the reasonableness and prudence of the deferred storm costs was approved. On May 10, 2021, the NCUC issued financing orders authorizing the companies to issue storm recovery bonds, subject to the terms of the financing orders, and approving the Agreement and Stipulation of Partial Settlement in its entirety. Duke Energy Carolinas and Duke Energy Progress are currently in the process of structuring and marketing the bonds that will be presented to the market. Duke Energy Carolinas and Duke Energy Progress cannot predict the outcome of this matter.
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FINANCIAL STATEMENTS REGULATORY MATTERS

COVID-19 Filings
North Carolina
Duke Energy Carolinas and Duke Energy Progress filed a joint petition on August 7, 2020, with the NCUC for deferral treatment of incremental costs and the cost of waived customer fees due to the COVID-19 pandemic. Comments on the joint petition were filed on November 5, 2020, and reply comments were filed on November 30, 2020. A summary of incremental COVID-19 costs incurred as of June 30, 2021, was filed with the NCUC by Duke Energy Carolinas and Duke Energy Progress on August 6, 2021. Duke Energy Carolinas and Duke Energy Progress cannot predict the outcome of this matter.
South Carolina
Duke Energy Carolinas and Duke Energy Progress filed a report on June 30, 2020, as required by PSCSC order, reporting revenue impact, costs and savings related to COVID-19 to date. On August 14, 2020, Duke Energy Carolinas and Duke Energy Progress filed a joint petition with the PSCSC for approval of an accounting order to defer incremental COVID-19 related costs incurred through June 30, 2020, and for the ongoing months during the duration of the COVID-19 pandemic. Duke Energy Carolinas and Duke Energy Progress withdrew their joint petition on May 17, 2021.
Duke Energy Carolinas
2017 North Carolina Rate Case
On August 25, 2017, Duke Energy Carolinas filed an application with the NCUC for a rate increase for retail customers of approximately $647 million. On February 28, 2018, Duke Energy Carolinas and the Public Staff filed an Agreement and Stipulation of Partial Settlement resolving certain portions of the proceeding. Terms of the settlement included an ROE of 9.9% and a capital structure of 52% equity and 48% debt. On June 22, 2018, the NCUC issued an order approving the Stipulation of Partial Settlement and requiring a revenue reduction.
The North Carolina Attorney General and other parties separately filed Notices of Appeal to the North Carolina Supreme Court. The North Carolina Supreme Court consolidated the Duke Energy Carolinas and Duke Energy Progress appeals. On December 11, 2020, the North Carolina Supreme Court issued an opinion, which affirmed, in part, and reversed and remanded, in part, the NCUC’s decisions. In the Opinion, the court upheld the NCUC's decision to include coal ash costs in the cost of service, as well as the NCUC’s discretion to allow a return on the unamortized balance of coal ash costs. The court also remanded to the NCUC a single issue to consider the assessment of support for the Public Staff’s equitable sharing argument. On January 22, 2021, Duke Energy Carolinas and Duke Energy Progress entered into the CCR Settlement Agreement with the Settling Parties, which was filed with the NCUC on January 25, 2021, and approved by the NCUC on March 31, 2021. The NCUC issued an Order on Remand Accepting CCR Settlement and Affirming Previous Orders Setting Rates and Imposing Penalties on June 25, 2021.
2019 North Carolina Rate Case
On September 30, 2019, Duke Energy Carolinas filed an application with the NCUC for a net rate increase for retail customers of approximately $291 million, which represented an approximate 6% increase in annual base revenues. The gross rate case revenue increase request was $445 million, which was offset by an EDIT rider of $154 million to return to customers North Carolina and federal EDIT resulting from recent reductions in corporate tax rates. The request for a rate increase was driven by major capital investments subsequent to the previous base rate case, coal ash pond closure costs, accelerated coal plant depreciation and deferred 2018 storm costs. Duke Energy Carolinas requested rates be effective no later than August 1, 2020.
On March 25, 2020, Duke Energy Carolinas and the Public Staff filed an Agreement and Stipulation of Partial Settlement, subject to review and approval of the NCUC, resolving certain issues in the base rate proceeding. On July 24, 2020, Duke Energy Carolinas filed its request for approval of its notice to customers required to implement temporary rates. On July 27, 2020, Duke Energy Carolinas filed a joint motion with Duke Energy Progress and the Public Staff notifying the commission that the parties reached a joint partial settlement with the Public Staff. Also on July 27, 2020, Duke Energy Carolinas filed a letter stating that it intended to update its temporary rates calculation to reflect the terms of the partial settlement. On July 31, 2020, Duke Energy Carolinas and the Public Staff filed a Second Agreement and Stipulation of Partial Settlement (Second Partial Settlement), subject to review and approval of the NCUC, resolving certain remaining issues in the base rate proceeding. The remaining items litigated at hearing included recovery of deferred coal ash compliance costs that are subject to asset retirement obligation accounting, implementation of new depreciation rates and the amortization period of the loss on the hydro station sale.
On August 4, 2020, Duke Energy Carolinas filed an amended motion for approval of its amended notice to customers, seeking to exercise its statutory right to implement temporary rates subject to refund on or after August 24, 2020. The revenue requirement to be recovered, subject to refund, through the temporary rates was based on and consistent with the base rate component of the Second Partial Settlement and excluded the items to be litigated noted above. The NCUC approved the August 4, 2020 amended temporary rates motion on August 6, 2020, and temporary rates went into effect on August 24, 2020.
The Duke Energy Carolinas evidentiary hearing concluded on September 18, 2020, and post-hearing filings were made with the NCUC from all parties by November 4, 2020. On January 22, 2021, Duke Energy Carolinas and Duke Energy Progress entered into the CCR Settlement Agreement with the Settling Parties, which was filed with the NCUC on January 25, 2021.
On March 31, 2021, the NCUC issued an order approving the March 25, 2020, and July 31, 2020, partial settlements. The order includes approval of 1) an ROE of 9.6% based upon a capital structure of 52% equity and 48% debt; 2) deferral treatment of approximately $800 million of grid improvement projects with a return; 3) a flow back period of five years for unprotected federal EDIT; and 4) the reasonableness and prudence of $213 million of deferred storm costs, which were removed from the rate case and for which Duke Energy Carolinas filed a petition seeking securitization in October 2020. Additionally, the order approved without modification the CCR Settlement Agreement.
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FINANCIAL STATEMENTS REGULATORY MATTERS

The order denied Duke Energy Carolinas' proposal to shorten the remaining depreciable lives of certain Duke Energy Carolinas coal-fired generating units, indicating the NCUC has not had the chance to fully examine the issue within the context of an integrated resource planning (IRP) proceeding, and upon retirement the remaining net book value of these units should be placed in a regulatory asset account to be amortized over an appropriate period to be determined in a future rate case.
On May 21, 2021, the NCUC issued an Order Approving Rate Schedules, which resulted in a net increase of approximately $33 million. Revised customer rates became effective on June 1, 2021. The deadline to appeal has passed and no parties appealed the NCUC's order.
2018 South Carolina Rate Case
On November 8, 2018, Duke Energy Carolinas filed an application with the PSCSC for a rate increase for retail customers of approximately $168 million.
After hearings in March 2019, the PSCSC issued an order on May 21, 2019, which included an ROE of 9.5% and a capital structure of 53% equity and 47% debt. The order also included the following material components:
Approval of cancellation of the Lee Nuclear Project, with Duke Energy Carolinas maintaining the Combined Operating License;
Approval of recovery of $125 million (South Carolina retail portion) of Lee Nuclear Project development costs (including AFUDC through December 2017) over a 12-year period, but denial of a return on the deferred balance of costs;
Approval of recovery of $96 million of coal ash costs over a five-year period with a return at Duke Energy Carolinas' WACC;
Denial of recovery of $115 million of certain coal ash costs deemed to be related to the Coal Ash Act and incremental to the federal CCR rule;
Approval of a $66 million decrease to base rates to reflect the change in ongoing tax expense, primarily the reduction in the federal income tax rate from 35% to 21%;
Approval of a $45 million decrease through the EDIT Rider to return EDIT resulting from the federal tax rate change and deferred revenues since January 2018 related to the change, to be returned in accordance with the Average Rate Assumption Method (ARAM) for protected EDIT, over a 20-year period for unprotected EDIT associated with Property, Plant and Equipment, over a five-year period for unprotected EDIT not associated with Property, Plant and Equipment and over a five-year period for the deferred revenues; and
Approval of a $17 million decrease through the EDIT Rider related to reductions in the North Carolina state income tax rate from 6.9% to 2.5% to be returned over a five-year period.
As a result of the order, revised customer rates were effective June 1, 2019. On May 31, 2019, Duke Energy Carolinas filed a Petition for Rehearing or Reconsideration of that order contending substantial rights of Duke Energy Carolinas were prejudiced by unlawful, arbitrary and capricious rulings by the PSCSC on certain issues presented in the proceeding. On June 19, 2019, the PSCSC issued a Directive denying Duke Energy Carolinas' request to rehear or reconsider the commission's rulings on certain issues presented in the proceeding including coal ash remediation and disposal costs, ROE and the recovery of a return on deferred operation and maintenance expenses. An order detailing the commission's decision in the Directive was issued on October 18, 2019. Duke Energy Carolinas filed a notice of appeal on November 15, 2019, with the Supreme Court of South Carolina. On November 20, 2019, the South Carolina Energy Users Committee filed a Notice of Appeal with the Supreme Court of South Carolina. Initial briefs were filed on April 21, 2020, which included the South Carolina Energy User's Committee brief arguing that the PSCSC erred in allowing Duke Energy Carolinas' recovery of costs related to the Lee Nuclear Station. Response briefs were filed on July 6, 2020, and reply briefs were filed on August 11, 2020. Oral arguments were heard before the Supreme Court of South Carolina on May 26, 2021.
On October 27, 2021, the Supreme Court of South Carolina affirmed the PSCSC's May 2019 order to:
Disallow cost recovery on certain CCR compliance costs the PSCSC deemed to be incremental to the federal CCR rules;
Disallow recovery of certain coal ash litigation expenses;
Disallow a return on certain deferred expenses; and
Allow recovery of Lee Nuclear Project preconstruction costs.
The Supreme Court's decision notes the prior determination made by the PSCSC that Duke Energy could submit coal ash costs for recovery that were not initially approved in the rate case order if such costs can be attributed to the CCR rules. As a result of the Court's opinion, Duke Energy Carolinas recognized a pretax charge of approximately $160 million to Impairment of assets and other charges, and a $31 million increase in Other income and expenses, net, in the Condensed Consolidated Statement of Operations for the three and nine months ended September 30, 2021, principally related to coal ash remediation at retired coal ash basin sites. Duke Energy Carolinas is evaluating whether to file a Petition for rehearing on the Supreme Court's decision. Petitions are due November 11, 2021, unless an extension is sought and granted.
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FINANCIAL STATEMENTS REGULATORY MATTERS

Oconee Nuclear Station Subsequent License Renewal
On June 7, 2021, Duke Energy Carolinas filed a subsequent license renewal application for the Oconee Nuclear Station (ONS) with the U.S. Nuclear Regulatory Commission (NRC) to renew ONS’s operating license for an additional 20 years. The subsequent license renewal would extend operations of the facility from 60 to 80 years. The current license for units 1 and 2 expire in 2033 and the license for unit 3 expires in 2034. By a Federal Register Notice dated July 28, 2021, the NRC provided a 60-day comment period for persons whose interest may be affected by the issuance of a subsequent renewed license for ONS to file a request for a hearing and a petition for leave to intervene. On September 27, 2021, Beyond Nuclear and Sierra Club (Petitioners) filed a Hearing Request and Petition to Intervene (Hearing Request) and a Petition for Waiver. The Hearing Request proposes three contentions purporting to challenge Duke Energy Carolinas’ environmental report (ER). In general, the proposed contentions claim that the ER does not consider certain information regarding the environmental aspects of Severe Accidents caused by a hypothetical failure of the Jocassee Dam, and therefore does not satisfy the National Environmental Policy Act of 1969, as amended (NEPA), or the NRC’s NEPA-implementing regulations. Duke Energy Carolinas filed its answer to the proposed contentions on October 22, 2021, and the Petitioners have until November 5, 2021, to respond to Duke Energy Carolina’s answer.
Duke Energy Carolinas and Duke Energy Progress intend to seek renewal of operating licenses and 20-year license extensions for all of their nuclear stations. New depreciation rates were implemented for all of the nuclear facilities during the second quarter of 2021. Duke Energy Carolinas and Duke Energy Progress cannot predict the outcome of this matter.
Duke Energy Progress
2017 North Carolina Rate Case
On June 1, 2017, Duke Energy Progress filed an application with the NCUC for a rate increase for retail customers of approximately $477 million, which was subsequently adjusted to $420 million. On November 22, 2017, Duke Energy Progress and the Public Staff filed an Agreement and Stipulation of Partial Settlement resolving certain portions of the proceeding. Terms of the settlement included an ROE of 9.9% and a capital structure of 52% equity and 48% debt. On February 23, 2018, the NCUC issued an order approving the stipulation. The Public Staff, the North Carolina Attorney General and the Sierra Club filed notices of appeal to the North Carolina Supreme Court.
The North Carolina Supreme Court consolidated the Duke Energy Carolinas and Duke Energy Progress appeals. On December 11, 2020, the North Carolina Supreme Court issued an opinion, which affirmed, in part, and reversed and remanded, in part, the NCUC’s decisions. In the Opinion, the court upheld the NCUC's decision to include coal ash costs in the cost of service, as well as the NCUC’s discretion to allow a return on the unamortized balance of coal ash costs. The court also remanded to the NCUC a single issue to consider the assessment of support for the Public Staff’s equitable sharing argument. On January 22, 2021, Duke Energy Progress and Duke Energy Carolinas entered into the CCR Settlement Agreement with the Settling Parties, which was filed with the NCUC on January 25, 2021, and approved by the NCUC on April 16, 2021. The NCUC issued an Order on Remand Accepting CCR Settlement and Affirming Previous Orders Setting Rates and Imposing Penalties on June 25, 2021.
2019 North Carolina Rate Case
On October 30, 2019, Duke Energy Progress filed an application with the NCUC for a net rate increase for retail customers of approximately $464 million, which represented an approximate 12.3% increase in annual base revenues. The gross rate case revenue increase request was $586 million, which was offset by riders of $122 million, primarily an EDIT rider of $120 million to return to customers North Carolina and federal EDIT resulting from recent reductions in corporate tax rates. The request for a rate increase was driven by major capital investments subsequent to the previous base rate case, coal ash pond closure costs, accelerated coal plant depreciation and deferred 2018 storm costs. Duke Energy Progress sought to defer and recover incremental Hurricane Dorian storm costs in this proceeding and requested rates be effective no later than September 1, 2020. As a result of the COVID-19 pandemic, on March 24, 2020, the NCUC suspended the procedural schedule and postponed the previously scheduled evidentiary hearing on this matter indefinitely.
On June 2, 2020, Duke Energy Progress and the Public Staff filed an Agreement and Stipulation of Partial Settlement, subject to review and approval of the NCUC, resolving certain issues in the base rate proceeding. On July 27, 2020, Duke Energy Progress filed a joint motion with Duke Energy Carolinas and the Public Staff notifying the commission that the parties reached a joint partial settlement with the Public Staff. On July 31, 2020, Duke Energy Progress and the Public Staff filed a Second Agreement and Stipulation of Partial Settlement, subject to review and approval of the NCUC, resolving certain remaining issues in the base rate proceeding. The remaining items litigated at hearing included recovery of deferred coal ash compliance costs that are subject to asset retirement obligation accounting and implementation of new depreciation rates.
On August 7, 2020, Duke Energy Progress filed a motion for approval of notice required to implement temporary rates, seeking to exercise its statutory right to implement temporary rates subject to refund on or after September 1, 2020. The revenue requirement to be recovered subject to refund through the temporary rates was based on and consistent with the terms of the base rate component of the settlement agreements with the Public Staff and excluded items to be litigated noted above. In addition, Duke Energy Progress also sought authorization to place a temporary decrement EDIT Rider into effect, concurrent with the temporary base rate change. The NCUC approved the August 7, 2020 temporary rates motion on August 11, 2020, and temporary rates went into effect on September 1, 2020.
The Duke Energy Progress evidentiary hearing concluded on October 6, 2020, and post-hearing filings were filed with the NCUC from all parties by December 4, 2020. On January 22, 2021, Duke Energy Progress and Duke Energy Carolinas entered into the CCR Settlement Agreement with the Settling Parties, which was filed with the NCUC on January 25, 2021.
On April 16, 2021, the NCUC issued an order approving the June 2, 2020, and July 31, 2020, partial settlements. The order includes approval of 1) an ROE of 9.6% based upon a capital structure of 52% equity and 48% debt; 2) deferral treatment of approximately $400 million of grid improvement projects with a return; 3) a flow back period of five years for unprotected federal EDIT; and 4) the reasonableness and prudence of approximately $714 million of deferred storm costs, which were removed from the rate case and for which Duke Energy Progress filed a petition seeking securitization in October 2020. Additionally, the order approved without modification the CCR Settlement Agreement.
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The order denied Duke Energy Progress' proposal to shorten the remaining depreciable lives of certain Duke Energy Progress coal-fired generating units, indicating the NCUC has not had the chance to fully examine the issue within the context of an IRP proceeding, and upon retirement the remaining net book value of these units should be placed in a regulatory asset account to be amortized over an appropriate period to be determined in a future rate case.
On May 21, 2021, the NCUC issued an Order Approving Rate Schedules, which resulted in a net increase of approximately $178 million. Revised customer rates became effective on June 1, 2021. The deadline to appeal has passed and no parties appealed the NCUC's order.
2018 South Carolina Rate Case
On November 8, 2018, Duke Energy Progress filed an application with the PSCSC for a rate increase for retail customers of approximately $59 million.
After hearings in April 2019, the PSCSC issued an order on May 21, 2019, which included an ROE of 9.5% and a capital structure of 53% equity and 47% debt. The order also included the following material components:
Approval of recovery of $4 million of coal ash costs over a five-year period with a return at Duke Energy Progress' WACC;
Denial of recovery of $65 million of certain coal ash costs deemed to be related to the Coal Ash Act and incremental to the federal CCR rule;
Approval of a $17 million decrease to base rates to reflect the change in ongoing tax expense, primarily the reduction in the federal income tax rate from 35% to 21%;
Approval of a $12 million decrease through the EDIT Tax Savings Rider resulting from the federal tax rate change and deferred revenues since January 2018 related to the change, to be returned in accordance with ARAM for protected EDIT, over a 20-year period for unprotected EDIT associated with Property, Plant and Equipment, over a five-year period for unprotected EDIT not associated with Property, Plant and Equipment and over a three-year period for the deferred revenues; and
Approval of a $12 million increase due to the expiration of EDIT related to reductions in the North Carolina state income tax rate from 6.9% to 2.5%.
As a result of the order, revised customer rates were effective June 1, 2019. On May 31, 2019, Duke Energy Progress filed a Petition for Rehearing or Reconsideration of that order contending substantial rights of Duke Energy Progress were prejudiced by unlawful, arbitrary and capricious rulings by the PSCSC on certain issues presented in the proceeding. On June 19, 2019, the PSCSC issued a Directive denying Duke Energy Progress' request to rehear or reconsider the commission's rulings on certain issues presented in the proceeding including coal ash remediation and disposal costs, ROE and the recovery of a return on deferred operation and maintenance expenses, but allowing additional litigation-related costs. As a result of the Directive allowing litigation-related costs, customer rates were revised effective July 1, 2019. An order detailing the commission's decision in the Directive was issued on October 18, 2019. Duke Energy Progress filed a notice of appeal on November 15, 2019, with the Supreme Court of South Carolina. Initial briefs were filed on April 21, 2020. Response briefs were filed on July 6, 2020, and reply briefs were filed on August 11, 2020. Oral arguments were heard before the Supreme Court of South Carolina on May 26, 2021.
On October 27, 2021, the Supreme Court of South Carolina affirmed the PSCSC's May 2019 order to:
Disallow cost recovery on certain CCR compliance costs the PSCSC deemed to be incremental to the federal CCR rules;
Disallow recovery of certain coal ash litigation expenses; and
Disallow a return on certain deferred expenses.
The Supreme Court's decision notes the prior determination made by the PSCSC that Duke Energy could submit coal ash costs for recovery that were not initially approved in the rate case order if such costs can be attributed to the CCR rules. As a result of the Court's opinion, Duke Energy Progress recognized a pretax charge of approximately $42 million to Impairment of assets and other charges, and a $6 million increase in Other income and expenses, net, in the Condensed Consolidated Statement of Operations for the three and nine months ended September 30, 2021, principally related to coal ash remediation at retired coal ash basin sites. Duke Energy Progress is evaluating whether to file a Petition for rehearing on the Supreme Court's decision. Petitions are due November 11, 2021, unless an extension is sought and granted.
Western Carolinas Modernization Plan
On October 8, 2018, Duke Energy Progress filed an application with the NCUC for a CPCN to construct the Hot Springs Microgrid Solar and Battery Storage Facility, which was approved with certain conditions on May 10, 2019. A hearing to update the NCUC on the status of the project was held on March 5, 2020. Construction began in May 2020 with commercial operation expected to begin in December 2021.
On July 27, 2020, Duke Energy Progress filed an application with the NCUC for a CPCN to construct the Woodfin Solar Facility, a 5-MW solar generating facility to be constructed on a closed landfill in Buncombe County. The expert hearing was held on November 18, 2020. The application was approved and a CPCN was granted by order of the NCUC on April 20, 2021. Construction began in April 2021 with an expected in-service date in March 2022.
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FINANCIAL STATEMENTS REGULATORY MATTERS

FERC Return on Equity Complaints
On October 11, 2019, North Carolina Eastern Municipal Power Agency (NCEMPA) filed a complaint at the FERC against Duke Energy Progress pursuant to Section 206 of the Federal Power Act (FPA), alleging that the 11% stated ROE component contained in the demand formula rate in the Full Requirements Power Purchase Agreement (FRPPA) between NCEMPA and Duke Energy Progress is unjust and unreasonable. On July 16, 2020, the FERC set this matter for hearing and settlement judge procedures and established a refund effective date of October 11, 2019. In its order setting the matter for settlement, the FERC allowed for the consideration of variations to the base transmission-related ROE methodology developed in its Order No. 569-A, through the introduction of “specific facts and circumstances” involving issues specific to the case. The parties reached a settlement in principle at a settlement conference on January 7, 2021, and filed a settlement package on March 10, 2021. The FERC Trial Staff filed comments in support of the settlement. On April 19, 2021, the Settlement Judge certified the settlement to the FERC as an uncontested settlement. The FERC approved the settlement on May 25, 2021, and Duke Energy Progress filed compliance documents on June 10, 2021. The FERC accepted the compliance filing on October 8, 2021.
On October 16, 2020, North Carolina Electric Membership Corporation (NCEMC) filed a complaint at the FERC against Duke Energy Progress pursuant to Section 206 of the FPA, alleging that the 11% stated ROE component in the demand formula rate in the Power Supply and Coordination Agreement between NCEMC and Duke Energy Progress is unjust and unreasonable. Under FPA Section 206, the earliest refund effective date that the FERC can establish is the date of the filing of the complaint. Duke Energy Progress responded to the complaint on November 20, 2020, seeking dismissal, demonstrating that the 11% ROE is just and reasonable for the service provided. The parties filed responsive pleadings and are awaiting an order from the FERC. Duke Energy Progress cannot predict the outcome of this matter.
Duke Energy Florida
2021 Settlement Agreement
On January 14, 2021, Duke Energy Florida filed a Settlement Agreement (the “2021 Settlement”) with the FPSC. The parties to the 2021 Settlement include Duke Energy Florida, the Office of Public Counsel (OPC), the Florida Industrial Power Users Group, White Springs Agricultural Chemicals, Inc. d/b/a PCS Phosphate and NUCOR Steel Florida, Inc. (collectively, the “Parties”).
Pursuant to the 2021 Settlement, the Parties agreed to a base rate stay-out provision that expires year-end 2024; however, Duke Energy Florida is allowed an increase to its base rates of an incremental $67 million in 2022, $49 million in 2023 and $79 million in 2024, subject to adjustment in the event of tax reform during the years 2021, 2022 and 2023. The Parties also agreed to an ROE band of 8.85% to 10.85% with a midpoint of 9.85% based on a capital structure of 53% equity and 47% debt. The ROE band can be increased by 25 basis points if the average 30-year U.S. Treasury rate increases 50 basis points or more over a six-month period in which case the midpoint ROE would rise from 9.85% to 10.10%. Duke Energy Florida will also be able to retain the DOE award of approximately $173 million for spent nuclear fuel, which is expected to be received in 2022, in order to mitigate customer rates over the term of the 2021 Settlement. In return, Duke Energy Florida will be able to recognize the $173 million into earnings from 2022 through 2024.
In addition to these terms, the 2021 Settlement contains provisions related to the accelerated depreciation of Crystal River Units 4-5, the approval of approximately $1 billion in future investments in new cost-effective solar power, the implementation of a new Electric Vehicle Charging Station Program and the deferral and recovery of costs in connection with the implementation of Duke Energy Florida’s Vision Florida program, which explores various emerging non-carbon emitting generation technology, distributed technologies and resiliency projects, among other things. The 2021 Settlement also resolves remaining unrecovered storm costs for Hurricane Dorian and Hurricane Michael.
The FPSC approved the 2021 Settlement on May 4, 2021, issuing an order on June 4, 2021. Revised customer rates will be effective January 1, 2022, with subsequent base rate increases effective January 1, 2023, and January 1, 2024.
Storm Restoration Cost Recovery
Duke Energy Florida filed a petition with the FPSC on April 30, 2019, to recover $223 million of estimated retail incremental storm restoration costs for Hurricane Michael, consistent with the provisions in the 2017 Settlement, and the FPSC approved the petition on June 11, 2019. The FPSC also approved allowing Duke Energy Florida to use the tax savings resulting from the Tax Act to recover these storm costs in lieu of implementing a storm surcharge. Approved storm costs are currently expected to be fully recovered by year-end 2021. On November 22, 2019, Duke Energy Florida filed a petition for approval of actual retail recoverable storm restoration costs related to Hurricane Michael in the amount of $191 million plus interest. On May 19, 2020, Duke Energy Florida filed a supplemental true up reducing the actual retail recoverable storm restoration costs related to Hurricane Michael by approximately $3 million, resulting in a total request to recover $188 million actual retail recoverable storm restoration costs, plus interest. Approximately $80 million of these costs are included in Regulatory assets within Current Assets and Other Noncurrent Assets on the Condensed Consolidated Balance Sheets as of December 31, 2020.
Duke Energy Florida filed a petition with the FPSC on December 19, 2019, to recover $169 million of estimated retail incremental storm restoration costs for Hurricane Dorian, consistent with the provisions in the 2017 Settlement and the FPSC approved the petition on February 24, 2020. The final actual amount of $145 million was filed on September 30, 2020. The 2021 Settlement resolved all matters regarding storm cost recovery relating to Hurricane Michael and Hurricane Dorian.
Clean Energy Connection
On July 1, 2020, Duke Energy Florida petitioned the FPSC for approval of a voluntary solar program. The program consists of 10 new solar generating facilities with combined capacity of approximately 750 MW. The program allows participants to support cost-effective solar development in Florida by paying a subscription fee based on per kilowatt-subscriptions and receiving a credit on their bill based on the actual generation associated with their portion of the solar portfolio. The estimated cost of the 10 new solar generation facilities is approximately $1 billion over the next four years, and this investment will be included in base rates offset by the revenue from the subscription fees. The credits will be included for recovery in the fuel cost recovery clause. A remote hearing was held on November 17, 2020, and post-hearing briefs were filed with the FPSC from all parties by December 9, 2020. The FPSC voted to approve the program on January 5, 2021, and issued its written order on January 26, 2021.
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On February 24, 2021, the League of United Latin American Citizens (LULAC) filed a notice of appeal of the FPSC’s order approving the Clean Energy Connection to the Supreme Court of Florida. LULAC's initial brief was filed on May 26, 2021, and Appellees' response briefs were filed on July 26, 2021. LULAC's reply brief was filed on September 24, 2021, and its request for oral argument was filed on September 28, 2021. The FPSC approval order remains in effect pending the outcome of the appeal. Duke Energy Florida cannot predict the outcome of this matter.
Duke Energy Ohio
Duke Energy Ohio Electric Base Rate Case
Duke Energy Ohio filed with the PUCO an electric distribution base rate case application on October 1, 2021, with supporting testimony filed on October 15, 2021, requesting an increase in electric distribution base rates of approximately $55 million and an ROE of 10.3%. This is an approximate 3.3% average increase across all customer classes. The drivers for this case are capital invested since Duke Energy Ohio's last electric distribution base rate case in 2017. Duke Energy Ohio is also seeking to adjust the caps on its Distribution Capital Investment Rider (DCI Rider). Duke Energy Ohio anticipates the PUCO will rule on the request by the summer of 2022. Duke Energy Ohio cannot predict the outcome of this matter.
Ohio House Bill 6
On July 23, 2019, House Bill 6 was signed into law and became effective January 1, 2020. Among other things, the bill allows for funding, through a rider mechanism referred to as the Clean Air Fund (Rider CAF), of two nuclear generating facilities located in Northern Ohio owned by Energy Harbor (f/k/a FirstEnergy Solutions) and certain renewable resources, repeal of energy efficiency mandates and recovery of prudently incurred costs, net of any revenues, for Ohio investor-owned utilities that are participants under the OVEC power agreement. The OVEC recovery is through a non-bypassable rider that replaced any existing recovery mechanism approved by the PUCO and will remain in place through 2030. As such, Duke Energy Ohio created the Legacy Generation Rider (Rider LGR) that replaced Rider PSR effective January 1, 2020. The amounts recoverable from customers are subject to an annual cap, with incremental costs that exceed such cap eligible for deferral and recovery subject to review. See Note 11 for additional discussion of Duke Energy Ohio's ownership interest in OVEC. House Bill 128 was signed into law on March 31, 2021, and became effective June 30, 2021. The bill removes nuclear plant funding included in HB 6, eliminates Rider CAF and establishes the Solar Generation Fund Rider (Rider SGF) to recover the renewable investments originally included in HB 6. HB 128 does not impact OVEC cost recovery or any transmission or distribution rider.
Energy Efficiency Cost Recovery
On February 26, 2020, the PUCO issued an order directing utilities to wind down their demand-side management programs by September 30, 2020, and to terminate the programs by December 31, 2020, in response to changes in Ohio law that eliminated Ohio's energy efficiency mandates. On March 27, 2020, Duke Energy Ohio filed an Application for Rehearing seeking clarification on the final true up and reconciliation process after 2020. On November 18, 2020, the PUCO issued two orders on the application for rehearing. The first order was a Third Entry on Rehearing on the Duke Energy Ohio portfolio holding the cost cap previously imposed was unlawful, a shared savings cap of $8 million pretax should be imposed and lost distribution revenues could not be recovered after December 31, 2020. The second order directs all utilities set the rider to zero effective January 1, 2021, and to file a separate application for final reconciliation of all energy efficiency costs prior to December 31, 2020. On December 18, 2020, Duke Energy Ohio filed an application for rehearing. On January 13, 2021, the application for rehearing was granted for further consideration. Duke Energy Ohio cannot predict the outcome of this matter.
On October 9, 2020, Duke Energy Ohio filed an application to implement a voluntary energy efficiency program portfolio to commence on January 1, 2021. The application proposes a mechanism for recovery of program costs and a benefit associated with avoided transmission and distribution costs. The application remains under review. Effective January 1, 2021, Duke Energy Ohio suspended its energy efficiency programs due to changes in Ohio law. On June 14, 2021, the PUCO issued an entry for each utility to file by July 15, 2021, a proposal to reestablish low-income programs through December 31, 2021. Duke Energy Ohio filed its application on July 14, 2021. Duke Energy Ohio cannot predict the outcome of this matter.
Natural Gas Pipeline Extension
Duke Energy Ohio is installing a new natural gas pipeline (the Central Corridor Project) in its Ohio service territory to increase system reliability and enable the retirement of older infrastructure. Duke Energy Ohio currently estimates the pipeline development costs and construction activities will range from $185 million to $205 million in direct costs (excluding overheads and AFUDC) and that construction of the pipeline extension will be completed in time for use during the 2021/2022 winter season. An evidentiary hearing on Duke Energy Ohio's application for a Certificate of Environmental Compatibility and Public Need concluded on April 11, 2019. On November 21, 2019, the Ohio Power Siting Board (OPSB) approved Duke Energy Ohio's application subject to 41 conditions on construction. Applications for rehearing were filed by several stakeholders on December 23, 2019, arguing that the OPSB approval was incorrect. On February 20, 2020, the OPSB denied the rehearing requests. On April 15, 2020, those stakeholders filed a notice of appeal at the Supreme Court of Ohio of the OPSB’s decision approving Duke Energy Ohio’s Central Corridor project application. The Ohio Supreme Court affirmed the OPSB order on September 22, 2021.
On September 22, 2020, Duke Energy Ohio filed an application with the OPSB for approval to amend the certificated pipeline route due to changes in the route negotiated with property owners and municipalities. On January 21, 2021, the OPSB approved the amended filing with recommended conditions that reaffirm previous conditions and provide guidance regarding local permitting and construction supervision.
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FINANCIAL STATEMENTS REGULATORY MATTERS

MGP Cost Recovery
In an order issued in 2013, the PUCO approved Duke Energy Ohio's deferral and recovery of costs related to environmental remediation at two sites (East End and West End) that housed former MGP operations. Duke Energy Ohio has collected approximately $55 million in environmental remediation costs incurred between 2008 through 2012 through Rider MGP, which is currently suspended. Duke Energy Ohio has made annual applications with the PUCO to recover its incremental remediation costs consistent with the PUCO’s directive in Duke Energy Ohio’s 2012 natural gas base rate case. To date, the PUCO has not ruled on Duke Energy Ohio’s annual applications for the calendar years 2013 through 2019. On September 28, 2018, the Staff of the PUCO (Staff) issued a report recommending a disallowance of approximately $12 million of the $26 million in MGP remediation costs incurred between 2013 through 2017 that Staff believes are not eligible for recovery. Staff interprets the PUCO’s 2013 order granting Duke Energy Ohio recovery of MGP remediation as limiting the recovery to work directly on the East End and West End sites. On October 30, 2018, Duke Energy Ohio filed reply comments objecting to the Staff’s recommendations and explaining, among other things, the obligation Duke Energy Ohio has under Ohio law to remediate all areas impacted by the former MGPs and not just physical property that housed the former plants and equipment. On March 29, 2019, Duke Energy Ohio filed its annual application to recover incremental remediation expense for the calendar year 2018 seeking recovery of approximately $20 million in remediation costs. On July 12, 2019, the Staff recommended a disallowance of approximately $11 million for work that the Staff believes occurred in areas not authorized for recovery. Additionally, the Staff recommended that any discussion pertaining to Duke Energy Ohio's recovery of ongoing MGP costs should be directly tied to or netted against insurance proceeds collected by Duke Energy Ohio. An evidentiary hearing concluded on November 21, 2019. Initial briefs were filed on January 17, 2020, and reply briefs were filed on February 14, 2020.
On March 31, 2020, Duke Energy Ohio filed its annual application to recover incremental MGP remediation expense, seeking recovery of approximately $39 million in remediation costs incurred during 2019. On July 23, 2020, the Staff recommended a disallowance of approximately $4 million for work the Staff believes occurred in areas not authorized for recovery. Additionally, the Staff recommended insurance proceeds, net of litigation costs and attorney fees, should be paid to customers and not be held by Duke Energy Ohio until all investigation and remediation is complete. Duke Energy Ohio filed comments in response to the Staff report on August 21, 2020, and intervenor comments were filed on November 9, 2020.
The 2013 PUCO order also contained conditional deadlines for completing the MGP environmental remediation and the deferral of related remediation costs. Subsequent to the order, the deadline was extended to December 31, 2019. On May 10, 2019, Duke Energy Ohio filed an application requesting a continuation of its existing deferral authority for MGP remediation that must occur after December 31, 2019. On July 12, 2019, the Staff recommended the commission deny the deferral authority request. On September 13, 2019, intervenor comments were filed opposing Duke Energy Ohio's request for continuation of existing deferral authority and on October 2, 2019, Duke Energy Ohio filed reply comments.
A Stipulation and Recommendation was filed jointly by Duke Energy Ohio, the Staff, the Office of the Ohio Consumers' Counsel and the Ohio Energy Group on August 31, 2021, which is subject to review and approval by the PUCO. If approved, the Stipulation and Recommendation would, among other things, resolve all open issues regarding MGP remediation costs incurred between 2013 and 2019, including Duke Energy Ohio’s request for additional deferral authority beyond 2019, and the pending issues related to the Tax Act as it relates to Duke Energy Ohio’s natural gas operations. These impacts are not expected to have a material impact on the Duke Energy Ohio financial statements. The Stipulation and Recommendation further acknowledges Duke Energy Ohio’s ability to file a request for additional deferral authority in the future related to environmental remediation of any MGP impacts in the Ohio River if necessary, subject to specific conditions. On October 15, 2021, the PUCO granted motions to intervene filed in September 2021 by Interstate Gas Supply, Inc. and Retail Energy Supply Association on a limited basis. An evidentiary hearing is scheduled for November 22, 2021. Duke Energy Ohio cannot predict the outcome of this matter.
Tax Act – Ohio
On December 21, 2018, Duke Energy Ohio filed an application to change its base rate tariffs and establish a new rider to implement the benefits of the Tax Act for natural gas customers. Duke Energy Ohio requested commission approval to implement the tariff changes and rider effective April 1, 2019. The new rider will flow through to customers the benefit of the reduction in the statutory federal tax rate from 35% to 21% since January 1, 2018, all future benefits of the lower tax rates and a full refund of deferred income taxes collected at the higher tax rates in prior years. Deferred income taxes subject to normalization rules will be refunded consistent with federal law and deferred income taxes not subject to normalization rules will be refunded over a 10-year period. The PUCO established a procedural schedule and testimony was filed on July 31, 2019. An evidentiary hearing occurred on August 7, 2019. Initial briefs were filed on September 11, 2019. Reply briefs were filed on September 25, 2019. The Stipulation and Recommendation filed on August 31, 2021, disclosed in the MGP Cost Recovery matter above, also resolves the outstanding issues in this proceeding. On October 15, 2021, the PUCO granted motions to intervene filed in September 2021 by Interstate Gas Supply, Inc. and Retail Energy Supply Association on a limited basis. An evidentiary hearing is scheduled for November 22, 2021. Duke Energy Ohio cannot predict the outcome of this matter.
Duke Energy Kentucky Natural Gas Base Rate Case
On June 1, 2021, Duke Energy Kentucky filed an application with the KPSC requesting an increase in natural gas base rates of approximately $15 million, an approximate 13% average increase across all customer classes. The drivers for this case are capital invested since Duke Energy Kentucky's last natural gas base rate case in 2018. Duke Energy Kentucky is also seeking implementation of a Governmental Mandate Adjustment mechanism (Rider GMA) in order to recover from or pay to customers the financial impact of governmental directives and mandates, including changes in federal or state tax rates and regulations issued by the Pipeline and Hazardous Materials Safety Administration (PHMSA). On October 8, 2021, Duke Energy Kentucky filed a Stipulation and Recommendation jointly with the Kentucky Attorney General, subject to review and approval by the KPSC, which if approved, would resolve the case. The Stipulation and Recommendation includes a $9 million increase in base revenues, an ROE of 9.375% for natural gas base rates and 9.3% for natural gas riders, a rider for PHMSA-required capital investments with an annual 5% rate increase cap and a four-year natural gas base rate case stay-out. The hearing was held on October 18, 2021. Duke Energy Kentucky anticipates the KPSC will rule on the request by the end of 2021. Duke Energy Kentucky cannot predict the outcome of this matter.
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Midwest Propane Caverns
Duke Energy Ohio uses propane stored in caverns to meet peak demand during winter. Once the Central Corridor Project is complete, the propane peaking facilities will no longer be necessary and will be retired. On October 7, 2021, Duke Energy Ohio requested deferral treatment of the property, plant and equipment as well as costs related to propane inventory and decommissioning costs. There is approximately $27 million in Property, Plant and Equipment on the Condensed Consolidated Balance Sheets as of September 30, 2021, and December 31, 2020, related to the propane caverns. Duke Energy Ohio cannot predict the outcome of this matter.
Duke Energy Indiana
2019 Indiana Rate Case
On July 2, 2019, Duke Energy Indiana filed a general rate case with the IURC for a rate increase for retail customers of approximately $395 million. The rebuttal case, filed on December 4, 2019, updated the requested revenue requirement to result in a 15.6% or $396 million average retail rate increase, including the impacts of the Utility Receipts Tax. Hearings concluded on February 7, 2020. On June 29, 2020, the IURC issued an order in the rate case approving a revenue increase of $146 million before certain adjustments and ratemaking refinements. The order approved Duke Energy Indiana’s requested forecasted rate base of $10.2 billion as of December 31, 2020, including the Edwardsport Integrated Gasification Combined Cycle (IGCC) Plant. The IURC reduced Duke Energy Indiana’s request by slightly more than $200 million, when accounting for the utility receipts tax and other adjustments. Approximately 50% of the reduction was due to a prospective change in depreciation and use of regulatory asset for the end-of-life inventory at retired generating plants, approximately 20% was due to the approved ROE of 9.7% versus the requested ROE of 10.4% and approximately 20% was related to miscellaneous earnings neutral adjustments. Step one rates were estimated to be approximately 75% of the total and became effective on July 30, 2020. Step two rates are estimated to be the remaining 25% of the total rate increase. Step two rates were approved July 28, 2021, and implemented in August 2021. Step two rates are based on a return on equity of 9.7% and actual December 31, 2020 capital structure with a 54% equity component. Step two rates will be reconciled to January 1, 2021. Several groups appealed the IURC order to the Indiana Court of Appeals. Appellate briefs were filed on October 14, 2020, focusing on three issues: wholesale sales allocations, coal ash basin cost recovery and the Edwardsport IGCC operating and maintenance expense level approved. The appeal was fully briefed in January 2021 and an oral argument was held on April 8, 2021. The Indiana Court of Appeals affirmed the IURC decision on May 13, 2021. The Indiana Office of Utility Consumer Counselor (OUCC) and the Duke Industrial Group filed a joint petition to transfer the rate case appeal to the Indiana Supreme Court on June 28, 2021. Response briefs were filed July 19, 2021. The Indiana Supreme Court granted the petition to transfer on September 16, 2021, and scheduled oral argument for November 16, 2021. Duke Energy Indiana cannot predict the outcome of this matter.
2020 Indiana Coal Ash Recovery Case
In Duke Energy Indiana’s 2019 rate case, the IURC approved coal ash basin closure costs expended through 2018 including financing costs as a regulatory asset and included in rate base. The IURC also opened a subdocket for post-2018 coal ash related expenditures. Duke Energy Indiana filed testimony on April 15, 2020, in the coal ash subdocket requesting recovery for the post-2018 coal ash basin closure costs for plans that have been approved by the Indiana Department of Environmental Management (IDEM) as well as continuing deferral, with carrying costs, on the balance. An evidentiary hearing was held on September 14, 2020. Briefing was completed by mid-September 2021. On November 3, 2021, the IURC issued an order allowing recovery for post-2018 coal ash basin closure costs for the plans that have been approved by IDEM, as well as continuing deferral, with carrying costs, on the balance. The IURC order is subject to appeal within 30 days to the IURC or the Indiana Court of Appeals. Duke Energy Indiana cannot predict the outcome of this matter.

Piedmont
2020 Tennessee Rate Case
On July 2, 2020, Piedmont filed an application with the TPUC, its first general rate case in Tennessee in nine years, for a rate increase for retail customers of approximately $30 million, which represents an approximate 15% increase in annual revenues. The rate increase is driven by significant infrastructure upgrade investments since Piedmont's previous rate case. Approximately half of the plant additions being added to rate base are categories of capital investment not covered under the IMR mechanism, which was approved in 2013. Piedmont amended its requested increase to approximately $26 million in December 2020. As authorized under Tennessee law, Piedmont implemented interim rates on January 2, 2021, at the level requested in its adjusted request. A settlement reached with the Tennessee Consumer Advocate in mid-January was filed with the TPUC on February 2, 2021. The settlement results in an increase of revenues of approximately $16 million and an ROE of 9.8%. On May 6, 2021, the TPUC issued an order approving the settlement. Revised customer rates became effective January 2, 2021. Piedmont refunded customers the difference between bills previously rendered under interim rates and such bills if rendered under approved rates, plus interest, in April 2021.
2021 North Carolina Rate Case
On March 22, 2021, Piedmont filed an application with the NCUC for a rate increase for retail customers of approximately $109 million, which represents an approximate 10% increase in retail revenues. The rate increase is driven by customer growth and significant infrastructure upgrade investments (plant additions) since the last general rate case. Approximately 70% of the plant additions being rolled into rate base are categories of plant investment not covered under the IMR mechanism, which was originally approved as part of the 2013 North Carolina Rate Case. On July 28, 2021, Piedmont amended its requested increase to approximately $97 million.
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FINANCIAL STATEMENTS REGULATORY MATTERS

On September 7, 2021, Piedmont and the Public Staff, the Carolina Utility Customers Association, Inc. and the Carolina Industrial Group for Fair Utility Rates IV filed a Stipulation of Partial Settlement (Stipulation), which is subject to review and approval by the NCUC, resolving most issues between these parties. Major components of the Stipulation include:
A return on equity of 9.6% and a capital structure of 51.6% equity and 48.4% debt;
Continuation of the IMR mechanism and margin decoupling; and
A revenue increase of $67 million, subject to completion of the Robeson County LNG facility and the Pender Onslow County expansion project.
An evidentiary hearing to review the Stipulation and other issues concluded on September 9, 2021. On October 12, 2021, Piedmont notified the NCUC of its intent to implement the stipulated rates effective November 1, 2021, on a temporary basis and subject to refund. On October 18, 2021, Piedmont and the Public Staff filed supplemental testimony attesting to the completion of the Robeson County LNG facility and the Pender Onslow County expansion project and to the propriety of including the capital investment for these two projects in this proceeding. Piedmont cannot predict the outcome of this matter.
OTHER REGULATORY MATTERS
Atlantic Coast Pipeline, LLC
Atlantic Coast Pipeline (ACP pipeline) was planned to be an approximately 600-mile interstate natural gas pipeline running from West Virginia to North Carolina. Duke Energy indirectly owns a 47% interest, which is accounted for as an equity method investment through its Gas Utilities and Infrastructure segment.
As a result of the uncertainty created by various legal rulings, the potential impact on the cost and schedule for the project, the ongoing legal challenges and the risk of additional legal challenges and delays through the construction period and Dominion’s decision to sell substantially all of its gas transmission and storage segment assets, Duke Energy's Board of Directors and management decided that it was not prudent to continue to invest in the project. On July 5, 2020, Duke Energy and Dominion announced the cancellation of the ACP pipeline project.
As part of the pretax charges to earnings of approximately $2.1 billion recorded in June 2020, within Equity in (losses) earnings of unconsolidated affiliates on the Duke Energy Condensed Consolidated Statements of Operations, Duke Energy established liabilities related to the cancellation of the ACP pipeline project. In February 2021, Duke Energy paid approximately $855 million to fund ACP's outstanding debt, relieving Duke Energy of its guarantee. At September 30, 2021, there is $36 million and $63 million within Other Current Liabilities and Other Noncurrent Liabilities, respectively, in the Gas Utilities and Infrastructure segment. The liabilities represent Duke Energy's obligation of approximately $99 million to satisfy remaining ARO requirements to restore construction sites.
See Notes 1 and 11 for additional information regarding this transaction.
Potential Coal Plant Retirements
The Subsidiary Registrants periodically file IRPs with their state regulatory commissions. The IRPs provide a view of forecasted energy needs over a long term (10 to 20 years) and options being considered to meet those needs. IRPs filed by the Subsidiary Registrants included planning assumptions to potentially retire certain coal-fired generating facilities in North Carolina and Indiana earlier than their current estimated useful lives. Duke Energy continues to evaluate the potential need to retire these coal-fired generating facilities earlier than the current estimated useful lives and plans to seek regulatory recovery for amounts that would not be otherwise recovered when any of these assets are retired.
The table below contains the net carrying value of generating facilities planned for retirement or included in recent IRPs as evaluated for potential retirement. Dollar amounts in the table below are included in Net property, plant and equipment on the Condensed Consolidated Balance Sheets as of September 30, 2021, and exclude capitalized asset retirement costs.
Remaining Net
Capacity Book Value
(in MW) (in millions)
Duke Energy Carolinas
Allen Steam Station Units 1-2(a)
324  $ 19 
Allen Steam Station Units 4-5(b)
516  362 
Cliffside Unit 5(b)
544  367 
Duke Energy Progress
Mayo Unit 1(b)
704  640 
Roxboro Units 3-4(b)
1,392  465 
Duke Energy Florida
Crystal River Units 4-5(c)
1,410  1,658 
Duke Energy Indiana (d)
Gibson Units 1-5(e)
2,822  1,814 
Cayuga Units 1-2(e)
995  713 
Total Duke Energy 8,707  $ 6,038 
58

FINANCIAL STATEMENTS REGULATORY MATTERS

(a)As part of the 2015 resolution of a lawsuit involving alleged New Source Review violations, Duke Energy Carolinas must retire Allen Steam Station Units 1 through 3 by December 31, 2024. The long-term energy options considered in the IRP could result in retirement of these units earlier than their current estimated useful lives. Unit 3 with a capacity of 270 MW and a net book value of $26 million at December 31, 2020, was retired in March 2021.
(b)These units were included in the IRP filed by Duke Energy Carolinas and Duke Energy Progress in North Carolina and South Carolina on September 1, 2020. The long-term energy options considered in the IRP could result in retirement of these units earlier than their current estimated useful lives. In 2019, Duke Energy Carolinas and Duke Energy Progress filed North Carolina rate cases that included depreciation studies that accelerate end-of-life dates for these plants. The NCUC issued orders in the 2019 rate cases of Duke Energy Carolinas and Duke Energy Progress on March 31, 2021, and April 16, 2021, respectively, in which the proposals to shorten the remaining depreciable lives of these units were denied, while indicating the IRP proceeding was the appropriate proceeding for the review of generating plant retirements.
(c)On January 14, 2021, Duke Energy Florida filed a settlement agreement with the FPSC, which proposed depreciation rates reflecting retirement dates for Duke Energy Florida's last two coal-fired generating facilities, Crystal River Units 4-5, eight years ahead of schedule in 2034 rather than in 2042. The settlement was approved by the FPSC on May 4, 2021.
(d)Gallagher Units 2 and 4 with a total capacity of 280 MW and a total net book value of $102 million at December 31, 2020, were retired on June 1, 2021.
(e)The rate case filed July 2, 2019, included proposed depreciation rates reflecting retirement dates from 2026 to 2038. The depreciation rates reflecting these updated retirement dates were approved by the IURC as part of the rate case order issued on June 29, 2020.
4. COMMITMENTS AND CONTINGENCIES
ENVIRONMENTAL
The Duke Energy Registrants are subject to federal, state and local regulations regarding air and water quality, hazardous and solid waste disposal, coal ash and other environmental matters. These regulations can be changed from time to time, imposing new obligations on the Duke Energy Registrants. The following environmental matters impact all Duke Energy Registrants.
Remediation Activities
In addition to AROs recorded as a result of various environmental regulations, the Duke Energy Registrants are responsible for environmental remediation at various sites. These include certain properties that are part of ongoing operations and sites formerly owned or used by Duke Energy entities. These sites are in various stages of investigation, remediation and monitoring. Managed in conjunction with relevant federal, state and local agencies, remediation activities vary based upon site conditions and location, remediation requirements, complexity and sharing of responsibility. If remediation activities involve joint and several liability provisions, strict liability, or cost recovery or contribution actions, the Duke Energy Registrants could potentially be held responsible for environmental impacts caused by other potentially responsible parties and may also benefit from insurance policies or contractual indemnities that cover some or all cleanup costs. Liabilities are recorded when losses become probable and are reasonably estimable. The total costs that may be incurred cannot be estimated because the extent of environmental impact, allocation among potentially responsible parties, remediation alternatives and/or regulatory decisions have not yet been determined at all sites. Additional costs associated with remediation activities are likely to be incurred in the future and could be significant. Costs are typically expensed as Operation, maintenance and other on the Condensed Consolidated Statements of Operations unless regulatory recovery of the costs is deemed probable.
The following table contains information regarding reserves for probable and estimable costs related to the various environmental sites. These reserves are recorded in Other within Other Noncurrent Liabilities on the Condensed Consolidated Balance Sheets.
(in millions) September 30, 2021 December 31, 2020
Reserves for Environmental Remediation
Duke Energy $ 74  $ 75 
Duke Energy Carolinas 19  19 
Progress Energy 17  19 
Duke Energy Progress 6 
Duke Energy Florida 11  12 
Duke Energy Ohio 21  22 
Duke Energy Indiana 5 
Piedmont 12  10 
Additional losses in excess of recorded reserves that could be incurred for the stages of investigation, remediation and monitoring for environmental sites that have been evaluated at this time are not material.
LITIGATION
Duke Energy
Texas Storm Uri Tort Litigation
Duke Energy and several Duke Energy renewables project companies have been named in multiple lawsuits arising out of Texas Storm Uri in mid-February 2021, and particularly, in the deregulated market managed by the Electric Reliability Council of Texas. There are 30 state court actions pending. These lawsuits seek recovery for property damages, personal injury and for wrongful death allegedly incurred by the plaintiffs as a result of power outages, which the plaintiffs claim was the result of the defendants' failures. The cases pending in state court have been consolidated into a Texas state court multidistrict litigation proceeding before a single judge to handle all pretrial coordination. Duke Energy cannot predict the outcomes of these matters.
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FINANCIAL STATEMENTS COMMITMENTS AND CONTINGENCIES

Duke Energy Carolinas and Duke Energy Progress
Coal Ash Insurance Coverage Litigation
In March 2017, Duke Energy Carolinas and Duke Energy Progress filed a civil action in the North Carolina Business Court against various insurance providers. The lawsuit seeks payment for coal ash related liabilities covered by third-party liability insurance policies. The insurance policies were issued between 1971 and 1986 and provide third-party liability insurance for property damage. The civil action seeks damages for breach of contract and indemnification for costs arising from the Coal Ash Act and the U.S. Environmental Protection Agency CCR rule at 15 coal-fired plants in North Carolina and South Carolina.
Duke Energy Carolinas and Duke Energy Progress have resolved claims against all, but two of the insurers, sued in this litigation and are dismissing their claims against the settling insurers. Duke Energy Carolinas and Duke Energy Progress have received approximately $418 million of coal ash insurance litigation proceeds from settlements with insurer-defendants and these proceeds will be distributed in accordance with the terms of the CCR settlement agreement. The companies are assessing their options with regard to the two remaining foreign insurers that have defaulted. Duke Energy Carolinas and Duke Energy Progress cannot predict the outcome of this matter.
Duke Energy Carolinas
Ruben Villano, et al. v. Duke Energy Carolinas, LLC
On June 16, 2021, a group of nine individuals went over a low head dam adjacent to the Dan River Steam Station in Eden, North Carolina, while water tubing. Emergency personnel rescued four people and five others were confirmed deceased. On August 11, 2021, Duke Energy Carolinas was served with the complaint filed in Durham County Superior Court on behalf of four survivors, which was later amended to include all the decedents along with the survivors. The lawsuit alleges that Duke Energy Carolinas knew that the river was used for recreational purposes and that Duke Energy did not adequately warn about the dam. On September 30, 2021, Duke Energy Carolinas filed its Motion to Dismiss and Motion for Transfer of Venue from Durham County to Rockingham County. A hearing on these motions is set for November 15, 2021, and discovery has commenced. Duke Energy Carolinas cannot predict the outcome of this matter.
NTE Carolinas II, LLC Litigation
In November 2017, Duke Energy Carolinas entered into a standard FERC large generator interconnection agreement (LGIA) with NTE Carolinas II, LLC (NTE), a company that proposed to build a combined-cycle natural gas plant in Rockingham County, North Carolina. On September 6, 2019, Duke Energy Carolinas filed a lawsuit in Mecklenburg County Superior Court against NTE for breach of contract, alleging that NTE's failure to pay benchmark payments for Duke Energy Carolinas' transmission system upgrades required under the interconnection agreement constituted a termination of the interconnection agreement. Duke Energy Carolinas is seeking a monetary judgment against NTE because NTE failed to make multiple milestone payments. The lawsuit was moved to federal court in North Carolina. NTE filed a motion to dismiss Duke Energy Carolinas’ complaint and brought counterclaims alleging anti-competitive conduct and violations of state and federal statutes. Duke Energy Carolinas filed a motion to dismiss NTE's counterclaims.
On May 21, 2020, in response to a NTE petition challenging Duke Energy Carolinas' termination of the LGIA, FERC issued a ruling that 1) it has exclusive jurisdiction to determine whether a transmission provider may terminate a LGIA; 2) FERC approval is required to terminate a conforming LGIA if objected to by the interconnection customer; and 3) Duke Energy may not announce the termination of a conforming LGIA unless FERC has approved the termination. FERC's Office of Enforcement also initiated an investigation of Duke Energy Carolinas into matters pertaining to the LGIA. Duke Energy Carolinas is cooperating with the Office of Enforcement but cannot predict the outcome of this investigation.
On August 17, 2020, the court denied both NTE’s and Duke Energy Carolinas’ Motion to Dismiss. The parties are in active discovery and trial is scheduled for June 20, 2022. Duke Energy Carolinas cannot predict the outcome of this matter.
Asbestos-related Injuries and Damages Claims
Duke Energy Carolinas has experienced numerous claims for indemnification and medical cost reimbursement related to asbestos exposure. These claims relate to damages for bodily injuries alleged to have arisen from exposure to or use of asbestos in connection with construction and maintenance activities conducted on its electric generation plants prior to 1985. As of September 30, 2021, there were 74 asserted claims for non-malignant cases with cumulative relief sought of up to $15 million, and 58 asserted claims for malignant cases with cumulative relief sought of up to $21 million. Based on Duke Energy Carolinas’ experience, it is expected that the ultimate resolution of most of these claims likely will be less than the amount claimed.
Duke Energy Carolinas has recognized asbestos-related reserves of $508 million at September 30, 2021, and $572 million at December 31, 2020. These reserves are classified in Other within Other Noncurrent Liabilities and Other within Current Liabilities on the Condensed Consolidated Balance Sheets. These reserves are based upon Duke Energy Carolinas' best estimate for current and future asbestos claims through 2041 and are recorded on an undiscounted basis. In light of the uncertainties inherent in a longer-term forecast, management does not believe they can reasonably estimate the indemnity and medical costs that might be incurred after 2041 related to such potential claims. It is possible Duke Energy Carolinas may incur asbestos liabilities in excess of the recorded reserves.
Duke Energy Carolinas has third-party insurance to cover certain losses related to asbestos-related injuries and damages above an aggregate self-insured retention. Duke Energy Carolinas’ cumulative payments began to exceed the self-insured retention in 2008. Future payments up to the policy limit will be reimbursed by the third-party insurance carrier. The insurance policy limit for potential future insurance recoveries indemnification and medical cost claim payments is $697 million in excess of the self-insured retention. Receivables for insurance recoveries were $644 million at September 30, 2021, and $704 million at December 31, 2020. These amounts are classified in Other within Other Noncurrent Assets and Receivables within Current Assets on the Condensed Consolidated Balance Sheets. Duke Energy Carolinas is not aware of any uncertainties regarding the legal sufficiency of insurance claims. Duke Energy Carolinas believes the insurance recovery asset is probable of recovery as the insurance carrier continues to have a strong financial strength rating.
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FINANCIAL STATEMENTS COMMITMENTS AND CONTINGENCIES

As described in Note 1, Duke Energy adopted the new guidance for credit losses effective January 1, 2020, using the modified retrospective method of adoption, which does not require restatement of prior year reported results. The reserve for credit losses for insurance receivables based on adoption of the new standard is $15 million for Duke Energy and Duke Energy Carolinas as of September 30, 2021, and December 31, 2020. The insurance receivable is evaluated based on the risk of default and the historical losses, current conditions and expected conditions around collectability. Management evaluates the risk of default annually based on payment history, credit rating and changes in the risk of default from credit agencies.
Duke Energy Progress and Duke Energy Florida
Spent Nuclear Fuel Matters
On June 18, 2018, Duke Energy Progress and Duke Energy Florida sued the U.S. in the U.S. Court of Federal Claims for damages incurred for the period 2014 through 2018. The lawsuit claimed the Department of Energy breached a contract in failing to accept spent nuclear fuel under the Nuclear Waste Policy Act of 1982 and asserted damages for the cost of on-site storage in the amount of $100 million and $200 million for Duke Energy Progress and Duke Energy Florida, respectively. Discovery is now complete, and trial is anticipated to be scheduled in 2022. Duke Energy Progress and Duke Energy Florida cannot predict the outcome of this matter.
Duke Energy Florida
Power Purchase Dispute Arbitration
Duke Energy Florida, on behalf of its customers, entered into a PPA for the purchase of firm capacity and energy from a qualifying facility under the Public Utilities Regulatory Policies Act of 1978. Duke Energy Florida determined the qualifying facility did not perform in accordance with the PPA, and Duke Energy Florida terminated the PPA. The qualifying facility counterparty filed a confidential American Arbitration Association (AAA) arbitration demand, challenging the termination of the PPA and seeking damages.
The final arbitration hearing occurred during the week of December 7, 2020. An interim arbitral award was issued in March 2021, upholding Duke Energy Florida's positions on all issues and awarding the company termination costs. In May 2021, the final arbitral award was issued awarding Duke Energy Florida its claimed fees and costs. On August 18, 2021, Duke Energy Florida filed a motion in Florida state court to confirm the arbitral award.
Duke Energy Indiana
Coal Ash Basin Closure Plan Appeal
On January 27, 2020, Hoosier Environmental Council (HEC) filed a Petition for Administrative Review with the Indiana Office of Environmental Adjudication challenging the Indiana Department of Environmental Management’s (IDEM's) December 10, 2019, partial approval of Duke Energy Indiana’s ash pond closure plan. After hearing oral arguments in early April 2021 on Duke Energy Indiana's and HEC's competing Motions for Summary Judgment, on May 4, 2021, the administrative court rejected all of HEC’s claims and issued a ruling in favor of Duke Energy Indiana. On June 3, 2021, HEC filed an appeal in Superior Court to seek judicial review of the order. On June 25, 2021, Duke Energy Indiana filed its response to the Petition to Review. On August 30, 2021, HEC served Duke Energy Indiana with its Brief in Support of Petition for Judicial Review. On October 29, 2021, Duke Energy Indiana and IDEM filed their response briefs. HEC's Reply Brief is due on or before November 22, 2021. Oral argument will be heard in December 2021, in Marion County Superior Court. Duke Energy Indiana cannot predict the outcome of this matter.
Other Litigation and Legal Proceedings
The Duke Energy Registrants are involved in other legal, tax and regulatory proceedings arising in the ordinary course of business, some of which involve significant amounts. The Duke Energy Registrants believe the final disposition of these proceedings will not have a material effect on their results of operations, cash flows or financial position. Reserves are classified on the Condensed Consolidated Balance Sheets in Other within Other Noncurrent Liabilities and Other within Current Liabilities.
OTHER COMMITMENTS AND CONTINGENCIES
General
As part of their normal business, the Duke Energy Registrants are party to various financial guarantees, performance guarantees and other contractual commitments to extend guarantees of credit and other assistance to various subsidiaries, investees and other third parties. These guarantees involve elements of performance and credit risk, which are not fully recognized on the Condensed Consolidated Balance Sheets and have uncapped maximum potential payments. However, the Duke Energy Registrants do not believe these guarantees will have a material effect on their results of operations, cash flows or financial position.
In addition, the Duke Energy Registrants enter into various fixed-price, noncancelable commitments to purchase or sell power or natural gas, take-or-pay arrangements, transportation, or throughput agreements and other contracts that may or may not be recognized on their respective Condensed Consolidated Balance Sheets. Some of these arrangements may be recognized at fair value on their respective Condensed Consolidated Balance Sheets if such contracts meet the definition of a derivative and the NPNS exception does not apply. In most cases, the Duke Energy Registrants’ purchase obligation contracts contain provisions for price adjustments, minimum purchase levels and other financial commitments.
61

FINANCIAL STATEMENTS DEBT AND CREDIT FACILITIES

5. DEBT AND CREDIT FACILITIES
SUMMARY OF SIGNIFICANT DEBT ISSUANCES
The following table summarizes significant debt issuances (in millions).
Nine Months Ended September 30, 2021
Duke Duke Duke
Maturity Interest Duke Energy Energy Energy
Issuance Date Date Rate Energy (Parent) Carolinas Progress Piedmont
Unsecured Debt
March 2021(a)
March 2031 2.500  % $ 350  $   $   $   $ 350 
June 2021(b)(c)
June 2023 2.500  % 500  500       
June 2021(c)
June 2031 2.550  % 1,000  1,000       
June 2021(c)
June 2041 3.300  % 750  750       
June 2021(c)
June 2051 3.500  % 750  750       
September 2021(d)
January 2082 3.250  % 500  500       
First Mortgage Bonds
April 2021(e)
April 2031 2.550  % 550    550     
April 2021(e)
April 2051 3.450  % 450    450     
August 2021(f)
August 2031 2.000  % 650      650   
August 2021(f)
August 2051 2.900  % 450      450   
Total issuances $ 5,950  $ 3,500  $ 1,000  $ 1,100  $ 350 
(a)Debt issued to repay at maturity $160 million senior unsecured notes due June 2021, pay down short-term debt and for general corporate purposes.
(b)Debt issuance has a floating interest rate.
(c)Debt issued to repay $1.75 billion of Duke Energy (Parent) 2021 debt maturities, to repay a portion of short-term debt and for general corporate purposes.
(d)Debt issued to repay in October 2021 $500 million of Duke Energy (Parent) unsecured notes. The interest rate resets every five years.
(e)Debt issued to repay at maturity $500 million first mortgage bonds due June 2021, pay down short-term debt and for general company purposes.
(f)Debt issued to repay at maturity a total of $600 million first mortgage bonds due September 2021, pay down short-term debt and for general company purposes.
CURRENT MATURITIES OF LONG-TERM DEBT
The following table shows the significant components of Current maturities of long-term debt on the Condensed Consolidated Balance Sheets. The Duke Energy Registrants currently anticipate satisfying these obligations with cash on hand and proceeds from additional borrowings.
(in millions) Maturity Date Interest Rate September 30, 2021
Unsecured Debt
Duke Energy (Parent)(a)
October 2021 5.125  % 500 
Duke Energy Florida(b)
November 2021 0.372  % 200 
Duke Energy Progress(b)
February 2022 0.305  % 700 
Duke Energy (Parent) March 2022 3.227  % 300 
Duke Energy (Parent)(b)
March 2022 0.764  % 300 
Progress Energy April 2022 3.150  % 450 
Duke Energy (Parent) August 2022 3.050  % 500 
Duke Energy (Parent) August 2022 2.400  % 500 
First Mortgage Bonds
Duke Energy Indiana January 2022 8.850  % 53 
Duke Energy Carolinas May 2022 3.350  % 350 
Duke Energy Progress May 2022 2.800  % 500 
Other(c)
520 
Current maturities of long-term debt $ 4,873 
(a)Junior unsecured notes due January 2073 were redeemed on October 7, 2021.
(b)Debt has a floating interest rate.
(c)Includes finance lease obligations, amortizing debt, tax-exempt bonds with mandatory put options and small bullet maturities.
62

FINANCIAL STATEMENTS DEBT AND CREDIT FACILITIES

AVAILABLE CREDIT FACILITIES
Master Credit Facility
In March 2021, Duke Energy amended its existing $8 billion Master Credit Facility to extend the termination date to March 2026. The Duke Energy Registrants, excluding Progress Energy, have borrowing capacity under the Master Credit Facility up to a specified sublimit for each borrower. Duke Energy has the unilateral ability at any time to increase or decrease the borrowing sublimits of each borrower, subject to a maximum sublimit for each borrower. The amount available under the Master Credit Facility has been reduced to backstop issuances of commercial paper, certain letters of credit and variable-rate demand tax-exempt bonds that may be put to the Duke Energy Registrants at the option of the holder.
The table below includes the current borrowing sublimits and available capacity under these credit facilities.
September 30, 2021
Duke Duke Duke Duke Duke Duke
Duke Energy Energy Energy Energy Energy Energy
(in millions) Energy (Parent) Carolinas Progress Florida Ohio Indiana Piedmont
Facility size(a)
$ 8,000  $ 2,650  $ 1,275  $ 1,150  $ 850  $ 775  $ 600  $ 700 
Reduction to backstop issuances
Commercial paper(b)
(1,611) 389  (375) (253) (527) (419) (150) (276)
Outstanding letters of credit (31) (25) (4) (2)        
Tax-exempt bonds (81)           (81)  
Available capacity under the Master Credit Facility $ 6,277  $ 3,014  $ 896  $ 895  $ 323  $ 356  $ 369  $ 424 
(a)Represents the sublimit of each borrower.
(b)Duke Energy issued $625 million of commercial paper and loaned the proceeds through the money pool to Duke Energy Carolinas, Duke Energy Progress, Duke Energy Ohio and Duke Energy Indiana. The balances are classified as Long-Term Debt Payable to Affiliated Companies on the Condensed Consolidated Balance Sheets.
Other Credit Facilities
September 30, 2021
(in millions) Facility size Amount drawn
Duke Energy (Parent) Three-Year Revolving Credit Facility(a)
$ 1,000  $ 500 
(a)During March 2021, Duke Energy extended the maturity date of the Three-Year Revolving Credit Facility from May 2022 to May 2024.
Duke Energy Ohio Term Loan Facility
In October 2021, Duke Energy Ohio entered into a two-year term loan facility with commitments totaling $100 million. Borrowings under the facility will be used to pay down short-term debt and for general corporate purposes. The term loan was fully drawn at the time of closing in October. The balance will be classified as Long-Term Debt on Duke Energy Ohio’s Condensed Consolidated Balance Sheets.
Duke Energy Kentucky Term Loan Facility
In October 2021, Duke Energy Kentucky entered into a two-year term loan facility with commitments totaling $50 million. Borrowings under the facility will be used to pay down short-term debt and for general corporate purposes. The term loan was fully drawn at the time of closing in October. The balance will be classified as Long-Term Debt on Duke Energy Ohio's Condensed Consolidated Balance Sheet.
Duke Energy Indiana Term Loan Facility
In October 2021, Duke Energy Indiana entered into a two-year term loan facility with commitments totaling $300 million. Borrowings under the facility will be used to pay down short-term debt and for general corporate purposes. The term loan was fully drawn at the time of closing in October. The balance will be classified as Long-Term Debt on Duke Energy Indiana’s Condensed Consolidated Balance Sheet.
6. GOODWILL
Duke Energy
The following table presents the goodwill by reportable segment included on Duke Energy's Condensed Consolidated Balance Sheets at September 30, 2021, and December 31, 2020.
Electric Utilities Gas Utilities Commercial
(in millions) and Infrastructure and Infrastructure Renewables Total
Goodwill balance $ 17,379  $ 1,924  $ 122  $ 19,425 
Accumulated impairment charges     (122) (122)
Goodwill, adjusted for accumulated impairment charges $ 17,379  $ 1,924  $   $ 19,303 
63

FINANCIAL STATEMENTS GOODWILL

Duke Energy Ohio
Duke Energy Ohio's Goodwill balance of $920 million, allocated $596 million to Electric Utilities and Infrastructure and $324 million to Gas Utilities and Infrastructure, is presented net of accumulated impairment charges of $216 million on the Condensed Consolidated Balance Sheets at September 30, 2021, and December 31, 2020.
Progress Energy
Progress Energy's Goodwill is included in the Electric Utilities and Infrastructure segment and there are no accumulated impairment charges.
Piedmont
Piedmont's Goodwill is included in the Gas Utilities and Infrastructure segment and there are no accumulated impairment charges.
Impairment Testing
Duke Energy, Progress Energy, Duke Energy Ohio and Piedmont are required to perform an annual goodwill impairment test as of the same date each year and, accordingly, perform their annual impairment testing of goodwill as of August 31. Duke Energy, Progress Energy, Duke Energy Ohio and Piedmont update their test between annual tests if events or circumstances occur that would more likely than not reduce the fair value of a reporting unit below its carrying value. As the fair value for Duke Energy, Progress Energy, Duke Energy Ohio and Piedmont exceeded their respective carrying values at the date of the annual impairment analysis, no goodwill impairment charges were recorded in the third quarter of 2021.
7. RELATED PARTY TRANSACTIONS
The Subsidiary Registrants engage in related party transactions in accordance with applicable state and federal commission regulations. Refer to the Condensed Consolidated Balance Sheets of the Subsidiary Registrants for balances due to or due from related parties. Material amounts related to transactions with related parties included on the Condensed Consolidated Statements of Operations and Comprehensive Income are presented in the following table.
Three Months Ended September 30, Nine Months Ended September 30,
(in millions) 2021 2020 2021 2020
Duke Energy Carolinas
Corporate governance and shared service expenses(a)
$ 207  $ 198  $ 653  $ 528 
Indemnification coverages(b)
6  18  15 
Joint Dispatch Agreement (JDA) revenue(c)
6  32  16 
JDA expense(c)
68  28  133  72 
Intercompany natural gas purchases(d)
14  10  43  26 
Progress Energy
Corporate governance and shared service expenses(a)
$ 201  $ 185  $ 615  $ 520 
Indemnification coverages(b)
10  31  27 
JDA revenue(c)
68  28  133  72 
JDA expense(c)
6  32  16 
Intercompany natural gas purchases(d)
19  18  56  56 
Duke Energy Progress
Corporate governance and shared service expenses(a)
$ 121  $ 113  $ 367  $ 301 
Indemnification coverages(b)
4  14  13 
JDA revenue(c)
68  28  133  72 
JDA expense(c)
6  32  16 
Intercompany natural gas purchases(d)
19  18  56  56 
Duke Energy Florida
Corporate governance and shared service expenses(a)
$ 80  $ 72  $ 248  $ 219 
Indemnification coverages(b)
6  17  14 
Duke Energy Ohio
Corporate governance and shared service expenses(a)
$ 79  $ 80  $ 237  $ 241 
Indemnification coverages(b)
1  3 
Duke Energy Indiana
Corporate governance and shared service expenses(a)
$ 96  $ 102  $ 302  $ 300 
Indemnification coverages(b)
2  6 
Piedmont
Corporate governance and shared service expenses(a)
$ 32  $ 31  $ 101  $ 102 
Indemnification coverages(b)
1  3 
Intercompany natural gas sales(d)
33  28  99  82 
Natural gas storage and transportation costs(e)
6  17  17 
64

FINANCIAL STATEMENTS RELATED PARTY TRANSACTIONS

(a)The Subsidiary Registrants are charged their proportionate share of corporate governance and other shared services costs, primarily related to human resources, employee benefits, information technology, legal and accounting fees, as well as other third-party costs. These amounts are primarily recorded in Operation, maintenance and other and Impairment of assets and other charges on the Condensed Consolidated Statements of Operations and Comprehensive Income.
(b)The Subsidiary Registrants incur expenses related to certain indemnification coverages through Bison, Duke Energy’s wholly owned captive insurance subsidiary. These expenses are recorded in Operation, maintenance and other on the Condensed Consolidated Statements of Operations and Comprehensive Income.
(c)Duke Energy Carolinas and Duke Energy Progress participate in a JDA, which allows the collective dispatch of power plants between the service territories to reduce customer rates. Revenues from the sale of power and expenses from the purchase of power pursuant to the JDA are recorded in Operating Revenues and Fuel used in electric generation and purchased power, respectively, on the Condensed Consolidated Statements of Operations and Comprehensive Income.
(d)Piedmont provides long-term natural gas delivery service to certain Duke Energy Carolinas and Duke Energy Progress natural gas-fired generation facilities. Piedmont records the sales in Operating revenues, and Duke Energy Carolinas and Duke Energy Progress record the related purchases as a component of Fuel used in electric generation and purchased power on their respective Condensed Consolidated Statements of Operations and Comprehensive Income.
(e)Piedmont has related party transactions as a customer of its equity method investments in Pine Needle LNG Company, LLC, Hardy Storage Company, LLC and Cardinal Pipeline Company, LLC natural gas storage and transportation facilities. These expenses are included in Cost of natural gas on Piedmont's Condensed Consolidated Statements of Operations and Comprehensive Income.
In addition to the amounts presented above, the Subsidiary Registrants have other affiliate transactions, including rental of office space, participation in a money pool arrangement, other operational transactions, such as pipeline lease arrangements, and their proportionate share of certain charged expenses. These transactions of the Subsidiary Registrants are incurred in the ordinary course of business and are eliminated in consolidation.
As discussed in Note 11, certain trade receivables have been sold by Duke Energy Ohio and Duke Energy Indiana to CRC, an affiliate formed by a subsidiary of Duke Energy. The proceeds obtained from the sales of receivables are largely cash but do include a subordinated note from CRC for a portion of the purchase price.
Intercompany Income Taxes
Duke Energy and the Subsidiary Registrants file a consolidated federal income tax return and other state and jurisdictional returns. The Subsidiary Registrants have a tax sharing agreement with Duke Energy for the allocation of consolidated tax liabilities and benefits. Income taxes recorded represent amounts the Subsidiary Registrants would incur as separate C-Corporations. The following table includes the balance of intercompany income tax receivables and payables for the Subsidiary Registrants.
Duke Duke Duke Duke Duke
Energy Progress Energy Energy Energy Energy
(in millions) Carolinas Energy Progress Florida Ohio Indiana Piedmont
September 30, 2021
Intercompany income tax receivable $   $ 36  $   $ 8  $ 1  $   $ 14 
Intercompany income tax payable 133    51      17   
December 31, 2020
Intercompany income tax receivable $ —  $ —  $ —  $ —  $ —  $ $ 10 
Intercompany income tax payable 31  33  46  35  —  — 
8. DERIVATIVES AND HEDGING
The Duke Energy Registrants use commodity and interest rate contracts to manage commodity price risk and interest rate risk. The primary use of commodity derivatives is to hedge the generation portfolio against changes in the prices of electricity and natural gas. Piedmont enters into natural gas supply contracts to provide diversification, reliability and natural gas cost benefits to its customers. Interest rate derivatives are used to manage interest rate risk associated with borrowings.
All derivative instruments not identified as NPNS are recorded at fair value as assets or liabilities on the Condensed Consolidated Balance Sheets. Cash collateral related to derivative instruments executed under master netting arrangements is offset against the collateralized derivatives on the Condensed Consolidated Balance Sheets. The cash impacts of settled derivatives are recorded as operating activities on the Condensed Consolidated Statements of Cash Flows.
INTEREST RATE RISK
The Duke Energy Registrants are exposed to changes in interest rates as a result of their issuance or anticipated issuance of variable-rate and fixed-rate debt and commercial paper. Interest rate risk is managed by limiting variable-rate exposures to a percentage of total debt and by monitoring changes in interest rates. To manage risk associated with changes in interest rates, the Duke Energy Registrants may enter into interest rate swaps, U.S. Treasury lock agreements and other financial contracts. In anticipation of certain fixed-rate debt issuances, a series of forward-starting interest rate swaps or Treasury locks may be executed to lock in components of current market interest rates. These instruments are later terminated prior to or upon the issuance of the corresponding debt.
65

FINANCIAL STATEMENTS DERIVATIVES AND HEDGING

Cash Flow Hedges
For a derivative designated as hedging the exposure to variable cash flows of a future transaction, referred to as a cash flow hedge, the effective portion of the derivative's gain or loss is initially reported as a component of other comprehensive income and subsequently reclassified into earnings once the future transaction impacts earnings. Amounts for interest rate contracts are reclassified to earnings as interest expense over the term of the related debt. Gains and losses reclassified out of accumulated other comprehensive loss for the three and nine months ended September 30, 2021, and 2020, were not material. Duke Energy's interest rate derivatives designated as hedges include interest rate swaps used to hedge existing debt within the Commercial Renewables segment and forward-starting interest rate swaps not accounted for under regulatory accounting.
Undesignated Contracts
Undesignated contracts primarily include contracts not designated as a hedge because they are accounted for under regulatory accounting or contracts that do not qualify for hedge accounting.
Duke Energy’s interest rate swaps for its regulated operations employ regulatory accounting. With regulatory accounting, the mark-to-market gains or losses on the swaps are deferred as regulatory liabilities or regulatory assets, respectively. Regulatory assets and liabilities are amortized consistent with the treatment of the related costs in the ratemaking process. The accrual of interest on the swaps is recorded as Interest Expense on the Duke Energy Registrant's Condensed Consolidated Statements of Operations and Comprehensive Income.
The following table shows notional amounts of outstanding derivatives related to interest rate risk.
September 30, 2021
Duke Duke Duke Duke
Duke Energy Progress Energy Energy Energy
(in millions) Energy Carolinas Energy Progress Florida Ohio
Cash flow hedges $ 2,094  $   $   $   $   $  
Undesignated contracts 1,371  350  900  400  500  27 
Total notional amount(a)
$ 3,465  $ 350  $ 900  $ 400  $ 500  $ 27 
December 31, 2020
Duke Duke Duke Duke
Duke Energy Progress Energy Energy Energy
(in millions) Energy Carolinas Energy Progress Florida Ohio
Cash flow hedges $ 632  $ —  $ —  $ —  $ —  $ — 
Undesignated contracts 1,177  400  750  750  —  27 
Total notional amount(a)
$ 1,809  $ 400  $ 750  $ 750  $ —  $ 27 
(a)Duke Energy includes amounts related to consolidated VIEs of $594 million in cash flow hedges and $94 million in undesignated contracts as of September 30, 2021, and $632 million in cash flow hedges as of December 31, 2020.
COMMODITY PRICE RISK
The Duke Energy Registrants are exposed to the impact of changes in the prices of electricity purchased and sold in bulk power markets and natural gas purchases, including Piedmont's natural gas supply contracts. Exposure to commodity price risk is influenced by a number of factors including the term of contracts, the liquidity of markets and delivery locations. To manage risk associated with commodity prices, the Duke Energy Registrants may enter into long-term power purchase or sales contracts and long-term natural gas supply agreements.
Cash Flow Hedges
For derivatives designated as hedging the exposure to variable cash flows of a future transaction, referred to as a cash flow hedge, the derivative's gain or loss is initially reported as a component of other comprehensive income and subsequently reclassified into earnings once the future transaction impacts earnings. Gains and losses reclassified out of accumulated other comprehensive loss for the three and nine months ended September 30, 2021, and 2020, were not material. Duke Energy’s commodity derivatives designated as hedges include long-term electricity sales in the Commercial Renewables segment.
Undesignated Contracts
For the Subsidiary Registrants, bulk power electricity and natural gas purchases flow through fuel adjustment clauses, formula-based contracts or other cost-sharing mechanisms. Differences between the costs included in rates and the incurred costs, including undesignated derivative contracts, are largely deferred as regulatory assets or regulatory liabilities. Piedmont policies allow for the use of financial instruments to hedge commodity price risks. The strategy and objective of these hedging programs are to use the financial instruments to reduce natural gas costs volatility for customers.
66

FINANCIAL STATEMENTS DERIVATIVES AND HEDGING

Volumes
The tables below include volumes of outstanding commodity derivatives. Amounts disclosed represent the absolute value of notional volumes of commodity contracts excluding NPNS. The Duke Energy Registrants have netted contractual amounts where offsetting purchase and sale contracts exist with identical delivery locations and times of delivery. Where all commodity positions are perfectly offset, no quantities are shown.
September 30, 2021
Duke Duke Duke Duke
Duke Energy Progress Energy Energy Energy
Energy Carolinas Energy Progress Ohio Indiana Piedmont
Electricity (GWh)(a)
29,044        3,004  15,881   
Natural gas (millions of dekatherms) 772  230  190  190    7  345 
December 31, 2020
Duke Duke Duke Duke
Duke Energy Progress Energy Energy Energy
Energy Carolinas Energy Progress Ohio Indiana Piedmont
Electricity (GWh)(a)
35,409  —  —  —  2,559  10,802  — 
Natural gas (millions of dekatherms) 678  145  158  158  —  373 
(a)Duke Energy includes 10,159 GWh and 22,048 GWh related to cash flow hedges as of September 30, 2021, and December 31, 2020, respectively.
LOCATION AND FAIR VALUE OF DERIVATIVE ASSETS AND LIABILITIES RECOGNIZED ON THE CONDENSED CONSOLIDATED BALANCE SHEETS
The following tables show the fair value and balance sheet location of derivative instruments. Although derivatives subject to master netting arrangements are netted on the Condensed Consolidated Balance Sheets, the fair values presented below are shown gross and cash collateral on the derivatives has not been netted against the fair values shown.
Derivative Assets September 30, 2021
Duke Duke Duke Duke Duke
Duke Energy Progress Energy Energy Energy Energy
(in millions) Energy Carolinas Energy Progress Florida Ohio Indiana Piedmont
Commodity Contracts
Not Designated as Hedging Instruments
Current $ 359  $ 171  $ 135  $ 135  $   $ 4  $ 36  $ 12 
Noncurrent 177  100  78  78         
Total Derivative Assets – Commodity Contracts $ 536  $ 271  $ 213  $ 213  $   $ 4  $ 36  $ 12 
Interest Rate Contracts
Designated as Hedging Instruments
Current $ 2  $   $   $   $   $   $   $  
Noncurrent 3               
Not Designated as Hedging Instruments
Current $ 2  $   $ 2  $ 2  $   $   $   $  
Total Derivative Assets – Interest Rate Contracts $ 7  $   $ 2  $ 2  $   $   $   $  
Total Derivative Assets $ 543  $ 271  $ 215  $ 215  $   $ 4  $ 36  $ 12 
67

FINANCIAL STATEMENTS DERIVATIVES AND HEDGING

Derivative Liabilities September 30, 2021
Duke Duke Duke Duke Duke
Duke Energy Progress Energy Energy Energy Energy
(in millions) Energy Carolinas Energy Progress Florida Ohio Indiana Piedmont
Commodity Contracts
Designated as Hedging Instruments
Current $ 37  $   $   $   $   $   $    
Noncurrent 120               
Not Designated as Hedging Instruments
Current $ 33  $ 12  $   $   $   $   $ 2  $ 20 
Noncurrent 128              128 
Total Derivative Liabilities – Commodity Contracts $ 318  $ 12  $   $   $   $   $ 2  $ 148 
Interest Rate Contracts
Designated as Hedging Instruments
Current $ 45  $   $   $   $   $   $   $  
Noncurrent 29               
Not Designated as Hedging Instruments
Current 19  6  12    12  1     
Noncurrent 4          4     
Total Derivative Liabilities – Interest Rate Contracts $ 97  $ 6  $ 12  $   $ 12  $ 5  $   $  
Total Derivative Liabilities $ 415  $ 18  $ 12  $   $ 12  $ 5  $ 2  $ 148 
Derivative Assets December 31, 2020
Duke Duke Duke Duke Duke
Duke Energy Progress Energy Energy Energy Energy
(in millions) Energy Carolinas Energy Progress Florida Ohio Indiana Piedmont
Commodity Contracts
Not Designated as Hedging Instruments
Current $ 30  $ 14  $ $ $ —  $ $ $
Noncurrent 13  —  —  —  — 
Total Derivative Assets – Commodity Contracts $ 43  $ 20  $ 15  $ 15  $ —  $ $ $
Interest Rate Contracts
Not Designated as Hedging Instruments
Current $ 18  $ —  $ 18  $ 18  $ —  $ —  $ —  $ — 
Total Derivative Assets – Interest Rate Contracts $ 18  $ —  $ 18  $ 18  $ —  $ —  $ —  $ — 
Total Derivative Assets $ 61  $ 20  $ 33  $ 33  $ —  $ $ $
68

FINANCIAL STATEMENTS DERIVATIVES AND HEDGING

Derivative Liabilities December 31, 2020
Duke Duke Duke Duke Duke
Duke Energy Progress Energy Energy Energy Energy
(in millions) Energy Carolinas Energy Progress Florida Ohio Indiana Piedmont
Commodity Contracts
Designated as Hedging Instruments
Current $ 14  $ —  $ —  $ —  $ —  $ —  $ —  $ — 
Noncurrent 70  —  —  —  —  —  —  — 
Not Designated as Hedging Instruments
Current $ 30  $ 13  $ $ $ —  $ —  $ $ 15 
Noncurrent 137  27  12  —  —  —  107 
Total Derivative Liabilities – Commodity Contracts $ 251  $ 16  $ 29  $ 14  $ —  $ —  $ $ 122 
Interest Rate Contracts
Designated as Hedging Instruments
Current $ 15  $ —  $ —  $ —  $ —  $ —  $ —  $ — 
Noncurrent 48  —  —  —  —  —  —  — 
Not Designated as Hedging Instruments
Current —  —  —  —  — 
Noncurrent —  —  —  —  —  — 
Total Derivative Liabilities – Interest Rate Contracts $ 73  $ $ —  $ —  $ —  $ $ —  $ — 
Total Derivative Liabilities $ 324  $ 20  $ 29  $ 14  $ —  $ $ $ 122 
OFFSETTING ASSETS AND LIABILITIES
The following tables present the line items on the Condensed Consolidated Balance Sheets where derivatives are reported. Substantially all of Duke Energy's outstanding derivative contracts are subject to enforceable master netting arrangements. The gross amounts offset in the tables below show the effect of these netting arrangements on financial position, and include collateral posted to offset the net position. The amounts shown are calculated by counterparty. Accounts receivable or accounts payable may also be available to offset exposures in the event of bankruptcy. These amounts are not included in the tables below.
Derivative Assets September 30, 2021
Duke Duke Duke Duke Duke
Duke Energy Progress Energy Energy Energy Energy
(in millions) Energy Carolinas Energy Progress Florida Ohio Indiana Piedmont
Current
Gross amounts recognized $ 363  $ 171  $ 137  $ 137  $   $ 4  $ 36  $ 12 
Gross amounts offset (143) (87) (56) (56)        
Net amounts presented in Current Assets: Other $ 220  $ 84  $ 81  $ 81  $   $ 4  $ 36  $ 12 
Noncurrent
Gross amounts recognized $ 180  $ 100  $ 78  $ 78  $   $   $   $  
Gross amounts offset (71) (45) (26) (26)        
Net amounts presented in Other Noncurrent Assets: Other $ 109  $ 55  $ 52  $ 52  $   $   $   $  
69

FINANCIAL STATEMENTS DERIVATIVES AND HEDGING

Derivative Liabilities September 30, 2021
Duke Duke Duke Duke Duke
Duke Energy Progress Energy Energy Energy Energy
(in millions) Energy Carolinas Energy Progress Florida Ohio Indiana Piedmont
Current
Gross amounts recognized $ 134  $ 18  $ 12  $   $ 12  $ 1  $ 2  $ 20 
Gross amounts offset                
Net amounts presented in Current Liabilities: Other $ 134  $ 18  $ 12  $   $ 12  $ 1  $ 2  $ 20 
Noncurrent
Gross amounts recognized $ 281  $   $   $   $   $ 4  $   $ 128 
Gross amounts offset                
Net amounts presented in Other Noncurrent Liabilities: Other $ 281  $   $   $   $   $ 4  $   $ 128 
Derivative Assets December 31, 2020
Duke Duke Duke Duke Duke
Duke Energy Progress Energy Energy Energy Energy
(in millions) Energy Carolinas Energy Progress Florida Ohio Indiana Piedmont
Current
Gross amounts recognized $ 48  $ 14  $ 27  $ 27  $ —  $ $ $
Gross amounts offset (3) (2) (2) (2) —  —  —  — 
Net amounts presented in Current Assets: Other $ 45  $ 12  $ 25  $ 25  $ —  $ $ $
Noncurrent
Gross amounts recognized $ 13  $ $ $ $ —  $ —  $ —  $ — 
Gross amounts offset (5) (1) (4) (4) —  —  —  — 
Net amounts presented in Other Noncurrent Assets: Other $ $ $ $ $ —  $ —  $ —  $ — 
Derivative Liabilities December 31, 2020
Duke Duke Duke Duke Duke
Duke Energy Progress Energy Energy Energy Energy
(in millions) Energy Carolinas Energy Progress Florida Ohio Indiana Piedmont
Current
Gross amounts recognized $ 64  $ 17  $ $ $ —  $ $ $ 15 
Gross amounts offset (3) (2) (2) (2) —  —  —  — 
Net amounts presented in Current Liabilities: Other $ 61  $ 15  $ —  $ —  $ —  $ $ $ 15 
Noncurrent
Gross amounts recognized $ 260  $ $ 27  $ 12  $ —  $ $ —  $ 107 
Gross amounts offset (5) (1) (4) (4) —  —  —  — 
Net amounts presented in Other Noncurrent Liabilities: Other $ 255  $ $ 23  $ $ —  $ $ —  $ 107 
9. INVESTMENTS IN DEBT AND EQUITY SECURITIES
Duke Energy’s investments in debt and equity securities are primarily comprised of investments held in (i) the NDTF at Duke Energy Carolinas, Duke Energy Progress and Duke Energy Florida, (ii) the grantor trusts at Duke Energy Progress, Duke Energy Florida and Duke Energy Indiana related to OPEB plans and (iii) Bison. The Duke Energy Registrants classify investments in debt securities as AFS and investments in equity securities as fair value through net income (FV-NI).
For investments in debt securities classified as AFS, the unrealized gains and losses are included in other comprehensive income until realized, at which time they are reported through net income. For investments in equity securities classified as FV-NI, both realized and unrealized gains and losses are reported through net income. Substantially all of Duke Energy’s investments in debt and equity securities qualify for regulatory accounting, and accordingly, all associated realized and unrealized gains and losses on these investments are deferred as a regulatory asset or liability.
Duke Energy classifies the majority of investments in debt and equity securities as long term, unless otherwise noted.
70

FINANCIAL STATEMENTS INVESTMENTS IN DEBT AND EQUITY SECURITIES

Investment Trusts
The investments within the Investment Trusts are managed by independent investment managers with discretion to buy, sell and invest pursuant to the objectives set forth by the investment manager agreements and trust agreements. The Duke Energy Registrants have limited oversight of the day-to-day management of these investments. As a result, the ability to hold investments in unrealized loss positions is outside the control of the Duke Energy Registrants. Accordingly, all unrealized losses associated with debt securities within the Investment Trusts are recognized immediately and deferred to regulatory accounts where appropriate.
Other AFS Securities
Unrealized gains and losses on all other AFS securities are included in other comprehensive income until realized, unless it is determined the carrying value of an investment has a credit loss. The Duke Energy Registrants analyze all investment holdings each reporting period to determine whether a decline in fair value is related to a credit loss. If a credit loss exists, the unrealized credit loss is included in earnings. There were no material credit losses as of September 30, 2021, and December 31, 2020.
Other Investments amounts are recorded in Other within Other Noncurrent Assets on the Condensed Consolidated Balance Sheets.
DUKE ENERGY
The following table presents the estimated fair value of investments in debt and equity securities; equity investments are classified as FV-NI and debt investments are classified as AFS.
September 30, 2021 December 31, 2020
Gross Gross Gross Gross
Unrealized Unrealized Estimated Unrealized Unrealized Estimated
Holding Holding Fair Holding Holding Fair
(in millions) Gains Losses Value Gains Losses Value
NDTF
Cash and cash equivalents $   $   $ 164  $ —  $ —  $ 177 
Equity securities 4,700  35  6,754  4,138  54  6,235 
Corporate debt securities 44  5  847  76  806 
Municipal bonds 13  1  296  22  —  370 
U.S. government bonds 34  8  1,605  51  —  1,361 
Other debt securities 4  1  195  —  180 
Total NDTF Investments $ 4,795  $ 50  $ 9,861  $ 4,295  $ 55  $ 9,129 
Other Investments
Cash and cash equivalents $   $   $ 87  $ —  $ —  $ 127 
Equity securities 83    145  79  —  146 
Corporate debt securities 4  1  130  —  110 
Municipal bonds 3  1  69  —  86 
U.S. government bonds     50  —  —  42 
Other debt securities     34  —  —  47 
Total Other Investments $ 90  $ 2  $ 515  $ 92  $ —  $ 558 
Total Investments $ 4,885  $ 52  $ 10,376  $ 4,387  $ 55  $ 9,687 
Realized gains and losses, which were determined on a specific identification basis, from sales of FV-NI and AFS securities for the three and nine months ended September 30, 2021, and 2020, were as follows.
Three Months Ended Nine Months Ended
(in millions) September 30, 2021 September 30, 2020 September 30, 2021 September 30, 2020
FV-NI:
 Realized gains $ 34  $ 13  $ 320  $ 338 
 Realized losses 40  16  100  148 
AFS:
 Realized gains 17  26  51  73 
 Realized losses 15  19  46  38 
71

FINANCIAL STATEMENTS INVESTMENTS IN DEBT AND EQUITY SECURITIES

DUKE ENERGY CAROLINAS
The following table presents the estimated fair value of investments in debt and equity securities; equity investments are classified as FV-NI and debt investments are classified as AFS.
September 30, 2021 December 31, 2020
Gross Gross Gross Gross
Unrealized Unrealized Estimated Unrealized Unrealized Estimated
Holding Holding Fair Holding Holding Fair
(in millions) Gains Losses Value Gains Losses Value
NDTF
Cash and cash equivalents $   $   $ 60  $ —  $ —  $ 30 
Equity securities 2,725  14  3,912  2,442  23  3,685 
Corporate debt securities 27  3  495  49  510 
Municipal bonds 1    24  —  91 
U.S. government bonds 18  2  752  25  —  475 
Other debt securities 4  1  190  —  174 
Total NDTF Investments $ 2,775  $ 20  $ 5,433  $ 2,529  $ 24  $ 4,965 
Realized gains and losses, which were determined on a specific identification basis, from sales of FV-NI and AFS securities for the three and nine months ended September 30, 2021, and 2020, were as follows.
Three Months Ended Nine Months Ended
(in millions) September 30, 2021 September 30, 2020 September 30, 2021 September 30, 2020
FV-NI:
 Realized gains $ 25  $ 10  $ 243  $ 46 
 Realized losses 29  12  68  82 
AFS:
 Realized gains 10  20  35  50 
 Realized losses 10  17  32  30 
PROGRESS ENERGY
The following table presents the estimated fair value of investments in debt and equity securities; equity investments are classified as FV-NI and debt investments are classified as AFS.
September 30, 2021 December 31, 2020
Gross Gross Gross Gross
Unrealized Unrealized Estimated Unrealized Unrealized Estimated
Holding Holding Fair Holding Holding Fair
(in millions) Gains Losses Value Gains Losses Value
NDTF
Cash and cash equivalents $   $   $ 104  $ —  $ —  $ 147 
Equity securities 1,975  21  2,842  1,696  31  2,550 
Corporate debt securities 17  2  352  27  —  296 
Municipal bonds 12  1  272  16  —  279 
U.S. government bonds 16  6  853  26  —  886 
Other debt securities     5  — 
Total NDTF Investments $ 2,020  $ 30  $ 4,428  $ 1,766  $ 31  $ 4,164 
Other Investments
Cash and cash equivalents $   $   $ 18  $ —  $ —  $ 106 
Municipal bonds 2    26  —  26 
Total Other Investments $ 2  $   $ 44  $ $ —  $ 132 
Total Investments $ 2,022  $ 30  $ 4,472  $ 1,769  $ 31  $ 4,296 
72

FINANCIAL STATEMENTS INVESTMENTS IN DEBT AND EQUITY SECURITIES

Realized gains and losses, which were determined on a specific identification basis, from sales of FV-NI and AFS securities for the three and nine months ended September 30, 2021, and 2020, were as follows.
Three Months Ended Nine Months Ended
(in millions) September 30, 2021 September 30, 2020 September 30, 2021 September 30, 2020
FV-NI:
 Realized gains $ 9  $ $ 77  $ 292 
 Realized losses 11  32  66 
AFS:
 Realized gains 7  14  17 
 Realized losses 6  12 
DUKE ENERGY PROGRESS
The following table presents the estimated fair value of investments in debt and equity securities; equity investments are classified as FV-NI and debt investments are classified as AFS.
September 30, 2021 December 31, 2020
Gross Gross Gross Gross
Unrealized Unrealized Estimated Unrealized Unrealized Estimated
Holding Holding Fair Holding Holding Fair
(in millions) Gains Losses Value Gains Losses Value
NDTF
Cash and cash equivalents $   $   $ 92  $ —  $ —  $ 76 
Equity securities 1,882  21  2,736  1,617  31  2,459 
Corporate debt securities 17  2  287  27  —  296 
Municipal bonds 12  1  272  16  —  279 
U.S. government bonds 16  2  466  26  —  412 
Other debt securities     5  — 
Total NDTF Investments $ 1,927  $ 26  $ 3,858  $ 1,687  $ 31  $ 3,528 
Other Investments
Cash and cash equivalents $   $   $ 16  $ —  $ —  $
Total Other Investments $   $   $ 16  $ —  $ —  $
Total Investments $ 1,927  $ 26  $ 3,874  $ 1,687  $ 31  $ 3,529 
Realized gains and losses, which were determined on a specific identification basis, from sales of FV-NI and AFS securities for the three and nine months ended September 30, 2021, and 2020, were as follows.
Three Months Ended Nine Months Ended
(in millions) September 30, 2021 September 30, 2020 September 30, 2021 September 30, 2020
FV-NI:
 Realized gains $ 9  $ $ 76  $ 43 
 Realized losses 11  31  51 
AFS:
 Realized gains 6  13  17 
 Realized losses 5  11 
73

FINANCIAL STATEMENTS INVESTMENTS IN DEBT AND EQUITY SECURITIES

DUKE ENERGY FLORIDA
The following table presents the estimated fair value of investments in debt and equity securities; equity investments are classified as FV-NI and debt investments are classified as AFS.
September 30, 2021 December 31, 2020
Gross Gross Gross Gross
Unrealized Unrealized Estimated Unrealized Unrealized Estimated
Holding Holding Fair Holding Holding Fair
(in millions) Gains Losses Value Gains Losses Value
NDTF
Cash and cash equivalents $   $   $ 12  $ —  $ —  $ 71 
Equity securities 93    106  79  —  91 
Corporate debt securities     65  —  —  — 
U.S. government bonds   4  387  —  —  474 
Total NDTF Investments(a)
$ 93  $ 4  $ 570  $ 79  $ —  $ 636 
Other Investments
Cash and cash equivalents $   $   $ 1  $ —  $ —  $
Municipal bonds 2    26  —  26 
Total Other Investments $ 2  $   $ 27  $ $ —  $ 27 
Total Investments $ 95  $ 4  $ 597  $ 82  $ —  $ 663 
(a)During the nine months ended September 30, 2021, and the year ended December 31, 2020, Duke Energy Florida received reimbursements from the NDTF for costs related to ongoing decommissioning activity of Crystal River Unit 3.
Realized gains and losses, which were determined on a specific identification basis, from sales of FV-NI and AFS securities for the three and nine months ended September 30, 2021, and 2020, were as follows:
Three Months Ended Nine Months Ended
(in millions) September 30, 2021 September 30, 2020 September 30, 2021 September 30, 2020
FV-NI:
Realized gains $   $ —  $ 1  $ 249 
Realized losses   —  1  15 
AFS:
 Realized gains 1  —  1  — 
 Realized losses 1  —  1  — 
DUKE ENERGY INDIANA
The following table presents the estimated fair value of investments in debt and equity securities; equity investments are measured at FV-NI and debt investments are classified as AFS.
September 30, 2021 December 31, 2020
Gross Gross Gross Gross
Unrealized Unrealized Estimated Unrealized Unrealized Estimated
Holding Holding Fair Holding Holding Fair
(in millions) Gains Losses Value Gains Losses Value
Investments
Cash and cash equivalents $   $   $ 19  $ —  $ —  $
Equity securities 56    90  58  —  97 
Corporate debt securities     5  —  — 
Municipal bonds 1  1  36  —  38 
U.S. government bonds     5  —  — 
Total Investments $ 57  $ 1  $ 155  $ 59  $ —  $ 143 
Realized gains and losses, which were determined on a specific identification basis, from sales of FV-NI and AFS securities for the three and nine months ended September 30, 2021, and 2020, were immaterial.
74

FINANCIAL STATEMENTS INVESTMENTS IN DEBT AND EQUITY SECURITIES

DEBT SECURITY MATURITIES
The table below summarizes the maturity date for debt securities.
September 30, 2021
Duke Duke Duke Duke
Duke Energy Progress Energy Energy Energy
(in millions) Energy Carolinas Energy Progress Florida Indiana
Due in one year or less $ 151  $ 3  $ 121  $ 22  $ 99  $ 5 
Due after one through five years 954  343  548  244  304  18 
Due after five through 10 years 639  268  286  247  39  8 
Due after 10 years 1,482  847  553  517  36  15 
Total $ 3,226  $ 1,461  $ 1,508  $ 1,030  $ 478  $ 46 
10. FAIR VALUE MEASUREMENTS
Fair value is the exchange price to sell an asset or transfer a liability in an orderly transaction between market participants at the measurement date. The fair value definition focuses on an exit price versus the acquisition cost. Fair value measurements use market data or assumptions market participants would use in pricing the asset or liability, including assumptions about risk and the risks inherent in the inputs to the valuation technique. These inputs may be readily observable, corroborated by market data or generally unobservable. Valuation techniques maximize the use of observable inputs and minimize use of unobservable inputs. A midmarket pricing convention (the midpoint price between bid and ask prices) is permitted for use as a practical expedient.
Fair value measurements are classified in three levels based on the fair value hierarchy as defined by GAAP. Certain investments are not categorized within the fair value hierarchy. These investments are measured at fair value using the net asset value (NAV) per share practical expedient. The NAV is derived based on the investment cost, less any impairment, plus or minus changes resulting from observable price changes for an identical or similar investment of the same issuer.
Fair value accounting guidance permits entities to elect to measure certain financial instruments that are not required to be accounted for at fair value, such as equity method investments or the company’s own debt, at fair value. The Duke Energy Registrants have not elected to record any of these items at fair value.
Valuation methods of the primary fair value measurements disclosed below are as follows.
Investments in equity securities
The majority of investments in equity securities are valued using Level 1 measurements. Investments in equity securities are typically valued at the closing price in the principal active market as of the last business day of the quarter. Principal active markets for equity prices include published exchanges such as the New York Stock Exchange and Nasdaq Stock Market. Foreign equity prices are translated from their trading currency using the currency exchange rate in effect at the close of the principal active market. There was no after-hours market activity that was required to be reflected in the reported fair value measurements.
Investments in debt securities
Most investments in debt securities are valued using Level 2 measurements because the valuations use interest rate curves and credit spreads applied to the terms of the debt instrument (maturity and coupon interest rate) and consider the counterparty credit rating. If the market for a particular fixed-income security is relatively inactive or illiquid, the measurement is Level 3.
Commodity derivatives
Commodity derivatives with clearinghouses are classified as Level 1. Commodity derivatives with observable forward curves are classified as Level 2. If forward price curves are not observable for the full term of the contract and the unobservable period had more than an insignificant impact on the valuation, the commodity derivative is classified as Level 3. In isolation, increases (decreases) in natural gas forward prices result in favorable (unfavorable) fair value adjustments for natural gas purchase contracts; and increases (decreases) in electricity forward prices result in unfavorable (favorable) fair value adjustments for electricity sales contracts. Duke Energy regularly evaluates and validates pricing inputs used to estimate the fair value of natural gas commodity contracts by a market participant price verification procedure. This procedure provides a comparison of internal forward commodity curves to market participant generated curves.
Interest rate derivatives
Most over-the-counter interest rate contract derivatives are valued using financial models that utilize observable inputs for similar instruments and are classified as Level 2. Inputs include forward interest rate curves, notional amounts, interest rates and credit quality of the counterparties.
Other fair value considerations
See Note 11 in Duke Energy's Annual Report on Form 10-K for the year ended December 31, 2020, for a discussion of the valuation of goodwill and intangible assets.
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FINANCIAL STATEMENTS FAIR VALUE MEASUREMENTS
DUKE ENERGY
The following tables provide recorded balances for assets and liabilities measured at fair value on a recurring basis on the Condensed Consolidated Balance Sheets. Derivative amounts in the tables below for all Duke Energy Registrants exclude cash collateral, which is disclosed in Note 8. See Note 9 for additional information related to investments by major security type for the Duke Energy Registrants.
September 30, 2021
(in millions) Total Fair Value Level 1 Level 2 Level 3 Not Categorized
NDTF cash and cash equivalents $ 164  $ 164  $   $   $  
NDTF equity securities 6,754  6,705      49 
NDTF debt securities 2,943  998  1,945     
Other equity securities 145  145       
Other debt securities 283  45  238     
Other cash and cash equivalents 87  87       
Derivative assets 543  27  490  26   
Total assets 10,919  8,171  2,673  26  49 
Derivative liabilities (415) (2) (256) (157)  
Net assets (liabilities) $ 10,504  $ 8,169  $ 2,417  $ (131) $ 49 
December 31, 2020
(in millions) Total Fair Value Level 1 Level 2 Level 3 Not Categorized
NDTF cash and cash equivalents $ 177  $ 177  $ —  $ —  $ — 
NDTF equity securities 6,235  6,189  —  —  46 
NDTF debt securities 2,717  874  1,843  —  — 
Other equity securities 146  146  —  —  — 
Other debt securities 285  37  248  —  — 
Other cash and cash equivalents 127  127  —  —  — 
Derivative assets 61  53  — 
Total assets 9,748  7,551  2,144  46 
Derivative liabilities (324) —  (240) (84) — 
Net assets (liabilities) $ 9,424  $ 7,551  $ 1,904  $ (77) $ 46 
The following tables provide reconciliations of beginning and ending balances of assets and liabilities measured at fair value using Level 3 measurements.
Derivatives (net)
Three Months Ended September 30, Nine Months Ended September 30,
(in millions) 2021 2020 2021 2020
Balance at beginning of period $ (131) $ (92) $ (77) $ (102)
Total pretax realized or unrealized losses included in comprehensive income (11) (102) (86) (102)
Purchases, sales, issuances and settlements:
Purchases   —  21  14 
Settlements 4  (3) (4) (18)
Total gains (losses) included on the Condensed Consolidated Balance Sheet 7  (6) 15 
Balance at end of period $ (131) $ (203) $ (131) $ (203)
76

FINANCIAL STATEMENTS FAIR VALUE MEASUREMENTS
DUKE ENERGY CAROLINAS
The following tables provide recorded balances for assets and liabilities measured at fair value on a recurring basis on the Condensed Consolidated Balance Sheets.
September 30, 2021
(in millions) Total Fair Value Level 1 Level 2 Not Categorized
NDTF cash and cash equivalents $ 60  $ 60  $   $  
NDTF equity securities 3,912  3,863    49 
NDTF debt securities 1,461  359  1,102   
Derivative assets 271    271   
Total assets 5,704  4,282  1,373  49 
Derivative liabilities (18)   (18)  
Net assets $ 5,686  $ 4,282  $ 1,355  $ 49 
December 31, 2020
(in millions) Total Fair Value Level 1 Level 2 Not Categorized
NDTF cash and cash equivalents $ 30  $ 30  $ —  $ — 
NDTF equity securities 3,685  3,639  —  46 
NDTF debt securities 1,250  192  1,058  — 
Derivative assets 20  —  20  — 
Total assets 4,985  3,861  1,078  46 
Derivative liabilities (20) —  (20) — 
Net assets $ 4,965  $ 3,861  $ 1,058  $ 46 
PROGRESS ENERGY
The following tables provide recorded balances for assets and liabilities measured at fair value on a recurring basis on the Condensed Consolidated Balance Sheets.
September 30, 2021 December 31, 2020
(in millions) Total Fair Value Level 1 Level 2 Total Fair Value Level 1 Level 2
NDTF cash and cash equivalents $ 104  $ 104  $   $ 147  $ 147  $ — 
NDTF equity securities 2,842  2,842    2,550  2,550  — 
NDTF debt securities 1,482  639  843  1,467  682  785 
Other debt securities 26    26  26  —  26 
Other cash and cash equivalents 18  18    106  106  — 
Derivative assets 215    215  33  —  33 
Total assets 4,687  3,603  1,084  4,329  3,485  844 
Derivative liabilities (12)   (12) (29) —  (29)
Net assets $ 4,675  $ 3,603  $ 1,072  $ 4,300  $ 3,485  $ 815 
DUKE ENERGY PROGRESS
The following tables provide recorded balances for assets and liabilities measured at fair value on a recurring basis on the Condensed Consolidated Balance Sheets.
September 30, 2021 December 31, 2020
(in millions) Total Fair Value Level 1 Level 2 Total Fair Value Level 1 Level 2
NDTF cash and cash equivalents $ 92  $ 92  $   $ 76  $ 76  $ — 
NDTF equity securities 2,736  2,736    2,459  2,459  — 
NDTF debt securities 1,030  278  752  993  237  756 
Other cash and cash equivalents 16  16    — 
Derivative assets 215    215  33  —  33 
Total assets 4,089  3,122  967  3,562  2,773  789 
Derivative liabilities       (14) —  (14)
Net assets $ 4,089  $ 3,122  $ 967  $ 3,548  $ 2,773  $ 775 
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FINANCIAL STATEMENTS FAIR VALUE MEASUREMENTS
DUKE ENERGY FLORIDA
The following tables provide recorded balances for assets and liabilities measured at fair value on a recurring basis on the Condensed Consolidated Balance Sheets.
September 30, 2021 December 31, 2020
(in millions) Total Fair Value Level 1 Level 2 Total Fair Value Level 1 Level 2
NDTF cash and cash equivalents $ 12  $ 12  $   $ 71  $ 71  $ — 
NDTF equity securities 106  106    91  91  — 
NDTF debt securities 452  361  91  474  445  29 
Other debt securities 26    26  26  —  26 
Other cash and cash equivalents 1  1    — 
Total assets 597  480  117  663  608  55 
Derivative liabilities (12)   (12) —  —  — 
Net assets $ 585  $ 480  $ 105  $ 663  $ 608  $ 55 
DUKE ENERGY OHIO
The recorded balances for assets and liabilities measured at fair value on a recurring basis on the Condensed Consolidated Balance Sheets were not material at September 30, 2021, and December 31, 2020.
DUKE ENERGY INDIANA
The following tables provide recorded balances for assets and liabilities measured at fair value on a recurring basis on the Condensed Consolidated Balance Sheets.
September 30, 2021 December 31, 2020
(in millions) Total Fair Value Level 1 Level 2 Level 3 Total Fair Value Level 1 Level 2 Level 3
Other equity securities $ 90  $ 90  $   $   $ 97  $ 97  $ —  $ — 
Other debt securities 46    46    45  —  45  — 
Other cash and cash equivalents 19  19      —  — 
Derivative assets 36  12    24  —  — 
Total assets 191  121  46  24  149  98  45 
Derivative liabilities (2) (2)     (1) (1) —  — 
Net assets $ 189  $ 119  $ 46  $ 24  $ 148  $ 97  $ 45  $
The following table provides a reconciliation of beginning and ending balances of assets and liabilities measured at fair value using Level 3 measurements.
Derivatives (net)
Three Months Ended September 30, Nine Months Ended September 30,
(in millions) 2021 2020 2021 2020
Balance at beginning of period $ 22  $ 10  $ 6  $ 11 
Purchases, sales, issuances and settlements:
Purchases   —  18  10 
Settlements (3) (3) (12) (13)
Total gains included on the Condensed Consolidated Balance Sheet 5  12  — 
Balance at end of period $ 24  $ $ 24  $
PIEDMONT
The following tables provide recorded balances for assets and liabilities measured at fair value on a recurring basis on the Condensed Consolidated Balance Sheets.
September 30, 2021 December 31, 2020
(in millions) Total Fair Value Level 1 Level 2 Total Fair Value Level 1 Level 2
Derivative assets $ 12  $ 12  $   $ $ $ — 
Derivative liabilities (148)   (148) (122) —  (122)
Net (liabilities) assets $ (136) $ 12  $ (148) $ (121) $ $ (122)
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FINANCIAL STATEMENTS FAIR VALUE MEASUREMENTS
The following table provides a reconciliation of beginning and ending balances of assets and liabilities measured at fair value using Level 3 measurements.
Derivatives (net)
Three Months Ended September 30, Nine Months Ended September 30,
(in millions) 2021 2020 2021 2020
Balance at beginning of period $   $ (105) $   $ (117)
Total (losses) gains and settlements   (6)  
Balance at end of period $   $ (111) $   $ (111)
QUANTITATIVE INFORMATION ABOUT UNOBSERVABLE INPUTS
The following tables include quantitative information about the Duke Energy Registrants' derivatives classified as Level 3.
September 30, 2021
Weighted
Fair Value Average
Investment Type (in millions) Valuation Technique Unobservable Input Range Range
Duke Energy            
Electricity contracts $ (157) RTO forward pricing Forward electricity curves – price per MWh $ 18.02  - $ 143.85  $ 38.43 
Duke Energy Ohio  
FTRs 2  RTO auction pricing FTR price – per MWh 0.06  - 1.27  0.71 
Duke Energy Indiana  
FTRs 24  RTO auction pricing FTR price – per MWh (1.11) - 8.55  1.61 
Duke Energy
Total Level 3 derivatives $ (131)
December 31, 2020
Weighted
Fair Value Average
Investment Type (in millions) Valuation Technique Unobservable Input Range Range
Duke Energy            
Electricity contracts $ (84) Discounted cash flow Forward electricity curves – price per MWh $ 14.68  - $151.84 $28.84
Duke Energy Ohio      
FTRs RTO auction pricing FTR price – per MWh 0.25  - 1.68  0.79 
Duke Energy Indiana        
FTRs RTO auction pricing FTR price – per MWh (2.40) - 7.41  1.05 
Duke Energy
Total Level 3 derivatives $ (77)
OTHER FAIR VALUE DISCLOSURES
The fair value and book value of long-term debt, including current maturities, is summarized in the following table. Estimates determined are not necessarily indicative of amounts that could have been settled in current markets. Fair value of long-term debt uses Level 2 measurements.
September 30, 2021 December 31, 2020
(in millions) Book Value Fair Value Book Value Fair Value
Duke Energy(a)
$ 62,802  $ 69,381  $ 59,863  $ 69,292 
Duke Energy Carolinas 12,975  14,964  12,218  14,917 
Progress Energy 19,488  22,593  19,264  23,470 
Duke Energy Progress 9,848  10,915  9,258  10,862 
Duke Energy Florida 7,549  8,932  7,915  9,756 
Duke Energy Ohio 3,092  3,517  3,089  3,650 
Duke Energy Indiana 4,092  4,883  4,091  5,204 
Piedmont 2,968  3,320  2,780  3,306 
(a)Book value of long-term debt includes $1.3 billion at September 30, 2021, and December 31, 2020, of net unamortized debt discount and premium of purchase accounting adjustments related to the mergers with Progress Energy and Piedmont that are excluded from fair value of long-term debt.
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FINANCIAL STATEMENTS FAIR VALUE MEASUREMENTS
At both September 30, 2021, and December 31, 2020, fair value of cash and cash equivalents, accounts and notes receivable, accounts payable, notes payable and commercial paper and nonrecourse notes payable of VIEs are not materially different from their carrying amounts because of the short-term nature of these instruments and/or because the stated rates approximate market rates.
11. VARIABLE INTEREST ENTITIES
CONSOLIDATED VIEs
The obligations of the consolidated VIEs discussed in the following paragraphs are nonrecourse to the Duke Energy Registrants. The registrants have no requirement to provide liquidity to, purchase assets of or guarantee performance of these VIEs unless noted in the following paragraphs.
No financial support was provided to any of the consolidated VIEs during the nine months ended September 30, 2021, and the year ended December 31, 2020, or is expected to be provided in the future that was not previously contractually required.
Receivables Financing – DERF/DEPR/DEFR
DERF, DEPR and DEFR are bankruptcy remote, special purpose subsidiaries of Duke Energy Carolinas, Duke Energy Progress and Duke Energy Florida, respectively. DERF, DEPR and DEFR are wholly owned LLCs with separate legal existence from their parent companies, and their assets are not generally available to creditors of their parent companies. On a revolving basis, DERF, DEPR and DEFR buy certain accounts receivable arising from the sale of electricity and related services from their parent companies.
DERF, DEPR and DEFR borrow amounts under credit facilities to buy these receivables. Borrowing availability from the credit facilities is limited to the amount of qualified receivables purchased, which generally exclude receivables past due more than a predetermined number of days and reserves for expected past-due balances. The sole source of funds to satisfy the related debt obligations is cash collections from the receivables. Amounts borrowed under the credit facilities for DERF and DEPR are reflected on the Condensed Consolidated Balance Sheets as Long-Term Debt. Amounts borrowed under the credit facilities for DEFR are reflected on the Condensed Consolidated Balance Sheets as Current maturities of long-term debt.
The most significant activity that impacts the economic performance of DERF, DEPR and DEFR are the decisions made to manage delinquent receivables. Duke Energy Carolinas, Duke Energy Progress and Duke Energy Florida are considered the primary beneficiaries and consolidate DERF, DEPR and DEFR, respectively, as they make those decisions.
Receivables Financing – CRC
CRC is a bankruptcy remote, special purpose entity indirectly owned by Duke Energy. On a revolving basis, CRC buys certain accounts receivable arising from the sale of electricity, natural gas and related services from Duke Energy Ohio and Duke Energy Indiana. CRC borrows amounts under a credit facility to buy the receivables from Duke Energy Ohio and Duke Energy Indiana. Borrowing availability from the credit facility is limited to the amount of qualified receivables sold to CRC, which generally exclude receivables past due more than a predetermined number of days and reserves for expected past-due balances. The sole source of funds to satisfy the related debt obligation is cash collections from the receivables. Amounts borrowed under the credit facility are reflected on Duke Energy's Condensed Consolidated Balance Sheets as Long-Term Debt.
The proceeds Duke Energy Ohio and Duke Energy Indiana receive from the sale of receivables to CRC are approximately 75% cash and 25% in the form of a subordinated note from CRC. The subordinated note is a retained interest in the receivables sold. Depending on collection experience, additional equity infusions to CRC may be required by Duke Energy to maintain a minimum equity balance of $3 million.
CRC is considered a VIE because (i) equity capitalization is insufficient to support its operations, (ii) power to direct the activities that most significantly impact the economic performance of the entity is not held by the equity holder and (iii) deficiencies in net worth of CRC are funded by Duke Energy. The most significant activities that impact the economic performance of CRC are decisions made to manage delinquent receivables. Duke Energy is considered the primary beneficiary and consolidates CRC as it makes these decisions. Neither Duke Energy Ohio nor Duke Energy Indiana consolidate CRC.
Receivables Financing – Credit Facilities
The following table summarizes the amounts and expiration dates of the credit facilities and associated restricted receivables described above.
Duke Energy
Duke Energy Duke Energy Duke Energy
Carolinas Progress Florida
(in millions) CRC DERF DEPR DEFR
Expiration date February 2023 December 2022 April 2023 April 2023
Credit facility amount $ 350  $ 475  $ 350  $ 250 
Amounts borrowed at September 30, 2021 350  475  350  250 
Amounts borrowed at December 31, 2020 350  364  250  250 
Restricted Receivables at September 30, 2021 535  915  532  443 
Restricted Receivables at December 31, 2020 547  696  500  397 
Nuclear Asset-Recovery Bonds – DEFPF
DEFPF is a bankruptcy remote, wholly owned special purpose subsidiary of Duke Energy Florida. DEFPF was formed in 2016 for the sole purpose of issuing nuclear asset-recovery bonds to finance Duke Energy Florida's unrecovered regulatory asset related to Crystal River Unit 3.
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FINANCIAL STATEMENTS VARIABLE INTEREST ENTITIES

In 2016, DEFPF issued senior secured bonds and used the proceeds to acquire nuclear asset-recovery property from Duke Energy Florida. The nuclear asset-recovery property acquired includes the right to impose, bill, collect and adjust a non-bypassable nuclear asset-recovery charge from all Duke Energy Florida retail customers until the bonds are paid in full and all financing costs have been recovered. The nuclear asset-recovery bonds are secured by the nuclear asset-recovery property and cash collections from the nuclear asset-recovery charges are the sole source of funds to satisfy the debt obligation. The bondholders have no recourse to Duke Energy Florida.
DEFPF is considered a VIE primarily because the equity capitalization is insufficient to support its operations. Duke Energy Florida has the power to direct the significant activities of the VIE as described above and therefore Duke Energy Florida is considered the primary beneficiary and consolidates DEFPF.
The following table summarizes the impact of DEFPF on Duke Energy Florida's Condensed Consolidated Balance Sheets.
(in millions) September 30, 2021 December 31, 2020
Receivables of VIEs $ 6  $
Regulatory Assets: Current 54  53 
Current Assets: Other 17  39 
Other Noncurrent Assets: Regulatory assets 896  937 
Current Liabilities: Other 2  10 
Current maturities of long-term debt 56  55 
Long-Term Debt 946  1,002 
Commercial Renewables
Certain of Duke Energy’s renewable energy facilities are VIEs due to Duke Energy issuing guarantees for debt service and operations and maintenance reserves in support of debt financings. Assets are restricted and cannot be pledged as collateral or sold to third parties without prior approval of debt holders. Additionally, Duke Energy has VIEs associated with tax equity arrangements entered into with third-party investors in order to finance the cost of renewable assets eligible for tax credits. The activities that most significantly impacted the economic performance of these renewable energy facilities were decisions associated with siting, negotiating PPAs and Engineering, Procurement and Construction agreements, and decisions associated with ongoing operations and maintenance-related activities. Duke Energy is considered the primary beneficiary and consolidates the entities as it is responsible for all of these decisions.
The table below presents material balances reported on Duke Energy's Condensed Consolidated Balance Sheets related to Commercial Renewables VIEs.
(in millions) September 30, 2021 December 31, 2020
Current Assets: Other $ 330  $ 257 
Property, Plant and Equipment: Cost 7,315  6,394 
Accumulated depreciation and amortization (1,414) (1,242)
Other Noncurrent Assets: Other 110  67 
Current maturities of long-term debt 165  167 
Long-Term Debt 1,552  1,569 
Other Noncurrent Liabilities: AROs 167  148 
Other Noncurrent Liabilities: Other 341  316 
NON-CONSOLIDATED VIEs
The following tables summarize the impact of non-consolidated VIEs on the Condensed Consolidated Balance Sheets.
September 30, 2021
Duke Energy Duke Duke
Pipeline Commercial Energy Energy
(in millions) Investments Renewables Total Ohio Indiana
Receivables from affiliated companies $   $   $   $ 47  $ 77 
Investments in equity method unconsolidated affiliates 15  465  480     
Deferred tax asset 58    58     
Total assets $ 73  $ 465  $ 538  $ 47  $ 77 
Other current liabilities 61  3  64     
Other noncurrent liabilities 63  3  66     
Total liabilities $ 124  $ 6  $ 130  $   $  
Net (liabilities) assets $ (51) $ 459  $ 408  $ 47  $ 77 
81

FINANCIAL STATEMENTS VARIABLE INTEREST ENTITIES

December 31, 2020
Duke Energy Duke Duke
Pipeline Commercial Energy Energy
(in millions) Investments Renewables Total Ohio Indiana
Receivables from affiliated companies $ —  $ —  $ —  $ 83  $ 110 
Investments in equity method unconsolidated affiliates —  530  530  —  — 
Other noncurrent assets 31  —  31  —  — 
Total assets $ 31  $ 530  $ 561  $ 83  $ 110 
Other current liabilities 928  933  —  — 
Other noncurrent liabilities 10  18  —  — 
Total liabilities $ 936  $ 15  $ 951  $ —  $ — 
Net assets (liabilities) $ (905) $ 515  $ (390) $ 83  $ 110 
The Duke Energy Registrants are not aware of any situations where the maximum exposure to loss significantly exceeds the carrying values shown above except for certain renewable energy project entities guarantees for debt services and operations and maintenance, as discussed below.
Pipeline Investments
Duke Energy has investments in various joint ventures to construct and operate pipeline projects. These entities are considered VIEs due to having insufficient equity to finance their own activities without subordinated financial support. Duke Energy does not have the power to direct the activities that most significantly impact the economic performance, the obligation to absorb losses or the right to receive benefits of these VIEs and therefore does not consolidate these entities.
Duke Energy has a 47% ownership interest in ACP. For the three and nine months ended September 30, 2020, the ACP investment was considered a significant subsidiary because its loss exceeded 10% of Duke Energy’s income. ACP's net loss for the three and nine months ended September 30, 2020, was $163 million and $4,505 million, respectively.
In 2020, Duke Energy determined that it would no longer invest in the construction of the ACP pipeline. In February 2021, Duke Energy paid approximately $855 million to fund ACP's outstanding debt, relieving Duke Energy of its guarantee. See Notes 1 and 3 for further information regarding this transaction.
Commercial Renewables
Duke Energy has investments in various renewable energy project entities. Duke Energy has a 50% ownership in a VIE, which owns a portfolio of wind projects. This entity is a VIE as a result of Duke Energy issuing guarantees for debt service and operations and maintenance reserves in support of debt financings. Duke Energy does not consolidate this VIE because power to direct and control key activities is shared jointly by Duke Energy and the other owner. Duke Energy also has equity ownership in an entity, which owns a portfolio of fuel cell projects. Duke Energy does not consolidate the fuel cell portfolio as it does not have the power to direct the activities that most significantly impact the economic performance of the entity.
OVEC
Duke Energy Ohio’s 9% ownership interest in OVEC is considered a non-consolidated VIE due to OVEC having insufficient equity to finance its activities without subordinated financial support. The activities that most significantly impact OVEC's economic performance include fuel strategy and supply activities and decisions associated with ongoing operations and maintenance-related activities. Duke Energy Ohio does not have the unilateral power to direct these activities, and therefore, does not consolidate OVEC.
As a counterparty to an Inter-Company Power Agreement (ICPA), Duke Energy Ohio has a contractual arrangement to receive entitlements to capacity and energy from OVEC’s power plants through June 2040 commensurate with its power participation ratio, which is equivalent to Duke Energy Ohio's ownership interest. Costs, including fuel, operating expenses, fixed costs, debt amortization and interest expense, are allocated to counterparties to the ICPA based on their power participation ratio. The value of the ICPA is subject to variability due to fluctuation in power prices and changes in OVEC's cost of business. Duke Energy cannot predict the outcome in this matter. See Note 3 for additional information.
CRC
See discussion under Consolidated VIEs for additional information related to CRC.
Amounts included in Receivables from affiliated companies in the above table for Duke Energy Ohio and Duke Energy Indiana reflect their retained interest in receivables sold to CRC. These subordinated notes held by Duke Energy Ohio and Duke Energy Indiana are stated at fair value.
The following table shows the gross and net receivables sold.
Duke Energy Ohio Duke Energy Indiana
(in millions) September 30, 2021 December 31, 2020 September 30, 2021 December 31, 2020
Receivables sold $ 218  $ 270  $ 328  $ 344 
Less: Retained interests 47  83  77  110 
Net receivables sold $ 171  $ 187  $ 251  $ 234 
82

FINANCIAL STATEMENTS VARIABLE INTEREST ENTITIES

The following table shows sales and cash flows related to receivables sold.
Duke Energy Ohio Duke Energy Indiana
Three Months Ended Nine Months Ended Three Months Ended Nine Months Ended
September 30, September 30, September 30, September 30,
(in millions) 2021 2020 2021 2020 2021 2020 2021 2020
Sales
Receivables sold $ 486  $ 462  $ 1,490  $ 1,428  $ 794  $ 717  $ 2,176  $ 1,947 
Loss recognized on sale 2  7  4  10 
Cash flows
Cash proceeds from receivables sold $ 490  $ 449  $ 1,519  $ 1,439  $ 798  $ 689  $ 2,199  $ 1,941 
Collection fees received   1    —  1 
Return received on retained interests 1  3  1  4 
Cash flows from sales of receivables are reflected within Cash Flows From Operating Activities and Cash Flows from Investing Activities on Duke Energy Ohio’s and Duke Energy Indiana’s Condensed Consolidated Statements of Cash Flows.
12. REVENUE
Duke Energy earns substantially all of its revenues through its reportable segments, Electric Utilities and Infrastructure, Gas Utilities and Infrastructure and Commercial Renewables.
Electric Utilities and Infrastructure
Electric Utilities and Infrastructure earns the majority of its revenues through retail and wholesale electric service through the generation, transmission, distribution and sale of electricity. Duke Energy generally provides retail and wholesale electric service customers with their full electric load requirements or with supplemental load requirements when the customer has other sources of electricity.
The majority of wholesale revenues are full requirements contracts where the customers purchase the substantial majority of their energy needs and do not have a fixed quantity of contractually required energy or capacity. As such, related forecasted revenues are considered optional purchases. Supplemental requirements contracts that include contracted blocks of energy and capacity at contractually fixed prices have the following estimated remaining performance obligations:
Remaining Performance Obligations
(in millions) 2021 2022 2023 2024 2025 Thereafter Total
Progress Energy $ 24  $ 107  $ 44  $ 45  $ $ 51  $ 278 
Duke Energy Progress 2  —  —  26 
Duke Energy Florida 22  99  36  37  51  252 
Duke Energy Indiana   14  15  25  64 
Revenues for block sales are recognized monthly as energy is delivered and stand-ready service is provided, consistent with invoiced amounts and unbilled estimates.
Gas Utilities and Infrastructure
Gas Utilities and Infrastructure earns its revenue through retail and wholesale natural gas service through the transportation, distribution and sale of natural gas. Duke Energy generally provides retail and wholesale natural gas service customers with all natural gas load requirements. Additionally, while natural gas can be stored, substantially all natural gas provided by Duke Energy is consumed by customers simultaneously with receipt of delivery.
Fixed-capacity payments under long-term contracts for the Gas Utilities and Infrastructure segment include minimum margin contracts and supply arrangements with municipalities and power generation facilities. Revenues for related sales are recognized monthly as natural gas is delivered and stand-ready service is provided, consistent with invoiced amounts and unbilled estimates. Estimated remaining performance obligations are as follows:
Remaining Performance Obligations
(in millions) 2021 2022 2023 2024 2025 Thereafter Total
Piedmont $ 17  $ 67  $ 64  $ 61  $ 60  $ 336  $ 605 
Commercial Renewables
Commercial Renewables earns the majority of its revenues through long-term PPAs and generally sells all of its wind and solar facility output, electricity and Renewable Energy Certificates (RECs) to customers. Some of these PPAs have been accounted for as leases. For PPAs that are not accounted for as leases, the delivery of electricity and the delivery of RECs are considered separate performance obligations.
Other
The remainder of Duke Energy’s operations is presented as Other, which does not include material revenues from contracts with customers.
83

FINANCIAL STATEMENTS REVENUE

Disaggregated Revenues
Disaggregated revenues are presented as follows:
Three Months Ended September 30, 2021
Duke Duke Duke Duke Duke
(in millions) Duke Energy Progress Energy Energy Energy Energy
By market or type of customer Energy Carolinas Energy Progress Florida Ohio Indiana Piedmont
Electric Utilities and Infrastructure
   Residential $ 2,955  $ 892  $ 1,525  $ 619  $ 906  $ 223  $ 316  $  
   General 1,873  685  826  400  426  119  240   
   Industrial 861  360  264  195  69  35  202   
   Wholesale 619  111  399  324  75  19  89   
   Other revenues 252  72  198  118  80  17  23   
Total Electric Utilities and Infrastructure revenue from contracts with customers $ 6,560  $ 2,120  $ 3,212  $ 1,656  $ 1,556  $ 413  $ 870  $  
Gas Utilities and Infrastructure
   Residential $ 129  $   $   $   $   $ 62  $   $ 66 
   Commercial 78          24    58 
   Industrial 30          3    26 
   Power Generation               23 
   Other revenues 33          4    9 
Total Gas Utilities and Infrastructure revenue from contracts with customers $ 270  $   $   $   $   $ 93  $   $ 182 
Commercial Renewables
Revenue from contracts with customers $ 56  $   $   $   $   $   $   $  
Other
Revenue from contracts with customers $ 8  $   $   $   $   $   $   $  
Total revenue from contracts with customers $ 6,894  $ 2,120  $ 3,212  $ 1,656  $ 1,556  $ 506  $ 870  $ 182 
Other revenue sources(a)
$ 57  $ (16) $ 21  $ 11  $ 5  $   $ 16  $ 13 
Total revenues $ 6,951  $ 2,104  $ 3,233  $ 1,667  $ 1,561  $ 506  $ 886  $ 195 
(a)Other revenue sources include revenues from leases, derivatives and alternative revenue programs that are not considered revenues from contracts with customers. Alternative revenue programs in certain jurisdictions include regulatory mechanisms that periodically adjust for over or under collection of related revenues.
84

FINANCIAL STATEMENTS REVENUE

Three Months Ended September 30, 2020
Duke Duke Duke Duke Duke
(in millions) Duke Energy Progress Energy Energy Energy Energy
By market or type of customer Energy Carolinas Energy Progress Florida Ohio Indiana Piedmont
Electric Utilities and Infrastructure
   Residential $ 2,936  $ 883  $ 1,550  $ 616  $ 934  $ 213  $ 289  $ — 
   General 1,804  664  805  384  421  119  212  — 
   Industrial 797  342  245  179  66  35  175  — 
   Wholesale 603  117  412  358  54  10  64  — 
   Other revenues 238  62  167  75  92  23  22  — 
Total Electric Utilities and Infrastructure revenue from contracts with customers $ 6,378  $ 2,068  $ 3,179  $ 1,612  $ 1,567  $ 400  $ 762  $ — 
Gas Utilities and Infrastructure
   Residential $ 112  $ —  $ —  $ —  $ —  $ 55  $ —  $ 57 
   Commercial 64  —  —  —  —  20  —  44 
   Industrial 24  —  —  —  —  —  22 
   Power Generation —  —  —  —  —  —  —  10 
   Other revenues 16  —  —  —  —  —  11 
Total Gas Utilities and Infrastructure revenue from contracts with customers $ 216  $ —  $ —  $ —  $ —  $ 81  $ —  $ 144 
Commercial Renewables
Revenue from contracts with customers $ 57  $ —  $ —  $ —  $ —  $ —  $ —  $ — 
Other
Revenue from contracts with customers $ $ —  $ —  $ —  $ —  $ —  $ —  $ — 
Total revenue from contracts with customers $ 6,658  $ 2,068  $ 3,179  $ 1,612  $ 1,567  $ 481  $ 762  $ 144 
Other revenue sources(a)
$ 63  $ (10) $ 18  $ 14  $ —  $ (8) $ (1) $ 18 
Total revenues $ 6,721  $ 2,058  $ 3,197  $ 1,626  $ 1,567  $ 473  $ 761  $ 162 
(a)Other revenue sources include revenues from leases, derivatives and alternative revenue programs that are not considered revenues from contracts with customers. Alternative revenue programs in certain jurisdictions include regulatory mechanisms that periodically adjust for over or under collection of related revenues.
85

FINANCIAL STATEMENTS REVENUE

Nine Months Ended September 30, 2021
Duke Duke Duke Duke Duke
(in millions) Duke Energy Progress Energy Energy Energy Energy
By market or type of customer Energy Carolinas Energy Progress Florida Ohio Indiana Piedmont
Electric Utilities and Infrastructure
   Residential $ 7,753  $ 2,368  $ 3,903  $ 1,657  $ 2,246  $ 589  $ 894  $  
   General 4,805  1,685  2,170  1,036  1,134  329  619   
   Industrial 2,228  872  700  500  200  99  558   
   Wholesale 1,644  341  1,056  901  155  45  202   
   Other revenues 712  208  509  272  237  61  64   
Total Electric Utilities and Infrastructure revenue from contracts with customers $ 17,142  $ 5,474  $ 8,338  $ 4,366  $ 3,972  $ 1,123  $ 2,337  $  
Gas Utilities and Infrastructure
   Residential $ 747  $   $   $   $   $ 241  $   $ 505 
   Commercial 373          99    273 
   Industrial 110          14    96 
   Power Generation               69 
   Other revenues 100          21    34 
Total Gas Utilities and Infrastructure revenue from contracts with customers $ 1,330  $   $   $   $   $ 375  $   $ 977 
Commercial Renewables
Revenue from contracts with customers $ 163  $   $   $   $   $   $   $  
Other
Revenue from contracts with customers $ 20  $   $   $   $   $   $   $  
Total Revenue from contracts with customers $ 18,655  $ 5,474  $ 8,338  $ 4,366  $ 3,972  $ 1,498  $ 2,337  $ 977 
Other revenue sources(a)
$ 204  $ (44) $ 79  $ 51  $ 15  $ (4) $ 29  $ 39 
Total revenues $ 18,859  $ 5,430  $ 8,417  $ 4,417  $ 3,987  $ 1,494  $ 2,366  $ 1,016 
(a)Other revenue sources include revenues from leases, derivatives and alternative revenue programs that are not considered revenues from contracts with customers. Alternative revenue programs in certain jurisdictions include regulatory mechanisms that periodically adjust for over or under collection of related revenues.
86

FINANCIAL STATEMENTS REVENUE

Nine Months Ended September 30, 2020
Duke Duke Duke Duke Duke
(in millions) Duke Energy Progress Energy Energy Energy Energy
By market or type of customer Energy Carolinas Energy Progress Florida Ohio Indiana Piedmont
Electric Utilities and Infrastructure
   Residential $ 7,451  $ 2,316  $ 3,792  $ 1,578  $ 2,214  $ 558  $ 785  $ — 
   General 4,691  1,720  2,080  1,001  1,079  336  554  — 
   Industrial 2,148  871  673  487  186  103  502  — 
   Wholesale 1,535  332  1,018  877  141  22  163  — 
   Other revenues 713  184  476  208  268  62  63  — 
Total Electric Utilities and Infrastructure revenue from contracts with customers $ 16,538  $ 5,423  $ 8,039  $ 4,151  $ 3,888  $ 1,081  $ 2,067  $ — 
Gas Utilities and Infrastructure
   Residential $ 631  $ —  $ —  $ —  $ —  $ 214  $ —  $ 417 
   Commercial 308  —  —  —  —  86  —  222 
   Industrial 92  —  —  —  —  12  —  80 
   Power Generation —  —  —  —  —  —  —  27 
   Other revenues 58  —  —  —  —  12  —  46 
Total Gas Utilities and Infrastructure revenue from contracts with customers $ 1,089  $ —  $ —  $ —  $ —  $ 324  $ —  $ 792 
Commercial Renewables
Revenue from contracts with customers $ 170  $ —  $ —  $ —  $ —  $ —  $ —  $ — 
Other
Revenue from contracts with customers $ 20  $ —  $ —  $ —  $ —  $ —  $ —  $ — 
Total Revenue from contracts with customers $ 17,817  $ 5,423  $ 8,039  $ 4,151  $ 3,888  $ 1,405  $ 2,067  $ 792 
Other revenue sources(a)
$ 274  $ (7) $ 78  $ 56  $ $ (11) $ $ 79 
Total revenues $ 18,091  $ 5,416  $ 8,117  $ 4,207  $ 3,897  $ 1,394  $ 2,070  $ 871 
(a)Other revenue sources include revenues from leases, derivatives and alternative revenue programs that are not considered revenues from contracts with customers. Alternative revenue programs in certain jurisdictions include regulatory mechanisms that periodically adjust for over or under collection of related revenues.
87

FINANCIAL STATEMENTS REVENUE

As described in Note 1, Duke Energy adopted the new guidance for credit losses effective January 1, 2020, using the modified retrospective method of adoption, which does not require restatement of prior year reported results. The following table presents the reserve for credit losses for trade and other receivables based on adoption of the new standard.
Three Months Ended September 30, 2020 and 2021
Duke Duke Duke Duke Duke
Duke Energy Progress Energy Energy Energy Energy
(in millions) Energy Carolinas Energy Progress Florida Ohio Indiana Piedmont
Balance at June 30, 2020 $ 102  $ 14  $ 29  $ 14  $ 14  $ $ $
Write-Offs 12  (2) 15  13  —  —  — 
Credit Loss Expense (9) —  (16) (15) —  —  — 
Other Adjustments 28  10  —  —  —  — 
Balance at September 30, 2020 $ 133  $ 22  $ 37  $ 21  $ 16  $ 5  $ 3  $ 9 
Balance at June 30, 2021 $ 123  $ 42  $ 36  $ 21  $ 16  $ $ $ 13 
Write-Offs (13) (3) (6) (3) (3) —  —  (4)
Credit Loss Expense 11  —  — 
Other Adjustments (1) —  —  —  —  — 
Balance at September 30, 2021 $ 123  $ 42  $ 36  $ 21  $ 16  $ 4  $ 3  $ 15 
Nine Months Ended September 30, 2020 and 2021
Duke Duke Duke Duke Duke
Duke Energy Progress Energy Energy Energy Energy
(in millions) Energy Carolinas Energy Progress Florida Ohio Indiana Piedmont
Balance at December 31, 2019 $ 76  $ 10  $ 16  $ $ $ $ $
Cumulative Change in Accounting Principle —  — 
Write-Offs (7) (8) —  —  —  (5)
Credit Loss Expense 24  (5) — 
Other Adjustments 35  10  —  —  —  — 
Balance at September 30, 2020 $ 133  $ 22  $ 37  $ 21  $ 16  $ $ $
Balance at December 31, 2020 $ 146  $ 23  $ 37  $ 23  $ 14  $ $ $ 12 
Write-Offs (39) (10) (20) (11) (9) —  —  (7)
Credit Loss Expense 40  20  19  10  —  — 
Other Adjustments (24) —  —  —  — 
Balance at September 30, 2021 $ 123  $ 42  $ 36  $ 21  $ 16  $ 4  $ 3  $ 15 
Trade and other receivables are evaluated based on an estimate of the risk of loss over the life of the receivable and current and historical conditions using supportable assumptions. Management evaluates the risk of loss for trade and other receivables by comparing the historical write-off amounts to total revenue over a specified period. Historical loss rates are adjusted due to the impact of current conditions, as well as forecasted conditions over a reasonable time period. The calculated write-off rate can be applied to the receivable balance for which an established reserve does not already exist. Management reviews the assumptions and risk of loss periodically for trade and other receivables.
The aging of trade receivables is presented in the table below. Duke Energy considers receivables greater than 30 days outstanding past due.
September 30, 2021
Duke Duke Duke Duke Duke
Duke Energy Progress Energy Energy Energy Energy
(in millions) Energy Carolinas Energy Progress Florida Ohio Indiana Piedmont
Unbilled Revenue(a)(b)
$ 826  $ 308  $ 242  $ 125  $ 117  $ 5  $ 27  $ 7 
0-30 days 2,201  689  910  521  388  65  41  80 
30-60 days 194  74  63  37  26  7  5  6 
60-90 days 57  30  14  6  8  1  1  3 
90+ days 161  68  27  5  22  31  10  9 
Deferred Payment Arrangements(c)
113  66  29  21  8  2    6 
Trade and Other Receivables $ 3,552  $ 1,235  $ 1,285  $ 715  $ 569  $ 111  $ 84  $ 111 
88

FINANCIAL STATEMENTS REVENUE

December 31, 2020
Duke Duke Duke Duke Duke
Duke Energy Progress Energy Energy Energy Energy
(in millions) Energy Carolinas Energy Progress Florida Ohio Indiana Piedmont
Unbilled Revenue(a)(b)
$ 969  $ 328  $ 283  $ 167  $ 116  $ $ 16  $ 86 
0-30 days 1,789  445  707  398  307  60  26  149 
30-60 days 185  80  54  25  29 
60-90 days 22  10 
90+ days 119  16  32  23  30  12 
Deferred Payment Arrangements(c)
215  96  80  52  28  —  — 
Trade and Other Receivables $ 3,299  $ 966  $ 1,166  $ 655  $ 509  $ 102  $ 58  $ 262 
(a)Unbilled revenues are recognized by applying customer billing rates to the estimated volumes of energy or natural gas delivered but not yet billed and are included within Receivables and Receivables of VIEs on the Condensed Consolidated Balance Sheets.
(b)Duke Energy Ohio and Duke Energy Indiana sell, on a revolving basis, nearly all of their retail accounts receivable, including receivables for unbilled revenues, to an affiliate, CRC, and account for the transfers of receivables as sales. Accordingly, the receivables sold are not reflected on the Condensed Consolidated Balance Sheets of Duke Energy Ohio and Duke Energy Indiana. See Note 11 for further information. These receivables for unbilled revenues are $64 million and $115 million for Duke Energy Ohio and Duke Energy Indiana, respectively, as of September 30, 2021, and $87 million and $134 million for Duke Energy Ohio and Duke Energy Indiana, respectively, as of December 31, 2020.
(c)Due to certain customer financial hardships created by the COVID-19 pandemic and resulting stay-at-home orders, Duke Energy permitted customers to defer payment of past-due amounts through an installment payment plan over a period of several months.
13. STOCKHOLDERS' EQUITY
Basic EPS is computed by dividing net income available to Duke Energy common stockholders, as adjusted for distributed and undistributed earnings allocated to participating securities and accumulated preferred dividends, by the weighted average number of common shares outstanding during the period. Diluted EPS is computed by dividing net income available to Duke Energy common stockholders, as adjusted for distributed and undistributed earnings allocated to participating securities and accumulated preferred dividends, by the diluted weighted average number of common shares outstanding during the period. Diluted EPS reflects the potential dilution that could occur if securities or other agreements to issue common stock, such as equity forward sale agreements, were exercised or settled. Duke Energy’s participating securities are restricted stock units that are entitled to dividends declared on Duke Energy common stock during the restricted stock unit’s vesting periods. Dividends declared on preferred stock are recorded on the Condensed Consolidated Statements of Operations as a reduction of net income to arrive at net income available to Duke Energy common stockholders. Dividends accumulated on preferred stock are an adjustment to net income used in the calculation of basic and diluted EPS.
The following table presents Duke Energy’s basic and diluted EPS calculations, the weighted average number of common shares outstanding and common and preferred share dividends declared.
Three Months Ended September 30, Nine Months Ended September 30,
(in millions, except per share amounts) 2021 2020 2021 2020
Net income available to Duke Energy common stockholders $ 1,366  $ 1,265  $ 3,070  $ 1,347 
Accumulated preferred stock dividends adjustment 12  12  12  13 
Less: Impact of participating securities 1  3 
Income from continuing operations available to Duke Energy common stockholders $ 1,377  $ 1,276  $ 3,079  $ 1,358 
Weighted average common shares outstanding – basic and diluted 769  735  769  735 
EPS available to Duke Energy common stockholders
Basic and diluted $ 1.79  $ 1.74  $ 4.00  $ 1.85 
Potentially dilutive items excluded from the calculation(a)
2  2 
Dividends declared per common share $ 0.985  $ 0.965  $ 2.915  $ 2.855 
Dividends declared on Series A preferred stock per depositary share(b)
$ 0.359  $ 0.359  $ 1.078  $ 1.078 
Dividends declared on Series B preferred stock per share(c)
$ 24.375  $ 24.375  $ 48.750  $ 49.292 
(a)Performance stock awards were not included in the dilutive securities calculation because the performance measures related to the awards had not been met.
(b)5.75% Series A Cumulative Redeemable Perpetual Preferred Stock dividends are payable quarterly in arrears on the 16th day of March, June, September and December. The preferred stock has a $25 liquidation preference per depositary share.
(c)4.875% Series B Fixed-Rate Reset Cumulative Redeemable Perpetual Preferred Stock dividends are payable semiannually in arrears on the 16th day of March and September. The preferred stock has a $1,000 liquidation preference per share.
89

FINANCIAL STATEMENTS EMPLOYEE BENEFIT PLANS

14. EMPLOYEE BENEFIT PLANS
DEFINED BENEFIT RETIREMENT PLANS
Duke Energy and certain subsidiaries maintain, and the Subsidiary Registrants participate in, qualified and non-qualified, non-contributory defined benefit retirement plans. Duke Energy's policy is to fund amounts on an actuarial basis to provide assets sufficient to meet benefit payments to be paid to plan participants.
Duke Energy monitors lump-sum benefit payment activity associated with its defined benefit retirement plans. Duke Energy does not believe it is probable that total lump-sum benefit payments will exceed the settlement threshold, defined as the sum of service cost and interest cost on projected benefit obligation components of net periodic pension costs, for any of its defined benefit retirement plans in 2021. If Duke Energy believed it were probable that total lump-sum benefit payments would exceed the settlement threshold in 2021, then a settlement charge reflecting the recognition of a pro-rata portion of previously unrecognized actuarial losses, equal to the percentage of reduction in the projected benefit obligation resulting from total lump-sum benefit payments, would be recognized.
QUALIFIED PENSION PLANS
The following tables include the components of net periodic pension costs for qualified pension plans.
Three Months Ended September 30, 2021
Duke Duke Duke Duke Duke
Duke Energy Progress Energy Energy Energy Energy
(in millions) Energy Carolinas Energy Progress Florida Ohio Indiana Piedmont
Service cost $ 43  $ 14  $ 13  $ 7  $ 5  $ 2  $ 2  $ 1 
Interest cost on projected benefit obligation 55  13  17  8  10  2  5  2 
Expected return on plan assets (139) (36) (47) (21) (25) (7) (10) (5)
Amortization of actuarial loss 33  7  10  5  5  2  3  2 
Amortization of prior service credit (7) (2) (1)   (1)     (1)
Amortization of settlement charges 2  1  1          1 
Net periodic pension costs $ (13) $ (3) $ (7) $ (1) $ (6) $ (1) $   $  
Three Months Ended September 30, 2020
Duke Duke Duke Duke Duke
Duke Energy Progress Energy Energy Energy Energy
(in millions) Energy Carolinas Energy Progress Florida Ohio Indiana Piedmont
Service cost $ 41  $ 12  $ 12  $ $ $ $ $
Interest cost on projected benefit obligation 67  16  21  10  12 
Expected return on plan assets (143) (36) (48) (22) (25) (7) (11) (5)
Amortization of actuarial loss 32  10 
Amortization of prior service credit (8) (2) —  —  —  —  —  (2)
Amortization of settlement charges 11  — 
Net periodic pension costs $ —  $ $ —  $ $ (1) $ —  $ $ (1)
Nine Months Ended September 30, 2021
Duke Duke Duke Duke Duke
Duke Energy Progress Energy Energy Energy Energy
(in millions) Energy Carolinas Energy Progress Florida Ohio Indiana Piedmont
Service cost $ 131  $ 42  $ 38  $ 22  $ 16  $ 4  $ 7  $ 4 
Interest cost on projected benefit obligation 165  38  52  23  29  9  14  6 
Expected return on plan assets (418) (106) (141) (63) (76) (21) (30) (15)
Amortization of actuarial loss 100  22  29  14  15  5  10  7 
Amortization of prior service credit (22) (6) (2) (1) (1)   (1) (6)
Amortization of settlement charges 6  4  2  1        1 
Net periodic pension costs $ (38) $ (6) $ (22) $ (4) $ (17) $ (3) $   $ (3)
90

FINANCIAL STATEMENTS EMPLOYEE BENEFIT PLANS

Nine Months Ended September 30, 2020
Duke Duke Duke Duke Duke
Duke Energy Progress Energy Energy Energy Energy
(in millions) Energy Carolinas Energy Progress Florida Ohio Indiana Piedmont
Service cost $ 124  $ 38  $ 36  $ 20  $ 16  $ $ $
Interest cost on projected benefit obligation 202  47  64  29  35  12  17 
Expected return on plan assets (429) (108) (143) (66) (76) (21) (32) (16)
Amortization of actuarial loss 96  21  30  13  17 
Amortization of prior service credit (24) (6) (2) (1) (1) —  (1) (7)
Amortization of settlement charges 16  — 
Net periodic pension costs $ (15) $ —  $ (9) $ $ (8) $ (1) $ —  $ (4)
NON-QUALIFIED PENSION PLANS
Net periodic pension costs for non-qualified pension plans were not material for the three and nine months ended September 30, 2021, and 2020.
OTHER POST-RETIREMENT BENEFIT PLANS
Net periodic costs for OPEB plans were not material for the three and nine months ended September 30, 2021, and 2020.
15. INCOME TAXES
EFFECTIVE TAX RATES
The ETRs from continuing operations for each of the Duke Energy Registrants are included in the following table.
Three Months Ended Nine Months Ended
September 30, September 30,
2021 2020 2021 2020
Duke Energy 6.6  % 7.8  % 6.7  % (6.4) %
Duke Energy Carolinas 2.9  % 12.0  % 3.6  % 13.6  %
Progress Energy 12.9  % 10.4  % 11.5  % 13.4  %
Duke Energy Progress 6.3  % 3.1  % 5.9  % 10.0  %
Duke Energy Florida 19.1  % 21.4  % 19.1  % 20.3  %
Duke Energy Ohio 13.4  % 16.7  % 15.3  % 16.6  %
Duke Energy Indiana 15.8  % 19.6  % 16.3  % 19.4  %
Piedmont 25.0  % 16.7  % 8.4  % 3.7  %
The decrease in the ETR for Duke Energy for the three months ended September 30, 2021, was primarily due to an increase in the amortization of excess deferred taxes.
The increase in the ETR for Duke Energy for the nine months ended September 30, 2021, was primarily due to the cancellation of the ACP pipeline project recorded in the prior year, partially offset by an increase in the amortization of excess deferred taxes.
The decrease in the ETR for Duke Energy Carolinas for the three and nine months ended September 30, 2021, was primarily due to an increase in the amortization of excess deferred taxes.
The increase in the ETR for Progress Energy for the three months ended September 30, 2021, was primarily due to a decrease in the amortization of excess deferred taxes.
The decrease in the ETR for Progress Energy for the nine months ended September 30, 2021, was primarily due to an increase in the amortization of excess deferred taxes.
The increase in the ETR for Duke Energy Progress for the three months ended September 30, 2021, was primarily due to a decrease in the amortization of excess deferred taxes.
The decrease in the ETR for Duke Energy Progress for the nine months ended September 30, 2021, was primarily due to an increase in the amortization of excess deferred taxes.
The decrease in the ETR for Duke Energy Florida for the three and nine months ended September 30, 2021, was primarily due to unfavorable tax adjustments in the prior year.
The decrease in the ETR for Duke Energy Ohio for the three and nine months ended September 30, 2021, was primarily due to an increase in the amortization of excess deferred taxes.
The decrease in the ETR for Duke Energy Indiana for the three and nine months ended September 30, 2021, was primarily due to an increase in the amortization of excess deferred taxes.
91

FINANCIAL STATEMENTS INCOME TAXES

The increase in the ETR for Piedmont for the three months ended September 30, 2021, was primarily due to a certain favorable tax credits.
The increase in the ETR for Piedmont for the nine months ended September 30, 2021, was primarily due to a decrease in AFUDC equity.
16. SUBSEQUENT EVENTS
For information on subsequent events related to regulatory matters, commitments and contingencies and debt and credit facilities, see Notes 3, 4 and 5.
92

MD&A DUKE ENERGY

ITEM 2. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
The following combined Management’s Discussion and Analysis of Financial Condition and Results of Operations is separately filed by Duke Energy and Duke Energy Carolinas, Progress Energy, Duke Energy Progress, Duke Energy Florida, Duke Energy Ohio, Duke Energy Indiana and Piedmont. However, none of the registrants make any representation as to information related solely to Duke Energy or the Subsidiary Registrants of Duke Energy other than itself.
DUKE ENERGY
Duke Energy is an energy company headquartered in Charlotte, North Carolina. Duke Energy operates in the U.S. primarily through its subsidiaries, Duke Energy Carolinas, Duke Energy Progress, Duke Energy Florida, Duke Energy Ohio, Duke Energy Indiana and Piedmont. When discussing Duke Energy’s consolidated financial information, it necessarily includes the results of the Subsidiary Registrants, which, along with Duke Energy, are collectively referred to as the Duke Energy Registrants.
Management’s Discussion and Analysis should be read in conjunction with the Condensed Consolidated Financial Statements and Notes for the nine months ended September 30, 2021, and with Duke Energy’s Annual Report on Form 10-K for the year ended December 31, 2020.
Executive Overview
Advancing Our Clean Energy Transformation
During the third quarter, we continued to execute on our clean energy transformation, delivering strong, sustainable value for shareholders, customers, communities and employees.
In October 2021, North Carolina House Bill 951 was signed into law after legislative leaders announced bipartisan support for new state policy that would accelerate a clean energy transition for generation serving customers in the Carolinas, including providing a framework for a goal of 70% carbon reduction in electric generation from 2005 levels by 2030 and carbon neutrality by 2050 while continuing to prioritize affordability and reliability for our customers, who are located in both North and South Carolina. The legislation establishes a framework overseen by the NCUC to advance state CO2 emission reductions through the use of least cost planning, including stakeholder involvement, and also introduces modernized recovery mechanisms, including multi-year rate plans, that promote more efficient recovery of investments and align incentives between the company and the state’s energy policy objectives. The goals for a clean energy transition are generally consistent with Duke Energy Carolinas' and Duke Energy Progress' resource planning filings with the PSCSC.
Also in October 2021, the Southeast Energy Exchange Market (SEEM) received clearance from the FERC. The new SEEM platform will facilitate sub-hourly, bilateral trading, allowing participants to buy and sell power close to the time the energy is consumed, utilizing available unreserved transmission. Southeastern electricity customers are expected to see cost, reliability and environmental benefits.
In a significant move to support the company’s path to net-zero strategy, in September 2021 we completed the first phase of the investment of a 19.9% minority interest in Duke Energy Indiana by an affiliate of GIC, transferring 11.05% interest in exchange for approximately $1.025 billion. The proceeds from the $2.05 billion investment are expected to address common equity needs through 2025 to partially fund the company’s $59 billion capital and investment expenditure plan. This plan includes grid improvement, investments in clean energy and an improved customer experience – keys to our strategy to reduce carbon emissions from electricity generation to net-zero by 2050.
In September 2021, we announced Ledyard Windpower, a 207-MW project and our first wind farm in Iowa. Once in operation next year, this project will increase the company’s U.S. wind capacity to over 3,100 MW.
In August 2021, we announced a partnership with Accenture and Microsoft to develop a novel technology platform with the intent of measuring baseline methane emissions from natural gas distribution systems with a high level of accuracy in near real time. Once deployed, we expect the use of satellite technology and the new platform will increase the speed of a field response team’s ability to identify and repair methane leaks along distribution lines and systems.
Regulatory Activity. During the third quarter of 2021, we continued to move our regulatory strategy forward. See Note 3 to the Condensed Consolidated Financial Statements, "Regulatory Matters," for additional information.
In October 2021, Duke Energy Ohio filed a request to review the company’s electric distribution rates, seeking approval to increase current electric distribution rates by approximately $55 million. Duke Energy Ohio has invested more than $800 million in a variety of capital projects across southwest Ohio since it last requested a regulatory review of its electric distribution rates in 2017. Also, in October 2021, Duke Energy Kentucky reached a constructive natural gas rate case settlement with the Attorney General, subject to review and approval of the KPSC.
In September 2021, Piedmont Natural Gas, the Public Staff of the NCUC, the Carolina Utility Customers Association, Inc., and the Carolina Industrial Group for Fair Utility Rates IV, filed a stipulation resolving all issues between these parties related to Piedmont’s rate case filed in March 2021. This constructive outcome provided for a return on equity of 9.60% and 51.60% equity component of the capital structure resulting in an overall rate of return of 6.90%, with an increase in pretax income (base rates) of approximately $67 million. The Stipulation is subject to the review and approval of the NCUC.
We received approximately $418 million of coal ash insurance litigation proceeds from our settlements with insurer-defendants. Proceeds will be distributed in accordance with the terms of the CCR settlement agreement.
Matters Impacting Future Results
The matters discussed herein could materially impact the future operating results, financial condition and cash flows of the Duke Energy Registrants and Business Segments.
93

MD&A MATTERS IMPACTING FUTURE RESULTS

Regulatory Matters
Coal Ash Costs
As a result of the NCDEQ settlement on December 31, 2019, Duke Energy Carolinas and Duke Energy Progress agreed to excavate seven of the nine remaining coal ash basins in North Carolina with ash moved to on-site lined landfills. At the two remaining basins, uncapped basin ash will be excavated and moved to off-site lined landfills. The majority of spend is expected to occur over the next 15-20 years. In January 2021, Duke Energy Carolinas and Duke Energy Progress reached a settlement agreement on recovery of coal ash costs as outlined in Note 3, "Regulatory Matters." The company agreed not to seek recovery of approximately $1 billion of deferred coal ash expenditures and Duke Energy Carolinas and Duke Energy Progress took a charge of approximately $500 million each in 2020. On March 31, 2021, and April 16, 2021, the NCUC approved the coal ash settlement for Duke Energy Carolinas and Duke Energy Progress, respectively.
Duke Energy Indiana has interpreted the CCR rule to identify the coal ash basin sites impacted and has assessed the amounts of coal ash subject to the rule and a method of compliance. In 2020, the Hoosier Environmental Council filed a petition challenging the Indiana Department of Environmental Management's (IDEM) partial approval of five of Duke Energy Indiana’s ash pond site closure plans at Gallagher Station. The petition does not challenge the other 13 basin closures approved by IDEM at other Indiana stations. Interpretation of the requirements of the CCR rule is subject to further legal challenges and regulatory approvals, which could result in additional ash basin closure requirements, higher costs of compliance and greater AROs. Additionally, Duke Energy Indiana has retired facilities that are not subject to the CCR rule. Duke Energy Indiana may incur costs at these facilities to comply with environmental regulations or to mitigate risks associated with on-site storage of coal ash.
MGP
Duke Energy Ohio and other parties have filed with the PUCO a Stipulation and Recommendation that would resolve all open issues regarding manufactured gas plant remediation costs incurred between 2013 and 2019, including Duke Energy Ohio's request for additional deferral authority beyond 2019, and the pending issues related to the Tax Act as it relates to Duke Energy Ohio's natural gas operations. These impacts, if approved by the PUCO, are not expected to have a material impact on Duke Energy Ohio's financial statements. Failure to approve the Stipulation and Recommendation, disallowance of costs incurred, failure to complete the work by the deadline or failure to obtain an extension from the PUCO could result in an adverse impact.
For additional information, see Notes 3 and 4 to the Condensed Consolidated Financial Statements, “Regulatory Matters” and "Commitments and Contingencies," respectively.
Commercial Renewables
Duke Energy continues to monitor recoverability of renewable merchant plants located in the Electric Reliability Council of Texas West market and in the PJM West market, due to fluctuating market pricing and long-term forecasted energy prices. Based on the most recent recoverability test, the carrying value approximated the aggregate estimated future undiscounted cash flows for the assets under review. A continued decline in energy market pricing or other factors unfavorably impacting the economics would likely result in a future impairment. Impairment of these assets could result in adverse impacts. For additional information, see Note 2 to the Condensed Consolidated Financial Statements, "Business Segments."
In February 2021, a severe winter storm impacted certain Commercial Renewables assets in Texas. Extreme weather conditions limited the ability for these solar and wind facilities to generate and sell electricity into the Electric Reliability Council of Texas market. Lost revenues and higher than expected purchased power costs have negatively impacted the operating results of these generating units. The financial impact of the storm is expected to be material to the Commercial Renewables segment's 2021 operating results. In addition, Duke Energy has been named in multiple lawsuits arising out of this winter storm. For more information, see Notes 2 and 4 to the Condensed Consolidated Financial Statements, "Business Segments" and "Commitments and Contingencies," respectively.
COVID-19
Duke Energy continues to monitor the impacts of the COVID-19 pandemic on its results of operations, financial position and cash flows as a result of the economic slowdown caused by reduced operations of businesses and governmental agencies and the corresponding reduction in the demand for energy. Duke Energy has experienced improvement in energy sales, aging of receivables and operating results in recent periods and continues efforts to partially offset these impacts. Additionally, in light of learnings from COVID-19 regarding workforce deployment and technology capabilities, the company has reviewed the long-term real estate and future workforce strategy. The review has resulted in an initiative that will reduce physical workspace and includes reassessments of lease terms and lease modifications, termination penalties, as well as, asset impairments on property, plant and equipment and a change in workforce roles and responsibilities. For more information, see Notes 1 and 3 to the Condensed Consolidated Financial Statements, "Organization and Basis of Presentation" and "Regulatory Matters," respectively.
Activist Investor
On May 17, 2021, Elliott, who has indicated it holds an economic interest in outstanding Duke Energy common stock, publicly released a letter it had sent to the Board, which advocated for consideration of certain governance and strategic proposals. On May 17, 2021, management issued a response to Elliott. On July 19, 2021, Elliott publicly released a second letter to the Board and Duke Energy issued a response. Duke Energy is unable to predict the outcome of this matter.
Other Matters
See "Item 7. Management's Discussion and Analysis of Financial Condition and Results of Operations," in the Duke Energy Registrants' Annual Reports on Form 10-K for the year ended December 31, 2020, for discussion of risks associated with the Tax Act.
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MD&A DUKE ENERGY

Results of Operations
Non-GAAP Measures
Management’s Discussion and Analysis includes financial information prepared in accordance with GAAP in the U.S., as well as certain non-GAAP financial measures such as adjusted earnings and adjusted EPS discussed below. Generally, a non-GAAP financial measure is a numerical measure of financial performance, financial position or cash flows that excludes (or includes) amounts that are included in (or excluded from) the most directly comparable measure calculated and presented in accordance with GAAP. Non-GAAP financial measures should be viewed as a supplement to, and not a substitute for, financial measures presented in accordance with GAAP. Non-GAAP measures presented may not be comparable to similarly titled measures used by other companies because other companies may not calculate the measures in the same manner.
Management evaluates financial performance in part based on non-GAAP financial measures, including adjusted earnings and adjusted EPS. Adjusted earnings and adjusted EPS represent income from continuing operations available to Duke Energy Corporation common stockholders in dollar and per share amounts, adjusted for the dollar and per share impact of special items. As discussed below, special items represent certain charges and credits, which management believes are not indicative of Duke Energy's ongoing performance. The most directly comparable GAAP measures for adjusted earnings and adjusted EPS are GAAP Reported Earnings (Loss) and GAAP Reported Earnings (Loss) Per Share, respectively.
Special items included in the periods presented below include the following, which management believes do not reflect ongoing costs:
Workplace and workforce realignment represents costs attributable to business transformation, including long-term real estate strategy changes and workforce realignment.
Regulatory Settlements represents an impairment charge related to the 2018 South Carolina rate cases, charges related to the CCR settlement and insurance proceeds distributed in accordance with that agreement and Duke Energy Carolinas and Duke Energy Progress partial settlements in the 2019 North Carolina rate cases.
Gas Pipeline Investments represents costs related to the cancellation of the ACP pipeline and additional exit obligations.
Severance represents the reversal of 2018 severance charges, which were deferred as a result of partial settlements in the Duke Energy Carolinas and the Duke Energy Progress 2019 North Carolina rate cases.
Three Months Ended September 30, 2021, as compared to September 30, 2020
GAAP reported EPS was $1.79 for the third quarter of 2021 compared to a $1.74 in the third quarter of 2020. In addition to the drivers below, GAAP reported EPS increased due to the cancellation of the ACP pipeline in the prior year and partial settlements in the 2019 North Carolina rate cases in the prior year. This was partially offset by an impairment charge related to the 2018 South Carolina rate cases and charges related to the CCR settlement and insurance proceeds distributed in accordance with that agreement.
As discussed above, management also evaluates financial performance based on adjusted EPS. Duke Energy’s third quarter 2021 adjusted EPS was $1.88 compared to $1.87 for the third quarter of 2020. The increase in adjusted EPS was primarily due to positive rate case contributions and higher volumes. This was partially offset by higher operation and maintenance expenses, higher income tax expense and share dilution from equity issuances.
The following table reconciles non-GAAP measures, including adjusted EPS, to their most directly comparable GAAP measures.
  Three Months Ended September 30,
2021 2020
(in millions, except per share amounts) Earnings EPS  Earnings EPS
GAAP Reported Earnings/GAAP Reported EPS $ 1,366  $ 1.79  $ 1,265  $ 1.74 
Adjustments:
Workplace and Workforce Realignment(a)
—  —  — 
Regulatory Settlements(b)
64  0.09  27  0.04 
Gas Pipeline Investments(c)
(2)   69  0.09 
Adjusted Earnings/Adjusted EPS $ 1,435  $ 1.88  $ 1,361  $ 1.87 
(a)Net of tax benefit of $2 million.
(b)Net of tax benefit of $19 million and $8 million for the three months ended September 30, 2021, and 2020, respectively.
(c)Net of tax expense of $1 million and tax benefit of $21 million for the three months ended September 30, 2021, and 2020, respectively.
Nine Months Ended September 30, 2021, as compared to September 30, 2020
GAAP Reported EPS was $4.00 for the nine months ended September 30, 2021, compared to $1.85 for the nine months ended September 30, 2020. In addition to the drivers below, GAAP reported EPS increased due to the cancellation of the ACP pipeline in the prior year, partially offset by workplace and workforce realignment costs.
As discussed above, management also evaluates financial performance based on adjusted EPS. Duke Energy’s adjusted EPS was $4.30 for the nine months ended September 30, 2021, compared to $4.09 for the nine months ended September 30, 2020. The increase in adjusted EPS was primarily due to positive rate case contributions and higher volumes, partially offset by higher income tax expense and share dilution from equity issuances.
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MD&A DUKE ENERGY

The following table reconciles non-GAAP measures, including adjusted EPS, to their most directly comparable GAAP measures.
  Nine Months Ended September 30,
2021 2020
(in millions, except per share amounts) Earnings EPS Earnings EPS
GAAP Reported Earnings/GAAP Reported EPS $ 3,070  $ 4.00  $ 1,347  $ 1.85 
Adjustments:
Workplace and Workforce Realignment(a)
142  0.19  —  — 
Regulatory Settlements(b)
64  0.09  27  0.04 
Gas Pipeline Investments(c)
15  0.02  1,695  2.30 
Severance(d)
    (75) (0.10)
Adjusted Earnings/Adjusted EPS $ 3,291  $ 4.30  $ 2,994  $ 4.09 
(a)Net of tax benefit of $42 million.
(b)Net of tax benefit of $19 million and $8 million for the nine months ended September 30, 2021, and 2020, respectively.
(c)Net of tax benefit of $4 million and $395 million for the nine months ended September 30, 2021, and 2020, respectively.
(d)Net of tax expense of $23 million.
SEGMENT RESULTS
The remaining information presented in this discussion of results of operations is on a GAAP basis. Management evaluates segment performance based on segment income. Segment income is defined as income from continuing operations net of income attributable to noncontrolling interests and preferred stock dividends. Segment income includes intercompany revenues and expenses that are eliminated in the Condensed Consolidated Financial Statements.
Duke Energy's segment structure includes the following segments: Electric Utilities and Infrastructure, Gas Utilities and Infrastructure and Commercial Renewables. The remainder of Duke Energy’s operations is presented as Other. See Note 2 to the Condensed Consolidated Financial Statements, “Business Segments,” for additional information on Duke Energy’s segment structure.
Electric Utilities and Infrastructure
Three Months Ended September 30, Nine Months Ended September 30,
(in millions) 2021 2020 Variance 2021 2020 Variance
Operating Revenues $ 6,569  $ 6,379  $ 190  $ 17,185  $ 16,596  $ 589 
Operating Expenses
Fuel used in electric generation and purchased power 1,864  1,869  (5) 4,760  4,703  57 
Operation, maintenance and other 1,363  1,326  37  3,907  3,891  16 
Depreciation and amortization 1,084  1,053  31  3,154  3,023  131 
Property and other taxes 330  286  44  949  885  64 
Impairment of assets and other charges 202  20  182  203  23  180 
Total operating expenses 4,843  4,554  289  12,973  12,525  448 
Gains on Sales of Other Assets and Other, net 9  11  11  — 
Operating Income 1,735  1,828  (93) 4,223  4,082  141 
Other Income and Expenses, net 220  67  153  421  241  180 
Interest Expense 365  308  57  1,066  991  75 
Income Before Income Taxes 1,590  1,587  3,578  3,332  246 
Income Tax Expense 160  206  (46) 393  493  (100)
Less: Income Attributable to Noncontrolling Interest 5  —  5  — 
Segment Income $ 1,425  $ 1,381  $ 44  $ 3,180  $ 2,839  $ 341 
Duke Energy Carolinas GWh sales 25,033  23,726  1,307  67,357  64,045  3,312 
Duke Energy Progress GWh sales 19,219  19,035  184  51,555  49,512  2,043 
Duke Energy Florida GWh sales 12,983  12,973  10  32,731  32,390  341 
Duke Energy Ohio GWh sales 6,844  6,678  166  18,586  17,763  823 
Duke Energy Indiana GWh sales 8,788  8,463  325  23,880  22,842  1,038 
Total Electric Utilities and Infrastructure GWh sales 72,867  70,875  1,992  194,109  186,552  7,557 
Net proportional MW capacity in operation 49,749  50,371  (622)
96

MD&A SEGMENT RESULTS — ELECTRIC UTILITIES AND INFRASTRUCTURE

Three Months Ended September 30, 2021, as compared to September 30, 2020
Electric Utilities and Infrastructure’s higher segment income is due to higher revenues from rate cases in various jurisdictions, weather-normal sales volumes, and coal ash insurance litigation proceeds partially offset by an impairment charge related to the South Carolina rate cases and higher operating expenses. The following is a detailed discussion of the variance drivers by line item.
Operating Revenues. The variance was driven primarily by:
a $144 million increase in retail base rate pricing due to general rate cases in North Carolina and Indiana net of rider impacts as well as multiyear rate adjustments in Florida; and
a $114 million increase in weather-normal retail sales volumes.
Partially offset by
a $48 million decrease in storm revenues at Duke Energy Florida due to full recovery of Hurricane Dorian costs in the prior year; and
a $17 million decrease in retail sales due to less favorable weather in the current year.
Operating Expenses. The variance was driven primarily by:
a $182 million increase in impairment of assets and other charges primarily due to the 2018 South Carolina rate case settlements at Duke Energy Carolinas and Duke Energy Progress, partially offset by a prior year impairment of Duke Energy Carolina's Clemson assets;
a $44 million increase in property and other taxes primarily due to higher property taxes at Duke Energy Carolinas and Duke Energy Ohio and a prior year sales and use tax refund at Duke Energy Carolinas;
a $37 million increase in operation, maintenance and other primarily driven by higher employee-related costs, partially offset by lower storm and outage costs; and
a $31 million increase in depreciation and amortization primarily due to resolution of rate cases and higher plant in service, partially offset by lower depreciation related to the extension of the lives of nuclear facilities.
Other Income and Expense, net. The increase is primarily due to coal ash insurance litigation proceeds at Duke Energy Carolinas and Duke Energy Progress and lower non-service pension costs.
Interest Expense. The variance was primarily due to lower debt return on coal ash at Duke Energy Carolinas, Duke Energy Progress and Duke Energy Indiana.
Income Tax Expense. The decrease in tax expense was primarily due to an increase in the amortization of excess deferred taxes. The ETRs for the three months ended September 30, 2021, and 2020, were 10.1% and 13.0%, respectively. The decrease in the ETR was primarily due to an increase in the amortization of excess deferred taxes.
Nine Months Ended September 30, 2021, as compared to September 30, 2020
Electric Utilities and Infrastructure’s variance is due to higher revenues from rate cases in various jurisdictions, higher retail sales volumes, and coal ash insurance litigation proceeds, partially offset by an impairment charge related to the South Carolina rate cases, higher depreciation and amortization and interest expense. The following is a detailed discussion of the variance drivers by line item.
Operating Revenues. The variance was driven primarily by:
a $297 million increase in retail base rate pricing due to general rate cases in Indiana and North Carolina net of rider impacts as well as multiyear settlement rate adjustments in Florida;
a $188 million increase in weather-normal retail sales volumes;
an $86 million increase in retail sales, net of fuel revenues, due to favorable weather;
a $61 million increase in fuel revenues primarily driven by higher sales volumes; and
a $21 million increase in wholesale revenues primarily due to higher rates at Duke Energy Indiana and higher volumes at Duke Energy Progress, partially offset by a restructured capacity contract at Duke Energy Florida.
Partially offset by:
a $103 million decrease in storm revenues due to full recovery of Hurricane Dorian costs in the prior year.
97

MD&A SEGMENT RESULTS — ELECTRIC UTILITIES AND INFRASTRUCTURE

Operating Expenses. The variance was driven primarily by:
a $180 million increase in impairment of assets and other charges primarily due to the 2018 South Carolina rate case settlements at Duke Energy Carolinas and Duke Energy Progress, partially offset by a prior year impairment of Duke Energy Carolinas' Clemson assets;
a $131 million increase in depreciation and amortization primarily due to resolution of rate cases and higher plant in service, partially offset by lower depreciation related to the extension of the lives of nuclear facilities;
a $64 million increase in property and other taxes primarily due to higher property taxes at Duke Energy Carolinas and Duke Energy Ohio, and a prior year sales and use tax refund at Duke Energy Carolinas;
a $57 million increase in fuel used in electric generation and purchased power primarily due to higher sales volumes; and
a $16 million increase in operations, maintenance and other driven by higher employee-related expenses, partially offset by decreased storm amortization at Duke Energy Florida and lower COVID-19 costs.
Other Income and Expenses, net. The increase is primarily due to coal ash insurance litigation proceeds at Duke Energy Carolinas and Duke Energy Progress and lower non-service pension costs.
Interest Expense. The variance was primarily due to lower debt return on coal ash at Duke Energy Carolinas, Duke Energy Progress and Duke Energy Indiana.
Income Tax Expense. The decrease in tax expense was primarily due to an increase in the amortization of excess deferred taxes, partially offset by an increase in pretax income. The ETRs for the nine months ended September 30, 2021, and 2020, were 11.0% and 14.8%, respectively. The decrease in the ETR was primarily due to an increase in the amortization of excess deferred taxes.
Gas Utilities and Infrastructure
Three Months Ended September 30, Nine Months Ended September 30,
(in millions) 2021 2020 Variance 2021 2020 Variance
Operating Revenues $ 289  $ 241  $ 48  $ 1,391  $ 1,194  $ 197 
Operating Expenses
Cost of natural gas 75  41  34  430  300  130 
Operation, maintenance and other 102  103  (1) 302  312  (10)
Depreciation and amortization 74  65  216  193  23 
Property and other taxes 30  26  92  82  10 
Impairment of assets and other charges   (7)   (7)
Total operating expenses 281  242  39  1,040  894  146 
Operating Income (Loss) 8  (1) 351  300  51 
Other Income and Expenses
Equity in earnings (losses) of unconsolidated affiliates 10  (71) 81  2  (2,004) 2,006 
Other income and expenses, net 15  16  (1) 50  42 
           Total other income and expenses 25  (55) 80  52  (1,962) 2,014 
Interest Expense 37  35  105  103 
(Loss) Income Before Income Taxes (4) (91) 87  298  (1,765) 2,063 
Income Tax (Benefit) Expense (1) (18) 17  39  (365) 404 
Segment (Loss) Income $ (3) $ (73) $ 70  $ 259  $ (1,400) $ 1,659 
Piedmont LDC throughput (dekatherms) 134,549,588  115,549,371  19,000,217  390,210,785  360,861,306  29,349,479 
Duke Energy Midwest LDC throughput (Mcf) 10,268,918  9,678,342  590,576  62,220,827  58,570,583  3,650,244 
Three Months Ended September 30, 2021, as compared to September 30, 2020
Gas Utilities and Infrastructure’s results were impacted primarily by the cancellation of the ACP pipeline in the prior year. The following is a detailed discussion of the variance drivers by line item.
Operating Revenues. The variance was driven primarily by:
a $34 million increase due to higher natural gas costs passed through to customers, higher volumes, and higher off-system sales natural gas costs; and
a $12 million increase due to growth in base rates and riders at Piedmont and growth in riders in the Midwest.
98

MD&A SEGMENT RESULTS — GAS UTILITIES AND INFRASTRUCTURE

Operating Expenses. The variance was driven primarily by:
a $34 million increase in cost of natural gas due to higher natural gas prices, higher volumes, and increased off-system sales natural gas costs; and
a $9 million increase in depreciation due to additional plant in service.
Equity in earnings (losses) of unconsolidated affiliates. The variance was primarily driven by the cancellation of the ACP pipeline in the prior year.
Income Tax Benefit. The decrease in tax benefit was primarily due to a decrease in pretax losses. The ETRs for the three months ended September 30, 2021, and 2020, were 25.0% and 19.8%, respectively. The increase in the ETR was primarily due to certain favorable tax credits.
Nine Months Ended September 30, 2021, as compared to September 30, 2020
Gas Utilities and Infrastructure’s results were impacted primarily by the cancellation of the ACP pipeline in the prior year and margin growth. The following is a detailed discussion of the variance drivers by line item.
Operating Revenues. The variance was driven primarily by:
a $130 million increase due to higher natural gas costs passed through to customers, higher volumes, and increased off-system sales natural gas costs;
a $15 million increase due to Tennessee base rate case increases;
an $11 million increase due to North Carolina IMR; and
a $10 million increase due to revenue from the Capital Expenditure Program (CEP) rider related to 2019 and 2020 activity.
Operating Expenses. The variance was driven primarily by:
a $130 million increase in cost of natural gas due to higher natural gas prices, higher volumes, and increased off-system sales natural gas costs; and
a $23 million increase in depreciation due to additional plant in service.
Equity in earnings (losses) of unconsolidated affiliates. The variance was driven primarily by the cancellation of the ACP pipeline in the prior year.
Income Tax Expense. The increase in tax expense was primarily due to the cancellation of the ACP pipeline project recorded in the prior year. The ETRs for the nine months ended September 30, 2021, and 2020, were 13.1% and 20.7%, respectively. The decrease in the ETR was primarily due to the cancellation of the ACP pipeline project recorded in the prior year.
Commercial Renewables
Three Months Ended September 30, Nine Months Ended September 30,
(in millions) 2021 2020 Variance 2021 2020 Variance
Operating Revenues $ 117  $ 126  $ (9) $ 355  $ 378  $ (23)
Operating Expenses
Operation, maintenance and other 90  72  18  240  204  36 
Depreciation and amortization 58  52  167  148  19 
Property and other taxes 10  28  24 
Impairment of assets and other charges   —  —    (6)
Total operating expenses 158  132  26  435  382  53 
Operating Loss (41) (6) (35) (80) (4) (76)
Other Income and Expenses, net (2) (1) (1) (24) —  (24)
Interest Expense 20  18  53  49 
Loss Before Income Taxes (63) (25) (38) (157) (53) (104)
Income Tax Benefit (6) (15) (56) (52) (4)
Add: Loss Attributable to Noncontrolling Interests 135  70  65  253  208  45 
Segment Income $ 78  $ 60  $ 18  $ 152  $ 207  $ (55)
Renewable plant production, GWh 2,567  2,563  7,942  7,660  282 
Net proportional MW capacity in operation(a)
4,630  3,984  646 
(a)Certain projects are included in tax equity structures where investors have differing interests in the project's economic attributes. One hundred percent of the tax equity project's capacity is included in the table above.
99

MD&A SEGMENT RESULTS — COMMERCIAL RENEWABLES

Three Months Ended September 30, 2021, as compared to September 30, 2020
Commercial Renewables' results were favorable to prior year primarily driven by the growth of new project investments. Since the prior year period, Commercial Renewables has placed in service approximately 650 MW.
Operating Revenues. The variance was primarily driven by an $8 million decrease due to lower wind resource and operating downtime.
Operating Expenses. The variance was primarily driven by a $12 million increase in operating expenses, depreciation expense and property tax expense associated with the growth of new project investments placed in service, $8 million increase for higher engineering and construction costs within the distributed energy portfolio and $3 million increase attributed to maintenance at several facilities.
Income Tax Benefit. The decrease in the tax benefit was primarily driven by an increase in taxes associated with tax equity investments and a decrease in production tax credits generated partially offset by an increase in pretax losses.
Loss Attributable to Noncontrolling Interests. The increase was primarily driven by the growth of new wind and solar project investments financed with tax equity.
Nine Months Ended September 30, 2021, as compared to September 30, 2020
Commercial Renewables' results were unfavorable to prior year primarily driven by the impacts from Texas Storm Uri, which resulted in a $35 million pretax loss, as well as unfavorable wind resource and fewer projects being placed in service in the current year.
Operating Revenues. The variance was primarily driven by a $20 million decrease due to lower wind resource and operating downtime and a $15 million decrease for lower market prices in the current year impacting the wind portfolio. This was partially offset by an $8 million increase for market sales in excess of market purchases during Texas Storm Uri and a $4 million increase due to growth of new projects.
Operating Expenses. The increase was primarily due to $33 million for higher operating expenses, depreciation expense and property tax expense as a result of the growth in new projects placed in service since prior year, $11 million increase for higher operating expenses attributed to maintenance at several wind and solar facilities, an $11 million increase for higher engineering and construction costs within the distributed energy portfolio and a $2 million increase associated with Texas Storm Uri. This was partially offset by a $6 million decrease related to an impairment charge in the prior year for a non-contracted wind project.
Other Income and Expenses, net. The variance was primarily driven by a $29 million loss in equity earnings due to the impacts of Texas Storm Uri, partially offset by $4 million in equity earnings from the wind and distributed asset portfolios.
Income Tax Benefit. The increase in the tax benefit was primarily driven by an increase in pretax losses partially offset by an increase in taxes associated with tax equity investments and a decrease in production tax credits generated.
Loss Attributable to Noncontrolling Interests. The variance was primarily driven by a $57 million net increase from the growth of new project investments financed with tax equity, partially offset by a $12 million loss resulting from Texas Storm Uri.
Other
Three Months Ended September 30, Nine Months Ended September 30,
(in millions) 2021 2020 Variance 2021 2020 Variance
Operating Revenues $ 28  $ 24  $ $ 81  $ 73  $
Operating Expenses 46  37  282  (15) 297 
Losses on Sales of Other Assets and Other, net (1) —  (1) (1) —  (1)
Operating (Loss) Income (19) (13) (6) (202) 88  (290)
Other Income and Expenses, net 25  43  (18) 78  55  23 
Interest Expense 163  160  470  498  (28)
Loss Before Income Taxes (157) (130) (27) (594) (355) (239)
Income Tax Benefit (63) (66) (166) (149) (17)
Less: Income Attributable to Noncontrolling Interests 1  —  1  — 
Less: Preferred Dividends 39  39  —  92  93  (1)
Net Loss $ (134) $ (103) $ (31) $ (521) $ (299) $ (222)
Three Months Ended September 30, 2021, as compared to September 30, 2020
The higher net loss was driven by interest income related to a tax refund recorded in the prior year, impairments to optimize the company’s real estate portfolio and reduce office space as parts of the business move to a hybrid and remote workforce strategy and a lower income tax benefit due to higher tax optimization achieved in the prior year partially offset by higher pretax loss.
Operating Expenses. The increase was primarily driven by asset impairments to optimize the company's real estate portfolio and reduce office space as parts of the business move to a hybrid and remote workforce strategy.
Other Income and Expenses, net. The variance was primarily due to higher interest income in the prior year related to a tax refund of AMT credit carryforwards.
Interest Expense. The variance was primarily due to higher outstanding long-term debt.
100


MD&A SEGMENT RESULTS - OTHER

Nine Months Ended September 30, 2021, as compared to September 30, 2020
The higher net loss was driven by asset impairments to optimize the company's real estate portfolio and reduce office space as parts of the business move to a hybrid and remote workforce strategy as well as a reversal of severance costs in the prior year.
Operating Expenses. The increase was primarily due to asset impairments to optimize the company's real estate portfolio and reduce office space as parts of the business move to a hybrid and remote workforce strategy as well as a reversal of severance costs in the prior year.
Other Income and Expenses, net. The variance was primarily due to higher equity earnings from the NMC investment and market returns on investments that fund certain employee benefit obligations, partially offset by lower interest income in the prior year related to a tax refund of AMT credit carryforwards.
Interest Expense. The variance was primarily due to lower interest rates.
Income Tax Benefit. The increase in the tax benefit was primarily driven by an increase in pretax losses, partially offset by lower state tax expense in the prior year. The ETRs for the nine months ended September 30, 2021, and 2020, were 27.9% and 42.0%, respectively. The decrease in the ETR was primarily due to lower state tax expense in the prior year.
DUKE ENERGY CAROLINAS
Results of Operations
Nine Months Ended September 30,
(in millions) 2021 2020 Variance
Operating Revenues $ 5,430  $ 5,416  $ 14 
Operating Expenses
Fuel used in electric generation and purchased power 1,218  1,326  (108)
Operation, maintenance and other 1,347  1,218  129 
Depreciation and amortization 1,088  1,090  (2)
Property and other taxes 248  213  35 
Impairment of assets and other charges 238  22  216 
Total operating expenses 4,139  3,869  270 
Gains on Sales of Other Assets and Other, net 1  — 
Operating Income 1,292  1,548  (256)
Other Income and Expenses, net 218  128  90 
Interest Expense 400  370  30 
Income Before Income Taxes 1,110  1,306  (196)
Income Tax Expense 40  178  (138)
Net Income $ 1,070  $ 1,128  $ (58)
The following table shows the percent changes in GWh sales and average number of customers. The percentages for retail customer classes represent billed sales only. Total sales includes billed and unbilled retail sales and wholesale sales to incorporated municipalities, public and private utilities and power marketers. Amounts are not weather-normalized.
Increase (Decrease) over prior year 2021
Residential sales 4.9  %
General service sales 2.0  %
Industrial sales 5.8  %
Wholesale power sales 6.0  %
Joint dispatch sales 23.0  %
Total sales 5.2  %
Average number of customers 2.4  %
Nine Months Ended September 30, 2021, as compared to September 30, 2020
Operating Revenues. The variance was driven primarily by:
an $88 million increase in weather-normal retail sales volumes;
a $57 million increase in retail sales due to more favorable weather; and
a $22 million increase due to higher pricing from the North Carolina retail rate case, net of a return of EDIT to customers.
Partially offset by:
a $115 million decrease in fuel revenues due to lower prices, partially offset by higher retail sales volumes; and
a $40 million decrease in rider revenues primarily due to energy efficiency programs.
101

MD&A DUKE ENERGY CAROLINAS

Operating Expenses. The variance was driven primarily by:
a $216 million increase in impairment of assets and other charges due to the 2018 South Carolina rate case settlement and optimization of the company's real estate portfolio and reduction of office space as parts of the business move to a hybrid and remote workforce strategy, partially offset by a prior year Clemson University Combined Heat and Power Plant impairment;
a $129 million increase in operation, maintenance and other expense primarily due to higher employee-related expenses and a severance cost adjustment in the prior year related to the 2019 North Carolina retail rate case, and higher costs associated with the implementation of Customer Connect; and
a $35 million increase in property and other taxes primarily due to property tax valuation adjustments and a prior year sales and use tax refund.
Partially offset by:
a $108 million decrease in fuel used in electric generation and purchased power primarily associated with the recovery of fuel expenses, partially offset by higher natural gas prices and changes in the generation mix.
Other Income and Expense, net. The variance was primarily due to coal ash insurance proceeds and lower non-service pension costs.
Interest Expense. The variance was driven by amortization of carrying costs related to excess deferred taxes, and lower debt return on coal ash projects.
Income Tax Expense. The decrease in tax expense was primarily due to an increase in the amortization of excess deferred taxes and a decrease in pretax income.
PROGRESS ENERGY
Results of Operations
Nine Months Ended September 30,
(in millions) 2021 2020 Variance
Operating Revenues $ 8,417  $ 8,117  $ 300 
Operating Expenses
Fuel used in electric generation and purchased power 2,702  2,628  74 
Operation, maintenance and other 1,863  1,789  74 
Depreciation and amortization 1,430  1,356  74 
Property and other taxes 419  419  — 
Impairment of assets and other charges 79  78 
Total operating expenses 6,493  6,193  300 
Gains on Sales of Other Assets and Other, net 9  — 
Operating Income 1,933  1,933  — 
Other Income and Expenses, net 167  89  78 
Interest Expense 592  599  (7)
Income Before Income Taxes 1,508  1,423  85 
Income Tax Expense 174  190  (16)
Net Income 1,334  1,233  101 
Less: Net Income Attributable to Noncontrolling Interests 1  — 
Net Income Attributable to Parent $ 1,333  $ 1,232  $ 101 
Nine Months Ended September 30, 2021, as compared to September 30, 2020
Operating Revenues. The variance was driven primarily by:
a $146 million increase in fuel cost recovery driven by higher fuel prices, higher volumes in the current year and accelerated recovery of retired Crystal River coal units;
a $136 million increase in retail pricing due to the North Carolina rate case and base rate adjustments at Duke Energy Florida related to annual increases from the 2017 Settlement Agreement and the solar base rate adjustment;
a $73 million increase in weather-normal retail sales volumes;
a $32 million increase in other revenues at Duke Energy Florida primarily due to higher transmission revenues and higher customer charges that were waived due to COVID-19 in the prior year; and
a $19 million increase in rider revenues at Duke Energy Florida primarily due to increased retail sales volumes.
102

MD&A PROGRESS ENERGY

Partially offset by:
a $103 million decrease in storm revenues at Duke Energy Florida due to full recovery of Hurricane Dorian costs in the prior year.
Operating Expenses. The variance was driven primarily by:
a $78 million increase in impairment of assets and other charges primarily due to the 2018 South Carolina rate case settlement at Duke Energy Progress and optimization of the company's real estate portfolio and reduction of office space as parts of the business move to a hybrid and remote workforce strategy;
a $74 million increase in fuel used in electric generation and purchased power primarily due to higher demand, changes in generation mix and recognition of RECs used for compliance at Duke Energy Progress, and outside fuel purchases during a major plant outage;
a $74 million increase in operation, maintenance and other expense driven by a prior year severance cost adjustment related to the 2019 North Carolina retail rate case, outage costs and other employee-related costs, partially offset by reduced storm amortization at Duke Energy Florida; and
a $74 million increase in depreciation and amortization primarily due to accelerated depreciation of retired Crystal River coal units and an increase in plant base at Duke Energy Florida, partially offset by the extension of the lives at nuclear facilities at Duke Energy Progress.
Other Income and Expenses, net. The increase is primarily due to coal ash insurance litigation proceeds at Duke Energy Progress, lower non-service pension costs and unrealized gains on the nuclear decommissioning trust fund at Duke Energy Florida.
Income Tax Expense. The decrease in tax expense was primarily due to an increase in the amortization of excess deferred taxes, partially offset by an increase in pretax income.
DUKE ENERGY PROGRESS
Results of Operations
Nine Months Ended September 30,
(in millions) 2021 2020 Variance
Operating Revenues $ 4,417  $ 4,207  $ 210 
Operating Expenses
Fuel used in electric generation and purchased power 1,368  1,337  31 
Operation, maintenance and other 1,092  970  122 
Depreciation and amortization 811  833  (22)
Property and other taxes 129  129  — 
Impairment of assets and other charges 60  55 
Total operating expenses 3,460  3,274  186 
Gains on Sales of Other Assets and Other, net 8  — 
Operating Income 965  941  24 
Other Income and Expenses, net 111  52  59 
Interest Expense 226  203  23 
Income Before Income Taxes 850  790  60 
Income Tax Expense 50  79  (29)
Net Income
$ 800  $ 711  $ 89 
The following table shows the percent changes in GWh sales and average number of customers. The percentages for retail customer classes represent billed sales only. Total sales includes billed and unbilled retail sales and wholesale sales to incorporated municipalities, public and private utilities and power marketers. Amounts are not weather-normalized.
Increase (Decrease) over prior period 2021
Residential sales 6.5  %
General service sales 3.9  %
Industrial sales 2.7  %
Wholesale power sales 5.2  %
Joint dispatch sales (2.6) %
Total sales 4.1  %
Average number of customers 0.4  %
103

MD&A DUKE ENERGY PROGRESS

Nine Months Ended September 30, 2021, as compared to September 30, 2020
Operating Revenues. The variance was driven primarily by:
a $72 million increase due to higher pricing from the North Carolina retail rate case, net of a return of EDIT to customers;
a $54 million increase in weather-normal retail sales volumes in the current year;
a $46 million increase in retail sales due to more favorable weather;
a $24 million increase in fuel cost recovery driven by higher fuel prices and volumes in the current year; and
a $15 million increase in wholesale revenues due to higher capacity volumes, partially offset by lower recovery of coal ash costs.
Operating Expenses. The variance was driven primarily by:
a $122 million increase in operation, maintenance and other expense primarily due to higher employee-related costs and a severance cost adjustment in the prior year related to the 2019 North Carolina retail rate case, increased outage costs and energy efficiency program costs;
a $55 million increase in impairment of assets and other charges primarily due to the 2018 South Carolina rate case settlement at Duke Energy Progress and optimization of the company's real estate portfolio and reduction of office space as parts of the business move to a hybrid and remote workforce strategy; and
a $31 million increase in fuel used in electric generation and purchased power primarily due to higher demand and changes in generation mix as well as recognition of RECs used for compliance.
Partially offset by:
a $22 million decrease in depreciation and amortization expense, primarily driven by the extension of the lives of nuclear facilities.
Other Income and Expense, net. The increase is primarily due to coal ash insurance litigation proceeds and lower non-service pension costs.
Interest Expense. The variance was driven primarily by lower debt return on coal ash projects.
Income Tax Expense. The decrease in tax expense was primarily due to an increase in the amortization of excess deferred taxes, partially offset by an increase in pretax income.
DUKE ENERGY FLORIDA
Results of Operations
Nine Months Ended September 30,
(in millions) 2021 2020 Variance
Operating Revenues $ 3,987  $ 3,897  $ 90 
Operating Expenses
Fuel used in electric generation and purchased power 1,335  1,291  44 
Operation, maintenance and other 760  806  (46)
Depreciation and amortization 619  523  96 
Property and other taxes 290  290  — 
Impairment of assets and other charges 19  (4) 23 
Total operating expenses 3,023  2,906  117 
Gains on Sales of Other Assets and Other, net 1  — 
Operating Income 965  991  (26)
Other Income and Expenses, net 54  36  18 
Interest Expense 239  245  (6)
Income Before Income Taxes 780  782  (2)
Income Tax Expense 149  159  (10)
Net Income $ 631  $ 623  $
104

MD&A DUKE ENERGY FLORIDA

The following table shows the percent changes in GWh sales and average number of customers. The percentages for retail customer classes represent billed sales only. Wholesale power sales include both billed and unbilled sales. Total sales includes billed and unbilled retail sales and wholesale sales to incorporated municipalities, public and private utilities and power marketers. Amounts are not weather-normalized.
Increase (Decrease) over prior period 2021
Residential sales (0.5) %
General service sales 3.1  %
Industrial sales 8.1  %
Wholesale and other 20.1  %
Total sales 1.1  %
Average number of customers 1.9  %
Nine Months Ended September 30, 2021, as compared to September 30, 2020
Operating Revenues. The variance was driven primarily by:
a $122 million increase in fuel and capacity revenues primarily due to higher retail sales volumes and accelerated recovery of the retired coal units Crystal River 1 and 2;
a $64 million increase in retail pricing due to base rate adjustments related to annual increases from the 2017 Settlement Agreement and the solar base rate adjustment;
a $32 million increase in other revenues primarily due to lower revenues in the prior year due to the moratorium on customer late payments and service charges in response to the COVID-19 pandemic, lower outdoor lighting equipment rentals in the prior year, and higher transmission revenues due to prior year customer settlement and the increased network billing rates;
a $19 million increase in rider revenues primarily due to increased volumes; and
a $16 million increase in weather-normal retail sales volumes.
Partially offset by:
a $103 million decrease in storm revenues due to full recovery of Hurricane Dorian costs in the prior year;
a $37 million decrease in retail sales, net of fuel revenues, due to unfavorable weather in the current year; and
an $18 million decrease in wholesale power revenues, net of fuel, primarily due to a restructured capacity contract.
Operating Expenses. The variance was driven primarily by:
a $96 million increase in depreciation and amortization primarily due to accelerated depreciation of retired coal units Crystal River 1 and 2 and an increase in plant base;
a $44 million increase in fuel used in electric generation and purchased power primarily due to higher natural gas prices, and outside fuel purchases during a major plant outage at the Hines facility; and
a $23 million increase in impairment of assets and other charges to optimize the company's real estate portfolio and reduce office space as parts of the business move to a hybrid and remote workforce strategy.
Partially offset by:
a $46 million decrease in operation, maintenance and other expense primarily due to decreased storm amortization costs, partially offset by outage maintenance costs at Hines.
Other Income and Expense, net. The increase is primarily due to lower non-service pension costs and gains on the nuclear decommissioning trust fund.
Income Tax Expense. The decrease in tax expense was primarily due to unfavorable tax adjustments in the prior year.
105

MD&A DUKE ENERGY OHIO

DUKE ENERGY OHIO
Results of Operations
Nine Months Ended September 30,
(in millions) 2021 2020 Variance
Operating Revenues
Regulated electric $ 1,119  $ 1,070  $ 49 
Regulated natural gas 375  324  51 
Total operating revenues 1,494  1,394  100 
Operating Expenses
Fuel used in electric generation and purchased power 294  258  36 
Cost of natural gas 76  46  30 
Operation, maintenance and other 335  333 
Depreciation and amortization 228  208  20 
Property and other taxes 266  244  22 
Impairment of assets and other charges 5  — 
Total operating expenses 1,204  1,089  115 
Operating Income 290  305  (15)
Other Income and Expenses, net 14  11 
Interest Expense 82  75 
Income Before Income Taxes 222  241  (19)
Income Tax Expense 34  40  (6)
Net Income $ 188  $ 201  $ (13)
The following table shows the percent changes in GWh sales of electricity, dekatherms of natural gas delivered and average number of electric and natural gas customers. The percentages for retail customer classes represent billed sales only. Total sales includes billed and unbilled retail sales and wholesale sales to incorporated municipalities, public and private utilities and power marketers. Amounts are not weather-normalized.
Electric Natural Gas
Increase (Decrease) over prior year 2021 2021
Residential sales 2.6  % 6.8  %
General service sales 3.8  % 9.8  %
Industrial sales 5.5  % 4.2  %
Wholesale electric power sales 104.7  % n/a
Other natural gas sales n/a 2.5  %
Total sales 4.6  % 6.2  %
Average number of customers 0.5  % 0.8  %
Nine Months Ended September 30, 2021, as compared to September 30, 2020
Operating Revenues. The variance was driven primarily by:
a $31 million increase in fuel related revenues primarily due to higher natural gas prices and increased volumes;
a $27 million increase in revenues related to OVEC collections and OVEC sales into PJM;
a $16 million increase in PJM transmission revenues as a result of increased capital spend;
an $11 million increase in retail pricing primarily due to the Duke Energy Kentucky general rate case; and
a $6 million increase in revenues due to favorable weather.
Operating Expenses. The variance was driven primarily by:
a $66 million increase in fuel expense primarily driven by higher retail prices and increased volumes for natural gas and purchased power;
a $22 million increase in property and other taxes primarily due to increased plant in service, higher kilowatt and natural gas distribution taxes due to increased usage and a lower Network Integration Transmission Service tax deferral;
a $20 million increase in depreciation and amortization primarily driven by an increase in distribution plant in service; and
a $5 million increase in impairment of assets and other charges to optimize the company's real estate portfolio and reduce office space as parts of the business moves to a hybrid and remote workforce strategy.
Income Tax Expense. The decrease in tax expense was primarily due to a decrease in pretax income.
106

MD&A DUKE ENERGY INDIANA

DUKE ENERGY INDIANA
Results of Operations
Nine Months Ended September 30,
(in millions) 2021 2020 Variance
Operating Revenues $ 2,366  $ 2,070  $ 296 
Operating Expenses
Fuel used in electric generation and purchased power 710  577  133 
Operation, maintenance and other 543  564  (21)
Depreciation and amortization 458  415  43 
Property and other taxes 57  57  — 
Impairment of assets and other charges 8  — 
Total operating expenses 1,776  1,613  163 
Operating Income 590  457  133 
Other Income and Expenses, net 31  28 
Interest Expense 148  114  34 
Income Before Income Taxes 473  371  102 
Income Tax Expense 77  72 
Net Income $ 396  $ 299  $ 97 
The following table shows the percent changes in GWh sales and average number of customers. The percentages for retail customer classes represent billed sales only. Total sales includes billed and unbilled retail sales and wholesale sales to incorporated municipalities, public and private utilities and power marketers. Amounts are not weather-normalized.
Increase (Decrease) over prior year 2021
Residential sales 3.0  %
General service sales 4.6  %
Industrial sales 5.5  %
Wholesale power sales 7.8  %
Total sales 4.5  %
Average number of customers 1.0  %
Nine Months Ended September 30, 2021, as compared to September 30, 2020
Operating Revenues. The variance was driven primarily by:
a $128 million increase primarily due to higher base rate pricing from the Indiana retail rate case, net of lower rider revenues;
a $109 million increase in fuel revenues primarily due to higher fuel cost recovery driven by customer demand and fuel prices;
a $29 million increase in weather-normal retail sales volumes driven by higher nonresidential customer demand; and
a $24 million increase in wholesale revenues primarily related to the true up of wholesale transmission revenues and higher rates in the current year.
Operating Expenses. The variance was driven primarily by:
a $133 million increase in fuel used in electric generation and purchased power expense primarily due to higher purchased power expense, higher coal and natural gas costs and higher amortization of deferred fuel costs;
a $43 million increase in depreciation and amortization primarily due to a change in depreciation rates from the Indiana retail rate case, amortization of deferred coal ash pond ARO and additional plant in service; and
an $8 million increase in impairment of assets and other charges to optimize the company’s real estate portfolio and reduce office space as parts of the business move to a hybrid workforce strategy.
Partially offset by:
a $21 million decrease in operation, maintenance and other primarily due to major outage costs incurred in the prior year and outage delays in the current year.
Interest Expense. The variance is primarily due to higher post-in-service carrying costs interest resulting from the Indiana retail rate case and higher prior year coal ash spend debt returns on the Indiana Department of Environmental Management's approved ash basin closure projects.
107

MD&A DUKE ENERGY INDIANA

Income Tax Expense. The increase in tax expense was primarily due to an increase in pretax income partially offset by an increase in the amortization of excess deferred taxes.
PIEDMONT
Results of Operations
Nine Months Ended September 30,
(in millions) 2021 2020 Variance
Operating Revenues $ 1,016  $ 871  $ 145 
Operating Expenses
Cost of natural gas 354  254  100 
Operation, maintenance and other 231  234  (3)
Depreciation and amortization 150  133  17 
Property and other taxes 44  37 
Impairment of assets and other charges 9 
Total operating expenses 788  665  123 
Operating Income 228  206  22 
Other Income and Expenses, net 51  44 
Interest Expense 88  89  (1)
Income Before Income Taxes 191  161  30 
Income Tax Expense 16  10 
Net Income $ 175  $ 155  $ 20 
The following table shows the percent changes in dekatherms delivered and average number of customers. The percentages for all throughput deliveries represent billed and unbilled sales. Amounts are not weather-normalized.
Increase (Decrease) over prior year 2021
Residential deliveries 16.0  %
Commercial deliveries 14.3  %
Industrial deliveries 5.4  %
Power generation deliveries 6.7  %
For resale 20.0  %
Total throughput deliveries 8.1  %
Secondary market volumes (0.9) %
Average number of customers 2.0  %
The margin decoupling mechanism adjusts for variations in residential and commercial use per customer, including those due to weather and conservation. The weather normalization adjustment mechanisms mostly offset the impact of weather on bills rendered, but do not ensure full recovery of approved margin during periods when winter weather is significantly warmer or colder than normal.
Nine Months Ended September 30, 2021, as compared to September 30, 2020
Operating Revenues. The variance was driven primarily by:
a $100 million increase due to higher natural gas costs passed through to customers and increased off-system sales natural gas costs;
a $15 million increase due to Tennessee base rate case increases; and
an $11 million increase due to North Carolina IMR.
Operating Expenses. The variance was driven primarily by:
a $100 million increase due to higher natural gas costs passed through to customers and increased off-system sales natural gas costs;
a $17 million increase in depreciation expense due to additional plant in service and software projects in service; and
a $7 million increase in property and other taxes due to higher current year property taxes in North Carolina and South Carolina.
Other Income and Expense, net. The variance is primarily driven by favorable AFUDC equity and intercompany interest income.
Income Tax Expense. The increase in tax expense was primarily due to an increase in pretax income.
108

MD&A LIQUIDITY AND CAPITAL RESOURCES

LIQUIDITY AND CAPITAL RESOURCES
Sources and Uses of Cash
Duke Energy relies primarily upon cash flows from operations, debt and equity issuances and its existing cash and cash equivalents to fund its liquidity and capital requirements. Duke Energy’s capital requirements arise primarily from capital and investment expenditures, repaying long-term debt and paying dividends to shareholders. Duke Energy’s Annual Report on Form 10-K for the year ended December 31, 2020, included a summary and detailed discussion of projected primary sources and uses of cash for 2021 to 2023.
In January 2021, Duke Energy entered into a definitive agreement with an affiliate of GIC, for GIC to make an indirect minority interest investment of 19.9% in Duke Energy Indiana. The investment will be completed following two closings for an aggregate purchase price of approximately $2 billion. The first closing occurred on September 8, 2021, and Duke Energy Indiana Holdco, LLC, the holding company for Duke Energy Indiana, issued 11.05% of its membership interests in exchange for 50% of the total investment amount. Duke Energy has the discretion to determine the timing of the second closing, but the closing will occur no later than January 2023. At the second closing, Duke Energy Indiana Holdco, LLC will issue additional membership interests for the remaining 50% of the total investment amount, and GIC's minority interest ownership in Duke Energy Indiana Holdco, LLC will be 19.9%. Proceeds from the minority interest investment are expected to address common equity needs through 2025 to partially fund Duke Energy's $59 billion capital and investment expenditure plan.
As of September 30, 2021, Duke Energy had approximately $548 million of cash on hand, $6.3 billion available under its $8 billion Master Credit Facility and $500 million available under the $1 billion Three-Year Revolving Credit Facility. Duke Energy expects to have sufficient liquidity in the form of cash on hand, cash from operations and available credit capacity to support its funding needs. Refer to Note 5 to the Condensed Consolidated Financial Statements, "Debt and Credit Facilities," for information regarding Duke Energy's debt issuances and maturities, and available credit facilities including the Master Credit Facility.
Credit Ratings
In March 2021, Moody's Investors Services, Inc. (Moody's) downgraded by one notch the long-term credit ratings for Duke Energy (Parent) and Duke Energy Carolinas. The downgrade reflects Duke Energy's balance sheet objectives. The downgrade for Duke Energy (Parent) and Duke Energy Carolinas also considers the impact for Duke Energy Carolinas and Duke Energy Progress as a result of the 2019 rate case orders and approval of the CCR Settlement Agreement. While these agreements are indicative of a regulatory environment that remains broadly supportive of utility credit quality, their financial terms resulted in current impairment charges and lowered the amount of future cash flow Duke Energy Carolinas and Duke Energy Progress will receive in conjunction with their coal ash remediation spending. As part of the credit rating action, Moody's affirmed Duke Energy's (Parent) short-term and commercial paper credit ratings and confirmed the credit ratings for Duke Energy Progress. Following a January 2021, credit rating downgrade of Duke Energy (Parent) and its subsidiaries, Standard & Poor's Rating Services continues to maintain a stable outlook on Duke Energy Corporation and its subsidiaries as of September 30, 2021.
Cash Flow Information
The following table summarizes Duke Energy’s cash flows.
Nine Months Ended
September 30,
(in millions) 2021 2020
Cash flows provided by (used in):
Operating activities $ 7,227  $ 6,766 
Investing activities (8,200) (7,964)
Financing activities 1,160  1,225 
Net increase in cash, cash equivalents and restricted cash 187  27 
Cash, cash equivalents and restricted cash at beginning of period 556  573 
Cash, cash equivalents and restricted cash at end of period $ 743  $ 600 
OPERATING CASH FLOWS
The following table summarizes key components of Duke Energy’s operating cash flows.
Nine Months Ended
September 30,
(in millions) 2021 2020 Variance
Net income $ 2,915  $ 1,232  $ 1,683 
Non-cash adjustments to net income 4,556  6,204  (1,648)
Payments for asset retirement obligations (389) (463) 74 
Refund of AMT credit carryforwards   572  (572)
Working capital 145  (779) 924 
Net cash provided by operating activities $ 7,227  $ 6,766  $ 461 
The variance was primarily due to timing of accruals and payments in working capital accounts, partially offset by prior year $572 million refund of AMT credit carryforwards.
109

MD&A LIQUIDITY AND CAPITAL RESOURCES

INVESTING CASH FLOWS
The following table summarizes key components of Duke Energy’s investing cash flows.
Nine Months Ended
September 30,
(in millions) 2021 2020 Variance
Capital, investment and acquisition expenditures $ (7,119) $ (7,684) $ 565 
Other investing items (1,081) (280) (801)
Net cash used in investing activities $ (8,200) $ (7,964) $ (236)
The variance relates primarily to payment made to fund ACP's outstanding debt, partially offset by decreases in capital expenditures due to lower overall investments in the Electric Utilities and Infrastructure, Gas Utilities and Infrastructure and Commercial Renewables segments.
FINANCING CASH FLOWS
The following table summarizes key components of Duke Energy’s financing cash flows.
Nine Months Ended
September 30,
(in millions) 2021 2020 Variance
Issuances of long-term debt, net $ 2,683  $ 2,694  $ (11)
Issuances of common stock 5  75  (70)
Notes payable, commercial paper and other short-term borrowings (723) 260  (983)
Dividends paid (2,340) (2,113) (227)
Contributions from noncontrolling interests 1,556  402  1,154 
Other financing items (21) (93) 72 
Net cash provided by financing activities $ 1,160  $ 1,225  $ (65)
The variance was primarily due to:
a $983 million decrease in net proceeds from issuances of notes payable and commercial paper; and
a $227 million increase in dividends paid.
Partially offset by:
a $1.154 billion increase in contributions from noncontrolling interests, primarily due to the $1 billion receipt from GIC to make an indirect minority interest investment of 11.05% in Duke Energy Indiana.
OTHER MATTERS
Environmental Regulations
The Duke Energy Registrants are subject to federal, state and local regulations regarding air and water quality, hazardous and solid waste disposal, coal ash and other environmental matters. These regulations can be changed from time to time and result in new obligations of the Duke Energy Registrants. Refer to Note 3 to the Condensed Consolidated Financial Statements, "Regulatory Matters," for further information regarding potential plant retirements and regulatory filings related to the Duke Energy Registrants.
Off-Balance Sheet Arrangements
During the three and nine months ended September 30, 2021, there were no material changes to Duke Energy’s off-balance sheet arrangements. For additional information on Duke Energy’s off-balance sheet arrangements, see “Off-Balance Sheet Arrangements” in “Management’s Discussion and Analysis of Financial Condition and Results of Operations” in Duke Energy’s Annual Report on Form 10-K for the year ended December 31, 2020.
Contractual Obligations
Duke Energy enters into contracts that require payment of cash at certain specified periods, based on certain specified minimum quantities and prices. During the three and nine months ended September 30, 2021, there were no material changes in Duke Energy's contractual obligations. For an in-depth discussion of Duke Energy’s contractual obligations, see “Contractual Obligations” and “Quantitative and Qualitative Disclosures about Market Risk” in “Management’s Discussion and Analysis of Financial Condition and Results of Operations” in Duke Energy’s Annual Report on Form 10-K for the year ended December 31, 2020.
ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
For an in-depth discussion of the Duke Energy Registrants' market risks, see “Quantitative and Qualitative Disclosures about Market Risk” in Item 7 of the Annual Report on Form 10-K for the Duke Energy Registrants. During the three and nine months ended September 30, 2021, there were no material changes to the Duke Energy Registrants' disclosures about market risk.
110


ITEM 4. CONTROLS AND PROCEDURES

ITEM 4. CONTROLS AND PROCEDURES
Disclosure Controls and Procedures
Disclosure controls and procedures are controls and other procedures that are designed to ensure that information required to be disclosed by the Duke Energy Registrants in the reports they file or submit under the Exchange Act is recorded, processed, summarized and reported, within the time periods specified by the SEC rules and forms.
Disclosure controls and procedures include, without limitation, controls and procedures designed to provide reasonable assurance that information required to be disclosed by the Duke Energy Registrants in the reports they file or submit under the Exchange Act is accumulated and communicated to management, including the Chief Executive Officer and Chief Financial Officer, as appropriate, to allow timely decisions regarding required disclosure.
Under the supervision and with the participation of management, including the Chief Executive Officer and Chief Financial Officer, the Duke Energy Registrants have evaluated the effectiveness of their disclosure controls and procedures (as such term is defined in Rule 13a-15(e) and 15d-15(e) under the Exchange Act) as of September 30, 2021, and, based upon this evaluation, the Chief Executive Officer and Chief Financial Officer have concluded that these controls and procedures are effective in providing reasonable assurance of compliance.
Changes in Internal Control over Financial Reporting
Under the supervision and with the participation of management, including the Chief Executive Officer and Chief Financial Officer, the Duke Energy Registrants have evaluated changes in internal control over financial reporting (as such term is defined in Rules 13a-15 and 15d-15 under the Exchange Act) that occurred during the fiscal quarter ended September 30, 2021, and have concluded no change has materially affected, or is reasonably likely to materially affect, internal control over financial reporting.
111

OTHER INFORMATION


ITEM 1. LEGAL PROCEEDINGS
For information regarding material legal proceedings, including regulatory and environmental matters, see Note 3, "Regulatory Matters," and Note 4, "Commitments and Contingencies," to the Condensed Consolidated Financial Statements. For additional information, see Item 3, "Legal Proceedings," in Duke Energy's Annual Report on Form 10-K for the year ended December 31, 2020.
ITEM 1A. RISK FACTORS
In addition to the other information set forth in this report, careful consideration should be given to the factors discussed in Part I, “Item 1A. Risk Factors” in the Duke Energy Registrants' Annual Report on Form 10-K for the year ended December 31, 2020, which could materially affect the Duke Energy Registrants’ financial condition or future results. The information presented below updates, and should be read in conjunction with, the risk factors and information disclosed in the Annual Report on Form 10-K for the year ended December 31, 2020.
Our business could be negatively affected as a result of actions of activist shareholders.
On May 17, 2021, Elliott who has indicated it holds an economic interest in our outstanding common stock, publicly released a letter it had sent to our Board. On July 19, 2021, Elliott issued a follow-up letter to our Board.
While we strive to maintain constructive communications with our shareholders, activist shareholders may, from time to time, engage in proxy solicitations or advance shareholder proposals, or otherwise attempt to affect changes and assert influence on our Board and management. Perceived uncertainties as to the future direction or governance of the company may cause concern to our current or potential regulators, vendors or strategic partners, or make it more difficult to execute on our strategy or to attract and retain qualified personnel, which may have a material impact on our business and operating results.
In addition, actions such as those described above could cause fluctuations in the trading price of our common stock, based on temporary or speculative market perceptions or other factors that do not necessarily reflect the underlying fundamentals and prospects of our business.
ITEM 2. UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS
None.
112

EXHIBITS

ITEM 6. EXHIBITS
Exhibits filed herein are designated by an asterisk (*). All exhibits not so designated are incorporated by reference to a prior filing, as indicated. Items constituting management contracts or compensatory plans or arrangements are designated by a double asterisk (**). The company agrees to furnish upon request to the commission a copy of any omitted schedules or exhibits upon request on all items designated by a triple asterisk (***).
Duke Duke Duke Duke Duke
Exhibit Duke Energy Progress Energy Energy Energy Energy
Number Energy Carolinas Energy Progress Florida Ohio Indiana Piedmont
*3.1 X
4.1 X
4.2 X
10.1 X X
10.2 X
*31.1.1 X
*31.1.2 X
*31.1.3 X
*31.1.4 X
*31.1.5 X
*31.1.6 X
*31.1.7 X
*31.1.8 X
*31.2.1 X
*31.2.2 X
113

EXHIBITS

*31.2.3 X
*31.2.4 X
*31.2.5 X
*31.2.6 X
*31.2.7 X
*31.2.8 X
*32.1.1 X
*32.1.2 X
*32.1.3 X
*32.1.4 X
*32.1.5 X
*32.1.6 X
*32.1.7 X
*32.1.8 X
*32.2.1 X
*32.2.2 X
*32.2.3 X
*32.2.4 X
*32.2.5 X
*32.2.6 X
114

EXHIBITS

*32.2.7 X
*32.2.8 X
*101.INS XBRL Instance Document (this does not appear in the Interactive Data File because its XBRL tags are embedded within the Inline XBRL document). X X X X X X X X
*101.SCH XBRL Taxonomy Extension Schema Document. X X X X X X X X
*101.CAL XBRL Taxonomy Calculation Linkbase Document. X X X X X X X X
*101.LAB XBRL Taxonomy Label Linkbase Document. X X X X X X X X
*101.PRE XBRL Taxonomy Presentation Linkbase Document. X X X X X X X X
*101.DEF XBRL Taxonomy Definition Linkbase Document. X X X X X X X X
*104 Cover Page Interactive Data File (formatted in Inline XBRL and contained in Exhibit 101). X X X X X X X X
The total amount of securities of the registrant or its subsidiaries authorized under any instrument with respect to long-term debt not filed as an exhibit does not exceed 10% of the total assets of the registrant and its subsidiaries on a consolidated basis. The registrant agrees, upon request of the SEC, to furnish copies of any or all of such instruments to it.
115

SIGNATURES

SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrants have duly caused this report to be signed on their behalf by the undersigned thereunto duly authorized.

DUKE ENERGY CORPORATION
DUKE ENERGY CAROLINAS, LLC
PROGRESS ENERGY, INC.
DUKE ENERGY PROGRESS, LLC
DUKE ENERGY FLORIDA, LLC
DUKE ENERGY OHIO, INC.
DUKE ENERGY INDIANA, LLC
PIEDMONT NATURAL GAS COMPANY, INC.

Date: November 4, 2021 /s/ STEVEN K. YOUNG
Steven K. Young
Executive Vice President and Chief Financial Officer (Principal Financial Officer)
Date: November 4, 2021 /s/ CYNTHIA S. LEE
Cynthia S. Lee
Vice President, Chief Accounting Officer
and Controller
(Principal Accounting Officer)
116
Exhibit 3.1




AMENDED AND RESTATED LIMITED LIABILITY COMPANY OPERATING AGREEMENT OF

DUKE ENERGY INDIANA, LLC

An Indiana Limited Liability Company

(Formerly known as DUKE ENERGY INDIANA, INC.)

Dated as of August 25, 2021









THIS AMENDED AND RESTATED LIMITED LIABILITY COMPANY OPERATING AGREEMENT OF DUKE ENERGY INDIANA, LLC (formerly known as DUKE ENERGY INDIANA, INC.), (the "Company"), a limited liability company organized pursuant to the Indiana Business Flexibility Act, is executed as of this 25th day of August, 2021.  Duke Energy Indiana Holdco, LLC, a Delaware limited liability company, is the sole member of the Company (the "Member").  Solely for U.S. federal income tax purposes as provided in Treasury Regulations Section 301.7701-3 (as well as for applicable state, local or foreign tax purposes), the Member and the Company intend the Company to be disregarded as an entity that is separate from the Member. For all other purposes (including, without limitation, limited liability protection for the Member from Company liabilities), however, the Member and the Company intend the Company to be respected as a separate legal entity that is separate and apart from the Member.
Article I

FORMATION AND BUSINESS OF THE COMPANY
Section I.1Company Name and Formation. The Company was formed upon the conversion of Duke Energy Indiana, Inc., an Indiana corporation, on January 1, 2016, effective as of the time set forth in the Articles of Entity Conversion (the "Conversion") of the Company filed with the Secretary of State of the State of Indiana.
Section I.2Name.  The name of the Company shall be Duke Energy Indiana, LLC. All business and affairs of the Company shall be conducted under such name or under an assumed name duly approved by the Board.
Section I.3Purpose.  The purpose of the Company shall be to engage in any lawful business for which limited liability companies may be organized under the Act.
Section I.4Term.  The term of the Company shall commence on the date hereof and shall continue indefinitely.
Section I.5Place of Business.  The principal place of business of the Company shall be located in Plainfield, Indiana.  The Company may have such other offices either within or without the State of Indiana as the Board may designate or as the business of the Company may from time to time require.
Section I.6Registered Office and Agency.  The address of the registered office of the Company in the State of Indiana is 150 West Market Street, Suite 800, Indianapolis, Indiana 46204, and the name of the registered agent is C T Corporation System.
Section I.7Authorized Representatives.  The "Authorized Representatives" of a Member that is not a natural person shall be those representatives designated by such Member from time to time to represent such Member in connection with the Company, unless and until replaced or removed by such Member. The written statements and representations of an Authorized Representative for a Member that is not a natural Person shall be authorized statements and representations of such Member with respect to the matters covered by this Agreement with
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respect to a Member that is not a natural Person means a decision or action which has been consented to in writing by any Authorized Representative of such Member.
Section I.8Tax Treatment.  The Company shall be disregarded as an entity separate from its owner for U.S. federal tax purposes as provided in Treasury Regulations Section 301.7701-3 (as well as for applicable state, local or foreign tax purposes).  The Member and the Company shall timely make any and all necessary elections and filings such that the Company shall be treated as disregarded as an entity separate from its owner for U.S. federal income tax purposes (as well as for applicable state, local or foreign tax purposes).
Article II

DEFINITIONS
Section II.1Definitions.  References to an "Article" or a "Section" are, unless otherwise specified, to an Article or a Section of this Agreement.  As used in this Agreement, the following terms shall have the meanings set forth respectively after each:
"Act" shall mean the Indiana Business Flexibility Act (Ind. Code Section 23-18-1, et seq.),as the same may be amended from time to time.
"Affiliate" shall mean with reference to any Person, any other Person of which such Person is a principal, member, director, officer, general partner or employee or any other Person directly or indirectly controlling or controlled by or under direct or indirect common control with such Person.
"Agreement" shall mean this Amended and Restated Limited Liability Company Operating Agreement, as the same may be amended hereafter from time to time as provided herein.
"Authorized Representative" shall have the meaning specified in Section 1.7.
"Board" shall have the meaning set forth in Section 4.1.
"Capital Contribution" means the contribution by the Member to capital of the Company.
"Code" shall mean the Internal Revenue Code of 1986, as amended, and as the same may be amended hereafter from time to time.
"Company" shall have the meaning specified in the introductory paragraph to this Agreement.
"Company Expenses" shall have the meaning specified in Section 3.9.
"Director" shall mean each such Person who is hereafter elected or designated as a Director of the Company, in accordance with the terms of this Agreement, who shall be deemed a "manager" of the Company for all purposes under the Act and other applicable law.
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"Event of Bankruptcy" shall mean the institution by or against a Person of a proceeding seeking a judgment of insolvency or bankruptcy or any other relief under any bankruptcy or insolvency law or other similar law affecting creditors' rights.
"Interest" shall mean (i) a Member's share of the profits and losses of the Company and a Member's rights to receive distributions from the Company in accordance with the provisions of this Agreement and the Act and (ii) such Member's other rights and privileges as herein provided.
"Liquidating Trustee" shall have the meaning set forth in Section 12.2.
"Member"  shall have the meaning specified in the introductory paragraph to this Agreement.
"Officer" shall mean any individual elected or appointed as an officer of the Company pursuant to Section 7.1.
"Person" shall mean an individual, partnership, limited liability company, joint venture, corporation, trust or unincorporated organization, a government or agency or political subdivision thereof and any other entity.
"Related Persons" shall have the meaning specified in Section 3.3.
"Treasury Regulations" shall mean the Income Tax Regulations promulgated under the Code, as the same may be amended hereafter from time to time.
Article III

MANAGEMENT OF THE COMPANY
Section III.1Designation of Directors. The Directors collectively shall have the power on behalf and in the name of the Company to make all decisions and take all actions which they may deem necessary or desirable, including, without limitation, the following:
(a)managing the day-to-day operation of the Company;
(b)entering into, making and performing contracts, agreements and other undertakings binding upon the Company that may be necessary, appropriate or advisable in furtherance of the purposes of the Company and making all decisions and waivers thereunder;
(c)opening and maintaining bank and investment accounts and arrangements, drawing checks and other orders for the payment of money, and designating individuals with authority to sign or give instructions with respect to those accounts and arrangements;
(d)investing Company funds;
(e)maintaining the assets of the Company in good order;
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(f)to the extent that funds of the Company are available therefor, paying debts and obligations of the Company;
(g)borrowing money or otherwise incurring indebtedness on such terms and conditions as the Directors may deem appropriate and, in connection therewith, hypothecating, encumbering and/or granting security interests in the assets of the Company to secure the repayment of such monies or other indebtedness of the Company, provided that in no event shall any such borrowing be recourse to the Member unless expressly agreed in writing by the Member;
(h)executing instruments and documents, including, without limitation, checks, drafts, notes and other negotiable instruments, mortgages or deeds of trust, pledge agreements, security agreements, financing statements, documents providing for the acquisition, mortgaging or disposition of the Company's property, assignments, bills of sale, leases and any other instruments or documents necessary, in the opinion of the Directors or a duly elected or appointed Officer of the Company, acting within the scope of his or her authority, to the business of the Company;
(i)entering into any and all other agreements with any other Person for any purpose in furtherance of the business of the Company, in such form as the Directors or a duly elected or appointed Officer of the Company, acting within the scope of his or her authority, may approve;
(j)the bringing or defending, paying, collecting, compromising, arbitrating, resorting to legal action, or other adjustment of claims or demands of or against the Company;
(k)selecting, removing and changing the authority and responsibility of lawyers, accountants, and other advisers and consultants;
(l)obtaining insurance for the Company;
(m)taking all actions necessary to effectuate transactions pursuant to Article VIII hereof; and
(n)such other matters as may be necessary or advisable in connection with the operation of the business and conduct of affairs of the company and the accomplishment of the purposes of the Company.
The Directors or their duly authorized appointees or Officers of the Company may execute and deliver contracts and agreements on behalf of the Company in furtherance of the foregoing, without the consent of the Member, and otherwise act for and bind the Company. Third parties may conclusively rely upon the act of the Directors as evidence of the authority of the Directors for all purposes in respect of their dealings with the Company.
Section III.2Additional Powers, Duties and Limitations with respect to the Directors.
(a)Generally.  The Directors shall be responsible for, and shall render to the Company, such services as are reasonably necessary for the daily management, conduct and direction of the property, business and affairs of the Company. No compensation shall be paid to
4




the Directors for the performance of such services, nor shall the Directors be reimbursed for any expenses incurred in their capacity as such, except as otherwise provided in this Agreement, including without limitation Section 4.3 hereof. No Director shall have the ability individually to bind or act for the Company, rather, the Directors may only act collectively through action of the Board, subject to and in accordance with the terms and conditions of this Agreement.
(b)Limitation on Liability for Acts and Omissions of the Directors.  The Company shall pay any and all liability, loss, cost, expense (including reasonable attorneys' fees and disbursements) or damage incurred or sustained by the Directors by reason of any act or omission in the conduct of the business of the Company in accordance with the provisions of Section 11.1 hereof. The Directors, acting in good faith, shall be entitled to rely on the advice of legal counsel, accountants and/or other experts or professional advisers and any act or omission of the Directors acting in reliance upon such advice shall in no event subject such Directors to liability to the Company or any Member.
Section III.3Limitation on Liabilities and Powers of the Member.  Neither the Directors or their Affiliates or any Member or its Affiliates or any officer, director, partner, member or shareholder, employee or agent of the Directors or any Member (collectively, "Related Persons") shall have (a) any personal liability for any debts, liabilities or obligations of the Company, whether arising in contract or tort or otherwise, or (b) any obligation to the Company, except, in each case, as specifically provided elsewhere in this Agreement or under the Act.  Except to the extent expressly provided for herein and permitted under the Act, the Member shall not participate in the operation, management or control (within the meaning of the Act) of the business of the Company and shall have no right or authority to act for or on behalf of the Company or to sign for or bind the Company.
Section III.4Employment of Third Parties By the Company.  The Company, may, by action of its Officers, from time to time, employ any Person or engage third parties to render accounting, financial advisory and legal services to the Company.  Persons retained or engaged by the Officers, on its behalf, may also be engaged, retained or employed by and act on behalf of the Directors, the Member or any of their respective Affiliates.
Section III.5Filings.  The Directors are hereby authorized to execute and file all instruments, certificates, notices and documents, and to do or cause to be done all such filing, recording, publishing and other acts as may be deemed by the Directors to be necessary or appropriate from time to time to comply with all applicable requirements for the formation or operation or, when appropriate, termination of a limited liability company in the State of Indiana and all other jurisdictions where the Company does or shall desire to conduct its business.
Section III.6Expenses.  The Company will be responsible for all expenses ("Company Expenses"), including, without limitation, (i) all reasonable accounting and legal expenses incurred in connection with Company operations, (ii) all reasonable costs incurred in connection with the preparation of or relating to reports made to the Member, (iii) all reasonable costs related to litigation involving the Company, directly or indirectly, including, without limitation, attorneys' fees incurred in connection therewith, (iv) all reasonable costs related to the
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Company's obligations set forth in Sections 3.2 and 11.1, and (v) all reasonable out-of-pocket expenses related to the organization and formation of the Company.
Article IV

BOARD OF DIRECTORS
Section IV.1Appointment and Removal of Directors. Except as otherwise expressly provided in this Agreement, the Articles of Organization or the Act, all decisions with respect to the management of the business and affairs of the Company shall be made by a Board of Directors (the "Board"), each of whom shall be appointed by the Member.  Any Director may be removed at any time with or without cause by the Member.  Upon the removal of a Director, such Director shall cease to be a "manager" (within the meaning of the Act).
Section IV.2Number and Qualifications of Directors. The number of Directors constituting the Board may be fixed from time to time by the Member.
Section IV.3Compensation of Directors.  Directors, as such, may receive fixed fees and other compensation for their services as Directors as may be determined by the Member, including, without limitation, their services as members of committees of the Board.
Section IV.4Vacancies. Newly created directorships resulting from any increase in the authorized number of Directors or any vacancies in the Board resulting from death, resignation, disqualification, removal from office or any other cause shall be filled by a majority of the Directors then in office, although less than a quorum, or by a sole remaining Director; provided, that in the event that a Director is removed by the Member pursuant to Section 4.1, the Member may at the same time as such removal fill the vacancy caused by such removal; provided further, that if the Directors fail to fill any such vacancy within a reasonable period as determined by the Member in its sole discretion, the Member may fill any such vacancy.  Directors so chosen to fill a newly created directorship or other vacancies shall serve until such Director's successor has been duly elected and qualified or until his or her earlier death, resignation or removal as provided in this Agreement.  If any vacancies shall occur in the Board, by reason of death, resignation, disqualification, removal from office or any other cause, the Directors then in office shall continue to act, and actions may be taken by a majority of the Directors then in office, although less than a quorum, or by a sole remaining Director.
Article V

MEETINGS OF DIRECTORS
Section V.1Special Meetings.  Special meetings of the Board may be called at the request of the Member, the Chairman of the Board or a majority of the Board then in office.  The person or persons authorized to call special meetings of the Board may fix the place and time of the meetings.
Section V.2Notice.  Notice of any special meeting of the Board shall be given to each Director at such Director's business or residence in writing by hand delivery, first-class or
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overnight mail or courier service, facsimile or electronic transmission or orally by telephone.  If mailed by first-class mail, such notice shall be deemed adequately delivered when deposited in the United States mails so addressed, with postage thereon prepaid, at least 5 calendar days before such meeting.  If by overnight mail or courier service, such notice shall be deemed adequately delivered when the notice is delivered to the overnight mail or courier service company at least 24 hours before such meeting.  If by facsimile or electronic transmission, such notice shall be deemed adequately delivered when the notice is transmitted at least 12 hours before such meeting.  If by telephone or by hand delivery, the notice shall be given at least 12 hours prior to the time set for the meeting.  Neither the business to be transacted at, nor the purpose of, any regular or special meeting of the Board need be specified in the notice of such meeting.
Section V.3Quorum and Manner of Acting.  Unless the Articles of Organization or this Agreement provide otherwise, a majority of the number of Directors fixed pursuant to this Agreement shall constitute a quorum for the transaction of business at any meeting of the Board.  Unless required by law or the Articles of Organization or this Agreement provide otherwise, the affirmative vote of a majority of the Directors present at a meeting at which a quorum is present and voting on the matter shall be the act of the Board.
Section V.4Action by Consent of Board. On any matter that is to be voted on, consented to or approved by the Board, the Board may take such action without a meeting, without prior notice and without a vote if a consent or consents in writing, setting forth the action so taken, shall be signed by the Directors having not less than the minimum number of votes that would be necessary to authorize or take such action at a meeting at which all Directors entitled to vote thereon were present and voted.  On any matter that is to be voted on by Directors, the Directors may vote in person or by proxy, and such proxy may be granted in writing, by means of electronic transmission or as otherwise permitted by applicable law.  A consent transmitted by electronic transmission by a Director or by a person or persons authorized to act for a Director shall be deemed to be written and signed for purposes of this Agreement. For purposes of this Agreement, the term "electronic transmission" means any form of communication not directly involving the physical transmission of paper that creates a record that may be retained, retrieved and reviewed by a recipient thereof and that may be directly reproduced in paper form by such a recipient through an automated process.
Section V.5Conference Telephone Meetings.  Members of the Board may participate in a meeting of the Board by means of conference telephone or similar communications equipment by means of which all persons participating in the meeting can hear each other, and such participation in a meeting shall constitute presence in person at such meeting.
Article VI

COMMITTEES OF THE BOARD OF DIRECTORS
Section VI.1Committees and Powers.  The Board may designate one or more Committees of the Board, which shall consist of one or more Directors. Any such Committee may to the extent permitted by law exercise such powers and shall have such responsibilities as shall be specified in the designating resolution. A Committee of the Board may not (i) authorize
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distributions; (ii) approve, or propose to the Member, action that is required by law to be approved by the Member; (iii) fill vacancies on any Committee; (iv) authorize or approve reacquisition of Interests, except according to a formula or method prescribed by the Board; or (v) authorize or approve the issuance or sale or contract for the sale of Interests.  The Board shall have power at any time to fill vacancies in, to change the membership of, or to dissolve any such Committee.  Nothing herein shall be deemed to prevent the Board from appointing one or more Committees consisting in whole or in part of persons who are not Directors of the Company; provided, however, that no such Committee shall have or may exercise any authority of the Board.
Section VI.2Quorum and Manner of Acting.  Each Committee shall keep written minutes of its proceedings and shall report such proceedings to the Board when required.  The provisions of this Agreement governing meetings, action without meetings, notice and waiver of notice, and quorum and voting requirements of the Board apply to Committees of the Board established under Section 6.1.
Section VI.3Meetings and Notice.  Each Committee shall fix the time and place of its meetings, unless the Board shall otherwise provide.  Notice of meetings of any Committee shall be given to each member of the Committee in the manner provided for in Section 5.2.
Article VII

OFFICERS
Section VII.1Elected and Appointed Officers.  The elected Officers of the Company shall be a Chief Executive Officer, a President, a Secretary, a Treasurer, a Controller and such other Officers (including, without limitation, Executive Vice Presidents, Senior Vice Presidents and Vice Presidents) as the Board may deem proper.  Elected Officers shall have such powers and duties as generally pertain to their respective offices, subject to the specific provisions of this Article VII, including, without limitation, the duty to engage third parties to render accounting, financial advisory and legal services to the Company on such terms and for such compensation as the Officers may reasonably determine.  Such Officers shall also have such powers and duties as from time to time may be conferred by the Board or by any Committee thereof.  The Board or the Chief Executive Officer may from time to time appoint such other Officers (including one or more Vice Presidents, Assistant Secretaries, Assistant Treasurers and Assistant Controllers), as may be necessary or desirable for the conduct of the business of the Company.  Such other Officers and agents shall have such duties and shall hold their offices for such terms as shall be provided in this Agreement or, to the extent consistent with this Agreement, as may be prescribed by the Board or the Chief Executive Officer.  The Officers of the Company shall consist of such Officers as the Board may designate as Officers from time to time, who may or may not be "executive officers" as defined under rules and regulations of the Securities and Exchange Commission.
Section VII.2Election and Term of Office.  Officers of the Company may be elected by the Board at the regular annual meeting of the Board and at such other times as the Board may deem necessary. Officers may be appointed by the Chief Executive Officer to the extent authority to make such appointments is delegated by the Board to the Chief Executive Officer.  Each Officer shall hold office until such person's successor shall have been duly elected and shall have qualified
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or until such person's death or until he or she shall resign or shall be removed pursuant to Section 7.10.
Section VII.3Chairman of the Board and Chief Executive Officer.  The Chief Executive Officer of the Company shall be the Chairman of the Board and shall be responsible for the general management of the affairs of the Company and shall perform all duties incidental to such person's office which may be required by law and all such other duties as are properly required of the Chief Executive Officer or the Chairman of the Board by the Board.  The Chairman of the Board shall preside at all meetings of the Board and shall make reports to the Board and to the Member, and shall see that all orders and resolutions of the Board and of any Committee thereof are carried into effect. The Chief Executive Officer may also serve as President, if so elected by the Board.
Section VII.4President.  The President shall act in a general executive capacity and shall assist the Chief Executive Officer in the administration and operation of the Company's business and general supervision of its policies and affairs.  The President shall, unless the President is also serving as the Chief Executive Officer, in the absence of or because of the inability to act of the Chief Executive Officer, perform all duties of the Chief Executive Officer and preside at all meetings of the Board.
Section VII.5Vice Presidents.  The Executive Vice Presidents, the Senior Vice Presidents and the Vice Presidents shall have such powers and duties as may be prescribed for them, respectively, by the Board or the Chief Executive Officer.  Each of such Officers shall report to the Chief Executive Officer or such other Officer as the Board or the Chief Executive Officer shall direct.
Section VII.6Secretary.  The Secretary shall attend all meetings of the Board, shall keep a true and faithful record thereof in proper books and shall have the custody and care of the corporate seal, records, minute books and stock books of the Company and of such other books and papers as in the practical business operations of the Company shall naturally belong in the office or custody of the Secretary or as shall be placed in the Secretary's custody by order of the Board.  The Secretary shall keep a suitable record of the address of the Member and shall, except as may be otherwise required by statute or this Agreement, sign and issue all notices required for meetings of the Board.  The Secretary shall sign all papers to which the Secretary's signature may be necessary or appropriate, shall affix and attest the seal of the Company to all instruments requiring the seal, shall have the authority to certify this Agreement, resolutions of the Member or the Board and other documents of the Company as true and correct copies thereof and shall have such other powers and duties as are commonly incidental to the office of Secretary and as may be prescribed by the Board or the Chief Executive Officer.
Section VII.7Treasurer.  The Treasurer shall have charge of and supervision over and be responsible for the funds, securities, receipts and disbursements of the Company; cause the moneys and other valuable effects of the Company to be deposited in the name and to the credit of the Company in such banks or trust companies or with such bankers or other depositories as shall be selected in accordance with resolutions adopted by the Board; cause the funds of the Company to be disbursed by checks or drafts upon the authorized depositories of the Company, and cause to
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be taken and preserved proper vouchers for all moneys disbursed; render to the proper Officers and to the Board and the Finance Committee or similar Committee, if any, whenever requested, a statement of the financial condition of the Company and of all his or her transactions as Treasurer; cause to be kept at the principal executive offices of the Company correct books of account of all its business and transactions; and, in general, perform all duties incident to the office of Treasurer and such other duties as are given to him or her by this Agreement or as may be assigned to him or her by the Board or the Chief Executive Officer.
Section VII.8Controller.  The Controller shall be the chief accounting officer of the Company; shall keep full and accurate accounts of all assets, liabilities, commitments, revenues, costs and expenses, and other financial transactions of the Company in books belonging to the Company, and conform them to sound accounting principles with adequate internal control; shall cause regular audits of these books and records to be made; shall see that all expenditures are made in accordance with procedures duly established, from time to time, by the Company; shall render financial statements upon the request of the Board; and, in general, shall perform all the duties ordinarily connected with the office of Controller and such other duties as may be assigned to him or her by the Board or the Chief Executive Officer.
Section VII.9Assistant Secretaries, Assistant Treasurers and Assistant Controllers.  Assistant Secretaries, Assistant Treasurers and Assistant Controllers, when elected or appointed, shall respectively assist the Secretary, the Treasurer and the Controller in the performance of the respective duties assigned to such principal Officers, and in assisting such principal Officer, each of such assistant Officers shall for such purpose have the powers of such principal Officer; and, in case of the absence, disability, death, resignation or removal from office of any principal Officer, such principal Officer's duties shall, except as otherwise ordered by the Board, temporarily devolve upon such assistant Officer as shall be designated by the Board or the Chief Executive Officer.
Section VII.10Removal.  Any Officer or agent may be removed by the Board at any time and for any reason.  In addition, any Officer or agent appointed by the Chief Executive Officer may be removed by the Chief Executive Officer whenever, in his or her judgment, the best interests of the Company would be served thereby. Any removal shall be without prejudice to the contract rights, if any, of the person so removed.
Section VII.11Vacancies.  A newly created elected office and a vacancy in any elected office because of death, resignation or removal may be filled by the Board.  Any vacancy in any office appointed by the Chief Executive Officer because of death, resignation or removal may be filled by the Chief Executive Officer.
Article VIII

CONTRACTS, CHECKS, DRAFTS, DEPOSITS AND PROXIES
Section VIII.1Contracts.  The Board may authorize any Officer or Officers, agent or agents, to enter into any contract or execute and deliver any instrument in the name of and on behalf of the Company, and such authority may be general or confined to specific instances.
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Section VIII.2Checks and Drafts.  All checks, drafts or other orders for the payment of money, issued in the name of the Company, shall be signed by such Officer or Officers, agent or agents of the Company and in such manner as shall from time to time be determined by the Board or the Chief Executive Officer.
Section VIII.3Deposits.  All funds of the Company not otherwise employed shall be deposited from time to time to the credit of the Company in such depositories as may be selected by or under the authority of the Board.
Section VIII.4Proxies.  Unless otherwise provided by the Board, the Chief Executive Officer, the President or any Executive Vice President, Senior Vice President or Vice President may from time to time appoint an attorney or attorneys or agent or agents of the Company, in the name and on behalf of the Company, to cast the votes which the Company may be entitled to cast as the holder of stock or other securities in any other entity, any of whose stock or other securities may be held by the Company, at meetings of the holders of the stock or other securities of such other entity, or to consent in writing, in the name of the Company as such holder, to any action by such other entity, and may instruct the person or persons so appointed as to the manner of casting such votes or giving such consent, and may execute or cause to be executed in the name and on behalf of the Company and under seal or otherwise, all such written proxies or other instruments as he or she may deem necessary or proper in the premises.
Article IX

CAPITAL CONTRIBUTIONS; ALLOCATIONS AND DISTRIBUTIONS
Section IX.1Capital Contributions.  Upon the formation of the Company, the Member shall not be required to make a Capital Contribution. Capital Contributions shall be made from time to time as the Member shall determine.
Section IX.2Allocation of Profits and Losses.  All profits and losses of the Company shall be allocated to the Member.
Section IX.3Distributions.  All distributions of cash or other assets of the Company shall be made to the Member when and as determined by the Member, subject to any limitations or restrictions provided for in the Act.
Article X

MAINTENANCE OF BOOKS AND RECORDS, ETC.
Section X.1Books and Records.  The Company shall maintain those books and records required to be maintained by Section 23-18-4-8 of the Act, along with such other books and records as the Board or the Controller may determine from time to time.  All such books and records shall at all times be made available at the principal office of the Company and shall be open to the reasonable inspection and examination by the Directors or their duly authorized representatives during normal business hours.
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Section X.2Reports to the Indiana Secretary of State.  Pursuant to Section 23-18-12-11 of the Act, the Directors shall cause a biennial report to be filed with the Indiana Secretary of State every two calendar years following the calendar year in which the Company was organized, which sets forth all of the information as required under that section of the Act.
Article XI

INDEMNIFICATION
Section XI.1In General.  Any person who is or was serving as a Member, Director, Officer, employee or agent of the Company or who, at the request of the Company, is or was serving as a director, manager, officer, employee or agent of another corporation, limited liability company, partnership, joint venture, trust or other enterprise or Person, or as a trustee or administrator under an employee benefit plan, shall be indemnified by the Company, to the fullest extent permitted by law, against (a) litigation expenses, including costs, expenses and reasonable attorneys' fees incurred by any such person in connection with any threatened, pending or completed action, suit or proceedings, whether civil, criminal, administrative or investigative, whether formal or informal, and whether or not brought by or on behalf of the Company, arising out of such person's status as such or such person's activities in any of the foregoing capacities, (b) liability, including payments made by such person in satisfaction of any judgment, money decree, fine (including an excise tax assessed with respect to an employee benefit plan), penalty or settlement for which such person may have become liable in any such action, suit or proceeding, (c) payments made and personal liabilities reasonably incurred in the authorized conduct of the business of the Company or for the preservation of its business and its property and (d) reasonable costs, expenses and attorneys' fees incurred by such person in connection with the enforcement of the indemnification rights provided herein.  Any Person who is or was serving in any of the foregoing capacities for or on behalf of the Company shall be conclusively deemed to be doing or to have done so in reliance upon, and as consideration for, the indemnification rights provided herein.
The rights of indemnification provided herein (which shall be deemed to be a contract between any such person and the Company enforceable on the part of such person notwithstanding any subsequent amendment or repeal of this Agreement) shall inure to the benefit of the successors, estates or legal representatives of any such Person and shall not be exclusive of any other rights to which such Person may be entitled apart from this Agreement, by contract, resolution or otherwise.
Article XII

CESSATION OF MEMBERSHIP, DISSOLUTION, LIQUIDATION AND TERMINATION
Section XII.1Cessation of Membership. A Person shall cease to be a Member only upon the assignment of such Person's entire Interest and as otherwise expressly provided in this Agreement or the Company's Articles of Organization.
Section XII.2Dissolution and Termination.
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(a)The Company shall be dissolved and its affairs shall be wound up upon the first to occur of any of the following events (an "Event of Dissolution"):
(i)the decision by the Board to dissolve, wind up and liquidate the Company; or
(ii)the entry of a judicial dissolution pursuant to Section 23-18-9-2 of the Act.
(b)An Event of Bankruptcy affecting any Member or the transfer of any Interests shall not constitute an Event of Dissolution.
(c)Dissolution of the Company shall be effective on the effective date of the Event of Dissolution, but the Company shall not terminate until the assets thereof have been distributed in accordance with the provisions of Section 12.5 hereof and all other provisions of the Act with respect to the dissolution of a limited liability company have been complied with. Notwithstanding the dissolution of the Company, prior to the termination of the Company, the business, assets and affairs of the Company shall continue to be governed by this Agreement.
Section XII.3Liquidating Trustee. Upon the occurrence of an Event of Dissolution, sole and plenary authority to effectuate the liquidation of the Company shall be vested in the Board or a Person designated by the Board to effectuate the liquidation of the Company or if the Board elects not to effectuate such liquidation and fails to designate a liquidator, such Person as is selected by the Member (the "Liquidating Trustee").  The Liquidating Trustee shall proceed diligently to wind up the affairs of the Company, liquidate the assets of the Company in an orderly and businesslike manner consistent with obtaining the fair value thereof and distribute the assets of the Company in accordance with the provisions of Section 12.5 hereof. A reasonable amount of time shall be allowed for the orderly liquidation of the assets of the Company and the discharge of liabilities to creditors so as to enable the Liquidating Trustee to minimize the losses attendant upon such liquidation. Prior to such distribution of the Company's assets, the Liquidating Trustee shall continue to exploit the rights, activities and properties of the Company consistent with the sale or liquidation thereof, exercising in connection therewith all of the power and authority of the Board as herein set forth.
Section XII.4Accounting upon Dissolution and Termination.  Upon the distribution of the assets of the Company in accordance with the provisions of Section 12.5 hereof, the Liquidating Trustee shall cause the Company's accountants to make a full and proper accounting of the assets, liabilities and operations of the Company, as of and through the date on which such distribution occurs.
Section XII.5Distribution of Assets.
(a)As expeditiously as possible after the occurrence of an Event of Dissolution and the liquidation of the assets of the Company, the assets of the Company, including the proceeds of any such liquidation, shall be applied and distributed in the following order of priority:
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(i)First, all liabilities and obligations of the Company (including, without limitation, loans from the Member) shall be paid to creditors of the Company or provided for (whether by establishing reasonable reserves or otherwise as the Liquidating Trustee shall reasonably deem appropriate); and
(ii)Second, to the Member.
(b)The Liquidating Trustee shall have the authority to establish reasonable reserves for the payment of liabilities and obligations of the Company or to otherwise provide for the payment of Company liabilities and obligations as the Liquidating Trustee shall reasonably deem appropriate (as aforesaid).  All saleable assets of the Company may be sold in connection with the liquidation of the Company at public or private sale and at such price and upon such terms as the Liquidating Trustee, in its sole discretion, may deem advisable. The Member or any other Related Person may purchase assets at such sale. The Liquidating Trustee shall determine, in its sole discretion, which assets of the Company shall be liquidated through sale and which assets of the Company shall be distributed in kind.
Section XII.6Termination. Upon compliance with the foregoing distribution plan, the Company shall cease to be such, and the Liquidating Trustee shall execute, acknowledge and cause to be filed with the Secretary of State of the State of Indiana Articles of Dissolution of the Company.
Article XIII

MISCELLANEOUS
Section XIII.1Successors and Assigns; Third Party Beneficiaries. This Agreement shall be binding upon and inure to the benefit of the Member and its legal representatives, administrators, executors, successors and assigns. Except as set forth in Article XI, none of the provisions of this Agreement shall be for the benefit of or enforceable by any Person not a party hereto.
Section XIII.2Sole Limited Liability Company Operating Agreement. This Agreement, together with the documents expressly referred to herein, each as amended or supplemented, constitutes the sole limited liability company operating agreement of the Company.
Section XIII.3Assignment.  An assignee of a Member shall automatically become a Member, provided the assignee consents.
Section XIII.4Choice of Law; Forum and Waiver of Jury Trial. This Agreement shall be construed in accordance with the laws of the State of Indiana, without regard to the choice of laws rules thereof, and the obligations, rights and remedies of the Member hereunder shall be determined in accordance with such laws. Any legal suit, action or proceeding against any of the parties hereto arising out of or relating to this Agreement shall only be instituted in any federal or state court in Indiana.
14




Section XIII.5Interpretation.  Wherever from the context it appears appropriate, each term stated in either the singular or the plural shall include the singular and the plural, and pronouns stated in the masculine, the feminine or neuter gender shall include the masculine, the feminine and the neuter.
Section XIII.6Captions. Captions contained in this Agreement are inserted only as a matter of convenience and in no way define, limit or extend or otherwise affect the scope or intent of this Agreement or any provision hereof.
Section XIII.7Severability. If any provision of this Agreement, or the application of such provision to any Person or circumstance, shall be held invalid, illegal or unenforceable in any jurisdiction, the validity, legality and enforceability of the remaining provisions of this Agreement, or the application of such provision in jurisdictions or to Persons or circumstances other than those to which it is held invalid, illegal or unenforceable shall not be affected thereby.
Section XIII.8Counterparts. This Agreement may be executed in several counterparts, each of which shall be deemed an original but all of which shall constitute one and the same instrument.
Section XIII.9Non-Waiver. No provision of this Agreement shall be deemed to have been waived unless such waiver is contained in a written notice given to the party claiming such waiver has occurred, provided that no such waiver shall be deemed to be a waiver of any other or further obligation or liability of the party or parties in whose favor the waiver was given.
Section XIII.10Time Periods. In applying any provision of this Agreement which requires that an act be done or not be done a specified number of days prior to an event or that an act be done during a period of a specified number of days prior to an event, calendar days shall be used, the day of the doing of the act shall be excluded, and the day of the event shall be included.
Section XIII.11Resignations.  Any Director or any Officer, whether elected or appointed, may resign at any time by giving written notice of such resignation to the Board, the Chairman of the Board or the Secretary, and such resignation shall be deemed to be effective when communicated unless the notice specifies a later effective date. No formal action shall be required on behalf of the Company to make any such resignation effective.  Upon the effectiveness of any such resignation, such Director shall cease to be a "manager" (within the meaning of the Act)
Section XIII.12Continuation of Obligations.  The Company hereby expressly covenants, agrees and confirms, notwithstanding the Conversion, (i) that its obligation promptly to pay, perform and discharge when due each and every debt, obligation, covenant and agreement incurred, made or to be paid, performed or discharged by the Company under the indenture of mortgage or deed of trust, dated September 1, 1939, as supplemented (the "Mortgage"), from Duke Energy Indiana, Inc. to Deutsche Bank National Trust Company, as successor Trustee, continues upon the Conversion, (ii) that, pursuant to Section 23-1-38.5-15 of the Indiana Business Corporation Law, title to all real estate and other property owned by the Company, prior to the Conversion, continues to be vested in the Company upon the Conversion, without reversion or impairment and that all liabilities of the Company, prior to the Conversion, continue as liabilities of the Company upon the Conversion; (iii) that all rights of holders of First Mortgage Bonds
15




outstanding under the Mortgage and of the Trustee which existed immediately prior to the Conversion are preserved unimpaired; and (iv) that all debts, liabilities and duties of the Company under the Mortgage which existed immediately prior to the Conversion may be enforced against it to the same extent as if said debts, liabilities and duties had originally been incurred or contracted by it in its capacity as an Indiana limited liability company.
Article XIV

AMENDMENTS
Section XIV.1Amendment.  Except as required by law or as otherwise provided in the Articles of Organization or in this Agreement, this Agreement may be amended or repealed and a new Agreement may be adopted only by the Member.

[Remainder of Page Intentionally Left  Blank]
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IN WITNESS WHEREOF, the undersigned has executed this Agreement as of the date set forth on the first page of this Agreement.
DUKE ENERGY INDIANA HOLDCO, LLC
By:     /s/ Stan Pinegar    
    Name:    Stan Pinegar
    Title:    State President - Indiana



EXHIBIT 31.1.8
CERTIFICATION OF THE CHIEF EXECUTIVE OFFICER
PURSUANT TO SECTION 302 OF THE SARBANES-OXLEY ACT OF 2002
I, Lynn J. Good, certify that:
1)    I have reviewed this quarterly report on Form 10-Q of Piedmont Natural Gas Company, Inc.;
2)    Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
3)    Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;
4)    The registrant’s other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Acts Rules 13a-15(f) and 15d-15(f)) for the registrant and have:
a)    Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
b)    Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
c)    Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
d)    Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and
5)    The registrant’s other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):
a)    All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and
b)    Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.
Date: November 4, 2021
/s/ LYNN J. GOOD
Lynn J. Good
Chief Executive Officer
 


EXHIBIT 31.1.6
CERTIFICATION OF THE CHIEF EXECUTIVE OFFICER
PURSUANT TO SECTION 302 OF THE SARBANES-OXLEY ACT OF 2002
I, Lynn J. Good, certify that:
1)    I have reviewed this quarterly report on Form 10-Q of Duke Energy Ohio, Inc.;
2)    Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
3)    Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;
4)    The registrant’s other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Acts Rules 13a-15(f) and 15d-15(f)) for the registrant and have:
a)    Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
b)    Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
c)    Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
d)    Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and
5)    The registrant’s other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):
a)    All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and
b)    Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.
Date: November 4, 2021
/s/ LYNN J. GOOD
Lynn J. Good
Chief Executive Officer



EXHIBIT 31.1.1
CERTIFICATION OF THE CHIEF EXECUTIVE OFFICER
PURSUANT TO SECTION 302 OF THE SARBANES-OXLEY ACT OF 2002
I, Lynn J. Good, certify that:
1)    I have reviewed this quarterly report on Form 10-Q of Duke Energy Corporation;
2)    Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
3)    Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;
4)    The registrant’s other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Acts Rules 13a-15(f) and 15d-15(f)) for the registrant and have:
a)    Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
b)    Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
c)    Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
d)    Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and
5)    The registrant’s other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):
a)    All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and
b)    Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.
Date: November 4, 2021
/s/ LYNN J. GOOD
Lynn J. Good
Chair, President and
Chief Executive Officer
 


EXHIBIT 31.1.2
CERTIFICATION OF THE CHIEF EXECUTIVE OFFICER
PURSUANT TO SECTION 302 OF THE SARBANES-OXLEY ACT OF 2002
I, Lynn J. Good, certify that:
1)    I have reviewed this quarterly report on Form 10-Q of Duke Energy Carolinas, LLC;
2)    Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
3)    Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;
4)    The registrant’s other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Acts Rules 13a–15(f) and 15d–15(f)) for the registrant and have:
a)    Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
b)    Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
c)    Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
d)    Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and
5)    The registrant’s other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):
a)    All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and
b)    Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.
Date: November 4, 2021
/s/ LYNN J. GOOD
Lynn J. Good
Chief Executive Officer



EXHIBIT 31.1.3
CERTIFICATION OF THE CHIEF EXECUTIVE OFFICER
PURSUANT TO SECTION 302 OF THE SARBANES-OXLEY ACT OF 2002
I, Lynn J. Good, certify that:
1)    I have reviewed this quarterly report on Form 10-Q of Progress Energy, Inc.;
2)    Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
3)    Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;
4)    The registrant’s other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Acts Rules 13a–15(f) and 15d–15(f)) for the registrant and have:
a)    Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
b)    Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
c)    Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
d)    Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and
5)    The registrant’s other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):
a)    All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and
b)    Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.
Date: November 4, 2021
/s/ LYNN J. GOOD
Lynn J. Good
Chief Executive Officer



EXHIBIT 31.1.4
CERTIFICATION OF THE CHIEF EXECUTIVE OFFICER
PURSUANT TO SECTION 302 OF THE SARBANES-OXLEY ACT OF 2002
I, Lynn J. Good, certify that:
1)    I have reviewed this quarterly report on Form 10-Q of Duke Energy Progress, LLC;
2)    Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
3)    Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;
4)    The registrant’s other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Acts Rules 13a–15(f) and 15d–15(f)) for the registrant and have:
a)    Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
b)    Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
c)    Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
d)    Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and
5)    The registrant’s other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):
a)    All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and
b)    Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.
Date: November 4, 2021
/s/ LYNN J. GOOD
Lynn J. Good
Chief Executive Officer



EXHIBIT 31.1.5
CERTIFICATION OF THE CHIEF EXECUTIVE OFFICER
PURSUANT TO SECTION 302 OF THE SARBANES-OXLEY ACT OF 2002
I, Lynn J. Good, certify that:
1)    I have reviewed this quarterly report on Form 10-Q of Duke Energy Florida, LLC;
2)    Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
3)    Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;
4)    The registrant’s other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Acts Rules 13a–15(f) and 15d–15(f)) for the registrant and have:
a)    Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
b)    Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
c)    Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
d)    Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and
5)    The registrant’s other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):
a)    All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and
b)    Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.
Date: November 4, 2021
/s/ LYNN J. GOOD
Lynn J. Good
Chief Executive Officer



EXHIBIT 31.1.7
CERTIFICATION OF THE CHIEF EXECUTIVE OFFICER
PURSUANT TO SECTION 302 OF THE SARBANES-OXLEY ACT OF 2002
I, Lynn J. Good, certify that:
1)    I have reviewed this quarterly report on Form 10-Q of Duke Energy Indiana, LLC;
2)    Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
3)    Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;
4)    The registrant’s other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Acts Rules 13a-15(f) and 15d-15(f)) for the registrant and have:
a)    Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
b)    Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
c)    Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
d)    Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and
5)    The registrant’s other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):
a)    All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and
b)    Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.
Date: November 4, 2021
/s/ LYNN J. GOOD
Lynn J. Good
Chief Executive Officer



EXHIBIT 31.2.3
CERTIFICATION OF THE CHIEF FINANCIAL OFFICER
PURSUANT TO SECTION 302 OF THE SARBANES-OXLEY ACT OF 2002
I, Steven K. Young, certify that:
1)    I have reviewed this quarterly report on Form 10-Q of Progress Energy, Inc.;
2)    Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
3)    Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;
4)    The registrant’s other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Acts Rules 13a–15(f) and 15d–15(f)) for the registrant and have:
a)    Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
b)    Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
c)    Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
d)    Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and
5)    The registrant’s other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):
a)    All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and
b)    Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.
Date: November 4, 2021
/s/ STEVEN K. YOUNG
Steven K. Young
Executive Vice President and Chief Financial Officer 



EXHIBIT 31.2.1
CERTIFICATION OF THE CHIEF FINANCIAL OFFICER
PURSUANT TO SECTION 302 OF THE SARBANES-OXLEY ACT OF 2002
I, Steven K. Young, certify that:
1)    I have reviewed this quarterly report on Form 10-Q of Duke Energy Corporation;
2)    Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
3)    Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;
4)    The registrant’s other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Acts Rules 13a-15(f) and 15d-15(f)) for the registrant and have:
a)    Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
b)    Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
c)    Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
d)    Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and
5)    The registrant’s other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):
a)    All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and
b)    Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.
Date: November 4, 2021
/s/ STEVEN K. YOUNG
Steven K. Young
Executive Vice President and Chief Financial Officer



EXHIBIT 31.2.2
CERTIFICATION OF THE CHIEF FINANCIAL OFFICER
PURSUANT TO SECTION 302 OF THE SARBANES-OXLEY ACT OF 2002
I, Steven K. Young, certify that:
1)    I have reviewed this quarterly report on Form 10-Q of Duke Energy Carolinas, LLC;
2)    Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
3)    Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;
4)    The registrant’s other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Acts Rules 13a–15(f) and 15d–15(f)) for the registrant and have:
a)    Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
b)    Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
c)    Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
d)    Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and
5)    The registrant’s other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):
a)    All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and
b)    Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.
Date: November 4, 2021
/s/ STEVEN K. YOUNG
Steven K. Young
Executive Vice President and Chief Financial Officer



EXHIBIT 31.2.4
CERTIFICATION OF THE CHIEF FINANCIAL OFFICER
PURSUANT TO SECTION 302 OF THE SARBANES-OXLEY ACT OF 2002
I, Steven K. Young, certify that:
1)    I have reviewed this quarterly report on Form 10-Q of Duke Energy Progress, LLC;
2)    Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
3)    Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;
4)    The registrant’s other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Acts Rules 13a–15(f) and 15d–15(f)) for the registrant and have:
a)    Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
b)    Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
c)    Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
d)    Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and
5)    The registrant’s other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):
a)    All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and
b)    Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.
Date: November 4, 2021
/s/ STEVEN K. YOUNG
Steven K. Young
Executive Vice President and Chief Financial Officer



EXHIBIT 31.2.5
CERTIFICATION OF THE CHIEF FINANCIAL OFFICER
PURSUANT TO SECTION 302 OF THE SARBANES-OXLEY ACT OF 2002
I, Steven K. Young, certify that:
1)    I have reviewed this quarterly report on Form 10-Q of Duke Energy Florida, LLC;
2)    Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
3)    Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;
4)    The registrant’s other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Acts Rules 13a–15(f) and 15d–15(f)) for the registrant and have:
a)    Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
b)    Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
c)    Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
d)    Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and
5)    The registrant’s other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):
a)    All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and
b)    Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.
Date: November 4, 2021
/s/ STEVEN K. YOUNG
Steven K. Young
Executive Vice President and Chief Financial Officer



EXHIBIT 31.2.6
CERTIFICATION OF THE CHIEF FINANCIAL OFFICER
PURSUANT TO SECTION 302 OF THE SARBANES-OXLEY ACT OF 2002
I, Steven K. Young, certify that:
1)    I have reviewed this quarterly report on Form 10-Q of Duke Energy Ohio, Inc.;
2)    Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
3)    Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;
4)    The registrant’s other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Acts Rules 13a-15(f) and 15d-15(f)) for the registrant and have:
a)    Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
b)    Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
c)    Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
d)    Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and
5)    The registrant’s other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):
a)    All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and
b)    Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.
Date: November 4, 2021
/s/ STEVEN K. YOUNG
Steven K. Young
Executive Vice President and Chief Financial Officer



EXHIBIT 31.2.7
CERTIFICATION OF THE CHIEF FINANCIAL OFFICER
PURSUANT TO SECTION 302 OF THE SARBANES-OXLEY ACT OF 2002
I, Steven K. Young, certify that:
1)    I have reviewed this quarterly report on Form 10-Q of Duke Energy Indiana, LLC;
2)    Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
3)    Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;
4)    The registrant’s other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Acts Rules 13a-15(f) and 15d-15(f)) for the registrant and have:
a)    Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
b)    Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
c)    Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
d)    Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and
5)    The registrant’s other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):
a)    All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and
b)    Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.
Date: November 4, 2021
/s/ STEVEN K. YOUNG
Steven K. Young
Executive Vice President and Chief Financial Officer



EXHIBIT 31.2.8
CERTIFICATION OF THE CHIEF FINANCIAL OFFICER
PURSUANT TO SECTION 302 OF THE SARBANES-OXLEY ACT OF 2002
I, Steven K. Young, certify that:
1)    I have reviewed this quarterly report on Form 10-Q of Piedmont Natural Gas Company, Inc.;
2)    Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
3)    Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;
4)    The registrant’s other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Acts Rules 13a–15(f) and 15d–15(f)) for the registrant and have:
a)    Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
b)    Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
c)    Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
d)    Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and
5)    The registrant’s other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):
a)    All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and
b)    Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.
Date: November 4, 2021
/s/ STEVEN K. YOUNG
Steven K. Young
Executive Vice President and Chief Financial Officer 



EXHIBIT 32.1.2
CERTIFICATION PURSUANT TO
18 U.S.C. SECTION 1350,
AS ADOPTED PURSUANT TO
SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002
In connection with the Quarterly Report of Duke Energy Carolinas, LLC (“Duke Energy Carolinas”) on Form 10-Q for the period ending September 30, 2021, as filed with the Securities and Exchange Commission on the date hereof (the “Report”), I, Lynn J. Good, Chief Executive Officer of Duke Energy Carolinas, certify, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that:
(1)    The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and
(2)    The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of Duke Energy Carolinas.
/s/ LYNN J. GOOD
Lynn J. Good
Chief Executive Officer
November 4, 2021


EXHIBIT 32.1.1
CERTIFICATION PURSUANT TO
18 U.S.C. SECTION 1350,
AS ADOPTED PURSUANT TO
SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002
In connection with the Quarterly Report of Duke Energy Corporation (“Duke Energy”) on Form 10-Q for the period ending September 30, 2021, as filed with the Securities and Exchange Commission on the date hereof (the “Report”), I, Lynn J. Good, Chair, President and Chief Executive Officer of Duke Energy, certify, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that:
(1)    The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and
(2)    The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of Duke Energy.
/s/ LYNN J. GOOD
Lynn J. Good
Chair, President and
Chief Executive Officer
November 4, 2021


EXHIBIT 32.1.3
CERTIFICATION PURSUANT TO
18 U.S.C. SECTION 1350,
AS ADOPTED PURSUANT TO
SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002
In connection with the Quarterly Report of Progress Energy, Inc. (“Progress Energy”) on Form 10-Q for the period ending September 30, 2021, as filed with the Securities and Exchange Commission on the date hereof (the “Report”), I, Lynn J. Good, Chief Executive Officer of Progress Energy, certify, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that:
(1)    The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and
(2)    The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of Progress Energy.
/s/ LYNN J. GOOD
Lynn J. Good
Chief Executive Officer
November 4, 2021


EXHIBIT 32.1.4
CERTIFICATION PURSUANT TO
18 U.S.C. SECTION 1350,
AS ADOPTED PURSUANT TO
SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002
In connection with the Quarterly Report of Duke Energy Progress, LLC (“Duke Energy Progress”) on Form 10-Q for the period ending September 30, 2021, as filed with the Securities and Exchange Commission on the date hereof (the “Report”), I, Lynn J. Good, Chief Executive Officer of Duke Energy Progress, certify, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that:
(1)    The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and
(2)    The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of Duke Energy Progress.
/s/ LYNN J. GOOD
Lynn J. Good
Chief Executive Officer
November 4, 2021


EXHIBIT 32.1.5
CERTIFICATION PURSUANT TO
18 U.S.C. SECTION 1350,
AS ADOPTED PURSUANT TO
SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002
In connection with the Quarterly Report of Duke Energy Florida, LLC (“Duke Energy Florida”) on Form 10-Q for the period ending September 30, 2021, as filed with the Securities and Exchange Commission on the date hereof (the “Report”), I, Lynn J. Good, Chief Executive Officer of Duke Energy Florida, certify, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that:
(1)    The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and
(2)    The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of Duke Energy Florida.
/s/ LYNN J. GOOD
Lynn J. Good
Chief Executive Officer
November 4, 2021


EXHIBIT 32.1.6
CERTIFICATION PURSUANT TO
18 U.S.C. SECTION 1350,
AS ADOPTED PURSUANT TO
SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002
In connection with the Quarterly Report of Duke Energy Ohio, Inc. (“Duke Energy Ohio”) on Form 10-Q for the period ending September 30, 2021, as filed with the Securities and Exchange Commission on the date hereof (the “Report”), I, Lynn J. Good, Chief Executive Officer of Duke Energy Ohio, certify, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that:
(1)    The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and
(2)    The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of Duke Energy Ohio.
/s/ LYNN J. GOOD
Lynn J. Good
Chief Executive Officer
November 4, 2021


EXHIBIT 32.1.7
CERTIFICATION PURSUANT TO
18 U.S.C. SECTION 1350,
AS ADOPTED PURSUANT TO
SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002
In connection with the Quarterly Report of Duke Energy Indiana, LLC (“Duke Energy Indiana”) on Form 10-Q for the period ending September 30, 2021, as filed with the Securities and Exchange Commission on the date hereof (the “Report”), I, Lynn J. Good, Chief Executive Officer of Duke Energy Indiana, certify, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that:
(1)    The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and
(2)    The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of Duke Energy Indiana.
/s/ LYNN J. GOOD
Lynn J. Good
Chief Executive Officer
November 4, 2021



EXHIBIT 32.1.8
CERTIFICATION PURSUANT TO
18 U.S.C. SECTION 1350,
AS ADOPTED PURSUANT TO
SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002
In connection with the Quarterly Report of Piedmont Natural Gas Company, Inc. (“Piedmont”) on Form 10-Q for the period ending September 30, 2021, as filed with the Securities and Exchange Commission on the date hereof (the “Report”), I, Lynn J. Good, Chief Executive Officer of Piedmont, certify, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that:
(1)    The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and
(2)    The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of Piedmont.
/s/ LYNN J. GOOD
Lynn J. Good
Chief Executive Officer
November 4, 2021


EXHIBIT 32.2.7
CERTIFICATION PURSUANT TO
18 U.S.C. SECTION 1350,
AS ADOPTED PURSUANT TO
SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002
In connection with the Quarterly Report of Duke Energy Indiana, LLC (“Duke Energy Indiana”) on Form 10-Q for the period ending September 30, 2021, as filed with the Securities and Exchange Commission on the date hereof (the “Report”), I, Steven K. Young, Executive Vice President and Chief Financial Officer of Duke Energy Indiana, certify, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that:
(1)    The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and
(2)    The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of Duke Energy Indiana.
/s/ STEVEN K. YOUNG
Steven K. Young
Executive Vice President and Chief Financial Officer
November 4, 2021


EXHIBIT 32.2.6
CERTIFICATION PURSUANT TO
18 U.S.C. SECTION 1350,
AS ADOPTED PURSUANT TO
SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002
In connection with the Quarterly Report of Duke Energy Ohio, Inc. (“Duke Energy Ohio”) on Form 10-Q for the period ending September 30, 2021, as filed with the Securities and Exchange Commission on the date hereof (the “Report”), I, Steven K. Young, Executive Vice President and Chief Financial Officer of Duke Energy Ohio, certify, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that:
(1)    The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and
(2)    The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of Duke Energy Ohio.
/s/ STEVEN K. YOUNG
Steven K. Young
Executive Vice President and Chief Financial Officer
November 4, 2021


EXHIBIT 32.2.5
CERTIFICATION PURSUANT TO
18 U.S.C. SECTION 1350,
AS ADOPTED PURSUANT TO
SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002
In connection with the Quarterly Report of Duke Energy Florida, LLC (“Duke Energy Florida”) on Form 10-Q for the period ending September 30, 2021, as filed with the Securities and Exchange Commission on the date hereof (the “Report”), I, Steven K. Young, Executive Vice President and Chief Financial Officer of Duke Energy Florida, certify, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that:
(1)    The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and
(2)    The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of Duke Energy Florida.
/s/ STEVEN K. YOUNG
Steven K. Young
Executive Vice President and Chief Financial Officer
November 4, 2021


EXHIBIT 32.2.4
CERTIFICATION PURSUANT TO
18 U.S.C. SECTION 1350,
AS ADOPTED PURSUANT TO
SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002
In connection with the Quarterly Report of Duke Energy Progress, LLC (“Duke Energy Progress”) on Form 10-Q for the period ending September 30, 2021, as filed with the Securities and Exchange Commission on the date hereof (the “Report”), I, Steven K. Young, Executive Vice President and Chief Financial Officer of Duke Energy Progress, certify, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that:
(1)    The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and
(2)    The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of Duke Energy Progress.
/s/ STEVEN K. YOUNG
Steven K. Young
Executive Vice President and Chief Financial Officer
November 4, 2021


EXHIBIT 32.2.3
CERTIFICATION PURSUANT TO
18 U.S.C. SECTION 1350,
AS ADOPTED PURSUANT TO
SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002
In connection with the Quarterly Report of Progress Energy, Inc. (“Progress Energy”) on Form 10-Q for the period ending September 30, 2021, as filed with the Securities and Exchange Commission on the date hereof (the “Report”), I, Steven K. Young, Executive Vice President and Chief Financial Officer of Progress Energy, certify, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that:
(1)    The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and
(2)    The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of Progress Energy.
/s/ STEVEN K. YOUNG
Steven K. Young
Executive Vice President and Chief Financial Officer
November 4, 2021


EXHIBIT 32.2.8
CERTIFICATION PURSUANT TO
18 U.S.C. SECTION 1350,
AS ADOPTED PURSUANT TO
SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002
In connection with the Quarterly Report of Piedmont Natural Gas Company, Inc. (“Piedmont”) on Form 10-Q for the period ending September 30, 2021, as filed with the Securities and Exchange Commission on the date hereof (the “Report”), I, Steven K. Young, Executive Vice President and Chief Financial Officer of Piedmont, certify, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that:
(1)    The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and
(2)    The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of Piedmont.
/s/ STEVEN K. YOUNG
Steven K. Young
Executive Vice President and Chief Financial Officer
November 4, 2021


EXHIBIT 32.2.1
CERTIFICATION PURSUANT TO
18 U.S.C. SECTION 1350,
AS ADOPTED PURSUANT TO
SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002
In connection with the Quarterly Report of Duke Energy Corporation (“Duke Energy”) on Form 10-Q for the period ending September 30, 2021, as filed with the Securities and Exchange Commission on the date hereof (the “Report”), I, Steven K. Young, Executive Vice President and Chief Financial Officer of Duke Energy, certify, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that:
(1)    The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and
(2)    The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of Duke Energy.
/s/ STEVEN K. YOUNG
Steven K. Young
Executive Vice President and Chief Financial Officer
November 4, 2021


EXHIBIT 32.2.2
CERTIFICATION PURSUANT TO
18 U.S.C. SECTION 1350,
AS ADOPTED PURSUANT TO
SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002
In connection with the Quarterly Report of Duke Energy Carolinas, LLC (“Duke Energy Carolinas”) on Form 10-Q for the period ending September 30, 2021, as filed with the Securities and Exchange Commission on the date hereof (the “Report”), I, Steven K. Young, Executive Vice President and Chief Financial Officer of Duke Energy Carolinas, certify, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that:
(1)    The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and
(2)    The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of Duke Energy Carolinas.
/s/ STEVEN K. YOUNG
Steven K. Young
Executive Vice President and Chief Financial Officer
November 4, 2021