TABLE OF CONTENTS



	Cautionary Statement Regarding Forward-Looking Information

PART I. FINANCIAL INFORMATION
Item 1.	Financial Statements

	Duke Energy Corporation Financial Statements	9

	Duke Energy Carolinas, LLC Financial Statements	1415

	Progress Energy, Inc. Financial Statements	1819

	Duke Energy Progress, LLC Financial Statements	2223

	Duke Energy Florida, LLC Financial Statements	2627

	Duke Energy Ohio, Inc. Financial Statements	3031

	Duke Energy Indiana, LLC Financial Statements	3435

	Piedmont Natural Gas Company, Inc. Financial Statements	3839

	Combined Notes to Condensed Consolidated Financial Statements
	Note 1 – Organization and Basis of Presentation	4243
	Note 2 – Business Segments	4445
	Note 3 – Regulatory Matters	4647
	Note 4 – Commitments and Contingencies	5458
	Note 5 – Leases	5862
	Note 6 – Debt and Credit Facilities	6267
	Note 7 – Asset Retirement Obligations	6469
	Note 8 – Goodwill	6570
	Note 9 – Related Party Transactions	6671
	Note 10 – Derivatives and Hedging	6772
	Note 11 – Investments in Debt and Equity Securities	7277
	Note 12 – Fair Value Measurements	7782
	Note 13 – Variable Interest Entities	8287
	Note 14 – Revenue	8691
	Note 15 – Stockholders' Equity	8996
	Note 16 – Employee Benefit Plans	9097
	Note 17 – Income Taxes	9199
	Note 18 – Subsequent Events	9299

Item 2.	Management's Discussion and Analysis of Financial Condition and Results of Operations	93100

Item 3.	Quantitative and Qualitative Disclosures About Market Risk	~~113~~122

Item 4.	Controls and Procedures	~~113~~122

PART II. OTHER INFORMATION
Item 1.	Legal Proceedings	~~114~~124

Item 1A.	Risk Factors	~~114~~124

Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	~~114~~124

Item 6.	Exhibits	~~115~~125

	Signatures	~~118~~128



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:

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 Crystal River Unit 3 and other 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;

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;

The ability to obtain the necessary permits and approvals and to complete necessary or desirable pipeline expansion or infrastructure projects in our natural gas business;

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;

Employee workforce factors, including the potential inability to attract and retain key personnel;

The ability of subsidiaries to pay dividends or distributions to Duke Energy Corporation holding company (the Parent);



FORWARD LOOKING STATEMENTS

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; 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 OPC and other customer advocates

2017 Settlement	Second Revised and Restated Settlement Agreement in 2017 among Duke Energy Florida, the Florida OPC and other customer advocates, which replaces and supplants the 2013 Settlement

ACP	Atlantic Coast Pipeline, LLC, a limited liability company owned by Dominion, Duke Energy and Southern Company Gas

ACP pipeline	The approximately 600-mile proposed interstate natural gas pipeline

AFS	Available for Sale

AFUDC	Allowance for funds used during construction

the Agents	Wells Fargo Securities, LLC, Citigroup Global Market Inc., J.P. Morgan Securities, LLC

ALJ	Administrative Law Judge

AMI	Advanced Metering Infrastructure

AMT	Alternative Minimum Tax

AOCI	Accumulated Other Comprehensive Income (Loss)

ARO	Asset retirement obligations

ATM	At-the-market

Beckjord	Beckjord Generating Station

Belews Creek	Belews Creek Steam Station

Bison	Bison Insurance Company Limited

Cardinal	Cardinal Pipeline Company, LLC

CC	Combined Cycle

CCR	Coal Combustion Residuals

Citrus County CC	Citrus County Combined Cycle Facility

Coal Ash Act	North Carolina Coal Ash Management Act of 2014

the Company	Duke Energy Corporation and its subsidiaries

Constitution	Constitution Pipeline Company, LLC

CPCN	Certificate of Public Convenience and Necessity

CPRE	Competitive Procurement of Renewable Energy

CRC	Cinergy Receivables Company LLC

Crystal River Unit 3	Crystal River Unit 3 Nuclear Plant

CWA	Clean Water Act

D.C. Circuit Court	U.S. Court of Appeals for the District of Columbia Circuit

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

DRIP	Dividend Reinvestment Program

Duke Energy	Duke Energy Corporation (collectively with its subsidiaries)

Duke Energy Ohio	Duke Energy Ohio, Inc.

Duke Energy Progress	Duke Energy Progress, LLC



GLOSSARY OF TERMS



Duke Energy Carolinas	Duke Energy Carolinas, LLC

Duke Energy Florida	Duke Energy Florida, LLC



~~GLOSSARY OF TERMS~~



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

the EDA	Equity Distribution Agreement

EDIT	Excess deferred income tax

EPA	U.S. Environmental Protection Agency

EPC	Engineering, Procurement and Construction agreement

EPS	Earnings Per Share

ESP	Electric Security Plan

ETR	Effective tax rate

Exchange Act	Securities Exchange Act of 1934

FASB	Financial Accounting Standards Board

FERC	Federal Energy Regulatory Commission

FES	FirstEnergy Solutions Corp.

Fitch	Fitch Ratings, Inc.

Fluor	Fluor Enterprises, Inc.

FPSC	Florida Public Service Commission

FTR	Financial transmission rights

FV-NI	Fair value through net income

GAAP	Generally accepted accounting principles in the U.S.

GAAP Reported Earnings	Net Income Attributable to Duke Energy Corporation

GAAP Reported EPS	Diluted EPS Attributable to Duke Energy Corporation common stockholders

GWh	Gigawatt-hours

Hardy Storage	Hardy Storage Company, LLC

HLBV	Hypothetical Liquidation at Book Value

ICPA	Inter-Company Power Agreement

IGCC	Integrated Gasification Combined Cycle

IMR	Integrity Management Rider

IRP	Integrated Resource Plan

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

~~JAAR~~	~~Joint Asset Agency Rider~~

JDA	Joint Dispatch Agreement

KPSC	Kentucky Public Service Commission

Lee Nuclear Station	William States Lee III Nuclear Station

MGP	Manufactured gas plant

MISO	Midcontinent Independent System Operator, Inc.

MMBtu	Million British Thermal Unit

Moody's	Moody's Investors Service, Inc.



GLOSSARY OF TERMS



MW	Megawatt

MWh	Megawatt-hour

NAV	Net asset value



~~GLOSSARY OF TERMS~~



NCDEQ	North Carolina Department of Environmental Quality (formerly the North Carolina Department of Environment and Natural Resources)

NCUC	North Carolina Utilities Commission

NDTF	Nuclear decommissioning trust funds

NMC	National Methanol Company

NPDES	National Pollutant Discharge Elimination System

NPNS	Normal purchase/normal sale

NRC	U.S. Nuclear Regulatory Commission

OPEB	Other Post-Retirement Benefit Obligations

ORS	South Carolina Office of Regulatory Staff

OTTI	Other-than-temporary impairment

OVEC	Ohio Valley Electric Corporation

Piedmont	Piedmont Natural Gas Company, Inc.

Piedmont Term Loan	Term loan facility with commitments totaling $350M entered in June 2017

Pine Needle	Pine Needle LNG Company, LLC

Pioneer	Pioneer Transmission, LLC

PJM	PJM Interconnection, LLC

PMPA	Piedmont Municipal Power Agency

PPAs	Purchase Power Agreements

Progress Energy	Progress Energy, Inc.

PSCSC	Public Service Commission of South Carolina

PUCO	Public Utilities Commission of Ohio

REC	Renewable Energy Certificate

REC Solar	REC Solar Corp.

ROU assets	Right-of-use assets

RRBA	Roanoke River Basin Association

SELC	Southern Environmental Law Center

S&P	Standard & Poor's Rating Services

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

~~TDSIC~~	~~Transmission, Distribution and Storage System Improvement Charge~~

TPUC	Tennessee Public Utility Commission

U.S.	United States

VIE	Variable Interest Entity

WACC	Weighted Average Cost of Capital

WNA	Weather normalization adjustment

W.S. Lee CC	William States Lee Combined Cycle Facility



FINANCIAL STATEMENTS

ITEM 1. FINANCIAL STATEMENTS

DUKE ENERGY CORPORATION

Condensed Consolidated Statements of Operations

(Unaudited)


	Three Months Ended						Three Months Ended						Six Months Ended
	March 31,						June 30,						June 30,
(in millions, except per-share amounts)	2019			2018			2019			2018			2019			2018
Operating Revenues
Regulated electric	$	5,285		$	5,284		$	5,423		$	5,178		$	10,708		$	10,462
Regulated natural gas	728			700			280			291			1,008			991
Nonregulated electric and other	150			151			170			174			320			325
Total operating revenues	6,163			6,135			5,873			5,643			12,036			11,778
Operating Expenses
Fuel used in electric generation and purchased power	1,609			1,676			1,641			1,574			3,250			3,250
Cost of natural gas	327			313			76			89			403			402
Operation, maintenance and other	1,419			1,464			1,434			1,544			2,853			3,008
Depreciation and amortization	1,089			967			1,089			973			2,178			1,940
Property and other taxes	343			316			334			315			677			631
Impairment charges	—			43			4			172			4			215
Total operating expenses	4,787			4,779			4,578			4,667			9,365			9,446
Losses on Sales of Other Assets and Other, net	(3		)	(100		)
Gains (Losses) on Sales of Other Assets and Other, net							3			3			—			(97		)
Operating Income	1,373			1,256			1,298			979			2,671			2,235
Other Income and Expenses
Equity in earnings (losses) of unconsolidated affiliates	43			(24		)
Equity in earnings of unconsolidated affiliates							44			36			87			12
Other income and expenses, net	115			86			89			110			204			196
Total other income and expenses	158			62			133			146			291			208
Interest Expense	543			515			542			518			1,085			1,033
Income Before Income Taxes	988			803
Income Tax Expense	95			181
Income From Continuing Operations Before Income Taxes							889			607			1,877			1,410
Income Tax Expense From Continuing Operations							141			100			236			281
Income From Continuing Operations							748			507			1,641			1,129
Loss From Discontinued Operations, net of tax							—			(5		)	—			(5		)
Net Income	893			622			748			502			1,641			1,124
Less: Net (Loss) Income Attributable to Noncontrolling Interests	(7		)	2			(84		)	2			(91		)	4
Less: Preferred Dividends							12			—			12			—
Net Income Attributable to Duke Energy Corporation	$	900		$	620		$	820		$	500		$	1,720		$	1,120

Earnings Per Share – Basic and Diluted
Income from continuing operations attributable to Duke Energy Corporation common stockholders
Basic and Diluted							$	1.12		$	0.72		$	2.36		$	1.60
Loss from discontinued operations attributable to Duke Energy Corporation common stockholders
Basic and Diluted							$	—		$	(0.01	)	$	—		$	(0.01	)
Net income attributable to Duke Energy Corporation common stockholders
Basic and Diluted	$	1.24		$	0.88		$	1.12		$	0.71		$	2.36		$	1.59
Weighted average shares outstanding
Basic and Diluted	727			701
Basic							728			703			728			702
Diluted							728			704			728			702



FINANCIAL STATEMENTS	REGULATORY MATTERS

Duke Energy Carolinas also requested approval of its proposed Grid Improvement Plan (GIP), adjustments to its Prepaid Advantage Program and a variety of accounting orders related to ongoing costs for environmental compliance, including recovery over a five-year period of $242 million of deferred coal ash related compliance costs, grid investments between rate changes, incremental depreciation expense, a result of new depreciation rates from the depreciation study approved in the 2017 North Carolina Rate Case above, and the balance of development costs associated with the cancellation of the Lee Nuclear Project. Finally, Duke Energy Carolinas sought approval to establish a reserve and accrual for end-of-life nuclear costs for nuclear fuel and materials and supplies. On March 8, 2019, the ORS moved to establish a new and separate hearing docket to review and consider the GIP proposed by Duke Energy Carolinas. Subsequently, on March 12, 2019, the ORS and Duke Energy Carolinas executed a Stipulation resolving the ORS’s motion. The Stipulation provides that costs incurred after January 1, 2019, for the GIP will be deferred with a return, subject to evaluation in a future rate proceeding, and that Duke Energy Carolinas will refile for consideration of the GIP in a new docket for resolution by January 1, 2020. The Stipulation was approved by the ~~PSCSC’s hearing officer~~PSCSC on ~~March 13, 2019. An evidentiary hearing began on March 21, 2019, and concluded March 27,~~June 19, 2019.

~~On May 1,~~After hearings in March 2019, the PSCSC issued ~~a Commission Directive~~an order on ~~Duke Energy Carolinas’ application for a retail rate increase. The Directive granted, among other things: a retail rate increase of $107 million, excluding the EDIT Rider;~~May 21, 2019, which included a return on equity of 9.5 ~~percent;~~percent and a capital structure of 53 percent equity and 47 percent debt. The ~~Directive denied~~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 ~~approximately~~recovery of $115 ~~million.~~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 percent;

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 percent to be returned over a five-year period.

As a result of the May 21, 2019 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 commission 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, return on equity and the recovery of a return on deferred operation and maintenance expenses. Duke Energy Carolinas awaits the order on reconsideration detailing the commission's decision. Based upon legal analysis and Duke Energy Carolinas' intention to file a ~~Petition for Rehearing~~notice of appeal with the ~~PSCSC,~~South Carolina Supreme Court within 30 days of receipt of the order, Duke Energy Carolinas has not recorded an adjustment for its deferred coal ash costs. The Directive also denied recovery of a return on pre-construction costs associated with the canceled Lee Nuclear Project. Duke Energy Carolinas is evaluating the financial statement impacts of this Directive and will record associated one-time costs when the final order is issued. Except for the coal ash matter, the financial statement impacts of this Directive are not material. An order and revised customer rates are expected by mid-2019. Duke Energy Carolinas cannot predict the outcome of this matter.

FERC Formula Rate Matter

On July 31, 2017, PMPA filed a complaint with FERC alleging that Duke Energy Carolinas misapplied the formula rate under the PPA between the parties by including in its rates amortization expense associated with regulatory assets and recorded in a certain account without FERC approval. On February 15, 2018, FERC issued an order ruling in favor of PMPA and ordered Duke Energy Carolinas to refund to PMPA all amounts improperly collected under the PPA. Duke Energy Carolinas has issued to PMPA and similarly situated wholesale customers refunds of approximately $25 million. FERC also set the matter for settlement and hearing. PMPA and other customers filed a protest to Duke Energy Carolinas' refund report claiming that the refunds are inadequate in that (1) Duke Energy Carolinas invoked the limitations periods in the contracts to limit the time period for which the refunds were paid and the customers disagree that this limitation applies, and (2) Duke Energy Carolinas refunded only amounts recovered through a certain account and the customers have asserted that the order applies to all regulatory assets. On July 3, 2018, FERC issued an order accepting Duke Energy Carolinas' refund report and ruling that these two claims are outside the scope of FERC's February order. The settlement agreements and revised formula rates for all parties to the proceeding were filed on December 28, 2018. On April 2, 2019, FERC issued an order approving the settlement agreement as filed. Since then, Duke Energy Carolinas ~~is working~~has implemented the terms of the settlement in rates with all wholesale customers, ~~that did not intervene~~including non-intervening customers. On July 25, 2019, Duke Energy Carolinas received FERC approval for the accounting treatment requested for certain assets included in the settlement agreements. This is the final approval needed from FERC and concludes this ~~case to implement the same settlement terms.~~proceeding.

Sale of Hydroelectric (Hydro) Plants

In May 2018, Duke Energy Carolinas entered an agreement for the sale of five hydro plants with a combined 18.7-MW generation capacity in the Western Carolinas region to Northbrook Energy. The completion of the transaction is subject to approval from FERC for the four FERC-licensed plants, as well as other state regulatory agencies and is contingent upon regulatory approval from the NCUC and PSCSC to defer the total estimated loss on the sale of approximately $40 million. On July 5, 2018, Duke Energy Carolinas filed with NCUC for approval of the sale of the five hydro plants to Northbrook, to transfer the CPCNs for the four North Carolina hydro plants and to establish a regulatory asset for the North Carolina retail portion of the difference between sales proceeds and net book value. On ~~September 4, 2018,~~June 5, 2019, the ~~Public Staff filed comments supporting~~NCUC issued an order approving the ~~CPCN~~ transfer ~~with conditions. On September 18, 2018,~~of the hydro plants from Duke Energy Carolinas ~~filed reply comments opposing~~to Northbrook, granting deferral accounting and denying the Public Staff’s proposed conditions. On November 29, 2018, the NCUC issued a procedural order and held an evidentiary hearing on this matter on February 5, 2019. On March 27, 2019, Duke Energy Carolinas and the Public Staff filed proposed orders with the NCUC. Staff's motion for reconsideration.



FINANCIAL STATEMENTS	REGULATORY MATTERS

On August 28, 2018, Duke Energy Carolinas filed with PSCSC ~~its~~an Application for Approval of Transfer and Sale of Hydroelectric Generation Facilities, Acceptance for Filing of a Power Purchase Agreement and an Accounting Order to Establish a Regulatory Asset. On September 10, 2018, the ORS provided a letter to the commission stating its position on the application and on September 18, 2018, Duke Energy Carolinas requested this matter be carried over to allow Duke Energy Carolinas time to discuss certain accounting issues with the ORS. At their June 26, 2019, agenda meeting, the PSCSC voted to approve the transfer and sale subject to the recommendation of the ORS that the issuance of an Accounting Order will not preclude the ORS, the commission or any other party from addressing the reasonableness of these costs, any return sought and including any carrying costs in the next rate case.

On August 9, 2018, Duke Energy Carolinas and Northbrook filed a joint Application for Transfer of Licenses with the FERC. On December 27, 2018, the FERC issued its Order Approving Transfer of Licenses (“Order”) for the four FERC-licensed hydro plants. On January 18, 2019, Duke Energy Carolinas and Northbrook Carolina Hydro II, LLC requested a six-month extension of time to comply with the requirement of the Order that Northbrook submit to FERC certified copies of all instruments of conveyance and signed acceptance sheets within 60 days of the date of the Order, given that compliance by the deadline set in the Order was not possible because the conveyance of the projects is contingent on the receipt of state regulatory approvals, which were not anticipated to be issued by February 25, 2019.Order. On February 14, 2019, FERC issued an ~~Order Granting Extensions of Time~~order granting extensions until August 26, 2019, to comply with the requirements of the December 27, 2018 Order.

~~If commission approvals are not received, Duke Energy Carolinas can cancel the sales agreement and retain the hydro facilities. If commission approvals are received, the~~The closing is expected to occur in 2019. After closing, Duke Energy Carolinas will purchase all the capacity and energy generated by these facilities at the avoided cost for five years through power purchase agreements. Duke Energy Carolinas cannot predict the outcome of this matter.



~~FINANCIAL STATEMENTS~~	~~REGULATORY MATTERS~~

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 represented an approximate 14.9 percent increase in annual base revenues. Subsequent to the filing, Duke Energy Progress adjusted the requested amount to $420 million, representing an approximate 13 percent increase. The rate increase was driven by capital investments subsequent to the previous base rate case, costs of complying with CCR regulations and the Coal Ash Act, costs relating to storm recovery, investments in customer service technologies and recovery of costs associated with renewable purchased power.

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 a return on equity of 9.9 percent and a capital structure of 52 percent equity and 48 percent debt. On February 23, 2018, the NCUC issued an order approving the stipulation.

The order also impacted certain amounts that were similarly recorded on Duke Energy Carolinas' Condensed Consolidated Balance Sheets. As a result of the order, Duke Energy Progress and Duke Energy Carolinas recorded pretax charges of $68 million and $14 million, respectively, in the first quarter of 2018 to Impairment charges, Operation, maintenance and other and Interest Expense on the Condensed Consolidated Statements of Operations. Revised customer rates became effective on March 16, 2018.

On May 15, 2018, the Public Staff filed a Notice of Cross Appeal to the North Carolina Supreme Court from the NCUC's February 23, 2018, ~~Order Accepting Stipulation, Deciding Contested Issues and Granting Partial Rate Increase issued by the NCUC.~~Order. The Public Staff ~~contend~~contends the ~~commission’s~~NCUC’s order should be reversed and remanded, as it is affected by errors of law, and is unsupported by competent, material and substantial evidence in view of the entire record as submitted. The North Carolina Attorney General and Sierra Club also filed Notices of Appeal to the North Carolina Supreme Court from the February 23, 2018, ~~Order Accepting Stipulation, Deciding Contested Issues and Granting Partial Rate Increase.~~Order. On November 29, 2018, the North Carolina Attorney General's Office filed a motion with the North Carolina Supreme Court requesting the court consolidate the Duke Energy Progress and Duke Energy Carolinas appeals and enter an order adopting the parties’ proposed briefing schedule as set out in the filing. On November 29, 2018, the North Carolina Supreme Court adopted a schedule for briefing set forth in the motion to consolidate the Duke Energy Progress and Duke Energy Carolinas appeals. On March 14, 2019, the North Carolina Attorney General’s Office filed a motion for extension of time to file its brief. On March 18, 2019, the North Carolina Supreme Court granted the North Carolina Attorney General’s motion, and the Appellant’s brief was filed on April 26, 2019. The Appellee response briefs are due on ~~August 24,~~September 25, 2019. Duke Energy Progress cannot predict the outcome of this matter.

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, which represents an approximate 10.3 percent increase in annual base revenues. The rate increase is driven by capital investments and environmental compliance progress made by Duke Energy Progress since its previous rate case, including the further implementation of Duke Energy Progress’ generation modernization program, which consists of retiring, replacing and upgrading generation plants, investments in customer service technologies and continued investments in base work to maintain its transmission and distribution systems. The request included a decrease resulting from the Tax Act of $17 million to reflect the change in ongoing tax expense, primarily the reduction in the federal income tax rate from 35 to 21 percent. The request also included $10 million to return EDIT resulting from the federal tax rate change and deferred revenues since January 2018 related to the change (EDIT Rider) and a $12 million increase due to the expiration of EDITs related to reductions in North Carolina state income taxes allocable to South Carolina.

Duke Energy Progress also requested approval of its proposed GIP, approval of a Prepaid Advantage Program and a variety of accounting orders related to ongoing costs for environmental compliance, including recovery over a five-year period of $51 million of deferred coal ash related compliance costs, AMI deployment, grid investments between rate changes and regulatory asset treatment related to the retirement of a generating plant located in Asheville, North Carolina. Finally, Duke Energy Progress sought approval to establish a reserve and accrual for end-of-life nuclear costs for materials and supplies and nuclear fuel. On March 8, 2019, the ORS moved to establish a new and separate hearing docket to review and consider the GIP proposed by Duke Energy Progress. Subsequently, on March 12, 2019, the ORS and Duke Energy Carolinas executed a Stipulation resolving the ORS’s motion, and Duke Energy Progress agreed to the Stipulation, as did other parties in the rate case. The Stipulation provides that costs incurred after January 1, 2019, for the GIP will be deferred with a return, with all costs subject to evaluation in a future rate proceeding, and that Duke Energy Progress will refile for consideration of the GIP in a new docket for resolution by January 1, 2020. The Stipulation was approved by the ~~PSCSC’s hearing officer~~PSCSC on ~~March 13, 2019. An evidentiary hearing began on April 11, 2019, and concluded on April 17,~~June 19, 2019.

~~On May 8,~~



FINANCIAL STATEMENTS	REGULATORY MATTERS

After hearings in April 2019, the PSCSC issued ~~a Commission Directive~~an order on ~~Duke Energy Progress’ application for a retail rate increase. The Directive granted, among other things: a retail rate increase of $41 million, excluding the EDIT Rider;~~May 21, 2019, which included a return on equity of 9.5 percent and a capital structure of 53 percent equity and 47 percent debt. The ~~Directive denied~~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 ~~approximately~~recovery of $65 ~~million.~~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 percent;

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 percent.

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 commission 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, return on equity 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. Duke Energy Progress awaits the order on reconsideration detailing the commission's decision. Based upon legal analysis and Duke Energy Progress' intention to file a ~~Petition for Rehearing~~notice of appeal with the ~~PSCSC,~~South Carolina Supreme Court within 30 days of receipt of the order, Duke Energy Progress has not recorded an adjustment for its deferred coal ash costs. Duke Energy Progress is evaluating the financial statement impacts of this Directive and will record associated one-time costs when the final order is issued. Except for the coal ash matter, the financial statement impacts of this Directive are not material. An order and revised customer rates are expected by mid-2019. Duke Energy Progress cannot predict the outcome of this matter.



~~FINANCIAL STATEMENTS~~	~~REGULATORY MATTERS~~

Western Carolinas Modernization Plan

On November 4, 2015, Duke Energy Progress announced a Western Carolinas Modernization Plan, which included retirement of the existing Asheville coal-fired plant, the construction of two 280‑MW combined-cycle natural gas plants having dual-fuel capability, with the option to build a third natural gas simple cycle unit in 2023 based upon the outcome of initiatives to reduce the region's power demand. The plan also included upgrades to existing transmission lines and substations, installation of solar generation and a pilot battery storage project. These investments will be made within the next seven years. Duke Energy Progress worked with the local natural gas distribution company to upgrade an existing natural gas pipeline to serve the natural gas plant. The lease became effective on March 2, 2019.

On March 28, 2016, the NCUC issued an order approving a CPCN for the new combined-cycle natural gas plants, but denying the CPCN for the contingent simple cycle unit without prejudice to Duke Energy Progress to refile for approval in the future. On March 28, ~~2018,~~2019, Duke Energy Progress filed an annual progress report for the construction of the combined-cycle plants with the NCUC, with an estimated cost of $893 million. Site preparation activities for the combined-cycle plants are complete and construction of these plants began in 2017, with an expected in-service date in late 2019.

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. ~~On November 30, 2018, the NCUC issued an order scheduling hearings, requiring filing of testimony, establishing discovery guidelines and requiring public notice.~~ On February 7, 2019, Duke Energy Progress made a joint filing with the Public Staff, which accepted the Public Staff’s proposed conditions and requested that the NCUC cancel the evidentiary hearing. On February 19, 2019, the NCUC granted the request to cancel the hearing. On March 22, 2019, Duke Energy Progress and the Public Staff filed a Joint Proposed Order. On May 10, 2019, the NCUC issued an Order ~~now pending before the NCUC.~~ ~~Duke Energy Progress cannot predict the outcome~~Granting Certificate of ~~this matter.~~Public Convenience and Necessity with Conditions.

The carrying value of the 376-MW Asheville coal-fired plant, including associated ash basin closure costs, of ~~$302~~$284 million and $327 million is included in Generation facilities to be retired, net on Duke Energy Progress' Condensed Consolidated Balance Sheets as of ~~March 31,~~June 30, 2019, and December 31, 2018, respectively. Duke Energy Progress' request for a regulatory asset at the time of retirement with amortization over a 10-year period was approved by the NCUC on February 23, 2018.



FINANCIAL STATEMENTS	REGULATORY MATTERS

Duke Energy Florida

Storm Restoration Cost Recovery

In September 2017, Duke Energy Florida’s service territory suffered significant damage from Hurricane Irma, resulting in approximately 1 million customers experiencing outages. In the fourth quarter of 2017, Duke Energy Florida also incurred preparation costs related to Hurricane Nate. On December 28, 2017, Duke Energy Florida filed a petition with the FPSC to recover incremental storm restoration costs for Hurricane Irma and Hurricane Nate and to replenish the storm reserve. On February 6, 2018, the FPSC approved a stipulation that would apply tax savings resulting from the Tax Act toward storm costs effective January 2018 in lieu of implementing a storm surcharge. ~~Storm costs are currently expected to be fully recovered by approximately mid-2021.~~ On May 31, 2018, Duke Energy Florida filed a petition for approval of actual storm restoration costs and associated recovery process related to Hurricane Irma and Hurricane Nate. The petition sought the approval for the recovery in the amount of $510 million in actual recoverable storm restoration costs, including the replenishment of Duke Energy Florida’s storm reserve of $132 million, and the process for recovering these recoverable storm costs. On August 20, 2018, the FPSC approved Duke Energy Florida's unopposed Motion for Continuance filed August 17, 2018, to allow for an evidentiary hearing in this matter. On January 28, 2019, Duke Energy Florida made a supplemental filing to reduce the total storm cost recovery from $510 million to $508 million. On April 3, 2019, the FPSC issued an Order abating all remaining filing dates. On April 9, 2019, Duke Energy Florida filed an unopposed motion to approve a settlement agreement resolving all outstanding issues in this docket. ~~The~~On June 13, 2019, the FPSC ~~has scheduled~~issued its order approving the ~~hearing to begin on May 21, 2019, to consider the~~settlement agreement. The Storm Cost Settlement Agreement ~~filed with the FPSC. If approved, the Storm Cost Settlement Agreement would obligate~~obligates Duke Energy Florida to capitalize $18 million of storm costs and remove $6 million of operating and maintenance expense, thereby reducing the requested storm cost recovery amount by $24 million. Duke Energy Florida will also implement process changes with respect to storm cost restoration. At ~~March 31,~~June 30, 2019, and December 31, 2018, Duke Energy Florida's Condensed Consolidated Balance Sheets included approximately ~~$157~~$118 million and $217 million, respectively, of recoverable costs under the FPSC's storm rule in Regulatory assets within Current Assets and Other Noncurrent Assets related to storm recovery for Hurricane Irma and Hurricane Nate. ~~Duke Energy Florida cannot predict the outcome of this matter.~~

In October 2018, Duke Energy Florida’s service territory suffered damage when Hurricane Michael made landfall as a ~~strong~~ Category 5 hurricane with maximum sustained winds of 160 mph. The storm caused catastrophic damage from wind and storm surge, particularly from Panama City Beach to Mexico Beach, resulting in widespread outages and significant damage to transmission and distribution facilities across the central Florida Panhandle. In response to Hurricane Michael, Duke Energy Florida restored service to approximately 72,000 customers. Total current estimated incremental operation and maintenance and capital costs are $360 million. Approximately ~~$70~~$82 million and $35 million of the costs are included in Net property, plant and equipment on the Condensed Consolidated Balance Sheets as of ~~March 31,~~June 30, 2019, and December 31, 2018, respectively. Approximately ~~$213~~$225 million and $165 million of costs ~~represent recoverable costs under the FPSC’s storm rule and Duke Energy Florida's Open Access Transmission Tariff formula rates and~~ are included in Regulatory assets within Other Noncurrent Assets on the Condensed Consolidated Balance Sheets as of ~~March 31,~~June 30, 2019, and December 31, 2018, ~~respectively.~~respectively, representing recoverable costs under the FPSC’s storm rule and Duke Energy Florida's OATT formula rates. Additional costs could be incurred in 2019 related to this fourth quarter 2018 storm.

Duke Energy Florida filed a petition with the FPSC on April 30, 2019, to recover the retail portion of incremental storm restoration costs for Hurricane Michael. The estimated recovery amount is approximately $221 ~~million~~million. On June 11, 2019, the FPSC approved the petition for recovery of incremental storm restoration costs related to ~~be recovered over a 12-month period beginning in July 2019, subject to true up through~~Hurricane Michael. The FPSC also approved the ~~Storm Surcharge consistent with the provisions of the 2017 Settlement. Concurrently,~~stipulation Duke Energy Florida filed, ~~for approval a stipulation that would apply~~which will allow Duke Energy Florida to use the tax savings resulting from the Tax Act ~~toward~~to recover these storm costs in lieu of implementing a storm surcharge. ~~Storm~~Approved storm costs are currently expected to be fully recovered by approximately year-end 2021. Duke Energy Florida expects to file actual costs for approval with the FPSC in 2019. Duke Energy Florida cannot predict the outcome of this matter.



~~FINANCIAL STATEMENTS~~	~~REGULATORY MATTERS~~

Tax Act

Pursuant to Duke Energy Florida's 2017 Settlement, on May 31, 2018, Duke Energy Florida filed a petition related to the Tax Act, which included revenue requirement impacts of annual tax savings of $134 million and estimated annual amortization of EDIT of $67 million for a total of $201 million. Of this amount, $50 million would be offset by accelerated depreciation of Crystal River 4 and 5 coal units and an estimated $151 million would be offset by Hurricane Irma storm cost recovery as explained in the Storm Restoration Cost Recovery section above. On December 27, 2018, Duke Energy Florida filed actual EDIT balances and amortization based on its 2017 filed tax return. This increased the revenue requirement impact of the amortization of EDIT by $4 million, from $67 million to $71 million, which increased the total storm amortization from $151 million to $155 million. On January 8, 2019, the FPSC approved a joint motion by Duke Energy Florida and the Office of Public Counsel resolving all stipulated positions. As part of that stipulation, Duke Energy Florida agreed to seek a Private Letter Ruling (PLR) from the IRS on its treatment of cost of removal (COR) as mostly protected by tax normalization rules. If the IRS rules that COR is not protected by tax normalization rules, then Duke Energy Florida will make a final adjustment to the amortization of EDIT and an adjustment to the storm recovery amount retroactive to January 2018. The IRS has communicated that it will not issue individual PLRs on the treatment of COR. Rather, the IRS is drafting a notice that will request comments on a number of issues, including COR, and the IRS plans to issue industrywide guidance on those issues. Duke Energy Florida cannot predict the outcome of this matter.

Solar Base Rate Adjustment

On July 31, 2018, Duke Energy Florida petitioned the FPSC to include in base rates the revenue requirements for its first two solar generation projects, the Hamilton Project and the Columbia Project, as authorized by the 2017 Settlement. The Hamilton Project, which was placed into service on December 22, 2018, has an annual retail revenue requirement of $15 ~~million~~million. At its October 30, 2018, Agenda Conference, the FPSC approved the rate increase related to the Hamilton Project to go into effect beginning with the first billing cycle in January 2019 under its file and ~~the increase was~~suspend authority, and revised customer rates became effective in January 2019. The Columbia Project has a projected annual revenue requirement of $14 million and a projected in-service date in early 2020; the associated rate increase would take place with the first month’s billing cycle after the Columbia Project goes into service. At its October 30, 2018, Agenda Conference, the FPSC approved the rate increase related to the Hamilton Project to go into effect beginning with the first billing cycle in January 2019 under its file and suspend authority. On April 2, 2019, the commission approved both solar projects as filed.



FINANCIAL STATEMENTS	REGULATORY MATTERS

On March 25, 2019, Duke Energy Florida petitioned the FPSC to include in base rates the revenue requirements for its next wave of solar generation projects, the Trenton, Lake Placid and DeBary Solar Projects, as authorized by the 2017 Settlement. The annual retail revenue requirement for the Trenton and Lake Placid Projects is $13 million and $8 million, respectively, with projected in-service dates in the fourth quarter of 2019. The DeBary Project has a projected annual revenue requirement of $11 million and a projected in-service date in the first quarter of 2020. The associated rate increase would take place with the first month’s billing cycle after each solar generation project goes into service. On July 22, 2019, the FPSC issued an order approving Duke Energy Florida's request.

Crystal River Unit 3 Accelerated Decommissioning Filing

On May 29, 2019, Duke Energy Florida entered into a Decommissioning Services Agreement for the accelerated decommissioning of the Crystal River Unit 3 nuclear power station located in Citrus County, Florida, with ADP CR3, LLC and ADP SF1, LLC, each of which is a wholly owned subsidiary of Accelerated Decommissioning Partners, LLC, a joint venture between NorthStar Group Services, Inc. and Orano USA LLC. Closing of this Agreement is contingent upon the approval of the NRC and FPSC. If approved, the decommissioning will be accelerated starting in 2020 and continuing through 2027, rather than the expected time frame under SAFSTOR of starting in 2067 and ending in 2074. Duke Energy Florida expects that the assets of the Nuclear Decommissioning Trust Fund will be sufficient to cover the contract price. On July 10, 2019, Duke Energy Florida petitioned the FPSC for approval of the Agreement. Duke Energy Florida cannot predict the outcome of this matter.

Duke Energy Ohio

2017 Electric Security Plan

On June 1, 2017, Duke Energy Ohio filed with the PUCO a request for a standard service offer in the form of an ESP. On February 15, 2018, the procedural schedule was suspended to facilitate ongoing settlement discussions. On April 13, 2018, Duke Energy Ohio filed a Motion to consolidate this proceeding with several other cases pending before the PUCO, including, but not limited to, its Electric Base Rate Case. Additionally, on April 13, 2018, Duke Energy Ohio, along with certain intervenors, filed a Stipulation and Recommendation (Stipulation) with the PUCO resolving certain issues in this proceeding. The term of the ESP would be from June 1, 2018, to May 31, 2025, and included continuation of market-based customer rates through competitive procurement processes for generation, continuation and expansion of existing rider mechanisms and proposed new rider mechanisms relating to regulatory mandates, costs incurred to enhance the customer experience and transform the grid and a service reliability rider for vegetation management. The Stipulation established a regulatory model for the next seven years via the approval of the ESP and continued the current model for procuring supply for non-shopping customers, including recovery mechanisms. On December 19, 2018, the PUCO approved the Stipulation without material modification. Several parties filed applications for rehearing. On February 6, 2019, the PUCO granted the parties rehearing. The PUCO issued its Second Entry on Rehearing on July 17, 2019, upholding its December 19, 2018 order and denying all assignments of error raised by the non-stipulating parties. The parties have the ability to appeal to the Ohio Supreme Court within 60 days of the July entry. Duke Energy Ohio cannot predict the outcome of this matter.

Electric Base Rate Case

Duke Energy Ohio filed with the PUCO an electric distribution base rate case application and supporting testimony in March 2017. Duke Energy Ohio requested an estimated annual increase of approximately $15 million and a return on equity of 10.4 percent. The application also included requests to continue certain current riders and establish new riders. On September 26, 2017, the PUCO staff filed a report recommending a revenue decrease between approximately $18 million and $29 million and a return on equity between 9.22 percent and 10.24 percent. On April 13, 2018, Duke Energy Ohio filed a Motion to consolidate this proceeding with several other cases pending before the PUCO. On April 13, 2018, Duke Energy Ohio, along with certain intervenors, filed the Stipulation with the PUCO resolving numerous issues including those in this base rate proceeding. Major components of the Stipulation related to the base distribution rate case included a $19 million decrease in annual base distribution revenue with a return on equity unchanged from the current rate of 9.84 percent based upon a capital structure of 50.75 percent equity and 49.25 percent debt. Upon approval of new rates, Duke Energy Ohio's rider for recovering its initial SmartGrid implementation ended as these costs would be recovered through base rates. The Stipulation also renewed 14 existing riders, some of which were included in the company's ESP, and added two new riders including the Enhanced Service Reliability Rider to recover vegetation management costs not included in base rates, up to $10 million per year (operation and maintenance only) and the PowerForward Rider to recover costs incurred to enhance the customer experience and further transform the grid (operation and maintenance and capital). In addition to the changes in revenue attributable to the Stipulation, Duke Energy Ohio’s capital-related riders, including the Distribution Capital Investments Rider, began to reflect the lower federal income tax rate associated with the Tax Act with updates to customers’ bills beginning April 1, 2018. This change reduced electric revenue by approximately $20 million on an annualized basis. On December 19, 2018, the PUCO approved the Stipulation without material modification. New base rates were implemented effective January 2, 2019. Several parties filed applications for rehearing. On February 6, 2019, the PUCO granted the parties rehearing. The PUCO issued its Second Entry on Rehearing on July 17, 2019, upholding its December 19, 2018 order and denying all assignments of error raised by the non-stipulating parties. The parties have the ability to appeal to the Ohio Supreme Court within 60 days of the July entry. Duke Energy Ohio cannot predict the outcome of this matter.

Ohio Valley Electric Corporation

On March 31, 2017, Duke Energy Ohio filed for approval to adjust its existing price stabilization rider (Rider PSR) to pass through net costs related to its contractual entitlement to capacity and energy from the generating assets owned by OVEC. Duke Energy Ohio sought deferral authority for net costs incurred from April 1, 2017, until the new rates under Rider PSR were put into effect. On April 13, 2018, Duke Energy Ohio filed a Motion to consolidate this proceeding with several other cases currently pending before the PUCO. Also, on April 13, 2018, Duke Energy Ohio, along with certain intervenors, filed a Stipulation with the PUCO resolving numerous issues including those related to Rider PSR. The Stipulation activated Rider PSR for recovery of net costs incurred from January 1, 2018, through May 2025. On December 19, 2018, the PUCO approved the Stipulation without material modification. The PSR rider became effective April 1, 2019. Several parties filed applications for rehearing. On February 6, 2019, the PUCO granted the parties rehearing. The PUCO issued its Second Entry on Rehearing on July 17, 2019, upholding its December 19, 2018 order and denying all assignments of error raised by the non-stipulating parties. The parties have the ability to appeal to the Ohio Supreme Court within 60 days of the July entry. Duke Energy Ohio cannot predict the outcome of this matter.



FINANCIAL STATEMENTS	REGULATORY MATTERS

On July 23, 2019, an Ohio bill was signed into law that will be effective January 1, 2020. Among other things, the bill allows for recovery of prudently incurred costs, net of any revenues, for Ohio Investor-owned utilities that are participants under the OVEC power agreement. The recovery shall be through a non-bypassable rider that is to replace any existing recovery mechanism approved by the PUCO and will remain in place through 2030. The amounts recoverable from customers will be subject to an annual cap, with incremental costs that exceed such cap eligible for deferral and recovery subject to review. See Note 13 for additional discussion of Duke Energy Ohio's ownership interest in OVEC.

Tax Act – Ohio

On July 25, 2018, Duke Energy Ohio filed an application to establish a new rider to implement the benefits of the Tax Act for electric distribution customers. The new rider will flow through to customers the benefit of the lower statutory federal tax rate from 35 to 21 percent 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. Duke Energy Ohio's transmission rates reflect lower federal income tax but guidance from FERC on amortization of both protected and unprotected transmission-related EDITs is still pending. On October 24, 2018, the PUCO issued a Finding and Order that, among other things, directed all utilities over which the commission has rate-making authority to file an application to pass the benefits of the Tax Act to customers by January 1, 2019, unless otherwise exempted or directed by the PUCO. Duke Energy Ohio's July 25, 2018, filing for electric distribution operations is consistent with the commission's October 24, 2018, Finding and Order and no further action is needed. On February 20, 2019, the PUCO approved the application without material modification. Rates became effective March 1, 2019.

On December 21, 2018, Duke Energy Ohio filed an application to change its base rates 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 changes and rider effective April 1, 2019. The new rider will flow through to customers the benefit of the lower statutory federal tax rate from 35 to 21 percent 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 ~~has not yet ruled~~established a procedural schedule and testimony was filed on ~~the application for changes for natural gas customers.~~July 31, 2019. An evidentiary hearing will take place on August 7, 2019. Duke Energy Ohio cannot predict the outcome of this matter.

Energy Efficiency Cost Recovery

On March 28, 2014, Duke Energy Ohio filed an application for recovery of program costs, lost distribution revenue and performance incentives related to its energy efficiency and peak demand reduction programs. These programs are undertaken to comply with environmental mandates set forth in Ohio law. The PUCO approved Duke Energy Ohio’s application but found that Duke Energy Ohio was not permitted to use banked energy savings from previous years in order to calculate the amount of allowed incentive. This conclusion represented a change to the cost recovery mechanism that had been agreed upon by intervenors and approved by the PUCO in previous cases. The PUCO granted the applications for rehearing filed by Duke Energy Ohio and an intervenor. On January 6, 2016, Duke Energy Ohio and the PUCO Staff entered into a stipulation, pending the PUCO's approval, to resolve issues related to performance incentives and the PUCO Staff audit of 2013 costs, among other issues. In December 2015, based upon the stipulation, Duke Energy Ohio re-established approximately $20 million of the revenues that had been previously reversed. On October 26, 2016, the PUCO issued an order approving the stipulation without modification. In December 2016, the PUCO granted the intervenors request for rehearing for the purpose of further review. On April 10, 2019, the PUCO issued an Entry on Rehearing denying the rehearing applications.



~~FINANCIAL STATEMENTS~~	~~REGULATORY MATTERS~~

On June 15, 2016, Duke Energy Ohio filed an application for approval of a three-year energy efficiency and peak demand reduction portfolio of programs. A stipulation and modified stipulation were filed on December 22, 2016, and January 27, 2017, respectively. Under the terms of the stipulations, which included support for deferral authority of all costs and a cap on shared savings incentives, Duke Energy Ohio has offered its energy efficiency and peak demand reduction programs throughout 2017. On February 3, 2017, Duke Energy Ohio filed for deferral authority of its costs incurred in 2017 in respect of its proposed energy efficiency and peak demand reduction portfolio. On September 27, 2017, the PUCO issued an order approving a modified stipulation. The modifications impose an annual cap of approximately $38 million on program costs and shared savings incentives combined, but allowed for Duke Energy Ohio to file for a waiver of costs in excess of the cap in 2017. The PUCO approved the waiver request for 2017 up to a total cost of $56 million. On November 21, 2017, the PUCO granted Duke Energy Ohio's and intervenor's applications for rehearing of the September 27, 2017, order. On January 10, 2018, the PUCO denied the Ohio Consumers' Counsel’s application for rehearing of the PUCO order granting Duke Energy Ohio's waiver request; however, a decision on Duke Energy Ohio's application for rehearing remains pending. Duke Energy Ohio cannot predict the outcome of this matter.

2014 Electric Security Plan

In April 2015, the PUCO modified and approved Duke Energy Ohio's proposed ESP, with a three-year term and an effective date of June 1, 2015. The PUCO approved a competitive procurement process for SSO load, a distribution capital investment rider (Rider DCI) and a tracking mechanism for incremental distribution expenses caused by major storms. The PUCO also approved a placeholder tariff for a price stabilization rider, but denied Duke Energy Ohio's specific request to include Duke Energy Ohio's entitlement to generation from OVEC in the rider at this time; however, the order allows Duke Energy Ohio to submit additional information to request recovery in the future. On May 4, 2015, Duke Energy Ohio filed an application for rehearing requesting the PUCO to modify or amend certain aspects of the order. On May 28, 2015, the PUCO granted all applications for rehearing filed in the case for future consideration. On March 21,30, 2018, the PUCO ~~issued~~approved an ~~order denying~~extension of Duke Energy Ohio's issues on rehearing. On April 20, 2018, Duke Energy Ohio filed a second application for rehearing based upon the commission’s March 21, 2018, Order. On May 16, 2018, the commission issued its third Entry on Rehearing granting in part, and denying in part, Duke Energy Ohio’s ~~rehearing request.~~

~~On March 9, 2018, Duke Energy Ohio filed a motion to extend its~~ then-current ESP, including all terms and conditions thereof, ~~pending approval~~excluding an extension of ~~a new ESP. On May 30, 2018, the PUCO granted the request, with modification. Specifically, the PUCO did not extend the cap applicable to Rider DCI beyond July 31, 2018.~~ Duke Energy ~~Ohio sought~~Ohio’s Rider DCI. Following rehearing, ~~of this finding. On~~on July 25, 2018, the PUCO granted the request and allowed a continuing cap on recovery under Rider DCI. On August 24, 2018, the Ohio Manufacturers' Association (OMA) and the Office of the Ohio Consumers' Counsel (OCC) filed an Application for Rehearing of the commission's decision. Duke Energy Ohio filed a Memorandum Contra OCC's request forThe orders were upheld on rehearing of the commission's continuation of Rider DCI on September 4, 2018. On September 19, 2018, the PUCO issued an Order granting rehearing on the matter for further consideration. On April 3, 2019, the PUCO issued its Fourth Entry on Rehearing denying the rehearing of OCC andrequested by OMA and ~~upholding its decision~~OCC. The time period for parties to ~~continue Rider DCI. Further applications~~file for rehearing or ~~notices of~~ appeal ~~are due in 60 days. Duke Energy Ohio cannot predict the outcome of this matter.~~has expired.

~~On May 21,~~In 2018, the OMA and OCC filed ~~a notice of appeal~~separate appeals of PUCO's approval of Duke Energy Ohio’s ESP with the Ohio Supreme Court, challenging PUCO's approval of Duke Energy Ohio’s Price Stability Rider as a placeholder and its Rider DCI to recover incremental revenue requirement for distribution capital since Duke Energy Ohio’s last base rate case. On July 16, 2018, the OCC filed its own appeal of Duke Energy Ohio’s ESP with the Ohio Supreme Court raising similar issues to that of the OMA. Duke Energy Ohio filed a Motion to Intervene in the two Ohio Supreme Court appeals. OMA's Supreme Court brief was filed on August 20, 2018. PUCO submitted its brief on October 26, 2018, and Duke Energy Ohio filed its brief on October 29, 2018. The OCC’s Supreme Court brief was filed on October 15, 2018. Duke Energy Ohio filed its brief on December 20, 2018. The PUCO submitted its brief on December 21, 2018. The Ohio Supreme Court issued an order on March 13, 2019, for the appellants to show cause why the appeals should not be dismissed as moot in light of the commission’s approval of Duke Energy Ohio’s current ESP. The OCC and OMA made the requested filings on March 20, 2019, and Duke Energy Ohio filed its response on March 27, 2019. ~~On May 8, 2019,~~Subsequent to OCC and OMA making the requested filings, the Ohio Supreme Court dismissed the appeals as ~~moot.~~moot on May 8, 2019.



FINANCIAL STATEMENTS	REGULATORY MATTERS

Natural Gas Pipeline Extension

Duke Energy Ohio is proposing to install 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 $163 million to $245 million in direct costs (excluding overheads and AFUDC). On January 20, 2017, Duke Energy Ohio filed an amended application with the Ohio Power Siting Board (OPSB) for approval of one of two proposed routes. A public hearing was held on June 15, 2017. In April 2018, Duke Energy Ohio filed a motion with OPSB to establish a procedural schedule and filed supplemental information supporting its application. On December 18, 2018, the OPSB established a procedural schedule that included a local public hearing on March 21, 2019. An evidentiary hearing began on April 9, 2019, and concluded on April 11, 2019. Briefs ~~are due~~were filed on May 13, 2019, ~~with~~and reply briefs ~~due~~were filed on June 10, 2019. If approved, construction of the pipeline extension is expected to be completed before the 2021/2022 winter season. Duke Energy Ohio expects a decision by the end of 2019. Duke Energy Ohio cannot predict the outcome of this matter.



~~FINANCIAL STATEMENTS~~	~~REGULATORY MATTERS~~

2012 Natural Gas Rate Case/MGP Cost Recovery

As part of its 2012 natural gas base rate case, Duke Energy Ohio has approval to defer and recover costs related to environmental remediation at two sites (East End and West End) that housed former MGP operations. Duke Energy Ohio has made annual applications for recovery of these deferred costs. Duke Energy Ohio is currently recovering approximately $55 million in environmental remediation costs between 2009 through 2012 through a separate rider, Rider MGP. 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 rate case. To date, the PUCO has not ruled on Duke Energy Ohio’s annual applications for the calendar years 2013 through 2017. On September 28, 2018, the staff of the PUCO 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 2012 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. To date, the PUCO has not issued a procedural schedule and has not ruled on Duke Energy Ohio’s applications. On March 29, 2019, Duke Energy Ohio filed its annual application to recover incremental remediation expense for the calendar year ~~2018.~~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 staff believes occurred in areas not authorized for recovery. Duke Energy Ohio cannot predict the outcome of this matter.

The 2012 PUCO order also contained conditional deadlines for completing the MGP environmental investigation and remediation costs at the MGP sites. 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 and investigation that must occur after December 31, 2019. Duke Energy Ohio cannot predict the outcome of this matter.

Duke Energy Kentucky Natural Gas Base Rate Case

On August 31, 2018, Duke Energy Kentucky filed an application with the KPSC requesting an increase in natural gas base rates of approximately $11 million, an approximate 11.1 percent average increase across all customer classes. The increase was net of approximately $5 million in annual savings as a result of the Tax Act. The drivers for this case are capital invested since Duke Energy Kentucky’s last rate case in 2009. Duke Energy Kentucky also sought implementation of a Weather Normalization Adjustment Mechanism, amortization of regulatory assets and to implement the impacts of the Tax Act, prospectively. On January 30, 2019, Duke Energy Kentucky entered into a settlement agreement with the Attorney General of Kentucky, the only intervenor in the case. The settlement provided for an approximate $7 million increase in natural gas base revenue, a return on equity of 9.7 percent and approval of the proposed Weather Normalization Mechanism. A hearing was held on February 5, 2019. The commission issued its Order approving the settlement without material modification on March 27, 2019. Revised customer rates were effective April 1, 2019.

Duke Energy Kentucky Electric Base Rate Case

On August 1, 2019, Duke Energy Kentucky filed a notice with the KPSC of its intent to file a general electric rate case application no earlier than 30 days from the notice submittal date.

Duke Energy Indiana

2019 Indiana Rate Case

On July 2, 2019, Duke Energy Indiana filed a general rate case with the IURC, its first general rate case in Indiana in 16 years, for a rate increase for retail customers of approximately $395 million, which represents an approximate 15 percent increase in retail revenues. The rate increase is driven by strategic investments to generate cleaner electricity, improve reliability and serve a growing customer base. The request is premised upon a Duke Energy Indiana rate base of $10.2 billion as of December 31, 2018, and adjusted for projected changes through December 31, 2020. Hearings are expected to commence in early 2020, with rates to be effective by mid-2020. Duke Energy Indiana cannot predict the outcome of this matter.



FINANCIAL STATEMENTS	REGULATORY MATTERS

FERC Transmission Return on Equity Complaint

Customer groups have filed with the FERC complaints against MISO and its transmission-owning members, including Duke Energy Indiana, alleging, among other things, that the current base rate of return on equity earned by MISO transmission owners of 12.38 percent is unjust and unreasonable. The complaints claim, among other things, that the current base rate of return on equity earned by MISO transmission owners should be reduced to 8.67 percent. On January 5, 2015, the FERC issued an order accepting the MISO transmission owners' adder of 0.50 percent to the base rate of return on equity based on participation in an RTO subject to it being applied to a return on equity that is shown to be just and reasonable in the pending return on equity complaints. On December 22, 2015, the presiding FERC ALJ in the first complaint issued an Initial Decision in which the base rate of return on equity was set at 10.32 percent. On September 28, 2016, the Initial Decision in the first complaint was affirmed by FERC, but is subject to rehearing requests. On June 30, 2016, the presiding FERC ALJ in the second complaint issued an Initial Decision setting the base rate of return on equity at 9.70 percent. The Initial Decision in the second complaint is pending FERC review. On April 14, 2017, the D.C. Circuit Court, in Emera Maine v. FERC, reversed and remanded certain aspects of the methodology employed by FERC to establish rates of return on equity. On October 16, 2018, FERC issued an order in response to the Emera remand proceeding proposing a new method for determining whether an existing return on equity is unjust and unreasonable, and a new process for determining a just and reasonable return on equity. On November 14, 2018, FERC directed parties to the MISO complaints to file briefs on how the new process for determining return on equity proposed in the Emera proceeding should be applied to the complaints involving the MISO transmission owners’ return on equity. Initial briefs were filed on February 13, 2019, and reply briefs were filed April 10, 2019. Duke Energy Indiana currently believes these matters will not have a material impact on its results of operations, cash flows and financial position.

Edwardsport Integrated Gasification Combined Cycle Plant

On September 20, 2018, Duke Energy Indiana, the Indiana Office of Utility Consumer Counselor, the Duke Industrial Group and Nucor Steel – Indiana entered into a settlement agreement to resolve IGCC ratemaking issues for calendar years 2018 and 2019. The agreement will remain in effect until new rates are established in Duke Energy Indiana's next base rate case, which ~~is expected~~was filed on July 2, 2019, with rates to be ~~filed in mid-2019 with rates~~ effective in mid-2020. ~~It addressed the pending Edwardsport filing at the commission and eliminated the need for future filings until the overall rate case. The settlement is subject to IURC approval.~~ An evidentiary hearing was held in December 2018, and on June 5, 2019, the IURC issued an ~~IURC~~ Order ~~is expected in May 2019. Duke Energy Indiana cannot predict~~approving the ~~outcome of this matter.~~2018 Settlement Agreement.

Piedmont

North Carolina Integrity Management Rider Filing

On April 30, 2019, Piedmont filed a petition under the IMR mechanism to update rates, based on the eligible capital investments closed to integrity and safety projects over the six-month period ending March 31, 2019. The NCUC approved the petition on May 29, 2019, and rates became effective June 1, 2019. The effect of the update was an increase to annual revenues of approximately $9 million.

Tennessee Integrity Management Rider Filing

In November 2018, Piedmont filed a petition with the TPUC under the IMR mechanism to collect an additional $3 million in annual revenues, effective January 2019, based on the eligible capital investments closed to integrity and safety projects over the 12-month period ending October 31, 2018. A hearing on the matter was held on March 11, 2019. On May 20, 2019, the TPUC approved Piedmont's IMR application as filed and ~~a decision is expected in May~~revised customer rates were effective June 1, 2019.



~~FINANCIAL STATEMENTS~~	~~REGULATORY MATTERS~~

2019 North Carolina Rate Case

On April 1, 2019, Piedmont filed an application with the NCUC, its first general rate case in North Carolina in six years, for a rate increase for retail customers of approximately $83 million, which represents an approximate 9 percent increase in retail revenues. The rate increase is driven by significant infrastructure upgrade investments (plant additions) since the last general rate case, offset by savings that customers will begin receiving due to federal and state tax reform. Approximately half 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. ~~Piedmont anticipates the NCUC will schedule the~~An evidentiary hearing ~~for late summer/early fall~~is scheduled to begin on August 19, 2019, ~~which would enable the rate change arising from this proceeding to take effect~~and a decision and revised customer rates are expected by the end of 2019. Piedmont cannot predict the outcome of this matter.

OTHER REGULATORY MATTERS

Atlantic Coast Pipeline, LLC

On September 2, 2014, Duke Energy, Dominion Resources (Dominion), Piedmont and Southern Company Gas announced the formation of Atlantic Coast Pipeline, LLC (ACP) to build and own the proposed Atlantic Coast Pipeline (ACP pipeline), an approximately 600-mile interstate natural gas pipeline running from West Virginia to North Carolina. The ACP pipeline is designed to meet, in part, the needs identified by Duke Energy Carolinas, Duke Energy Progress and Piedmont. Dominion will be responsible for building and operating the ACP pipeline and holds a leading ownership percentage in ACP of 48 percent. Duke Energy owns a 47 percent interest, which is accounted for as an equity method investment through its Gas Utilities and Infrastructure segment. Southern Company Gas maintains a 5 percent interest. See Note 13 for additional information related to Duke Energy's ownership interest. Duke Energy Carolinas, Duke Energy Progress and Piedmont, among others, will be customers of the pipeline. Purchases will be made under several 20-year supply contracts, subject to state regulatory approval.



FINANCIAL STATEMENTS	REGULATORY MATTERS

In 2018, the FERC issued a series of Notices to Proceed, which authorized the project to begin certain construction-related activities along the pipeline route, including supply header and compressors. On May 11, 2018, and October 19, 2018, FERC issued Notices to Proceed allowing full construction activities in all areas of West Virginia except in the Monongahela National Forest. On July 24, 2018, FERC issued a Notice to Proceed allowing full construction activities along the project route in North Carolina. On October 19, 2018, the conditions to effectiveness of the Virginia 401 water quality certification were satisfied. Immediately following receipt of the Virginia 401 certification, ACP filed a request for FERC to issue a Notice to Proceed with full construction activities in Virginia. We appreciate the professional and collaborative process by the permitting agencies designed to ensure that this critical energy infrastructure project will meet the stringent environmental standards required by law and regulation.

ACP is the subject of challenges in state and federal courts and agencies, including, among others, challenges of the project’s biological opinion (BiOp) and incidental take statement (ITS), crossings of the Blue Ridge Parkway, the Appalachian Trail, and the Monongahela and George Washington National Forests, the project’s U.S. Army Corps of Engineers (USACE) 404 permit, the Virginia conditional 401 water quality certification, the project's air permit for a compressor station at Buckingham, Virginia, the FERC Environmental Impact Statement order and the FERC order approving the Certificate of Public Convenience and Necessity. Each of these challenges alleges non-compliance on the part of federal and state permitting authorities and adverse ecological consequences if the project is permitted to proceed. Since December 2018, notable developments in these challenges include a stay in December 2018 issued by the U.S. Court of Appeals for the Fourth Circuit (Fourth Circuit) and the same court's ultimate vacatur of the project's ~~biological opinion~~BiOp and ITS (which stay has halted most project construction activity), a Fourth Circuit decision vacating the project's permits to cross the Monongahela and George Washington National Forests and the Appalachian Trail, the Fourth Circuit's remand to USACE of ACP's Huntington District 404 verification and the Fourth Circuit’s remand to the National Park Service of the ACP’s Blue Ridge Parkway right-of-way. ACP is vigorously defending these challenges and coordinating with the federal and state authorities which are the direct parties to the challenges. ~~ACP and federal agencies are coordinating on a potential appeal~~The Solicitor General of the ~~Fourth Circuit’s recent ruling vacating~~United States and ACP filed petitions for certiorari to the ~~project’s permit to cross~~Supreme Court of the United States on June 25, 2019, regarding the Appalachian ~~Trail.~~Trail crossing and anticipate a decision in October 2019 from the Supreme Court of the United States as to whether it will hear the case. ACP is also evaluating possible legislative remedies to this issue. On July 26, 2019, the Fourth Circuit issued an order vacating ACP's BiOp and ~~administrative remedies. On May 9, 2019, ACP,~~ITS, finding that the U.S. Fish and Wildlife Service (FWS) had reached arbitrary conclusions in issuing the vacated BiOp and ~~the Department~~ITS. In anticipation of ~~Justice will present arguments before~~such an order by the Fourth Circuit, ~~supporting~~ACP and the ~~project’s stayed biological opinion~~FWS commenced work in mid-May of 2019 to set the basis for a reissued BiOp and ITS. ACP continues coordinating and working with FWS and other parties in preparation for a reissuance of the BiOp and ITS.

The delays resulting from the legal challenges described above have impacted the cost and schedule for the project. As a result, project cost estimates have increased to $7.0 billion to $7.8 billion, excluding financing costs. ACP expects to achieve a late 2020 in-service date for key segments of the project, while it expects the remainder to extend into 2021. Abnormal weather, work delays (including delays due to judicial or regulatory action) and other conditions may result in cost or schedule modifications in the future.

Constitution Pipeline Company, LLC

Duke Energy owns a 24 percent ownership interest in Constitution, which is accounted for as an equity method investment. Constitution is a natural gas pipeline project slated to transport natural gas supplies from the Marcellus supply region in northern Pennsylvania to major northeastern markets. The pipeline will be constructed and operated by Williams Partners L.P., which has a 41 percent ownership share. The remaining interest is held by Cabot Oil and Gas Corporation and WGL Holdings, Inc. Before the permitting delays discussed below, Duke Energy's total anticipated contributions were approximately $229 million. As a result of the permitting delays and project uncertainty, total anticipated contributions by Duke Energy can no longer be reasonably estimated. Since April 2016, with the actions of the New York State Department of Environmental Conservation (NYSDEC), Constitution stopped construction and discontinued capitalization of future development costs until the project's uncertainty is resolved.

In December 2014, Constitution received approval from the FERC to construct and operate the proposed pipeline. However, on April 22, 2016, the NYSDEC denied Constitution’s application for a necessary water quality certification for the New York portion of the Constitution pipeline. Constitution filed a series of legal actions challenging the legality and appropriateness of the NYSDEC’s decision, culminating in an appeal to the Supreme Court of the United States, which appeal was denied on April 30, 2018. In addition, in October 2017, Constitution filed a petition for declaratory order requesting FERC to find that the NYSDEC waived its rights to issue a Section 401 water quality certification by not acting on Constitution's application within a reasonable period of time as required by statute, which petition was denied on January 11, 2018.



~~FINANCIAL STATEMENTS~~	~~REGULATORY MATTERS~~

On January 25, 2019, the D.C. Circuit Court rendered a decision in Hoopa Valley Tribe v. FERC that withdrawal and resubmission of an application for a Section 401 water quality certification constituted a waiver by the relevant state agency when such withdrawals and resubmissions were intended to extend the one-year limit on accepting or rejecting such an application. As Constitution had made similar arguments in its 2018 petition to FERC for a declaratory order, on April 1, 2019, Constitution filed a new petition for declaratory order requesting FERC find a waiver on the part of NYSDEC in accordance with the D.C. Circuit Court’s newly established precedent. On May 1, 2019, Constitution filed its response to supplemental pleadings filed by NYSDEC and others in this proceeding. A FERC response is expected later this year.

Constitution is currently unable to approximate an in-service date for the project due to the NYSDEC's denial of the water quality certification. The Constitution partners remain committed to the project and are evaluating next steps to move the project forward. On June 25, 2018, Constitution filed with FERC a Request for Extension of Time until December 2, 2020, for construction of the project. On November 5, 2018, FERC issued an Order Granting Extension of Time.

During the ~~three~~six months ended ~~March 31,~~June 30, 2018, Duke Energy recorded an OTTI of $55 million within Equity in ~~(losses)~~ earnings of unconsolidated affiliates on Duke Energy's Condensed Consolidated Statements of Income. The charge represented the excess carrying value over the estimated fair value of the project, which was based on a Level 3 Fair Value measurement that was determined from the income approach using discounted cash flows. The impairment was primarily due to actions taken by the courts and regulators to uphold the NYSDEC's denial of the certification and uncertainty associated with the remaining legal and regulatory challenges.

See Note 13 for additional information related to ownership interest and carrying value of the investment.



FINANCIAL STATEMENTS	REGULATORY MATTERS

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 primarily because facilities do not have the requisite emission control equipment to meet regulatory requirements expected to apply in the near future.~~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 due to a lack of requisite environmental control equipment.~~retirement. Dollar amounts in the table below are included in Net property, plant and equipment on the Condensed Consolidated Balance Sheets as of ~~March 31,~~June 30, 2019, and exclude capitalized asset retirement costs.


		Remaining Net			Remaining Net
	Capacity	Book Value		Capacity	Book Value
	(in MW)	(in millions)		(in MW)	(in millions)
Duke Energy Carolinas
Allen Steam Station Units 1-3^(a)	585	$	159	585	156
Duke Energy Indiana
Gallagher Units 2 and 4^(b)	280	120		280	118
Gibson Units 1-5^(c)				3,132	1,960
Cayuga Units 1-2^(c)				1,005	983
Total Duke Energy	865	$	279	5,002	$	3,217



FINANCIAL STATEMENTS	VARIABLE INTEREST ENTITIES

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	December 2020		December 2020		February 2021		April 2021
Credit facility amount	$	350	$	475	$	325	$	250
Amounts borrowed at June 30, 2019	328		475		325		250
Amounts borrowed at December 31, 2018	325		450		300		225
Restricted Receivables at June 30, 2019	484		671		518		472
Restricted Receivables at December 31, 2018	564		699		547		357

Duke Energy
Duke Energy
Duke Energy
Duke Energy
Carolinas
Progress
Florida
(in millions) CRC
DERF
DEPR
DEFR
Expiration date December 2020
December 2020
February 2021
April 2021
Credit facility amount $ 350
$ 475
$ 325
$ 250
Amounts borrowed at March 31, 2019 350
475
325
250
Amounts borrowed at December 31, 2018 325
450
300
225
Restricted Receivables at March 31, 2019 534
630
495
317
Restricted Receivables at December 31, 2018 564
699
547
357

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.

In June 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)	June 30, 2019		December 31, 2018
Receivables of VIEs	$	8	$	5
Regulatory Assets: Current	52		52
Current Assets: Other	31		39
Other Noncurrent Assets: Regulatory assets	1,019		1,041
Current Liabilities: Other	10		10
Current maturities of long-term debt	54		53
Long-Term Debt	1,082		1,111

(in millions) March 31, 2019
December 31, 2018
Receivables of VIEs $ 5
$ 5
Regulatory Assets: Current 52
52
Current Assets: Other 12
39
Other Noncurrent Assets: Regulatory assets 1,032
1,041
Current Liabilities: Other 2
10
Current maturities of long-term debt 54
53
Long-Term Debt 1,082
1,111

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 solar energy systems 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 EPC 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 renewables VIEs.



(in millions)	June 30, 2019			December 31, 2018
Current Assets: Other	$	109		$	123
Property, plant and equipment, cost	4,419			4,007
Accumulated depreciation and amortization	(769		)	(698		)
Other Noncurrent Assets: Other	289			261
Current maturities of long-term debt	178			174
Long-Term Debt	1,610			1,587
Other Noncurrent Liabilities: Asset Retirement Obligations	108			106
Other Noncurrent Liabilities: Other	222			212

(in millions) March 31, 2019
December 31, 2018
Current Assets: Other $ 140
$ 123
Property, plant and equipment, cost 4,018
4,007
Accumulated depreciation and amortization (733 ) (698 )
Other Noncurrent Assets: Other 280
261
Current maturities of long-term debt 173
174
Long-Term Debt 1,583
1,587
Other Noncurrent Liabilities: Asset Retirement Obligations 107
106
Other Noncurrent Liabilities: Other 212
212



FINANCIAL STATEMENTS	VARIABLE INTEREST ENTITIES

NON-CONSOLIDATED VIEs

The following tables summarize the impact of non-consolidated VIEs on the Condensed Consolidated Balance Sheets.



	June 30, 2019
	Duke Energy										Duke		Duke
	Pipeline			Commercial		Other					Energy		Energy
(in millions)	Investments			Renewables		VIEs		Total			Ohio		Indiana
Receivables from affiliated companies	$	—		$	—	$	—	$	—		$	45	$	81
Investments in equity method unconsolidated affiliates	1,066			187		52		1,305			—		—
Total assets	$	1,066		$	187	$	52	$	1,305		$	45	$	81
Taxes accrued	(2		)	—		—		(2		)	—		—
Other current liabilities	—			—		4		4			—		—
Deferred income taxes	48			—		—		48			—		—
Other noncurrent liabilities	—			—		11		11			—		—
Total liabilities	$	46		$	—	$	15	$	61		$	—	$	—
Net assets	$	1,020		$	187	$	37	$	1,244		$	45	$	81

March 31, 2019
Duke Energy Duke
Duke
Pipeline
Commercial
Other
Energy
Energy
(in millions) Investments
Renewables

VIEs

Total
Ohio
Indiana
Receivables from affiliated companies $ —
$ —
$ —
$ —
$ 67
$ 89
Investments in equity method unconsolidated affiliates 998
187
50
1,235
—
—
Total assets $ 998
$ 187
$ 50
$ 1,235
$ 67
$ 89
Taxes accrued (1 ) —
—
(1 ) —
—
Other current liabilities —
—
2
2
—
—
Deferred income taxes 40
—
—
40
—
—
Other noncurrent liabilities —
—
11
11
—
—
Total liabilities $ 39
$ —
$ 13
$ 52
$ —
$ —
Net assets $ 959
$ 187
$ 37
$ 1,183
$ 67
$ 89



	December 31, 2018
	Duke Energy										Duke		Duke
	Pipeline			Commercial		Other					Energy		Energy
(in millions)	Investments			Renewables		VIEs		Total			Ohio		Indiana
Receivables from affiliated companies	$	—		$	—	$	—	$	—		$	93	$	118
Investments in equity method unconsolidated affiliates	822			190		48		1,060			—		—
Total assets	$	822		$	190	$	48	$	1,060		$	93	$	118
Taxes accrued	(1		)	—		—		(1		)	—		—
Other current liabilities	—			—		4		4			—		—
Deferred income taxes	21			—		—		21			—		—
Other noncurrent liabilities	—			—		12		12			—		—
Total liabilities	$	20		$	—	$	16	$	36		$	—	$	—
Net assets	$	802		$	190	$	32	$	1,024		$	93	$	118

December 31, 2018
Duke Energy Duke
Duke
Pipeline
Commercial
Other
Energy
Energy
(in millions) Investments
Renewables
VIEs
Total
Ohio
Indiana
Receivables from affiliated companies $ —
$ —
$ —
$ —
$ 93
$ 118
Investments in equity method unconsolidated affiliates 822
190
48
1,060
—
—
Total assets $ 822
$ 190
$ 48
$ 1,060
$ 93
$ 118
Taxes accrued (1 ) —
—
(1 ) —
—
Other current liabilities —
—
4
4
—
—
Deferred income taxes 21
—
—
21
—
—
Other noncurrent liabilities —
—
12
12
—
—
Total liabilities $ 20

$ —

$ 16

$ 36

$ —

$ —
Net assets $ 802
$ 190
$ 32
$ 1,024
$ 93
$ 118

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 the power purchase agreement with OVEC, which is discussed below, and various guarantees, including Duke Energy's guarantee agreement to support its share of the ACP revolving credit facility. Duke Energy's maximum exposure to loss under the terms of the guarantee is ~~$737~~$790 million, which represents 47 percent of the outstanding borrowings under the credit facility as of ~~March 31,~~June 30, 2019. For more information on various guarantees, refer to Note 4.

Pipeline Investments

Duke Energy has investments in various joint ventures with pipeline projects currently under construction. 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.



~~FINANCIAL STATEMENTS~~	~~VARIABLE INTEREST ENTITIES~~

The table below presents Duke Energy's ownership interest and investment balances in these joint ventures.



			VIE Investment Amount (in millions)
	Ownership		June 30,		December 31,
Entity Name	Interest		2019		2018
ACP^(a)	47	%	$	1,041	$	797
Constitution	24	%	25		25
Total			$	1,066	$	822

VIE Investment Amount (in millions)
Ownership March 31, December 31,
Entity Name Interest 2019 2018
ACP^(a)
47 % $ 973
$ 797
Constitution 24 % 25
25
Total $ 998
$ 822


(a)	Duke Energy evaluated this investment for impairment as of ~~March 31,~~June 30, 2019, and December 31, 2018, and determined that fair value approximated carrying value and therefore no impairment was necessary.



FINANCIAL STATEMENTS	VARIABLE INTEREST ENTITIES

Commercial Renewables

Duke Energy has investments in various renewable energy project entities. Some of these entities are VIEs due to Duke Energy issuing guarantees for debt service and operations and maintenance reserves in support of debt financings. Duke Energy does not consolidate these VIEs because power to direct and control key activities is shared jointly by Duke Energy and other owners.

Pioneer

Duke Energy holds a 50 percent equity interest in Pioneer. Pioneer is considered a VIE due to having insufficient equity to finance its own activities without subordinated financial support. The activities that most significantly impact Pioneer's economic performance are decisions related to the development of new transmission facilities. The power to direct these activities is jointly and equally shared by Duke Energy and the other joint venture partner, American Electric Power; therefore, Duke Energy does not consolidate Pioneer.

OVEC

Duke Energy Ohio’s 9 percent 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 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. On March 31, 2018, FES, a subsidiary of FirstEnergy and an ICPA counterparty with a power participation ratio of 4.85 percent, filed for Chapter 11 bankruptcy, which could increase costs allocated to the counterparties. On July 31, 2018, the bankruptcy court rejected the FES ICPA, which means OVEC is an unsecured creditor in the FES bankruptcy proceeding. Duke Energy Ohio cannot predict the impact of the bankruptcy filing on its OVEC interests. In addition, certain proposed environmental rulemaking could result in future increased OVEC cost allocations.

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)	June 30, 2019		December 31, 2018		June 30, 2019		December 31, 2018
Receivables sold	$	210	$	269	$	314	$	336
Less: Retained interests	45		93		81		118
Net receivables sold	$	165	$	176	$	233	$	218

Duke Energy Ohio Duke Energy Indiana
(in millions) March 31, 2019
December 31, 2018
March 31, 2019
December 31, 2018
Receivables sold $ 253
$ 269
$ 322
$ 336
Less: Retained interests 67
93
89
118
Net receivables sold $ 186
$ 176
$ 233
$ 218



~~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				Six Months Ended				Three Months Ended				Six Months Ended
	June 30,				June 30,				June 30,				June 30,
(in millions)	2019		2018		2019		2018		2019		2018		2019		2018
Sales
Receivables sold	$	429	$	461	$	1,004	$	1,028	$	676	$	692	$	1,410	$	1,386
Loss recognized on sale	3		3		7		6		4		4		9		7
Cash flows
Cash proceeds from receivables sold	$	448	$	465	$	1,045	$	1,050	$	680	$	686	$	1,438	$	1,397
Collection fees received	1		1		1		1		1		1		1		1
Return received on retained interests	2		1		4		3		2		2		5		4

Duke Energy Ohio Duke Energy Indiana
Three Months Ended Three Months Ended
March 31, March 31,
(in millions) 2019
2018
2019
2018
Sales
Receivables sold $ 575
$ 567
$ 734
$ 694
Loss recognized on sale 4
3
5
3
Cash flows
Cash proceeds from receivables sold $ 597
$ 585
$ 758
$ 711
Return received on retained interests 2
2
3
2

Cash flows from sales of receivables are reflected within Operating Activities on Duke Energy Ohio’s and Duke Energy Indiana’s Condensed Consolidated Statements of Cash Flows.



FINANCIAL STATEMENTS	REVENUE

14. 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)	2019		2020		2021		2022		2023		Thereafter		Total
Progress Energy	$	63	$	121	$	87	$	82	$	39	$	42	$	434
Duke Energy Progress	4		9		9		9		9		9		49
Duke Energy Florida	59		112		78		73		30		33		385
Duke Energy Indiana	5		10		5		—		—		—		20

Remaining Performance Obligations
(in millions) 2019
2020
2021
2022
2023
Thereafter
Total
Progress Energy $ 86
$ 121
$ 87
$ 82
$ 39
$ 42
$ 457
Duke Energy Progress 7
9
9
9
9
9
52
Duke Energy Florida 79
112
78
73
30
33
405
Duke Energy Indiana 7
10
5
—
—
—
22

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 revenues 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)	2019		2020		2021		2022		2023		Thereafter		Total
Piedmont	$	34	$	69	$	65	$	64	$	61	$	432	$	725

Remaining Performance Obligations
(in millions) 2019
2020
2021
2022
2023
Thereafter
Total
Piedmont $ 53
$ 69
$ 65
$ 64
$ 61
$ 431
$ 743

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 RECs to customers. The majority of these PPAs have historically 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.



~~FINANCIAL STATEMENTS~~	~~REVENUE~~

Other

The remainder of Duke Energy’s operations is presented as Other, which does not include material revenues from contracts with customers.

~~Disaggregated Revenues~~

~~Disaggregated revenues are presented as follows:~~

Three Months Ended March 31, 2019
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 $ 2,370
$ 760
$ 1,114
$ 536
$ 578
$ 189
$ 306
$ —
   General 1,427
496
632
306
326
103
197
—
   Industrial 711
266
222
161
61
33
190
—
   Wholesale 541
119
353
315
38
14
54
—
   Other revenues 172
78
172
125
47
16
17
—
Total Electric Utilities and Infrastructure revenue from contracts with customers $ 5,221
$ 1,719
$ 2,493
$ 1,443
$ 1,050
$ 355
$ 764
$ —

Gas Utilities and Infrastructure
   Residential $ 414
$ —
$ —
$ —
$ —
$ 112
$ —
$ 302
   Commercial 206
—
—
—
—
49
—
157
   Industrial 48
—
—
—
—
7
—
42
   Power Generation —
—
—
—
—
—
—
13
   Other revenues 63
—
—
—
—
8
—
56
Total Gas Utilities and Infrastructure revenue from contracts with customers $ 731
$ —
$ —
$ —
$ —
$ 176
$ —
$ 570

Commercial Renewables
Revenue from contracts with customers $ 42
$ —
$ —
$ —
$ —
$ —
$ —
$ —

Other
Revenue from contracts with customers $ 4
$ —
$ —
$ —
$ —
$ —
$ —
$ —
Total revenue from contracts with customers $ 5,998
$ 1,719
$ 2,493
$ 1,443
$ 1,050
$ 531
$ 764
$ 570

Other revenue sources^(a)
$ 165
$ 25
$ 79
$ 41
$ 36
$ —
$ 4
$ 9
Total revenues $ 6,163
$ 1,744
$ 2,572
$ 1,484
$ 1,086
$ 531
$ 768
$ 579



FINANCIAL STATEMENTS	REVENUE

Disaggregated Revenues

Disaggregated revenues are presented as follows:



	Three Months Ended June 30, 2019
			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	$	2,304	$	679	$	1,243	$	496	$	747	$	159	$	225	$	—
General	1,584		531		750		339		411		105		197		—
Industrial	759		289		231		164		67		36		201		—
Wholesale	527		109		351		309		42		9		59		—
Other revenues	187		68		99		44		55		25		27		—
Total Electric Utilities and Infrastructure revenue from contracts with customers	$	5,361	$	1,676	$	2,674	$	1,352	$	1,322	$	334	$	709	$	—

Gas Utilities and Infrastructure
Residential	$	146	$	—	$	—	$	—	$	—	$	64	$	—	$	82
Commercial	85		—		—		—		—		26		—		59
Industrial	29		—		—		—		—		3		—		24
Power Generation	—		—		—		—		—		—		—		13
Other revenues	22		—		—		—		—		2		—		19
Total Gas Utilities and Infrastructure revenue from contracts with customers	$	282	$	—	$	—	$	—	$	—	$	95	$	—	$	197

Commercial Renewables
Revenue from contracts with customers	$	46	$	—	$	—	$	—	$	—	$	—	$	—	$	—

Other
Revenue from contracts with customers	$	6	$	—	$	—	$	—	$	—	$	—	$	—	$	—
Total revenue from contracts with customers	$	5,695	$	1,676	$	2,674	$	1,352	$	1,322	$	429	$	709	$	197

Other revenue sources^(a)	$	178	$	37	$	70	$	35	$	31	$	4	$	5	$	12
Total revenues	$	5,873	$	1,713	$	2,744	$	1,387	$	1,353	$	433	$	714	$	209

Three Months Ended March 31, 2018
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 $ 2,350
$ 781
$ 1,112
$ 516
$ 595
$ 180
$ 278
$ —
   General 1,375
472
631
299
333
96
178
—
   Industrial 664
255
208
145
62
30
173
—
   Wholesale 633
119
446
397
50
—
68
—
   Other revenues 139
67
129
85
43
14
17
—
Total Electric Utilities and Infrastructure revenue from contracts with customers $ 5,161
$ 1,694
$ 2,526
$ 1,442
$ 1,083
$ 320
$ 714
$ —

Gas Utilities and Infrastructure
   Residential $ 413
$ —
$ —
$ —
$ —
$ 111
$ —
$ 302
   Commercial 201
—
—
—
—
49
—
152
   Industrial 48
—
—
—
—
7
—
41
   Power Generation —
—
—
—
—
—
—
13
   Other revenues 55
—
—
—
—
6
—
49
Total Gas Utilities and Infrastructure revenue from contracts with customers $ 717
$ —
$ —
$ —
$ —
$ 173
$ —
$ 557

Commercial Renewables
Revenue from contracts with customers $ 33
$ —
$ —
$ —
$ —
$ —
$ —
$ —

Other
Revenue from contracts with customers $ 17
$ —
$ —
$ —
$ —
$ 14
$ —
$ —
Total revenue from contracts with customers $ 5,928
$ 1,694
$ 2,526
$ 1,442
$ 1,083
$ 507
$ 714
$ 557

Other revenue sources^(a)
$ 207
$ 69
$ 50
$ 18
$ 32
$ 17
$ 17
$ (4 )
Total revenues $ 6,135
$ 1,763
$ 2,576
$ 1,460
$ 1,115
$ 524
$ 731
$ 553



FINANCIAL STATEMENTS	REVENUE



	Three Months Ended June 30, 2018
			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	$	2,185	$	659	$	1,099	$	452	$	648	$	181		$	245	$	—
General	1,481		501		678		300		377		110			188		—
Industrial	736		286		224		159		66		33			192		—
Wholesale	515		115		322		287		34		2			77		—
Other revenues	194		85		96		47		50		23			20		—
Total Electric Utilities and Infrastructure revenue from contracts with customers	$	5,111	$	1,646	$	2,419	$	1,245	$	1,175	$	349		$	722	$	—

Gas Utilities and Infrastructure
Residential	$	153	$	—	$	—	$	—	$	—	$	66		$	—	$	87
Commercial	87		—		—		—		—		28			—		59
Industrial	31		—		—		—		—		3			—		28
Power Generation	—		—		—		—		—		—			—		14
Other revenues	23		—		—		—		—		6			—		17
Total Gas Utilities and Infrastructure revenue from contracts with customers	$	294	$	—	$	—	$	—	$	—	$	103		$	—	$	205

Commercial Renewables
Revenue from contracts with customers	$	47	$	—	$	—	$	—	$	—	$	—		$	—	$	—

Other
Revenue from contracts with customers	$	15	$	—	$	—	$	—	$	—	$	10		$	—	$	—
Total revenue from contracts with customers	$	5,467	$	1,646	$	2,419	$	1,245	$	1,175	$	462		$	722	$	205

Other revenue sources^(a)	$	176	$	26	$	79	$	46	$	28	$	(3	)	$	16	$	10
Total revenues	$	5,643	$	1,672	$	2,498	$	1,291	$	1,203	$	459		$	738	$	215


(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.



FINANCIAL STATEMENTS	REVENUE



	Six Months Ended June 30, 2019
			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	$	4,674	$	1,439	$	2,357	$	1,032	$	1,325	$	348	$	531	$	—
General	3,011		1,027		1,382		645		737		208		394		—
Industrial	1,470		555		453		325		128		69		391		—
Wholesale	1,068		228		704		624		80		23		113		—
Other revenues	359		146		271		169		102		41		44		—
Total Electric Utilities and Infrastructure revenue from contracts with customers	$	10,582	$	3,395	$	5,167	$	2,795	$	2,372	$	689	$	1,473	$	—

Gas Utilities and Infrastructure
Residential	$	560	$	—	$	—	$	—	$	—	$	176	$	—	$	384
Commercial	291		—		—		—		—		75		—		216
Industrial	77		—		—		—		—		10		—		66
Power Generation	—		—		—		—		—		—		—		26
Other revenues	85		—		—		—		—		10		—		75
Total Gas Utilities and Infrastructure revenue from contracts with customers	$	1,013	$	—	$	—	$	—	$	—	$	271	$	—	$	767

Commercial Renewables
Revenue from contracts with customers	$	88	$	—	$	—	$	—	$	—	$	—	$	—	$	—

Other
Revenue from contracts with customers	$	10	$	—	$	—	$	—	$	—	$	—	$	—	$	—
Total Revenue from contracts with customers	$	11,693	$	3,395	$	5,167	$	2,795	$	2,372	$	960	$	1,473	$	767

Other revenue sources^(a)	$	343	$	62	$	149	$	76	$	67	$	4	$	9	$	21
Total revenues	$	12,036	$	3,457	$	5,316	$	2,871	$	2,439	$	964	$	1,482	$	788



FINANCIAL STATEMENTS	REVENUE



	Six Months Ended June 30, 2018
			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	$	4,535	$	1,440	$	2,211	$	968	$	1,243	$	361	$	523	$	—
General	2,856		973		1,309		599		710		206		366		—
Industrial	1,400		541		432		304		128		63		365		—
Wholesale	1,148		234		768		684		84		2		145		—
Other revenues	333		152		225		132		93		37		37		—
Total Electric Utilities and Infrastructure revenue from contracts with customers	$	10,272	$	3,340	$	4,945	$	2,687	$	2,258	$	669	$	1,436	$	—

Gas Utilities and Infrastructure
Residential	$	566	$	—	$	—	$	—	$	—	$	177	$	—	$	389
Commercial	288		—		—		—		—		77		—		211
Industrial	79		—		—		—		—		10		—		69
Power Generation	—		—		—		—		—		—		—		27
Other revenues	78		—		—		—		—		12		—		66
Total Gas Utilities and Infrastructure revenue from contracts with customers	$	1,011	$	—	$	—	$	—	$	—	$	276	$	—	$	762

Commercial Renewables
Revenue from contracts with customers	$	80	$	—	$	—	$	—	$	—	$	—	$	—	$	—

Other
Revenue from contracts with customers	$	31	$	—	$	—	$	—	$	—	$	24	$	—	$	—
Total Revenue from contracts with customers	$	11,394	$	3,340	$	4,945	$	2,687	$	2,258	$	969	$	1,436	$	762

Other revenue sources^(a)	$	384	$	95	$	129	$	64	$	60	$	14	$	33	$	6
Total revenues	$	11,778	$	3,435	$	5,074	$	2,751	$	2,318	$	983	$	1,469	$	768


(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.

UNBILLED REVENUE

Unbilled revenues are recognized by applying customer billing rates to the estimated volumes of energy or natural gas delivered but not yet billed. Unbilled revenues can vary significantly from period to period as a result of seasonality, weather, customer usage patterns, customer mix, average price in effect for customer classes, timing of rendering customer bills and meter reading schedules, and the impact of weather normalization or margin decoupling mechanisms.

Unbilled revenues are included within Receivables and Receivables of VIEs on the Condensed Consolidated Balance Sheets as shown in the following table.



(in millions)	June 30, 2019		December 31, 2018
Duke Energy	$	790	$	896
Duke Energy Carolinas	288		313
Progress Energy	270		244
Duke Energy Progress	148		148
Duke Energy Florida	122		96
Duke Energy Ohio	1		2
Duke Energy Indiana	14		23
Piedmont	4		73

(in millions) March 31, 2019
December 31, 2018
Duke Energy $ 733
$ 896
Duke Energy Carolinas 281
313
Progress Energy 193
244
Duke Energy Progress 108
148
Duke Energy Florida 85
96
Duke Energy Ohio 1
2
Duke Energy Indiana 18
23
Piedmont 38
73



FINANCIAL STATEMENTS	REVENUE

Additionally, 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 13 for further information. These receivables for unbilled revenues are shown in the table below.



(in millions)	June 30, 2019		December 31, 2018
Duke Energy Ohio	$	65	$	86
Duke Energy Indiana	116		128

(in millions) March 31, 2019
December 31, 2018
Duke Energy Ohio $ 62
$ 86
Duke Energy Indiana 109
128

15. STOCKHOLDERS' EQUITY

Basic EPS is computed by dividing net income attributable to Duke Energy common stockholders, as adjusted for distributed and undistributed earnings allocated to participating securities, by the weighted average number of common shares outstanding during the period. Diluted EPS is computed by dividing net income attributable to Duke Energy common stockholders, as adjusted for distributed and undistributed earnings allocated to participating securities, 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 stock options and 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.

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 March 31,				Three Months Ended June 30,				Six Months Ended June 30,
(in millions, except per-share amounts)	2019		2018		2019		2018		2019		2018
Income from continuing operations attributable to Duke Energy common stockholders excluding impact of participating securities	$	898	$	619	$	819	$	504	$	1,718	$	1,123
Weighted average shares outstanding – basic and diluted	727		701
Earnings per share from continuing operations attributable to Duke Energy common stockholders

Weighted average common shares outstanding – basic					728		703		728		702
Equity Forwards					—		1		—		—
Weighted average common shares outstanding – diluted					728		704		728		702
EPS from continuing operations attributable to Duke Energy common stockholders
Basic and Diluted	$	1.24	$	0.88	$	1.12	$	0.72	$	2.36	$	1.60
Potentially dilutive items excluded from the calculation^(a)	2		2		2		2		2		2
Dividends declared per common share	$	0.9275	$	0.89	$	0.928	$	0.89	$	1.855	$	1.78
Dividends declared on preferred stock per depositary share					$	0.307	$	—	$	0.307	$	—


(a)	Performance stock awards were not included in the dilutive securities calculation because the performance measures related to the awards had not been met.

Common Stock

On February 20, 2018, Duke Energy filed a prospectus supplement and executed an EDA under which it may sell up to $1 billion of its common stock through an ATM offering program, including an equity forward sales component. The EDA was entered into with the Agents. Under the terms of the EDA, Duke Energy may issue and sell, through any of the Agents, shares of common stock through September 23, 2019.

In June 2018, Duke Energy marketed two separate tranches, each for 1.3 million shares, of common stock through equity forward transactions under the ATM program. In December 2018, Duke Energy physically settled these equity forwards by delivering 2.6 million shares of common stock in exchange for net proceeds of approximately $195 million.

Separately, in March 2018, Duke Energy marketed an equity offering of 21.3 million shares of common stock through an Underwriting Agreement. In connection with the offering, Duke Energy entered into equity forward sale agreements. The equity forwards required Duke Energy to either physically settle the transactions by issuing 21.3 million shares in exchange for net proceeds at the then-applicable forward sale price specified by the agreements, or net settle in whole or in part through the delivery or receipt of cash or shares. In June 2018, Duke Energy physically settled one-half of the equity forwards by delivering approximately 10.6 million shares of common stock in exchange for net cash proceeds of approximately $781 million. In December 2018, Duke Energy physically settled the remaining equity forward by delivering 10.6 million shares of common stock in exchange for net cash proceeds of approximately $766 million.

In 2018, Duke Energy also issued 2.2 million shares through its DRIP with an increase in additional paid-in capital of approximately $174 million. For the six months ended June 30, 2019, Duke Energy issued 0.9 million shares through its DRIP with an increase in additional paid-in capital of approximately $80 million.



FINANCIAL STATEMENTS	STOCKHOLDERS' EQUITY

In March and April 2019, Duke Energy marketed two separate tranches, each for 1.1 million shares, of common stock through equity forward transactions under the ATM program. The first tranche had an initial forward price of $89.83 per share and the second tranche had an initial forward price of $88.82 per share. In May and June 2019, a third tranche of 1.6 million shares of common stock was marketed and had an initial forward price of $86.23. The equity forwards require Duke Energy to either physically settle the transaction by issuing shares in exchange for net proceeds at the then-applicable forward sale price specified by the agreements or net settle in whole or in part through the delivery or receipt of cash or shares. The settlement alternative is at Duke Energy's election. No amounts have or will be recorded in Duke Energy's Condensed Consolidated Financial Statements with respect to these ATM offerings until settlements of the equity forwards occur, which is expected by December 31, 2019. The initial forward sale price will be subject to adjustment ~~on a daily basis~~ based on a floating interest rate factor and ~~will decrease by~~ other fixed amounts specified in the relevant forward sale agreements. Until settlement of the equity forwards, ~~earnings per share~~EPS dilution resulting from the agreements, if any, will be determined under the treasury stock method.



~~FINANCIAL STATEMENTS~~	~~STOCKHOLDERS' EQUITY~~

Preferred Stock

On March 29, 2019, Duke Energy completed the issuance of 40 million depositary shares, each representing 1/1,000th share of its Series A Cumulative Redeemable Perpetual Preferred Stock, at a price of $25 per depositary share. The transaction resulted in net proceeds of ~~$974~~$973 million after issuance costs and the proceeds are being used for general corporate purposes and to reduce short-term debt. The preferred stock has a $25 liquidation preference per depositary share and earns dividends on a cumulative basis at a rate of 5.75 percent per annum. Dividends are payable quarterly in arrears on the 16th day of March, June, September and December, ~~beginning~~and began on June 16, 2019. Dividends issued on its preferred stock are subject to approval by the Duke Energy Board of Directors. However, the deferral of dividend payments on the preferred stock prohibits the declaration of common stock dividends. Dividends declared on preferred stock will be recorded on the income statement as a reduction of net income to arrive at net income attributable to Duke Energy common stockholders. Dividends accumulated on preferred stock will be a reduction to net income used in the calculation of basic and diluted EPS.

The Series A Preferred Stock ranks, with respect to dividends and distributions upon liquidation or dissolution:

senior to Common Stock and to each other class or series of capital stock established after the original issue date of the Series A Preferred Stock that is expressly made subordinated to the Series A Preferred Stock;

on a parity with any class or series of capital stock established after the original issue date of the Series A Preferred Stock that is not expressly made senior or subordinated to the Series A Preferred Stock;

junior to any class or series of capital stock established after the original issue date of the Series A Preferred Stock that is expressly made senior to the Series A Preferred Stock;

junior to all of existing and future indebtedness (including indebtedness outstanding under Duke Energy's credit facilities, unsecured senior notes, junior subordinated debentures and commercial paper) and other liabilities with respect to assets available to satisfy claims against Duke Energy; and

structurally subordinated to existing and future indebtedness and other liabilities of Duke Energy's subsidiaries and future preferred stock of subsidiaries.

The preferred stock has no maturity or mandatory redemption date, is not redeemable at the option of the holders and includes separate call options. The first call option allows Duke Energy to call the preferred stock at a redemption price of $25.50 per depositary share prior to June 15, 2024, in whole but not in part, at any time within 120 days after a ratings event where a rating agency amends, clarifies or changes the criteria it uses to assign equity credit for securities such as the preferred stock. The second call option allows Duke Energy to call the preferred stock, in whole or in part, at any time, on or after June 15, 2024, at a redemption price of $25 per depositary share. Duke Energy is also required to redeem all accumulated and unpaid dividends if either call option is exercised.

Holders of the preferred stock have no voting rights with respect to matters that generally require the approval of voting stockholders. The limited voting rights of holders of preferred stock include the right to vote as a single class on certain matters that may affect the preference or special rights of the preferred stock, except in the instance that Duke Energy elects to defer the payment of dividends for a total of six quarterly full dividend periods. If dividends are deferred for a cumulative total of six quarterly full dividend periods, whether or not for consecutive dividend periods, holders of the preferred stock have the right to ~~nominate~~elect two additional Board members to the Duke Energy Board of Directors.

16. 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 uses a December 31 measurement date for its qualified non-contributory defined benefit retirement plan assets and obligations. However, because Duke Energy believes it is probable in 2019 that total lump-sum benefit payments will exceed the settlement threshold, which is defined as the sum of the service cost and interest cost on projected benefit obligation components of net periodic pension costs, Duke Energy remeasured the plan assets and plan obligations associated with one of its qualified pension plans as of June 30, 2019. The discount rate used for the remeasurement was 3.5 percent. The cash balance interest crediting rate was 4.0 percent. All other assumptions used for the remeasurement were consistent with the measurement as of December 31, 2018. As a result, Duke Energy recognized a remeasurement gain of $18 million, which is recorded in Other within Other Noncurrent Assets on the Condensed Consolidated Balance Sheets as of June 30, 2019. The remeasurement gain, which represents an increase in funded status, reflects an increase of $275 million in the fair value of plan assets and an increase of $257 million in the projected benefit obligation.



FINANCIAL STATEMENTS	EMPLOYEE BENEFIT PLANS

As the result of settlement accounting, Duke Energy recognized a settlement charge of $69 million, primarily as a regulatory asset within Other Noncurrent Assets on the Condensed Consolidated Balance Sheets as of June 30, 2019 (an immaterial amount was recorded in Other income and expenses, net within the Condensed Consolidated Statement of Operations). Settlement charges recognized by the Subsidiary Registrants were $43 million for Duke Energy Carolinas, $16 million for Duke Energy Progress, $3 million for Duke Energy Florida, $3 million for Duke Energy Indiana, $1 million for Duke Energy Ohio and $3 million for Piedmont. The settlement charge reflects 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 benefits payments as of June 30, 2019.

QUALIFIED PENSION PLANS

The following tables include the components of net periodic pension costs for qualified pension plans.


	Three Months Ended March 31, 2019																								Three Months Ended June 30, 2019
				Duke						Duke			Duke			Duke			Duke									Duke						Duke			Duke			Duke			Duke
	Duke			Energy			Progress			Energy			Energy			Energy			Energy						Duke			Energy			Progress			Energy			Energy			Energy			Energy
(in millions)	Energy			Carolinas			Energy			Progress			Florida			Ohio			Indiana			Piedmont			Energy			Carolinas			Energy			Progress			Florida			Ohio			Indiana			Piedmont
Service cost	$	37		$	12		$	11		$	6		$	4		$	1		$	2		$	1		$	37		$	12		$	10		$	6		$	6		$	1		$	2		$	2
Interest cost on projected benefit obligation	83			20			26			12			14			5			6			3			82			21			26			12			13			4			7			3
Expected return on plan assets	(143		)	(38		)	(44		)	(23		)	(22		)	(8		)	(11		)	(5		)	(143		)	(37		)	(45		)	(21		)	(22		)	(6		)	(10		)	(6		)
Amortization of actuarial loss	24			6			9			3			6			1			2			2			25			5			9			3			6			—			1			1
Amortization of prior service credit	(8		)	(2		)	(1		)	—			—			—			—			(3		)	(8		)	(2		)	—			(1		)	(1		)	—			(1		)	(2		)
Net periodic pension costs	$	(7	)	$	(2	)	$	1		$	(2	)	$	2		$	(1	)	$	(1	)	$	(2	)	$	(7	)	$	(1	)	$	—		$	(1	)	$	2		$	(1	)	$	(1	)	$	(2	)


	Three Months Ended March 31, 2018																								Three Months Ended June 30, 2018
				Duke						Duke			Duke			Duke			Duke									Duke						Duke			Duke			Duke			Duke
	Duke			Energy			Progress			Energy			Energy			Energy			Energy						Duke			Energy			Progress			Energy			Energy			Energy			Energy
(in millions)	Energy			Carolinas			Energy			Progress			Florida			Ohio			Indiana			Piedmont			Energy			Carolinas			Energy			Progress			Florida			Ohio			Indiana			Piedmont
Service cost	$	45		$	15		$	13		$	7		$	5		$	1		$	2		$	2		$	45		$	15		$	13		$	8		$	6		$	1		$	3		$	2
Interest cost on projected benefit obligation	75			18			24			11			13			5			6			3			75			18			22			10			12			4			6			3
Expected return on plan assets	(140		)	(37		)	(45		)	(21		)	(23		)	(7		)	(10		)	(6		)	(140		)	(37		)	(43		)	(21		)	(23		)	(7		)	(11		)	(6		)
Amortization of actuarial loss	33			7			11			5			6			1			2			3			33			7			11			5			6			1			2			3
Amortization of prior service credit	(8		)	(2		)	(1		)	—			—			—			—			(3		)	(8		)	(2		)	(1		)	(1		)	(1		)	—			—			(3		)
Net periodic pension costs	$	5		$	1		$	2		$	2		$	1		$	—		$	—		$	(1	)	$	5		$	1		$	2		$	1		$	—		$	(1	)	$	—		$	(1	)



Commission file number	Registrant, State of Incorporation or Organization, Address of Principal Executive Offices and Telephone Number		IRS Employer Identification ~~No.~~Number

~~1-32853~~	~~DUKE ENERGY CORPORATION~~ ~~(a Delaware corporation)~~ ~~550 South Tryon Street~~ ~~Charlotte, North Carolina 28202-1803~~ ~~704-382-3853~~	~~20-2777218~~



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

~~1-4928~~	~~DUKE ENERGY CAROLINAS, LLC~~ ~~(a North Carolina limited liability company)~~ ~~526 South Church Street~~ ~~Charlotte, North Carolina 28202-1803~~ ~~704-382-3853~~ ~~56-0205520~~		~~1-3274~~	~~DUKE ENERGY FLORIDA, LLC~~ ~~(a Florida limited liability company)~~ ~~299 First Avenue North~~ ~~St. Petersburg, Florida 33701~~ ~~704-382-3853~~ ~~59-0247770~~
~~1-15929~~Registrant	~~PROGRESS ENERGY, INC.~~ ~~(a North Carolina corporation)~~ ~~410 South Wilmington Street~~ ~~Raleigh, North Carolina 27601-1748~~ ~~704-382-3853~~ ~~56-2155481~~Title of each classTrading symbolswhich registered

	~~1-1232~~	~~DUKE ENERGY OHIO, INC.~~ ~~(an Ohio corporation)~~ ~~139 East Fourth Street~~ ~~Cincinnati, Ohio 45202~~ ~~704-382-3853~~ ~~31-0240030~~
~~1-3382~~Duke Energy	~~DUKE ENERGY PROGRESS,~~Common Stock, $0.001 par valueDUKNew York Stock Exchange LLC ~~(a North Carolina limited liability company)~~ ~~410 South Wilmington Street~~ ~~Raleigh, North Carolina 27601-1748~~ ~~704-382-3853~~ ~~56-0165465~~

	~~1-3543~~	~~DUKE ENERGY INDIANA, LLC~~ ~~(an Indiana limited liability company)~~ ~~1000 East Main Street~~ ~~Plainfield, Indiana 46168~~ ~~704-382-3853~~ ~~35-0594457~~
~~1-6196~~Duke Energy	~~PIEDMONT NATURAL GAS COMPANY, INC.~~5.125% Junior Subordinated Debentures due DUKHNew York Stock Exchange LLC ~~(a North Carolina corporation)~~ ~~4720 Piedmont Row Drive~~ ~~Charlotte, North Carolina 28210~~ ~~704-364-3120~~ ~~56-0556998~~



ý☒	QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934



¨☐	TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934


file number	Identification Number file number Identification Number


Duke Energy	5.625% Junior Subordinated Debentures due DUKBNew York Stock Exchange LLC


Duke Energy	Depositary Shares, each representing a 1/1,000th DUK PR ANew York Stock Exchange LLC



Duke Energy Corporation (Duke Energy)	Yesx	☒	No¨	☐	Duke Energy Florida, LLC (Duke Energy Florida)	Yesx	☒	No¨	☐
Duke Energy Carolinas, LLC (Duke Energy Carolinas)	Yesx	☒	No¨	☐	Duke Energy Ohio, Inc. (Duke Energy Ohio)	Yesx	☒	No¨	☐
Progress Energy, Inc. (Progress Energy)	Yesx	☒	No¨	☐	Duke Energy Indiana, LLC (Duke Energy Indiana)	Yesx	☒	No¨	☐
Duke Energy Progress, LLC (Duke Energy Progress)	Yesx	☒	No¨	☐	Piedmont Natural Gas Company, Inc. (Piedmont)	Yesx	☒	No¨	☐



Duke Energy	Large accelerated filerx	☒	Accelerated filer¨	☐	Non-accelerated filer¨	☐	Smaller reporting company¨	☐	Emerging growth company¨	☐
Duke Energy Carolinas	Large accelerated filer¨	☐	Accelerated filer¨	☐	Non-accelerated filerx	☒	Smaller reporting company¨	☐	Emerging growth company¨	☐
Progress Energy	Large accelerated filer¨	☐	Accelerated filer¨	☐	Non-accelerated filerx	☒	Smaller reporting company¨	☐	Emerging growth company¨	☐
Duke Energy Progress	Large accelerated filer¨	☐	Accelerated filer¨	☐	Non-accelerated filerx	☒	Smaller reporting company¨	☐	Emerging growth company¨	☐
Duke Energy Florida	Large accelerated filer¨	☐	Accelerated filer¨	☐	Non-accelerated filerx	☒	Smaller reporting company¨	☐	Emerging growth company¨	☐
Duke Energy Ohio	Large accelerated filer¨	☐	Accelerated filer¨	☐	Non-accelerated filerx	☒	Smaller reporting company¨	☐	Emerging growth company¨	☐
Duke Energy Indiana	Large accelerated filer¨	☐	Accelerated filer¨	☐	Non-accelerated filerx	☒	Smaller reporting company¨	☐	Emerging growth company¨	☐
Piedmont	Large accelerated filer¨	☐	Accelerated filer¨	☐	Non-accelerated filerx	☒	Smaller reporting company¨	☐	Emerging growth company¨	☐



Duke Energy	Yes¨	☐	Nox	☒	Duke Energy Florida	Yes¨	☐	Nox	☒
Duke Energy Carolinas	Yes¨	☐	Nox	☒	Duke Energy Ohio	Yes¨	☐	Nox	☒
Progress Energy	Yes¨	☐	Nox	☒	Duke Energy Indiana	Yes¨	☐	Nox	☒
Duke Energy Progress	Yes¨	☐	Nox	☒	Piedmont	Yes¨	Nox


☐	No
~~SECURITIES REGISTERED PURSUANT TO SECTION 12(b) OF THE ACT:~~
~~Registrant~~		~~Title of each class~~	~~Trading Symbol(s)~~	~~Name of each exchange on which registered~~
~~Duke Energy~~		~~Common Stock, $0.001 par value~~	~~DUK~~	~~New York Stock Exchange LLC~~
~~Duke Energy~~		~~5.125% Junior Subordinated Debentures due January 15, 2073~~	~~DUKH~~	~~New York Stock Exchange LLC~~
~~Duke Energy~~		~~5.625% Junior Subordinated Debentures due September 15, 2078~~	~~DUKB~~	~~New York Stock Exchange LLC~~
~~Duke Energy~~		~~Depositary Shares, each representing a 1/1,000th interest in a share of 5.75% Series A Cumulative Redeemable Perpetual Preferred Stock, par value $0.001 per share~~	~~DUK PR A~~	~~New York Stock Exchange LLC~~☒



Registrant	Description	Shares
Duke Energy	Common stock, $0.001 par value	~~728,046,950~~728,601,060


(in millions)	March 31, 2019			December 31, 2018			June 30, 2019			December 31, 2018
ASSETS
Current Assets
Cash and cash equivalents	$	377		$	442		$	336		$	442
Receivables (net of allowance for doubtful accounts of $19 at 2019 and $16 at 2018)	775			962
Receivables of VIEs (net of allowance for doubtful accounts of $56 at 2019 and $55 at 2018)	1,981			2,172
Receivables (net of allowance for doubtful accounts of $16 at 2019 and 2018)							646			962
Receivables of VIEs (net of allowance for doubtful accounts of $55 at 2019 and 2018)							2,153			2,172
Inventory	3,102			3,084			3,189			3,084
Regulatory assets (includes $52 at 2019 and 2018 related to VIEs)	1,957			2,005			1,918			2,005
Other (includes $152 at 2019 and $162 at 2018 related to VIEs)	976			1,049
Other (includes $140 at 2019 and $162 at 2018 related to VIEs)							1,267			1,049
Total current assets	9,168			9,714			9,509			9,714
Property, Plant and Equipment
Cost	139,377			134,458			141,363			134,458
Accumulated depreciation and amortization	(43,992		)	(43,126		)	(44,482		)	(43,126		)
Generation facilities to be retired, net	336			362			317			362
Net property, plant and equipment	95,721			91,694			97,198			91,694
Operating Lease Right-of-Use Assets, net	1,698			—
Other Noncurrent Assets
Goodwill	19,303			19,303			19,303			19,303
Regulatory assets (includes $1,032 at 2019 and $1,041 at 2018 related to VIEs)	13,301			13,617
Regulatory assets (includes $1,019 at 2019 and $1,041 at 2018 related to VIEs)							13,393			13,617
Nuclear decommissioning trust funds	7,374			6,720			7,621			6,720
Operating lease right-of-use assets, net							1,735			—
Investments in equity method unconsolidated affiliates	1,602			1,409			1,715			1,409
Other (includes $280 at 2019 and $261 at 2018 related to VIEs)	2,969			2,935
Other (includes $289 at 2019 and $261 at 2018 related to VIEs)							2,975			2,935
Total other noncurrent assets	44,549			43,984			46,742			43,984
Total Assets	$	151,136		$	145,392		$	153,449		$	145,392
LIABILITIES AND EQUITY
Current Liabilities
Accounts payable	$	2,538		$	3,487		$	2,512		$	3,487
Notes payable and commercial paper	3,029			3,410			3,793			3,410
Taxes accrued	470			577			521			577
Interest accrued	544			559			564			559
Current maturities of long-term debt (includes $227 at 2019 and 2018 related to VIEs)	2,501			3,406
Current maturities of long-term debt (includes $232 at 2019 and $227 at 2018 related to VIEs)							2,698			3,406
Asset retirement obligations	779			919			739			919
Regulatory liabilities	611			598			600			598
Other	1,810			2,085			2,020			2,085
Total current liabilities	12,282			15,041			13,447			15,041
Long-Term Debt (includes $4,065 at 2019 and $3,998 at 2018 related to VIEs)	53,681			51,123
Operating Lease Liabilities	1,488			—
Long-Term Debt (includes $4,070 at 2019 and $3,998 at 2018 related to VIEs)							54,342			51,123
Other Noncurrent Liabilities
Deferred income taxes	8,040			7,806			8,532			7,806
Asset retirement obligations	12,256			9,548			11,889			9,548
Regulatory liabilities	15,212			14,834			15,294			14,834
Operating lease liabilities							1,502			—
Accrued pension and other post-retirement benefit costs	974			988			959			988
Investment tax credits	571			568			569			568
Other (includes $212 at 2019 and 2018 related to VIEs)	1,587			1,650
Other (includes $222 at 2019 and $212 at 2018 related to VIEs)							1,583			1,650
Total other noncurrent liabilities	38,640			35,394			40,328			35,394
Commitments and Contingencies
Equity
Preferred stock, $0.001 par value, 40 million depositary shares authorized and outstanding at 2019	974			—			973			—
Common stock, $0.001 par value, 2 billion shares authorized; 728 million shares outstanding at 2019 and 727 million shares outstanding at 2018	1			1			1			1
Additional paid-in capital	40,823			40,795			40,885			40,795
Retained earnings	3,360			3,113			3,502			3,113
Accumulated other comprehensive loss	(128		)	(92		)	(148		)	(92		)
Total Duke Energy Corporation stockholders' equity	45,030			43,817			45,213			43,817
Noncontrolling interests	15			17			119			17
Total equity	45,045			43,834			45,332			43,834
Total Liabilities and Equity	$	151,136		$	145,392		$	153,449		$	145,392


																													Three Months Ended June 30, 2018 and 2019
											Accumulated Other Comprehensive																													Accumulated Other Comprehensive
											(Loss) Income																													(Loss) Income
														Net Unrealized						Total																							Net Unrealized						Total
											Net Gains			(Losses) Gains						Duke Energy																				Net Gains			(Losses) Gains						Duke Energy
			Common			Additional					(Losses) on			on Available-			Pension and			Corporation												Common			Additional					(Losses) on			on Available-			Pension and			Corporation
	Preferred		Stock	Common		Paid-in		Retained			Cash Flow			for-Sale-			OPEB			Stockholders'			Noncontrolling			Total			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			Stock			Shares	Stock		Capital		Earnings			Hedges			Securities			Adjustments			Equity			Interests			Equity
Balance at December 31, 2017	$	—	700	$	1	$	38,792	$	3,013		$	(10	)	$	12		$	(69	)	$	41,739		$	(2	)	$	41,737
Balance at March 31, 2018																													$	—		701	$	1	$	38,839	$	3,021		$	3		$	(4	)	$	(68	)	$	41,792		$	6		$	41,798
Net income	—		—	—		—		620			—			—			—			620			2			622			—			—	—		—		500			—			—			—			500			2			502
Other comprehensive income (loss)	—		—	—		—		—			13			(3		)	1			11			—			11
Other comprehensive (loss) income																													—			—	—		—		—			(1		)	(2		)	1			(2		)	—			(2		)
Common stock issuances, including dividend reinvestment and employee benefits	—		1	—		47		—			—			—			—			47			—			47			—			11	—		843		—			—			—			—			843			—			843
Common stock dividends	—		—	—		—		(625		)	—			—			—			(625		)	—			(625		)	—			—	—		—		(626		)	—			—			—			(626		)	—			(626		)
Distributions to noncontrolling interest in subsidiaries	—		—	—		—		—			—			—			—			—			(1		)	(1		)
Other^(a)	—		—	—		—		13			—			(13		)	—			—			7			7			—			—	—		—		(1		)	—			1			—			—			—			—
Balance at March 31, 2018	$	—	701	$	1	$	38,839	$	3,021		$	3		$	(4	)	$	(68	)	$	41,792		$	6		$	41,798
Balance at June 30, 2018																													$	—		712	$	1	$	39,682	$	2,894		$	2		$	(5	)	$	(67	)	$	42,507		$	8		$	42,515

Balance at December 31, 2018	$	—	727	$	1	$	40,795	$	3,113		$	(14	)	$	(3	)	$	(75	)	$	43,817		$	17		$	43,834
Balance at March 31, 2019																													$	974		728	$	1	$	40,823	$	3,360		$	(36	)	$	—		$	(92	)	$	45,030		$	15		$	45,045
Net income (loss)	—		—	—		—		900			—			—			—			900			(7		)	893			—			—	—		—		820			—			—			—			820			(84		)	736
Other comprehensive (loss) income	—		—	—		—		—			(16		)	4			—			(12		)	—			(12		)	—			—	—		—		—			(27		)	4			3			(20		)	—			(20		)
Preferred stock issuances, net of issuance costs^(b)	974		—	—		—		—			—			—			—			974			—			974			(1		)	—	—		—		—			—			—			—			(1		)	—			(1		)
Common stock issuances, including dividend reinvestment and employee benefits	—		1	—		28		—			—			—			—			28			—			28			—			—	—		61		—			—			—			—			61			—			61
Common stock dividends	—		—	—		—		(676		)	—			—			—			(676		)	—			(676		)	—			—	—		—		(678		)	—			—			—			(678		)	—			(678		)
Other^(c)	—		—	—		—		23			(6		)	(1		)	(17		)	(1		)	5			4
Balance at March 31, 2019	$	974	728	$	1	$	40,823	$	3,360		$	(36	)	$	—		$	(92	)	$	45,030		$	15		$	45,045
Contribution from noncontrolling interest in subsidiaries^(c)																													—			—	—		—		—			—			—			—			—			193			193
Distributions to noncontrolling interest in subsidiaries																													—			—	—		—		—			—			—			—			—			(1		)	(1		)
Other																													—			—	—		1		—			—			—			—			1			(4		)	(3		)
Balance at June 30, 2019																													$	973		728	$	1	$	40,885	$	3,502		$	(63	)	$	4		$	(89	)	$	45,213		$	119		$	45,332



	Six Months Ended June 30, 2018 and 2019
											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 December 31, 2017	$	—	700	$	1	$	38,792	$	3,013		$	(10	)	$	12		$	(69	)	$	41,739		$	(2	)	$	41,737
Net income	—		—	—		—		1,120			—			—			—			1,120			4			1,124
Other comprehensive income (loss)	—		—	—		—		—			12			(5		)	2			9			—			9
Common stock issuances, including dividend reinvestment and employee benefits	—		12	—		890		—			—			—			—			890			—			890
Common stock dividends	—		—	—		—		(1,251		)	—			—			—			(1,251		)	—			(1,251		)
Distributions to noncontrolling interest in subsidiaries	—		—	—		—		—			—			—			—			—			(1		)	(1		)
Other^(a)	—		—	—		—		12			—			(12		)	—			—			7			7
Balance at June 30, 2018	$	—	712	$	1	$	39,682	$	2,894		$	2		$	(5	)	$	(67	)	$	42,507		$	8		$	42,515

Balance at December 31, 2018	$	—	727	$	1	$	40,795	$	3,113		$	(14	)	$	(3	)	$	(75	)	$	43,817		$	17		$	43,834
Net income (loss)	—		—	—		—		1,720			—			—			—			1,720			(91		)	1,629
Other comprehensive (loss) income	—		—	—		—		—			(43		)	8			3			(32		)	—			(32		)
Preferred stock issuances, net of issuance costs^(b)	973		—	—		—		—			—			—			—			973			—			973
Common stock issuances, including dividend reinvestment and employee benefits	—		1	—		89		—			—			—			—			89			—			89
Common stock dividends	—		—	—		—		(1,354		)	—			—			—			(1,354		)	—			(1,354		)
Contributions from noncontrolling interest in subsidiaries^(c)	—		—	—		—		—			—			—			—			—			193			193
Distributions to noncontrolling interest in subsidiaries	—		—	—		—		—			—			—			—			—			(1		)	(1		)
Other^(d)	—		—	—		1		23			(6		)	(1		)	(17		)	—			1			1
Balance at June 30, 2019	$	973	728	$	1	$	40,885	$	3,502		$	(63	)	$	4		$	(89	)	$	45,213		$	119		$	45,332


(a)	Amounts in Retained Earnings and Accumulated Other Comprehensive (Loss) Income represent a cumulative-effect adjustment due to implementation of a new accounting standard related to Financial Instruments Classification and Measurement.


(b)	Duke Energy issued 40 million depositary shares of preferred stock in the first quarter of 2019.


(c)	Relates to tax equity financing activity in the Commercial Renewables segment.


										Three Months Ended June 30, 2018 and 2019
													Accumulated Other
													Comprehensive
													Loss
													Net Losses on
										Member's			Cash Flow			Total
(in millions)										Equity			Hedges			Equity
Balance at March 31, 2018										$	11,441		$	(6	)	$	11,435
Net income										117			—			117
Distributions to parent										(250		)	—			(250		)
Balance at June 30, 2018										$	11,308		$	(6	)	$	11,302

Balance at March 31, 2019										$	11,982		$	(7	)	$	11,975
Net income										301			—			301
Balance at June 30, 2019										$	12,283		$	(7	)	$	12,276

										Six Months Ended June 30, 2018 and 2019
				Accumulated Other									Accumulated Other
				Comprehensive									Comprehensive
				Loss									Loss
				Net Losses on									Net Losses on
	Member's			Cash Flow			Total			Member's			Cash Flow			Total
(in millions)	Equity			Hedges			Equity			Equity			Hedges			Equity
Balance at December 31, 2017	$	11,368		$	(7	)	$	11,361		$	11,368		$	(7	)	$	11,361
Net income	323			—			323			440			—			440
Other comprehensive income	—			1			1			—			1			1
Distributions to parent	(250		)	—			(250		)	(500		)	—			(500		)
Balance at March 31, 2018	$	11,441		$	(6	)	$	11,435
Balance at June 30, 2018										$	11,308		$	(6	)	$	11,302

Balance at December 31, 2018	$	11,689		$	(6	)	$	11,683		$	11,689		$	(6	)	$	11,683
Net income	293			—			293			594			—			594
Other	—			(1		)	(1		)	—			(1		)	(1		)
Balance at March 31, 2019	$	11,982		$	(7	)	$	11,975
Balance at June 30, 2019										$	12,283		$	(7	)	$	12,276


																								Three Months Ended June 30, 2018 and 2019
						Accumulated Other Comprehensive (Loss) Income																							Accumulated Other Comprehensive (Loss) Income
									Net Unrealized						Total Progress																	Net Unrealized						Total Progress
	Additional					Net Losses on			Gains (losses) on			Pension and			Energy, Inc.									Additional					Net Losses on			Gains (Losses) on			Pension and			Energy, Inc.
	Paid-in			Retained		Cash Flow			Available-for-			OPEB			Stockholders'			Noncontrolling			Total			Paid-in		Retained			Cash Flow			Available-for-			OPEB			Stockholders'		Noncontrolling			Total
(in millions)	Capital			Earnings		Hedges			Sale Securities			Adjustments			Equity			Interests			Equity			Capital		Earnings			Hedges			Sale Securities			Adjustments			Equity		Interests			Equity
Balance at March 31, 2018																								$	9,142	$	4,591		$	(16	)	$	(1	)	$	(12	)	$	13,704	$	(1	)	$	13,703
Net income																								—		265			—			—			—			265		2			267
Other comprehensive income (loss)																								—		—			1			(1		)	2			2		—			2
Distributions to noncontrolling interests																								—		—			—			—			—			—		(1		)	(1		)
Other^(a)																								1		(1		)	—			1			—			1		—			1
Balance at June 30, 2018																								$	9,143	$	4,855		$	(15	)	$	(1	)	$	(10	)	$	13,972	$	—		$	13,972

Balance at March 31, 2019																								$	9,143	$	5,386		$	(14	)	$	(1	)	$	(8	)	$	14,506	$	2		$	14,508
Net income																								—		328			—			—			—			328		1			329
Other comprehensive income																								—		—			1			1			1			3		—			3
Other																								—		1			—			—			(1		)	—		(1		)	(1		)
Balance at June 30, 2019																								$	9,143	$	5,715		$	(13	)	$	—		$	(8	)	$	14,837	$	2		$	14,839

																								Six Months Ended June 30, 2018 and 2019
																													Accumulated Other Comprehensive (Loss) Income
																																Net Unrealized						Total Progress
																								Additional					Net 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, 2017	$	9,143		$	4,350	$	(18	)	$	5		$	(12	)	$	13,468		$	(3	)	$	13,465		$	9,143	$	4,350		$	(18	)	$	5		$	(12	)	$	13,468	$	(3	)	$	13,465
Net income	—			235		—			—			—			235			2			237			—		500			—			—			—			500		4			504
Other comprehensive income	—			—		2			—			—			2			—			2
Other comprehensive income (loss)																								—		—			3			(1		)	2			4		—			4
Distributions to noncontrolling interests																								—		—			—			—			—			—		(1		)	(1		)
Other^(a)	(1		)	6		—			(6		)	—			(1		)	—			(1		)	—		5			—			(5		)	—			—		—			—
Balance at March 31, 2018	$	9,142		$	4,591	$	(16	)	$	(1	)	$	(12	)	$	13,704		$	(1	)	$	13,703
Balance at June 30, 2018																								$	9,143	$	4,855		$	(15	)	$	(1	)	$	(10	)	$	13,972	$	—		$	13,972

Balance at December 31, 2018	$	9,143		$	5,131	$	(12	)	$	(1	)	$	(7	)	$	14,254		$	3		$	14,257		$	9,143	$	5,131		$	(12	)	$	(1	)	$	(7	)	$	14,254	$	3		$	14,257
Net income	—			249		—			—			—			249			(1		)	248			—		577			—			—			—			577		—			577
Other comprehensive income	—			—		2			—			1			3			—			3			—		—			3			1			2			6		—			6
Other^(b)	—			6		(4		)	—			(2		)	—			—			—			—		7			(4		)	—			(3		)	—		(1		)	(1		)
Balance at March 31, 2019	$	9,143		$	5,386	$	(14	)	$	(1	)	$	(8	)	$	14,506		$	2		$	14,508
Balance at June 30, 2019																								$	9,143	$	5,715		$	(13	)	$	—		$	(8	)	$	14,837	$	2		$	14,839


			Three Months Ended
			June 30, 2018 and 2019
			Member's
(in millions)			Equity
Balance at March 31, 2018			$	8,126
Net income			139
Balance at June 30, 2018			$	8,265

Balance at March 31, 2019			$	8,644
Net income			169
Balance at June 30, 2019			$	8,813

			Six Months Ended
			June 30, 2018 and 2019
	Member's		Member's
(in millions)	Equity		Equity
Balance at December 31, 2017	$	7,949	$	7,949
Net income	177		316
Balance at March 31, 2018	$	8,126
Balance at June 30, 2018			$	8,265

Balance at December 31, 2018	$	8,441	$	8,441
Net income	203		372
Balance at March 31, 2019	$	8,644
Balance at June 30, 2019			$	8,813


								Three Months Ended June 30, 2018 and 2019
											Accumulated
											Other
											Comprehensive
											Income (Loss)
											Net Unrealized
											Gains (Losses) on
								Member's			Available-for-Sale			Total
(in millions)								Equity			Securities			Equity
Balance at March 31, 2018								$	5,723		$	(2	)	$	5,721
Net income								168			—			168
Other comprehensive loss								—			(1		)	(1		)
Other^(a)								(1		)	1			—
Balance at June 30, 2018								$	5,890		$	(2	)	$	5,888

Balance at March 31, 2019								$	6,193		$	(1	)	$	6,192
Net income								201			—			201
Balance at June 30, 2019								$	6,394		$	(1	)	$	6,393

								Six Months Ended June 30, 2018 and 2019
			Accumulated								Accumulated
			Other								Other
			Comprehensive								Comprehensive
			Income (Loss)								Income (Loss)
			Net Unrealized								Net Unrealized
			Gains (Losses) on								Gains (Losses) on
	Member's		Available-for-Sale			Total		Member's			Available-for-Sale			Total
(in millions)	Equity		Securities			Equity		Equity			Securities			Equity
Balance at December 31, 2017	$	5,614	$	4		$	5,618	$	5,614		$	4		$	5,618
Net income	103		—			103		271			—			271
Other comprehensive loss								—			(1		)	(1		)
Other^(a)	6		(6		)	—		5			(5		)	—
Balance at March 31, 2018	$	5,723	$	(2	)	$	5,721
Balance at June 30, 2018								$	5,890		$	(2	)	$	5,888

Balance at December 31, 2018	$	6,097	$	(2	)	$	6,095	$	6,097		$	(2	)	$	6,095
Net income	96		—			96		297			—			297
Other comprehensive income	—		1			1		—			1			1
Balance at March 31, 2019	$	6,193	$	(1	)	$	6,192
Balance at June 30, 2019								$	6,394		$	(1	)	$	6,393


(a)	Amounts in Member's Equity and Accumulated Other Comprehensive Income (Loss) represent a cumulative-effect adjustment due to implementation of a new accounting standard related to Financial Instruments Classification and Measurement.


(a)	Represents a non-cash settlement through equity of an intercompany payable from Duke Energy Ohio to its parent.



~~FINANCIAL STATEMENTS~~	~~ORGANIZATION AND BASIS OF PRESENTATION~~



Practical Expedient	Description
Package of transition practical expedients (for leases commenced prior to adoption date and must be adopted as a package)	Do not need to 1) reassess whether any expired or existing contracts are/or contain leases, 2) reassess the lease classification for any expired or existing leases and 3) reassess initial direct costs for any existing leases.
Short-term lease expedient (elect by class of underlying asset)	Elect as an accounting policy to not apply the recognition requirements to short-term leases by asset class.
Lease and non-lease components (elect by class of underlying asset)	Elect as an accounting policy to not separate non-lease components from lease components and instead account for each lease and associated non-lease component as a single lease component by asset class.
Hindsight expedient (when determining lease term)	Elect to use hindsight to determine the lease term.
Existing and expired land easements not previously accounted for as leases	Elect to not evaluate existing or expired easements under the new guidance and carry forward current accounting treatment.
Comparative reporting requirements for initial adoption	Elect to apply transition requirements at adoption date, recognize cumulative effect adjustment to retained earnings in period of adoption and not apply the new requirements to comparative periods, including disclosures.
Lessor expedient (elect by class of underlying asset)	Elect as an accounting policy to aggregate non-lease components with the related lease component when specified conditions are met by asset class. Account for the combined component based on its predominant characteristic (revenue or operating lease).



	Three Months Ended March 31, 2019
	Electric		Gas				Total
	Utilities and		Utilities and		Commercial		Reportable
(in millions)	Infrastructure		Infrastructure		Renewables		Segments		Other			Eliminations			Total
Unaffiliated revenues	$	5,321	$	732	$	106	$	6,159	$	4		$	—		$	6,163
Intersegment revenues	8		24		—		32		17			(49		)	—
Total revenues	$	5,329	$	756	$	106	$	6,191	$	21		$	(49	)	$	6,163
Segment income (loss)	$	750	$	226	$	13	$	989	$	(89	)	$	—		$	900
Add back noncontrolling interest component															(7		)
Net income															$	893
Segment assets	$	130,406	$	12,639	$	4,378	$	147,423	$	3,536		$	177		$	151,136


(a)	Includes the allocation of losses to noncontrolling tax equity members. See Note 1 for additional information.


(b)	Electric Utilities and Infrastructure includes regulatory and legislative impairment charges related to rate case orders, settlements or other actions of regulators or legislative bodies. See Note 3 for additional information.


~~(b)~~(c)	Other includes costs to achieve the Piedmont acquisition.


(d)	Gas Utilities and Infrastructure includes an impairment of the investment in Constitution. See Note 3 for additional information.


~~(c)~~(e)	Other includes the loss on the sale of Beckjord described below ~~costs to achieve the Piedmont acquisition~~ and a valuation allowance recorded against the AMT credits.