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DUK Duke Energy

Filed: 5 Aug 21, 12:36pm
0001326160--12-312021Q2false0000030371--12-310001094093--12-310000017797--12-310000037637--12-310000020290--12-310000081020--12-310000078460--12-31http://fasb.org/us-gaap/2021-01-31#AccountingStandardsUpdate201613MemberP3Y611110611110611110611110611110

UNITED STATES SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-Q
(Mark One)
QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended June 30, 2021
OR
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the transition period from _________to_________
Commission file numberRegistrant, State of Incorporation or Organization,
Address of Principal Executive Offices and Telephone Number
IRS Employer Identification Number
duk-20210630_g1.jpg
1-32853DUKE ENERGY CORPORATION20-2777218
(a Delaware corporation)
550 South Tryon Street
Charlotte, North Carolina 28202-1803
704-382-3853
1-4928DUKE ENERGY CAROLINAS, LLC56-0205520
(a North Carolina limited liability company)
526 South Church Street
Charlotte, North Carolina 28202-1803
704-382-3853
1-15929PROGRESS ENERGY, INC.56-2155481
(a North Carolina corporation)
410 South Wilmington Street
Raleigh, North Carolina 27601-1748
704-382-3853
1-3382DUKE ENERGY PROGRESS, LLC56-0165465
(a North Carolina limited liability company)
410 South Wilmington Street
Raleigh, North Carolina 27601-1748
704-382-3853
1-3274DUKE ENERGY FLORIDA, LLC59-0247770
(a Florida limited liability company)
299 First Avenue North
St. Petersburg, Florida 33701
704-382-3853
1-1232DUKE ENERGY OHIO, INC.31-0240030
(an Ohio corporation)
139 East Fourth Street
Cincinnati, Ohio 45202
704-382-3853
1-3543DUKE ENERGY INDIANA, LLC35-0594457
(an Indiana limited liability company)
1000 East Main Street
Plainfield, Indiana 46168
704-382-3853
1-6196PIEDMONT NATURAL GAS COMPANY, INC.56-0556998
(a North Carolina corporation)
4720 Piedmont Row Drive
Charlotte, North Carolina 28210
704-364-3120





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

Duke Energy    5.125% Junior Subordinated Debentures due    DUKH    New York Stock Exchange LLC
January 15, 2073
Duke Energy    5.625% Junior Subordinated Debentures due    DUKB    New York Stock Exchange LLC
September 15, 2078
Duke Energy    Depositary Shares, each representing a 1/1,000th    DUK PR A    New York Stock Exchange LLC
interest in a share of 5.75% Series A Cumulative
Redeemable Perpetual Preferred Stock, par value
$0.001 per share
Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.
Duke Energy Corporation (Duke Energy)YesNoDuke Energy Florida, LLC (Duke Energy Florida)YesNo
Duke Energy Carolinas, LLC (Duke Energy Carolinas)YesNoDuke Energy Ohio, Inc. (Duke Energy Ohio)YesNo
Progress Energy, Inc. (Progress Energy)YesNoDuke Energy Indiana, LLC (Duke Energy Indiana)YesNo
Duke Energy Progress, LLC (Duke Energy Progress)YesNoPiedmont Natural Gas Company, Inc. (Piedmont)YesNo
Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files).
Duke EnergyYesNoDuke Energy FloridaYesNo
Duke Energy CarolinasYesNoDuke Energy OhioYesNo
Progress EnergyYesNoDuke Energy IndianaYesNo
Duke Energy ProgressYesNoPiedmontYesNo
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company” and "emerging growth company" in Rule 12b-2 of the Exchange Act.
Duke EnergyLarge Accelerated FilerAccelerated filerNon-accelerated FilerSmaller reporting companyEmerging growth company
Duke Energy CarolinasLarge Accelerated FilerAccelerated filerNon-accelerated FilerSmaller reporting companyEmerging growth company
Progress EnergyLarge Accelerated FilerAccelerated filerNon-accelerated FilerSmaller reporting companyEmerging growth company
Duke Energy ProgressLarge Accelerated FilerAccelerated filerNon-accelerated FilerSmaller reporting companyEmerging growth company
Duke Energy FloridaLarge Accelerated FilerAccelerated filerNon-accelerated FilerSmaller reporting companyEmerging growth company
Duke Energy OhioLarge Accelerated FilerAccelerated filerNon-accelerated FilerSmaller reporting companyEmerging growth company
Duke Energy IndianaLarge Accelerated FilerAccelerated filerNon-accelerated FilerSmaller reporting companyEmerging growth company
PiedmontLarge Accelerated FilerAccelerated filerNon-accelerated FilerSmaller reporting companyEmerging growth company
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ¨
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).
Duke EnergyYesNoDuke Energy FloridaYesNo
Duke Energy CarolinasYesNoDuke Energy OhioYesNo
Progress EnergyYesNoDuke Energy IndianaYesNo
Duke Energy ProgressYesNoPiedmontYesNo



Number of shares of common stock outstanding at July 31, 2021:
RegistrantDescriptionShares
Duke EnergyCommon stock, $0.001 par value769,337,598
This combined Form 10-Q is filed separately by eight registrants: Duke Energy, Duke Energy Carolinas, Progress Energy, Duke Energy Progress, Duke Energy Florida, Duke Energy Ohio, Duke Energy Indiana and Piedmont (collectively the Duke Energy Registrants). Information contained herein relating to any individual registrant is filed by such registrant solely on its own behalf. Each registrant makes no representation as to information relating exclusively to the other registrants.
Duke Energy Carolinas, Progress Energy, Duke Energy Progress, Duke Energy Florida, Duke Energy Ohio, Duke Energy Indiana and Piedmont meet the conditions set forth in General Instructions H(1)(a) and (b) of Form 10-Q and are therefore filing this form with the reduced disclosure format specified in General Instructions H(2) of Form 10-Q.



TABLE OF CONTENTS
PART I. FINANCIAL INFORMATION
Piedmont Natural Gas Company, Inc. Financial Statements
Note 1 – Organization and Basis of Presentation
Note 2 – Business Segments
Note 3 – Regulatory Matters
Note 4 – Commitments and Contingencies
Note 5 – Debt and Credit Facilities
Note 6 – Goodwill
Note 7 – Related Party Transactions
Note 8 – Derivatives and Hedging
Note 9 – Investments in Debt and Equity Securities
Note 10 – Fair Value Measurements
Note 11 – Variable Interest Entities
Note 12 – Revenue
Note 13 – Stockholders' Equity
Note 14 – Employee Benefit Plans
Note 15 – Income Taxes
Note 16 – Subsequent Events
PART II. OTHER INFORMATION



FORWARD-LOOKING STATEMENTS

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


FORWARD-LOOKING STATEMENTS

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


GLOSSARY OF TERMS

Glossary of Terms 
The following terms or acronyms used in this Form 10-Q are defined below:
Term or AcronymDefinition
2013 SettlementRevised and Restated Stipulation and Settlement Agreement approved in November 2013 among Duke Energy Florida, the Florida Office of Public Counsel and other customer representatives
2017 SettlementSecond Revised and Restated Settlement Agreement in 2017 among Duke Energy Florida, the Florida Office of Public Counsel and other customer representatives, which replaces and supplants the 2013 Settlement
2021 SettlementSettlement Agreement in 2021 among Duke Energy Florida, the Florida Office of Public Counsel, the Florida Industrial Power Users Group, White Springs Agricultural Chemicals, Inc. d/b/a PSC Phosphate and NUCOR Steel Florida, Inc.
ACPAtlantic Coast Pipeline, LLC, a limited liability company owned by Dominion Energy, Inc. and Duke Energy
ACP pipelineThe approximately 600-mile canceled interstate natural gas pipeline
AFSAvailable for Sale
AFUDCAllowance for funds used during construction
AROAsset retirement obligations
BisonBison Insurance Company Limited
BoardDuke Energy Board of Directors
CCRCoal Combustion Residuals
Coal Ash ActNorth Carolina Coal Ash Management Act of 2014
the companyDuke Energy Corporation and its subsidiaries
COVID-19Coronavirus Disease 2019
CRCCinergy Receivables Company, LLC
Crystal River Unit 3Crystal River Unit 3 Nuclear Plant
DEFPFDuke Energy Florida Project Finance, LLC
DEFRDuke Energy Florida Receivables, LLC
DEPRDuke Energy Progress Receivables, LLC
DERFDuke Energy Receivables Finance Company, LLC
Duke EnergyDuke Energy Corporation (collectively with its subsidiaries)
Duke Energy OhioDuke Energy Ohio, Inc.
Duke Energy ProgressDuke Energy Progress, LLC
Duke Energy CarolinasDuke Energy Carolinas, LLC
Duke Energy FloridaDuke Energy Florida, LLC
Duke Energy IndianaDuke Energy Indiana, LLC
Duke Energy KentuckyDuke Energy Kentucky, Inc.
Duke Energy RegistrantsDuke Energy, Duke Energy Carolinas, Progress Energy, Duke Energy Progress, Duke Energy Florida, Duke Energy Ohio, Duke Energy Indiana and Piedmont
EDITExcess deferred income tax
ElliottElliott Investment Management, L.P.
EPSEarnings Per Share
ETREffective tax rate
Exchange ActSecurities Exchange Act of 1934
FERCFederal Energy Regulatory Commission
FPSCFlorida Public Service Commission
FTRFinancial transmission rights
GAAPGenerally accepted accounting principles in the U.S.


GLOSSARY OF TERMS

GAAP Reported EarningsNet Income Available to Duke Energy Corporation Common Stockholders
GAAP Reported EPSBasic Earnings Per Share Available to Duke Energy Corporation common stockholders
GICGIC Private Limited
GWhGigawatt-hours
IMRIntegrity Management Rider
IRSInternal Revenue Service
Investment TrustsNDTF investments and grantor trusts of Duke Energy Progress, Duke Energy Florida and Duke Energy Indiana
IURCIndiana Utility Regulatory Commission
KPSCKentucky Public Service Commission
LLCLimited Liability Company
MGPManufactured gas plant
MWMegawatt
MWhMegawatt-hour
NCUCNorth Carolina Utilities Commission
NDTFNuclear decommissioning trust funds
NPNSNormal purchase/normal sale
OPEBOther Post-Retirement Benefit Obligations
OVECOhio Valley Electric Corporation
PiedmontPiedmont Natural Gas Company, Inc.
PJMPennsylvania-New Jersey-Maryland Interconnection
PPAPurchase Power Agreement
Progress EnergyProgress Energy, Inc.
PSCSCPublic Service Commission of South Carolina
PUCOPublic Utilities Commission of Ohio
RTORegional Transmission Organization
Subsidiary RegistrantsDuke Energy Carolinas, Progress Energy, Duke Energy Progress, Duke Energy Florida, Duke Energy Ohio, Duke Energy Indiana and Piedmont
the Tax ActTax Cuts and Jobs Act
TPUCTennessee Public Utility Commission
U.S.United States
VIEVariable Interest Entity
WACCWeighted Average Cost of Capital



FINANCIAL STATEMENTS

ITEM 1. FINANCIAL STATEMENTS

DUKE ENERGY CORPORATION
Condensed Consolidated Statements of Operations
(Unaudited)
Three Months EndedSix Months Ended
June 30,June 30,
(in millions, except per share amounts)2021202020212020
Operating Revenues
Regulated electric$5,258 $4,963 $10,477 $10,087 
Regulated natural gas302 263 1,051 901 
Nonregulated electric and other198 195 380 382 
Total operating revenues5,758 5,421 11,908 11,370 
Operating Expenses
Fuel used in electric generation and purchased power1,415 1,349 2,858 2,796 
Cost of natural gas79 59 355 258 
Operation, maintenance and other1,410 1,353 2,812 2,692 
Depreciation and amortization1,207 1,150 2,433 2,280 
Property and other taxes349 334 702 679 
Impairment of assets and other charges131 131 
Total operating expenses4,591 4,251 9,291 8,713 
Gains on Sales of Other Assets and Other, net2 2 
Operating Income1,169 1,177 2,619 2,665 
Other Income and Expenses
Equity in earnings (losses) of unconsolidated affiliates9 (1,968)(8)(1,924)
Other income and expenses, net128 137 255 183 
Total other income and expenses137 (1,831)247 (1,741)
Interest Expense572 554 1,107 1,105 
Income (Loss) Before Income Taxes734 (1,208)1,759 (181)
Income Tax Expense (Benefit)36 (316)120 (179)
Net Income (Loss)698 (892)1,639 (2)
Add: Net Loss Attributable to Noncontrolling Interests67 90 118 138 
Net Income (Loss) Attributable to Duke Energy Corporation765 (802)1,757 136 
Less: Preferred Dividends14 15 53 54 
Net Income (Loss) Available to Duke Energy Corporation Common Stockholders$751 $(817)$1,704 $82 
Earnings (Loss) Per Share – Basic and Diluted
Net income (loss) available to Duke Energy Corporation common stockholders
Basic and Diluted$0.96 $(1.13)$2.21 $0.11 
Weighted Average Shares Outstanding
Basic769 735 769 734 
Diluted769 735 769 735 

See Notes to Condensed Consolidated Financial Statements
9

FINANCIAL STATEMENTS
DUKE ENERGY CORPORATION
Condensed Consolidated Statements of Comprehensive Income
(Unaudited)
Three Months EndedSix Months Ended
June 30,June 30,
(in millions)2021202020212020
Net Income (Loss)$698 $(892)$1,639 $(2)
Other Comprehensive Income (Loss), net of tax(a)
Pension and OPEB adjustments (1)2 — 
Net unrealized (losses) gains on cash flow hedges(97)(68)(76)
Reclassification into earnings from cash flow hedges4 7 
Unrealized gains (losses) on available-for-sale securities4 (4)
Other Comprehensive (Loss) Income, net of tax(89)12 (63)(65)
Comprehensive Income (Loss)609 (880)1,576 (67)
Add: Comprehensive Loss Attributable to Noncontrolling Interests68 88 112 150 
Comprehensive Income (Loss) Attributable to Duke Energy677 (792)1,688 83 
Less: Preferred Dividends14 15 53 54 
Comprehensive Income (Loss) Available to Duke Energy Corporation Common Stockholders$663 $(807)$1,635 $29 
(a)Net of income tax impacts of approximately $27 million for the three months ended June 30, 2021, and $19 million and $20 million for the six months ended June 30, 2021, and 2020, respectively. All other periods presented include immaterial income tax impacts.
See Notes to Condensed Consolidated Financial Statements
10

FINANCIAL STATEMENTS
DUKE ENERGY CORPORATION
Condensed Consolidated Balance Sheets
(Unaudited)
(in millions)June 30, 2021December 31, 2020
ASSETS
Current Assets
Cash and cash equivalents$367 $259 
Receivables (net of allowance for doubtful accounts of $45 at 2021 and $29 at 2020)868 1,009 
Receivables of VIEs (net of allowance for doubtful accounts of $78 at 2021 and $117 at 2020)2,220 2,144 
Inventory3,015 3,167 
Regulatory assets (includes $54 at 2021 and $53 at 2020 related to VIEs)1,793 1,641 
Other (includes $356 at 2021 and $296 at 2020 related to VIEs)722 462 
Total current assets8,985 8,682 
Property, Plant and Equipment
Cost158,272 155,580 
Accumulated depreciation and amortization(49,752)(48,827)
Facilities to be retired, net121 29 
Net property, plant and equipment108,641 106,782 
Other Noncurrent Assets
Goodwill19,303 19,303 
Regulatory assets (includes $914 at 2021 and $937 at 2020 related to VIEs)12,485 12,421 
Nuclear decommissioning trust funds9,886 9,114 
Operating lease right-of-use assets, net1,495 1,524 
Investments in equity method unconsolidated affiliates938 961 
Other (includes $89 at 2021 and $81 at 2020 related to VIEs)3,652 3,601 
Total other noncurrent assets47,759 46,924 
Total Assets$165,385 $162,388 
LIABILITIES AND EQUITY
Current Liabilities
Accounts payable$2,716 $3,144 
Notes payable and commercial paper3,296 2,873 
Taxes accrued692 482 
Interest accrued537 537 
Current maturities of long-term debt (includes $219 at 2021 and $472 at 2020 related to VIEs)4,976 4,238 
Asset retirement obligations691 718 
Regulatory liabilities1,309 1,377 
Other1,994 2,936 
Total current liabilities16,211 16,305 
Long-Term Debt (includes $3,796 at 2021 and $3,535 at 2020 related to VIEs)57,410 55,625 
Other Noncurrent Liabilities
Deferred income taxes9,644 9,244 
Asset retirement obligations12,272 12,286 
Regulatory liabilities15,414 15,029 
Operating lease liabilities1,315 1,340 
Accrued pension and other post-retirement benefit costs995 969 
Investment tax credits770 687 
Other (includes $352 at 2021 and $316 at 2020 related to VIEs)1,809 1,719 
Total other noncurrent liabilities42,219 41,274 
Commitments and Contingencies00
Equity
Preferred stock, Series A, $0.001 par value, 40 million depositary shares authorized and outstanding at 2021 and 2020973 973 
Preferred stock, Series B, $0.001 par value, 1 million shares authorized and outstanding at 2021 and 2020989 989 
Common stock, $0.001 par value, 2 billion shares authorized; 769 million shares outstanding at 2021 and 20201 
Additional paid-in capital43,788 43,767 
Retained earnings2,687 2,471 
Accumulated other comprehensive loss(306)(237)
Total Duke Energy Corporation stockholders' equity48,132 47,964 
Noncontrolling interests1,413 1,220 
Total equity49,545 49,184 
Total Liabilities and Equity$165,385 $162,388 

See Notes to Condensed Consolidated Financial Statements
11

FINANCIAL STATEMENTS
DUKE ENERGY CORPORATION
Condensed Consolidated Statements of Cash Flows
(Unaudited)
Six Months Ended
June 30,
(in millions)20212020
CASH FLOWS FROM OPERATING ACTIVITIES
Net income (loss)$1,639 $(2)
Adjustments to reconcile net income (loss) to net cash provided by operating activities:
Depreciation, amortization and accretion (including amortization of nuclear fuel)2,753 2,651 
Equity in losses of unconsolidated affiliates8 1,924 
Equity component of AFUDC(83)(76)
Impairment of assets and other charges131 
Deferred income taxes119 105 
Payments for asset retirement obligations(263)(287)
Provision for rate refunds(13)(12)
(Increase) decrease in
Net realized and unrealized mark-to-market and hedging transactions15 (24)
Receivables85 281 
Inventory153 (56)
Other current assets(297)(124)
Increase (decrease) in
Accounts payable(297)(638)
Taxes accrued219 273 
Other current liabilities(326)(344)
Other assets77 (201)
Other liabilities(47)(121)
Net cash provided by operating activities3,873 3,357 
CASH FLOWS FROM INVESTING ACTIVITIES
Capital expenditures(4,636)(5,103)
Contributions to equity method investments(21)(164)
Purchases of debt and equity securities(3,182)(3,818)
Proceeds from sales and maturities of debt and equity securities3,217 3,755 
Disbursements to canceled equity method investments(855)— 
Other(137)(141)
Net cash used in investing activities(5,614)(5,471)
CASH FLOWS FROM FINANCING ACTIVITIES
Proceeds from the:
Issuance of long-term debt4,627 3,788 
Issuance of common stock5 57 
Payments for the redemption of long-term debt(2,002)(1,951)
Proceeds from the issuance of short-term debt with original maturities greater than 90 days75 1,866 
Payments for the redemption of short-term debt with original maturities greater than 90 days(959)(113)
Notes payable and commercial paper1,299 (129)
Contributions from noncontrolling interests318 163 
Dividends paid(1,541)(1,391)
Other(72)(108)
Net cash provided by financing activities1,750 2,182 
Net increase in cash, cash equivalents and restricted cash9 68 
Cash, cash equivalents and restricted cash at beginning of period556 573 
Cash, cash equivalents and restricted cash at end of period$565 $641 
Supplemental Disclosures:
Significant non-cash transactions:
Accrued capital expenditures$990 $945 
Non-cash dividends 54 

See Notes to Condensed Consolidated Financial Statements
12

FINANCIAL STATEMENTS
DUKE ENERGY CORPORATION
Condensed Consolidated Statements of Changes in Equity
(Unaudited)

Three Months Ended June 30, 2020 and 2021
Accumulated Other Comprehensive
 (Loss) Income
Net UnrealizedTotal
Net Gains(Losses) GainsDuke Energy
CommonAdditional(Losses) onon Available-Pension andCorporation
PreferredStockCommonPaid-inRetainedCash Flowfor-Sale-OPEBStockholders'NoncontrollingTotal
(in millions)StockSharesStockCapitalEarningsHedgesSecuritiesAdjustmentsEquityInterestsEquity
Balance at March 31, 2020$1,962 735 $$40,930 $4,221 $(116)$$(81)$46,921 $1,162 $48,083 
Net income (loss)— — — — (817)— — — (817)(90)(907)
Other comprehensive income (loss)— — — — — (1)10 12 
Common stock issuances, including dividend reinvestment and employee benefits— — — 66 — — — — 66 — 66 
Common stock dividends— — — — (696)— — — (696)— (696)
Contribution from noncontrolling interests, net of transaction costs(a)
— — — — — — — — — 60 60 
Distributions to noncontrolling interest in subsidiaries— — — — — — — — — (7)(7)
Other— — — (1)— — — — — — 
Balance at June 30, 2020$1,962 $735 $$40,997 $2,707 $(111)$10 $(82)$45,484 $1,127 $46,611 
Balance at March 31, 2021$1,962 769 $$43,761 $2,680 $(142)$(2)$(74)$48,186 $1,472 $49,658 
Net income (loss)    751    751 (67)684 
Other comprehensive (loss) income     (92)4  (88)(1)(89)
Common stock issuances, including dividend reinvestment and employee benefits   26     26  26 
Common stock dividends    (744)   (744) (744)
Contribution from noncontrolling interests, net of transaction costs(a)
         15 15 
Distributions to noncontrolling interest in subsidiaries         (5)(5)
Other   1     1 (1) 
Balance at June 30, 2021$1,962 $769 $1 $43,788 $2,687 $(234)$2 $(74)$48,132 $1,413 $49,545 

See Notes to Condensed Consolidated Financial Statements
13

FINANCIAL STATEMENTS



DUKE ENERGY CORPORATION
Condensed Consolidated Statements of Changes in Equity
(Unaudited)
Six Months Ended June 30, 2020 and 2021
Accumulated Other Comprehensive
 (Loss) Income
Net UnrealizedTotal
Net GainsGains (Losses)Duke Energy
CommonAdditional(Losses) onon Available-Pension andCorporation
PreferredStockCommonPaid-inRetainedCash Flowfor-Sale-OPEBStockholders'NoncontrollingTotal
(in millions)StockSharesStockCapitalEarningsHedgesSecuritiesAdjustmentsEquityInterestsEquity
Balance at December 31, 2019$1,962 733 $$40,881 $4,108 $(51)$$(82)$46,822 $1,129 $47,951 
Net income (loss)— — — — 82 — — — 82 (138)(56)
Other comprehensive (loss) income— — — — — (60)— (53)(12)(65)
Common stock issuances, including dividend reinvestment and employee benefits— — 116 — — — — 116 — 116 
Common stock dividends— — — — (1,391)— — — (1,391)— (1,391)
Contributions from noncontrolling interests, net of transaction costs(a)
— — — — — — — — — 163 163 
Distributions to noncontrolling interest in subsidiaries— — — — — — — — — (14)(14)
Other(b)
— — — — (92)— — — (92)(1)(93)
Balance at June 30, 2020$1,962 735 $$40,997 $2,707 $(111)$10 $(82)$45,484 $1,127 $46,611 
Balance at December 31, 2020$1,962 769 $$43,767 $2,471 $(167)$$(76)$47,964 $1,220 $49,184 
Net income (loss)    1,704    1,704 (118)1,586 
Other comprehensive (loss) income     (67)(4)2 (69)6 (63)
Common stock issuances, including dividend reinvestment and employee benefits   23     23  23 
Common stock dividends    (1,488)   (1,488) (1,488)
Contributions from noncontrolling interests, net of transaction costs(a)
   (3)    (3)318 315 
Distributions to noncontrolling interest in subsidiaries         (12)(12)
Other   1     1 (1) 
Balance at June 30, 2021$1,962 769 $1 $43,788 $2,687 $(234)$2 $(74)$48,132 $1,413 $49,545 
(a)    Relates to tax equity financing activity in the Commercial Renewables segment.
(b)    Amounts in Retained earnings primarily represent impacts due to implementation of a new accounting standard related to Current Estimated Credit Losses. See Note 1 for additional discussion.
See Notes to Condensed Consolidated Financial Statements
14

FINANCIAL STATEMENTS

DUKE ENERGY CAROLINAS, LLC
Condensed Consolidated Statements of Operations and Comprehensive Income
(Unaudited)
Three Months EndedSix Months Ended
June 30,June 30,
(in millions)2021202020212020
Operating Revenues$1,610 $1,610 $3,326 $3,358 
Operating Expenses
Fuel used in electric generation and purchased power344 376 766 829 
Operation, maintenance and other435 430 876 816 
Depreciation and amortization363 375 722 718 
Property and other taxes74 75 157 156 
Impairment of assets and other charges75 — 75 
Total operating expenses1,291 1,256 2,596 2,521 
Gains (Losses) on Sales of Other Assets and Other, net2 (1)2 — 
Operating Income321 353 732 837 
Other Income and Expenses, net44 43 92 86 
Interest Expense139 125 263 248 
Income Before Income Taxes226 271 561 675 
Income Tax Expense1 37 24 102 
Net Income and Comprehensive Income$225 $234 $537 $573 

See Notes to Condensed Consolidated Financial Statements
15

FINANCIAL STATEMENTS
DUKE ENERGY CAROLINAS, LLC
Condensed Consolidated Balance Sheets
(Unaudited)
(in millions)June 30, 2021December 31, 2020
ASSETS
Current Assets
Cash and cash equivalents$36 $21 
Receivables (net of allowance for doubtful accounts of $2 at 2021 and $1 at 2020)180 247 
Receivables of VIEs (net of allowance for doubtful accounts of $40 at 2021 and $22 at 2020)769 696 
Receivables from affiliated companies111 124 
Inventory1,013 1,010 
Regulatory assets458 473 
Other88 20 
Total current assets2,655 2,591 
Property, Plant and Equipment
Cost51,220 50,640 
Accumulated depreciation and amortization(17,709)(17,453)
Facilities to be retired, net93 — 
Net property, plant and equipment33,604 33,187 
Other Noncurrent Assets
Regulatory assets2,970 2,996 
Nuclear decommissioning trust funds5,446 4,977 
Operating lease right-of-use assets, net100 110 
Other1,238 1,187 
Total other noncurrent assets9,754 9,270 
Total Assets$46,013 $45,048 
LIABILITIES AND EQUITY
Current Liabilities
Accounts payable$675 $1,000 
Accounts payable to affiliated companies195 199 
Notes payable to affiliated companies471 506 
Taxes accrued203 76 
Interest accrued125 117 
Current maturities of long-term debt356 506 
Asset retirement obligations251 264 
Regulatory liabilities489 473 
Other425 546 
Total current liabilities3,190 3,687 
Long-Term Debt12,250 11,412 
Long-Term Debt Payable to Affiliated Companies300 300 
Other Noncurrent Liabilities
Deferred income taxes3,937 3,842 
Asset retirement obligations5,116 5,086 
Regulatory liabilities6,810 6,535 
Operating lease liabilities87 97 
Accrued pension and other post-retirement benefit costs67 73 
Investment tax credits259 236 
Other605 626 
Total other noncurrent liabilities16,881 16,495 
Commitments and Contingencies00
Equity
Member's equity13,399 13,161 
Accumulated other comprehensive loss(7)(7)
Total equity13,392 13,154 
Total Liabilities and Equity$46,013 $45,048 

See Notes to Condensed Consolidated Financial Statements
16

FINANCIAL STATEMENTS
DUKE ENERGY CAROLINAS, LLC
Condensed Consolidated Statements of Cash Flows
(Unaudited)
Six Months Ended
June 30,
(in millions)20212020
CASH FLOWS FROM OPERATING ACTIVITIES
Net income$537 $573 
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation and amortization (including amortization of nuclear fuel)861 854 
Equity component of AFUDC(30)(29)
Impairment of assets and other charges75 
Deferred income taxes(41)31 
Payments for asset retirement obligations(93)(86)
Provision for rate refunds(11)
(Increase) decrease in
Net realized and unrealized mark-to-market and hedging transactions4 — 
Receivables 40 
Receivables from affiliated companies13 36 
Inventory(3)(84)
Other current assets(45)170 
Increase (decrease) in
Accounts payable(266)(249)
Accounts payable to affiliated companies(4)(63)
Taxes accrued127 120 
Other current liabilities(152)(134)
Other assets8 (83)
Other liabilities18 (35)
Net cash provided by operating activities998 1,065 
CASH FLOWS FROM INVESTING ACTIVITIES
Capital expenditures(1,251)(1,271)
Purchases of debt and equity securities(1,847)(1,017)
Proceeds from sales and maturities of debt and equity securities1,847 1,017 
Other(80)(73)
Net cash used in investing activities(1,331)(1,344)
CASH FLOWS FROM FINANCING ACTIVITIES
Proceeds from the issuance of long-term debt1,298 938 
Payments for the redemption of long-term debt(614)(454)
Notes payable to affiliated companies(35)102 
Distributions to parent(300)(300)
Other(1)(1)
Net cash provided by financing activities348 285 
Net increase in cash and cash equivalents15 
Cash and cash equivalents at beginning of period21 18 
Cash and cash equivalents at end of period$36 $24 
Supplemental Disclosures:
Significant non-cash transactions:
Accrued capital expenditures$315 $256 

See Notes to Condensed Consolidated Financial Statements
17

FINANCIAL STATEMENTS
DUKE ENERGY CAROLINAS, LLC
Condensed Consolidated Statements of Changes in Equity
(Unaudited)
Three Months Ended June 30, 2020 and 2021
Accumulated Other
Comprehensive
Loss
Member'sNet Losses onTotal
(in millions)EquityCash Flow HedgesEquity
Balance at March 31, 2020$12,844 $(7)$12,837 
Net income234 — 234 
Other— 
Balance at June 30, 2020$13,079 $(7)$13,072 
Balance at March 31, 2021$13,473 $(7)$13,466 
Net income225  225 
Distributions to parent(300) (300)
Other1  1 
Balance at June 30, 2021$13,399 $(7)$13,392 
Six Months Ended June 30, 2020 and 2021
Accumulated Other
Comprehensive
Loss
Member'sNet Losses onTotal
(in millions)EquityCash Flow HedgesEquity
Balance at December 31, 2019$12,818 $(7)$12,811 
Net income573 — 573 
Distributions to parent(300)— (300)
Other(a)
(12)— (12)
Balance at June 30, 2020$13,079 $(7)$13,072 
Balance at December 31, 2020$13,161 $(7)$13,154 
Net income537  537 
Distributions to parent(300) (300)
Other1  1 
Balance at June 30, 2021$13,399 $(7)$13,392 
(a)Amounts primarily represent impacts due to implementation of a new accounting standard related to Current Estimated Credit Losses. See Note 1 for additional discussion.
See Notes to Condensed Consolidated Financial Statements
18

FINANCIAL STATEMENTS

PROGRESS ENERGY, INC.
Condensed Consolidated Statements of Operations and Comprehensive Income
(Unaudited)
Three Months EndedSix Months Ended
June 30,June 30,
(in millions)2021202020212020
Operating Revenues$2,679 $2,498 $5,184 $4,920 
Operating Expenses
Fuel used in electric generation and purchased power833 777 1,628 1,540 
Operation, maintenance and other626 589 1,227 1,143 
Depreciation and amortization441 432 926 884 
Property and other taxes133 137 275 272 
Impairment of assets and other charges37 — 37 — 
Total operating expenses2,070 1,935 4,093 3,839 
Gains on Sales of Other Assets and Other, net1 1 
Operating Income610 570 1,092 1,087 
Other Income and Expenses, net38 33 81 65 
Interest Expense200 199 392 405 
Income Before Income Taxes448 404 781 747 
Income Tax Expense37 60 80 120 
Net Income411 344 $701 $627 
Net Income$411 $344 $701 $627 
Other Comprehensive Income, net of tax
Pension and OPEB adjustments1 1 
Net unrealized gains on cash flow hedges 1 
Unrealized gains (losses) on available-for-sale securities1 (1) — 
Other Comprehensive Income, net of tax2 2 
Comprehensive Income413 345 $703 $630 

See Notes to Condensed Consolidated Financial Statements
19

FINANCIAL STATEMENTS
PROGRESS ENERGY, INC.
Condensed Consolidated Balance Sheets
(Unaudited)
(in millions)June 30, 2021December 31, 2020
ASSETS
Current Assets
Cash and cash equivalents$75 $59 
Receivables (net of allowance for doubtful accounts of $11 at 2021 and $8 at 2020)223 228 
Receivables of VIEs (net of allowance for doubtful accounts of $25 at 2021 and $29 at 2020)924 901 
Receivables from affiliated companies69 157 
Inventory1,299 1,375 
Regulatory assets (includes $54 at 2021 and $53 at 2020 related to VIEs)909 758 
Other (includes $33 at 2021 and $39 at 2020 related to VIEs)270 109 
Total current assets3,769 3,587 
Property, Plant and Equipment
Cost59,234 57,892 
Accumulated depreciation and amortization(18,887)(18,368)
Facilities to be retired, net28 29 
Net property, plant and equipment40,375 39,553 
Other Noncurrent Assets
Goodwill3,655 3,655 
Regulatory assets (includes $914 at 2021 and $937 at 2020 related to VIEs)5,757 5,775 
Nuclear decommissioning trust funds4,440 4,137 
Operating lease right-of-use assets, net700 690 
Other1,115 1,227 
Total other noncurrent assets15,667 15,484 
Total Assets$59,811 $58,624 
LIABILITIES AND EQUITY
Current Liabilities
Accounts payable$903 $919 
Accounts payable to affiliated companies331 289 
Notes payable to affiliated companies3,003 2,969 
Taxes accrued217 121 
Interest accrued191 202 
Current maturities of long-term debt (includes $55 at 2021 and $305 at 2020 related to VIEs)2,831 1,426 
Asset retirement obligations251 283 
Regulatory liabilities558 640 
Other814 793 
Total current liabilities9,099 7,642 
Long-Term Debt (includes $1,492 at 2021 and $1,252 at 2020 related to VIEs)16,269 17,688 
Long-Term Debt Payable to Affiliated Companies150 150 
Other Noncurrent Liabilities
Deferred income taxes4,655 4,396 
Asset retirement obligations5,853 5,866 
Regulatory liabilities5,244 5,051 
Operating lease liabilities634 623 
Accrued pension and other post-retirement benefit costs496 505 
Other469 462 
Total other noncurrent liabilities17,351 16,903 
Commitments and Contingencies00
Equity
Common Stock, $0.01 par value, 100 shares authorized and outstanding at 2021 and 2020 — 
Additional paid-in capital9,143 9,143 
Retained earnings7,809 7,109 
Accumulated other comprehensive loss(13)(15)
Total Progress Energy, Inc. stockholders' equity16,939 16,237 
Noncontrolling interests3 
Total equity16,942 16,241 
Total Liabilities and Equity$59,811 $58,624 
See Notes to Condensed Consolidated Financial Statements
20

FINANCIAL STATEMENTS
PROGRESS ENERGY, INC.
Condensed Consolidated Statements of Cash Flows
(Unaudited)
Six Months Ended
June 30,
(in millions)20212020
CASH FLOWS FROM OPERATING ACTIVITIES
Net income$701 $627 
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation, amortization and accretion (including amortization of nuclear fuel)1,104 1,118 
Equity component of AFUDC(23)(24)
Impairment of assets and other charges37 — 
Deferred income taxes163 94 
Payments for asset retirement obligations(139)(173)
Provision for rate refunds(7)
(Increase) decrease in
Net realized and unrealized mark-to-market and hedging transactions16 (22)
Receivables(12)(15)
Receivables from affiliated companies88 34 
Inventory76 (42)
Other current assets(247)102 
Increase (decrease) in
Accounts payable44 (238)
Accounts payable to affiliated companies42 (88)
Taxes accrued97 155 
Other current liabilities(79)(64)
Other assets(33)(57)
Other liabilities(156)(97)
Net cash provided by operating activities1,672 1,312 
CASH FLOWS FROM INVESTING ACTIVITIES
Capital expenditures(1,745)(1,812)
Purchases of debt and equity securities(1,160)(2,602)
Proceeds from sales and maturities of debt and equity securities1,201 2,588 
Notes receivable from affiliated companies 164 
Other(69)(81)
Net cash used in investing activities(1,773)(1,743)
CASH FLOWS FROM FINANCING ACTIVITIES
Proceeds from the issuance of long-term debt19 514 
Payments for the redemption of long-term debt(41)(550)
Notes payable to affiliated companies34 552 
Other(3)— 
Net cash provided by financing activities9 516 
Net (decrease) increase in cash, cash equivalents and restricted cash(92)85 
Cash, cash equivalents and restricted cash at beginning of period200 126 
Cash, cash equivalents and restricted cash at end of period$108 $211 
Supplemental Disclosures:
Significant non-cash transactions:
Accrued capital expenditures$329 $287 
See Notes to Condensed Consolidated Financial Statements
21

FINANCIAL STATEMENTS


PROGRESS ENERGY, INC.
Condensed Consolidated Statements of Changes in Equity
(Unaudited)
Three Months Ended June 30, 2020 and 2021
Accumulated Other Comprehensive Loss
Net GainsNet UnrealizedTotal Progress
Additional(Losses) onGains (Losses) onPension andEnergy, Inc.
Paid-inRetainedCash FlowAvailable-for-OPEBStockholders'NoncontrollingTotal
(in millions)CapitalEarningsHedgesSale SecuritiesAdjustmentsEquityInterestsEquity
Balance at March 31, 2020$9,143 $6,747 $(9)$— $(7)$15,874 $$15,877 
Net income— 344 — — — 344 — 344 
Other comprehensive income (loss)— — (1)— 
Distributions to noncontrolling interests— — — — — — (1)(1)
Other— (1)— — — (1)— 
Balance at June 30, 2020$9,143 $7,090 $(8)$(1)$(6)$16,218 $$16,221 
Balance at March 31, 2021$9,143 $7,400 $(4)$(3)$(8)$16,528 $$16,530 
Net income 411    411  411 
Other comprehensive income   1 1 2  2 
Other (2)   (2)1 (1)
Balance at June 30, 2021$9,143 $7,809 $(4)$(2)$(7)$16,939 $3 $16,942 
Six Months Ended June 30, 2020 and 2021
Accumulated Other Comprehensive Loss
Net GainsNet UnrealizedTotal Progress
Additional(Losses) onGains (Losses) onPension andEnergy, Inc.
Paid-inRetainedCash FlowAvailable-for-OPEBStockholders'NoncontrollingTotal
CapitalEarningsHedgesSale SecuritiesAdjustmentsEquityInterestsEquity
Balance at December 31, 2019$9,143 $6,465 $(10)$(1)$(7)$15,590 $$15,593 
Net income— 627 — — — 627 — 627 
Other comprehensive income— — — — 
Distributions to noncontrolling interests— — — — — — (1)(1)
Other— (2)— — — (2)(1)
Balance at June 30, 2020$9,143 $7,090 $(8)$(1)$(6)$16,218 $$16,221 
Balance at December 31, 2020$9,143 $7,109 $(5)$(2)$(8)$16,237 $$16,241 
Net income 701    701  701 
Other comprehensive income  1  1 2  2 
Distributions to noncontrolling interests      (1)(1)
Other (1)   (1) (1)
Balance at June 30, 2021$9,143 $7,809 $(4)$(2)$(7)$16,939 $3 $16,942 
See Notes to Condensed Consolidated Financial Statements
22

FINANCIAL STATEMENTS

DUKE ENERGY PROGRESS, LLC
Condensed Consolidated Statements of Operations and Comprehensive Income
(Unaudited)
Three Months EndedSix Months Ended
June 30,June 30,
(in millions)2021202020212020
Operating Revenues$1,349 $1,243 $2,750 $2,581 
Operating Expenses
Fuel used in electric generation and purchased power409 395 845 800 
Operation, maintenance and other367 317 724 622 
Depreciation and amortization236 257 521 544 
Property and other taxes41 44 90 91 
Impairment of assets and other charges18 — 18 — 
Total operating expenses1,071 1,013 2,198 2,057 
Gains on Sales of Other Assets and Other, net1 1 
Operating Income279 236 553 529 
Other Income and Expenses, net20 19 44 41 
Interest Expense78 68 147 137 
Income Before Income Taxes221 187 450 433 
Income Tax Expense6 26 25 68 
Net Income and Comprehensive Income$215 $161 $425 $365 

See Notes to Condensed Consolidated Financial Statements
23

FINANCIAL STATEMENTS
DUKE ENERGY PROGRESS, LLC
Condensed Consolidated Balance Sheets
(Unaudited)
(in millions)June 30, 2021December 31, 2020
ASSETS
Current Assets
Cash and cash equivalents$46 $39 
Receivables (net of allowance for doubtful accounts of $4 at 2021 and 2020)129 132 
Receivables of VIEs (net of allowance for doubtful accounts of $17 at 2021 and $19 at 2020)473 500 
Receivables from affiliated companies63 50 
Inventory858 911 
Regulatory assets502 492 
Other141 60 
Total current assets2,212 2,184 
Property, Plant and Equipment
Cost36,291 35,759 
Accumulated depreciation and amortization(13,134)(12,801)
Facilities to be retired, net28 29 
Net property, plant and equipment23,185 22,987 
Other Noncurrent Assets
Regulatory assets4,056 3,976 
Nuclear decommissioning trust funds3,842 3,500 
Operating lease right-of-use assets, net377 346 
Other722 740 
Total other noncurrent assets8,997 8,562 
Total Assets$34,394 $33,733 
LIABILITIES AND EQUITY
Current Liabilities
Accounts payable$416 $454 
Accounts payable to affiliated companies214 215 
Notes payable to affiliated companies270 295 
Taxes accrued87 85 
Interest accrued90 99 
Current maturities of long-term debt1,806 603 
Asset retirement obligations250 283 
Regulatory liabilities472 530 
Other413 411 
Total current liabilities4,018 2,975 
Long-Term Debt7,321 8,505 
Long-Term Debt Payable to Affiliated Companies150 150 
Other Noncurrent Liabilities
Deferred income taxes2,455 2,298 
Asset retirement obligations5,387 5,352 
Regulatory liabilities4,578 4,394 
Operating lease liabilities354 323 
Accrued pension and other post-retirement benefit costs237 242 
Investment tax credits130 132 
Other79 102 
Total other noncurrent liabilities13,220 12,843 
Commitments and Contingencies00
Equity
Member's Equity9,685 9,260 
Total Liabilities and Equity$34,394 $33,733 

See Notes to Condensed Consolidated Financial Statements
24

FINANCIAL STATEMENTS
DUKE ENERGY PROGRESS, LLC
Condensed Consolidated Statements of Cash Flows
(Unaudited)
Six Months Ended
June 30,
(in millions)20212020
CASH FLOWS FROM OPERATING ACTIVITIES
Net income$425 $365 
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation and amortization (including amortization of nuclear fuel)610 635 
Equity component of AFUDC(15)(19)
Impairment of assets and other charges18 — 
Deferred income taxes28 60 
Payments for asset retirement obligations(88)(164)
Provision for rate refunds(7)
(Increase) decrease in
Net realized and unrealized mark-to-market and hedging transactions9 (5)
Receivables31 96 
Receivables from affiliated companies(13)10 
Inventory52 (46)
Other current assets(52)87 
Increase (decrease) in
Accounts payable28 (260)
Accounts payable to affiliated companies(1)(50)
Taxes accrued2 71 
Other current liabilities(45)(16)
Other assets(40)(92)
Other liabilities(43)(5)
Net cash provided by operating activities899 669 
CASH FLOWS FROM INVESTING ACTIVITIES
Capital expenditures(869)(795)
Purchases of debt and equity securities(926)(569)
Proceeds from sales and maturities of debt and equity securities915 548 
Other(2)(21)
Net cash used in investing activities(882)(837)
CASH FLOWS FROM FINANCING ACTIVITIES
Proceeds from the issuance of long-term debt19 20 
Payments for the redemption of long-term debt(3)(13)
Notes payable to affiliated companies(25)191 
Other(1)(1)
Net cash (used in) provided by financing activities(10)197 
Net increase in cash and cash equivalents7 29 
Cash and cash equivalents at beginning of period39 22 
Cash and cash equivalents at end of period$46 $51 
Supplemental Disclosures:
Significant non-cash transactions:
Accrued capital expenditures$97 $95 

See Notes to Condensed Consolidated Financial Statements
25

FINANCIAL STATEMENTS
DUKE ENERGY PROGRESS, LLC
Condensed Consolidated Statements of Changes in Equity
(Unaudited)
Three Months Ended
June 30, 2020 and 2021
Member's
(in millions)Equity
Balance at March 31, 2020$9,450 
Net income161 
Other(1)
Balance at June 30, 2020$9,610 
Balance at March 31, 2021$9,470 
Net income215 
Balance at June 30, 2021$9,685 
Six Months Ended
June 30, 2020 and 2021
Member's
(in millions)Equity
Balance at December 31, 2019$9,246 
Net income365 
Other(1)
Balance at June 30, 2020$9,610 
Balance at December 31, 2020$9,260 
Net income425 
Balance at June 30, 2021$9,685 

See Notes to Condensed Consolidated Financial Statements
26

FINANCIAL STATEMENTS

DUKE ENERGY FLORIDA, LLC
Condensed Consolidated Statements of Operations and Comprehensive Income
(Unaudited)
Three Months EndedSix Months Ended
June 30,June 30,
(in millions)2021202020212020
Operating Revenues$1,325 $1,250 $2,426 $2,330 
Operating Expenses
Fuel used in electric generation and purchased power424 382 783 740 
Operation, maintenance and other255 269 497 514 
Depreciation and amortization205 175 405 340 
Property and other taxes92 92 185 180 
Impairment of assets and other charges19 — 19 — 
Total operating expenses995 918 1,889 1,774 
Operating Income330 332 537 556 
Other Income and Expenses, net18 15 36 25 
Interest Expense80 80 160 164 
Income Before Income Taxes268 267 413 417 
Income Tax Expense51 51 79 81 
Net Income$217 $216 $334 $336 
Other Comprehensive Income, net of tax
Unrealized gains (losses) on available-for-sale securities1 (1) — 
Comprehensive Income$218 $215 $334 $336 

See Notes to Condensed Consolidated Financial Statements
27

FINANCIAL STATEMENTS
DUKE ENERGY FLORIDA, LLC
Condensed Consolidated Balance Sheets
(Unaudited)
(in millions)June 30, 2021December 31, 2020
ASSETS
Current Assets
Cash and cash equivalents$22 $11 
Receivables (net of allowance for doubtful accounts of $8 at 2021 and $4 at 2020)91 94 
Receivables of VIEs (net of allowance for doubtful accounts of $8 at 2021 and $10 at 2020)451 401 
Receivables from affiliated companies8 
Inventory440 464 
Regulatory assets (includes $54 at 2021 and $53 at 2020 related to VIEs)407 265 
Other (includes $33 at 2021 and $39 at 2020 related to VIEs)59 41 
Total current assets1,478 1,279 
Property, Plant and Equipment
Cost22,933 22,123 
Accumulated depreciation and amortization(5,746)(5,560)
Net property, plant and equipment17,187 16,563 
Other Noncurrent Assets
Regulatory assets (includes $914 at 2021 and $937 at 2020 related to VIEs)1,701 1,799 
Nuclear decommissioning trust funds598 637 
Operating lease right-of-use assets, net323 344 
Other342 335 
Total other noncurrent assets2,964 3,115 
Total Assets$21,629 $20,957 
LIABILITIES AND EQUITY
Current Liabilities
Accounts payable$487 $465 
Accounts payable to affiliated companies129 85 
Notes payable to affiliated companies363 196 
Taxes accrued144 82 
Interest accrued67 69 
Current maturities of long-term debt (includes $55 at 2021 and $305 at 2020 related to VIEs)575 823 
Regulatory liabilities85 110 
Other395 374 
Total current liabilities2,245 2,204 
Long-Term Debt (includes $1,223 at 2021 and $1,002 at 2020 related to VIEs)7,306 7,092 
Other Noncurrent Liabilities
Deferred income taxes2,286 2,191 
Asset retirement obligations467 514 
Regulatory liabilities665 658 
Operating lease liabilities280 300 
Accrued pension and other post-retirement benefit costs227 231 
Other262 209 
Total other noncurrent liabilities4,187 4,103 
Commitments and Contingencies00
Equity
Member's equity7,893 7,560 
Accumulated other comprehensive loss(2)(2)
Total equity7,891 7,558 
Total Liabilities and Equity$21,629 $20,957 

See Notes to Condensed Consolidated Financial Statements
28

FINANCIAL STATEMENTS
DUKE ENERGY FLORIDA, LLC
Condensed Consolidated Statements of Cash Flows
(Unaudited)
Six Months Ended
June 30,
(in millions)20212020
CASH FLOWS FROM OPERATING ACTIVITIES
Net income$334 $336 
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation, amortization and accretion491 478 
Equity component of AFUDC(8)(6)
Impairment of assets and other charges19 — 
Deferred income taxes130 37 
Payments for asset retirement obligations(52)(9)
(Increase) decrease in
Net realized and unrealized mark-to-market and hedging transactions5 (20)
Receivables(42)(110)
Receivables from affiliated companies(5)(2)
Inventory24 
Other current assets(132)(11)
Increase (decrease) in
Accounts payable15 23 
Accounts payable to affiliated companies44 (51)
Taxes accrued62 134 
Other current liabilities(35)(50)
Other assets11 37 
Other liabilities(94)(91)
Net cash provided by operating activities767 699 
CASH FLOWS FROM INVESTING ACTIVITIES
Capital expenditures(876)(1,016)
Purchases of debt and equity securities(234)(2,033)
Proceeds from sales and maturities of debt and equity securities286 2,040 
Notes receivable from affiliated companies 173 
Other(67)(60)
Net cash used in investing activities(891)(896)
CASH FLOWS FROM FINANCING ACTIVITIES
Proceeds from the issuance of long-term debt 495 
Payments for the redemption of long-term debt(38)(537)
Notes payable to affiliated companies167 232 
Other 
Net cash provided by financing activities129 192 
Net increase (decrease) in cash, cash equivalents and restricted cash5 (5)
Cash, cash equivalents and restricted cash at beginning of period50 56 
Cash, cash equivalents and restricted cash at end of period$55 $51 
Supplemental Disclosures:
Significant non-cash transactions:
Accrued capital expenditures$232 $192 

See Notes to Condensed Consolidated Financial Statements
29

FINANCIAL STATEMENTS
DUKE ENERGY FLORIDA, LLC
Condensed Consolidated Statements of Changes in Equity
(Unaudited)
Three Months Ended June 30, 2020 and 2021
Accumulated
Other
Comprehensive
Income (Loss)
Net Unrealized
Losses on
Member'sAvailable-for-SaleTotal
(in millions)EquitySecuritiesEquity
Balance at March 31, 2020$6,909 $— $6,909 
Net income216 — 216 
Other comprehensive loss— (1)(1)
Balance at June 30, 2020$7,125 $(1)$7,124 
Balance at March 31, 2021$7,677 $(3)$7,674 
Net income217  217 
Other comprehensive income 1 1 
Other(1) (1)
Balance at June 30, 2021$7,893 $(2)$7,891 
Six Months Ended June 30, 2020 and 2021
Accumulated
Other
Comprehensive
Income (Loss)
Net Unrealized
Losses on
Member'sAvailable-for-SaleTotal
(in millions)EquitySecuritiesEquity
Balance at December 31, 2019$6,789 $(1)$6,788 
Net income336 — 336 
Balance at June 30, 2020$7,125 $(1)$7,124 
Balance at December 31, 2020$7,560 $(2)$7,558 
Net income334  334 
Other(1) (1)
Balance at June 30, 2021$7,893 $(2)$7,891 

See Notes to Condensed Consolidated Financial Statements
30

FINANCIAL STATEMENTS

DUKE ENERGY OHIO, INC.
Condensed Consolidated Statements of Operations and Comprehensive Income
(Unaudited)
Three Months EndedSix Months Ended
June 30,June 30,
(in millions)2021202020212020
Operating Revenues
Regulated electric$343 $330 $706 $676 
Regulated natural gas113 93 282 245 
Total operating revenues456 423 988 921 
Operating Expenses
Fuel used in electric generation and purchased power93 77 175 164 
Cost of natural gas16 67 43 
Operation, maintenance and other111 95 219 218 
Depreciation and amortization75 68 149 136 
Property and other taxes83 78 175 161 
Impairment of assets and other charges5 — 5 — 
Total operating expenses383 324 790 722 
Operating Income73 99 198 199 
Other Income and Expenses, net5 10 
Interest Expense28 25 53 49 
Income Before Income Taxes50 78 155 157 
Income Tax Expense11 12 25 26 
Net Income and Comprehensive Income$39 $66 $130 $131 

See Notes to Condensed Consolidated Financial Statements
31

FINANCIAL STATEMENTS
DUKE ENERGY OHIO, INC.
Condensed Consolidated Balance Sheets
(Unaudited)
(in millions)June 30, 2021December 31, 2020
ASSETS
Current Assets
Cash and cash equivalents$12 $14 
Receivables (net of allowance for doubtful accounts of $4 at 2021 and 2020)96 98 
Receivables from affiliated companies83 102 
Inventory111 110 
Regulatory assets56 39 
Other26 31 
Total current assets384 394 
Property, Plant and Equipment
Cost11,351 11,022 
Accumulated depreciation and amortization(3,068)(3,013)
Net property, plant and equipment8,283 8,009 
Other Noncurrent Assets
Goodwill920 920 
Regulatory assets636 610 
Operating lease right-of-use assets, net20 20 
Other79 72 
Total other noncurrent assets1,655 1,622 
Total Assets$10,322 $10,025 
LIABILITIES AND EQUITY
Current Liabilities
Accounts payable$255 $279 
Accounts payable to affiliated companies72 68 
Notes payable to affiliated companies390 169 
Taxes accrued189 247 
Interest accrued31 31 
Current maturities of long-term debt50 50 
Asset retirement obligations12 
Regulatory liabilities65 65 
Other70 70 
Total current liabilities1,134 982 
Long-Term Debt3,016 3,014 
Long-Term Debt Payable to Affiliated Companies25 25 
Other Noncurrent Liabilities
Deferred income taxes1,014 981 
Asset retirement obligations99 108 
Regulatory liabilities741 748 
Operating lease liabilities19 20 
Accrued pension and other post-retirement benefit costs113 113 
Other96 99 
Total other noncurrent liabilities2,082 2,069 
Commitments and Contingencies00
Equity
Common Stock, $8.50 par value, 120 million shares authorized; 90 million shares outstanding at 2021 and 2020762 762 
Additional paid-in capital2,776 2,776 
Retained earnings527 397 
Total equity4,065 3,935 
Total Liabilities and Equity$10,322 $10,025 

See Notes to Condensed Consolidated Financial Statements
32

FINANCIAL STATEMENTS
DUKE ENERGY OHIO, INC.
Condensed Consolidated Statements of Cash Flows
(Unaudited)
Six Months Ended
June 30,
(in millions)20212020
CASH FLOWS FROM OPERATING ACTIVITIES
Net income$130 $131 
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation and amortization151 138 
Equity component of AFUDC(4)(2)
Impairment of assets and other charges5 — 
Deferred income taxes17 24 
Payments for asset retirement obligations(1)— 
Provision for rate refunds8 
(Increase) decrease in
Net realized and unrealized mark-to-market and hedging transactions(1)— 
Receivables2 
Receivables from affiliated companies(11)45 
Inventory(1)
Other current assets(12)
Increase (decrease) in
Accounts payable(8)(22)
Accounts payable to affiliated companies4 (10)
Taxes accrued(58)(9)
Other current liabilities(7)
Other assets(33)(24)
Other liabilities4 (3)
Net cash provided by operating activities185 292 
CASH FLOWS FROM INVESTING ACTIVITIES
Capital expenditures(415)(403)
Notes receivable from affiliated companies30 (35)
Other(23)(27)
Net cash used in investing activities(408)(465)
CASH FLOWS FROM FINANCING ACTIVITIES
Proceeds from the issuance of long-term debt 397 
Payments for the redemption of long-term debt (233)
Notes payable to affiliated companies221 — 
Net cash provided by financing activities221 164 
Net decrease in cash and cash equivalents(2)(9)
Cash and cash equivalents at beginning of period14 17 
Cash and cash equivalents at end of period$12 $
Supplemental Disclosures:
Significant non-cash transactions:
Accrued capital expenditures$88 $94 

See Notes to Condensed Consolidated Financial Statements
33

FINANCIAL STATEMENTS
DUKE ENERGY OHIO, INC.
Condensed Consolidated Statements of Changes in Equity
(Unaudited)
Three Months Ended June 30, 2020 and 2021
Additional
CommonPaid-inRetainedTotal
(in millions)StockCapitalEarningsEquity
Balance at March 31, 2020$762 $2,776 $210 $3,748 
Net income— — 66 66 
Balance at June 30, 2020$762 $2,776 $276 $3,814 
Balance at March 31, 2021$762 $2,776 $488 $4,026 
Net income  39 39 
Balance at June 30, 2021$762 $2,776 $527 $4,065 
Six Months Ended June 30, 2020 and 2021
Additional
CommonPaid-inRetainedTotal
(in millions)StockCapitalEarningsEquity
Balance at December 31, 2019$762 $2,776 $145 $3,683 
Net income— — 131 131 
Balance at June 30, 2020$762 $2,776 $276 $3,814 
Balance at December 31, 2020$762 $2,776 $397 $3,935 
Net income  130 130 
Balance at June 30, 2021$762 $2,776 $527 $4,065 

See Notes to Condensed Consolidated Financial Statements
34

FINANCIAL STATEMENTS

DUKE ENERGY INDIANA, LLC
Condensed Consolidated Statements of Operations and Comprehensive Income
(Unaudited)
Three Months EndedSix Months Ended
June 30,June 30,
(in millions)2021202020212020
Operating Revenues$735 $617 $1,480 $1,309 
Operating Expenses
Fuel used in electric generation and purchased power201 161 418 355 
Operation, maintenance and other192 171 370 357 
Depreciation and amortization152 134 304 266 
Property and other taxes20 20 41 42 
Impairment of assets and other charges8 — 8 — 
Total operating expenses573 486 1,141 1,020 
Losses on Sales of Other Assets and Other, net(1)— (1)— 
Operating Income161 131 338 289 
Other Income and Expenses, net10 19 19 
Interest Expense49 42 99 85 
Income Before Income Taxes122 98 258 223 
Income Tax Expense19 17 43 43 
Net Income and Comprehensive Income$103 $81 $215 $180 

See Notes to Condensed Consolidated Financial Statements
35

FINANCIAL STATEMENTS
DUKE ENERGY INDIANA, LLC
Condensed Consolidated Balance Sheets
(Unaudited)
(in millions)June 30, 2021December 31, 2020
ASSETS
Current Assets
Cash and cash equivalents$12 $
Receivables (net of allowance for doubtful accounts of $3 at 2021 and 2020)69 55 
Receivables from affiliated companies95 112 
Notes receivable from affiliated companies18 — 
Inventory412 473 
Regulatory assets173 125 
Other46 37 
Total current assets825 809 
Property, Plant and Equipment
Cost17,213 17,382 
Accumulated depreciation and amortization(5,514)(5,661)
Net property, plant and equipment11,699 11,721 
Other Noncurrent Assets
Regulatory assets1,310 1,203 
Operating lease right-of-use assets, net53 55 
Other268 253 
Total other noncurrent assets1,631 1,511 
Total Assets$14,155 $14,041 
LIABILITIES AND EQUITY
Current Liabilities
Accounts payable$209 $188 
Accounts payable to affiliated companies59 88 
Notes payable to affiliated companies 131 
Taxes accrued64 62 
Interest accrued52 51 
Current maturities of long-term debt123 70 
Asset retirement obligations176 168 
Regulatory liabilities141 111 
Other104 83 
Total current liabilities928 952 
Long-Term Debt3,819 3,871 
Long-Term Debt Payable to Affiliated Companies150 150 
Other Noncurrent Liabilities
Deferred income taxes1,262 1,228 
Asset retirement obligations980 1,008 
Regulatory liabilities1,593 1,627 
Operating lease liabilities52 53 
Accrued pension and other post-retirement benefit costs172 171 
Investment tax credits168 168 
Other32 30 
Total other noncurrent liabilities4,259 4,285 
Commitments and Contingencies00
Equity
Member's Equity4,999 4,783 
Total Liabilities and Equity$14,155 $14,041 

See Notes to Condensed Consolidated Financial Statements
36

FINANCIAL STATEMENTS
DUKE ENERGY INDIANA, LLC
Condensed Consolidated Statements of Cash Flows
(Unaudited)
Six Months Ended
June 30,
(in millions)20212020
CASH FLOWS FROM OPERATING ACTIVITIES
Net income$215 $180 
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation, amortization and accretion306 267 
Equity component of AFUDC(12)(12)
Impairment of assets and other charges8 — 
Deferred income taxes1 38 
Payments for asset retirement obligations(30)(28)
(Increase) decrease in
Receivables(15)19 
Receivables from affiliated companies(8)20 
Inventory61 28 
Other current assets(31)13 
Increase (decrease) in
Accounts payable35 22 
Accounts payable to affiliated companies(29)(13)
Taxes accrued10 
Other current liabilities20 (22)
Other assets(3)(29)
Other liabilities6 (6)
Net cash provided by operating activities534 481 
CASH FLOWS FROM INVESTING ACTIVITIES
Capital expenditures(394)(456)
Purchases of debt and equity securities(9)(14)
Proceeds from sales and maturities of debt and equity securities6 
Notes receivable from affiliated companies7 (425)
Other(8)(16)
Net cash used in investing activities(398)(904)
CASH FLOWS FROM FINANCING ACTIVITIES
Proceeds from the issuance of long-term debt 544 
Notes payable to affiliated companies(131)(30)
Distributions to parent (100)
Net cash (used in) provided by financing activities(131)414 
Net increase (decrease) in cash and cash equivalents5 (9)
Cash and cash equivalents at beginning of period7 25 
Cash and cash equivalents at end of period$12 $16 
Supplemental Disclosures:
Significant non-cash transactions:
Accrued capital expenditures$85 $83 

See Notes to Condensed Consolidated Financial Statements
37

FINANCIAL STATEMENTS
DUKE ENERGY INDIANA, LLC
Condensed Consolidated Statements of Changes in Equity
(Unaudited)
Three Months Ended
June 30, 2020 and 2021
Member's
(in millions)Equity
Balance at March 31, 2020$4,674 
Net income81 
Distributions to parent(100)
Balance at June 30, 2020$4,655 
Balance at March 31, 2021$4,896 
Net income103 
Balance at June 30, 2021$4,999 
Six Months Ended
June 30, 2020 and 2021
Member's
(in millions)Equity
Balance at December 31, 2019$4,575 
Net income180 
Distributions to parent(100)
Balance at June 30, 2020$4,655 
Balance at December 31, 2020$4,783 
Net income215 
Other1 
Balance at June 30, 2021$4,999 

See Notes to Condensed Consolidated Financial Statements
38

FINANCIAL STATEMENTS

PIEDMONT NATURAL GAS COMPANY, INC.
Condensed Consolidated Statements of Operations and Comprehensive Income
(Unaudited)
Three Months EndedSix Months Ended
June 30,June 30,
(in millions)2021202020212020
Operating Revenues$215 $197 $821 $709 
Operating Expenses
Cost of natural gas63 53 288 215 
Operation, maintenance and other76 79 154 159 
Depreciation and amortization51 43 99 88 
Property and other taxes14 12 28 24 
Impairment of assets and other charges5 — 5 — 
Total operating expenses209 187 574 486 
Operating Income6 10 247 223 
Other Income and Expenses, net18 16 35 28 
Interest Expense30 33 59 60 
(Loss) Income Before Income Taxes(6)(7)223 191 
Income Tax (Benefit) Expense(2)(9)24 11 
Net (Loss) Income and Comprehensive (Loss) Income$(4)$$199 $180 

See Notes to Condensed Consolidated Financial Statements
39

FINANCIAL STATEMENTS
PIEDMONT NATURAL GAS COMPANY, INC.
Condensed Consolidated Balance Sheets
(Unaudited)
(in millions)June 30, 2021December 31, 2020
ASSETS
Current Assets
Receivables (net of allowance for doubtful accounts of $13 at 2021 and $12 at 2020)106 250 
Receivables from affiliated companies10 10 
Inventory43 68 
Regulatory assets108 153 
Other48 20 
Total current assets315 501 
Property, Plant and Equipment
Cost9,556 9,134 
Accumulated depreciation and amortization(1,838)(1,749)
Net property, plant and equipment7,718 7,385 
Other Noncurrent Assets
Goodwill49 49 
Regulatory assets337 302 
Operating lease right-of-use assets, net18 20 
Investments in equity method unconsolidated affiliates89 88 
Other277 270 
Total other noncurrent assets770 729 
Total Assets$8,803 $8,615 
LIABILITIES AND EQUITY
Current Liabilities
Accounts payable$165 $230 
Accounts payable to affiliated companies44 79 
Notes payable to affiliated companies93 530 
Taxes accrued27 23 
Interest accrued36 34 
Current maturities of long-term debt 160 
Regulatory liabilities57 88 
Other80 69 
Total current liabilities502 1,213 
Long-Term Debt2,967 2,620 
Other Noncurrent Liabilities
Deferred income taxes861 821 
Asset retirement obligations20 20 
Regulatory liabilities1,007 1,044 
Operating lease liabilities16 19 
Accrued pension and other post-retirement benefit costs6 
Other185 155 
Total other noncurrent liabilities2,095 2,067 
Commitments and Contingencies00
Equity
Common stock, no par value: 100 shares authorized and outstanding at 2021 and 20201,635 1,310 
Retained earnings1,604 1,405 
Total equity3,239 2,715 
Total Liabilities and Equity$8,803 $8,615 

See Notes to Condensed Consolidated Financial Statements
40

FINANCIAL STATEMENTS
PIEDMONT NATURAL GAS COMPANY, INC.
Condensed Consolidated Statements of Cash Flows
(Unaudited)
Six Months Ended
June 30,
(in millions)20212020
CASH FLOWS FROM OPERATING ACTIVITIES
Net income$199 $180 
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation and amortization101 89 
Equity component of AFUDC(14)(9)
Impairment of assets and other charges5 — 
Deferred income taxes3 17 
Equity in earnings from unconsolidated affiliates(4)(4)
Provision for rate refunds(3)(24)
(Increase) decrease in
Receivables137 154 
Receivables from affiliated companies (4)
Inventory26 42 
Other current assets30 (69)
Increase (decrease) in
Accounts payable(70)(68)
Accounts payable to affiliated companies(35)33 
Taxes accrued3 
Other current liabilities(30)(4)
Other assets6 (13)
Other liabilities(2)
Net cash provided by operating activities352 332 
CASH FLOWS FROM INVESTING ACTIVITIES
Capital expenditures(411)(438)
Return of investment capital1 
Other(17)(12)
Net cash used in investing activities(427)(449)
CASH FLOWS FROM FINANCING ACTIVITIES
Proceeds from the issuance of long-term debt347 394 
Payments for the redemption of long-term debt(160)— 
Notes payable to affiliated companies(437)(277)
Capital contributions from parent325 — 
Net cash provided by financing activities75 117 
Net increase in cash and cash equivalents — 
Cash and cash equivalents at beginning of period — 
Cash and cash equivalents at end of period$ $— 
Supplemental Disclosures:
Significant non-cash transactions:
Accrued capital expenditures$111 $98 

See Notes to Condensed Consolidated Financial Statements
41

FINANCIAL STATEMENTS
PIEDMONT NATURAL GAS COMPANY, INC.
Condensed Consolidated Statements of Changes in Equity
(Unaudited)
Three Months Ended June 30, 2020 and 2021
CommonRetainedTotal
(in millions)StockEarningsEquity
Balance at March 31, 2020$1,310 $1,310 $2,620 
Net income— 
Balance at June 30, 2020$1,310 $1,312 $2,622 
Balance at March 31, 2021$1,635 $1,608 $3,243 
Net loss (4)(4)
Balance at June 30, 2021$1,635 $1,604 $3,239 
Six Months Ended June 30, 2020 and 2021
CommonRetainedTotal
(in millions)StockEarningsEquity
Balance at December 31, 2019$1,310 $1,133 $2,443 
Net income— 180 180 
Other— (1)(1)
Balance at June 30, 2020$1,310 $1,312 $2,622 
Balance at December 31, 2020$1,310 $1,405 $2,715 
Net income 199 199 
Contribution from parent325  325 
Balance at June 30, 2021$1,635 $1,604 $3,239 

See Notes to Condensed Consolidated Financial Statements
42

FINANCIAL STATEMENTSORGANIZATION AND BASIS OF PRESENTATION

Index to Combined Notes to Condensed Consolidated Financial Statements
The unaudited notes to the Condensed Consolidated Financial Statements that follow are a combined presentation. The following list indicates the registrants to which the footnotes apply.
Applicable Notes
Registrant12345678910111213141516
Duke Energy
Duke Energy Carolinas
Progress Energy
Duke Energy Progress
Duke Energy Florida
Duke Energy Ohio
Duke Energy Indiana
Piedmont
Tables within the notes may not sum across due to (i) Progress Energy's consolidation of Duke Energy Progress, Duke Energy Florida and other subsidiaries that are not registrants and (ii) subsidiaries that are not registrants but included in the consolidated Duke Energy balances.
1. ORGANIZATION AND BASIS OF PRESENTATION
BASIS OF PRESENTATION
These Condensed Consolidated Financial Statements have been prepared in accordance with GAAP for interim financial information and with the instructions to Form 10-Q and Regulation S-X. Accordingly, these Condensed Consolidated Financial Statements do not include all information and notes required by GAAP for annual financial statements and should be read in conjunction with the Consolidated Financial Statements in the Duke Energy Registrants’ combined Annual Report on Form 10-K for the year ended December 31, 2020.
The information in these combined notes relates to each of the Duke Energy Registrants as noted in the Index to Combined Notes to Condensed Consolidated Financial Statements. However, none of the registrants make any representations as to information related solely to Duke Energy or the subsidiaries of Duke Energy other than itself.
These Condensed Consolidated Financial Statements, in the opinion of the respective companies’ management, reflect all normal recurring adjustments necessary to fairly present the financial position and results of operations of each of the Duke Energy Registrants. Amounts reported in Duke Energy’s interim Condensed Consolidated Statements of Operations and each of the Subsidiary Registrants’ interim Condensed Consolidated Statements of Operations and Comprehensive Income are not necessarily indicative of amounts expected for the respective annual periods due to effects of seasonal temperature variations on energy consumption, regulatory rulings, timing of maintenance on electric generating units, changes in mark-to-market valuations, changing commodity prices and other factors.
In preparing financial statements that conform to GAAP, management must make estimates and assumptions that affect the reported amounts of assets and liabilities, the reported amounts of revenues and expenses and the disclosure of contingent assets and liabilities at the date of the financial statements. Actual results could differ from those estimates.
BASIS OF CONSOLIDATION
These Condensed Consolidated Financial Statements include, after eliminating intercompany transactions and balances, the accounts of the Duke Energy Registrants and subsidiaries or VIEs where the respective Duke Energy Registrants have control. See Note 11 for additional information on VIEs. These Condensed Consolidated Financial Statements also reflect the Duke Energy Registrants’ proportionate share of certain jointly owned generation and transmission facilities.
OTHER CURRENT LIABILITIES
Included in Other within Current Liabilities on the Duke Energy Condensed Consolidated Balance Sheet is a current liability of $41 million and $936 million as of June 30, 2021, and December 31, 2020, respectively. The current liability, initially recorded in 2020, primarily represented Duke Energy's share of ACP's obligations of outstanding debt and to satisfy ARO requirements to restore construction sites. See Notes 3 and 11 for further information.
NONCONTROLLING INTEREST
Duke Energy maintains a controlling financial interest in certain less than wholly owned nonregulated subsidiaries. As a result, Duke Energy consolidates these subsidiaries and presents the third-party investors' portion of Duke Energy's net income (loss), net assets and comprehensive income (loss) as noncontrolling interest. Noncontrolling interest is included as a component of equity on the Condensed Consolidated Balance Sheet.
Several operating agreements of Duke Energy's subsidiaries with noncontrolling interest are subject to allocations of earnings, tax attributes and cash flows in accordance with contractual agreements that vary throughout the lives of the subsidiaries. Therefore, Duke Energy and the other investors' (the owners) interests in the subsidiaries are not fixed, and the subsidiaries apply the Hypothetical Liquidation at Book Value (HLBV) method in allocating income or loss and other comprehensive income or loss (all measured on a pretax basis) to the owners. The HLBV method measures the amounts that each owner would hypothetically claim at each balance sheet reporting date, including tax benefits realized by the owners over the IRS recapture period, upon a hypothetical liquidation of the subsidiary at the net book value of its underlying assets. The change in the amount that each owner would hypothetically receive at the reporting date compared to the amount it would have received on the previous reporting date represents the amount of income or loss allocated to each owner for the reporting period.
43

FINANCIAL STATEMENTSORGANIZATION AND BASIS OF PRESENTATION

Other operating agreements of Duke Energy's subsidiaries with noncontrolling interest allocate profit and loss based on their pro rata shares of the ownership interest in the respective subsidiary. Therefore, Duke Energy allocates net income or loss and other comprehensive income or loss of these subsidiaries to the owners based on their pro rata shares.
The following table presents cash received for the sale of noncontrolling interest and allocated losses to noncontrolling interest for the three and six months ended June 30, 2021, and 2020.
Three Months Ended June 30,Six Months Ended June 30,
(in millions)2021202020212020
Noncontrolling Interest Capital Contributions
Cash received for the sale of noncontrolling interest to tax equity members$15 $60 $318 $163 
Noncontrolling Interest Allocation of Income
Allocated losses to noncontrolling tax equity members utilizing the HLBV method55 79 98 128 
Allocated losses to noncontrolling members based on pro rata shares of ownership12 11 20 10 
Total Noncontrolling Interest Allocated Losses$67 $90 $118 $138 
CASH, CASH EQUIVALENTS AND RESTRICTED CASH
Duke Energy, Progress Energy and Duke Energy Florida have restricted cash balances related primarily to collateral assets, escrow deposits and VIEs. See Notes 9 and 11 for additional information. Restricted cash amounts are included in Other within Current Assets and Other Noncurrent Assets on the Condensed Consolidated Balance Sheets. The following table presents the components of cash, cash equivalents and restricted cash included in the Condensed Consolidated Balance Sheets.
June 30, 2021December 31, 2020
DukeDuke
DukeProgressEnergyDukeProgressEnergy
EnergyEnergyFloridaEnergyEnergyFlorida
Current Assets
Cash and cash equivalents$367 $75 $22 $259 $59 $11 
Other197 33 33 194 39 39 
Other Noncurrent Assets
Other1   103 102 — 
Total cash, cash equivalents and restricted cash$565 $108 $55 $556 $200 $50 
INVENTORY
Provisions for inventory write-offs were not material at June 30, 2021, and December 31, 2020. The components of inventory are presented in the tables below.
 June 30, 2021
DukeDukeDukeDukeDuke
DukeEnergyProgressEnergyEnergyEnergyEnergy
(in millions)EnergyCarolinasEnergyProgressFloridaOhioIndianaPiedmont
Materials and supplies$2,368 $820 $1,014 $680 $334 $82 $305 $11 
Coal397 158 123 78 44 10 106  
Natural gas, oil and other fuel250 35 162 100 62 19 1 32 
Total inventory$3,015 $1,013 $1,299 $858 $440 $111 $412 $43 
 December 31, 2020
DukeDukeDukeDukeDuke
DukeEnergyProgressEnergyEnergyEnergyEnergy
(in millions)EnergyCarolinasEnergyProgressFloridaOhioIndianaPiedmont
Materials and supplies$2,312 $785 $999 $673 $325 $78 $307 $12 
Coal561 186 193 131 63 16 165 — 
Natural gas, oil and other fuel294 39 183 107 76 16 56 
Total inventory$3,167 $1,010 $1,375 $911 $464 $110 $473 $68 
44

FINANCIAL STATEMENTSORGANIZATION AND BASIS OF PRESENTATION

PROPERTY, PLANT & EQUIPMENT AND LEASES
Duke Energy continues to execute on its business transformation strategy, including the evaluation of in-office work policies considering the experience with the COVID-19 pandemic and also workforce realignment of roles and responsibilities. In May 2021, Duke Energy management approved the sale of certain properties and entered into an agreement to exit certain leased space on December 31, 2021. The sale of the properties is subject to abandonment accounting and resulted in an impairment charge. Additionally, the exit of the leased space resulted in the impairment of related furniture, fixtures and equipment. The total 2021 charges related to the reduction in physical workspace, including these impairments, are expected to be approximately $200 million. During the three months ended June 30, 2021, Duke Energy recorded a pretax charge to earnings of $175 million on the Condensed Consolidated Statements of Operations, which includes $131 million within Impairment of assets and other charges, $27 million within Operations, maintenance and other and $17 million within Depreciation and amortization.
NEW ACCOUNTING STANDARDS
The following new accounting standard was adopted by the Duke Energy Registrants in 2021.
Leases with Variable Lease Payments. In July 2021, the Financial Accounting Standards Board (FASB) issued new accounting guidance requiring lessors to classify a lease with variable lease payments that do not depend on a reference index or rate as an operating lease if both of the following are met: (1) the lease would have to be classified as a sales-type or direct financing lease under prior guidance, and (2) the lessor would have recognized a day-one loss. Duke Energy elected to adopt the guidance immediately upon issuance of the new standard and will be applying the new standard prospectively to new lease arrangements meeting the criteria. Duke Energy does not currently have any lease arrangements that this new accounting guidance will materially impact.
The following accounting standard was adopted by the Duke Energy Registrants in 2020.
Current Expected Credit Losses. In June 2016, the FASB issued new accounting guidance for credit losses. Duke Energy adopted the new accounting guidance for credit losses effective January 1, 2020, using the modified retrospective method of adoption, which does not require restatement of prior year results. Duke Energy did not adopt any practical expedients.
Duke Energy recognizes allowances for credit losses based on management's estimate of losses expected to be incurred over the lives of certain assets or guarantees. Management monitors credit quality, changes in expected credit losses and the appropriateness of the allowance for credit losses on a forward-looking basis. Management reviews the risk of loss periodically as part of the existing assessment of collectability of receivables.
Duke Energy reviews the credit quality of its counterparties as part of its regular risk management process and requires credit enhancements, such as deposits or letters of credit, as appropriate and as allowed by regulators.
Duke Energy recorded cumulative effects of changes in accounting principles related to the adoption of the new credit loss standard for allowances for credit losses of trade and other receivables, insurance receivables and financial guarantees. These amounts are included in the Condensed Consolidated Balance Sheets in Receivables, Receivables of VIEs, Other Noncurrent Assets and Other Noncurrent Liabilities. See Notes 4 and 12 for more information.
Duke Energy recorded an adjustment for the cumulative effect of a change in accounting principle due to the adoption of this standard on January 1, 2020, as shown in the table below:
 January 1, 2020
DukeDukeDuke
DukeEnergyProgressEnergyEnergy
(in millions)EnergyCarolinasEnergyProgressFloridaPiedmont
Total pretax impact to Retained Earnings$120 $16 $2 $1 $1 $1 
The following new accounting standard has been issued but not yet adopted by the Duke Energy Registrants as of June 30, 2021.
Reference Rate Reform. In March 2020, the FASB issued new accounting guidance for reference rate reform. This guidance is elective and provides expedients to facilitate financial reporting for the anticipated transition away from the London Inter-bank Offered Rate (LIBOR) and other interbank reference rates by the end of 2022. The optional expedients are effective for modification of existing contracts or new arrangements executed between March 12, 2020, through December 31, 2022.
Duke Energy has variable-rate debt and manages interest rate risk by entering into financial contracts including interest rate swaps that are generally indexed to LIBOR. Impacted financial arrangements extending beyond 2022 may require contractual amendment or termination to fully adapt to a post-LIBOR environment. Duke Energy is assessing these financial arrangements and is evaluating the use of optional expedients outlined in the new accounting guidance. Alternative index provisions are also being assessed and incorporated into new financial arrangements that extend beyond 2022. The full outcome of the transition away from LIBOR cannot be determined at this time, but is not expected to have a material impact on the financial statements.
2. BUSINESS SEGMENTS
Duke Energy
Duke Energy's segment structure includes the following segments: Electric Utilities and Infrastructure, Gas Utilities and Infrastructure and Commercial Renewables. The Electric Utilities and Infrastructure segment primarily includes Duke Energy's regulated electric utilities in the Carolinas, Florida and the Midwest. The Gas Utilities and Infrastructure segment includes Piedmont, Duke Energy's natural gas local distribution companies in Ohio and Kentucky and Duke Energy's natural gas storage, midstream pipeline and renewable natural gas investments.
45

FINANCIAL STATEMENTSBUSINESS SEGMENTS

The Commercial Renewables segment is primarily comprised of nonregulated utility-scale wind and solar generation assets located throughout the U.S. In 2021, Duke Energy continues to monitor recoverability of its renewable merchant plants located in the Electric Reliability Council of Texas West market and in the PJM West market due to declining market pricing and declining long-term forecasted energy prices. The assets were not impaired as of June 30, 2021, because the carrying value of approximately $208 million continues to approximate the aggregate estimated future undiscounted cash flows. Duke Energy has a 50% ownership interest in these assets. A continued decline in energy market pricing would likely result in a future impairment.
The remainder of Duke Energy’s operations is presented as Other, which is primarily comprised of interest expense on holding company debt, unallocated corporate costs, Duke Energy’s wholly owned captive insurance company, Bison, and Duke Energy's ownership interest in National Methanol Company.
Business segment information is presented in the following tables. Segment assets presented exclude intercompany assets.
Three Months Ended June 30, 2021
ElectricGasTotal
Utilities andUtilities andCommercialReportable
(in millions)InfrastructureInfrastructureRenewablesSegmentsOtherEliminationsTotal
Unaffiliated revenues$5,328 $305 $119 $5,752 $6 $ $5,758 
Intersegment revenues7 22  29 21 (50) 
Total revenues$5,335 $327 $119 $5,781 $27 $(50)$5,758 
Segment income (loss)(a)
$935 $17 $47 $999 $(248)$ $751 
Less: Noncontrolling interests67 
Add: Preferred stock dividend14 
Net Income$698 
Segment assets$140,591 $14,321 $6,956 $161,868 $3,524 $(7)$165,385 
Three Months Ended June 30, 2020
ElectricGasTotal
Utilities andUtilities andCommercialReportable
(in millions)InfrastructureInfrastructureRenewablesSegmentsOtherEliminationsTotal
Unaffiliated revenues$5,026 $265 $123 $5,414 $$— $5,421 
Intersegment revenues24 — 32 19 (51)— 
Total revenues$5,034 $289 $123 $5,446 $26 $(51)$5,421 
Segment income (loss)(b)
$753 $(1,576)$90 $(733)$(84)$— $(817)
Less: Noncontrolling interests90 
Add: Preferred stock dividend15 
Net Income$(892)
(a)    Gas Utilities and Infrastructure includes $16 million, recorded within Equity in earnings (losses) of unconsolidated affiliates on the Condensed Consolidated Statements of Operations, related to gas pipeline investments. See Note 3 for additional information. Other includes $131 million recorded within Impairment of assets and other charges, $27 million within Operations, maintenance and other, and $17 million within Depreciation and amortization on the Condensed Consolidated Statements of Operations, related to the workplace and workforce realignment. See Note 1 for additional information.
(b)    Gas Utilities and Infrastructure includes $2 billion recorded within Equity in earnings (losses) of unconsolidated affiliates on the Condensed Consolidated Statements of Operations, related to gas pipeline investments. See Note 3 for additional information.
Six Months Ended June 30, 2021
ElectricGasTotal
Utilities andUtilities andCommercialReportable
(in millions)InfrastructureInfrastructureRenewablesSegmentsOtherEliminationsTotal
Unaffiliated revenues$10,601 $1,057 $238 $11,896 $12 $ $11,908 
Intersegment revenues15 45  60 41 (101) 
Total revenues$10,616 $1,102 $238 $11,956 $53 $(101)$11,908 
Segment income (loss)(a)
$1,755 $262 $74 $2,091 $(387)$ $1,704 
Less: Noncontrolling interests118 
Add: Preferred stock dividend53 
Net Income$1,639 
46

FINANCIAL STATEMENTSBUSINESS SEGMENTS

Six Months Ended June 30, 2020
ElectricGasTotal
Utilities andUtilities andCommercialReportable
(in millions)InfrastructureInfrastructureRenewablesSegmentsOtherEliminationsTotal
Unaffiliated revenues$10,200 $905 $252 $11,357 $13 $— $11,370 
Intersegment revenues17 48 — 65 36 (101)— 
Total revenues$10,217 $953 $252 $11,422 $49 $(101)$11,370 
Segment income (loss)(b)
$1,458 $(1,327)$147 $278 $(196)$— $82 
Less: Noncontrolling interests138 
Add: Preferred stock dividend54 
Net Income$(2)
(a)    Gas Utilities and Infrastructure includes $22 million, recorded within Equity in earnings (losses) of unconsolidated affiliates on the Condensed Consolidated Statements of Operations, related to gas pipeline investments. See Note 3 for additional information. Commercial Renewables includes a $35 million loss related to Texas Storm Uri, of which ($8 million) is recorded within Nonregulated electric and other revenues, $2 million within Operations, maintenance and other, $29 million within Equity in earnings (losses) of unconsolidated affiliates and $12 million within Loss Attributable to Noncontrolling Interests on the Condensed Consolidated Statements of Operations. See Note 4 for additional information. Other includes $131 million recorded within Impairment of assets and other charges, $27 million within Operations, maintenance and other, and $17 million within Depreciation and amortization on the Condensed Consolidated Statements of Operations, related to the workplace and workplace realignment. See Note 1 for additional information.
(b)    Gas Utilities and Infrastructure includes $2 billion recorded within Equity in earnings (losses) of unconsolidated affiliates on the Condensed Consolidated Statements of Operations, related to gas pipeline investments. See Note 3 for additional information. Other includes a $98 million reversal, included in Operations, maintenance and other on the Condensed Consolidated Statements of Operations, of 2018 severance costs due to a partial settlement in the Duke Energy Carolinas' 2019 North Carolina rate case. See Note 3 for additional information.
Duke Energy Ohio
Duke Energy Ohio has 2 reportable segments, Electric Utilities and Infrastructure and Gas Utilities and Infrastructure. The remainder of Duke Energy Ohio's operations is presented as Other.
Three Months Ended June 30, 2021
ElectricGasTotal
Utilities andUtilities andReportable
(in millions)InfrastructureInfrastructureSegmentsOtherEliminationsTotal
Total revenues$343 $113 $456 $ $ $456 
Segment income/Net income$24 $23 $47 $(8)$ $39 
Segment assets$6,645 $3,668 $10,313 $28 $(19)$10,322 
Three Months Ended June 30, 2020
ElectricGasTotal
Utilities andUtilities andReportable
(in millions)InfrastructureInfrastructureSegmentsOtherTotal
Total revenues$330 $93 $423 $— $423 
Segment income/Net income$44 $23 $67 $(1)$66 
Six Months Ended June 30, 2021
ElectricGasTotal
Utilities andUtilities andReportable
(in millions)InfrastructureInfrastructureSegmentsOtherTotal
Total revenues$706 $282 $988 $ $988 
Segment income/Net (loss) income$74 $66 $140 $(10)$130 
Six Months Ended June 30, 2020
ElectricGasTotal
Utilities andUtilities andReportable
(in millions)InfrastructureInfrastructureSegmentsOtherTotal
Total revenues$676 $245 $921 $— $921 
Segment income/Net (loss) income$74 $59 $133 $(2)$131 
47

FINANCIAL STATEMENTSREGULATORY MATTERS

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

FINANCIAL STATEMENTSREGULATORY MATTERS

COVID-19 Filings
North Carolina
Duke Energy Carolinas and Duke Energy Progress filed a joint petition on August 7, 2020, with the NCUC for deferral treatment of incremental costs and the cost of waived customer fees due to the COVID-19 pandemic. Comments on the joint petition were filed on November 5, 2020, and reply comments were filed on November 30, 2020. Duke Energy Carolinas and Duke Energy Progress cannot predict the outcome of this matter.
South Carolina
Duke Energy Carolinas and Duke Energy Progress filed a report on June 30, 2020, as required by PSCSC order, reporting revenue impact, costs and savings related to COVID-19 to date. On August 14, 2020, Duke Energy Carolinas and Duke Energy Progress filed a joint petition with the PSCSC for approval of an accounting order to defer incremental COVID-19 related costs incurred through June 30, 2020, and for the ongoing months during the duration of the COVID-19 pandemic. Duke Energy Carolinas and Duke Energy Progress withdrew their joint petition on May 17, 2021.
Duke Energy Carolinas
2017 North Carolina Rate Case
On August 25, 2017, Duke Energy Carolinas filed an application with the NCUC for a rate increase for retail customers of approximately $647 million. On February 28, 2018, Duke Energy Carolinas and the Public Staff filed an Agreement and Stipulation of Partial Settlement resolving certain portions of the proceeding. Terms of the settlement included an ROE of 9.9% and a capital structure of 52% equity and 48% debt. On June 22, 2018, the NCUC issued an order approving the Stipulation of Partial Settlement and requiring a revenue reduction.
The North Carolina Attorney General and other parties separately filed Notices of Appeal to the North Carolina Supreme Court. The North Carolina Supreme Court consolidated the Duke Energy Carolinas and Duke Energy Progress appeals. On December 11, 2020, the North Carolina Supreme Court issued an opinion, which affirmed, in part, and reversed and remanded, in part, the NCUC’s decisions. In the Opinion, the court upheld the NCUC's decision to include coal ash costs in the cost of service, as well as the NCUC’s discretion to allow a return on the unamortized balance of coal ash costs. The court also remanded to the NCUC a single issue to consider the assessment of support for the Public Staff’s equitable sharing argument. In response to an NCUC order seeking comments on the proposed procedure on remand, on January 11, 2021, Duke Energy Carolinas, Duke Energy Progress, the Public Staff, the North Carolina Attorney General, Sierra Club and Carolina Industrial Group for Fair Utility Rates II and III filed joint comments proposing that the NCUC not hold additional evidentiary hearings, but instead rely upon existing records in the 2017 North Carolina rate cases, or in the alternative, the records in the 2019 North Carolina rate cases, in deciding the issue on remand. On January 22, 2021, Duke Energy Carolinas and Duke Energy Progress entered into the CCR Settlement Agreement with the Settling Parties, which was filed with the NCUC on January 25, 2021, and approved by the NCUC on March 31, 2021. The NCUC issued an Order on Remand Accepting CCR Settlement and Affirming Previous Orders Setting Rates and Imposing Penalties on June 25, 2021.
2019 North Carolina Rate Case
On September 30, 2019, Duke Energy Carolinas filed an application with the NCUC for a net rate increase for retail customers of approximately $291 million, which represented an approximate 6% increase in annual base revenues. The gross rate case revenue increase request was $445 million, which was offset by an EDIT rider of $154 million to return to customers North Carolina and federal EDIT resulting from recent reductions in corporate tax rates. The request for a rate increase was driven by major capital investments subsequent to the previous base rate case, coal ash pond closure costs, accelerated coal plant depreciation and deferred 2018 storm costs. Duke Energy Carolinas requested rates be effective no later than August 1, 2020. The NCUC established a procedural schedule with an evidentiary hearing to begin on March 23, 2020. On March 16, 2020, in consideration of public health and safety as a result of the COVID-19 pandemic, Duke Energy Carolinas filed a motion with the NCUC seeking a suspension of the procedural schedule in the rate case, including issuing discovery requests, and postponement of the evidentiary hearing for 60 days. Also on March 16, 2020, the NCUC issued an Order Postponing Hearing and Addressing Procedural Matters, which postponed the evidentiary hearing until further order by the commission.
On March 25, 2020, Duke Energy Carolinas and the Public Staff filed an Agreement and Stipulation of Partial Settlement, subject to review and approval of the NCUC, resolving certain issues in the base rate proceeding. On July 24, 2020, Duke Energy Carolinas filed its request for approval of its notice to customers required to implement temporary rates. On July 27, 2020, Duke Energy Carolinas filed a joint motion with Duke Energy Progress and the Public Staff notifying the commission that the parties reached a joint partial settlement with the Public Staff. Also on July 27, 2020, Duke Energy Carolinas filed a letter stating that it intended to update its temporary rates calculation to reflect the terms of the partial settlement. On July 31, 2020, Duke Energy Carolinas and the Public Staff filed a Second Agreement and Stipulation of Partial Settlement (Second Partial Settlement), subject to review and approval of the NCUC, resolving certain remaining issues in the base rate proceeding. The remaining items litigated at hearing included recovery of deferred coal ash compliance costs that are subject to asset retirement obligation accounting, implementation of new depreciation rates and the amortization period of the loss on the hydro station sale.
On August 4, 2020, Duke Energy Carolinas filed an amended motion for approval of its amended notice to customers, seeking to exercise its statutory right to implement temporary rates subject to refund on or after August 24, 2020. The revenue requirement to be recovered, subject to refund, through the temporary rates was based on and consistent with the base rate component of the Second Partial Settlement and excluded the items to be litigated noted above. The NCUC approved the August 4, 2020 amended temporary rates motion on August 6, 2020, and temporary rates went into effect on August 24, 2020.
The Duke Energy Carolinas evidentiary hearing concluded on September 18, 2020, and post-hearing filings were made with the NCUC from all parties by November 4, 2020. On January 22, 2021, Duke Energy Carolinas and Duke Energy Progress entered into the CCR Settlement Agreement with the Settling Parties, which was filed with the NCUC on January 25, 2021.
49

FINANCIAL STATEMENTSREGULATORY MATTERS

On March 31, 2021, the NCUC issued an order approving the March 25, 2020, and July 31, 2020, partial settlements. The order includes approval of 1) an ROE of 9.6% based upon a capital structure of 52% equity and 48% debt; 2) deferral treatment of approximately $800 million of grid improvement projects with a return; 3) a flow back period of five years for unprotected federal EDIT; and 4) the reasonableness and prudence of $213 million of deferred storm costs, which were removed from the rate case and for which Duke Energy Carolinas filed a petition seeking securitization in October 2020. Additionally, the order approved without modification the CCR Settlement Agreement.
The order denied Duke Energy Carolinas' proposal to shorten the remaining depreciable lives of certain Duke Energy Carolinas coal-fired generating units, indicating the appropriate proceeding for the review of generating plant retirements is Duke Energy Carolinas' integrated resource planning (IRP) proceeding.
On May 21, 2021, the NCUC issued an Order Approving Rate Schedules, which resulted in a net increase of approximately $33 million. Revised customer rates became effective on June 1, 2021. The deadline to appeal has passed and no parties appealed the NCUC's order.
2018 South Carolina Rate Case
On November 8, 2018, Duke Energy Carolinas filed an application with the PSCSC for a rate increase for retail customers of approximately $168 million.
After hearings in March 2019, the PSCSC issued an order on May 21, 2019, which included an ROE of 9.5% and a capital structure of 53% equity and 47% debt. The order also included the following material components:
Approval of cancellation of the Lee Nuclear Project, with Duke Energy Carolinas maintaining the Combined Operating License;
Approval of recovery of $125 million (South Carolina retail portion) of Lee Nuclear Project development costs (including AFUDC through December 2017) over a 12-year period, but denial of a return on the deferred balance of costs;
Approval of recovery of $96 million of coal ash costs over a five-year period with a return at Duke Energy Carolinas' WACC;
Denial of recovery of $115 million of certain coal ash costs deemed to be related to the Coal Ash Act and incremental to the federal CCR rule;
Approval of a $66 million decrease to base rates to reflect the change in ongoing tax expense, primarily the reduction in the federal income tax rate from 35% to 21%;
Approval of a $45 million decrease through the EDIT Rider to return EDIT resulting from the federal tax rate change and deferred revenues since January 2018 related to the change, to be returned in accordance with the Average Rate Assumption Method (ARAM) for protected EDIT, over a 20-year period for unprotected EDIT associated with Property, Plant and Equipment, over a five-year period for unprotected EDIT not associated with Property, Plant and Equipment and over a five-year period for the deferred revenues; and
Approval of a $17 million decrease through the EDIT Rider related to reductions in the North Carolina state income tax rate from 6.9% to 2.5% to be returned over a five-year period.
As a result of the order, revised customer rates were effective June 1, 2019. On May 31, 2019, Duke Energy Carolinas filed a Petition for Rehearing or Reconsideration of that order contending substantial rights of Duke Energy Carolinas were prejudiced by unlawful, arbitrary and capricious rulings by the PSCSC on certain issues presented in the proceeding. On June 19, 2019, the PSCSC issued a Directive denying Duke Energy Carolinas' request to rehear or reconsider the commission's rulings on certain issues presented in the proceeding including coal ash remediation and disposal costs, ROE and the recovery of a return on deferred operation and maintenance expenses. An order detailing the commission's decision in the Directive was issued on October 18, 2019. Duke Energy Carolinas filed a notice of appeal on November 15, 2019, with the Supreme Court of South Carolina. On November 20, 2019, the South Carolina Energy Users Committee filed a Notice of Appeal with the Supreme Court of South Carolina. Initial briefs were filed on April 21, 2020, which included the South Carolina Energy User's Committee brief arguing that the PSCSC erred in allowing Duke Energy Carolinas' recovery of costs related to the Lee Nuclear Station. Response briefs were filed on July 6, 2020, and reply briefs were filed on August 11, 2020. Oral arguments were heard before the Supreme Court of South Carolina on May 26, 2021. Based on legal analysis and the filing of the appeal, Duke Energy Carolinas has not recorded an adjustment for its deferred coal ash costs in this matter. Duke Energy Carolinas cannot predict the outcome of this matter.
Duke Energy Progress
2017 North Carolina Rate Case
On June 1, 2017, Duke Energy Progress filed an application with the NCUC for a rate increase for retail customers of approximately $477 million, which was subsequently adjusted to $420 million. On November 22, 2017, Duke Energy Progress and the Public Staff filed an Agreement and Stipulation of Partial Settlement resolving certain portions of the proceeding. Terms of the settlement included an ROE of 9.9% and a capital structure of 52% equity and 48% debt. On February 23, 2018, the NCUC issued an order approving the stipulation. The Public Staff, the North Carolina Attorney General and the Sierra Club filed notices of appeal to the North Carolina Supreme Court.
50

FINANCIAL STATEMENTSREGULATORY MATTERS

The North Carolina Supreme Court consolidated the Duke Energy Carolinas and Duke Energy Progress appeals. On December 11, 2020, the North Carolina Supreme Court issued an opinion, which affirmed, in part, and reversed and remanded, in part, the NCUC’s decisions. In the Opinion, the court upheld the NCUC's decision to include coal ash costs in the cost of service, as well as the NCUC’s discretion to allow a return on the unamortized balance of coal ash costs. The court also remanded to the NCUC a single issue to consider the assessment of support for the Public Staff’s equitable sharing argument. In response to an NCUC order seeking comments on the proposed procedure on remand, on January 11, 2021, Duke Energy Carolinas, Duke Energy Progress, the Public Staff, the North Carolina Attorney General, Sierra Club and Carolina Industrial Group for Fair Utility Rates II and III filed joint comments proposing that the NCUC not hold additional evidentiary hearings, but instead rely upon existing records in the 2017 North Carolina rate cases or in the alternative the records in the 2019 North Carolina rate cases, in deciding the issue on remand. On January 22, 2021, Duke Energy Progress and Duke Energy Carolinas entered into the CCR Settlement Agreement with the Settling Parties, which was filed with the NCUC on January 25, 2021, and approved by the NCUC on April 16, 2021. The NCUC issued an Order on Remand Accepting CCR Settlement and Affirming Previous Orders Setting Rates and Imposing Penalties on June 25, 2021.
2019 North Carolina Rate Case
On October 30, 2019, Duke Energy Progress filed an application with the NCUC for a net rate increase for retail customers of approximately $464 million, which represented an approximate 12.3% increase in annual base revenues. The gross rate case revenue increase request was $586 million, which was offset by riders of $122 million, primarily an EDIT rider of $120 million to return to customers North Carolina and federal EDIT resulting from recent reductions in corporate tax rates. The request for a rate increase was driven by major capital investments subsequent to the previous base rate case, coal ash pond closure costs, accelerated coal plant depreciation and deferred 2018 storm costs. Duke Energy Progress sought to defer and recover incremental Hurricane Dorian storm costs in this proceeding and requested rates be effective no later than September 1, 2020. As a result of the COVID-19 pandemic, on March 24, 2020, the NCUC suspended the procedural schedule and postponed the previously scheduled evidentiary hearing on this matter indefinitely. On April 7, 2020, the NCUC issued an order partially resuming the procedural schedule requiring intervenors to file direct testimony on April 13, 2020. Public Staff filed supplemental direct testimony on April 23, 2020. Duke Energy Progress filed rebuttal testimony on May 4, 2020.
On June 2, 2020, Duke Energy Progress and the Public Staff filed an Agreement and Stipulation of Partial Settlement, subject to review and approval of the NCUC, resolving certain issues in the base rate proceeding. On July 27, 2020, Duke Energy Progress filed a joint motion with Duke Energy Carolinas and the Public Staff notifying the commission that the parties reached a joint partial settlement with the Public Staff. On July 31, 2020, Duke Energy Progress and the Public Staff filed a Second Agreement and Stipulation of Partial Settlement, subject to review and approval of the NCUC, resolving certain remaining issues in the base rate proceeding. The remaining items litigated at hearing included recovery of deferred coal ash compliance costs that are subject to asset retirement obligation accounting and implementation of new depreciation rates.
On August 7, 2020, Duke Energy Progress filed a motion for approval of notice required to implement temporary rates, seeking to exercise its statutory right to implement temporary rates subject to refund on or after September 1, 2020. The revenue requirement to be recovered subject to refund through the temporary rates was based on and consistent with the terms of the base rate component of the settlement agreements with the Public Staff and excluded items to be litigated noted above. In addition, Duke Energy Progress also sought authorization to place a temporary decrement EDIT Rider into effect, concurrent with the temporary base rate change. The NCUC approved the August 7, 2020 temporary rates motion on August 11, 2020, and temporary rates went into effect on September 1, 2020.
The Duke Energy Progress evidentiary hearing concluded on October 6, 2020, and post-hearing filings were filed with the NCUC from all parties by December 4, 2020. On January 22, 2021, Duke Energy Progress and Duke Energy Carolinas entered into the CCR Settlement Agreement with the Settling Parties, which was filed with the NCUC on January 25, 2021.
On April 16, 2021, the NCUC issued an order approving the June 2, 2020, and July 31, 2020, partial settlements. The order includes approval of 1) an ROE of 9.6% based upon a capital structure of 52% equity and 48% debt; 2) deferral treatment of approximately $400 million of grid improvement projects with a return; 3) a flow back period of five years for unprotected federal EDIT; and 4) the reasonableness and prudence of approximately $714 million of deferred storm costs, which were removed from the rate case and for which Duke Energy Progress filed a petition seeking securitization in October 2020. Additionally, the order approved without modification the CCR Settlement Agreement.
The order denied Duke Energy Progress' proposal to shorten the remaining depreciable lives of certain Duke Energy Progress coal-fired generating units, indicating the appropriate proceeding for the review of generating plant retirements is Duke Energy Progress' IRP proceeding.
On May 21, 2021, the NCUC issued an Order Approving Rate Schedules, which resulted in a net increase of approximately $178 million. Revised customer rates became effective on June 1, 2021. The deadline to appeal has passed and no parties appealed the NCUC's order.
2018 South Carolina Rate Case
On November 8, 2018, Duke Energy Progress filed an application with the PSCSC for a rate increase for retail customers of approximately $59 million.
After hearings in April 2019, the PSCSC issued an order on May 21, 2019, which included an ROE of 9.5% and a capital structure of 53% equity and 47% debt. The order also included the following material components:
Approval of recovery of $4 million of coal ash costs over a five-year period with a return at Duke Energy Progress' WACC;
Denial of recovery of $65 million of certain coal ash costs deemed to be related to the Coal Ash Act and incremental to the federal CCR rule;
Approval of a $17 million decrease to base rates to reflect the change in ongoing tax expense, primarily the reduction in the federal income tax rate from 35% to 21%;
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FINANCIAL STATEMENTSREGULATORY MATTERS

Approval of a $12 million decrease through the EDIT Tax Savings Rider resulting from the federal tax rate change and deferred revenues since January 2018 related to the change, to be returned in accordance with ARAM for protected EDIT, over a 20-year period for unprotected EDIT associated with Property, Plant and Equipment, over a five-year period for unprotected EDIT not associated with Property, Plant and Equipment and over a three-year period for the deferred revenues; and
Approval of a $12 million increase due to the expiration of EDIT related to reductions in the North Carolina state income tax rate from 6.9% to 2.5%.
As a result of the order, revised customer rates were effective June 1, 2019. On May 31, 2019, Duke Energy Progress filed a Petition for Rehearing or Reconsideration of that order contending substantial rights of Duke Energy Progress were prejudiced by unlawful, arbitrary and capricious rulings by the PSCSC on certain issues presented in the proceeding. On June 19, 2019, the PSCSC issued a Directive denying Duke Energy Progress' request to rehear or reconsider the commission's rulings on certain issues presented in the proceeding including coal ash remediation and disposal costs, ROE and the recovery of a return on deferred operation and maintenance expenses, but allowing additional litigation-related costs. As a result of the Directive allowing litigation-related costs, customer rates were revised effective July 1, 2019. An order detailing the commission's decision in the Directive was issued on October 18, 2019. Duke Energy Progress filed a notice of appeal on November 15, 2019, with the Supreme Court of South Carolina. Initial briefs were filed on April 21, 2020. Response briefs were filed on July 6, 2020, and reply briefs were filed on August 11, 2020. Oral arguments were heard before the Supreme Court of South Carolina on May 26, 2021. Based on legal analysis and the filing of the appeal, Duke Energy Progress has not recorded an adjustment for its deferred coal ash costs in this matter. Duke Energy Progress cannot predict the outcome of this matter.
Western Carolinas Modernization Plan
On October 8, 2018, Duke Energy Progress filed an application with the NCUC for a CPCN to construct the Hot Springs Microgrid Solar and Battery Storage Facility, which was approved with certain conditions on May 10, 2019. A hearing to update the NCUC on the status of the project was held on March 5, 2020. Construction began in May 2020 with commercial operation expected to begin in October 2021.
On July 27, 2020, Duke Energy Progress filed an application with the NCUC for a CPCN to construct the Woodfin Solar Facility, a 5-MW solar generating facility to be constructed on a closed landfill in Buncombe County. The expert hearing was held on November 18, 2020. The application was approved and a CPCN was granted by order of the NCUC on April 20, 2021.
FERC Return on Equity Complaints
On October 11, 2019, North Carolina Eastern Municipal Power Agency (NCEMPA) filed a complaint at the FERC against Duke Energy Progress pursuant to Section 206 of the Federal Power Act (FPA), alleging that the 11% stated ROE component contained in the demand formula rate in the Full Requirements Power Purchase Agreement (FRPPA) between NCEMPA and Duke Energy Progress is unjust and unreasonable. On July 16, 2020, the FERC set this matter for hearing and settlement judge procedures and established a refund effective date of October 11, 2019. In its order setting the matter for settlement, the FERC allowed for the consideration of variations to the base transmission-related ROE methodology developed in its Order No. 569-A, through the introduction of “specific facts and circumstances” involving issues specific to the case. The parties reached a settlement in principle at a settlement conference on January 7, 2021, and filed a settlement package on March 10, 2021. The FERC Trial Staff filed comments in support of the settlement. On April 19, 2021, the Settlement Judge certified the settlement to the FERC as an uncontested settlement. The FERC approved the settlement on May 25, 2021, and Duke Energy Progress filed compliance documents on June 10, 2021.
On October 16, 2020, North Carolina Electric Membership Corporation (NCEMC) filed a complaint at the FERC against Duke Energy Progress pursuant to Section 206 of the FPA, alleging that the 11% stated ROE component in the demand formula rate in the Power Supply and Coordination Agreement between NCEMC and Duke Energy Progress is unjust and unreasonable. Under FPA Section 206, the earliest refund effective date that the FERC can establish is the date of the filing of the complaint. Duke Energy Progress responded to the complaint on November 20, 2020, seeking dismissal, demonstrating that the 11% ROE is just and reasonable for the service provided. The parties filed responsive pleadings and are awaiting an order from the FERC. Duke Energy Progress cannot predict the outcome of this matter.
Duke Energy Florida
2021 Settlement Agreement
On January 14, 2021, Duke Energy Florida filed a Settlement Agreement (the “2021 Settlement”) with the FPSC. The parties to the 2021 Settlement include Duke Energy Florida, the Office of Public Counsel (OPC), the Florida Industrial Power Users Group, White Springs Agricultural Chemicals, Inc. d/b/a PCS Phosphate and NUCOR Steel Florida, Inc. (collectively, the “Parties”).
Pursuant to the 2021 Settlement, the Parties agreed to a base rate stay-out provision that expires year-end 2024; however, Duke Energy Florida is allowed an increase to its base rates of an incremental $67 million in 2022, $49 million in 2023 and $79 million in 2024, subject to adjustment in the event of tax reform during the years 2021, 2022 and 2023. The Parties also agreed to an ROE band of 8.85% to 10.85% with a midpoint of 9.85% based on a capital structure of 53% equity and 47% debt. The ROE band can be increased by 25 basis points if the average 30-year U.S. Treasury rate increases 50 basis points or more over a six-month period in which case the midpoint ROE would rise from 9.85% to 10.10%. Duke Energy Florida will also be able to retain the DOE award of approximately $173 million for spent nuclear fuel, which is expected to be received in 2022, in order to mitigate customer rates over the term of the 2021 Settlement. In return, Duke Energy Florida will be able to recognize the $173 million into earnings from 2022 through 2024.
In addition to these terms, the 2021 Settlement contains provisions related to the accelerated depreciation of Crystal River Units 4-5, the approval of approximately $1 billion in future investments in new cost-effective solar power, the implementation of a new Electric Vehicle Charging Station Program and the deferral and recovery of costs in connection with the implementation of Duke Energy Florida’s Vision Florida program, which explores various emerging non-carbon emitting generation technology, distributed technologies and resiliency projects, among other things. The 2021 Settlement also resolves remaining unrecovered storm costs for Hurricane Dorian and Hurricane Michael.
The FPSC approved the 2021 Settlement on May 4, 2021, issuing an order on June 4, 2021. Revised customer rates will be effective January 1, 2022, with subsequent base rate increases effective January 1, 2023, and January 1, 2024.
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FINANCIAL STATEMENTSREGULATORY MATTERS

Storm Restoration Cost Recovery
Duke Energy Florida filed a petition with the FPSC on April 30, 2019, to recover $223 million of estimated retail incremental storm restoration costs for Hurricane Michael, consistent with the provisions in the 2017 Settlement, and the FPSC approved the petition on June 11, 2019. The FPSC also approved allowing Duke Energy Florida to use the tax savings resulting from the Tax Act to recover these storm costs in lieu of implementing a storm surcharge. Approved storm costs are currently expected to be fully recovered by year-end 2021. On November 22, 2019, Duke Energy Florida filed a petition for approval of actual retail recoverable storm restoration costs related to Hurricane Michael in the amount of $191 million plus interest. On May 19, 2020, Duke Energy Florida filed a supplemental true up reducing the actual retail recoverable storm restoration costs related to Hurricane Michael by approximately $3 million, resulting in a total request to recover $188 million actual retail recoverable storm restoration costs, plus interest. Approximately $3 million and $80 million of these costs are included in Regulatory assets within Current Assets and Other Noncurrent Assets on the Condensed Consolidated Balance Sheets as of June 30, 2021, and December 31, 2020, respectively.
Duke Energy Florida filed a petition with the FPSC on December 19, 2019, to recover $169 million of estimated retail incremental storm restoration costs for Hurricane Dorian, consistent with the provisions in the 2017 Settlement and the FPSC approved the petition on February 24, 2020. The final actual amount of $145 million was filed on September 30, 2020. The 2021 Settlement resolved all matters regarding storm cost recovery relating to Hurricane Michael and Hurricane Dorian.
Clean Energy Connection
On July 1, 2020, Duke Energy Florida petitioned the FPSC for approval of a voluntary solar program. The program consists of 10 new solar generating facilities with combined capacity of approximately 750 MW. The program allows participants to support cost-effective solar development in Florida by paying a subscription fee based on per kilowatt-subscriptions and receiving a credit on their bill based on the actual generation associated with their portion of the solar portfolio. The estimated cost of the 10 new solar generation facilities is approximately $1 billion over the next four years, and this investment will be included in base rates offset by the revenue from the subscription fees. The credits will be included for recovery in the fuel cost recovery clause. A remote hearing was held on November 17, 2020, and post-hearing briefs were filed with the FPSC from all parties by December 9, 2020. The FPSC voted to approve the program on January 5, 2021, and issued its written order on January 26, 2021.
On February 24, 2021, the League of United Latin American Citizens (LULAC) filed a notice of appeal of the FPSC’s order approving the Clean Energy Connection to the Supreme Court of Florida. LULAC's initial brief was filed on May 26, 2021, and Appellees' response briefs were filed on July 26, 2021. The FPSC approval order remains in effect pending the outcome of the appeal. Duke Energy Florida cannot predict the outcome of this matter.
Duke Energy Ohio
Ohio House Bill 6
On July 23, 2019, House Bill 6 was signed into law and became effective January 1, 2020. Among other things, the bill allows for funding, through a rider mechanism referred to as the Clean Air Fund (Rider CAF), of 2 nuclear generating facilities located in Northern Ohio owned by Energy Harbor (f/k/a FirstEnergy Solutions), repeal of energy efficiency mandates and recovery of prudently incurred costs, net of any revenues, for Ohio investor-owned utilities that are participants under the OVEC power agreement. The recovery is through a non-bypassable rider that replaced any existing recovery mechanism approved by the PUCO and will remain in place through 2030. As such, Duke Energy Ohio created the Legacy Generation Rider (Rider LGR) that replaced Rider PSR effective January 1, 2020. The amounts recoverable from customers are subject to an annual cap, with incremental costs that exceed such cap eligible for deferral and recovery subject to review. See Note 11 for additional discussion of Duke Energy Ohio's ownership interest in OVEC. House Bill 128 was signed into law on March 31, 2021, and became effective June 30, 2021. The bill removes nuclear plant funding from Rider CAF and does not impact OVEC cost recovery.
Energy Efficiency Cost Recovery
On February 26, 2020, the PUCO issued an order directing utilities to wind down their demand-side management programs by September 30, 2020, and to terminate the programs by December 31, 2020, in response to changes in Ohio law that eliminated Ohio's energy efficiency mandates. On March 27, 2020, Duke Energy Ohio filed an Application for Rehearing seeking clarification on the final true up and reconciliation process after 2020. On November 18, 2020, the PUCO issued 2 orders on the application for rehearing. The first order was a Third Entry on Rehearing on the Duke Energy Ohio portfolio holding the cost cap previously imposed was unlawful, a shared savings cap of $8 million pretax should be imposed and lost distribution revenues could not be recovered after December 31, 2020. The second order directs all utilities set the rider to zero effective January 1, 2021, and to file a separate application for final reconciliation of all energy efficiency costs prior to December 31, 2020. On December 18, 2020, Duke Energy Ohio filed an application for rehearing. On January 13, 2021, the application for rehearing was granted for further consideration. Duke Energy Ohio cannot predict the outcome of this matter.
On October 9, 2020, Duke Energy Ohio filed an application to implement a voluntary energy efficiency program portfolio to commence on January 1, 2021. The application proposes a mechanism for recovery of program costs and a benefit associated with avoided transmission and distribution costs. The application remains under review. Effective January 1, 2021, Duke Energy Ohio suspended its energy efficiency programs due to changes in Ohio law. On June 14, 2021, the PUCO issued an entry for each utility to file by July 15, 2021, a proposal to reestablish low-income programs through December 31, 2021. Duke Energy Ohio filed its application on July 14, 2021. Duke Energy Ohio cannot predict the outcome of this matter.
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FINANCIAL STATEMENTSREGULATORY MATTERS

Natural Gas Pipeline Extension
Duke Energy Ohio is installing a new natural gas pipeline (the Central Corridor Project) in its Ohio service territory to increase system reliability and enable the retirement of older infrastructure. Duke Energy Ohio currently estimates the pipeline development costs and construction activities will range from $163 million to $245 million in direct costs (excluding overheads and AFUDC) and that construction of the pipeline extension will be completed before the 2021/2022 winter season. An evidentiary hearing on Duke Energy Ohio's application for a Certificate of Environmental Compatibility and Public Need concluded on April 11, 2019. On November 21, 2019, the Ohio Power Siting Board (OPSB) approved Duke Energy Ohio's application subject to 41 conditions on construction. Applications for rehearing were filed by several stakeholders on December 23, 2019, arguing that the OPSB approval was incorrect. On February 20, 2020, the OPSB denied the rehearing requests. On April 15, 2020, Those stakeholders filed a notice of appeal at the Supreme Court of Ohio of the OPSB’s decision approving Duke Energy Ohio’s Central Corridor project application. The appeal was fully briefed and the Ohio Supreme Court oral argument was held on March 31, 2021.er.
On September 22, 2020, Duke Energy Ohio filed an application with the OPSB for approval to amend the certificated pipeline route due to changes in the route negotiated with property owners and municipalities. On January 21, 2021, the OPSB approved the amended filing with recommended conditions that reaffirm previous conditions and provide guidance regarding local permitting and construction supervision. Duke Energy Ohio cannot predict the outcome of this matter.
MGP Cost Recovery
In an order issued in 2013, the PUCO approved Duke Energy Ohio's deferral and recovery of costs related to environmental remediation at 2 sites (East End and West End) that housed former MGP operations. Duke Energy Ohio has collected approximately $55 million in environmental remediation costs incurred between 2009 through 2012 through Rider MGP, which is currently suspended. Duke Energy Ohio has made annual applications with the PUCO to recover its incremental remediation costs consistent with the PUCO’s directive in Duke Energy Ohio’s 2012 natural gas base rate case. To date, the PUCO has not ruled on Duke Energy Ohio’s annual applications for the calendar years 2013 through 2019. On September 28, 2018, the staff of the PUCO 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. On March 29, 2019, Duke Energy Ohio filed its annual application to recover incremental remediation expense for the calendar year 2018 seeking recovery of approximately $20 million in remediation costs. On July 12, 2019, the staff recommended a disallowance of approximately $11 million for work that staff believes occurred in areas not authorized for recovery. Additionally, staff recommended that any discussion pertaining to Duke Energy Ohio's recovery of ongoing MGP costs should be directly tied to or netted against insurance proceeds collected by Duke Energy Ohio. An evidentiary hearing concluded on November 21, 2019. Initial briefs were filed on January 17, 2020, and reply briefs were filed on February 14, 2020. Duke Energy Ohio cannot predict the outcome of this matter.
On March 31, 2020, Duke Energy Ohio filed its annual application to recover incremental MGP remediation expense, seeking recovery of approximately $39 million in remediation costs incurred during 2019. On July 23, 2020, the staff of the PUCO recommended a disallowance of approximately $4 million for work the staff believes occurred in areas not authorized for recovery. Additionally, the staff recommended insurance proceeds, net of litigation costs and attorney fees, should be paid to customers and not be held by Duke Energy Ohio until all investigation and remediation is complete. Duke Energy Ohio filed comments in response to the staff report on August 21, 2020, and intervenor comments were filed on November 9, 2020. Duke Energy Ohio cannot predict the outcome of this matter.
The 2012 PUCO order also contained conditional deadlines for completing the MGP environmental remediation and the deferral of related remediation costs. Subsequent to the order, the deadline was extended to December 31, 2019. On May 10, 2019, Duke Energy Ohio filed an application requesting a continuation of its existing deferral authority for MGP remediation that must occur after December 31, 2019. On July 12, 2019, staff recommended the commission deny the deferral authority request. On September 13, 2019, intervenor comments were filed opposing Duke Energy Ohio's request for continuation of existing deferral authority and on October 2, 2019, Duke Energy Ohio filed reply comments. Duke Energy Ohio cannot predict the outcome of this matter.
Tax Act – Ohio
On December 21, 2018, Duke Energy Ohio filed an application to change its base rate tariffs and establish a new rider to implement the benefits of the Tax Act for natural gas customers. Duke Energy Ohio requested commission approval to implement the tariff changes and rider effective April 1, 2019. The new rider will flow through to customers the benefit of the reduction in the statutory federal tax rate from 35% to 21% since January 1, 2018, all future benefits of the lower tax rates and a full refund of deferred income taxes collected at the higher tax rates in prior years. Deferred income taxes subject to normalization rules will be refunded consistent with federal law and deferred income taxes not subject to normalization rules will be refunded over a 10-year period. The PUCO established a procedural schedule and testimony was filed on July 31, 2019. An evidentiary hearing occurred on August 7, 2019. Initial briefs were filed on September 11, 2019. Reply briefs were filed on September 25, 2019. Duke Energy Ohio cannot predict the outcome of this matter.
Duke Energy Kentucky Natural Gas Base Rate Case
On June 1, 2021, Duke Energy Kentucky filed an application with the KPSC requesting an increase in natural gas base rates of approximately $15 million, an approximate 13% average increase across all customer classes. The drivers for this case are capital invested since Duke Energy Kentucky's last natural gas base rate case in 2018. Duke Energy Kentucky is also seeking implementation of a Governmental Mandate Adjustment mechanism (Rider GMA) in order to recover from or pay to customers the financial impact of governmental directives and mandates, including changes in federal or state tax rates and regulations issued by the Pipeline and Hazardous Materials Safety Administration. The KPSC accepted Duke Energy Kentucky’s filing as of June 3, 2021, as meeting all filing requirements and issued its first round of discovery. A procedural schedule was set with a hearing scheduled for October 18, 2021. Duke Energy Kentucky cannot predict the outcome of this matter.
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FINANCIAL STATEMENTSREGULATORY MATTERS

Duke Energy Indiana
2019 Indiana Rate Case
On July 2, 2019, Duke Energy Indiana filed a general rate case with the IURC for a rate increase for retail customers of approximately $395 million. The rebuttal case, filed on December 4, 2019, updated the requested revenue requirement to result in a 15.6% or $396 million average retail rate increase, including the impacts of the Utility Receipts Tax. Hearings concluded on February 7, 2020. On June 29, 2020, the IURC issued an order in the rate case approving a revenue increase of $146 million before certain adjustments and ratemaking refinements. The order approved Duke Energy Indiana’s requested forecasted rate base of $10.2 billion as of December 31, 2020, including the Edwardsport Integrated Gasification Combined Cycle (IGCC) Plant. The IURC reduced Duke Energy Indiana’s request by slightly more than $200 million, when accounting for the utility receipts tax and other adjustments. Approximately 50% of the reduction was due to a prospective change in depreciation and use of regulatory asset for the end-of-life inventory at retired generating plants, approximately 20% was due to the approved ROE of 9.7% versus the requested ROE of 10.4% and approximately 20% was related to miscellaneous earnings neutral adjustments. Step one rates were estimated to be approximately 75% of the total and became effective on July 30, 2020. Step two rates are estimated to be the remaining 25% of the total rate increase. Step two rates were approved July 28, 2021, and implemented in August 2021. Step two rates are based on a return on equity of 9.7% and actual December 31, 2020 capital structure with a 54% equity component. Step two rates will be reconciled to January 1, 2021. Several groups appealed the IURC order to the Indiana Court of Appeals. Appellate briefs were filed on October 14, 2020, focusing on three issues: wholesale sales allocations, coal ash basin cost recovery and the Edwardsport IGCC operating and maintenance expense level approved. The appeal was fully briefed in January 2021 and an oral argument was held on April 8, 2021. The Indiana Court of Appeals affirmed the IURC decision on May 13, 2021. The Indiana Office of Utility Consumer Counselor (OUCC) and the Duke Industrial Group filed a joint petition to transfer the rate case appeal to the Indiana Supreme Court on June 28, 2021. Response briefs were filed July 19, 2021. Duke Energy Indiana cannot predict the outcome of this matter.
2020 Indiana Coal Ash Recovery Case
In Duke Energy Indiana’s 2019 rate case, the IURC approved coal ash basin closure costs expended through 2018 including financing costs as a regulatory asset and included in rate base. The IURC also opened a subdocket to deal with the post-2018 coal ash related expenditures. Duke Energy Indiana filed testimony on April 15, 2020, in the coal ash subdocket requesting recovery for the post-2018 coal ash basin closure costs for plans that have been approved by the Indiana Department of Environmental Management as well as continuing deferral, with carrying costs, on the balance. An evidentiary hearing was held on September 14, 2020, and the parties agreed on a delayed briefing schedule that allows for the Indiana Rate Case appeal to proceed. Briefing will be completed by mid-September 2021. Duke Energy Indiana cannot predict the outcome of this matter.
Piedmont
2020 Tennessee Rate Case
On July 2, 2020, Piedmont filed an application with the TPUC, its first general rate case in Tennessee in nine years, for a rate increase for retail customers of approximately $30 million, which represents an approximate 15% increase in annual revenues. The rate increase is driven by significant infrastructure upgrade investments since Piedmont's previous rate case. Approximately half of the plant additions being added to rate base are categories of capital investment not covered under the IMR mechanism, which was approved in 2013. Piedmont amended its requested increase to approximately $26 million in December 2020. As authorized under Tennessee law, Piedmont implemented interim rates on January 2, 2021, at the level requested in its adjusted request. A settlement reached with the Tennessee Consumer Advocate in mid-January was filed with the TPUC on February 2, 2021. The settlement results in an increase of revenues of approximately $16 million and an ROE of 9.8%. On May 6, 2021, the TPUC issued an order approving the settlement. Revised customer rates became effective January 2, 2021. Piedmont refunded customers the difference between bills previously rendered under interim rates and such bills if rendered under approved rates, plus interest, in April 2021.
2021 North Carolina Rate Case
On March 22, 2021, Piedmont filed an application with the NCUC for a rate increase for retail customers of approximately $109 million, which represents an approximate 10% increase in retail revenues. The rate increase is driven by customer growth and significant infrastructure upgrade investments (plant additions) since the last general rate case. Approximately 30% of the plant additions being rolled into rate base are categories of plant investment that are covered under the IMR mechanism, which was originally approved as part of the 2013 North Carolina Rate Case. On July 28, 2021, Piedmont amended its requested increase to approximately $97 million. The NCUC has established a procedural schedule with an evidentiary hearing to commence on September 7, 2021. Piedmont cannot predict the outcome of this matter.
OTHER REGULATORY MATTERS
Atlantic Coast Pipeline, LLC
Atlantic Coast Pipeline (ACP pipeline) was planned to be an approximately 600-mile interstate natural gas pipeline running from West Virginia to North Carolina. Duke Energy indirectly owns a 47% interest, which is accounted for as an equity method investment through its Gas Utilities and Infrastructure segment.
As a result of the uncertainty created by various legal rulings, the potential impact on the cost and schedule for the project, the ongoing legal challenges and the risk of additional legal challenges and delays through the construction period and Dominion’s decision to sell substantially all of its gas transmission and storage segment assets, Duke Energy's Board of Directors and management decided that it was not prudent to continue to invest in the project. On July 5, 2020, Duke Energy and Dominion announced the cancellation of the ACP pipeline project.
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FINANCIAL STATEMENTSREGULATORY MATTERS

As part of the pretax charges to earnings of approximately $2.1 billion recorded in June 2020, within Equity in (losses) earnings of unconsolidated affiliates on the Duke Energy Condensed Consolidated Statements of Operations, Duke Energy established liabilities related to the cancellation of the ACP pipeline project. In February 2021, Duke Energy paid approximately $855 million to fund ACP's outstanding debt, relieving Duke Energy of its guarantee. At June 30, 2021, there is $33 million and $69 million within Other Current Liabilities and Other Noncurrent Liabilities, respectively, in the Gas Utilities and Infrastructure segment. The liabilities represent Duke Energy's obligation of approximately $102 million to satisfy remaining ARO requirements to restore construction sites.
See Notes 1 and 11 for additional information regarding this transaction.
Potential Coal Plant Retirements
The Subsidiary Registrants periodically file integrated resource plans (IRPs) with their state regulatory commissions. The IRPs provide a view of forecasted energy needs over a long term (10 to 20 years) and options being considered to meet those needs. IRPs filed by the Subsidiary Registrants included planning assumptions to potentially retire certain coal-fired generating facilities in North Carolina and Indiana earlier than their current estimated useful lives. Duke Energy continues to evaluate the potential need to retire these coal-fired generating facilities earlier than the current estimated useful lives and plans to seek regulatory recovery for amounts that would not be otherwise recovered when any of these assets are retired.
The table below contains the net carrying value of generating facilities planned for retirement or included in recent IRPs as evaluated for potential retirement. Dollar amounts in the table below are included in Net property, plant and equipment on the Condensed Consolidated Balance Sheets as of June 30, 2021, and exclude capitalized asset retirement costs.
Remaining Net
CapacityBook Value
(in MW)(in millions)
Duke Energy Carolinas
Allen Steam Station Units 1-2(a)
324 $20 
Allen Steam Station Units 4-5(b)
516 376 
Cliffside Unit 5(b)
544 337 
Duke Energy Progress
Mayo Unit 1(b)
704 650 
Roxboro Units 3-4(b)
1,392 474 
Duke Energy Florida
Crystal River Units 4-5(c)
1,410 1,670 
Duke Energy Indiana (d)
Gibson Units 1-5(e)
2,822 1,840 
Cayuga Units 1-2(e)
995 736 
Total Duke Energy8,707