Duke Energy Carolinas, a subsidiary of Duke Energy Corporation, recently received approval for its 2024 South Carolina rate case, resulting in significant changes to its original request. The company initially sought an 11.4% increase in annual retail revenues, amounting to approximately $239 million over two years, with an additional 4.1% increase thereafter. The total requested increase was 15.5%, or around $323 million.
However, the final order approved by the Public Service Commission of South Carolina (PSCSC) has resulted in adjustments to these figures. The annual customer rate increase prior to the return of federal unprotected Excess Deferred Income Taxes (EDIT) balances has been reduced to $234 million. After accounting for the accelerated return of EDIT balances over two years, the net annual rate increase for the first two years is $150 million, translating to an average 7.2% increase in annual retail revenues during this period.
The return on equity has been adjusted to 9.94%, down from the initially proposed 10.5%. Additionally, the equity component of the capital structure has been reduced to 51.21% from the original 53%. The coal ash recovery amount, grid improvement plan investments, and other revenue changes have also been revised, leading to a cumulative net increase of $234 million for the first two years.
As a result of these changes, Duke Energy Corporation will recognize a one-time pre-tax accounting charge of approximately $30-40 million in Q2 2024.
The revised customer rates are set to go into effect on August 1, 2024, following the PSCSC's written order issued on July 3, 2024. These adjustments reflect the outcome of negotiations and stipulations between Duke Energy Carolinas, the Office of Regulatory Staff, and various other parties involved in the rate case proceedings. Following these announcements, the company's shares moved 0.2%, and are now trading at a price of $100.75. For the full picture, make sure to review Duke Energy's 8-K report.
