Duke Energy Carolinas (DEC) and Duke Energy Progress (DEP) have filed rate cases with the North Carolina Utilities Commission (NCUC) seeking approval for increases in retail revenues. The filings include requests for performance-based regulation (PBR) mechanisms, featuring a 2-year multi-year rate plan (MYRP), residential decoupling, performance incentive mechanisms (PIMS), and an earnings sharing mechanism (ESM).
If approved, the overall net retail revenue increase for DEC is a projected 15.0% and for DEP is a projected 15.1%. The companies have requested the NCUC approve the requested total year 1 rates to be effective no later than January 1, 2027, with hearings expected to commence in Q3 2026.
DEC's historic base case is based on a North Carolina retail rate base of approximately $26.5 billion as of December 31, 2024, adjusted for known and measurable changes projected through March 31, 2026. The MYRP includes impacts of approximately $4.4 billion of capital projects projected to go in service over the 2-year MYRP period.
DEP's historic base case is based on a North Carolina retail rate base of approximately $17.9 billion as of December 31, 2024, adjusted for known and measurable changes projected through March 31, 2026. The MYRP includes impacts of approximately $3.9 billion of capital projects projected to go in service over the 2-year MYRP period.
DEC's rate increase is driven by significant historical plant investments and changes, including changes in depreciation rates, MYRP projected investments, ROE and capital structure, coal ash compliance costs, storm reserve, storm securitization reconciliation, and other factors. Major capital investments include increases in plant balances, transmission and distribution (T&D) investments, and investment in energy storage, solar, and solar paired with storage assets.
DEP's rate increase is primarily driven by significant historical plant investments and changes, MYRP projected investments, ROE and capital structure, coal ash compliance costs, storm reserve, storm securitization reconciliation, and other factors. Major capital investments include increases in plant balances, T&D investments, and investment in energy storage, solar, and solar paired with storage assets.
Both companies have requested an overall rate of return of 7.92% based upon an ROE of 10.95% with a 53% equity component in the capital structure. They have also requested recovery of deferred coal ash closure costs and establishment of storm reserves.
The applications also request a 2-year MYRP with an ESM. If adjusted annual earnings exceed the authorized ROE plus 50 basis points, the excess earnings will be distributed to customers through a rider. Additionally, there are proposed changes to PIMS and tracking metrics, with associated rewards and penalties. As a result of these announcements, the company's shares have moved 0.13% on the market, and are now trading at a price of $122.695. Check out the company's full 8-K submission here.
