UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934
Date of Report (Date of earliest event reported): December 11, 2020
| Commission file number | Registrant, State of Incorporation or Organization, Address of Principal Executive Offices and Telephone Number | IRS Employer Identification Number | |||||||||
 | |||||||||||
(a Delaware corporation)
(a North Carolina limited liability company)
(a North Carolina limited liability company)
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:
| Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425) | |||||
| Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12) | |||||
| Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b)) | |||||
Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c)) | |||||
SECURITIES REGISTERED PURSUANT TO SECTION 12(b) OF THE ACT: | ||||||||||||||||||||
| Registrant | Title of each class | Trading Symbol(s) | Name of each exchange on which registered | |||||||||||||||||
| Duke Energy | ||||||||||||||||||||
| Duke Energy | ||||||||||||||||||||
| Duke Energy | ||||||||||||||||||||
| Duke Energy | ||||||||||||||||||||
| each representing a 1/1,000th interest in a share of 5.75% Series A Cumulative Redeemable Perpetual Preferred Stock, par value $0.001 per share | ||||||||||||||||||||
Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter).
Emerging growth company ☐
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. o
Item 7.01. Regulation FD.
On December 11, 2020, the North Carolina Supreme Court (the “Court”) issued an opinion (the “Opinion”) on the consolidated appeals of the orders of the North Carolina Utilities Commission (“NCUC”) addressing the 2017 rate cases of Duke Energy Carolinas, LLC (“DEC”) and Duke Energy Progress, LLC (“DEP”), which allowed DEC and DEP to recover costs associated with coal ash management and safe basin closure.
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 Opinion also remanded to the NCUC a single issue - to consider the assessment of support for the North Carolina Public Staff’s (“Public Staff”) equitable sharing argument. The NCUC has rejected Public Staff's equitable sharing argument in several rate case orders, and Duke Energy looks forward to the NCUC providing additional details regarding the basis for its decision pursuant to the Court's Opinion.
We do not believe the Court’s Opinion results in any accounting implications or other impacts to customer rates.
DEC and DEP have pending rate cases before the NCUC which include requests for recovery of additional coal ash costs. An order is expected in the DEC case by mid-January, and the DEP case approximately one month later.
Forward Looking Statements
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;
•The ability to successfully operate electric generating facilities and deliver electricity to customers including direct or indirect effects to the company resulting from an incident that affects the U.S. electric grid or generating resources;
•The ability to obtain the necessary permits and approvals and to complete necessary or desirable pipeline expansion or infrastructure projects in our natural gas business;
•Operational interruptions to our natural gas distribution and transmission activities;
•The availability of adequate interstate pipeline transportation capacity and natural gas supply;
•The impact on facilities and business from a terrorist attack, cybersecurity threats, data security breaches, operational accidents, information technology failures or other catastrophic events, such as fires, explosions, pandemic health events or other similar occurrences;
•The inherent risks associated with the operation of nuclear facilities, including environmental, health, safety, regulatory and financial risks, including the financial stability of third-party service providers;
•The timing and extent of changes in commodity prices and interest rates and the ability to recover such costs through the regulatory process, where appropriate, and their impact on liquidity positions and the value of underlying assets;
•The results of financing efforts, including the ability to obtain financing on favorable terms, which can be affected by various factors, including credit ratings, interest rate fluctuations, compliance with debt covenants and conditions and general market and economic conditions;
•Credit ratings of Duke Energy Carolinas, Duke Energy Progress, and Duke Energy Corporation (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;
•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; 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.
Item 9.01. Financial Statements and Exhibits.
(d) Exhibits.
104 Cover Page Interactive Data File (the cover page XBRL tags are embedded in the Inline XBRL document).
SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.
| DUKE ENERGY CORPORATION | |||||
| Date: December 11, 2020 | By: /s/ David S. Maltz | ||||
| Name: David S. Maltz | |||||
| Title: Vice President, Legal, Chief Governance Officer and Assistant Corporate Secretary | |||||
| DUKE ENERGY CAROLINAS, LLC | |||||
| Date: December 11, 2020 | By: /s/ David S. Maltz | ||||
| Name: David S. Maltz | |||||
| Title: Vice President, Legal, Chief Governance Officer and Assistant Secretary | |||||
| DUKE ENERGY PROGRESS, LLC | |||||
| Date: December 11, 2020 | By: /s/ David S. Maltz | ||||
| Name: David S. Maltz | |||||
| Title: Vice President, Legal, Chief Governance Officer and Assistant Secretary | |||||