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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):
October 27, 2021
Commission file number
|
Registrant, State of Incorporation or Organization,
Address of Principal Executive Offices and Telephone Number
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IRS Employer
Identification Number
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1-32853
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DUKE ENERGY CORPORATION
(a Delaware corporation)
550 South Tryon Street
Charlotte, North Carolina 28202-1803
704-382-3853
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20-2777218
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1-4928
|
DUKE
ENERGY CAROLINAS, LLC
(a North Carolina limited liability company)
526 South Church Street
Charlotte, North Carolina 28202-1803
704-382-3853
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56-0205520
|
|
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1-3382
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DUKE ENERGY PROGRESS, LLC
(an North Carolina limited liability company)
410 South Wilmington Street
Raleigh, North Carolina 27601-1748
704-382-3853
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56-0165465
|
|
|
|
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
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Title of each class
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Trading
Symbol(s)
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Name
of each exchange on which
registered
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Duke Energy
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Common Stock, $0.001 par value
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DUK
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New York Stock Exchange LLC
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Duke Energy
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5.625% Junior Subordinated Debentures due September 15, 2078
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DUKB
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New York Stock Exchange LLC
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Duke Energy
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Depositary Shares each representing a 1/1,000th interest in a share of 5.75% Series A Cumulative Redeemable Perpetual Preferred Stock, par value $0.001 per share
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DUK PR A
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New York Stock Exchange LLC
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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. ¨
Item 7.01. Regulation FD Disclosure.
In connection with the rate case applications filed in South Carolina
in 2018 by each of Duke Energy Carolinas, LLC (“DEC”) and Duke Energy Progress, LLC (“DEP”), the Public Service
Commission of South Carolina (the “PSCSC”) issued orders in May 2019 (the “PSCSC Orders”) in the two rate cases
which, among other things, denied recovery of $115 million of certain coal ash remediation costs at DEC and $65 million of certain coal
ash remediation costs at DEP. These costs were deemed by the PSCSC to be related to the North Carolina Coal Ash Management Act of 2014
(“CAMA”) and incremental to the federal Coal Combustion Residuals Rule (the “CCR Rules”). After filing Petitions
for Rehearing or Reconsideration in 2019, which were subsequently denied by the PSCSC, DEC and DEP each filed an appeal with the Supreme
Court of South Carolina (the “Court”) in November 2019.
On October 27, 2021, the Court issued an opinion affirming the
PSCSC’s decision to (1) disallow cost recovery on coal ash compliance costs the PSCSC deemed as incremental to the CCR Rules;
(2) disallow recovery of coal ash litigation expenses incurred by both DEC and DEP; (3) disallow a return on certain deferred
expenses; and 4) allow recovery of pre-construction costs related to the Lee Nuclear Station by DEC. The Court’s decision
notes the prior recommendation of the South Carolina Office of Regulatory Staff that DEC and DEP could ask for coal ash costs not
initially approved in the PSCSC Orders to be submitted for recovery in the future by DEC and DEP if they can be attributed to the
CCR Rules rather than CAMA. Petitions for rehearing are due November 11, 2021, unless an extension is sought and granted.
As a result
of the Court’s opinion, DEC and DEP expect to recognize total estimated pre-tax charges of approximately $100 million to $200
million in the third quarter of 2021 principally related to coal ash remediation at retired coal sites. Additionally, future annual earnings
impacts resulting from the Court’s opinion are not considered material. These estimated impacts could change in the future if federal
rules and regulations covering coal ash remediation are modified, coal ash remediation estimates are changed, or the remaining estimated
depreciable lives of the related coal plants are revised.
Item 2.06. Material Impairments.
The information contained in Item 7.01 above relating to material charges
is incorporated into this Item 2.06 by reference.
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:
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·
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The
impact of the COVID-19 pandemic;
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·
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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;
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·
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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;
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·
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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;
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·
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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;
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·
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Costs
and effects of legal and administrative proceedings, settlements, investigations and claims;
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·
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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;
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·
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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;
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·
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Advancements
in technology;
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·
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Additional
competition in electric and natural gas markets and continued industry consolidation;
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·
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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;
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·
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Changing
customer expectations and demands including heightened emphasis on environmental, social and governance concerns;
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·
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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;
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·
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Operational
interruptions to our natural gas distribution and transmission activities;
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·
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The
availability of adequate interstate pipeline transportation capacity and natural gas supply;
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·
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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;
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·
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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;
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·
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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;
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·
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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;
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·
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Credit
ratings of the Duke Energy and its subsidiaries (the “Duke Energy Registrants) may be different from what is expected;
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·
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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;
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·
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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;
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·
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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;
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·
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The
ability to control operation and maintenance costs;
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·
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The
level of creditworthiness of counterparties to transactions;
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·
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The
ability to obtain adequate insurance at acceptable costs;
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·
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Employee
workforce factors, including the potential inability to attract and retain key personnel;
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·
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The
ability of subsidiaries to pay dividends or distributions to Duke Energy Corporation holding company (the Parent);
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·
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The
performance of projects undertaken by our nonregulated businesses and the success of efforts to invest in and develop new opportunities;
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·
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The
effect of accounting pronouncements issued periodically by accounting standard-setting bodies;
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·
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The
impact of U.S. tax legislation to our financial condition, results of operations or cash flows and our credit ratings;
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·
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The
impacts from potential impairments of goodwill or equity method investment carrying values;
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·
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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
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·
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The
ability to implement our business strategy, including enhancing existing technology systems.
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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.
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.
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DUKE
ENERGY CORPORATION
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Date:
October 29, 2021
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By:
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/s/ David S. Maltz
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Name:
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David
S. Maltz
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Title:
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Vice President, Legal, Chief
Governance Officer and Assistant Corporate Secretary
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DUKE ENERGY CAROLINAS, LLC
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Date: October 29, 2021
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By:
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/s/ David S. Maltz
|
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Name:
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David S. Maltz
|
|
Title:
|
Vice President, Legal, Chief
Governance Officer and Assistant Secretary
|
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DUKE
ENERGY PROGRESS, LLC
|
|
|
Date:
October 29, 2021
|
By:
|
/s/ David S. Maltz
|
|
Name:
|
David
S. Maltz
|
|
Title:
|
Vice President, Legal, Chief
Governance Officer and Assistant Secretary
|
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