Duke Energy 10-Q 2023-06-30

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, 2023

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 Number			Registrant, State of Incorporation or Organization, Address of Principal Executive Offices, Zip Code and Telephone Number						IRS Employer Identification No.
1-32853			DUKE ENERGY CORPORATION						20-2777218

(a Delaware corporation)

526 South Church Street

Charlotte, North Carolina 28202-1803

704-382-3853

1-4928			DUKE ENERGY CAROLINAS, LLC						56-0205520

(a North Carolina limited liability company)

526 South Church Street

Charlotte, North Carolina 28202-1803

704-382-3853

1-15929			PROGRESS ENERGY, INC.						56-2155481

(a North Carolina corporation)

410 South Wilmington Street

Raleigh, North Carolina 27601-1748

704-382-3853

1-3382			DUKE ENERGY PROGRESS, LLC						56-0165465

(a North Carolina limited liability company)

410 South Wilmington Street

Raleigh, North Carolina 27601-1748

704-382-3853

1-3274			DUKE ENERGY FLORIDA, LLC						59-0247770

(a Florida limited liability company)

299 First Avenue North

St. Petersburg, Florida 33701

704-382-3853

1-1232			DUKE ENERGY OHIO, INC.						31-0240030

(an Ohio corporation)

139 East Fourth Street

Cincinnati, Ohio 45202

704-382-3853

1-3543			DUKE ENERGY INDIANA, LLC						35-0594457

(an Indiana limited liability company)

1000 East Main Street

Plainfield, Indiana 46168

704-382-3853

1-6196			PIEDMONT 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 5.625% 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

Duke Energy 3.10% Senior Notes due 2028 DUK 28A New York Stock Exchange LLC

Duke Energy 3.85% Senior Notes due 2034 DUK 34 New York Stock Exchange LLC

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)			Yes			☒			No			☐						Duke Energy Florida, LLC (Duke Energy Florida)			Yes			☒			No			☐
Duke Energy Carolinas, LLC (Duke Energy Carolinas)			Yes			☒			No			☐						Duke Energy Ohio, Inc. (Duke Energy Ohio)			Yes			☒			No			☐
Progress Energy, Inc. (Progress Energy)			Yes			☒			No			☐						Duke Energy Indiana, LLC (Duke Energy Indiana)			Yes			☒			No			☐
Duke Energy Progress, LLC (Duke Energy Progress)			Yes			☒			No			☐						Piedmont Natural Gas Company, Inc. (Piedmont)			Yes			☒			No			☐

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 Energy			Yes			☒			No			☐						Duke Energy Florida			Yes			☒			No			☐
Duke Energy Carolinas			Yes			☒			No			☐						Duke Energy Ohio			Yes			☒			No			☐
Progress Energy			Yes			☒			No			☐						Duke Energy Indiana			Yes			☒			No			☐
Duke Energy Progress			Yes			☒			No			☐						Piedmont			Yes			☒			No			☐

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 Energy			Large Accelerated Filer			☒			Accelerated filer			☐			Non-accelerated Filer			☐			Smaller reporting company			☐			Emerging growth company			☐
Duke Energy Carolinas			Large Accelerated Filer			☐			Accelerated filer			☐			Non-accelerated Filer			☒			Smaller reporting company			☐			Emerging growth company			☐
Progress Energy			Large Accelerated Filer			☐			Accelerated filer			☐			Non-accelerated Filer			☒			Smaller reporting company			☐			Emerging growth company			☐
Duke Energy Progress			Large Accelerated Filer			☐			Accelerated filer			☐			Non-accelerated Filer			☒			Smaller reporting company			☐			Emerging growth company			☐
Duke Energy Florida			Large Accelerated Filer			☐			Accelerated filer			☐			Non-accelerated Filer			☒			Smaller reporting company			☐			Emerging growth company			☐
Duke Energy Ohio			Large Accelerated Filer			☐			Accelerated filer			☐			Non-accelerated Filer			☒			Smaller reporting company			☐			Emerging growth company			☐
Duke Energy Indiana			Large Accelerated Filer			☐			Accelerated filer			☐			Non-accelerated Filer			☒			Smaller reporting company			☐			Emerging growth company			☐
Piedmont			Large Accelerated Filer			☐			Accelerated filer			☐			Non-accelerated Filer			☒			Smaller reporting company			☐			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. ¨

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).

Duke Energy			Yes			☐			No			☒						Duke Energy Florida			Yes			☐			No			☒
Duke Energy Carolinas			Yes			☐			No			☒						Duke Energy Ohio			Yes			☐			No			☒
Progress Energy			Yes			☐			No			☒						Duke Energy Indiana			Yes			☐			No			☒
Duke Energy Progress			Yes			☐			No			☒						Piedmont			Yes			☐			No			☒

Number of shares of common stock outstanding at July 31, 2023:

Registrant			Description			Shares
Duke Energy			Common stock, $0.001 par value			770,707,545
Duke Energy Carolinas			All of the registrant's limited liability company member interests are directly owned by Duke Energy.			N/A
Progress Energy			All of the registrant's common stock is directly owned by Duke Energy.			100
Duke Energy Progress			All of the registrant's limited liability company member interests are indirectly owned by Duke Energy.			N/A
Duke Energy Florida			All of the registrant's limited liability company member interests are indirectly owned by Duke Energy.			N/A
Duke Energy Ohio			All of the registrant's common stock is indirectly owned by Duke Energy.			89,663,086
Duke Energy Indiana			All of the registrant's limited liability company member interests are owned by a Duke Energy subsidiary that is 80.1% indirectly owned by Duke Energy.			N/A
Piedmont			All of the registrant's common stock is directly owned by Duke Energy.			100

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

			Cautionary Statement Regarding Forward-Looking Information
PART I. FINANCIAL INFORMATION
Item 1.			Financial Statements
			Duke Energy Corporation Financial Statements			9
			Duke Energy Carolinas, LLC Financial Statements			15
			Progress Energy, Inc. Financial Statements			19
			Duke Energy Progress, LLC Financial Statements			23
			Duke Energy Florida, LLC Financial Statements			27
			Duke Energy Ohio, Inc. Financial Statements			31
			Duke Energy Indiana, LLC Financial Statements			35
			Piedmont Natural Gas Company, Inc. Financial Statements			39
			Combined Notes to Condensed Consolidated Financial Statements
			Note 1 – Organization and Basis of Presentation			43
			Note 2 – Dispositions			45
			Note 3 – Business Segments			47
			Note 4 – Regulatory Matters			49
			Note 5 – Commitments and Contingencies			55
			Note 6 – Debt and Credit Facilities			57
			Note 7 – Goodwill			59
			Note 8 – Related Party Transactions			60
			Note 9 – Derivatives and Hedging			61
			Note 10 – Investments in Debt and Equity Securities			67
			Note 11 – Fair Value Measurements			71
			Note 12 – Variable Interest Entities			76
			Note 13 – Revenue			79
			Note 14 – Stockholders' Equity			85
			Note 15 – Employee Benefit Plans			86
			Note 16 – Income Taxes			88
			Note 17 – Subsequent Events			88
Item 2.			Management's Discussion and Analysis of Financial Condition and Results of Operations			89
Item 3.			Quantitative and Qualitative Disclosures About Market Risk			105
Item 4.			Controls and Procedures			106
PART II. OTHER INFORMATION
Item 1.			Legal Proceedings			107
Item 1A.			Risk Factors			107
Item 2.			Unregistered Sales of Equity Securities and Use of Proceeds			107
Item 5.			Other Information			107
Item 6.			Exhibits			108
			Signatures			111

GLOSSARY OF TERMS

Glossary of Terms

The following terms or acronyms used in this Form 10-Q are defined below:

Term or Acronym			Definition
2021 Settlement			Settlement 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.
AFUDC			Allowance for funds used during construction
ArcLight			ArcLight Capital Partners, LLC
ARO			Asset retirement obligations
Bison			Bison Insurance Company Limited
Brookfield			Brookfield Renewable Partners L.P.
CEP			Capital Expenditure Program
the Company			Duke Energy Corporation and its subsidiaries
Commercial Renewables Disposal Groups			Commercial Renewables business segment, excluding the offshore wind contract for Carolina Long Bay, separated into the utility-scale solar and wind group, the distributed generation group and the remaining assets
COVID-19			Coronavirus Disease 2019
CRC			Cinergy Receivables Company, LLC
Crystal River Unit 3			Crystal River Unit 3 Nuclear Plant
DEFR			Duke Energy Florida Receivables, LLC
DEPR			Duke Energy Progress Receivables, LLC
DERF			Duke Energy Receivables Finance Company, LLC
Duke Energy			Duke Energy Corporation (collectively with its subsidiaries)
Duke Energy Ohio			Duke Energy Ohio, Inc.
Duke Energy Progress			Duke Energy Progress, LLC
Duke Energy Carolinas			Duke Energy Carolinas, LLC
Duke Energy Florida			Duke Energy Florida, LLC
Duke Energy Indiana			Duke Energy Indiana, LLC
Duke Energy Registrants			Duke Energy, Duke Energy Carolinas, Progress Energy, Duke Energy Progress, Duke Energy Florida, Duke Energy Ohio, Duke Energy Indiana and Piedmont
EDIT			Excess deferred income tax
EPA			United States Environmental Protection Agency
EPS			Earnings (Loss) Per Share
ERCOT			Electric Reliability Council of Texas
ETR			Effective tax rate
EU&I			Electric Utilities and Infrastructure
Exchange Act			Securities Exchange Act of 1934
FERC			Federal Energy Regulatory Commission
FPSC			Florida Public Service Commission
FTR			Financial transmission rights
GAAP			Generally accepted accounting principles in the U.S.
GAAP Reported Earnings			Net Income Available to Duke Energy Corporation Common Stockholders
GAAP Reported EPS			Basic Earnings Per Share Available to Duke Energy Corporation common stockholders
GIC			GIC Private Limited, Singapore's sovereign wealth fund and an experienced investor in U.S. infrastructure
GU&I			Gas Utilities and Infrastructure
GWh			Gigawatt-hours

GLOSSARY OF TERMS

HB 951			The Energy Solutions for North Carolina, or House Bill 951, passed in October 2021
IMR			Integrity Management Rider
IRA			Inflation Reduction Act
IRS			Internal Revenue Service
IURC			Indiana Utility Regulatory Commission
KPSC			Kentucky Public Service Commission
LLC			Limited Liability Company
MGP			Manufactured gas plant
MGP Settlement			Stipulation and Recommendation filed jointly by Duke Energy Ohio the staff of the PUCO, the Office of the Ohio Consumers' Counsel and the Ohio Energy Group on August 31, 2021
MW			Megawatt
MWh			Megawatt-hour
MYRP			Multiyear rate plan
NCUC			North Carolina Utilities Commission
NDTF			Nuclear decommissioning trust funds
NPNS			Normal purchase/normal sale
NYSE			The New York Stock Exchange
OCC			Ohio Consumers' Counsel
OPEB			Other Post-Retirement Benefit Obligations
the Parent			Duke Energy Corporation holding company
PBR			Performance-based regulation
Piedmont			Piedmont Natural Gas Company, Inc.
Progress Energy			Progress Energy, Inc.
PSCSC			Public Service Commission of South Carolina
PUCO			Public Utilities Commission of Ohio
RTO			Regional Transmission Organization
Subsidiary Registrants			Duke Energy Carolinas, Progress Energy, Duke Energy Progress, Duke Energy Florida, Duke Energy Ohio, Duke Energy Indiana and Piedmont
TPUC			Tennessee Public Utility Commission
U.S.			United States
VIE			Variable Interest Entity

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 ability to implement our business strategy, including our carbon emission reduction goals;

◦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, asset retirement and construction costs related to carbon emissions reductions, 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;

◦The impact of extraordinary external events, such as the pandemic health event resulting from COVID-19, and their collateral consequences, including the disruption of global supply chains or the economic activity in our service territories;

◦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, reduced customer usage due to cost pressures from inflation or fuel costs, and the economic health of our service territories or variations in customer usage patterns, including energy efficiency efforts, natural gas building and appliance electrification, 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, natural gas electrification, and distributed generation technologies, such as private solar and battery storage, in Duke Energy service territories could result in a reduced number of customers, 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 investor, customer and other stakeholder expectations and demands including heightened emphasis on environmental, social and governance concerns and costs related thereto;

◦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 United States 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 or other attack, war, vandalism, cybersecurity threats, data security breaches, operational events, 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, an individual utility’s generation mix, 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;

FORWARD-LOOKING STATEMENTS

◦Construction and development risks associated with the completion of the Duke Energy Registrants’ capital investment projects, including risks related to financing, timing and receipt of necessary regulatory approvals, 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, as well as the successful sale of the Commercial Renewables Disposal Groups;

◦The effect of accounting and reporting pronouncements issued periodically by accounting standard-setting bodies and the SEC;

◦The impact of United States 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;

◦Asset or business acquisitions and dispositions may not yield the anticipated benefits; and

◦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.

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 any obligation to publicly update or revise any forward-looking statements, whether as a result of new information, future events or otherwise.

FINANCIAL STATEMENTS

DUKE ENERGY CORPORATION

Condensed Consolidated Statements of Operations

(Unaudited)

			Three Months Ended												Six Months Ended
			June 30,												June 30,
(in millions, except per share amounts)			2023						2022						2023						2022
Operating Revenues
Regulated electric			$	6,176					$	6,075					$	12,500					$	12,008
Regulated natural gas			331						425						1,213						1,427
Nonregulated electric and other			71						64						141						140
Total operating revenues			6,578						6,564						13,854						13,575
Operating Expenses
Fuel used in electric generation and purchased power			2,039						1,972						4,416						3,789
Cost of natural gas			79						189						377						670
Operation, maintenance and other			1,375						1,367						2,685						2,915
Depreciation and amortization			1,333						1,237						2,560						2,494
Property and other taxes			353						368						742						750
Impairment of assets and other charges			—						(9)						8						206
Total operating expenses			5,179						5,124						10,788						10,824
Gains on Sales of Other Assets and Other, net			31						8						38						11
Operating Income			1,430						1,448						3,104						2,762
Other Income and Expenses
Equity in earnings of unconsolidated affiliates			20						38						40						64
Other income and expenses, net			147						114						298						203
Total other income and expenses			167						152						338						267
Interest Expense			727						588						1,447						1,157
Income From Continuing Operations Before Income Taxes			870						1,012						1,995						1,872
Income Tax Expense From Continuing Operations			119						114						274						139
Income From Continuing Operations			751						898						1,721						1,733
Loss From Discontinued Operations, net of tax			(955)						(18)						(1,164)						(33)
Net (Loss) Income			(204)						880						557						1,700
Add: Net (Income) Loss Attributable to Noncontrolling Interests			(16)						27						27						64
Net (Loss) Income Attributable to Duke Energy Corporation			(220)						907						584						1,764
Less: Preferred Dividends			14						14						53						53
Net (Loss) Income Available to Duke Energy Corporation Common Stockholders			$	(234)					$	893					$	531					$	1,711
Earnings Per Share – Basic and Diluted
Income from continuing operations available to Duke Energy Corporation common stockholders
Basic and Diluted			$	0.91					$	1.11					$	2.10					$	2.17
(Loss) Income from discontinued operations attributable to Duke Energy Corporation common stockholders
Basic and Diluted			$	(1.23)					$	0.03					$	(1.41)					$	0.05
Net (loss) income available to Duke Energy Corporation common stockholders
Basic and Diluted			$	(0.32)					$	1.14					$	0.69					$	2.22
Weighted Average Shares Outstanding
Basic and Diluted			771						770						770						770

See Notes to Condensed Consolidated Financial Statements

FINANCIAL STATEMENTS

DUKE ENERGY CORPORATION

Condensed Consolidated Statements of Comprehensive Income

(Unaudited)

			Three Months Ended												Six Months Ended
			June 30,												June 30,
(in millions)			2023						2022						2023						2022
Net (Loss) Income			$	(204)					$	880					$	557					$	1,700
Other Comprehensive Income (Loss), net of tax**(a)**
Pension and OPEB adjustments			1						2						—						4
Net unrealized gains on cash flow hedges			26						149						6						262
Reclassification into earnings from cash flow hedges			4						4						4						9
Net unrealized gains (losses) on fair value hedges			26						(12)						15						(12)
Unrealized (losses) gains on available-for-sale securities			(2)						(8)						4						(21)

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The following combined Management’s Discussion and Analysis of Financial Condition and Results of Operations is separately filed by Duke Energy and Duke Energy Carolinas, Progress Energy, Duke Energy Progress, Duke Energy Florida, Duke Energy Ohio, Duke Energy Indiana and Piedmont. However, none of the registrants make any representation as to information related solely to Duke Energy or the Subsidiary Registrants of Duke Energy other than itself.

DUKE ENERGY

Duke Energy is an energy company headquartered in Charlotte, North Carolina. Duke Energy operates in the U.S. primarily through its subsidiaries, Duke Energy Carolinas, Duke Energy Progress, Duke Energy Florida, Duke Energy Ohio, Duke Energy Indiana and Piedmont. When discussing Duke Energy’s consolidated financial information, it necessarily includes the results of the Subsidiary Registrants, which along with Duke Energy are collectively referred to as the Duke Energy Registrants.

Management’s Discussion and Analysis should be read in conjunction with the Condensed Consolidated Financial Statements and Notes for the six months ended June 30, 2023, and with Duke Energy’s Annual Report on Form 10-K for the year ended December 31, 2022.

Executive Overview

Advancing Our Clean Energy Transformation

During the six months ended June 30, 2023, we continued to execute on our clean energy transformation, delivering strong, sustainable value for shareholders, customers, communities and employees.

• In November 2022, the Duke Energy Board of Directors approved pursuing the sale of the Commercial Renewables business, excluding the offshore wind contract for Carolina Long Bay. We've entered into purchase and sale agreements with affiliates of Brookfield for the sale of the utility-scale solar and wind group in June 2023 and with affiliates of ArcLight for the distributed generation group in July 2023. Both transactions are expected to close by the end of 2023. See Note 2 to the Condensed Consolidated Financial Statements, "Dispositions," for additional information.

• Renewable energy remains a critical component of our generation mix and we've continued to actively expand the use of these assets across our service territories. In June 2023, we announced an agreement with Ranger Power for up to 199 MW of solar power in Indiana. Pending regulatory approval, energy generated from this facility will be sold to Duke Energy Indiana and serve the equivalent of roughly 35,000 homes. In July 2023, we announced a new utility-scale solar panel installation in Kentucky. Located on the rooftop of a facility owned by Amazon, the site complements our emerging solar portfolio in the state and demonstrates our commitment to furthering the clean energy goals of both the Company and our customers.

• In March 2023, we began operating the largest battery system in North Carolina, an 11-MW project in Onslow County, which will operate in conjunction with an adjacent 13-MW solar facility located on a leased site within Marine Corps Base (MCB) Camp Lejeune. Both projects are connected to a Duke Energy substation and will be used to serve all Duke Energy Progress customers. As part of an ongoing collaboration with the Department of Defense, further work could enable the solar and battery systems to improve the resiliency of MCB Camp Lejeune against outages.

• In March 2023, Duke Energy Florida announced two new solar projects as part of Clean Energy Connection, the company's community solar program. Once complete, each 74.9-MW solar facility will generate enough carbon-free electricity to power what would be the equivalent to around 23,000 homes. Additionally, in March 2023, Duke Energy Florida announced its first floating solar array pilot. The project will feature more than 1,800 floating solar modules and occupy approximately 2 acres of water surface on an existing cooling pond at the Duke Energy Hines Energy Complex in Bartow. The pilot is part of Duke Energy's Vision Florida program, which is designed to test innovative projects such as microgrids and battery energy storage, among others, to prepare the power grid for a clean energy future. We now operate 1,200 MW of solar in Florida, with plans to continue adding approximately 300 MW a year going forward.

• While transitioning to cleaner energy resources, affordability continues to be a focus for Duke Energy. Our cost reduction initiatives are grounded in our culture of safety and serving our customers with excellence, while maintaining our assets for the future. We’re leveraging digital innovation, data analytics, and process improvements to increase efficiency, making targeted capital investments to reduce maintenance costs, and reshaping our operations to streamline work and lower costs. Coming into 2023, we implemented a $300 million cost mitigation initiative to address interest rate and inflation headwinds. These cost reductions are primarily focused on corporate and support areas, and remain on track, but the earnings benefit of the cost reductions for the first half of 2023 has been more than offset by the impact of unseasonably mild weather.

Regulatory Activity. During the six months ended June 30, 2023, we continued to monitor developments while moving our regulatory strategy forward. See Note 4 to the Condensed Consolidated Financial Statements, "Regulatory Matters," for additional information.

• In January 2023, Duke Energy Carolinas filed a rate case in North Carolina, and discovery is ongoing. This rate case incorporates elements of PBR and MYRP as allowed under HB 951. HB 951 provides the framework for many of the benefits of modernized regulatory constructs in North Carolina under the direction of the NCUC. Duke Energy Progress filed its first rate case utilizing these benefits, including both PBR and MYRP, in North Carolina in October 2022, and reached partial settlements on key matters in April and May 2023. We expect orders from the NCUC on the Duke Energy Progress rate case in the third quarter of this year and on the Duke Energy Carolinas rate case in the fourth quarter of this year.

• In February 2023, the PSCSC approved a constructive comprehensive settlement with all parties in the Duke Energy Progress South Carolina rate case. Duke Energy Progress implemented new customer rates effective April 1, 2023. We also made progress on our South Carolina storm securitization filings, completing our petition for a financing order with the PSCSC in May 2023.

MD&A			DUKE ENERGY

• In February 2023, the Indiana Court of Appeals issued an opinion finding certain coal ash related expenditures should be disallowed under a statute specific to federally mandated projects and also denied a petition for rehearing on the matter.

• In the Midwest, as it relates to our Duke Energy Ohio natural gas base rate case, we filed a stipulation on key matters with all parties except the OCC in April 2023.

Matters Impacting Future Results

The matters discussed herein could materially impact the future operating results, financial condition and cash flows of the Duke Energy Registrants and Business Segments.

Regulatory Matters

Coal Ash Costs

Future spending of coal ash costs, including amounts recorded for depreciation and liability accretion, is expected to be recovered in future rate cases or rider filings. The majority of spend is expected to occur over the next 10 to 15 years.

Duke Energy Indiana has interpreted the Coal Combustion Residuals (CCR) rule to identify the coal ash basin sites impacted and has assessed the amounts of coal ash subject to the rule and a method of compliance. Interpretation of the requirements of the CCR rule is subject to further legal challenges and regulatory approvals, which could result in additional coal ash basin closure requirements, higher costs of compliance and greater AROs. Additionally, Duke Energy Indiana has re

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For an in-depth discussion of the Duke Energy Registrants' market risks, see “Quantitative and Qualitative Disclosures about Market Risk” in Item 7 of Duke Energy's Annual Report on Form 10-K for the year ended December 31, 2022.

ITEM 4.			CONTROLS AND PROCEDURES

Disclosure Controls and Procedures

Disclosure controls and procedures are controls and other procedures that are designed to ensure that information required to be disclosed by the Duke Energy Registrants in the reports they file or submit under the Exchange Act is recorded, processed, summarized and reported, within the time periods specified by the SEC rules and forms.

Disclosure controls and procedures include, without limitation, controls and procedures designed to provide reasonable assurance that information required to be disclosed by the Duke Energy Registrants in the reports they file or submit under the Exchange Act is accumulated and communicated to management, including the Chief Executive Officer and Chief Financial Officer, as appropriate, to allow timely decisions regarding required disclosure.

Under the supervision and with the participation of management, including the Chief Executive Officer and Chief Financial Officer, the Duke Energy Registrants have evaluated the effectiveness of their disclosure controls and procedures (as such term is defined in Rule 13a-15(e) and 15d-15(e) under the Exchange Act) as of June 30, 2023, and, based on this evaluation, the Chief Executive Officer and Chief Financial Officer have concluded that these controls and procedures are effective in providing reasonable assurance of compliance.

Changes in Internal Control over Financial Reporting

Under the supervision and with the participation of management, including the Chief Executive Officer and Chief Financial Officer, the Duke Energy Registrants have evaluated changes in internal control over financial reporting (as such term is defined in Rules 13a-15 and 15d-15 under the Exchange Act) that occurred during the fiscal quarter ended June 30, 2023, and have concluded no change has materially affected, or is reasonably likely to materially affect, internal controls over financial reporting.

OTHER INFORMATION

ITEM 1. LEGAL PROCEEDINGS

The Duke Energy Registrants are, from time to time, parties to various lawsuits and regulatory proceedings in the ordinary course of their business. For information regarding legal proceedings, including regulatory and environmental matters, see Note 4, "Regulatory Matters," and Note 5, "Commitments and Contingencies," to the Condensed Consolidated Financial Statements. For additional information, see Item 3, "Legal Proceedings," in Duke Energy's Annual Report on Form 10-K for the year ended December 31, 2022.

In addition to the other information set forth in this report, careful consideration should be given to the factors discussed in Part I, “Item 1A. Risk Factors” in the Duke Energy's Annual Report on Form 10-K for the year ended December 31, 2022, which could materially affect the Duke Energy Registrants’ financial condition or future results.

ITEM 2. UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS

None.

During the three months ended June 30, 2023, no director or officer of the Company adopted, terminated or modified a Rule 10b5-1 trading arrangement or non-Rule 10b5-1 trading arrangement, as each term is defined in Item 408(a) of Regulation S-K.

EXHIBITS

Exhibits filed herein are designated by an asterisk (). All exhibits not so designated are incorporated by reference to a prior filing, as indicated. Items constituting management contracts or compensatory plans or arrangements are designated by a double asterisk (). The Company agrees to furnish upon request to the commission a copy of any omitted schedules or exhibits upon request on all items designated by a triple asterisk ().

															Duke												Duke						Duke						Duke						Duke
Exhibit									Duke						Energy						Progress						Energy						Energy						Energy						Energy
Number									Energy						Carolinas						Energy						Progress						Florida						Ohio						Indiana						Piedmont
4.1						Indenture, dated as of April 6, 2023, between Duke Energy Corporation and The Bank of New York Mellon Trust Company, N.A., as Trustee (incorporated by reference to exhibit 4.1 to registrant's Current Report on Form 8-K filed on April 6, 2023, File No. 1-32853).			X
4.2						Thirteenth Supplemental Indenture dated as of June 8, 2023, between Piedmont Natural Gas Company, Inc. and The Bank of New York Mellon Trust Company, N.A., as successor to Citibank, N.A.(incorporated by reference to exhibit 4.1 to registrant’s Current Report on Form 8-K filed on June 8, 2023, File No. 1-6196).																																													X
4.3						One-Hundred and Eighth Supplemental Indenture, dated as of June 15, 2023, between Duke Energy Carolinas, LLC and The Bank of New York Mellon Trust Company, N.A., as Trustee (incorporated by reference to Exhibit 4.2 to registrant’s Current Report on Form 8-K filed on June 15, 2023, File No. 1-04928).									X
4.4						One-Hundred and Ninth Supplemental Indenture, dated as of June 15, 2023, between Duke Energy Carolinas, LLC and The Bank of New York Mellon Trust Company, N.A., as Trustee (incorporated by reference to Exhibit 4.3 to registrant’s Current Report on Form 8-K filed on June 15, 2023, File No. 1-04928).									X
10.1**						Restricted Stock Unit Award Agreement (incorporated by reference to Exhibit 10.1 to registrant's Current Report on Form 8-K filed on May 9, 2023, File No. 1-32853).			X
10.2**						Performance Share Award Agreement (incorporated by reference to Exhibit 10.2 to registrant's Current Report on Form 8-K filed on May 9, 2023, File No. 1-32853).			X
*31.1.1						Certification of the Chief Executive Officer Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.			X
*31.1.2						Certification of the Chief Executive Officer Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.									X
*31.1.3						Certification of the Chief Executive Officer Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.															X
*31.1.4						Certification of the Chief Executive Officer Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.																					X
*31.1.5						Certification of the Chief Executive Officer Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.																											X
*31.1.6						Certification of the Chief Executive Officer Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.																																	X

EXHIBITS

*31.1.7						Certification of the Chief Executive Officer Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.																																							X
*31.1.8						Certification of the Chief Executive Officer Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.																																													X
*31.2.1						Certification of the Chief Financial Officer Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.			X
*31.2.2						Certification of the Chief Financial Officer Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.									X
*31.2.3						Certification of the Chief Financial Officer Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.															X
*31.2.4						Certification of the Chief Financial Officer Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.																					X
*31.2.5						Certification of the Chief Financial Officer Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.																											X
*31.2.6						Certification of the Chief Financial Officer Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.																																	X
*31.2.7						Certification of the Chief Financial Officer Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.																																							X
*31.2.8						Certification of the Chief Financial Officer Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.																																													X
*32.1.1						Certification Pursuant to 18 U.S.C. Section 1350, as Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.			X
*32.1.2						Certification Pursuant to 18 U.S.C. Section 1350, as Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.									X
*32.1.3						Certification Pursuant to 18 U.S.C. Section 1350, as Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.															X
*32.1.4						Certification Pursuant to 18 U.S.C. Section 1350, as Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.																					X
*32.1.5						Certification Pursuant to 18 U.S.C. Section 1350, as Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.																											X
*32.1.6						Certification Pursuant to 18 U.S.C. Section 1350, as Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.																																	X
*32.1.7						Certification Pursuant to 18 U.S.C. Section 1350, as Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.																																							X
*32.1.8						Certification Pursuant to 18 U.S.C. Section 1350, as Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.																																													X
*32.2.1						Certification Pursuant to 18 U.S.C. Section 1350, as Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.			X
*32.2.2						Certification Pursuant to 18 U.S.C. Section 1350, as Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.									X
*32.2.3						Certification Pursuant to 18 U.S.C. Section 1350, as Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.															X

EXHIBITS

*32.2.4						Certification Pursuant to 18 U.S.C. Section 1350, as Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.																					X
*32.2.5						Certification Pursuant to 18 U.S.C. Section 1350, as Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.																											X
*32.2.6						Certification Pursuant to 18 U.S.C. Section 1350, as Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.																																	X
*32.2.7						Certification Pursuant to 18 U.S.C. Section 1350, as Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.																																							X
*32.2.8						Certification Pursuant to 18 U.S.C. Section 1350, as Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.																																													X
*101.INS						XBRL Instance Document (this does not appear in the Interactive Data File because its XBRL tags are embedded within the Inline XBRL document).			X						X						X						X						X						X						X						X
*101.SCH						XBRL Taxonomy Extension Schema Document.			X						X						X						X						X						X						X						X
*101.CAL						XBRL Taxonomy Calculation Linkbase Document.			X						X						X						X						X						X						X						X
*101.LAB						XBRL Taxonomy Label Linkbase Document.			X						X						X						X						X						X						X						X
*101.PRE						XBRL Taxonomy Presentation Linkbase Document.			X						X						X						X						X						X						X						X
*101.DEF						XBRL Taxonomy Definition Linkbase Document.			X						X						X						X						X						X						X						X
*104						Cover Page Interactive Data File (formatted in Inline XBRL and contained in Exhibit 101).			X						X						X						X						X						X						X						X

The total amount of securities of the registrant or its subsidiaries authorized under any instrument with respect to long-term debt not filed as an exhibit does not exceed 10% of the total assets of the registrant and its subsidiaries on a consolidated basis. The registrant agrees, upon request of the SEC, to furnish copies of any or all of such instruments to it.

SIGNATURES

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrants have duly caused this report to be signed on their behalf by the undersigned thereunto duly authorized.

						DUKE ENERGY CORPORATION DUKE ENERGY CAROLINAS, LLC PROGRESS ENERGY, INC. DUKE ENERGY PROGRESS, LLC DUKE ENERGY FLORIDA, LLC DUKE ENERGY OHIO, INC. DUKE ENERGY INDIANA, LLC PIEDMONT NATURAL GAS COMPANY, INC.
Date:			August 8, 2023			/s/ BRIAN D. SAVOY
						Brian D. Savoy Executive Vice President and Chief Financial Officer (Principal Financial Officer)
Date:			August 8, 2023			/s/ CYNTHIA S. LEE
						Cynthia S. Lee Vice President, Chief Accounting Officer and Controller (Principal Accounting Officer)