EX-99.1 2 a13-6271_1ex99d1.htm EX-99.1

Exhibit 99.1

 

Progress Energy Carolinas

Summary of Settlement Agreement with North Carolina Public Staff

Docket E-2, Sub 1023

 

Background

 

·                  On October 12, 2012, Progress Energy Carolinas (PEC) filed a rate case with the North Carolina Utilities Commission (NCUC) to request an average 11% increase in retail revenues, or approximately $359 million

·                  The filing requested a net $359 million increase in rates, which is net of a $28 million reduction in the Demand-Side Management/Energy Efficiency clause

·                  The filing was based upon 11.25% return on equity (ROE) and a 55.4% equity component of the capital structure

·                  On February 25, 2013, PEC reached agreement with the North Carolina Public Staff, who represents consumers (see details below)

 

Major Components of Settlement

 

·                  Based upon ROE of 10.2% and a 53% equity component of the capital structure

·                  Average rate increase of 5.7% for all customer classes by year two

·                  PEC will make a one-time $20 million contribution to help low-income customers in North Carolina pay their energy bills

·                  The Company will be allowed to reduce its cost of removal liability by $20 million

·                  Settlement includes support for the Company’s proposed nuclear levelization accounting and for a new coal inventory rider allowing the company to recover a return on coal inventory levels above those included in base rates

·                  All issues were not settled with the Public Staff.  Key matters left open for NCUC decision are:

·                  PEC’s change to a single coincident peak cost allocation factor

·                  The industrial economic recovery rider proposed by PEC

·                  Resolution of the Richmond CC deferral request (currently pending in another docket)

·                  Settlement subject to the review and approval by the NCUC

·                  Hearing is scheduled to commence March 18, 2013

 

Estimated Rate Increase Impacts to Customer Bills

 

($ in millions)

 

Year One

 

Year Two

 

Base rates

 

$

211

 

$

211

 

Decrease in DSM/EE Rider

 

(28

)

(28

)

Deferral of Sutton CWIP Cash recovery (no earnings impact through in service date)

 

(31

)

—

 

Cumulative Net Increase to customers ($)

 

$

151

 

$

183

 

Cumulative Net Increase to customers (%)

 

4.7

%

5.7

%

One time donation expense

 

$

20

 

—

 

One time reduction of regulatory liability

 

$

(20

)

—

 

 

Reconciliation of Request

 

($ in millions)

 

Year One

 

Year Two

 

Original request

 

$

359

 

$

359

 

Supplemental filing update

 

5

 

5

 

Reduced ROE and capital structure

 

(91

)

(91

)

Lower decommissioning expense, depreciation and amortizations (no earnings impact)

 

(62

)

(62

)

Deferral of Sutton CWIP Cash recovery (no earnings impact through in service date)

 

(31

)

—

 

Other

 

(29

)

(29

)

Per Settlement Agreement

 

$

151

 

$

183