8-K

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): February 23, 2018

Commission file number	Registrant, State of Incorporation or Organization, Address of Principal Executive Offices, and Telephone Number	IRS Employer Identification No.
1-32853	DUKE ENERGY CORPORATION (a Delaware corporation) 550 South Tryon Street Charlotte, North Carolina 28202-1803 704-382-3853	20-2777218
1-3382	DUKE ENERGY PROGRESS, LLC (a North Carolina limited liability company) 410 South Wilmington Street Raleigh, North Carolina 27601-1748 704-382-3853	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:

o     Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

o     Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

o     Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

o     Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240. 13e-4(c))

o     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 o

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 8.01   Other Events

On February 23, 2018, the North Carolina Utilities Commission (the “NCUC”) issued an order (the “Order”) approving, without modification, the Agreement and Stipulation of Partial Settlement dated November 22, 2017, between Duke Energy Progress, LLC (“DEP”) and the Public Staff - North Carolina Utilities Commission (the “Public Staff”) (the “Settlement”) which settled certain issues in the rate case proceeding which DEP filed on June 1, 2017, with the NCUC.  The Settlement includes, among other things, a return on equity of 9.9% based upon a capital structure of 52% equity and 48% debt.

The Order also resolves the outstanding items in the rate case proceeding, including the recovery of deferred storm costs and the recovery of deferred coal ash costs which were deemed to be reasonable and prudent, known and measureable and used and useful in the provision of service to customers.  Specifically, the Order:

·Disallows $9.5 million of deferred coal ash basin costs related to ash hauling at DEP’s Asheville Plant;

·Approves recovery of remaining  $232 million deferred costs over a 5 year period with a return at DEP’s weighted average cost of capital (“WACC”);

·Assesses a $30 million management penalty by reducing the annual recovery of the deferred costs by $6 million per year for five years; and

·Denies DEP’s request for recovery of the estimated ongoing annual coal ash costs of $129 million.  Instead, these costs will be deferred with a return at DEP’s WACC, to be considered for recovery in the next rate case.

With respect to deferred storm costs, the Order reduces DEP’s recovery from its request of $80 million to $51 million and directs that a five-year amortization of these costs should begin in October 2016 rather than when rates are effective.  DEP is permitted a full WACC return during the remaining amortization period.

The preliminary estimate for rate base for DEP’s retail customers in North Carolina addressed in the rate case is approximately $8.148 billion.  New rates will become effective one day after the Commission approves the filing by DEP recalculating the revenue requirements based on the findings and conclusions in the Order, currently estimated by mid-March.

As a result of the Order, Duke Energy will take an estimated pre-tax charge of approximately $100 million in the first quarter of 2018, primarily related to the coal ash basin disallowance and management penalty and deferred storm cost adjustments, which will be excluded from adjusted diluted earnings per share and treated as a special item.

An overview providing additional detail on the Order is attached to this Form 8-K as Exhibit 99.1.

Item 9.01.   Financial Statements and Exhibits.

(d)           Exhibits.

99.1 Duke Energy Progress Summary of Order Issued by the North Carolina Utilities Commission

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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
Dated:  February 26, 2018	/s/ Julia S. Janson
	Julia S. Janson
	Executive Vice President, External Affairs, Chief Legal Officer and Corporate Secretary

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EX-99.1

Exhibit 99.1

Duke Energy Progress

Summary of Order Issued by the North Carolina Utilities Commission

(Docket No. E-2, Sub 1142)

Background

·On June 1, 2017, Duke Energy Progress (DEP) filed a rate case with the North Carolina Utilities Commission (NCUC) to request an average 14.9 percent increase in retail revenues, or approximately $477 million:

·The rate case filing requested an overall rate of return of 7.66% based on approval of a 10.75% return on equity and a 53% equity component of the capital structure

·The filing was based on a North Carolina rate base of $8.1 billion as of Dec. 31, 2016 and adjusted for known and measurable changes through August 2017

·On Nov. 22, 2017, DEP and the Public Staff - North Carolina Utilities Commission (Public Staff), the State’s consumer representative, filed an Agreement and Stipulation of Partial Settlement (Stipulation) resolving certain issues in the base rate proceeding

·The NCUC held an evidentiary hearing on the case from Nov. 27 through Dec. 7, 2017

·On Feb. 23, 2018, the NCUC issued an order approving the Stipulation without modification, and addressing the outstanding items in the case

Major Components of the Order

·Approves the Stipulation with the Public Staff, including a return on equity of 9.9% based upon a capital structure of 52% equity and 48% debt

·Approves recovery of deferred coal ash costs as reasonable and prudent, known and measureable and used and useful in the provision of service to customers

·Disallows $9.5 million of deferred coal ash basin costs related to ash hauling at Asheville

·Approves recovery of remaining $232 million deferred costs over a 5 year period with a return at DEP’s weighted average cost of capital (WACC)

·Assesses a $30 million management penalty by reducing the annual recovery of the deferred coal ash costs by $6 million per year for five years

·Denies DEP’s request for recovery of the estimated ongoing annual coal ash costs of $129 million.  Instead, these costs will be deferred with a return at DEP’s WACC, to be considered for recovery in the next rate case

·Reduces DEP’s recovery of deferred storm costs from its request of $80 million to $51 million and directs that a five-year amortization of these costs should begin in October 2016 rather than when rates are effective. DEP is permitted a full WACC return during the remaining amortization period

·The preliminary estimate for rate base for DEP NC retail addressed in the case is $8.148 billion

·New rates may be effective one day after the Commission approves this compliance filing, currently estimated by mid-March

Additional Information

·As a result of the Order, Duke Energy will take an estimated pre-tax charge of approximately $100 million in Q1 2018, primarily related to the coal ash basin disallowance and management penalty and deferred storm cost adjustments described above, which will be treated as a “special item” (excluded from adjusted diluted earnings per share)

Estimated Annual Rate Increase Impacts to Customer Bills

The figures below are pending review of the Public Staff and are, therefore, subject to change.  Once confirmed by Public Staff, the updated revenue requirement will be filed with the Commission, currently expected later this week, for review and approval.

($ in millions)	Years 1-4			Thereafter
Annualized base rates	$	193		$	193
Return of Excess Deferred State Income Taxes over 4-year period	(43		)	—
Cumulative Net Annualized Customer Increase ($)	$	151		$	193
Cumulative Net Annualized Customer Increase (%)	4.7		%	6.0		%

Reconciliation of Request to Order

($ in millions)	Years 1-4			Thereafter
Original request adjusted for Sept. 2017 supplemental filing(1)	$	420		$	420
Reduced ROE(2)	$	(57	)	$	(57	)
Reduced equity component of capital structure(2)	$	(10	)	$	(10	)
Reduction in depreciation expense(2)	$	(15	)	$	(15	)
Reduction in Customer Connect costs (to be deferred with a return)(2)	$	(8	)	$	(8	)
Other revenue reductions(2)	$	(19	)	$	(19	)
Move return of Excess Deferred State Income Taxes from base rates to rider(2)	$	38		$	38
Return of Excess Deferred State Income Taxes over 4-year period through a rider (versus 5-years in request)(2)	$	(43	)
Coal ash basin deferred cost disallowed	$	(8	)	$	(8	)
Coal ash basin ongoing costs	$	(129	)	$	(129	)
2016 deferred storm costs	$	(17	)	$	(17	)
Tentative revenue increase, subject to review and approval	$	151		$	193

(1)  Reflects $57 million in updates since original request

(2)  Per the Stipulation approved by the Commission

Note: totals may not add due to rounding