XML 59 R17.htm IDEA: XBRL DOCUMENT v3.8.0.1
Related Party Transactions
9 Months Ended
Sep. 30, 2017
Related Party Transactions [Abstract]  
Related Party Transactions
RELATED PARTY TRANSACTIONS
The Subsidiary Registrants engage in related party transactions in accordance with applicable state and federal commission regulations. Refer to the Condensed Consolidated Balance Sheets of the Subsidiary Registrants for balances due to or due from related parties. Material amounts related to transactions with related parties included on the Condensed Consolidated Statements of Operations and Comprehensive Income are presented in the following table.
 
Three Months Ended September 30,
 
Nine Months Ended September 30,
(in millions)
2017

 
2016

 
2017

 
2016

Duke Energy Carolinas
 
 
 
 
 
 
 
Corporate governance and shared service expenses(a)
$
205

 
$
204

 
$
645

 
$
620

Indemnification coverages(b)
5

 
5

 
17

 
16

JDA revenue(c)
9

 
10

 
42

 
21

JDA expense(c)
39

 
36

 
91

 
127

Intercompany natural gas purchases(d)
3

 

 
5

 

Progress Energy
 
 
 
 
 
 
 
Corporate governance and shared service expenses(a)
$
208

 
$
182

 
$
555

 
$
515

Indemnification coverages(b)
10

 
9

 
29

 
25

JDA revenue(c)
39

 
36

 
91

 
127

JDA expense(c)
9

 
10

 
42

 
21

Intercompany natural gas purchases(d)
19

 

 
57

 

Duke Energy Progress
 
 
 
 
 
 
 
Corporate governance and shared service expenses(a)
$
114

 
$
103

 
$
321

 
$
292

Indemnification coverages(b)
4

 
4

 
11

 
10

JDA revenue(c)
39

 
36

 
91

 
127

JDA expense(c)
9

 
10

 
42

 
21

Intercompany natural gas purchases(d)
19

 

 
57

 

Duke Energy Florida
 
 
 
 
 
 
 
Corporate governance and shared service expenses(a)
$
94

 
$
79

 
$
234

 
$
223

Indemnification coverages(b)
6

 
5

 
18

 
15

Duke Energy Ohio
 
 
 
 
 
 
 
Corporate governance and shared service expenses(a)
$
90

 
$
89

 
$
275

 
$
261

Indemnification coverages(b)
1

 
1

 
3

 
4

Duke Energy Indiana
 
 
 
 
 
 
 
Corporate governance and shared service expenses(a)
$
93

 
$
96

 
$
281

 
$
279

Indemnification coverages(b)
2

 
2

 
6

 
6

Piedmont
 
 
 
 
 
 
 
Corporate governance and shared service expenses(a)
$
10

 
$

 
$
25

 
$

Indemnification coverages(b)
1

 

 
2

 

Intercompany natural gas sales(d)
22

 

 
62

 

(a)
The Subsidiary Registrants are charged their proportionate share of corporate governance and other shared services costs, primarily related to human resources, employee benefits, information technology, legal and accounting fees, as well as other third-party costs. These amounts are primarily recorded in Operation, maintenance and other on the Condensed Consolidated Statements of Operations and Comprehensive Income.
(b)
The Subsidiary Registrants incur expenses related to certain indemnification coverages through Bison, Duke Energy’s wholly owned captive insurance subsidiary. These expenses are recorded in Operation, maintenance and other on the Condensed Consolidated Statements of Operations and Comprehensive Income.
(c)
Duke Energy Carolinas and Duke Energy Progress participate in a Joint Dispatch Agreement (JDA), which allows the collective dispatch of power plants between the service territories to reduce customer rates. Revenues from the sale of power and expenses from the purchase of power pursuant to the JDA are recorded in Operating Revenues and Fuel used in electric generation and purchased power, respectively, on the Condensed Consolidated Statements of Operations and Comprehensive Income.
(d)
Piedmont provides long-term natural gas delivery service to certain Duke Energy Carolinas and Duke Energy Progress natural gas-fired generation facilities. Piedmont records the sales in Regulated natural gas revenues, and Duke Energy Carolinas and Duke Energy Progress record the related purchases in Fuel used in electric generation and purchased power on their respective Condensed Consolidated Statements of Operations and Comprehensive Income. The amounts are not eliminated in accordance with rate-based accounting regulations. For the three and nine months ended September 30, 2016, which was prior to the Piedmont acquisition, Piedmont recorded $19 million and $57 million, respectively, of natural gas sales with Duke Energy Progress and $1 million and $3 million, respectively, with Duke Energy Carolinas.
In addition to the amounts presented above, the Subsidiary Registrants have other affiliate transactions, including rental of office space, participation in a money pool arrangement, other operational transactions and their proportionate share of certain charged expenses. See Note 6 to the Consolidated Financial Statements in the Annual Report on Form 10-K for the year ended December 31, 2016, for more information regarding the money pool. These transactions of the Subsidiary Registrants were not material for the three and nine months ended September 30, 2017, and 2016.
As discussed in Note 13, certain trade receivables have been sold by Duke Energy Ohio and Duke Energy Indiana to CRC, an affiliate formed by a subsidiary of Duke Energy. The proceeds obtained from the sales of receivables are largely cash but also include a subordinated note from the affiliate for a portion of the purchase price.
Equity Method Investments
Piedmont has related party transactions as a customer of its equity method investments in natural gas storage and transportation facilities. The following table presents expenses for the three and nine months ended September 30, 2017, and 2016, which are included in Cost of natural gas on Piedmont's Condensed Consolidated Statements of Operations and Comprehensive Income.
 
 
Three Months Ended September 30,
 
Nine Months Ended September 30,
(in millions)
Type of expense
2017
2016
 
2017
2016
Cardinal
Transportation Costs
$
2

$
3

 
$
6

$
7

Pine Needle
Natural Gas Storage Costs
2

3

 
6

8

Hardy Storage
Natural Gas Storage Costs
2

2

 
7

7

Total
 
$
6

$
8

 
$
19

$
22


Piedmont had accounts payable to its equity method investments of $2 million at September 30, 2017, and December 31, 2016, related to these transactions. These amounts are included in Accounts payable on the Condensed Consolidated Balance Sheets.
Intercompany Income Taxes
Duke Energy and the Subsidiary Registrants file a consolidated federal income tax return and other state and jurisdictional returns. The Subsidiary Registrants have a tax sharing agreement with Duke Energy for the allocation of consolidated tax liabilities and benefits. Income taxes recorded represent amounts the Subsidiary Registrants would incur as separate C-Corporations. The following table includes the balance of intercompany income tax receivables and payables for the Subsidiary Registrants.
 
Duke

 
Duke

Duke

Duke

Duke

 
 
Energy

Progress

Energy

Energy

Energy

Energy

 
(in millions)
Carolinas

Energy

Progress

Florida

Ohio

Indiana

Piedmont

September 30, 2017
 
 
 
 
 
 
 
Intercompany income tax receivable
$

$
170

$

$
120

$

$

$
89

Intercompany income tax payable
173


46


18

104


 
 
 
 
 
 
 
 
December 31, 2016
 
 
 
 
 
 
 
Intercompany income tax receivable
$
1

$

$

$
37

$

$

$

Intercompany income tax payable

37

90


1

3

38