Investments in Debt and Equity Securities

9 Months Ended

Sep. 30, 2021

Investments, Debt and Equity Securities [Abstract]

Investments In Debt And Equity Securities

INVESTMENTS IN DEBT AND EQUITY SECURITIES

Duke Energy’s investments in debt and equity securities are primarily comprised of investments held in (i) the NDTF at Duke Energy Carolinas, Duke Energy Progress and Duke Energy Florida, (ii) the grantor trusts at Duke Energy Progress, Duke Energy Florida and Duke Energy Indiana related to OPEB plans and (iii) Bison. The Duke Energy Registrants classify investments in debt securities as AFS and investments in equity securities as fair value through net income (FV-NI).

For investments in debt securities classified as AFS, the unrealized gains and losses are included in other comprehensive income until realized, at which time they are reported through net income. For investments in equity securities classified as FV-NI, both realized and unrealized gains and losses are reported through net income. Substantially all of Duke Energy’s investments in debt and equity securities qualify for regulatory accounting, and accordingly, all associated realized and unrealized gains and losses on these investments are deferred as a regulatory asset or liability.

Duke Energy classifies the majority of investments in debt and equity securities as long term, unless otherwise noted.

Investment Trusts

The investments within the Investment Trusts are managed by independent investment managers with discretion to buy, sell and invest pursuant to the objectives set forth by the investment manager agreements and trust agreements. The Duke Energy Registrants have limited oversight of the day-to-day management of these investments. As a result, the ability to hold investments in unrealized loss positions is outside the control of the Duke Energy Registrants. Accordingly, all unrealized losses associated with debt securities within the Investment Trusts are recognized immediately and deferred to regulatory accounts where appropriate.

Other AFS Securities

Unrealized gains and losses on all other AFS securities are included in other comprehensive income until realized, unless it is determined the carrying value of an investment has a credit loss. The Duke Energy Registrants analyze all investment holdings each reporting period to determine whether a decline in fair value is related to a credit loss. If a credit loss exists, the unrealized credit loss is included in earnings. There were no material credit losses as of September 30, 2021, and December 31, 2020.

Other Investments amounts are recorded in Other within Other Noncurrent Assets on the Condensed Consolidated Balance Sheets.

DUKE ENERGY

The following table presents the estimated fair value of investments in debt and equity securities; equity investments are classified as FV-NI and debt investments are classified as AFS.

	September 30, 2021						December 31, 2020
	Gross		Gross				Gross		Gross
	Unrealized		Unrealized		Estimated		Unrealized		Unrealized		Estimated
	Holding		Holding		Fair		Holding		Holding		Fair
(in millions)	Gains		Losses		Value		Gains		Losses		Value
NDTF
Cash and cash equivalents	$	—	$	—	$	164	$	—	$	—	$	177
Equity securities	4,700		35		6,754		4,138		54		6,235
Corporate debt securities	44		5		847		76		1		806
Municipal bonds	13		1		296		22		—		370
U.S. government bonds	34		8		1,605		51		—		1,361
Other debt securities	4		1		195		8		—		180
Total NDTF Investments	$	4,795	$	50	$	9,861	$	4,295	$	55	$	9,129
Other Investments
Cash and cash equivalents	$	—	$	—	$	87	$	—	$	—	$	127
Equity securities	83		—		145		79		—		146
Corporate debt securities	4		1		130		8		—		110
Municipal bonds	3		1		69		5		—		86
U.S. government bonds	—		—		50		—		—		42
Other debt securities	—		—		34		—		—		47
Total Other Investments	$	90	$	2	$	515	$	92	$	—	$	558
Total Investments	$	4,885	$	52	$	10,376	$	4,387	$	55	$	9,687

Realized gains and losses, which were determined on a specific identification basis, from sales of FV-NI and AFS securities for the three and nine months ended September 30, 2021, and 2020, were as follows.

	Three Months Ended				Nine Months Ended
(in millions)	September 30, 2021		September 30, 2020		September 30, 2021		September 30, 2020
FV-NI:
Realized gains	$	34	$	13	$	320	$	338
Realized losses	40		16		100		148
AFS:
Realized gains	17		26		51		73
Realized losses	15		19		46		38

DUKE ENERGY CAROLINAS

The following table presents the estimated fair value of investments in debt and equity securities; equity investments are classified as FV-NI and debt investments are classified as AFS.

	September 30, 2021						December 31, 2020
	Gross		Gross				Gross		Gross
	Unrealized		Unrealized		Estimated		Unrealized		Unrealized		Estimated
	Holding		Holding		Fair		Holding		Holding		Fair
(in millions)	Gains		Losses		Value		Gains		Losses		Value
NDTF
Cash and cash equivalents	$	—	$	—	$	60	$	—	$	—	$	30
Equity securities	2,725		14		3,912		2,442		23		3,685
Corporate debt securities	27		3		495		49		1		510
Municipal bonds	1		—		24		6		—		91
U.S. government bonds	18		2		752		25		—		475
Other debt securities	4		1		190		7		—		174
Total NDTF Investments	$	2,775	$	20	$	5,433	$	2,529	$	24	$	4,965

Realized gains and losses, which were determined on a specific identification basis, from sales of FV-NI and AFS securities for the three and nine months ended September 30, 2021, and 2020, were as follows.

	Three Months Ended				Nine Months Ended
(in millions)	September 30, 2021		September 30, 2020		September 30, 2021		September 30, 2020
FV-NI:
Realized gains	$	25	$	10	$	243	$	46
Realized losses	29		12		68		82
AFS:
Realized gains	10		20		35		50
Realized losses	10		17		32		30

PROGRESS ENERGY

The following table presents the estimated fair value of investments in debt and equity securities; equity investments are classified as FV-NI and debt investments are classified as AFS.

	September 30, 2021						December 31, 2020
	Gross		Gross				Gross		Gross
	Unrealized		Unrealized		Estimated		Unrealized		Unrealized		Estimated
	Holding		Holding		Fair		Holding		Holding		Fair
(in millions)	Gains		Losses		Value		Gains		Losses		Value
NDTF
Cash and cash equivalents	$	—	$	—	$	104	$	—	$	—	$	147
Equity securities	1,975		21		2,842		1,696		31		2,550
Corporate debt securities	17		2		352		27		—		296
Municipal bonds	12		1		272		16		—		279
U.S. government bonds	16		6		853		26		—		886
Other debt securities	—		—		5		1		—		6
Total NDTF Investments	$	2,020	$	30	$	4,428	$	1,766	$	31	$	4,164
Other Investments
Cash and cash equivalents	$	—	$	—	$	18	$	—	$	—	$	106
Municipal bonds	2		—		26		3		—		26
Total Other Investments	$	2	$	—	$	44	$	3	$	—	$	132
Total Investments	$	2,022	$	30	$	4,472	$	1,769	$	31	$	4,296

Realized gains and losses, which were determined on a specific identification basis, from sales of FV-NI and AFS securities for the three and nine months ended September 30, 2021, and 2020, were as follows.

	Three Months Ended				Nine Months Ended
(in millions)	September 30, 2021		September 30, 2020		September 30, 2021		September 30, 2020
FV-NI:
Realized gains	$	9	$	3	$	77	$	292
Realized losses	11		4		32		66
AFS:
Realized gains	7		6		14		17
Realized losses	6		2		12		7

DUKE ENERGY PROGRESS

The following table presents the estimated fair value of investments in debt and equity securities; equity investments are classified as FV-NI and debt investments are classified as AFS.

	September 30, 2021						December 31, 2020
	Gross		Gross				Gross		Gross
	Unrealized		Unrealized		Estimated		Unrealized		Unrealized		Estimated
	Holding		Holding		Fair		Holding		Holding		Fair
(in millions)	Gains		Losses		Value		Gains		Losses		Value
NDTF
Cash and cash equivalents	$	—	$	—	$	92	$	—	$	—	$	76
Equity securities	1,882		21		2,736		1,617		31		2,459
Corporate debt securities	17		2		287		27		—		296
Municipal bonds	12		1		272		16		—		279
U.S. government bonds	16		2		466		26		—		412
Other debt securities	—		—		5		1		—		6
Total NDTF Investments	$	1,927	$	26	$	3,858	$	1,687	$	31	$	3,528
Other Investments
Cash and cash equivalents	$	—	$	—	$	16	$	—	$	—	$	1
Total Other Investments	$	—	$	—	$	16	$	—	$	—	$	1
Total Investments	$	1,927	$	26	$	3,874	$	1,687	$	31	$	3,529

Realized gains and losses, which were determined on a specific identification basis, from sales of FV-NI and AFS securities for the three and nine months ended September 30, 2021, and 2020, were as follows.

	Three Months Ended				Nine Months Ended
(in millions)	September 30, 2021		September 30, 2020		September 30, 2021		September 30, 2020
FV-NI:
Realized gains	$	9	$	3	$	76	$	43
Realized losses	11		4		31		51
AFS:
Realized gains	6		6		13		17
Realized losses	5		2		11		7

DUKE ENERGY FLORIDA

The following table presents the estimated fair value of investments in debt and equity securities; equity investments are classified as FV-NI and debt investments are classified as AFS.

	September 30, 2021						December 31, 2020
	Gross		Gross				Gross		Gross
	Unrealized		Unrealized		Estimated		Unrealized		Unrealized		Estimated
	Holding		Holding		Fair		Holding		Holding		Fair
(in millions)	Gains		Losses		Value		Gains		Losses		Value
NDTF
Cash and cash equivalents	$	—	$	—	$	12	$	—	$	—	$	71
Equity securities	93		—		106		79		—		91
Corporate debt securities	—		—		65		—		—		—
U.S. government bonds	—		4		387		—		—		474
Total NDTF Investments(a)	$	93	$	4	$	570	$	79	$	—	$	636
Other Investments
Cash and cash equivalents	$	—	$	—	$	1	$	—	$	—	$	1
Municipal bonds	2		—		26		3		—		26
Total Other Investments	$	2	$	—	$	27	$	3	$	—	$	27
Total Investments	$	95	$	4	$	597	$	82	$	—	$	663

(a)During the nine months ended September 30, 2021, and the year ended December 31, 2020, Duke Energy Florida received reimbursements from the NDTF for costs related to ongoing decommissioning activity of Crystal River Unit 3.

Realized gains and losses, which were determined on a specific identification basis, from sales of FV-NI and AFS securities for the three and nine months ended September 30, 2021, and 2020, were as follows:

	Three Months Ended				Nine Months Ended
(in millions)	September 30, 2021		September 30, 2020		September 30, 2021		September 30, 2020
FV-NI:
Realized gains	$	—	$	—	$	1	$	249
Realized losses	—		—		1		15
AFS:
Realized gains	1		—		1		—
Realized losses	1		—		1		—

DUKE ENERGY INDIANA

The following table presents the estimated fair value of investments in debt and equity securities; equity investments are measured at FV-NI and debt investments are classified as AFS.

	September 30, 2021						December 31, 2020
	Gross		Gross				Gross		Gross
	Unrealized		Unrealized		Estimated		Unrealized		Unrealized		Estimated
	Holding		Holding		Fair		Holding		Holding		Fair
(in millions)	Gains		Losses		Value		Gains		Losses		Value
Investments
Cash and cash equivalents	$	—	$	—	$	19	$	—	$	—	$	1
Equity securities	56		—		90		58		—		97
Corporate debt securities	—		—		5		—		—		3
Municipal bonds	1		1		36		1		—		38
U.S. government bonds	—		—		5		—		—		4
Total Investments	$	57	$	1	$	155	$	59	$	—	$	143

Realized gains and losses, which were determined on a specific identification basis, from sales of FV-NI and AFS securities for the three and nine months ended September 30, 2021, and 2020, were immaterial.

DEBT SECURITY MATURITIES

The table below summarizes the maturity date for debt securities.

	September 30, 2021
			Duke				Duke		Duke		Duke
	Duke		Energy		Progress		Energy		Energy		Energy
(in millions)	Energy		Carolinas		Energy		Progress		Florida		Indiana
Due in one year or less	$	151	$	3	$	121	$	22	$	99	$	5
Due after one through five years	954		343		548		244		304		18
Due after five through 10 years	639		268		286		247		39		8
Due after 10 years	1,482		847		553		517		36		15
Total	$	3,226	$	1,461	$	1,508	$	1,030	$	478	$	46