ACQUISITIONS AND DISPOSITIONS

Purchase of NCEMPA's Generation

On July 25, 2014, Duke Energy Progress executed an agreement to purchase North Carolina Eastern Municipal Power Agency’s (NCEMPA) ownership interests in certain generating assets jointly owned with and operated by Duke Energy Progress. The agreement provides for the acquisition of a total of approximately 700 MW at Brunswick Nuclear Station, Harris Nuclear Station, Mayo Steam Station and Roxboro Steam Station. The purchase price for the ownership interest and fuel and spare parts inventory is approximately $1.2 billion. Under the agreement, Duke Energy Progress and NCEMPA will enter into a 30-year wholesale power supply agreement to continue meeting the needs of NCEMPA’s customers. There are several state and federal regulatory approvals required prior to completing the transaction. The agreement requires the transaction to be completed by the end of 2016.

Midwest Generation Exit

On February 17, 2014, Duke Energy Ohio announced it had initiated a process to exit its nonregulated Midwest generation business. Duke Energy Ohio expects to dispose of the nonregulated Midwest generation business by the end of the first quarter of 2015. Based on this expected sale date, Duke Energy Ohio triggered held-for-sale accounting treatment on March 31, 2014. Duke Energy and Duke Energy Ohio have classified the assets and associated liabilities of this business as held for sale in the Condensed Consolidated Balance Sheet at June 30, 2014.

Duke Energy and Duke Energy Ohio each recorded pretax impairments on these assets of approximately $1,402 million and $1,438 million, respectively, for the six months ended June 30, 2014, which represents the excess of the carrying value over the estimated fair value of the business, less estimated costs to sell. These losses were included in Impairment charges in the Condensed Consolidated Statements of Operations and Comprehensive Income. The fair value of the disposal group was based on the income approach, which estimates fair value using discounted cash flows, and indicative bids received to date. The impairment will be updated, if necessary, based on changes in estimated fair value as additional information related to the potential transaction becomes available.

Duke Energy and Duke Energy Ohio ceased depreciating the fixed assets of the disposal group on March 31, 2014. Duke Energy and Duke Energy Ohio avoided depreciation expense of $42 million for the three and six months ended June 30, 2014.

The nonregulated Midwest generation business is included in the Commercial Power segment. The following table presents information related to the Duke Energy Ohio generation plants included in the disposal group.



Facility	Plant Type	Primary Fuel	Location	Total Average MW Capacity^(c)	Owned Average MW Capacity^(c)	Ownership Interest
Stuart^(a)(b)	Fossil Steam	Coal	OH	2,318	904	39	%
Zimmer^(a)	Fossil Steam	Coal	OH	1,338	622	46.5	%
Hanging Rock	Combined Cycle	Gas	OH	1,274	1,274	100	%
Miami Fort (Units 7 and 8)^(a)	Fossil Steam	Coal	OH	1,020	653	64	%
Conesville^(a)(b)	Fossil Steam	Coal	OH	780	312	40	%
Washington	Combined Cycle	Gas	OH	637	637	100	%
Fayette	Combined Cycle	Gas	PA	640	640	100	%
Killen^(a)(b)	Fossil Steam	Coal	OH	618	204	33	%
Lee	Combustion Turbine	Gas	IL	640	640	100	%
Dick's Creek	Combustion Turbine	Gas	OH	136	136	100	%
Miami Fort	Combustion Turbine	Oil	OH	68	68	100	%
Total Midwest Generation				9,469	6,090


(a)	Jointly owned with Ohio Power Company and/or The Dayton Power & Light Company.


(b)	Station is not operated by Duke Energy Ohio.


(c)	Average MW capacity is calculated as the average of winter capacity and summer capacity.

The disposal group also includes a retail sales business owned by Duke Energy. In the second quarter of 2014, Duke Energy Ohio removed Ohio Valley Electric Corporation (OVEC) from the disposal group as it no longer intends to sell it with the nonregulated Midwest generation business. Duke Energy Ohio has requested cost-based recovery of its contractual entitlement in OVEC in its 2014 Electric Security Plan (ESP) application filed on May 29, 2014. See Note 4 for information related to the 2014 ESP.

The following table presents the carrying values of the major classes of Assets held for sale and Liabilities associated with assets held for sale included in the Midwest generation disposal group in the Condensed Consolidated Balance Sheets. Amounts included in the following table exclude certain other disposal groups which are not material and accordingly do not agree to amounts presented in the Duke Energy Condensed Consolidated Balance Sheets.



	June 30, 2014
(in millions)	Duke Energy		Duke Energy Ohio
Current assets	$	409	$	359
Investments and other assets	42		37
Property, plant and equipment	2,153		2,116
Total assets held for sale	$	2,604	$	2,512
Current liabilities	$	271	$	257
Deferred credits and other liabilities	75		74
Total liabilities associated with assets held for sale	$	346	$	331