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Asset Retirement Obligations
 12 Months Ended
Dec. 31, 2019
Asset Retirement Obligation Disclosure [Abstract]  
Asset Retirement Obligations ASSET RETIREMENT OBLIGATIONS
Duke Energy records an ARO when it has a legal obligation to incur retirement costs associated with the retirement of a long-lived asset and the obligation can be reasonably estimated. Certain assets of the Duke Energy Registrants have an indeterminate life, such as transmission and distribution facilities, and thus the fair value of the retirement obligation is not reasonably estimable. A liability for these AROs will be recorded when a fair value is determinable.
The Duke Energy Registrants’ regulated operations accrue costs of removal for property that does not have an associated legal retirement obligation based on regulatory orders from state commissions. These costs of removal are recorded as a regulatory liability in accordance with regulatory accounting treatment. The Duke Energy Registrants do not accrue the estimated cost of removal for any nonregulated assets. See Note 4 for the estimated cost of removal for assets without an associated legal retirement obligation, which are included in Regulatory liabilities on the Consolidated Balance Sheets.
The following table presents the AROs recorded on the Consolidated Balance Sheets.
 
December 31, 2019
 
 
 
Duke

 
 
 
Duke

 
Duke

 
Duke

 
Duke

 
 
 
Duke

 
Energy

 
Progress

 
Energy

 
Energy

 
Energy

 
Energy

 
 
(in millions)
Energy

 
Carolinas

 
Energy

 
Progress

 
Florida

 
Ohio

 
Indiana

 
Piedmont

Decommissioning of nuclear power facilities(a)
$
6,633

 
$
2,551

 
$
4,028

 
$
3,499

 
$
529

 
$
—

 
$
—

 
$
—

Closure of ash impoundments
6,333

 
3,118

 
2,368

 
2,352

 
16

 
41

 
805

 
—

Other
352

 
65

 
75

 
42

 
33

 
39

 
27

 
17

Total asset retirement obligation
$
13,318

 
$
5,734

 
$
6,471

 
$
5,893

 
$
578

 
$
80

 
$
832


$
17

Less: current portion
881

 
206

 
485

 
485

 
—

 
1

 
189

 
—

Total noncurrent asset retirement obligation
$
12,437

 
$
5,528

 
$
5,986

 
$
5,408

 
$
578

 
$
79

 
$
643


$
17

(a)
Duke Energy amount includes purchase accounting adjustments related to the merger with Progress Energy.
Nuclear Decommissioning Liability
AROs related to nuclear decommissioning are based on site-specific cost studies. The NCUC, PSCSC and FPSC require updated cost estimates for decommissioning nuclear plants every five years.
The following table summarizes information about the most recent site-specific nuclear decommissioning cost studies. Decommissioning costs are stated in 2018 or 2019 dollars, depending on the year of the cost study, and include costs to decommission plant components not subject to radioactive contamination.
 
Annual Funding

 
Decommissioning

 
 
(in millions)
Requirement(a)

 
Costs(a)

 
Year of Cost Study
Duke Energy
$
24

 
$
9,152


2018 and 2019
Duke Energy Carolinas(b)(c)
—

 
4,365


2018
Duke Energy Progress(d)
24

 
4,181


2019
Duke Energy Florida(e)
—

 
606


2019
(a)
Amounts for Progress Energy equal the sum of Duke Energy Progress and Duke Energy Florida.
(b)
Decommissioning cost for Duke Energy Carolinas reflects its ownership interest in jointly owned reactors. Other joint owners are responsible for decommissioning costs related to their interest in the reactors.
(c)
Duke Energy Carolinas' site-specific nuclear decommissioning cost study completed in 2018 was filed with the NCUC and PSCSC in 2019. A new funding study was also completed and filed with the NCUC and PSCSC in 2019.
(d)
Duke Energy Progress' site-specific nuclear decommissioning cost study completed in 2019 is expected to be filed with the NCUC and PSCSC during the first quarter 2020. Duke Energy Progress will also complete a new funding study, which will be completed and filed with the NCUC and PSCSC in July 2020.
(e)
During 2019, Duke Energy Florida reached an agreement to transfer decommissioning work for Crystal River Unit 3 to a third party. The agreement requires regulatory approval from the NRC and the FPSC. See Note 4 for more information.
Nuclear Decommissioning Trust Funds
Duke Energy Carolinas, Duke Energy Progress and Duke Energy Florida each maintain NDTFs that are intended to pay for the decommissioning costs of their respective nuclear power plants. The NDTF investments are managed and invested in accordance with applicable requirements of various regulatory bodies including the NRC, FERC, NCUC, PSCSC, FPSC and the IRS.
Use of the NDTF investments is restricted to nuclear decommissioning activities including license termination, spent fuel and site restoration. The license termination and spent fuel obligations relate to contaminated decommissioning and are recorded as AROs. The site restoration obligation relates to non-contaminated decommissioning and is recorded to cost of removal within Regulatory liabilities on the Consolidated Balance Sheets.
The following table presents the fair value of NDTF assets legally restricted for purposes of settling AROs associated with nuclear decommissioning. Duke Energy Florida is actively decommissioning Crystal River Unit 3 and was granted an exemption from the NRC, which allows for use of the NDTF for all aspects of nuclear decommissioning. The entire balance of Duke Energy Florida's NDTF may be applied toward license termination, spent fuel and site restoration costs incurred to decommission Crystal River Unit 3 and is excluded from the table below. See Note 17 for additional information related to the fair value of the Duke Energy Registrants' NDTFs.
 
December 31,
(in millions)
2019
 
2018
Duke Energy
$
6,766

 
$
5,579

Duke Energy Carolinas
3,837

 
3,133

Duke Energy Progress
2,929

 
2,446


Nuclear Operating Licenses
Operating licenses for nuclear units are potentially subject to extension. The following table includes the current expiration of nuclear operating licenses.
Unit
Year of Expiration
Duke Energy Carolinas
 
Catawba Units 1 and 2
2043
McGuire Unit 1
2041
McGuire Unit 2
2043
Oconee Units 1 and 2
2033
Oconee Unit 3
2034
Duke Energy Progress
 
Brunswick Unit 1
2036
Brunswick Unit 2
2034
Harris
2046
Robinson
2030

The NRC has acknowledged permanent cessation of operation and permanent removal of fuel from the reactor vessel at Crystal River Unit 3. Therefore, the license no longer authorizes operation of the reactor. In 2019, Duke Energy Florida entered into an agreement for the accelerated decommissioning of Crystal River Unit 3. The agreement is subject to the approval of the NRC and FPSC. See Note 4 for more information.
Closure of Ash Impoundments
The Duke Energy Registrants are subject to state and federal regulations covering the closure of coal ash impoundments, including the EPA CCR rule and the Coal Ash Act, and other agreements. AROs recorded on the Duke Energy Registrants' Consolidated Balance Sheets include the legal obligation for closure of coal ash basins and the disposal of related ash as a result of these regulations and agreements.
The ARO amount recorded on the Consolidated Balance Sheets is based upon estimated closure costs for impacted ash impoundments. The amount recorded represents the discounted cash flows for estimated closure costs based upon specific closure plans. Actual costs to be incurred will be dependent upon factors that vary from site to site. The most significant factors are the method and time frame of closure at the individual sites. Closure methods considered include removing the water from ash basins, consolidating material as necessary and capping the ash with a synthetic barrier, excavating and relocating the ash to a lined structural fill or lined landfill or recycling the ash for concrete or some other beneficial use. The ultimate method and timetable for closure will be in compliance with standards set by federal and state regulations and other agreements. The ARO amount will be adjusted as additional information is gained through the closure and post-closure process, including acceptance and approval of compliance approaches, which may change management assumptions, and may result in a material change to the balance. See ARO Liability Rollforward section below for information on revisions made to the coal ash liability during 2019 and 2018.
Asset retirement costs associated with the AROs for operating plants and retired plants are included in Net property, plant and equipment and Regulatory assets, respectively, on the Consolidated Balance Sheets. See Note 4 for additional information on Regulatory assets related to AROs.
Cost recovery for future expenditures will be pursued through the normal ratemaking process with federal and state utility commissions, which permit recovery of necessary and prudently incurred costs associated with Duke Energy’s regulated operations. See Note 4 for additional information on recovery of coal ash costs.
ARO Liability Rollforward
The following tables present changes in the liability associated with AROs.
 
 
 
Duke

 
 
 
Duke

 
Duke

 
Duke

 
Duke

 
 
 
Duke

 
Energy

 
Progress

 
Energy

 
Energy

 
Energy

 
Energy

 
 
(in millions)
Energy

 
Carolinas

 
Energy

 
Progress

 
Florida

 
Ohio

 
Indiana

 
Piedmont

Balance at December 31, 2017
$
10,175

 
$
3,610

 
$
5,414

 
$
4,673

 
$
742

 
$
84

 
$
781

 
$
15

Accretion expense(a)
427

 
179

 
225

 
196

 
29

 
4

 
29

 
1

Liabilities settled(b)  
(638
)
 
(281
)
 
(272
)
 
(227
)
 
(45
)
 
(5
)
 
(79
)
 
—

Liabilities incurred in the current year(c)
39

 
8

 
5

 
—

 
5

 
—

 
25

 
—

Revisions in estimates of cash flows
464

 
433

 
39

 
178

 
(140
)
 
10

 
(34
)
 
3

Balance at December 31, 2018
10,467


3,949


5,411


4,820


591


93


722

 
19

Accretion expense(a)
508

 
235

 
252

 
227

 
25

 
3

 
28

 
1

Liabilities settled(b)  
(895
)
 
(329
)
 
(499
)
 
(460
)
 
(39
)
 
(12
)
 
(54
)
 
—

Liabilities incurred in the current year
25

 
18

 
7

 
—

 
7

 
—

 
—

 
—

Revisions in estimates of cash flows(d)
3,213

 
1,861

 
1,300

 
1,306

 
(6
)
 
(4
)
 
136

 
(3
)
Balance at December 31, 2019
$
13,318


$
5,734


$
6,471


$
5,893


$
578


$
80


$
832

 
$
17

(a)
Substantially all accretion expense for the years ended December 31, 2019, and 2018, relates to Duke Energy’s regulated operations and has been deferred in accordance with regulatory accounting treatment.
(b)
Amounts primarily relate to ash impoundment closures and nuclear decommissioning of Crystal River Unit 3.
(c)
Amounts primarily relate to AROs recorded as a result of state agency closure requirements at Duke Energy Indiana.
(d)
Amounts primarily relate to increases in closure estimates for certain ash impoundments as a result of the NCDEQ's April 1 Order and the related settlement agreement dated December 31, 2019. See Note 5 for more information. The amount recorded in the fourth quarter of 2019 for coal ash closures as a result of the settlement was not material.