Duke Energy Corporation (Holding Company)

Good morning. Thank you for attending today's Duke Energy Quarter One 2022 conference call. My name is Amber and I will be your moderator for today's call. All lines will be muted during the presentation portion of the call with an opportunity for questions and answers at the end. If you would like to ask a question, please press star one on your telephone keypad at any time. I now have the pleasure of handing the conference over to our host, Jack Sullivan, Vice President of Investor Relations with Duke Energy. Mr. Sullivan, please proceed.

Thank you, Amber. Good morning, everyone, and welcome to Duke Energy's first quarter 2022 earnings review and business update. Leading our call today is Lynn Good, Chair, President, and Chief Executive Officer, along with Steve Young, Executive Vice President and CFO. Today's discussion will include the use of non-GAAP financial measures and forward-looking information within the meaning of securities laws. Actual results may be different than forward-looking statements, and those factors are outlined herein and disclosed in Duke Energy's SEC filings. The appendix of today's presentation includes supplemental information and disclosures, along with a reconciliation of non-GAAP financial measures. So with that, let's turn the call over to Lynn.

Jack, thank you, and good morning, everyone. Today we announced adjusted earnings per share of $1.30 for the quarter, delivering strong results to start the year driven by continued growth and electric volumes. That growth was partially offset by $0.07 of higher expense from severe winter storms. I'd like to take a moment to thank approximately 19,000 restoration workers who worked tirelessly to restore power to over 1 million customers across a series of winter storms, the most we've seen in eight years. Despite the Q1 storms, we remain on track to deliver within our original guidance range and are reaffirming our full year earnings guidance range of 530 to 560 with a midpoint of 545. We're also reaffirming our long-term EPS birth rate of 5% to 7% through 2026, up the midpoint of our original 2021 guidance range. We're monitoring economic trends and will take action if necessary as we continue to execute the important strategic work we have underway in the Carolinas, Indiana, and Florida. I will touch on this more in just a moment. Turning to slide five, we published our first ESG report in late April that expands on our historic sustainability themes and adds more insight on social and governance topics. We've included some highlights and key accomplishments on this slide. We've got a strong track record in each of these areas and have established ambitious targets for the future. Our work has been recognized across the ESG community, including by MSCI, which upgraded our ESG rating to AA in February. We're also laying the groundwork for even more progress with our proposed carbon plan in North Carolina, our IRP in Indiana, and our ongoing solar and grid investments in Florida. We look forward to sharing additional updates throughout the year and during our ESG day on October 4th. Moving to slide six, let me spend a few minutes on North Carolina. There's been meaningful progress in the state implementing the framework set forth in House Bill 951. As a reminder, this landmark bipartisan legislation provides for a clean energy transition as well as modernized performance-based rate-making provisions, including multi-year rate plans, performance incentive measures, and residential decoupling. We've been working closely with stakeholders on the development of our proposed carbon plan, which we will file with the Commission on May 16th. The plan will outline multiple portfolios to achieve the 70% carbon reduction target, including proposals around timing of coal plant retirements and resource additions. We expect substantial solar and battery additions, demand-side management, and energy efficiency opportunities in every pathway. Onshore and offshore wind will be presented for consideration as well as small modular nuclear reactors. Each portfolio has been rigorously tested for reliability and affordability for our customers. Following the May 16th filing of our proposed carbon plan, the Commission will gather additional stakeholder input, make adjustments, and approve a final plan by the end of the year. The plan will be updated every two years thereafter. In February, the North Carolina Utilities Commission issued its order on rulemaking for performance-based regulation. And in April, the Commission issued its order on rulemaking for coal plant securitization. This allows our North Carolina utilities to securitize half of the remaining carrying value of certain coal plants upon their early retirement. Both orders were constructive, establishing processes that are fair, balanced, and consistent with the policy objectives of HB 951. Another strategic priority for 2022 is to file a rate case introducing the modernized rate making tools approved in HB 951. The NCUC has established a process for these filings that include technical conferences on the multi-year rate plans prior to filing. We currently expect to file a DEP North Carolina rate case in the fourth quarter and likely a DEC North Carolina rate case early next year. Turning to slide seven, I'd like to touch on the key initiatives across our service territories. In South Carolina, storm cloth securitization legislation continues to move forward. The proposed legislation has passed in the Senate and is now being heard in the House. If enacted, this legislation would provide an additional tool to recover prior and future storm restoration cloths, creating significant savings for our customers as compared to traditional recovery mechanisms. Moving to Florida, we're making investments to harden the grid under our storm protection plan. We recently filed our updated plan, which includes $7 billion of capital investments over the next 10 years. In Indiana, we filed requests for proposals for up to 2,400 megawatts of new generation through 2027, which includes both intermittent and dispatchable resources to support our transition from coal. We're pleased with the response to our intermittent RFP, having received bids from 13 developers on more than 30 different projects, totaling over 7,000 megawatts. On May 2nd, we received the bids for the dispatchable portion of the RFP and are reviewing them now. We expect to file CPCNs with the Indiana Utility Regulatory Commission later this year. In November, we filed our second TDIF plan in Indiana. The six-year, $2 billion plan includes investments to improve customer reliability, harden the grid, and prepare for distributed generation. A hearing was held in March, and we expect to receive a decision from the Commission in July. If approved, the program would begin in 2023. Shifting to the LDCs, we continue to make investments to build needed infrastructure, improve reliability, and to comply with federal regulations. In South Carolina, we filed a general rate case in April. If approved, we anticipate revised customer rates will be effective by October. And in Tennessee, legislation was recently passed that will allow natural gas utilities to invest in low to zero emission capital projects. This legislation will help enable our decarbonization vision for our natural gas business unit and could serve as a blueprint for legislation in other states across the country. In closing, we're making progress on all fronts across our jurisdictions, meeting our commitments and executing our clean energy strategy. We have a clear path forward for 2022 and believe our investment plan will deliver sustainable value to shareholders and 5% to 7% earnings growth over the next five years. And with that, let me turn the call over to Steve.