Duke Energy Corporation (Holding Company)

Good morning. Thank you for attending today's Duke Energy fourth quarter and year-end 2022 earnings 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 queue for a question on today's call, you can do so by dialing star 1. I would now like to pass the conference over to your host, Abby Motzinger, Vice President of Investor Relations. Thank you. You may proceed.

Thank you, Joel, and good morning, everyone. Welcome to Duke Energy's fourth quarter 2022 earnings review and business update. Leading our call today is Lynn Good, Chair, President, and CEO, along with Brian Savoy, 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 the reconciliation of non-GAAP financial measures. So with that, I'll turn the call over to Lynn.

Abby, thank you. And good morning, everyone. Today we announced adjusted earnings per share of $5.27, closing out a successful 2022. We achieved results solidly within our updated guidance range while making significant progress on our strategic goals, responding to external pressures and delivering constructive outcomes across our jurisdictions. As a result, today we're reaffirming our 2023 guidance range of 555 to 575 with a midpoint of 565. We're also reaffirming our 5 to 7% growth rate through 2027 off the midpoint of our 2023 range. This reflects the strength of our regulated businesses, our disciplined approach to cost management, and a robust $65 billion capital plan that supports our thriving jurisdictions. Before I turn to our regulated utilities, let me provide a brief update on the sale of our commercial renewables business. The sale process continues to progress, but as with the sale of any large-scale business, the timing tends to evolve. We remain on track to exit both the utility scale and the distributed energy businesses and now anticipate proceeds in the second half of the year. We will continue to keep you updated along the way. Turning to slide five, we've reached a significant milestone in our clean energy transition. On December 30th, the North Carolina Utilities Commission issued an order adopting an initial carbon plan. This constructive order is the culmination of years of work with policymakers and stakeholders to chart a responsible path for the energy transition. The order recognizes the value of an all of the above approach to achieving carbon reduction targets in a manner that balances affordability and reliability for customers. The near-term action plan provides approval of 3,100 megawatts of solar and 1,600 megawatts of storage. as well as transmission upgrades to support the integration of these renewable resources. The Commission also approved limited development activities associated with longer lead time investments, including small modular nuclear reactors, pumped hydro, and transmission related to offshore wind. And as part of an orderly transition out of coal by 2035, the Commission supported planning for approximately 2,000 megawatts of new natural gas generation to maintain reliability. Through its order, the Commission reinforced the importance of maintaining a diverse generation mix while conducting an orderly clean energy transition and was clear that ensuring replacement generation is available and online prior to the retirement of existing coal units is a shared priority. The carbon plan provides a constructive roadmap that delivers on our strategic priorities and supports the needs of our customers and communities today and into the future. It supports our capital plan and provides the clarity we need to advance critical near-term investments. We look forward to continuing our progress through our updated carbon plan filing in North Carolina later this year. Moving to slide six, we're making meaningful progress on our strategic initiatives in each of our jurisdictions. In North Carolina, we filed our first performance-based rate application for our Duke Energy Carolinas utility on January 19th. which followed a similar filing for our DEP utility last fall. The request includes a multi-year rate plan to fund system improvements to meet the growing needs of our customer base, including $4.7 billion of capital projects that are expected to go into service over the three-year period. These investments are primarily T&D related projects that support the security and reliability of the grid. as well as approximately $300 million of solar and storage investments consistent with the carbon plan order. Our request is mitigated by a reduction in operating costs since our last rate case, evidence of our continued ability to manage costs to keep customer rate increases down. Evidentiary hearings are expected to begin in the third quarter, and consistent with past practice, we intend to implement temporary rates in September subject to refunds. If approved, we expect year one revised rates to be effective by early 2024. In South Carolina, we were very pleased to reach a comprehensive settlement in January with all parties in our Duke Energy Progress rate case. The settlement, which is subject to commission review and approval, includes a 9.6 ROE, the continuation of deferrals for grid and coal ash spend, and supports accelerated retirement dates for certain coal units. In fact, the settlement is on the Commission's agenda for this afternoon, and if approved, new rates are expected to be implemented in April. We also plan to file an updated IRP in South Carolina later this year, which will take into account the carbon plan and the Inflation Reduction Act. Turning to Florida, on January 23rd, we filed a petition to adjust customer rates for deferred 2022 fuel costs. less the impact of lower forecasted fuel prices in 2023. We are also flowing back IRA tax savings to our Florida customers as of January 1st. In Indiana, we're updating our IRP to reflect results of the 2022 RSP process, regional transmission operator requirements, and the Inflation Reduction Act. We expect to begin filing for certificates of need for new power generation in the second quarter. In Ohio, the Commission approved in full our electric rate case settlement in December, which supports the recovery of grid investments to improve reliability and service for our customers. In December, we also filed an electric rate case in Kentucky. The request reflects more than $300 million in investments we've made to strengthen the generation and delivery systems, as well as updated retirement dates for our Kentucky fleet. As we advance our regulatory strategy, affordability remains top of mind. Brian will go into more detail on steps we're taking across our jurisdictions to lower costs for customers. Finally, I want to highlight a well-deserved recognition for our Piedmont natural gas team. In December, J.D. Power ranked Piedmont number one in residential customer satisfaction for natural gas service in the Southeast. This is the first time Piedmont has received a number one ranking and is a testament to the commitment to our customers. In summary, 2022 was an extraordinary year for Duke Energy as we made strong progress executing our strategy, responding to difficult external pressures, and advancing our clean energy transformation. Our path forward remains clear. As we continue to navigate our energy transition, we will do so responsibly, preserving affordability and reliability for our customers and remaining good stewards of our communities. I'm confident that our strategy will continue to deliver consistent and lasting benefits to our customers, communities, and investors. With that, let me turn the call over to Brian.