Duke Energy Corporation (Holding Company)

Good morning, thank you for attending the Duke Energy Third Quarter Earnings Review and Business Update. My name is Matt, and I'll be your moderator for today's call. All lines be muted during the presentation portion of the call for an opportunity for questions and answers at the end. If you'd like to ask a question, please press star one on your telephone keypad. I will now turn the call over to our host, Abby Motziker, Vice President of Investor Relations. Abby, please go ahead.

Thank you, Matt, and good morning, everyone. Welcome to Duke Energy's third quarter 2023 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. Actual results may differ from forward-looking statements due to factors disclosed in today's materials and in Duke Energy's SEC filings. The appendix of today's presentation includes supplemental information, along with a reconciliation of non-GAAP financial measures. With that, let me turn the call over to Lynn.

Ebi, thank you, and good morning, everyone. Today, we announced strong results for the third quarter, adjusted earnings per share of $1.94 compared to $1.78 for last year. During the quarter, we also made great progress on regulatory outcomes and simplification of the business. This momentum is underpinned by our strong fundamentals we've a track record of operational excellence and serve growing jurisdictions with a long runway of investment opportunities. This position that's well for the future and gives us confidence and reaffirming our long term earnings growth rate of five to 7%. For 2023 we continue to work our cost structure to set mild weather and weaker industrial volumes. Brian will talk more about load and cost agility efforts, but I want to take a moment to recognize the incredible work across the organization to mitigate pressures in 2023. Across the company, agility measures, savings opportunities, and efficiency improvements are well underway, while never compromising on our commitment to safety and customers. We expect to finish the year within our guidance range, trending to the lower half of the range. Moving to slide five, let me spend a moment on the meaningful progress we've made in North Carolina. In August, the North Carolina Utilities Commission approved our Duke Energy Progress rate case application and related settlements. This order is the culmination of years of work with stakeholders and represents a significant milestone, the first implementation of performance-based regulations, including multi-year rate plans authorized by HB 951. The order approved a retail rate base of $12.2 billion, a $1.6 billion increase from our last case, along with roughly $3.5 billion in future capital investments in the multi-year rate plan. Importantly, the order also recognized the rising cost of capital, increasing the allowed ROE to 9.8% and the equity component of the capital structure to 53%. This outcome positions us well to continue delivering value to customers while supporting the cash flows of the company. New rates and residential decoupling were implemented on October 1. Turning to the Duke Energy Carolina's rate case, in late August we reached a partial settlement with the public staff on many aspects of the case. The settlement provides clarity on retail rate base of approximately $19.5 billion, a $2.6 billion increase from our last case, and includes nearly $4.6 billion of capital investments in the multi-year rate plan. A second settlement with the public staff further narrowed the open items in the case and also addressed nuclear PTCs, which Brian will provide more detail on in a moment. We expect the NCUC to issue its decision by the end of the year and expect permanent rates to be in fact by January 2024. We're pleased with the constructive outcome at DEP and look forward to finalizing the DEC rate case in the coming weeks. North Carolina. is our largest jurisdiction, so constructive outcomes are critical to supporting a strong balance sheet and de-risking our five-year plan. Turning to slide six, I'd like to highlight our updated Carolinas Resource Plan, which is driving material growth and capital investment opportunities as we lead the nation's largest energy transition. In mid-August, we filed our updated resource plan with the Public Service Commission of South Carolina and the North Carolina Utilities Commission. The single unified resource plan for the Carolinas is designed to meet the needs of this growing region spurred by rapid population growth and significant economic development activity. The plan maintains an all of the above strategy with a diverse deployment of additional resources, including renewables, battery storage and natural gas, as well as energy efficiency and demand side management. It also provides the opportunity to evaluate emerging technologies. pursue an early site permit for advanced nuclear and early development activities for expanded pumped storage hydro at Bad Creek. The filing included details about our annual solar procurement, which targets over a gigawatt of new solar each year beginning in 2027. It also outlines plans to build additional natural gas generation to maintain reliability and affordability as coal plants are retired. Since the resource plan filing, We filed pre-CPCNs with ENCUC for a combined cycle plant on September 1st and combustion turbines on November 1st. We will make our full CPCN filings in the first quarter of 2024. Similar to previous filings, the Carolinas Resource Plan is based on significant stakeholder engagement and outlines multiple portfolios, each of which preserve affordability and reliability while transitioning to cleaner energy resources. Next steps will include hearings in both states in the spring of 2024. We expect an order in South Carolina in mid-24 and an order in North Carolina by the end of 24. Turning to slide seven, with the closing of the commercial renewable sale last month, our portfolio repositioning is complete. We are now a fully regulated company operating in some of the fastest growing and most attractive jurisdictions across the U.S. I just mentioned some of our progress in North Carolina and our other utilities continue to deliver as well. At Piedmont, we recently received South Carolina Commission approval of our settlement and our RSA proceeding. We also received approval of our settlement and our ARM proceeding in Tennessee. These annual rate updates allow for efficient recovery of investments as we continue to modernize our natural gas system. And at DEC South Carolina, We've made significant investments since our last rate case in 2019 and are evaluating the timing of our next rate case application. These investments have strengthened the grid against storms, reduced outage times, and maintained the high level of reliable service our customers expect. In Florida, we're seeing some of the fastest customer growth in the state and have efficient recovery mechanisms for our grid and solar investments. Our response to Hurricane Adalia in September yet again demonstrated the value of our grid-hardening investments. The storm caused over 200,000 outages, and we restored power to 95% of customers within 36 hours. Further, our investment in self-healing grid technologies saved more than 7 million outage minutes for customers. Shifting to the Midwest, in October, the Kentucky Public Service Commission approved the new rates in our electric rate case, which utilized a forecasted test year. And the Commission approved a 9.75 ROE, a 50 basis point increase from the previous case, as well as increasing the equity component of the capital structure to 52%. Across our footprint, we've built considerable momentum over the last year, and our long-term organic growth strategy has never been more clear. This past year has made our company stronger and more agile as we've responded to macroeconomic headwinds. I'm confident we're well positioned to deliver sustainable value and 5% to 7% earnings growth over the next five years. And with that, let me turn the call to Brian.