Q3 2021 Duke Energy Corp Earnings Call

November 4, 2021

We standby.

Good day, everyone and welcome to the Duke Energy third quarter earnings call. Today's call is being recorded and now at this time I'd like to turn the call over to Jack Sullivan, Vice President Investor Relations. Please go ahead.

Thank you April good.

Everyone and welcome to Duke Energy's third quarter, 2021 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 in forward looking statements and those factors are outlined herein and disclosed and Duke Energy's SEC filings.

A reconciliation of non-GAAP financial measures can be found in today's materials and on Duke energy Dot com.

Please note the appendix for today's presentation includes supplemental information and additional disclosures.

So with that let's turn the call over to Lynn.

Thank you and good morning, everyone. It's great to be with you for our third quarter 2021 earnings call.

Today, we announced strong results for the quarter with adjusted earnings per share of $1 88, driven by growth at our electric utilities were well positioned for a solid finish to the year and are narrowing our full year guidance range to 515 to $5 30, raising the midpoint to the upper half of our original.

Range.

We're also reaffirming our long term EPS growth rate of five years to 7% through 2025.

Based off our original 2021 guidance range.

Before I hand, it over to Steve for a financial update I'd like to discuss the important progress we've made on our climate goals and highlight recent and critical accomplishments that help advance our clean energy transformation.

Turning to slide five we've been actively engaged with policymakers and stakeholders across the Carolinas for several years to chart a path toward cleaner energy.

Our 2020 I, our Pes filed in both states reflect our goal to pursue an orderly energy transition achieving our aggressive carbon reduction, while maintaining affordability and reliability.

These filings in ongoing conversations in both states have been informed by robust stakeholder engagement and feedback.

In October North Carolina took an additional step consisting with consistent with their long standing history of proactively tackling complex energy issues. When state leaders came together to pass a landmark bipartisan law helps the line 51.

That accelerates the clean energy transition.

I'll still line 51 provides a framework to achieve 70% carbon reduction by 23, while continuing to prioritize affordability and reliability for customers.

It also sets into law, our corporate goal of net zero carbon emissions by 2050.

The roadmap to achieve these goals will come in the form of a carbon reduction plan, which.

Which will be approved by the North Carolina Utilities Commission by the end of 2022.

We anticipate the active involvement of South Carolina, and this process as they have been over the decades and developing and retiring assets that serve both states. The plant will also be informed by stakeholders.

<unk> of the conversations that have been ongoing over the last several years.

Consistent with the vertically integrated utility model helps fill 951 calls for utilities to of new generation or other resources selected by the commission.

With the exception of solar generation, which contemplates, 55% utility ownership and the remaining procured through ppas.

Throughout our history, we have offered rate protections for low income customers in house Bill 951 takes further steps to prioritize affordability.

The legislation calls for securitization of 50% of critical coal plants up on their early retirement, which will lower customer rates.

Additionally, we've initiated a low income collaborative to propose new low income programs to further help our customers.

The legislation also adopt modern regulatory mechanisms in North Carolina, including multi year rate plans performance based ratemaking and residential decoupling, all designed to better align utility investments with customer needs and improve rate certainty.

As we look ahead, our pace of change will accelerate as we work toward our carbon reduction goals and the broader clean energy transformation across all of our jurisdictions.

With this in mind, we expect our enterprise capital plan for the next five years through 2026 to increase to the $60 $65 billion range.

And then moving into the back half of the decade, we estimate to be in the top half.

Of our $65 billion to $75 billion range.

And we will provide more details on our updated capital and financing plans on our fourth quarter call in February.

Turning to slide six it's been one year since we hosted our first ESG Investor day, where.

Where we laid out several targets in our path to net zero carbon and methane emissions.

We're making meaningful progress across these goals, while also advancing social responsibility and corporate governance work.

We exceeded 40% carbon reduction across the enterprise in 2020, and we continue to accelerate coal retirements and add significant amounts of renewables to our system.

Our path to net zero is underpinned by strong governance collaboration with stakeholders in our culture rooted in diversity equity and inclusion.

Our long term investment strategy also provides societal benefits as demonstrated by our commitment to environmental Justice.

Earlier this week, we launched a new sustainable financing framework to help fund investments and eligible green and social projects. This framework provides additional transparency around our investments and clearly defined projects aligned with our ESG priorities.

And as a testament to our strong culture of governance and accountability, we were recognized by Labrador as 2021 transparency Awards.

It's the number one utility for overall transparency.

Well, there's more to do we're proud of our progress and are poised for more in the years ahead.

We look forward to holding another ESG day with you in 2022 to dive deeper into our commitments and our accomplishments.

Turning to slide seven we continue to work with stakeholders at federal state and local levels to make this clean energy vision possible, while maintaining reliability and affordability for customers.

In South Carolina, we filed a modified IOP at the end of August incorporating feedback from the public service Commission and demonstrating further progress toward cleaner energy.

The plan includes a balanced resource mix, expanding renewable generation storage retiring coal and achieving significant carbon reductions.

We expect an order from the commission later this year and believe this filing is an important foundational element to the continued conversation on the pace and approach to the clean energy transition and the Carolinas.

Strategic progress continues in Florida, as well, we announced four new solar projects in the third quarter as part of our clean energy connection program and we continue to harden the grid through our storm protection plan writer.

As we prepare to submit our Indiana IOP later this month, we gathered input from business customers consumer advocates environmental groups on transitioning to cleaner generation, while keeping a sharp focus on reliability and affordability.

The IR people will continue to advance efforts to shift away from coal and we remain engaged with stakeholders and policymakers to find the best path forward for the state.

Finally, we are engaging with Congress and the administration on a wide range of issues, including infrastructure tax and climate policy we.

We support new federal policies that align with our clean energy transition by modernizing and investing in our nation's infrastructure and helping to fund the development of advanced clean energy technologies.

From a regulatory point of view, we are pleased that FERC has accepted the application filed by Duke and the other members of the southeast energy exchange market known as seen.

This allows the members to proceed with the development of the trading platform.

Same as a low cost low risk way to provide immediate customer benefits through a shared market structure, while advancing more renewables throughout the south east.

In closing the fundamentals of our business are strong and we're meeting our financial and strategic objectives, while continuing to focus on operational excellence.

We operate in constructive jurisdictions that continue to drive new customers sort of at growth rates above national averages are.

Our climate goals are driving our investment strategy and long term planning and we continued to make progress on all fronts.

We have a clear line of sight to achieving our 2030 goals.

Over this decade, we will deploy one of the largest capital investment plans in the country focused on building clean energy infrastructure.

Investments that will benefit the environment, our customers and communities and our investors.

With this positive momentum we are highly confident in our 5% to 7% EPS growth range and see the potential over time to earn in the top half of this range.

With that let me turn it over to Steve.

Thanks, Lynn and good morning, everyone I'll start with a brief discussion over quarterly results highlighting a few of the key variances to the prior year.

For more detailed information on variance drivers and a reconciliation of reported to adjusted results. Please refer to the supporting materials that accompany today's press release and presentation.

As shown on slide eight our third quarter reported earnings per share was $1 79, and our adjusted earnings per share was $1 88, the difference between third quarter reported and adjusted earnings per share was primarily due to a charge related to the 2018, South Carolina rate cases, partially offset by proceeds from the settlement.

With insurers on coal Ash basin closure costs.

The adjusted earnings per share results in the quarter continued to be strong led by electric utilities and infrastructure, which was up 10 cents compared to the prior year.

<unk> were driven by favorable volumes benefits from base rate increases in riders, partially offsetting these items were higher O&M cost when compared to 2020 levels due to COVID-19 mitigation efforts in the prior year.

Shifting to gas utilities and infrastructure results were flat to last year.

And our commercial renewables segment results were up two cents for the quarter driven by investments in the marine New wind and flew Gerbils solar projects. Other was unfavorable three cents for the quarter, principally due to higher income tax expense.

Call in 2020 that we executed tax optimization levers as part of our Covid mitigation strategy.

Finally segment results were impacted by eight cents per share of diluted dilution related to the $2 5 billion dollar equity issuance that closed in December 2020.

Overall, we were pleased with the results for the quarter supported by our continued execution on the rebounding economy, we remain confident in our ability to consistently grow our adjusted earnings per share at 5% to 7% through it throughout the five year period off of the $5 15 midpoint of our 2021 guidance.

Range turning to slide nine we were pleased to see our electric volumes continue to bounce back because the economic recovery progresses results for the third quarter were up approximately three 4% year over year and for the second consecutive quarter results are near or above pre pandemic levels with the third quarter.

One 3% versus 2019.

Looking more closely at the customer classes residential volumes were down 2% for the quarter as people began to return to the workplace. We continue to see strong customer growth of one 7% year to date.

When comparing this quarters residential volumes to that of 2019, we see that volumes have risen almost 4% highlighting the continued strength of the residential class.

The robust labor market recovery in our service territories is driving the improvement in the commercial and industrial classes.

So volumes were up five 3% and industrial was up seven 2%.

Our four largest states representing nearly 90% of our overall electric volumes job recovery is outpacing the national average. This is a testament to the attractive jurisdictions in which we operate.

We continue to monitor the impact that our largest customers may experience due to supply chain disruptions.

And today, we have seen only minor impacts in certain sectors, such as suppliers of the automotive industry.

We serve a diverse customer base expanding a variety of industries mitigating sector specific impacts.

As we progressed towards the end of the year. We are encouraged by the sales trends, we have seen bolstered by strong customer growth across our service territories, which support load growth over the long term.

With a rolling 12 month retail Louis growing at two 1%, we expect to finish at or above the top end of our original 1% to 2% load growth range for 2021.

On slide 10, I'd like to discuss primary growth drivers for the next year beginning with the electric utilities segment, we see higher load in 2022 across our jurisdictions as the economic recovery progresses.

In Florida, we will see the impact of the first base rate increase in our multi year rate plan that was approved this year. We also expect growth from the storm protection protection plan rider and the final projects recovered under the solar base rate adjustment mechanism in.

The Carolinas, we expect to see growth through our grid improvement plan, allowing us to defer certain grid projects with a return between rate cases. Meanwhile, 2022 will be a key year to move through rule, making related to H b $9 51, and the carbon reduction plan setting the stage for 2023 and be.

Don.

In the Midwest will see the impact for Ohio distribution rate case, beginning in the summer and we will continue to invest in transmission and distribution upgrades that are recovered under our rider programs in both Indiana and Ohio.

We continue to make progress on our cost management efforts across our jurisdictions and expect lower year over year O&M in 2022.

Shifting to the gas segment, we will have a full year of benefit from the Piedmont, North Carolina, and Kentucky rate cases, we will also see growth from integrity management investments and customer additions.

Consistent with this historical practice, we will provide 20 to 2022 earnings guidance are detailed capital plan and our growth prospects for the future during our February financial update.

Before we open it up for questions. Let me close with Slide 11, we were having an outstanding 2021 as evidenced by another strong quarter.

And we have narrowed our 2021 adjusted earnings per share guidance range to the top half of our range.

Our attractive dividend yield coupled with our long term earnings growth profile of 5% to 7% provide a compelling risk adjusted return for our shareholders.

When discussed we have a long runway of capital investment opportunities as we advance our clean energy strategy over the next decade and beyond.

Duke energy is well positioned to leave as the pace of change in our industry accelerates delivering sustainable value to our customers and investors with that well open the line for your questions.

Thank you if you would like to ask a question simply press the star key followed by the digit one on your telephone keypad also peer using a speaker phone. Please make sure. Your mute function is turned off to allow your signal crews or equipment. Once again star one at this time and well first hear from sharp razor of.

At Guggenheim partners.

Hey, good morning, guys.

Hi, Shar good.

Good morning.

So just a couple of questions on on 951, and obviously, it's good. It's finally got done in a bipartisan way, obviously 'twenty two is going to be busy and you do have some good amount of wood to chop, though it's a really good framework remind us on next steps, especially as we're thinking about the rule.

Making securitization in the carbon reduction plan.

Sure sure. Thank you and we're pleased.

But the leaders of the state came together in a bipartisan way to to provide the framework that we're gonna be talking about.

And in many ways. It's the culmination of the process. We've discussed with you over the last several years as we've worked toward this clean energy transition.

The next step which is already underway is rulemaking around the performance based ratemaking and securitization.

The commission has outlined a process that should culminate in February for P. B R and in April for securitization.

And then we would also expect the commission to establish procedures around the shaping of the carbon reduction plan.

That is not yet out, but we would expect it to occur as you know the timeline for that is December of 2022.

So a lot of work will go on as this legislation transitions into the regulatory arena.

We will be involved of course stakeholders will be involved and on the carbon reduction plan South Carolina will be a very important stakeholders at the table every step of the way and so we'll be anxious to provide updates along the way as we reach those milestones, but feel like this is a very good <unk>.

<unk> to put us on a path to achieve not only our carbon reduction goals, but meaningful investments that'll drive returns over this decade and beyond.

Got it in England, Lastly, I want to tease that out a bit of your kind of prepared comments around the growth guide as we're thinking about sort of various drivers of the legislation and how it impacts your plan.

You, obviously have more regulated renewable opportunities you should theoretically have less lag.

You know more opportunities to increase and accelerate capex as the plan further cements right you, obviously have opportunities around could be ours and sharing mechanisms. So if you're solidly within your 5% to 7% growth rate without legislation, especially with an improving load backdrop as Steve clearly highlighted.

How can the legislation I guess not be accretive to your current guide from an EPS growth standpoint.

You know Shar I appreciate the question and I think we should broaden it really beyond the Carolinas to also note the progress that we expect to make in other jurisdictions. We are unimportant I R. P filing coming up in November.

End of this month in Indiana, which will set a pace for the transition so taking all of those things together, we do see increased capital.

As we open up 'twenty 'twenty six and establish a five year range. We believe that capital will go to $60 to 65.

As we look at the back half of the decade, we had shared 65 to 75, we think it's more likely to be in that top half 70 to 75.

And so we do believe we have the potential over time.

To earn at the top end of our 5% to 7% range to the top half of that 5% to 7% range.

And so you.

We have some work to do with rulemaking and you know beginning the execution, but we have a long runway of capital investment in this regulatory modernization will be helpful.

Not only to align investments with benefits to customers, but also to allow us to more effectively put capital to work and deliver returns.

Perfect I appreciate it. Thank you so much too soon.

Thank you.

And next we'll hear from Stephen Byrd of Morgan Stanley.

Hi, good morning.

Hi, Stephen good morning.

I wanted to just maybe build a little bit on the prior questions in terms of just federal legislation supporting.

Renewable energy in a number of ways.

And both I guess I'm thinking specifically in North Carolina, as well as Indiana, Indiana to your point you have a resource filing by the end of this month.

And then in North Carolina, though it does feel like you know the.

Through deliberation around the cadence of de Carbonization is going to flow well into 2022 and to the extent that this legislation does pass does New York says you know what extend support for solar and wind provides support for storage how might that impact kind of the thinking not just for you but for other stakeholders.

Both of those states.

Yeah.

No I I believe there's a lot of conversation going on Stephen in both Indiana.

In Florida, and the Carolinas around the clean energy transition.

And that has been building over the last several years and so you see increasing opportunities for renewable investment for storage investment energy efficiency.

Demand response investment will be a part of it you know in some of our states also a keen interest in getting a base amount of electric vehicle infrastructure in place.

And so I do believe that the momentum is picking up of course, all states are watching what's going on at the federal level.

And you.

You know the tax incentives in particular can be additive to our progress in the states and so I see a great deal of alignment between what we are trying to accomplish where our states are going in the discussions that are underway in Washington.

That's helpful and to the extent that we do see this level of support from federal legislation could that potentially lead to a kind of a further acceleration.

I wouldn't imagine anytime soon for your capital plan, but kind of later in the decade. Its obviously an impressive amount of capex that you have but could this essentially resulted in acceleration or you know I know, that's very tough to predict but how might that impact your longer term capital spend levels.

You know Stephen I, certainly think it can result in acceleration and that gets down to the target and the timeline, that's being established and I know a lot of debate will occur around those two items affordability is another factor that we need to keep into the equation and we have affordability reliability.

He kind of top of mind as we pursue these goals, but I do believe transition of the bulk power system, both generation and grid is underway with a lot of tailwind behind it.

And we are trying to proceed in a way that works for our states our customers the economy.

But along the way you know importantly, it will deliver meaningful investments for our investors and so I do see just a long runway of investment opportunity operating and.

And all of these states driven by both state and federal tailwind.

That's very clear I understood and then maybe just one other element of the legislation is the we're interested in is the minimum tax levels.

That are in our in the bill how might that impact both through your cash flow customer bill impacts credit statistics things like that.

To the extent that the utility sector doesn't get exempted from that particular provision, what's your sort of latest thinking around the impacts there.

Yeah.

Stephen we are 95% regulated we see the minimum tax is more of a timing issue for us.

You know there could be some cash flow impact.

But we would need to look at that within the complexion of all of the elements the tax incentives and other things. So we do not see a significant bill impact to customers as a result of the way the minimum taxes talked about right now, but as you know this is a dynamic time and we'll have to see how it ultimately progresses.

Steve would you add anything to that I would agree with that we would view it as a timing issue and then theres other provisions their extension of other credits direct pay of credits and inclusion of nuclear P.

P T sees that.

Particularly for Duke with our nuclear fleet.

It help mitigate any impacts of this to customers.

That's a good point there are other provisions of sort of pushing the other direction and provide provide a benefit understood. That's all I had thank you.

Thanks, Stephen Great.

Next we'll hear from Jonathan Arnold with vertical research.

Alright, good morning, guys.

One I just wanted to pick up on you just mentioned the nuclear PTC, Steve I'm curious, whether you guys have any sense, yet how you would derive defined the revenues.

That would sort of interact with the PTC calculation for your regulated.

Nukes.

You know Jonathan I'll take that you know this is a pretty dynamic area and where you got this morning coming through what came out of the house last night, a couple thousand pages.

We do believe it will apply to regulated nuclear.

We do believe that all apply for a six year period.

But we're anxious to learn more and studied us a bit more so you know at this stage of the game. We're talking more about we believe regulated nuclear is included but more to come on how all of these elements that together.

Okay.

And just staying with that.

With nuclear one.

The 951.

You could have a little extra time have you.

If you're if you're pursuing a small modular I guess nuclear project.

Offshore wind.

Could you just maybe talk a little bit about.

Wow.

There's some solutions.

But what you put forth and what the timeframe might be best guess at the moment.

Good.

Sure.

You know Jonathan if you think back to the.

Scenarios that we put forward and the 'twenty 'twenty I R. P.

There were a couple of scenarios that got to that 70% level. One included offshore wind. The other included advanced nuclear or a small modular reactor.

We do see a need over time to put in some of these next generation, although offshore wind very mature in Europe, not as much here in the U S. But these you know clean energy technologies.

And so I believe this will be an important discussion.

As the carbon reduction plan is developed and we will go into that.

Engaging with our regulators policymakers the communities are to come up with a thoughtful approach on how to incorporate these technologies.

And so I think more to come on that as this carbon reduction plan begins to take shape in 'twenty two.

Okay. Good enough. Thank you very much thank.

Thank you.

And next we'll hear from Julien Dumoulin Smith of Bank of America.

Hey, good morning team thanks for the time.

Appreciate it.

Hey, so perhaps just to just to come back to the 70% piece, obviously well done on getting the legislation done curious if you can be more spend can't think about.

Indeed, absolutely I know, it's been a long run. So we're finally here I mean to that point, though I mean, when you're thinking about the top half year. The 65 to 75, what are the specific moving pieces that you were thinking about that get you. There right. What are the debate points around the 70% I know you touched earlier about balance.

So you can bill headroom against that perhaps you know various other considerations, but if we can talk more tangibly about like different scenarios are different for you know combinations. If you will I was just trying to understand how you get to that upper end. If you will in terms of the incremental Roe.

Requirement.

Julian I think the best thing I could point you to at this point is back to the IR piece.

And if you look at the volume of solar and storage the level of coal retirements. The additional resources it would be added to maintain reliability.

Ah as you move towards 70% carbon reduction there are more megawatts.

And so that's what we are looking at and this will be important as we go through the carbon reduction planning process Commission of course, setting that procedural schedule there'll be a lot of opportunities for discussion stakeholder input South Carolina at the table.

But I would point you back to those higher piece, because I think that's probably the best place to really begin thinking about the magnitude of the transition.

Got it and then if I understand those are pizza nervous at least again I know that these things are in flux.

The two specific scenarios that got you there one included a pathway for offshore and the other one included us tomorrow.

Is it fair right now to think that your bias in favor of offshore given what we're seeing already across the space or you know is that some more really kind of one of the key pathways that youre thinking about.

I would say, it's too early to tell them, we will not unilaterally make a decision Julian on what technology.

Makes sense for our customers in the states in which we operate so we believe continued discussion and engagement.

The regulators policymakers communities will be important to this decision we are evaluating offshore wind.

Thank you may have noticed there was a proposed sale notice issued for a lease off the coast of North Carolina.

The Kitty Hawk lease area is also there.

I would just say, it's there's more to come here and as this carbon reduction plan begins to take shape. We will have an opportunity to further these stakeholder discussions to develop a plan that makes sense for our customers in the states in which we operate.

Got it.

I hear what you're saying and nothing more specific yet on the definitive timeline on ERP for Indiana in terms of our exit from coal et cetera, and I know that some of your peers already kind of made broad statements on that front, but we got to wait here. So.

Well Julien I would say, it's it's about three weeks away. So the filing is November 30th.

And as you know we have been working on reducing the useful life of coal we did so in connection with the rate cases that were finalized last year.

And we will continue to work on our coal retirements diversification, adding renewables. So you can expect to see more at the end of this month on Indiana and we're actively engaged in the stakeholder process. There as this work continues.

Alright, well best of luck with this one of those weeks and we'll see you soon thanks so much.

Sure.

Thank you and next we'll hear from Jeremy Tonet of J P. Morgan.

Hi, Good morning, it's Mike here and Ryan Gosling.

Ryan on for Jeremy sorry.

Okay Alright.

Just wondering if you hit on the the theme proposal that was approved at FERC I was wondering if you could kind of give a more color on opportunities that kind of come out of that in terms of your own renewables a distribution you know transmission type opportunities.

Yes.

You know Ryan I would think about seem as a very customer focused initiative and we've had a lot of work.

I'm done with outside parties to look at the potential and we believe annually customers would save in the range of $40 million to $50 million in the near term and up to 100 to 150 million over the longer term. So we see it as a way that provides greater visibility around the operation of the south eastern grid and gives us the opportunity.

To integrate more renewables.

So that's how I would think about it here in the near term and we think it represents a great opportunity to continue to mature the renewable investment here in the South East.

Understood and then I can just add.

Ask one on thinking I understand where you get the kind of the full kind of drivers in 2022 or on your own call, but thinking about some of the strong load trends you've seen this year and then also you youre kind of historic ability to have taken them out of the business. How are you kind of speak at this stage I'm, saying some of those different drivers into 2022 as you kind of mentioned it being maybe a bridge.

Here into kind of the the capital ramp between 'twenty three and beyond.

Well, Ryan I would say, we will be within our 5% to 7% growth rate every year over the five year period, Steve shared with you in his remarks, what we see those drivers being so the Florida multiyear rate plan. We've got of course load growth and I'm you know I'm, just referencing that slide a number of other <unk>.

Areas. So we'll give you more specifics on what it means in February but I feel like we've got a very solid plan for 2022, but I would I would add we certainly are seeing solid growth across our jurisdictions. That's always been part of our growth plan and it has improved.

Improved through Covid and more and we will continue to we believe certainly we've got a lot of good rate activity coming along as well when you look at our Midwest jurisdictions, Florida as well, we'll see strength there as we finish out the sober program and kick in the new three year plan.

Coupled with the organic growth in Florida. So there's a number of factors will have more details but across our footprint.

We've got a number of capabilities that we can pull in and cost control is one of them as it has been in the past and ROE.

Rate case activity Ryan I was just looking at the slide, Ohio Electric distribution Piedmont, North Carolina, South Carolina, Kentucky. So curious rate case activity also I would point to.

Got it that makes sense appreciate the color. Thank you.

Thank you.

And next we'll hear from Steve Fleishman.

Wolfe research.

Yeah.

Hi, Good morning, Lynn I see how are you great. Thank you I hope you're well.

So I have to ask since no one else did the.

There was a press report a week or two ago about.

There be maybe being a settlement soon with Elliott investments could you comment on that and if there's any status of that situation.

Yeah, Steve I'm, not going to comment on the press.

The press report, but what I will say is we remain in very constructive conversations with Elliot we are open to a constructive settlement and as I've said many times our decision process around this will center on terms that we believe are in the best interest of our shareholders and our company.

Constructive conversations continue.

Okay, Great and just.

Just in North Carolina the.

The.

You know in terms of actually filing another rate case to recover investment.

I guess the next one would be under.

Under this law.

With maybe performance basic when would that be and.

Is there any time lag issues before you are able to kind of get to that.

Yeah, you know Steve we are we are evaluating when the appropriate time is for a rate case as we always do you point to something that is certainly a consideration. This rulemaking process will continue into 2022 and evaluating the timing for a rate case that not only would contemplate that Roe.

Making but also reflect capital investment is work that's underway and as we have a better sense of that we will update you.

But you know some work to do I guess around this rulemaking that I referenced before.

Before we would file under that plan.

Okay. So is it not clear right now whether the next rate case would be.

With the.

New performance based or maybe you do a case first without that.

Well, that's an interesting question and depending on the timing of the rulemaking I think it would be good to try to.

Reflected that in the rate filing you know right now the commission is on target for rule, making for P. B R. By February that's an aggressive time frame I know, there's a lot of work to do.

But you know two to pick up P. B are within the rate case would certainly be an objective if the timing works out.

Got it great. Thank you.

Thank you.

Okay.

We've lost our operator.

Hey, Bill are you there I'm sorry, our final question is from Michael Lapides of Goldman Sachs.

Hey, guys.

Hi, Michael.

And thank you for taking my question, Hey, just curious.

When I think about H B 951, the language was pretty clear about on the coal retirements securitization being for just the subcritical units how should we think about what happens to the supercritical units the larger kind of a bigger component of the Duke Carolina's Duke progress fleet.

Over time.

And whether how you would deal if there were early retirement of those units.

I would think about traditional ratemaking on this Michael.

And some of the units will have dual fuel capabilities. So they will continue running on natural gas for a period of time.

So I would think about it that way.

Got it and then one follow on related to 951 I'm just curious I don't think the offshore wind components made it into the bill you've talked a little bit about offshore wind and asked them ours.

How do you know it is the concern and the reason it got left out of the bill more of one on cost or were there other concerns that were driving that.

I Wouldnt regarded as being left out of the Bill what I would regard it as that those decisions around clean technologies will be part of the carbon reduction plan and overseen by the commission.

Where they will also be evaluating affordability and reliability. So I think more to come on it Michael and what technologies will be necessary to hit these goals.

And what works for the states, which.

Allergies make the most sense for our you know policymakers and communities.

Got it thank you and much appreciate it alright at some.

Sure Jeff.

Thank you.

And then okay. There are no further questions at this time.

Alright April I'll take it from here I want to thank everyone for participating today I know, we have a chance to see many if not all of you.

Next week and he said, we look forward to continuing the conversation and IR of course as always available. If there are questions. Following this call. So thanks again for your investment index.

And that does conclude today's conference. Thank you all for your participation you may now disconnect.

[music].

Thank you April good morning, everyone and welcome to Duke Energy's third quarter 2021 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 in forward looking statements and those factors are outlined here and and disclosed and Duke Energy's SEC filings.

A reconciliation of non-GAAP financial measures can be found in today's materials and on Duke energy Dot com.

Please note the appendix for today's presentation includes supplemental information and additional disclosures so with that let's turn the call over to Lynn.

Jack Thank you and good morning, everyone. It's great to be with you for our third quarter 2021 earnings call.

Today, we announced strong results for the quarter with adjusted earnings per share of $1 88, driven by growth at our electric utilities were well positioned for a solid finish to the year and are narrowing our full year guidance range to $5 15 to $5 30, raising the midpoint to the upper half of our.

Range.

We're also reaffirming our long term EPS growth rate of 5% to 7% through 2025.

First off our original 2021 guidance range.

Turning to slide five we've been actively engaged with policymakers and stakeholders across the Carolinas for several years to chart a path toward cleaner energy.

Our 2020 I, our Pes filed in both states reflects our goal to pursue an orderly energy transition achieving our aggressive carbon reduction, while maintaining affordability and reliability. These.

These filings in ongoing conversations in both states have been informed by robust stakeholder engagement and feedback.

In October in North Carolina took an additional step.

So staying with consistent with their long standing history of proactively tackling complex energy issues. When state leaders came together to pass a landmark bipartisan law helps fill line 51.

It accelerates the clean energy transition.

I'll still line 51 provides a framework to achieve 70% carbon reduction by 23, while continuing to prioritize affordability and reliability for customers.

It also sets into law, our corporate goal of net zero carbon emissions by 2050.

The roadmap to achieve these goals will come in the form of a carbon reduction plan.

It will be approved by the North Carolina Utilities Commission by the end of 2022.

We anticipate the active involvement of South Carolina, and this process as they have been over the decades and developing and retiring assets that serve both states.

<unk> will also be informed by stakeholders a continuation of the conversations that have been ongoing over the last several years.

Consistent with the vertically integrated utility model helps fill 951 calls for utilities to a new generation or other resources selected by the commission would.

With the exception of solar generation, which contemplates, 55% utility ownership and the remaining procured through ppas.

Throughout our history, we have offered rate protections for low income customers in house Bill 951 takes further steps to prioritize affordability.

The legislation calls for securitization of 50% of subcritical coal plants. Upon your early retirement, which will lower customer rates.

Additionally, we've initiated a low income collaborative to propose new low income programs to further help our customers.

As we look ahead, our pace of change will accelerate as we work toward our carbon reduction goals and the broader clean energy transformation across all of our jurisdictions.

With this in mind, we expect our enterprise capital plan for the next five years through 2026 to increase to the $60 $65 billion range.

And then moving into the back half of the decade, we estimate to be in the top half.

Of our $65 billion to $75 billion range.

And we will provide more details on our updated capital and financing plans on our fourth quarter call in February.

Turning to slide six it's been one year since we hosted our first ESG Investor day, where.

When we laid out several targets in our path to net zero carbon and methane emissions.

We're making meaningful progress across these goals, while also advancing social responsibility and corporate governance work.

We exceeded 40% carbon reduction across the enterprise in 2020, and we continue to accelerate coal retirements and adds significant amounts of renewables to our system.

Our path to net zero is underpinned by strong governance collaboration with stakeholders in our culture rooted in diversity equity and inclusion.

Our long term investment strategy also provides societal benefits as demonstrated by our commitment to environmental Justice.

And as a testament to our strong culture of governance and accountability and we were recognized by Labradors 2021 Transparency awards as.

It's the number one utility for overall transparency.

Well, there's more to do and we're proud of our progress and are poised for more in the years ahead.

We look forward to holding another ESG day with you in 2022 to dive deeper into our commitments and our accomplishments.

Turning to slide seven we continue to work with stakeholders that federal state and local levels to make this clean energy vision possible, while maintaining reliability and affordability for customers.

In South Carolina, we filed a modified IOP at the end of August incorporating feedback from the public service Commission and demonstrating further progress toward cleaner energy.

The plan includes a balanced resource snacks, expanding renewable generation storage retiring coal and achieving significant carbon reductions.

As we prepare to submit our Indiana ERP later this month, we gathered input from business customers consumer advocates environmental groups on transitioning to cleaner generation, while keeping a sharp focus on reliability and affordability.

The ERP will continue to advance efforts to shift away from coal and we remain engaged with stakeholders and policymakers to find the best path forward for the state.

Finally, we are engaging with Congress and the administration on a wide range of issues, including infrastructure tax and climate policy we.

From a regulatory point of view, we are pleased that FERC has accepted the application filed by Duke and the other members of the southeast energy exchange market noticed scene.

This allows the members to proceed with the development of the trading platform.

Same as a low cost low risk way to provide immediate customer benefits through a share and market structure, while advancing more renewables throughout the south east.

In closing the fundamentals of our business are strong and we're meeting our financial and strategic objectives, while continuing to focus on operational excellence.

We operate in constructive jurisdictions that continue to drive new customers that are at growth rates above national averages are.

Our climate goals are driving our investment strategy and long term planning and we continued to make progress on all fronts.

We have a clear line of sight to achieving our 2030 goals.

Over this decade, we were able to deploy one of the largest capital investment plans in the country focused on building clean energy infrastructure.

Investments that will benefit the environment, our customers and communities and our investors.

With this positive momentum we are highly confident in our 5% to 7% EPS growth range and see the potential over time to earn in the top half of this range.

With that let me turn it over to Steve.

Thanks, Lynn and good morning, everyone I'll start with a brief discussion of our quarterly results highlighting a few of the key variances to the prior year for more detailed information on variance drivers and a reconciliation of reported to adjusted results. Please refer to the supporting materials that accompany today's press release and presentation.

As shown on slide eight our third quarter reported earnings per share was $1 79, and our adjusted earnings per share was $1 88. The difference between third quarter reported and adjusted earnings per share is primarily due to a charge related to the 2018, South Carolina rate cases, partially offset by proceeds from our settled.

With insurers on coal Ash basin closure costs.

The adjusted earnings per share results in the quarter continued to be strong led by electric utilities and infrastructure, which was up 10 cents compared to the prior year Roe.

Also were driven by favorable volumes benefits from base rate increases in riders, partially offsetting these items were higher O&M cost when compared to 2020 levels due to COVID-19 mitigation efforts in the prior year.

Shifting to gas utilities and infrastructure results were flat to last year.

And our commercial renewables segment results were up two cents for the quarter driven by investments in the Marine me, a wind and Pfluger Bill solar projects. Other was unfavorable three cents for the quarter principally due to higher income tax expense recall in 2020 that we executed tax optimization levers as part of our Covid.

Litigation strategy.

Finally segment results are impacted by eight per share of diluted dilution related to the $2 5 billion dollar equity issuance that closed in December 2020.

Range.

Turning to slide nine we were pleased to see our electric volumes continued to bounce back as the economic recovery progresses results for the third quarter were up approximately 3.4% year over year and for the second consecutive quarter results are near or above pre pandemic levels with the third quarter of <unk>.

One 3% versus 2019.

Looking more closely at the customer classes residential volumes were down 2% for the quarter as people began to return to the workplace. We continued to see strong customer growth of one 7% year to date when comparing this quarters residential volumes to that of 2019, we see that volumes have really.

And almost 4% highlighting the continued strength of the residential class.

The robust labor market recovery in our service territories is driving the improvement in the commercial and industrial classes commercial volumes were up five 3% and industrial was up seven 2%.

And our four largest states representing nearly 90% of our overall electric volumes job recovery is outpacing the national average. This is a testament to the attractive jurisdictions in which we operate.

We continue to monitor the impact that our largest customers may experience due to supply chain disruptions and today, we have seen only minor impacts in certain sectors, such as suppliers of the automotive industry.

We serve a diverse customer base spanning a variety of industries mitigating sector specific impacts.

As we progress towards the end of the year. We are encouraged by the sales trends, we have seen bolstered by strong customer growth across our service territories, which support load growth over the long term.

With a rolling 12 month retail load growing at two 1%, we expect to finish at or above the top end of our original 1% to 2% load growth range for 2021.

On slide 10, I'd like to discuss the primary growth drivers for the next year beginning with the electric utilities segment, we see higher load in 2022 across our jurisdictions as the economic recovery progresses in Florida, We will see the impact of the first base rate increase in our multi year rate plan that was approved.

This year, we also expect growth from the storm protection Protection plan rider and the final projects recovered under the solar base rate adjustment mechanism in.

In the Carolinas, we expect to see growth through our grid improvement plan, allowing us to defer a certain grid projects with a return between rate cases. Meanwhile, 2022 will be a key year to move through a rule, making related to H B 951, and the carbon reduction plan setting the stage for 2023.

We are in the Midwest will see the impact for Ohio distribution rate case, beginning in the summer and we will continue to invest in transmission and distribution upgrades that are recovered under our rider programs in both Indiana and Ohio.

We continue to make progress on our cost management efforts across our jurisdictions and expect lower year over year O&M in 2022.

Shifting to the gas segment, we will have a full year of benefit from the Piedmont, North Carolina, and Kentucky rate cases, we.

We will also see growth from integrity management investments and customer additions.

Consistent with this.

Historical practice, we will provide 20 to 2022 earnings guidance are detailed capital plan and our growth prospects for the future during our February financial updates.

Before we open it up for questions. Let me close with slide 11 were having an outstanding 2021 as evidenced by another strong quarter.

And we have narrowed our 2021 adjusted earnings per share guidance range to the top half of our range.

Our attractive dividend yield coupled with our long term earnings growth profile of 5% to 7% provide a compelling risk adjusted return for our shareholders as.

As Glenn discussed we have a long runway of capital investment opportunities as we advance our clean energy strategy over the next decade and beyond.

Energy is well positioned to leave as the pace of change in our industry accelerates delivering sustainable value to our customers and investors with that we'll open the line for your questions.

Yes.

Thank you if you would like to ask a question simply press the star key followed by the digit one on your telephone keypad also if youre using a speakerphone. Please make sure. Your mute function is turned off to allow your signal crews or equipment. Once again star one at this time and well first hear from Shar <unk> of Guggenheim partners.

Hey, good morning, guys.

Hi, good.

Good morning.

So just a couple of questions on 951, its obviously its good it finally got done in a bipartisan way obviously.

Obviously 'twenty two is going to be busy and you do have some good amount of wood to chop a though it's really good framework remind us on next steps, especially as we're thinking about the rulemaking securitization in the carbon reduction plan.

Sure sure. Thank you and you know we're pleased that the leaders of the state came together in this bipartisan way just to provide the framework that we're gonna be talking about.

And in many ways. It's the culmination of the process. We've discussed with you over the last several years as we work toward this clean energy transition.

The next step which is already underway is rulemaking around the performance based ratemaking and securitization.

The commission has outlined a process that should culminate in February for P. B R and in April for securitization.

And then we would also expect the commission to establish procedures around the shaping of the carbon reduction plan that.

That is not yet out, but we would expect it to occur as you know the timeline for that is December of 2022.

So a lot of work will go on as this legislation transitions into the regulatory arena.

He will be involved of course stakeholders will be involved and on the carbon reduction plan South Carolina will be a very important stakeholders at the table every step of the way and so we'll be anxious to provide updates along the way as we reach those milestones, but feel like this is a very good progress.

<unk> to put us on a path to achieve not only our carbon reduction goals, but meaningful investments that'll drive returns over this decade and beyond.

You, obviously have more regulated renewable opportunities you should theoretically have less lag.

And you know more opportunities to increase and accelerate capex as the plan further cements right you, obviously have opportunities around be ours and sharing mechanisms. So if you're you know solidly within your 5% to 7% growth rate without legislation.

Especially with an improving load backdrop as Steve clearly highlighted.

How can the legislation I guess not be accretive to your current guide from an EPS growth standpoint.

You know Shar I appreciate the question and I think we should broaden it really beyond the Carolinas to also know that the progress that we expect to make in other jurisdictions. We are an important I or P filing coming up in November.

End of this month in Indiana, which will set a pace for the transition so taking all of those things together, we do see increased capital.

And as we open up 'twenty 'twenty six and establish a five year range. We believe that capital will go to 60 to 65.

As we look at the back half of the decade, we had shared 65 to 75, we think it's more likely to be in that top half 70 to 75.

And so we do believe we have the potential over time.

To earn at the top end of our 5% to 7% range the top half of that 5% to 7% range.

And so you.

We have some work to do with rulemaking and you know be getting the execution, but we have a long runway of capital investment in this regulatory modernization will be helpful.

Not only to align investments with benefits to customers, but also to allow us to more effectively put capital to work and deliver returns.

Perfect I appreciate it. Thank you so much wanted too soon.

Thank you.

And next we'll hear from Stephen Byrd of Morgan Stanley.

Hi, good morning.

Hi, Stephen good morning.

I wanted to just maybe build a little bit on the prior questions in terms of just federal legislation supporting.

Renewable energy in a number of ways.

And both I guess I'm thinking specifically in North Carolina, as well as Indiana, Indiana to your point you have a resource filing by the end of this month.

And then in North Carolina, though it does feel like you know the.

Both of those states.

Yeah.

Yeah, I I believe there's a lot of conversation going on Stephen in both Indiana.

In Florida, and the Carolinas around the clean energy transition.

And that has been building over the last several years and so you see increasing opportunities for renewable investment for storage investment energy efficiency.

In response investment will be a part of it you know in some of our states also a keen interest in getting a base amount of electric vehicle infrastructure in place.

And so I do believe that the momentum is picking up of course, all states are watching what's going on at the federal level.

And.

That's helpful and to the extent that we do see this level of support from federal legislation could that potentially lead to a kind of a further acceleration.

I wouldn't imagine anytime soon for your capital plan, but kind of later in the decade up its obviously an impressive amount of capex that you have but could this essentially resulted in acceleration or you know I know, that's very tough to predict but how might that impact your longer term capital spend levels.

You know Stephen I, certainly think it can result in acceleration.

And that gets down to the target and the timeline, that's being established and I know a lot of debate will occur around those two items affordability is another factor that we need to keep into the equation and we have affordability reliability kind of top of mind as we pursue these goals, but I do believe transition.

Of the bulk power system, both generation and grid is underway with a lot of tailwind behind it and.

And we are trying to proceed in a way that works for our states our customers the economy.

But along the way and importantly, it will deliver meaningful investments for our investors and so I do see just a long runway of investment opportunity operating and.

And all of these states driven by both state and federal a tailwind.

That's very clear I understood and then maybe just one other element of the legislation is the AR that were interested in is the minimum tax levels.

That are in our in the bill how might that impact both through your cash flow customer bill impacts credit statistics things like that.

To the extent that the utility sector doesn't get exempted from that particular provision, what's your sort of latest thinking around the impacts there.

Yeah.

Stephen we are 95% regulated we see the minimum tax is more of a timing issue for us.

You know there could be some cash flow impact.

P T sees that.

Particularly for Duke with our nuclear fleet.

To help mitigate any impacts of this to customers.

That's a good point there are other provisions of sort of pushing the other direction and provide provide a benefit understood. That's all I had thank you.

Great. Thanks, Steven.

Next we'll hear from Jonathan Arnold with vertical research.

Alright, good morning, guys.

One I just wanted to pick up on you just mentioned the nuclear PTC, Steve I'm curious, whether you guys have any sense, yet how you would derive defined the revenues there.

Good.

We interact with the PTC calculation for your regulated.

Nukes.

You know Jonathan I'll take that you know this is a pretty dynamic area and where you got this morning coming through what came out of the house last night, a couple thousand pages, we do believe it will apply to regulated nuclear.

We do believe that all apply for a six year period, but we're anxious to learn more and studied us a bit more so you know at this stage of the game. We're talking more about we believe regulated nuclear is included but more to come on how all of these elements that together.

Okay.

And just sort of staying with that.

With nuclear one.

I don't want of H B 951.

You could have a little extra time have you.

If you're if you're pursuing a small modular I guess nuclear project.

Offshore wind.

Could you just maybe talk a little bit about.

Wow.

There's some solutions will be positive.

What you put forth.

Time frame it might be best guess at the moment.

On both.

Sure.

You know Jonathan if you think back to the.

The scenarios that we put forward and the 2020 I R. P.

There were a couple of scenarios that got to that 70% level. One included offshore wind. The other included advanced nuclear or a small modular reactor.

We do see a need over time to put in some of these next generation, although offshore wind very mature in Europe, not as much here in the U S. But these you know.

Clean energy technologies.

And so I believe this will be an important discussion.

As the carbon reduction plan is developed and we will go into that.

Engaging with our regulators policymakers and the communities to come up with a thoughtful approach on how to incorporate these technologies.

And so I think more to come on that is this carbon reduction plan begins to take shape in 'twenty two.

Okay. Good enough. Thank you very much thank.

Thank you.

And next we'll hear from Julien Dumoulin Smith of Bank of America.

Hey, good morning, Thanks for the time appreciate it.

Hey, Julien.

Hey, so perhaps just to just to come back to the 70% piece, obviously well done on getting the legislation done curious if you can be more spank. He I think about the and indeed, absolutely I know it's been a long ride. So we're finally here I mean to that point, though I mean, when you're thinking about the top half year, the 65 to 75.

Five what are the specific moving pieces that you're thinking about that get you. There right. What are the debate points around the 70% I know you touched earlier about balancing bill headroom against that perhaps you know various other considerations, but if we can talk more tangibly about like different scenarios are different for you now.

Combinations. If you will just trying to understand how you get to that upper end. If you will in terms of the incremental.

Requirement.

Julian I think the best thing I could point you to at this point is back to the IR piece.

And if you look at the volume of solar and storage the level of coal retirements. The additional resources that would be added to maintain reliability.

Ah as you move towards 70% carbon reduction there are more megawatts.

But I would point you back to those higher piece, because I think that's probably the best place to really begin thinking about the magnitude of the transition.

Yeah.

Got it and if I understand those IOP scenarios at least again I know that these things are in flux.

The two specific scenarios that got you there one included a pathway for offshore and the other one included after tomorrow is it fair right now to think that your bias in favor of offshore given what we're seeing already across the space or you know is that some of our really kind of one of the key pathways that youre thinking about.

I would say, it's too early to tell them, we will not unilaterally make a decision Julian on what technology.

It makes sense for our customers in the states in which we operate so we believe continued discussion and engagement.

What the regulators policymakers communities are will be important to this decision. We are evaluating offshore wind I think you may have noticed there was a proposed sale notice issued for a lease off the coast of North Carolina the.

The Kitty Hawk lease area is also there. So I would just say, it's there's more to come here and as this carbon reduction plan begins to take shape. We will have an opportunity to further these stakeholder discussions to develop the play and that makes sense for our customers in the states in which we operate.

Got it.

I hear what you say and nothing more specific yet on a definitive timeline on ERP for Indiana in terms of our exit from coal et cetera, and I know that some of your peers have already kind of made broad statements on that front, but that's the way we got to wait here. So.

Well and Julian I would say, it's it's about three weeks away. So the filing is November 30th.

And as you know we have been working on.

Reducing the useful life of call. We did so in connection with the rate cases that were finalized last year.

And we will continue to work on coal retirements diversification, adding renewables. So you can expect to see more at the end of this month on Indiana and we're actively engaged in the stakeholder process. There as this work continues.

Alright, well best of luck with this final weeks and we'll see you soon thanks so much.

Sure.

Thank you and next we'll hear from Jeremy Tonet of J P. Morgan.

Hi, Good morning, it's Brian I think Ryan on for Jeremy Sorry, [laughter], Okay Alright.

Just wondering if you hit on the are the same proposal.

<unk> approved at FERC I was wondering if you can kind of give a more color on opportunities that kind of come out of that in terms of your renewables a distribution your transmission type opportunities.

You know Ryan I would think about the same as a very customer focused initiative.

Initiative, and we've had a lot of work.

<unk> done with outside parties to look at the potential and we believe annually customers would save in the range of $40 million to $50 million in the near term and up to 100 to 150 million over the longer term.

So we see it as a way that provides greater visibility around the operation of the south eastern grid and gives us the opportunity to integrate more renewables.

So that's how I would think about it here in the near term and we think it represents a great opportunity to continue to mature the renewable investment here in the South East.

Understood and then I would just add.

Ask one on thinking I understand where you have to kind of a full kind of drivers from 2022 on year end call, but thinking about some of the strong load trends you've seen this year and then also you've kind of historic ability to have taken them out of the business. How are you kind of speak at this stage on some of those different drivers into 2022 as you kind of mentioned it being maybe a bridge.

Year into kind of the capital ramp at 'twenty three and beyond.

Well, Ryan I would say, we will be within our 5% to 7% growth rate every year over the five year period, Steve shared with you in his remarks, what we see those drivers being so you know the Florida multi year rate plan. We've got of course, one of the growth and I'm you know I'm, just referencing that slide a number of other <unk>.

Areas. So we will give you more specifics on what it means in February so I feel like we've got a very solid plan for 2022, but I would add we certainly are seeing solid growth across our jurisdictions. That's always been part of our growth plan and it has improved.

Improved through Covid and we'll continue to we believe certainly we've got a lot of good rate activity coming along as well when you look at our Midwest.

Midwest jurisdictions, Florida, as well, we'll see strength there as we finish out the sober program and kick in the new three year plan, coupled with the organic growth in Florida. So there's a number of factors will have more details but across our footprint.

We've got a number of capabilities that we can pull in and cost control is one of them as it has been in the past.

And our rate case activity Ryan I was just looking at the slide, Ohio Electric distribution Piedmont, North Carolina, South Carolina, Kentucky. So furious rate case activity also I would point to.

Got it that makes sense appreciate the color. Thank you.

Do you.

And next we'll hear from Steve Fleishman of Wolfe Research.

Yeah.

Hi, Good morning, Lynn I see how are you.

Great. Thank you hope you're well.

So I have to ask since no one else did the.

There was a press report a week or two ago about.

There be maybe being a settlement soon with Elliott investments could you comment on that and if theres any status of that situation.

Yeah, Steve I'm, not going to comment on the press.

The press report, but what I will say is we remain in very constructive conversations with Elliot we are open to a constructive settlement and as I've said many times our.

Our decision process around this will center on terms that we believer in the best interest of our shareholders and our company.

But constructive conversations continue.

Okay, great and.

Just in North Carolina the.

The.

You know in terms of actually filing another rate case to recover investment.

I guess the next one would be under.

Under this law.

With maybe performance base like when would that be an.

Is there any time lag issues before you are able to kind of get to that.

Making but also reflects capital investment is work that's underway and as we have a better sense of that we will update you.

But you know some work to do I guess around this rulemaking that I referenced before.

Before we would file under that plan.

Okay. So is it not clear right now whether the next rate case would be.

With the.

New performance based or maybe you do a case first without that.

Bruce that's an interesting question and depending on the timing of the rulemaking I think it would be good to try to.

Reflected that in the rate filing you know right now the commission is on target for a rulemaking for P. B R. By February that's an aggressive time frame I know, there's a lot of work to do.

But <unk> to pick up PBR within the rate case would certainly be an objective if the timing works out.

Got it great. Thank you.

Thank you.

Yeah.

Yes.

Okay.

We've lost our operator.

People are you there I'm sorry, our final question is from Michael Lapides of Goldman Sachs.

Hey, guys.

Michael and thank you for taking my question, Hey, just curious.

When I think about 8951, the language was pretty clear about on the coal retirements securitization being for just the subcritical units how should we think about what happens to the supercritical units the larger kind of a bigger component of the Duke Carolina's Duke progress fleet.

Over time.

And whether how you would deal if there were early retirement so those units.

I would think about traditional ratemaking on this Michael.

And some of the units will have dual fuel capabilities. So they will continue running on natural gas for a period of time.

So I would think about it that way.

Got it and then one follow on related to 951 I'm just curious I don't think the offshore wind components made it into the bill you've talked a little bit about offshore wind and asked them ours.

How do you know it is the concern and the reason it got left out of the bill more of one on cost or were there other concerns that were driving that.

I wouldn't regard it as being left out of the Bill what I would regard it as that those decisions around clean technologies will be part of the carbon reduction plan and overseen by the commission.

Where they will also be evaluating affordability and reliability. So I think more to come on it Michael and what technologies will be necessary to hit these goals.

And what works for the states, which technologies make the most sense for our policymakers and communities.

Got it thank you and much appreciate it alright.

Sure Jeff.

Thank you.

And then okay. There are no further questions at this time.

Alright April I'll take it from here I want to thank everyone for participating today I know, we have a chance to see many if not all of you.

Next week and he said, we look forward to continuing the conversation and I are of course as always available. If there are questions. Following this call. So thanks again for your investment index.

And that does conclude today's conference. Thank you all for your participation you may now disconnect.

Q3 2021 Duke Energy Corp Earnings Call

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