Q4 2022 Duke Energy Corp Earnings Call
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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 one. 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 security 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 for share of $5.27.
Closing out a successful 2022.
We achieve results followedly with an 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
The result today will reaffirming our 2023 guidance range of 555-575 with a midpoint of 277-565. 257-565.
We're also reaffirming our 5 to 7 percent 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 sense that we will be able to
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 and an integrated developmenteed to the
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 2000 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 Carolina's 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 P&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 refund.
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.
Let's see 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 RFP 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 grade case settlement in December , which supports the recovery of grid investments to improve reliability and service for our customers. In December , we also filed in the electric grade case in Kentucky.
The request reflects more than 300 million investments we've made destroying from 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 , JD Power ranked P-month number one in residential customer satisfaction for natural gas service in the Southeast.
This is the first time Pete on has received the 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 students, 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 .
Thanks Lynn and good morning everyone.
Turning to slide 7, 2022, mark your solid growth for our utility.
We achieved full year adjusted earnings per share of $5.27, above the midpoint of our updated guidance range.
These adjusted results exclude our commercial renewables business.
which was moved to discontinued operations in the fourth quarter.
The classification of these assets has helped for sale, target evaluation adjustment of 1.3 billion.
which is reflected in discontinued operations.
reflected in discontinued operations and GAP reported results.
This adjustment relates to the combined utility scale and distributed generation businesses.
and what's within our planning range for the sales processes.
Moving to our adjusted results for the year, in the electric segment, earnings per share increased by 36 cents in 2022.
primarily due to higher volumes.
favorable weather and rate increases in North Carolina and Florida.
Parts the offsetting these.
or higher interest expense and storm costs.
Absent storms, O&M was flat to prior year, which was in line with our guidance.
In the gas segment, earnings per share increased 7 cents, and was primarily due to the Piedmonton or Carolina rate case and riders.
In the other segment, unfavorable returns on investments and higher interest expenses.
Drove results lower, about 15 cents.
turning to slide 8.
We are reaffirming our 555 to 5575 guidance range for 2023 with the midpoint of $5.65.
Within electric, we expect retail volume growth in 2023 of roughly half a percent.
We also entered the year with updated rates for Ohio and Florida already in effect.
and we'll see growth from three Carolinas rate cases as we move through the year.
Additionally, we will continue to see growth from the grid investment riders in the Midwest and Florida, namely the Indiana TDIS and Florida SPP plans approved in 2022.
Moving to cost mitigation, we've identified 300 million of savings in 2020.
which is primarily related to rationalizing our corporate and business support cost structures.
Examples include streamlining IT support and reducing our real estate footprint.
These cost reductions will be realized ratably over 2023, with approximately 75% of the savings being sustainable into future years.
Parts without setting these favorable drivers are higher financing costs as well as depreciation and property taxes on a growing asset base.
Within our gas segment, growth drivers include the Ohio rate case currently underway.
cost mitigation efforts and customer growth, partially offset by higher interest expense.
Finally, we expect the other segment to be unfavorable due to higher interest expense.
Turning to retail electric volumes on slide nine.
In 2022, we saw load growth of 2.5%.
These strong results were driven by residential customer growth of 1.8%.
Higher usage per customer from Hybrid and Remote Work.
and a continuation of the post-COVID rebound in the commercial class.
Our total retail load in 2022 was about 2% higher than 2019 pre-pandemic levels.
This is equivalent to an average annual growth rate of around the half a percent when it's moving out the year to year fluctuations.
In 2023, total retail load growth is projected to be roughly a half percent.
Based on 2022 U.S. Census Bureau data, three states within a regulated footprint were in the top six for net population migration.
This illustrates the robust customer growth experience in our territories, which we expect to continue in 2023.
We expect load growth in the commercial class to moderate this year following two years of significant growth.
But see upside in industrial as easing supply chain constraints fuel a continued rebound for certain large manufacturers.
Longer term, we expect annual load growth to be about a half a percent.
through 2027.
Turning to slide 10, I'd like to provide an overview of our five-year capital plan.
which has increased to 65 billion.
When compared to prior periods, the capital plan has steadily increased as we move further into the clean energy transition.
This increases net of removing almost 3 billion of commercial renewables capital, including the previous, prior plan.
This means that we've increased a regulated plan by approximately 5 billion, resulting in a 7.1% earnings base cager through 2027.
While the investment needs of our utilities continue to accelerate.
While the investment needs of our utilities continue to accelerate, customer affordability remains front and center.
Affordability has consistently been a pillar that governs our planning, and we have several tools to help keep rates low and assist customers who are struggling to pay their bill.
First, the benefits of our cost mitigation efforts go back to customers over time, easing bill impacts as we recover capital investments.
As I mentioned, we expect 75% of our 2023 cost mitigation efforts to be sustainable.
Additionally, we are targeting flat O&M from 2024 through 2027.
Our long-term O&M trajectory is supported by smart capital investments within our plan.
including modern-out equipment and technology investments that will help reduce fuel and operating costs.
Next, the Inflation Reduction Act provides substantial benefits for carbon-free resources, including nuclear and solar PTCs and other renewable tax credits.
We are beginning to incorporate these benefits in updated resources plans and rate adjustments.
Over the next decade, we will fully leverage IRA benefits across all of our jurisdictions in order to maintain low cost for customers as we execute our clean energy transition.
Finally, assisting vulnerable customers has always been an area of focus.
But since the pandemic, we've worked even more closely with our communities and customers in need.
For example, in 2021, we created a specialized team that partnered with agencies across our service territories and helped connect customers to nearly $300 million in energy assistance funding over the two years.
Moving to Friday 11.
Our ability to execute our robust capital program is underpinned by healthy balance sheet.
and we remain committed to our current credit ratings.
In December 2022, we received 1 billion in cash proceeds upon the closing of the second tranche of the Indiana Minority Spake sale.
We expect to receive proceeds from the commercial renewables transactions later this year, which will be used for data avoidance at the holding company.
Turning to FFO to DEAD, we end 2022 below our 14%.
target.
largely due to deferred fuel balances.
We have started recovering these amounts through established recovery mechanisms.
and will continue to file using mechanisms in place for the remaining balances.
As we recovered the third fuel cost over the next one to two years, we expect FFO to debt to steadily improve and return to our long-term 14% target, demonstrating our commitment to our current credit ratings.
As we look ahead, about 90% of the electric investments in our capital plan are eligible for modern recovery mechanisms.
which is critical to maintaining a strong balance sheet, mitigating regulatory lag.
strong balance sheet, mitigating regulatory lag, and smoothing rate impacts.
With the steps we've taken to reposition our business and improve our cash flow profile in the years ahead, we are not planning to issue equity through 2027.
Moving to slide 12.
Our World Best Capital Plan, Strong Customer Growth and Constructive Jurisdictions provide a compelling growth story.
and our commitment to the dividend remains unchanged.
We understand its importance to our shareholders, and 2023 marks the 97th consecutive year of paying a quarterly cash dividend.
We intend to keep growing the dividend, balancing our targeted 65 to 75% payout ratio.
with the need to fund our capital. As we began 2023, we are well positioned to tackle the challenges ahead and look forward to updating you on our progress throughout the year.
With that, we'll open the line for your questions.
We will now begin the Q&A session. If you would like to ask a question, please press star followed by one on your Touch Don't Keep Add.
If for any reason you would like to remove that question, please press star followed by two. Again to ask a question, press star one.
As a reminder, if you are using a speakerphone, please remember to pick up your handset before asking a question.
We will pause here briefly to allow questions to generate in queue.
The first question is from the line of Shahar Perez with Guggenheim Partners. You may proceed.
Take good morning guys.
Hi, Sean. Good morning. Good morning.
Good morning. Good morning So Lynn just starting on the commercial renewables. It's good to see obviously you guys reiterated 23 Obviously the range assumed mid-year cash in the door just to remind us on the EPS sensitivity Per quarter from the delay and I guess where does this put you with it?
And what I see now is being kind of a modest delay from mid-year to later in the year, I don't see an impact.
I think it's important to recognize that the growth is primarily driven by our regulated outcomes and the cost mitigation that's offsetting some of the external headwinds and those are on track as we expected and shared with you third quarter. So confident the 565. Got it. And then just to follow up on, I know obviously the one point. So
I guess how do we take that charge relative to the ultimate sale price?
You are sure I appreciate the question. I also appreciate how closely you all read the slides.
We weren't attending the signal anything with the word robust. We feel good about the process. There's strong interest in the portfolio and we're moving forward. I think the thing to recognize on an impairment charge is it's an accounting adjustment.
It's really driven by the earnings profile of renewables where a lot of the profits that's in the early part of the life you've been depreciated over a longer period of time. So when you make a decision to exit before the end of the useful life, you've kind of set yourself up for an impairment.
So I would look at it that way. The takeaway is the strategic decision around exit remains unchanged, and we're on track for proceeds later this year.
Got it. Perfect. And then just one click one for Brian if it's okay on the credit side. You know, obviously Brian , the prior plan had a 14% FFO to debt over five years. And now you guys kind of stayed, you know, quote unquote over the long term. You know, 23 target is 13 to 14%.
from obviously the deferred fuel balances and 13% as a downgrade threshold. I guess can you just talk on how the rating agencies are treating these deferred fuel balances and how you're thinking about future balances? I mean could another event trigger a downgrade as we're thinking about the balance sheet capacity? Thank you.
I will definitely hit that shard and thanks for the question. We're working through the deferred fuel balances through the regulatory mechanisms in place and that's what the agencies are looking for.
looking to see are you filing in line with the regulatory recovery that is established or are you making exceptions and spreading that recovery longer? We've had really good success so far in North Carolina and South Carolina and we have a couple more filings in front of us both in Florida and in Duke.
these plans in accordance with the tools in place.
And sure the only thing I would add to that is...
We look at this and the agencies look at this as a temporary issue because you can associate it completely with the deferred fuel. And the fact that we have been able to work constructively through recovery mechanisms and we can actually forecast how that balance is going to decline over 23 and to 24 and gives us a lot of confidence.
on the metrics. And of course, as you would expect, we're in conversations with the writing agencies every step of the way. This regulated portfolio that we have with the cash flows and constructive jurisdictions is really what underpins the credit ratings of the company and nothing has changed around that risk profile.
Terrific. Thank you guys very comprehensive. Appreciate it. See you soon. Thank you. Thank you, Sherry. Thank you. The next question is from the line of Julian D'Amulance Smith with Bank of America. You may proceed.
Hey, good morning team. Thank you for the time. Pleasure to chat. Hi, Helen. Hey, Helen. Thank you. So just with respect to the carbon plan here and obviously the developments late in the year you guys...
You addressed it in part in the comments, but I'm just sort of curious as you think about addressing some of the follow-up items here through the course of this year. Again, what is the flex in the capital plan? What exactly are you assuming today in some of the updates in the multi-year outlook and specifically as we've talked about before…
How could the subsequent updates here impact probably more of the 24 outlook as you think about puts and takes in the CAPEX budget? What could come out of this next area?
Sure, and thanks Julian for that. I regard the carbon plan order as a very constructive one that has given us real clarity on the near term investment. So when you think about 3100 megawatts of solar, 1600 megawatts of battery storage, that capital plan is pretty well locked in for the Carolinas. We may see some.
you know, marginal changes, but I would think about those as later in the five-year period and really in connection with the next update. So feel really good about the Carolinas. Florida is also on track with the 10-year site plan and SPP and grid modernization.
I think where we have potential and even potential upside is an Indiana where we are earlier in the clean energy transition moving through that process. We have estimates in the capital plan, but we'll be filing for CPCN later this year and have more advanced dialogue about timing and approach.
So I'm very comfortable with the capital plan. And if anything, see a bit of upside. In Indiana, as we continue our clean energy transition.
Got it. Actually, since you mentioned it, just to probe a little bit, you said a moment ago, you assume a sort of baseline in Indiana already in the latest plan, but as I heard you say a second ago, you're saying that there's more likely than not upside bias within it, but you have assumed something in the Indiana. We have. We have an estimate. That's exactly right. We put an estimate in there, Julian, but...
We're filing an updated IRP later this month into March, then we're filing for CPCN. So that will crystallize more specifically toward the end of this year into 2024, much in the way that the Carolina says matured. As we go through IRP filing, now we have an order on the carbon plant.
So that's the way I would characterize it, and if anything, I would say our estimate has been on the conservative side.
Got it. Excellent. Any developments or any thoughts around South Carolina here as you think about the opportunities that may exist there? I know obviously carbon plan principally think about North Carolina here. Any crystallization of a further alignment here in South Carolina if I can call it that at all?
Well it's a good question Julian and I guess I'd like to step back and just point for a moment to a very constructive and comprehensive settlement that we were able to reach on the South Carolina rate case. I think that's an indication of just the incredible work that we have been doing with the state, with the stakeholders.
to continue constructive dialogue about where the company is going and what we're trying to accomplish. And, you know, I appreciate your sensitivity on the word alignment because what we are trying to accomplish is giving both states the flexibility to put their fingerprints on an energy plan going forward. And we believe we're making progress on this.
We actually had testimony in the carbon plan that laid out a structure that would allow states to opt in or opt out depending on their energy policy and that is beginning to take some discussion in South Carolina but that will progress over time.
We believe we operate an incredibly valuable system and will work with both states on how to add resources to meet their needs, customer and policy needs going forward.
Excellent. All right, I'll leave it there. Thank you so much, Lynn. Thank you, Julian.
Thank you.
The next question is from the line of Steve Fleischmann with Wolf Research. You may proceed.
Yeah, hi, good morning, Lynn and Brian . Thank you. Hi Steve. Good morning. Good morning.
Thank you.
Just a follow-up question on the commercial renewables impairment. I think you announced it was for sale in the Q3 call. So is there a reason the impairment was not taken then and is being taken now? Is that because you have more information? Is that something else?
So Steve, we actually made the decision, final decision to fail in early November .
and announced it on the third quarter call. So that decision went through a governance process, board approval, et cetera, in the fourth quarter. And as a result, the impairment goes in the fourth quarter.
Okay, that's helpful. But it does sound like...
The impairment, the value that you have on now is consistent with the ranges that you've been expecting for the sale process. That's exactly. Within our planning range. So that's nothing's really changed in your planning range.
Okay. And then my other... Okay. Thanks.
My other question is on these rate cases in North Carolina under the new law, the new multi-year rate plan.
How are you thinking about whether you'd be able to...
to settle those cases or that they likely need to, because they're kind of the first under the law, need to go through a fall litigated process most likely.
You see, I think it's too early to tell exactly. And you may, if you think back on our history, we have from time to time entered into partial
Where you feel like there are elements of the case that can be agreed and the others, that the parties believe ought to be put in front of the commission. You should know we'll explore discussions with all intervening parties through this process. And as we get closer to dates when testimony is ready to be heard and testimony is in filed by all the parties.
we'll begin those discussions, but it's too early to tell the shape that it will take. Thank you. I guess one last thing, the $300 million of owning reductions. I know that's, I think, a number that you've had before.
75% sustained. Can you just remind me is that the same that you said before or did that number take it? It is.
No, it's the same. It's the same as what we said before. So thank you.
Thank you.
Thank you. Thanks so much.
Thank you. The next question is from the line of David Arcrow with Morgan Stanley . You may proceed.
Thank you. The next question is from the line of David Arcrow with Morgan Stanley . You may proceed. Hey, good morning. Thanks for taking my question.
Hi, David. Good morning. Just on that topic of cost management, can you give your latest level of confidence in hitting the $300 million this year, what you're seeing in the backdrop in terms of it becoming more challenging, easing up of any of those inflationary pressures this year so far? That's a good question, David. David, this is Brian .
levels with work prioritization.
And we did this across the board, but a good example is in IT. We have about 1300 IT systems. Well, not all are mission critical, don't need to have the same level of support as others. So we really stratified our support levels, and we did that across IT, HR, legal, finance. We looked across the corporate areas and found...
really structural opportunities that will remain for the long term. And that's why we feel like a lot of the 75% of the 300 million is sustainable. And another area that was also very important to the cost reductions was a real estate footprint. In uptown Charlotte, we're moving from four buildings into one new tower. That's reducing service costs on those assets as well as.
at least call some end depreciation. So, inflationary pressures are not impacting our ability to hit that $300 million target. We've contemplated inflation in certain pockets in the portfolio as we look into the spend in 2023 in our planning horizon and feel good about the 565 target we have.
Okay, understood. Thanks, that's helpful. And then I was wondering if you could just talk to what gave you the confidence in knocking up the CAPX plan for the 23 to 27.
period but then also on the rate base outlook it looked like the 2027 rate base forecast had had ticked up a decent amount versus the prior expectations so wouldn't there any other drivers behind that too.
You know David, as we come to capital planning every year...
We take into account where we are with regulatory approval, where we are with integrated resource plans, et cetera. And so we have seen an increase in transmission and distribution investment. If you look at the carbon plan in particular, there's transmission that's been approved in order to open up more potential for renewables. And as we get out into 26, 27, those numbers.
well. So this is in line with our expectations as we move through the 20s.
I think that's an important point. As we were talking, I'm thinking back to the Generation Transition Day, kind of showing those charts about the 10 years, as we get deeper into the plan, more generation investment begins to show up. Earlier in the plan, more transmission and distribution. So you're beginning to see that and you'll see more of it in 28, 29, 30. 30.
Okay, great. That's helpful. Thanks so much.
Thank you.
Thank you. The next question is from the line of Nick Campanella with Credit Swiss. You may proceed.
Hey, good morning everyone. Thanks for taking my question and a lot of good questions so far. So I guess conceptually, Brian , when you updated this plan in the third quarter, we were kind of at the height of inflation.
interest cost, gas cost, et cetera. And now, you know, we've obviously seen some of those things roll over here, since you've given, you know, the five to seven. Does that put you in a better spot in the range now, you know, given that dynamic? I'm just thinking long-term through the plan here, any comment that you could give on that?
Nick, it is a good question around long-term growth rate. We feel good about our 57% growth.
We have a lot of things to figure out. I mean, interest rates have moderated to some degree, but they're still moving up, right? The Fed's still moving it. Fuel costs have been on the downward trend and it's really good for our customers, but they can move up just as fast as they did in 2022. So right now we're sticking to the five to 7% growth range and not signaling inside it anymore.
I think the commodity prices coming down, Nick, is a real positive for customers because you think about we still have deferred fuel to collect.
but our estimates for cost of fuel in 2023 is coming off.
And that's a good thing. So we're pleased to see that it's good for customers. It also takes a little pressure off of interest.
and financing, so we'll continue to take advantage of every bit of that.
Hey, thanks. I appreciate that. And, you know, to your point on the deferred fuel, you know, 80 bibs hit to the FFO and, you know, just 23 timeframe here. And I acknowledge you have a path to get back to the 14% long term. I guess my question is, you know, do you see...
you know, sufficient headroom in your metrics at this point for unforeseen events like storms? And you just, how should we kind of think about the ability for the current plan to just handle any more kind of transient credit hits here?
And we feel very comfortable. The fact that we've absorbed 4 billion of deferred fuel and a half billion of hurricane in 2022 alone.
I think it's a strong testament to where we are, our scale, our ability to manage resources, et cetera. So we feel comfortable with it. We care deeply about maintaining these criteria ratings. We think they're important and at the right level for the degree of risk and the business.
But this is an opportunity that presents itself with the size and scale of our company where we can manage our way through blips of this type.
More than a blip actually $4 billion.
Thank you.
Thank you for that color. Thank you.
Thank you.
Thank you.
The next question is from the line of Jeremy Tenet with JP Morgan. You may proceed.
Hi, good morning.
Good morning. Hi Jeremy. Good morning.
I just want to round out the commercial for Noble's conversation a little bit if I could. If there's any additional color you could provide on the sale, such as We're Book Value stands right now for folio tax equity position asset level debt, just try to fuse together more on our side. Appreciate that it's a sensitive time given that you're selling the asset. That's one earned.
the process. And I don't know, Brian , if you want to add anything to... Yeah, Jeremy, you know, we referenced a $3 billion book value excluding the tax attributes mid-year. And we had some projects we continued to invest in for the balance of the year, and then took the $1.3 million right down at the end of the year. So you can kind of walk it down that way.
if you want to think about book value. Got it, that's helpful, thank you for that. And then just wanted to kind of pivot a little bit, Duke's involved with a number of emerging technology partnerships, including Honeywell Battery Tech and TerraPowers Advanced Nuclear, Hydrogen Pilot.
Just wondering which technology here you're most excited about and you know if you were gonna move forward 10 20 years down the road Which one do you think plays a larger part in the Duke portfolio of us?
We would like to have a very good question.
It's a really good question. And one of the reasons we are involved in so many different things is the obstacle for full-scale adoption has a lot to do with which technology can reach commercial scale.
with a supply chain that will support how much of it we need.
I think about our path of climate report through 2050 has us in need of somewhere between
10 and 15,000 megawatts of what we call zero emitting load following resources, kind of in that late 30, 40 range. So that could be hydrogen. It could be small modular reactors. It could be CCUS. It could be longer duration storage. So.
The key being, again, though, we're not going to invest until they're affordable for our customers, and we can invest at the commercial scale necessary to make a difference.
The small module reactor is something we're spending time on and you would expect us to. We are the largest regulated nuclear operator in the US.
sitting in a part of the world that embraces nuclear is part of the solution.
But we also joined with a collection of Southeast from utilities to pursue a hydrogen hub, because with all that carbon free generation and all this solar we're going to have in this area. We think that's something worth investing in really as part of maintaining and preserving the natural gas infrastructure. This has been so important to this region.
So I know it's a roundabout answer to the question, but we're not ready to put our finger on any specific technology as the solution. But we are advancing our work, piloting, advising, working as actively as we can to make sure these technologies are developing at pace so that when we do need them and are ready to invest there will be some...
Good morning team. Thanks for giving me time. Good morning. Good morning, Brian . Just all my other questions have been answered. If I may, I just said a quick clarification on the tax leakage portion of the commercial or new wholesale, Ryan. So the message on the Q3 call was tax leakage is manageable, giving you other tax.
the tax basis as a result of this impairment charge, so no change in message. We can manage it.
Okay, that's it guys. Thank you so much.
Okay, that's it guys. Thank you so much.
That's it guys, thank you so much. Okay, thank you, Dhragesh.
Thank you. That's all the time we have for questions today. I would like to turn the call back over to Lynn Good for concluding remarks.
Well, thank you all for joining and for your investment in Duke Energy. We appreciate that. We feel like we've had a strong finish to the year and excited about 2023. And as always, we're available on investor relations and the senior management team for any further questions. So thanks for joining today.