Duke Energy (DUK.N): Top North Carolina Hearing Takes, Q2 Expectations

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Duke Energy (DUK.N): Top North Carolina Hearing Takes, Q2 Expectations

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14 Jul 2026 16:05:43 ET │ 13 pages

Duke Energy (DUK.N)

Top North Carolina Hearing Takes, Q2 Expectations

CITI'S TAKE

We listened to Duke’s North Carolina rate case hearings these past few days

and the key debate was on affordability. Staff continued recommending

Commission reject PBR2 and return to traditional ratemaking. Buy

Commissioner questioning appeared largely focused on refining, not Price (13 Jul 26 16:00) US$126.86

eliminating, the PBR framework, and moderating the ROE, PIMs, and ESM.

Target price US$142.00Overall, we think DUK will get a reasonably constructive outcome in NC.

Expected share price return 11.9%

Q2: Weather/Load Help Offset Financing Drag — We estimate $1.33 for the Q Expected dividend yield 3.5%

reflecting ~5¢ of favorable Q2 weather, ~3¢ from load growth, ~2¢ from customer Expected total return 15.5%

growth (Carolina residential and DC expansion), and transmission riders tailwind of

~4-5¢. Key offsets include ~6¢ of interest expense, ~4-5¢ of D&A, and a new ~4¢ Market Cap US$98,900M

minority interest drag from the Florida partnership. DUK’s Q2 earnings call is

scheduled for 4 Aug.

PBR Debate Ongoing — Staff reiterated its recommendation to reject PBR2, arguing Price Performance

traditional ratemaking provides stronger customer protection. Duke argued it would (RIC: DUK.N, BB: DUK US)

increase regulatory lag (~21 months for certain grid investments), financing costs,

and customer bills. Intervenors also argued ESM’s current 50bps sharing band is too

generous. Commissioner questions focused on improving PBR rather than

abandoning it. We think PBR2 will be approved with refinements.

Lower 10.48% Request, ROE Key Issue — While Duke lowered its requested ROE to