Half the Ask, Most of the Framework: Reading the Comprehensive Settlement

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Half the Ask, Most of the Framework: Reading the Comprehensive Settlement

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lowering the ceiling from 10.6% to 10.3%. Earning the prior 10.1% remains possible but requires out- .Source: Bloomberg,Prem/(Disc)Jefferiesvs RegulatedLLC.Electric Peers Average 1.1%

earning the new level by 30bps; which the band permits. Decoupling and the MYRP reduce recovery Elevated rate case risk coincident with

lag; earned ROE still depends on execution, cost, load, and timing. elevated political risk in the Carolinas have

contributed to a de-rate in shares.

A refund mechanism on capex and in-service timing extends an olive branch to Staff. The MYRP

Rider is one-way but not dollar-for-dollar: refunds equal a composite rate, 1 minus the product of the

completion and revenue requirement ratios, times the aggregate shortfall; the composite nears zero

only if both ratios near 100%; DEC withdrew its Timely Completion PIM in exchange. Contingency drops

to 25% of prior estimates, the Breaker Replacement Program is halved, and the DOE funded Belews

Creek portion and NextGen GIS come out, with no further MYRP2 reductions; the bridge to the

$600m is not quantified. Separately, $173.2m (system) of large load interconnection facilities leaves

the historic base case with no regulatory asset treatment; interim return is foregone, not deferred;

DEC may seek the underappreciated balance later. The $111m of other stipulated adjustments awaits

testimony due by July 20.

The readthrough for DEP: while the stay out and tariff process remain conditional. The named

terms, 9.8% and 53% (DEP's current authorized), the refund mechanism, no blanket MYRP2

reduction, and 25% contingency, cut the odds of Staff's 9.50% and 51% DEP position; plant items

and impairments vary.