DukeEnergy Ohio ElectricSecurity Plan (ESP) Settlement Overview
Exhibit 10.1
Duke Energy Ohio
Electric Security Plan (ESP) Settlement Overview
Background – Ohio Electric Market (Past and Present)
· Ohio Amended Substitute Senate Bill No. 221 (SB221) signed May 1, 2008 (effective July 31, 2008)
· Duke Energy Ohio filed its ESP on July 31, 2008
Settlement and PUCO Order
· Settlement agreement filed on October 27, 2008
· PUCO Order issued December 17, 2008
· 3-year Plan: January 1, 2009 — December 31, 2011
· Pricing and Customer Impacts
· Pricing Impacts
|
|
| 2009 |
| 2010 |
| 2011 |
| |||
| ($ in millions) |
| Revenue |
| Revenue |
| Revenue |
| |||
| Base Price Increase |
| $ | 83 |
| $ | 121 |
| $ | 219 |
|
| RTC Termination (Note) |
| $ | (47 | ) | $ | (47 | ) | $ | (121 | ) |
| Net Revenue Increase |
| $ | 36 |
| $ | 74 |
| $ | 98 |
|
|
|
|
|
|
|
|
|
| |||
| Original Proposal |
| $ | 110 |
| $ | 130 |
| $ | 75 |
|
Note: Residential and non-residential RTC revenue and equivalent amortization expense terminates 12/31/08 and 12/31/10, respectively.
· Deferral of up to $50MM Beckjord Station O&M, amortized over 3 years (no revenue impact — only amortization expense)
| ($ in millions) |
| 2009 |
| 2010 |
| 2011 |
| |||
| Planned 2009 Beckjord O&M |
| $ | 50 |
|
|
|
|
| ||
| Amortization Expense |
| $ | (17 | ) | $ | (17 | ) | $ | (16 | ) |
| Deferred Beckjord O&M Balance |
| $ | 33 |
| $ | 16 |
| $ | 0 |
|
· Customer Impacts (as % of total bill)
· Overall annual average increase = 2% in 2009 and 2010, and 1.2% in 2011
· Average impact by customer class(excluding distribution rate case impacts):
· Residential = 2% in 2009 and 2010, and 0% in 2011
· Commercial and Industrial = 2% in each year
· Cost-Based Trackers
· Retain existing trackers for:
· Fuel, purchased power and emission allowances (currently FPP, new name PTC-FPP)
· Environmental, homeland security & change in tax law (currently AAC, new name PTC-AAC)
· Capacity purchases (currently SRT, new name SRA-SRT)
· Replaces DSM tracker with new energy efficiency tracker (Save-A-Watt) (Rider DR-SAW)
· New unavoidable trackers for:
· Infrastructure modernization (SmartGrid) (Rider DR-IM) - Provides for deferral of costs and accumulation of carrying charges between point of expenditure and inclusion of such costs in the rider;
· Economic competitiveness (customer incentives approved by PUCO) (Rider DR-ECF)
· Settlement withdrew the proposed inflation adjustment rider and the unavoidable newly dedicated capacity rider
· Projected Average Price-to-Compare ($/MWh)
|
|
| 2009 |
| 2010 |
| 2011 |
| |||
| Base Generation (PTC-BG) |
| $ | 29.20 |
| $ | 31.10 |
| $ | 36.00 |
|
| Fuel and Purchased Power (Rider PTC-FPP) |
| $ | 23.80 |
| $ | 27.10 |
| $ | 30.10 |
|
| Environmental (Rider PTC-AAC) |
| $ | 5.70 |
| $ | 5.50 |
| $ | 5.00 |
|
| Total Price-to-Compare (PTC) |
| $ | 58.70 |
| $ | 63.70 |
| $ | 71.10 |
|
| PTC in Original ESP Filing |
| $ | 62.50 |
| $ | 67.30 |
| $ | 71.50 |
|
· Settlement allows the gas generation assets to be sold or transferred to an affiliated GenCo
· Existing dedicated assets to continue serving Duke Energy Ohio customers during the 3-year term of the ESP
· Earnings Test
· ROE threshold = 15%
· ROE excludes purchase accounting & goodwill, mark-to-market accounting, and material non-recurring gains and losses
Duke Energy Ohio
Price Structure Transition From RSP to ESP
