Storm Cost Recovery

Yes. By securitizing the storm costs, we are saving around 35% for North Carolina customers.

North Carolina regulators approved the issuance of the storm recovery bonds after determining they would provide quantifiable benefits to customers when compared to the costs customers would have incurred without storm recovery bonds.

The storm recovery charge includes costs for 2018 and 2019 hurricanes Florence, Michael, Dorian, and Winter Storm Diego in North Carolina, including capital, O&M, carrying costs, and financing costs.

Securitization is a financing option used by utilities to recover unexpected costs while at the same time saving customers money. The process occurs through the issuance of highly rated debt securities (bonds) which are backed by the right to collect nonbypassable charges from customers to cover interest and principal payments.

Duke Energy had to demonstrate the prudency of storm recovery costs, as well as cost savings for customers that resulted from a securitization plan. State regulators determined the bond-based recovery plan resulted in lower overall costs for customers as compared to traditional methods of recovery. The storm costs recovered through the storm recovery charge will be paid for over a 20-year time period, as approved by the NCUC.

The “storm recovery charge” began appearing on customer bills in December 2021. Due to an under-collection from when storm securitization was first implemented, this line item temporarily increased on customer bills in April, May and June 2022. As of July 2022, the charge subsequently decreased to below its initial level. For residential customers using 1,000 kWh per month, the storm recovery charge is as follows: