Duke Energy · 8-K exhibit

Duke Energy Carolinas, LLC

Updates Regarding the 2025 Rate Case Filings

in North Carolina

Background:

·

On November 20, 2025, Duke Energy Carolinas (DEC) filed a rate case with

the North Carolina Utilities Commission (NCUC) seeking approval for increases in retail revenues. The filing included requests for Performance

Based Regulation (PBR) mechanisms, featuring a 2-year Multi-Year Rate Plan (MYRP) as well as residential decoupling, performance incentive

mechanisms (PIMs), and an earnings sharing mechanism (ESM).

◦

The initial filing requested an approximately 15.0% overall increase in retail revenues over the two-year period, or approximately

◦

The rate case filing requested an overall rate of return of 7.92% based upon an ROE of 10.95% with a 53% equity component in the capital

structure1 as compared to the ROE approved in the last rate case of 10.1% with a 53% equity component in the capital structure.

◦

The historic base case in the initial filing is based on North Carolina retail rate base of approximately $26.5 billion as of December

31, 2024, adjusted for known and measurable changes projected through March 31, 2026.

◦

T1The MYRP includes impacts of approximately $4.4 billion (NC retail allocation) of capital projects that are projected to go in service

over the 2-year MYRP period.

·

On June 19, 2026, the Company filed an updated revenue requirement request

as part of the Company’s rebuttal testimony which T2reduced the requested increase to approximately $622 million over the two-year

period, which is an approximate 9.3% overall increase in retail revenues. As part of the revised revenue requirement request, T3the Company

has requested a 10.48% ROE with a 53% equity component in capital structure, and has T4made certain other adjustments to reduce the requested

increase including withdrawing the proposed depreciation study, accelerating the amortization period for the Helene storm securitization

reconciliation, and removing Winter Storm Fern from the case to pursue future securitization.

·

On July 2, 2026, DEC and the Public Staff - North Carolina Utilities Commission

(“Public Staff”) filed an Agreement and Stipulation of Partial Settlement (the “Stipulation”) with the NCUC resolving

certain issues in the case.

Major Components of the Stipulation

·

T5The Stipulation resolves a variety of accounting and plant items and adjustments

in the case, including: payroll and benefits, bad debt expense, coal ash compliance costs amortization period, continuation of the transmission

cost allocation adjustment, and a compromised resolution on specific distribution, solar, microgrid, and other plant adjustments and smaller

adjustments proposed in the case. For the proposed MYRP2 capital program, the Stipulation resolves discrete project-level items —

including limiting the Distribution Substation and Line program reduction to the equipment retrofit program and preserving the Company's

ongoing O&M estimate — while leaving the broader MYRP2 capital disputes for litigation.

1 Overall rate of return includes the provisions of the CCR settlement which includes

a 150 basis point reduction in the ROE with a 52% equity component for the capital structure allowed for coal ash deferrals during the

amortization period.

·

T6While the Stipulation does not resolve the MYRP2 proposal or the broader

MYRP2 capital disputes, it does resolve certain discrete project-level adjustments to the proposed MYRP capital projects, if the MYRP

is approved by the NCUC, for hearing efficiency.

Key issues on which the parties have not reached a compromise include

the following – these issues will be litigated at hearing:

·

Performance Based Ratemaking application including the proposed MYRP2, PIMs,

and Decoupling and ESM

·

ROE and capital structure

·

T7Storm related matters such as the Hurricane Helene securitization reconciliation,

Winter Storm Fern recovery, and the storm reserve request

·

Customer growth, related large load plant allocation, and large load interconnection

facilities/CIAC

·

Large load tariff

·

Depreciation Study

·

Incentive compensation, rate case expenses, and other contested O&M items

Additional Information:

·

The Stipulation is subject to the review and approval of the NCUC.

·

An evidentiary hearing to review the Stipulation and remaining issues in

the case is scheduled to commence July 7, 2026.

·

Subject to NCUC approval, DEC has requested total Year 1 rates to be in effect

·

The Stipulation will result in a one-time pre-tax accounting charge of approximately $10 million, to be recognized in 2nd quarter

Reconciliation of Company Request to Reflect Stipulation

($ in millions)

Historic

Base

Case

Year 1 -

MYRP

Year 1

Total

Year 2 –

MYRP

Combined

Total

Original requested revenue requirement increase

Post-filing, pre-Stipulation adjustments

)

)

)

)

)

Revised Company requested revenue requirement increase

Adjustments agreed to in partial stipulation

)

(1

)

)

(4

)

)

Company requested revenue requirement increase considering agreed upon items

Net annualized customer rate increase

%

%

%

%

%

Note: Totals may not add due to rounding

Cautionary Statement Regarding Forward-Looking

Statements

This document includes forward-looking statements within the meaning

of Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934. Forward-looking statements are based

on management’s beliefs and assumptions. These forward-looking statements are identified by terms and phrases such as "anticipate,"

"believe," "intend," "estimate," "expect," "continue," "should," "could,"

"may," "plan," "project," "predict," "will," "potential," "forecast,"

"target," "outlook," "guidance," and similar expressions. Various factors may cause actual results to be

materially different than the suggested outcomes within forward-looking statements; accordingly, there is no assurance that such results

will be realized. These risks and uncertainties are identified and discussed in Duke Energy’s Form 10-K for the year ended

December 31, 2025, and subsequent quarterly reports filed with the Securities and Exchange Commission (“SEC”) and available

at the SEC’s website at www.sec.gov. In light of these risks, uncertainties and assumptions, the events described in the forward-looking

statements might not occur or might occur to a different extent or at a different time than Duke Energy has described. Duke Energy expressly

disclaims an obligation to publicly update or revise any forward-looking statements, whether as a result of new information, future events

or otherwise.