"Quarterly Review"
Selected Financial and Operational Data:
Re:
Electric Companies
􀆔􉐀􀀃􀌀􀀃􀌀􀀃􀍄Duke Energy Carolinas, LLC
􀆔􉑄 Duke Energy Progress, LLC,
d/b/a Duke Energy Progress
􀆔􉑖 Virginia Electric and Power Company,
d/b/a Dominion North Carolina Power
Natural Gas Local Distribution Companies
􀆔􉐀􀀃􀌀􀀃􀍐 Piedmont Natural Gas Company, Inc.
􀆔􉑐 Public Service Company of North Carolina, Inc.,
d/b/a PSNC Energy
􀅶􇘀􀀃􀍑Quarter Ending December 31, 2015 􀅶􇘀
􀀰􃀀􀀐􁀀􀀔􁐀􀀏􀼀􀀃􀌀􀀶􃘀􀁘􅠀􀁅􄔀􀀃􀌀􀀔􁐀􀀕􁔀
Prepared by:
North Carolina Utilities Commission
Operations Division
430 N. Salisbury Street Mailing Address:
Raleigh, NC 27603 4325 Mail Service Center
919-733-3979 www.ncuc.net Raleigh, NC 27699-4300
!}& tah~ of~ ortq illaro I ina
~ tilitirs illommission
4325 Mail Service Center
Raleigh, NC 27699-4300
COMMISSIONERS
EDWARDS. FINLEY, JR., CHAIRMAN
BRYAN E. BEATTY
TONOLA D. BROWN-BLAND
May 11, 2017
MEMORANDUM
TO:
FROM:
Chairman Edward S. Finley, Jr.
Commissioner Bryan E. Beatty
Commissioner ToNola D. Brown-Bland
Commissioner Don M. Bailey
Commissioner Jerry C. Dockham
Commissioner James G. Patterson
Commissioner Lyons Gray
Bliss B. Kite, Director Q;~V­Operations
Division
COMMISSIONERS
DON M. BAILEY
JERRY C. DOCKHAM
JAMES G. PATIERSON
LYONS GRAY
The Operations Division hereby presents for your consideration the Quarterly Review for
the calendar quarter ending December 31 , 2015. Such report, which has been prepared
by the Operations Division, presents an overview of selected financial and operational
information and data for five major investor-owned public utilities regulated by the
Commission.
This current report as well as past Quarterly Review reports are available on the
Commission's website www.ncuc.net and can be accessed by clicking on the "Activities"
link located on the left side of the screen. The reports are located under "Other
Commission Activities." The Quarterly Review reports may also be accessed on the
Commission's website by selecting "Docket Portal", "Docket Search", and keying Docket
Number "M-1 Sub 12".
Should you have questions concerning the current report, Freda Hilburn, Fenge Zhang,
or I will be pleased to be of assistance.
Thank you for your consideration.
430 North Salisbury Street · Raleigh , North Carolina 27603
Telephone No: 919-733-4249
Facsimile No : 919-733-7300
www.ncuc.net
This Page Was Intentionally Left Blank
iii
Table of Contents
Part Page
I Introduction 1
II Review of Key Financial Ratios: 9
􀅽􇵓 Summary Statement of Key Financial Ratios for Five Selected
Companies for the Twelve Months Ended December 31, 2015
– Returns on Common Equity, Overall Rates of Return,
Common Equity Capitalization Ratios, and Debt Ratios – and
Certain Rate Case Data 10
􀅽􇵓 Statement of Authorized Returns on Common Equity and
Overall Rates of Return Granted by Various Public Utility
Regulatory Agencies as Reported by Public Utilities Reports,
Volume Nos. 316-332, from December 2014 through
December 2016 12
III Overviews of Selected Financial and Operational Data by Utility: 14
􀅽􇵅 Electric Companies:
􀁸􇡄 Duke Energy Carolinas, LLC 15
􀁸􇡄 Duke Energy Progress, LLC, d/b/a
Duke Energy Progress 16
􀁸􇡖 Virginia Electric and Power Company, d/b/a
Dominion North Carolina Power 17
􀅽􇵎 Natural Gas Local Distribution Companies:
􀁸􇡐 Piedmont Natural Gas Company, Inc. 18
􀁸􇡐 Public Service Company of North Carolina, Inc., d/b/a
PSNC Energy 19
IV Telecommunications Companies – Annual Report Filings 20
V Appendix A – Electronic Distribution List
This Page Was Intentionally Left Blank
Part I
Introduction
􀅽􇵔 The purpose, structure, focus, and an abbreviated synopsis of the
nature of the contents of this report is presented here.
2
The Quarterly Review has been designed and is structured so as to provide, in a
clear and concise format, relevant and useful financial and operational information
pertaining to five major investor-owned public utilities regulated by the North Carolina
Utilities Commission (Commission): three electric companies and two natural gas local
distribution companies. The primary focus of this report is one of a jurisdictional financial
nature. However, albeit limited, certain jurisdictional operational information is also
included.
To a vast extent the information presented herein is organized into individual
company overviews and covers a period of five years. From a general viewpoint, the
individual company overviews provide information that users of this report will find helpful
from the standpoint of gaining insight into each company's jurisdictional financial standing
and in acquiring a sense of the magnitude of each company's overall jurisdictional
economic dimension.
As reported previously, significant changes took place with regard to the annual
reporting requirements for the price plan regulated telephone companies since the
12-month reporting period ending December 31, 2010. Specifically, on June 30, 2011, in
Docket No. P-100, Sub 72b, the Commission issued an Order ruling on a petition filed by
the North Carolina Telecommunications Industry Association, Inc. on March 16, 2011,
requesting modification or elimination of certain reporting requirements relating to
incumbent local exchange companies (ILECs) and/or competing local providers (CLPs).
The June 30, 2011 Order, among other things, revised Commission Rule R1-32 by adding
a new Subsection (e1). Such revision allows ILECs, that are price plan regulated under
G.S. 62-133.5(a), and any carrier electing regulation under G.S. 62-133.5(h) to satisfy all of
their annual reporting obligations by one of the two following ways: (1) by providing a link to
their annual filings with the Securities and Exchange Commission (SEC), if they are publicly
traded entities, or (2) by filing copies of their audited financial statements with the
Commission, if they are not publicly traded entities. By Order dated November 22, 2011, in
Docket No. P-100, Sub 165A, the Commission applied this same rule to entities operating
under G.S. 62-133.5(m). The foregoing would be in lieu of filing annual reports regarding
the North Carolina Operations on forms furnished or approved by the Commission. Price
plan regulated telephone companies are required to either provide their annual reports to
the Commission or otherwise satisfy their annual reporting obligations under Commission
Rule R1-32, Subsection (e1) as soon as possible after the close of the calendar year, but in
no event later than the 30th day of April each year for the preceding calendar year.
The majority of the price plan regulated telephone companies have elected to meet
their annual reporting obligation by providing links to their annual filings with the SEC. For
the following ILECs: (1) BellSouth Telecommunications, LLC, d/b/a AT&T North Carolina
(AT&T North Carolina); (2) Carolina Telephone and Telegraph Company LLC, d/b/a
CenturyLink (Carolina); (3) Central Telephone Company, d/b/a CenturyLink (Central);
(4) Mebtel, Inc., d/b/a CenturyLink (Mebtel); (5) Frontier Communications of the Carolinas
3
Inc. (Frontier); (6) Verizon South Inc. (Verizon South); (7) Windstream Concord Telephone,
Inc. (Concord); (8) Windstream Lexcom Communications, Inc. (Lexcom); and
(9) Windstream North Carolina, LLC (Windstream NC) the url addresses/links to their
2015 annual filings with the SEC are provided in this report in Part IV.
With respect to other changes related to matters concerning the price plan regulated
telephone companies, on June 30, 2009, House Bill 1180 (HB 1180) became law as set
forth in Session Law 2009-238. Said law, entitled “An Act Establishing the Consumer
Choice and Investment Act of 2009,” created a new category of price plan operation
whereby any ILEC or CLP may choose to adopt such a plan by simply “filing notice of its
intent to do so with the Commission,” with such election being effective immediately upon
filing. Subsection (h) price plans1 provide for extensive deregulation of an electing
telecommunications company’s “terms, conditions, rates, or availability” relating to its retail
services. An ILEC electing Subsection (h) is required to continue to offer stand-alone basic
residential lines to all customers who choose to subscribe to that service at rates that can
be increased annually by no more than the percentage increase over the prior year in the
Gross Domestic Product Price Index (GDP-PI). While such deregulation is very extensive
by historical standards, it is not a complete deregulation of carriers electing Subsection (h).2
Currently, there are eight ILECs operating under Subsection (h) price plans as a
result of their notices of election filed pursuant to G.S. 62-133.5(h): (1) Verizon South3
(notice filed on July 21, 2010 to become effective immediately, in Docket No. P-19,
Sub 277M); (2) Frontier (notice filed January 30, 2012 to become effective immediately, in
Docket No. P-1488, Sub 1A); (3) Concord (notice filed July 26, 2012 to become effective
immediately, in Docket No. P-16, Sub 181L); (4) Lexcom (notice filed July 26, 2012 to
become effective immediately, in Docket No. P-31, Sub 145C); (5) Windstream NC (notice
filed July 26, 2012 to become effective immediately, in Docket No. P-118, Sub 86L);
(6) North State Telephone Company, d/b/a North State Communications (North State)
(notice filed November 30, 2012 to become effective immediately, in Docket No. P-42,
Sub 137F); (7) Ellerbe Telephone Company (Ellerbe) (notice filed December 30, 2013 to
become effective January 1, 2014, in Docket No. P-21, Sub 75); and (8) Town of Pineville,
d/b/a Pineville Telephone Company (Pineville) (notice filed July 1, 2014 to become effective
immediately in Docket No. P-120, Sub 27).
Furthermore, on April 26, 2011, Senate Bill 343 (SB 343) became law as set forth in
Session Law 2011-52. Said law, entitled “An Act Establishing the Communications Reform
1 In general, the Commission refers to the new price plan category which resulted from the passage of
HB 1180 as “Subsection (h) price plans”.
2 See Docket No. P-100, Sub 165 for additional information regarding the implications of the enactment of
HB 1180 and the implementation of Subsection (h) price plans.
3 Such election relates to Verizon South’s only exchange, the Knotts Island exchange.
4
and Investment Act of 2011”, created a new category of price plan operation outlined in
G.S. 62-133.5(m)4 whereby any local exchange company that forgoes receipt of any
funding from a state universal service fund or alternative funding mechanism that may be
established to support universal service as described in G.S. 62-110(f1) and whose territory
is open to competition from CLPs may choose to adopt a Subsection (m) price plan5 by
simply “filing notice of its intent to do so with the Commission,” with such election being
effective immediately upon filing. Subsection (m) price plans provide, among other things,
that “the Commission shall not impose any requirements related to the terms, conditions,
rates, or availability of any of the local exchange company’s retail services.”6
Currently, there are four ILECs operating under Subsection (m) price plans as a
result of their notices of election filed pursuant to G.S. 62-133.5(m): (1) AT&T North
Carolina (notice filed October 14, 2011, to become effective immediately, in Docket
No. P-55, Sub 1013M); (2) Carolina (notice filed October 31, 2014 to become effective
November 1, 2014, in Docket No. P-7, Sub 825N); (3) Central (notice filed
October 31, 2014 to become effective November 1, 2014, in Docket No. P-10, Sub 479O);
and (4) Mebtel (notice filed October 31, 2014 to become effective November 1, 2014, in
Docket No. P-35, Sub 96J). Prior to such elections, these entities were operating under
Subsection (h) price plans.7
As a result of their Subsection (h) elections (and continuing with any subsequent
Subsection (m) elections), the 12 ILECs discussed hereinabove are no longer required to
provide annual reports with the Commission as directed by Commission Rule R1-32,
commencing with the calendar year in which the Subsection (h) election became effective
(2009: AT&T North Carolina; 2010: Verizon South; 2012: Frontier, Carolina, Central,
Mebtel, Concord, Lexcom, Windstream NC, and North State; and 2014: Ellerbe and
Pineville). Alternatively, as required by the Commission’s March 30, 2010 Order in Docket
No. P-100, Sub 165, and the November 22, 2011 Order in Docket No. P-100, Sub 165A,
4 The enabling legislation was initially specified in G.S. 62-133.5(l); however, such reference has been
renumbered and codified in the General Statutes of North Carolina as G.S. 62-133.5(m). Consequently, on
April 27, 2012, the Commission issued an Errata Order to correct the reference of Subsection (l) in prior
Commission orders to Subsection (m) for consistency with the codification in the General Statutes.
5 In general, the Commission refers to the new price plan category which resulted from the passage of SB 343
as “Subsection (m) price plans”.
6 Such retail services include stand-alone basic residential lines. See Docket No. P-100, Sub 165A for
additional information regarding the implications of the enactment of SB 343 and the implementation of
Subsection (m) price plans.
7 On October 5, 2009, in Docket No. P-55, Sub 1013M, AT&T North Carolina filed its notice of election of a
Subsection (h) price plan. On March 8, 2012, in Docket Nos. P-7, Sub 825M, P-10, Sub 479N, and P-35,
Sub 96I, Carolina, Central, and Mebtel, respectively, filed their notices of election of a Subsection (h) price
plan.
5
these ILECs will provide the Commission, on an annual basis, a link to their financial filings
with the SEC.
This report has been prepared solely for the use of the Commission. The
responsibility for developing and preparing the report is that of the Commission's
Operations Division. The preponderance of the information and data included in and/or on
which the report is based has been provided by the companies. Such data has not been
audited or otherwise verified. Therefore, the Operations Division, although it believes the
aforesaid data to be true and correct in each and every respect, cannot and does not offer
any attestation in that regard.
A Specific Objective
A specific objective of this reporting process is to present to the Commission, on an
ongoing basis, meaningful information regarding the financial viability of the subject
companies, including the reasonableness of the overall levels of rates and charges
currently being charged by jurisdictional utilities, whose rates are cost based, for their sales
of services. Cost based regulation is synonymous with rate base, rate of return regulation.
Under rate base, rate of return regulation, the cost of service of a public utility is
defined as the sum total of reasonable operating expenses, depreciation, taxes, and a
reasonable return on the net valuation of property used and useful in providing public utility
services. Therefore, the reasonableness of a public utility's rates is a function of the
reasonableness of the level of each individual component of its cost of service.
The reasonable return component of the cost of service equation refers to the overall
rate of return related to investment funded by all investors, including debt investors as well
as preferred and common equity investors.8 The costs of debt capital and preferred stock,
which are essentially fixed by contract, must be deducted from revenue, like all other
components of the cost of service, in determining income available for distribution to
common stockholders. Therefore, generally speaking, a very meaningful measure of the
profitability of any utility, and consequently the reasonableness of its overall rates and
charges, is the return earned on its common shareholders' investment, i.e., its return on
common equity, over some specified period of time. Typically, such returns are measured
over a period of one year. Thus, annual returns on common equity and certain other key
financial ratios, which among other things give significant perspective to the common equity
returns, are the focal points of this report.
8 Regarding Limited Liability Corporations (LLCs), equity investors are, typically, referred to as “members”
rather than as “shareholders or stockholders”. Consequently, references to “common
shareholders/stockholders”, as contained herein, are also intended to apply to equity investors of LLCs as
well. Additionally, discussion regarding “return on common equity” and the “common equity capitalization ratio”
would also apply to the LLC’s “return on members’ equity” and “members’ equity capitalization ratio”.
6
The Key Financial Ratios
Specifically, the key financial ratios presented herein for use in reviewing the
companies' financial viabilities, including their profitability and consequently the
reasonableness of their rates and charges are (1) the return on common equity, (2) the
common equity capitalization ratio, (3) the pretax interest coverage ratio, and (4) the overall
rate of return.
The Return on Common Equity
As indicated, the return on common equity is a key financial indicator which
measures the profitability of an enterprise from the standpoint of its common stockholders
over some specified period of time. That return or earnings rate reflects the ratio of
earnings available for common equity to the common-equity investors' capital investment.
As previously stated, the ratio is significant because it traditionally represents profitability
after all revenues and costs, other than the cost of common equity capital, have been
considered. From the standpoint of measuring profitability, return on common equity is
indeed "the bottom line".
The Common Equity Capitalization Ratio
The common equity capitalization ratio is the ratio of common equity capital to total
investor-supplied capital of the firm. That ratio is significant because it is a major indicator
of the financial riskiness of the firm, particularly from the standpoint of the common
stockholders. The issuance of debt capital, assuming no offsetting decrease in preferred
stock, decreases the common equity capitalization ratio, and its existence creates what has
come to be known as financial leverage. The risk borne by shareholders that accompanies
that leverage is known as financial risk. As the proportion of debt in the capital structure
increases, so does the degree of financial leverage and thus shareholders' risk and
consequently the shareholders' requirements regarding expected return, i.e., the expected
return on common equity or, in regulatory jargon, the cost of common equity capital.
Alternatively, the financial riskiness of the firm, some might argue, is more
appropriately revealed when expressed in terms of debt leverage, particularly when
preferred stock is present in the capital structure. Such leverage is the ratio of long-term
debt capital to total investor-supplied capital. Both approaches are clearly insightful and
useful. In evaluating the superiority of one approach in comparison to the other, one should
consider the context within which the information is to be used. Since a major objective of
this report is to review the reasonableness of the levels of earnings of the companies'
common stockholders, and in consideration of the other key financial benchmarks which
are also presented herein, the common equity capitalization ratio appears to be the most
appropriate and meaningful measure of the financial riskiness of the companies for use in
this regard.
7
The Pretax Interest Coverage Ratio
The pretax interest coverage ratio is the number of times earnings, determined
before consideration of income taxes and interest charges, cover annual interest charges.
That financial indicator is particularly important to debt investors because holders of the
company's outstanding debt, including long-term bonds, receive interest payments from the
company before any earnings are determined to be available for distribution to preferred or
common equity investors. Pretax interest coverage is measured before income taxes
because interest expense is deductible in arriving at taxable income. Therefore, generally
speaking, debt holders can expect to be paid before the company incurs any liability for the
payment of income taxes. From the debt holder's perspective, all other things remaining
equal, the higher the pretax interest coverage the better.
The Overall Rate of Return
The overall rate of return measures the profitability of a firm from the standpoint of
earnings on total investment, including investment funded by both debt and equity
investors. Specifically, in the public utility regulatory environment, it is the ratio of operating
income to total investment.
The Propriety of the Methodology
The foregoing financial benchmarks, as presented in this report, have been
determined on the basis of the companies' actual operating experience. Under rate base,
rate of return regulation, North Carolina statutes require that the companies' rates be
determined on a normalized, pro forma, end-of-period basis based upon an historical test
period. Stated alternatively, the Commission, in setting prospective rates, essentially, must
take into account the company's current level of operations adjusted for known and material
changes in the levels of revenues and costs that the company can reasonably be expected
to experience over a reasonable period of time into the future. Thus, rates, which are
established for use prospectively, are set, to a certain extent and within certain constraints,
on the basis of revenue and cost expectations, including investor expectations regarding
their return requirements, as opposed to simply setting prospective rates solely on the
basis of actual operating experience.
The process of setting prospective rates is inherently and exceedingly time
consuming, difficult, and otherwise costly to both companies and regulators. It involves the
assimilation, investigation, and evaluation of enormous amounts of complex information
and data which invariably leads to multifarious issues; many, if not most, of which must be
resolved through adjudication.
It is far less difficult and costly to perform an intellectual, financial analysis of the
need to undertake the aforesaid process. Such preliminary analysis avoids the
unnecessary incursion of the immense costs of setting prospective rates. Those are
8
precisely the reasons why this report is focused on a review of the returns on common
equity and other key financial ratios which the companies are currently earning or achieving
under their existing rates and charges. Those ratios, when considered in conjunction with
statutory ratemaking requirements, prevailing economic conditions, and certain other
financial indicators, including returns on common equity and overall rates of return currently
being authorized by other public utility regulatory agencies, are meaningful indicators of the
need, if any, for further, more extensive regulatory review.
From the standpoint of giving an added measure of meaning to the aforesaid ratios
of the individual companies and in the interest of providing a sense of current financial
market conditions, certain financial information has been included herein as notes to the
first statement included in Part II of this report. Such notes are an integral part of this report.
Additionally, also from the standpoint of providing perspective, returns on common
equity and overall rates of return currently being authorized by a number of other public
utility regulatory agencies are provided in the second statement presented in Part II.
A Final Note
It is emphasized that the information contained in this report is not intended and
should not be construed to be all inclusive from the standpoint of the criteria to be used in
assessing the reasonableness of the companies’ existing rates. But rather, it is submitted
that such information is clearly relevant to such a determination and as such should be
considered in conjunction with all other pertinent information and data.
The Operations Division will be pleased to receive and respond to any questions or
comments.
Part II
A Review of Key Financial Ratios
􀅽􇵓 Summary Statement of Key Financial Ratios for
Five Selected Companies for the Twelve Months
Ended December 31, 2015 􀅆􄙒 Returns on Common
Equity, Overall Rates of Return, Common Equity
Capitalization Ratios, and Debt Ratios 􀅆􄙡 and
Certain Rate Case Data
􀅽􇵓 Statement of Authorized Returns on Common
Equity and Overall Rates of Return Granted by
Various Public Utility Regulatory Agencies as
Reported by Public Utilities Reports, Volume
Nos. 316-332 from December 2014 through
December 2016
Return Overall Return Overall Date of
Line On Rate of Equity Debt On Rate of Equity Last
No. Item Equity Return Ratio Ratio Equity Return Ratio Order
(a) (b) (c) (d) (e) (f) (g) (h) (i)
Electric Companies
1. Duke Energy Carolinas, LLC 9.65% 7.62% 56.77% 43.23% 10.20% 7.88% 53.00% 09/24/2013
2. Duke Energy Progress, LLC 8.58% 6.54% 52.74% 47.26% 10.20% 7.55% 53.00% 05/30/2013
d/b/a Duke Energy Progress
3. Virginia Electric and Power Company, 7.09% 5.99% 52.80% 47.20% 9.90% 7.367% 51.75% 12/22/2016
4. d/b/a Dominion North Carolina Power (Rate Case Prior to 12/22/2016: 10.20% 7.80% 51.00% 12/21/2012)
Natural Gas Local Distribution Companies
5. Piedmont Natural Gas Company, Inc. 8.72% 6.05% 43.40% 56.60% 10.00% 7.51% 50.66% 12/17/2013
6. Public Service Company of North Carolina, Inc., 9.21% 7.72% 58.82% 41.18% 9.70% 7.53% 52.00% 10/28/2016
7. d/b/a PSNC Energy (Rate Case Prior to 10/28/2016: 10.60% 8.54% 54.00% 10/24/2008)
10
Estimated for 12 Months Ended 12/31/2015
Common Equity Capitalization Ratios, and Debt Ratios are for Twelve Months Ended December 31, 2015
"Rate Case Data are from Orders with Various Issue Dates as Indicated in Column (i)"
Summary Statement
of Key Financial Ratios Achieved by
and Authorized for Selected Companies
"Estimated Returns on Common Equity, Overall Rates of Return,
Authorized - Last Rate Case
Summary Statement
of Key Financial Ratios Achieved by
and Authorized for Selected Companies
“Estimated Returns on Common Equity, Overall Rates of Return,
Common Equity Capitalization Ratios, and Debt Ratios are for Twelve Months Ended December 31, 2015”
NOTES: [1] Selected online, publicly-available interest rates from the “Board of Governors of the Federal Reserve System”, updated
on May 5, 2017 follow:
Part I
________U.S. Treasury Securities________
3-Month
Bill
10-Year
Note
30-Year
Bond
Line No. Date % % %
(a) (b) (c) (d)
1. May 4, 2017 0.86 2.36 3.00
2. May 3, 2017 0.85 2.33 2.97
3. May 2, 2017 0.82 2.29 2.97
4. May 1, 2017 0.83 2.33 3.00
5. April 28, 2017 0.80 2.29 2.96
[2] Selected long-term bond yield averages (%) from Mergent, Inc.’s “Mergent Bond Record Monthly Update”, May 2017,
Volume 84, No. 5:
Part II
(a) Moody’s corporate long-term bond yield averages (%):
Monthly Average Past 12 Months
Line No. Rating Apr. 2017 Mar. 2017 High Low
(a) (b) (c) (d) (e)
1. Aaa 3.87 4.01 4.06 3.28
2. Aa 3.93 4.06 4.12 3.39
3. A 4.12 4.23 4.28 3.58
4. Baa 4.57 4.68 4.83 4.22
(b) Moody’s public utility long-term bond yield averages (%):
Monthly Average Past 12 Months
Line No. Rating Apr. 2017 Mar. 2017 High Low
(a) (b) (c) (d) (e)
1. Aa 3.93 4.04 4.11 3.36
2. A 4.12 4.23 4.27 3.57
3. Baa 4.51 4.62 4.79 4.16
As noted in the Mergent Bond Record, Moody’s long-term bond yield averages are derived from pricing data on a
regularly-replenished population of over 100 seasoned corporate bonds in the United States market, each with current
outstandings over $100 million. Further, the bonds have maturities as close as possible to 30 years; bonds are
dropped from the list if their remaining life falls below 20 years or if their ratings change. Moody’s is not presently
reporting Aaa rating information for public utility bonds.
11
Authorized Returns Volume No.
Line Common Date of Public Utilities
No. Company (Jurisdiction) Equity Overall Order Reports
(a) (b) (c) (d) (e)
.
Electric Companies
1. Ameren Illinois Company, d/b/a Ameren Illinois (IL) 9.25% 8.075% 12/10/2014 Volume 317
2. Connecticut Light & Power Company (CT) 9.17% 7.31% 12/17/2014 Volume 318
3. Rocky Mountain Power (WY) 9.50% 7.41% 01/23/2015 Volume 319
4. Pacific Power & Light Company, 9.50% 7.30% 03/26/2015 Volume 320
a division of PacifiCorp (WA)
5. Union Electric Company, d/b/a 9.53% N/A 04/29/2015 Volume 320
Ameren Missouri (MO)
6. Northern States Power Company (MN) 9.72% 7.35% 05/08/2015 Volume 320
7. Black Hills Power, Inc. (SD) N/A 7.76% 04/17/2015 Volume 321
8. Appalachian Power Company and Wheeling Power Company 9.75% 7.38% 05/26/2015 Volume 321
both d/b/a American Electric Power (WV)
9. Kansas City Power & Light Company (KS) 9.30% 7.44% 09/10/2015 Volume 324
10. Consumers Energy Company (MI) 10.30% 6.18% 11/19/2015 Volume 325
11. Commonwealth Edison Company (IL) 9.14% 7.05% 12/09/2015 Volume 326
12. Avista Corporation, d/b/a 9.50% 7.29% 01/06/2016 Volume 327
Avista Utilities (WA)
13. Southwestern Public Service Company (TX) 9.70% 7.88% 02/23/2016 Volume 328
14. Indianapolis Power & Light Company (IN) 9.85% 6.51% 03/16/2016 Volume 329
15. Baltimore Gas and Electric Company (MD) 9.75% N/A 06/03/2016 Volume 330
16. UNS Electric, Inc. (AZ) 9.50% N/A 08/18/2016 Volume 331
17. Pacific Power & Light Company, 9.50% 7.30% 09/01/2016 Volume 332
a division of PacifiCorp (WA)
18. Upper Peninsula Power Company (MI) 10.00% 7.47% 09/08/2016 Volume 332
Natural Gas Local Distribution
Companies
19. CenterPoint Energy Resources Corporation, d/b/a 10.50% N/A 07/03/2014 Volume 316
CenterPoint Energy Oklahoma Gas (OK)
20. Cheyenne Light, Fuel, and Power Company (WY) 9.90% 7.98% 09/29/2014 Volume 317
21. Minnesota Energy Resources Corporation (MN) 9.35% 7.30% 10/28/2014 Volume 317
12
Statement of Authorized Returns
on Common Equity and Overall Rates of Return
Granted by Various Public Utility Regulatory Agencies as Reported in
(Statement Is All Inclusive with Respect to Returns Published)
Public Utilities Reports, Volume Nos. 316-332, from December 2014 through December 2016
Volume No.
Line Common Date of Public Utilities
No. Company (Jurisdiction) Equity Overall Order Reports
(a) (b) (c) (d) (e)
Natural Gas Local Distribution
Companies (continued)
22. Summit Natural Gas of Missouri, Inc. (MO) 10.80% 7.54% 10/29/2014 Volume 317
23. Liberty Utilities (Midstates Natural Gas) Corporation, 9.76% 7.05% 02/11/2015 Volume 319
d/b/a Liberty Utilities (IL)
24. Questar Gas Company (WY) 9.50% 7.51% 03/02/2015 Volume 320
25. Avista Corporation d/b/a 9.50% 7.52% 04/09/2015 Volume 321
Avista Utilities (OR)
26. Montana-Dakota Utilities Company 9.50% 7.34% 11/04/2015 Volume 325
a Division of MDU Resources Group, Inc. (ND)
27. Mountaineer Gas Company (WV) 9.75% N/A 10/13/2015 Volume 325
28. Avista Corporation d/b/a 9.50% 7.29% 01/06/2016 Volume 327
Avista Utilities (WA)
29. Atmos Energy Corporation (KS) N/A N/A 03/17/2016 Volume 328
30. Avista Corporation d/b/a 9.40% 7.46% 03/15/2016 Volume 329
Avista Utilities (OR)
31. Baltimore Gas and Electric Company (MD) 9.65% N/A 06/03/2016 Volume 330
32. CenterPoint Energy Resources Corporation, d/b/a 9.49% 7.07% 06/03/2016 Volume 330
CenterPoint Energy Minnesota Gas (MN)
33. New Jersey Natural Gas Company (NJ) 9.75% 6.90% 09/23/2016 Volume 332
Water Companies
34. United Water Toms River, Inc. (NJ) 9.75% 7.65% 08/19/2015 Volume 323
35. Utility Services of Illinois, Inc. (IL) 9.25% 7.88% 09/22/2015 Volume 324
36. Aqua Virginia, Inc. (VA) 9.25% 6.94% 01/07/2016 Volume 327
37. Authorized Range of Returns on Common Equity [1] N/A 07/25/2016 Volume 331
for Water and Wastewater Utilities (FL)
Notes:
[1] The Florida Public Service Commission's July 25, 2016 Order established an authorized range of returns on common equity (ROEs)
for water and wastewater utilities. The authorized ROE range is based upon a leverage formula methodology approved in 2011 which,
when applied, produces a range of authorized ROEs ranging from 8.74% at 100% equity to 11.60% at 40% equity. The ROE is capped
at 11.16% for all water and wastewater utilities with equity ratios of less than 40%.
[2] N/A denotes that information is not available.
13
Authorized Returns
Public Utilities Reports, Volume Nos. 316-332, from December 2014 through December 2016
(Statement Is All Inclusive with Respect to Returns Published)
Statement of Authorized Returns
on Common Equity and Overall Rates of Return
Granted by Various Public Utility Regulatory Agencies as Reported in
Part III
Overviews of Selected
Financial and Operational Data by Utility:
􀅽􇵅 Electric Companies
􀆒􉉄 Duke Energy Carolinas, LLC
􀆒􉉄 Duke Energy Progress, LLC,
d/b/a Duke Energy Progress
􀆒􉉖 Virginia Electric and Power Company,
d/b/a Dominion North Carolina Power
􀅽􇵎 Natural Gas Local Distribution Companies
􀆒􉉐 Piedmont Natural Gas Company, Inc.
􀆒􉉐 Public Service Company of North Carolina, Inc.
d/b/a PSNC Energy
Annual
Line December December December December December Four Current
No. Item 2015 2014 2013 2012 2011 Year Year
(a) (b) (c) (d) (e) (f) (g) (h)
1. Operating Revenue $4,971,198 $5,085,356 $4,855,217 $4,691,019 $4,483,671 2.61% -2.24%
2. Operating Expenses:
3. Fuel 1,049,510 1,176,156 1,154,481 1,012,419 1,118,297 -1.57% -10.77%
4. Purchased Power 217,871 249,013 173,794 249,493 204,368 1.61% -12.51%
5. Maintenance 484,158 448,504 389,768 440,981 438,634 2.50% 7.95%
6. Other Operating Expenses 929,702 875,492 899,706 873,836 901,399 0.78% 6.19%
7. Total Operating Expenses 2,681,241 2,749,165 2,617,749 2,576,729 2,662,698 0.17% -2.47%
8. Depreciation & Amortization 766,999 752,254 660,957 640,287 540,371 9.15% 1.96%
9. Total Expenses & Depreciation 3,448,240 3,501,419 3,278,706 3,217,016 3,203,069 1.86% -1.52%
10. Total Operating Taxes 587,852 613,631 694,188 637,923 573,316 0.63% -4.20%
11. Total Expenses, Depr. & Taxes 4,036,092 4,115,050 3,972,894 3,854,939 3,776,385 1.68% -1.92%
12. Operating Income $935,106 $970,306 $882,323 $836,080 $707,286 7.23% -3.63%
13. Net Plant Investment $15,617,754 $14,524,584 $13,353,527 $14,394,718 $12,049,429 6.70% 7.53%
14. Oper. Exp. as a % of Total Revenue 53.94% 54.06% 53.92% 54.93% 59.39% -2.38% -0.22%
15. Net Plt. Investment per $ of Revenue $3.14 $2.86 $2.75 $3.07 $2.69 3.94% 9.79%
16. Number of Customers Served (000s included):
17. Residential 1,658,166 1,635,658 1,616,028 1,600,832 1,590,044 1.05% 1.38%
18. Commercial 259,041 256,325 254,233 252,136 250,959 0.80% 1.06%
19. Industrial 4,776 4,858 4,891 4,974 5,134 -1.79% -1.69%
20. Other 11,637 11,772 11,056 10,913 10,926 1.59% -1.15%
21. Total Number of Customers 1,933,620 1,908,613 1,886,208 1,868,855 1,857,063 1.02% 1.31%
22. Annual Sales Volume: (Millions kWh)
23. Residential 21,370 21,344 20,578 20,122 21,626 -0.30% 0.12%
24. Commercial 22,948 22,735 22,157 21,868 21,896 1.18% 0.94%
25. Industrial 13,189 12,730 12,410 12,318 12,199 1.97% 3.61%
26. Other 1,270 2,081 2,563 741 616 19.83% -38.97%
27. Total Sales 58,777 58,890 57,708 55,049 56,337 1.07% -0.19%
28. Estimated Overall Rate of Return 7.62% 8.20% 7.96% 7.94% 7.32% 1.01% -7.07%
29. Estimated Return on Members' Equity 9.65% 10.73% 10.44% 10.41% 8.94% 1.93% -10.07%
30. Members' Equity Ratio 56.77% 56.08% 53.89% 53.11% 53.43% 1.53% 1.23%
31. Debt Ratio 43.23% 43.92% 46.11% 46.89% 46.57% -1.84% -1.57%
32. Estimated Pretax Interest Coverage
Ratio (Times) 5.13 5.22 4.97 4.70 4.13 5.57% -1.72%
33. LAST RATE CASE Authorized Returns: Common Equity 10.20%; Overall 7.88%; Equity Ratio 53.00%; Date of Order 9-24-13
(Docket No. E-7, Sub 1026)
Notes: [1] North Carolina retail jurisdictional revenue equates to 69% of total company electric utility revenue.
[2] Net Plant Investment reflects net plant in service.
[3] Source of Data: NCUC ES-1 Reports.
[4] ROEs for the 12 months ended: 09-30-2015, 06-30-2015, and 03-31-2015, are respectively: 10.58%, 10.83%, and 10.75%.
[5] On Line 26, the increase from December 2012 to December 2013 in "Other" annual sales volume (millions kWh) can be attributed to
energy sales by DEC to Duke Energy Progress, LLC, d/b/a Duke Energy Progress (DEP) pursuant to the Joint Dispatch Agreement (JDA)
between DEC and DEP filed in 2011 in Docket Nos. E-2, Sub 998 and E-7, Sub 986. Subsequent fluctuations in annual sales volumes
can primarily be attributed to optimizing the generation fleet between DEC and DEP pursuant to the JDA.
[6] According to the Company, no cost (i.e., neither direct nor indirect) associated with the cleanup of the Dan River coal ash spill
has been included in either capital and/or operating costs assigned to the Company's North Carolina retail jurisdiction for
ES-1 reporting purposes.
15
Growth Rate
DUKE ENERGY CAROLINAS, LLC
SELECTED FINANCIAL AND OPERATIONAL DATA
North Carolina Retail Jurisdiction
(Amounts in Thousands)
12 Months Ended
Annual
Line December December December December December Four Current
No. Item 2015 2014 2013 2012 2011 Year Year
(a) (b) (c) (d) (e) (f) (g) (h)
1. Operating Revenue $3,615,752 $3,591,550 $3,482,791 $3,406,939 $3,327,396 2.10% 0.67%
2. Operating Expenses:
3. Fuel 1,081,224 985,668 996,513 1,043,224 931,920 3.78% 9.69%
4. Purchased Power 282,060 325,141 279,756 241,185 211,731 7.43% -13.25%
5. Maintenance 388,164 427,526 302,042 331,997 257,249 10.83% -9.21%
6. Other Operating Expenses 651,623 613,605 658,784 767,405 647,895 0.14% 6.20%
7. Total Operating Expenses 2,403,071 2,351,940 2,237,095 2,383,811 2,048,795 4.07% 2.17%
8. Depreciation & Amortization 427,175 384,523 343,721 365,776 345,062 5.48% 11.09%
9. Total Expenses & Depreciation 2,830,246 2,736,463 2,580,816 2,749,587 2,393,857 4.28% 3.43%
10. Total Operating Taxes 290,633 348,225 416,958 313,573 394,760 -7.37% -16.54%
11. Total Expenses, Depr. & Taxes 3,120,879 3,084,688 2,997,774 3,063,160 2,788,617 2.85% 1.17%
12. Operating Income $494,873 $506,862 $485,017 $343,779 $538,779 -2.10% -2.37%
13. Net Plant Investment $10,474,335 $6,837,553 $6,858,147 $6,626,159 $6,021,586 14.84% 53.19%
14. Oper. Exp. as a % of Total Revenue 66.46% 65.49% 64.23% 69.97% 61.57% 1.93% 1.48%
15. Net Plt. Investment per $ of Revenue $2.90 $1.90 $1.97 $1.94 $1.81 12.51% 52.63%
16. Number of Customers Served (000s included):
17. Residential 1,146,432 1,130,323 1,114,281 1,100,743 1,111,076 0.79% 1.43%
18. Commercial 195,964 193,036 191,042 189,018 193,001 0.38% 1.52%
19. Industrial 3,549 3,574 3,626 3,732 3,931 -2.52% -0.70%
20. Other 1,322 1,389 1,463 1,507 1,592 -4.54% -4.82%
21. Total Number of Customers 1,347,267 1,328,322 1,310,412 1,295,000 1,309,600 0.71% 1.43%
22. Annual Sales Volume: (Millions kWh)
23. Residential 15,775 15,945 15,204 14,607 15,853 -0.12% -1.07%
24. Commercial 12,308 12,158 11,922 11,908 12,101 0.42% 1.23%
25. Industrial 7,842 7,839 8,259 8,344 8,392 -1.68% 0.04%
26. Other 5,017 5,015 4,007 3,888 1,234 42.00% 0.04%
27. Total Sales 40,942 40,957 39,392 38,747 37,580 2.17% -0.04%
28. Estimated Overall Rate of Return 6.54% 7.34% 7.53% 5.55% 9.23% -8.25% -10.90%
29. Estimated Return on Common Equity 8.58% 10.13% 10.21% 6.19% 12.15% -8.33% -15.30%
30. Common Equity Ratio 52.74% 52.25% 53.17% 53.42% 58.38% -2.51% 0.94%
31. Debt Ratio 47.26% 47.75% 46.70% 45.98% 40.99% 3.62% -1.03%
32. Estimated Pretax Interest Coverage
Ratio (Times) 4.54 5.09 5.27 3.44 6.12 -7.19% -10.81%
33. LAST RATE CASE Authorized Returns: Common Equity 10.20%; Overall 7.55%; Equity Ratio 53.00%; Date of Order 5-30-13
(Docket No. E-2, Sub 1023)
Notes: [1] North Carolina retail jurisdictional revenue equates to 69% of total company electric utility revenue.
[2] Net Plant Investment reflects net plant in service.
[3] Source of Data: NCUC ES-1 Reports.
[4] ROEs for the 12 months ended: 09-30-2015, 06-30-2015, and 03-31-2015, are respectively: 10.32%, 9.82%, and 10.41%.
[5] On Line 13, the increase from December 2014 to December 2015 in net plant investment was primarily due to a change in reporting
by DEP to include its asset retirement obligations.
[6] The decrease from December 2011 to December 2012 in the number of customers was primarily due to a change in reporting by DEP.
Beginning with the December 2012 NCUC ES-1 Report, DEP now reports the number of active customers rather than the total number
of customers which includes both active and inactive customers.
[7] On Line 26, the increase from December 2012 to December 2013 in "Other" annual sales volume (millions kWh) can be attributed to
energy sales by DEP to Duke Energy Carolinas, LLC (DEC) pursuant to the Joint Dispatch Agreement (JDA) between DEC and DEP filed
in 2011 in Docket Nos. E-2, Sub 998 and E-7, Sub 986. Subsequent fluctuations in annual sales volumes can primarily be attributed to
optimizing the generation fleet between DEP and DEC pursuant to the JDA.
16
12 Months Ended Growth Rate
DUKE ENERGY PROGRESS, LLC, d/b/a
DUKE ENERGY PROGRESS
SELECTED FINANCIAL AND OPERATIONAL DATA
North Carolina Retail Jurisdiction
(Amounts in Thousands)
Annual
12 Months Ended
Line December December December December December Four Current
No. Item 2015 2014 2013 2012 2011 Year Year
(a) (b) (c) (d) (e) (f) (g) (h)
1. Operating Revenue $378,557 $374,189 $365,523 $346,210 $313,529 4.82% 1.17%
2. Operating Expenses:
3. Fuel 101,850 77,802 69,255 90,357 40,027 26.30% 30.91%
4. Purchased Power 38,025 53,962 47,463 58,512 82,980 -17.72% -29.53%
5. Maintenance 0 0 0 0 0 N/A N/A
6. Other Operating Expenses 95,980 89,561 86,971 73,838 71,788 7.53% 7.17%
7. Total Operating Expenses 235,855 221,325 203,689 222,707 194,795 4.90% 6.57%
8. Depreciation & Amortization 53,431 50,663 48,149 43,037 48,995 2.19% 5.46%
9. Total Expenses & Depreciation 289,286 271,988 251,838 265,744 243,790 4.37% 6.36%
10. Total Operating Taxes 32,336 45,866 35,869 36,264 38,321 -4.16% -29.50%
11. Total Expenses, Depr. & Taxes 321,622 317,854 287,707 302,008 282,111 3.33% 1.19%
12. Operating Income $56,935 $56,335 $77,816 $44,202 $31,418 16.02% 1.07%
13. Net Plant Investment $1,159,116 $1,095,902 $979,465 $919,011 $815,578 9.19% 5.77%
14. Oper. Exp. as a % of Total Revenue 62.30% 59.15% 55.73% 64.33% 62.13% 0.07% 5.33%
15. Net Plt. Investment per $ of Revenue $3.06 $2.93 $2.68 $2.65 $2.60 4.16% 4.44%
16. Number of Customers Served (000s included):
17. Residential 101,782 101,515 101,301 101,068 100,807 0.24% 0.26%
18. Commercial 15,711 15,638 15,579 15,532 15,398 0.50% 0.47%
19. Industrial 51 52 51 50 52 -0.48% -1.92%
20. Other 2,234 2,251 2,245 2,246 2,252 -0.20% -0.76%
21. Total Number of Customers 119,778 119,456 119,176 118,896 118,509 0.27% 0.27%
22. Annual Sales Volume: (Millions kWh)
23. Residential 1,630 1,629 1,578 1,503 1,625 0.08% 0.06%
24. Commercial 850 825 893 864 794 1.72% 3.03%
25. Industrial 1,759 1,855 1,703 1,614 1,618 2.11% -5.18%
26. Other 139 138 136 134 140 -0.18% 0.72%
27. Total Sales 4,378 4,447 4,310 4,115 4,177 1.18% -1.55%
28. Estimated Overall Rate of Return 5.99% 6.48% 9.56% 5.90% 4.46% 7.65% -7.56%
29. Estimated Return on Common Equity 7.09% 7.97% 13.21% 6.37% 3.68% 17.81% -11.04%
30. Common Equity Ratio 52.80% 53.24% 55.09% 54.90% 55.16% -1.09% -0.83%
31. Debt Ratio 47.20% 46.07% 43.44% 43.55% 43.24% 2.21% 2.45%
32. Estimated Pretax Interest Coverage
Ratio (Times) 3.50 4.07 5.05 3.41 2.91 4.72% -14.00%
33. LAST RATE CASE (Docket No. E-22, Sub 532) Authorized Returns: Common Equity 9.90%; Overall 7.367%; Equity Ratio 51.75%; Date of Order 12-22-16
Rate Case Prior to E-22, Sub 532 (Docket No. E-22, Sub 479): Common Equity 10.20%; Overall 7.80%; Equity Ratio 51.00%; Date of Order 12-21-12
Notes: [1] North Carolina retail jurisdictional revenue equates to 5% of total company electric utility revenue.
[2] Net Plant Investment reflects net plant in service.
[3] Source of Data: NCUC ES-1 Reports.
[4] ROEs for the 12 months ended: 09-30-2015, 06-30-2015, and 03-31-2015, are respectively: 7.03%, 7.69%, and 8.66%.
[5] The results for the 12 months ended December 30, 2013, reflect income tax reductions related to (i) an adjustment to North Carolina state
accumulated deferred income taxes to recognize tax rate reductions effective January 1, 2014 and January 1, 2015, as enacted in 2013
North Carolina Session Law 2013-316 (HB 998), and (ii) a change in the Company’s determination of North Carolina state income taxes
which DNCP reported on amended returns filed in 2013 that have been reviewed by the North Carolina Department of Revenue (NCDOR).
The NCDOR notified DNCP in September 2015 that it was denying a portion of the refund claims reported on the amended returns.
DNCP filed a petition for appeal with the North Carolina Office of Administrative Hearings on August 26, 2016.
[6] N/A denotes that the data is not available or not applicable or that information is, essentially, unmeaningful.
17
VIRGINIA ELECTRIC AND POWER COMPANY, d/b/a
Growth Rate
DOMINION NORTH CAROLINA POWER
SELECTED FINANCIAL AND OPERATIONAL DATA
North Carolina Retail Jurisdiction
(Amounts in Thousands)
18
Annual
Growth Rate
Line December December December December December Four Current
No. Item 2015 2014 2013 2012 2011 Year Year
(a) (b) (c) (d) (e) (f) (g) (h)
1. Operating Revenue:
2. Residential $406,216 $467,336 $422,542 $380,054 $424,085 -1.07% -13.08%
3. Commercial 228,179 272,706 238,817 213,940 246,253 -1.89% -16.33%
4. Industrial 21,292 24,071 19,728 17,001 24,123 -3.07% -11.55%
5. Public Authorities 757 902 539 368 594 6.25% -16.08%
6. Other 150,866 152,158 145,998 103,451 87,763 14.50% -0.85%
7. Total Operating Revenue 807,310 917,173 827,624 714,814 782,818 0.77% -11.98%
8. Cost of Gas 293,410 437,903 384,368 308,243 388,316 -6.77% -33.00%
9. Margin 513,900 479,270 443,256 406,571 394,502 6.83% 7.23%
10. O & M Expenses 208,912 201,943 182,050 171,959 161,829 6.59% 3.45%
11. Other Deductions 168,836 152,920 147,804 136,685 130,831 6.58% 10.41%
12. Operating Income $136,152 $124,407 $113,402 $97,927 $101,842 7.53% 9.44%
13. Net Plant Investment $2,992,883 $2,865,622 $2,479,348 $2,016,408 $1,750,571 14.35% 4.44%
14. Operating Exp. as a % of Margin 40.65% 42.14% 41.07% 42.29% 41.02% -0.23% -3.54%
15. Net Plt. Investment per $ of Margin $5.82 $5.98 $5.59 $4.96 $4.44 7.00% -2.68%
16. Gas Delivered in DTs (000s omitted):
17. Residential 35,594 40,913 38,172 31,160 33,639 1.42% -13.00%
18. Commercial 28,763 31,301 28,699 25,152 25,797 2.76% -8.11%
19. Industrial 3,349 3,264 2,748 2,586 3,228 0.92% 2.60%
20. Public Authorities 70 74 67 41 61 3.50% -5.41%
21. Other 340,353 278,567 280,088 226,082 155,996 21.54% 22.18%
22. Total DTs 408,129 354,119 349,774 285,021 218,721 16.88% 15.25%
23. Number of Customers (000s included):
24. Residential 643,044 633,342 623,719 617,097 608,886 1.37% 1.53%
25. Commercial 68,039 67,189 66,200 65,507 64,718 1.26% 1.27%
26. Industrial 1,095 1,094 1,094 1,079 1,090 0.11% 0.09%
27. Public Authorities 1,800 1,800 1,807 572 1,576 3.38% 0.00%
28. Other 609 609 603 602 573 1.53% 0.00%
29. Total Number of Customers 714,587 704,034 693,423 684,857 676,843 1.37% 1.50%
30. Estimated Overall Rate of Return 6.05% 5.99% 6.80% 7.44% 8.01% -6.78% 1.00%
31. Estimated Return on Common Equity 8.72% 8.78% 10.51% 11.48% 10.87% -5.36% -0.68%
32. Common Equity Ratio 43.40% 43.92% 44.12% 46.60% 51.32% -4.10% -1.18%
33. Debt Ratio 56.60% 56.08% 55.88% 53.40% 48.68% 3.84% 0.93%
34. Estimated Pretax Interest Coverage
Ratio (Times) 3.80 4.02 4.54 5.23 4.79 -5.62% -5.47%
35. LAST RATE CASE Authorized Returns: Common Equity 10.00%; Overall 7.51%; Equity Ratio 50.66%; Date of Order 12-17-13
(Docket No. G-9, Sub 631)
Notes:
[1] North Carolina retail jurisdictional revenue equates to approximately 70% of total company gas utility revenue.
[2] Net Plant Investment reflects net plant in service.
[3] Source of Data: Shareholders' reports and the NCUC GS-1 Reports.
[4] ROEs for the 12 months ended: 09-30-2015, 06-30-2015, and 03-31-2015, are respectively: 8.96%, 8.85%, and 8.96%.
[5] On Lines 20 and 27, the decrease from December 2011 to December 2012 in the public authorities data was primarily due to the classification
in 2012 of the Goldsboro Housing Authority customers, who were individually metered during the period September-December 2012,
to the residential category. All public authorities customers, whether individually metered or master metered, are billed on Piedmont's
residential rate structure. In late 2013, Piedmont determined that the classification of such customers as public authorities is more appropriate.
12 Months Ended
(Amounts in Thousands)
PIEDMONT NATURAL GAS COMPANY, INC.
SELECTED FINANCIAL AND OPERATIONAL DATA
North Carolina Jurisdiction
Line December December December December December Four Current
No. Item 2015 2014 2013 2012 2011 Year Year
(a) (b) (c) (d) (e) (f) (g) (h)
1. Operating Revenue:
2. Residential $283,071 $358,736 $348,597 $265,412 $293,480 -0.90% -21.09%
3. Commercial 106,957 137,234 130,561 100,655 115,454 -1.89% -22.06%
4. Industrial 17,700 18,516 16,625 14,780 17,104 0.86% -4.41%
5. Public Authorities 0 0 0 0 0 N/A N/A
6. Resale 0 0 0 0 2 N/A N/A
7. Other 31,304 37,314 32,420 28,622 26,963 3.80% -16.11%
8. Total Operating Revenue 439,032 551,800 528,203 409,469 453,003 -0.78% -20.44%
9. Cost of Gas 191,240 309,364 290,868 177,963 226,553 -4.15% -38.18%
10. Margin 247,792 242,436 237,335 231,506 226,450 2.28% 2.21%
11. O & M Expenses 92,767 88,417 87,278 86,512 83,747 2.59% 4.92%
12. Other Deductions 88,927 86,125 83,581 79,372 76,898 3.70% 3.25%
13. Operating Income $66,098 $67,894 $66,476 $65,622 $65,805 0.11% -2.65%
14. Net Plant Investment $1,060,721 $902,478 $861,612 $850,254 $829,145 6.35% 17.53%
15. Operating Exp. as a % of Margin 37.44% 36.47% 36.77% 37.37% 36.98% 0.31% 2.66%
16. Net Plt. Investment per $ of Margin $4.28 $3.72 $3.63 $3.67 $3.66 3.99% 15.05%
17. Gas Delivered in DTs (000s omitted):
18. Residential 27,004 31,290 28,753 23,008 24,895 2.05% -13.70%
19. Commercial 14,265 15,877 14,540 12,357 12,916 2.51% -10.15%
20. Industrial 3,419 2,923 2,762 2,920 2,603 7.05% 16.97%
21. Public Authorities 0 0 0 0 0 N/A N/A
22. Resale 0 0 0 0 0 N/A N/A
23. Other 44,516 41,220 37,421 34,029 29,776 10.58% 8.00%
24. Total DTs 89,204 91,310 83,476 72,314 70,190 6.18% -2.31%
25. Number of Customers (000s included):
26. Residential 490,123 477,674 465,596 454,543 445,276 2.43% 2.61%
27. Commercial 43,493 43,028 42,284 41,839 41,499 1.18% 1.08%
28. Industrial 220 199 162 168 175 5.89% 10.55%
29. Public Authorities 0 0 0 0 0 N/A N/A
30. Resale 0 0 0 0 0 N/A N/A
31. Other 464 453 464 474 465 -0.05% 2.43%
32. Total Number of Customers 534,300 521,354 508,506 497,024 487,415 2.32% 2.48%
33. Estimated Overall Rate of Return 7.72% 8.84% 9.05% 8.87% 9.12% -4.08% -12.67%
34. Estimated Return on Common Equity 9.21% 10.89% 11.40% 11.23% 11.66% -5.73% -15.43%
35. Common Equity Ratio 58.82% 59.07% 57.82% 56.35% 55.66% 1.39% -0.42%
36. Debt Ratio 41.18% 40.93% 42.18% 43.65% 44.34% -1.83% 0.61%
37. Estimated Pretax Interest Coverage
Ratio (Times) 4.80 5.42 5.42 5.11 5.00 -1.02% -11.44%
38. LAST RATE CASE (Docket No. G-5, Sub 565) Authorized Returns: Common Equity 9.70%; Overall 7.53%; Equity Ratio 52.00%; Date of Order 10-28-16
Rate Case Prior to G-5, Sub 565 (Docket No. G-5, Sub 495): Common Equity 10.60%; Overall 8.54%; Equity Ratio 54.00%; Date of Order 10-24-08
Notes: [1] North Carolina retail jurisdictional revenue equates to 100% of total company gas utility service revenue.
[2] Net Plant Investment reflects net plant in service.
[3] Source of Data: Shareholders' Reports and the NCUC GS-1 Reports.
[4] ROEs for the 12 months ended: 09-30-2015, 06-30-2015, and 03-31-2015, are respectively: 9.31%, 10.32%, and 10.98%.
[5] N/A denotes that the data is not available or not applicable or that information is, essentially, unmeaningful.
19
PUBLIC SERVICE COMPANY OF NORTH CAROLINA, INC.
SELECTED FINANCIAL AND OPERATIONAL DATA
North Carolina Jurisdiction
(Amounts in Thousands)
12 Months Ended
Annual
Growth Rate
d/b/a PSNC Energy
Part IV
Telecommunications Companies
Annual Report Filings
Telecommunications Companies 2015 Annual Report Filings1
A. The following companies provided the Commission with links to their 2015 Annual
Report filings, as submitted to the SEC:
􀆔􉐀􀀃􀍂 BellSouth Telecommunications, LLC, d/b/a AT&T North Carolina –
http://www.sec.gov/Archives/edgar/data/732717/000073271716000147/0000732717-16-
000147-index.htm
􀆔􉐀􀀃􀌀 􀀦􂘀􀁄􄐀􀁕􅔀􀁒􅈀􀁏􄼀􀁌􄰀􀁑􅄀􀁄􄐀􀀃􀌀 􀀷􃜀􀁈􄠀􀁏􄼀􀁈􄠀􀁓􅌀􀁋􄬀􀁒􅈀􀁑􅄀􀁈􄠀􀀃􀌀 􀁄􄐀􀁑􅄀􀁇􄜀􀀃􀌀 􀀷􃜀􀁈􄠀􀁏􄼀􀁈􄠀􀁊􄨀􀁕􅔀􀁄􄐀􀁓􅌀􀁋􄬀􀀃􀌀 􀀦􂘀􀁒􅈀􀁐􅀀􀁓􅌀􀁄􄐀􀁑􅄀􀁜􅰀􀀃􀌀 􀀯􂼀􀀯􂼀􀀦􂘀􀀏􀼀􀀃􀌀 􀁇􄜀􀀒􁈀􀁅􄔀􀀒􁈀􀁄􄐀􀀃􀌀 􀀦􂘀􀁈􄠀􀁑􅄀􀁗􅜀􀁘􅠀􀁕􅔀􀁜􅰀􀀯􂼀􀁌􄰀􀁑􅄀􀁎􄸀􀀞􁸀􀀃􀌀 􀀦􂘀􀁈􄠀􀁑􅄀􀁗􅜀􀁕􅔀􀁄􄐀􀁏􄼀􀀃􀍔
Telephone Company, d/b/a CenturyLink; and Mebtel, Inc., d/b/a CenturyLink –
http://www.sec.gov/Archives/edgar/data/18926/000001892616000047/ctl-2015123110k.htm
􀆔􉐀􀀃􀌀􀀃􀌀􀀩􂤀􀁕􅔀􀁒􅈀􀁑􅄀􀁗􅜀􀁌􄰀􀁈􄠀􀁕􅔀􀀃􀌀􀀦􂘀􀁒􅈀􀁐􅀀􀁐􅀀􀁘􅠀􀁑􅄀􀁌􄰀􀁆􄘀􀁄􄐀􀁗􅜀􀁌􄰀􀁒􅈀􀁑􅄀􀁖􅘀􀀃􀌀􀁒􅈀􀁉􄤀􀀃􀌀􀁗􅜀􀁋􄬀􀁈􄠀􀀃􀌀􀀦􂘀􀁄􄐀􀁕􅔀􀁒􅈀􀁏􄼀􀁌􄰀􀁑􅄀􀁄􄐀􀁖􅘀􀀏􀼀􀀃􀌀􀀬􂰀􀁑􅄀􀁆􄘀􀀑􁄀􀀃􀌓–
https://www.sec.gov/Archives/edgar/data/20520/000002052016000076/ftr-
20151231x10k.htm
􀆔􉐀􀀃􀌀􀀃􀌀􀀹􃤀􀁈􄠀􀁕􅔀􀁌􄰀􀁝􅴀􀁒􅈀􀁑􅄀􀀃􀌀􀀶􃘀􀁒􅈀􀁘􅠀􀁗􅜀􀁋􄬀􀀃􀌀􀀬􂰀􀁑􅄀􀁆􄘀􀀑􁄲2 –
https://www.sec.gov/Archives/edgar/data/732712/000119312516473367/d35513d
10k.htm
􀆔􉐠 Windstream Concord Telephone, Inc.; Windstream Lexcom Communications, Inc.;and
Windstream North Carolina, LLC –
https://www.sec.gov/Archives/edgar/data/1282266/000128226616000059/a2015
10k.htm
B. The following companies provided the Commission with copies of their 2015
audited financial statements:
􀆔􉐀􀀃􀌀􀀱􃄀􀁒􅈀􀁕􅔀􀁗􅜀􀁋􄬀􀀃􀌀􀀶􃘀􀁗􅜀􀁄􄐀􀁗􅜀􀁈􄠀􀀃􀌀􀀷􃜀􀁈􄠀􀁏􄼀􀁈􄠀􀁓􅌀􀁋􄬀􀁒􅈀􀁑􅄀􀁈􄠀􀀃􀌀􀀦􂘀􀁒􅈀􀁐􅀀􀁓􅌀􀁄􄐀􀁑􅄀􀁜􅰀􀀏􀼀􀀃􀌀􀁇􄜀􀀒􁈀􀁅􄔀􀀒􁈀􀁄􄐀􀀃􀌀􀀱􃄀􀁒􅈀􀁕􅔀􀁗􅜀􀁋􄬀􀀃􀌀􀀶􃘀􀁗􅜀􀁄􄐀􀁗􅜀􀁈􄠀􀀃􀌀􀀦􂘀􀁒􅈀􀁐􅀀􀁐􅀀􀁘􅠀􀁑􅄀􀁌􄰀􀁆􄘀􀁄􄐀􀁗􅜀􀁌􄰀􀁒􅈀􀁑􅄀􀁖􅘁
􀆔􉐀􀀃􀌀􀀦􂘀􀁌􄰀􀁗􅜀􀁌􄰀􀁝􅴀􀁈􄠀􀁑􅄀􀁖􅘀􀀃􀌀􀀷􃜀􀁈􄠀􀁏􄼀􀁈􄠀􀁓􅌀􀁋􄬀􀁒􅈀􀁑􅄀􀁈􄠀􀀃􀌀􀀦􂘀􀁒􅈀􀁐􅀀􀁓􅌀􀁄􄐀􀁑􅄀􀁜􅰀􀀏􀼀􀀃􀌀􀁇􄜀􀀒􁈀􀁅􄔀􀀒􁈀􀁄􄐀􀀃􀌀􀀦􂘀􀁒􅈀􀁐􅀀􀁓􅌀􀁒􅈀􀁕􅔀􀁌􄰀􀁘􅠀􀁐􅀳3
1 The deadline for a price plan regulated company to either provide its annual report to the Commission or to otherwise
satisfy its annual reporting obligations under Commission Rule R1-32, Subsection (e1) is as soon as possible after the close
of the calendar year, but in no event later than the 30th day of April each year for the preceding calendar year.
2 Verizon South, Inc. Knotts Island Exchange.
3 Such report has been provided as confidential and proprietary information.
21
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Part V - Appendix A
Quarterly Review Electronic Distribution List
Commission Staff
Patrick Buffkin
Ellen Burns
Kimberly Duffley
Catherine Eastwood
Corrie Foster
Bill Gilmore
Len Green
Freda Hilburn
Lemuel Hinton
M. Lynn Jarvis
Kim Jones
Bliss Kite
Steve McDowell
Bridget Paschal
George Sessoms
Sam Watson
Fenge Zhang
Public Staff
Christopher Ayers
David Drooz
David Furr
Carl Goolsby
Robert Hinton
Jan Larsen
Mike Maness
James McLawhorn
Attorney General’s Office
Margaret Force
Others
David Baker
North Carolina Department of Revenue
Bruce Barkley
Vice President - Regulatory Affairs,
Rates and Gas Cost Accounting
Piedmont Natural Gas Company, Inc.
Laura Bateman, Manager
Carolinas Rates & Regulatory Strategy
Duke Energy
Robert H. Bennink, Jr.
Bennink Law Office
Brett Breitschwerdt
McGuire Woods LLP
Matthew L. Dosch
Senior Vice President of
External Affairs
Comporium Communications
Rick Feathers
Associate General Counsel
N.C. Electric Corporation
Mary Lynne Grigg
McGuire Woods LLP
Donald R. Hoover
Hoover & Hoover CPAs
Greg Locke
ElectriCities of North Carolina
William McAulay, Vice President
Economic Development,
Governmental and Regulatory Affairs
Public Service Company of NC, Inc.
Ralph McDonald
Bailey & Dixon, LLP
Sharon Miller
Carolina Utility Customers
Association, Inc.
Kevin O’Donnell
Nova Energy Consultants
Adam Olls
Bailey & Dixon, LLP
Stan Pace, Director
State Government Relations
Frontier Communications of
the Carolinas Inc.
Robert F. Page
Crisp, Page & Currin, L.L.P.
Candace A. Paton, Lead Analyst
Rates & Regulatory Affairs
Public Service Company of NC, Inc.
Pia K. Powers
Manager Regulatory Affairs
Piedmont Natural Gas
Company, Inc.
Jo Anne Sanford
Sanford Law Office, PLLC
Carol Shrum, Vice President Rates
Duke Energy Corporation
Heather Shirley Smith
Deputy General Counsel
Duke Energy Carolinas, LLC
Robert Smith, Director-External Affairs
BellSouth Telecommunications, Inc.,
d/b/a AT&T North Carolina
Lawrence Somers
Deputy General Counsel
Duke Energy Corporation
State Library of North Carolina
Mark C. Stevens
Director – Regulatory Accounting
Virginia Electric and Power Company,
d/b/a Dominion North Carolina Power
Laura A. Sykora
Regulatory Affairs Manager
CenturyLink
David Tsai
Regulatory Affairs Manager
Duke Energy
Royster M. Tucker, Jr.
North State Telephone Company,
d/b/a North State Communications
Susan Warner
Bailey & Dixon, LLP
Bob Wells, Executive Director
North Carolina Telephone Alliance
Bettye J. Willis
Regional Vice President
State Government Affairs
Windstream Communications, Inc.
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