Duke Energy : Kentucky files request for regulatory review of its natural gas distribution rates

• Investments in infrastructure projects to enhance natural gas reliability and resiliency in growing northern counties.

• Seeks permission to increase natural gas distribution rates by approximately $15.2 million.

CINCINNATI - Following significant investments to make Northern Kentucky's natural gas distribution system more reliable and resilient for customers, Duke Energy Kentucky today filed a request with its state regulator, the Kentucky Public Service Commission, to review the company's natural gas rates.

These investments include the installation of new infrastructure, including natural gas pipelines, retiring and replacing equipment in order to ensure customers have the natural gas service they expect and deserve.

'In Northern Kentucky, it is critical that we continue to make smart investments to improve the reliability and resiliency of our natural gas delivery system,' said Amy Spiller, president of Duke Energy Ohio/Kentucky. 'These are strategic investments in our infrastructure and our region that are providing benefits to our customers today and for decades to come.'

Multimillion-dollar investments, not operational costs, main drivers for increase

Duke Energy Kentucky has invested nearly $190 million in a variety of capital projects across Northern Kentucky since it last asked regulators to approve a natural gas base rate increase in 2018. And, since that time, the company's costs to operate and maintain its system have remained nearly flat.

The company's recent multimillion-dollar capital investments have improved the reliability and resiliency of its natural gas delivery system across Northern Kentucky. Key investments include:

• The Boone County natural gas infrastructure project, under construction since 2020, spans 7 miles from Turfway Road ultimately ending on Camp Ernst Road. The first portion of this project went into service at the end of 2020, and the second segment is scheduled to be in service this winter. This project was constructed in response to load growth and to enhance system reliability.

• The Three Mile Station project involved the replacement of an existing natural gas regulator station in Wilder, Ky. The main components of the project include engineering design, procurement, and construction of the replacement facility.

Impact on customers' bills

As part of its request, Duke Energy Kentucky seeks approval to increase its current natural gas base rates by approximately $15.2 million. The company delivers natural gas to over 100,000 customers in seven counties in Northern Kentucky.

Under the company's proposal, residential customers who use an average of 57 100-cubic-feet (Ccf) per month will see an $8.77 - or 12.7% - increase on their monthly natural gas bills, from $69.31 to $78.08.

This proposed increase will vary depending on the amount of natural gas a customer uses, a customer's rate type and the prevailing cost of the natural gas commodity.

The company is also seeking approval of a new mechanism to track costs associated with the company's obligation to adhere to governmental directives or mandates (Rider GMA). These mandates include changes in federal or state tax rates, and those promulgated by federal governmental entities and agencies that require the company to upgrade or replace our natural gas delivery infrastructure. Rider GMA would act as either a credit or a charge to customers, depending upon the impact of the governmental mandate. Duke Energy Kentucky's proposed Rider GMA will be applicable to all natural gas customers.

Next steps

Once the Kentucky Public Service Commission deems the filing to be complete, they will set up a schedule for upcoming activities associated with the rate review case. The process will include opportunities for customers and other stakeholders to learn more about the company's request and provide testimony to be included in the docket. Duke Energy Kentucky expects the rate review process to last until the end of 2021.

The company's application and supporting documentation, as well as any other entries related to the review, can be found under Case No. 2021-00190 on the Kentucky Public Service Commission's website. Additional information on Duke Energy Kentucky's application can be found at duke-energy.com/Gas-KY.

Duke Energy Ohio/Kentucky

Duke Energy Ohio/Kentucky, a subsidiary of Duke Energy, provides electric service to about 860,000 residential, commercial and industrial customers in a 3,000-square-mile service area, and natural gas service to approximately 538,000 customers.

Duke Energy (NYSE: DUK), a Fortune 150 company headquartered in Charlotte, N.C., is one of America's largest energy holding companies. Its electric utilities serve 7.9 million customers in North Carolina, South Carolina, Florida, Indiana, Ohio and Kentucky, and collectively own 51,000 megawatts of energy capacity. Its natural gas unit serves 1.6 million customers in North Carolina, South Carolina, Tennessee, Ohio and Kentucky. The company employs 27,500 people.

Duke Energy is executing an aggressive clean energy strategy to create a smarter energy future for its customers and communities - with goals of at least a 50 percent carbon reduction by 2030 and net-zero carbon emissions by 2050. The company is a top U.S. renewable energy provider, on track to operate or purchase 16,000 megawatts of renewable energy capacity by 2025. The company also is investing in major electric grid upgrades and expanded battery storage, and exploring zero-emitting power generation technologies such as hydrogen and advanced nuclear.

Duke Energy was named to Fortune's 2021 'World's Most Admired Companies' list and Forbes' 'America's Best Employers' list. More information is available at duke-energy.com. The Duke Energy News Center contains news releases, fact sheets, photos and videos. Duke Energy's illumination features stories about people, innovations, community topics and environmental issues. Follow Duke Energy on Twitter, LinkedIn, Instagram and Facebook.

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