v2.4.0.8

Acquisitions and Dispositions | 9 Months Ended
--- | ---
Sep. 30, 2014
Business Combinations [Abstract] |
Acquisitions and Dispositions | ACQUISITIONS AND DISPOSITIONS Purchase of NCEMPA's Generation On September 5, 2014, Duke Energy Progress executed an agreement to purchase North Carolina Eastern Municipal Power Agency’s (NCEMPA) ownership interests in certain generating assets jointly owned with and operated by Duke Energy Progress. The agreement provides for the acquisition of a total of approximately 700 megawatts (MW) at Brunswick Nuclear Station, Shearon Harris Nuclear Station (Harris), Mayo Steam Station and Roxboro Steam Station. The purchase price for the ownership interest and fuel and spare parts inventory is approximately $1.2 billion. Under the agreement, Duke Energy Progress and NCEMPA will enter into a 30-year wholesale power supply agreement to continue meeting the needs of NCEMPA’s customers. There are several conditions precedent including state and federal regulatory approvals and legislative action required prior to completing the transaction. On October 10, 2014, Duke Energy Progress filed with the FERC for approval to purchase NCEMPA's interests in the generation assets. The agreement requires the transaction to be completed by the end of 2016. Midwest Generation Exit On August 21, 2014, Duke Energy Commercial Enterprises, Inc., an indirect wholly owned subsidiary of Duke Energy Corporation, and Duke Energy SAM, LLC, a wholly owned subsidiary of Duke Energy Ohio, entered into a PSA with a subsidiary of Dynegy whereby Dynegy will acquire Duke Energy Ohio’s Disposal Group for approximately $2.8 billion in cash subject to adjustments at closing for changes in working capital and capital expenditures. The completion of the transaction is conditioned on expiration or termination of any applicable waiting period under the Hart-Scott-Rodino Antitrust Improvements Act of 1976, approval by FERC, and the release of certain credit support obligations. Closing is expected to be completed in the fourth quarter of 2014 or the first quarter of 2015. The Disposal Group was included in the Commercial Power segment. The following table presents information related to the Duke Energy Ohio generation plants included in the Disposal Group.
Facility | Plant Type |  | Primary Fuel |  | Location |  | Total Average MW Capacity(c) |  |  | Owned Average MW Capacity(c) |  |  | Ownership Interest |
Stuart(a)(b) | Fossil Steam |  | Coal |  | OH |  | 2,318 |  |  | 904 |  |  | 39 | %
Zimmer(a) | Fossil Steam |  | Coal |  | OH |  | 1,338 |  |  | 622 |  |  | 46.5 | %
Hanging Rock | Combined Cycle |  | Gas |  | OH |  | 1,274 |  |  | 1,274 |  |  | 100 | %
Miami Fort (Units 7 and 8)(a) | Fossil Steam |  | Coal |  | OH |  | 1,020 |  |  | 653 |  |  | 64 | %
Conesville(a)(b) | Fossil Steam |  | Coal |  | OH |  | 780 |  |  | 312 |  |  | 40 | %
Washington | Combined Cycle |  | Gas |  | OH |  | 637 |  |  | 637 |  |  | 100 | %
Fayette | Combined Cycle |  | Gas |  | PA |  | 640 |  |  | 640 |  |  | 100 | %
Killen(a)(b) | Fossil Steam |  | Coal |  | OH |  | 618 |  |  | 204 |  |  | 33 | %
Lee | Combustion Turbine |  | Gas |  | IL |  | 640 |  |  | 640 |  |  | 100 | %
Dick's Creek | Combustion Turbine |  | Gas |  | OH |  | 136 |  |  | 136 |  |  | 100 | %
Miami Fort | Combustion Turbine |  | Oil |  | OH |  | 68 |  |  | 68 |  |  | 100 | %
Total Midwest Generation |  |  |  |  |  |  | 9,469 |  |  | 6,090 |  |  |
(a) | Jointly owned with Ohio Power Company and/or The Dayton Power & Light Company.
(b) | Station is not operated by Duke Energy Ohio.
(c) | Average MW capacity is calculated as the average of winter capacity and summer capacity.
The Disposal Group also includes a retail sales business owned by Duke Energy. In the second quarter of 2014, Duke Energy Ohio removed Ohio Valley Electric Corporation (OVEC) from the Disposal Group as it no longer intended to sell it with the Disposal Group. Duke Energy Ohio has requested cost-based recovery of its contractual entitlement in OVEC in its 2014 Electric Security Plan (ESP) application filed on May 29, 2014. See Note 4 for information related to the 2014 ESP. Duke Energy Ohio had triggered held for sale accounting treatment on March 31, 2014. The assets and associated liabilities of the Disposal Group are classified as held for sale in Duke Energy's and Duke Energy Ohio's Condensed Consolidated Balance Sheet at September 30, 2014. Beginning in the third quarter of 2014, the results of operations of the Disposal Group are required to be classified as discontinued operations for current and prior periods in the accompanying Condensed Consolidated Statements of Operations and Comprehensive Income. Certain costs that are not material have remained in continuing operations that may be eliminated as a result of the sale. Results of discontinued operations were as follows. Duke Energy
| Three Months Ended September 30, |  | Nine Months Ended September 30,
(in millions) | 2014 |  |  | 2013 |  |  | 2014 |  |  | 2013 |
Operating Revenues | $ | 620 |  |  | $ | 491 |  |  | $ | 1,233 |  |  | $ | 1,369 |
Estimated gain (loss) on disposition | 460 |  |  | — |  |  | (847 | ) |  | — |
Income (loss) before income taxes | $ | 623 |  |  | $ | 82 |  |  | $ | (864 | ) |  | $ | 126 |
Income tax expense (benefit) | 218 |  |  | 34 |  |  | (321 | ) |  | 43 |
Income (loss) from discontinued operations of the Disposal Group | 405 |  |  | 48 |  |  | (543 | ) |  | 83 |
Other, net of tax(a) | (27 | ) |  | 14 |  |  | (35 | ) |  | (1 | )
Income (Loss) from Discontinued Operations, net of tax | $ | 378 |  |  | $ | 62 |  |  | $ | (578 | ) |  | $ | 82 |
(a) | Other discontinued operations relates to prior sales of businesses and includes indemnifications provided for certain legal, tax and environmental matters, and foreign currency translation adjustments.
Duke Energy Ohio
| Three Months Ended September 30, |  | Nine Months Ended September 30,
(in millions) | 2014 |  |  | 2013 |  |  | 2014 |  |  | 2013 |
Operating Revenues | $ | 536 |  |  | $ | 389 |  |  | $ | 853 |  |  | $ | 1,054 |
Estimated gain (loss) on disposition | 466 |  |  | — |  |  | (878 | ) |  | — |
Income (loss) before income taxes | $ | 647 |  |  | $ | 65 |  |  | $ | (917 | ) |  | $ | 71 |
Income tax expense (benefit) | 234 |  |  | 30 |  |  | (320 | ) |  | 32 |
Income (Loss) from Discontinued Operations, net of tax | $ | 413 |  |  | $ | 35 |  |  | $ | (597 | ) |  | $ | 39 |
The Duke Energy and Duke Energy Ohio held for sale assets include net pretax impairments of approximately $847 million and $878 million, respectively, for the nine months ended September 30, 2014. During the first quarter of 2014 an impairment was recorded to write-down the carrying amount of the assets to the estimated fair value of the business, less estimated costs to sell. For the three months ended September 30, 2014, a reversal of the pretax impairments was recorded of approximately $460 million and $466 million for Duke Energy and Duke Energy Ohio, respectively, based on the expected selling price to Dynegy less cost to sell. These losses and gains were included in Income (Loss) from Discontinued Operations, net of tax in the Condensed Consolidated Statements of Operations and Comprehensive Income. The impairment will be updated, if necessary, based on the final execution of the purchase sale agreement and any changes in estimated fair value as additional information related to the potential transaction becomes available. Commercial Power has a revolving credit agreement (RCA) that is used to support the operations of the nonregulated Midwest generation business. Interest expense associated with the RCA has been allocated to discontinued operations. No other interest expense related to corporate level debt has been allocated to discontinued operations. The following table presents the carrying values of the major classes of Assets held for sale and Liabilities associated with assets held for sale included in the Disposal Group in the Condensed Consolidated Balance Sheets. Amounts included in the following table exclude certain other disposal groups which are not material and accordingly may not agree to amounts presented in the Duke Energy Condensed Consolidated Balance Sheets.
| September 30, 2014
(in millions) | Duke Energy |  |  | Duke Energy Ohio |
Current assets | $ | 335 |  |  | $ | 284 |
Investments and other assets | 43 |  |  | 38 |
Property, plant and equipment | 2,675 |  |  | 2,644 |
Total assets held for sale | $ | 3,053 |  |  | $ | 2,966 |
Current liabilities | $ | 284 |  |  | $ | 269 |
Deferred credits and other liabilities | 57 |  |  | 57 |
Total liabilities associated with assets held for sale | $ | 341 |  |  | $ | 326 |
Duke Energy Ohio will continue to have transactions with the Disposal Group after the divestiture is complete. Duke Energy Ohio has a power purchase agreement with the Disposal Group, which extends through May 2015, for a portion of its standard service offer (SSO) supply requirement. In addition, for a period of up to 12 months, Duke Energy may provide transition services to Dynegy. Duke Energy will be reimbursed for transition services provided. The continuing cash flows are not expected to be material and are not considered direct cash flows. These arrangements do not allow Duke Energy or Duke Energy Ohio to significantly influence the operations of the Disposal Group once the sale is complete. See Notes 4 and 5 for a discussion of contingencies related to the Disposal Group that will be retained by Duke Energy Ohio subsequent to the sale.

X
- Details
Name: | us-gaap_BusinessCombinationsAbstract
Namespace Prefix: | us-gaap_
Data Type: | xbrli:stringItemType
Balance Type: | na
Period Type: | duration

X
- Definition The entire disclosure for business combinations, including leverage buyout transactions (as applicable), and divestitures. This may include a description of a business combination or divestiture (or series of individually immaterial business combinations or divestitures) completed during the period, including background, timing, and assets and liabilities recognized and reclassified or sold. This element does not include fixed asset sales and plant closings. + References No definition available. + Details
Name: | us-gaap_MergersAcquisitionsAndDispositionsDisclosuresTextBlock
Namespace Prefix: | us-gaap_
Data Type: | nonnum:textBlockItemType
Balance Type: | na
Period Type: | duration