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Regulatory Matters | 12 Months Ended
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Dec. 31, 2020
Regulated Operations [Abstract] |
Regulatory Matters | REGULATORY MATTERS REGULATORY ASSETS AND LIABILITIES The Duke Energy Registrants record regulatory assets and liabilities that result from the ratemaking process. See Note 1 for further information. The following tables present the regulatory assets and liabilities recorded on the Consolidated Balance Sheets of Duke Energy and Progress Energy. See separate tables below for balances by individual registrant.
| Duke Energy |  | Progress Energy |  |  |  |  |  |  |  |  |  |  |  |  |  |
| December 31, |  | December 31, |  |  |  |  |  |  |  |  |  |  |  |  |  |
(in millions) | 2020 |  | 2019 |  | 2020 |  | 2019 |  |  |  |  |  |  |  |  |  |  |  |  |  |
Regulatory Assets |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
AROs – coal ash | $ | 3,408 |  |  | $ | 4,084 |  |  | $ | 1,357 |  |  | $ | 1,843 |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
AROs – nuclear and other | 754 |  |  | 739 |  |  | 685 |  |  | 668 |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Accrued pension and OPEB | 2,317 |  |  | 2,391 |  |  | 875 |  |  | 897 |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Storm cost deferrals | 1,102 |  |  | 1,399 |  |  | 893 |  |  | 1,214 |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Nuclear asset securitized balance, net | 991 |  |  | 1,042 |  |  | 991 |  |  | 1,042 |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Debt fair value adjustment | 950 |  |  | 1,019 |  |  | — |  |  | — |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Retired generation facilities | 417 |  |  | 331 |  |  | 363 |  |  | 266 |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Post-in-service carrying costs (PISCC) and deferred operating expenses | 402 |  |  | 329 |  |  | 51 |  |  | 33 |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Deferred asset – Lee and Harris COLA | 356 |  |  | 388 |  |  | 32 |  |  | 38 |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Hedge costs deferrals | 351 |  |  | 356 |  |  | 148 |  |  | 129 |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Advanced metering infrastructure (AMI) | 311 |  |  | 338 |  |  | 102 |  |  | 114 |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Demand side management (DSM)/Energy Efficiency (EE) | 288 |  |  | 343 |  |  | 241 |  |  | 241 |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Vacation accrual | 221 |  |  | 214 |  |  | 42 |  |  | 41 |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Deferred fuel and purchased power | 213 |  |  | 528 |  |  | 162 |  |  | 305 |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
COR settlement | 128 |  |  | 133 |  |  | 33 |  |  | 35 |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
NCEMPA deferrals | 124 |  |  | 72 |  |  | 124 |  |  | 72 |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Nuclear deferral | 123 |  |  | 107 |  |  | 35 |  |  | 40 |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Derivatives – natural gas supply contracts | 122 |  |  | 117 |  |  | — |  |  | — |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
CEP deferral | 117 |  |  | 76 |  |  | — |  |  | — |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Amounts due from customers | 110 |  |  | 36 |  |  | — |  |  | — |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Qualifying facility contract buyouts | 107 |  |  | 121 |  |  | 107 |  |  | 121 |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Customer connect project | 105 |  |  | 65 |  |  | 55 |  |  | 37 |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Manufactured gas plant (MGP) | 104 |  |  | 102 |  |  | — |  |  | — |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
ABSAT, coal ash basin closure | 98 |  |  | 65 |  |  | 27 |  |  | 15 |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Deferred pipeline integrity costs | 92 |  |  | 79 |  |  | — |  |  | — |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Deferred severance charges | 86 |  |  | — |  |  | 29 |  |  | — |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Incremental COVID-19 expenses | 76 |  |  | — |  |  | 23 |  |  | — |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Other | 589 |  |  | 544 |  |  | 158 |  |  | 141 |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Total regulatory assets | 14,062 |  |  | 15,018 |  |  | 6,533 |  |  | 7,292 |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Less: current portion | 1,641 |  |  | 1,796 |  |  | 758 |  |  | 946 |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Total noncurrent regulatory assets | $ | 12,421 |  |  | $ | 13,222 |  |  | $ | 5,775 |  |  | $ | 6,346 |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Regulatory Liabilities |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Net regulatory liability related to income taxes | $ | 7,368 |  |  | $ | 7,872 |  |  | $ | 2,411 |  |  | $ | 2,595 |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Costs of removal | 5,883 |  |  | 5,756 |  |  | 2,666 |  |  | 2,561 |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
AROs – nuclear and other | 1,512 |  |  | 1,100 |  |  | — |  |  | — |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Provision for rate refunds | 344 |  |  | 370 |  |  | 123 |  |  | 123 |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Accrued pension and OPEB | 177 |  |  | 176 |  |  | — |  |  | — |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Amounts to be refunded to customers | 51 |  |  | 34 |  |  | — |  |  | — |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Deferred fuel and purchased power | 18 |  |  | 1 |  |  | — |  |  | 1 |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Other | 1,053 |  |  | 739 |  |  | 491 |  |  | 275 |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Total regulatory liabilities | 16,406 |  |  | 16,048 |  |  | 5,691 |  |  | 5,555 |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Less: current portion | 1,377 |  |  | 784 |  |  | 640 |  |  | 330 |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Total noncurrent regulatory liabilities | $ | 15,029 |  |  | $ | 15,264 |  |  | $ | 5,051 |  |  | $ | 5,225 |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Descriptions of regulatory assets and liabilities summarized in the tables above and below follow. See tables below for recovery and amortization periods at the separate registrants. AROs – coal ash. Represents deferred depreciation and accretion related to the legal obligation to close ash basins. The costs are deferred until recovery treatment has been determined. See Notes 1 and 9 for additional information. AROs – nuclear and other. Represents regulatory assets or liabilities, including deferred depreciation and accretion, related to legal obligations associated with the future retirement of property, plant and equipment, excluding amounts related to coal ash. The AROs relate primarily to decommissioning nuclear power facilities. The amounts also include certain deferred gains and losses on NDTF investments. See Notes 1 and 9 for additional information. Accrued pension and OPEB. Accrued pension and OPEB represent regulatory assets and liabilities related to each of the Duke Energy Registrants’ respective shares of unrecognized actuarial gains and losses and unrecognized prior service cost and credit attributable to Duke Energy’s pension plans and OPEB plans. The regulatory asset or liability is amortized with the recognition of actuarial gains and losses and prior service cost and credit to net periodic benefit costs for pension and OPEB plans. The accrued pension and OPEB regulatory assets are expected to be recovered primarily over the average remaining service periods or life expectancies of employees covered by the benefit plans. See Note 22 for additional detail. Storm cost deferrals. Represents deferred incremental costs incurred related to major weather-related events. Nuclear asset securitized balance, net. Represents the balance associated with Crystal River Unit 3 retirement approved for recovery by the FPSC on September 15, 2015, and the upfront financing costs securitized in 2016 with issuance of the associated bonds. The regulatory asset balance is net of the AFUDC equity portion. Debt fair value adjustment. Purchase accounting adjustments recorded to state the carrying value of Progress Energy and Piedmont at fair value in connection with the 2012 and 2016 mergers, respectively. Amount is amortized over the life of the related debt. Retired generation facilities. Represents amounts to be recovered for facilities that have been retired and are probable of recovery. Post-in-service carrying costs (PISCC) and deferred operating expenses. Represents deferred depreciation and operating expenses as well as carrying costs on the portion of capital expenditures placed in service but not yet reflected in retail rates as plant in service. Deferred asset – Lee and Harris COLA. Represents deferred costs incurred for the canceled Lee and Harris nuclear projects. Hedge costs deferrals. Amounts relate to unrealized gains and losses on derivatives recorded as a regulatory asset or liability, respectively, until the contracts are settled. AMI. Represents deferred costs related to the installation of AMI meters and remaining net book value of non-AMI meters to be replaced at Duke Energy Carolinas, net book value of existing meters at Duke Energy Florida, Duke Energy Progress and Duke Energy Ohio and future recovery of net book value of electromechanical meters that have been replaced with AMI meters at Duke Energy Indiana. DSM/EE. Deferred costs related to various DSM and EE programs recoverable through various mechanisms. Vacation accrual. Represents vacation entitlement, which is generally recovered in the following year. Deferred fuel and purchased power. Represents certain energy-related costs that are recoverable or refundable as approved by the applicable regulatory body. COR settlement. Represents approved COR settlements that are being amortized over the average remaining lives, at the time of approval, of the associated assets. NCEMPA deferrals. Represents retail allocated cost deferrals and returns associated with the additional ownership interest in assets acquired from NCEMPA in 2015. Nuclear deferral. Includes amounts related to levelizing nuclear plant outage costs, which allows for the recognition of nuclear outage expenses over the refueling cycle rather than when the outage occurs, resulting in the deferral of operations and maintenance costs associated with refueling. Derivatives – natural gas supply contracts. Represents costs for certain long-dated, fixed quantity forward gas supply contracts, which are recoverable through PGA clauses. CEP deferral. Represents deferred depreciation, PISCC and deferred property tax for Duke Energy Ohio Gas capital assets for the Capital Expenditure Program (CEP). Amounts due from customers. Relates primarily to margin decoupling and IMR recovery mechanisms. Qualifying facility contract buyouts. Represents termination payments for regulatory recovery through the capacity clause. Customer connect project. Represents incremental operating expenses and carrying costs on deferred amounts related to the deployment of the new customer information system known as the Customer Connect Project. MGP. Represents remediation costs incurred at former MGP sites and the deferral of costs to be incurred at Duke Energy Ohio's East End and West End sites. ABSAT, coal ash basin closure. Represents deferred depreciation and returns associated with Ash Basin Strategic Action Team (ABSAT) capital assets related to converting the ash handling system from wet to dry. Deferred pipeline integrity costs. Represents pipeline integrity management costs in compliance with federal regulations recovered through a rider mechanism. Deferred severance charges. Represents costs incurred for employees separation from Duke Energy. Incremental COVID-19 expenses. Represents incremental costs related to ensuring continuity and quality of service in a safe manner during the COVID-19 pandemic. Net regulatory liability related to income taxes. Amounts for all registrants include regulatory liabilities related primarily to impacts from the Tax Act. See Note 23 for additional information. Amounts have no immediate impact on rate base as regulatory assets are offset by deferred tax liabilities. Costs of removal. Represents funds received from customers to cover the future removal of property, plant and equipment from retired or abandoned sites as property is retired. Also includes certain deferred gains on NDTF investments. Provisions for rate refunds. Represents estimated amounts due to customers based on recording interim rates subject to refund. Amounts to be refunded to customers. Represents required rate reductions to retail customers by the applicable regulatory body. RESTRICTIONS ON THE ABILITY OF CERTAIN SUBSIDIARIES TO MAKE DIVIDENDS, ADVANCES AND LOANS TO DUKE ENERGY As a condition to the approval of merger transactions, the NCUC, PSCSC, PUCO, KPSC and IURC imposed conditions on the ability of Duke Energy Carolinas, Duke Energy Progress, Duke Energy Ohio, Duke Energy Kentucky, Duke Energy Indiana and Piedmont to transfer funds to Duke Energy through loans or advances, as well as restricted amounts available to pay dividends to Duke Energy. Certain subsidiaries may transfer funds to the Parent by obtaining approval of the respective state regulatory commissions. These conditions imposed restrictions on the ability of the public utility subsidiaries to pay cash dividends as discussed below. Duke Energy Progress and Duke Energy Florida also have restrictions imposed by their first mortgage bond indentures, which in certain circumstances, limit their ability to make cash dividends or distributions on common stock. Amounts restricted as a result of these provisions were not material at December 31, 2020. Duke Energy Indiana has certain dividend restrictions as a result of the agreement entered in January 2021 to sell a minority interest to GIC. Duke Energy Indiana will not declare a dividend prior to the first closing, which is expected to be completed in the second quarter of 2021, and will declare dividends between the first closing and the second closing, which is required to be completed no later than January 2023, in accordance with the sale agreement. See additional information in Note 1. Additionally, certain other subsidiaries of Duke Energy have restrictions on their ability to dividend, loan or advance funds to Duke Energy due to specific legal or regulatory restrictions, including, but not limited to, minimum working capital and tangible net worth requirements. The restrictions discussed below were not a material amount of Duke Energy's and Progress Energy's net assets at December 31, 2020. Duke Energy Carolinas Duke Energy Carolinas must limit cumulative distributions subsequent to mergers to (i) the amount of retained earnings on the day prior to the closing of the mergers, plus (ii) any future earnings recorded. Duke Energy Progress Duke Energy Progress must limit cumulative distributions subsequent to the mergers between Duke Energy and Progress Energy and Duke Energy and Piedmont to (i) the amount of retained earnings on the day prior to the closing of the respective mergers, plus (ii) any future earnings recorded. Duke Energy Ohio Duke Energy Ohio will not declare and pay dividends out of capital or unearned surplus without the prior authorization of the PUCO. Duke Energy Ohio received FERC and PUCO approval to pay dividends from its equity accounts that are reflective of the amount that it would have in its retained earnings account had push-down accounting for the Cinergy merger not been applied to Duke Energy Ohio’s balance sheet. The conditions include a commitment from Duke Energy Ohio that equity, adjusted to remove the impacts of push-down accounting, will not fall below 30% of total capital. Duke Energy Kentucky is required to pay dividends solely out of retained earnings and to maintain a minimum of 35% equity in its capital structure. Duke Energy Indiana Duke Energy Indiana must limit cumulative distributions subsequent to the merger between Duke Energy and Cinergy to (i) the amount of retained earnings on the day prior to the closing of the merger, plus (ii) any future earnings recorded. In addition, Duke Energy Indiana will not declare and pay dividends out of capital or unearned surplus without prior authorization of the IURC. Piedmont Piedmont must limit cumulative distributions subsequent to the acquisition of Piedmont by Duke Energy to (i) the amount of retained earnings on the day prior to the closing of the merger, plus (ii) any future earnings recorded. RATE-RELATED INFORMATION The NCUC, PSCSC, FPSC, IURC, PUCO, TPUC and KPSC approve rates for retail electric and natural gas services within their states. The FERC approves rates for electric sales to wholesale customers served under cost-based rates (excluding Ohio and Indiana), as well as sales of transmission service. The FERC also regulates certification and siting of new interstate natural gas pipeline projects. Duke Energy Carolinas and Duke Energy Progress 2021 Coal Ash Settlement On January 22, 2021, Duke Energy Carolinas and Duke Energy Progress entered into the Coal Combustion Residuals Settlement Agreement (the “CCR Settlement Agreement”) with the North Carolina Public Staff (Public Staff), the North Carolina Attorney General’s Office and the Sierra Club (collectively, the "Settling Parties"), which was filed with the NCUC on January 25, 2021. The CCR Settlement Agreement resolves all coal ash prudence and cost recovery issues in connection with 2019 rate cases filed by Duke Energy Carolinas and Duke Energy Progress with the NCUC, as well as the equitable sharing issue on remand from the 2017 Duke Energy Carolinas and Duke Energy Progress North Carolina rate cases as a result of the December 11, 2020, North Carolina Supreme Court opinion. The settlement also provides clarity on coal ash cost recovery in North Carolina for Duke Energy Carolinas and Duke Energy Progress through January 2030 and February 2030 (the "Term"), respectively. Duke Energy Carolinas and Duke Energy Progress agreed not to seek recovery of approximately $1 billion of systemwide deferred coal ash expenditures, but will retain the ability to earn a debt and equity return during the amortization period, which shall be five years in the pending 2019 North Carolina rate cases and will be set by the NCUC in future rate case proceedings. The equity return and the amortization period on deferred coal ash costs under the 2017 Duke Energy Carolinas and Duke Energy Progress North Carolina rate cases will remain unaffected. The equity return on deferred coal ash costs under the 2019 North Carolina rate cases and future rate cases in North Carolina will be set at 150 basis points lower than the authorized return on equity then in effect, with a capital structure composed of 48% debt and 52% equity. Duke Energy Carolinas and Duke Energy Progress retain the ability to earn a full WACC return during the deferral period, which is the period from when costs are incurred until they are recovered in rates. The Settling Parties agreed that execution by Duke Energy Carolinas and Duke Energy Progress of a settlement agreement between themselves and the NCDEQ dated December 31, 2019, (the “DEQ Settlement”) and the coal ash management plans included therein or subsequently approved by DEQ are reasonable and prudent. The Settling Parties retain the right to challenge the reasonableness and prudence of actions taken by Duke Energy Carolinas and Duke Energy Progress and costs incurred to implement the scope of work agreed upon in the DEQ Settlement, after February 1, 2020, and March 1, 2020, for Duke Energy Carolinas and Duke Energy Progress, respectively. The Settling Parties further agreed to waive rights through the Term to challenge the reasonableness or prudence of Duke Energy Carolinas’ and Duke Energy Progress’ historical coal ash management practices, and to waive the right to assert any arguments that future coal ash costs, including financing costs, shall be shared between either company and customers through equitable sharing or any other rate base or return adjustment that shares the revenue requirement burden of coal ash costs not otherwise disallowed due to imprudence. The Settling Parties agreed to a sharing arrangement for future coal ash insurance litigation proceeds between Duke Energy Carolinas and Duke Energy Progress and North Carolina customers, if achieved. The settlement is subject to the review and approval of the NCUC. The Settling Parties requested an expedited review by the NCUC and anticipate an order on the pending 2019 North Carolina rate cases for Duke Energy Carolinas and Duke Energy Progress by the second quarter of 2021. On January 29, 2021, Duke Energy Carolinas and Duke Energy Progress filed joint motions with the Settling Parties seeking approval of the CCR Settlement Agreement, along with supporting testimony and exhibits from Duke Energy Carolinas and Duke Energy Progress. On February 5, 2021, the Public Staff filed testimony and exhibits supporting the CCR Settlement Agreement. As a result of the CCR Settlement Agreement, Duke Energy Carolinas and Duke Energy Progress recorded a pretax charge of approximately $454 million and $494 million, respectively, in the fourth quarter of 2020 to Impairment charges and a reversal of approximately $50 million and $102 million, respectively, to Regulated electric operating revenues on the respective Consolidated Statements of Operations. COVID-19 Filings North Carolina On March 10, 2020, Governor Roy Cooper declared a state of emergency due to the COVID-19 pandemic. On March 19, 2020, the NCUC issued an order directing that utilities under its jurisdiction suspend disconnections for nonpayment of utility bills during the state of emergency and allow for customers to enter into payment arrangements to pay off arrearages accumulated during the state of emergency after the end of the state of emergency. Additionally, to help mitigate the financial impacts of the COVID-19 pandemic on their customers, on March 19, 2020, Duke Energy Carolinas and Duke Energy Progress filed a request with the NCUC seeking authorization to waive: (1) any late payment charges incurred by a residential or nonresidential customer, effective March 21, 2020; (2) the application of fees for checks returned for insufficient funds for residential and nonresidential customers; (3) the reconnection charge when a residential or nonresidential customer seeks to have service restored for those customers whose service was recently disconnected for nonpayment and to work with customers regarding the other requirements to restore service, including re-establishment of credit; and (4) the fees and charges associated with the use of credit cards or debit cards to pay residential electric utility bills, effective March 21, 2020. The NCUC granted the companies’ request on March 20, 2020. On July 29, 2020, the NCUC issued its Order Lifting Disconnection Moratorium and Allowing Collection of Arrearages Pursuant to Special Repayment Plans. The order contained the following: (1) public utilities may resume customer disconnections due to nonpayment for bills first rendered on or after September 1, 2020, after appropriate notice; (2) the late fee moratorium will continue through the end of the state of emergency or until further order of the Commission; (3) Duke Energy utilities may reinstate fees for checks returned for insufficient funds as well as transaction fees for use of credit cards or debit cards for bills first rendered on or after September 1, 2020; and (4) no sooner than September 1, 2020, the collection of past-due or delinquent accounts accrued up to and including August 31, 2020, may proceed subject to conditions. Duke Energy Carolinas and Duke Energy Progress resumed normal billing practices as of October 1, 2020, with the exception of the billing of late payment charges. Customers were notified of the resumption of normal billing practices, the option of deferred payment arrangements and where to find assistance, if necessary. Service disconnections for nonpayment for residential customers resumed on November 2, 2020. Duke Energy Carolinas and Duke Energy Progress filed a joint petition on August 7, 2020, with the NCUC for deferral treatment of incremental costs and waived customer fees due to the COVID-19 pandemic. Comments on the joint petition were filed on November 5, 2020, and reply comments were filed on November 30, 2020. Duke Energy Carolinas and Duke Energy Progress cannot predict the outcome of this matter. South Carolina On March 13, 2020, Governor Henry McMaster declared a state of emergency due to the COVID-19 pandemic. The governor also issued a letter on March 14, 2020, to the ORS Executive Director regarding the suspension of disconnection of essential utility services for nonpayment. On March 18, 2020, the PSCSC issued an order approving such waivers, and also approved waivers for regulations related to late fees and reconnect fees. The PSCSC's order also required utilities to track the financial impacts of actions taken pursuant to such waivers for possible reporting to the PSCSC. On May 13, 2020, the ORS filed a letter with the PSCSC that included a request from Governor McMaster that utilities proceed with developing and implementing plans for phasing in normal business operations. On May 14, 2020, the PSCSC conditionally vacated the regulation waivers regarding termination of service and suspension of disconnect fees. Prior to termination, utilities are to refer past-due customers to local organizations for assistance and/or deferred payment arrangements. Duke Energy Carolinas and Duke Energy Progress filed a report on June 30, 2020, as required by PSCSC order, reporting revenue impact, costs and savings related to COVID-19 to date. On August 14, 2020, Duke Energy Carolinas and Duke Energy Progress filed a joint petition with the PSCSC for approval of an accounting order to defer incremental COVID-19 related costs incurred through June 30, 2020, and for the ongoing months during the duration of the COVID-19 pandemic. The deferral request did not include lost revenues. Updates on cost impacts were filed on September 30, 2020, and included financial impacts through the end of August 2020. On October 16, 2020, the ORS requested the PSCSC delay taking formal action on the deferral request until the ORS and any intervenors complete discovery. The PSCSC issued an order on October 21, 2020, to grant additional time to complete discovery until January 20, 2021, and to establish a procedural schedule. Updates on cost impacts were filed on December 30, 2020, and included financial impacts through November 30, 2020. On January 15, 2021, ORS requested the PSCSC suspend the dates for the ORS report and public hearing. The ORS conferred with the companies regarding the status of the docket, and the parties mutually agreed that recently enacted federal laws addressing COVID-19 aid and recovery should be studied before further action is taken in this docket. On January 27, 2021, the PSCSC voted to grant the ORS request to suspend the virtual public hearing. ORS is to file its report on or before March 29, 2021. On August 17, 2020, Duke Energy Carolinas and Duke Energy Progress filed an update on their planned return to normal operations during the COVID-19 pandemic. Normal billing practices resumed in South Carolina as of October 1, 2020, and service disconnections for nonpayment resumed on October 12, 2020. Customers were notified of the resumption of normal billing practices, the option of payment arrangements and where to find assistance, if necessary. Duke Energy Carolinas and Duke Energy Progress cannot predict the outcome of this matter. 2020 North Carolina Storm Securitization Filings On October 26, 2020, Duke Energy Carolinas and Duke Energy Progress filed a joint petition with the NCUC, as agreed to in partial settlements reached in the 2019 North Carolina Rate Cases for Duke Energy Carolinas and Duke Energy Progress, seeking authorization for the financing of the costs of each utility's storm recovery activities required as a result of Hurricane Florence, Hurricane Michael, Hurricane Dorian and Winter Storm Diego. Specifically, Duke Energy Carolinas and Duke Energy Progress requested that the NCUC find that their storm recovery costs and related financing costs are appropriately financed by debt secured by storm recovery property, and that the Commission issue financing orders by which each utility may accomplish such financing using a securitization structure. On January 27, 2021, Duke Energy Carolinas, Duke Energy Progress and the Public Staff filed an Agreement and Stipulation of Partial Settlement, which is subject to review and approval of the NCUC, resolving certain accounting issues, including agreement to support an 18- to 20-year bond period. The total revenue requirement over a proposed 20-year bond period for the storm recovery charges is approximately $287 million for Duke Energy Carolinas and $920 million for Duke Energy Progress. A remote evidentiary hearing ended on January 29, 2021, and on February 1, 2021, the NCUC granted a motion by Duke Energy Carolinas and Duke Energy Progress for a temporary 30-day waiver of the 135-day time frame for the NCUC to issue orders on the joint petition, extending the deadline for the NCUC to issue an order to no later than April 9, 2021. Duke Energy Carolinas and Duke Energy Progress cannot predict the outcome of this matter. Duke Energy Carolinas Regulatory Assets and Liabilities The following tables present the regulatory assets and liabilities recorded on Duke Energy Carolinas' Consolidated Balance Sheets.
| December 31, |  | Earns/Pays | Recovery/Refund
(in millions) | 2020 | 2019 |  | a Return | Period Ends
Regulatory Assets(a) |  |  |  |  |
AROs – coal ash | $ | 1,414 |  | $ | 1,696 |  |  | (h) | (b)
Accrued pension and OPEB(c) | 427 |  | 477 |  |  | Yes | (i)
Storm cost deferrals | 205 |  | 178 |  |  | Yes | (b)
Retired generation facilities(c) | 11 |  | 16 |  |  | Yes | 2023
PISCC(c) | 32 |  | 33 |  |  | Yes | (b)
Deferred asset – Lee COLA | 324 |  | 350 |  |  |  | (b)
Hedge costs deferrals(c) | 174 |  | 198 |  |  | Yes | 2041
AMI | 154 |  | 166 |  |  | Yes | (b)
DSM/EE | 46 |  | 100 |  |  | (g) | (g)
Vacation accrual | 84 |  | 80 |  |  |  | 2021
Deferred fuel and purchased power | 42 |  | 222 |  |  | (e) | 2022
COR settlement | 95 |  | 98 |  |  | Yes | (b)
Nuclear deferral | 88 |  | 67 |  |  |  | 2022
Customer connect project | 50 |  | 28 |  |  | Yes | (b)
ABSAT, coal ash basin closure | 71 |  | 50 |  |  | Yes | (b)
Deferred severance charges | 57 |  | — |  |  |  | 2022
Incremental COVID-19 expenses | 31 |  | — |  |  | Yes | (b)
Other | 164 |  | 151 |  |  |  | (b)
Total regulatory assets | 3,469 |  | 3,910 |  |  |  |
Less: current portion | 473 |  | 550 |  |  |  |
Total noncurrent regulatory assets | $ | 2,996 |  | $ | 3,360 |  |  |  |
Regulatory Liabilities(a) |  |  |  |  |
Net regulatory liability related to income taxes(d) | $ | 2,874 |  | $ | 3,060 |  |  |  | (b)
Costs of removal(c) | 1,975 |  | 1,936 |  |  | Yes | (f)
AROs – nuclear and other | 1,512 |  | 1,100 |  |  |  | (b)
Provision for rate refunds(c) | 170 |  | 175 |  |  | Yes |
Accrued pension and OPEB(c) | 32 |  | 39 |  |  | Yes | (i)
Deferred fuel and purchased power | 18 |  | — |  |  | (e) | 2020
Other | 427 |  | 368 |  |  |  | (b)
Total regulatory liabilities | 7,008 |  | 6,678 |  |  |  |
Less: current portion | 473 |  | 255 |  |  |  |
Total noncurrent regulatory liabilities | $ | 6,535 |  | $ | 6,423 |  |  |  |
(a) Regulatory assets and liabilities are excluded from rate base unless otherwise noted. (b) The expected recovery or refund period varies or has not been determined. (c) Included in rate base. (d) Includes regulatory liabilities related to the change in the federal tax rate as a result of the Tax Act and the change in the North Carolina tax rate, both discussed in Note 23. Portions are included in rate base. (e) Pays interest on over-recovered costs in North Carolina. Includes certain purchased power costs in North Carolina and South Carolina and costs of distributed energy in South Carolina. (f) Recovered over the life of the associated assets. (g) Includes incentives on DSM/EE investments and is recovered through an annual rider mechanism. (h) Earns a debt and equity return on coal ash expenditures for North Carolina and South Carolina retail customers as permitted by various regulatory orders. (i) Recovered primarily over the average remaining service periods or life expectancies of employees covered by the benefit plans. See Note 22 for additional detail. 2017 North Carolina Rate Case On August 25, 2017, Duke Energy Carolinas filed an application with the NCUC for a rate increase for retail customers of approximately $647 million. On February 28, 2018, Duke Energy Carolinas and the Public Staff filed an Agreement and Stipulation of Partial Settlement resolving certain portions of the proceeding. Terms of the settlement included a return on equity of 9.9% and a capital structure of 52% equity and 48% debt. On June 22, 2018, the NCUC issued an order approving the Stipulation of Partial Settlement and requiring a revenue reduction. As a result of the June 22, 2018, order, Duke Energy Carolinas recorded a pretax charge of approximately $150 million to Impairment charges and Operation, maintenance and other on the Consolidated Statements of Operations. The charge was primarily related to the denial of a return on the Lee Nuclear Project and the assessment of a $70 million cost of service penalty by reducing the annual recovery of deferred coal ash costs by $14 million per year over a five-year recovery period. The North Carolina Attorney General and other parties separately filed Notices of Appeal to the North Carolina Supreme Court. The North Carolina Supreme Court consolidated the Duke Energy Carolinas and Duke Energy Progress appeals. On December 11, 2020, the North Carolina Supreme Court issued an opinion on the consolidated appeals of the 2018 Duke Energy Carolinas and Duke Energy Progress rate case orders which affirmed, in part, and reversed and remanded, in part, the NCUC’s decisions. In the Opinion, the court upheld the NCUC's decision to include coal ash costs in the cost of service, as well as the NCUC’s discretion to allow a return on the unamortized balance of coal ash costs. The court also remanded to the NCUC a single issue to consider the assessment of support for the Public Staff’s equitable sharing argument. In response to a NCUC order seeking comments on the proposed procedure on remand, on January 11, 2021, Duke Energy Carolinas, Duke Energy Progress, the Public Staff, the North Carolina Attorney General, Sierra Club and Carolina Industrial Group for Fair Utility Rates II and III filed joint comments proposing that the NCUC not hold additional evidentiary hearings, but instead rely upon existing records in the 2017 North Carolina rate cases, or in the alternative the records in the 2019 North Carolina rate cases, in deciding the issue on remand. On January 22, 2021, Duke Energy Carolinas and Duke Energy Progress entered into the CCR Settlement Agreement with the Settling Parties, which was filed with the NCUC on January 25, 2021. For information on a proposed settlement pending before the NCUC, see "2021 Coal Ash Settlement." Duke Energy Carolinas cannot predict the outcome of this matter. 2019 North Carolina Rate Case On September 30, 2019, Duke Energy Carolinas filed an application with the NCUC for a net rate increase for retail customers of approximately $291 million, which represented an approximate 6% increase in annual base revenues. The gross rate case revenue increase request was $445 million, which was offset by an EDIT rider of $154 million to return to customers North Carolina and federal EDIT resulting from recent reductions in corporate tax rates. The request for a rate increase was driven by major capital investments subsequent to the previous base rate case, coal ash pond closure costs, accelerated coal plant depreciation and deferred 2018 storm costs. Duke Energy Carolinas requested rates be effective no later than August 1, 2020. The NCUC established a procedural schedule with an evidentiary hearing to begin on March 23, 2020. On March 16, 2020, in consideration of public health and safety as a result of the COVID-19 pandemic, Duke Energy Carolinas filed a motion with the NCUC seeking a suspension of the procedural schedule in the rate case, including issuing discovery requests, and postponement of the evidentiary hearing for 60 days. Also on March 16, 2020, the NCUC issued an Order Postponing Hearing and Addressing Procedural Matters, which postponed the evidentiary hearing until further order by the Commission. On March 25, 2020, Duke Energy Carolinas and the Public Staff filed an Agreement and Stipulation of Partial Settlement, which is subject to review and approval of the NCUC, resolving certain issues in the base rate proceeding. Major components of the settlement included: •Removal of deferred storm costs from the rate case; •Filing a petition seeking to securitize the deferred storm costs within 120 days of a commission order in this rate case regarding the reasonableness and prudency of the storm costs; •Agreement of certain assumptions to demonstrate the quantifiable benefits to customers of a securitization financing; and •Agreement on certain accounting matters, including recovery of employee incentives, severance, aviation costs and executive compensation. On May 6, 2020, Duke Energy Carolinas, Duke Energy Progress and the Public Staff filed a joint motion requesting that the NCUC issue an order scheduling one consolidated evidentiary hearing to consider the companies’ applications for net rate increases. On June 17, 2020, the NCUC issued an order adopting procedures for the expert witness hearings to take place in three phases: (1) a hearing on issues common to both rate cases conducted remotely; (2) a hearing on Duke Energy Carolinas specific rate case issues, followed immediately by; (3) a hearing on Duke Energy Progress specific rate case issues. On July 24, 2020, Duke Energy Carolinas filed its request for approval of its notice to customers required to implement temporary rates. On July 27, 2020, Duke Energy Carolinas filed a joint motion with Duke Energy Progress and the Public Staff notifying the Commission that the parties reached a joint partial settlement with the Public Staff. Also, on July 27, 2020, Duke Energy Carolinas filed a letter stating that it intended to update its temporary rates calculation to reflect the terms of the partial settlement. On July 31, 2020, Duke Energy Carolinas and the Public Staff filed a Second Agreement and Stipulation of Partial Settlement (Second Partial Settlement), which is subject to review and approval of the NCUC, resolving certain remaining issues in the base rate proceeding. Major components of the Second Partial Settlement included: •A return on equity of 9.6% and a capital structure of 52% equity and 48% debt; •Agreement on amortization over a five-year period for unprotected federal EDIT flowbacks to customers; •Agreement on the inclusion of plant in service and other revenue requirement updates through May 31, 2020, subject to Public Staff review. Annual revenue requirement associated with the May 31 update is estimated at $45 million; and •Settlement to allow the deferral of costs for certain grid projects placed in service between June 1, 2020, and December 31, 2022, totaling $0.8 billion. The remaining items litigated at hearing included recovery of deferred coal ash compliance costs that are subject to asset retirement obligation accounting, implementation of new depreciation rates and the amortization period of the loss on the hydro station sale. On August 4, 2020, Duke Energy Carolinas filed an amended motion for approval of its amended notice to customers, seeking to exercise its statutory right to implement temporary rates subject to refund on or after August 24, 2020. The revenue requirement to be recovered, subject to refund, through the temporary rates is based on and consistent with the base rate component of the Second Partial Settlement with the Public Staff and excludes the items to be litigated noted above. Duke Energy Carolinas will not begin the amortization or implementation of these items until a final order is issued in the rate case and new base rates are implemented. These items will also be excluded when determining whether a refund of amounts collected through these temporary rates is needed. In addition, Duke Energy Carolinas also seeks authorization to place a temporary decrement EDIT Rider into effect, concurrent with the temporary base rate change. The temporary rate changes are not final rates and remain subject to the NCUC's determination of the just and reasonable rates to be charged by Duke Energy Carolinas on a permanent basis. The NCUC approved the August 4, 2020 amended temporary rates motion on August 6, 2020, and temporary rates went into effect on August 24, 2020. The Duke Energy Carolinas evidentiary hearing concluded on September 18, 2020, and post-hearing filings were made with the NCUC from all parties by November 4, 2020. On January 22, 2021, Duke Energy Carolinas and Duke Energy Progress entered into the CCR Settlement Agreement with the Settling Parties, which was filed with the NCUC on January 25, 2021. Duke Energy Carolinas expects the NCUC to issue an order on its net rate increase by the second quarter of 2021. For information on a proposed settlement pending before the NCUC, see "2021 Coal Ash Settlement." Duke Energy Carolinas cannot predict the outcome of this matter. 2018 South Carolina Rate Case On November 8, 2018, Duke Energy Carolinas filed an application with the PSCSC for a rate increase for retail customers of approximately $168 million. After hearings in March 2019, the PSCSC issued an order on May 21, 2019, which included a return on equity of 9.5% and a capital structure of 53% equity and 47% debt. The order also included the following material components: •Approval of cancellation of the Lee Nuclear Project, with Duke Energy Carolinas maintaining the Combined Operating License; •Approval of recovery of $125 million (South Carolina retail portion) of Lee Nuclear Project development costs (including AFUDC through December 2017) over a 12-year period, but denial of a return on the deferred balance of costs; •Approval of recovery of $96 million of coal ash costs over a five-year period with a return at Duke Energy Carolinas' WACC; •Denial of recovery of $115 million of certain coal ash costs deemed to be related to the Coal Ash Act and incremental to the federal CCR rule; •Approval of a $66 million decrease to base rates to reflect the change in ongoing tax expense, primarily the reduction in the federal income tax rate from 35% to 21%; •Approval of a $45 million decrease through the EDIT Rider to return EDIT resulting from the federal tax rate change and deferred revenues since January 2018 related to the change, to be returned in accordance with the Average Rate Assumption Method (ARAM) for protected EDIT, over a 20-year period for unprotected EDIT associated with Property, Plant and Equipment, over a five-year period for unprotected EDIT not associated with Property, Plant and Equipment and over a five-year period for the deferred revenues; and •Approval of a $17 million decrease through the EDIT Rider related to reductions in the North Carolina state income tax rate from 6.9% to 2.5% to be returned over a five-year period. As a result of the order, revised customer rates were effective June 1, 2019. On May 31, 2019, Duke Energy Carolinas filed a Petition for Rehearing or Reconsideration of that order contending substantial rights of Duke Energy Carolinas were prejudiced by unlawful, arbitrary and capricious rulings by the PSCSC on certain issues presented in the proceeding. On June 19, 2019, the PSCSC issued a Directive denying Duke Energy Carolinas' request to rehear or reconsider the Commission's rulings on certain issues presented in the proceeding including coal ash remediation and disposal costs, return on equity and the recovery of a return on deferred operation and maintenance expenses. An order detailing the Commission's decision in the Directive was issued on October 18, 2019. Duke Energy Carolinas filed a notice of appeal on November 15, 2019, with the Supreme Court of South Carolina. On November 20, 2019, the South Carolina Energy Users Committee filed a Notice of Appeal and the ORS filed a Notice of Cross Appeal with the Supreme Court of South Carolina. On February 12, 2020, Duke Energy Carolinas and the ORS filed a joint motion to extend briefing schedule deadlines, which was approved by the Supreme Court of South Carolina on February 20, 2020. On March 10, 2020, the ORS filed a consent motion requesting withdrawal of their appeal, which was granted by the Supreme Court of South Carolina on April 30, 2020. Initial briefs were filed on April 21, 2020, which included the South Carolina Energy User's Committee brief arguing that the PSCSC erred in allowing Duke Energy Carolinas' recovery of costs related to the Lee Nuclear Station. Response briefs were filed on July 6, 2020, and reply briefs were filed on August 11, 2020. Oral arguments have not yet been scheduled by the Supreme Court of South Carolina. Based on legal analysis and the filing of the appeal, Duke Energy Carolinas has not recorded an adjustment for its deferred coal ash costs in this matter. Duke Energy Carolinas cannot predict the outcome of this matter. Duke Energy Progress Regulatory Assets and Liabilities The following tables present the regulatory assets and liabilities recorded on Duke Energy Progress' Consolidated Balance Sheets.
| December 31, |  | Earns/Pays | Recovery/Refund
(in millions) | 2020 | 2019 |  | a Return | Period Ends
Regulatory Assets(a) |  |  |  |  |
AROs – coal ash | $ | 1,347 |  | $ | 1,834 |  |  | (h) | (b)
AROs – nuclear and other | 683 |  | 509 |  |  |  | (c)
Accrued pension and OPEB | 393 |  | 423 |  |  |  | (k)
Storm cost deferrals(d) | 785 |  | 801 |  |  | Yes | (b)
Retired generation facilities | 189 |  | 83 |  |  | Yes | (b)
PISCC and deferred operating expenses | 51 |  | 33 |  |  | Yes | 2054
Deferred asset – Harris COLA | 32 |  | 38 |  |  |  | (b)
Hedge costs deferrals | 89 |  | 85 |  |  |  | (b)
AMI | 57 |  | 61 |  |  | Yes | (b)
DSM/EE(e) | 224 |  | 216 |  |  | (i) | (i)
Vacation accrual | 42 |  | 41 |  |  |  | 2021
Deferred fuel and purchased power | 158 |  | 266 |  |  | (f) | 2022
COR settlement | 33 |  | 35 |  |  | Yes | (e)
NCEMPA deferrals | 124 |  | 72 |  |  | (g) | 2042
Nuclear deferral | 35 |  | 40 |  |  |  | 2022
Customer connect project | 25 |  | 17 |  |  | Yes | (b)
ABSAT, coal ash basin closure | 27 |  | 15 |  |  | Yes | (b)
Deferred severance charges | 29 |  | — |  |  |  | 2022
Incremental COVID-19 expenses | 23 |  | — |  |  | Yes | (b)
Other | 122 |  | 109 |  |  |  | (b)
Total regulatory assets | 4,468 |  | 4,678 |  |  |  |
Less: current portion | 492 |  | 526 |  |  |  |
Total noncurrent regulatory assets | $ | 3,976 |  | $ | 4,152 |  |  |  |
Regulatory Liabilities(a) |  |  |  |  |
Net regulatory liability related to income taxes(l) | $ | 1,662 |  | $ | 1,802 |  |  |  | (b)
Costs of removal | 2,666 |  | 2,294 |  |  | Yes | (j)
Provision for rate refunds | 123 |  | 123 |  |  | Yes |
Other | 473 |  | 249 |  |  |  | (b)
Total regulatory liabilities | 4,924 |  | 4,468 |  |  |  |
Less: current portion | 530 |  | 236 |  |  |  |
Total noncurrent regulatory liabilities | $ | 4,394 |  | $ | 4,232 |  |  |  |
(a) Regulatory assets and liabilities are excluded from rate base unless otherwise noted. (b) The expected recovery or refund period varies or has not been determined. (c) Recovery period for costs related to nuclear facilities runs through the decommissioning period of each unit. (d) South Carolina storm costs are included in rate base. (e) Included in rate base. (f) Pays interest on over-recovered costs in North Carolina. Includes certain purchased power costs in North Carolina and South Carolina and costs of distributed energy in South Carolina. (g) South Carolina retail allocated costs are earning a return. (h) Earns a debt and equity return on coal ash expenditures for North Carolina and South Carolina retail customers as permitted by various regulatory orders. (i) Includes incentives on DSM/EE investments and is recovered through an annual rider mechanism. (j) Recovered over the life of the associated assets. (k) Recovered primarily over the average remaining service periods or life expectancies of employees covered by the benefit plans. See Note 22 for additional detail. (l) Includes regulatory liabilities related to the change in the federal tax rate as a result of the Tax Act and the change in the North Carolina tax rate, both discussed in Note 23. Portions are included in rate base. 2017 North Carolina Rate Case On June 1, 2017, Duke Energy Progress filed an application with the NCUC for a rate increase for retail customers of approximately $477 million, which was subsequently adjusted to $420 million. On November 22, 2017, Duke Energy Progress and the Public Staff filed an Agreement and Stipulation of Partial Settlement resolving certain portions of the proceeding. Terms of the settlement included a return on equity of 9.9% and a capital structure of 52% equity and 48% debt. On February 23, 2018, the NCUC issued an order approving the stipulation. The order also impacted certain amounts that were similarly recorded on Duke Energy Carolinas' Consolidated Balance Sheets. As a result of the order, Duke Energy Progress and Duke Energy Carolinas recorded pretax charges of $68 million and $14 million, respectively, in the first quarter of 2018 to Impairment charges, Operation, maintenance and other and Interest Expense on the Consolidated Statements of Operations. The Public Staff, the North Carolina Attorney General and the Sierra Club filed notices of appeal to the North Carolina Supreme Court. The North Carolina Supreme Court consolidated the Duke Energy Carolinas and Duke Energy Progress appeals. On December 11, 2020, the North Carolina Supreme Court issued an opinion on the consolidated appeals of the 2018 Duke Energy Carolinas and Duke Energy Progress rate case orders which affirmed, in part, and reversed and remanded, in part, the NCUC’s decisions. In the Opinion, the court upheld the NCUC's decision to include coal ash costs in the cost of service, as well as the NCUC’s discretion to allow a return on the unamortized balance of coal ash costs. The court also remanded to the NCUC a single issue to consider the assessment of support for the Public Staff’s equitable sharing argument. In response to a NCUC order seeking comments on the proposed procedure on remand, on January 11, 2021, Duke Energy Carolinas, Duke Energy Progress, the Public Staff, the North Carolina Attorney General, Sierra Club and Carolina Industrial Group for Fair Utility Rates II and III filed joint comments proposing that the NCUC not hold additional evidentiary hearings, but instead rely upon existing records in the 2017 North Carolina rate cases or in the alternative the records in the 2019 North Carolina rate cases, in deciding the issue on remand. On January 22, 2021, Duke Energy Progress and Duke Energy Carolinas entered into the CCR Settlement Agreement with the Settling Parties, which was filed with the NCUC on January 25, 2021. For information on the proposed settlement pending before the NCUC, see "2021 Coal Ash Settlement." Duke Energy Progress cannot predict the outcome of this matter. 2019 North Carolina Rate Case On October 30, 2019, Duke Energy Progress filed an application with the NCUC for a net rate increase for retail customers of approximately $464 million, which represented an approximate 12.3% increase in annual base revenues. The gross rate case revenue increase request was $586 million, which was offset by riders of $122 million, primarily an EDIT rider of $120 million to return to customers North Carolina and federal EDIT resulting from recent reductions in corporate tax rates. The request for rate increase was driven by major capital investments subsequent to the previous base rate case, coal ash pond closure costs, accelerated coal plant depreciation and deferred 2018 storm costs. Duke Energy Progress seeks to defer and recover incremental Hurricane Dorian storm costs in this proceeding and requests rates be effective no later than September 1, 2020. As a result of the COVID-19 pandemic, on March 24, 2020, the NCUC suspended the procedural schedule and postponed the previously scheduled evidentiary hearing on this matter indefinitely. On April 7, 2020, the NCUC issued an order partially resuming the procedural schedule requiring intervenors to file direct testimony on April 13, 2020. Public Staff filed supplemental direct testimony on April 23, 2020. Duke Energy Progress filed rebuttal testimony on May 4, 2020. On June 2, 2020, Duke Energy Progress and the Public Staff filed an Agreement and Stipulation of Partial Settlement, which is subject to review and approval of the NCUC, resolving certain issues in the base rate proceeding. Major components of the settlement included: •Removal of deferred storm costs from the rate case; •Filing a petition seeking to securitize the deferred storm costs within 120 days of a commission order in this rate case regarding the reasonableness and prudency of the storm costs; •Agreement of certain assumptions to demonstrate the quantifiable benefits to customers of a securitization financing; •Agreement that the Asheville CC project is complete and in service and agreement on the amount to be included in rate base; and •Agreement on certain accounting matters, including recovery of employee incentives, severance, aviation costs and executive compensation. On May 6, 2020, Duke Energy Progress, Duke Energy Carolinas and the Public Staff filed a joint motion requesting that the NCUC issue an order scheduling one consolidated evidentiary hearing to consider the companies’ applications for net rate increases. On June 17, 2020, the NCUC issued an order adopting procedures for the expert witness hearings to take place in three phases: (1) a hearing on issues common to both rate cases conducted remotely; (2) a hearing on Duke Energy Carolinas specific rate case issues, followed immediately by; (3) a hearing on Duke Energy Progress specific rate case issues. On July 27, 2020, Duke Energy Progress filed a joint motion with Duke Energy Carolinas and the Public Staff notifying the Commission that the parties reached a joint partial settlement with the Public Staff. On July 31, 2020, Duke Energy Progress and the Public Staff filed a Second Agreement and Stipulation of Partial Settlement (Second Partial Settlement), which is subject to review and approval of the NCUC, resolving certain remaining issues in the base rate proceeding. Major components of the Second Partial Settlement included: •A return on equity of 9.6% and a capital structure of 52% equity and 48% debt; •Agreement on amortization over a five-year period for unprotected federal EDIT flowbacks to customers; •Agreement on the inclusion of plant in service and other revenue requirement updates through May 31, 2020, subject to Public Staff review. Annual revenue requirement associated with the May 31 update is estimated at $25 million; and •Settlement to allow the deferral of costs for certain grid projects placed in service between June 1, 2020, and December 31, 2022, of $0.5 billion. The remaining items litigated at hearing included recovery of deferred coal ash compliance costs that are subject to asset retirement obligation accounting and implementation of new depreciation rates. On August 7, 2020, Duke Energy Progress filed a motion for approval of notice required to implement temporary rates, seeking to exercise its statutory right to implement temporary rates subject to refund on or after September 1, 2020. The revenue requirement to be recovered subject to refund through the temporary rates is based on and consistent with the terms of the base rate component of the settlement agreements with the Public Staff and excludes items to be litigated noted above. Duke Energy Progress will not begin the amortization or implementation of these items until a final determination is issued in the rate case and new base rates are implemented. These items will also be excluded when determining whether a refund of amounts collected through these temporary rates is needed. In addition, Duke Energy Progress also seeks authorization to place a temporary decrement EDIT Rider into effect, concurrent with the temporary base rate change. The temporary rate changes are not final rates and remain subject to the NCUC's determination of the just and reasonable rates to be charged by Duke Energy Progress on a permanent basis. The NCUC approved the August 7, 2020 temporary rates motion on August 11, 2020, and temporary rates went into effect on September 1, 2020. The Duke Energy Progress evidentiary hearing concluded on October 6, 2020, and post-hearing filings were filed with the NCUC from all parties by December 4, 2020. On January 22, 2021, Duke Energy Progress and Duke Energy Carolinas entered into the CCR Settlement Agreement with the Settling Parties, which was filed with the NCUC on January 25, 2021. Duke Energy Progress expects the NCUC to issue an order on its net rate increase by the second quarter of 2021. For information on a proposed settlement pending before the NCUC, see "2021 Coal Ash Settlement." Duke Energy Progress cannot predict the outcome of this matter. Hurricane Dorian Hurricane Dorian reached the Carolinas in September 2019 as a Category 2 hurricane making landfall within Duke Energy Progress’ service territory. Total estimated incremental operation and maintenance expenses incurred to repair and restore the system are approximately $168 million with an additional $4 million in capital investments made for restoration efforts. Approximately $145 million and $179 million of the operation and maintenance expenses are deferred in Regulatory assets within Other Noncurrent Assets on the Consolidated Balance Sheets as of December 31, 2020, and December 31, 2019, respectively. A request for an accounting order to defer incremental storm costs associated with Hurricane Dorian was included in Duke Energy Progress' October 30, 2019, general rate case filing with the NCUC. Terms of the June 2, 2020, Agreement and Stipulation of Partial Settlement removed incremental storm costs from the general rate case. A petition seeking to securitize these costs, along with costs from Hurricane Florence, Hurricane Michael and Winter Storm Diego, was filed on October 26, 2020, with the NCUC. For information on the securitization filing, see "2020 North Carolina Storm Securitization Filings." Duke Energy Progress cannot predict the outcome of this matter. On February 7, 2020, a petition was filed with the PSCSC in the 2019 storm deferrals docket requesting deferral of approximately $22 million in operation and maintenance expenses to an existing storm deferral balance previously approved by the PSCSC. The PSCSC voted to approve the request on March 4, 2020, and issued a final order on April 7, 2020. On July 1, 2020, Duke Energy Progress filed a supplemental true up reducing the actual costs to $17 million. 2018 South Carolina Rate Case On November 8, 2018, Duke Energy Progress filed an application with the PSCSC for a rate increase for retail customers of approximately $59 million. After hearings in April 2019, the PSCSC issued an order on May 21, 2019, which included a return on equity of 9.5% and a capital structure of 53% equity and 47% debt. The order also included the following material components: •Approval of recovery of $4 million of coal ash costs over a five-year period with a return at Duke Energy Progress' WACC; •Denial of recovery of $65 million of certain coal ash costs deemed to be related to the Coal Ash Act and incremental to the federal CCR rule; •Approval of a $17 million decrease to base rates to reflect the change in ongoing tax expense, primarily the reduction in the federal income tax rate from 35% to 21%; •Approval of a $12 million decrease through the EDIT Tax Savings Rider resulting from the federal tax rate change and deferred revenues since January 2018 related to the change, to be returned in accordance with ARAM for protected EDIT, over a 20-year period for unprotected EDIT associated with Property, Plant and Equipment, over a five-year period for unprotected EDIT not associated with Property, Plant and Equipment and over a three-year period for the deferred revenues; and •Approval of a $12 million increase due to the expiration of EDIT related to reductions in the North Carolina state income tax rate from 6.9% to 2.5%. As a result of the order, revised customer rates were effective June 1, 2019. On May 31, 2019, Duke Energy Progress filed a Petition for Rehearing or Reconsideration of that order contending substantial rights of Duke Energy Progress were prejudiced by unlawful, arbitrary and capricious rulings by the PSCSC on certain issues presented in the proceeding. On June 19, 2019, the PSCSC issued a Directive denying Duke Energy Progress' request to rehear or reconsider the Commission's rulings on certain issues presented in the proceeding including coal ash remediation and disposal costs, return on equity and the recovery of a return on deferred operation and maintenance expenses, but allowing additional litigation-related costs. As a result of the Directive allowing litigation-related costs, customer rates were revised effective July 1, 2019. An order detailing the Commission's decision in the Directive was issued on October 18, 2019. Duke Energy Progress filed a notice of appeal on November 15, 2019, with the Supreme Court of South Carolina. The ORS filed a Notice of Cross Appeal on November 20, 2019. On February 12, 2020, Duke Energy Progress and the ORS filed a joint motion to extend briefing schedule deadlines, which was approved by the Supreme Court of South Carolina on February 20, 2020. On March 10, 2020, the ORS filed a consent motion requesting withdrawal of their appeal, which was granted by the Supreme Court of South Carolina on April 30, 2020. Initial briefs were filed on April 21, 2020. Response briefs were filed on July 6, 2020, and reply briefs were filed on August 11, 2020. Oral arguments have not yet been scheduled by the Supreme Court of South Carolina. Based on legal analysis and the filing of the appeal, Duke Energy Progress has not recorded an adjustment for its deferred coal ash costs in this matter. Duke Energy Progress cannot predict the outcome of this matter. Western Carolinas Modernization Plan Duke Energy Progress retired the 376-MW Asheville coal-fired plant on January 29, 2020, at which time the net book value, including associated ash basin closure costs, of $214 million was transferred from Generation facilities to be retired, net to Regulatory assets within Current Assets and Other Noncurrent Assets on the Consolidated Balance Sheets. On December 27, 2019, Asheville Combined Cycle Unit 5 Combustion Turbine and Unit 6 Steam Turbine Generator and the common systems that serve combined cycle units went into commercial operation. Duke Energy Progress placed the Unit 7 Combustion Turbine into commercial operation in simple-cycle mode on January 15, 2020. The Unit 8 Steam Turbine Generator went into commercial operation on April 5, 2020. On June 2, 2020, Duke Energy Progress filed a request with the PSCSC for an accounting order for the deferral of post-in-service costs incurred in connection with the addition of the Asheville combined-cycle generating plant. The petition requested the PSCSC issue an accounting order authorizing Duke Energy Progress to defer post-in-service costs including the Asheville combined-cycle’s depreciation expense, property taxes, incremental operations and maintenance expenses and carrying costs at WACC of approximately $8 million annually. On June 17, 2020, the PSCSC voted to approve the petition and issued its final order on July 6, 2020. On October 8, 2018, Duke Energy Progress filed an application with the NCUC for a CPCN to construct the Hot Springs Microgrid Solar and Battery Storage Facility, which was approved with certain conditions on May 10, 2019. A hearing to update the NCUC on the status of the project was held on March 5, 2020. Construction began in May 2020 with commercial operation expected to begin in October 2021. On July 27, 2020, Duke Energy Progress filed an application with the NCUC for a CPCN to construct the Woodfin Solar Facility, a 5-MW solar generating facility to be constructed on a closed landfill in Buncombe County. The expert hearing was held on November 18, 2020. Duke Energy Progress cannot predict the outcome of this matter. FERC Return on Equity Complaints On October 11, 2019, NCEMPA filed a complaint at the FERC against Duke Energy Progress pursuant to Section 206 of the Federal Power Act (FPA), alleging that the 11% stated return on equity (ROE) component contained in the demand formula rate in the Full Requirements Power Purchase Agreement (FRPPA) between NCEMPA and Duke Energy Progress is unjust and unreasonable. On July 16, 2020, the FERC set this matter for hearing and settlement judge procedures and established a refund effective date of October 11, 2019. In its order setting the matter for settlement, the FERC allowed for the consideration of variations to the base transmission-related ROE methodology developed in its Order No. 569-A, through the introduction of “specific facts and circumstances” involving issues specific to the case. It is Duke Energy Progress’ view that, in consideration of the specific facts and circumstances of risks under the provisions of the FRPPA, the stated 11% ROE is just and reasonable. The parties are currently in FERC settlement procedures. Duke Energy Progress cannot predict the outcome of this matter. On October 16, 2020, NCEMC filed a complaint at the FERC against Duke Energy Progress pursuant to Section 206 of the FPA, alleging that the 11% stated ROE component in the demand formula rate in the Power Supply and Coordination Agreement between NCEMC and Duke Energy Progress is unjust and unreasonable. Under FPA Section 206, the earliest refund effective date that the FERC can establish is the date of the filing of the complaint. Duke Energy Progress responded to the complaint on November 20, 2020, demonstrating that the 11% ROE is just and reasonable for the service provided. The parties have filed additional pleadings. The FERC has not issued an order, and there is no deadline for the FERC to act. Duke Energy Progress cannot predict the outcome of this matter. Duke Energy Florida Regulatory Assets and Liabilities The following tables present the regulatory assets and liabilities recorded on Duke Energy Florida's Consolidated Balance Sheets.
| December 31, |  | Earns/Pays | Recovery/Refund
(in millions) | 2020 | 2019 |  | a Return | Period Ends
Regulatory Assets(a) |  |  |  |  |
AROs – coal ash(c) | $ | 10 |  | $ | 9 |  |  |  | (b)
AROs – nuclear and other(c) | 2 |  | 159 |  |  | Yes | (b)
Accrued pension and OPEB(c) | 482 |  | 474 |  |  | Yes | (g)
Storm cost deferrals(c) | 108 |  | 413 |  |  | (e) | (b)
Nuclear asset securitized balance, net | 991 |  | 1,042 |  |  |  | 2036
Retired generation facilities(c) | 174 |  | 183 |  |  | Yes | (b)
Hedge costs deferrals | 59 |  | 44 |  |  | Yes | 2038
AMI(c) | 45 |  | 53 |  |  | Yes | 2032
DSM/EE(c) | 17 |  | 25 |  |  | Yes | 2025
Deferred fuel and purchased power | 4 |  | 39 |  |  | (f) | 2022
Qualifying facility contract buyouts | 107 |  | 121 |  |  | Yes | 2034
Customer connect project | 30 |  | 20 |  |  |  | 2037
Other | 35 |  | 31 |  |  | (d) | (b)
Total regulatory assets | 2,064 |  | 2,613 |  |  |  |
Less: current portion | 265 |  | 419 |  |  |  |
Total noncurrent regulatory assets | $ | 1,799 |  | $ | 2,194 |  |  |  |
Regulatory Liabilities(a) |  |  |  |  |
Net regulatory liability related to income taxes(c) | $ | 749 |  | $ | 793 |  |  |  | (b)
Costs of removal(c) | — |  | 267 |  |  | (d) | (b)
Deferred fuel and purchased power(c) | — |  | 1 |  |  | (f) |
Other | 19 |  | 26 |  |  | (d) | (b)
Total regulatory liabilities | 768 |  | 1,087 |  |  |  |
Less: current portion | 110 |  | 94 |  |  |  |
Total noncurrent regulatory liabilities | $ | 658 |  | $ | 993 |  |  |  |
(a) Regulatory assets and liabilities are excluded from rate base unless otherwise noted. (b) The expected recovery or refund period varies or has not been determined. (c) Included in rate base. (d) Certain costs earn/pay a return. (e) Earns a debt return/interest once collections begin. (f) Earns commercial paper rate. (g) Recovered primarily over the average remaining service periods or life expectancies of employees covered by the benefit plans. See Note 22 for additional detail. COVID-19 Filings In March 2020, Governor Ron DeSantis directed the State Health Officer of Florida to declare a public health emergency in Florida related to the COVID-19 pandemic. The governor also issued an Executive Order on March 9, 2020, in which he declared a state of emergency in Florida and directed the Director of the Division of Emergency Management to implement the state’s Comprehensive Emergency Management Plan. On March 19, 2020, Duke Energy Florida filed a request to modify its tariff to allow it to waive late fees for customers, and on April 6, 2020, the FPSC issued an order approving the request. Duke Energy Florida had already voluntarily waived reconnect fees and credit card fees and ceased disconnecting customers for nonpayment. On April 2, 2020, Duke Energy Florida filed a petition with the FPSC to accelerate a $78 million fuel cost refund to customers in the month of May 2020. Typically, the refund would be made over the course of 2021. The FPSC approved the petition on April 28, 2020. Duke Energy Florida resumed normal billing practices as of August 24, 2020, with the exception of the billing of late payment charges. Customers were notified of the resumption of normal billing practices, the option of deferred payment arrangements and where to find assistance, if necessary. Service disconnections for nonpayment for residential customers resumed on October 5, 2020. 2021 Settlement Agreement On January 14, 2021, Duke Energy Florida filed a Settlement Agreement (the “Settlement”) with the FPSC. The parties to the Settlement include Duke Energy Florida, the Office of Public Counsel (OPC), the Florida Industrial Power Users Group, White Springs Agricultural Chemicals, Inc. d/b/a PCS Phosphate and NUCOR Steel Florida, Inc. (collectively, the “Parties”). Pursuant to the Settlement, the Parties agreed to a base rate stay-out provision that expires year-end 2024; however, Duke Energy Florida is allowed an increase to its base rates of an incremental $67 million in 2022, $49 million in 2023 and $79 million in 2024, subject to adjustment in the event of tax reform during the years 2021, 2022 and 2023. The Parties also agreed to a return on equity (“ROE”) band of 8.85% to 10.85% with a midpoint of 9.85% based on a capital structure of 53% equity and 47% debt. The ROE band can be increased by 25 basis points if the average 30-year U.S. Treasury rate increases 50 basis points or more over a six-month period in which case the midpoint ROE would rise from 9.85% to 10.10%. Duke Energy Florida will also be able to retain the DOE award of $173 million for spent nuclear fuel, which is expected to be received in 2022, in order to mitigate customer rates over the term of the Settlement. In return, Duke Energy Florida will be able to recognize the $173 million into earnings from 2022 through 2024. In addition to these terms, the Settlement contains provisions related to the accelerated depreciation of Crystal River Units 4-5, the approval of approximately $1 billion in future investments in new cost effective solar power, the implementation of a new Electric Vehicle Charging Station Program and the deferral and recovery of costs in connection with the implementation of Duke Energy Florida’s Vision Florida program, which explores various emerging non-carbon emitting generation technology, distributed technologies and resiliency projects, among other things. The Settlement also resolves remaining unrecovered storm costs for hurricanes Dorian and Michael. The Settlement is subject to the review and approval of the FPSC, which may occur in the second quarter of 2021. If the FPSC approves the Settlement, the new rates will be effective January 1, 2022, with subsequent base rate increases effective January 1, 2023, and January 1, 2024. Duke Energy Florida cannot predict the outcome of this matter. Storm Restoration Cost Recovery Duke Energy Florida filed a petition with the FPSC on April 30, 2019, to recover $223 million of estimated retail incremental storm restoration costs for Hurricane Michael, consistent with the provisions in the 2017 Settlement, and the FPSC approved the petition on June 11, 2019. The FPSC also approved allowing Duke Energy Florida to use the tax savings resulting from the Tax Act to recover these storm costs in lieu of implementing a storm surcharge. Approved storm costs are currently expected to be fully recovered by approximately year-end 2021. On November 22, 2019, Duke Energy Florida filed a petition for approval of actual retail recoverable storm restoration costs related to Hurricane Michael in the amount of $191 million plus interest. On May 19, 2020, Duke Energy Florida filed a supplemental true up reducing the actual retail recoverable storm restoration costs related to Hurricane Michael by approximately $3 million, resulting in a total request to recover $188 million actual retail recoverable storm restoration costs, plus interest. On November 12, 2020, Duke Energy Florida and OPC requested a 90 day abatement to engage in discussions to narrow the issues being litigated. The Prehearing Officer approved this request on November 16, 2020, and ordered Duke Energy Florida and OPC to update the commission on their discussions by February 12, 2021. Approximately $80 million and $204 million of these costs are included in Regulatory assets within Current Assets and Other Noncurrent Assets on the Consolidated Balance Sheets as of December 31, 2020, and December 31, 2019, respectively. Duke Energy Florida filed a petition with the FPSC on December 19, 2019, to recover $169 million of estimated retail incremental storm restoration costs for Hurricane Dorian, consistent with the provisions in the 2017 Settlement and the FPSC approved the petition on February 24, 2020. Approximately $167 million of these costs are included in Regulatory assets within Current Assets and Other Noncurrent Assets on the Consolidated Balance Sheets as of December 31, 2019, representing recoverable costs under the FPSC’s storm rule and Duke Energy Florida's OATT formula rates. The amount at December 31, 2020 was immaterial. The final actual amount of $145 million was filed on September 30, 2020. Pursuant to the 2021 Settlement Agreement filed for FPSC approval on January 14, 2021, all matters regarding storm cost recovery relating to hurricanes Michael and Dorian have been resolved. Clean Energy Connection On July 1, 2020, Duke Energy Florida petitioned the FPSC for approval of a voluntary solar program. The program consists of 10 new solar generating facilities with combined capacity of approximately 750 MW. The program allows participants to support cost-effective solar development in Florida by paying a subscription fee based on per kilowatt-subscriptions and receiving a credit on their bill based on the actual generation associated with their portion of the solar portfolio. The estimated cost of the 10 new solar generation facilities is approximately $1 billion over the next four years, and this investment will be included in base rates offset by the revenue from the subscription fees. The credits will be included for recovery in the fuel cost recovery clause. A remote hearing was held on November 17, 2020, and post-hearing briefs were filed with the FPSC from all parties by December 9, 2020. The FPSC voted to approve the program on January 5, 2021, and issued its written order on January 26, 2021. Crystal River Unit 3 Accelerated Decommissioning Filing On May 29, 2019, Duke Energy Florida entered into a Decommissioning Services Agreement for the accelerated decommissioning of Crystal River Unit 3 located in Citrus County, Florida, with ADP CR3, LLC and ADP SF1, LLC, each of which is a wholly owned subsidiary of Accelerated Decommissioning Partners, LLC (ADP), a joint venture between NorthStar Group Services, Inc. and Orano USA LLC. The agreement will allow for completion of the decommissioning of Crystal River Unit 3 by 2027, rather than 2074 as originally planned. Duke Energy Florida will also sell and assign the spent nuclear fuel, storage canisters, high-level waste and existing dry spent fuel storage installation and certain related assets, together with certain associated liabilities and obligations to ADP SF1, LLC. Duke Energy Florida expects that the assets of the Nuclear Decommissioning Trust Fund as of December 31, 2020, will be sufficient to cover the contract price. The U.S. Nuclear Regulatory Commission approved the transaction on April 1, 2020, and the FPSC issued an order approving the transaction on August 27, 2020. The transaction closed on October 1, 2020. Citrus County CC Construction of the 1,640-MW combined-cycle natural gas plant in Citrus County, Florida, began in October 2015 with an estimated cost of $1.5 billion, including AFUDC. Both units came online in the fourth quarter of 2018. The ultimate cost of the facility was estimated to be $1.6 billion, and Duke Energy Florida recorded Impairment charges on Duke Energy’s Consolidated Statements of Operations of $60 million in the fourth quarter of 2018 for the overrun. In the year ended December 31, 2019, Duke Energy Florida recorded a $36 million reduction to the prior year impairment due to a decrease in the cost estimate of the Citrus County CC, primarily related to the settlement agreement with Fluor, the EPC contractor. This adjustment reduced the estimated cost of the facility to $1.5 billion. Duke Energy Ohio Regulatory Assets and Liabilities The following tables present the regulatory assets and liabilities recorded on Duke Energy Ohio's Consolidated Balance Sheets.
| December 31, |  | Earns/Pays | Recovery/Refund
(in millions) | 2020 | 2019 |  | a Return | Period Ends
Regulatory Assets(a) |  |  |  |  |
AROs – coal ash | $ | 22 |  | $ | 16 |  |  | Yes | (b)
Accrued pension and OPEB | 149 |  | 155 |  |  |  | (g)
Storm cost deferrals | 4 |  | 7 |  |  |  | 2023
PISCC and deferred operating expenses(c) | 16 |  | 17 |  |  | Yes | 2083
Hedge costs deferrals | 7 |  | 6 |  |  |  | (b)
AMI | 36 |  | 40 |  |  |  | (b)
DSM/EE | 1 |  | 2 |  |  | (f) | (e)
Vacation accrual | 6 |  | 5 |  |  |  | 2021
Deferred fuel and purchased power | — |  | 1 |  |  |  | 2021
CEP deferral | 117 |  | 76 |  |  | Yes | (b)
MGP | 104 |  | 102 |  |  |  | (b)
Deferred pipeline integrity costs | 21 |  | 17 |  |  | Yes | (b)
Other | 166 |  | 154 |  |  |  | (b)
Total regulatory assets | 649 |  | 598 |  |  |  |
Less: current portion | 39 |  | 49 |  |  |  |
Total noncurrent regulatory assets | $ | 610 |  | $ | 549 |  |  |  |
Regulatory Liabilities(a) |  |  |  |  |
Net regulatory liability related to income taxes | $ | 628 |  | $ | 654 |  |  |  | (b)
Costs of removal | 68 |  | 86 |  |  |  | (d)
Provision for rate refunds | 45 |  | 31 |  |  |  | (b)
Accrued pension and OPEB | 17 |  | 16 |  |  |  | (g)
Other | 55 |  | 40 |  |  |  | (b)
Total regulatory liabilities | 813 |  | 827 |  |  |  |
Less: current portion | 65 |  | 64 |  |  |  |
Total noncurrent regulatory liabilities | $ | 748 |  | $ | 763 |  |  |  |
(a) Regulatory assets and liabilities are excluded from rate base unless otherwise noted. (b) The expected recovery or refund period varies or has not been determined. (c) Included in rate base. (d) Recovery over the life of the associated assets. (e) Recovered via a rider mechanism. (f) Includes incentives on DSM/EE investments. (g) Recovered primarily over the average remaining service periods or life expectancies of employees covered by the benefit plans. See Note 22 for additional detail. Duke Energy Ohio COVID-19 Filings In response to the COVID-19 pandemic, on March 9, 2020, Governor Mike DeWine declared a state of emergency in the state of Ohio. The PUCO issued an order directing utilities to cease disconnections for nonpayment and waive late payment and reconnection fees and to minimize direct customer contact. The PUCO also directed utilities to maintain flexible payment plans and tariff interpretations to assist customers during this crisis and to seek any regulatory waivers, if necessary. In response, Duke Energy Ohio ceased all disconnections except for safety-related concerns and waived late payment and reconnection fees. On March 19, 2020, Duke Energy Ohio filed its compliance plan with the PUCO and sought waiver of several regulations to minimize direct customer contact. On May 4, 2020, Duke Energy Ohio filed a motion to suspend payment rules to enable proactive outreach to residential customers offering additional options for managing their utility bills. PUCO found the proposal to address the state of emergency and the accompanying waivers reasonable and directed Duke Energy Ohio to work with the PUCO Staff on a comprehensive plan for resumption of activities and operations, to be filed 45 days before resumption of activities. The transition plan to resume normal operations to pre-COVID-19 levels was filed on June 26, 2020, and approved by the PUCO on July 29, 2020. Pursuant to the transition plan, suspended work and activities resumed beginning August 10, 2020, and disconnections resumed on September 8, 2020, for nonresidential customers and October 5, 2020, for residential customers. On April 16, 2020, Duke Energy Ohio filed an application for a Reasonable Arrangement to temporarily lower the minimum bill for demand-metered commercial and industrial customers. On June 17, 2020, the PUCO denied Duke Energy Ohio's application for a reasonable arrangement and ordered Duke Energy Ohio to work with the PUCO Staff on payment arrangements for impacted nonresidential customers. On May 11, 2020, Duke Energy Ohio filed with the PUCO a request seeking deferral of incremental costs incurred, as well as specific miscellaneous lost revenues using existing uncollectible riders already in place for both electric and natural gas operations. Duke Energy Ohio would subsequently file for rider recovery at a later date. On June 17, 2020, the PUCO approved Duke Energy Ohio’s deferral application. The Commission denied the accrual of carrying costs and ordered Duke Energy Ohio to also track potential savings experienced as a result of COVID-19. Duke Energy Kentucky COVID-19 In response to the COVID-19 pandemic, on March 6, 2020, Governor Andy Beshear declared a state of emergency in the commonwealth of Kentucky. The KPSC issued an order directing utilities to cease disconnections for nonpayment and waive late payment fees. The KPSC also directed utilities to maintain flexible payment plans and tariff interpretations to assist customers during this crisis and to seek any regulatory waivers, if necessary. In response, Duke Energy Kentucky ceased all disconnections except for safety-related concerns and waived late payment and reconnection fees. On September 21, 2020, the KPSC issued an order ending the disconnection moratorium for residential and nonresidential customers effective no earlier than October 20, 2020. Utilities are required to offer residential customers a default payment plan for any arrearages accumulated through the October 2020 billing cycle. Assessment of late payment charges for nonresidential customers resumed beginning October 20, 2020, and resumed for residential customers after December 31, 2020. Duke Energy Kentucky is following the order, as clarified on September 30, 2020, by the KPSC. 2017 Electric Security Plan Filing On June 1, 2017, Duke Energy Ohio filed with the PUCO a request for a standard service offer in the form of an ESP. On April 13, 2018, Duke Energy Ohio, along with certain intervenors, filed a Stipulation and Recommendation (Stipulation) with the PUCO resolving that the term of the ESP would be from June 1, 2018, to May 31, 2025, and included continuation of market-based customer rates through competitive procurement processes for generation, continuation and expansion of existing rider mechanisms and approved new rider mechanisms relating to costs incurred to enhance the customer experience and transform the grid and a service reliability rider for vegetation management. On September 13, 2019, and September 16, 2019, Interstate Gas Supply/Retail Supply Association and the Ohio Consumers' Counsel (OCC), respectively, filed appeals to the Supreme Court of Ohio claiming the PUCO’s order was in error. On March 13, 2020, the Supreme Court of Ohio dismissed OCC's appeal. On April 22, 2020, the Supreme Court of Ohio dismissed all remaining appeals of the PUCO's December 19, 2018 order approving the Stipulation. The case has been resolved. Electric Base Rate Case Duke Energy Ohio filed with the PUCO an electric distribution base rate case application and supporting testimony in March 2017. Duke Energy Ohio requested an estimated annual increase of approximately $15 million and a return on equity of 10.4%. On April 13, 2018, Duke Energy Ohio, along with certain intervenors, filed the Stipulation with the PUCO including a $19 million decrease in annual base distribution revenue with a return on equity unchanged from the current rate of 9.84% based upon a capital structure of 50.75% equity and 49.25% debt. Upon approval of new rates, Duke Energy Ohio's rider for recovering its initial SmartGrid implementation ended as these costs would be recovered through base rates. The Stipulation also renewed 14 existing riders, some of which were included in Duke Energy Ohio's ESP, and added two new riders including the Enhanced Service Reliability Rider to recover vegetation management costs not included in base rates, up to $10 million per year (operation and maintenance only) and the Power Future Initiatives Rider (formerly PowerForward Rider) to recover costs incurred to enhance the customer experience and further transform the grid (operation and maintenance and capital). In addition to the changes in revenue attributable to the Stipulation, Duke Energy Ohio’s capital-related riders, including the Distribution Capital Investments Rider, began to reflect the lower federal income tax rate associated with the Tax Act with updates to customers’ bills beginning April 1, 2018. This change reduced electric revenue by approximately $20 million on an annualized basis. On December 19, 2018, the PUCO approved the Stipulation without material modification. New base rates were implemented effective January 2, 2019. On September 13, 2019, and September 16, 2019, Interstate Gas Supply/Retail Supply Association and the OCC, respectively, filed appeals to the Supreme Court of Ohio claiming the PUCO’s order was in error. On March 13, 2020, the Supreme Court of Ohio dismissed the OCC's appeal. On April 22, 2020, the Supreme Court of Ohio dismissed all remaining appeals of the PUCO's December 19, 2018 order approving the Stipulation. The case has been resolved. Ohio Valley Electric Corporation On March 31, 2017, Duke Energy Ohio filed for approval to adjust its existing Rider PSR to pass through net costs related to its contractual entitlement to capacity and energy from the generating assets owned by OVEC. Duke Energy Ohio sought deferral authority for net costs incurred from April 1, 2017, until the new rates under Rider PSR were put into effect. On April 13, 2018, Duke Energy Ohio, along with certain intervenors, filed a Stipulation with the PUCO resolving numerous issues including those related to Rider PSR. The Stipulation activated Rider PSR for recovery of net costs incurred from January 1, 2018, through May 2025. On December 19, 2018, the PUCO approved the Stipulation without material modification. The PSR rider became effective April 1, 2019. On September 13, 2019, and September 16, 2019, Interstate Gas Supply/Retail Supply Association and the OCC filed appeals to the Supreme Court of Ohio claiming the PUCO’s order was in error. On March 13, 2020, the Supreme Court of Ohio dismissed OCC's appeal. On April 22, 2020, the Supreme Court of Ohio dismissed all remaining appeals of the PUCO's December 19, 2018 order approving the Stipulation. The case has been resolved. On July 23, 2019, House Bill 6 (HB 6) was signed into law that became effective January 1, 2020. Among other things, the bill allows for funding through a rider mechanism referred to as the Clean Air Fund (Rider CAF), of two nuclear generating facilities located in Northern Ohio owned by Energy Harbor (f/k/a FirstEnergy Solutions), repeal of energy efficiency mandates and recovery of prudently incurred costs, net of any revenues, for Ohio investor-owned utilities that are participants under the OVEC power agreement. The recovery is through a non-bypassable rider that replaced any existing recovery mechanism approved by the PUCO and will remain in place through 2030. As such, Duke Energy Ohio created the Legacy Generation Rider (Rider LGR) that replaced Rider PSR effective January 1, 2020. The amounts recoverable from customers are subject to an annual cap, with incremental costs that exceed such cap eligible for deferral and recovery subject to review. See Note 17 for additional discussion of Duke Energy Ohio's ownership interest in OVEC. In July 2020, legislation to repeal HB 6 was proposed in both the Ohio House and Senate, with subsequent hearings to receive witness testimony. On December 21, 2020, the Franklin County Circuit Court issued an injunction against the PUCO’s Order that approved the nuclear plant funding through Rider CAF set to become effective on January 1, 2021. On December 28, 2020, in a separate proceeding, the Ohio Supreme Court, ordered a temporary stay on the implementation of Rider CAF. Duke Energy Ohio is not impacted by any changes in Rider CAF. The General Assembly’s session ended without addressing HB 6. Duke Energy Ohio cannot predict the outcome of this matter. Tax Act – Ohio On December 21, 2018, Duke Energy Ohio filed an application to change its base rate tariffs and establish a new rider to implement the benefits of the Tax Act for natural gas customers. Duke Energy Ohio requested commission approval to implement the changes and rider effective April 1, 2019. The new rider will flow through to customers the benefit of the lower statutory federal tax rate from 35% to 21% since January 1, 2018, all future benefits of the lower tax rates and a full refund of deferred income taxes collected at the higher tax rates in prior years. Deferred income taxes subject to normalization rules will be refunded consistent with federal law and deferred income taxes not subject to normalization rules will be refunded over a 10-year period. The PUCO established a procedural schedule and testimony was filed on July 31, 2019. An evidentiary hearing occurred on August 7, 2019. Initial briefs were filed on September 11, 2019. Reply briefs were filed on September 25, 2019. Duke Energy Ohio cannot predict the outcome of this matter. Energy Efficiency Cost Recovery On February 26, 2020, the PUCO issued an order directing utilities to wind down their demand-side management programs by September 30, 2020, and to terminate the programs by December 31, 2020, in response to changes in Ohio law that eliminated Ohio's energy efficiency mandates. On March 27, 2020, Duke Energy Ohio filed an Application for Rehearing seeking clarification on the final true up and reconciliation process after 2020. On April 22, 2020, the PUCO granted rehearing for further consideration. The PUCO issued two orders on November 18, 2020, on the application for rehearing. The first order was a Third Entry on Rehearing on the Duke Energy Ohio portfolio holding the cost cap previously imposed was unlawful, a shared savings cap of $8 million pretax should be imposed and lost distribution revenues could not be recovered after December 31, 2020. The second order directs all utilities set the rider to zero effective January 1, 2021, and to file a separate application for final reconciliation of all energy efficiency costs prior to December 31, 2020. On December 18, 2020, Duke Energy Ohio filed an application for rehearing. On January 13, 2021, the application for rehearing was granted for further consideration. Duke Energy Ohio cannot predict the outcome of this matter. On October 9, 2020, Duke Energy Ohio filed an application to implement a voluntary efficiency program portfolio to commence on January 1, 2021. The application proposes a mechanism for recovery of program costs and a benefit associated with avoided transmission and distribution costs. The application remains under review. As of January 1, 2021, Duke Energy Ohio suspended its energy efficiency programs due to changes in Ohio law. Duke Energy Ohio cannot predict the outcome of this matter. Natural Gas Pipeline Extension Duke Energy Ohio is proposing to install a new natural gas pipeline (the Central Corridor Project) in its Ohio service territory to increase system reliability and enable the retirement of older infrastructure. Duke Energy Ohio currently estimates the pipeline development costs and construction activities will range from $163 million to $245 million in direct costs (excluding overheads and AFUDC) and that construction of the pipeline extension is expected to be completed before the 2021/2022 winter season. An evidentiary hearing for a Certificate of Environmental Compatibility and Public Need concluded on April 11, 2019. On November 21, 2019, the Ohio Power Siting Board (OPSB) approved Duke Energy Ohio's application subject to 41 conditions on construction. Applications for rehearing were filed by several stakeholders on December 23, 2019, arguing that the OPSB approval was incorrect. On February 20, 2020, the OPSB denied the rehearing requests. On April 15, 2020, Joint Appellants filed a notice of appeal at the Supreme Court of Ohio of the OPSB’s decision approving Duke Energy Ohio’s Central Corridor application. On June 4, 2020, the OPSB filed a motion to dismiss claims raised by one of the Joint Appellants and on August 5, 2020, the Supreme Court of Ohio dismissed one of the Joint Appellants from the appeal. Joint Appellants filed their merit briefs on August 26, 2020. Appellee briefs were filed October 15, 2020. Appellants' briefs were filed on November 24, 2020. On September 22, 2020, Duke Energy Ohio filed an application with the OPSB for approval to amend the certificated pipeline route due to changes in the route negotiated with property owners and municipalities. The staff report was filed on December 21, 2020, recommending approval subject to three conditions that reaffirm previous conditions, and provide guidance regarding local permitting and construction supervision.. On December 23, 2020, Duke Energy Ohio filed a letter indicating its acceptance of these conditions if required by the OPSB. On January 21, 2021, the OPSB approved the amended filing with the recommended conditions. On January 27, 2021, the Ohio Supreme Court set oral argument for March 31, 2021. Duke Energy Ohio cannot predict the outcome of this matter. MGP Cost Recovery As part of its 2012 natural gas base rate case, Duke Energy Ohio has approval to defer and recover costs related to environmental remediation at two sites (East End and West End) that housed former MGP operations. Duke Energy Ohio has collected approximately $55 million in environmental remediation costs incurred between 2009 through 2012 through Rider MGP, which is currently suspended. Duke Energy Ohio has made annual applications with the PUCO to recover its incremental remediation costs consistent with the PUCO’s directive in Duke Energy Ohio’s 2012 natural gas base rate case. To date, the PUCO has not ruled on Duke Energy Ohio’s annual applications for the calendar years 2013 through 2019. On September 28, 2018, the staff of the PUCO issued a report recommending a disallowance of approximately $12 million of the $26 million in MGP remediation costs incurred between 2013 through 2017 that staff believes are not eligible for recovery. Staff interprets the PUCO’s 2012 Order granting Duke Energy Ohio recovery of MGP remediation as limiting the recovery to work directly on the East End and West End sites. On October 30, 2018, Duke Energy Ohio filed reply comments objecting to the staff’s recommendations and explaining, among other things, the obligation Duke Energy Ohio has under Ohio law to remediate all areas impacted by the former MGPs and not just physical property that housed the former plants and equipment. On March 29, 2019, Duke Energy Ohio filed its annual application to recover incremental remediation expense for the calendar year 2018 seeking recovery of approximately $20 million in remediation costs. On July 12, 2019, the staff recommended a disallowance of approximately $11 million for work that staff believes occurred in areas not authorized for recovery. Additionally, staff recommended that any discussion pertaining to Duke Energy Ohio's recovery of ongoing MGP costs should be directly tied to or netted against insurance proceeds collected by Duke Energy Ohio. An evidentiary hearing concluded on November 21, 2019. Initial briefs were filed on January 17, 2020, and reply briefs were filed on February 14, 2020. Duke Energy Ohio cannot predict the outcome of this matter. On March 31, 2020, Duke Energy Ohio filed its annual application to recover incremental remediation expense for the calendar year 2019 seeking recovery of approximately $39 million in remediation costs incurred during 2019. On July 23, 2020, the staff recommended a disallowance of approximately $4 million for work the staff believes occurred in areas not authorized for recovery. Additionally, the staff recommended insurance proceeds, net of litigation costs and attorney fees, should be reimbursed to customers and not be held by Duke Energy Ohio until all investigation and remediation is complete. Duke Energy Ohio filed comments in response to the staff report on August 21, 2020, and intervenor comments were filed on November 9, 2020. Duke Energy Ohio cannot predict the outcome of this matter. The 2012 PUCO order also contained conditional deadlines for completing the MGP environmental remediation and the deferral of remediation costs at the MGP sites. Subsequent to the order, the deadline was extended to December 31, 2019. On May 10, 2019, Duke Energy Ohio filed an application requesting a continuation of its existing deferral authority for MGP remediation that must occur after December 31, 2019. On July 12, 2019, staff recommended the Commission deny the deferral authority request. On September 13, 2019, intervenor comments were filed opposing Duke Energy Ohio's request for continuation of existing deferral authority and on October 2, 2019, Duke Energy Ohio filed reply comments. Duke Energy Ohio cannot predict the outcome of this matter. Duke Energy Kentucky Electric Base Rate Case On September 3, 2019, Duke Energy Kentucky filed a rate case with the KPSC requesting an increase in electric base rates of approximately $46 million. On January 31, 2020, Duke Energy Kentucky filed rebuttal testimony updating its rate increase request to approximately $44 million. Hearings concluded on February 20, 2020, and briefing was completed March 20, 2020. On April 27, 2020, the KPSC issued its decision approving a $24 million increase for Duke Energy Kentucky with a 9.25% return on equity. The KPSC denied Duke Energy Kentucky’s major storm deferral mechanism and EV and battery storage pilots. The KPSC approved Duke Energy Kentucky’s Green Source Advantage tariff. New customer rates were effective on May 1, 2020. On May 18, 2020, Duke Energy Kentucky filed its motion for rehearing and on June 4, 2020, the motion was granted in part and denied in part by the KPSC. On October 16, 2020, the KPSC issued an Order on Rehearing authorizing an additional $4 million increase in revenue requirement bringing the total authorized revenue requirement increase to $28 million. Revised customer rates took effect in November 2020. The case has been resolved. Regional Transmission Organization Realignment Duke Energy Ohio, including Duke Energy Kentucky, transferred control of its transmission assets from MISO to PJM, effective December 31, 2011. The PUCO approved a settlement related to Duke Energy Ohio’s recovery of certain costs of the RTO realignment via a non-bypassable rider. Duke Energy Ohio is allowed to recover all MISO Transmission Expansion Planning (MTEP) costs directly or indirectly charged to Ohio customers. The KPSC also approved a request to effect the RTO realignment, subject to a commitment not to seek double recovery in a future rate case of the transmission expansion fees that may be charged by MISO and PJM in the same period or overlapping periods. The following table provides a reconciliation of the beginning and ending balance of Duke Energy Ohio’s recorded liability for its exit obligation and share of MTEP costs recorded in Other within Current Liabilities and Other Noncurrent Liabilities on the Consolidated Balance Sheets. The retail portions of MTEP costs billed by MISO are recovered by Duke Energy Ohio through a non-bypassable rider. As of December 31, 2020, and 2019, $37 million and $40 million, respectively, are recorded in Regulatory assets on Duke Energy Ohio's Consolidated Balance Sheets.
|  |  | Provisions/ |  | Cash |  |
(in millions) | December 31, 2019 |  | Adjustments |  | Reductions |  | December 31, 2020
Duke Energy Ohio | $ | 54 |  |  | $ | (1) |  |  | $ | (3) |  |  | $ | 50 |
Duke Energy Indiana Regulatory Assets and Liabilities The following tables present the regulatory assets and liabilities recorded on Duke Energy Indiana's Consolidated Balance Sheets.
| December 31, |  | Earns/Pays | Recovery/Refund
(in millions) | 2020 | 2019 |  | a Return | Period Ends
Regulatory Assets(a) |  |  |  |  |
AROs – coal ash | $ | 615 |  | $ | 529 |  |  | Yes | (b)
Accrued pension and OPEB | 245 |  | 243 |  |  |  | (e)
Retired generation facilities(c) | 43 |  | 49 |  |  | Yes | 2030
PISCC and deferred operating expenses(c) | 303 |  | 246 |  |  | Yes | (b)
Hedge costs deferrals | 22 |  | 23 |  |  |  | (b)
AMI | 19 |  | 18 |  |  |  | 2031
Vacation accrual | 12 |  | 12 |  |  |  | 2021
Deferred fuel and purchased power | 9 |  | — |  |  |  | 2021
Other | 60 |  | 52 |  |  |  | (b)
Total regulatory assets | 1,328 |  | 1,172 |  |  |  |
Less: current portion | 125 |  | 90 |  |  |  |
Total noncurrent regulatory assets | $ | 1,203 |  | $ | 1,082 |  |  |  |
Regulatory Liabilities(a) |  |  |  |  |
Net regulatory liability related to income taxes | $ | 956 |  | $ | 1,008 |  |  |  | (b)
Costs of removal | 599 |  | 599 |  |  |  | (d)
Accrued pension and OPEB | 100 |  | 90 |  |  |  | (e)
Amounts to be refunded to customers | 17 |  | — |  |  |  | (b)
Other | 66 |  | 43 |  |  |  | (b)
Total regulatory liabilities | 1,738 |  | 1,740 |  |  |  |
Less: current portion | 111 |  | 55 |  |  |  |
Total noncurrent regulatory liabilities | $ | 1,627 |  | $ | 1,685 |  |  |  |
(a) Regulatory assets and liabilities are excluded from rate base unless otherwise noted. (b) The expected recovery or refund period varies or has not been determined. (c) Included in rate base. (d) Refunded over the life of the associated assets. (e) Recovered primarily over the average remaining service periods or life expectancies of employees covered by the benefit plans. See Note 22 for additional detail. COVID-19 Filing In response to the COVID-19 pandemic, on March 6, 2020, Governor Eric Holcomb declared a public health disaster emergency in the state of Indiana, which is currently still in effect. At that time, Duke Energy Indiana had already voluntarily suspended all disconnections and waived late payment fees and check return fees. The utility also waived credit card fees for residential customers. The Executive Order requiring utilities in the state to suspend disconnection of utility service expired July 1, 2020. On May 8, 2020, Duke Energy Indiana, along with other Indiana utilities, filed a request with the IURC for approval of deferral treatment for costs and revenue reductions associated with the COVID-19 pandemic. The utilities requested initial deferral approval in July 2020, with individual subdockets for each utility to be established for consideration of utility-specific cost and revenue impacts, cost recovery timing and customer payment plans. On June 29, 2020, the IURC issued an order in Phase 1 wherein it extended the disconnection moratorium for jurisdictional utilities until August 14, 2020, along with requiring six-month payment arrangements, waiver of late fees, reconnection fees, convenience fees and deposits. The IURC permitted jurisdictional utilities to use regulatory accounting for any impacts associated with the prohibition on utility disconnections, waiver or exclusion of certain utility fees (i.e., late fees, convenience fees, deposits, and reconnection fees), the use of expanded payment arrangements to aid customers, and for COVID-19 related uncollectible and incremental bad debt expense. The IURC did not permit recovery of lost revenues due to load reduction or carrying costs. In Phase 2 filings, individual utilities may choose to request regulatory accounting for other COVID-19 related operation and maintenance costs wherein evidence of the impact of any costs or offsetting savings can be presented and considered in an evidentiary hearing. On August 12, 2020, the IURC issued a supplemental order extending the requirement for six-month payment arrangements and waiver of certain customer fees for another 60 days but did not extend the disconnect moratorium. As such, Duke Energy Indiana resumed service disconnections for nonpayment in mid-September 2020. Normal billing practices resumed in mid-October 2020, except that Duke Energy Indiana has committed to provide extended payment arrangements into 2021 and to waive credit card and pay station fees for residential customers through the end of 2020. Customers were notified of the resumption of normal billing practices, the option of deferred payment arrangements and where to find assistance, if necessary. Duke Energy Indiana cannot predict the outcome of this matter. 2019 Indiana Rate Case On July 2, 2019, Duke Energy Indiana filed a general rate case with the IURC for a rate increase for retail customers of approximately $395 million. The rebuttal case, filed on December 4, 2019, updated the requested revenue requirement to result in a 15.6% or $396 million average retail rate increase, including the impacts of the Utility Receipts Tax. Hearings concluded on February 7, 2020. On June 29, 2020, the IURC issued the order in the rate case approving a revenue increase of $146 million before certain adjustments and ratemaking refinements. The order provided for an overall cost of capital of 5.7% based on a 9.7% return on equity and a 53% equity component of the capital structure, and approved Duke Energy Indiana's requested forecasted rate base of $10.2 billion as of December 31, 2020, including the Edwardsport Integrated Gasification Combined Cycle (IGCC) Plant. The IURC reduced Duke Energy Indiana's request by slightly more than $200 million, when accounting for the utility receipts tax and other adjustments. Approximately 50% of the reduction is due to a prospective change in depreciation and use of regulatory asset for the end-of-life inventory at retired generating plants, approximately 20% is due to the approved 9.7% return on equity versus requested 10.4% and approximately 20% is related to miscellaneous earnings neutral adjustments. Step one rates are estimated to be approximately 75% of the total and became effective on July 30, 2020. Step two rates are estimated to be the remaining 25% of the total rate increase and will be implemented in mid-2021. Several groups filed notices of appeal of the IURC order on July 29, 2020. Appellate briefs were filed on October 14, 2020, focusing on three issues: wholesale sales allocations, coal ash basin cost recovery and the Edwardsport IGCC operating and maintenance expense level approved. The appeal was fully briefed in January 2021, a nd a decision is expected in the first or second quarter of 2021. Duke Energy Indiana cannot predict the outcome of this matter. 2020 Indiana Coal Ash Recovery Case In Duke Energy Indiana’s rate case, the IURC approved coal ash basin closure costs expended through 2018 including financing costs as a regulatory asset and included in rate base. The IURC opened a subdocket to deal with the post-2018 coal ash related expenditures. Duke Energy Indiana filed testimony on April 15, 2020, in the coal ash subdocket requesting recovery for the post-2018 coal ash basin closure costs for plans that have been approved by the Indiana Department of Environmental Management as well as continuing deferral, with carrying costs, on the balance. An evidentiary hearing was held on September 14, 2020, and the parties have agreed on a delayed briefing schedule that allows for the Indiana Rate Case appeal to proceed. Briefing will be completed by mid-May 2021. Duke Energy Indiana cannot predict the outcome of this matter. Piedmont Regulatory Assets and Liabilities The following tables present the regulatory assets and liabilities recorded on Piedmont's Consolidated Balance Sheets.
| December 31, |  | Earns/Pays | Recovery/Refund
(in millions) | 2020 | 2019 |  | a Return | Period Ends
Regulatory Assets(a) |  |  |  |  |
AROs – nuclear and other | $ | 20 |  | $ | 16 |  |  |  | (d)
Accrued pension and OPEB(c) | 88 |  | 90 |  |  |  | (f)
Vacation accrual | 12 |  | 12 |  |  |  | 2021
Derivatives – natural gas supply contracts(e) | 122 |  | 117 |  |  |  |
Amounts due from customers | 110 |  | 36 |  |  | Yes | (b)
Deferred pipeline integrity costs(c) | 71 |  | 62 |  |  |  | 2023
Other | 32 |  | 30 |  |  |  | (b)
Total regulatory assets | 455 |  | 363 |  |  |  |
Less: current portion | 153 |  | 73 |  |  |  |
Total noncurrent regulatory assets | $ | 302 |  | $ | 290 |  |  |  |
Regulatory Liabilities(a) |  |  |  |  |
Net regulatory liability related to income taxes | $ | 499 |  | $ | 555 |  |  |  | (b)
Costs of removal | 575 |  | 574 |  |  |  | (d)
Provision for rate refunds | 6 |  | 41 |  |  | Yes |
Accrued pension and OPEB(c) | 3 |  | 3 |  |  |  | (f)
Amounts to be refunded to customers | 34 |  | 34 |  |  | Yes | (b)
Other | 15 |  | 5 |  |  |  | (b)
Total regulatory liabilities | 1,132 |  | 1,212 |  |  |  |
Less: current portion | 88 |  | 81 |  |  |  |
Total noncurrent regulatory liabilities | $ | 1,044 |  | $ | 1,131 |  |  |  |
(a) Regulatory assets and liabilities are excluded from rate base unless otherwise noted. (b) The expected recovery or refund period varies or has not been determined. (c) Included in rate base. (d) Recovery over the life of the associated assets. (e) Balance will fluctuate with changes in the market. Current contracts extend into 2031. (f) Recovered primarily over the average remaining service periods or life expectancies of employees covered by the benefit plans. See Note 22 for additional detail. COVID-19 Filings North Carolina On March 10, 2020, Governor Roy Cooper declared a state of emergency due to the COVID-19 pandemic. On March 19, 2020, the NCUC issued on order directing that utilities under its jurisdiction suspend disconnections for nonpayment of utility bills during the state of emergency and allow for customers to enter into payment arrangements to pay off arrearages accumulated during the state of emergency after the end of the state of emergency. Additionally, to help mitigate the financial impacts of the COVID-19 pandemic on their customers, on March 19, 2020, Piedmont filed a request with the NCUC seeking authorization to waive: (1) any late payment charges incurred by a residential or nonresidential customer, effective March 21, 2020; (2) the application of fees for checks returned for insufficient funds for residential and nonresidential customers; (3) the reconnection charge when a residential or nonresidential customer seeks to have service restored for those customers whose service was recently disconnected for nonpayment and to work with customers regarding the other requirements to restore service, including re-establishment of credit; and (4) the fees and charges associated with the use of credit cards or debit cards to pay residential electric utility bills, effective March 21, 2020. The NCUC granted Piedmont’s request on March 20, 2020. On July 29, 2020, the NCUC issued its Order Lifting Disconnection Moratorium and Allowing Collection of Arrearages Pursuant to Special Repayment Plans. The order contained the following: (1) public utilities may resume customer disconnections due to nonpayment for bills first rendered on or after September 1, 2020, after appropriate notice; (2) the late fee moratorium will continue through the end of the state of emergency or until further order of the commission; (3) Duke Energy utilities may reinstate fees for checks returned for insufficient funds as well as transaction fees for use of credit cards or debit cards for bills first rendered on or after September 1, 2020; and (4) no sooner than September 1, 2020, the collection of past-due or delinquent accounts accrued up to and including August 31, 2020, may proceed subject to conditions. Normal billing practices resumed as of October 1, 2020, with the exception of billing of late payment charges. Service disconnections for nonpayment resumed on November 4, 2020. Customers were notified of the resumption of normal billing practices, the option of payment arrangements and where to find assistance, if necessary. The NCUC's moratorium for the billing of late payment charges is still in effect until further order from the NCUC. Piedmont cannot predict the outcome of this matter. South Carolina On March 13, 2020, Governor Henry McMaster declared a state of emergency due to the COVID-19 pandemic. The governor also issued a letter on March 14, 2020, to the ORS Executive Director regarding the suspension of disconnection of essential utility services for nonpayment. On March 18, 2020, the PSCSC issued an order approving such waivers, and also approved waivers for regulations related to late fees and reconnect fees. The PSCSC's order also required utilities to track the financial impacts of actions taken pursuant to such waivers for possible reporting to the PSCSC. On May 13, 2020, the ORS filed a letter with the PSCSC that included a request from Governor McMaster that utilities proceed with developing and implementing plans for phasing in normal business operations. On May 14, 2020, the PSCSC conditionally vacated the regulation waivers regarding termination of service and suspension of disconnect fees. Prior to termination, utilities are to refer past-due customers to local organizations for assistance and/or deferred payment arrangements. Piedmont filed a report on June 30, 2020, as required by PSCSC order, reporting revenue impact, costs and savings related to COVID-19 to date. Updates on cost impacts were filed on September 30, 2020, and on December 31, 2020, and included financial impacts through the end of August 2020, and the end of November 2020, respectively. On September 30, 2020, Piedmont filed an update on its planned return to normal operations during the COVID-19 pandemic. Normal billing practices resumed as of October 1, 2020, and service disconnections for nonpayment resumed on November 4, 2020. Customers were notified of the resumption of normal billing practices, the option of payment arrangements and where to find assistance, if necessary. Tennessee On March 12, 2020, Governor Bill Lee declared a state of emergency due to the COVID-19 pandemic. In an effort to help mitigate the financial impacts of the COVID-19 pandemic on their customers, on March 20, 2020, Piedmont filed a request with the TPUC seeking authorization to waive, effective March 21, 2020: (1) any late payment charges incurred by a residential or nonresidential customer; (2) the application of fees for checks returned for insufficient funds for residential and nonresidential customers; and (3) the reconnection charge when a residential or nonresidential customer seeks to have service restored for those customers whose service was recently disconnected for nonpayment and to work with customers regarding the other requirements to restore service, including re-establishment of credit. The TPUC granted Piedmont’s request by Order issued March 31,2020. The Order also stated that customers were not relieved of their obligation to pay for utility services received. The TPUC held its regularly scheduled Commission Conference electronically on August 10, 2020, and on September 16, 2020, issued an Order Lifting Suspension of Disconnections of Service for Lack of Payment with Conditions, effective August 29, 2020. The conditions relate to required customer communications, payment plan options for past-due amounts and ongoing reporting to the TPUC. Potential recovery of costs related to the COVID-19 pandemic may be considered in future, individual docketed proceedings. On October 15, 2020, Piedmont filed a report on its planned return to normal operations during the COVID-19 pandemic. Normal billing practices resumed as of October 1, 2020, and service disconnections for nonpayment resumed on November 4, 2020. Customers were notified of the resumption of normal billing practices, the option of payment arrangements and where to find assistance, if necessary. 2020 Tennessee Rate Case On July 2, 2020, Piedmont filed an application with the TPUC, its first general rate case in Tennessee in nine years, for a rate increase for retail customers of approximately $30 million, which represents an approximate 15% increase in annual revenues. The rate increase is driven by significant infrastructure upgrade investments since its previous rate case. Approximately half of the plant additions being added to rate base are categories of capital investment not covered under the IMR mechanism, which was approved in 2013. Piedmont amended its requested increase to approximately $26 million in December 2020. As authorized under Tennessee law, Piedmont implemented interim rates on January 2, 2021, at the level requested in its adjusted request. A settlement reached with the Tennessee Consumer Advocate in mid-January was filed with the TPUC on February 2, 2021. The settlement results in an increase of revenues of approximately $16 million and a ROE of 9.8%. At a hearing on February 16, 2021, the TPUC voted to accept the settlement, with new rates effective January 2, 2021. Piedmont must refund customers the difference between bills previously rendered under interim rates and such bills if rendered under approved rates, plus interest. 2021 North Carolina Rate Case On February 19, 2021, Piedmont filed notice with the NCUC of its intent to file a general rate case on or about March 22, 2021. Piedmont’s last general rate case in North Carolina was filed in April 2019, with rates effective November 2019. 2019 North Carolina Rate Case On April 1, 2019, Piedmont filed an application with the NCUC, its first general rate case in North Carolina in six years. On August 13, 2019, Piedmont, the Public Staff, and two groups representing industrial customers filed an Agreement and Stipulation Settlement resolving issues in the base rate proceeding, which included a return on equity of 9.7% and a capital structure of 52% equity and 48% debt. Other major components of the Stipulation included: •An annual increase in revenues of $109 million before consideration of riders associated with federal and state tax reform; •A decrease through a rider mechanism of $23 million per year to return unprotected federal EDIT over a five-year period and deferred revenues related to the federal rate reduction of $37 million to be returned over one year; •A decrease through a rider mechanism of $21 million per year related to reductions in the North Carolina state income tax rate to be returned over a three-year period; •An overall cap on net revenue increase of $83 million. This will impact Piedmont beginning November 1, 2022, only if the company does not file another general rate case in the interim; •Continuation of the IMR mechanism; and •Establishment of a new deferral mechanism for certain Distribution Integrity Management Program (DIMP) operations and maintenance expenses incurred effective November 1, 2019, and thereafter. On October 31, 2019, the NCUC approved the Stipulation and the revised customer rates were effective November 1, 2019. OTHER REGULATORY MATTERS Atlantic Coast Pipeline, LLC Atlantic Coast Pipeline (ACP pipeline) was planned to be an approximately 600-mile interstate natural gas pipeline running from West Virginia to North Carolina. Duke Energy indirectly owns a 47% interest, which is accounted for as an equity method investment through its Gas Utilities and Infrastructure segment. On April 15, 2020, the United States District Court for the District of Montana granted partial summary judgment in favor of the plaintiffs in Northern Plains Resource Council v. U.S. Army Corps of Engineers (USACE) (Northern Plains), vacating USACE’s Nationwide Permit 12 (NWP 12) and remanding it to USACE for consultation under the Endangered Species Act (ESA) of 1973. In Northern Plains, the court ruled that NWP 12 was unlawful because USACE did not consult under the ESA with the U.S. Fish and Wildlife Service and/or National Marine Fisheries Service prior to NWP 12’s reissuance in 2017. Because NWP 12 has been vacated and its application enjoined, USACE currently has suspended verification of any new or pending applications under NWP 12 until further court action clarifies the situation. On May 28, 2020, the U.S. Court of Appeals for the Ninth Circuit issued a ruling that limited the NWP 12 vacatur to energy infrastructure projects. In July 2020, the Supreme Court of the United States issued an order allowing other new oil and gas pipeline projects to use the NWP 12 process pending appeal to the U.S. Court of Appeals for the Ninth Circuit; however, that did not decrease the uncertainty associated with an eventual ruling. Together, these rulings indicated that the timeline to reinstate the necessary water crossing permits for ACP would likely cause further delays and cost increases. On July 5, 2020, Dominion Energy, Inc. announced a sale of substantially all of its gas transmission and storage segment assets, operations core to the ACP pipeline project. As a result of the uncertainty created by the NWP 12 rulings, the potential impact on the cost and schedule for the project, the ongoing legal challenges and the risk of additional legal challenges and delays through the construction period and Dominion’s decision to sell substantially all of its gas transmission and storage segment assets, Duke Energy's Board of Directors and management decided that it was not prudent to continue to invest in the project. On July 5, 2020, Duke Energy and Dominion announced the cancellation of the ACP pipeline project. As a result, Duke Energy recorded pretax charges to earnings of approximately $2.1 billion for the year ended December 31, 2020, within Equity in (losses) earnings of unconsolidated affiliates on the Duke Energy Consolidated Statements of Operations. The tax benefit associated with this cancellation was $393 million and is reco rded in Income Tax Expense (Benefit) Expense on the Duke Energy Consolidated Statements of Operations. Additional charges of less than $20 million are e xpected to be recorded within the next three years as ACP incurs obligations to exit operations. As part of the pretax charges to earnings of approximately $2.1 billion, Duke Energy has liabilities related to the cancellation of the ACP pipeline proje ct of $928 million and $8 million within Other Current Liabilities and Other Noncurrent Liabilities, respectively, in the Gas Utilities and Infrastructure segment. The liability represents Duke Energy's obligation of approximately $860 million to fund ACP's outstanding debt and $76 million to satisfy remaining ARO requirements to restore construction sites. See Notes 7 and 12 for additional information regarding this transaction. Potential Coal Plant Retirements The Subsidiary Registrants periodically file integrated resource plans (IRPs) with their state regulatory commissions. The IRPs provide a view of forecasted energy needs over a long term (10 to 20 years) and options being considered to meet those needs. IRPs filed by the Subsidiary Registrants included planning assumptions to potentially retire certain coal-fired generating facilities in North Carolina and Indiana earlier than their current estimated useful lives. Duke Energy continues to evaluate the potential need to retire these coal-fired generating facilities earlier than the current estimated useful lives and plans to seek regulatory recovery for amounts that would not be otherwise recovered when any of these assets are retired. The table below contains the net carrying value of generating facilities planned for retirement or included in recent IRPs as evaluated for potential retirement. Dollar amounts in the table below are included in Net property, plant and equipment on the Consolidated Balance Sheets as of December 31, 2020, and exclude capitalized asset retirement costs.
|  |  |  |  |  |  |  |  | Remaining Net |  |  |  |
| Capacity |  |  |  |  |  |  |  | Book Value |  |  |  |
| (in MW) |  |  |  |  |  |  |  | (in millions) |  |  |  |
Duke Energy Carolinas |  |  |  |  |  |  |  |  |  |  |  |  |
Allen Steam Station Units 1-3(a) | 604 |  |  |  |  |  |  |  |  | $ | 113 |  |  |  |  |
Allen Steam Station Units 4-5(b) | 526 |  |  |  |  |  |  |  |  | 338 |  |  |  |  |
Cliffside Unit 5(b) | 546 |  |  |  |  |  |  |  |  | 350 |  |  |  |  |
Duke Energy Progress |  |  |  |  |  |  |  |  |  |  |  |  |
Mayo Unit 1(b) | 746 |  |  |  |  |  |  |  |  | 676 |  |  |  |  |
Roxboro Units 3-4(b) | 1,409 |  |  |  |  |  |  |  |  | 484 |  |  |  |  |
Duke Energy Florida |  |  |  |  |  |  |  |  |  |  |  |  |
Crystal River Units 4-5(c) | 1,430 |  |  |  |  |  |  |  |  | 1,696 |  |  |  |  |
Duke Energy Indiana |  |  |  |  |  |  |  |  |  |  |  |  |
Gallagher Units 2 and 4(d) | 280 |  |  |  |  |  |  |  |  | 102 |  |  |  |  |
Gibson Units 1-5(e) | 2,845 |  |  |  |  |  |  |  |  | 1,866 |  |  |  |  |
Cayuga Units 1-2(e) | 1,005 |  |  |  |  |  |  |  |  | 777 |  |  |  |  |
Total Duke Energy | 9,391 |  |  |  |  |  |  |  |  | $ | 6,402 |  |  |  |  |
(a) As part of the 2015 resolution of a lawsuit involving alleged New Source Review violations, Duke Energy Carolinas must retire Allen Steam Station Units 1 through 3 by December 31, 2024. The long-term energy options considered in the IRP could result in retirement of these units earlier than their current estimated useful lives. Unit 3 with a capacity of 270 MW and a net book value of $26 million at December 31, 2020, is expected to be retired in March 2021. (b) These units are included in the IRP filed by Duke Energy Carolinas and Duke Energy Progress in North Carolina and South Carolina on September 1, 2020. The long-term energy options considered in the IRP could result in retirement of these units earlier than their current estimated useful lives. In 2019, Duke Energy Carolinas and Duke Energy Progress filed North Carolina rate cases that included depreciation studies that accelerate end-of-life dates for these plants. A decision by NCUC is expected by the end of the first quarter 2021. (c) On January 14, 2021, Duke Energy Florida filed a settlement agreement with the FPSC, which proposed depreciation rates reflecting retirement dates for Duke Energy Florida's last two coal-fired generating facilities, Crystal River Units 4-5, eight years ahead of schedule in 2034 rather than in 2042, in support of Duke Energy's carbon reduction goals. A request for the FPSC to hold a hearing has been made and a decision by the FPSC is expected in the second quarter 2021. (d) Duke Energy Indiana committed to either retire or stop burning coal at Gallagher Units 2 and 4 by December 31, 2022, as part of the 2016 settlement of Edwardsport IGCC matters. In February 2021, upon approval by MISO of a new retirement date, Duke Energy Indiana determined it would modify the retirement date to June 1, 2021. (e) On July 1, 2019, Duke Energy Indiana filed its 2018 IRP with the IURC. The 2018 IRP included scenarios evaluating the potential retirement of coal-fired generating units at Gibson and Cayuga. The rate case filed July 2, 2019, included proposed depreciation rates reflecting retirement dates from 2026 to 2038. The depreciation rates reflecting these updated retirement dates were approved by the IURC as part of the rate case order issued on June 29, 2020.

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