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Income Taxes | 12 Months Ended
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Dec. 31, 2022
Income Tax Disclosure [Abstract] |
Income Taxes | INCOME TAXES Inflation Reduction Act On August 16, 2022, the IRA was signed into law. Among other provisions, the IRA implemented a new 15% corporate alternative minimum tax based on GAAP net income, with certain adjustments as defined by the IRA, and clean energy-related provisions. The IRA's clean energy provisions include, among other provisions, the extension and modification of existing investment and PTCs for projects placed in service through 2024 and introduces new technology-neutral clean energy related credits beginning in 2025. In addition, the IRA created a new, zero-emission nuclear power PTC and a clean hydrogen PTC. Duke Energy has preliminarily reviewed the provisions of the IRA and has determined there were no material impacts on the results of operations, financial position, or cash flows in the periods presented for the Duke Energy Registrants as a result of the IRA being signed into law. Based on the preliminary review of the IRA provisions, future annual cash flow impacts related to the energy credits could be material to the Duke Energy Registrants. However, the majority of Duke Energy's operations are regulated and the FERC and state utility commissions will determine the regulatory treatment. We anticipate the Subsidiary Registrants will defer and expect to pass along the net financial impact associated with the IRA to customers over time. See Note 4 for further details on the IRA as it relates to Duke Energy Florida. Duke Energy will continue to assess the IRA as new information and anticipated guidance from the U.S. Department of the Treasury becomes available. North Carolina's 2021 Appropriations Act On November 18, 2021, North Carolina Senate Bill 105 (SB 105) was signed into law. Starting with tax year 2025, SB 105 begins phasing out the North Carolina corporate income tax rate over five years, from a statutory rate of 2.5% to zero. Duke Energy recorded a net reduction of approximately $490 million to its North Carolina deferred tax liability in the fourth quarter of 2021. The majority of this deferred tax liability reduction was offset by recording a regulatory liability pending NCUC determination of the disposition of the amounts related to Duke Energy Carolinas, Duke Energy Progress and Piedmont. In addition, Duke Energy recorded a net reduction of North Carolina consolidating deferred tax assets of approximately $25 million to deferred state income tax expense in the fourth quarter of 2021. North Carolina SB 105 did not have a significant impact on the financial position, results of operation, or cash flows of Duke Energy, Duke Energy Carolinas, Progress Energy, Duke Energy Progress or Piedmont. Consolidated Appropriations Act On December 27, 2020, the Consolidated Appropriations Act (CAA) was signed into law. In addition to the CAA providing funding for government operations, it also provided tax provisions to assist with COVID-19 relief, including extending certain expiring tax provisions. The company has reviewed the provisions of the CAA and has determined that there are no material impacts on the financial statements as a result of the CAA being signed into law. CARES Act On March 27, 2020, the CARES Act was enacted. The CARES Act was an emergency economic stimulus package in response to the COVID-19 pandemic. Among other provisions, the CARES Act accelerated the remaining AMT credit refund allowances resulting in taxpayers being able to immediately claim a refund in full for any AMT credit carryforwards and provided for the deferral of certain 2020 payroll taxes. In the third quarter of 2020, Duke Energy received $572 million related to these AMT credit carryforwards and $19 million of interest income. In addition, the company deferred approximately $117 million of payroll taxes, of which, 50% were paid by December 31, 2021, with the remaining 50% payable by December 31, 2022. The other provisions within the CARES Act did not materially impact Duke Energy's income tax accounting. Income Tax Expense Components of Income Tax Expense Tax benefit from discontinued operations, in the following tables, includes income tax benefits related to the Commercial Renewables Disposal Groups. See Note 2 for further details.
| Year Ended December 31, 2022
|  | Duke |  | Duke | Duke | Duke | Duke |
| Duke | Energy | Progress | Energy | Energy | Energy | Energy |
(in millions) | Energy | Carolinas | Energy | Progress | Florida | Ohio | Indiana | Piedmont
Current income taxes |  |  |  |  |  |  |  |
Federal | $ | 1 |  | $ | (71) |  | $ | (13) |  | $ | 37 |  | $ | (37) |  | $ | (2) |  | $ | 38 |  | $ | 32 |
State | (8) |  | (13) |  | (3) |  | — |  | (23) |  | 1 |  | 2 |  | 2 |
Foreign | 4 |  | — |  | — |  | — |  | — |  | — |  | — |  | — |
Total current income taxes | (3) |  | (84) |  | (16) |  | 37 |  | (60) |  | (1) |  | 40 |  | 34 |
Deferred income taxes |  |  |  |  |  |  |  |
Federal | 328 |  | 230 |  | 310 |  | 118 |  | 201 |  | (22) |  | (63) |  | 12 |
State | (14) |  | (16) |  | 59 |  | 7 |  | 84 |  | 3 |  | — |  | (7) |
Total deferred income taxes(a) | 314 |  | 214 |  | 369 |  | 125 |  | 285 |  | (19) |  | (63) |  | 5 |
ITC amortization | (11) |  | (4) |  | (5) |  | (4) |  | — |  | (1) |  | (1) |  | — |
Income tax expense from continuing operations | 300 |  | 126 |  | 348 |  | 158 |  | 225 |  | (21) |  | (24) |  | 39 |
Tax benefit from discontinued operations | (503) |  | — |  | — |  | — |  | — |  | — |  | — |  | — |
Total income tax (benefit) expense included in Consolidated Statements of Operations | $ | (203) |  | $ | 126 |  | $ | 348 |  | $ | 158 |  | $ | 225 |  | $ | (21) |  | $ | (24) |  | $ | 39 |
(a) Total deferred income taxes includes the generation of NOL carryforwards and tax credit carryforwards of $550 million at Duke Energy, $97 million at Duke Energy Carolinas, $128 million at Progress Energy, $9 million at Duke Energy Progress, $111 million at Duke Energy Florida, $7 million at Duke Energy Ohio, $13 million at Duke Energy Indiana, and $12 million at Piedmont.
| Year Ended December 31, 2021 |
|  | Duke |  | Duke | Duke | Duke | Duke |
| Duke | Energy | Progress | Energy | Energy | Energy | Energy |
(in millions) | Energy | Carolinas | Energy | Progress | Florida | Ohio | Indiana | Piedmont
Current income taxes |  |  |  |  |  |  |  |
Federal | $ | (2) |  | $ | 241 |  | $ | (15) |  | $ | 113 |  | $ | (75) |  | $ | (8) |  | $ | 65 |  | $ | 23 |
State | 1 |  | 23 |  | (4) |  | 8 |  | (17) |  | (2) |  | 7 |  | 3 |
Foreign | 2 |  | — |  | — |  | — |  | — |  | — |  | — |  | — |
Total current income taxes | 1 |  | 264 |  | (19) |  | 121 |  | (92) |  | (10) |  | 72 |  | 26 |
Deferred income taxes |  |  |  |  |  |  |  |
Federal | 275 |  | (130) |  | 203 |  | (16) |  | 202 |  | 35 |  | 19 |  | 17 |
State | — |  | (79) |  | 47 |  | (26) |  | 77 |  | 5 |  | 16 |  | (13) |
Total deferred income taxes(a) | 275 |  | (209) |  | 250 |  | (42) |  | 279 |  | 40 |  | 35 |  | 4 |
ITC amortization | (8) |  | (4) |  | (4) |  | (4) |  | — |  | — |  | — |  | — |
Income tax expense from continuing operations | 268 |  | 51 |  | 227 |  | 75 |  | 187 |  | 30 |  | 107 |  | 30 |
Tax benefit from discontinued operations | (76) |  | — |  | — |  | — |  | — |  | — |  | — |  | — |
Total income tax expense included in Consolidated Statements of Operations | $ | 192 |  | $ | 51 |  | $ | 227 |  | $ | 75 |  | $ | 187 |  | $ | 30 |  | $ | 107 |  | $ | 30 |
(a) Total deferred income taxes includes the generation of NOL carryforwards and tax credit carryforwards of $32 million at Duke Energy Carolinas, $8 million at Duke Energy Indiana, and $3 million at Piedmont. In addition, total deferred income taxes includes utilization of NOL carryforwards and tax credit carryforwards of $250 million at Duke Energy, $95 million at Progress Energy, $14 million at Duke Energy Progress, $64 million at Duke Energy Florida, and $2 million at Duke Energy Ohio.
| Year Ended December 31, 2020 |
|  | Duke |  | Duke | Duke | Duke | Duke |
| Duke | Energy | Progress | Energy | Energy | Energy | Energy |
(in millions) | Energy | Carolinas | Energy | Progress | Florida | Ohio | Indiana | Piedmont
Current income taxes |  |  |  |  |  |  |  |
Federal | $ | (281) |  | $ | 314 |  | $ | 280 |  | $ | 181 |  | $ | 148 |  | $ | 10 |  | $ | 48 |  | $ | (27) |
State | (3) |  | 35 |  | 29 |  | 17 |  | 24 |  | 1 |  | 7 |  | (8) |
Foreign | 1 |  | — |  | — |  | — |  | — |  | — |  | — |  | — |
Total current income taxes | (283) |  | 349 |  | 309 |  | 198 |  | 172 |  | 11 |  | 55 |  | (35) |
Deferred income taxes |  |  |  |  |  |  |  |
Federal | 222 |  | (171) |  | (167) |  | (180) |  | 1 |  | 30 |  | 12 |  | 60 |
State | (98) |  | (86) |  | (24) |  | (49) |  | 25 |  | 2 |  | 17 |  | (7) |
Total deferred income taxes(a) | 124 |  | (257) |  | (191) |  | (229) |  | 26 |  | 32 |  | 29 |  | 53 |
ITC amortization | (10) |  | (4) |  | (5) |  | (5) |  | — |  | — |  | — |  | — |
Income tax (benefit) expense from continuing operations | (169) |  | 88 |  | 113 |  | (36) |  | 198 |  | 43 |  | 84 |  | 18 |
Tax benefit from discontinued operations | (65) |  | — |  | — |  | — |  | — |  | — |  | — |  | — |
Total income tax (benefit) expense included in Consolidated Statements of Operations | $ | (234) |  | $ | 88 |  | $ | 113 |  | $ | (36) |  | $ | 198 |  | $ | 43 |  | $ | 84 |  | $ | 18 |
(a) Total deferred income taxes includes the generation of NOL carryforwards and tax credit carryforwards of $20 million at Duke Energy Carolinas, $3 million at Duke Energy Progress, $8 million at Duke Energy Indiana, and $11 million at Piedmont. In addition, total deferred income taxes includes utilization of NOL carryforwards and tax credit carryforwards of $39 million at Progress Energy, $30 million at Duke Energy Florida and $189 million at Duke Energy. Duke Energy Income from Continuing Operations before Income Taxes
| Years Ended December 31,
(in millions) | 2022 |  | 2021 |  | 2020
Domestic | $ | 3,991 |  |  | $ | 3,947 |  |  | $ | 907 |
Foreign | 87 |  |  | 44 |  |  | 13 |
Income from continuing operations before income taxes | $ | 4,078 |  |  | $ | 3,991 |  |  | $ | 920 |
Statutory Rate Reconciliation The following tables present a reconciliation of income tax expense at the U.S. federal statutory tax rate to the actual tax expense from continuing operations.
| Year Ended December 31, 2022
|  | Duke |  | Duke | Duke | Duke | Duke |
| Duke | Energy | Progress | Energy | Energy | Energy | Energy |
(in millions) | Energy | Carolinas | Energy | Progress | Florida | Ohio | Indiana | Piedmont
Income tax expense, computed at the statutory rate of 21% | $ | 856 |  | $ | 362 |  | $ | 457 |  | $ | 245 |  | $ | 238 |  | $ | 59 |  | $ | 24 |  | $ | 76 |
State income tax, net of federal income tax effect | (17) |  | (23) |  | 44 |  | 6 |  | 48 |  | 3 |  | 2 |  | (4) |
Amortization of excess deferred income tax | (481) |  | (195) |  | (133) |  | (74) |  | (59) |  | (79) |  | (48) |  | (23) |
AFUDC equity income | (41) |  | (20) |  | (14) |  | (11) |  | (3) |  | (1) |  | (2) |  | (2) |
AFUDC equity depreciation | 36 |  | 18 |  | 12 |  | 6 |  | 6 |  | 1 |  | 4 |  | — |
Other tax credits | (43) |  | (12) |  | (16) |  | (9) |  | (7) |  | (2) |  | (3) |  | (8) |
Other items, net | (10) |  | (4) |  | (2) |  | (5) |  | 2 |  | (2) |  | (1) |  | — |
Income tax expense from continuing operations | $ | 300 |  | $ | 126 |  | $ | 348 |  | $ | 158 |  | $ | 225 |  | $ | (21) |  | $ | (24) |  | $ | 39 |
Effective tax rate | 7.4 | % | 7.3 | % | 16.0 | % | 13.6 | % | 19.8 | % | (7.5) | % | (21.2) | % | 10.8 | %
| Year Ended December 31, 2021 |
|  | Duke |  | Duke | Duke | Duke | Duke |
| Duke | Energy | Progress | Energy | Energy | Energy | Energy |
(in millions) | Energy | Carolinas | Energy | Progress | Florida | Ohio | Indiana | Piedmont
Income tax expense, computed at the statutory rate of 21% | $ | 838 |  | $ | 291 |  | $ | 384 |  | $ | 224 |  | $ | 194 |  | $ | 49 |  | $ | 123 |  | $ | 71 |
State income tax, net of federal income tax effect | 1 |  | (44) |  | 34 |  | (14) |  | 47 |  | 2 |  | 18 |  | (8) |
Amortization of excess deferred income tax | (438) |  | (184) |  | (174) |  | (120) |  | (54) |  | (22) |  | (34) |  | (25) |
AFUDC equity income | (34) |  | (14) |  | (11) |  | (7) |  | (3) |  | (2) |  | (4) |  | (4) |
AFUDC equity depreciation | 35 |  | 18 |  | 10 |  | 5 |  | 5 |  | 2 |  | 5 |  | — |
Other tax credits | (30) |  | (12) |  | (11) |  | (8) |  | (3) |  | (1) |  | (2) |  | (4) |
Valuation allowance(a) | (85) |  | — |  | — |  | — |  | — |  | — |  | — |  | — |
Other items, net | (19) |  | (4) |  | (5) |  | (5) |  | 1 |  | 2 |  | 1 |  | — |
Income tax expense from continuing operations | $ | 268 |  | $ | 51 |  | $ | 227 |  | $ | 75 |  | $ | 187 |  | $ | 30 |  | $ | 107 |  | $ | 30 |
Effective tax rate | 6.7 | % | 3.7 | % | 12.4 | % | 7.0 | % | 20.2 | % | 12.8 | % | 18.2 | % | 8.8 | %
(a) In the fourth quarter of 2021, the company recognized a federal capital gain in the amount of $426 million. As a result, a valuation allowance of $85 million related to a federal capital loss carryforward was released. This valuation allowance was originally recorded as a result of the 2019 sale of minority interest of certain renewable assets within the Commercial Renewables Disposal Groups.
| Year Ended December 31, 2020 |
|  | Duke |  | Duke | Duke | Duke | Duke |
| Duke | Energy | Progress | Energy | Energy | Energy | Energy |
(in millions) | Energy | Carolinas | Energy | Progress | Florida | Ohio | Indiana | Piedmont
Income tax expense, computed at the statutory rate of 21% | $ | 193 |  | $ | 219 |  | $ | 243 |  | $ | 80 |  | $ | 204 |  | $ | 62 |  | $ | 103 |  | $ | 61 |
State income tax, net of federal income tax effect | (80) |  | (40) |  | 4 |  | (25) |  | 39 |  | 2 |  | 19 |  | (12) |
Amortization of excess deferred income tax | (276) |  | (82) |  | (118) |  | (68) |  | (49) |  | (20) |  | (36) |  | (21) |
AFUDC equity income | (48) |  | (13) |  | (9) |  | (6) |  | (3) |  | (2) |  | (4) |  | (10) |
AFUDC equity depreciation | 103 |  | 19 |  | 10 |  | 5 |  | 5 |  | 1 |  | 4 |  | — |
Other tax credits | (37) |  | (13) |  | (16) |  | (14) |  | (2) |  | (1) |  | (3) |  | (2) |
Tax true up | (12) |  | (3) |  | 1 |  | (5) |  | 5 |  | — |  | (1) |  | 1 |
Other items, net | (12) |  | 1 |  | (2) |  | (3) |  | (1) |  | 1 |  | 2 |  | 1 |
Income tax (benefit) expense from continuing operations | $ | (169) |  | $ | 88 |  | $ | 113 |  | $ | (36) |  | $ | 198 |  | $ | 43 |  | $ | 84 |  | $ | 18 |
Effective tax rate | (18.4) | % | 8.4 | % | 9.7 | % | (9.5) | % | 20.4 | % | 14.6 | % | 17.1 | % | 6.2 | %
Valuation allowances have been established for certain state NOL carryforwards and state income tax credits that reduce deferred tax assets to an amount that will be realized on a more-likely-than-not basis. The net change in the total valuation allowance is included in state income tax, net of federal income tax effect, in the above tables. DEFERRED TAXES Net Deferred Income Tax Liability Components The following tables include deferred income tax assets and liabilities related to the Commercial Renewables Disposal Groups. See Note 2 for further details.
| December 31, 2022
|  | Duke |  | Duke | Duke | Duke | Duke |
| Duke | Energy | Progress | Energy | Energy | Energy | Energy |
(in millions) | Energy | Carolinas | Energy | Progress | Florida | Ohio | Indiana | Piedmont
Deferred credits and other liabilities | $ | 348 |  | $ | 170 |  | $ | 117 |  | $ | 33 |  | $ | 83 |  | $ | 12 |  | $ | 23 |  | $ | 24 |
Lease obligations | 405 |  | 89 |  | 263 |  | 197 |  | 65 |  | 4 |  | 15 |  | 3 |
Pension, post-retirement and other employee benefits | 192 |  | (1) |  | 12 |  | 18 |  | (10) |  | 9 |  | 10 |  | (2) |
Progress Energy merger purchase accounting adjustments(a) | 301 |  | — |  | — |  | — |  | — |  | — |  | — |  | — |
Tax credits and NOL carryforwards | 4,426 |  | 444 |  | 618 |  | 167 |  | 412 |  | 20 |  | 208 |  | 37 |
Regulatory liabilities and deferred credits | — |  | — |  | — |  | — |  | — |  | 3 |  | 61 |  | — |
Investments and other assets | — |  | — |  | — |  | — |  | — |  | 3 |  | — |  | — |
Other | 106 |  | 18 |  | 22 |  | 12 |  | 10 |  | 5 |  | 2 |  | 9 |
Valuation allowance | (519) |  | — |  | — |  | — |  | — |  | — |  | — |  | — |
Total deferred income tax assets | 5,259 |  | 720 |  | 1,032 |  | 427 |  | 560 |  | 56 |  | 319 |  | 71 |
Investments and other assets | (1,671) |  | (983) |  | (521) |  | (432) |  | (102) |  | — |  | (12) |  | (28) |
Accelerated depreciation rates | (11,478) |  | (3,410) |  | (4,358) |  | (1,844) |  | (2,576) |  | (1,192) |  | (1,606) |  | (892) |
Regulatory assets and deferred debits, net | (2,074) |  | (480) |  | (1,300) |  | (628) |  | (671) |  | — |  | — |  | (21) |
Total deferred income tax liabilities | (15,223) |  | (4,873) |  | (6,179) |  | (2,904) |  | (3,349) |  | (1,192) |  | (1,618) |  | (941) |
Net deferred income tax liabilities | $ | (9,964) |  | $ | (4,153) |  | $ | (5,147) |  | $ | (2,477) |  | $ | (2,789) |  | $ | (1,136) |  | $ | (1,299) |  | $ | (870) |
(a) Primarily related to lease obligations and debt fair value adjustments. The following table presents the expiration of tax credits and NOL carryforwards.
| December 31, 2022
(in millions) | Amount |  | Expiration Year
General Business Credits | $ | 2,473 |  |  | 2027 |  | — |  | 2042
Federal NOL carryforwards(a) (e) | 306 |  |  | 2024 |  | — |  | Indefinite
Charitable contribution carryforwards | 18 |  |  | 2024 |  | — |  | 2027
State carryforwards and credits(b) (e) | 394 |  |  | 2023 |  | — |  | Indefinite
Foreign NOL carryforwards(c) | 12 |  |  | 2027 |  | — |  | 2037
Foreign Tax Credits(d) | 1,223 |  |  | 2024 |  | — |  | 2028
Total tax credits and NOL carryforwards | $ | 4,426 |  |  |  |  |  |  |
(a) A valuation allowance of $4 million has been recorded on the Federal NOL carryforwards, as presented in the Net Deferred Income Tax Liability Components table. (b) A valuation allowance of $109 million has been recorded on the state NOL and attribute carryforwards, as presented in the Net Deferred Income Tax Liability Components table. (c) A valuation allowance of $12 million has been recorded on the foreign NOL carryforwards, as presented in the Net Deferred Income Tax Liability Components table. (d) A valuation allowance of $391 million has been recorded on the foreign tax credits, as presented in the Net Deferred Income Tax Liability Components table. (e) Indefinite carryforward for Federal NOLs, and NOLs for states that have adopted the Tax Act's NOL provisions, generated in tax years beginning after December 31, 2017.
| December 31, 2021
|  | Duke |  | Duke | Duke | Duke | Duke |
| Duke | Energy | Progress | Energy | Energy | Energy | Energy |
(in millions) | Energy | Carolinas | Energy | Progress | Florida | Ohio | Indiana | Piedmont
Deferred credits and other liabilities | $ | 347 |  | $ | 121 |  | $ | 101 |  | $ | 60 |  | $ | 40 |  | $ | 19 |  | $ | 7 |  | $ | 18 |
Lease obligations | 346 |  | 91 |  | 197 |  | 121 |  | 76 |  | 4 |  | 16 |  | 4 |
Pension, post-retirement and other employee benefits | 207 |  | (36) |  | 30 |  | 17 |  | 7 |  | 11 |  | 20 |  | (8) |
Progress Energy merger purchase accounting adjustments(a) | 340 |  | — |  | — |  | — |  | — |  | — |  | — |  | — |
Tax credits and NOL carryforwards | 3,784 |  | 349 |  | 497 |  | 160 |  | 306 |  | 13 |  | 195 |  | 29 |
Regulatory liabilities and deferred credits | — |  | 11 |  | — |  | — |  | — |  | 16 |  | — |  | 6 |
Investments and other assets | — |  | — |  | — |  | — |  | — |  | 5 |  | 6 |  | — |
Other | 85 |  | 12 |  | 12 |  | 7 |  | 4 |  | 7 |  | 2 |  | 8 |
Valuation allowance | (518) |  | — |  | — |  | — |  | — |  | — |  | — |  | — |
Total deferred income tax assets | 4,591 |  | 548 |  | 837 |  | 365 |  | 433 |  | 75 |  | 246 |  | 57 |
Investments and other assets | (2,428) |  | (1,205) |  | (742) |  | (610) |  | (135) |  | — |  | — |  | (39) |
Accelerated depreciation rates | (10,391) |  | (2,977) |  | (3,891) |  | (1,546) |  | (2,382) |  | (1,125) |  | (1,496) |  | (833) |
Regulatory assets and deferred debits, net | (1,151) |  | — |  | (768) |  | (417) |  | (350) |  | — |  | (53) |  | — |
Total deferred income tax liabilities | (13,970) |  | (4,182) |  | (5,401) |  | (2,573) |  | (2,867) |  | (1,125) |  | (1,549) |  | (872) |
Net deferred income tax liabilities | $ | (9,379) |  | $ | (3,634) |  | $ | (4,564) |  | $ | (2,208) |  | $ | (2,434) |  | $ | (1,050) |  | $ | (1,303) |  | $ | (815) |
(a) Primarily related to lease obligations and debt fair value adjustments. UNRECOGNIZED TAX BENEFITS The following tables present changes to unrecognized tax benefits.
| Year Ended December 31, 2022
|  | Duke |  | Duke | Duke | Duke | Duke |
| Duke | Energy | Progress | Energy | Energy | Energy | Energy |
(in millions) | Energy | Carolinas | Energy | Progress | Florida | Ohio | Indiana | Piedmont
Unrecognized tax benefits – January 1 | $ | 51 |  | $ | 13 |  | $ | 15 |  | $ | 10 |  | $ | 4 |  | $ | 1 |  | $ | 2 |  | $ | 4 |
Gross decreases – tax positions in prior periods | — |  | — |  | — |  | — |  | — |  | — |  | — |  | — |
Gross increases – current period tax positions | 14 |  | 4 |  | 4 |  | 3 |  | 1 |  | — |  | — |  | 5 |
Total changes | 14 |  | 4 |  | 4 |  | 3 |  | 1 |  | — |  | — |  | 5 |
Unrecognized tax benefits – December 31 | $ | 65 |  | $ | 17 |  | $ | 19 |  | $ | 13 |  | $ | 5 |  | $ | 1 |  | $ | 2 |  | $ | 9 |
| Year Ended December 31, 2021 |
|  | Duke |  | Duke | Duke | Duke | Duke |
| Duke | Energy | Progress | Energy | Energy | Energy | Energy |
(in millions) | Energy | Carolinas | Energy | Progress | Florida | Ohio | Indiana | Piedmont
Unrecognized tax benefits – January 1 | $ | 125 |  | $ | 10 |  | $ | 10 |  | $ | 6 |  | $ | 3 |  | $ | 1 |  | $ | 1 |  | $ | 1 |
Gross decreases – tax positions in prior periods(a) | (86) |  | — |  | — |  | — |  | — |  | — |  | — |  | — |
Gross increases – current period tax positions | 12 |  | 3 |  | 5 |  | 4 |  | 1 |  | — |  | 1 |  | 3 |
Total changes | (74) |  | 3 |  | 5 |  | 4 |  | 1 |  | — |  | 1 |  | 3 |
Unrecognized tax benefits – December 31 | $ | 51 |  | $ | 13 |  | $ | 15 |  | $ | 10 |  | $ | 4 |  | $ | 1 |  | $ | 2 |  | $ | 4 |
(a) In the fourth quarter of 2021, the company recognized a federal capital gain in the amount of $426 million. As a result of the capital gain, a previously recorded unrecognized tax benefit related to the character of a taxable loss has been reversed. See note (a) under the Statutory Rate Reconciliation table for more details.
| Year Ended December 31, 2020 |
|  | Duke |  | Duke | Duke | Duke | Duke |
| Duke | Energy | Progress | Energy | Energy | Energy | Energy |
(in millions) | Energy | Carolinas | Energy | Progress | Florida | Ohio | Indiana | Piedmont
Unrecognized tax benefits – January 1 | $ | 126 |  | $ | 8 |  | $ | 9 |  | $ | 6 |  | $ | 3 |  | $ | 1 |  | $ | 1 |  | $ | 4 |
Gross decreases – tax positions in prior periods | (2) |  | — |  | — |  | — |  | — |  | — |  | — |  | — |
Gross increases – current period tax positions | 4 |  | 2 |  | 1 |  | — |  | — |  | — |  | — |  | — |
Reduction due to lapse of statute of limitations | (3) |  | — |  | — |  | — |  | — |  | — |  | — |  | (3) |
Total changes | (1) |  | 2 |  | 1 |  | — |  | — |  | — |  | — |  | (3) |
Unrecognized tax benefits – December 31 | $ | 125 |  | $ | 10 |  | $ | 10 |  | $ | 6 |  | $ | 3 |  | $ | 1 |  | $ | 1 |  | $ | 1 |
The following table includes additional information regarding the Duke Energy Registrants' unrecognized tax benefits at December 31, 2022. None of Duke Energy Registrants anticipates a material increase or decrease in unrecognized tax benefits within the next 12 months.
| December 31, 2022
|  | Duke |  | Duke | Duke | Duke | Duke |
| Duke | Energy | Progress | Energy | Energy | Energy | Energy |
(in millions) | Energy | Carolinas | Energy | Progress | Florida | Ohio | Indiana | Piedmont
Amount that if recognized, would affect the effective tax rate or regulatory liability(a) | $ | 59 |  | $ | 17 |  | $ | 18 |  | $ | 13 |  | $ | 5 |  | $ | 1 |  | $ | 2 |  | $ | 8 |
(a) The Duke Energy Registrants are unable to estimate the specific amounts that would affect the ETR versus the regulatory liability. Duke Energy and its subsidiaries are no longer subject to federal, state, local or non-U.S. income tax examinations by tax authorities for years before 2016, aside from certain state tax attributes carried forward for utilization in future years.

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