Duke Energy

“The continued threat of terrorism and the impact of retaliatory military and other action by the U.S. and its allies may lead to increased political, economic or financial market instability or volatility in prices for commodities including natural gas and oil, which may have material adverse effects in ways the Duke Energy Registrants cannot predict at this time.”

Annual report 2025A · The company itself

“Federal or state policies could be enacted that restrict the availability of, and increase the costs associated with the use of, fuels or generation technologies, such as natural gas or nuclear power, that enable Duke Energy to reduce its carbon emissions. For example, Duke Energy anticipates that its nuclear stations in North Carolina and South Carolina will continue to qualify for significant tax incentives in the form of nuclear production tax credits as allowed under the IRA and OBBBA.”

Annual report 2025A · The company itself

“Factors that could impact sales volumes, generation of electricity and market prices at which the Duke Energy Registrants are able to sell electricity and natural gas include the following: •weather variability such as extreme seasonal conditions, storm-related outages, or drought impacting generation economics; •transmission or transportation constraints, purchased power availability and competitive alternative energy sources; •customer-owned generation, energy efficiency adoption and technological advances reducing demand; and •fuel procurement challenges for coal, natural gas, crude oil and uranium and capacity limitations for transmission services.”

Annual report 2025A · The company itself

“The Duke Energy Registrants purchase almost all of their natural gas supply from interstate sources that must be transported to the applicable service territories. Interstate pipeline companies transport the natural gas to the Duke Energy Registrants' systems under firm service agreements that are designed to meet the requirements of their core markets.”

Annual report 2025A · The company itself

“The reliable and safe operation of our power generating facilities, electric transmission and distribution systems and natural gas infrastructure in our communities continues to be foundational to serving our customers, our financial results and our credibility with stakeholders. Operational excellence is especially critical to successfully navigate effective storm response and to efficiently provide the continuity of service our customers demand, regardless of weather or circumstance.”

Annual report 2025A · The company itself

“Duke Energy is working to meet growing and evolving customer energy needs while balancing reliability, costs and other priorities including the need to modernize its fleet and the regulatory constructs.”

Annual report 2025A · The company itself

“State regulators have approved various mechanisms to stabilize natural gas utility margins, including margin decoupling in North Carolina and rate stabilization in South Carolina.”

Annual report 2025A · The company itself

“Duke Energy’s long-term strategy requires extensive capital investment in generation and transmission facilities.”

Annual report 2025A · The company itself

“In addition, the electrification of buildings and appliances currently relying on natural gas could reduce the number of customers in our natural gas distribution business.”

Annual report 2025A · The company itself

“We are proud of the constructive regulatory outcomes that we advocated for our customers as we prepare for growth in energy demand driven by ongoing migration into our attractive service territories, continued electrification and onshoring from domestic industries, data center growth and other investments, including those related to support the broader utilization of AI.”

Annual report 2025A · The company itself

“Executive Overview This is a transformative period for the utility industry propelled by energy modernization in support of load growth acceleration and the ongoing shift to more efficient and resilient energy infrastructure. Through our strategic investments and initiatives, we have maintained a key role in this transition, as we strengthen the energy system for our customers.”

Annual report 2025A · The company itself

“The rates that the Duke Energy Registrants’ regulated utility businesses are allowed to charge are established by state utility commissions in rate case proceedings, which may limit their ability to recover costs and earn an appropriate return on investment. The rates that the Duke Energy Registrants’ regulated utility businesses are allowed to charge significantly influences the results of operations, financial position and cash flows of the Duke Energy Registrants. The regulation of the rates that the regulated utility businesses charge customers is determined, in large part, by state utility commissions in rate case proceedings.”

Annual report 2025A · The company itself

“The Duke Energy Registrants’ regulated electric and natural gas utility businesses are regulated on a cost-of-service/rate-of-return basis subject to statutes and regulatory commission rules and procedures of North Carolina, South Carolina, Florida, Ohio, Tennessee, Indiana and Kentucky.”

Annual report 2025A · The company itself

“The reliable and safe operation of our power generating facilities, electric transmission and distribution systems and natural gas infrastructure in our communities continues to be foundational to serving our customers, our financial results and our credibility with stakeholders. Operational excellence is especially critical to successfully navigate effective storm response and to efficiently provide the continuity of service our customers demand, regardless of weather or circumstance.”

Annual report 2025A · The company itself

“Duke Energy is working to meet growing and evolving customer energy needs while balancing reliability, costs and other priorities including the need to modernize its fleet and the regulatory constructs.”

Annual report 2025A · The company itself

“Nuclear energy is a reliable and clean energy source and nuclear tax incentives allowed, including nuclear production tax credits, are expected to reduce the cost of the energy transition for our customers.”

Annual report 2025A · The company itself

“The Duke Energy Registrants sell electricity into the spot market or other competitive power markets on a contractual basis.”

Annual report 2025A · The company itself

“Duke Energy’s long-term strategy requires extensive capital investment in generation and transmission facilities.”

Annual report 2025A · The company itself

“In most parts of the U.S., the demand for power peaks during the warmer summer months, with market prices also typically peaking at that time.”

Annual report 2025A · The company itself

“The transition to and expansion of certain low-carbon resources, such as renewables without cost-effective storage, may challenge our ability to meet customer expectations of reliability and value in a carbon constrained environment, particularly as demand increases.”

Annual report 2025A · The company itself

“We are proud of the constructive regulatory outcomes that we advocated for our customers as we prepare for growth in energy demand driven by ongoing migration into our attractive service territories, continued electrification and onshoring from domestic industries, data center growth and other investments, including those related to support the broader utilization of AI.”

Annual report 2025A · The company itself

“At times, demand can exceed available generation capacity and emerging large loads – such as hyperscale data centers and industrial facilities – present unique risks due to their high demand, rapid fluctuations, and unpredictable operational profiles, which can further strain bulk power system reliability and grid stability.”

Annual report 2025A · The company itself

“Declines in demand for electricity or natural gas as a result of economic downturns in the Duke Energy Registrants’ regulated service territories will reduce overall sales and lessen cash flows, especially as industrial customers reduce production and, therefore, consumption of electricity and the use of natural gas.”

Annual report 2025A · The company itself

“Duke Energy’s results of operations depend, in significant part, on the extent to which it can implement its business strategy and goals successfully. Duke Energy is working to meet growing and evolving customer energy needs while balancing reliability, costs and other priorities including the need to modernize its fleet and the regulatory constructs. Duke Energy is subject to business, policy, regulatory, technology, economic and competitive uncertainties and contingencies, many of which are beyond its control and may make those objectives difficult to achieve.”

Annual report 2025A · The company itself

“Factors that could impact sales volumes, generation of electricity and market prices at which the Duke Energy Registrants are able to sell electricity and natural gas include the following: •weather variability such as extreme seasonal conditions, storm-related outages, or drought impacting generation economics; •transmission or transportation constraints, purchased power availability and competitive alternative energy sources; •customer-owned generation, energy efficiency adoption and technological advances reducing demand; and •fuel procurement challenges for coal, natural gas, crude oil and uranium and capacity limitations for transmission services.”

Annual report 2025A · The company itself

“Natural disasters or operational accidents may adversely affect the Duke Energy Registrants’ operating results, financial position or cash flows. Natural disasters or operational accidents within the Company or industry (such as wild fires, earthquakes, hurricanes or natural gas transmission pipeline explosions) could have direct or indirect impacts to the Duke Energy Registrants or to key contractors and suppliers.”

Annual report 2025A · The company itself

“Sustained severe drought conditions could impact generation by hydroelectric plants, as well as fossil and nuclear plant operations, as these facilities use water for cooling purposes and for the operation of environmental compliance equipment. Furthermore, destruction caused by severe weather events, such as hurricanes, flooding, tornadoes, severe thunderstorms, snow and ice storms, droughts, extreme temperatures, and wild fires, including from climate change, can result in lost operating revenues due to outages, property damage or total loss, including downed transmission and distribution lines, personal injury, reputational harm, and additional unexpected expenses to mitigate storm damage, including incremental financing costs.”

Annual report 2025A · The company itself

“Disruption in the delivery of fuel, including disruptions as a result of, among other things, changing economic conditions, bankruptcies, transportation delays, weather, labor relations, physical or cyber attack, force majeure events or environmental regulations affecting any of these fuel suppliers, could limit the Duke Energy Registrants' ability to operate their facilities.”

Annual report 2025A · The company itself

“Customer growth and customer usage are affected by several factors outside the control of the Duke Energy Registrants, such as mandated EE measures, demand-side management goals, advancements in technology that may impact the energy usage by large commercial customers, such as data centers, distributed generation resources and economic and demographic conditions, such as inflation, tariffs, and interest rate volatility, population changes, job and income growth, housing starts, new business formation and the overall level of economic activity.”

Annual report 2025A · The company itself

“Completion of these types of large projects is subject to substantial delay or cost overrun risks that have, or may occur again, in the future, including those related to labor costs, availability of materials, productivity of workforce/equipment; as well as supply chain issues including, quality, availability, disruptions and potential tariff impacts; weather related delays; start up issues; public and regulatory support; transmission grid interconnection issues; and potential for increased financing costs as a result of interest rates and impact of delays including loss of otherwise available tax credits and incentives.”

Annual report 2025A · The company itself

“LIQUIDITY, CAPITAL REQUIREMENTS AND COMMON STOCK RISKS The Duke Energy Registrants rely on access to short-term borrowings and longer-term debt and equity markets to finance their capital requirements and support their liquidity needs. Access to those markets can be adversely affected by a number of conditions, many of which are beyond the Duke Energy Registrants’ control.”

Annual report 2025A · The company itself

“Additionally, rapidly rising interest rates could impact the ability to cost- effectively finance the capital plan or increase rates to customers and could have an impact on our ability to execute on our energy modernization.”

Annual report 2025A · The company itself

“Sustained downturns or sluggishness in the economy generally affect the markets in which the Duke Energy Registrants operate and negatively influence operations. Declines in demand for electricity or natural gas as a result of economic downturns in the Duke Energy Registrants’ regulated service territories will reduce overall sales and lessen cash flows, especially as industrial customers reduce production and, therefore, consumption of electricity and the use of natural gas.”

Annual report 2025A · The company itself

“These market prices may fluctuate substantially over relatively short periods of time and could negatively impact the Company's ability to accurately forecast the financial impact or reduce the Duke Energy Registrants’ revenues and margins, thereby diminishing results of operations.”

Annual report 2025A · The company itself

“Cyberattacks and data security breaches could adversely affect the Duke Energy Registrants' businesses. Cybersecurity risks have increased in recent years as a result of the proliferation of new technologies, and the increased sophistication, magnitude and frequency of cyberattacks and data security breaches. Duke Energy relies on the continued operation of advanced digital information and operational technology systems and network infrastructure, which are part of an interconnected regional grid. Additionally, connectivity to the internet continues to increase through grid modernization and other operational excellence initiatives.”

Annual report 2025A · The company itself

“A significant disruption to interstate pipelines capacity or reduction in natural gas supply due to events including, but not limited to, operational failures or disruptions, hurricanes, tornadoes, floods, freeze off of natural gas wells, terrorist or cyberattacks or other acts of war or legislative or regulatory actions or requirements, including remediation related to integrity inspections or regulations and laws enacted to address climate change, could reduce the normal interstate supply of natural gas and thereby reduce earnings.”

Annual report 2025A · The company itself

“A continuation of adverse economic conditions including economic downturn or high commodity prices could also negatively impact the financial stability of certain of our customers and result in their inability to pay for electric and natural gas services.”

Annual report 2025A · The company itself

“Rapidly rising prices as a result of inflation, tariffs, or other factors may impact the ability of the Company to recover costs timely or execute on its business strategy including the achievement of growth objectives.”

Annual report 2025A · The company itself

“Customer growth and customer usage are affected by several factors outside the control of the Duke Energy Registrants, such as mandated EE measures, demand-side management goals, advancements in technology that may impact the energy usage by large commercial customers, such as data centers, distributed generation resources and economic and demographic conditions, such as inflation, tariffs, and interest rate volatility, population changes, job and income growth, housing starts, new business formation and the overall level of economic activity.”

Annual report 2025A · The company itself

“Risks Related to Supply Chain Disruptions, Inflation, Tariffs and Foreign Export Restrictions Duke Energy’s operations and capital projects are exposed to supply chain disruptions, inflation, tariffs and export restrictions. These factors may increase costs, extend lead times for critical equipment and/or delay construction and maintenance activities.”

Annual report 2025A · The company itself

“Furthermore, AI, including generative AI, may be used to facilitate or perpetrate these cybersecurity threats.”

Annual report 2025A · The company itself

“Duke Energy’s use of generative AI (and use by their vendors and agents) may subject them to data privacy, legal, regulatory and security risks.”

Annual report 2025A · The company itself

“We are proud of the constructive regulatory outcomes that we advocated for our customers as we prepare for growth in energy demand driven by ongoing migration into our attractive service territories, continued electrification and onshoring from domestic industries, data center growth and other investments, including those related to support the broader utilization of AI.”

Annual report 2025A · The company itself

“Federal and state regulations, laws, commercialization and reduction of costs and other efforts designed to promote and expand the use of EE measures and distributed generation technologies, such as private solar and battery storage, in Duke Energy service territories could reduce recovery of fixed costs in Duke Energy service territories or result in customers leaving the electric distribution system or an increase in customer net energy metering, which allows customers with private solar to receive bill credits for surplus power up to the full retail credit amount.”

Annual report 2025A · The company itself

“Such incentives, along with technological advances driven by federal laws mandating new levels of EE in end-use electric and natural gas devices or other improvements in or applications of technology, could lead to declines in per capita energy consumption.”

Annual report 2025A · The company itself

“The Company may be constrained by the ability to procure resources or labor needed to build new generation at a reasonable price as well as to construct projects on time.”

Annual report 2025A · The company itself

“The construction of such projects involve a number of risks, including construction delays, delays in or failure to receive required regulatory approvals and/or siting or environmental permits, nonperformance by equipment and other third-party suppliers, and increases in equipment and labor costs beyond expectations. Uncertainty in long-term customer usage patterns or lower than anticipated load growth could impact the nature, timing or magnitude of the Company’s investments, and consequently, the achievement of the Company’s growth objectives.”

Annual report 2025A · The company itself

“Federal and state regulations, laws, commercialization and reduction of costs and other efforts designed to promote and expand the use of EE measures and distributed generation technologies, such as private solar and battery storage, in Duke Energy service territories could reduce recovery of fixed costs in Duke Energy service territories or result in customers leaving the electric distribution system or an increase in customer net energy metering, which allows customers with private solar to receive bill credits for surplus power up to the full retail credit amount.”

Annual report 2025A · The company itself

“Advances in distributed generation technologies that produce power, including fuel cells, microturbines, wind turbines and solar cells, may reduce the cost of alternative methods of producing power to a level competitive with central power station electric production utilized by the Duke Energy Registrants.”

Annual report 2025A · The company itself

“Rapidly rising prices as a result of inflation, tariffs, or other factors may impact the ability of the Company to recover costs timely or execute on its business strategy including the achievement of growth objectives.”

Annual report 2025A · The company itself

“Risks Related to Supply Chain Disruptions, Inflation, Tariffs and Foreign Export Restrictions Duke Energy’s operations and capital projects are exposed to supply chain disruptions, inflation, tariffs and export restrictions. These factors may increase costs, extend lead times for critical equipment and/or delay construction and maintenance activities.”

Annual report 2025A · The company itself

“Federal and state regulations, laws, commercialization and reduction of costs and other efforts designed to promote and expand the use of EE measures and distributed generation technologies, such as private solar and battery storage, in Duke Energy service territories could reduce recovery of fixed costs in Duke Energy service territories or result in customers leaving the electric distribution system or an increase in customer net energy metering, which allows customers with private solar to receive bill credits for surplus power up to the full retail credit amount.”

Annual report 2025A · The company itself

“RISK FACTORS Additionally, new EPA rules issued in April 2024 impose stringent GHG emission reduction standards, revised air toxic limits, and wastewater discharge limitations that may impact the achievement of carbon-reductions, and operational timeline and costs associated with certain new and existing generation.”

Annual report 2025A · The company itself

“The Duke Energy Registrants are subject to risks associated with their ability to obtain adequate insurance at acceptable costs. The financial condition of some insurance companies, actual or threatened physical or cyberattacks, and natural disasters, among other things, could have disruptive effects on insurance markets.”

Annual report 2025A · The company itself

“Duke Energy’s operations are dependent upon the proper functioning of its internal systems, including the information technology systems that support our underlying business processes. Any significant failure or malfunction of such information technology systems may result in disruptions of our operations.”

Annual report 2025A · The company itself

“The continued threat of terrorism and the impact of retaliatory military and other action by the U.S. and its allies may lead to increased political, economic or financial market instability or volatility in prices for commodities including natural gas and oil, which may have material adverse effects in ways the Duke Energy Registrants cannot predict at this time.”

Annual report 2025A · The company itself

“Risks Related to Supply Chain Disruptions, Inflation, Tariffs and Foreign Export Restrictions Duke Energy’s operations and capital projects are exposed to supply chain disruptions, inflation, tariffs and export restrictions. These factors may increase costs, extend lead times for critical equipment and/or delay construction and maintenance activities.”

Annual report 2025A · The company itself

“Supportive policies may be needed to facilitate the siting and cost recovery of transmission and distribution upgrades needed to accommodate the build out of new generation facilities, including large volumes of renewables and energy storage.”

Annual report 2025A · The company itself

“Growth and retention of customer accounts and growth of customer usage each directly influence demand for electricity and natural gas and the need for additional power generation and delivery facilities. Customer growth and customer usage are affected by several factors outside the control of the Duke Energy Registrants, such as mandated EE measures, demand-side management goals, advancements in technology that may impact the energy usage by large commercial customers, such as data centers, distributed generation resources and economic and demographic conditions, such as inflation, tariffs, and interest rate volatility, population changes, job and income growth, housing starts, new business formation and the overall level of economic activity.”

Annual report 2025A · The company itself