Duke Energy 2013 Annual Report Download - page 146

128
PART II
DUKE ENERGY CORPORATION • DUKE ENERGY CAROLINAS, LLC • PROGRESS ENERGY, INC. •
DUKE ENERGY PROGRESS, INC. • DUKE ENERGY FLORIDA, INC. • DUKE ENERGY OHIO, INC. • DUKE ENERGY INDIANA, INC.
Combined Notes to Consolidated Financial Statements – (Continued)
a $154 million payment, which represented payment of the total judgment,
including prejudgment interest, and a required premium equivalent to two years
of interest, to the Broward County Clerk of Court bond account. Progress Energy
continued to accrue interest related to this judgment.
On October 3, 2012, the Florida Fourth District Court of Appeals reversed
the lower court ruling. The court held that Global was entitled to approximately
$90 million of the amount paid into the registry of the court. Progress Energy
was entitled to a refund of the remainder of the funds. Progress Energy received
cash and recorded a $63 million pretax gain for the refund in December 2012.
The gain was recorded in Income from Discontinued Operations, net of tax in the
Consolidated Statements of Operations.
On May 9, 2013, Global led a Seventh Amended Complaint asserting a
single count for breach of the Asset Purchase Agreement and seeking specic
performance. A trial is scheduled to commence in the second quarter of 2014.
In a second suit led in the Superior Court for Wake County, N.C.,
Progress Synfuel Holdings, Inc. et al. v. U.S. Global, LLC (the North Carolina
Global Case), the Progress Energy Afliates seek declaratory relief consistent
with their interpretation of the Asset Purchase Agreement. In August 2003, the
Wake County Superior Court stayed the North Carolina Global Case, pending the
outcome of the Florida Global Case. Based upon the verdict in the Florida Global
Case, Progress Energy anticipates dismissal of the North Carolina Global Case.
Progress Energy does not expect the resolution of these matters to have a
material effect on it results of operations, cash ows or nancial position.
Duke Energy Progress and Duke Energy Florida
Spent Nuclear Fuel Matters
On December 12, 2011, Duke Energy Progress and Duke Energy Florida
sued the United States in the U.S. Court of Federal Claims. The lawsuit claims
the DOE breached a contract in failing to accept spent nuclear fuel under the
Nuclear Waste Policy Act of 1982 and asserts damages for the cost of on-site
storage. Claims for all periods prior to 2006 have been resolved. Duke Energy
Progress and Duke Energy Florida assert damages of $84 million and $21 million,
respectively, for the period January 1, 2006 through December 31, 2010. Duke
Energy Progress and Duke Energy Florida may le subsequent damage claims as
they incur additional costs. Duke Energy Progress and Duke Energy Florida cannot
predict the outcome of this matter.
Duke Energy Ohio
Antitrust Lawsuit
In January 2008, four plaintiffs, including individual, industrial and
nonprot customers, led a lawsuit against Duke Energy Ohio in federal court
in the Southern District of Ohio. Plaintiffs alleged Duke Energy Ohio conspired
to provide inequitable and unfair price advantages for certain large business
consumers by entering into non-public option agreements in exchange for their
withdrawal of challenges to Duke Energy Ohio’s Rate Stabilization Plan (RSP)
implemented in early 2005. A ruling is pending on the plaintiffs’ motion to certify
this matter as a class action. It is not possible to predict whether Duke Energy
Ohio will incur any liability or to estimate the damages which may be incurred in
connection with this lawsuit.
Asbestos-related Injuries and Damages Claims
Duke Energy Ohio has been named as a defendant or co-defendant in
lawsuits related to asbestos exposure at its electric generating stations. The
impact on Duke Energy Ohio’s results of operations, cash ows or nancial
position of these cases to date has not been material. Based on estimates under
varying assumptions concerning uncertainties, such as, among others: (i) the
number of contractors potentially exposed to asbestos during construction or
maintenance of Duke Energy Ohio generating plants, (ii) the possible incidence
of various illnesses among exposed workers, and (iii) the potential settlement
costs without federal or other legislation that addresses asbestos tort actions,
Duke Energy Ohio estimates that the range of reasonably possible exposure
in existing and future suits over the foreseeable future is not material. This
assessment may change as additional settlements occur, claims are made, and
more case law is established.
Duke Energy Indiana
Edwardsport IGCC
On December 11, 2012, Duke Energy Indiana led an arbitration action
against General Electric Company and Bechtel Corporation in connection with
their work at the Edwardsport IGCC facility. Duke Energy Indiana is seeking
damages of not less than $560 million. An arbitration hearing is scheduled for
October 2014. Duke Energy Indiana cannot predict the outcome of this matter.
Other Litigation and Legal Proceedings
The Duke Energy Registrants are involved in other legal, tax and regulatory
proceedings arising in the ordinary course of business, some of which involve
signicant amounts. The Duke Energy Registrants believe the nal disposition of
these proceedings will not have a material effect on their results of operations,
cash ows or nancial position.
The table below presents recorded reserves based on management’s best
estimate of probable loss for legal matters discussed above and the associated
insurance recoveries. The reasonably possible range of loss for all non-asbestos
related matters in excess of recorded reserves is not material.
December 31,
(in millions) 2013 2012
Reserves for Legal and Other Matters(a)
Duke Energy(b) $824 $846
Duke Energy Carolinas(b) 616 751
Progress Energy 78 79
Duke Energy Progress 10 12
Duke Energy Florida(c) 43 47
Duke Energy Indiana 8 8
Probable Insurance Recoveries(d)
Duke Energy(e) $649 $781
Duke Energy Carolinas(e) 649 781
(a) Classied in the respective Consolidated Balance Sheets in Other within Deferred Credits and Other
Liabilities and Other within Current Liabilities.
(b) Includes reserves for asbestos-related injuries and damages claims.
(c) Includes workers’ compensation claims.
(d) Classied in the respective Consolidated Balance Sheets in Other within Investments and Other Assets
and Receivables.
(e) Relates to recoveries associated with asbestos-related injuries and damages claims.