Duke Energy 2015 Annual Report Download - page 199

179
PART II
DUKE ENERGY CORPORATION • DUKE ENERGY CAROLINAS, LLC • PROGRESS ENERGY, INC. •
DUKE ENERGY PROGRESS, LLC. • DUKE ENERGY FLORIDA, LLC. • DUKE ENERGY OHIO, INC. • DUKE ENERGY INDIANA, INC.
Combined Notes to Consolidated Financial Statements – (Continued)
The following table outlines amounts and expiration dates of the credit facilities.
DERF DEPR DEFR
Credit facility amount (in millions) $ 425 $ 300 $ 225
Expiration date December 2018 February 2019 March 2017
CRC
On a revolving basis, Duke Energy Ohio and Duke Energy Indiana sell to
CRC certain accounts receivable arising from the sale of electricity and related
services. The receivables sold are securitized by CRC through a $325 million
credit facility managed by two unrelated third parties. Borrowing availability from
the credit facility is limited to the amount of qualified receivables sold to CRC.
The sole source of funds to satisfy the related debt obligation is cash collections
from the receivables. The credit facility expires in December 2018 and is
reflected on Duke Energy’s Consolidated Balance Sheets as Long-Term Debt.
The proceeds Duke Energy Ohio and Duke Energy Indiana receive from
the sale of receivables to CRC are typically 75 percent cash and 25 percent in
the form of a subordinated note from CRC. The subordinated note is a retained
interest in the receivables sold. Depending on collection experience, additional
equity infusions to CRC may be required by Duke Energy to maintain a minimum
equity balance of $3 million. There were no infusions to CRC during the years
ended December 31, 2015 and 2014.
CRC is considered a VIE because (i) equity capitalization is insufficient
to support its operations, (ii) power to direct the most significant activities that
impact economic performance of the entity are not performed by the equity
holder, Cinergy, and (iii) deficiencies in net worth of CRC are not funded by
Cinergy, but by Duke Energy. The most significant activity of CRC relates to the
decisions made with respect to the management of delinquent receivables. Duke
Energy consolidates CRC as it makes these decisions. Neither Duke Energy Ohio
nor Duke Energy Indiana consolidate CRC.
Renewables
Certain of Duke Energy’s renewable energy facilities are VIEs due to
long-term fixed price power purchase agreements. These fixed price agreements
effectively transfer commodity price risk to the buyer of the power. Certain other
of Duke Energy’s renewable energy facilities are VIEs due to Duke Energy issuing
guarantees for debt service and operations and maintenance reserves in support
of debt financings. For certain VIEs, assets are restricted and cannot be pledged
as collateral or sold to third parties without prior approval of debt holders.
The most significant activities that impact the economic performance of these
renewable energy facilities were decisions associated with siting, negotiating
purchase power agreements, engineering, procurement and construction and
decisions associated with ongoing operations and maintenance-related activities.
Duke Energy consolidates the entities as it makes all of these decisions.
NON-CONSOLIDATED VIEs
The tables below show VIEs not consolidated and how these entities impact the Consolidated Balance Sheets.
December 31, 2015
Duke Energy
(in millions) Renewables Other Total
Duke
Energy
Ohio
Duke
Energy
Indiana
Receivables $ — $ — $ — $ 47 $ 60
Investments in equity method unconsolidated affiliates 235 152 387 — —
Total assets $ 235 $152 $387 $ 47 $ 60
Other current liabilities — 3 3 — —
Deferred credits and other liabilities — 14 14 — —
Total liabilities $ — $ 17 $ 17 $ — $ —
Net assets (liabilities) $ 235 $135 $370 $ 47 $ 60