Duke Energy Kentucky Environmental Surcharge Six-Month Review

COMMONWEALTH OF KENTUCKY BEFORE THE PUBLIC SERVICE COMMISSION In the Matter of:

O R D E R On April 13, 2018, the Commission approved Duke Energy Kentucky, Inc.'s (Duke Kentucky) environmental surcharge application and established a surcharge mechanism. Pursuant to KRS 278.183(3), at six-month intervals, the Commission must 1 review the past operations of the environmental surcharge, disallow any surcharge amounts found not to be just and reasonable, and reconcile past surcharges with actual costs recoverable pursuant to KRS 278.183(1). On its own motion, the Commission initiates the six-month review of Duke Kentucky's environmental surcharge for the billing period ending November 30, 2025. 2 To facilitate this review, a procedural schedule is set forth in Appendix A to this Order. In accordance with that schedule, Duke Kentucky is to file prepared direct testimony in support of the reasonableness of the application of its environmental

Case No. 2017-00321, Electronic Application of Duke Energy Kentucky, Inc. for: 1) An Adjustment 1

of the Electric Rates; 2) Approval of an Environmental Compliance Plan and Surcharge Mechanism; 3) Approval of New Tariffs; 4) Approval of Accounting Practices to Establish Regulatory Assets and Liabilities; and 5) All Other Required Approvals and Relief (Ky. PSC Apr. 13, 2018). ELECTRONIC EXAMINATION BY THE PUBLIC )

SERVICE COMMISSION OF THE ) Duke Kentucky's surcharge is billed on a two-month lag. 2ENVIRONMENTAL SURCHARGE MECHANISM ) CASE NO. OF DUKE ENERGY KENTUCKY, INC. FOR THE ) 2026-00041 SIX-MONTH BILLING PERIOD ENDING ) NOVEMBER 30, 2025. )

surcharge mechanism during the periods under review. In addition, Duke Kentucky is to file its responses to the information requested in Appendix B to this Order and should respond to any future requests for information propounded by Commission Staff by the date or dates set forth on any such requests. Additionally, any hearing scheduled in this matter shall be held on the designated day and continue until called from the bench by the presiding officer. Pursuant to 807 KAR 5:001, Section 2, if the hearing is not concluded on the designated day, the hearing may be continued upon verbal announcement by the presiding officer. A verbal announcement made by the presiding officer shall be proper notice of the continued hearing. Hearings are held in the Richard Raff Hearing Room at the offices of the Public Service Commission at 211 Sower Boulevard, Frankfort, Kentucky. Witnesses who sponsor schedules, testimony, or responses to requests for information are expected to participate in person at a hearing. IT IS THEREFORE ORDERED that:

1. This proceeding is initiated to review Duke Kentucky's environmental
   surcharge for the billing period set forth in this Order.

2. The procedural schedule set forth in Appendix A to this Order shall be
   followed.

3. On or before the date set forth in the procedural schedule, Duke Kentucky
   shall file its responses to the information requested in Appendix B attached to this Order.

4. Duke Kentucky shall respond to any additional requests for information
   propounded by Commission Staff as provided in those requests.

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1. Unless otherwise ordered by the Commission, the procedures set forth in
   807 KAR 5:001, Section 8, related to the service and electronic filing of papers shall be followed in this proceeding.

2. Any party filing a paper with the Commission shall file an electronic copy in
   accordance with the electronic filing procedures set forth in 807 KAR 5:001, Section 8. Electronic documents shall be in portable document format (PDF), shall be searchable, and shall be appropriately bookmarked. The Commission directs the parties to the Commission's July 22, 2021 Order in Case No. 2020-00085 regarding filings with the 3 Commission.

3. If a party objects to the use of electronic filing procedures and the
   Commission determines that good cause exists to excuse that party from the use of electronic filing procedures, service of documents on that party and by that party shall be made in accordance with 807 KAR 5:001, Section 4(8).

4. Pursuant to 807 KAR 5:001, Section 8(9), within seven days of the date of
   service of this Order, Duke Kentucky shall file a written statement that it waives any right to service of Commission Orders by United States mail and that it or its authorized agent possesses the facilities to receive electronic submissions.

5. As set forth in 807 KAR 5:001, Section 4(11), a person requesting
   intervention in a Commission proceeding is required to demonstrate either (1) a special interest in the proceeding, which is not adequately represented in the case, or (2) that the intervention is likely to present issues or develop facts that will assist the Commission in

Case No. 2020-00085, Electronic Emergency Docket Related to the Novel Coronavirus COVID-3

19 (Ky. PSC July 22, 2021), Order (in which the Commission ordered that for case filings made on and after

March 16, 2020, filers are NOT required to file the original physical copies of the filings required by 807 KAR 5:001, Section 8).

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fully considering the matter without unduly complicating or disrupting the proceedings. Therefore, any person requesting to intervene in a Commission proceeding must state with specificity the person's special interest that is not otherwise adequately represented, or the issues and facts the person will present that will assist the Commission in fully considering the matter. A mere recitation of the quantity of utility service consumed by the movant or a general statement regarding the potential impact of possible modification of rates will not be deemed sufficient to establish a special interest.

1. Any motion to intervene filed after the dates established in the procedural
   schedule shall show a basis for intervention and good cause for being untimely. If the untimely motion is granted, the movant shall accept and abide by the existing procedural schedule.

2. Unless a party granted leave to intervene states its objection to the use of
   electronic filing procedures in a motion for intervention, the party shall:

3. Be deemed to have consented to the use of electronic filing
   procedures and the service of all papers, including Orders of the Commission, by electronic means; and

4. Within seven days of the date of service of an Order of the
   Commission granting its intervention, file with the Commission a written statement that: (1) It, or its authorized agent, possesses the facilities to receive electronic transmissions; and (2) Sets forth the electronic mail address to which all electronic notices and messages related to this proceeding shall be served.

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1. Duke Kentucky shall, by the date set forth in Appendix A, file its prepared
   direct testimony in support of the reasonableness of the application of its environmental surcharge mechanism during the period under review.

2. Within seven days of the Commission's granting intervention to a party,
   Duke Kentucky shall provide the party with a copy of its monthly environmental surcharge reports as filed with the Commission for the review period.

3. Duke Kentucky's monthly environmental surcharge reports and supporting
   data for the review period set forth in this Order shall be incorporated by reference into the record of this case.

4. The Commission does not look favorably upon motions for continuance.
   Accordingly, motions for extensions of time with respect to the schedule herein shall be made in writing and will be granted only upon a showing of good cause.

5. The Commission does not look favorably upon motions to excuse witnesses
   from testifying at Commission hearings. Accordingly, motions to excuse a witness from testifying at a Commission hearing, from testifying in person at a Commission hearing, or to substitute a witness for one who has sponsored testimony shall be made in writing and will be granted only upon a showing of good cause.

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Entered on this 3rd day of April, 2026. PUBLIC SERVICE COMMISSION

___________________________ Angie Hatton Chairman

___________________________ Mary Pat Regan Commissioner

___________________________ Andrew W. Wood Commissioner

ATTEST:

______________________ Linda C. Bridwell, PE Executive Director

Case No. 2026-00041

APPENDIX A APPENDIX TO AN ORDER OF THE KENTUCKY PUBLIC SERVICE COMMISSION IN CASE NO. 2026-00041 DATED APR 03 2026

Duke Kentucky shall file its prepared direct testimony and responses to the information requested in Appendix B

no later than ........................................................................................................ 04/24/2026

A person interested in becoming a party to this proceeding shall file a motion to intervene with the Commission pursuant

to 807 KAR 5:001, Section 4(11), no later than ................................................. 05/01/2026

All additional requests for information to Duke Kentucky shall

be filed no later than ........................................................................................... 05/15/2026

Duke Kentucky shall file responses to additional requests for

information no later than..................................................................................... 06/01/2026

Intervenor testimony, if any, in verified prepared form

shall be filed no later than .................................................................................. 06/15/2026

All requests for information to Intervenors shall be

filed no later than ................................................................................................ 06/30/2026

Intervenors shall file responses to requests for

information no later than..................................................................................... 07/15/2026

Last day for Duke Kentucky or Intervenors to request a hearing or submit this case

for a decision based on the record..................................................................... 07/29/2026

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APPENDIX B APPENDIX TO AN ORDER OF THE KENTUCKY PUBLIC SERVICE COMMISSION IN CASE NO. 2026-00041 DATED APR 03 2026

COMMISSION STAFF'S FIRST REQUEST FOR INFORMATION TO DUKE ENERGY KENTUCKY, INC.

Duke Energy Kentucky, Inc.'s (Duke Kentucky), pursuant to 807 KAR 5:001, shall

file with the Commission an electronic version of the following information. The information requested is due on April 24, 2026. The Commission directs Duke Kentucky

to the Commission's July 22, 2021 Order in Case No. 2020-00085 regarding filings with 4 the Commission. Electronic documents shall be in portable document format (PDF), shall be searchable, and shall be appropriately bookmarked. Each response shall include the question to which the response is made and shall include the name of the witness responsible for responding to the questions related to the information provided. Each response shall be answered under oath or, for representatives of a public or private corporation or a partnership or association or a governmental agency, be accompanied by a signed certification of the preparer or the person supervising the preparation of the response on behalf of the entity that the response is true and accurate to the best of that person's knowledge, information, and belief formed after a reasonable inquiry. Duke Kentucky shall make timely amendment to any prior response if Duke Kentucky obtains information that indicates the response was incorrect or incomplete

Case No. 2020-00085, Electronic Emergency Docket Related to the Novel Coronavirus COVID-4 19 (Ky. PSC July 22, 2021), Order (in which the Commission ordered that for case filings made on and after March 16, 2020, filers are NOT required to file the original physical copies of the filings required by 807 KAR 5:001, Section 8).

Page 1 of 4

when made or, though correct or complete when made, is now incorrect or incomplete in any material respect. For any request to which Duke Kentucky fails or refuses to furnish all or part of the requested information, Duke Kentucky shall provide a written explanation of the specific grounds for its failure to completely and precisely respond. Careful attention shall be given to copied and scanned material to ensure that it is legible. When the requested information has been previously provided in this proceeding in the requested format, reference may be made to the specific location of that information in responding to this request. When applicable, the requested information shall be separately provided for total company operations and jurisdictional operations. When filing a paper containing personal information, Duke Kentucky, in accordance with 807 KAR 5:001, Section 4(10), encrypt or redact the paper so that personal information cannot be read.

1. Provide a summary schedule showing the calculation of E(m) (Return on Rate Base + Operating Expenses - Emission Allowance Sales + Prior Period Adjustment + (Over)/ Under Recovery) and the surcharge factor for the expense months covered by the billing periods under review. Use ES Form 1.10 as a model for this summary. Include two expense months subsequent to the review period in order to show the over- and under-recovery adjustments for the months included for the billing periods. The summary schedule should incorporate any corrections or revisions to the monthly surcharge filings that Duke Kentucky has submitted for the billing period under review. Provide the schedule and all supporting calculations and documentation in Excel spreadsheet format with all formulas, columns, and rows unprotected and fully accessible.

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1. For the period under review, provide a calculation of any additional over- or
   under-recovery amount Duke Kentucky believes needs to be recognized, and, if any, propose an amortization period. Provide the schedule and all supporting calculations and documentation in Excel spreadsheet format with all formulas, columns, and rows unprotected and fully accessible.

2. Provide the actual average residential customer's monthly usage as of
   November 30, 2025. Based on this usage amount, provide the dollar impact any additional over- or under-recovery will have on the average residential customer's monthly bill for the requested amortization period.

3. Refer to ES Form 2.30, Inventory and Expense of Emission Allowances, for
   each of the expense months covered by the applicable billing periods.

4. For the sulfur dioxide emission allowance inventory, explain the
   reason(s) for any purchases of allowances reported during these expense months.

5. For the nitrogen oxide emission allowance inventory, explain the
   reason(s) for any purchases of allowances reported during these expense months.

6. For each month in the six-month review period, explain how any
   purchases of allowances comply with Duke Kentucky's emissions allowance strategy

plan.

1. For each month in the six-month review period, provide the calculation that supports the total cost of allowances utilized that is then carried to ES Form 2.00. Provide the schedule and all supporting calculations and documentation in Excel spreadsheet format with all formulas, columns, and rows unprotected and fully accessible.

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1. Provide an explanation for any fluctuations in the monthly average
   cost of allowances determined in 4.d.

2. Refer to ES Form 2.50, Environmental Reagent Expenses for each of the
   expense months of the period under review. Explain the reason(s) for any change in the expense levels from month to month if that change is greater than plus or minus 10 percent for each of the following operating and maintenance costs listed:

3. Ammonia

4. Lime

5. Hydrated Lime

6. Magnesium Hydroxide

7. pH Control Treatment
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Service List for 2026-00041

• Duke Energy Kentucky, Inc. 139 East Fourth Street Cincinnati, OH 45202
• Denotes served by Email