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Fitch revises outlook of Duke Energy to stable from negative

Fitch Ratings on Sept. 6 revised the ratings outlook of Duke Energy Corp. to stable from negative and affirmed the long-term issuer default rating of the company at BBB+.

"The rating and Stable Outlook primarily reflect the strength of Duke's relatively low-risk regulated utility operations, which account for greater than 95% of Duke's consolidated operating income and EBITDA," the rating agency said in a report.

Fitch added that Duke benefits from diverse utility operations that are mostly in states with constructive regulatory environments.

"Duke's largest utility subsidiaries, Duke Energy Carolinas LLC, and Duke Energy Progress LLC, received constructive rate case decisions earlier this year, alleviating concerns related to the recovery of coal ash remediation costs and federal tax reform, both of which potentially could have had materially negative credit implications," Fitch said.

In June, the North Carolina Utilities Commission allowed Duke Energy Carolinas to recover $546 million in deferred coal ash costs over five years, but assessed a $70 million management penalty that will reduce it by $14 million per year.

In February, the commission cleared Duke Energy Progress to recover approximately $232 million in coal ash costs spread out over five years.