Brian Savoy
Executive Vice President and Chief Financial Officer at Duke Energy
Thanks, Lynn, and good morning, everyone. I'll start with a brief discussion on quarterly results. As shown on Slide 8, our third quarter reported earnings per share were $1.59, and our adjusted earnings per share were $1.94. This compares to reported and adjusted earnings per share of $1.81 and $1.78 last year. Please see the non-GAAP reconciliation in today's materials for additional details. Within the operating segments, Electric Utilities and Infrastructure results were down $0.01 per share compared to last year. We experienced earnings' growth from rate cases and riders, favorable weather and lower O&M from our cost mitigation initiatives, which I will discuss further in a moment. These positive items were offset by lower weather-normalized volumes, higher storm costs and higher interest expense. Shifting to Gas Utilities and Infrastructure. Results were up $0.01 due to riders and customer growth. And within the Other segment, we were up $0.16 over the prior year, primarily due to a lower effective tax rate which reflects the ongoing tax efficiency efforts in the company. We expect our full year 2023 effective tax rate to be at the low end of our 11% to 13% guidance range. As Lynn mentioned, we are tightening our full year 2023 guidance range to $5.55 to $5.65.
We entered the year with one of the mildest winters on record. And although weather improved in the third quarter, we remain $0.20 below normal. We also continued to see weakness in volumes estimated at approximately $0.20 year-to-date, some of which may be attributable to weather, but also to a softening of industrial load and return to work for residential customers. To mitigate the impact, we have increased our 2023 agility target to $0.30, which includes tactical O&M savings, a lower effective tax rate and other levers. As we look to the fourth quarter, we expect a strong finish to the year, targeting $1.50 to $1.60 per share. Our original plan was back-end loaded due to growth from rate cases and riders. We will also see the benefit of our ongoing cost management efforts. We are closely monitoring volume trends and have included fourth quarter drivers in the appendix. Turning to Slide 9. Let me discuss more specifics on volume trends.
Volumes are down 1.2% on a rolling 12-month basis. Many of our industrial customers are acknowledging a near-term pullback, managing inventory levels and cost in a disciplined way due to uncertainty in the broader economy. Most are describing the pullback as temporary, and there is optimism about a turnaround in mid- to late 2024 and into 2025. We continue to see strong customer growth from population migration and robust economic development, giving us confidence in growth over the long term. Based on recent success in economic development efforts in key sectors such as battery, EVs, semiconductors and data centers, we see meaningful load growth over the next several years as outlined on Slide 9. For example, in 2024, we expect economic development projects coming online will add between 1,000 and 2,000 gigawatt hours. As we look further out, we have line of sight to 7,000 to 9,000 gigawatt hours by the end of 2027, giving us confidence in our 0.5% to 1% growth rate. Turning to Slide 10. Let me spend a few minutes on 2024. Consistent with historical practice, we will provide 2024 earnings' guidance and our detailed capital and financing plans in our February update. Today, we have provided growth drivers for 2024. We've executed an active regulatory calendar this year that has yielded constructive outcomes as we head into next year.
The multiyear rate plan in DEP will be in effect for a full year and we expect permanent rates under the DEC multiyear rate plan to be effective in January. In Florida, we will see the impact of the third year of our multiyear rate plan and growth from storm protection plan investments. In the Midwest, we'll see the impact of our Kentucky rate case and grid riders in Indiana and Ohio. In the Gas segment, we will see robust growth from rate cases, integrity management investments and customer additions. From a load perspective, we project a pickup in 2024 from return to normal weather. Additionally, while we continue to closely monitor customer usage trends, we expect higher weather-normalized volumes driven by economic development activity and residential customer growth. Recall, residential decoupling will be in place in 2024 in North Carolina. So both DEC and DEP revenue growth will be based on customer increases, which have been robust. We expect interest rates to be higher for longer, resulting in increased financing cost in 2024. For O&M, we have aggressive efforts underway to sustain all cost savings identified in 2022 for 2023 as well as about half of the agility efforts we identified during the course of 2023 to mitigate weather and volumes. As we continue to pursue a technology-enabled, best-in-class cost structure, we expect our culture of continuous improvement to drive 2024 O&M to be lower than 2023 and significantly below our spending level in 2022. Moving to Slide 11.
Let me highlight some of the credit supportive actions we've taken to maintain balance sheet strength. We continue to collect deferred fuel balances and have filed for recovery of all remaining uncollected 2022 fuel costs with about 90% approved and in-rates. We're on pace to recover $1.7 billion of deferred fuel costs in 2023 and expect our deferred fuel balance to be back in line with our historical average by the end of 2024. As Lynn mentioned, we completed the sale of our commercial renewables business in October. With that, about $1.5 billion of commercial renewable debt will come off the balance sheet, further supporting our credit metrics. In August, as part of our ongoing DEC North Carolina rate case, we reached a settlement with public staff on the treatment of nuclear PTCs related to the Inflation Reduction Act. The settlement provides for the flowback of annual PTCs to customers over a 4-year amortization period. If approved by the commission, this settlement would provide savings for customers and be supportive to our credit metrics. We intend to utilize the transferability provisions of the IRA and have engaged an external advisor to run a formal auction-style process, providing access to a broad range of qualified buyers. With these positive developments, we are targeting FFO-to-debt between 13% and 14% in 2023 and 14% in 2024 through 2027. Finally, as I mentioned, we will provide an update in February on our financing plan, along with a comprehensive refresh and roll-forward of our 5-year capital plan.
We expect our capital plan to increase as we move further into the energy transition. We will take a balanced approach to funding the incremental capital, supporting our growth rate and balance sheet strength. As part of this balanced approach, we will evaluate modest funding through our dividend reinvestment plan and at the market program. The growth potential in our business is at a level we haven't seen in decades. For customers, we will achieve the right balance of affordability, reliability and increasing clean energy. And for investors, we will achieve growth while maintaining balance sheet strength. Moving to Slide 12. We're executing on our priorities and are excited about the path ahead as a fully regulated company. We operate in constructive growing jurisdictions, which combined with our $65 billion 5-year capital plan, strong operations and cost efficiency capabilities give us confidence in our 5% to 7% growth rate through 2027. Our attractive dividend yield, coupled with long-term earnings' growth from investments in our regulated utilities, provide a compelling risk-adjusted return for shareholders. With that, we'll open the line for your questions.
