Duke Energy Storm Funding Entity Details Governance, U.S. Bank Lawsuit

TL;DR

**Duke Energy's storm funding vehicle is a pure administrative play, but watch the U.S. Bank lawsuit – it's a potential ripple for securitization trust integrity.**

AI Summary

Duke Energy Carolinas NC Storm Funding II LLC (DECNCSFII), a bankruptcy-remote subsidiary of Duke Energy Carolinas, LLC, filed its 10-K for the fiscal year ended December 31, 2025. This filing primarily details its corporate structure, governance, and compliance as a special purpose entity for storm recovery property securitization. The company reported no revenue or net income figures in this administrative filing, as its core function is to facilitate the securitization of storm recovery costs for its parent, Duke Energy Carolinas, LLC. Key personnel changes include Nicholas J. Giaimo becoming President, CFO, and Treasurer of DECNCSFII in January 2026, and Abigail L. Motsinger appointed Senior Vice President, Chief Accounting Officer, and Controller of Duke Energy Carolinas, LLC, and Manager and Controller of DECNCSFII in March 2026. A significant ongoing risk involves U.S. Bank National Association, an indenture trustee for DECNCSFII, which is a defendant in the 'National Collegiate Student Loan Master Trust I, et al. v. U.S. Bank National Association, et al.' lawsuit concerning alleged misconduct in student loan trust administration, though U.S. Bank denies liability. The strategic outlook for DECNCSFII remains focused on its role in securitizing storm recovery costs, as evidenced by the September 30, 2025, Storm Recovery Property Servicing Agreement and Purchase and Sale Agreement.

Why It Matters

This 10-K provides crucial transparency into the financial plumbing Duke Energy Carolinas uses to manage storm recovery costs, a significant and recurring expense for utilities in hurricane-prone regions. For investors, understanding DECNCSFII's structure and the legal entanglements of its key partners, like U.S. Bank National Association, is vital for assessing the stability and risk profile of Duke Energy Carolinas' securitization strategy. Employees and customers of Duke Energy Carolinas are indirectly impacted as efficient storm cost recovery can influence future rate adjustments. In the broader market, this filing highlights the increasing use of securitization vehicles by utilities to offload specific risks, setting a precedent for how other energy companies might manage similar liabilities in a competitive and climate-challenged landscape.

Risk Assessment

Risk Level: medium — The risk level is medium due to the ongoing legal proceedings involving U.S. Bank National Association, a critical indenture trustee for DECNCSFII, in the 'National Collegiate Student Loan Master Trust I, et al. v. U.S. Bank National Association, et al.' lawsuit. While U.S. Bank denies liability and the case is stayed, any adverse outcome could impact the perceived reliability and operational stability of a key third-party service provider for DECNCSFII's securitization structure, potentially affecting investor confidence in the storm recovery bonds.

Analyst Insight

Investors should monitor the 'National Collegiate Student Loan Master Trust I' lawsuit involving U.S. Bank National Association, as its outcome could signal broader risks for securitization trusts. While DECNCSFII itself is bankruptcy-remote, any operational disruption or reputational damage to its indenture trustee could indirectly affect the market's perception of the storm recovery bonds.

Financial Highlights

debt To Equity

N/A

revenue

$0

operating Margin

N/A

total Assets

N/A

total Debt

N/A

net Income

$0

eps

$0

gross Margin

N/A

cash Position

N/A

revenue Growth

N/A

Executive Compensation

Key Numbers

• 2025-12-31 — Fiscal Year End (Reporting period for this 10-K filing.)
• 2026-03-26 — Filing Date (Date the 10-K was filed with the SEC.)
• $2,000 — Independent Manager Fee (Annual compensation paid to Global Securitization Services, LLC for independent manager services.)
• 2025-09-30 — Indenture Date (Date of the Indenture between DECNCSFII and U.S. Bank Trust Company, N.A.)
• 2018-03-09 — Lawsuit Filing Date (Date the 'National Collegiate Student Loan Master Trust I' lawsuit was filed against U.S. Bank National Association.)

Key Players & Entities

• Duke Energy Carolinas NC Storm Funding II LLC (company) — registrant and special purpose entity
• Duke Energy Carolinas, LLC (company) — depositor, sponsor, servicer, and parent company
• U.S. Bank National Association (company) — securities intermediary, account bank, and indenture trustee facing lawsuit
• Nicholas J. Giaimo (person) — President, CFO, and Treasurer of DECNCSFII since January 2026
• Abigail L. Motsinger (person) — Controller and Manager of DECNCSFII since March 2026
• Bernard J. Angelo (person) — Independent Manager of DECNCSFII since July 2025
• Global Securitization Services, LLC (company) — employer of independent manager and recipient of $2,000 annual fee
• Deloitte & Touche LLP (company) — auditor for Duke Energy Carolinas, LLC's servicing compliance
• Ernst and Young, LLP (company) — auditor for U.S. Bank Trust Company, National Association's servicing compliance
• $2,000 (dollar_amount) — annual independent manager fee paid to Global Securitization Services, LLC

FAQ

Risk Factors

• Litigation Involving Indenture Trustee [medium — legal]: U.S. Bank National Association, the indenture trustee for DECNCSFII, is a defendant in a lawsuit ('National Collegiate Student Loan Master Trust I, et al. v. U.S. Bank National Association, et al.') filed on March 9, 2018. The lawsuit concerns alleged misconduct in student loan trust administration. While U.S. Bank denies liability, any adverse outcome could impact the trustee's ability to fulfill its duties, potentially affecting DECNCSFII.
• Reliance on Parent Company and Service Providers [low — operational]: DECNCSFII is a bankruptcy-remote subsidiary of Duke Energy Carolinas, LLC, and relies on its parent for operational support and its services. The company also relies on Global Securitization Services, LLC for independent manager services, receiving an annual fee of $2,000. Any disruption in services from these entities could impact DECNCSFII's ability to function as intended.
• Compliance with Code of Ethics [low — regulatory]: DECNCSFII is subject to Duke Energy's 'Code of Business Ethics,' which applies to all officers and employees of Duke Energy and its affiliates. Compliance is administered by Duke Energy's Chief Ethics and Compliance Officer and reported to the Audit Committee. Adherence to this code is crucial for maintaining corporate governance and integrity.

Industry Context

Duke Energy Carolinas NC Storm Funding II LLC operates within the regulated utility sector, specifically focused on storm cost recovery mechanisms. The industry is characterized by significant capital investment in infrastructure and increasing exposure to weather-related events. Utilities are increasingly utilizing securitization structures to manage and finance these costs, transferring risk to capital markets and potentially lowering the cost of recovery for customers.

Regulatory Implications

As a securitization vehicle for storm recovery costs, DECNCSFII is subject to regulatory oversight related to utility cost recovery and financial transactions. Compliance with Duke Energy's Code of Business Ethics is also a key regulatory consideration. The structure aims to ensure that storm costs are recovered efficiently while adhering to regulatory frameworks governing utility operations.

What Investors Should Do

1. Monitor the 'National Collegiate Student Loan Master Trust I' lawsuit
2. Review Duke Energy Carolinas' storm cost recovery filings
3. Assess the role of DECNCSFII in Duke Energy's overall capital structure

Key Dates

• 2025-12-31: Fiscal Year End — Marks the end of the reporting period for the 10-K filing, providing the latest financial and operational snapshot.
• 2026-03-26: 10-K Filing Date — Indicates when the company submitted its annual report to the SEC, reflecting its current status and disclosures.
• 2026-01-01: Nicholas J. Giaimo assumed roles — Nicholas J. Giaimo became President, CFO, and Treasurer of DECNCSFII, indicating a change in key leadership for the entity.
• 2026-03-01: Abigail L. Motsinger assumed roles — Abigail L. Motsinger was appointed Senior Vice President, Chief Accounting Officer, and Controller of Duke Energy Carolinas, LLC, and Manager and Controller of DECNCSFII, signifying a change in accounting and control oversight.
• 2025-07-01: Bernard J. Angelo assumed role — Bernard J. Angelo became Independent Manager of DECNCSFII, indicating a change in the independent oversight of the entity.
• 2018-03-09: Lawsuit Filing Date — The date the 'National Collegiate Student Loan Master Trust I' lawsuit was filed against U.S. Bank National Association, the indenture trustee, highlighting a significant ongoing legal risk.

Glossary

Bankruptcy-remote subsidiary

A legal entity structured to isolate its assets and liabilities from its parent company, typically to protect those assets in the event of the parent's bankruptcy. (DECNCSFII is structured this way to protect the securitized storm recovery property from the financial distress of its parent, Duke Energy Carolinas, LLC.)

Securitization

The process of pooling various types of contractual debt (like mortgages, auto loans, or storm recovery costs) and selling these pools to third-party investors as securities. (This is the core function of DECNCSFII, which facilitates the securitization of storm recovery costs for Duke Energy Carolinas, LLC.)

Indenture Trustee

A financial institution appointed to represent the interests of bondholders in a debt issuance, ensuring the issuer complies with the terms of the indenture agreement. (U.S. Bank National Association serves as the indenture trustee for DECNCSFII, making it a critical party in the securitization structure.)

Storm Recovery Property

Assets or costs incurred by a utility company related to repairing infrastructure and restoring service after severe weather events. (These are the specific costs that DECNCSFII is designed to securitize, allowing Duke Energy Carolinas to recover these expenses.)

Special Purpose Entity (SPE)

An entity created for a specific, limited purpose, often used in financial transactions like securitization to isolate financial risk. (DECNCSFII functions as an SPE to facilitate the securitization of storm recovery costs.)

Year-Over-Year Comparison

This 10-K filing for DECNCSFII indicates no revenue or net income, consistent with its role as a special purpose entity for securitization rather than an operating business. Key personnel changes in early 2026 for both DECNCSFII and its parent, Duke Energy Carolinas, LLC, reflect ongoing corporate governance adjustments. The primary ongoing risk factor related to the indenture trustee's litigation remains a consistent concern from previous periods, highlighting the importance of trustee stability.

Key Financial Figures

• $2,000 — n the annual independent manager fee of $2,000 paid to Global Securitization Services,

Filing Documents

• duk-20251231.htm (10-K) — 90KB
• decncsfii-20251231xex311.htm (EX-31.1) — 7KB
• decncsfii-20251231xex331.htm (EX-33.1) — 50KB
• decncsfii-20251231xex332.htm (EX-33.2) — 79KB
• decncsfii-20251231xex341.htm (EX-34.1) — 8KB
• decncsfii-20251231xex342.htm (EX-34.2) — 7KB
• decncsfii-20251231xex351.htm (EX-35.1) — 6KB
• image_0a.jpg (GRAPHIC) — 8KB
• image_0b.jpg (GRAPHIC) — 74KB
• image_1.jpg (GRAPHIC) — 18KB
• image_2a.jpg (GRAPHIC) — 9KB
• 0002078092-26-000003.txt ( ) — 633KB
• duk-20251231.xsd (EX-101.SCH) — 2KB
• duk-20251231_def.xml (EX-101.DEF) — 20KB
• duk-20251231_lab.xml (EX-101.LAB) — 36KB
• duk-20251231_pre.xml (EX-101.PRE) — 21KB
• duk-20251231_htm.xml (XML) — 6KB

Risk Factors

Item 1A. Risk Factors.

Cybersecurity

Item 1C. Cybersecurity.

Unresolved Staff Comments

Item 1B. Unresolved Staff Comments. None.

Legal Proceedings

Item 3. Legal Proceedings. None.

Mine Safety Disclosures

Item 4. Mine Safety Disclosures. None. PART II The following Items have been omitted pursuant to General Instruction J of Form 10-K:

Market for Registrant's Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities

Item 5. Market for Registrant's Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities.

Selected Financial Data

Item 6. Selected Financial Data.

Management's Discussion and Analysis of Financial Condition and Results of Operations

Item 7. Management's Discussion and Analysis of Financial Condition and Results of Operations.

Quantitative and Qualitative Disclosures About Market Risk

Item 7A. Quantitative and Qualitative Disclosures About Market Risk.

Financial Statements and Supplementary Data

Item 8. Financial Statements and Supplementary Data.

Changes in and Disagreements with Accountants on Accounting and Financial Disclosure

Item 9. Changes in and Disagreements with Accountants on Accounting and Financial Disclosure.

Controls and Procedures

Item 9A. Controls and Procedures.

Other Information

Item 9B. Other Information. None.

Disclosure Regarding Foreign Jurisdictions that Prevent Inspections

Item 9C. Disclosure Regarding Foreign Jurisdictions that Prevent Inspections. None. PART III

Directors, Executive Officers and Corporate Governance

Item 10. Directors, Executive Officers and Corporate Governance. Following are the managers and executive officers of Duke Energy Carolinas NC Storm Funding II LLC ("DECNCSFII") as of the date of the report: Name Age Current and Recent Positions Held Nicholas J. Giaimo 44 Senior Vice President, Treasurer and Chief Risk Officer , Duke Energy Carolinas and Duke Energy Corporation. Mr. Giaimo has served in this role since January 2026, when he also assumed his role as President, Chief Financial Officer and Treasurer of DECNCSFII. Prior to this, he served as Senior Vice President of Financial Planning & Analysis, from November 2024 to January 2026; Vice President Financial Planning & Analysis from May 2021 to November 2024; Director Financial Planning & Analysis Carolinas Electric Utilities, from August 2019 to May 2021; Director Financial Planning & Analysis and CFO of Natural Gas Segment, from October 2016 to August 2019. During his tenure at Piedmont Natural Gas, Mr. Giaimo served as Assistant Treasurer and Director Investor Relations from November 2014 to October 2016 and Manager Capital Markets and Investor Relations, August 2007 to November 2014. Abigail L. Motsinger 42 Senior Vice President, Chief Accounting Officer and Controller. Ms. Motsinger has been appointed to serve as Senior Vice President, Chief Accounting Officer and Controller, effective March 2026. Prior to that she was Vice President, Investor Relations from November 2022 until March 2026; Director, Jurisdictional Forecasting from May 2021 until November 2022; Investor Relations Manager from November 2017 until May 2021; and, prior to that, in various roles of increasing responsibility since joining Duke Energy in 2010. Her role as Manager and Controller of DECNCSFII began in March 2026. Bernard J. Angelo 56 Senior Vice President of Global Securitization Services, LLC. Mr. Angelo assumed his role as Senior Vice President of Global Securitization Services in 1997. In addition, he assumed his r

Executive Compensation

Item 11. Executive Compensation. Other than the annual independent manager fee of $2,000 paid to Global Securitization Services, LLC, DECNCSFII does not pay any compensation to its managers or executive officers.

Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters

Item 12. Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters. None.

Certain Relationships and Related Transactions, and Director Independence

Item 13. Certain Relationships and Related Transactions, and Director Independence. None.

Principal Accounting Fees and Services

Item 14. Principal Accounting Fees and Services. Omitted pursuant to General Instruction J of Form 10-K. PART IV

Exhibits and Financial Statement Schedules

Item 15. Exhibits and Financial Statement Schedules. (a)(1) and (a)(2) Financial Statements and Financial Statement Schedules are omitted pursuant to General Instruction J of Form 10-K as listed under Item 8 of this report. (a)(3) and (b) See Exhibit Index included as the last part of this report, which is incorporated herein by reference. (c) Not applicable.

Form 10-K Summary

Item 16. Form 10-K Summary. None.

(b). Significant Obligors of Pool Assets

Item 1112(b). Significant Obligors of Pool Assets. None.

(b)(2). Credit Enhancement and Other Support, Except For Certain Derivative Instruments

Item 1114(b)(2). Credit Enhancement and Other Support, Except For Certain Derivative Instruments. None.

(b). Certain Derivative Instruments

Item 1115(b). Certain Derivative Instruments. None.

Legal Proceedings

Item 1117. Legal Proceedings. U.S. Bank National Association has provided the following information to the depositor: On March 9, 2018, a law firm purporting to represent fifteen Delaware statutory trusts (the "DSTs") that issued securities backed by student loans (the "Student Loans") filed a lawsuit in the Delaware Court of Chancery against U.S. Bank National Association ("U.S. Bank") in its capacities as indenture trustee and successor special servicer, and three other institutions in their respective transaction capacities, with respect to the DSTs and the Student Loans. This lawsuit is captioned The National Collegiate Student Loan Master Trust I, et al. v. U.S. Bank National Association, et al. , C.A. No. 2018-0167-JRS (Del. Ch.) (the "NCMSLT Action"). The complaint, as amended on June 15, 2018, alleged that the DSTs have been harmed as a result of purported misconduct or omissions by the defendants concerning administration of the trusts and special servicing of the Student Loans. Since the filing of the NCMSLT Action, certain Student Loan borrowers have made assertions against U.S. Bank concerning special servicing that appear to be based on certain allegations made on behalf of the DSTs in the NCMSLT Action. U.S. Bank has filed a motion seeking dismissal of the operative complaint in its entirety with prejudice pursuant to Chancery Court Rules 12(b)(1) and 12(b)(6) or, in the alternative, a stay of the case while other prior filed disputes involving the DSTs and the Student Loans are litigated. On November 7, 2018, the Court ruled that the case should be stayed in its entirety pending resolution of the first-filed cases. On January 21, 2020, the Court entered an order consolidating for pretrial purposes the NCMSLT Action and three other lawsuits pending in the Delaware Court of Chancery concerning the DSTs and the Student Loans, which remains pending. U.S. Bank denies liability in the NCMSLT Action and believes it has performed its obligations as inden

Affiliations and Certain Relationships and Related Transactions

Item 1119. Affiliations and Certain Relationships and Related Transactions. DECNCSFII is a wholly owned subsidiary of Duke Energy Carolinas, LLC, which is the depositor, sponsor and servicer.

Compliance With Applicable Servicing Criteria

Item 1122. Compliance With Applicable Servicing Criteria. See Exhibits 33.1, 33.2, 34.1, and 34.2 of this Form 10-K.

Servicer Compliance Statement

Item 1123. Servicer Compliance Statement. See Exhibit 35.1 of this Form 10-K. SUPPLEMENTAL INFORMATION TO BE FURNISHED WITH REPORTS FILED PURSUANT TO SECTION 15(d) OF THE ACT BY REGISTRANTS WHICH HAVE NOT REGISTERED SECURITIES PURSUANT TO SECTION 12 OF THE ACT No such annual report, proxy statement, form of proxy or other proxy soliciting material has been sent to the registrant's security holders. The registrant will not be sending an annual report or proxy material to its security holders subsequent to the filing of this form. EXHIBIT INDEX Exhibits filed herewith are designated by an asterisk (*). All exhibits not so designated are incorporated by reference to a prior filing, as indicated. Exhibit No. Description of Exhibit 3.1 Certificate of Formation of Duke Energy Carolinas NC Storm Funding II LLC (incorporated by reference to Exhibit 3.1 to Registration Statement on Form SF-1 of Duke Energy Carolinas, LLC and Duke Energy Carolinas NC Storm Funding II LLC filed on July 23, 2025) 3.2 Amended and Restated Limited Liability Company Agreement of Duke Energy Carolinas NC Storm Funding II LLC, dated and effective as of September 22 , 202 5 (incorporated by reference to Exhibit 3.2 to Form 8-K filed September 30, 2025) 4.1 Indenture, dated as of September 30, 2025 , by and between Duke Energy Carolinas NC Storm Funding II LLC, and U.S. Bank Trust Company , N.A., as Indenture Trustee and U.S. Bank National Asso ciation, as Securities Intermediary and Account Bank (incorporated by reference to Exhibit 4.1 to Form 8-K filed September 30, 2025) 4.2 Series Supplement, dated as of September 30, 2025 , by and between Duke Energy Carolinas NC Storm Funding II LLC, and U.S. Bank Trust Company, N.A., as Indenture Trustee (incorporated by reference to Exhibit 4.2 to Form 8-K filed September 30, 2025 ) 10.1 Storm Recovery Property Servicing Agreement, dated as of September 30, 2025 , by and between Duke Energy Carolinas NC Storm Funding II LLC, and Duke Energy C

SIGNATURES

SIGNATURES Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the registrants have duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized. Date: March 26, 2026 DUKE ENERGY CAROLINAS NC STORM FUNDING II LLC By: /s/ Abigail L. Motsinger Abigail L. Motsinger Controller and Manager DUKE ENERGY CAROLINAS, LLC By: /s/ Abigail L. Motsinger Abigail L. Motsinger Senior Vice President, Chief Accounting Officer and Controller Duke Energy Carolinas, LLC

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