Brian Savoy
Executive Vice President and Chief Financial Officer at Duke Energy
Thanks, Lynn and good morning, everyone. Turning to Slide eight. 2023 marked a year of solid growth for our utilities. We achieved full year adjusted earnings per share of $5.56, which represents about 6% growth over 2022. For the year, we saw top line growth from constructive rate case outcomes, multiyear rate plans and rider growth across our jurisdictions. Additionally, we delivered on our cost and agility efforts, which offset record mild weather, lower volumes and higher interest expense. 2023 was a year full of significant headwinds and I'm proud of the team for executing on our agility plans including strong fourth quarter results to deliver on our financial commitments.
Turning to Slide nine. We are introducing our 2024 guidance range of $5.85 to $6.10. The midpoint of $5.98 represents more than 7% growth over 2023. Within electric, we expect normal weather and retail volume growth of roughly 2%. We also entered the year with updated rates for our North Carolina utilities including the benefit of the historic base case, as well as year one of the multiyear rate plans. Additionally, we have updated rates at Duke Energy Kentucky and expect updated rates for DEC South Carolina in August. We'll see growth from year three of the Florida multiyear rate plan currently effect, and we will continue to see growth from grid investment riders in the Midwest and Florida.
Partially offsetting these favorable drivers are higher interest expense as well as depreciation and property taxes on a growing asset base. Our gas segment continues to deliver strong growth with investments across all jurisdictions related to integrity management and to serve a growing customer base. Finally, we expect the other segment to be impacted by higher interest expense and a higher effective tax rate. We ended 2023 with an ETR of 10%. Although, we continue to pursue a robust set of tax optimization strategies, we expect our 2024 ETR will increase to between 12% and 14%.
Turning to retail electric volumes on slide 10. In 2023, we saw strong residential customer growth in all jurisdictions highlighted by the Carolinas and Florida at 2.1% and 2%, respectively. In fact over the course of 2023 we added 195,000 new customers, the largest customer increase in company history and a continuation of the trend we've seen over the past few years.
As a reminder, residential decoupling in North Carolina began in DEP in October and in DEC in January. This will reduce volatility and align growth with positive customer migration trends. We have also seen significant growth in economic development opportunities in our service territories as reflected in the recent supplemental Carolina's resource plan filings. As we evaluate, which projects to include in our financial plan, we recognize that site selection processes are often very competitive. We generally only include the most mature and committed projects, focusing on those with letter agreements or in very late-stage development. This gives us upside potential should additional projects progress.
Economic development opportunities in our service territories are diversified across many industries. Semiconductors, EVs, batteries, pharmaceuticals, and data centers to name a few, which will provide growth from the projects themselves, as well as incremental growth from residential and supplier demand. These economic development and customer migration trends give us confidence in our 1.5% to 2% load growth expectation over the forecast period.
Turning to slide 11 Duke's proven track record of cost management will support our ability to execute an energy transition that is rooted in discipline and a commitment to safety for our employees and reliability and affordability for our customers. As I mentioned before, we delivered on our significant O&M and agility targets for 2023 in response to macroeconomic headwinds and unfavorable weather. In 2024, we expect O&M to be largely flat to 2023, offsetting inflationary pressures with sustainable efficiencies and we will continue to target a flat cost structure over the five-year plan.
Duke Energy is a leader in the industry when it comes to cost efficiency driven by our culture of continuous improvement. We consistently rank in the top quartile across a variety of O&M measures and our ability to manage our cost structure creates significant value for our customers and shareholders.
Turning to slide 12. I'd like to provide an overview of our five-year $73 billion capital plan which has increased $8 billion over our previous plan. About half of the incremental capital is a result of rolling the plan forward a year to include 2028. The update reflects an early estimate of the supplemental Carolinas resource plan filed in January, as well as improved spend in the North Carolina multiyear rate plans.
Over time our capital plan has steadily increased as we move further into the clean energy transition, supporting a 7.2% earnings base CAGR through 2028. Grid investments represent 50% of our five-year capital plan and will improve the reliability and resiliency of our system. Significant generation spend ramps up in the latter part of the plan as we add more renewables and storage assets. Extend the life of our carbon-free nuclear fleet and make prudent investments in cleaner natural gas to better serve our growing customer base. Looking ahead, about 90% of the electric investments in our capital plan are eligible for efficient recovery mechanisms, which is critical to maintaining a strong balance sheet, mitigating regulatory lag and smoothing customer rate impacts.
Moving to slide 13. Our ability to execute our robust capital program is underpinned by a healthy balance sheet and we remain committed to our current credit ratings. With that in mind, we are introducing modest equity to fund the increase in capital plan we announced today. We expect to raise $500 million annually over the five-year plan starting in 2024, using at the market and dividend reinvestment programs.
Turning to FFO to debt. We have provided a walk up, showing the path to achieve our 14% target by the end of '24. Compared to 2023, we expect improvements from normal weather, rate case activity, the collection of remaining deferred fuel balances, the monetization of nuclear PTCs and equity issuances under the DRIP and ATM programs. These credit supportive drivers give us confidence in achieving 14% FFO to debt in 2024 and a minimum of 14% over the long term.
Let me talk a bit more about the nuclear PTC, an important element of the inflation Reduction Act that will provide substantial savings to our customers over time. As an operator of 11 low-cost nuclear units in the Carolinas, we expect to qualify for several hundred million dollars per year of nuclear PTCs beginning in '24. We intend to monetize the credits in the transferability markets established by the IRA. In North Carolina, we worked with the public staff on a settlement regarding the treatment of nuclear PTCs that was approved in our DEC rate case order last year. We will flow back the benefits to customers over a four-year amortization period. This treatment allows customers to benefit from bill reductions over time and is supportive of the utility's credit metrics.
Moving to slide 14, our robust capital plan, strong customer growth and constructive jurisdictions provide a compelling growth story. And our commitment to the dividend remains unchanged. We understand its importance to our shareholders and 2024 marks the 98th consecutive year of paying a quarterly cash dividend. We intend to keep growing our dividend, balancing the payout ratio with the need to fund our capital plan.
Over the next five years, we anticipate a steady decline in the payout ratio and we are adjusting our target payout ratio to 60% to 70% from 65% to 75%. This updated range provides additional financial flexibility, minimizes external equity needs over time and is more consistent with the company investing in our current pace. As always, dividends will be subject to approval by the Board of Directors.
In closing, 2023 was a year of execution and we have tremendous momentum as we head into 2024. The fundamentals of our business are stronger than ever, giving us confidence in our ability to deliver sustainable value and 5% to 7% growth through 2028.
With that, we'll open the line for your questions.
