Step 1: Use the Pythagorean identity:
\[
\sec^2 \theta - \tan^2 \theta = 1
\]
Step 2: Substituting \( \theta = 23^\circ \) into the identity:
\[
\sec^2 23^\circ - \tan^2 23^\circ = 1
\]
Step 3: Now, adding 2 to both sides:
\[
\sec^2 23^\circ - \tan^2 23^\circ + 2 = 1 + 2 = 3
\]
Thus, the correct answer is \( \boxed{3} \).