Duke Energy Achieves $3.2 Billion Capex in First-Half 2015, Buys into Major Natural Gas Pipeline

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Researched by Industrial Info Resources (Sugar Land, Texas)--Capital expenditures (capex) by Duke Energy (NYSE:DUK) (Charlotte, North Carolina) amounted to nearly $3.2 billion in the first half of 2015, the electric power holding company said Thursday. Industrial Info is tracking 126 active Duke Energy projects worth $6.98 billion that are in various stages of development.

Duke Energy has 104 projects worth nearly $4.7 billion in the construction and planning phases; and 22 projects worth more than $2.2 billion in the planning phases, where plenty of factors could alter their outcome.

Chief Executive Officer Lynn Good outlined parts of the power company's capex plans in the company's second-quarter 2015 earnings results. On the strategic investments front, she noted the $1.1 billion Western Carolinas Modernization Project initiative, which includes a new, 650-megawatt (MW), combined-cycle natural gas plant to replace its 376-MW, coal-fired plant in Asheville, North Carolina. Construction kickoff is slated for second-quarter 2016, with completion in fourth-quarter 2019.

Also included in the modernization plan is a proposed transmission line in North Carolina. The 230-kilovolt (kV) line would run 45 miles to 50 miles from Duke's Asheville substation to the proposed Foothills substation. Duke Energy is determining the route of the line. Construction would kick off in second-quarter 2017, with completion in third-quarter 2019.

Good said the plan is subject to approval by state regulators.

Industrial Info is tracking 62 projects in the Carolinas worth $3.7 billion.

For related information, see June 2, 2015, article - Duke Energy Plans $1 Billion Swap from Coal to Gas at Asheville.

Major Pipeline Among Plans for Growth
Regarding infrastructure investments, Good mentioned Duke's recent purchase of 7.5% ownership in the planned Sabal Trial natural gas pipeline project. The $3 billion project will extend for 474 miles, from eastern Alabama through southwestern Georgia and down the middle of Florida. For related information, see February 5, 2014, article - Sabal Trail Pipeline to Help FPL Realize Big Bet on Gas-Fired Generation.

Duke Energy reported an 11% drop in second-quarter 2015 net earnings to $543 million from $609 million from a year earlier, largely as a result of a favorable one-time tax ruling that occurred last year, and continued weakness in its Brazil businesses. Total operating revenues were nearly $5.6 billion in the second quarter, down from $5.7 billion in the same quarter of last year.

Good said during the company's earnings conference call that the power provider met its customers' energy needs in the second quarter during a heat wave in the Southeast U.S.

Revenue for Duke's Regulated Utilities segment fell 8% to $632 million in the quarter, partly as a result of higher operation and maintenance expenses stemming from planned outages in its generation fleet, including the impact of nuclear outage cost levelization.

The power company achieved 1.3% growth in its average number of customers during the second quarter, but that growth was dampened by efforts by residential customers to improve energy efficiency and conservation. Duke's regulated utility operations serve about 7.3 million customers in six states in the Southeast and Midwest.

The power company noted strength in the health care and food service sectors, as well as continued strength in industrial segments, especially in the transportation, construction and chemicals sub-sectors.

For related information, see February 19, 2015, article - Duke Energy's 2015 Capex to Grow by $2 Billion from 2014.

Industrial Info Resources (IIR), with global headquarters in Sugar Land, Texas, five offices in North America and 10 international offices, is the leading provider of global market intelligence specializing in the industrial process, heavy manufacturing and energy markets. Industrial Info's quality-assurance philosophy, the Living Forward Reporting Principle™, provides up-to-the-minute intelligence on what's happening now, while constantly keeping track of future opportunities.