Duke Energy Doubles Earnings in First-Quarter 2013, Expects to Bring Major Projects Online this Year

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Researched by Industrial Info Resources (Sugar Land, Texas)--Duke Energy Company (NYSE:DUK) (Charlotte, North Carolina), a leading U.S. electric power holding company, more than doubled its profits year-over-year in the first quarter of 2013. The company benefited from its merger with Progress Energy (Raleigh, North Carolina) last year, which significantly strengthened earnings, as well as favorable weather and stronger customer rates. Net income was reported to be $634 million, compared with $295 million in first-quarter 2012.

Total revenues were reported to be $5.9 billion, a 62.48% increase from the same period last year. The biggest factor to improve results was Duke's merger with Progress Energy, which was completed in July 2012 and added utility operations in the Carolinas and Florida. Chilly winter weather boosted revenues, while revised customer rates at Duke Energy Carolinas in February 2012 boosted pricing. Duke executives also cited a strong operational performance from the company's nuclear fleet, with the nuclear capacity factor at 97.1%.

On the downside, lower capacity prices from the PJM Interconnection (Norristown, Pennsylvania), which consists of 13 northeastern and Midwestern states and Washington D.C., weakened results in the Commercial Power segment. Brazilian operations saw lower volumes, higher purchased power costs, and unfavorable foreign exchange rates, causing the International Energy segment's results to decline compared with the same period last year.

Capital and investment expenditures were reported to be $1.41 billion, compared with $1.04 billion in the same period last year.

Industrial Info is tracking about $75 billion in active projects involving Duke Energy, including a $690 million, 600-megawatt addition at the Louis V. Sutton Power Station in Wilmington, North Carolina. The project involves installing two natural gas-fired Siemens SGT6-5000FD combustion turbine generator sets, each with duct-fired Vogt heat-recovery steam generators, plus a Toshiba steam turbine generator to replace retiring base load, coal-fired units. The plant is owned by Progress Energy Carolinas.

"During the first quarter, we achieved $37 million in fuel and joint dispatch savings from our Carolinas fleet," said Jim Rogers, the chairman, president and chief executive officer of Duke, in a conference call. "That was in addition to the $52 million in the first six months of the merger."

Capital expenditures for full-year 2013 are expected to be between $5.87 billion and $6.3 billion. Duke executives expect to conclude regulated rate cases this year in the Carolinas and Ohio, where they have requested more than $1 billion in rate relief, and anticipate seeing the full benefits of these cases in 2014. Rogers said the company is focused on brining a generation station in Edwardsport, Indiana, into service this year.

"We continue to advance our fleet modernization program, with $9 billion of investments adding 6,600 MW of natural gas and coal-fired generating capacity," Rogers said in the conference call. "This program gives us the ability to retire up to 6,800 MW of our older, less-efficient, high-emitting coal plants in our oil-fired units. This will give us a high level of fuel diversity, which will benefit customers by giving them flexibility to adapt to future changes in commodity prices.

"In 2012, we brought three new plants online, a combination of natural gas and coal-fired units, and we're on track to bring our remaining two construction projects--Edwardsport and Sutton--into service in 2013."

For more information, visit Industrial Info's North American Power Project Database.

Industrial Info Resources (IIR), with global headquarters in Sugar Land, Texas, and eight offices outside of North America, 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.