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Released February 19, 2014 | SUGAR LAND
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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, reported solid gains in profits and revenues in fourth-quarter and full-year 2014, based on stronger pricing and favorable weather in its regulated utilities, as well as favorable pricing and volumes in Brazil. The company is now planning to exit its Midwest merchant generation business. Net income was reported to be $688 million for the quarter, a 58.16% increase from fourth-quarter 2012, and $2.67 billion for the year, a 50.74% increase from 2012.
Total revenues for the full year stood at $24.6 billion, a 25.35% increase from 2012. The company benefited from stronger volumes and pricing in its Latin America geographic segment, and it saw lower purchased power costs in Brazil. The adoption of nuclear outage cost levelization in the Carolinas segment reduced operating and maintenance expenses. The U.S. Midwest coal generation fleet benefited from higher energy margins. However, lower energy margins, as well as lower capacity revenues from the PJM Interconnection, weakened results for the Midwest gas generation fleet.
Capital expenditures for 2013 were reported to be $5.61 billion, compared with $5.96 billion reported at the end of 2012.
Industrial Info is tracking more than $6.5 billion in active projects involving Duke, including the $150 million NOx controls retrofit of units 1 and 2 at a power station in Cayuga, Indiana. The project involves installing selective catalytic reduction units onto two Alstom CE coal tangential-fired dry bottom boilers to comply with state and EPA regulations. The boilers each have capacities of 3.55 million pounds per hour. Sargent & Lundy LLC (Chicago, Illinois) is serving as the engineering contractor. The project is expected to be completed in the second quarter of this year.
"During 2013, we completed our $9 billion fleet modernization program," said Lynn Good, the president and chief executive officer of Duke, in a conference call. "This program added approximately 6,600 megawatts of new, combined-cycle natural gas and state-of-the-art whole capacity in the Carolinas and Indiana, replacing a similar amount of capacity for older plants that we have retired, or are retiring by 2015. The Edwardsport IGCC plant in Indiana went into commercial service in June, and in November the Sutton combined-cycle natural gas plant in North Carolina was put into service."
Capital expenditures for 2014 are estimated to be $6.13 billion. For 2014 through 2016, capital expenditures are expected to be between $20 billion and $22 billion.
Duke recently announced that it will exit its Midwest commercial generation business. The business includes ownership interests in 13 power plants: 11 in Ohio, one in Illinois and one in Pennsylvania. The company is expected to take a pre-tax impairment charge of between $1 billion and $2 billion in the first quarter of 2014. The process is expected to be completed in early- to mid-2015.
"After an 18-month regulatory process, we were disappointed the Ohio commission denied our application for a cost-based capacity charge late last week," Good said in the conference call. "The volatility inherent in a merchant generation portfolio has challenged our ability to earn the consistent rate of returns our investors expect. This business is not a strategic fit for Duke Energy."
For more information, visit Industrial Info's North American Power Project Database.
View Plant Profile - 1010488
View Project Report - 11002956
Industrial Info Resources (IIR), with global headquarters in Sugar Land, Texas, three offices in North America and nine 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.
Total revenues for the full year stood at $24.6 billion, a 25.35% increase from 2012. The company benefited from stronger volumes and pricing in its Latin America geographic segment, and it saw lower purchased power costs in Brazil. The adoption of nuclear outage cost levelization in the Carolinas segment reduced operating and maintenance expenses. The U.S. Midwest coal generation fleet benefited from higher energy margins. However, lower energy margins, as well as lower capacity revenues from the PJM Interconnection, weakened results for the Midwest gas generation fleet.
Capital expenditures for 2013 were reported to be $5.61 billion, compared with $5.96 billion reported at the end of 2012.
Industrial Info is tracking more than $6.5 billion in active projects involving Duke, including the $150 million NOx controls retrofit of units 1 and 2 at a power station in Cayuga, Indiana. The project involves installing selective catalytic reduction units onto two Alstom CE coal tangential-fired dry bottom boilers to comply with state and EPA regulations. The boilers each have capacities of 3.55 million pounds per hour. Sargent & Lundy LLC (Chicago, Illinois) is serving as the engineering contractor. The project is expected to be completed in the second quarter of this year.
"During 2013, we completed our $9 billion fleet modernization program," said Lynn Good, the president and chief executive officer of Duke, in a conference call. "This program added approximately 6,600 megawatts of new, combined-cycle natural gas and state-of-the-art whole capacity in the Carolinas and Indiana, replacing a similar amount of capacity for older plants that we have retired, or are retiring by 2015. The Edwardsport IGCC plant in Indiana went into commercial service in June, and in November the Sutton combined-cycle natural gas plant in North Carolina was put into service."
Capital expenditures for 2014 are estimated to be $6.13 billion. For 2014 through 2016, capital expenditures are expected to be between $20 billion and $22 billion.
Duke recently announced that it will exit its Midwest commercial generation business. The business includes ownership interests in 13 power plants: 11 in Ohio, one in Illinois and one in Pennsylvania. The company is expected to take a pre-tax impairment charge of between $1 billion and $2 billion in the first quarter of 2014. The process is expected to be completed in early- to mid-2015.
"After an 18-month regulatory process, we were disappointed the Ohio commission denied our application for a cost-based capacity charge late last week," Good said in the conference call. "The volatility inherent in a merchant generation portfolio has challenged our ability to earn the consistent rate of returns our investors expect. This business is not a strategic fit for Duke Energy."
For more information, visit Industrial Info's North American Power Project Database.
View Plant Profile - 1010488
View Project Report - 11002956
Industrial Info Resources (IIR), with global headquarters in Sugar Land, Texas, three offices in North America and nine 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.
