Duke CEO Good cites progress on Piedmont purchase, gas infrastructure

Duke Energy (NYSE:DUK) CEO Lynn Good said Feb. 18 that Duke has been consistently moving toward low-carbon generation and will continue to do so “whether there is a Clean Power Plan or not.”

During a quarterly earnings call, Good was asked to comment on the Environmental Protection Agency carbon rule and the U.S. Supreme Court’s recent decision to “stay” the rule. Good said the company will continue to monitor developments in the federal courts.

Meanwhile, Duke will continue to decrease its reliance on coal power and increase its use of less-emitting sources, the CEO said. The EPA would have states draft plans to cut power sector CO2 32% by 2030. Duke has said it has already reduced its carbon emissions more than 20% since 2005.

Duke intends to lower the carbon profile of its generation fleet through investment in gas-fired generation and both regulated and commercial renewables.

The North Carolina-based utility holding company is also looking to sell off its power generation assets in Latin America and reinvest any proceeds in its core business in the United States.

In addition, Good said that Duke is making steady progress on its acquisition of Piedmont Natural Gas (NYSE:PNY) and developing new gas-fueled generation in the Carolinas and Florida.

The Piedmont deal has already been approved by Piedmont shareholders and the Federal Trade Commission. Duke is still awaiting word from North Carolina and Tennessee but expects to close the Piedmont deal this year.

Duke will be spending $8bn in new gas and renewable generation, nuclear fuel and major projects through 2020, officials said. It will spend $3bn on environmental compliance, including coal ash pond closures. It will spend $8bn by 2020 on grid investments for enhanced reliability.

Some rate cases will be filed in the near future including Ohio in 2016 and Kentucky in 2017.

Major gas pipelines expected online by 2018

Duke continues to be involved with advanced development of the Atlantic Coast and Sabal Trail pipelines.

Sabal Trail got Federal Energy Regulatory Commission (FERC) approval last month and the Atlantic Coast pipeline is poised to make its FERC filing later this year.

Duke owns a 40% stake in the Atlantic Coast pipeline, which is targeted to be in-service in late 2018. The project is 90% subscribed and FERC approval is expected in late 2016.

Duke has a 7.5% stake in the Sabal Trail pipeline, which is targeted to be in-service in mid-2017. The project is fully subscribed and will, among other things, served the planned Duke Citrus County combined-cycle gas plant in Florida. Duke expects to have that gas plant online in 2018.

FERC approval is expected for the Sabal pipeline this quarter.

Duke has completed $500m solar commitment in North Carolina, began a program to develop up to 500 MW of new solar power in Florida, the company reported.

Duke reported adjusted diluted earnings per share (EPS) of $4.54 in 2015, compared to $4.55 in 2014; reported diluted EPS of $4.05 for 2015, compared to $2.66 in 2014.

Record mild December weather resulted in fourth quarter 2015 adjusted diluted EPS of 87 cents, compared to 86 cents for the fourth quarter 2014; fourth quarter 2015 reported diluted EPS of 69 cents, compared to 14 cents in 2014

About Wayne Barber 4201 Articles
Wayne Barber, Chief Analyst for the GenerationHub, has been covering power generation, energy and natural resources issues at national publications for more than 20 years. Prior to joining PennWell he was editor of Generation Markets Week at SNL Financial for nine years. He has also worked as a business journalist at both McGraw-Hill and Financial Times Energy. Wayne also worked as a newspaper reporter for several years. During his career has visited nuclear reactors and coal mines as well as coal and natural gas power plants. Wayne can be reached at wayneb@pennwell.com.