Duke Energy making steady progress on shift toward gas, renewables

Duke Energy (NYSE:DUK) Chairman, President and CEO Lynn Good said May 3 that the company is making big strides in shifting its power generation portfolio toward less reliance on coal and more emphasis on natural gas and renewable energy.

There was record natural gas usage across the regulated generation fleet in March, Duke said in its prepared materials for a May quarterly earnings conference call with financial analysts.

Duke is also selling off international subsidiaries and is moving toward completion of its acquisition of Piedmont Natural Gas by the end of this year, Good said during the conference call.

The North Carolina Utilities Commission is expected to hold a hearing this summer on the Piedmont merger, Good said. Duke officials also said during the call that they expect a late-2018 in-service date for the Atlantic Coast natural gas pipeline project.

During the past quarter, Duke received North Carolina approval for the $1.1bn Western Carolinas modernization project, which involves retirement of the existing Asheville coal plant and construction of new combined-cycle gas capacity.

Construction of the W. S. Lee combined-cycle project is on time and on budget in South Carolina. The natural gas plant is on schedule for commercial operation by the end of 2017.

Also on the natural gas power plant front, Good noted that Duke has started construction of the Citrus County combined cycle plant in Florida. Duke has moved forward with the Citrus County project after deciding to retire the Crystal River 3 nuclear plant.

Looking at renewable energy, Duke has 400 MW of commercial wind in development. Los Vientos IV and Frontier wind are expected online in 2016. In addition, 100 MW of regulated solar projects were announced during the first quarter.

As far as existing baseload generation, the Duke nuclear fleet has recently enjoyed a 95% capacity factor, Good said. The CEO also reported that in February the Edwardsport integrated gasification combined-cycle (IGCC) plant gasifier achieved 100% availability.

“We continue to make outstanding progress” on closing coal ash sites at locations in the Carolinas, Good said. The North Carolina Department of Environmental Quality (DEQ) should soon finalize risk classification categories for coal ash sits, Good said.

Duke is also getting out of the international business. Initial steps in marketing the Latin American generation assets are underway, Duke said.

Duke announced first quarter 2016 adjusted diluted EPS of $1.13, compared to $1.24 for first quarter 2015. First quarter 2016 reported EPS was $1.01, compared to $1.22 for first quarter 2015.

Adjusted diluted EPS for the first quarter of 2016 were lower than the prior year, primarily due to milder winter weather, the absence of prior-year Midwest Generation results, and higher winter storm costs.

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.