Dive Brief:
- Duke Energy posted a net loss of $97 million in Q1 2014, down from the $634 million in earnings it posted over the same period last year, the company announced on Wednesday. Excluding one-time costs, including a $1.4 billion charge on its Midwest merchant generation fleet, Duke earnings were up $1.17 per share, beating analysts’ expectations.
- Duke had a “strong first quarter” on the back of “revised customer rates and strong weather-normalized retail customer load growth,” CEO Lynn Good told analysts on the company’s earnings call. Residential sales grew 2.9% quarter-over-quarter while commercial sales grew 3.6%, which Good attributed to the weather and the economic recovery.
- Looking forward, Duke is planning to spend $16-20 billion through 2018 on growth investments in “new generation, infrastructure projects and environmental and regulatory compliance,” Good said. “In terms of prioritization of investments, we continue to focus on deploying about 85% to 90% of our capital into our regulated businesses.”
Dive Insight:
After years of sluggish sales growth, electricity demand appears to be picking back up – though utility CEOs say it’s too early to call it a trend, partly due to the hard-to-calculate effects of this winter’s Polar Vortex.
But Duke Energy CEO Lynn Good saw some positive indicators. “Improved economic data leads us to believe this strength is more sustainable rather than a one-time event,” she said. “I feel like an uptick in sales is the best possible thing that can happen, not only to Duke Energy, but to the economies that we serve.”
Duke also addressed the Dan River coal ash spill, for which it has been under fire. Notably, Good said Duke Energy, “not our customers, will pay for the pipe break and associated cleanup,” which contradicts past statements that left Duke’s options open. Associated costs reached $15 million during Q1, Good said. Duke recently estimated total costs could reach up to $10 billion.