Duke Energy Corporation
CEO : Ms. Lynn J. Good
Quarterly earnings growth(YoY,%)
| Period | Revenue | Operating Income | EPS | Release Date |
|---|---|---|---|---|
| 2022 Q4 | 11.9% YoY | 42.6% | -223.8% | 2023-02-09 |
Brian Savoy says,
Adjusted Earnings and Guidance
- 2022 adjusted earnings per share of $5.27, which is above the midpoint of the updated guidance range.
- Full-year adjusted results exclude Commercial Renewables business, which was moved to discontinued operations in Q4.
- Reaffirming guidance range for 2023 of $5.55 to $5.75 with the midpoint of $5.65.
- Expect retail volume growth in 2023 of roughly 0.5% in Electric segment.
- Gas segment projected to have growth drivers including the Ohio rate case, cost mitigation, and customer growth.
Capital Plan and Affordability
- 5-year capital plan increased to $65 billion, with a 7.1% earnings-based CAGR through 2027.
- Customer affordability remains a priority, with cost mitigation efforts going back to customers over time, targeting flat O&M from 2024 through 2027, and leveraging benefits from the Inflation Reduction Act.
- Assisting vulnerable customers remains an area of focus, with nearly $300 million in energy assistance funding connected to customers in need over the past 2 years.
Balance Sheet and FFO to Debt
- Healthy balance sheet and commitment to current credit ratings.
- Received $1 billion in cash proceeds from the second tranche of the Indiana minority stake sale in December 2022.
- Expect to receive proceeds from the Commercial Renewables transactions later this year, which will be used for debt avoidance at the holding company.
- FFO to debt ended 2022 below the 14% target, largely due to deferred fuel balances, but expect to steadily improve as deferred fuel costs are recovered over 1-2 years.
Retail Electric Volumes
- Load growth of 2.5% in 2022 was driven by residential customer growth of 1.8%, higher usage per customer from hybrid and remote work, and a continuation of the post-COVID rebound in the commercial class.
- Total retail load in 2022 was about 2% higher than 2019 pre-pandemic levels.
- Projected load growth in the commercial class to moderate in 2023 following 2 years of significant growth, but the upside in industrial as easing supply chain constraints fuel a continued rebound for certain large manufacturers.
- Expect annual load growth to be about 0.5% through 2027.
Lynn Good says,
Adjusted Earnings and Guidance
- Adjusted earnings per share for Q4 2022 was $5.27, meeting updated guidance range
- Reaffirmed 2023 guidance range of $5.55 to $5.75 with a midpoint of $5.65
- Reaffirmed 5% to 7% growth rate through 2027 off the midpoint of 2023 range
Sale of Commercial Renewables
- Anticipate proceeds in the second half of the year
North Carolina Carbon Plan
- Order recognizes the value of an all-of-the-above approach to achieving carbon reduction targets
- Approved 3,100 megawatts of solar and 1,600 megawatts of storage as well as transmission upgrades to support the integration of these renewable resources
- Supported planning for approximately 2,000 megawatts of new natural gas generation to maintain reliability and an orderly transition out of coal by 2035
Regulated Utilities
- Filed performance-based rate application for Duke Energy Carolinas utility in North Carolina, including $4.7 billion of capital projects
- Reached a comprehensive settlement in Duke Energy Progress rate case in South Carolina
- Filed petition to adjust customer rates for deferred 2022 fuel costs in Florida
- Updating IRP in Indiana and Kentucky
- Commission approved electric rate case settlement in Ohio
Piedmont Natural Gas
- Received #1 ranking in residential customer satisfaction for natural gas service in the Southeast from J.D. Power
Q & A sessions,
Clean Energy Transition
- North Carolina Utilities Commission issued an order adopting an initial carbon plan, providing approval of 3,100 MW of solar and 1,600 MW of storage, as well as transmission upgrades to support integration of renewable resources
- Carbon plan includes approval of longer lead time investments, such as small modular nuclear reactors, pumped hydro, and transmission related to offshore wind
- Commission supported planning for approximately 2,000 MW of new natural gas generation to maintain reliability and ensure replacement generation is available prior to retirement of existing coal units
Financial Performance
- Announced adjusted earnings per share of $5.27 for Q4 2022, achieving results solidly within updated guidance range
- Reaffirming 2023 guidance range of $5.55 to $5.75 with a midpoint of $5.65, and 5% to 7% growth rate through 2027 off the midpoint of 2023 range
- Anticipate proceeds from sale of Commercial Renewables business in second half of year
Regulatory Update
- Filing performance-based rate application for Duke Energy Carolinas utility with multiyear rate plan to fund system improvements and $4.7B of capital projects that are expected to go into service over 3-year period
- Reached comprehensive settlement in Duke Energy Progress rate case in South Carolina, subject to commission review and approval, and plan to file updated Integrated Resource Plan (IRP) later this year taking into account carbon plan and Inflation Reduction Act
- Filed petition to adjust customer rates for deferred 2022 fuel costs and flowing back IRA tax savings to Florida customers
- Updating IRP in Indiana to reflect results of 2022 RFP process, regional transmission operator requirements, and Inflation Reduction Act, and expect to begin filing for certificates of need for new power generation in Q2
- Commission approved electric rate case settlement in Ohio, and filed electric rate case in Kentucky reflecting more than $300 million in investments to strengthen generation and delivery systems, as well as updated retirement dates for Kentucky fleet
Clean Energy Technologies
- Need of somewhere between 10,000 and 15,000 MW of 0 emitting load following resources through 2050, including hydrogen, small modular reactors, CCUS, and longer duration storage
- Small modular reactor is something Duke Energy is spending time on as the largest regulated nuclear operator in the US, sitting in a part of the world that embraces nuclear as part of the solution
- Joined with Southeastern utilities to pursue a hydrogen hub, investing in maintaining and preserving natural gas infrastructure
No bad stock 