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Rate Hikes, Weather Help Boost Duke Energy's Profits By 5.8%

Duke Energy headquarters in Charlotte

Rate increases, growth in customers and cool weather that drove up energy use helped boost profits during the first quarter at Duke Energy. The Charlotte-based company made $992 million in the quarter that ended March 31, up 5.8% from a year ago.

Earnings per share were $1.26, adjusted for one-time expenses, which beat Wall Street expectations. The consensus estimate of analysts surveyed by Zacks Investment Research was $1.24.

"We feel very good about the early execution on our strategic plan," Chief Financial Officer Steve Young said in an interview. "You know, our goal is to transform the system to generate cleaner energy. And during the quarter, we put some renewables in service, we retired some coal, and we feel very good about our start in 2021."

During the quarter, Duke closed one coal-fired generator at the Allen Steam Station in Gaston County. And it added 570 megawatts of solar and wind energy.

Rate increases last year in Indiana and Kentucky helped increase Duke's electricity revenues this quarter. Still to come are rate hikes approved recently in North Carolina and Florida that will start to show up in earnings this year.

Revenues also grew at Piedmont Natural Gas. Duke in March asked regulators to approve a gas rate increase that it hopes will take effect by the end of the year.

Meanwhile, revenues in Duke's commercial renewable energy business dropped slightly, mainly because of the effects of Hurricane Uri in Texas.

Young said Duke also held down operations and maintenance expenses.

Duke said it expects to earn between $5 and $5.30 per share overall this year, a growth rate of 5% to 7%.

Young said he foresees an economic rebound after the slowdown amid the coronavirus pandemic.

"I think we're gonna see a turn here because we are seeing positive signs in the economy significantly," Young said. "All the indices around manufacturing, new businesses opening are pointing favorably. I think that's because of the success in vaccinations, stimulus funding and kind of relaxing of stay-at-home type standards across our footprint."

That should translate into rising energy use, Young said, with sales growing 1% to 2% for all of 2021, compared with last year.

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David Boraks is a veteran journalist who covers climate change for WFAE. See more at www.wfae.org/climate-news. He also has covered housing and homelessness, energy and the environment, transportation and business.