Storms and coal ash costs hit Duke Energy's profits, but the NC company's revenues grew
Duke Energy's profits declined in the first three months of the year, but revenues were up as the company saw a continued rebound from the coronavirus pandemic.
Profits at the Charlotte-based company fell nearly 14% from a year ago to $857 million. That was in part because of higher expenses due to January's winter storms and $250 million in coal ash costs in Indiana. In March, the Indiana Supreme Court ruled that Duke Energy cannot charge customers for past coal ash cleanups.
Duke Energy said revenues grew 16%, to $7.1 billion, thanks to increased energy use and higher rates.
Earnings per share adjusted for one-time items were $1.30. That was up from 2021, but fell3 cents short of Wall Street analysts' expectations.
Chief Financial Officer Steve Young called a "great start" to 2022.
"Excellent quarter, particularly the regulated businesses, (with) significant growth and economic recovery across our footprint, as customers and businesses come back in service," Young said.
"We had some significant winter storms across our footprint. And we restored power to over a million customers, I think very efficiently, very quickly," he said.
Expenses from those storms cost Duke about 7 cents per share in profit, he said.
Young said growth in electricity sales was partly driven by 1.8% growth in new residential customers, as well as commercial and industrial customers whose businesses are rebounding from the pandemic-induced economic slowdown. And, he said, "We also benefited from residential customers who continue to work from home."
CEO Lynn Good told analysts in a conference call Monday morning she expects earnings per share to keep growing 5% to 7% through 2026.
She outlined growth and growth plans across Duke's operations in the Carolinas, Florida, Indiana, Ohio and Kentucky.
Good also gave analysts a preview of the carbon reduction plan that Duke expects to present to North Carolina regulators on May 16. The plan to cut emissions from electricity-generating plants is required under last year's energy reform law.
"The plan will outline multiple portfolios to achieve the 70% carbon reduction target, including proposals around timing of coal plant retirements and (electrical generating) resource additions," Good said.
Those new generating facilities will include "substantial solar and battery additions" as well as energy efficiency efforts, and both onshore and offshore wind," she said.
"Each portfolio has been rigorously tested for reliability and affordability for our customers," Good said.
Duke is expected to be a bidder when the federal government holds an auction beginning Thursday for offshore wind leases off Wilmington.
Duke shares were down nearly 2% in morning trading.