Duke Earnings Strong In 2Q, Critical Months Lie Ahead
Duke Energy reported quarterly earnings of 33 cents per share from April throug June. That's better than analysts expected - and better than the same period last year. But there are still big challenges on Duke's doorstep. In the upside-down world of electric utilities, bad weather is good for business and good weather is bad. "While we benefitted from weather this quarter, it was less favorable than the second quarter of 2010," said Duke CFO Lynn Good on a call with investors Tuesday morning. Desperately hot as it seems right now, June was downright pleasant in the Carolinas - and much cooler than the blistering temperatures of June 2010. Not to worry. The current heat is sure to reflect well on the company's next quarterly report in October. The coming six months are critical for Duke Energy. At the end of August, shareholders of Duke and Progress Energy will vote on a proposed marriage that would create the nation's largest utility. Regulators in North and South Carolina still need to give their blessing. Duke Energy is also trying to get approval for a 15 percent overall rate hike in North Carolina, mainly because of construction costs at nuclear and coal plants. CEO Jim Rogers told investors the company will make a similar request in South Carolina within the week. And in Indiana, Duke Energy faces huge cost overruns and conflict-of-interest charges over a new coal-fired power plant that is nearly complete. Consumer and environmental groups have charged Duke woefully mismanaged the project at customer expense. CEO Jim Rogers says the company will file its formal response to those allegations this week. "Our testimony will demonstrate that intervener allegations are unfounded," said Rogers. "We have diligently and prudently managed the Edwardsport project." While Duke Energy battles with opponents and woos regulators on multiple fronts, the lackluster economy is keeping demand for electricity low. Rogers tells the Associated Press he doesn't expect electric power demand to return to pre-recession levels for at least three more years.