Duke Energy (DUK) 7 May 242024 Q1 Earnings call transcript

Hello, and welcome to Duke Energy First Quarter 2024 Earnings Call. My name is Lydia, and I will be your operator today. [Operator Instructions]

I'll now hand you over to Abby Motsinger, Vice President of Investor Relations, to begin.

Thank you, Lydia, and good morning, everyone. First Earnings Energy's Update. and Duke to Quarter Review XXXX Business Welcome our Good, President; Harry CFO. Lynn today and and Savoy, Leading is with Chair call CEO; along Brian Sideris,

measures. and use forward-looking today's from due presentation appendix along Duke to today's information non-GAAP the Energy's may in statements include with disclosed includes of and will Actual results supplemental discussion financial Today's non-GAAP the of measures materials forward-looking factors SEC information. differ The financial of reconciliation in filings.

me let over Lynn. that, call With turn to the

per Abby, results Today, thank start you, we last rate announced and These of by good $X.XX are morning, first everyone. quarter $X.XX, driven adjusted share year. from year, strong volumes in remain retail a delivering X% rate above to our weather. our to the growth $X.XX earnings $X.XX reaffirming are growth through jurisdictions, our and guidance our XXXX. and confident range XXXX of of X% and to strengthening We improved EPS outlook long-term across activity

We of the forward have some the and areas fastest-growing operating attractive country. as regulated of utility a a most in fully clear path

Our recovery strategy record and growth, will constructive X-year by of outcomes. mechanisms regulatory track plan, capital drive $XX billion our continued efficient underpinned

to X. Moving Slide

decarbonize. project fleet growth in unprecedented planning execution. doing jurisdictions stage are the we and we customer We're economic so, to development. to important population Our experiencing XXXX as an our meeting through all-of-the-above In from and move strategy as affordability phase reliability migration an committed marks demand increasing these transition from that preserves

have each more triple XXXX. solar system annual to recently XXXX. beginning we in of megawatts grid on our XXXX. by on solar investments have year procurements approximately in filed the of completing by year-end. our amount the system X,XXX our in renewables by we're In megawatts are than that Florida, of goal to of part XX,XXX regulated megawatts These service add to to X,XXX plan, the we're XX-year expect site In solar on And will Carolinas, track our utility-owned

plant, Public to filed Necessity natural we NCUC advanced than Carolinas, filings resource regulatory March turbines is XXXX class the and with X and plan. Convenience to with units X the certificates in XXXX. consistent Pending start The the Carolinas planned approvals, end X combined generation. more the In simple-cycle with cycle all gas of construction operational by of include gigawatts combustion of of new, build in

will the tool Duke's, other for essential of recognize needed its not when be customers plants Each must natural and manufacturers in We part our existing complements attention sited natural development, nation's our lot provide gas achieving of generation centers, unprecedented will of just reliable energy net and natural there's affordable dispatchable economic a gas on facilities but believe face data and AI We zero. investments provide and of be retire. a units storage. to these chips new in energy strategy in coal in from renewables in those an remains role gas and demand transition substantial energy

recently EPA rules baseload sources. limits generation that on released know, you placed As certain

rule needs to solutions growing will the reliably the courts, and state and to serve soon the this in we advocate our will While of of energy continue for hands communities. customers affordably the be of

appointed significant of As the Harry Energy. build President period into infrastructure recently this Duke we step of for Sideris, company, we

and has of electric responsibility of for aspects activities. regulatory Harry including all gas President, our all and As operations utilities,

he role, the utility time on served record and our executive of his first and track introduce customers new customer is distribution economic delivering Harry has of the and led including to as and for an member as health our XX-year accomplishment new President. recently across an Florida value is in career Harry functions. President a call and led to I'm of to operations, development. He leadership him many investors. environmental team his veteran most in safety, a transmission, began exceptional pleased remains generation, company and the earnings and trusted committed leadership our his and role

And with turn to go you I'll that, Harry, highlights. through jurisdictional it the to over

through introduction. Thank our and to time for you, our transition. I'm and Lynn, leading for in the the new utilities energy role excited look forward important operations this

we Turning continue across our jurisdictions. requires collaboration great policymakers progress stakeholders, other with customers' to expectations Meeting our to X. Slide regulators, and make and

Starting increased our in last XXXX, rate Hearings with almost Duke our improve meet growing customers. base the rate Since billion, begin by energy May investments needs XX Carolina, and $X reliability of South to has by rate case. in and case our our Energy driven Carolinas resiliency

rates implemented X. We August to expect new be

current we end of new bills Shifting decade enhance expire with solar overall add generation a at the Florida's contracts the filed expect as well best as in to to year. investments year to The the will our customer and next Energy's legacy reliability multiyear and on purchase power also to that and in storm decrease investments requested filing plan The decrease Florida. over X-year costs reliability, plan under April, in rate Even we our as XXXX. building assets. base the improve in fuel shorten covers restoration restoration XXXX begin times, Duke includes grid XXXX. of battery In efficiency recovery, rate outages increases,

customers. grid. support a April. our than filed rate Indiana, we've year to impact case case in the and X more and case, in population quarter Since resiliency invested test first to XXXX, The smoothing our and last the billion starting of increase step-ups X first In the we forward state's of growing rate $X.X includes years the in the security

investments Natural And Gas and safety The regulations, safe, service. comply Carolina provide the gas reliable North finally, with case in customer request Piedmont a to filed enhance also infrastructure April. rate covers significant natural in federal experience

customer mitigate pass-through for concurrent reductions bill. help natural As is rate gas part the which also Piedmont costs, will filing, to of impacts the requesting the

rates and across projects in with order the expected our X advancing implement in footprint. final the plan We've transition interim November We great fleet made January. rate progress first quarter, to cases

on we have embark sustainable to significant X% plan and As will that confidence this we X% shareholders our investment growth. earnings value period infrastructure to deliver of build,

over Brian. With the me let turn to call that,

morning, Harry, Thanks, good everyone. and

Turning to X. Slide

Our and first reported earnings and were quarter adjusted reported adjusted share last This compares earnings to $X.XX per year. share and of $X.XX. per $X.XX

by Infrastructure items a base. and depreciation $X.XX segments, growing the offsetting higher Electric year. on were to Utilities expense volumes compared up Within driven improved increases, and was weather. & these asset Growth Partially interest last rate higher was

North which moderated the this for in winter a residential quarter, our impact Carolina utilities both reminder, of the a Carolinas. As decoupling in was effect of mild

Moving year. were to flat compared Gas Utilities to last & Infrastructure, results

interest And $X.XX, we're expense. a finally, to guidance the the due year, to our With primarily down track Other higher strong start EPS to range. deliver on segment was XXXX on

We're strength over grew across jurisdictions. usage industrial Slide X.X%. weather-normal which to Carolinas growth by year. in also by solid X% pleased remains volumes our commercial this were residential the year, growth jurisdictions, see Customer encouraged to improving We were driven versus and led see quarter sector. Turning up last volumes to in last both Florida, our versus and the Commercial X. robust in

in Notably, we our We largest with year. growth are with online, the remain the half trends new convey coming throughout closely economic to regular monitoring Combined accelerate economic the expectations customers second conversations continue these projects power development year. customers. and for of in expect needs growing to

Turning economic impact activity to our of overstated. in The cannot Slide X. development be jurisdictions

in XXXX. of in load This is development gearing gigawatt gigawatt XX,XXX from demonstrating these February, X,XXX of up to pipeline. projects just the strength hours are shared We our additional serve hours the from up we to up economic projection

a include included most of a showcased and a approach serve billion expects Pictured our the production the substation few factory semiconductor photos projects. size transformer scale underway. We've energized the to initial committed substation, As manufacturing and construction state. a in $X Wolfspeed We've facility reminder, bank generally we the The North in at is slide take only top early will recently impressive by and mature X,XXX and to risk-adjusted activity the the of year. Carolina. new Wolfspeed's the forecast begin facility to about that the next the that jobs bring will

planning many provide attractive some volume most in jurisdictions underpins centers, to tangible which development for the are and This both making and EVs forecast name few, We pharmaceuticals growth X.X% X-year across and meaningful sectors, to of data load X% will growth and horizon. project customer migration, operate rate including our territories. the economic confidence over batteries, XXXX in others X% in progress a and growth service in our our

capital Turning XX. of sheet balance of the importance Slide We strong recognize as one execute we largest the a programs. sector's to

rate this target. $XXX the of of achieve We FFO North Combined clear of line Carolina The are which monetization million sight Moody's track to biggest cases, XXX cushion year, represents points threshold. to add implementation balances, collection by credits with fuel end of remaining basis XX% our of we FFO our and of debt have achieving which to improvement tax deferred equity the annual of of is nearly downgrade the issuances, programmatic driver to revenues. the our on

to and a expect start, February, annually priced million in X-year via over programs. to DRIP plan $XXX over $XXX common We're the great disclosed issue As off of million having we just equity ATM year-to-date. our

quarter, planned, an long-term which for an X.XX% XXXX to debt interest of derisk We've approximately $X.X of our rate the completed our We average raised helps long-term years. average also tenure billion XX in first XX% plan. issuances debt with in of and

rising in in the base strategic our We've further rate euro diversifying been reducing and floating investor a exposure rate April. environment amid approach, our offering with

as years, strong growth to quarter we our have we and and this balance sheet committed demonstrated many our are credit ratings we execute objectives. over a As

We of to fundamentals $X.XX than through growing X% XXXX. ever. to in constructive, of XX. jurisdictions, the remain operate X% and guidance delivering our business earnings stronger Slide our and are XXXX $X.XX Moving in of range growth We confident to

attractive are compelling growth risk-adjusted return provide for targets with positioned We the yields well combined achieve which our dividend year, for to shareholders. a our

questions. line With that, we'll the for open your

today Instructions] Pourreza [Operator Our from Shar comes of Partners. Guggenheim question first

several the Lynn, C&I centers we your including X.X% guys when us of low which be what's states. Carolinas? kind of like low activities. growth And seems could peers? heard increase guess, in EPS to we've on load assumptions, raise that coming of X% guide peers development kind around one of growth seen accretive data the assumptions, especially you from kind the point of conservative, you and your reguide trigger but will I maybe their mean, Southeastern large kind growth, reaffirm your of to opportunities to timing to the I concurrently backdrop, growth customer into Obviously, levered that obviously, also economic

Shar, I'll take that.

a do see updating the We headwinds of economic as demonstrated look right? without load pace the opportunities. clearly time. And by continue forecast, we And update CapEx our opportunities. the load morning. to the than we full we I growth be more be might what February, do so plan that's load a in full typically and mean updating by showed time new encouraged this development We to every financial we feel tailwinds not support bit like But over disconnected see picture. we at more we

a -- is sign points sign long-term to of this good of of a good EPS this all growth. All

But degree higher transition. I in the if things, X%. end a the the throughout this look to gives load on plan, the X% in our capital us it energy later high And probably us the range. confidence the opportunity of this EPS transpires. all in to as gives All pushes opportunities growth, plan, side would point for of the the we of us

growth, before calculated prematurely load updating our a are We we capital taking about the the we and on to to load. very smart support plan be put want new the position

our might Shar, one X,XXX metric X.X% I growth. gigawatt this, to just you in hours give load add thing on represents a is increase

a as So 'XX, trending that said, end opportunities to higher do update in X%, continue the materialize. we'll you to to update we'll comprehensive if Brian are we And we X.X% February. of more during and see

that I get company, X% the is think would and the about X,XXX about sense X.X% of help that, our to gigawatt we'll we're I given moving. hours of we're how quite being But going. note, from I should think the keep and to size X.X% move a believe strong, load proud growth of I thing X.X% you metric other of

it. Got

Okay.

obviously, preferred, into we perpetual And then kind one that. February's I So which a you question coming. head appreciate just of Brian. as has Brian, maybe more have update. dividend guys for reset a

your what's What's September, in guess, think the I refinance I plan, to embedded it? numbers? in

perpetual paying September. that we'll that it's other as clearly question, No, what at well to And look is preferred. some of the at the current sense. available we plan it's that, and and financing the the yesterday deals Shar. as sheet in But at preserving support And lot product market presents saw a encouraging, our balance all we're good tools address make for. preferred as to going repricing doesn't rates, those it that are look We the a move towards whole options

we're out and take that So at to other looking ways tools. use

And Big first congrats. many Fantastic, on guys. calls. your Perfect. congrats Harry, Okay. of earnings

Thanks, Shar.

Thank you, Shar.

Our next question Stanley. from Morgan David of comes Arcaro

You could -- some flight IRPs, I'm plans that that are the about how could elaborate you're now? -- and affect you resource in of wondering EPA how if rules just thinking right your new longer-term

continue we territory, meet very to at and looking growth the I'll also affordability point, and maintain very our how eye carefully an looking decarbonize in but rule, take To service at on the reliability. that. carefully your we're

North those They're can that strategy. processes in continue the And to XXXX. CPCNs above this very have of load think opportunity for meet all now. over We great right a within case front of really public. will the We be Carolina how present we will the course of

the in process of implications IRP the an And in Indiana. also are in that new the doing reflect we'll rule We of IRP.

gas on that that consider. we're of fleet all would I the week reliability aging formula into part everything it, indicate recognizing of the and a at addressing this So mean. to and might a with what coal meeting from load, to continuing we'll eye looking is an conversions, to an affordability co-firing study We're

I is number rule, at as the we're that's a there being looked something think are of and that questions industry, across within litigation also the because evaluating well.

then find opportunities growth the you development following of come expansions what also to CapEx and that And load longer-term load upside further of might T&D be of what that. elaborate there mean and T&D in we're side, growth does could you're it. economic you forecast, for Could out the on as kind there do and but elaborate seeing about your capital could you could load thinking plan just your of Got thinking up increases? if on maybe growth more the in topic potential on generation, how terms on what upgrades what from maybe come

single No, Brian. day I'll really David. good in and It's Duke Energy. This evaluate take here question a that. is we one every

we're investments, it's and need in seeing a just the to we to Duke way, how we're customers that places It's about find modest as and best need. in them demand more affordable serve resources, the And we our development to As as put way because on well more customers not opportunities, it's T&D a or to system. evaluate reliable know capacity loads teams we Energy places we're the T&D we talk going we across generation the to the that present too. the have economic -- when support capacity with upgrades going And your point, generation. the

as update a next together Shar's that. to sheet. think of out all a we're billion want finance increasing both but we're this CapEx XX-year needs well We've expanding And how years, going have over plan time, higher billion. the to load to drives in our contemplates investors as to look that we that we I question, And will profile. plan, billion load. the $XX view all we for resource financial guided like for preserves we as so in going $XXX that well X I of bring to as do growth capital, as XXXX As to our strong serve to an this demand $XXX And said, fulsome balance see roll

really grid We've last modern add. mechanisms the in generation years this developing that been would investments over successful And prepare I thing for to those one grid transition, jurisdiction continue. really investment. will every many the and are regulatory in for David, running

look X So largely next reinvestments. our if you at years,

very point, to to growth wealth investment we And sense. And and sustained returns going in we emphasize generation our long constructive time. period so just grid out a see way, a of of Brian's opportunity in both that jurisdictions at over that we'll a delivering pace makes a that shareholders of here have such keep

we're excited what growth potential represents. this about So

next with Evercore. question Our comes Chopra Durgesh from

questions. X just I clarification had

First, if CPCN IRPs? and North intertwinings Will sort plan? remind can be that between second, And CPCN you in Carolina, current is ads the process of the any incorporated then to your Or the your plan? incremental CapEx that already CapEx current into

And the the talk take second about the Harry, want in the So plan. Carolinas. capital process I'll IRP question, are CPCN to you and those investments Durgesh, in CPCN

Yes.

expect being in ] the order and for still process different those proceedings. X a Carolina North XXXX. in we path the the reliable in Path. December Path our that South later we expect is have our making by that a and focused reductions. our in filing January states. going IRP The in preferred be we previous Path CIRP for X-gigawatt supplemental with to customers (sic) of year July in Carolina of while We're still on affordable and show Carolina for of from and coal out proposed our each hearing we're increase filing. from This X, we plan showing Durgesh, this Well, So and X in And our meeting November carbon in September, sure North we're X, [ an plans pathways, Path needs an

case with well. we And will and resources, through hearings talking and commissions and in summer, comfortable forward putting and to it solar of an proceedings we're what the our but feel forth it's been very the stakeholders. particularly the additional We've to batteries and gas as adding new some this defending through continue look

to hearings would on expect and occur to CPCNs, the the we Durgesh, CPCN IRP hearings the And follow.

in commission half just the of all of outlined the that have this line time year. in Harry would front this of the So second

And we'll keep way. so every informed you the of step

Awesome.

though, that Just I'm proposing? the filings, quickly, the Lynn, gigawatts IRPs thinking answer CPCN you're just to the the yes. are incremental is

is Durgesh, entire load. and approval of assets. to well, this renewables IRP batteries way demand resources the process includes efficiency, response, to and and is the CPCN generation. achieve a works a unique collection it view the necessary The is And meet of multiyear energy of discrete

would a gas line the can that build go plants we and through those are the estimates when assets. share so proceeding IRP time in these that So we included separate cost for

the about think should you So as filings complementary.

The Crowdell Mizuho. comes from Anthony next question from

guess talked loaded. of -- more the maybe is I you about load if could Just growth earlier I back-end

You know guess, fourth I Is call. of guys have end of the happy you on the you'd more XX% yourself give end company that I stronger would sheet. 'XX? as But of maybe the how already be think Your is updated end you'll like maybe the is is And on the the earnings think focused 'XX, or and to quarter that where And balance the I cushion if could at earnings translates with be? balance targeting of opportunity you're an into be it to there. that where in maybe believe sheet back at target plan, the potential we growth. you're

good That's And the in time. a QX mentioned for call, plus FFO we look out XXXX, we've as in XX% question, as Anthony. XX%

at Carolina XX%. year. rate it the North to to So stay over we're not going we've put And cases got through this We're benefit that, continue of the improve guiding time. to going

rate underway that potential gives at opportunity the in other the have growth, I the continue we'll actions range will also the to And strengthen balance out all Carolina, plan, support all also are to of then earn the sheet. as end benefit we Next think higher look continue the year, the us top South to Indiana, line the to credit. Florida, these jurisdictions, which supports of Piedmont,

approach going I So take that for a provides balanced well we're sheet as growth investors think over as balance time. protect a to strong

next question Carly Davenport is The Goldman from with Sachs.

keeping or a also the think generation about been new transmission in both procuring seeing we in perspective from from mind? that whether kits you equipment generation. be should plans, an as perspective, supply Have investment just it's you on any and Maybe kind your of capital grid anything constraints chain -- and

thanks that Carly, for question.

all capital and since solar years period issue our COVID, the worked plan kind ago, panels by challenges chain agreements a we've was framework to As would hot solar a say been we couple area, long of and of secure over entered it's panel issue. supply into of a needs. the time I

year also years partnering scale tight really really a a a last that It's Duke going OEMs them row. hot had transformers was and and now to in on Energy market, with work are spot. with going these we're still but how through size with We we multiple the of

generation certainty And manufacturers to build turbine like as we to learned we is build. multiple take must generation and components over contractors, we're what them give our to But X revenue on give on I and or we've And similar components at the X scale, areas side. the years look the support looking certainty we're side, at a other partner EPC to on think approach. going that suppliers us with labor

one been we transition. and it's model the So a it's want replicate as we advance to successful

need staying we would mentioned, is we to really to of our we curve in like I when have to vendors to it that able of do And but better, we've make able to as ahead our be to forward, Brian what are preorder But using that the look need going. preplan getting plans we be better, and getting it to to stay investment sure some been and our and to there. scale and we're keep Carly, continue curve. we're the able put going And ahead place things processes with add, partner

bridge quarter? last to all saw gap buckets the level last on us helpful. the to That's And at And you FFO maybe question. relative it. really changing we you sheet that laid then of to you just balance the just just walk out sort that debt any then Can the XX% quick to stand? where currently getting follow-up of that relative quarter, a Got update of are on what

making last the Carly, cases year, rate single in were the being with the a once largest North the Carolina. year-over-year. one is FFO driver happened Those Deferred are but on track. updated, update Carolina from improving North recovery also for really fuel DEP December we of we progress rates FFO

So DRIP. the on We million all $XXX in of recovered fully track by we'll year. to the is We're the and and QX, continue did end throughout issuing fuel the be equity, deferred the the get ATM year, that that's $XXX the lastly, million year of monetize year. to the IRA And the from on to half expect the end and the tax second of credits we by to last component. this

So the sight. we're exactly of wanted we and quarter tracking clear where end looking first be the to at is in

And Jeremy our from with Tonet next is question JPMorgan.

I to you out follow just laid additions there. with wanted up proposed gas the as

flowing of wondering different just parts I point? gas the you think how in difficulties the in that we've into territories incremental building how country? you about new Just given your this seen at see, guess, So pipelines wondering

Jeremy, thank generation the supply of you. assignment. Making is sure that part we for a have new adequate of source any

work is that not there. as continue of but But a the over with work to not in credible of number Commission years, closely got the the XXXX continue at be and strongly fully agreements that the in will place are make area, infrastructure by generation, believe lot sure feel allow met and build it and are with we like in that Indiana existing the working support will being by us putting monitored execute. And in only this in of only plan it confident to been a is stakeholders expand. pipeline who as stakeholder gas putting takes well we to we're North and be diversification place a Carolina we've and needs our but executed recognizing something plan we so we've will also place have we to got course partners can we so over that our place, And concerns the

diving then growth load -- expectations. Got maybe And it. just into

wondering we think, industrials further, up in go quarter, Just down a I X.X%. the could if were X.X%, bit commercial was little

materializing you half what as to growth touch increase? of as, a guess, see year I things If talk you of that on could over well 'XX as based about balance the back you accelerate specific the the

the in quarter, saw we that Jeremy, through. year. the in regions expect the it's commercial to growth, talk Data to a and item commercial sector. a across in key And we that good center was our the growth on continue driver throughout strength

the that we side plants for are products. retooling of industrial On things, new some have

quarter. first is in going signaled to look, So our And coming in they're late they lines off-line us temporary be to we're and a back and this thing, that, on mid-QX, the we're changing QX, by full.

a as it, Those tide well, and on to industrial tracking we for we're are those planned. needs continue this second of And were we see as the customers because the thought in their saw we'd XXXX. in frequent lag by economic to need they're plan. they And then talking basis that half last we and there and ensure year, to trend mid-XXXX, turn. lastly, we're to development our meet when projects tracking these And on are kind slated online expected coming this

you our in learn X% on growth XXXX, are keep for we more. apprised So track as we'll we and

This the session. Q&A concludes

any remarks. closing hand to for Good the back So over Lynn I'll call

and you, interest your of all you. Thanks in to Thank Duke Energy. for thanks

available joining we're today. for your follow-on and always, questions, investment. for appreciate Thanks As I

concludes This call. joining. Thank today's you for

your You may now disconnect lines.