Earnings call transcript Q1 2023

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Operator

Hello everyone. And welcome to the Duke Energy First Quarter 2023 Earnings Call. My name is Nadia and I will co-ordinating the call today. [Operator Instructions]

I would now hand over to your host, Abby Motsinger, VP of Investor Relations to begin. ahead. go please Abby

Abby Motsinger

And XXXX everyone. update. earnings Naida. Energy's to first quarter review good you, Welcome morning, Duke Thank and business

our Executive Lynn along is call President Leading CEO, and Good, with President Vice Chair, Savoy, and CFO. Brian today

The of forward-looking the information meaning factors of and and outlined statements, appendix laws. and will securities measures may results disclosed the financial Energy's herein use financial those discussion the includes and non-GAAP in measures. SEC presentation Today's be supplemental of along Actual disclosures, include forward-looking reconciliation within different filings. non-GAAP Duke today's of than are information with

So with Lynn. that, to I'll the over call turn

Lynn Good

you, January months on per a among results Thank announced reflect winter good $X.XX and we the headwind warmest quarter. Today, adjusted share weather from territories. February These Abby. $X.XX earnings service ranking with morning, for and record everyone. of the our across first

and taken a its In agility will last already we've which just with enterprise, January fact, walk XX had response, Brian through February you DEP action across in the in In the moment. warmest measures activating years.

$X.XX to three the a We're growth including range. our strongest to reaffirming our of XXXX to off of quarters midpoint With rate deliver track X% XXXX our guidance X% quarters long-term also midpoint of of $X.XX ahead, on we $X.XX. range XXXX the still remaining, are with EPS through

update provide I the utilities, Before to would of an on regulated our turn to renewables our sale like commercial business. I

separate energy utility business distributed scale we business. know, the have and you processes sales for underway As the

look to for process of near we'll the update future. and in the are We stage transactions the late you in both

second proceeds in half the We of continue to year. the anticipate

of partial on our customers initiatives rate with in public case. our agreement It to [indiscernible], to proposal. a supporting we're approximately represents Slide recovery that With the billion Duke base approximately to to each Carolina, who The capital the North the staff Energy historic and multi-year investments on rate recently we forward-looking of rates a in of Carolina. customers, journey $XX.X In modernize making X, Moving reached the clarity $X.X us DEP's plan, retail in well Progress our milestone provides flows cash jurisdictions. industrial rate settlement progress also on North case settlement strategic company. meaningful mechanisms of represents the the base significant settlement and DEP's continue largely billion delivering while align with for value positions depreciation in

in expect month. to Energy rate to we begin June and rates implemented will conclude October and on refund, case expected to later were to Evidentiary three be on permanent about rates approval reached are scheduled to we hearings open North residential work able Further, agreement settlements These pleased in began Carolina Utilities and to the to [indiscernible] by We case behind The hearings performance the the with be metrics incentive Duke public Carolina's months DEP items subject to be is staff effective August X are Interim XX. this the decoupling. and case. subject May X. in Commission. narrow

settlement April. in approved into went to Carolina, Revised February. in a commission the in Energy rates comprehensive Moving case rate effect Duke South progress our

storm costs recently of also approval approximately received Progress. million securitize commission We $XXX Duke to past at Energy

as and deferred months XX updated storm recovery in hurricanes of request April fuel the over costs storm Ian recover the storm with replenish cost We’ll and In as with months. and reflect Nicole, in Rates Florida, reserve costs approved associated debt return. a March. over well fuel capacity our commission XX were

April, in manner, adding the XXX in four solar expand also March and to continue study We our totalling responsible projects fleet megawatts. renewable and

forward. adding operate we With approximately plans continuing Florida in year to of going solar now with a megawatts XXXX additions, XXX these megawatts

for transition we've Indiana, in signed session. energy customers. quip maintaining bills, generation. to execute into and Indiana rate an while legislature and law our including which our reliable for base affordable ability bills XXXX, had gas allows legislative was power and several The House passed active natural Bill energy These In support

CPCNs, are We the we to this which later Indiana with in the expect filing quarter. process of finalizing Commission begin

Program a evidentiary In subject expanded on Ohio, May natural is we to The XX. and agreement scheduled hearing on with approval, Capital to multiple staff rate reached which in revenue comprehensive for the settlement the parties commission is case. gas includes our Rider. PUCO Expenditure An begin other caps settlement,

December. are And in July. in electric Kentucky, evidentiary to rate rates If commission into the is case new the in go conducting anticipated hearing filed on approved, today an effect

are great in investments meeting across customers. our better to advancing our commitments, on entire progress strategy a and territory, our our We making way serve balanced service

It we're strong energy April the in in corporate published Our Disclosure value our impact justice and transition. Duke broad and Annual citizenship goals environmental XXth This includes reflected workers. for customers, including to the and creating development report, and employees, from comprehensive to is rescaling economic Energy's track redeploying Topics. communities a Sustainability and outlines progress our on on topics, also and range of report was record our

the energy line the reliability $XX half part plan our grid five-year grid and talk capital improving our operate for I the XXX,XXX preparing of in focused turn moment Brian, a over renewables, call is with accounts more grid critical plan. let which Before to is The about of and nation. largest over billion our take investment The is We the our and grid to resiliency, plan, miles. transmission on enabling transition electrification. system of me than a for foundation and distribution

when storms undergrounding, and a the investments an ability security growth are against on rapidly and self-optimize substations. there's to restore reliability We're grid investments resiliency cybersecurity trusts strengthening and making upgrading power and and lines variety the including targeted technologies outage. programs, physical centered improving targeted upgrades, of and Our across

of restoration Ian efforts less last to where our restored fall, investments Our response in power Hurricane time difference Irma are XXXX. half as making our evidenced Hurricane the in already a we by than

the growth timely also our recovering and customers. investments highlighted mechanisms establishing These strength great mitigating sheet slide, a lag made As on progress in jurisdictions. delivering to mechanisms recovery supporting while benefits assist in our constructive we've in across balance will manner,

From to and to to policy, renewables improvements action ready system installing collective transform the for future. the grid taking advancing we're

have growth. a We are to value clear path earnings deliver will and sustainable our and X% investment plan forward confident X%

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

Brian Savoy

start the quarterly good Lynn, year. to and morning, highlight variances Thanks, key I'll and with prior everyone. results

$X.XX. As $X.XX last $X.XX earnings adjusted and our $X.XX shown to compares per quarter earnings share share on of year. reported and and were X, earnings per first Slide were reported This share adjusted per

impact exclude renewables, is commercial which in reflected operations. results of the Adjusted discontinued

Within $X.XX & last year. compared segments, Infrastructure Utilities the Electric was down to

February, Lynn memory. mild This which a As compared in mentioned, to in normal. January impact drove weather extremely the results and $X.XX headwind seen most recent significant is these reflect we've weather

increase of settlement our a the rising in step-up to offset by higher with impact were were the Consistent interest we from plan partially expenses and our Florida and a case lower under cases result impacts rate addition well point terms, basis lower rate volumes current January, of and the ROE as as primarily had XX in annual interest O&M In by growth driven utility. quarter multiyear rates. weather, as riders. Rate an

and Utilities from were primarily customer to Moving & results Infrastructure, $X.XX year-over-year, additions. higher due Gas riders to growth

headwinds. talk full-year inflation take retail to to mitigation volumes, I'd in previously, cost interest and We're a rate million efforts XXXX which $XXX about that currently address to discussing expectations. and executing O&M our we our moment were plan incorporated Before reductions into shared like the base

to XX% mild we've scale to As are already and said, into of activated in structural In weather we've opportunities. QX, sustainable will identify savings leveraging agility scope measures, years. these be response further our savings future and

efforts other work, past, levers. reducing services These As tactical to travel on and and O&M over we've limiting done spend include noncritical and looking among in time, nonessential outside the we're deferring others.

and keeping efforts, the these service unwavering at about approach. our our customer reliability thoughtful be will commitment of forefront to We

Looking in Carolina decoupling we will until by to we ahead, flex successfully in the done But residential then, be so muscle the will fully past. agility have continue that implemented North XXXX.

Turning to Slide volumes on X.

a load X% has closer to it's basis, year, growth which When pre-COVID trends. XX-month last had saw rolling moderated to robust quarter a important on we very to nearly expected, XXXX, that growth. note As comparing first

QX addition, was when weakness and this weather of the year February seen was nearly in January extreme. all In

it be April, in and challenging March situations, to weather with closer In of expectations, when that neighborhood load the the variances. will volume these total precisely be normal, In growth can of volume estimate confidence X.X%. giving to the weather more XXXX was consistent component full-year us were trends

well as seeing to strong. Continued strong customer Many the into be continues strong remains industrial an in impacts our by Lingering class, usage. supply in in isolated economic growth The outlook. territories as to our class chain continue a the plant population service some closure in impacting remains factor that migration confidence in our also development With robust. Carolinas. are territory the electronics be manufacturer as customers service we're said, also the as In seen sector residential industrial expanding, fundamental weakness and textile we've ever. our supports an growth larger of

recently released example, economic final development results For XXXX. for our report impact highlighted our

new sectors to operations our provide EVs with new semiconductors, partnered customers, as load will territories. our such over attract service represent battery, growth several to Over capital year, up. as jobs $XX the key billion XX,XXX states which we investments in ramp These and and meaningful

communities the serve and long-term We’re us our proud economic which these support confidence give the we for in territories. service of accomplishments, further outlook

lower also Slide billion a commercial made productive an of $X.X balance our we and convertible these We’ve expense. issuances. completing on advantage to dynamics, around In issued interest activities been attractive planned market option. We which our X. on to of notes XXXX opportunistic taking financial April, reduce XX% had paper quarter Moving of first notes

good proceedings during the made we quarter as Importantly, well. on progress fuel

April we the full Florida, for recovery received fuel a of rates updated XXXX X. In balance approval with deferred

in February filed also billion in deferred DEC Carolina. approximately of North recovery of $X fuel We for a

rates uncollected receive Carolinas We costs. be over expect for the to the in order remaining out round the an Filings will August September. implemented and addressing summer to in

end. the XX for year, year impact commercial to from positively company. of avoidance sale by by the debt we expect we at these to Combined, be this will addition, continue second to XX FFO In points the expect collections will debt completed proceeds renewables points used which items and sale basis half basis holding fuel the of two in

investors, know of for well. sheet the mind at planning our balance forefront is the credit is of I as and top

Annual evidence taking and transition energy maintain execute plan in are balance commitment balance In recently were at fact, their the sheet company. and our April following Moody’s. outlook This holding recognized further that we appropriate strong current our capital advance the In our place by and and our steps our we efforts stable to the Meeting, ratings sheet Moody’s reaffirmed is have to right credit as plan.

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

initiatives key on deliver and communities in commitments as progress on shareholders. to important the positions first priorities Our customers, to us quarter that are our we our execute the well

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

Operator

Thank Pourreza first Guggenheim you. Shar, [Operator Our ahead. goes today to go of Shar question please Instructions] Partners.

is open. line Your

Shar Pourreza

guys. morning, Good

Lynn Good

morning, Good Shah.

Shar Pourreza

morning. Good

year? to where Just in question do of the I the under are Are that’s the them normal the the at that Those kind XXXX range guidance this $XXX weather where structural within is, there. – of nature? stand within on. assumption short-term range I potentially juncture? guys confirm incremental EPS touched out key guess, comfortable the cost still million figure you Brian Are for is any cut to rest you And the guess, do measures, of you

Lynn Good

of deferral, because fundamental initiatives $XXX yes, things those me taking completing that and structural. work, The is actions XX% let identified talk it way various changes the reducing times, expenses, call many tactical. largely talk know. work, and answer work, about this we we are you et year, of we making The for achievable, spend, million Shar being it’s cost about last is in talk underway. non-critical I would we so have would to the prioritizing done that to When we’re that the as I that work, This about those more weather, call is third-party response cetera. staffing When types we’re weak we’re

a combination are year any that And of $X.XX reaffirming of planning all are activities something enter and doesn’t expecting in as in as contingencies we outcomes case the out the $X.XX. as exactly of planned, to the work we these so of given establishing fact range well range confident

And to this year so we’ll you [indiscernible] the continue our progresses, update reaffirming as point. but at

Shar Pourreza

more just and you sale and expectations obviously maybe commercial Could to just date. late stages what’s there. capital new why obviously markets? charge. announced? guess, driving have come the can took I the XQ? another buyer Just of Okay, perfect. something it is interest? second And revision some sense see million sale year-end? Is obviously off we then commercial Thanks. This being – the Lynn, the to mean, second language, we Is Is I it elaborate it when in And charge the $XXX closer

Lynn Good

sure. are continuing And we Yes, appreciate question. progress. I the strong

expect provide We’re information in able and to on stages where be to late the shortly we more are.

the recognition charge that process. of take additional an the further to statements continue fact placed financial on of discontinued book we right whether Given value we have into business we evaluate did the net impairment have progression operations, the the representing and

remains our process though, to say estimated the you, this would value I we in assumptions. planning that that within see

would us a that we move as point the process. there to as nothing So through I for here surprise is

continued in on a concluded process based discussions As select that And complete, that made we and owner the decision is the natural the projects negotiations owner that is marketing bidders. have two progressed. we’re example, owner minority and have we to involving, majority separate for the of are and with a we discussions negotiations

all look anxious of that feedback this be and soon at a demonstration So process we’ll end as we’re and further appropriate. announce the you you give as of should that’s as to nearing the

Shar Pourreza

morning. Have I the perfect. Okay, color. appreciate a Thanks extra guys. good

Lynn Good

Thank you.

Operator

Thank question Julien Julien, ahead. of Dumoulin goes please America. go Bank you. The to next Smith of

Your line open. is

Julien Dumoulin Smith

you Look… Thank team. it. morning, very good appreciate much Hey, guys

Lynn Good

Julien. Hi,

Julien Dumoulin Smith

forefront to renewable here. In last some the on your to it of wanted go the was the up many credit specifically about you Hey, back Lynn. I said and at comments, Brian, of good people’s is sale expectations brought morning, evolving minds. question,

obviously want clear elaborate bit changes to Just balance here annual just any about in you the you mean, a fairly crystal sheet. cadence, do seems you’re It you here, be this, a which back target CapEx got a in affirmation, especially I about the on barring how get can to like thinking little to XX%. following

points any expedite basis target? to need or plan getting XX considerations level about here, the basis to comfort points. your and further talked to long-term to the very equity the You XX equity-like specifically But with address that

Brian Savoy

Thanks, Julien. for it’s right of and it the And and mind is for top investors. question, us

on of billion in deferred right? XXXX? thinking It we really Just nearly pressure about We what was was under-collected the felt fuel, $X focused deferred fuel.

of costs $X.X restoration storm billion. had also We around

cost So sheet as that we we were plan the balance XXXX. didn’t moved for of billion $X.X into

the to year target Duke the needs in commercial the later to where balances, we that year us we We’re equity that happen balance it of starting XXXX. right Florida, to target along recover deferred XX% deal will that and and with to out fuel off at for next we Carolinas proceeds in through Duke right renewables, with deferred year, no FFO and sheet two come fuel And contingencies that balance of feel is recover the to put chart the over and cushion Energy positions slides years. as with is show come this DEP a the be debt Energy the those

Julien Dumoulin Smith

specifically you good here. for Excellent. to therein assets progress of your on if fuel. I comment hands hear think clearly, mean, separately, that changing options. the thoughts you obviously more can potentially hitting And and the utility Would Lynn then a here, around, moving about you different love lot Thank as

evaluating in here, around plate here? respects in further can some angles, thinking at elaborate of full especially your a latest obviously you got You’ve least assets lot the a but on novel Carolinas perhaps

Lynn Good

would growth the focus one organic strongest executing say plans is we primary our is Duke what I of around. Julien, at think

the going beginning on is generation in of at also the but Indiana, from Carolinas, coming with is clean look you solar well as transition not year. Florida energy grid production only plan. storm with the this strength CPCNs yet investment continuing deliver transition development, As to

like just feel we So plan robust capital strong got jurisdictions. and forward we've moving a

growth. organic on is focus primary our So

do assets time As time. become you to note available though, from

our We maintains just growth, and our maintains on but right focus them there. it leave the focus a and on sheet, so for value, I'll between constructive jurisdictions disciplined they us balance utility a that sense on will we'll that recognize in do make health look focus balance maintains a at way if customer

Julien Dumoulin Smith

earlier, there, respect about Excellent. you quickly, obviously clarify super if out here? could look the this I'm your And thoughts any just you've what b) like with could I that CapEx Indiana, that further a) and just entry year, then IRP if to have got curious, if could change

Lynn Good

really we a question, in good Julien, It’s have IRP update to because continued Indiana. the

we the profile result time. new over but addressing remains and that same, a assumptions seeing ought we're Our we of in the IRA, of planning as coal the retirement renewables to are Mica's how increase and seeing largely impact be also

So non-intermittent intermittent and we the are on that CPCN filings include both resources. will of verge

again to moving right We around decade, pace get in started we say of that work would process in like the that way for we're will in more there update XXXX as around is through back Indiana but this the continue transition. we'd transition, and IRP state. the sense probably customers the evaluate whether part makes the potential at get into I energy in a the it to to

really Indiana, on come pleased to more we're the making. with progress So

Julien Dumoulin Smith

guys. Thank Excellent. soon. you Talk

Lynn Good

you. Thank

Brian Savoy

you. Thank

Operator

open. Research. to Thank Fleishman goes Wolfe of next your go The Steve head, Steve, question line you. please is

Steve Fleishman

morning. Thanks Lynn. good Hey,

Lynn Good

Hi Steve.

Steve Fleishman

Are other taking of it So just kind on to just position? agreement, all? settlement if or is opposed parties Where's they North in are Carolina the not there parties case? are other the they any they a at

Lynn Good

with well as feel strong like as cetera. the the pleased we're groups, staff in would staff be public et is General settlement public, The groups, industrials very the industrials. But case the with and the I some two and parties environmental Indiana. important there really consumer and we Steve, Yes. will say Attorney of

on settlement and host of a performance a included. things mechanisms, incentive the have also transmission, allocation We there're

guess we case. feel Xth week, So We're of like the and strong I strong believe of we progress. a on starting, demonstration last it's very a stand May have

Steve Fleishman

Okay.

Lynn Good

So I and may believe we've the I on they to other what strength the can't think – speak noteworthy. about settlement what what but the on Sigfois put together, staff of party public,

Steve Fleishman

Okay. and the helped cap lot years thinking Obviously Carolina terms the issue of to be lag. kind address of with fair then here a North with of to dealing Carolina in finalized, plans this of kind lag deal Good. just was about agreed the hopefully multi-year just say over ROE in would pieces that the are North parts you is in lag it need still upon regulatory structures of but that kind the settlement? – And lag

Lynn Good

I key step such that first really opportunity the really way the for some because to we that, an as that feel gives spent Steve, of time, will price like it's the And approval capital that is construct is we the is have in new you reduce us lag. forward regulatory in new way a that of legislation a adjust direction, as have and in know, and Carolinas in a capital confidence.

starting approval making think a to feel I back and like been legislation, that of commissioned making now around settlement that we're strong approve with we've progress. have progress have in the modernization way capital, settlement we that of with So course, towards a the capital or

Steve Fleishman

you. Okay, great. Thank

Lynn Good

you. Thank

Brian Savoy

Steve. Thanks,

Operator

Arcaro [Operator to David, question you. David Our of please go Thank ahead. Morgan Stanley. Instructions] goes next

Your line is open.

David Arcaro

my Hi, for thanks question. taking

Lynn Good

David. Hi,

David Arcaro

Morning.

that CapEx just outlook now whether in just confirm upside could plan, that got see, filed. wanted to the I the you've to site XX-year on I to there check in wanted Florida Let's be

Lynn Good

Yes, rate we're with we're enough. me is I plan, signaling XXXX we'll our David, through multi-year for get deeper whether of continuing progress into runs moving The think XXX Florida consider here. plan the – we XXXX. team year. as say And a megawatts about The I quickly it would

a and capital reset of on value will kind delivering we're, that expectation we'll continuing only the continue and the as also we right delivering Florida, customer to effective to So value whether pace, XXXX but focused in develop to, way. look at always customers along renewables of go, at not amount

David Arcaro

current at then rate been Thanks. And the wondering the just on also wanted progress? about it. case settlement. you've was just now Got what Carolinas Carolinas that potentially follow-up at your Duke achieving thoughts successful settlement I are getting Energy a the in to partial Okay. settlement

Lynn Good

to think settlement. I for our to achieve look ways posture always David, is

to case, the then think of parties discuss. an typically sit about you If and any the – down and file calendar of rate procedural you calendar positions their or have opportunity

in will as And case one. that the in we the course of pursue progresses. DEC updated we'll summer as did this keep We you

David Arcaro

great. Okay, Thanks very much.

Lynn Good

Thank you.

Operator

goes go question Bill, UBS. Thank Appicelli you. ahead. next to of The Bill please

line Your open. is

Bill Appicelli

Hi, good morning.

was I Good could some – wondering sales. the get Just around morning. color if

Some the you some extreme know sales commented April? I trends. and the trend around But March when normalization around it you the saw in that better additional just weather, color about why color maybe you can trends. more distort have weather the you feel,

Lynn Good

Brian, you want to…

Brian Savoy

had Thanks Definitely was the And all that growth of take remind want robust I sectors. that, you year-over-year that to a Bill. QX XXXX X% for in We question. quarter. strengthen quarter,

As we rebound, point. the that was COVID of out were peak coming the

the And to this expectations with course in we the, when And at looked February, a so volumes I over mentioned, those pinpoint volume to XXXX. are we're January as weather what weather our extreme in normalized really the watermark situations. year comparing hard and to it's true of trends and high normalized

those and with was to for analyzed close on results, both and weather were year. when the months track March the normal in And our April we expectations trends volume

XXXX the do the outlook as the in of like in feel bracketed as us growth X.X% seeing our regions. as into the February X.X% load and this long-term weakness as our So and January confident around economic right we industrial well and and growth we're development we for a customer X.X% is expansions is far at activity that feel because

Bill Appicelli

Can then that? other investment some just just you $X.XX gains. know around you there color I And was the year-over-year. some quick an you. corporate follow-up, other, pickup one on provide Okay, and great. Thank cited

Brian Savoy

and other in market and was S&P X% that had the first Yes. Trust’s and and market are returns reflected was returns types down. Bill, up a section. investments in quarter go around obviously and captive we that Benefit of investments strong have insurer We like up that

Bill Appicelli

so you Thank great. Okay, much.

Brian Savoy

you. Thank

Lynn Good

you. Thank

Operator

you. Thank

We CEO have for closing I'll no Good, further President to Chair, any now hand and questions. back Lynn comments.

Lynn Good

who and all and call Well, joined forward Thanks thank and talking look so follow-on Duke. We're in questions available you investment this today thanks interest of soon. to your for for you after and much. to

Operator

concludes so Thank call. joining. you Thank much today's for now you. This

may disconnect now lines. your You

Duke Energy (DUK) 9 May 232023 Q1 Earnings call transcript