The operator introduces the Duke Energy First Quarter 2024 Earnings Call and hands it over to Abby Motsinger, Vice President of Investor Relations. Lynn Good, Chair and CEO, along with other executives, will discuss the company's first quarter results and reaffirm their 2024 guidance and long-term growth plan. They highlight their strong start to the year and attribute it to rate activity, retail volumes, and weather. The company's strategy, which includes a $73 billion capital plan, efficient recovery mechanisms, and positive regulatory outcomes, is expected to drive continued growth in their jurisdictions, which are experiencing significant population and economic growth.

Duke Energy is committed to meeting increasing customer demand through a strategy that balances affordability and reliability while transitioning to cleaner energy sources. By 2024, they plan to have 1,500 megawatts of solar energy in service in Florida and expect to triple the amount of solar on their system by 2033. In the Carolinas, they are completing annual solar procurements and aim to have 30,000 megawatts of regulated renewables by 2035. They have also filed for regulatory approvals to build 2 gigawatts of new natural gas generation, which will replace retiring coal plants and provide reliable energy. Duke Energy believes natural gas is necessary for the energy transition and complements their investments in renewables and energy storage. However, they are aware of the attention on natural gas and its role in achieving net zero emissions.

The company is facing a period of significant infrastructure build and recently appointed Harry Sideris as President to oversee all electric and gas utilities. Sideris has a track record of accomplishment and leadership and is committed to delivering value to customers and investors. In South Carolina, hearings for a rate case will begin in May, with an expected implementation of new rates on August 1. In Florida, the company continues to make progress in meeting customers' expectations through collaboration with regulators and policymakers.

In April, Duke Energy filed a multiyear rate plan for 2025 that includes investments in grid enhancements, solar and battery additions, and improved generation efficiency. Despite base rate increases, customer bills are expected to decrease due to the expiration of certain costs. In Indiana, Duke Energy filed their first rate case in four years, including a forward test year and rate step-ups. Piedmont Natural Gas also filed a rate case in North Carolina, requesting infrastructure investments and concurrent rate reductions for natural gas costs. The company is confident in their investment plan and expects sustainable growth in earnings.

The company's first quarter earnings per share were $1.44, an increase from last year. Electric Utilities & Infrastructure saw growth due to rate increases, higher volumes, and improved weather. Gas Utilities & Infrastructure results were flat, while the other segment saw a slight decrease due to higher interest expense. The company remains on track to meet their 2024 EPS guidance. Customer growth and usage were strong, especially in the commercial sector. The company expects growth to accelerate throughout the year, driven by economic development projects. The company is preparing to serve 18,000 additional gigawatt hours of load from these projects, an increase from previous projections.

The company takes a risk-adjusted approach to forecasting and only includes mature and committed projects. They showcase photos of their impressive construction activity, including a substation that will serve a $5 billion semiconductor manufacturing facility. The company expects 2% volume growth in 2024 and 1.5% to 2% growth over the next 5 years. They are focused on maintaining a strong balance sheet and are on track to achieve 14% FFO to debt by the end of the year. The implementation of North Carolina rate cases and other measures will contribute to this goal. The company plans to issue $500 million of common equity annually through their DRIP and ATM programs.

The company has completed 65% of its planned long-term debt issuances for 2024 in the first quarter, reducing floating rate exposure and diversifying its investor base. They remain confident in their 2024 earnings guidance and growth targets, and are well positioned to achieve them. They have seen an increase in economic development activities, but have not yet revised their low growth assumptions. They are considering the potential opportunities presented by this growth, but have not made any changes to their EPS growth guidance.

Brian Savoy and Lynn Good, executives at a company, are optimistic about the pace of economic development opportunities and load growth. They plan to update their full financial plan in February and are confident in their 5% to 7% EPS growth. They are taking a calculated approach to updating their plan prematurely. Lynn Good adds that 1,000 gigawatt hours represents a 0.1% increase in load growth for their company. Brian also mentions a dividend reset for their perpetual preferred stock.

The speaker addresses a question about the company's plan to refinance a perpetual preferred in September. They mention considering all options and using other tools to take it out. They also mention the new EPA rules and how they will be incorporated into their growth and decarbonization plans in North Carolina and Indiana.

The company is continuing to study the potential impacts of the new rule and is considering various options such as gas, co-firing, and conversions to address an aging coal fleet. Litigation is also being evaluated. As load growth increases, the company will need to invest in both generation and T&D to serve customers reliably and affordably. This will result in an expanding CapEx profile, with a projected 73 billion over 5 years and 170-180 billion over 10 years.

The company is focused on driving growth for investors while maintaining a strong balance sheet. They plan to provide a comprehensive financial update in their next report, which will include information on capital, load demand, and financing. The company has successfully developed regulatory mechanisms for grid investments, which will continue to support the transition to clean energy. In North Carolina, there is a CPCN process and IRP process, and the company expects to receive orders for both in December and November. The CPCN investments are already included in the company's capital plan.

The company proposed three different pathways for their plan, with the preferred option being path 3, which includes a 2-gigawatt increase from their previous filing. They are focused on providing an affordable and reliable plan for customers while also meeting their carbon reduction goals. The plan involves phasing out coal by 2035 and adding more solar, batteries, and new gas resources. The company is currently going through hearings and proceedings to defend their case and discuss it with stakeholders. The IRP and CPCN filings are complementary and will both be presented to the commission in the second half of the year.

Anthony Crowdell asks Brian Savoy about the company's load growth and how it will impact earnings growth and the balance sheet. Brian Savoy explains that the company is targeting 14% FFO for 2024 but will continue to improve it over time. The potential for higher earnings also allows for a balanced approach to both growth and maintaining a strong balance sheet. Carly Davenport from Goldman Sachs then asks a question.

Brian Savoy and Harry Sideris discuss the challenges they have faced in securing supplies for Duke Energy's capital plans due to COVID-19. They have implemented a successful model of partnering with one or two suppliers over multiple years to ensure certainty for both parties. They have also put processes in place to pre-plan and pre-order to stay ahead of supply chain constraints. However, they acknowledge that the market is still tight but are confident in their ability to continue investing in new generation.

The speaker asks for an update on the company's balance sheet and the progress towards a 14% FFO to debt level. The speaker explains that they update FFO once a year and are making progress through rate cases, deferred fuel recovery, issuing equity, and monetizing tax credits. The next question is about proposed gas additions and the speaker mentions the difficulty in building new pipelines and ensuring adequate supply for new sources of generation.

The company has been working on agreements to support their existing gas supply and allow for expansion. They are closely monitored by the North Carolina Commission and Indiana as they continue to diversify. The company is confident in their plan and will work with stakeholders to meet their concerns and needs. Commercial growth was driven by data centers, while industrial growth was temporarily impacted by plants retooling for new products. The company expects industrial growth to pick up in the second half of the year.

The speaker discusses their expectations for continued growth in industrial and economic development projects in 2024. They mention a lag in industrial growth in the previous year but anticipate a turnaround in mid-2024. They also mention that economic development projects are on track and they are confident in achieving 2% growth in 2024. The speaker invites further questions and thanks the listeners for their interest and investment in Duke Energy.

This summary was generated with AI and may contain some inaccuracies.