(DUK) Duke Energy Seeks Higher Rates

Duke Energy Corporation’s (DUK) subsidiary Duke Energy Carolinas has filed a notice with North Carolina regulators that it will apply for a rate increase on July 1, 2011. The company expects the higher rates will go into effect from January 1, 2012.

Duke Energy’s recent plan for rate case hike is second in a series of three increases. The hikes are tied largely to recovering investments for the construction of the 825-megawatt expansion at the Cliffside Steam station and the 620-megawatt Buck combined-cycle natural gas plant.

Duke Energy got the first rate hike of 4.3% for residential customers implemented January 1, 2010. Duke will seek a third increase, likely to be filed in 2013.

Headquartered in Charlotte, North Carolina, Duke Energy is one of the largest electric power holding companies in the United States. Its commercial power and international business segments own and operate diverse power generation assets in North America and Latin America, including a growing portfolio of renewable energy assets in the U.S.

Earlier, Duke Energy reported a strong first quarter 2011. Earnings in the most recent quarter surpassed both the year-ago results and the Zacks Consensus expectation mainly on the back of a strong performance at Duke Energy International.

Duke Energy expects its adjusted earnings per share for 2011 to be in the range of $1.35 to $1.40. The Zacks Consensus Estimate for 2011 is presently at $1.37 per share.

Duke Energy’s stable U.S. electricity and gas operations generate a relatively stable and growing earnings stream. Looking ahead, our bullish outlook for the company is supported by its ongoing merger proceedings with Progress Energy Inc. (PGN) paving the way for the largest U.S. utility. Moreover, its strong balance sheet and ongoing capital expansion projects add visibility to the story.

However, valuation continues to be restrained by a number of factors, including the present unfavorable macro backdrop, predominantly fossil-fuel based generation assets, tepid demand for electricity, foreign currency exchange volatility and pending regulatory cases.

Duke presently retains a short-term Zacks #3 Rank (Hold), which corresponds to our long-term Neutral recommendation on the stock. The company competes with American Electric Power Co. Inc. (AEP) and Constellation Energy Group Inc. (CEG).

CONSTELLATN EGY (CEG): Free Stock Analysis Report

DUKE ENERGY CP (DUK): Free Stock Analysis Report

PROGRESS ENERGY (PGN): Free Stock Analysis Report

Zacks Investment Research

About vitalstocks

This is a sample profile field. Vitalstocks is the operating company for Stockbloghub. This will place the picture of the author or company in the profile. Here is another extra line of information.

Comments

Powered by Facebook Comments


Similar Posts: | | | | | | | | Electric Utilities | Utilities

RSS feeds: AEP | American Electric Power Company Inc | CEG | Constellation Energy Group Inc | DUK | Duke Energy Corporation | PGN | Progress Energy Inc. | Electric Utilities | Utilities |

Other Posts by | RSS Feed for this author