Duke Energy(US:DUK)2024-02-08 18:45Financial Data and Key Metrics Changes - The company reported adjusted earnings per share of $5.56 for 2023, reflecting a 6% growth over 2022 and finishing within the guidance range [21][45] - The 2024 guidance range is set at $5.85 to $6.10, with a midpoint of $5.98, indicating more than 7% growth over 2023 [11][21] - The effective tax rate (ETR) for 2023 was 10%, with an expected increase to between 12% and 14% for 2024 [31] Business Line Data and Key Metrics Changes - The electric segment anticipates normal weather and retail volume growth of approximately 2% in 2024 [11] - The gas segment continues to show strong growth due to investments in integrity management and serving a growing customer base [46] - Residential customer growth was strong across all jurisdictions, particularly in the Carolinas and Florida, with a 2.1% and 2% increase respectively [12] Market Data and Key Metrics Changes - The company added 195,000 new customers in 2023, marking the largest customer increase in its history [12] - Economic development opportunities span various industries, including semiconductors, EVs, and data centers, contributing to a load growth expectation of 1.5% to 2% [13] Company Strategy and Development Direction - The company is undergoing a fundamental repositioning to become a fully regulated utility, with a projected $73 billion in capital expenditures over the next five years, an increase of $8 billion from the previous plan [2][8] - Investments will focus on a diverse energy mix, including renewables, natural gas, and next-generation nuclear, to meet growing customer demand and transition away from coal by 2035 [25][34] - The company aims to maintain a strong balance sheet while pursuing growth opportunities and optimizing capital allocation [50][94] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the company's ability to deliver sustainable value and achieve 5% to 7% growth through 2028 [17][21] - The company is committed to safety and reliability, achieving its best safety performance in history in 2023 [4] - Management highlighted the importance of infrastructure investment to support economic growth and customer needs in its service territories [54] Other Important Information - The company plans to file for new generation resources in North Carolina and Indiana, targeting over 2 gigawatts of new natural gas generation in 2024 [25][72] - The payout ratio is being adjusted to 60% to 70% from 65% to 75%, providing additional financial flexibility [52] Q&A Session Summary Question: CapEx expectations and scenarios - Management indicated that the $8 billion increase in CapEx reflects early estimates and will continue to be refined as regulatory processes progress [40][41] Question: Nuclear PTC market and risks - Management confirmed strong initial responses in the transferability market for nuclear PTCs and emphasized that tax credits directly benefit customers [42][43] Question: Load growth outlook - Management expects a 2% load growth in 2024, driven by economic development, residential normalization, and optimism among existing commercial and industrial customers [106] Question: Timing for Indiana rate case - Management is evaluating the timing for the Indiana rate case, considering capital investments and regulatory cycles [72] Question: Dividend growth and payout ratio - Management remains committed to dividend growth while adjusting the payout ratio for financial flexibility [81] Question: Regulatory strategy in Florida - Management confirmed that they will continue to engage with intervening parties in Florida and pursue constructive outcomes [83]