(Reuters) -Duke Energy on Thursday raised its five-year capital expenditure plan to $83 billion, a 13.7% jump, to accommodate rising demand from population growth in the U.S. Southeast and the expansion of data centers and advanced manufacturing, the company said.
U.S. power demand is expected to hit record highs in 2025 and 2026 due to growing demand from new AI and cloud computing data centers and the electrification of buildings and transportation, according to the U.S. Energy Information Administration.
In the country’s Southeast states, where Duke is among the biggest electric utilities, swift population growth is also driving up electricity consumption.
The company projects load growth from 2027 to 2029 to jump to 3%-4% from 1.5% to 2% within the next two years.
Most of the $10 billion increase to Duke’s capital plan will be used to expand power generation, while a major portion of the broader plan is aimed at bolstering the utility’s distribution and transmission lines.
“We’re seeing a higher demand for electricity in our territory and we’re building more of everything,” Duke CFO Brian Savoy told Reuters.
The company expects to add nearly five gigawatts (GW) of natural gas power in service by the end of 2029.
Duke expects to issue $6.5 billion of equity over its 2025-2029 plan, including $1 billion this year, as it plans to fund roughly 40% of the increase in its capital plan with equity.
For the fourth quarter ended December 31, income from Duke’s electric and gas segments rose 5% overall to around $1.4 billion from the same reporting period last year.
However, due to interest expenses, a high effective tax rate and storm costs, the power provider posted a profit of $1.66 per share on an adjusted basis for the reported quarter, in line with analysts’ estimates, according to data compiled by LSEG.
Duke, the largest utility covering North and South Carolina, saw Hurricanes Debby, Milton and Helene hit its service territories, which ripped away miles of transmission lines and power poles, leaving tens of thousands of its customers without electricity.
Higher-for-longer interest rates can weigh on utilities, as they make investing in the construction and maintenance of critical infrastructure such as electrical grids more expensive.
Revenues of the Charlotte, North Carolina-based utility came in at $7.36 billion, beating analysts’ average estimate of $7.33 billion, largely due to higher residential sales and higher rates.
Duke forecasted 2025 earnings to be in the range of $6.17 per share to $6.42 per share, the midpoint of which is slightly below estimates of $6.33 per share.
(Reporting by Seher Dareen in Bengaluru and Laila Kearney in New York; Editing by Shailesh Kuber and Aurora Ellis)
