Duke Energy's third-quarter profit grows as it builds for data centers

What happened

Duke Energy reported on Thursday 5 November third-quarter net income for common stockholders of $1.55 billion, up from $1.41 billion a year earlier, on revenue of $9.1 billion. ^[1]

The electric utilities segment earned $1.82 billion, up from $1.66 billion. The gas segment lost $19 million, against $26 million, and the 'Other' segment, mostly holding company interest and corporate costs, lost $247 million, against $225 million. Duke credited recovery of infrastructure investment and favorable weather, partly offset by higher depreciation, interest and taxes. ^[1]

Why it matters

Retail electricity sales were 5.2 percent higher than a year earlier and 2.0 percent higher once weather is set aside, the release's tables show. Management said on the call that the 2 percent was its strongest quarterly growth since 2022. The 10-Q says data center demand 'remains a significant contributor to projected load growth.' ^{[1, 2, 3]}

The data center contracts

The 10-Q says Duke continues 'to expand our portfolio of data center electric service agreements', the contracts that set a large customer's terms and charges. It says the agreements carry protections that tie the cost of serving new large customers to those customers. ^[2]

Chief Financial Officer Brian Savoy said 5.2 gigawatts of data centers under construction are on schedule to start taking energy in the second half of 2027 and into 2028. A gigawatt is a billion watts. He said Duke is confident of converting its full 15.4 gigawatt late-stage pipeline to agreements by the first half of 2027. ^[3]

An analyst on the call put the signed total at 7.8 gigawatts, and Chief Executive Harry Sideris said talks are 'taking longer because of the complexities.' He added that Duke is 'not counting anything until it hits the ESA level.' In an interview published Wednesday 3 June, Sideris put signed agreements at 7.6 gigawatts and the late-stage pipeline at 15 gigawatts; in February, Industrial Info reported 4.5 gigawatts and 9. ^{[3, 5, 6]}

The build and the money

Duke's release says it is executing a record generation build to add 16 gigawatts of capacity by 2031. In June, E&E News described the plan as 14 gigawatts, so the figure is larger now. ^{[1, 4, 5]}

Sideris said on the call that the five-year capital plan is $103 billion, with $5 billion to $10 billion more possible once large-load contracts are final, particularly in Indiana and Florida. Savoy said Duke is investing about $1.5 billion a month, rising to about $2 billion in 2027. ^[3]

Sideris said large-load tariffs rest on contract terms such as minimum demand charges, early termination penalties and capital advances. The 10-Q says Duke's Carolinas utilities filed a tariff settlement with the North Carolina Utilities Commission on 6 October. ^{[2, 3]}

What settles it next

Sideris said Duke expects North Carolina orders on two rate cases and the large-load tariff by mid-November. The 10-Q says the combination of the two Carolinas utilities is targeted for Friday 1 January 2027. ^{[2, 3]}

Savoy said Duke expects to convert the late-stage pipeline to agreements by the first half of 2027. South Carolina is to hold a hearing on the 2026 resource plan in April 2027 and issue an order by June 2027, Sideris said. ^[3]

Who it reaches

Duke Energy (DUK) is direct: the results, contracts and build are its own. Spire (SR) is adjacent: it bought Duke's Piedmont Tennessee gas business, and Duke received about $2.5 billion at the 31 March closing. Brookfield (BAM) is adjacent: its affiliate holds 9.19 percent of Florida Progress, and Duke said on the call that Brookfield plans to move $1 billion of its remaining payments to December. ^{[2, 3]}