Duke Energy opened 2022 with a strong first quarter performance, but company officials indicated during a Monday morning earnings call that electric sales growth could slow in the latter half of the year.
Growth in demand for electricity brought adjusted earnings for Duke Energy’s electric utilities to $896 million for the first quarter of 2022, compared to $820 million in the first quarter of 2021. However, Duke Energy Chief Financial Officer Steve Young said this rate of growth is not expected to continue.
Duke Energy’s solar projects remain on track to meet a revised 2022 schedule, according to CEO Lynn Good. However, she said the fate of projects slated for 2023 and beyond remains uncertain pending the Department of Commerce’s investigation into solar tariff circumvention.
Duke Energy leaders remain optimistic that the company will to complete solar projects planned for 2022 on time after taking action earlier this year to combat rising costs and solar panel shortages triggered by the Department of Commerce antidumping investigation into panel imports from Southeast Asia.
The company recalibrated its project schedule earlier this year in response to growing supply chain constraints, shifting some 400-500 MW of solar projects from 2022 to 2023. Good told investors on Monday’s call that the company is still on track to meet this revised 2022 schedule, and is closely monitoring developments at the Department of Commerce to determine what may happen to projects scheduled for 2023 and beyond.
“As we look at 2023 there is some uncertainty this investigation has made with respect to price,” Good said. “We are planning on a range of outcomes. We have the potential to do better if clarity occurs soon enough so we can keep projects on track.”
Good said she doesn’t anticipate projects for their regulated utilities will be impacted by the investigation, but said about half their commercial solar projects could see changes depending on the price and availability of solar panels going forward.
Good emphasized the fact that commercial solar projects play a relatively minor role in the company’s overall business. Regardless of the investigation’s outcome, she said, she anticipates supply chains will begin to stabilize once more by 2024, in time for a significant ramp-up of renewables construction the company has planned for the second half of this decade.
Overall Duke Energy started the year off strong, thanks to increased electrical demand in its service area, Young said, although some of this growth was offset by increased expenditures associated with several severe winter storms. Multiple states in which the company operates, including Florida and the Carolinas, have experienced sizable in-migration and increased industrial growth due to a favorable business climate and the success of economic development efforts, Young said.
However, Young noted that the difference between slower demand associated with the beginning of the pandemic compared to current rates of electricity use made the company’s first-quarter growth appear larger than it actually is. Over the rest of the year, he said, Duke anticipates growth will slow to an annual rate of 1.5%.