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Duke Energy increases five-year capital expenditure plan to meet increased industrial and data center demand

Duke Energy raised its five-year plan for capital expenditures to $83 billion on Thursday, an increase of 13.7%. The utility is looking to improve its grid in order to capitalize on the increasing demand from data centres and increased electrification.

According to the U.S. Energy Information Administration, U.S. electricity demand will reach record levels in 2025 and 2026, due to demand from data centres dedicated to artificial intelligence, cryptocurrency and homes and businesses to heat and transport.

Duke plans to raise $6.5 billion in equity during its 2025-2029 capital plan, including $1billion this year. It plans to finance approximately 40% of its increase in capital plan through equity.

By 2029, the company expects to have nearly 5 GW of natural gas-powered power installed.

The capex plan for the company from 2024 to 2028 was $73 billion.

Duke's electric segments and its gas segments reported a 5% increase in income for the fourth quarter ending December 31. This is compared to the same period last year.

According to LSEG, despite interest costs, a high tax rate, and storm-related costs, the electricity provider reported a profit per share of $1.66 on an adjusted basis, which was in line with analyst estimates.

Duke, North and South Carolina's largest utility, was hit by Hurricanes Debby and Milton, which destroyed miles of transmission and power lines, leaving thousands of Duke customers without electricity.

Interest rates that are higher for longer can be a burden on utilities. This is because it increases the cost of investing in critical infrastructure, such as electrical grids.

The utility based in Charlotte, North Carolina, reported revenues of $7.36 billion. This was higher than the analysts' average estimate, which was $7.33 billion. This is largely because of higher residential sales, and higher rates.

Duke's 2025 forecast has earnings in the range of $6.17 to $6.42 a share. The midpoint is slightly lower than the estimate of $6.33 a share. Reporting by Seher dareen from Bengaluru, editing by Shash Kuber

(source: Reuters)