Duke Focuses on Power Growth Areas
Duke Energy, which is targeting its strategy in U.S. growth
markets, has zeroed in on the right side of the U.S. map, expecting
power generation there to surpass the rest of the country. The
natural gas giant expects Florida to grow at a rate of 4.5%
annually, the Southeast and Texas to grow at 3%; and the East Coast
and Upper Midwest to reach 2.5%.
Florida's growth will be the highest, more than doubling the
national average of 2%, said Sue Becht, vice president of investor
relations. Speaking to analysts in Houston last week at the Dain
Rauscher Wessels Energy Conference, she said that along with
Florida, higher-than-national growth is predicted in every area
that Duke wants to target for business expansion.
"We have kept an eye on where the growth markets are," said
Becht, and "refocused our attention. This is where we view the
markets." Duke has a stake in the major eastern pipelines,
Maritimes, Algonquin, East Tennessee, Texas Eastern and the newest,
To meet the increased power forecast, she said that Duke is
expanding its gas storage capabilities. The Moss Bluff, TX facility
will increase to 16 Bcf from its current 11.3. The Egan, LA
facility will move up to 16 Bcf from the current 11.4. And two new
facilities, now being developed, also will add to Duke's storage
capacity. The Tioga, PA facility will hold up to 15 Bcf, and the
Copiah, AL facility will hold up to 9 Bcf.
"We have acquired storage where we didn't have it before," she
Duke also is "powering up" its electric generation market,
already having completed 16 projects totaling 7,800 MW with a
potential gas burn of 1.6 Bcf/d. Duke also has 55 projects "under
negotiations" that when complete, will add 32,200 MW with a
potential gas burn of 6.4 Bcf/d. "Our ramp up has been tremendous,"
"There is no question that this country is short of power
generation today," she said. "Duke has done everything it could to
avoid building new power plants to avoid the stranded costs that go
with deregulation." But, she said, the growth demand is expected
across "all sectors of service," and 90% of the new capacity will
be gas-fueled combustion turbine.
Three project expansions are planned in California, and two in
Arizona, areas she said that are clearly short of power generation.
"It's very clear there are market answers to the problems in
California, and the state is short of power supply," she said.
"California is a terrific market, and we are going forward with our
expansions. It's very attractive to us, even with the ISO price cap
(maintained at $250 per MWh). At those rates, Duke could sell all
day long. We plan to be a player in California for a long time to
Carolyn Davis, Houston