Duke Energy, which is targeting its strategy in U.S. growthmarkets, has zeroed in on the right side of the U.S. map, expectingpower generation there to surpass the rest of the country. Thenatural gas giant expects Florida to grow at a rate of 4.5%annually, the Southeast and Texas to grow at 3%; and the East Coastand Upper Midwest to reach 2.5%.

Florida’s growth will be the highest, more than doubling thenational average of 2%, said Sue Becht, vice president of investorrelations. Speaking to analysts yesterday in Houston at the DainRauscher Wessels energy conference, she said that along withFlorida, higher-than-national growth is predicted in every areathat Duke wants to target for business expansion.

“We have kept an eye on where the growth markets are,” saidBecht, and “refocused our attention. This is where we view themarkets.” Duke has a stake in the major eastern pipelines,Maritimes, Algonquin, East Tennessee, Texas Eastern and the newest,Florida’s Buccaneer.

To meet the increased power forecast she said that Duke isexpanding its gas storage capabilities. The Moss Bluff, TX facilitywill increase to 16 Bcf from its current 11.3. The Egan, LAfacility will move up to 16 Bcf from the current 11.4. And two newfacilities, now being developed, also will add to Duke’s storagecapacity. The Tioga, PA facility will hold up to 15 Bcf, and theCopiah, AL facility will hold up to 9 Bcf.

“We have acquired storage where we didn’t have it before,” shesaid.

Duke also is “powering up” its electric generation market,already having completed 16 projects totaling 7,800 MW with apotential gas burn of 1.6 Bcf/d. Duke also has 55 projects “undernegotiations” that when complete, will add 32,200 MW with apotential gas burn of 6.4 Bcf/d. “Our ramp up has been tremendous,”said Becht.

“There is no question that this country is short of powergeneration today,” she said. “Duke has done everything it could toavoid building new power plants to avoid the stranded costs that gowith deregulation.” But, she said, the growth demand is expectedacross “all sectors of service,” and 90% of the new capacity willbe gas-fueled combustion turbine.

Three project expansions are planned in California, and two inArizona, areas she said that are clearly short of power generation.

“It’s very clear there are market answers to the problems inCalifornia, and the state is short of power supply,” she said.”California is a terrific market, and we are going forward with ourexpansions. It’s very attractive to us, even with the ISO price cap(maintained at $250 per MWh). At those rates, Duke could sell allday long. We plan to be a player in California for a long time tocome.”

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