00:00Duke beat on both profit and revenue with the company reaffirming its full year outlook.
00:05Joining me now is the chief financial officer of Duke Energy, Brian Savoy.
00:10Brian, thanks very much for your time.
00:12So I'm looking at EPS, 193 was the print, 187 was what we were expecting.
00:18So a decent beat and you keep the full year forecast unchanged.
00:23What gives you the confidence to do that in Q1 and why not raise?
00:29No, it's a great question and thanks for talking to Duke this morning.
00:33It's such an exciting day for us.
00:35I'm incredibly proud of Duke's performance in Q1, beating both in the top and the bottom line, executing on our
00:41strategic objectives.
00:42We're advancing generation across the system with a focus of speed to power on how we power a modern economy.
00:49And, you know, the point about the guidance for the year, it's early in the year.
00:54We want to see how the year plays out.
00:57Q3 is our largest quarter.
00:58So as the heat comes, so does the energy flow.
01:01And we want to definitely see Q3 before we would adjust guidance at this point.
01:07Electric utilities, adjusted income came in a little bit below consensus despite the headline beat.
01:13So is that mixed weather, fuel, financing costs, or is there something more structural going on in the regulated business?
01:23No, the regulated business had a couple of special charges related to merging the utilities and a settlement.
01:30So excluding that, which we clearly did, they're hitting on all cylinders.
01:35We're seeing growth from the critical infrastructure investments for our customers, and the adjusted earnings clearly reflects that.
01:43You're sitting, Brian, at the heart of this AI data center power boom, really, at the center of this cyclone.
01:52How much of that demand that you're seeing is actually signed, committed load versus inquiries?
01:59Because it strikes me that a lot of customers may want to just lock in as much as they can
02:03for fear of constraints in the future.
02:06It's such an important question because, you know, this time last year we were staring at a pipeline that was
02:13tens of gigawatts.
02:14And we still have a deep pipeline, but we don't talk about the pipeline.
02:17We talk about late-stage conversations that turn into firm contracts with customers.
02:22And we signed 7.6 gigawatts over the past year with customers under firm contracts with, say, 15-year commitments
02:30that there are minimum billing demands that ensure that those customers will pay their full share of hooking them onto
02:37the system and not have any spillover to existing customers.
02:41It's such an important distinction from just customers that might be shopping.
02:45You need to find the ones that are real, and we've got a focus of speed to power, and we're
02:49finding ways to get that done.
02:51We are looking at, you know, the biggest companies in the world continuing to try and lock in compute power.
02:59There's a story about Meta today looking to raise $13 billion for a data center in Texas.
03:05Alphabet raising even more debt to fund AI infrastructure.
03:09Is what the grid can do really the biggest constraint now on AI?
03:16You know, Matt, what we've learned is the customers want to get on the system and grow.
03:21So our speed to power focus has been able to bring customers on.
03:26We ask them for interruptibility of 50 hours a year.
03:29And this provides that flex point that we don't have to build that next peaking resource before we add them
03:35to the system.
03:36We will continue to build generation and add megawatts over time, but allows the customer to get on the system
03:42a year and a half to two years faster than if we had to build generation one for one.
03:48And this provision we introduced last year, and it's been now standard in all of our contracts.
03:54And what it's doing, you know, the gigawatt data center doesn't start at a gigawatt.
03:58It starts at 150, 200 megawatts, grows about that much each year, and we're growing with it as we add
04:04generation to the system.
04:05I see, you know, the bullish side of the AI story and the power story where they connect is obviously
04:13increased productivity for the economy, but also tax revenue for local economies.
04:19Really important in building up this power.
04:22You know, the bearish argument is grid stress, higher prices, water usage.
04:28How do you see that weighing out?
04:30Because you're caught as well in kind of the political center as well.
04:33Oh, absolutely.
04:35And, you know, we've been building critical infrastructure in the communities we serve for over a century.
04:40And we are working with our customers, now these large data center customers, on how they can work and build
04:47with the community, not in the community.
04:49And when you're working with the community, you address those issues head on, and you find out what the community
04:56is concerned about, and you address those problems along the way.
04:58And it's paying huge dividends, as we've seen dirt turning at over 5 gigawatts of data centers that we've announced
05:05are in construction today.
05:07And that is a really good sign that they're moving through those challenges and opportunities with the communities and ensuring
05:15the community is not getting left behind.
05:16And that is a really good sign.
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