Duke Energy posted a solid first quarter, beating its financial performance for the same three-month period a year ago, as the company incrementally recovers from the recession.
But Duke CEO Jim Rogers said this morning on CNBC's "Squawk Box" program that it will take years for the electric utility to overcome the lingering aftereffects of the nation's most severe recession in eight decades.
Charlotte-based Duke, with utility operations in five states, reported an 8 percent increase in per share earnings to 39 cents, and a 15 percent boost in profit to $513 million, on operating revenue of $3.7 billion, a 2 percent increase.
At the same time, Rogers noted that residential sales were down over the past year while overall sales were flat. And he said the power company won't get back to its 2007 sales volume until the 2014-2015 time frame.
Nationwide, electric utility sales are down about 4 percent as a result of the recession. Regulated power companies like Duke have a captive customer base and are inured against economic volatility, but those customers have cut back on energy use as the economy has slowed.
Energy experts expected industrial customers to lower output and shut down operations. But the cutback among residential customers, the first such trend measured since World War II, took the electric industry by surprise. Some of the household energy reductions may be due to conservation programs and improved efficiency standards, but the phenomenon is largely pegged to the economic downturn.
Operating revenue was up nearly 2 percent in the first quarter, largely driven by the company's international energy operations. Household electricity sales fell this year compared to the first quarter 2010, one of the coldest on record. On a weather-normalized basis -- the standard way power companies analyze customer spending on electricity -- residential use was flat.
Industrial sales have been recovering throughout 2010 and into this year.
Duke officials will discuss first quarter earnings with analysts and investors at 11 this morning.
Duke is in the midst of a corporate merger with Raleigh-based Progress Energy. The union is expected to be finanlized at the end of the year and would create the nation's largest electric utility with 7.1 million customers. The company will retain its Duke name and its headquarters in Charlotte, but it will be headed by Bill Johnson, currently CEO at Progress.
In his "Squawk Box" appearance, Rogers also noted that Duke remains committed to expanding its nuclear power plants, despite the accident in Japan that has caused radioactive leaks at several reactors and spent-fuel pools.
He said the nation depends on nuclear power for 20 percent of its electricity, and nuclear power is "one of the cleanest fuels" currently available.
However, Rogers said the Japanese disaster will further delay nuclear development in the United States. One of the issues federal regulators will examine is the amount of nuclear waste stored in spent fuel pools.
This country has not commissioned a new nuclear plant in about three decades, a consequence of the Three Mile Island accident in 1979 that resulted in a partial nuclear meltdown and soured public confidence in atomic energy.