CHRIS KAHNNEW YORK (AP) â¿¿ Duke Energy Corp.'s third-quarter net income tumbled 30 percent, the company said Thursday. Energy consumption in the areas the utility serves fell while costs rose unexpectedly for a new plant in Indiana. This summer was not as steamy as last year, so consumers used their air conditioners less, the company said. Excluding the effects of the weather, however, Duke said demand appears to be growing among some of its commercial and industrial customers. "It's coming back, but slowly," Chairman and CEO Jim Rogers said. The Charlotte, N.C., power company posted net income of $472 million, or 35 cents per share, for the three months ended Sept. 30. That compares with $670 million, or 51 cents per share, for the same part of 2010. Revenue was flat at $3.96 billion. Excluding special costs including overruns for its coal gasification plant in Indiana, Duke's adjusted earnings were 50 cents per share. The per share earnings beat Wall Street profit expectations, but revenue fell short. Analysts, who typically exclude special items, expected a profit of 47 cents per share on revenue of $4.11 billion, according to FactSet. Shares rose 40 cents, or 2 percent, to $20.82 in afternoon trading. Consumers have been using less electricity since the recession as businesses closed, factories slowed down and construction companies stopped building new homes. Demand is growing again, but growth will be limited by the economy. Rogers said in an interview that he doesn't think the economy is going to expand much more this year. "It's hard to envision how unemployment levels drop over the next year or so," Rogers said Thursday in an interview. The U.S. unemployment rates stands at 9.1 percent. Duke did lift its adjusted profit expectations for 2011, however, to a range of between $1.40 to $1.45 per share from a range of $1.35 and $1.40 per share.
Duke said commercial and industrial customers seem to be using a little more power when changes in the weather are factored out. Auto and textile makers appear to be doing better, but construction companies and other businesses that rely on the real estate industry have been weak. Home owners also seem to be more focused on conserving energy.The cost of building the Edwardsport coal gasification plant in Indiana continued to rise above estimates, however. Duke said its current cost estimate for the project is $2.98 billion, about $1 billion above the original 2007 estimate. And it's above a $2.72 billion cap on costs that Duke proposed. Duke wants to pass the extra costs on to customers and Rogers appeared before Indiana regulators last week to make the company's case. He acknowledged the project was expensive, but said it will be the "cleanest plant in Indiana." A group of large industrial customers wants Duke to be held responsible for the extra costs. The hearings have continued into this week. Duke took a $220 million impairment charge in the third quarter to account for the higher costs. Duke, which already serves 4 million electric and gas customers in the Carolinas, Kentucky, Indiana and Ohio, will become the largest U.S. utility if it closes on a deal to buy Progress Energy Inc., based in Raleigh, N.C. The deal is expected to close by the end of the year, although state and federal regulators have yet to approve it. Progress has more than 3 million retail electric customers and operates in the Carolinas and Florida.