Must-know: Duke Energy’s operating segments

Matt Phillips - Author

Nov. 20 2020, Updated 1:06 p.m. ET

Business segments

Duke Energy (DUK) operates in three business segments—Regulated Utilities, Commercial Power, and International Energy.

Regulated Utilities

Regulated utilities are responsible for most of Duke Energy’s retail sales. It’s the core strength of the company. The segment accounts for 86% of the revenues. The revenues run through various wholly-owned subsidiaries. The subsidiaries are in six states in the U.S. In order to meet the electricity needs of its 7.2 million customers, the company uses a diverse mix of fuel sources. The fuel sources include nuclear, coal-fired, oil-fired, natural gas-fired, and hydroelectric power plants. These plants have a combined generation capacity of 49,600 megawatts (or MW).

Commercial Power

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Commercial Power owns, operates, and manages power plants. The segment engages in the wholesale marketing and procurement of electric power, It also deals with the fuel and emission allowances related to these plants as well as other contractual positions. Commercial Power’s generating operations—excluding renewable energy generation assets—mainly consists of coal-fired and gas-fired non-regulated generation assets. The assets are dispatched into wholesale markets. This segment generates only 2% of Duke’s revenue.

International Energy

International Energy contributes 12% of Duke Energy’s revenues. The segment operates ~4,900 MW of generation facilities. International Energy mainly targets power generation in Latin America. The segment also owns a 25% interest in National Methanol Company (or NMC). It’s located in Saudi Arabia.

Some of Duke’s top competitors include Dominion Resources (D), Southern Company (SO), and NextEra Energy (NEE). All of these companies are part of the Utilities Select Sector SPDR (XLU).

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