With affordability concerns, would Duke consider a Genco-type structure for large loads to bypass CPCN and visibly flow savings to customers?

Affordability is a top priority. While they've looked at Genco in the past and didn't feel it was needed, they may revisit it in the future as large loads are signed to provide financing and customer protection. “On the Genco side, we are looking at that. We have looked at that in detail in the past and didn't feel like we were needing that to accomplish what we're doing. But as these large loads are signed, that may be something that we're going to revisit in the future.”

How much of the $5B-$10B additional capital for large loads in Florida and Indiana is eligible for the current 5-year plan vs. later into the mid-2030s?

The $5B-$10B bracketed upside is contemplated *within* the current 5-year plan, incremental to existing capital. It will be triggered upon ESA signing and requisite generation/transmission modeling. “When we bracketed the $5 billion to $10 billion, we contemplated this is within the current 5-year plan. So think about this as the 4 years left in the 5-year plan that we're executing today as capital upsides.”

Given 5 GW of gen projects under construction, are there any bottlenecks or issues in the gas generation build-out, and what should be prepared for?

Building is a core competency for Duke. They've planned for this cycle with programmatic EPC contracts, standardized materials for synergies, and AI tools for monitoring. They feel confident in their ability to execute on time and budget. “Building things has always been in Duke's DNA, and we're really good at it... We've put in programs, programmatic ways of doing this with EPC contracts where we're using 1 EPC vendor in the Carolinas to be able to move the resources from site to site.”

DUK

Duke Energy (DUK) Q2 FY26 earnings call: guidance and Q&A

Earnings call· Jun 2026 (Q2 FY26)· Utilities· Aug 4, 2026

Source: earnings call transcript

Executive summary

Duke Energy Q2 FY26 — Strong EPS, Large Load Growth, and Regulatory Progress

Duke Energy delivered strong Q2 FY26 results, driven by customer growth and infrastructure investments, with adjusted EPS reaching $1.43. The company is making significant progress in securing large load electric service agreements, with 7.8 GW already contracted and a 15.4 GW pipeline expected to convert by H1 2027, potentially adding $5B-$10B to the 5-year capital plan. Regulatory settlements in North Carolina and ongoing efforts to manage costs and ensure customer affordability underpin the company's strategy, though new nuclear development remains contingent on securing financial risk protections.

Highlights

Reported EPS of $1.38 and Adjusted EPS of $1.43, up from $1.25 in prior year.
Secured 7.8 GW of electric service agreements (ESAs) with data center customers.
Reached a comprehensive settlement in the North Carolina DEC rate case, including a 9.8% ROE and 53% equity capital structure.
Increased quarterly dividend payment by 2%, marking over 20 years of consecutive annual increases.
On track to achieve FFO to debt target of 14.5% for the year, with a longer-term target of 15%.

Concerns

Negotiations for large load ESAs are taking longer due to complexity.
Affordability concerns in Indiana, with ongoing hearings and focus on customer protection.
New nuclear projects require additional financial protections to offset construction and supply chain risks, delaying decision-making.

Guidance & targets

Category	Target	Timeline	Confidence
Full-year 2026 Adjusted EPS	$6.55 to $6.80 high materiality	FY26	High
Long-term EPS growth rate	5% to 7% EPS growth high materiality	Through 2030 · FY30	High
EPS guidance range expectation	earn in the top half of the range high materiality	Beginning in 2028 · FY28	High
FFO to debt target	14.5% medium materiality	For the year · FY26	High
Longer-term FFO to debt target	15% medium materiality	Longer term	High
Large load pipeline conversion	remainder of the 15.4 gigawatt pipeline to be converted to ESAs high materiality	By the first half of 2027 · FY27	High
Capital plan upside from large loads	$5 billion to $10 billion of upside high materiality	Current 5-year plan	Medium
New capacity additions	15 gigawatts of capacity high materiality	By 2031 · FY31	High

Segment performance

Segment	Revenue	YoY	QoQ	Margin
Electric Utilities and Infrastructure EPS contribution, partially offset by higher depreciation expense and higher interest expense. Driven by continued customer growthInfrastructure investments to reliably serve our growing jurisdictions	—	—	—	up $0.15
Gas Utilities and Infrastructure EPS contribution, consistent with expectations in the shoulder quarter.	—	—	—	largely flat year-over-year
Other segment EPS contribution. Primarily due to the expected benefit of lower interest expense resulting from the Tennessee and Florida transaction proceedsReduced holding company financing needsHigher market returns	—	—	—	up $0.03

Orderbook & backlog

Contracted large-load capacity (ESAs) 7.8 gigawatts Q2 FY26

secured with data center customers

Large-load pipeline 15.4 gigawatts Q2 FY26

remainder expected to be converted to ESAs by the first half of 2027

Deals & partnerships

North Carolina Public staff and other interveners Comprehensive settlement for DEC rate case

Agreement demonstrates commitment to cost-effectively serve customers while supporting investments for reliability and generation fleet modernization.

Intervenors Discussions to reach a substantially similar settlement framework for the DEP rate case

Hearing scheduled for August 11. If approved, revised customer rates expected to remain below national average.

GE Renova Agreement for gas turbines

Increased number of gas turbines available to 26 to align with next phase of build in IRPs. First turbine delivered to Person County combined cycle site in July, second later this year.

Capital programs

Regulated Capital Plan underway

Period spend: more than $1 billion per month

Executing on the industry's largest regulated capital plan.

5-year Capital Plan Upside (large load driven) announced $5 billion to $10 billion

Benefit:additional generation and transmission needs

Potential incremental capital investment within the current 5-year plan, particularly in Indiana and Florida, contingent on large load contract signings.

Risks & headwinds

Large Load Negotiation Complexity Current

very complicated transactions

Mitigation:continue to work through that; focused on executing getting those large loads signed to ERAs

New Nuclear Financial and Construction Risk Long-term

first-of-a-kind in supply chain risks

Mitigation:additional financial protections are needed before we would propose a new nuclear project; working with government officials, state officials, hyperscalers and other stakeholders to see what can be done to offset the risk

Affordability Concerns (Indiana) Current

a lot of rhetoric in the state around affordability

Mitigation:share the commission as well as the governor's focus on affordability; collaborate with the commission and other intervening parties as we go through the affordability report

Tax Credit Flowback Shift Late 2020s to early 2030s

earning the tax credits kind of late in the '20s. So 2028, 2029, we about hit parity on the nuclear PTCs

Mitigation:the earnings power on the investments we're making will more than offset that. So the cash generation continues to grow, and it's durable well into the late 30s.

What to watch in Q3 FY26

Large Load ESA Conversion

H1 2027

Current 7.8 GW secured, 15.4 GW pipeline remaining

Target Remainder of 15.4 GW pipeline converted to ESAs

Why it matters

Conversion of the large load pipeline is critical for realizing the $5B-$10B capital plan upside and supporting long-term EPS growth.

We're looking at landing all of that 15 gigawatts by the first half of next year, and we're on track to do that.

Find out whether DUK delivers this. Inve re-checks your case every morning.

Q&A highlights

Given the additional CapEx potential ($5B-$10B) and 15 GW in late-stage large load, will Duke consider raising its 5-7% EPS CAGR or providing an out-of-cycle update like peers?

Management has high confidence in the 5-7% EPS CAGR, especially the top half starting in 2028. They acknowledge the dynamic environment and complex negotiations for large loads. They typically update guidance in Q4 but would do so sooner if material changes occur, emphasizing current focus on executing and signing ESAs.

“We'll continue to evaluate where we need to be on our earnings per share growth rate, and we typically update that in the fourth quarter. But if anything changes materially, like we did last year, we'll update you on that as we see fit.”

asked by Shahriar Pourreza · answered by Harry Sideris

2 min read 5 chapters

Detailed narrative

Regulatory Progress and Affordability Focus

Duke Energy reached a comprehensive settlement in its North Carolina DEC rate case, securing a 9.8% ROE and 53% equity capital structure, with an earnings sharing mechanism up to 10.3%. Discussions are ongoing for the DEP rate case, with orders expected by mid-November.

The company emphasizes affordability, pursuing strategies like accelerated tax credit flowback for a Florida battery project and applying for DOE loans to reduce interest costs, aiming to keep customer rates below the national average.

Large Load Strategy and Customer Protection

The company has secured 7.8 GW of electric service agreements (ESAs) with data center customers, with a total pipeline of 15.4 GW expected to convert by H1 2027. The "Customer Protection Plus" commitment ensures large users cover their service costs, delivering billions in benefits for existing customers.

This growth is expected to drive $5B-$10B of upside to the current 5-year capital plan, primarily in Indiana and Florida, to support additional generation and transmission.

Generation Build-Out and Execution

Duke Energy is on track to add 15 GW of capacity by 2031, reflecting additions from its latest 10-year site plan in Florida. This includes 5 GW of gas generation under construction and an additional 2.5 GW in development. The company leverages programmatic EPC contracts and standardized materials to ensure efficient execution, with AI tools monitoring construction progress to meet deadlines and budgets.

Nuclear Fleet Optimization and New Nuclear Evaluation

As the operator of the largest regulated nuclear fleet in the U.S., Duke Energy is maximizing existing assets through 300 MW of uprates and license extensions to 80 years for two plants, with a third SLR application planned by year-end.

While evaluating new nuclear options, the company will not proceed without additional financial protections to mitigate first-of-a-kind and supply chain risks, ensuring investor and customer protection during construction.

Financial Performance and Capital Allocation

The company reported strong Q2 FY26 adjusted EPS of $1.43, driven by customer growth and infrastructure investments. It is on track to achieve a 14.5% FFO to debt target for the year, with a long-term goal of 15%. Duke Energy proactively manages equity funding through its ATM program, having priced $600M year-to-date, and increased its quarterly dividend by 2%, marking over two decades of consecutive annual increases.

Summary of the company's earnings call; see how call summaries are prepared. Not investment advice.