Friday, August 17, 2007

Duke Energy Sees Wind Potential

Seeking Alpha, a financial analysis Web site, provides a transcript of a presentation by Keith Trent, Group Executive and Chief Strategy, Policy and Regulatory Officer of Duke Energy, one of America's leading utilities, before the Wall Street Analyst Forum August 16. Here are Mr. Trent's remarks on wind--interesting reading.


Let me talk specifically about wind now. Wind energy is very much part of our strategy. We believe that the growing U.S. wind market presents an attractive opportunity for us. That market is projected to grow from approximately 12 gigawatts to approximately 50 gigawatts by 2015, as it continues to receive significant support from Federal and State regulatory bodies.

Our wind strategy is straightforward. We plan to develop a standalone portfolio within one of our commercial businesses Duke Energy generation services acquiring a foothold in developing expertise there. As they execute our strategy, our focus will be on projects with favorable and steady cash flows.

We took a major step in this regard in executing this strategy in late May, when we acquired the wind development assets of Tierra Energy, which was a leading wind power development company located in Austin, Texas. Three of the development projects, which totaled approximately 240 megawatts are located in Texas and Wyoming and are anticipated to be on-line in late 2008 or early 2009.

We expect to spend approximately $400 million in CapEx through 2009 to complete these projects. The projects will be underpinned by long-term contracts and favorable tax benefits. As a result, we expect to begin seeing earnings from these wind assets in 2009.

Also included in the purchase is the option to develop approximately 1000 megawatts of additional wind projects that are in the various stages of development in the western and southwestern United States. We will continue to review additional late-stage projects as part of our strategy for this growing business.

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