Utility Business Notes: Duke Executives Quantify Data Center Capex Upside
Duke Energy Corp. executives recently told investors the company’s pipeline of data center projects could add up to $10 billion to their spending plans through 2030.
Charlotte-based Duke has about 15.4 gigawatts worth of data centers in what President and CEO Harry Sideris and his team are labeling their “high-confidence, late-stage pipeline.” Should opportunities materialize as expected, Duke’s leaders expect they’ll spend between $5 billion and $10 billion beyond the $103 billion contemplated in the company’s 2026-2030 capital plan. CFO Brian Savoy on Aug. 4 told analysts and investors that much of that additional spending will take place in Indiana and Florida.
“This is a very dynamic environment that we have,” Sideris said on a conference call discussing Duke’s Q2 results. “We feel very good about our 15 gigawatts pipeline. They’re advancing but these negotiations are taking a little longer at times because they’re very complicated transactions. […] We feel very confident we'll be able to land more of those. We’re looking at landing all of that 15 gigawatts by the first half of next year.”
Duke teams have signed service agreements with hyperscalers and other customers that cover about 7.8 gigawatts of the 15.4 gigawatts. That’s an increase of roughly 200 megawatts since the end of March.
Sempra and Oncor CEOs Talk Data Centers, Overall Growth Pipeline
Also talking recently about data centers and the potential to beef up capex plans because of them was Jeff Martin, chairman, president and CEO of Sempra. Martin and his team have been increasingly shifting investment dollars to Texas, where Sempra owns 80% of Oncor, among other assets, and he was asked for his take on the recent development pause and project review ordered by Gov. Greg Abbott.
Martin’s response was essentially, “Good,” although he delivered it with a bit more corporate, earnings-call phrasing.
“Our long-term view at Oncor has improved over the last quarter. We continue to think there’s a great opportunity here for our base capital plan to move forward as well as upside capital,” Martin told analysts on Aug. 6. “Public policy and a lot of the recent discussions have been focused on protecting Texas families from the new costs associated with expanding the grid to meet new load customers, as you indicated, data centers. And I think in this area, the governor and the PUC both have shown a lot of leadership and I think that’s important. […] I think broader stakeholder involvement in the process sets the foundation for a more durable framework.”
Data centers are an important element of Oncor’s growth story as they are for many other utilities around the country these days. But the broader picture in Texas is, unsurprisingly, producing some massive numbers for the company: CEO Allen Nye said his team’s overall queue of projects in the pipeline grew 5% during the second quarter to whopping 298 gigawatts on June 30.
Algonquin Commits to HQ Move Out of Canada
Algonquin Power & Utilities Corp. plans to relocate its home office to Chicago from Oakville, west of Toronto, a move CEO Rod West said recently will better reflect the fact that more than 80% of the company’s operations are in the United States while less than 5% are in Canada.
West and his team have been chewing on a possible headquarters move for several quarters and he told analysts and investors on Aug. 7 that a relocation will help Algonquin move on from some cross-border tax inefficiencies and, over time, let it access growth capital at better terms.
“At a high level, we see this as an important strategic step for the company and one that we expect will create meaningful benefits for shareholders over time,” West said.
Moving Algonquin’s home base still needs the approval of the company’s shareholders next spring and to clear some legal hurdles.
About the Author
Geert De Lombaerde
Senior Editor
A native of Belgium, Geert De Lombaerde has more than two decades of business journalism experience and writes about markets and economic trends for Endeavor Business Media publications T&D World, Healthcare Innovation, IndustryWeek, FleetOwner and Oil & Gas Journal. With a degree in journalism from the University of Missouri, he began his reporting career at the Business Courier in Cincinnati and later was managing editor and editor of the Nashville Business Journal. Most recently, he oversaw the online and print products of the Nashville Post and reported primarily on Middle Tennessee’s finance sector as well as many of its publicly traded companies.