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Last Christmas was not a particularly merry one for Duke Energy. The Charlotte, North Carolina-based company imposed rolling blackouts on its customers during a winter storm – leaving more than half a million of them without power on Christmas Eve. Even worse? Duke gave South Carolina regulators “zero warning” about its precarious grid situation, prompting a sharp rebuke from the S.C. Office of Regulatory Staff (SCORS).
In addition to the unexpected blackouts, the company controversially jacked rates on its poorest Palmetto State customers last September – part of an ongoing campaign to foist the consequences of poor executive decision-making onto ratepayers who can ill afford such added costs.
As I noted at the time, though, Duke’s short-term issues are nothing compared to the price tag associated with its catastrophic mismanagement of asset allocation.
“Duke has made terrible decisions regarding its energy mix – decisions which are already costing ratepayers billions of dollars,” I noted in a post last spring.
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After peaking at $115.35 a share last April, Duke has seen its value plummet. Last month, the stock was trading as low as $88.27 – a staggering 23.5 percent decline. It has since rebounded, but analysts remain unimpressed – especially given its escalating debt during a time of high-cost refinancing.
While the Wall Street consensus is for Duke to continue with “business as usual” heading into 2024, others see warning signs on the horizon. Last week, Seeking Alpha posted a negative outlook on Duke’s stock, specifically referencing “approaching high debt levels that may reduce its ability to finance dividends.”
“Few things threaten a regulated utility stock, and one of them is the mismanagement of debt,” the analysis noted. “High leverage presents a risk factor that the market is neglecting and will come into play in 2024.”
Blasting the company’s recent infrastructure investments as “cheaply financed growth,” Seeking Alpha slammed Duke for failing to achieve improvements in “asset efficiency” – concluded the stock was overvalued by as much as 17 percent based on future revenue projections.
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“Duke may have difficulties financing dividends and needs to resort to using debt,” the analysis noted. “However, the price of refinancing is not optimal and may get worse in the future.”
“The key takeaway is that the fixed costs to the bottom line will increase,” it concluded.
The one thing that could bail Duke out (aside from massive new rate hikes on consumers)? Crony capitalism.
Citing Duke’s plan to be carbon neutral by 2050, Seeking Alpha noted its “partnership” with the government – which could give the company “access to beneficial financing for capital projects.”
Bottom line? Duke’s only way out of its current mess is to continue passing the buck onto ratepayers and taxpayers …
In most “Republican” states, such fleecing would never be tolerated. Sadly, South Carolina leaders continue eagerly accommodating such crony capitalist enabling … no matter how much it costs their citizens.
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ABOUT THE AUTHOR …
Will Folks is the founding editor of the news outlet you are currently reading. Prior to founding FITSNews, he served as press secretary to the governor of South Carolina and before that he was a bass guitarist and dive bar bouncer. He lives in the Midlands region of the state with his wife and seven (soon to be eight) children.
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6 comments
If you look at the true historical definition of fascism – the kind espoused by Mussolini and his intellectual bromance partner Franklin D. Roosevelt [historical fact – look it up] – you will find that “crony capitalism” is essentially the fascist party plank for the tethering and controlled coordination of major industry, banking, and labor to the goals of the State via a garden variety menu of public funded subsidies. We need to go back to calling it by its original name…the Normies don’t get the real implications of these types of policies by merely calling it “crony capitalism.”
Trump is as close to Hitler as this country has ever seen. He recently praised Putin, XI and Kim Jung Un, saying; and I quote him, “They know how to run a society, and they see in Trump a strong leader in the same mold.” There is only one Fascist running for President and that is Donald Trump.
Not waving Trump’s flag here, but you have full-blown TDS. Trump close to Hitler? The guy who has a Jewish son-in-law, a converted Jewish daughter, and Jewish grandkids? That’s just for starters – his close ties to the Jewish community go back decades. He moved the US embassy from Tel Aviv to Jerusalem and facilitated the Abraham Accords to normalize relations between Saudi Arabia and Israel for God’s sake. You think Hitler would do any of that? Granted, I do think his praises of Putin and Jung are bizarre, but practically every president for the last 40 years has made some sort of similar statement about one dictator or another – Obama, Bush, Clinton and the first Bush all have their own version of this.
Did you not hear Trump’s latest speech where he vowed to “root out” his political opponents, who he said “live like vermin” as he warned supporters that America’s greatest threats come “from within”? The call is coming from inside the Trump campaign and it’s clear he’ll jail any and all of his political opponents if he happens to win the election this time around. He’s using dogwhistles to the White Nationalists in this country as well. As stupid as he is, he’s also exceedingly dangerous. This is not the America that our US Constitution lays out but a Putin-lite that Trump wants to become.
Meanwhile, I’ve got relatives in the Midlands who are getting power bills from Duke that have doubled and tripled in the last month, with Duke citing usage during “peak hours”. WTH? Will power become a utility that is unaffordable to the average SC resident? God knows the City/County Governments across the state have already realized they could triple the water bill to pad their take and now Duke is following with electricity bills. Not everyone in this state moved here from California or Florida or yes, Ohio, and has the money to pay those high prices. And the SC lawmakers have given Duke carte blanche to charge whatever they want.
Did Trump really refer to himself in the third person?
I believe that was a reference to his ego.