Duke Energy CEO says California's energy outlook 'not good'

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03 EDT Thursday

Duke Energy CEO says California's energy outlook 'not good'

California's energy crisis and the poor outlook for solving the problem in the months ahead was a hot topic at Duke Energy's annual meeting in Charlotte Thursday.

"The outlook for the months ahead is not good," said Duke Chairman and CEO Richard Priory. "We expect California to struggle this summer with the painful dilemma of inadequate supply."

California must raise retail prices of electricity to cool demand, Mr. Priory told reporters following the shareholder meeting of the Charlotte-based company that is a major out-of-state supplier of electricity to California.

"They obviously need new supplies," Mr. Priory said. He noted that one of the company's plants in Oakland, designed to run just briefly during peak periods, has produced more electricity so far this year than in all of its 22-year history combined.

"It gives you a sense of the shortage," he said.

Duke Energy is not likely to make additional investments in California in the near future, Mr. Priory said.

"Any further investment would be subject to very careful scrutiny by our board at this stage of the game," he said.

"The standards would have to be very high in terms of what we could achieve to invest further dollars in California because of so many uncertainties," he said. In response to a reporter's question, Mr. Priory said he wasn't making any veiled threats.

"It's only an indication of the rigor we have to go through with the board of directors to make a decision when our board is reading what they're reading in the newspapers.

"It's no different than Equador or Peru and we had that kind of turmoil in the marketplace," he added.

The company, whose shares generated a total return of more than 75 percent last year and hit an all-time high this week, continues to support deregulation.

"We continue to strongly support open, competitive electric markets--in the Carolinas and elsewhere--that send proper pricing signals and deliver new levels of value and performance to customers. But it has to be done right," Mr. Priory told shareholders.


-- Martin Thompson (mthom1927@aol.com), April 27, 2001

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