Duke Energy Corp plans to sell its merchant energy business, Duke Energy North America (DENA), by getting rid of all its assets outside its core Midwestern United States region. The sale should see around 6,300 MW of capacity change hands over the next year, mostly in the west and northeast.
Duke plans to combine Midwestern assets of about 3,600 MW with Cinergy's assets after the two companies complete their merger, expected in the first half of 2006.
Announcing the move the company said it would take a non-cash charge of $1.3 billion related to the plan and is revising its earnings target for the year.
“In recent years, we have devoted significant management attention to returning DENA to profitability and to developing a sustainable model for this business,” said Paul M. Anderson, chairman of the board and chief executive officer, “But ultimately, we’ve determined that achieving our objective of break-even for DENA by the end of 2006 is not realistic without taking on an extraordinary amount of additional risk. Exiting DENA’s business outside the Midwest provides us with a fresh start,” Anderson continued. “The merger with Cinergy is expected to close in the first half of 2006.
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