Duke Energy reported Friday that sales to industrial customers have begun to stabilize, another signal that better economic conditions have led to growing power consumption.
While crucial sales to big industrial companies grew 11 percent from the previous quarter, electricity demand remains depressed.
"We have a long way to go to get back to where we were before," Jim Rogers, Duke's chairman and CEO, said in an interview.
Duke's report falls in line with predictions from the Energy Information Administration, which said that the drastic declines in electricity use earlier this year would at least begin to slow as 2009 comes to a close. Sales are expected to fall 3.3 percent overall this year, with demand especially weak among industrial customers.
The decline this year on top of 2008 would mark the first time since 1949 that the nation has seen electricity demand fall in consecutive years, a clear illustration of the economic damage caused by the recession.
Those falling demand numbers parallel layoffs and production cuts by manufacturers and other big power users.
An improving economy is expected to lead to a 1.3 percent growth in electricty demand in 2010.
Profits still dropped sharply from a year ago as Duke wrote down the value of some power generation operations in the Midwest due to lower power prices and demand.
The company, based in Charlotte, N.C., says it earned $109 million, or 8 cents a share, for the quarter ended Sept. 30. That's down from $215 million, or 17 cents a share, a year ago.
Discounting charges of $400 million, Duke said it would have made 40 cents a share compared with 33 cents per share in the year ago quarter.
Revenue fell to $3.4 billion in the quarter from $3.5 billion in the year ago quarter.
Demand for electricity is still way down, with automakers and steel companies riding out the recession.
Duke said demand from such companies compared with the same period last year fell 15 percent in the Carolinas and 14 percent in its Midwest operations in Ohio, Indiana and Kentucky.
In the second quarter, Duke's industrial sales in the Carolinas were off 18.5 percent and 20.9 percent in the Midwest.
Duke and other major power providers say, however, that conditions are no longer appear to be deteriorating. American Electric Power said Thursday that industrial demand was off 17 percent in the third quarter, an improvement from the 20 percent decline in the second quarter.
On top of the economic downturn, power sales also took a hit because of a cool summer, especially in the Midwest.
Duke has been able to offset some of the lost revenue by slashing expenses. Chief Financial Officer Lynn Good said the company is on track to cut operations and maintenance expenses by $150 million this year.
Duke shares lost 29 cents, or 1.8 percent, to close at $15.82 Friday. The shares have traded between $11.72 and $17.20 over the past year.
Duke is one of the largest electric power companies in the United States with about 4 million customers in the Carolinas, Ohio, Kentucky and Indiana. It also has about 500,000 gas customers in Ohio and Kentucky and generates electricity in Latin America.