The Public Utilities Commission of Ohio voted against the rate proposal at a meeting today in Columbus. Duke, based in Charlotte, North Carolina, had asked to bill Ohio customers an additional $729 million through May 31, 2015, to help cover a shortfall between power-plant related costs and the wholesale price of electricity.
Duke began working with Citigroup Inc. (C) last year on a possible sale of its Midwest plants, which could fetch as much as $2 billion, according to people familiar with the matter. Chief Executive Officer Lynn Good said the company would wait for the regulatory ruling in Ohio before making a decision on a sale.
The plants Duke may sell comprise the bulk of its commercial power segment, which earned $27 million in the third quarter, down from $41 million in the second, according to data compiled by Bloomberg. Duke’s Midwest plants have a combined capacity of about 6,800 megawatts in Ohio, Pennsylvania and Illinois. More than half burn coal and the rest natural gas as well as oil.
Duke, American Electric Power Co. (AEP) and other utilities have struggled to maintain profitability from Midwestern plants that sell power on the wholesale market run by PJM Interconnection LLC that stretches from New Jersey to Illinois. PJM prices have fallen by more than half since 2008, due to lower industrial demand and a glut of cheap gas.
Duke attorneys will review the text of the order before the company will comment, Blair Schroeder, a company spokesman, said before today’s vote.
The utility supplies electricity to 7.2 million customers in North Carolina, South Carolina, Indiana, Ohio, Kentucky and Florida, according to its website.
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