Duke's Jim Rogers: Deregulated Markets Getting Ready to Go Into "Death Spiral", Duke Retail Sees Higher Margins

Deregulated markets are set to enter a "death spiral," Duke Energy CEO Jim Rogers said during an annual shareholders meeting.

Answering a question regarding deregulation from a shareholder, Rogers said:

"You know we operate in six states. One of the states is deregulated generation, so we've had an experience with deregulated generation. And what we're finding in the deregulated markets, the returns are really low, and they're not modernizing their fleet, and they're getting ready to kind of go into a death spiral."

"[I]n North Carolina and South Carolina and Florida and Indiana and Kentucky ... basically we are vertically integrated regulated [there], and there you see more modernization," Rogers said.

Duke also reported that during the first quarter of 2013, Duke Energy Retail saw favorable margins versus the year-ago quarter, leading to an incremental gain of about $7 million versus the year-ago results.

This partially offset negative drivers at Duke's Commercial Power unit, including lower capacity revenues, which led to a decrease in Commercial Power adjusted earnings to $6 million for the first quarter of 2013, versus $30 million a year ago.