Duke Energy Corp.’s DUK subsidiary, Duke Energy Carolinas, recently announced that its North Carolina (NC) customers will witness lower electric bills starting from Jan. 1, 2025. This move is part of an annual adjustment for the cost of fuel used to generate electricity at its power plants, which in turn has reduced electric rates for DUK’s NC customers.

The rate cut is approved by the North Carolina Utilities Commission (NCUC).

What Will DUK's Customers Achieve?

As a result of the rate reduction, monthly bills of DUK’s residential customers in NC, using 1,000 kilowatt-hours (kWh) per month, will decrease by $8.96 or 6.2% from $144.31 to $135.35. This new rate is 22% below the national average of $174.21, resulting in annual savings of approximately $466 per household.

Consequently, DUK’s commercial customers will benefit from an average bill reduction of 11.5%, while industrial customers will experience a smaller decrease of less than 1%.

How Will This Benefit DUK Stock?

Duke Energy is known for encouraging its customers to take advantage of its numerous flexible billing and energy savings programs, like free home assessments, budget billing and usage alerts, to help save energy and money. Evidently, in December 2024, NCUC approved a 4.5% reduction in rates for Duke Energy Progress’ residential customers in North Carolina. Earlier, in September 2024, the company’s subsidiary in Florida requested the Florida Public Service Commission (FPSC) to lower rates and decrease customer bills in January 2025. Duke Energy Florida had already reduced rates twice in 2024. The latest announcement reflects yet another example of DUK’s efforts to boost savings for its utility customers.

With consumers worldwide grappling with huge energy bills, such rate reduction policies adopted by DUK should attract more customers to choose it as their preferred utility provider, thereby bolstering its customer base. An increased customer base should boost Duke Energy’s revenue generation prospect.

What is DUK’s Peer Doing?

The U.S. utility sector remains focused on improving energy efficiency as it is going through the clean energy transition. To achieve this, utility providers like Duke Energy are playing a critical role in reducing electricity generation costs, as well as helping consumers reduce their energy usage and save more, through multiple strategies like installing smart meters and grid improvement as well as lowering their utility rates.
 
In line with this strategy, DUK apart, another utility that reduced its rate is mentioned below:

NextEra Energy NEE: In April 2024, NEE’s subsidiary, Florida Power & Light Company, received approval from FPSC to lower utility rates in May. The utility rates for a residential customer using 1,000 kWh of electricity were nearly $14 lower than that in March.

NEE’s long-term (three to five years) earnings growth rate is 8.1%. The Zacks Consensus Estimate for NEE’s 2025 sales indicates year-over-year growth of 13.1%.

DUK’s Stock Price Performance

Shares of DUK have gained 9.9% in the past six months compared with the industry’s 7.3% growth.

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Duke Energy’s Zacks Rank & Stocks to Consider

DUK currently carries a Zacks Rank #3 (Hold).

A couple of better-ranked stocks from the same industry are NiSource NI and CenterPoint Energy CNP, both carrying a Zacks Rank #2 (Buy) at present. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

NI’s long-term earnings growth rate is 7.5%. It delivered an average earnings surprise of 22.43% in the past four quarters.

CNP’s long-term earnings growth rate is 7.1%. It delivered an average earnings surprise of 0.76% in the past four quarters.

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NextEra Energy, Inc. (NEE) : Free Stock Analysis Report

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