Duke bows out of European power trading

"The past year has seen an unprecedented change in the energy sector. The industry in North America and elsewhere in the world is under considerable pressure, and Duke Energy is not immune to the impacts,” the spokeswoman continued. “This development ... will enable us to focus on optimising our existing portfolio in an effort to reduce costs and position us to take advantage of growth opportunities when they arise.”

Last week Standard & Poor's (S&P) revised its rating outlook for Duke, and its subsidiaries, to negative from stable.

"This [rating outlook] action reflects the continuous negative developments facing the company in both its regulated and unregulated operations," said S&P credit analyst Cheryl Richer. "Of particular concern is a weaker than anticipated economic environment in its service territory which is likely to lessen the cashflow contribution from the regulated electric business and potentially further dampen cashflow from merchant generation.”

S&P last downgraded Duke, to 'A' from 'A+', in August 2002, and last week warned that the company, which had $22.9 billion in consolidated debt outstanding as of September 30, 2002, must reduce debt to counter erosion in revenues to maintain its financial cushion and ratings. S&P added that it will review Duke’s progress on its divestiture strategy as well as updated financial projections to determine the likelihood and timing of financial improvement.