Duke Energy Corp. (DUK) reported profits that have the potential to light up utilities exchange traded funds (ETFs).

Second-quarter profits rose 20% after the price in electricity has gone up, in the Southeast and Midwestern United States. Jim Polson for Bloomberg reports that net income climbed $351 million, or 28 cents per share, and total revenue up 8.9%. Duke’s utilities are up because of higher rates, as the company is building new power plants and reducing air pollution.

The United States has an aging power grid that could be brought into modern times by 2010, if a planned $17 billion is spent by power providers to do so.

Duke supplies power to about 4 million homes in the Carolinas, Indiana, Kentucky and Ohio. The average cost of electricity in those states ranges from as high as 7.53 cents per Kilowatthour (North Carolina) to 5.43 cents (Kentucky). In New York, the average price per killowatt hour is 15.27 cents, according to the Energy Information Administration.

Meanwhile, the Midwest seems to continue to feel pain from a rough storm season. At least 288,000 homes and businesses are affected in the two states, but according to Exelon Corp.’s Edison CommonWealth Unit, the number of customers who were in the dark has been as high as 427,000, reports Scott DeSavino for Reuters. It is estimated to take several days before the power is restored.

Related ETFs include:

  • Merrill Lynch Utilities HOLDRs (UTH): down 12.2% year-to-date; 19.5% Exelon
  • Utilities Select Sector SPDR (XLU): down 11.6% year-to-date; 5.2% Duke; 12.9% Exelon
  • iShares Dow Jones Utilities Sector Index Fund (IDU): down 11.8% year-to-date; 3.5% Duke; 9.4% Exelon

The opinions and forecasts expressed herein are solely those of Tom Lydon, and may not actually come to pass. Information on this site should not be used or construed as an offer to sell, a solicitation of an offer to buy, or a recommendation for any product.