You are confusing service territories (distribution) with power generation.
Duke, and every other regulated utility, has an obligation under law to provide electric service within that exclusive territory granted them by the state.
They are under absolutely no obligation to generate electricity, and in fact there are a great many electric utilities that have no generation facilities at all. Those pure distribution companies purchase all the power they sell from other generation companies which may or may not be regulated by the state.
The unregulated producers or Non-utility generators, are called IPPs, or Independent Power Producers, and they basically sell to the highest bidder, but they are under no obligation to sell to anyone. And unlike a regulated utility, they are not guranteed a certain rate of return as set by the regulators. They can make as much as they want or they can go totally bust if they don't run the operation correctly.
APS reports to our Corp Comm in AZ. The Corp Comm tells them how much they can charge us for electricity. If that is true, how could APS tell AZ to pound sand?