PPL (NYSE:PPL) cited progress on major transmission and power plant capital projects as contributors to the mixed financial results the company experienced during the first three months of 2013.
During a quarterly earnings call with financial analysts, PPL said a refueling and maintenance outage is continuing at the Susquehanna 2 nuclear unit in Pennsylvania.
The company is installing new turbine blades to address an ongoing problem, and will conduct a similar outage this year at Susquehanna 1. The Unit 2 outage started in mid-April.
New turbine hoods are also being installed to improve air flow. The work should reduce blade vibration and address turbine blade issues that have affected the nuclear plant over the past two years, PPL officials said.
In other Eastern operations, April saw continued construction work on the 500-kV Susquehanna-Roseland line. The cost estimate for PPL’s share of the project has been revised to $630m, company officials said. Public Service Enterprise Group (NYSE:PEG) is the other major partner in the project.
Work on the line’s Lackawanna substation expansion also commenced during the first quarter, officials said.
Meanwhile in the West, commercial operation has been achieved on the upgraded Rainbow hydroelectric plant in Montana. The three-year overhaul should increase the power generation 70%, PPL said.
PPL CEO William Spence and his executive team declined to say whether they still considered certain Western U.S. holdings as “core” operations. As far as Eastern operations, PPL officials said it’s still probably too early for the company to start think about building new combined-cycle gas units in the PJM region.
PPL gets strong performance from its regulated sector
PPL has regulated operations in Kentucky, Pennsylvania and the United Kingdom and all those sections were in the black during the first quarter of 2013, PPL said. That’s due to greater earnings from ongoing operations, the company said.
PPL’s Kentucky regulated segment primarily consists of the regulated electricity and natural gas operations of Louisville Gas and Electric and Kentucky Utilities.
PPL’s Pennsylvania regulated segment consists of the regulated electricity delivery operations of PPL Electric Utilities.
Both U.S. regulated segments are doing a lot of capital expenditures now although that will level off in 2015, PPL officials said. The Kentucky economy is improving “slowly but surely,” officials said. In Pennsylvania residential use by customers has actually increased, the company said.
Companywide, PPL’s equity needs are being decreased by about $100m per year.
On the competitive generation front, total generation output (including owned and contracted power) improved by 12% in 1Q 2013 compared to 1Q 2012.
PPL announced 1Q 13 of $413m, or 65 cents per share, a decrease from $54m, or 93 cents per share, a year ago.