Though behind its spending schedule for the first half of the year, ITC Holdings (NYSE:ITC) expects to fulfill its $760m to $860m capital expenditure program for 2013.
“Mother Nature continues to present multiple challenges to our plans,” ITC CEO Joseph Welch said during the company’s 2Q13 earnings call on July 25.
A long and volatile winter created delays in capital development in 1Q13, which was followed by multiple severe weather events in 2Q13 that largely affected ITC Midwest, including a snow and ice storm in April, snow in early May and severe thunderstorms and flooding in late May and early June, Welch said. These contributed to outages and damage to ITC Midwest.
In spite of the delayed deployment of capital, the first six months of 2013 represent record capital investment for the company, Welch said. Actual capital investment as of June 30 was $455.4m, including $120.8m at ITC Transmission; $81.8m at Michigan Electric Transmission Company (METC); $178.8m at ITC Midwest and $74m at ITC Great Plains.
“Although we did gain some ground during the second quarter on a year-to-date basis, we still remain slightly behind budget with respect to our capital investments for the year, but are poised to catch up in the back half of the year and meet our overall annual expectations,” CFO Cameron Bready said.
ITC’s capital expenditure program for 2013 remains unchanged. The company has a $760m to $860m capital program, which includes investment of $200m to $230m at ITC Transmission; $160m to $180m at METC; $270m to $300m at ITC Midwest; and $130m to $150m at ITC Great Plains.
The long-term capital program does not include anticipated expenditures related to the transaction with Entergy (NYSE:ETR) nor in the subsidiaries of Mid South TransCo post-close, the company said.
According to the 10-Q, ITC did not increase its project costs for the Thumb Loop or Kansas V-Plan projects.
As of June 30, ITC had invested $256.8m of the total estimated project cost of $510m for the Michigan Thumb Loop project, and $109.4m of the total estimated cost of $300m for the Kansas V-Plan project.
The Thumb Loop project is a 140-mile, double-circuit 345-kV line in Michigan that connects the counties of Tuscola, Huron, Sanilac and St. Clair.
The company is in the process of completing work on the first segment, which will be placed into service before the end of the year, Bready said. Work continues on the second segment, which is on schedule to enter service in 2015.
The Kansas V-Plan, or Great Plains, project is a 122-mile, 345-kV transmission line in Kansas that originates in Spearville and terminates at the Thistle substation near Medicine Lodge.
ITC has ordered a majority of substation construction contracts, and continues to work on transmission line construction, Bready said. The line is scheduled to be complete in late 2014.
ITC reported 2Q13 net income of $47.4m, or 90 cents per share, compared to $42.4m, or 81 cents per share, for 2Q12.