Duke still looking at V.C. Summer as it reshapes portfolio

Duke Energy (NYSE:DUK) is continuing discussions with South Carolina-owned Santee Cooper about buying a minority stake in two new nuclear units being built at the V.C. Summer station in Fairfield County, S.C.

Duke President and CEO Lynn Good told the Barclays Capital Conference Sept. 12 in New York that she is not prepared to place a timetable on when Duke will make a decision on the new nuclear investment.

SCANA (NYSE:SCG) is the majority partner in Summer Units 2 and 3. Santee Cooper (also known as the South Carolina Public Service Authority) is a 45% partner in the nuclear plant, but looking to reduce its ownership stake.

Even before the July 2012 culmination of its merger with Progress Energy, Duke had been studying taking a 10% stake in the new Summer units. The reactor units would generate roughly 1,100 MW each.

Good, who succeeded Jim Rogers as CEO July 1, alluded to the Summer discussions in her presentation. During questioning, Good said she could not yet reveal a timeline for a decision.

Like most power companies, Duke has a generating portfolio that makes increasing use of natural gas. Good said Duke has gone from roughly 55% coal power in 2005 to eventually 38% in 2015. Natural gas, meanwhile, is growing from 5% in 2005 to 24% in 2015.

Duke is also expected to build or contract for 3,000 MW of natural gas-fueled generation in Florida, Good said. Under a settlement involving Duke’s Progress Energy Florida, the company is retiring rather than repairing the 860-MW Crystal River 3 (CR3) nuclear plant.

With the CR3 retirement, and potential retirement of Crystal River coal units, Duke will add both natural gas peaking and combined-cycle generation in Florida, Good said.

In Indiana, Duke placed the 618-MW Edwardsport IGCC into operation in June and has obtained cost recovery for the modern coal gasification power plant, Good said.

Currently, Duke is also looking to obtain “strategic clarity” for 6,900 MW of merchant Midwest generation that serves the PJM market, Good said. In 2012, Duke Energy Ohio filed a request with the Public Utilities Commission of Ohio (PUCO) for approval to recover $729m of capacity costs. A decision is expected from PUCO by the end of 2013.

About Wayne Barber 4201 Articles
Wayne Barber, Chief Analyst for the GenerationHub, has been covering power generation, energy and natural resources issues at national publications for more than 20 years. Prior to joining PennWell he was editor of Generation Markets Week at SNL Financial for nine years. He has also worked as a business journalist at both McGraw-Hill and Financial Times Energy. Wayne also worked as a newspaper reporter for several years. During his career has visited nuclear reactors and coal mines as well as coal and natural gas power plants. Wayne can be reached at wayneb@pennwell.com.