SCANA (NYSE:SCG) officials expect to meet this quarter with representatives of the vendor team building two new nuclear units at the V.C. Summer station in Fairfield County, S.C., and expect to determine a more certain completion date for the project.
Officials with the parent company of utility South Carolina Electric & Gas said July 31 they expect to have a better handle on the commercial operation date after meeting with the vendors led by Chicago Bridge & Iron (NYSE:CBI).
SCANA officials made the remarks in response to questions from financial analysts during the company’s second quarter conference call. The latest comments were consistent with what SCANA said during its last earnings call in April.
“It is a dynamic situation,” said SCE&G COO Steve Bryne.
SCANA had previously planned for the Summer Unit 2 to go into service in March 2017. The schedule was subsequently revised to show that Unit 2 would go online in either 4Q17 or 1Q18.
Like Southern (NYSE:SO) executives earlier in the week, SCANA officials said they were not worried about CBI when asked about the vendor’s falling stock price. SCANA executives, like Southern, said CBI has been doing excellent work developing the new nuclear project. (CBI also leads the vendor team building the Vogtle Units 3 and 4 in Georgia).
The Sanmen nuclear plants in China, which like V.C. Summer Units 2 and 3, uses the Westinghouse AP 1000 reactor design, is about two years closer to commercial operation, SCANA officials said.
The SCANA earnings material featured recent photos of both Sanmen and the new Summer units.
Working is in progress on the Unit 2 nuclear Island at the Summer plant, the company said. The containment vessel bottom head, the containment vessel ring 1 and the module CA-20 have also been put in place recent, SCANA officials told analysts. Work is also advancing on Unit 3. Module CR-10 is complete and the containment vessel bottom head has been put in place at Unit 3.
SCANA wants to eliminate base rate increases during peak nuclear construction period, and the company is trying to do this by controlling operation and maintenance costs, said SCANA CFO Jimmy Addison.
SCANA capital expenditures for the nuclear project are expected to peak in 2015 and will then taper off through 2018. SCANA capex spending for new nuclear in 2014 is estimated to be $805m.
SCANA is the majority partner in the two new 1,100-MW nuclear units under construction. Santee Cooper is the minority partner.
In January SCANA agreed to increase its ownership stake in the units from 55% to 60%. But SCANA will buy the additional 5% in increments and the first additional 1% won’t be added until the units enter operation. As a result, SCANA financial material still reflects 55% ownership for now.
The company announced earnings for the second quarter of 2014 of $96m, or basic earnings per share of 68 cents, compared to $85m, or basic earnings per share of 60 cents, for the second quarter of 2013.
For the first six months of 2014, SCANA reported earnings of $289m, or basic earnings per share of $2.05, compared to $237m, or basic earnings per share of $1.73, for the same period in 2013.
“Second quarter results improved principally due to weather related electric sales,” Addison said. “Year to date, earnings increases were due to weather, a rate increase under the Base Load Review Act, and continued customer growth,” Addison said.
“We continue to see new business growth and expansion of existing businesses,” Addison said. SCE&G area unemployment in South Carolina is below 5%.