SCANA recaps earnings, latest news on V.C. Summer progress

SCANA (NYSE:SCG) officials are preparing their case before the Public Service Commission of South Carolina over the extended timeline sought by contractors for completion of Units 2 and 3 at the V.C. Summer nuclear station.

In addition, SCANA utility South Carolina Electric and Gas (SCE&G) continues to wrangle with contractors Chicago Bridge & Iron (NYSE:CBI) and Westinghouse Electric in search of a negotiated solution to disputed deadline and cost issues at the two new nuclear units being built in Fairfield County, S.C.

SCANA Executive Vice President and CFO Jimmy Addison and SCE&G COO Steve Byrne briefed financial analysts on these and other issues April 30 during a quarterly earnings call.

The utility filed petition with the state PSC in March to revise the construction schedule for the nuclear project. Based on contractor information, SCE&G is now seeking in-service dates of June 2019 for Unit 2 and June 2020 for Unit 3.

The latest estimate for SCE&G’s share of the total nuclear cost is $6.8bn in future dollars with inflation factored in.

Santee Cooper, the state-owned utility officially known as the South Carolina Public Service Authority, is SCE&G’s minority partner in the project. The utilities are in the midst of its peak construction period in 2015 through 2017.

SCANA said petitions to intervene at the PSC are due May 18. SCE&G direct testimony is due May 26 and the hearing begins July 21 with a decision set by Sept. 12 of this year.

As for negotiations with the consortium of contractors, Byrne offered the following comments: “They are ongoing … they haven’t completely broken down yet. …We haven’t given up on the negotiation discussions … We continue to believe there is an opportunity for a settlement.” If negotiation isn’t successful, then it could lead to arbitration and ultimately litigation.

SCANA continues to monitor progress on the Sanmen nuclear plant, currently under construction in China, which is also installing a Westinghouse AP 1000 reactor. Sanman continues to be ahead of V.C. Summer. The China plant could enter operation by the end of 2016. SCANA and Santee Cooper officials will soon visit China in early May to study progress at the Sanmen.

Meanwhile, SCE&G is planning an expansion into renewable energy, mostly solar. SCE&G plans to add 95 MW of renewable energy by 2020. The first solar projects will be a 3.8-MW unit in Cayce, S.C. and a 500 kV project in Charleston, S.C.

On earnings, “the first quarter was very unique,” said Addison. “We saw the successful closing of the sales of two subsidiaries, Carolina Gas Transmission (CGT) and SCANA Communications (SCI), and while the weather was not as extreme as we experienced in the first quarter of 2014, it was still colder than normal. In addition, we continue to experience improving economic conditions in our service territories and resulting customer growth,” Addison said.

SCANA announced earnings for the first quarter of 2015 of $400m, or earnings per share of $2.80, compared to $193m, or earnings per share of $1.37, for 1Q14.

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.