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Duke’s plans include power from V.C. Summer

Staff Reports
Published Nov. 7, 2013

Duke Energy Corp. has filed plans with regulators in the Carolinas indicating the company could tap into power that will be generated by reactor units under construction in Fairfield County for future customer needs.

Lynn Good, Duke Energy. (Photo/Provided) Lynn Good, Duke Energy. (Photo/Provided)

Charlotte-based Duke continues to mull the possibility of buying a stake in the $9.8 billion expansion project at the V.C. Summer Nuclear Generating Station, Lynn Good, president and CEO, said Wednesday during a conference call with analysts to discuss third-quarter financial results.

During the call, Duke reported third-quarter net income of $1 billion, up from $594 million in the prior-year quarter, which contained higher costs related to the company’s merger with Progress Energy Inc. Quarterly revenues were $6.7 billion, relatively flat from the prior-year quarter.

In July 2011, Duke Energy Carolinas signed a letter of intent with Santee Cooper to buy 5-10% of the capacity and output from units 2 and 3 — the new units under construction at Summer. Duke’s stake would be “roughly 10-20% of Santee Cooper’s ownership interest in the two new units,” the utility said.

State-operated Santee Cooper owns 45% of the new nuclear project. Its partner, Cayce-based S.C. Electric & Gas Co., principal subsidiary of investor-owned SCANA, owns the remaining 55% of the project, designed to expand power production at Summer by about 2,200 megawatts. SCE&G and Santee Cooper operate a 966-MW reactor unit at the plant located 28 miles northwest of Columbia.

“We continue to evaluate an ownership interest in this facility of up to 10%,” Good said. “We also expect growth from new wholesale contracts in the Carolinas.”

When pressed by analysts participating in the conference call, Good declined to offer more specifics, such as a timeline for closing a deal with Santee Cooper.

“We believe in regional nuclear, we certainly have a very supportive regulatory environment in South Carolina, but we have not made a final decision to move forward,” Good said. “We continue to evaluate the opportunity.”

Santee Cooper spokeswoman Mollie Gore said negotiations are continuing with Duke, but nothing has been finalized.

"I really just can’t say anything but that we are still in talks," Gore said.

Integrated resource plans that Duke has filed with both North Carolina and South Carolina regulators “do show a need that could be filled by nuclear in the back part of the decade,” Good said.

Duke’s integrated resource plan filed with N.C. Utilities Commission includes about 224 MW of power generated at Summer for the company’s use in North Carolina.

The company’s plan filed with the S.C. Public Service Commission indicates the company could use up to 132 MW from Summer to meet future power demands in its S.C. service territory.

V.C. Summer plant is an “important asset for the region,” Good emphasized during the analysts’ call.

“If we were to acquire up to 10%, somewhere around 70% of that investment would be dedicated to North Carolina,” Good said. “So it’ll be important to receive appropriate regulatory recovery in North Carolina as well.”

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