Scana's Unit Files Petition To Modify Capital Cost Schedule

Scana Corporation’s (NYSE:SCG) affiliate, South Carolina Electric & Gas Company (“SCE&G”), has filed a petition with the Public Service Commission of South Carolina (SCPSC).

According to the filing, the subsidiary has sought permission to modify its capital cost schedule along with the construction milestone schedule for V.C. Summer Units 2 and 3, the two Westinghouse AP1000 nuclear plants being constructed at the V.C. Summer Station in Jenkinsville, SC.

The petition also includes SCE&G’s notification to the Westinghouse that it will select the Fixed Price Option under the Oct 2015 Amended Engineering, Procurement, and Construction (EPC) contract, subject to formal agreement by Santee Cooper and consent of the SCPSC.

Once this exclusive and binding option takes effect, it will modify the EPC Contract to fix, as of Jun 30, 2015, almost all the costs to be paid for the remaining duration of the V.C. Summer Station project.

Per the petition, the construction schedule shows a definite considerable completion date for Unit 2 of Aug 2019 and a definite considerable completion date for Unit 3 of Aug 2020. These dates were put down by Westinghouse in the Oct 2015 Amended EPC Contract.

After the Amended EPC Contract was signed, Westinghouse appointed Fluor as the subcontracted construction manager for the project. The petition also reveals the increase in SCE&G’s total project costs of about $852 million over the $6.827 billion permitted by the SCPSC in Order No. 2015-661. This comprises about $505 million that is directly linked to the fixed price option. Currently, the total project cost has been approximated at about $7.679 billion, which is inclusive of owner’s cost, transmission, escalation and allowance for funds used during construction.

Currently, Scana Corp carries a Zacks Rank #4 (Sell). Some better-ranked stocks in the oil and gas sector include CVR Refining, LP (NYSE:CVRR) , Sasol Ltd. (NYSE:SSL) and Braskem S.A. (NYSE:BAK) . All these stocks sport a Zacks Rank #1 (Strong Buy).


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