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Duke Energy CFO says nuclear remains 'prudent' option

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Essential Energy Insights - November 2021


Duke Energy CFO says nuclear remains 'prudent' option

In the wake of news that SCANA Corp. and its project partner decided to abandon the V.C. Summer nuclear expansion, Duke Energy Corp. continues to weigh the prospects for its proposed reactors, but a decision could be months away.

"We're certainly following all of these developments with Southern Co., SCANA, with [Westinghouse Electric Co. LLC] and so forth. It's been pretty dynamic," Duke Energy Executive Vice President and CFO Steven Young said in an Aug. 3 phone interview prior to the company's second-quarter 2017 earnings call. "But right now, we're focused on our projects and the facts and circumstances that surround those particular projects."

Duke Energy has received operating licenses from the U.S. Nuclear Regulatory Commission for the 2,200-MW Levy Energy Complex in Florida and the 2,234-MW William States Lee III Nuclear Station in South Carolina.

"That's an option that I think is very prudent for us to maintain," Young said. "However, obviously, moving forward with construction of a nuclear plant is a very different decision. We'll be advancing that [decision process] over the next several months I think."

The North Carolina Utilities Commission issued an order May 15 directing Duke Energy Carolinas LLC, or DEC, to provide a report on the costs, construction plans and cost recovery tied to its Lee Nuclear Station. The utility will include this information in its upcoming rate case, expected to be filed on or before Aug. 25.

"So, there's a lot of information obviously that we're gathering and putting together. And I think through that rate case process is where we will be making some decisions and having some further information," Young said.

The CFO added that nuclear generation remains a "valuable resource" and the company is looking into license extensions for its existing facilities.

"Obviously, we have a huge nuclear fleet that we've been running very efficiently for decades. It's been a very valuable resource for our customers. I think our focus has certainly been on operating those facilities," Young said. "We've also been focusing on what might we need to do to extend the licenses of those existing facilities. That's a very viable option in our mind that we're continuing to work on."

"Regarding new nuclear, there are challenges there. We understand those challenges," he added.

Young again dismissed the idea that Duke Energy would target SCANA given the V.C. Summer woes or potentially acquire another utility.

"Right now, our plan has very solid organic opportunities. It's not underpinned by a need for M&A," Young said. "We'll keep our finger on the pulse of what is out there. But right now, our focus is on the organic side of our business. We have great opportunities across our fleet as we move forward."