Duke Energy Corporation’s (DUK) ambitious plan to build a nuclear plant in Cherokee County, South Carolina is now at the crossroads. South Carolina Public Service Commission after hearing testimony from the public over the matter adjourned the hearing to review a proposed settlement among the company, regulators and several other parties in the case.
We believe the safety and proper maintenance of the nuclear power plants have gained even more importance and emphasis across the globe after the Fukushima nuclear crisis in the wake of the earthquake and tsunami.
Duke Energy is pushing for a decision to continue spending money on the licensing process for a proposed site in Cherokee County even though the company has not yet decided to build another nuclear plant in South Carolina.
Earlier the company was able to reach a settlement with the state Office of Regulatory Staff, the South Carolina Energy Users Committee and the Coastal Conservation League. However, the settlement at one go slashed planned expenditures to $120 million from $229 million that the company initially requested.
Duke Energy already operates five reactors at two sites in South Carolina — the Catawba Nuclear Station in York County and the Oconee Nuclear Station in Oconee County.
Duke Energy also is seeking approval for the same expenditures from North Carolina utility regulators, who have recommended the same $120 million as a cap for spending from January 1, 2011, through June 30, 2012. About two-thirds of the cost would be allocated to Duke's North Carolina operations, according to filings with the North Carolina Utilities Commission.
Duke Energy reported a strong first quarter 2011. Earnings in the most recent quarter surpassed both the year-ago results and the Zacks Consensus expectation mainly on the back of a strong performance at Duke Energy International.
Duke Energy expects its adjusted earnings per share for 2011 to be in the range of $1.35 to $1.40. The Zacks Consensus Estimate for 2011 is presently at $1.37 per share.
We believe the overseas partnership is a win-win deal for both the companies. Besides developing green cities, this venture will enable Duke Energy to further develop and deploy green energy technologies in other cities.
Duke Energy Corporation currently retains a Zacks #3 Rank (short-term Hold rating). The company competes with American Electric Power Co. Inc. (AEP) and Constellation Energy Group Inc. (CEG). Over the long run we are Neutral on the company.
Based in Charlotte, North Carolina, Duke Energy is an energy company. The company operates through three segments: U.S. Franchised Electric and Gas, Commercial Power, and International Energy.
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