Duke Energy to Build Nat Gas Plant in SC - Analyst Blog

Duke Energy Corp. DUK in view of the current pro-green drive in the U.S. utility space is implementing a number of measures to reduce the carbon footprint. The largest electric power holding company in the U.S. now plans to build a 750 megawatt MW natural gas power plant at the existing South Carolina coal-fired facility.

Located at the existing Lee Steam Station site in Anderson County, S.C., the latest natural gas-fired, combined cycle plant will enable energy producers to generate additional power from wasted heat, unlike single-cycle plants, thereby resulting in more electricity at less cost. The company expects to start construction in the summer of 2015 and full commercial operation by late 2017. The North Carolina Electric Membership Corporation will own 100 MW of the project.

Duke Energy's latest move confirms its long-term agenda of modernizing its fleet and retaining a diverse fuel portfolio of generating assets to deliver reliable power supply in a cost effective manner. This natural gas-fired combined cycle plant will enable Duke Energy to take advantage of its existing infrastructure to cut costs and minimize the environmental impact. This project will create at least 500 jobs at peak construction, with about 25 full-time employees to operate the plant once it comes online.

Duke Energy recently unveiled plans to build three natural-gas-fired power plants in Florida to help meet the state's mounting energy demand. Duke Energy Florida opted to build a 1,640 MW natural gas plant in Citrus County located next to its nuclear plant retired last year. The plant will be fueled by gas through a new pipeline to be built and operated by Sabal Trail Transmission, a joint venture between Spectra Energy Corp SE and NextEra Energy Inc. NEE. The construction of this plant will cost an estimated $1.5 billion.

The company is investing substantially for infrastructure development projects to manage rising demand, thereby increasing cash inflows.

Duke Energy presently holds a short-term Zacks Rank #3 (Hold). We presently prefer the Zacks Rank #1 (Strong Buy) utility Calpine Corp. CPN.