Six months after its last upward revision, PPL Corp. (NYSE:PPL), one of the two developers of the 500-kV Susquehana-Roseland transmission project, increased its estimated cost of building its portion of the 145-mile line.
During its first quarter earnings call May 2, PPL reported that its portion of the project would cost an estimated $630 million, a $70 million increase from the $560 million cost estimate referred to during the company’s fourth quarter 2012 earnings call. Company officials blamed general cost increases for the higher cost estimate.
“It’s a variety of materials and services which came in at a higher cost than when we originally estimated the job, which was some time ago,” a PPL spokesperson told TransmissionHub May 2.
The revision marks the second time the company’s cost estimate has increased in the span of three fiscal quarters; at the end of 2012’s third quarter, the company increased its estimate for its share of the project from $500 million to $560 million.
At that time, the company said the increase was primarily due to an increase in steel costs.
PPL is building the 100-mile Pennsylvania portion of the project, while Public Service Enterprise Group (NYSE:PEG), is building the 45-mile New Jersey portion of the line.
For its part, PSEG made no reference to the project during its first quarter earnings call on April 30, but referred to pending legal action and its potential financial impact on project costs in the form 10-Q the company filed with the Securities and Exchange Commission (SEC) on May 1.
In that filing, PSEG noted that a federal court in February denied a request for an injunction by environmental groups seeking to halt the project within federal park lands, but noted that the dismissal did not include a prohibition against seeking an injunction at a later date. The company also noted that “delays in the construction schedule could impact the cost of construction and the timing of expected transmission revenues.”
In its 2012 year-end 10-K filed with the SCE, PSEG noted that the estimated cost of its share of the project is “up to $790 million,” which a PSEG spokesperson told TransmissionHub May 2 is the company’s high-end estimate.
“We haven’t changed that,” the PSEG spokesperson said. “Our estimate has been $790 million since the beginning.”
With the revision, the total estimated project cost is now $1.42 billion. The project is expected to enter service in June 2015.
This story was originally published by TransmissionHub. It is republished by permission.