The overhead portion of San Diego Gas & Electric Sunrise PowerLink project and Northeast Utilities Greater Springfield Reliability project were also impacted by similar environmental forbidding delays. Lastly, mostly due to these and other project delays, we had higher unallocated equipment costs as transmission equipment remained idle, while waiting on these jobs to start. These costs and delays, along with other circumstances, resulted in submitted and pending change orders and claims in excess of over $60 million. Because of existing ongoing negotiations, uncertainly regarding the timing of booking these change orders and the potential for additional delays and subsequent costs that could impact the amounts claimed. None of the claims are included in our first quarter results. We expect positive contribution to the future earnings as these negotiations progress throughout the remainder of the year.Two other issues affected the quarter. We reorganized the distribution portion of our Natural Gas division to reflect current demand and to effectively meet customer needs. Severance and other reorganization costs of approximately $2 million were incorporated in the quarter results. The more majority of which, were originally anticipated to occur later in the year. Additionally, we mobilized under our new gas outsourcing agreement with Puget Sound Energy. This resulted in approximately $2 million of start up costs that will be recouped as the job progresses. A portion of these costs were originally anticipated to occur later in the year, but these costs were, nonetheless, higher than we anticipated during the first quarter. Jim will provide additional information on the near and far term expectations of these projects and current timelines.
Quanta Services' CEO Discusses Q1 2011 Results - Earnings Call Transcript
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