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PG&E Corporation (PCG - Analyst Report) plans to purchase solar power, generated from an upcoming 15-megawatt (“MW”) solar project, from 8minutenergy Renewables LLC and Saferay Inc. The agreement currently depends on the approval of California Public Utilities Commission.

Folsom, Calif.-based 8minutenergy Renewables LLC and its German partner Saferay Inc. will jointly construct the Woodmere Solar Farm on 80 acres farmland in Kern County, Calif. The company intends to begin construction from 2014. The facility is expected to be online in Dec 2015.

Per the agreement, the output from the project would be sold for a period of 20 years to PG&E Corporation.

These initiatives will subsequently enable PG&E Corporation to meet the state of California’s renewable portfolio standard of generating 33% of power from renewable sources by fiscal 2020.

We appreciate PG&E Corporation’s steady effort to expand its renewable portfolio. In Jan 2013, the company received approval from the California Public Utilities Commission to buy power from SolarReserve. Per the agreement, output from the 150-MW solar project would be sold to PG&E Corporation for 25 years.

Globally, utilization of renewable energy is rising primarily due to its clean nature and a growing awareness among the masses regarding its benefits.

Apart from PG&E Corporation, another utility major Exelon Corporation (EXC - Analyst Report) is also focusing on strengthening its renewable portfolio. In May 2013, Exelon’s unit Constellation Energy Resources, LLC constructed a 2.6-MW solar generation project in N.Y. This project is expected to be completed by 2013.

At the end of 2013, PG&E Corporation had a total power generation capacity of approximately 4,000 MW from renewable sources. During the first nine months of 2013, the company invested $1.9 billion for several power purchase agreement, which included few renewable energy-based deals. The company’s steady effort towards diversification of power generation portfolio will enable it reduce carbon emission.

PG&E Corporation currently has a Zacks Rank #3 (Hold). However, other utilities that are currently performing well include American Electric Power Co., Inc. (AEP - Analyst Report) and Alliant Energy Corporation (LNT - Snapshot Report), each with a Zacks Rank #2 (Buy).

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