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U.K. energy major BP Plc (BP - Analyst Report) has collaborated with San Diego-based Sempra Energy (SRE - Analyst Report) for the development of two wind farms - Mehoopany Wind Farm in Pennsylvania and the Flat Ridge 2 Wind Farm in Kansas. Both the companies together intend to invest in excess of $1 billion for the project.

The facilities, with a combined production capacity of 560 megawatts, were initially developed by BP’s wind-development unit. Later, Sempra Energy acquired a 50% interest in the wind farms. BP will remain the operator of the wind farms when they come online by the end of 2012.

The Pennsylvania unit will have a capacity of 141 megawatt (MW). The U.S. unit of Renewable Energy Systems Ltd. is responsible for the construction of this facility. General Electric Co. (GE - Analyst Report) will supply 88, 1.6 MW wind turbines for the wind farm. The facility has already entered into long-term contracts with two electric cooperatives - Old Dominion Electric Cooperative and Southern Maryland Electric Cooperative.

On the other hand, the 419 MW Flat Ridge 2 Wind Farm in Kansas– to be built by Blattner Energy – will supply its electricity to Associated Electric Cooperative and Southwestern Electric Power Co. – a unit of American Electric Power Co. Inc. (AEP - Analyst Report). The facility will use 262 wind turbines of General Electric. It is on a look out for an additional customer.

Wind power development has witnessed increased interest in recent times. The Production Tax Credit (PTC) provides an income tax credit of $0.022 cents per kilowatt-hour for the production of electricity and is set to expire by the end of 2012. The PTC will be applicable for the first 10 years of electricity production. Therefore, BP and Sempra are eager to start their wind farms by the end of 2012.

BP owns or co-owns 13 wind farms with a total generating capacity of 1,730 MW. While Sempra has 325 MW of its own solar and wind farms while co-owns two other wind farms in Indiana and Colorado with BP Wind.

Both BP and Sempra Energy hold a Zacks #3 Rank, which is equivalent to a Hold rating for a period of one to three months. Over the long term, we maintain our Neutral recommendation on both the companies.

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