San Diego Gas & Electric (“SDG&E”), a subsidiary of Sempra Energy ( SRE - Analyst Report ) has finally completed the construction of its $1.9 billion Sunrise Powerlink project and initiated operations at the site. The project establishes a transmission line connecting San Diego to the Imperial Valley, a key renewable-rich region in California.

The 500,000-volt transmission line consists of more than 110 miles of overhead 500kV transmission towers and 230kV conductors. It also consists of 6.2 miles of underground 230kV cable and a 40-acre, 500kV transmission substation that will help in reducing the use of energy by homes and businesses.

The $1.9 billion project took one and a half years to complete and involved both overhead and underground technology processes. It also marked the end of a five-year environmental review and permitting process.

Overall, the project spanned 4.7 million work hours. The project utilized 13,200 tons of steel. It has 438 tower foundations. Due to environmental reasons, 75% of the tower structures had to be installed using helicopters. It took more than 28,000 flight hours to complete the aerial construction.

Sunrise Powerlink involved extensive regulatory review and is considered to be the most comprehensive study of a proposed transmission power line in state history. During the initial stages, the project will be able to transmit 800 megawatts of power. Eventually, it will carry 1,000 megawatts of power sufficient to serve 650,000 homes.

The project has been completed at a very important time. Recently, the company had announced the closure of the two-unit San Onofre nuclear plant at the end of August. The project will help in maintaining electric supply during the summer and in the absence of power generation from the San Onofre Nuclear Generating Station.

Sunrise Powerlink is a profitable as well as an environment friendly project. The project will soon begin delivering a significant amount of wind and solar power to San Diego. Over the past three years, SDG&E has signed eight renewable agreements for more than 1,000 MW of solar and wind power from projects in Imperial County. The green energy from these projects will be sent out through the Sunrise Powerlink.

During its construction period, the project created jobs in the Imperial Valley region, which has suffered a high rate of unemployment over the years. The development of the regions’ abundant renewable energy resources, it enables preservation of natural resources and native habitat.

Mainly, it will be a major contributor in achieving the company’s goal of generating 33% of energy from renewable sources by 2020. In 2011, the company had generated more than 20% of its energy from renewable resources.

Overall, from the company’s point of view, we believe that the company has a lower risk profile in comparison to its peers. Its diversified nature of businesses protects its operations to a significant degree from regulatory rate risks.

Its stable utility earnings, steady progress at its LNG terminals, renewable power projects in the Pacific Southwest, the completion of its Sunrise Powerlink transmission line and ongoing smart meter installations act as key growth drivers. However, we are concerned due to lack of any near-term positive triggers, along with trepidation in natural gas prices and pending regulatory cases.

Like its peers Edison International ( EIX - Analyst Report ) and PG&E Corporation ( PCG - Analyst Report ) , the company retains a short-term Zacks #3 Rank (Hold) that corresponds with our long-term Neutral recommendation on the stock.