California utility major, Sempra Energy’s ( SRE - Analyst Report ) business wing, San Diego Gas & Electric (“SDG&E”) announced the finalization of its dual long-term renewable power purchase contract with Diverse Business Enterprise (“DBE”) entities. Sempra will buy a total of 40 megawatts (“MW”) of renewable power to supply its customers in Imperial Valley, California.

The DBE program is an approach to encourage diverse owners of small-to-mid scale businesses in the U.S. to become valued suppliers to cash-rich companies like Sempra Energy. The first contract includes a 20-year deal to procure 20 MW of solar power from the Seville solar facility, a joint venture initiative with Sempra’s DBE associate Tallbear Seville and Regenerate Power. The facility located northwest of Brawley in Imperial County consists of photovoltaic single-axis modules and will be finished in 2015.

The second 20-year agreement entails Sempra to purchase 20 MW of solar output generated from the Calipatria Solar Farm, a fixed-tilt photovoltaic facility also located in Imperial Valley. The project is a partnership between 8minutenergy Renewables' ancillary, 70SM1 8ME, LLC and Gestamp Solar.

The twin projects are scheduled to be completed in 2015 and will deliver power via the 117-mile Sunrise Powerlink transmission line.

Sempra Energy has been actively involved in the DBE programs over the past two years. The company’s renewable business chipped in 20.8% of retail sales in 2011. Sempra is aggressively expanding its green portfolio with 17 contracts of a total 1,482 MW under its belt. In 2012, the company clinched 13 more contracts which bring the total capacity level to a massive 1,879 MW.

With the current trend in the U.S. market that favors clean energy, we expect these DBE initiatives will bode well for the company. In addition, these long-term agreements would lead to a steady flow of power to its service territories, thereby retaining customer loyalty.

Near-term negative triggers include pending regulatory cases related to the company’s San Diego Gas & Electric business. The company presently has a short-term Zacks #3 Rank. (Hold rating).

Sempra Energy reaffirmed its 2012 adjusted earnings outlook in the range of $4.00 to $4.30 per share. The Zacks Consensus Estimate for full year 2012 is $4.16 per share, at the mid-point of the guided range.

Veolia Environment S.A. ( VE - Snapshot Report ) is another company that has extensively pursued DBE programs in Indiana, Georgia and Wisconsin.

With a market capitalization of $17.58 billion, San Diego based Sempra Energy has 17,483 total employees.