San Diego Gas & Electric (SDG&E), a subsidiary of Sempra Energy (SRE - Free Report) , has entered into power purchase agreements (“PPA”) to buy 62 megawatts (“MW”) of capacity from five renewable energy projects in California. These projects comprise three solar and two wind operations.
Per a 20-year agreement, Sempra will buy 7 MW of solar power from Northlight Power’s NLP Valley Center and 20 MW of power from Silverado Power, LLC’s Zodiac projects. Both these solar projects are located in San Diego County. NLP Valley Center is expected to come online in Sep 2014 and Zodiac in May 2015.
The company will buy 20 MW of energy from E.ON Climate and Renewables’ Maricopa West project, according to a 15-year power agreement. This project will be built in Kern County and is expected to come online in Jan 2015.
In a 10-year agreement, the company will buy wind power from Terra-Gen’s 3.5 MW Oak Creek that will be built in Kern County. This project is expected to come online in Jan 2014. Sempra has entered into another 10-year agreement to buy 11.2 MW from San Gorgonio Westwinds II projects that will be built at Riverside County. This wind project is expected to begin operations in Jan 2015.
However, these five agreements have yet to be approved by California Public Utilities Commission.
Sempra is on track to meet the state's renewable energy goal that calls for generating 33% of energy from renewable sources by 2020. In 2011, the company entered into 23 renewable energy contracts that resulted in 20.8% of energy produced from renewable sources.
In 2012, the company signed 13 such contracts, resulting in 20.3% of energy from renewables. The company believes that if the same trend continues then it will be able to generate 25% of renewable energy by 2016.
Recently, the first large scale renewable energy project, namely the NRG Solar Borrego Project, came online in San Diego County which was developed by NRG Energy Inc. (NRG - Free Report) .
Currently, Sempra has six projects under construction in the Imperial Valley. These projects include the Ocotillo Express Wind Project that was connected to the Sunrise Powerlink in Dec 2012.
All these project developments have enabled the company to create a well-balanced renewable portfolio that is a combination of a broad spectrum of energy sources including solar, wind, biomass, biogas and geothermal energy. The company presently retains a short-term Zacks Rank #2 (Buy).
Other stocks worth considering are The Laclede Group, Inc. and Questar Corporation , both with a Zacks Rank #2 (Buy).
Based in California, Sempra Energy is an energy services holding company involved in the sale, distribution, storage, and transportation of electricity and natural gas.