San Diego Gas & Electric Inks 300 Megawatts of Renewable Energy Contracts

---

Written by John Egan for Industrial Info Resources (Sugar Land, Texas)--San Diego Gas & Electric (SDG&E) (San Diego, California), a unit of Sempra Energy (NYSE:SRE) (San Diego), recently signed power purchase agreements (PPAs) totaling 300 megawatts (MW), making further progress to meeting California's renewable portfolio standard (RPS), which mandates that investor-owned utilities in the state generate 33% of their electricity from renewable resources by 2020.

The PPAs, announced in mid-February, must be approved by the California Public Utilities Commission (CPUC) (San Francisco, California). SDG&E told Industrial Info that it expects the CPUC to vote on the PPAs sometime during the second quarter of this year. The PPAs cover these two projects:

• Mount Signal Solar Project, a 200-MW photovoltaic generator valued at $800 million. The project, scheduled to kick off this July and be completed by late 2013, is located in Imperial Valley, California. The project is being developed by 8minuteenergy Renewables (Folsom, California). The construction of this generator will create about 1,000 jobs. The PPA is for 25 years.


• Manzana Wind Power Project, a 189-MW windfarm currently under construction in Kern County, California. Iberdrola Resources Incorporated (Portland, Oregon), the U.S. unit of Iberdrola SA (MCE:IBE) (Bilbao, Spain), is building this project. SDG&E has contracted to take 100 MW from this project, which is scheduled to begin operating later this year. The PPA is for 20 years.

Electricity from the Mount Signal project will be transported along SDG&E's Sunrise Powerlink transmission line, a $1.8 billion, 500-kilovolt (kV) high-voltage transmission project under construction. The project is scheduled to be completed later this year.

Power from the Manzana project may be transmitted over the Tehachapi Renewable Transmission Project being constructed by Southern California Edison (SCE) (Rosemead, California), the utility unit of Edison International (NYSE:EIX) (Rosemead). But that high-voltage transmission project has run into stiff opposition from residents in Chino Hills, California. For more on this issue, see the February 1, 2012, article - Construction Halted on California's $2.1 Billion Tehachapi Transmission Project as Regulators Assess Alternate Routes.

SDG&E spokesman Art Larson could not confirm that power from Manzana would be transmitted over the Tehachapi line. But in an interview with Industrial Info, he did say, "we are not expecting any problems getting the power to San Diego" from the Manzana project, which is located in the Bakersfield area of central California, about 230 miles north of metropolitan San Diego.

"These contracts continue the significant momentum SDG&E has built over the past decade in acquiring valuable green energy resources," James P. Avery, senior vice president of power supply for SDG&E, said in a February 16 statement announcing the PPAs. "In 2011, renewable energy sources such as wind, solar, geothermal, biomass and hydroelectric represented more than 20% of the power provided to our 1.4 million electric customers. This is a terrific accomplishment given the fact that we had just 1% renewable power in our portfolio 10 years ago and about 12% renewables in our power portfolio in 2010. We are well on our way toward meeting the state's goal and attaining 33% of our power from renewable sources in 2020."

SDG&E's resource portfolio has gotten greener in a hurry, and it looks to get greener still in the coming years. Last year, the utility signed PPAs with 17 renewable projects totaling 1,482 MW, Larson said. In 2011, renewable generation accounted for 20.8% of the utility's electricity, double the level of 2009, he said. Today, about 60% of SDG&E's renewable electricity comes from wind power, while the remainder is generated by geothermal, biomass, landfill gas and solar generators.

Larson added that SDG&E's resource planners will continue to aggressively pursue PPAs with renewable energy projects in 2012. "We're very optimistic that we'll meet our 33% by 2020 requirement," he said. "We have a number of projects under development and scheduled to come online over the next few years. Several of these projects are located in the Imperial Valley, which has great solar and wind resources. Our Sunrise Powerlink transmission project is what will enable us to bring renewable electricity generated in the Imperial Valley to San Diego."

In a statement, Tom Buttgenbach, president of 8minutenergy Renewables, said, "The Mount Signal Solar project will ultimately create nearly 1,000 direct and indirect jobs in an area with high unemployment, and produce renewable energy that will further SDG&E's goal of helping the state meet its 33% RPS mandate. SDG&E and the Imperial County Board of Supervisors all played pivotal roles in the careful evaluation, planning and support of this project."

View Project Reports - 300011489 300036839 6005771

Industrial Info Resources (IIR), with global headquarters in Sugar Land, Texas, and eight offices outside of North America, is the leading provider of global market intelligence specializing in the industrial process, heavy manufacturing and energy markets. Industrial Info's quality-assurance philosophy, the Living Forward Reporting Principle™, provides up-to-the-minute intelligence on what's happening now, while constantly keeping track of future opportunities.