San Francisco utility Pacific Gas and Electricity (PG&E)�has acquired a $900 million, 246-megawatt wind project in Southern California from Iberdrola Renewables, the U.S. unit of the Spanish renewable energy company. This is PG&E�s first direct investment in wind generation.
The deal was Thursday. In the U.S. direct investments by utilities in renewable energy projects are rare and so we thought it was important to highlight rhis uniqe transaction despite the delay.
The Manzana project, located on about 7,000 acres (2,832 hectares) of land in eastern Kern County, could — pending regulatory approval — start operating in December 2011.
While unusual the PG&E announcement was expected. Earlier this year CEO Peter Darbee announced a five-year, $1.4 billion plan to develop and own up to 500 megawatt of solar photovoltaic power.
PG&E is not alone in owning renewable energy generation — Southern California Edison, Duke Energy and Public Service Electric and Gas, all own some — but standard practice for utilities are to purchase green generation from third parties via long-term power purchase agreements.� In the current economic environment, financing remains tight and utilities and their large, cash-rich balance sheets can make up for the lack of funding.