California utility major,
) renewable business wing, Sempra U.S. Gas & Power, LLC,
received support from Southern California Public Power Authority
("SCPPA") to supply 250 megawatt ("MW") of solar power to the
cities of Los Angeles and Burbank for a period of 20 years. The
solar output will be delivered from Sempra's Copper Mountain
Solar 3 program located in Boulder City roughly 40 miles
southeast of Las Vegas.
SCPPA is an entity comprising 11 municipal utilities and one
irrigation district which finances power and transmission
resources on behalf of its members. Copper Mountain Solar 3 is
the fourth utility-scale renewable venture undertaken by Sempra
in Boulder City, Nevada.
Per the agreement, the company will provide around 210MW of
green power to the Los Angeles Department of Water and Power
("LADWP") while Burbank will be the receiver of 40MW. The
building of the Copper Mountain Solar 3 facility is anticipated
to initiate next month. Solar power will be transported via a
substation and transmission lines controlled by LADWP.
Recently, the company has completed Phase I of the
construction of the Copper Mountain Solar 2 unit as well as
developed a 58MW Copper Mountain Solar 1 unit in Boulder
Combining Sempra's Copper Mountain project along with other
solar ventures will bring the total solar capacity to more than
450MW in Boulder City alone. The latest program which is expected
to be concluded by the end of 2015 will amply power about 80,000
residences on an annual basis. The Copper Mountain Solar 3
program will also create 300 new jobs when the construction of
this project reaches full steam.
With the current positivity in the U.S. market for sustainable
green energy, we believe the company will accrue significant
benefits from this long-term contract. Meanwhile, the
construction of Sempra's Mehoopany wind farm in Pennsylvania is
in full swing and will provide cost-competitive power to U.S.
consumers. In addition, the company has 700 MW of additional
solar power development program in California and Arizona under
Sempra intends to bring into service 1,400 MW of renewable
capacity by 2016 which will offer favorable prospects given the
expected increase in renewable usage in the next couple of
However, cheap natural gas continues to grab attention of the
energy producers with its abundance in the U.S. and will present
serious challenges to renewables. Also, pending regulatory cases
related to the company's Southern California Gas and San Diego
Gas & Electric businesses could offset the above positives.
Sempra presently holds a short-term Zacks # 3 Rank (Hold
Another Zacks #3 Rank renewable player,
), is also undertaking initiatives like compliance with
California's renewable energy mandate through projects like
SmartConnect and Solar Photovoltaic Program.
Sempra Energy reaffirmed its 2012 adjusted earnings outlook in
the range of $4.00 to $4.30 per share. The Zacks Consensus
Estimates for fourth quarter and full year 2012 are currently
pegged at 98 cents and $4.16 per share, respectively.
With a market capitalization of $17.25 billion, San
Diego-based Sempra Energy has 17,483 total employees.
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