California utility major,
) 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,
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
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
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
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
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.
) 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.
SEMPRA ENERGY (SRE): Free Stock Analysis
VEOLIA ENVIRON (VE): Free Stock Analysis
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