On May 23, 2014, Southern Power - an affiliate of electric
) − and billionaire Ted Turner-owned Turner Renewable Energy have
jointly purchased the Macho Springs Solar Power Plant from
First Solar Inc.
). The 50-megawatt (MW) capacity plant is the largest photovoltaic
power facility of New Mexico and will be capable of supplying
electricity to more than 18,000 houses.
This is the seventh solar plant purchase of the partnership,
bringing the total capacity to roughly 290 MW. Out of the seven
power plants purchased, the Macho Springs facility is the second
largest in terms of power generation capacity.
First Solar started the construction of the Macho Springs
photovoltaic power plant - spread over 600 acres - in Jul 2013. The
plant is expected to start commercial operation by this week.
El Paso Electric Co.
), a public utility firm, will purchase the electricity generated
by the plant for a period of 20 years, to efficiently provide clean
energy to its 394,000 customers.
Southern Company has been focusing its wholesale business expansion
either by acquiring power generating units or building new plants.
The recent purchase corroborates this aim.
Headquartered in Atlanta, GA, Southern Company is one of the
largest generators of electricity in the nation, serving both
regulated and competitive markets across southeastern U.S.
Additionally, Southern Company owns all of the common stock of
Southern Power, which owns and operates more than 7,500 MW worth of
However, Southern Company's heavy reliance on coal-generated energy
supply and a lack of meaningful contribution from renewable energy
is a matter of concern. With widespread awareness on 'environment
friendly or green' energy, the company may be forced to divert cash
flows to ensure regulatory compliance, which can adversely impact
As a result, Southern Company currently retains a Zacks Rank #3
(Hold), implying that it is expected to perform in line with the
broader U.S. equity market over the next one to three months.
Meanwhile, one can look at better-ranked player in the same
industry such as
Black Hills Corp.
). The stock sports a Zacks Rank #1 (Strong Buy).
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BLACK HILLS COR (BKH): Free Stock Analysis
EL PASO ELEC CO (EE): Free Stock Analysis
FIRST SOLAR INC (FSLR): Free Stock Analysis
SOUTHERN CO (SO): Free Stock Analysis Report
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