Sempra U.S. Gas & Power, a subsidiary of Sempra
Energy ( SRE ), has completed
the construction of the first phase of the Mesquite Solar complex
in Arlington, Arizona. With a generation capacity of 150 MW, the
photovoltaic (PV) solar energy project has now come online.
The construction of the project had begun in June 2011 and
employed more than 450 workers. Located about 40 miles west of
Phoenix, the solar power project generates clean electricity that
is sufficient to power approximately 56,000 homes.
Going forward, when other phases of the solar complex comes on
line, it would likely produce 700 MW of clean energy. Per a 20-year
contract, all the electricity generated from the project will be
sold to Pacific Gas & Electric Company, a subsidiary of
PG&E Corporation ( PCG ).
The company is progressing well with its solar and natural gas
projects worldwide. In December last year, Sempra Energy has
completed the construction of the first phase of the Copper
Mountain Solar 2 project (i.e. 92 megawatt ("MW")), which is the
company's new 150 MW photovoltaic solar power facility.
Located in Boulder City, Nevada, about 40 miles southeast of Las
Vegas on a 1,110 acre site, Copper Mountain Solar 2 encompasses 1.5
million solar panels. These solar panels are capable of generating
sufficient clean energy to power 27,600 homes on an average. With
the completion of the second phase, the plant will be able to
generate additional electricity of 58 MW, thereby bringing the
total output to 150MW. The company expects the whole project to be
completed by 2015.
In October last year, the company had received two contracts for
the construction and operation of an approximately 500-mile
pipeline network that will connect the Northwestern states of
Sonora and Sinaloa.
Arizona seems to be leading the nation in the production of clean
and renewable solar energy. Yesterday, another utility Duke
Energy Corporation ( DUK ) had completed its
fifth Solar Project, the Black Mountain Solar Power Project in
Arizona that has an electric generation capacity of 10 megawatt
("MW").
With the completion of the first phase of this solar project,
Sempra can now continue to focus on the development of the
remaining 4,000-acre complex. With this progress, the company
believes that it is on track to own and operate more than 1,000
megawatts of renewable energy capacity by the end of full year
2013.
Sempra Energy's diversified basket of businesses insulates its
operations to a significant degree from regulatory rate risks. We
believe the company presents a lower risk profile relative to its
peers. This bullish outlook is supported by stable utility
earnings, steady progress at its LNG terminals, renewable power
projects in the Pacific Southwest, the Sunrise Powerlink
transmission line and ongoing installations of smart meter.
However, the above positives are offset due to a lack of any
near-term positive triggers, along with near-term trepidation in
natural gas prices and pending regulatory cases. The company
presently retains a short-term Zacks Rank #3 (Hold) that
corresponds with our long-term Neutral recommendation on the
stock.
Sempra Energy is a southern California-based energy services
holding company, involved in the sale, distribution, storage, and
transportation of electricity and natural gas. The company's
businesses are broadly divided into Sempra Utilities, Sempra
International and Sempra U.S. Gas & Power.
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