ConEdison, Sempra in 360 MW Solar Project

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Consolidated Edison Inc. (ED) and Sempra Energy (SRE) have collaborated through their affiliates – Sempra U.S. Gas & Power and Consolidated Edison Development – for the joint ownership as well as operation of five solar projects in California and Nevada. The terms of the deal were not disclosed.

The deal includes Sempra’s 250 MW Copper Mountain Solar 3 plant, currently under construction near Las Vegas, and Con Edison’s CED California Holdings, LLC portfolio comprising four plants. CED California Holdings went into operation two years back. The portfolio consists of the 50-MW Alpaugh 50, 20-MW Alpaugh North and 20-MW White River 1 facilities in Tulare County, and the 20-MW Corcoran 1 facility in Kings County.

Together all the facilities will have a power generating capacity of 360 MW, all of which have been sold under long-term power purchase agreements.

The deal relating to CED California Holdings projects is subject to regulatory approvals, which are expected to be acquired by the second quarter of 2014. Post completion, this Sempra Energy–Consolidated Edison partnership will enable each utility to own a 50% stake of each plant, thereby spreading risks as well as opportunities uniformly between the two companies.

Located in Boulder City, NV, the Copper Mountain Solar complex is currently one of the largest photovoltaic (“PV”) solar plants in the U.S. Completion of the first 125 MW is expected by the end of 2014, with the remaining 125 MW slated for completion by next year. Post completion, the plant will have the capacity to power approximately 80,000 homes.

In May 2013, Consolidated Edison announced it would acquire a 50% stake in two solar farms owned by Sempra U.S. Gas & Power, under construction in Nevada and Arizona. Each company will own a 50% interest in the two solar facilities, the Copper Mountain Solar 2 plant and the Mesquite Solar 1 power plant.

These long-standing strategic collaborations will enhance Consolidated Edison’s presence in the U.S. Apart from expanding its footprint in the renewable energy market, the transactions will give ConEdison strategic renewable assets that have strong project fundamentals.

ConEdison is focused on energy efficiency initiatives and is also aggressively pursuing an oil-to-gas conversion program that will lower costs while improving air quality. Additionally, the company continues to invest heavily in infrastructure improvement.

Consolidated Edison and Sempra currently carry a Zacks Rank #3 (Hold). In the near term, we would advise investors to accumulate their Zacks Rank #1 (Strong Buy) peers Delta Natural Gas Company, Inc. (DGAS) and Atmos Energy Corp. (ATO).

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