Dominion Resources, Inc. (D) continues to expand its renewable generation portfolio. The company announced that its two renewable facilities -- Dominion Bridgeport Fuel Cell facility and Dominion Somers Solar Center -- have started operations. These two set-ups can jointly generate 20 megawatts (“MW”) of electricity.
Dominion Bridgeport Fuel Cell facility is located in Bridgeport, Conn. The project is a part of Project 150, a program supported by the state of Connecticut and the Clean Energy Finance and Investment Authority (“CEFIA”) to increase renewable and clean energy projects in the state.
The company will utilize natural gas to generate electricity though an electro-chemical process. The facility has a capacity to produce 14.9 MW of electricity. Under a services contract, FuelCell Energy Inc. will control and maintain the facility.
The Somers, CT-based Dominion Somers Solar Center, constructed by Prime Solutions Inc., utilizes 23,150 solar panels. The facility has power generation capacity of approximately 5 MW. On Oct 22, 2013, the company acquired the project from Japanese company Kyocera Corp. (KYO).
We note that utilization of renewable energy for electricity generation is increasing primarily due to its clean nature and a growing awareness among the masses about its benefits. This has influenced utility providers to shift their energy mix to solar, water and wind from traditional modes.
It is evident from past records that Dominion Resources continues to strengthen its renewable asset base. On Dec 16, 2013, the company’s three Indianapolis-based solar projects – Indy Solar I, II and III – began operations. The three projects have a total electricity generation capacity of 28.6 MW. The company also has a couple of solar projects near Augusta, Ga. and Indianapolis, which are progressing at a planned pace.
Several countries have rolled out mandates for minimizing the pollution level for power generation. To fulfill the environmental legislations, utility providers are investing substantially to develop and upgrade their renewable utility assets. Apart from Dominion Resources, its peer ALLETE, Inc. (ALE) is investing heavily to develop and upgrade its renewable emission-free utility assets to comply with stringent regulations.
Dominion Resources will sell the total output from the two aforesaid facilities to Northeast Utilities’ (NU) unit Connecticut Light & Power Co. under fixed power purchase agreements. We believe signing long-term agreements will enable the company to secure a stable revenue stream going forward. A steady cash inflow will also support the company to invest more in new projects.
Richmond, VA-based Dominion Resources currently has a Zacks Rank #3 (Hold).