Sempra Energy (SRE) received approval from the Kern County board of Supervisors to construct a new photovoltaic solar power plant – Rosamond Solar, in California’s Antelope Valley. Located in the high desert about 90 miles north of Los Angeles, Rosamond Solar will generate up to 200 MW electricity to power about 76,000 average homes in a year.
Sempra Energy expects to start work on the Rosamond Solar project in 2012 with completion targeted in 2013. The project will create approximately 300 construction jobs and up to eight new long-term positions to operate the facility.
Rosamond Solar will be built on privately owned, former agricultural land near an existing major transmission line corridor. The project will use photovoltaic solar-panel technology that does not require water to generate electricity.
This is Sempra Generation’s fourth utility-scale solar power project. The company already has two solar facilities in Nevada –10-MW El Dorado Solar facility and the 48-MW Copper Mountain Solar project. The company also recently announced plans to launch the first phase of a 600-MW photovoltaic solar project in Arlington, Arizona – Mesquite Solar I project.
Sempra Energy is a Southern California-based energy services holding company involved in the sale, distribution, storage, and transportation of natural gas. Its subsidiary Sempra LNG develops, owns and operates liquefied natural gas receipt terminals that serve the North American markets. Sempra competes with other companies for construction and operation of liquefied natural gas receiving terminals and purchase of the same.
Sempra Energy’s diversified basket of businesses insulates its operations to a significant degree from regulatory rate risks, compared to integrated utility peers.
We believe that Sempra Energy presents a lower risk profile relative to its peers. This bullish outlook is supported by stable utility earnings, steady progress at its LNG terminals and Sunrise Powerlink transmission line, ongoing installations of smart meter and renewable power projects in the Pacific Southwest. However, on account of pending regulatory issues, and execution risk associated with ongoing infrastructure projects, we reiterate our Neutral recommendation on the Sempra Energy stock.
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