Energy generation company NRG Energy Inc. (NRG) said it has completed the purchase of a 290-megawatt solar project in Arizona from First Solar Inc. (FSLR). The purchase of the Agua Caliente solar project, which is presently under construction, was contingent upon the project’s loan guarantee from the U.S. Department of Energy’s Loan Programs Office.
Located in the Yuma County, Arizona, the Agua Caliente is the world’s largest solar photovoltaic project capable of creating up to 400 construction jobs through its completion in 2014. The project has obtained all permits and approvals from both federal and state agencies.
Once completed, Agua Caliente project will sell electricity under a 25-year power purchase agreement with San Francisco-based Pacific Gas and Electric Co., a subsidiary of PG&E Corp. (PCG). At full capacity, the project can generate sufficient electricity to serve more than 225,000 homes. This will help California meet its ambitious renewable energy goals.
Furthermore, the Agua Caliente project is expected to reduce emission of carbon dioxide by nearly 5.5 million metric tons over 25 years, the equivalent of taking over 40,000 cars off the road annually.
Last week, NRG Energy reported an adjusted net income of $2.53 per share in the second-quarter 2011, way ahead of the Zacks Consensus Estimate of 38 cents. However, revenue for the quarter at $2.3 billion fell short of the Zacks Consensus Estimate of $2.7 billion.
Going forward, NRG Energy expects to generate 2011 adjusted EBITDA of $1.9 – $2.0 billion as its Reliant retail business continues to benefit from favorable conditions. The Zacks Consensus EPS Estimates for 2011 and 2012 are 92 cents and 73 cents, respectively.
Based in Princeton, New Jersey, NRG Energy Inc. operates as a wholesale power generation company. The company is also involved in fuel and transportation services, selling energy and related products in the United States and international markets.
We maintain a ‘Neutral’ recommendation on NRG Energy in the long term. The quantitative Zacks #3 Rank (short-term Hold rating) for the company indicates no clear directional pressure on the stock over the near term.
