Duke Energy Renewables, a subsidiary of Duke Energy Corporation (DUK), has purchased a portfolio of photovoltaic (“PV”) projects from ESA Renewables, LLC that brings the company’s ownership of solar farms in North Carolina to seven.
The three 1-megawatt commercial solar projects acquired by the company are located in or near the town of Murphy, N.C. at the southwestern corner of the state. ESA Renewables will be responsible for handling operations, monitoring and maintenance at each of the solar farms.
The suite of acquired solar plants includes a 4,298-panel Murphy Farm Solar Project located on approximately eight acres of purchased land. It had begun commercial operation in May this year. The second farm is a 4,340-panel Wingate Solar Project sited on seven acres of purchased land. It had achieved commercial operation in August. The third, a 4,242-panel Holiness Solar Project, is located on approximately nine acres of purchased land and is expected to achieve commercial operation in the month.
As a part of Tennessee Valley Authority’s (“TVA”) Generation Partners (SM) program, the power generated from each of the newly acquired solar farms is sold through Blue Ridge Mountain EMC to TVA under a power purchase agreement spanning 10 years.
Excluding the three acquired properties, the company has four other commercial solar farms in operation in the state. It includes the 1-MW Shelby Solar Project, the 1-MW Taylorsville Solar Project, the 1-MW Martins Creek Solar Project, and 5-MW Murfreesboro Solar Project. Of these the Murfreesboro Solar Project is still under construction and the Martins Creek Solar Project in Murphy was bought by the company in April this year from ESA.
Duke Energy Corporation’s U.S.electricity and gas operations, spread over North Carolina, South Carolina, Indiana, Ohio and Kentucky, generate a relatively stable and growing earnings stream. Key growth drivers for the company include a strong balance sheet and ongoing capital expansion projects. Looking forward, our favorable opinion also stems from the ongoing merger deal with Progress Energy Inc. (PGN).
However, the valuation continues to be restrained by a number of factors, including the present unfavorable macro backdrop, predominantly fossil-fuel based generation assets, tepid demand for electricity, foreign currency exchange volatility and pending regulatory cases. The company presently retains a short-term Zacks #2 Rank (Buy). We have a long-term Neutral recommendation on the stock.
Recently, Duke Energy announced third-quarter 2011 operating earnings of 50 cents per share, beating the Zacks Consensus Estimate by 3 cents. However, the results were marginally lower than the year-ago earnings of 51 cents per share. Its merger partner Progress Energy also reported third-quarter results with an operating earnings of $1.16 per share, falling short of the Zacks Consensus Estimate of $1.24 and year-ago earnings of $1.23.
Charlotte, North Carolina-based Duke Energy is a diversified energy company with a portfolio of domestic and international, natural gas and electric, regulated and unregulated businesses which supply, deliver, and process energy for customers in North America and selected international markets.
DUKE ENERGY CP (DUK): Free Stock Analysis Report
PROGRESS ENERGY (PGN): Free Stock Analysis Report
Get all Zacks Research Reports and be alerted to fast-breaking buy and sell opportunities every trading day.
Be the first to comment