Dominion Resources, Inc. (D) has inked a contract with EDF Renewable Energy to acquire two solar energy projects – the 24-megawatt (MW) Cottonwood and the 18-MW Catalina Solar 2 – from the latter. The transaction is expected to complete in 2015.
Both the solar farms are located in the state of California. With solar sites located in the Kings, Kern and Marin counties, the Cottonwood project is expected to be online in the first half of 2015. The Catalina Solar 2 project is situated in Kern County and is expected to commence operation in the second quarter of 2015. These projects will likely be eligible for the federal Investment Tax Credit.
Dominion Resources has long-term power purchase agreements (PPA), interconnection agreements and engineering, procurement, construction (EPC) contracts in place for the two projects. The signing of long-term PPAs will enable the company to secure a steady cash inflow.
Dominion Resources continues to strengthen its renewable properties. On Sep 3, 2014, the company’s unit Dominion Virginia Power installed 240 photovoltaic panels on the rooftop of Virginia Union University's Thomas H. Henderson Center under its Solar Partnership Program.
In Jun 2014, Dominion Resources entered into an agreement with EDF Renewable Energy to acquire the latter’s 20-MW CID Solar project in California. The project is expected to begin operation in late 2014.
The latest acquisition enables Dominion Resources to increase its total long-term contracted solar portfolio to 274 MW, which are either in operation or under construction.
Apart from California, the company is constructing utility-scale solar facilities in other parts of the U.S., including Connecticut, Georgia and Indiana. The company’s systematic investments in renewable ventures are in sync with the U.S. authorities’ environmental mandates.
Other electric utility provides like DTE Energy Company (DTE), Exelon Corporation (EXC) and NRG Energy, Inc. (NRG) continue to invest substantially to diversify their generation mix, thereby achieving regulatory compliance.
As of Jun 30, 2014, Dominion Resources had cash and cash equivalents of around $0.4 billion and available liquidity of around $1.3 billion under credit facilities. A stable liquidity position will enable the company to pursue disciplined investments in renewable ventures.
Dominion Resources currently holds a Zacks Rank #3 (Hold).
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