Public Service Enterprise Group Inc.’s (PEG) unit PSEG Solar Source (“PSEG Solar”) announced that it will acquire 13-megawatt (MWdc) solar energy facility from juwi solar Inc. (“JSI”) for $22 million. This is PSEG Solar’s 8th solar project in seven states, taking its solar portfolio capacity to 106 MWdc.
The solar energy facility is situated 14 miles north of El Paso, TX, next to PSEG Solar’s El Paso Electric Newman Generating Station. JSI is acting as the engineering, procurement and construction contractor for the project. JSI has already started construction and will utilize solar panels manufactured by JA Solar Holdings Co., Ltd. (JASO). The project is expected to be completed in 2014.
Post the completion of the acquisition, the solar project will be named the PSEG El Paso Solar Energy Center and JSI will be in charge of the project. PSEG Solar will sell the output from the facility to El Paso Electric Company (EE) under a 30-year power purchase agreement. The long-tem contract will ensure steady future cash inflow for PSEG Solar, which it can utilize for profitable ventures.
PSEG Solar has a strong business alliance with JSI and acquired solar assets from the latter earlier as well. In Sep 2012, the company acquired a 15-MWdc solar project from JSI for $50 million. The facility is located in Milford, DE.
Newark, NJ-based Public Service Enterprise, through its two important subsidiaries PSEG Power LLC and Public Service Electric and Gas Company, provides utilities in the Northeastern and Mid-Atlantic parts of the U.S.
Globally, demand for renewable energy is gradually rising primarily on the back of growing awareness among the masses about its benefits. Public Service Enterprise is currently focusing on expanding its renewable portfolio through developing facilities and strategic acquisitions.
During the first quarter, Public Service Enterprise’s 4-MW Californian solar project has started operations. In Dec 2013, the company completed its 19.3-MWdc PSEG Badger 1 Solar Farm. On the inorganic expansion front, in Dec 2013, PSEG Solar acquired two utility-scale solar power plants totaling 4.4-MWdc from Canadian Solar Inc. (CSIQ).
Public Service Enterprise maintained a strong liquidity position besides generating a stable operating cash flow. As of Mar 31, 2014, the company had available liquidity of around $4.11 billion, including cash balance of roughly $0.66 billion. In the first three months of 2014, Public Service Enterprise’s operating cash flow was $1.12 billion. A stable financial position supports Public Service Enterprise’s systematic investments in renewable ventures.
Public Service Enterprise currently has a Zacks Rank #3 (Hold).
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