SoCal Energy signs largest wind power deal

On Thursday, Southern California Energy Co said that it had reached an agreement to buy power from a planned 50 square mile wind farm being planned for Tehachapi, California by a subsidiary of Australia’s Alico Financial Group, Inc and Mojave based wind farm developer Oak Creek Energy Systems, Inc. The 20 year contract calls for SoCalEnergy to purchase 1,500 megawatts of power from the farm, which is enough to power about 1 million typical homes. The wind farm is expected to provide 2,500 megawatts and the first turbines for this contract are scheduled to go online in 2010, with additional capacity to meet the full 1,500 megawatts of the agreement coming later. Currently, the nation’s largest wind farm is the 735 megawatt Horse Hollow project build by FPL Group Inc near Abilene, TX.

`”This is really a monster,” said Stuart Solsky, a partner with the New York-based law firm Baker Botts LP, which advises companies on wind power project development and financing. “I have seen projects of 200 or 300 megawatts, and they are considered to be huge.”’

“This is a really good deal,” said Matt Freedman, staff attorney of the Utility Reform Network, a consumer group based in San Francisco. “It’s huge … and we’re happy about it.”

One roadblock may be the need to construct transmission lines to bring the power to market. Although the Tehachapi area, a breezy, remote site in Kern County, already hosts several small wind power projects, new transmission lines will need to be built to accomodate the new farm.

“The timeline — and the fate of the entire project — depends on whether and when the utilities can build a transmission line to carry the new wind power from the turbines to the state’s power grid, said Freedman of the Bay Area consumer group.

Edison and other utilities are working with state regulators on plans to construct the necessary transmission line. But the price tag is $1.8 billion, and the approval process for such projects can be contentious and lengthy.” So stay tuned.

Here are several links to news articles on this announcement.

LA Times
Bloomberg
MSN
The Desert Sun (Palm Springs, CA)

and some comments on the transmission line issue at GreeenWombat

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