GE Energy Financial Services, a unit of GE, and Bankers Commercial Corporation, a unit of UnionBanCal Corporation, announced January 10 that they have purchased the first wind farm to start operations in one of the largest wind energy projects in the United States.
GE Energy Financial Services and Bankers Commercial Corporation acquired the 150-megawatt Alta Wind I wind farm in Tehachapi, in Kern County, California, and are leasing it back to its developer, operator and manager, Terra-Gen Power LLC. The wind farm, using 100 GE 1.5-megawatt SLE turbines, was completed in the fourth quarter of last year. GE Energy Financial Services – a major global investor in multiple energy generation and distribution projects and companies – and Bankers Commercial Corporation each own 50 percent of the wind farm. Funds from the sale will be used to pay off construction loans Terra-Gen entered into for the project last March. Financial details were not disclosed.
The Alta Wind I farm is the first phase of the Alta Wind Energy Center, a planned 3,000-megawatt project. The first 1,550 megawatts of the center, including this phase, is contracted to Southern California Edison. When complete, the center will be able to provide electricity for 1.3 million California homes. Terra-Gen estimates the center will create more than 3,000 domestic manufacturing, construction, operations and maintenance jobs, and will contribute more than $1.2 billion to Kern County’s economy. According to Terra-Gen, the center is expected to cut carbon dioxide emissions by more than 52 million metric tons over the next decade, equivalent to taking 890,000 cars off the road. The wind farms will help California meet its goal of ensuring that by 2020, 33 percent of the power it consumes comes from renewable sources. Alta Wind I is the first project to connect with Southern California Edison’s Tehachapi Renewable Transmission Project, the first major transmission project in California to be constructed specifically for accessing a renewable-rich resource area. When completed, the Tehachapi Renewable Transmission Project will consist of more than 250 miles of new and upgraded high-voltage transmission infrastructure.
“This transaction, our first using a lease for a wind farm, demonstrates our ability to tailor structures to meet our customers’ needs, in this case enabling Terra-Gen to free up cash while enabling it to continue to operate and manage the project,” said Kevin Walsh, a managing director and leader of power and renewable energy at GE Energy Financial Services. “In addition, it builds on our recently achieved target of accumulating $6 billion in renewable energy investments by the end of last year, and it reinforces our commitment to ecomagination, GE’s program to help its customers meet their environmental challenges while expanding its own portfolio of cleaner energy products.”
Lance Markowitz, president of Bankers Commercial Corporation, said: “We look forward to the long-term success of Alta Wind 1, one of the premier wind projects in the United States. The quality of Alta 1 and the expertise required to develop the greater Alta Wind Center are a credit to the Terra-Gen team. This investment demonstrates how we apply our structuring expertise and industry knowledge to attractive financing solutions for the renewable energy market. We now have committed investments in projects aggregating more than 2,000 megawatts.”
John O'Connor, chief financial officer of Terra-Gen, said: “The 150-megawatt Alta Wind I project represents the important first phase of the Alta Wind Energy Center, which when complete is expected to comprise approximately 3,000 megawatts. This transaction will allow Terra-Gen to free up capital and maintain operating control of Alta I.”
The project is eligible for a US Treasury grant created under the American Recovery and Reinvestment Act. It allows renewable energy project owners to access a cash grant in lieu of tax credits.