PG&E Signs 60-MW Solar-Power Contract With REC Joint Venture

PG&E Corp. (PCG) said Friday it has signed a 60-megawatt solar-power purchase agreement with a joint venture owned by Renewable Energy Corp. ASA (REC.OS) and privately held Summit Power Group Inc.

PG&E unit Pacific Gas & Electric Co. has asked state regulators for permission to execute the contract and recover the costs from customers.

The solar farm will be built by North Star Solar, owned by solar-panel maker REC, of Norway, and renewable energy developer Summit Power, of Bainbridge, Wash. The facility is planned for Mendota, Calif., about 40 miles west of Fresno, and will use solar panels made by REC, according to documents PG&E filed with the California Public Utilities Commission. PG&E said it expects the plant to be operational by late June 2013.

While prices for such contracts are kept confidential, PG&E said the power price in the contract exceeds the CPUC's benchmark price of 10.2 cents a kilowatt-hour, plus additional fees for power generated during high-demand daytime hours.

State rules require PG&E and other California utilities to use solar, wind or other renewable sources to generate one-third of the power they sell by 2020. The rules are part of the state's 2006 plan to combat climate change.

-By Cassandra Sweet, Dow Jones Newswires; 415-439-6468; [e-mail]