Thursday, August 23, 2012

Exelon and First Solar

In September, 2011, Exelon Corporation acquired Antelope Valley Solar Ranch One, a 230-megawatt (MW) solar photovoltaic (PV) project under development in northern Los Angeles County, Calif., from First Solar, which developed and will build, operate, and maintain the project. Construction has started, with the first portion of the site expected to come online in late 2012 and full operation planned for late 2013.

When fully operational, AV Solar Ranch One will be one of the largest PV solar projects in the world, with approximately 3.8 million solar panels generating enough clean, renewable electricity to power the equivalent of 75,000 average homes per year. The project has a 25-year power purchase agreement (PPA), approved by the California Public Utilities Commission, with Pacific Gas & Electric for the full output of the plant.

Exelon expects the total investment of up to $1.36 billion to be accretive to earnings beginning in 2013 and free cash flow accretive starting in 2013. The project is value accretive, and will have stable earnings and cash flow profiles due to the PPA. Exelon expects to invest up to $713 million in equity in the project through 2013.

The Treasury Department approved a $646 million loan, guaranteed by the U.S. Department of Energy's Loan Programs Office to support project financing for AV Solar Ranch One. Advances under the loan are contingent on the satisfaction of various conditions. No regulatory approvals are needed for Exelon's acquisition of AV Solar Ranch One from First Solar.

The project will deliver economic benefits to the local community and the state of California, including the generation of state and local tax revenues and creation of up to a peak of 400 construction jobs and up to 15 ongoing operations and maintenance positions, with an emphasis on hiring workers from the local area.

When fully operational, AV Solar Ranch One will displace approximately 140,000 metric tons of carbon emissions per year - the equivalent of taking approximately 30,000 cars off the road. Plus, it will generate electricity with no water use, no air emissions and no waste production. Exelon's existing solar assets include Exelon City Solar, the nation's largest urban solar power plant, which is located on the South Side of Chicago and was completed in 2010.

The project will be built on 2,100 acres of fallow farmland near Lancaster, Calif., in the Antelope Valley area of the Western Mojave Desert, approximately 80 miles north of Los Angeles. The transaction expands Exelon's geographic presence into California, an attractive solar market with an ambitious renewable energy policy and some of the best PV resources in the world.

AV Solar Ranch One will employ First Solar's FS Series 3 PV Module and deploy its tracking system on a portion of the facility. The technology will increase electricity output by tilting the solar panels to track the daily path of the sun. The project also will feature innovative inverters with voltage regulation and monitoring technologies, which provide more stable and continuous power, increasing the project's efficiency and reliability. (First Solar)

Exelon Corporation is one of the nation's largest electric utilities with more than $18 billion in annual revenues. Exelon distributes electricity to approximately 5.4 million customers in northern Illinois and southeastern Pennsylvania and natural gas to approximately 490,000 customers in the Philadelphia area. Exelon is headquartered in Chicago and trades on the NYSE under the ticker EXC. First Solar (Nasdaq: FSLR) manufactures solar modules with an advanced semiconductor technology, and is a premier provider of comprehensive photovoltaic (PV) system solutions. The company is delivering an economically viable alternative to fossil-fuel generation today. From raw material sourcing

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