San Diego Gas & Electric has entered into a 20-year contract for up to 156 megawatts (MW) of renewable power supplied from the first phase of Sempra Generation's Energia Sierra Juarez wind project in Baja California, Mexico.

Both SDG&E and Sempra Generation are subsidiaries of Sempra Energy. SDG&E selected Energia Sierra Juarez as part of the utility's 2009 competitive solicitation for renewable resources. The project was compared to other competitive bids, and the process was overseen by an independent evaluator, as required by the California Public Utilities Commission (CPUC). The contract is subject to approval by the CPUC and Federal Energy Regulatory Commission.

Construction on Energia Sierra Juarez 1, located about 70 miles east of San Diego and just south of the U.S.-Mexico border, is expected to begin in 2012. When completed in 2013, the facility will be capable of producing enough clean electricity to power about 65,000 average homes.

"This project will provide a significant amount of renewable wind power to SDG&E customers in the San Diego area and is an example of the types of renewable resources that have been identified in this region," said Matt Burkhart, vice president of electric and fuel procurement for SDG&E. "This contract not only reaffirms our commitment to add regional renewable energy to our portfolio, it gets SDG&E another step closer to reaching the state's renewable energy goals."

Last week, SDG&E announced separate renewable energy contracts for a combined total of 80 MW of solar energy in San Diego County. Including those agreements and this latest contract with Sempra Generation, the utility has signed a total of 12 new contracts in the past 12 months, adding to its resource mix more than 1,000 MW of clean, renewable energy to be generated in Southern California.

Energia Sierra Juarez has been under development by Sempra Generation since 2007 and could produce up to 1,200 MW of wind power at full build-out.

"With this contract, we can begin to unlock one of the largest remaining wind resources on the west coast and support California's efforts to increase the use of alternative sources of energy," said Jeffrey W. Martin, president and chief executive officer of Sempra Generation. "We are excited by the opportunity to generate this new source of renewable power for homes and businesses in the San Diego region. Sempra Generation's employees live and work here, so we look forward to doing our part to create a cleaner and more sustainable energy future for our community."

Sempra Generation also announced that it reached preliminary agreement last year on the framework for the sale of a 50-percent partnership interest in Energia Sierra Juarez to BP Wind Energy. The companies now are working on a joint development agreement for the wind project.

Sempra Generation and BP Wind Energy have existing joint-venture partnerships for two wind farms in the U.S., including the 200-MW Fowler Ridge II wind farm in Benton County, Ind., which went into commercial operation in 2009, and the Cedar Creek II wind farm, a 250-MW installation located northeast of Fort Collins, Colo., which is expected to be in commercial operation by mid-2011.

Energia Sierra Juarez will connect to the existing California electric grid at SDG&E's proposed ECO substation in eastern San Diego County via a new cross-border transmission tie-line.