Pacific Gas and Electric Co. has contracted with Iberdrola Renewables, Inc., the U.S. arm of the world's largest provider of wind power, to purchase and operate a major wind generating plant to be built in Southern California to serve the utility's electric customers.

The proposed Manzana Wind Project, with a power capacity of up to 246 MW, would be the first wind project owned by PG&E. It follows a proposal by the utility in February 2009 to develop and own 250 MW of solar photovoltaic power.

The Manzana project would be located on about 7000 acres in the Tehachapi region of Eastern Kern County, a site with favorable wind resources. If approved by the California Public Utilities Commission, the project could begin producing power by December 2011.

With a projected annual output of up to 670 GWh per year, equal to the energy consumed by about 100,000 average homes, the Manzana project would contribute significantly to PG&E's efforts to meet California's Renewable Portfolio Standard.

"This agreement supports PG&E's comprehensive strategy to meet our customers' future power needs with clean energy solutions," said Fong Wan, PG&E's senior vice president for energy procurement.

The total capital cost of the Manzana project will be just over $900 million, which includes payments to Iberdrola Renewables to develop and build the facility, along with other costs that PG&E will incur. PG&E will make progress payments as significant milestones are met.

Rates for customers who receive electric generation, transmission and distribution services from the utility would increase 1.1 percent in 2012 compared to 2009. The average residential customer, who consumes 550 kWh per month, would pay $0.25 more per month--from $74.13 to $74.38.