Introduction
Whether to walk, ride or drive; to continue to water your lawn or switch to native plants; how high or low to set your thermostat—every day, each one of us makes choices at home and at work that affect the environment. For an energy company, these choices are particularly impactful.
At Sempra Energy®, we are committed to operating our companies in a way that is respectful of the environment. In this section we discuss our position on climate change, the impacts we have on the environment and how we are employing a low-carbon approach to meet the needs of our 31 million customers.
Sempra Energy’s business units encountered a number of challenges in this area in 2010. One example comes from our SDG&E® business unit. As SDG&E worked to increase the amount of renewable energy it procures, it found that many renewable energy projects faced tight credit markets, lengthy project-permitting processes and limited access to transmission capacity. After analyzing the track record of renewable power purchase agreements over the past few years, we concluded that the majority of projects started deliveries later than originally anticipated – and many projects never came online at all.
As a responsible energy company, it is our continuing goal to manage our renewable portfolio to comply with California’s Renewable Portfolio Standard. We are also working to find innovative ways to support the development of renewable energy. See the story below to learn about one way that we did this in 2010.
Innovation in Renewable Financing
With scarce resources available to finance renewable projects, many developers have been unable to complete their projects on time, if at all. SDG&E found an innovative solution. Through the first regulated tax-equity investment structure in the nation, SDG&E is supporting the development of the 189-megawatt Rim Rock wind project in Montana. This unique funding proposal, approved by the California Public Utilities Commission in July 2011, calls for SDG&E to invest about $250 million in the project on behalf of its customers, while Sempra Energy shareholders and the project developer will invest the remaining 35 percent of the project cost. This financing structure represents a real benefit to customers as it could save $75 million to $100 million over the life of the project, compared to the cost using traditional financing.
Did You Know?
California’s Renewable Portfolio Standard requires that 20 percent of the retail electricity sold by California utilities come from renewable sources by 2010. In April 2011, California’s governor expanded the standard when he signed a law requiring all energy services providers, including utilities, to obtain an average of 20 percent of their power from renewable sources from 2011–2013, 25 percent in 2016 and 33 percent in 2020.