January.25.2012
San Francisco - In a first-of-its-kind transaction, a San Francisco and Washington, D.C., team recently advised San Diego Gas & Electric (SDG&E) in its $285 million investment in the Rim Rock wind power project in northern Montana. This is the first time that a California regulated utility has invested in a renewable energy project in order to use the tax benefits of ownership to reduce the price it pays for energy.
SDG&E also entered into a 20-year “green attributes” power purchase agreement with Rim Rock, under which SDG&E will buy the environmental attributes of the electricity that is generated. This transaction will contribute toward SDG&E's obligation under the state “renewable energy portfolio standard” to purchase, by 2020, at least 33 percent of its electricity from renewable sources such as wind, solar and geothermal projects.
"The Rim Rock closing was the result of a tremendous team effort within Orrick," said San Francisco global finance partner Mark Weitzel. "Orrick brought a full spectrum of services to SDG&E on this investment, including project finance, M&A, tax, real estate, energy regulation and environmental and permitting."
On the same day, SDG&E’s partner in Rim Rock, NaturEner – who developed the 189 MW wind power project – closed construction financing for the project with Morgan Stanley. The project is expected to be complete by the end of this year and will employ 126 Acciona wind turbines, each with a capacity of 1.5 MW.