Pinnacle West Adds More Solar - Analyst Blog

Electric service provider Pinnacle West Capital Corp. (PNW) announced that its unit Arizona Public Service Co. has entered into an agreement with SunEdison, a subsidiary of MEMC Electronic Materials Inc. (WFR), for development of a green power plant in Prescott, Arizona.

SunEdison will own and operate a photovoltaic solar power plant and produce 10 megawatt (MW) of green power, which will be entirely purchased by Pinnacle West's unit. The plant is expected to generate more than 25 million kilowatt-hours (kWh) of clean energy in its first year of operation and approximately 653 million kWh over 30 years.

This new investment marks the beginning of the third green power project between these two companies. SunEdison and Arizona Public Service Co. recently announced plans for two more solar power projects in Arizona. The projects are for a 20 MW facility in Chino Valley and another 17 MW facility in Hyder. These projects will be developed by SunEdison while Arizona Public Service Co. will own them after completion.

The Pinnacle West unit has been investing in the generation of renewable energy in the state of Arizona and the current investment is a continuation of that trend. The company had already invested in a 194-kWh system at Embry Riddle Aeronautical University, a small system on the roof of Prescott College and a 3.6 MW plant near the Prescott Regional Airport.

During the third quarter earnings call Pinnacle West retained its earnings per share guidance range of $2.95 to $3.10 for 2010. The Zacks Consensus Estimates for fourth quarter fiscal 2010, fiscal year 2010 and fiscal year 2011 are 3 cents per share, $3.03 per share and $3.07 per share1, respectively.

SunEdison is involved in the development, installation and operation of power plants based on photovoltaic technologies for its global customers. Based in St. Peters, Missouri, MEMC Electronic Materials Inc. is involved in the manufacture and sale of wafers and related intermediate products to the semiconductor and solar industries.

Pinnacle West Capital Corp. currently retains a Zacks #3 Rank (short-term Hold rating). We maintain our long-tern Neutral rating on the stock.

Arizona Public Service Co., the principal subsidiary of Pinnacle West Capital, serves more than 1.1 million customers in 11 of the state's 15 counties. Based in Phoenix, Arizona, Pinnacle West Capital Corp. provides retail and wholesale electric services in the State of Arizona.

 
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