Duke Energy Renewables Sells 50 Percent Stake In Wind Farms To Sumitomo
In a move to conserve its capital, Duke Energy Renewables (DUK :NYSE) announced today that it is selling a 50 percent stake in two of its wind farms. Tokyo-based Sumitomo Corporation of America (SCOA) will be co-owners of the 131 megawatt (MW) Cimarron II Windpower Project in Gray County, Kansas and the 168 MW Ironwood Windpower Project in Ford County, Kansas.
The risk for Sumitomo is extremely low as both wind farms currently have 20-year power purchase agreements. Kansas City Light & Power is purchasing all of the power generated and the renewable energy credits (REC) associated with Cimarron II and Westar Energy will buy all of the power and associated RECs with Ironwood.
The deal between Duke Renewable Energy and Sumitomo is expected to close in April and both are exploring opportunities to finance construction and operating expenses for both projects.
With natural gas futures hitting all times lows, utility companies like Duke will probably continue to explore ways to conserve their capital and diversify their investments.
Capital conversation helped investors respond positively to Duke’s announcement today despite the continued decline in natural gas futures. Shares of Duke finished up 0.43 percent as the Dow closed 0.33 percent lower.