A Southern Co. (NYSE: SO) subsidiary, Southern Power, said March 31 that it has agreed to buy the 299-MW Kay Wind Project in Oklahoma from Apex Clean Energy.
The acquisition is expected to close in late 2015 upon successful completion of the project. The proposed sale has already been approved by the Federal Energy Regulatory Commission.
“Through the acquisition of the Kay Wind project – the Southern Company system’s first wind facility and largest renewable energy project to date – we are further diversifying our generation portfolio by expanding to a region with abundant wind resources,” Southern Chairman, President and CEO Thomas Fanning said.
The facility is being built and will be operated and maintained by Apex Clean Energy. Blattner Energy has built 12 facilities in Oklahoma and will serve as the engineering, procurement and construction contractor. The plant is expected to achieve commercial operation in the fourth quarter.
The Virginia-based Apex said on its website that it has also reached a financial close financial close of a $397m construction loan.
The electricity and associated renewable energy credits (RECs) generated by the facility will be sold under 20-year power purchase agreements with Westar Energy (NYSE: WR) in Kansas and Grand River Dam Authority (GRDA) in Oklahoma. Westar has contracted for approximately 199 MW and GRDA has contracted for approximately 100 MW. Both companies will have the option to either keep or sell the RECs.
With the addition of the Kay Wind project, Southern Power will own more than 970 MW of renewable energy generating capacity that is either already in operation or under development.
In addition, Siemens said that it will supply 130 wind turbines, and related services, for the Kay Wind project in Kay County, Okla. A long-term service and maintenance agreement was also signed for the project and includes Siemens’ remote monitoring and diagnostic services, which offer a proactive approach to service and maintenance to help bolster the performance of the turbines during their lifetime.