That’s great, but how about more of those hundreds of construction jobs
and operation money right back here to Georgia?
But since you’re buying solar power,
why do you need

to buy a pipeline company?
How about

helping us against Sabal Trail invading us from Texas
through Southern Company territory?

Southern Company PR, 30 November 2015,

Southern Company subsidiary acquires first solar project in Texas,

Southern Company subsidiary Southern Power today announced the
acquisition of a controlling interest in the 157-megawatt (MW)
Roserock solar facility—the company’s first solar project in
Texas—from Recurrent Energy, one of North America’s largest
solar developers. The latest addition to one of America’s largest
renewable portfolios, the facility is being developed by Recurrent
Energy, a subsidiary of Canadian Solar Inc., which will retain the
remaining interest in the project.

“Southern Power’s first solar project in Texas helps further the
company’s robust wholesale business and further expands our solar
footprint,” said Southern Power President and CEO Oscar C. Harper.
“With strategic acquisitions nationally, the continued development
of industry-leading assets aligns with our company’s low-risk
strategy and enhances one of America’s largest renewable
portfolios.”

Representing Southern Power and Recurrent Energy’s second
partnership arrangement, the project, currently under construction,
is expected to enter commercial operation in the fourth quarter of
2016.

“Cost-competitive, large-scale solar power has enormous potential in
Texas,” said Canadian Solar Inc. Chairman and CEO Shawn Qu. “The
Roserock project and Recurrent Energy’s solar project pipeline in
the state are each important steps forward as Texas approaches the
more than 13 gigawatts (GW) of solar that has been forecasted across
the state.”

Texas will end up with a lot more solar power than that, but this is a good
step forward.

This seems a bit odd:

The electricity and associated renewable energy credits generated by
the facility will be sold under a 20-year power purchase agreement
with Austin Energy.

Is Southern Company realizing it has the deep pockets to build solar plants
and sell the power for profit to customers?
That’s a good thing, if so.

Look at the price AustinEnergy is paying.
Cynthia Shahan, CleanTechnica, 21 May 2014,

Austin’s Super Cheap Solar Agreement (5¢/kWh) Goes To Recurrent Energy, Not SunEdison,

It was announced in March that Austin Energy would likely be buying
electricity from a SunEdison solar power plant for less than 5¢/kWh
under a 25-year power purchase agreement (PPA). If you’re not
familiar with electricity prices, that’s really low. The final deal
was just completed last week but with an unanticipated move —
Austin Energy closed negotiations with Recurrent Energy. The
Recurrent Energy press release explains that it received “an
award from Austin Energy for 150 MW of solar capacity in West Texas.
The power will be delivered to Austin Energy pursuant to a 20-year
Power Purchase Agreement.”

Colquitt EMC pays me 4.5¢/kWh for solar electricity I generate,
saying that’s their avoided cost, meaning that’s that Colquitt claims
they would have to pay to generate the same power through other means,
most likely via burning natural gas.
So 5¢/kWh is down in that range.

Larry Weis, Austin’s Energy General Manager, and Arno Harris,
Recurrent Energy’s Chairman and CEO, further explain:

“With our largest utility scale solar award, we are taking an
important step towards meeting our goal of acquiring 200 MW of solar
energy by 2020,” said Larry Weis, Austin Energy General
Manager. “Solar power has reached a price that is competitive
in the ERCOT market, allowing us to further diversify our energy
portfolio with renewable resources.”

“The Texas market represents one of the most exciting
opportunities for the solar industry,” said Arno Harris,
Chairman and CEO of Recurrent Energy. “The industry’s growing
scale and decreasing costs are enabling us to successfully compete
against conventional energy in deregulated markets like ERCOT. This
award from Austin Energy further proves solar’s ability to move into
the mainstream energy mix.”

The CleanTechnica article adds that Austin Energy, after initially looking for a 50 MW solar power plant,
went with 150 MW for a reason.
Price could be part of that reason; the article says the previous low price
solar plant record was 5.8¢/kWh.
Solar prices are falling so fast there’s no reason to build anything else
(except wind for balancing).

Meanwhile, also in Pecos County, Texas,
First Solar (FSLR) has the existing 22MW Barilla solar farm which it is expanding to 50 MW,
and

the Pecos County Commission heard 30 October 2014
that FSLR plans to build another one near Girvin for 100 MW.
That Girvin FSLR plant is near the Roserock CSIQ one.

And apparently even Texas has realized that solar power is a better deal even than wind power, and both together are better yet.
Bob Seal,
Fort Stockton Pioneer, 30 October 2014,

County approves new solar site, eyes golf fees,

During his presentation to the court, Doug May, Executive Director
of the Fort Stockton Economic Development Corporation, which
contracts with the county, discussed a report by Texas Comptroller
of Public Accounts Susan Combs. May said that the report did not
include the photovoltaic industry in its recommendation that local
governments no longer offer tax abatements to wind farm
developments.

Combs’ rationale for that recommendation was that wind power
generation is intermittent and that the renewable energy industry
needs to concentrate on power storage technology “so that it
can provide reserve capacity available to the grid during peak
demand.”

Photovoltaic plants generate peak power at about the same time as
the peak demand for electricity, that is, on sunny summertime
afternoons.

The Comptroller’s State Energy Conservation Office web site states,
“Because solar and wind generation in west Texas generally
occur at different times (solar during the day, wind generation at
night), combining solar power plants with wind farms has the
potential to result in fuller utilization of transmission capacity
and improved matching of generation to utility loading, including
peak loading conditions.”

Included in some discussion of subsidies (wind and solar get far less
than fossil fuels), there’s this gem:

According to the Comptroller web site, Texas state high-cost natural
gas severance tax exemptions in 2006 alone totaled $1.1 billion.

And of course there’s a reason why Southern Power might find Texas
an especially good place to build solar power and sell the electricity.
Texas has its own electrical grid, with no need to mess with FERC:

Solar facilities here feed their power into the Electricity
Reliability Council of Texas (ERCOT) grid. Pecos County lies in the
western — sunny — part of that grid. The ERCOT grid
supplies power to about 90 percent of Texas’ electric load. All the
state’s major urban areas benefit from the renewable energy produced
here.

Not being a financial expert (although I do own stock in both Southern Company and CSIQ), I have to wonder about this additional press release from
Recurrent Energy today,

CANADIAN SOLAR SUBSIDIARY RECURRENT ENERGY SECURES DEBT FINANCING FOR 157 MW TEXAS SOLAR PROJECT,

GUELPH, Ontario, Canada, November 30, 2015 — Canadian Solar
Inc. (the “Company”, or “Canadian Solar”)
(NASDAQ: CSIQ), one of the world’s largest solar power companies,
today announced that its wholly owned subsidiary, Recurrent Energy,
one of North America’s largest solar project developers, has closed
on a combined construction and term debt facility, with a syndicate
of five banks, for the 157.5 megawatt (MW)ac/ 212 MWp Roserock solar
project in Texas. The project, developed by Recurrent Energy, is
currently under construction. The electricity generated by the
facility will be delivered to Austin Energy pursuant to a 20-year
Power Purchase Agreement.

With KeyBank as the Coordinating Lead Arranger, five banks,
including Rabobank, Santander, NORD/LB, and CIT will provide
project-level construction debt, LC facilities and a back-leveraged
term facility, totaling approximately $275 million.

“This top tier group of financiers’ attraction to the Roserock
solar project is a clear indication that large-scale solar can
compete and succeed in competitive energy markets like Texas,”
said Dr. Shawn Qu, Chairman and Chief Executive Officer of Canadian
Solar. “This agreement is a testament to our broader team’s
ability to deliver bankable solar projects with strong
fundamentals.”

“This is our fourth transaction with Recurrent Energy in 2015.
We are proud to continue our working relationship and view Roserock
as a strong investment in the fast growing Texas solar
market,” said Andrew Redinger, Managing Director and Head of
KeyBanc Capital Markets Utilities, Power & Renewables Group.

So Southern Power let CSIQ do all the financial organizing and
then bought into a lucrative project after it was already financed?
Or did Southern Power have some role in the financing that’s not
spelled out in these obviously coordinated press releases on the same day?

Ah, Recurrent’s other PR of today sheds a little light,

CANADIAN SOLAR SUBSIDIARY RECURRENT ENERGY PARTNERS IN 157 MW TEXAS SOLAR PROJECT,

GUELPH, Ontario, Canada, November 30, 2015 — Canadian Solar
Inc. (the “Company”, or “Canadian Solar”)
(NASDAQ: CSIQ), one of the world’s largest solar power companies,
today announced that its wholly owned subsidiary, Recurrent Energy,
one of North America’s largest solar project developers, signed a
partnership agreement with Southern Power, a subsidiary of Southern
Company. The agreement gives Southern Power a controlling interest
in the Roserock solar photovoltaic (PV) project in Texas. The 157.5
megawatt (MW)ac/212 MWp project, developed by Recurrent Energy, is
now under construction in West Texas.

Under the terms of the agreement, Southern Power will acquire 51% of
the equity in the solar generation project. Canadian Solar will
retain 49% ownership and contribute its share of the investment
required to complete the construction of the project, which the
Company has financed through a construction and back-leveraged loan
facility with a syndicate of five banks.

So it looks like Recurrent’s consortium of five banks provide 49% of the
investment, and Southern Power provides 51%.
If so, that must mean Southern Company is finding solar power lucrative
enough to invest in even when the resulting electricity does not go to Southern Company customers.

And Southern Company’s financing power apparently can make projects like this happen.
Christian Roselund, PV Magazine, 30 November 3015,

Work begins on 212 MW solar project in West Texas,

As a key component to all of this, Georgia’s Southern Company has
acquired a 51% stake in the 157 MW-AC, 212 MW-DC project from
developer Recurrent Energy and parent company Canadian Solar, which
retain 49% ownership.

The acquisition of this equity stake may have been the final piece
for the others to fall into place, including financing. A syndicate
of five banks will supply the project with roughly $275 million in
project-level construction debt, an LC facility and a back-leveraged
term facility.

Recurrent Energy notes that while construction of a substation for
the project began in September, securing financing was the signal to
begin major works. “We close financing on a project and then
move forward,” Recurrent Energy Spokesperson Cate Powers told
pv magazine. “For Recurrent, that’s a pretty common
cadence.”

That article also says Roserock is the biggest solar plant in Texas so far,
and that 5¢/kWh is a record anywhere.

Plus this irony that Roserock is located
“atop one of the largest oil fields in the United States.”

Solar power is now so cheap it’s being deployed on top of oil fields.

PS: Here’s RE Roserock LLC’s
Texas PUC 150 MW Solar Power Generator registration.

-jsq