|Published:||Sep 30, 2012 6:14 PM EDT|
|Updated:||Oct 01, 2012 6:31 AM EDT|
MidAmerican Energy has agreed to buy two wind projects under construction about 120 miles north of Los Angeles from the wind developer Terra-Gen Power.
Terms of the sale were not disclosed.
The two projects, totaling 300 megawatts of peak electric capacity, will be part of the larger Alta Wind Energy Center located in Tehachapi, Calif., much of which is already in operation.
MidAmerican, a subsidiary of Berkshire Hathaway Inc., said Sunday it will sell the electricity to Southern California Edison under long-term power purchase agreements.
In typical conditions, the projects will produce enough electricity to meet the demand of about 80,000 homes.
MidAmerican Energy Holdings Co. serves electric customers in Iowa, Illinois, South Dakota and Nebraska and it also controls a subsidiary called MidAmerican Renewables that operates wind, solar, geothermal and hydro-electric plants and sells that power to other utilities. Terra-Gen Power is a private company based in New York City.
Wind developers are scrambling to get wind projects underway this year in order to qualify for a federal wind subsidy that is slated to expire at the end of the year. President Barack Obama wants Congress to extend the subsidy but his Republican challenger Mitt Romney and some members of Congress want to allow it to lapse.
Wind power has struggled to compete in recent years because low natural gas prices have lowered wholesale electric power prices, reducing the amount of revenue a wind turbine can generate. Without the federal subsidy, construction of wind projects is expected to slow dramatically, at least until power prices begin to rise.
The wind subsidy, known as the production tax credit, is worth $22 for every megawatt-hour of electricity generated by a wind farm during its first 10 years of operation. For MidAmerican's new wind farms, that would amount to about $19 million per year, or $190 million in total.