PG&E exits $900million Iberdrola deal

UNITED STATES: PG&E, a major utility based in San Francisco, has pulled its proposal to buy a 246MW wind project from Iberdrola Renewables.

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The utility and Iberdrola ended the $900 million agreement to buy the Manzana project, in southern California, just weeks after an administrative law judge recommended state regulators reject the proposal.

PG&E needed regulatory approval for the plan because its costs for the purchase and development would have been recovered from rate-payers, or electricity consumers.

In the US, utilities are increasing developing and owning wind projects.

The project is "not cost-competitive and poses unacceptable risks to ratepayers," said the law judge, in an opinion issued in December.

PG&E had agreed to buy the project in early 2009. It would have been the first owned and operated by the utility.

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