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The Southern California Public Power Authority (SCPPA) - acting on behalf of the Los Angeles Department of Water and Power (LADWP) and the cities of Burbank and Pasadena, Calif. - has signed a 20-year purchase agreement with UPC Wind that will provide Los Angeles residents and businesses with 185 MW of wind energy.

This contract is unique because SCPPA will provide the project financing once a new 200 MW wind farm in Millard County, Utah, is complete, and sign power sales agreements with LADWP and the other participants for the output of the project at SCPPA's cost to retire the debt and pay for the ongoing operating expenses. LADWP, which serves as the project manager, would receive most of the wind energy - 92.5%.

According to LADWP, the 185 MW share of the Milford Wind Corridor Phase 1 project represents enough power to serve approximately 39,000 homes and meet 1.9% of the city's renewable energy goal of 20% by 2010.

Another uncommon aspect of the agreement is that SCPPA will prepay for the energy to be delivered during the 20-year term with proceeds from an upcoming bond sale. By prepaying up to $270 million for a guaranteed amount of energy, due when the plant begins commercial operation (which is expected to be by Dec. 31, 2008), LADWP, Burbank and Pasadena will save at least $42 million compared to the cost of constructing and financing the plant themselves.

The agreement is expected to go to the LADWP board of commissioners and the Los Angeles City Council for approval in the next 90 days.

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