Duke buys Tierra Energy's wind business

Duke Energy (NYSE: DUK) has acquired the wind power development business of Tierra Energy, a wind power development company located in Austin, Texas.

The purchase includes more than 1,000 megawatts of wind assets under development in the Western and Southwestern United States.

Tierra was bought from Energy Investors Funds for an undisclosed amount.

Three of the development projects—a total of approximately 240 megawatts—are located in Texas and Wyoming, and are anticipated to be in commercial operation by the end of next year with additional facilities potentially in operation as early as 2009. The power produced is to be sold through long-term contracts.

The assets become part of Duke Energy Generation Services (DEGS), a Duke subsidiary that focuses on investments in onsite energy, commercial and renewable energy assets across North America.

Six members of Tierra Energy's senior management team are joining DEGS, including David Marks, formerly Tierra Energy president. Marks becomes DEGS' senior vice president, business development, wind energy.

"We see wind power as a potential growth opportunity for DEGS, and we plan to spend approximately $400 million in capital expenditures through 2008 to complete the first three development projects. We would expect to begin seeing earnings from these assets in 2009," said DEGS President, Wouter van Kempen.

Duke currently has purchase agreements for wind generation in Indiana and recently installed solar panels at 10 Indiana schools. The company also recently issued a request for proposal for renewable energy to help meet growing demand in the Carolinas (see Duke Energy issues 2,100MW green power RFP.)

Duke Energy Corp, one of the largest electric power companies in the United States, supplies and delivers energy to approximately 3.9 million U.S. customers.

The company has nearly 37,000 megawatts of electric generating capacity in the Midwest and the Carolinas, and natural gas distribution services in Ohio and Kentucky.