Pacific Gas & Electric on Tuesday announced plans to sell a minority stake in its power generation business. This is part of its strategy to reduce electricity rates, continue wildfire prevention and further develop clean energy.
The exclusive deal with global investment firm KKR is part of PG&E’s plan to transfer its non-nuclear power generation to a newly formed subsidiary, Pacific Generation. The subsidiary and KKR investment proposals are subject to approval by the California Public Utilities Commission and the Federal Energy Regulatory Commission.
“As we continue to expand our systems, we must accelerate the infrastructure investments that will enable us to provide our customers with safe, sustainable, reliable and affordable energy,” Carolyn Burke, executive vice president and chief financial officer at PG&E, said in a statement Opinion.
KKR operates a global infrastructure business with $59 billion in assets under management and expertise in the utilities and renewable energy industries. PG&E said in a statement that the investment firm’s access to capital gives it the ability to take a long-term approach to its strategies.
PG&E had been reshaping its operations and image since a series of wildfires led the utility – the largest in California – to seek bankruptcy protection in 2019 after accumulating tens of billions of dollars in liabilities. PG&E has invested in wildfire prevention as well as clean energy technologies such as large-scale batteries, work that has contributed to higher customer rates.
The proposed deal is expected to reduce customer fees by more than $100 million over the next 20 years, assuming Pacific Generation has a higher credit rating and lower debt costs than PG&E, the utility said. It said the potential investment would also improve PG&E’s credit profile, which would benefit customers.
Raj Agrawal, partner and global head of infrastructure at KKR, said in a statement: “With our long-standing roots in California, our strong commitment to sustainable investing and decarbonization, and our long-term view of asset management, we feel well positioned.” Support Pacific generation in this new chapter. Should this transaction move forward, we are confident we can bring benefits to these facilities, the employees who operate them and the people of California.”
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2024-05-01 00:14:03
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