Pacific Gas & Electric Co. on Tuesday announced plans to sell a minority stake in its power generation business as part of a strategy to lower electricity prices, continue to prevent wildfires and further develop clean energy.
The exclusive agreement with global investment firm KKR is part of PG&E's plan to transfer its non-nuclear power generation operations to a newly formed subsidiary, Pacific Generation. The proposed subsidiary and KKR stock will require approval from the California Public Utilities Commission and the Federal Energy Regulatory Commission.
“As we continue to build out our systems, we are committed to providing safe, sustainable, reliable, and affordable energy to our customers,” said Carolyn Burke, PG&E's executive vice president and chief financial officer. We need to accelerate infrastructure investment.” statement.
KKR operates a global infrastructure business with $59 billion in assets under management, with expertise in the utilities and renewable energy industries. PG&E said in a statement that the investment company's access to capital allows it to take a long-term approach to its strategy.
PG&E has been rebuilding its business and image since California's largest power company filed for bankruptcy protection in 2019, racked up by tens of billions of dollars in debt from a series of wildfires. PG&E is investing in clean energy technologies such as wildfire prevention and utility-scale batteries, and those efforts are helping to improve customer rates.
The proposed transaction would reduce customer rates by more than $100 million over the next 20 years, assuming Pacific Generation has a higher credit rating than PG&E and lower debt costs, the utility said. He also said the potential investment would improve PG&E's creditworthiness and benefit customers.
Raj Agrawal, partner and global head of infrastructure at KKR, said in a statement: “With our long roots in California, our deep commitment to sustainable investing and decarbonization, and our long-term view of asset management, we feel we are well-positioned for this new chapter.” Please support Generation. We believe this transaction, if it moves forward, will benefit these facilities, the employees who operate them, and the people of California. ”