Pacific Gas and Electric is reportedly close to striking a deal with investment firm KKR to sell a stake in its power plants to fund the necessary work to prevent power lines from starting wildfires.
According to a report from the Wall Street Journal, a potential sale could be in the range of $2 to $3 billion.
The big picture: PG&E requested to move its hydroelectric system and natural gas, solar and battery facilities into a new subsidiary called Pacific Generation in 2022.
- But last month an administrative law judge recommended the California Public Utilities Commission reject the formation of the new stand-alone entity.
- Per the deal, PG&E would sell 49.9 percent of Pacific Generation to KKR.
- The CPUC has earlier said that it could block the sale due to concerns about how Pacific Generation will operate.
The backstory: The utility filed for chapter 11 bankruptcy in 2019 with $30 million in liability costs from major wildfires that killed over 100 people.
- PG&E needs money to pay for the wildfire mitigation work, which could total $62 billion by 2028.
- The 2019 bankruptcy deal allows the utility to raise debt and equity.
What they’re saying: “We believe an investment from KKR would immediately enhance our financial position as we continue our pursuit of a clean energy future,” said PG&E CFO Carolyn Burke in a statement. “As we continue to build our systems, we must accelerate the infrastructure investments that will enable us to provide our customers with safe, sustainable, reliable and affordable energy.”
