PG&E looking to sell power plants to investment firm to pay for wildfire mitigation efforts

The utility could strike a deal in the $2 billion to $3 billion range to help cover a number of costs related to burying power lines underground.

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.”

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