Pacific Gas & Electric Co. (PCG) is reportedly close to finalizing a deal to sell a portion of its power plant fleet to KKR & Co. Inc. (KKR). This move is intended to generate funds for infrastructure upgrades and mitigate wildfire risks associated with its power lines.
According to a Wall Street Journal report, PG&E is seeking regulatory approval to transfer its hydroelectric system, along with some natural gas, solar, and battery facilities, into a newly formed subsidiary called Pacific Generation. Subsequently, PG&E plans to sell a 49.9% stake in this subsidiary to KKR.
The assets under consideration are valued at approximately $3.5 billion. Analysts estimate that the potential deal could be worth between $2 billion and $3 billion.
However, the California Public Utilities Commission (CPUC) must approve the sale. The CPUC has expressed concerns that allowing investors to hold a significant stake in PG&E's generation portfolio could pose risks. According to the report, the agency has proposed blocking the sale, but a final decision has not yet been made.
As of the time of publication on Tuesday, Pacific Gas & Electric shares were up 0.29% after-hours, trading at $17.11.