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PSEG Enters Agreement To Sell PSEG Fossil Generating Portfolio, Buyer Named
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Public Service Enterprise Group (PSEG) has entered into an agreement to sell its 6,750-megawatt fossil generating portfolio to newly formed subsidiaries of ArcLight Energy Partners Fund VII, L.P., a fund controlled by ArcLight Capital Partners, LLC for aggregate consideration of approximately $1.92 billion, subject to customary adjustments
The transaction is expected to be completed late in the fourth quarter of 2021 or the first quarter of 2022.
"A year ago, we announced the strategic review of PSEG's non-nuclear generating assets in line with our long-term focus on regulated utility growth, improving our business mix and enhancing an already compelling environmental, social and governance profile," PSEG Chairman, President and CEO Ralph Izzo said. "With today's agreement, which is the result of a robust sale process, PSEG is on track to realize a more predictable earnings profile. Further, this transaction continues our evolution toward a clean energy infrastructure-focused company that will enable our increasingly low-carbon economy."
The sale of PSEG Fossil, part of PSEG's Strategic Alternatives process announced in July 2020, comprises 13 generation units in New Jersey, Connecticut, Maryland and New York.
In connection with the transaction, beginning in the third quarter of 2021, the assets and liabilities of PSEG Fossil will be classified as assets held for sale. As a result, PSEG expects to record a pre-tax impairment charge of approximately $2,150 million to $2,225 million, employee severance and retention costs up to $25 million, debt redemption costs including a make-whole premium of approximately $280 million - $340 million, and potential impacts on employee pension and other post retirement plans, environmental remediation costs and other items.
Together with the previously reported sale of its Solar Source assets in June, PSEG is anticipating to receive approximately $2.15 billion of after-tax net proceeds.
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August 12, 2021
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Copyright 2010-21 EnergyChoiceMatters.com
Reporting by Paul Ring • ring@energychoicematters.com
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