Public Service Enterprise Group, as part of its ambitious efforts to eliminate greenhouse gases by 2030, announced Thursday that it is selling PSEG Fossil, its 6,750-megawatt fossil-generating portfolio, for approximately $1.92 billion.
The sale, to a fund controlled by ArcLight Capital Partners, is scheduled to close by the first quarter of 2022, following review and approval by federal and state regulatory bodies.
PSEG Chairman and CEO Ralph Izzo said the sale is another step in the evolution of the utility.
In May, PSEG Power closed its last remaining coal plant. In June, PSEG Power closed on the sale of its Solar Source portfolio.
“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,” 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.”
PSEG Fossil comprises 13 generation units in New Jersey, Connecticut, Maryland and New York. The sale of these assets is part of the strategic alternatives process that PSEG announced in July 2020.
Together with the sale of its Solar Source assets in June, PSEG is anticipating to receive approximately $2.15 billion of after-tax net proceeds.
PSEG, in a release, said the utility is continuing to build a clean energy infrastructure-focused company, powered by its diverse, dedicated and highly skilled workforce.
Thursday’s announcement builds on recent achievements in the company’s ESG profile, including:
- September 2020: The New Jersey Board of Public Utilities approved Public Service Electric & Gas’ landmark $1 billion energy efficiency program to help build a cost-effective and enhanced environmental energy profile for the state by helping customers reduce their energy consumption, shrink their carbon footprint and save money on their energy bills.
- January 2021: PSE&G received approval to install $700 million of state-of-the-art advanced metering infrastructure technology to better serve customers and $170 million in electric vehicle charging infrastructure to enhance the transportation sector.
- January 2021: PSEG launched its first ESG Performance Report with new metrics and data disclosures.
- April 2021: The BPU approved the second phase of Zero Emissions Certificates at the full award rate for all three of PSEG’s New Jersey nuclear plants, enabling the continued operation of 3,600 MW of carbon-free generation.
- April 2021: PSEG completed its acquisition of a 25% equity interest from Ørsted in Ocean Wind, New Jersey’s first offshore wind project, which supports the economy with clean energy, jobs and the development of a new industry.
- May 2021: PSEG Power retired its Bridgeport Harbor Station Unit 3 coal plant, becoming 100% coal-free on its long-term path to net-zero carbon emissions.
- June 2021: PSEG Power closed on the sale of its Solar Source portfolio, the first step in the sale of its non-nuclear power fleet.
- July 2021: PSE&G announced a settlement on its transmission rates, which, if approved by the Federal Energy Regulatory Commission, will remove regulatory uncertainty and provide $140 million per year of rate relief to our electric transmission customers.
“This sale is another in a series of accomplishments that position PSEG for the future — leading the energy sector and serving our customers by enhancing our clean energy and climate-centered profile,” Izzo said.
Separate from the strategic alternatives process, but made possible as a result of the sale of the PSEG Fossil units and the reduction in the company’s emissions profile, PSEG recently announced it has accelerated its net-zero climate vision by two decades — from 2050 to 2030 — and incorporated scope 1 and scope 2 emissions from the operations of both utility transmission and distribution, as well as power generation.