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PG&E files to separate non-nuclear generation assets into standalone unit

A PG&E truck carrying an American Flag drives past PG&E repair trucks in Paradise

(Reuters) - PG&E Corp has moved to separate its non-nuclear generation assets into a standalone unit by filing an application with the California Public Utilities Commission (CPUC), the utility said on Wednesday.

The company is seeking regulatory approval to sell a stake of up to 49.9% in the new non-nuclear generation unit called Pacific Generation LLC, which would provide a source of equity financing to help PG&E fund wildfire risk mitigation and clean energy investments, it added.

PG&E would maintain majority ownership in the unit.

Chief Financial Officer Chris Foster said the sale of the stake would help the company to make investments to improve the safety and reliability of its energy grid and "help the state achieve its decarbonization and electrification goals despite increasing challenges posed by climate change."

The power company has been blamed for sparking numerous wildfires, including some of the state's most deadly and destructive.

The rate base of the assets proposed to be transferred is about $3.5 billion, which is about 7% of PG&E's total rate base.

The company expects to launch the minority stake sale process in first-quarter 2023 and said the deal would have no impact on PG&E customer bills.

PG&E is expected to file an application with the Federal Energy Regulatory Commission (FERC) in October and expects the deal to close by end of next year.

PG&E filed for Chapter 11 bankruptcy protection in 2019, citing potential liabilities exceeding of tens of billions from major wildfires sparked by its equipment in 2017 and 2018.

(Reporting by Arunima Kumar in Bengaluru; Editing by Shailesh Kuber)