NEWARK, N.J., Aug. 12, 2021 /PRNewswire/ -- 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, and 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."
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. 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. The transactions are subject to the expiration or
early termination of the waiting period under the Hart-Scott-Rodino
Antitrust Improvements Act of 1976 (as amended); approval by the
Federal Energy Regulatory Commission and certain state regulatory
bodies; and other customary closing conditions.
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.
Also today, PSEG is updating its full-year 2021 non-GAAP
operating earnings guidance to $3.50 to $3.65
per share, from $3.40 to $3.55 per share, reflecting the cessation of
depreciation expense and lower interest expense related to the sale
of the PSEG Fossil assets and repayment of PSEG Power's outstanding
debt. All other assumptions related to full-year 2021 guidance are
unchanged, including the assumption of normal weather and plant
operations, and that the portfolio is expected to continue to
contribute to consolidated full-year 2021 financial results through
the end of the year.
PSEG Built for the Future
PSEG is continuing to build a clean energy
infrastructure-focused company, powered by its diverse, dedicated
and highly skilled workforce. As the Strategic Alternatives process
concludes, PSEG's Powering Progress vision continues to be for a
future in which people use less energy, and that energy is cleaner
and delivered more reliably than ever. Today's announcement builds
on recent achievements and PSEG's established and compelling ESG
profile:
- September 2020: the New Jersey Board of Public Utilities approved
PSE&G's 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 our 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.
- June 2021: PSEG Power retired its
Bridgeport Harbor Station Unit 3 coal plant on May 31, 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 FERC,
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.
Throughout its history, PSEG has been committed to a "just
transition" for all employees impacted by trends across the energy
sector and changes in the company. PSEG strives to treat all
employees fairly and equitably and actively works to ensure its
workforce is prepared for the future, routinely offering career and
professional development assistance and access to new job
opportunities within the company.
PSEG plans to hold an Analyst Day in late September and will
provide more information regarding its improved business position,
increased financial flexibility and strong growth prospects.
Goldman Sachs & Co. is serving as financial adviser, and
Wachtell, Lipton, Rosen & Katz is serving as legal counsel, to
PSEG in connection with the PSEG Fossil transaction.
About PSEG
Public Service Enterprise Group Inc. (PSEG)
(NYSE: PEG) is a publicly traded diversified energy company with
approximately 13,000 employees. Headquartered in Newark, N.J., PSEG's principal operating
subsidiaries are: Public Service Electric and Gas Co. (PSE&G),
PSEG Power and PSEG Long Island. PSEG is a Fortune 500 company
included in the S&P 500 Index and has been named to the Dow
Jones Sustainability Index for North
America for 13 consecutive years
(https://corporate.pseg.com).
Forward-Looking Statement
The statements contained in this press release that are not purely
historical are "forward-looking statements" within the meaning of
The Private Securities Litigation Reform Act of 1995. Such
forward-looking statements are subject to risks and uncertainties,
which could cause actual results to differ materially from those
anticipated. Such risks and uncertainties include, but are not
limited to, the occurrence of any event, change, development,
occurrence or circumstance that could give rise to the termination
of the agreements described above or the inability to complete (or
a delay in the completion of) the proposed transactions due to,
among other things, the failure to satisfy any of the conditions to
the closing therein, including that a regulatory authority or other
third party may prohibit, delay, impair or refuse to grant approval
for or consent to the consummation of the proposed transactions.
Such statements are based on management's beliefs as well as
assumptions made by and information currently available to
management. Factors that may cause actual results to differ
materially from those contemplated in any forward-looking
statements made by us herein are discussed in our Annual Report on
Form 10-K and subsequent reports on Form 10-Q and Form 8-K filed
with the Securities and Exchange Commission (SEC), and available on
our website: https://investor.pseg.com. All of the
forward-looking statements made in this press release are qualified
by these cautionary statements and we cannot assure you that the
results or developments anticipated by management will be realized
or even if realized, will have the expected consequences to, or
effects on, us or our business, prospects, financial condition,
results of operations or cash flows. Readers are cautioned not to
place undue reliance on these forward-looking statements in making
any investment decision. Forward-looking statements made in this
press release apply only as of the date hereof. While we may elect
to update forward-looking statements from time to time, we
specifically disclaim any obligation to do so, even in light of new
information or future events, unless otherwise required by
applicable securities laws.
Visit PSEG at:
www.pseg.com
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Twitter
PSEG on LinkedIn
PSEG Energize!
From time to time, PSEG, PSE&G and PSEG Power release
important information via postings on their corporate Investor
Relations website at https://investor.pseg.com.
Investors and other interested parties are encouraged to visit the
Investor Relations website to review new postings. You can sign up
for automatic email alerts regarding new postings at the bottom of
the webpage at https://investor.pseg.com.
CONTACTS:
|
|
Investor
Relations
|
Media
Relations
|
Carlotta
Chan
|
Marijke
Shugrue
|
973-430-6565
|
908-531-4253
|
Carlotta.Chan@pseg.com
|
Marijke.Shugrue@pseg.com
|
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SOURCE PSEG