By Michael Dabaie
Public Service Enterprise Group Inc. said it is exploring strategic alternatives for PSEG Power's non-nuclear generating fleet.
This includes more than 6,750 megawatts of fossil generation located in New Jersey, Connecticut, New York and Maryland, as well as the 467-megawatt Solar Source portfolio located in various states.
"A separation of the non-nuclear assets would reduce overall business risk and earnings volatility, improve our credit profile, and enhance an already compelling ESG position driven by pending clean energy investments, methane reduction, and zero-carbon generation," said Chief Executive Ralph Izzo.
PSE&G already is expected to comprise about 80% of PSEG's 2020 operating earnings mix, and that percentage should increase as the company allocates the majority of its capital spend to meet system infrastructure needs and growing policy and customer expectations, the company said.
PSEG said it intends to retain ownership of PSEG Power's existing nuclear fleet, which the company said is necessary for New Jersey to meet its long-term carbon reduction goals.
The company said that while the company is in the preliminary stage of this evaluation, the marketing of a potential transaction in one or a series of steps, anticipated to launch in the fourth quarter, is expected to be completed sometime in 2021.
PSEG has engaged Goldman Sachs and Wachtell, Lipton, Rosen & Katz as advisors for this strategic evaluation.
An exit from the fossil generation business would accelerate PSEG's transition to a primarily regulated and contracted business, the company said. Given the relatively small part of PSEG that the non-nuclear business represents, the decision won't affect the company's current shareholder dividend policy, the company said.
Any decision regarding the non-nuclear assets won't affect PSE&G or PSEG Long Island customers, operations or tariffs, the company said.
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