New Jersey based Public Service Enterprise Group (PSEG) has announced the sale of its 13 fossil-fuel generating plants for approximately $1.92 billion to private equity firm ArcLight Capital Partners, LLC. It is undetermined if the plants will close under the new ownership.
The sale, expected to be completed by end of year or the first quarter of 2022, includes more than 6,720 MW of fossil-fuel generation in New Jersey, Connecticut, New York and Maryland. Combined with the sale of its Solar Source assets in June, PSEG expects to receive approximately $2.15 billion in after-tax net proceeds, compared to a book value of $4.5 billion listed in the company’s SEC filings.
The move, consistent with the company’s accelerated sustainability-focused progression, comes amid growing divestment in fossil fuels from a wide range of stakeholders. Earlier this year, Maine became the first state in the country to pass a law requiring divestment from fossil fuels. In New Jersey, activists are urging the state to follow suit. And, investors are on a similar path, with about $14 trillion divested from fossil fuels globally, up from $52 billion in 2014, as reported by S&P Global Market Intelligence.
“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,’’ said Ralph Izzo, PSEG chairman, president and CEO.
It is unclear, however, if other utilities will follow PSEG’s lead, according to researchers at University of Oxford’s Smith School of Enterprise and the Environment. Based on a recent study among more than 3,000 utilities, most appear to be taking a passive approach towards managing their asset portfolios. Only about 14% prioritized investment in renewables over fossil fuels, and even among those utilities more focused on renewables, more than half continued to grow their fossil fuel capabilities.
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August 17, 2021 at 10:40PM
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PSEG Sells Generation Fleet As Fossil Fuel Divestment Movement Grows - Environment + Energy Leader
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