(Bloomberg) -- PG&E Corp. is in talks to sell a minority stake in its power generation business to investment firm KKR & Co., a transaction regulators have signaled they don't intend to support.
The California utility announced it would sell the stake in its hydroelectric, natural gas, solar and battery storage facilities as part of a plan to spin off its non-nuclear generation unit. The company didn't give an estimated sales price, but said the transaction would reduce customer rates by $100 million over the next 20 years.
The announcement comes as PG&E plans to invest an estimated $62 billion from 2024 through 2028 to support its wildfire prevention work and grid upgrades. The company has come under mounting scrutiny for raising customer bills to finance its work, which includes efforts to reduce the risk of its lines sparking another catastrophic wildfire. PG&E was driven into bankruptcy in 2019 after its broken equipment set off a number of fires, including the deadliest in state.
Read More: PG&E Chief Says Soaring Power Bills Poised to Start Dropping
The California Public Utilities Commission scheduled a vote for May 9 to reject the spinoff, saying in its proposed decision PG&E hadn't demonstrated how the sale would benefit customers compared to other financing methods. PG&E said it hasn't yet filed a proposal of the KKR transaction with regulators.
In its announcement, PG&E said the sale would enhance the company's credit profile, which would benefit customers with lower borrowing costs. PG&E Chief Executive Officer Patti Poppe told investors last week the company was prepared to reveal its potential minority investor as part of an effort to convince regulators a transaction would benefit customers and the company.
KKR, which has been making sizable bets on power infrastructure, said it would invest through its global infrastructure business, which has $59 billion of assets under management.
(Updates with additional details starting in the third paragraph.)
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