Public Service Enterprise Group, New Jersey’s largest utility owner, reached a deal to sell a portfolio of natural gas-fired power plants for about $1.92 billion as part of its effort to reorient the company and curb its carbon emissions.
The sale to a fund controlled by ArcLight Capital Partners is scheduled to close by the first quarter of 2022, according to a statement Thursday. The shares gained 0.4% before the start of regular trading in New York.
The move is part of a plan announced in July 2020 to exit the wholesale power business to become a mainly regulated power and gas utility. It closed its last coal power plant at the end of May, a few weeks after striking a deal to sell most of its solar farms. In June PSEG announced an ambitious effort to eliminate greenhouse gases by 2030, two decades ahead of its earlier target.
While the company is pushing to shed its fossil-fuel plants, the New Jersey region will continue to require the around-the-clock power that gas plants provide. So the assets its selling to ArcLight’s fund are likely to remain in use for years to come.
After deregulation in the 1990s, many U.S. utilities continue to own power generation even while operating in competitive power markets as a natural hedge for meeting customer needs. They have become more of a burden in recent years with the collapse in electricity prices squeezing margins because of the shale gas boom of the past decade and now the advent of cheap wind and solar.
[Will Wade and Naureen Malik]