While reporting its financial results for the second quarter on Friday, Public Service Enterprise Group or PSEG (PEG) said it is exploring strategic alternatives for PSEG Power’s non-nuclear generating fleet, which 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.
PSEG Chairman, President and CEO Ralph Izzo, said, “Our intent is to accelerate the transformation of PSEG into a primarily regulated electric and gas utility — a plan we have been executing successfully for more than a decade.”
PSEG said that due to the relatively small part of the company that the non-nuclear business represents, this decision will not have an impact on its current shareholder dividend policy, which will continue to be subject to approval by the its board of directors.
The company noted that PSE&G already is expected to comprise about 80 percent of its 2020 operating earnings mix, and that percentage should increase as a majority of the capital spend is allocated to meet system infrastructure needs as well as growing expectations for clean energy investments.
PSEG is continuing to evaluate potential investments in offshore wind and expects to make a decision regarding the opportunity to invest in Ørsted’s Ocean Wind project later this year. The company is also evaluating participation in upcoming offshore wind solicitations in New Jersey and other Mid-Atlantic states.
PSEG intends to retain ownership of PSEG Power’s existing nuclear fleet.
PSEG noted that while it is in the preliminary stage of this evaluation, the marketing of a potential transaction in one or a series of steps is anticipated to launch in the fourth quarter and be completed sometime in 2021.
PSEG has engaged Goldman Sachs and Wachtell, Lipton, Rosen & Katz as advisors for this strategic evaluation.
The company noted that an exit from the fossil generation business would accelerate its transition to a primarily regulated and contracted business, with a zero-carbon generation platform.
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