Company’s Second Green Bond Issuance Brings Significant Customer Savings When Compared to Traditional Utility Financing
As a significant milestone in its work to provide affordable, safe and reliable energy to its customers, Pacific Gas and Electric Company (the Utility), through its subsidiary PG&E Recovery Funding, LLC, recently finalized a $983.4 million green bond issuance to finance electric work that will have significant environmental benefits while also keeping its customers and hometowns safe.
PG&E Recovery Funding issued the bonds to finance a variety of wildfire safety investments that the Utility has made in its electric system. The bonds were recently designated as green bonds following an analysis by S&P Global Ratings. Green bonds are a designation for capital project financings with environmental benefits. This is the Utility’s second green bond offering, with the first coming in November 2021.
In conducting its analysis of the bond issuance, S&P Global Ratings noted that the Utility’s ongoing safety work would have environmental benefits by hardening the electric system and preventing the ignition and spread of wildfires, therefore preserving the health of California’s forests, and maintaining the existing state of natural ecosystems.
“PG&E is committed to delivering on the triple bottom line of serving people, the planet and California’s prosperity. This means continuing our long history of environmental stewardship while also working to keep energy affordable for our customers. These green bonds allow us to save money for customers while completing critical safety work that has long-term environmental benefit for the hometowns we serve,” said Chris Foster, PG&E Corporation’s Executive Vice President and Chief Financial Officer.
In addition to the environmental benefits, financing critical wildfire safety work through the recovery bonds authorized by California Assembly Bill 1054 will result in significant customer savings due to the lower cost of securitization when compared to traditional utility financing. The most recent transaction is estimated to result in approximately $300 million of customer savings on a net present value basis relative to traditional rate base financing.
The investments financed by these green bonds include electric system improvements and hardening efforts found within Pacific Gas and Electric Company’s Community Wildfire Safety Program. These investments have been authorized by the California Public Utilities Commission through the utility’s 2020 General Rate Case, as well as its Wildfire Mitigation Plans.
Pacific Gas and Electric Company, a subsidiary of PG&E Corporation (NYSE:PCG), is a combined natural gas and electric utility serving more than 16 million people across 70,000 square miles in Northern and Central California. For more information, visit pge.com and pge.com/news.
This news release contains forward-looking statements that are not historical facts, including statements about the beliefs, expectations, estimates, future plans and strategies of PG&E Corporation and the Utility (together, “PG&E”), including but not limited to the issuance of green bonds and their environmental, financial and operational impacts. These statements are based on current expectations and assumptions, which management believes are reasonable, and on information currently available to management, but are necessarily subject to various risks and uncertainties. In addition to the risk that these assumptions prove to be inaccurate, factors that could cause actual results to differ materially from those contemplated by the forward-looking statements include factors disclosed in PG&E Corporation and the Utility's joint annual report on Form 10-K for the year ended December 31, 2020, their most recent quarterly report on Form 10-Q for the quarter ended September 30, 2021, and other reports filed with the Securities and Exchange Commission, which are available on PG&E Corporation's website at pgecorp.com and on the SEC website at www.sec.gov. PG&E Corporation and the Utility undertake no obligation to publicly update or revise any forward-looking statements, whether due to new information, future events or otherwise, except to the extent required by law.
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