Pacific Gas and Electric signs licensing agreement with SBA Communications

Pacific Gas and Electric Company (PG&E) has struck a deal with SBA Communications to sell its license agreements with wireless providers that attach their equipment to certain electric transmission towers and other utility structures.

This arrangement allows the SBA subsidiary to continue to market and sublicense access to the towers and structures to additional wireless providers, and PG&E will receive a portion of that future revenue. The sale of these licenses is expected to generate $973 million in initial proceeds. It will apply to about 700 towers. PG&E is not selling any transmission towers as part of this transaction.

Further, PG&E is entering into a strategic relationship with SBA to sublicense and market equipment at additional attachment locations on up to 28,000 transmission towers across PG&E’s network. PG&E will receive a portion of future revenues from these sublicensed equipment attachment locations.

“When we emerged from Chapter 11, we made a commitment to achieve financial stability and bolster our overall financial health, and we’re delivering on that objective. Strategically selling non-core assets like these is one way we’re continuing to follow through on that commitment, reduce our financing needs and strengthen our balance sheet,” Chris Foster, PG&E interim chief financial officer, said.

PG&E estimates that about half of the net sale proceeds will be returned to electric transmission and distribution customers in the form of lower monthly bills. In addition, the proceeds are expected to help partially offset future equity issuances and dilution of PG&E shares.

“This transaction adds a significant portfolio of high quality, exclusive locations to our outstanding existing US macro tower portfolio, and SBA expects these assets to generate approximately $39.5 million in Tower Cash Flow in their first full year in our portfolio,” SBA Communications President and CEO Jeff Stoops said. “As 5G network deployments are now a reality, we are excited to use our vast experience and industry leading position in order to facilitate the future additional use of these assets by wireless service providers for the collective benefit of the wireless industry, PG&E and SBA. We are also particularly pleased about the opportunity to work closely with PG&E over the coming years to maximize wireless deployments across their extensive network of transmission towers.”

This transaction is expected to close in early 2021.

Pacific Gas and Electric Company is one of the largest combined natural gas and electric energy companies in the United States, serving 16 million people in Northern and Central California.