PG&E issues $860M in green bonds to fund wildfire safety efforts

PG&E Recovery Funding, a subsidiary of Pacific Gas and Electric (PG&E), finalized an $860 million green bond issuance to finance electric work that is expected to have environmental benefits.

The bonds will finance a variety of investments that PG&E has made in its electric system. The bonds were designated as green bonds by S&P Global Ratings, which is reserved for capital project financings with environmental benefits.

“These first green bonds are another way we are working to deliver on the triple bottom line of serving people, the planet, and California’s prosperity,” Chris Foster, PG&E’s executive vice president and chief financial officer, said. “These bonds will reduce costs for our customers while financing projects that will help protect California’s forests against the impacts of extreme weather and our changing climate, facilitate the distribution of clean energy, and protect our customers and planet from future climate-driven risks.”

The investments financed by these green bonds include electric system improvements and hardening efforts in PG&E’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.

In its analysis, S&P Global Ratings said the utility’s 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.

In addition, the transaction is expected to result in $450 million of customer savings on a net present value basis relative to traditional rate base financings.

PG&E is a San Francisco-based energy company that serves 16 million in Northern and Central California.