PG&E Recovery Funding, LLC, a subsidiary of Pacific Gas and Electric Company announced today it has finalized an $860 million inaugural green bond issuance, with proceeds aimed at financing clean energy distribution projects, and wildfire safety work to protect California forests.
The investments financed by the green bonds include electric system improvements and supporting efforts within PG&E’s Community Wildfire Safety Program to protect customers and keep communities safe in the face of the growing wildfire risk. According to an analysis by S&P Global Ratings, the utility’s work would have environmental benefits by hardening the electric system and preventing the ignition and spread of wildfires, preserving the health of California’s forests.
In addition to its environmental benefits, financing critical wildfire safety work through these recovery bonds will result in significant customer savings, according to the company, due to the lower cost of securitization when compared to traditional utility financing. The transaction is expected to result in $450 million of customer savings on a net present value basis relative to traditional rate base financings.
Chris Foster, PG&E Corporation’s Executive Vice President and Chief Financial Officer, said:
“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. 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.”