US-based energy company Public Service Enterprise Group (PSEG) has signed an agreement to sell PSEG Fossil, its 6,750MW fossil power generating portfolio.
The portfolio will be sold to subsidiaries of ArcLight Energy Partners Fund VII for an aggregate consideration of almost $1.92bn.
ArcLight Energy is a fund controlled by ArcLight Capital Partners.
The sale of PSEG Fossil is part of PSEG’s strategic alternatives process, which was announced last July.
The process includes 13 generation units located in New Jersey, Connecticut, Maryland and New York.
PSEG chairman, president and CEO Ralph Izzo said: “A year ago, we announced the strategic review of PSEG’s non-nuclear generating assets in line with our long-term focus on regulated utility growth, improving our business mix and enhancing an already compelling environmental, social and governance profile.
“With today’s agreement, which is the result of a robust sale process, PSEG is on track to realise a more predictable earnings profile.
“[In addition], this transaction continues our evolution towards [becoming] a clean energy infrastructure-focused company that will enable our increasingly low-carbon economy.
“This sale is another in a series of accomplishments that position PSEG for the future, leading the energy sector and serving our customers by enhancing our clean energy and climate-centered profile.”
The deal is expected to close in either the fourth quarter of this year or the first quarter of next year.
In June, LS Power, through its affiliate Quattro Solar, acquired 25 solar power facilities from PSEG.
The deal included a solar portfolio owned by PSEG spread across 14 states, as well as five regional transmission organisations in the US.
The portfolio’s total capacity comes to 468MWdc (365MWac).
With the sale of its solar source assets and PSEG Fossil, PSEG expects to receive almost $2.15bn in after-tax net proceeds.