TUD Remains Optimistic About the PG&E Water System Asset Acquisition Following PG&E’s Announcement of Pacific Generation LLC

SONORA, CA:  PG&E recently announced that they have formed a subsidiary company, Pacific Generation LLC, and have filed with the California Public Utilities Commission a proposal to sell a minority stake in that subsidiary.  According to the announcement, Pacific Generation would own the company’s non-nuclear power generation assets as a cost-of-service regulated utility, just as they do today.

PG&E notified TUD in June of 2022, that it was pausing negotiations between TUD and PG&E on the transfer of several PG&E-owned assets including Pinecrest Lake, Lyons Reservoir, the Main Tuolumne Canal, Phoenix hydroelectric facilities prompted by its desire to reevaluate their long-term strategy around how best optimize the ownership and operation of its power generation assets.

Mike Schonherr, director of strategic agreements for PG&E, said in an email last week, “I do not expect this transaction to impair any future discussions regarding the potential sale of the Phoenix Project and Pinecrest Reservoir to TUD. Should PG&E conclude that Phoenix and Pinecrest are not needed to meet its future operational needs, PG&E’s requested approval and expected terms of the minority interest sale (subject to negotiation) would allow it to pursue the sale of the assets to TUD without further approvals from minority investors in Pacific Generation.” PG&E expects this process to be completed by the end of 2023 and intends on keeping TUD apprised of their progress.

“We are happy to be able to share what seems like promising news regarding PG&E’s continued interest in the acquisition and look forward to resuming negotiations as soon as PG&E is ready,” said Jeff Kerns, Vice President of the Tuolumne Utilities District Board of Directors. TUD remains committed to the terms for purchase of the assets associated with the Phoenix hydroelectric generation project and continues to work with PG&E on this mutually beneficial transaction. We will continue to communicate these developments to customers and stakeholders.

 

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PG&E Negotiations on Hold