PG&E Sustainability Bond Supports Investments in Grid, Carbon Reduction

By Lynsey Paulo

PG&E has announced the climate impact of its first sustainability bond issuance in its Sustainable Financing Report.

PG&E made the bond offering of $750 million last March, which netted $741 million in proceeds, and funded a portion of projects in renewable energy and clean transportation with the support of diverse suppliers.

By integrating more renewable energy, energy storage and additional EV chargers onto the grid, the projects are expected to avoid significant greenhouse gas emissions by 2030 — totaling about 5.6 million metric tons (MMT) CO-e from renewable energy and storage and 2.5 MMT from clean transportation.

“These sustainability bonds are helping PG&E fortify our electric system against the increasing impacts of climate change. The resulting projects support our commitment to delivering clean and resilient energy for all.  And, by diversifying our debt investor base with this issuance, we hope to reduce debt costs over time,” said Carolyn Burke, PG&E Corporation Executive Vice President and Chief Financial Officer.

The bonds funded eligible green projects aligned with PG&E’s climate goals toward a net zero energy system in 2040, as detailed in its Climate Strategy Report. Eligible social projects reflect the portion of eligible green projects spend with diverse suppliers.

Sustainability bonds are a designation for capital raises to finance investments with intended environmental and social benefits. The bonds were designated as sustainability bonds consistent with PG&E’s published Sustainable Finance Framework, which was reviewed by S&P Global Ratings.

Enabling more renewables on the grid

Examples of projects designed to support interconnecting more renewable energy to the electric grid include:

• Bellota-Warnerville transmission line reconductoring project serving the Greater Stockton Area. Includes reinforcing 45 circuit miles of the 230 kilovolt (kV) lines between three substations, allowing 2,000 megawatts (MW) of renewable energy to connect to the grid. (Top photo, at left)
• Los Banos-Panoche Corridor transmission line reconductoring project designed to prepare for about 1,680 MW of renewable generation in the Central Valley, including new solar facilities. Includes upgrading transmission lines, switching stations and substations in Merced County. Two of five projects are completed, and new solar is connecting to the grid.
• Tesla Substation transmission capacity upgrade in Alameda County to allow for more renewable energy to come online. Project includes upgrading twelve bus series reactors, supporting future generation. (Top photo, at right)

Driving clean transportation

The bonds also funded electric distribution projects to support more EV charging. Projects include a distribution capacity upgrade at the Tejon Substation in the San Joaquin Valley for EV charging and commercial infrastructure growth.

Distribution capacity upgrades at the Tulare Lake Substation will allow for more customer EV charging in a rural, agricultural area in the San Joaquin Valley.

To promote socioeconomic advancement and empowerment, nearly 50 diverse suppliers contributed to the eligible green projects with products and services ranging from engineering to construction, and supported nearly 550 jobs.