UPDATE: Oct. 26, 2023: Duke Energy announced Wednesday that it completed the sale of its 3.4 GW unregulated, utility-scale commercial renewables business to Brookfield Renewable Partners for $2.8 billion. Duke CEO Lynn Good said the completion “marks the final step in our transition to a fully regulated utility” and that Duke plans to make more investments in clean energy and grid enhancements.
Duke Energy announced Monday that it agreed to sell its 3.4 GW unregulated, utility scale commercial renewables business to Brookfield Renewable Partners for $2.8 billion, after the utility’s board approved a sale late last year.
“The sale agreement for the Commercial Renewables business platform includes more than 3,400 megawatts (alternating current) of utility scale solar, wind and battery storage across the U.S., net of joint venture partners ownership, in addition to operations, new project development, and current projects under construction,” the utility company said in a release.
Duke had previously valued its commercial renewables portfolio at $4 billion. The release said the deal includes non-controlling tax equity interests and the assumption of debt, and will net Duke approximately $1.1 billion.
The utility said it plans to use those proceeds to strengthen its balance sheet and avoid additional holding company debt issuances, allowing Duke to “focus on the growth of its regulated businesses,” in particular investments into enhancing grid reliability and incorporating 30 GW of regulated renewable energy by 2035.
“This sale is an important step in our transition into a purely regulated company with significant grid and clean energy investment plans that will deliver benefits to our customers and stakeholders,” said Lynn Good, Duke’s chair, president and CEO in the release.
Good said Brookfield Renewable, which currently manages 90 GW of operating and development assets across the U.S., “has the resources” to support the portfolio’s growth and success.
Duke expects to take a pre-tax impairment charge on the deal of about $800 million in the second quarter of 2023 based on the transaction’s purchase price, the company said in a Securities and Exchange Commission filing. Duke expects to close on the deal by the end of the year.
Duke had announced that it was looking for buyers for the portfolio during its 2022 second-quarter earnings call, with CFO Steve Young saying that earnings from the commercial arm had flattened.
In its release, the utility said it’s also making “strong progress” on selling its distributed energy business and expects to close that sale by the end of the year.
