Dive Brief:
- Sempra Energy announced on Thursday an agreement to sell its non-utility operating renewable assets, including solar and battery storage, for $1.54 billion to Consolidated Edison.
- Selling off approximately 980 MW of installed capacity is the first part of a multi-phase initiative to optimize its portfolio, Sempra said. In addition to solar and battery storage development projects, Con Edison will acquire one wind facility.
- Sempra said it also intends to sell certain U.S. midstream natural gas assets and the rest of its non-utility operating wind assets. The company expects to complete the sale to Con Edison near the end of the year.
Dive Insight:
Sempra shared its plans to sell its U.S. renewable portfolio totaling 2,600 MW and two natural gas storage facilities on June 28.
Sempra faced requests from investment management firms Elliott Management and Bluescape Resources to sell its Latin American businesses and spin off its U.S. liquefied natural gas (LNG) businesses. The company announced an agreement with those activist investors on Tuesday to create a new LNG and business development committee as the company appoints two new board directors in the next few weeks.
The activist investors had signaled that the U.S. LNG business "was valuable enough that the company might want to spin it off down the road," Doug Kline, Sempra's corporate communications director, told Utility Dive.
"We consider the LNG business and our Mexico operations to be a core part of our North American energy infrastructure growth strategy," Kline said.
Sempra won Texas regulatory approval in March to acquire Oncor Electric and its bankrupt parent company Energy Future Holdings for $9.45 billion.
"They're raising funds and they're focusing on what they believe are sort of their core competencies," Paul Patterson, a financial analyst at company research and investment firm Glenrock Associates, told Utility Dive.
"This company institutionally has shown a capability of getting out of some operations at really good times," Patterson said, referencing Sempra's installment sale of its energy trading business "not that long before the actual financial crisis."
