As a significant milestone in its work to provide affordable, safe and reliable energy to its customers, Pacific Gas and Electric Company (the Utility), through its subsidiary PG&E Recovery Funding, LLC, recently finalized a $983.4 million green bond issuance to finance electric work that will have significant environmental benefits while also keeping its customers and hometowns safe.
PG&E Recovery Funding issued the bonds to finance a variety of wildfire safety investments that the Utility has made in its electric system. The bonds were recently designated as green bonds following an analysis by S&P Global Ratings. Green bonds are a designation for capital project financings with environmental benefits. This is the Utilitys second green bond offering, with the first coming in November 2021.
In conducting its analysis of the bond issuance, S&P Global Ratings noted that the Utilitys ongoing safety work would have environmental benefits by hardening the electric system and preventing the ignition and spread of wildfires, therefore preserving the health of Californias forests, and maintaining the existing state of natural ecosystems.
PG&E is committed to delivering on the triple bottom line of serving people, the planet and Californias prosperity. This means continuing our long history of environmental stewardship while also working to keep energy affordable for our customers. These green bonds allow us to save money for customers while completing critical safety work that has long-term environmental benefit for the hometowns we serve, said Chris Foster, PG&E Corporations Executive Vice President and Chief Financial Officer.
In addition to the environmental benefits, financing critical wildfire safety work through the recovery bonds authorized by California Assembly Bill 1054 will result in significant customer savings due to the lower cost of securitization when compared to traditional utility financing. The most recent transaction is estimated to result in approximately $300 million of customer savings on a net present value basis relative to traditional rate base financing.
The investments financed by these green bonds include electric system improvements and hardening efforts found within Pacific Gas and Electric Companys Community Wildfire Safety Program. These investments have been authorized by the California Public Utilities Commission through the utilitys 2020 General Rate Case, as well as its Wildfire Mitigation Plans.