Pacific Gas & Electric Co. is reportedly nearing a deal to sell a stake in its fleet of power plants to KKR & Co. Inc ( KKR ). in an effort to raise funds needed to upgrade infrastructure and reduce the risk of fire resulting from its power lines.

The Details: According to a report from the Wall Street Journal, PG&E ( PCG ) said it is seeking regulatory approval to transfer its hydroelectric system and some natural gas, solar and battery facilities, into a new subsidiary called Pacific Generation. PG&E ( PCG ) then plans to sell 49.9% of the subsidiary to KKR.

PG&E ( PCG ) said the assets under consideration are valued at nearly $3.5 billion, and analysts estimate the potential deal could be worth between $2 billion and $3 billion.

The California Public Utilities Commission would have to approve the sale and has expressed concerns that allowing investors to own a substantial stake in PG&E's ( PCG ) generation portfolio could pose risks. According to the report, the agency has proposed blocking the sale, but has not made a final decision.

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PCG Price Action: According to Benzinga Pro, Pacific Gas & Electric shares are up 0.29% after-hours at $17.11 at the time of publication Tuesday.