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UPDATE 1-San Francisco city hires adviser to explore potential acquisition of PG&E assets

PG&E assets@ (Adds details from preliminary report, background, share movement)

June 4 (Reuters) - San Francisco Public Utilities Commission said on Tuesday it has hired an adviser to explore the potential acquisition of PG&E Corp's distribution assets, sending shares of the power company up 2.6% at $18.37.

San Francisco has hired Jefferies LLC as buy-side financial adviser, the utilities commission's Press Secretary Will Reisman told Reuters in an e-mail statement.

PG&E did not immediately respond to a Reuters request for comment.

According to a preliminary report released by the commission in May, there are three options for the city, which include the acquisition of PG&E assets in San Francisco to achieve self-sufficiency in power generation.

In the report, the commission also noted that although acquisition of PG&E assets would be a lengthy process, the city's electric grid could potentially benefit in the long-term.

"It would also lead to more stable rates and more transparency for customers."

PG&E sought Chapter 11 bankruptcy protection in January after facing liabilities of more than $30 billion in the wake of Camp Fire, California's deadliest and most destructive wildfire in recent years. (Reporting by Debroop Roy and Shanti S Nair in Bengaluru; Editing by James Emmanuel)