Talen Energy To Sell Three Pennsylvania Power Plants - Quick Facts

(RTTNews) - Talen Energy Corp. (TLN) announced Thursday that it has agreed to sell three Pennsylvania power plants with a total combined generating capacity of 996 megawatts for $1.51 billion in gross cash proceeds, subject to customary purchase price adjustments.

The sale of the Ironwood combined-cycle, natural gas-fired plant, and the separate sale of the Holtwood and Wallenpaupack hydroelectric projects, are part of a requirement to divest certain assets in specific regions of the PJM Interconnection, which include portions of eastern Pennsylvania, New Jersey and Maryland, to comply with a December 2014 Federal Energy Regulatory Commission order approving the transactions that formed Talen Energy.

The 704-megawatt Ironwood plant is being sold to a subsidiary of TransCanada Corporation (TRP, TRP.TO) for a total purchase price of $654 million. In connection with the transaction, Talen Energy expects to repay approximately $42 million of indebtedness, plus a customary pre-payment premium, associated with the facility.

The Holtwood and Lake Wallenpaupack hydroelectric projects, with a combined generating capacity of 292 megawatts, are being sold to a subsidiary of Brookfield Renewable Energy Partners L.P. for $860 million, subject to customary purchase price adjustments.

The company said the transactions are expected to result in net proceeds of about $1.16 billion. In the near term, Talen Energy plans to use proceeds of the transactions to retire pre-payable and maturing debt.

Talen Energy expects both transactions to close in the first quarter of 2016.