Talen reaches settlement with PPL that will bring in $115 million

By Sarah Lizee

Olympia, Wash., Dec. 22 – Talen Energy Corp. has reached a settlement with PPL Corp. related to a distribution of proceeds from the 2014 sale of hydroelectric facilities in Montana, according to a press release.

Under the terms of the settlement agreement, which has been approved by each company's board of directors, PPL will pay Talen Montana $115 million in cash on or before Dec. 31, in exchange for a full release of all claims.

Talen said $9.5 million of the proceeds are expected to be paid to the general unsecured creditors trust, established as part of Talen's Chapter 11 plan of reorganization, to satisfy outstanding claims that remain following Talen's emergence from restructuring in May 2023.

The remaining proceeds will be used by Talen Montana to secure environmental and other obligations, and for general corporate purposes.

“We are pleased to have reached a settlement with PPL. Importantly, as part of the agreement, Talen and PPL have agreed to reset our relationship,” Talen’s president and chief executive officer, Mac McFarland, said in the release.

“PPL can be a key stakeholder for Talen on some of our most critical lines of business, and we look forward to working constructively together going forward.”

PPL said in its own Friday press release that the settlement avoids the continued cost and uncertainty of litigation that began in two courts in Montana more than five years ago, with Talen initially seeking more than $900 million tied to proceeds from PPL's 2014 sale of the hydroelectric assets.

“Since this litigation was initiated by Talen, we have maintained our position that PPL acted appropriately with regard to the sale of the Montana hydro assets and that the separation agreement governing the spinoff of PPL Energy Supply entitled PPL to retain the proceeds from the transaction,” PPL president and chief executive officer Vincent Sorgi said in the release.

“Nonetheless, we recognize there is risk inherent to any litigation defense.

“Moreover, Talen's bankruptcy filing in May 2022 ended any meaningful opportunity for PPL to recover financially on its various counterclaims.”

Houston-based Talen Energy Supply is one of the largest competitive power generation and infrastructure companies in North America. The company filed bankruptcy on May 9, 2022 under Chapter 11 case number 22-90054.

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