Talen bankruptcy filing won't affect operations, pursuit of solar project, company says
May 11—Talen Energy Supply, part of Talen Energy Corp., filed for Chapter 11 bankruptcy on Monday as a part of restructuring its financing. In a release on Tuesday, Talen Energy Corp. said the subsidiary "seeks to rework its finances after being squeezed by a high debt load, rising gas prices and larger hedging collateral requirements."
Talen spokeswoman Taryne Williams said the move would not affect operations of the Montour Plant near Washingtonville or the Susquehanna nuclear plant near Berwick, nor would it impact an agreement with the Middle Susquehanna Riverkeeper related to pollution monitoring and cleanup near the Montour Plant or plans to construct a solar panel farm near there.
"Talen Energy Supply (TES) expects to operate its day-to-day business in the normal course," Williams wrote in an email response. "TES has filed customary 'first day' motions with the court to ensure no interruption to employee wages, health care, and other benefits as well as the ability to conduct routine business with vendors and other business partners."
Williams said Talen Energy Corporation and its Cumulus Growth subsidiary are not entities in the bankrupcy filing.
"The Cumulus data center campus project, which is adjacent to the Susquehanna nuclear plant, and the Montour Solar One development project both fall under Cumulus Growth and are expected to continue without interruption," Williams added.
Montour Solar One, the partnership of Talen Energy Corp. and Pattern Energy, withdrew its application for conditional use to construct the solar project after objectors found errors in the application. The company plans to resubmit the application.
Talen reached an agreement in early 2021 to close its ash waste disposal site at the Montour Plant in seven years and stop burning coal within five years, as well as undertake more immediate conservation measures to stem water pollution near the plant.
The agreement between the power company and the Middle Susquehanna Riverkeeper Association also states Talen will donate Lake Chillisquaque, the Montour Preserve and $1 million to maintain the preserve when the plant closes, as well as provide $200,000 to Riverkeeper Association to monitor pollution.
The preserve's new owner will receive the $1 million payment from Talen within two years after the plant no longer is operating and no longer needs water from Lake Chillisquaque for cooling.
Bob Stoudt, director of the Montour Area Recreation Commission (MARC), said, "At this point, the Montour Area Recreation Commission does not expect any changes at the Montour Preserve. We're in wait-and-see mode at this point, but we've not heard anything to the contrary."
Bloomberg News reported on Tuesday that Talen Energy Supply is the corporation's debt-issuing vehicle.
According to Bloomberg, "(TES) had struck a restructuring deal with a group of bondholders that will see the creditors participate in an equity rights offering of up to $1.65 billion, and turn more than $1.4 billion of their unsecured notes into equity, according to a statement on Tuesday.
"TES also obtained $1.76 billion of bankruptcy financing from a group of banks including Citigroup Inc., Goldman Sachs Group Inc., and Royal Bank of Canada. That consists of a $1 billion term loan, a $300 million revolving credit facility, and a $458 million letter of credit facility, the U.S. company said in a statement," Bloomberg reported.
A Chapter 11 filing allows a company to continue operating while it works out a plan to repay creditors.
