Dive Brief:

• Pennsylvania regulators on Wednesday approved a portion of the spinoff of PPL's generation unit into a separate company called Talen Energy Corp., as well as authorizing the acquisition by Riverstone Holdings LLC of an indirect 35% ownership interest in Talen Energy.
• The deal has already been approved by the Federal Energy Regulatory Commission (FERC), but still requires authorization from the Nuclear Regulatory Commission and the U.S. Department of Justice.
• The transaction is expected to close in the second quarter of 2015.

Dive Insight:

PPL continues to make progress on the spinoff of its generation unit, winning approval for a portion of the deal from the Pennsylvania Public Utility Commission this week. Regulators authorized the transfer of PPL Electric Utilities' indirect ownership interests in PPL Interstate Energy Co. (IEC) to a new entity called Talen Energy Corp.

This transaction is part of a larger spinoff, during which PPL Corporation will transfer its electric generation and retail electric and gas supply business lines – PPL Energy Supply LLC; PPL EnergyPlus LLC; and PPL Generation LLC, which owns PPL IEC – to the shareowners of PPL Corporation, and will immediately combine with the competitive generation assets controlled by Riverstone Holdings LLC. The spinoff will result in a newly formed entity, Talen Energy.

PPL explained that it requested PUC approval for two reasons. PPL Electric Utilities, which is regulated by the PUC, sought review and approval of certain changes in property rights and contracts. In addition, IEC, which operates a Pennsylvania pipeline that transports oil or natural gas to two PPL power plants in Northampton County, requested approval of a change in its ownership under the proposed transaction. The PUC has regulatory authority over the IEC pipeline.