Dive Brief:
- The Montana Public Service Commission has voted to approve NorthWestern Energy’s $880 million purchase of PPL Montana's 11 hydroelectric power plants, representing a combined generating capacity of more than 630 megawatts, as well as its Hebgen Lake reservoir.
- PPL Corporation recently merged with Riverstone Holdings to form Talen Energy, which will own and operate 15,320 megawatts of merchant generation and be the third biggest U.S. independent power producer.
- Talen, which will be publicly traded on the NYSE, will have 40% of its capacity in natural gas, 40% in coal and 15% in nuclear, with a strong presence in the deregulated ERCOT Texas market and about 83% of its generation in the PJM territory.
Dive Insight:
Market watchers suggest this sale relieves Talen of drought-related uncertainties in western hydro resources. It also creates operating capital for the new generation business.
The PPL Montana hydroelectric facilities being purchased by NorthWestern Energy are as follows: (1) Thompson Falls Dam on the Clark Fork River; (2) Kerr Dam on the Flathead River; (3) Madison Dam on the Madison River; (4) Mystic Lake Dam on West Rosebud Creek; and (5) Hauser, (6) Holter, (7) Black Eagle, (8) Rainbow, (9) Cochrane, (10) Ryan and (11) Morony Dams on the Missouri River.
The deal does not include PPL Montana's interest in the Colstrip facility, its 153 megawatt J.E. Corette coal-fired facility (which will be shuttered in April 2015), or the marketing and trading operations of Montana affiliate PPL EnergyPlus.
The Federal Energy Regulatory Commission (FERC) and federal anti-trust agencies have cleared the transaction. Once the PSC’s final order is given in late September, only a routine review from FERC that should take 30 days to 60 days will be required to close the deal.
