Power producer Talen Energy Corp. (TLN) said it would sell three plants in Pennsylvania for $1.51 billion to meet regulatory requirements related to its formation in 2014.
Talen said on Oct. 8 it would sell a natural gas-fired plant to TransCanada Corp. (TRP) for $654 million and two hydroelectric projects to Brookfield Renewable Energy Partners LP (BEP) for $860 million.
Talen has to divest assets in the PJM market, which covers parts of the U.S. mid-Atlantic and Midwest, to meet Federal Energy Regulatory Commission (FERC) rules.
Talen was formed in June 2014 after Pennsylvania power company PPL Corp.'s (PPL) merchant generation business merged with private equity firm Riverstone Holdings LLC's generation assets.
Merchant power generation businesses sell power to wholesale markets, where prices are not regulated by the government.
The power plants being divested have total generating capacity of 996 megawatts. Talen said the expected net income from the plants was about $56 million for 2016.
The transactions are expected to close in the first quarter of 2016.
Talen shares were up slightly at $10.60 in light premarket trading. Up to close on Oct. 7, Talen's market value had nearly halved since it started trading as a separate company on May 18.
Credit Suisse and RBC Capital Markets advised Talen on the deals.
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