* To divest 300-400 MW of generation before end of current
qtr
* Stock jumps as much as 15.3 pct
(Adds Talen comments, share movement)
Oct 8 (Reuters) - Power producer Talen Energy Corp TLN.N
said it would sell three plants in Pennsylvania for $1.51
billion to meet regulatory requirements related to its formation
in 2014, and would announce more divestitures before the end of
the quarter.
Talen's shares rose as much as 15.3 percent to $12.085 in
early trading before paring most of its gains. Stock was trading
up 4.7 percent at 11:53 a.m. ET.
The company said on Thursday it would sell a natural
gas-fired plant to TransCanada Corp TRP.TO for $654 million
and two hydroelectric projects to Brookfield Renewable Energy
Partners LP BEP_u.TO for $860 million. urn:newsml:reuters.com:*:nPn6jpj60
Talen has to divest assets in the PJM market, which covers
parts Atlantic and Midwest, to meet Federal Energy Regulatory
Commission (FERC) of the U.S. mid-rules.
"We were ordered to divest between 1,300-1,400 megawatts of
generation in PJM...this is 1,000 MW of that," said George
Lewis, Talen's corporate communications director.
The company will announce additional divestitures before end
of the current quarter to comply with the FERC order, Lewis told
Reuters.
Talen was formed in June 2014 after Pennsylvania power
company PPL Corp's PPL.N 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.
Up to Wednesday's close, Talen's market value had nearly
halved since it started trading as a separate company on May 18.
Credit Suisse (SIX:CSGN) and RBC Capital Markets advised Talen on the
deals.