UPDATE 2-Talen Energy to sell three power plants for $1.51 bln

Thu Oct 8, 2015 11:59am EDT
 
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* 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 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 for $654 million and two hydroelectric projects to Brookfield Renewable Energy Partners LP for $860 million.

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 merchant generation business merged with private equity firm Riverstone Holdings LLC's generation assets.   Continued...