The transaction amount also includes $10m received by Talen Energy following the announcement of the deal in October 2017
Talen Energy has announced the completion of the sale of its indirect, wholly owned subsidiary Interstate Energy Company (IEC) for $155m.
IEC, an indirect, a wholly owned subsidiary of Talen Energy, has been sold to Adelphia Gateway (Adelphia), a subsidiary of New Jersey Resources.
The transaction amount also includes $10m received by the company following the announcement of the deal in October 2017.
The IEC pipeline comprises of an 84 mile (135km) pipeline between Marcus Hook and Martins Creek, Pennsylvania.
Talen Energy to use sale proceeds to trim debt
Talen Energy is expected to utilise the proceeds from the sale for recourse debt reduction.
Talen Energy subsidiaries have entered into contracts with Adelphia for supply of natural gas from the northern portion of the pipeline to Talen Energy’s Martins Creek and Lower Mount Bethel generating stations.
Adelphia will repurpose the southern 80km portion of the IEC pipeline to flow natural gas to the greater Philadelphia region.
Talen Energy chairman and chief executive officer Ralph Alexander said: “The sale of IEC marks the last in a series of planned sales of non-core assets which were announced shortly following Talen Energy’s take-private transaction in December 2016. These sales allowed the Company to monetize underutilized assets to generate incremental cash flow, and drive greater efficiencies.
“We appreciate the efforts of those on both sides of this transaction and look forward to working with Adelphia to ensure a smooth transition for all involved.”
Talen Energy is one of the largest power generation companies in North America, owing nearly 15GW of generating capacity.
The company’s power generation capacity is located in well-developed, structured wholesale power markets, principally in the Northeast, Mid-Atlantic and Southwest regions of the US.
In June, Talen Montana, the operator of the 2,094MW Colstrip Steam Electric Station (Colstrip), announced the retirement of the units 1 and 2 of the power plant, while continuing the operations of the remaining two. Talen Montana shared the ownership of Colstrip units 1 and 2 with Puget Sound Energy.