PPL Corporation announced this month it had reached an agreement with Talen Energy Corporation to resolve disputes surrounding the name of a PPL Energy Supply spinoff.
Under the agreement, PPL will pay Talen $115 million to resolve all claims between the parties. PPL said the agreement avoids continued litigation costs for suits brought in two courts in Montana more than five years ago. Initially, Talen had sought more than $900 million in proceeds from PPL’s sale of PPL Montana’s hydroelectric assets.
“Since this litigation was initiated by Talen, we have maintained our position that PPL acted appropriately with regard to the sale of the Montana hydro assets and that the separation agreement governing the spinoff of PPL Energy Supply entitled PPL to retain the proceeds from the transaction,” Vincent Sorgi, PPL’s president and CEO said. “Nonetheless, we recognize there is risk inherent to any litigation defense. Moreover, Talen’s bankruptcy filing in May 2022 ended any meaningful opportunity for PPL to recover financially on its various counterclaims.”
The conflict arose in 2015 when Talen Energy became an independent, publicly traded company. Its assets included competitive generation assets spun off by PPL, including PPL Montana and its Colstrip assets. In its claims, Talen alleged that proceeds from a sale of PPL Montana’s hydroelectric assets in November 2014 were improperly distributed, leaving PPL Montana, now named Talen Montana, unable to meet certain financial obligations.
Sorgi said PPL chose to move forward rather than fight it out in the courts.
“With the likelihood of multiple additional years of litigation and appeals before us, we have concluded that it is in the best interest of PPL and our shareowners to bring a certain end to this litigation,” Sorgi said. “Looking forward, our focus and our energy will continue to remain squarely on creating the utilities of the future to advance a responsible clean energy transition and drive long-term value for our customers and shareowners.”