Talen Energy completes pipeline sale to ease debt
84-mile line runs through part of the Lehigh Valley; cost for NJ company $155 million
Talen Energy Corp. said Monday it has closed on the sale of its 84-mile Pennsylvania pipeline to a New Jersey energy company for $155 million, a move Talen said will help it pay down debt.
The deal, announced in November 2017, marks the final piece of Talen’s plans to sell $325 million in noncore assets. Talen, which has offices in downtown Allentown, announced those plans in December 2016, shortly after its decision to become a privately held company after being acquired by private investment firm Riverstone Holdings.
Adelphia Gateway LLC, a subsidiary of New Jersey Resources Corp., acquired the pipeline, which technically belonged to Interstate Energy Co., a Talen subsidiary. It runs between Lower Mount Bethel Township in Northampton County and Marcus Hook in Delaware County.
The line supplies natural gas to Talen’s plants, known as Martins Creek and Lower Mount Bethel. The pipeline passes through five other Northampton County municipalities, as well as Bucks, Montgomery, Chester and Delaware counties. Adelphia plans to take a 50-mile portion of the pipeline to run natural gas to the greater Philadelphia area.
The pipeline deal originally was pegged at $189 million, including $166 million base price and up to $23 million upon meeting certain regulatory approvals and binding natural gas capacity commitments, according to NJR’s 2019 annual report. Talen said the $155 million marked the closing price, not including about $10 million paid when the deal was announced in 2017.
Talen spokeswoman Taryne Williams said an unspecified number of Interstate Energy employees were provided positions with Adelphia or Talen. A spokesman for NJR did not return a message seeking comment.
Once a publicly held company formed out of a division of PPL Corp., Talen operates power plants in Pennsylvania and other states, and says it is one of the largest independent power producers in the U.S. It sells the energy the plants generate to utilities and other mostly commercial customers. The industry has been beset by stagnant demand, low energy prices and tight profit margins.
Talen, which once employed about 500 people at a Pennsylvania headquarters at the former PPL Plaza on Hamilton Street, now has offices on two floors of Allentown’s Tower 6 and moved its headquarters to The Woodlands, Texas.
The deal required approvals from the Federal Energy Regulatory Commission and the Pennsylvania Public Utility Commission, according to the NJR’s annual report filed with the U.S. Securities and Exchange Commission. NJR is headquartered in Wall Township, New Jersey.
Morning Call reporter Anthony Salamone can be reached at 610-820-6694 or asalamone@mcall.com.