Talen Sells a Gas Plant’s Capacity Through 2036

HOUSTON, Nov. 11 — TalenTalen Energy has sold 750 megawatts of capacity from its Guernsey gas plant in Ohio to an investment-grade buyer it did not name, under a seven-year agreement it expects to bring in about $100 million a year. The contract covers the PJM delivery years 2029/2030 through 2035/2036, the Houston company said on Wednesday.GuernseyA combined-cycle natural gas plant in Byesville, Ohio, which Talen bought in November 2025. Its annual report calls Guernsey and its sister plant, Freedom, some of the most efficient gas plants in the market.

With the capacity auctions already cleared, Talen said, it now has “ten years and approximately $1 billion of cumulative capacity revenue visibility from these megawatts.”

PJM, which coordinates the wholesale power grid in all or parts of 13 states and the District of Columbia, pays power plants to stand ready, and usually buys that capacity at auction three years ahead. Talen has now sold seven years of Guernsey’s capacity to one buyer, and says the deal, with its contract with Amazon Web Services, raises the contracted share of its gross margin to 40 percent through 2036. Two days earlier, NRG Energy and Constellation Energy had told investors that the data-center deals were still coming; Talen did not say whether its buyer has anything to do with data centers.

“We are continuing to convert the value of our advantaged assets in advantaged locations into durable, long-term cash flows supported by strong creditworthy customers,” said Mac McFarland, Talen’s chief executive, in the company’s release. “This agreement locks in capacity economics while preserving our energy market upside and advancing the Talen flywheel.”The FlywheelTalen’s annual report calls its cycle of “contract assets, add assets, contract again” the “Talen flywheel.”

Terry Nutt, Talen’s president, who becomes chief executive on Jan. 1, said in the same release that the company had “multiple paths to improve the contracted nature of our cash flows, and this transaction is another example.”

This agreement locks in capacity economics while preserving our energy market upside and advancing the Talen flywheel.

The Other Sales

Talen also signed separate agreements for the remaining 588 megawatts at Guernsey, for 2029/2030 alone, and for 702 megawatts from its Waterford Energy Center, also in Ohio, for the three years through 2031/2032. In all, Talen said, the agreements contract more than two gigawatts for PJM’s 2029/2030 year and 1.45 gigawatts for each of the two years after. It now has more than a third of its accredited capacity under long-term contract, counting contracts that run through 2034 and beyond, it said.

The Price

About $100 million a year for 750 megawatts works out to roughly $365 a megawatt-day, by our arithmetic, about 12 percent above the $325 at which PJM’s latest auction, for 2028/2029, cleared.Megawatt-DayA megawatt of capacity held ready for one day. PJM states its auction prices in dollars per megawatt-day of unforced capacity. That auction cleared at its price cap, PJM’s report shows. In April, federal regulators extended the same price collar, a floor of about $175 a megawatt-day and a cap of about $325, to the 2029/2030 auction, which has been put off to December, Talen’s quarterly report says.

The comparison is rough. Talen gave only an approximate figure, did not name the buyer or disclose the contract’s other terms, and our figure assumes the payments are spread evenly over each year.

Talen’s shares closed Wednesday at $378.71, up 4.85 percent, on a day the S&P 500 rose 1.31 percent. Constellation Energy gained 2.60 percent and Vistra 1.73 percent.