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Item 5. Other Information

2024-11-14 compared with 2024-08-13 · 38 added, 92 removed, 173 unchanged (43% of the section changed)

OTHER INFORMATION

During the three months ended June 30, 2024, none of our directors or “officers” (as such term is defined in Rule 16(a)-1(f) under the Exchange Act) adopted or terminated a “Rule 10b5-1 trading agreement” or “non-Rule 10b5-1 trading arrangement” (each as defined in Item 408(a) and (c) of Regulation S-K).

During the three months ended September 30, 2024, none of our directors or “officers” (as such term is defined in Rule 16(a)-1(f) under the Exchange Act) adopted or terminated a “Rule 10b5-1 trading agreement” or “non-Rule 10b5-1 trading arrangement” (each as defined in Item 408(a) and (c) of Regulation S-K).

3.1*** Third Amended and Restated Certificate of Incorporation of Talen Energy Corporation (incorporated by reference to Exhibit 3.1 to the Registrant’s Registration Statement on Form S-1 (File No.

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333-280341) filed with the SEC on June 20, 2024).

Amendment No.

2 and Waiver to Credit Agreement, dated as of May 8, 2024, by and among Talen Energy Supply, LLC, as borrower, the subsidiary guarantors party thereto, the lenders party thereto and Citibank N.A., as administrative agent, collateral agent and replacement lender (incorporated by reference to Exhibit 10.3 to the Registrant’s Registration Statement on Form S-1 (File No.

333-280341) filed with the SEC on June 20, 2024).

31.1* Certification of Chief Executive Officer (Principal Executive Officer) Pursuant to Rules 13a-14(a) and 15d-14(a) under the Securities Exchange Act of 1934, as Adopted Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.

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Such adjustments are computed consistently with the provisions of our indebtedness to the extent that they can be derived from the financial records of the business.

Pursuant to TES’s debt agreements, Cumulus Digital contributes to Adjusted EBITDA beginning in the first quarter 2024, following termination of the Cumulus Digital credit facility and associated cash flow sweep.

Pursuant to TES’s debt agreements, Cumulus Digital Holdings contributes to Adjusted EBITDA beginning in the first quarter 2024, following termination of the Cumulus Digital TLF and associated cash flow sweep.

Annual Financial Statements.

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and its affiliates.

Bankruptcy Court.

The United States Bankruptcy Court for the Southern District of Texas, Houston Division.

The March 2024 power purchase agreement between the Company and AWS pursuant to which (i) the Company agreed to supply up to 960 MW of long-term, carbon-free power to the Cumulus Data Campus from Susquehanna;

(ii) the parties agreed to fixed-price power commitments that increase in 120 MW increments over several years;

and (iii) AWS, under certain conditions, has the option to cap their commitments at 480 MW.

Bilateral LC Agreement.

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A Talen-owned and operated generation facility in York Haven, Pennsylvania.

A Talen-owned and operated generation facility in Camden, New Jersey.

Capacity Performance.

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Coal Combustion Residuals, including but not limited to fly ash, bottom ash, and gypsum, that are produced from coal-fired electric generation facilities.

A generation facility comprised of four coal-fired generation units located in Colstrip, Montana (collectively, the “Colstrip Units”).

Talen Montana operates the Colstrip Units, owns an undivided interest in Colstrip Unit 3, and has an economic interest in Colstrip Unit 4.

A generation facility comprised of four coal-fired generation units located in Colstrip, Montana.

Talen Montana operates Colstrip, owns an undivided interest in Colstrip Unit 3, and has an economic interest in Colstrip Unit 4.

Colstrip Units 1 and 2 were permanently retired in January 2020.

See Note 10 in Notes to the Annual Financial Statements for additional information on jointly owned facilities and Talen Montana’s ownership interests in the Colstrip Units.

Colstrip AOC.

The “Administrative Order on Consent” entered into in 2012 (with minor amendments in 2017) between Talen Montana (on behalf of the co-owners of the Colstrip Units and in its capacity as the operator of Colstrip) and the Montana Department of Environmental Quality.

A generation facility located in New Florence, Pennsylvania, in which Talen Generation, through a direct subsidiary, owns a 22.22% undivided interest.

Conemaugh is operated by an unaffiliated party.

See Note 10 in Notes to the Annual Financial Statements for additional information on jointly owned facilities.

See Note 10 in Notes to the Annual Financial Statements for additional information on jointly owned facilities and Talen Montana’s ownership interests in Colstrip.

Credit Agreement.

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Collectively, the RCF, the Term Loans, the TLC LCF, and the Bilateral LCF.

Cumulus Coin.

Cumulus Coin LLC, an indirect subsidiary of Cumulus Digital Holdings that owns a 75% equity interest in Nautilus as of June 30, 2024.

Cumulus Data.

Cumulus Data LLC, an indirect subsidiary of Cumulus Digital Holdings that initially developed the Cumulus Data Campus.

See Note 17 for information on the sale of the Cumulus Data Campus to AWS.

Cumulus Data Campus.

The zero-carbon data center campus initially developed by Cumulus Data adjacent to Susquehanna See Note 17 for information on the sale of the Cumulus Data Campus to AWS.

The zero-carbon data center campus initially developed by a subsidiary Cumulus Digital Holdings adjacent to Susquehanna.

See Note 17 for information on the Cumulus Data Campus Sale.

Cumulus Data Campus Sale.

The Company’s sale, in March 2024, of certain assets of Cumulus Data, which included all of the land, power infrastructure, powered shell and intangibles of Cumulus Data Campus, to AWS for gross proceeds of $650 million, $300 million of which is to be released from escrow upon achievement of certain development milestones.

The Company’s sale of the Cumulus Data Campus to AWS in March 2024 to AWS for gross proceeds of $650 million.

See Note 17 for more information.

Cumulus Digital.

Cumulus Digital LLC, a direct subsidiary of Cumulus Digital Holdings and the indirect parent of Cumulus Data and Cumulus Coin.

Cumulus Digital Holdings.

Cumulus Digital Holdings LLC, a subsidiary of TES and the direct parent of Cumulus Digital.

Cumulus Digital Holdings LLC, a subsidiary of TES that, through its subsidiaries, (i) initially developed the Cumulus Data Campus;

and (ii) holds the Company's interest in Nautilus.

Cumulus Digital TLF.

The Cumulus Digital term loan facility, due September 2027, under which Cumulus Digital borrowed $175 million from affiliates of Orion to support Cumulus Coin’s required contributions to Nautilus, as well as Cumulus Data’s construction of certain shared infrastructure supporting both Nautilus and the Cumulus Data Campus.

The term loan facility, due September 2027, under which a subsidiary of Cumulus Digital Holdings borrowed $175 million from affiliates of Orion to support required contributions to Nautilus and construction of certain shared infrastructure supporting both Nautilus and the Cumulus Data Campus.

The Cumulus Digital TLF was repaid in full and terminated in March 2024.

A Talen-owned and operated generation facility in Dartmouth, Massachusetts.

May 17, 2023, the date that the Plan of Reorganization became effective in accordance with the terms thereof and TEC, TES, and the other debtors emerged from the Restructuring.

Environmental Protection Agency.

EPA 2015 Ozone Standard.

The EPA’s 2015 revision to the 8-hour ozone National Ambient Air Quality Standards for ground-level ozone to 70 parts per billion, based on extensive scientific evidence about ozone’s effects on public health and welfare.

EPA CCR Rule.

National regulatory standards required by the EPA for the management of CCRs in landfills and surface impoundments.

The Cross-State Air Pollution Rule, which requires 28 states in the eastern half of the U.S.

to reduce power plant emissions that cross state lines and contribute to ground-level ozone and fine particle pollution in other states.

A cap-and-trade system is used to reduce the target pollutants — sulfur dioxide and nitrogen oxides.

EPA ELG Rule.

Effluent limitation guidelines, which are national regulatory standards required by the EPA for wastewater discharged from specific industrial categories, including but not limited to coal-fired electric generation facilities, to surface waters and municipal sewage treatment plants.

EPA GHG Rule.

New Source Performance Standards (NSPS) and emission guidelines for certain electric generating units established by the EPA to address greenhouse gas (GHG) emissions.

EPA MATS Rule.

Mercury and Air Toxics Standards, EPA technology-based emissions standards for mercury and other hazardous air pollutants emitted by generation units with a capacity of more than 25 megawatts.

National Emissions Standards for Hazardous Air Pollutants, an EPA standard that is applicable to the emissions of hazardous air pollutants produced by corporations, institutions and government agencies.

Earnings per share.

The Electric Reliability Council of Texas, operator of the electricity transmission network and electricity energy market in most of Texas, which is responsible for, among other things, scheduling electric deliveries and performing financial settlements for the competitive wholesale bulk-power market.

The Electric Reliability Council of Texas, operator of the electricity transmission network and electricity energy market in most of Texas.

The sale of our ERCOT fleet to CPS Energy in May 2024.

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Federal Energy Regulatory Commission.

FERC regulates interstate transmission and wholesale sales of electricity, interstate transportation of natural gas and oil, hydropower projects and natural gas terminals.

Generally Accepted Accounting Principles in the United States.

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Independent System Operator.

A generation facility located in Shelocta, Pennsylvania, in which Talen Generation, through a direct subsidiary, owns a 12.34% undivided interest.

Keystone is operated by an unaffiliated party.

See Note 10 in Notes to the Annual Financial Statements for additional information on jointly owned facilities.

Letter of credit.

LMBE-MC TLB .

The term loan B facility, due December 2025, under which certain subsidiaries holding the Lower Mt.

Bethel and Martins Creek facilities borrowed $777 from affiliates of MUFG.

Obligations under the LMBE-MC TLB were guaranteed by those subsidiaries and secured by a first priority lien and security interest in substantially all of their assets.

The LMBE-MC TLB was repaid in full and terminated in August 2023.

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Megawatt hour, or megawatts of electric power per hour.

Nautilus Cryptomine LLC, a joint venture owned, as of June 30, 2024, 75% by Cumulus Coin and 25% by TeraWulf, which owns and operates a cryptomining project on land leased from AWS at the Cumulus Data Campus.

Nautilus Cryptomine LLC, a cryptocurrency joint venture owned, as of September 30, 2024, 75% by a subsidiary of Cumulus Digital Holdings and 25% by TeraWulf.

In October 2024, the Company purchased TeraWulf’s minority interest and now owns 100% of Nautilus.

See Note 15 for more information.

Net asset value.

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Nuclear facility decommissioning trust for Susquehanna.

North American Electric Reliability Corporation, a not-for-profit international regulatory authority whose mission is to assure the effective and efficient reduction of risks to the reliability and security of the grid.

Nuclear Regulatory Commission, which was created as an independent agency by Congress in 1974 to ensure the safe use of radioactive materials for beneficial civilian purposes while protecting people and the environment.

The NRC regulates commercial nuclear power plants and other uses of nuclear materials, such as in nuclear medicine, through licensing, inspection and enforcement of its requirements.

North American Electric Reliability Corporation.

Nuclear Regulatory Commission.

The nuclear production tax credit under the Inflation Reduction Act.

Orion Energy Partners, whose affiliates were third-party lenders under the Cumulus Digital TLF.

Ozone Season.

A period of time in which ground-level ozone reaches its highest concentrations in the air.

Ozone Transport Commission.

A multi-state organization created under the Clean Air Act responsible for advising the EPA and implementing regional solutions to ground-level ozone issues.

The following series of Pennsylvania Economic Development Financing Authority (“PEDFA”) Exempt Facilities Revenue Refunding Bonds:

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The PEDFA 2009B Bonds and PEDFA 2009C Bonds currently remain outstanding and are guaranteed by certain of the Subsidiary Guarantors.

PJM Interconnection, L.L.C., the RTO that operates the electricity transmission network and wholesale power market in all or parts of Delaware, Illinois, Indiana, Kentucky, Maryland, Michigan, New Jersey, North Carolina, Ohio, Pennsylvania, Tennessee, Virginia, West Virginia and the District of Columbia.

PJM’s “Avoidable Cost Rate” defined under the PJM Open Access Transmission Tariff, if the formula that serves as the PJM MSOC.

PJM Base Residual Auction.

A component of the PJM RPM, the PJM Base Residual Auction, is intended to secure power supply resources from market participants in advance of the PJM Capacity Year.

PJM Interconnection, L.L.C., the RTO that coordinates the movement of wholesale electricity in all or parts of Pennsylvania, New Jersey, Maryland, 10 other states, and the District of Columbia.

PJM Base Residual Auction, a component of PJM’s capacity market intended to secure power supply resources from market participants in advance of the PJM Capacity Year.

It is usually held during the month of May three years prior to the start of the PJM Capacity Year.

PJM Capacity Year.

PJM capacity revenues delivery years cover the period from June 1 to May 31.

Independent Market Monitor for PJM, who is intended to operate independently from PJM staff and members to objectively monitor, investigate, evaluate and report on PJM’s markets and is responsible for guarding against the exercise of market power.

Minimum Offer Price Rule, which limits the minimum price at which certain units can bid into the auction due to certain external subsidization.

PJM Market Seller Offer Cap, which is the price ceiling applied by PJM to certain capacity sell offers and is based on the PJM ACR.

PJM’s capacity market, or the Reliable Pricing Model, formed under PJM’s Open Access Transmission Tariff, which is intended to ensure long-term grid reliability by securing the appropriate amount of power supply resources needed to meet predicted energy demand in the future.

Under PJM’s “pay-for-performance” model, generation resources are required to deliver on demand during system emergencies or owe a payment for non-performance.

PJM Capacity Year.

PJM capacity revenues for delivery years cover the period from June 1 to May 31.

A generation unit that is otherwise slated to be retired but agrees with PJM to remain operational beyond its requested deactivation date as a reliability-must-run resource to mitigate reliability concerns until necessary upgrades can be established.

Plan of Reorganization.

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Property, plant, and equipment.

PPL Corporation, the former indirect parent holding company of Talen Energy Supply and Talen Energy Corporation until 2015.

Relates to the financial position or results of operations of Talen Energy Supply for periods prior to Emergence, or May 17, 2023.

Prepetition CAF.

The Credit Agreement, dated as of December 14, 2021, as subsequently amended, supplemented, or otherwise modified, among Talen Energy Supply, as parent, Talen Energy Marketing and Susquehanna, as borrowers, the lenders party thereto, and Alter Domus (US) LLC, as administrative agent, which established a senior secured commodity accordion revolving credit facility.

Prepetition RCF.

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Registration Statement.

The TEC registration statement on Form S-1 pursuant to the Securities Exchange Act of 1933 as filed with the SEC on June 20, 2024 (file number 333-280341).

Reliability-Must-Run.

Refers to a generating unit that is slated to be retired by its owners but is needed to be available for reasons of reliability.

It is typically requested to remain operational beyond its proposed retirement date until transmission upgrades are completed.

These arrangements have been used to keep certain power plants operating past their planned retirement dates in order to prevent reliability problems.

TEC’s registration statement on Form S-1 pursuant to the Securities Act of 1933, as filed with the Securities and Exchange Commission on June 20, 2024 (File No.

333-280341), as subsequently amended, supplemented, or otherwise modified.

Restructuring.

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The Regional Greenhouse Gas Initiative, a mandatory market-based program among certain states, including Maryland, New Jersey and Massachusetts, to cap and reduce carbon dioxide emissions from the power sector.

RGGI requires certain electric power generators to hold allowances equal to their carbon dioxide emissions over a three-year control period.

RGGI allowances, as issued by each participating state, represent an authorization for a power generation facility to emit one short ton of carbon dioxide.

Allowances may be acquired by auction or through secondary markets.

Pennsylvania has proposed joining this market-based program.

Riverstone Holdings LLC and certain of its affiliates.

Rosebud Mine.

A coal mine in Montana owned by Westmoreland Rosebud Mining, LLC that supplies coal to the Colstrip Units.

RGGI requires

certain electric power generators to hold allowances equal to their carbon dioxide emissions over a three-year control period.

Pennsylvania has proposed joining this program.

Regional Transmission Organization.

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Talen Energy Supply, LLC, a direct subsidiary of Talen Energy Corporation that, thorough subsidiaries, indirectly holds all of Talen’s assets and operations.

Talen Generation.

Talen Generation, LLC, a direct subsidiary of Talen Energy Supply that, through its subsidiaries, owns and operates generation facilities, and holds interests in other jointly owned, third-party operated generation facilities, in Pennsylvania, New Jersey and Maryland.

Talen Montana.

Talen Montana, LLC, a Talen subsidiary that operates the Colstrip Units and owns an undivided interest in Colstrip Unit 3 and is party to a contractual economic sharing agreement for Colstrip Units 3 and 4.

Talen Montana, LLC, a Talen subsidiary that operates Colstrip, owns an undivided interest in Colstrip Unit 3, and is party to a contractual economic sharing agreement for Colstrip Units 3 and 4.

TeraWulf (Thales) LLC, a wholly owned subsidiary of TeraWulf Inc.

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The senior secured term loan B facility in an aggregate principal amount of $580 million (and subsequently increased to $870 million in August 2023) under the Credit Agreement.

Obligations under the TLB are guaranteed by the Subsidiary Guarantors and secured by a first priority lien and security interest in substantially all of the assets of TES and the Subsidiary Guarantors.

Obligations under the TLB are guaranteed by the Subsidiary Guarantors and secured by a first priority lien and security interest in substantially all of the assets of Talen Energy Supply and the Subsidiary Guarantors.

The senior secured term loan C facility in an aggregate principal amount of $470 million under the Credit Agreement, the proceeds of which are available to support the issuance of standby and trade LCs under the TLC LCF via 100% cash collateralization.

Obligations under the TLC are guaranteed by the Subsidiary Guarantors and secured by a first priority lien and security interest in substantially all of the assets of TES and the Subsidiary Guarantors.

Obligations under the TLC are guaranteed by the Subsidiary Guarantors and secured by a first priority lien and security interest in substantially all of the assets of Talen Energy Supply and the Subsidiary Guarantors.

The $470 term letter of credit facility established under the Credit Agreement.

The TLC LCF is cash collateralized with the proceeds of the TLC, and commitments thereunder are reduced to the extent that borrowings under the TLC are prepaid.

The Western Electricity Coordinating Council, a not-for-profit entity that ensures the reliability of the electricity transmission network and energy market in all or parts of Arizona, California, Idaho, Montana, Nevada, New Mexico, Oregon, South Dakota, Texas, Utah, Washington, the Canadian provinces of Alberta and British Columbia and the northern portion of the Mexican state of Baja California.

Winter Storm Elliott.

An extra-tropical cyclone that occurred in December 2022 that created a storm of snow, rain and wind across the country.

The winter cyclone had widespread impacts across the United States and caused PJM to declare a Maximum Generation Emergency Action.

Winter Storm Uri.

A major winter and ice storm that occurred in February 2021 that had widespread impacts across the United States, including systemic energy market disruptions and price volatility throughout ERCOT.

The Western Electricity Coordinating Council, a non-profit corporation that assures a reliable and secure bulk electric system in the Western Interconnection, covering all or parts of Montana, 13 other U.S.

States, Canada, and Mexico.

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

August 13, 2024 By:

November 14, 2024 By:

Chief Financial Officer

Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-Q

Item 5. Other Information