ByTom Lutey, Billings Gazette
Talen Energy attempted to put its bankruptcy in the best possible light Thursday in a meeting with Montana legislators about what the company’s restructuring meant for Colstrip Power Plant.
In a hearing that lasted roughly an hour, Debra CEOL. Raggio, a Talen senior vice president who appeared by Zoom, asserted the bankruptcy was good for the state’s largest power plant and wouldn’t negatively impact environmental cleanup or employee pensions tied to Colstrip.
Raggio characterized the decision by several Talen core creditors to swap $1.4 billion in unsecured debt for ownership as an investment in a company creditors believe in. There will be no change in the way Talen operates, she said.
“Talen will have owners but the reason they’re investing in this company is because they believe in the plan that we’ve shown them and the business plan and how we’re operating. It is not going to be a brand new approach,” Raggio told the Energy Telecommunication Interim Committee in a livestreamed hearing. “It is not going to be a brand new approach there. There isn’t a desire to sell off assets or change things significantly upon emergence to my knowledge. We can’t predict what will happen, but given that they want to participate after hearing the plans and our assets and how we structure and how we run things, at least I feel confident that things aren’t going to change that much.
Talen’s debt is roughly $4.5 billion. In its bankruptcy filing May 9, the Texas-based company said that its seven coal-fired power plants had become unprofitable in markets where power from gas-fired generators and renewable energy sources were more cheaply priced. The company’s bankruptcy consultant informed the U.S. Bankruptcy Court for the Texas Southern District that Talen planned to eliminate coal at its wholly-owned facilities, which doesn’t include Colstrip.
The Montana Department of Environmental Quality emphasized Thursday that Talen’s cleanup bond to cover the company’s share of environmental costs was in hand, should the state by default become responsible for cleaning up the power plant’s toxic coal ash ponds at a cost of several hundred million dollars.