PPL fires back against Colstrip owners; seeks to move $730M dispute to Delaware

Posted at 4:43 PM, Nov 30, 2018
and last updated 2018-11-30 20:41:24-05

HELENA – Pennsylvania-based PPL Corp. filed its own lawsuit Friday in a legal dispute with the Colstrip power-plant operator over $733 million in proceeds from the 2014 sale of a dozen Montana hydroelectric dams.

Talen Energy, which operates the four coal-fired power plants in Colstrip in southeast Montana, sued PPL in state District Court in late October, saying it should get the $733 million to cover pension costs for Colstrip workers and plant cleanup costs.

But in a legal action filed Friday in Delaware, PPL said the Montana lawsuits should be dismissed and the case transferred to Delaware, where the company is incorporated.

The PPL lawsuit also said that Riverstone Holdings, a private-equity firm that owns Talen, drained $500 million in cash from Talen in 2017 and is now trying to blame PPL for Talen’s financial misfortune.

“Riverstone decided to advance its own interests above those of Talen Montana and, thus, leave Talen Montana high and dry,” the suit said. “Riverstone … initiated the Montana lawsuits in a brazen effort to hold (PPL) liable for Riverstone’s own avarice and recklessness.”

Talen and Riverstone took control of the Colstrip power plants in 2015, in a spinoff from PPL.

The coal-fired plants in Colstrip have faced increased financial difficulty as their power becomes less marketable and is undercut by cheaper alternatives.

About 320 people work at the Colstrip plants, whose electricity output is owned by Talen and several regional utilities.

Taryne Williams, a spokeswoman for Talen, told MTN News Friday that the company will push forward with its lawsuits in Montana and “defend itself vigorously against PPL’s allegations.”

PPL Montana, a subsidiary of PPL Corp., bought portions of the Colstrip plant and a dozen hydroelectric plants from Montana Power Co. in 1998.

It then sold the hydro plants back to Montana Power’s successor, NorthWestern Energy, in 2014, and PPL Corp. also spun off ownership of the Colstrip plants and other holdings to Talen and Riverstone the next year.

The lawsuit Friday said that when Talen was created to take control of the power plants, Riverstone was “completely aware” that PPL was selling the hydro projects and that $904 million in proceeds would got to PPL.

It asked the Delaware court to block the lawsuits in Montana and declare that PPL is entitled to the proceeds from the 2014 sale of the hydroelectric dams.

Joanne Raphael, senior vice president and general counsel for PPL Corp., said in a statement Friday that the company will ask the Montana courts to dismiss Talen’s lawsuits.

“We are very proud of the record we established in maintaining and operating PPL Montana’s assets,” she said. “We believe Montanans deserve nothing less from Talen under its current ownership by Riverstone.”