TLN

Talen Energy is a power generation company headquartered in Houston, Texas, operating one of the largest competitive power fleets in the United States. The crown jewel is the Susquehanna nuclear power station in Pennsylvania — a 2.2 GW dual-unit boiling water reactor that provides carbon-free baseload electricity. Adjacent to Susquehanna sits the AWS Data Campus.

The Amazon relationship defines Talen's investment case. In June 2025, Talen executed the "Amazon 2.0" PPA — restructuring the original behind-the-meter arrangement into a front-of-the-meter deal and doubling volumes to 1,920 MW, contracted through 2042 with extension options. The front-of-meter structure means Talen is obligated to deliver power anywhere in Pennsylvania (not just at the adjacent campus), giving AWS flexibility to direct power to multiple data center sites. The PPA ramps in 480 MW increments: the first 480 MW tranche is delivering and ramping now, with additional tranches tied to AWS campus build-out progress. The deal represents approximately $18 billion in notional revenue over 17 years. The PPA also includes acceleration provisions — if AWS builds data centers faster than projected, earlier tranches can be pulled forward.

Beyond Susquehanna, Talen has been aggressively growing. The Freedom and Guernsey acquisitions closed in November 2025, adding approximately 2.8 GW of efficient CCGT capacity for $3.8 billion, including a foundational position in Ohio and Western PJM. Management describes these as >40% accretive to free cash flow per share. The Cornerstone acquisition (three generation assets in Ohio and Indiana, ~2.45 GW) is expected to close "as soon as this summer" 2026, adding ~$500M in annual EBITDA run-rate and >$4/share in incremental annual adj. FCF. When complete, Talen will operate roughly 18 GW of generation capacity — a significant scale player across PJM.

FY2025 Adjusted EBITDA was $1.035B with $524M in adjusted free cash flow (exceeding the high end of revised guidance due to Freedom/Guernsey closing in November contributing 5 weeks of EBITDA). Q4 2025 adj. FCF of $292M alone exceeded all of FY2024, demonstrating the growth trajectory. The fleet generated ~40 TWh in 2025, up ~10% YoY, driven by higher dispatch across the fossil fleet. Safety metrics remained strong (recordable incident rate 0.55, below industry average) with fleet equivalent forced outage factor of 4.7%.

2026 guidance (excluding Cornerstone): Adj. EBITDA $1.75B–$2.05B, Adj. FCF $980M–$1.18B — roughly doubling FY2025 results. Liquidity exceeds $2B ($1.2B cash + full $900M revolver availability). Net leverage 3.0x using current net debt and 2026 EBITDA guidance midpoint, with a target to remain below 3.5x even after Cornerstone closes by year-end 2026.