Talen Energy Stock Surges on Plant Purchases. It's Not Just a Nuclear Play. -- Barrons.com

Dow Jones07-18

By Adam Clark

Talen Energy stock was soaring early Friday after it expanded its power plant portfolio. This time it's gas rather than nuclear that has the market excited.

The independent power producer said late Thursday it would acquire two combined-cycle gas-fired plants for $3.5 billion. It is financing the deal by issuing $3.8 billion in new debt, which will also be used for refinancing.

The acquired plants are Caithness Energy's Moxie Freedom Energy Center in Pennsylvania and Caithness Energy and BlackRock's Guernsey Power Station in Ohio. Both are located in the Pennsylvania-New Jersey-Maryland Interconnection, or PJM, market.

Talen shares were up 15% in premarket trading at $303.00. The stock has more than doubled in the past year, largely on enthusiasm about its deal to provide nuclear energy to data centers for Amazon.com. The increasing need for energy to power artificial-intelligence technology has supported Talen and peers Constellation Energy and Vistra.

"The addition of the [gas-fired plants] to Talen's portfolio enhances Talen's ability to offer reliable, scalable, grid-supported and regionally diverse low-carbon capacity to hyperscale data centers and large commercial off-takers," the company said in a statement.

Earlier this week President Donald Trump appeared at an event in Pennsylvania where more than $92 billion in new investments in AI and energy infrastructure were announced in the region. Alphabet's Google pledged a $25 billion investment toward data center and AI infrastructure across the Pennsylvania, New Jersey, and Maryland region over the next two years.

Talen said the deal is in line with its target of annual share buybacks of around $500 million through 2026, with its aim being to return to capital allocation of 70% of adjusted free cash flow thereafter.

Write to Adam Clark at adam.clark@barrons.com

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July 18, 2025 06:51 ET (10:51 GMT)

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