Rising natural gas prices have left Talen Energy Supply overloaded with debt and short on cash, according to court documents it filed, seeking Chapter 11 protection for it and more than 70 of its affiliates—including Colstrip co-owner and operator Talen Montana—in the U.S. Bankruptcy Court for the Southern District of Texas on May 9.

The company, a subsidiary of holding company Talen Energy Corp., wants to slash its $4.5 billion debt load and get a $1.6 billion influx of new equity, according to its filings [22-90054].

The company also asked the court for permission to pay $22.8 million in operating and maintenance costs at Colstrip. Failure to pay the expenses "would disrupt and potentially restrict [Talen's] ability operate Colstrip Units 3 and 4," the Woodlands, Texas-based company said in a May 10 filing.

Additionally, not paying or even the perception of difficulties due to the bankruptcy proceeding could cause "controversies with each [vendor and co-owner], unnecessary costs and distractions, and corresponding harm to their businesses," the company said in the filing.

Talen Energy spokeswoman Taryne Williams told the Billings Gazette that bankruptcy would not affect the coal-fired power plant's operation or the company's role as a co-owner and operator, citing the Colstrip request it made to the bankruptcy court as a step to secure wages, health care and other worker benefits by asking the court's permission to pay critical vendors throughout the bankruptcy.

"In fact, by greatly strengthening [Talen Energy Supply's] financial position, this action will help bolster Talen Montana's ongoing commitment to Colstrip and the State of Montana, and TES intends to move as quickly as possible through the process," Williams said according to the newspaper.

Talen began planning for a bankruptcy filing as early as April 2021, according to testimony filed with the court.

The company also is suing Colstrip's former owner, PPL, as part of the bankruptcy proceedings for fraudulently withholding as much as $900 million from Talen.

In its complaint against PPL, Talen says the company pocketed the cash from selling its hydropower resources to NorthWestern Energy in 2014 and left Talen with Colstrip and the now closed coal-fired Corette power plant. In short, Talen was stuck with "coal-fired assets, which are projected to generate negative cash flows for the foreseeable future and are burdened with substantial environmental and other liabilities," the company told the court.

Colstrip co-owners Portland General Electric and Avista told Clearing Up that they are not concerned about the plant's operations.

Avista "will be engaged in the process to ensure our interests and those of our customers are protected," Annie Gannon, a spokeswoman for the utility, said in an email. "We expect operations to continue as normal as the process continues."

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Contributing Editor

Dan has covered stories from Seattle to Tbilisi; spent time with the AP, Everett Daily Herald and Christian Science Monitor; and was twice a member of a team nominated for a Pulitzer Prize. He and his wife have three young children and live in Seattle.