By Suzanne Herel

FERC last week granted Talen Energy’s request to sell four generators totaling 1,351 MW to satisfy divestiture conditions the commission ordered last year in approving the company’s spinoff from PPL and Riverstone Holdings (EC14-112-02).

The original order offered two divestiture options; the alternate proposal FERC approved last week was submitted by Talen in September. (See Talen Seeks Change in Divestiture Options.)

FERC said the plan was in the public interest and had a comparable effect on competition as the other options.

Talen already has announced sales agreements for the four plants.

One is the 399-MW Crane coal-fired facility in Baltimore, which is being purchased by an affiliate of Avenue Capital Group, a global alternative investment firm, for an undisclosed sum. (See Talen to Sell Crane, Gets FERC OK on Deals.)

The remaining three are in Pennsylvania: The 704-MW combined-cycle Ironwood plant is being sold to a subsidiary of TransCanada, based in Calgary, for $654 million. The Holtwood and Lake Wallenpaupack hydroelectric projects, with a combined generating capacity of 292 MW, are being bought by a subsidiary of Quebec-based Brookfield Renewable Energy Partners for $860 million. (See Talen Energy to Sell 3 Pa. Generators for $1.5 billion.)

Talen requested the third divestiture option after failing to negotiate a lease extension for its 158-MW combined-cycle plant in Bayonne, N.J., which was part of the original two options. The lease expires Oct. 31, 2018, and Talen has notified PJM that it intends to deactivate the plant the following day.

That plant provides steam to a tank terminal storage facility, which owns the land on which the generator sits. That facility is owned by a subsidiary of the Australian conglomerate Macquarie Infrastructure.

Macquarie filed the only protest to Talen’s divestiture request, saying the terms of Bayonne’s lease have been known for the past 28 years — contrary to Talen’s claims that the lease termination was “not foreseeable or reasonably certain to occur when Bayonne was first included in the mitigation options.”

In its protest, Macquarie said it made an offer to buy the facility, “but the second stage of the bidding process was canceled before completion.”

FERC’s decision allows Talen to retain a group of generators known as the “Sapphire Units.” To address the commission’s concerns of horizontal market power, Talen will offer them into the PJM energy market within the 5004/5005 submarket at cost-based offers.