Talen Montana, the Talen Montana Retirement Plan and other plaintiffs have filed two lawsuits in the Montana state court seeking to recover $733 million from PPL Corporation, affiliates of PPL and current and former PPL directors.
Talen Montana says the funds were extracted by PPL from Talen Montana’s business during PPL’s tenure as owner of PPL Montana between 1999 and 2016, without regard to PPL Montana’s financial condition or ability to satisfy its liabilities. Talen Montana says this left PPL Montana and its successor, Talen Montana, unable to meet the long-term obligations of its Colstrip plant on its own.
Colstrip is a four-unit, 2094-MW coal-fired facility in Montana. Talen Montana owns 50% of Units 1 and 2 and has a 15% economic interest in Units 3 and 4. The plant employs about 320 people.
“Over the last two years, we have worked tirelessly to improve the difficult financial condition of the Colstrip power plant that we inherited from PPL,” said Dale Lebsack, president of Talen Montana. “We are asking PPL to fulfill its obligations to the Colstrip plant, the state of Montana, and to the Colstrip plan employees and retirees.”
The first lawsuit, a class action suit filed by the Talen Montana Retirement Plan and other plaintiffs, claims PPL and its directors improperly transferred $733 million in proceeds from the sale of its Montana hydroelectric assets, leaving Talen Montana without adequate funds to pay its obligations on its own.
The second lawsuit, filed by Talen Montana, asserts that PPL and certain of its directors breached their fiduciary duties by causing PPL Montana to pay an improper $733 million dividend to PPL Corp. in November 2014, in the amount of the new proceeds of the Montana hydroelectric asset sale received by PPL. These funds should have remained with Talen Montana to fulfill PPL’s legacy obligations in Colstrip, Talen Montana says.
Talen Montana will establish a Montana state remediation trust for any recovery in these actions. Assets from the trust will be deployed to fund and pay for PPL’s legacy obligations, including environmental remediation obligations in Montana and pension and benefit expenses for employees of the Colstrip plant.
PPL Montana operated 11 hydroelectric power plants along Rosebud Creek and the Missouri, Madison, Clark Fork and Flathead Rivers, as well as coal-fired plants at Colstrip and Billings. In 2014, NorthWestern Energy acquired several these 11 hydropower plants from PPL Montana in a $900 million deal.