MTPR

Legal Fight Continues Over Colstrip Pension, Cleanup Costs

Nov 30, 2018

Colstrip operator Talen Energy was sued Friday by a former parent company over claims of responsibility for worker pensions and environmental cleanup costs at that coal-fired power plant in southeast Montana.

The suit filed by Pennsylvania-based PPL Corporation in a Delaware court says Talen Montana is without merit trying to recover more than $700 million from its predecessor. 

Today’s complaint from PPL is a countersuit to court filings in Montana from Talen in late October.

In them, Talen claimed that PPL stripped significant value from its Montana holdings before spinning them off into the Talen Montana company, in 2015.

Talen says PPL fraudulently transferred money from its sale of 11 hydroelectric dams in Montana to add to its own profits, then spun-off liabilities of worker pension funding and environmental cleanup costs at Colstrip, to Talen.

In an October press release the company wrote that PPL’s improper handling of that money was, “leaving Talen Montana without adequate funds to pay its obligation on its own.”

However, according to the Billings Gazette, Talen Montana later clarified that it would  cover its obligations to Colstrip workers and to environmental cleanup costs.

Ryan Hill, a spokesman for PPL, says Talen’s situation, along with its affiliate Riverstone Holdings LLC, is a result of choices made by those groups, and not PPL.

“Out of the gates we positioned Talen well for success. And we had no control or responsibility over what happened after that spinoff.” 

Hill says at the time of the spinoff, pension plans, which cover Colstrip employees and retirees, were well funded.

A Talen spokesperson told Montana Public Radio Friday afternoon that they had not yet seen PPL’s complaint, but Talen will continue with its own lawsuits and defend itself against PPL’s allegations.

Talen Energy owns 50 percent of Colstrip units 1 and 2, and owns 30 percent of Units 3 and 4.

Colstrip’s older units, 1 and 2, are scheduled to shut down in four years because of a Clean Air Act Lawsuit settlement.

The coal-fired power plant in Colstrip employs about 320 people.