Talen Energy (TLN) Q3 2025 Earnings Transcript

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DATE

Wednesday, Nov. 5, 2025 at 4:15 p.m. ET

CALL PARTICIPANTS

President and Chief Executive Officer — Mac McFarland

Executive Vice President and Chief Financial Officer — Terry L. Nutt

Chief Commercial Officer — Christopher E. Morice

Chief Strategy Officer — Cole Muller

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TAKEAWAYS

Adjusted EBITDA -- Adjusted EBITDA was $363 million for the third quarter of 2025, and $653 million for the first nine months of 2025.

Adjusted Free Cash Flow -- Adjusted free cash flow was $223 million for the third quarter of 2025 and $232 million for the first nine months of 2025, with the quarter reflecting higher CapEx related to the Susquehanna outage.

Liquidity -- $1.2 billion in liquidity available for working capital as of the third quarter of 2025, including $490 million in cash, as of the latest update.

2025 Guidance -- Adjusted EBITDA is trending toward the low end of the narrowed range due to limited price volatility and an extended Susquehanna outage.

2026 Guidance -- Management reaffirmed adjusted EBITDA and free cash flow targets for 2026, citing increased forward prices and confidence in future cash generation.

Capacity Additions -- Susquehanna site has been electrified and continues to build under an agreement with AWS, while the Montour site is undergoing zoning and permitting work for further development.

Acquisitions Status -- Freedom and Guernsey acquisitions remain pending, with the HSR refiled and the DOJ’s 30-day timeline expiring November 17; management indicated closing could occur as soon as late 2025.

Financing Activity -- $2.7 billion in senior unsecured notes and $1.2 billion senior secured term loan executed last month to fully fund acquisitions, with rates described as “attractive.”

Bank Facility Increases -- Revolving credit facility raised to $900 million and letter of credit facility to $1.1 billion, with maturity extended to December 2027, in support of acquisition activity.

PJM Load Growth -- Weather during the third quarter of 2025 was flat, but PJM’s average electricity demand increased by 3.4% on a weather-adjusted basis compared to the same period in 2024, with two of the highest summer peak demand days in history recorded in June.

Operational Performance -- 28 terawatt hours generated year-to-date, with over 40% from the Susquehanna nuclear plant; The year-to-date 2025 forced outage rate was elevated, primarily due to prolonged outages at Martins Creek, which have now been resolved.

Nuclear PTC Monetization -- Approximately $190 million in nuclear production tax credits were sold during the third quarter of 2025, enabled by tax reform benefits and expected to reduce cash tax burden for several years.

Share Repurchase Program -- $2 billion of authorized repurchases remains available through year-end 2028 post-acquisition, and a $500 million annual share repurchase target for the post-acquisition deleveraging period.

Net Leverage -- The forecasted year-end 2025 net leverage ratio is approximately 2.6 times, with a pro forma net leverage target to stay below 3.5 times by year-end 2026.

Battery Development -- A memorandum of understanding signed with EOS Energy for the deployment of Pennsylvania-manufactured long-duration batteries at PJM sites, citing safety and duration benefits over lithium-ion technology.

SUMMARY

Talen Energy Corporation (NASDAQ:TLN) reported $363 million in adjusted EBITDA and $223 million in adjusted free cash flow for the third quarter of 2025, reflecting limited third-quarter price volatility and extended outages at Susquehanna. Management confirmed that full-year 2025 adjusted EBITDA (non-GAAP) will likely be at the low end of guidance but reaffirmed 2026 guidance due to increases in power market forwards. The company successfully secured $3.9 billion in new financing to support pending Freedom and Guernsey acquisitions, alongside increases to revolving and letter of credit facilities. PJM market fundamentals strengthened, evidenced by a 3.4% weather-adjusted load increase compared to the same period in 2024 and historic summer peak demand, with management highlighting the critical role of batteries and peaking assets in meeting near-term capacity needs. Talen’s monetization of nuclear production tax credits and extended labor agreements further bolstered financial flexibility, while the AWS data center ramp and new large-load contracts remain central to the “Talen flywheel” growth strategy. The company continues to evaluate additional M&A and balance sheet options, while targeting a net leverage ratio of 3.5 times, with flexibility to exceed this for the right opportunity

CEO McFarland said, “We are reaffirming 2026 guidance and we are starting to see forwards tick up. Gas is up, sparks are expanding, and load continues to be strong.”

Chief Financial Officer Nutt reported, “Last month, we successfully executed several financing transactions at attractive rates, to fully fund the acquisitions. Including $2.7 billion of senior unsecured notes and a $1.2 billion senior secured term loan.”

Chief Commercial Officer Morice identified “all-time high VRA clears” in PJM capacity auctions, noting tightening fundamentals and declining reserve margins as significant market changes.

Talen’s approach favors portfolio-level corporate debt over project-level securitizations, with a strategic emphasis on long-dated, large-volume contracts to support credit metrics and future acquisitions.

Management highlighted engagement with hyperscalers and consortia to address resource adequacy, while emphasizing that near-term contracting strategy is not dependent on acquisition closing timelines.

INDUSTRY GLOSSARY

PJM: Regional transmission organization coordinating wholesale electricity in the eastern U.S., a key market for Talen Energy Corporation.

Adjusted EBITDA: A non-GAAP earnings measure that excludes specified items from earnings before interest, taxes, depreciation, and amortization for comparability.

Adjusted Free Cash Flow: Cash generated from operations after capital expenditures, excluding non-recurring or unusual items, used to assess discretionary cash availability.

Nuclear PTC: Federal production tax credit for nuclear generation, which can be monetized for cash or tax benefits.

HSR: Hart-Scott-Rodino Antitrust Improvements Act, a U.S. regulatory process for merger and acquisition approvals.

VRA Clear: PJM capacity market clearance price for Variable Resource Adjusters, indicating auction results for capacity supply commitments.

Capacity Factor: The ratio of actual output from a power plant versus its maximum possible output over a period.

CCGT: Combined Cycle Gas Turbine, a high-efficiency natural gas-fired power plant design frequently discussed for future capacity needs.

SMR: Small Modular Reactor, an advanced nuclear technology considered for supporting additional data center or hyperscale load.

Full Conference Call Transcript

Mac McFarland: Great. Thanks, Sergio, and welcome, everyone, to today's call. Appreciate your ongoing interest in Talen Energy Corporation. Before we review the quarter, I'd like to start with where we are as Talen Energy Corporation and talk about the broader landscape as we implement the Talen flywheel. Sitting here today, the overall market continues in the same trajectory as we've discussed in prior calls. AI and data center capital budgets continue to impress and expand. It seems like every day, there is another announcement, investment, or idea floated on how to power growing data center demand. Demand for power keeps coming, and we will need an all-of-the-above approach to solve the growth from the supply side.

Pennsylvania continues to drive economic growth. Governor Shapiro, the Pennsylvania PU, and the local communities have embraced these investments and recognized the advantages. It's why we recently signed an MOU with EOS Energy to partner on battery development in Pennsylvania and PJM using Pennsylvania-manufactured batteries. As I've said in the past, for the next five years, we are going to need to solve a capacity issue, not necessarily an energy issue. We believe batteries and peaking plants can solve this need much more readily than CCGTs and at an overall lower cost. CCGTs will be needed too, and we will look to build them in collaboration with the right partners and customers, but that is further off on the horizon.

While I have focused on Pennsylvania in these comments, we continue to be excited about the prospects in Ohio given the load there already exists, but more on that in the coming quarters. At Talen Energy Corporation, we have a number of things in flight.

First, we continue to execute under our existing agreements with AWS. The Susquehanna site continues to be built at an amazing speed and has been electrified. Second, we are working diligently to close the Freedom and Guernsey acquisitions, which will add to our baseload fleet and to our large load contracting strategy. As you know, we refiled our HSR application with the Department of Justice for a second time, restarting the 30-day timeline, which now runs through November 17. That said, we are pressing to get these deals closed as soon as possible and might be able to get them done as early as late this year.

We are optimistic that FERC can then act on our 203 filings in short order. In addition to pushing our regulatory approvals or pushing them along, we also recently closed on a highly successful financing package. Dale and the Fossil team are well underway on the planning to add both Freedom and Guernsey to the fleet, and Chris and the commercial team are ready to fold them into the portfolio when they can. We are truly excited to get going with these assets and want to thank the Cafeness team for the professional transition to date. Third, we continue to pursue additions to the flywheel through large load contracts and additional megawatts for the portfolio.

On the contracting side, there has been a fair amount of noise about our ability to contract, when we might be able to contract, how we might do so, and how we will manage the so-called gas risk. Trust me, when we hear all of that, we just go about our business. We built a good comprehensive playbook with the Amazon Susquehanna contract and are focused currently on execution. Our strategy remains the same. Our efforts have only been redoubled, our focus has sharpened, and our commercial learnings continue to expand.

We have been working on the next thing since we signed the first AWS contract in early 2024 and gained a lot of commercial knowledge by changing that contract to front of the meter. Refiling of our HSR on Freedom and Guernsey does not change our path. Let me be more explicit as to why the exact closing of these deals doesn't impact our near-term strategy. In the rest of the portfolio, excluding Freedom and Guernsey, we have approximately four gigawatts of gas-fired generation between Montour, Lower Mount Bethel, and Martin's Creek, as well as 300 megawatts of carbon-free power at Susquehanna remaining.

Our efforts at Montour continue, and I'm sure you have seen that we are working on zoning and permitting at the site. Which, by the way, if you were with us back in 2023, was the same activity we were undertaking at Susquehanna then. All of this activity goes on, all well before we close the acquisitions. And as I've said, we remain confident that we will still close the acquisitions in short order. So timing of closing of Freedom and Guernsey is really irrelevant to our contracting power strategy. We feel good about our ability to look to add further expansion of the portfolio through acquisitions, continue to explore free cash flow accretive deals.

And we are constantly challenging ourselves to reshape the portfolio. And I'm sure someone will ask, when we might expect to announce the next part of the flywheel. And I'll say the same thing that we always say, which frankly is next to nothing. Be the first to know when we're done. We want the right deals, not any deals, and not on anyone else's timeline. In the meantime, 2026 is setting up well. We are reaffirming 2026 guidance and we are starting to see forwards tick up. Gas is up, sparks are expanding, and load continues to be strong. All factors that continue to impact commercial positioning on long-term transactions.

Terry and Chris will walk you through what we are seeing in the markets in just a bit. Moving to the present, and Q3 on Slide two. As we said during our Investor Day call, we saw limited volatility and limited opportunity to capture incremental value in the third quarter. And the quarter was a little light of our internal expectations. But we already knew that and acknowledged that in September at our Investor Day. Going into the summer, we were looking to regain some of the lost opportunity from the spring outage at Susquehanna, but it just didn't materialize.

Both July and August experienced fewer peak load days when compared to June, and we experienced incremental forced outages as our fleet continues to run with higher capacity factors. During the quarter, we delivered $363 million of adjusted EBITDA and $223 million of adjusted free cash flow. So far in Q4, things are a bit better given the market move up, but we are still projecting to be at the lower end of our guidance range. As we previously stated at that September Investor Day.

Before I turn this over, I'd like to thank our entire Talen Energy Corporation team for their hard work and dedication, and I'm happy to let you know that we have reached a five-year extension of our Local 1,600 contract with the IVW. So a special thanks to Rusty and the IVEW leadership team. At Talen Energy Corporation, we are powering the future together.

Terry L. Nutt: Thank you, Mac, and good afternoon, everyone. Turning now to slide three. Mac covered the regulatory process, let me provide an update on the financing of Freedom and Guernsey. Last month, we successfully executed several financing transactions at attractive rates, to fully fund the acquisitions. Including $2.7 billion of senior unsecured notes and a $1.2 billion senior secured term loan that contains a delayed draw feature. The pricing we received exceeded our initial expectations. As the credit market continues to demonstrate demand for Talen Energy Corporation paper.

We also received commitments from our bank group to increase our existing revolving credit facility to $900 million and to increase our existing letter of credit facility to $1.1 billion while also extending the LC maturity date by one year to December 2027. All to further support the impact of the acquisitions on the financial operations of the business. Congratulations to the treasury and legal teams for a successful set of transactions. We are currently earning interest on the senior unsecured note proceeds and will not draw on the term loan until the closing of either the Freedom or Guernsey acquisition. Turning to slide four. As Mac said earlier, nothing has changed thematically.

The underlying fundamentals for Talen Energy Corporation's value proposition remain strong. Macro fundamentals and AI demand remain intact. Last week, we continued to observe the trend of hyperscalers seeing tremendous growth in their cloud and AI businesses. Which in turn has led them to continue to raise or affirm their capital investment plans. As you can see in the chart on the upper left, the projected growth of spend from hyperscalers continues in earnest. With total CapEx projected to be $700 billion in 2020. Not only is the capital commitment growing, but the acceleration of demand for power continues. For example, Amazon noted on their earnings call last week that they have accelerated capacity additions over the past twelve months.

By adding 3.8 gigawatts and expect to add over another one gigawatt in the upcoming fourth quarter. Further, they expect to double their overall capacity by 2027. Which would add in excess of 10 gigawatts of capacity in North America alone. We see significant load growth coming over the next decade, from hyperscalers as well as reshoring of manufacturing and the ongoing electrification of the economy. What about the current load conditions? Q3 2025 provides a clear example of the change in the load growth in the PJM market. Overall, Q3 weather was flat compared to the same period in 2024. As measured by cooling degree days. However, the average electricity demand was higher.

During the quarter, we saw approximately 3.4% of incremental power deliveries on a weather-adjusted basis in PJM when compared to the same period in 2024. A clear sign of demand growth in the market. That is expected to continue. Furthermore, for the first time in over a decade, we experienced two of the top peak demand days at PJM during the heat event in June. These two demand peaks registered in at the third and fourth highest summer peak demand readings in the history of the market. Further evidence of demand growth. Let me now turn it over to Chris to cover some additional market fundamentals on Slide five.

Christopher E. Morice: Thanks, Terry. This quarter, while relatively uneventful from a dispatch and weather perspective, did help validate our driving thesis. That data load is here and more is coming. As Terry mentioned prior, below the surface incremental load is beginning to manifest. We are seeing relative price strength in the face of very benign weather conditions. As cash markets are starting to feel this tightening, so too are the forwards. Looking at the chart on the right, you can see the marked response over the past couple of weeks. And as you can see further, it has been a recent phenomenon but one that we have been anticipating. Power is up. Sparks are widening.

It remains a good time to be in power. And further, a really good time to be in IPP focused on being an IPP. Our native position is long several thousand megawatts of generation spread across the supply stack. Outside of the PTC and the data PPA, we have no other natural hedges. This informs our commercial strategy and allows us to participate meaningfully when we take a view on the market. And you can reference the appendix in back for those hedge percentages. Similar to the forwards, the PJM capacity markets have been reflective of these tightening fundamentals as well. Expressed through the all-time high VRA clears.

PJM's shrinking reserve margins continue to be a topic of discussion both inside and outside of the RTO. PJM and the DOE have pledged potential supply shortfalls by 2030 if the trend isn't reversed. In addition to needing new supply resources, PJM's existing asset base will have to be relied on heavily to ensure grid reliability moving forward. The average amount of uncleared megawatts in the last two auctions was less than one gigawatt. And the recently released 27, 28 auction parameters show further evidence of continued tightening fundamentals. This auction is the final auction with capniflor in place. I'll note we remain active participants in ongoing stakeholder discussions with PJM and other governing bodies.

And we will see the results from that capacity auction on December 17. To you, Terry.

Terry L. Nutt: Now to slide six, which covers our year-to-date financial and operating results. For the nine months ended 2025, we are reporting $653 million of adjusted EBITDA and $232 million of adjusted free cash flow. Our liquidity remains substantial with $1.2 billion of liquidity available for working capital. Including approximately $490 million of cash available. Once we close on the Freedom and Guernsey acquisitions, excluding acquisition financing, our leverage ratio is still within our 3.5 times net debt to adjusted EBITDA target. Year to date, we generated 28 terawatt hours with over 40% of this generation coming from our carbon-free Susquehanna nuclear facility. Our year-to-date forced outage rate is higher than we have experienced in the past.

This higher outage rate was largely driven by outages at our Martins Creek plant. Which experienced prolonged outages due to induction fan repairs. These issues have been resolved, and the plant continues to serve as a peaking unit across the outages did contribute to our inability to capture some upside as previously noted. Safety remains our first priority across the fleet and our year-to-date recordable incident rate was 0.64. While higher than prior quarters, this remains well below the industry average. The commitment of the team to operate in a safe, reliable manner is an important part of Talen Energy Corporation's value proposition. Now turning on the financial results on slide seven.

For the third quarter 2025, Talen Energy Corporation reported adjusted EBITDA of $363 million and an adjusted free cash flow of $223 million. This quarter, our earnings include the higher 2025-2026 PJM capacity pricing of approximately $270 per megawatt day and an increase in energy margin. Adjusted free cash flow includes higher CapEx associated with the extended Susquehanna refueling outage. Additionally, we also have higher solar energy pricing. Moving now to guidance on Slide eight. With three quarters behind us, we are narrowing our 2025 adjusted EBITDA as we are trending towards the low end of guidance. As mentioned at our Investor Day.

Due to the lack of volatility in prices in the third quarter, and the extended outage at Susquehanna, that offset our strong 2025. Adjusted free cash flow remains near the middle of our original range, driven by our continued focus on generating the most cash flow per share as possible. We are affirming our 2026 guidance and remain confident in both our adjusted EBITDA and adjusted free cash flow numbers. All of this remains consistent with our Investor Day. We remain committed to returning capital to shareholders. In September, we announced another upsizing of our share repurchase program and we will have $2 billion of capacity remaining through year-end 2028 once we close on the acquisitions.

We are supportive of targeting $500 million of annual share repurchases during the post-acquisition deleveraging period. Once we reach our targeted leverage of 3.5 times or less, we intend to return to allocating 70% of adjusted free cash flow to shareholders on a significantly higher free cash flow base. Lastly, during the quarter, we sold nuclear PTCs for approximately $190 million. We were able to monetize the credits due to the additional benefits from tax reform implemented this summer. Along with the tax benefits from the upcoming acquisitions. Which will significantly reduce our cash tax burden for the next several years. The monetization is just another example of Talen Energy Corporation's focus on producing bottom-line cash flow.

The liquidity addition from these sales provides us more options on our deleveraging activity, share repurchases, and other strategic transactions. Turning to slide 10, As of October 31, our forecasted 2025 year-end net leverage ratio is approximately 2.6 times. Well below our target. We will be focusing on debt paydown after the acquisitions, to reach our targeted net leverage ratio by 2026. And our pro forma net leverage is expected to remain below 3.5 times by year-end 2026. With that, I'll hand the discussion back to Mac.

Mac McFarland: Great. Thanks, Terry, and thanks for everyone for joining us on the call. We look forward to your questions. We'll turn it back to the operator, Michelle, and open the lines for questions.

Operator: Thank you. And wait for your name to be announced. To withdraw your question, please press 11 again. And, again, we ask that you please limit to one question and one follow-up. And our first question is going to come from Angie Storozynski with Seaport. Your line is now open.

Angie Storozynski: Thank you. So my question is, as you said, Mac, every day, we seem to be hearing announcements about new power deals, just not from IPPs, it seems. I mean, we have conversions of Bitcoin miners, oil and gas companies are jumping in, you know, companies that completely have nothing to do with power until yesterday, seemingly building, you know, and gas plants, and yet we are still waiting for public and private IPPs to monetize their assets. So you are probably the last person I should push back against. Because you have been doing your share and some.

But are you concerned that, you know, existing assets are losing the time to power benefit to the new build and those conversions?

Mac McFarland: Yeah. Hi, Angie. And appreciate the push, actually. So, no, we're not concerned. We're going about our business, and we have been. As I've said during some of the remarks, there at the opening, we've continued to work to I think that, one of the things that we've done over time is learned a lot of commercial knowledge. We still think But I would note that complicated. They will come. They just take time. And that to me doesn't change the overall thesis nor does it change our thought process around this. It's just things take time.

I mean, if you think about it, we've gone from a behind the meter to, you know, we all know the history, but, you know, the behind the meter deal with the ISA being kinda thrown in the air, rejected, and then being, you know, solution, moved it to front of the meter, a lot of commercial learning there. Always said we think that gas is the capability gas portfolio to be specific not just single gas units that using a portfolio like we have the ability to backstop things, front of the meter type transactions that they're coming. And we continue to make progress.

I mentioned, for example, and I'll let Cole jump in here in a second, but like we're advancing things. I mean, you saw what's going on at the Montour site with the rezoning. We think that's a good opportunity. We've described that in probably maybe too much detail over the past six months so that everybody wants to know when we're gonna announce a deal there. But we're moving that forward. In a positive fashion, we're gonna get there. These things just take time. Cole?

Cole Muller: Yeah. I would just add that I think the deals that we've done, Angie, and continue to focus on are advantage from a speed to market, and we do provide an advantage there. Probably on a different time frame than some of the deals that you're referring to being announced recently. And so we're really focused on those kind of deals that can get sites up and running and powered in the near term, like, in our next, you know, year, two, three-year window, and as Mac said, they're a little complicated, and we like to go for the, you know, the gigawatt scale as well. And so it just takes some time.

But we're pleased with where we're at and where we're progressing and where we're going.

Angie Storozynski: Good. And just one follow-up. Mac, you mentioned expansion of your portfolio. So, I mean, I know that you have the three and a half times net debt to EBITDA leverage, you know, limit. I mean, is that a real limit, or could you, for example, address it by, I know, securitization of the revenues that are coming from the Susquehanna contract, just being a little bit more creative to give yourself more of a balance sheet room.

Mac McFarland: Well, I'll let Terry jump in here after he kicks me under the table because I always tell him that, you know, managing the balance sheet and credit's his problem, not mine. That's a joke, Angie, and for anybody on the credit side. Terry's now kicking me literally under the table. But the three and a half look. And I think we've said this before, in the way that we do capital allocation, think about hedging and cash flow hedging and how that ties into making sure that we have appropriate cash flows, etcetera. All of that ties into our overall strategy. We set net leverage at three and a half times. We said that we're willing to toggle it.

We are toggling it for a short period of time. It we take on this new debt, as we close Freedom and Guernsey acquisitions, but we've made a commitment to return the three and a half times net leverage by 2026. So we all pull on all those strings. I think that when you looked at the appetite, and Terry mentioned that there was an appetite when we went through this financing for our paper, I think it was well subscribed. We got good rates at beat, you know, we were anticipating, which is great to exceed that. And there is an ability to do things.

But when it goes to the creative securitizations, I go back to and I'm gonna let Terry jump in here clean up this. But, like, doing the securitizations and doing project level financings and those types of things, we've made a concentrated effort concerted effort over the last several years to clean up the balance sheet taking out project level debt, taking out sponsors, taking out other people at lower levels in the projects, and put things on a corporate balance sheet which allows us to manage across a portfolio.

And we think that having a portfolio, having the commercial knowledge on how to structure long-dated large contracts, having that portfolio and having that corporate debt at that level provides us the opportunity to backstop it across the entire fleet, not just to project financing. Type level entity that you'd get into when you start securitizing things. We have people, and Terry can speak to this, I'm and Sergio as well, people come in and talk to us and wanna, you know, put a contract over there with an asset over there and securitize it and offer, you know, debt in that form. But that has a different you start to having to quarter off credit.

You have to start quartering off things as you deal with PJM. And all of those things to us don't make sense as much as having a portfolio that can provide long-term contracting solutions.

Terry L. Nutt: Yeah. Hey, Angie, it's Terry. Just to add on to Mac's comments. A couple of things. The 3.5 times leverage ratio, it's a target. For the right opportunity with the right return, we would be willing to push past that. The other thing to elaborate on is as we think about the serving our debt, serving our interests, just serving the operations of the business. As long as we've got contracted cash flows, that have limited risk, we feel really comfortable around that. This goes back to Mac's other comment.

When we think about the balance sheet and we think about the leverage with respect to, okay, how are we hedged, how comfortable do we feel about those cash flows and how does that sort of near-term outlook sort of all work together. And so we'll continue to do that. The other thing I'll add to it as well is as we've grown the business and as we've added on the initial AWS transaction in the second one, and then hopefully here in short order, the Freedom and Guernsey assets growing the earnings base, we're growing the cash flow base, which obviously has resonated with the credit market.

And so when I got here two and a half years ago, we had just issued some senior secured notes at, like, eight and five eighths, and here, just get off the back of issuing two sets of unsecured notes that have a six handle on the interest rate. And so our cost of debt is going down in recognition of how well the business is performing and how well we're growing. So think those things are all positive. They give us a lot of a lot of options as we think about growing the business and we utilize it as we move forward.

Mac McFarland: And that balance sheet just gets stronger over time as we grow into the contracted aspect as the ramp ramps up. With the existing AWS contract.

Terry L. Nutt: Yep.

Mac McFarland: Stand alone. But as we add more contracts to that, right, gonna further strengthen the balance sheet and provide for, you know, visible visibility to those cash flows. So maybe later, but not now. I think we like the position we're in and it gives us the flexibility to toggle things for short periods of time. And then get back to our net leverage. Of three and a half times net debt to EBITDA.

Angie Storozynski: Very good. Thanks, Anne. Awesome. Thank you, guys. Bye-bye.

Terry L. Nutt: Thanks.

Operator: And the next question comes from Shar Pourreza with Wells Fargo. Your line is open.

Shar Pourreza: Can you hear me?

Terry L. Nutt: Yes. Hey, Shar.

Mac McFarland: Excellent. Hey. So, Mac, just in Maryland, there's obviously a vocal IPP around supporting solutions to add incremental capacity. In the state's expedited CPCN solicitation process. I guess what's your thoughts around offering up alternatives and maybe again your view on the construct in that state? And then you can kind of be supportive of RA efforts there. Thanks.

Mac McFarland: Yeah. Thanks, Shar. I Look, you know, first, I'd say we're we're actually doing our part through the RMR. Those are units that we're slated to shut down under basically an agreement with the with the environmental firms, etcetera. And so we've worked hard to get execute those RMRs. We are looking at, you know, would it make sense to get more gas to that site and prolong and convert But you gotta be able to get gas to that site, and we're working with the local utility But that's gonna you know, that's gonna take some time.

Think that if but we where we have assets and where we're located there, it probably doesn't lend to sort of redevelopment in the size that you could do further on the Eastern Side. Of The Bay, Which Is Over Towards Chalk and that area, Chalk Point, there's a couple CCGTs there's open land, etcetera. And getting gas across the river or the Lower Bay or Upper Bay, however you wanna talk about it, is you know, that's a difficult proposition.

So but we're working to try to get incremental gas there to see if we can take that coal unit and convert it like we did know, convert Brandon like we did at Montour and as we have done, mean, we have the ability to do it. Breck Brunner. Look, if there if there was an ability to figure something else out, you know, we'd look at it. But right now, that's, that's how we see us contributing to Maryland.

Shar Pourreza: Got it. Okay. That's perfect. And then just lastly, shifting gears to Pennsylvania. I guess Mac, what do you need to see the build there? I mean, have you had any discussions with the utilities on their views of Resource Adequacy Solution and is there a common ground there that you can strike? It just seems like when you're hearing from Exelon and PPL, there's discussions to be had, but I just want to get a sense from you. Where the bid ask is there. Thanks.

Mac McFarland: Yeah. Sure. Well, first of all, there's the whole SIPP that's going on about, you know, how do how do we solve that? And we've been active in that, and we've got a couple things that we're working up as to provide solutions there. We worked up a proposal with a consortium that included couple hyperscalers as well as some other IPPs and trying to be constructive there. I think that the real issue is that you know, we are concerned about the so-called rate shock of capacity prices going to $3.30. In this last clear and $2.70 before. But those prices do not support new build.

If you look at any of the economic analysis done as part of the quadrennial review, it's $500 a megawatt day. Okay? And then you get into the debate of, well, one you know, capacity clear incentivize that build. We think that there needs to be some structural changes to provide a longer-term perspective there. For new build. There is talk about you know, building in rate base, but it's always done if they if there's the right contract or the right ability or the right returns. And even if you do that, it's at $2,500 a k w.

And even though the energy curves have ticked up and the capacity markets have moved up, they do not equate to what is necessary for a new build CCGT. We actually think that CCGTs are a solution that are needed in the future when overall energy demand rises, but there's plenty of energy on the grid. We can run mid merit and peaking units more. We're setting our units up to do that. We mentioned Martins Creek and know, we're running them harder and have less time for maintenance offline, etcetera. We're making adjustments in CapEx and O and M, as Terry mentioned earlier in the remarks. Those can sop up a lot of energy demand.

But it goes back to solving the fifty to one hundred hours a year of capacity that needs to be solved. And we just think that is lends itself better to things like batteries, or peakers rather than CCGTs and at lower overall cost and should be utilized. But to do those, a lot of people are sitting around thinking, okay. Well, if we're not there yet, then you know, it and it's easy for us to say. Right? We'll do something if someone provides us the right level of return for the investment. Over a long-term contract. Well, that's true too, but the energy and capacity market aren't there yet.

But I do think you're going to see them get there over the next period of time. Year two. It's gonna be solved by something other than CCGTs because it's just a speed to market thing. You cannot get a CCGT built by this time. And, you know, the question that preceded you here talked about all these other solutions. Well all of those other solutions are high-cost solutions that people are not grasping at, but they're they're, you know, proposing But they're very high-cost solutions because of the technology that's being used, but people are looking at it as a speed to market.

And so need to get CCGT going in the long term but we've got to solve this fifty to one hundred hours in the near term, and we just think that gonna be able to participate in that by adding to our fleet and Peaker's batteries, if we can get the right return mechanisms or if we can integrate it right with contracts of that nature. So I hope that answers your question, Shar.

Shar Pourreza: It does. It does. Yeah. There's obviously some more wood to chop there, but I appreciate it. Thank you, Mac. We'll, we'll see you soon.

Mac McFarland: Okay. Thanks, Shar.

Operator: And our next question will come from Bill Apicelli with UBS. Your line is open.

Bill Apicelli: Yes. Hi. Thanks. I just wanted to build upon, some comments you just made there. You mentioned earlier about energy prices moving up. What are your thoughts on what's driving that? And know, where can that go? Right? I mean, if you if you discuss what you just mentioned there around the mid merit and the peakers running more. Right? I that's gonna drive up the marginal cost on the energy side a bit. So, I mean, you know, is it driving to you know, the upper eighties, $90 in terms of cost of new entry on an energy level? Or how do we think about sort of what the backdrop is for the wholesale power markets?

Mac McFarland: Yeah. I good question. I let's see if I can not mix metrics here. Look. On a megawatt hour basis all in, I think you're looking at a 120 plus. For a CCGT on a greenfield development, and you're looking at a twenty thirty plus delivery time frame of COD. I do think that you can find ways to add the so-called additionality to the grid that are cheaper than that and quicker than that. I do think that and to your point, and this is a little bit about what Chris mentioned when he talked about the curve and the recent phenomenon of going up the curve. Some of that's gas driven.

A little bit, but some of it's also people looking at it and saying sparks are expanding because you're getting to higher cost units filling the energy demand. This overall energy demand is going up, so energy prices should go up. As Chris said, we've been waiting to see that and people often ask us and even until recently, I mean, just if you look at that chart that Chris was talking about, it's only been, like, the last three weeks that this thing's gotten a bit. And but we were anticipating that it was gonna go there. We set the portfolio up on that to think about, you know, when we go in and lay our cash flow.

I just obviously there's some timing that you can apply there, but there's also you know, as Terry mentioned, managing the cash flow hedges to protect the downside. As we look at security for having cash flows for debt service, etcetera, share buybacks, all the like. So do think that energy markets are gonna go up. I don't know if it's 85, but we're starting to see on peaks go up. And quite frankly, for the first time in a in a decade, we're starting to see summer on peak start to beat winter. On peak. That hasn't been a phenomenon for a decade. In PJM.

And as you know, I think Terry mentioned that third and fourth highest peak days in June. Yeah. That we've seen. So a lot of this stuff is starting to manifest itself. I think that the tip of the iceberg was the two seventy and then the three thirty, and that's capacity market because it's further out in time. Now you're starting to see it in the in the twenty six and twenty seven forwards. And we just think that thesis is continuing.

Terry L. Nutt: So Yeah. And maybe, Bill, to add to Mac's comments, really your second part of your question. I think what you're seeing in the forwards is really driven by what we're seeing in the fundamentals, right? We've seen We've gone, I mean, effectively decade with sort of flat to no growth in the PGM market from a load standpoint. And now we're starting to see tangible load growth on a year over year basis. And that expectation is going to continue. I think the recent peaks that we hit during the summer are other good indicators of it.

Then also just people rolling forward and actually really thinking about how they're going handle their wholesale power cost in 'twenty seven and 'twenty eight and beyond. We've seen more activity in the market We do think it's fundamental based. And we think it's constructive. And to Mac's earlier point, to get to the level of value to where you can build a CCGT or anything else. Right? The devil's in details of what is that total cost and then what return are you solving for. But we're still far away from that point.

To Mac's comment, we think that number is well over $100 per megawatt And so we've got quite a bit of ways to go before we can hit that point.

Bill Apicelli: Okay. No. That's very helpful. And then as far as additional you know, asset acquisitions or you need to speak to you know, what's what's out there, and is there are there things that you would still consider, you know, folding into the portfolio? At this point when you kind of are making the evaluations around capital allocation?

Mac McFarland: Bill, I think we on that, we'll continue what we always say is obviously we're always in the market looking for things. When we find something that we like and we think fits where we want to go, we'll definitely let the market know about it. As you've seen, generally, right, there's still a lot of M and A activity in the space. It varies from one asset to small portfolios. Obviously there's been several larger M and A deals done this year. Across the IPP space, but still a lot of activity.

I think there's still a lot of holders of assets that have held them for a while that are probably in a spot where they're looking for an exit. And then obviously you've seen Talen Energy Corporation and others engage from a buyer's standpoint. So Still active, still looking at things as they come they come around across our desk. And as we get as we get to a place where we find something, we'll talk about it then.

Bill Apicelli: Alright. Great. Thank you so much.

Mac McFarland: Thanks, Bill.

Operator: And the next question comes from Jeremy Tonet with JPMorgan. Your line is open.

Jeremy Tonet: Hi. Good afternoon.

Mac McFarland: Hey, Jeremy.

Jeremy Tonet: Just wanted to pivot to battery storage if you could. And wondering if you could talk a bit about why you chose the partner you chose. And do you have any thoughts specifically on long-duration energy storage for AI data center applications?

Mac McFarland: Yes. Look, first of all, you know, we're working with EOS and looking at the deployment there. And there's something that we talk about long duration, which obviously their technology provides for long duration, but it also can be, you know, discharged at for four hours can be discharged for up to twelve hours. You can go across that spectrum, and you can adjust it over time and reload the battery. I think that is critical because, you know, managing load that helps in managing load. When we think about batteries, we kinda think of them as net load. If you will, which is reducing peaks, goes back to the fifty to a hundred hours.

And can you do that across time? So we think that there's a good match up there. I will also tell you that because of the technology that EOS uses, has a distinct advantage in that the fire protection needed is not the same as lithium-ion or other batteries. And so because of the technology, it doesn't have the same components and doesn't need that. That allows them from a and I think Cole can probably expand on this. But as we think about load, and we talk about colocation, but I wanna talk about just like colocation relative to the grid.

Being able to have batteries next to data centers or next to a nuclear unit or next to one of our other generating units, you know, you don't wanna have to worry about fires there and that associated. So it has that incremental advantage as well as the advantage of being able to match up on a time duration at different intervals. Obviously, efficiencies go down depending upon what you choose, etcetera. But those are the two benefits I see. And then the ability again, that goes back to colocation. I don't know if there's anything you wanted to add there, Cole.

Cole Muller: No. I think it's an interesting, technology and opportunity for us that we're exploring and better understanding the value that the battery solution may provide to data centers is something that, you know, certainly core to why we wanna kind of, proceed with some kind of partnership like this. And so we're exploring it and having discussions around what that value stream is and, you know, as those solutions present themselves, I'm sure we'll be kinda talking more about that.

Jeremy Tonet: Got it. Thank you for that. And just want to pick up, I guess, with the, you know, the forward curve moving up a bit here as you touched on before. I'm just wondering granted it's recent, the moves you're talking about here, has that started to, I guess, filter into conversations on long-term contracts, just these upward moves? Is that changed anything in conversations?

Mac McFarland: Power is not getting any cheaper. So I think it informs things. But when we're we think about long-term contracts, I'm looking at Cole here to jump in, thinking about things over the long term. And we like matching that load over the long term as Cole said, in the gigawatt size and, you know, in the large size, over time. And when you think about long-term contracts, the markets have gone up, they've gone down, etcetera. We like the ability to take our assets, contract them, provide the appropriate level of return, reduce risk, therefore, we would contend would generate effectively the ability to have a lower free cash flow yield because it's lower risk.

And higher valuation, and that's the Talen flywheel that we're trying to implement.

Cole Muller: Yeah. And I think as energy prices go up, it informs us on the terms just the pricing, but the overall terms as Mac's talking about of any future deals. And also, I'm sure, informs the counterparties on what their views are and what term and pricing and risk and so forth. So look, I mean, I think as Mac said, we're gonna do deals on our timeline. And I think as power prices are continuing to push higher, it continues to give us conviction that we're gonna look at the right deals. In size and pricing and all the terms.

And, there's no need to go rush to contract, But I'll actually do that them prudently at the right time.

Mac McFarland: And I but I also think I would just add that when you can't see there's no visible curve for ten years. Whether capacity or energy. And so we're sitting back thinking about what is appropriate returns. How do we think about counterparty, how do we think about guest, how do we think about backstopping with the portfolios, to manage all those different things get into that. And then what does that do to our creditability that Terry was talking about earlier in managing our leverage ratio. There was a question earlier about could you do different things with your balance sheet? As you grow into having a higher contracted portfolio over time.

You could certainly do different things, but we're just not there yet. But we think that this is an overall you know, we've got to embed the right risk the right premium for taking these longer-term views, and the counterparty has to do the same thing as Cole was saying. Then it just takes two to tango.

Jeremy Tonet: Got it. That's helpful. Thank you.

Mac McFarland: Thanks, Jeremy.

Operator: And our next question will come from Steve Fleishman with Wolfe Research. Your line is open.

Steve Fleishman: Yes, hi. Good afternoon. Maybe following Angie's initial question, just in terms of the customer interest how much is kind of the desire for additionality in any way impacting demand? For more contracts for you? And do you see likely I mean, the SUS deal had potentially adding SMRs. And do you see some type of new investment likely being part of any deals that you do?

Mac McFarland: Hey. Hey, Steve. It's Mac. Team can jump in. I look. I definitely think that the so-called additionality, I'm not even sure, there's a standardized definition of that, but you know, incremental megawatts to serve incremental load is kind of how I'm gonna frame it. But I do think that over time, we're not out of energy right now. We're actually not capacity short. Markets are clearing at the administrative caps and the things, and we clear closer to the real caps if left uncapped, but we're starting to get to the point, and these are in the out years, of needing megawatts. But there's also the ramp of data centers over time.

And the two of those things at some point you're gonna have to say, alright, How do we make sure you know and it's the so-called BYOP or BYOG, bring your own power, bring your own generation, etcetera. Things are gonna intersect later in the decade. And, you know, we're supportive of thinking about how do we solve that in market construct and our contracting strategies etcetera. It just hasn't ripened yet. I think that there's just been a lot of talk about it. I think there's a lot of people out there with a lot of solutions.

Trying to bring you know, offering power without, you know, saying we can do certain things, but there's no offtakes associated with those yet. That just hasn't ripened. I don't think and Cole can jump in here, but I don't think the demand or the desire for quickly to connect power or to have power towards the end of the decade is changing, It's just how do you solve that? And we're actively thinking about that.

Cole Muller: Yeah. And I would just say that, the data center, the hyperscalers and everyone in the data center build-out space is really thinking about the problem in multiple I guess, lanes. You know, as Mac talked about before, different phases of power. Again, there's, like, the near, medium, and longer term. I think the medium and long term yes, hyperscalers are looking at how do they add megawatts to the grid as they ramp up. But they're also very, very focused on the near term, 2026, 2027, 2028, and so we see them still being very active in getting existing power and connecting to existing power. And that's really, as I said earlier, where we're focused on.

And then if there's an ability to also participate in a longer-term solution, as we've talked about in previous settings around SMRs or new build as Terry was talking about earlier, you know, have those conversations and exploring that as well. But, you know, to me, it's they're so very focused now on getting power as you saw I'm sure, you know, hyperscaler CEOs talking about doubling their capacity by 2027. 2025. Right? And the only way to do that is through existing power on the grid, and so they're from our all of our conversations, very, very interested.

Steve Fleishman: Okay. And then you know, PPL also reported today, and, I mean, their high probability gigawatts of data center demand by the end of the decade. They're I mean, it's like a double or triple of their current peak. And so I'm curious just maybe Chris could talk too, just are you seeing all the zonal discounts that you historically had in there kind of start going away yet? In the forward curve? Is it does at some point this actually kind of flip maybe even do a premium? Or just I'm curious what you're seeing there.

Mac McFarland: Yeah. Steve, it's Mac. I'll take this. We lost Chris, unfortunately, due to some conflicts here. But that, Steve, is something that is the next evolution of what we think is going to happen. But if you think about ramp rates and etcetera and where generation is on the grid today in the basis differential. I think what you're asking, if I'm understanding correctly, is, like, PPL zone versus West Hub.

PPL zone trades at a disc Well, over time, as you build load there, you start to sort of soak up the incremental megawatts there and you move the East West interface West so, therefore, you get closer to, you know, the West Hub and so therefore, it starts to close that differential. That's probably not a necessarily near-term phenomenon. Until these things get ramped up. So if you think about our Susquehanna nineteen twenty, that ramp's full ramp is 2031. 2020 '31, '32. So we're four or five years from that. So there's no Steve, there's no way for us to go out and test the market.

But I don't know that we would I think we would be in 2032 thinking that PPL should be a lot flatter to West Hub. In that time frame.

Terry L. Nutt: And Steve, maybe just to add to Mac's comments, that basis market historically, especially in the term, the term will react if there are large transmission projects and transmission projects that are being executed and built upon. But excluding that or excluding those projects that are out there and getting those completed, it does have a bit more of a recency bias of, Okay, how is it showing up in the real time? How is that basis showing up? As load comes in? As we see more of that as the load comes into the PPL zone, I think that'll inform the term market a little bit more.

Then you'll start seeing a change respect to that it's a little bit more of a nuanced market in the fact that it trades off of fundamentals around transmission and then just what sort of a more recency bias, if you will?

Steve Fleishman: And then just one last quick one. The Martins Creek issue this quarter, and you mentioned you're just running these peakers harder. Just are you looking at needing to ramp up capital spending at all to do anything to the to those units you know, for next year?

Mac McFarland: Yes. And it was included in what we put into our guidance. And but we're also thinking about, Steve, it's sort of this thing you've been doing this and covering it as long as I've been doing it too. But, like, the you know, as power markets come off, you have to start to curtail capital plans and think about the way that the plans get dispatched. When you go in the reverse direction, you have to do the same thing. We put more capital into 25. We're putting more into 26.

But what we're also noticing, and I mentioned this, is not only do we are we getting extended run times and extended dispatch, if you will, of the peakers, Montour, particular, Martins Creek, etcetera. That Martins Creek was less than 4% type capacity factor for a couple years ago and now is running teams, you know. And so but what's going on is in the past, we always had the ability to take the unit offline Okay? And had an extended period offline by which we could do maintenance. Now we're seeing that okay, it's running, it's running for extended duration, periods of time and we don't have to do that.

So it's not just the capital that goes in, actually how you think about maintenance and maintaining the units during that. That is definitely true. That is not the issue that it had in the Martin's Creek. We just had a particular ID fan that had some bearing sets took a while to get. We just didn't have that downtime by which to recapture get that ID fan done, and get it back in there. And it was just, you know, it was it was something. We're always fairly not fairly, I think we're you know, transparent with respect to giving you some color as to what happened, and that's what happened. And but we're excited about, quite frankly.

I mean, if you look at it overall, the idea and it's something that we've been talking about and it goes back to why are we seeing forwards tick up and why didn't we see them before, I don't know. But why are we seeing them now? It's because we're going further up on the dispatch curve. During most or the act every hour is now getting further and further up on the dispatch curve which means, you know, you're gonna be up with higher heat rate units. And so we're seeing that manifest itself across our fleet.

Steve Fleishman: Okay. Thank you.

Mac McFarland: Thanks, Steve.

Operator: And our next question will come from Nicholas Campanella with Barclays. Your line is open.

Nicholas Campanella: Hey, thanks for getting me on. Hi, Hey. So just on the commentary about Amazon doubling their overall capacity by 27, you know, that's their number. But just can you talk to the AWS ramp? Obviously, like, that data point is supportive, but just any indication that they could be ramping power draw sooner than expected? Any data points on the ground level that you can kind of point to? Thank you.

Terry L. Nutt: Yeah. So, Nick, maybe just to touch on that, and then I have Cole chime in on this as well. As Mac mentioned in his in the opening remarks, obviously, you know, the data center is powered. It's energized. They're taking, you know, taking electrons and moving forward. The construction of the site continues in earnest. Significant amount of work done, over the past several months. And they continue to push forward. Obviously, we don't want to get into too much detail around what their ramp is like and what they're doing from a confidentiality standpoint. But we're fairly comfortable with how they're pushing forward. Cole, you wanna add anything?

Cole Muller: Yeah. I would just kinda reiterate what we've talked about before and continued progress. There's multiple buildings being built on top of the building that we sold to them. Additional ground prep, again, anyone who drives by can see, you know, all the activity. And just one point to remind folks that we talked about back in June, is we transferred the old Nautilus buildings that can up to 200 megawatts over to Amazon. Now what they do with that, that's again, for them to speak to. But we see a lot of signs that acceleration is gonna continue, and they'll accelerate faster than the ramps we put out in June.

Nicholas Campanella: Awesome. And then just one cleanup question just with the acquisition. I just heard you I heard I hear you in prepared as working constructively with the DOJ. Could target closing sooner than 1Q twenty six now, but '26 guidance assumes Jan one close. So just talk to the conservatism in that '26 number at this point. Your ability to just kinda maintain that range if that gets pushed out?

Terry L. Nutt: Yeah. Yeah. So look, there's a lot of moving pieces to a guidance range. Right? Forwards are up. We've got the that's within the range of what we provide. We've got Potential for, you know, as we stated, this might slip into the Q1. We're still hopeful that we're working hard to get it done this year. And know, we'll see what happens. And as we get closer to that time frame, we'll provide updates on that. But we're just you know, we're not at a point that suggests to us that we should change that range right now. So as we get closer there, you know, we'll give you an update.

Nicholas Campanella: Thank you.

Terry L. Nutt: Yep. Thanks, Tim.

Operator: And then our next question will come from David Arcaro with Morgan Stanley. Your line is open.

David Arcaro: Oh, hey. Thank you. How are you doing? I was just curious maybe, where are we in terms of economics for battery storage? In PJM? I was just thinking about that EOS partnership and wondering if you could characterize how you're seeing that opportunity, across your fleet if you were to add battery storage?

Mac McFarland: Yeah. We're not we're not quite there, David, and sorry for using your name with Nick. Look, I think that we're we're not quite there and ready to get into that. I think we're in the early days. But as we look at the economics, look at the capital buildings, the cost of batteries come down, their ability to basically think about you know, and it goes back to I'll call it load balancing for all practice purposes. You could think of it as supply balancing, which is got a lot of incremental megawatts that can be run most of the hours except the peak. So why not use those to charge batteries and then discharge them during the peak?

And we think that can become a more economic piece over time. Obviously, batteries need to continue to evolve, bring their capital cost down, and then bring their optimization methodologies into play. And we think that works well when you think about how do you take a load that is for the most part, a base load I'm talking about data centers. And then think about how do you clip some of the peaks of that And then all you're doing is all using all the rest of the hours other than the 50 to 100. So we think it's gonna show some promise. But we're on the early days of getting through the economic model.

So it's just it's David, it's just too soon.

David Arcaro: Got it. I appreciate that. Thanks. I'll leave it there.

Mac McFarland: Okay. Thanks. Thanks, David.

Operator: And the next question will come from Julien Dumoulin Smith with Jefferies. Your line is open.

Julien Dumoulin Smith: Hey. Good afternoon, team. How are you guys doing?

Mac McFarland: Really well. How are you?

Julien Dumoulin Smith: Great. Thank you guys for the time. Look. Let me let me let me clean up a couple things here. One, on buybacks. I noticed there was much activity this quarter. Do you want to speak to that real quickly? And perhaps more relevant, again, you're gonna laugh here, Mac. But MMPI, anything to talk to on that front? Is there any twist there that's relevant?

Terry L. Nutt: Yeah. So, Julien, with respect to buybacks, obviously, we're fairly active during the quarter with Freedom and Guaranty acquisition and then also getting ready for earnings and financing. That really drove sort of the buybacks with respect to Q3. Working hard to get those acquisitions done and announced. And out there, and then working on our Investor Day materials as well. So that was a big driver of where we stood on buybacks in Q3.

Julien Dumoulin Smith: Okay. Sorry. You guys did do buybacks on Q3? So I that's what I was confused by.

Terry L. Nutt: No. We did not. Yeah.

Mac McFarland: We did not. And that's you know, you can see that it that we didn't disclose it, obviously, Jordan. It's Terry said, there's a lot going on during the quarter. And whether that's MMPI or getting ready for financings and blackout periods with the results and then closing freedom and or signing freedom and guarantee. Yeah. It's just you can call that m and p we'll we'll talk about MMPI in rears. Maybe. And that would that precluded us. You know, it had a large perclusion across the quarter.

Julien Dumoulin Smith: Absolutely. A couple of cleanup items. Is there any chance that you accelerate this SaaS deal? With AWS and then clean up the remainder of the stuff here. I mean, I just wanna come back to that concept. I mean, you talk about the ramp up to 31, 32. Everyone's, you know, grappling to get this stuff faster in theory. This is a question of execution, right, to get it done faster with you guys. Can you speak to that a little on the ability to ramp it up?

Terry L. Nutt: So, look, anecdotally, we speak about the with respect to Amazon. With respect to the contract, we actually you know, wanna maintain confidentiality with our counterparty there. We can speak anecdotally about them speeding things up. We said it's a lever that can be pulled. We stand ready to deliver 19, 20 megawatts whenever they wanna take it. That was the obligation that we said. And if you just think about where people are going and speed the market, when you have a site, that you're building at, you have the megawatts that are ready to go, that there's nothing more than speed to market than that.

And that's about all we can talk about because we're not gonna speak for Amazon. You'd have to talk to them. But we're excited about the possibility for them to ramp up And if they did, we're willing and able to serve.

Julien Dumoulin Smith: Excellent. Alright. No. Fair enough. I appreciate that. And then lastly, just would you be in a position to get another gas contract here prior to the close? Of these acquisitions? Or would you tie those two together? The extent to which you get that the acquisition gets kicked out in the one q.

Mac McFarland: Look, I think what you've written about this. Frankly. So it's a it's a good thing to have a discussion. I think that when we thought about this and let's step back before Freedom and Guernsey, before we had the announcement of Freedom in Guernsey, we were already talking about, you know, working on the next deal. That was even before we revamped to the 1920 front of the meter, and that's just a continuation of the process. And that's why when we looked at it we were talking about we have Montour, we have March Creek, still have 300 megawatts available there. So I don't see the intersection of those two as reality.

Obviously, happens with the Freedom and Guernsey acquisition is if we do a deal, we would eat into that amount of megawatts that we currently have and therefore Freedom and Guernsey reloads the bank. So that's how we view.

Julien Dumoulin Smith: Got it. Yep. Absolutely. Alright. I'll leave it there. I'll see you guys soon.

Mac McFarland: Thanks, Julien.

Julien Dumoulin Smith: Thank you. Bye.

Operator: That concludes our allotted time for questions. I would now like to turn the call back over to Mac for closing remarks.

Mac McFarland: Yes. So thank you, Michelle, and thanks, everyone, for joining us. And for the Q&A period. We tried to spend some time and I know there's a couple of people still in the queue that we didn't get to. We're happy to take your questions and look forward to seeing everybody the balance of this year and early next year with a busy schedule on the road at conferences. And appreciate everybody's interest in Talen Energy Corporation and we look forward to continuing to execute. Have a great day.

Operator: This concludes today's conference call. Thank you for participating. You may now disconnect.

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