PPL Corp. plans to transfer 88 employees in Allentown to the company’s Luzerne County nuclear power plant amid market speculation that PPL spinoff Talen Energy could soon expand through the acquisition of power plants.
PPL spokesman George Lewis said Monday the employees affiliated with the nuclear plant in engineering and technical support will transition to the Susquehanna nuclear power plant near Berwick over the next 21/2 years. No positions will be eliminated, he said. Some 1,200 people work at the nuclear facility, about 75 miles from Allentown.
“With fewer than 100 [employees] here, 1,200 there, we thought it was best for the future of the plant to transition those jobs to one location,” Lewis said. He said affected workers were notified Friday. The utility employs roughly 1,700 workers in downtown Allentown now.
PPL and a private equity investment firm, Riverstone Holdings Inc., are forming a new company, Talen, that would take over PPL’s generation business. The Allentown-based company will remain in the distribution business.
The deal needs approvals from several regulatory agencies. PPL expects the deal to close during the second quarter.
The 21/2-year transition for employees to move to Susquehanna is based on two factors, Lewis said. It’s related to the plans for Talen to set up its headquarters, while PPL’s lease at PPL Plaza on Hamilton Street, where the nuclear-plant employees work, expires in 2018.
Officials heading the transition to Talen have said the new entity’s long-term headquarters will remain in the Lehigh Valley. Lewis said Monday that nothing new has changed on that front.
Lewis said central support functions and engineering for the other plants will be handled by Talen.
“We have multiple fossil and hydro sites,” Lewis said. “Having multiple [employee] locations makes sense, but with the nuclear plant, when we looked at the staffing and locations, we thought it was best to have everybody move to the plant.
“The plan is to continue to have a central support group for the fossil and hydro plants at Talen headquarters,” Lewis said.
Talen also will have to make a decision on divesting plants to meet federal competitiveness requirements, but Lewis said the company has 12 months from the date of the deal’s closing to decide which plants to sell.
Since last year, PPL has been busy moving other employees. Some in its PPL Supply division went to PPL Plaza to prepare for the spinoff. PPL also announced that the deal would result in about 450 job cuts, only 200 of which would come from layoffs.
Meanwhile, according to some speculation, Talen might soon be in the market for more power, especially from utilities looking to release plants in deregulated states. For example, reports in the financial media recently surfaced indicating that Ohio-based American Electric Power Co. is seeking to sell nearly 8,000 megawatts in generation.
Last August, Paul A. Farr, president of PPL Energy Supply and future president and CEO of Talen Energy, said Talen could expand through the acquisition of power plants even before it has established itself as an independent company.
“We think we know what’s coming on the market in fall and in spring,” he said. “We’re actively following it, and if there was something that was compelling … there wouldn’t be anything that would prevent us from approaching the market right now.”
On Monday, Lewis declined to comment.
“We don’t and will not comment on market rumors and speculations of mergers and acquisitions,” he said.
Paul Patterson, an analyst with Glenrock Associates in New York who follows PPL, said in recent years that the electric industry has been consolidating, and acquisitions are “definitely a means for a company to expand.”
However, he said increased scrutiny among wholesale-power-pool monitors, specifically the PJM Interconnection, which covers the mid-Atlantic, could lessen companies’ expansion plans.
Another energy watcher, Rich Heidorn Jr., editor and publisher of RTO Insider, a publication that covers the wholesale electric industry’s markets, said if Talen were to bid for any American Electric plants, it would try to keep the deal quiet until regulatory approvals are in place for the spinoff from PPL and Riverstone.
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Reporter Sam Kennedy contributed to this story.
